Final Results for year ended 31 Dec 2013

15 December 2014 CLEAR LEISURE PLC ("Clear Leisure" or "the Group" or "the Company") FINAL CONSOLIDATED AUDITED RESULTS For the year Ended 31 December 2013 Clear Leisure today announces its audited results for the year ended 31December 2013. Copies of the Company's Annual Report and Accounts will be sent to shareholderswill be sent to shareholders and will be available on the Company's websitewww.clearleisure.com today. Further copies may be obtained directly from theCompany's registered office at Clear Leisure plc, 45 Pont Street, London SW1X0BD. For further information please contact: Clear Leisure plc +39 02 4795 1642Alfredo Villa, CEO Cairn Financial Advisers LLP (Nominated Adviser) +44 (0) 20 7148 7900Jo Turner / Liam Murray Peterhouse Corporate Finance (Broker) +44 (0) 20 7469 0935Heena Karani Leander (Financial PR) +44 (0) 7795 168 157Christian Taylor-Wilkinson About Clear Leisure plc Clear Leisure Plc (AIM: CLP) is an AIM listed investment company pursuing adynamic strategy to create a comprehensive portfolio of companies primarilyencompassing the leisure and real estate sectors mainly in Italy but also otherEuropean countries. The Company may be either a passive or active investor andClear Leisure's investment rationale ranges from acquiring minority positionswith strategic influence through to larger controlling positions. For furtherinformation, please visit, www.clearleisure.com The financial information set out below does not constitute the Company'sstatutory accounts for the periods ending 31 December 2013 or 31 December2012. The financial information for 2013 and 2012 is derived from thestatutory accounts for those years. The statutory accounts for 2012 have beendelivered to the Registrar of Companies. The statutory accounts for 2013 willbe delivered to the Registrar of Companies following the Company's annualgeneral meeting. The auditors, Welbeck Associates, have reported on the 2013and 2012 accounts. The report for 2013 was qualified as disclosed in theIndependent Auditors' Report. This preliminary announcement has been preparedon the basis of the accounting policies as stated in the financial statementsfor the period ended 31 December 2013. The information included in thispreliminary announcement is based on the Company's financial statements, whichare prepared in accordance with International Financial Reporting Standards(IFRS). CHAIRMAN'S STATEMENT The past 12 months have been very challenging for the Company, mostly due tothe unforeseen closing and subsequent write-down of our tour operator and hotelmanagement company, ORH SpA, at the start of 2014. This loss was particularlyhard felt following ORH's positive contribution to the Group in the first sixmonths of 2013. The Board's initial investigations in to the operations of the ORH Groupreveled that there were serious financial irregularities in its operations andthis left the Board with no option but to indefinitely suspend operations andwrite down the entire investment to zero in 2013. This resulted an exceptionalcharge of Euro 7.4 million. The Company will continue to pursue legal actionagainst the former directors and owners of ORH S.p.A through both civil andcriminal courts in Italy, with the view that compensation will be recovered indue course. The collapse of the Ora Hotel chain, together with the Board's decision toadopt a more prudent approach to the valuations placed on the Group's otherassets, this had contributed to the delay in publishing the accounts for 2013.The Italian economy continues to deteriorate, a situation that has been inevidence since 2009, with acceleration in the last three years. This hasparticularly impacted the leisure and hotel sectors, where the Company's assetsoperate, leading to impairment losses and provisions of Euro 5.3 million, whichtaken together with the write down of our investment in ORH, represents much ofthe Company's loss for the year. However and despite these events, the Company has continued its strategy torestructure its holdings, reduce its debt position and overheads, establish amore accurate valuation for each of its assets, and to create more desirableconditions to improve the salability of certain assets, such as the MediapolisInvestment. The Board is pleased with the initial results of this strategy and expects tobe able to present to its shareholders a clearer and more positive financialposition and asset valuation. Despite the adverse and difficult economic conditions in Italy in the past fewyears the Board honored its undertaking to shareholders that was made inFebruary 2013, to not issue further Clear Leisure stock to support its businessactivities. The current Net Asset Value per share in the financial statements is 7 penceper share, and is considerably higher than the last closing price of our stockand above the 2013 STRATEGIC REPORT The Directors present their Strategic Report on Clear Leisure plc and itssubsidiary undertakings ("the Group") for the year ended 31 December 2013. The Strategic Report is a new statutory requirement under section 414A of theCompanies Act 2006 (Strategic Report and Directors' Report) Regulations 2013and is intended to provide fair, balanced and understandable information thatenables the Directors to be satisfied that they have complied with section 172of the Companies Act 2006, which sets out the Directors' duty to promote thesuccess of the Group and Company. REVIEW OF THE BUSINESS AND DEVELOPMENTS DURING THE YEAR During the year, the Group completed a placing of a zero coupon convertiblebond at a conversion price of 15p per share and issued at 78% of face value.The Group sold €3,000,000 to different European institutions, with theremaining €6,900,000 held in the Group's treasury account. The net proceeds ofthe issue were used to buy back, at a discount, existing debt positions. In October 2013 the Company announced that ORH Spa had temporarily suspendedoperations pending an investigation into suspected financial irregularitieswithin the ORH group. The investigation confirmed the Board's suspicions thatthere had been serious financial irregularities within the ORH group, and on 3December 2013, the Group announced that legal action had resulted in thesettlement of its investment in the subsidiary. The settlement resulted in adisposal of part of the Group's holding in ORH