Final Results for the year ended 31 December 2023

Statement from the Chair

Statement from the Chief Executive

Financial Review

Highlights:

· Listing Success: In April 2023 the Company listed on the Main Market of the London Stock Exchange, raising approximately €3.5 million (before expenses) on listing and a further €2.3 million from an existing investor after the listing.

· Berlin Club Opening: In May 2023 World Chess Club Berlin (worldchessclubberlin.com) officially opened after a successful soft launch during the 2022 FIDE Grand Prix. The club has established a vibrant, cultural hub for chess enthusiasts and is a model that World Chess hopes to replicate in other cities worldwide.

· Armageddon Championship Series: In September 2023 the final of the inaugural Armageddon Chess Championship was hosted by World Chess Club Berlin, the culmination of a five event series which attracted top talent and a significant three-series sponsorship agreement with it.com Domains.

· Broadcast Expansion: The Group has partnered with 33 television networks, including Bloomberg and CNBC, to broadcast its Armageddon Championship highlights globally, making the Armageddon Championship Series one of the most televised chess events.

· Digital Innovation: In October 2023, the FIDE Online Arena (chessarena.com) launched version 2.0, introducing new features and improved gameplay following significant investment during the year.

Outlook

Investment in the FIDE Platform

Opening World Chess Club Berlin and expanding our merchandise range

New tournament format and events

2024 and further ahead

Companies

Latest directors dealings

Revenue and Gross Profit

Loss per share

Cash flows

Statement of Financial Position

Capital expenditure

Investments and impairment

Cash and debt position

Going concern

1 STATUTORY INFORMATION

2 ACCOUNTING POLICIES

3 REVENUE

4 EMPLOYEES AND DIRECTORS

5 EXCEPTIONAL ITEMS

6 NET FINANCE COSTS

7 LOSS BEFORE INCOME TAX

8 INCOME TAX

9 LOSS OF PARENT COMPANY

10 EARNINGS PER SHARE

11 INTANGIBLE ASSETS

12 PROPERTY, PLANT AND EQUIPMENT

13 GOODWILL

14 INVESTMENTS

15 INVENTORIES

16 TRADE AND OTHER RECEIVABLES

17 CASH AND CASH EQUIVALENTS

18 CALLED UP SHARE CAPITAL

19 SHARE PREMIUM

20 RESERVES

21 TRADE AND OTHER PAYABLES

22 FINANCIAL LIABILITIES - BORROWINGS

23 LEASES

24 FINANCIAL INSTRUMENTS

25 CAPITAL MANAGEMENT

26 PROVISION FOR LIABILITIES

27 DEFERRED TAX

28 CONTINGENT LIABILITIES

29 RELATED PARTY DISCLOSURES

30 ULTIMATE CONTROLLING PARTY

31 SHARE-BASED PAYMENT TRANSACTIONS

32 SUBSEQUENT EVENTS

UK 100

World Chess PLC

26 April 2024

World Chess Plc

("World Chess" or the "Company")

Financial Results for the year ended 31 December 2023

World Chess plc (LSE:CHSS), a prominent chess organisation committed to enhancing the global mass market appeal of chess by introducing a variety of innovative chess-related activities, today publishes its financial results for the year ended 31 December 2023.

Copies of the Company's full Annual Report and Financial Statements for the period ended 31 December 2023 will be made available on the Company's website at https://worldchess.com and uploaded to the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Commenting on the World Chess's performance, Ilya Merenzon, CEO, said: "World Chess has delivered on several major projects during 2023, which have significantly enhanced our brand proposition. Our first chess club successfully opened in Berlin and hosted the finals of the Armageddon series. This new chess format has captured the attention of chess enthusiasts on a global scale, with match content shown across 33 different broadcast networks.

"We made an important investment in the FIDE Online Arena chess platform to upgrade the overall player experience. FIDE 2.0 went live towards to the end of 2023 and has been well received by our community and subscriptions have continued to rise.

"As we advance through 2024, we remain committed to expanding the World Chess ecosystem. We will be launching new initiatives associated with the FIDE Online Arena to help drive growth, whilst attracting new commercial partners. We look forward to bringing news of our progress throughout the rest of 2024."

For more information, please visit https://worldchess.com/investors or contact:

World Chess Ilya Merenzon, CEO	Via Yellow Jersey PR
Novum Securities Limited (Financial Advisor) David Coffman / George Duxberry	+44 (0) 20 7399 9400
Allenby Capital Limited (Broker) Joscelin Pinnington / Tony Quirke (Sales) John Depasquale / Lauren Wright (Corporate Finance)	+44 (0) 20 3328 5656
Yellow Jersey PR Charles Goodwin Annabelle Wills	+44 (0) 774 778 8221 +44 (0) 777 519 4357

Notes to Editors

About World Chess Plc

World Chess (LSE: CHSS) is a London-based chess gaming and entertainment company and Fédération Internationale des Échecs ('FIDE') official commercial partner. World Chess organized the FIDE Championship Matches in the USA, and the UK, and revolutionized the sport by signing the biggest media partnerships in history. World Chess develops Armageddon, the chess league for prime-time television. World Chess also runs FIDE Online Arena, the exclusive official chess gaming platform. More at worldchess.com.

I am pleased to report progress for World Chess Plc., during 2023. The Company continued to focus on its goal of seeking to grow by tapping into the mass market appeal of chess, driving several growth initiatives during the year.

The Company`s strategy for growth is to create diversified revenue streams spanning online gaming, tournaments, chess clubs and merchandise. Despite being one of the oldest leisure and sporting activities in the world, chess is, in the Board's view, still in its infancy in terms of commercialisation.

The Company's listing on the London Stock Exchange in April 2023, raised approximately €3.5m (before expenses) of new funds from investors. Subsequent to the listing, an existing investor agreed to subscribe a further €2.3m in tranches from September 2023, with the last tranche of this investment due to be received by May 2024. The Board believes that the listing should provide access to future funding support and has already helped to raise the profile of the World Chess brand and the sport.

During the financial year, the Company invested in the commercial areas described above, including major investment for the development, and opening of World Chess Club Berlin and the subsequent staging of the Armageddon Chess Championships at this venue.

In addition to the Berlin club, investment was made to improve the playing experience on the Company`s chess gaming platform, FIDE Online Arena. Following the strategic investment made across the business, the Board expects to see increased revenues during the course of 2024.

For the year ended 31 December 2023, the Company generated revenues of approximately €2.3m with an operating loss of approximately €4.5m, with high expenditure attributed to the London listing costs and investment projects, notably World Chess Club Berlin.

The Company continues to benefit from the considerable efforts of the management team and staff. I thank them for their hard work and commitment throughout last year, and in going forward.

The impact of inflation and higher interest rates, and resulting costs pressures, have made it a difficult environment for the Company to navigate. These economic challenges remain for the business in 2024. However, the Board is cautiously optimistic of achieving revenue growth over the course of the year. The Board intends to pursue further opportunities that align with the Company`s strategy as a chess-focused business to build shareholder value.

Graham Woolfman

Chair

25 April 2024

2023 was a pivotal period for our Company, coinciding with our debut as a listed company. At the heart of our strategic vision lies a dedication to pioneering innovative chess-related commercial ventures. By diversifying our offerings and engaging our audiences in novel and captivating ways, we aim to propel chess into the modern era while cementing its status as a cherished sport.

The funds raised through our listing on the London Stock Exchange have enabled us to make crucial investments in our digital infrastructure, notably in the enhancement of the FIDE Online Arena and the establishment of the World Chess Club Berlin. Furthermore, we have successfully increased brand recognition, agreed new commercial partnerships and laid the groundwork for growth in 2024 and beyond.

Throughout the year, we executed significant upgrades to the FIDE Online Arena, culminating in the unveiling of Arena 2.0 in the final quarter. This enhanced platform not only gives players a FIDE-recognised online rating but also delivers an improved gaming experience, boasting industry-leading speed. Additionally, our proprietary anti-cheating technology, NightWatch, has been integrated to ensure fair play, complemented by personalised chess board skins and consumer-centric updates aimed at enriching user engagement.

