1
AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
31 DECEMBER 2022 AND 2021
Registered: Wind ward 3, Regatta Office Park , PO Box 1350, Grand Cay m a n
Address: 7F., No. 237, Sec. 2, Fushing S. Rd., Taipei City, Taiwa n
Telephone: 886-2-2755-2637
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TABLE OF CONTENTS
Contents Page
Cover page 1
Table of contents 2
Statement by directors 3
Audit report of independent auditors 4-7
Consolidated balance sheets 8-9
Consolidated statements of comprehensive income 10
Consolidated statements of changes in equity 11
Consolidated statements of cash flows 12
Notes to the consolidated financial statements
1. History and organization 13
2. Date and procedures of authorization of financial statements for issue 13
3. Newly issued or revised standards and interpretations 13-15
4. Summary of significant accounting policies 15-42
5. Significant accounting judgments, estimates and assumptions 43-45
6. Contents of significant accounts 45-70
7. Related party transactions 70-75
8. Pledged assets 75
9. Significant commitments and contingencies 76
10. Losses due to major disasters 77
11. Significant subsequent events 77
12. Others 77-88
13. Other disclosures 88-89
14. Segment information 89-90
3
STATEMENT BY DIRECTORS
This statement specifies the responsibility of the Board of Directors in compiling the Consolidated
Financial Report of Wisdom Marine Lines Co., Limited (Cayman) (the “Company”) and its
subsidiaries (together the “Group”).
In addition to the disclosure of accounting information, a complete consolidated financial report shall
include the roles of each segment of the Group and their future development, so that the readers of
the Financial Report can fully understand the future development and potential risk of the Group. In
respect of the full and complete disclosure of accounting procedures and financial information, the
Board has responsibility to review the Group’s strategies, important business plans, and risk
management policies, to set operational targets, and to monitor the results of operations, in order to
comply with relevant regulations, protect company interests, and avoid potential fraud within the
Group. We have provided the relevant financial information for every financial report year, and
disclosed the consolidated assets, liabilities, financial structure and operating performance in a
truthful, fair and objective manner. Our disclosure is based on the principles of consistency and going
concern assumption, and we make fair judgments and estimations regarding accrual items at the end
of each year, in order to prevent erroneous information in the consolidated financial report.
The Board of Directors and management reviewed the consolidated financial report of the Company
and its subsidiaries for 2022 and 2021 on 24 February 2023. 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 2022 and 2021 and the
consolidated results and changes in equity of the Group for the years then ended, and there is no
fraudulent or concealed information.
The Board of Directors has, on the date of this statement, authorized these financial statements for
issue.
Wisdom Marine Lines Co., Limited
Director
24 February 2023
4
Independent Auditors’ Report
To the Board of Directors and Stockholders of
Wisdom Marine Lines Co., Limited (Cayman)
Opinion
We have audited the consolidated financial statements of Wisdom Marine Lines Co., Limited
(Cayman) and its subsidiaries ( the Group) , which comprise the consolidated statement of financial
position as at 31 December 2022, and the related consolidated statements of comprehensive income,
changes in equity and cash flows for the years ended 31 December 2022, and notes to the consolidated
financial statements, including the summary of significant accounting policies.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of the Group as at 31 December 2022, and their
consolidated financial performance and cash flows for the years ended 31 December 2022, in
accordance with International Financial Reporting Standards (IFRSs).
Basis for Opinion
We conducted our audits in accordance with the International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the
Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the
Republic of China (the “Norm”), which includes International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International In-
dependence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
5
Revenue recognition
Hire revenues amounted to $821,115,969 for the year ended 31 December 2022, accounting for 98%
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 2022, the amount of the Group’s property, plant and equipment was
$2,482,633,111, which accounted for 81% of total assets. The management assessed if there is any
indication that an asset may be impaired on balance sheet date. If there is any indication that an asset
may be impaired, the Group should evaluate the recoverable amount of the cash-generating-unit
(CGU), to which the asset belongs. The property, plant and equipment of the Group mainly consists
of vessel equipment. The subsidiaries of the Company took the one-vessel-one-company strategy to
manage vessels, and the main CGU for each subsidiary is their vessels. With the view that the amount
of property, plant and equipment being material and the calculation of recoverable amount involving
numerous assumptions and estimates, we have determined the impairment of property, plant and
equipment as a key audit matter. The audit procedures we conducted regarding the impairment of
property, plant and equipment included but not limited to the following: evaluating the
appropriateness of the accounting policy for impairment of property, plant and equipment; inspecting
the impairment evaluation report provided by the Group and assessing the reasonableness of
managements identification of indicators of impairment and the assumptions used, including
identification of CGU, estimation of cash flows and discount rate. We also evaluated the disclosure
regarding property, plant and equipment in Notes 4, 5 and 6 of the consolidated financial statements.
Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the IFRSs, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
6
concern and using the going concern basis of accounting unless management either intends to
liquidate the Groupor to cease operations, or has no realistic alternative but to do so.
Those charged with governance, including audit committee, are responsible for overseeing the
Group’s financial reporting process.
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 ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with the ISAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
4. Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern .
If we conclude that a material uncertainty exists, we are required to draw attention in our 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 Group to
cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the accompanying notes, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
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6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our 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.
/s/Lu, Chian Uen
/s/Liu, Jung Chin
for and on behalf of
Ernst & Young LLP
Chartered Accountants and Statutory Auditors
Taiwan
24 February 2023
Notes 31 December 2022 31 December 2021
ASSETS
Cash and cash equivalents 6.1 $208,356,848 $189,651,525
Current financial assets at fair value through other comprehensive income 6.3 & 8 12,799,202 3,753,850
Accounts receivable, net 6.4 & 6.16 4,717,118 5,878,992
Accounts receivable due from related parties, net 6.4, 6.16 & 7 319,012 375,573
Other receivables 7 2,546,001 3,216,619
Inventories 6.5 6,333,475 3,557,729
Prepayments 7 7,519,313 6,576,312
Other current financial assets 6.1 & 8 49,812,812 48,896,218
Other current assets 7 25,186,042 20,262,906
Total current assets 317,589,823 282,169,724
Non-current financial assets at fair value through profit or loss 6.2 910,700 -
Investments accounted for using the equity method 6.6 10,384,250 9,949,892
Property, plant and equipment 6.7 & 8 2,482,633,111 2,504,831,302
Right-of-use assets 6.12 & 7 180,731,492 140,564,704
Investment property, net 6.8 & 8 2,360,088 2,627,735
Deferred tax assets 6.20 61,210 99,627
Guarantee deposits paid 14,321,730 10,671,860
Other non-current assets 6.9 53,906,014 50,137,998
Total non-current assets 2,745,308,595 2,718,883,118
TOTAL ASSETS $3,062,898,418 $3,001,052,842
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
31 DECEMBER 2022 AND 2021
(All Amounts Expressed in US Dollars)
The accompanying notes are an integral part of the consolidated financial statements.
8
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONT’D)
(All Amounts Expressed in US Dollars)
Note 31 December 2022 31 December 2021
LIABILITIES
Short-term borrowings 6.10 $25,000,000 $19,434,367
Accounts payable 8,002,877 5,183,797
Accounts payable to related parties
Other accrued expenses 7 29,634,552 22,615,218
Advance receipts 16,044,421 19,746,063
Other current liabilities 3,171,764 1,306,144
Current lease liabilities 6.12 & 7 13,866,866 15,007,603
Long-term borrowings, current portion 6.10 257,397,975 279,088,093
Long-term accounts payable, current portion 6.12 3,486,225 4,001,390
Long-term accounts payable to related parties, current portion 6.12 & 7 875,810 1,005,230
Total current liabilities 357,989,190 367,430,148
Bonds payable 6.11 44,904,899 49,655,475
Long-term borrowings, non-current portion 6.10 845,045,257 1,032,331,456
Deferred tax liabilities 6.20 17,459 3,738
Non-current lease liabilities 6.12 & 7 127,795,204 107,210,291
Long-term accounts payable, non-current portion 6.12 21,477,066 31,853,444
Long-term accounts payable to related parties, non-current portion 6.12 & 7 132,438,840 147,683,556
Net defined benefit liability, non-current 6.13 175,310 194,408
Guarantee deposits received - 390
Total non-current liabilities 1,171,854,035 1,368,932,758
TOTAL LIABILITIES 1,529,843,225 1,736,362,906
EQUITY
6.14
Common stock 238,739,686 238,739,686
Capital surplus 1,237,415 1,237,415
Legal reserve 6,960 6,960
Unappropriated retained earnings 1,017,955,338 801,813,459
Exchange differences on translation of foreign financial statements 275,851,783 222,873,948
Unrealized gains (losses) from financial assets measured at fair value through
other comprehensive income (735,989 ) 18,468
TOTAL EQUITY 1,533,055,193 1,264,689,936
TOTAL LIABILITIES AND EQUITY $3,062,898,418 $3,001,052,842
The accompanying notes are an integral part of the consolidated financial statements.
