Interim Financial Statements 2014

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Interim Financial Statements 2014

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1. Reporting entity ... 10

2. Basis of preparation ... 10

3. Capital management ... 10

4. Significant accounting policies ... 11

5. Financial assets ... 11

6. Capital and reserves ... 12

7. Borrowings ... 12

8. Subsequent events ... 13

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FINANCIAL DISCUSSION FIRST HALF YEAR

(a) Overview

The principal activity of World Markets AG (the “Company”) is the development, management and financing of projects based on undervalued natural resources. The Company targets renewable energy and sustainable forest management opportunities around the world.

(b) Key opportunities

The performance of the World Markets Group (the “Group”) in 2014 depends on the outcome of the ongoing restructuring process of the F.I.T. Timber Growth Fund Ltd and its subsidiaries (“TGF”). The development of several biomass power plants in Cambodia and other potential investments, currently under negotiation, will also play a key role in re-‐shaping the Group.

Following a one-‐off adjustment in the valuation of all TGF-‐related investments, during 2014 the Group antici-‐ pates rather modest results as several of its current projects are still in development stage and will generate income in 2015 at the earliest. For example, the biomass power plants in Cambodia are not going to start com-‐ mercial operations before 2015. Only then revenues will be generated from their part.

The Group is regularly analysing other potential investments and expansion / diversification opportunities. However, their development has been delayed due to the limitations posed by the difficult situation of TGF.

Financial highlights

(a) For the six months ended 30 June

During the first half year the Group did not generate any operating income. The main part of the operating cost is due to the ongoing reconstruction of the Group. The interest of the loans to the TGF group reduced the oper-‐ ating loss for the first six months of the financial year 2014 to TCHF 185.

(in 1 000 CHF)

2014 unaudited

KEY FIGURES

Revenue -‐ 4 564 Operating profit / (-‐) losses -‐869 2 695 Earnings / (-‐) losses before taxes -‐185 1 671 Total profit / (-‐) losses for the period -‐185 1 284

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(b) Statement of financial position as at 30 June 2014 and 31 December 2013

The total assets of the Group decreased to TCHF 22 337 as at 30 June 2014 compared to TCHF 24 658 at the end of the financial year 2013. The decrease was primarily due to the offset of an asset and a liability that have the same counterparty.

(c) Statement of changes in equity

Please see page 9 (Condensed Consolidated Statement of Changes in Equity) for more information. (d) Statement of cash flows for the six months ended 30 June

(restatement of cash flow: change from the indirect to the direct method)

Comparing the first half year of 2013 and 2014 the Group’s cash decreased by TCHF 363 down to TCHF 59. Dur-‐ ing the first 6 months of the year the Group raised a net amount of TCHF 504 cash in loans.

(in 1 000 CHF)

2013 audited KEY FIGURES

Non current assets 15 502 17 645

Current assets 6 835 7 013

Total assets 22 337 24 658

Equity 10 679 10 791

Non current liabilities 3 543 3 511

Current liabilities 8 115 10 356

Total liabilities and equity 22 337 24 658

(in 1 000 CHF)

Cash flows used for operating activities -‐454 -‐140

Cash flows used for investing activities -‐140 -‐16 476

Cash flows from / (-‐) used for financing activities 504 16 672

Net increase / (-‐) decrease in cash and cash equivalents -‐90 56

Cash and cash equivalents at beginning of period 149 366

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Risk report

An extensive risk monitoring process, created in July 2012, continues to be analysed on a quarterly basis by the Board, serving as the basis for its risk management decisions.

Currently the Board monitors the following risks on Group and project level:

-‐ Market risk; this definition summarises risks of changes in trends/following false trends, competition risks, development risks; risks from entering into new/unknown markets, acquisition risks; risks from new entering into new projects/acquisitions and cooperation risks; risks from co-‐operations and part-‐ ners.

Medium to high risks as per middle of the year were Cooperation risks (related to TGF) and Develop-‐ ment risks (in Cambodia).

-‐ Operational risk; this definition summarises risks from being public and the accuracy of public infor-‐ mation, risks of meeting certification criteria/meeting them in time, risks to assets from handling the asset and counterparty risks.

Marked as low to medium risk as TGF may face production issues as a result of overdue salary pay-‐ ments to local staff.

-‐ Legal and political risk; this definition summarises risks of political changes in countries of the Group’s activities and investments; contractual risks, litigation and claims risks.

Litigation risk is possible, but not likely as per middle of the year. It may change depending on how the situation of FIT Group develops.

-‐ Financial risk; this definition summarises the main financial risks such as credit risks, liquidity risks, market risks and currency risks. Furthermore, the Group monitors equity risks, cluster risks, risks from investment instruments, risks of high leave-‐payments, risks of unexpected massive decreases in re-‐ turns, risks of non-‐accuracy of budget and financial plans, tax risks, insurance risks and Anti Money Laundering risks.

Medium to high risks were assigned to credit risk, liquidity risks and other risks related mainly to the TGF group, which is currently going through a restructuring process. The status of such restructuring remains unclear to the Group.

