WISDOM - Annual Report 2021 | FinancialReports.eu

Stock Code:2637

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Wisdom Marine Lines Co., Limited

2020 Annual Report

Notice to readers

This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

Taiwan Stock Exchange Market Observation Post System: http://newmops.twse.com.tw 2020 Annual Report is available at: http://www.wisdomlines.com.tw Printed on March 21, 2021

Spokesperson

Name: Bruce Hsueh Title: Chief Financial Officer Tel: 886-2-2755-2637 E-mail:[email protected]

Deputy Spokesperson

Name: Chao, Mike Tzu-Lung Title: Chief Operating Officer Tel: 886-2-2755-2637 E-mail: [email protected]

Headquarters

Wisdom Marine Lines Co., Limited

Address: Clifton House, 75 Fort Street, PO Box1350, Grand Cayman Y1-1108, Cayman Islands

Subsidiaries

Wisdom Marine Lines S.A. (Panama)

Address: Paseo del Mar and Pacific Avenues, Costa del Este, MMG Tower, 23rd Floor, Panama City, Republic of Panama

Wisdom Marine Lines Co., Limited (Singapore

Branch)

Address:8 Eu Tong Sen Street, #15-98 The Central, Singapore 059818 Tel: (+65) 6536-0377

Wisdom Marine International Inc.

Address: Rm.711, 7th Fl., No.237, Fu-Hsing S. Rd. Sec. 2, Taipei Tel: 886-2-2755-2637

Litigation/non-Litigation agent in the Republic o f China

Name: Lan, Chun-Sheng Title: Chairman Tel:886-2-27552637 E-mail: [email protected]

Stock Transfer Agent

Sino Pac Securities Agency Division Address: 3F, No.17,Bo’ai Rd., Taipei City Tel: 886-2-2381-6288 Website: http://www.sinotrade.com.tw/stocktransfer

Auditors

Ernst & Young Accounting Firm Auditors: Lin, Li-huang & Lu, Chian Uen Address: 9F, No. 333, Sec.1, Keelung Road,, Taipei City Tel.: 886-2-2757-8888

Website: http://www.ey.com

Overseas Securities Exchange

London Stock Exchange

Disclosed information can be found at http://www.londonstockexchange.com

Corporate Website ： http://www.wisdomlines.com.tw

Board of Directors

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Position Name Nationality Education and Career
BA in Business Administration, Tamkang University
Chairman Lan, Chun-Sheng TW President, Shih Wei Navigation
President, First Steamship Group
BA in Business Administration, Chapman University (USA)
Yoko Co., Ltd. Founder and President
Director Fukui Masayuki JP
Tokyo Freighting, Ltd shipbroker
Yoko Senpaku Co. Partner
BA in Economics & BS in Biology, University of Maryland (USA)
Chao, Mike Tzu-
Director TW VP of Business and Operation Department, Wisdom Marine Lines
Lung
William Tan & Associates, CPA
Jinzhou
Investment Co.,
Ltd. BA in Eastern Linguistics, Chinese Culture University
Director TW President, Prime Maritime Agency
Representative ： Sales Manager, Jardine Matheson
Chen, Ming-
Shang
PhD in Economics, National Taiwan University
Honorary Chairman, Taiwan Think Tank
National Policy Advisor to the President
Economic Advisor to the President
Independe Chairman, Council for Economic Planning and Development,
Chen, Po-Chih TW
nt Director Executive Yuan
Director, Central Bank of the Republic of China
Chairman of Department of Economics, National Taiwan
University and President of Chung-Hua Institution Economic
Research
J.S.D./LL.M., University of California, Berkeley
School of Law LL.B. National Taiwan University
Independe International Partner, King&Wood Mallesons
Tu, Neng-Mo TW
nt Director Co-Founder and Managing Partner, Elements Attorneys
Corporate Counsel, Media Tek Inc.
Corporate Counsel Asia Pacific, Foxconn Group
Ph.D in Finance, Finance Group, University of Amsterdam
M.Phil in Economics,Tinbergen Institute
Independe MBA in International Business, National Chengchi University
Lin, Tse-Chun TW
nt Director BA in Economics, National Taiwan University
Associate Professor of Finance, Faculty of Business and
Economics, University of Hong Kong
Ph.D in Economics, University of Mississippi (USA)
Master in Economics, Soochow University
BA in Economics, FengChia University
Independe Vice Chairperson & Spokesman, Fair Trade Commission, ROC
Chiu, Yung-Ho TW
nt Director Dean of Office of Academic Affairs, Soochow University
Director, First Commercial Bank
Member of Remuneration Committee, Teco Electric and Machinery
Independent Director, Chenfull International
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Position Name Nationality Education and Career	Position Name Nationality Education and Career	Position Name Nationality Education and Career	Position Name Nationality Education and Career
Independe nt Director	Liu, Tsai-Ching	TW	Ph.D in Economics, University of North Carolina at Chapel Hill BA in Economics, National Chung Hsing University Professor, National Taipei University Director, Taiwan Stock Exchange Director, Taiwan Insurance Guaranty Fund Vice Chairman, Committee on Taxation and Financial Policy, Chinese National Federation of Industries

Content

	Content
1.	Letter to Shareholders ............................................................................................................................ 6
2.	Company Overview ................................................................................................................................ 8
	2.1 Company and Group Profile ............................................................................................................................... 8
	2.2 Organization ........................................................................................................................................................ 9
3.	Corporate Governance Report ............................................................................................................ 15
	3.1 Organization ...................................................................................................................................................... 15
	3.2 Profiles of Directors, Supervisors, President, Vice Presidents, Assistant Vice Presidents, and Managers of
	Various Departments and Branch Offices ............................................................................................................... 16
	3.3 Remunerations to Directors, Supervisors, President, and Vice Presidents in the past year ............................... 23
	3.4 Corporate Governance Practices ....................................................................................................................... 27
	3.5 Information Regarding to the Company’s Audit Fee and Independence ........................................................... 61
	3.6 Replacement of CPA ......................................................................................................................................... 62
	3.7 The Company’s Chairman, Chief Executive Officer, Chief Financial Officer, and managers in charge of its
	finance and accounting operations did not hold any positions in the Company’s independent auditing firm or its
	affiliates during 2020. ............................................................................................................................................. 63
	3.8 Transfer & pledge of stock equity by directors, supervisors, managerial officers and holders of 10% or more
	of company shares ................................................................................................................................................... 63
	3.9 Information on relationships among the top ten shareholders ........................................................................... 64
	3.10 Ownership of Shares in Affiliated Enterprises ................................................................................................ 66
4.	Funding Activities ...................................................................................................................................... 70
	4.1 Capital and Share Capital .................................................................................................................................. 70
	4.2 Issuance of Corporate Bonds (Including Overseas Corporate Bonds) .............................................................. 76
	4.3 Preferred Shares ................................................................................................................................................ 82
	4.4 Global Depositary Receipts ............................................................................................................................... 82
	4.5 Employee Stock Options ................................................................................................................................... 82
	4.6 Restricted Stock Awards .................................................................................................................................... 82
	4.7 New Share Issue for Merger or Acquisition of Another Company .................................................................... 83
	4.8 Implementation of Capital Allocation Plan ....................................................................................................... 83
5.	Business Overview ..................................................................................................................................... 84
	5.1 Business Activities ............................................................................................................................................ 84
	5.2 Market, production and sales............................................................................................................................. 87
	5.3 Workforce Overview ......................................................................................................................................... 92
	5.4 Environmental protection expenditure .............................................................................................................. 93
	5.5 Employer-employee relations ............................................................................................................................ 94
	5.6 Major Contracts ................................................................................................................................................. 95
6.	Financial Information ............................................................................................................................. 104
	6.1 Five-Year Financial Summary ........................................................................................................................ 104
	6.2 Five-Year Financial Analysis .......................................................................................................................... 106
	6.3 Audit Committee’s Report for the Most Recent Year ..................................................................................... 108
	6.4 Consolidated Financial Statements for the Years Ended December 31, 2020, and Independent Auditors’
	Report .................................................................................................................................................................... 108
	6.5 A parent company only financial statement for the most recent fiscal year, certified by a CPA .................... 108

6.6 If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation. ...................................................................................... 109 7. Financial Conditions, Business Results and Risk Analysis ................................................................... 110 7.1 Financial Overview ......................................................................................................................................... 110 7.2 Business Results .............................................................................................................................................. 110 7.3 Cash Flow ....................................................................................................................................................... 111 7.4 Effect of Capital Expenditure on Financial Performance in Last Year ............................................................ 112 7.5 Investment Policy in Last Year, Profit/Loss Analysis, Improvement Plan, and Investment Plan for the Coming Year ....................................................................................................................................................................... 112 7.6 Risk Assessment for Last Year Up To the Publication Date of this Report ..................................................... 113 7.7 Other Important Information ........................................................................................................................... 120 8. Special Disclosure .................................................................................................................................... 121 8.1 Information of Related Party ........................................................................................................................... 121 8.2 Status of private placement of securities in the last fiscal year and up to the date of annual report publication ............................................................................................................................................................................... 133 8.3 Holding or disposal of shares in the Company by subsidiaries in the last fiscal year and up to the date of annual report publication ....................................................................................................................................... 134 8.4 Other supplemental information ...................................................................................................................... 134 8.5 Material deviation in protection of shareholders' rights .................................................................................. 134 8.6 Corporate events with material impact on shareholders' equity or stock prices set forth in Article 36, Paragraph 3, Subparagraph 2 of Securities and Exchange Act in the past year and up to the date of report should be listed individually: .......................................................................................................................................................... 137 Statement on Internal Control ................................................................................................................... 138 Audit Committee’s Review Report ............................................................................................................ 139 CONSOLIDATED FINANCIAL STATEMENTS .................................................................................... 140

1. Letter to Shareholders

Dear Shareholders,

External Environment

In 2020, the coronavirus spread across the globe, and wreaked havoc on both supply and demand sides of shipping. Before the scope of the pandemic became clear, governments imposed traffic restrictions in an attempt to keep the virus at bay. Most trading and shipping company owners opted to wait and see, while the demand for dry bulk shipping sustained a greater impact. Therefore, the dry bulk shipping market stagnated in the first half year, which in turn affected chartering and ship purchases and sales. However, a shrinking global economy and low oil prices made it easier to switch relatively smoothly to low sulphur fuels.

In the second half year, the countries became able to counter more effectively the effects of the pandemic on economic activities. Previously suspended investing and manufacturing activities started to resume. Therefore, the dry bulk shipping market started recovering in the second half year, especially in time charters and freight futures. The overall Baltic Dry Index (BDI) has not returned to the level in 2019. However, a steadily recovering market sends a positive signal to dry bulk shipping companies. The rising demand for container transportation in the fourth quarter can be considered a sign of economic activities recovering from the shock of the pandemic. Meanwhile, more ship purchases and sales were showing up in the market.

While the dry bulk shipping market had started recovering in the second half of 2020, newbuilding investment remained relatively low. The total number of newbuilding orders was below the level in 2019 for all types of ships. Given the pressure to replace old ships aged 20 years or more, the possibility of a supply shortage remains in the dry bulk shipping market. Moreover, the United Nations is not putting any hold on shipping related environmental regulations because of the pandemic. Carbon reduction requirements may raise the operating costs for old ships even higher in the next three to five years. Therefore, supply and demand of dry bulk shipping will continue to provide basic support for freight in the medium term.

2020 Business Results

In 2020, we had 8 newbuild ships and 1 fewer ship under management. The number of ships in our fleet underwent a net increase of 7, and the total number of ships in our fleet was 136 at the end of the year.

We had intended to take advantage of the supply-demand mismatch to increase profits in 2020. Therefore, the number of ships with contract renewal and index linked rent was higher in the first quarter compared to previous years. However, COVID-19 created unanticipated volatility in the market. Having sustained larger market volatility, neither of our revenue and profit performed well in the first half year. Fortunately, the average gross profit margin on newbuilding stayed close to 40%, which was a significant contribution to the overall profit margin. The economy started to recover in the second half year, and we adopted more conservative business strategies. As a result, profits showed slight increases, and the gross profit margin rose from 7.64% in the first half year to 19.07% in the second half year. The gross profit margin was 13.88% for the year. The total revenue was US$405.1 million, 9.47% lower compared to the previous year.

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Letter to Shareholders

In terms of nonoperating income, we had little nonoperating income in 2020. However, the interest expenses fell by US$16.1 million compared to the previous year, and the foreign exchange loss was recognized at US$8.3 million due to appreciation of the Japanese yen. The net operating profit was US$51 million for the year, and the net income after tax was US$4 million.

Furthermore, to counter the uncertainties created by the coronavirus and the cash flow pressure created by suspension of asset disposal, we were fortunate to have the support of several major banks with whom we had a business relationship and been granted suspension of repayments, change of interest rates, and cash issues in mid-year. These measures were intended to strengthen our financial stability amid market changes.

2021 Business Plan

We expect to have 7 more newbuild ships delivered in 2021. They include 2 kamsarmax, 1 supramax, 3 handysize, and 1 liquefied petroleum gas ship. All are built by first class Japanese builders, such as Imabari, JMU, Namura, Tsuneishi, Onomichi, and Murahide. These newbuild ships include 3 environmentally friendly vessels that comply with the Tier III NOx emission standards.

Given the market is on track for a steady recovery, a reasonable profit margin is still ensured for most time charters. We will continue to seek opportunities in working with long-term customers gradually in newbuild ships and contract renewal. The goal is to increase profits steadily as the market recovers. In addition, we will lock in index linked rents at appropriate timing to ensure stable cash flows.

Furthermore, the ship disposal plans suspended due to the pandemic in 2020 can be expected to resume in 2021 in order to increase efficiency for the entire fleet and keep improving our financial structure. Meanwhile, we will follow changes in the laws and regulations closely in order to re-evaluate our capital expenditure plans and ensure we have an environmentally friendly and energy saving fleet that is healthy and competitive.

Chairman ： Lan, Chun-Sheng

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Letter to Shareholders

2. Company Overview

2.1 Company and Group Profile

2.1.1 Date of Establishment

Wisdom Marine Lines Co., Ltd. ("Company") is the parent company of Wisdom Marine Group ("Group"). A holding company was created in Cayman Islands on October 21, 2008. The Company controls Wisdom Marine Lines S.A., Wisdom Marine International Inc., and Well Shipmanagement and Maritime Consultant Co., Ltd. In particular, the business entity Wisdom Marine Lines S.A. has been a specialized international shipping company since it was established on March 15, 1999. The key operating activities of the Group include marine transport, vessel management and maintenance, and vessel leasing. A diverse fleet and a flexible management model enable the Group to minimizes market risks.

The Group was founded by its chairman James Lan ("Chairman Lan"). Chairman Lan was born to a family of marine transport experts. He had worked as shipowning partner, professional manager, and independent shipowner; and served as the chairman of DNV GL Taiwan. With thirty years of experience in marine transport, Chairman Lan is well versed in ship procurement, business operations, and financial management. With Chairman Lan at the helm, the management team deploys flexible business strategies and steers the business to stay competitive in a volatile market. The Group grows in reputation, revenue, and profit as the size of its fleet increases at a steady pace.

2.1.2 Addresses and Telephones of Headquarters, Offices, and Factories

2.1.2.1 Headquarters

Name: Wisdom Marine Lines Co., Limited

Address: Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman, KY1-1108, Cayman Islands Telephone: (+886 2) 2755-2637

2.1.2.2 Singapore Branch

Name: Wisdom Marine Lines Co., Limited (Singapore Branch) Address: 8 Eu Tong Sen Street, #15-98 The Central, Singapore 059818 Telephone: （65）6536-0377

2.1.2.3 Subsidiary in Panama

Name: Wisdom Marine Lines S.A.

Address: Paseo del Mar and Pacific Avenues, Costa del Este, MMG Tower, 23rd Floor, Panama City, Republic of Panama

Telephone:（886 2）2755-2637

2.1.2.4 Subsidiary in Taiwan

Name: Wisdom Marine International Inc.

Address: 7F-11 No. 237, Sec. 2, Fuxing South Road, Taipei City, Taiwan Telephone: （886 2）2755-2637

2.1.2.5 Sub-subsidiary in Rotterdam

Name: Wisdom Lines Eurpoe B.V.

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Company Overview

Address: Blaak 34, Tribes Rotterdam Blaak , 3011TA Rotterdam Telephone: （886 2）2755-2637

2.1.2.6 Sub-subsidiary in Taiwan

Name: Well Shipmanagement and Maritime Consultant Co., Ltd. Address: 12F-3 No. 237, Sec. 2, Fuxing South Road, Taipei City, Taiwan Telephone:（886 2）2700-1158

2.2 Organization

2.2.1 Organization

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Wisdom Marine Lines Co., Limited
100% 100%
Wisdom Marine International Inc. Wisdom Marine Lines S.A.
40% 100% 100% 100%
Pescadores Investment Well Shipmanagement Subsidiaries of Wisdom Marine Lines
and Maritime Wisdom Lines Europe B.V.
and Development Inc. S.A.(Note 1)
Consultant Co., Ltd.
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Note 1: Subsidiaries of Wisdom Marine Lines S.A.:

AMIS WISDOM S.A. (100%) 、 AMIS NAVIGATION S.A. (100%) 、 AMIS STAR S.A. (100%) 、 AMIS INTERNATIONAL S.A. (100%) 、 AMIS MARINER S.A. (100%) 、 AMIS CARRIERS S.A. (100%) 、 AMIS ELEGANCE S.A. (100%) 、 AMIS FORTUNE S.A. (100%) 、 AMIS HERO S.A. (100%) 、 AMIS JUSTICE S.A. (100%) 、 AMIS MIRACLE S.A. (100%) 、 AMIS NATURE INC. (100%) 、 AMIS VICTORY S.A. (100%) 、 ARIKUN WISDOM S.A. (100%) 、 ATAYAL WISDOM S.A. (100%) 、 ATAYAL STAR S.A. (100%) 、 ATAYAL MARINER S.A. (100%) 、 ATAYAL BRAVE S.A. (100%) 、 ADIXI WISDOM S.A. (100%) 、 BABUZA WISDOM S.A. (100%) 、 BEAGLE MARINE S.A. (100%) 、 BEAGLE WISDOM S.A. (100%) 、 BUNUN BRAVE S.A. (100%) 、 BUNUN CHAMPION S.A. (100%) 、 BUNUN DYNASTY S.A. (100%) 、 BUNUN ELEGANCE S.A. (100%) 、 BUNUN FORTUNE S.A. (100%) 、 BUNUN HERO S.A. (100%) 、 BUNUN INFINITY S.A. (100%) 、 BUNUN JUSTICE S.A. (100%) 、 BUNUN MARINE SA(100%) 、 BUNUN NAVIGATION S.A. (100%) 、 BUNUN NOBLE INC. (100%) 、 BUNUN WISDOM S.A. (100%) 、 COSMIC WISDOM S.A. (100%) 、 DUMUN MARINE S.A. (100%) 、 DUMUN NAVIGATION S.A. (100%) 、 DAIWAN CHAMPION S.A. (100%) 、 DAIWAN DOLPHIN S.A. (100%) 、 DAIWAN ELEGANCE S.A. (100%) 、 DAIWAN FORTUNE S.A. (100%) 、 DAIWAN GLORY S.A. (100%) 、 DAIWAN HERO S.A. (100%) 、 DAIWAN INFINITYS.A. (100%) 、 DAIWAN JUSTICE S.A. (100%) 、 DAIWAN KALON S.A. (100%) 、 DAIWAN LEADER S.A. (100%) 、 DAIWAN MIRACLE S.A. (100%) 、 ELITE STEAMSHIP S.A. (100%) 、 EUROASIA INVESTMENT S.A. (100%) 、 FAVORAN WISDOM S.A. (100%) 、 FOURSEAS MARITIME S.A. PANAMA (100%) 、 FRATERNITY MARINE S.A. (100%) 、 FRATERNITY SHIP INVESTMENT S.A. (100%) 、 GENIUS MARINE S.A. (100%) 、 GENIUS PRINCE S.A. (100%) 、 GENIUS STAR CARRIERS S.A. (100%) 、 GENIUS STAR NAVIGATION S.A. (100%) 、 GSX MARITIME S.A. (100%) 、 GUMA MARINE S.A. (100%) 、 GUMA NAVIGATION S.A. (100%) 、 GS NAVIGATION S.A. (100%) 、 GS GLOBAL S.A. (100%) 、 HARMONY PESCADORES S.A. (100%) 、 HARMONY SUCCESS S.A. (100%) 、 HARMONY TRANSPORT S.A. (100%) 、 HOANYA WISDOM S.A. (100%) 、 INFINITE WISDOM S.A. (100%) 、 KATAGALAN WISDOM S.A. (100%) 、 KATAGALAN MARINE S.A. (100%) 、 KATAGALAN LINE S.A. (100%) 、 KATAGALAN NAVIGATION S.A. (100%) 、 KATAGALAN STAR S.A. (100%) 、 KATAGALAN CARRIERS S.A. (100%) 、 KAVALAN WISDOM S.A. (100%) 、 LOG WISDOM S.A. (100%) 、 LUILANG WISDOM S.A. (100%) 、 LLOA WISDOM S.A. (100%) 、 LIGULAO WISDOM S.A. (100%) 、 MAGNATE MARITIME S.A. (100%) 、 MAKATAO WISDOM S.A. (100%) 、 MERCY MARINE LINE S.A. (100%) 、 MIGHTY MARITIME S.A. (100%) 、 MOUNT WISDOM S.A. (100%) 、 MIMASAKA INVESTMENT S.A. (100%) 、 PAIWAN WISDOM S.A. (100%) 、 PAPORA WISDOM S.A. (100%) 、 PAZEH WISDOM S.A. (100%) 、 PESCADORES INTERNATIONAL LINE S.A. (100%) 、 POAVOSA WISDOM S.A. (100%) 、

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Company Overview

POAVOSA INTERNATIONAL S.A. (100%) 、 POAVOSA MARITIME S.A. (100%) 、 POAVOSA NAVIGATION S.A. (100%) 、 RUKAI MARITIME S.A. (100%) 、 SAKIZAYA DIAMOND S.A. (100%) 、 SAKIZAYA FORTUNE S.A. (100%) 、 SAKIZAYA GLORY S.A. (100%) 、 SAKIZAYA HERO S.A. (100%) 、 SAKIZAYA INTEGRITY S.A. (100%) 、 SAKIZAYA JUSTICE S.A. (100%) 、 SAKIZAYA KALON S.A. (100%) 、 SAKIZAYA LEADER S.A. (100%) 、 SAKIZAYA LINE S.A. (100%) 、 SAKIZAYA MARINE S.A. (100%) 、 SAKIZAYA MIRACLE S.A. (100%) 、 SAKIZAYA NAVIGATION S.A. (100%) 、 SAKIZAYA ORCHID S.A. (100%) 、 SAKIZAYA POWER S.A. (100%) 、 SAKIZAYA QUEEN S.A. (100%) 、 SAKIZAYA RESPECT S.A. (100%) 、 SAKIZAYA UNICORN S.A. (100%) 、 SAKIZAYA VICTORY S.A. (100%) 、 SAKIZAYA WISDOM S.A. (100%) 、 SAYSIAT WISDOM S.A. (100%) 、 SIRAYA WISDOM S.A. (100%) 、 SAO WISDOM S.A. (100%) 、 TAIVOAN WISDOM S.A. (100%) 、 TAO BRAVE S.A. (100%) 、 TAO MARINER S.A. (100%) 、 TAO STAR S.A. (100%) 、 TAO ACE S.A. (100%) 、 TAO TREASURE S.A. (100%) 、 TAOKAS WISDOM S.A. (100%) 、 TAROKO MARITIME S.A. (100%) 、 TAROKO WISDOM S.A. (100%) 、 TROBIAN WISDOM S.A. (100%) 、 TAOKAS NAVIGATION S.A. (100%) 、 TAOKAS MARINE S.A. (100%) 、 TRIUMPH WISDOM S.A. (100%) 、 UNICORN BRAVO S.A. (100%) 、 UNICORN FORTUNE S.A. (100%) 、 UNICORN LOGGER S.A. (100%) 、 UNICORN LOGISTICS S.A. (100%) 、 UNICORN MARINE S.A. (100%) 、 UNICORN PESCADORES S.A. (100%) 、 UNICORN SUCCESSOR S.A. (100%) 、 VAYI WISDOM S.A. (100%) 、 WINSOME WISDOM S.A. (100%) 、 WISDOM ACE S.A. (100%) 。 Note 2: The organization and subsidiaries are as of March 26, 2021.

2.2.2 Group history

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Year Important events
1. Established Wisdom Marine Lines S.A. with a registered capital of US$10,000 in March.
1999
2. Purchased M/V "Global Wisdom" to sail the Asia routes and carry steel and timber.
1. Completed newbuildings "Fraternity Wisdom" and "Mount Wisdom" (later renamed "Genius
Mariner").
2000 2. Purchased "Tien Wei", "Unicorn No.1", "Ever Elite" (later renamed "Genius Trader"), "Kitty" and
"Blue Seaway".
3. The number of vessels owned reached a total of 8.
1. Wisdom Marine Lines S.A. sold "Global Wisdom" in March, and leased 3 container ships
"Unicorn Joy", "Unicorn Express", and "Unicorn Mariner", from Fortis Bank Nederland in
October. Completed newbuildings "Mega Wisdom" and "Winsome Wisdom". Purchased "Jaw
2001 Wei". Sold "Tien Wei".
2. The number of vessels reached a total of 12.
3. Established Well Shipmanagement and Maritime Consultant Co., Ltd. with a registered capital of
NT$3,000,000 in the Republic of China.
1. Purchased "Benefit Wisdom" and "Asia 21st Century". Leased "Asia Crusader". Sold "Blue
2002 Seaway" and "Jaw Wei".
2. The number of vessels operated (including owned, leased, and managed) reached a total of 13.
1. Completed newbuildings "Infinite Wisdom" and "Mercy Wisdom". Purchased "Tanjung Priok"
and "New Luckly VI". Leased "Unicorn Brave". Sold "Kitty".
2003 2. The number of vessels operated (including owned, leased, and managed) reached a total of 17.
3. Well Shipmanagement and Maritime Consultant Co., Ltd. received the Panama DOC (Document
of Compliance) from Bureau Veritas.
1. Leased "Genius Star I". Completed newbuildings "Genius Star" and "Magnate".
2004 2. Sold "Unicorn Joy", "Unicorn Mariner", "Genius Trader", and "Asia Crusader".
3. The number of vessels operated (including owned, leased, and managed) reached a total of 16.
1. Wisdom Marine Lines S.A. leased "Genius Star II", and invested a 40% stake in Harmony Success
S.A. and acquired management of "Golden Kiku".
2005
2. Completed newbuilding "Beagle I". Purchased "Pacific Venus". Sold "Unicorn Express".
3. The number of vessels operated (including owned, leased, and managed) reached a total of 19.
1. Wisdom Marine Lines S.A. capitalized profits and reported a registered capital of US$16,260,000
in June.
2. Wisdom Marine Lines S.A. capitalized profits and reported a registered capital of US$30,000,000
2006 at the end of August.
3. Completed newbuilding "Genius Star III". Purchased "Beagle VI", "Mol Grace" and "Unicorn
Ace".
4. The number of vessels operated (including owned, leased, and managed) reached a total of 23.
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Company Overview

Year	Important events
2007	1. Completed newbuildings "Beagle VII", "Beagle II", "Genius Stra VII", "Siraya Wisdom", "Genius Star VIII", "Unicorn Bravo", "Arikun", and "Bingo". Purchased "Izumo" and "Dumai Express". Sold "Mega Wisdom", "Tanjung Priok", "New Lucky VI", "Benefit Wisdom". 2. "Unicorn Ace" sank in Philippine waters on March 20. Started managing "Indian Challenger". 3. The number of vessels operated(includingowned, leased, and managed)reached a total of 29.
2008	1. Wisdom Marine Lines S.A. capitalized profits and reported a registered capital of US$60,000,000. 2. Invested a 50% stake in Rich Containership S.A. and acquired management of "Ital Massima". 3. Completed newbuilding "Taokas Wisdom", "Hoanya Wisdom", and "Unicorn Logger". Sold "Winsome Wisdom" and purchased "Iris". 4. The number of vessels operated (including owned, leased, and managed) reached a total of 33. 5. Established the holding company Wisdom Marine Lines Co., Ltd. in Cayman Islands on October 21. 6. Established Wisdom Marine International Inc. with a registered capital of NT$10,000,000 in the Republic of China in December.
2009	1. Wisdom Marine Lines Co., Ltd. on June 15 with a registered capital of NT$2,200,000,000. 2. Well Shipmanagement and Maritime Consultant Co., Ltd. received the H.K. DOC (Document of Compliance) from Bureau Veritas. 3. Acquired management of "Ital Melodia" and leased "Mermaid Star" on a time charter to be returned at the end of same year. 4. Completed newbuilding "Pazeh Wisdom" and purchased "Bizen" in February. Completed newbuildings "Beagle III" and "Papora Wisdom", and purchased "Rukai" in March. Purchased "Luilang Wisdom" and "Itami" in May. Completed newbuildings "Babuza Wisdom" and "Poavosa Wisdom" and purchased "Taroko" in June. Purchased "Meta" and leased "African Challenger" and "Strait Challenger" on a time charter in July. Completed newbuilding "Genius Star IX" and sold "Rukai" in August. Purchased "Mino" and "Jasmine Ace" in October. Purchased "Tao Triumph" and sold the 50% stake in Rich Containership S.A. in November, and leasebacked "Meta" and "Luilang". Purchased "Coral Hero" in December. 5. The number of vessels operated(includingowned, leased, and managed)reached a total of 51.
2010	1. Wisdom Marine became listed under the stock code 2637 on TWSE on December 1. 2. Purchased "Mimasaka" in January. Purchased "Global Faith" and sold and leasebacked "MOL Grace" and "Taroko" in February. Merged the wholly owned subsidiaries Pescadores Navigation S.A. and Taroko Wisdom S.A. in March, with Pescadores Navigation S.A. being the merged company and Taroko Wisdom S.A. the surviving company. Completed newbuilding "Paiwan Wisdom" in April. Purchased "Unicorn Dolphin" in May. Completed newbuilding "Daiwan Wisdom" in June. Completed newbuilding "Genius Star X" in July. Completed newbuilding "Amis Wisdom I", purchased "Unicorn Emerald", and leased "Tao Star" in August. Completed newbuilding "Amis Wisdom II" and sold and leasebacked "Unicorn Emerald" in September. Completed newbuildings "Tao Mariner", "Naluhu", and "Frontier Bonanza" in October. Completed newbuildings "Ligulao" and "Guma" in November. Completed newbuilding "Dumun" in December. 3. Started managing "Alaw" on behalf of third party. 4. The number of vessels operated (including owned, leased, and managed) reached a total of 67.

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Company Overview

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Year Important events
1. Wisdom Marine Lines Co., Ltd. capitalized capital surplus and reported a paid-in capital of
NT$3,355,000,000 on August 31.
2. Wisdom Marine Lines Co., Ltd. launched a cash capital increase and reported a paid-in capital of
NT$3,580,000,00 on November 1.
3. Completed newbuildings "AMIS WISDOM III" and "Tao Brave", and sold "Iris" in January.
Leased "Del Sol" on a bareboat charter, and sold "Unicorn No.1" in March. Completed
2011
newbuilding "Poavosa Wisdom III" in April. Sold and leasebacked "Fraternity Wisdom" in June,
and sold "Unicorn Brave" and leased "Ocean Victory" on a bareboat charter in July. Completed
newbuilding "Amis Wisdom VI" and "Sakizaya Wisdom" in September. Completed newbuildings
"Poavosa Wisdom VI" and "LBC Energy" in October. Purchased "Taikli" and "Hibiscus" in
November.
4. The number of vessels operated (including owned, leased, and managed) reached a total of 75.
1. Made the first issue of international unsecured convertible corporate bond for a total of
NT$600,000,000 on March 29.
2. Wisdom Marine Lines Co., Ltd. capitalized capital surplus and reported a paid-in capital of
NT$3,938,000,000 on August 31.
3. Completed new building "Katagalan Wisdom" in January. Completed new building "Atayal Star"
in February. Sold "Strait Challenger" in March. Completed new building "Atayal Mariner", sold
2012 "Genius Star", and sold and leasebacked "Mercy Wisdom" in April. Completed new building
"Katagalan Wisdom III" in May. Purchased "Blue Horizon", and completed newbuilding "Atayal
Brave" in June. Purchased "Clear Horizon" in July. Completed newbuilding "Genius Star XI" in
September. Completed newbuilding "Bunun Wisdom" in October. Completed newbuilding
"Poavosa Wisdom VII", and terminated third party management contract for "Indian Fortune" in
November. Purchased "Bering ID", and leased "ID North Sea" on a bareboat charter in December.
4. The number of vessels operated (including owned, leased, and managed) reached a total of 84.
1. Wisdom Marine Lines Co., Ltd. capitalized capital surplus and reported a paid-in capital of
NT$4,149,624,640 on September 11.
2. Launched a capital increase by cash to participate in an issue of global depositary receipts for a
total of US$39,312,000.
3. Made the first overseas issue of unsecured convertible corporate bond for a total of
US$60,000,000 on November 12.
4. Sold "Infinite Wisdom", and completed newbuildings "Poavosa Wisdom VIII" and "Atayal Ace"
2013 in January. Sold and leasebacked "Genius Mariner" in February. Completed newbuilding "Genius
Star XII" in March. Completed newbuilding "Sakizaya Ace" in April. Completed newbuilding
"Tao Ace", and leased "Caribbean ID" on a bareboat charter in May. Completed newbuilding
"Sakizaya Brave" in June, sold "Meta" in July, and completed newbuilding "Amis Ace" and "Tao
Treasure" in August. Sold "Luilang Wisdom", and completed newbuilding "Poavosa Ace" in
September. Lost contact with "Bingo" in Indian waters during a cyclone in October. Completed
newbuildings "Copenship Wisdom" and "Bunun Ace" in November.
5. The number of vessels operated (including owned, leased, and managed) reached a total of 92.
1. Sold "Dumai Express" and "Tao Triumph" in January. Sold "Fraternity Wisdom", and "Beagle III"
collided with South Korean carrier Pegasus Prime outside Tokyo Bay and sank in March.
Completed newbuildings "Sakizaya Champion", "Daiwan Ace", "Daiwan Brave", and "Scarlet
Falcon", and sold "Taroko" in April. Sold "Asia 21st Century" in June. Completed newbuilding
2014 "Bunun Brave" in July. Sold "Bering ID", and completed newbuilding "Amis Champion".
Completed newbuildings "Bunun Champion" and "Scarlet Eagle". Completed newbuilding
"Bunun Dynasty" in October. Completed newbuilding "Bunun Elegance" in November. Sold
"Genius Mariner" in December.
2. The number of vessels operated (including owned, leased, and managed) reached a total of 94.
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Company Overview

Year	Important events
2015	1. Completed newbuildings "Bunun Fortune", "Amis Dolphin", "Amis Elegance", and "Daiwan Elegance", and completed and sold newbuilding "Imabari 1680" in January. Completed newbuilding "Daiwan Champion" in February. Completed newbuilding "Daiwan Dolphin" in March. Completed newbuildings "Scarlet Rosella", "Bunun Glory", "Daiwan Fortune", and "Sakizaya Diamond" in April. Completed newbuildings "Daiwan Glory" and "Amis Fortune" in June. Sold "Unicorn Emerald", and completed newbuilding "Bunun Hero", and added "Pescadores" in July. Completed and sold newbuilding "Imabari 1681" in August. Completed and sold newbuilding "Tsuneishi 164" in September. Completed newbuilding "Sakizaya Elegance", and terminated third party management agreement for "Alaw" in October. Sold "Coral Hero" in December. 2. Made the second overseas issue of unsecured convertible corporate bond for a total of US$60,000,000 on April 10, and exercise the upsize option for US$20,000,000 in May. 3. The number of vessels operated(includingowned, leased, and managed)reached a total of 106.
2016	1. Completed newbuilding "Sakizaya Future" in January. Completed newbuildings "Daiwan Justice", "Daiwan Kalon", "Sakizaya Glory", and "Amis Glory" in March. Sold "Itami" in May. Sold "Mercy Wisdom" in June. Purchased "Ocean Victory" in July. Completed newbuildings "Daiwan Hero", "Sakizaya Hero", and "Daiwan Infinity in August. Completed newbuilding "Bunun Infinity", sold and leased "Jasmine Ace" on a bareboat charter, and sold and leased "Wisdom Grace" on a bareboat charter in September. Completed newbuilding "Sakizaya Integrity" in October. 2. Wisdom Marine Lines Co., Ltd. launched a cash capital increase to raise a total of NT$400,000,000 and reported a paid-in capital of NT$5,549,706,300 on November 2. 3. Wisdom Marine International Inc. purchased a stake in Pescadores Investment and Development Inc. in April. 4. The number of vessels operated(includingowned, leased, and managed)reached a total of 114.
2017	1. Sold "Poavosa Champion" in February. Completed newbuilding "Sakizaya Justice" in March. Completed newbuildings "Sakizaya Miracle" and "Bunun Justice" in April. Completed newbuilding "Amis Hero", sold "Unicorn Dolphin", and sold a 40% stake in "Golden Kiku" and turned it into a ship under management in May. Completed newbuilding "Sakizaya Kalon" in June. Completed newbuildings "Sakizaya Leader" and "Amis Integrity", and leased "Amis Orchid" on a bareboat charter in July. Completed newbuilding "Sakizaya Power" in September. Completed newbuildings "Sakizaya Noble", "Sakizaya Orchid", and "Amis Justice" in October. 2. Made the second issue of domestic secured convertible corporate bond for a total of NT$400,000,000 on September 30. 3. Made the third issue of domestic unsecured convertible corporate bond for a total of NT$800,000,000 on October 2. 4. Wisdom Marine Lines Co., Ltd. launched a cash capital increase to raise a total of NT$320,000,000 and reported a paid-in capital of NT$6,167,075,660 on November 8. 5. The number of vessels operated(includingowned, leased, and managed)reached a total of 124.
2018	1. Completed newbuildings "Amis Miracle", "Bunun Kalon", and "Sakizaya Queen", and added "Mega Benefit" to ships under management in January. 2. Completed newbuilding "Sakizaya Respect", and terminated the commercial lease on "Jasmine Ace" in April. 3. Completed newbuilding "Joseph Wisdom" in June. 4. Completed newbuilding "Amis Nature" in August. 5. Completed newbuilding "Amis Power", added "Saysiat Benefit" to ships under management on behalf of third party, and sold "Genius Star ll" in September. 6. Terminated third party management of "Del Sol", and completed newbuilding "Daiwan Leader" in November. 7. Terminated third party management of "Golden Kiku" in December. 8. The number of vessels operated (including owned, leased, and managed) reached a total of 130.

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Company Overview

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Year Important events
1. Add "Mega Benefit" to ships under bareboat charter in January.
2. Terminated the bareboat charter of “Genius Star I” in March.
3. Completed newbuildings “Daiwan Miracle”, leased “Amis Queen” on a time charter, and add
“Rukai Benefit” to ships under management on behalf of third party in April.
4. Made the first issue of domestic secured corporate bond for a total of NT$1,385,000,000 on May
7.
5. Sold “Beagle Ⅵ” in May.
2019 6. Completed newbuilding "Bunun Leader " in July.
7. Add “Bunun Benefit” to ships under management on behalf of third party in August.
8. Sold “Pacific Venus” and “Mino” in October
9. Wisdom Marine Lines Co., Ltd. launched a cash capital increase to raise a total of
NT$400,000,000 and reported a paid-in capital of NT$6,886,559,030 on October 3.
10. Sold “Daiwan Ace” and “Daiwan Brave” in November.
11. Add “Amis Star” to ships under bareboat charter in December.
12. The number of vessels operated (including owned, leased, and managed) reached a total of 129.
1. Completed newbuilding "Amis Treasure " in January.
2. Completed newbuilding "Sakizaya Star " , ＂ Amis Unicorn ＂ in March.
3. Completed newbuilding "Amis Respect " in April.
4. Completed newbuilding "Bunun Miracle " , ＂ Sakizaya Treasure ＂ in June.
5. Wisdom Marine Lines Co., Ltd. launched a cash capital increase to raise a total of
2020
NT$400,000,000 and reported a paid-in capital of NT$7,291,558,940 on June 8.
6. Completed newbuilding "Bunun Noble " in September.
7. Completed newbuilding "Amis Victory " , and terminated the third party management of "Ital
Massima " in November.
8. The number of vessels operated (including owned, leased, and managed) reached a total of 136.
1. Terminated the third party management of "Ital Melodia " in February.
2021 2. Completed newbuilding "Bunun Orchid " , ＂ Amis Wealth ＂ , ＂ Sakizaya Unicorn ＂ in March.
3. The number of vessels operated (including owned, leased, and managed) reached a total of 137.
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2.2.3 Risks

Please refer to Section 7.6 Risk Assessment of the Annual Report for information on the risks and response measures.

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Company Overview

3. Corporate Governance Report

3.1 Organization

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Company Department Responsibilities
Formulation of financial policies for the Group
Internal control and business performance audits for the Group
Approval of important transactions and investments for the Group
Board of
Providing endorsements and guarantees for subsidiaries applying for
Directors
loans
Approval of key person appointments for the Group
Funding in Taiwan and compliance related matters
Wisdom Marine Lines Chairing meetings of the Board of Directors
Chairman
Co., Ltd. Overseeing operations of the Group
Approval of important operational and business plans
President
Cross-department management and coordination
Spokesperson Important company announcements and media and investor relations
Supervision of audits of internal control system and business
Auditing Office
operations and recommendations for modification
Singapore Branch Operation of the Group business
Company Department Responsibilities
Allocation of funds for the Group
Board of Acquisition and disposal of key assets (ships)
Wisdom Marine Lines Directors Signing long term lease agreements
S.A. Providing endorsements and guarantees for subsidiaries applying for
Supervision of audits of internal control system and business
Auditing Office
operations and recommendations for modification
Company Department Responsibilities
Document storage and administration for the Group
Shareholder affair administration and business registration for the
Administration Group
Department Management of human resources in Taiwan for the Group
IT software/hardware management
General affair administration
Wisdom Marine Seaman Affairs Seaman hiring, evaluation, and recruitment for ships under
International Inc.
Performing accounting, financial, tax, budgeting, and account
Finance
processing activities and providing accurate and up-to-date financial
Department
information for the Group.
Business and Brokerage of ship leasing, operation, and sale for other companies
Operation Routine operations and insurance claim administration for ships
Department under management
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Corporate Governance Report 15

Company	Department Responsibilities	Department Responsibilities
Well Shipmanagement and Maritime Consultant Co., Ltd.	ISM Department Safety management training and supervision for ships under
	Technical Arrangements of ship maintenance and inspection for ships under
	Supply	Procurement and supply of supplies, parts, and lubricants for ships

Company	Department Responsibilities	Department Responsibilities
Wisdom Lines Europe B.V.	-	Brokerage of ship and customer communication

3.2 Profiles of Directors, Supervisors, President, Vice Presidents, Assistant Vice Presidents, and Managers of Various Departments and Branch Offices

3.2.1 Director

3.2.1.1 Basic information

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Unit: 000 shares, %； As of March 26, 2021
Shareholding Current
when elected shareholding
Other current
Education and work positions within the
Name
experience Company and in other
companies
Chairman, Penghu
First Credit
BA in Business Cooperative
Administration, Chairman, Wisdom
Lan, Tamkang University Marine Lines
Chun- 197,793 32.07 202,478 27.13 3,416 0.46 - - President, Shih Wei Chairman, Wisdom - - -
Sheng Navigation Marine Agency Co.,
President, First Ltd. Chairman,
Steamship Group Brave Line
Chairman, DNV
GL(Taiwan)
BA in Business
Administration,
Chapman University
Fukui 1,471 0.24 1,667 0.22 - - - - (USA) Yoko Co., Ltd. - - -
Masayuki Tokyo Freighting, Ltd Founder and President
shipbroker
Yoko Senpaku Co.
Partner
arrangement
and minor children
other department heads
Shareholding by nominee
Title Gender Term Current shareholdings by spouse as Directors, Supervisors, or second degree of kinship acting Spouse or relatives within the
Nationality Date elected
First date elected
Title Name
Relationship
Number of shares Shareholding (%) Number of shares Shareholding (%) Number of shares Shareholding (%) Number of shares Shareholding (%)
Taiwan Male 3 years
Chairman 2008.12.25 2018.05.25
3
Director Japan Male years
2008.12.25 2018.05.25
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Corporate Governance Report

Title	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term					Current shareholdings by spouse and minor children	Current shareholdings by spouse and minor children	Shareholding by nominee arrangement	Shareholding by nominee arrangement			Spouse or relatives within the second degree of kinship acting as Directors, Supervisors, or other department heads	Spouse or relatives within the second degree of kinship acting as Directors, Supervisors, or other department heads	Spouse or relatives within the second degree of kinship acting as Directors, Supervisors, or other department heads
							Shareholding		Current
							when ele	cted	shareholding

																Other current
															Education and work	positions within the
															experience	Company and in other
																companies
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			Title	Name Relationship
Director	Chao, Mike Tzu-Lung Taiwan Male 2008.12.25 2018.05.25 3 years						604	0.10	618	0.08	741	0.10	- -		BA in Economics & BS in Biology, University of Maryland (USA) William Tan & Associates, CPA	COO, Wisdom Marine Lines	- - -
Director	Jinzhou Investment Taiwan Male 2012.06.29 2018.05.25 3 years Represented by Chen, Ming-Shang						1,473 0.24		1,508 0.20		-	-	- -		BA in Eastern Linguistics, Chinese Culture University Sales Manager, Jardine Matheson	President, Prime Maritime Agency	- - -
							558 0.09		711 0.10		-	-	- -				- - -
Independent Director	Chen, Po- Chih Taiwan Male 2015.05.29 2018.05.25 3 years						- -		- -		-	-	- -		PhD in Economics, National Taiwan University National Policy Advisor to the President Economic Advisor to the President Chairman, Council for Economic Planning and Development, Executive Yuan Director, Central Bank Chairman of Department of Economics, National Taiwan University and President of Chung-Hua Institution Economic Research	Honorary Chairman, Taiwan Think Tank	- - -
Independent Director	Tu , Neng- Mo	Taiwan	Male	2012.06.29	2018.05.25	3years	-	-	-	-	-	-	-	-	J.S.D./LL.M., University of California, Berkeley, School of Law LL. B. National Taiwan University Co-Founder and Managing Partner, Elements Attorneys Advisor, Taipei City Government International Affairs Advisory Committee Corporate Counsel, Media Tek Inc. Corporate Counsel Asia Pacific, Foxconn Group Attorney, Investment Department, Lee & Li Attorneys-at-Law	International Partner, King&Wood Mallesons Director, Trip Notice Travel Inc. Director, Gao Zhi Inc. Independent Director, Alexander Marine International	-	-	-

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Corporate Governance Report

Title	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term					Current shareholdings by spouse and minor children	Current shareholdings by spouse and minor children	Shareholding by nominee arrangement	Shareholding by nominee arrangement			Spouse or relatives within the second degree of kinship acting as Directors, Supervisors, or other department heads	Spouse or relatives within the second degree of kinship acting as Directors, Supervisors, or other department heads	Spouse or relatives within the second degree of kinship acting as Directors, Supervisors, or other department heads
							Shareholding		Current
							when ele	cted	shareholding

																Other current
															Education and work	positions within the
															experience	Company and in other
																companies
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			Title	Name Relationship
Independent Director	Lin, Tse- Chun Taiwan Male 2018.05.25 2018.05.25 3 years						-	-	-	-	-	-	- -		Ph.D in Finance, Finance Group, University of Amsterdam M.Phil in Economics,Tinbergen Institute MBA in International Business, National Chengchi University BA in Economics, National Taiwan University Associate Professor of Finance, Faculty of Business and Economics, University of Hong Kong	Director of Finance, Faculty of Business and Economics, University of Hong Kong Professor of Finance, Faculty of Business and Economics, University of Hong Kong	- - -
Independent Director	Chiu, Yung- Ho	Taiwan	Male	2018.05.25	2018.05.25	3years	-	-	-	-	-	-	-	-	Ph.D in Economics, University of Mississippi (USA) Master in Economics, Soochow University BA in Economics, FengChia University Vice Chairperson & Spokesman, Fair Trade Commission, ROC Dean of Office of Academic Affairs, Soochow University Director, First Commercial Bank Member of Remuneration Committee, Teco Electric and Machinery Independent Director, Chenfull International	Professor, Department of Economics, Soochow University Chairman, Multi- Level Marketing Protection Foundation	-	-	-

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Corporate Governance Report

Title	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term	Name Nationality Gender First date elected Date elected Term					Current shareholdings by spouse and minor children	Current shareholdings by spouse and minor children	Shareholding by nominee arrangement	Shareholding by nominee arrangement			Spouse or relatives within the second degree of kinship acting as Directors, Supervisors, or other department heads	Spouse or relatives within the second degree of kinship acting as Directors, Supervisors, or other department heads
							Shareholding		Current
							when ele	cted	shareholding

																Other current
															Education and work	positions within the
															experience	Company and in other
																companies
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			Title	Name Relationship
Independent Director	Liu, Tsai- Ching	Taiwan	Female	2018.05.25	2018.05.25	3years	-	-	-	-	-	-	-	-	Ph.D in Economics, University of North Carolina at Chapel Hill BA in Economics, National Chung Hsing University Director, Taiwan Insurance Guaranty Fund Director, Global Link Securities Chairman and President, Department of Public Finance, National Taipei University Director, Public Finance and Finance Research Center Convener and Members of the Board of Examiners, special examination, Ministry of Examination Associate Professor, Department of Accounting, National Chung Hsing University Associate Professor, Department of ECONOMICS, Tamkang University	Professor, National Taipei University Director, Taiwan Stock Exchange Vice Chairman, Committee on Taxation and Financial Policy, Chinese National Federation of Industries

3.2.1.2 Supervisors: The Company does not appoint supervisors as the Independent Directors form the Audit Committee as required by the Articles of Incorporation.

3.2.1.3 Large shareholders of institutional shareholder

Name of institutional shareholder Large shareholders of institutional shareholder	Name of institutional shareholder Large shareholders of institutional shareholder
Jinzhou Investment Co., Ltd.	Lan, Mei-Chou (90%), Lan, Wei-Chih (10%)

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Corporate Governance Report

3.2.1.4 Professional knowledge and independence of Directors

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Has at least 5 years of work experience Meets the independence criteria
and professional qualifications below (Note 1)
Criteria
Name
1 2 3 4 5 6 7 8 9 10 11 12
Lan, Chun-
        -
Sheng
Fukui
          -
Masayuki
Chao, Mike
            -
Tzu-Lung
Jinzhou
Investment
Co., Ltd.
           -
Represented
by Chen,
Ming-Shang
Chen, Po-
              -
Chih
Tu, Neng-Mo                2
Lin, Tse-
              -
Chun
Chiu, Yung-
              -
Ho
Liu, Tsai-
              -
Ching
the Company's operations public companies
the business of the Company
junior college, college or university
accounting, or any subject relevant to the
Company's operations in a public or private
Lecturer (or above) of commerce, law, finance, or holder of professional qualification relevant to Certified judge, prosecutor, lawyer, accountant, finance, or accounting, or otherwise necessary for Work experience in the area of commerce, law, Number of positions as an Independent Director in other
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Note 1: The symbol "  " marks where the Directors meet the criteria:

Not an employee of the Company or any of its affiliates.
Not a Director or Supervisor of the Company of any of its affiliates (excluding Independent Directors set up by the Company, its parent company or subsidiaries in compliance of the local regulations).
Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders.
Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the above persons in the preceding three subparagraphs.
Not a Director, Supervisor, or employee of a corporate/institutional shareholder that directly holds five percent or more of the total number of issued shares of the Company or ranks as one of its top five shareholders.
If a majority of the company's director seats or voting shares and those of any other company are controlled by the same person: a director,

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Corporate Governance Report

supervisor, or employee of that other company.

If the chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses: a director (or governor), supervisor, or employee of that other company or institution.
Not a Director, Supervisor, managerial officer, or a shareholder that holds more than five percent of shares at a company or institution that has financial or business exchanges with the Company.
Not a professional individual or owner, partner, director (member of the governing board), supervisor (member of the supervising board), or managerial officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting, or consultation services to the Company or any of its affiliates, or spouse thereof. However, this restriction does not apply to a member of the remuneration committee who exercises power in accordance with Article 7 of Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter.
Not having a marital relationship, or a relative within the second degree of kinship to any other Director of the Company.
Not been a person of any conditions defined in Article 30 of the Company Act.
Not elected as a government or corporate representative, as described in Article 27 of the Company Act.

3.2.2 Key Management Personnel

3.2.2.1 Basic Information

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Unit: 000 shares, % ； As of March 26, 2021
Management
personnel who is
a spouse or a
relative within
second degree
Education and work
Title Name
experience
National Keelung Maritime
Vocational High School
Captain
Cheng,
President Manager, Honor Faith - - - -
Chun-Sheng
Industrial Limited
Vice President, Wisdom
Marine Lines
BA in Economics & BS in
Biology, University of
Chao, Mike
COO Maryland (USA) - - - -
Tzu-Lung
William Tan & Associates,
CPA
BA in Economics, National
Taiwan University
CFO Bruce Hsueh - - - -
Masters, University of
California, Berkeley
children nominee
Shareholding arrangement
spouse and minor Shareholdings by Shareholding by
Gender
Nationality
Date of appointment(Note 1) Title
Name
Relationship
Current job position in other companies
Number of shares Number of shares Number of shares
Shareholding percentage (%) Shareholding percentage (%) Shareholding percentage (%)
- -
Male 0.04 0.02
Taiwan 271,638 126,721
1999.12.01
- -
Male 0.08 0.10
Taiwan 617,974 741,396
2005.08.01
- -
Taiwan Male 346,357 0.05 84,671 0.01
2007.04.02
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Management
personnel who is
a spouse or a
relative within
second degree
Education and work
Title Name
experience
National Keelung Maritime
Tsaur,
CTO Vocational High School - - - -
Shuang-Chau
TMT
Assistant Yuan Ze University:Master in
Vice Business Management
President, Scott Chang National Chung Hsing - - - -
ISM University: Bachelor in
Department Applied Mathematics
National Taiwan University:
Master in Mechanical
Assistant Engineering
Vice National Yunlin University of
President, Max Chen Science and Technology: - - - -
Technical Bachelor in Mechanical
Department Engineering
4M Technologies SA Taiwan
Branch
Assistant Kaohsiung Marine Institute of
Vice Technology: Marine
President, Joe Hsu Engineering - - - -
Supply Taipei Port Container
Department Terminal Corp
Assistant
Department of Economics,
Vice
Soochow University
President, Lina Hung - - - -
Accountant, National
Finance
Shipping Agency Corp
Department
Information Management
Department, Tamkang
Internal TT Ting
University - - - -
Auditor (Note 3)
PricewaterhouseCoopers
Taiwan
children nominee
Shareholding arrangement
spouse and minor Shareholdings by Shareholding by
Gender
Nationality
Date of appointment(Note 1) Title
Name
Relationship
Current job position in other companies
Number of shares Number of shares Number of shares
Shareholding percentage (%) Shareholding percentage (%) Shareholding percentage (%)
- - - - - -
Male
Taiwan
2013.08.01
- - - -
Taiwan Male 64,509 0.01
2009.07.01
- - - -
Taiwan Male 42,348 0.01
2009.04.06
- - - -
Taiwan Male 30,708 0.00
2009.05.25
- - - -
0.04
Taiwan Female 307,717
1999.08.01
- - - -
0.00
Taiwan Female 15,354
2017.02.13
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Management
personnel who is
a spouse or a
relative within
second degree
Education and work
Title Name
experience
Department of Accounting,
Internal Mandy Lin Soochow University
Auditor (Note 3) KPMG International
Cooperative,Taiwan
Note 1: The date of appointment is the start date of employment with Wisdom Marine Lines.
Note 2: Where the chairperson of the board of directors and the general manager or person of an equivalent post (the highest level manager) of a company
are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness,
necessity thereof, and the measures adopted in response thereto.
Note3: TT Ting resigned at 2020.03.20. Mandy Lin taked office at 2020.03.20
3.3 Remunerations to Directors, Supervisors, President, and Vice Presidents in
the past year
3.3.1 Remuneration to Directors (including Independent Directors)
Unit: NT$ 000;
Ratio of total
Director's remuneration Ratio of total Pay received as an employee
compensation
compensation
(A+B+C+D+
(A+B+C+D) to
Remuneration (A) pension (B)Retirement remuneration Director's expenses (D)Business net profit after tax (%) bonuses and allowances Salary, pension (F)Retirement Employee's remuneration(G) (Note 6) after tax (%)E+F+G) to net profit
(Note 2) (C) (Note 3) (Note 4) (Note 8)
(E) (Note 5) (Note 8)
All
The companies in
the financial
Company statements
(Note 7)
Cash Share Cash Share
value value value value
500 500 0 0 111 111 62 62 0.60 0.60 4,763 4,763 0 0 0 0 0 0 4.88 4.88
500 500 0 0 0 0 65 65 0.51 0.51 0 0 0 0 0 0 0 0 0.51 0.51
children nominee
Shareholding arrangement
spouse and minor Shareholdings by Shareholding by
Gender
Nationality
Date of appointment(Note 1) Title
Name
Relationship
Current job position in other companies
Number of shares Number of shares Number of shares
Shareholding percentage (%) Shareholding percentage (%) Shareholding percentage (%)
- - - -
Taiwan Female 6,307 0.00
2017.03.06
Title Name
other than subsidiaries(Note 1) Remuneration from investments
The Company The Company The Company The Company The Company The Company The Company The Company
statements(Note 7) statements(Note 7) statements(Note 7) statements(Note 7) statements(Note 7) statements(Note 7) statements(Note 7) statements (Note 7)
All companies in the financial All companies in the financial All companies in the financial All companies in the financial All companies in the financial All companies in the financial All companies in the financial All companies in the financial
Sheng N/A
Chairman Lan, Chun-
Fukui N/A
Director Masayuki
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Ratio of total
Director's remuneration Ratio of total Pay received as an employee
compensation
compensation
(A+B+C+D+
(A+B+C+D) to
Remuneration (A) pension (B)Retirement remuneration Director's expenses (D)Business net profit after tax (%) bonuses and allowances Salary, pension (F)Retirement Employee's remuneration(G) (Note 6) after tax (%)E+F+G) to net profit
(Note 2) (C) (Note 3) (Note 4) (Note 8)
(E) (Note 5) (Note 8)
All
The companies in
the financial
Company statements
(Note 7)
Cash Share Cash Share
value value value value
500 500 0 0 0 0 67 67 0.51 0.51 0 3,330 0 0 0 0 0 0 0.51 3.50
500 500 0 0 0 0 55 55 0.50 0.50 0 0 0 0 0 0 0 0 0.50 0.50
500 500 0 0 0 0 66 66 0.51 0.51 0 0 0 0 0 0 0 0 0.51 0.51
500 500 0 0 0 0 82 82 0.52 0.52 0 0 0 0 0 0 0 0 0.52 0.52
500 500 0 0 0 0 74 74 0.52 0.52 0 0 0 0 0 0 0 0 0.52 0.52
500 500 0 0 0 0 82 82 0.52 0.52 0 0 0 0 0 0 0 0 0.52 0.52
500 500 0 0 0 0 82 82 0.52 0.52 0 0 0 0 0 0 0 0 0.52 0.52
Title Name
other than subsidiaries(Note 1) Remuneration from investments
The Company The Company The Company The Company The Company The Company The Company The Company
statements(Note 7) statements(Note 7) statements(Note 7) statements(Note 7) statements(Note 7) statements(Note 7) statements(Note 7) statements (Note 7)
All companies in the financial All companies in the financial All companies in the financial All companies in the financial All companies in the financial All companies in the financial All companies in the financial All companies in the financial
N/A
Director
Tzu-Lung Chao, Mike
Co., Ltd. Jinzhou
Investment
N/A
Director
by Chen,
Ming-Shang Represented
N/A
Director
Independent Tu, Neng-Mo
N/A
Director
Independent
Chen, Po-Chih
N/A
Director
Independent Tse-Chun Lin
N/A
Director
Independent
Yung-Ho Chiu
N/A
Director
Independent
Tsai-Ching Liu
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Note 1: Amount of remuneration a director of the Company receives from investments other than subsidiaries of the Company. Note 2: Remuneration to Directors in the most recent year (include Director salary, additional pay, severance pay, bonuses, and incentive payments). Note 3: Amount of Director's remuneration as passed by the Board of Directors in the past year.

