Worldsec Ld 27 September 2005 Worldsec Limited Interim Report for the six months ended 30 June 2005 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 2005 (the "Period"). During the Period, the Group maintained a minimum operation to continue the realisation of its remaining assets into cash. The Group results for the Period are shown in the Consolidated Profit and Loss Account on page 2 of this report. Over US$1.5 million had been collected from debtors in the Period and we expect to collect the remaining balance in the coming months. Subsequent to the end of the Period until review, the Group managed to dispose of its Philippines subsidiary for a consideration of US$363,000 net of expenses, payable in cash which was received at the end of August 2005. The collection of the debtors and the sale of the Group's Philippines assets represent the practical completion of the exercise of realising all the Group's assets into cash. In connection with the disposal of the Philippines subsidiary, the Group has granted the purchaser a limited warranty for a period of six months with such warranty expiring in early 2006. In the next few months, it is expected that actions taken to wind up subsidiaries which are no longer required and pay off all outstanding liabilities would be completed. Once all the outstanding formalities are dealt with and the warranty time limit mentioned above has passed, your board will be in a position to come to a decision regarding the disposition of the cash assets. By order of the Board Paul Kwok Kin Cheng Chief Operating Officer and Finance Director 27 September 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited Audited Six months ended Year ended Notes 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 Turnover 3 - 11 11 Fees and commission payable - - - - 11 11 Gain on disposal of investments 20 602 602 Recovery of doubtful receivables 98 203 670 Other operating income 23 94 94 141 910 1,377 Staff costs (145) (211) (381) Impairment losses (87) - - Other operating costs (128) (355) (526) Operating profit (loss) (219) 344 470 Interest receivable and similar 2 15 21 income Interest payable and similar charges (1) (5) (5) Profit on disposal of subsidiaries - 36 36 (Loss) Profit before taxation (218) 390 522 Tax charge 4 - - - (Loss) Profit for the financial period / year (218) 390 522 (Loss) Earnings per share - basic and diluted 5 (2) cents 3 cents 4 cents Distributions 9 - 9,357 9,357 The results above relate entirely to discontinued operations. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Unaudited Audited Six months ended Year ended 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 (Loss) Profit for the financial period/year (218) 390 522 Currency translation differences (16) (67) (47) Total recognised (losses) / gains in the period/year (234) 323 475 RECONCILIATION OF MOVEMENTS IN CONSOLIDATED SHAREHOLDERS' FUNDS Unaudited Audited Six months ended Year ended 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 (Loss) Profit for the financial period/year (218) 390 522 Other recognised losses relating to the period /year (16) (67) (47) Net change in shareholders' funds during the period/year (234) 323 475 Distribution out of contributed surplus - (9,357) (9,357) Shareholders' funds brought forward 2,624 11,506 11,506 Shareholders' funds carried forward 2,390 2,472 2,624 CONSOLIDATED BALANCE SHEET Unaudited Audited Notes 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 Current assets Investments 6 363 448 448 Debtors 257 1,337 1,805 Bank deposits and cash 2,166 1,429 777 Total assets 2,786 3,214 3,030 Current liabilities 7 (396) (742) (406) Total liabilities (396) (742) (406) Net assets 2,390 2,472 2,624 Equity Share capital 8 13 13 13 Reserves 2,377 2,459 2,611 Total Equity 2,390 2,472 2,624 CONSOLIDATED CASH FLOW STATEMENT Unaudited Audited Six months ended Year ended 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 Cash generated from operations (Note 10) 1,368 (318) (976) Interest received 2 15 21 Interest paid (1) (5) (5) Net cash from operating activities 1,369 (308) (960) Cash flow from investing activities Proceed from sale of subsidiaries - 410 410 Proceeds from sale of investments 20 3,683 3,683 Net cash flow from investing activities 20 4,093 4,093 Cash flow used in financing activities Distribution paid - (9,357) (9,357) Net increase in cash and cash equivalents 1,389 (5,572) (6,224) Cash and cash equivalents at beginning of period 777 7,001 7,001 Cash and cash equivalents at end of period 2,166 1,429 777 NOTES TO THE INTERIM REPORT 1 BASIS OF CONSOLIDATION The Group's financial statements consolidate the financial statements of the Company and the subsidiary undertakings included in the Group. The results of subsidiaries disposed of during the periods/year are included in the consolidated income statement up to the effective date of disposal. 