RNS Number:2868Q
Worldsec Ld
29 September 2003
Worldsec Limited
Interim Report for the six months ended 30 June 2003
The Directors submit the interim report on Worldsec Limited (the "Company") and
its subsidiaries (collectively known as the "Group") for the six months ended 30
June 2003 (the "Period").
Reflecting the Group withdrawal from business, turnover for the Period decreased
98% to US$62,000 as compared to the corresponding six months in 2002 while loss
for the Period was US$646,000, as compared to US$3,894,000 in the corresponding
six months in 2002.
In May the Group disposed of another subsidiary, Worldsec Corporate Finance
Limited. A further two subsidiaries, which had been the main operating
subsidiaries of the Group, commenced procedures for voluntary liquidation in
June.
As at 30 June 2003, Shareholders' Funds amounted to US$15,429,000, equivalent to
US$1.15 per share. On 23 July 2003, the Company effected a capital reduction,
details of which are given in note 15 to this interim report. The capital
reduction enables the Company to distribute cash to shareholders in an efficient
and cost-effective manner on realisation of the Group's assets. An interim
distribution of US$0.45 per share totalling USD$6,015,281 to shareholders was
made on 12 August 2003.
The Directors aim to liquidate the Group's remaining assets as expeditiously as
practicable and to return the cash to shareholders. Although there are on-going
operating costs while assets are being liquidated, these costs are being kept to
a minimum and certain investments may be realised at a premium to book value.
The recent improvement in regional financial markets is assisting in the
recovery and realisation of some of the remaining assets. However, there is no
certainty that the more illiquid assets will be sold at book value. Therefore
the Directors maintain that USD$1.15 is a reasonable estimate of the eventual
payout to shareholders.
In the absence of unforeseen circumstances, the Directors hope to make a second
distribution to shareholders of US$0.35 per share by the end of this year.
By order of the Board
Paul Kwok Kin Cheng
Chief Operating Officer
and Finance Director
29 September 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited Audited
Six months ended Year ended
Notes 30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Turnover 3 62 4,067 5,402
Fees and commission payable (69) (802) (1,131)
(7) 3,265 4,271
Gain on disposal of intangible - 164 159
assets
Gain on investments - 53 -
Unrealised gain on investments 105 - 93
Other operating income 77 384 662
175 3,866 5,185
Staff costs (415) (3,319) (6,382)
Provision for doubtful - (369) (3,250)
receivables
Loss on revaluation of - (375) -
investments
Impairment losses - - (201)
Other operating costs (431) (1,714) (3,062)
Operating loss 3 (671) (1,911) (7,710)
Interest receivable and similar 40 103 204
income
Interest payable and similar (1) (158) (277)
charges
Provision for closure of - (1,900) -
operations
Loss on disposal of (14) - (111)
subsidiaries and research
materials
Loss on ordinary activities (646) (3,866) (7,894)
before taxation
Tax on loss on ordinary 4 - (28) 27
activities
Loss for the financial period/ (646) (3,894) (7,867)
year
Loss per share 5 (5) cents (29) cents (59) cents
The results for the six months ended 30 June 2003 relate entirely to operations
which are being discontinued.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Unaudited Audited
Six months ended Year ended
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Loss for the period/year (646) (3,894) (7,867)
Surplus/(deficit) arising on revaluation of - 1 (509)
investments and tangible fixed assets
Currency translation differences 54 70 189
Total recognised losses (592) (3,823) (8,187)
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Unaudited Audited
Six months ended Year ended
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Loss for the period/year (646) (3,894) (7,867)
Other recognised gains/(losses) relating to 54 71 (320)
the period/year
Net reduction in shareholders' funds during (592) (3,823) (8,187)
the period/year
Shareholders' funds brought forward 16,021 24,208 24,208
Shareholders' funds carried forward 15,429 20,385 16,021
CONSOLIDATED BALANCE SHEET
Unaudited Audited
Notes 30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Fixed assets
Intangible assets - 772 -
Tangible fixed assets - 667 -
Investments - 1,271 -
- 2,710 -
Current assets
Investments 6 3,148 1,208 3,047
Debtors 4,026 27,523 5,698
Bank deposits and cash 7 11,463 38,517 18,011
18,637 67,248 26,756
Creditors: Amounts falling due 8 (3,208) (49,543) (10,735)
within one year
Net current assets 15,429 17,705 16,021
Total assets less current 15,429 20,415 16,021
liabilities
Provisions for liabilities and 9 - (30) -
charges
Net assets 15,429 20,385 16,021
Capital and reserves
Called up share capital 10 13,367 13,367 13,367
Reserves 2,062 7,018 2,654
Equity shareholders' funds 15,429 20,385 16,021
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Audited
Six months ended Year ended
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Net cash outflow from operating activities (61) (2,125) (1,073)
(Note 11)
Returns on investments and servicing of
finance
Interest received from banks 40 103 204
Interest paid on bank loans and overdrafts (1) (158) (277)
Net cash inflow/(outflow) from returns on
investments and servicing of finance
39 (55) (73)
Tax refunded/(paid) 69 (38) (144)
Capital expenditure and financial
investment
Purchase of tangible fixed assets - (16) -
Sale of tangible fixed assets - 69 149
Sale of intangible assets - 215 443
Net cash inflow from capital expenditure - 268 592
and financial investment
Acquisition and disposal
Net cash (outflow)/inflow from disposal of (14) - 53
subsidiaries
Net cash outflow from disposal of research
materials and futures trading right
- - (63)
Net cash outflow from acquisition and (14) - (10)
disposal
Net cash inflow/(outflow) before use of 33 (1,950) (708)
liquid resources and financing
Management of liquid resources
Decrease/(increase) in time deposits of 151 (70) 2,427
maturity exceeding 1 day
Increase/(decrease) in cash (Note 12) 184 (2,020) 1,719
NOTES TO THE INTERIM REPORT
1. BASIS OF CONSOLIDATION
The Group financial statements consolidate the financial statements of the
Company and the subsidiary undertakings included in the Group.