S.p.A. In addition a liquidatorwas appointed by a tribunal in Milan on 2 February 2014. These two events haveresulted in the Group no longer holding a controlling interest in ORH S.p.A. The Group made progress in settling creditors throughout the year. On 6February 2013, the Group entered into a conditional agreement with certaincreditors to buy back £2,704,594 of Clear Leisure debt for a cash amount of £1,576,165. The Group repaid debt of EUR 230,000 to an outstanding creditor byissuing 3.2 million Clear Leisure Ordinary shares at a price of 6p per share.The Group repaid clients of Eufingest S.A. the amount of £600,000 in settlementof a short-term loan through the issue of 15 million Clear Leisure Ordinaryshares at a price of 4p per share. Mr Alfredo Villa, CEO and Interim Chairman of the Group has offered to forgohis salary of £120,000 for a period of one year. Mr Villa has also proposedthat the outstanding salary of £85,000 owed to him in this current financialyear, ending 31 December 2013, may be written-off or converted into ClearLeisure Plc ordinary shares should the Company undertake a new equity placingat any time in the next 12 months. Mr Villa made a loan to the Company of EUR50,000 in conjunction with the external audit of ORH SpA and to expedite theoperational recovery of the hotel chain. Mr Villa has agreed to acceptrepayment of the loan within the next 12 months, or that he may convert thisamount into Clear Leisure Plc ordinary shares. The Group received an unsolicited, but binding and fully-financed offer fromGenerali Investimenti Holding , a Milan based building contractor to acquirethe Company's entire holding (directly and indirectly held by the Company) inMediapolis S.p.A. The offer was between €20-€30m in cash or stocks based oncertain conditions and further details of this offer is available in theregulatory news issued on that day. Board changes On 11 February 2013, the Group announced that Mr Enrico Petocchi and Mr DominicWhite both resigned as non-executive directors of the Company. On 29 August 2013, the Group announced that Cesare Suglia, Executive Director,stepped down from the Board and left the Company. On 18 October 2013, the Group announced the resignation of Luke Johnson asnon-Executive Chairman and appointed Alfredo Villa as Interim Chairman. Future developments On 6 January 2014, the Group announced that it increased its interest in theItalian sushi restaurant chain, Sosushi Company Srl from 51 per cent. to 100per cent. Consideration will take the form of a credit compensationagreement between the vendor and the Group with no additional cash paymentrequired. On 7 January 2014, the Group announced that it received an additionalunsolicited, but binding offer to acquire the Group's entire holding (directlyand indirectly held by the Group) in Mediapolis S.p.A. by Fornest Ltd, a UKinvestment company, which manages the interests of certain Italian investors. On 13 January 2014, the Group announced that further to the announcements onMediapolis S.p.A. dated 22 November 2013 and 7 January 2014, the Groupsubmitted on 10 January 2014 to the Ivrea Tribunal, a formal proposal for therestructuring of the Mediapolis debt, the "Concordato in Continuità". On 27 May 2014, the Group acquired a 100% interest in a specific vehicle whichcontrols the entire share capital of Hospitality & Leisure Fund (H&L Fund), anItalian real estate fund regulated by the Italian financial authorities. Risks and uncertainties The Group's investments as at 31 December 2013 were all in unlistedinvestments, as a result there is no readily available market for sale in orderto arrive at a fair value. The valuation of each investment is appraised on aregular basis and requires a significant amount of judgement together withreviewing the cash flows and budgets of the investee company in order to arriveat a fair value. The Group has raised funds during the period as discussed in the `Developmentsduring the year' above. The Directors feel that the amounts raised will not besufficient to meet their operating forecasts over the next 12 months, andfurther funds will be required to meet the day to day operations of the Group. Key performance indicators ("KPI's") The key performance indicators are set out below: PLC S 31 December 31 December Change % 2013 2012 Net asset value (less minority interests) €16,956,000 €29,455,000 -42.4% Net asset value - fully diluted per share 0.085 0.1625 -47.7%(€) Closing share price 2.125p 4.500p -52.8% Market capitalisation £4,237,449 £8,154,422 -48.0% Assessment of business risk The Board regularly reviews operating and strategic risks. The Group'soperating procedures include a system for reporting financial and non-financialinformation to the Board including: * reports from management with a review of the business at each Board meeting, focusing on any new decisions/risks arising; * reports on the performance of investments; * reports on selection criteria of new investments; * discussion with senior personnel; and * consideration of reports prepared by third parties. Financial risk management Details of the Group's financial instruments and its policies with regard tofinancial risk management are contained in note 25 to the financial statements. Results for the year and dividends The loss for the year from continuing operations was €7.4 million (2012: lossof €2.5 million). Since the Group does not have any distributable reserves, theDirectors are unable to recommend the payment of a dividend. Going concern The Group's activities generated a loss from continuing operations of €7,359,000 (2012: €2,491,000) and had net current liabilities of €16,330,000 asat 31 December 2013. In addition the Company's shares are currently suspendedon the AIM Market. The Group's operational existence is still dependant on theability to raise further funding either through an equity placing on AIM, orthrough other external sources, to support the on-going working capitalrequirements. After making due enquiries, the Directors have formed a judgement that there isa reasonable expectation that the Group can secure further adequate resourcesto continue in operational existence for the foreseeable future and thatadequate arrangements will be in place to enable the settlement of theirfinancial commitments, as and when they fall due. For this reason, the Directors continue to adopt the