REG - Worldsec Limited - Half-year Report
27/09/2022 17:45
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RNS Number : 9009A Worldsec Limited 27 September 2022
WORLDSEC LIMITED
Interim Report for the six months ended 30 June 2022
Worldsec Limited
Interim Report for the six months ended 30 June 2022
The board (the "Board") of directors of Worldsec Limited (the "Company")
hereby submits the interim report on the Company and its subsidiaries (the
"Group") for the six months ended 30 June 2022 (the "Interim Report").
For the period under review, the Group recorded a net loss of US$526,000
(equivalent to basic and diluted loss per share of 0.62 US cent) against a net
profit of US$7,000 (equivalent to basic and diluted earnings per share of 0.01
US cent) for the corresponding six months in 2021. The loss reflected a
negative change in the fair value of the Group's financial assets that was
recognised through the profit and loss account under International Financial
Reporting Standard 9.
During the period under review, the Group expanded its investment portfolio
with two new investments in the technology sector:
(i) an investment through the subscription of the Class A
Participating Shares (the "VS Class A Shares") of VS SPC Limited ("VS SPC")
established by LQ Pacific Partners Limited, in VS SPC, the sole underlying
investment asset of which is an equity interest in Animoca Brands Corporation
Limited ("Animoca"). The Animoca group is principally engaged in the
development and publication of a broad portfolio of products that includes
blockchain games.
(ii) an investment through the subscription of the Class A
Participating Shares (the "Hermitage Class A Shares") of the Hermitage Galaxy
Fund SPC attributable to the Hermitage Fund Twelve SP (the "Hermitage Fund
Twelve") established by Hermitage Capital HK Limited, in the Hermitage Fund
Twelve, the sole underlying investment asset of which is an equity interest in
Innovution Holdings Ltd. ("Innovution"). The Innovusion group is principally
engaged in the development of image-grade light detection and ranging
("LiDAR") sensor systems for the autonomous vehicle and advance
driver-assistance system markets.
At the date of the Interim Report, the investment portfolio of the Group
comprises a total of nine investments:
ICBC Specialised Ship Leasing Investment Fund (the "ICBC Ship Fund")
The Group's investment in the ICBC Ship Fund, which is involved in marine
vessel leasing, continued to provide a stable return through monthly dividend
income generating revenue amounting to US$48,000 for the six months ended 30
June 2022.
Animoca through VS SPC
Through the VS Class A Shares, the Group holds an investment in VS SPC, the
sole underlying investment asset of which is an equity interest in Animoca.
Incorporated in Australia, Animoca is an unlisted holding company of a
technology group that uses gamification, blockchain and artificial
intelligence technologies to develop and publish a broad portfolio of products
that includes, notably among others, The Sandbox, a decentralised gaming
virtual world. Other key business units of the Animoca group consist of
GAMEE, nWay, Blowfish Studios, Grease Monkey Games, REVV Motorsport, TOWER,
Quidd, Lympo, and Forj. Animoca is also an active investor in crypto and
blockchain-related projects with a broad portfolio of more than 340
investments that includes OpenSea, a leading non-fungible token marketplace.
Against the backdrop of a crypto downturn that saw the total market value of
cryptocurrencies losing trillion of US dollars since late last year, the
Animoca group continues to make significant progress. According to an
investor update published by Animoca, unaudited bookings and income of the
Animoca group amounted to A$213 million (equivalent to US$148 million) for the
three months ended December 31 2021 and A$827 million (equivalent to US$573
million) for the four months ended April 30 2022. As at April 30 2022, the
investment portfolio of Animoca was valued at over A$2.2 billion (equivalent
to US$1.5 billion). The Animoca group also held digital assets in the form
of various cryptocurrencies and stablecoins totalling A$304 million
(equivalent to US$211 million) as well as other digital assets including third
party tokens totalling A$952 million (equivalent to US$659 million).
Other recent business and management highlights of the Animoca group include:
- the acquisition of Grease Monkey Games, Darewise, Eden Games,
Notre Game, Be Media and TinyTap to strengthen and expand its gaming and Web3
capabilities;
- the development of significant partnerships with Yuga Labs,
Brinc, OneFootball, Planet Hollywood, Cube Entertainment and Untamed Planet;
- the expansion of its presence in Japan through the establishment
of a strategic subsidiary, Animoca Brands KK;
- the participation in the distribution of security tokens to
professional investors in the first private security token offering arranged
by a digital asset broker licensed by the Securities and Futures Commission in
Hong Kong; and
- the appointment of a number of senior management personnel
including the chief business officer to lead mergers and acquisitions and
business development, a co-chief operating officer to take charge of scaling
initiatives and the chief financial officer to oversee strategic financial
planning.
