CLP.L Regulatory News (CLP)

30 June 2016 Clear Leisure Plc ("Clear Leisure" or "the Company") FINAL RESULTS For the Year Ended 31 December 2015 CHAIRMAN'S STATEMENT I am pleased to present the Company's Final Results for the year ended 31December 2015. Since I became Chairman we have been pursuing a strategy of realising theinherent value of Group's assets for shareholders. In this regard I am pleased to report that we have disposed of two assets,thereby generating funds for the Company, reduced operating costs, and advancedthe process of restructuring the Company balance sheet. In line with the 2014 accounts and the 2015 interim results, the euro has beenadopted as the reference Currency for reporting purposes, however the 2016accounts will be expressed in GBP sterling. The results and net equity arerepresented in accordance with IFRS. The operating loss, for the year totalled €642,000 as compared to a loss of €1,917,000 for the 2014 financial year. Despite managing to lower the interestrate on some loans, financing charges of €1,323,000 were higher than the 2014figure of €1,085,000 due to the necessity to borrow additional funds to fundthe new board's investigations into what exactly the Company owns and what theassets are really worth. The Group's cash reserves at 31 December 2015 stood at€1,842,000 compared with €1,373,000 at 31 December 2014. In my interim report to shareholders I warned that, although we had decided toreduce significantly the carrying value of Mediapolis assets, furtherreductions might be required. This has proved to be the case. As the result ofa detailed professional valuation, we have reduced the carrying value ofdevelopment land held by Mediapolis by a further €7 million to €13 million.Pleasingly, a similar valuation for the villas held by Mediapolis has resultedin an increase in value from €4.6 million to €5.1 million. As a consequence of the foregoing, the Group recorded a loss of €20.2 millionas compared to a loss of €3.1 million in 2014. Your board is confident that the revised valuation of Mediapolis now accuratelyreflects commercial reality and we do not anticipate further reductions.Moreover, it is the board's intention that Mediapolis assets will be developedto become income generating, whilst on the other side of the balance sheet, theboard anticipates that it will be able to achieve significant discounts on therepayment of some loans. These actions will serve to improve the net value ofassets for shareholders. Company background and strategy Clear Leisure's core business has been to invest in real estate and servicecompanies within the leisure sector. Most of the Company's assets are based in Italy, where the real estate marketand the general economy has still not recovered from the 2008 sub-primemortgage international crisis, although mild signs of recovery have appeared inthe past 12 months and the European Central Bank has forecast these emergingpositive trends will continue. The main assets of the Group in the year under review were: - Four former Valtur holiday resorts in Italy, held via Hospitality and LeisureFund (H&L), an Italian Regulated Real Estate Fund (disposed on 22 December2015), - Mediapolis srl, owning a 50 hectare commercial property development site,located adjacent to the main highway between Milan and Turin, and 10 holidayvillas in the Porto Cervo area, the most exclusive holiday location inSardinia, and - A €6.5 m investment in SIPIEM with the intention of securing a significantshare in the Ondaland waterpark, also between Milan and Turin. The above assets, for varying reasons, have been involved in complex corporatesituations: H&L had a bank exposure more than twice the value of the assets,Mediapolis has a very material exposure with banks, creditors and shareholders;while the funds transferred to SIPIEM have not resulted in the intended controlof the waterpark at this time. Additionally, Clear Leisure holds minority equity positions in a number ofcompanies in the UK, Israel and Italy. A new board was appointed at the AGM held on 31 July 2015, as follows: MrFrancesco Gardin was appointed as Chief Executive Officer and Chairman, whileMr Reginald Eccles was appointed as non-Executive Director of the Company. Allprevious board members resigned. Most of the effort of the new board, has been to obtain a clear picture of theactual status of all the investments and, for each of them, devise a strategyto maximise the return for shareholders. This approach has inevitably involvedlegal costs and court procedures, but the complex nature of the investmentsmade by the Company between 2009 and 2015 has left the Company with no otheroption. Clear Leisure's current strategy can be summarised as follows: dispose ofnon-strategic assets; reorganise all strategic assets in order to maximisetheir value for shareholders; restructure of existing short term convertibleloan and long term debt, both to decrease interest costs and extend therepayment terms until such time as the value of strategic assets has beenrealised. In pursuing this strategy, we have received material financial support from ourlargest shareholder, Eufingest, a Swiss based investment management company. Portfolio Companies An update on the Group's portfolio companies held at 31 December 2015 is asfollows (percentage of equity held): Mediapolis srl (83%): owns the land in North West Italy designated for thepurpose of a theme park, with additional guest facilities, shops and officesand 10 holiday villas in the Porto Cervo area, the most exclusive holidaylocation in Sardinia. As reported in the interim results, in September 2015,the Company continues to pursue its legal claim against the regional governmentof Piedmont for failing to honour a commitment to approve the construction ofthe park. The Company will provide shareholders with any updates regarding thecourt case, when progress has been made. SIPIEM SpA (50.17%): owns a portion of a waterpark in North West Italy, knownas Ondaland, as well as other real estate assets. In May 2015, Clear Leisurefinally won the rights from the owner of the water park to have its 50.17%ownership in SIPIEM certified, thereby entitling the Company to attendshareholder meetings. The Company remains confident that its holding in SIPIEMwill become a significant realisable asset. Ascend Capital PLC (9.9%): a London based broker, the Company's holding ofwhich was sold back to Ascend Capital in June 2016 for GBP 50,000 (EUR 60,000.) GeoSim Systems Ltd (www.geosim.co.il) (4.71%): an Israeli company seeking toestablish itself as the world leader in building complete and photorealistic 3Dvirtual cities and in delivering them through the Internet for use in localsearches, real estate and city planning, homeland security, tourism andentertainment. Whilst the geo-spatial visualisation solutions offered by Google, Microsoft andothers feature satellite photographs, street photographs and more recentlycoarse 3D-models with limited visual quality and interactivity, GeoSim delivershighly detailed, fully interactive city models, which the user can explore fromthe land or the air. Birdland srl (52%): an Italian vehicle company set up to invest in the 71% ofBibop srl now in liquidation; Bibop's core business focused on the digital andentertainment sector. ORH SpA (99.3%): owns a chain of hotels in Italy and East Africa under the ORHbrand (Ora Hotels); it was put into administration in February 2014, allegedlydue to gross financial misconduct by the certain individuals associated withthe company, prior to the sale to Clear Leisure. The Company continues topursue a claim against these entities and will report to shareholders as andwhen it can. Alnitak sarl (100%): the wholly owned company based in Luxembourg which was thevehicle to hold "H&L" fund control; originally. the stake in this company was51%, but, prior to the disposal of "H&L" in December 2015, Clear Leisure PLCacquired the other 49% on favourable terms. Tax Losses The Group has no tax charge for the year ended 31 December 2015, due toprevious losses incurred and has a potential deferred tax asset arising fromun-utilised management expenses available for carry forward and relief againstfuture taxable profits. The deferred tax asset has not been recognised in thefinancial statements in accordance with the Company's accounting policy fordeferred tax. The Company's un-utilised management expenses and capital losses carriedforward at 31 December 2015 amount to approximately €24,000,000 (2014: €23,000,000) and €35,000,000 (2014: €20,000,000) respectively. All such lossesare available for future utilisation against profits of the business. TheDirectors believe that the tax losses can be offset against profitableinvestments which would ultimately enable Clear Leisure to distribute dividendsto its shareholders. Share Capital On 11 March 2015, shareholders approved the subdivision of existing ordinaryshares of 2.5p nominal value into new ordinary shares of 0.25p nominal value,by issuing 199,409,377 deferred shares of 2.25p for each. Following the