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1
WISDOM MARINE LINES CO., LIMITED (CAYMAN)
AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
INDEPENDENT AUDITORS’ REPORT
31 DECEMBER 2023 AND 2022
Registered: Windward 3, Regatta Office Park, PO Box 1350, Grand Cayman
KY1-1108, Cayman Islands
Address: 7F., No. 237, Sec. 2, Fushing S. Rd., Taipei City, Taiwan
Telephone: 886-2-2755-2637
2
TABLE OF CONTENTS
Contents Page
Cover page 1
Table of contents 2
Statement by directors 3
Independent auditors’ report 4-7
Consolidated balance sheets 8-9
Consolidated statements of comprehensive income 10
Consolidated statements of changes in equity 11
Consolidated statements of cash flows 12
Notes to the consolidated financial statements
1. History and organization 13
2. Date and procedures of authorization of financial statements for issue 13
3. Newly issued or revised standards and interpretations 13-14
4. Summary of material accounting policies 15-43
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 76-77
10. Losses due to major disasters 77
11. Significant subsequent events 77
12. Others 77-89
13. Other disclosures 89-90
14. Segment information 90-91
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 2023 and 2022 on 23 February 2024. 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 2023 and 2022 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
23 February 2024
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 2023, and the related consolidated statements of comprehensive income,
changes in equity and cash flows for the years ended 31 December 2023, and notes to the consolidated
financial statements, including the summary of material accounting policies.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of the Group as at 31 December 2023, and their
consolidated financial performance and cash flows for the years ended 31 December 2023, 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 $534,880,980 for the year ended 31 December 2023, 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 2023, the amount of the Group’s property, plant and equipment was
$2,367,805,863, which accounted for 83% of total assets. The management assessed if there is any
indication that an asset may be impaired on balance sheet date. If there is any indication that an asset
may be impaired, the Group should evaluate the recoverable amount of the cash-generating-unit
(CGU), to which the asset belongs. The property, plant and equipment of the Group mainly consists
of vessel equipment. The subsidiaries of the Company took the one-vessel-one-company strategy to
manage vessels, and the main CGU for each subsidiary is their vessels. With the view that the amount
of property, plant and equipment being material and the calculation of recoverable amount involving
numerous assumptions and estimates, we have determined the impairment of property, plant and
equipment as a key audit matter. The audit procedures we conducted regarding the impairment of
property, plant and equipment included but not limited to the following: evaluating the
appropriateness of the accounting policy for impairment of property, plant and equipment; inspecting
the impairment evaluation report provided by the Group and assessing the reasonableness of
managements identification of indicators of impairment and the assumptions used, including
identification of CGU, estimation of cash flows and discount rate. We also evaluated the disclosure
regarding property, plant and equipment in Notes 4, 5 and 6 of the consolidated financial statements.
Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the IFRSs, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
6
Those charged with governance, including audit committee, are responsible for overseeing the
Group’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with the ISAs, we exercise professional judgment and professional
skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
4. Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern .
If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’
report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditors’ report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the accompanying notes, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
7
6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditors’ report unless
law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
/s/Lu, Chian Uen
/s/Liu, Jung Chin
for and on behalf of
Ernst & Young LLP
Chartered Accountants and Statutory Auditors
Taiwan
23 February 2024
English Translation of Consolidated Financial Statements Originally Issued in Chinese
Notes 31 December 2023 31 December 2022
ASSETS
Cash and cash equivalents 6.(1) $116,946,577 $208,356,848
Current financial assets at fair value through profit or loss 6.(2) 902,700 -
Current financial assets at fair value through
other comprehensive income 6.(3) & 8 11,864,671 12,799,202
Accounts receivable, net 6.(4) & 6.(16) 4,570,206 4,717,118
Accounts receivable due from related parties, net 6.(4), 6.(16) & 7 299,989 319,012
Other receivables 7 2,108,709 2,546,001
Inventories 6.(5) 3,689,083 6,333,475
Prepayments 7 3,682,733 7,519,313
Other current financial assets 6.(1) & 8 51,807,798 49,812,812
Other current assets, other 7 16,991,750 25,186,042
Total current assets 212,864,216 317,589,823
Non-current financial assets at fair value through profit or loss 6.(2) - 910,700
Investments accounted for using the equity method 6.(6) 11,905,112 10,384,250
Property, plant and equipment 6.(7), 7 & 8 2,367,805,863 2,482,633,111
Right-of-use assets 6.(12) & 7 186,358,566 180,731,492
Investment property, net 6.(8) & 8 2,352,002 2,360,088
Deferred tax assets 6.(20) 32,351 61,210
Guarantee deposits paid 13,811,397 14,321,730
Net defined benefit asset, non-current 6.(13) 6,959 -
Other non-current assets 6.(9) 64,309,667 53,906,014
Total non-current assets 2,646,581,917 2,745,308,595
TOTAL ASSETS $2,859,446,133 $3,062,898,418
The accompanying notes are an integral part of the consolidated financial statements.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
31 DECEMBER 2023 AND 2022
(All Amounts Expressed in US Dollars)
8
English Translation of Consolidated Financial Statements Originally Issued in Chinese
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONT’D)
(All Amounts Expressed in US Dollars)
Note 31 December 2023 31 December 2022
LIABILITIES
Short-term borrowings 6.(10) $30,527,226 $25,000,000
Accounts payable 5,758,865 8,002,877
Accounts payable to related parties 7 - 508,700
Other accrued expenses 7 27,386,743 29,634,552
Advance receipts 14,594,007 16,044,421
Other current liabilities, other 7 2,481,400 3,171,764
80,748,241 82,362,314
Current lease liabilities 6.(12) & 7 13,391,453 13,866,866
Bonds payable, current portion 6.(11) 45,059,803 -
Long-term borrowings, current portion 6.(10) 214,728,297 257,397,975
Long-term accounts payable, current portion 6.(12) 4,846,444 3,486,225
Long-term accounts payable to related parties, current portion 6.(12) & 7 818,273 875,810
278,844,270 275,626,876
Total current liabilities 359,592,511 357,989,190
Bonds payable 6.(11) - 44,904,899
Long-term borrowings, non-current portion 6.(10) 747,686,428 845,045,257
Deferred tax liabilities 6.(20) 13,774 17,459
Non-current lease liabilities 6.(12) 130,152,801 127,795,204
Long-term accounts payable, non-current portion 6.(12) 32,514,688 21,477,066
Long-term accounts payable to related parties, non-current portion
6.(12) & 7 124,063,266 132,438,840
Net defined benefit liability, non-current 6.(13) - 175,310
Guarantee deposits received 195 -
Total non-current liabilities 1,034,431,152 1,171,854,035
TOTAL LIABILITIES 1,394,023,663 1,529,843,225
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 965,322,804 1,017,955,338
Exchange differences on translation of foreign financial statements 260,505,757 275,851,783
Unrealized gains (losses) from financial assets measured
at fair value through other comprehensive income (390,152) (735,989)
TOTAL EQUITY 1,465,422,470 1,533,055,193
TOTAL LIABILITIES AND EQUITY $2,859,446,133 $3,062,898,418
The accompanying notes are an integral part of the consolidated financial statements.
31 DECEMBER 2023 AND 2022
9
English Translation of Consolidated Financial Statements Originally Issued in Chinese
Notes 2023 2022
Operating revenue 6.(15) & 7 $545,530,289 $835,810,784
Operating costs 6.(17) & 7 428,615,293 442,945,442
Gross profit from operations 116,914,996 392,865,342
Operating expenses
Administrative expenses 6.(17) & 7 5,046,214 6,823,146
Expected credit losses 6.(16) 286,890 1,215,159
Total operating expenses 5,333,104 8,038,305
Net operating income 111,581,892 384,827,037
Non-operating income and expenses
Interest income 6.(18) 6,859,227 3,668,522
Other income, others 6.(18) 1,078,502 4,208,497
Gains on disposals of property, plant and equipment 6.(7), 6.(18) & 7 53,876,999 95,812
Foreign exchange gains 6.(18) 3,929,478 12,519,346
Gains (losses) on financial assets (liabilities) at fair value through profit or loss
6.(2) & 6.(18) 713,053 (52,557)
Miscellaneous expenses 6.(18) & 7 (2,452,822) (2,588,673)
Losses on disposals of investments 6.(18) (1,402) -
(Losses) profit from lease modification 6.(18) & 7 (1,358) 414,408
Impairment loss recognized in profit or loss, property, plant and equipment 6.(7) & 6.(18) - (3,438,214)
Interest expense 6.(7), 6.(11), 6.(18) & 7 (68,757,353) (43,857,682)
Share of loss of associates and joint ventures accounted
for using the equity method 6.(6) (1,072,279) (555,584)
Total non-operating income and expenses (5,827,955) (29,586,125)
Profit from continuing operations before tax 105,753,937 355,240,912
Income tax expense 6.(20) 787,219 660,273
Net income 104,966,718 354,580,639
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 177,301 (6,358)
Income tax (income) expense relating to items that will not be reclassified (1,001) (1,272)
Components of other comprehensive income (loss) that will be
reclassified to profit or loss
Exchange differences on translation of foreign financial statements (15,346,026) 52,977,835
Unrealized gains (losses) from investments in debt instruments
measured at fair value through other comprehensive income 345,837 (754,457)
Other comprehensive income (loss) (14,821,887) 52,218,292
Total comprehensive income $90,144,831 $406,798,931
Net income attributable to:
Net income attributable to owners of parent $104,966,718 $354,580,639
Comprehensive income attributable to:
Comprehensive income attributable to owners of parent $90,144,831 $406,798,931
Basic earnings per share 6.(21) $0.14 $0.48
Diluted earnings per share 6.(21) $0.14 $0.48
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 2023 AND 2022
(All Amounts Expressed in US Dollars)
10
English Translation of Consolidated Financial Statements Originally Issued in Chinese
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED 31 DECEMBER 2023 AND 2022
(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 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 - - - (138,433,674) - - (138,433,674)
Profit for the year ended 31 December 2022 - -
- 354,580,639
- - 354,580,639
Other comprehensive income (loss) 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
Balance, 1 January 2023 $238,739,686 $1,237,415 $6,960 $1,017,955,338 $275,851,783 $(735,989) $1,533,055,193
Appropriation and distribution of retained earnings:
Cash dividends of ordinary share - - - (157,777,554) - - (157,777,554)
Profit for the year ended 31 December 2023 - -
- 104,966,718
- - 104,966,718
Other comprehensive income (loss) for the year ended 31 December 2023 - - - 178,302 (15,346,026) 345,837 (14,821,887)
Total comprehensive income (loss) for the year ended 31 December 2023 - - - 105,145,020 (15,346,026) 345,837 90,144,831
Balance, 31 December 2023 $238,739,686 $1,237,415 $6,960 $965,322,804 $260,505,757 $(390,152) $1,465,422,470
The accompanying notes are an integral part of the consolidated financial statements.
Total retained earnings Other components of equity
11
English Translation of Consolidated Financial Statements Originally Issued in Chinese
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(All Amounts Expressed in US Dollars)
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES
Profit from continuing operations before tax
$105,753,937
$355,240,912
Adjustments to reconcile net income before tax:
Depreciation expense
152,965,877
154,037,039
Amortization expense
17,489
18,847
Expected credit losses
286,890
1,215,159
Losses on financial assets or liabilities at fair value through profit or loss
8,000
89,300
Interest expense
68,757,353
43,857,682
Interest income
(6,859,227)
(3,668,522)
Effect of exchange rate changes of bonds payable
16,583
(4,894,909)
Share of loss of associates and joint ventures accounted for using the equity method
1,072,279
555,584
Gains on disposals of property, plant and equipment
(53,876,999)
(95,812)
Losses on disposals of investments
1,402
-
Impairment loss on non-financial assets
-
3,438,214
Unrealized foreign exchange gains
1,961,419
326,490
Amortization of financial assets at fair value through other comprehensive income
(134,582)
(56,679)
Other adjustments
(4,717,490)
(7,714,962)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable
(139,978)
(53,285)
Decrease (increase) in accounts receivable-related parties
19,023
56,561
Decrease (increase) in other receivables
153,687
1,611,772
Decrease (increase) in inventories
2,715,334
(2,714,439)
Decrease (increase) in prepayments
3,912,452
(943,001)
Decrease (increase) in other current assets
8,194,292
(4,923,136)
Increase (decrease) in accounts payable
(2,244,012)
2,819,080
Increase (decrease) in accounts payable to related parties
(508,700)
466,457
Increase (decrease) in other accrued expenses
(6,559,453)
4,921,105
Increase (decrease) in advance receipts
(1,450,414)
(3,701,642)
Increase (decrease) in other current liabilities
(690,364)
1,865,620
Cash generated from operations
268,654,798
541,753,435
Interest received
7,150,287
2,713,686
Interest paid
(68,847,880)
(41,421,491)
Income taxes paid
(662,974)
(596,984)
Net cash provided from operating activities
206,294,231
502,448,646
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other comprehensive income
(582,886)
(9,782,800)
Proceeds from disposals of financial assets at fair value through other comprehensive income
2,054,691
-
Acquisition of financial assets at fair value through profit or loss
-
(1,000,000)
Proceeds from disposals of financial assets for hedging
417,664
-
Acquisition of investments accounted for using the equity method
(2,605,439)
(1,953,443)
Acquisition of property, plant and equipment
(22,097,733)
(22,561,369)
Proceeds from disposals of property, plant and equipment
201,581,411
15,025,517
Decrease (increase) in guarantee deposits paid
(224,487)
(3,028,293)
Acquisition of right-of-use assets
(862,997)
(2,236,996)
Decrease (increase) in other financial assets
(1,994,986)
(916,594)
Decrease (increase) in other non-current assets (prepayments for vessels)
(189,486,670)
(141,184,208)
Net cash used in investing activities
(13,801,432)
(167,638,186)
Increase (decrease) in short-term borrowings
5,290,651
2,605,087
Increase (decrease) in long-term borrowings
(120,517,890)
(144,657,201)
Increase (decrease) in guarantee deposits received
193
(362)
Repayments of the principal portion of lease liabilities
(18,839,655)
(13,895,642)
Increase (decrease) in other financial liabilities
7,965,876
(20,761,249)
Distribution of cash dividend
(157,845,660)
(138,113,443)
Net cash used in financing activities
(283,946,485)
(314,822,810)
Effect of exchange rate changes on cash and cash equivalents
43,415
(1,282,327)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(91,410,271)
18,705,323
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
208,356,848
189,651,525
CASH AND CASH EQUIVALENTS, END OF PERIOD
$116,946,577
$208,356,848
The accompanying notes are an integral part of the consolidated financial statement.
