WANHAI — Annual Report 2021

Nov 25, 2021

Stock Code:2615

WAN HAI LINES LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS

With Independent Auditors’ Report For the Years Ended December 31, 2021 and 2020

Address: 10TH FLOOR, 136, SUNG CHIANG ROAD, TAIPEI, TAIWAN Telephone: (02)2567-7961

The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent company only financial statements, the Chinese version shall prevail.

〜 1 〜

Table Of Contents

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Financial Statements (1) Company History (2) Approval Date and Procedures of the Financial Statements (3) New Standards, Amendments and Interpretations adopted (4) Summary of Significant Accounting Policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation to Significant Accounts (7) Related-Party Transactions (8) Pledged Assets (9) Significant Contingencies and Commitments (10) Losses Due to Major Disasters (11) Significant Subsequent Events (12) Others (13) Other Disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in Mainland China (d) Major shareholders (14) Segment Information 9. List of major account titles

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) 電 話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳 真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網 址 Web home.kpmg/tw

Independent Auditors’ Report

To the Board of Directors of Wan Hai Lines Ltd.:

Opinion

We have audited the financial statements of Wan Hai Lines Ltd. (“ the Company” ), which comprise the statement of financial position as of December 31, 2021 and 2020, and the statement of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2021 and 2020, and its financial performance and its cash flows for the year ended December 31, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“ IASs” ), interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of 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 financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Revenue recognition

Please refer to Note(4)(o) “ Revenue” , Note (5)(a) “ Uncertainty associated with the assumptions and estimations for revenue recognition” and Note(6)(u) “Revenue disclosures” of the financial statements.

How the matter was addressed in our audit

The freight revenue is recognized in proportion to the stage of completion of the voyage measured by reference to the proportion of the actual shipping days incurred in balance sheet date. The voyage days is estimated depending on historical experience which involved high uncertainty. Consequently, this is one of the key areas our audit focused on.

〜 3 〜

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

Our principal audit procedures included:

Understanding how the management estimates the voyage days of each route including its method and source; sampling the source data from the system and obtaining the method on how the system compute the voyage days to evaluate the reasonableness of the estimated voyage days of each route from the management.

1. Additions of Property, plant and equipment

Please refer to note(4)(k) “Property, plant and equipment” and note(6)(i) “Property, plant and equipment”.

How the matter was addressed in our audit

The total amount of the Company’s property, plant and equipment accounts for a high proportion of the total assets, and the Company has material additions of property, plant and equipment this year. Consequently, this is one of the key areas our audit focused on.

Our principal audit procedures included:

Checking the total amount of the Company’s Table of Additions to Table of Aggregation Changes. Checking out the huge addition of property, plant and equipment to the relevant vouchers. Performing on-site observation and stocktaking of representative property, plant and equipment.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’ 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 Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 the auditing standards generally accepted in the Republic of China 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 financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the 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.

〜 3-1 〜

1. 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 Company’s internal control.

2. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

3. 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 Company’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 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 Company to cease to continue as a going concern.

4. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

5. Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statement. We are responsible for the direction, supervision and performance of the 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 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.

The engagement partners on the audit resulting in this independent auditors’ report are Rou-Lan, Kuo and Cheng-Chien Chen.

KPMG

Taipei, Taiwan (Republic of China) March 15, 2022

Notes to Readers

The accompanying parent company only financial statements are intended only to present the parent company only financial statements of financial position, financial performance and its cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent company only financial statements, the Chinese version shall prevail.

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(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

BALANCE SHEETS

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note (6)(a)) 1110 Current financial assets at fair value through profit or loss (note (6)(b)) 1137 Current financial assets at amortized cost (note (6)(d)) 1150 Notes receivable, net (notes (6)(f) and 6(u)) 1170 Accounts receivable, net (notes (6)(f), (6)(u) and (7)) 1140 Current contract assets (note (6)(u)) 1200 Other receivables, net (note (7)) 1330 Inventories, net (note (6)(g)) 1475 Receivables from agents (note (7)) 1479 Other current assets, others (note (8) and (9)) Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (note (6)(c)) 1550 Investments accounted for using equity method, net (note (6)(h)) 1600 Property, plant and equipment (notes (6)(i), (8) and (9)) 1755 Right-of-use assets (note (6)(j)) 1760 Investment property, net (notes (6)(k) and (8)) 1780 Intangible assets (note (6)(l)) 1900 Other non-current assets (notes (6)(r), (8) and (9)) Total assets	2021.12.31 Amount % $ 40,113,588 12 6,261,076 2 63,717 - 69,697 - 1,991,562 1 7,835,522 2 8,870,244 3 800,139 - 4,703,644 1 626,921 - 71,336,110 21 4,292,271 1 109,900,767 32 33,657,439 9 120,322,046 35 3,482,654 1 74,245 - 2,593,570 1 274,322,992 79 $ 345,659,102 100	2020.12.31 Amount % 8,553,009 5 4,844,840 3 - - 49,698 - 1,316,196 1 1,530,849 1 5,542,057 3 1,160,891 1 3,073,816 2 438,754 - 26,510,110 16 3,827,784 2 36,937,983 22 20,976,137 13 74,302,608 45 3,472,681 2 80,514 - 809,177 - 140,406,884 84 166,916,994 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note (6)(m)) 2126 Current financial liabilities for hedging (notes (6)(e) and (p)) 2170 Accounts payable (note (7)) 2200 Other payables (note (7)) 2230 Current tax liabilities (note (6)(r)) 2280 Current lease liabilities (notes (6)(p) and (7)) 2320 Current portion of long-term loans (notes (6)(n), (6)(o) and (8)) 2350 Payables to agents (note(7)) 2300 Other current liabilities (notes (u) and (7)) Non-Current liabilities: 2511 Non-current financial liabilities for hedging (notes (6)(e) and (p)) 2530 Bonds payable (note (6)(o)) 2540 Long-term borrowings (notes (6)(n) and (8)) 2570 Deferred tax liabilities (note (6)(r)) 2580 Non-current lease liabilities (notes (6)(p) and (7)) 2640 Accrued pension liabilities-non current (note(6)(q)) 2645 Guarantee deposits received Total liabilities Equity (notes (6)(s) and (t)): 3100 Common stock 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Retained earnings-unappropriated Other equity interest: 3411 Exchange differences on translation of foreign financial statements 3420 Unrealized gains (losses) on financial assets at fair value through other comprehensive income 3450 Gains (losses) on hedging instruments (note(6)(e)) Total equity Total liabilities and equity	2021.12.31	2020.12.31 Amount % - - 818,459 - 7,605,831 5 1,439,458 1 1,087,909 1 6,972,488 4 6,547,118 4 1,259,893 1 178,708 - 25,909,864 16 2,855,649 2 12,600,000 8 12,256,982 7 4,130,138 2 64,825,024 39 416,815 - 20,113 - 97,104,721 58 123,014,585 74 22,182,975 13 1,271,775 1 7,225,691 4 1,519,682 1 14,941,889 9 23,687,262 14 (3,465,395) (2) 75,448 - 150,344 - (3,239,603) (2) 43,902,409 26 166,916,994 100
			Amount %
			$ - - 985,592 - 14,262,175 4 3,466,154 1 10,257,551 3 13,757,890 4 6,478,817 2 1,387,425 - 203,182 - 50,798,786 14 2,576,487 1 9,000,000 3 15,043,038 4 19,032,573 6 104,536,417 30 379,071 - 17,704 - 150,585,290 44 201,384,076 58 24,401,273 7 1,271,775 - 8,354,970 2 3,239,603 1 110,994,900 33 122,589,473 36 (4,617,000) (1) 445,677 - 183,828 - (3,987,495) (1) 144,275,026 42 $ 345,659,102 100

Seeing accompanying notes to financial statements.

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(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share)

4000 Operating revenue (notes (6)(u) and (7)) 5000 Operating costs (notes (6)(g) and (7)) Gross profit 6200 Total administrative expenses 6450 Expected credit loss (gain)(note(6)(f)) Total operating expenses Income from operations Non-operating income and expenses (notes (6)(h) and (6)(w)): 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit (loss) of associates and joint ventures accounted for using equity method Total non-operating income and expenses 7900 Profit before tax 7950 Less: Income tax expenses(note(6)(r)) Net Profit 8300 Other comprehensive income (loss): 8310 Items that may not be reclassified subsequently to profit and loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8331 Gains (losses) on the remeasurements of defined benefit plans, subsidiaries, associates and joint ventures accounted for using equity method 8336 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income, subsidiaries, associates and joint ventures accounted for using equity method 8349 Less: Income tax related to components of other comprehensive income that may not be reclassified subsequently Total items that may not be reclassified subsequently to profit and loss 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation 8368 Gains (losses) on hedging instrument 8399 Less: Income tax related to components of other comprehensive income that may be reclassified to profit or loss Total items that may be reclassified subsequently to profit and loss 8300 Other comprehensive income (net of tax) Total comprehensive income 9750 Basic earnings per share (New Taiwan Dollars) (note (6)(t)) 9850 Diluted earnings per share (New Taiwan Dollars) (note (6)(t))	2021 Amount % $ 116,005,228 100 57,216,967 49 58,788,261 51 4,073,299 4 1,325 - 4,074,624 4 54,713,637 47 53,261 - 284,012 - 1,518,633 1 (1,995,956) (2) 74,112,292 64 73,972,242 63 128,685,879 110 25,342,971 22 103,342,908 88 (31,109) - 301,470 - 20,786 - 68,759 - 6,222 - 366,128 - (1,151,992) (1) 33,484 - 387 - (1,118,121) (1) (751,993) (1) $ 102,590,915 87 $ 42.35 $ 42.27	2020
		Amount % 61,915,516 100 52,728,111 85 9,187,405 15 2,653,366 4 - - 2,653,366 4 6,534,039 11 73,000 - 284,984 - 1,527,174 2 (1,601,126) (2) 7,256,367 12 7,540,399 12 14,074,438 23 2,757,457 5 11,316,981 18 (38,268) - 98,056 - 6,420 - 177,768 - 7,654 - 251,630 - (2,124,502) (3 116,840 - 11,916 - (1,995,746) (3 (1,744,116) (3 9,572,865 15 4.64
		4.63

Seeing accompanying notes to financial statements.

〜 5 〜

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) REVIEWED ONLY, NOT AUDITED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS WAN HAI LINES LTD.

STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2020 Net profit Other comprehensive income Total comprehensive income (loss) Appropriation and distribution of retained earnings: Legal reserve Special reserve appropriated Cash dividends Balance at 2020.12.31 Net profit Other comprehensive income Total comprehensive income (loss) Appropriation and distribution of retained earnings: Legal reserve Special reserve appropriated Cash dividends Stock dividends of ordinary share Balance at December 31, 2021	Stock Common Stock $ 22,182,975 - - - - - - 22,182,975 - - - - - - 2,218,298 $ 24,401,273	Capital Surplus 1,271,775 - - - - - - 1,271,775 - - - - - - - 1,271,775		Retained Earnings	Retained Earnings - Unappropriated 6,488,930 11,316,981 (24,194) 11,292,787 (356,208) (708,982) (1,774,638) 14,941,889 103,342,908 (4,101) 103,338,807 (1,129,279) (1,719,921) (2,218,298) (2,218,298) 110,994,900		Other Equity Items	Gains (losses) on hedging instruments 33,504 - 116,840 116,840 - - - 150,344 - 33,484 33,484 - - - - 183,828	Total
						Foreign Currency Translation Differences Arising from Foreign Operations, Net of Tax (1,352,809) - (2,112,586) (2,112,586) - - - (3,465,395) - (1,151,605) (1,151,605) - - - - (4,617,000)	Unrealized Gains (losses) from financial assets measured at fair value through other comprehensive income (200,376) - 275,824 275,824 - - - 75,448 - 370,229 370,229 - - - - 445,677
			Legal reserve 6,869,483 - - - 356,208 - - 7,225,691 - - - 1,129,279 - - - 8,354,970	Special reserve 810,700 - - - - 708,982 - 1,519,682 - - - - 1,719,921 - - 3,239,603
									36,104,182
									11,316,981 (1,744,116)
									9,572,865
									- - (1,774,638)
									43,902,409 103,342,908 (751,993)
									102,590,915
									- - (2,218,298) -
									144,275,026

Seeing accompanying notes to financial statements.

〜 6 〜

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

STATEMENTS OF CASH FLOWS

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss (gain) / Provision (reversal of provision) for bad debt expense Net (gain) loss on financial assets at fair value through profit or loss Interest expense Interest revenue Dividend income Investment income under the equity method Gain on disposal of property, plant and equipment Loss (gain) on unrealized foreign exchange Gain on lease modification Others Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Decrease (increase) in contract assets Notes receivable Accounts receivable (including related parties) Other receivables Inventories Receivables from agents Other current assets Financial assets at fair value through profit or loss, mandatorily measured at fair value Total changes in operating assets, net Changes in operating liabilities, net: Accounts payable (including related parties) Other payables Payables to agents Other current liabilities Accrued pension liabilities Total changes in operating liabilities, net Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Income taxes paid Net cash provided by operating activities Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortized cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in other receivables due from related parties Acquisition of intangible assets Acquisition of investment property Other non-current assets Interest received Dividends received Net cash used in investing activities Cash flows from financing activities: Proceeds from issuing bonds Repayments of bonds Proceeds from long-term loans Repayment of long-term loans Guarantee deposit Cash dividends paid Lease repayments- principal portions Interest paid Net cash used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2021 $ 128,685,879 12,232,409 55,731 1,325 (1,274,831) 1,995,956 (53,261) (282,715) (74,112,292) (43,567) 82,967 (385,782) (154,861) (61,938,921) (6,304,673) (19,999) (676,691) (544,798) 360,752 (1,629,828) (188,167) (141,405) (9,144,809) 6,656,344 1,051,601 127,532 21,880 (68,853) 7,788,504 (1,356,305) (63,295,226) 65,390,653 (1,085,566) 64,305,087 (163,017) (63,717) (14,338,740) 97,189 (2,784,560) (48,882) (35,687) (2,035,846) 52,161 368,323 (18,952,776) - (3,800,000) 7,887,815 (5,053,769) 185 (2,218,298) (8,591,167) (2,016,498) (13,791,732) 31,560,579 8,553,009 $ 40,113,588	2020 14,074,438 8,134,102 67,247 - (783,642) 1,601,126 (73,000) (284,984) (7,256,367) (139,379) (403,295) (196,596) 5,093
		670,305
		(797,160) (10,242) (641,967) (112,564) 246,003 (929,544) 5,071 8,039
		(2,232,364)
		1,157,952 414,224 180,550 (22,705) (64,113)
		1,665,908
		(566,456)
		103,849
		14,178,287 (116,407)
		14,061,880
		(546,916) - (5,022,920) 194,288 (4,636,500) (21,757) (2,068,722) (230,904) 77,968 371,999
		(11,883,464)
		2,500,000 - 9,650,640 (7,250,083) 14,098 (1,774,638) (5,468,600) (1,623,145)
		(3,951,728)
		(1,773,312) 10,326,321
		8,553,009

Seeing accompanying notes to financial statements.

〜 7 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company History

Wan Hai Lines Ltd. (the Company) was incorporated as a company limited by shares on February 24, 1965, under the approval of the Ministry of Economic Affairs, ROC. The address of the Company’s registered office is 10F, No. 136 Sung Chiang Rd., Taipei City. The Company is primarily involved in the business of international marine transportation, shipping agencies, container storage service, and the sale and rental of vessels and containers.

(2) Approval Date and Procedures of the Financial Statements

The Board of Directors approved and issued the financial statements on March 15, 2022.

(3) New Standards, Amendments and Interpretations adopted:

• (a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2021:

• ●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

• ●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “ Interest Rate Benchmark Reform—Phase 2”

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from April 1, 2021:

• ●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”

• (b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its financial statements:

• －

• ●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”

• －

• ●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”

• ●Annual Improvements to IFRS Standards 2018–2020

• ●Amendments to IFRS 3 “Reference to the Conceptual Framework”

〜 8 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Interpretations Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

Content of amendment Effective date per IASB The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of balance sheet, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. January 1, 2023

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

• ●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

• ●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”

• ●Amendments to IAS 1 “Disclosure of Accounting Policies”

• ●Amendments to IAS 8 “Definition of Accounting Estimates”

• ●Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(4) Summary of Significant Accounting Policies

The accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language financial statements, the Chinese version shall prevail.

The significant accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

• (a) Statement of compliance

These financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”).

〜 9 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• (b) Basis of preparation

• Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:

• 1) Financial instruments at fair value through profit or loss are measured at fair value;

• 2) Financial assets at fair value through other comprehensive income are measured at fair value;

• 3) Hedging financial instruments are measured at fair value;

• 4) The net defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, with a limit based on a defined benefit asset.

• Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which the entity operates. The financial statements are presented in New Taiwan Dollars (TWD), which is the Company’s functional currency. All financial information presented in TWD has been rounded to the nearest thousand.

• (c) Foreign currency

• 1.Foreign currency transaction

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

• 1) an investment in equity securities designated as at fair value through other comprehensive income;

• 2) qualifying cash flow hedges to the extent that the hedges are effective.

• 2.Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

〜 10 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

• (d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as noncurrent.

1. It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

2. It is held primarily for the purpose of trading;

3. It is expected to be realized within twelve months after the reporting period; or

4. The asset is cash or a 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.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as noncurrent.

An entity shall classify a liability as current when:

1. It is expected to be settled in the normal operating cycle;

2. It is held primarily for the purpose of trading;

3. It is due to be settled within twelve months after the reporting period; or

4. The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

5. (e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. The saving deposits which satisfied the definition above and held for the purpose of meeting short-term cash commitments, rather than for investment or other purposes, are reported as cash equivalents.

Bank overdrafts that are repayable on demand and from an integral part of the Company's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

• (f) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

〜 11 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

1.Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

• 1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• ‧it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Fair value through other comprehensive income (FVOCI )

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• ‧it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

〜 12 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

• 3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

• 4) Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

• ‧ the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’ s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

• ‧how the performance of the portfolio is evaluated and reported to the Company’s management;

• ‧the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

• ‧how managers of the business are compensated─e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

• ‧the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

• 5) Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘ principal’ is defined as the fair value of the financial assets on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

〜 13 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

‧contingent events that would change the amount or timing of cash flows;

‧terms that may adjust the contractual coupon rate, including variable rate features;

• ‧prepayment and extension features; and

• ‧terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features).

6) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, receivables from agents, guarantee deposit paid and other financial assets) and contract assets.

The Company measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

‧debt securities that are determined to have low credit risk at the reporting date; and

• ‧other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available (without undue cost or effort). This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and including forward-looking information.

The Company considers a time deposit to have low credit risk when its trading counterparties' credit risk ratings are equivalent to the globally understood definition of ‘investment grade ’.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls. The difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive. ECLs are discounted at the effective interest rate of the financial asset.