meeting, the Company issued 11,000,000 new ordinary sharesincreasing the total number of Ordinary shares in issue to 210,409,377. Outlook The board believes it continues to make progress with its strategy to findvalue in each and every asset the Company owns. Even in the most difficult ofsituations, such as ORH and Mediapolis, the Company's legal teams and in-houseexperts are finding new documentation and avenues of attack, which provide astrong case for the Company to challenge prior owners, insurance companies andthe regional courts of Italy where necessary. As before, the Company willprovide updates to the market when new progress has been made and wishes tothank its loyal shareholders once more for the patience they have shown duringthis time. Francesco GardinChief Executive and Chairman30 June 2016 -ends- For further information please contact: Clear Leisure plc +39 335 296573Francesco Gardin, CEO and Executive Chairman ZAI Corporate Finance (Nominated Adviser)Tim Cofman/Jamie Spotswood +44 (0)20 7060 2220 Peterhouse Corporate Finance (Joint Broker) +44 (0) 20 7469 0935Lucy Williams / Heena Karani Cadogan 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 with aportfolio of companies primarily encompassing the leisure and real estatesectors mainly in Italy. The Company may be either a passive or active investorand Clear Leisure's investment rationale ranges from acquiring minoritypositions with strategic influence through to larger controlling positions. Forfurther information, please visit, www.clearleisure.com GROUP STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2015 Note 2015 2014 Continuing operations €'000 €'000 Revenue - 70 Cost of sales - (1) - 69 Other operating income - 856 Administration expenses (654) (1,986) Operating (loss) / profit (654) (1,917) Other gains and losses 8 (18,569) (140) Finance income - 1 Finance charges 9 (1,023) (1,085) Loss before tax (20,246) (3,141) Tax 12 - - Loss for the year from continuing operations (20,246) (3,141) Profit/(loss) from discontinued operations 13 - 67 Loss for the year (20,246) (3,074) Other comprehensive income Gain on acquisition of non-controlling - 3,750interest Exchange translation differences - 5 Total other comprehensive income - 3,755 TOTAL COMPREHENSIVE INCOME FOR THE YEAR (20,246) 681 Loss for the year attributable to: Owners of the parent (17,016) (2,836) Non-controlling interests (3,230) (238) Total comprehensive income attributable to: Owners of the parent (17,016) 919 Non-controlling interests (3,230) (238) Earnings per share: Basic and fully diluted loss from continuing 14 (€0.08) (€0.01)operations Basic and fully diluted earnings/(loss) from - €0.00discontinued operations Basic and fully diluted loss per share (€0.08) (€0.01) STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER 2015 Notes Group Group Company Company 2015 2014 2015 2014 €'000 €'000 €'000 €'000 Non-current assets Goodwill 15 - 9 - - Other intangible assets 16 50 151 - - Property, plant and equipment 17 18,114 38,697 - - Available for sale investments 19 60 6,560 - - Other receivables 18 - - 8,537 23,538 Total non-current assets 18,224 45,417 8,537 23,538 Current assets Investments held for trading 20 614 450 - 450 Trade and other receivables 21 6,847 148 35 - Cash and cash equivalents 22 1,842 1,373 475 5 Total current assets 9,303 1,971 510 455 Current liabilities Trade and other payables 23 (4,948) (4,329) (1,058) (1,625) Borrowings 24 (20,832) (20,276) (6,680) (5,628) Total current liabilities (25,780) (24,605) (7,738) (7,253) Net current (liabilities)/assets (16,477) (22,634) (7,228) (6,798) Total assets less current 1,747 22,783 1,309 16,740liabilities Non-current liabilities Borrowings 24 - - - - Deferred liabilities and 25 (407) (1,355) - -provisions Total non-current liabilities (407) (1,355) - - Net assets 1,340 21,428 1,309 16,740 Equity Share capital 27 6,112 6,074 6,112 6,074 Share premium account 27 42,954 42,856 42,954 42,856 Other reserves 28 11,412 11,390 556 534 Retained losses (59,393) (42,377) (48,313) (32,724) Equity attributable to owners of 1,085 17,943 1,309 16,740the Company Non-controlling interests 31 255 3,485 - - Total equity 1,340 21,428 1,309 16,740 The financial statements were approved by the board of directors and authorisedfor issue on 30 June 2016. They were signed on its behalf by: Francesco GardinDirector The accounting policies and notes form part of these financial statements. Company Number 03926192 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015 Group Share Share Other Retained Total Non-controlling Total losses interests equity capital premium reserves €'000 €'000 €'000 €'000 €'000 account €'000 €'000 At 1 January 2015 6,074 42,856 11,390 (42,377) 17,943 3,485 21,428 Loss for the year - - - (17,016) (17,016) (3,230) (20,246) Other comprehensive - - - - -income Total comprehensive - - - (17,016) (17,016) (3,230) (20,246)income for the year Issue of shares 38 98 - - 136 - 136 Share option charge - - 22 - 22 - 22 At 31 December 2015 6,112 42,954 11,412 (59,393) 1,085 255 1,340 Company At 1 January 2015 6,074 42,856 534 (32,724) 16,740 - 16,740 Loss and total - - - (15,589) (15,589) - (15,589)comprehensiveincome for the year Issue of shares 38 98 - - 136 - 136 Share option charge - - 22 - 22 - 22 At 31 December 2015 6,112 42,954 556 (48,313) 1,309 - 1,309 The accounting policies and notes form part of these financial statements. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014 Group Share Share Other Retained Total Non-controlling Total losses interests equity capital premium reserves €'000 €'000 €'000 €'000 €'000 account €'000 €'000 At 1 January 2014 6,074 42,856 10,869 (42,843) 16,956 7,219 24,175 Loss for the year - - - (2,836) (2,836) (238) (3,074) Other comprehensive - - 453 3,302 3,755 - 3,755income Total comprehensive - - 453 466 919 (238) 681income for the year Acquisition of - - - - - (3,496) (3,496)non-controllinginterests insubsidiary Issue of convertible - - 68 - 68 - 68bond At 31 December 2014 6,074 42,856 11,390 (42,377) 17,943 3,485 21,428 Company At 1 January 2014 6,074 42,856 466 (31,990) 17,406 - 17,406 Loss and total - - - (734) (734) - (734)comprehensive incomefor the year Issue of convertible - - 68 - 68 - 68bond At 31 December 2014 6,074 42,856 534 (32,724) 16,740 - 16,740 The accounting policies and notes form part of these financial statements. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2015 Note Group Group Company Company 2015 2014 2015 2014 €'000 €'000 €'000 €'000 Net cash outflow from operating 29 (835) (387) (835) (473)activities Cash flows from investingactivities (Increase)/decrease in loan to - - - 99subsidiary undertakings Acquisition of subsidiary - (193) - -undertakings Purchase of available for sale 900 (33) 900 (33)investments Cash balances of subsidiaries - - - -acquiried Cash repayments by subsidiaries - - 1 - Interest received - 1 - - Net cash (outflow) from investing 900 (225) 901 66activities Cash flows from financingactivities Proceeds of issue of shares 136 - 136 - Repayment of long term debt (272) - (272) - Proceeds from borrowing 540 - 540 - Proceeds of issue of convertible - 412 - 412bond Proceeds of short term loans - 90 - - Net cash inflow from financing 404 502 404 412activities Net (decrease) /increase in cash 469 (110) 470 5for the year Cash and cash equivalents at 1,373 1,477 5 -beginning of year Exchange differences - 6 - - Cash and cash equivalents at end 22 1,842 1,373 475 5of year The accounting policies and notes form part of these financial statements. 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 on page 8. Standards and amendments which became effective during the year have not had amaterial impact on the financial statements. Statement of compliance The financial statements comply with IFRS as adopted by the European Union. The following new and revised Standards and Interpretations have been adopted in the current period by the Group for the first time and do not have a material impact on the group. IFRS 12 Disclosures of interests in other entities A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and not early adopted. None of these are expected to have a significant effect on the financial statements of the Group. 