Note 4: Business expenses incurred by Directors in the past year (including transportation, special allowance, other allowances, housing, and company car). Where housing, car and other forms of transport, or personal allowances are provided, the nature and cost of assets provided should be disclosed and the rent, gas, and other expenses

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be paid as incurred or at fair market price. Where a driver is also provided, it should be specified in the notes that the Company pays compensation to the driver but does not include the amount in remuneration.

Note 5: All payments to Directors who are also employees of the Company (including the position of President, Vice President, other management personnel and staff), including salary, additional pay, severance pay, bonuses, incentive payments, transportation, special allowance, other allowances, housing, and company car. Where housing, car and other forms of transport, or personal allowances are provided, the nature and cost of assets provided should be disclosed and the rent, gas, and other expenses be paid as incurred or at fair market price. Where a driver is also provided, it should be specified in the notes that the Company pays compensation to the driver but does not include the amount in remuneration. Furthermore, compensation costs recognized under IFRS 2 "share-based payment transactions", including employee stock options, restricted stock awards, and rights to cash issue, should also be included in remuneration.
Note 6: The amount of employee's remuneration as passed by the Board of Directors in the past year should be disclosed for Directors who are also employees of the Company (including the position of President, Vice President, other management personnel and staff) and have received employee remuneration (including stocks and cash).
Note 7: The total pay to Directors from all companies in the consolidated statements (including the Company) should be disclosed.
Note 8: Net profit after tax refers to the net profit after tax in the past year. Where IFRSs has been adopted, net profit after tax refers to the net profit after tax in the individual and separate financial statements.
The remuneration disclosed in the table does not follow the definition of income under the Income Tax Act. Hence, the table is compiled strictly for disclosure and not for tax purposes.

3.3.2 Remuneration of supervisors Not applicable for the Company as it does not appoint

supervisors.

3.3.3 Remuneration of supervisors Not applicable for the Company as it does not appoint supervisors.

Unit: NT$ 000

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Ratio of total
Bonuses and
Salary Retirement Employee's remuneration compensation
allowances
(A) pension (D) (A+B+C+D) to net
(C)
(Note 2) (B) (Note 4) profit after tax (%)
(Note 3)
(Note 8)
All
Title
Name companies in
(Note 1) The the financial
Company
statements
(Note 5)
Cash Share Cash Share
value value value value
Wisdom
Marine Cheng,
International Chun- 0 2,946 0 0 0 1,473 0 0 0 0 0 3.966 NA
Inc. Sheng
President
Wisdom
Marine
Chao, Mike
International 0 2,221 0 0 0 1,109 0 0 0 0 0 2.989 NA
Tzu-Lung
Inc.
COO
Wisdom
Marine Tsaur,
International Shuang- 0 1,762 0 0 0 859 0 0 0 0 0 2.352 NA
Inc. Chau
CTO
Wisdom
Marine
Bruce
International 0 1,832 0 0 0 914 0 0 0 0 0 2.464 NA
Hsueh
Inc.
CFO
The Company The Company The Company The Company other than subsidiaries (Note 9) Remuneration from investments
All companies in the All companies in the All companies in the statements(Note 5)
financial statements(Note 5) financial statements(Note 5) financial statements(Note 5) All companies in the financial
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＊ Regardless of title, all positions equivalent to President or Vice President (e.g. General Manager, CEO, Executive Director) are subject to the disclosure requirements.
Note 1: The names of President and Vice Presidents should be listed individually and the amounts in summary by category. Directors who serve concurrently as President or Vice President should be listed in this table and the table above.

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Note 2: Salary, additional pay, and severance pay received by the President or Vice President in the past year.
Note 3: Bonus, incentive payment, transportation, special allowance, other allowances, housing, company car and other payments received by the President or Vice President in the past year. Where housing, car and other forms of transport, or personal allowances are provided, the nature and cost of assets provided should be disclosed and the rent, gas, and other expenses be paid as incurred or at fair market price. Where a driver is also provided, it should be specified in the notes that the Company pays compensation to the driver but does not include the amount in remuneration. Furthermore, compensation costs recognized under IFRS 2 "share-based payment transactions", including employee stock options, restricted stock awards, and rights to cash issue, should also be included in remuneration.
Note 4: Amount of President's/Vice President's employee remuneration (including stocks and cash) as passed by the Board of Directors in the past year.
Note 5: The total pay to the President and Vice Presidents of the Company from all companies in the consolidated statements (including the Company) should be disclosed.
Note 6: The names of the President and Vice Presidents are disclosed in the appropriate ranges according to the total pay to each of the President and Vice Presidents from the Company.
Note 7: The names of the President and Vice Presidents should be disclosed in the appropriate ranges according to the total pay to each of the President and Vice Presidents from all companies in the consolidated statements (including the Company).
Note 8: Net profit after tax refers to the net profit after tax in the past year. Where IFRSs has been adopted, net profit after tax refers to the net profit after tax in the individual and separate financial statements.
Note 9: Amount of remuneration the President or a vice president of the Company receives from investments other than subsidiaries of the Company.
＊ The remuneration disclosed in the table does not follow the definition of income under the Income Tax Act. Hence, the table is compiled strictly for disclosure and not for tax purposes.

3.3.4 Manager's Name and Distribution of Employee Bonus: N/A.

3.3.5 Comparison and analysis of remunerations to Directors, Supervisors, President and Vice Presidents as a percentage of net profit after tax in the last two years and description of the policy, standards and packages of remunerations, procedure for making such decision and relation to business performance:

Analysis of remunerations to Directors, Supervisors, President and Vice Presidents from the Company and all companies in the consolidated financial statements as a percentage of net profit after tax in the last two years:

Unit: NT$ 000

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2018 2019 2020
as a percentage of as a percentage of as a percentage of
Total amount net profit after tax Total amount net profit after tax Total amount net profit after tax
(%) (%) (%)
Title
Directors
and 14,060 16,929 0.78 0.94 15,856 19,163 0.72 0.87 10,009 13,339 8.98 11.97
Supervisors
President,
Vice 0 11,134 0 0.62 0 12,992 0 0.62 0 13,115 0 11.77
Presidents
The Company The Company The Company The Company The Company The Company
financial statements All companies in the financial statements All companies in the financial statements All companies in the financial statements All companies in the financial statements All companies in the financial statements All companies in the
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Description of the policy, standards and packages of remunerations, procedure for making such decision and relation to business performance and future risks:

According to the Articles of Incorporation and the Director Remuneration Policy of the Company, the annual base remuneration for a director is NT$500,000, which is to be adjusted by the Board of Directors to reflect

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the business performance in the year and subject to a maximum limit of NT$1 million. The remuneration to Directors has been passed by the Board of Directors on January 29, 2021 and March 26, 2021. The Company is to pay the Chairman and Directors NT$500,000 each in base remuneration in the first quarter. After the annual general meeting, a performance bonus of US$3,945 will be paid to the Chairman. Monthly salaries and annual bonuses to President and Vice Presidents are based on the average level of pay offered by competition for the same position, the power and responsibility of the position, and the contribution to the Company's business targets. In addition to the Company's overall business performance and future operating risks and trends in the industry, the personal target completion rate and contribution to the Company' business performance are also taken into consideration in the calculation of reasonable compensation. Performance evaluation and pay reasonableness are reviewed by the Remuneration Committee and the Board of Directors. The remuneration system is reviewed as needed to reflect actual business performance and regulations and to maintain the balance between sustainable development and risk management.

3.4 Corporate Governance Practices

3.4.1 Operations of the Board of Directors

The board of directors met 13 times in last year (2020). The details of the attendance are as follows:

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Attendances Attendances Attendance
Title Name Notes
in person by proxy rate （ % ）
Chairman James Lan 12 1 92.31% None.
Director Masayuki Fukui 13 0 100% None
Director Mike Tzu-Lung Chao 13 0 100% None
Jinzhou Investment
Director 11 1 84.62% None
Representative: Ming-Shang Chen
Independent director Neng-Mo Tu 11 2 84.62% None
Independent director Po-Chih Chen 13 0 100% None
Independent director Tse-Chun Lin 12 1 92.31% None
Independent director Yung-Ho Chiu 13 0 100% None
Independent director Tsai-Ching Liu 13 0 100% None
Other important information:
1. Should any of the following take place in a board meeting, the date and number of the meeting, the content of
proposal, independent director's opinions and the Company's response to such opinions should be recorded:
Matters listed in Article 14-3 of the Securities and Exchange Act
Aside from the above matters, other resolutions adopted by the board of directors to which an independent director
has made objection or reservation on record or in writing
Matters under Objection or
Article 14-3 of reservation
Date Term Agenda and follow-up the Securities from
and Exchange independent
Act director
23th meeting of  Adoption of 2019 Financial Report.
2020.02.21 the 5th board of  Amendment to the Articles of Association V
directors  Amendment to Procedures for Loan to Others
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 Amendment to Procedures for Endorsement and
Guarantee
 Intercompany Loan Facility
 2019 Internal Control Declaration
 Amendment to Internal Control Procedures
 Incorporation of Wisdom Lines Europe B.V.
24th meeting of  Capital Increase of Wisdom Lines Europe B.V.
2020.03.20 the 5th board of  Capital Increase of Wisdom Marine International V
directors Inc. and Subscription for New Shares Issued by
Pescadores Investment and Development Inc.
 Resignation and Appointment of Internal Auditor
 Intercompany Loan Facility
25th meeting of  Adoption of 2020 Q1 Financial Report
2020.04.24 the 5th board of  Intercompany Loan Facility V
directors
26th meeting of  Appointment of Internal Auditor
2020.05.22 the 5th board of  Intercompany Loan Facility V
directors
27th meeting of  Capital Increase of Wisdom Panama
2020.06.19 the 5th board of  Amendment to Internal Control Procedures V
directors
29th meeting of  Adoption of 2020 Q2 Financial Report
2020.07.24 the 5th board of  Intercompany Loan Facility V
directors
 Amendments to the Procedures for Endorsement and
30th meeting of
Guarantee for Wisdom Panama and its subsidiaries
2020.08.28 the 5th board of V
 Amendment to Internal Control Procedures
directors
 Intercompany Loan Facility
31th meeting of  Amendment to Internal Control Procedures
2020.09.25 the 5th board of V
directors
 Adoption of 2020 Q3 Financial Report
32th meeting of
 Change of CPA from EY
2020.10.30 the 5th board of V
 Amendment to Internal Control Procedures
directors
 Purchase and Time Charter: LPG Carrier
33th meeting of  Assessment of Right-of-Use Assets Acquired from
2020.11.27 the 5th board of Related Parties V
directors  Sale: MV Sakizaya Noble
34th meeting of  Intercompany Loan Facility
2020.12.18 the 5th board of V
directors
Independent director's opinion:
(1) 2019 financial statements were approved unanimously by the independent directors in the 23th meeting of the 5h board of
directors.
(2) 2020 Q1 financial statements were approved unanimously by the independent directors in the 25th meeting of the 5th board of
directors.
(3) 2020 Q2 financial statements were approved unanimously by the independent directors in the 29th meeting of the 5th board of
directors.
(4) 2020 Q3 financial statements were approved unanimously by the independent directors in the 32th meeting of the 5th board of
directors.
(5) The independent directors did not have other comments other than the above.
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Corporate Governance Report

Details, including names of directors, proposals, reasons for conflict of interest, and voting results, of circumstances where directors absented themselves due to conflict of interest: None.
Evaluation of targets to enhance the role of the board and performance in the current year and last year:
(1) In addition supplying relevant regulations to the directors, a financial report is delivered at each board meeting to keep the directors informed.
(2) Various continuing education courses are offered to the directors, and directors are encouraged to attend corporate governance courses in order to strengthen the roles of board members. Please refer to Section 3.4.4 of the annual report for training completed by the directors in 2020.
(3) The board of directors appoints a governance officer, who has completed initial training, to improve corporate governance and board performance.
(4) The Company hires an external institution to perform an external board performance evaluation every three years. The latest was when the Company received an external board performance evaluation report from EY Advisory Services on March 22, 2019. The Company also followed the recommendations proposed in this report in order to strengthen board performance.
The attendance records of independent directors by board meeting in 2020:

○ : Attendance in person; Δ : Attendance by proxy; X : Absent

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Po-Chih Yung-Ho Tsai-Ching
Date Term Neng-Mo Tu Tse-Chun Lin
Chen Chiu Liu
22th meeting of the
2020.01.20 ○ ○ ○ ○ ○
5th board of directors
23th meeting of the
2020.02.21 ○ ○ ○ ○ ○
5th board of directors
24th meeting of the
2020.03.20 ○ ○ ○ ○ ○
5th board of directors
25th meeting of the
2020.04.24 ○ ○ ○ ○ ○
5th board of directors
26th meeting of the
2020.05.22 Δ ○ ○ ○ ○
5th board of directors
27th meeting of the
2020.06.19 ○ ○ ○ ○ ○
5th board of directors
28th meeting of the
2020.06.23 ○ ○ Δ ○ ○
5th board of directors
29th meeting of the
2020.07.24 ○ ○ ○ ○ ○
5th board of directors
30th meeting of the
2020.08.28 ○ ○ ○ ○ ○
5th board of directors
31th meeting of the
2020.09.25 ○ ○ ○ ○ ○
5th board of directors
32th meeting of the
2020.10.30 Δ ○ ○ ○ ○
5th board of directors
33th meeting of the
2020.11.27 ○ ○ ○ ○ ○
5th board of directors
34th meeting of the
2020.12.18 ○ ○ ○ ○ ○
5th board of directors
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Corporate Governance Report 29

3.4.2 Evaluation of Board of Directors

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Frequency Period Scope Method Description
EY Advisory Services conducted performance evaluation of
the board of directors of Wisdom Marine Lines between
January 31, 2019 and March 15, 2019. EY Advisory Services
explored eight aspects to identify key elements and evaluate
To evaluate the
the performance of the board of directors of Wisdom Marine
performance of the
Lines. These aspects are board structure and process, board
board of directors Hired external
composition, institutional and organizational structure, roles
between July 1, professional
and responsibilities, culture and conduct, director training and
Triennially 2017 and December institution -
development, risk management oversight, and filing,
31, 2018 EY Advisory
disclosure, and performance monitoring. The process involved
Services
inspecting documents and inviting the chairman and two
Latest evaluation
independent directors to one-on-one interviews. In addition, 9
report: March 2019
directors completed self-assessment questionnaires. EY
Advisory Services completed an overall evaluation, and
summarized its observations and recommendations in the
evaluation report.
Assessment area Score
To evaluate the Board Director participation 4.5 / 5
performance of the
members Quality of meeting discussions and decisions 4.9 / 5
board of directors
completed
Annually between Tuesday, Board composition and structure 4.9 / 5
self-
January 01, 2020
assessment Education and training completed by directors 4.2 / 5
and Tuesday,
December 31, 2020 questionnaires Corporate governance and culture 4.8 / 5
Overall score 4.7 / 5
Assessment aspect Score
To evaluate the Board
Director participation 4.9 / 5
performance of the members
Audit Committee completed Quality of meeting discussions and decisions 5.0 / 5
Annually
between January 1, self- Audit committee composition and structure 5.0 / 5
2020 and December assessment
Corporate governance and culture 4.8 / 5
31, 2020 questionnaires
Overall score 4.9 / 5
Assessment aspect Score
To evaluate the Board Director participation 5.0 / 5
performance of the members
Quality of meeting discussions and decisions 4.5 / 5
Remuneration completed
Annually Committee between self- Remuneration committee composition and 5.0 / 5
structure
January 1, 2020 and assessment
December 31, 2020 questionnaires Corporate governance and culture 5.0 / 5
Overall score 4.9 / 5
Assessment aspect Score
To evaluate the Board Director participation 5.0 / 5
performance of the members
Quality of meeting discussions and decisions 4.3 / 5
Nomination completed
Annually Committee between self- Nomination committee composition and 5.0 / 5
structure
January 1, 2020 and assessment
December 31, 2020 questionnaires Corporate governance and culture 4.8 / 5
Overall score 4.8 / 5
Board of Directors
Board of Directors
Audit Committee
Remuneration Committee
Nomination Committee
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Corporate Governance Report 30

3.4.3 Operations of the Audit Committee

The Audit Committee met 13 times in last year (2020). The details of the attendance are as follows:

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Attendances in Attendances by Attendance rate
Title Name Notes
person proxy （ % ）
Independent director Tu, Neng-Mo 10 3 76.92% None
Independent director Chen, Po-Chih 13 0 100% None
Independent director Lin, Tse-Chun 12 1 92.31% None
Independent director Chiu, Yung-Ho 13 0 100% None
Independent director Liu, Tsai-Ching 13 0 100% None
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Other important information:

The primary responsibility of the Audit Committee is to assist the board of directors in performing its duty to oversee the accounting, audit, and financial reporting processes in the Company and the quality of financial management.

Matters to be reviewed by the Audit Committee include:

Fair presentation of financial statements
Effective enforcement of internal control
Adequacy of accounting policies
Management of existing or potential risks
Material asset or derivative transactions
Material loans, endorsements, or guarantees
Appointment and removal of financial, accounting, or internal audit officers
Selection/Change of certificated public accountants and their independence and performance
Performance of Audit Committee's responsibilities
Audit Committee Performance Self-assessment Questionnaire
Securities offerings or issues
Compliance with relevant laws and regulations

Review of financial reports:

The board of directors prepared the 2020 business report, financial statements, and earnings distribution plan. In particular, Ernst & Young Taiwan has audited the 2020 financial statements, and issued an audit report. The reports above have been reviewed by the Audit Committee as correctly portraying the Company's business activities.

Assessment of validity of the internal control system:

The Audit Committee evaluates the validity of the Company's policies and procedures regarding the internal control system (including finance, operations, risk management, information security, outsourcing, compliance and other control measures), and reviews the Company's audit department and certifying CPA as well as regular reports from the management, covering both risk management and compliance. Appointment of certifying CPA:

The Audit Committee is tasked with monitoring the independence of the certifying CPA firm for the purpose of ensuring impartiality in financial statements. In general, apart from tax related services or specially approved business activities, the certifying CPA firm is not allowed to provide any other service to the Company. All services provided by the certifying CPA firm must have the Audit Committee's prior approval. To ensure independence of the CPA firm, the Audit Committee has followed Article 47 of the Certified Public Accountant Act and the rules regarding integrity, impartiality, and independence in No. 10 Bulletin of Norm of Professional Ethics for Certified Public Accountant of the Republic of China and devised an independence evaluation form. The form is intended to assess the independence, professional training, and competence of CPAs and whether they are related parties to or share business or financial interest with the Company. The 33rd meeting of the 5th Audit Committee on November 27, 2020 and the 33rd meeting of the 5th board of

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Corporate Governance Report

directors on November 27, 2020 reviewed and passed that all certifying CPAs at Ernst & Young Taiwan met the independence criteria.
Should any of the following take place in an audit committee meeting, the date and number of the meeting, the content of proposal, the Audit Committee's resolutions and the Company's response to the Audit Committee's opinions should be recorded:
(1) Matters listed in Article 14-5 of the Securities and Exchange Act
(2) Aside from the above matters, other resolutions that are passed by a two-thirds majority or more of the board of directors but without being passed by the Audit Committee

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Resolutions
that are passed
by a two-thirds
Matters under
majority or
Date of the Article 14-5 of
more of the
Audit Term Agenda and follow-up the Securities
directors but
Committee and Exchange
without being
Act
passed by the
Audit
Committee
22th meeting of  2019 Q4 audit follow-up of previous non-
2020.01.20 the 5th Audit compliances V
Committee
 Adoption of 2019 Financial Report.
 Amendment to the Articles of Association
23th meeting of
 Amendment to Procedures for Loan to Others
2020.02.21 the 5th Audit V
 Amendment to Procedures for Endorsement
Committee
and Guarantee
 Intercompany Loan Facility
 2019 Internal Control Declaration
 Amendment to Internal Control Procedures
 Incorporation of Wisdom Lines Europe B.V.
 Capital Increase of Wisdom Lines Europe B.V.
24th meeting of  Capital Increase of Wisdom Marine
2020.03.20 the 5th Audit International Inc. and Subscription for New V
Committee Shares Issued by Pescadores Investment and
Development Inc.
 Resignation and Appointment of Internal
Auditor
 Intercompany Loan Facility
 Adoption of 2020 Q1 Financial Report
25th meeting of
 2020 Q1 audit follow-up of previous non-
2020.04.24 the 5th Audit V
compliances
Committee
 Intercompany Loan Facility
26th meeting of  Appointment of Internal Auditor
2020.05.22 the 5th Audit  Intercompany Loan Facility V
Committee
27th meeting of  Capital Increase of Wisdom Panama
2020.06.19 the 5th Audit  Amendment to Internal Control Procedures V
Committee
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 Adoption of 2020 Q2 Financial Report
29th meeting of
 2020 Q2 audit follow-up of previous non-
2020.07.24 the 5th Audit V
compliances
Committee
 Intercompany Loan Facility
 Amendments to the Procedures for
30th meeting of Endorsement and Guarantee for Wisdom
2020.08.28 the 5th Audit Panama and its subsidiaries V
Committee  Amendment to Internal Control Procedures
 Intercompany Loan Facility
31th meeting of  Amendment to Internal Control Procedures
2020.09.25 the 5th Audit V
Committee
 Adoption of 2020 Q3 Financial Report
 2020 Q3 audit follow-up of previous non-
32th meeting of
compliances
2020.10.30 the 5th Audit V
 Change of CPA from EY
Committee
 Amendment to Internal Control Procedures
 Purchase and Time Charter: LPG Carrier
33th meeting of  Assessment of Right-of-Use Assets Acquired
2020.11.27 the 5th Audit from Related Parties V
Committee  Sale: MV Sakizaya Noble
34th meeting of  Intercompany Loan Facility
2020.12.18 the 5th Audit V
Committee
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The Independent Directors' avoidance of interest motion should indicate the names of the Independent Directors, content of the motion and reasons of avoidance of interest as well as the involvement in voting: None
Communications between independent directors and internal audit officers and auditors (including communications regarding important matters with respect to the Company's finance and business activities, means and results):

To enable independent directors to find out in a timely manner about the Company's operational risks and the status of improvement, the Group has implemented an internal control system and related guidelines in compliance with the Regulations Governing Establishment of Internal Control Systems by Public Companies. To reasonably ensure the internal control system works effectively, the Company has created an audit unit directly under the board of directors and in charge of preparing audit plans as required by the competent authority. The internal audit officer presents to the independent directors an audit report and a list of errors and improvements after the monthly audit procedure is completed. The internal audit officer also attends board meetings to report on the status of the operation.

The accountant audits and sends the financial statements and related reports to the independent directors for review. The accountant attended the meeting on February 26, 2020, and discussed key audit items in the 2020 financial statements with the independent directors.

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3.4.4 Corporate governance practices and departure from Corporate Governance BestPractice Principles for TWSE/GTSM Listed Companies and reasons

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Departure
Practices from
Corporate
Governance
Best-Practice
Area of assessment
Principles for
Yes No Summary TWSE/TPEx
Listed
Companies
and reasons
1. Has the Company set and V The Company has established the corporate governance No material
disclosed principles for principles pursuant to the "Corporate Governance Best- departure
practicing corporate Practice Principles for TWSE/TPEx Listed Companies"
governance according to the and disclosed the principles on the company website and
"Corporate Governance Best- the Market Observation Post System.
Practice Principles for
TWSE/TPEx Listed
Companies?"
2. The Company's shareholding V (1) The Company has hired a specialized shareholder No material
structure and shareholders' services agent in Taiwan to handle shareholder departure
rights and interests services. A contact and email address are also in
(1) Has the Company set internal place to respond promptly to shareholders'
operations procedures for suggestions or handle disputes.
dealing with shareholder (2) The Company has a shareholder services unit and
proposals, doubts, disputes, hires a shareholder services agent. It follows up
and litigation as well as regularly on large shareholders with actual control of
implemented those procedures the Company and the entities with the ultimate
through the proper procedures? control of such shareholders. The Company also
(2) Does the Company have a list performs filing and reporting procedures as required.
of major shareholders of (3) The Company has the "Rules Governing Financial
companies over which the and Business Matters Between Affiliated
Company has actual control Enterprises", the "Procedures for Supervision and
and the list of ultimate owners Management of Subsidiaries", and the "Procedures
of those major shareholders? for Loaning of Funds and Making of
(3) Has the Company established Endorsements/Guarantees" in place to govern
and implemented risk business transactions between the Company and its
control/management and affiliates and to provide rigorous and effective risk
firewall mechanisms between management and firewall mechanisms.
it and affiliated corporations? (4) The Company has implemented the Procedures for
(4) Does the company have Handling Material Nonpublic Information. The
internal regulations in place to procedures require that employees of the Company
prevent insiders from trading adhere to the regulations against insider trading.
securities on information not Trading of related securities is prohibited if one is in
yet public? possession of material nonpublic information.
The Company provides a compliance handbook for
newly elected directors after they take office and
awareness orientation for new employees when they
receive training. The latest orientation for new
employees took place in December 2019 to January
2020. The courses covered confidentiality of
material information and the elements of insider
trading. The presentations and video files used in the
courses were placed on internal discs that can be
accessed by all employees so that those who missed
the courses would be able to receive the same
information. Electronic announcements are made
every January to reiterate the rules to the employees.
Announcements on "insider trading prevention
training" were made on January 18, 2021.
3. Board composition and V (1) Board composition No material
responsibilities a. The Company implemented the Corporate departure
Governance Principles after it was passed in the
20th meeting of the 4th board of directors on
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Area of assessment Yes	Area of assessment Yes	No	orporae Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons Summary	orporae Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons Summary
(1) Has the board of directors devised and enforced a diversity policy? (2) In addition to the Remuneration Committee and the Audit Committee required by law, is the company willing to create on a voluntary basis other functional committees? (3) Has the company established and implemented the rules and methods for board performance evaluation, and been conducting performance evaluation every year? (4) Does the company periodically evaluate the level of independence of the CPA?			December 16, 2016. Chapter III "Reinforcing the role of the board of directors" provides a comprehensive policy. Nomination and election of board members are governed by the Articles of Incorporation and follow the nomination rules. In addition to education and work experience of each candidate, stakeholder opinions will also be taken into consideration. The process follows the Director Election Guidelines and the Corporate Governance Principles in order to ensure diversity and independence of the board. b. The composition of the board of directors shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the Company's business operations, operating dynamics, and development needs. It is advisable that the policy include, without being limited to, the following two general standards: i. Basic requirements and values: Gender, age, nationality, and culture. ii. Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, or technology), professional skills, and industry experience. c. Each board member shall have the necessary knowledge, skill, and experience to perform his/her duties. The abilities that must be present in the board as a whole are as follows: i. Ability to make sound business judgments. ii. Ability to perform accounting and financial analysis. iii. Ability to manage a business. iv. Ability to handle crisis management. v. Industry knowledge. vi. An understanding of international markets. vii. Leadership ability. viii. Decision-making ability. d. Regarding the 9 directors on the 5th board of directors, the skills possessed by the board of directors as a whole are consistent with the needs of the Company's future development and follow the Company's board diversity policy. Please refer to p.43 (note 1) in the annual report for implementation of the Company's board diversity policy at present. e. The board of directors implements a board diversity policy and discloses the policy on the company website and the Market Observation Post System. (2) In addition to the Remuneration Committee and the Audit Committee, the Company has also created the Nomination Committee as part of its commitment to good corporate governance. (3) The board of directors passed the Guidelines for Performance Evaluation of Board of Directors and Functional Committees on April 28, 2017. The guidelines require that a self-assessment of the board

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Corporate Governance Report 35

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of directors be completed within three months after the end of a fiscal year. The self-assessment of overall performance of the board of directors cover the following five aspects: a. Director participation b. Quality of meeting discussions and decisions c. Board composition and structure d. Education and training completed by directors e. Corporate governance and culture The self-assessment of overall performance of the functional committees cover the following four aspects: a. Member participation b. Quality of meeting discussions and decisions c. Committee composition and structure d. Corporate governance and culture Every year, when all questionnaires are completed and collected, the Corporate Governance Evaluation Task Force follows the guidelines above to perform analysis, and includes quantitative indicators before presenting the report to the board of directors and making recommendations for improvement at the same time. The guidelines above and evaluation results are disclosed on the company website. The results of last board performance evaluation (2020) are as follows: a. The average score of the board self-assessment is 4.70 (out of 5.00). b. The average score of the Audit Committee selfassessment is 4.90 (out of 5.00). c. The average score of the Remuneration Committee self-assessment is 4.90 (out of 5.00). d. The average score of the Nomination Committee self-assessment is 4.80 (out of 5.00). Recommendations for improvement: The Nomination Committee will discuss recommended courses, and consider the backgrounds of the directors, newly amended regulations, and industry characteristics before deciding the courses. The report on performance evaluation of the board and its members was approved in the board meeting on March 26, 2021. The Company entrusts external agencies to perform the external board evaluation every three years, on February 11, 2019, the Company hired EY Advisory Services, an external party, to perform the external board evaluation for the period between July 1, 2017 and December 31, 2018. EY Advisory Services sent experts to perform the evaluation with respect to structure, people, and process and information. The evaluation process involved document review, director self-assessment questionnaires, and onsite interviews with 3 directors. It covered eight items, which were board structure and processes, board composition, institutional and organizational structure, roles and responsibilities, culture and conduct, director training and development, risk management oversight, and filing, disclosure, and performance monitoring.

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Area of assessment Yes	Area of assessment Yes	No	orporae Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons Summary	orporae Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons Summary
			EY Advisory Services presented an evaluation report on March 22, 2019. For qualitative indicators, EY Advisory Services performed further 3-tiered evaluation, basic, advanced, and benchmark. The comprehensive evaluation rated the Company's performance in the three aspects as advanced. EY Advisory Services also made recommendations for further improvement. They were included in the report to the board of directors on March 29, 2019. The Company will use the recommendations as a basis for ongoing reinforcement of the role of the board. EY Advisory Services made the following recommendations: a. Recommendation for Wisdom Marine Lines to establish explicit proposal submission rules for the board of directors and the Audit Committee and to allow important operational plans to be included in agendas for the Audit Committee to the extent permitted under current circumstances. b. Recommendation to build a director talent database via the Nomination Committee or other units as appropriate in order to enable the Company to assemble a board with the experience and expertise needed to accomplish the Company's development strategies and goals at different stages of its business. c. Recommendation for the board of directors to include shipping related courses in education and training for directors specializing in other fields and to continue to recruit experts from outside the Company to provide group courses for directors. In addition to corporate governance, the courses may cover forward looking topics, such as trade war, energy efficiency and carbon reduction, and carbon neutral vessels, to help members of the board discussion strategies and exchange opinions on an open communication platform. d. Recommendation for the Company to identify potential external risks, operational risks, and financial and nonfinancial risks in medium- and long-term sustainability, consider the probability of such occurrences and the potential impact on management of Wisdom Marine Lines' business, and implement risk management mechanisms accordingly. An external party may be commissioned if needed to perform third party evaluation as part of the continuing effort to optimize corporate governance and the internal control system. The Company plans to follow EY Advisory Services' recommendations and make plans for improvement as part of the continuing effort to reinforce the role of the board of directors. (4) The Company evaluates the independence and competence of CPAs at least once a year. The evaluation covers the size and reputation of the accounting firm, the number of consecutive years of

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Corporate Governance Report 37

Practices Departure from Corporate	Practices Departure from Corporate	Practices Departure from Corporate	Practices Departure from Corporate	Practices Departure from Corporate
Area of assessment Yes			Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons Summary
		No

audit service, the nature and extent of non-audit services, the audit and certification fees, peer review, any lawsuit or warning or investigation by the competent authority, the quality of audit services, any training on a regular basis, and the interaction with the management team and internal audit officers. The process is completed by the Accounting Department. The results for the last two years were presented to the board of directors on December 13, 2019 and November 27, 2020.
4. Does the TWSE/TPEx listed company have a corporate governance unit or staff responsible for corporate governance practices (including but not limited to providing information necessary for directors and supervisors to perform their duties, organizing board meetings and annual general meetings as required by law, handling business registration and any change of registration, and compiling minutes of board meetings and annual general meetings) on a full- time or part-time basis?	V		The Company has the Corporate Governance Evaluation Task Force. The CFO serves concurrently as the corporate governance officer and the contact for the directors. The CFO has three years or more of experience in managing finances for a listed company. There are four other members, who form the planning unit for corporate governance and ethical corporate management aimed to protect shareholder rights and reinforce the role of the board of directors. The responsibilities include supplying information necessary for directors and independent directors to perform their duties and the latest regulatory development relevant to management of the business in order to help directors and independent directors comply with the law. The Company made the following progress in the business in 2020. A report was presented to the board of directors on March 26, 2021. (1) Enhanced the role of the board of directors a. Provided training courses for directors: i. 3 hours of [Updates on accounting, auditing and securities management related laws and regulations and analysis of the latest issues of "Corporate Law Amendment"] on August 28, 2020 ii. 3 hours of [Group governance] on October 30, 2020. b. A directors liability insurance policy for US$5 million was purchased and presented to the board of directors on January 20, 2020. c. The Company called a meeting with the CPAs, independent directors, audit officers, and financial and accounting officers on February 21 and October 30, 2020. d. Performance evaluation of the board of directors and functional committees was completed, and the results were presented to the board of directors on March 20, 2020. e. In addition to participating in training courses for directors, the chief governance officer completed other courses: i. 3 hours of [The Corporate Governance Viewpoints of Corporate Governance Staff and the Operational Research Viewpoints of the Board of Directors] on February 7, 2020 ii. 3 hours of [Early Warning and Type Analysis of Enterprise Financial Crisis] on February 13, 2020 iii. 3 hours of [Updates on accounting, auditing and securities management related laws and	No material departure

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Departure
Practices from
Corporate
Governance
Best-Practice
Area of assessment
Principles for
Yes No Summary TWSE/TPEx
Listed
Companies
and reasons
regulations and analysis of the latest issues of
"Corporate Law Amendment"] on August 28,
2020
iv. 3 hours of [Group governance] on October
30, 2020
(2) Increased transparency
a. Investor seminars:
i. Attended a Sino Pac presentation on
September 18, 2020.
ii. Attended a TWSE presentation on December
8, 2020.
b. Created an investor services team and installed a
range of channels for investor communications.
c. Started disclosing unaudited operating profit and
net profit for the previous month at the beginning
of each month (on the 3rd business day or so) on
a voluntary basis.
d. The Chinese and English versions of the 2020
financial statements were uploaded and disclosed
early on February 26, 2021.
(3) Strengthened compliance
a. New rules and regulations include the following:
i. Implemented the Endorsement and
Guarantee for Wisdom Panama and its
subsidiaries on August 28, 2020.
b. Amendments to rules and regulations include the
following:
i. Procedures for Loan to Others were amended
on February 21, 2020.
ii. Procedures for Endorsement and Guarantee
were amended on February 21, 2020.
iii. Rules of Board Meeting were amended on
February 21, 2020.
iv. Rules of General Meeting were amended on
February 21, 2020.
v. Audit Committee Charter were amended on
February 21, 2020.
vi. Remuneration Committee Charter were
amended on February 21, 2020.
Those i ~ iv. were approved by the General
Meeting on May 22, 2020
(4) Other
a. Published the 2019 Corporate Social
Responsibility Report on June 23, 2020.
b. The Company scored 95.83 and was rated in the
6%-20% in the 2019 Corporate Governance
Evaluation. The Corporate Governance
Evaluation is released annually by the Corporate
Governance Center.
5. Has the company established V The Company respects the rights of its stakeholders. By No material
channels for communicating identifying stakeholders and utilizing the appropriate departure
with stakeholders (including channels with stakeholder participation, the Company finds
but not limited to shareholders, out the reasonable expectations and needs of the
employees, customers and stakeholders, and responds appropriately to important CSR
suppliers), set up a dedicated issues of concern to the stakeholders. The departments
stakeholder area on the work together in stakeholder communications and report
company website, as well as regularly to the board of directors.
responded appropriately to (1) Shareholders
important corporate social
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Area of assessment Yes	Area of assessment Yes	No	orporae Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons Summary	orporae Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons Summary
responsibility issues of concern to stakeholders?			Issues of concern: procurement of energy efficient ships / economic performance / maritime safety / fleet management and planning / compliance / corporate governance a. The annual general meeting is held by the end of May every year. The proposals are decided by voting on a case-by-case basis. Shareholders are also able to exercise their voting rights and participate in the voting process by electronic means. b. Annual general meeting reports and business reports are released and made available to investors every year. c. Revenue and unaudited earnings for the previous month are published on the Market Observation Post System and the company website every month. d. Investor conference presentations are uploaded to the Market Observation Post System and the company website to be available to investors. e. Contact: Mr. Mou, Planning Division of Management Department Email:[email protected] (2) Employees Issues of concern: economic performance / maritime safety / talent recruitment and retention / employer- employee relations/starting salaries a. The Company holds a management meeting every month. The department heads report and discuss activities in their respective departments and other matters including talent recruitment and retention. The conclusions are made known to the staff in relevant departments after the meetings. b. Employer-employee meetings are held every month to manage employer-employee relations, facilitate employer-employee collaboration, and improve efficiency in the workplace. c. Contact: Mr. Chiu, Human Resources Section of Management Department. Email:[email protected] Mr. Wanh, Seaman Affairs Department Email:[email protected] (3) Suppliers Issues of concern: maritime safety / risk management / fleet management and planning / compliance / shipping quality a. In addition to paying or receiving visits from time to time, the Company contacts suppliers directly via email or telephone to conduct business or make improvement. b. Dedicated contacts are assigned for procurement projects, and suppliers are reached directly by mail or telephone. c. Contact: Mr. Hsu, Supply Section : [email protected] Miss Dang, Technical Department:

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Corporate Governance Report 40

Practices Departure from Corporate	Practices Departure from Corporate	Practices Departure from Corporate	Practices Departure from Corporate	Practices Departure from Corporate
Area of assessment Yes			Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons Summary
		No

[email protected] (4) Customers Issues of concern: economic performance/risk management / corporate governance / unauthorized disclosure / customer satisfaction a. The Company stays in constant contact with customers by email or telephone on a weekly or daily basis. b. At least one visit is paid or received every year. c. Contact: Mr. Chang, Business and Operation Department : [email protected] In addition to the stakeholder communication channels above, the company website has a dedicated stakeholder section that displays the contact information for stakeholders. The aim is to achieve accessibility, transparency, timeliness, integrity, and interactivity. It helps the Company understand issues of concern to stakeholders and respond as appropriate. It also enables the Company to receive feedback from different directions and use them as a basis for ongoing improvement. The Company published the 2019 Corporate Social Responsibility Report on June 23, 2020 and disclosed more details on CSR practices.
6. Has the company hired a professional agency to handle matters related to the annual general meeting? V The Company has hired SinoPac Securities Co., Ltd. to handle matters related to the annual general meeting. No material departure
7. Information disclosure (1) Has the company established a corporate website to disclose information regarding the company's financial, business and corporate governance standings? (2) Has the company adopted other means of information disclosure (e.g. creating a website in English, appointing a dedicated staff to gather and disclose company information, implementing a spokesperson system, and disclosing the process of investor conferences on the company website)? (3) Does the TWSE/TPEx listed company publish and report its annual financial report within two months after the end of a fiscal year, and publish and report its financial reports for the first, second and third quarters as well as its operating status for each month before the specified deadline?	V		(1) The Company has a website to disclose business, financial, and corporate governance information in Chinese and English. (2) Questions related to the Company are answered by the spokesperson or deputy spokesperson. Furthermore, information on the Company is to be gathered and disclosed by the spokesperson or deputy spokesperson and the investor relations departments. It is disclosed on the company website the investor conferences which took place in the past or to which the Company has been invited. (3) The Company released and filed the 2019 financial statements on February 21, 2020. The financial statements for the first, second, and third quarters were released and filed within 45 days after the end of the corresponding quarter. Unaudited operating profit and net profit for the previous month were filed and released on a voluntary basis by the 3th business day of each month.	No material departure

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Corporate Governance Report 41

Practices Departure from Corporate	Practices Departure from Corporate	Practices Departure from Corporate
Area of assessment Yes		Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons Summary
	No

8. Does the company have other information that contributes to better understanding of its corporate governance standing (including but not limited to employee rights, employee care, investor relations, supplier relations, stakeholder rights, training completed by directors and supervisors, implementation of risk management policies and risk evaluation criteria, implementation of customer policies, liability insurance policies purchased for directors and supervisors)? V (1) Employee rights, interests and well being: The Company and its subsidiaries comply with local laws and regulations and implement employee benefit programs as required. The Management Department is in charge of handling employee rights. The department also provides training for employees regularly or as needed. The Company also has the Employee Welfare Committee in charge of providing holiday gifts and bonuses and other benefits for employees. Employer-employee meetings are held every quarter to maintain an open communication channel between managers and employees. (2) Investor relations: Wisdom Marine Lines adopts a stability strategy to create long term value for investors. The Company has an investor relations section in place to provide information on its operations and finance. (3) Supplier relations: The Company has always maintained good relationships with its suppliers. Dedicated contacts are assigned for procurement projects, and suppliers are reached directly by mail or telephone. (4) Stakeholder interests: All of the Company's stakeholders are able to view or copy the Company's registration details according to the applicable laws and regulations. Contact information for stakeholders is available on the company website. (5) Continuing education of directors: The Company arranges appropriate training courses for directors as needed. Meanwhile, the number of training hours completed by the directors in 2020 met the requirement. Training details are disclosed on the Market Observation Post System. (6) Implementation of risk management policies and risk assessment standards: Please refer to Chapter VII Risks. (7) Implementation of customer relations policies: The Company dedicates itself to providing the best service for its customers and building long term partnerships with its customers. (8) Status of purchase of liability insurance by the Company for directors: The Company has purchased liability insurance policies for the directors and reported the information to the board of directors. No material departure
9. Please describe improvements in terms of the results of the Corporate Governance Evaluation System in recent years and propose areas and measures to be given priority where improvement is needed. The Company pays attention to the impact of corporate governance on business management, transparent disclosure, shareholders' rights and fair treatment of shareholders, and effective CSR practice. The Company will continue to practice effective corporate governance, and maximize value for the Company and its shareholders. (1) The Company has prepared the Corporate Social Responsibility Report based on international reporting guidelines. The report has been uploaded to the Market Observation Post System and the company website. Plans are being made to obtain third party certification in the future. (2) The Company has created the Corporate Social Responsibility Committee, and discloses the committee's activities and performance on the company website and in annual reports. (3) The Company makes an active effort to implement an anti-corruption policy and avoid unethical behaviors in business activities that may cause damage to the community and other stakeholders. (4) The Company actively plan the installation of full-time/part-time ethical corporate management units to be responsible for establishing the ethical corporate management policies and prevention programs and supervising the implementation thereof.。

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Corporate Governance Report

note1 ： Implementation of the Company's board diversity policy

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Seniority of
Age Independent
Item
director
年
Name
James
       
Lan
Masayuki        
Fukui
Mike
Tzu-Lung          
Chao
Ming-
Shang        
Chen
Neng-Mo      
Tu
Po-Chih
      
Chen
Tse-Chun
     
Lin
Yung-Ho      
Chiu
Tsai-
     
Ching Liu
Gender analysis
Nationality 3 to 9
Ability to law
Under 50 51 to 60 61 to 70 71 to 75 Under 3 9 or more Leadership ability
Industry knowledge
Decision-making ability
employee of the company
Ability to manage a business
Ability to handle crisis management
Ability to make sound business judgments Ability to perform accounting and financial An understanding of international markets
Male Taiwa
Male Japan
Male Taiwa
Male Taiwa
Male Taiwa
Male Taiwa
Male Taiwa
Male Taiwa
Femal Taiwa
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Corporate Governance Report

3.4.5 Operations of the Remuneration Committee

3.4.5.1 Members of Remuneration Committee:

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5 years or more of work experience
and one of the following professional Independence criteria (Note 2)
Criteria qualifications
Type
(Note 1)
1 2 3 4 5 6 7 8 9 10
Name
Independent director Chen, Po-Chih             -
Independen Tu, Neng-              2
t director Mo
Independent director Lin, Tse-Chun             -
Independent director YunChiu, g-Ho             -
Independent director Liu, Tsai-Ching             -
university
remuneration committee
business of the Company in a public or private college or finance, accounting, or other academic field related to the An instructor or higher in a department of commerce, law, profession related to the business of the Company national examination and been awarded a certificate in a other professional or technical specialist who has passed a A judge, prosecutor, lawyer, certified public accountant, or other field related to the business of the Company Work experience in commerce, law, finance, accounting, or Number of other public companies in which the member is also a
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Note 1: Specify director, independent director, or other under Type.

Note 2: Place a check (  ) where the member meets the following conditions during the two years prior to election and at any time during service. (1) Not an employee of the Company or any of its affiliates.
(2) Not a director or supervisor of the Company or any of its affiliates, except for an independent director established pursuant to the Securities and Exchange Act or the applicable local regulations.
(3) Not a natural-person shareholder who, together with his/her spouse and minor children, holds or holds in the name of another person an aggregate amount of 1% or more of the shares in the Company, and not one of the Company's top ten shareholders.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship or closer to anyone listed in the three preceding items.
(5) Not a director, supervisor, or employee of an institutional shareholder that holds 5% or more of the shares in the Company, and not a director, supervisor, or employee of any of the top five institutional shareholders.
(6) Not a director, supervisor or employee of another company that has the same directors as the Company or is controlled by the same person that has more than half of the voting power in the Company (except where the person is simultaneously an independent director of the company or its parent company, a subsidiary or another subsidiary of the same parent company appointed pursuant to the Securities and Exchange Act or local regulations)
(7) Not a director, supervisor or employee of another company or institution that has the same chairman, president, or the equivalent or a spouse in one of the roles as the company (except where the person is simultaneously an independent director of the company and its parent company, a subsidiary or another subsidiary of the same parent company appointed pursuant to the Securities and Exchange Act or local regulations).
(8) Not a director, supervisor, manager, or shareholder holding a 5% or larger stake of a company or institution that has a financial or business relationship with the Company.
(9) Not a professional person or an owner, partner, director, supervisor, or manager of any proprietorship, partnership, company, or institution providing commercial, legal, financial, or accounting services or consultation for the Company or any of its affiliates, and not a spouse of any such person.
(10) Not been a person in any of the circumstances listed in Article 30 of the Company Act.

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Corporate Governance Report

3.4.5.2 Operations of the Remuneration Committee

The Remuneration Committee consists entirely of the independent directors of the Company. There are 5 members on the committee on the publication date of this annual report. The term of office for the current committee starts on May 25, 2018 and ends on May 24, 2021. The Remuneration Committee met 2 times in last year (2020). The details of the attendance are as follows:

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Title Name Attendances in person Attendances by proxy Attendance rate （ % ） Notes
Convener Chen, Po-Chih 2 0 100% None.
Member Tu, Neng-Mo 1 1 50% None.
Member Lin, Tse-Chun 2 0 100% None.
Member Chiu, Yung-Ho 2 0 100% None.
Member Liu, Tsai-Ching 2 0 100% None.
Other important information:
1. Roles and responsibilities of the Remuneration Committee
 Set and review regularly the annual and long-term performance targets for directors and managers and
the remuneration policies, systems, standards, and structures.
 Assess regularly the progress of directors and managers toward their performance targets, and set the
contents and amounts of individual compensation packages.
2. Describe the date, term, agenda, and resolutions of the board meeting and the response to the Remuneration
Committee's recommendations where the board did not adopt or modify the Remuneration Committee's
recommendations (e.g. describe the difference and reasons where the board of directors approves a better
compensation package than what is recommended by the Remuneration Committee): None.
3. If a member opposes a resolution the Committee has adopted or has reservations with a written record or a
statement, the date and session of the meeting, the resolution, opinions of all the members, and the handling of
their opinions shall be indicated: None.
Remuneration
Term Agenda and follow-up Resolutions
Committee Date
Distribution of director compensation for
5th meeting of the 4th The Remuneration
2019, resolution of employee pay
2020.1.20 Remuneration Committee passed with a
adjustment, , and distribution of year-end
Committee unanimous vote.
bonuses for 2019
6th meeting of the 4th The Remuneration
2020.3.20 Remuneration Distribution of director compensation for 2019 Committee passed with a
Committee unanimous vote.
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Corporate Governance Report

3.4.6 Operations of the Nomination Committee

3.4.6.1 Members of Nomination Committee:

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Has at least 5 years of work experience Meets the independence criteria
and professional qualifications below (Note 1)
Criteria
Name
1 2 3 4 5 6 7 8 9 10 11 12
Lan, Chun-Sheng         -
Chao, Mike Tzu-Lung             -
Chen, Po-Chih               -
Chiu, Yung-Ho               -
Liu, Tsai-Ching               -
operations
other public companies
private junior college, college or university to the Company's operations in a public or finance, accounting, or any subject relevant Lecturer (or above) of commerce, law, qualification relevant to the Company's accountant, or holder of professional Certified judge, prosecutor, lawyer, necessary for the business of the Company law, finance, or accounting, or otherwise Work experience in the area of commerce, Number of positions as an Independent Director in
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Note 1: The symbol "v" marks where the Directors meet the criteria:

Not an employee of the Company or any of its affiliates.
Not a Director or Supervisor of the Company of any of its affiliates (excluding Independent Directors set up by the Company, its parent company or subsidiaries in compliance of the local regulations).
Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders.
Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the above persons in the preceding three subparagraphs.
Not a Director, Supervisor, or employee of a corporate/institutional shareholder that directly holds five percent or more of the total number of issued shares of the Company or ranks as one of its top five shareholders.
If a majority of the company's director seats or voting shares and those of any other company are controlled by the same person: a director, supervisor, or employee of that other company.
If the chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses: a director (or governor), supervisor, or employee of that other company or institution.
Not a Director, Supervisor, managerial officer, or a shareholder that holds more than five percent of shares at a company or institution that has financial or business exchanges with the Company.
Not a professional individual or owner, partner, director (member of the governing board), supervisor (member of the supervising board), or managerial officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting, or consultation services to the Company or any of its affiliates, or spouse thereof. However, this restriction does not apply to a member of the remuneration committee who exercises power in accordance with Article 7 of Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter.
Not having a marital relationship, or a relative within the second degree of kinship to any other Director of the Company.
Not been a person of any conditions defined in Article 30 of the Company Act.
Not elected as a government or corporate representative, as described in Article 27 of the Company Act.

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Corporate Governance Report

3.4.6.2 Composition and operations of the Nomination Committee

There are 5 members on the Nomination Committee on the publication date of this annual report. The term of office for the current committee starts on June 22, 2018 and ends on May 24, 2021. The Nomination Committee met 2 times in last year (2020). The details of the attendance are as follows:

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Attendances in Attendances by Attendance rate
Title Name Notes
person proxy （ % ）
Director James Lan 2 0 100% None.
Director Mike Tzu-Lung Chao 2 0 100% None.
Independent director Po-Chih Chen 2 0 100% None.
Independent director Yung-Ho Chiu 2 0 100% None.
Independent director Tsai-Ching Liu 2 0 100% None.
Other important information:
The Nomination Committee convenes at least once a year according to the committee charter and assists the board of
directors in the following matters:
1. Search for and review and nomination of director candidates.
2. Build and develop the organizational structure of the board of directors to ensure an appropriate board
composition.
3. Review training programs for directors and succession plans for directors and executive officers.
4. According to the Articles of Incorporation, members of the board of directors are to be elected by nomination
and serve a term of three years. The list of candidates, who are proposed during the nomination period pursuant
to the Director Election Guidelines, are to be reviewed and then submitted to the annual general meeting by the
Nomination Committee.
5. The Nomination Committee Charter provides that the committee shall meet at least once a year. It also
provides that, depending on the size and scope of business of the Company and considering the professional
knowledge, skills and experience required of the directors and executive officers and their independence, the
Nomination Committee sets and reviews regularly the number of directors and that of executive officers and
qualifications, and looks for suitable executive officer candidates. In addition to exceptional capabilities,
executive officers must share the Company's values, and possess integrity and commitment as well as the
courage to embrace innovation. The Company should review candidates before presenting the results and a list
of recommendations to the board of directors.
Nomination
Term Agenda and follow-up Resolutions
Committee Date
The Nomination Committee
 Board Performance Evaluation
passed with a unanimous vote,
2st meeting of the 2nd
2020.03.20  Extension of Appointment Beyond and submitted the list of
Nomination Committee
Retirement Age candidates to the annual general
meeting.
 Appointment of Convenor of the The Nomination Committee
CSR Committee passed with a unanimous vote,
3st meeting of the 2nd
2020.09.25 and submitted the list of
Nomination Committee  Appointment of Convenor of the
candidates to the annual general
Safety Management Committee
meeting.
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Corporate Governance Report

3.4.7 Performance of Corporate Social Responsibility: Systems and measures taken by the company regarding environmental protection, community involvement, social contribution, social service, public interest, consumer rights, human rights, health and safety, and other social responsibility activities and results.

