REG-Clear Leisure Plc: Final Results and Restoration of Trading
19/10/2020 13:05
19 October 2020
Clear Leisure Plc
("Clear Leisure", "the Company" or “the Group”)
FINAL RESULTS
For the Year Ended 31 December 2019 & Restoration of Trading
Clear Leisure (AIM: CLP) announces its final results for the year ended 31
December 2019.
Clear Leisure is an AIM listed investment company which has recently realigned
its strategic focus to technology related investments, with special regard to
interactive media, blockchain and AI sectors. The Company also owns
shareholdings in a number of historical investments primarily in the Italian
real estate companies, which it is currently seeking compensation through
court action. For further information, please visit, www.clearleisure.co.uk.
The Company advises that the 2019 Report and Accounts will be posted out to
shareholders today, together with the AGM notice and form of proxy are also
available via the Company’s website (www.clearleisure.co.uk). The AGM will
be held at Company’s legal address, 22 Great James Street London WC1N 3ES,
at 12pm on Thursday, 12 November 2020.
In light of current Government social distancing measures relating to
Covid-19, this year’s AGM will run as a closed meeting, with only the quorum
necessary for a valid meeting. Shareholders will not be permitted to attend.
We are therefore strongly encouraging Shareholders to vote by electing the
Chairman of the Company as proxy. You can vote by returning the proxy
instructions that you received with this document.
As noted in its announcement of 17 August 2020, pursuant to the guidance
published by the London Stock Exchange in respect of the temporary measures
for the publication of half-yearly reports for AIM companies pursuant to AIM
Rule 18 of the AIM Rules for Companies, Clear Leisure will publish its interim
results for the Half year to 30 June 2020 no later than 30 October 2020.
Restoration of Trading
Furthermore, following the publishing and posting of its Final Results for the
year ended 31 December 2019 the Company is pleased to announce that it is
expected that trading in the Company's ordinary shares of 0.25 pence each will
be restored to trading on AIM at 13:30. today.
"Francesco Gardin, Chairman of Clear Leisure, commented, “We have finally
managed to publish the 2019 audited accounts due on 30 September, following a
two and a half week delay, caused as a result of the need for material
adjustments emerging just two days before the deadline. This matter
highlighted that the previous year accounts were incorrect as a result of
translating balances into Sterling for book-keeping purposes and then
translating them back into the functional and presentational currency of the
Group (Euros), when the underlying balances were already denominated in Euros.
Correcting these errors has involved a complete restatement, going back to
2017, which has been made to the Income Statement in relation to value changes
of other receivables and foreign exchange translation differences, alongside
changes to the corresponding balances in the Statement of Financial Position
and other currencies dependent accounting entries: Exceptional items, Finance
charges, Current asset and Loans. This issue has been resolved for the
published 2019 audited accounts and changes in the financial reporting process
are ongoing to address the underlying root cause.”
Francesco Gardin continued; “2019 saw the Company shift its focus towards
new investment opportunities within the technology sector and to date, we have
made several such investments. We remain committed to returning value to
shareholders as our ultimate goal and remain positive on two fronts; firstly
that our technology investments are considered sound, and secondly, that our
ongoing legal claims have strong merit for success.”
For further information please contact:
Clear Leisure
Plc
+39 335 296573
Francesco Gardin, CEO and Executive Chairman
SP Angel Corporate Finance (Nominated Adviser & Broker) +44 (0)20
3470 0470
Jeff Keating / John
Mackay
Leander (Financial
PR)
+44 (0) 7795 168 157
Christian Taylor-Wilkinson
CHAIRMAN’S STATEMENT
I am pleased to present the Group’s Final Results for the year ended 31
December 2019.
Overview
During 2019 the Company focused on assessing new investment opportunities
primarily within the technology sector, whilst continuing to pursue existing
legal actions in relation to its historical investee companies (the “Legacy
Assets”); in particular, Fallimento Mediapolis Srl,(“Mediapolis”)
Sipiem in Liquidazione SpA (in liquidation)(“Sipiem”) and Sosushi Company
Srl (“Sosushi”). In this regard the strategy has remained to gain direct
control of assets related to the above three companies by acquiring through
Clear Leisure 2017 PLC (“CL2017”), a wholly owned subsidiary of the
Company, the €10.8m legal claim against the previous management and Internal
Audit Committee of Sipiem; a €238,000 credit due by TLT SpA, the company
which owns the Ondaland water park; and the €1.03m action for liability
against the previous management of Sosushi.
Through these actions, the Company has managed to secure control over
potential gross assets valued at more than €12 million, valued in these
accounts at a fair value of ca €4.4 million.
Within the technology sector the Company acquired 20% of the Italian regulated
Crowdfunding platform, ForCrowd Srl (“ForCrowd”), subscribed to a
syndicated senior secured convertible promissory note issued by the Israeli
digital mapping company, Geosim Systems Ltd (“Geosim”); assisted legal
database company, PBV Monitor to launch its online and printed directory
services; and gained control of 100% of Miner One Limited and our investment
in the “Cryptocurrencies Data Centre”, which is presently under care and
maintenance waiting for further improvement in the cryptocurrency prices.
The investment in ForCrowd was completed , in October by issuing 54, 218,847
new ordinary shares of 0.25pence each in the Company (“Ordinary Shares”)
at a price of 0.3482p per share, as part of a larger ForCrowd capital
increase.
The only other share issue of the year has been of 4,000,000 new Ordinary
Shares at price per share of 0.75p to the Director as part of my 2018
remuneration, as announced on 29 August 2019.
Eufingest SA (“Eufingest”), a substantial shareholder in the Company,
continued to support the Company through the provision of loan facilities
amounting to €600,000 and £30,000 in 2019, €200,000 of which has been
used to refinance on improved terms a 2017 debt to a UK private lender.
With respect to Mediapolis, the Directors closely monitored the bankruptcy
procedure which, in June 2020, resulted in a positive settlement with the
receiver, amounting to €1,663,000 payable to Clear Leisure 2017, comprising
a first payment of €1,480,932.82, received during 2020, and a final
payment of €182,067 at the closure of the bankruptcy process. Moreover, the
Company has negotiated and offered the Mediapolis receiver to acquire the
potential legal action against former directors and members of the internal
audit committee, for damages estimated at several million euros.
Financial Review
The group reported a total comprehensive loss of €1,584,000 for the year
ended 31 December 2019: (2018: €3,740,000) and a loss before tax of
€1,584,000 (2018: €3,740,000). Operating losses for the period were
€1,384,000 (2018: €3,444,000).
The undiluted Net Asset Value (“NAV”) of the Group has decreased by €1.3
million in 2019, compared to an increase of €0.6 million in 2018. The Group
had Net Current Assets of €2.5 million as at 31 December 2019 (2018: €6.9
million).
Despite sustaining a high level of operational activity, the Company during
2019 managed to cut annual operating costs, with special regard to Legal and
Professional Services. Furthermore, during 2020 the Company also managed to
reduce costs by more than £100,000 through reducing contracted London office
space, related secretarial support and other internal expenses.
Operational Review
During 2019, the operations of the company were:
- Management of the Legacy Assets (mainly regarding
Mediapolis, Sipiem and Sosushi).
The Company continued to monitor the bankruptcy process and to request the
receipt of the proceeds of auction sale. Finally, an agreement has been
reached in 2020.
Sosushi and Sipiem have no operations, with the exception of managing the
action for liability against their respective previous management teams and,
for Sipiem alone, also the previous audit committee. During 2019, Clear
Leisure (via CL2017) purchased such claims, valued respectively €1.03m and
€10.8m.