To improve our player acquisition, we modified our subscription model, increasing our player base by 40% to 750,000 registered users, with 8,500 'pro-members' opting for the premium experience at €50 per year.

The opening of World Chess Club Berlin marks our first foray into physical spaces. It's not just a place to play chess; it's where culture, community, and competition collide. We're crafting experiences that go beyond the sport, making chess not just a game but a lifestyle.

We have seen revenue building through the Club's café, the physical and online merchandise shop and unique chess events, including our sold-out night of 'Chess Boxing'. With plans to open more clubs in strategic locations, we are excited at the prospect of creating more welcoming spaces in the coming years.

In line with our brand-building strategy and efforts to captivate new audiences, we have expanded our range of chess-related products and branded merchandise. From exclusive chess maps to bespoke boards and pieces, our merchandise celebrates the richness and diversity of chess culture. Through these meticulously curated offerings and partnerships, we aim to elevate the chess experience and foster deeper engagement within the global chess community.

Our Armageddon Championship Series, hosted at World Chess Club Berlin, redefined the excitement surrounding chess, transforming a traditional game into a riveting spectator sport. Characterised by its high-intensity and fast-paced format, the inaugural series gained widespread acclaim and was broadcast across 33 networks, including major media outlets like Bloomberg and CNBC.

Starting in March 2023 before concluding at the Grand Finale in September 2023, this fresh new twist on competitive chess was able to take the game to a new level in terms of attracting a global audience. We also signed a partnership with IT.com Domains Ltd ('it.com Domains') for a three-series contract worth over €1.2m, underscoring the growing interest from sponsors to associate themselves with chess and the audiences we can attract.

In line with our commitment to fostering a more inclusive global chess community, we are proud to champion women within the sport. Through initiatives like our online tournament series, 'Swiss Queens Wednesday,' in collaboration with FIDE, we are striving to address the gender disparity in chess participation. A recent YouGov survey revealed that women comprise only 30% of chess players worldwide, highlighting the untapped potential for positive change and the commercial opportunities it presents.

During 2023 the Group has been building the infrastructure for our digital offering, chessarena.com, as well as the World Chess ecosystem. As we enter 2024, our primary objective is to launch these initiatives into the market, with a keen emphasis on cultivating an engaging environment for both subscribers and partners.

Our strategic vision encompasses a multifaceted approach aimed at enhancing the online chess experience. This entails leveraging innovative design elements and pioneering features to revolutionise gameplay. Concurrently, our marketing efforts will be intensified to establish Chessarena as a household name, bolstered by the introduction of media and merchandise offerings. Moreover, we are committed to expanding our business-to-business sector, introducing new products tailored for chess clubs.

Among our upcoming enhancements, we are exploring the integration of social features, such as stickers, to enrich the gaming experience. Additionally, we aspire to merge the dynamics of a sports platform with a communication app, creating a unique synergy. The implementation of cutting-edge AI technology will significantly elevate our anti-cheating measures, ensuring the integrity of gameplay. Furthermore, we envision a dedicated television product for chess, granting the sport a permanent presence on television screens globally.

We have invested substantial resources in terms of capital, expertise, and with the dedication of our team, there is still much to do in pursuit of our journey to redefine and innovate across the landscape of chess.

Ilya Merenzon
Chief Executive Officer

25 April 2024

2023 saw the Company's listing on the Main Market of the London Stock Exchange raising €3.5m for investment of €817,533 (2022: €799,866) in the development of the FIDE Online Arena; and €510,898 (2022: €635,818) in the opening of World Chess Club Berlin.

	2023	2022
	€	€
REVENUE	2,345,492	2,796,207
GROSS PROFIT	179,102	705,453
GROSS PROFIT %	8%	25%

Other operating income	11,706	92,399
Administrative expenses	(4,344,248)	(3,278,281)
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS	(4,153,440)	(2,480,429)
Addback: Depreciation and amortisation	843,237	632,936
PRE-EXCEPTIONAL ITEMS EBITDA LOSS	(3,310,203)	(1,847,493)

Exceptional Items	(326,776)	23,000
Finance costs	(191,393)	(337,460)
Finance income	139	521
LOSS BEFORE INCOME TAX	(4,671,470)	(2,794,368)

Whilst the Group has four distinct revenue generating activities, revenues in 2023 and 2022 were dominated by tournament sponsorships. 2023 saw €1,381,340 of tournament revenue being 59% of total revenue (2022: €1,711,331 being 61% of total revenue). This reduction in tournament revenue followed the Group's strategic decision to launch Armageddon, its own proprietary tournament series, rather than continue to solely promote FIDE tournaments. Whilst the Armageddon was a great success in terms of participation and media coverage, as a new event series it does not yet command the same level of sponsorship as the FIDE Grand Prix events which took place in 2022.

Part of the Group's tournament strategy is to use a dedicated event space, afforded by World Chess Club Berlin, to host events rather than constructing temporary staging for each event. This strategy led to a reduction in the average costs associated with hosting each of the five Armageddon series events, however with five events taking place in 2023 compared to the three which took place in 2022 the overall cost of sales increased by 4%, this together with the 16% fall in revenue resulted in a 75% reduction in gross profit.

The loss per share was €0.007 (2022: €0.004), resulting from both an increase in operating losses and in the weighted average number of shares in issue, from 597,912,402 in 2022 to 650,232,851 in 2023. At 31 December 2023 there were a total of 667,193,501 shares in issue.

The Consolidated Statement of Cash Flows is set out on page 52 to these consolidated financial statements, during 2023 the Group raised €3,475,569 from the issue of new equity capital on listing and a further €1,040,329 in loans were also converted into new equity capital. The Company also received €1,508,737 from an existing shareholder for a new share subscription which was issued in February 2024 as set out in note 32.

The Consolidated Statement of Financial Position as at 31 December 2023 shows the Group's total net assets having decreased to €1,007,724 (2022: €1,163,425).

The development of the FIDE Online Arena remained a priority during the year with additional investment of €817,533 (2022: €799,866), bringing the total invested to €3,924,971 with a carrying value at 31 December 2023 of €2,692,024.

As detailed in notes 11, 13 and 14 to the consolidated financial statements the Directors considered the carrying value of investments, goodwill and intangible assets at 31 December 2023 based on detailed budgets and forecasts, these budgets and forecasts generally cover a five-year period. Based on this the Directors concluded that no impairment was necessary at 31 December 2023 or 31 December 2022.

At the year end the Group has total cash balances of €186,881 (2022: €35,565) and total borrowings of €1,453,470 (2022: €2,485,797) giving a net debt figure of €1,266,589 (2022: €2,450,232).

As at 23 April 2024, the date of signing these consolidated financial statements, the Group had total cash of €220,122 (28 April 2023: €1,830,936) and total borrowings of €32,986 (28 April 2023: €62,676) giving a net debt figure of €187,136 (28 April 2023: €1,768,260).

Based on the Group's Statement of Financial Position and a review of its forecast future operating budgets and forecasts, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least twelve months from the date of signing of these consolidated financial statements. This review of future operating budgets and forecasts included certain reasonable downside scenarios and confirmed that even in the case of such downside scenarios the Group could continue to operate and meet its obligations as they fall due. Accordingly, the Directors have adopted the going concern basis in preparing the Annual Report and consolidated financial statements.

In making this assessment, the Directors have considered the resilience of the Group in severe but plausible scenarios, taking into account the principal risks and uncertainties facing the Group as detailed on page 12 and the effectiveness of any mitigating actions. The Directors' assessment considered the potential impacts of these scenarios, both individually and in combination, on the Group's business model, future performance, solvency and liquidity over the period. Sensitivity analysis was also used to stress test the Group's strategic plan and to confirm that sufficient headroom would remain under the Group's available sources of finance. The Directors consider that under each of these scenarios, the mitigating actions would be effective and sufficient to ensure the continued viability of the Group.

