XLON:WSL ESEF Annual Report
WORLDSEC LIMITED (XLON:WSL)
ESEF Annual Report
2023-10-04
For: 2022-12-31
View Original
Added on
September 23, 2026
WORLDSEC LIMITED
Annual Report for the year ended 31 December 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, 5
th
Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
Registered Office Address
Victoria Place, 5
th
Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
Registration Number
EC21466 Bermuda
Principal Bankers
The Hongkong and Shanghai Banking Corporation Limited
1 Queen’s Road, Central, Hong Kong
External Auditor
BDO Limited
25th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong
Principal Share Registrar and Transfer Office
Ocorian Management (Bermuda) Limited
Victoria Place, 5
th
Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
International Branch Registrar
Link Market Services (Jersey) Limited
12 Castle Street, St Helier, JE2 3RT, Jersey, 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 Central, Sheung Wan, Hong Kong
Company’s Website
http://www.worldsec.com
WORLDSEC LIMITED
CONTENTS
Page
Chairman’s statement 1
Directors’ report 3
Statement of
d
irectors’ responsibilities 22
Independent auditor’s report 23
Consolidated statement of profit or loss and other comprehensive income 28
Consolidated statement of financial positio
n
29
Consolidated statement of chan
g
es in equit
y
31
Consolidated statement of cash flows 32
Notes to the consolidated financial statements 33
Investment polic
y
69
Bio
g
raphical notes of the directors 70
WORLDSEC LIMITED
Page 1
Chairman’s Statement
RESULTS AND REVIEW
During the year ended 31 December 2022, the audited consolidated loss of Worldsec Limited (the
“Company”) and its subsidiaries (together the “Group”) was US$843,000, compared with a profit of
US$636,000 in 2021. Loss per share was US0.99 cent (2021 earnings per share: US0.75 cent). Net asset
value per share was US6.4 cents (2021: US7.4 cents). Detailed discussion of the results and financial
position of the Group is set out in the directors’ report on pages 3 to 21.
As mentioned in the Company’s 2022 Interim Report, the Group made two new investments during the
year under review consisting of:
- 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 and
investment in a broad portfolio of products that includes blockchain games; and
- 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 Innovusion Holdings
Ltd. (“Innovusion”). 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.
With these new investments acquired during the year under review, the Group has expanded its
investment portfolio with an emphasis on the technology sector with a view to capturing the growth
opportunities that are expected to arise in the digital era.
PROSPECTS
With the general achievement of the target goals of vaccination coverage in major economies, coupled
with the progressive development of herd immunity around the world, the COVID-19 pandemic and the
spread of the coronavirus are widely considered to be under control. This has led to the uplifting of
nearly all lockdown measures. The disruptions caused by the COVID-19 pandemic will, however, have
a long-lasting impact on the global economy. In particular, there has been an acceleration in digital
transformation, which will have far-reaching implications for productivity and workforce requirements.
The risks and vulnerabilities inherent in the global supply chain, blatantly exposed during the COVID-
19 pandemic, have also given rise to heightened geopolitical tensions and protectionist and nationalistic
sentiments in the name of supply chain stability and security.
Notwithstanding the gradual subsiding of the COVID-19 pandemic, 2022 was a difficult year for
investors. Inflation surged to the highest level in decades and the aggressive and unprecedented interest
rate increases by governments in major economies caused both equity and bond prices to experience
double-digit declines. The recent collapse of a few banks has also added pressure in the banking and
financial sector making the fight for inflation more difficult and complicated. The continuing problems
of the global supply chain, the rising geopolitical tension between China and the West and the ongoing
Russia-Ukraine war mean that robust recovery for the world economy will remain elusive.
WORLDSEC LIMITED
Page 2
During the first quarter of 2023, private equity activities from seed to late stage investments slowed
across all sectors. Fundraising momentum carried from 2021 into 2022 has also softened even though
dry powder held in the private equity sector remained substantial. Valuations in general experienced
contractions for the first time in many years as cost of money rose. The value of the investment portfolio
of the Group has to a certain extent suffered accordingly. The underlying assets of the Group’s
investments and investee companies, which are mostly industrial or technology-based with products
largely aiming to embrace the quality of life of consumers in the digit era, should in the long-term benefit
from the economic development trending towards digitalisation and internet of things. The Group will
continue to explore opportunities under the changing megatrends and will make progress in expanding
and refining its investment portfolio in accordance with the Company’s investment policy.
NOTE OF APPRECIATION
I wish to thank my fellow directors and staff for their efforts and contributions made during the year
ended 31 December 2022. I would also like to extend a note of appreciation to shareholders for their
continued support of the Company.
Alastair Gunn-Forbes
Non-Executive Chairman
25 April 2023
WORLDSEC LIMITED
Page 3
DIRECTORS’ REPORT
The directors submit the annual report of the Company and the audited consolidated financial statements
of the Company and its subsidiaries for the year ended 31 December 2022.
PRINCIPAL ACTIVITIES
The principal activity of the Company is investment holding. The Company and its subsidiaries are
principally engaged in investment in unlisted companies in the Greater China and South East Asian
region.
RESULTS AND FINANCIAL POSITION
The audited consolidated loss of the Company and its subsidiaries for the year ended 31 December 2022
was US$843,000, compared with a profit of US$636,000 in 2021. Loss per share was US0.99 cent (2021
earnings per share: US0.75 cent). The loss was primarily due to the 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 year under review, the Group’s Investment in the ICBC Specialised Ship Leasing Investment
Fund (the “ICBC Shipping Fund”) continued to provide a stable return, generating dividend income
totalling US$96,000. In addition, there were dividends aggregated from its stock market investment
portfolio that amounted to US$97,000.
As at 31 December 2022, the net assets of the Group amounted to US$5.4 million (2021: US$6.3
million), equivalent to US6.4 cents per share (2021: US7.4 cents). Cash and cash equivalents declined
to US$0.5 million from US$1.5 million a year ago, reflecting basically the use of cash resources in
operating and investment activities.
Further details of the Group’s results and financial position are set out in the consolidated statement of
profit or loss and other comprehensive income on page 28, the consolidated statement of financial
position on page 29 and notes to the consolidated financial statements on pages 33 to 68.
The Board does not propose to declare any dividend for the year ended 31 December 2022 (2021: nil).
REVIEW
The Company is a closed-ended investment company with a premium listing under Chapter 15 of the
Listing Rules of the Financial Conduct Authority in the United Kingdom. In accordance with the
Company’s investment policy, a copy of which is set out on page 69, the investment strategy of the
Group focuses on investing in small to medium sized trading companies based mainly in the Greater
China and South East Asian region with a view to building a diversified portfolio of minority
investments in such companies. The investment objective of the Company is to achieve attractive
investment returns through capital appreciation on a medium to long term horizon. To spread the
investment risk of the Group, none of the Group’s investments at the time when made exceeded 20% of
its gross assets.
As at the date of this report, the investment portfolio of the Group, including the two new investments,
VS SPC with the sole underlying investment asset in an equity interest in Animoca and the Hermitage
Fund Twelve with the sole underlying investment asset in an equity interest in Innovusion, acquired
during the year under review, but excluding Agrios Global Holdings Ltd. (“Agrios”) and ayondo Ltd.
(“Ayondo”), the two investments that had previously been completely written off by the Group,
comprises a total of seven investments and investee companies.
WORLDSEC LIMITED
Page 4
DIRECTORS’ REPORT (CONTINUED)
ICBC Shipping Fund
The Group’s investment in the ICBC Shipping Fund, which is involved in marine vessel leasing,
continued to provide a stable contribution generating dividend income amounting to US$96,000.
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 amongst others, The Sandbox, a decentralised gaming virtual world.
Other key business units of the Animoca group consist of Animoca Brands KK, GAMEE, nWay,
Blowfish Studios, Grease Monkey Games, REVV Motorsport, TOWER, Quidd, Lympo, and Forj,
Pixowl, Helix Accelerator, Eden Games, Life Beyond Studios, Notre Game, TinyTap, Be Media,
PIXELYNX and WePlay Media. Animoca is also an active investor in Web3 projects with a broad and
growing portfolio of over 380 investments that includes OpenSea, a leading non-fungible token
marketplace, Axie Infinity, a popular Pokemon-inspired blockchain-based video game, and Dapper Labs,
the developer of CryptoKitties and NBA Top Shot.
Notwithstanding the crypto winter that saw the collapse of FTX, one of the largest cryptocurrency
exchange platforms, and the meltdown of Terra, one of the largest stablecoin ecosystems, the Animoca
group continues with its business-building trajectory:
• Taking advantage of the market weakness, the Animoca group has acquired and invested in a
multitude of crypto and crypto-related entities. At the same time, it has also established collaboration
with various strategic parties to further strengthen its presence in the Web3 space.
• The Animoca group has rolled out a series of non-fungible token (“NFT”) centric products. Of
particular note is the introduction of Mocaverse as its official profile picture (“FP”) NFT collection.
The Mocaverse NFT PFPs serve as membership passes for Animoca's team members, investors,
partners and designated token holders and are designed to empower the connections across the
ecosystem of the Animoca group and the Web3 community. In the first two days of trading on
OpenSea, the Mocaverse NFT PFP sales reached 3,552 ethers (US$5.5 million).
• To protect the interests of and to ensure the equitable distribution of value to creators of NFTs, the
Animoca group has launched a set of three NFT licenses. These licences, governed by and construed
in accordance with the laws of the State of New York, United States, require the payment of creator
royalties as a condition for personal, commercial or unlimited use of the NFTs. The protection of
the rights of NFT creators is believed to be essential for value creation in and hence the development
of the NFT industry.
• The Animoca group, jointly with LayerZero, have launched the LayerZero-Animoca Brands
Hackerhouse global initiative to advance cross-chain standards and interoperability of digital assets.
• The Sandbox, operated through a major subsidiary of Animoca that has been ranked as one of the
2022 TIME100 Most Influential Companies, has attracted more than 400 partners, including many
high-profile and well-known names, to join its metaverse. Over 170,000 virtual land parcels have
been developed and some 70% of these land parcels have been sold. The Sandbox is also planning
to introduce other location-based metaverses in Singapore, South Korea and Turkey
WORLDSEC LIMITED
DIRECTORS’ REPORT (CONTINUED)
Page 5
To cope with its business expansion, the Animoca group has appointed 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 business scaling and the chief financial officer to oversee
strategic financial planning.
The Animoca group, nonetheless, has not been immune to the crypto winter chill. With the plummet in
the prices of digital assets and the plunge in the trading of NFTs, the financials of the Animoca group
have inevitably been negatively impacted. There has also been financing outlay associated with its
business expansion. However, the Animoca group remained financially robust with a cash balance of
US$214 million as of November 1 2022 according to an open letter from the co-founder and executive
chairman of Animoca. In fact, despite the backdrop of the crypto winter, Animoca managed to hold
multiple successful fundraising events raising a total of $565 million and was the most funded metaverse
developer in 2022 as per Nasdaq Research.
As an active and key investor with a broad and growing portfolio of over 380 investments in the web3
space, Animoca has been recognised as one of the winners in the Venture Capital category of the
inaugural Fortune Crypto 40 in 2023. Being a major driving force behind the adoption of NFTs and the
metaverse, Animoca has also been selected by nft now as an honouree on the NFT100 2023 List. On top
of these honours in the crypto industry, the business expansion efforts of the Animoca group have further
been reflected by the rise of the ranking of Animoca from #324 in 2022 to #16 in 2023 in the High-
Growth Companies Asia-Pacific report compiled by the Financial Times and Statista.
ByteDance through the Homaer Asset Management Master Fund SPC (the “Homaer Fund”)
The Group holds an investment in the Unicorn Equity Investment Portfolio Class A Shares of 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 are available in over 150 markets and 75 languages and that
includes, amongst others, Douyin, Toutiao, TikTok, Xigua Video and Helo.
Notwithstanding the challenging environment under the continued pressure from the regulatory
authorities and the resurgence of new waves of the COVID-19 infections and hence the
reimplementation of the restriction measures from time to time in China, the ByteDance group managed
to achieve strong growth in financial performance in 2022. Revenue was widely reported to have soared
by over 30% year-on-year to more than US$80 billion on the back of increased advertising income from
Douyin and TikTok and earnings before interest, tax, depreciation and amortisation to have surged by
nearly 80% year-on-year to US$25 billion surpassing for the first time those of Alibaba and Tencent.
Under the challenging environment, however, the ByteDance group implemented significant cost cuts
and terminated certain riskier ventures in the gaming, education and venture investment sectors. Douyin
and TikTok, on the other hand, remain the jewels of the crown of the ByteDance group with lucrative
revenue streams.
Following the rebranding and reorganising of the individual shopfront format of Douyin Shops to the
marketplace approach of Douyin Mall, gross merchandise value (“GMV”) of the e-commerce business
of Douyin was reported to have increased by 76% year-on-year to US$208 billion in 2022. Local life
services have also been introduced in the mobile application platform, allowing users to order food, buy
sightseeing tickets, book hotels, participate in parent-child activities and sporting and fitness events with
the click of a direct link.
WORLDSEC LIMITED
DIRECTORS’ REPORT (CONTINUED)
Page 6
GMV of the e-commerce business of TikTok in Southeast Asia was reported to have increased four-fold
year-on-year to US$4.4 billion in 2022. TikTok Shop, the in-platform shopping feature of TikTok, has
also been launched in the United States and the United Kingdom, and there are plans for similar launches
in other countries including Brazil and Spain.
In spite of the mounting geopolitical challenges facing TikTok around the world, it remained the most
downloaded mobile application worldwide with 672 million downloads in 2022 according to Statista
and is estimated to have more than 1 billion monthly active users in over 150 countries. The average
user spend on the platform in terms of time was 95 minutes per day in the second quarter of 2022 based
on the findings of Sensor Tower and compared favourably with 74 minutes, 51 minutes, 49 minutes, 29
minutes and 21 minutes in the case of YouTube, Instagram, Facebook, Twitter and Snapchat respectively.
To further enhance its functionality, TikTok has added new features such as 10-minute videos, Search
Ads, TikTok Stories, TikTok Now, TikTok Music and Photo Mode, making it an all-in-one mobile
application for social media, messaging, services, payments and more.
Two other mobile applications of the ByteDance group have recently caught media attention in the
United States. CapCut, which provides a variety of user-friendly editing functions and is compatible for
use with TikTok, has hit more than 500 million downloads in Google Play Store. Lemon8, a content
sharing mobile application with the combined elements of Pinterest and Instagram, shot to the top 10 of
the App Store’s chart in late March 2023. As a leading developer in the mobile application space, the
ByteDance group does have the capability and resources to further solidify its market position in the
industry.
In September 2022, ByteDance offered to buy back up to US$3 billion of its own shares at a valuation
of US$300 billion, allowing early investors to cash out a portion of their gains. In March 2023, G42, an
artificial intelligence and cloud computing firm from Abu Dhabi, United Arab Emirates, and controlled
by the National Security Advisor of United Arab Emirates, acquired from the secondary market a
US$100m stake in ByteDance at a valuation reported to be US$220 billion.
Dingdong (Cayman) Limited (“Dingdong”)
The Group holds an investment in the American depositary shares of Dingdong (the “Dingdong ADS”).
Listed on the New York Stock Exchange, Dingdong is the holding company of a fresh grocery 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 fulfilment grid with about 60 regional processing centres and about 1,100 frontline fulfillment
stations on leased properties. The operations of the Dingdong group cover around 30 cities across China
including Beijing, Shanghai, Shenzhen, and Guangzhou.
Since the strategic shift to focus on opitimising operation efficiency and developing product capabilities,
including strengthening product competitiveness and refining product mix through the development of
private label and prepared food products, in the third quarter of 2021, followed by the strategic
withdrawal of operations from several lower-tier Chinese cities that required substantial time and
resources to build a meaningful presence, the Dingdong group had achieved significant improvement in
financial performance. According to the 2022 audited consolidated accounts of the Dingdong group,
while year-on-year growth in revenue moderated to a respectable 20%, non-GAAP net loss (considered
to be a better indicator of the underlying business trends by excluding the non-cash charges of share-
based compensation) narrowed from RMB6.1 billion in 2021 to RMB571 million in 2022. The
narrowing in non-GAAP net loss reflected the improvement in gross margin as a result of improved
product capabilities, the improvement in fulfillment efficiency driven by the increase in average order
value and improved frontline labour productivity as well as the reduction in sales and marketing
expenses on the back of improved brand awareness.
WORLDSEC LIMITED
DIRECTORS’ REPORT (CONTINUED)
Page 7
During the fourth quarter of 2022, the Dingdong group reached a new milestone delivering for the first
time a non-GAAP net income of RMB116 million
*. Net cash generated from operating activities
amounted to RMB682 million
*. With cash reserves including short-term investments totalling RMB6.5
billion at the end of 2022, the Dingdong group appears to have successfully evolved from a startup that
needed external financing a few years ago to a financially self-sustaining enterprise with the financial
capabilities to pursue continued business expansion in a highly competitive industry.