CASH FLOWS FROM FINANCING ACTIVITIES
12
13
WISDOM MARINE LINES CO., LIMITED (CAYMAN)
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2023 AND 2022
(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 23
February 2024.
3. Newly issued or revised standards and interpretations
(1) The Group applied for the first time International Financial Reporting Standards,
International Accounting Standards, and Interpretations issued, revised or amended which
are recognized by Financial Supervisory Commission (“FSC”) and become effective for
annual periods beginning on or after 1 January 2023. The adoption of these new standards
and amendments had no material impact on the Group.
(2) The following standards or interpretations issued by IASB are not yet effective:
A. IFRS 10“Consolidated Financial Statements” and IAS 28“Investments in Associates and
Joint Ventures”-Sale or Contribution of Assets between an Investor and its Associate or
Joint Ventures
The amendments address the inconsistency between the requirements in IFRS 10
Consolidated Financial Statements and IAS 28 Investments in Associates and Joint
Ventures, in dealing with the loss of control of a subsidiary that is contributed to an
associate or a joint venture. IAS 28 restricts gains and losses arising from contributions
of non-monetary assets to an associate or a joint venture to the extent of the interest
attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires
full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was
amended so that the gain or loss resulting from the sale or contribution of assets that
constitute a business as defined in IFRS 3 between an investor and its associate or joint
venture is recognized in full.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
14
IFRS 10 was also amended so that the gains or loss resulting from the sale or
contribution of a subsidiary that does not constitute a business as defined in IFRS 3
between an investor and its associate or joint venture is recognized only to the extent of
the unrelated investors’ interests in the associate or joint venture.
B. Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
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.
C. Lease Liability in a Sale and Leaseback – Amendments to IFRS 16
The amendments add seller-lessees additional requirements for the sale and leaseback
transactions in IFRS 16, thereby supporting the consistent application of the standard.
D. Non-current Liabilities with Covenants – Amendments to IAS 1
The amendments improved the information companies provide about long-term debt
with covenants. The amendments specify that covenants to be complied within twelve
months after the reporting period do not affect the classification of debt as current or
non-current at the end of the reporting period.
E. Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7
The amendments introduced additional information of supplier finance arrangements and
added disclosure requirements for such arrangements.
F. Lack of Exchangeability – Amendments to IAS 21
These amendments specify whether a currency is exchangeable into another currency
and, when it is not, to determining the exchange rate to use and the disclosures to
provide. The amendments apply for annual reporting periods beginning on or after 1
January 2025.
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, C,
D and F. 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.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
15
4. Summary of material accounting policies
(1) Statement of compliance
The consolidated financial statements of the Group for the years ended 31 December 2023
and 2022 have been prepared in accordance with International Financial Reporting
Standards (IFRSs) as issued by the International Accounting Standards Board.
(2) Basis of preparation
A. Basis of measurement
The consolidated financial statements have been prepared under the historical cost
convention, except for those financial instruments that are measured at fair value with
changes therein shown in the consolidated financial statements.
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
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
16
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.
A change in the ownership interest of a subsidiary, without a change of control, is
accounted for as an equity transaction.
Total comprehensive income of the subsidiaries is attributed to the owners of the parent
and to the non-controlling interests even if this results in the non-controlling interests
having a deficit balance.
If the Group loses control of a subsidiary, it:
(a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;
(b) derecognizes the carrying amount of any non-controlling interest;
(c) recognizes the fair value of the consideration received;
(d) recognizes the fair value of any investment retained;
(e) reclassifies the parent’s share of components previously recognized in other
comprehensive income to profit or loss, or transfer directly to retained earnings if
required by other IFRSs; and
(f) recognizes any resulting difference in profit or loss.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
17
B. The consolidated entities are listed as follows:
Investor Investee Company Name
2023.12.31
Ownership
Percentage
2022
.12.31
Ownership
Percentage
The Company
Wisdom Marine Lines S.A.(WML) 100% 100%
The Company
Wisdom Marine International Inc. (WII) 100% 100%
WII
Well Ship Management and Maritime Consultant
Co., Ltd. (WELL)
100% 100%
WII Huian Ship Management Co., Ltd. 100% 100%
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%
WML Amis Queen S.A. 100% 100%
WML Amis Star S.A. 100% 100%
WML Amis Victory S.A. 100% 100%
WML Amis Wisdom S.A. 100% 100%
WML Amis Xcel Inc. 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%
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
18
Investor Investee Company Name
2023.12.31
Ownership
Percentage
2022
.12.31
Ownership
Percentage
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% 100%
WML Bunun Treasure S.A. 100% 100%
WML Bunun Unicorn S.A. 100% 100%
WML Bunun Victory S.A. 100% 100%
WML Bunun Wisdom S.A. 100% 100%
WML Bunun Youth Inc. 100% 100%
WML Bunun Zest 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%
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%
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
19
Investor Investee Company Name
2023.12.31
Ownership
Percentage
2022
.12.31
Ownership
Percentage
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 Ace S.A. 100% 100%
WML Katagalan Brave S.A. 100% 100%
WML Katagalan Carriers S.A. 100% 100%
WML Katagalan Champion 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%
WML Mount Wisdom S.A. 100% 100%
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
20
Investor Investee Company Name
2023.12.31
Ownership
Percentage
2022
.12.31
Ownership
Percentage
WML Paiwan Ace S.A. 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% 100%
WML Sakizaya Victory S.A. 100% 100%
WML Sakizaya Wisdom S.A. 100% 100%
WML Sakizaya Youth 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%
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
21
Investor Investee Company Name
2023.12.31
Ownership
Percentage
2022
.12.31
Ownership
Percentage
WML Tao Ace S.A. 100% 100%
WML Tao Brave S.A. 100% 100%
WML Tao Mariner S.A. 100% 100%
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%
WML Wisdom Chartering S.A. 100% 100%
Subsidiaries excluded from consolidation: None.
(4) Foreign currency transactions
Transactions in foreign currencies are initially recorded by the Group entities at their
respective functional currency rates prevailing at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are retranslated at the functional currency
closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair
value in a foreign currency are translated using the exchange rates at the date when the fair
value is determined. Non-monetary items that are measured at historical cost in a foreign
currency are translated using the exchange rates as at the dates of the initial transactions.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
22
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:
A. Exchange differences arising from foreign currency borrowings for an acquisition of a
qualifying asset to the extent that they are regarded as an adjustment to interest costs are
included in the borrowing costs that are eligible for capitalization.
B. Foreign currency items within the scope of IFRS 9 “Financial Instruments” are
accounted for based on the accounting policy for financial instruments.
C. Exchange differences arising on a monetary item that forms part of a reporting entity’s
net investment in a foreign operation is recognized initially in other comprehensive
income and reclassified from equity to profit or loss on disposal of the net investment.
When a gain or loss on a non-monetary item is recognized in other comprehensive income,
any exchange component of that gain or loss is recognized in other comprehensive income.
When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange
component of that gain or loss is recognized in profit or loss.
(5) Translation of financial statements in foreign currency
The assets and liabilities of foreign operations are translated at the closing rate of exchange
prevailing at the reporting date and their income and expenses are translated at an average
rate for the period. The exchange differences arising on the translation are recognized in
other comprehensive income. On the disposal of a foreign operation, the cumulative amount
of the exchange differences relating to that foreign operation, recognized in other
comprehensive income and accumulated in the separate component of equity, is reclassified
from equity to profit or loss when the gain or loss on disposal is recognized.
The following partial disposals are accounted for as disposals:
A. when the partial disposal involves the loss of control of a subsidiary that includes a
foreign operation; and
B. when the retained interest after the partial disposal of an interest in a joint arrangement or
a partial disposal of an interest in an associate that includes a foreign operation is a
financial asset that includes a foreign operation.
On the partial disposal of a subsidiary that includes a foreign operation that does not result
in a loss of control, the proportionate share of the cumulative amount of the exchange
differences recognized in other comprehensive income is re-attributed to the non-controlling
interests in that foreign operation. In partial disposal of an associate or jointly controlled
entity that includes a foreign operation that does not result in a loss of significant influence
or joint control, only the proportionate share of the cumulative amount of the exchange
differences recognized in other comprehensive income is reclassified to profit or loss.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
23
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 comprise cash on hand, demand deposits and short-term, highly
liquid time deposits or investments that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
Time deposits which mature over three months are held for the purpose of meeting
short-term cash commitments rather than for investment or other purposes. They are readily
convertible to known amounts of cash and are subject to an insignificant risk of changes in
value, therefore they are reported as cash and cash equivalents.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
24
(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.
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.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
25
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
A financial asset is measured at fair value through other comprehensive income if both of
the following conditions are met:
(a) the financial asset is held within a business model whose objective is achieved by
both collecting contractual cash flows and selling financial assets and
(b) the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount
outstanding.
Recognition of gain or loss on a financial asset measured at fair value through other
comprehensive income is described as below:
(a) A gain or loss on a financial asset measured at fair value through other comprehensive
income recognized in other comprehensive income, except for impairment gains or
losses and foreign exchange gains and losses, until the financial asset is derecognized
or reclassified.
(b) When the financial asset is derecognized the cumulative gain or loss previously
recognized in other comprehensive income is reclassified from equity to profit or
loss as a reclassification adjustment.
(c) Interest revenue is calculated by using the effective interest method. This is
calculated by applying the effective interest rate to the gross carrying amount of a
financial asset except for:
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
26
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 represent a recovery of part of
the cost of investment.
Financial asset measured at fair value through profit or loss
Financial assets were classified as measured at amortized cost or measured at fair value
through other comprehensive income based on aforementioned criteria. All other
financial assets were measured at fair value through profit or loss and presented on the
balance sheet as financial assets measured at fair value through profit or loss.
Such financial assets are measured at fair value, the gains or losses resulting from
remeasurement is recognized in profit or loss which includes any dividend or interest
received on such financial assets.
B. Impairment of financial assets
The Group recognizes a loss allowance for expected credit losses on debt instrument
investments measured at fair value through other comprehensive income and financial
asset measured at amortized cost. The loss allowance on debt instrument investments
measured at fair value through other comprehensive income is recognized in other
comprehensive income and not reduce the carrying amount in the statement of financial
position.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
27
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:
(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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
28
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 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”.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
29
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
short-term profit-taking; or
(c) it is a derivative (except for a derivative that is a financial guarantee contract or a
designated and effective hedging instrument).
If a contract contains one or more embedded derivatives, the entire hybrid (combined)
contract may be designated as a financial liability at fair value through profit or loss; or a
financial liability may be designated as at fair value through profit or loss when doing so
results in more relevant information, because either:
(a) it eliminates or significantly reduces a measurement or recognition inconsistency; or
(b) a group of financial assets, financial liabilities or both is managed and its
performance is evaluated on a fair value basis, in accordance with a documented risk
management or investment strategy, and information about the group is provided
internally on that basis to the key management personnel.
Gains or losses on the subsequent measurement of liabilities at fair value through profit
or losses including interest paid are recognized in profit or loss.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
30
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.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
31
Derivative instruments are initially recognized at fair value on the date on which a derivative
contract is entered into and are subsequently re-measured at fair value. Derivatives are
carried as financial assets when the fair value is positive and as financial liabilities when the
fair value is negative. Any gains or losses arising from changes in the fair value of
derivatives are taken directly to profit or loss, except for the effective portion of cash flow
hedges, which is recognized in equity.
When the host contracts are either non-financial assets or liabilities, derivatives embedded in
host contracts are accounted for as separate derivatives and recorded at fair value if their
economic characteristics and risks are not closely related to those of the host contracts and
the host contracts are not designated at fair value though profit or loss.
(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.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
32
(11) Inventories
Inventories are bunker oil and are carried at the lower of cost or net realizable value. The
cost of fuel is determined using the weighted-average cost method. Net realizable value is
the determined based on the estimated selling price in the ordinary course of business, less
the estimated selling expenses at the end of the period.
(12) Investments accounted for using the equity method
The Group’s investment in its associate is accounted for using the equity method other than
those that meet the criteria to be classified as held for sale. An associate is an entity over
which the Group has significant influence.
Under the equity method, the investment in the associate or an investment in a joint venture is
carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in
the Group’s share of net assets of the associate. 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:
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
33
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
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 the equity method and
does not remeasure the retained interest.
(13) Property, plant and equipment
Property, plant and equipment is stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. Such cost includes the cost of dismantling and
removing the item and restoring the site on which it is located and borrowing costs for
construction in progress if the recognition criteria are met. Each part of an item of property,
plant and equipment with a cost that is significant in relation to the total cost of the item is
depreciated separately. When significant parts of property, plant and equipment are required
to be replaced in intervals, the Group recognized such parts as individual assets with specific
useful lives and depreciation, respectively. The carrying amount of those parts that are
replaced is derecognized in accordance with the derecognition provisions of IAS 16
“Property, Plant and Equipment”. When a major inspection is performed, its cost is
recognized in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognized in
profit or loss as incurred.