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Departure from
Practices
Corporate
Social
Responsibility
Best Practice
Item
Principles for
Yes No Summary TWSE/TPEx
listed
companies and
reasons
1. Does the Company observe Ｖ The company conducts risk assessments of important issues on No material
the materiality principle the basis of the principle of corporate social responsibility, and departure
(Note 1) in its assessments formulates relevant risk management policies or strategies based
of risks in environmental, on the assessed risks as follows:
social, and corporate Access
Major Issues Management policies and strategies
governance issues relevant Item
The Company is committed to comply
to its business activities, and
with international laws and
devise risk management
regulations, and monitoring fleet
policies and strategies energy consumption and emissions.
accordingly? The Company sale old ships with
lower energy efficiency, and purchase
new energy-saving and
environmentally friendly ships. In
daily operations, without affecting
ship time chart and safety, the charter
party is coordinated to adjust the
sailing speed to save energy.
The safety of ships and crew is top
priority to the Company. Compliance
is essential to a strong operation, and
allows the fleet to compete more
effectively.
Establishment of corporate
governance organizations and the
implementation of internal control
system, ensure that all personnel and
operations of the Company comply
with relevant laws and regulations.
2. Does the company have a Ｖ The Company has the Management Department in charge of No material
unit that supports CSR supporting CSR practices on a full-time basis. The Corporate departure
practices on a full-time or Social Responsibility Committee was created in October 2017,
part-time basis? Is the CSR and the chairperson was appointed by the board of directors. It is
unit operated by senior an important milestone in CSR implementation for the Company
managers as authorized by on the path to sustainability. A systematic approach to data
the board of directors, and collection has been taking shape in the company. Activities related
does the CSR unit report to to environmental protection and customer relations and
the board of directors? subsequent followup and results are reviewed regularly. Reports
are submitted to the board of directors on an annual basis.
3. Environment Ｖ (1) The office buildings operated by the Company follows No material
(1) Does the company have government policies and implements a recycling system. departure
in place a suitable The Management Department is responsible for
environmental environmental management related matters, including
management system daily office cleaning to maintain a clean, healthy
based on the environment.
Protect
Enviroment
Environmental
Social Safety Crew
Corporate
Governance Compilance
Economic and
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Departure from
Practices
Corporate
Social
Responsibility
Best Practice
Item
Principles for
Yes No Summary TWSE/TPEx
listed
companies and
reasons
characteristics of the (2) The Company has launched a paperless campaign that
industry? makes electronic copies of files that have to be stored in
(2) Does the company work order to reduce paper use and achieve environmental
to improve resource targets.
utilization efficiency and (3) The countermeasures taken by the Company in response to
use recycled materials climate issues are as follows:
that have a low impact a. Temperature settings in the air conditioning systems
on the environment? are adjusted to reflect seasonal changes and reduce
(3) Does the company assess unnecessary waste.
the potential risks of b. New energy efficient ships will be joining the fleet. The
climate change ？ And new ships are expected to save fuel consumption by
take measures to deal 15% to 20%, thereby contributing to energy
with climate-related conservation and carbon reduction.
issues ？ c. Risk of higher capital expenditure for ships due to new
(4) Dose the Company environmental regulations: The Company will stay in
collected the past two close contact with shipbuilders to engage in technical
years of greenhouse gas cooperation in order to reduce equipment costs.
emission, water d. Risk of irregular tides/seasonal winds: The Company
consumption and waste pays close attention to weather information and keep
disposal? And have the ship-to-shore communications open at all times. The
policy of less greenhouse Company also ask for real-time information from
gas emission, less water shipping agents.
consumption and less (4) The Company collected the following data over the last two
waste disposal? years:
a. Greenhouse gas emission and policy ： The Company's
greenhouse gas emissions consist mainly of emissions
from its ships burning fuel during trips. Regarding
purchase of ships, the Company actively selects new
designs and devices in order to reduce greenhouse gas
emissions and increase energy efficiency. The
approach also helps the Company comply with the
increasingly stringent environmental regulations
worldwide and build a leading green fleet.
Operational boundaries are established by the concept
of operational control. Scope 1 counts self-managed
trips, Scope 2 counts electricity consumption at the
headquarters, and Scope 3 counts emissions by leased
Wisdom Marine Lines ships. 2018 greenhouse gas
emissions are shown in the table below ：
Source of emission
Item [1] 2020 2019
coefficient
IMO
Scope 1 [2] 37,021 20,655
MEPC.245(66)
GHG coefficient for
electricity published
Scope 2 129 121
by Bureau of
Energy [3]
1,912,25 1,470,28 IMO
Scope 3 [2]
1 5 MEPC.245(66)
Note 1: Scope 1 and Scope 3 emissions are estimated from fuel
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Corporate Governance Report 49

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Departure from
Practices
Corporate
Social
Responsibility
Best Practice
Item
Principles for
Yes No Summary TWSE/TPEx
listed
companies and
reasons
consumption and count only carbon dioxide. Scope 2 is based
on GHG coefficient for electricity. The greenhouse gases
include: carbon dioxide, methane, and nitrous oxide.
Note 2: The coefficient is 3.114 for HSFO and 3.206 for other
fuels.
Note 3: The GHG coefficient for electricity is 0.533 kg
CO2/degree for 2018 and 0.509kg CO2/degree for 2019.
b. Water consumption and policy:
i. Total water consumption at headquarters: All
bathroom sinks at the headquarters are labeled
with water conservation reminders that urge
employees to ensure faucets are turned off
properly after use to prevent waste.
2020/01/22- 2019/01/19-
Period
2021/01/ 2020/01/21
Water consumption 1,956 KL 2,582 KL
Note: The Company is billed for water service every three
months. Data from the last two years are available on the
Water Department website.
ii. Fleet
Maritime waste and wastewater management
follows mainly MARPOL Annex V. MARPOL
Annex V seeks to reduce the amount of garbage
being discharged into the sea from ships and cargo
residues, and prohibits the discharge of wash water
and ballast water containing substances harmful to
the marine environment into the sea.
c. Waste disposal and policy
The fleet divides waste into food waste, waste to be
returned to shore for recycling, plastics, oily rags or
other oily materials and incinerator ashes, and places
them in waste containers of different colors. There is
a standard cabin layout for the containers. Waste
collection takes place on the quarterdeck, and waste
sorting and proper disposal are enforced in individual
cabins.
Unit: m³
Waste item 2020 2019
Plastic waste 619 616
Food waste 81 108
Domestic and work waste 1111 496
Incinerator ashes 25 26
Cargo residues 65 6
Total 1,901 1,252
d. Energy consumption and policy: Considering the
nature of its business, the Company tracks energy
consumption for the fleet and for the headquarters
separately ：
i. Headquarters: The Company leases the office
building in which its headquarters is located. Total
power consumption at the headquarters was
226,145kWh in 2019 and 219,908kWh in 2018.
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Corporate Governance Report 50

Item Yes No
	Yes	No


				Temperature settings in the air conditioning systems are adjusted to reflect seasonal changes and reduce power consumption. ii. Fleet: The fleet follows the Ship Energy Efficiency Management Plan (SEEMP) of IMO and travels at optimized speeds for different voyages in order to save on energy consumption costs for customers and reduce environmentalpollution. Fleet 2020 2019 Self-managed trip 467,067(GJ) 265,275(GJ) Time charter trip 24,171,127(GJ) 18,825,687(GJ)
				Fleet	2020	2019
				Self-managed trip	467,067(GJ)	265,275(GJ)
				Time charter trip	24,171,127(GJ)	18,825,687(GJ)
4. Social (1) Does the company have adequate management policies and procedures in place pursuant to the applicable regulations and the International Bill of Human Rights? (2) Does the company have reasonable remuneration policies in place? Does the company incorporate employee performance evaluation into the CSR policy and establish effective reward and punishment systems? (3) Does the company provide a safe and healthy work environment and organize regular health and safety training for employees? (4) Does the company have in place effective tools to help employees with career planning and development? (5) Does the company comply with the applicable regulations and international conventions regarding marketing and labeling of products and services? Does the company have policies and complaint	Ｖ		(1) Chapter IV of the Corporate Social Responsibility Best Practice Principles states clearly the rules for protecting public interest. Corporate governance, employee remuneration, and bonus and performance management guidelines in compliance with the International Bill of Human Rights and other applicable regulations are in place to ensure basic employee rights are protected. The Company implemented a human rights policy aligned to the vision the International Bill of Human Rights and consistent with practical considerations in the shipping business, and disclosed it on the company website on March 30, 2018. The Wisdom Marine Lines Human Rights Policy complies with the Universal Declaration of Human Rights, the UN Global Compact, the ILO Conventions and other human rights conventions. It treats active employees and contract workers with respect and dignity. The policy prohibits all forms of discrimination; prohibits all forms of forced labor and child labor; does not hinder employees' freedom of association; and adheres strictly to the local labor laws. Regarding the environment, the Company has made a commitment to providing a safe and healthy work environment for employees. It complies with the regulations and improves health and safety in the workplace on an ongoing basis to prevent accidents and reduce occupational hazards in order to protect safety as well as mental and physical health of the employees. The Company ensures the recruitment policy is free of any unfair practices in order to maintain fairness and impartiality in recruitment, benefits and compensation, training, performance evaluation and promotion. The Company also provides adequate, effective grievance mechanisms to address and prevent infringement of employee rights. Meanwhile, the Company works hard to create an equal opportunity workplace free of discrimination and harassment. It installs open communication channels and holds regular employer- employee meetings to protect the rights of both parties.				No material departure

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Item Practices Departure from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and reasons Yes No Summary	Item Practices Departure from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and reasons Yes No Summary	Item Practices Departure from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and reasons Yes No Summary	Item Practices Departure from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and reasons Yes No Summary
	Yes	No

procedures in place to protect consumer rights? (6) Does the company implement supplier management policies to require suppliers observe certain regulations on environmental protection, occupational health and safety, or labor or human rights? If yes, describe the results.			(2) The Company has the Employee Work Rules and Bonus Guidelines in place. Holidays and bonuses are distributed accordingly. In addition, the Employee Welfare Committee provides sports allowances for employees to encourage exercise and a mind-body balance. The Company approves employee pay based on experience, skills, and intended position and not on gender, age, nationality, or race. Employees complete a self- assessment form at the end of each year. Employee performance evaluation is made part of the ethical corporate management and workplace unity objectives in the CSR policy. Pay adjustment takes into account market averages and economic trends. The Remuneration Committee, consisting of independent directors, assists in assessing and overseeing the overall remuneration policy and director and employee pay levels. Given the Company is a primary listed company, employee remuneration is required to comply with local policies where workers are located. The Articles of Incorporation of the subsidiaries, Wisdom Marine International and Well Shipmanagement and Maritime Consultant, state explicitly that "1% of the profit, if any, in the current year shall be allocated to employee compensation. However, a sum shall be set aside in advance to pay down any outstanding cumulative losses." (3) The Company takes the following actions to provide a safe and healthy work environment for employees: a. hold regular health and safety campaigns, firefighting training, and emergency drills. b. require ships undergo regular maintenance and repair as required by law, and raise awareness among the crew in order to create a safe workplace and prevent occupational accidents. c. post 24-hour security guards with supervision and monitoring to protect company property and employee safety. d. raise awareness of the Sexual Harassment Prevention Act, and install appropriate reporting channels. e. In response to the COVID-19 pandemic, the Company is following the government's guidelines. (4) The Company places great emphasis on employee growth and development. It provides a wide range of education and training courses for employees to develop professional training and explore their potential. The Company conducts regular training courses and campaigns. For example, corporate ethics, code of conduct, and other business related courses are provided for new employees during orientation. (5) The Company conducts its business activities in compliance with all applicable laws and international

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Corporate Governance Report 52

		Practices Departure from Corporate
		Item Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and reasons Yes No Summary
		standards. There is a Stakeholders section on the company website that is maintained by a dedicated staff. The section provides a channel for users to send questions and suggestions. (6) The Company evaluates the condition of a supplier's CSR practices and the risks therein and uses the results as a basis for selecting quality suppliers in the future. To ensure that products supplied by a supplier should not have a negative impact on the environment and society, the Company chooses only licensed or qualified suppliers whose products, materials, and production processes meet the regulatory standards.
	5.	Does the company prepare corporate social responsibility reports and other reports that disclose non-financial information by following international reporting standards or guidelines? Does the company obtain third party assurance or certification for the reports above? Ｖ The Company prepares corporate social responsibility reports by following international reporting standards or guidelines, and discloses the reports on the company website. The reports have not received third party certification. No material departure
	6.	Describe the difference, if any, between actual practice and the corporate social responsibility principles, if the company has implemented such principles based on the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies: No difference.
	7.	Other useful information for explaining the status of corporate social responsibility practices:
		(1) The Company implements corporate governance and fulfills corporate social responsibility by following the "Corporate
		Governance Best Practice Principles for TWSE/TPEx Listed Companies" and the "Corporate Social Responsibility Best
		Practice Principles for TWSE/GTSM Listed Companies". A "Corporate Social Responsibility Report" is compiled
		annually to disclose the Company's sustainability strategy and results. For more details, please visit the CSR section of
		the company website.
		(2) The Company pays much attention to its social and environmental responsibility. In addition to following the IMO
		(International Maritime Organization) MARPOL and SOLAS Conventions, the Company has always chosen the most
		advanced facilities when it comes to onboard equipment. All of the Company's ships comply with the latest NOx emission
		standards.

Note 1 ： The principle of materiality refers to those who have a significant impact on the company's investors and other interested parties related to environmental, social and corporate governance issues.

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3.4.8 Ethical corporate management and related measures:

Practices Departure from Ethical Corporate	Practices Departure from Ethical Corporate	Practices Departure from Ethical Corporate	Practices Departure from Ethical Corporate	Practices Departure from Ethical Corporate
Item Yes		No	Management Best Practice Principles for TWSE/TPEx Listed Companies and reasons Summary
1. Establishment of ethical corporate management policy and plans (1) Does the company state in internal regulations and external correspondence its ethical corporate management policy and practices and the commitment of the board of directors and the management to enforcement of the ethical corporate management policy? (2) Does the company have measures in place against unethical conduct? Do these measures provide clearly the operating procedures, code of conduct, disciplinary actions, and appeal procedures, and are they enforced effectively? (3) Does the company take preventive measures in business activities subject to a higher conduct risk as listed under Article 7, Paragraph 2 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies? Ｖ (1) The Company has the Employee Work Rules in place and the Management Department responsible for devising ethical corporate management policies and preventive measures to be implemented by other dedicated units. In addition to the commitment of the board of directors and management to enforce ethical corporate management, the Company has in place a set of well constructed management system that covers accounting and internal control practices. Internal management and external business activities are conducted in strict adherence to the rules. (2) The Company places great emphasis on employee work ethics and integrity. The Employee Work Rules provide the rules to be followed by all employees for effective enforcement of ethical corporate management. (3) The Employee Work Rules provides that employees shall not accept hospitality, gifts, kickbacks, or other illegal gains in the process of performing their duties or in violation of their obligations. No material departure
2. Enforcement of ethical corporate management (1) Does the company assess business partners' records of integrity, and include a moral clause in the contracts with its business partners? (2) Does the company have a unit that supports ethical corporate management practices on a full- time or part-time basis and reports progress to the board of directors on a regular basis? (3) Does the company have a conflict of interest management policy in place, provides adequate reporting channels, and enforce the rules accordingly? (4) Does the company have effective accounting and internal control	Ｖ		(1) The Company conducts business activities with fairness and transparency. Before starting a business relationship, the Company considers the legality of a distributor, supplier, customer, or other counterparty in a transaction and any record of unethical conduct in the past in order to avoid engaging with parties with a record of unethical conduct. (2) A dedicated unit in the Company is responsible for publishing the Employee Work Rules on the corporate bulletin board and presenting regularly internal audit reports to the board of directors. The board of directors should exercise due care and diligence and oversees that the Company stays from unethical conduct in order to maintain ethical corporate management. (3) The Company has the Employee Work Rules in place. The rules provide that employees, without the Company's written consent, shall not operate a business identical or similar to the Company's	No material departure

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Corporate Governance Report 54

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Departure
Practices from Ethical
Corporate
Management
Best Practice
Item Principles
for
Yes No Summary TWSE/TPEx
Listed
Companies
and reasons
systems in place to enforce ethical business for him/herself or any third party.
corporate management? Are the (4) To ensure effective enforcement of ethical
systems audited regularly by the corporate management, the Company has effective
internal audit unit or by outside accounting and internal control systems in place.
accountants? Internal auditors audit compliance in the systems
(5) Does the company provide regular above on a regular basis.
internal and external training on (5) The Company provides training as needed, or
ethical corporate management? utilizes internal open communications, department
meetings, executive communications, and other
appropriate occasions to raise awareness of the
Company's commitment to ethical corporate
management.
3. Whistleblowing system Ｖ (1) The Company has a reporting mailbox No material
(1) Does the company have a well ([email protected]) in place. Only the departure
established whistleblowing and Audit Office is authorized to access the mailbox.
reward system and an accessible Auditors handle reports by following the reporting
reporting channel in place, and procedures. No report has been made in 2018 up to
appoint suitable representatives for the publication date of this annual report.
approaching accused individuals? (2) The Company sets specific time frames for
(2) Does the company have standard responding to and investigating reports as well as
operating procedures in place for confidentiality measures to protect details in the
investigating reports and the reports.
necessary confidentiality (3) Whistleblowing reports are processed by a
measures? dedicated staff in the Audit Office in order to ensure
(3) Does the company take measures whistleblowers do not receive inappropriate
to protect whistleblowers from treatment or retaliation as a result of their reports.
inappropriate treatment or
retaliation?
4. Enhancing information disclosure Ｖ (1) The Company discloses its business philosophy No material
(1) Does the company disclose the and information on the management team on the departure
Ethical Corporate Management company website. Important rules and regulations
Best Practice Principles and its can be found in the dedicated corporate governance
results on the company website and section.
the Market Observation Post
System?
5. Describe the difference, if any, between actual practice and the ethical corporate management principles, if the company has
implemented such principles based on the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed
Companies: No difference.
6. Other useful information for explaining the status of ethical corporate management practices: (e.g. review and amendment
of the company's ethical corporate management principles)
(1) The Board Meeting Procedures provide a recusal procedure for directors with a conflict of interest. Where a director or a
juristic person that the director represents is an interested party in an agenda item, the director shall state key aspects of
such interest in the meeting. When such interest is likely to prejudice the interest of the Company, the director shall not
participate in discussion or voting on the agenda item, and shall recuse him/herself from discussion or voting on the item.
In addition, the director shall not exercise voting right as proxy for another director.
(2) The Company has the Material Insider Information Procedures in place. The procedures require that directors, supervisors,
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Practices Departure from Ethical Corporate	Practices Departure from Ethical Corporate	Practices Departure from Ethical Corporate
Item Yes	No	Management Best Practice Principles for TWSE/TPEx Listed Companies and reasons Summary
managers and employees who have knowledge of material information inside the Company not disclose said material insider information in their knowledge to third parties. The procedures also require that unpublished material insider information acquired during performance of one's duties not be disclosed to third parties. (3) The Employee Work Rules provide explicitly that a. An employee has a duty of confidentiality regarding trade secrets that he/she directly or indirectly receives, comes into contact with, or becomes aware of as part of his/her duties during employment, and are economically valuable and not available to the public. b. Employees, without the Company's prior written consent or not as part of their duties, shall not give, inform, transfer, or leak in any way to any third or outside party any of the aforesaid secrets, or use or make use of such secrets for him/herself or any third party. This rule will remain in effect for two years after termination of employment. c. An employee, without the Company's written consent, shall not, in his/her own name or in the name of a third party, engage in or manage as an employee, contractor, or consultant a company or business in direct competition with the Company or in a similar business with the Company. d. Employees shall not accept hospitality, gifts, kickbacks, or other illegal gains in the process of performing their duties or in violation of their obligations.

3.4.9 For inquiries regarding corporate governance principles and related guidelines:

Please visit http://mops.twse.com.tw or http://www.wisdomlines.com.tw/wisdom/php/contact_cg4.php.

3.4.10 Other useful information for explaining corporate governance practices: None.

3.4.11 Status of implementation of internal control system

Statement on Internal Control Please refer to page 137.

Provide reasons, audit opinions, improvements, and correction of errors where internal controls are audited by outside accountants: None.

3.4.12 Legal penalty against the company or its internal personnel, or any disciplinary penalty

by the company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, the main shortcomings, and condition of improvement.: None.

3.4.13 Major Resolutions of Annual General Meeting and Board Meetings

3.4.13.1 Major Resolutions of Annual General Meeting

Date	Major resolutions Resolutions	Major resolutions Resolutions
2020.05.22	1. 2019 Business Report -
	2. 2019 Business Report -
	3. The Audit Committee Report on the Review	-

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Date Major resolutions Resolutions
of the 2019 Financial Report
4. 2019 Directors’ Remuneration Report. -
Received formal approval for the Secured Bonds
Issue from the Central Bank of the Republic of
China (Taiwan) and the Financial Supervisory
Commission R.O.C. on April 19, 2019 and April
5. First Secured Corporate Bond Issue in 2019 29, 2019 respectively.
Total Amount of the Secured Bonds Issue are NT$
1,385,000,000.
Funds raised from the Secured Bonds Issue had
been fully invested by Q2 2019.
6. Amendments to the Rules of Board
Meetings -
7. Recognition of 2019 Financial Report Recognized and accepted.
8. Recognition of 2019 Dividend Proposal Recognized and accepted.
9. Amendment to Articles of Association Follow the revised Articles of Association
10. Amendments to Procedures for Loan to
Follow the revised Procedures for Loan to Others
Others
11. Amendments to Procedures for Follow the revised Procedures for Endorsement
Endorsement and Guarantee and Guarantee
12. Amendments to the Rules of General
Follow the revised Rules of General Meeting
Meeting
Distributed at NT$1,500 per 1,000 shares, total are
NT$ 1,033,733,841.
13. Distribution of Cash Dividends out of According to the Board of Directors’ resolution on
Capital Reserve May 22, 2020, the Chairman was authorized to
determine July 12, 2020 as the Record Date, and
the date of distribution is July 31, 2020.
For every 1,000 shares, about 25 new shares will
be issued, total are 17,228,897 shares.
14. Capitalization of Capital Reserve by Issuing According to the Board of Directors’ resolution on
New Shares May 22, 2020, the Chairman was authorized to
determine July 12, 2020 as the Record Date, and
the date of distribution is July 31, 2020.
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3.4.13.2 Major Resolutions of Board Meetings

Date Major resolutions	Date Major resolutions
2020.01.20 1. Report of insurance coverage for Directors and Officers Liability 2. The rectification of the 2019 Q4 audit follow-up of previous non-compliances be acknowledged and approved. 3. Approval of 2019 Basic Director Reward 4. Company-Wide Salary Adjustment 5. Approval of 2019 Annual Bonus 6. Convention of 2020 Annual General Meeting 7. Approval of MV Amis Respect Loan Facility 8. Approval of MV Sakizaya Star Loan Facility
2020.02.21	1. Adoption of 2019 Financial Report 2. Amendment to Rules of General Meeting

Date
Major resolutions

2020.01.20
1.
Report of insurance coverage for Directors and Officers Liability
2.
The rectification of the 2019 Q4 audit follow-up of previous non-compliances be
acknowledged and approved.
3.
Approval of 2019 Basic Director Reward
4.
Company-Wide Salary Adjustment
5.
Approval of 2019 Annual Bonus
6.
Convention of 2020 Annual General Meeting
7.
Approval of MV Amis Respect Loan Facility
8.
Approval of MV Sakizaya Star Loan Facility

2020.02.21

1.
Adoption of 2019 Financial Report
2.
Amendment to Rules of General Meeting

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Date Major resolutions
3. Amendment to the Articles of Association
4. Amendment to Rules of Board Meeting
5. Amendment to Audit Committee Charter
6. Amendment to Remuneration Committee Charter
7. Amendment to Procedures for Loan to Others
8. Amendment to Procedures for Endorsement and Guarantee
9. Approval of Mega Bank Refinancing Facility
10. Approval of Intercompany Loan Facilities
1. 2019 Annual Corporate Governance Report
2. Approval of execution of 2019 Internal Control Declaration
3. 2019 Business Report and 2020 Business Plan
4. Budget Review
5. Board of Directors Performance Self-Assessment Report
6. Amendment to Internal Control Procedures
7. 2019 Dividend Proposal
8. 2019 Director Reward
9. Proposed Agenda for Annual General Meeting
10. The Company’s Pandemic Response Plan of COVID-19
11. Incorporation of Wisdom Lines Europe B.V.
2020.03.20 12. Capital Increase of Wisdom Lines Europe B.V.
13. Capital Increase of Wisdom Marine International Inc. and Subscription for New
Shares Issued by Pescadores Investment and Development Inc.
14. Earnings Distribution of Wisdom Panama
15. Extension of Appointment Beyond Retirement Age
16. Resignation and Appointment of Internal Auditor
17. Time Charter: MV Sakizaya Star
18. Time Charter: MV Amis Respect
19. Approval of MV Bunun Miracle Loan Facility
20. Approval of MV Sakizaya Treasure Loan Facility
21. Approval of Intercompany Loan Facilities
22. Approval of Jih Sun International Commercial Bank Loan Facility
1. The rectification of the 2020 Q1 audit follow-up of previous non-compliances be
acknowledged and approved.
2. Adoption of 2020 Q1 Financial Report
3. Extension of Appointment Beyond Retirement Age
2020.04.24
4. Time Charter: MV Sakizaya Leader
5. Approval of MV Clear Horizon Loan Facility
6. Approval of Intercompany Loan Facilities
7. Approval of Bank of Kaohsiung Loan Facility
1. Authorize the Chairman to set the Cash Dividend Declaration Schedule
2. Authorize the Chairman to set the Capitalization of Capital Reserve by Issuing New
Shares Schedule
3. Appointment of Internal Auditor
4. Time Charter: MV Sakizaya Justice
5. Approval of Extension Taiwan Cooperative Bank Syndicated Loan Facility
2020.05.22
6. Approval of Extension MV Daiwan Glory Loan Facility
7. Approval of Extension MV Taikli Loan Facility
8. Approval of Extension MV Blue Horizon Loan Facility
9. Approval of Chang Hwa Bank Loan Facility
10. Approval of Intercompany Loan Facilities
11. Approval of CTBC Bank Loan Facility
1. Capital Increase of Wisdom Panama
2. Amendment to Internal Control Procedures
2020.06.19
3. Whitelist for Discharge of Cargo against LOI
4. Time Charter: MV Sakizaya Glory
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Date Major resolutions
5. Approval of Far Eastern International Bank Loan Facility
6. Approval of Taishin International Bank Loan Facility
7. Approval of Far Eastern International Bank Authorized Limit for Financial
Derivatives
8. Approval of Taishin International Bank: Authorized Limit for Financial Derivatives
1. Time Charter: MV Amis Wisdom VI
2020.06.23 2. Time Charter: MV Naluhu
3. Approval of Hua Nan Commercial Bank Loan to WMI
1. The rectification of the 2020 Q2 audit follow-up of previous non-compliances be
acknowledged and approved.
2. Adoption of 2020 Q2 Financial Report
3. Approval of MV Bunun Hero Refinancing Facility
4. Approval of MV Taikli Refinancing Facility
2020.07.24
5. Approval of MV Amis Victory Loan Facility
6. Amendment to Benefit Transport S.A. Loan Facility
7. Approval of Intercompany Loan Facilities
8. Approval of Hwatai Bank Loan Facility
9. Approval of Sunny Bank Loan Facility
1. Amendments to the Procedures for Endorsement and Guarantee for Wisdom
Panama and its subsidiaries
2. Amendment to Internal Control Procedures
3. Time Charter: MV Bunun Noble
4. Approval of MV Blue Horizon Refinancing Loan Facility
5. Approval of MV Bunun Noble Loan Facility
6. Approval of Benefit Transport S.A. Loan Facility
7. Approval of Intercompany Loan Facilities
2020.08.28 8. Approval of Bank of Panhsin Loan Facility
9. Approval of Mega International Commercial Bank, Central Branch Loan Facility
10. Approval of Mega International Commercial Bank, Chung Shan Branch Loan
Facility
11. Approval of Mega International Commercial Bank, Central Branch Authorized
Limit for Financial Derivatives
12. Approval of Mega International Commercial Bank, Chung Shan Branch Authorized
Limit for Financial Derivatives
13. Approval of Bank SinoPac Authorized Limit for Financial Derivatives
1. Appointment of Convener of the CSR Committee
2. Appointment of Convener of the Safety Management Committee
3. Amendment to Internal Control Procedures
4. Approval of First Commercial Bank Loan Facility
2020.09.25
5. Approval of Bank of Taiwan Loan Facility
6. Approval of EnTie Bank Loan Facility
7. Approval of Taichung Commercial Bank Authorized Limit for Financial
Derivatives
1. The rectification of the 2020 Q3 audit follow-up of previous non-compliances be
acknowledged and approved.
2. Adoption of 2020 Q3 Financial Report
3. Change of CPA from EY
2020.10.30 4. Amendment to Employee Work Rules
5. Amendment to Internal Control Procedures
6. Purchase and Time Charter: LPG Carrier
7. Time Charter: MV Amis Wisdom II
8. Approval of Chang Hwa Bank Loan Facility
2020.11.27 1. Assessment of External Auditor
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Corporate Governance Report 59

Date Major resolutions	Date Major resolutions
2. Assessment of Right-of-Use Assets Acquired from Related Parties 3. Change of Registered Address: Well Shipmanagement and Maritime Consultant Co., Ltd. 4. Approval of Extension of Appointment Beyond Retirement Age 5. Approval of Sale MV Sakizaya Noble 6. Approval of MV Amis Wealth Loan Facility 7. Approval of Taiwan Business Bank Loan Facility 8. Approval of M.H. Success Line S.A. Loan Facility
2020.12.18 1. 2021 Operation Plan and Budget Plan 2. Time Charter: MV Daiwan Fortune 3. Approval of MV Amis Elegance Loan Facility 4. Approval of MV Bunun Orchid Loan Facility 5. Approval of Bank of Taiwan Loan Facility 6. Approval of E. Sun Bank Loan Facility 7. Approval of Intercompany Loan Facilities 8. Approval of Bank of Taiwan: Authorized Limit for Financial Derivatives 9. Approval of E. Sun Bank Authorized Limit for Financial Derivatives
2021.01.29 1. Insurance coverage for Directors and Officers Liability 2. The rectification of the 2020 Q4 audit follow-up of previous non-compliances be acknowledged and approved 3. Approval of 2020 Basic Director Reward 4. Company-Wide Salary Adjustment 5. Approval of 2020 Annual Bonus 6. Approval of Guidelines for Board Performance Evaluation 7. Approval of Amendment to Audit Committee Charter 8. Approval of Amendment to Remuneration Committee Charter 9. Approval of Regulation of Financial and Business Conducts Among Group Companies 10. Approval of Amendment to Rules of General Meeting 11. Approval of Amendment to Rules of Board Meeting 12. Time Charters: MV Amis Power, MV Sakizaya Unicorn, MV Amis Brave, MV Bunun Fortune, MV Amis Wisdom III, MV Bunun Infinity, MV Amis Elegance, MV Bunun Orchid 13. Approval of MV Bunun Respect and MV Jacques Loan Facilities 14. Approval of Intercompany Loan Facilities
2021.02.26 1. Adoption of 2020 Financial Report 2. Convention of Annual General Meeting 3. Time Charter: MV Bunun Respect 4. Time Charter Party Early Termination 5. Approval of MV Sakizaya Unicorn and Sakizaya Victory Loan Facilities 6. Approval of Intercompany Loan Facility
2021.03.26	1. Approval of Company-Wide Salary Adjustment 2. 2020 Annual Corporate Governance Report 3. Approval of execution of 2020 Internal Control Declaration 4. 2020 Business Report and 2021 Business Plan 5. Board of Directors Performance Self-Assessment Report 6. 2020 Director Reward 7. Amendment to Nominating Committee Charter 8. Amendment to Memorandum and Articles of Association 9. 2020 Dividend Proposal 10. Candidates for Election of Directors 11. Waiver of Directors’ Non-Competition Obligation 12. Proposed Agenda for Annual General Meeting 13. Capital Increase of Well Shipmanagement and Maritime consultant Co., Ltd.

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Date Major resolutions
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Date Major resolutions	Date Major resolutions
	14. Subscription of New Shares Issued by Pescadores Investment and Development Inc. 15. Capital Increase of Wisdom Marine International Inc. 16. Impairment: MV Frontier Bonanza, MV Blue Horizon, MV Clear Horizon 17. Extension Beyond Retirement Age 18. Appointment of Chief Engineering Officer 19. Sale: MV Genius Star III 20. Time Charter: MV BLUE HORIZON 21. Time Charter Hire Adjustment: MV Ligulao, MV Taikli 22. Approval of MV Sakizaya Ace Loan Facility 23. Approval of Samurai Investment S.A. Loan Facility 24. Approval of Jih Sun International Commercial Bank Loan Facility

Date
Major resolutions

14.
Subscription of New Shares Issued by Pescadores Investment and Development
Inc.
15.
Capital Increase of Wisdom Marine International Inc.
16.
Impairment: MV Frontier Bonanza, MV Blue Horizon, MV Clear Horizon
17.
Extension Beyond Retirement Age
18.
Appointment of Chief Engineering Officer
19.
Sale: MV Genius Star III
20.
Time Charter: MV BLUE HORIZON
21.
Time Charter Hire Adjustment: MV Ligulao, MV Taikli
22.
Approval of MV Sakizaya Ace Loan Facility
23.
Approval of Samurai Investment S.A. Loan Facility
24.
Approval of Jih Sun International Commercial Bank Loan Facility

3.4.14 Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting to Important Resolutions Passed by the Board of Directors: None.

3.4.15 Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, CEO, and Heads of Accounting, Finance, Internal Audit and R&D

Title	Name	Take office Date	Resignation Date Reason	Resignation Date Reason
Internal Audit	TT Ting	2017.02.13	2020.03.20	Personal reasons

3.5 Information Regarding to the Company’s Audit Fee and Independence

3.5.1 Audit Fee

Accounting Firm	Name of CPA	Name of CPA	Audit Period Remarks	Audit Period Remarks
Ernst & Young, Taiwan	Lin, Li Huang	Fuh, Wen Fun	2020.1.1-2020.12.31	None

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2020
Fee Items
Non-Audit Fee
Audit Fee Total
Fee Range (Note 1)
1 Under NT$ 2,000,000 190 190
2 NT$2,000,001 ~ NT$4,000,000
3 NT$4,000,001 ~ NT$6,000,000 5,690 5,690
4 NT$6,000,001 ~ NT$8,000,000
5 Over NT$8,000,000
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Note1 ： The non-audit fee pay to Ernst & Young, Taiwan total NT$190,217 is the fee of capital verification report NT$50,110 and Capitalization of Capital Reserve by Issuing New Shares report NT$140,107.

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3.5.3 Assessment of External Auditor’s Independence

The Audit Committee evaluate external auditor’s independence once a year and report to the Board of Directors. The evaluations are as the following ：

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Evaluate Result Independence
The CPA do not have financial advantage with the Company directly or indirectly. Yes Yes
The CPA do not have loan facility or loan guarantee with the Company’s directors. Yes Yes
The CPA do not have business relationship and potential employment with the Yes Yes
Company.
The CPA and the audit team were not the Company’s directors, managers or anyone can Yes Yes
influence the audit engagement in recent two years.
The CPA do not provide services that the non-audit services influence the results of the Yes Yes
audit services.
The CPA do not have the Company’s issued stock or other securities. Yes Yes
The CPA is not the Company’s defender or representative of assisting the third-parties’ Yes Yes
conflicting.
The CPA do not have relationship with the Company’s directors, managers or anyone Yes Yes
can influence the audit engagement.
The CPA’s independence declaration. Yes Yes
Ensure the CPA rotates every seven years. Yes Yes
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3.6 Replacement of CPA

3.6.1 Regarding the former accountants

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Date of replacement Approved by the Board of Directors on November 29, 2019.
In compliance with relevant regulatory requirements on rotation, the current engagement
Reason of replacement and
partner Lin, Li Huang and Fuh, Wen Fun will be replaced by Lin, Li Huang and Lu, Chian
explanation
Uen.
Parties
CPA The Company
Statement on whether the Company
or the accountant terminate or not Contracting Condition
accept the appointment
Voluntarily terminated the appointment (Not applicable) (Not applicable)
Not accept (continuing) the appointment (Not applicable) (Not applicable)
The opinions and reasons in audit
reports other than unqualified None
opinion in the last two years
Accounting principles or practices
Disclosure of financial statements
Yes
Scope or procedure of auditing
Different opinions with the issuer
Other
None V
Statement
Other disclosed items (Matters
which shall be disclosed pursuant to
Subsubparagraph 4~7, Subparagraph None
1, Paragraph 6, Article 10 of the
Regulation)
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3.6.2 Regarding the successor accountant

Name of the accounting firm	Ernst & Young, Taiwan
Name of the accountants	Lin, Li Huang and Lu, Chian Uen
Date of appointment	Approved by the Board of Directors on November 29, 2019.
The accounting treatment of particular transactions before appointment or accounting principle and the consulting matters and their results for the possible opinions signed and issued in the financial report	Not applicable
The succeeding on the accountant's different issues opinions in written from the former accountant	Not applicable

3.6.3 The former accountant's reply toward the Sub-subparagraph of 2-3, Subparagraph 1, Paragraph 5, Article 10 of the Regulation:Not applicable.

3.7 The Company’s Chairman, Chief Executive Officer, Chief Financial Officer, and managers in charge of its finance and accounting operations did not hold any positions in the Company’s independent auditing firm or its affiliates during 2020.

3.8 Transfer & pledge of stock equity by directors, supervisors, managerial officers and holders of 10% or more of company shares

3.8.1 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

Units: Share

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2019 2020 2021 until to publish date
Shareholding Pledge Shareholding Pledge Shareholding Pledge
Title Name
Increase Increase Increase Increase Increase Increase
（ Decrease ）（ Decrease ）（ Decrease ）（ Decrease ）（ Decrease ）（ Decrease ）
Independence
Chiu, Yung-Ho 0 0 0 0 0 0
Director
Independence
Liu, Tsai-Ching 0 0 0 0 0 0
Director
President Cheng, Chun-Sheng 0 0 6,270 0 0 0
Chief Financial Officer Bruce Hsueh 0 0 7,995 0 0 0
Chief Technical Officer Tsaur, Shuang-Chau 0 0 0 0 c 0
Assistant Vice
President, Scott Chang 33,020 0 31,489 0 0 0
ISM Department
Assistant Vice
President, Max Chen 50,371 0 (8,023) 0 0 0
Technical Department
Assistant Vice
President, Supply Joe Hsu 20,000 0 10,708 0 0 0
Department
Assistant Vice
President of Finance Lina Hung 40,000 0 7,103 0 0 0
Dept.
Chief Engineering Wang, Shing-Hwa
Not Applicable Not Applicable 0 0
Officer (Note 1)
TT Ting
Internal Auditor 5,000 0 Not Applicable Not Applicable
(Note 2)
Mandy Lin
Internal Auditor Not Applicable 5,307 0 0 0
(Note 2)
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Note 1 ： Wang, Shing-Hwa taked office at 2021.04.01. Note 2 ： TT Ting resigned at 2020.03.20. Mandy Lin taked office at 2020.03.20.

3.8.1.1 Shares Trading with Related Parties: None.

3.8.1.2 Shares Pledge with Related Parties: None.

3.9 Information on relationships among the top ten shareholders

23 March 2021 （ Book Closing Date ）； Unit ： share ； %

Item Name Current Shareholding Shares %	Item Name Current Shareholding Shares %	Current Shareholding	Current Shareholding	Spouse’s/minor’s Shareholding	Spouse’s/minor’s Shareholding	Shareholding by Nominee Arrangement Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Shareholding by Nominee Arrangement Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Shareholding by Nominee Arrangement Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Shareholding by Nominee Arrangement Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees
		Shares	%	Shares	%	Shares	%	Name Relationship
1	Lan, Chun-Sheng	202,478,349	27.13%	3,415,785	0.46%	-	-	Pescadores、 Hui Wen、 Jingui	Please refer to the following.

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Name and Relationship
Shareholding Between the Company’s
Spouse’s/minor’s
Current Shareholding by Nominee Top Ten Shareholders, or
Item Name Shareholding Arrangement Spouses or Relatives Within
Two Degrees
Shares % Shares % Shares % Name Relationship
Pescadores
Merchandise Co., 52,185,814 6.99% - - - - Lan, Chun- Director
Sheng
Ltd.
2
Representative: 408,994 0.05% - - - - - -
Chen, Huang-Ming
Unicorn Marine
37,208,672 4.99% - - - - - -
Agency Co., Ltd.
3
Representative: Liu, Han Yang - - - - - - - -
Hui Wen Investment
28,459,047 3.81% - - - - - -
Co., Ltd.
4
Second-
Representative: Lan, 3,662,596 0.49% - - - - Lan, Chun- degree
Mei-Chou Sheng
relatives
Song Ying
Transportation Co., 13,132,373 1.76% - - - - - -
Ltd
5
Representative: Gao, Qin Long - - - - - - - -
Jingui Investment 6,834,425 0.92% - - - - - -
Co., Ltd.
6
Second-
Representative: Lan, 3,662,596 0.49% - - - - Lan, Chun- degree
Mei-Chou Sheng
relatives
JPMorgan Chase
Bank N.A., Taipei
Branch in custody
7 for Vanguard Total 6,295,155 0.84% - - - - - -
International Stock
Index Fund, a series
of Vanguard Star
Funds
8 Luo, Ming-Ren 6,295,155 0.84% - - - - - -
FocalTech Systems 5,000,000 0.67% - - - - - -
Co., Ltd.
9
Representative: Genda Hu - - - - - - - -
VANGUARD
EMERGING
10 MARKETS STOCK 4,829,487 0.65% - - - - - -
INDEX FUND, A
SERIES OF
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Corporate Governance Report

Item Name Current Shareholding Shares %	Item Name Current Shareholding Shares %	Current Shareholding	Current Shareholding	Spouse’s/minor’s Shareholding	Spouse’s/minor’s Shareholding	Shareholding by Nominee Arrangement Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Shareholding by Nominee Arrangement Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Shareholding by Nominee Arrangement Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Shareholding by Nominee Arrangement Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees
		Shares	%	Shares	%	Shares	%	Name Relationship
	VANGUARD INTERNATIONAL EQUITY INDEX FUNDS

3.10 Ownership of Shares in Affiliated Enterprises

31 December 2020, Unit ： share ； %

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Investment by directors,
supervisors, managers,
Investment by the Company Combined investment
Shift in investment direct or indirect control
groups
Shares % Shares % Shares %
Wisdom Marine International Inc. 67,800,000 100% - - 67,800,000 100%
- -
Well Shipmanagement and Maritine
2,300,000 100% 2,300,000 100%
Consultant Co., Limited
Wisdom Lines Europe B.V. - 100% - - - 100%
Pescadores Investment and Development Inc. 51,200,000 40% 1,230,000 1% 52,430,000 41%
Wisdom Marine Lines S.A. 517,947 100% - - 517,947 100%
Adixi Wisdom S.A. 100 100% - - 100 100%
Amis Carriers S.A. 100 100% - - 100 100%
Amis Elegance S.A. 100 100% - - 100 100%
Amis Fortune S.A. 100 100% - - 100 100%
Amis Hero S.A. 100 100% - - 100 100%
Amis Integrity S.A. 100 100% - - 100 100%
Amis International S.A. 100 100% - - 100 100%
Amis Justice S.A. 100 100% - - 100 100%
Amis Mariner S.A. 100 100% - - 100 100%
Amis Miracle S.A. 100 100% - - 100 100%
Amis Nature Inc. 100 100% - - 100 100%
Amis Navigation S.A. 100 100% - - 100 100%
Amis Star S.A. 100 100% - - 100 100%
Amis Victory S.A. 100 100% - - 100 100%
Amis Wisdom S.A. 100 100% - - 100 100%
Arikun Wisdom S.A. 100 100% - - 100 100%
Atayal Brave S.A. 100 100% - - 100 100%
Atayal Mariner S.A. 100 100% - - 100 100%
Atayal Star S.A. 100 100% - - 100 100%
Atayal Wisdom S.A. 100 100% - - 100 100%
Babuza Wisdom S.A. 100 100% - - 100 100%
Beagle Marine S.A. 100 100% - - 100 100%
Beagle Wisdom S.A. 35,000 100% - - 35,000 100%
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Corporate Governance Report 66

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Investment by directors,
supervisors, managers,
Investment by the Company Combined investment
Shift in investment direct or indirect control
groups
Shares % Shares % Shares %
Bunun Brave S.A. 100 100% - - 100 100%
Bunun Champion S.A. 100 100% - - 100 100%
Bunun Dynasty S.A. 100 100% - - 100 100%
Bunun Elegance S.A. 100 100% - - 100 100%
Bunun Fortune S.A. 100 100% - - 100 100%
Bunun Hero S.A. 100 100% - - 100 100%
Bunun Infinity S.A. 100 100% - - 100 100%
Bunun Justice S.A. 100 100% - - 100 100%
Bunun Marine S.A. 100 100% - - 100 100%
Bunun Navigation S.A. 100 100% - - 100 100%
Bunun Noble Inc. 100 100% - - 100 100%
Bunun Wisdom S.A. 100 100% - - 100 100%
Cosmic Wisdom S.A. 100 100% - - 100 100%
Daiwan Champion S.A. 100 100% - - 100 100%
Daiwan Dolphin S.A. 100 100% - - 100 100%
Daiwan Elegance S.A. 100 100% - - 100 100%
Daiwan Fortune S.A. 100 100% - - 100 100%
Daiwan Glory S.A. 100 100% - - 100 100%
Daiwan Hero S.A. 100 100% - - 100 100%
Daiwan Infinity S.A. 100 100% - - 100 100%
Daiwan Justice S.A. 100 100% - - 100 100%
Daiwan Kalon S.A. 100 100% - - 100 100%
Daiwan Leader S.A. 100 100% - - 100 100%
Daiwan Miracle S.A. 100 100% - - 100 100%
Dumun Marine S.A. 100 100% - - 100 100%
Dumun Navigation S.A. 100 100% - - 100 100%
Elite Steamship S.A. 100 100% - - 100 100%
Euroasia Investment S.A. 100 100% - - 100 100%
Favoran Wisdom S.A. 100 100% - - 100 100%
Fourseas Maritime S.A. Panama 100 100% - - 100 100%
Fraternity Marine S.A. 100 100% - - 100 100%
Fraternity Ship Investment S.A. 100 100% - - 100 100%
Genius Marine S.A. 100 100% - - 100 100%
Genius Prince S.A. 100 100% - - 100 100%
Genius Star Carriers S.A. 100 100% - - 100 100%
Genius Star Navigation S.A. 100 100% - - 100 100%
GS Global S.A. 100 100% - - 100 100%
GS Navigation S.A. 100 100% - - 100 100%
GSX Maritime S.A. 100 100% - - 100 100%
Guma Marine S.A. 100 100% - - 100 100%
Guma Navigation S.A. 100 100% - - 100 100%
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Corporate Governance Report 67

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Investment by directors,
supervisors, managers,
Investment by the Company Combined investment
Shift in investment direct or indirect control
groups
Shares % Shares % Shares %
Harmony Pescadores S.A.(Panama) 100 100% - - 100 100%
Harmony Transport S.A. 100 100% - - 100 100%
Hoanya Wisdom S.A. 100 100% - - 100 100%
Infinite Wisdom S.A. 100 100% - - 100 100%
Katagalan Carriers S.A. 100 100% - - 100 100%
Katagalan Line S.A. 100 100% - - 100 100%
Katagalan Marine S.A. 100 100% - - 100 100%
Katagalan Navigation S.A. 100 100% - - 100 100%
Katagalan Star S.A. 100 100% - - 100 100%
Katagalan Wisdom S.A. 100 100% - - 100 100%
Kavalan Wisdom S.A. 100 100% - - 100 100%
Ligulao Wisdom S.A. 100 100% - - 100 100%
Lloa Wisdom S.A. 100 100% - - 100 100%
Log Wisdom S.A. 100 100% - - 100 100%
Luilang Wisdom S.A. 100 100% - - 100 100%
Magnate Maritime S.A. 100 100% - - 100 100%
Makatao Wisdom S.A. 100 100% - - 100 100%
Mercy Marine Line S.A. 100 100% - - 100 100%
Mighty Maritime S.A. 100 100% - - 100 100%
Mimasaka Investment S.A. 100 100% - - 100 100%
Mount Wisdom S.A. 100 100% - - 100 100%
Paiwan Wisdom S.A. 100 100% - - 100 100%
Papora Wisdom S.A. 100 100% - - 100 100%
Pazeh Wisdom S.A. 100 100% - - 100 100%
Pescadores International Line S.A. 100 100% - - 100 100%
Poavosa International S.A. 100 100% - - 100 100%
Poavosa Maritime S.A. 100 100% - - 100 100%
Poavosa Navigation S.A. 100 100% - - 100 100%
Poavosa Wisdom S.A. 100 100% - - 100 100%
Rukai Maritime S.A. 100 100% - - 100 100%
Sakizaya Diamond S.A. 100 100% - - 100 100%
Sakizaya Fortune S.A. 100 100% - - 100 100%
Sakizaya Glory S.A. 100 100% - - 100 100%
Sakizaya Hero S.A. 100 100% - - 100 100%
Sakizaya Integrity S.A. 100 100% - - 100 100%
Sakizaya Justice S.A. 100 100% - - 100 100%
Sakizaya Kalon S.A. 100 100% - - 100 100%
Sakizaya Leader S.A. 100 100% - - 100 100%
Sakizaya Line S.A. 100 100% - - 100 100%
Sakizaya Marine S.A. 100 100% - - 100 100%
Sakizaya Miracle S.A. 100 100% - - 100 100%
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Corporate Governance Report 68

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Investment by directors,
supervisors, managers,
Investment by the Company Combined investment
Shift in investment direct or indirect control
groups
Shares % Shares % Shares %
Sakizaya Navigation S.A. 100 100% - - 100 100%
Sakizaya Orchid S.A. 100 100% - - 100 100%
Sakizaya Power S.A. 100 100% - - 100 100%
Sakizaya Queen S.A. 100 100% - - 100 100%
Sakizaya Respect S.A. 100 100% - - 100 100%
Sakizaya Unicorn S.A. 100 100% - - 100 100%
Sakizaya Victory S.A. 100 100% - - 100 100%
Sakizaya Wisdom S.A. 100 100% - - 100 100%
Sao Wisdom S.A. 100 100% - - 100 100%
Saysiat Wisdom S.A. 100 100% - - 100 100%
Siraya Wisdom S.A. 100 100% - - 100 100%
Taivoan Wisdom S.A. 100 100% - - 100 100%
Tao Ace S.A. 100 100% - - 100 100%
Tao Brave S.A. 100 100% - - 100 100%
Tao Mariner S.A. 100 100% - - 100 100%
Tao Star S.A. 100 100% - - 100 100%
Tao Treasure S.A. 100 100% - - 100 100%
Taokas Marine S.A. 100 100% - - 100 100%
Taokas Navigation S.A. 100 100% - - 100 100%
Taokas Wisdom S.A. 100 100% - - 100 100%
Taroko Maritime S.A. 100 100% - - 100 100%
Taroko Wisdom S.A. 200 100% - - 200 100%
Triumph Wisdom S.A. 100 100% - - 100 100%
Trobian Wisdom S.A. 100 100% - - 100 100%
Unicorn Bravo S.A. 100 100% - - 100 100%
Unicorn Fortune S.A. 100 100% - - 100 100%
Unicorn Logger S.A. 100 100% - - 100 100%
Unicorn Logistics S.A. 100 100% - - 100 100%
Unicorn Marine S.A. 100 100% - - 100 100%
Unicorn Pescadores S.A. 100 100% - - 100 100%
Unicorn Successor S.A. 100 100% - - 100 100%
Vayi Wisdom S.A. 100 100% - - 100 100%
Winsome Wisdom S.A. 100 100% - - 100 100%
Wisdom Ace S.A. 100 100% - - 100 100%
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Corporate Governance Report

4. Funding Activities

4.1 Capital and Share Capital

4.1.1 Sources of Share Capital

Record date: Same as publication date for this annual report

Authorized share capital (equity)	Authorized share capital (equity)	Authorized share capital (equity)	Authorized share capital (equity)	Authorized share capital (equity)
Type of shares Outstanding shares		Notes Unissued shares Total
Registered common shares	746,409,199	133,590,801	880,000,000	N/A

Unit: TWD

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Authorized share capital Paid-in capital Notes
Shares
Number of Number of
Month Issue acquired
shares shares
/ Year price Amount Amount Sources of Share Capital by non- Other
(thousand (thousand
cash
shares) shares)
assets
2008.10 10 330,000 3,300,000,000 1 10 Note 1 - -
2009.01 10 330,000 3,300,000,000 200,000 2,000,000,000 2 million shares in transfer of equity - Note 2
2009.06 10 330,000 3,300,000,000 220,000 2,200,000,000 [20 million shares in capitalization of ] - Note 3
capital surplus
2010.03 42.50 330,000 3,300,000,000 250,000 2,500,000,000 30 million shares in cash issue - Note 4
2010.08 10 330,000 3,300,000,000 275,000 2,750,000,000 25 million shares in capitalization of profits - Note 5
2010.12 38 330,000 3,300,000,000 305,000 3,050,000,000 [30 million shares in cash issue for public ] - Note 6
listing
2011.02 10 500,000 5,000,000,000 305,000 3,050,000,000 Note 7 - -
2011.08 10 500,000 5,000,000,000 335,500 3,355,000,000 [30.5 million shares in capitalization of ] - Note 8
capital surplus
2011.11 37 500,000 5,000,000,000 358,000 3,580,000,000 22.5 million shares in cash issue - Note 9
10,661,000 shares in capitalization of first
2012.08 40.36 500,000 5,000,000,000 368,661 3,686,605,170 issue of international unsecured convertible - Note 10
corporate bond
2012.08 10 500,000 5,000,000,000 404,461 4,044,605,170 [35.8 million shares in capitalization of ] - Note 11
capital surplus
2013.03 10 600,000 6,000,000,000 404,461 4,044,605,170 Note 12 - -
2013.09 10 600,000 6,000,000,000 424,221 4,242,206,340 [19,760,117 shares in capitalization of ] - Note 13
capital surplus
2013.11 32.12 600,000 6,000,000,000 460,221 4,602,206,340 [36 million global depository receipts by ] - Note 14
cash issue
45,365,985 shares in capitalization of first
2014.04 10 600,000 6,000,000,000 505,587 5,055,866,190 overseas issue of unsecured convertible - Note 15
corporate bond
2014.08 10 600,000 6,000,000,000 516,864 5,168,643,490 [11,277,730 shares in capitalization of ] - Note 16
capital surplus
2015.05 10 880,000 8,800,000,000 516,864 5,168,643,490 Note 17 - -
2016.11 28 880,000 8,800,000,000 556,864 5,568,643,490 40 million shares in cash issue - Note 18
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Funding Activities

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Authorized share capital Paid-in capital Notes
Shares
Number of Number of
Month Issue acquired
shares shares
/ Year price Amount Amount Sources of Share Capital by non- Other
(thousand (thousand
cash
shares) shares)
assets
2017.08 10 880,000 8,800,000,000 584,708 5,847,075,660 27,843,217 shares in capitalization of Note 19
capital surplus
2017.11 23.5 880,000 8,800,000,000 616,708 6,167,075,660 32 million shares in cash issue Note 20
3,412 shares in capitalization of third issue
2018.08 10 880,000 8,800,000,000 616,711 6,167,109,780 of domestic unsecured convertible Note 21
corporate bond in the Republic of China
1,462,805 shares in 2018 Q3 capitalization
of third issue of domestic unsecured
2018.10 10 880,000 8,800,000,000 618,174 6,181,737,830 Note 22
convertible corporate bond in the Republic
of China
11,631,711 shares in 2018 Q4
capitalization of third issue of domestic
2019.01 10 880,000 8,800,000,000 629,805 6,298,054,940 Note 23
unsecured convertible corporate bond in
the Republic of China
6,388,674 shares in 2019 Q1 capitalization
of third issue of domestic unsecured
2019.03 10 880,000 8,800,000,000 636,194 6,361,941,680 Note 24
convertible corporate bond in the Republic
of China
2019.07 10 880,000 8,800,000,000 640,703 6,407,029,670 4,508,799 shares in 2019 Q2 capitalization - Note 25
of third issue of domestic unsecured
convertible corporate bond in the Republic
of China
2019.10 10 880,000 8,800,000,000 648,656 6,486,559,030 7,952,936 shares in 2019 Q3 capitalization - Note 26
of third issue of domestic unsecured
convertible corporate bond in the Republic
of China and second issue of domestic
secured convertible corporate bond in the
Republic of China
2019.10 27.4 880,000 8,800,000,000 688,656 6,886,559,030 40 million shares in cash issue - Note 27
2019.12 10 880,000 8,800,000,000 689,107 6,891,073,870 451,484 shares in 2019 Q4 capitalization of - Note 28
third issue of domestic unsecured
convertible corporate bond in the Republic
of China
2020.03 10 880,000 8,800,000,000 689,156 6,891,558,940 48,507 shares in 2020 Q1 capitalization of - Note 29
third issue of domestic unsecured
convertible corporate bond in the Republic
of China
2020.06 21.3 880,000 8,800,000,000 729,156 7,291,558,940 40 million shares in cash issue - Note 30
2020.07 10 880,000 8,800,000,000 746,385 7,463,847,910 17,228,897 shares in capitalization of - Note 31
capital surplus
2020.08 10 880,000 8,800,000,000 746,405 7,464,051,990 20,408 shares in 2020 Q3 capitalization of - Note 32
third issue of domestic unsecured
convertible corporate bond in the Republic
of China
2020.10 10 880,000 8,800,000,000 746,406 7,464,091,990 4,000 shares in 2020 Q4 capitalization of - Note 33
second issue of domestic unsecured
convertible corporate bond in the Republic
of China
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Funding Activities 71

Note 1: Share capital of the Company at establishment.
Note 2: In January 2009, the Company entered into a share transfer agreement with Chairman James Lan to transfer a 100% stake in Wisdom Marine Lines S.A. to the Company in exchange for all shares in the Company.
Note 3: On June 15, 2009, the Board of Directors approved capitalization of capital surplus. Note 4: On February 8, 2010, the annual general meeting passed a resolution for cash issue. The cash issue was approved by the Financial Supervisory Commission of the Executive Yuan in the FSC Letter Jin-Guan-Zheng-Fa No.0990001895 dated January 27, 2010.
Note 5: On June 28, 2010, the annual general meeting passed a resolution for capitalization of profits. The transaction was approved by the GreTai Securities Market in the Letter Gre-Tai-Shen No.0990020530 dated August 24, 2010.
Note 6: On December 1, 2010, the Company became listed and offered a cash issue. The cash issue was approved by the Financial Supervisory Commission of the Executive Yuan in the FSC Letter Jin-Guan-Zheng-Fa No.0990060322 dated November 4, 2010.
Note 7: On February 14, 2011, the annual general meeting passed a resolution to increase the registered capital. Note 8: On June 17, 2011, the annual general meeting passed a resolution for capitalization of capital surplus. The transaction was approved by the Taiwan Stock Exchange in the Letter Taiwan-Stock-Shang-2-1000027556 dated August 24, 2011.
Note 9: On June 17, 2011, the Board of Directors passed a resolution for cash issue to issue new shares on November 1, 2011. The cash issue was approved by the Financial Supervisory Commission of the Executive Yuan in the FSC Letter Jin-Guan-Zheng-Fa No.1000034377 dated August 9, 2011.
Note 10: First conversion of convertible corporate bonds to common shares on August 20, 2012. Note 11: On June 29, 2011, the annual general meeting passed a resolution for capitalization of capital surplus. The transaction was completed on August 31, 2012 and approved by the Taiwan Stock Exchange in the Letter Taiwan-Stock-Shang-2-10100186331 dated August 23, 2012.
Note 12: On March 22, 2013, the annual general meeting passed a resolution to increase the registered capital. Note 13: On June 21, 2013, the annual general meeting passed a resolution for capitalization of capital surplus. The transaction was completed on September 11, 2013 and approved by the Taiwan Stock Exchange in the Letter Taiwan-Stock-Shang-2-1020017412 dated September 2, 2013.
Note 14: On July 26, 2013, the Board of Directors passed a resolution to issue global depository receipts by cash issue and to issue the new shares on November 8, 2013. The cash issue was approved by the Financial Supervisory Commission of the Executive Yuan in the FSC Letter Jin-GuanZheng-Fa No.1020016320 dated May 15, 2013.
Note 15: First conversion of overseas convertible corporate bonds to common shares on April 18, 2014. Note 16: On June 27, 2014, the annual general meeting passed a resolution for capitalization of capital surplus. The transaction was completed on August 21, 2014 and approved by the Taiwan Stock Exchange in the Letter Taiwan-Stock-Shang-2-1030016561 dated August 12, 2014.
Note 17: On May 29, 2015, the annual general meeting passed a resolution to increase the registered capital. Note 18: On July 29, 2016, the Board of Directors passed a resolution for cash issue to issue new shares on November 2, 2016. The cash issue came into effect by the Financial Supervisory Commission of the Executive Yuan in the FSC Letter Jin-Guan-Zheng-Fa No.1050035665 dated September 8, 2016.
Note 19: On June 23, 2017, the annual general meeting passed a resolution for capitalization of capital surplus. The transaction was completed on August 25, 2017 and approved by the Taiwan Stock Exchange on August 21, 2016.
Note 20: On July 28, 2017, the Board of Directors passed a resolution for cash issue to issue new shares on November 8, 2017. The cash issue came into effect by the Financial Supervisory Commission of the Executive Yuan in the FSC Letter Jin-Guan-Zheng-Fa No.1060034373 dated September 8, 2017.
Note 21: First conversion of third issue of domestic unsecured convertible corporate bond in the Republic of China to common shares on August 3, 2018.
Note 22: 2018 Q3 conversion of third issue of domestic unsecured convertible corporate bond in the Republic of China to 1,466,217 common shares (including 3,412 shares from first conversion on August 3, 2018) on October 2, 2018.
Note 23: 2018 Q4 conversion of third issue of domestic unsecured convertible corporate bond in the Republic of China to 11,631,711 common shares on January 2, 2019.
Note 24: 2019 Q1 conversion of third issue of domestic unsecured convertible corporate bond in the Republic of China to 6,388,674 common shares on March 19, 2019.
Note 25: 2019 Q2 conversion of third issue of domestic unsecured convertible corporate bond in the Republic of China to 4,508,799 common shares on July 2, 2019.
Note 26: 2019 Q3 conversion of third issue of domestic unsecured convertible corporate bond in the Republic of China to 101,814 common shares.and conversion of third issue of domestic unsecured convertible corporate bond in the Republic of China to 7,851,122 common shares on October 3, 2019.
Note 27: On July 26, 2019, the Board of Directors passed a resolution for cash issue to issue new shares on October 3, 2019. The cash issue came into effect by the Financial Supervisory Commission of the Executive Yuan in the FSC Letter Jin-Guan-Zheng-Fa No. 1080329987 dated October 10, 2019.
Note 28: 2019 Q4 conversion of third issue of domestic unsecured convertible corporate bond in the Republic of China to 451,484 common shares. Note 29: 2020 Q1 conversion of third issue of domestic unsecured convertible corporate bond in the Republic of China to 48,507 common shares on March 24, 2020.
Note 30: On December 13, 2019, the Board of Directors passed a resolution for cash issue to issue new shares on June 8, 2020. The cash issue came into effect by the Financial Supervisory Commission of the Executive Yuan in the FSC Letter Jin-Guan-Zheng-Fa No. 1080341719 dated January 9, 2020.
Note 31: On May 22, 2020, the annual general meeting passed a resolution for capitalization of capital surplus. The transaction was completed on July 31, 2020 and approved by the Taiwan Stock Exchange on July 22, 2020.
Note 32: 2020 Q3 conversion of third issue of domestic unsecured convertible corporate bond in the Republic of China to 20,408 common shares. Note 33: 2020 Q4 conversion of second issue of domestic unsecured convertible corporate bond in the Republic of China to 4,000 common shares.