2. Accounting policies
The Group disposed certain assets on 1 October 2002 which resulted in the
Group withdrawal from broking, research and corporate finance activities
which have in the past provided the bulk of the revenue generating
activities. The Group is in the process of realising the remaining assets
into cash for distribution to shareholders as soon as practicable.
For the reasons stated above, the financial statements have been prepared on
a basis other than that of a going concern which includes, where
appropriate, writing down the Group's assets to net realisable value.
Provision has also been made for any onerous contractual commitments at the
balance sheet date. The financial statements do not include any provision
for future costs while assets of the Group are being liquidated except to
the extent that such costs were committed at the balance sheet date.
Accordingly, all assets are classified as current assets.
NOTES TO THE INTERIM REPORT (CONTINUED)
3. ANALYSIS OF TURNOVER, OPERATING LOSS AND NET ASSETS
Unaudited Audited
Six months ended Year ended
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Turnover analysed by class of business
Broking and related services 62 3,724 4,683
Corporate finance - 343 719
62 4,067 5,402
Geographical analysis of turnover
Hong Kong 11 3,125 4,420
Thailand 1 791 889
Others 50 151 93
62 4,067 5,402
Operating loss analysed by class of
business
Broking and related services (668) (1,724) (7,586)
Corporate finance (3) (187) (124)
(671) (1,911) (7,710)
The net assets utilised in the Group relate substantially to broking
activities.
NOTES TO THE INTERIM REPORT (CONTINUED)
4. TAX
Unaudited Audited
Six months ended Year ended
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
The (charge)/credit comprises:
UK Corporation Tax at 30% - - (25) -
current year
Hong Kong Profits Tax at 16% - - - 2
current year
Other overseas taxation - (3) (5)
- (28) (3)
Deferred taxation (note 9) - - 30
- (28) 27
5. LOSS PER SHARE
Unaudited Audited
Six months ended Year ended
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Loss for the financial period/year (646) (3,894) (7,867)
Loss per share (5) cents (29) cents (59) cents
Number Number Number
Weighted average number of shares in issue 13,367,290 13,367,290 13,367,290
NOTES TO THE INTERIM REPORT (CONTINUED)
6. INVESTMENTS HELD AS CURRENT ASSETS
Unaudited Audited
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Listed investments - overseas, at market value 1,183 711 1,079
Unlisted investments - overseas, at directors' valuation 1,190 31 1,190
Exchange membership, at directors' valuation 75 - 75
Right to trade on or through the Philippine Stock Exchange, at directors' 225 466 226
valuation
Right to trade on or through The Stock Exchange of Hong Kong Limited, at 128 - 128
directors' valuation
Land and building, at directors' valuation 347 - 349
3,148 1,208 3,047
7.ANALYSIS OF CASH
Unaudited Audited
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Bank deposits and cash 11,463 38,517 18,011
Bank loans and overdrafts - (8,984) -
11,463 29,533 18,011
Less:
Cash at bank - trust accounts (2,032) (21,377) (8,613)
Time deposits of maturity exceeding 1 day - (2,648) (151)
Cash (Note 13) 9,431 5,508 9,247
NOTES TO THE INTERIM REPORT (CONTINUED)
8 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Unaudited Audited
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Bank overdrafts - 8,984 -
Trade creditors 1,591 37,269 8,864
Tax payable - 32 -
Other creditors, accruals, provisions and deferred income 1,617 3,258 1,871
3,208 49,543 10,735
9. PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation represented the tax effect of the excess of depreciation allowances claimed for tax purposes
over the depreciation charged in the financial statements.
Unaudited Audited
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Deferred taxation
At beginning of period / year - 30 30
Transferred to profit and loss account (note 4) - - (30)
At end of period / year - 30 -
There was no material unprovided deferred tax liability at the balance sheet date.
NOTES TO THE INTERIM REPORT (CONTINUED)
10. CALLED UP SHARE CAPITAL
Unaudited Audited
30.6.2003 30.6.2002 31.12.2002
US$ US$ US$
Authorised:
ordinary shares of US$1 each 50,000,000 50,000,000 50,000,000
Called up, issued and fully paid:
ordinary shares of US$1 each 13,367,290 13,367,290 13,367,290
See note 15 regarding capital reduction on 23 July 2003.