〜 14 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

‧significant financial difficulty of the borrower or issuer;

• ‧a breach of contract such as a default or being more than 90 days past due;

• ‧the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

• ‧it is probable that the borrower will enter bankruptcy or other financial reorganization; or

‧the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’ s procedures for recovery of amounts due.

• 7) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

1. Financial liabilities and equity instruments

2. 1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

• 2) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

〜 15 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

3) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

4) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

3.Hedge accounting

The Company designates certain hedging instruments (which include non-derivatives in respect of foreign currency risk) as cash flow hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

At inception of designated hedging relationships, the Company documents the risk management objective and strategy for undertaking the hedge. The Company also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

1) Cash flow hedges

The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under ‘ other equity — gains (losses) on hedging instruments’, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognized hedged item. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously recognized in other comprehensive income and accumulated in equity are removed from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability. Furthermore, if the Company expects that some or all of the loss accumulated in other equity will not be recovered in the future, that amount is immediately reclassified to profit or loss.

〜 16 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively. The discontinuation is accounted for prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in other equity remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial item’ s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in other equity are immediately reclassified to profit or loss.

• (g) Inventories

Fuels purchased by the Company are recorded under inventory account. Inventories are measured at the lower of cost or net realizable value. The cost of inventories consists of all costs of purchase and other costs incurred in bringing the inventories to a salable and useable location and condition. Inventory cost is calculated using the first-in first-out principle.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

• (h) Investment in associates

Associates are those entities in which the Company has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The financial statements include the Company’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual significant influence.

Gains and losses resulting from transactions between the Company and an associate are recognized only to the extent of unrelated Company’s interests in the associate.

When the Company’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. Additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(i) Subsidiaries

The subsidiaries which the Company is holding for controlling are measured under equity method in the financial statement. Under equity method, the net income, other comprehensive income and equity in the financial statement are equivalent to the net income, other comprehensive income and equity which are contributed to the owners of parent in the financial statement.

The changes in ownership of the subsidiaries are recognized as equity transaction.

〜 17 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

(j) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

• (k) Property, plant, and equipment

• 1.Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

• 2.Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

3.Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

The estimated useful lives of property, plant and equipment are as follows:	for current and comp
1)Buildings	23～56 years
2)Vessel equipment	2～18 years
3)Major component of vessels: docking repair assets	2.5 years
4)Containers	1～10 years
5)Privileged wharf equipment	2～15 years
6)Other equipment	3～15 years

Depreciation methods, useful lives and residual values, are reviewed at each reporting date, and adjusted if appropriate.

〜 18 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

(l) Leases

At inception of a contract, the Company assesses whether a 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.

• (i) As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method 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. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

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

• － fixed payments, including in-substance fixed payments;

• － variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• －

• amounts expected to be payable under a residual value guarantee; and

• － payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• －

• there is a change in future lease payments arising from the change in an index or rate; or

• － there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or

• － there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

• － there is a change of its assessment on whether it will exercise a extension or termination option; or

• －

• there is any lease modifications

〜 19 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

If an arrangement contains lease and non-lease components, the Company will allocate the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Company has elected not to recognize right-of-use assets and lease liabilities for shortterm leases of vessels, buildings, containers and other equipment that have a lease term of 12 months or less and leases of low-value assets, including IT equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

As a practical expedient, the Company elects not to assess whether all rent concessions that meets all the following conditions are lease modifications or not:

• －

• the rent concessions occurring as a direct consequence of the COVID-19 pandemic;

• － the change in lease payments that resulted in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

• － any reduction in lease payments that affects only those payments originally due on, or before, June 30, 2022; and

• －

• there is no substantive change in other terms and conditions of the lease.

In accordance with the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

• (ii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

〜 20 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

• (m) Intangible assets

• 1.Recognition and measurement

Goodwill arising from the acquisition of a subsidiary is measured at cost less accumulated impairment loss.

Expenses related to research activities are recognized as profit of loss incurred.

Development expenditures are made only when they can be reliably measured, the technical or commercial viability of the product or process has been achieved, it is probable that future economic benefits will flow to the Company, and the Company intends and has sufficient resources to complete the development and use or sell the asset be capitalized. Other development expenditures are recognized in profit or loss as incurred. Subsequent to original recognition, capitalized development expenditure is measured at its cost less accumulated amortization and accumulated impairment.

Other intangible assets, including software and trademarks, that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

2.Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

• 3.Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

1)Software	2～5	years
2)Trademarks	3～10	years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (n) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets and deferred tax assets ) to determine whether there is any indication of impairment. If any such indication exists, then the asset’ s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

〜 21 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

• (o) Revenue

• 1.Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’s main types of revenue are explained below.

• 1) Service revenue

The Company provides vessel transportation services and recognizes revenue using percentageof-completion of voyage method. If the Company has recognized revenue, but not have the right to collect bill, then the entitlement to consideration is recognized as a contract asset. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional. When the payment has excessed the services rendered, then the entitlement to consideration is recognized as a contract liability.

• 2) Rental revenue

The Company provides rental of vessels, slottage rental expense and containers and recognizes revenue using straight-line method over the lease term.

• 3) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

• (p) Government grants

The Company recognizes an unconditional government grant as other income when the grant becomes receivable. Other government grants related to assets are initially recognized as deferred income at fair value if there is reasonable assurance that they will be received and the Company will comply with the conditions associated with the grant; they are then recognized in profit or loss as other income on a systematic basis over the useful life of the asset. Grants that compensate the Company for expenses or losses incurred are recognized in profit or loss on a systematic basis in the periods in which the expenses or losses are recognized.

〜 22 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• (q) Employee benefits

• 1.Defined contribution plans

Obligations for contributions to the defined contribution plans are expensed as related service is provided.

• 2.Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling if any (excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity.

The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

• 3.Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company 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.

• (r) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

The Company has determined that interest and penalties related to income taxes, including uncertain tax treatment, do not meet the definition of income taxes, and therefore accounted for them under IAS37.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

〜 23 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

• 1.temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

• 2.temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• 3.taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

• 1.the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

• 2.the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

• 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

• (s) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as employee compensation.

(t) Operating segments

The operating segment information is disclosed in the Company's consolidated financial statements; therefore, the Company does not disclose segment information in these financial statements.

〜 24 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the future period.

• (a) Revenue recognition

The Company’s cargo freight revenue is recognized using the percentage-of-completion of voyage method. The method is based on historical trend, and the high uncertainty of voyage days will lead to adjustments of the estimated value.

(6) Explanation to Significant Accounts

• (a) Cash and cash equivalents

Cash Savings accounts Time deposits Cash and cash equivalents in statement of cash flows	2021.12.31 $ 90,539 31,842,214 8,180,835 $ 40,113,588	2020.12.31
		54,325 8,016,024 482,660
		8,553,009

Please refer to Note 6(x) for the interest rate analysis of financial assets and liabilities.

• (b) Financial assets and liabilities at fair value through profit or loss

Financial assets and liabilities at fair value through profit or lo	ss
Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Stocks listed on domestic markets Emerging stocks on domestic markets Total	2021.12.31 $ 6,249,968 11,108 $ 6,261,076	2020.12.31
		4,836,764 8,076
		4,844,840

1.For the net gain or loss on fair value on financial instruments at FVTPL, please refer to Note 6(w).

2.As of December 31, 2021 and 2020, the Company's financial assets were not pledged as collateral.

• (c) Financial assets at fair value through other comprehensive income

Equity investments at fair value through other comprehensive income Stocks listed on domestic markets Stocks unlisted on domestic markets Total	2021.12.31 $ 3,812,966 479,305 $ 4,292,271	2020.12.31
		3,377,664 450,120
		3,827,784

〜 25 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

1. Equity investments at fair value through other comprehensive income

The Company designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term for strategic purposes.

For the years ended December 31, 2021 and 2020, no strategic investments were disposed, and there were no transfers of any cumulative gain or loss within equity relating to these investments.

For the years ended December 31, 2021 and 2020, the dividends of $119,584 thousand and $117,358 thousand related to equity investments at fair value through other comprehensive income, were recognized.

1. For credit risk and market risk, please refer to Note 6(y).

2. As of December 31, 2021 and 2020, the financial assets of the Company had not been pledged as collateral.

3. (d) Financial assets at amortized cost

Current

2021.12.31 $ 63,717	2020.12.31
	-

Financial assets at amortized cost are restricted bank deposits that do not meet the requirement of cash equivalents.

The Company's financial assets at amortized cost were not pledged as collateral.

The Company's degree of exposure to credit risk and currency risk, please refer to note 6(x).

• (e) Financial instruments used for hedging

The amounts at the reporting date relating to the lease liabilities designated as hedging instruments were as follows:

were as follows:
Cash flow hedge: Financial liabilities used for hedging: Current lease liabilities Non-current lease liabilities Total	2021.12.31 $ 985,592 2,576,487 $ 3,562,079	2020.12.31
		818,459 2,855,649
		3,674,108

The Company’s strategy is to use lease liabilities to hedge its estimated foreign currency exposure in respect of highly probable future cash revenues. The amounts at the reporting date relating to the items designated as hedging instruments were as follows:

Items to be hedged	Financial assets or liabilities designated to be hedging instruments	Fair va	lue	Time period(s) during which the future cash flows Time period(s) during which the related gains or losses are expected to be recognized in the income generated statement 2021～2026 2021～2026 2021～2028 2021～2028 2021 2020 $ 33,484 116,840	Time period(s) during which the future cash flows Time period(s) during which the related gains or losses are expected to be recognized in the income generated statement 2021～2026 2021～2026 2021～2028 2021～2028 2021 2020 $ 33,484 116,840
		2021.12.31 $ 2,525,174 1,036,905	2020.12.31
Freight revenue (USD) WHL terminal revenue (JPY)	Lease liabilities Lease liabilities Items		2,312,368 1,361,740		2021～2026 2021～2028 2020
Amounts recognized as other comprehensive income					116,840

〜 26 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

For the years ended December 31, 2021 and 2020, no ineffective portion of cash flow hedge that should be recognized in profit or loss, for reconciliation of each component of equity, and an analysis of other comprehensive income, please refer to note (6)(s).

• (f) Notes receivable and accounts receivable

Notes receivable Accounts receivable Less: Allowance for doubtful receivables	2021.12.31 $ 69,697 1,993,245 (1,683) $ 2,061,259	2020.12.31 49,698 1,316,554 (358) 1,365,894

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables on December 31, 2021 and 2020. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information. The loss allowance provision as of December 31, 2021 and 2020 was determined as follows:

Current Overdue 0~30 days Overdue 31~120 days Overdue 121~365 days Overdue more than 365 days Current Overdue 0~30 days Overdue 31~120 days Overdue 121~365 days Overdue more than 365 days		2021.12.31
	Gross carrying amount $ 1,920,387 116,113 26,028 231 183 $ 2,062,942	Weighted-average loss rate 0%~0.0006% 0%~0.0007% 0%~0.002% 0%~0.003% 0%~100% 2020.12.31	Loss allowance provision
			1,683 - - - -
			1,683
		Weighted-average loss rate 0%~0.0006% 0%~0.0007% 0%~0.002% 0%~0.003% 0%~100%	Loss allowance provision
			358 - - - -
			358

The movement in the allowance for notes and accounts receivable were as follows:

Beginning balance Impairment losses recognized Ending balance (equals to beginning balance)	2021 $ 358 1,325 $ 1,683	2020
		358 -
		358

Please refer to (6)(x) for the credit risks and the currency risks of the notes receivable, accounts receivable, other receivables and receivables from agents of the Company.

〜 27 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

As of December 31, 2021 and 2020, the notes and trade receivable of the Company had not been pledged as collateral.

• (g) Inventories

Light marine diesel oil Heavy marine diesel oil Fresh lubricating oil Subtotal Less: Allowance for inventory valuation and obsolescence losses Total	2021.12.31 $ 78,685 713,060 8,394 800,139 - $ 800,139	2020.12.31 119,331 1,048,866 5,841 1,174,038 (13,147) 1,160,891

For the year ended December 31, 2021, the net realizable value increased and the reversals amounted to $13,147 thousand were recognized in cost of goods sold because the previous reason that caused the net realizable value of inventories lower than its cost has disappeared.

For the year ended December 31, 2020, the write-downs of inventories to net realizable value amounted to $12,987 thousand. The write-downs were included in operating costs.

As of December 31, 2021 and 2020, the Company’s inventories were not pledged as collateral.

• (h) Investments accounted for using equity method

A summary of the Company’s financial information for investments accounted for using the equity method at the reporting date is as follows:

method at the reporting date is as follows:
Subsidiaries Associates	2021.12.31 $ 108,877,928 1,022,839 $ 109,900,767	2020.12.31
		35,967,363 970,620
		36,937,983

1. Subsidiaries

Please refer to the consolidated financial statements for the years ended December 31, 2021.

2. Associates

For the first half of 2017, the Company acquired 16.5% of the shares of Hai Phong International Container Terminal Company Ltd. (HICT) for USD6,459 thousand in cash. The Company gets one of HICT's directors, and participated its finance and operating policy decision. Therefore, the Company has significant influence on it, and accounts for it using equity method.

The financial information of individually non-significant equity method associates included in the financial statements were as follows:

financial statements were as follows:
The carrying amount of individually non-significant associates' equity	2021.12.31 $ 1,022,839	2020.12.31
		970,620

〜 28 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Attributable to the Company: Profit (loss) from continuing operations Total comprehensive income	2021 $ 125,921 $ 125,921	2020
		149,785
		149,785

3.Collateral

As of December 31, 2021 and 2020, the Company's investments accounted for using equity method were not pledged as collateral.

(i) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company for the years ended December 31, 2021 and 2020, were as follows:

Cost: Balance at January 1, 2021 Additions Reclassification Disposals Balance at December 31, 2021 Balance at January 1, 2020 Additions Reclassification Disposals Balance at December 31, 2020 Depreciation and impairment loss: Balance at January 1, 2021 Depreciation Disposals Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Disposals Balance at December 31, 2020 Carrying amounts: Balance at December 31, 2021 Balance at January 1, 2020 Balance at December 31, 2020	Land $ 2,194,439 - - - $ 2,194,439 $ 620,477 1,573,962 - - $ 2,194,439 $ - - - $ - $ - - - $ - $ 2,194,439 $ 620,477 $ 2,194,439	Buildings 766,164 - - - 766,164 123,736 642,428 - - 766,164 77,942 15,323 - 93,265 72,067 5,875 - 77,942 672,899 51,669 688,222	Vessels 3,903,402 63,851 - - 3,967,253 3,814,756 88,646 - - 3,903,402 3,133,746 107,070 - 3,240,816 3,029,103 104,643 - 3,133,746 726,437 785,653 769,656	Containers 27,654,227 14,829,314 - (365,949) 42,117,592 25,988,525 2,276,647 - (610,945) 27,654,227 11,968,137 2,317,818 (315,291) 13,970,664 10,980,636 1,559,186 (571,685) 11,968,137 28,146,928 15,007,889 15,686,090	Other equipment 804,320 401,706 68,349 (13,743) 1,260,632 746,315 50,957 26,159 (19,111) 804,320 432,605 101,032 (13,743) 519,894 373,240 78,476 (19,111) 432,605 740,738 373,075 371,715	Privileged wharf equipment 2,307,365 38,697 3,804 - 2,349,866 2,031,044 96,301 180,020 - 2,307,365 1,041,350 132,518 - 1,173,868 916,265 125,085 - 1,041,350 1,175,998 1,114,779 1,266,015	Total 37,629,917 15,333,568 72,153 (379,692)
							52,655,946
							33,324,853 4,728,941 206,179 (630,056)
							37,629,917
							16,653,780 2,673,761 (329,034)
							18,998,507
							15,371,311 1,873,265 (590,796)
							16,653,780
							33,657,439
							17,953,542
							20,976,137

As of December 31, 2021 and 2020, the property, plant and equipment of the Company had been pledged as collateral for long-term borrowings and guaranteed financing; please refer to note (8).

〜 29 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

(j ) Right-of-use assets

The Company leases many assets including wharfs, vessels, containers, and other equipment. Information about leases for which the Company as a lessee is presented below:

Cost: Balance as of January 1, 2021 Additions Decreases Remeasurement Balance as of December 31, 2021 Balance as of January 1, 2020 Additions Decreases Remeasurement Balance as of December 31, 2020 Accumulated depreciation and impairment losses: Balance as of January 1, 2021 Depreciation for the year Decreases Balance as of December 31, 2021 Balance as of January 1, 2020 Depreciation for the year Decreases Balance as of December 31, 2020 Carrying amount: Balance as of December 31, 2021 Balance as of January 1, 2020 Balance as of December 31, 2020	Wharfs $ 4,231,562 - - (2,201) $ 4,229,361 $ 3,595,337 1,276 - 634,949 $ 4,231,562 $ 870,303 435,172 - $ 1,305,475 $ 432,346 437,957 - $ 870,303 $ 2,923,886 $ 3,162,991 $ 3,361,259	Vessels 77,617,146 - (32,636,632) 84,380,963 129,361,477 86,246,985 14,294,058 (12,635,174) (10,288,723) 77,617,146 9,083,887 8,368,879 (2,915,431) 14,537,335 5,454,565 5,350,361 (1,721,039) 9,083,887 114,824,142 80,792,420 68,533,259	Containers 3,078,058 840,462 (2,123) 54,349 3,970,746 1,375,646 1,710,439 (105,739) 97,712 3,078,058 684,948 722,467 (2,123) 1,405,292 339,996 450,691 (105,739) 684,948 2,565,454 1,035,650 2,393,110	Others 25,507 - - - 25,507 14,972 11,706 (1,171) - 25,507 10,527 6,416 - 16,943 4,619 6,398 (490) 10,527 8,564 10,353 14,980	Total 84,952,273 840,462 (32,638,755) 84,433,111 137,587,091 91,232,940 16,017,479 (12,742,084) (9,556,062) 84,952,273 10,649,665 9,532,934 (2,917,554) 17,265,045 6,231,526 6,245,407 (1,827,268) 10,649,665 120,322,046 85,001,414 74,302,608

〜 30 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• (k) Investment property

Investment property comprises office buildings that are leased to third parties under operating leases, including properties that are held as right-of-use assets, as well as properties that are owned by the Company. The leases of investment properties contain an initial non-cancellable lease term of 2 to 3 years, with the partial lessees having the options to extend at the end of the term.