Because of the dispute on accounting firm inspection between the Chinese and the U.S. authorities,
Dingdong was one of the many China-based companies listed on an American securities exchange that
was subject to a potential risk of delisting. There was, however, a breakthrough in December 2022 when
the Public Company Accounting Oversight Board of the United States (the “U.S. PCAOB”), following
thorough and systematic testing and compliance verification, confirmed that complete access for the
inspection and investigation of accounting firms headquartered in mainland China and Hong Kong had
been secured. Accordingly, the Dingdong ADS will no longer be subject to the risk of trading prohibition
on the New York Stock Exchange. Nonetheless, the U.S. PCAOB emphasised that action will be taken
should access to accounting firm inspection be obstructed in any way and at any point in the future.
Notwithstanding the removal of the delisting risk and the significant improvement in financial
performance, the price of the Dingdong ADS has failed to move in tandem with the ameliorating
fundamentals of the Dingdong group and has remained under pressure. An impairment in the carrying
value of the Group’s investment in the Dingdong ADS has consequently been recognised for the year
ended 31 December 2022.
* based on the unaudited financial information published by Dingdong
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 is an equity interest in Innovusion.
Innovusion is an unlisted holding company of a technology group that specialises in the development of
image grade LiDAR sensor systems for the autonomous vehicle and advance driver-assistance system
markets. The Innovusion group has developed a product portfolio that includes both long-range front
view LiDARs and mid-to-short range side view LiDARs.
Falcon is an ultralong-range high-performance front-view LiDAR, with a detecting range of 500 metres,
including the detection of objects with 10% reflectivity up to 180 metres, and a horizontal field of view
of 120° and a vertical field of view of 25°. With ease of customisation and integration, it is the integrated
part of the standard sensor suite of the new ET7, ES7/EL7 and ET5 models introduced by Nio Inc.
(“Nio”) in 2022. Robin, on the other hand, is a mid-to-short range side view LiDAR with a detecting
range of objects with 10% reflectivity of up to 180 metres and a horizontal field of view of up to 140°
and a vertical field of view of up to 90°. With a modular design and an ultra-compact size, it can be
highly customised and integrated onto side fenders, headlamps, taillights and bumpers.
In March 2022, the Innovusion group began mass production of Falcon for the first of the three Nio’s
models, ET7, the electric flagship sedan of Nio. The respective launch of ES7/EL7, an electric sport
utility vehicle, and ET5, a mid-size electric sedan, subsequently followed. Riding on the increasing sales
of these models, the Innovusion group ramped up the production of Falcon. By the end of 2022, more
than 50,000 Falcon LiDAR units had been delivered. With the contribution from the sales of Falson, the
Innovusion group managed to accelerate the growth in revenue albeit from a low base.
WORLDSEC LIMITED
DIRECTORS’ REPORT (CONTINUED)
Page 8
As a prominent developer of LiDAR sensor systems, the Innovusion group entered into a cooperation
agreement with another major industry player. In May 2022, Innovusion formed a strategic alliance with
TuSimple Holdings, Inc. (“TuSimple”), an autonomous technology company from the United States, to
explore the integration of the LiDARs of the Innovusion group into TuSimple's self-driving trucks under
the unmanned port logistics and urban freight transport scenarios. The goal was to advance the
development and large-scale adoption of driverless technology for heavy truck freight in China.
At the 24th China Expressway Informatization Conference and Technology and Production Exposition
in July 2022, the Innovusion group announced the release of OmniSense CD2.0, a proprietary
holographic vehicle sensing solution. The proprietary sensing solution utilises in-house developed
graphic-level LiDAR and deep learning algorithm-based perception capabilities to detect and collect
real-time information of traffic flow, vehicle speed and other road conditions and is capable of
identifying vehicles that engage in improper or dangerous driving behaviours with a view to improving
transportation efficiency and safety.
In December 2022, Falcon was selected by Faraday Future Intelligent Electric Inc. ("Faraday"), a global
shared intelligent electric mobility ecosystem corporation from the United States, to be integrated into
the FF 91's autonomous driving system. In anticipation of the business from Nio and Faraday, the
Innovusion group is in the process of expanding its production capacity to 300,000 units of LiDARs per
annum.
Apart from attracting commercial interests, Falcon is also highly recognised in the trade having been
honoured with the 2023 CES Innovation Award, a recognition by the Consumer Technology Association
in the United States for outstanding design and engineering in consumer technology products, and won
the Tech.AD Europe Award 2023 in the Perception and Sensing category.
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 taken the opportunity to invest in and upgrade its technological capabilities during the worst of
the COVID-19 pandemic, the Velocity group has been particularly well placed to benefit from the
tailwind of recovery on the back of the gradual receding of the ill effects of the health crisis. In particular,
with the scrapping of most restriction measures, premium consumers looking for luxury lifestyle
activities and experiences that were sorely lacking under the lockdowns have provided a boost in the
demand for the services of the Velocity group. Meantime, the proprietary concierge automation software,
Gravity, continues to drive operation efficiency and productivity. Velocity Black, the consumer product
of the Velocity group, remains in demand as invitation for new membership has to be requested. Velocity
for Business, the enterprise product of the Velocity group, has on the other hand been reaping the
contributions from previously signed contracts the commencement of which had been delayed because
of the COVID-19 pandemic.
In March 2023, the Velocity group further expanded its experiences offer. Through the partnership with
Aston Martin Aramco Cognizant Formula One™ Team (the “Aston Martin Team”), Velocity Black
members will be offered VIP access to races and special events and to meet the drivers of the Aston
Martin Team.
Despite the encouraging development achieved by the Velocity group, based on the valuation of the
Velocity shares prepared by an independent valuer, an impairment in the carrying value of the Group’s
investment in Velocity has been recognised for the year ended 31 December 2022, reflecting the
depreciation in the British Pound Sterling and the decline in enterprise value to sales multiples of
comparable companies.
WORLDSEC LIMITED
DIRECTORS’ REPORT (CONTINUED)
Oasis Education Group Limited (“Oasis Education”)
Page 9
Oasis Education is a 50% joint venture of the Group. The operating subsidiary of Oasis Education, Oasis
Education Consulting (Shenzhen) Company Limited
(奧偉詩教育諮詢(深圳)有限公司, “Oasis
Shenzhen”), provides consulting and support services to the Huizhou Kindergarten in the Guangdong
Province of China.
Following the graduation of 58 pupils in the summer of 2022, the Huizhou Kindergarten enrolled 112
new pupils for the academic term that commenced in September 2022 and another 17 new pupils for the
academic term that commenced in February 2023, thus bringing its total pupil enrolment to a record
high of 315. The continued increase in total pupil enrolment is expected to have a positive impact on the
cash flow position of the Huizhou Kindergarten.
Because of the resurgence of new waves of the COVID-19 infections and hence the reimplementation
of the restriction measures, the Huizhou Kindergarten had to suspend in-person classes for around a
month, But the suspension did not prevent the kindergarten from providing quality online distance
learning experience with active interaction with and participation from its pupils. This has earned
favourable feedback from its pupils and their parents.
In December 2021, the Huizhou Kindergarten made a repayment of RMB400,000 to Oasis Shenzhen to
retire part of its borrowings which were related to the set-up costs incurred at the time when the
kindergarten was established. It is expected that another repayment will be made in 2023.
Agrios
Please refer to the Company’s 2021 Annual Report and 2022 Interim Report.
The Group’s investment in Agrios had been completely written off in its financial statements for the
year ended 31 December 2020.
Ayondo
Please refer to the Company’s 2021 Annual Report and 2022 Interim Report.
The Group’s investment in Ayondo had been completely written off in its financial statements for the
year ended 31 December 2020.
PROSPECTS
According to the World Economic Outlook report published by the International Monetary Fund in April
2023, global economic growth is forecasted to fall from 3.4% in 2022 to 2.8% in 2023 and the
corresponding figures for the advanced economies are projected to slow from 2.7% to 1.3%. Global
headline inflation is expected to remain high at 7.0% in 2023 despite a small decline from 8.7% in 2022
due to lower commodity prices. The aggressive increases in interest rates have started to put pressure on
corporations with high levels of debts and in particular on their cash flow management. Policy makers
are facing the conundrum as to how best to balance fiscal and monetary measures to ensure economic
growth and stability especially in the financial system.
Despite the prevailing uncertain economic environment and the ongoing Russia-Ukraine war, the
leading stock markets of the world had shown remarkable resilience during the first quarter of 2023.
Apart from market liquidity, perhaps the anticipation of the decline in inflation rate, albeit at a slow
pace, has induced positive confidence amongst investors. The same could be true for private equity
investments. Given the sheer level of dry powder, private equity investors view the contracting
valuations as buying opportunities and competition for quality deals are expected to remain vigorous
and intense.
WORLDSEC LIMITED
Page 10
DIRECTORS’ REPORT (CONTINUED)
In the developing countries, the story is somewhat different. Notably, the growth in the Chinese
economy is forecasted to accelerate to between 5% and 5.5% in 2023. The implementation of the
dynamic zero-COVID policy, the regulatory crackdown on the Internet and technology companies and
the tightening of credits to the real estate sector had over the past few years restrained domestic aggregate
demand with inflation remaining under control. But with the strategic shift in the pandemic management
approach and the uplifting of lockdown measures, the Chinese economy is expected to be revitalised
and regain momentum and, in the absence other economic shocks, to progressively resume its long-term
growth trend. Under the relatively tame inflationary environment, the Chinese government has launched
and is expected to further introduce stimulus measures to expand economic activities with emphasis
targeting the technology, infrastructure, clean energy, semiconductor, healthcare and consumer sectors.
Amongst the Group's underlying investment assets, Bytedance, and Innovusion, as well as its
investments in Dingdong and Oasis Education are likely to benefit from these measures as their
operations are mainly China-focused with certain of them having favourable exposure to the targeted
sectors. Meanwhile, in spite of the sharp increases in interest rates, the ICBC Ship Fund will continue
to provide an attractive and stable dividend contribution to the Group, while Velocity and Animoca are
well-placed to benefit from the acceleration in the digital transformation and the shift in consumer
behaviours towards online channels brought about by the COVID-19 pandemic.
DIRECTORS
The directors during the year under review and up to the date of this report were and are:
Non-Executive Chairman
Alastair Gunn-Forbes*
Executive Directors
Henry Ying Chew Cheong
Ernest Chiu Shun She
Non-Executive Directors
Mark Chung Fong*
Martyn Stuart Wells*
Stephen Lister d’Anyers Willis*
* independent
Brief biographical notes of the directors serving at the date of this report are set out on pages 70 to 72.
Save as disclosed in this report and in note 26 to the consolidated financial statements on page 67, none
of the directors had during the year under review or at the end of the year a material interest, directly or
indirectly, in any contract of significance with the Company or any of its subsidiaries.
Messrs Alastair Gunn-Forbes, Mark Chung Fong and Martyn Stuart Wells have served on the Board for
more than nine years. (In accordance with Provision 21 of the UK Corporate Governance Code on
corporate governance published in July 2018 by the Financial Reporting Council of the United Kingdom
(the “Code”), Messrs Alastair Gunn-Forbes, Mark Chung Fong and Martyn Stuart Wells retired by
rotation and were re-elected to office by separate resolutions passed at the Annual General Meeting held
on 11 November 2022). During the past ten year period, however, none of them has had any major
interest in the issued share capital of the Company, has been an employee or involved in the daily
management of any of the Group companies, or has had any material relationship with any of the Group
companies or any of the major shareholders or managers of any such companies other than being a
member of the Board. Accordingly, and in accordance with Provision 10 of the Code, the Board has
determined that their independence and objectivity have not been impaired and that they will therefore
be able to continue to act independently in character and judgement.
WORLDSEC LIMITED
DIRECTORS’ REPORT (CONTINUED)
Page 11
At the Annual General Meeting held on 29 September 2014, shareholders approved the inclusion of the
Group’s non-executive directors as eligible participants of the Worldsec Employee Share Option
Scheme 1997 (the “Scheme”). As explained in the 2014 annual report of the Company, the reason for
such inclusion was to enable the Group to reward its non-executive directors for their commitments to
the Company beyond the nominal annual fees that the Group could afford to pay during its development
stage. Accordingly, and in accordance with Provision 10 of the Code, given that such circumstances
have basically remained unchanged as the Group has yet to make a profit on a consistent basis, the Board
has determined that the participation of Messrs Alastair Gunn-Forbes, Mark Chung Fong, Martyn Stuart
Wells and Stephen Lister d’Anyers Willis in the Scheme will not affect their ability to act independently
in character and judgement.
DIRECTORS’ INTERESTS
The interests of the individuals who were directors during the year under review in the issued share
capital of the Company, including the interests of persons connected with a director (within the meaning
of Sections 252, 253 to 255 of the United Kingdom Companies Act 2006 as if the Company were
incorporated in England), the existence of which was known to, or could with reasonable diligence be
ascertained by, that director, whether or not held through another party, were as follows:
Note: Mr Henry Ying Chew Cheong (“Mr Cheong”) wholly owns HC Investment Holdings Limited (“HCIH”). HCIH
beneficially owned 20,000,000 ordinary shares of US$0.001 each in the Company at 1 January 2022 and 31
December 2022, respectively.
In total, Mr Cheong and his associates were the legal and beneficial owners of 31,722,620 ordinary shares of
US$0.001 each in the Company, representing 37.3% of the Company’s issued share capital, at 1 January 2022
and 31 December 2022, respectively. The Company and Mr Cheong entered into a relationship agreement on 2
August 2013 (the “Relationship Agreement”). Pursuant to the Relationship Agreement, Mr Cheong has agreed
to exercise his rights as a shareholder at all times, and to procure that his associates exercise their rights, so as
to ensure that the Company is capable of carrying on its business independently of Mr Cheong or any control
which Mr Cheong or his associates may otherwise be able to exercise over the Company. Moreover, Mr Cheong
has undertaken to ensure, so far as he is able to, that all transactions, relationships and agreements between Mr
Cheong or his associates and the Company or any of its subsidiaries are on arms’ length terms on a normal
commercial basis. Mr Cheong and the Company have also agreed, amongst other things, that he will not
participate in the deliberations of the Board in relation to any proposal to enter into any commercial
arran
g
ements with Mr Cheon
g
or his associates.
At 1 January 2022
At 31 December 2022
No. of share options (Note)
No. of share options (Note)
Alastair Gunn-Forbes 850,000
850,000
Henry Ying Chew Cheong 850,000
850,000
Mark Chung Fong 850,000
850,000
Ernest Chiu Shun She 850,000
850,000
Martyn Stuart Wells 850,000
850,000
Stephen Lister d’Anyers Willis Nil
Nil
At 1 January 2022
At 31 December 2022
No. of shares
No. of shares
Alastair Gunn-Forbes 45,000
45,000
Henry Ying Chew Cheong (Note i) 11,722,620
11,722,620
Mark Chung Fong Nil
Nil
Ernest Chiu Shun She 550,095
550,095
Martyn Stuart Wells Nil
Nil
Stephen Lister d’Anyers Willis 16,000
16,000
WORLDSEC LIMITED
DIRECTORS’ REPORT (CONTINUED)
Page 12
Note: 500,000 of the share options granted on 1 Dece
m
b
er 2015 entitle the holders to subscribe on a one for one basis
new ordinary shares of US$0.001 each in the Company at an exercise price of US$0.122 per share. These share
options vested six months from the date of grant and were then exercisable within a period of 9.5 years. 350,000
of the share options granted on 29 May 2019 entitle the holders to subscribe on a one for one basis new ordinary
shares of US$0.001 each in the Company at an exercise price of US$0.034 per share. These share options
vested six months from the date of
g
rant and were then exercisable within a
p
eriod of 9.5
y
ears.
Subsequent to the year end on 20 February 2023, the Company granted 350,000 share options to Mr.
Willis to subscribe on a one for one basis new ordinary shares of US$0.001 each in the Company at an
exercise price of US$0.034 per share under the Scheme. The share options vested six months from the
date of grant and were then exercisable within a period of 9.5 years.
Save as disclosed above, none of the above-named directors had an interest, whether beneficial or non-
beneficial, in any shares or debentures of any Group companies at the beginning or at the end of the year
under review. Save as disclosed above, none of the above-named directors, or members of their
immediate families, held, exercised or were awarded any right to subscribe for any shares or debentures
of any Group companies during the year.
The Board confirms that (i) the Company has complied with the independence provisions set out in the
Relationship Agreement since it was entered into; and (ii) so far as the Company is aware, Mr Cheong
and his associates have complied with the independence provisions set out in the Relationship
Agreement since it was entered into.