All major components of the vessels are depreciated on a straight-line basis over the useful
life of the assets. Depreciation is based on cost less the estimated residual value. The
residual value is estimated as the lightweight tonnage of each vessel multiplied by scrap
value per ton.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
34
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.
Expenditures on the building of new vessels are capitalized as vessels under construction as
they are paid. Capitalized value is reclassified from vessel under construction to vessels
upon delivery from the dock. The total acquisition cost of a vessel is determined based on
the sum of installments paid plus the costs incurred during the construction period.
Borrowing costs that are attributable to the construction of the vessels are capitalized as part
of the vessel. The interest rate is based on the weighted-average borrowing costs for the
Group, limited to the total borrowing costs incurred in the period.
Depreciation is calculated on a straight-line basis over the estimated economic lives of the
following assets:
Buildings 28 years
Vessels 16-25 years
Vessel equipment 3-5 years
Dry dock 2.5 years
Other 3-5 years
Right-of-use assets 3-25 years
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
35
An item of property, plant and equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or
loss.
The residual values, useful lives and methods of depreciation of property, plant and
equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
(14) Investment property
The Group’s owned investment properties are measured initially at cost, including
transaction costs. The carrying amount includes the cost of replacing part of an existing
investment property at the time that cost is incurred if the recognition criteria are met and
excludes the costs of day-to-day servicing of an investment property. Subsequent to initial
recognition, other than those that meet the criteria to be classified as held for sale (or are
included in a disposal group that is classified as held for sale) in accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued Operations, investment properties are
measured using the cost model in accordance with the requirements of IAS 16 Property,
Plant and Equipment for that model. If investment properties are held by a lessee as
right-of-use assets and are not held for sale in accordance with IFRS 5, investment
properties are measured in accordance with the requirements of IFRS 16.
Depreciation is calculated on a straight-line basis over the estimated economic lives of the
following assets:
Buildings 28 years
Investment properties are derecognized when either they have been disposed of or when the
investment property is permanently withdrawn from use and no future economic benefit is
expected from its disposal.
The Group transfers properties to or from investment properties according to the actual use
of the properties.
The Group transfers properties to or from investment properties when there is a change in use
for these assets. Properties are transferred to or from investment properties when the properties
meet, or cease to meet, the definition of investment property and there is evidence of the
change in use.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
36
(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.
At the commencement date, the Group measures the lease liability at the present value of
the lease payments that are not paid at that date. The lease payments discount using the
interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be
readily determined, the Group uses its incremental borrowing rate. At the commencement
date, the lease payments included in the measurement of the lease liability comprise the
following payments for the right to use the underlying asset during the lease term that are
not paid at the commencement date:
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
37
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
asset from the commencement date to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term.
The Group applies IAS 36 “Impairment of Assets” to determine whether the right-of-use
asset is impaired and to account for any impairment loss identified.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
38
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.
For the rent concession arising as a direct consequence of the Covid-19 pandemic, the
Group elected not to assess whether it is a lease modification but accounted it as a variable
lease payment and the practical expedient has been applied to such rent concessions.
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 cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets. Where the carrying
amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
39
For assets excluding goodwill, an assessment is made at each reporting date as to whether
there is any indication that previously recognized impairment losses may no longer exist or
may have decreased. If such indication exists, the Group estimates the asset’s or
cash-generating unit’s recoverable amount. A previously recognized impairment loss is
reversed only if there has been an increase in the estimated service potential of an asset
which in turn increases the recoverable amount. However, the reversal is limited so that the
carrying amount of the asset does not exceed its recoverable amount, nor exceed the
carrying amount that would have been determined, net of depreciation, had no impairment
loss been recognized for the asset in prior years.
An impairment loss of continuing operations or a reversal of such impairment loss is
recognized in profit or loss.
(17) Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as
a result of a past event, it is probably that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. Where the Group expects some or all of a provision to be
reimbursed, the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that reflects the risks specific to the
liability. Where discounting is used, the increase in the provision due to the passage of time
is recognized as a finance cost.
(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
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.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
40
Most of the contractual considerations of the Group are received on average during the
contract period after the provision of services. When the Group has performed the services
to customers but does not has a right to an amount of consideration that is unconditional,
these contacts should be presented as contract assets. However, for some rendering of
services contracts, part of the consideration was received from customers upon signing the
contract, and the Group has the obligation to provide the services subsequently; accordingly,
these amounts are recognized as contract liabilities.
The period between the transfers of contract liabilities to revenue is usually within one year,
thus, no significant financing component arises.
(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 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.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
41
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
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.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
42
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.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
43
According to the temporary exception in the International Tax Reform – Pillar Two Model
Rules (Amendments to IAS 12), deferred tax assets and liabilities related to Pillar Two
income tax will not be recognized nor disclosed.
5. Significant accounting judgments, estimates and assumptions
The preparation of the Group’s consolidated financial statements require management to make
judgements, estimates and assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting
period. However, uncertainty about these assumption and estimate could result in outcomes that
require a material adjustment to the carrying amount of the asset or liability affected in future
periods. Please find the details as below:
(1) Judgement
In the process of applying the Group’s accounting policies, management has made the
following judgements, which have the most significant effect on the amounts recognized in
the consolidated financial statements:
A. Investment properties
Certain properties of the Group comprise a portion that is held to earn rentals or for
capital appreciation and another portion that is owner-occupied. If these portions could be
sold separately, the Group accounts for the portions separately as investment properties
and property, plant and equipment. If the portions could not be sold separately, the
property is classified as investment property in its entirety only if the portion that is
owner-occupied is under 1% of the total property.
(2) Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty
at the reporting date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below.
A. Fair value of financial instruments
Where the fair value of financial assets and financial liabilities recorded in the balance
sheet cannot be derived from active markets, they are determined using valuation
techniques including the income approach (for example the discounted cash flows model)
or market approach. Changes in assumptions about these factors could affect the reported
fair value of the financial instruments. Please refer to Note 12 for more details.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
44
B. Impairment of non-financial assets
An impairment exists when the carrying value of an asset or cash generating unit exceeds
its recoverable amount, which is the higher of its fair value less costs to sell and its value
in use. The fair value less costs to sell calculation is based on the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date less incremental costs that would be directly
attributable to the disposal of the asset or cash generating unit. The value in use
calculation is based on a discounted cash flow model. The cash flows projections are
derived from the budget for the next five years and do not include restructuring activities
that the Group is not yet committed to or significant future investments that will enhance
the asset’s performance of the cash generating unit being tested. The recoverable amount
is most sensitive to the discount rate used for the discounted cash flow model as well as
the expected future cash-inflows and the growth rate used for extrapolation purposes.
C. Useful lives and depreciation of vessels
Management determines the estimated useful lives and related depreciation charges for its
vessels. This estimate is based on the historical experience of the actual useful lives of
vessels of similar nature and functions. It could change significantly as a result of
technical innovations and competitor actions in response to severe industry activities.
Management will increase the depreciation charge where useful lives are less than
previously estimated lives, or it will write down technically obsolete or non-strategic
assets that have been abandoned or sold. Management assesses the scrap value according
to the characteristics of the Group’s vessels and the market research from Clarkson and
Demolition Market.
The Group determines the depreciation amount of vessels based on the estimated useful
lives and residual values, which are reviewed at each reporting date. The principal
assumptions for the Group’s estimation of the useful lives and residual values include
those related to the mode of operations, government regulations, and scrap value of
vessels in future.
D. Provision for losses from accidents
Provision for losses from accidents is made based on an assessment of the outcome of
negotiations, arbitration or litigation, and the recoverability of losses from insurance
companies, which requires management’s judgment and estimates. Where the actual
outcome or expectation in the future differs from the original estimate, such differences
will have an impact on the carrying amount of the provisions and losses incurred in
accidents/write-back in the period in which such estimate is changed.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
45
E. Fair value of investment property
Where the fair value of investment property disclosed in Note 6 and Note 12 cannot be
obtained from the active market, it is determined using valuation techniques including the
sales comparison approach and the income approach. Changes in assumptions adopted in
the valuation methods could affect the disclosed fair value of investment property and the
result of impairment testing. Please refer to Note 6 and Note 12 for more details.
6. Contents of significant accounts
(1) Cash and cash equivalents
31 December 2023 31 December 2022
Cash on hand $4,224 $14,228
Demand deposits 21,242,353 57,942,620
Time deposits 95,700,000 150,400,000
Total $116,946,577 $208,356,848
As at 31 December 2023 and 2022, cash and cash equivalents with carrying amounts of
$51,807,798 and $49,812,812 respectively, were pledged to secure bank loans and were
classified under other financial assets.
(2) Financial assets at fair value through profit or loss
31 December 2023 31 December 2022
Mandatorily measured at fair value through profit
or loss:
Structured notes
-Current $902,700 $-
-Non-current - 910,700
Total $902,700 $910,700
For the Year Ended
31 December
Type of contract
Amount in
contract Counter party
Contract
period
Realized
gains
(losses)
Contract
period
Equity
linked note
(Y/N)
2023.12.31
10 year USD
range accrual note $1,000,000
Taichung Commercial
Bank Co., Ltd.
2022.08.05~
2032.08.05 $90,600 $(8,000) No
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
46
For the Year Ended
31 December
Type of contract
Amount in
contract Counter party
Contract
period
Realized
gains
(losses)
Unrealized
gains
(losses)
Equity
linked note
(Y/N)
2022.12.31
10 year USD
range accrual note $1,000,000
Taichung Commercial
Bank Co., Ltd.
2022.08.05~
2032.08.05 $36,743 $(89,300) No
A. The aforementioned financial assets at fair value through profit or loss will be
re-evaluated for their potential sale, due to changes in interest rate spreads in the future.
There is no reasonable assurance that these assets will be held for more than one year;
therefore, they have been reclassified to the current portion.
B. The aforementioned financial assets were not pledged as collateral.
C. For the credit risk information of financial assets at fair value through profit or loss,
please refer to Note 12.
(3) Financial assets at fair value through other comprehensive income
31 December 2023 31 December 2022
Investments in debt instruments measured at fair
value through other comprehensive income
Bonds
-Current $11,864,671 $12,799,202
A. For the amount of aforementioned financial assets pledged for bank loans as at 31
December 2023 and 2022, please refer to Note 8.
B. For the credit risk information of financial assets at fair value through other
comprehensive income, please refer to Note 12.
(4) Accounts receivable and accounts receivable due from related parties, net
31 December 2023 31 December 2022
Accounts receivable $4,786,202 $5,028,682
Less: loss allowance (215,996) (311,564)
Subtotal 4,570,206 4,717,118
Accounts receivable due from related parties 299,989 319,012
Less: loss allowance - -
Subtotal 299,989 319,012
Accounts receivable, net $4,870,195 $5,036,130
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
47
The aforementioned accounts receivable is generated from operations and the Group does
not hold any collateral for such trade receivables.
The total carrying amount as at 31 December 2023 and 2022 are $5,086,191 and
$5,347,694, respectively. Please refer to Note 6.(16) for more details on loss allowance of
trade receivables for the years ended 31 December 2023 and 2022. Please refer to Note 12
for more details on credit risk management.
(5) Inventories
31 December 2023 31 December 2022
Fuel $3,689,083 $6,333,475
A. The cost of inventories recognized in expenses amounts to $6,461,502 for the year ended
31 December 2023, including the reversal of write-down of inventories of $70,942.
B. The cost of inventories recognized in expenses amounts to $6,270,304 for the year ended
31 December 2022, including the write-down of inventories of $68,007.
C. Because of the rising prices of the crude oil, the Group had recognized the reversal of
write-down of inventories in the amount of $70,942 for the year ended 31 December
2023.
D. As at 31 December 2023 and 2022, the aforementioned inventories were not pledged as
collateral.
(6) Investments accounted for using the equity method
31 December 2023 31 December 2022
Investees
Carrying
amount
Percentage of
ownership (%)
Carrying
amount
Percentage of
ownership (%)
Investments in associates:
Pescadores Investment and
Development Inc. $11,905,112 40% $10,384,250 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$1.78 billion. The Group holds 40% of the shares issued by Pescadores Investment
and Development Inc. As at 31 December 2023, the Group had contributed capital
amounting to NT$712 million and recognized investment losses amounting to NT$346
million.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
48
B. The Group has subscribed for new shares of Pescadores Investment and Development
Inc. in March 2022, of which capital has amounted to NT$1.58 billion, with a par value
of NT$10 per share for 6,000,000 shares. The Group remains 40% interest in the shares
issued by Pescadores Investment and Development Inc. As at 21 July 2022, the Group
had fully paid the amount. As at 23 August 2022, Pescadores Investment and
Development Inc. had completed the alteration of the registered capital amount.
C. The Group has subscribed for new shares of Pescadores Investment and Development
Inc. in April 2023, of which capital has amounted to NT$1.78 billion, with a par value of
NT$10 per share for 8,000,000 shares. The Group remains 40% interest in the shares
issued by Pescadores Investment and Development Inc. As at 8 September 2023, the
Group had fully paid the amount. As at 6 October 2023, Pescadores Investment and
Development Inc. had completed the alteration of the registered capital amount.
D. The urban renewal project of Pescadores Investment and Development Inc. was approved
by Taipei City Government on 17 December 2019. The building permit was obtained on
15 February 2022, while the construction registration was approved on 15 July 2022, and
the demolition was completed on 28 December 2022.