going concern basis inpreparing the financial statements. Whilst there are inherent uncertainties inrelation to future events, and therefore no certainty over the outcome of thematters described, the Directors consider that, based upon financialprojections and dependant on the success of their efforts to complete theseactivities, the Group will be a going concern for the next twelve months. If itis not possible for the Directors to realise their plans, over which there issignificant uncertainty, the carrying value of the assets of the Group islikely to be impaired. By order of the Board. Alfredo VillaDirector15 December 2014 DIRECTORS' REPORT The Directors present their report together with the audited financialstatements for the year ended 31 December 2013. Principal Activity The principal activity of the Group is that of an investment company pursuing astrategy to create a portfolio of companies within the leisure, entertainment,interactive media and financial services sectors. Directors The present members of the Board of Directors together with brief biographiesare shown on page 2. The board comprised the following directors who served throughout the year andup to the date of this report save where disclosed otherwise beside their name: Alfredo Villa Luke Johnson (Resigned 18 October 2013) Cesare Suglia (Resigned 29 August 2013) Nilesh Jagatia Francesco Emiliani Enrico Petocchi (Resigned 11 February 2013) Dominic White (Resigned 11 February 2013) Directors' interests No Director had a material interest in any contract of significance to theCompany or any of its subsidiaries during the period. No Directors of theCompany have any beneficial interests in the shares of its subsidiary companiesother than Mr. Villa who holds shares in Mediapolis Investments SA. The interests of the directors who served at the end of the year in the sharecapital of the Company at 31 December 2013 and 31 December 2012 were asfollows: Executive Directors 31 December 2013 Holding 31 December 2012 (2.5p ordinary % (2.5p ordinary shares) shares) Alfredo Villa 28,279,039 15.61 28,279,039 The closing market price of the ordinary shares at 31 December 2013 was 2.125pand the highest and lowest closing prices during the year were 5.165p and1.310p respectively. There have been no changes in the Directors' interests between the year end and30 November 2014. Remuneration Remuneration receivable by each Director during the year was as follows: 2013 2013 2013 2012 Board Salary Total Total fees €'000 €'000 €'000 €'000 Executive Directors Alfredo Villa - 140 140 147 Cesare Suglia - - - 82 Nilesh Jagatia - 99 99 40 Non-executive Directors Gabriele Gresta - - - 12 Edward Burman - - - 24 Haresh Kanabar - - - 24 Alessandro Malacart - - - 24 Justin Drummond - - - 32 Enrico Petocchi - - - 24 Dominic White - - - 103 Total - 239 239 512 None of the Directors had any pension entitlement. Directors' interests in share options and warrants At 31 December 2013 no Director had any interest in share options in theCompany. All former share option plans had lapsed and no options were exercised in anyof the last three financial years. Significant shareholders As at 15 December 2014 so far as the directors are aware, the parties who aredirectly or indirectly interested in 3 per cent or more of the nominal value ofthe Company's share capital are as follows: Number of ordinary shares % Eufingest 56,500,000 28.3 Afredo Villa - Chairman 28,279,039 14.2 Luke Johnson 25,000,000 12.5 Conficont Compagn 15,000,000 7.5 TMS-EKAB 11,000,000 5.5 HSBC Global Custody Nominee (UK 9,305,980 4.7 Regilco S.R.L 7,190,000 3.6 Corporate Governance As an AIM-listed Company, the Company is not required to follow the provisionsof the Corporate Governance Code as set out in the Financial ConductAuthority's Listing Rules. However, the Directors recognise the importance andsupport the principles of good governance. Directors' liability insurance and indemnity The Company is in the process of arranging insurance cover in respect ofpotential legal action against its Directors. To the extent permitted by UKlaw, the Company also intends to indemnify the Directors. Statement of Directors' Responsibilities The Directors are responsible for preparing the Annual Report of the Directorsand the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for eachfinancial year. Under that law the directors have prepared the Group and ParentCompany financial statements in accordance with International FinancialReporting Standards ("IFRS") as adopted by the European Union ("EU"). UnderCompany law the directors must not approve the financial statements unless theyare satisfied that they give a true and fair view of the state of affairs ofthe Group and the Company and of the profit or loss of the Group for thatperiod. The Directors are also required to prepare financial statements inaccordance with the AIM rules of the London Stock Exchange. In preparing these financial statements, the directors are required to: * select suitable accounting policies and then apply them consistently * make judgments and accounting estimates that are reasonable and prudent * state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; and * prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business. The Directors are responsible for keeping adequate accounting records that aresufficient to show and explain the Group's transactions and disclose withreasonable accuracy at any time the financial position of the Group and Companyand enable them to ensure that the financial statements comply with theCompanies Act 2006. They are also responsible for safeguarding the assets ofthe Group and Company and hence for taking reasonable steps for the preventionand detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of thecorporate and financial information included on the Group's website.Legislation in the United Kingdom governing the preparation and disseminationof financial statements may differ from legislation in other jurisdictions. TheGroup is compliant with AIM Rule 26 regarding the Group's website. Disclosure of information to auditor In the case of each person who was a Director at the time this report wasapproved: * so far as that director is aware there is no relevant audit information of which the Group's auditor is unaware: and * that director has taken all steps that the director ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Group's auditor is aware of that information. Events after the reporting period Details of events after the reporting period have been disclosed in Note 33. Independent auditor Welbeck Associates, having expressed their willingness to continue in office,will be deemed reappointed for the next financial year in accordance withsection 487(2) of the Companies Act 2006 unless the Company receives noticeunder section 488(1) of the Companies Act 2006. By order of the Board.Alfredo VillaDirector 15 December 2014 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CLEAR LEISURE PLC We have audited the financial statements of Clear Leisure plc for the yearended 31 December 2013 which comprise the group statement of comprehensiveincome, the group and parent company statements of changes in equity, the groupand parent company statements of financial position, the group and parentcompany statements of cash flows, and the related notes. The financialreporting framework that has been applied in the preparation of the Group andParent Company financial statements is applicable law and InternationalFinancial Reporting Standards (IFRSs) as adopted by the European Union. This report is made solely to the company's members, as a body, in accordancewith Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has beenundertaken so that we might state to the company's members those matters we arerequired to state to them in an auditor's report and for no other purpose. Tothe fullest extent permitted by law, we do not accept or assume responsibilityto anyone other than the company and the company's members as a body, for ouraudit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained more fully in the statement of Directors' responsibilities set outon page 8, the directors are responsible for the preparation of the financialstatements and for being satisfied that they give a true and fair view. Ourresponsibility is to audit and express an opinion on the financial statementsin accordance with applicable law and International Standards on Auditing (UKand Ireland). Those standards require us to comply with the Auditing PracticesBoard's (APB's) Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in thefinancial statements sufficient to give reasonable assurance that the financialstatements are free from material misstatement, whether caused by fraud orerror. This includes an assessment of: whether the accounting policies areappropriate to the Company's circumstances and have been consistently appliedand adequately disclosed; the reasonableness of significant accountingestimates made by the directors; and the overall presentation of the financialstatements. In addition, we read all the financial and non-financialinformation in the Chairman's statement, strategic report and Directors' reportto identify any information that is apparently materially incorrect based on,or materially inconsistent with, the knowledge acquired by us in the course ofperforming the audit. If we become aware of any apparent material misstatementsor inconsistencies we consider the implication for our report. A description of the scope of an audit of financial statements is also providedon the APB's website at www.frc.org.uk/apb/scope/private.cfm. Basis for qualified opinion on financial statements The audit evidence available to us was limited due to restrictions placed onthe scope of our work as a result of two separate issues. Firstly, an issue arose as a result of a pending investigation into thefinancial irregularities of the subsidiary ORH S.p.A. ("ORH"), the Boarddecided to dispose of the Group's investment on 3 December 2013. ORH has sincethe year end been put into voluntariy liquidiation which was authorised by theMilan Tribunal on 2 February 2014, with a liquidator appointed on the same day.Unfortunately given the irregularities, the situation has resulted in our auditnot being able to obtain sufficient appropriate audit evidence in the Groupfinancial statements concern: * the existence of the assets held by ORH, which through the Group's 73.43% investment had a carrying value of €nil as at 31 December (2012: €19.915m), within the Group's financial statements. * the completeness of the liabilities arising from the trading activities of ORH, which through the Group's 73.43% investment has a carrying value of € nil as at 31 December 2013 (2012: €15.839m), within the Group's financial statements. As such we are unable to confirm the total loss relating to the discontinuedoperations in ORH of €7.358m, as discosed in Note 13 and the total loss ondisposal of the investment in the Company accounts of €5.345m, as disclosed inNote 29. Secondly, as a result of the Directors not being able to provide confirmationof the asset position of the various funds managed by Cambria Limited in whichthe Group have both direct and indirect interests including their holding inCambria Equity Partners LP, we have been unable to obtain sufficientappropriate audit evidence in the Group financial statements concerning: * the existence of the assets held by the Group in relation to these investments, which had a carrying value of €nil as at 31 December 2013 (2012: €nil) within the Group financial statements. * the impairment of the investment valuation which during the year to 31 December 2013 was €nil (2012: €305,500). As such we are unable to confirm whether the value attributable to theseinvestments included within the Group financial statements at €nil is true andfair, and accordingly whether the accounting treatment adopted by the Companyas outlined above is in accordance with IFRS. Qualified opinion on the financial statements In our opinion, except for the possible effects of the matters described in theBasis for qualified opinion paragraph: * the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2013 and of the group's loss for the year then ended; * the group and parent company financial statements have been properly prepared in accordance with IFRS as adopted by the European Union; and * the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. Opinion on matters prescribed by the Companies Act 2006 In our opinion the information given in the report of the directors for thefinancial year for which the financial statements are prepared is consistentwith the financial statements. Opinion Emphasis