TIDMWSL
RNS Number : 9102W
Worldsec Ld
29 April 2016
WORLDSEC LIMITED
Annual Report for the year ended 31 December 2015
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*
* independent
Company Secretary
Jordans Company Secretaries Limited
21 St Thomas Street, Bristol B51 6JS, United Kingdom
Registered Office Address
Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda
Registration Number
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
Estera Management (Bermuda) Ltd.
Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda
International Branch Registrar
Capita Asset Services
12 Castle Street, St Helier, JE2 3RT, Jersey, Channel
Islands
United Kingdom Transfer Agent
Capita Registrars Limited
The Registry, 34 Beckenham Rd, Beckenham, Kent, BR3 4TU, 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
enquiry@worldsec.com
Company's Website
http://www.worldsec.com
CONTENTS
Page
Chairman's statement 1
Directors' report 12
Statement of directors' responsibilities 15
Independent auditor's report 16
Consolidated statement of profit or loss
and other comprehensive income 17
Consolidated statement of financial position 18
Consolidated statement of changes in equity 19
Consolidated statement of cash flows 20
Notes to the consolidated financial statements 21
Investment policy 53
Biographical notes of the directors 55
Chairman's Statement
RESULTS AND REVIEW
Reflecting the J-curve effect with negative returns during the
initial years of investment following its reactivation of business
activities, Worldsec Limited (the "Company") and its subsidiaries
(together the "Group") reported an audited consolidated loss of
US$644,000 for the financial year 2015 (2014: US$475,000). Loss per
share was US1.14 cent (2014: US0.84 cent). Net asset value per
share was US5.5 cents (2014: US6.6 cents).
The increased loss during the year under review was due to
higher operating expenses as the Group returned to normal business
activities. To better position the Group to achieve the investment
objective of the Company, additional staff were employed to carry
out accounting, office management and investment project evaluation
functions, pathing the way for a stronger management structure.
During the year under review, highlights relating to the
contribution or progress made by the Group's investment
included:
- stable dividend income from the ICBC Specialised Ship Leasing Fund;
- a significant increase in the number of pupils enrolled in the
kindergarten under the consultation and
support services provided by Oasis Education Consulting
(Shenzhen) Company Limited; and
- a proposed reverse takeover of a company listed on the
Singapore Stock Exchange by ayondo Holding
AG.
The Board expects further positive contribution from or progress
in the above investments in the coming years.
In December 2015, the Company issued share options to the
directors and staff as a means to reward them for their efforts and
commitments to the Company.
PROSPECTS
With the return to normal business activities, the Group has
been shown an increasing number of investment opportunities.
Although most of these proposals did not and will not lead to any
actual investment, a steady source of deal flows does offer more
and sometimes better potential investment selections for the Group.
On the other hand, the global economic outlook remains mixed and
uncertain with the leading advanced economies pursuing divergent
monetary policies. Meantime, the investment environment within the
private equity space continues to be competitive and challenging.
Nonetheless, given the substantial progress made by the Group since
its reactivation of business activities, I am confident that the
Group is now in a better position to achieve the investment
objective of the Company.
NOTE OF APPRECIATION
I wish to take this opportunity to thank my fellow directors and
the staff for the efforts and contribution they had made to enable
the Group to achieve satisfying progress during the year under
review. I would also like to extend a note of appreciation to
shareholders for their patience with and support of the
Company.
Alastair Gunn-Forbes
Non-Executive Chairman
29 April 2016
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 2015.
PRINCIPAL ACTIVITIES
The principal activity of the Company is investment holding. The
Company and its subsidiaries are primarily engaged in investment in
unlisted companies in the Greater China and South East Asian
region.
RESULTS
The audited consolidated loss of the Company and its
subsidiaries for the year ended 31 December 2015 was US$644,000,
compared with a loss of US$475,000 in 2014. Loss per share was
US1.14cent (2014: US0.84 cent).
Revenue in 2015 rose to US$96,000 from US$8,000 in 2014,
reflecting the full year dividend income received from the Group's
investment in the ICBC Specialised Ship Leasing Fund.
The increase in loss in 2015 was largely due to increased staff
and administration costs. As part of its business reactivation
plans, the Group has been recruiting additional staff in order to
reduce the reliance on third party professional assistance. Staff
costs increased to US$225,000 in 2015 from US$75,000 in 2014 with
US$34,000 of the increase attributed to the share-based payment
expenses associated with share options granted to the directors and
staff in December 2015. Reflecting the full year rent of the new
office to which the principal operating subsidiary of the Group,
Worldsec Investment (Hong Kong) Limited, has been relocated as part
of its business reactivation plans, rental costs increased to
US$69,600 in 2015 from US$14,500 in 2014. There was also a share of
joint venture loss of US$53,000 in 2015 against US$48,000 in 2014
arising from the Group's 50% shareholding investment in Oasis
Education Group Limited ("Oasis Education").
As at 31 December 2015, the net assets of the Group amounted to
US$3.1 million (2014: US$3.8 million), equivalent to US5.5 cents
per share (2014: US6.6 cents).
Further details of the Group's results are set out in the
consolidated statement of profit and loss and other comprehensive
income on page 17 and notes to the consolidated financial
statements on pages 21 to 52.
The Board does not propose to declare any dividend for the year
ended 31 December 2015. (2014: nil).
REVIEW
In accordance with the investment policy of the Company, a copy
of which is set out on pages 53 to 54, 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. 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 reported previously, the Group made an investment of
CHF320,000 in the equity capital of ayondo Holding AG ("Ayondo")
during 2015. The principal businesses of Ayondo, a company
incorporated in Switzerland, included Frankfurt-based ayondo GmbH,
which is a leading social trading service provider, and
London-based ayondo Markets Limited, which is a broker regulated by
the Financial Conduct Authority and which also serves as the broker
platform for the services provided by ayondo GmbH. Ayondo has more
than 190,000 users from 195 countries and is committed to expanding
into
DIRECTORS' REPORT
Asia. In November 2015, Ayondo partnered with a brokerage to
launch its first product in Singapore under a white label
arrangement allowing investors to trade in contracts for
difference. In April 2016, Ayondo made an announcement in respect
of a proposed reverse takeover transaction that could lead to
Ayondo becoming the first FinTech company to be listed on the
Singapore Stock Exchange and that could provide Ayondo a major
platform to accelerate growth particularly in Asia.
Meanwhile, Oasis Education, the joint venture in which the Group
has a 50% shareholding investment, has been making promising
progress. Its Shenzhen-based subsidiary, Oasis Education Consulting
(Shenzhen) Company Limited, "Oasis Shenzhen", provides consultation
and support services to a kindergarten (the "Huizhou Kindergarten")
located in Huizhou City of Guangdong Province in China. As at 31
December 2015, the number of pupils enrolled with the Huizhou
Kindergarten totalled 76, as compared with only five at the
beginning of the year. By the end of March 2016, the enrollment had
reached 102.
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In December 2015, the Board resolved to grant share options to
the directors and staff who were eligible participants under the
Worldsec Employee Share Option Scheme 1997 (the "Scheme"). The
purpose of the grant, details of which are set out in note 21 to
the consolidated financial statements on pages 50 to 51, was to
reward them for their commitments to the Group notwithstanding that
the Group could only afford to pay relatively limited remuneration
at the early stage of development following its reactivation of
business activities.
As mentioned above, Worldsec Investment (Hong Kong) Limited has
been recruiting additional staff as part of the Group's business
reactivation plans. Accordingly, daily business functions such as
accounting and office management have been brought under in-house
management.