E. Reconciliation of the associate’s summarized financial information presented to the
carrying amount of the Group’s interest in the associate:
31 December 2023 31 December 2022
Current assets $916,296 $713,584
Non-current assets 152,646,009 152,475,385
Current liabilities (122,703,939) (3,334,482)
Non-current liabilities (1,095,587) (123,893,863)
Equity 29,762,779 25,960,624
Percentage of ownership (%) 40% 40%
Group’s carrying amount of the investment $11,905,112 $10,384,250
For the Years Ended 31 December
2023 2022
Operating revenue $- $-
Loss from continuing operations (2,680,697) (1,388,959)
Other comprehensive income - -
Total comprehensive loss $(2,680,697) $(1,388,959)
The investments in associates do not have a quoted market price in active market.
F. The aforementioned investments in associates had no contingent liabilities, capital
commitments, or guarantees as at 31 December 2023 and 2022.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
49
(7) Property, plant and equipment
31 December 2023 31 December 2022
Owner occupied property, plant and equipment $12,744,400 $12,760,299
Property, plant and equipment leased out under
operating leases 2,355,061,463 2,469,872,812
Total $2,367,805,863 $2,482,633,111
A. Owner occupied property, plant and equipment
31 December 2023
Beginning
balance Additions Disposals Re-classification
Foreign exchange
differences
Ending
balance
Cost
Land $11,369,690 $- $- $-
$3,702
$11,373,392
Buildings 1,559,019 17,731 - -
767
1,577,517
Transportation equipment 92,137 - - -
31
92,168
Office equipment 324,672 50,628 - -
846
376,146
Total 13,345,518 68,359 - -
5,346
13,419,223
Accumulated depreciation
Buildings 218,427
67,374
- -
1,056
286,857
Transportation equipment 81,629
4,440
- -
92
86,161
Office equipment 285,163
16,311
- -
331
301,805
Total 585,219
88,125
- -
1,479
674,823
Net balance $12,760,299 $(19,766) $- $-
$3,867
$12,744,400
31 December 2022
Beginning
balance Additions Disposals Re-classification
Foreign exchange
differences
Ending
balance
Cost
Land $12,611,774 $- $- $- $(1,242,084)
$11,369,690
Buildings 1,729,335 - - - (170,316)
1,559,019
Transportation equipment 102,203 - - - (10,066)
92,137
Office equipment 360,141 - - - (35,469)
324,672
Total 14,803,453 - - - (1,457,935)
13,345,518
Accumulated depreciation
Buildings 167,630
69,357
- - (18,560)
218,427
Transportation equipment 85,551
4,641
- - (8,563)
81,629
Office equipment 299,639
15,493
- - (29,969)
285,163
Total 552,820
89,491
- - (57,092)
585,219
Net balance $14,250,633 $(89,491) $- $- $(1,400,843)
$12,760,299
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
50
B. Property, plant and equipment leased out under operating leases
31 December 2023
Beginning
balance Additions Impairment Disposals Re-classification
Foreign exchang
e
differences
Ending
balance
Cost
Vessels $3,628,751,284 $1,649,821 $- $350,494,519 $190,699,155 $850 $3,470,606,591
Vessel equipment 8,725,592 2,344,759 - 2,276,129 - 4 8,794,226
Dry-dock 37,409,561 18,034,794 - 18,768,784 2,014,317 206 38,690,094
Total 3,674,886,437 22,029,374 - 371,539,432 192,713,472 1,060 3,518,090,911
Accum
ulated depreciation
and impairment
Vessels 1,185,065,925 124,806,325 - 171,624,849 3,256,286 1,877 1,141,505,564
Vessel equipment 4,783,053 1,721,835 - 2,276,129 - 4 4,228,763
Dry-dock 15,164,647 16,270,042 - 14,305,237 165,271 398 17,295,121
Total 1,205,013,625 142,798,202 - 188,206,215 3,421,557 2,279 1,163,029,448
Net balance $2,469,872,812 $(120,768,828) $- $183,333,217 $189,291,915 $(1,219) $2,355,061,463
31 December 2022
Beginning
balance Additions Impairment Disposals Re-classification
Foreign exchang
e
differences
Ending
balance
Cost
Vessels $3,550,233,098 $1,916,500 $- $55,640,280 $132,527,074 $(285,108) $3,628,751,284
Vessel equipment 10,546,799 1,282,976 - 3,102,752 - (1,431) 8,725,592
Dry-dock 32,454,682 19,361,893 - 15,387,637 1,050,000 (69,377) 37,409,561
Total 3,593,234,579 22,561,369 - 74,130,669 133,577,074 (355,916) 3,674,886,437
Accum
ulated depreciation
and impairment
Vessels 1,081,448,530 126,265,776 3,438,214 25,872,807 - (213,788) 1,185,065,925
Vessel equipment 5,822,215 2,065,021 - 3,102,752 - (1,431) 4,783,053
Dry-dock 15,383,165 14,888,046 - 15,040,565 - (65,999) 15,164,647
Total 1,102,653,910 143,218,843 3,438,214 44,016,124 - (281,218) 1,205,013,625
Net balance $2,490,580,669 $(120,657,474) $(3,438,214) $30,114,545 $133,577,074 $(74,698) $2,469,872,812
C. As at 31 December 2023 and 2022, the residual value of the vessels amounted to
$447,632 thousand and $463,083 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 2023 and 2022, the Group had deposited the chartering income of
some vessels, including those still being built, into reserve accounts of lending
institutions.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
51
E. For the amount of property, plant and equipment under pledge as at 31 December 2023
and 2022. Please refer to Note 8 for further details.
F. As at 31 December 2023, the Group has entered into certain ship building contracts.
Please refer to Note 9.(1) for further details.
G. For the years ended 31 December 2023 and 2022, the amounts of total interest expense
before capitalization of borrowing costs were $68,929,079 and $43,866,818; the
capitalized interest were $171,726 and $9,136, respectively, with capitalization of rate of
borrowing costs at 1.27%~7.2% and 1.72%~4.15%, respectively.
H. For the years ended 31 December 2023 and 2022, the Group disposed of certain vessels for
$186,892,972, ¥2,100,000,000 and $750,080, ¥2,100,000,000, which resulted in gains on
disposals of property, plant and equipment of $53,876,999 and $95,812, respectively.
I. In April 2022, the Group signed a contract for disposal of a vessel, LBC Energy, with a
contract price of ¥2,100,000,000 and sold Ballast water management systems for
$750,080. The $3,438,214 impairment loss represented the write down of certain
property, plant and equipment to the recoverable amount. This has been recognized in the
statement of comprehensive income. The delivery of vessel was completed on 11 October
2022.
(8) Investment property, net
The Group’s investment property is owned investment properties. The Group has entered
into commercial property leases on its owned investment properties with terms within two
years.
31 December 2023
Beginning
balance Additions Disposals Re-classification
Foreign exchange
differences Ending balance
Cost
Land $2,135,108 $- $- $- $696 $2,135,804
Buildings 256,698 - - - 83 256,781
Total 2,391,806 - - - 779 2,392,585
Accumulated depreciation
Buildings 31,718 8,727 - - 138 40,583
Total 31,718 8,727 - - 138 40,583
Net balance $2,360,088 $(8,727) $- $- $641 $2,352,002
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
52
31 December 2022
Beginning
balance Additions Disposals Re-classification
Foreign exchange
differences Ending balance
Cost
Land $2,368,359 $- $- $- $(233,251) $2,135,108
Buildings 284,741 - - - (28,043) 256,698
Total 2,653,100 - - - (261,294) 2,391,806
Accumulated depreciation
Buildings 25,365 9,121 - - (2,768) 31,718
Total 25,365 9,121 - - (2,768) 31,718
Net balance $2,627,735 $(9,121) $- $- $(258,526) $2,360,088
For the Years Ended 31 December
2023 2022
Rental income from investment property $102,579 $108,654
Less:
Direct operating expenses from investment
property generating rental income (36,339) (33,828)
Direct operating expenses from investment
property not generating rental income - -
Total $66,240 $74,826
A. The Group acquired land and buildings located at the 3th subsection, Da-an district,
Taipei for $15,032,027 in May 2019 for the use of office space. As all the rental
agreements with existing lessees, for approximately 37.41% of the total pings, have been
expired in March 2020, the investment property was transferred to property, plant and
equipment. On 14 September 2020, the Group leased out unused office space for
approximately 15.81% of the total pings of the property, which had been transferred from
property, plant and equipment to investment property.
B. For the amount of investment property under pledge as at 31 December 2023 and 2022,
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 $2,661,916 and
$2,647,778 as at 31 December 2023 and 2022, respectively. The fair value has been
determined based on valuations performed by an independent valuer and rental rates. The
valuation methods used are sales comparison approach and income approach.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
53
(9) Other non-current assets
31 December 2023 31 December 2022
Prepayment for vessels $64,273,500 $53,852,120
Deferred expenses 36,167 53,894
Total $64,309,667 $53,906,014
Prepayment for vessels is the amount prepaid for building new vessels. The Group had
entered into ship building contracts, please refer to Note 9.(1).
(10) Borrowings
31 December 2023 31 December 2022
Bank loans
－Short-term borrowings $30,527,226 $25,000,000
－Long-term borrowings (including current portion) $962,414,725 $1,102,443,232
A. Terms and conditions of outstanding loans were as follows:
Loans Currency Nominal interest rates Maturity date Amount
31 December 2023
Unsecured USD 5.96%~6.91% 2022.09.30~2026.06.05 $20,399,583
JPY 0.88%~0.99% 2023.09.01~2025.08.31 14,850,435
Secured USD 5.16%~7.75% 2012.01.18~2033.06.05 647,145,236
JPY 0.60%~1.98% 2010.08.03~2031.10.17 301,585,941
TWD 1.98%~2.11% 2019.05.31~2024.05.31 8,960,756
Total $992,941,951
Loans Currency Nominal interest rates Maturity date Amount
31 December 2022
Unsecured USD 1.15%~5.19% 2021.09.02~2024.10.31 $25,000,000
JPY 0.88%~0.98% 2022.05.01~2024.08.31 9,271,874
Secured USD 1.37%~7.05% 2010.02.22~2030.12.22 751,395,042
JPY 0.88%~2.14% 2007.12.18~2030.04.02 331,835,245
TWD 1.89%~2.76% 2016.03.28~2024.05.31 9,941,071
Total $1,127,443,232
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
54
B. Future settlements of long-term borrowings were as follows:
Maturity period 31 December 2023 31 December 2022
Within one year $214,728,297 $257,397,975
Beyond one year and up to five years 511,233,498 589,328,708
More than five years 236,452,930 255,716,549
Total $962,414,725 $1,102,443,232
(a) As at 31 December 2023 and 2022, WML had provided financing guarantees for its
subsidiaries of $840,720 thousand and $931,192 thousand, respectively.
(b) As at 31 December 2023 and 2022, the Group had unused credit facilities of
$100,930 thousand and $125,106 thousand, respectively.
(c) The Group’s covenants under the loan agreements are as follows:
i. Loan lenders shall be notified of any significant movement of the Group’s
shareholder’s equity.
ii. In certain circumstances, the Group retains the option to select the currency to be
used for loan or debt settlement.
iii. Some equity shares of the Company’s subsidiaries were pledged to secure bank
loans.
(d) As at 31 December 2023 and 2022, WML and the Company had provided financial
guarantees for the Company’s subsidiaries. Please refer to Note 9.(3) for further
details.
(11) Bonds payable
31 December 2023 31 December 2022
Secured bonds $45,059,803 $44,904,899
Less: current portion (45,059,803) -
Net $- $44,904,899
The Group’s overseas secured bonds were as follows:
31 December 2023 31 December 2022
First R.O.C. secured bonds issued in 2019
Bonds issued $44,814,755 $44,814,755
Accumulated converted amount (20,811) (159,132)
Valuation on bonds payable 265,859 249,276
Net 45,059,803 44,904,899
Less: current portion of bonds payable (45,059,803) -
Total $- $44,904,899
Interest expense $530,856 $554,742
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
55
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%.
(12) Leases
A. Group as a lessor
Please refer to Notes 6.(7) and 6.(8) for relevant disclosure of property, plant and
equipment for operating leases and the Group’s owned investment properties. Leases of
owned investment properties and property, plant and equipment are classified as
operating leases as they do not transfer substantially all the risks and rewards incidental
to ownership of underlying assets.
For the Years Ended 31 December
2023 2022
Lease income for operating leases
Income relating to fixed lease payments and
variable lease payments that depend on an
index or a rate $535,042,547 $821,235,843
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 2023 and
2022 are as follows:
31 December 2023 31 December 2022
Not later than one year $568,368,622 $477,671,192
Later than one year but not later than two years 465,888,978 321,633,261
Later than two years but not later than three years 434,721,265 292,927,581
Later than three years but not later than four years 416,513,382 273,447,967
Later than four years but not later than five years 415,164,985 255,825,590
Total $2,300,657,232 $1,621,505,591
B. Group as a lessee
The Group leases various assets, including vessels and buildings. The lease terms range
from 3 to 9.5 years.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
56
The effect that leases have on the financial position, financial performance and cash
flows of the Group are as follows:
(a) Amounts recognized in the balance sheet
i. Right-of-use assets
The carrying amount of right-of-use assets
31 December 2023 31 December 2022
Vessels $185,909,635 $179,941,071
Buildings 448,931 790,421
Total $186,358,566 $180,731,492
During the years ended 31 December 2023 and 2022, the additions to
right-of-use assets of the Group amounting to $28,183,768 and $56,776,557,
respectively.
ii. Lease liabilities
31 December 2023 31 December 2022
Lease liabilities
Current $13,391,453 $13,866,866
Non-current 130,152,801 127,795,204
Total $143,544,254 $141,662,070
(i) Please refer to Note 6.(18).D for the interest on lease liabilities recognized
during the years ended 31 December 2023 and 2022 and refer to Note 12.(5)
liquidity risk management for the maturity analysis for lease liabilities.
