Preliminary Statement

Worldsec Ld 28 April 2004 Worldsec Limited Preliminary Statement of Annual Results Worldsec Limited is pleased to release today its preliminary statement of annual results for the year ended 31 December 2003. The Chairman's Statement and extracts from the audited financial statements are reproduced below. Investor Relations For further information please contact: In Hong Kong Mr Paul K K Cheng Chief Operating Officer and Finance Director +852 2867 7213 CHAIRMAN'S STATEMENT RESULTS The audited consolidated profit after taxation was US$1.54m (2002: loss of US$7.87m). Earnings per share based on the weighted average number of shares in issue during the year amounted to US 11 cents (2002: loss of US 59 cents). THE YEAR IN REVIEW As a result of the Group's withdrawal from it's main business of stockbroking during the previous year, turnover fell in 2003 by 96%. The Group was however able to record a profit for the financial year due to surplus on investments realized and the recovery of doubtful receivables. Costs were pruned vigorously, particularly staff costs, as the various businesses were liquidated or sold. We now have a staff of only three. The process of realizing assets into cash proceeded well but somewhat slower than expected. The disposal of certain assets subject to regulatory approval proved to be a very time consuming exercise. During the year, the Group sold Worldsec Corporate Finance Limited and reached agreement to sell Worldsec Brokerage Limited at their respective net asset values. Completion of the sale of Worldsec Brokerage Limited is conditional upon receiving all necessary regulatory consents and the satisfaction of certain conditions precedent and it is hoped that the sale will shortly be concluded. The Group has now largely realized its investments including the sale of its listed investment in Taiwan which sale and the subsequent repatriation of the proceeds had been subjected to a lengthy process of obtaining regulatory approvals. The Group made a distribution of US45 cents per share to shareholders on 12 August 2003 and your directors had intended to make a second distribution of US35 cents per share by the end of last year. Given the cost associated with making such a distribution and our expectation that the proceeds from certain asset liquidation would be available by April 2004, it was decided to hold over the intended distribution and the directors have since resolved on 29 March 2004 to make a second distribution of US70 cents per share to shareholders payable on 28 April 2004. Chairman's Statement PROSPECTS The second distribution of US70 cents together with the distribution last year of US45 cents per share represent the bulk of the assets of the Group which had been estimated at US$1.15 per share. However, it is hoped that the eventual payout to shareholders will exceed the previous estimate of US$1.15 per share. The main remaining assets of the Group include debtors in the course of collection, brokerage trading rights and a small office property in the Philippines and some other illiquid assets. There is no certainty that some of these assets will be sold at book value nor about the likely timing of their realization into cash. However, every effort will be made to realize the remaining assets and to minimize costs while we complete the liquidation of the Group. David Archibald Evelyn Lyle Non-Executive Chairman 28 April 2003 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2003 Year ended 31 December Notes 2003 2002 US$'000 US$'000 Turnover 1 197 5,402 Fees and commission payable (216) (1,131) ________ _______ (19) 4,271 Gain on disposal of intangible assets - 159 Gain on disposal of investements 288 - Unrealised gain on investments 1,237 93 Recovery of doubtful receivables 1,391 - Other operating income 159 662 ________ _______ 3,056 5,185 Staff costs (641) (6,382) Provision for doubtful receivables - (3,250) Impairment losses (89) (201) Other operating costs (815) (3,062) _________ ________ Operating profit (loss) 1 1,511 (7,710) Interest receivable and similar income 55 204 Interest payable