The Company has also been active in preparing its defence and counterclaim
case in the UK against Sosushi, separate from the one aforementioned, which
the Company hopes to conclude in a positive manner in 2020.
- Direct Investment activity and management of the
technology portfolio.
During the year under review in October 2019, Clear Leisure completed a 20%
investment in ForCrowd, a new Italian crowdfunding platform, by issuing
54,218,847 Ordinary Shares each at a price of 0.3482p per Ordinary Share.
In the same period, the Company, supported GeoSim by subscribing to a
“syndicated senior secured convertible promissory note” issued by Geosim.
Moreover, the Company also managed to obtain 100% control of Miner One Limited
and the associated investment of its cryptocurrency datacenter, and it
continues to monitor trends in the cryptocurrency market, waiting for the
right time to relocate the data mining facility from Serbia and resume
profitable cryptocurrency extraction.
Finally, the Company assisted PBV Monitor in relation to the launch of its
directories line of business, both online and printed, whilst the launch of
the market intelligence tool recently launched in Q4 of 2020, as announced on
15 October 2020.
Although there can be no guarantees, the Board maintains a positive outlook on
the outcome of these investments returning value to its stakeholders.
Portfolio Companies
An update on the Group’s portfolio companies at 31 December 2019, is as
follows (percentage of equity held is shown in parenthesis):
GeoSim Systems Ltd (geosimcities.com) (4.53%): is an Israel based company that
develops 3D modelling software. Clear Leisure had confirmation by Geosim that
the most recent round of fundraising by GeoSim took place at a pre-money
valuation in excess of US$11 million, corresponding to a valuation for Clear
Leisure’s stake of €596k. Geosim has delivered on its project in Asia to
build a Digital Twin model of an international airport despite the inevitable
delays due to Covid-19.
PBV Monitor Srl (pbvmonitor.com) (10%): in December 2018 Clear Leisure
acquired a 10 per cent interest in PBV Monitor for a total consideration of
€300,000 paid in new Ordinary Shares at a price of 0.7882p each. PBV Monitor
is an Italian company specialising in the acquisition and dissemination of
data for the legal services industry, utilising proprietary market
intelligence tools and dedicated search software. PBV Monitor has assembled
and analysed the activity of over 8,600 law firms worldwide and over 100,000
business lawyers in 100 jurisdictions, producing approximately 43,000 articles
that have regularly been published on the Global Legal Chronicle
(https://www.globallegalchronicle.com). Currently, PBV Monitor processes
approximately twelve thousand corporate transactions per year and intends to
launch its new Intelligence Search online service, while continuing its
editorial and seminars activity.
Sipiem SpA (50.17%): is a minority shareholder in T.L.T. SaS and owns a number
of real estate assets in Italy, including a minority stake in the Ondaland
Waterpark. It has issued a €10.8m action for liability against the previous
management team and audit committee. The claim has been purchased by Clear
Leisure 2017.
Mediapolis Srl (84.04%): Clear Leisure 2017 Ltd, (“CL2017”), the wholly
owned subsidiary of the Company, retained the unchallengeable rights to the
proceeds of the auction (net of auction fees). In 2020, CL2017 reached a
settlement agreement with the receiver in the amount of €1,663,000 payable
to CL2017, with a first payment of €1,480,932.82 and a final payment of
€182,067 at the closure of the bankruptcy process. Once all amounts are
received, CL2017 will have no further claim against Mediapolis. This
represents a very important milestone in the Company’s life, bringing to a
successful conclusion a very complicated issue inherited from the previous
management of the Company.
Clear Leisure 2017 Limited (100%): Clear Leisure 2017 holds the remaining
rights on the auction proceeds (amounting to €182,067 with €1,480,932.82
having already been paid during 2020). Once these amounts are paid, CL2017
will remain the holder of other important assets: the €10.8m action for
liability vs against Sipiem previous management and Audit Committee and the
€1.038m action for liability against Sosushi previous management.
Furthermore, as per agreement with the receiver of Mediapolis, CL2017 has
offered €50,000 to buy the action for liability against the previous
management team of Mediapolis. Such an offer will only be accepted by the
receiver and endorsed by a judge, if it will be the better offer at the
conclusion of a public bid, by 31 October 2020. The creditor committee has
already accepted, in principal, the terms proposed by Clear Leisure.
ForCrowd Srl (ForCrowd.com) (20%): In October 2019 the Company acquired a 20%
interest in ForCrowd, an Italian equity crowdfunding platform based in Milan.
The consideration of €221,090, was settled by the issue of 54,218,847 new
Ordinary Shares.
In December 2019, ForCrowd officially launched its crowdfunding platform.
Subsequently in early 2020, despite the Covid pandemic, ForCrowd started the
first campaigns (“B4 tech” and “Meta Wellness”). The investment in
ForCrowd is part of a strategy of Clear Leisure allowing other portfolio
companies to have an easy access to the crowdfunding resources (e.g.
Geosim’s Digital Twins projects), whilst entitling Clear Leisure to
potential revenue streams (1% of funds received by investors on projects
introduced and 3% on funds introduced).
Miner One Limited (100%): In December 2017, the Company announced a first
investment in the blockchain sector, as a 50% Joint Venture (“JV”)
partner, alongside 64-Bit Limited, in a cryptocurrencies mining data centre.
Clear Leisure invested a nominal amount in 50% of the issued share capital of
the Company on that date, with the other 50% being held by its JV partner 64
Bit Limited. Clear Leisure then advanced an amount of €200,000, half of
which was paid by the issue of 7,868,130 new Ordinary Shares at a price of
1.11p per share) and the other half in cash. These were advanced to the 64 Bit
Limited as working capital for the construction of the data centre. The data
centre was located in Serbia to benefit from the competitive price of
electricity and became operational in mid-2018. Regrettably, the data centre
was placed into “care and maintenance”, as announced on 21 March 2019, due
to the sharp decrease in the price of the cryptocurrencies mined.
In August 2019 the Company acquired for €1 its partner’s 50% to become the
100% owner of the data centre, after its JV partner acknowledged its
mismanagement of the operations, including a wrongful allocation of the
partnership’s resources, mainly during the start-up phase. The data centre
currently remains on care and maintenance although the recent rise in the
price of Bitcoin has encouraged the Company to reassess its options for when
and where it recommences production.
Eufingest SA continued its financial support of the Company providing a new
loan facility of €150,000, whilst extending the maturity of all existing
loans to 30 September 2020, as announced on 18 February 2020.
Post-Balance Sheet Events
On 18 February 2020, the Company entered into a new unsecured loan facility
agreement with Eufingest SA, for a further €150,000 at an interest rate of
2,5% per annum repayable on 30 June 2020.
Following the receipt of the first Mediapolis tranche, Clear Leisure repaid to
Eufingest the principal amount of €550,000 plus interest accrued on such
loans of €11,157. In addition, on 5 October 2020, the Eufingest loans,
totaling €3,375,000 and £30,000 had their repayment date extended to 31
October 2020.
The subsidiaries operations have been strongly impacted by the COVID pandemic,
delaying the launch of new projects and slowing the expected revenue stream.
Clear Leisure has been supportive with its portfolio companies, assisting as
much possible in this difficult period. Unfortunately, the progress of the
claims has been delayed (especially in Italy) due to the Courts being closed
during the national Lockdown.
In this context, the Company engaged Sapphire Capital Partners LLP, an FCA
registered entity, to act as the Investment Manager in a proposed Enterprise
Investment Scheme Fund (“EIS” fund) launched together with Clear Leisure,
acting as Investment Manager. The fund will seek to invest in companies which
focus on the integration of biological and digital systems.