The overall risk report shows a risk exposure of the Group for the period ended 30 June 2014 that is HIGH, mainly due to the exposure to TGF following the acquisition of FITML and loan facility agreement with F.I.T. Timber Ltd (“FITTL”, ISIN: VCP4172L1007).

Strategy and future development

The Group’s strategy for 2014 is to strengthen and diversify its activities by (1) supporting the restructuring process of TGF whenever possible, (2) developing the biomass power plant portfolio in Cambodia and (3) con-‐ cluding the negotiations to expand the operations in other areas. In addition to these specific businesses, the Group looks to further enhance shareholder value by moving forward with other projects currently in the pipe-‐ line that will enlarge and diversify the project and revenue base.

31 August 2014

On behalf of the Management Rolf Küng

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CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE

(Expressed in 1 000 CHF)

REVENUE

Income from sales of goods 0 3 062

Income from services 0 1 506

Unrealised gains on financial assets at fair

value through profit or loss 0 -‐4

TOTAL REVENUE 0 4 564

Costs of goods sold and sales commission 0 -‐839

Operating expenses -‐858 -‐953

Marketing expenses -‐2 -‐67

Bank charges -‐9 -‐10

OPERATING PROFIT -‐869 2 695

Interest income 981 402

Interest expense -‐346 -‐825

Foreign exchange gains / (-‐) losses 48 -‐601

EARNINGS / (-‐) LOSSES BEFORE TAXES -‐185 1 671

Income taxes 0 -‐388

TOTAL PROFIT / (-‐) LOSSES FOR THE PERIOD -‐185 1 284

BASIC EARNINGS PER SHARE -‐0.09 1.48

OTHER COMPREHENSIVE INCOME

Currency translation differences -‐86 117

TOTAL PROFIT / (-‐) LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD -‐271 1 400

2013 (unaudited) 2014

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014 AND 31 DECEMBER 2013

ASSETS

2013 (audited)

Non current assets 15 502 17 645

Investments in associates 26 26

Advances and loans 12 097 14 240

Prepayments / Project under development 3 378 3 378

Current assets 6 835 7 013

Prepaid expenses and accrued income 1 398 0 Amounts due from related parties 149 119 Receivables 5 229 6 745 Cash and cash equivalents 59 149

TOTAL ASSETS 22 337 24 658

EQUITY AND LIABILITIES

2013 (audited)

Equity 10 679 10 791

Share capital 6 527 6 527

Share premium 42 227 42 227

Retained earnings and reserves / (-‐) losses -‐38 075 -‐37 963

Non current liabilities 3 543 3 511

Borrowings 3 543 3 511

Current liabilities 8 115 10 356

Borrowings 5 364 7 946

Accounts payable 879 436

Accrued expenses 1 827 1 929

Current tax liabilities 45 45

TOTAL LIABILITIES AND EQUITY 22 337 24 658

2014 (unaudited)

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE

Cash flows from / (-‐) used for operating activities -‐454 -‐140

Cash receipts from customers 0 985

Cash paid to suppliers 0 -‐513

Cash paid for operating expenses -‐430 -‐600

Tax paid -‐23 -‐3

Currency differences on cash -‐1 -‐9

Cash flows used for investing activities -‐140 -‐16 476

Prepayments (projects in development) -‐72 -‐1 539

Purchases of marketable securities 0 -‐110

Loans granted -‐68 -‐14 827

Cash flows from financing activities 504 16 672

Proceeds from the issuance of share capital 0 1 875

Costs paid for issuance of share capital and share in kind 0 -‐1 605

Purchase of treasury shares 0 -‐313

Sale of treasury shares 0 324

Proceeds for financial debts 805 18 699

Repayment of financial debts -‐296 -‐2 294

Interest paid -‐5 -‐5

Other costs paid for financing activities 0 -‐8

Net change in cash and cash equivalents -‐90 56

Cash and cash equivalents at the beginning of the year 149 366

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE

Retained Cumulative

Share earnings and translation Total

Share capital premium reserves / (-‐) losses adjustment equity

(unaudited)

Balance at 1 January 2013 1 790 4 146 1 135 7 071

Issue of new share capital 2 678 26 932 29 610

Costs of issue of new shares, net of tax -‐1 421 -‐1 421

Net income for the period 1 284 1 284

Gains on trading with treasury shares, net of tax 10 10

Other comprehenisve income 0 0 117 117

Balance at 30 June 2013 4 468 29 667 2 535 36 670

(unaudited)

Balance at 1 January 2014 6 527 42 227 -‐37 803 -‐159 10 791

Net loss for the period -‐185 -‐185

Comprehensive loss:

Currency translation differences -‐86

Changes in currency translation differences 158

Total Comprehensive loss for the period 72 72

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NOTES TO THE INTERIM FINANCIAL STATEMENTS

1. Reporting entity

The Company is domiciled in Switzerland and is listed on the Open Market in Frankfurt, Germany (ISIN: CH0039402646 – WKN: A0NJ8B – Ticker: 4WM). The Company exists pursuant to art. 620 et seq. of the Swiss Code of Obligations and has its registered office in Hunenberg, Switzerland. On 3 July 2013 World Markets changed its purpose of business: “The purpose of the Company is the development, management and financing of primarily sustainable projects, especially in the areas of energy and the environment, locally and abroad, as well as the provision of administration and consulting services for and related to similar projects and products of all kinds.” The full purpose of the Company is published on the webpage (www.4wm.ch). These financial statements are the interim financial statements of the Company and its subsidiary for the six-‐month period ended 30 June 2014.