Richard Collett

Chief Financial Officer

25 April 2024

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023

		2023	2022
	Notes	€	€

Revenue	3	2,345,492	2,796,207
Cost of sales		(2,166,390)	(2,090,754)
GROSS PROFIT		179,102	705,453

Other operating income		11,706	92,399
Administrative expenses		(4,344,248)	(3,278,281)
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS		(4,153,440)	(2,480,429)

Exceptional Items	5	(326,776)	23,000
OPERATING LOSS		(4,480,216)	(2,457,429)

Finance costs	6	(191,393)	(337,460)
Finance income	6	139	521
LOSS BEFORE INCOME TAX	7	(4,671,470)	(2,794,368)

Income tax	8	(13,629)	332,680
LOSS FOR THE YEAR		(4,685,099)	(2,461,688)

OTHER COMPREHENSIVE INCOME
Loss on currency translation		(7,323)	(19,787)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR		(4,692,422)	(2,481,475)

Loss attributable to:
Owners of the parent		(4,685,099)	(2,461,688)

Total comprehensive income attributable to:
Owners of the parent		(4,692,422)	(2,481,475)

LOSS PER SHARE - CONTINUING AND TOTAL OPERATIONS
Basic and diluted	10	(0.007)	(0.004)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 DECEMBER 2023

		2023	2022
	Notes	€	€
NON-CURRENT ASSETS
Owned: Intangible assets	11	3,086,827	2,763,358
Owned: Property, plant and equipment	12	1,029,516	714,116
Right-of-use: Property, plant and equipment	12, 23	1,206,820	1,236,968
Deferred tax	27	63,272	76,697
		5,386,435	4,791,139

CURRENT ASSETS
Inventories	15	187,018	187,691
Trade and other receivables	16	256,464	662,566
Tax receivable		-	251,117
Cash and cash equivalents	17	186,881	35,565
		630,363	1,136,939
TOTAL ASSETS		6,016,798	5,928,078

EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Called up share capital	18	75,647	68,260
Share premium	19	11,048,183	6,518,849
Translation reserve	20	58,618	65,941
Retained earnings	20	(10,174,724)	(5,489,625)
TOTAL EQUITY		1,007,724	1,163,425

NON-CURRENT LIABILITIES
Lease liabilities	23	1,304,273	1,308,003
Provision for liabilities	26	157,887	180,652
		1,462,160	1,488,655

CURRENT LIABILITIES
Trade and other payables	21	3,397,717	2,098,204
Lease liabilities	23	116,208	95,686
Interest bearing loans and borrowings	22	32,989	1,082,108
		3,546,914	3,275,998

TOTAL LIABILITIES		5,009,074	4,764,653

TOTAL EQUITY AND LIABILITIES		6,016,798	5,928,078

The financial statements were approved by the Board of Directors and authorised for issue on 25 April 2024 and were signed on its behalf by:

A signature on a white background Description automatically generated

Ilya Merenzon
Chief Executive Officer

COMPANY STATEMENT OF FINANCIAL POSITION 31 DECEMBER 2023

		2023	2022
	Notes	€	€
NON-CURRENT ASSETS
Investments	14	301,616	301,616
		301,616	301,616

CURRENT ASSETS
Trade and other receivables	16	5,790,209	4,919,305
Tax receivable		6,025	-
Cash and cash equivalents	17	21,366	6,242
		5,817,600	4,925,547
TOTAL ASSETS		6,119,216	5,227,163

EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Called up share capital	18	75,647	68,260
Share premium	19	11,048,183	6,518,849
Retained earnings	20	(6,871,864)	(5,329,173)
TOTAL EQUITY		4,251,966	1,257,936

CURRENT LIABILITIES
Trade and other payables	21	1,867,250	2,950,159
Interest bearing loans and borrowings	22	-	1,019,068
		1,867,250	3,969,227

TOTAL LIABILITIES		1,867,250	3,969,227

TOTAL EQUITY AND LIABILITIES		6,119,216	5,227,163

As permitted by Section 408 of the Companies Act 2006, the statement of comprehensive income of the parent company is not presented as part of these financial statements. The parent company's loss for the financial year was €1,542,691 (2022: €578,448).

The financial statements were approved by the Board of Directors and authorised for issue on 25 April 2024 and were signed on its behalf by:

A signature on a white background Description automatically generated

Ilya Merenzon
Chief Executive Officer

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023

	Called up share capital	Retained Earnings	Share Premium	Translation reserve	Total equity
	€	€	€	€	€
Balance at 1 January 2022	66,996	(3,027,937)	5,520,114	85,728	2,644,901

Changes in equity
Issue of share capital	1,264	-	998,735	-	999,999
Total comprehensive income	-	(2,461,688)	-	(19,787)	(2,481,475)
Balance at 31 December 2022	68,260	(5,489,625)	6,518,849	65,941	1,163,425

Changes in equity
Issue of share capital	7,387	-	4,529,334	-	4,536,721
Total comprehensive income	-	(4,685,099)	-	(7,323)	(4,692,422)
Balance at 31 December 2023	75,647	(10,174,724)	11,048,183	58,618	1,007,724

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023

	Called up share capital	Retained Earnings	Share Premium	Total equity
	€	€	€	€
Balance at 1 January 2022	66,996	(4,750,725)	5,520,114	836,385

Changes in equity
Issue of share capital	1,264	-	998,735	999,999
Total comprehensive income	-	(578,448)	-	(578,448)
Balance at 31 December 2022	68,260	(5,329,173)	6,518,849	1,257,936

Changes in equity
Issue of share capital	7,387	-	4,529,334	4,536,721
Total comprehensive income	-	(1,542,691)	-	(1,542,691)
Balance at 31 December 2023	75,647	(6,871,864)	11,048,183	4,251,966

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

		2023	2022
	Notes	€	€
Cash flows from operating activities
Cash absorbed from operations	1	(3,338,149)	(512,077)
Interest paid		(6,638)	(179,610)
Finance cost paid		(163,495)	(157,850)
Tax refund received		250,913	20,600
Net cash used in operating activities		(3,257,369)	(828,937)

Cash flows from investing activities
Purchase of intangible fixed assets		(3,317,267)	(799,865)
Proceeds from disposal of intangible fixed assets		2,495,727	1,367,702
Purchase of property, plant and equipment		(631,603)	(635,818)
Proceeds from disposal of property, plant and equipment		1,185	23,214
Interest received		139	521
Net cash used in investing activities		(1,451,819)	(44,246)

Cash flows from financing activities
Loan advanced in the year		1,508,737	1,019,068
Loan repayments in year		(30,050)	(1,341,854)
Payment of lease liabilities		(100,596)	(21,986)
Amount introduced by directors		14,167	120,619
Proceeds from share issue		3,475,569	999,999
Net cash generated from financing activities		4,867,827	775,846

Increase/(decrease) in cash and cash equivalents		158,639	(97,337)
Cash and cash equivalents at beginning of year	2	35,565	152,689
Effect of foreign exchange rate changes		(7,323)	(19,787)
Cash and cash equivalents at end of year	2	186,881	35,565

COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

		2023	2022
	Notes	€	€
Cash flows from operating activities
Cash absorbed by operations	1	(1,655,432)	(104,814)
Interest paid		-	(84,353)
Finance cost paid		-	(123,415)
Net cash used in operating activities		(1,655,432)	(312,582)

Cash flows from investing activities
Purchase of intangible fixed assets		-	(275,000)
Interest received		106,145	20,820
Net cash generated from/(used in) from investing activities		106,145	(254,180)

Cash flows from financing activities
Loan advanced in the year		1,508,737	1,019,068
Amounts received from group undertakings		-	157,633
Amounts paid to group undertakings		(3,436,509)	(1,640,863)
Amount introduced by directors		16,613	3,060
Proceeds from share issue		3,475,570	999,999
Net cash generated from financing activities		1,564,411	538,897

Increase/(decrease) in cash and cash equivalents		15,124	(27,865)
Cash and cash equivalents at beginning of year	2	6,242	34,107
Cash and cash equivalents at end of year	2	21,366	6,242

NOTES TO THE STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

1	RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH ABSORBED FROM OPERATIONS
	Group	2023	2022
		€	€
	Loss before income tax	(4,671,470)	(2,794,368)
	Depreciation and amortisation	843,237	632,935
	Provision	(22,765)	180,652
	Finance costs	191,393	337,460
	Finance income	(139)	(521)
		(3,659,744)	(1,643,842)