On 1 October 2020, the Company’s shares were temporarily suspended from
trading after announcing that the Company was unable to publish its audited
annual report and accounts for the year ended 31 December 2019 due to the
Accounting and Audit work in respect of the these items remaining ongoing.
This delay was caused by historical issues in the accounting of transactions
in different foreign currencies alongside the valuation of key assets and
liabilities. These have now been resolved, and as outlined in Note 28, the
financial statements have been restated to reflect these changes.
Outlook
The Board remains committed to return value to its stakeholders by
1. managing of the legacy portfolio assets, where positive outcomes are
expected from claims of the Company,
2. continuing with its investment strategy in the technology sector (both in
direct and indirect manner)
3. further reduction of the debt position (if and when the conditions are
deemed appropriate).
The board remains positive as the technology investments are deemed sound and
promising, and the legal claims have strong merit with counterparts that are
expected to be solvent.
Francesco Gardin
Executive Chairman and CEO
16 October 2020
GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR
ENDED 31 DECEMBER 2019
Note 2019 2018 (restated)
€’000 €’000
Continuing operations
Revenue 13 12
13 12
Administration expenses 7 (1,397) (3,822)
Exceptional items 8 - 366
Operating loss (1,384) (3,444)
Finance charges 9 (200) (296)
Loss before tax (1,584) (3,740)
Tax 13 - -
Loss from continuing operations (1,584) (3,740)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (1,584) (3,740)
Earnings per share:
Basic and fully diluted loss per share (cents) 14 (€0.003) (€0.008)
The accounting policies and notes form part of these financial statements.
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
Notes Group 2019 €’000 Group 2018 (restated) €’000 Company 2019 €’000 Company 2018 (restated) €’000
Non-current assets
Investments 15,16 1,117 923 521 340
Total non-current assets 1,117 923 521 340
Current assets
Trade and other receivables 16 6,604 7,485 1,493 1,396
Cash and cash equivalents 17 - 267 - 267
Total current assets 6,604 7,752 1,493 1,663
Total assets 7,721 8,675 2,014 2,003
Current liabilities
Trade and other payables 18 (396) (509) (339) (255)
Borrowings 19 (3,750) (343) (3,750) (343)
Total current liabilities (4,146) (852) (4,089) (598)
Net current assets/(liabilities) 2,458 6,900 (2,596) 1,065
Total assets less current liabilities 3,575 7,823 (2,075) 1,405
Non-current liabilities
Borrowings 19 (4,678) (7,598) (4,678) (7,598)
Total non-current liabilities (4,678) (7,598) (4,678) (7,598)
Total liabilities (8,824) (8,450) (8,767) (8,196)
Net (liabilities)/assets (1,103) 225 (6,753) (6,193)
Equity
Share capital 21 7,397 7,227 7,397 7,227
Share premium account 21 47,124 47,038 47,124 47,038
Other reserves 23 8,376 8,376 51 51
Retained losses (64,000) (62,416) (61,325) (60,509)
Total equity (1,103) 225 (6,753) (6,193)
An income statement for the parent company is not presented in accordance with
the exemption allowed by S408 of the Companies Act 2006. The parent
company’s comprehensive loss for the financial year amounted to €816,000
(2018: €10,447,000). The accounting policies and notes form part of these
financial statements.
The financial statements were approved by the board of directors and
authorised for issue on 16 October 2020, on its behalf by:
Francesco Gardin
Director
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
Group Share capital €’000 Share premium account €’000 Other reserves €’000 Retained losses €’000 Total equity €’000
At 1 January 2018 6,412 43,563 10,112 (58,887) 1,200
Prior period adjustment (1,693) 168 (1,525)
At 1 January 2018 (Restated) 6,412 43,563 8,419 (58,719) (325)
Total comprehensive loss for the year - - - (3,740) (3,740)
Issue of shares 815 3,559 - - 4,374
Share issue costs - (84) - - (84)
Transfer between reserves (43) 43 -
At 31 December 2018 (Restated) 7,227 47,038 8,376 (62,416) 225
Total comprehensive loss for the year - - - (1,584) (1,584)
Issue of shares 170 86 - - 256
At 31 December 2019 7,397 47,124 8,376 (64,000) (1,103)
The following describes the nature and purpose of each reserve:
Share
capital
represents the nominal value of equity shares.
Share
premium
amount subscribed for share capital in excess of the nominal value.
Retained
losses
cumulative net gains and losses less distributions made and items of other
comprehensive income not accumulated in another separate reserve.
Other
reserves
consist of three reserves, as detailed in Note 23, see below:
Merger reserve relates
to the difference in consideration and nominal value of shares issued during a
merger and the fair value of assets transferred in an acquisition of 90% or
more of the share capital of another entity.
Loan note equity reserve relates to the equity portion
of the convertible loan notes.
Share option reserve fair value of the
employee and key personnel equity settled share option scheme as accrued at
the statement of financial position date.
The accounting policies and notes form part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
Company Share capital €’000 Share premium account €’000 Other reserves €’000 Retained losses €’000 Total €’000
At 1 January 2018 6,412 43,563 1,787 (50,273) 1,489
Prior period adjustment (1,693) 168 (1,525)
At 1 January 2018 (Restated) 6,412 43,563 94 (50,105) (36)
Total comprehensive loss for the year - - - (10,447) (10,447)
Issue of shares 815 3,559 - - 4,374
Share issue costs - (84) - - (84)
Transfer between reserves (43) 43 -
At 31 December 2018 (Restated) 7,227 47,038 51 (60,509) (6,193)
Total comprehensive loss for the year - - - (816) (816)
Issue of shares 170 86 - - 256
At 31 December 2019 7,397 47,124 51 (61,325) (6,753)
The following describes the nature and purpose of each reserve:
Share
capital
represents the nominal value of equity shares.
Share
premium
amount subscribed for share capital in excess of the nominal value.
Retained
losses
cumulative net gains and losses less distributions made and items of other
comprehensive income not accumulated in another separate reserve.
Other
reserves
consist of two reserves, as detailed in Note 23, see below:
Loan note equity reserve relates to the equity portion
of the convertible loan notes.
Share option reserve fair value of the
employee and key personnel equity settled share option scheme as accrued at
the statement of financial position date.
The accounting policies and notes form part of these financial statements.
GROUP AND COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019
Note Group 2019 €’000 Group 2018 (restated) €’000 Company 2019 €’000 Company 2018 (restated) €’000
Cash used in operations
Loss before tax (1,584) (3,740) (816) (10,447)
Fair value changes in investments 27 - 40 8,571
Finance charges 200 296 200 291
Decrease /(increase) in receivables 882 2,187 (95) 570
(Decrease) /increase in payables (78) (174) 118 (421)
Net cash outflow from operating activities (553) (1,431) (553) (1,436)
Cash flows from investing activities
Purchase of investments 15 - - - -
Net cash outflow from investing activities - - - -
Cash flows from financing activities
Proceeds of issue of shares 21 - 1,303 - 1,303
Proceeds from borrowing 291 407 291 407
Interest paid (5) (12) (5) (7)
Net cash inflow from financing activities 286 1,698 286 1,703
Net (decrease)/increase in cash for the year (267) 267 (267) 267
Cash and cash equivalents at beginning of year 267 - 267 -
Cash and cash equivalents at end of year 17 - 267 - 267
The accounting policies and notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
1. General information
Clear Leisure plc is a company incorporated in the United Kingdom under the
Companies Act 2006. The Company’s ordinary shares are traded on AIM of the
London Stock Exchange. The address of the registered office is given on the
Company Information page. The nature of the Group’s operations and its
principal activities are set out in the Directors’ report on page 12.