During the year under review, the Group had evaluated a number
of investment opportunities in the areas of, amongst others,
financial and educational services of which negotiations and due
diligent works on two of them are continuing. Shareholders will be
informed of any further development of these projects in due
course.
PROSPECTS
Under the prevailing low interest rate environment, the Group's
investment in the ICBC Specialised Ship Leasing Fund will continue
to represent a stable and attractive source of return through high
yielding dividend income. On the other hand, should the proposed
reverse takeover transaction of Ayondo be successfully executed,
its listing on the Singapore Stock Exchange is expected to not only
better reflect the valuation but also enhance the liquidity of the
Group's investment in Ayondo.
Meanwhile, with the encouraging pupil in-take achieved by the
Huizhou Kindergarten, Oasis Education is confident of further
significant improvement in enrollment when the next school year
starts in September 2016. With this track record, Oasis Shenzhen is
prepared to explore and indentify other opportunities with the
objective of securing another kindergarten consulting and support
service contract within the next twelve to eighteen months.
On the bigger picture, the divergence in the monetary policies
amongst the leading developed countries remains a key feature of
the global financial market. This together with the slower growth
under the new-normal economy of China and the concern surrounding
the outlook of the Reminbi will add uncertainty to the private
equity investment environment particularly in the Asian region.
The Board will continue to look for and identify appropriate
investments to expand the Group's investment portfolio in
accordance with the Company's investment objective with a view to
generating sustainable growth in shareholders' value in the longer
term. As the Group remains at an early stage of development and
given the relatively small capital base of the Company, the Company
may have to raise new capital to better position the Group to
capture future investment opportunities and to implement its long
term growth strategy.
DIRECTORS' REPORT
Directors
The directors during the year under review and up to the date of
this report were:
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(*)
* independent
Brief biographical notes of the directors serving at the date of
this report are set out on pages 55 to 56.
Save as disclosed in this report and in note 22 to the
consolidated financial statements on page 51, 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.
DIRECTORS' REPORT
Messrs Alastair Gunn-Forbes and Mark Chung Fong have served on
the Board for more than nine years. (In accordance with Provision
B.7.1 of the UK Corporate Governance Code on corporate governance
published by the Financial Reporting Council (the "UK Corporate
Governance Code"), both Messrs Alastair Gunn-Forbes and Mark Chung
Fong retired by rotation and were re-elected to office by separate
resolutions passed at the Annual General Meeting held on 5 October
2015.) During the past nine year period, however, neither 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 B.1.1 of the
UK Corporate Governance Code, the Board has determined that their
independence and objectivity have not been impaired and they will
therefore be able to continue to act independently in character and
judgement.
At the Annual General Meeting held on 29 September 2014,
shareholders approved the inclusion of the Group's non-executive
directors, including Messrs Alastair Gunn-Forbes, Mark Chung Fong
and Martyn Stuart Wells, as eligible participants of 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 early
stage of development. Accordingly, and in accordance with Provision
B.1.1 of the UK Corporate Governance Code, given such
circumstances, the Board has determined that the participation of
Messrs Alastair Gunn-Forbes, Mark Chung Fong and Martyn Stuart
Wells 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:
At 1 January At 31 December
2015 2015
No. of shares No. of shares
Alastair Gunn-Forbes 30,000 30,000
Henry Ying Chew
Cheong (Note) 3,054,873 3,054,873
Mark Chung Fong Nil Nil
Ernest Chiu Shun 366,730 366,730
She Nil Nil
Martyn Stuart Wells
DIRECTORS' REPORT
Note: Mr Henry Ying Chew Cheong ("Mr Cheong")
owns, in addition to the beneficial
interest in 3,054,873 ordinary shares
of US$0.001 each in the Company, 2 ordinary
shares of US$1 each in Grand Acumen
Holdings Limited ("GAH"), representing
25% of the issued share capital of GAH.
GAH beneficially owned 6,450,000 ordinary
shares of US$0.001 each in the Company
at 1 January 2015 and 31 December 2015.
In addition, HC Investment Holdings
Limited ("HCIH") is wholly owned by
Mr Cheong. HCIH beneficially owned 10,000,000
ordinary shares of US$0.001 each in
the Company at 1 January 2015 and 31
December 2015.
In total, Mr Cheong and his associates
were the legal and beneficial owners
of 19,504,873 ordinary shares of US$0.001
each in the Company, representing 34.4%
of the Company's issued share capital,
at 1 January 2015 and 31 December 2015.
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 arrangements
with Mr Cheong or his associates.
At 1 January At 31 December
2015 2015
No. of share No. of share
options (Note) options (Note)
Alastair Gunn-Forbes Nil 500,000
Henry Ying Chew
Cheong Nil 500,000
Mark Chung Fong Nil 500,000
Ernest Chiu Shun
She Nil 500,000
Martyn Stuart
Wells Nil 500,000
Note: The share options entitle the holders
to subscribe on a one for one basis
ordinary shares of US$0.001 each in
the share capital of the Company at
an exercise price of US$0.122 per share.
The share options vest six months from
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the date of grant on 1 December 2015
and then are exercisable within a period
of 9.5 years.
Save as disclosed above, none of the above named directors had
an interest, whether beneficial or non-beneficial, in any shares or
debentures of any Group companies at the beginning or at the end of
the year under review. Save as disclosed above, none of the above
named directors, or members of their immediate families, held,
exercised or were awarded any right to subscribe for any shares or
debentures of any Group companies during the year.
The Board confirms that (i) the Company has complied with the
independence provisions set out in the Relationship Agreement since
it was entered into; and (ii) so far as the Company is aware, Mr
Cheong and his associates have complied with the independence
provisions set out in the Relationship Agreement since it was
entered into and since 1 January 2015.
DIRECTORS' REPORT
DIRECTORS' REMUNERATION
The remuneration of the directors for the year ended 31 December
2015 was as follows:
Share-based Other
Fees payment emoluments Total
expenses
US$'000 US$'000 US$'000 US$'000
Alastair Gunn-Forbes 15 6 - 21
Henry Ying Chew
Cheong 15 6 - 21
Mark Chung Fong 15 6 - 21
Ernest Chiu Shun
She 15 6 - 21
Martyn Stuart
Wells 15 6 - 21
-----------
75 30 - 105
======= =========== =========== =======
PROVIDENT FUND AND PENSION CONTRIBUTION FOR DIRECTORS
During the year under review, there was no provident fund and
pension contribution 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 to serve as non-executive director. Each of them is
entitled to a fee of GBP10,000 per annum. The appointment may be
terminated on one month notice in writing.
Messrs Henry Ying Chew Cheong and Ernest Chiu Shun She, each has
entered into a letter of appointment with the Company to serve as
executive director. Each of them is entitled to a fee of GBP10,000
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 at the discretion of the Remuneration Committee and
the Board. No bonus was recommended for the year ended 31 December
2015.
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 23 March 2016, the Company was aware of the following direct
or indirect interests (other than directors' interests)
representing 5 % or more of the Company's issued share capital:
Percentage
No. of shares of
issued share
capital
Capita IRG Trustees
(Nominees) Limited
(Note) 19,940,929 35.1%
Grand Acumen Holdings
Limited 6,450,000 11.4%
HC Investment Holdings
Limited 10,000,000 17.6%
Luis Chi Leung Tong 5,000,000 8.8%
DIRECTORS' REPORT
Note: Capita IRG Trustees (Nominees) Limited
("Capita") acts as custodian for Capita
IRG Trustees Limited (the "Depositary")
which has been appointed by the Company
to provide the depositary interest facility
in Crest. The Depositary passes all
rights and entitlements, including voting
rights, to the underlying depositary
interest holders. As such, Capita does
not constitute a controlling shareholder.