For all investment property leases, the rental income is fixed under the contracts. Information about investment property of the Company is presented below:

Cost: Balance at January 1, 2021 Purchases Balance at December 31, 2021 Balance at January 1, 2020 Purchases Balance at December 31, 2020 Depreciation and impairment losses: Balance at January 1, 2021 Depreciation for the year Balance at December 31, 2021 Balance at January 1, 2020 Depreciation for the year Balance at December 31, 2020 Carrying amount: Balance at December 31, 2021 Balance at January 1, 2020 Balance at December 31, 2020 Fair value: Balance at December 31, 2021 Balance at December 31, 2020	Owned property Land and improvements Buildings Total $ 2,828,223 663,883 3,492,106 - 35,687 35,687 $ 2,828,223 699,570 3,527,793 $ 1,269,509 153,875 1,423,384 1,558,714 510,008 2,068,722 $ 2,828,223 663,883 3,492,106 $ - 19,425 19,425 - 25,714 25,714 $ - 45,139 45,139 $ - 3,995 3,995 - 15,430 15,430 $ - 19,425 19,425 $ 2,828,223 654,431 3,482,654 $ 1,269,509 149,880 1,419,389 $ 2,828,223 644,458 3,472,681 $ 4,021,029 $ 3,820,400	Total
	Land and improvements $ 2,828,223 - $ 2,828,223 $ 1,269,509 1,558,714 $ 2,828,223 $ - - $ - $ - - $ - $ 2,828,223 $ 1,269,509 $ 2,828,223
		3,492,106 35,687
		3,527,793
		1,423,384 2,068,722
		3,492,106
		19,425 25,714
		45,139
		3,995 15,430
		19,425
		3,482,654
		1,419,389
		3,472,681

〜 31 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

The fair value of investment properties (as measure or disclosed in the financial statements) in Taiwan at December 31, 2021 and 2020 was based on valuation by a qualified independent appraiser who has recent valuation experience in the location and category of the investment property being valued. The yield method under the income approach would have been used by calculating cash flow generated from rental operations if there was no active market for the investment properties. The inputs of levels of fair value hierarchy in determining the fair value is classified to Level 3. The ranges of yields applied to the net annual rentals used to determine the fair value of properties in the year of 2021 and 2020 were as follows:

Location Taiwan	2021 2020 1.58%-2.18% 1.59%-2.11%

The investment property is a commercial real estate which was bought for operation planning on December 31, 2021 and 2020. That property has been currently leasing out for rental income, and no contingent rents are charged. The rent revenue is $40,417 thousand and $16,629 thousand for the year 2021 and 2020, respectively.

The details of investment property that has been pledged as collateral for long-term borrowings and financing lines on December 31, 2021, please refer to note (8).

As of December 31, 2020, the investment property of the Company had not been pledged as collateral.

(l) Intangible assets

The costs and amortization of the intangible assets of the Company for the years ended December 31, 2021 and 2020 were as follows:

Costs: Balance at January 1, 2021 Additions Reclassification Disposals Balance at December 31, 2021 Balance at January 1, 2020 Additions Reclassification Disposals Balance at December 31, 2020	Computer software $ 149,118 48,814 580 (46,390) $ 152,122 $ 155,510 21,464 49,719 (77,575) $ 149,118	Trademarks 4,057 68 - (82) 4,043 4,081 293 - (317) 4,057	Total 153,175 48,882 580 (46,472) 156,165 159,591 21,757 49,719 (77,892) 153,175

〜 32 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Amortization and impairment loss: Balance at January 1, 2021 Amortization for the year Disposals Balance at December 31, 2021 Balance at January 1, 2020 Amortization for the year Disposals Balance at December 31, 2020 Carrying amounts: Balance at December 31, 2021 Balance at December 31, 2020 Balance at January 1, 2020	Computer software $ 71,237 55,304 (46,390) $ 80,151 $ 81,991 66,821 (77,575) $ 71,237 $ 71,971 $ 77,881 $ 73,519	Trademarks 1,424 427 (82) 1,769 1,315 426 (317) 1,424 2,274 2,633 2,766	Total 72,661 55,731 (46,472) 81,920 83,306 67,247 (77,892) 72,661 74,245 80,514 76,285

1. Recognition of amortization and impairment

The amortization of intangible assets and their impairment losses are included in the statement of comprehensive income:

Operating costs Operating expense (m) Short-term borrowings Unsecured bank loans Unused short-term credit lines	2021 $ 27,764 $ 27,967 2021.12.31 $ - $ 4,774,432	2020
		20,655
		46,592
		2020.12.31
		-
		3,732,456

• 1.Issuance and repayment of short-term borrowings

For the years ended December 31, 2021 and 2020, the proceeds from short-term borrowings amounted to $1,220,000 thousand and $9,420,000 thousand respectively and the repayments amounted to $1,220,000 thousand and $9,420,000 thousand respectively.

• 2.Collateral for bank loan

There were no assets pledged as collateral for the short-term borrowings of the Company.

〜 33 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• (n) Long-term borrowings

The borrowings were summarized as follows:

Unsecured bank loans - USD Unsecured bank loans - TWD Secured bank loans - USD Secured bank loans - TWD Commercial paper Less: Discount on commercial paper Less: Current portion Total Unused long-term credit lines Range of interest rates	Expiration date	2021.12.31 $ 466,678 500,000 9,133,125 3,013,000 4,810,000 (948) (2,878,817) $ 15,043,038 $ 25,130,760 0.20%~1.11%	2020.12.31 695,475 2,150,000 7,399,097 1,949,667 2,810,000 (139) (2,747,118)
	2022/12/21-2024/02/11 2023/12/08 2022/10/23-2026/10/15 2040/10/08-2041/05/04 2023/06/11-2025/01/20
			12,256,982
			15,762,000
			0.26%~2.80%

For information on the Company's interest risk, currency risk and liquidity risk, please refer to note 6(x).

• 1.Issuance and repayment of long-term borrowings

For the years ended December 31, 2021 and 2020, the proceeds from long-term borrowings amounted to $7,887,815 thousand and $9,650,640 thousand respectively, and the repayment amounted to $5,053,769 thousand and $7,250,083 thousand, respectively.

• 2.Collateral for long-term borrowings

For the collateral for long-term borrowings, please refer to note (8). The Company applied for credit lines from banks, but had not pledged any asset as collateral, and the assets will be pledged as collateral at the time of drawdown. As of December 31, 2021, the unused long-term credit lines are $10,616,150 thousand.

• (o) Bonds payable

Unsecured bond-2017 first domestic bond issue Unsecured bond-2019 first domestic bond issue Unsecured bond-2019 second domestic bond issue Unsecured bond-2020 first domestic bond issue Total Current Non-current Total			2021.12.31
	Currency	Interest rate collars	Expiration Amount 2022/06/26 $ 2,100,000 2022/06/18~2024/06/18 4,800,000 2024/10/07~2026/10/07 3,200,000 2025/10/23 2,500,000 $ 12,600,000 $ 3,600,000 9,000,000 $ 12,600,000
	TWD TWD TWD TWD	1.55% 0.95%~1.05% 0.97%~1.07% 0.97%

〜 34 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Unsecured bond-2014 first domestic bond issue Unsecured bond-2016 first domestic bond issue Unsecured bond-2017 first domestic bond issue Unsecured bond-2019 first domestic bond issue Unsecured bond-2019 second domestic bond issue Unsecured bond-2020 first domestic bond issue Total Current Non-current Total			2020.12.31
	Currency	Interest rate collars	Expiration Amount 2021/08/14 $ 800,000 2021/06/21 3,000,000 2022/06/26 2,100,000 2022/06/18~2024/06/18 4,800,000 2024/10/07~2026/10/07 3,200,000 2025/10/23 2,500,000 $ 16,400,000 $ 3,800,000 12,600,000 $ 16,400,000
	TWD TWD TWD TWD TWD TWD	1.95% 1.18% 1.55% 0.95%~1.05% 0.97%~1.07% 0.97%

1. Unsecured bond-2014 first domestic bond issue

The Company issued an unsecured corporate bond in August 2014. It was the Company’s first domestic bond issue in 2014 and was effective upon submission to the regulatory authority on June 17, 2014. The issuance terms were as follows:

• 1) Issue amount

TWD 1,800,000 thousand. There are two series of bonds categorized by the terms, with series A amounting to TWD 1,000,000 thousand and series B amounting to TWD 800,000 thousand.

• 2) Nominal amount

Par value TWD 1,000 thousand per unit.

• 3) Issuance period

The issuance dates are August 14, 2014; the maturity periods for series A and B are five and seven years, respectively.

• 4) Issued price: at par value

• 5) Nominal interest rate

• 1) Series A: 1.65%

• 2) Series B: 1.95%

• 6) Payment of interest: The interest is paid once a year by simple interest and is rounded to the closest digit. Interest payment is postponed to the following business day if the repayment date is on a non-business day, excluding additional interest. There is no additional interest for the period after the maturity date if the bondholders apply for repayment after that date.

• 7) Redemption on the maturity date

The ordinary bonds will be redeemed at par on the maturity date.

〜 35 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

8) Bond form: No physical bonds were released; the bonds were registered with TDCC.

• 9) Trustee

The trustee is Hua Nan Commercial Bank Ltd., which represents the bondholders’ interest and executes the responsibility of monitoring the duties of the Company under the contractual agreement. Holders of the bonds agree with the rights and responsibilities represented by the trustee, regardless of the date of acquiring the Company’s bonds. Bondholders can review the content of the representation agreement during the office hours of the trustee.

• 10) Agency for payment of principal and interest

Hua Nan Commercial Bank Ltd., Cheng Tung Branch is assigned for handling payments of the principal and interest according to the bondholder list provided by TDCC.

• 11) Underwriter: None.

• 12) Announcement

The related information can be acquired from the Market Observation Post System.

1. Unsecured bond-2016 first domestic bond issue

The Company issued an unsecured corporate bond in June 2016. It was the Company’ s first domestic bond issue in 2016 and was effective upon submission to the regulatory authority on June 14, 2016. The issuance terms were as follows:

• 1) Issue amount

TWD 3,000,000 thousand.

• 2) Nominal amount

Par value TWD 1,000 thousand per unit.

• 3) Issuance period

The issuance date is June 21, 2016; the maturity date is June 21, 2021; the maturity period is five years.

• 4) Issued price: at par value

• 5) Nominal interest rate: 1.18%

• 6) Payment of interest: The interest is paid once a year by simple interest and is rounded to the closest digit. Interest payment is postponed to the following business day if the repayment date is on a non-business day, excluding additional interest. There is no additional interest for the period after the maturity date if the bond holders apply for repayment after that date.

• 7) Redemption on the maturity date

The ordinary bonds will be redeemed at par on the maturity date.

8) Bond form: No physical bonds were released; the bonds were registered with TDCC.

〜 36 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• 9) Trustee

The trustee is Hua Nan Commercial Bank Ltd., which represents the bondholders’ interest and executes the responsibility of monitoring the duties of the Company under the contractual agreement. Holders of the bonds agree with the rights and responsibilities represented by the trustee, regardless of the date of acquiring the Company’s bonds. Bondholders can review the content of the representation agreement during the office hours of the trustee.

• 10) Agency for payment of principal and interest

Hua Nan Commercial Bank Ltd., Cheng Tung Branch is assigned for handling payments of the principal and interest according to the bondholder list provided by TDCC.

• 11) Underwriter: MasterLink Securities Corporation.

• 12) Announcement

The related information can be acquired from the Market Observation Post System.

1. Unsecured bond-2017 first domestic bond issue

The Company issued an unsecured corporate bond in June 2017. It was the Company’ s first domestic bond issue in 2017 and was effective upon submission to the regulatory authority on June 15, 2017. The issuance terms were as follows:

• 1) Issue amount

TWD 2,100,000 thousand.

• 2) Nominal amount

Par value TWD 1,000 thousand per unit.

• 3) Issuance period

The issuance date is June 26, 2017; the maturity date is June 26, 2022; the maturity period is five years.

• 4) Issued price: at par value

• 5) Nominal interest rate: 1.55%

• 6) Payment of interest: The interest is paid once a year by simple interest and is rounded to the closest digit. Interest payment is postponed to the following business day if the repayment date is on a non-business day, excluding additional interest. There is no additional interest for the period after the maturity date if the bond holders apply for repayment after that date.

• 7) Redemption on the maturity date

The ordinary bonds will be redeemed at par on the maturity date.

8) Bond form: No physical bonds were released; the bonds were registered with TDCC.

9) Trustee

The trustee is Hua Nan Commercial Bank Ltd., which represents the bondholders’ interest and executes the responsibility of monitoring the duties of the Company under the contractual agreement. Holders of the bonds agree with the rights and responsibilities represented by the trustee, regardless of the date of acquiring the Company’s bonds. Bondholders can review the content of the representation agreement during the office hours of the trustee.

〜 37 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• 10) Agency for payment of principal and interest

Hua Nan Commercial Bank Ltd., Cheng Tung Branch is assigned for handling payments of the principal and interest according to the bondholder list provided by TDCC.

• 11) Underwriter: Yuanta Securities Corporation is the primary underwriter.

• 12) Announcement

The related information can be acquired from the Market Observation Post System.

1. Unsecured bond-2019 first domestic bond issue

The Company issued an unsecured corporate bond in June 2019. It was the Company’ s first domestic bond issue in 2019 and was effective upon submission to the regulatory authority on June 6, 2019. The issuance terms were as follows:

• 1) Issue amount

TWD 4,800,000 thousand. There are two series of bonds categorized by the terms, with series A amounting to TWD 1,500,000 thousand and series B amounting to TWD 3,300,000 thousand.

• 2) Nominal amount

Par value TWD 1,000 thousand per unit.

• 3) Issuance period

The issuance dates are June 18, 2019; the maturity periods for series A and B are three and five years, respectively.

• 4) Issued price: at par value

• 5) Nominal interest rate

• 1) Series A: 0.95%

• 2) Series B: 1.05%

• 6) Payment of interest: The interest is paid once a year by simple interest and is rounded to the closest digit. Interest payment is postponed to the following business day if the repayment date is on a non-business day, excluding additional interest. There is no additional interest for the period after the maturity date if the bondholders apply for repayment after that date.

• 7) Redemption on the maturity date

The ordinary bonds will be redeemed at par on the maturity date.

8) Bond form: No physical bonds were released; the bonds were registered with TDCC.

• 9) Trustee

The trustee is Jih Sun International Bank Ltd., which represents the bondholders’ interest and executes the responsibility of monitoring the duties of the Company under the contractual agreement. Holders of the bonds agree with the rights and responsibilities represented by the trustee, regardless of the date of acquiring the Company’s bonds. Bondholders can review the content of the representation agreement during the office hours of the trustee.

〜 38 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• 10) Agency for payment of principal and interest

Jih Sun International Bank Ltd., Xinyi Branch is assigned for handling payments of the principal and interest according to the bondholder list provided by TDCC.

• 11) Underwriter: Yuanta Securities Corporation is the primary under writer.

• 12) Announcement

The related information can be acquired from the Market Observation Post System.

1. Unsecured bond-2019 second domestic bond issue

The Company issued an unsecured corporate bond in October 2019. It was the Company’s second domestic bond issue in 2019 and was effective upon submission to the regulatory authority on September 27, 2019. The issuance terms were as follows:

• 1) Issue amount

TWD 3,200,000 thousand. There are two series of bonds categorized by the terms, with series A amounting to TWD 1,200,000 thousand and series B amounting to TWD 2,000,000 thousand.

• 2) Nominal amount

Par value TWD 1,000 thousand per unit.

• 3) Issuance period

The issuance dates are October 17, 2019; the maturity periods for series A and B are five and seven years, respectively.

• 4) Issued price: at par value

• 5) Nominal interest rate

• 1) Series A: 0.97%

• 2) Series B: 1.07%

• 6) Payment of interest: The interest is paid once a year by simple interest and is rounded to the closest digit. Interest payment is postponed to the following business day if the repayment date is on a non-business day, excluding additional interest. There is no additional interest for the period after the maturity date if the bondholders apply for repayment after that date.

• 7) Redemption on the maturity date

The ordinary bonds will be redeemed at par on the maturity date.

8) Bond form: No physical bonds were released; the bonds were registered with TDCC.

• 9) Trustee

The trustee is Jih Sun International Bank Ltd., which represents the bondholders’ interest and executes the responsibility of monitoring the duties of the Company under the contractual agreement. Holders of the bonds agree with the rights and responsibilities represented by the trustee, regardless of the date of acquiring the Company’s bonds. Bondholders can review the content of the representation agreement during the office hours of the trustee.

〜 39 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• 10) Agency for payment of principal and interest

Jih Sun International Bank Ltd., Xinyi Branch is assigned for handling payments of the principal and interest according to the bondholder list provided by TDCC.

• 11) Underwriter: Master Link Securities Corporation is the primary under writer.

• 12) Announcement

The related information can be acquired from the Market Observation Post System.

1. Unsecured bond-2020 first domestic bond issue

The Company issued an unsecured corporate bond in June 2016. It was the Company’ s first domestic bond issue in 2020 and was effective upon submission to the regulatory authority on October 15, 2020. The issuance terms were as follows:

• 1) Issue amount

TWD 2,500,000 thousand.

• 2) Nominal amount

Par value TWD 1,000 thousand per unit.

• 3) Issuance period

The issuance date is October 23, 2020; the maturity date is October 23, 2025; the maturity period is five years.

• 4) Issued price: at par value

• 5) Nominal interest rate: 0.97%

• 6) Payment of interest: The interest is paid once a year by simple interest and is rounded to the closest digit. Interest payment is postponed to the following business day if the repayment date is on a non-business day, excluding additional interest. There is no additional interest for the period after the maturity date if the bond holders apply for repayment after that date.

• 7) Redemption on the maturity date

The ordinary bonds will be redeemed at par on the maturity date.

8) Bond form: No physical bonds were released; the bonds were registered with TDCC.

9) Trustee

The trustee is Jih Sun International Bank, LTD. which represents the bondholders’ interest and executes the responsibility of monitoring the duties of the Company under the contractual agreement. Holders of the bonds agree with the rights and responsibilities represented by the trustee, regardless of the date of acquiring the Company’s bonds. Bondholders can review the content of the representation agreement during the office hours of the trustee.

• 10) Agency for payment of principal and interest

Jih Sun International Bank Xinyi Branch, LTD. is assigned for handling payments of the principal and interest according to the bondholder list provided by TDCC.

〜 40 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• 11) Underwriter: MasterLink Securities Corporation is the primary underwriter.

• 12) Announcement

The related information can be acquired from the Market Observation Post System.

• (p) Lease liabilities

The amounts of lease liabilities were as follows:

Current Non-current	2021.12.31 $ 14,743,482 $ 107,112,904	2020.12.31
		7,790,947
		67,680,673

Please refer to note (6)(x) for the analyses of the due date.

For the year ended December 31, 2021 and 2020, the Company’ s lease liabilities recognized as current financial liabilities for hedging were $985,592 thousand and $818,459 thousand, non-current financial liabilities for hedging were $2,576,487 thousand and $2,855,649 thousand, current lease liabilities were $13,757,890 thousand and $6,972,488 thousand, and non-current lease liabilities were $104,536,417 thousand and $64,825,024 thousand, respectively.

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Variable lease payments not included in the measurement of lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value, excluding short-term leases of low-value assets Covid-19-related rent concessions	2021 $ 1,710,895 $ 11,811 $ 1,430,324 $ 579,236 $ -	2020
		1,266,359
		11,102
		2,180,505
		663,862
		2,842

The amounts recognized in statement of cash flow were as follows:

Total cash outflow for leases	2021 $ 12,323,433	2020
		9,590,428

1. Wharf, and container leases

As of December 31, 2021, the Company leases wharfs and containers for its operating needs. The leases of wharfs typically run for a period of 4 to 15 years, and of containers for 1 to 11 years.