31 DECEMBER 2022 AND 2021
9
Notes 2022 2021
Operating revenue 6.15 & 7 $835,810,784 $686,165,180
Operating costs 6.17 & 7 442,945,442 383,644,757
Gross profit from operations 392,865,342 302,520,423
Operating expenses
Administrative expenses 6.17 & 7 6,823,146 6,504,395
Expected credit losses (gains) 6.16 1,215,159 439,124
Total operating expenses 8,038,305 6,943,519
Net operating income 384,827,037 295,576,904
Non-operating income and expenses
Interest income 6.18 3,668,522 241,407
Other income, others 6.18 4,208,497 112,731,475
Gains (losses) on disposal of property, plant and equipment 6.7, 6.18 & 7 95,812 (2,359,918 )
Profit from lease modification 6.18 & 7 414,408 -
Foreign exchange gains (losses) 6.18 12,519,346 6,027,448
Miscellaneous expenses 6.18 & 7 (2,588,673 ) (3,496,290 )
Losses on financial assets (liabilities) at fair value through profit or loss 6.2 & 6.18 (52,557 ) -
Impairment loss recognized in profit or loss, property, plant and equipment 6.7 & 6.18 (3,438,214 ) (79,500,000 )
Interest expense 6.7, 6.11, 6.18 & 7 (43,857,682 ) (32,606,977 )
Share of (loss) gain of associates and joint ventures accounted
for using equity method (555,584 ) (897,545 )
Total non-operating income and expenses (29,586,125 ) 139,600
Profit from continuing operations before tax 355,240,912 295,716,504
Income tax expense 6.20 660,273 597,455
Net income 354,580,639 295,119,049
Other comprehensive income (loss): 6.19
Components of other comprehensive income (loss) that will not be reclassified to profit or loss
Remeasurement of defined benefit plans (6,358 ) (44,139 )
Income tax (income) expense relating to items that will not be reclassified (1,272 ) (8,828 )
Components of other comprehensive income (loss) that will be
reclassified to profit or loss
Exchange differences on translation of foreign financial statements 52,977,835 64,084,013
Unrealized gains (losses) from investments in debt instruments
measured at fair value through other comprehensive income (754,457 ) (28,353 )
Other comprehensive income (loss), net of tax 52,218,292 64,020,349
Total comprehensive income (loss) $406,798,931 $359,139,398
Net income (loss) attributable to:
Net income (loss) attributable to owners of parent $354,580,639 $295,119,049
Comprehensive income (loss) attributable to:
Comprehensive income (loss) attributable to owners of parent $406,798,931 $359,139,398
Basic earnings per share $ $
Diluted earnings per share $ $
The accompanying notes are an integral part of the consolidated financial statements.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED 31 DECEMBER 2022 AND 2021
(All Amounts Expressed in US Dollars)
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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED 31 DECEMBER 2022 AND 2021
(All Amounts Expressed in US Dollars)
Common stock Capital surplus Legal reserve
Unappropriated
retained earnings
Exchange
differences on
translation of
foreign financial
statements
Unrealized gains
(losses) on financial
assets measured at
fair value through
other comprehensive
income Total
Balance, 1 January 2021 $238,739,686 $19,899,726 $6,960 $525,443,419 $158,789,935 $46,821 $942,926,547
Appropriation and distribution of retained earnings:
Cash dividends of ordinary share
Other changes in capital surplus:
Cash dividends distributed from capital surplus - (18,662,311 ) - - - - (18,662,311 )
Profit for the year ended 31 December 2021 - -
Other comprehensive income (loss), net of tax, for the year ended 31 December 2021 - - - (35,311 ) 64,084,013 (28,353 ) 64,020,349
Total comprehensive income (loss) for the year ended 31 December 2021 - - - 295,083,738 64,084,013 (28,353 ) 359,139,398
Balance, 31 December 2021 $238,739,686 $1,237,415 $6,960 $801,813,459 $222,873,948 $18,468 $1,264,689,936
Balance, 1 January 2022 $238,739,686 $1,237,415 $6,960 $801,813,459 $222,873,948 $18,468 $1,264,689,936
Appropriation and distribution of retained earnings:
Cash dividends of ordinary share
Profit for the year ended 31 December 2022 - -
Other comprehensive income (loss), net of tax, for the year ended 31 December 2022 - - - (5,086 ) 52,977,835 (754,457 ) 52,218,292
Total comprehensive income (loss) for the year ended 31 December 2022 - - - 354,575,553 52,977,835 (754,457 ) 406,798,931
Balance, 31 December 2022 $238,739,686 $1,237,415 $6,960 $1,017,955,338 $275,851,783 $(735,989 ) $1,533,055,193
The accompanying notes are an integral part of the consolidated financial statements.