In addition, The Sandbox, held through a major subsidiary of Animoca that
operates a decentralised gaming virtual world and that has been ranked as one
of the 2022 TIME100 Most Influential Companies, has in recent months attracted
a number of well-known partners that include PwC Hong Kong, Warner Music
Group, Ocean Park, HSBC, MTR, Standard Chartered, PCCW-HKT, TIMEPieces, Planet
Hollywood, Playboy and Paris Hilton to enter its metaverse.
Meantime, notwithstanding the backdrop of the crypto downturn, Animoca
continues to close fund raising deals successfully. In July 2022, it raised
another US$75 million at a valuation of US$5.9 billion in the second tranche
of the funding round previously announced in January 2022, which was extended
to accommodate due diligence process. In September 2022, Animoca issued
convertible notes to a small number of institutional investors, including
existing investors and a strategic consortium of new investors, raising a
further US$110 million to continue to fund acquisitions, investments, product
development and intellectual property licensing. The conversion price, set
at A$4.50 per share, valued Animoca at a valuation similar to that of the
previous funding round. The consortium of new investors, formed by Temasek,
Boyu Capital and GGV Capital, will provide strategic advice and perspectives
to Animoca on organisational capabilities that will include input on business
and capital plans.
Innovusion through the Hermitage Fund Twelve
Through the Hermitage Class A Shares, the Group holds an investment in the
Hermitage Fund Twelve, the sole underlying investment asset of which is an
equity interest in Innovusion.
Innovusion is an unlisted holding company of a technology group that is
principally engaged in the development of image grade LiDAR sensor systems for
the autonomous vehicle and advance driver-assistance system markets.
Over the years since founding in 2016, the Innovusion group has successfully
developed a portfolio of LiDAR products that includes, among others, Falcon. A
robust LiDAR with long-distance capability of a detecting range of 500 metres,
high angular resolution and ease of customerisation and integration, Falcon
has been selected by Nio Inc. ("Nio"), one of Innovusion shareholders, to be
incorporated as the standard configuration for the ET7 model, the new smart
electric flagship sedan of Nio. Delivery of the first batch of ET7s
commenced in March 2022, signifying the beginning of the mass production by
the Innovusion group of Falcon that was required for the assembly process to
meet the March 2022 delivery timeline. By the end of June 2022, more than
6,900 ET7 sedans had been delivered. Riding on the strong demand for the ET7
model and notwithstanding the supply chain challenges, the Innovusion group
managed to achieve rapid growth in revenue starting from a low base.
Constrained by the supply of casting parts, however, delivery of ET7s slowed
down in July 2022 but that was followed by a rebound in August 2022.
Furthermore, the ET7 model, having received approval for sale in Europe, will
become available in Norway, Germany, the Netherlands, Denmark and Sweden
before the end of the year.
Apart from ET7, Falcon has also been selected to be incorporated as the
standard configuration for the two latest models of Nio, ES7, a smart electric
sport utility vehicle the shipment of which commenced at the end of August
2022, and ET5, a mid-size smart electric sedan the shipment of which is slated
to commence in September 2022. To cope with the anticipated business from
Nio, a second production line in Suzhou in the Jiangsu Province in China is
currently under construction and is expected to start production in the fourth
quarter of 2022.
As a leading developer of LiDAR sensor systems, the Innovusion group continues
to secure cooperation agreements with automotive original equipment
manufacturers and other partners. In May 2022, Innovusion formed a strategic
alliance with an autonomous technology firm, TuSimple, to focus on exploring
the integration of the LiDARs of the Innovusion group into the self-driving
trucks of TuSimple under the unmanned port logistics and urban freight
transport scenarios with a view to accelerating the development and
large-scale adoption of driverless technology for heavy truck freight in
China.
With the rapid growth in revenue achieved by the Innovusion group, Innovusion
is in the process of preparing and working on the Series D round of financing.
ByteDance through the Asset Management Master Fund SPC (the "Homaer Fund")
Through the Unicorn Equity Investment Portfolio Class A Shares of the Homaer
Fund, the Group holds an investment in the Homaer Fund, the sole underlying
investment asset of which is an equity interest in ByteDance Ltd.
("ByteDance").
ByteDance is an unlisted holding company of a technology group that operates a
series of mobile application platforms powered by artificial intelligence
across cultures and geographies. The ByteDance group has a portfolio of
products that is available in over 150 markets and 75 languages and that
includes Douyin, Toutiao, TikTok, Xigua Video, Helo, Lark and BytePlus.