DIRECTORS’ REMUNERATION
The remuneration of the directors for the year ended 31 December 2022 was as follows:
Fees
Share-based
payment expenses
Other
emoluments
Total
US$’000 US$’000 US$’000 US$’000
Alastair Gunn-Forbes 12.0 - - 12.0
Henry Ying Chew Cheong 12.0 - - 12.0
Mark Chung Fong 12.0 - - 12.0
Ernes
t
Chiu Shun She 12.0 - - 12.0
Martyn Stuart Wells 12.0 - - 12.0
Stephen Lister d’Anyers Willis 12.0 - - 12.0
72.0 - - 72.0
PROVIDENT FUND AND PENSION CONTRIBUTIONS FOR DIRECTORS
During the year under review, there was no provident fund and pension contributions for the directors.
LETTERS OF APPOINTMENT/SERVICE CONTRACTS
Messrs Alastair Gunn-Forbes, Mark Chung Fong and Martyn Stuart Wells, each has entered into a letter
of appointment with the Company dated 28 November 2017, and Mr Stephen Lister d’Anyers Willis
has entered into a letter of appointment with the Company dated 3 June 2019, to serve as non-executive
director. Each of them is entitled to a fee of £10,000 per annum. The appointment may be terminated on
one month notice in writing.
WORLDSEC LIMITED
DIRECTORS’ REPORT (CONTINUED)
Page 13
Messrs Henry Ying Chew Cheong and Ernest Chiu Shun She, each has entered into a letter of
appointment with the Company dated 2 August 2013 to serve as executive director. Each of them is
entitled to a fee of £10,000 per annum. The appointment may be terminated on not less than six month
notice in writing.
All directors are eligible to participate in the Group’s bonus arrangements under which bonuses may be
granted at the discretion of the Remuneration Committee and the Board. No bonus was recommended
for the year ended 31 December 2022.
Save as disclosed above, there are no existing or proposed letters of appointment or service contracts
between any of the directors and the Company or any of its subsidiaries which cannot be determined
without payment of compensation (other than any statutory compensation) within one year.
MAJOR INTERESTS IN SHARES
At 14 March 2023, the Company was aware of the following direct or indirect interests representing 5%
or more of the Company’s issued share capital:
No. of shares
Percentage of
issued share capital
HC Investment Holdings Limited (Note i) 20,000,000 23.5%
Yue Wai Keung 4,837,500 5.7%
Luis Chi Leung Tong 5,000,000 5.9%
Henry Ying Chew Cheong 11,722,620 13.8%
Aurora Nominees Limited (Note ii) 18,770,000 22.1%
Vidacos Nominees Limited (Note ii) 5,504,534 6.5%
Notes: (i) Mr Cheong is the legal and beneficial owner of the entire issued share capital of HCIH.
(ii) Aurora Nominees Limite
d
and Vidacos Nominees Limited act as custodians for their customers, to whom they
effectively pass all rights and entitlements, including voting rights.
INTERNAL CONTROL, RISK MANAGEMENT AND FINANCIAL REPORTING
The Board is responsible for establishing and maintaining appropriate systems of internal control and
risk management to safeguard the Group’s interests and assets. The control measures that have been put
in place cover key areas of operations, finance and compliance and aim to manage rather than eliminate
risks that are inherent in the running of the business of the Group. Accordingly, the Group’s
systems of internal control and risk management are expected to provide reasonable but not absolute
assurance against material misstatements, loss or fraud.
Amongst the control measures, the key steps that have been put in place include:
- the setting of the investment strategy and the approval of significant investment decisions of the
Group by the Board to ensure consistency with the investment objective and compliance with the
investment policy of the Company;
- the segregation of duties between the investment management and accounting functions of the
Group;
- the adoption of written procedures in relation to the operations of the bank accounts of the Group;
WORLDSEC LIMITED
DIRECTORS’ REPORT (CONTINUED)
Page 14
- the adoption of written procedures to deal with conflicts of interests and related party transactions;
- the maintenance of proper accounting records providing with reasonable accuracy at any time
information on the financial position of the Group;
- the review by the Board of the management accounts of the Group on a regular basis; and
- the engagement of external professionals to carry out company secretarial works for the Company
and to assist the Group on compliance issues.
The Board considers the identification, evaluation and management of the principal risks faced by the
Group under the changing environment to be an ongoing process and has kept under regular review the
effectiveness of the Group’s systems of internal control and risk management. The Board is satisfied
that the arrangements that have been put in place represent an appropriate framework to meet the internal
control and risk management requirements of the Group.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board considers that the principal risks and uncertainties that are relevant to the Group include:
Target market risk
Under the investment policy of the Company, the Group focuses on investing in small to medium sized
trading companies based mainly in the Greater China and South East Asian region. Consequently, a
sharp or prolonged downturn in the economic environment or a heightened uncertainty in the political
environment in these target markets could adversely and seriously affect the underlying investments of
the Group. This is clearly a risk factor beyond the Group’s control. Nevertheless, in line with the
investment policy of the Company, the Board would seek to invest in and maintain a diversified portfolio
in order to spread the investment risk of the Group.
Investment opportunity risk
Despite the sharp tightening in monetary policies and the aggressive increases in intertest rates across
major economies to control spiralling inflation, investment capital and dry powder accumulated by the
private equity sector during the ultra-low interest rate era remain abundant. Under such an environment,
competition for quality deals, particularly under contracting valuations, is expected to continue to be
vigorous and intense. This would limit the availability of attractive investment opportunities for the
Group. However, the Company has maintained a broadened investment policy. This would offer greater
flexibility for the Group to make investment choices from a broader range of opportunities to achieve
the Company’s investment objective.
Key person risk
As the Group does not engage any external investment manager, the Board is responsible for overseeing
the Group’s investment management activities with frontline management duties delegated to the
executive directors. The Group is therefore heavily dependent on the executive directors’ abilities to
identify and evaluate investment targets, execute and implement investment decisions, monitor
investment performance and execute and implement exit decisions. Both of the executive directors,
Messrs Henry Ying Chew Cheong and Ernest Chiu Shun She, have entered into a letter of appointment
with the Company with a termination clause of not less than six month notice. Moreover, Mr Cheong is
also the deputy chairman and a major shareholder beneficially holding a substantial interest in the
Company’s issued share capital.
WORLDSEC LIMITED
Page 15
DIRECTORS’ REPORT (CONTINUED)
Operational risks
The Group is exposed to various operational risks that are inherent in the running of its business,
including, amongst others, the failure to comply with the investment policy of the Company, the failure
to prevent misstatements, loss or fraud due to inadequacies in the Group’s internal operational processes,
and the failure to comply with applicable rules and regulations by the Group. As mitigating measures,
the Board has established and maintained systems of internal control and risk management to safeguard
the Group’s interests and assets, details of which are set out in the section headed “Internal Control, Risk
Management and Financial Reporting” on pages 13 to 14.
Financial risks
The Group is exposed to a variety of financial risks, including market risks, credit risk and liquidity risk,
which arise from its operating and investment management activities. The Group’s management of such
risks is coordinated at the office of Worldsec Investment (Hong Kong) Limited, the principal operating
subsidiary of the Group, in close cooperation with the Board. Details of the Group’s approach on
financial risk management are described in note 5(b) to the consolidated financial statements on pages
50 to 54.
COVID-19 pandemic risk
After battling with the COVID-19 pandemic for some three years, the world has progressively returned
to normality, or rather, settling down in a new normal under the legacies of the health crisis that include
a profound change in the daily lives of a vast proportion of the population across the globe. While
corporate global is back in business, economic and business activities remain under the threats of the
coronavirus. As an investment holding company, the Company has through its subsidiaries invested in
various business sectors in different regional markets and would not be immune to the long COVID-19
effects as the resurgence of new waves of infections and the emergence of new variants are expected
from time to time. Nevertheless, with the the acceleration in the digital transformation and the shift in
consumer behaviours towards online channels brought about by the COVID-19 pandemic, certain of the
investee companies and investments of the Group could take advantage of any adverse situations as
opportunities to advance and expand their business.
VIABILITY STATEMENT
The directors have assessed the viability of the Company for the three years to 31 December 2025.
The directors consider that, for the purposes of this viability statement, a three year period is appropriate
taking into account the Group’s investment horizon under its investment strategy. Besides, there should
unlikely be any significant change to most of the principal risks and uncertainties facing the Group over
the timeframe selected for the assessment.
In assessing the viability of the Company and its ability to meet liabilities as they fall due, the directors
have taken into consideration, amongst others:
- the investment strategy of the Group;
- the current position including the existing financial status and cost structure of the Group;
- the prospects of and the industry outlook for the Group;
- the economic and political environment of the Greater China and South East Asian region, the
primary target markets in which the Group focuses its investment; and
- the potential adverse impact of the principal risks and uncertainties facing the Group and the
effectiveness of the mitigating measures that have been put in place, details of which are described
in the section headed “Principal Risks and Uncertainties” on pages 14 to 15.
WORLDSEC LIMITED
Page 16
DIRECTORS’ REPORT (CONTINUED)
The directors note, in particular, that the Group:
- has a liquid amount of unrestricted cash and bank balances;
- does not have any borrowings;
- does not have any commitments other than certain leases with modest lease liabilities; and
- has low operating expenses with a small but stable team under stringent cost control.
Accordingly, the directors are confident that the Company will be able to continue in operation and meet
its liabilities as they fall due over the assessment period.
GOING CONCERN
After making careful enquiries, the directors have formed a judgement, at the time of approving the
consolidated financial statements of the Company and its subsidiaries for the year ended 31 December
2022, that there was a reasonable expectation that the Group would have adequate resources to carry out
its operations for a period of at least twelve months from the date of approving the consolidated financial
statements. For this reason, the directors have adopted the going concern basis in preparing the
consolidated financial statements.
CORPORATE GOVERNANCE
As a company with a premium listing on the Main Market of the London Stock Exchange, its business
is subject to the principles contained in the Code, a copy of which is available on the website of the
Financial Reporting Council of the United Kingdom. The Board confirms that, throughout the
accounting period from 1 January to 31 December 2022, the Group complied with the relevant
provisions of the Code, apart from certain exceptions set out and explained below.
The Board, comprising a non-executive chairman, three non-executive directors and two executive
directors, is committed to maintaining a high standard of corporate governance. All non-executive
directors are considered by the Board to be independent of management and free from any business or
other relationship which could materially interfere with the exercise of their independent judgement. All
directors are able to take independent professional advice in furtherance of their duties, if necessary.
The Board is responsible for establishing strategic directions and setting objectives for the Company
and making significant investment decisions and monitoring the performance of the Group. The
management is responsible for the day to day running of the Group’s operations.
BOARD MEETING
The Board held four meetings during the year under review and the table below gives the attendance
record.
Director
Board Meeting
Alastair Gunn-Forbes 4/4
Henry Ying Chew Cheong 4/4
Ernest Chiu Shun She 4/4
Mark Chung Fong 4/4
Mar
t
yn Stuart Wells 4/4
Stephen Lister d’Anyers Willis 4/4
WORLDSEC LIMITED
Page 17
DIRECTORS’ REPORT (CONTINUED)
Although the Board notes the requirement for a Nomination Committee (Provision 17 of the Code) to
make recommendations to the Board on all new board appointments and to reassure shareholders of the
suitability of a chosen director, the Board considers that, due to its small size and limited level of
activities, it is not necessary to establish such a committee. The Board as a whole remains responsible
for ensuring that a transparent, formal and rigorous process would be followed for any future board
appointments, which would be made following a full review of the Board’s balance of skills, experience,
independence and knowledge. Any future recruitment process would also provide an opportunity to
improve the diversity of the Board. The Board is satisfied that appropriate succession planning is in
place for appointments to both the Board and senior management.
Again, due to its small size and limited level of activities, the Board has not appointed a senior
independent director and did not consider an annual self-evaluation to be required during the year under
review. The responsibilities normally rested with a senior independent director have been reverted to
the Board as a whole. These decisions will be re-considered annually by the Board.
The Board established both an Audit Committee and a Remuneration Committee upon the re-activation
of the Group’s business in 2013. Details of these committees are set out below.
AUDIT COMMITTEE
The Audit Committee held two meetings during the year under review and the table below gives the
attendance record.
Director
Audit Committee Meeting
Mark Chung Fong 2/2
Martyn Stuart Wells 2/2
Stephen Lister d’Anyers Willis 2/2
The Audit Committee is chaired by Mr Mark Chung Fong and its other current members are Messrs
Martyn Stuart Wells and Stephen Lister d’Anyers Willis. The Audit Committee is appointed by the
Board and the committee’s membership is comprised wholly of non-executive directors.
The terms of reference of the Audit Committee (copies of which are available at the Company’s
registered office and the Company’s website) generally follow, where applicable, those stated in the
provisions of the Code.
The Audit Committee meets a minimum of two times a year and may be convened at other times if
required. The responsibilities of the Audit Committee include, amongst others, the examination and
review of the Group’s risk management, internal financial controls and financial and accounting policies
and practices, as well as overseeing and reviewing the work of the Company’s external auditor, their
independence and the fees paid to them.
During the year under review, the activities undertaken by the Audit Committee in discharge of its duties
and functions included (i) the review and recommendation to the Board of the reappointment of BDO
Limited as the Company’s external auditor; (ii) the review and recommendation to the Board for
approval of the annual report of the Company and the consolidated financial statements of the Company
and its subsidiaries for the year ended 31 December 2021; and (iii) the review and recommendation to
the Board for approval of the interim report of the Company and the unaudited consolidated financial
statements of the Company and its subsidiaries for the six months ended 30 June 2022. In recommending
the reappointment of BDO Limited, the Audit Committee has taken into consideration, amongst others,
BDO Limited’s independence, objectivity and terms of engagement.
WORLDSEC LIMITED
Page 18
DIRECTORS’ REPORT (CONTINUED)
Subsequent to the year end, the activities that have been undertaken by the Audit Committee in relation
to 2022 included (i) the review and recommendation to the Board of the annual report of the Company
and the consolidated financial statements of the Company and its subsidiaries for the year ended 31
December 2022; (ii) the monitoring of the effectiveness of the Group’s risk management and internal
financial controls; and (iii) the assessment of the effectiveness of the external audit process through
feedback from the management involved in the audit and through interactions with and observations and
review of the level of audit services provided.
As the scale of the operations of the Group remains relatively insubstantial, the Board has decided and
the Audit Committee concurs that it would not be necessary or cost-effective to set up an internal audit
function.
In connection with the review of the consolidated financial statements of the Company and its
subsidiaries for the year ended 31 December 2022, the Audit Committee has identified and reviewed
two issues which it considered significant and details on these matters are set out in the table below.
Significant Reporting Issue
Review and Assessment
Impairment review of the Group’s interests in
respect of its 50% owned joint venture, Oasis
Education – At 31 December 2022, the Group
had an equity interest of US$71,000 in and an
amount of US$257,000 due from Oasis
Education. These carrying amounts were
significant in the Group’s context and their
valuations were subject to judgements,
estimation uncertainties and assumptions.
The Audit Committee has (i) reviewed the
operational and financial performance and the
latest development of Oasis Education and its
subsidiary; and (ii) assessed the assumptions
underlying the cash flow projection for Oasis
Education and its subsidiary as well as the
reliability of such projection by comparing
relevant historic budgets with actual results.
Valuation of investments classified as financial
assets at fair value through profit or loss
(“FVTPL”) categorised within level 3 of the fair
value hierarchy – At 31 December 2022, the
Group had interests in the ICBC Shipping Fund,
Animoca, the Homaer Fund, Innovusion,
Velocity, Agrios and Ayondo, all of which were
accounted for as financial assets at FVTPL
categorised within the level 3 of the fair value
hierarchy, totalling US$4,372,000 and carried at
fair value. These carrying amounts were
significant in the Group’s context and their
valuations were subject to judgements,
estimation uncertainties and assumptions.
The Audit Committee has (i) reviewed the
operational and financial performance and the
latest development of the financial assets at
FVTPL categorised within level 3 of the fair
value hierarchy; and (ii) reviewed the
valuation findings prepared by the
management and in the case of Velocity by an
independent valuer and discussed with the
management and the independent valuer the
methodologies, assumptions and input
parameters used in relation to such valuation.
BDO Limited was appointed as the external auditor of the Company in February 2015, since when audit
services have not been tendered competitively. The Audit Committee has concluded that a competitive
tender of audit services is not necessary at this time, but acknowledges that circumstances could arise
where a competitive tender for audit services may be desirable. The performance of BDO Limited as
the Company’s external auditor will be kept under annual review, and if satisfactory, BDO Limited will
be recommended by the Audit Committee for reappointment. There are, however, no contractual
obligations that would restrict the Audit Committee’s choice of external auditor for the Company.