Some payments for wharf leases depend on the variation of loading capacity, in addition, the Company has decided to apply recognition exemptions to some containers and not to recognize right-of-use assets and lease liabilities for short-term leases or leases of low-value assets.

〜 41 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

2. Building leases

As of December 31, 2021, the Company leases buildings for its office space. The leases of office space are typically short-term leases that run within a year. The Company has decided to apply the recognition exemptions for its short-term leases, and not to recognize its right-of-use assets and lease liabilities.

3. Vessel leases

As of December 31, 2021, the Company leases vessels for its operating needs. The vessel leases run for a period of less than 1 year to 27 years. The Company has decided to apply recognition exemptions for short-term leases, and not to recognize right-of-use assets and lease liabilities.

1. Other leases

As of December 31, 2021, the Company leases other machinery or equipment for its operating needs typically run for a period of 3 to 5 years. Some leases are typically short-term leases or leases of low-value asset that the Company has decided to apply recognition exemptions, and not to recognize right-of-use assets and lease liabilities.

• (q) Employee benefits

• Defined benefit plans

Present value of defined benefit obligation Fair value of plan assets Recognized liabilities for defined benefit obligations	2021.12.31 $ 1,155,156 (776,085) $ 379,071	2020.12.31 1,128,686 (711,871) 416,815

The Company's defined benefit plans allocate pension reserve to its pension reserve account with Bank of Taiwan. Retirement pensions for each employee to which Labor Standards Act can be applied, are calculated on the basis of service seniority and the average salary for the six months prior to retirement.

• 1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with interest rates offered by local banks.

The Company’s pension reserve account balance amounted to $776,085 thousand at the end of the reporting period. The information used to calculate pension fund assets includes the asset allocation and yield of the fund. Please refer to the information published on the website of the Bureau of Labor Funds, Ministry of Labor.

〜 42 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Company were as follows:

Defined benefit obligation at January 1 Current service costs and interest cost Remeasurement on the net defined benefit liabilities (assets) －Actuarial loss (gain) arising from changes in financial assumptions Benefit paid Defined benefit obligation at December 31	2021 $ 1,128,686 14,921 39,704 (28,155) $ 1,155,156	2020 1,092,636 17,583 57,817 (39,350)
		1,128,686

3) Movements of defined benefit plan assets

The movements in the fair value of the defined benefit plan assets for the Company were as follows:

Fair value of plan assets at January 1 Interest income Remeasurement on the net defined benefit liabilities (assets) －Return on plan assets (excluding current interest) Contribution paid by employer Benefit paid Fair value of plan assets at December 31	2021 $ 711,871 3,828 8,594 65,368 (13,576) $ 776,085	2020 649,976 5,001 19,549 62,729 (25,384)
		711,871

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company was as follows:

Current service costs Net interest of net liabilities (assets) for defined benefit obligation Operating costs Operating expenses	2021 $ 9,092 2,001 $ 11,093 $ 8,193 2,900 $ 11,093	2020 9,537 3,045
		12,582
		8,370 4,212
		12,582

〜 43 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

5) Actuarial assumptions

The following are the Company’s principal actuarial assumptions:

Discount rate Future salary increase rate	2021 2020 % 0.51 % 0.52 % 3.00 % 3.00

The Company will pay to the defined benefit plans which amounted to $66,885 thousand within 1 year after the report day of 2021.

The weighted-average duration of the defined plans is 2~16 years.

6) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2021 Discount rate Future salary increasing rate December 31, 2020 Discount rate Future salary increasing rate	Influences of defined benefit obligation Increased 0.50% Decreased 0.50% $ (52,588) 55,374 47,902 (46,262) $ (53,881) 57,878 50,466 (47,667)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2021 and 2020.

2. Defined contribution plans

The Company allocates 6% of each employee’ s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $56,500 thousand and $52,615 thousand for the years ended December 31, 2021 and 2020, respectively.

〜 44 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• (r) Income taxes

• Income tax expense

The amount of income tax were as follows:

Current income tax expense: Current period Adjustment for prior periods Deferred tax expense (benefit): Origination and reversal of temporary differences Income tax expense from continuing operations	2021 $ 10,525,182 33,311 10,558,493 14,784,478 $ 25,342,971	2020 1,244,938 (38,123) 1,206,815 1,550,642 2,757,457

For the years ended December 31, 2021 and 2020, no income taxes were recognized in equity and other comprehensive income.

The amount of income tax recognized in other comprehensive income for 2021 and 2020 were as follows:

2021 Items that will not be reclassified subsequently to profit or loss: Remeasurement from defined benefit plans $ (6,222) Items that will be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations$ (387) The reconciliation of income tax and profit before tax for 2021 and 2020 was as 2021 Profit excluding income tax $ 128,685,879 Income tax using the Company’s domestic tax rate $ 25,737,176 Non-deductible expense 48,005 Tax exempt income (468,345) Under (Over) provision in prior periods 33,311 Income tax credit - Tax incentives (7,176) Total $ 25,342,971

2020 (7,654) (11,916) follows: 2020 14,074,438 2,814,888 40,750 (374,783) 295,809 (9,963) (9,244) 2,757,457

〜 45 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

1. Deferred tax assets and liabilities

2. 1) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2021 and 2020 were as follows:

Deferred Tax Liabilities: Balance at January 1, 2021 Debit (Credit) Income statement Balance at December 31, 2021 Balance at January 1, 2020 Debit (Credit) Income statement Balance at December 31, 2020 Deferred Tax Assets: Balance at January 1, 2021 (Debit) Credit Income statement (Debit) Credit Other Comprehensive Income Balance at December 31, 2021 Balance at January 1, 2020 (Debit) Credit Income statement (Debit) Credit Other Comprehensive Income Balance at December 31, 2020	Investment (loss) gain under the equity method $ 3,118,490 14,652,432 $ 17,770,922 $ 1,850,930 1,267,560 $ 3,118,490 Defined Benefit Plans $ 65,834 (13,771) 6,222 $ 58,285 $ 71,003 (12,823) 7,654 $ 65,834	Deferred depreciation expense 1,002,108 259,543 1,261,651 840,276 161,832 1,002,108 Loss Carryforward 303,284 (303,284) - - 264,361 38,923 - 303,284	Others 9,540 (9,540) - 18,056 (8,516) 9,540 Others 41,101 131,728 387 173,216 185,051 (155,866) 11,916 41,101	Total 4,130,138 14,902,435 19,032,573 2,709,262 1,420,876 4,130,138 Total 410,219 (185,327) 6,609 231,501 520,415 (129,766) 19,570 410,219

3. Examination and Approval

The Company’ s income tax returns through 2017 were examined and approved by the tax authority.

• (s) Capital and other equity

As of December 31, 2021 and 2020, the Company’ s authorized capital consisted of 3,600,000 thousand shares and 2,500,000 thousand shares, amounting to $36,000,000 thousand and $25,000,000 thousand, respectively, both with par value of $10 (TWD) per share. All the issued shares were ordinary shares, consisting of 2,440,127 thousand shares and 2,218,297 thousand shares, respectively, and all the funds of issued shares had been received.

The Company's reconciliation of outstanding shares for the years ended December 31, 2021 and 2020 were as follows:

(in thousands) Balance at January 1, 2021 Share dividends Balance at December 31, 2021	Ordinary shares	Ordinary shares
	2021 2,218,297 221,830 2,440,127	2020
		2,218,297 -
		2,218,297

〜 46 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

1. Issuance of ordinary shares

A resolution was passed during the general meeting of the shareholders held on July 20, 2021, for the issuance of 221,830 thousand new shares for unappropriated retained earnings, amounting to $2,218,298 thousand. The Company has received approval from the Financial Supervisory Commission on August 5, 2021, for this capital increase, with September 13, 2021, as the date of capital increase.

2. Capital surplus

The balance of capital surplus was as follows:

The balance of capital surplus was as follows:
Premium on ordinary shares Paid-in capital in excess of par value through conversion of corporate bond The actual differences between the equity and the book value of subsidiaries' disposal Change in equity of subsidiaries accounted for under equity method	2021.12.31 $ 22,839 1,222,787 10,094 16,055 $ 1,271,775	2020.12.31
		22,839 1,222,787 10,094 16,055
		1,271,775

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

3. Retained earnings

The industry of the Company is highly changeable and capital intensive. The Company is in the stable growing stage. Therefore, in consideration of the future capital needs of long-term financial plans, and to meet the cash flow needs of the shareholders, the Company’ s articles of incorporation require that after-tax earnings shall first be offset against any deficit, and 10% of the remaining balance shall be set aside as legal reserve, and special reserves are to be provided according to the regulations. If there is a requirement for the expansion of transportation equipment and an improvement of the financial structure, the Company may set aside a special reserve.

If there is a still remaining balance, the Company shall allocate upward of 10% of it, and is allowed to combine with the beginning unappropriated retained earnings, through the Board of Directors to take the Company's capital needs, capital budgets and other factors into account, and also to give consideration to the interests of shareholders and the Company's long-term financial planning, submits the dividend and bonus distribution proposal to be approved by shareholders' meeting, then the amount will be distributed.

〜 47 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

The distribution ration of stock dividends or cash dividends must be done in accordance with the current year's actual profit, capital position, and capital expansion program. The proportion of cash dividends may not be lower than 10% of the total dividends.

1) Legal reserve

When the Company incurs no loss, it may, pursuant to a resolution to be adopted by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash. Only the portion of the legal reserve which exceeds 25% of the paid-in capital may be distributed.

2) Special reserve

By appropriating the distributable earnings, the Company will record the net deduction of other shareholders' equity in the current year and recognize the special reserve from the profit and loss of current period and the unappropriated retained earnings in the previous period, when distributing the 2019 annual earnings in 2020, the special reserve shall be made up from the profit and loss in the current period and the undistributed earnings of the previous period. When distributing the 2020 annual earnings in 2021, the items other than the income after-tax of the current period shall be added to the income after-tax of the current period and included in the undistributed amount of the current period. The amount of the appropriated earnings and the unappropriated earnings of the previous period shall be added to the special reserve. For the deduction amount of other shareholders' equity accumulated in the previous period, the special reserve shall not be distributed from the undistributed surplus in the previous period. If there is a subsequent reversal in the amount of the deduction of other shareholders' equity, the earnings may be appropriated according to the reversal.

3) Earnings distribution

The earnings distribution for 2020 and 2019 was decided by the general meeting of shareholders held on July 20, 2021 and June 23, 2020, respectively.

The relevant dividend distribution to shareholders was as follows:

Dividends distributed to ordinary shareholders Cash Employees’ cash bonus Total	2020 Dividend per share ($) Total amount $ 1.00 2,218,298 1.00 2,218,298 $ 4,436,596	2019 Dividend per share ($) Total amount 0.80 1,774,638 - - 1,774,638	2019 Dividend per share ($) Total amount 0.80 1,774,638 - - 1,774,638
			Total amount
			1,774,638 -
			1,774,638

〜 48 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

4. Other equity (net after tax)

Balance at January 1, 2021 Foreign currency translation differences Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Gains (losses) from changes in the fair value of the hedging instrument: -Exchange rate risk for anticipated transactions Gains (losses) from changes in fair value of the hedging instrument that will be reclassified to profit or loss: -Exchange rate risk for anticipated transactions Balance at December 31, 2021 Balance at January 1, 2020 Foreign currency translation differences Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Gains (losses) from changes in the fair value of the hedging instrument: -Exchange rate risk for anticipated transactions Gains (losses) from changes in fair value of the hedging instrument that will be reclassified to profit or loss: -Exchange rate risk for anticipated transactions Balance at December 31, 2020	Exchange differences on translation of foreign financial statements $ (3,465,395) (1,151,605) - - - $ (4,617,000) $ (1,352,809) (2,112,586) - - - $ (3,465,395)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 75,448 - 370,229 - - 445,677 (200,376) - 275,824 - - 75,448	Gains (losses) on hedging instrument 150,344 - - 189,105 (155,621) 183,828 33,504 - - 113,698 3,142 150,344

(t) Earnings per share

The calculation of basic earnings per share and diluted earnings per share for the year 2021 and 2020 are as follows:

Basic earnings per share Profit attributable to common shareholders Weighted-average number of common shares (retrospective adjustments) Basic earnings per share (Unit: New Taiwan Dollar) Diluted earnings per share Profit attributable to common shareholders (Dilutive) Weighted-average number of common shares (Basic) (retrospective adjustments) Effects of employee stock compensation Weighted average number of common shares (adjusted for the effects of all dilutive potential common shares) Diluted earnings per share (Unit: New Taiwan Dollar)	2021 $ 103,342,908 2,440,127 $ 42.35 $ 103,342,908 2,440,127 4,560 2,444,687 $ 42.27	2020
		11,316,981
		2,440,127
		4.64
		11,316,981
		2,440,127 3,519
		2,443,646
		4.63

〜 49 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• (u) Revenue from contracts with customers

• Disaggregation of revenue

2021 Primary geographical markets: Asia $ 108,666,129 the Middle East, India, Red Sea 7,339,099 $ 116,005,228 Main service line: Freight $ 108,893,103 Rentals 6,318,443 WHL terminal 631,527 Other service 162,155 $ 116,005,228 Contract balances 2021.12.31 2020.12.31 Notes receivable $ 69,697 49,698 Accounts receivable 1,993,245 1,316,554 Less: allowance for doubtful receivables (1,683) (358) Total $ 2,061,259 1,365,894 Contract assets $ 7,835,522 1,530,849 Contract liabilities (recognized as other current liabilities) $ 131,321 120,993

2020 56,600,987 5,314,529 61,915,516 56,344,281 4,818,378 606,775 146,082 61,915,516 2020.1.1 39,456 674,587 (358) 713,685 733,689 136,948

2.Contract balances

For details on accounts receivable and allowance for impairment, please refer to note 6(f).

The major change in the balance of contract assets and contract liabilities is the difference between the time frame for the performance obligation to be satisfied and the payment to be received.

• (v) Remuneration of employees and directors

According to the Company's Articles, once the Company has annual profit, it should appropriate no less than 0.6% of the profit to its employees and no higher than 1% to its directors as remuneration. However, if the Company has accumulated deficits, the profit should be reversed to offset the deficit.

For the years ended December 31, 2021 and 2020, the estimated amount of the remunerations to employees were $777,558 thousand and $143,617 thousand, respectively, and the estimated amount of the remunerations to directors' were 129,593 thousand and 143,617 thousand, respectively. These amounts were calculated using the Company's net income before tax without the remunerations to employees and directors for each period, multiplied by the proposed percentage stated under the Company's Article. These remunerations were expensed under operating cost for each period. There were no differences between the actual amounts and the estimates of remunerations. Related information is available on the website of the Market Observation Post System.

〜 50 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

(w) Non-operating income and expenses

1. Interest income

The details of interest income for the years ended December 31, 2021 and 2020 were as follows:

Interest from bank deposits Other interest income	2021 $ 31,907 21,354 $ 53,261	2020
		30,188 42,812
		73,000

2. Other revenue

The details of other revenue for the years ended December 31, 2021 and 2020 were as follows:

Dividends revenue Other revenue	2021 $ 282,715 1,297 $ 284,012	2020
		284,984 -
		284,984

3. Other gains and losses

The details of other gains and losses for the years ended December 31, 2021 and 2020 were as follows:

Foreign exchange gains (losses) Gains on financial assets at fair value through profit or loss Gains on disposal of property, plant and equipment Gain on lease modification Other gains	2021 $ (367,872) 1,274,831 43,567 385,782 182,325 $ 1,518,633	2020
		273,924 783,642 139,379 196,596 133,633
		1,527,174

4. Finance costs

The details of finance costs for the years ended December 31, 2021 and 2020 were as follows:

Interest expense: Bank loan Bonds payable Commercial paper Lease liabilities	2021 $ 97,586 167,808 19,667 1,710,895 $ 1,995,956	2020
		150,134 167,465 17,168 1,266,359
		1,601,126

〜 51 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• (x) Financial instruments

1. Credit risks

• 1) Credit risks exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

• 2) Concentration of credit risk

Since the Company has considerable customers worldwide and does not concentrate its transactions significantly with any single customer or in similar areas, the Company has no concentration of credit risk. The Company mitigates the credit risks by continuously monitoring customers’ credit risk and credit ratings, however, the Company’ s policy usually does not require the customers to provide collateral.

• 3) Credit risk of receivables

For credit risk exposure of note and trade receivables, please refer to note 6(f). Other financial assets at amortized cost includes other receivables, receivables from agents and time deposits etc.

All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses. Regarding how the financial instruments are considered to have low credit risk, please refer to note 4(f). There are no significant expected losses on other receivables and the financial assets at amortized cost by assessment, so none of the impairment allowance can be recorded.