Furthermore, to the best of the knowledge
of the Company, no single one of the
underlying depositary interest holders
had depositary interests held under
Capita totalling 30% or more of the
Company's issued capital at 23 March
2016.
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;
- 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 and hence the cash flows 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 will seek to
invest in and maintain a diversified portfolio in order to spread
the investment risk of the Group.
DIRECTORS' REPORT
Investment opportunity risk
Faced with the peril of persistent economic vulnerability, most
major central banks apart from the U.S. Federal Reserve continue to
pursue highly accommodative monetary policies. Given the abundance
of liquidity, the private equity space has been awash with
investment capital and dry powder competing for quality deals. This
has been driving up valuations and narrowing the spreads of
investment returns, thereby limiting the availability of attractive
investment opportunities for the Group. In response to such
circumstances, the Company has sought approval from shareholders to
broaden its investment policy. This offers greater flexibility for
the Group to make investment choices from a broader range of
opportunities to achieve the Company's investment objective under
the challenging and competitive environment.
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 34.4%
interest in the Company's issued share capital.
Operational risks
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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 page 8.
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 page 40.
VIABILITY STATEMENT
The directors have assessed the viability of the Company for the
three years to 31 December 2018.
The directors consider that, for the purpose 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 if
not all of the principal risks and uncertainties facing the Group
over the timeframe selected for the assessment.
DIRECTORS' REPORT
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 8 to 9.
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 operating
leases with modest outstanding rental payments; 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 enquiries, and taking into account the increase in
the equity capital of the Company and the reactivation of the
Group's business activities in the latter part of 2013, 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 2015, that there was a
reasonable expectation that the Group would have adequate resources
to carry out its operations for the foreseeable future. For this
reason, as stated in note 3 to the consolidated financial
statements on pages 24 to 34, the directors have adopted the going
concern basis in preparing the consolidated financial
statements.
CORPORATE GOVERNANCE
The Company seeks to comply with the code provisions of the UK
Corporate Governance Code (a copy of which is publicly available on
the webpage of the Financial Reporting Council,
https://www.frc.org.uk/Our-Work/Publications/Corporate-Governance/UK-Corporate-Governance-Code-2014.pdf).
The Board, with a non-executive chairman and over half of its
members being non-executive directors, is committed to high
standard of corporate governance. All non-executive directors are
considered by the Board as 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.
The Board confirms that, throughout the accounting period from 1
January to 31 December 2015, the Group complied with the relevant
provisions of the UK Corporate Governance Code, apart from certain
exceptions set out and explained below.
DIRECTORS' REPORT
Although the Board believes that a Nomination Committee (as
noted in Provision B.2.1 of the UK Corporate Governance Code),
which makes recommendations to the Board on all new board
appointments, will ensure shareholders as to the suitability of a
chosen director, the Board considers that due to its size and level
of activities it is a "small" Board in the context of the UK
Corporate Governance Code and has therefore decided that it would
not be necessary to establish such a committee. All
responsibilities of such a committee have been reverted to the
Board as a whole.
Again, due to its size and level of activities, the Board has
not appointed a senior independent director and does not consider
an annual self-evaluation to be particularly meaningful. The
responsibilities normally rested with a senior independent director
have been reverted to the Board as a whole.
Likewise, as the Group is at an early stage of development
following its reactivation of business activities in the latter
part of 2013 and the scale of its operations remains relatively
insubstantial, the Board has decided that it would not be necessary
or cost-effective to set up an internal audit function. However,
the Company has set up an Audit Committee in accordance with
Provision C.3.1 of the UK Corporate Governance Code.
AUDIT COMMITTEE
The Audit Committee held four meetings during the year under
review and the table below gives the attendance record.
Director Audit Committee Meeting
Mark Chung Fong 4/4
Martyn Stuart Wells 4/4
The Audit Committee is chaired by Mr Mark Chung Fong and its
other current member is Mr Martyn Stuart Wells. The Audit Committee
is appointed by the Board and the committee's membership is
comprised 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, http://www.worldsec.com) generally follow, where
applicable, those stated in the code provisions of the UK Corporate
Governance Code.
The Audit Committee meets not less than two times a year and its
responsibilities 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 2014;
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 2015. In reappointing BDO Limited, the
Audit Committee has taken into consideration, amongst others, BDO
Limited's independence, objectivity and terms of engagement.
DIRECTORS' REPORT
Subsequent to the year end, the activities that have been
undertaken by the Audit Committee in relation to 2015 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 2015;
(ii) the review 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 service provided.
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.
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
2015, 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
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In accordance with Provision D.2.1 of the UK Corporate
Governance Code, the Company has set up a Remuneration Committee.
The Remuneration Committee held two meeting during the year under
review and the table below gives the attendance record.
Director Remuneration Committee
Meeting
Martyn Stuart Wells 2/2
Mark Chung Fong 2/2
Alastair Gunn-Forbes 2/2
The Remuneration Committee is chaired by Mr Martyn Stuart Wells
and its other current members are Messrs Alastair Gunn-Forbes and
Mark Chung Fong. The Remuneration Committee is appointed by the
Board and the committee's membership is comprised 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, http://www.worldsec.com) generally follow, where
applicable, those stated in the code provisions of the UK Corporate
Governance Code.
The Remuneration Committee meets not less than two times a year
and its 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 D.2 of the UK
Corporate Governance Code, no director should be 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 (i) the review of and recommendation to the Board to
retain the Group's previous remuneration arrangements; and (ii) the
review of and recommendation to the Board in relation to the
granting of share options to the directors and staff under the
Scheme.
DIRECTORS' REPORT
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
Martyn Stuart Wells 4/4
In addition to the above board meetings, pursuant to the
Company's bye-laws, two written resolutions were passed by all the
directors during the year under review.
WORLDSEC EMPLOYEE SHARE OPTION SCHEME 1997
On 1 December 2015, the Company granted to certain eligible
persons a total of 2,950,000 share options to subscribe for
ordinary shares of US$0.001 each in the share capital of the
Company under the Scheme. The share options vest six months from
the date of grant and then are exercisable within a period of 9.5
years.
The following table discloses the movements of the outstanding
share options under the Scheme during the year under review.
Number of options
---------------------------------------------------------------------------------
Exercise
Balance Granted Exercised Forfeited Lapsed Balance price
at during during during during at 31 per
Exercisable 1 January the the the the December share
Grantee period 2015 year year year year 2015 (US$)
----------- ------------- ------------ ---------- ---------- ---------- -------- ---------- ---------
1 June
2016
to 30
November
Directors 2025 - 2,500,000 - - - 2,500,000 0.122
1 June
2016
to 30
November
Employees 2025 - 450,000 - - - 450,000 0.122
------------ ---------- ---------- ---------- -------- ----------
- 2,950,000 - - - 2,950,000
====================================== ========== ========== ========== ======== ==========
Further details relating to the granting of the share options
during the year under review are set out in note 21 to the
consolidated financial statements on pages 50 to 51.
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 on a regular basis and on the website of the Company,
http://www.worldsec.com. 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.
