Worldsec Regulatory News (WSL)

WORLDSEC LIMITED

Interim Report for the six months ended 30 June 2014

Worldsec Limited

Interim Report for the six months ended 30 June 2014

The board (the "Board") of directors of Worldsec Limited (the "Company") hereby submits the interim report on the Company and its subsidiaries (collectively known as the "Group") for the six months ended 30 June 2014. 

For the six months ended 30 June 2014, the unaudited results of the Group showed a net loss of US$176,000 , equivalent to a loss per share of 0.3 US cent. This compares with a net loss of US$108,000 and a loss per share of 0.8 US cent for the corresponding period in the previous year. The decline in the loss per share basically reflects the increase in the number of shares as a result of the share issue associated with the fund raising exercise in August 2014. As at 30 June 2014, the Group's total equity stood at US$4.07 million, as compared to US$4.24 million as at the 31 December 2013, and the unaudited net asset value per share amounted to 7.2 US cents.

During the first six months of the current financial year, the Group had been actively looking for and exploring potential investment opportunities. In this connection, a number of investment proposals had been identified and put forward to the Board for review and discussion. However, due to the valuation expectations of the investee companies in question, the Board noted that the amounts of investment required for these proposals were generally significant relative to the size or the gross assets of the Group and after due and careful evaluation and deliberation concluded that the risk return profiles of these proposals, with the exception of one, were not particularly favourable to suit the investment criteria of the Company. The one that remains under further consideration is a new start-up company aiming to provide education services to kindergartens in China (the "Kindergarten Project"). The Group is in the process of carrying out more in-depth analysis of this potential investment proposal; and based on the information currently available, it appears that this investment is a viable and attractive proposition. Subject to satisfactory due diligence and the approval of the proposed expansion in the scope of the Company's Investment Policy as discussed below, the Board intends to make an investment in the Kindergarten Project.

Reference is made to the Investment Policy of the Company, which currently excludes investments in new start-up companies. In the course of attempting to source and identify target investment opportunities, however, it has become apparent that the prevailing investment environment for investing particularly in larger established companies with proven turnover track records as required under the current Investment Policy of the Company has become increasingly competitive against the backdrop of the highly accommodative policies adopted by the central banks in advanced economies. The competition for quality targets has as a consequence been driving up the valuations of these companies, thereby adversely affecting the risk reward balance for investing in them. This in turn has an adverse and restraining effect on the Group to make investments consistent with the current Investment Policy of the Company. Meantime, during the sourcing process, the Group has come across a number of potentially attractive investment opportunities involving new start-up companies. While investing in such companies generally entails a higher degree of risks, the potential for capital appreciation associated with them is commensurately stronger. In the absence of proven track records, the valuations of such companies are also less demanding, thus further enhancing the risk reward balance for investing in them. Accordingly, in order to allow greater flexibility for the Group to capture market opportunities under the prevailing investment environment and to cater for the potential investment in the Kindergarten Project as described above, the Board intends to seek shareholders' approval to expand the scope of the Company's Investment Policy in the forthcoming Annual General Meeting to include investments in new start-up companies.

The Group's recently formed wholly-owned subsidiary, Worldsec Investment (Hong Kong) Limited, has reached agreement to rent a new office. Upon completion of the renovation of the new office, the Group will be in a position to accommodate additional staff to cope with the expected increase in its business activities. The Board is also confident that, should the proposed expansion in the scope of the Company's Investment Policy be approved by shareholders, the Group will be in a better position to achieve the investment objective of the Company with greater flexibility and hence more efficiently.

By order of the Board

Alastair GUNN-FORBES

Non-Executive Chairman

28th August 2014

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2014

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 30 JUNE 2014

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE PERIOD ENDED 30 JUNE 2014

NOTES TO THE INTERIM REPORT

FOR THE PERIOD ENDED 30 JUNE 2014

1. GENERAL INFORMATION

The Company is an exempted company incorporated in Bermuda and its shares are listed on the London Stock Exchange. The addresses of the registered office and principal place of business of the Company are disclosed in the corporate information in the interim report.

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS ( "IFRSs")

In the current period, the Group had adopted all of the new and revised IFRSs issued by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC") of the IASB that were relevant to its operations and effective for accounting periods beginning on or after 1 January 2014. The adoption of these new and revised IFRSs had no significant impact on the financial statements of the Group.

The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective:

The directors anticipate that the application of these standards, amendments and interpretations in the future periods will have no material financial impact on the financial statements of the Group.

Save as disclosed above, the accounting policies adopted in preparing this report were consistent with those adopted in preparing the consolidated financial statements of the Group for the year ended 31 December 2013.

NOTES TO THE INTERIM REPORT (CONTINUED)

FOR THE PERIOD ENDED 30 JUNE 2014

3. BASIS OF PREPARATION

The financial statements have been prepared in accordance with IFRSs. It has been prepared on a going concern basis using the historical cost convention except for certain financial instruments, if any, that are measured at fair values at the end of each reporting period.

The Group's financial statements have consolidated the financial statements of the Company and its subsidiaries undertakings included in the Group.

4. BUSINESS AND GEOGRAPHICAL SEGMENTS

No business and geographical segment analyses are presented for the periods ended 30 June 2014 and 30 June 2013 as the Group had only maintained a minimum operation during the periods.

5. OTHER INCOME AND GAIN

6. INCOME TAX EXPENSE

No provision for taxation has been made as the Group did not generate any assessable profits for UK Corporation Tax, Hong Kong Profits Tax and tax in other jurisdictions.

7. LOSS PER SHARE

NOTES TO THE INTERIM REPORT (CONTINUED)

FOR THE PERIOD ENDED 30 JUNE 2014

8. SHARE CAPITAL

9. RESERVES

10. INTERIM REPORT

The interim report will be sent to shareholders on or about 2nd September 2014.

CORPORATE INFORMATION

Board of Directors

Non-Executive Chairman

Alastair GUNN-FORBES

Executive Directors

Henry Ying Chew CHEONG (Deputy Chairman)

Ernest Chiu Shun SHE

Non-Executive Directors

Mark Chung FONG

Martyn Stuart WELLS

Company Secretary

Jordan Company Secretaries Limited

21 St Thomas Street, Bristol B51 6JS, United Kingdom

Registered Office Address

Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda

Registration Number

21466 Bermuda

Principal Bankers

The Hongkong and Shanghai Banking Corporation Limited

1 Queen's Road, Central, Hong Kong

Auditors

Menzies LLP

Ashcombe House, 5 The Crescent, Leatherhead, Surrey KT22 8DY, United Kingdom

Principal Share Registrar and Transfer Office

Appleby Management (Bermuda) Ltd.

Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda

International Branch Registrar

Capita Asset Services

12 Castle Street, St Helier, Jersey, JE2 3RT, Channel Islands

United Kingdom Transfer Agent

Capita Asset Services

The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom

Investor Relations

For further information about Worldsec Limited, please contact:

Henry Ying Chew CHEONG

Executive Director

Worldsec Group

6th Floor, New Henry House, 10 Ice House Street, Central, Hong Kong