(ii) Please refer to Note 7 for further details of lease liabilities recognized for
related party transactions.
(b) Amounts recognized in the statement of comprehensive income
Depreciation charge for right-of-use assets
For the Years Ended 31 December
2023 2022
Vessels $9,717,931 $10,385,821
Buildings 352,892 333,763
Total $10,070,823 $10,719,584
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
57
(c) Income and costs relating to leasing activities
For the Years Ended 31 December
2023 2022
The expense relating to short-term leases $13,081 $29,109
The expense relating to leases of low-value
assets (Not including the expenses
relating to short-term leases of
low-value assets) 6,548 7,045
The expense relating to variable lease
payments not included in the
measurement of lease liabilities 477 66
Income from subleasing right-of-use assets 38,712,135 57,169,088
Losses arising from sale and leaseback
transactions 385,935 188,263
(d) Cash outflow relating to leasing activities
For the years ended 31 December 2023 and 2022, the Group’s total cash outflows for
leases amounting to $23,063,605 and $16,843,192, respectively.
(e) Sale and leaseback transaction
i. As at 31 December 2023 and 2022, the Group engaged in vessels sale and
leaseback transactions based on operating performance and investment
strategies. The sale and leaseback transactions resulted in financial leases, and
the related information of these transactions was as follows:
31 December 2023 Vessel Lease term Rent Contract price Interest rates
(i) 7 years from 2018.09 ¥28,928,000/quarter ¥810,000,000 1.5%
(ii) 7 years from 2021.11 ¥45,900,000/quarter ¥1,485,000,000 TIBOR+1.35%
(iii) 7 years from 2023.01 ¥64,162,300/quarter ¥1,941,800,000 TIBOR+1%
31 December 2022 Vessel Lease term Rent Contract price Interest rates
(i) 7 years from 2018.09 ¥28,928,000/quarter ¥810,000,000 1.5%
(ii) 7 years from 2021.11 ¥45,900,000/quarter ¥1,485,000,000 TIBOR+1.35%
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
58
ii. Future non-cancellable chartering payments as at 31 December 2023 and 2022
were as follows:
31 December 2023 31 December 2022
Within one year $3,705,874 $2,265,456
Beyond one year and up to five years 13,758,842 7,091,371
More than five years 9,167,061 2,901,907
Total $26,631,777 $12,258,734
iii. Based on the agreements of the sale and leaseback transactions, the Group has
the option to buy the vessels at maturity date and can acquire the lease vessels
when the Group makes the payment.
iv. Please refer to Note 7 for further details of sale and leaseback transactions
regarding related parties.
(13) Post-employment defined benefit plan
A. Defined contribution plans
WELL and WII provide cash contribution at the rate of 6% of the employee’s monthly
wages to the Labor Pension personal account of the Bureau of the Labor Insurance in
accordance with the provisions of the Labor Pension Act.
B. Defined benefit plans
WII also have a defined benefit plan covering all regular employees in accordance with
the Labor Standards Act. This plan provides for a pension benefit payment of 2 units for
each year of service. Each unit of retirement payment referred to above shall be computed
as the average monthly salary for the last six months at the time of approved retirement.
Under this plan, the Company contributes monthly an amount equal to 2% of gross salary
to a pension fund, which is deposited into a designated depository account with the Bank
of Taiwan.
(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.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
59
As at 31 December 2023 and 2022, the total outstanding capital of the Company both
amounted to NT$7,464,092 thousand, consisting of 746,409 thousand shares with a
par value of NT$10 per share.
(b) On 20 May 2022, the shareholders resolved at their meeting to appropriate the 2021
earnings, by distributing the cash dividends from retained earnings at NT$5.50 per
share. The record date of cash dividends was 14 June 2022, and the distribution date
was 1 July 2022.
(c) On 12 May 2023, the shareholders resolved at their meeting to appropriate the 2022
earnings, by distributing the cash dividends from retained earnings at NT$6.50 per
share. The record date of cash dividends was 5 June 2023, and the distribution date
was 28 June 2023.
B. Capital surplus
The components of the capital surplus were as follows:
31 December 2023 31 December 2022
Additional paid-in capital $1,237,415 $1,237,415
C. Retained earnings
(a) The Company’s distribution of directors’ and supervisors’ remuneration is based on
the level of earnings and the resolution of the board of directors. Distributions of
directors’ and supervisors’ remuneration are classified into cost or operating expense.
Any difference between the amounts approved in the shareholders’ meeting and those
recognized in the financial statements, if any, is accounted for as a change in
accounting estimates and is charged to profit or loss.
(b) On 12 May 2023 and 20 May 2022, the Company’s shareholders resolved at the
shareholder’s meeting to appropriate the 2022 and 2021 earnings, respectively. These
earnings were distributed as dividends and remuneration to directors and supervisors
as follows:
Unit: NTD
For the Years Ended 31 December
Item 2022 2021
Cash dividends from retained earnings-per share $6.50 $5.50
For the amount and estimate basis of Directors’ and supervisors’ remuneration please
refer to Note 6.(17).E.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
60
(15) Operating revenue
For the Years Ended 31 December
2023 2022
Revenue from contracts with customers
Freight revenue $1,561,136 $4,293,297
Vessel management revenue 656,869 796,453
Subtotal 2,218,005 5,089,750
Hire revenue (Note)
Hire revenue-long term 457,146,288 617,437,191
Hire revenue-short term 77,734,692 203,678,778
Subtotal 534,880,980 821,115,969
Other operating revenue 8,431,304 9,605,065
Total $545,530,289 $835,810,784
Note: The Group accounted the hire revenue with lease terms within six months for hire
revenue-short term.
Analysis of revenue from contracts with customers during the years ended 31 December
2023 and 2022 are as follows:
A. Disaggregation of revenue
For the Years Ended 31 December
2023 2022
Rendering of services $2,218,005 $5,089,750
Timing of revenue recognition:
Over time $2,218,005 $5,089,750
B. Contract balances
None.
C. Transaction price allocated to unsatisfied performance obligations
No disclosure of transaction price allocated to unsatisfied performance obligation as the
duration of all contracts with customers is within one year.
D. Assets recognized from costs to fulfill a contract
None.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
61
(16) Expected credit losses
For the Years Ended 31 December
2023 2022
Operating expenses – expected credit losses
Accounts receivable $286,890 $1,215,159
Please refer to Note 12 for more details on credit risk.
The Group measures the loss allowance of its accounts receivable at an amount equal to
lifetime expected credit losses. The assessment of the Group’s loss allowance as at 31
December 2023 and 2022 are as follows:
Considering counterparties credit rating, industry characteristics and past experiences, the
loss allowance of accounts receivable is measured as a single group by using a provision
matrix. Details for the provision matrix are as follows:
31 December 2023 Past due
Not yet due
Under 6
months 7~12 months 13~18 months 19~24 months
Over 24
months Total
Gross carrying amount $3,149,195 $472,103 $539,998 $900,449 $- $24,446 $5,086,191
Loss ratio 0.87% 7.77% 8.64% 8.98% 8.70% 100%
Lifetime expected
credit losses 27,352 36,682 46,656 80,860 - 24,446 215,996
Net carrying amount $3,121,843 $435,421 $493,342 $819,589 $- $- $4,870,195
31 December 2022 Past due
Not yet due
Under 6
months 7~12 months 13~18 months 19~24 months
Over 24
months Total
Gross carrying amount $3,747,412 $1,121,613 $62,925 $57,184 $358,560 $- $5,347,694
Loss ratio 1.50% 15.93% 16.64% 17.00% 15.75% 100%
Lifetime expected
credit losses 56,226 178,673 10,471 9,721 56,473 - 311,564
Net carrying amount $3,691,186 $942,940 $52,454 $47,463 $302,087 $- $5,036,130
The movement in the provision for impairment of accounts receivable during the years
ended 31 December 2023 and 2022 is as follows:
For the Years Ended 31 December
2023 2022
Beginning balance $311,564 $255,963
Addition for the current period 286,890 1,215,159
Write off for past due over 25 months (382,458) (1,159,558)
Ending balance $215,996 $311,564
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
62
(17) Operating costs
For the Years Ended 31 December
2023 2022
Depreciation $152,744,562 $153,823,535
Cost of materials 62,416,368 55,529,182
Expenses for chartering services 42,789,337 51,433,640
Wages and personnel expenses 158,263,121 169,611,437
Other operating costs 12,401,905 12,547,648
Total $428,615,293 $442,945,442
A. Cost of materials
For the Years Ended 31 December
2023 2022
Fuel $6,461,502 $6,270,304
Lubricants 12,169,891 11,179,199
Materials 12,897,183 11,729,923
Spare parts 17,051,451 14,838,491
Inspection fees 8,417,455 7,862,639
Repairs and maintenance 3,778,611 2,235,535
Paints 1,640,275 1,413,091
Total $62,416,368 $55,529,182
B. Expenses for chartering services
For the Years Ended 31 December
2023 2022
Commissions $27,323,438 $41,217,724
Management fee 5,102,583 1,070,087
Port charges 1,189,857 1,934,495
Agency costs 677,906 571,875
Dispatch expenses 78,451 122,044
Postage expenses 2,999,980 2,924,309
Others 5,417,122 3,593,106
Total $42,789,337 $51,433,640
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
63
C. Wages and personnel expenses
For the Years Ended 31 December
2023 2022
Crew wages $121,644,806 $123,183,164
Insurance expenses 13,209,369 11,059,431
Food and meals 8,749,520 8,499,149
Crew travel fees 11,075,793 22,420,674
Bonus 3,406,722 4,265,209
Pension 176,911 183,810
Total $158,263,121 $169,611,437
D. Other operating costs
For the Years Ended 31 December
2023 2022
Hull and machinery insurance $10,067,548 $9,632,486
Compensation for damage 1,184,915 2,063,647
Lease payments 2,889 3,048
Others 1,146,553 848,467
Total $12,401,905 $12,547,648
E. Summary statement of employee benefits, depreciation and amortization expenses by
function for the years ended 31 December 2023 and 2022:
For the Years Ended 31 December
2023 2022
Operating
costs
Operating
expenses
Total
amount
Operating
costs
Operating
expenses
Total
amount
Employee benefits expense
Salaries $125,051,528
$2,036,179
$127,087,707
$127,448,373
$3,911,373
$131,359,746
Insurance expenses 13,209,369 157,241 13,366,610 11,059,431 157,949 11,217,380
Pension 176,911 65,542 242,453 183,810 133,781 317,591
Other employee benefits
expense 8,755,714 66,222 8,821,936 8,500,706 69,349 8,570,055
Depreciation 152,744,562 221,315 152,965,877 153,823,535 213,504 154,037,039
Amortization
- 17,489 17,489 - 18,847 18,847
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
64
The differences between the actual appropriations of 2022 and 2021 earnings for
directors’ remunerations as approved at the shareholders’ meeting and the amounts
recognized in the financial statements were as follows:
2022
The actual
appropriation
according to the
shareholders meeting
The amount
recognized in the
financial report Difference
Directors’ and supervisors’ remuneration $1,233,969 $1,233,969 $-
2021
The actual
appropriation
according to the
shareholders meeting
The amount
recognized in the
financial report Difference
Directors’ and supervisors’ remuneration $1,016,339 $1,016,339 $-
The aforementioned difference for the years ended 31 December 2022 and 2021 was
accounted for as a change in accounting estimates and was charged to profit or loss for
the years ended 31 December 2023 and 2022.
The Group estimated the amounts of the remuneration to directors and supervisors to be
$382,288 and $1,233,969 for the years ended 31 December 2023 and 2022, respectively.
These amounts were calculated based on the Company’s net profit for the years ended 31
December 2023 and 2022, 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 during the years ended 31 December 2023 and 2022.
Information on the board of directors’ recommendations and shareholders’ approval
regarding the employee bonuses and remuneration to directors and supervisors can be
obtained from the “Market Observation Post System” on the website of the TWSE.
(18) Non-operating income and expenses
A. Interest income
For the Years Ended 31 December
2023 2022
Interest income
Bank deposits $6,047,909 $3,138,876
Financial assets at fair value through other
comprehensive income 811,318 529,646
Total $6,859,227 $3,668,522
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
65
B. Other income
For the Years Ended 31 December
2023 2022
Other income, others $1,078,502 $4,208,497
The Group and the lessee had both agreed to early terminate the lease agreement during
the year ended 31 December 2022. The Group received a compensation for $3,571,750,
which was recognized under other income, others.
C. Other gains and losses
For the Years Ended 31 December
2023 2022
Gains on disposals of property, plant and
equipment $53,876,999 $95,812
(Losses) profit from lease modification (1,358) 414,408
Foreign exchange gains 3,929,478 12,519,346
Gains (losses) on financial assets at fair value
through profit or loss (Note) 713,053 (52,557)
Losses on disposals of investments (1,402) -
Impairment loss recognized in profit or loss,
property, plant and equipment - (3,438,214)
Subtotal 58,516,770 9,538,795
Miscellaneous expenses (2,452,822) (2,588,673)
Total $56,063,948 $6,950,122
Note: Balances were arising from financial assets mandatorily measured at fair value
through profit or loss, including valuation adjustment, interest income, exchange
difference, etc.