of matter - Going concern We draw your attention to the disclosure made in note 3 to the financialstatements concerning the Group's ability to continue as a going concern. These conditions, along with other matters explained in note 3 to the financialstatements, indicate the existence of a material uncertainty which may castdoubt about the ability of the Group to continue as a going concern. TheDirectors have plans to manage the cash flows of the Group to enable it tocontinue as a going concern. These plans include the necessary additionalfundraising required to provide the operational working capital requirement forthe next 12 months. The financial statements do not include the adjustmentsthat would result if the Group was unable to continue as a going concern. Matters on which we are required to report by exception In respect solely of the limitation on our work to the assessment of theaccuracy of the accounting records used in the preparation of the financialstatements, described above, we have not obtained all the information andexplanations that we considered necessary for the purpose of the audit. We have nothing else to report in respect of the following matters where theCompanies Act 2006 requires us to report to you if, in our opinion: * adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or * the parent company financial statements are not in agreement with the accounting records and returns; or * certain disclosures of directors' remuneration specified by law are not made; or * we have not received all the information and explanations we require for our audit. Jonathan Bradley Hoare (Senior statutory auditor) for and on behalf of Welbeck Associates Chartered Accountants and Registered Auditors London, United Kingdom 15 December 2014 GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2013 2013 2012 *RestatedContinuing operations €'000 €'000 Revenue 1,291 1,499 Cost of sales (515) (253) 776 1,246 Other operating income - 3,244 Administration expenses (2,285) (1,562) Operating (loss) / profit (1,509) 2,928 Other gains and losses (5,342) (4,693) Finance income - 8 Finance charges (468) (687) Loss before tax (7,319) (2,444) Tax (40) (47) Loss for the year from continuing operations (7,359) (2,491) (Loss)/profit from discontinued operations (7,358) 105 Loss for the year (14,717) (2,386) Other comprehensive income Revaluation of land and buildings - 3,000 Exchange translation differences (2) (4) Total other comprehensive income (2) 2,996 TOTAL COMPREHENSIVE INCOME FOR THE YEAR (14,719) 610 Loss attributable to: Owners of the parent (13,607) (2,300) Non-controlling interests (1,110) (86) Total comprehensive income attributable to: Owners of the parent (13,609) (221) Non-controlling interests (1,110) 831 Earnings per share: Basic and fully diluted loss from continuing (€0.04) (€0.02)operations Basic and fully diluted loss from discontinued (€0.04) -operations Basic and fully diluted loss per share (€0.08) (€0.02) \* The comparative results of the Group for 2012 have been restated to reflectthe disposal of subsidiary undertakings. STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER 2013 Group Group Company Company 2013 2012 2013 2012 €'000 €'000 €'000 €'000 Non-current assets Goodwill 9 6,652 - - Other intangible assets 235 4,510 - - Property, plant and 39,044 41,565 - -equipment Available for sale 7,556 7,894 - -investments Other receivables - 1,670 23,119 33,495 Total non-current assets 46,844 62,291 23,119 33,495 Current assets Inventories 135 266 - - Available for sale - 320 - -investments Trade and other receivables 2,106 16,264 - 663 Cash and cash equivalents 1,477 1,843 - 15 Total current assets 3,718 18,693 - 678 Current liabilities Trade and other payables (6,605) (23,357) (1,014) (3,512) Borrowings (13,443) (15,340) (2,331) (340) Total current liabilities (20,048) (38,697) (3,345) (3,852) Net current (liabilities)/ (16,330) (20,004) (3,345) (3,174)assets Total assets less current 30,514 42,287 19,774 30,321liabilities Non-current liabilities Borrowings (4,959) (2,222) (2,368) (1,681) Deferred liabilities and (1,380) (499) - -provisions Total non-current (6,339) (2,721) (2,368) (1,681)liabilities Net assets 24,175 39,566 17,406 28,640 Equity Share capital 6,074 5,536 6,074 5,536 Share premium account 42,856 42,457 42,856 42,457 Other reserves 10,869 10,698 466 293 Retained losses (42,843) (29,236) (31,990) (19,646) Equity attributable to 16,956 29,455 17,406 28,640owners of the Company Non-controlling interests 7,219 10,111 - - Total equity 24,175 39,566 17,406 28,640 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013 Group Share Share Other Retained Total Non-controlling Total capital premium reserves losses interests equity account €'000 €'000 €'000 €'000 €'000 €'000 €'000 At 1 January 2013 5,536 42,457 10,698 (29,236) 29,455 10,111 39,566 Loss for the year - - - (13,607) (13,607) (1,111) (14,718) Other comprehensive - - (2) - (2) - (2)income Total comprehensive - - (2) (13,607) (13,609) (1,111) (14,720)income for the year Acquisition of - - - - - (109) (109)non-controllinginterests insubsidiary Disposal of - - - - - (1,672) (1,672)subsidiary Issue of convertible - - 173 - 173 - 173bond Issue of shares in 538 399 - - 937 - 937the year At 31 December 2013 6,074 42,856 10,869 (42,843) 16,956 7,219 24,175 Company At 1 January 2013 5,536 42,457 293 (19,646) 28,640 - 28,640 Loss and total - - - (12,344) (12,344) - (12,344)comprehensive incomefor the year Issue of convertible - - 173 - 173 - 173bond Issue of shares in 538 399 - - 937 - 937the year At 31 December 2013 6,074 42,856 466 (31,990) 17,406 - 17,406 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2012 Group Share Share Other Retained Total Non-controlling Total capital premium reserves losses interests equity account €'000 €'000 €'000 €'000 €'000 €'000 €'000 At 1 January 2012 1,370 31,749 9,511 (26,382) 16,248 - 16,248 Exchange 31 701 181 (554) 359 - 359translationadjustments At 1 January 2012 1,401 32,450 9,692 (26,936) 16,607 - 16,607(restated) Loss for the year - - - (2,300) (2,300) (86) (2,386) Other comprehensive - - 2,079 - 2,079 917 2,996income Total comprehensive - - 2,079 (2,300) (221) 831 610income for the year Non-controlling - - - - - 9,280 9,280interests insubsidiaryundertakingsacquired Conversion of loan - - (1,073) - (1,073) - (1,073)note Issue of shares in 4,135 10,007 - - 14,142 - 14,142the year At 31 December 2012 5,536 42,457 10,698 (29,236) 29,455 10,111 39,566 Company At 1 January 2012 1,370 31,749 1,365 (19,428) 15,056 - 15,056 Exchange 31 701 1 (429) 304 - 304translationadjustments At 1 January 2012 1,401 32,450 1,366 (19,857) 15,360 - 15,360(restated) Total comprehensive - - - 211 211 - 211income for the year Conversion of loan - - (1,073) - (1,073) - (1,073)note Issue of shares in 4,135 10,007 - - 14,142 - 14,142the year At 31 December 2012 5,536 42,457 293 (19,646) 28,640 - 28,640 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2013 Group Group Company Company 2013 2012 2013 2012 Restated Restated €'000 €'000 €'000 €'000 Net cash (outflow) / inflow from (2,703) (762) (2,161) 54operating activities Cash flows from investingactivities (Increase)/decrease in loan to - - (394) (4,426)subsidiary undertakings Acquisition of subsidiary - (1,348) - -undertakings Cash balances of subsidiaries - 1,828 - -acquired Purchase of available for sale - (1,786) - -investments Purchase of intangible fixed (191) - - -assets Purchase of property, plant and (10) - - -equipment Interest received - 40 - - Net cash (outflow) from investing (201) (1,266) (394) (4,426)activities Cash flows from financingactivities Proceeds from issues of new - 4,810 - 4,810ordinary shares (net of expenses) Proceeds of issue of convertible 2,340 - 2,340 -bond Proceeds of short term loans 200 - 200 Interest paid - (389) - - Net cash inflow from financing 2,540 4,421 2,540 4,810activities Net (decrease) /increase in cash (364) 2,393 (15) 438for the year Cash and cash equivalents at 1,843 8 15 8beginning of year Exchange differences (2) (558) - (431) Cash and cash equivalents at end 1,477 1,843 - 15of year NOTES TO THE FINANCIAL STATEMENTS 1. General Information Clear Leisure plc is a company incorporated in the United Kingdom under theCompanies Act 2006. The Company's ordinary shares are traded on AIM of theLondon Stock Exchange. The address of the registered office is given on theCompany information page. The nature of the Group's operations and itsprincipal activities are set out in the Directors' report. 2. Accounting policies The principal accounting policies are summarised below. They have all beenapplied consistently throughout the period covered by these consolidatedfinancial statements. Basis of preparation The consolidated Financial Statements of Clear Leisure plc have been preparedin accordance with International Financial Reporting Standards (IFRS) and IFRSInterpretations Committee (IFRS IC) as adopted by the European Union and theparts of Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical costconvention except in respect of revalued properties (as permitted by IFRS 1),and for certain available for sale investments that are stated at their fairvalues and land and buildings that have been revalued to their fair value. The preparation of Financial Statements in conformity with IFRS requires theuse of certain critical accounting estimates. It also requires management toexercise its judgement in the process of applying the Group's accountingpolicies. The areas involving a higher degree of judgement or complexity, orareas where assumptions and estimates are significant to the consolidatedFinancial Statements are disclosed in Note 3. The Consolidated Financial Statements are presented in Euros (€), thepresentational and functional currency, rounded to the nearest €'000. Going Concern Any consideration of the forseeable future involves making a judgment, at aparticular point in time, about future events which are inherently uncertain.The ability of the Group to carry out its planned business objectives isdependent on its continuing ability to raise adequate financing from equityinvestors and/or the achievement of profitable operations. Nevertheless, at the time of approving these financial statements and aftermaking due enquiries, the Directors have a reasonable expectation that theGroup has adequate resources to continue operating for the forseeable future.For this reason they continue to adopt the going concern basis of preparing theGroup's financial statements. Basis of consolidation The consolidated financial statements incorporate the financial statements ofthe Group and entities controlled by the Group (its subsidiaries) made up to 31December each year. Control is achieved where the Group has the power to governthe financial and operating policies of an investee entity so as to obtainbenefits from its activities. The results of subsidiaries acquired or disposed of during the year areincluded in the consolidated income statement from the effective date ofacquisition or up to the effective date of disposal, as appropriate. Wherenecessary, adjustments are made to the financial statements of subsidiaries tobring the accounting policies used into line with those used by the group. Allintra-group transactions, balances, income and expenses are eliminated onconsolidation. Non-controlling interests in subsidiaries are identified separately from theGroup's equity therein. Those interests of non-controlling shareholders thatare present ownership interests entitling their holders to a proportionateshare of net assets upon liquidation may initially be measured at fair value orat the non-controlling interests' proportionate share of the fair value of theacquiree's identifiable net assets. The choice of measurement is made on anacquisition-by-acquisition basis. Other non-controlling interests are initiallymeasured at fair value. Subsequent to acquisition, the carrying amount ofnon-controlling interests is the amount of those interests at initialrecognition plus the non-controlling interests' share of subsequent changes inequity. Total comprehensive income is attributed to non-controlling interestseven if this results in the non-controlling interests having a deficit balance. Changes in the Group's interests in subsidiaries that do not result in a lossof control are accounted for as equity transactions. The carrying amount of theGroup's interests and the non-controlling interests are adjusted to reflect thechanges in their relative interests in the subsidiaries. Any difference betweenthe amount by which the non-controlling interests are adjusted and the fairvalue of the consideration paid or received is recognised directly in equityand attributed to the owners of the