Following ByteDance's reorganisation of its group business into six units, the
Douyin business unit becomes responsible for the overall development of the
domestic information and services of the ByteDance group that include Douyin,
news aggregator Toutiao and Xigua Video, among others. In addition, a number
of the major subsidiaries of ByteDance have also been renamed under Douyin.
This appears to reflect what might be an attempt on the part of the ByteDance
group to distinguish and delineate its domestic Douyin business from its
overseas activities in order to achieve flexibility for any future corporate
exercise under an increasingly complex international regulatory environment.
Meantime, with over 600 million daily active users and through the use of
short videos and livestreaming, Douyin has developed a highly popular
e-commerce ecosystem. Since the proposal in April 2021 of the concept of
interest e-commerce that utilises algorithm-based interest recommendation
technology to connect consumers with merchandise, Douyin had achieved strong
growth in online sales reporting a 320% surge in gross merchandise value
selling more than 10 billion items of products in the twelve months through to
April 2022. TikTok, the international version of Douyin, has also been
working to integrate the e-commerce feature into its short video sharing
platform. TikTok Shop was initially launched in Indonesia and the United
Kingdom in early 2021 and has subsequently been expanded to Vietnam, Thailand,
Philippines, Malaysia and Singapore. Tiktok, however, appears to have
decided to stop expanding the shopping feature for the European and North
American markets after experiencing cultural conflicts, low traffic and
insufficient sales in the United Kingdom. On the other hand, TikTok is
testing a shopping-specific feed in Indonesia and has recently launched new
online shopping campaigns in Malaysia and Singapore.
To expand its portfolio of hardware, platforms and content for the metaverse,
ByteDance acquired Beijing PoliQ Technology Ltd. ("PoliQ") in June 2022.
PoliQ, a Chinese virtual reality startup that has developed a two-dimensional
virtual character customisation system, would be integrated into Pico
Interactive, Inc., a virtualisation solution provider and equipment
manufacturer that was acquired by ByteDance in August 2021. Earlier in the
year, ByteDance also announced a partnership with Qualcomm to collaborate on
extended reality hardware, software and technology.
In August 2022, ByteDance's healthcare unit, Xiaohe Health Technology (Hong
Kong) Limited, completed the acquisition of the remaining 69.5% equity
interest to take full control of Beijing Amcare Medical Management Co. Ltd.
("Amcare") for about US$1.5 billion as part of the ByteDance group's continued
expansion into the health technology sector. Amcare, one of the largest
private hospital chains in China, was founded in 2006 and offers comprehensive
services in obstetrics, gynecology, pediatrics, assisted reproduction,
postpartum rehabilitation, postpartum recuperation and medical beauty. It
has a total of seven women's and children's hospitals, two outpatient centres
and five post-partum confinement centres covering the Beijing-Tianjin-Hebei,
Yangtze River Delta and Pearl River Delta regions in China.
While ByteDance is not among the most valuable global brands, it was ranked as
the number one Chinese Global Brand Builder on the 2022 Kantar BrandZ list and
has over the years demonstrated notable success in the brand building of
Douyin and TikTok.
Dingdong (Cayman) Limited ("Dingdong")
Following the distribution of the American depositary shares of Dingdong (the
"Dingdong ADS") by Cambium Grove Growth Opps IV Limited ("Cambium Opps") to
the holders of the Class B Ordinary Shares of Cambium Opps upon the expiry of
the lock-up period associated with initial public offering of Dingdong, the
Group directly holds its investment in the the Dingdong ADS.
Listed on the New York Stock Exchange, Dingdong is the holding company of an
on-demand e-commerce group that operates a mobile application platform,
Dingdong Fresh, providing users with fresh produce, meat, seafood, prepared
food and other food products supported by a self-operated frontline
fulfillment grid. The operations of the Dingdong group cover 28 cities
across China including Beijing, Shanghai, Shenzhen and Guangzhou.
According to the unaudited financial information published by Dingdong, the
Dingdong group achieved revenue of RMB5.4 billion and RMB6.6 billion for the
first and second quarters of 2022, representing year-on-year growth of 43.1%
and 42.8% respectively. The strong revenue growth was primarily driven by an
increase in the number of orders and an increase in the average order value.