D. Interest expense
For the Years Ended 31 December
2023 2022
Interest on borrowings from bank $54,404,761 $35,065,339
Interest on bonds payable 530,856 554,742
Interest on lease liabilities 4,203,844 2,911,330
Interest on long-term accounts payable
(including from related parties) 9,617,892 5,326,271
Total interest expense $68,757,353 $43,857,682
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
66
(19) Components of other comprehensive income (loss)
For the year ended 31 December 2023
Arising during
the period
The original
cost that was
removed to
hedged item
Other
comprehensive
income (loss)
Income tax
income
(expenses)
Other
comprehensive
income, net
of tax
Components of other comprehensive income that
will not be reclassified to profit or loss:
Remeasurements of defined benefit plans $177,301 $- $177,301 $1,001 $178,302
Components of other comprehensive income that
will be reclassified to profit or loss:
Exchange differences on translation of foreign
financial statements (15,346,026) - (15,346,026) - (15,346,026)
Unrealized gains (losses) from investments in
debt instruments measured at fair value
through other comprehensive income 345,837 - 345,837 - 345,837
Total of other comprehensive income (loss) $(14,822,888) $- $(14,822,888) $1,001 $(14,821,887)
For the year ended 31 December 2022
Arising during
the period
The original
cost that was
removed to
hedged item
Other
comprehensive
income (loss)
Income tax
income
(expenses)
Other
comprehensive
income, net
of tax
Components of other comprehensive income that
will not be reclassified to profit or loss:
Remeasurements of defined benefit plans $(6,358) $- $(6,358) $1,272 $(5,086)
Components of other comprehensive income that
will be reclassified to profit or loss:
Exchange differences on translation of foreign
financial statements 52,977,835 - 52,977,835 - 52,977,835
Unrealized gains (losses) from investments in
debt instruments measured at fair value
through other comprehensive income (754,457) - (754,457) - (754,457)
Total of other comprehensive income (loss) $52,217,020 $- $52,217,020 $1,272 $52,218,292
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
67
(20) Income tax
A. Pursuant to the rules and regulations of the local authority, the Group income tax include
WML and its subsidiaries and the Company’s subsidiaries in Taiwan. The rest of the
subsidiaries have no tax obligations pursuant to the rules and regulations of the local
authority.
B. For the years ended 31 December 2023 and 2022, the components of income tax
expenses (income) of WML and its subsidiaries and the Company’s subsidiaries in
Taiwan were as follows:
Income tax expense (income) recognized in profit or loss
For the Years Ended 31 December
2023 2022
Current income tax expense (income):
Current income tax charge $761,392 $615,027
Adjustments in respect of current income tax
of prior periods - (20)
Deferred tax expense (income):
Deferred tax expense relating to origination
and reversal of temporary differences 25,827 45,266
Deferred tax expense (income) arising from
write-down or reversal of write-down of
deferred tax asset - -
Total income tax expense $787,219 $660,273
Income tax relating to components of other comprehensive income
For the Years Ended 31 December
2023 2022
Deferred tax expense (income):
Remeasurements of the defined benefit plans
$(1,001) $(1,272)
Income tax relating to components of other
comprehensive income
$(1,001) $(1,272)
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
68
Reconciliation between tax expense and the product of accounting profit multiplied by
applicable tax rates is as follows:
For the Years Ended 31 December
2023 2022
Tax at the domestic rates applicable to profits in
the country concerned
$366,742 $353,714
Tax effect of revenues exempt from taxation
and expenses not deductible for tax purposes
331,518 204,936
Tax effect of deferred tax assets/liabilities
87,877 101,643
Adjustments in respect of current income tax of
prior periods
- (20)
Corporate income surtax on undistributed
retained earnings
1,082 -
Total income tax expense recognized in profit or loss
$787,219 $660,273
Deferred tax assets (liabilities) relate to the following:
(a) Unrecognized deferred tax assets
Unrecognized deferred tax assets of the Group are as follows:
31 December 2023 31 December 2022
Deductible temporary difference
Tax loss
$2,745,687 $2,200,101
Impairment loss
547,972 646,819
Total
$3,293,659 $2,846,920
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 2023:
Year Unused Amount Expiration Year
2014 assessed amount
$69,104
2024
2017 assessed amount
51,487
2027
2019 assessed amount
477,045
2029
2020 assessed amount
510,688
2030
2021 assessed amount
500,089
2031
2022 filed amount
592,404
2032
2023 filed amount
544,870
2033
$2,745,687
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
69
(b) Recognized deferred tax assets (liabilities)
For the years ended 31 December 2023 and 2022, changes in deferred tax assets and
liabilities are as follows:
Defined
benefit plans Other Total
Deferred tax assets (liabilities):
Balance, 1 January 2023 $35,062 $8,689 $43,751
(Debit) credit in income statement (36,941) 11,114 (25,827)
Relating to components of other
comprehensive income 1,001 - 1,001
Exchange rate effects (514) 166 (348)
Balance, 31 December 2023 $(1,392) $19,969 $18,577
Balance, 1 January 2022 $38,882 $57,007 $95,889
(Debit) credit in income statement (1,262) (44,004) (45,266)
Relating to components of other
comprehensive income 1,272 - 1,272
Exchange rate effects (3,830) (4,314) (8,144)
Balance, 31 December 2022 $35,062 $8,689 $43,751
Reflected in balance sheet as follows:
31 December 2023 31 December 2022
Deferred tax assets
$32,351 $61,210
Deferred tax liabilities
$13,774 $17,459
C. The assessment of income tax returns
As at 31 December 2023, the assessment of the income tax returns of the Company and
its subsidiaries is as follows:
The assessment of income tax returns
Wisdom Marine International Inc. (WII) Assessed and approved up to 2021
Well Ship management and Maritime
Consultant Co., Ltd. (WELL)
Assessed and approved up to 2021
Huian Ship Management Co., Ltd. Assessed and approved up to 2021
(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.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
70
Diluted earnings per share amounts are calculated by dividing the net profit attributable to
ordinary equity holders of the parent entity (after adjusting for interest on the convertible
bonds and etc.) by the weighted average number of ordinary shares outstanding during the
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.
For the Years Ended 31 December
2023 2022
Basic/diluted earnings per share
Profit attributable to ordinary shareholders $104,966,718 $354,580,639
Weighted average number of ordinary shares 746,409,199 746,409,199
Basic/diluted earnings per share $0.14 $0.48
There have been no other transactions involving ordinary shares or potential ordinary shares
between the reporting date and the date of completion of the financial statements.
7. Related party transactions
(1) Names and Relationships of Related Parties
Name of Related Party Relationship
Lan Chun Sheng Chairman
Pescadores Merchandise Co., Ltd Other Related Party
Pescadores Travel Co., Ltd Other Related Party
Wisdom Marine Agency Co., Ltd. Other Related Party
Hui-wen Investment Co., Ltd Other Related Party
Unicorn Maritime Agency Co., Ltd. Other Related Party
Brave Line Co., Ltd. Other Related Party
YOKO CO., LTD. Other Related Party
Benefit Transport S.A. Other Related Party
Samurai Investment S.A. Other Related Party
Fortunate Transport S.A. Other Related Party
Asiaeuro Investment S.A. Other Related Party
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 1: The name of related party with balance or amount of single transaction over 10% of
the total transaction balance or amount would be disclosed separately.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
71
(2) Significant transactions with related parties
A. Hire revenue
For the years ended 31 December 2023 and 2022, the Group entered into time chartering
with other related parties as follows:
For the Years Ended 31 December
Related party 2023 2022
Other related parties $1,854,479 $1,916,024
The price of time chartering with other related parties was determined based on the
market rate and operating costs of the Group.
B. Services received / rendered
For the years ended 31 December 2023 and 2022, the Group received services from (or
rendered services to) related parties as follows:
Related party Item Amount
For the Year Ended
31 December 2023
Other related parties Vessel management service income $(655,906)
″ Other income (ticket revenue and other income-other) (106,747)
″ Commissions 5,460,870
″ Other expenses (business travel expenses, agency fees,
inspection fees, management consulting fees and etc.) 595,268
″ Operating expenses (business travel expenses,
entertainment expenses and etc.) 113,404
″ Ballast water management systems costs and
dry-docking cost 726,000
″ Losses on disposals of property, plant and equipment
(Commissions) 575,000
Associates Management revenue (963)
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
72
Related party Item Amount
For the Year Ended
31 December 2022
Other related parties Vessel management service income $(795,446)
″ Other income (ticket revenue and other income-other) (17,127)
″ Commissions 7,844,628
″ Other expenses (business travel expenses, agency fees,
inspection fees, management consulting fees and etc.) 800,811
″ Operating expenses (business travel expenses,
entertainment expenses and etc.) 23,360
″ Miscellaneous expenses 33,622
″ Ballast water management systems costs and
dry-docking cost 1,252,900
″ Losses on disposals of property, plant and equipment
(Commissions) 72,105
Associates Management revenue (1,006)
C. Receivables and payables
As at 31 December 2023 and 2022, the Group incurred receivables and payables with
related parties due to vessels operation as follows:
Accounts receivable 31 December 2023 31 December 2022
Name of related party
Asiaeuro Investment S.A $299,989 $319,012
Other receivables 31 December 2023 31 December 2022
Name of related party
Other related parties $11,692 $1,992
Prepayments 31 December 2023 31 December 2022
Name of related party
Other related parties $270,859 $194,959
Other current assets, other 31 December 2023 31 December 2022
Name of related party
Other related parties $701,844 $795,725
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
73
Accounts payable 31 December 2023 31 December 2022
Name of related party
Genius Star Management Consulting Co., Ltd. $- $508,700
Other accrued expenses 31 December 2023 31 December 2022
Name of related party
Benefit Transport S.A. $6,796,453 $5,670,727
Other related parties 658,587 455,196
Total $7,455,040 $6,125,923
Other current liabilities, other 31 December 2023 31 December 2022
Name of related party
Other related parties $243,277 $-
D. Financing
Details of financing provided by a related party to the Group were as follows (accounted
for under long-term accounts payable to related parties):
31 December 2023
Max balance Ending balanceName of related party
Benefit Transport S.A. $90,581,247 $79,098,448
Samurai Investment S.A. 44,351,000 44,351,000
Total $134,932,247 $123,449,448
31 December 2022
Max balance Ending balanceName of related party
Benefit Transport S.A. $100,568,035 $86,555,052
Samurai Investment S.A. 44,351,000 44,351,000
Total $144,919,035 $130,906,052
Interest expenses For the Years Ended 31 December
Name of related party 2023 2022
Benefit Transport S.A. $5,847,736 $3,196,492
Samurai Investment S.A. 3,183,586 1,682,272
Total $9,031,322 $4,878,764
The interest expenses of financing were calculated based on the LIBOR rate plus 2% per
month commencing from 2011.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
74
E. Leases
(a) For the years ended 31 December 2023 and 2022, the Group entered into leases on
its office space with other related parties and key management as a lessee as follows:
Right
-
of
-
use assets
31 December
2023
31 December
2022
Name of related party
Key management
$
-
$161,856
Other related
parties
-
76,786
Total
$
-
$238,642
Lease liabilities 31 December 2023 31 December 2022
Name of related party
Key management
$
-
$165,255
Other related parties - 78,400
Total
$
-
$243,655
Interest expense
For the Years Ended 31
December
Name of related party
2023
2022
Key management $1,046 $5,466
Other related parties
371
4
,
932
Total
$
1
,
417
$
10
,
398
Rent expense
For the Years Ended 31 December
Name of related party 2023 2022
Other related parties
$
-
$
1
,
265
(b) In August and October 2023, an office lease contract signed with key management,
which located in 3F., No. 137, Sanduo 3rd Rd., Qianzhen Dist., Kaohsiung City, was
terminated before expiration. The $173 lease modification profit was generated and
has been recognized in the statement of comprehensive income.
(c) As at 31 October 2022, an office lease contract signed with other related parties,
which located in 2F., No. 237, Sec. 2, Fushing S. Rd., Taipei City, was terminated
before expiration. The $1,824 lease modification profit was generated and has been
recognized in the statement of comprehensive income.
(d) For the years ended 31 December 2023 and 2022, the Group entered into leases with
other related parties as a lessor as follows:
Rent revenue
For the Years Ended 31 December
Name of related party
2023
2022
Other related parties
$
15
7
,
804
$
115,224
The above leases are paid monthly without rental deposits. Lease terms and
conditions are agreed by both parties which are not significant different from those
with third parties.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
75
F. Guarantee
As at 31 December 2023, Benefit Transport S.A. had provided a time deposit guarantee
for the Group’s borrowings of $500 thousand. No such situation as at 31 December 2022.
G. Others
(a) For the year ended 31 December 2023, the installments for sale and leaseback
transactions paid to other related parties were ¥115,712 thousand, while interest
expenses were ¥4,114,750. As at 31 December 2023, the unpaid amount of sale and
leaseback transactions was ¥202,512 thousand (accounted for under long-term
accounts payable to related parties, current and non-current portion, at $1,432,091).
(b) For the year ended 31 December 2022, the installments for sale and leaseback
transactions paid to other related parties were ¥115,712 thousand, while interest
expenses were ¥5,852,808. As at 31 December 2022, the unpaid amount of sale and
leaseback transactions was ¥318,224 thousand (accounted for under long-term
accounts payable to related parties, current and non-current portion, at $2,408,598).