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 judgement, 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 areinitially measured at fair value. Subsequent to acquisition, the carryingamount of non-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 toemployee benefit arrangements are recognised and measured in accordance withlAS 12 Income Taxes and lAS 19 Employee Benefits respectively; - liabilities or equity instruments related to the replacement by the Group ofan acquiree's share-based payment awards are measured in accordance with IFRS 2Share-based Payment; and - assets (or disposal groups) that are classified as held for sale inaccordance with IFRS 5 Non-current Assets Held for Sale and DiscontinuedOperations 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. Goodwill Goodwill arising in a business combination is recognised as an asset at thedate that control is acquired (the acquisition date). Goodwill is measured asthe excess of the sum of the consideration transferred, the amount of anynon-controlling interest in the acquiree and the fair value of the acquirer'spreviously held equity interest (if any) in the entity over the net of theacquisition-date amounts of the identifiable assets acquired and theliabilities assumed. If, after reassessment, the Group's interest in the fair value of theacquiree's identifiable net assets exceeds the sum of the considerationtransferred, the amount of any non-controlling interest in the acquiree and thefair value of the acquirer's previously held equity interest in the acquiree(if any), the excess is recognised immediately in profit or loss as a bargainpurchase gain. Goodwill is not amortised but is reviewed for impairment at least annually. Forthe purpose of impairment testing, goodwill is allocated to each of the Group'scash-generating units expected to benefit from the synergies of thecombination. Cash-generating units to which goodwill has been allocated aretested for impairment annually, or more frequently when there is an indicationthat the unit may be impaired. If the recoverable amount of the cash-generatingunit is less than the carrying amount of the unit, the impairment loss isallocated first to reduce the carrying amount of any goodwill allocated to theunit and then to the other assets of the unit pro-rata on the basis of thecarrying amount of each asset in the unit. An impairment loss recognised forgoodwill is not reversed in a subsequent period. On disposal of a subsidiary, the attributable amount of goodwill is included inthe determination of the profit or loss on disposal. Acquired intangible assets Intangible assets acquired separately or as part of a business combination arecapitalised at cost and fair value as at the date of acquisition, respectively.Intangible assets are subsequently amortised on a straight-line basis over theexpected period that benefits will accrue to the Group: Patents and trade marks over 10 years Impairment of non-financial assets Assets that have an indefinite useful life, for example goodwill, are notsubject to amortisation and are tested annually for impairment. Assets that aresubject to amortisation are reviewed for impairment whenever events or changesin circumstances indicate that the carrying amount may not be recoverable. Animpairment loss is recognised for the amount by which the asset's carryingamount exceeds its recoverable amount. The recoverable amount is the higher ofan asset's fair value less costs to sell and value in use. For the purposes ofassessing impairment, assets are grouped at the lowest levels for which thereare separately identifiable cash flows (cash-generating units). Non-financialassets other than goodwill that suffered an impairment are reviewed forpossible reversal of the impairment at each reporting date. Development costs Internally generated development expenditure is capitalised as an intangibleasset only if all the following criteria are met: - the asset can be identified; - it is probable that the asset will generate future economic benefits; - the fair value of the asset can be measured reliably. Capitalised development expenditure is amortised on a straight-line basis overthe period of expected future sales of the resulting products, which has beenassessed as between 5 and 10 years. Property, plant and equipment Land and buildings held for use in the production or supply of goods orservices, or for administrative purposes, are stated in the balance sheet attheir revalued amounts, being the fair value at the date of revaluation, lessany subsequent accumulated depreciation and subsequent accumulated impairmentlosses. Revaluations are performed with sufficient regularity such that thecarrying amount does not differ materially from that which would be determinedusing fair values at the balance sheet date. Any revaluation increase arising on the revaluation of such land and buildingsis credited to the properties revaluation reserve, except to the extent that itreverses a revaluation decrease for the same asset previously recognised as anexpense, in which case the increase is credited to the income statement to theextent of the decrease previously expensed. A decrease in carrying amountarising on the revaluation of such land and buildings is charged as an expenseto the extent that it exceeds the balance, if any, held in the propertiesrevaluation reserve relating to a previous revaluation of that asset. Depreciation on revalued buildings is charged to income. On the subsequent saleor scrap page of a revalued property, the attributable revaluation surplusremaining in the properties revaluation reserve is transferred directly toretained earnings. Properties in the course of construction for production, supply oradministrative purposes, or for purposes not yet determined, are carried atcost, less any recognised impairment loss. Cost includes professional fees and,for qualifying assets, borrowing costs capitalised in accordance with thegroup's accounting policy. Depreciation of these assets, on the same basis asother property assets, commences when the assets are ready for their intendeduse. Freehold land is not depreciated. Plant and equipment and fixtures and fittings are stated at cost lessaccumulated depreciation and any accumulated impairment losses. Depreciation isprovided on all tangible assets to write down the cost less estimated residualvalue of each asset over its expected useful economic life on a straight linebasis at the following annual rates: Land and buildings Nil Leasehold improvements Straight line over the remaining period of the lease Plant and machinery 15% straight line Fixtures and fittings 20% straight line Asset residual values and useful economic lives are reviewed and adjusted ifappropriate at the end of each reporting period. An asset's carrying amount iswritten down immediately to its recoverable amount if the asset's carryingamount is greater than its estimated recoverable amount. Gains and losses on disposal are determined by comparing the proceeds with thecarrying amount and are recognised in the income statement. Inventories Inventories are stated at the lower of cost and net realisable value. The costof finished goods and work in progress comprise all direct expenditure and anappropriate proportion of fixed and variable overheads. Net realisable value isthe estimated selling price in the ordinary course of business, less applicablevariable selling expenses. Investments in subsidiaries Investments in subsidiaries are stated at cost less any provision forimpairment. Foreign currency The functional currency is Euro. Foreign currency transactions are translatedinto the functional currency using the exchange rates prevailing at the datesof the transactions or valuation where items are re-measured. Exchange gainsand losses resulting from the settlement of such transactions and from thetranslation at year-end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognised in the Statement ofComprehensive Income. Exchange gains and losses that relate to borrowings andcash and cash equivalents are presented in the income statement within `financeincome or costs'. All other Exchange gains and losses are presented in theincome statement within `other (losses)/gains - net'. Changes in the fair value of monetary securities denominated in foreigncurrency classified as available for sale are analysed between translationdifferences resulting from changes in the amortised cost of the security andother changes in the carrying amount of the security. Translation differencesrelated to changes in amortised cost are recognised in profit or loss, andother changes in carrying amount are recognised in other comprehensive income. Taxation The tax expense represents the sum of the tax currently payable and anydeferred tax. Current taxes are based on the results of the Group companies and arecalculated according to local tax rules, using the tax rates that have beenenacted or substantially enacted by the period-end date. Deferred tax is provided in full using the financial position liability methodfor all taxable temporary differences arising between the tax bases of assetsand liabilities and their carrying values for financial reporting purposes.Deferred tax is measured using currently enacted or substantially enacted taxrates. Deferred tax is the tax expected to be payable or recoverable ondifferences between the carrying amounts of assets and liabilities in thefinancial statements and the corresponding tax bases used in the computation oftaxable profit, and is accounted for using the balance sheet liability method.Deferred tax liabilities are generally recognised for all taxable temporarydifferences and deferred tax assets are recognised to the extent that it isprobable that taxable profits will be available against which deductibletemporary differences can be utilised. Such assets and