Consequent of Dingdong's shift in strategy in the latter part of last year to
focus on developing product capabilities and improving operation efficiency,
gross profit margin rose and fulfillment expenses as a percentage of revenue
fell leading to a sharp drop in net loss from RMB2.0 billion and RMB1.1
billion in the third and fourth quarters of 2021 to RMB477 million and RMB35
million in the first and second quarters of 2022 respectively. The Dingdong
group was also able to generate positive cash flows from operating activities
amounting to RMB218 million during the three months through to June 2022.
With rapidly improving financial performance and outlook and having been
selected by the local government as one of the essential entities to ensure
delivery of daily supplies when a city-wide COVID-19 lockdown was imposed in
Shanghai earlier in the year, the Dingdong group managed to gain increased
support and secure increased credit limits from banking institutions. This
was reflected by an increase of RMB878 million in short term borrowings to
RMB4.1 billion during the second quarter of 2022.
In a move to prioritise markets with good profit potential, Dingdong has
recently decided to discontinue its services in a number of lower-tier Chinese
cities. This is consistent with Dingdong's strategic focus on developing
product capabilities and improving operation efficiency which has since having
been implemented in the latter part of last year led to remarkable results as
evidenced by the sharp sequential narrowing in non-GAAP net loss margin from
31.9%, 18.9%, 7.8% to 0.3% in the four quarters through to June 2022. The
Dingdong group appears to have found the path to profitability and expects to
achieve a single-month non-GAAP breakeven by the end of the year.
Originating from China and listed in the United States, Dingdong is one of
many such companies that has been identified by the U.S. Securities and
Exchange Commission (the "Commission-Identified Companies") under the Holding
Foreign Companies Accountable Act (the "HFCAA") with a potential risk of
delisting should the inspection requirement for the auditor it retains not be
met for three consecutive years. Coupled with the continued repricing that
the Chinese technology stocks have been undergoing, and notwithstanding the
rapidly improving financial performance and outlook of the Dingdong group, the
price of the Dingdong ADS has remained under pressure. An impairment in the
carrying value of the Group's investment in the Dingdong ADS has accordingly
been recognised in the interim financial statements of the Group for the six
months ended 30 June 2022.
Subsequently, in August 2022, the Chinese authorities and the Public Company
Accounting Oversight Board of the United States (the "U.S, PCAOB") reached a
statement of protocol regarding the cooperation on auditor inspections and
investigations. A framework to enable the U.S. PCAOB to inspect and
investigate audit firms based in China has been established. This could
provide the basis and opportunity for the Commission-Identified Companies to
fulfill the auditor inspection requirement under the HFCAA leading eventually
to the removal of an overhang that has been a major drag on the share price of
such companies.
Velocity Mobile Limited ("Velocity")
Velocity, an unlisted investee company of the Group, is the holding company of
a technology group that operates a lifestyle mobile e-commerce platform
targeting premium consumers with services focusing on the sectors of high-end
travel, experiences and luxury goods.
Having effectively minimised the early shock and negative impact of the
COVID-19 pandemic, the Velocity group has resumed its growth trajectory. The
proprietary concierge automation software, Gravity, continues to improve
operation efficiency and productivity. This has driven transactional gross
profit per Velocity Black user to a record high. Velocity Black, the consumer
product of the Velocity group, continues to attract new members and there is a
waiting list for the membership. Likewise, the number of users under
Velocity for Business, the enterprise product of the Velocity group, continues
to grow as contracts that have been entered into following delays because of
the COVID-19 pandemic are making meaningful contribution. To better
capitalise on the growing user base that has a high elastic capacity to spend
and to inspire spending, the Velocity group plans to increase investments in
content, implement innovative content interfaces and integrate additional
third-party API (Application Programming Interface) libraries into its system
and platform. It has also launched a fully integrated SDK (Software
Development Kit) product with a financial technology customer, enabling other
companies to integrate the capabilities of the Velocity group into their own
mobile experience.
Oasis Education Group Limited ("Oasis Group")
Oasis Group is a 50% joint venture of the Group. The operating subsidiary of
Oasis Group, Oasis Education Consulting (Shenzhen) Company Limited ("Oasis
Shenzhen", 奧偉詩教育諮詢(深圳)有限公司), provides consulting and
support services to the Huizhou Kindergarten in the Guangdong Province in
China.
In the summer of 2022, the Huizhou Kindergarten graduated 56 pupils. Since
then, it has attracted a record number of new pupils to enrol thus bringing
the total pupil enrolment to more than 300. The increase in total pupil
enrolment is expected to have a positive impact on the cash flow position of
the Huizhou Kindergarten.
In an effort to encourage pupils to participate in sufficient physical
activities and develop healthy physical activity habits, the Huizhou
Kindergarten has recently renovated its outdoor playground.