and similar charges (13) (277) Loss on disposal of subsidiaries and research material (14) (111) _________ _________ Profit (Loss) on ordinary activities before taxation 1,539 (7,894) Tax (charge) credit on ordinary activities 2 (2) 27 _________ _________ Profit (Loss) for the financial year 1,537 (7,867) _________ _________ Earnings (Loss) per share - basic and diluted 3 11 cents (59) cents ======= ======= The results above relate entirely to discontinued operations. CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2003 Notes 2003 2002 US$'000 US$'000 Current assets Investments 3,672 3,047 Debtors 3,266 5,698 Bank deposits and cash 7,001 18,011 ______ _____ 13,939 26,756 Creditors: Amounts falling due within one year (2,433) (10,735) ______ _____ Net current assets 11,506 16,021 Provisions for liabilities and charges - - ______ _____ Net assets 11,506 16,021 ======= ======= Capital and reserves Called up share capital 4 13 13,367 Share premium 4 - 11,664 Contributed surplus 4 19,003 - Special reserve 4 625 625 Profit and loss account 4 (7,430) (8.967) Revaluation reserve 4 281 294 Currency translation reserve 4 (986) (962) ________ ________ Equity shareholders' funds 11,506 16,021 ======= ====== CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2003 Note Year ended 31 December 2003 2002 US$'000 US$'000 Cash inflow (outflow) from operating activities 6 3,416 (1,073) __________ _________ Returns on investments and servicing of finance Interest received from banks and deposit taking companies 55 204 Interest paid on bank loans and overdrafts (13) (277) __________ _________ Net cash inflow (outflow) from returns on investments and 42 (73) servicing of finance __________ _________ Taxation 99 (144) Tax refunded (paid) __________ _________ Capital expenditure and financial investment Sale of intangible assets - 443 Sale of tangible fixed assets - 149 Sale of Shanghai exchange membership 75 - __________ __________ Net cash inflow from capital expenditure and financial 75 592 investment __________ __________ Acquisition and disposal Net cash (outflow) inflow from disposal of subsidiaries (14) 53 Net cash outflow from disposal of research materials and futures trading right - (63) _________ __________ Net cash outflows from acquisition and disposal (14) (10) _________ __________ Equity dividend paid Distribution paid (6,015) - ________ _________ Net cash outflow before use of liquid resources and (2,397) (708) financing Management of liquid resources (Increase) Decrease in time deposit of maturity exceeding (4,975) 2,427 1 day ________ _________ (Decrease) increase in cash (7,372) 1,719 ====== ======= NOTES TO THE PRELIMINARY STATEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2003 1. ANALYSIS OF TURNOVER, OPERATING PROFIT (LOSS) AND NET ASSETS The turnover attributable to the different classes of the Group's business is as follows: Year ended 31 December 2003 2002 US$'000 US$'000 Analysis by class of business: Broking and related services 197 4,683 Corporate finance - 719 _________ ________ 197 5,402 ======= ====== Geographical analysis of turnover: Hong Kong 197* 4,420 Thailand - 889 Malaysia - 6 Singapore - 37 Philippines - 6 Others - 44 ________ ________ 197 5,402 ======= ======= * The broking and related services related substantially to the Hong Kong market. The operating profit (loss) attributable to the different classes of Group's business is as follows: Broking and related services 1,511 (7,586) Corporate finance - (124) ________ _________ 1,511 (7,710) ====== ======= During the year, the operating profit of the Group was derived from the Group's operations based in Hong Kong and the net assets of the Group were related to broking activities and were substantially situated in Hong Kong. 2. TAX (CHARGE) CREDIT ON ORDINARY ACTIVITIES Year ended 31 December 2003 2002 US$'000 US$'000 The (charge) credit comprises: UK Corporation Tax Current year at 30% (2002: 30%) - - Hong Kong Profits Tax Current year at 17.5% (2002: 16%) (2) 2 Other overseas taxation - (5) _________ _________ (2) (3) - 30 _________ _________ (2) 27 ======= ======= 3. EARNINGS (LOSS) PER SHARE Calculation of earnings (loss) per share was based on the following: Year ended 31 December 2003 2002 Profit (Loss) for the financial year US$1,537,000 US$(7,867,000) ======== ========= Weighted average number of shares in issue 13,367,290 13,367,290 ======== ========= Earnings (Loss) per share 11 cents (59) cents ======== ========= 4. CAPITAL AND RESERVES CALLED UP SHARE CAPITAL Authorised: US$ Ordinary shares of US$1 each as at 1 January 2003 50,000,000 Reduced by capital reduction on 23 July 2003* 49,950,000 Ordinary shares of US$0.001 each as at 31 December 50,000 2003* - ====== Called up, issued and fully paid: 13,367,290 Ordinary shares of US$1 each as at 1 January 2003 - Reduced by capital reduction on 23 July 2003 and 13,353,923 transferred to contributed surplus* - Ordinary shares of US$0.001 each as at 31 December 13,367 2003* ======== 4. CAPITAL AND RESERVE - continued RESERVES Movements on reserves were as follows: Share Contributed Special Profit Revaluation Currency Premium surplus reserve and loss Reserve translation account reserve US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 The Group At 1 January 2003 11,664 - 625 (8.967) 294 (962) Profit for the year - - - 1,537 - - Translation adjustment - - - - (13) (24) Transfer from share premium to Contributed surplus * (11,664) 11,664 - - - - Transfer from share - 13,354 - - - - capital * Distribution paid ** - (6.015) - - - - (note 5(a)) At 31 December 2003 - 19,003 625 (7,430) 281 (986) ====== ====== ====== ====== ====== ====== * Pursuant to an ordinary resolution passed at the Company Special General Meeting held on 23 July 2003, the Company : (i) reduced the nominal value of the authorised and issued shares of the Company from US$1.00 to US$0.001 per share, and the issued share capital of the Company by US$13,353,922.71 from US$13,367,290.00 to US$13,367.29 divided into 13,367,290 new shares of US$0.001 each; (ii) reduced the amount of US$11,663,851.00 standing to the credit of the share premium account of the Company to nil; and (iii) applied the credit of US$25,017,773.71 arising from the reductions noted in (i) and (ii) above to the contributed surplus account of the Company. 5. DISTRIBUTIONS (a) On 23 July 2003, the Board resolved to pay a distribution out of the contributed surplus account of US$0.45 per share totalling US$6,015,281 to the shareholders whose names appeared in the register of members on 1 August 2003. (b) On 29 March 2004, the Board resolved to pay a distribution out of the contributed surplus account of US$0.70 per share totalling US$9,357,103 to the shareholders whose names appeared in the register of members on 13 April 2004. 6. RECONCILIATION OF OPERATING PROFIT (LOSS) TO NET CASH INFLOW (OUTFLOW) FROM OPERATING ACTIVITIES Year ended 31 December 2002 2002 US$'000 US$'000 Operating profit (loss) 1,511 (7,710) Gain on disposal of intangible assets - (159) Gain on disposal of tangible fixed assets - (38) Depreciation - 196 Provision for doubtful receivables - 3,250 Unrealised gain on investments (1,237) (93) Impairment losses 89 201 Amortisation of intangible assets 19 93 Exchange difference (72) 207 Decrease in investments held as current assets 464 67 Decrease in trade debtors 1,027 16,761 Decrease (increase) in other debtors and prepayments 1,304 (580) Decrease in cash at banks - trust accounts 8,613 10,214 Decrease in trade creditors (7,544) (23,982) (Decrease) increase in other creditors and accruals (758) 500 _________ ________ NET CASH INFLOW (OUTFLOW) FROM OPERATING ACTIVITIES 3,416 (1,073) ======= ======= 4. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Year ended 31 December 2003 2002 US$'000 US$'000 (Decrease) increase in cash (7,372) 1,719 Cash outflow (inflow) from increase (decrease) in liquid 4,975 (2,427) resources ________ ________ Movement in net funds (2,397) (708) Net funds brought forward 9,398 10,106 ________ ________ Net funds carried foward 7,001 9,398 ======= ======= This information is provided by RNS The company news service from the London Stock Exchange

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