Group. When the Group loses control of a subsidiary, the profit or loss on disposal iscalculated as the difference between (i) the aggregate of the fair value of theconsideration received and the fair value of any retained interest and (ii) theprevious carrying amount of the assets (including goodwill), less liabilitiesof the subsidiary and any non-controlling interests. Amounts previouslyrecognised in other comprehensive income in relation to the subsidiary areaccounted for (i.e. reclassified to profit or loss or transferred directly toretained earnings) in the same manner as would be required if the relevantassets or liabilities are disposed of. The fair value of any investmentretained in the former subsidiary at the date when control is lost is regardedas the fair value on initial recognition for subsequent accounting under lAS 39Financial Instruments: Recognition and Measurement or, when applicable, thecosts on initial recognition of an investment in an associate or jointlycontrolled entity. Business Combinations Acquisitions of subsidiaries and businesses are accounted for using theacquisition method. The consideration for each acquisition is measured at theaggregate of the fair values (at the date of exchange) of assets given,liabilities incurred or assumed, and equity instruments issued by the Group inexchange for control of the acquiree. Acquisition-related costs are recognisedin profit or loss as incurred. Where applicable, the consideration for the acquisition includes any asset orliability resulting from a contingent consideration arrangement, measured atits acquisition-date fair value. Subsequent changes in such fair values areadjusted against the cost of acquisition where they qualify as measurementperiod adjustments (see below). All other subsequent changes in the fair valueof contingent consideration classified as an asset or liability are accountedfor in accordance with relevant IFRSs. Changes in the fair value of contingentconsideration classified as equity are not recognised. Where a business combination is achieved in stages, the Group's previously-heldinterests in the acquired entity are remeasured to fair value at theacquisition date (i.e. the date the Group attains control) and the resultinggain or loss, if any, is recognised in profit or loss. Amounts arising frominterests in the acquiree prior to the acquisition date that have previouslybeen recognised in other comprehensive income are reclassified to profit orloss, where such treatment would be appropriate if that interest were disposedof. The acquiree's identifiable assets, liabilities and contingent liabilities thatmeet the conditions for recognition under IFRS 3(2008) are recognised at theirfair value at the acquisition date, except that: * deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with lAS 12 Income Taxes and lAS 19 Employee Benefits respectively; * liabilities or equity instruments related to the replacement by the Group of an acquiree's share-based payment awards are measured in accordance with IFRS 2 Share-based Payment, and * assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard. If the initial accounting for a business combination is incomplete by the endof the reporting period in which the combination occurs, the Group reportsprovisional amounts for the items for which the accounting is incomplete. Thoseprovisional amounts are adjusted during the measurement period (see below), oradditional assets or liabilities are recognised, to reflect new informationobtained about facts and circumstances that existed as of the acquisition datethat, if known, would have affected the amounts recognised as of that date. The measurement period is the period from the date of acquisition to the datethe Group obtains complete information about facts and circumstances thatexisted as of the acquisition date, and is subject to a maximum of one year. 3. Critical accounting judgements and key sources of estimation uncertainty The preparation of Financial Statements in conformity with IFRSs requiresmanagement to make judgements, estimates and assumptions that affect theapplication of policies and reported amounts of assets and liabilities, incomeand expenses. Estimates and judgements are continually evaluated and are basedon historical experience and other factors including expectations of futureevents that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resultingaccounting estimates will, by definition, seldom equal the related actualresults. The estimates and assumptions that have a significant risk of causinga material adjustment to the carrying amounts of assets and liabilities withinthe next financial year are discussed below Impairment of goodwill Goodwill has a carrying value of €9,000 (2012: €6,652,000). The Group testsannually whether goodwill has suffered any impairment, in accordance with theaccounting policy stated in Note 2. The recoverable amounts of cash-generatingunits have been determined based on value-in-use calculations.Management has concluded that an impairment charge to the carrying value ofgoodwill of €1,303,000 was necessary during the year. See Note 15 to theFinancial Statements. Fair value measurement Management uses valuation techniques to determine the fair value of financialinstruments (where active market quotes are not available) and non-financialassets. This involves developing estimates and assumptions consistent with howmarket participants would price the instrument. Management bases itsassumptions on observable data as far as possible but this is not alwaysavailable. In that case management uses the best information available.Estimated fair values may vary from the actual prices that would be achieved inan arm's length transaction at the reporting date. In order to arrive at the fair value of investments a significant amount ofjudgement and estimation has been adopted by the Directors as detailed in theinvestments accounting policy. Where these investments are un-listed and thereis no readily available market for sale the carrying value is based upon futurecash flows and current earnings multiples for which similar entities have beensold. Going Concern The Group's activities generated a loss from continuing operations of €7,359,000 (2012: €2,491,000) and had net current liabilities of €16,330,000 asat 31 December 2013. In addition the Company's shares are