11.RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
Unaudited Audited
Six months ended Year ended
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Operating loss (671) (1,911) (7,710)
Gain on disposal of intangible assets - (164) (159)
Gain on disposal of tangible fixed assets - - (38)
Depreciation - 109 196
Provision for doubtful receivables - 369 3,250
Loss on revaluation of investments - 375 -
Unrealised gain on investments (105) - (93)
Impairment loss - - 201
Amortisation of intangible assets - 52 93
Exchange difference 58 74 207
(Increase)/decrease in investments held as current assets - (35) 67
Decrease/(increase) in debtors 1,510 (2,806) 16,181
Decrease/(increase) in cash at bank - trust accounts 6,581 (2,550) 10,214
(Decrease)/increase in trade creditors (7,180) 4,423 (23,982)
(Decrease)/increase in other creditors and accruals (254) (61) 500
Net cash outflow from operating activities (61) (2,125) (1,073)
NOTES TO THE INTERIM REPORT (CONTINUED)
NOTES TO THE INTERIM REPORT (CONTINUED)
12. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Unaudited Audited
Six months ended Year ended
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Increase/(decrease) in cash 184 (2,020) 1,719
Cash (inflow)/outflow from decrease/increase in liquid resources (151) 70 (2,427)
Movement in net funds 33 (1,950) (708)
Net funds brought forward 9,398 10,106 10,106
Net funds carried forward 9,431 8,156 9,398
13.ANALYSIS OF NET FUNDS
Unaudited Audited
30.6.2003 30.6.2002 31.12.2002
US$'000 US$'000 US$'000
Cash in hand and deposits repayable on demand 9,431 14,492 9,247
Bank loans and overdrafts - (8,984) -
Cash (Note 7) 9,431 5,508 9,247
Time deposits of maturity exceeding 1 day - 2,648 151
Net funds 9,431 8,156 9,398
14. COMMITMENTS
Pursuant to a repurchase agreement entered into between the Group and the
purchaser of Worldsec International (U.K.) Limited ("WIUK"), the Group
granted to the purchaser a repurchase option, exercisable before 1 October
2003 for the repurchase of WIUK by the Group at a price which is the lower
of the equivalent cash assets less liabilities of WIUK as stated in the
unaudited management accounts of WIUK as at the last day of the month
preceding the date of repurchase and US$360,000.
NOTES TO THE INTERIM REPORT (CONTINUED)
15. POST BALANCE SHEET EVENTS
(a) Pursuant to an ordinary resolution passed at the Company Special
General Meeting held on 23 July 2003, the Company:
(i) reduced the nominal value of the authorised and issued shares of the
Company from US$1.00 to US$0.001 per share, and the issued share capital of
the Company by US$13,353,922.71 from US$13,367,290 to US$13,367.29 divided
into 13,367,290 new shares of US$0.001 each;
(ii) reduced the amount of US$11,663,851 standing to the credit of the
share premium account of the Company to nil; and
(iii) applied the credit of US$25,017,773.71 arising from the reductions
noted in (i) and (ii) above to the contributed surplus account of the
Company.
(b) On 23 July 2003, the Board resolved to pay an interim dividend of
US$0.45 per share to the shareholders on the register of members on 1 August
2003 totalling US$6,015,281.
16. INTERIM REPORT
The interim report will be posted to shareholders on or about 15 October 2003.
CORPORATE INFORMATION
Board of directors
Non-Executive Chairman
David Archibald Evelyn LYLE
Executive director
Paul Kwok Kin CHENG
Non-executive directors
Henry Ying Chew CHEONG (Deputy Chairman)
Alastair GUNN-FORBES
Mark Chung FONG
HO Soo Ching
Masao HASEGAWA
Company secretary
Paul Kwok Kin CHENG
Registered office address
Cedar House, 41 Cedar Avenue, Hamilton HM12, Bermuda
Registration number
EC21466 Bermuda
Principal bankers
The Hongkong and Shanghai Banking Corporation Limited
1 Queen's Road, Central, Hong Kong
CORPORATE INFORMATION (CONTINUED)
Auditors
Deloitte Touche Tohmatsu, Certified Public Accountants
26th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong
Solicitors
Linklaters & Alliance
One, Silk Street, London EC2Y 8HQ, England
Principal share registrar and transfer office
The Bank of Bermuda Limited
Bank of Bermuda Building, 6 Front Street, Hamilton HMDX, Bermuda
International branch registrar
Capita IRG (Offshore) Limited
Victoria Chambers, Liberation Square, 1/3 the Esplanade, St Helier, Jersey,
Channel Islands
United Kingdom transfer agent
Capita Registrars
The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, England
Investor relations
For further information about Worldsec Limited, please contact:
The Chief Operating Officer
Worldsec Group
Room 1601, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong
PRINCIPAL OPERATING SUBSIDIARIES
Worldsec Brokerage Limited
Worldsec Nominees Limited
Address: Room 1601, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong
Telephone: +(852) 2867 7288 Fax: +(852) 2810 0281
This information is provided by RNS
The company news service from the London Stock Exchange
END
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