	Decrease in inventories	673	30,702
	Decrease in trade and other receivables	406,102	2,699,953
	Decrease in trade and other payables	(85,180)	(1,598,890)
	Cash absorbed from operations	(3,338,149)	(512,077)

Company	2023	2022
	€	€
Loss before income tax	(1,542,691)	(578,448)
Finance costs	21,260	207,766
Finance income	(106,145)	(20,820)
	(1,627,576)	(391,502)

(Increase)/decrease in trade and other receivables	(6,118)	182,297
(Decrease)/increase in trade and other payables	(21,738)	104,391
Cash absorbed by operations	(1,655,432)	(104,814)

2	CASH AND CASH EQUIVALENTS
	The amounts disclosed on the Statements of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:
	Group	2023	2022
		€	€
	Year ended 31 December 2023
	Cash and cash equivalents	186,881	35,565

	Year ended 31 December 2022
	Cash and cash equivalents	35,565	152,689

	Company	2023	2022
		€	€
	Year ended 31 December 2023
	Cash and cash equivalents	21,366	6,242

	Year ended 31 December 2022
	Cash and cash equivalents	6,242	34,107

3	RECONCILIATION OF NET DEBT

	Group	2023	2022
		€	€
	At 31 December
	Other loans	(32,989)	(1,082,108)
	Lease liabilities	(1,420,481)	(1,403,689)
	Total Borrowings	(1,453,470)	(2,485,797)
	Cash and cash equivalents	186,881	35,565
	Net debt	(1,266,589)	(2,450,232)

Company	2023	2022
	€	€
At 31 December
Other loans	-	(1,019,068)
Cash and cash equivalents	21,366	6,242
Net cash/(debt)	21,366	(1,012,826)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

World Chess PLC is a public company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

Basis of preparation

These financial statements have been prepared in accordance with UK - adopted International Accounting Standards and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

The financial statements are presented in Euro which is the functional currency of the Group and rounded to the nearest €.

Going concern

The Directors have assessed the viability of the Group over a five-year period, taking account of the Group's current position and prospects, its strategic plan and the principal risks and how these are managed. Based on this assessment, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over this period.

In making this assessment, the Directors have considered the resilience of the Group in severe but plausible scenarios, taking into account the principal risks and uncertainties facing the Group and the effectiveness of any mitigating actions. The Directors' assessment considered the potential impacts of these scenarios, both individually and in combination, on the Group's business model, future performance, solvency and liquidity over the period. Sensitivity analysis was also used to stress test the Group's strategic plan and to confirm that sufficient headroom would remain available under the Group's credit facilities. The Directors consider that under each of these scenarios, the mitigating actions would be effective and sufficient to ensure the continued viability of the Group.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Company.

Intra-group balances and transactions are eliminated on consolidation. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as gains, but only to the extent that there is no evidence of impairment.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements in conformity with UK - adopted International Accounting Standards requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amounts, events or actions, actual results ultimately 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. The material areas in which estimates and judgements are applied as follows:

Goodwill and other intangible assets for impairment

The Group is required to test, on an annual basis, whether goodwill and other intangible assets have suffered any impairment. Determining whether there has been any impairment requires an estimation of the fair value in use of the cash-generating units. The value in use calculation requires the Directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value, the discount rate applied is 16.15% (2022: 11.83%) and the carrying value of goodwill and other intangible assets is set out in the table below (notes 11 and 13):

	Group
	2023	2022
	€	€
Exclusive FIDE rights	331,588	442,117
Software Licences	59,000	82,000
Online Platform	2,692,024	2,239,033

Crypto-assets valuation

The Group has historically received some sponsorship revenue in the form of crypto-assets which it has converted to fiat currencies at the earliest opportunity, usually upon receipt or in accordance with an agreed schedule of conversion. The Group has not traded in crypto-assets to date and such activities do not form part of its strategy.

The Group has the objective of converting crypto-assets into fiat currency, predominately US Dollars or Euros at the earliest opportunity; the rate of exchange for crypto-assets can be volatile with significant increases and decreases occurring in a few hours, the decision of when to convert crypto-assets into fiat currency is a key source of uncertainty and estimation.

Crypto-assets held by the Group are shown within intangible assets on the Consolidated Statement of Financial Position at the prevailing exchange rate (see note 11).

	Group		Company
	2023	2022	2023	2022
	€	€	€	€
Crypto-assets	4,215	208	-	-

Legal proceedings provisions

Provisions for legal proceedings are recognised as other expenses when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be measured reliably. At the Statement of Financial Position date there is an ongoing claim with one supplier, if the claim is successful then an invoice, amounting to €1,140,000, will become payable. The invoice is not included in the accounts as the Directors consider it to be null and void and raised by the supplier in breach of contract (see note 28).

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognised when control of the goods has transferred to the customer. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Any revenue received in advance gives rise to contract liabilities which is deferred and included in accruals and deferred income. The carrying amount of the deferred income included in payables being €650,098 (2022: €959,012).

No obligation for returns, refunds or other similar obligation is recognised, the Directors following careful consideration, having concluded that any potential obligation is trivial.

The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all the following conditions are satisfied:

· The Company has transferred the significant risks and rewards of ownership to the buyer;

· The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

· The amount of revenue can be measured reliably;

· It is probable that the Company will receive the consideration due under the transaction; and

· The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

· The amount of turnover can be measured reliably;

· It is probable the Company will receive the consideration due under the contract;

· The stage of completion of the contract at the end of the reporting period can be measured reliably; and

· The costs incurred and the costs to complete the contract can be measured reliably.

The policies specific to the Group's revenue types within its activities are outlined below:

Events

Revenue is recognised in the period in which the event takes place; revenue is typically linked to multiyear agreements where payment is received in advance of the event to which it relates.

Online income

Revenue is recognised over the period of the subscription; online subscriptions are paid annually in advance.

Merchandising and Clubs

Revenue is recognised when control of the goods has transferred to the customer; typically, control is transferred upon payment by the customer.

Collateral rewards received

The Group was entitled to the interest receivable on collateral provided in crypto-assets by a partner to secure a loan. The interest receivable was in exchange for share options provided to the partner. The share options were exercised in January 2021 and the loan was repaid and the collateral returned in January 2022. In 2023 rewards of €nil (2022: €9,142) were recognised within exceptional items in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

Segment reporting

IFRS 8 Operating Segments requires operating segments to be identified and reported in a manner consistent with the internal reporting provided to chief operating decision maker ('CODM'), who is responsible for allocating resources and assessing performance of the operating segments as identified by the Directors.

The Directors have reviewed the Group's activities and consider the Group to comprise a single line of business being a mass market promoter of chess. Within the single line of business, the Group undertakes integrated revenue generating activities across tournaments, an online platform and merchandise and clubs. These revenue generating activities are closely aligned within a business model which seeks to promote a chess community across tournaments, online and physical environments.

The individual revenue generating activities are managed in an integrated way by the CODM and executive management team who review financial information on the same integrated way. The Group has geographically separate operations and a geographic split of revenue as well as the split between the revenue types within its activities is included in note 3.

Cash and cash equivalents

Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value.

In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under 'current liabilities' on the Statement of Financial Position.

Goodwill

Goodwill is recorded as an intangible asset and is the surplus of the cost of acquisition over the fair value of identifiable net assets acquired. Goodwill is reviewed annually for impairment. Any impairment identified as a result of the review is charged in the Statement of Profit or Loss and Other Comprehensive Income.

Crypto-assets

Included within intangible assets are crypto-assets held in the Group's name in the Binance crypto exchange, the Group has not traded in crypto-assets to date and such activities do not form part of its strategy. The crypto-assets are not held as long-term investments, nor do they form part of the Group's inventory. The Group's strategy is to convert crypto-assets to fiat currencies at the earliest opportunity, usually upon receipt or in accordance with an agreed schedule of conversion.

Any crypto-assets received are recognised at the exchange rate prevailing at the date that the risk and reward associated with the crypto-asset passes to the Group. Where the exchange rate of the crypto-assets has a guaranteed minimum floor price, a receivable is recognised for any short-fall.