WORLDSEC LIMITED
DIRECTORS’ REPORT (CONTINUED)
Page 19
As advised by the Audit Committee and concurred with by the Board, the annual report of the Company
and the audited consolidated financial statements for the year ended 31 December 2022, taken as a
whole, is fair, balanced and understandable and provides the information necessary for shareholders to
assess the Group’s position and performance, business model and strategy.
REMUNERATION COMMITTEE
In accordance with Provision 32 of the Code, the Company has set up a Remuneration Committee. The
Remuneration Committee held one meeting during the year under review and the table below gives the
attendance record.
Director
Remuneration Committee Meeting
Martyn Stuart Wells 1/1
Alastair Gunn-Forbes 1/1
Mark Chung Fong 1/1
Stephen Lister d’Anyers Willis 1/1
The Remuneration Committee is chaired by Mr Martyn Stuart Wells and its other current members are
Messrs Alastair Gunn-Forbes, Mark Chung Fong and Stephen Lister d’Anyers Willis. The
Remuneration Committee is appointed by the Board and the committee’s membership is comprised
wholly of non-executive directors.
The terms of reference of the Remuneration Committee (copies of which are available at the Company’s
registered office and the Company’s website) generally follow, where applicable, those stated in the
provisions of the Code. They provide for the Remuneration Committee to meet at least two times a year.
However, as the Group has a very small and stable workforce, the Remuneration Committee did not
consider it meaningful or necessary to hold more than one meeting during the year under review.
The Remuneration Committee’s responsibilities include, amongst others, the evaluation of the
performance of the executive directors and senior staff, and the comparison of the Group’s remuneration
policy with similar organisations in the market to form the basis for the recommendations to the Board
to determine the remuneration packages, which may include the grant of share options under the Scheme,
for individual staff and director members.
In accordance with the Main Principle of Provision Q of the Code, no director has been involved in
deciding his own remuneration.
During the year under review, the activities undertaken by the Remuneration Committee in discharge of
its duties and functions included the review of and recommendation to the Board to retain the Group’s
previous remuneration arrangements.
WORLDSEC LIMITED
Page 20
DIRECTORS’ REPORT (CONTINUED)
WORLDSEC EMPLOYEE SHARE OPTION SCHEME 1997
The following table discloses the movements of the outstanding share options under the Scheme during
the year under review.
Number of options
Grantee
Exercisable
period
Balance
at 1
January
2022
Granted
during
the year
Exercised
during
the year
Forfeited
during
the year
Lapsed
during
the
year
Balance
at 31
December
2022
Exercise
price
per
share
(US$)
Directors 29
November
2019 to 28
May 2029
1,750,000
-
-
-
-
1,750,000
0.034
1 June 2016
to 30
November
2025
2,500,000
-
-
-
-
2,500,000
0.122
Employees 29
November
2019 to 28
May 2029
300,000
-
-
-
-
300,000
0.034
1 June 2016
to 30
November
2025
450,000
-
-
- -
450,000
0.122
5,000,000 - - - - 5,000,000
Subsequent to the year end on 20 February 2023, the Company granted 350,000 share options to Mr.
Willis to subscribe on a one for one basis new ordinary shares of US$0.001 each in the Company at an
exercise price of US$0.034 per share under the Scheme. The share options vested six months from the
date of grant and were then exercisable within a period of 9.5 years.
Further details relating to the granting of the share options are set out in note 25 to the consolidated
financial statements on pages 66 to 67.
RELATION WITH SHAREHOLDERS
Communication with shareholders is given high priority. Information about the Group’s activities is
provided in the annual report and the interim report of the Company which are sent to shareholders each
year and are available on the website of the Company. All shareholders are encouraged to attend the
Annual General Meeting at which directors are introduced and available for questions. Enquiries are
dealt with in an informative and timely manner. Directors, including non-executive directors, are also
available to meet with major shareholders on request.
WORLDSEC LIMITED
Page 21
DIRECTORS’ REPORT (CONTINUED)
EXTERNAL AUDITOR
The consolidated financial statements of the Company and its subsidiaries for the year ended 31
December 2022 have been audited by BDO Limited.
A resolution will be submitted to the next Annual General Meeting to reappoint BDO Limited as the
Company’s external auditor.
‘
On behalf of the Board
Henry Ying Chew Cheong
Executive Director
25 April 2023
WORLDSEC LIMITED
Page 22
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are required under the Bermuda Companies Act 1981 to prepare consolidated financial
statements for each financial year. The directors acknowledge responsibility for the preparation of the
consolidated financial statements for the year ended 31 December 2022, which give a true and fair view
of the financial position of the Group as at the end of that financial year and of the financial performance
of the Group for that year and which provide the necessary information for shareholders to assess the
business activities and performance of the Group during that year. In preparing these consolidated
financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether the consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union; and
- prepare the consolidated financial statements on a going concern basis unless it is inappropriate
to presume that the Group will continue in business.
The directors confirm that the above requirements have been met.
The directors are responsible for keeping proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Group. They are also responsible for the Group’s
system of internal financial controls, for safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of frauds and other irregularities.
The directors further confirm that, to the best of their knowledge and understanding, the chairman’s
statements on pages 1 to 2 and the directors’ report on pages 3 to 21 include a fair review of the
development and performance of the business and the position of the Company and its subsidiaries taken
as a whole together with a description of the principal risks and uncertainties that they face.
On behalf of the Board
Henry Ying Chew Cheong
Executive Director
25 April 2023
WORLDSEC LIMITED
Page 23
INDEPENDENT AUDITOR’S REPORT __________________________________________________
TO THE MEMBERS OF WORLDSEC LIMITED
(incorporated in Bermuda with limited liability)
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
OPINION
We have audited the consolidated financial statements of Worldsec Limited (the “Company”) and its
subsidiaries (together the “Group”) set out on pages 28 to 68, which comprise the consolidated statement
of financial position as at 31 December 2022, and the consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, and notes to the consolidated financial statements, including a
summary of significant accounting policies.
In our opinion, the consolidated financial statements give a true and fair view of the consolidated
financial position of the Group as at 31 December 2022, and of its consolidated financial performance
and its consolidated cash flows for the year then ended in accordance with International Financial
Reporting Standards as adopted by the European Union.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our
responsibilities under those standards are further described in the “Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements” section of our report. We are independent of the Group
in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (the “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 judgement, 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.
IMPAIRMENT ASSESSMENT OF INTEREST IN A JOINT VENTURE AND AMOUNT DUE
FROM A JOINT VENTURE
Refer to note 17 to the consolidated financial statements
The Group owns a 50% interest in a joint venture, Oasis Education Group Limited (“Oasis Education”),
which is accounted for using the equity method less any impairment loss. The interest in this joint
venture amounted to approximately US$71,000 as at 31 December 2022 and the Group’s share of its
losses amounted to approximately US$2,000 for the year then ended.
In addition, the Group has advanced an amount of approximately US$257,000 to Oasis Education as at
31 December 2022, which is subject to an impairment assessment by management.
The impairment assessment of investment in, and amount due from, Oasis Education is considered by
us as a key audit matter due to significant judgement made by management over the assumptions on the
future cash flows to be generated from the operation of Oasis Education.
WORLDSEC LIMITED
Page 24
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
TO THE MEMBERS OF WORLDSEC LIMITED
(incorporated in Bermuda with limited liability)
KEY AUDIT MATTERS (CONTINUED)
IMPAIRMENT ASSESSMENT OF INTEREST IN A JOINT VENTURE AND AMOUNT DUE
FROM A JOINT VENTURE (CONTINUED)
Our response:
Our audit procedures in relation to this matter included:
Obtaining an update of the latest development of Oasis Education’s operation;
Assessing the financial performance of Oasis Education based on information provided by
management;
Evaluating management’s considerations of the impairment indicators of the investment in, and the
amount due from, Oasis Education;
Assessing the appropriateness of the management’s assumptions concerning the future cash flows
to be generated from the operation of Oasis Education; and
Assessing reliability of the joint venture’s forecast by comparing historical budget to actual
performance and obtaining explanations from management on any significant variances identified.
FAIR VALUE MEASUREMENT OF INVESTMENTS CLASSIFIED AS FINANCIAL ASSETS
AT FAIR VALUE THROUGH PROFIT OR LOSS (“FVTPL”) CATEGORISED WITHIN
LEVEL 3 OF THE FAIR VALUE HIERARCHY
Refer to notes 5(c)(iii) and 18 to the consolidated financial statements
As at 31 December 2022, the Group held a number of financial assets at fair value through profit or loss,
with measurement categorised within the level 3 of the fair value hierarchy, totalling approximately
US$4,372,000.
The fair value determination of these financial assets at the end of the reporting period involves the
determination of appropriate valuation models as well as the selection of inputs and assumptions made
by management. Different valuation models, as well as inputs and assumptions applied may lead to a
significant change in the fair value of these financial assets.
We identified fair value determination of these financial assets as a key audit matter because it involves
a high degree of estimation uncertainty and judgement; and their aggregate carrying value is material to
the Group’s consolidated financial statements taken as a whole.
WORLDSEC LIMITED
Page 25
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
TO THE MEMBERS OF WORLDSEC LIMITED
(incorporated in Bermuda with limited liability)
KEY AUDIT MATTERS (CONTINUED)
FAIR VALUE MEASUREMENT OF INVESTMENTS CLASSIFIED AS FINANCIAL ASSETS
AT FAIR VALUE THROUGH PROFIT OR LOSS CATEGORISED WITHIN LEVEL 3 OF
THE FAIR VALUE HIERARCHY (CONTINUED)
Our response:
Our audit procedures in relation to this matter included:
Assessing the appropriateness of valuation methodologies applied on the fair value determination
of these financial assets;
Evaluating the reasonableness and relevance of key inputs and assumptions used in the fair value
determination; and
Involving an auditor’s expert to assist our assessment on the appropriateness of the valuation
methodologies and reasonableness of key inputs and assumptions used in the fair value
determination.
OTHER INFORMATION IN THE ANNUAL REPORT
The directors are responsible for the other information. The other information comprises the information
included in the Company’s annual report, but does not include the consolidated financial statements and
our auditor’s report therein.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
DIRECTORS’ RESPONSIBILITIES FOR THE CONSOLIDATED FINANCIAL STATEMENTS
The directors are responsible for the preparation of the consolidated financial statements that give a true
and fair view in accordance with International Financial Reporting Standards as adopted by the
European Union, and for such internal control as the directors determine 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, the directors are 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 the directors either intend to liquidate the Group or
to cease operations, or have no realistic alternative but to do so.
The directors are also responsible for overseeing the Group’s financial reporting process. The audit
committee of the Company (the “Audit Committee”) assists the directors in discharging their
responsibility in this regard.
WORLDSEC LIMITED
Page 26
INDEPENDENT AUDITOR’S REPORT (CONTINUED) ____________________________________
TO THE MEMBERS OF WORLDSEC LIMITED
(incorporated in Bermuda with limited liability)
AUDITOR’S 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 auditor’s
report that includes our opinion. This report is made solely to you, as a body, in accordance with Section
90 of the Bermuda Companies Act 1981, and for no other purpose. We do not assume responsibility
towards or accept liability to any other person for the contents of this report.
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 ISAs, we exercise professional judgement and maintain
professional skepticism throughout the audit. We also:
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.
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.
evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
conclude on the appropriateness of the directors’ 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 auditor’s
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 auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
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.
WORLDSEC LIMITED
Page 27
INDEPENDENT AUDITOR’S REPORT (CONTINUED) ____________________________________
TO THE MEMBERS OF WORLDSEC LIMITED
(incorporated in Bermuda with limited liability)
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)
We communicate with the Audit Committee 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 the Audit Committee 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, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with the directors, 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 auditor’s 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.
REPORT ON OTHER REGULATORY REQUIREMENTS
Under the listing rules of the Financial Conduct Authority in the United Kingdom (the “Listing Rules”),
we are required to review the part of the Corporate Governance Statement relating to the Company’s
compliance with the provisions of the UK Corporate Governance Code specified for our review in
accordance with Listing Rule 9.8.10R(2). We have nothing to report arising from our review.
BDO Limited
Certified Public Accountants
Tang Tak Wah
Practising Certificate Number P06262
Hong Kong, 25 April 2023
WORLDSEC LIMITED
Page 28
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
Year ended 31 December
Notes
2022
2021
US$’000
US$’000
Revenue 7 193 145
Other income, gains and losses, net 9 (428 ) 1,075
Staff costs 10 (277 ) (298 )
Other expenses (325 ) (270 )
Finance costs 11 (4 ) (8 )
Share of losses of a joint venture
17 (2 ) (8 )
(Loss)/profit before income tax expense 12 (843 ) 636
Income tax expense 13 - -
(Loss)/profit for the year (843 ) 636
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to
profit or loss:
Share of other comprehensive income of a
joint venture
17
(27 )
Other comprehensive income for the year,
net of income tax
(27 )
Total comprehensive income for the year (870 ) 647
(Loss)/profit for the year attributable to:
Owners of the Company (843 ) 636
Total comprehensive income for the year
attributable to:
Owners of the Company (870 ) 647
(Loss)/earnings per share – basic and diluted 14 US (0.99 ) cent US 0.75 cent
The accompanying notes form an integral part of these consolidated financial statements.
WORLDSEC LIMITED
Page 29
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Notes
2022 2021
US$’000 US$’000
Non-current assets
Property, plant and equipment 16 - -
Interest in a joint venture 17 71 100
Financial assets at fair value through profit
or loss
18
Right-of-use assets 19 48 111
Current assets
Other receivables 223 114
Deposits and prepayments 26 26
Financial assets at fair value through profit
or loss
18
Amount due from a joint venture 17 257 257
Cash and cash equivalents 21 526 1,513
Current liabilities
Other payables and accruals 22 160 163
Lease liabilities 19 55 64
Net current assets 914 2,307
Non-current liabilities
Lease liabilities 19 - 55
Net assets 5,442 6,312
WORLDSEC LIMITED
Page 30
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2022
Notes
2022 2021
US$’000 US$’000
Capital and reserves
Share capital 23 85 85
Reserves 24 5,357 6,227
Total equity 5,442 6,312
The consolidated financial statements on pages 28 to 68 were approved and authorised for issue by the
Board of Directors on 25 April 2023 and signed on its behalf by:
Alastair Gunn-Forbes
Directo
r
Henry Ying Chew Cheong
Direc
t
o
r
The accompanying notes form an integral part of these consolidated financial statements.
WORLDSEC LIMITED
Page 31
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Equity attributable to owners of the Company
Foreign
Contri- Share currency
Share Share buted option translation Special Accumulated
capital
premium surplus reserve reserve reserve losses Total
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
(note 23) (note 24) (note 24) (note 24) (note 24) (note 24) (note 24)
Balance at 1 January 2021 85 7,524 9,646 249 (17 ) 625 (12,447 ) 5,665
Profit for the year - - - - - - 636 636
Other comprehensive income
for the year
Share of other
comprehensive income of a
joint venture (note 17) - - - - 11 - - 11
Total comprehensive
income for the year - - - - 11 - 636 647
Balance as at 31 December
2021 and 1 January 2022 85 7,524 9,646 249 (6 ) 625 (11,811 ) 6,312
Loss for the year - - - - - - (843 ) (843 )
Other comprehensive income
for the year
Share of other
comprehensive income of a
joint venture (note 17)
(27 )
(27 )
Total comprehensive
income for the year
(27 )
(843 )
(870 )
Balance at 31 December
2022 85
(33 ) 625 (12,654 ) 5,442
The accompanying notes form an integral part of these consolidated financial statements.
WORLDSEC LIMITED
Page 32
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
Year ended 31 December
2022
2021
US$‘000 US$‘000
Cash flows from operating activities
(Loss)/profit before income tax expense (843 ) 636
Adjustments for:
Bank interest income (1 ) (1 )
Depreciation of right-of-use assets 63 64
Interest on lease liabilities 4 8
Share of losses of a joint venture 2 8
Net realised and unrealised losses/(gains) on financial assets at
fair value through profit or loss
(1,080 )
Operating loss before working capital changes (331 ) (365 )
Decrease in deposits and prepayments
(Increase)/decrease in other receivables
(109 ) 168
(Decrease)/increase in other payables and accruals (3 ) 16
Net cash used in operating activities (443 ) (177 )
Cash flows from investing activities
Investment in financial assets at fair value through
profit or loss
(1,188 )
(971 )
Proceeds from disposal of financial assets at fair value through
profit or loss
Bank interest income received 1 1
Net cash (used in)/generated from investing activities (476 ) 565
Cash flows from financing activities
Repayment of principal portion of lease liabilities
(64 )
(61 )
Repayment of interest portion of lease liabilities (4 ) (8 )
Net cash used in financing activities (68 ) (69 )
Net(decrease)/increase in cash and cash equivalents (987 ) 319
Cash and cash equivalents at the beginning of the year 1,513 1,194
Cash and cash equivalents at the end of the year 526 1,513
The accompanying notes form an integral part of these consolidated financial statements.