Total retained earnings Other components of equity
8
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED 31 DECEMBER 2022 AND 2021
(All Amounts Expressed in US Dollars)
2022
2021
CASH FLOWS FROM OPERATING ACTIVITIES
Profit from continuing operations before tax
$355,240,912
$295,716,504
Adjustments to reconcile net income (loss) before tax:
Depreciation expense
Amortization expense
Expected credit losses
Net loss on financial assets or liabilities at fair value through profit or loss
Interest expense
Interest income
(3,668,522 )
(241,407 )
Effect of exchange rate changes of bonds payable
(4,894,909 )
Share of loss (profit) of associates and joint ventures accounted for using the equity method
Losses on disposals of property, plant and equipment
(95,812 )
Impairment loss on non-financial assets
Unrealized foreign exchange (gains) losses
(3,305,675 )
Amortization of financial assets at fair value through other comprehensive income
(56,679 )
Other adjustments
(7,714,962 )
(3,980,688 )
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable
(53,285 )
(1,660,160 )
Decrease (increase) in accounts receivable-related parties
Decrease (increase) in other receivables
(122,666 )
Decrease (increase) in inventories
(2,714,439 )
Decrease (increase) in prepayments
(943,001 )
(647,432 )
Decrease (increase) in other current assets
(4,923,136 )
(1,969,193 )
Increase (decrease) in contract liabilities
(30,446 )
Increase (decrease) in accounts payable
(7,313,026 )
Increase (decrease) in accounts payable to related parties
(537,871 )
Increase (decrease) in other accrued expenses
Increase (decrease) in advance receipts
(3,701,642 )
(1,178,582 )
Increase (decrease) in other current liabilities
Cash generated from operations
Interest received
Interest paid
(41,421,491 )
(32,656,104 )
Income taxes paid
(596,984 )
(530,601 )
Net cash generated from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other comprehensive income
(9,782,800 )
(2,135,800 )
Acquisition of financial assets at fair value through profit or loss
(1,000,000 )
Proceeds from disposals of financial assets for hedging
(16,455 )
Acquisition of investments accounted for using the equity method
(1,953,443 )
(2,166,847 )
Acquisition of property, plant and equipment
(22,561,369 )
(18,917,551 )
Proceeds from disposals of property, plant and equipment
Decrease (increase) in guarantee deposits paid
(3,028,293 )
Acquisition of right-of-use assets
(2,236,996 )
(1,165,988 )
Decrease (increase) in other financial assets
(916,594 )
Decrease (increase) in other non-current assets (prepayments for vessels)
(141,184,208 )
(165,364,906 )
Net cash used in investing activities
(167,638,186 )
(114,306,364 )
Increase (decrease) in short-term borrowings
(53,516,484 )
Increase (decrease) in long-term borrowings
(144,657,201 )
(124,248,203 )
Increase (decrease) in guarantee deposits received
(362 )
(1,600,000 )
Repayments of the principal portion of lease liabilities
(13,895,642 )
(14,354,822 )
Increase (decrease) in other financial liabilities
(20,761,249 )
(3,993,082 )
Distribution of cash dividend
(138,113,443 )
(40,249,709 )
Net cash used in financing activities
(314,822,810 )
(237,962,300 )
Effect of exchange rate changes on cash and cash equivalents
(1,282,327 )
(691,239 )
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD
$208,356,848
$189,651,525
The accompanying notes are an int
egral part of the consolid
ated financial statement.
CASH FLOWS FROM FINANCING ACTIVITIES
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