2. Accounting policies
The principal accounting policies are summarised below. They have all been
applied consistently throughout the period covered by these consolidated
financial statements.
Basis of preparation
The consolidated Financial Statements of Clear Leisure plc have been prepared
in accordance with International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretations Committee (IFRIC) as adopted
by the European Union and the parts of Companies Act 2006 applicable to
companies reporting under IFRS.
The financial statements have been prepared under the historical cost
convention as modified by the revaluation of assets and liabilities held at
fair value.
The preparation of Financial Statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
Financial Statements are disclosed in Note 3.
The Consolidated Financial Statements are presented in Euros (€), the
presentational and functional currency, rounded to the nearest €’000.
New standards, amendments and interpretations adopted by the Group and Company
The Group and Company have applied the following new and amended standards for
the first time for its annual reporting period commencing 1 January 2019:
*
IFRS 16 Leases
*
Annual improvements to IFRS Standards 2015-2017 Cycle
*
Interpretation 23 ‘Uncertainty over Income Tax Treatments’
These new and amended standards have not had a material effect on the Group
and Company financial statements.
New standards, amendments and interpretations not yet adopted
As at the date of approval of these financial statements, the following
standards were in issue but not yet effective. These standards have not been
adopted early by the Company as they are not expected to have a material
impact on the financial statements other than requiring additional disclosure
or alternative presentation.
Effective date (period) beginning on or after
IFRS 3 Amendment - Definition of a Business 01/01/2020
IFRS 7, IFRS 9, IAS 39 Amendment - Interest Rate Benchmark Reforms 01/01/2020
IFRS 17 Insurance Contracts 01/01/2021
IAS 1, IAS 8 Amendment - Definition of Material 01/01/2020
IAS 1 Amendment - Correction of Liabilities as Current and Non-Current 01/01/2022
The International Financial Reporting Interpretations Committee has also
issued interpretations which the Company does not consider will have a
significant impact on the financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Group (its subsidiaries) made up to
31 December each year. Control is achieved where the Group has the power to
govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are
included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate. Where
necessary, adjustments are made to the financial statements of subsidiaries to
bring the accounting policies used into line with those used by the group. All
intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the
acquisition method. The consideration for each acquisition is measured at the
aggregate of the fair values (at the date of exchange) of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are recognised
in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or
liability resulting from a contingent consideration arrangement, measured at
its acquisition-date fair value. Subsequent changes in such fair values are
adjusted against the cost of acquisition where they qualify as measurement
period adjustments (see below). All other subsequent changes in the fair value
of contingent consideration classified as an asset or liability are accounted
for in accordance with relevant IFRSs. Changes in the fair value of contingent
consideration classified as equity are not recognised.
Where a business combination is achieved in stages, the Group's previously
held interests in the acquired entity are remeasured to fair value at the
acquisition date (i.e. the date the Group attains control) and the resulting
gain or loss, if any, is recognised in profit or loss. Amounts arising from
interests in the acquiree prior to the acquisition date that have previously
been recognised in other comprehensive income are reclassified to profit or
loss, where such treatment would be appropriate if that interest were disposed
of.
The acquiree's identifiable assets, liabilities and contingent liabilities
that meet the conditions for recognition under IFRS 3(2008) are recognised at
their fair 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
lAS12 Income Taxes and lAS19 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 end
of the reporting period in which the combination occurs, the Group reports
provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see
below), or additional assets or liabilities are recognised, to reflect new
information obtained about facts and circumstances that existed as of the
acquisition date that, 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 date
the Group obtains complete information about facts and circumstances that
existed as of the acquisition date and is subject to a maximum of one year.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provision for
impairment.
Foreign currency
The functional currency is Euro. Foreign currency transactions are translated
into the functional currency using the exchange rates prevailing at the dates
of the transactions or valuation where items are re-measured. Exchange gains
and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Statement of
Comprehensive Income. Exchange gains and losses that relate to borrowings and
cash and cash equivalents are presented in the income statement within
‘finance income or costs’. All other exchange gains and losses are
presented in the income statement within ‘other (losses)/gains – net’.
Changes in the fair value of monetary securities denominated in foreign
currency classified as available for sale are analysed between translation
differences resulting from changes in the amortised cost of the security and
other changes in the carrying amount of the security. Translation differences
related to changes in amortised cost are recognised in profit or loss, and
other changes in carrying amount are recognised in other comprehensive income.
Taxation
The tax expense represents the sum of the tax currently payable and any
deferred tax.
Current taxes are based on the results of the Group companies and are
calculated according to local tax rules, using the tax rates that have been
enacted or substantially enacted by the period-end date.
Deferred tax is provided in full using the financial position liability method
for all taxable temporary differences arising between the tax bases of assets
and liabilities and their carrying values for financial reporting purposes.
Deferred tax is measured using currently enacted or substantially enacted tax
rates. Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation
of taxable profit and is accounted for using the statement of financial
position liability method. Deferred tax liabilities are generally recognised
for all taxable temporary differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference arises from
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Deferred tax assets are recognised to the extent the temporary difference will
reverse in the foreseeable future and that it is probable that future taxable
profit will be available against which the asset can be utilised. Deferred tax
is recognised for all deductible temporary differences arising from
investments in subsidiaries and associates, to the extent that it is probable
that the temporary difference will reverse in the foreseeable future and
taxable profit will be available against which the temporary difference can be
utilised.
Revenue
The Group provides consultancy services, which are invoiced at the point of
the provision of the service. Revenue is recognised as earned at a point in
time on the unconditional supply of these services, which are received and
consumed simultaneously by the customer. The Group measures revenues at the
fair value of the consideration received or receivable for the provision of
consultancy services net of Value Added Tax.
Interest income
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected
life of the financial asset to that asset’s net carrying amount on initial
recognition.
Financial instruments
Classification and measurement
The Company classifies its financial assets into the following categories:
those to be measured subsequently at fair value through the income statement
(FVPL) and those to be held at amortised cost.
Classification depends on the business model for managing the financial assets
and the contractual terms of the cash flows.
Management determines the classification of financial assets at initial
recognition. The Company’s policy with regard to financial risk management
is set out in Note 21. Generally, the Company does not acquire financial
assets for the purpose of selling in the short term.
The Company’s business model is primarily that of “hold to collect”
(where assets are held in order to collect contractual cash flows). When the
Company enters into derivative contracts, these transactions are designed to
reduce exposures relating to assets and liabilities, firm commitments or
anticipated transactions.
Financial Assets held at amortised cost
The classification applies to debt instruments which are held under a hold to
collect business model and which have cash flows that meet the “solely
payments of principal and interest” (SPPI) criteria.
At initial recognition, trade receivables that do not have a significant
financing component, are recognised at their transaction price. Other
financial assets are initially recognised at fair value plus related
transaction costs, they are subsequently measured at amortised costs using the
effective interest method. Any gain or loss on derecognition or modification
of a financial asset held at amortised cost is recognised in the income
statement.
Financial Assets held at fair value through profit or loss (FVPL)
The classification applies to the following financial assets. In all cases,
transaction costs are immediately expensed to the income statement.
Debt instruments that do not meet the criteria of amortised costs or fair
value through other comprehensive income. The Company has a significant
proportion of trade receivables with embedded derivatives for professional
pricing. These receivables are generally held to collect but do not meet the
SPPI criteria and as a result must be held at FVPL. Subsequent fair value
gains or losses are taken to the income statement.