WORLDSEC LIMITED
Page 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
1. GENERAL INFORMATION
shares are listed on the Main Market of the London Stock Exchange. The address of the registered
office of the Company is Victoria Place, 5
th
Floor, 31 Victoria Street, Hamilton HM 10, Bermuda.
Its principal place of business is Unit 607, 6th Floor, FWD Financial Centre, 308 Des Voeux Road
Central, Sheung Wan, Hong Kong .
Company’s subsidiaries are set out in note 20 to the consolidated financial statements.
The functional currency of the Company is Hong Kong Dollars (“HK$”). The consolidated
financial statements of the Company and its subsidiaries (collectively referred to as the “Group”)
are presented in United States Dollars (“US$” or “USD”).
The consolidated financial statements have been prepared in accordance with all applicable
International Financial Reporting Standards (“IFRS”), International Accounting Standards
(“IAS”) and Interpretations adopted by the European Union (“EU”) (collectively referred to as
“IFRSs”).
2. APPLICATION OF NEW AND REVISED IFRSs
2.1 New and revised IFRSs applied
The following amendments to IFRSs have been applied by the Group in the current year.
| 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 – Cost of Fulfilling a Contract |
| Amendments to IFRS 1, IFRS 9, | |
| IFRS 16 | |
| Annual Improvements to IFRSs 2018-2020 |
None of the application of the amendments to IFRSs in the current year had material impact on
the Group’s performance and financial positions for the current and prior years and/or on the
disclosures in the consolidated financial statements.
WORLDSEC LIMITED
Page 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2. APPLICATION OF NEW AND REVISED IFRSs (CONTINUED)
2.2 New and revised IFRSs in issue but not yet effective
The Group has not applied the following new and revised IFRSs, potentially relevant to the
Group’s financial statements, that have been issued but are not yet effective. Certain new or
revised IFRSs have yet been endorsed by the EU.
| Amendments to IAS 1 and | ||
| IFRS Practice Statement 2 | ||
| 1 | ||
| Disclosure of Accounting Policies | ||
| 1 | ||
| Amendments to IAS 8 | Definition of Accounting Estimates | |
| Amendments to IAS 12 | Deferred tax related to assets and liabilities arising | |
| 1 | ||
| from a single transaction |
1
Effective for annual periods beginning on or after 1 January 2023
Amendments to IAS 1 and IFRS Practice Statement 2, Disclosure of Accounting Policies
The amendments seek to promote improved accounting policy disclosures that provide more useful
information to investors and other primary users of the financial statements. Apart from clarifying
that entities are required to disclose their “material” rather than “significant” accounting policies, the
amendments provide guidance on applying the concept of materiality to accounting policy
disclosures.
The directors are currently assessing the impact that the application of the amendments will have on
the Group’s consolidated financial statements.
Amendments to IAS 8, Definition of Accounting Estimates
The amendments clarify the distinction between changes in accounting policies and changes in
accounting estimates. Amongst other things, the amendments now define accounting estimates as
monetary amounts in financial statements that are subject to measurement uncertainty, and clarify
that the effects of a change in an input or a measurement technique used to develop an accounting
estimate are changes in accounting estimates unless they result from the correction of prior period
errors.
The directors are currently assessing the impact that the application of the amendments will have on
the Group’s consolidated financial statements.
Amendments to IAS 12, Deferred tax related to assets and liabilities arising from a single
transaction
The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12
so that it does not apply to such transactions as leases and decommissioning provisions that, on initial
recognition, give rise to equal taxable and deductible temporary differences. Consequently, entities
will need to recognise a deferred tax asset and a deferred tax liability for temporary differences arising
on these transactions.
The directors are currently assessing the impact that the application of the amendments will have on
the Group’s consolidated financial statements.
WORLDSEC LIMITED
Page 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
The consolidated financial statements of the Group have been prepared in accordance with all
applicable IFRSs.
Basis of preparation
The consolidated financial statements have been prepared under the historical cost basis except
for financial assets at fair value through profit or loss (“FVTPL”), which are measured at fair value
as explained in the accounting policies set out below.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries. Inter-company transactions and balances between group companies together with
unrealised profits are eliminated in full in preparing the consolidated financial statements.
Unrealised losses are also eliminated unless the transaction provides evidence of impairment on
the asset transferred, in which case the loss is recognised in profit or loss.
Subsidiaries
A subsidiary is an investee over which the Company is able to exercise control. The Company
controls an investee if all three of the following elements are present: (i) power over the investee, (ii)
exposure, or rights, to variable returns from the investee, and (iii) the ability to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances indicate that there may
be a change in any of these elements of control.
WORLDSEC LIMITED
Page 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Joint arrangements
The Group is a party to a joint arrangement where there is a contractual arrangement that confers joint
control over the relevant activities of the arrangement to the Group and at least one other party. Joint
control is assessed under the same principles as control over subsidiaries.
The Group classifies its interests in joint arrangements as either:
- Joint venture: where the Group has rights to only the net assets of the joint arrangement; or
- Joint operation: where the Group has both the rights to assets and obligations for the liabilities of
the joint arrangement.
In assessing the classification of interests in joint arrangements, the Group considers:
- the structure of the joint arrangement;
- the legal form of the joint arrangement structured through a separate vehicle;
- the contractual terms of the joint arrangement agreement; and
- any other facts and circumstances (including any other contractual arrangements).
Joint ventures are accounted for using the equity method whereby they are initially recognised at cost
and thereafter, their carrying amounts are adjusted for the Group’s share of the post-acquisition
change in the relevant joint venture’s net assets except that losses in excess of the Group’s interest in
that joint venture are not recognised unless there is a legal and constructive obligation to make good
those losses.
Profits and losses arising on transactions between the Group and its joint ventures are recognised only
to the extent of unrelated investors’ interests in the joint ventures. The investors’ share in a joint
venture’s profits and losses resulting from such transactions is eliminated against the carrying value
of the joint venture.
Any premium paid for an investment in a joint venture above the fair value of the Group's share of
the identifiable assets, liabilities and contingent liabilities acquired is capitalised and included in the
carrying amount of the investment in the joint venture. Where there is objective evidence that the
investment in a joint venture has been impaired, the carrying amount of the investment is tested for
impairment in the same way as other non-financial assets.
The Group accounts for its interests in joint operations by recognising its share of assets, liabilities,
revenues and expenses in accordance with its contractually conferred rights and obligations.
WORLDSEC LIMITED
Page 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses. The cost of property, plant and equipment includes their purchase price and
the costs directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Group and the cost of the item can be measured reliably. The carrying amount of a
replaced part is derecognised. All other repairs and maintenance are recognised as an expense in
profit or loss during the financial period in which they are incurred.
Property, plant and equipment are depreciated so as to write off their cost net of expected residual
value over their estimated useful lives on a straight-line basis. The useful lives, residual value and
depreciation method are reviewed, and adjusted if appropriate, at the end of each reporting period.
The useful lives are as follows:
Leasehold improvements over the lease terms
An asset is written down immediately to its recoverable amount if its carrying amount is higher
than the asset’s estimated recoverable amount.
The gain or loss on disposal of an item of property, plant and equipment is the difference between
the net sale proceeds and its carrying amount, and is recognised in profit or loss on disposal.
Revenue recognition
Dividend income is recognised when the right to receive payment is established.
Interest income is accrued on a time basis on the principal outstanding at the applicable interest
rate.
WORLDSEC LIMITED
Page 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Leasing
All leases (irrespective of whether they are operating leases or finance leases) are required to be
capitalised in the statement of financial position as right-of-use assets and lease liabilities, but
accounting policy choices exist for an entity to choose not to capitalise (i) leases which are short-
term leases and/or (ii) leases for which the underlying asset is of low-value. The Group has elected
not to recognise right-of-use assets and lease liabilities for low-value assets and leases which at
the commencement date have a lease term less than 12 months. The lease payments associated
with those leases are expensed on a straight-line basis over the lease term.
Right-of-use assets
Right-of-use assets are recognised at cost and would comprise: (i) the amount of the initial
measurement of the lease liabilities (see below for the accounting policy to account for lease
liabilities); (ii) any lease payments made at or before the commencement date, less any lease
incentives received; (iii) any initial direct costs incurred by the lessee; and (iv) an estimate of the
costs to be incurred by the lessee in dismantling and removing the underlying asset to the condition
required by the terms and conditions of the lease, unless those costs are incurred to produce
inventories. The Group measures the right-of-use assets applying a cost model. Under the cost
model, the Group measures the right-to-use at cost, less any accumulated depreciation and any
impairment losses, and adjusted for any remeasurement of the lease liabilities.
WORLDSEC LIMITED
Page 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Leasing (Continued)
Lease liabilities
Lease liabilities are recognised at the present value of the lease payments that are not paid at the
date of commencement of the lease. The lease payments are discounted 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.
The following payments for the right-to-use the underlying asset during the lease term that are not
paid at the commencement date of the lease are considered to be lease payments: (i) fixed
payments less any lease incentives receivable; (ii) variable lease payments that depend on an index
or a rate, initially measured using the index or the rate as at the commencement date; (iii) amounts
expected to be payable by the lessee under residual value guarantees; (iv) the exercise price of a
purchase option if the lessee is reasonably certain to exercise that option; and (v) payments of
penalties for terminating the lease, if the lease term reflects the lessee exercising an option to
terminate the lease.
Subsequent to the commencement date, the Group measures lease liabilities by: (i) increasing the
carrying amount to reflect interest on the lease liability; (ii) reducing the carrying amount to reflect
the lease payments made; and (iii) remeasuring the carrying amount to reflect any reassessment
or lease modifications, e.g., a change in future lease payments arising from a change in an index
or a rate, a change in the lease term, a change in the in substance fixed lease payments or a change
in assessment to purchase the underlying asset.
Government grants
Government grants are not recognised until there is reasonable assurance that the Group will
comply with the conditions attaching to them and that the grants will be received.
WORLDSEC LIMITED
Page 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign currencies
Transactions entered into by the group entities in currencies other than the currency of the primary
economic environment in which they operate are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the end
of the reporting period. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the translation of
monetary items, are recognised in profit or loss in the period in which they arise.
On consolidation, income and expense items of foreign operations are translated into the
presentation currency of the Group (i.e. US$) at the average exchange rates for the year, unless
exchange rates fluctuate significantly during the period, in which case the rates approximating to
those ruling when the transactions took place are used. All assets and liabilities of foreign
operations are translated at the rate ruling at the end of the reporting period. Exchange differences
arising, if any, are recognised in other comprehensive income and accumulated in equity as foreign
currency translation reserve (attributed to minority interests as appropriate). Exchange differences
recognised in profit or loss of group entities' separate financial statements on the translation of
long-term monetary items forming part of the Group’s net investment in the foreign operation
concerned are reclassified to other comprehensive income and accumulated in equity as foreign
currency translation reserve.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign
currency translation reserve relating to that operation up to the date of disposal are reclassified to
profit or loss as part of the profit or loss on disposal.
Goodwill and fair value adjustments on identifiable assets acquired arising on an acquisition of a
foreign operation on or after 1 January 2005 are treated as assets and liabilities of that foreign
operation and translated at the rate of exchange prevailing at the end of the reporting period.
Exchange differences arising are recognised in the foreign currency translation reserve.
WORLDSEC LIMITED
Page 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Share-based payments
The Group operates equity-settled share-based compensation plans and the share options are
awarded to employees and directors providing services to the Group.
All services received in exchange for the grant of any share-based compensation are measured at
their fair value. These are indirectly determined by reference to the equity instruments awarded.
Their value is appraised at the grant date and excludes the impact of any non-market vesting
conditions.
All share-based compensation is recognised as an expense in profit or loss over the vesting period
if vesting conditions apply, or recognised as an expense in full at the grant date when the equity
instruments granted vest immediately unless the compensation qualifies for recognition as an
asset, with a corresponding increase in the share option reserve in equity. If vesting conditions
apply, the expense is recognised over the vesting period, based on the best available estimate of
the number of equity instruments expected to vest. Non-market vesting conditions are included in
assumptions about the number of equity instruments that are expected to vest. Estimates are
subsequently revised, if there is any indication that the number of equity instruments expected to
vest differs from previous estimates.
At the time when the share options are exercised, the amount previously recognised in share option
reserve will be transferred to share premium. After the vesting date, when the vested share options
are forfeited or are still not exercised at the expiry date, the amount previously recognised in share
option reserve will be transferred to retained profits.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit
or loss before income tax expense’ as reported in the consolidated statement of profit or loss and
other comprehensive income because of items of income or expense that are taxable or deductible
in other years and items that are never taxable or deductible. Current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the reporting period.
WORLDSEC LIMITED
Page 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Taxation (Continued)
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the consolidated financial statements and the corresponding tax bases used in the
computation of taxable profits. Deferred tax liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those
deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not
recognised if the temporary difference arises from initial recognition (other than in a business
combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference
arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available
to allow all or part of the assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that
have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets 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 amounts of its assets and liabilities.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that the Group will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at the end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. When a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the present value of those cash
flows (where the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, a receivable is recognised as an asset if it is virtually certain that
reimbursement will be received and that the amount of the receivable can be measured reliably.
Cash and cash equivalents
For the purposes of the consolidated statement of cash flows, cash and cash equivalents included
cash on hand and in banks.
WORLDSEC LIMITED
Page 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments
(i) Financial assets
A financial asset (unless it is a trade receivable without a significant financing component)
is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are
directly attributable to its acquisition or issue. A trade receivable without a significant
financing component is initially measured at the transaction price.
All regular way purchases and sales of financial assets are recognised on the trade date, i.e.
the date that the Group commits to purchase or sell the asset. Regular way purchases or
sales are purchases or sales of financial assets that require delivery of the asset within the
period generally established by regulation or convention in the market place.
Financial assets with embedded derivatives are considered in their entirely when
determining whether their cash flows are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for
managing the assets and the cash flow characteristics of the assets. There are two
measurement categories into which the Group classifies its debt instruments:
Amortised cost: Assets that are held for collection of contractual cash flows where those
cash flows represent solely payments of principal and interest are measured at amortised
cost. Financial assets at amortised cost are subsequently measured using the effective
interest rate method. Interest income, foreign exchange gains and losses and impairment
are recognised in profit or loss. Any gain on derecognition is recognised in profit or loss.
FVTPL: Financial assets at FVTPL include financial assets held for trading, financial assets
designated upon initial recognition at FVTPL, or financial assets mandatorily required to
be measured at fair value. Financial assets are classified as held for trading if they are
acquired for the purpose of selling or repurchasing in the near term. Derivatives, including
separated embedded derivatives, are also classified as held for trading unless they are
designated as effective hedging instruments. Financial assets with cash flows that are not
solely payments of principal and interest are classified and measured at FVTPL,
irrespective of the business model. Notwithstanding the criteria for debt instruments to be
classified at amortised cost or at fair value through other comprehensive income
(“FVOCI”), as described above, debt instruments may be designated at FVTPL on initial
recognition if doing so eliminates, or significantly reduces, an accounting mismatch.
WORLDSEC LIMITED
Page 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (Continued)
(i) Financial assets (Continued)
Equity instruments
On initial recognition of an equity investment that is not held for trading, the Group could
irrevocably elect to present subsequent changes in the investment’s fair value in other
comprehensive income. This election is made on an investment-by-investment basis.
Equity investments at FVOCI are measured at fair value. Dividend income are recognised
in profit or loss unless the dividend income clearly represents a recovery of part of the cost
of the investments. Other net gains and losses are recognised in other comprehensive
income and are not reclassified to profit or loss. All other equity instruments are classified
as FVTPL, whereby changes in fair value, dividends and interest income are recognised in
profit or loss.
(ii) Impairment loss on financial assets
The Group recognises loss allowances for expected credit losses (“ECLs”) on financial
assets measured at amortised cost. The ECLs are measured on either of the following bases:
(1) 12-month ECLs: these are the ECLs that result from possible default events within the
12 months after the reporting date; and (2) lifetime ECLs: these are ECLs that result from
all possible default events over the expected life of a financial instrument. The maximum
period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to the credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as
the difference between all contractual cash flows that are due to the Group in accordance
with the contract and all the cash flows that the Group expects to receive. The shortfall is
then discounted at an approximation to the asset’s original effective interest rate.
For debt financial assets, the ECLs are based on the 12-month ECLs. However, when there
has been a significant increase in credit risk since origination, the allowance will be based
on the lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly
since initial recognition and when estimating ECLs, the Group considers reasonable and
supportable information that is relevant and available without undue cost or effort. This
includes both quantitative and qualitative information analysis, based on the Group’s
historical experience and informed credit assessment and including forward-looking
information.
The Group assumes that the credit risk on a financial asset has increased significantly if it
is more than 30 days past due.