4.1.2 Shelf Registration Information

N/A.

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Funding Activities

4.1.3 Shareholders

March 23, 2021 (book closure date)

Shareholders Quantity	Government agencies	Financial institutions	Other corporations	Individuals	Foreign institutions and foreigners Total	Foreign institutions and foreigners Total
Number of people 0 10 123 22,740 129 23,002
Number of shares 0 3,670,655 164,177,255 519,307,500 59,253,789 746,409,199
Shareholding percentage	0.00%	0.49%	22.00%	69.57%	7.94%	100.00%

Note: The table is based on the numbers of shares recorded in the shareholder register on the last book closure date, on which there was a total of 746,409,199 outstanding shares. Shareholding by Chinese investors: Not applicable as no Chinese investors hold shares in the Company.

4.1.4 Shareholding Distribution

March 23, 2021 (book closure date)

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Shareholding range (shares) Number of shareholders Number of shares Shareholding percentage
1 to 999 4,725 839,255 0.11%
1,000 to 5,000 10,653 22,379,817 3.00%
5,001 to 10,000 2,805 19,734,686 2.64%
10,001 to 15,000 1,410 16,652,372 2.23%
15,001 to 20,000 675 11,828,503 1.58%
20,001 to 30,000 819 19,832,661 2.66%
30,001 to 50,000 698 26,700,620 3.58%
50,001 to 100,000 585 40,471,105 5.42%
100,001 to 200,000 343 46,596,511 6.24%
200,001 to 400,000 161 43,049,458 5.77%
400,001 to 600,000 41 19,978,857 2.68%
600,001 to 800,000 23 15,881,274 2.13%
800,001 to 1,000,000 8 7,141,956 0.96%
1,000,001 or more 56 455,322,124 61.00%
Total 23,002 746,409,199 100.00%
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Note: The table is based on the numbers of shares recorded in the shareholder register on the last book closure date, on which there was a total of 746,409,199 outstanding shares. Distribution of preferred shares: Not applicable as the Company has not issued any preferred shares.

4.1.5 Principal Shareholders

March 23, 2021 (book closure date)

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Shares Shareholding
Number of shares
Name of principal shareholders percentage
Lan, Chun-Sheng 202,478,349 27.13%
Pescadores Merchandise Co.,Ltd. 52,185,814 6.99%
Unicorn Marine Agency Co., Ltd. 37,208,672 4.99%
Hui Wen Investment Co., Ltd. 28,459,047 3.81%
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Funding Activities

Shares Name of principal shareholders	Number of shares Shareholding percentage	Number of shares Shareholding percentage
Song Ying Transportation Co.,Ltd 13,132,373 1.76%
Jingui Investment Co., Ltd. 6,834,425 0.92%
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds 6,295,155 0.84%
Luo, Ming-Ren 5,748,245 0.77%
FocalTech Systems Co., Ltd. 5,000,000 0.67%
VANGUARD EMERGING MARKETS STOCK INDEX FUND, A SERIES OF VANGUARD INTERNATIONAL EQUITY INDEX FUNDS	4,829,487	0.65%

Note: The table is based on the numbers of shares recorded in the shareholder register on the last book closure date, on which there was a total of 746,409,199 outstanding shares.

4.1.6 Stock Price, Net Worth, Earnings, Dividends, and Related Information for Last 2 Years

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Unit: TWD; 000 shares
Year 2021/1/1 至
2019 2020
Item 2021/3/26
Highest 35.80 29.65 32.95
Stock price Lowest 28.55 19.35 23.80
Average 30.26 23.72 27.07
Before distribution 42.52 35.50
Net worth per
share
After distribution (Note 1) 41.02 34.50
Weighted average shares 665,329 729,330
Earnings per share before
Earnings per 3.30 0.15
share retrospective adjustments
As of the
Earnings per share after
3.24 0.12 publishing date
retrospective adjustments of the annual
Cash dividend 1.50 1.00 report, 2021
financial data
Surplus dividend - - has not been
Dividend per Stock
reviewed by the
share dividend Capital surplus 0.25 - CPA.
dividend
Accumulated unpaid dividend - -
P/E ratio 8.95 158.13
Return
P/D ratio 20.17 23.72
analysis
Cash dividend yield 4.96% 4.22%
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Note 1: To be provided according to the distribution resolutions of the annual general meeting in the following year. Note 2: The 2020 distribution proposal has been passed by the Board of Directors on March 26, 2021, and is pending approval of the annual general meeting on May 21, 2021.

Note 3: P/E (price to earnings) ratio = average closing price for the year / earnings per share.

Note 4: P/D (price to dividend) ratio = average closing price for the year / cash dividend

Note 5: Cash dividend yield = cash dividends / average closing price for the year.

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Funding Activities

4.1.7 Dividend Policy and Execution

4.1.7.1 Dividend Policy in Articles of Incorporation

The dividend policy of the Company is based on earnings of the year and considers factors including the Company's overall growth, financial planning, funding needs, and industry outlook and prospects, while ensuring shareholder equity and a balanced dividend policy are maintained. Every year, the Company pays taxes as required by law, makes up losses from previous years, and has the Board of Directors prepare a dividend proposal based on the earnings available for distribution ("distributable earnings") according to Article 120 of the Articles of Incorporation. Dividends may be distributed in the form of cash and/or stock dividends. A dividend proposal is not executed until approved by the annual general meeting. However, total dividends in a year shall not be lower than ten percent of total "consolidated net income". The percentage of cash dividend shall not be lower than twenty percent of total dividends for the year.

4.1.7.2 Current Year Dividend Distribution Proposal to Annual General Meeting

The 2020 distribution proposal has been passed by the Board of Directors on March 26, 2020. A cash dividend of NT$1 to be paid out of earnings and capital surplus. The proposal is expected to be submitted to the annual general meeting for approval on May 21, 2021.

4.1.7.3 Expected Material Changes in Dividend Policy:

Dividend distribution for the year is consistent with the dividend policy established by the Articles of Incorporation. The total amount of dividends does not vary significantly from those in past years.

4.1.8 Effects of Proposed Stock Dividends for the Year on Business Performance and EPS

N/A.

4.1.9 Employee Bonuses and Remuneration of Directors and Supervisors

4.1.9.1 Percentages or Ranges of Employee Bonuses and Remuneration of Directors and Supervisors under the Articles of Incorporation

The remuneration of Directors of the Company for the last year has been passed by the Board of Directors on March 26, 2021. The Directors are to be paid a total of NT$110,855 in compensation.

4.1.9.2 Basis for estimating the amount of employee bonuses and remuneration of Directors and Supervisors, basis for calculating the number of shares to be distributed as bonuses, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated amount, for the current period

Only remuneration of Directors is paid for the current period. The basis for estimating the amount is the net profit after tax and a percentage within the range specified in the Director Remuneration Policy. However, if the actual amount in the resolution approved by the annual general meeting later differs from the estimated amount, the difference is treated as a change in accounting estimates and recognized as profit or loss for the year in which the resolution is passed.

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Funding Activities

4.1.9.3 Employee Bonuses Passed by Board of Directors

Amount of cash/stock bonuses paid to employees and remuneration of Directors and Supervisors for the current year. The amount of, reason for, and treatment of discrepancy, if any, from the recognized costs should be disclosed: The remuneration of Directors of the Company for the last year has been passed by the Board of Directors on March 26, 2021. The Directors are to be paid a total of NT$110,855 in remuneration. There is no discrepancy between the remuneration of Directors proposed by the Board of Directors and the recognized costs.
Amount of employee stock bonus proposed and percentage out of the sum of net profit after tax and total employee bonuses in the current individual or separate financial statements: No employee bonus is distributed.

4.1.9.4 Actual distribution of employee bonuses and remuneration of Directors and Supervisors of previous year (including number of shares, amount and stock price); and discrepancies, if any, from the recognized employee bonuses and remuneration of Directors and Supervisors and the causes and treatments of the discrepancies

Only a total of NT$5,422,000 was paid in remuneration of Directors and Supervisors in the previous year. There was no discrepancy between the actually distributed amounts and the recognized costs.

4.1.10 Buyback of Treasury Stock

N/A.

4.2 Issuance of Corporate Bonds (Including Overseas Corporate Bonds)

4.2.1 Domestic Corporate Bonds

Unit: TWD

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Second issue of domestic secured convertible corporate bond in the
Type
Republic of China in 2017
Issuance (processing) date September 30, 2017
Par value NT$100,000
Place of issuance and trading Republic of China
Issue price 100% par
Total NT$400,000,000
Coupon rate 0% coupon rate
Term Three years. Maturity date September 30, 2020
Guarantor Bank SinoPac Company Limited
Trustee Hua Nan Commercial Bank Co., Ltd.
Underwriter SinoPac Securities Co., Ltd.
Certifying attorney Jheding International Law Offices
Certifying CPA Ernst & Young Taiwan
The bond is issued at a term of three years. Except for conversion or
Repayment redemption as permitted, repayment will be made in lumpsum cash at
maturity.
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Funding Activities

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The principal amount of NT$397,100 thousand was repaid on October
Outstanding principal
22, 2020.
This convertible corporate bond gives the creditors the option to sell it back
early when two years have elapsed after issuance. The Company shall send
by registered mail the "Put Option Exercise Notice" to the creditors (based
on the creditor register on the fifth business day prior to the mailing date
for the "Put Option Exercise Notice"; investors who acquire this
convertible corporate bond by trading or other means afterward will be
notified by public announcement) forty days prior to the exercise date. The
Company shall also send an official letter to request the Taipei Exchange
to announce the put option exercise notice to the creditors. The Creditors
Redemption or early repayment clause
may, within forty days (based on the arrival date or as indicated by the post
mark if sent by mail) after the announcement, notify the Company's
shareholder service agent and request that the Company buy back the
convertible corporate bond at par plus interest [0% of par value after two
years (0% yield)] with cash. Upon accepting the sellback request, the
Company shall complete cash buyback of the convertible corporate bond
within five business days after the exercise date. If any of the dates above
falls on a day when trading is unavailable on the centralized exchanges in
Taipei, the next business day shall apply instead.
Restrictions N/A
Name of credit rating agency, rating date,
N/A
corporate bond rating result
Amount converted to
common shares (by
exchange or subscription),
An amount of NT$2,900,000 has been converted to common shares up to
global depository receipts,
Other or other securities up to the the publication date of this annual report.
rights publication date of this
attached annual report
Issuance and conversion
Please refer to the conversion rules on page 282 of the prospectus of the
(exchange or subscription)
convertible corporate bonds of the Company.
rules
Potential share dilution or impact on
current shareholder's equity caused by
issuance and conversion, exchange or The principal has been repaid on October 22, 2020, so it is not applicable.
subscription rules, or conditions of
issuance
Name of custodian for exchanged
N/A
securities
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Unit: TWD

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Second issue of domestic secured convertible corporate bond in the
Type
Republic of China in 2017
Year
2019 2020(Note 1)
Item
Highest 122.50 115.45
Market price Lowest 110.70 99.35
Average 117.57 101.96
Conversion price 27.30 25.0
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Funding Activities

Conversion price on issuance (processing) date	September 30, 2017 30.00 September 30, 2017 30.00	September 30, 2017 30.00 September 30, 2017 30.00
Performance of conversion obligations	Convertion to 101,814 common shares	Convertion to 4,000 common shares

Note 1: Second issue of domestic secured convertible corporate bond in the Republic of China in 2017, It maturity on September 30, 2020.

Type	Third issue of domestic unsecured convertible corporate bond in the Republic of China in 2017
Issuance (processing) date	October 2, 2017
Par value	NT$100,000
Place of issuance and trading	Republic of China
Issue price	100% par
Total	NT$800,000,000
Coupon rate	0% coupon rate
Term	Three years. Maturity date October 2, 2020
Guarantor	N/A
Trustee	Hua Nan Commercial Bank Co., Ltd.
Underwriter	SinoPac Securities Co., Ltd.
Certifying attorney	Jheding International Law Offices
Certifying CPA	Ernst & Young Taiwan
Repayment	The bond is issued at a term of three years. Except for conversion or redemption as permitted, repayment will be made in lumpsum cash at maturity.
Outstanding principal	The principal amount of NT$100,500,000 thousand was repaid on October 22, 2020.
Redemption or early repayment clause	This convertible corporate bond gives the creditors the option to sell it back early when two years have elapsed after issuance. The Company shall send by registered mail the "Put Option Exercise Notice" to the creditors (based on the creditor register on the fifth business day prior to the mailing date for the "Put Option Exercise Notice"; investors who acquire this convertible corporate bond by trading or other means afterward will be notified by public announcement) forty days prior to the exercise date. The Company shall also send an official letter to request the Taipei Exchange to announce the put option exercise notice to the creditors. The Creditors may, within forty days (based on the arrival date or as indicated by the post mark if sent by mail) after the announcement, notify the Company's shareholder service agent and request that the Company buy back the convertible corporate bond at par plus interest [1.0% of par value after two years (0.5% yield)] with cash. Upon accepting the sellback request, the Company shall complete cash buyback of the convertible corporate bond within five business days after the exercise date. If any of the dates above falls on a day when trading is unavailable on the centralized exchanges in Taipei, the next business day shall apply instead.

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Funding Activities

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Restrictions N/A
Name of credit rating agency, rating date, corporate
N/A
bond rating result
Amount converted to common
shares (by exchange or
An amount of NT$699,500,000 has been converted to
subscription), global depository
common shares up to the publication date of this annual
receipts, or other securities up to
Other rights the publication date of this report.
attached annual report
Please refer to the conversion rules on page 309 of the
Issuance and conversion
prospectus of the convertible corporate bonds of the
(exchange or subscription) rules
Company.
Potential share dilution or impact on current
shareholder's equity caused by issuance and The principal has been repaid on October 22, 2020, so it is not
conversion, exchange or subscription rules, or applicable.
conditions of issuance
Name of custodian for exchanged securities N/A
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Unit: TWD

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Third issue of domestic unsecured convertible corporate bond in the Republic of
Type
China in 2017
Year
2019 2020(Note 1)
Item
Highest 124.60 109.80
Market
Lowest 102.20 95.50
price
Average 110.52 99.69
Conversion price 26.80 24.50
Conversion price on October 2, 2017 October 2, 2017
issuance (processing) date 29.5 29.5
Performance of conversion Convertion to 19,200,079 Common
Convertion to 68,915x Common shares
obligations shares
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Note 1: Third issue of domestic secured convertible corporate bond in the Republic of China in 2017, It maturity on October 2, 2020

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First issue of domestic secured bond in the Republic of China
Type
in 2019
Issuance (processing) date May 2, 2019
Par value NT$1,000,000
Place of issuance and trading Republic of China
Issue price Fully issued according to the face value
Total NT$1,385,000,000
Coupon rate The coupon rate is a fixed annual interest rate of 0.86%
Term Five years. Maturity date May 7, 2024
Taiwan Cooperative Bank, Mega International Commercial
Guarantor
Bank Co., Ltd., Chang Hwa Commercial Bank, Ltd., First
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Funding Activities 79

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Commercial Bank, Hua Nan Commercial Bank, Ltd., and
Taichung Commercial Bank Co., Ltd.
Trustee Taishin International Bank Co., Ltd.
Underwriter Taiwan Cooperative Securities Co., Ltd.
Certifying attorney Jheding International Law Offices
Certifying CPA Ernst & Young Taiwan
The bond is issued at a term of five years. Repayment will be
Repayment
made in lumpsum cash at maturity.
Outstanding principal NT$1,385,000,000
Redemption or early repayment clause N/A
Restrictions N/A
Name of credit rating agency, rating date, corporate
(Note 1)
bond rating result
Amount converted to common
shares (by exchange or
subscription), global depository
N/A
receipts, or other securities up to
Other rights
attached the publication date of this
annual report
Issuance and conversion Please refer to the issuance method of the secured bond public
(exchange or subscription) rules statement.
Potential share dilution or impact on current
shareholder's equity caused by issuance and
N/A
conversion, exchange or subscription rules, or
conditions of issuance
Name of custodian for exchanged securities N/A
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Note 1:

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Guarantor rating date credit rating agency rating result
Taiwan Cooperative Bank 2018.02.20 Taiwan Ratings twAA+
Mega International Commercial Bank Co., Ltd. 2018.10.17 Taiwan Ratings twAA+
Chang Hwa Commercial Bank, Ltd. 2018.12.07 Taiwan Ratings twAA
First Commercial Bank 2018.09.26 Taiwan Ratings twAA+
Hua Nan Commercial Bank, Ltd. 2018.05.20 Taiwan Ratings twAA+
Taichung Commercial Bank Co., Ltd. 2018.06.05 Fitch Ratings A-(twn)
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4.2.2 Overseas Corporate Bonds

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Second overseas issue of unsecured convertible corporate
Type
bond in 2015
Issuance (processing) date April 10, 2015
Par value US$250,000
Place of issuance and trading Singapore
Issue price 100% par
Total US$80,000,000
Coupon rate 0% coupon rate
Term Five years. Maturity date April 10, 2020
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Funding Activities

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Guarantor N/A
Trustee Citicorp International Limited
Domestic: MasterLink Securities Corporation
Underwriter
International: J.P. Morgan Securities plc.
Domestic: LCS & Partners Law Firm
Certifying attorney International: Everstrong International Patent & Trademark
Firm
Certifying CPA Ernst & Young Taiwan
The bond is issued at a term of five years. Except for
Repayment conversion or redemption as permitted, repayment will be
made in lumpsum cash at maturity.
The principal amount of US$5,000,000 was repaid on April
Outstanding principal
13, 2020.
Please refer to the issuance rules on page 6 of the prospectus
Redemption or early repayment clause
of the convertible corporate bonds of the Company.
Restrictions N/A
Name of credit rating agency, rating date, corporate
N/A
bond rating result
Amount converted to common
shares (by exchange or
subscription), global depository No amount has been converted to common shares up to the
receipts, or other securities up to publication date of this annual report.
Other rights
attached the publication date of this annual
report
Issuance and conversion Please refer to the issuance rules on page 4 of the prospectus
(exchange or subscription) rules of the convertible corporate bonds of the Company.
Issuance and conversion (exchange or subscription)
rules and issuance conditions The principal has been repaid on April 13, 2020, so it is not
Potential share dilution or impact on current applicable.
shareholder's equity
Name of custodian for exchanged securities N/A
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Unit: TWD

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Type Second overseas issue of unsecured convertible corporate bond in 2015
Year
2019 2020(Note 1)
Item
- -
Highest
Market
Lowest - -
price
- -
Average
Conversion price 30.42 30.42
Issuance (processing) date
- -
and conversion price at
issuance
Performance of conversion
obligations - -
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Note 1: Second overseas issue of unsecured convertible corporate bond in 2015, It maturity on April 10, 2020.

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Funding Activities

4.3 Preferred Shares

Not applicable as the Company has not issued any preferred shares up to the publication date of this annual report.

4.4 Global Depositary Receipts

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Issuance (processing) date
November 12, 2013
Item
Place of issuance and trading London Stock Exchange
Total Amount US$39,312,000.00
Unit issue price US$5.46
Total number of units issued 7,200,000 units
Source of securities represented New shares by cash issue
Amount of securities represented 36,000,000 common shares
Rights and obligations of depositary
same as those of holders of common shares in the Company
receipt holder
Trustee -
Depositary institution JPMorgan Chase Bank, N.A.
Custodian JPMorgan Chase Bank, N.A., Taipei Branch
Balance not yet redeemed -
Allocation of costs for issuance and The costs for issuance and duration are paid by Wisdom Marine
duration Lines.
Please refer to the trustee services agreement and the custodial
Important provisions of the trustee services agreement for details. The trustee exercises the rights and
services agreement and the custodial obligations on behalf of the depository receipt holders, and the
services agreement custodian holds the common shares represented by the depository
receipts on their behalf.
Highest Not applicable as no trading is made this year.
2018 Lowest Not applicable as no trading is made this year.
Average Not applicable as no trading is made this year.
Unit market
Current year up Highest Not applicable as no trading is made this year.
price to the
Lowest Not applicable as no trading is made this year.
publication date
of this annual Not applicable as no trading is made this year.
Average
report
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4.5 Employee Stock Options

Not applicable as the Company has not issued any employee stock options up to the publication date of this annual report.

4.6 Restricted Stock Awards

Not applicable as the Company has not issued any restricted stock awards up to the publication date of this annual report.

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Funding Activities

4.7 New Share Issue for Merger or Acquisition of Another Company

Not applicable as the Company has not issued any new shares for a merger or acquisition of another company up to the publication date of this annual report.

4.8 Implementation of Capital Allocation Plan

None has not been completed or has been completed and the benefits of the project have not yet appeared within the last three years up to the publication date of this annual report.

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Funding Activities

5. Business Overview

5.1 Business Activities

5.1.1 Scope of Business

5.1.1.1 Business Activities

International maritime transport Ship management and maintenance

Ship leasing

In addition to the licensed activities, other business activities that are not prohibited or restricted by law

5.1.1.2 Revenue Distribution

Unit: NT$000; %

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Year 2020 2019
Item Amount Percentage Amount Percentage
Hire Revenue 11,169,570 93.55% 13,073,924 94.51%
Freight Revenue 378,965 3.17% 415,725 3.01%
Management Revenue 114,100 0.96% 118,956 0.86%
Other 276,798 2.32% 224,852 1.62%
Total 11,939,433 100.00% 13,833,457 100.00%
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5.1.1.3 Services

Wisdom Marine is a dry bulk shipping company that operates each ship as a subsidiary. There were a total of 136 vessels in the fleet at the end of 2020. 123 vessels were owned and 13 were chartered-in, under management, or under joint venture. The fleet consists of bulk carriers, log carriers, tween-decks, multipurpose vessels, RORO ships, and container ships of various sizes from Handysize to Capesize. In particular, Handysize vessels with their operational flexibility and relatively stable freight rates are the backbone of our business.

The scope of business for the Group includes short-term and long-term ship chartering, ship management, and occasionally ship purchases and sales. The Company offers primarily wet lease contracts, which include complete crew, maintenance, and insurance. The Company provides not only financial arrangements, but also strong professional management to work closely with customers and reduce operating costs. At the end of 2020, there were 81 ships on long-term time charter, 39 self-operated, and 6 under management or other arrangements.

5.1.1.4 New Services Under Development

The Company continues to replace old vessels in the fleet with Japanese-built Eco ships. It allows the Company to comply with the environmental requirements while reducing fuel expenditures in the operating cost for charterers and making the fleet more competitive. In the early years, Wisdom Marine built its business on

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Business Overview

Handysize vessels that offered operational flexibility and relatively stable freight rates. In recent years, the Company has been adding Supramax and Panamax vessels to the fleet in order to create a sufficiently diverse fleet to counter the impact of market volatility and to provide a wider range of services.

5.1.2 Industry Overview

5.1.2.1 Current Trends and Outlook

Maritime transport remains the most economical shipping method today. There are approximately 12,300 dry bulk carriers over 10,000 DWT around the world. In 2020, ships carried 12.2 billion tons of commodities or goods. In particular, dry bulk carriers carried 5.4 billion tons of the commodities, including minerals, coal, grains, timber, steel, cement, sugar, cotton, fertilizers, and mechanical parts.

Dry bulk carriers can be categorized by carrying capacity into Capesize, Panamax, Supramax, and Handysize. The average shipping rates in each category are based on four indices, BCI, BPI, BSI and BHSI. The indices are calculated for various ship sizes as an weighted average of shipping rates on several typical routes. The Baltic Exchange weights the Baltic Dry Index (BDI) to the following ratio: 40% BCI, 30% BPI, and 30% BSI. BDI mirrors supply and demand for dry bulk shipping in the spot market, and reflects the global outlook on dry bulk shipping.

BHSI, in general, is less representative of the market as a whole. Small ships can carry many types of cargo, and some types of cargo may have to be accommodated by certain ship specifications. As a result, shipping rates can vary greatly between vessels.

Category	Deadweight tonnage (DWT)	Main cargo Index	Main cargo Index
Capesize 110,000+ Coal, iron ore BCI
Panamax 67-109,999 Grains, coal, mineral sands, and industrial raw materials BPI
Supramax 50-66,999 Grains, coal, mineral sands, and industrial raw materials BSI
Handy	26-49,999	Grains, steel, fertilizers, cement, timber, wood chips, and pulp	BHSI

The combination of a global economic slowdown and excess dry bulk shipping capacity pushed BDI to a historic low at 290 in February 2016. As supply and demand adjusted themselves, BDI started bouncing back slowly in 2017. The dry bulk shipping market remained stable in 2018. The decline in newbuilding investment led to the recovery of balance in dry bulk shipping capacity, where supply had exceeded demand for years. The Brumadinho dam disaster and the US-China trade dispute caused shipping companies to take a more cautious stance toward newbuilding and long-term leasing agreements in the first quarter of 2019. In 2020, the COVID-19 pandemic made many countries implement restrictions that had a huge impact on both supply and demand sides of shipping. The shock waves also spread to dry bulk shipping. As economic activities began to resume in the second half of 2020, the dry bulk shipping market also started recovering. The overall Baltic Dry Index (BDI) has not returned to the level in 2019. However, a steadily recovering market sends a positive signal to dry bulk shipping companies.

Given a growing world population and the demand for goods and raw materials in emerging economies, ships

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Business Overview 85

remain the most energy efficient, environmentally friendly, and economical shipping method. Hence, from a long-term perspective, industry restructuring triggered by the business cycle can actually be an opportunity for the maritime transport industry to reshape itself.

5.1.2.2 Supply Chain Relationships

There is an absence of clear supply chain relationships in the bulk shipping business as the demand for commodities can come from all sectors of the economy and bulk shipping, by nature, does not involve production of goods or supply of raw materials.

Raw material producers or commodity traders	Raw material producers or commodity traders	Raw material producers or commodity traders
	Raw material producers or commodity traders	→	Maritime transport	→	Raw material or commodity users

5.1.2.3 Trends and Competition

Demand in the maritime transport market comes from demands in different industries. It is, therefore, rare to see a changing outlook on a single industry to cause dramatic short-term volatility in the market. Instead, volatility in the maritime transport market is often associated with systemic changes in demand due to changes in global macroeconomic conditions. Moreover, self-adjustment of the supply of ships is one of the key factors in the business cycle of the maritime transport market.

Since the shipping services provided by maritime transport companies do not involve production, there is no inventory pressure or pressure to convert inventory to cash flows. Charter hire on time charters (long-term leases) is collected in advance, and freight on voyage charters (self-operated) is collected in a few days after loading completed. Cash flow management is relatively simple in the business. It is, therefore, rare for a wellmanaged shipping company to have liquidity issues. Funding pressure faced by shipping companies often arise from newbuildings. Ship purchases often require installments be paid prior to delivery and before ships begin to operate. Hence, cash has to be considered carefully in an expansion plan to avoid default due to insufficient fund.

Maritime transport can be divided by shipping type into container, dry bulk, and tanker, whereas routes can be divided by distance into ocean routes and coastal routes. The scope of business includes operator, shipowner, ship management, and crewing management. Business activities of a shipping company vary from one shipping company to the next around the world. In fact, bulk shipping is a highly competitive international industry. In terms of the total number and total capacity of dry bulk carriers worldwide, individual shipping companies in Taiwan and in other countries occupy only very small percentages. In addition, since cargo space cannot be stored, the capacity of a shipping company is decided by its ability in solicitation of cargo and assignment of ships.

The Group has a competitive advantage in its fleet and partners. The risk of supply and demand change for each ship type is reduced by a diversified fleet. The young fleet provides consistent, efficient services. Working with some of the best international shipping companies and fixing long-term contracts provide Wisdom Marine a steady income. Furthermore, a reasonable exposure in the spot market enables the Company to grasp the trends of market volatility.

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Business Overview

5.1.3 Overview of Technology and R&D

Technical aspect of business activities and R&D: Not applicable

R&D personnel and education/experience: Not applicable

Annual R&D expenditures in last five years: Not applicable

Technology and product developed in last five years: Not applicable

5.1.4 Long- and Short-Term Business Development Strategies and Plans

5.1.4.1 Short-Term Business Development Strategy and Plan

Given changes in the market and different customer needs, the Company's newbuilding plan includes Handysizes that are the backbone of the fleet, 60,000 DWT Supramax and 80,000 DWT Panamax. The Newbuildings are mainly Japanese-built Eco ships that comply with the environmental conventions and support the goal of green transportation. The reduced fuel consumption also makes the fleet more competitive. As a result, the Company is in a better position to attract charterers and create a win-win situation.

5.1.4.2 Long-Term Business Development Strategy and Plan

In the long term, the Company will continue to replace old ships and maintain a young, energy efficient fleet that delivers quality service. The Company will also strengthen its financial structure with steady profits, and expand its customer base. The mission is to build a top shipping group and maximize the value of the Company through sustainable development.

5.2 Market, production and sales

5.2.1 Market analysis

5.2.1.1 Regions of Service

Most of the Group's long-term charterers are Japanese and European charterers with worldwide routes. Meanwhile, the self-operated ships in the spot market trade in Southeast Asia, India, China, and the Middle East, and being extended into Africa and Southeast America.

5.2.1.2 Market Share

Business activities of a shipping company vary from one shipping company to the next around the world. In fact, bulk shipping is a highly competitive international industry. There were a total of 12,300 dry bulk carriers over 10,000 DWT offering a total capacity up to 910 million tons at the end of 2020. The Group's 136 ships and a total capacity of 6.6 million tons at the end of 2020 occupied only very small percentages of the world fleet and so as any individual shipping companies in Taiwan and in other countries. In addition, since cargo space cannot be stored, the capacity of a shipping company is decided by its ability in solicitation of cargo and assignment of ships. Hence, the nature of the dry bulk shipping business makes it difficult to calculate market shares for individual shipping companies.

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Business Overview

5.2.1.3 Future Market Supply and Demand and Growth Potential

Unfavorable conditions in the dry bulk market persisted in 2016 and 2017. As a result, shipowners were relatively less equipped and less willing to order newbuildings. The number of newbuilding orders was visibly lower than the two preceding years. The dry bulk shipping market remained stable in 2018. However, increasingly stringent environmental regulations and the cost of funds continued to dampen shipowners' willingness to invest. The Brumadinho dam disaster and the US-China trade dispute made many shipowners more cautious toward newbuilding in 2019. In 2020, the pandemic also sent shock waves through the dry bulk shipping market. Despite recovery in the second half of the year, newbuilding investment remained relatively low. The total number of newbuilding orders was below the level in 2019 for all types of ships. Given the pressure to replace old ships aged 20 years or more, the possibility of a supply shortage remains in the dry bulk shipping market. Moreover, the United Nations is not putting any hold on shipping related environmental regulations because of the pandemic. Carbon reduction requirements may raise the operating costs for old ships even higher in the next three to five years. Therefore, supply and demand of dry bulk shipping will continue to provide basic support for freight in the medium term.

5.2.1.4 Competitive Niches

A professional management team:

As shipping routes often connect different countries, business decisions have to be made accurately and quickly to reflect cultural, economic, and political differences across regions. The management team of the Group consists of experts of maritime transport whose know-how and years of experience enable them to accurately interpret market developments in order to ensure success and stay ahead in business planning.

Long term relationships with business partners:

The Company’s charterers are first class shipping companies with whom the Group works closely on a longterm basis. When market conditions turn favorable and shipping rates rise sharply, Wisdom Marine charters ships at below-market rates to long-term business partners. Thus when the market turns sour, major charterers are willing to continue to support the Group and work together in fluctuations. This is the best business model to benefit both sides.

A young, diverse dry bulk fleet:

Given changes in the market and different client needs, the Group has been working to build a larger and more diverse fleet for several years. Old ships are replaced by new ones in an ongoing effort to improve efficiency and stability while reducing the impact of rate changes in any single market.

- Operational flexibility afforded by self operated ships:

As a strategy, the Group holds a number of self-operated ships in the fleet to keep itself alert to developments in the market. These ships provide the flexibility for the Group to allocate ships in response to market volatility.

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Business Overview

5.2.1.5 Long-term Outlook

 Favorable factors

A young, diverse dry bulk fleet:

The Group has achieved economies of scale in a fleet consisting of a wide range of large, medium, and small vessels. The young, well equipped, and energy efficient vessels are able to meet customer expectations and provide a relatively steady income under market fluctuations.

Excellent ship quality:

When expanding its fleet, the Group tends to choose established Japanese shipbuilding companies with an excellent reputation and shipbuilding expertise in order to ensure quality of the final products. Moreover, the Group's long-term relationships with the shipbuilders establish trust between the companies, and make the shipbuilders more willing to offer the Group better terms in sales. Should any plan for disposal be made in the future, compared to similar models made by Chinese, South Korean, or Vietnamese shipbuilders, Japanese-built vessels would be more popular with buyers and more likely to receive a larger gain on disposal.

 Unfavorable factors and countermeasures

Recruitment difficult and seafarers less trained:

An increasing number of vessels in the last few years have led to a rising demand for seafarers. It has also led to challenges in recruitment and less trained seafarers, all of which create higher operating costs and risks.

→Countermeasures:

In-house training - The Company started working with National Taiwan Ocean University in 2010. A number of deck and engine internships are offered every year, and interns are trained and encouraged to pursue key positions in the fleet.

More retaining seafarers - As the fleet expands, crewing agencies have started training contract seafarers to be stationed specifically in the Wisdom fleet. The Company asks crewing agencies to retain seafarers with good performance.

Enforcement of pre-boarding orientation - The Company requires crewing agencies gather seafarers before boarding to complete training in order to familiarize them with the Company's policies and raise safety awareness. In addition, the Company raises awareness by including the fleet's accidents in case study materials to keep seafarers vigilant.

Performance evaluation - The Company keeps records of seafarers sent by crewing agencies and the performance and number of accidents associated with these seafarers for annual performance evaluation. The results are examined in order to decide whether to place more ships under certain crewing agencies.

Humanized management - The Company takes humanized management. We listen to the needs of our seafarers and solve their problems promptly.

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Business Overview

5.2.2 Application and production of key products

The Group is in the dry bulk shipping business and does not manufacture any goods or perform any production process.

5.2.3 Supply status of primary raw materials

The Group provides shipping services, and therefore does not purchase any raw materials for production. There are only the costs of fuels and lubricants for ships, which account for a relatively large percentage of the annual operating costs. Depending on the length of voyage, route, weather conditions, and level of inventory, the Group obtains quotations on fuel prices at different bunkering ports, and makes purchases through brokers or directly from suppliers in order to diversify sources and reduce costs.

5.2.4 List of Key Customers

5.2.4.1 Key Suppliers in Last Two Years

The Company provides shipping services, and therefore does not purchase any raw materials for production. There are only the costs of fuels and lubricants for ships, which account for a relatively large percentage of the annual operating costs. Given suitable lubricant specification may vary from ship to ship, the Company works with four to five international lubricant suppliers on a long-term basis. The Company usually asks for quotes and negotiates with the suppliers before selecting a supplier offering the right specifications at an acceptable price and discounts are often offered on large and repeated purchases. In 2019 and 2020, by diversification, the purchase amount of each suppliers is less than 10% of total purchases. Meanwhile, factors to be considered in fuel purchases include the length of voyage, route, weather conditions, and level of inventory as well as fuel prices and suppliers at different bunkering ports. Source diversification and reduced costs are achieved in the process.

 Names of suppliers supplying 10% or more of purchases and the amounts and percentages of total purchases:

Unit: NT$000; %

Year	2020 2019	2020 2019	2020 2019	2020 2019	2020 2019	2020 2019	2020 2019
Item	Name	Amount	Net purchase percentage	Relationship with issuer	Name	Amount	Net purchase percentage Relationship with issuer
Other 1,855,575 100.00% Other 1,575,332 100.00%
	Net purchase	1,855,575	100.00%		Net purchase	1,575,332	100.00%

Note 1: USD amounts converted to TWD at an average exchange rate of 29.470 and 30.912 for 2020 and 2019, respectively.

5.2.4.2 Key Customers in Last Two Years

80% or more of the Group's operating income is income from ship long-term chartering. Chartering contracts are primarily well established with reputable European and Japanese shipping companies in long-term business relationships with the Group. Viterra (formerly named Glencore, renamed from 2020/11/30) has been using a

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Business Overview

lot of the Group's energy efficient ships. It has been the Group's largest client since 2015.

Names of customers making 10% or more of purchases and the amounts and percentages of total purchases:

Unit: NT$000; %

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Year 2020 2019
Net sale Relationship Net sale Relationship
Item Name Amount Name Amount
percentage with issuer percentage with issuer
Viterra Glencore
1 Chartering 1,368,034 11.46% N/A Grain 2,114,858 15.29% N/A
B.V. B.V.
Other 10,571,399 88.54% Other 11,718,599 84.71%
Net sales 11,939,433 100.00% Net sales 13,833,457 100.00%
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Note: USD amounts converted to TWD at an average exchange rate of 29.470 and 30.912 for 2020 and 2019, respectively.

5.2.5 Output in Last Two Years

Not applicable as the Group operates a dry bulk shipping business and does not manufacture any goods.

5.2.6 Sales in Last Two Years

The Group operates a dry bulk shipping business and does not generate sales. Instead, operating income is provided for the last two years.

In 2018, the dry bulk shipping industry rebounded from two disappointing years. In 2019, the spillover effects of the Brumadinho dam disaster and the US-China trade dispute made many shipowners more cautious toward newbuilding and long-term leasing agreements. The Company had intended to take advantage of the supplydemand mismatch to increase profits in 2020. Therefore, the number of ships with contract renewal and index linked rent was higher in the first quarter compared to previous years. However, COVID-19 created unanticipated volatility in the market. Having sustained larger market volatility, neither revenue or profit performed well in the first half year. The economy started to recover in the second half year, and the Company adopted more conservative business strategies. As a result, profits showed slight increases, and the gross profit margin rose from 7.64% in the first half year to 19.13% in the second half year. The gross profit margin was 13.92% for the year. The total revenue was US$405.1 million, 9.47% lower compared to the previous year.

Unit: NT$000; %

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Year 2020 2019
Item Amount Percentage Item Amount
Hire Revenue 11,169,570 93.55% 13,073,924 94.51%
Freight Revenue 378,965 3.17% 415,725 3.01%
Management Revenue 114,100 0.96% 118,956 0.86%
Other 276,798 2.32% 224,852 1.62%
Total 11,939,433 100.00% 13,833,457 100.00%
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Business Overview

5.3 Workforce Overview

The parent-subsidiary structure in the Group consists of Wisdom Marine Lines S.A. and Wisdom Marine International Inc. being wholly owned and controlled by Wisdom Marine Lines Co., Ltd. and Well Shipmanagement and Maritime Consultant Co., Ltd. and Wisdom Lines Europe B.V. being wholly owned and controlled by Wisdom Marine International Inc.

The numbers of employees in the four companies under the Group are described as follows:

Wisdom Marine Lines Co., Ltd.
Between its establishment in 2008 and the publication date of this annual report, Wisdom Marine Lines has consisted only of a management team that includes four employees: the chairman, the president, the spokesperson, and the auditor. With the exception of the chairman, all employees are hired by Wisdom Marine International on its behalf or employees of Wisdom Marine International.

Wisdom Marine Lines Co., Ltd. (Singapore Branch) was established in 2018. Plans are being made to hire locally or have ship managers transferred from the headquarters.

Wisdom Marine Lines S.A.

Wisdom Marine Lines S.A. is a professional ship owner and controls all vessels in the Group via subsidiaries. Seafarers are hired through recruitment agencies. It employs about 2,600 seafarers at the publishing date of this annual report.

Wisdom Marine International Inc.

Wisdom Marine International handles primarily administrative affairs for Wisdom Marine Lines. All employees are part of an administrative staff.

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Current year up to the
Year 2019 2020 publication date of
this annual report
The management 11 13 13
Number of Non-managerial
88 89 84
employees employees
Total 99 102 97
Average age (year) 35.3 36.3 35.9
Average years of service 7.3 7.7 8.1
Ph.D 0.0% 0.0% 0.0%
Master's 23.2% 23.5% 25.7%
Education
University/College 72.7% 71.6% 72.2%
background
High school 4.0% 4.9% 2.1%
Below high school 0.0% 0.0% 0.0%
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Well Shipmanagement and Maritime Consultant Co., Ltd.
Well Shipmanagement and Maritime Consultant handles primarily ship management for the fleet of

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Wisdom Marine Lines S.A. and other carriers. All employees are part of an administrative staff.

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Current year up to the
Year 2019 2020 publication date of this
annual report
The management 7 7 7
Number of Non-managerial 60
54 54
employees employees
Total 61 61 67
Average age (year) 36.5 37.2 38.7
Average years of service 5.1 5.9 6.0
Ph.D 0.0% 0.0% 0.0%
Master's 36.1% 37.7% 34.3%
Education
University/College 59.0% 57.4% 55.2%
background
High school 4.9% 4.9% 10.5%
Below high school 0.0% 0.0% 0.0%
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Wisdom Lines Europe B.V.

Established in November 2019, Wisdom Lines Europe handles primarily ship agency mater and client communication for the fleet of Wisdom Marine Lines S.A. All employees are part of an administrative staff.

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Current year up to the
Year 2019 2020 publication date of this
annual report
The management 0 0 0
Number of Non-managerial 2
1 2
employees employees
Total 0 0 0
Average age (year) 33.8 30.5 30.7
Average years of service 0.1 0.97 1.2
Ph.D 0.0% 0.0% 0.0%
Master's 0.0% 0.0% 0.0%
Education
University/College 100.0% 100.0% 100.0%
background
High school 0.0% 0.0% 0.0%
Below high school 0.0% 0.0% 0.0%
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5.4 Environmental protection expenditure

5.4.1 Losses due to environmental pollution in last two years and up to the publication date of

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Business Overview

this annual report

this annual report
Date	2020/2/25
Description	MV Bizen had an oil spill accident during cargo operation in port Ube, Japan in 2019. The oily water was wrongly discharged into sea due to malfunction of the discharge valve of bilge holding tank. The local port authority was informed immediately when the deck duty officer noticed the abnormal situation. On February 25, 2020, the port authorities completed the relevant investigation and imposed a fine to close the case.
Total losses / damages / disposal	NT$21,0000 (JPY700,000)
Prospective expenditure	None
Countermeasure	When the accident happened, the ship took the initiative to report to the port authorities and actively cooperated in the investigation of the accident. The company had sent the precautions to the entire fleet for reference to avoid the same accident from happening again.

5.4.2 Measures taken for environmental protection

Prevention of pollution by oil from ships has been implemented according to MARPOL Annex I. Prevention of pollution by sewage from ships has been implemented according to MARPOL Annex IV. Prevention of pollution by garbage from ships has been implemented according to MARPOL Annex V. Prevention of air pollution from ships and energy efficiency management have been implemented according to MARPOL Annex VI.

Ballast water management has been implemented according to the Ballast Water Management Convention.

5.5 Employer-employee relations

5.5.1 Employee benefits, continuing education, training, retirement systems and their implementation as well as employer-employee agreements and various measures to protect employee rights

5.5.1.1 Employee benefits

The Group provides employee benefits pursuant to the Labor Standard Act. The benefits include labor insurance, health insurance, and group insurance. They also include bonuses and allowances provided by the Employee Welfare Committee, such as childbirth allowance, hospital allowance, wedding gift, widow's allowance, and birthday gift and cake.

5.5.1.2 Education and training

Internal training is provided as needed.

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Business Overview

5.5.1.3 Retirement system and implementation status

The Company follows the new pension plan under the Labor Pension Act and contributes no less than 6% of employee's monthly salary to the plan every month pursuant to the Labor Pension Act. The contributions are held in personal pension accounts created by the Bureau of Labor Insurance. Other details are also handled as the law requires.

Given past service is also recognized, the Company follows the Labor Standards Act and allocates 2% of total employee salary to the pension reserve every month for employees except for those opt for the old labor pension scheme. The contributions are deposited in the name of the Company's Pension Fund Oversight Committee into the Bank of Taiwan, which handles collection, custody and management of the fund.

5.5.1.4 Employer-employee relations and measures to protect employee rights

The Group maintains strong employer-employee relations. To protect the rights of its employees, the Group has implemented guidelines such as measures to prevent workplace sexual harassment and procedures for filing complaints and taking disciplinary actions.

5.5.2 Losses due to labor disputes in last two years and up to the publication date of this annual

report

There has been no relevant case in last two years and up to the date of publication of this annual report.

5.6 Major Contracts

As of the date of publication of this annual report, the major contracts signed by the Company and still in force are listed as follows:

5.6.1 Long-term Loan Agreements

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Contract Nature of Restrictive
Company Name Vessel Name Counterparty Period
Date Contract Clauses
13 yrs from the Loan
Unicorn Logger S.A. Unicorn Logger Mega Bank, Chung Shan 2006/12/13 None
drawdown date Agreement
Harmony Pescadores 15 yrs from the Loan
Izumo Mega Bank, Chung Shan 2007/12/7 None
S.A. (Panama) drawdown date Agreement
Babuza Wisdom 13 yrs from the Loan
Babuza Wisdom Mega Bank, Chung Shan 2008/6/2 None
S.A. drawdown date Agreement
13 yrs from the Loan
Pazeh Wisdom S.A. Pazeh Wisdom Mega Bank, Chung Shan 2008/6/2 None
drawdown date Agreement
13 yrs from the Loan
Log Wisdom S.A. Genius Star IX Hua Nan Bank, Hsin Wei 2009/8/24 None
drawdown date Agreement
Paiwan Wisdom Mega Bank, Central 12.5 yrs from the Loan
Amis Wisdom III 2009/9/8 None
S.A. (Syndicate) drawdown date Agreement
Mega Bank, Central 12.5 yrs from the Loan
Saysiat Wisdom S.A. Amis Wisdom VI 2009/9/8 None
(Syndicate) drawdown date Agreement
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Contract Nature of Restrictive
Company Name Vessel Name Counterparty Period
Date Contract Clauses
Mega Bank, Central 12.5 yrs from the Loan
GSX Maritime S.A. Genius Star X 2009/9/8 None
(Syndicate) drawdown date Agreement
Poavosa Wisdom Mega Bank, Central 12.5 yrs from the Loan
Atayal Wisdom S.A. 2009/9/8 None
III (Syndicate) drawdown date Agreement
Poavosa Wisdom Mega Bank, Central 12.5 yrs from the Loan
Bunun Wisdom S.A. 2009/9/8 None
VI (Syndicate) drawdown date Agreement
Mega Bank, Central 12.5 yrs from the Loan
Tao Brave S.A. Tao Brave 2009/9/8 None
(Syndicate) drawdown date Agreement
Mega Bank, Central 12.5 yrs from the Loan
Tao Mariner S.A. Tao Mariner 2009/9/8 None
(Syndicate) drawdown date Agreement
12.5 yrs from the Loan
Sao Wisdom S.A. Global Faith Shin Kong Bank, Dunnan 2010/2/9 None
drawdown date Agreement
12.5 yrs from the Loan
Rukai Maritime S.A. Naluhu Shin Kong Bank, Dunnan 2010/5/25 None
drawdown date Agreement
15 yrs from the Loan
Amis Wisdom S.A. Amis Wisdom I Mega Bank, Chung Shan 2010/6/15 None
drawdown date Agreement
Makatao Wisdom 15 yrs from the Loan
Amis Wisdom II Mega Bank, Chung Shan 2010/7/21 None
S.A. drawdown date Agreement
Dumun Navigation 15 yrs from the Loan
Frontier Bonanza First Bank, Ho Ping 2010/10/11 None
S.A. drawdown date Agreement
Ligulao Wisdom 13 yrs from the Loan
Ligulao Hua Nan Bank, Hsin Wei 2010/11/16 None
S.A. drawdown date Agreement
Cooperative Bank, Hsin 12 yrs from the Loan
Vayi Wisdom S.A. LBC Energy 2011/7/25 None
Wei drawdown date Agreement
12 yrs from the Loan
Atayal Mariner S.A. Atayal Ace E. Sun Bank (Syndicate) 2011/7/28 None
drawdown date Agreement
12 yrs from the Loan
Atayal Brave S.A. Atayal Brave E. Sun Bank (Syndicate) 2011/7/28 None
drawdown date Agreement
12 yrs from the Loan
Atayal Star S.A. Atayal Star E. Sun Bank (Syndicate) 2011/7/28 None
drawdown date Agreement
12.75 yrs from the Loan
Atayal Mariner S.A. Atayal Mariner Bank SinoPac 2011/9/22 None
drawdown date Agreement
Amis Navigation Cooperative Bank, Hsin 8.5 yrs from the Loan
Amis Brave 2011/12/21 None
S.A. Wei (Syndicate) drawdown date Agreement
Cooperative Bank, Hsin 8.5 yrs from the Loan
Bunun Marine S.A. Bunun Ace 2011/12/21 None
Wei (Syndicate) drawdown date Agreement
Bunun Navigation Cooperative Bank, Hsin 8.5 yrs from the Loan
Bunun Wisdom 2011/12/21 None
S.A. Wei (Syndicate) drawdown date Agreement
Cooperative Bank, Hsin 8.5 yrs from the Loan
GS Navigation S.A. Genius Star XI 2011/12/21 None
Wei (Syndicate) drawdown date Agreement
Cooperative Bank, Hsin 8.5 yrs from the Loan
GS Global S.A. Genius Star XII 2011/12/21 None
Wei (Syndicate) drawdown date Agreement
Katagalan Cooperative Bank, Hsin 8.5 yrs from the Loan
Katagalan Line S.A. 2011/12/21 None
Wisdom III Wei (Syndicate) drawdown date Agreement
Poavosa Poavosa Wisdom Cooperative Bank, Hsin 8.5 yrs from the Loan
2011/12/21 None
International S.A. VII Wei (Syndicate) drawdown date Agreement
Poavosa Maritime Poavosa Wisdom Cooperative Bank, Hsin 8.5 yrs from the Loan
2011/12/21 None
S.A. VIII Wei (Syndicate) drawdown date Agreement
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Business Overview 96

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Contract Nature of Restrictive
Company Name Vessel Name Counterparty Period
Date Contract Clauses
Cooperative Bank, Hsin 8.5 yrs from the Loan
Tao Ace S.A. Tao Ace 2011/12/21 None
Wei (Syndicate) drawdown date Agreement
Cooperative Bank, Hsin 8.5 yrs from the Loan
Tao Treasure S.A. Tao Treasure 2011/12/21 None
Wei (Syndicate) drawdown date Agreement
Sakizaya Marine 8 yrs from the Loan
Sakizaya Ace Mega Bank, Chung Shan 2013/1/30 None
S.A. drawdown date Agreement
First Bank, Ho Ping 8.5 yrs from the Loan
Amis Star S.A. Amis Ace 2013/4/24 None
(Syndicate) drawdown date Agreement
First Bank, Ho Ping 8.5 yrs from the Loan
Amis Mariner S.A. Amis Champion 2013/4/24 None
(Syndicate) drawdown date Agreement
First Bank, Ho Ping 8.5 yrs from the Loan
Amis Carriers S.A. Amis Dolphin 2013/4/24 None
(Syndicate) drawdown date Agreement
First Bank, Ho Ping 8.5 yrs from the Loan
Sakizaya Line S.A. Sakizaya Brave 2013/4/24 None
(Syndicate) drawdown date Agreement
Katagalan First Bank, Ho Ping 8.5 yrs from the Loan
Scarlet Eagle 2013/4/24 None
Navigation S.A. (Syndicate) drawdown date Agreement
Amis International First Bank, Ho Ping 8.5 yrs from the Loan
Scarlet Falcon 2013/4/24 None
S.A. (Syndicate) drawdown date Agreement
Sakizaya Navigation Sakizaya 8 yrs from the Loan
Mega Bank, Central 2013/7/1 None
S.A. Champion drawdown date Agreement
Poavosa Navigation 10 yrs from the Loan
Poavosa Ace Credit Suisse 2013/9/16 None
S.A. drawdown date Agreement
Daiwan Champion Daiwan Amberjack Marine 7 yrs from the Loan
2014/3/28 None
S.A. Champion S.A.(Tokyo Century) drawdown date Agreement
Katagalan Carriers Dialease Maritime S.A. 15 yrs from the Loan
Scarlet Rosella 2014/3/28 None
S.A. (MUJFL) drawdown date Agreement
Dialease Maritime S.A. 8 yrs from the Loan
Bunun Fortune S.A. Bunun Fortune 2014/4/25 None
(MUJFL) drawdown date Agreement
Daiwan Dolphin Amberjack Marine 7 yrs from the Loan
Daiwan Dolphin 2014/5/23 None
S.A. S.A.(Tokyo Century) drawdown date Agreement
10 yrs from the Loan
Bunun Brave S.A. Bunun Brave Credit Suisse 2014/6/30 None
drawdown date Agreement
10 yrs from the Loan
Bunun Champion Bunun Champion Credit Suisse 2014/6/30 None
drawdown date Agreement
Bunun Elegance 8 yrs from the Loan
Bunun Elegance Mega Bank, Central 2014/9/2 None
S.A. drawdown date Agreement
Daiwan Elegance 8 yrs from the Loan
Daiwan Elegance Mega Bank, Chung Shan 2014/9/2 None
S.A. drawdown date Agreement
8 yrs from the Loan
Daiwan Fortune S.A. Daiwan Fortune Mega Bank, Chung Shan 2014/9/2 None
drawdown date Agreement
8 yrs from the Loan
Bunun Dynasty S.A. Bunun Dynasty BNP Paribas 2014/10/21 None
drawdown date Agreement
Dialease Maritime S.A. 7 yrs from the Loan
Amis Fortune S.A. Amis Fortune 2014/11/17 None
(MUJFL) drawdown date Agreement
SLSS SHIPPING S.A. 5 yrs from the Loan
Daiwan Glory S.A. Daiwan Glory 2014/12/12 None
(Showa Leasing) drawdown date Agreement
Sakizaya Diamond Sakizaya Bank of Taiwan, Hsin 8 yrs from the Loan
2015/1/6 None
S.A. Diamond Chuang drawdown date Agreement
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Contract Nature of Restrictive
Company Name Vessel Name Counterparty Period
Date Contract Clauses
Fourseas Mritime 8 yrs from the Loan
Bunun Glory First Bank, Ho Ping 2015/3/20 None
S.A. Panama drawdown date Agreement
Sakizaya Fortune 8 yrs from the Loan
Sakizaya Future Mega Bank, Central 2015/11/19 None
S.A. drawdown date Agreement
Triumph Wisdom Dialease Maritime S.A. 6 yrs from the Loan
Amis Glory 2015/12/9 None
S.A. (MUJFL) drawdown date Agreement
Dialease Maritime S.A. 7 yrs from the Loan
Siraya Wisdom S.A. Siraya Wisdom 2015/12/9 None
(MUJFL) drawdown date Agreement
8 yrs from the Loan
Daiwan Justice S.A. Daiwan Justice Mega Bank, Chung Shan 2016/3/7 None
drawdown date Agreement
8 yrs from the Loan
Daiwan Kalon S.A. Daiwan Kalon Mega Bank, Chung Shan 2016/3/11 None
drawdown date Agreement
8.5 yrs from the Loan
Daiwan Hero S.A. Daiwan Hero Bank of Taiwan (Syndicate) 2016/4/18 None
drawdown date Agreement
8.5 yrs from the Loan
Daiwan Infinity S.A. Daiwan Infinity Bank of Taiwan (Syndicate) 2016/4/18 None
drawdown date Agreement
Sakizaya Justice 8.5 yrs from the Loan
Sakizaya Justice Bank of Taiwan (Syndicate) 2016/4/18 None
S.A. drawdown date Agreement
Hoanya Wisdom 7 yrs from the Loan
Hoanya Wisdom The Higashi Nippon Bank 2016/5/25 None
S.A. drawdown date Agreement
7 yrs from the Loan
Taokas Wisdom S.A. Taokas Wisdom The Higashi Nippon Bank 2016/5/25 None
drawdown date Agreement
5 yrs from the Loan
Sakizaya Hero S.A. Sakizaya Hero Bank SinoPac 2016/7/28 None
drawdown date Agreement
8.5 yrs from the Loan
Bunun Infinity S.A. Bunun Infinity Hua Nan Bank, Hsin Wei 2016/9/6 None
drawdown date Agreement
Sakizaya Integrity Bank of Taiwan, Hsin 8.5 yrs from the Loan
Sakizaya Integrity 2016/9/29 None
S.A. Chuang drawdown date Agreement
Katagalan Marine Katagalan 5 yrs from the Loan
Bank SinoPac 2016/10/21 None
S.A. Wisdom drawdown date Agreement
Fraternity Ship 5 yrs from the Loan
Beagle II Sunny Bank, Pan Chiao 2016/12/30 None
Investment S.A. drawdown date Agreement
8 yrs from the Loan
Amis Hero S.A. Amis Hero Chang Hwa Bank 2017/3/24 None
drawdown date Agreement
8 yrs from the Loan
Sakizaya Kalon S.A. Sakizaya Kalon Mega Bank, Central 2017/4/5 None
drawdown date Agreement
Sakizaya Leader 8 yrs from the Loan
Sakizaya Leader Mega Bank, Central 2017/4/5 None
S.A. drawdown date Agreement
Bank of Taiwan, Lian 8.5 yrs from the Loan
Bunun Justice S.A. Bunun Justice 2017/4/5 None
Cheng drawdown date Agreement
5 yrs from the Loan
Papora Wisdom S.A. Papora Wisdom Taichung Bank 2017/6/30 None
drawdown date Agreement
SLSS SHIPPING S.A. 5 yrs from the Loan
Amis Integrity S.A. Amis Integrity 2017/7/6 None
(Showa Leasing) drawdown date Agreement
8 yrs from the Loan
Amis Justice S.A. Amis Justice The Iyo Bank 2017/8/22 None
drawdown date Agreement
8.5 yrs from the Loan
Sakizaya Power S.A. Sakizaya Power Hua Nan Bank, Hsin Wei 2017/8/25 None
drawdown date Agreement
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Contract Nature of Restrictive
Company Name Vessel Name Counterparty Period
Date Contract Clauses
Sakizaya Orchid 5 yrs from the Loan
Sakizaya Orchid Bank SinoPac 2017/10/6 None
S.A. drawdown date Agreement
5 yrs from the Loan
Amis Miracle S.A. Amis Miracle Bank SinoPac 2017/12/21 None
drawdown date Agreement
Genius Star Carriers 8 yrs from the Loan
Joseph Wisdom The Iyo Bank 2018/1/4 None
S.A. drawdown date Agreement
5 yrs from the Loan
Adixi Wisdom S.A. Bunun Kalon En Tie Bank 2018/1/5 None
drawdown date Agreement
Sakizaya Respect 8 yrs from the Loan
Sakizaya Respect BNP Paribas 2018/4/11 None
S.A. drawdown date Agreement
Sakizaya Miracle 5 yrs from the Loan
Sakizaya Miracle Taichung Bank (Syndicate) 2018/4/27 None
S.A. drawdown date Agreement
5 yrs from the Loan
Dumun Marine S.A. Amis Leader En Tie Bank 2018/6/27 None
drawdown date Agreement
5 yrs from the Loan
Guma Marine S.A. Amis Kalon En Tie Bank 2018/6/27 None
drawdown date Agreement
5 yrs from the Loan
Tao Star S.A. Tao Star Bank SinoPac 2018/7/24 None
drawdown date Agreement
Cooperative Bank, Hsin 8 yrs from the Loan
Amis Nature Inc. Amis Nature 2018/7/30 None
Wei drawdown date Agreement
10 yrs from the Loan
Genius Marine S.A. Amis Power New Roman S.A. (ORIX) 2018/9/7 None
drawdown date Agreement
5 yrs from the Loan
Daiwan Leader S.A. Daiwan Leader Shinsei Bank 2018/11/14 None
drawdown date Agreement
5 yrs from the Loan
Daiwan Miracle S.A. Daiwan Miracle Bank SinoPac 2019/3/26 None
drawdown date Agreement
Sakizaya Wisdom 4 yrs from the Loan
Sakizaya Wisdom Taichung Bank 2019/5/28 None
S.A. drawdown date Agreement
Luilang Wisdom 8 yrs from the Loan
Bunun Leader Cooperative Bank, Taipei 2019/7/17 None
S.A. drawdown date Agreement
Trobian Wisdom 8 yrs from the Loan
Amis Treasure Mega Bank, Chung Shan 2019/8/23 None
S.A. drawdown date Agreement
Winsome Wisdom 5 yrs from the Loan
Ocean Victory En Tie Bank 2019/8/27 None
S.A. drawdown date Agreement
4 yrs from the Loan
Unicorn Marine S.A. Poavosa Brave Taichung Bank 2019/12/5 None
drawdown date Agreement
5 yrs from the Loan
Taokas Marine S.A. Daiwan Wisdom Hua Nan Bank, Hsin Wei 2019/12/26 None
drawdown date Agreement
Poavosa Wisdom 5 yrs from the Loan
Poavosa Wisdom Hua Nan Bank, Hsin Wei 2019/12/26 None
S.A. drawdown date Agreement
Cooperative Bank, Hsin 8 yrs from the Loan
Mount Wisdom S.A. Sakizaya Star 2020/3/4 None
Wei drawdown date Agreement
Guma Navigation Bank of Taiwan, Hsin 8.5 yrs from the Loan
Amis Respect 2020/3/13 None
S.A. Chuang drawdown date Agreement
Mercy Marine Line 10 yrs from the Loan
Amis Unicorn Taipei Fubon Bank, An Ho 2020/3/18 None
S.A. drawdown date Agreement
8.5 yrs from the Loan
Katagalan Star S.A. Bunun Miracle Hua Nan Bank, Hsin Wei 2020/4/23 None
drawdown date Agreement
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Business Overview 99