DIRECTORS' REPORT
EXTERNAL AUDITOR
The consolidated financial statements of the Company and its
subsidiaries for the year ended 31 December 2015 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
29 April 2016
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 2015, 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 judgments and estimates that are reasonable and prudent;
- state whether the consolidated financial statements have been
prepared in accordance with
International Financial Reporting Standards 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 confirms that, to the best of their
knowledge and understanding, the chairman's statements on page 1
and the directors' report on pages 2 to 4 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
29 April 2016
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WORLDSEC LIMITED
(incorporated in Bermuda with limited liability)
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
We have audited the consolidated financial statements of
Worldsec Limited (the "Company") and its subsidiaries (together the
"Group") set out on pages 17 to 52, which comprise the consolidated
statement of financial position of the Group as at 31 December
2015, 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 a summary of significant accounting policies and
other explanatory information.
DIRECTORS' RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL
STATEMENTS
The directors of the Company are responsible for the preparation
of 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.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express an opinion on these
consolidated financial statements based on our audit. 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.
We conducted our audit in accordance with International
Standards on Auditing issued by International Auditing and
Assurance Standards Board. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
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An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditor's
judgement, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation of
the consolidated financial statements that give a true and fair
view 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 entity's internal control. An audit
also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the
consolidated financial statements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
opinion.
OPINION
In our opinion, the consolidated financial statements give a
true and fair view of the financial position of the Group as at 31
December 2015 and of its financial performance and cash flows for
the year then ended in accordance with International Financial
Reporting Standards as adopted by the European Union.
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. We have nothing to report
arising from our review.
BDO Limited
Certi ed Public Accountants
Alfred Lee
Practising Certi cate Number P04960
Hong Kong, 29 April 2016
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2015
Year ended 31 December
Notes 2015 2014
US$'000 US$'000
Revenue 7 96 8
Staff costs 9 (225) (75)
Other expenses (462) (360)
Share of losses of a joint
venture 14 (53) (48)
Loss before income tax
expense 10 (644) (475)
Income tax expense 11 - -
----------- -----------
Loss for the year (644) (475)
----------- -----------
Other comprehensive income,
net of income tax
Items that may be reclassified
subsequently to
profit or loss:
Exchange differences on
translating foreign
operations (3) (6)
Share of other comprehensive
income of a (19) -
joint venture
----------- -----------
Other comprehensive income
for the
year, net of income tax (22) (6)
----------- -----------
Total comprehensive income
for the year (666) (481)
=========== ===========
Loss for the year attributable
to:
Owners of the Company (644) (475)
=========== ===========
Total comprehensive income
attributable to:
Owners of the Company (666) (481)
=========== ===========
Loss per share - basic 12 US (1.14) US (0.84)
and diluted cent cent
=========== ===========
The accompanying notes form an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2015
Notes 2015 2014
US$'000 US$'000
Non-current assets
Property, plant and
equipment 13 44 67
Interest in a joint
venture 14 137 209
Available-for-sale financial
assets 15 1,125 800
------- -------
1,306 1,076
------- -------
Current assets
Other receivables - 8
Deposits 21 21
Amount due from a joint
venture 14 257 257
Cash and cash equivalents 17 1,988 2,769
2,266 3,055
------- -------
Current liabilities
Other payables and accruals 18 441 368
------- -------
Net current assets 1,825 2,687
------- -------
Net assets 3,131 3,763
======= =======
Capital and reserves
Share capital 19 57 57
Reserves 20 3,074 3,706
------- -------
Total equity 3,131 3,763
======= =======
The consolidated financial statements on pages 17 to 52 were
approved and authorised for issue by the Board of Directors on 29
April 2016 and signed on its behalf by:
Alastair Gunn-Forbes Henry Ying Chew Cheong
Director Director
The accompanying notes form an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF changes in equity
FOR THE YEAR ENDED 31 DECEMBER 2015
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 (note (note (note (note (note (note
19) 20) 20) 20) 20) 20) 20)
Balance
at 1 January
2014 57 3,837 9,646 - (2) 625 (9,919) 4,244
Loss for
the year - - - - - - (475) (475)
Other
comprehensive
income for
the year
Exchange
differences
on translating
foreign
operations - - - - (6) - - (6)
Total
comprehensive
income
for the
year - - - - (6) - (475) (481)
Balance
at 31 December
2014 and
1 January
2015 57 3,837 9,646 - (8) 625 (10,394) 3,763
------- ------- ------- ------- ----------- ------- ----------- -------
Loss for
the year - - - - - - (644) (644)
Other
comprehensive
income for
the year
Exchange
differences
on translating
foreign
operations - - - - (3) - - (3)
Share of
other
comprehensive
income of
a joint
venture - - - - (19) - - (19)
Total
comprehensive
income
for the
year - - - - (22) - (644) (666)
Recognition
of share-based
payments - - - 34 - - - 34
Balance
at 31 December
2015 57 3,837 9,646 34 (30) 625 (11,038) 3,131
======= ======= ======= ======= =========== ======= =========== =======
The accompanying notes form an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
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FOR THE YEAR ENDED 31 DECEMBER 2015
Year ended 31 December
2015 2014
US$'000 US$'000
Cash flows from operating activities
Loss for the year (644) (475)
Adjustments for:
Depreciation of property, plant
and equipment 23 2
Share of losses of a joint venture 53 48
Share-based payment expenses 34 -
Operating loss before working
capital changes (534) (425)
Decrease/(increase) in other
receivables 8 (8)
Increase in deposits - (21)
Increase/(decrease) in other
payables and accruals 73 (90)
----------- -----------
Net cash used in operating activities (453) (544)
----------- -----------
Cash flows from investing activities
Acquisition of property, plant
and equipment - (69)
Acquisition of a joint venture - (257)
Purchase of available-for-sale
financial assets (325) (800)
Advance to a joint venture - (257)
Net cash used in investing activities (325) (1,383)
----------- -----------
Net decrease in cash and cash
equivalents (778) (1,927)
Cash and cash equivalents at
the beginning of the year 2,769 4,702
Effects of exchange rate
changes (3) (6)
----------- -----------
Cash and cash equivalents at
the end of the year 1,988 2,769
=========== ===========
The accompanying notes form an integral part of these
consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
1. GENERAL INFORMATION
Worldsec Limited (the "Company") is a public listed company
incorporated in Bermuda and its shares are listed on the Main
Market of the London Stock Exchange. The address of the registered
office of the Company is Canon's Court, 22 Victoria Street,
Hamilton HM12, Bermuda. Its principal place of business address is
Unit 607, 6th Floor, FWD Financial Centre, 308 Des Voeux Road
Central, Sheung Wan, Hong Kong.
The principal activity of the Company is investment holding. The
principal activities of the Company's subsidiaries are set out in
note 16 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 the "IFRSs").
2. APPLICATION OF NEW AND REVISED IFRSs
2.1 New and revised IFRSs applied with no material effect on the
consolidated financial statements
The following new and revised IFRSs have been applied by the
Group in the current year and have affected the presentation and
disclosures set out in these consolidated financial statements. The
application of these new and revised IFRSs has not had any material
impact on the amounts reported for the current and prior years.