liabilities are notrecognised if the temporary difference arises from goodwill or from the initialrecognition (other than in a business combination) of other assets andliabilities in a transaction that affects neither the taxable profit nor theaccounting profit. Deferred tax assets are recognised to the extent the temporary difference willreverse in the foreseeable future and that it is probable that future taxableprofit will be available against which the asset can be utilised. Deferred taxis recognised for all deductible temporary differences arising from investmentsin subsidiaries and associates, to the extent that it is probable that thetemporary difference will reverse in the foreseeable future and taxable profitwill be available against which the temporary difference can be utilised. Revenue Revenue, which excludes Value Added Tax, represents the value of servicesrendered. Consultancy fees are recognised as earned on unconditional supply ofservices. Interest income Interest income is accrued on a time basis, by reference to the principaloutstanding and at the effective interest rate applicable, which is the ratethat exactly discounts estimated future cash receipts through the expected lifeof the financial asset to that asset's net carrying amount on initialrecognition. Financial instruments Financial assets and financial liabilities are recognised in the Group'sstatement of financial position when the Group becomes a party to thecontractual provisions of the instrument. Financial assets The Group's financial assets are classified into the following specificcategories: "available for sale investments", "trade and other receivables",and "cash and cash equivalents". The classification depends on the nature andpurpose of the financial assets and is determined at the time of initialrecognition. Available for sale investments Investments are recognised and derecognised on a trade date where a purchase orsale of an investment is under a contract whose terms require delivery of theinvestment within the timeframe established by the market concerned, and areinitially measured at cost, including transaction costs. Investments classified as available for sale are measured at subsequentreporting dates at fair value. Fair value is defined as the price at which anorderly transaction would take place between market participants at thereporting date and is therefore an estimate and as such requires the use ofjudgement. Where possible fair value is based upon observable market prices,such as listed equity markets or reported merger and acquisition transactions.Alternative bases of valuation may include contracted proceeds or best estimatethereof, implied valuation from further investment and long-term cash flowsdiscounted at a rate which is tested against market data. Gains and lossesarising from changes in fair value are recognised directly in othercomprehensive income, until the security is disposed of or is determined to beimpaired, at which time the cumulative gain or loss previously recognised inother comprehensive income is included in the net profit or loss for theperiod. Impairment losses recognised in the income statement for equityinvestments classified as available-for-sale are not subsequently reversedthrough the income statement. The Group determines the fair value of its Investments based on the followinghierarchy: LEVEL 1 - Where financial instruments are traded in active financial markets,fair value is determined by reference to the appropriate quoted market price atthe reporting date. Active markets are those in which transactions occur insignificant frequency and volume to provide pricing information on an ongoingbasis. LEVEL 2 - If there is no active market, fair value is established usingvaluation techniques, including discounted cash flow models. The inputs tothese models are taken from observable market data including recent arm'slength market transactions, and comparisons to the current fair value ofsimilar instruments; but where this is not feasible, inputs such as liquidityrisk, credit risk and volatility are used. LEVEL 3 - Valuations in this level are those with inputs that are not based onobservable market data. Investments held for trading All investments determined upon initial recognition as held at fair valuethrough profit or loss were designated as investments held for trading.Investment transactions are accounted for on a trade date basis. Assets arede-recognised at the trade date of the disposal. Assets are sold at their fairvalue, which comprises the proceeds of sale less any transaction cost. The fairvalue of the financial instruments in the balance sheet is based on the quotedbid price at the balance sheet date, with no deduction for any estimated futureselling cost. Unquoted investments are valued by the directors using primaryvaluation techniques such as recent transactions, last price and net assetvalue. Changes in the fair value of investments held at fair value throughprofit or loss and gains and losses on disposal are recognised in theconsolidated statement of comprehensive income as "Net gains on investments".Investments are initially measured at fair value plus incidental acquisitioncosts. Subsequently, they are measured at fair value in accordance with IAS 39.This is either the bid price or the last traded price, depending on theconvention of the exchange on which the investment is quoted. Trade and other receivables Trade and other receivables are measured at initial recognition at fair valueand are subsequently measured at amortised cost using the effective interestrate method. A provision is established when there is objective evidence thatthe Group will not be able to collect all amounts due. The amount of anyprovision is recognised in the income statement. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits and othershort-term highly liquid investments that are readily convertible to a knownamount of cash and are subject to an insignificant risk of changes in value. Impairment of financial assets The Group assesses at the end of each reporting period whether there isobjective evidence that a financial asset, or a group of financial assets, isimpaired. A financial asset, or a group of financial assets, is impaired, andimpairment losses are incurred, only if there is objective evidence ofimpairment as a result of one or more events that occurred after the initialrecognition of the asset (a "loss event"), and that loss event (or events) hasan impact on the estimated future cash flows of the financial asset, or groupof financial assets, that can be reliably estimated. The criteria that the Group uses to determine that there is objective evidenceof an impairment loss include: - significant financial difficulty of the issuer or obligor; - a breach of contract, such as a default or delinquency in interest orprincipal repayments; - the disappearance of an active market for that financial asset because offinancial difficulties; - observable data indicating that there is a measurable decrease in theestimated future cash flows from a portfolio of financial assets since theinitial recognition of those assets, although the decrease cannot yet beidentified with the individual financial assets in the portfolio; or - for assets classified as available-for-sale, a significant or prolongeddecline in the fair value of the security below its cost. Assets carried at amortised cost The amount of impairment is measured as the difference between the asset'scarrying amount and the present value of estimated future cash flows (excludingfuture credit losses that have not been incurred), discounted at the financialasset's original effective interest rate. The asset's carrying amount isreduced, and the loss is recognised in the statement of comprehensive income.As a practical expedient, the Group may measure impairment on the basis of aninstrument's fair value using an observable market price. If, in a subsequent period, the amount of the impairment loss decreases and thedecrease can be related objectively to an event occurring after the impairmentwas recognised (such as an improvement in the debtor's credit rating), thereversal of the previously recognised impairment loss is recognised in thestatement of comprehensive income. Financial liabilities The Group's financial liabilities comprise convertible bonds, borrowings andtrade payables. Financial liabilities are obligations to pay cash or otherfinancial liabilities and are recognised when the Group becomes a party to thecontractual provisions of the instruments. Convertible bonds Convertible bonds are regarded as compound instruments, consisting of aliability component and an equity component. At the date of issue, the fairvalue of the liability component is estimated using the prevailing marketinterest rate for similar non-convertible debt. The difference between theproceeds of issue of the convertible loan notes and the fair value assigned tothe liability component, representing the embedded option to convert theliability into equity of the Group, is