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Contract Nature of Restrictive
Company Name Vessel Name Counterparty Period
Date Contract Clauses
10 yrs from the Loan
Lloa Wisdom S.A. Sakizaya Treasure The Export-Import Bank 2020/6/10 None
drawdown date Agreement
Hibiscus,
Magnate, Wisdom
Grace, Genius
Star VIII, Beagle
Wisdom VII
Wisdom Marine 2nd preferred Mega Bank, Central 2020/6/17 3 yrs from the Loan None
Lines Co., Ltd. mortgage: (Syndicate) drawdown date Agreement
Sakizaya Future,
Sakizaya Kalon,
Sakizaya Leader,
Amis Wisdom I,
Amis Wisdom II
Katagalan Wisdom Esperance Line S.A. (NTT 5 yrs from the Loan
Clear Horizon 2020/7/8 None
S.A. Finance Corporation) drawdown date Agreement
Unicorn Successor 5 yrs from the Loan
Taikli Bank SinoPac 2020/8/10 None
S.A. drawdown date Agreement
8 yrs from the Loan
Amis Victory S.A. Amis Victory Chang Hwa Bank 2020/8/18 None
drawdown date Agreement
7 yrs from the Loan
Bunun Hero S.A. Bunun Hero Bank of Panhsin 2020/8/19 None
drawdown date Agreement
Kavalan Wisdom 6 yrs from the Loan
Blue Horizon Hua Nan Bank, Hsin Wei 2020/9/17 None
S.A. drawdown date Agreement
8 yrs from the Loan
Bunun Noble Inc. Bunun Noble BNP Paribas 2020/9/23 None
drawdown date Agreement
8 yrs from the Loan
Elite Steamship S.A. Amis Wealth Chang Hwa Bank 2020/11/27 None
drawdown date Agreement
5 yrs from the Loan
Amis Elegance S.A. Amis Elegance Taichung Bank 2021/1/18 None
drawdown date Agreement
Favoran Wisdom Esperance Line S.A. (NTT 5 yrs from the Loan
Bunun Orchid 2021/2/17 None
S.A. Finance Corporation) drawdown date Agreement
Sakizaya Unicorn Cooperative Bank, Hsin 8 yrs from the Loan
Sakizaya Unicorn 2021/3/12 None
S.A. Wei (Syndicate) drawdown date Agreement
Sakizaya Victory Cooperative Bank, Hsin 8 yrs from the Loan
Sakizaya Victory 2021/3/12 None
S.A. Wei (Syndicate) drawdown date Agreement
Fraternity Marine 8 yrs from the Loan
Bunun Respect The Iyo Bank 2021/3/15 None
S.A. drawdown date Agreement
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5.6.2 Newbuilding Contracts

Company Name		Counterparty		Delivery (Est.)		Restrictiv e Clauses
			Contract
	Vessel Name				Vessel Type
			Date


Wisdom Marine Lines S.A.	Bunun Respect	Namura Shipbuilding Co., Ltd.	2019/7/16	2021/Q2	38,000 dwt bulk carrier	None
Wisdom Marine Lines S.A.	Sakizaya Victory	Japan Marine United Corporation	2018/11/29	2021/Q2	82,400 dwt bulk carrier	None

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100

Business Overview

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Contract Restrictiv
Company Name Vessel Name Counterparty Delivery (Est.) Vessel Type
Date e Clauses
Wisdom Marine Onomichi Dockyard Co., 37,000 dwt None
Bunun Power 2019/12/16 2021/Q2
Lines S.A. Ltd. bulk carrier
Wisdom Marine 4,740 dwt None
Jacques M.H. Progess Lins S.A. 2021/2/2 2021/Q3
Lines S.A. LPG carrier
Wisdom Marine Onomichi Dockyard Co., 37,000 dwt None
695 2019/12/16 2022/Q1
Lines S.A. Ltd. bulk carrier
Wisdom Marine Onomichi Dockyard Co., 37,000 dwt None
696 2019/12/16 2022/Q1
Lines S.A. Ltd. bulk carrier
Wisdom Marine 37,800 dwt None
SA243 Giant Line Inc., S.A. 2019/7/29 2022/Q1
Lines S.A. bulk carrier
Wisdom Marine Tsuneishi Group (Zhoushan) 82,300 dwt None
SS290 2019/11/22 2022/Q1
Lines S.A. Shipbuilding Inc. bulk carrier
Wisdom Marine Tsuneishi Group (Zhoushan) 82,300 dwt None
SS291 2019/11/22 2022/Q2
Lines S.A. Shipbuilding Inc. bulk carrier
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5.6.3 Time Charter Parties

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Nature of Restrictive
Company Name Vessel Name Counterparty Contract Date Period
Contract Clauses
8 yrs from
Amis Mariner S.A. Amis Champion Viterra Chartering B.V. 2013/7/30 Time Charter None
the delivery
8 yrs from
Amis Carriers S.A. Amis Dolphin Viterra Chartering B.V. 2013/7/30 Time Charter None
the delivery
2 yrs from
Genius Marine S.A. Amis Power Drylog Trading UK 2017/3/24 Time Charter None
the delivery
Wisdom Marine 5 yrs from
Amis Queen Viterra Chartering B.V. 2017/9/25 Time Charter None
Lines S.A. the delivery
Wisdom Marine
5 yrs from
Lines S.A. as Amis Queen Shoei Kisen Kaisha, Ltd. 2017/3/24 Time Charter None
the delivery
charterers
Kavalan Wisdom Nippon Yusen Kaisha, 15 yrs from
Blue Horizon 2018/10/31 Time Charter None
S.A. Tokyo, Japan the delivery
Luilang Wisdom Naviera Chilena Del 7 yrs from
Bunun Leader 2012/5/7 Time Charter None
S.A. Pacifico S.A. the delivery
Katagalan Wisdom Nippon Yusen Kaisha, 15 yrs from
Clear Horizon 2013/4/8 Time Charter None
S.A. Tokyo, Japan the delivery
Dumun Navigation Frontier Bonanza [Nippon Yusen Kaisha, ] 2017/11/24 15 yrs from Time Charter None
S.A. Tokyo, Japan the delivery
Genius Star 6 yrs from
Joseph Wisdom Geogas Trading S.A. 2012/6/4 Time Charter None
Carriers S.A. the delivery
NYK Bulkship (Atlantic) 15 yrs from
Vayi Wisdom S.A. LBC Energy 2010/9/1 Time Charter None
N.V., Antwerp, Belgium the delivery
Ligulao Wisdom 12 yrs from
Ligulao Eastern Car Liner, Ltd. 2016/2/26 Time Charter None
S.A. the delivery
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101

Business Overview

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Nature of Restrictive
Company Name Vessel Name Counterparty Contract Date Period
Contract Clauses
Sakizaya Diamond Sakizaya 8 yrs from
Viterra Chartering B.V. 2011/9/1 Time Charter None
S.A. Diamond the delivery
Sakizaya Glory Sakizaya 8 yrs from
Viterra Chartering B.V. 2010/8/26 Time Charter None
S.A. Elegance the delivery
Sakizaya Orchid 6 yrs from
Sakizaya Orchid COFCO Agri Freight S.A. 2018/3/30 Time Charter None
S.A. the delivery
Sakizaya Power 5 yrs from
Sakizaya Power COFCO Agri Freight S.A. 2013/6/25 Time Charter None
S.A. the delivery
Sakizaya Queen 5 yrs from
Sakizaya Queen COFCO Agri Freight S.A. 2013/6/25 Time Charter None
S.A. the delivery
Katagalan 15 yrs from
Scarlet Eagle TSC0212 Shipping S.A. 2017/8/28 Time Charter None
Navigation S.A. the delivery
Katagalan Carriers 15 yrs from
Scarlet Rosella OSC10706 Shipping S.A. 2017/8/28 Time Charter None
S.A. the delivery
Unicorn Successor 12 yrs from
Taikli Eastern Car Liner, Ltd. 2017/8/28 Time Charter None
S.A. the delivery
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5.6.4 Bareboat Charter Parties

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Nature of Restrictive
Company Name Vessel Name Counterparty Contract Date Period
Contract Clauses
Norma Shipping 9.5 yrs from the Bareboat
Sakizaya Glory S.A. Sakizaya Elegance 2015/10/16 None
Cooperation delivery Charter
Marineway
9.5 yrs from the Bareboat
Sakizaya Glory S.A. Sakizaya Glory Shipping 2016/3/3 None
delivery Charter
Corporation
Zelkova Maritime 7 yrs from the Bareboat
Taroko Maritime S.A. Amis Orchid 2017/7/12 None
S.A. delivery Charter
Sea Green Shipping 7 yrs from the Bareboat
Sakizaya Queen S.A. Sakizaya Queen 2018/1/12 None
S.A. delivery Charter
Taokas Navigation Fortunate Transport 7 yrs from the Bareboat
Paiwan Wisdom 2018/8/24 None
S.A. S.A. delivery Charter
Wisdom Marine Lines Sea Green Shipping 7 yrs from the Bareboat
Mega Benefit 2018/12/28 None
Co., Ltd. S.A. delivery Charter
8.75 yrs from the Bareboat
Taivoan Wisdom S.A. Amis Star TLC Cosmos Ltd. 2019/11/18 None
delivery Charter
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102

Business Overview

5.6.5 Ship Management Contracts

Company Name		Counterparty		Period	Nature of Contract	Restrictive Clauses
	Vessel Name		Contract Date

Wisdom Marine Lines S.A.	As nominated	Benefit Transport S.A.	2017/5/31	Valid until being notified in writing 30 days prior to the intended termination date.	Ship Management Contract	None

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103

Business Overview

6. Financial Information

6.1 Five-Year Financial Summary

6.1.1 Condensed Balance Sheet

6.1.1.1 Consolidated Condensed Balance Sheet – Based on IFRS

Unit: NT$ thousands

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Year Financial Summary for The Last Five Years （ Note 1 ）
Item 2016 2017 2018 2019 2020
Current assets 2,810,558 3,656,183 3,339,375 5,136,737 3,493,823
Property, Plant and Equipment 79,463,626 79,416,557 84,196,177 75,187,933 73,422,324
- - - - -
Intangible assets
Other assets 3,377,431 1,992,453 1,399,300 6,572,991 5,495,448
Total assets 85,651,615 84,974,193 88,934,852 86,897,661 78,917,772
Before distribution 11,294,297 10,033,331 12,075,235 15,387,095 9,165,735
Current
liabilities After distribution
11,851,161 10,650,039 13,029,526 16,420,828 9,912,144
（ Note 2 ）
Non-current liabilities 45,492,249 48,741,101 48,752,324 42,206,905 46,749,624
Before distribution 56,786,546 58,774,432 60,827,559 57,594,000 55,915,359
Total
liabilities After distribution
57,343,410 59,391,140 61,781,850 58,627,733 56,661,768
（ Note 2 ）
Equity attributable to
28,749,479 26,199,761 28,107,293 29,303,661 26,496,236
shareholders of the parent
Common stock 5,549,741 6,167,076 6,298,055 6,891,074 7,464,092
Before distribution 1,971,794 1,612,164 1,250,933 1,386,689 631,675
Capital
surplus After distribution 1,136,498 995,456 296,642 180,665 34.548
（ Note 2 ）
Legal reserve 224 224 224 224 224
Before distribution 11,625,111 12,043,086 13,851,985 16,050,453 16,161,603
Retained
earnings After distribution 11,625,111 12,043,086 13,851,985 16,050,453 16.012.321
（ Note 2 ）
Other equity interest 9,602,609 6,377,211 6,706,096 4,975,445 2,238,642
- - - - -
Treasury stock
- - - -
Non-controlling interest 115,590
Before distribution 28,865,069 26,199,761 28,107,293 29,303,661 26,496,236
Total
equity After distribution 28,308,205 25,583,053 27,153,002 28,269,928 25,749,827
（ Note 2 ）
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Note 1 ： The data for 2016~2020 are based on consolidated financial statement already audited and certified by CPAs. Note 2 ： The Distribution of 2020 has approves by the Board of Director on March 26, 2021 and submitted to the AGM for approval by the shareholders of the Company.

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104

Financial Information

6.1.1.2 Consolidated Condensed Statement of Comprehensive Income – Based on IFRS

Unit:NT$ thousands

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Year Financial Summary for The Last Five Years （ Note 1 ）
Item 2016 2017 2018 2019 2020
Operating revenues 10,678,876 11,038,548 13,067,626 13,833,457 11,939,433
Gross profit 1,754,521 2,036,269 3,636,284 3,569,547 1,657,239
Profit from operating activities 1,601,177 1,876,056 3,474,823 3,407,919 1,498,019
Non-operating income and expense -204,096 -1,457,072 -1,661,595 -1,191,891 -1,370,760
Profit before income tax 1,397,081 418,984 1,829,555 2,216,028 127,259
Income from Continuing
1,397,081 418,984 1,809,206 2,198,583 111,414
Operation
- - - - -
Loss on discontinued operations
Profit for the year 1,393,186 418,327 1,809,206 2,198,583 111,414
Other comprehensive income
-1,961,214 -3,232,998 328,578 -1,730,990 -2,736,843
(income after tax)
Total comprehensive income -568,028 -2,814,671 2,137,784 467,593 -2,625,429
Profit for the year attributable to
1,399,776 417,981 1,809,206 2,198,583 111,414
Owners of the Company
Profit for the year attributable to -6,590 436 - - -
non-controlling interest
Comprehensive income attributable
-558,857 -2,807,423 2,137,784 467,593 -2,625,429
to Owners of the Company
Comprehensive income attributable - - -
-9,171 -7,248
to non-controlling interest
Earnings per share （ NT$ ）（ Note
2.56 0.71 2.92 3.38 0.15
2 ）
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Note 1 ： The data for 2016~2020 are based on consolidated financial statement already audited and certified by CPAs. Note 2 ： Primary earnings per Share

6.1.2 Auditors’ Opinions from 2016 to 2020

Year	Accounting Firm	CPA Audit Opinion	CPA Audit Opinion
2016 Ernst & Young, Taiwan Lin, Li Huang and Fuh, Wen Fun Unqualified Opinion
2017 Ernst & Young, Taiwan Lin, Li Huang and Fuh, Wen Fun Unqualified Opinion
2018 Ernst & Young, Taiwan Lin, Li Huang and Fuh, Wen Fun Unqualified Opinion
2019 Ernst & Young, Taiwan Lin, Li Huang and Fuh, Wen Fun Unqualified Opinion
2020	Ernst & Young, Taiwan	Lin, Li Huang and Lu, Chian Uen	Unqualified Opinion

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105

Financial Information

6.2 Five-Year Financial Analysis

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Year Financial Analysis for the Last Five Years （ Note 1 ）
Item 2016 2017 2018 2019 2020
Financial Debt Ratio （ % ） 66.30 69.17 68.40 66.28 67.85
structure
Ratio of long-term capital to property, plant
(%) and equipment （ % ） 93.43 94.36 91.29 95.11 99.76
Current ratio （ % ） 24.88 35.53 27.65 33.38 38.12
Solvency
Quick ratio （ % ） 22.29 34.38 24.94 30.78 33.08
(%)
Interest earned ratio (times) 2.20 1.31 2.05 2.22 1.10
Accounts receivable turnover (times) 67.92 85.56 104.07 74.43 66.41
Average collection period 5.37 4.26 3.50 4.90 5.49
Inventory turnover (times) 88.45 78.22 76.61 64.44 42.51
Operating
Accounts payable turnover (times) 74.65 55.18 38.20 37.55 34.40
performanc
e Average days in sales 4.12 4.66 4.76 5.66 8.58
Property, plant and equipment turnover
0.13 0.14 0.16 0.18 0.16
(times)
Total assets turnover (times) 0.12 0.13 0.15 0.16 0.14
Return on total assets （ % ） 3.02 2.05 4.07 4.57 1.62
Return on stockholders' equity （ % ） 4.81 1.52 6.66 7.66 0.40
Pre-tax income to Income from operations 28.85 30.42 55.17 49.45 20.07
Profitability paid-in capital
（ % ） Income before tax 25.29 6.79 28.79 32.16 1.70
Profit ratio （ % ） 13.11 3.79 13.84 15.89 0.93
Earnings per share (NT$) 2.69 0.71 2.92 3.38 0.15
Cash flow ratio （ % ） 48.25 46.28 50.02 42.59 51.85
Cash flow Cash flow adequacy ratio （ % ） 44.36 49.33 64.78 118.86 70.18
Cash reinvestment ratio （ % ） 4.50 4.31 5.36 6.04 3.83
Operating leverage 3.48 3.11 2.21 2.33 4.07
Leverage
Financial leverage 3.68 3.44 1.99 2.14 6.23
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Note 1 ： The data for 2016~2020 are based on consolidated financial statement already audited and certified by CPAs.

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106

Financial Information

6.2.1 The equations of preceding financial analysis are as the following ：

6.2.1.1 Financial Structure

Liabilities-to-assets ratio ＝ total liabilities ／ total assets 。
Ratio of long-term fund to property, plant and equipment ＝（ total shareholders’ equity ＋ noncurrent liabilities ）／ net property, plant and equipment

6.2.1.2 Solvency

Current ratio ＝ current assets ／ current liabilities
Quick ratio ＝（ current assets － inventory － prepaid expense ）／ current liabilities
Interest protection multiples ＝ net income before tax and interest expense payment ／ current year’s interest expense

6.2.1.3 Management capacity

Accounts receivable turnover ratio （ including accounts receivable and notes receivable resulted from business operation ）＝ net sales ／ average balance of accounts receivable （ including accounts receivable and notes receivable resulted from business operation ）
Average collection days ＝ 365 ／ accounts receivable turnover ratio
Inventory turnover ratio ＝ cost of goods sold ／ average inventory
Accounts payable turnover ratio （ including accounts payable and notes payable resulted from business operation ）＝ cost of goods sold ／ average balance of accounts payable （ including accounts payable and notes payable resulted from business operation ）
Average inventory days ＝ 365 ／ Inventory turnover ratio
Property, plant and equipment turnover ratio ＝ net sales ／ net property, plant and equipment
Total assets turnover ratio ＝ net sales ／ net assets

6.2.1.4 Profitability

Rate of return on assets ＝［ after-tax income ＋ interest expense× （ 1 － tax rate ）］／ total assets Note ： The Company is foreign company, need not count the tax rate.
Rate of return on equity ＝ after-tax income ／ total equity
Net profit ratio ＝ after-tax income ／ net sales
Earnings per share ＝（ profit attributable to owners’ of the Company ）／ weighted average number of shares

6.2.1.5 Cash flow

Cash flow ratio ＝ cash flow from operating activities ／ current liabilities
Net cash flow adequacy ratio ＝ cash flow from operating activities in the five most recent years ／（ capital expenditure ＋ inventory increase ＋ cash dividends ） in the five most recent years
－
Cash reinvestment ratio ＝（ cash flow from operating activities cash dividends ）／（ gross property, plant and equipment ＋ long-term investments ＋ other non-current assets ＋ operating fund ）

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107

Financial Information

6.2.1.6 Leverage

－
Operating leverage ＝（ net operating revenue variable operating costs and expenses ）／ profit from operating activities
Financial leverage ＝ profit from operating activities ／（ profit from operating activities － interest expense ）。

6.2.2 Analysis of financial ratio differences exceed 20% for the last two years ：

Interest protection multiples decrease ： due to profit from operating activities ／ income before tax decrease
Inventory turnover ratio decrease ： due to average inventory is more than last year.
Average inventory days increase ： due to average inventory is more than last year.
Rate of return on assets decrease ： due to after-tax income is less than last year.
Rate of return on equity decrease ： due to after-tax income is less than last year.
Profit from operating activities to paid-in capital decrease ： due to profit from operating activities is less than last year.
Profit from operating activities ／ income before tax to paid-in capital decrease ： due to profit from operating activities ／ income before tax is less than last year.
Net profit ratio decrease ： due to after-tax income is less than last year.
Earning per share decrease ： due to profit attributable to owners’ of the Company increase
Net cash flow adequacy ratio decrease ： due to net cash flows from operating activities decrease.
Cash reinvestment ratio decrease ： due to net cash flows from operating activities decrease.
Operating leverage increase ： due to profit from operating activities decrease.
Financial leverage increase ： due to profit from operating activities decrease.

6.3 Audit Committee’s Report for the Most Recent Year

Please refer to page 138.

6.4 Consolidated Financial Statements for the Years Ended December 31, 2020, and Independent Auditors’ Report

Please refer to page 139 ~ 232.

6.5 A parent company only financial statement for the most recent fiscal year,

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108

Financial Information

certified by a CPA

None.

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109

Financial Information

7. Financial Conditions, Business Results and Risk Analysis

7.1 Financial Overview

7.1.1 Financial Status Analysis

Unit: NT$000; %

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2019 2020 Increase/Decrease
Description
Amount % Amount % Amount %
Mainly attributed to decrease in
Current assets 5,136,737 5.91 3,493,823 4.24 -1,642,914 -31.98
cash and cash equivalents
Mainly attributed to increase in
Fixed assets 75,187,933 86.52 73,422,324 89.09 -1,765,609 -2.35
vessel depreciation.
Mainly attributed to payment at
Current long- maturity of current long-term
10,947,275 12.60 5,019,044 6.09 -5,928,231 -54.15
term loans loans or extended loans moved to
long-term loans.
Mainly attributed to payment at
Long-term maturity of current long-term
33,013,450 37.99 36,855,312 44.72 3,841,862 11.64
borrowings loans or extended loans moved to
long-term loans.
Lease Mainly attributed to decrease in
obligations- 3,551,213 4.09 3,097,902 3.76 -453,311 -12.76 lease payments payable on capital
Noncurrent leases for ships.
Long-term Mainly attributed to increase in
4,270,130 4.91 5,335,752 6.47 1,065,622 24.96
payables related-party financing.
Common share Mainly attributed to the capital
6,891,074 7.93 7,464,092 9.06 573,018 8.32
capital increase.
Mainly attributed to dividend
Capital surplus 1,386,689 1.60 631,675 0.77 -755,014 -54.45 distribution out of capital surplus
and decrease in stock price.
Retained Mainly attributed to increase in
16,050,229 18.47 16,161,603 19.61 111,374 0.69
earnings net profit of current period
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7.2 Business Results

7.2.1 Business Result Analysis

Unit: NT$000; %

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Year 2019 2020 Increase/Decrease
Description
Amount % Amount % Amount %
Item
Mainly attributed to adverse conditions
Operating
13,833,457 100.00 11,939,433 100.00 -1,894,024 -13.69 in the dry bulk shipping market caused
income
by the coronavirus.
Depreciation An annual increase of 2.75% in US
4,535,048 32.78 4,442,490 37.21 -92,558 -2.04
expense dollars mainly attributed to a larger fleet.
Operating costs 10,263,910 74.20 10,282,194 86.12 18,284 0.18 Mainly attributed to increase in the
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110

Financial Conditions, Business Results and Risk Analysis

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Year 2019 2020 Increase/Decrease
Description
Amount % Amount % Amount %
Item
number of active vessels
Mainly attributed to adverse conditions
Net operating
3,407,919 24.64 1,498,019 12.55 -1,909,900 -56.04 in the dry bulk shipping market caused
income
by the coronavirus.
Mainly attributed to compensation from
Non-operating
772,264 5.58 10,102 0.05 -762,162 -98.69 the charterer for their early termination
income
of the time charter last year.
Gain/loss on the
-
Mainly attributed to the absence of ship
disposal of 99,976 0.72 0 0.00 -99,976
100.00 disposal this year.
fixed assets
Interest Mainly attributed to US dollar rate cuts
1,816,179 13.13 1,257,470 10.53 -558,709 -30.76
expenses this year.
Foreign
Mainly attributed to US dollar
exchange -74,142 -0.54 -244,808 -2.05 -170,666 230.19
depreciation this year.
gain/loss
Mainly attributed to adverse conditions
Net income
2,216,028 16.02 127,259 1.07 -2,088,769 -94.26 in the dry bulk shipping market caused
before tax
by the coronavirus.
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7.3 Cash Flow

7.3.1 Cash Flow Analysis

Unit: NT$000; %

	2019	2020	Increase /Decrease	Increase /Decrease (%) Change analysis	Increase /Decrease (%) Change analysis
Operating activities 6,553,271 4,752,461 -1,800,810 -27.48 Mainly attributed to decrease in net profit before tax.
Investing activities -2,086,236 -6,549,881 -4,463,645 213.96 Mainly attributed to decrease in newbuilding investment.
Financing activities	-3,191,024	440,776	3,631,800	-113.81	Mainly attributed to increase in long-term borrowing.

7.3.2 Cash Flow Analysis for the Coming Year and Plan to Improve Liquidity

Unit: thousand NT$

Beginning cash Expected total cash flow from Expected total cash Expected cash surplus Remedial measures for expected cash deficit	Beginning cash Expected total cash flow from Expected total cash Expected cash surplus Remedial measures for expected cash deficit	Beginning cash Expected total cash flow from Expected total cash Expected cash surplus Remedial measures for expected cash deficit	Beginning cash Expected total cash flow from Expected total cash Expected cash surplus Remedial measures for expected cash deficit	Beginning cash Expected total cash flow from Expected total cash Expected cash surplus Remedial measures for expected cash deficit	Beginning cash Expected total cash flow from Expected total cash Expected cash surplus Remedial measures for expected cash deficit
balance （1） operating activities （2） outflow （3） (deficit) （1）＋（2）-（3） Investment plans Financing plans
587,157	13,713,169	4,610,778	9,689,549	-	-

7.3.2.1 Analysis of Cash Flow Changes in the Coming Year

 Expected net cash flow from operating activities: The dry bulk shipping market is expected to start to recover in the coming year. Revenue from the fleet business can be expected to rise steadily, which can

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Financial Conditions, Business Results and Risk Analysis

lead to a higher cash flow from operating activities.

Expected net cash flow from investing activities: Given the Group's business plan for the coming year, the number of newbuildings is expected to fall slightly compared to the previous year, which can lead to a slightly lower net cash outflow from investing activities.
Expected net cash flow from financing activities: The number of newbuildings is expected to fall slightly in the coming year. Hence, the net cash flow from financing activities is expected to be lower than the previous year.

7.3.2.2 Remedial Action for Expected Cash Deficit and Liquidity Analysis: N/A.

7.4 Effect of Capital Expenditure on Financial Performance in Last Year

Unit: NT$000

Project	Source of funding	Estimated completion date Total funding required (total contract price) & contract price by year	Estimated completion date Total funding required (total contract price) & contract price by year	Estimated completion date Total funding required (total contract price) & contract price by year
Building new ships Self- funding and bank loans Ship delivery dates 8,427,471 (US$299,910,000)			2021年6艘 4,683,427 (US$166,670,000)
			2022年5艘	3,744,044 (US$133,240,000)

The Company has paid a total of US$46,061,000 into the shipbuilding contracts above as at December 31, 2020. The remaining payments will be made at keel installation, launching, and delivery. Financing arrangements for a total of US$28,750,000 of the shipbuilding contracts above have been completed as at December 31, 2020. The Company expects to pay off in installments before July 2022.

 Anticipated benefit

The Group expands the fleet to meet changes in the market and different customer needs. Choosing Japanesebuilt high specification environmentally friendly and energy efficient newbuildings makes it easier to attract the best clients and increase revenue and profits. The Group is thus able to develop more stable funding and more flexible utilization of funds in the long term and make itself more competitive in the process.

7.5 Investment Policy in Last Year, Profit/Loss Analysis, Improvement Plan, and Investment Plan for the Coming Year

To meet operation requirements, the Group manages each ship as an independent company through subsidiaries. Wisdom Marine Lines has direct control of the subsidiaries and makes business plans in the interest of the Group as a whole. There has not been any non-business related investment.

However, as the group’s business continues to grow, the board of directors of the Group passed a resolution for investment on January 29, 2016. The investment plan proposed finding an easily accessible location in Taipei for a headquarters to be built and acquiring 40% share o Pescadores Investment and Development Inc. The Company had later acquired land for an office building on Dunhua South Road in Taipei. The urban renewal project has been approved, and the building permit is pending. With asset valuation returning to

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Financial Conditions, Business Results and Risk Analysis 112

previous levels, the Company recognized a profit of US$4.01 million in the 2020 consolidated financial statements using the equity method. The amount was less than 0.5% of the Group's total investment. The investment is, therefore, expected to have minimal impact on the Company in the future.

7.6 Risk Assessment for Last Year Up To the Publication Date of this Report

7.6.1 Impact of Interest Rate and Exchange Rate Changes and Inflation on the Company's Profit and Response Measures

 Interest rate changes

The nature of its business means the Group has a great need for funds. As a result, it carries a relatively large amount of loans. Interest expense was 13.13% and 10.53% of the revenue in 2019 and 2020, respectively. Furthermore, the Group does not carry any fixed rate liabilities at fair value through profit or loss. Hence, any interest rate change on the closing date is not likely to have any material impact on profits and losses. An interest rate risk sensitivity analysis is included under Note 12.3 in the 2020 financial statements. The Group has accounts with financially sound and well managed banks in Taiwan, Japan, and Europe. The Group evaluates interest rates charged by different banks before deciding on suitable terms. Moreover, the Group, being a well managed company in good credit standing, has stronger bargaining power over banks and benefits from lower financing costs.

 Exchange rate changes

The operating revenue and operating costs of the Group are mostly denominated in U.S. dollars. Exchange rate changes have little impact on the operating revenue from core businesses. Exposure to exchange rate risk exists in foreign currency loans for ships and rises mainly from exchange rate volatility in the Japanese yen. If the U.S. dollar rises/falls by 10% against the Japanese yen (i.e. when the U.S. dollar appreciates/depreciates), the Group's profit and loss in 2020 will increase/decrease by US$7,000,984, and its equity will increase/decrease by US$0. The Group finances ships in installments for a period of eight to ten years. Exchange rate risk is spread across the years in the financing period. In addition, most financing agreements contain a "loan currency conversion" clause for which the Company may apply as needed to counter exchange rate changes.

 Inflation

The Group has not sustained any material impact on profit and loss from inflation. If operating costs rise due to inflation, the Group may adjust prices when signing contracts.

7.6.2 Policy Regarding High-risk, High-Leverage Investments, Loans to Others, Endorsements, Guarantees, and Derivatives, Reasons for Profit or Loss, and Response Measures

 High-risk, high-leveraged investments

The Group focuses on its core businesses and has not ventured into any high risk business in other industries. It aims for stability when devising financial policies and does not make high-leverage investments. Therefore,

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risk exposure is limited.

 Loans to others

Except for borrowings between subsidiaries of the Group, no loans to others were made in last year up to the publication date of this report. In addition, all borrowings between subsidiaries of the Group were approved by the board of directors of the Company and complied with the applicable regulations, and had no impact on profits or losses on the Group's consolidated financial statements.

 Endorsements and guarantees

Except for endorsements and guarantees between subsidiaries of the Group, no endorsements and guarantees were made in last year up to the publication date of this report. In addition, all endorsements and guarantees between subsidiaries of the Group were approved by the board of directors of the Company and complied with the applicable regulations, and had no impact on profits or losses on the Group's consolidated financial statements.

 Derivatives trading

The Group trade derivatives to avoid the exchange rate risk in foreign currency payments. The trading procedures follow the Procedures for the Acquisition or Disposal of Assets and are evaluated regularly as required. Exchange rates in derivatives contracts are provided in advance, and are, therefore, unlikely to cause any material cash flow risk. Moreover, all counterparties are banks with good credit ratings. The chance of encountering credit risk is extremely low.

7.6.3 Future R&D Programs and Expected R&D Investment

Not applicable as the Company operates mainly in the ship management and provides maritime transportation services, but not involved in shipbuilding activities.

7.6.4 Impact of Key Domestic or International Policy or Industry Changes on the Company's Finance and Sales and Response Measures

The Company is registered in the Cayman Islands, while the business entity Wisdom Marine Lines S.A. is incorporated in Panama. Most economic activities in the Cayman Islands take place in the financial services industry. Panama is the world's leading country in the size of ship registry with an open economy and no foreign exchange controls. Political and economic conditions are stable in both countries. As at the publication date of this report, the Company has not learned of any key policy or regulatory changes in the Cayman Islands or in Panama that would have a material impact on the Company's finance or sales.

The Group operates a network of routes that spreads across the world. Contracts and lawsuits may involve the laws of different countries or take place in different countries as cases vary. While the Group has purchased the appropriate insurance policies, it is impossible to guarantee that financial losses and business risks can always be avoided. Hence, the Group's management team requires that employees have a clear understanding of the risks in international operations and an excellent command of foreign languages so to ensure an accurate and timely decision making process in risk management and in crisis management.

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7.6.5 Impact of Technological and Industry Developments on the Company's Finance and Sales and Response Measures

Not applicable as the Group offers shipping services and is not involved in any manufacturing or production activities. Since shipping remains the most economical transportation method at present, it is foreseeable that technological developments should have no material impact on the Company's finance or sales.

7.6.6 Impact of Corporate Image Change on Crisis Management and Response Measures

Not applicable as the Group places great emphasis on corporate governance and there has not been any significant change in its corporate image in last year up to the publication date of this report.

7.6.7 Anticipated Benefits and Possible Risks Associated with Mergers and Acquisitions, and Countermeasures

Not applicable as the Group has not had plans to acquire other companies outside the Group in last year up to the publication date of this report.

7.6.8 Expected Benefits and Potential Risks of Factory Expansion and Response Measures

Not applicable as the Group has not had plans for factory expansion in last year up to the publication date of this report.

7.6.9 Concentration Risk in Procurement or Sales and Response Measures

 Procurement

For the Group, only the costs of fuels and lubricants for ships occupy a relatively large percentage of the annual operating costs. Given lubricant requirements may vary from vessel to vessel, the Company works with four to five international lubricant suppliers on a long-term basis. The Company usually asks for quotes and negotiates with the suppliers before selecting a supplier offering the right specifications at better rates. In addition, the Company tends to negotiate for bulk discounts with suppliers. The practice helps ensure a steady supply. There has not been any incident of supply shortage or disruption causing an impact on shipping operations. In terms of fuel, depending on the length of voyage, route, weather conditions, and level of inventory, the Company considers fuel prices and suppliers at different bunkering ports, and make purchases through fuel brokers or directly from suppliers in order to diversify sources and reduce costs. Meanwhile, the Group is open to new suppliers and always assessing potential business relationships in order to diversify concentration risk in procurement.

 Sales

In last year up to the publication date of this report, except for the largest client, who contributed11.46% of the revenue, no other single client of the Group contributed 10.00% or more of the revenue. Therefore, the Group is not exposed to concentration risk in sales.

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7.6.10 Impact of and Risks in Large Transfer or Change of Equity among Directors, Supervisors, or Principal Shareholders with Over 10% Stake in the Company and Response Measures

Up to the publication date of this report, except for Chairman Lan, who holds a 27.13% stake, no other shareholders hold more than 10% of the shares. There is not likely to be any large transfer of equity to cause any adverse effect on the Company.

7.6.11 Impact of and Risks in Change of Management for the Company and Responding Measures

Not applicable as the Group has not had any change of management in last year up to the publication date of this report.

7.6.12 Litigious or Non-litigious Matters

Concluded or pending litigious, non-litigious, or administrative litigation events involving the Company or any of its directors and supervisors, the president or de facto responsible person of the Company, or a principal shareholder with an over 10% stake and its subsidiary where the outcome may have a material impact on the rights of the Company's shareholders or the prices of its securities:

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Wisdom Fact in contention and amount of
No. Counterparty Status/Progress
Marine Group damages
1 Unicorn R. Piyarelall Regarding the sinking of MV Bingo The prosecution period for this
Fortune S.A. International Pvt. Ltd. on October 13, 2013, R. Piyarelall case has expired in 2020.
International sent through its lawyer a
letter of demand for US$700,000 in
damages. (full insurance coverage)
2 Saysiat Copenship Bulkers Due to the charterers (Copenship US$18,000 was received from
Wisdom S.A. A/S Bulkers A/S) declared bankruptcy in the liquidation distribution in
February 2015, the Company had September 2020. Case closed.
made a claim of US$8 million for the
compensation.
3 Poavosa Algeria Telecom Joint MV Poavosa Ace was suspected to In May 2019, the Algerian court
Navigation Stock Company have damaged submarine cables on ruled that the Company
S.A. October 25, 2015. The plaintiff compensate Algeria Telcom for
Algeria Telecom filed a lawsuit with Euro 440,000. Case closed.
the Algeria Court for US$15 million
in damages. (full insurance
coverage)
4 Tao Mariner MGA International Regarding the damaged cargo incident The insurer Skuld P&I is
S.A. Pte Ltd. on February 12, 2016, the plaintiff currently assisting with
MGA International filed a lawsuit investigation. In litigation.
with the Bombay High Court for
US$3.5 million in damages. (full
insurance coverage)
5 Bunun Justice Lu Rong Yu 58979, Regarding the ship collision on March In January 2020, the Company
S.A. Lu Rong Yu 58869, 30, 2018, the counterparty sent reached a settlement with the
Lu Rong Yuan Yu through its lawyer a letter of demand counterparty and compensated
001 for the Group to provide a standby approximately US $ 560,000.
Case closed.
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Financial Conditions, Business Results and Risk Analysis 116

No.	Wisdom	Counterparty	Fact in contention and amount of	Status/Progress
	Marine Group		damages
			letter of credit for RMB11 million. (full insurance coverage)
6	Sakizaya Kalon S.A.	Pacific Pearl Co., Ltd.	Regarding the ship collision on July 15, 2018, the Group sent through the lawyer a letter of demand for the counterparty to provide a standby letter of undertaking for US$5.7 million, including the salvage cost (full insurance coverage) and the ship’s reparingfee.	In December 2019, the Company had received a letter of undertaking from the counterparty totaling USD 8 million. In litigation.
7	Amis Integrity S.A.	Dry Bulk Singapore Pte Ltd	After the termination of the contract with the charterers on July 12, 2019, the counterparty (sub-tenant) sued the Company in the United States District Court for the District of Oregon, requesting USD 2.5 million for compensation.	In litigation.
8	Poavosa Wisdom S.A.	Emirates NBD Bank PJSC	Due to the dispute of cargo receiver’s identity during discharge in January 2019, the counterparty (the cargo owner) requested the Company to pay US$6.36 million for compensation.	A lawyer has been appointed to handle the case.

7.6.13 Other Material Risks and Response Measures  Risk of ship collision, damage, or loss

Ships are exposed to the risk of structural damage or mechanical failure due to collision caused by weather or other forces of nature or human error by the crew, war, or other human factors and to the risk of sinking due to extreme weather conditions. All of the Group's ships are insured against Hull & Machinery and War risks. However, it is not guaranteed that risks arising from collision, damage, or loss can be avoided. As part of its risk management practices, the Company strengthens personnel training and management to ensure seaworthiness of its vessels.

 Third party liability risk

The Group may, in the process of conducting shipping operations, become liable for damage to third parties. The most common examples include crew death and injury, cargo claim, and pollution cleanup. The Group joins international protection and indemnity clubs as a means to manage risks and their potential adverse effects on the company. However, it is not guaranteed that risks arising from crew death and injury, cargo claim, or pollution cleanup can be avoided. As part of its risk management practices, the Company strengthens personnel training and management to ensure seaworthiness of its vessels.

 Risk of piracy

The routes operated by the Group may pass through some relatively unsafe waters or countries. Therefore, the Group tries to persuade charterers to keep from dangerous waters and avoid coastal navigation in order to reduce risk. Where it is necessary to pass through high risk waters, the Group's ships will be accompanied by

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117

Financial Conditions, Business Results and Risk Analysis

armed escorts stationed at different countries or have hired armed guards onboard. Additional insurance coverages will also be purchased for the voyage. All departments in the Group work constantly to keep the ships up to date on the latest anti-piracy information, and help the captains familiarize themselves with the anti-piracy measures and related safety regulations.

 Risk of business interruption

The Group operates a network of routes that spreads across the world. There are occasional short interruptions of business operations due to local regulations, cargo claims, or mechanical failures. Sometimes ships and/or crew may be seized or detained temporarily, leading to default of contract or other operating losses. To better manage such risks, the Group implements more rigorous training for crew to be more prepared for emergencies, and establishes a communication network and crisis management mechanisms to ensure normal operations are restored in the shortest possible time.

 Risk of market volatility

The global demand for raw materials and commodities and the supply of ships are the two factors driving the dry bulk shipping market. The Group has a diverse fleet consisting mainly of handysize bulk carriers that have the most stable rate in the market. Therefore, the Group is less exposed to the impact of market volatility compared to other companies in the business. Furthermore, the Group manages market volatility risk and secures cash flows for repayments by planning long term contracts. The Group arranges its contracts to avoid stacking, and allocates ships to long term time charter or to self-operating as needed for diversification.

 Risk of oil price volatility

The Group is generally not responsible for the costs of fuels for ships on long term time charter. The impact of fuel price volatility on the Group is found mainly in the self-operating ships in the spot market as it affects short-term estimates of the cost of fuel. However, in the long term, shipping rates charged in the spot market for dry bulk shipping will be adjusted to reflect oil price increase or decrease.

 Liquidity risk

The liquidity risk for a shipping company occurs in out-of-pocket payments for newbuildings and repayments in ship financing. For newbuildings, buyers are often required to pay for the ships in installments before delivery. The buyer's failure to make the installment payments on time will give the shipbuilder the right to unilaterally terminate the agreement and hold the buyer liable for damages to the shipbuilder. Moreover, the Company usually apply to financial institutions for loans to fund newbuilding purchases. These loan agreements often contain a cross default clause that provides the borrower's failure to repay principal or interest on another loan or default on another agreement will constitute default on the loan agreements, thereby creating cross default risk. Under such circumstances, the financial institutions will be entitled to demand early repayments from the Company. If the Company is unable to make repayments, the creditors may proceed unilaterally to auction off the collateral ships as compensation. The Group uses retained earnings to build up cash assets and revenue from the fleet to make down payments for newbuildings. The Group takes a conservative approach to financial planning, and always evaluates cash flows in new building projects with care and caution.

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 Risk of executive and crew turnover

The Group relies on the experience and knowledge of Chairman Lan and the executive management team for the success of its operations. A high executive turnover will not be constructive to the Company's long-term development. Hence, one of the Group's long-term strategies focuses on retaining talent and passing on experience and knowledge.

A growing number of vessels in the shipping market over the last few years and the subsequent rising demand for seafarers have led to challenges in recruitment. Less trained crew leads to increased operating costs and risks. As a professional ship owner, the Group has to employ a large number of seafarers. The majority of the crew currently employed by the Group are Chinese seafarers. The Group recruits, dispatches, and manages them through local recruitment agencies in China. Given the limited number of experienced and qualified seafarer recruitment and dispatch agencies in China, the qualification and quality of service offered by one agency may vary greatly from the next. In addition, the lack of clearly established regulations and enforcement standards may not be conductive for local recruitment agencies to provide a steady supply of seafarers for the Group. Furthermore, the human resources market in China has been undergoing transformation in recent years. Therefore, the Group has considered replacing a workforce consisting mainly of Chinese seafarers and building a crew trained in-house. As a result, the Group started working with National Taiwan Ocean University in 2010. A number of deck and engine internships are offered every year, and interns are trained and encouraged to pursue key positions in the fleet.

 Risk of conducting business internationally

Marine transport is primarily governed by regulations at the global level. However, detailed requirements and practices may vary from country to country. The industry also faces threats such as piracy, stowaway, and smuggling. All these factors can affect the loading/discharging schedule or supply of materials and the cost and speed of mechanical maintenance. The Group's management team requires that employees have a clear understanding of the risks in international operations and an excellent command of foreign languages so to ensure an accurate and timely decision making process in risk management and in crisis management.

 Risk of information security

The Company has implemented an internal control system for information management and personal information management procedures in order to manage and monitor network and information security. However, it is impossible to guarantee that third party attack on the networks and computer systems can always be avoided. It is possible for the Company to lose important data under such an attack. Interruption of business or damage to ship may also arise from hackers taking over the vessel tracking systems and electronic charts to extort money from the Company. For internal information security, the Company has the Information Section in charge of overseeing security of the IT systems, monitoring employee computers, creating daily backup schedules, and raising awareness of information security and the correct procedures. For ship information system security, the Company keeps close contact with specialized insurers to learn about information security coverages, and decides whether to purchase policies as needed.

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119

Financial Conditions, Business Results and Risk Analysis

 Protection of shareholder rights

The laws regarding shareholder rights and jurisdiction in the Company's place of registration, the Cayman Islands, differ in some places from those of the Republic of China. The Company has amended the Articles of Incorporation to comply with the Securities and Exchange Act, the Company Act and other applicable laws of the Republic of China to the maximum extent permitted by the laws of the Cayman Islands. However, protection of shareholder rights may not extend to the same degree as required of companies incorporated in Taiwan. Please refer to Section 8.5 of this report for ways of exercising shareholder rights and material deviation in protection of shareholder rights. Investors should find out and consult their advisors on any protection of shareholder rights not available when investing in a Cayman Islands company. To learn more about the laws of the Cayman Islands, please visit The Judicial Administration & Portfolio of Legal Affairs Legal Information Website.

（ Website: http://staging.caymanjudicial-legalinfo.ky/laws/Laws-In-Force/Laws.aspx. ）

7.7 Other Important Information

None.

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Financial Conditions, Business Results and Risk Analysis

8. Special Disclosure

8.1 Information of Related Party

8.1.1 Basic Information of Related Party

Units:US$

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Established Major
Company Name Address Capital
Date Opreated Item
Ship
Wisdom Marine International 7F-11 No. 237, Sec. 2, Fuxing South
2008/12/4 20,884,532.64 operations
Inc. Road, Taipei City, Taiwan
management
Well Shipmanagement and Safety
12F-3 No. 237, Sec. 2, Fuxing South
Maritine Consultant Co., 2001/9/6 772,611.72 management
Road, Taipei City, Taiwan
Limited for ships
MMG Tower 23rd Floor, Paseo del Mar
Marine
Wisdom Marine Lines S.A. 1999/3/15 and Pacific Avenues, Costa del Este, 454,139,000.00
Transport
Panama City, Republic of Panama
Adixi Wisdom S.A. 2010/5/20 As above. 10,000.00 As above.
Amis Carriers S.A. 2013/2/1 As above. 10,000.00 As above.
Amis Elegance S.A. 2013/4/25 As above. 10,000.00 As above.
Amis Fortune S.A. 2014/5/20 As above. 10,000.00 As above.
Amis Hero S.A. 2017/1/10 As above. 10,000.00 As above.
Amis Integrity S.A. 2017/3/17 As above. 10,000.00 As above.
Amis International S.A. 2012/8/14 As above. 10,000.00 As above.
Amis Justice S.A. 2017/5/3 As above. 10,000.00 As above.
Amis Mariner S.A. 2013/2/1 As above. 10,000.00 As above.
Amis Miracle S.A. 2017/5/1 As above. 10,000.00 As above.
Amis Nature Inc. 2018/2/26 80 Broad Street, Monrovia, Liberia 10,000.00 As above.
MMG Tower 23rd Floor, Paseo del Mar 10,000.00 As above.
Amis Navigation S.A. 2011/9/16 and Pacific Avenues, Costa del Este,
Panama City, Republic of Panama
Amis Star S.A. 2012/8/14 As above. 10,000.00 As above.
Amis Victory S.A. 2020/2/27 As above. 10,000.00 As above.
Amis Wisdom S.A. 2009/4/15 As above. 10,000.00 As above.
Arikun Wisdom S.A. 2007/1/4 As above. 10,000.00 As above.
Atayal Brave S.A. 2011/3/25 As above. 10,000.00 As above.
Atayal Mariner S.A. 2011/3/24 As above. 10,000.00 As above.
Atayal Star S.A. 2011/3/25 As above. 10,000.00 As above.
Atayal Wisdom S.A. 2009/4/15 As above. 10,000.00 As above.
Babuza Wisdom S.A. 2008/2/18 As above. 10,000.00 As above.
Beagle Marine S.A. 2008/2/18 As above. 10,000.00 As above.
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Special Disclosure

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Established Major
Company Name Address Capital
Date Opreated Item
Beagle Wisdom S.A. 2004/8/10 As above. 3,500,000.00 As above.
Bunun Brave S.A. 2013/10/30 As above. 10,000.00 As above.
Bunun Champion S.A. 2013/11/25 As above. 10,000.00 As above.
Bunun Dynasty S.A. 2013/11/25 As above. 10,000.00 As above.
Bunun Elegance S.A. 2013/11/25 As above. 10,000.00 As above.
Bunun Fortune S.A. 2013/3/20 As above. 10,000.00 As above.
Bunun Hero S.A. 2015/6/4 As above. 10,000.00 As above.
Bunun Infinity S.A. 2016/1/5 As above. 10,000.00 As above.
Bunun Justice S.A. 2016/10/17 As above. 10,000.00 As above.
Bunun Marine S.A. 2011/9/16 As above. 10,000.00 As above.
Bunun Noble Inc. 2020/7/13 80 Broad Street, Monrovia, Liberia 10,000.00 As above.
MMG Tower 23rd Floor, Paseo del Mar
Bunun Navigation S.A. 2011/5/30 and Pacific Avenues, Costa del Este, 10,000.00 As above.
Panama City, Republic of Panama
Bunun Wisdom S.A. 2009/4/15 As above. 10,000.00 As above.
Cosmic Wisdom S.A. 2000/4/10 As above. 10,000.00 As above.
Daiwan Champion S.A. 2014/2/25 As above. 10,000.00 As above.
Daiwan Dolphin S.A. 2014/2/25 As above. 10,000.00 As above.
Daiwan Elegance S.A. 2014/2/25 As above. 10,000.00 As above.
Daiwan Fortune S.A. 2014/2/25 As above. 10,000.00 As above.
Daiwan Glory S.A. 2014/2/25 As above. 10,000.00 As above.
Daiwan Hero S.A. 2016/1/5 As above. 10,000.00 As above.
Daiwan Infinity S.A. 2016/1/5 As above. 10,000.00 As above.
Daiwan Justice S.A. 2016/1/5 As above. 10,000.00 As above.
Daiwan Kalon S.A. 2016/1/5 As above. 10,000.00 As above.
Daiwan Leader S.A. 2017/3/15 As above. 10,000.00 As above.
Daiwan Miracle S.A. 2017/3/15 As above. 10,000.00 As above.
Dumun Marine S.A. 2009/10/7 As above. 10,000.00 As above.
Dumun Navigation S.A. 2010/1/27 As above. 10,000.00 As above.
Elite Steamship S.A. 1996/10/4 As above. 10,000.00 As above.
Euroasia Investment S.A. 1999/7/23 As above. 10,000.00 As above.
Favoran Wisdom S.A. 2009/6/5 As above. 10,000.00 As above.
Fourseas Maritime S.A. Panama 1991/10/31 As above. 10,000.00 As above.
Fraternity Marine S.A. 1999/7/14 As above. 10,000.00 As above.
Fraternity Ship Investment S.A. 1999/8/24 As above. 10,000.00 As above.
Genius Marine S.A. 2001/10/12 As above. 10,000.00 As above.
Genius Prince S.A. 2003/12/15 As above. 10,000.00 As above.
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Special Disclosure 122

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Established Major
Company Name Address Capital
Date Opreated Item
Genius Star Carriers S.A. 2002/10/1 As above. 10,000.00 As above.
Genius Star Navigation S.A. 2004/8/10 As above. 10,000.00 As above.
Gs Global S.A. 2011/5/25 As above. 10,000.00 As above.
Gs Navigation S.A. 2011/5/25 As above. 10,000.00 As above.
Gsx Maritime S.A. 2009/4/15 As above. 10,000.00 As above.
Guma Marine S.A. 2009/10/7 As above. 10,000.00 As above.
Guma Navigation S.A. 2010/1/27 As above. 10,000.00 As above.
Harmony Pescadores
1993/10/4 As above. 10,000.00 As above.
S.A.(Panama)
Harmony Success S.A. 2003/4/14 As above. 10,000.00 As above.
Harmony Transport S.A. 2003/4/15 As above. 10,000.00 As above.
Hoanya Wisdom S.A. 2006/11/15 As above. 10,000.00 As above.
Infinite Wisdom S.A. 2003/1/21 As above. 10,000.00 As above.
Katagalan Carriers S.A. 2013/3/14 As above. 10,000.00 As above.
Katagalan Line S.A. 2011/5/16 As above. 10,000.00 As above.
Katagalan Marine S.A. 2011/3/24 As above. 10,000.00 As above.
Katagalan Navigation S.A. 2013/2/1 As above. 10,000.00 As above.
Katagalan Star S.A. 2013/3/14 As above. 10,000.00 As above.
Katagalan Wisdom S.A. 2009/4/15 As above. 10,000.00 As above.
Kavalan Wisdom S.A. 2009/4/15 As above. 10,000.00 As above.
Ligulao Wisdom S.A. 2010/5/20 As above. 10,000.00 As above.
Lloa Wisdom S.A. 2009/9/21 As above. 10,000.00 As above.
Log Wisdom S.A. 2008/4/21 As above. 10,000.00 As above.
Luilang Wisdom S.A. 2009/4/16 As above. 10,000.00 As above.
Magnate Maritime S.A. 2004/6/8 As above. 10,000.00 As above.
Makatao Wisdom S.A. 2009/4/15 As above. 10,000.00 As above.
Mercy Marine Line S.A. 2002/3/18 As above. 10,000.00 As above.
Mighty Maritime S.A. 1997/8/5 As above. 10,000.00 As above.
Mimasaka Investment S.A. 2009/9/21 As above. 10,000.00 As above.
Mount Wisdom S.A. 2000/4/10 As above. 10,000.00 As above.
Paiwan Wisdom S.A. 2009/4/15 As above. 10,000.00 As above.
Papora Wisdom S.A. 2006/11/15 As above. 10,000.00 As above.
Pazeh Wisdom S.A. 2008/2/18 As above. 10,000.00 As above.
Pescadores International Line
2006/11/27 As above. 10,000.00 As above.
S.A.
Poavosa International S.A. 2011/5/25 As above. 10,000.00 As above.
Poavosa Maritime S.A. 2011/5/25 As above. 10,000.00 As above.
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123

Special Disclosure

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Established Major
Company Name Address Capital
Date Opreated Item
Poavosa Navigation S.A. 2013/1/23 As above. 10,000.00 As above.
Poavosa Wisdom S.A. 2006/4/10 As above. 10,000.00 As above.
Rukai Maritime S.A. 2008/2/18 As above. 10,000.00 As above.
Sakizaya Diamond S.A. 2014/2/25 As above. 10,000.00 As above.
Sakizaya Fortune S.A. 2015/5/29 As above. 10,000.00 As above.
Sakizaya Glory S.A. 2015/5/29 As above. 10,000.00 As above.
Sakizaya Hero S.A. 2016/1/5 As above. 10,000.00 As above.
Sakizaya Integrity S.A. 2016/1/5 As above. 10,000.00 As above.
Sakizaya Justice S.A. 2016/1/5 As above. 10,000.00 As above.
Sakizaya Kalon S.A. 2016/10/12 As above. 10,000.00 As above.
Sakizaya Leader S.A. 2016/10/12 As above. 10,000.00 As above.
Sakizaya Line S.A. 2012/11/21 As above. 10,000.00 As above.
Sakizaya Marine S.A. 2012/1/18 As above. 10,000.00 As above.
Sakizaya Miracle S.A. 2017/1/10 As above. 10,000.00 As above.
Sakizaya Navigation S.A. 2012/1/18 As above. 10,000.00 As above.
Sakizaya Orchid S.A. 2017/4/28 As above. 10,000.00 As above.
Sakizaya Power S.A. 2017/4/28 As above. 10,000.00 As above.
Sakizaya Queen S.A. 2017/3/15 As above. 10,000.00 As above.
Sakizaya Respect S.A. 2017/3/15 As above. 10,000.00 As above.
Sakizaya Unicorn S.A. 2020/11/20 As above. 10,000.00 As above.
Sakizaya Victory S.A. 2020/11/20 As above. 10,000.00 As above.
Sakizaya Wisdom S.A. 2009/2/16 As above. 10,000.00 As above.
Sao Wisdom S.A. 2009/4/15 As above. 10,000.00 As above.
Saysiat Wisdom S.A. 2009/10/7 As above. 10,000.00 As above.
Siraya Wisdom S.A. 2009/4/15 As above. 10,000.00 As above.
Taivoan Wisdom S.A. 2006/11/15 As above. 10,000.00 As above.
Tao Ace S.A. 2011/5/30 As above. 10,000.00 As above.
Tao Brave S.A. 2009/6/5 As above. 10,000.00 As above.
Tao Mariner S.A. 2009/4/15 As above. 10,000.00 As above.
Tao Star S.A. 2010/6/2 As above. 10,000.00 As above.
Tao Treasure S.A. 2011/5/30 As above. 10,000.00 As above.
Taokas Marine S.A. 2009/4/15 As above. 10,000.00 As above.
Taokas Navigation S.A. 2009/7/10 As above. 10,000.00 As above.
Taokas Wisdom S.A. 2009/7/9 As above. 10,000.00 As above.
Taroko Maritime S.A. 2006/11/15 As above. 10,000.00 As above.
Taroko Wisdom S.A. 2009/2/26 As above. 20,000.00 As above.
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124

Special Disclosure

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Established Major
Company Name Address Capital
Date Opreated Item
Triumph Wisdom S.A. 2009/9/21 As above. 10,000.00 As above.
Trobian Wisdom S.A. 2009/4/16 As above. 10,000.00 As above.
Unicorn Bravo S.A. 2006/5/24 As above. 10,000.00 As above.
Unicorn Fortune S.A. 2006/5/25 As above. 10,000.00 As above.
Unicorn Logger S.A. 2006/5/25 As above. 10,000.00 As above.
Unicorn Logistics S.A. 2008/5/16 As above. 10,000.00 As above.
Unicorn Marine S.A. 2000/1/17 As above. 10,000.00 As above.
Unicorn Pescadores S.A. 2006/5/24 As above. 10,000.00 As above.
Unicorn Successor S.A. 2003/4/15 As above. 10,000.00 As above.
Vayi Wisdom S.A. 2010/5/20 As above. 10,000.00 As above.
Winsome Wisdom S.A. 2003/4/15 As above. 10,000.00 As above.
Wisdom Ace S.A. 2000/7/20 As above. 10,000.00 As above.
Ship
Blaak 34, Tribes Rotterdam Blaak,
Wisdom Lines Europe B.V. 2019/11/27 0.00 operations
3011TA Rotterdam
management
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8.1.2 According to Aiticles 369-3 of Company Act , presumed to be a control and affiliation relation

Not applicable.