IFRSs (Amendments) Annual Improvements 2011-2013
Cycle
The application of the above new and revised IFRSs in the
current year had no material impact on the Group's financial
performance and financial position for the current and prior years
and/or on the disclosures set out in these consolidated financial
statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
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
that have been issued but are not yet effective:
IFRSs (Amendments) Annual Improvements 2010-2012
Cycle(1)
IFRSs (Amendments) Annual Improvements 2012-2014
Cycle(2)
Amendments to Disclosure Initiative(2)
IAS 1
Amendments to Clarification of Acceptable
IAS 16 and IAS Methods of Depreciation and
38 Amortisation(2)
Amendments to Defined Benefit Plans: Employee
IAS 19 Contributions(1)
Amendments to Equity Method in Separate Financial
IAS 27 Statements(2)
Amendments to Accounting for Acquisitions
IFRS 11 of Interests in Joint Operations(2)
(1) Effective in the EU for annual periods
beginning on or after 1 February 2015
(2) Effective in the EU for annual periods
beginning on or after 1 January 2016
Annual Improvements 2010-2012 Cycle and 2012-2014 Cycle
The amendments issued under the annual improvements process make
small, non-urgent changes to a number of standards where they are
currently unclear.
Amendments to IAS 1 - Disclosure Initiative
The amendments to IAS 1 are designed to further encourage
companies to apply professional judgement in determining what
information to disclose in their financial statements. For example,
the amendments make clear that materiality applies to the whole of
financial statements and that the inclusion of immaterial
information can inhibit the usefulness of financial disclosures,
and the amendments clarify that companies should use professional
judgement in determining where and in what order information is
presented in the financial disclosures.
Amendments to IAS 16 and IAS 38 - Clarification of Acceptable
Methods of Depreciation and Amortisation
The amendments to IAS 16 prohibit the use of a revenue-based
depreciation method for items of property, plant and equipment. The
amendments to IAS 38 introduce a rebuttable presumption that
amortisation based on revenue is not appropriate for intangible
assets. The presumption can be rebutted if either the intangible
asset is expressed as a measure of revenue or revenue and the
consumption of the economic benefits of the intangible asset are
highly correlated.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
2. APPLICATION OF NEW AND REVISED IFRSs (CONTINUED)
2.2 New and revised IFRSs in issue but not yet effective (Contiuned)
Amendments to IAS 19 - Defined Benefit Plans: Employee
Contributions
The amendments to IAS 19 clarify how an entity should account
for contributions made by employees or third parties to defined
benefit plans, based on whether those contributions are dependent
on the number of years of service provided by the employee.
For contributions that are independent of the number of years of
service, the entity may either recognise the contributions as a
reduction in the service cost in the period in which the related
service is rendered, or to attribute them to the employees' periods
of service using the projected unit credit method; whereas for
contributions that are dependent on the number of years of service,
the entity is required to attribute them to the employees' periods
of service.
Amendments to IAS 27 - Equity Method in Separate Financial
Statements
The amendments to IAS 27 allow an entity to apply the equity
method in accounting for its investments in subsidiaries, joint
ventures and associates in its separate financial statements.
Amendments to IFRS 11- Accounting for Acquisitions of Interests
in Joint Operations
The amendments to IFRS 11 require an entity to apply all of the
principles of IFRS 3 Business Combinations when it acquires an
interest in a joint operation that constitutes a business as
defined in that standard.
The principles of IFRS 3 are also applied upon the formation of
a joint operation if an existing business as defined in that
standard is contributed by at least one of the parties.
The Group has already commenced an assessment of the impact of
adopting the above standards and amendments to existing standards
to the Group. The Group is not yet in a position to state whether
these new pronouncements will result in substantial changes to the
accounting policies and consolidated financial statements of the
Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
3. SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
The consolidated financial statements of the Group have been
prepared in accordance with all applicable IFRSs issued by the
International Accounting Standards Board as adopted by the EU.
Basis of preparation
The consolidated financial statements have been prepared on a
going concern basis using the historical cost convention.
Basis of consolidation
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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: (1) power over the investee,
(2) exposure, or rights, to variable returns from the investee, and
(3) 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.
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 ventures: where the Group has rights to only the net
assets of the joint arrangement; or
- Joint operations: where the Group has both the rights to
assets and obligations for the liabilities of the joint
arrangement.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Joint arrangements (Continued)
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 amount are adjusted for the Group's share of the
post-acquisition change in the joint ventures' net assets except
that losses in excess of the Group's interest in the 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
the joint venture's profits and losses resulting from these
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
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 the 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.
Leasing
Leases are classified as finance leases whenever the terms of
the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as
operating leases.
The Group as lessee
The total rentals payable under the operating leases are
recognised in profit or loss on a straight-line basis over the
lease term. Lease incentives received are recognised as an
integrated part of the total rental expense, over the term of the
lease.
Revenue recognition
Dividend income is recognised when the right to receive payment
is established.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
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
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 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 reporting period. Exchange differences arising are
recognised in the foreign currency translation reserve.
Share-based payments
The Group operates equity-settled share-based compensation plans
and the 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 values. 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Share-based payments (Continued)
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
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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 'loss before tax' 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. The Group's current tax is calculated using
tax rates that have been enacted or substantively enacted by the
end of the reporting period.
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 profit. 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 asset 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Taxation (Continued)
Deferred tax (Continued)
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 amount 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 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.
Financial instruments
Financial assets and financial liabilities are recognised when a
group entity becomes a party to the contractual provisions of the
instruments.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to or
deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (Continued)
Financial assets
The Group classifies its financial assets at initial
recognition, depending on the purpose for which the asset was
acquired. Regular way purchases or sales of financial assets are
recognised and derecognised on a trade date basis. A regular way
purchase or sale is a purchase or sale of a financial asset under a
contract whose terms require delivery of the asset within the time
frame established generally by regulation or convention in the
marketplace concerned.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. Loans and receivables (including cash and bank balance) are
measured at amortised cost using the effective interest method,
less any impairment.
Interest income is recognised by applying the effective interest
rate, except for short-term receivables when the effect of
discounting is immaterial.
Available-for-sale financial assets
These assets are non-derivative financial assets that are
designated as available-for-sale or are not included in other
categories of financial assets. When the fair value of unlisted
equity securities cannot be reliably measured because (a) the
variability in the range of reasonable fair value estimates is
significant for that investment or (b) the probabilities of the
various estimates within the range cannot be reasonably assessed
and used in estimating fair value, such securities are stated at
cost less any impairment losses.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (Continued)
Impairment of financial assets
The Group assesses, at the end of each reporting period, whether
there is any objective evidence that a financial asset is impaired.
A financial asset is impaired if there is objective evidence of
impairment as a result of one or more events that has occurred
after the initial recognition of the asset and that event has an
impact on the estimated future cash flows of the financial asset
that can be reliably estimated.
Evidence of impairment may include:
-- significant financial difficulty of the debtor;
-- a breach of contract, such as a default or delinquency in
interest or principal payments;
-- granting concession to a debtor because of debtor's financial
difficulty; or
-- it becoming probable that the debtor will enter bankruptcy or
other financial reorganisation.
For loans and receivables
An impairment loss is recognised in profit or loss when there is
objective evidence that the asset is impaired, and is measured as
the difference between the asset's carrying amount and the present
value of the estimated future cash flows discounted at the original
effective interest rate. The carrying amount of a financial asset
is reduced through the use of an allowance account. When any part
of a financial asset is determined as uncollectible, it is written
off against the allowance account for the relevant financial
asset.
Impairment losses are reversed in subsequent periods when an
increase in the asset's recoverable amount can be related
objectively to an event occurring after the impairment was
recognised, subject to a restriction that the carrying amount of
the asset at the date the impairment is reversed does not exceed
what the amortised cost would have been had the impairment not been
recognised.