included in equity. Issue costs are apportioned between the liability and equity components of theconvertible loan notes based on their relative carrying amounts at the date ofissue. The portion relating to the equity component is charged directly againstequity. The interest expense on the liability component is calculated by applying theprevailing market interest rate for similar non-convertible debt to theliability component of the instrument. The difference between this amount andthe interest paid is added to the carrying amount of the convertible loan note. Borrowings Borrowings are recognised initially at fair value, net of transaction costsincurred. Borrowings are subsequently carried at amortised cost; any differencebetween the proceeds (net of transaction costs) and the redemption value isrecognised in the statement of comprehensive income over the period of theborrowings, using the effective interest method. Borrowings are classified ascurrent liabilities unless the Group has an unconditional right to defersettlement of the liability for at least 12 months after the end of thereporting period. Borrowings costs Borrowing costs are recognised in profit or loss in the period in which theyare incurred. Trade payables Trade payables are initially measured at fair value, and are subsequentlymeasured at amortised cost, using the effective interest rate method. Segmental reporting In identifying its operating segments, management generally follows the Group'sservice lines, which represent the main products and services provided by theGroup. The measurement policies the Group uses for segment reporting under IFRS8 are the same as those used in its financial statements. The disclosure isbased on the information that is presented to the chief operating decisionmaker, which is considered to be the board of Clear Leisure plc. Equity instruments An equity instrument is any contract that evidences a residual interest in theassets of the Group after deducting all of its liabilities. Equity instrumentsissued by the Group are recorded at the proceeds received net of direct issuecosts. Share capital account represents the nominal value of the shares issued. The share premium account represents premiums received on the initial issuingof the share capital. Any transaction costs associated with the issuing ofshares are deducted from share premium, net of any related income tax benefits. Retained losses include all current and prior period results as disclosed inthe statement of comprehensive income. Other reserves consists of the merger reserve, revaluation reserve, exchangetranslation reserve and loan equity reserve. - the merger reserve represents the premium on the shares issued less thenominal value of the shares, being the difference between the fair value of theconsideration and the nominal value of the shares. - the revaluation reserve represents the difference between the purchase costsof the available for sale investments less any impairment charge and the marketor fair value of those investments at the accounting date. - the exchange translation reserve represents the movement of items on thestatement of financial position that were denominated in foreign beforetranslation - the loan equity reserve represents the value of the equity component of thenominal value of the loan notes issued. Provisions Provisions are recognised when the Group has a present obligation (legal orconstructive) as a result of a past event, it is probable that the Group willbe required to settle that obligation and a reliable estimate can be made ofthe amount of the obligation The amount recognised as a provision is the best estimate of the considerationrequired to settle the present obligation at the year-end date, taking intoaccount the risks and uncertainties surrounding the obligation. 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 €nil (2014: €9,000). The Group tests annuallywhether goodwill has suffered any impairment, in accordance with the accountingpolicy stated in Note 2. The recoverable amounts of cash-generating units havebeen determined based on value-in-use calculations. 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 of €20,246,000 (2014: €3,141,000) andhad net current liabilities of €16,477,000 as at 31 December 2015. The Group'soperational existence is still dependant on the ability to raise furtherfunding either through an equity placing on AIM, or through other externalsources, to support the on-going working capital requirements. 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: 2015 2014 UK Italy Total UK Italy Total Continuing operations €'000 €'000 €'000 €'000 €'000 €'000 Revenue - - - - 70 70 Cost of sales - - - - (1) (1) Gross Profit - - - 69 69 Finance Income - - - - 1 1 Finance charges (684) (339) (1,023) (506) (579) (1,085) Other operating expenses (354) (300) (654) (1,131) (885) (2,016) Other gains and losses 860 (19,429) (18,569) 856 (966) (110) Profit/(Loss) for the (178) (20,068) (20,246) (781) (2,360) (3,141)financial year 2015 2014 Segment Segment Net Net assets/ Segment Segment Net Net assets/ assets liabilities additions assets liabilities Additions (liabilities) to (liabilities) to non-current non-current assets Assets €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 UK 8,284 (8,702) - (418) 524 (8,302) - (7,778) Italy 19,243 (17,485) - 1,758 46,864 (17,658) - 29,206 27,527 (26,187) - 1,340 47,388 (25,960) - 21,428 5. Employee numbers 2015 2014 Number Number The average number of employees during the period was asfollows: Management and administration 2 5 6. Staff costs 2015 2014 €'000 €'000 Staff costs during the period including directorscomprise: Wages and salaries 250 279 Social security costs - 28 Other pension costs - - 250 307 Other pension costs relate to contributions to defined contribution pensionschemes and are charged as an expense as they fall due. 7. Directors' Emoluments 2015 2014 €'000 €'000 Aggregate emoluments 250 207 Social security costs - 18 250 225 There are no retirement benefits accruing to the Directors. Details ofdirectors' remuneration are included in the Directors' Report. 8. Other gains and losses 2015 2014 €'000 €'000 Impairment of investments - (996) Impairment of property investments (20,583) - Decrease in provisions 650 - Writeback of VAT tax credit 300 Revaluation of investments 614 - Profit on disposal of H & L fund 450 - (18,569) (996) 9. Finance charges 2015 2014 €'000 €'000 Interest on convertible bonds 684 506 Interest on bank loans and overdrafts 339 579 1,023 1,085 10. Auditor's remuneration 2015 2014 €'000 €'000 Group Auditor's remuneration: Fees payable to the Group's auditor for the audit of the 28 40Company and consolidated financial statements: Non audit services: Other services 6 6 Subsidiary Auditor's remuneration Other services pursuant to legislation - - 11. Company income statement An income statement for Clear Leisure plc is not presented in accordance withthe exemption allowed by Section 408 of the Companies Act 2006. The parentcompany's comprehensive income for the financial year amounted to a loss of €15,589,000 (2014: loss €734,000). 12. Tax 2015 2014 €'000 €'000 Current taxation - - Deferred taxation - - Tax charge for the year - - The Group has a potential deferred tax asset arising from unutilised managementexpenses available for carry forward and relief against future taxable profits.The deferred tax asset has not been recognised in the financial statements inaccordance with the Group's accounting policy for deferred tax. The Group's unutilised management expenses and capital losses carried forwardat 31 December 2015 amount to approximately €24 million (2014: €23 million) and€35 million (2014: €20 million) respectively. The standard rate of tax for the current year, based on the UK effective rateof corporation tax is 20.25% (2014 - 21.5%). The actual tax for the current andprevious year varies from the standard rate for the reasons set out in thefollowing reconciliation: Continuing operations 2015 2014 €'000 €'000 Loss for the year before tax (20,246) (3,141) Tax on ordinary activities at standard rate (4,100) (675) Effects of: Expenses not deductible for tax purposes 280 152 Foreign taxes - - Tax losses available for carry forward against future 3,820 523profits Total tax - - 13. Discontinued operations On 3 December 2013, as a result of a pending investigation into the financialirregularities of the subsidiary ORH S.p.A, the Group announced that legalaction had resulted in the settlement of its investment in the subsidiary. Thesettlement resulted in a disposal of part of the Group's holding in ORH S.p.A.In addition a liquidator was appointed by a tribunal in Milan on 2 February2014. These two events have resulted in the Group no longer holding acontrolling interest in ORH S.p.A. The results of the discontinued operations, which have been included in theconsolidated income statement, were as follows: 2015 2014 €'000 €'000 Revenue - - Expenses - - Loss before tax - - Attributable tax expense - - Profit/(loss) on disposal of discontinued operations - 67(see Note 30) Net profit/(loss) attributable to discontinued - 67operations In 2013 a loss of €5,570,000 arose on the disposal of ORH Spa, being thedifference between the proceeds of disposal and the carrying amount of thesubsidiary's net assets and attributable goodwill. 