Equity investments which are held for trading or where the FVOCI election has
not been applied. All fair value gains or losses and related dividend income
are recognised in the income statement.
Derivatives which are not designated as a hedging instrument. All subsequent
fair value gains or losses are recognised in the income statement.
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value
and are subsequently measured at amortised cost using the effective interest
rate method. A provision is established when there is objective evidence that
the Group will not be able to collect all amounts due. The amount of any
provision is recognised in the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value
with maturities of three months or less from inception.
Impairment of financial assets
A forward looking expected credit loss (ECL) review is required for: debt
instruments measured at amortised costs are held at fair value through other
comprehensive income: loan commitments and financial guarantees not measured
at fair value through profit or loss; lease receivables and trade receivables
that give rise to an unconditional right to consideration.
As permitted by IFRS9, the Company applies the “simplified approach” to
trade receivable balances and the “general approach” to all other
financial assets. The general approach incorporates a review for any
significant increase in counter party credit risk since inception. The ECL
reviews including assumptions about the risk of default and expected loss
rates. For trade receivables, the assessment takes into account the use of
credit enhancements, for example, letters of credit. Impairments for undrawn
loan commitments are reflected as a provision.
Financial liabilities
Borrowings and other financial liabilities (including trade payables but
excluding derivative liabilities) are recognised initially at fair value, net
of transaction costs incurred, and are subsequently measured at amortised
costs.
Convertible bonds
Convertible bonds are regarded as compound instruments, consisting of a
liability component and an equity component. At the date of issue, the fair
value of the liability component is estimated using the prevailing market
interest rate for similar non-convertible debt. The difference between the
proceeds of issue of the convertible loan notes and the fair value assigned to
the liability component, representing the embedded option to convert the
liability into equity of the Group, is included in equity.
Issue costs are apportioned between the liability and equity components of the
convertible loan notes based on their relative carrying amounts at the date of
issue. The portion relating to the equity component is charged directly
against equity.
The interest expense on the liability component is calculated by applying the
prevailing market interest rate for similar non-convertible debt to the
liability component of the instrument. The difference between this amount and
the interest paid is added to the carrying amount of the convertible loan
note.
Borrowings costs
Borrowing costs are recognised in profit or loss in the period in which they
are incurred.
Trade payables
Trade payables are initially measured at fair value, and are subsequently
measured at amortised cost, using the effective interest rate method.
Segmental reporting
In identifying its operating segments, management generally follows the
Group's service lines, which represent the main products and services provided
by the Group. The measurement policies the Group uses for segment reporting
under IFRS 8 are the same as those used in its financial statements. The
disclosure is based on the information that is presented to the chief
operating decision maker, which is considered to be the board of Clear Leisure
plc.
Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Group will
be required to settle that obligation and a reliable estimate can be made of
the amount of the obligation
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the year-end date, taking into
account the risks and uncertainties surrounding the obligation.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. Equity instruments
issued by the Group are recorded at the proceeds received net of direct issue
costs.
Share capital account represents the nominal value of the shares issued.
The share premium account represents premiums received on the initial issuing
of the share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income tax
benefits.
Retained losses include all current and prior period results as disclosed in
the statement of comprehensive income.
Other reserves consist of the merger reserve, revaluation reserve, exchange
translation reserve and loan equity reserve.
the merger reserve represents the premium on the shares issued less the
nominal value of the shares, being the difference between the fair value of
the consideration and the nominal value of the shares.
the revaluation reserve represents the difference between the purchase costs
of the available for sale investments less any impairment charge and the
market or fair value of those investments at the accounting date.
the exchange translation reserve represents the movement of items on the
statement of financial position that were denominated in foreign before
translation
the loan equity reserve represents the value of the equity component of the
nominal value of the loan notes issued.
3. Critical accounting judgements and key sources of
estimation uncertainty
The preparation of Financial Statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. Estimates and judgements are continually evaluated and are based
on historical experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below
Fair value measurement
Management uses valuation techniques to determine the fair value of financial
instruments (where active market quotes are not available) and non-financial
assets. This involves developing estimates and assumptions consistent with how
market participants would price the instrument. Management bases its
assumptions on observable data as far as possible, but this is not always
available. In that case management uses the best information available.
Estimated fair values may vary from the actual prices that would be achieved
in an arm’s length transaction at the reporting date.
In order to arrive at the fair value of investments a significant amount of
judgement and estimation has been adopted by the Directors as detailed in the
investments accounting policy. Where these investments are un-listed and there
is no readily available market for sale the carrying value is based upon
future cash flows and current earnings multiples for which similar entities
have been sold. The nature of these assumptions and the estimation uncertainty
as a result is outlined in Note 15, along with sensitivities in Note 20.
Going Concern
The Group’s activities generated a loss of €1,584,000 (2018: €3,740,000)
and had net current assets of €2,458,000 as at 31 December 2019 (2018: net
current assets of €6,900,000). The Group’s operational existence is still
dependent on the ability to raise further funding either through an equity
placing on AIM, or through other external sources, to support the on-going
working capital requirements.
After making due enquiries, the Directors have formed a judgement that there
is a reasonable expectation that the Group can secure further adequate
resources to continue in operational existence for the foreseeable future and
that adequate arrangements will be in place to enable the settlement of their
financial commitments, as and when they fall due.
For this reason, the Directors continue to adopt the going concern basis in
preparing the financial statements. Whilst there are inherent uncertainties in
relation to future events, and therefore no certainty over the outcome of the
matters described, the Directors consider that, based upon financial
projections and dependant on the success of their efforts to complete these
activities, the Group will be a going concern for the next twelve months. If
it is not possible for the Directors to realise their plans, over which there
is significant uncertainty, the carrying value of the assets of the Group is
likely to be impaired.
In relation to the impact of COVID-19 on the Company, the Company's employees
can carry out their duties remotely, via the network infrastructure in place.
As a result, there was no disruption to the operational activities of the
Company during the COVID-19 social distancing and working from home
restrictions. All key business functions continue to operate at normal
capacity.
Notwithstanding the above, the Directors note the material uncertainty in
relation to the Group being unable to realise its assets and discharge its
liabilities in the normal course of business.
4. Segment information
The Directors are of the opinion that under IFRS 8 - "operating segment" there
are no identifiable business segments that are subject to risks and returns
different to the core business of investment management. The information
reported to the Directors, for the purposes of resource allocation and
assessment of performance is based wholly on the overall activities of the
Group. Therefore, the Directors have determined that there is only one
reportable segment under IFRS 8.
The Group has not generated a material level of income and has no major
customers.
5. Staff costs
2019 €’000 2018 €’000
Staff costs during the period including directors comprise:
Wages and salaries 277 458
Social security costs and pension contributions 5 12
282 470
6. Directors’ Emoluments
2019 €’000 2018 €’000
Aggregate emoluments 176 339
176 339
There are no retirement benefits accruing to the Directors. Details of
directors’ remuneration are included in the Directors’ Report.
7. Expenses by nature
2019 €’000 2018 (restated) €’000
Directors emoluments 176 339
Employee emoluments 106 131
Legal and professional fees 337 705
Audit and accountancy fees 64 70
Administrative expenditure 240 327
Impairment of assets 474 155
Legal claim - 2,095
1,397 3,822
In September 2019, the Group entered into a binding agreement with Sipiem SpA
(“Sipiem”) to buy the €10.8m legal action against the former Sipiem
directors, which was filed in the Italian courts on 26 February 2019. The
agreement also includes a €238,000 credit due to Sipiem by TLT SpA
(“TLT”), the parent company of the Ondaland waterpark. Clear Leisure is a
50.17% shareholder of Sipiem, whilst Sipiem owns a small stake in TLT SpA.