For available-for-sale financial assets
For available-for-sale equity investments that are carried at
cost, the amount of impairment loss is measured as the difference
between the carrying amount of the asset and the present value of
estimated future cash flows discounted at the current market rate
of return for a similar financial asset. Such impairment loss shall
not be reversed.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (Continued)
Derecognition of financial assets
Financial assets are derecognised when the contractual rights to
receive cash ows from the assets expire, or the nancial assets are
transferred and the Group has transferred substantially all the
risks and rewards of ownership of the nancial assets.
On derecognition of a nancial asset, the difference between the
asset's carrying amount and the sum of the consideration received
and receivable, for available-for-sale investments, and the
cumulative gain or loss that had been recognised in other
comprehensive income is reclassified to pro t or loss.
Financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by a group entity are
classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and
the definitions of a financial liability and an equity
instrument.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Company are
recognised at the proceeds received, net of direct issue costs.
Financial liabilities
Financial liabilities (including other payables and accruals)
are subsequently measured at amortised cost using the effective
interest method.
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The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments
(including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs and
other premiums or discounts) through the expected life of the
financial liability, or where appropriate a shorter period, to the
net carrying amount on initial recognition.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only
when, the Group's obligations are discharged, cancelled or they
expire. The difference between the carrying amount of the financial
liability derecognised and the consideration paid and payable is
recognised in profit or loss.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
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 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 the
consolidated statement of profit or loss immediately.
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); or
(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).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Related parties (Continued)
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 their 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.
Earnings per share
Basic earnings per share are calculated by dividing the profit
attributable to owners of the Company by the weighted average
number of ordinary shares in issue during the year.
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, 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 accounting estimates 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 a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are as follows:
(i) Depreciation
The Group depreciates property, plant and equipment using the
straight-line method over the estimated useful lives, starting from
the date on which the assets are available for use. The estimated
useful lives reflect the directors' estimate of the periods that
the Group intends to derive future economic benefits from the use
of the property, plant and equipment of the Group. The carrying
amount of property, plant and equipment is disclosed in note
13.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONTINUED)
(ii) Impairment of receivables
The Group maintains an allowance for estimated loss arising from
the inability of its debtors to make the required payments. The
Group makes its estimates based on the ageing of its receivable
balances, debtors' creditworthiness, and historical write-off
experience. If the financial condition of its debtors was to
deteriorate so that the actual impairment loss might be higher than
expected, the Group would be required to revise the basis of making
the allowance and its future results would be affected.
(iii) Impairment of non-financial assets
The Group assesses whether there are any indications of
impairment for all non-financial assets at each reporting date.
Other non-financial assets are tested for impairment when there are
indications that the carrying amounts may not be recoverable.
(iv) Impairment of available-for-sale financial assets
The directors review available-for-sale investments at the end
of each reporting period to assess whether they are impaired. The
Group records impairment charges on available-for-sale equity
investments when there is objective evidence that an impairment
indicator exists. The determination of whether the impairment
indicator exists requires judgement. In making this judgement,
management of the Group takes into account factors such as
significant changes with an adverse effect that has taken place in
technological, market, economic or legal environment in which the
investee operates, and that indicates that the cost of the
investment in the equity instrument may not be recovered.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
5. FINANCIAL instruments
(a) Categories of financial instruments
2015 2014
US$'000 US$'000
Financial assets
Loans and receivables 2,266 3,055
Available-for-sale financial
assets 1,125 800
------- -------
3,391 3,855
======= =======
Financial liabilities
Financial liabilities measured
at amortised cost 441 368
======= =======
(b) Financial risk management objectives
Management monitors and manages the financial risks relating to
the operations of the Group through internal risk reports which
analyse exposures by degree and magnitude of risks. These risks
include market risks (including foreign currency risk, interest
rate risk and price risk), credit risk and liquidity risk. The
policies on how to mitigate these risks are set out below. The
Group does not enter into or trade derivative financial instruments
for speculative purposes.
Market risks
The Group's activities expose it primarily to the financial
risks of changes in foreign currency exchange rates, interest rates
and price risk.
There has been no change to the Group's exposure to market risks
or the manner in which these risks are managed and measured.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
5. FINANCIAL instruments (CONTINUED)
(b) Financial risk management objectives (Continued)
Market risks (Continued)
(i) Foreign currency risk
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Certain financial assets and financial liabilities of the Group
are denominated in foreign currencies other than the functional
currency of the relevant group entities, which exposes the Group to
foreign currency risk. The Group currently does not have a foreign
currency hedging policy. However, management monitors foreign
exchange exposure and will consider hedging significant foreign
currency exposure should the need arise. Under the Linked Exchange
Rate System in Hong Kong, HK$ is currently pegged to the USD within
a narrow range, the directors therefore consider that there are no
significant foreign exchange risk with respect to the USD.
The currencies giving rise to this risk are primarily Euro
("EUR") and 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
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
EUR 83 2 13 18
GBP 84 88 - 9
======= ======= ======= =======
The following table details the Group's sensitivity to a 10%
(2014: 10%) increase and decrease in USD against the relevant
foreign currencies. 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 foreign exchange rates. The sensitivity analysis includes
only outstanding foreign currency denominated monetary items and
adjusts its translation as at year end for a 10% (2014: 10%) change
in the relevant foreign currencies rates. A positive number below
indicates a decrease in loss for the year where USD strengthens 10%
(2014: 10%) against the relevant foreign currency. For a 10% (2014:
10%) weakening of USD against the relevant foreign currencies there
would be an equal and opposite impact on the loss for the year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
5. FINANCIAL instruments (CONTINUED)
(b) Financial risk management objectives (Continued)
Market risks (Continued)
(i) Foreign currency risk (Continued)
2015 2014
US$'000 US$'000
Change in post-tax loss for
the year
EUR impact 7 (2)
======= =======
GBP impact 8 8
======= =======
(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 unquoted 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.
The directors consider that the exposure to price risk was
insignificant. Hence, no sensitivity analysis on the exposure to
the Group's price risk is presented.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
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 failure to discharge an
obligation by the counterparties arises from the carrying amount 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 2015,
approximately 98% (2014: 98%) 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
does not have any other significant concentration of credit
risk.
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.
Liquidity table
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
5. FINANCIAL instruments (CONTINUED)
(b) Financial risk management objectives (Continued)
Liquidity table
On demand or
less than 1 year
2015 2014
US$'000 US$'000
Other payables and
accruals 441 368
======== ========
(c) Fair value of financial instruments
The directors consider that the carrying amounts of loans and
receivables and financial liabilities recognised in the
consolidated financial statements approximated their fair
values.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
6. Capital risk management
The Group's objective of managing capital is to safeguard the
Group's 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 of equity
attributable to owners of the Company only, comprising share
capital and reserves.
7. REVENUE
The Group's revenue represents dividend income from
available-for-sale financial assets for the year. An analysis of
the Group's revenue from principal activities is as follows:
Year ended 31December
2015 2014
US$'000 US$'000
Dividend income from available-for-sale
financial assets 96 8
=========== ===========
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 2015 and 2014, 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 operating segment is
presented.