14. 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: Loss 2015 Per Loss 2014 Per share Weighted share Weighted €'000 €'000 Amount average no. Amount average no. Euro of shares Euro of shares 000's 000's Basic and fullydiluted earningsper share Continuing (17,016) 208,378 (€0.08) (3,141) 199,409 (€0.01)operations Discontinued - - - 67 199,409 -operations Total operations (17,016) 208,378 (€0.08) (3,074) 199,409 (€0.01) 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 2014 and 2015 the diluted loss per share is the same as the basicloss per share as the loss for each year has an anti-dilutive effect. 15. Goodwill 2015 2014 €'000 €'000 Cost At 1 January 1,312 1,312 At 31 December 1,312 1,312 Accumulated impairment losses At 1 January 1,303 1,303 Impairment loss for the year 9 - At 31 December 1,312 1,303 Net book value - 9 Goodwill is allocated to cash generating units. The recoverable amount of eachunit is determined based on value-in-use calculations. The key assumptions forthe value-in-use calculation are those regarding discount rates and growthrates as well as expected changes to costs and selling prices. Management haveestimated the discount rate based on the weighted average cost of capital.Changes in selling prices and direct costs are based on past experience andexpectations of future change in the markets. These calculations use cash flowprojections based on financial budgets approved by management looking forwardup to five years. Cash flows are extrapolated using estimated growth ratesbeyond the budget period. The key assumptions for the value-in-use calculationsare: - a real growth rate of 2% which has been used to extrapolate cash flows beyondthe budget period; and - a WACC rate of 15% applied to the cash flow projection. The Group tests annually for impairment, or more frequently if there areindications that goodwill might be impaired. 16. Other intangible fixed assets Development costs Total €'000 €'000 Cost At 1 January 2014 273 273 Closure of operations (104) (104) At 31 December 2014 169 169 At 31 December 2015 169 169 Amortisation At 1 January 2014 38 38 Amortisation charge for the year - - Closure of operations (20) (20) At 31 December 2014 18 18 Closure of operations 101 101 At 31 December 2015 119 119 Carrying value At 31 December 2014 151 151 At 31 December 2015 50 50 17. Property, plant and equipment Group Land & Leasehold Plant & Fittings Total buildings improvements machinery & equipment €'000 €'000 €'000 €'000 €'000 Cost At 1 January 2014 38,697 - 223 193 39,112 Closure of operations - - (223) (193) (416) At 31 December 2014 38,697 - - - 38,697 Impairment of property (20,583) - - - (20,583) At 31 December 2015 18,114 - - - 18,114 Depreciation At 1 January 2014 - - 40 28 68 Depreciation charge for - - 2 2 4the year Disposal of subsidiary - - (42) (30) (72)undertaking At 31 December 2014 - - - - - At 31 December 2015 - - - - - Carrying value At 31 December 2014 38,697 - - - 38,697 At 31 December 2015 18,114 - - - 18,114 Included in Land & Buildings above is the interest in a 497,884 sqm plot ofland located near the town of Albiano D'Ivrea. An independent appraisal offreehold land owned by the Group was carried out by a chartered architect inJune 2016. The carrying value of the land at the date of the appraisal was €13million. 18. Investment in subsidiaries Company 2015 2014 €'000 €'000 As at 1 January: Loans to subsidiary undertakings 23,538 23,119 Net (repayments)/advances during the (1) 419year Impairment in investment (15,000) As at 31 December 8,537 23,538 The significant subsidiary undertakings held by the Group at 31 December 2015were as follows: Subsidiaries Country of % Owned Nature of business incorporation Brainspark Associates England 100.00 Investment holding companyLimited *Mediapolis Investments Luxembourg 71.72 Investment holding companySA *Mediapolis S.p.A. Italy **74.67 Lesiure/Real Estate *SoSushi Company S.r.l. Italy 100.00 Brand Management Clear Holiday S.r.l. Italy 100.00 Dormant company * Indirectly held. ** Brainspark Associates Limited owns 71.72% and Mediapolis Investments SA owns13.07% of Mediapolis Spa 19. Available for sale investments Group 2015 2014 €'000 €'000 Fair value At 1 January 6,560 7,556 Impairment recognised in the income statement - (996) Transfer to trade and other receivables (6,500) - Disposals - - Carrying value at 31 December 60 6,560 Non-current assets 60 6,560 Current assets - - 60 6,560 Details of each of the Group's material associates at the end of the reportingperiod are as follows: Name of associate Place of Proportion of Principal activity incorporation ownership and principal held by the place of Group (%) busines Sipiem S.p.A** Italy 50.17 Real Estate and Holding Ascend Capital plc UK 9.9 Corporate broking **Investments in associates where the proportion of ownership held by the Groupwas greater than 50%, but it was determined that the Group did not have controlof the company and that the Group was not exposed to variable returns from itsinvolvement with the company and did not have the ability to affect thosereturns through power of the company. The available for sale investments are valued in accordance with IFRS 7 andLevel 3 of the fair value hierarchy. Their fair value and the methodologyadopted is determined on the basis of their net assets or, where a sale isimminent, the best estimate of the eventual proceeds. Given the methodologyadopted, it is not envisaged that the adoption of alternative assumptions/methodologies, sensitivity analysis, would have a material impact upon theinvestments. 20. Investments held for trading Group and Company 2015 2014 €'000 €'000 Fair value At 1 January 450 - Net acquisition costs of investments - 33 Movement in fair value of investments 614 417 Disposals (450) - Carrying value at 31 December 614 450 The amount of €450,000 shown above is a level 3 investment and represents theGroup's 100% interest in a specific vehicle, which controls the entire sharecapital of Hospitality & Leisure Fund (H&L Fund), an Italian real estate fundregulated by the Italian financial authorities. This investment has beenrealised during the year. The amount of €614,000 shown above is a level 3 investment and represents thefair value of 533,990 shares in Geosim Systems Ltd. 21. Trade and other receivables Group Group Company Company 2015 2014 2015 2014 €'000 €'000 €'000 €'000 Trade and other receivables - 90 - - Other receivables 6,847 58 35 - Amounts falling due after one year Amounts owed by subsidiaries - - 8,537 23,538 6,847 148 8,572 23,538 Non-current assets - - 8,537 23,538 Current assets 6,847 148 35 - The directors consider that the carrying value of trade and other receivablesapproximates to their fair value. 22. Cash and cash equivalents Group Group Group Company Company 2015 2014 2015 2014 €'000 €'000 €'000 €'000 Cash at bank and in hand 1,842 1,373 475 5 1,842 1,373 475 5 Included in the above is an amount for cash held on escrow relating to theMediapolis S.p.A. Land & Buildings. The Directors consider the carrying amounts of cash and cash equivalentsapproximates to their fair value. 23. Trade and other payables Group Group Company Company 2015 2014 2015 2014 €'000 €'000 €'000 €'000 Trade payables 504 1,199 128 516 Other taxes payable 70 84 15 15 Other payables 1,160 1,141 288 249 Amounts due to subsidiary - - 85 302undertakings Accruals 3,214 1,905 542 543 Trade and other payables 4,948 4,329 1,058 1,625 The directors consider that the carrying value of trade and other payablesapproximates to their fair value. Included in other payables is an amount of €830,000 (2014: €830,000) whichrepresents the directors' assessment of the amounts due to fulfil contractualobligations relating to the purchase of investments. 