WORLDSEC LIMITED
Page 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (Continued)
(ii) Impairment loss on financial assets (Continued)
Despite the foregoing, the Group assumes that the credit risk on a debt instrument has not
increased significantly since initial recognition if the debt instrument is determined to have
low credit risk at the reporting date. A debt instrument is determined to have low credit risk
if (1) it has a low risk of default; (2) the borrower has a strong capacity to meet its
contractual cash flow obligations in the near term; and (3) adverse changes in economic
and business conditions in the longer term may, but will not necessarily, reduce the ability
of the borrower to fulfil its contractual cash flow obligations.
The Group considers a financial asset to be in default when: (1) the borrower is unlikely to
pay its credit obligations to the Group in full, without recourse by the Group to actions such
as realising security (if any is held); or (2) the financial asset is more than 90 days past due.
A financial asset is credit-impaired when one or more events of default that have a
detrimental impact on the estimated future cash flows of that financial asset have occurred.
Evidence that a financial asset is credit-impaired includes observable data about the
following events:
- significant financial difficulty of the issuer or the borrower;
- a breach of contract, such as a default or past due event;
- the lender(s) of the borrower, for economic or contractual reasons relating to the
borrower’s financial difficulty, having granted to the borrower a concession(s) that the
lender(s) would not otherwise consider;
- it is becoming probable that the borrower will enter bankruptcy or other financial
reorganisation; or
- the disappearance of an active market for that financial asset because of financial
difficulty of the issuer or the borrower.
Interest income on a credit-impaired financial asset is calculated based on the amortised
cost (i.e. the gross carrying amount less loss allowance) of the financial asset. For non
credit-impaired financial assets, interest income is calculated based on the gross carrying
amount.
The gross carrying amount of a financial asset is written off (either partially or in full) to
the extent that there is no realistic prospect of recovery. This is generally the case when the
Group determines that the debtor does not have assets or sources of income that could
generate sufficient cash flows to repay the amount subject to the write-off.
Subsequent recoveries of an asset that was previously written off are recognised as a
reversal of impairment in profit or loss in the period in which the recovery occurs.
WORLDSEC LIMITED
Page 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (Continued)
(iii) Financial liabilities
The Group classifies its financial liabilities, depending on the purpose for which the
liabilities were incurred. Financial liabilities at FVTPL are initially measured at fair value
and financial liabilities at amortised cost are initially measured at fair value, net of directly
attributable costs incurred.
Financial liabilities at amortised cost
Financial liabilities at amortised cost including other payables and accruals and lease
liabilities are subsequently measured at amortised cost, using the effective interest method.
The related interest expenses are recognised in profit or loss.
Gains or losses are recognised in profit or loss when the liabilities are derecognised as well
as through the amortisation process.
(iv) Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial
asset or financial liability and of allocating interest income or interest expenses over the
relevant period. The effective interest rate is the rate that exactly discounts the estimated
future cash receipts or payments through the expected life of the financial asset or liability,
or where appropriate, a shorter period.
(v) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of
direct issue costs.
(vi) Derecognition
The Group derecognises a financial asset when the contractual rights to the future cash
flows in relation to the financial asset expire or when the financial asset has been transferred
and the transfer meets the criteria for derecognition in accordance with IFRS 9.
Financial liabilities are derecognised when the obligations specified in the relevant contract
are discharged, cancelled or expire.
WORLDSEC LIMITED
Page 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment of other assets
At the end of each reporting period, the Group reviews the carrying amounts of the following
assets to determine whether there is any indication that those assets have suffered an impairment
loss or an impairment loss previously recognised no longer exists or may have decreased:
• property, plant and equipment; and
• interest in a joint venture
If the recoverable amount (i.e. the greater of fair value less costs to disposal and value in use) of
an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced
to its recoverable amount. An impairment loss is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to
the revised estimate of its recoverable amount, but so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset in prior years.
A reversal of an impairment loss is recognised in profit or loss immediately.
Value in use is based on the estimated future cash flows expected to be derived from the asset or
cash generating unit, discounted to its present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset or the
cash generating unit.
WORLDSEC LIMITED
Page 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Related parties
(a) A person or a close member of that person’s family is related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of key management personnel of the Group or the Company’s parent.
(b) An entity is related to the Group if any of the following conditions apply:
(i) The entity and the Group are members of the same group (which means that each
parent, subsidiary and fellow subsidiary is related to the others);
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member);
(iii) Both entities are joint ventures of the same third party;
(iv) One entity is a joint venture of a third entity and the other entity is an associate of
the third entity;
(v) The entity is a post-employment benefit plan for the benefit of the employees of
the Group or an entity related to the Group;
(vi) The entity is controlled or jointly controlled by a person identified in (a);
(vii) A person identified in (a)(i) has significant influence over the entity or is a member
of key management personnel of the entity (or of a parent of the entity); or
(viii) The entity, or any member of a group of which it is a part, provides key
management personnel services to the Group or to the Company’s parent.
Close members of the family of a person are those family members who may be expected to
influence, or be influenced by, that person in his dealings with the entity and include:
(i) that person’s children and spouse or domestic partner;
(ii) children of that person’s spouse or domestic partner; and
(iii) dependents of that person or that person’s spouse or domestic partner.
WORLDSEC LIMITED
Page 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group’s accounting policies, which are described in note 3 to the
consolidated financial statements, management is required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not readily apparent from
other sources. The estimates and underlying assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to an
accounting estimate are recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision affects
both current and future periods.
Key sources of estimation uncertainty
The key sources of estimation uncertainty that have a significant risk of resulting in material
adjustments to the carrying amounts of assets and liabilities within the next financial year are as
follows:
(i) Impairment of financial assets (including amount due from a joint venture)
The loss allowances for financial assets are based on assumptions about risk of default and
expected loss rates. The Group uses its judgement in making these assumptions and
selecting the inputs to the impairment calculation, based on the Group’s past history,
existing market conditions as well as forward looking estimates at the end of each reporting
period.
(ii) Impairment of non-financial assets (including interest in a joint venture)
The Group assesses whether there are any indications of impairment for all non-financial
assets at each reporting date. Non-financial assets are tested for impairment when there are
indications that the carrying amount may not be recoverable.
(iii) Fair value measurement of investments classified as FVTPL categorised within level 3 of
the Fair Value Hierarchy (as defined in note 5(c))
The fair value of investments that are not traded in an active market is determined using
valuation techniques. The Group uses its judgement to select a variety of methods and make
assumptions that are mainly based on market conditions existing at the end of each
reporting period. Details of the key assumptions used and the impact of changes to these
assumptions are disclosed in note 5(c) to the consolidated financial statements.
WORLDSEC LIMITED
Page 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
5. FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
| 2022 | 2021 | |
| US$’000 | US$’000 | |
| Financial assets | ||
| Financial assets at FVTPL | 4,506 | 4,473 |
| Financial assets at amortised cost | 1,031 | 1,909 |
| 5,537 | 6,382 | |
| Financial liabilities | ||
| Financial liabilities at amortised cost | 215 | 282 |
(b) Financial risk management objectives
Management monitors and manages the financial risks relating to the operations of the
Group through internal risk reports which analyse exposures by degree and magnitude of
risks. These risks include market risks (including foreign currency risk, interest rate risk and
price risk), credit risk and liquidity risk. The policies on how the Group mitigates these risks
are set out below. The Group does not enter into or trade derivative financial instruments
for speculative purposes.
Market risks
The Group’s activities expose it primarily to the financial risks of changes in foreign
currency exchange rates, interest rates and price risk.
There has been no change to the Group’s exposure to market risks or the manner in which
these risks are managed and measured.
WORLDSEC LIMITED
Page 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
5. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives (Continued)
Market risks (Continued)
(i) Foreign currency risk
Certain financial assets and financial liabilities of the Group are denominated in
foreign currencies other than the functional currency of the relevant group entities,
which exposes the Group to foreign currency risk. The Group currently does not have
a foreign currency hedging policy. However, management monitors foreign exchange
exposure and will consider hedging significant foreign currency exposure should the
need arise. Under the Linked Exchange Rate System in Hong Kong, HK$ is currently
pegged to the USD within a narrow range, the directors therefore consider that there
is no significant foreign exchange risk with respect to the USD.
Foreign currency risk arises primarily from volatility in the British Pound Sterling
(“GBP”). The carrying amounts of the Group’s foreign currency denominated
monetary assets and monetary liabilities at the end of reporting period were as
follows:
| Liabilities | ||||
| Assets | ||||
| 2022 | 2021 | 2022 | 2021 | |
| US$’000 | US$’000 | US$’000 | US$’000 | |
| GBP | 72 | 91 | 1 | 1 |
The following table details the Group’s sensitivity to a 10% (2021: 10%) increase and
decrease in USD against the relevant foreign currency. 10% is the sensitivity rate used
when reporting foreign currency risk internally to key management personnel and
represents management’s assessment of the reasonably possible change in the
relevant foreign exchange rate. The sensitivity analysis includes only outstanding
foreign currency denominated monetary items and adjusts its translation as at year
end for a 10% (2021: 10%) change in the relevant foreign currency rate. A positive
number below indicates an increase in profit or a decrease in loss for the year and a
decrease in accumulated losses had USD strengthened 10% (2021: 10%) against the
relevant foreign currency. For a 10% (2021: 10%) weakening of USD against the
relevant foreign currency, there would have been an equal and opposite impact on
profit or loss for the year and on accumulated losses.
WORLDSEC LIMITED
Page 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
5. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives (Continued)
Market risks (Continued)
(i) Foreign currency risk (Continued)
| 2022 | ||
| 2021 | ||
| US$’000 | US$’000 | |
| Change in post-tax profit or loss for the year | ||
| GBP/USD appreciated by 10% (USD depreciated) | (7) | (9) |
| GBP/USD depreciated by 10% (USD appreciated) | 7 | 9 |
(ii) Interest rate risk
The Group’s exposure to changes in interest rates is mainly attributable to its bank
deposits at variable interest rates. Bank deposits at variable rates expose the Group to
cash flow interest rate risk.
The directors consider that the exposure to cash flow interest rate risk was
insignificant. Hence, no sensitivity analysis on the exposure to the Group’s cash flow
interest rate risk is presented.
(iii) Price risk
Price risk is the risk that the value of a financial instrument will fluctuate as a result
of changes in market prices (other than those arising from foreign currency risk),
whether caused by factors specific to an individual investment or its issuer, or factors
affecting all instruments.
All of the Group’s unlisted investments are held for long term strategic purposes.
Their performance is assessed at least annually against performance of any similar
listed entities, based on the limited information available to the Group, together with
an assessment of their relevance to the Group’s long term strategic plans.
Sensitivity analysis
The sensitivity analysis on price risk includes the Group’s financial instruments, the
fair value or future cash flows of which will fluctuate because of changes in their
corresponding equity prices. If the prices of the Group’s equity instruments had been
5% (2021: 5%) higher/lower, loss for the year would have decreased/increased by
approximately US$23,000 (2021: profit for the year would have increased/decreased
by approximately US$52,000).
WORLDSEC LIMITED
Page 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
5. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives (Continued)
Credit risk
The Group’s maximum exposure to credit risk which could cause a financial loss to the
Group due to the failures to discharge an obligation by the counterparties arises from the
carrying amounts of the respective recognised financial assets as stated in the consolidated
statement of financial position.
The credit risk on liquid funds is limited because the major counterparties are banks with
high credit ratings assigned by international credit-rating agencies. As at 31 December 2022,
approximately 100% (2021: 99%) of the bank balances were deposited with a bank with a
high credit rating. Other than concentration of credit risk on liquid funds deposited with that
bank, the Group did not have any other significant concentration of credit risk.
For other receivables, deposits and amount due from a joint venture, management makes
periodic individual assessment on the recoverability based on historical settlement records,
past experience and also available reasonable and supportive forward-looking information.
Management believes that there was no material credit risk inherent in the Group’s
outstanding balances of other receivables, deposits and amount due from a joint venture.
None of these receivables have been subject to a significant increase in credit risk since
initial recognition and the expected credit loss was insignificant based on the risk of default
of those counterparties under 12-month ECLs approach as at 31 December 2022 and 31
December 2021. Thus, no loss allowance was recognised as at 31 December 2022 and 31
December 2021.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors,
which has established an appropriate liquidity risk management framework to meet the
Group’s short, medium and long-term funding and liquidity management requirements. The
Group manages liquidity risk by maintaining adequate reserves, by regularly monitoring
forecast and actual cash flows and by matching the maturity profiles of financial assets and
liabilities.
WORLDSEC LIMITED
Page 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
5. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives (Continued)
Liquidity risk (Continued)
The following table details the Group’s remaining contractual maturity for its non-
derivative financial liabilities with agreed repayment periods. The table has been drawn up
based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the Group can be required to pay.
| Within 1 year | ||||
| or on demand | ||||
| More than 1 | ||||
| year but less | ||||
| than 5 years | ||||
| Total | ||||
| contractual | ||||
| undiscounted | ||||
| cash flows | ||||
| Carrying | ||||
| amount | ||||
| US$’000 | ||||
| US$’000 | US$’000 | US$’000 | ||
| As at 31 December 2022 | ||||
| Other payables and accruals | ||||
| 160 | - | 160 | 160 | |
| Lease liabilities | ||||
| 56 | - | 56 | 55 | |
| 216 | - | 216 | 215 |
| Within 1 year | ||||
| or on demand | ||||
| More than 1 | ||||
| year but less | ||||
| than 5 years | ||||
| Total | ||||
| contractual | ||||
| undiscounted | ||||
| cash flows | ||||
| Carrying | ||||
| amount | ||||
| US$’000 | ||||
| US$’000 | US$’000 | US$’000 | ||
| As at 31 December 2021 | ||||
| Other payables and accruals | ||||
| 163 | - | 163 | 163 | |
| Lease liabilities | ||||
| 69 | 56 | 125 | 119 | |
| 232 | 56 | 288 | 282 |
(c) Fair value of financial instruments
The fair value measurement of the Group’s financial and non-financial assets and liabilities
utilises market observable inputs and data as far as possible. Inputs used in determining fair
value measurements are categorised into different levels based on how observable the inputs
used in the valuation technique utilised are (the “Fair Value Hierarchy”):
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Inputs other than quoted prices included within level 1 that are observable for the
assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from
prices); and
Level 3: Inputs for the assets or liabilities that are not based on observable market data
(unobservable inputs).
WORLDSEC LIMITED
Page 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
5. FINANCIAL INSTRUMENTS (CONTINUED)
(c) Fair value of financial instruments (Continued)
(i) Financial instruments not measured at fair value
Financial instruments not measured at fair value include cash and cash equivalents, other
receivables, deposits, amount due from a joint venture, other payables and accruals and
lease liabilities.
Due to their short-term nature, the carrying value of cash and cash equivalents, other
receivables, deposits, amount due from a joint venture, other payables and accruals and
lease liabilities approximated fair value.
(ii) Financial instruments measured at fair value
Financial assets at FVTPL included in the consolidated financial statements require
measurement at, and disclosure of, fair value.
The fair value of financial instruments with standard terms and conditions and traded on
active liquid markets is determined with reference to quoted market prices.
The valuation techniques and significant unobservable inputs used in determining the fair
value measurement of level 3 financial instruments as well as the relationship between
key observable inputs and fair value are set out in note (iii) below.
(iii) Information about level 3 fair value measurement
The fair value of the Group’s level 3 equity investments in Velocity Mobile Limited
(“Velocity”) was estimated using market approach with the significant inputs being
the enterprise value to sales ratio (“EV/Sales”) and the recent market transaction prices
of comparable instruments at a discount due to the lack of marketability. A 5%
increase/decrease in EV/Sales with all other variables held constant would have
increased/decreased the carrying amount of the Group’s level 3 equity investment in
Velocity by approximately US$16,000/US$16,000 respectively.
The fair value of the Group’s level 3 investments in the ICBC Specialised Ship Leasing
Investment Fund was estimated using income approach with reference to their net asset
value which was a significant unobservable input.
The fair value of the Group’s level 3 investments in the Homaer Asset Management
Master Fund SPC, the Hermitage Galaxy Fund SPC and VS SPC Limited were
estimated using market approach with the significant inputs being the recent market
transaction prices of the underlying investment of the respective funds.
There were no changes in these valuation techniques during the year ended 31 December
2022.