2. Liquidity risks

The following are the contractual maturities of financial liabilities of the Company, including estimated interest payments and excluding the impact of netting arrangements:

December 31, 2021 Non-derivative financial liabilities Secured bank loans Unsecured bank loans Commercial paper Account payables (including related parties) Other payables Payables to agents Bonds payable Leases liabilities (partial recognized as financial liabilities for hedging) Guarantee deposits received	Carrying amount $ 12,146,125 966,678 4,809,052 14,262,175 3,466,154 1,387,425 12,600,000 121,856,386 21,840 $ 171,515,835	Contractual cash flows 12,648,021 979,783 4,871,205 14,262,175 3,466,154 1,387,425 12,989,670 137,452,596 21,840 188,078,869	Less than 6 months 1,227,434 112,259 11,017 14,262,175 3,466,154 1,387,425 3,681,450 7,414,635 21,840 31,584,389	6 to 12 months 1,532,785 111,884 12,068 - - - 57,290 7,478,280 - 9,192,307	1 to 2 years 2,845,454 168,974 2,831,964 - - - 91,940 14,016,996 - 19,955,328	2 to 5 years 4,495,163 586,666 2,016,156 - - - 9,158,990 37,830,041 - 54,087,016	More than 5 years
							2,547,185 - - - - - - 70,712,644 -
							73,259,829

〜 52 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2020 Non-derivative financial liabilities Secured bank loans Unsecured bank loans Commercial paper Account payables (including related parties) Other payables Payables to agents Bonds payable Leases liabilities (partial recognized as financial liabilities for hedging) Guarantee deposits received	Carrying amount $ 9,348,764 2,845,475 2,809,861 7,605,831 1,439,458 1,259,893 16,400,000 75,471,620 21,655 $ 117,202,557	Contractual cash flows 9,686,953 2,891,741 2,829,574 7,605,831 1,439,458 1,259,893 16,979,410 85,634,218 21,655 128,348,733	Less than 6 months 1,194,223 372,010 3,465 7,605,831 1,439,458 1,259,893 3,116,850 3,980,116 21,655 18,993,501	6 to 12 months 1,153,826 120,437 3,576 - - - 872,890 3,889,425 - 6,040,154	1 to 2 years 1,988,305 938,270 7,132 - - - 3,738,740 7,392,615 - 14,065,062	2 to 5 years 3,755,254 1,461,024 2,815,401 - - - 7,229,530 20,847,906 - 36,109,115	More than 5 years
							1,595,345 - - - - - 2,021,400 49,524,156 -
							53,140,901

The Company is not expecting that the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

3. Currency risk

• 1) Currency risk exposure

The Company’s significant exposure to foreign currency risks was as follows:

Functional currency	Exchange rate	Foreign currency	2021.12.31
			Foreign currency (in thousands) Carrying Amount (TWD) $ 1,505,896 41,645,553 25,308,389 6,079,245 786,915 3,416,079 140,581 498,520 23,518 155,652 277,622 150,394 872,945 24,141,298 7,706,100 1,851,057 240,656 853,403 149,891 650,690 573,914 475,625 1,131,322 419,843
Financial assets Monetary items TWD TWD TWD TWD TWD TWD Financial liabilities Monetary items TWD TWD TWD TWD TWD TWD	27.66 0.24 4.34 3.55 6.62 0.54 27.66 0.24 3.55 4.34 0.83 0.37	USD JPY CNY HKD MYR PHP USD JPY HKD CNY THB INR

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(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Functional currency	Exchange rate	Foreign currency	2020.12.31
			Foreign currency (in thousands) Carrying Amount (TWD) $ 459,639 12,915,859 521,412 2,242,411 5,830,364 1,588,609 1,113,320 428,200 157,478 147,701 16,015 111,948 548,180 15,403,844 8,414,432 2,292,694 278,476 1,009,427 161,717 695,488 903,349 347,442 282,042 264,532
Financial assets Monetary items TWD TWD TWD TWD TWD TWD Financial liabilities Monetary items TWD TWD TWD TWD TWD TWD	28.10 4.30 0.27 0.38 0.94 6.99 28.10 0.27 3.62 4.30 0.38 0.94	USD CNY JPY INR THB MYR USD JPY HKD CNY INR THB

2) Sensitivity analysis

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade and other receivables, payables to agents, financial assets at fair value through profit or loss, loans and borrowings; and trade and other payables that are denominated in foreign currency.

A strengthening (weakening) of 1% of the TWD against the USD, HKD and JPY etc. as at December 31, 2021 and 2020, would have increased (decreased) the net profit before tax by $273,165 thousand and $6,699 thousand, respectively. For 2021 and 2020, the cash flow hedge would have increased (decreased) the equity by $35,621 thousand and $36,741 thousand, respectively. This analysis assumes that all other variables remain constant, and is performed on the same basis for the years ended December 31, 2021 and 2020.

3) Foreign Exchange Gain or Loss on Monetary Items

The information of the translation to functional currency of foreign exchange gain (loss) on monetary items, including realized and unrealized, and the translation between the functional currency of the foreign operation and the Company (the presentation currency) were as follows:

TWD	2021 Exchange gain or loss Average rate $ (367,872) -	2020
	Exchange gain or loss $ (367,872)	Exchange gain or loss Average rate 273,924 -

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(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

4. Interest rate analysis

Please refer to the notes on liquidity risk management and the Company's interest rate exposure to its financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to management internally, which also represents the Company management's assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 1%, the Company’s net profit before tax would have increased or decreased by $140,228 thousand and $128,542 thousand, respectively, for the years ended December 31, 2021 and 2020 with all other variable factors remaining constant. This is mainly due to the Company’s borrowing at variable rates.

5. Other market price risk

For the years ended December 31, 2021 and 2020, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

Prices of securities at the reporting date	2021	2021
	Other comprehensive income after tax $ 38,130 (38,130)	Net income
Increasing 1% Decreasing 1%

6. Fair value information

• 1) The Categories and Fair Values of Financial Instruments

The Company assesses its financial instruments at fair value through profit or loss and financial assets (financial assets available-for-sale) at fair value through other comprehensive income on a recurring basis by using the fair value method.

The carrying amount and fair value of the Company’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and for equity investments that has no quoted prices in the active markets and whose fair value cannot be reliably measured, disclosure of fair value information is not required:

〜 55 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Book value Financial assets at fair value though profit or loss Non-derivative financial assets mandatorily measured at fair value through profit or loss－ domestic listed stocks $ 6,249,968 Non-derivative financial assets mandatorily measured at fair value through profit or loss－ domestic emerging stocks 11,108 Sub-total 6,261,076 Financial assets at fair value through other comprehensive income Domestic listed stocks 3,812,966 Unquoted equity instrument measured at fair value 479,305 Sub-total 4,292,271 Financial assets measured at amortized cost Cash and cash equivalents 40,113,588 Bond portfolios with inactive market 63,717 Notes receivable 69,697 Accounts receivable 1,991,562 Contract assets 7,835,522 Other receivables 8,870,244 Receivables from agents 4,703,644 Guarantee deposits paid (recognized as other non-current assets) 147,769 Sub-total 63,795,743 Total $ 74,349,090 Financial liabilities measured at amortized cost Accounts payable $ 14,262,175 Other payables 3,466,154 Lease liabilities (including financial liabilities for hedging) 121,856,386 Payables to agents 1,387,425 Bonds payable (including current portion) 12,600,000 Long-term borrowings (including current portion) 17,921,855 Guarantee deposits received (recognized as other current liabilities and other non-current guarantee deposits received) 21,840 Total $ 171,515,835		December 31, 2021	December 31, 2021	December 31, 2021
			Fair value
		Level 1 6,249,968 11,108 6,261,076 3,812,966 - 3,812,966 - - - - - - - - - 10,074,042 - - - - - - - -	Level 2 - - - - - - - - - - - - - - - - - - - - - - - -	Level 3 - - - - 479,305 479,305 - - - - - - - - - 479,305 - - - - - - - -	Total 6,249,968 11,108
					6,261,076
					3,812,966 479,305
					4,292,271
					- - - - - - - -
					-
					10,553,347
					- - - - - - -
					-

〜 56 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Book value Financial assets at fair value though profit or loss Non-derivative financial assets mandatorily measured at fair value through profit or loss－ domestic listed stocks $ 4,836,764 Non-derivative financial assets mandatorily measured at fair value through profit or loss－ bond investment 8,076 Sub-total 4,844,840 Financial assets at fair value through other comprehensive income Domestic listed stocks 3,377,664 Unquoted equity instrument measured at fair value 450,120 Sub-total 3,827,784 Financial assets measured at amortized cost Cash and cash equivalents 8,553,009 Notes receivable 49,698 Accounts receivable 1,316,196 Contract assets 1,530,849 Other receivables 5,542,057 Receivables from agents 3,073,816 Guarantee deposits paid (recognized as other non-current assets) 163,656 Sub-total 20,229,281 Total $ 28,901,905 Financial liabilities measured at amortized cost Accounts payable $ 7,605,831 Other payables 1,439,458 Lease liabilities (including financial liabilities for hedging) 75,471,620 Payables to agents 1,259,893 Bonds payable (including current portion) 16,400,000 Long-term borrowings (including current portion) 15,004,100 Guarantee deposits received (recognized as other current liabilities and other non-current guarantee deposits received) 21,655 Total $ 117,202,557		December 31, 2020	December 31, 2020	December 31, 2020
			Fair value
		Level 1 4,836,764 8,076 4,844,840 3,377,664 - 3,377,664 - - - - - - - - 8,222,504 - - - - - - - -	Level 2 - - - - - - - - - - - - - - - - - - - - - - -	Level 3 - - - - 450,120 450,120 - - - - - - - - 450,120 - - - - - - - -	Total 4,836,764 8,076
					4,844,840
					3,377,664 450,120
					3,827,784
					- - - - - - -
					-
					8,672,624
					- - - - - - -
					-

〜 57 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• 2) Valuation techniques for financial instruments measured at fair value

• A. Non-derivative financial instruments

If quoted prices in active markets are available, the prices are established as fair values. Market prices published by major stock exchange and OTC market, where high volume of central government bonds are traded, are the foundation of fair value of debt instruments with quoted market price in an active market and listed equity instruments.

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. If a financial instrument does not accord with the definition aforementioned, then it is considered to be without quoted price in active market. In general, market with low trading volume or high-ask spreads is an indication of non-active market.

If the Company's financial instruments have an active market, wherein their fair values are determined as follows:

The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined with reference to the quoted market prices.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using valuation technique that can be extrapolated from either similar financial instruments or discounted cash flow method or other valuation techniques, including models, is calculated based on available market data, e.g. yield curves from OTC and average quoted rates of commercial paper from Reuters quote system at the reporting date.

If the Company's financial instruments do not have an active market, wherein their fair values are determined as follows:

Unquoted equity instrument:

The Company estimates the fair values by using the comparable trading company approach on the assumption that the fair values are calculated on the basis of the investees' book value per share and equity multipliers derived from comparable trading companies' quoted prices. The discount effect resulting from the lack of market liquidity has been taken into account.

Unquoted equity instrument:

The Company estimates the fair values by using the comparable trading company approach on the assumption that the fair values are calculated on the basis of the investees' EBITDA and earnings multipliers derived from comparable trading companies' quoted prices. The discount effect resulting from the lack of market liquidity has been taken into account.

Unquoted debt instrument:

The Company estimates the fair values by using the comparable trading debt approach, and utilizes the statistic model to determine the relationship between the value of debt investment and its related conditions and variables.

〜 58 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

• 3) For the years ended December 31, 2021 and 2020, there were no transferring of fair value hierarchy.

• 4) Reconciliation of Level 3 fair values

Opening balance, January 1, 2021 Total gains and losses recognized: In other comprehensive income Ending balance, December 31, 2021 Opening balance, January 1, 2020 Total gains and losses recognized: In profit or loss In other comprehensive income Disposal Ending balance, December 31, 2020	Fair value through profit or loss Non-derivative mandatorily measured at fair value through profit or loss $ - - $ - $ 1,157,131 (15,531) - (1,141,600) $ -	Fair value through other comprehensive income Unquoted equity instruments 450,120 29,185 479,305 469,985 - (19,865) - 450,120	Total 450,120 29,185 479,305 1,627,116 (15,531) (19,865) (1,141,600) 450,120

For the years ended December 31, 2021 and 2020, the total gains and losses that were included in “ other gains and losses” and “ unrealized gains (losses) on financial assets at fair value through other comprehensive income” were as follows:

Total gains and losses recognized: In other comprehensive income, and presented in “unrealized gains or losses from financial assets at fair value through other comprehensive income”	2021 2020 29,185 (19,865)

• 5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Company’ s financial instruments that use Level 3 inputs to measure fair value include “financial assets measured at fair value through other comprehensive income – unlisted equity investments”.

Most of the Company's fair value measurements in Level 3 consist of only one significant unobservable input (except for the unlisted equity instrument). Because the significant unobservable inputs of equity instruments are independent of each other, there are no correlation between these inputs.

〜 59 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income －Unlisted equity investments	Valuation technique Comparable trading company method	Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement ‧ Liquidity-adjusted discount rate (28% on December 31, 2021 and 2020, respectively) ‧ Price-to-book ratio (0.70 and 0.73 on December 31, 2021 and 2020, respectively) ‧ EBITDA multiplier (10.30 and 9.67 on December 31, 2021 and 2020, respectively) The estimated fair value would increase (decrease) if: ‧ the liquidity-adjusted discount rate were lower (higher) ‧ the price-to-book ratio were higher (lower) ‧ the EBITDA multiplier were higher (lower)

• 6) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The Company's measurements in financial instruments fair values are reasonable, but if the Company uses different valuation models or variables, the measurements may vary.

For fair value measurements in Level 3, changing one or more of the variables would have the following effects:

December 31, 2021 Unlisted equity investment Unlisted equity investment Unlisted equity investment December 31, 2020 Financial assets at fair value through other comprehensive income Unlisted equity investment Unlisted equity investment Unlisted equity investment	Input Discount rate Price-to-book ratio multiplier EBITDA multiplier Discount rate Price-to-book ratio multiplier EBITDA multiplier	Positive and negative Profit changes Favorable 1% $ - 1% - 1% - $ - $ - - - $ -	Profit	or loss Unfavorable - - - - - - - -	Other comprehensive income Favorable Unfavorable 6,657 (6,657) 4,671 (4,671) 124 (124) 11,452 (11,452) 6,252 (6,252) 4,362 (4,362) 123 (123) 10,737 (10,737)	Other comprehensive income Favorable Unfavorable 6,657 (6,657) 4,671 (4,671) 124 (124) 11,452 (11,452) 6,252 (6,252) 4,362 (4,362) 123 (123) 10,737 (10,737)
					Favorable 6,657 4,671 124 11,452 6,252 4,362 123 10,737
						(11,452)
						(6,252) (4,362) (123)
						(10,737)

〜 60 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

The favorable and unfavorable effects represent the changes in fair value, and the fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the correlations and variances among the inputs.

• (y) Financial risk management

• Overview

The Company has exposures to the following risks from its financial instruments:

1) Credit risk

• 2) Liquidity risk

3) Market risk

The following likewise discusses the Company’s objectives, policies and processes for measuring and managing the above-mentioned risks. For more disclosures about the quantitative effects of these risk exposures, please refer to the respective notes in the accompanying consolidated financial statements.

2. Risk management framework

The Company’s “Policy and Procedures for Risk Management” (hereinafter referred to as the “ Policy and Procedures” ) have been established by the Audit Committee and the Board of Directors in May 2021 and serves as the highest guiding principles and procedures for the Company’ s risk management. The Policies and Procedures clearly define the Company’ s management goals, organizational structure and responsibilities, and management procedures to effectively identify, measure, and control all various risks of the Company. In this way, the Company may contain the risks incurred from business operation in an acceptable range, to ensure the continuity of operation and protect the rights and interests of stakeholders.

In accordance with the Policy and Procedures, each department had established a risk management team in 2021, which is led by the respective department head, to be responsible for the risk management implementation in daily operations. The Strategy Research Unit (SRU) of the President Office will coordinate and review the suitability and adequacy of the risk management implemented by each team. The SRU is also responsible for submitting a risk management report to the Audit Committee and the Board of Directors annually.

1. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment.

1) Accounts receivable and other receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Company’ s customer base, including the default risk of the industry in which customers operate, as these factors may have an influence on credit risk. Since the Company has considerable customers worldwide and does not concentrate transactions significantly with any single customer or in similar areas, The Company has no concentration of credit risk. The Company mitigates the credit risks by monitoring customers’ credit risk and credit ratings continuously, however, the Company’s policy usually doesn't require the customers to provide collateral.

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NOTES TO THE FINANCIAL STATEMENTS

The Board of Directors has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’ s standard payment and delivery terms and conditions are offered. The Company’ s review includes external ratings, when available, and, in some cases, bank references. Purchase limits are established for each customer and represent the maximum open amount without requiring approval from the Board of Directors; these limits are reviewed quarterly. Customers that fail to meet the Company’s benchmark creditworthiness may transact with the Company only on a prepayment basis.

2) Investment

The exposure to credit risk for the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Company’s finance department. The Company only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Company does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

3) Guarantees

The Company's policy is to provide guarantee to subsidiaries. The detailed information is stated in note 13.

4. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company aims to maintain the level of its cash and cash equivalents and other highly marketable debt investments at an amount in excess of expected cash flows on financial liabilities. The Company also monitors the level of expected cash outflows on trade and other payables. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. The Company has unused credit line for $29,905,192 thousand and $19,494,456 thousand, as of December 31, 2021 and 2020.

5. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Company’ s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities, primarily TWD and US Dollars (USD). The currencies used in these transactions are denominated in TWD and USD.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

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NOTES TO THE FINANCIAL STATEMENTS

2) Interest rate risk

The Company adopts a policy of ensuring that 54.06% of its exposure to changes in interest rates on borrowings is on a fixed-rate basis.

• 3) Other market price risk

The management of the Company monitors the proportion of equity securities in its investment portfolio based on market indices. Material investments within the portfolio are managed on an individual basis, and all buy-and-sell decisions are approved and managed by the Board of Directors.

(z) Capital management

The Company meets its objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return to its shareholders and other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

The debt-to-equity ratio is as follow:

Total liabilities Less: Cash and cash equivalents Net debt Total equity Debt-to-equity ratio	2021.12.31 $ 201,384,076 (40,113,588) $ 161,270,488 $ 144,275,026 % 111.78	2020.12.31 123,014,585 (8,553,009) 114,461,576 43,902,409 % 260.72

• (aa) Investing and financing activities not affecting current cash flow

The Company’ s investing and financing activities which did not affect the current cash flow for years ended December 31, 2021 and 2020 were as follows :

1. Acquired right-of-use assets through leasing, please refer to notes (6)(j).

Reconciliation of liabilities arising from financing activities were as follows:

Non-cash changes

			Non-cash	changes
Long-term borrowings Bonds payable Lease liabilities (partial recognized as financial liabilities for hedging) Total liabilities from financing activities	2021.1.1 $ 15,004,100 16,400,000 75,471,620 $ 106,875,720	Cash flows 2,833,237 (3,800,000) (8,591,167) (9,557,930)	Others - - 54,975,933 54,975,933	Foreign exchange movement 84,518 - - 84,518	2021.12.31
					17,921,855 12,600,000 121,856,386
					152,378,241

〜 63 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Long-term borrowings Bonds payable Lease liabilities (partial recognized as financial liabilities for hedging) Total liabilities from financing activities	2020.1.1 $ 13,059,838 13,900,000 85,706,752 $ 112,666,590	Cash flows 2,400,665 2,500,000 (5,468,600) (567,935)	Non-cash	changes Foreign exchange movement (456,403) - - (456,403)	2020.12.31
			Others - - (4,766,532) (4,766,532)
					15,004,100 16,400,000 75,471,620
					106,875,720

(7) Related-Party Transactions

(a) Names and relationship with related parties

Name of related party

Wan Hai Lines (Singapore) Pte. Ltd. (WHL Singapore)

TK LOGISTICS INTERNATIONAL CO., LTD (TK)

k.k. WH Corporation (WH Corporation) Wan Hai Lines (Germany) GmbH (WHL Germany)

BAO SHENG SHIPPING AGENCY CO., LTD. (BS)

Wan Hai Lines (M) Sdn. Bhd. (WHL Malaysia)

Wan Hai Lines (Hong Kong) Limited (WHL Hongkong)

Wan Hai Lines (Phils.), Inc. (WHL Phils.) Wan Hai Lines (Korea) Ltd. (WHL Korea) Wan Hai International Pte. Ltd. (WHL INTL.) Yi Chun Shipping Agencies Sdn. Bhd. (Yi Chun)

Wan Hai (Vietnam) Ltd. (WHL Vietnam) Wan Hai Lines (Thailand) Limited (WHL Thailand)

WanHai Lines Ecuador S.A. (WHL Ecuador) Wan Hai Lines (India) PVT Ltd. (WHL India) Bravely International Pte. Ltd. (BI) Infinite Marine Investment Co., Ltd. (IM) Bravely (Myanmar) Transport and Logistics Company Limited. (Bravely (Myanmar))

Guangzhou Wan Hai Information Technology Ltd. (GZIT)

Relationship with the Company

Subsidiary

Subsidiary

Subsidiary Subsidiary (Note)

Subsidiary

Indirect subsidiary Indirect subsidiary

Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary

Indirect subsidiary Indirect subsidiary

Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary

Indirect subsidiary

〜 64 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Name of related party

Dawin Logistics (International) Ltd. (Dawin) Shenzhen Uniwin International Logistics Ltd. (Uniwin)

Blue Ocean Logistics (Shanghai) Ltd (Blue) Clipper International Shipping Agency Ltd. (Clipper)

Shenzhen Yong Chun International Shipping Managerment Co., Ltd. (SZYC)

Wan Hai Lines (Arizona) LLC. (WHL Arizona)

Wan Hai Lines (USA) LTD. (WHL USA) HE CHUN LOGISTICS COMPANY LIMITED (HE CHUN)

Wan Hai Shipping Limited (WHL Shipping) Wan Hai Lines Peru S.A.C. (WHL Peru)

Tan Cang-Cai Mep International Terminal Co.,Ltd (Tan Cang-Cai Mep)

HAI PHONG INTERNATIONAL CONTAINER TERMINAL COMPANY LIMITED (HAI PHONG)

Wan Hai Lines (UAE) LLC. (WHL UAE) Phuc Xuan Maritime Service Company Limited (Phux Xuan) ASIA PACIFIC LOGISTICS INTERNATIONAL CO., LTD. (APLI) New World Container Services Corporation Universal Checker Co., Ltd. Express Container Terminal Corp. (ECTC) New Sincere Transportation Corp. (NSTC) New Safety Transportation Corp. (NSaTC) An Chun Tally Co., Ltd.