Crypto-assets are not amortised but are reviewed for impairment if the prevailing exchange rate indicates their value has fallen below their carrying value. Any impairment or realised exchange gains on the conversion of crypto-assets to fiat currency are recognised within exceptional items on the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

Other intangible assets

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets.

Intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:

· Exclusive rights to organise and host top level chess events in association with FIDE, the life of the contract, being ten years, using the straight-line method.

· Capitalised costs associated with developing the online platform used for the FIDE Online Arena, ten years using the straight-line method.

· Licences to operate certain software incorporated into the platform, the life of the contract, being five years. using the straight-line method.

The basis for choosing these useful lives is with reference to the years over which they can continue to generate value for the Group.

The Group reviews the amortisation year and methodology when events and circumstances indicate that the useful lives may have changed since the last reporting date and the amortisation charge for the year is included in Administrative Expenses in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

Property, plant and equipment

Depreciation is provided in order to write off each asset over its estimated useful life or, if held as a right-of-use asset, over the lease term, whichever is the shorter, which are typically.

· Fixtures and fittings - Straight line over 5 years

· Computer equipment - Straight line over 3 years

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other receivables and payables, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade receivables and payables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of trade debt deferred beyond normal business terms or financed at a rate of interest that is not market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the date of the Statement of Financial Position.

Financial assets and liabilities are offset, and the net amount reported in the Statement of Financial Position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Inventories

Inventories of finished goods are valued at the lower of cost and net realisable value (the estimated selling price less the estimated costs to sell), after making due allowance for obsolete and slow-moving items.

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules in the UK, USA and Germany where the Group operates, using tax rates enacted or substantively enacted by the date of the Statement of Financial Position.

Current tax represents the amount of tax payable or receivable in respect of the taxable profit (or loss) for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the date of the Statement of Financial Position.

Commercial legislation within the Russian Federation in which the Group operated prior to April 2022, including tax legislation, is subject to varying interpretations and frequent changes. The Group's management is confident that all necessary tax accruals have been made and, accordingly, no additional provision is required in the Consolidated Financial Statements.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current and previous periods. It is recognised in respect of all timing differences, with certain exceptions. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expense in tax assessments in periods different from those in which they are recognised in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences.

Research and development

Research and development expenditure is capitalised if it can be demonstrated that:

· it is technically and commercially feasible to develop the asset for future economic benefit;

· adequate resources are available to maintain and complete the development;

· there is the intention to complete and develop the asset for future economic benefit;

· the Group is able to use the asset;

· use of the asset will generate future economic benefit; and

· expenditure on the development of the asset can be measured reliably.

Other development expenditure is recognised in the Consolidated Statement of Profit and Loss as an expense as incurred.

Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses.

Foreign currencies

Assets and liabilities in foreign currencies are translated into euro at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into euro at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

IFRS 16 'Leases'

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Where ownership of the right-of-use asset transfers to the lessee at the end of the lease term, the right-of-use asset is depreciated over the asset's remaining useful life. If ownership of the right-of-use asset does not transfer to the lessee at the end of the lease term, depreciation is charged over the shorter of the useful life of the right-of-use asset and the lease term.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

· Fixed payments (including in-substance fixed payments), less any lease incentives receivable;

· Amounts expected to be payable by the lessee under residual value guarantees; and

· Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the Group's incremental borrowing rate. Right-of-use assets are measured at cost comprising the following:

· The amount of the initial measurement of lease liability;

· Any lease payments made at or before the commencement date less any lease incentives received; and

· Any initial direct costs.

Adoption of new and revised standards

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective from 1 January 2023, none of which have a material impact on these financial statements.

Standards issued but not yet effective

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the group has decided not to apply early.

The following amendments are effective for the period beginning 1 January 2024;

· IAS 1 Presentation of Financial Statements (Amendment - Classification of Liabilities as Current or Non-Current);

· IFRS 16 Leases (Amendment - Liability in a sale and leaseback); and

· IAS 7 and IFRS 7 (Amendment - Supplier Finance Arrangements).

It is not expected that the amendments listed above, once adopted, will have a material impact on the financial statements.

Financial liabilities

The Group does not have financial liabilities that would be classified as fair value through the profit or loss. Therefore, all financial liabilities are classified as other financial liabilities.

The Group use the amortised cost method for financial liabilities include borrowings, trade and other payables and are recognised at their original amount.

Revenue from contracts with customers
Revenue by business class	2023	2022
	€	€
Tournaments	1,381,341	1,711,331
Online Arena	204,151	399,074
Clubs	163,305	110,335
Merchandising	596,695	575,467
	2,345,492	2,796,207

By geographical area	2023	2022
	€	€
United Kingdom	1,391,453	2,661,639
Russia	-	27,578
United States of America	51,804	50,540
Europe	902,235	56,450
	2,345,492	2,796,207

Major customer

Included in Tournament revenue are revenues of €991,008 which are attributable to two major customers, being customers who each represent more than 10% of revenue; revenue attributable to the two major customers are Customer 1: €606,008 (2022: €1,163,411) and Customer 2: €385,000 (2022: €nil).

The aggregate payroll costs (including Directors not under employment contracts) were:

Contributions to a defined contribution pension scheme on behalf of all employees of €1,544 (2022: €nil) were made during the year.

In the opinion of the Board, only the Directors of the Company, as detailed in the Corporate Governance Report, are regarded as key management personnel. The remuneration of key management personnel during 2023 was, in aggregate, €491,490 (2022: €327,001).

Contributions to a defined contribution pension scheme on behalf of directors of €1,283 (2022: €nil) were made during the year.

Further details of Directors', including Non-Executive Directors', remuneration and fees during the year are set out in the Directors Remuneration Report on page 31 of these consolidated financial statements.

The highest paid director was Ilya Merenzon whose total remuneration was €210,000 (2022: €192,000).

In 2023 Directors Remuneration included €nil (2022: €5,000) in respect of compensation for loss of office.

The Group had no UK employees in 2023 and 2022 except the directors.

	2023	2022
	€	€
Listing costs	308,250	-
Exchange loss/(gain) on Crypto-assets	18,526	(13,472)
Gain on disposal of World Chess Russia LLC	-	27,330
Collateral rewards received	-	9,142
	326,776	23,000

Listing Costs

One-off costs associated with the Company's listing on the Main Market of the London Stock Exchange in April 2023.

Exchange loss/(gain) on Crypto-assets

The majority of the crypto-assets held by the Group was converted into fiat currency on receipt, however where crypto assets are received in stablecoin which track the US Dollar variances occur between the USD value of the crypto assets received and their equivalent Euro value.

Gain on disposal of World Chess Russia LLC

In April 2022 the entire share capital of World Chess Russia LLC was disposed of as a result, a profit on disposal of €27,330 was recognised.

Collateral rewards received

	2023	2022
	€	€
Finance income:
Loan interest receivable	139	521
	139	521

Finance costs:
Other loan interest	27,898	179,610
Interest on IFRS 16 lease liabilities	163,495	157,850
	191,393	337,460

The loss before income tax is stated after charging/(crediting):

	2023	2022
	€	€
Cost of inventories recognised as expense	2,166,390	2,090,754
Research costs expensed	90,124	88,874
Depreciation - owned assets	194,313	25,300
Depreciation - right-of-use assets	150,853	189,475
Exclusive FIDE rights amortisation	110,529	110,529
Licence amortisation	23,000	23,000
Computer software amortisation	364,542	284,632
Auditors' remuneration	109,908	72,641
Foreign exchange loss	1,970	9,790

Amortisation of intangible assets is included in Administrative expenses in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

Analysis of tax expense/(income)

	2023	2022
	€	€
Current tax:
Corporation tax	204	(255,983)

Deferred tax	13,425	(76,697)

Total tax expense/(income) in consolidated statement of profit or loss and other comprehensive income	13,629	(332,680)

Factors affecting the tax expense

The tax assessed for the year is lower (2022 - lower) the standard rate of corporation tax in the UK. The difference is explained below:

	2023	2022
	€	€
Loss before income tax	(4,671,470)	(2,794,368)

Loss multiplied by the standard rate of corporation tax in the UK of 23.52% (2022 - 19%)	(1,098,730)	(530,930)
Effect of:
Originations and reversal of temporary differences	13,425	(76,697)
Capital allowances in excess of depreciation	(262,437)	(74,706)
Non-taxable expenses	155,622	138,474
Tax losses carried forward	1,205,545	467,162
Research and development credit	-	(256,197)
Foreign tax	204	214
Tax expense/(income)	13,629	(332,680)

The corporation tax in the UK increased from 19% to 25% on 1 April 2023 an equivalent annual rate of 23.52% for the year ended 31 December 2023.