24. Borrowings Group Group Company Company 2015 2014 2015 2014 €'000 €'000 €'000 €'000 Bank loans and overdrafts 8,127 9,536 - - 7% Convertible bond 2014 1,038 88 88 88 Zero rate convertible bond 2015 5,340 5,340 5,853 5,340 Shareholder loans 4,379 4,070 - - Other borrowings 1,948 1,242 739 200 20,832 20,276 6,680 5,628 Disclosed as: 20,832 20,276 6,680 5,628 Current borrowings Non-current borrowings - - - - 20,832 20,276 6,680 5,628 7% Convertible Bond 2014 On 31 March 2010 the company launched an issue of £10 million (€12 million),before issue costs, 7% convertible bonds due 2014. The Bonds are denominated insterling and are convertible into new ordinary shares of 2.5 pence each in thecompany at a conversion rate of 400 New Ordinary Shares per Bond up until 15March 2014. The nominal value of each Bond is £1,000 (€1,200). The redemptiondate of the bonds is 31 March 2014 the coupon of 7% is payable at the end ofeach year. The Company, between 1 and 7 April 2012, was able to repurchase andserve notice on any or all of the bondholders to sell their Bond in whole or inpart at 110% of the nominal value. The bondholders, at any time prior toredemption, may serve a conversion notice to the company in respect of all orany integral multiple of £1,000 (€1,200) nominal value of bonds held by them. During 2011, a bond holder converted £2.64 million (€3.17 million) into equityshares for which 8,035,856 ordinary shares of 2.5p each were issued in exchangefor the bond and cumulative interest due thereon. During 2012, bonds were converted for a total amount of €8.2 million. Theconversion was settled as follows: €4.9 million (£3.9 million) including cumulative interest was converted intoequity shares (11,000,000 Ordinary 2.5p shares at 36p each.) €3.3 million (£2.7million) including cumulative interest was settled in cash for €1.9 million,with approximately 40% discount realising €1.3 million (£1.1 million) profitfor the Group. In March 2014 €1,885,400 zero bonds were issued in settlement of £1,563,000 7%bonds including all un paid and accrued interest up to the date of settlement.This settlement has resulted in a credit to the income statement of €439,000for the year ended 31 December 2014. Zero rate Convertible Bond 2015 On 25 March 2013 the Company issued £3,000,000 nominal value of zero rateconvertible bonds at a discount of 22%. The bonds are convertible at 15p pershare and have a redemption date of 15 December 2015. During 2014 the Company issued €1,885,400 zero bonds in settlement of £1,563,000 7% bonds (see above). Also €600,000 zero bonds were issued insettlement of a debt of €518,000 and €450,000 bonds were issued for cashrealising €412,000 before expenses. On 15 December 2015 the Bondholders meeting approved the amendments on the EUR9.9 million Zero Coupon Bond, originally due on 15 December 2015; Under newterms the final maturity date of the Bond is 15 December 2017 and the interesthas been reduced from 9.5% to7%. Shareholder Loans Included in the shareholder loans is an amount owing to Olivetti MultiservicesS.p.A. ("OMS") from Mediapolis S.p.A. for €4,379,068 including cumulativeinterest. This loan carries interest at Euribor +1% and is secured with asecond charge over the Land within Mediapolis S.p.A. Under IAS 32 the bonds contain two components, liability and equity elements.The equity element is presented in equity under the heading of "equitycomponent of convertible instrument". The effective interest rate of theliability element on initial recognition is 12.5% per annum. 2015 2014 €'000 €'000 Liability component at 1 January 5,428 4,499 Net proceeds of issue - 930 Equity component - (68) 5,428 5,361 Interest charge for the year 425 506 Conversion during the year including interest - - Gain on settlement of 7% bonds by issue of zero - (439)coupon bonds Liability component at 31 December 5,853 5,428 Disclosed as: Non-Current Liabilities - - Current Liabilities 5,853 5,428 Interest on the bonds is payable annually on 31 March each year. No interestpayment was made on 31 March 2014 or on 31 March 2015. The liability componentof the bonds at 31 December 2015 includes all interest accrued to that date.The unpaid interest together with accrued interest to 31 December 2015 isincluded within current liabilities. 25. Deferred liabilities and Provisions 2015 2014 Group €'000 €'000 Provisions: Potential litigation costs in Mediapolis Spa - 118 Provision for costs relating to loans within Mediapolis 407 537Spa Provision for infrastructure costs relating to land - 700held by Mediapolis Spa 407 1,355 26. Financial instruments The Group's financial instruments comprise cash, available for saleinvestments, trade receivables, trade payables that arise from its operationsand borrowings. The main purpose of these financial instruments is to providefinance for the Group's future investments and day to day operational needs.The Group does not enter into any derivative transactions such as interest rateswaps or forward foreign exchange contracts, as the Group's exposure tomovements in foreign exchange rates is not considered significant (see Foreigncurrency risk management) . The main risks faced by the Group are limited tointerest rate risk on surplus cash deposits and liquidity risk associated withraising sufficient funding to meet the operational needs of the business. TheBoard reviews and agrees policies for managing these risks and they aresummarised below. FINANCIAL ASSETS BY CATEGORY The IAS 39 categories of financial assets included in the balance sheet and theheadings in which they are included are as follows: 2015 2014 €'000 €'000 Financial assets: Available for sale investments 60 6,560 Investments held for trading 614 450 Loans and receivables 6,847 148 Cash and cash equivalents 1,842 1,373 9,363 8,531 FINANCIAL LIABILITIES BY CATEGORY The IAS 39 categories of financial liability included in the balance sheet andthe headings in which they are included are as follows: 2015 2014 €'000 €'000 Financial liabilities at amortised cost: Trade and other payables 2,535 2,424 Borrowings 20,832 20,276 23,367 22,700 Financial instruments measured at fair value: Level 1 Level 2 Level 3 €'000 €'000 €'000 As at 31 December 2015 Available for sale investments - - 60 Investments held for trading - - 614 - - 674 As at 31 December 2014 - - - Available for sale investments - - 7,010 The Company has adopted fair value measurements using the IFRS 7 fair valuehierarchy. Categorisation within the hierarchy has been determined on the basis of thelowest level of input that is significant to the fair value measurement of therelevant asset as follows: Level 1 - valued using quoted prices in active markets for identical assets; Level 2 - valued by reference to valuation techniques using observable inputsother than quoted prices included in Level 1; Level 3 - valued by reference to valuation techniques using inputs that are notbased on observable markets criteria. Level 3 investments include both investments in associates, per Note 20, aswell as investments in Ascend Capital plc and Geosim Systems Ltd. Capital risk management The Group manages its capital to ensure that entities in the Group will be ableto continue as going concerns while maximising the return to stakeholdersthrough optimisation of the debt and equity balance. The capital structure ofthe Group consists of debt attributable to convertible bond holders,borrowings, cash and cash equivalents, and equity attributable to equityholders of the Group, comprising issued capital, reserves and retainedearnings, all as disclosed in the Statement of Financial Position. Significant accounting policies Details of the significant accounting policies and methods adopted, includingthe criteria for recognition, the basis of measurement and the basis on whichincome and expenses are recognised, in respect of each class of financialasset, financial liability and equity instrument disclosed in Note 2 to thefinancial statements. Financial risk management objectives The company is exposed to a variety of financial risks which result from bothits operating and investing activities. The Group's risk management iscoordinated by the board of directors, and focuses on actively securing theCompany's short and medium term cash flows by raising liquid capital to meetcurrent liability obligations. Market price risk The Company's exposure to market price risk mainly arises from movements in thefair value of its land and buildings as well as investments. The values of theLand & Buildings are the key drivers in the Net asset value of the Group, andso the political stability and macro economic factors of Italy all have a largeeffect on the market price risk. Therefore other than ensuring acquisitions arecarefully profiled and selected and the Directors ensuring are in close contactwith local government and property industry analysts the exposure is open toboth positive and negative swings. The Group manages its property price riskactively reviewing market trends in the determined geographic locations. TheGroup manages the investment price risk within its long-term investmentstrategy to manage a diversified exposure to the market. The Group's price riskis sensitive to fluctuations to property market. If the investments were toexperience a rise or fall of 15% in their fair value, this would result in theGroup's net asset value and statement of comprehensive income increasing ordecreasing by €66,000 (2014: €5,604,000). Liquidity risk management Ultimate responsibility for liquidity risk management rests with the Board ofDirectors, which monitors the Group's short, medium and long-term funding andliquidity management requirements on an appropriate basis. The Group has verylittle cash balance at the balance sheet date (refer to Note 2 - Basis ofpreparation of financial statements and going concern). The Group continues tosecure future funding and cash resources from disposals as and when required inorder to meet its cash requirements. This is an on-going process and thedirectors are confident with their cash flow