The legal action originated when Sipiem’s liquidator filed a claim against
Sipiem’s previous executive management team and internal audit committee for
fraud and mismanagement.
Under the terms the agreement, the Company’s subsidiary Clear Leisure 2017
Limited (“CL2017”) has paid €50,000 to Sipiem to acquire the legal
action from Sipiem and CL2017 will bear all legal costs going forward, which
have been capped at €35,000. CL2017 will receive 70% of any monies recovered
should the ruling go in favour of the plaintiff (CL2017).
8. Exceptional items
2019 €’000 2018 (restated) €’000
Claim settlement - 1,300
Impairment of syndicated loans - (934)
- 366
On 9 November 2018 a full and final settlement had been reached in relation to
a legal claim for the sum of €1,300,000 payable in cash to Clear Leisure
plc. Following impairment of syndicated loans of €934,000 net exceptional
items were €366,000.
In the 2018 financial statements, the income received from the claim was
disclosed below the Operating Loss line. In the 2019 financial statements,
the comparatives have been restated to disclose this income above the
Operating Loss line in the Group Income Statement.
9. Finance charges
2019 €’000 2018 (restated) €’000
Interest on convertible bonds 195 284
Interest on other loans - 6
Irrecoverable VAT Bank fees & revaluations - 5 6 -
200 296
10. Auditor’s remuneration
2019 €’000 2018 (restated) €’000
Group Auditor’s remuneration:
Fees payable to the Group’s auditor for the audit of the Company and consolidated financial statements: 35 35
Non audit services:
Other services (tax) - -
Subsidiary Auditor’s remuneration
Other services pursuant to legislation 10 10
45 45
11. Employee numbers
2019 Number 2018 Number
The average number of Company’s employees, including directors during the period was as follows:
Management and administration 4 4
12. Company income statement
An income statement for Clear Leisure plc is not presented in accordance with
the exemption allowed by Section 408 of the Companies Act 2006. The parent
company’s comprehensive loss for the financial year amounted to €816,000
(2018: €10,447,000).
13. Taxation
2019 €’000 2018 €’000
Current taxation - -
Deferred taxation - -
Tax charge for the year - -
The Group has a potential deferred tax asset arising from unutilised
management expenses available for carry forward and relief against future
taxable profits. The deferred tax asset has not been recognised in the
financial statements in accordance with the Group’s accounting policy for
deferred tax.
The Group’s unutilised management expenses and capital losses carried
forward at 31 December 2019 amount to approximately €22 million (2018: €21
million) and €9 million (2018: €9 million) respectively.
The standard rate of tax for the current year, based on the UK effective rate
of corporation tax is 19% (2018: 19%). The actual tax for the current and
previous year varies from the standard rate for the reasons set out in the
following reconciliation:
Continuing operations 2019 €’000 2018 (restated) €’000
Loss for the year before tax (1,584) (3,740)
Tax on ordinary activities at standard rate (301) (711)
Effects of:
Expenses not deductible for tax purposes - 2
Foreign taxes - -
Tax losses available for carry forward against future profits 301 709
Total tax - -
14. Earnings per share
The basic earnings per share is calculated by dividing the loss attributable
to equity shareholders by the weighted average number of ordinary shares in
issue during the period. Diluted earnings per share is computed using the
weighted average number of shares during the period adjusted for the dilutive
effect of share options and convertible loans outstanding during the period.
The loss and weighted average number of shares used in the calculation are set
out below:
2019 2018 (restated)
Profit/ (Loss) €’000 Weighted average no. of shares 000’s Per share Amount Euro Profit/ (Loss) €’000 Weighted average no. of shares 000’s Per share Amount Euro
Basic and fully diluted earnings per share
Continuing operations (1,584) 618,891 (€0.003) (3,740) 468,986 (€0.008)
Total operations (1,584) 618,891 (€0.003) (3,740) 468,986 (€0.008)
The share options in issue are anti-dilutive in respect of the loss per share
calculation and have therefore not been included.
IAS 33 requires presentation of diluted earnings per share when a company
could be called upon to issue shares that would decrease earnings per share.
In respect of 2019 and 2018 the diluted loss per share is the same as the
basic loss per share as the loss for each year has an anti-dilutive effect.
15. Investments
The significant entities for which the Group owns shares, including the parent
company, held at 31 December 2019 were as follows:
Group Companies Ownership Country Company Status Net Assets/(Liabilities) €,000 Date of latest accounts Treatment
Clear Leisure PLC 100.00% UK Parent Company (6,753) 2019 Consolidated
Brainspark Associates Ltd 100.00% UK Trading (669) 2019 Consolidated
Clear Leisure 2017 Ltd 100.00% UK Trading 36,245 2019 Consolidated
Milan Digital Twin Ltd 100.00% UK Incorporated in 2019 Nil N/A Consolidated
London Digital Twin Ltd 100.00% UK Incorporated in 2019 Nil N/A Consolidated
Clear Holiday Srl 100.00% Italy Dormant/ Inactive 10 2014 Not Consolidated
Miner One 100.00% UK Dormant - 2018 Consolidated
Alnitak S.A 100.00% Luxemburg Inactive (8) 2014 Not Consolidated
Mediapolis Investment S.A 71.72% Luxemburg Inactive (6,648) 2010 Not Consolidated
Sosushi Company Srl 99.30% Italy In liquidation 654 2013 Not Consolidated
Fallimento Mediapolis Srl 84.04% Italy Liquidated 1,204 2016 Not Consolidated
ORH S.P.A 73.40% Italy Liquidated 1,718 2012 Not Consolidated
Birdland Srl 52.00% Italy In liquidation (288) 2016 Not Consolidated
Sipiem S.P.A 50.17% Italy In liquidation 645 2014 Not Consolidated
Bibop Srl 36.94% Italy Liquidated (211) 2017 No fair value
ForCrowd Srl 20.00% Italy Investment 74 2018 Held at fair value
PBV Monitor 10.00% Italy Investment 166 2019 Held at fair value
Geosim Systems 4.53% Israel Investment (330) 2018 Held at fair value
Beni Immobili Srl 15.05% Italy Investment 14 2014 No fair value
TLT S.P.A 0.25% Italy Investment (2,476) 2016 No fair value
The directors have assessed the group’s interests in other entities on an
individual basis and come to the overall conclusions as detailed in the table
below. Please see the note narrative for additional information on an entity
by entity basis.
Clear Leisure PLC
This entity is the UK based group parent and has therefore been included in
the consolidation.
Brainspark Associates Limited
This entity is a 100% owned UK incorporated subsidiary of Clear Leisure PLC
and has been included in the consolidation.
Clear Leisure 2017 Limited
This entity is a 100% owned UK incorporated subsidiary of Clear Leisure PLC
and has been included in the consolidation.
Milan Digital Twin Limited
This entity is a 100% owned UK company which has been incorporated on 30
December 2019 with its first accounts made up to 31 December 2020. This entity
only includes unpaid share capital and has not begun operating. It has been
included in the consolidation with an overall impact of nil.
London Digital Twin Limited
This entity is a 100% owned UK company which has been incorporated on 30
December 2019 with its first accounts made up to 31 December 2020. This entity
only includes unpaid share capital and has not begun operating. It has been
included in the consolidation with an overall impact of nil.