8.1.3 Related Party of Consolidated Financial Statements ： Please refer to page 139~232.

8.1.4 The operation of the Company and related party ：

The operation of the Company and related party include dry bulk shipping service.

8.1.5 Information of all related party director, supervision and president

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Current shareholding
Company Name Title Name
Shares Rate
Wisdom Marine International Inc. Chairman Lan, Chun-Sheng - -
Well Shipmanagement and Maritine - -
Chairman Lan, Chun-Sheng
Consultant Co., Limited
Wisdom Marine Lines S.A. Chairman Lan, Chun-Sheng - -
Adixi Wisdom S.A. As above. As above. - -
Amis Carriers S.A. As above. As above. - -
Amis Elegance S.A. As above. As above.
Amis Fortune S.A. As above. As above. - -
Amis Hero S.A. As above. As above. - -
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125

Special Disclosure

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Current shareholding
Company Name Title Name
Shares Rate
Amis Integrity S.A. As above. As above. - -
Amis International S.A. As above. As above. - -
Amis Justice S.A. As above. As above. - -
Amis Mariner S.A. As above. As above. - -
Amis Miracle S.A. As above. As above. - -
Amis Nature Inc. As above. As above. - -
Amis Navigation S.A. As above. As above. - -
Amis Star S.A. As above. As above. - -
Amis Victory S.A. As above. As above. - -
Amis Wisdom S.A. As above. As above. - -
Arikun Wisdom S.A. As above. As above. - -
Atayal Brave S.A. As above. As above. - -
Atayal Mariner S.A. As above. As above. - -
Atayal Star S.A. As above. As above. - -
Atayal Wisdom S.A. As above. As above. - -
Babuza Wisdom S.A. As above. As above. - -
Beagle Marine S.A. As above. As above. - -
Beagle Wisdom S.A. As above. As above. - -
Bunun Brave S.A. As above. As above. - -
Bunun Champion S.A. As above. As above. - -
Bunun Dynasty S.A. As above. As above. - -
Bunun Elegance S.A. As above. As above. - -
Bunun Fortune S.A. As above. As above. - -
Bunun Hero S.A. As above. As above. - -
Bunun Infinity S.A. As above. As above. - -
Bunun Justice S.A. As above. As above. - -
Bunun Marine S.A. As above. As above. - -
Bunun Noble Inc. As above. As above. - -
Bunun Navigation S.A. As above. As above. - -
Bunun Wisdom S.A. As above. As above. - -
Cosmic Wisdom S.A. As above. As above. - -
Daiwan Champion S.A. As above. As above. - -
Daiwan Dolphin S.A. As above. As above. - -
Daiwan Elegance S.A. As above. As above. - -
Daiwan Fortune S.A. As above. As above. - -
Daiwan Glory S.A. As above. As above. - -
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Special Disclosure 126

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Current shareholding
Company Name Title Name
Shares Rate
Daiwan Hero S.A. As above. As above. - -
Daiwan Infinity S.A. As above. As above. - -
Daiwan Justice S.A. As above. As above. - -
Daiwan Kalon S.A. As above. As above. - -
Daiwan Leader S.A. As above. As above. - -
Daiwan Miracle S.A. As above. As above. - -
Dumun Marine S.A. As above. As above. - -
Dumun Navigation S.A. As above. As above. - -
Elite Steamship S.A. As above. As above. - -
Euroasia Investment S.A. As above. As above. - -
Favoran Wisdom S.A. As above. As above. - -
Fourseas Maritime S.A. Panama As above. As above. - -
Fraternity Marine S.A. As above. As above. - -
Fraternity Ship Investment S.A. As above. As above. - -
Genius Marine S.A. As above. As above. - -
Genius Prince S.A. As above. As above. - -
Genius Star Carriers S.A. As above. As above. - -
Genius Star Navigation S.A. As above. As above. - -
Gs Global S.A. As above. As above. - -
Gs Navigation S.A. As above. As above. - -
Gsx Maritime S.A. As above. As above. - -
Guma Marine S.A. As above. As above. - -
Guma Navigation S.A. As above. As above. - -
Harmony Pescadores S.A.(Panama) As above. As above. - -
Harmony Success S.A. As above. As above. - -
Harmony Transport S.A. As above. As above. - -
Hoanya Wisdom S.A. As above. As above. - -
Infinite Wisdom S.A. As above. As above. - -
Katagalan Carriers S.A. As above. As above. - -
Katagalan Line S.A. As above. As above. - -
Katagalan Marine S.A. As above. As above. - -
Katagalan Navigation S.A. As above. As above. - -
Katagalan Star S.A. As above. As above. - -
Katagalan Wisdom S.A. As above. As above. - -
Kavalan Wisdom S.A. As above. As above. - -
Ligulao Wisdom S.A. As above. As above. - -
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Special Disclosure 127

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Current shareholding
Company Name Title Name
Shares Rate
Lloa Wisdom S.A. As above. As above. - -
Log Wisdom S.A. As above. As above. - -
Luilang Wisdom S.A. As above. As above. - -
Magnate Maritime S.A. As above. As above. - -
Makatao Wisdom S.A. As above. As above. - -
Mercy Marine Line S.A. As above. As above. - -
Mighty Maritime S.A. As above. As above. - -
Mimasaka Investment S.A. As above. As above. - -
Mount Wisdom S.A. As above. As above. - -
Paiwan Wisdom S.A. As above. As above. - -
Papora Wisdom S.A. As above. As above. - -
Pazeh Wisdom S.A. As above. As above. - -
Pescadores International Line S.A. As above. As above. - -
Poavosa International S.A. As above. As above. - -
Poavosa Maritime S.A. As above. As above. - -
Poavosa Navigation S.A. As above. As above. - -
Poavosa Wisdom S.A. As above. As above. - -
Rukai Maritime S.A. As above. As above. - -
Sakizaya Diamond S.A. As above. As above. - -
Sakizaya Fortune S.A. As above. As above. - -
Sakizaya Glory S.A. As above. As above. - -
Sakizaya Hero S.A. As above. As above. - -
Sakizaya Integrity S.A. As above. As above. - -
Sakizaya Justice S.A. As above. As above. - -
Sakizaya Kalon S.A. As above. As above. - -
Sakizaya Leader S.A. As above. As above. - -
Sakizaya Line S.A. As above. As above. - -
Sakizaya Marine S.A. As above. As above. - -
Sakizaya Miracle S.A. As above. As above. - -
Sakizaya Navigation S.A. As above. As above. - -
Sakizaya Orchid S.A. As above. As above. - -
Sakizaya Power S.A. As above. As above. - -
Sakizaya Queen S.A. As above. As above. - -
Sakizaya Respect S.A. As above. As above. - -
Sakizaya Unicorn S.A. As above. As above. - -
Sakizaya Victory S.A. As above. As above. - -
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Special Disclosure 128

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Current shareholding
Company Name Title Name
Shares Rate
Sakizaya Wisdom S.A. As above. As above. - -
Sao Wisdom S.A. As above. As above. - -
Saysiat Wisdom S.A. As above. As above. - -
Siraya Wisdom S.A. As above. As above. - -
Taivoan Wisdom S.A. As above. As above. - -
Tao Ace S.A. As above. As above. - -
Tao Brave S.A. As above. As above. - -
Tao Mariner S.A. As above. As above. - -
Tao Star S.A. As above. As above. - -
Tao Treasure S.A. As above. As above. - -
Taokas Marine S.A. As above. As above. - -
Taokas Navigation S.A. As above. As above. - -
Taokas Wisdom S.A. As above. As above. - -
Taroko Maritime S.A. As above. As above. - -
Taroko Wisdom S.A. As above. As above. - -
Triumph Wisdom S.A. As above. As above. - -
Trobian Wisdom S.A. As above. As above. - -
Unicorn Bravo S.A. As above. As above. - -
Unicorn Fortune S.A. As above. As above. - -
Unicorn Logger S.A. As above. As above. - -
Unicorn Logistics S.A. As above. As above. - -
Unicorn Marine S.A. As above. As above. - -
Unicorn Pescadores S.A. As above. As above. - -
Unicorn Successor S.A. As above. As above. - -
Vayi Wisdom S.A. As above. As above. - -
Winsome Wisdom S.A. As above. As above. - -
Wisdom Ace S.A. As above. As above. - -
Director Wisdom Marine 100%
Wisdom Lines Europe B.V.
International Inc.
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8.1.6 Operation of Related Party

Unit:US$	Unit:US$	Unit:US$	Unit:US$	Unit:US$	Unit:US$	Unit:US$	Unit:US$	Unit:US$
					Operation Revenue	Profit on	Profit for the EPS
Company Name	Capital	Assets	Liabilities	Equity		Operating	Year （after
						Activites	（after tax） tax）
Wisdom Marine International Inc.	21,557,684.00	33,011,942.54	18,802,958.76	14,208,983.78	5,647,466.63	3,651.17	-16,645.03	-0.04

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129

Special Disclosure

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Profit on Profit for the EPS
Operation
Company Name Capital Assets Liabilities Equity Operating Year （ after
Revenue
Activites （ after tax ） tax ）
Well Shipmanagement and
Maritine Consultant Co., 772,611.72 939,309.64 1,944,276.98 -1,004,967.34 2,988,984.81 -458,780.57 -286,397.60 -0.13
Limited
Wisdom Marine Lines S.A. 517,947,000.00 594,153,256.54 368,515,140.26 225,638,116.28 8,053,537.34 -6,870,158.70 -16,119,218.37 -31.12
Adixi Wisdom S.A. 10,000.00 7,546,280.35 13,121,587.83 -5,575,307.48 2,725,778.86 531,878.60 155,214.85 1,552.15
Amis Carriers S.A. 10,000.00 21,068,598.38 12,054,745.14 9,013,853.24 4,805,801.55 1,918,318.07 1,670,618.67 16,706.19
Amis Elegance S.A. 10,000.00 17,818,226.54 10,048,754.85 7,769,471.69 3,560,574.20 1,062,371.55 685,290.99 6,852.91
Amis Fortune S.A. 10,000.00 28,022,583.12 13,161,322.50 14,861,260.62 3,265,519.80 588,943.98 342,001.04 3,420.01
Amis Hero S.A. 10,000.00 18,976,052.62 17,982,143.47 993,909.15 3,174,986.57 46,243.20 -621,520.59 -6,215.21
Amis Integrity S.A. 10,000.00 21,529,224.38 18,678,124.08 2,851,100.30 3,110,118.05 342,334.66 -14,617.28 -146.17
Amis International S.A. 10,000.00 57,066,619.42 14,626,078.36 42,440,541.06 4,055,149.70 821,866.92 532,683.50 5,326.84
Amis Justice S.A. 10,000.00 20,888,073.39 18,540,328.68 2,347,744.71 4,028,403.77 1,504,812.81 1,190,637.36 11,906.37
Amis Mariner S.A. 10,000.00 25,217,100.00 15,123,672.50 10,093,427.50 4,934,805.00 1,978,418.48 1,681,020.35 16,810.20
Amis Miracle S.A. 10,000.00 21,012,386.04 18,671,310.30 2,341,075.74 3,980,665.07 1,263,884.15 711,789.67 7,117.90
Amis Nature Inc. 10,000.00 19,380,187.96 17,189,485.76 2,190,702.20 3,268,990.87 848,532.86 357,374.88 3,573.75
Amis Navigation S.A. 10,000.00 15,702,090.29 11,044,463.88 4,657,626.41 3,005,969.48 422,183.52 187,410.41 1,874.10
Amis Star S.A. 10,000.00 22,795,492.36 12,374,654.05 10,420,838.31 3,220,353.11 69,717.17 -196,349.62 -1,963.50
Amis Victory S.A. 10,000.00 23,930,666.82 23,868,144.40 62,522.42 419,900.00 102,439.60 52,522.42 525.22
Amis Wisdom S.A. 10,000.00 46,628,941.82 14,213,452.33 32,415,489.49 3,041,773.42 -339,158.90 -488,335.72 -4,883.36
Arikun Wisdom S.A. 10,000.00 -3,791,571.47 28,224.22 -3,819,795.69 1,425,972.13 -1,161,153.44 -1,168,710.53 -11,687.11
Atayal Brave S.A. 10,000.00 10,388,311.61 4,824,081.36 5,564,230.25 1,809,386.67 -359,172.25 -443,356.89 -4,433.57
Atayal Mariner S.A. 10,000.00 20,804,716.38 10,662,914.09 10,141,802.29 3,529,730.93 -582,746.94 -746,898.30 -7,468.98
Atayal Star S.A. 10,000.00 11,750,876.98 4,183,851.90 7,567,025.08 1,971,460.03 -147,004.65 -227,487.47 -2,274.87
Atayal Wisdom S.A. 10,000.00 15,607,736.82 7,449,742.44 8,157,994.38 1,754,301.69 -1,170,458.09 -1,331,476.48 -13,314.76
Babuza Wisdom S.A. 10,000.00 5,498,001.24 2,113,836.78 3,384,164.46 1,687,176.61 -779,030.43 -834,505.90 -8,345.06
Beagle Marine S.A. 10,000.00 9,111,629.33 0.00 9,111,629.33 0.00 -460.90 -460.90 -4.61
Beagle Wisdom S.A. 3,500,000.00 32,427,825.30 16,958,024.74 15,469,800.56 1,440,745.44 -790,709.78 -938,511.23 -26.81
Bunun Brave S.A. 10,000.00 14,793,737.24 9,443,103.42 5,350,633.82 2,681,430.60 154,767.51 -189,600.01 -1,896.00
Bunun Champion S.A. 10,000.00 16,060,743.59 9,241,570.84 6,819,172.75 3,595,248.36 1,109,839.13 780,449.52 7,804.50
Bunun Dynasty S.A. 10,000.00 15,420,256.12 8,354,439.77 7,065,816.35 3,009,258.22 445,247.34 122,430.13 1,224.30
Bunun Elegance S.A. 10,000.00 19,514,170.29 11,651,990.74 7,862,179.55 2,922,163.75 743,587.34 396,252.19 3,962.52
Bunun Fortune S.A. 10,000.00 18,126,162.10 11,680,882.15 6,445,279.95 2,171,186.96 -449,219.69 -677,153.88 -6,771.54
Bunun Hero S.A. 10,000.00 13,271,620.50 9,532,345.25 3,739,275.25 3,498,199.79 1,499,140.81 1,111,223.88 11,112.24
Bunun Infinity S.A. 10,000.00 13,051,529.82 12,872,550.90 178,978.92 3,484,182.50 1,072,743.04 679,455.56 6,794.56
Bunun Justice S.A. 10,000.00 13,396,321.31 11,671,204.97 1,725,116.34 3,129,902.04 989,896.70 678,804.49 6,788.04
Bunun Marine S.A. 10,000.00 18,521,480.51 9,640,024.06 8,881,456.45 3,694,484.95 1,180,126.82 782,187.36 7,821.87
Bunun Noble Inc. 10,000.00 15,569,922.82 15,500,248.75 69,674.07 840,520.00 139,918.78 59,674.07 596.74
Bunun Navigation S.A. 10,000.00 8,983,588.45 9,922,651.88 -939,063.43 2,274,824.62 -886,901.18 -1,285,536.45 -12,855.36
Bunun Wisdom S.A. 10,000.00 15,760,691.44 8,442,134.37 7,318,557.07 2,285,099.54 -1,051,239.59 -1,232,100.00 -12,321.00
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130

Special Disclosure

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Profit on Profit for the EPS
Operation
Company Name Capital Assets Liabilities Equity Operating Year （ after
Revenue
Activites （ after tax ） tax ）
Cosmic Wisdom S.A. 10,000.00 6,874,569.03 129,413.54 6,745,155.49 3,626,305.80 -472,867.10 -477,509.45 -4,775.09
Daiwan Champion S.A. 10,000.00 19,680,913.55 12,028,742.39 7,652,171.16 2,943,933.91 857,945.65 634,370.06 6,343.70
Daiwan Dolphin S.A. 10,000.00 19,135,693.48 12,120,324.85 7,015,368.63 2,441,592.84 139,473.69 -73,928.96 -739.29
Daiwan Elegance S.A. 10,000.00 18,013,611.59 11,148,914.29 6,864,697.30 3,442,262.05 977,417.74 645,478.65 6,454.79
Daiwan Fortune S.A. 10,000.00 18,461,964.63 11,403,908.24 7,058,056.39 3,169,081.35 794,585.12 441,987.11 4,419.87
Daiwan Glory S.A. 10,000.00 17,287,166.40 14,517,914.45 2,769,251.95 2,502,456.39 89,371.13 -258,653.72 -2,586.54
Daiwan Hero S.A. 10,000.00 11,368,779.10 11,335,956.14 32,822.96 2,916,073.50 709,183.38 343,280.91 3,432.81
Daiwan Infinity S.A. 10,000.00 12,217,627.86 11,554,736.88 662,890.98 2,926,938.07 684,501.44 319,049.70 3,190.50
Daiwan Justice S.A. 10,000.00 11,196,821.97 11,575,528.49 -378,706.52 2,659,921.17 797,066.46 483,108.62 4,831.09
Daiwan Kalon S.A. 10,000.00 13,263,238.88 11,720,697.65 1,542,541.23 2,494,379.90 460,703.92 118,184.11 1,181.84
Daiwan Leader S.A. 10,000.00 13,704,922.34 13,471,416.55 233,505.79 2,356,488.73 86,522.56 -112,293.66 -1,122.94
Daiwan Miracle S.A. 10,000.00 14,954,134.20 13,323,650.84 1,630,483.36 3,407,665.16 1,201,331.36 818,868.09 8,188.68
Dumun Marine S.A. 10,000.00 15,816,375.80 7,078,110.65 8,738,265.15 2,877,058.06 192,360.62 -2,894.47 -28.94
Dumun Navigation S.A. 10,000.00 97,136,450.48 20,792,786.61 76,343,663.87 11,644,968.24 4,693,325.91 4,357,229.90 43,572.30
Elite Steamship S.A. 10,000.00 8,360,128.04 6,900,000.00 1,460,128.04 0.00 -8,634.25 -6,335.32 -63.35
Euroasia Investment S.A. 10,000.00 5,079,182.81 66,330.70 5,012,852.11 2,063,692.74 -280,767.40 -284,896.12 -2,848.96
Favoran Wisdom S.A. 10,000.00 7,734,993.53 37,338.76 7,697,654.77 513,841.18 496,530.83 545,175.73 5,451.76
Fourseas Maritime S.A.
10,000.00 18,349,482.31 11,903,817.63 6,445,664.68 2,759,530.42 289,232.27 27,006.07 270.06
Panama
Fraternity Marine S.A. 10,000.00 8,129,807.52 0.00 8,129,807.52 0.00 -1,179.37 -1,179.37 -11.79
Fraternity Ship Investment
10,000.00 12,199,289.14 2,318,538.75 9,880,750.39 1,696,741.59 -419,954.55 -374,200.02 -3,742.00
S.A.
Genius Marine S.A. 10,000.00 34,741,752.72 27,064,861.48 7,676,891.24 3,502,118.22 1,045,112.73 519,702.85 5,197.03
Genius Prince S.A. 10,000.00 25,774,743.75 18,454,988.81 7,319,754.94 4,132,338.55 1,606,603.13 1,156,490.64 11,564.91
Genius Star Carriers S.A. 10,000.00 17,227,259.51 14,988,743.25 2,238,516.26 3,660,555.60 1,167,866.69 958,903.01 9,589.03
Genius Star Navigation S.A. 10,000.00 5,932,084.45 942,409.03 4,989,675.42 1,449,193.01 -329,504.05 -283,035.69 -2,830.36
Gs Global S.A. 10,000.00 3,805,536.73 6,378,933.91 -2,573,397.18 1,643,594.74 -775,809.92 -773,903.92 -7,739.04
Gs Navigation S.A. 10,000.00 5,624,481.84 6,451,358.43 -826,876.59 1,366,181.54 -1,074,759.93 -1,069,680.07 -10,696.80
Gsx Maritime S.A. 10,000.00 4,462,433.06 3,113,415.05 1,349,018.01 1,338,540.02 -1,058,528.91 -1,136,927.83 -11,369.28
Guma Marine S.A. 10,000.00 20,134,547.53 7,601,238.41 12,533,309.12 2,665,886.64 -119,322.54 -329,812.52 -3,298.13
Guma Navigation S.A. 10,000.00 9,908,521.19 16,280,477.44 -6,371,956.25 3,230,800.00 1,658,427.69 1,406,557.72 14,065.58
Harmony Pescadores
10,000.00 11,415,295.36 5,551,986.58 5,863,308.78 1,957,111.97 -706,015.65 -758,193.34 -7,581.93
S.A.(Panama)
Harmony Transport S.A. 10,000.00 3,156,070.35 87,489.06 3,068,581.29 1,449,780.13 -702,455.45 -736,854.57 -7,368.55
Hoanya Wisdom S.A. 10,000.00 12,130,168.12 3,994,734.34 8,135,433.78 1,985,576.25 -576,981.16 -825,662.76 -8,256.63
Infinite Wisdom S.A. 10,000.00 20,639,316.80 0.00 20,639,316.80 711.07 -22,462.15 -22,533.28 -225.33
Katagalan Carriers S.A. 10,000.00 36,179,000.89 19,787,081.82 16,391,919.07 6,493,368.67 3,682,378.35 3,283,675.23 32,836.75
Katagalan Line S.A. 10,000.00 13,696,060.48 11,575,618.29 2,120,442.19 4,809,634.14 1,651,494.74 1,273,386.44 12,733.86
Katagalan Marine S.A. 10,000.00 17,396,275.29 11,291,545.38 6,104,729.91 4,014,921.55 864,300.66 516,318.60 5,163.19
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Profit on Profit for the EPS
Operation
Company Name Capital Assets Liabilities Equity Operating Year （ after
Revenue
Activites （ after tax ） tax ）
Katagalan Navigation S.A. 10,000.00 28,794,767.46 16,573,087.87 12,221,679.59 5,610,686.31 2,619,652.12 2,067,430.60 20,674.31
Katagalan Star S.A. 10,000.00 25,533,770.97 18,476,957.50 7,056,813.47 1,672,599.49 438,423.65 263,674.50 2,636.75
Katagalan Wisdom S.A. 10,000.00 76,403,526.44 23,372,886.08 53,030,640.36 9,049,150.73 3,302,576.11 2,898,216.64 28,982.17
Kavalan Wisdom S.A. 10,000.00 87,296,426.84 29,420,078.56 57,876,348.28 9,236,518.68 3,396,658.41 2,956,197.86 29,561.98
Ligulao Wisdom S.A. 10,000.00 25,273,612.57 4,760,420.09 20,513,192.48 3,711,600.00 1,288,940.47 1,203,933.31 12,039.33
Lloa Wisdom S.A. 10,000.00 23,220,955.83 24,984,211.82 -1,763,255.99 2,113,800.00 680,703.57 461,276.98 4,612.77
Log Wisdom S.A. 10,000.00 1,485,635.89 1,527,677.85 -42,041.96 1,699,254.66 -507,033.31 -536,827.47 -5,368.27
Luilang Wisdom S.A. 10,000.00 19,549,002.91 16,278,546.56 3,270,456.35 3,721,807.91 1,661,969.04 1,191,591.66 11,915.92
Magnate Maritime S.A. 10,000.00 -2,748,491.78 196,701.92 -2,945,193.70 1,531,436.42 -1,247,969.51 -1,251,228.52 -12,512.29
Makatao Wisdom S.A. 10,000.00 34,269,739.56 14,428,524.85 19,841,214.71 3,938,772.18 798,831.04 648,946.04 6,489.46
Mercy Marine Line S.A. 10,000.00 28,031,700.06 20,304,031.70 7,727,668.36 2,851,923.80 977,253.33 648,670.76 6,486.71
Mighty Maritime S.A. 10,000.00 57,557.46 86,029.86 -28,472.40 1,262,518.52 -809,082.30 -815,702.58 -8,157.03
Mimasaka Investment S.A. 10,000.00 9,487,137.33 63,039.47 9,424,097.86 0.00 -55,130.27 -57,728.66 -577.29
Mount Wisdom S.A. 10,000.00 17,973,840.37 25,340,595.54 -7,366,755.17 3,726,900.00 1,668,363.11 1,116,421.19 11,164.21
Paiwan Wisdom S.A. 10,000.00 20,805,844.77 7,705,085.21 13,100,759.56 4,021,881.84 392,989.48 214,202.12 2,142.02
Papora Wisdom S.A. 10,000.00 17,172,247.43 3,671,609.82 13,500,637.61 1,927,836.08 -717,252.23 -835,973.39 -8,359.73
Pazeh Wisdom S.A. 10,000.00 4,198,905.01 1,579,864.72 2,619,040.29 1,744,577.63 -925,488.99 -970,190.56 -9,701.91
Pescadores International Line
10,000.00 -268,889.26 0.00 -268,889.26 0.00 -460.50 -460.50 -4.61
S.A.
Poavosa International S.A. 10,000.00 9,718,470.75 9,422,817.74 295,653.01 1,921,513.49 -809,270.69 -1,078,845.87 -10,788.46
Poavosa Maritime S.A. 10,000.00 11,286,704.96 8,688,893.76 2,597,811.20 1,663,512.73 -1,033,109.33 -1,478,917.35 -14,789.17
Poavosa Navigation S.A. 10,000.00 -1,282,404.71 7,087,446.29 -8,369,851.00 2,081,984.85 -281,910.25 -540,047.86 -5,400.48
Poavosa Wisdom S.A. 10,000.00 22,562,805.83 4,174,054.43 18,388,751.40 2,453,907.27 -645,279.56 -793,224.22 -7,932.24
Rukai Maritime S.A. 10,000.00 17,687,417.86 5,930,567.72 11,756,850.14 3,098,264.52 -80,927.00 -254,190.98 -2,541.91
Sakizaya Diamond S.A. 10,000.00 21,702,137.29 11,386,086.73 10,316,050.56 4,683,425.44 2,012,323.30 1,658,254.55 16,582.55
Sakizaya Fortune S.A. 10,000.00 19,046,973.33 15,182,645.49 3,864,327.84 4,210,134.02 1,471,770.13 1,013,057.06 10,130.57
Sakizaya Glory S.A. 10,000.00 53,030,222.41 42,806,954.56 10,223,267.85 8,884,192.30 3,950,503.33 3,398,332.85 33,983.33
Sakizaya Hero S.A. 10,000.00 15,879,342.94 17,591,973.52 -1,712,630.58 3,553,810.20 903,862.21 353,600.70 3,536.01
Sakizaya Integrity S.A. 10,000.00 15,511,679.27 17,037,520.16 -1,525,840.89 3,483,800.83 921,143.75 418,183.91 4,181.84
Sakizaya Justice S.A. 10,000.00 19,466,402.87 18,509,944.46 956,458.41 3,896,274.18 1,189,537.01 626,902.54 6,269.03
Sakizaya Kalon S.A. 10,000.00 19,932,764.11 17,788,598.36 2,144,165.75 3,782,408.13 1,281,731.59 789,690.63 7,896.91
Sakizaya Leader S.A. 10,000.00 21,968,453.63 18,114,335.42 3,854,118.21 4,405,932.34 1,829,998.51 1,275,094.42 12,750.94
Sakizaya Line S.A. 10,000.00 17,393,116.81 12,576,938.23 4,816,178.58 2,929,677.12 207,390.64 -204,501.79 -2,045.02
Sakizaya Marine S.A. 10,000.00 16,569,083.98 10,416,610.31 6,152,473.67 2,978,451.20 451,899.33 114,253.07 1,142.53
Sakizaya Miracle S.A. 10,000.00 20,274,693.33 19,802,980.17 471,713.16 3,758,386.83 1,000,259.15 477,263.22 4,772.63
Sakizaya Navigation S.A. 10,000.00 20,630,441.18 12,732,198.12 7,898,243.06 3,802,518.19 954,006.36 518,858.20 5,188.58
Sakizaya Orchid S.A. 10,000.00 22,029,337.44 19,681,782.76 2,347,554.68 4,135,505.00 1,510,837.75 921,497.09 9,214.97
Sakizaya Power S.A. 10,000.00 18,033,480.06 14,659,950.82 3,373,529.24 3,995,679.37 1,468,939.57 972,901.47 9,729.01
Sakizaya Queen S.A. 10,000.00 27,626,919.94 24,463,699.80 3,163,220.14 4,232,515.01 1,673,206.04 1,317,634.87 13,176.35
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Profit on Profit for the EPS
Operation
Company Name Capital Assets Liabilities Equity Operating Year （ after
Revenue
Activites （ after tax ） tax ）
Sakizaya Respect S.A. 10,000.00 17,732,557.29 13,523,138.04 4,209,419.25 3,808,408.37 1,515,908.89 1,084,229.26 10,842.29
Sakizaya Unicorn S.A. 10,000.00 8,588.35 0.00 8,588.35 0.00 -1,411.65 -1,411.65 -14.12
Sakizaya Victory S.A. 10,000.00 9,623.55 0.00 9,623.55 0.00 -376.45 -376.45 -3.76
Sakizaya Wisdom S.A. 10,000.00 16,406,064.79 10,332,326.29 6,073,738.50 2,794,959.30 -152,386.91 -424,666.36 -4,246.66
Sao Wisdom S.A. 10,000.00 13,506,924.17 4,273,070.93 9,233,853.24 1,975,407.50 -394,630.65 -514,466.41 -5,144.66
Saysiat Wisdom S.A. 10,000.00 18,064,271.75 10,380,101.14 7,684,170.61 3,610,282.77 361,446.86 152,934.36 1,529.34
Siraya Wisdom S.A. 10,000.00 7,598,771.75 2,158,980.10 5,439,791.65 1,883,953.87 -333,596.97 -496,785.51 -4,967.86
Taivoan Wisdom S.A. 10,000.00 24,210,394.40 25,944,515.98 -1,734,121.58 3,999,550.24 1,618,943.57 1,216,259.32 12,162.59
Tao Ace S.A. 10,000.00 7,716,613.37 7,969,729.86 -253,116.49 2,235,916.08 -508,649.35 -697,896.22 -6,978.96
Tao Brave S.A. 10,000.00 7,968,519.44 5,412,176.36 2,556,343.08 1,440,020.05 -1,657,950.71 -1,787,349.45 -17,873.49
Tao Mariner S.A. 10,000.00 5,284,208.65 5,351,676.35 -67,467.70 1,890,933.10 -1,551,607.70 -1,675,055.29 -16,750.55
Tao Star S.A. 10,000.00 5,602,362.65 7,544,393.25 -1,942,030.60 2,081,958.16 -894,876.49 -1,026,757.45 -10,267.57
Tao Treasure S.A. 10,000.00 8,135,089.13 8,390,045.84 -254,956.71 2,147,543.97 -651,565.58 -850,448.73 -8,504.49
Taokas Marine S.A. 10,000.00 13,502,719.85 5,339,667.90 8,163,051.95 1,614,314.92 -1,263,839.52 -1,376,952.74 -13,769.53
Taokas Navigation S.A. 10,000.00 12,743,140.02 5,353,024.90 7,390,115.12 2,169,981.85 -557,993.45 -658,021.12 -6,580.21
Taokas Wisdom S.A. 10,000.00 17,335,874.65 4,726,260.82 12,609,613.83 3,418,164.06 1,072,237.62 769,241.23 7,692.41
Taroko Maritime S.A. 10,000.00 19,471,558.49 11,595,844.64 7,875,713.85 2,758,068.47 519,739.42 336,453.88 3,364.54
Taroko Wisdom S.A. 20,000.00 -2,272,239.79 49,679.18 -2,321,918.97 2,026,481.57 -745,361.39 -745,361.39 -3,726.81
Triumph Wisdom S.A. 10,000.00 13,579,319.25 13,993,344.39 -414,025.14 3,018,166.58 307,922.82 31,810.31 318.10
Trobian Wisdom S.A. 10,000.00 13,374,069.48 17,519,266.31 -4,145,196.83 4,103,060.67 1,724,309.91 1,240,842.41 12,408.42
Unicorn Bravo S.A. 10,000.00 -546,688.47 232,368.18 -779,056.65 1,292,084.65 -367,004.95 -374,527.96 -3,745.28
Unicorn Fortune S.A. 10,000.00 2,024,182.46 0.00 2,024,182.46 0.00 -460.89 -460.89 -4.61
Unicorn Logger S.A. 10,000.00 1,811,397.27 576,655.71 1,234,741.56 1,417,200.00 -113,508.16 -131,304.68 -1,313.05
Unicorn Logistics S.A. 10,000.00 -6,517,795.76 406,676.42 -6,924,472.18 1,340,974.87 -1,317,823.87 -1,337,482.60 -13,374.83
Unicorn Marine S.A. 10,000.00 13,356,536.10 4,454,455.93 8,902,080.17 1,747,854.92 -526,627.95 -657,508.58 -6,575.09
Unicorn Pescadores S.A. 10,000.00 2,011.91 0.00 2,011.91 0.00 -460.89 -460.89 -4.61
Unicorn Successor S.A. 10,000.00 17,240,533.64 7,239,690.49 10,000,843.15 3,973,211.08 1,119,167.65 955,375.47 9,553.75
Vayi Wisdom S.A. 10,000.00 48,306,089.00 15,753,462.62 32,552,626.38 6,211,823.56 2,638,427.08 2,453,106.71 24,531.07
Winsome Wisdom S.A. 10,000.00 47,206,329.27 18,654,430.45 28,551,898.82 1,806,520.12 -914,603.23 -899,955.92 -8,999.56
Wisdom Ace S.A. 10,000.00 292,386.19 0.00 292,386.19 0.00 -460.89 -460.89 -4.61
Wisdom Lines Europe B.V. 0.00 21,583.39 14,948.23 6,635.16 124,333.20 -32,093.44 -30,353.35 -
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8.2 Status of private placement of securities in the last fiscal year and up to the date of annual report publication

Not applicable as the Group has not offered any private placement of securities in the last fiscal year and up to the date of annual report publication.

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8.3 Holding or disposal of shares in the Company by subsidiaries in the last fiscal year and up to the date of annual report publication

Not applicable as the Group has not had any subsidiary holding or disposing shares in the Company in the last fiscal year and up to the date of annual report publication.

8.4 Other supplemental information

None.

8.5 Material deviation in protection of shareholders' rights

Pursuant to the amendment of the Articles of Incorporation of Wisdom Marine Lines passed in the general meeting on May 22, 2020, provided the Companies Law of the Cayman Islands is not violated, the Company has followed the Shareholder Protection Checklist for Foreign Issuer's Country of Registration ("Shareholder Protection Checklist") released by the TWSE on December 25, 2019 and established detailed measures in the Articles of Incorporation to ensure shareholders are able to exercise their rights.

In particular, the shareholder protection requirements regarding the powers and responsibilities of supervisors do not apply as Wisdom Marine Lines has independent directors instead. Furthermore, the following shareholder protection requirements cannot be implemented as they are inconsistent with the laws of the Cayman Islands. The reasons for deviation are provided as follows.

8.5.1 Resolutions for consolidation or merger

8.5.1.1 Shareholder Protection Checklist

According to the Shareholder Protection Checklist, for a consolidation or merger proposal to pass, the resolution will require a majority vote of the shareholders present, who have to represent two thirds or more of the total number of outstanding shares. Where the shareholders present do not represent a sufficient number of shares as specified above, a resolution may be passed instead by a two-thirds vote of the shareholders present, who have to represent more than half of the total number of outstanding shares.

8.5.1.2 According to the Companies Law of the Cayman Islands:

According to the lawyers in the Cayman Islands, Section 232 of the Companies Law of the Cayman Islands provides that "merger" means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company; and "consolidation" means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies in the consolidated company.

According to Section 233(6) of the Companies Law of the Cayman Islands, A plan of "merger" or "consolidation" shall be authorized by each constituent company by way of a 75% vote of the shareholders present, who have to represent 75% or more of the total number of outstanding shares of each such constituent company. If the shares issued by the surviving company or consolidated company to the shareholders of each constituent company carry the same rights and value as the original shares, the plan of "merger" or

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"consolidation" may be authorized by each constituent company by way of a "special resolution" of the shareholders of each such constituent company.

8.5.1.3 According to the Articles of Incorporation:

The "merger" and "consolidation" provisions in Section 2(a)(xxvi) and (xii) of the Articles of Incorporation are the same as those under the laws of the Cayman Islands. In addition, under the laws of the Republic of China, "merger" and "consolidation" of companies are not distinguished from each other and are known collectively as "merger". Hence, to ensure compliance with the regulations in the Republic of China at the same time, Section 2(a)(xxv) provides explicitly that "merger" and "consolidation" are to be known collectively as "merger" and that the definitions are in accordance with the laws of the Cayman Islands and those of the Republic of China. There is, therefore, no real difference between the two in terms of the definition of "merger".

However, given the laws of the Cayman Islands require a "merger" be authorized by each constituent company by way of a 75% vote of the shareholders present, who have to represent 75% or more of the total number of outstanding shares of each such constituent company or by way of a "special resolution", the part of Section 2(a)(xliv) of the Articles of Incorporation regarding "special resolution of merger" follows the requirements of the above laws of the Cayman Islands. In addition, Section 30(B) provides that mergers shall require a "special resolution of merger" to proceed as required under the laws of the Cayman Islands.

8.5.1.4 Reasons for deviation:

According to the lawyers in the Cayman Islands, the articles of incorporation of a company incorporated in the Cayman Islands are required to comply with the Companies Law of the Cayman Islands, and the Companies Law of the Cayman Islands shall prevail in case of conflict. According to the Companies Law of the Cayman Islands, mergers shall require a "special resolution of merger" to proceed. Any resolution on such matters that is passed but fails to meet the voting threshold for a "special resolution of merger" under the Companies Law of the Cayman Islands shall have no effect under the Companies Law of the Cayman Islands.

8.5.1.5 Impact on Taiwanese shareholders:

The Articles of Incorporation of Wisdom Marine Lines Co., Ltd. establishes explicitly the minimum attendance requirement for passing a resolution in the annual general meeting to be shareholders (in person or by proxy) representing more than 50% of the outstanding shares. The voting threshold under the "special resolution for consolidation" provisions in the Companies Law of the Cayman Islands are technically not lower than the requirements under the Company Act of the Republic of China or on the Shareholder Protection Checklist, and, therefore, should have no negative impact on shareholder rights.

Given Section 31 of the Articles of Incorporation complies with the Shareholder Protection Checklist in general and includes the matters requiring passing of a special/supermajority resolution, except for amendment of articles of incorporation and dissolution, in the Articles of Incorporation. Proposals involving consolidation and merger have to proceed in accordance with the "special resolution for consolidation" provisions. Therefore, this part of the Articles of Incorporation should have limited negative impact on shareholder rights.

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Special Disclosure

8.5.2 Attendance by Proxy

8.5.2.1 Basis for Attendance by Proxy on Shareholder Protection Checklist

Articles 5, 6, 6-1, and 7, Article 8, Paragraph 4, Articles 10, 11, 12, 13, 13-1, and 14, Article 16, Paragraph 1, Article 18, Article 19, Paragraph 1, Articles 20, 21, 22, and 23 of the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies provide the rules and regulations on attendance by proxy at annual general meetings.

8.5.2.2 According to The Companies Law of the Cayman Islands/Articles of Incorporation:

According to Section 59 of the Articles of Incorporation, shareholders attending annual general meetings by proxy or conducting proxy solicitation shall follow the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies and other applicable laws of the Republic of China.

8.5.2.3 Reasons for deviation:

Given the degree of detail and relative complexity of the rules on proxy use and solicitation provided by the Shareholder Protection Checklist, the Company, in the interest of avoiding frequent changes of the Articles of Incorporation while complying with the proxy use and solicitation regulations, decided to state in general that the procedures shall follow the applicable laws of the Republic of China and the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies.

8.5.2.4 Impact on Taiwanese shareholders:

Given the purpose of the Shareholder Protection Checklist is to require that public companies and their shareholders comply with the proxy use and solicitation provisions under the Company Act and the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies, Section 59 of the Articles of Incorporation has been made to require shareholders attending annual general meetings by proxy or conducting proxy solicitation follow the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies and other applicable laws of the Republic of China. In addition, Section 2(6) of the Taiwan Stock Exchange Letter Taiwan-Stock-Shang-0991701319 dated April 16, 2010 ("TWSE Letter") states explicitly general provisions may be established without specifics. Therefore, this part should have no real impact on shareholder rights.

8.5.3 Statutory Reserve

8.5.3.1 According to Shareholder Protection Checklist:

The following matters shall be listed and generally described in the reasons for the annual general meeting and not be brought up as extemporary motions:

appointment or removal of directors/supervisors;
change of the Articles of Incorporation;
dissolution, consolidation or merger, share exchange or split-up of the Company;
entering into, amending, or terminating any contract for lease of the Company’s business in whole, for entrusted business, or for regular joint operation with others;

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transferring the whole or any essential part of its business or assets;
accepting the transfer of another’s whole business or assets, which has great bearing on the business operation of the Company;
private placement of securities with equity characteristics;
permission for directors to engage in activities prohibited by noncompetition clauses;
distribution of all or part of dividends and bonuses in the form of new shares; and
distribution of capital surplus from the legal reserve and income from contributed capital in excess of par or gift to original shareholders in the form of new shares.

8.5.3.2 Reasons for deviation/impact on Taiwanese shareholders:

The Articles of Incorporation of Wisdom Marine Lines does not include any provision on share conversion at present. To avoid ambiguity, the Company intends to amend the lack at the 2021 general meeting. The amended Articles of Incorporation will comply with the Shareholder Protection Checklist. The amendment should have no material impact on the exercise of shareholder rights.

8.6 Corporate events with material impact on shareholders' equity or stock prices set forth in Article 36, Paragraph 3, Subparagraph 2 of Securities and Exchange Act in the past year and up to the date of report should be listed individually:

None.

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Wisdom Marine Lines Co., Ltd. Statement on Internal Control

Date: March 26, 2021

This statement relates to the internal control system of the Company and the results of a self-assessment for the year ending December 31, 2020.

I. The Company is fully aware that the establishment, implementation and maintenance of its internal control system is the responsibility of the Board of Directors and the management personnel. In this regard the Company has established such a system. The aim of the system is to provide reasonable assurance of the achievement of objectives in the effectiveness and efficiency of operations (including profits, performance, and safeguard of asset security), reliability, timeliness, and transparency of reporting, and compliance with applicable laws and regulations.
II. There are inherent limitations to even the most well designed internal control system. As such, an effective internal control system can only reasonably ensure the achievement of the three aforementioned objectives. Moreover, the operating environment and situation may change and impact the effectiveness of the internal control system. Nevertheless, self-supervision measures have been built into the Company's internal control system to facilitate immediate rectification once procedural flaws have been identified.
III. The Company judges the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal Control Systems by Public Companies (hereinafter referred to as the "Regulations"). The internal control system judgment criteria adopted by the Regulations divide internal control into five elements based on the process of management control: 1. Control environment, 2. Risk assessment, 3. Control operation, 4. Information and communication, and 5. Monitoring. Each element further contains several items. For more information on the aforementioned items, please refer to the Regulations.
IV. The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid criteria.
V. Based on the findings of the assessment mentioned in the preceding paragraph, the Company believes that at December 31, 2020, its internal control system (including its supervision and management of subsidiaries), encompassing internal controls for knowledge of the degree of achievement of operational effectiveness and efficiency objectives, reliability of reporting, and compliance with applicable laws and regulations, is effectively designed and operating, and reasonably assures the achievement of the aforementioned objectives.
VI. This Statement will become a major part of the content of the Company's Annual Report and Prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Act.
VII. This Statement has been passed by the Board of Directors Meeting of the Company held on March 26, 2021, where 0 of the 8 attending Directors expressed dissenting opinions, and the remainder all affirmed the content of this Statement.

Wisdom Marine Lines Co., Limited

Chairman: Lan, Chun-Sheng

President: Cheng, Chun-Sheng

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Wisdom Marine Lines Co., Limited

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2020 Business Report, Financial Statements and proposal for distribution of 2020 earnings. Of which, the Financial Statements have been audited by Lin, Li Huang and Fuh, Wen Fun, Ernst & Young, Taiwan.

The 2020 Business Report, Financial Statements and proposal for distribution of 2020 earnings have been audited by us as Audit Committee of the Company. We deem no inappropriateness on these documents. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report. Please review.

The 2021 Annual General Meeting

Wisdom Marine Lines Co., Limited Chairman of the the Audit Committee : Tu, Neng-Mo On the date of March 26, 2021

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WISDOM MARINE LINES CO., LIMITED (CAYMAN)

AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT AUDITORS 31 DECEMBER 2020 AND 2019

Registered: Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands Address: 7F., No. 237, Sec. 2, Fushing S. Rd., Taipei City, Taiwan

Telephone: 886-2-2755-2637

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevai

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STATEMENT BY DIRECTORS

This statement specifies the responsibility of the Board of Directors in compiling the Consolidated Financial Report of Wisdom Marine Lines Co., Limited (Cayman) (the “Company”) and its subsidiaries (together the “Group”).

In addition to the disclosure of accounting information, a complete consolidated financial report shall include the roles of each segment of the Group and their future development, so that the readers of the Financial Report can fully understand the future development and potential risk of the Group. In respect of the full and complete disclosure of accounting procedures and financial information, the Board has responsibility to review the Group’s strategies, important business plans, and risk management policies, to set operational targets, and to monitor the results of operations, in order to comply with relevant regulations, protect company interests, and avoid potential fraud within the Group. We have provided the relevant financial information for every financial report year, and disclosed the consolidated assets, liabilities, financial structure and operating performance in a truthful, fair and objective manner. Our disclosure is based on the principles of consistency and going concern assumption, and we make fair judgments and estimations regarding accrual items at the end of each year, in order to prevent erroneous information in the consolidated financial report.

The Board of Directors and management reviewed the consolidated financial report of the Company and its subsidiaries for 2020 and 2019 on 26 February 2021. The consolidated financial report have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee, and give a true and fair view of the consolidated financial position of the Group as at 31 December 2020 and 2019 and the consolidated results and changes in equity of the Group for the years then ended, and there is no fraudulent or concealed information.

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

Wisdom Marine Lines Co., Limited Director 26 February 2021

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Audit Report of Independent Auditors

Independent Auditors’ Report Translated from Chinese

To the Board of Directors and Stockholders of Wisdom Marine Lines Co., Limited (Cayman)

Opinion

We have audited the accompanying consolidated balance sheets of Wisdom Marine Lines Co., Limited (Cayman) (the “Company”) and its subsidiaries (together the “Group”) as of 31 December 2020 and 2019, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2020 and 2019, and notes to the consolidated financial statements, including the summary of significant accounting policies (together “the consolidated financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of 31 December 2020 and 2019, and their consolidated financial performance and cash flows for the years ended 31 December 2020 and 2019, in conformity with the requirements of the International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and 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 Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2020 consolidated financial statements. These matters were addressed in the context of

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our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue recognition

Hire revenues amounted to $379,014,925 for the year ended 31 December 2020, accounting for 94% of operating revenues, which is significant to the consolidated financial statements. Therefore, we have determined the validity of hire revenue as a key audit matter. The audit procedures we conducted regarding the hire revenue recognition included but not limited to the following: understanding the design and implementation of internal controls with regard to hire revenue recognition in order to design relevant internal control audit procedures in response to the validity of hire revenue so as to verify the effectiveness of the design and implementation of the Group's internal controls; selecting samples from the population of hire revenues to perform tests of control and tests of details; examining lease contracts, debit notes, bank statements and remittances to ensure whether recognition of hire revenues are in accordance with contract terms and remitters are consistent with the counterparty of the lease contracts, performing confirmations of lease contracts to verify existence of lessees and validity of contract terms; analyzing variances in hire revenues and fluctuations in gross margin and assessing the reasonable. We also evaluated the disclosure regarding revenue recognition in Notes 4 and 6 of the consolidated financial statements.

Impairment of property, plant and equipment

As at 31 December 2020, the amount of the Group’s property, plant and equipment was $2,612,894,085, which accounted for 89% of total assets. The management assessed if there is any indication that an asset may be impaired on balance sheet date. If there is any indication that an asset may be impaired, the Group should evaluate the recoverable amount of the cash-generating-unit (CGU), to which the asset belongs. The property, plant and equipment of the Group mainly consists of vessel equipment. The subsidiaries of the Company took the one-vessel-one-company strategy to manage vessels, and the main CGU for each subsidiary is their vessels. With the view that the amount of property, plant and equipment being material and the calculation of recoverable amount involving numerous assumptions and estimates, we have determined the impairment of property, plant and equipment as a key audit matter. The audit procedures we conducted regarding the impairment of property, plant and equipment included but not limited to the following: evaluating the appropriateness of the accounting policy for impairment of property, plant and equipment; inspecting the impairment evaluation report provided by the Group and assessing the reasonableness of managements identification of indicators of impairment and the assumptions used, including identification of CGU, estimation of cash flows and discount rate. We also evaluated the disclosure regarding property, plant and equipment in Notes 4, 5 and 6 of the consolidated financial statements.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee and Interpretations developed by the Standing Interpretations Committee and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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In preparing the consolidated financial statements, management is responsible for assessing the ability to continue as a going concern of the Company and its subsidiaries, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of the Company and its subsidiaries.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 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 consolidated 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:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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 internal control of the Company and its subsidiaries.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 ability to continue as a going concern of the Company and its subsidiaries. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and its subsidiaries to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company and its subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2020 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor’s 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.

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Lin, Li Huang

Lu, Chian Uen

Ernst & Young, Taiwan

26 February 2021

Notice to Readers

The accompanying consolidated financial statements are intended only to present the financial position, results of operations and cash flows in accordance with 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 consolidated financial statements are those generally accepted and applied in the Republic of China.

Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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English Translation of Consolidated Financial Statements Originally Issued in Chinese WISDOM MARINE LINES CO., LIMITED (CAYMAN)

AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2020 AND 2019

(In US Dollars Unless Stated Otherwise)

1. History and organization

Wisdom Marine Lines Co., Limited (Cayman) (the “Company”) was incorporated in the Cayman Islands on 21 October 2008 as a tax-exempt company with limited liability under the Companies Act, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. The Company and its subsidiaries (the “Group”) primarily provide marine cargo transportation services, service related to the maintenance, vessel leasing, and shipping agency and management services. On 1 December 2010, the Company was approved and listed on Taiwan Stock Exchange (TWSE).

The Company’s ultimate parent company: None.

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

The consolidated financial statements were authorized for issue by the board of directors on 26 February 2021.

3. Newly issued or revised standards and interpretations

(1) Except for the following, the accounting policies applied in these consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended 31 December 2019. The following are the new standards and amendments for the annual periods beginning on or after 1 January 2020 which had no material impact on the Group.
A. Definition of a Business - Amendments to IFRS 3

The amendments clarify the definition of a business in IFRS 3 Business Combinations. The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition.

IFRS 3 continues to adopt a market participant’s perspective to determine whether an acquired set of activities and assets is a business. The amendments clarify the minimum

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requirements for a business; add guidance to help entities assess whether an acquired process is substantive; and narrow the definitions of a business and of outputs; etc.

B. Definition of a Material - Amendments to IAS 1 and 8

The main amendment is to clarify new definition of material. It states that “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information. An entity will need to assess whether the information, either individually or in combination with other information, is material in the context of the financial statements.

C. Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39 and IFRS 7

The amendments include a number of exceptions, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is directly affected if the interest rate benchmark reform gives rise to uncertainties about the timing and or amount of benchmark-based cash flows of the hedged item or the hedging instrument. Hence, the entity shall apply the exceptions to all hedging relationships directly affected by the interest rate benchmark reform.

The amendments include:

(a) highly probable requirement When determining whether a forecast transaction is highly probable, an entity shall assume that the interest rate benchmark on which the hedged cash flows are based is not altered as a result of the interest rate benchmark reform.
(b) prospective assessments
When performing prospective assessments, an entity shall assume that the interest rate benchmark on which the hedged item, hedged risk and/or hedging instrument are based is not altered as a result of the interest rate benchmark reform.
(c) IAS 39 retrospective assessment
An entity is not required to undertake the IAS 39 retrospective assessment (i.e. the actual results of the hedge are within a range of 80–125%) for hedging relationships directly affected by the interest rate benchmark reform.
(d) separately identifiable risk components For hedges of a non-contractually specified benchmark component of interest rate risk, an entity shall apply the separately identifiable requirement only at the inception of such hedging relationships.

The amendments also include the end of application of the exceptions requirements and the related disclosures requirements of the amendments.

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(2) The following standards or interpretations issued by IASB are not yet effective:
A. IFRS 10“Consolidated Financial Statements” and IAS 28“Investments in Associates and Joint Ventures”-Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures , in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

B. IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The fulfilment cash flows comprise of the following:

(a) estimates of future cash flows;
(b) Discount rate: an adjustment to reflect the time value of money and the financial risks related to the future cash flows, to the extent that the financial risks are not included in the estimates of the future cash flows; and
(c) a risk adjustment for non-financial risk.

The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims. Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

C. Classification of Liabilities as Current or Non-current (Amendments to IAS 1)

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These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

D. Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements
(a) Updating a Reference to the Conceptual Framework (Amendments to IFRS 3)

The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.

(b) Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognize such sales proceeds and related cost in profit or loss.

The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.

(d) Annual Improvements to IFRS Standards 2018 - 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee’s leasehold improvements.