(3) Key management personnel compensation
For the years ended 31 December 2023 and 2022, key management personnel compensation
was as follows:
For the Years Ended 31 December
2023
2022
Salary and bonus $905,976 $2,179,508
Post
-
employment benefits
10
,
107
1
6
,
385
Retirement
benefits
-
67
,
098
$
916
,
083
$
2,262
,
991
8. Pledged assets
The carrying values of pledged assets were as follows:
Pledge
d
assets
Secured liabilities
31 December
2023
31 December
2022
Property, plant and equipment Bank loans and
long-term payables
(including due to
related parties) $2,079,972,000 $2,345,812,000
Investment property
Bank loans
2,
352
,
002
2,360,088
Financial assets at fair value
through other comprehensive
income
Bank loans
4
,
326
,
021
7,856,602
Other financial assets
Bank loans
51
,
807
,
798
49,812,812
$2,138,457,821 $2,405,841,502
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
76
9. Significant commitments and contingencies
(1) The Group had entered into ship building contracts as follows:
31 December 2023
Vessels 14
Contract price $444,913 thousand
Prepaid 64,274 thousand
Financed ship building contracts 33,500 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:
Year of delivery
Contract Price
(USD thousand) Number of vessels
2024 $130,500 4
2025 62,000 2
2026 190,091 6
2027 62,322 2
Total $444,913 14
(2) As at 31 December 2023, the Group has entered into ship selling contracts to sell 1 ship.
The total contract price is $30,500,000. The delivery of the vessel was completed on
14 February 2024.
(3) Financial guarantee
Guarantor
Name of relative
party guarantee 31 December 2023 Ending date Purpose
WML Subsidiaries $609,662 thousand
¥38,061,135 thousand
2033.06 Borrowings
The Company Subsidiaries $683,473 thousand
¥60,643,109 thousand
2033.06 Borrowings and
operating fund
WML The Company $3,000 thousand 2024.06 Operating fund
The Company WII NT$275,140 thousand 2024.05 Borrowings
Amis Integrity S.A. Daiwan Glory S.A. ¥1,029,221 thousand 2027.07 Borrowings
Daiwan Glory S.A. Amis Integrity S.A. ¥1,409,446 thousand 2027.07 Borrowings
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
77
Guarantor
Name of relative
party guarantee 31 December 2022 Ending date Purpose
WML Subsidiaries
$709,537 thousand
¥46,385,713 thousand
2030.12 Borrowings
The Company Subsidiaries
$864,646 thousand
¥72,310,157 thousand
2030.12 Borrowings and
operating fund
WML The Company $3,000 thousand 2023.05 Operating fund
The Company WII NT$301,140 thousand 2024.05 Borrowings
Amis Integrity S.A. Daiwan Glory S.A. ¥1,184,300 thousand 2027.07 Borrowings
Daiwan Glory S.A. Amis Integrity S.A. ¥1,571,079 thousand 2027.07 Borrowings
10. Losses due to major disasters: None.
11. Significant subsequent events:
The Group entered into a joint venture agreement with Synergy Marine Pte. Ltd on 27
December 2023. It is expected to establish a joint venture company the Wisdom Synergy
Shipmanagement Pte. Ltd. in Singapore with each holding 50% of the shares. Its business
shall be the provision of technical management to owners and charters.
12. Others
(1) Categories of financial instruments
Financial assets
31 December
2023
31 December
2022
Financial assets at fair value through profit or loss
$
902
,
7
00
$910,700
Financial assets at fair value through other
comprehensive income
11,
864,671
12,799,202
Financial
assets at amortized cost:
Cash and cash equivalents (excluding cash on hand)
1
16,942,353
208,342,620
Accounts
receivable
and other receivables
(including due from related parties)
6,
978,904
7,582,131
Subtotal
1
23,921,257
215,924,751
Other financial assets
51,807,798
49,812,812
Total
$
1
88,496,426
$279,447,465
Financial liabilities
31 December
2023
31 December
2022
Financial liabilities at amortized cost:
Short
-
term borrowings
$
3
0,527,226
$25,000,000
Accounts payable (including to related parties)
5,758,865
8,511,577
Bonds payable (including current portion)
4
5,059,803
44,904,899
Long
-
term borrowings (including current portion)
9
62,414,725
1,102,443,232
Long
-
term accounts payable
(including due to related parties)
1
6
2,242,671
158,277,941
Lease liabilities (including current portion)
1
4
3,544,254
141,662,070
Total
$1,
3
49,547,544
$1,480,799,719
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
78
(2) Financial risk management objectives and policies
The Group’s principal financial risk management objective is to manage the market risk,
credit risk and liquidity risk related to its operating activities. The Group identifies measures
and manages the aforementioned risks based on the Group’s policy and risk appetite.
The Group has established appropriate policies, procedures and internal controls for
financial risk management. Before entering into significant transactions, due approval
process by the Group’s board of directors and audit committee must be carried out based on
related protocols and internal control procedures. The Group complies with its financial risk
management policies at all times.
(3) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of the changes in market prices. Market prices comprise currency risk,
interest rate risk and other price risk (such as equity risk).
In practice, it is rarely the case that a single risk variable will change independently from
other risk variables; there are usually interdependencies between risk variables. However the
sensitivity analysis disclosed below does not take into account the interdependencies
between risk variables.
Foreign currency risk
The Group is exposed to currency risk on sales, purchases and borrowings that are
denominated in a currency other than the respective functional currencies of Group entities,
primarily USD and Japanese Yen.
The foreign currency sensitivity analysis of the possible change in foreign exchange rates on
the Group’s profit is performed on significant monetary items denominated in foreign
currencies as at the end of the reporting period. The Group’s foreign currency risk is mainly
related to the volatility in the exchange rates for foreign currency Yen. The information of
the sensitivity analysis is as follows:
When USD strengthens/weakens against foreign currency Yen by 10%, the profit for the
years ended 31 December 2023 and 2022 increases/decreases by $4,915,930 and
$4,368,462, respectively; the equity increases/decreases by $0 and $0, respectively.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
79
Interest rate risk
Interest rate risk is managed by the Group on an ongoing basis with the primary objective of
limiting the extent to which net interest expense could be affected by an adverse movement
in interest rates. The Group’s has no financial liabilities at fair value through profit or loss
bearing fixed interest payable. The Group does not use financial derivatives to hedge against
interest rate risk.
The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at
the end of the reporting period, including investments and borrowings with variable interest
rates. At the reporting date, a change of 0.25% of interest rate in a reporting period could
cause the profit for the years ended 31 December 2023 and 2022 to decrease/increase by
$3,245,783 and $3,566,512, respectively; the equity decreases /increases by $0 and $0,
respectively.
(4) Credit risk management
Credit risk is the risk that a counterparty will not meet its obligations under a contract,
leading to a financial loss. The Group is exposed to credit risk from operating activities
(primarily for accounts receivables) and from its financing activities, including bank
deposits and other financial instruments.
Credit risk is managed by each business unit subject to the Group’s established policy,
procedures and control relating to credit risk management. Credit limits are established for
all counter parties based on their financial position, rating from credit rating agencies,
historical experience, prevailing economic condition and the Group’s internal rating criteria
etc. Certain counter parties’ credit risk will also be managed by taking credit enhancing
procedures, such as requesting for prepayment or insurance.
As at 31 December 2023 and 2022, the accounts receivable amounted to $5,086,191 and
$5,347,694, constituting 0.18% and 0.17% of the consolidated total assets, respectively. The
credit concentration risk of accounts receivable is insignificant.
Credit risk from balances with banks, fixed income securities and other financial instruments
is managed by the Group’s treasury in accordance with the Group’s policy. The Group only
transacts with counterparties approved by the internal control procedures, which are banks
and financial institutions, companies and government entities with good credit rating.
Consequently, there is no significant credit risk for these counter parties.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
80
(5) Liquidity risk management
The Group’s objective is to maintain a balance between continuity of funding and flexibility
through the use of cash and cash equivalents, highly liquid equity investments, bank
borrowings, bonds and finance leases. The table below summarizes the maturity profile of
the Group’s financial liabilities based on the contractual undiscounted payments and
contractual maturity. The payment amount includes the contractual interest. The
undiscounted payment relating to borrowings with variable interest rates is extrapolated
based on the estimated interest rate yield curve as of the end of the reporting period.
As at 31 December 2023:
Carrying amount
Contractual
cash flow 1 year 2 years 3 to 5 years > 5 years
Non-derivative financial liabilities
Short-term borrowings $30,527,226 $31,175,568 $31,175,568 $- $- $-
Accounts payable
(including due to related parties) 5,758,865 5,758,865 5,758,865 - - -
Bonds payable 45,059,803 45,494,577 45,494,577 - - -
Long-term borrowings 962,414,725 1,123,200,926 262,457,380 229,069,236 381,207,909 250,466,401
Long-term accounts payable
(including due to related parties) 162,242,671 207,884,421 15,008,124 14,437,630 40,833,244 137,605,423
Lease liabilities 143,544,254 161,296,488 17,496,970 45,985,201 37,713,021 60,101,296
$1,349,547,544 $1,574,810,845 $377,391,484 $289,492,067 $459,754,174 $448,173,120
As at 31 December 2022:
Carrying amount
Contractual
cash flow 1 year 2 years 3 to 5 years > 5 years
Non-derivative financial liabilities
Short-term borrowings $25,000,000 $25,582,722 $25,582,722 $- $- $-
Accounts payable
(including due to related parties) 8,511,577 8,511,577 8,511,577 - - -
Bonds payable 44,904,899 45,867,557 387,791 45,479,766 - -
Long-term borrowings 1,102,443,232 1,267,237,615 305,856,518 240,060,241 449,654,171 271,666,685
Long-term accounts payable
(including due to related parties) 158,277,941 199,113,040 12,612,662 12,550,205 33,090,314 140,859,859
Lease liabilities 141,662,070 157,764,715 17,433,728 20,425,433 71,455,282 48,450,272
$1,480,799,719 $1,704,077,226 $370,384,998 $318,515,645 $554,199,767 $460,976,816
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
81
(6) Reconciliation of liabilities arising from financing activities
Reconciliation of liabilities for the year ended 31 December 2023:
Short-term
borrowings
Long-term
borrowings
(including
current portion)
Long-term
accounts payable
(including due to
related parties)
Lease liabilities
(including
current portion) Bonds payable
Guarantee
deposits
received
Total liabilities
from financing
activities
As at 1 Jan. 2023 $25,000,000 $1,102,443,232 $158,277,941 $141,662,070 $44,904,899 $- $1,472,288,142
Cash flows 5,290,651 (120,517,890) 7,965,876 (18,839,655) - 193 (126,100,825)
Non-cash changes
Foreign exchange
movement 236,575 (19,510,617) (4,098,361) (4,949,769) 16,583 2 (28,305,587)
Other movements - - 97,215 25,671,608 138,321 - 25,907,144
As at 31 Dec. 2023 $30,527,226 $962,414,725 $162,242,671 $143,544,254 $45,059,803 $195 $1,343,788,874
Reconciliation of liabilities for the year ended 31 December 2022:
Short-term
borrowings
Long-term
borrowings
(including
current portion)
Long-term
accounts payable
(including due to
related parties)
Lease liabilities
(including
current portion) Bonds payable
Guarantee
deposits
received
Total liabilities
from financing
activities
As at 1 Jan. 2022 $19,434,367 $1,311,419,549 $184,543,620 $122,217,894 $49,655,475 $390 $1,687,271,295
Cash flows 2,605,087 (144,657,201) (20,761,249) (13,895,642) - (362) (176,709,367)
Non-cash changes
Foreign exchange
movement (39,454) (61,841,693) (5,504,430) (13,600,333) (4,894,909) (28) (85,880,847)
Other movements 3,000,000 (2,477,423) - 46,940,151 144,333 - 47,607,061
As at 31 Dec. 2022 $25,000,000 $1,102,443,232 $158,277,941 $141,662,070 $44,904,899 $- $1,472,288,142
(7) Fair values of financial instruments
A. The methods and assumptions applied in determining the fair value of financial
instruments:
Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. The
following methods and assumptions were used by the Group to measure or disclose the
fair values of financial assets and financial liabilities:
(a) The carrying amount of cash and cash equivalents, accounts receivables, accounts
payable and other current liabilities approximate their fair value due to their short
maturities.
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
82
(b) Fair value of debt instruments without market quotations, bank loans, bonds payable
and other non-current liabilities are determined based on the counterparty prices or
valuation method. The valuation method uses DCF method as a basis, and the
assumptions such as the interest rate and discount rate are primarily based on
relevant information of similar instrument (such as yield curves published by the
GreTai Securities Market, average prices for fixed rate commercial paper published
by Reuters and credit risk, etc.)
(c) The fair value of derivatives which are not options and without market quotations, is
determined based on the counterparty prices or discounted cash flow analysis using
interest rate yield curve for the contract period. Fair value of option-based derivative
financial instruments is obtained using the counterparty prices or appropriate option
pricing model (for example, Binomial Tree model) or other valuation method (for
example, Monte Carlo Simulation).
B. Fair value of financial instruments measured at amortized cost
The carrying amount of the Group’s financial assets and liabilities measured at amortized
cost approximate their fair value, including cash and cash equivalents, accounts
receivable, account payable and other current liabilities.
C. Fair value measurement hierarchy for financial instruments
Please refer to Note 12.(8) for fair value measurement hierarchy for financial instruments
of the Group.