currently suspendedon the AIM Market. The Group's operational existence is still dependant on theability to raise further funding either through an equity placing on AIM, orthrough other external sources, to support the on-going working capitalrequirements. After making due enquiries, the Directors have formed a judgement that there isa reasonable expectation that the Group can secure further adequate resourcesto continue in operational existence for the foreseeable future and thatadequate arrangements will be in place to enable the settlement of theirfinancial commitments, as and when they fall due. For this reason, the Directors continue to adopt the going concern basis inpreparing the financial statements. Whilst there are inherent uncertainties inrelation to future events, and therefore no certainty over the outcome of thematters described, the Directors consider that, based upon financialprojections and dependant on the success of their efforts to complete theseactivities, the Group will be a going concern for the next twelve months. If itis not possible for the Directors to realise their plans, over which there issignificant uncertainty, the carrying value of the assets of the Group islikely to be impaired. 4. Segment information IFRS 8 requires reporting segments to be identified on the basis of internalreports about components of the Group that are regularly reviewed by the chiefoperating decision maker. Information reported to the Group's chief operating decision maker for thepurposes of resource allocation and assessment of segment performance isspecifically focused on the geographical segments within the Group. Information regarding the Group's reportable segments is presented below: 2013 2012 UK Italy Total UK Italy TotalContinuing operations €'000 €'000 €'000 €'000 €'000 €'000 Revenue - 1,291 1,291 - 1,499 1,499 Cost of sales - (515) (515) - (253) (253) Gross Profit 776 776 - 1,246 1,246 Gain on disposal of - - - 1,367 1,877 3,244investment Finance Income - - - - 8 8 Finance charges (311) (133) (468) (337) (350) (687) Other operating expenses (1,506) (803) (2,285) (817) (745) (1,562) Other gains and losses - (5,342) (5,342) - (4,693) (4,693) Loss for the financial (1,817) (5,502) (7,319) 213 (2,657) (2,444)year 2013 2012 Segment Segment Net Net assets/ Segment Segment Net Net assets/ assets liabilities additions (liabilities) assets liabilities Additions (liabilities) to to non-current non-current Assets assets €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 UK 60 (7,458) - (7,398) 15 (7,896) - (7,881) Italy 50,502 (18,929) - 31,573 72,881 (33,537) 8,103 47,447 50,562 (26,387) - 24,175 72,896 (41,433) 8,103 39,566 5. Earnings per share The basic earnings per share is calculated by dividing the loss attributable toequity shareholders by the weighted average number of ordinary shares in issueduring the period. Diluted earnings per share is computed using the weightedaverage number of shares during the period adjusted for the dilutive effect ofshare options and convertible loans outstanding during the period. The loss and weighted average number of shares used in the calculation are setout below: 2013 2012 Per Per Loss Weighted share Loss Weighted share €'000 average no. Amount €'000 average no. Amount of shares Euro of shares Euro 000's 000's Basic and fullydiluted earnings pershare Continuing (7,359) 197,564 (€0.04) (2,491) 92,327 (€0.02)operations Discontinued (7,358) 197,564 (€0.04) 105 92,327 -operations Total operations (14,717) 197,564 (€0.08) (2,386) 92,237 (€0.02) IAS 33 requires presentation of diluted earnings per share when a company couldbe called upon to issue shares that would decrease earnings per share. Inrespect of 2012 and 2013 the diluted loss per share is the same as the basicloss per share as the loss for each year has an anti-dilutive effect. 6. Share capital and share premium ISSUED AND FULLY PAID: Number of Ordinary Share Total ordinary share premium shares capital €'000 €'000 €'000 At 1 January 2012 45,847,710 1,370 31,749 33,119 Exchange translation adjustments - 31 701 732 At 1 January 2012 (adjusted) 45,847,710 1,401 32,450 33,851 Issue of new ordinary shares of 135,361,667 4,135 10,007 14,1422.5p each At 31 December 2012 181,209,377 5,536 42,457 47,993 Issue of new ordinary shares of 18,200,000 538 399 9372.5p each At 31 December 2013 199,409,377 6,074 42,856 48,930 The following shares were issued during the year: On 6 February 2013 the Company issued 3,200,000 ordinary shares at 6p each insettlement of a creditor amount of €230,000 (£192,000) and the Company issued15,000,000 ordinary shares at 4p each in settlement of a short term loan. 7. Other reserves The Group considers its capital to comprise ordinary share capital, sharepremium, retained losses and its convertible bonds. In managing its capital,the Group's primary objective is to maintain a sufficient funding base toenable the Group to meet its working capital and strategic investment needs. Inmaking decisions to adjust its capital structure to achieve these aims, throughnew share issues, the Group considers not only their short-term position butalso their long-term operational and strategic objectives. Group Merger Revaluation Exchange Loan Total reserve translation equity other reserve reserve reserve Reserves €'000 €'000 €'000 €'000 €'000 At 1 January 2012 8,146 - - 1,365 9,511 Exchange translation adjustments 179 - - 2 181 At 1 January 2012 (adjusted) 8,325 - - 1,367 9,692 Revaluation of land & buildings - 2,083 - - 2,083 Exchange translation difference - - (4) - (4) Conversion of loan notes - - - (1,073) (1,073) At 31 December 2012 8,325 2,083 (4) 294 10,698 Exchange translation difference - - (2) - (2) Issue of convertible loan notes - - - 173 173 At 31 December 2013 8,325 2,083 (6) 467 10,869 Company Merger Revaluation Exchange Loan Total reserve translation equity other reserve reserve reserve Reserves €'000 €'000 €'000 €'000 €'000 At 1 January 2012 - - - 1,365 1,365 Exchange translation adjustments - - - 2 2 At 1 January 2012 (adjusted) - - - 1,367 1,367 Conversion of loan notes - - - (1,074) (1,074) At 31 December 2012 - - - 293 293 Issue of convertible loan notes - - - 173 173 At 31 December 2013 - - - 466 466 7. Other reserves Copies of the final results will be available from the Group´s web site atwww.clearleisure.com and will be posted to shareholders shortly.