Agrios Global Holdings Ltd. ("Agrios")
Agrios, an investee company of the Group previously listed on the Canadian
Securities Exchange, used to be the holding company of a data analytics driven
agriculture technology and service group that owned, leased and managed
properties and equipment for eco-sustainable agronomy and provided advisory
services for aeroponic cultivation to the cannabis industry.
As mentioned in the Company's 2021 Annual Report, a group of Asian-based
Agrios shareholders applied in January 2022 to a Canadian court to appoint
three new directors to the board of Agrios (the "New Agrios Directors"). The
New Agrios Directors have subsequently instructed a Canadian law firm to write
to and notify the British Columbia Securities Commission (the "BCSC") that
there might have been misconduct on the part of the previous Agrios board. In
response having taken into account of the situation, the BCSC has indicated
that consideration may be given to the re-listing of Agrios shares on the
Canadian Securities Exchange depending on the outcome of any further
development.
Investigations into the affairs of the Agrios group by the New Agrios
Directors and the group of Asian-based Agrios shareholders suggested that the
previous Agrios board might have improperly transferred almost all of the
Agrios group's assets to the former chief executive officer of Agrios leaving
the Agrios group in a dire financial position.
In September 2022, a lawsuit was filed by a U.S. law firm on behalf of Agrios
in Washington in the United States where the cultivation and processing
facility of the Agrios group was previously located. The lawsuit alleges
breaches of fiduciary duty against Agrios's former chairman and chief
executive officer for unlawfully taking the Agrios group's property and
business, which was worth in excess of US$30 million.
The Group's investment in Agrios had been completely written off in its
financial statements for the year ended 31 December 2020.
Ayondo Ltd. ("Ayondo")
Ayondo, an investee company of the Group previously listed on the Catalist of
the Singapore Exchange, used to be the holding company of a financial
technology group that focused on social trading activities.
As mentioned in the Company's 2021 Annual Report, subsequent to the delisting
of Ayondo shares from the Catalist of the Singapore Exchange, the directors of
Ayondo filed an application with the High Court of the Republic of Singapore
to wind up Ayondo and liquidators were appointed on 28 January 2022 to pursue
the winding up proceedings. According to the notice issued by the
liquidators on 24 February 2022, the assets of Ayondo were insufficient to
repay liabilities and as such there would not be any surplus assets available
for Ayondo shareholders.
The Group's investment in Ayondo had been completely written off in its
financial statements for the year ended 31 December 2020.
PROSPECTS
Following more than two years of the COVID-19 pandemic which has caused huge
disruptions in global trades, the world economy is again facing major
difficulties. The start of the Russia-Ukraine war in February this year has
amplified the supply chain problems and, subsequently, the emergence of high
inflation, rising interest rates and worsening geopolitics means that world
economic growth in 2022 will be substantially reduced from that of last
year. The 2022 global growth estimate by the International Monetary Fund has
been revised downward by some 27% from 4.4% at the beginning of the year to
the latest level of 3.2%, down substantially from 6.1% in 2021. Higher
energy and food prices have taken a toll on the living standards particularly
of the middle and low income groups.
With growing wariness of risks such as high inflation, rising interest rates
and increasing financing costs as well as uncertain economic outlook, many
private equity firms have adopted a more cautious stance and approach in their
due diligence and valuation processes when making new investment decisions.
According to one of the industry sources, the number of private equity
transactions declined by about 26% in the first half of 2022, as compared to
the previous corresponding period, and the slowdown is expected to continue in
the second half of the year. However, given the ample amount of dry powder
that has been accumulated and is readily deployable, private equity activities
are expected to recover markedly once inflation is brought under control and
economic outlook improves. Sector-wise, information technology, especially
software and services, remains the top industry choice followed by healthcare,
consumer and industrials.
Unlike the governments of other major economies which have been facing rising
inflation and where government budget has been stretched by the COVID-19
pandemic, the Chinese government, with the fiscal wherewithal under a
relatively tame inflationary environment, has recently launched stimulus
measures totalling one trillion Renminbi to boost domestic economic
activities in the wake of the renewed lockdowns following fresh outbreaks of
the Omicron variants in various areas across the country. Through the
channels of state banks, provincial governments and energy firms, these
targeted stimulus measures aim to provide support particularly to the
infrastructure, property and private business sectors. Among the Group's
underlying investment assets, ByteDance, Innovusion, Dingdong and Oasis Group
are expected to benefit from these measures as their operations are mainly
China-focused. Meantime, the ICBC Ship Fund will continue to provide stable
dividend income to the Group, while Velocity and Animoca are expected to
further develop their business through the expansion in its user base and its
crypto and blockchain-related investments respectively. However, due to the
unstable investment environment worldwide, apart from the stable dividend
income from the ICBC Ship Fund and any movements in fair value, the underlying
investment assets of the Group are unlikely to make any contributions to the
Group's results in any meaning way in the near term.