Clear Holiday Srl
Clear Holiday Srl is a 100% owned subsidiary of the group incorporated in
Italy. However, this entity has not been consolidated on the basis that it is
immaterial to the group financial statements. The balances held within the
company are not with external third parties and therefore the overall impact
on the accounts would be trivial.
Miner One Limited
Miner One Limited is a UK based entity, which was initially set up as a 50%
joint venture with 64Bit. During the year, the other 50% shareholding has been
acquired from the partner and now it is 100% owned. The entity itself was
initially set up with the hope of transferring certain assets, notably a data
centre located in Serbia into its possession. However, due to disputes with
the previous joint venture partner this did not materialise. In 2019 this
entity remained dormant and did not trade during the year. This entity only
includes unpaid share capital and has not begun operating, it has been
included in the consolidation with an overall impact of nil.
Alnitak S.A
Alnitak S.A is a 100% owned subsidiary incorporated in Luxemburg. The company
itself is inactive, being kept registered mainly because of a claim filed by
the former sole Director. The initial ruling, after losing the case in the
first instance has been appealed by Alnitak S.A, but is similar to another
claim previously won by Clear Leisure in the Rome court where all legal costs
were settled by the claimant.
Although the entity is inactive, there is no active management in Luxemburg
and therefore Clear Leisure has also had difficulty formally liquidating the
company. The net liability position of Alnitak S.A is immaterial to the group
and the balances are largely internal. Therefore, the non-consolidation of
this entity is deemed to be immaterial to the group.
Mediapolis Investment S.A
Mediapolis Investment S.A is a 71.72% owned subsidiary incorporated in
Luxemburg. The company itself is inactive and is not trading. Previous
management failed to pay accountants and local directors for the previous six
years and no financial statements have been filed for over seven years.
Although this entity is inactive and
71.72% of the shares are held by the group, there is no active management in
Luxemburg, and this has led to a difficulty in finalizing a liquidation.
The most recent accounts available were produced in 2010 and the main asset
held by the entity is the investment of 13% of the capital in another former
group company, Fallimento Mediapolis Srl, which has been liquidated. This
investment is carried at approximately EUR6.6m and has been impaired to nil.
Therefore, the non-consolidation of this entity is deemed to be immaterial to
the group.
Sosushi Company Srl
Sosushi Company Srl is a 99.3% owned entity incorporated in Italy. The company
is in the process of liquidation and will be liquidated once certain ongoing
legal matters have been resolved. No accounts have been approved for this
company since 2014, when the process of liquidation begun. Accounting
information was never passed to the sole director despite several requests to
the accountant. Further actions have now been taken to resolve the issues
around accounting information and a new accountant has been appointed. Due to
the liquidation, it is deemed that there is no control by the group over the
entity and therefore the financial information for Sosushi Company Srl has not
been consolidated into the group financial statements. The investment in
Sosushi Company Srl is accounted at fair value through profit or loss.
Fallimento Mediapolis Srl
Fallimento Mediapolis Srl is a 84.04% equivalent owned entity incorporated in
Italy. Clear Leisure Plc holds directly 74.67% of the capital of the company
whilst a 13% stake is held via Mediapolis Investment S.A as noted above. The
company was liquidated in 2017 and therefore this is the date from which
control is deemed to have been lost. Therefore, the financial information for
Fallimento Mediapolis Srl has not been consolidated into the group financial
statements. The investment in Fallimento Mediapolis Srl is accounted at fair
value through profit or loss.
ORH S.P.A
ORH S.P.A was a 73.4% owned entity incorporated in Italy. The company was
liquidated in 2013 and therefore this is the date from which control is deemed
to have been lost. Therefore, the financial information for ORH S.P.A has not
been consolidated into the group financial statements. The investment in ORH
S.P.A is accounted at fair value through profit or loss.
Birdland Srl
Birdland Srl is a 52% owned entity incorporated in Italy. The stake in the
entity is indirectly owned via Brainspark Associates Limited. The company was
placed into liquidation in 2017 and therefore this is the date from which
control is deemed to have been lost. Therefore, the financial information for
Birdland Srl has not been consolidated into the group financial statements.
The investment in Birdland Srl is accounted at fair value through profit or
loss.
Sipiem S.P.A
Sipiem S.P.A is a 50.17% owned entity incorporated in Italy. The entity has
not been trading for a number of years and has only been maintained due to the
ongoing legal matters with the former directors. An amount receivable has been
recognised at the group level relating to the part of the claim which is
payable to Clear Leisure PLC. The company is now in liquidation which
commenced in 2015. Therefore, this is the date from which control is deemed to
have been lost. Therefore, the financial information for Sipiem S.P.A has not
been consolidated into the group financial statements. The investment in
Sipiem S.P.A is accounted at fair value through profit or loss.
Bibop Srl
Bibop Srl is a 36.94% equivalent owned investment in a company incorporated in
Italy. Birldand Srl holds a majority stake in the capital of the company. As
Birdland Srl is in liquidation the group does not control or exercise
significant influence on Bipop Srl and, accordingly the company is not
consolidated, or equity accounted in the group financial statements. As the
investment is not held directly by the group, no value is recognised in the
financial statements.
ForCrowd Srl
ForCrowd Srl is a 20% owned investment in an entity incorporated in Italy.
This is a new investment which has been acquired during the year and has been
recognised in the accounts at its fair value.
The value of the investment under equity accounting approximates its cost, as
the associate has not started significant operations prior to 31 December
2019. Under this method the amount recognised is €221,090 (2018: N.A.)
This cost has been assessed in relation to the last (and only) equity round of
the company in October 2019, in which the entire post money valuation of the
company was €1,105,450, with Clear Leisure directly holding the 20% of such
amount.
ForCrowd is a new investment made in 2019 investment and therefore has no
comparable value in 2018.
PBV Monitor Srl
PBV Monitor Srl is a 10% owned investment in an entity incorporated in Italy.
The investment has been recognised in the accounts at its fair value.
The Fair Value of PBV Monitor (€300,000, 2018: €340,047) has been assessed
in relation to the last equity round of the company in early 2020, in which
the entire post money valuation of the company was €3,000,000, with Clear
Leisure directly holding the 10% of such amount. The difference in the
valuation between 2019 and 2018, attributable to lower value attributed to the
company during the 2020 equity round.
The Fair Value assessment of PBV Monitor, is directly related to the
company’s valuation in future rounds.
Geosim Systems Limited
Geosim Systems Limited is a 4.53% owned investment in an entity incorporated
in Israel. The investment has been recognised in the accounts through its fair
value and is held via Brainspark Associates Limited.
The Fair Value of Geosim (€596,045, 2018: €583,319) has been assessed in
relation to the last equity round of the company in 2018, in which Clear
Leisure’s 533,990 Geosim shares have been valued at $1.25 each. The
difference in the valuation between 2019 and 2018, attributable to the
variance in the EUR/USD exchange rate.
The Fair Value assessment of Geosim is directly related to the company’s
valuation in future rounds and to the EUR/USD exchange rate.
Beni Immobili Srl
Beni Immobili Srl a 15.05% equivalent owned investment in an entity
incorporated in Italy. The shares in this company are held via Sipiem S.P.A.
No fair value is recognised for this investment as the entity has minimal net
assets and the valuation would be trivial to the consolidated financial
statements. Moreover, as the investment is held via Sipiem S.P.A, which is in
liquidation, the investment should not be recognised as an asset.
TLT S.P.A
TLT S.P.A is a 0.25% owned investment based in Italy. No fair value is
recognised for this investment as the entity has a large net liability
position and due to the small shareholding, any potential valuation would be
trivial to the consolidated financial statements. Moreover, as the investment
is held via Sipiem S.P.A, which is in liquidation, the investment should not
be recognised as an asset.