WORLDSEC LIMITED
Page 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
5. FINANCIAL INSTRUMENTS (CONTINUED)
(c) Fair value of financial instruments (Continued)
The following table provides an analysis of the Group’s financial instruments carried at fair
value by level of Fair Value Hierarchy:
| 2022 | ||||
| Level 1 | Level 2 | Level 3 | Total | |
| US$’000 | US$’000 | US$’000 | US$’000 | |
| Listed investments | 134 | - | - | 134 |
| Unlisted investments | - | - | 4,372 | 4,372 |
| 134 | - | 4,372 | 4,506 |
Reconciliation for level 3 financial assets at FVTPL carried at fair value based on significant
unobservable inputs are as follows:
| 2022 | ||
| 2021 | ||
| US$’000 | US$’000 | |
| At 1 January | 3,709 | 3,854 |
| Purchases | 750 | 200 |
| Disposal | - | (796) |
| Transfer to level 1 | - | (331) |
| Transfer to level 3 | - | - |
| Fair value adjustment | (87) | 782 |
| At 31 December | 4,372 | 3,709 |
The Group transferred its investment in Cambium Grove Growth Opps IV Limited of
approximately US$331,000 during the year ended 31 December 2021 from level 3 to level 1
as the quoted market prices of the underlying investment became available upon the listing of
the American depositary shares of Dingdong (Cayman) Limited on the New York Stock
Exchange.
Fair value adjustment of financial assets at FVTPL was recognised in the line item ‘other
income, gains and losses, net’ on the face of the consolidated statement of profit or loss and
other comprehensive income.
WORLDSEC LIMITED
Page 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
6. CAPITAL RISK MANAGEMENT
The Group’s objective of managing capital is to safeguard its ability to continue as a going concern
in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce cost of capital.
In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue
new shares or sell assets to reduce debts.
The capital structure of the Group consists only of equity attributable to owners of the Company,
comprising share capital and reserves.
The gearing ratio at the end of the reporting period was as follows:
| Year ended 31 December | ||
| 2022 | ||
| 2021 | ||
| US$’000 | US$’000 | |
| Debt | ||
| 215 | 282 | |
| Cash and cash equivalents | (526) | (1,513) |
| (311) | (1,231) | |
| Equity | ||
| attributable to owners of the Company | ||
| 5,442 | 6,312 | |
| Net debt to equity | ||
| 0% | 0% |
7. REVENUE
The Group had no revenue from contracts with customers as defined under IFRS 15. An analysis of
the Group’s revenue from other sources is as follows:
| Year ended 31 December | ||
| 2022 | ||
| 2021 | ||
| US$’000 | US$’000 | |
| Dividend income from financial assets at FVTPL | 193 | 145 |
8. SEGMENT INFORMATION
An operating segment is a component of the Group that is engaged in business activities from which
the Group may earn revenue and incur expenses, and is identified on the basis of the internal
management reporting information that is provided to and regularly reviewed by the Group’s chief
operating decision makers in order to allocate resources and assess performance of the segment. For
the years ended 31 December 2022 and 2021, the executive directors, who were the chief operating
decision makers for the purpose of resource allocation and assessment of performance, have
determined that the Group had only one single business component/reportable segment as the Group
was only engaged in investment holding. The executive directors allocated resources and assessed
performance on an aggregated basis. Accordingly, no segment information is presented.
WORLDSEC LIMITED
Page 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
8. SEGMENT INFORMATION (CONTINUED)
The major operations and the revenue of the Group arise from Hong Kong. The Board of Directors
considers that most of the non-current assets (other than the financial instruments) of the Group are
located in Hong Kong.
9. OTHER INCOME, GAINS AND LOSSES, NET
Year ended 31 Decembe
r
| 2022 | ||
| 2021 | ||
| US$’000 | US$’000 | |
| Bank interest | ||
| income | 1 | 1 |
| Net realised and unrealised (losses)/ | ||
| gains on financial | ||
| assets at FVTPL | ||
| (444) | 1,080 | |
| Foreign exchange gain/(loss), net | ||
| 6 | (6) | |
| Others | 9 | - |
| (428) | 1,075 |
10. STAFF COSTS
The aggregate staff costs (including directors’ remuneration) of the Group were as follows:
Year ended 31 Decembe
r
| 2022 | 2021 | |
| US$’000 | US$’000 | |
| Wages and salaries | 270 | 291 |
| Contributions to pension and provident fund | 7 | |
| 7 | ||
| 277 | 298 |
Compensation of key management personnel was as follows:
Year ended 31 December
| 2022 | 2021 | |
| US$’000 | US$’000 | |
| Directors’ fees | 72 | 81 |
| Other remuneration including | ||
| contributions to pension and provident fund | - | - |
| 72 | 81 |
11. FINANCE COSTS
Year ended 31 December
| 2022 | 2021 | |
| US$’000 | US$’000 | |
| Interest on lease liabilities | 4 | 8 |
WORLDSEC LIMITED
Page 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
12. (LOSS)/PROFIT BEFORE INCOME TAX EXPENSE
(Loss)/profit before income tax expense has been arrived at after charging:
Year ended 31 December
| 2022 | 2021 | |
| US$’000 | US$’000 | |
| Auditor’s remuneration | 53 | |
| 50 | ||
| Depreciation of right-of-use assets | 63 | |
| 64 |
13. INCOME TAX EXPENSE
No provision for taxation has been made as the Group did not generate any assessable profits that
were subject to United Kingdom Corporation Tax, Hong Kong Profits Tax or tax in other
jurisdictions.
The tax charge for 2022 and 2021 can be reconciled to the (loss)/profit before income tax expense
per the consolidated statement of profit or loss and other comprehensive income as follows:
Year ended 31 December
| 2022 | ||
| 2021 | ||
| US$’000 | US$’000 | |
| (Loss)/profit before income tax expense | (843) | 636 |
| (Loss)/profit before tax calculated at Hong Kong | ||
| Profits Tax rate of 16.5% (2021: 16.5%) | ||
| (139) | ||
| 105 | ||
| Tax effect of non-deductible expenses | 110 | 41 |
| Tax effect of non-taxable income | ||
| (34) | ||
| (196) | ||
| Tax effect of share of losses of a joint venture | ||
| - | ||
| 1 | ||
| Tax effect of estimated tax losses not recognised | ||
| (63) | ||
| 49 | ||
| Tax charge for the year | - | - |
As at 31 December 2022, the Group had estimated tax losses arising in Hong Kong of
approximately US$1,562,000 (2021: US$1,179,000) that can be carried forward indefinitely
under Hong Kong tax law. No deferred tax asset has been recognised in respect of the unused tax
losses due to the unpredictability of future profit streams. No deferred tax asset has been
recognised in relation to the deductible temporary differences of approximately US$44,000 (2021:
US$47,000) as it is not probable that taxable profits will be available against which the deductible
temporary differences can be utilised. The deductible temporary differences can be carried
forward indefinitely.
WORLDSEC LIMITED
Page 60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
14. (LOSS)/EARNINGS PER SHARE
The (loss)/earnings and weighted average number of ordinary shares used in the calculation of
basic and diluted (loss)/earnings per share were as follows.
Year ended 31 December
| 2022 | ||
| 2021 | ||
| (Loss)/earnings for the year attributable to owners of | ||
| the Company (US$’000) | ||
| (843) | 636 | |
| Number of shares | ||
| Weighted average number of ordinary shares for the | ||
| purposes of basic and diluted (loss)/earnings per share | ||
| 85,101,870 | 85,101,870 | |
| (Loss)/earnings per share – basic and diluted | US(0.99) cent | US0.75 cent |
Diluted loss per share was the same as basic loss per share for the years ended 31 December 2022
and 2021 as there were no potential dilutive ordinary shares outstanding at the end of both years.
15. DIVIDENDS
No dividend was paid or proposed during the year ended 31 December 2022, nor has any dividend
been proposed since the end of the reporting period (2021: nil).
16. PROPERTY, PLANT AND EQUIPMENT
| Leasehold | |
| improvements | |
| US$’000 | |
| Cost | |
| At 1 January 2021, 1 January 2022 and | |
| 31 December 2022 | 69 |
| Accumulated depreciation | |
| At 1 January 2021, 1 January 2022 and 31 December 2022 | 69 |
| Carrying amount | |
| At 31 December 2021 | - |
| At 31 December 2022 | |
| - |
WORLDSEC LIMITED
Page 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
17. INTEREST IN A JOINT VENTURE
| 2022 | 2021 | |
| US$’000 | US$’000 | |
| Unlisted investment, at cost | 257 | 257 |
| Accumulated share of post-acquisition losses of the joint venture | (153) | (151) |
| Accumulated share of post | ||
| -acquisition other comprehensive | ||
| income of the joint venture | ||
| (33) | ||
| (6) | ||
| Share of net assets of the joint venture | 71 | 100 |
| Amount due from the joint venture | 257 | 257 |
The amount due from the joint venture was unsecured, interest-free and repayable on demand.
On 12 December 2014, the Group entered into a subscription agreement with an independent third
party and Oasis Education Group Limited (“Oasis Education”) pursuant to which the Group made
an investment by way of capital contribution and shareholder’s loan, for a 50% interest in Oasis
Education.
The contractual arrangement provides the Group with only the rights to the net assets of the joint
arrangement, with the rights to the assets and obligations for the liabilities of the joint arrangement
resting primarily with Oasis Education. Under IFRS 11, this joint arrangement was classified as a
joint venture and has been included in the consolidated financial statements using the equity
method.
Details of the joint venture were as follows:
Name | |||||
| Country of | |||||
| incorporation | |||||
| and operation | |||||
| Proportion of | |||||
| ownership | |||||
| interest | |||||
| Paid-up | |||||
| registered | |||||
| Capital | |||||
| Principal | |||||
| activities | |||||
| Direct | |||||
| Indirect | |||||
| Oasis Education Group Limited | |||||
| 奧偉詩教育集團有限公司 | |||||
| Hong Kong | |||||
| 50% | - | HK$4,000,000 | Investment | ||
| holding | |||||
| 奧偉詩教育咨詢(深圳)有限公司 | |||||
| The People’s | |||||
| Republic | |||||
| of China | |||||
| (the “PRC”) | |||||
| - | 50% | HK$5,000,000 | Provision of | ||
| education | |||||
| consulting and | |||||
| support | |||||
| services to | |||||
| kindergartens | |||||
| in the PRC |
WORLDSEC LIMITED
Page 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
17. INTEREST IN A JOINT VENTURE (CONTINUED)
The aggregate amounts related to the joint venture that have been included in the consolidated
financial statements of the Group as extracted from the financial statements of the joint venture,
adjusted to reflect adjustments made by the Group when applying the equity method of
accounting, are set out below:
| 2022 | ||
| 2021 | ||
| Results of the joint venture for the year | US$’000 | US$’000 |
| Revenue | - | - |
| Other income | - | - |
| Expenses | (3) | (16) |
| Loss for the year | (3) | (16) |
| Other comprehensive income for the year | (55) | 22 |
| Total comprehensive income for the year | (58) | 6 |
| Share of losses of the joint venture for the year | (2) | (8) |
| Share of other comprehensive income of the | ||
| joint venture for the year | ||
| (27) | ||
| 11 | ||
| Accumulated share of results of the joint venture | (153) | (151) |
| Assets and liabilities of the joint venture at 31 December | ||
| 2022 | ||
| 2021 | ||
| US$’000 | US$’000 | |
| Non-current assets | - | - |
| Current assets | 738 | 806 |
| Non-current liabilities | - | - |
| Current liabilities | (596) | (606) |
| Net assets | 142 | 200 |
| Included in the above amounts were: | ||
| Cash and cash equivalents | 90 | 102 |
| Depreciation and amortisation | - | - |
| Interest income | - | - |
| Interest expenses | - | - |
| Current financial liabilities (excluding trade and other payables) | ||
| 596 | ||
| 606 | ||
| Percentage of equity interest attributable to the Group | 50% | 50% |
| Share of net assets of the joint venture | 71 | 100 |
WORLDSEC LIMITED
Page 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
18. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
| 2022 | 2021 | |
| US$’000 | US$’000 | |
| Financial assets at FVTPL | ||
| Listed investments, at fair value | 134 | |
| 764 | ||
| Unlisted investments, at fair value | 4,372 | |
| 3,709 | ||
| 4,506 | 4,473 | |
| Less: Current portion | (97) | (624) |
| Non-current portion (Note) | 4,409 | |
| 3,849 |
19. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
The Group leased an office premise with a lease term of 3 years at a fixed rate. The weighted
average lessee’s incremental borrowing rate applied to lease liabilities recognised in the
consolidated statement of financial position was 5%. The carrying amounts of the Group’s right-
of-use assets and lease liabilities were as follows:
| Office premises | ||
| Right-of-use | ||
| assets | ||
| Lease | ||
| liabilities | ||
| US$’000 | US$’000 | |
| As at 1 January 2021 | 175 | 180 |
| Lease payments | - | (69) |
| Depreciation charge | (64) | - |
| Interest expenses | - | 8 |
| As at 31 December 2021 | 111 | 119 |
| Lease payments | - | (68) |
| Depreciation charge | ||
| (63) | - | |
| Interest expenses | - | 4 |
| As at 31 December 2022 | 48 | 55 |
Future lease payments are due as follows:
| As at 31 December 2022 | |||
| Minimum lease | |||
| payments | |||
| Interest | |||
| Present | |||
| value | |||
| US$’000 | US$’000 | US$’000 | |
| Not later than one year | |||
| 56 | (1) | 55 |
| As at 31 December 2021 | |||
| Minimum lease | |||
| payments | |||
| Interest | |||
| Present | |||
| value | |||
| US$’000 | US$’000 | US$’000 | |
| Not later than one year | |||
| 69 | (5) | 64 | |
| Later than one year and not later than | |||
| five years | |||
| 56 | |||
| (1) | |||
| 55 | |||
| 125 | (6) | 119 |
WORLDSEC LIMITED
Page 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
20. SUBSIDIARIES
Details of the subsidiaries of the Company were as follows:
| Name | ||||||
| Country of | ||||||
| incorporation | ||||||
| Proportion of | ||||||
| ownership | ||||||
| interest | ||||||
| Proportion of | ||||||
| voting power | ||||||
| held | ||||||
| Principal | ||||||
| activities | ||||||
| 2022 | ||||||
| 2021 | 2022 | 2021 | ||||
| Worldsec Financial Services | ||||||
| Limited | ||||||
| The British | ||||||
| Virgin | ||||||
| Islands | ||||||
| 100% | 100% | 100% | 100% | Investment | ||
| holding | ||||||
| Worldsec Corporate Finance | ||||||
| Limited | ||||||
| The British | ||||||
| Virgin | ||||||
| Islands | ||||||
| 100%* | 100%* | 100%* | 100%* | Inactive | ||
| Worldsec Investment (Hong | ||||||
| Kong) Limited | ||||||
| Hong Kong | ||||||
| 100%* | ||||||
| 100%* | ||||||
| 100%* | ||||||
| 100%* | ||||||
| Investment | ||||||
| holding | ||||||
| Worldsec Investment (China) | ||||||
| Limited | ||||||
| The British | ||||||
| Virgin | ||||||
| Islands | ||||||
| 100%* | ||||||
| 100%* | ||||||
| 100%* | ||||||
| 100%* | ||||||
| Investment | ||||||
| holding |
* Indirectly held subsidiaries
21. CASH AND CASH EQUIVALENTS
| 2022 | 2021 | |
| US$’000 | US$’000 | |
| Bank balances | 525 | 1,512 |
| Cash balances | 1 | 1 |
| 526 | 1,513 |
Bank balances bore interest at the then prevailing market rates ranging from 0.001% to 0.01%
(2021: 0.001% to 0.01%) per annum and had original maturities of three months or less.
22. OTHER PAYABLES AND ACCRUALS
| 2022 | ||
| 2021 | ||
| US$’000 | US$’000 | |
| Other payables and accruals | 160 | 163 |
WORLDSEC LIMITED
Page 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
23. SHARE CAPITAL
| Number of | ||
| shares | ||
| Total | ||
| US$’000 | ||
| Authorised: | ||
| Ordinary shares of US$0.001 each | ||
| At 1 January 2021, 1 January 2022 and 31 | ||
| December 2022 | ||
| 60,000,000,000 | ||
| 60,000 | ||
| Called up, issued and fully paid: | ||
| Ordinary shares of US$0.001 each | ||
| At 1 January 2021, 1 January 2022 and 31 | ||
| December 2022 | ||
| 85,101,870 | ||
| 85 |
24. RESERVES
(a) The share premium account represents the premium arising from the issue of shares of the
Company at a premium.
(b) The contributed surplus represents the amount arising from the reduction in the nominal
value of the authorised and issued shares of the Company and the reduction in the share
premium account pursuant to an ordinary resolution passed on 23 July 2003.
(c) Share option reserve comprises the fair value of the Company’s share options which have
been granted but which have yet to be exercised, as further explained in the accounting policy
for share-based payment transactions in note 3 to the consolidated financial statements. The
amount will either be transferred to the issued capital account and the share premium account
when the related options are exercised, or be transferred to accumulated losses should the
related options expire or be forfeited.