As permitted by Section 408 of the Companies Act 2006, statement of profit or loss and other comprehensive income of the parent company is not presented as part of these financial statements. The parent company's loss for the financial year was €1,542,691 (2022: €578,448).

The basic earnings per share is calculated by dividing the loss attributable to owners of the parent company by the weighted average number of shares in issue during the year. In calculating the diluted earnings per share, any outstanding share options, warrants and convertible loans are taken into account where the impact of these is dilutive.

	2023	2022
Loss attributable to the owners of the parent company €	(4,685,099)	(2,461,688)
Weighted average number of shares in issue	650,232,851	597,912,402
Basic and diluted earnings per share	(€0.007)	(€0.004)

After the reporting period, and as set out in note 32, 24,538,536 new ordinary shares were issued in February 2024 and the Company has agreed to issue a further 11,667,187 new ordinary shares in May 2024.

Group

	Exclusive FIDE rights	Software Licence	Online Platform	Crypto-assets	Total
	€	€	€	€	€
COST
At 1 January 2023	1,105,291	115,000	3,107,438	208	4,327,937
Additions	1,105,291	-	817,533	2,499,734	4,422,558
Disposals	(1,105,291)	-	-	(2,495,727)	(3,601,018)
At 31 December 2023	1,105,291	115,000	3,924,971	4,215	5,149,477
AMORTISATION
At 1 January 2023	663,174	33,000	868,405	-	1,564,579
Amortisation for year	110,529	23,000	364,542	-	498,071
Additions	773.703	-	-	-	773.703
Elimination on disposals	(773,703)	-	-	-	(773,703)
At 31 December 2023	773,703	56,000	1,232,947	-	2,062,650
NET BOOK VALUE
At 31 December 2023	331,588	59,000	2,692,024	4,215	3,086,827

The Exclusive FIDE rights were varied after the 2022 FIDE Grand Prix, this variation has been treated as the disposal if the original Exclusive FIDE rights and the acquisition of alternative Exclusive FIDE rights of the same cost and accumulated amortisation.

	Exclusive FIDE rights	Software Licence	Online Platform	Crypto-assets	Total
	€	€	€	€	€
COST
At 1 January 2022	1,105,291	115,000	2,307,572	1,367,910	4,895,773
Additions	-	-	799,866	-	799,866
Disposals	-	-	-	(1,367,702)	(1,367,702)
At 31 December 2022	1,105,291	115,000	3,107,438	208	4,327,937
AMORTISATION
At 1 January 2022	552,645	10,000	583,773	-	1,146,418
Amortisation for year	110,529	23,000	284,632	-	418,161
At 31 December 2022	663,174	33,000	868,405	-	1,564,579
NET BOOK VALUE
At 31 December 2022	442,117	82,000	2,239,033	208	2,763,358

The Directors considered the carrying value at 31 December 2023 for each asset identified above (except crypto-assets), based on a detailed budget and forecast, discounted over five years at the Groups current cost of capital, considered by the Directors to be 16.15%, and it was determined that no impairment was required. Where an asset does not generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets the carrying value was considered against the smallest identifiable group of assets that generates cash inflows (cash generating unit or CGU).

The Directors considered the carrying value at 31 December 2023 for crypto-assets based on the prevailing exchange rate at which the crypto-asset could readily be converted into US dollars or Euros and it was determined that no impairment was required.

Group

	Right of use asset	Fixtures and fittings	Computer Equipment	Total
	€	€	€	€
COST
At 1 January 2023	1,374,409	773,918	1,698	2,150,025
Additions	120,705	510,898	-	631,603
Disposals	-	(1,185)	-	(1,185)
At 31 December 2023	1,495,114	1,283,631	1,698	2,780,443
DEPRECIATION
At 1 January 2023	137,441	59,802	1,698	198,941
Charge for year	150,853	194,313	-	345,166
At 31 December 2023	288,294	254,115	1,698	544,107
NET BOOK VALUE
At 31 December 2023	1,206,820	1,029,516	-	2,236,336

	Right of use asset	Fixtures and fittings	Computer Equipment	Total
	€	€	€	€
COST
At 1 January 2022	441,942	212,236	1,698	655,876
Additions	1,374,409	635,818	-	2,010,227
Disposals	(441,942)	(74,136)	-	(516,078)
At 31 December 2022	1,374,409	773,918	1,698	2,150,025
DEPRECIATION
At 1 January 2022	419,908	85,424	1,698	507,030
Charge for year	189,475	25,300	-	214,775
Elimination on disposal	(441,942)	(50,922)	-	(492,864)
Exchange difference	(30,000)	-	-	(30,000)
At 31 December 2022	137,441	59,802	1,698	198,941
NET BOOK VALUE
At 31 December 2022	1,236,968	714,116	-	1,951,084

Included in the net book value of fixtures and fittings is €1,027,734 (2022: €647,083) relating to World Chess Club Berlin which was functionally complete at 31 December 2022 but did not yet fully open until May 2023.

Group

	2023	2022
	€	€
COST
At 1 January	136,244	142,474
Disposal	(136,244	(6,230)
At 31 December	-	136,244
IMPAIRMENTS
At 1 January	136,244	142,474
Elimination on disposal	(136,244)	(6,230)
At 31 December	-	136,244
CARRYING VALUE
At 1 January	-	-
At 31 December	-	-

Goodwill arose on the acquisition of World Chess Russia LLC and World Chess Digital Limited.

World Chess Digital Limited was dormant throughout 2022 and remained dormant until it was dissolved on 15 September 2023.

In 2022 the Group disposed of World Chess Russia LLC.

Company

Shares in group undertakings

	2023	2022
	€	€
COST
At 1 January	351,616	251,616
Additions	-	275,000
Disposals	-	(175,000)
At 31 December	351,616	351,616
IMPAIRMENTS
At 1 January	50,000	225,000
Disposals	-	(175,000)
At 31 December	50,000	50,000
CARRYING VALUE
At 1 January	301,616	26,616
At 31 December	301,616	301,616

The Directors considered the carrying value at 31 December 2023 for each group undertaking, identified below, based on a detailed budget and forecast, discounted over five years at the Groups current cost of capital, considered by the Directors to be 16.15% and it was determined that no further impairment was required.

World Chess Digital Limited was dormant throughout 2022 and remained dormant until it was dissolved on 15 September 2023, the carrying value of the investment at 31 December 2022 and the date of disposal was €nil.

In 2022 the Group disposed of World Chess Russia LLC.

The Group's investments at the Statement of Financial Position date in the share capital of companies include the following subsidiaries:

World Chess Events Limited

Registered office: Eastcastle House, 27/28 Eastcastle Street, United Kingdom, W1W 8DH

Nature of business: Organising chess events (Worldwide)

Class of shares: % holding
Ordinary 100.00

World Chess US, Inc

Registered office: 1201 N. Orange Street, Suite 762, Wilmington, New Castle County, DE, USA 19801

Nature of business: Organising chess events (USA), online chess

Class of shares: % holding
Ordinary 100.00

World Chess Europe GmbH

Registered office: Mittelstrasse 51 - 53, 10117 Berlin, Deutschland

Nature of business: Various chess related activities

Class of shares: % holding
Ordinary 100.00

During the year, World Chess PLC provided a capital contribution of €nil (2022: €275,000) to this company.

World Chess Sakartvelo LLC

Registered office: Georgia, City Tbilisi, Didube district, Ak. Tsereteli Avenue, N 49-51-51a, Entrance 3, Floor 13, Apartment N 128

Nature of business: Organising chess events, chess club activities

Class of shares: % holding
Ordinary 100.00

This company was incorporated on 2 June 2022 but did not commence trading until 1 January 2023.