Taipei Port Container Terminal Corp. (Taipei Port) Taian Insurance Co., Ltd. Wan Chun International Corp. (WCIC) Apezgo Digital Information Co., Ltd. AP PETROLEUM BUSINESS CO., LTD Formosa Wonderworld Co., Ltd. (Formosa Wonderworld)

Interasia Lines Taiwan, Ltd. Hyaline Shipping (HK) Co., Ltd. (Hyaline) Wan Hai Lines (Japan), Ltd. (WHL Japan)

Relationship with the Company

Indirect subsidiary Indirect subsidiary

Indirect subsidiary Indirect subsidiary Indirect subsidiary Indirect subsidiary

Indirect subsidiary Indirect subsidiary

Indirect subsidiary Indirect subsidiary An associate

An associate

An associate Joint venture

Related party in substance

Subsidiary of APLI Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Corporate director of the company

Related party in substance Subsidiary of ECTC Subsidiary of APLI Subsidiary of APLI Related party in substance

Related party in substance Same director with the Company Same director with the Company

〜 65 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Name of related party Relationship with the Company Interasia Lines Singapore Pte. Ltd. (IAL (S)) Related party in substance Wan Hai Charity Foundation Related party in substance AP INT'L TRAVEL SERVICE CO., LTD. Subsidiary of APLI New Speed Transportation & Terminal Co., Related party in substance Ltd. (NS) Ennea Solar Energy LLC. Related party in substance JOHNSON CHECKER CO., LTD Related party in substance CHIEN LAI ENTERPRISE CO., LTD Related party in substance Shin Sheng Transportation CO. LTD (Shin Related party in substance Sheng)

Note: WHL Germany was originally a subsidiary of the Company and the liquidation process was completed in March 2020.

• (b) Significant transactions with related parties

• Sales to related parties:

Subsidiaries Joint venture Other related parties	2021 $ 6,454,410 13,592 1,742,096 $ 8,210,098	2020
		3,089,513 8,933 1,612,419
		4,710,865

The transaction terms with related parties were not significantly different from those of sales to third parties. The average collection period for notes and accounts receivable pertaining to such sales transactions ranged from one to three months, while the average collection period for routine sales transactions was within one month.

1. Consideration for services related to the entity:

Consideration for services related to the entity:
Subsidiary: WHL Singapore Other subsidiaries Associates Other related parties Joint venture	2021 $ 15,424,777 4,788,962 312,251 4,787,157 1,165 $ 25,314,312	2020
		5,866,584 2,122,711 145,558 3,412,768 1,021
		11,548,642

The transaction terms with related parties were not significantly different from those of the third parties. The average payment period for notes and accounts payable pertaining to such purchase transactions ranged from one to two months, which was similar to that of other normal vendors.

〜 66 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

1. Receivables from related parties and other assets

Receivables of the Company from related parties were as follows：

Item Accounts receivable Accounts receivable other receivables other receivables other receivables other receivables Receivable from agents Receivable from agents Receivable from agents Receivable from agents Receivable from agents Receivable from agents	Related party categories Other related parties Subsidiary Subsidiary: WHL Singapore (Note) Others Associates Other related parties Subsidiary: Clipper Uniwin WHL Inida Others Associates Other related parties: WHL Japan	2021.12.31 $ 62,989 12,805 8,266,370 98,346 - 32,382 1,623,210 658,475 - 643,899 34,693 1,310,422 $ 12,743,591	2020.12.31
			134,501 - 4,842,911 82,571 183 64,309 1,127,566 272,421 391,673 115,255 31,604 981,342
			8,044,336

Note: Including fund financing portion.

1. Payables to related parties and other liabilities

Payables of the Company to related parties were as follows：

Item	Related party categories	2021.12.31 $ 7,568,346 207,938 130,994 56 6,531 693,266 394,054 161,969 56,473 13,409 $ 9,233,036	2020.12.31
Accounts payable Accounts payable Accounts payable Other payables Other payables Payable to agents Payable to agents Payable to agents Other current liabilities Other current liabilities	Subsidiary: WHL Singapore Others Other related parties Subsidiary Other related parties Subsidiary: WHL Hong Kong WHL Thailand Others Subsidiary: WHL Thailand Other related parties		1,146,798 212,222 122,227 178 6,375 794,344 201,401 136,763 43,471 5,273
			2,669,052

〜 67 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

1. Property transactions

2. 1) Acquisition of property, plant and equipment

In August 2019, the Company purchased a vessel from its subsidiary with the purchasing price of USD 4,500 thousand (TWD 139,387 thousand) depending on the valuation report. The gain on disposal of property was 59,541 thousand, which was not entirely realized. As of December 31, 2021 and 2020, the unrealized gain of $5,582 thousand and $27,910 thousand was recognized as the deduction of long-term equity investment under equity method.

In June 2016, the Company purchased a vessel from its subsidiary. The purchasing price was USD 16,500 thousand (TWD 530,145 thousand) depending on the valuation report, and loss on disposal of property was $95,983 thousand, but not entirely realized. As of December 31, 2021 and 2020, the unrealized loss was $65,520 thousand and $70,976 thousand depending on the useful life of the vessel as the addition of long-term equity investment under equity method.

• 2) The sales of property, plant and equipment to related parties are summarized as follows:

Related parties categories	2021 Disposal price Gain from disposal $ 139 130 - - $ 139 130	2020	2020
	Disposal price $ 139 - $ 139	Disposal price - 224 224	Gain from disposal
Subsidiary Other related parties			- 151
			151

6.Other related-party transactions

For the year ended December 31, 2021 and 2020, the Company received the claim payment from other related parties amounting to $1,722 thousand and $1,336 thousand, respectively.

For the year ended December 31, 2021 and 2020, the Company sold fuel inventory to its subsidiary, WHL Singapore, amounting to $1,157,463 thousand and $191,110 thousand, respectively.

For the years ended December 31, 2021 and 2020, the Company received the payments of manpower support service from other related parties amounting to $25,460 thousand and $18,097 thousand, respectively.

For the years ended December 31, 2021 and 2020, the Company purchased miscellaneous from other related parties amounting to $46,623 thousand and $31,062 thousand, respectively.

1. Loans to Related Parties

The Company Financing to other related parties was as follows:

Subsidiary WHL Singapore	2021.12.31 $ -	2020.12.31
		4,636,500

The interest charged by the Company to related parties is based on the average interest rate charged by financial institutions on the Company’s borrowings. The loans to related parties are unsecured. There are no provisions for doubtful debt required after the management’s assessment.

〜 68 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

8. Guarantees

Endorsement guarantees offered to related parties were as follows:

Subsidiary	2021.12.31 $ 14,463,023	2020.12.31
		17,045,151

9.Leasing

The Company rented containers from its related parties. A 1.5 to 11 year lease contract was signed. The total value of the contract was $62,622 thousand. For the year ended December 31, 2021 and 2020, the Company recognized the amount of $892 thousand and $977 thousand, respectively as interest expense, with the balance of lease liabilities amounting to $41,480 thousand and $47,069 thousand, respectively.

The Company rented vessels from its subsidiary-WHL Singapore. A 1-to-20 year lease contract was signed, in which the rental fee was determined based on the market condition. The total value of the contract was $147,474,521 thousand. For the year ended December 31, 2021, the Company recognized the amount of $1,593,335 thousand and $1,152,626 thousand, respectively as interest expense, with the balance of lease liabilities amounting to $116,436,155 thousand and $69,191,763 thousand, respectively.

• (c) Key management personnel remuneration

Key management personnel remuneration comprised:

Short-term employee benefits Post-employment benefits Pledged Assets The carrying values of pledged assets were as follows: Assets Objective Time deposits (classified under other non-current assets) Lease contract for wharf Guarantee deposits paid (classified under other non- current assets) Lease contract for wharf, building lease contract and lawsuit Containers (classified under property, plant and equipment) Long-term loans Land and Buildings (classified under property, plant and equipment) Long-term loans Land and Buildings (classified under investment property) Long-term loans	Short-term employee benefits Post-employment benefits Pledged Assets The carrying values of pledged assets were as follows: Assets Objective Time deposits (classified under other non-current assets) Lease contract for wharf Guarantee deposits paid (classified under other non- current assets) Lease contract for wharf, building lease contract and lawsuit Containers (classified under property, plant and equipment) Long-term loans Land and Buildings (classified under property, plant and equipment) Long-term loans Land and Buildings (classified under investment property) Long-term loans	2021 $ 189,741 52 $ 189,793 2021.12.31 $ 84,455 63,314 11,169,759 2,200,645 1,519,953 $ 15,038,126	2020
			177,664 34
			177,698
			2020.12.31
Time deposits (classified under other non-current assets) Guarantee deposits paid (classified under other non- current assets) Containers (classified under property, plant and equipment) Land and Buildings (classified under property, plant and equipment) Land and Buildings (classified under investment property)	Lease contract for wharf Lease contract for wharf, building lease contract and lawsuit Long-term loans Long-term loans Long-term loans		84,455 79,201 9,109,185 2,516,131 -
			11,788,972

(8) Pledged Assets

The carrying values of pledged assets were as follows:

〜 69 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

(9) Significant Contingencies and Commitments

• (a) Contract for port rental

To increase the quality of service and to decrease the cost of operations, the Company entered into a contract to lease a wharf in Japan in March 2003 and renewed it in April 2008. The lease period is from March 2003 to March 2028. As of December 31, 2021, the guarantee deposit amounted to JPY 255,755,000 (TWD 61,439 thousand) was listed in other non-current assets.

The Company co-operated with the Kaohsiung Harbor Bureau to rent the No. 63 and 64 wharfs in August 1994, and updated the contract in December 2016, the rental period lasted 8 years. The guarantee deposits amounting to $40,000 thousand was listed in other non-current assets.

The Company co-operated with the Taichung Harbor Bureau to rent the No. 34 and 35 wharfs in December 1999, and updated the contract in August 2018, the rental period lasted for 15 years. The guarantee deposits amounting to $33,400 thousand was listed in other non-current assets.

• (b) Vessel construction contract:

For operational purposes, the Company contracted with NIHON SHIPYARD CO., LTD. and JAPAN MARINE UNITED CORPORATION to construct 12 container ships, with a carrying capacity of 3,055 TEUs, with a total price of approximately JPY 60,840,000 thousand to JPY 64,800,000 thousand (approximately TWD 15,291,072 thousand to 16,286,349 thousand), the Company has already paid $1,529,107 thousand as prepayments for equipment (listed in other non-current assets).

• (c) Vessel purchase contract:

For operational purposes, the Company entered into agreement to purchase 2 second-hand container ships, with a total price of approximately USD 78,000 thousand (approximately TWD 2,159,040 thousand), the Company has already paid $216,216 thousand as prepayments for equipment (listed in other non-current assets).

• (d) As of December 31, 2021, the total amount claimed for damages to the Company is approximately TWD $84,246 thousand, and the related cases are under negotiation or under trail.

(10) Losses Due to Major Disasters: None.

(11) Significant Subsequent Events

In January 2022, the Company formally signed a contract with Kaohsiung Harbor Bureau to rent No. 79, 80 and 81 wharfs, the rental period starts from July 2023 to June 2043, total rental period last for 20 years, and will be recognized as right-of-use assets amounting to 6,613,421 thousand.

For the Group's overall route planning and operational synergy considerations, with an intention to adjust fleet allocation, based on a resolution approved by the Board of Directors on January 28, 2022, the Company approved to purchase 20 second-hand container ships from WHL Singapore at a maximum total price of USD 682,900 thousand (approximately TWD 18,910,000 thousand), and purchase 2 second-hand container ships from WHL-Hongkong at a maximum total price of USD 51,800 thousand (approximately TWD 1,430,000 thousand).

〜 70 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

In view of the above considerations of the overall operation of the Group, the Company's original vessel lease contract with WHL Singapore was eliminated, based on a resolution approved by the Board of Directors on January 28, 2022, the Company’ s right-of-use assets of 10 container ships shall be derecognized at a maximum amount of $39,510,000 thousand.

In January 2022, the Company signed a contract with STAROCEAN MARINE CO., LTD. to purchase 2 container ships of 1,781 TEUs at a total amount of USD 86,000 thousand (approximately TWD 2,387,360 thousand) for operational purposes.

For the Group's asset allocation and operational synergy considerations, based on a resolution approved by the Board of Directors on March 15, 2022, the Company approved to purchase several second-hand vessels at a maximum total price of USD 320,000 thousand (approximately TWD 8,899,200 thousand).

(12) Others

• (a) Employee benefits, depreciation, and amortization expenses, categorized as operating cost or expense, were as follows:

By function By item	For the years ended December 31, 2021	For the years ended December 31, 2021	For the years ended December 31, 2021	For the years ended December 31, 2020	For the years ended December 31, 2020	For the years ended December 31, 2020
	Operating Cost	Operating Expense	Total	Operating Cost	Operating Expense	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others employee benefits Depreciation Amortization	477,677 24,886 22,614 - 16,523 12,150,101 27,764	2,415,035 95,347 44,979 151,411 83,191 82,308 27,967	2,892,712 120,233 67,593 151,411 99,714 12,232,409 55,731	448,665 22,483 22,146 - 23,194 8,086,919 20,655	1,497,987 76,229 43,051 158,389 54,871 47,183 46,592	1,946,652 98,712 65,197 158,389 78,065 8,134,102 67,247

The Company's number of employees and additional information on employee benefits in December 31, 2021 and 2020 are as follows:

Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages The average of employee salary cost adjustment as follows Remuneration receivedby supervisors	2021 1,139 4 $ 2,802 $ 2,549 % 43.28 $ -	2020
		1,098
		4
		2,001
		1,779
		% 36.32
		-

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(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

The Company's salary and remuneration policy (including directors, managers and employees) are as follows:

• 1.Employee remuneration:

• 1) The wages of the employees of the Company are paid based on the grade table set according to the academic experience, professional skills, years of experience, and the degree of responsibilities. Initial emolument is superior to local labor laws and regulations, not because of gender, race, religion, political affiliation, marital status, trade union membership organizations vary. In order to make employees' income proportional, the annual performance bonuses are based on operating conditions and individual performance, achievement of the goal of being competitive, retaining talents, and encouragement to employees.

• 2) If the Company makes a profit during the year, it shall allocate no less than 0.6% as employee remuneration following Article 11, Item 1.

• Remuneration to directors (excluding independent director) and managers:

• 1) In order to implement the corporate governance and improve the transparency and institutionalization of the remuneration to directors and managers of the Company, the "Remuneration Committee" has been established on September 23, 2011 to set the Remuneration Committee Organization Regulations in accordance with the provisions of the Securities and Exchange Act. The Compensation Committee members are appointed by the Board of Directors, of whom more than half are independent directors of the Company. Its function assists in the formulation and reviews the policies, systems, standards, and structures for performance evaluation and compensation that regarding directors and managers; And regularly assess and determine the remuneration of directors and managers; Makes recommendations with the duty of care and submit them to the board for discussion and resolution.

• 2) Remuneration policy for directors (excluding independent director) and managers:

• A. The performance evaluation and remuneration to directors and managers should be based on the usual standards of the industry, taking into consideration the reasonableness of the individual performance, operating results of the Company, as well as future risks.

• B. Directors and managers should not engage in behaviors that exceed the risk appetite of the Company in pursuit of compensation.

• C. Regarding the short-term performance of directors and senior managers, the payment of variable remunerations should be determined by considering the characteristics of the industry and the nature of the Company's business.

• 3) Salary and remuneration referred to the policy including cash remuneration, stock options, dividends, retirement benefits or severance payments, budget allowances, and other substantive incentives. Its scope should be consistent with that of the annual report of the public offering company and remuneration to directors and managers.

〜 72 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

1. Remuneration policy for independent directors:

2. 1) According to the Article 11, Item 2 of the Company, independent directors do not participate in the distribution of earnings, and their remuneration is determined by the board of directors.

3. 2) The remuneration to independent directors of the Company also includes the audit committee and Remuneration Committee aside from considering the execution of business and board affairs of independent directors. Based on the market, and taking into account the standards of the industry, the Remuneration Committee puts forward a proposal to be implemented after the board of directors’ approval.

(13) Other Disclosures

• (a) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the year ended December 31, 2021:

1. Fund financing to other parties:

(In thousands of TWD)

Num- ber	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other party during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower (Note 1)	Transaction amount for business between two parties	Reasons for short -term financing	Allowance for bad debt	Coll	ateral	Individual funding loan limits (Note 5)	Maximum limitation on fund financing (Note 5)
													Name	Value
0 1 2	The Company WHL INTL. WHL Singapore	WHL Singapore WHL India Yi Chun	Other receivables related Other receivables related Other receivables related	Yes Yes Yes	8,551,500 78,389 85,515	8,296,500 - 82,965	- - 24,890	- - 1.53~1.64%	1 1 1	- - -	Note 4 Note 3 Note 4	- - -	Promissory note - Promissory note	8,296,500 - 82,965	57,710,010 89,155 40,956,214	57,710,010 89,155 40,956,214

Note 1: Short-term financing.

Note 2: Repayment of loans.

Note 3: Acquisition of assets.

Note 4: Operating activities.