(d) Exchange differences relating to the translation of the net assets of the Group’s foreign
operations (including a joint venture) from their functional currencies to the Group’s
presentation currency were recognised directly in other comprehensive income and
accumulated in the foreign currency translation reserve. Such exchange differences
accumulated in the foreign currency translation reserve will be reclassified to profit or loss
on the disposal of the foreign operations.
(e) The special reserve represents the amount arising from the difference between the nominal
value of the issued share capital of each subsidiary and the nominal value of the issued share
capital of the Company along with the surplus arising in a subsidiary on group reorganisation
completed on 26 February 2007.
(f) Accumulated losses represent accumulated net gains and losses recognised in the profit or
loss of the Group.
WORLDSEC LIMITED
Page 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
25. SHARE-BASED PAYMENTS
The Company operates an equity-settled share-based remuneration scheme for the employees and
directors.
On 1 December 2015, the Company granted to certain eligible persons a total of 2,950,000 share
options to subscribe on a one for one basis new ordinary shares of US$0.001 each in the share
capital of the Company under the Worldsec Employee Share Option Scheme 1997 (the “Scheme”)
which was revised on 24 September 2014. The share options vested six months from the date of
grant and were then exercisable within a period of 9.5 years.
On 29 May 2019, the Company granted to certain eligible persons a total of 2,050,000 share
options to subscribe on a one for one basis new ordinary shares of US$0.001 each in the share
capital of the Company under the Scheme. The share options vested six months from the date of
grant and were then exercisable within a period of 9.5 years.
The following table discloses the movements of the outstanding share options under the Scheme
during the years ended 31 December 2022 and 2021.
| Number of options | ||||||||
| Grantee | ||||||||
| Exercisable | ||||||||
| period | ||||||||
| Balance at | ||||||||
| 1 January | ||||||||
| 2022 | ||||||||
| Granted | ||||||||
| during the | ||||||||
| year | ||||||||
| Exercised | ||||||||
| during the | ||||||||
| year | ||||||||
| Forfeited | ||||||||
| during the | ||||||||
| year | ||||||||
| Lapsed | ||||||||
| during the | ||||||||
| year | ||||||||
| Balance at | ||||||||
| 31 December | ||||||||
| 2022 | ||||||||
| Exercise | ||||||||
| price per | ||||||||
| share | ||||||||
| (US$) | ||||||||
| Directors | 29 November | |||||||
| 2019 to 28 | ||||||||
| May 2029 | ||||||||
| 1,750,000 | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| 1,750,000 | ||||||||
| 0.034 | ||||||||
| 1 June 2016 to | ||||||||
| 30 November | ||||||||
| 2025 | ||||||||
| 2,500,000 | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| 2,500,000 | ||||||||
| 0.122 | ||||||||
| Employees | 29 November | |||||||
| 2019 to 28 | ||||||||
| May 2029 | ||||||||
| 300,000 | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| 300,000 | ||||||||
| 0.034 | ||||||||
| 1 June 2016 to | ||||||||
| 30 November | ||||||||
| 2025 | ||||||||
| 450,000 | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| 450,000 | ||||||||
| 0.122 | ||||||||
| 5,000,000 | - | - | - | - | 5,000,000 |
| Number of options | ||||||||
| Grantee | ||||||||
| Exercisable | ||||||||
| period | ||||||||
| Balance at | ||||||||
| 1 January | ||||||||
| 2021 | ||||||||
| Granted | ||||||||
| during the | ||||||||
| year | ||||||||
| Exercised | ||||||||
| during | ||||||||
| the year | ||||||||
| Forfeited | ||||||||
| during the | ||||||||
| year | ||||||||
| Lapsed | ||||||||
| during the | ||||||||
| year | ||||||||
| Balance at | ||||||||
| 31 December | ||||||||
| 2021 | ||||||||
| Exercise | ||||||||
| price per | ||||||||
| share | ||||||||
| (US$) | ||||||||
| Directors | 29 November | |||||||
| 2019 to 28 | ||||||||
| May 2029 | ||||||||
| 1,750,000 | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| 1,750,000 | ||||||||
| 0.034 | ||||||||
| 1 June 2016 to | ||||||||
| 30 November | ||||||||
| 2025 | ||||||||
| 2,500,000 | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| 2,500,000 | ||||||||
| 0.122 | ||||||||
| Employees | 29 November | |||||||
| 2019 to 28 | ||||||||
| May 2029 | ||||||||
| 300,000 | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| 300,000 | ||||||||
| 0.034 | ||||||||
| 1 June 2016 to | ||||||||
| 30 November | ||||||||
| 2025 | ||||||||
| 450,000 | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| - | ||||||||
| 450,000 | ||||||||
| 0.122 | ||||||||
| 5,000,000 | - | - | - | - | 5,000,000 |
WORLDSEC LIMITED
Page 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
25. SHARE-BASED PAYMENTS (CONTINUED)
Of the total number of share options outstanding at the end of the year, all (2021: all) had vested
and were exercisable at the end of the year.
No share option was exercised during the years ended 31 December 2022 and 2021.
The weighted average remaining contractual life for the share options outstanding at the end of
the reporting period was 4.4 years (2021: 5.4 years)
Subsequent to the year end on 20 February 2023, the Company granted 350,000 share options to
a director to subscribe on a one for one basis new ordinary shares of US$0.001 each in the
Company at an exercise price of US$0.034 per share under the Scheme. The share options vested
six months from the date of grant and were then exercisable within a period of 9.5 years.
26. RELATED PARTY TRANSACTIONS
Other than the compensation of key management personnel as disclosed below, the Group did not
have any related party transactions during the years ended 31 December 2022 and 2021.
Compensation of key management personnel
Key management personnel are the directors only. The remuneration of directors is set out in note
10 to the consolidated financial statements.
27. CONTINGENT LIABILITIES
The Group had no material contingent liabilities at 31 December 2022 (2021: nil).
WORLDSEC LIMITED
Page 68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
28. NOTES SUPPORTING STATEMENT OF CASH FLOWS
(a) Cash and cash equivalents comprise:
| 2022 | ||
| 2021 | ||
| US$’000 | US$’000 | |
| Cash available on demand | 526 | 1,513 |
(b) Reconciliation of liabilities arising from financing activities:
| Lease liabilities | |
| (note 19) | |
| US$’000 | |
| At 1 January 2021 | |
| 180 | |
| Changes from cash flows: | |
| Repayment of principal portion of lease liabilities | |
| (61) | |
| Repayment of interest portion of lease liabilities | (8) |
| Total changes from financing cash flows | (69) |
| Other changes: | |
| Interest on lease liabilities | |
| 8 | |
| Addition on lease liabilities | - |
| 8 | |
| At 1 January 2022 | 119 |
| Changes from cash flows: | |
| Repayment of principal portion of lease liabilities | |
| (64) | |
| Repayment of interest portion of lease liabilities | (4) |
| Total changes from financing cash flows | (68) |
| Other changes: | |
| Interest on lease liabilities | 4 |
| 4 | |
| At 31 December 2022 | 55 |
WORLDSEC LIMITED
Page 69
INVESTMENT POLICY
The Company will invest in small to medium sized trading companies, being companies, both start-
up/early stage growth and established, with a turnover typically up to US$20 million, based mainly in
the Greater China and South East Asian region, and thereby create a portfolio of minority investments
in such companies.
The Company’s investment objective is to achieve attractive investment returns through capital
appreciation on a medium to long term horizon. The Directors consider between 2 to 4 years to be
medium term and long term to be over 4 years. The Directors intend to build an investment portfolio of
small to medium sized companies based mainly in the Greater China and South East Asian regions. The
Company may also take advantage of opportunities to invest in companies in other jurisdictions, such
as the United Kingdom, which have close trading links with Greater China and South East Asia.
Investments will normally be in equity or preferred equity but if appropriate convertible loans or
preference shares may be utilised.
The Company has no intention to employ gearing, but reserves the right to gear the Company to a
maximum level of 25 per cent. of the last published net asset value of the Group should circumstances
arise where, in the opinion of the Directors, the use of debt would be to the advantage of the Company
and the Shareholders as a whole.
The investment portfolio will consist primarily of unlisted companies but the Directors will also consider
investing in undervalued listed companies, if and when such an opportunity arises. Where suitable
opportunities are identified, investment in companies considering a stock market listing at the pre-initial
public offering stage will be considered.
No more than 20 per cent. of the gross assets of the Group will be invested in any single investment.
The Directors consider that opportunities will arise to invest in investee companies by the issue of new
ordinary shares of the Company at a discount of no more than 10 per cent. of the mid market price at the
time of agreement of their issue in exchange for new equity, preferred equity or convertible instrument
in the investee company. Target sectors are financial services, consumer retail distribution, natural
resources and infrastructure but the Company will seek to take advantage of opportunities in other
sectors if these arise.
The Company’s portfolio in due course will comprise at least five different investee companies, thereby
reducing the potential impact of poor performance by any individual investment.
The Company does not intend to take majority interests in any investee company, save in circumstances
where the Company exercises any rights granted under legal agreements governing its investment. Each
investment by the Company will be made on terms individually negotiated with each investee company,
and the Company will seek to be able to exercise control over the affairs of any investee company in the
event of a default by the investee company or its management of their respective obligations under the
legal agreements governing each investment. Where appropriate, the Company will seek representation
on the board of companies in which it invests. Where board representation is secured in an investee
company, remuneration for such appointment will be paid to the benefit of the Company thereby
enhancing returns on the investment. There will be no intention to be involved in the day to day
management of the investee company but the skills and connections of the board representative will be
applied in assisting the development of the investee company, with the intention of enhancing
shareholder value. The Company will arrange no cross funding between investee companies and neither
will any common treasury function operate for any investee company; each investee company will
operate independently of each other investee company.
Where the Company has cash awaiting investment, it will seek to maximise the return on such sums
through investment in floating rate notes or similar instruments with banks or other financial institutions
with an investment grade rating or investment in equity securities issued by companies which have paid
dividends for each of the previous three years.
Any material change to the Investment Policy may only be made with the prior approval of the
Shareholders.
WORLDSEC LIMITED
Page 70
BIOGRAPHICAL NOTES OF THE DIRECTORS
The Board of Directors has ultimate responsibility for the Group’s affairs.
Brief biographical notes of the directors are set out below:
Alastair Gunn-Forbes - Non-Executive Chairman - aged 78
Mr Gunn-Forbes has been associated with Asian regional stock markets since 1973 when he was a fund
manager at Brown Shipley Ltd. Subsequently, he was a director of W I Carr, Sons & Co. (Overseas)
Ltd until 1985, since when he held directorships with other Asian securities firms in the United Kingdom
prior to joining the Group in 1993. Mr Gunn-Forbes is the Chairman of Opera Holdings Limited, a
recruitment company.
Henry Ying Chew Cheong - Executive Director and Deputy Chairman - aged 75
Mr Cheong holds a Bachelor of Science (Mathematics) degree from Chelsea College, University of
London and a Master of Science (Operational Research and Management) degree from Imperial
College, University of London.
Mr Cheong has over 40 years of experience in the securities industry. Mr Cheong and The Mitsubishi
Bank in Japan (now known as The Bank of Tokyo-Mitsubishi UFJ Ltd) founded the Worldsec Group
in 1991. In late 2002, Worldsec Group sold certain securities businesses to UOB Kay Hian Holdings
Limited and following that Mr Cheong became the Chief Executive Officer of UOB Asia (Hong Kong)
Ltd until early 2005. Prior to the formation of the Worldsec Group, Mr Cheong was a director of James
Capel (Far East) Ltd for five years with overall responsibility for Far East Sales. His earlier professional
experience includes 11 years with Vickers da Costa Limited in Hong Kong, latterly as Managing
Director.
Mr Cheong was a member of the Securities and Futures Appeals Tribunal and a member of the Advisory
Committee of the Securities and Futures Commission in Hong Kong (“SFC”) (from 2009-2015). Mr
Cheong was previously a member of Disciplinary Panel A of Hong Kong Institute of Certified Public
Accountants (from 2005-2011). He was a member of the Corporate Advisory Council of the Hong Kong
Securities Institute (from 2002-2009), a member of the Advisory Committee to the SFC (from 1993-
1999), a member of the board of directors of the Hong Kong Future Exchange Limited (from 1994-
2000), a member of GEM Listing Committee and Main Board Listing Committee of Hong Kong
Exchange and Clearing Limited (“HKEX”) (from May 2002-May 2006), a member of Derivatives
Market Consultative Panel of HKEX (from April 2000-May 2006), a member of the Process Review
Panel for the SFC (from November 2000-October 2006) and a member of the Committee on Real Estate
Investment Trust of the SFC (from September 2003-August 2006).
Mr Cheong is an Independent Non-Executive Director of CK Asset Holdings Limited, CK Infrastructure
Holdings Limited, New World Department Store China Limited, and Skyworth Digital Holdings
Limited, all being listed companies in Hong Kong. Mr Cheong is also an Independent Director of BTS
Group Holdings Public Company Limited, being listed in Thailand. He was previously an Independent
Non-Executive Director of CNNC International Limited, Greenland Hong Kong Holdings Limited,
Hutchison Telecommunications Hong Kong Holdings Limited and TOM Group Limited, all being listed
companies in Hong Kong.
WORLDSEC LIMITED
Page 71
BIOGRAPH
ICAL NOTES OF THE DIRECTORS (CONTINUED)
Ernest Chiu Shun She - Executive Director – aged 62
Mr She is an investment banker with extensive experience in the field of corporate finance. In his
executive management roles at various investment banks and financial institutions, including notably
Worldsec Corporate Finance Limited where he had a long and committed stint, Mr She has covered a
broad and diverse range of financial advisory and fundraising activities in the Asian regional equity
markets.
Since rejoining the Group to assist in the reactivation of its business operations in 2013, Mr She has been
an Executive Director of the Company working on private equity investments.
Mr She has a deep-rooted and long-standing connection with the Worldsec group of companies being
one of the co-founding team members at the time when the entities were established in the early 1990s.
For more than a decade that followed and until the disposal by the Group of certain securities businesses
to UOB Kay Hian Holdings Limited in 2002, Mr She held senior management positions at Worldsec
Corporate Finance Limited and Worldsec International Limited with the main responsibility of
developing and overseeing the Group’s corporate finance activities.
Prior to his tenure at the Worldsec group of companies, Mr She was an Investment Analyst and an
Associate Director at James Capel (Far East) Limited where he was primarily responsible for equity
research in the real estate sector.
Mr She graduated from the University of Toronto with a Bachelor of Applied Science degree in
Industrial Engineering and obtained from the Imperial College of Science and Technology a Master of
Science degree in Management Science specialising in Operational Research. Mr She is a Chartered
Financial Analyst and a fellow of the Hong Kong Securities and Investment Institute.
From 2004 to 2010, Mr She served as an Independent Non-Executive Director and the Chairman of the
Audit Committee of New Island Printing Holdings Limited, a company listed on the Main Board of The
Stock Exchange of Hong Kong Limited.
Mark Chung Fong - Non-Executive Director - aged 71
Mr Fong was an Executive Director for China development of Grant Thornton International Ltd, a
corporation incorporated in England and had retired from Grant Thornton effective from 1 January 2014.
He has more than 40 years’ experience in the accounting profession. Mr Fong obtained a bachelor’s
degree in science from the University College, London in August 1972 and a Master’s degree in science
from the University of Surrey in December 1973. He has been a Fellow of the Institute of Chartered
Accountants in England and Wales since January 1983 and a Fellow of the Hong Kong Institute of
Certified Public Accountants (“HKICPA”) since March 1986. He was the President of the HKICPA in
2007. He has been appointed as the Chairman of the Audit Committee of HKICPA from 2016 to January
2019 and has also served on the Council of the Institute of Chartered Accountants in England and Wales
from 2016 to 2018.
WORLDSEC LIMITED
Page 72
BIOGRAPHICAL NOTES OF THE DIRECTORS (CONTINUED)
Martyn Stuart Wells - Non-Executive Director – aged 78
Mr Wells was formerly an Executive Director of Citicorp International Limited and has over 30 years’
experience in the securities industry. In 1969 he joined Vickers da Costa, international stockbrokers. He
was involved in the fund management industry for 20 years and participated in the launch of several
country funds investing in the Asian region, serving as a director or as a member of the investment
advisory councils of several of those funds. He lived in Hong Kong for almost 28 years and since 2000
has resided in England.
Stephen Lister d’Anyers Willis - Non-Executive Director – aged 68
Mr Willis is a financial services professional specialising in Asia and global investing. He has been
involved with Asia for over 35 years firstly with Standard Chartered Bank and subsequently with the
Asian specialist stockbroker, Vickers da Costa and a number of other investment banking firms. In 2011,
Mr Willis founded Stelisdan Research Services to provide equity research to high net worth investors
whose assets are managed by Private Wealth Managers. This covers all aspects of investment strategy,
economics and individual company research.