By order of the Board
Alastair GUNN-FORBES
Non-Executive Chairman
27 September 2022
PRINCIPAL RISKS AND UNCERTAINTIES
The Group is exposed to a number of principal risks and uncertainties that
could materially and adversely affect its performance for the remaining six
months of the year ending 31 December 2022 and beyond. Such risks and
uncertainties, the directors believe, remain largely unchanged from those,
including, in particular, target market risk, key person risk, operational
risks and financial risks, set out on pages 13 and 14 of the Company's 2021
Annual Report.
RESPONSIBILITY STATEMENT
The Board, comprising Alastair GUNN-FORBES, Henry Ying Chew CHEONG, Ernest
Chiu Shun SHE, Mark Chung FONG, Martyn Stuart WELLS and Stephen Lister
d'Anyers WILLIS, confirms to the best of its knowledge and understanding that:
(a) the unaudited consolidated financial statements of the Group for the six
months ended 30 June 2022 have been prepared in accordance with International
Accounting Standard 34 as adopted by the European Union and give a true and
fair view of its assets, liabilities and financial position at that date and
its financial performance for the period then ended; and
(b) the Interim Report includes a fair review of the information, such as
important events and related party transactions that took place during the six
months ended 30 June 2022, that is required by Disclosure Guidance and
Transparency Rules 4.2.7R and 4.2.8R.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Unaudited
Six months ended
Notes 30.6.2022 30.6.2021
US$'000 US$'000
Revenue 4 59 50
Other income, gains and losses, net 5 (278) 242
Staff costs 7 (131) (149)
Other expenses (173) (128)
Finance costs 8 (2) (4)
Share of losses of a joint venture (1) (4)
(Loss)/profit before income tax expense (526) 7
Income tax expense 9 - -
(Loss)/profit for the period (526) 7
Other comprehensive income, net of income tax
Exchange differences on translating foreign operations - -
Other comprehensive income for the period,
net of income tax - -
Total comprehensive (loss)/income for the period (526) 7
(Loss)/profit for the period attributable to:
Owners of the Company (526) 7
Total comprehensive (loss)/income for the period attributable to:
Owners of the Company (526) 7
(Loss)/earnings per share - basic 10 US(0.62) US0.01 cent
cent
(Loss)/earnings per share - diluted 10 US(0.62) US0.01 cent
cent
ce
cent
The accompanying notes form an integral part of these interim financial
statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE
2022
Unaudited Audited
As at As at
Notes 30.6.2022 31.12.2021
US$'000 US$'000
Non-current assets
Right-of-use assets 79 111
Interest in a joint venture 99 100
Financial assets at fair value through profit or loss 4,506 3,849
4,684 4,060
Current assets
Other receivables 24 114
Deposits and prepayments 27 26
Financial assets at fair value through profit or loss 267 624
Amount due from a joint venture 257 257
Cash and cash equivalents 702 1,513
1,277 2,534
Current liabilities
Other payables and accruals 91 163
Lease 66 64
liabilities
157 227
Net current assets 1,120 2,307
Non-current liabilities
Lease 18 55
liabilities
Net assets 5,786 6,312
Capital and reserves
Share capital 11 85 85
Reserves 5,701 6,227
Total equity 5,786 6,312
The accompanying notes form an integral part of these interim financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Foreign
Contri- Share currency Accumu-
Share Share buted option translation Special lated
capital premium surplus reserve reserve reserve losses Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at 1 January 2021 249 (17) 625 (12,447) 5,665
85 7,524 9,646
- - - - - - 7 7
Loss and total comprehensive loss for the period
85 7,524 9,646 249 (17) 625 (12,440) 5,672
Balance as at 30 June 2021 (Unaudited)
249 (6) 625 (11,811) 6,312
Balance as at 1 January 2022 85 7,524 9,646
Profit and total comprehensive income for the period - - - - - - (526) (526)
Balance as at 30 June 2022 (Unaudited) 85 7,524 9,646 249 (6) 625 (12,337) 5,786
The accompanying notes form an integral part of these interim financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Unaudited
Six months ended
30.6.2022 30.6.2021
US$'000 US$'000
Cash flows from operating activities
(Loss)/profit for the period (526) 7
Adjustments for:
Depreciation of right-of-use assets 32 32
Interest expense 2 4
Share of losses of a joint venture 1 4
Loss/(gain)on disposal of financial assets at fair value through
profit or loss 20 (38)
Change in fair value of financial assets at fair value through profit or loss
270 (207)
Operating loss before working capital changes (201) (198)
(Increase)/decrease in deposits and prepayments (1) 1
Decrease in other receivables 90 144
Decrease in other payables and accruals (72) (100)
Net cash used in operating activities (184) (153)