Note 5: Financing amount shall not exceed 40 percent of the lending company's net worth and the following:

1. Individual funding loan limits of financing for single borrower who has business with the lending company cannot exceed the total transaction amount of the current year.

2. Individual funding loan limits for short-term borrower cannot exceed 40 percent of the lending company's net worth.

3. The individual loaned amount between the foreign companies whose voting shares are wholly owned by the Company directly or indirectly, or the amount that the foreign companies whose voting shares are wholly owned by the Company directly or indirectly loaned to the Company, shall not exceed 40 percent of the lending company's net worth.

Note 6: Eliminated in the consolidated financial statement.

〜 73 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

2. Guarantees and endorsements for other parties:

(In thousands of TWD)

Number	Name of the company	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged on guarantees and endorsements (Amount) (Note 3)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements (note2)	Parent company endorses/ guarantees to third parties on behalf of subsidiary	Subsidiary endorses/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company (Note 1)
	The Company	WAN HAI LINES(SG) LTD.	2	228,550,051	22,936,176	14,463,023	14,463,023	-	% 10.02	228,550,051	Y	N	N

Note 1: Relationship with the Company

1. The companies with which it has business relations.

2. Subsidiaries in which the company directly or indirectly holds more than 50% of its total outstanding common shares.

3. The parent company which directly or indirectly holds more than 50% of its voting rights.

4. Subsidiaries in which the company directly or indirectly holds more than 90% of its voting rights.

5. Companies in same type of business and providing mutual endorsements/ guarantees in favor of each other in accordance with the contractual obligations in order to fulfill the needs of the construction project.

6. Shareholders making endorsements and/or guarantees for their mutually invested company in proportion to their shareholding percentage.

7. Companies in same type of business providing guarantees of pre-sale contracts according to the regulation.

8. Note 2: According to the Company's "Policy and Procedures for Guarantee and Endorsement":

9. External endorsements and guarantees made by the Company may not exceed 200% of the Company's net worth.

10. Endorsements and guarantees made to a single enterprise may not exceed 40% of the Company or its subsidiaries' net worth.

11. The total amount of endorsements and guarantees of the Company and its subsidiaries as a whole may not exceed 250% of the Company's net worth.

12. Endorsements and guarantees made by the Company and its subsidiaries to a single enterprise may not exceed 50% of the Company's net worth.

13. Endorsements and guarantees made by the Company to the subsidiaries, or subsidiaries to the Company, are not subject to the above-mentioned restrictions. However, the aggregate amount of endorsements/guarantees that the Company or its subsidiaries make for a single company may not exceed 200% of the net worth of the company providing guarantees.

14. Note 3: Eliminated in the consolidated financial statements.

15. Securities held as of December 31, 2021 (excluding investment in subsidiaries, associates and joint ventures):

(In thousands of TWD/Shares)

Name of holder	Category and name of security	Category and name of security	Account title		Ending b	alance	alance	Notes
				Number of shares	Book value	Percentage of shares	Market value
The Company 〞 〞 〞 〞 〞 〞 〞	Domestic listed stocks: GREATWALL ENTERPRISE CO., LTD. Formosa Plastics Corporation Formosa Chemicals & Fibre Corporation Tainan Spinning Co., Ltd. TAIYEN BIOTECH CO., LTD China Steel Corporation Delta Electronics, Inc. Hon Hai Precision Ind. Co., Ltd.	- - - - - - - -	Financial assets at fair value through profit or loss-current 〞 〞 〞 〞 〞 〞 〞	12,983,696 376,288 245,480 11,366,898 1,108,000 2,291,162 4,354,000 77,440	693,329 39,134 19,835 290,424 36,786 80,992 1,197,350 8,054	% 1.52 % 0.01 % - % 0.69 % 0.55 % 0.01 % 0.17 % -	693,329 39,134 19,835 290,424 36,786 80,992 1,197,350 8,054

〜 74 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Name of holder	Category and name of security	Category and name of security	Account title		Ending b	alance	alance	Notes
				Number of shares	Book value	Percentage of shares	Market value
The Company 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 WHL Singapore	Taiwan Semiconductor Manufacturing Co., Ltd Transcend Information, Inc. Amtran Technology Co., Ltd. Yang Ming Marine Transport Corp. China Airlines Ltd. Chinese Maritime Transport Ltd. Mega Financial Holding Co., Ltd. Taishin Financial Holding Co., Ltd. First Financial Holding Co., Ltd. The Eslite Spectrum Corporation Shih Wei Navigation Co., Ltd. Taiwan Cooperative Financial Holding Co., Ltd. Taiwan Secom Co., Ltd. Domestic Emerging stocks: TIGERAIR TAIWAN CO., LTD. Domestic listed stocks: Shihlin Paper Corporation Chunghwa Telecom Co., Ltd. Domestic unlisted stocks: Taipei Port Container Terminal Corp. United Stevedoring Corporation Foreign listed stocks: Da Nang Port Joint Stock Company	- - - - - - - - - - - - - - Related party in substance - Related party in substance - -	Financial assets at fair value through profit or loss-current 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 Financial assets at fair value through profit or loss-current Financial assets at fair value through other comprehensive income-non-current 〞 Financial assets at fair value through other comprehensive income-non-current 〞 Financial assets at fair value through other comprehensive income-non-current	529,000 89,111 924,041 957,526 23,753,862 435,050 18,799,646 20,356,132 17,502,208 1,078,000 775,888 32,006,051 3,303,000 358,309 9,351,088 27,520,000 79,315,476 781,250 20,090,000	325,335 6,514 16,263 115,861 654,419 25,407 668,327 385,749 428,804 64,249 35,070 814,554 343,512 11,108 606,886 3,206,080 467,145 12,160 718,420	% - % 0.02 % 0.12 % 0.03 % 0.41 % 0.22 % 0.14 % 0.18 % 0.14 % 2.27 % 0.28 % 0.24 % 0.73 % 0.09 % 3.60 % 0.35 % 15.25 % 15.63 % 20.29	325,335 6,514 16,263 115,861 654,419 25,407 668,327 385,749 428,804 64,249 35,070 814,554 343,512 11,108 606,886 3,206,080 467,145 12,160 718,420

1. Accumulated buying/selling of the same marketable securities for which the dollar amount reaches $300 million or 20% or more of paid-in capital: None.

2. Acquisition of real estate for which the dollar amount reaches $300 million or 20% or more of paid in capital: None.

〜 75 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

1. Disposition of real estate for which the dollar amount reaches $300 million or 20% or more of paid-in capital: None.

2. Buying/selling products for which the dollar amount reaches $100 million or 20% or more of paid-in capital:

Name of company	Name of Counter- party	Relationship	Transaction details	Transaction details	Transaction details	Transaction details	Reasons why and description of how the transaction conditions differ from general transactions	Reasons why and description of how the transaction conditions differ from general transactions	Account/note receivable (payable)	Account/note receivable (payable)	Notes
			Purchase/ Sale	Amount	Percentage of total purchases/ sales	Credit period	Unit price	Credit period	Balance	Percentage of total accounts/notes receivable (payable) (Note 1)
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Interasia Lines Taiwan WHL- Vietnam Tan Cang-Cai Mep International Terminal Co., Ltd. Taipei Port WHL Singapore WHL Singapore IAL Singapore IAL Singapore WHL Hongkong WHL (Japan) Hyaline NSTC APLI WCIC NSaTC	Related party in substance Subsidiary Associate Corporate director of the company Subsidiary Subsidiary Related party in substance Related party in substance Subsidiary Same director with the company Same director with the company Related party in substance Related party in substance Related party in substance Related party in substance	Loading and unloading revenue Commission fee Terminal handing charges, container fee Container fee, terminal handling charges Rent income, commission revenue, shipping agent revenue Charter hire cost, oil expense, joint venture cost Joint venture revenue, container rental revenue, shipping agent revenue, charter hire income Joint venture cost, container rental cost Commission fee Commission fee Commission fee Tow charge Container fee Turnkey fee Tow charge, container fee	(107,330) 526,942 177,040 978,270 (6,425,667) 15,424,777 (1,629,976) 636,911 2,827,655 668,136 552,081 694,334 332,556 180,133 110,938	% 0.09 % 0.92 % 0.31 % 1.71 % 5.54 % 26.96 % 1.41 % 1.11 % 4.94 % 1.17 % 0.96 % 1.21 % 0.58 % 0.31 % 0.19	30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days	- - - - - - - - - - - - - - -	- - - - - - - - - - - - - - -	16,365 (18,942) - (5) - (7,568,346) 46,594 - (693,266) - - (54,123) (5,675) (15,398) (4,888)	% 0.11 % 0.12 % - % - % - % 48.36 % 0.32 % - % 4.43 % - % - % 0.35 % 0.04 % 0.10 % 0.03	Note 2 Note 2 Note 2 Note 2

〜 76 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Name of company	Name of Counter- party	Relationship		Transaction details	Transaction details	Transaction details	Reasons why and description of how the transaction conditions differ from general transactions	Reasons why and description of how the transaction conditions differ from general transactions	Account/note receivable (payable)	Account/note receivable (payable)	Notes
			Purchase/ Sale	Amount	Percentage of total purchases/ sales	Credit period	Unit price	Credit period	Balance	Percentage of total accounts/notes receivable (payable) (Note 1)
The Company The Company The Company The Company The Company The Company The Company WHL Singapore WHL Singapore WHL Hongkong WHL- Malaysia WHL- Thailand TK Logistics International Co., Ltd. WHL-Vietnam WHL-India WHL-Korea	WHL- Malaysia New World Container services Corporation TK Logistics International Co., Ltd. WHL- Thailand WHL-Korea WHL-India Shin Sheng The Company The Company The Company The Company The Company The Company The Company The Company The Company	Subsidiary Related party in substance Subsidiary Subsidiary Subsidiary Subsidiary Related party in substance Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	Commission fee Container fee Container fee, labor fee, terminal handling charge Commission fee Commission fee Commission fee Tow charge Rent expense, commission fee, shipping agent expense Oil revenue, charter hire income, joint venture revenue Commission income Commission income Commission income Container revenue, service revenue Commission income Commission income Commission income	217,108 145,699 120,325 231,711 205,658 300,605 101,951 6,425,667 (14,576,330) (2,827,655) (217,108) (231,711) (120,325) (526,942) (300,605) (205,658)	% 0.38 % 0.25 % 0.21 % 0.40 % 0.36 % 0.53 % 0.18 % 10.60 % 11.08 % 95.45 % 99.94 % 90.73 % 47.06 % 100.00 % 100.00 % 98.05	30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days	- - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - -	57,745 (11,529) (11,965) (394,054) - (130,797) (8,733) - 7,568,346 693,266 (57,745) 394,054 11,965 18,942 130,797 -	% 0.37 % 0.07 % 0.08 % 2.52 % - % 0.84 % 0.06 % - % 70.46 % 13.26 % 26.07 % 87.10 % 50.86 % 3.64 % 66.97 % -	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2

Note 1: Including notes receivable / payable, accounts payable－related parties and receivable / payable from / to agents, contract assets. Note 2: Eliminated in the consolidated financial statements.

1. Accounts receivable from related parties for which the dollar amount reaches $100 million or 20% or more of paid-in capital:

Name of related party	Counter-party	Relationship	Balance of receivables from related party	Turnover rate	Past-due re relate Amount	ceivables from d party	Subsequently received amount of receivables from related party	Allowances for bad debts
						Action taken
The Company (Note 2) The Company (Note 2) The Company (Note 2) The Company (Note 2) The Company (Note 2)	Clipper Shenzhen Uniwin International Logistics Ltd. WHL-USA WHL Phils. WHL Ecuador	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	1,623,210 658,475 173,926 148,926 106,356	% - % - % - % - % -	- - - - -	- - - -	1,623,210 656,588 173,891 148,926 105,786	- - - - -

〜 77 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Name of related party	Counter-party	Relationship	Balance of receivables from related party	Turnover rate	Past-due receivables from related party	Past-due receivables from related party	Subsequently received amount of receivables from related party	Allowances for bad debts
					Amount	Action taken
The Company (Note 2) WHL-Singapore (Note 2) WHL-HongKong (Note 2) WHL-Thailand (Note 2) Bao Sheng Shipping Agency Co., Ltd. WHL-India (Note 2) The Company (Note 3)	WHL (Japan) The Company The Company The Company The Company The Company WHL-Singapore	Same director with the Company Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	1,310,422 7,568,346 693,266 394,054 195,973 130,797 8,266,370	% - % - % - % - % - % - % -	- - - - - - -	- - - - -	1,266,222 7,568,346 693,266 277,349 180,552 130,797 5,112,800	- - - - - - -

Note 1: Eliminated in the consolidated financial statements.

Note 2: Including accounts receivable, contract assets and receivable from agent. Note 3: Other receivables.

9. Derivative transactions: None.

• (b) Information on investees

For the year ended December 31, 2021, the information on investees (excluding investees in Mainland China) as follows:

Name of the investor	Name of investee	Location	Major operations	Initial invest	ment amount		Ending balanc	e	Net income (loss) of the investee	Investment income (losses)	Notes
				Ending balance	Beginning balance	Shares	Ratio of shares	Book value
The Company 〃 〃 〃 〃 〃 WHL-Singapore 〃 〃 〃 〃 〃 〃	Wan Hai Lines (Singapore) Pte. Ltd. k.k. WH Corporation Tan Cang-Cai Mep International Terminal Co., Ltd. T.K. Logistics International Co., Ltd. Bao Sheng Shipping Agency Co., Ltd. Hai Phong International Container Terminal Co., Ltd. Wan Hai Lines (Phils.), Inc. Wan Hai Lines (H.K.) Limited Wan Hai Lines (M) Sdn. Bhd. Yi Chun Shipping Agencies Sdn. Bhd. Wan Hai Lines (Korea) Ltd. Wan Hai International Pte. Ltd. Wan Hai Lines (Thailand) Ltd.	Singapore Japan Vietnam Taiwan Taiwan Vietnam Philippines Hong Kong Malaysia Malaysia Korea Singapore Thailand	Transportation and shipping agency service, chartering of ships, and international transportation and shipping agency services Terminal operation and management service, and vessel rental service Managing wharf and containers Managing container terminals and storage facilities Acting as agent for transportation affair and contracting ocean shipping and related services. Managing wharf and containers Transportation and shipping agency services Transportation and shipping agency services Transportation and shipping agency services ODD operations Transportation and shipping agency services Transportation and shipping agency services Transportation and shipping agency services	21,983,099 7,141 259,917 143,000 30,000 598,211 5,991 695,246 4,613 1,845 11,019 239,979 4,732	21,983,099 7,141 259,917 143,000 30,000 598,211 5,991 695,246 4,613 1,845 11,019 239,979 4,732	979,399,234 500 - 14,300,000 3,000,000 - 901,540 160,000,000 500,000 200,000 80,000 10,312,460 49,000	% 100.00 % 100.00 % 21.33 % 55.00 % 70.01 % 16.50 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 49.00	108,663,044 22,892 441,208 153,914 38,078 581,631 16,411 3,776,266 110,620 16,117 83,195 638,436 116,169	73,488,913 1,355 361,292 14,000 2,240 296,108 5,675 2,195,702 40,959 (475) 69,952 250,233 107,307	73,975,748 1,355 77,064 7,699 1,568 48,858 5,675 2,195,702 40,959 (475) 69,952 250,233 52,580	Subsidiary (Note 2、3) Subsidiary (Note 3) Associate (Note 1) Subsidiary (Note 3) Subsidiary (Note 3) Associate (Note 1) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3)

〜 78 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Name of the investor	Name of investee	Location	Major operations	Initial invest	ment amount		Ending balanc	e	Net income (loss) of the investee	Investment income (losses)	Notes
				Ending balance	Beginning balance	Shares	Ratio of shares	Book value
WHL-Singapore 〃 〃 〃 〃 〃 〃 〃 WHL INTL. 〃 〃 〃 WHL INTL. WHL Hongkong Bravely International Pte. Ltd. WAN HAI LINES (USA) LTD. Wan Hai Lines (India) PVT Ltd.	Wan Hai (Vietnam) Ltd. HE CHUN LOGISTICS COMPANY LTD. Wan Hai Lines Peru S.A.C. WanHai Lines Ecuador S.A. PHUC XUAN MARITIME SERVICE CO.,LTD. Bravely International Pte. Ltd. WAN HAI LINES (USA) LTD. Wan Hai Shipping Limited Wan Hai Lines (UAE) LLC. Infinite Marine Investment Co., Ltd. Wan Hai Lines (India) PVT Ltd. Wan Hai Lines Peru S.A.C. WanHai Lines Ecuador S.A. Dawin Logistics (International) Limited Bravely (Myanmar) Transport and Logistics Company Limited Wan Hai Lines (Arizona) LLC. WH Logistics Private Limited	Vietnam Vietnam Peru Ecuador Vietnam Singapore America Myanmar Dubai Cayman India Peru Ecuador Hong Kong Myanmar America India	Transportation and shipping agency services ODD operations Transportation and shipping agency services Transportation and shipping agency services Container yard business Transportation and investment Transportation and shipping agency services Transportation and shipping agency services Transportation and shipping agency services Investment Transportation and shipping agency services Transportation and shipping agency services Transportation and shipping agency services Managing container, storage and logistics services Management container, storage and logistic service House rental and management Managing container, storage and logistics services	8,691 60,857 1,942 10,246 9,186 625,026 437,514 1,075 1,365 173,463 69 20 178 570,480 127,584 359,760 395	8,691 60,857 1,942 1,627 9,186 625,026 437,514 1,075 1,365 173,463 69 20 - 570,480 127,584 359,760 -	- - 245,124 99,000 - 28,262,221 284,381 35,000 147 5,550,000 10,000 2,476 1,000 144,640,000 4,000,000 - 100,000	% 100.00 % 100.00 % 99.00 % 99.00 % 49.00 % 100.00 % 100.00 % 70.00 % 49.00 % 100.00 % 100.00 % 1.00 % 1.00 % 100.00 % 80.00 % 100.00 % 50.00	393,414 92,737 51,223 36,615 30,051 77,373 448,880 873 42,961 5,374 366,162 517 370 894,317 68,757 362,089 284	381,743 36,568 62,764 19,613 43,840 (31,134) 22,167 295 84,770 (212) 215,904 62,764 19,613 150,650 3,063 9,807 (34)	381,743 36,568 62,136 19,417 21,481 (31,134) 22,167 206 41,537 (212) 215,904 628 196 150,650 2,450 9,807 (17)	Indirect subsidiary (Note 1、3) Indirect subsidiary (Note 1、3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Associate (Note 1) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Equity method Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 3) Indirect subsidiary (Note 1、3) Equity method

Note 1: Limited companies with no common shares issued.

Note 2: The difference is due to the unrealized gain / loss.

Note 3: Eliminated in the consolidated financial statements.