Amendment to IAS 41

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The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

E. Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)

The final phase amendments mainly relate to the effects of the interest rate benchmark reform on the companies’ financial statements:

(a) A company will not have to derecognise or adjust the carrying amount of financial instruments for changes to contractual cash flows as required by the reform, but will instead update the effective interest rate to reflect the change to the alternative benchmark rate;
(b) A company will not have to discontinue its hedge accounting solely because it makes changes required by the reform, if the hedge meets other hedge accounting criteria; and
(c) A company will be required to disclose information about new risks arising from the reform and how it manages the transition to alternative benchmark rates.
F. Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

G. Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

The abovementioned standards and interpretations issued by IASB are not yet effective at the date when the Group’s financial statements were authorized for issue. As the Group is still currently determining the potential impact of the standards and interpretations listed under A and G. it is not practicable to estimate their impact on the Group at this point in time. All other standards and interpretations have no material impact on the Group.

Summary of significant accounting policies
(1) Statement of compliance

The consolidated financial statements of the Group for the years ended 31 December 2020 and 2019 have been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board.

(2) Basis of preparation
A. Basis of measurement

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The consolidated financial statements have been prepared under the historical cost convention, except for those financial instruments that are measured at fair value with changes therein shown in the consolidated financial statements.

B. Functional and presentation currency

The functional currency of each Group entities is determined based on the primary economic environment in which the entities operate. The Group’s consolidated financial statements are presented in US Dollar, which is the Company’s functional currency and presentation currency.

(3) Basis of consolidation
A. Preparation principle of consolidated financial statements

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

(a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
(b) exposure, or rights, to variable returns from its involvement with the investee, and
(c) the ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(a) the contractual arrangement with the other vote holders of the investee
(b) rights arising from other contractual arrangements
(c) the Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

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156

CONSOLIDATED FINANCIAL STATEMENTS

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the Group loses control of a subsidiary, it:

(a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;
(b) derecognizes the carrying amount of any non-controlling interest;
(c) recognizes the fair value of the consideration received;
(d) recognizes the fair value of any investment retained;
(e) recognizes any surplus or deficit in profit or loss; and
(f) reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss.

B. The consolidated entities are listed as follows:

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2020.12.31 2019.12.31
Investor Investee Company Name Ownership Ownership
Percentage Percentage
The Company Wisdom Marine Lines S.A. (Panama) (WML) 100% 100%
The Company Wisdom Marine International Inc. (WII) 100% 100%
Well Ship management and Maritime
WII 100% 100%
Consultant Co., Ltd. (WELL)
WII Wisdom Lines Europe B.V. 100% 100%
WML Adixi Wisdom S.A. 100% 100%
WML Amis Carriers S.A. 100% 100%
WML Amis Elegance S.A. 100% 100%
WML Amis Fortune S.A. 100% 100%
WML Amis Hero S.A. 100% 100%
WML Amis Integrity S.A. 100% 100%
WML Amis International S.A. 100% 100%
WML Amis Justice S.A. 100% 100%
WML Amis Mariner S.A. 100% 100%
WML Amis Miracle S.A. 100% 100%
WML Amis Nature Inc. 100% 100%
WML Amis Navigation S.A. 100% 100%
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157

CONSOLIDATED FINANCIAL STATEMENTS

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----- Start of picture text -----

2020.12.31 2019.12.31
Investor Investee Company Name Ownership Ownership
Percentage Percentage
WML Amis Star S.A. 100% 100%
WML Amis Victory S.A. 100% -
WML Amis Wisdom S.A. 100% 100%
WML Arikun Wisdom S.A. 100% 100%
WML Atayal Brave S.A. 100% 100%
WML Atayal Mariner S.A. 100% 100%
WML Atayal Star S.A. 100% 100%
WML Atayal Wisdom S.A. 100% 100%
WML Babuza Wisdom S.A. 100% 100%
WML Beagle Marine S.A. 100% 100%
WML Beagle Wisdom S.A. 100% 100%
WML Bunun Brave S.A. 100% 100%
WML Bunun Champion S.A. 100% 100%
WML Bunun Dynasty S.A. 100% 100%
WML Bunun Elegance S.A. 100% 100%
WML Bunun Fortune S.A. 100% 100%
WML Bunun Hero S.A. 100% 100%
WML Bunun Infinity S.A. 100% 100%
WML Bunun Justice S.A. 100% 100%
WML Bunun Marine S.A. 100% 100%
WML Bunun Navigation S.A. 100% 100%
WML Bunun Noble Inc. 100% -
WML Bunun Wisdom S.A. 100% 100%
WML Cosmic Wisdom S.A. 100% 100%
WML Daiwan Champion S.A. 100% 100%
WML Daiwan Dolphin S.A. 100% 100%
WML Daiwan Elegance S.A. 100% 100%
WML Daiwan Fortune S.A. 100% 100%
WML Daiwan Glory S.A. 100% 100%
WML Daiwan Hero S.A. 100% 100%
WML Daiwan Infinity S.A. 100% 100%
WML Daiwan Justice S.A. 100% 100%
WML Daiwan Kalon S.A. 100% 100%
WML Daiwan Leader S.A. 100% 100%
WML Daiwan Miracle S.A. 100% 100%
WML Dumun Marine S.A. 100% 100%
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158

CONSOLIDATED FINANCIAL STATEMENTS

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----- Start of picture text -----

2020.12.31 2019.12.31
Investor Investee Company Name Ownership Ownership
Percentage Percentage
WML Dumun Navigation S.A. 100% 100%
WML Elite Steamship S.A. 100% 100%
WML Euroasia Investment S.A. 100% 100%
WML Favoran Wisdom S.A. 100% 100%
WML Fourseas Maritime S.A. Panama 100% 100%
WML Fraternity Marine S.A. 100% 100%
WML Fraternity Ship Investment S.A. 100% 100%
WML Genius Marine S.A. 100% 100%
WML Genius Prince S.A. 100% 100%
WML Genius Star Carriers S.A. 100% 100%
WML Genius Star Navigation S.A. 100% 100%
WML GS Global S.A. 100% 100%
WML GS Navigation S.A. 100% 100%
WML GSX Maritime S.A. 100% 100%
WML Guma Marine S.A. 100% 100%
WML Guma Navigation S.A. 100% 100%
WML Harmony Pescadores S.A.(Panama) 100% 100%
WML Harmony Transport S.A. 100% 100%
WML Hoanya Wisdom S.A. 100% 100%
WML Infinite Wisdom S.A. 100% 100%
WML Katagalan Carriers S.A. 100% 100%
WML Katagalan Line S.A. 100% 100%
WML Katagalan Marine S.A. 100% 100%
WML Katagalan Navigation S.A. 100% 100%
WML Katagalan Star S.A. 100% 100%
WML Katagalan Wisdom S.A. 100% 100%
WML Kavalan Wisdom S.A. 100% 100%
WML Ligulao Wisdom S.A. 100% 100%
WML Lloa Wisdom S.A. 100% 100%
WML Log Wisdom S.A. 100% 100%
WML Luilang Wisdom S.A. 100% 100%
WML Magnate Maritime S.A. 100% 100%
WML Makatao Wisdom S.A. 100% 100%
WML Mercy Marine Line S.A. 100% 100%
WML Mighty Maritime S.A. 100% 100%
WML Mimasaka Investment S.A. 100% 100%
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CONSOLIDATED FINANCIAL STATEMENTS

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----- Start of picture text -----

2020.12.31 2019.12.31
Investor Investee Company Name Ownership Ownership
Percentage Percentage
WML Mount Wisdom S.A. 100% 100%
WML Paiwan Wisdom S.A. 100% 100%
WML Papora Wisdom S.A. 100% 100%
WML Pazeh Wisdom S.A. 100% 100%
WML Pescadores International Line S.A. 100% 100%
WML Poavosa International S.A. 100% 100%
WML Poavosa Maritime S.A. 100% 100%
WML Poavosa Navigation S.A. 100% 100%
WML Poavosa Wisdom S.A. 100% 100%
WML Rukai Maritime S.A. 100% 100%
WML Sakizaya Diamond S.A. 100% 100%
WML Sakizaya Fortune S.A. 100% 100%
WML Sakizaya Glory S.A. 100% 100%
WML Sakizaya Hero S.A. 100% 100%
WML Sakizaya Integrity S.A. 100% 100%
WML Sakizaya Justice S.A. 100% 100%
WML Sakizaya Kalon S.A. 100% 100%
WML Sakizaya Leader S.A. 100% 100%
WML Sakizaya Line S.A. 100% 100%
WML Sakizaya Marine S.A. 100% 100%
WML Sakizaya Miracle S.A. 100% 100%
WML Sakizaya Navigation S.A. 100% 100%
WML Sakizaya Orchid S.A. 100% 100%
WML Sakizaya Power S.A. 100% 100%
WML Sakizaya Queen S.A. 100% 100%
WML Sakizaya Respect S.A. 100% 100%
WML Sakizaya Unicorn S.A. 100% -
WML Sakizaya Victory S.A. 100% -
WML Sakizaya Wisdom S.A. 100% 100%
WML Sao Wisdom S.A. 100% 100%
WML Saysiat Wisdom S.A. 100% 100%
WML Siraya Wisdom S.A. 100% 100%
WML Taivoan Wisdom S.A. 100% 100%
WML Tao Ace S.A. 100% 100%
WML Tao Brave S.A. 100% 100%
WML Tao Mariner S.A. 100% 100%
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CONSOLIDATED FINANCIAL STATEMENTS

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2020.12.31 2019.12.31
Investor Investee Company Name Ownership Ownership
Percentage Percentage
WML Tao Star S.A. 100% 100%
WML Tao Treasure S.A. 100% 100%
WML Taokas Marine S.A. 100% 100%
WML Taokas Navigation S.A. 100% 100%
WML Taokas Wisdom S.A. 100% 100%
WML Taroko Maritime S.A. 100% 100%
WML Taroko Wisdom S.A. 100% 100%
WML Triumph Wisdom S.A. 100% 100%
WML Trobian Wisdom S.A. 100% 100%
WML Unicorn Bravo S.A. 100% 100%
WML Unicorn Fortune S.A. 100% 100%
WML Unicorn Logger S.A. 100% 100%
WML Unicorn Logistics S.A. 100% 100%
WML Unicorn Marine S.A. 100% 100%
WML Unicorn Pescadores S.A. 100% 100%
WML Unicorn Successor S.A. 100% 100%
WML Vayi Wisdom S.A. 100% 100%
WML Winsome Wisdom S.A. 100% 100%
WML Wisdom Ace S.A. 100% 100%
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Subsidiaries excluded from consolidation: None.

(4) Foreign currency transactions

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

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CONSOLIDATED FINANCIAL STATEMENTS

A. Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
B. Foreign currency items within the scope of IFRS 9 “ Financial Instruments” are accounted for based on the accounting policy for financial instruments.
C. Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

(5) Translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized.

The following partial disposals are accounted for as disposals:

A. when the partial disposal involves the loss of control of a subsidiary that includes a foreign operation; and
B. when the retained interest after the partial disposal of an interest in a joint arrangement or a partial disposal of an interest in an associate that includes a foreign operation is a financial asset that includes a foreign operation.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. In partial disposal of an associate or jointly controlled entity that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

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CONSOLIDATED FINANCIAL STATEMENTS

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

(6) Current and non-current distinction

An asset is classified as current when:

A. The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
B. The Group holds the asset primarily for the purpose of trading
C. The Group expects to realize the asset within twelve months after the reporting period
D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

A. The Group expects to settle the liability in its normal operating cycle
B. The Group holds the liability primarily for the purpose of trading
C. The liability is due to be settled within twelve months after the reporting period
D. The Group does not have 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 the issue of equity instruments do not affect its classification.
(7) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid time deposits or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Time deposits which mature over three months are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. They are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value, therefore they are reported as cash and cash equivalents.

(8) Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 “ Financial Instruments” are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

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CONSOLIDATED FINANCIAL STATEMENTS

A. Financial instruments: Recognition and Measurement

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

The Group classified financial assets as subsequently measured at amortized cost or fair value through other comprehensive income on the basis of both:

(a) the Group’s business model for managing the financial assets and
(b) the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

(a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

(a) purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(b) financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Financial asset measured at fair value through other comprehensive income

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CONSOLIDATED FINANCIAL STATEMENTS

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

(a) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

(a) A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.
(b) When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
(c) Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:
i. Purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
ii. Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Group made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

B. Impairment of financial assets

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CONSOLIDATED FINANCIAL STATEMENTS

The Group is recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the statement of financial position.

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

(a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
(b) the time value of money; and
(c) reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

The loss allowance is measures as follow:

(a) At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Group measures the loss allowance for a financial asset at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that condition is no longer met.
(b) At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.
(c) For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.
(d) For lease receivables arising from transactions within the scope of IFRS 16, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Group needs to assess whether the credit risk on a financial asset has been increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

C. Derecognition of financial assets

A financial asset is derecognized when:

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CONSOLIDATED FINANCIAL STATEMENTS

(a) The rights to receive cash flows from the asset have expired
(b) The Group has transferred the asset and substantially all the risks and rewards of the asset have been transferred
(c) The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.

D. Financial liabilities and equity

Classification between liabilities or equity

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Compound instruments

The Group evaluates the terms of the convertible bonds issued to determine whether it contains both a liability and an equity component. Furthermore, the Group assesses if the economic characteristics and risks of the put and call options contained in the convertible bonds are closely related to the economic characteristics and risk of the host contract before separating the equity element.

For the liability component excluding the derivatives, its fair value is determined based on the rate of interest applied at that time by the market to instruments of comparable credit status. The liability component is classified as a financial liability measured at amortized cost before the instrument is converted or settled.

For the embedded derivative that is not closely related to the host contract (for example, if the exercise price of the embedded call or put option is not approximately equal on each exercise date to the amortized cost of the host debt instrument), it is classified as a liability

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CONSOLIDATED FINANCIAL STATEMENTS

component and subsequently measured at fair value through profit or loss unless it qualifies for an equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. Its carrying amount is not re-measured in the subsequent accounting periods. If the convertible bond issued does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IFRS 9 “ Financial Instruments” .

Transaction costs are apportioned between the liability and equity components of the convertible bond based on the allocation of proceeds to the liability and equity components when the instruments are initially recognized.

On conversion of a convertible bond before maturity, the carrying amount of the liability component being the amortized cost at the date of conversion is transferred to equity.

Financial liabilities

Financial liabilities within the scope of IFRS 9 “ Financial Instruments” are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. A financial liability is classified as held for trading if:

(a) it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
(b) on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of shortterm profit-taking; or
(c) it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

(a) it eliminates or significantly reduces a measurement or recognition inconsistency; or (b) a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management

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or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or losses including interest paid are recognized in profit or loss.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

E. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(9) Derivative instrument

The Group uses derivative instruments to hedge its foreign currency risks. A derivative is classified in the balance sheet as financial assets or liabilities at fair value through profit or loss (held for trading) except for derivatives that are designated effective hedging instruments which are classified as derivative financial assets or liabilities for hedging.

Derivative instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken

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

When the host contracts are either non-financial assets or liabilities, derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not designated at fair value though profit or loss.

(10) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

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

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

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(11) Inventories

Inventories are bunker oil and are carried at the lower of cost or net realizable value. The cost of fuel is determined using the “weighted-average” cost method. Net realizable value is the determined based on the estimated selling price in the ordinary course of business, less the estimated selling expenses at the end of the period.

(12) Investments accounted for using the equity method

The Group’s investment in its associate is accounted for using equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Group has significant influence.

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Under equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate. After the interest in the associate is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. Unrealized gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the Group’s related interest in the associate.

When the associate issues new stock, and the Group’s interest in an associate is reduced or increased as the Group fails to acquire shares newly issued in the associate proportionately to its original ownership interest, the increase or decrease in the interest in the associate is recognized in Additional Paid in Capital and Investment accounted for using equity method. When the interest in the associate is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Group disposes the associate.

The financial statements of the associate are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired in accordance with IAS 28 “ Investments in Associates and Joint Ventures” . If this is the case the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 “Impairment of Assets” . In determining the value in use of the investment, the Group estimates:

A. Its share of the present value of the estimated future cash flows expected to be generated by the associate, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or
B. The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 “Impairment of Assets” .

Upon loss of significant influence over the associate, the Group measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the

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CONSOLIDATED FINANCIAL STATEMENTS

associate upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply equity method and does not remeasure the retained interest.

(13) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 “Property, Plant and Equipment” . When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

All major components of the vessels are depreciated on a straight-line basis over the useful life of the assets. Depreciation is based on cost less the estimated residual value. The residual value is estimated as the lightweight tonnage of each vessel multiplied by scrap value per ton.

The dry-docking cost, including acquisition of a new vessel, is separated from the remaining cost of the vessel. These two cost elements are recognized and depreciated separately. For the building of new vessels, the initial dry-docking cost is also segregated and capitalized separately.

The Group has a long-term plan for dry-docking of the vessels. Dry-docking cost is capitalized and depreciated until the next planned dry-docking. Other capitalized improvements are depreciated over the estimated economic life.

The carrying values of vessels and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. Valuations are performed frequently to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. The residual values, useful lives, and depreciation methods are reviewed, and adjusted if appropriate, at the end of each reporting period, except for those cases which are of little consequence.

A vessel or item of equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of an asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement in the year the asset is derecognized.

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Expenditures on the building of new vessels are capitalized as vessels under construction as they are paid. Capitalized value is reclassified from vessel under construction to vessels upon delivery from the dock. The total acquisition cost of a vessel is determined based on the sum of installments paid plus the costs incurred during the construction period. Borrowing costs that are attributable to the construction of the vessels are capitalized as part of the vessel. The interest rate is based on the weighted-average borrowing costs for the Group, limited to the total borrowing costs incurred in the period.

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

Buildings	28 years
Vessels	16-25 years
Vessel equipment	3-5 years
Dry-dockings	2.5 years
Other	3-5 years
Right-of-use assets	1.5-25 years

The assets residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

(14) Investment property

The Group’s owned investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, other than those that meet the criteria to be classified as held for sale (or are included in a disposal group that is classified as held for sale) in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations , investment properties are measured using the cost model in accordance with the requirements of IAS 16 Property, plant and equipment for that model. If investment properties are held by a lessee as right-of-use assets and is not held for sale in accordance with IFRS 5, investment properties are measured in accordance with the requirements of IFRS 16.

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

Buildings 28 years

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Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal.

The Group transfers to or from investment properties when there is a change in use for these assets.

Properties are transferred to or from investment properties when the properties meet, or cease to meet, the definition of investment property and there is evidence of the change in use.

(15) Leases

The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Group assesses whether, throughout the period of use, has both of the following:

A. the right to obtain substantially all of the economic benefits from use of the identified asset; and
B. the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Group for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Group estimates the stand-alone price, maximising the use of observable information.

Group as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group recognizes right-of-use asset and lease liability for all leases which the Group is the lessee of those lease contracts.

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At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments discount using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses it’s incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

A. fixed payments (including in-substance fixed payments), less any lease incentives receivable;
B. variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
C. amounts expected to be payable by the lessee under residual value guarantees;
D. the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
E. payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Group measures the lease liability on an amortised cost basis, which is increasing the carrying amount to reflect interest on the lease liability by using an effective interest method; and reducing the carrying amount to reflect the lease payments made.

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

A. the amount of the initial measurement of the lease liability;
B. any lease payments made at or before the commencement date, less any lease incentives received;
C. any initial direct costs incurred by the lessee; and
D. an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Group measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use

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asset from the commencement date to the earlier of the end of the useful life of the right-ofuse asset or the end of the lease term.

The Group applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group presents right-of-use assets and lease liabilities in the balance sheet and presents interest expense separately from the depreciation charge associate with those leases in the consolidated income statement.

For short-term leases or leases of low-value assets, the Group elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

Group as a lessor

At inception of a contract, the Group classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Group recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Group allocates the consideration in the contract applying IFRS 15.

The Group recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

(16) Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 “Impairment of Assets” may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cashgenerating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an

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

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cashgenerating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(17) Provisions

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract or the expected net cost of continuing with the contract. Before a provision is established, the Group recognizes any impairment loss on the assets associated with that contract.

(18) Revenue recognition

Hire Revenue

Hire revenue is recognized when it is probable that the economic benefits will flow to the Group and when the revenue can be measured reliably. The revenue is measured at the fair value of consideration that the Group has received or had the right to receive. The revenue is recognized on a time proportion basis over the lease term.

Freight Revenue and Vessel Management Revenue

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The Group’s revenue arising from contracts with customers are rendering of services, including shipping services and vessel management services. Such services are separately priced or negotiated, and provided based on contract periods. As the Group provides the services over the contract period, so that the customers simultaneously receive and consume the benefits provided by the Group. Accordingly, the performance obligations are satisfied over time, and the related revenue are recognized by reference to the stage of completion over the period.

Most of the contractual considerations of the Group are received on average during the contract period after the provision of services. When the Group has performed the services to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. However, for some rendering of services contracts, part of the consideration was received from customers upon signing the contract, and the Group has the obligation to provide the services subsequently; accordingly, these amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year, thus, no significant financing component is arised.

(19) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(20) Post-employment benefits

A. Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss during which services are rendered by employees.

B. Defined benefit plans

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of

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the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur.

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

(a) the date of the plan amendment or curtailment, and
(b) the date that the Group recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

The Group will remeasure the net defined benefit liability (asset) and determine current service costs and net interest for the remaining reporting period by renewed actuarial assumptions since the post-employment benefit plan ofthe defined benefit plan be amended, curtailed or settled.

C. Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as related service is provided.

A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(21) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred tax

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Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

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

A. Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
B. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

A. Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
B. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

5. Significant accounting judgments, estimates and assumptions

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

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judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. Please find the details as below:

(1) Judgement

In the process of applying the Group’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the consolidated financial statements:

A. Investment properties

Certain properties of the Group comprise a portion that is held to earn rentals or for capital appreciation and another portion that is owner-occupied. If these portions could be sold separately, the Group accounts for the portions separately as investment properties and property, plant and equipment. If the portions could not be sold separately, the property is classified as investment property in its entirety only if the portion that is owner-occupied is under 1% of the total property.

(2) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

A. Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the income approach (for example the discounted cash flows model) or market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

B. Impairment of non-financial assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date less incremental costs that would be directly attributable to the disposal of the asset or cash generating unit. The value in use calculation

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is based on a discounted cash flow model. The cash flows projections are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

C. Useful lives and depreciation of vessels

Management determines the estimated useful lives and related depreciation charges for its vessels. This estimate is based on the historical experience of the actual useful lives of vessels of similar nature and functions. It could change significantly as a result of technical innovations and competitor actions in response to severe industry activities. Management will increase the depreciation charge where useful lives are less than previously estimated lives, or it will write down technically obsolete or non-strategic assets that have been abandoned or sold. Management assesses the scrap value according to the characteristics of the Group’s vessels and the market research from Clarkson and Demolition Market.

The Group determines the depreciation amount of vessels based on the estimated useful lives and residual values, which are reviewed at each reporting date. The principal assumptions for the Group’s estimation of the useful lives and residual values include those related to the mode of operations, government regulations, and scrap value of vessels in future.

D. Provision for losses from accidents

Provision for losses from accidents is made based on an assessment of the outcome of negotiations, arbitration or litigation, and the recoverability of losses from insurance companies, which requires management’s judgment and estimates. Where the actual outcome or expectation in the future differs from the original estimate, such differences will have an impact on the carrying amount of the provisions and losses incurred in accidents/write-back in the period in which such estimate is changed.

E. Fair value of investment property

Where the fair value of investment property disclosed in Note 6 and Note 12 cannot be obtained from the active market, it is determined using valuation techniques including the sales comparison approach and the income approach. Changes in assumptions adopted in the valuation methods could affect the disclosed fair value of investment property and the result of impairment testing. Please refer to Note 6 and Note 12 for more details.

Contents of significant accounts

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(1) Cash and cash equivalents

Cash on hand Check deposits Demand deposits Time deposits Total	31 December 2020	31 December 2019
	$5,424 18 19,039,838 1,850,000 $20,895,280	$4,862 184 29,095,802 34,488,846 $63,589,694

As at 31 December 2020 and 2019, cash and cash equivalents with carrying amounts of $58,438,469 and $62,736,605 respectively, were pledged to secure bank loans and were classified under other financial assets.

(2) Financial instruments at fair value through profit or loss

Financial liabilities at fair value through profit or loss -Financial liabilities held for trading-current	31 December 2020	31 December 2019
	$-	$1,747,889

－ As at 31 December 2020 and 2019, the amount of the Group’s derivative instruments conversion right embedding in bonds payable were $0 and $1,747,889, respectively, were recognized as financial liabilities held for trading-current. Please refer to Note 6.(11) for further details.

(3) Financial assets at fair value through other comprehensive income

Investments in debt instruments measured at fair value through other comprehensive income Bonds -Current	31 December 2020	31 December 2019
	$1,685,039	$1,004,550

A. For the amount of aforementioned financial assets pledged for bank loans as at 31 December 2020 and 2019, please refer to Note 8.
B. For the credit risk information of financial assets at fair value through other comprehensive income, please refer to Note 12.
(4) Accounts receivable and accounts receivable due from related parties, net

Accounts receivable Less: loss allowance	31 December 2020	31 December 2019
	$5,435,677 (364,982)	$6,120,164 (154,537)

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Subtotal Accounts receivable due from related parties Less: loss allowance Subtotal Accounts receivable, net	31 December 2020	31 December 2019
	5,070,695	5,965,627
	412,739 -	392,537 -
	412,739 $5,483,434	392,537 $6,358,164

The aforementioned accounts receivable are generated by the operation and the Group does not hold any collateral for such trade receivables.

The total carrying amount ended 31 December 2020 and 2019 are $5,848,416 and $6,512,701, respectively. Please refer to Note 6.(16) for more details on loss allowance of trade receivables for the years ended 31 December 2020 and 2019. Please refer to Note 12 for more details on credit risk management.

(5) Inventories

Fuel	31 December 2020 $10,517,805	31 December 2019 $6,278,542

The cost of inventories recognized in expenses amounts to $13,482,906 and $8,249,050 for the years ended 31 December 2020 and 2019, including the write-down of inventories of $508,107 and $0.

As at 31 December 2020 and 2019, the aforesaid inventories were not pledged as collateral.

(6) Investments accounted for using the equity method

Investees	31 December 2020	31 December 2020	31 December 2019	31 December 2019
	Carrying amount	Percentage of ownership (%)	Carrying amount	Percentage of ownership (%)
Investments in associates: Pescadores Investment and Development Inc.	$8,561,823	40%	$3,418,510	40%

A. For the purpose of building the Group’s headquarter, the Group has participated in an investment with Pescadores Co., Ltd. and Mr. Lan Chun Sheng by subscribing for new shares of Pescadores Investment and Development Inc., of which capital has amounted to NT$1 billion. The Group holds 40% of the shares issued by Pescadores Investment and Development Inc. As at 31 December 2020, the Group had contributed capital amounting to NT$512 million and recognized investment losses amounting to NT$271 million.

B. The Group has subscribed for new shares of Pescadores Investment and Development Inc., of which capital has amounted to NT$1.17 billion, with a par value of NT$10 per share for

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2,000,000 shares. The Group remains 40% interest in the shares issued by Pescadores Investment and Development Inc. As at 3 June 2019, the Group had fully paid the amount. As at 1 August 2019, Pescadores Investment and Development Inc. had completed the alteration of the registered capital amount.

C. The Group has subscribed for new shares of Pescadores Investment and Development Inc., of which capital has amounted to NT$1.23 billion, with a par value of NT$10 per share for 2,400,000 shares. The Group remains 40% interest in the shares issued by Pescadores Investment and Development Inc. As at 15 October 2019, the Group had fully paid the amount. As at 18 November 2019, Pescadores Investment and Development Inc. had completed the alteration of the registered capital amount.
D. The Group has subscribed for new shares of Pescadores Investment and Development Inc., of which capital has amounted to NT$1.28 billion, with a par value of NT$10 per share for 2,000,000 shares. The Group remains 40% interest in the shares issued by Pescadores Investment and Development Inc. As at 16 June 2020, the Group had fully paid the amount. As at 22 July 2020, Pescadores Investment and Development Inc. had completed the alteration of the registered capital amount.
E. The urban renewal project of Pescadores Investment and Development Inc. was approved by Taipei City Government on 17 December 2019. The permission of capacity transfer was obtained on 25 January 2021. The building permit has not been obtained.
F. Reconciliation of the associate’s summarized financial information presented to the carrying amount of the Group’s interest in the associate:

Current assets Non-current assets Current liabilities Non-current liabilities Equity Percentage of ownership (%) Group’s carrying amount of the investment Operating revenue Profit for the year (continuing operations) Other comprehensive income for the year Comprehensive income for the year	31 December 2020	31 December 2019
	$457,154 164,501,017 (30,482) (143,523,132)	$497,211 140,251,204 (14,015) (132,188,125)
	2020	2019
	$- 10,018,688 - $10,018,688	$- (2,360,358) - $(2,360,358)

(a) The investments in associates do not have a quoted market price in active market.

(b) The investments in associates had no contingent liabilities, capital commitments, or guarantees.

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G. The aforementioned investments in associates had no contingent liabilities, capital commitments, or guarantees as at 31 December 2020 and 2019.
(7) Property, plant and equipment

Owner occupied property, plant and equipment Property, plant and equipment leased out under operating leases Total	31 December 2020	31 December 2019
	$14,140,468 2,598,753,617 $2,612,894,085	$9,741,583 2,498,194,846 $2,507,936,429

A. Owner occupied property, plant and equipment

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Foreign
Beginning exchange rate Ending
31 December 2020 balance Additions Disposals Re-classification effects balance
Cost
Land $8,659,490 $- $- $3,188,915 $579,353 $12,427,758
-
Buildings 1,041,105 200,190 383,394 79,414 1,704,103
Transportation equipment 94,396 - - - 6,316 100,712
Office equipment 276,647 56,954 - - 21,285 354,886
Total 10,071,638 257,144 - 3,572,309 686,368 14,587,459
Accumulated depreciation
-
Buildings 20,942 59,774 6,583 4,314 91,613
Transportation equipment 69,787 4,694 - - 4,898 79,379
Office equipment 239,326 19,701 - - 16,972 275,999
Total 330,055 84,169 - 6,583 26,184 446,991
Net Balance $9,741,583 $172,975 $- $3,565,726 $660,184 $14,140,468
Foreign
Beginning exchange rate Ending
31 December 2019 balance Additions Disposals Re-classification effects balance
Cost
Land $- $8,398,405 $- $- $261,085 $8,659,490
- - -
Buildings 1,009,715 31,390 1,041,105
-
Transportation equipment 179,066 26,850 113,225 1,705 94,396
- -
Office equipment 254,402 15,525 6,720 276,647
Total 433,468 9,450,495 113,225 - 300,900 10,071,638
Accumulated depreciation
Buildings - 20,310 - - 632 20,942
Transportation equipment 179,066 2,983 113,225 - 963 69,787
- -
Office equipment 218,181 15,319 5,826 239,326
Total 397,247 38,612 113,225 - 7,421 330,055
Net Balance $36,221 $9,411,883 $- $- $293,479 $9,741,583
----- End of picture text -----

B. Property, plant and equipment leased out under operating leases

31 December 2020	Beginning balance	Additions	Disposals	Re-classification	Foreign exchange rate effects	Ending balance
Cost Vessel Vessel equipment	$3,307,622,092 11,943,342	$8,792,940 2,423,004	$- -	$213,796,750 (3,373,998)	$178,886 898	$3,530,390,668 10,993,246

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CONSOLIDATED FINANCIAL STATEMENTS

31 December 2020	Beginning balance	Additions	Disposals	Re-classification	Foreign exchange rate effects	Ending balance
Dry-dock Total Accumulated depreciation Vessel Vessel equipment Dry-dock Total Net Balance	25,251,712	14,586,320	-	(9,325,169)	43,530	30,556,393
	3,344,817,146	25,802,264	-	201,097,583	223,314	3,571,940,307
	827,887,637 7,265,250 11,469,413	125,854,325 2,143,890 12,570,049	- - -	- (3,373,998) (10,790,169)	125,222 898 34,173	953,867,184 6,036,040 13,283,466
	846,622,300 $2,498,194,846	140,568,264 $(114,766,000)	- $-	(14,164,167) $215,261,750	160,293 $63,021	973,186,690 $2,598,753,617

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Foreign
Beginning Impairment exchange rate
31 December 2019 balance Additions loss Disposals Re-classification effects Ending balance
Cost
Vessel $3,389,852,212 $6,084,073 $- $109,656,422 $41,702,446 $(20,360,217) $3,307,622,092
Vessel equipment 14,111,550 777,078 - 619,979 (2,325,628) 321 11,943,342
Dry-dock 25,383,482 11,677,524 - 2,092,558 (9,732,588) 15,852 25,251,712
Total 3,429,347,244 18,538,675 - 112,368,959 29,644,230 (20,344,044) 3,344,817,146
Accumulated depreciation
Vessel 760,085,116 124,647,985 938,147 51,991,115 - (5,792,496) 827,887,637
Vessel equipment 7,557,473 2,653,063 - 619,979 (2,325,628) 321 7,265,250
Dry-dock 11,505,307 11,087,683 - 1,102,342 (10,032,588) 11,353 11,469,413
Total 779,147,896 138,388,731 938,147 53,713,436 (12,358,216) (5,780,822) 846,622,300
Net Balance $2,650,199,348 $(119,850,056) $(938,147) $58,655,523 $42,002,446 $(14,563,222) $2,498,194,846
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C. As at 31 December 2020 and 2019, the residual value of the vessels amounted to $440,085 thousand and $404,138 thousand, respectively, and the estimated useful lives were ranging from 16 to 25 years and 16 to 25 years, respectively.
D. As at 31 December 2020 and 2019, the Group had deposited the chartering income of some vessels, including those still being built, into reserve accounts of lending institutions.
E. For the amount of property, plant and equipment under pledge at 31 December 2020 and 2019, please refer to Note 8 for further details.
F. As at 31 December 2020 and 2019, the Group has entered into certain shipbuilding contracts, please refer to Note 9.(1) for further details.
G. For the years ended 31 December 2020 and 2019, the Group disposed of certain vessels for $0 and $38,722,000, ¥2,059,650,000, which resulted in gains (losses) on disposal of property and

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CONSOLIDATED FINANCIAL STATEMENTS

equipment of $0 and $3,215,743, respectively. Please refer to Note 7 for further details on transactions of transportation equipment for own use with related parties.

H. For the years ended 31 December 2020 and 2019, the amounts of total interest expense before capitalization of borrowing costs were $42,797,752 and $58,768,012; the capitalized interest were $128,241 and $14,814, respectively, with capitalization of rate of borrowing costs at 1.61~3.98% and 4.09~4.29%, respectively.
I. For the year ended 31 December 2019, the carrying amount of certain property, plant and equipment, the ferry, has been written down to their recoverable amount of $1,100,734, resulting a recognition of an impairment loss in the amount of $938,147. This has been recognized in the statement of comprehensive income. The recoverable amount was based on fair value less costs of disposal and measured using the income approach. The fair value measurement is categorized within Level 3 of the fair value hierarchy. The key assumptions on which the Group determined the fair value lesscosts of disposal cost were mainly based on the utility of the subject asset, physical, economical, technological and functional obsolescence, and were adjusted by actual condition of the equipment, its performance and marketability.

(8) Investment property, net

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Beginning Foreign exchange
31 December 2020 balance Additions Disposals Re-classification rate effects Ending balance
Cost
Land $5,176,396 $- $- $(3,188,915) $346,322 $2,333,803
Buildings 622,343 - - (383,394) 41,637 280,586
Total 5,798,739 - - (3,572,309) 387,959 2,614,389
Accumulated depreciation
Buildings 12,518 8,149 - (6,583) 1,235 15,319
Total 12,518 8,149 - (6,583) 1,235 15,319
Net Balance $5,786,221 $(8,149) $- $(3,565,726) $386,724 $2,599,070
Beginning Additions from Foreign exchange
31 December 2019 balance acquisitions Disposals Re-classification rate effects Ending balance
Cost
Land $- $5,020,328 $- $- $156,068 $5,176,396
Buildings - 603,579 - - 18,764 622,343
Total - 5,623,907 - - 174,832 5,798,739
Accumulated depreciation
Buildings - 12,141 - - 377 12,518
Total - 12,141 - - 377 12,518
Net Balance $- $5,611,766 $- $- $174,455 $5,786,221
For the Years Ended 31 December
2020 2019
Rental income from investment property $50,127 $157,349
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CONSOLIDATED FINANCIAL STATEMENTS

Less:

Direct operating expenses from investment property generating rental income Direct operating expenses from investment property not generating rental income Total	(29,269) (32,218) $(11,360)	(113,873) - $43,476

A. The Group acquired land and buildings located at the 3th subsection, Da-an district, Taipei for $15,032,027 in May 2019 for the use of office space. As all the rental agreements with existing lessees, for approximately 37.41% of the total pings, have been expired in March 2020, the investment property was transferred to property, plant and equipment. On 14 September 2020, the Group leased out unused office space for approximately 15.81% of the total pings of the property, equivalent to $2,599,070 which had been transferred from property, plant and equipment to investment property, please refer to Note 6.(7).
B. For the amount of investment property under pledge at 31 December 2020 and 2019, please refer to Note 8.
C. Investment properties held by the Group are not measured at fair value but for which the fair value is disclosed. The fair value measurements of the investment properties are categorized within Level 3. The fair value of investment properties is $2,770,894 and $6,016,576 as at 31 December 2020 and 2019. The fair value has been determined based on valuations performed by an independent valuer and rental rates. The valuation methods used are sales comparison approach and income approach.

(9) Other non-current assets

Prepayment for vessels Deferred expenses Total	31 December 2020	31 December 2019
	$46,061,000 37,420 $46,098,420	$62,911,500 49,704 $62,961,204

Prepayment for vessels is the amount prepaid for building new vessels. The Group had entered into shipbuilding contracts, please refer to Note 9.(1).

(10) Loans and borrowings

31 December 2020 31 December 2019

Bank loans

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189

CONSOLIDATED FINANCIAL STATEMENTS

$73,669,964 $58,124,642 $1,490,190,613 $1,466,335,031

－ Short-term borrowings

－ Long-term borrowings (including current portion)

A. Terms and conditions of outstanding loans were as follows:

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Nominal interest
Loans Currency rates Maturity date Amount
31 December 2020
Unsecured USD 1.52%~3.67% 2019.01.13~2022.10.01 $56,074,167
JPY 0.88%~1.36% 2019.11.07~2022.08.31 13,286,781
Secured USD 1.08%~4.54% 2009.02.20~2030.06.23 928,809,640
JPY 0.88%~2.13% 2007.12.18~2030.04.02 552,325,576
TWD 1.31%~2.07% 2016.03.28~2024.05.31 13,364,413
Total $1,563,860,577
Loans Currency Nominal interest rates Maturity date Amount
31 December 2019
Unsecured USD 2.96%~4.44% 2018.10.31~2021.03.15 $41,000,000
JPY 0.88%~1.40% 2018.09.19~2021.08.31 12,702,504
TWD 1.89% 2019.09.16~2020.09.16 2,507,558
Secured USD 2.56%~5.38% 2009.02.20~2027.07.26 849,572,728
JPY 0.87%~2.13% 2007.01.12~2030.04.02 605,446,730
TWD 1.50%~2.07% 2016.03.28~2024.05.31 13,230,153
Total $1,524,459,673
----- End of picture text -----

B. Future settlements of long-term loans and borrowings were as follows:

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Maturity Period 31 December 2020 31 December 2019
Within one year $178,613,676 $365,152,587
Beyond one year and up to five years 1,021,902,250 813,890,966
More than five years 289,674,687 287,291,478
Total $1,490,190,613 $1,466,335,031
----- End of picture text -----

(a) As at 31 December 2020 and 2019, WML had provided financing guarantees for its subsidiaries of $1,106,409 thousand and $1,073,134 thousand, respectively.
(b) As at 31 December 2020 and 2019, the Group had unused credit facilities of $82,990 thousand and $88,643 thousand, respectively.
(c) The Group’s covenants under the loan agreements are as follows:
i. Loan lenders shall be notified of any significant movement of the Group’s shareholder’s equity.
ii. In certain circumstances, the Group retains the option to select the currency to be used for loan or debt settlement.

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CONSOLIDATED FINANCIAL STATEMENTS

iii. Some equity shares of the Company’s subsidiaries were pledged to secure bank loans.
(d) As at 31 December 2020, the Group negotiated with some banks for deferral of principal payments for one year and lower interest rates.
(e) As at 31 December 2020 and 2019, WML and the Company had provided financial guarantees for the Company’s subsidiaries. Please refer to Note 9.(2) for further details.

(11) Bonds Payable

Secured bonds Convertible bonds Subtotal Less: current portion Net	31 December 2020	31 December 2019
	$48,778,634 -	$45,577,466 21,285,376
	48,778,634 - $48,778,634	66,862,842 21,285,376 $45,577,466

The Group’s convertible bonds matured on 30 September 2020 and was repaid to debtors on 22 October 2020.

A. The Group’s overseas secured bonds were as follows:

First R.O.C. secured bonds issued in 2019 Bonds issued Accumulated converted amount Valuation on bonds payable Net Less: current portion of bonds payable Total Interest expense	31 December 2020	31 December 2019
	$44,814,755 (456,693) 4,420,572	$44,814,755 (601,562) 1,364,273
	48,778,634 -	45,577,466 -
	$48,778,634 $539,236	$45,577,466 $342,310

The Group issued five-year secured bonds with a face value of NT$1,385,000 thousand for the first time on 7 May 2019. The interest is paid every year at the annual interest rate of 0.86%.

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191

CONSOLIDATED FINANCIAL STATEMENTS

B. The Group’s overseas convertible bonds were as follows:

Second Singapore unsecured convertible bonds issued in 2015 Convertible bonds issued Discounts on bonds payable Accumulated converted amount Accumulated redeemed amount Net Less: Current portion of bonds payable Subtotal Second R.O.C. secured convertible bonds issued in 2017 Convertible bonds issued Discounts on bonds payable Accumulated converted amount Accumulated redeemed amount Valuation on bonds payable Net Less: Current portion of bonds payable Subtotal Third R.O.C. unsecured convertible bonds issued in 2017 Convertible bonds issued Discounts on bonds payable Accumulated converted amount Accumulated redeemed amount Valuation on bonds payable Net Less: Current portion of bonds payable Subtotal Total Embedded derivative instruments`－`conversion right, accounted for under financial liabilities at fair value through profit or loss Equity components`－`capital surplus, accounted under capital surplus and other Liability components`－`financial liabilities at fair value through (profit) or loss Interest expense	31 December 2020	31 December 2019
	80,000,000 - - (80,000,000)	80,000,000 (33,097) - (75,000,000)
	- -	4,966,903 (4,966,903)
	-	-
	13,218,771 - (92,832) (13,707,283) 581,344	13,218,771 (314,580) (89,380) - 123,060
	- -	12,937,871 (12,937,871)
	-	-
	26,307,136 - (22,519,561) (3,469,106) (318,469)	26,307,136 (38,040) (22,459,540) - (428,954)
	- -	3,380,602 (3,380,602)
	-	-
	$-	$-
	$-	$1,747,889
	$6,262,129	$6,262,129
	$(1,744,862) $403,593	$1,179,330 $733,113

C. The offering information of the overseas convertible bonds was as follows:

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CONSOLIDATED FINANCIAL STATEMENTS

Item Second Singapore unsecured convertible bonds issued in 2015
1. Offering amount US$80 million 2. Issue date 10 April 2015 3. Outstanding amount US$0 million 4. Interest The bonds will not bear any interest. 5. Issue period From 10 April 2015 to maturity date of 10 April 2020 6. Guarantee institutions None 7. Settlement Unless the bonds have been previously redeemed, repurchased and cancelled or converted, the bonds will be redeemed by the Company on maturity date at an amount equal to the principal amount of the bonds with a yield-to-maturity of 2.0% per annum, calculated on semi-annual basis, which is 110.46% of the principal amount.
1. Redemption at the (1) Each holder has the right to require the Company to redeem all or any portion of option of the holder the principal amount of such holder's bonds on 10 April 2017 at a redemption price equal to the principal amount of the bonds with a yield-to-maturity of 2.0% per annum, calculated on semi-annual basis, which is 104.06% of the principal amount.
(2) In the event that the Company’s common shares ceased to be listed or admitted to trading on the TWSE, each holder has the right to require the Company to redeem all or any portion of the principal amount of such holder's bonds at the early redemption amount equal to the principal amount of the bonds with a yield-tomaturity of 2.0% per annum, calculated on semi-annual basis.

(3) In the event of change of control occurs with respect to the Company, each holder has the right to require the Company to redeem all or any portion of the principal amount of such holder's bonds at the early redemption amount. 9. Conversion (1) Conversion period Unless the bonds have been redeemed before maturity, repurchased and cancelled or converted, each holder of the bonds will have the right at any time during the conversion period commencing 21 May 2015 (the 41[st] day following the closing Date) and ending at the close of business on 31 March 2020 (the 10[th ] day prior to the maturity Date), to convert their bonds.

(2) Conversion price The conversion price was NT$42.79 per share which was 110% of the closing price (NT$38.90) reported by the TWSE in respect of the common shares of the Company on 1 April 2015. The conversion price had been adjusted from NT$42.79 per share to NT$39.78 per share effective 4 July 2015.

The conversion price had been adjusted from NT$39.78 per share to NT$37.09 per share effective 3 July 2016.

The conversion price had been adjusted from NT$37.09 per share to NT$36.43 per share effective 28 October 2016.

The conversion price had been adjusted from NT$36.43 per share to NT$33.5938 per share effective 29 July 2017.

The conversion price had been adjusted from NT$33.5938 per share to NT$33.31 per share effective 3 November 2017.

The conversion price had been adjusted from NT$33.31 per share to NT$32.21 per share effective 18 September 2018.

The conversion price had been adjusted from NT$32.21 per share to NT$30.64 per share effective 3 August 2019.

The conversion price had been adjusted from NT$30.64 per share to NT$30.42 per share effective 30 September 2019.

(3) Conversion to common shares

Upon conversion, the number of common shares converted is calculated by the issuance price (translated at a fixed exchange rate applicable on conversion of bonds of NT$31.271 =US$1.00) divided by the conversion price on the conversion date.

Item

Second R.O.C. secured convertible bonds issued in 2017

Offering amount NT$400,000 thousand 2. Issue date 30 September 2017
Outstanding amount NT$0 thousand 4. Interest The bonds will not bear any interest. 5. Issue period From 30 September 2017 to maturity date of 30 September 2020

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CONSOLIDATED FINANCIAL STATEMENTS

Guarantee institutions Bank Sinopac Company Limited
Settlement A converting bond holder can convert bonds into the Company’s common stock or execute put option based on the Company’s conversion rules. The Company can also buy back cancellation from bonds dealers. Otherwise, bonds are repayable at face value by cash when they mature.
Redemption at the The bondholders can execute put option after two years from issuance date (30 option of the holder September 2019). The Company should send through registered mail the “Notification of bondholder’s put option” 40 days before the maturity date. (The list of bondholders who should receive the notification through registered mail is based on the register list 5 business days before mailing date. Investors who purchase the bonds after the mailing date are notified through announcement.) OTC (Over the Counter) should be notified by the Company and should announce the bondholder’s put option; a written notification should be sent to the share transfer agent by bondholders 40 days after the OTC’s announcement. The redemption value is the bonds face value plus interest. (Face value *0% after two years maturity period, the real yield is 0%). After accepting the redemption request, the Company should redeem the bonds by cash within 5 business days after the maturity date.
Conversion (1) Conversion period
- The bondholders will have the right to convert their bonds at any time during the conversion period commencing 1 January 2018 (the 90[th] day following the closing date) and ending at the close of business on 30 September 2020 (the maturity Date), provided, however, that the conversion right during any closed period shall be suspended and the conversion period shall not include any such closed period, which means (i) the period during which the Company may be required to close its stock transfer books under ROC laws and regulations applicable from time to time; (ii) the period beginning on the 15[th] trading day prior to the record date for the distribution of stock or cash dividends, or subscription of new shares due to capital increase to the date ending on (and including) such record date; (iii) the period beginning on the record date of a capital reduction to one day prior to the trading day on which the shares of the Company are reissued after such capital reduction.
(2) Conversion price

The conversion price was NT$30 per share which was 106.07% of the average closing price (NT$28.28) reported by the TWSE in respect of the common shares of the Company during the 3 trading day period prior to 22 September 2017. The conversion price had been adjusted from NT$30 per share to NT$29.8 per share effective 3 November 2017.

The conversion price had been adjusted from NT$29.8 per share to NT$28.8 per share effective 18 September 2018.

The conversion price had been adjusted from NT$28.8 per share to NT$27.5 per share effective 3 August 2019.

The conversion price had been adjusted from NT$27.5 per share to NT$27.3 per share effective 30 September 2019.

The conversion price had been adjusted from NT$27.3 per share to NT$27.2 per share effective 4 June 2020.

The conversion price had been adjusted from NT$27.2 per share to NT$25 per share effective 12 July 2020.

Item

Third R.O.C. unsecured convertible bonds issued in 2017

Offering amount NT$800,000 thousand
Issue date 2 October 2017
Outstanding amount NT$0 thousand 4. Interest The bonds will not bear any interest. 5. Issue period From 2 October 2017 to maturity date of 2 October 2020
Guarantee institutions None
Settlement A converting bond holder can convert bonds into the Company’s common stock or execute put option based on the Company’s conversion rules. The Company can also buy back cancellation from bonds dealers. Otherwise, bonds are repayable at face value

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194

CONSOLIDATED FINANCIAL STATEMENTS

by cash when they mature.

Redemption at the option of the holder
Conversion

The bondholders can execute put option after two years from issuance date (2 October 2019). The Company should send through registered mail the “Notification of bondholder’s put option” 40 days before the maturity date. (The list of bondholders who should receive the notification through registered mail is based on the register list 5 business days before mailing date. Investors who purchase the bonds after the mailing date are notified through announcement.) OTC (Over the Counter) should be notified by the Company and should announce the bondholder’s put option; a written notification should be sent to the share transfer agent by bondholders 40 days after the OTC’s announcement. The redemption value is the bonds face value plus interest. (Face value *1% after two years maturity period, the real yield is 0.5%). After accepting the redemption request, the Company should redeem the bonds by cash within 5 business days after the maturity date.

(1) Conversion period
The bondholders will have the right to convert their bonds at any time during the conversion period commencing 3 January 2018 (the 90[th] day following the closing date) and ending at the close of business on 2 October 2020 (the maturity Date), provided, however, that the conversion right during any closed period shall be suspended and the conversion period shall not include any such closed period, which means (i) the period during which the Company may be required to close its stock transfer books under ROC laws and regulations applicable from time to time; (ii) the period beginning on the 15[th] trading day prior to the record date for the distribution of stock or cash dividends, or subscription of new shares due to capital increase to the date ending on (and including) such record date; (iii) the period beginning on the record date of a capital reduction to one day prior to the trading day on which the shares of the Company are reissued after such capital reduction.
(2) Conversion price

The conversion price was NT$29.5 per share which was 103.98% of the average closing price (NT$28.37) reported by the TWSE in respect of the common shares of the Company during the 3 trading day period prior to 25 September 2017. The conversion price had been adjusted from NT$29.5 per share to NT$29.3 per share effective 3 November 2017.

The conversion price had been adjusted from NT$29.3 per share to NT$28.3 per share effective 18 September 2018.

The conversion price had been adjusted from NT$28.3 per share to NT$27 per share effective 3 August 2019.

The conversion price had been adjusted from NT$27 per share to NT$26.8 per share effective 30 September 2019.

The conversion price had been adjusted from NT$26.8 per share to NT$26.7 per share effective 4 June 2020.

The conversion price had been adjusted from NT$26.7 per share to NT$24.5 per share effective 12 July 2020.

(12) Leases

A. Group as lessor

Please refer to Note 6.(7)&(8) for relevant disclosure of property, plant and equipment for operating leases under IFRS 16 and the Group’s owned investment properties. Leases of owned investment properties and property, plant and equipment are classified as operating leases as they do not transfer substantially all the risks and rewards incidental to ownership of underlying assets.

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CONSOLIDATED FINANCIAL STATEMENTS

Lease income for operating leases Income relating to fixed lease payments and variable lease payments that depend on an index or a rate	For the Years Ended 31 December	For the Years Ended 31 December
	2020	2019
	$379,066,604	$423,099,237

For operating leases entered by the Group, the undiscounted lease payments to be received and a total of the amounts for the remaining years as at 31 December 2020 and 2019 are as follow:

Not later than one year Later than one year but not later than two years Later than two years but not later than three years Later than three years but not later than four years Later than four years but not later than five years Later than five years Total	31 December 2020	31 December 2019
	$262,678,478 119,200,601 78,490,688 61,855,338 55,724,695 86,883,187 $664,832,987	$230,320,998 117,294,824 102,721,405 77,046,188 61,855,338 142,597,557 $731,836,310

B. Group as lessee

The Group leases various assets, including vessels and buildings. These leases have terms of between 3 and 9.5 years.

The effect that leases have on the financial position, financial performance and cash flows of the Group are as follow:

(a) Amounts recognized in the balance sheet
i. Right-of-use asset

The carrying amount of right-of-use assets

Vessels Buildings Total	31 December 2020	31 December 2019
	$126,265,257 4,311 $126,269,568	$135,335,237 410,748 $135,745,985

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CONSOLIDATED FINANCIAL STATEMENTS

During the years ended 31 December 2020 and 2019, the additions to right-of-use assets of the Group amounting to $610,590 and $55,853,507, respectively.

ii. Lease liabilities

Lease liabilities Current Non-current Total	31 December 2020	31 December 2019
	$14,011,443 110,245,615 $124,257,058	$13,843,870 118,452,736 $132,296,606

(i) Please refer to Note 6.(18).D for the interest on lease liability recognized during the years ended 31 December 2020 and 2019 and refer to Note 12.(5) Liquidity Risk Management for the maturity analysis for lease liabilities.
(ii) Refer to Note 7 for further details of lease liabilities recognized for related party transactions.
(b) Amounts recognized in the statement of comprehensive income

Depreciation charge for right-of-use assets

Vessels Buildings Total	For the Years Ended 31 December	For the Years Ended 31 December
	2020	2019
	$9,664,100 421,490 $10,085,590	$7,774,502 494,362 $8,268,864

The expense relating to short-term leases The expense relating to leases of low-value assets (Not including the expense relating to short-term leases of low- value assets) The expense relating to variable lease payments not included in the measurement of lease liabilities	For the Years Ended 31 December	For the Years Ended 31 December
	2020	2019
	$1,057,441 5,870 175,262	$1,061,393 4,157 -

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197

CONSOLIDATED FINANCIAL STATEMENTS

Income from subleasing right-of-use assets	26,198,960	22,774,281
Gains or losses arising from sale and lease
back transactions	87,857	373,287

(d) Cash outflow relating to leasing activities

For the years ended 31 December 2020 and 2019, the Group’s total cash outflows for lease amounting to $17,207,823 and $13,462,332, respectively.

(e) Sale and leaseback transaction
i. As at 31 December 2020 and 2019, the Group engaged in vessels sale and lease back transactions based on operating performance and investment strategies. The sale and leaseback transactions resulted in financial leases, and the related information of these transactions was as follows:

31 December 2020 31 December 2019	Vessel A Vessel A	Lease term 7 years from 2018.09 Lease term 7 years from 2018.09	Rent ¥28,928,000/quarter Rent ¥28,928,000/quarter	Contract price ¥810,000,000 Contract price ¥810,000,000	Interest rates 1.5% Interest rates 1.5%

ii. Future non-cancellable payments as at 31 December 2020 and 2019 were as follows:

Within one year Beyond one year and up to five years More than five years Total	31 December 2020 $1,122,219 4,208,476 - $5,330,695	31 December 2019
		$1,065,096 4,260,383 798,969 $6,124,448

iii. Based on the agreements of the sale and leaseback transactions, the Group has the option to buy the vessels at maturity date and can acquire the lease vessels when the Group makes the payment.
iv. Please refer to Note 7 for further details of sale and leaseback transaction regarding related parties.

(13) Post-Employment Defined Benefit Plan

A. Defined contribution plans

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198

CONSOLIDATED FINANCIAL STATEMENTS

WELL and WII provide cash contribution at the rate of 6% of the employee’s monthly wages to the Labor Pension personal account of the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act.

B. Defined benefit plans

WII also have a defined benefit plan covering all regular employees in accordance with the Labor Standards Act. This plan provides for a pension benefit payment of 2 units for each year of service. Each unit of retirement payment referred to above shall be computed as the average monthly salary for the last six months at the time of approved retirement. Under this plan, the Company contributes monthly an amount equal to 2% of gross salary to a pension fund, which is deposited into a designated depository account with the Bank of Taiwan.

(14) Equities

A. Capital

(a) On 21 October 2008, the Company was incorporated with a registered capital of NT $3,300,000 thousand. In January 2009, based on the approval of the board of directors, the Company issued shares of stock worth NT$2,000,000 thousand, divided into 200,000 thousand shares with par value of NT$10 per share for listing in Taiwan purpose.

As at 31 December 2020 and 2019, the total outstanding capital of the Company amounted to NT$7,464,092 thousand and NT$6,891,074 thousand, consisting of 746,409 thousand and 689,107 thousand shares with a par value of NT$10 per share.

(b) For the year ended 31 December 2020, convertible bonds were converted into common stock and capital surplus of $24,371 and $41,739, respectively.
(c) For the year ended 31 December 2019, convertible bonds were converted into common stock and capital surplus of $6,202,605 and $12,687,403, respectively.
(d) A resolution was passed at a board of directors meeting of the Company held on 29 March 2019, to issue First R.O.C. secured bonds in 2019 at the amount of NT$1,385,000 thousand in order to raise long-term capital for building vessels and working capital. The secured bonds had been issued on 7 May 2019.
(e) A resolution was passed at a board of directors meeting of the Company held on 29 March 2019 and at the shareholders meeting held on 17 May 2019 to issue up to 80,000,000 shares of stock with a per value of NT$10 per share. The board of directors authorized the chairman of the directors to set the offering price at NT$27.40 per share for 40,000,000 shares on 23 September 2019. The issuance was approved by the Financial Supervisory Commission on 10 September 2019, and the subscription was completed on 1 October 2019. The board of directors authorized the chairman of the directors to set the offering price at NT$21.30 per share for 40,000,000 shares on 28

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CONSOLIDATED FINANCIAL STATEMENTS

May 2020. The issuance was approved by the Financial Supervisory Commission on 9 January 2020, and the subscription was completed on 4 June 2020.