2. Basis of preparation

(a) Statement of compliance

These interim financial statements have been prepared in accordance with IFRS 34 “Interim Financial Report-‐ ing” issued by the International Financial Reporting Standards Board (IASB) and interpretations of the IFRS In-‐ terpretations Committee (“IFRIC”), IAS 34 “Interim Financial Reporting” as adopted by the European Union. These interim financial statements should be read in conjunction with the financial statements and the notes thereto included in the audited 2013 Annual Report of the Company (available at www.4wm.ch). Certain finan-‐ cial information that is included in the audited annual financial statements but is not required for interim re-‐ porting purposes has been condensed or omitted. These interim financial statements for the six months ending 30 June 2014 have been prepared on an ongoing concern basis as the directors believe there are no material uncertainties that lead to significant doubt that the Group can continue as a going concern in the foreseeable future, a period not less than 12 months from the date of this report.

These interim financial statements for the six months ended 30 June 2014 were approved by the Board of Di-‐ rectors and authorised for issue on 31 August 2014.

(b) Use of estimates and judgements

The preparation of the interim financial statements in conformity with IFRS requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an on-‐going basis. Revisions to accounting estimates are recognised in the year in which the estimates are revised and in any future periods affected.

The currency exchange rates applied as per 30 June 2014 were the following: 2014 (June 30) 2013 (December 31)

• EUR/CHF: 1.21429 1.2253 • USD/CHF: 0.8868 0.8886 • GBP/CHF: 1.5170 1.4721

3. Capital management

The Board’s policy is to maintain a strong capital base as to keep up shareholders’, creditors’ and market’s con-‐ fidence and to sustain future development of the business. Capital consists of share capital, share premiums,

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Interim Financial Statements 2014 The Group’s net debts to equity ratio at the reporting dates were as follows:

4. Significant accounting policies

These unaudited condensed interim consolidated financial statements are prepared using the same accounting policies as applied in the audited 2013 Annual Report.

The Group has implemented various minor amendments to existing standards and interpretations, which have no material impact on the overall result and financial position.

5. Financial assets

(a) Financial assets at fair value through profit or loss

(in 1 000 CHF) As at 30 June 2014 and 31 December 2013

2013 audited

Net debt 11 599 13 718

Total liabilities 11 658 13 867

Less: cash and cash equivalents -‐59 -‐149

Total equity 10 679 10 791

Net debt to equity ratio 108.61% 127.12%

2013 audited

Financial assets at fair value through profit or loss 0 0

F.I.T. Timber Growth Fund Ltd., St. Vincent 0 0

Opening fair value 0 828

Transaction due to consolidation 0 516

Purchases 0 42 825

Movement in fair value 0 -‐44 170

F.I.T. Timber Ltd., St. Vincent 0 0

Opening fair value 0 0

Purchases 0 181

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(b) Investments in associates

The investments are accounted for at equity.

6. Capital and reserves

As of 30 June 2014 the share capital of the Group is CHF 6 526 934.40 and is divided into 4 079 334 bearer shares with a par value of CHF 1.60 per share. The shares are fully paid-‐in, and each share is entitled to one vote. The Board of Directors is empowered, at any time but latest 18 December 2015, to increase the share capital of the Group by a maximum of CHF 3 263 467.20 by issuing a maximum number of 2 039 667 bearer shares with a par value of CHF 1.60 per share, without privileges of individual classes. The share capital has to be fully paid-‐in and increasing the share capital in partial amounts is permitted.

Earnings per share for the period ended 30 June

Diluted earnings per share: There is neither an option plan for employees in place, nor any convertible bonds outstanding.

7. Borrowings

The Group’s borrowings mainly come from private investors, who have been financing the Company for several periods. Loans are typically short term, with a fixed interest rate of around 10% p.a. The total amount due in 2014 is TCHF 8 907. The interest expenses for the first six months in 2014 amounted to TCHF 346.

2013 audited

21 21

Opening value (40 shares) at cost 21 21

CPP Holdings PTE. Ltd., Singapore 5 5

Opening value at cost 5 0

Prepayment 0 5

AURA Donsoco Holdings AG, Zürich (40%)

(formerly: Southern Partners AG)

(in CHF)

2013 unaudited Basic earnings per share

Profit on ordinary activities after taxation -‐185 462 1 283 622 Adjustment to reflect impact of dilutive share options

Earnings -‐185 462 1 283 622

Number of shares in issue (weighted average) 2 011 726 868 037 Basic earnings per share being diluted earnings per share -‐0.09 1.48

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8. Subsequent events

The Board identified no further issues or transactions between 30 June 2014 and the date of issue of the inter-‐ im condensed financial statement, which affect the financial statements and would need to be disclosed in accordance with IAS 10.

Interim Financial Statements 2014