2 BASIS OF Accounting The Group has ceased business operations and has been realising its assets and returning the cash proceeds to shareholders. The financial statements have been prepared on a basis other than that of a going concern which includes, where appropriate, writing down the company's assets to net realisable value. Provision has also been made for any onerous contractual commitments at the balance sheet date. Accordingly, all assets are classified as current assets. The financial statements for the six months ended 30 June 2005 have been prepared in accordance with International Financial Reporting Standards ("IFRS") for the first time. The financial statements for the corresponding six month period to 30 June 2004 and for the year ended 31 December 2004 were prepared in accordance with accounting principles general accepted in the United Kingdom (" UKGAAP"). The transition from UKGAAP to IFRS has not affected the Group's financial position, performance and cash flows presented in this report. The accounting policies adopted in preparing this report are consistent with those adopted in preparing the consolidated financial statements of the Group for the year ended 31 December 2004. NOTES TO THE INTERIM REPORT (CONTINUED) 3 ANALYSIS OF TURNOVER, OPERATING (LOSS) PROFIT AND NET ASSETS Unaudited Audited Six months ended Year ended 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 Turnover analysed by class of business Broking and related services - 11 11 - 11 11 Geographical analysis of turnover Hong Kong - 11 11 - 11 11 The operating (loss) / profit attributed to the different classes of the Group's business is as follows: Broking and related services - 344 470 Others (219) - - (219) 344 470 In the past, the operating profit of the Group was derived from the Group's operations based in Hong Kong and the net assets of the Group were related to broking activities and were substantially situated in Hong Kong. NOTES TO THE INTERIM REPORT (CONTINUED) 4 TAX Unaudited Audited Six months ended Year ended 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 The (charge)/credit comprises: UK Corporation Tax and other overseas taxation - - - - - - Deferred taxation - - - - - - 5 (LOSS) EARNINGS PER SHARE Unaudited Audited Six months ended Year ended 30.6.2005 30.6.2004 31.12.2004 (Loss) Profit for the financial period/year US$(218,000) US$390,000 US$522,000 Weighted average number of shares in issue 13,367,290 13,367,290 13,367,290 (Loss) Earnings per share - basic and diluted (2) cents 3 cents 4 cents NOTES TO THE INTERIM REPORT (CONTINUED) 6 INVESTMENTS Unaudited Audited 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 Investments held as current assets at net realisable value 363 448 448 The Group's investments comprising of listed investments, right to trade on or through the Philippine Stock Exchange and land and building were all held by a subsidiary and represented all the assets of that subsidiary. The subsidiary was disposed of in August 2005 for a consideration of US$363,000 net of associated expenses. NOTES TO THE INTERIM REPORT (CONTINUED) 7 CURRENT LIABILITIES Unaudited Audited 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 Other creditors and accruals 396 742 406 396 742 406 8 SHARE CAPITAL Unaudited Audited 30.6.2005 30.6.2004 31.12.2004 US$ US$ US$ Ordinary shares of Ordinary shares of Ordinary shares of US$0.001 each US$0.001 each US$0.001 each Authorised: 50,000,000 50,000,000 50,000,000 Called up, issued and fully paid: 13,367 13,367 13,367 NOTES TO THE INTERIM REPORT (CONTINUED) 9 DISTRIBUTIONS Distribution out of the contributed surplus account of US$0.70 per share totalling US$9,357,103 was paid on 28 April 2004. 10 RECONCILIATION OF OPERATING (LOSS) / PROFIT TO NET CASH (OUTFLOW) / INFLOW FROM OPERATING ACTIVITIES Unaudited Audited Six months ended Year ended 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 Operating (loss) / profit (218) 344 470 Gain on disposal of investments (20) (602) (602) Gain on disposal of subsidiaries - (36) Exchange difference (19) (53) 4 Impairment losses 87 - - Decrease in debtors 1,578 1,547 1,080 (Increase) / Decrease in other debtors and prepayments (30) 101 99 Decrease in trade creditors - (1,255) (1,293) Decrease in other creditors and accruals (10) (400) (698) Net cash inflow / (outflow) from operating activities 1,368 (318) (976) NOTES TO THE INTERIM REPORT (CONTINUED) 11 ANALYSIS OF CASH AND CASH EQUIVALENTS Unaudited Audited 30.6.2005 30.6.2004 31.12.2004 US$'000 US$'000 US$'000 Cash in hand and deposits repayable on demand 464 902 568 Time deposits of maturity exceeding 1 day 1,702 527 209 Cash and cash equivalents at end of period 2,166 1,429 777 12 INTERIM REPORT The interim report will be sent to shareholders on or about 21 October 2005. 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) Mark Chung FONG Alastair GUNN-FORBES HO Soo Ching Sakae HASHIZUME (appointed on 2nd September 2005) Masao HASEGAWA (resigned on 2nd September 2005) Company secretary Paul Kwok Kin CHENG Registered office address Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda Registration number EC21466 Bermuda Principal bankers The Hongkong and Shanghai Banking Corporation Limited 1 Queen's Road, Central, Hong Kong Auditors Deloitte Touche Tohmatsu, Certified Public Accountants 26th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong Solicitors Linklaters One, Silk Street, London EC2Y 8HQ, England CORPORATE INFORMATION (CONTINUED) Principal share registrar and transfer office The Bank of Bermuda Limited Bank of Bermuda Building, 6 Front Street, Hamilton HM11, 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 SUBSIDIARY 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