Cash flows from investing activities
Investment in financial assets at fair value through
profit or loss (1,188) (752)
Proceeds from disposal of financial assets at fair value through
profit or loss 598 809
Net cash (used in) / from investing activities (590) 57
Cash flows from financing activities
Repayment of principal portion of lease liabilities (35) (33)
Repayment of interest portion of lease liabilities (2) (4)
Net cash used in financing activities (37) (37)
Net decrease in cash and cash equivalents (811) (133)
Cash and cash equivalents at beginning of the period 1,513 1,194
Effects of exchange rate changes - -
Cash and cash equivalents at end of the period
Cash and bank balances 702 1,061
The accompanying notes form an integral part of these interim financial
statements.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE
2022
1. GENERAL INFORMATION
The Company is an exempted company incorporated in Bermuda and has a premium
listing on the Main Market of 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. BASIS OF PREPARATION
This unaudited consolidated financial statements of the Company and its
subsidiaries (the "Group") for the six months ended 30 June 2022 (the "Interim
Financial Statements") have been prepared in accordance with International
Accounting Standard 34 ("IAS 34") issued by the International Accounting
Standards Board as adopted by the European Union (the "EU").
The Interim Financial Statements do not include all of the information
required in annual financial statements in accordance with International
Financial Reporting Standards ("IFRS"), International Accounting Standards
("IAS"), Interpretations adopted by the EU, Interpretations adopted by the
International Financial Reporting Interpretations Committee and
Interpretations adopted by the Standing Interpretations Committee
(collectively referred to as "IFRSs"), and should be read in conjunction with
the annual financial statements of the Group for the year ended 31 December
2021. The Interim Financial Statements have neither been audited nor reviewed
by the Group's auditor.
Save for the adoption of the amendments to IFRSs as described in note 3 to the
Interim Financial Statements, which became effective for the Group's financial
year that began on 1 January 2022, the accounting policies adopted in the
Interim Financial Statements were consistent with those used in the
preparation of the Group's annual financial statements for the year ended 31
December 2021.
The Interim Financial Statements have been prepared on a going concern basis
using the historical cost conversion, except for certain financial instruments
which were stated at fair value as appropriate.
The preparation of the Interim Financial Statements in conformity with IAS 34
as adopted by the EU required management to make judgments, estimates and
assumptions that could affect the application of accounting policies and
reported amounts of assets, liabilities, income and expenses on a year to date
basis. Actual results might differ from these estimates.
3. ADOPTION OF NEW AND REVISED IFRSs
The Group has applied the same accounting policies in the Interim Financial
Statements as in its annual financial statements for the year ended 31
December 2021, except that it has adopted the following amendments to IFRSs:
Amendments to IFRS Standards Annual Improvements to IFRS Standards 2018-2020
Amendments to IFRS 3 Reference to the Conceptual Framework
Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use
Amendments to IAS 37 Onerous Contracts - Costs of Fulfilling a Contract
The application of the above amendments to IFRSs in the current interim period
had no material effect on the amounts reported and/or disclosures set out in
the Interim Financial Statements.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE
2022
4. REVENUE
The Group's revenue represented dividend income from financial assets at fair
value through profit or loss for the periods ended 30 June 2022 and 2021, an
analysis of which is as follows:
Unaudited
Six months ended
30.6.2022 30.6.2021
US$'000 US$'000
Dividend income from financial assets at fair value through profit or loss
59 50
5. OTHER INCOME, GAINS AND LOSSES, NET
Unaudited
Six months ended
30.6.2022 30.6.2021
US$'000 US$'000
(Loss)/gain on disposal of financial assets at fair value through profit or
loss
(20) 38
Change in fair value of financial assets at fair value through profit or loss (270) 207
Foreign exchange gain/(loss), net
Other 6 (3)
6 -
(278) 242
6. BUSINESS AND GEOGRAPHICAL SEGMENTS
No business and geographical segment analyses are presented for the periods
ended 30 June 2022 and 2021 as the major operations and revenue of the Group
arose from Hong Kong. The Board considers that most of the Group's
non-current assets (other than the financial instruments) were located in Hong
Kong.