• (c) Information on investment in Mainland China

• Information on investment in Mainland China:

Name of the investee in Mainland China	Major operations	Issued capital	Method of investment	Beginning remittance balance - Cumulative investment (amount) from Taiwan	Cur remittance/ investmen	rent recoverable t (amount)	Ending remittance balance - Cumulative investment (amount) from Taiwan	Net income (loss) of the investee	Direct /indirect shareholding (%) by the Company	Current investment gains and losses (Note 2)	Carrying Amount	Accumulate d Inward Remittance of Earnings
					Remittance amount	Recoverable amount
Guangzhou Wan Hai Information Technology Ltd. Shenzhen Uniwin nternational Logistics Ltd.	Information software service Freight transportation and acting as agent for transport affairs	7,922 644,016	(1) (1)	- -	- -	- -	- -	870 118,709	% 100.00 % 100.00	870 118,709	22,433 725,182	- -

〜 79 〜

(English Translation of Financial Statements Originally Issued in Chinese) WAN HAI LINES LTD.

NOTES TO THE FINANCIAL STATEMENTS

Name of the investee in Mainland China	Major operations	Issued capital	Method of investment	Beginning remittance balance - Cumulative investment (amount) from Taiwan	Cur remittance/ investmen	rent recoverable t (amount)	Ending remittance balance - Cumulative investment (amount) from Taiwan	Net income (loss) of the investee	Direct /indirect shareholding (%) by the Company	Current investment gains and losses (Note 2)	Carrying Amount	Accumulate d Inward Remittance of Earnings
					Remittance amount	Recoverable amount
Clipper International Shipping Agency Ltd. Blue Ocean Logistics (Shanghai) Ltd. Shenzhen Yong Chun International Shipping Management Co., Ltd. Wan Hang Tours Co., Ltd. Qingdao port and Win International Logistics Co., Ltd.	International shipping agency services Containers, storage and international transportation services International shipping management Retailing and Catering management Container yard station	4,070 32,596 29,068 287,330 50,188	(1) (1) (1) (1) (1)	- - - - -	- - - - -	- - - - -	- - - - -	22,139 32,228 6,307 (6,759) 22,110	% 49.00 % 100.00 % 90.00 % 50.00 % 50.00	10,848 32,228 5,676 (3,379) 11,055	11,918 94,666 38,674 113,921 39,390	- - - - -

Note 1: Indirectly invested in Mainland China through investees.

Note 2: The investment income (loss) recognized in current period was audited and certified by the CPA of the Company.

2. Limitation on investment in Mainland China:

Aggregate investment amount remitted from Taiwan to Mainland China at the end of the period	Investment amount approved by Investment Commission of Ministry of Economic Affairs	Limitation on investment in Mainland China by Investment Commission of Ministry of Economic Affairs
-	1,131,368	86,565,015

Note: The Company's investments in Mainland China were mostly from the investees' self-owned capital in indirect subsidiaries.

3. Significant transactions:

As of December 31, 2021, the significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in "Information on significant transactions".

• (d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Yi Chun Navigation Inc. Asia Pacific Logistics International Co., Ltd. TCEL CCEL	313,757,720 194,539,837 187,993,144 187,993,144	% 12.85 % 7.97 % 7.70 % 7.70

(14) Segment Information

Please refer to the consolidated financial report.

〜 80 〜

Wan Hai Lines Ltd.

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description Amount $ 90,539 1,243,853 USD 880,165 thousand @ 27.66 30,598,361 EUR 88 thousand @ 31.29 THB 102,950 thousand @ 0.83 KRW 96,773 thousand @ 0.02 CNY 230,926 thousand @ 4.34 JPY 19,291,681 thousand @ 0.24 SGD 2,128 thousand @ 20.44 HKD 137,367 thousand @ 3.55 1,405,360 USD 245,000 thousand @ 27.66 6,775,475 $ 40,113,588
Cash on hand Saving accounts-TWD Saving accounts-Foreign currency Time deposits-TWD Time deposits-Foreign currency Total

〜 81 〜

Wan Hai Lines Ltd.

STATEMENT OF CHANGES IN FINANCIAL ASSETS MEARSURED

AT FAIR VALUE THROUGH PROFIT OR LOSS

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Name of financial instruments	Description Domestic listed stocks 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 Domestic stocks traded over the counter Domestic emerging stocks	Shares (In thousands) Book Value 12,984 $ - 376 - 245 - 11,367 - 1,108 - 2,291 - 4,354 - 77 - 529 - 89 - 924 - 958 - 23,754 - 435 - 18,800 - 20,356 - 17,502 - 776 - 32,006 - 3,303 - 1,078 - 358 -	Total Amount - - - - - - - - - - - - - - - - - - - - - - -	Interest Rate % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % -	Acquisition Cost 350,176 29,619 17,917 211,565 34,262 57,287 605,461 7,916 207,905 9,530 35,041 38,942 457,957 51,519 478,337 229,092 264,018 63,795 453,655 287,417 136,106 12,094 4,039,611	Fai	r Value Total Amount 693,329 39,134 19,835 290,424 36,786 80,992 1,197,350 8,054 325,335 6,514 16,263 115,861 654,419 25,407 668,327 385,749 428,804 35,070 814,554 343,512 64,249 11,108 6,261,076	Change in fair value-attribute to change in credit risk Note - - - - - - - - - - - - - - - - - - - - - - -
						Unit Price (NT$) 53.40 104.00 80.80 25.55 33.20 35.35 275.00 104.00 615.00 73.10 17.60 121.00 27.55 58.40 35.55 18.95 24.50 45.20 25.45 104.00 59.6000 31.0000
GREATWALL ENTERPRISE CO., LTD. Formosa Plastics Corporation Formosa Chemicals & Fiber Corporation Tainan Spinning Co., Ltd. TAIYEN BIOTECH CO., LTD China Steel Corporation Delta Electronics, Inc. Hon Hai Precision Ind.Co., Ltd. Taiwan Semiconductor Manufacturing Co., Ltd Transcend Information, Inc. Amtran Technology Co., Ltd. Yang Ming Marine Transport Corp. China Airlines Ltd. Chinese Maritime Transport Ltd. Mega Financial Holding Co., Ltd. Taishin Financial Holding Co., Ltd. First Financial Holding Co., Ltd. Shih Wei Navigation Co., Ltd. Taiwan Cooperative Financial Holding Co., Ltd. Taiwan Secom Co., Ltd. The Eslite Spectrum Corporation TIGERAIR TAIWAN CO., LTD.

〜 82 〜

Wan Hai Lines Ltd.

STATEMENT OF CURRENT FINANCIAL ASSETS AT AMORTIZED COST

December 31, 2021

(In Thousands of New Taiwan Dollars)

Name	Description USD 2,304 thousand @ 27.66	Boand Lot	Book Value $ -	Total Amount -	Interest Rate % -	Carrying Amount Note 63,717
Saving accounts- Foreign Currency		-

STATEMENT OF NOTES RECEIVABLE

Client Name	Description	Amount	Notes
Notes receivables:
Non-Related party:
SPEEMARK CONSOLIDATION SERVICE	$	6,557
LTD.
Others (Note 1)		63,140
Total	$	69,697
Note 1: The amount of individual client does not exceed 5% of the account balance.

〜 83 〜

Wan Hai Lines Ltd.

STATEMENT OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Client Name	Description	Amount Notes $ 121,473 84,951 75,794 128,344 1,582,683 1,993,245 (1,683) $ 1,991,562
Accounts receivable-joint service: Non-Related parties: Yang Ming Marine Transport Corp. Others (Note 1) Accounts receivable-freight, additional fee and container loading / discharge Related parties: Others (Note 1) Non-Related parties: Formosa Plastics Corporation Others (Note 1) Subtotal Less: Allowance for doubtful receivables Total	Freight and surcharge income 〞

Note 1: The amount of individual client does not exceed 5% of the amount balance.

〜 84 〜

Wan Hai Lines Ltd.

STATEMENT OF OTHER RECEIVABLES

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description	Amount Note $ 1,294 577,305 7,421,060 397,439 8,397,098 70,360 98,719 172,852 25,738 105,477 473,146 $ 8,870,244
Related parties: Accounts receivable- disposal of assets Accounts receivable-vessel rental revenue Advance receivable Others Subtotal Non-Related parties: Receivables Accounts receivable-vessel rental revenue Indemnity income receivables Tax receivable Other Subtotal Total	Revenue from sale of containers Revenue from charters of the remaining fuel at the end of rental period or others Advance receivable collected from WHL-Singapore Discount on expense of containers loading / discharge Revenue from charters of the remaining fuel at the end of rental period or others Relevant insurance compensation Income tax refunds

〜 85 〜

Wan Hai Lines Ltd.

STATEMENT OF INVENTORIES

DECEMBER 31, 2021

(IN THOUSANDS OF NEW TAIWAN DOLLARS)

Item	Amount Cost Net Realizable Value Note $ 78,685 78,685 713,060 713,060 8,394 8,394 $ 800,139 800,139
	Cost $ 78,685 713,060 8,394 $ 800,139
Light marine diesel oil Heavy marine diesel oil Fresh lubricating oil

〜 86 〜

Wan Hai Lines Ltd.

STATEMENT OF OTHER CURRENT ASSETS

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description		Amount	Note
Prepaid expenses:
Prepaid rents	Prepaid rents of vessels and	$	2,967
	office
Prepaid insurance	Prepaid insurance of		12,456
	containers, fire disaster,
	public liability insurance and
	mutual insurance
Prepaid expenses-agents			163,513
Others (The individual account does			102,256
not exceed 5% of the amount
balance)
Sub total			281,192
Payment on behalf of others:
Payment on behalf of others-charters	Payment of fuel expense,		229,740
	accommodation fee, medical
	expense and others
Payment on behalf of others-wharf	Relevant fees for ships entry		37,801
expense	and exit use
Others (The individual account does			78,188
not exceed 5% of the amount
balance)
Subtotal			345,729
Total		$	626,921

〜 87 〜

Wan Hai Lines Ltd.

STATEMENT OF CHANGES IN NON-CURRENT FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Name Shihlin Paper Corporation Chunghua Telecom Co., Ltd. Taipei Port Container Terminal Corp. United Stevedoring Corporation	Balance, January 1, 2021 Share (In thousands) Carrying value 6,374 $ 377,984 27,520 2,999,680 79,315 436,162 781 13,958 $ 3,827,784	Additions Share (In thousands) Amount 2,977 228,902 - 206,400 - 30,983 - - 466,285	Decrease Share (In thousands) Amount - - - - - - - 1,798 1,798	Balance, December 31, 2021 Share (In thousands) Carrying value 9,351 606,886 27,520 3,206,080 79,315 467,145 781 12,160 4,292,271	Collateral Note None 〞 〞 〞
	Share (In thousands)	Share (In thousands) 2,977 - - -	Share (In thousands) - - - -	Share (In thousands) 9,351 27,520 79,315 781
	6,374 27,520 79,315 781

〜 88 〜

Wan Hai Lines Ltd.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED IN DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Name Wan Hai Lines (Singapore) Pte Ltd K.K. WH Corporation Tan Cang-Cai Mep International Terminal Co., Ltd. T.K. Logistics International Co., Ltd. Bao Sheng Shipping Agency Co., Ltd. Hai Phong International Container Terminal Co Ltd.	Balance, January 1, 2021 Shares Amount 979,399,234 $ 35,745,788 500 24,513 Note 1 436,375 14,300,000 156,410 3,000,000 40,652 Note 1 534,245 $ 36,937,983	Add	i	tions Amount 72,917,256 - 4,833 - - 47,386 72,969,475	Dec	r	ease Amount - 1,621 - 2,496 2,574 - 6,691	Balance, December 31, 2021 Shares % Amount 979,399,234 % 100.00 108,663,044 500 % 100.00 22,892 Note 1 % 21.33 441,208 14,300,000 % 55.00 153,914 3,000,000 % 70.01 38,078 Note 1 % 16.50 581,631 109,900,767	Balance, December 31, 2021 Shares % Amount 979,399,234 % 100.00 108,663,044 500 % 100.00 22,892 Note 1 % 21.33 441,208 14,300,000 % 55.00 153,914 3,000,000 % 70.01 38,078 Note 1 % 16.50 581,631 109,900,767	Balance, December 31, 2021 Shares % Amount 979,399,234 % 100.00 108,663,044 500 % 100.00 22,892 Note 1 % 21.33 441,208 14,300,000 % 55.00 153,914 3,000,000 % 70.01 38,078 Note 1 % 16.50 581,631 109,900,767	Market Valu	e or Net Assets Total Amount 108,663,044 22,892 441,208 153,914 38,078 581,631 109,900,767	Collateral Note None 〞 〞 〞 〞 〞
	Shares	Shares			Shares			Shares 979,399,234 500 Note 1 14,300,000 3,000,000 Note 1	%		Unit price 110.95 45,783.17 - 10.76 12.69 -
	979,399,234 500 Note 1 14,300,000 3,000,000 Note 1	- - - - - -			- - - - - -				% 100.00 % 100.00 % 21.33 % 55.00 % 70.01 % 16.50

Note 1: Limited companies with no common share issued.

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Wan Hai Lines Ltd.

STATEMENT OF OTHER NON-CURRENT ASSET

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description		Amount		Note
Deferred tax assets-non-current		$	231,501
Refundable deposits			147,769
Prepayments for equipment			2,213,417
Others				883
Total		$	2,593,570
	STATEMENT OF ACCOUNTS PAYABLES
	DECEMBER	31, 2021
	(In Thousands of New	Taiwan Dollars)
	Client Name	Description		Amount	Note
Accounts payable
Related parties:
WHL Singapore	Oil expense		$	7,568,346
Other (Note 1)				338,932
Non-related parties
Other (Note 1)				5,939,369
Accounts payable-agents commission in transit				138,484
Accounts payable-containers fee				65,056
Accounts payable-charters				101,948
Accounts payable-joint service				39,991
Accounts payable-rental fee				70,049
Total			$	14,262,175

Note 1: The amount of individual client does not exceed 5% of the amount balance.

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Wan Hai Lines Ltd.

STATEMENT OF OTHER PAYABLES

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description Amount $ 6,587 Estimated year-end bonus 852,842 Estimated compensation to directors and employees 907,151 243,095 2,003,088 1,206,428 250,051 $ 3,466,154
Accrued expense: Related party: Others (The amount of individual client does not exceed 5 % of the balance amount) Non-related party Bonus payable Compensation payable Others Subtotal Payables on equipment Others Total

STATEMENT OF LEASE LIABILITIES

Item	Lease terms	Discount rates	Amount Note $ 2,845,587 116,436,155 2,566,654 7,990 $ 121,856,386
Wharf Vessel equipment Containers Others Total	4~15 years 1~27 years 1~11 years 3~5 years	1.82%~2.2% 1.8%~2.45% 1.8%~4.04% 2%~2.35%

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Wan Hai Lines Ltd.

STATEMENT OF OTHER CURRENT LIABILITIES

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description	Amount Note $ 56,473 10,165 3,244 69,882 61,439 61,439 67,725 4,136 $ 203,182
Unearned receipts: Related party: WHL Thailand IAL (S) Others (Note 1) Subtotal Non-Related party: Others (Note 1) Subtotal Receipts under custody Guarantee deposits received Total	Unearned revenue from selling containers and overpayment 〞 Collection of income tax, labor and health insurance, etc. security deposit

Note 1: The amount of individual client does not exceed 5% of the amount balance.

〜 92 〜

Wan Hai Lines Ltd.

STATEMENT OF LONG-TERM LOANS

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Creditor	Description	Balance, December 31, 2021 $ 292,789 1,783,000 1,230,000 805,123 622,237 414,825 494,617 73,747 331,860 82,965 331,860 829,650 1,244,475 1,382,750 1,037,062 414,825 774,340 1,000,000 210,000 600,000 600,000 1,400,000 700,000 300,000 414,825 500,000 51,853 17,922,803 (2,878,817) (948) $ 15,043,038	Contract period 2017.10.23~2041.05.04	Range of Interest Rates 0.20%~1.11%	Collateral Note Containers Building, Land Building, Land Containers Containers Containers Containers Containers Containers Containers Containers Containers Containers Containers Containers Containers Containers - - - - - - - - - -
Land Bank of Taiwan-Chang An Branch 〞 〞 〞 Bank of China-Taipei Branch Mizuho Bank-Taipei Branch E.SUN BANK-Taipei Branch Mega International Commercial Bank Head Office -Foreign Dept. 〞 First Commercial Bank-Jiancheng Branch 〞 〞 〞 〞 Hua Nan Commercial Bank-Chengdong Branch Chang Hwa Commercial Bank-Chilin Branch 〞 Ta Ching Bills Finance Corporation China Bills Finance Corporation 〞 〞 Mega Bills Finance Corporation International Bills Finance Corporation 〞 First Commercial Bank-Jiancheng Branch Jihsun Bank-Xinyi Branch TaipeiStarBank-Chang An Branch Less: Current portion Less:Discount on commercial paper

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Wan Hai Lines Ltd.

STATEMENT OF OPERATING REVENUE

FOR THE YEAR ENDED IN DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Item Freight revenue Rent revenue Revenue from WHL terminal Other labor service Less: Sales returns and allowances Net amount of operating revenue	Numbers	Amount Note $ 108,902,532 6,318,443 632,696 162,155 116,015,826 (10,598) $ 116,005,228

STATEMENT OF OPERATING COSTS

	Item		Amount
Agency Service		$	3,407,288
Port charges			1,851,573
stevedorage & cargo charges			21,349,908
Container expense			7,446,356
Vessel expense			9,901,835
Fuel Cost			6,399,364
Loss on inventory valuation			(13,147)
Vessel rental expense			4,579,951
Expense from WHL terminal			2,293,839
		$	57,216,967

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Wan Hai Lines Ltd.

STATEMENT OF OPERATING EXPENSES

FOR THE YEAR ENDED IN DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description	Amount Note $ 2,415,035 95,717 343,656 28,534 1,325 1,190,357 None of individual amount exceed 5% $ 4,074,624
Payroll expenses Entertainment expenses Taxes Service fees Expected Credit Losses Other expenses Total

Note 1: Please refer to Note 6 (e) for hedging liabilities.

• 2: Please refer to Note 6 (i) for changes in property, plant and equipment.

• 3: Please refer to Note 6 (i) for changes in accumulated depreciation of the property, plant and equipment.

• 4: Please refer to Note 6 (j) for changes in the right-of-use-assets.

• 5: Please refer to Note 6 (j) for accumulated depreciation changes in right-of-use assets.

• 6: Please refer to Note 6 (k) for changes in investment property.

• 7: Please refer to Note 6 (k) for changes in accumulated depreciation of investment property.

• 8: Please refer to Note 6 (l) for changes in intangible assets.

• 9: Please refer to Note 6 (o) for bonds payable.

• 10: Please refer to Note 6 (q) for defined benefit obligation.

• 11: Please refer to Note 6 (r) for deferred tax assets and liabilities.

• 12: Please refer to Note 6 (w) for interest income.

• 13: Please refer to Note 6 (w) for other revenue.

• 14: Please refer to Note 6 (w) for other income and loss.

• 15: Please refer to Note 6 (w) for financial costs.

〜 95 〜