The major operations and the revenue of the Group arise from
Hong Kong. The Board of Directors considers that most of the assets
of the Group are located in Hong Kong.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
9. STAFF COSTS
The aggregate staff costs (including directors' remuneration) of
the Group were as follows:
Year ended 31
December
2015 2014
US$'000 US$'000
Wages and salaries 188 75
Contributions to pension and
provident fund 3 -
Share-based payment expenses
(note 21) 34 -
------- -------
225 75
======= =======
Compensation of key management personnel
was as follows:
Year ended 31
December
2015 2014
US$'000 US$'000
Directors' fees 75 75
Share-based payment expenses 30 -
Other remuneration including
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contributions to pension - -
and provident fund
------- -------
105 75
======= =======
10. LOSS BEFORE INCOME TAX EXPENSE
Loss before income tax expense has been arrived at after
charging:
Year ended 31
December
2015 2014
US$'000 US$'000
Auditor's remuneration
- Current year 38 36
- Under provision in prior
year - 15
------- -------
38 51
======= =======
Depreciation of property,
plant and equipment 23 2
Foreign exchange loss 1 7
Operating lease rental expenses
in respect of office
premises and warehouse 80 25
======= =======
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
11. INCOME TAX EXPENSE
No provision for taxation has been made as the Group did not
generate any assessable profits for United Kingdom Corporation Tax,
Hong Kong Profits Tax and tax in other jurisdictions.
The tax charge for 2015 and 2014 can be reconciled to the loss
before income tax expense per the consolidated statement of profit
or loss and other comprehensive income as follows:
Year ended 31 December
2015 2014
US$'000 US$'000
Loss before income tax
expense 644 475
=========== ===========
Loss before tax calculated
at 16.5% (2014: 16.5%) 106 78
Tax effect of non-deductible
expenses (67) -
Tax effect of estimated
tax losses not recognised (39) (78)
Tax charge for the year - -
=========== ===========
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 has been recognised in the financial
statements as the Group did not have material temporary difference
arising between the tax bases of assets and liabilities and their
carrying amounts as at 31 December 2015 and 2014.
12. LOSS PER SHARE
The loss and weighted average number of ordinary shares used in
the calculation of basic and diluted loss per share were as
follows.
Year ended 31 December
2015 2014
Loss for the year attributable
to owners of the
Company (US$'000) 644 475
=========== ===========
Weighted average number
of ordinary shares for
the purposes of basic and
diluted loss per share 56,734,580 56,734,580
=========== ===========
Loss per share - basic and (1.14) (0.84)
diluted cent cent
=========== ===========
Diluted loss per share was the same as basic loss per share for
the years ended 31 December 2015 and 2014 as the impact of the
potential dilutive ordinary shares outstanding had an anti-dilutive
effect on the basic loss per share presented for the years ended 31
December 2015 and 2014.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
13. PROPERTY, PLANT AND EQUIPMENT
Leasehold
improvements
US$'000
Cost
At 1 January 2014 -
Additions 69
-------------
At 31 December 2014 and
1 January 2015 69
Additions -
At 31 December 2015 69
=============
Accumulated depreciation
At 1 January 2014 -
Depreciation 2
-------------
At 31 December 2014 and
1 January 2015 2
Depreciation 23
-------------
At 31 December 2015 25
=============
Carrying amount
At 31 December 2014 67
=============
At 31 December 2015 44
=============
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
14. INTEREST IN A JOINT VENTURE
2015 2014
US$'000 US$'000
Unlisted investment, at cost 257 257
Share of post-acquisition
losses (101) (48)
Share of post-acquisition
other comprehensive income (19) -
------- -------
Share of net assets 137 209
======= =======
Amount due from a joint venture 257 257
=== ===
The amount due from a joint venture was unsecured, interest-free
and repayable on demand.
Details of the joint ventures at 31 December 2015 were as
follows:
Country Proportion Paid-up
of incorporation of ownership registered Principal
Name and operation interest Capital activities
------------------------ ------------------ ------------ -----------------
Direct Indirect
Oasis Education
Group Limited
Investment
("Oasis Education") Hong Kong 50% - HK$4,000,000 holding
( ) The People's - 50% HK$5,000,000 Provision
Republic of education
of China consulting
(the and support
"PRC") services
to kindergartens
in the
PRC
The contractual arrangement provides the Group with only the
rights to the net assets of the joint arrangement, with the rights
to the assets and obligation for the liabilities of the joint
arrangement resting primarily with Oasis Education. Under IFRS 11,
this joint arrangement is classified as a joint venture and has
been included in the consolidated financial statements using the
equity method.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
14. INTEREST IN A JOINT VENTURE (CONTINUED)
The aggregate amounts relating to the joint venture that have
been included in the consolidated financial statements of the Group
as extracted from relating financial statements of the joint
venture, adjusted to reflect adjustments made by the Group when
applying the equity method of accounting are set out below:
2015 2014
Results of the joint venture US$'000 US$'000
for the year
Revenue - -
Expenses (105) (96)
-------- --------
Loss for the year (105) (96)
Other comprehensive income for (38) -
the year
-------- --------
Total comprehensive income for
the year (143) (96)
======== ========
Share of losses of the joint
venture for the year (53) (48)
======= =====
Share of other comprehensive
income of the joint venture (19) -
for the year
=====
Accumulated share of results
of the joint venture (101) (48)
======= =====
Assets and liabilities of the joint
venture at 31 December
2015 2014
US$'000 US$'000
Non-current assets - -
Current assets 835 772
Non-current liabilities - -
Current liabilities (562) (353)
-------- --------
Net assets 273 419
======== ========
Included in the above amounts
were:
Cash and cash equivalents 22 772
Depreciation and amortisation - -
Interest income - -
(MORE TO FOLLOW) Dow Jones Newswires
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Interest expense - -
Current financial liabilities - -
(excluding trade and other payables)
======== ========
Percentage of equity interest
attributable to the Group 50% 50%
Share of net assets of the joint
venture 137 209
==== ============
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
15. AVAILABLE-FOR-SALE FINANCIAL ASSETS
2015 2014
US$'000 US$'000
Unlisted equity investment,
- at cost 1,125 800
======= =======
During the year ended 31 December 2014, the Group acquired 8%
equity interest in ICBC Specialised Ship Leasing Investment Fund
(the "ICBC Shipping Fund") for a total cash consideration of
US$800,000. The ICBC Shipping Fund is a company incorporated in the
Cayman Islands with an objective of achieving stable return from
primarily investing in marine vessels.
During the year ended 31 December 2015, the Group acquired
equity interest in ayondo Holding AG ("Ayondo") for a total cash
consideration of CHF320,000 (equivalent to approximately
US$325,000). Ayondo is a company incorporated in Switzerland and
invests in new technologies and high growth business models that
can be achieved through efficiency improvements within the banking
sector.
These investments were designated as available-for-sale
financial assets. The investments are measured at cost less
impairment at each reporting date because the investments do not
have quoted market prices in an active market, the variability in
the range of reasonable fair value estimates for the investments is
significant and therefore their fair value cannot be reliably
measured. The directors had no intention to dispose of the
available-for-sale financial assets at the end of the reporting
period.