(f) On 17 May 2019, the shareholders resolved at their meeting to distribute the 2018 capital surplus as cash at NT$1.50 per share. The record date of cash dividend was 3 August 2019, and the distribution date was 28 August 2019.
(g) On 22 May 2020, the shareholders resolved at their meeting to appropriate the 2019 earnings by distributing the cash dividends from capital surplus at NT$1.50 per share and increasing capital from capital surplus of NT$172,289 thousand, comprising 17,229 thousand shares with a par value of NT$10. The record date of cash dividends was 12 July 2020, and the distribution date was 31 July 2020.
B. Capital surplus

The components of the capital surplus were as follows:

Additional paid-in capital Employee stock option Additional paid-in capital arising from bond conversion Others Total	31 December 2020	31 December 2019
	$12,699,525 565,552 - 6,634,649 $19,899,726	$37,935,427 472,872 391,383 6,243,266 $45,042,948

C. Retained earnings

(a) The Company’s distribution of directors’ and supervisors’ remuneration is based on the level of earnings and the resolution of the board of directors. Distributions of directors’ and supervisors’ remuneration are classified into cost or operating expense. Any difference between the amounts approved in the shareholders’ meeting and those recognized in the financial statements, if any, is accounted for as a change in accounting estimates and is charged to profit or loss.
(b) On 22 May 2020 and 17 May 2019, the Company’s shareholders resolved at the shareholder’s meeting to appropriate the 2019 and 2018 earnings, respectively. These earnings were distributed as dividends and remuneration to directors and supervisors as follows:

Item	Unit: NTD For the Years Ended 31 December	Unit: NTD For the Years Ended 31 December
	2019	2018
Cash dividends distributed from Capital surplus -per share Stock dividends from capital surplus -per share	$1.50 $0.25	$1.50 -

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CONSOLIDATED FINANCIAL STATEMENTS

For the amount and estimate basis of Directors’ and supervisors’ remuneration please refer to Note 6.(17).E.

(15) Operating revenues

Revenue from contracts with customers Freight revenue Vessel management revenue Subtotal Hire revenue (Note) Hire revenue-long term Hire revenue-short term Subtotal Other operating revenue Total	For the Years Ended 31 December	For the Years Ended 31 December
	2020	2019
	$12,859,334 3,871,724	$13,448,660 3,848,226
	16,731,058 309,301,874 69,713,051	17,296,886 341,112,332 81,827,769
	379,014,925 9,392,570 $405,138,553	422,940,101 7,273,927 $447,510,914

Note: The Group accounted the hire revenue with lease terms within six month for hire revenue-short term.

For the six-month period ended 30 June 2020, Covid-19 impacted economic activities of the world, and then affected financial performance of bulk shipping. The Group’s self-conducted fleet and contract renewal were also affected by the COVID-19 pandemic, which lead to the downturn of first half earnings and gross profits of year. However, the second half earnings and gross profits of year were rebounded continuously. The Group evaluated such decrease in transport demand caused by pandemic should be temporarily unfavorable effects.

Analysis of revenue from contracts with customers during the years ended 31 December 2020 and 2019 are as follows:

A. Disaggregation of revenue

Rendering of services Timing of revenue recognition: Over time	For the Years Ended 31 December	For the Years Ended 31 December
	2020	2019
	$16,731,058	$17,296,886
	$16,731,058	$17,296,886

B. Contract balances

(a) Current contract assets

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CONSOLIDATED FINANCIAL STATEMENTS

31 December 2020 31 December 2019 1 January 2019 Rendering of services $- $18,147 $12,599

The significant changes in the Group’s balances of contract assets during the years ended 31 December 2020 and 2019 are as follows:

For the Years Ended 31 December

The opening balance transferred to trade receivables Change in the measurement of the degree of completion	2020	2019
	$(18,147) $-	$(12,599) $18,147

(b) Current contract liabilities

Rendering of services	31 December 2020	31 December 2019 $91,319	1 January 2019
	$30,446		$-

The significant changes in the Group’s balances of contract assets during the years ended 31 December 2020 and 2019 are as follows:

For the Years Ended 31 December

The opening balance transferred to revenue Change in the measurement of the degree of completion	2020	2019
	$(91,319) $30,446	$- $91,319

C. Transaction price allocated to unsatisfied performance obligations

No disclosure for performance obligation not executed since the duration of all contracts with customers are within one year.

D. Assets recognized from costs to fulfill a contract

None.

(16) Expected credit losses/(gains)

For the Years Ended 31 December 2020 2019 Operating expenses – expected credit losses/(gains) Accounts receivable $210,445 $395,956 Long-term receivables - (10,813) Total $210,445 $385,143 Please refer to Note 12 for more details on credit risk.	For the Years Ended 31 December	For the Years Ended 31 December
	2020	2019
		$395,956 (10,813) $385,143

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CONSOLIDATED FINANCIAL STATEMENTS

The Group measures the loss allowance of its accounts receivable at an amount equal to lifetime expected credit losses. The assessment of the Group’s loss allowance as at 31 December 2020 and 2019 are as follow:

Considering counterparties credit rating, industry characteristics and past experiences, the loss allowance of accounts receivable is measured as a single group by using a provision matrix. Details for provision matrix are as follow:

Neither past due			Past due			Total
	Under 6 months	7~12 months	13~18 months	19~24 months	Over 24 months
$3,559,939 0.57%	$846,711 11.36%	$544,930 12.99%	$109,561 16.26%	$787,275 20.33%	$- 100%	$5,848,416 364,982 $5,483,434
20,142 $3,539,797	96,186 $750,525	70,786 $474,144	17,815 $91,746	160,053 $627,222	- $-

Neither past due			Past due			Total
	Under 6 months	7~12 months	13~18 months	19~24 months	Over 24 months
$5,703,490 0.62%	$103,984 12.86%	$640,700 14.91%	$64,527 15.58%	$- 20.33%	$- 100%	$6,512,701 154,537 $6,358,164
35,583 $5,667,907	13,373 $90,611	95,528 $545,172	10,053 $54,474	- $-	- $-

The movement in the provision for impairment of accounts receivable for the year ended 31 December 2020 is as follows:

Beginning balance Addition/(reversal) for the current period Ending balance	Accounts receivable	Long-term receivables	Total
	$154,537 210,445 $364,982	$- - $-	$154,537 210,445 $364,982

The movement in the provision for impairment of accounts receivable for the year ended 31 December 2019 is as follows:

Beginning balance Addition/(reversal) for the current period	Accounts receivable	Long-term receivables	Total
	$133,802 395,956	$10,813 (10,813)	$144,615 385,143

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CONSOLIDATED FINANCIAL STATEMENTS

Write off for past due over 24 months Ending balance

(375,221) $154,537	- $-	(375,221) $154,537

(17) Operating costs

For the Years Ended 31 December

Depreciation Cost of materials Expenses for chartering services Wages and personnel expenses Other operating costs Total	2020	2019
	$150,456,662 53,331,268 27,783,163 107,241,968 10,090,740 $348,903,801	$146,431,359 45,610,113 28,514,198 101,408,833 10,071,935 $332,036,438

A. Cost of materials

For the Years Ended 31 December

Fuel oil Lubricants Materials Spare parts Survey fees Repairs and maintenance Paints Total	2020	2019
	$13,482,906 9,823,787 8,803,295 12,070,972 5,772,760 2,133,450 1,244,098 $53,331,268	$8,249,050 9,352,167 7,859,658 11,256,095 5,117,380 2,696,111 1,079,652 $45,610,113

B. Expenses for chartering services

For the Years Ended 31 December

Commissions Expenses at ports Agency costs Chartering expenses Dispatch expenses Postage and international communication Other Total	2020	2019
	$16,711,333 3,162,083 737,846 1,018,578 224,795 2,779,949 3,148,579 $27,783,163	$18,046,799 2,442,303 696,541 1,015,795 308,390 2,794,885 3,209,485 $28,514,198

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CONSOLIDATED FINANCIAL STATEMENTS

C. Wages and personnel expenses

Crew wages Insurance fees Food and meals Crew travel fees Bonus Pension cost Total	For the Years Ended 31 December	For the Years Ended 31 December
	2020	2019
	$79,686,440 9,188,964 6,609,150 7,870,725 3,718,734 167,955 $107,241,968	$77,858,863 8,433,956 6,628,230 5,026,880 3,300,090 160,814 $101,408,833

D. Other operating costs

Hull and machinery insurance Compensation Lease payments Other Total	For the Years Ended 31 December	For the Years Ended 31 December
	2020	2019
	$7,775,306 943,927 102,764 1,268,743 $10,090,740	$7,563,443 1,202,906 16,070 1,289,516 $10,071,935

E. Summary statement of employee benefits, depreciation and amortization expenses by function for the years ended 31 December 2020 and 2019:

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For the years ended 31December
2020 2019
Operating Operating Total Operating Operating Total
costs expenses amount costs expenses amount
Employee benefits expense
$83,405,174 $1,909,174 $85,314,348 $81,158,953 $1,899,199 $83,058,152
Salaries
9,188,964 142,425 9,331,389 8,433,956 118,089 8,552,045
Insurance expenses
167,955 59,869 227,824 160,814 53,995 214,809
Pension
Other employee
6,611,154 67,791 6,678,945 6,630,462 52,745 6,683,207
benefits expense
150,456,662 289,510 150,746,172 146,431,359 276,989 146,708,348
Depreciation
- -
14,884 14,884 13,334 13,334
Amortization
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The differences between the actual appropriations of 2019 and 2018 earnings for directors and supervisors’ remunerations as approved at the shareholders’ meeting and the amounts recognized in the financial statements were as follows:

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CONSOLIDATED FINANCIAL STATEMENTS

Directors’ and supervisors’ remuneration Directors’ and supervisors’ remuneration		2019
	The actual appropriation according to the shareholders meeting $330,961	The amount recognized in the financial report $330,956 2018	Difference $5
	The actual appropriation according to the shareholders meeting $274,801	The amount recognized in the financial report $278,965	Difference $(4,164)

The aforementioned difference for the years ended 31 December 2019 and 2018 was accounted for as a change in accounting estimates and was charged to profit or loss for the years ended 31 December, 2020 and 2019.

The Group estimated the amounts of the remuneration to directors and supervisors to be $164,321 and $330,956 during the years ended 31 December 2020 and 2019, respectively. These amounts were calculated based on the Company’s net profit during the years ended 31 December 2020 and 2019, and were estimated according to the earnings allocation method, priority and factors for employee benefits and key management personnel compensation as stated under the Articles of Association. These benefits were expensed under salaries expense for the years ended 31 December 2020 and 2019.

Information on the board of directors’ recommendations and shareholders’ approval regarding the employee bonuses and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

(18) Non-operating income and expenses

A. Interest income

Interest income Bank deposits Financial assets at fair value through other comprehensive income Total	For the Years Ended 31 December	For the Years Ended 31 December
	2020	2019
	$603,216 47,447 $650,663	$1,321,003 40,281 $1,361,284

B. Other income

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CONSOLIDATED FINANCIAL STATEMENTS

Other income, others	For the Years Ended 31 December	For the Years Ended 31 December
	2020 $342,798	2019 $24,982,633

The Group and the lessee had both agreed to early terminate the lease agreement in April 2019 due to vessel management of lesee. The Group received a compensation for $22,600,000 after deducting commissions, which was recognized under other income, others.

C. Other gains and losses

Other gains and losses
Gains (losses) on disposal of property, plant and equipment Profit (losses) from lease modification Foreign exchange gains (losses) Gains (losses) on financial liabilities at fair value through profit or loss(Note) Impairment loss Subtotal Miscellaneous expenses Total	For the Years Ended 31 December
	2020	2019
	$- (8,018) (8,307,008) 1,744,862 -	$3,234,229 (1,665,366) (2,398,502) (1,133,109) (938,147)
	(6,570,164) (2,274,982) $(8,845,146)	(2,900,895) (2,319,689) $(5,220,584)

Note: Balances in both periods were arising from held for trading investment.

Impairment loss was recognized with regard to the ferry, accounted for under property, plant and equipment, being written down to its recoverable amount, please refer to Note 6.(7).I.

D. Interest expense

nterest expense
Interest on borrowings from bank Interest on bonds payable Interest for lease liability Interest on long-term accounts payable (include from related parties) Interest on guarantee deposits received Losses (gains) on hedging instrument Total interest expense	For the Years Ended 31 December
	2020	2019
	$35,839,015 942,829 2,158,114 3,719,627 9,926 - $42,669,511	$50,610,281 1,075,423 1,755,237 5,312,257 - (16,438) $58,736,760

(19) Components of other comprehensive income (loss)

For the year ended 31 December 2020

20
	The original			Other
	cost that was	Other	Income tax	comprehensive
Arising during	removed to	comprehensive	benefits	income, net
the period	hedged item	income	(expenses)	of tax

Components of other comprehensive income that will

not be reclassified to profit or loss:

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CONSOLIDATED FINANCIAL STATEMENTS

Gains (losses) on remeasurements of defined benefit plans $(1,691) Components of other comprehensive income that will be reclassified to profit or loss: Exchange differences on translation (32,333,364) Unrealised gains (losses) from investments in debt instruments measured at fair value through other comprehensive income 39,902 Total of other comprehensive income (loss) $(32,295,153) For the year ended 31 December 2019 Arising during the period Components of other comprehensive income that will not be reclassified to profit or loss: Gains (losses) on remeasurements of defined benefit plans $(13,696) Components of other comprehensive income that will be reclassified to profit or loss: Exchange differences on translation (32,341,441) Unrealised gains (losses) from investments in debt instruments measured at fair value through othercomprehensive income 37,769 Gains (losses) from hedging instruments (149,271) Total of other comprehensive income (loss) $(32,466,639)	Gains (losses) on remeasurements of defined benefit plans $(1,691) Components of other comprehensive income that will be reclassified to profit or loss: Exchange differences on translation (32,333,364) Unrealised gains (losses) from investments in debt instruments measured at fair value through other comprehensive income 39,902 Total of other comprehensive income (loss) $(32,295,153) For the year ended 31 December 2019 Arising during the period Components of other comprehensive income that will not be reclassified to profit or loss: Gains (losses) on remeasurements of defined benefit plans $(13,696) Components of other comprehensive income that will be reclassified to profit or loss: Exchange differences on translation (32,341,441) Unrealised gains (losses) from investments in debt instruments measured at fair value through othercomprehensive income 37,769 Gains (losses) from hedging instruments (149,271) Total of other comprehensive income (loss) $(32,466,639)	$- - - $- The original cost that was removed to hedged item	$(1,691) (32,333,364) 39,902 $(32,295,153) Other comprehensive income	$338 - - $338 Income tax benefits (expenses)	$(1,353) (32,333,364) 39,902 $(32,294,815) Other comprehensive income, net of tax
	$(13,696) (32,341,441) 37,769 (149,271) $(32,466,639)	$- - - - $-	$(13,696) (32,341,441) 37,769 (149,271) $(32,466,639)	$2,739 - - - $2,739	$(10,957) (32,341,441) 37,769 (149,271) $(32,463,900)

(20) Income tax

A. Pursuant to the rules and regulations of the local authority, the Group income tax include WML, WELL and WII. Interim period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim period. As a result, the Group does not disclose the reconciliation between accounting profit and taxable income.
B. For the years ended 31 December 2020 and 2019, the components of income tax expenses (benefits) of WML, WELL and WII were as follows:

Income tax expense (income) recognized in profit or loss

Current income tax expense (income): Current income tax charge Adjustments in respect of current income tax of prior periods Deferred tax expense (income):	For theyears ended 31 December	For theyears ended 31 December
	2020	2019
	$562,107 569	$601,049 (529)

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CONSOLIDATED FINANCIAL STATEMENTS

Deferred tax expense (income) relating to origination and reversal of temporary differences Deferred tax expense arising from write- down or reversal of write-down of deferred tax asset Total income tax expense (income)	(16,600) (8,427) $537,649	(36,180) - $564,340

Income tax relating to components of other comprehensive income

Deferred tax expense (income): Remeasurements of the defined benefit plans Income tax relating to components of other comprehensive income	For theyears ended 31 December	For theyears ended 31 December
	2020	2019
	$(338) $(338)	$(2,739) $(2,739)

Reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:

Tax at the domestic rates applicable to profits in the country concerned Tax effect of revenues exempt from taxation and expenses not deductible for tax purposes Tax effect of deferred tax assets/liabilities Adjustments of other income tax Total income tax expense (income) recognized in profit or loss	For theyears ended 31 December	For theyears ended 31 December
	2020	2019
	$1,081,402 (596,131) 51,809 569 $537,649	$(55,959) 338,429 282,399 (529) $564,340

Deferred tax assets (liabilities) relate to the following:

(a) Unrecognized deferred tax assets

Unrecognized deferred tax assets of the Group are as follows:

Deductible temporary difference Tax loss	31 December 2020	31 December 2019
	$1,033,253	$612,090

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CONSOLIDATED FINANCIAL STATEMENTS

Impairment loss Total	923,492 $1,956,745	967,312 $1,579,402

The ROC Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes and Impairment loss.

The Group’s estimated unused tax effects of the loss carry-forwards as at 31 December 2020:

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----- Start of picture text -----

Year Unused Amount Expiration Year
2014 assessed amount $75,511 2024
2017 assessed amount 56,260 2027
2019 filed amount 521,270 2029
2020 filed amount 380,212 2030
$1,033,253
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(b) Recognized deferred tax assets

For the years ended 31 December 2020 and 2019, changes in deferred tax assets and liabilities are as follows:

Defined benefit plans	Other	Total
$29,642 (1,133) 338 1,945	$28,646 26,160 - 3,191	$58,288 25,027 338 5,136
$30,792	$57,997	$88,789
$27,378 (1,195) 2,739 720 $29,642	$(9,655) 37,375 - 926 $28,646	$17,723 36,180 2,739 1,646 $58,288

Reflected in balance sheet as follows:

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CONSOLIDATED FINANCIAL STATEMENTS

Deferred tax assets Deferred tax liabilities	31 December 2020	31 December 2019
	$136,498 $47,709	$68,251 $9,963

D. The assessment of income tax returns

As at 31 December 2020, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

Wisdom Marine International Inc. (WII) Well Shipmanagement and Maritime Consultant Co., Ltd. (WELL)	The assessment of income tax returns
	Assessed and approved up to 2018 Assessed and approved up to 2018

(21) Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity (after adjusting for interest on the convertible preference shares and etc.) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

Basic earnings per share Profit attributable to ordinary shareholders Weighted-average number of ordinary shares Diluted earnings per share Profit attributable to ordinary shareholders (diluted) Interest expenses on convertible notes, net of tax Foreign exchange losses Amortization of deferred issuance costs Losses on valuation on convertible notes, net of tax Profit attributable to ordinary shareholders (diluted) Weighted average number of ordinary shares (diluted) Effect of conversion of convertible notes Weight average number of ordinary shares (diluted)	For theyears ended 31 December	For theyears ended 31 December
	2020	2019
	$3,780,602	$71,123,928
	729,329,679	665,328,826
	$0.01	$0.11
	$3,780,602 344,323 576,676 - (1,744,862)	$71,123,928 733,113 171,586 19,603 1,179,330
	$2,956,739	$73,227,560
	729,329,679 19,043	665,328,826 33,414,227
	729,348,722 $0.00	698,743,053 $0.10

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CONSOLIDATED FINANCIAL STATEMENTS

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date the financial statements were authorized for issue.

7. Related parties

(1) Names and Relationships of Related Parties

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Name of Related Party Relationship
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Name of Related Party	Relationship
Lan Chun Sheng	Chairman
Pescadores Merchandise Co., Ltd	Other Related Party
Pescadores Travel Co., Ltd	Other Related Party
Wisdom Marine Agency Co., Ltd.	Other Related Party
Hui-wen Investment Co., Ltd	Other Related Party
Unicorn Maritime Agency Co., Ltd.	Other Related Party
Brave Line Co., Ltd.	Other Related Party
YOKO CO., LTD.	Other Related Party
Rich Containership S.A.	Other Related Party
Benefit Transport S.A.	Other Related Party
Samurai Investment S.A.	Other Related Party
Fortunate Transport S.A.	Other Related Party
Asiaeuro Investment S.A.	Other Related Party
Genius Star Management Consulting Co., Ltd.	Other Related Party
Oceanlance Maritime Co., Ltd.	Other Related Party
Pescadores Investment and Development Inc.	Associates
Directors, President and Vice President	Key Management

Note: The name of related party with balance or amount of single transaction over 10% of the total transaction balance or amount would be disclosed separately.

(2) Significant transactions with related parties

A. Chartering expenses

For the years ended 31 December 2020 and 2019, the Group entered into time chartering with other related parties as follows:

Related party Other related parties	For theyears ended 31 December	For theyears ended 31 December
	2020 $1,018,578	2019 $1,015,795

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CONSOLIDATED FINANCIAL STATEMENTS

The price of time chartering with other related parties was determined based on the normal market rate and the necessary costs of the Group.

B. Hire revenue

Related party Other related parties	For the years ended 31 December	For the years ended 31 December
	2020 $2,407,327	2019 $2,148,131

The price of time chartering with other related parties was determined based on the normal market rate and operating cost of the Group.

C. Services received / rendered

For the years ended 31 December 2020 and 2019, the Group received service from (rendered service to) related parties as follows:

Related party	Item	Amount
For the year ended 31 December 2020	Vessel management service income Other income (Passenger ticket revenue and other revenue) Commissions Other expense (Business travel expense, agency fee, survey fee, management consultant fee) Operating expenses (Business travel expense, entertainment expense) Ballast water management systems cost Management revenue Item	$(2,466,706) (71,904) 3,135,636 727,641 49,771 3,095,000 (1,018) Amount
Other related parties ″ ″ ″ ″ ″ Associates Related party
For the year Ended 31 December 2019	Vessel management service income Commissions Operating expenses (Business travel expenses, entertainment expense) Other expense (Business travel expense, agency fee, management consultant fee)	$(2,443,255) 3,593,722 546,525 155,018 228,270 3,036,386 294,959 (971)
Other related parties ″ ″ ″ ″ ″ ″ Associates
	Other expenses and losses
	Ballast water management systems cost Losses on disposal of property, plant and equipment (Commissions) Management revenue

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CONSOLIDATED FINANCIAL STATEMENTS

D. Receivables and payables

For the years ended 31 December 2020 and 2019, the Group incurred receivables and payables with related parties due to vessels operation as follows:

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Prepaid expense 31 December 2020 31 December 2019
Name of related party
Other related parties $34,153 $6,611
Other receivables 31 December 2020 31 December 2019
Name of related party
Other related parties $14,628 $81,645
Other current assets, other 31 December 2020 31 December 2019
Name of related party
Other related parties $625,275 $711,296
Accounts receivable 31 December 2020 31 December 2019
Name of related party
Asiaeuro Investment S.A. $412,739 $392,537
Accounts payable 31 December 2020 31 December 2019
Name of related party
Genius Star Management Consulting Co., Ltd. $575,047 $329,500
-
Other related parties 5,067
Total $580,114 $329,500
Other accrued expenses 31 December 2020 31 December 2019
Name of related party
Other related parties $1,715,504 $1,737,625
----- End of picture text -----

E. Financing

The details of financing provided by a related party to the Group were as follows (accounted for long-term accounts payable-related parties):

31 December 2020	Max balance	Ending balance
Name of related party
Benefit Transport S.A. Samurai Investment S.A. Total 31 December 2019	$105,106,041 44,351,000 $149,457,041 Max balance	$104,183,721 44,351,000 $148,534,721 Ending balance

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CONSOLIDATED FINANCIAL STATEMENTS

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----- Start of picture text -----

Name of related party
Benefit Transport S.A. $83,140,450 $75,136,612
Samurai Investment S.A. 43,697,278 43,697,278
Total $126,837,728 $118,833,890
Interest Expenses For the years Ended 31 December
Name of related party 2020 2019
Benefit Transport S.A. $2,114,242 $2,537,671
Samurai Investment S.A. 1,166,323 1,886,928
Total $3,280,565 $4,424,599
----- End of picture text -----

The financing interesting expenses were calculated based on the rate of LIBOR plus 2% per month commencing from 24 October 2011.

F. Leases

(a) For the years ended 31 December 2020 and 2019, the Group incurred lease expenses of office with other related parties and key management transactions as follows:

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Right-of-use assets 31 December 2020 31 December 2019
Name of related party
Key management $- $167,178
-
Other related parties 144,262
Total $- $311,440
Lease liabilities 31 December 2020 31 December 2019
Name of related party
Key management $- $168,580
-
Other related parties 145,951
Total $- $314,531
Interest expense For the years Ended 31 December
Name of related party 2020 2019
Key management $2,192 $5,778
Other related parties 2,083 5,101
Total $4,275 $10,879
----- End of picture text -----

(b) For the years ended 31 December 2020 and 2019, the Group leased other related parties transactions as follows:

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CONSOLIDATED FINANCIAL STATEMENTS

Rent revenue	For theyears Ended 31 December	For theyears Ended 31 December
Name of related party Other related parties	2020 $32,518	2019 $1,923

The above leases are paid monthly, and do not involve rental deposits. Lease conditions are agreed by both parties. There was no significant difference in the price and payment terms from those with third parties.

G. Guarantee

(a) As at 31 December 2020 and 2019, key management had provided a time deposit guarantee for the Group’s financing loan of $20,316 thousand and $33,197 thousand, respectively.
(b) As at 31 December 2020 and 2019, the Group entered into a loan agreement with financial institutes with M.V. Wisdom Grace as pledge provided by Benefit Transport S.A.
(c) As at 31 December 2019, for the issuance of Second R.O.C. secured convertible bonds issued in 2017, Hui-wen Investment Co., Ltd provided 15,000 thousand shares of Taiwan Land Development Co., Ltd. stocks, and Pescadores Merchandise Co., Ltd provided 10,000 thousand shares of Taiwan Land Development Co., Ltd. stocks as pledge for the Group. As at 31 December 2020: None.

H. Others

(a) For the year ended 31 December 2020, the installments for sale and leaseback transactions paid to other related parties were ¥115,712 thousand, while interest expenses were ¥9,351,511. As at 31 December 2020, the unpaid amount of sale and leaseback transactions was ¥549,648 thousand (accounted for as long-term accounts payable to related parties at $5,330,695).
(b) For the year ended 31 December 2019, the installments for sale and leaseback transactions paid to other related parties were ¥115,712 thousand, while interest expenses were ¥11,055,093. As at 31 December 2019, the unpaid amount of sale and leaseback transactions was ¥665,360 thousand (accounted for as long-term accounts payable to related parties at $6,124,448).
(c) On 22 April 2019, the Group purchased car from other related party for $26,850.
(d) On 20 August 2019, the Group sold car to other related party for $18,486, which resulted in gain on disposal of property and equipment of $18,486.

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CONSOLIDATED FINANCIAL STATEMENTS

(e) In November 2020, the Group received gurantee deposits from Asiaeuro Investment S.A. for vessel management of $1,600,000 and for BBHP of $1,400,000. For the year ended 31 December 2020, the interest expense with regard to the gurantee deposits was $9,926. As at 31 December 2020, the unpaid amount of interest were $9,926.

(3) Salaries and compensation for key management

The Group paid salaries to key management as follows:

Salary and bonus Post-employment benefits	For theyears ended 31 December	For theyears ended 31 December
	2020	2019
	$745,586 16,607 $762,193	$938,689 15,712 $954,401

8. Pledged assets

The carrying amount of pledged assets were as follows:

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Pledged assets Object 31 December 2020 31 December 2019
Property, plant and equipment Bank Loans $2,582,292,000 $2,489,719,000
Property, plant and equipment Long-term payables 17,687,858 18,155,696
(including from
related parties)
Investment property Bank Loans 2,599,070 5,786,221
Financial assets at fair value Bank Loans
through other comprehensive
income 1,685,039 1,004,550
Other financial assets Bank Loans 58,438,469 53,336,605
Other financial assets Bonds Payable - 9,400,000
$2,662,702,436 $2,577,402,072
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9. Significant commitments and contingencies

(1) The Group had entered into shipbuilding contracts as follows:

Vessels Contract price	31 December 2020	31 December 2019
	11 $299,910 thousand	19 $511,930 thousand

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CONSOLIDATED FINANCIAL STATEMENTS

Prepaid $46,061 thousand $62,912 thousand Financed shipbuilding contracts $28,750 thousand $24,000 thousand

The remaining balance of the contract price is payable upon keel-laying, launching, and delivery.

The ship building contracts categorized by year of delivery were as follows:

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Year of delivery Contract Price Number of vessels
2021 $166,670 6
2022 133,240 5
Total $299,910 11
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(2) Financial Guarantee

Guarantor	Name of relative party guarantee	31 December 2020	Period	Purpose
WML The Company WML The Company Poavosa Wisdom S.A. Amis Integrity S.A. Daiwan Glory S.A. Guarantor	Subsidiaries Subsidiaries The Company WII WII Daiwan Glory S.A. Amis Integrity S.A. Name of relative party guarantee	$708,892 thousand ¥60,045,597 thousand $763,686 thousand ¥71,561,337 thousand $99,120 thousand NT$353,140 thousand $5,000 thousand ¥1,468,613 thousand ¥1,894,344 thousand 31 December 2019	2007.01~2030.06 2009.10~2030.04 2020.01~2023.09 2019.05~2024.05 2020.06~2021.06 2020.06~2022.07 2020.06~2022.07 Period	Borrowings Borrowings and operating fund Operating fund Borrowings Operating fund Borrowings Borrowings Purpose
WML The Company WML The Company	Subsidiaries Subsidiaries The Company WII	$615,020 thousand ¥60,927,057 thousand $687,518 thousand ¥72,991,597 thousand $6,000 thousand NT$372,640 thousand	2007.01~2030.04 2009.10~2030.04 2019.01~2020.01 2019.05~2024.05	Borrowings Borrowings and operating fund Operating fund Borrowings

Losses due to major disasters: None.
Significant subsequent events: None.

12. Others

(1) Categories of financial instruments

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CONSOLIDATED FINANCIAL STATEMENTS

Financial assets

31 December 2020 31 December 2019

Financial assets	31 December 2020	31 December 2019
Financial assets at fair value through other comprehensive income Financial assets at amortized cost: Cash and cash equivalents (excluding cash on hand) Accounts receivable and other receivables (including from related parties) Subtotal Other financial assets Total Financial liabilities Financial liabilities at amortized cost: Short-term borrowings Accounts payables (including to related parties) Bonds payable (including current portion) Long-term borrowings (including current portion) Long-term accounts payable (including to related parties) Lease liabilities (including current portion) Subtotal Embedded derivative instruments`－`conversion right Total	$1,685,039	$1,004,550
	20,889,856 8,576,179	63,584,832 10,742,306
	29,466,035	74,327,138
	58,438,469 $89,589,543 31 December 2020	62,736,605 $138,068,293 31 December 2019
	$73,669,964 13,076,937 48,778,634 1,490,190,613 194,170,236 124,257,058	$58,124,642 8,553,601 66,862,842 1,466,335,031 144,050,017 132,296,606
	1,944,143,442	1,876,222,739
	- $1,944,143,442	1,747,889 $1,877,970,628

(2) Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activities. The Group identifies measures and manages the aforementioned risks based on the Group’s policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Group’s board of directors and audit committee must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

(3) Market risk

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CONSOLIDATED FINANCIAL STATEMENTS

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there is usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of Group entities, primarily USD and Japanese Yen.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group’s profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. The Group’s foreign currency risk is mainly related to the volatility in the exchange rates for foreign currency Yen. The information of the sensitivity analysis is as follows:

When USD strengthens/weakens against foreign currency Yen by 10%, the profit for the years ended 31 December 2020 and 2019 decreases/increases by $7,000,984 and $7,003,430, respectively; the equity decreases/increases by $0 and $0, respectively.

Interest rate risk

Interest rate risk is managed by the Group on an ongoing basis with the primary objective of limiting the extent to which net interest expense could be affected by an adverse movement in interest rates. The Group’s has no financial liabilities at fair value through profit or loss bearing fixed interest payable. The Group does not use financial derivatives to hedge against interest rate risk.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 0.25% of interest rate in a reporting period could cause the profit for the years ended 31 December 2020 and 2019 to increases/decreases by $4,707,985 and $4,500,470, respectively; the equity decreases /increases by $0 and $0, respectively.

Equity price risk

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220

CONSOLIDATED FINANCIAL STATEMENTS

The fair value of the Group’s conversion rights of the Euro-convertible bonds issued are susceptible to market price risk arising from uncertainties about future values of the investment securities. The conversion rights of the Euro-convertible bonds issued are classified as financial liabilities at fair value through profit or loss as it does not satisfy the definition of an equity component. Please refer to Note 12.H for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(4) Credit risk management
A. Financial assets subject to credit risk include cash and cash equivalent and accounts receivable. Cash is deposited in large bank institutions, while accounts receivable are disclosed at net amount after deducting allowance for expected credit losses. Per industry practice, most hire revenue are received in advance. In addition, the Group manages credit risks through reviewing credit rating of individual client and limiting the overall risk. The credit risk of accounts receivable and the credit concentration risk are insignificant.
B. The risk exposure of credit risk

The book value of financial assets represents the maximum amount of credit risk exposure. On the reported date, the maximum amount of credit risk exposure is as follows:

Cash and cash equivalents (excluding cash on hand) Accounts receivables and other receivables (including from related parties) Financial assets at fair value through other comprehensive income Other financial assets	31 December 2020	31 December 2019
	$20,889,856 8,576,179 1,685,039 58,438,469 $89,589,543	$63,584,832 10,742,306 1,004,550 62,736,605 $138,068,293

(5) Liquidity risk management

The Group maintains financial flexibility by cash and cash equivalents, bank borrowings, Euro-convertible bonds and finance leases. The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

As at 31 December 2020:

Non-derivative financial instruments Short-term borrowings	Carrying amount	Contractual cash flow	1 year	2 years	3 to 5 years	> 5 years
	$73,669,964	$74,794,229	$74,794,229	$-	$-	$-

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CONSOLIDATED FINANCIAL STATEMENTS

Accounts payables (including due to related parties) Corporate bonds payable Long-term borrowings Long-term accounts payable Long-term accounts payable to related parties Lease liabilities	Carrying amount	Contractual cash flow	1 year	2 years	3 to 5 years	> 5 years
	13,076,937 48,778,634 1,490,190,613 40,304,820 153,865,416 124,257,058 $1,944,143,442	13,076,937 50,707,380 1,576,286,992 43,036,773 169,915,937 131,055,775 $2,058,874,023	13,076,937 423,879 205,344,468 3,753,286 4,365,988 15,947,015 $317,705,802	- 423,879 348,861,709 4,001,844 4,349,154 16,034,515 $373,671,101	- 49,859,622 726,307,459 20,470,367 12,666,075 83,747,104 $893,050,627	- - 295,773,356 14,811,276 148,534,720 15,327,141 $474,446,493

As at 31 December 2019:

Contractual

		Contractual
Non-derivative financial instruments Short-term borrowings Accounts payables (including due to related parties) Corporate bonds payable Long-term borrowings Long-term accounts payable Long-term accounts payable to related parties Lease liabilities	Carrying amount	cash flow	1 year	2 years	3 to 5 years	> 5 years
	$58,124,642 8,553,601 66,862,842 1,466,335,031 19,091,679 124,958,338 132,296,606 $1,874,222,739	$59,664,259 8,553,601 70,402,187 1,585,114,600 21,692,331 148,788,590 140,710,994 $2,034,926,562	$59,664,259 8,553,601 22,615,529 403,416,984 1,023,770 5,862,101 15,755,153 $516,891,397	$- - 397,298 286,185,958 1,108,247 5,845,873 15,306,235 $308,843,611	$- - 47,389,360 602,573,259 4,087,028 17,441,771 47,564,448 $719,055,866	$- - - 292,938,399 15,473,286 119,638,845 62,085,158 $490,135,688

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

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities as at 31 December 2020:

As at 1 Jan. 2020 Cash flows Non-cash changes Foreign exchange movement	Short-term borrowings	Long-term borrowings (including current portion)	Long-term accounts payable (including from related parties)	Lease liabilities (including current portion)	Corporate bonds payable	Guarantee deposits received	Total liabilities from financing activities
	$58,124,642 14,853,642 691,680	$1,466,335,031 (5,565,561) 29,421,143	$144,050,017 48,035,487 2,084,732	$132,296,606 (13,811,136) 5,982,452	$66,862,842 (22,323,261) 3,779,847	$31,970 2,967,844 570	$1,867,701,108 24,157,015 41,960,424

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CONSOLIDATED FINANCIAL STATEMENTS

Other movement

As at 31 Dec. 2020

- $73,669,964	- $1,490,190,613	- $194,170,236	(210,864) $124,257,058	459,206 $48,778,634	- $3,000,384	248,342 $1,934,066,889

Reconciliation of liabilities as at 31 December 2019:

As at 1 Jan. 2019 Cash flows Non-cash changes Foreign exchange movement Other movement As at 31 Dec. 2019	Short-term borrowings	Long-term borrowings (including current portion)	Long-term accounts payable (including from related parties)	Lease liabilities (including current portion)	Corporate bonds payable	Guarantee deposits received	Total liabilities from financing activities
	$50,972,826 7,387,089 (235,273) - $58,124,642	$1,626,113,165 (170,225,997) 10,447,863 - $1,466,335,031	$123,768,248 19,852,387 429,382 - $144,050,017	$87,319,648 (10,641,545) 2,023,462 53,595,041 $132,296,606	$37,439,252 44,120,862 1,536,500 (16,233,772) $66,862,842	$290,505 (259,313) 778 - $31,970	$1,925,903,644 (109,766,517) 14,202,712 37,361,269 $1,867,701,108

(7) Fair values offinancial instruments
A. The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

(a) The carrying amount of cash and cash equivalents, accounts receivables, held-tomaturity financial assets, accounts payable and other current liabilities approximate their fair value due to their short maturities.
(b) Fair value of debt instruments without market quotations, bank loans, bonds payable and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the GreTai Securities Market, average prices for fixed rate commercial paper published by Reuters and credit risk, etc.)
(c) The fair value of derivatives which are not options and without market quotations, is determined based on the counterparty prices or discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using the counterparty prices or appropriate option pricing model (for example, Binomial Tree model) or other valuation method (for example, Monte Carlo Simulation).
B. Fair value of financial instruments measured at amortized cost

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CONSOLIDATED FINANCIAL STATEMENTS

The carrying amount of the Group’s financial assets (including held-to-maturity investments, loans and receivables) and liabilities measured at amortized cost approximate their fair value.

C. Fair value measurement hierarchy for financial instruments

Please refer to Note 12.(9) for fair value measurement hierarchy for financial instruments of the Group.

(8) Derivative financial instruments

As at 31 December 2020

None.

The Group’s derivative financial instruments include and embedded derivatives. The related information for derivative financial instruments not qualified for hedge accounting and not yet settled as at 31 December 2019 is as follows:

Embedded derivatives

The embedded derivatives arising from issuing convertible bonds have been separated from the host contract and carried at fair value through profit or loss. Please refer to Note 6.(11) for further information on this transaction.

The counterparties for the aforementioned derivatives transactions are well known local or overseas banks, as they have sound credit ratings, the credit risk is insignificant.

(9) Fair value measurement hierarchy
A. Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for the asset or liability

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CONSOLIDATED FINANCIAL STATEMENTS

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

B. Fair value measurement hierarchy of the Group’s assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group’s assets and liabilities measured at fair value on a recurring basis is as follows:

As at 31 December 2020 Financial assets at fair value through other comprehensive income As at 31 December 2019 Financial assets at fair value through other comprehensive income Financial liabilities at fair value through profit or loss	Level 1 $1,685,039 Level 1	Level 2 $- Level 2	Level 3 $- Level 3	Total $1,685,039 Total
	$1,004,550 $-	$- $-	$- $1,747,889	$1,004,550 $1,747,889

Transfers between Level 1 and Level 2 during the period

During the years ended 31 December 2020 and 2019, there were no transfers between Level 1 and Level 2 fair value measurements.

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

Reconciliation for fair value measurements in Level 3 of the fair movements during the period is as follows:	value hierarchy for
Beginning balances as at 31 December 2019 Total gains and losses recognized for the year ended 31 December 2020: Amount recognized in (profit) or loss (presented in “other profit or loss”) Acquisition/issues for the year ended 31 December 2020 Disposal/settlements for the year ended 31 December 2020 Transfer in/(out) of Level 3 Ending balances as at 31 December 2020	Liabilities
	At fair value through profit or loss
	Derivatives
	$1,747,889 (1,744,862) - (3,027) - $-

Total gains and losses recognized for year ended 31 December 2020 in the table above contain gains and (losses) related to derivatives on hand as at 31 December 2020 in the amount of $0.

Information on significant unobservable inputs to valuation

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CONSOLIDATED FINANCIAL STATEMENTS

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As at 31 December 2020

None.

As at 31 December 2019

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Significant Relationship
Valuation unobservable Quantitative between inputs Sensitivity of the input to
techniques inputs information and fair value fair value
----- End of picture text -----

	techniques	inputs	information	and fair value	fair value
Financial liabilities:
At fair value through profit or loss
Embedded derivatives –	Option	Volatility	13.38%	The higher the	5% increase in the volatility
Second R.O.C. secured convertible	pricing			volatility, the	would result in decrease in
bonds issued in 2017	model			higher the fair	the Group’s profit by
				value of the	$193,433;5% decrease in the
				embedded	volatility would result in
				derivatives	increase in the Group’s profit
					by $156,336.
Embedded derivatives –	Option	Volatility	13.38%	The higher the	5% increase in the volatility
Third R.O.C. unsecured convertible	pricing			volatility, the	would result in decrease in
bonds issued in 2017	model			higher the fair	the Group’s profit by
				value of the	$44,819;5% decrease in the
				embedded	volatility would result in
				derivatives	increase in the Group’s profit
					by $31,761.

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The external evaluation institute ensures the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The external evaluation institute also analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Group’s accounting policies at each reporting date.

C. Fair value measurement hierarchy of the Group’s assets not measured at fair value but for which the fair value is disclosed

As at 31 December 2020 Level 1 Level 2 Level 3 Total Assets not measured at fair value but for which the fair value is disclosed: Investment properties and property, plant and equipment for own use (please refer to Note 6.(8)) $- $- $2,770,894 $2,770,894

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CONSOLIDATED FINANCIAL STATEMENTS

As at 31 December 2019 Level 1 Level 2 Level 3 Total Assets not measured at fair value but for which the fair value is disclosed: Investment properties and property, plant and equipment for own use (please refer to Note 6.(8)) $- $- $6,016,576 $6,016,576

(10) Significant assets and liabilities denominated in foreign currencies

The Group is mainly affected by the impact of fluctuation in the currency exchange rate for US Dollar or Japanese Yen. The Group’s significant exposure to foreign currency risk was as follows:

Financial liabilities	31 December 2020	31 December 2020		31 December 2019	31 December 2019
	Foreign currency (Note1)	Exchange rate (Note2)	USD/JPY	Foreign currency (Note1)	Exchange rate (Note2)	USD/JPY
	$20,734,960 ￥9,356,696,827 NT$1,370,679,611	103.11 0.0097 0.0356	￥2,137,981,726 $90,744,805 $48,778,634	$21,770,800 ￥9,973,705,550 NT$1,855,640,268	108.64 0.0092 0.0334	￥2,365,179,712 $91,805,095 $61,895,940
Monetary item USD：JPY JPY：USD NTD：USD

Note1: The foreign currency amount of monetary item is the carrying amount of foreign currency financial liabilities

Note2: The exchange rate of monetary item is spot rate.

For the years ended 31 December 2020 and 2019, the Group had foreign exchange gains (losses) of $(8,307,008) and $(2,398,502), respectively.

(11) Capital management

The capital risk management is established to ensure the Group’s ability to continue to operate as a going concern. Under this risk management, the Group may adjust dividend payment to the shareholders, reduce the capital for redistribution to shareholders, issue new shares, adjust capital expenditure plan and dispose assets to settle any liabilities in order to maintain or adjust capital structure according to operating needs, investment purpose and market environment. The Group’s capital structures is consisted of net liabilities (borrowings excluding the amount of cash and cash equivalents) and equity (common stock, capital surplus and other equity).

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CONSOLIDATED FINANCIAL STATEMENTS

(12) Accounting policy differences as referred to in Article 3 of Regulations Governing the Preparation of Financial Reports by Securities Issuers with respect to the Group’s balance sheet and statement of comprehensive income for the periods: None.
(13)List of the Group vessels as at 31 December 2020

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No. Name of Vessel Construction year D.W.T. Vessel type
----- End of picture text -----

No.	Name of Vessel	Construction year	D.W.T.	Vessel type
1	Amis Ace	2013	60,830	Supramax
2	Amis Brave	2013	61,467	Supramax
3	Amis Champion	2014	60,830	Supramax
4	Amis Dolphin	2015	60,830	Supramax
5	Amis Elegance	2015	55,404	Supramax
6	Amis Fortune	2015	55,468	Supramax
7	Amis Glory	2016	55,474	Supramax
8	Amis Hero	2017	63,469	Supramax
9	Amis Integrity	2017	62,980	Supramax
10	Amis Justice	2017	63,531	Supramax
11	Amis Kalon	2010	58,107	Supramax
12	Amis Leader	2010	58,107	Supramax
13	Amis Miracle	2018	59,982	Supramax
14	Amis Nature	2018	55,472	Supramax
15	Amis Orchid	2012	58,120	Supramax
16	Amis Power	2018	64,012	Supramax
17	Amis Queen	2019	63,000	Supramax
18	Amis Respect	2020	63,449	Supramax
19	Amis Star	2019	61,123	Supramax
20	Amis Treasure	2020	61,125	Supramax
21	Amis Unicorn	2020	60,903	Supramax
22	Amis Victory	2020	63,364	Supramax
23	Amis Wisdom I	2010	61,611	Supramax
24	Amis Wisdom II	2010	61,611	Supramax
25	Amis Wisdom III	2011	61,527	Supramax
26	Amis Wisdom VI	2011	61,456	Supramax
27	Arikun	2007	8,763	Handy
28	Atayal Ace	2013	16,805	Handy
29	Atayal Brave	2012	16,805	Handy
30	Atayal Mariner	2012	16,805	Handy
31	Atayal Star	2012	16,805	Handy
32	Babuza Wisdom	2009	18,969	Handy
33	Beagle II	2007	17,224	Handy
34	Beagle VII	2007	16,822	Handy

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228

CONSOLIDATED FINANCIAL STATEMENTS

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----- Start of picture text -----

No. Name of Vessel Construction year D.W.T. Vessel type
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35	Bizen	2008	8,721	Handy
36	Blue Horizon	2012	207,867	Cape
37	Bunun Ace	2013	37,744	Handy
38	Bunun Benefit	2019	37,372	Handy
39	Bunun Brave	2014	45,556	Handy
40	Bunun Champion	2014	45,556	Handy
41	Bunun Dynasty	2014	37,795	Handy
42	Bunun Elegance	2014	45,556	Handy
43	Bunun Fortune	2015	37,790	Handy
44	Bunun Glory	2015	37,046	Handy
45	Bunun Hero	2015	37,811	Handy
46	Bunun Infinity	2016	37,654	Handy
47	Bunun Justice	2017	37,748	Handy
48	Bunun Kalon	2018	37,653	Handy
49	Bunun Leader	2019	37,650	Handy
50	Bunun Miracle	2020	37,060	Handy
51	Bunun Noble	2020	37,655	Handy
52	Bunun Wisdom	2012	38,168	Handy
53	Clear Horizon	2012	207,947	Cape
54	Daiwan Champion	2015	34,393	Handy
55	Daiwan Dolphin	2015	34,393	Handy
56	Daiwan Elegance	2015	35,331	Handy
57	Daiwan Fortune	2015	34,893	Handy
58	Daiwan Glory	2015	35,531	Handy
59	Daiwan Hero	2016	34,376	Handy
60	Daiwan Infinity	2016	34,376	Handy
61	Daiwan Justice	2016	34,327	Handy
62	Daiwan Kalon	2016	34,327	Handy
63	Daiwan Leader	2018	34,442	Handy
64	Daiwan Miracle	2019	34,447	Handy
65	Daiwan Wisdom	2010	31,967	Handy
66	Frontier Bonanza	2010	179,435	Cape
67	Genius Star III	2006	13,567	Handy
68	Genius Star IX	2009	12,005	Handy
69	Genius Star VII	2007	12,005	Handy
70	Genius Star VIII	2007	12,005	Handy
71	Genius Star X	2010	12,005	Handy
72	Genius Star XI	2012	13,663	Handy
73	Genius Star XII	2013	13,077	Handy
74	Global Faith	2010	28,050	Handy

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CONSOLIDATED FINANCIAL STATEMENTS 229

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No. Name of Vessel Construction year D.W.T. Vessel type
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No.	Name of Vessel	Construction year	D.W.T.	Vessel type
75	Hibiscus	2002	48,610	Handy
76	Hoanya Wisdom	2008	21,119	Handy
77	Ital Melodia	2007	43,585	Other-container
78	Izumo	2007	20,150	Handy
79	Joseph Wisdom	2018	6,400	LPG
80	Katagalan Wisdom	2012	98,697	Panamax
81	Katagalan Wisdom III	2012	98,697	Panamax
82	LBC Energy	2011	71,066	Panamax
83	Ligulao	2010	5,296	Other-PCTC
84	Magnate	2004	18,828	Handy
85	Mega Benefit	2018	80,733	Panamax
86	Naluhu	2010	58,107	Supramax
87	Ocean Victory	2011	28,386	Handy
88	Paiwan Wisdom	2010	31,967	Handy
89	Papora Wisdom	2009	28,050	Handy
90	Pazeh Wisdom	2009	18,969	Handy
91	Pescadores	1999	198	Other-passenger
92	Poavosa Ace	2013	28,208	Handy
93	Poavosa Brave	2009	28,367	Handy
94	Poavosa Wisdom	2009	28,050	Handy
95	Poavosa Wisdom III	2011	28,232	Handy
96	Poavosa Wisdom VI	2011	28,050	Handy
97	Poavosa Wisdom VII	2012	28,208	Handy
98	Poavosa Wisdom VIII	2013	28,208	Handy
99	Rukai Benefit	2019	14,040	Handy
100	Sakizaya Ace	2013	74,936	Panamax
101	Sakizaya Brave	2013	74,940	Panamax
102	Sakizaya Champion	2014	78,080	Panamax
103	Sakizaya Diamond	2015	81,938	Panamax
104	Sakizaya Elegance	2015	81,938	Panamax
105	Sakizaya Future	2016	81,938	Panamax
106	Sakizaya Glory	2016	84,883	Panamax
107	Sakizaya Hero	2016	81,067	Panamax
108	Sakizaya Integrity	2016	81,010	Panamax
109	Sakizaya Justice	2017	81,691	Panamax
110	Sakizaya Kalon	2017	81,691	Panamax
111	Sakizaya Leader	2017	81,691	Panamax
112	Sakizaya Miracle	2017	81,668	Panamax
113	Sakizaya Noble	2017	80,982	Panamax

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230

CONSOLIDATED FINANCIAL STATEMENTS

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No. Name of Vessel Construction year D.W.T. Vessel type
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No.	Name of Vessel	Construction year	D.W.T.	Vessel type
114	Sakizaya Orchid	2017	81,588	Panamax
115	Sakizaya Power	2017	81,574	Panamax
116	Sakizaya Queen	2018	81,858	Panamax
117	Sakizaya Respect	2018	81,858	Panamax
118	Sakizaya Star	2020	82,516	Panamax
119	Sakizaya Treasure	2020	82,400	Panamax
120	Sakizaya Wisdom	2011	76,457	Panamax
121	Saysiat Benefit	2018	13,900	Handy
122	Scarlet Eagle	2014	81,842	Panamax
123	Scarlet Falcon	2014	82,260	Panamax
124	Scarlet Rosella	2015	82,235	Panamax
125	Siraya Wisdom	2007	21,119	Handy
126	Taikli	2011	13,139	Handy
127	Tao Ace	2013	25,037	Handy
128	Tao Brave	2011	25,065	Handy
129	Tao Mariner	2010	25,065	Handy
130	Tao Star	2010	25,065	Handy
131	Tao Treasure	2013	25,036	Handy
132	Taokas Wisdom	2008	31,943	Handy
133	Timu	2005	17,224	Handy
134	Unicorn Bravo	2007	8,759	Handy
135	Unicorn Logger	2008	8,700	Handy
136	Wisdom Grace	1998	18,193	Other-container

(14)Information on major shareholders

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Name of Major Shareholder Number of shares Percentage of Ownership
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Lan Chun Sheng	202,478,349	27.12 %
Pescadores Merchandise Co., Ltd.	52,185,814	6.99 %
Unicorn Maritime Agency Co., Ltd.	40,021,672	5.36 %

A. The information on major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, summarized the shareholders who held over 5% of total nonphysical common stocks and preferred stocks (including treasury stocks) on the last business date of each quarter. The registered non-physical stocks may be different from the capital stocks disclosed in the financial statement due to different calculation basis.
B. If shares are entrusted, the above information regarding such shares will be revealed by each trustors of individual trust account. The shareholders holding more than 10% of the total shares of the company should declare insider’s equity according to Securities and Exchange Act. The numbers of the shares declared by the insider include the shares of the

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231

CONSOLIDATED FINANCIAL STATEMENTS

trust assets which the insider has discretion over use. For details of the insider’s equity announcement please refer to the TWSE website.

13. Segment information

(1) General information

The Group operates in a single industry. According to the global management nature of the ship management industry, the Group determined each business unit as an operating segment and was disclosed according to their operating types, operating assets and the Group’s operating structure. The Group was identified as a single reportable segment.

The board of directors allocates the profit and assesses performance of the segments based on the financial information used in internal management which is based on each vessel’s operating result. The financial information is not different from the consolidated statement of comprehensive income therefore no further segmental information was disclosed.

(2) Geographic information

Revenue from external customers is classified according to the location of customers and noncurrent assets are classified according to the registry of assets. The Group’s geographic information is as follows:

Revenue from external customers: Singapore Japan The Netherlands Denmark Germany China Hong Kong Others Total Non-current assets: Panama Cayman Hong Kong Taiwan Liberia Total	For theyears ended 31 December	For theyears ended 31 December
	2020	2019
	$86,821,676 56,095,584 46,752,762 39,835,538 25,921,227 23,786,458 22,160,076 103,765,232	$67,530,241 76,450,178 87,956,912 30,099,585 6,246,829 29,237,066 34,732,348 115,257,755
	$405,138,553	$447,510,914
	2020.12.31	2019.12.31
	$2,457,083,507 11,000,075 74,627,809 17,690,456 227,421,876 $2,787,823,723	$2,515,291,072 13,168,106 77,653,995 17,037,330 89,229,632 $2,712,380,135

Note: non-current assets are property, plant and equipment, right-of-use assets, investment property and prepaid expenses-vessel.

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232

CONSOLIDATED FINANCIAL STATEMENTS

(3) Major customers

Individual customers accounting for at least 10% of net sales for the years ended 31 December 2020 and 2019 were as follows:

Customer A:	For theyears ended 31 December	For theyears ended 31 December
	2020 $46,421,231	2019 $68,415,445

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233

CONSOLIDATED FINANCIAL STATEMENTS

AI assistant

WISDOM — Annual Report 2021

52177_rns_2021-09-22_f3560471-22b2-4b61-95c7-b89fd799b54a.pdf

Wisdom Marine Lines Co., Limited

2020 Annual Report

Notice to readers

Spokesperson

Deputy Spokesperson

Headquarters

Wisdom Marine Lines Co., Limited

Subsidiaries

Wisdom Marine Lines S.A. (Panama)

Wisdom Marine Lines Co., Limited (Singapore

Branch)

Wisdom Marine International Inc.

Litigation/non-Litigation agent in the Republic o f China

Stock Transfer Agent

Auditors

Overseas Securities Exchange

London Stock Exchange

Corporate Website ： http://www.wisdomlines.com.tw

Board of Directors

Content

1. Letter to Shareholders

Dear Shareholders,

External Environment

2020 Business Results

2021 Business Plan

2. Company Overview

2.1 Company and Group Profile

2.1.1 Date of Establishment

2.1.2 Addresses and Telephones of Headquarters, Offices, and Factories

2.1.2.1 Headquarters

2.1.2.2 Singapore Branch

2.1.2.3 Subsidiary in Panama

2.1.2.4 Subsidiary in Taiwan

2.1.2.5 Sub-subsidiary in Rotterdam

2.1.2.6 Sub-subsidiary in Taiwan

2.2 Organization

2.2.1 Organization

2.2.2 Group history

2.2.3 Risks

3. Corporate Governance Report

3.1 Organization

3.2 Profiles of Directors, Supervisors, President, Vice Presidents, Assistant Vice Presidents, and Managers of Various Departments and Branch Offices

3.2.1 Director

3.2.1.1 Basic information

3.2.1.3 Large shareholders of institutional shareholder

3.2.1.4 Professional knowledge and independence of Directors

3.2.2 Key Management Personnel

3.2.2.1 Basic Information

3.3.2 Remuneration of supervisors Not applicable for the Company as it does not appoint

supervisors.

3.3.3 Remuneration of supervisors Not applicable for the Company as it does not appoint supervisors.

3.3.4 Manager's Name and Distribution of Employee Bonus: N/A.

3.4 Corporate Governance Practices

3.4.1 Operations of the Board of Directors

3.4.2 Evaluation of Board of Directors

3.4.3 Operations of the Audit Committee

Other important information:

Review of financial reports:

Assessment of validity of the internal control system:

3.4.4 Corporate governance practices and departure from Corporate Governance BestPractice Principles for TWSE/GTSM Listed Companies and reasons

3.4.5 Operations of the Remuneration Committee

3.4.5.1 Members of Remuneration Committee:

3.4.5.2 Operations of the Remuneration Committee

3.4.6 Operations of the Nomination Committee

3.4.6.1 Members of Nomination Committee:

3.4.6.2 Composition and operations of the Nomination Committee

3.4.8 Ethical corporate management and related measures:

3.4.9 For inquiries regarding corporate governance principles and related guidelines:

3.4.10 Other useful information for explaining corporate governance practices: None.

3.4.11 Status of implementation of internal control system

3.4.12 Legal penalty against the company or its internal personnel, or any disciplinary penalty

3.4.13 Major Resolutions of Annual General Meeting and Board Meetings

3.4.13.1 Major Resolutions of Annual General Meeting

3.4.13.2 Major Resolutions of Board Meetings

3.4.14 Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting to Important Resolutions Passed by the Board of Directors: None.

3.4.15 Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, CEO, and Heads of Accounting, Finance, Internal Audit and R&D

3.5 Information Regarding to the Company’s Audit Fee and Independence

WISDOM Annual Report 2021