(8) Fair value measurement hierarchy
A. Fair value measurement hierarchy
All asset and liabilities for which fair value is measured or disclosed in the financial
statements are categorized within the fair value hierarchy, based on the lowest level input
that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are
described as follows:
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
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
83
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 2023
Level 1 Level 2 Level 3 Total
Financial assets at fair value through
profit or loss $- $- $902,700 $902,700
Financial assets at fair value through
other comprehensive income $11,864,671 $- $- $11,864,671
As at 31 December 2022
Level 1 Level 2 Level 3 Total
Financial assets at fair value through
profit or loss $- $- $910,700 $910,700
Financial assets at fair value through
other comprehensive income $12,799,202 $- $- $12,799,202
Transfers between Level 1 and Level 2 during the period
During the years ended 31 December 2023 and 2022, 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:
Assets
At fair value through
profit or loss
Structured note
Beginning balances as at 1 January 2023
$910,700
Total gains and losses recognized for the year ended 31 December 2023:
Amount recognized in profit or (loss)
(presented in “other profit or loss”)
82,600
Acquisition/issues for the year ended 31 December 2023
-
Others
(90,600)
Ending balances as at 31 December 2023
$902,700
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
84
Assets
At fair value through
profit or loss
Structured note
Beginning balances as at 1 January 2022
$-
Total gains and losses recognized for the year ended 31 December 2022:
Amount recognized in profit or (loss) (presented in “other profit or loss”)
(52,557)
Acquisition/issues for the year ended 31 December 2022
1,000,000
Others
(36,743)
Ending balances as at 31 December 2022
$910,700
Total gains and losses recognized for the years ended 31 December 2023 and 2022 in the
table above contain gains and (losses) related to structured note on hand as at 31
December 2023 and 2022 in the amount of $82,600 and $(52,557), respectively.
Information on significant unobservable inputs to valuation
The Group’s assets that are measured at fair value categorized within Level 3 of the fair
value hierarchy on a recurring basis are the structured note. The significant unobservable
inputs to valuation of recurring fair value measurements categorized within Level 3 of the
fair value hierarchy is based on counterparty quotations.
Valuation process used for fair value measurements categorized within Level 3 of the fair
value hierarchy
The Group ensures the results of the valuation are in line with market conditions, based
on independent and reliable inputs which are consistent with other information, and
represent exercisable prices. The Group also analyses the movements in the values of
assets and liabilities which are required to be re-measured or re-assessed as per the
Group’s accounting policies at each reporting date.
C. Fair value measurement hierarchy of the Group’s assets not measured at fair value but for
which the fair value is disclosed
As at 31 December 2023 Level 1 Level 2 Level 3 Total
Assets not measured at fair value
but for which the fair value is
disclosed:
Investment properties
(please refer to Note 6.(8)) $- $- $2,661,916 $2,661,916
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
85
As at 31 December 2022 Level 1 Level 2 Level 3 Total
Assets not measured at fair value
but for which the fair value is
disclosed:
Investment properties
(please refer to Note 6.(8)) $- $- $2,647,778 $2,647,778
(9) Significant assets and liabilities denominated in foreign currencies
The Group is mainly affected by the impact of fluctuation in the currency exchange rate for
US Dollar or Japanese Yen. The Group’s significant exposure to foreign currency risk was as
follows:
As at 31 December 2023 As at 31 December 2022
Foreign currency
(Note 1)
Exchange rate
(Note 2) USD/JPY
Foreign currency
(Note 1)
Exchange rate
(Note 2) USD/JPY
Financial liabilities
Monetary item
USD：JPY $8,737,280 141.41 ¥1,235,538,765 $10,821,120 132.12 ¥1,429,686,374
JPY：USD ¥8,187,154,794 0.0071 $57,896,576 ¥7,201,298,330 0.0076 $54,505,740
NTD：USD NT$1,383,561,254 0.0326 $45,059,803 NT$1,379,253,979 0.0326 $44,904,899
Note 1: The foreign currency amount of monetary item is the carrying amount of forward
foreign currency financial liabilities.
Note 2: The exchange rates of monetary item is spot rate.
For the years ended 31 December 2023 and 2022, the Group had foreign exchange gains of
$3,929,478 and $12,519,346, respectively.
(10) Capital management
The capital risk management is established to ensure the Group’s ability to continue to
operate as a going concern. Under this risk management, the Group may adjust dividend
payment to the shareholders, reduce the capital for redistribution to shareholders, issue new
shares, adjust capital expenditure plan and dispose assets to settle any liabilities in order to
maintain or adjust capital structure according to operating needs, investment purpose and
market environment. The Group’s capital structures consisted of net liabilities (borrowings
excluding the amount of cash and cash equivalents) and equity (common stock, capital
surplus and other equity).
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
86
(11) Accounting policy differences as referred in Article 3 of Regulations Governing the
Preparation of Financial Reports by Securities Issuers with respect to the Group’s balance
sheet and statement of comprehensive income for the periods: None.
(12) List of the Group vessels as at 31 December 2023
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 Power 2018 64,012 Supramax
16 Amis Queen 2019 63,424 Supramax
17 Amis Respect 2020 63,449 Supramax
18 Amis Star 2019 61,123 Supramax
19 Amis Treasure 2020 61,125 Supramax
20 Amis Unicorn 2020 60,903 Supramax
21 Amis Victory 2020 63,364 Supramax
22 Amis Wealth 2021 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 Atayal Ace 2013 16,805 Handy
28 Atayal Brave 2012 16,811 Handy
29 Atayal Mariner 2012 16,813 Handy
30 Atayal Star 2012 16,806 Handy
31 Bizen 2008 8,721 Handy
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
87
No. Name of Vessel Construction year D.W.T. Vessel type
32 Blue Horizon 2012 207,867 Cape
33 Bunun Ace 2013 37,744 Handy
34 Bunun Benefit 2019 37,372 Handy
35 Bunun Dynasty 2014 37,795 Handy
36 Bunun Fortune 2015 37,790 Handy
37 Bunun Glory 2015 37,046 Handy
38 Bunun Hero 2015 37,811 Handy
39 Bunun Infinity 2016 37,654 Handy
40 Bunun Justice 2017 37,748 Handy
41 Bunun Kalon 2018 37,653 Handy
42 Bunun Leader 2019 37,650 Handy
43 Bunun Miracle 2020 37,060 Handy
44 Bunun Noble 2020 37,655 Handy
45 Bunun Orchid 2021 37,875 Handy
46 Bunun Power 2021 37,283 Handy
47 Bunun Queen 2022 37,299 Handy
48 Bunun Respect 2021 37,987 Handy
49 Bunun Star 2022 37,301 Handy
50 Bunun Treasure 2022 37,875 Handy
51 Bunun Unicorn 2023 39,413 Handy
52 Bunun Victory 2023 34,559 Handy
53 Bunun Wisdom 2012 38,168 Handy
54 Bunun Xcel 2023 39,697 Handy
55 Bunun Youth 2023 39,703 Handy
56 Bunun Zest 2023 39,601 Handy
57 Daiwan Elegance 2015 35,331 Handy
58 Daiwan Fortune 2015 34,893 Handy
59 Daiwan Glory 2015 35,531 Handy
60 Daiwan Hero 2016 34,376 Handy
61 Daiwan Infinity 2016 34,376 Handy
62 Daiwan Justice 2016 34,327 Handy
63 Daiwan Kalon 2016 34,327 Handy
64 Daiwan Leader 2018 34,442 Handy
65 Daiwan Miracle 2019 34,447 Handy
66 Daiwan Wisdom 2010 31,967 Handy
67 Frontier Bonanza 2010 179,435 Cape
68 Genius Ace 2007 20,150 Handy
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
88
No. Name of Vessel Construction year D.W.T. Vessel type
69 Genius Star IX 2009 12,005 Handy
70 Genius Star X 2010 12,005 Handy
71 Genius Star XI 2012 13,663 Handy
72 Genius Star XII 2013 13,077 Handy
73 Global Faith 2010 28,386 Handy
74 Golden Kiku 2022 82,459 Panamax
75 Hibiscus 2002 48,610 Handy
76 Jacques 2021 4,745 LPG
77 Kanavu Benefit 2021 37,929 Handy
78 Katagalan Ace 2023 82,680 Panamax
79 Katagalan Brave 2023 82,719 Panamax
80 Katagalan Wisdom 2012 98,697 Panamax
81 Katagalan Wisdom III 2012 98,697 Panamax
82 Ligulao 2010 5,296 Other-PCTC
83 Mega Benefit 2018 80,733 Panamax
84 Naluhu 2010 58,107 Supramax
85 Ocean Victory 2011 28,386 Handy
86 Paiwan Wisdom 2010 31,967 Handy
87 Papora Wisdom 2009 28,344 Handy
88 Pescadores 1999 44 Other-passenger
89 Poavosa Ace 2013 28,208 Handy
90 Poavosa Brave 2009 28,367 Handy
91 Poavosa Wisdom 2009 28,234 Handy
92 Poavosa Wisdom III 2011 28,232 Handy
93 Poavosa Wisdom VI 2011 28,213 Handy
94 Poavosa Wisdom VII 2012 28,208 Handy
95 Poavosa Wisdom VIII 2013 28,208 Handy
96 Rukai Benefit 2019 14,040 Handy
97 Sakizaya Ace 2013 74,936 Panamax
98 Sakizaya Brave 2013 74,940 Panamax
99 Sakizaya Champion 2014 78,080 Panamax
100 Sakizaya Diamond 2015 81,938 Panamax
101 Sakizaya Elegance 2015 81,938 Panamax
102 Sakizaya Future 2016 81,938 Panamax
103 Sakizaya Glory 2016 84,883 Panamax
104 Sakizaya Hero 2016 81,067 Panamax
105 Sakizaya Integrity 2016 81,010 Panamax
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
89
No. Name of Vessel Construction year D.W.T. Vessel type
106 Sakizaya Justice 2017 81,691 Panamax
107 Sakizaya Kalon 2017 81,691 Panamax
108 Sakizaya Leader 2017 81,691 Panamax
109 Sakizaya Miracle 2017 81,668 Panamax
110 Sakizaya Orchid 2017 81,588 Panamax
111 Sakizaya Power 2017 81,574 Panamax
112 Sakizaya Queen 2018 81,858 Panamax
113 Sakizaya Respect 2018 81,858 Panamax
114 Sakizaya Star 2020 82,516 Panamax
115 Sakizaya Treasure 2020 82,400 Panamax
116 Sakizaya Unicorn 2021 82,527 Panamax
117 Sakizaya Victory 2021 82,418 Panamax
118 Sakizaya Wisdom 2011 76,457 Panamax
119 Sakizaya Xcel 2022 82,446 Panamax
120 Sakizaya Youth 2022 82,501 Panamax
121 Sakizaya Zest 2022 82,501 Panamax
122 Saysiat Benefit 2018 13,900 Handy
123 Scarlet Eagle 2014 81,842 Panamax
124 Scarlet Falcon 2014 82,260 Panamax
125 Scarlet Rosella 2015 82,235 Panamax
126 Seediq Benefit 2021 16,920 Handy
127 Taikli 2011 13,139 Handy
128 Tao Ace 2013 25,037 Handy
129 Tao Brave 2011 25,065 Handy
130 Tao Mariner 2010 25,065 Handy
131 Tao Star 2010 25,065 Handy
132 Tao Treasure 2013 25,036 Handy
133 Taokas Wisdom 2008 31,943 Handy
13. Other disclosures
Information on major shareholders
Name of Major Shareholder Number of shares Percentage of Ownership
Lan Chun Sheng 202,815,349 27.17%
Pescadores Merchandise Co., Ltd. 52,569,814 7.04%
Unicorn Maritime Agency Co., Ltd. 41,351,672 5.54%
Hui-Wen Investment Co., Ltd. 40,212,047 5.38%
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
90
(1) The information on major shareholders, which is provided by the Taiwan Depository &
Clearing Corporation, summarized the shareholders who held over 5% of total non-physical
common stocks and preferred stocks (including treasury stocks) on the last business date of
each quarter. The registered non-physical stocks may be different from the capital stocks
disclosed in the financial statement due to different calculation basis.
(2) If shares are entrusted, the above information regarding such shares will be revealed by each
trustors of individual trust account. The shareholders holding more than 10% of the total
shares of the company should declare insider’s equity according to Securities and Exchange
Act. The numbers of the shares declared by the insider include the shares of the trust assets
which the insider has discretion over use. For details of the insider’s equity announcement
please refer to the TWSE website.
14. Segment information
(1) General information
The Group operates in a single industry. According to the global management nature of the
ship management industry, the Group determined each business unit as an operating
segment and was disclosed according to their operating types, operating assets and the
Group’s operating structure. The Group was identified as a single reportable segment.
The board of directors allocates the profit and assesses performance of the segments based
on the financial information used in internal management which is based on each vessel’s
operating result. The financial information is not different from the consolidated statement
of comprehensive income therefore no further segmental information was disclosed.
(2) Geographic information
Revenue from external customers is classified according to the location of customers and
non-current assets are classified according to the registry of assets. The Group’s geographic
information is as follows:
For the Years Ended 31 December
2023 Percentage (%) 2022 Percentage (%)
Revenue from external customers:
Singapore $238,109,212 44 $341,310,798 41
The Netherlands 104,332,906 19 130,345,416 15
Germany 37,537,248 7 65,816,149 8
Panama 36,408,992 7 29,223,310 4
Denmark 30,061,591 5 47,925,211 6
Japan 16,681,802 3 50,588,693 6
Others 82,398,538 15 170,601,207 20
Total $545,530,289 100 $835,810,784 100
WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)
91
2023.12.31 2022.12.31
Non-current assets:
Panama $2,188,899,202 $2,353,686,525
Cayman 4,513,755 6,675,862
Taiwan 16,052,796 16,516,255
Liberia 411,324,178 342,698,169
Total $2,620,789,931 $2,719,576,811
Note: non-current assets are property, plant and equipment, right-of-use assets, investment
property and prepaid expenses-vessel.
(3) Major customers
Individual customers accounting for at least 10% of net sales for the years ended 31
December 2023 and 2022 were as follows:
For the Years Ended 31 December
2023 2022
Customer A: $109,576,232 $167,992,403
Customer B: $104,379,248 $130,345,416
Customer C: $67,278,795 $58,543,800