The directors have assessed the impacts on the recoverable
amount of the financial assets and concluded that no impairment
loss needed to be made.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
16. SUBSIDIARIES
Details of the subsidiaries of the Company at 31 December 2015
were as follows:
Proportion
Country Proportion of voting
of incorporation of ownership power Principal
Name and operation interest held activities
----------------------- ------------------ ------------- ---------- -----------
British
Worldsec Financial Virgin Investment
Services Limited Islands 100% 100% holding
Worldsec Corporate British 100%* 100%* Inactive
Finance Limited Virgin
Islands
Worldsec International Netherlands 100%* 100%* Inactive
NV Antilles
Worldsec International Netherlands 100%* 100%* Inactive
(Netherlands)
BV
Worldsec International Netherlands 100%* 100%* Inactive
(PH) BV
Worldsec Investment Hong 100%* 100%* Investment
(Hong Kong) Limited Kong holding
Worldsec Investment 100%* 100%* Investment
(China) Limited British holding
Virgin
Islands
* Indirectly held subsidiaries
17. CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the end of the reporting period as
shown in the consolidated statement of financial position were as
follows:
2015 2014
US$'000 US$'000
Bank balances 1,987 2,768
Cash balances 1 1
1,988 2,769
======= =======
Bank balances bore interest at the then prevailing market rates
ranging from 0.001% to 0.01% (2014: 0.001% to 0.01%) per annum and
had original maturities of three months or less.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
18. OTHER PAYABLES AND ACCRUALS
2015 2014
US$'000 US$'000
Other payables 308 188
Accruals 133 180
------- -------
441 368
======= =======
19. SHARE CAPITAL
Number of Total
shares value
US$'000
Authorised:
Ordinary shares of US$0.001
each
At 1 January 2014, 31
December 2014,
1 January 2015 and 31
December 2015 60,000,000,000 60,000
================= =========
Called up, issued and
fully paid:
Ordinary shares of US$0.001
each
At 1 January 2014, 31
December 2014,
1 January 2015 and 31
December 2015 56,734,580 57
================= =========
20. 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 granted 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
20. RESERVES (CONTINUED)
(d) Exchange differences relating to the translation of the net
assets of the Group's foreign operations (including 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.
21. SHARE-BASED PAYMENTS
The Company operates an equity-settled share-based remuneration
schemes 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 for
ordinary shares of US$0.001 each in the share capital of the
Company under the Worldsec Employee Share Option Scheme 1997 (the
"Scheme") which was revised on 24 September 2014. The options vest
six months from the date of grant and then are exercisable within a
period of 9.5 years.
The following table discloses the movements of the outstanding
share options under the Scheme during the year ended 31 December
2015.
Number of options
---------------------------------------------------------------------------------
Exercise
Balance Granted Exercised Forfeited Lapsed Balance price
at during during during during at 31 per
Exercisable 1 January the the the the December share
Grantee period 2015 year year year year 2015 (US$)
----------- ------------- ------------ ---------- ---------- ---------- -------- ---------- ---------
1 June
2016
to 30
November
Directors 2025 - 2,500,000 - - - 2,500,000 0.122
1 June
2016
to 30
November
Employees 2025 - 450,000 - - - 450,000 0.122
------------ ---------- ---------- ---------- -------- ----------
- 2,950,000 - - - 2,950,000
====================================== ========== ========== ========== ======== ==========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
21. SHARE-BASED PAYMENTS (CONTINUED)
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The fair value of options granted during the year ended 31
December 2015 was approximately US$206,000 and was determined at
the grant date using the Black-Scholes Option Pricing Model.
Significant inputs into the calculation included the weighted
average share price of US$0.136, expected dividend yield of 0.000%
and a volatility rate of 56.850%. The volatility assumption was
based on the historical share price volatility during the year
ended 31 December 2015. Risk-free annual interest rate was
determined at 1.762%.
The share-based payment expenses of approximately US$34,000 were
charged to the profit or loss during the year ended 31 December
2015.
The options outstanding as at 31 December 2015 had a weighted
average remaining contractual life of 9.5 years and a weighted
average exercise price of US$0.122.
No option was exercised during the year ended 31 December
2015.
22. RELATED PARTY TRANSACTIONS
The Group entered into the following transactions with a related
party during the years ended 31 December 2015 and 2014:
Name of related Nature of
company transaction
2015 2014
US$'000 US$'000
WAG Worldsec Corporate
Finance Limited Consultancy
(note) fee - 32
======= =======
WAG Worldsec Corporate
Finance Limited Accounting
(note) fee 5 19
======= =======
Note: Mr. Henry Ying Chew Cheong, a director of the Company, had
beneficial interest (approximately 34%) in the related company.
There was no outstanding balance with the related party as at 31
December 2015 and 2014.
Compensation of key management personnel
Key management personnel of the Company are the directors of the
Company only. The remuneration of directors is set out on the
consolidated statement of profit or loss and other comprehensive
income and with additional disclosure in note 9 to the consolidated
financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
23. OPERATING LEASE COMMITMENTS
Operating leases - lessee
At the reporting date, the Group had future aggregate minimum
lease payments under non-cancellable operating leases in respect of
office premises and warehouse as follows:
2015 2014
US$'000 US$'000
Not later than one year 58 63
Later than one year and not
later than five years 44 101
102 164
======= =======
The leases run for an initial period of 2 to 3 years, with an
option to renew the office premises lease upon expiry when all
terms are renegotiated.
24. CONTINGENT LIABILITIES
The Group had no material contingent liabilities at 31 December
2015 (2014: nil).
INVESTMENT POLICY
The Company will invest in small to medium sized trading
companies, both start-up/early stage growth and established, being
companies 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 region,
where economic growth is expected to remain strong. 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 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.
Initial 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 will invest in 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.
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 71
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 has 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, a recruitment company and also the Chairman of
FutureBiogas, a green energy company.
Henry Ying Chew Cheong - Executive Director and Deputy Chairman
- aged 68
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 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 is an Independent Non-Executive Director of Cheung
Kong Property Holdings Limited, Cheung Kong Infrastructure Holdings
Limited, CNNC International Limited, Greenland Hong Kong Holdings
Limited, Hutchison Telecommunications Hong Kong Holdings Limited,
New World Department Store China Limited, Skyworth Digital Holdings
Limited and TOM Group 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. Mr
Cheong was an Independent Non-executive Director of Cheung Kong
(Holdings) Limited, CK Hutchison Holdings Limited (both resigned on
3 June 2015) and Creative Energy Solutions Holdings Limited
(resigned on 9 May 2016) all being listed in Hong Kong.
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Mr Cheong was a member of the Advisory Committee of the
Securities and Futures Commission and also a member of the
Securities and Futures Appeals Tribunal in Hong Kong (from
2009-2015). Mr Cheong was previously a member of Disciplinary Panel
A of Hong Kong Institute of Certified Public Accountants (from
2005-2011), a member of the Corporate Advisory Council of the Hong
Kong Securities Institute (from 2002-2009), a member of the
Advisory Committee (from 1993-1999) to the Securities and Futures
Commission ("SFC"), a member of the Board of Director 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).
BIOGRAPHICAL NOTES OF THE DIRECTORS
Ernest Chiu Shun She - Executive Director - aged 55
Mr She is an investment banker with extensive experience in the
field of corporate finance having covered a broad and diverse range
of financial advisory and fund raising activities in the Asian
regional stock markets and had held executive management positions
and directorships at Worldsec Corporate Finance Limited and UOB
Asia (Hong Kong) Limited.
Mr She was one of the cofounding team members at the Worldsec
Group of companies when they were established in the early 1990s.
Between 1991 and until the disposal by the Group of certain
securities businesses to UOB Kay Hian Holdings Limited in 2002, Mr
She spent a total of eleven years holding 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.
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.
Mr She rejoined the Group in July 2013 to assist in the
reactivation of its business activities.
Mark Chung Fong - Non-Executive Director - aged 64
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 holds a Master of Science degree from the University of
Surrey. He is a Fellow of the Institute of Chartered Accountants in
England and Wales and a Fellow and a Past President of the Hong
Kong Institute of Certified Public Accountants.
Martyn Stuart Wells - Non-Executive Director - aged 71
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAKLNAFAKEFF
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