World Chess Russia LLC

Registered office: 123242, Moscow, Kudrinskaya Square, 1 room XIIB

Nature of business: Organising chess events, chess club activities

Class of shares: % holding
Ordinary 0.00

In April 2022 the entire share capital in this company was disposed of.

World Chess Digital Limited (formerly CNCweb Limited)

Registered office: 21st Floor, Tay Chau Building, 262 Des Voeux Road Central, Hong Kong

Nature of business: Operation of online chess platform

Class of shares: % holding
Ordinary 0.00

World Chess Digital Limited was dormant throughout 2022 and remained dormant until it was dissolved on 15 September 2023.

The results of the subsidiaries identified above are included in the consolidated financial statements, results for World Chess Russia LLC are included up to April 2022. All subsidiaries are exempt from an audit except World Chess Events Ltd.

Group

	2023	2022
	€	€
Inventories:	187,018	187,691

	Group		Company
	2023	2022	2023	2022
	€	€	€	€
Current:
Trade receivables	29,668	452,754	-	-
Amounts owed by group undertakings	-	-	5,769,981	4,905,195
Other receivables	204,974	205,244	1,306	12,362
Prepayments and accrued income	21,822	4,568	18,922	1,748
	256,464	662,566	5,790,209	4,919,305

	Group		Company
	2023	2022	2023	2022
	€	€	€	€
Bank accounts	186,881	35,565	21,366	6,242
	186,881	35,565	21,366	6,242

	2023		2022
	Number of shares	€	Number of shares	€
Allotted, issued, and fully paid Ordinary shares of £0.0001	667,193,501	75,647	602,392,689	68,260

On 6 April 2023 the Company issued 49,650,972 new ordinary shares for total cash consideration of €3,475,568 and a further 14,861,840 new ordinary shares on the conversion of a loan totalling €1,040,329 and the entire issued share capital, comprising 666,905,501 ordinary shares were admitted for trading on the main market of the London Stock Exchange with ticker symbol CHSS.

On 4 August 2023 a further 288,000 new ordinary shares were issued to the Company's broker in settlement of their brokerage fees of €20,823.

At 31 December 2023 the number of additional shares authorised for issue is 100,000,000 (2022: 100,000,000).

	2023	2022
	€	€
At 1 January	6,518,849	5,520,114
Premium arising on issue of equity shares	4,529,334	998,735
At 31 December	11,048,183	6,518,849

Share capital comprises the amount for the nominal value of shares issued.

Share premium comprises the amount subscribed for share capital which exceeds the nominal value, after deducting costs of issue.

Retained earnings comprises of the brought forward cumulative profit and loss balances carried forward from previous accounting periods.

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

	Group		Company
	2023	2022	2023	2022
	€	€	€	€

Trade payables	728,213	657,006	7,582	81,173
Amounts owed to group undertakings	-	-	212,044	2,783,767
Social security and other taxes	45,430	21,318	8,250	-
Other payables	1,526,843	2,650	1,519,465	1,376
Accruals and deferred income	962,151	1,296,317	100,000	80,547
Amounts owed to Directors	135,080	120,913	19,909	3,296
	3,397,717	2,098,204	1,867,250	2,950,159

Included in accruals and deferred income at the start of the period was €679,087 (2022: €812,678) of deferred income which was recognised as revenue during the year.

	Group		Company
	2023	2022	2023	2022
	€	€	€	€
Current:
Other loans	32,989	1,082,108	-	1,019,068
Lease liabilities (see note 23)	116,208	95,686	-	-
	149,197	1,177,794	-	1,019,068

Non-current:
Other loans - 1-2 years	-	-	-	-
Lease liabilities (see note 23)	1,304,273	1,308,003	-	-
	1,304,273	1,308,003	-	-

Terms and debt repayment schedule

Group

	1 year or less	More than 1 year and less than 5 years	More than 5 years	Totals
	€	€	€	€
Other loans	32,989	-	-	32,989
Lease liabilities (see note 23)	116,208	619,552	684,721	1,420,481
	149,197	619,552	684,721	1,453,470

Company

	1 year or less	More than 1 year and less than 5 years	More than 5 years	Totals
	€	€	€	€
Other loans	-	-	-	-

At 31 December 2023 outstanding loans due in less than one year comprise a loan of €32,989 which accrues interest at 10% per year. (2022: loan of €1,019,068 which accrues interest at 8% per year and €63,040 which accrues interest at 10% per year.)

On 6 April 2023, a loan totalling €1,040,329 including accrued interest was converted into new ordinary shares in the Company.

Group
Right of use asset - property, plant, and equipment

	2023	2022
	€	€
COST
At 1 January	1,374,409	441,942
Additions	120,705	1,374,409
Disposals	-	(441,942)
At 31 December	1,495,114	1,374,409
DEPRECIATION
At 1 January	137,441	419,908
Charge for year	150,853	189,475
Elimination on disposal	-	(441,942)
Exchange difference	-	(30,000)
At 31 December	288,294	137,441
NET BOOK VALUE
At 31 December	1,206,820	1,236,968

All leases are accounted for in accordance with IFRS 16 Leases.

	31 December 2023	31 December 2022	31 December 2021
	€	€	€
Right of use asset	1,206,820	1,236,968	22,034
Lease liability	1,420,481	1,403,689	21,266

A right-of-use asset was recognised in 2022 for a lease on premises to be occupied by World Chess Club Berlin for a term of 10 years ending on 31 December 2031 with an effective interest rate of 11.83%. An addition to the right of use asset of €120,705 was recognised during the year following an increase in lease payments following a review.

In 2022 a right-of-use asset was disposed of during the year relating to premises occupied by the World Chess Club Moscow, the lease was for a term of 5 years ended on 30 April 2022 with an effective interest rate of 10.65%.

Total finance lease interest for 2023 was €163,495 (2022: €157,850) as detailed in note 6.

Right of use assets relating to lease properties are presented as property, plant, and equipment and amortised to the end of the lease term.

Group

Lease liabilities - minimum lease payments fall due as follows:

31 December 2023	1 year or less	More than 1 year and less than 5 years	More than 5 years	Totals
	€	€	€	€
Gross obligations repayable:	267,408	1,069,632	802,224	2,139,264
Finance charges repayable:	(151,200)	(450,080)	(117,503)	(718,783)
Net obligations repayable:	116,208	619,552	684,721	1,420,481

31 December 2022	1 year or less	More than 1 year and less than 5 years	More than 5 years	Totals
	€	€	€	€
Gross obligations repayable:	246,234	984,936	984,936	2,216,106
Finance charges repayable:	(150,548)	(474,791)	(187,078)	(812,417)
Net obligations repayable:	95,686	510,145	797,858	1,403,689

All financial instruments are measured at amortised cost and financial instruments used by the Group, from which financial instrument risk arises are as follows:

· trade and other payables

· cash and cash equivalents; and

· trade and other receivables

The main purpose of these financial instruments is to finance the Group's operations.

	2023	2022
	€	€
Other financial assets
Trade and other receivables less than one year	256,464	821,028
Cash and cash equivalents	186,881	35,773
Total financial assets	443,345	856,801

	2023	2022
	€	€
Other financial liabilities
Interest bearing loans and borrowings less than one year	149,197	1,177,794
Trade and other payables less than one year	3,397,717	2,098,199
Interest bearing loans and borrowings more than one year	1,304,273	1,308,003
Total financial liabilities	4,851,187	4,583,996

The Directors consider that the carrying value for each class of financial asset and liability, approximates to their fair value.

Financial risk management

The Group's activities expose it to a variety of risks, including market risk (foreign currency risk and interest rate risk), credit risk and liquidity risk. The Group manages these risks through an effective risk management programme, and, through this programme, the Board seeks to minimise the potential adverse effects on the Group's financial performance.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer to a financial instrument fails to meet its contractual obligations. The Group's credit risk is primarily attributable to its receivables and its cash deposits. It is Group policy to assess the credit risk of new customers before entering contracts. The Group continues to assess the risk and a further loss allowance for the full lifetime expected credit losses is recognised if the credit risk has increased significantly since initial recognition. The Group consider any contractual payment being 30 days past due, and each subsequent period of 30 days, to be an indicator of a significant increase in credit risk which may require an additional loss allowance to be recorded.