7. STAFF COSTS
The aggregate staff costs (including directors' remuneration) of the Group
were as follows:
Unaudited
Six months ended
30.6.2022 30.6.2021
US$'000 US$'000
Wages and salaries 128 146
Contributions to pension and provident fund 3 3
131 149
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE
2022
7. STAFF COSTS (CONTINUED)
Key management personnel of the Company are the directors only.
The directors' remuneration was as follows:
Unaudited
Six months ended
30.6.2022 30.6.2021
US$'000 US$'000
Directors' fees 36 42
Other remuneration including contributions to pension and provident fund
- -
36 42
8. FINANCE COSTS
Unaudited
Six months ended
30.6.2022 30.6.2021
US$'000 US$'000
Interest on lease liabilities 2 4
9. INCOME TAX EXPENSE
No provision for taxation has been made as the Group did not generate any
assessable profits for United Kingdom Corporation Tax, Hong Kong Profits Tax
or tax in other jurisdictions during the periods ended 30 June 2022 and 2021.
10. (LOSS)/EARNINGS PER SHARE
The (loss)/earnings and weighted average number of ordinary shares used in the
calculation of basic and diluted (loss)/earnings per share were as follows.
Unaudited
Six months ended
30.6.2022 30.6.2021
(Loss)/earnings for the period attributable to owners of the Company (US$'000)
(526) 7
Weighted average number of ordinary shares for the purposes of basic and
diluted (loss)/earnings per share
85,101,870 85,101,870
Effect of potential dilutive ordinary shares:
- Share options - 2,050,000
85,101,870 87,151,870
(Loss)/earnings per share - basic US(0.62) cent US0.01 cent
(Loss)/earnings per share - diluted US(0.62) cent US0.01 cent
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE
2022
10. (LOSS)/EARNINGS PER SHARE (CONTINUED)
Diluted loss per share was the same as basic loss per share for the six months
ended 30 June 2022 as the impact of the potential dilutive ordinary shares
outstanding had an anti-dilutive effect on the basic loss per share presented
for the six months ended 30 June 2022.
11. SHARE CAPITAL
Number of Total value
shares US$'000
Authorised:
Ordinary shares of US$0.001 each
As at 1 January 2021, 31 December 2021, 1 January 2022 and
30 June 2022 60,000,000,000 60,000
Called up, issued and fully paid:
Ordinary shares of US$0.001 each
As at 1 January 2021, 31 December 2021, and 1 January 2022 and 30 June 2022
85,101,870 85
12. RELATED PARTY TRANSACTIONS
Other than the compensation of key management personnel disclosed below, the
Group did not have any related party transactions during the six months ended
30 June 2022 and 2021.
Compensation of key management personnel
The remuneration of directors is set out in note 7 to the Interim Financial
Statements.
13. CONTINGENT LIABILITIES
The Group had no material contingent liabilities at 30 June 2022 and 31
December 2021.
14. INTERIM REPORT
The Interim Report was approved and authorised for issue by the Board on 27
September 2022.
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*
Stephen Lister d'Anyers WILLIS*
* independent
Company Secretary
Vistra Company Secretaries Limited
First Floor, Templeback, 10 Temple Back, Bristol BS1 6FL, United Kingdom
Assistant Company Secretary
Ocorian Services (Bermuda) Limited
Victoria Place, 5th Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
Registered Office Address
Victoria Place, 5th Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
Registration Number
EC21466 Bermuda
Principal Banker
The Hongkong and Shanghai Banking Corporation Limited
1 Queen's Road, Central, Hong Kong
External Auditor
BDO Limited
25(th) Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong
Principal Share Registrar and Transfer Office
Ocorian Management (Bermuda) Limited
Victoria Place, 5th Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
International Branch Registrar
Link Market Services (Jersey) Limited
12 Castle Street, St Helier, Jersey, JE2 3RT, Channel Islands
United Kingdom Transfer Agent
Link Group
10(th) Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL, United
Kingdom
Investor Relations
For further information about Worldsec Limited, please contact:
Henry Ying Chew CHEONG, Executive Director
Worldsec Group
Unit 607, 6th Floor, FWD Financial Centre, 308 Des Voeux Road Street, Central,
Sheung Wan, Hong Kong
enquiry@worldsec.com (mailto:enquiry@worldsec.com)
Company's Website
http://www.worldsec.com (http://www.worldsec.com)
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