models. The following are the undiscounted contractual maturities of financialliabilities: Carrying Less than 1 Between Total Amount year 1 and 5 years €'000 €'000 €'000 €'000 As at 31 December 2015 Trade and other payables 2,535 2,535 - 2,535 Borrowings 20,832 20,832 - 20,832 23,367 23,367 - 23,367 As at 31 December 2014 Trade and other payables 2,424 2,424 - 2,424 Borrowings 20,276 20,276 - 20,276 22,700 22,700 - 22,700 Management believes that based on the information provided in Notes 2 and 3 -in the `Basis of preparation' and `Going concern', that future cash flows fromoperations will be adequate to support these financial liabilities. Interest rate risk The Group and Company manage the interest rate risk associated with the Groupcash assets by ensuring that interest rates are as favourable as possible,whilst managing the access the Group requires to the funds for working capitalpurposes. Interest rates are based on respective EURIBOR and other bank prime interestrates. The Group's cash and cash equivalents are subject to interest rate exposure dueto changes in interest rates. Short-term receivables and payables are notexposed to interest rate risk. Foreign currency risk management The Group undertakes certain transactions denominated in currencies other thanEuro, hence exposures to exchange rate fluctuations arise. Amounts due tofulfil contractual obligations of £69,000 (€88,000) are denominated insterling. An adverse movement in the exchange rate will impact the ultimateamount payable, a 10% increase or decrease in the rate would result in a profitor loss of €9,000. The Group's functional and presentational currency is theEuro as it is the currency of its main trading environment, and most of theGroup's assets and liabilities are denominated in Euro. The parent company islocated in the sterling area. Credit risk management The Group's financial instruments, which are subject to credit risk, areconsidered to be trade and other receivables. There is a risk that the amountto be received becomes impaired. The Group's maximum exposure to credit risk is€7,464,000 (2014: €148,000) comprising receivables during the period. 27. Share capital and share premium ISSUED AND FULLY Number of Number of Ordinary Deferred Share TotalPAID: ordinary premium shares deferred share Share €'000 capital €'000 shares capital €'000 €'000 At 1 January 2015 199,409,377 6,074 42,856 48,930 Sharereorganisation(see note below) Ordinary shares of 199,409,377 - 607 6070.25p each Deferred shares of - 199,409,377 5,467 5,4672.25p each Issue of shares 11,000,000 - 38 98 136 At 31 December 210,409,377 199,409,377 645 5,467 42,954 49,0662015 During the year the Company undertook a share capital reorganisationsubdividing each issued exsisting ordinary share of 2.5p into one ordinaryshare of 0.25p and one deferred share of 2.25p. On 30 April 2015, the Company raised a total of £110,000 gross of expensesthrough a placing of 11,000,000 ordinary shares of 0.25 pence at a price of 1pence per share. 28. 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 Share Total reserve translation note option other reserve reserve equity reserve €'000 reserve €'000 Reserves €'000 €'000 €'000 €'000 At 1 January 2014 8,325 2,084 (6) 466 - 10,869 Acquisition of - 447 6 - - 453non-controllinginterest Issue of convertible - - - 68 - 68loan notes At 31 December 2014 8,325 2,531 - 534 - 11,390 Share option charge - - - - 22 22 At 31 December 2015 8,325 2,531 - 534 22 11,412 29. Cash used in operations Group Group Company Company 2015 2014 2015 2014 €'000 €'000 €'000 €'000 Loss before tax (20,246) (3,074) (15,589) (734) Amounts written off investments - 996 15,000 - Share based payment charge 22 - 22 - Movement in fair value of investments (614) (417) - (417)held for trading Impairment of property plant and 20,583 - - -equipment Discount on settlement of bonds - (439) - (439) Gain on disposal of investment (450) - (450) - Writeback of receivables (300) 4 - - Finance income - (1) - - Finance charges 1,023 1,085 684 506 Decrease in provisions (650) - - - Decrease/(increase) in receivables (398) 605 (35) - (Decrease)/increase in payables 195 854 (467) 611 Cash (used in)/generated by (835) (387) (835) (473)operations 30. Disposal of subsidiary As referred to in Note 13, on 3 December 2013 the Group disposed of itsmajority interest in ORH Spa. The net assets of ORH Spa at the date of disposal were as follows: 2013 €'000 Other intangible assets 4,311 Tangible fixed assets 354 Inventories 93 Other receivables 8,455 Trade payables (2,536) Borrowings (6,098) Convertible loan notes (2,351) Deferred liabilities and provisions (217) Attributable goodwill 5,231 Net assets 7,242 Less: non-controlling interests (1,672) Net assets attributable to owners of 5,570the parent company Loss on disposal (5,345) Total consideration 225 31. Non-controlling interests The following is a summary of the Group's non-controlling interests. Mediapolis Spa Total €'000 €'000 At 1 January 2014 7,219 7,219 Acquisition of non-controlling interests (3,496) (3,496) Total comprehensive income attributable to (238) (238)non-controlling interests At 31 December 2014 3,485 3,485 Total comprehensive income attributable to (3,230) (3,230)non-controlling interests At 31 December 2015 255 255 Summarised financial information in respect of the Group's current subsidiariesthat have material non-controlling interests is set out below. The summarisedfinancial information below represents amounts before intragroup eliminations. Mediapolis Spa 2015 2014 €'000 €'000 Current assets 2,709 1,724 Non-current assets 15,163 38,696 Total assets 17,872 40,420 Current liabilities 7,444 16,767 Non-current liabilities 9,484 1,355 Total assets less total liabilities 944 18,122 Equity attributable to owners of the parent 929 18,813 Non-controlling interests 15 3,485 Total equity 944 22,298 Total comprehensive income attributable to the (18,732) (1,285)owners of the parent Total comprehensive income attributable to the (3,470) (238)non-controlling interests Total comprehensive income for the year (22,202) (1,523) 32. Operating lease commitments There were no operating lease commitments at 31 December 2014 and 31 December2015. 33. Ultimate controlling party The Group considers that there is no ultimate controlling party. 34. Related party transactions Transactions between the company and its subsidiaries, which are relatedparties have been eliminated on consolidation and are not disclosed in thisnote. Transactions between the company and its subsidiaries are disclosed inthe company's separate financial statements. During the year, NKJ Associates Ltd, a company in which N Jagatia is aDirector, charged consultancy fees of €35,000. The amount owed to NKJAssociates Ltd at year end is €10,656. During the year, Metals Analysis Limited, a company in which R Eccles is aDirector, charged consultancy fees of €15,250. The amount owed to MetalsAnalysis Limited at year end is €nil. The shareholder loan as disclosed in Note 24 `Borrowings' is a loan provided byOlivetti Multiservices S.p.A., who also holds 5.1% of the ordinary shares ofMediapolis S.p.A. In addition Eufingest which has a 26.9% shareholding also hasan outstanding loan for €400,000. Remuneration of key management personnel The remuneration of the directors, who are the key personnel of the group, isincluded in the Directors Report. Under "IAS 24: Related party disclosures",all their remuneration is in relation to short-term employee benefits. 35. Events after the reporting date The following events have taken place after the end of the reporting period: In May 2016 the Company entered into an unsecured convertible loan facilityagreement (the Facility") with Eufingest S.A ("Eufingest"), a Swiss investorand major shareholder in the Company. Under the Facility, Eufingest provided afacility of £100,000 at an interest rate of 2.5 per cent per annum. TheFacility is repayable on 30 September 2016. The Facility was fully drawn downimmediately. The Company may repay the Facility early at any time withoutpenalty. At any time before 30 September 2016, Eufingest may convert theoutstanding balance of the Facility into Shares at the rate of 0.75 pence perShare. In June 2016 the Company disposed of its 9.9% holding in Ascend CapitalLimited, being 5,500 shares, for a total consideration of £50,000 (£9.09 pershare). The Company did not incur any loss by this sale, as the 31 December2015, carrying value of the holding in Ascend Capital Limited was EUR 60,000 (£47,000). In June 2016 the Company announced that it has entered into a new unsecuredconvertible loan facility agreement (the Facility") with Eufingest. Under theFacility, Eufingest provides a facility of EUR 50,000 at an interest rate of2.5 per cent per annum. The Facility is repayable on 30 September 2016. TheFacility has been drawn down. The Company may repay the Facility early at anytime without penalty. At any time before 30 September 2016, Eufingest mayconvert the outstanding balance of the Facility into Shares at the rate of 0.75pence per Share. END