The risks specific to the Group's revenue types within its activities are outline below:

· Events, payment is typically received in accordance with multi-year agreement in advance of the event to which it relates, the Directors therefore consider the credit risk to be non-trivial but minimal.

· Online income, payment is typically received annually in advance, the Directors therefore consider the credit risk to be trivial.

· Merchandising and Clubs, payment is typically received prior to control of goods purchased being transferred to the customer, the Directors therefore consider the risk to be non-trivial but minimal.

No credit loss was recognised in 2023 or 2022.

Financial assets past due but not impaired as at 31 December 2023:

	Not impaired and not past due	Not impaired but past due by the following amounts
		>30 days	>60 days	>90 days	>120 days
	€	€	€	€	€
Group: Trade and other receivables	236,187	2,975	1,098		16,204
Company: Trade and other receivables	5,790,209	-	-	-	-

Financial assets past due but not impaired as at 31 December 2022:

	Not impaired and not past due	Not impaired but past due by the following amounts
		>30 days	>60 days	>90 days	>120 days
	€	€	€	€	€
Group: Trade and other receivables	646,901	-	-	-	15,635
Company: Trade and other receivables	4,919,305	-	-	-	-

Liquidity risk and interest rate risk

Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

The Group's funding strategy is to ensure a mix of funding sources offering flexibility and cost effectiveness to match the requirements of the Group.

At 31 December 2023 the Group had outstanding loans of €32,989 which accrues interest at a fixed rate of 10% per year. (2022: €1,019,068 which accrued interest at a fixed rate of 8% per year and was secured by collateral put up by a partner company, and €63,040 which accrues interest at a fixed rate of 10%).

Foreign currency risk

The Group's exposure to foreign currency risk is limited as most of its invoicing and payments are denominated in Euro. The Group identifies and manages currency risks using an integrated approach that takes into account the possibility of natural (economic) hedging. For the purpose of short-term management of currency risk, the Group selects the currency to reduce the open currency position (the difference between assets and liabilities in foreign currencies).

Analysis of sensitivity of financial instruments to foreign currency exchange rate risk

Currency risk is assessed monthly using sensitivity analysis and maintained within parameters approved in accordance with the Group's policy. At the reporting date, the effect of the Euro's growth/(depreciation) against other currencies in the Group's profit/(loss) before tax is not significant.

The Group's objective when managing capital is to safeguard the Group's ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits for other stakeholders.

The Group's capital management strategy is to retain sufficient working capital for operating requirements and to ensure sufficient funding is available to meet commitments as they fall due and to support growth. There are no externally imposed capital requirements.

The Group had net assets of €1,007,724 at 31 December 2023 (2022: €1,163,425), and to maintain or adjust the capital structure the Group may issue new shares of increase borrowings.

	2023	2022
	€	€
Interest bearing loans and borrowings	(1,453,470)	(2,485,797)
Cash and cash equivalents	186,881	35,565
Net indebtedness	(1,266,589)	(2,450,232)

Group

	2023	2022
	€	€
PROVISIONS
At 1 January	180,652	-
Dilapidations provision	(22,765)	180,652
At 31 December	157,887	180,652

A dilapidations provision was recognised in 2022 relating to the estimated reinstatement costs at the expiry of a new 10-year lease ending on 31 December 2031.

Group

	2023	2022
	€	€
Balance at 1 January	(76,697)	(15,733)
Movement in current year	13,425	(60,964)
Balance at 31 December	(63,272)	(76,697)

There are €6,397,725 (2022: €4,188,207) of tax losses available to the Group which at the applicable tax rate of 25% would provide an additional deferred tax asset of €1,169,681 (2022: €784,992). This has not been recognised in the financial statements due to the uncertainty of the timing of future taxable profits against which these losses could be utilised.

Deferred tax assets and liabilities are offset when the Company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Analysis of deferred tax:

	2023	2022
	€	€
Timing differences arising on provisions for liabilities, lease liabilities and losses carried forward	(470,052)	(531,931)
Timing difference arising on capital allowances in excess of depreciation	406,780	455,234
	(63,272)	(76,697)

The Group has an ongoing claim with one supplier, if the claim is successful then an invoice, amounting to €1,140,000, will become payable. The invoice is not included in the financial statements as the Directors consider it to be null and void and raised by the supplier in breach of contract.

Details of the Directors' remuneration and consultancy fees are disclosed in note 4.

Group undertakings

The following transactions took place during the year ended 31 December 2023 with and between group undertakings.

	Payments to World Chess PLC	Payments to/ (receipts from) other group undertakings
	€	€
World Chess Events Ltd
· Payment of interest	29,152	-
· Purchase of inventory	-	48,107
· Sale of inventory	-	(21,289)
· Staff and other services	78,791	1,588,378
· Commission paid on third party transactions	-	58,810
World Chess Europe GmbH
· Payment of interest	76,968	-
· Purchase of inventory	-	21,289
· Sale of Inventory	-	(48,107)
· Provision of staff and other services	-	(674,815)
World Chess US Inc.
· Commission charged on third party transactions		(58,810)
· Provision of staff and other services	-	(637.563)
World Chess Sakartvelo LLC
· Provision of staff and other services	-	(276,000)

The following transactions took place during the year ended 31 December 2022 with and between group undertakings.

	Payments to World Chess PLC	Payments to/ (receipts from) other group undertakings
	€	€
World Chess Events Ltd
· Payment of interest	12,331	-
· Purchase of inventory	-	56,153
· Sale of inventory	-	(3,823)
· Commission paid on third party transactions	-	26,473
· Interest received	-	(4,848)
World Chess Europe GmbH
· Payment of interest	7,512	-
· Purchase of inventory	-	3,823
· Sale of Inventory	-	(56,153)
World Chess US Inc.
· Commission charged on third party transactions	-	(26,473)
· Payment of interest	-	4,848

The following balances remained outstanding at 31 December 2023 from and between group undertakings.

	Due to/(from) World Chess PLC	Due to/(from) other group undertakings	Total due to/(from) group undertakings
	€	€	€
Ilya Merenzon	(18,015)	(115,171)	(133,186)
Matvey Shekhovtsov	(1,582)	-	(1,582)
Neil Rafferty	(312)	-	(312)
Group undertakings
· World Chess Events Ltd	3,290,077	781,529	4,071,606
· World Chess Europe GmbH	2,479,904	(737,526)	1,742,378
· World Chess US Inc.	(212,044)	(25,652)	(237,696)
· World Chess Sakartvelo LLC	-	(18,351)	(18,351)
	5,538,028	(115,171)	5,522,857

The following balances remained outstanding at 31 December 2022 from and between group undertakings.

	Due to/(from) World Chess PLC	Due to/(from) other group undertakings	Total due to/(from) group undertakings
	€	€	€
Ilya Merenzon	(238)	(93,256)	(93,494)
Matvey Shekhovtsov	(2,818)	(24,600)	(27,418)
Group undertakings
· World Chess Events Ltd	4,044,942	(2,005,174)	2,039,768
· World Chess Europe GmbH	860,253	99,327	959,580
· World Chess US Inc.	(2,783,767)	1,905,848	(877,919)
	2,118,372	(117,855)	2,000,517

The ultimate controlling party is Ilya Merenzon by virtue of his shareholding in the Company.

On 4 August 2023 the Company issued 288,000 new ordinary shares to its sole broker, Novum Securities Limited, for the equivalent of €20,160 in settlement of its first year's fees.

On 7 February 2024 the Company issued 21,663,386 new ordinary shares to an existing shareholder for total consideration of €1,508,737 and a further 2,867,152 new ordinary shares to Engiscent PTE Ltd, a development partner of the Company, in consideration for €200,000 of development work completed by Engiscent PTE Ltd.

On 8 February 2024 the Company announced that an existing shareholder had agreed to subscribe for 11,667,187 new ordinary shares for total consideration of €816,703 to be paid in five tranches between February 2024 and May 2024.

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END

World Chess (CHSS)

Tuesday, 3rd December 2024

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