Group Company
2019 €’000 2018 (restated) €’000 2019 €’000 2018 (restated) €’000
At as 1 January 923 - 340 -
Additions 221 923 221 340
Impairment of investments (27) - (40) -
Carrying value at 31 December 1,117 923 521 340
An amount of €596,045 (2018: €583,000) included within Group investments
held for trading is a level 3 investment and represents the fair value of
533,990 shares in GeoSim Systems Ltd. GeoSim Systems Ltd is an Israeli company
seeking to establish itself as the world leader in building complete and
photorealistic 3D virtual cities and in delivering them through the Internet
for use in local searches, real estate and city planning, homeland security,
tourism and entertainment. Clear Leisure owns 4.53% of GeoSim Systems Ltd.
An amount of €300,000 (2018: €340,000) included within Company investments
held for trading is a level 3 investment and represents the fair value of a
10% interest in PBV Monitor Srl (“PBV”). PBV is an Italian company
specialising in the acquisition and dissemination of data for the legal
services industry, utilising proprietary market intelligence tools and
dedicated search software. Clear Leisure acquired 10% of PBV in December
2018. As part of the investment agreement, Clear Leisure was granted a seat
on the board of PBV and was appointed as exclusive advisor to PBV regarding
the possible sale of PBV from 1 January 2020 for a period of four years and
will be entitled to a 4% commission fee on the proceeds of any sale.
An amount of €221,000 included within Company investments held for trading
is a level 3 investment and represents a 20% interest in ForCrowd Srl
(“ForCrowd”). ForCrowd is an Italian equity crowdfunding platform based in
Milan dedicated to Italian small/medium companies. ForCrowd was granted a
mandatory Crowdfunding license in June 2019 by Commissione Nazionale per le
Società; e la Borsa (“Consob”), the equivalent of the UK Financial
Conduct Authority in Italy. As part of the terms of the investment, Clear
Leisure is entitled to a referral fee on all clients and investors introduced
to ForCrowd. The referral fee will be 1% of the total amount raised for any
projects Clear Leisure introduces to ForCrowd and it will receive an
additional 3% of funds invested into a project by an investor introduced by
the Company. ForCrowd’s main shareholder is For Finanza d’Impresa e
Management Srl (“ForFinanza”), a financial and management consulting
company based in Milan that has extensive expertise in corporate finance and
is part of a large network of individual and corporate investors in northern
Italy.
16. Trade and other receivables
Group Company
2019 €’000 2018 (restated) €’000 2019 €’000 2018 (restated) €’000
Trade receivables 5 - - -
Other receivables 6,102 7,003 45 42
Amounts owed by related parties 497 482 1,448 1,354
6,604 7,485 1,493 1,396
Group other receivables includes and amount of €4,445,000 due in relation to
the ongoing Sipiem legal claim, which is unsecured, interest free and does not
have fixed terms of repayment; and an amount of €1,613,000 due in relation
to the Fallimento Mediapolis Srl bankruptcy procedure.
The Directors consider that the carrying value of trade and other receivables
approximates to their fair value.
17. Cash and cash equivalents
Group Company
2019 €’000 2018 (restated) €’000 2019 €’000 2018 (restated) €’000
Cash at bank and in hand - 267 - 267
- 267 - 267
The Directors consider the carrying amounts of cash and cash equivalents
approximates to their fair value.
18. Trade and other payables
Group Company
2019 €’000 2018 (restated) €’000 2019 €’000 2018 (restated) €’000
Trade payables 205 307 205 146
Other payables 124 152 72 64
Accruals 67 50 62 45
Trade and other payables 396 509 339 255
The Directors consider that the carrying value of trade and other payables
approximates to their fair value.
19. Borrowings
Group Company
2019 €’000 2018 (restated) €’000 2019 €’000 2018 (restated) €’000
Zero rate convertible bond 2015 4,678 4,529 4,678 4,529
Convertible loan note 3,750 3,069 3,750 3,069
Other borrowings - 343 - 343
8,428 7,941 8,428 7,941
Disclosed as: Current borrowings 3,750 343 3,750 343
Non-current borrowings 4,678 7,598 4,678 7,598
8,428 7,941 8,428 7,941
7% Convertible Bond 2014
This historic bond was extinguished in October 2018 following the final
conversion by two bond holders of £65,000 (€73,000) including cumulative
interest into 1,625,000 new ordinary shares of 0.25 pence at a price of 4.00
pence per share.
Zero Rate Convertible Bond 2015
2019 €’000 2018 (restated) €’000
As at 1 January 4,529 6,523
Adjustment for the conversion of bonds (2,000)
Interest charge for the year 149 6
As at 31 December 4,678 4,529
Disclosed as:
Non-Current Liabilities 4,678 4,529
Current Liabilities - -
Interest on the bonds is payable annually on 31 March each year. The bonds at
31 December 2019 includes all interest accrued to that date. The unpaid
interest together with accrued interest to 31 December 2019 is included within
current liabilities.
On 25 March 2013 the Company issued €3,000,000 nominal value of zero rate
convertible bonds at a discount of 22%. The bonds are convertible at 15p per
share 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 in
settlement of a debt of €518,000 and €450,000 bonds were issued for cash
realising €412,000 before expenses.
On 15 December 2015 the bondholders meeting approved the amendments on the
Zero Rate Convertible Bond 2015, originally due on 15 December 2015; Under new
terms the final maturity date of the Bond is 15 December 2017 and the interest
has been reduced from 9.5% to 7%.
On 15 December 2016 the bondholders meeting approved the amendments on the
Zero Rate Convertible Bond 2015, originally due on 15 December 2017; Under new
terms the final maturity date of the Bond is 15 December 2018 and the interest
has been reduced from 7% to 1%.
On 19 June 2018, the holders of its €9.9m Bonds agreed to extend the final
maturity date of the Bonds from 15 December 2018 to 15 December 2022. The
Company is now able to convert the Bonds into new ordinary shares of 0.25p
each.
On 28 December 2018, bonds with a face value of €2,100,000 plus cumulative
interest were converted into 50,992,826 new ordinary shares of 0.25 pence at a
price of 3.76 pence per share.
On 29 March 2019, Eufingest SA agreed to extend the repayment of the following
unsecured loans from initially 31 December 2018 to 31 March 2019 and then to
30 June 2019. €50,000 & €250,000 as announced on 7 December 2017 and 2
January 2018 respectively. €200,000 as first announced on 3 October 2018.
All other terms and conditions of the Loans remain unchanged.
Other Borrowings
In March 2018, the Company agreed with a lender to settle €250,000 of a loan
by issuing 22,321,429 new ordinary shares of 0.25 pence at a price of 1.00
pence per share.
20. Financial instruments
The Group’s financial instruments comprise cash, investments at fair value
through profit or loss, trade receivables, trade payables that arise from its
operations and borrowings. The main purpose of these financial instruments is
to provide finance for the Group’s future investments and day to day
operational needs.
The Group does not enter into any derivative transactions such as interest
rate swaps or forward foreign exchange contracts, as the Group’s exposure to
movements in foreign exchange rates is not considered significant (see Foreign
currency risk management). The main risks faced by the Group are limited to
interest rate risk on surplus cash deposits and liquidity risk associated with
raising sufficient funding to meet the operational needs of the business.
The Board reviews and agrees policies for managing these risks and they are
summarised below.
FINANCIAL ASSETS BY CATEGORY
The categories of financial assets included in the statement of financial
position and the headings in which they are included are as follows:
2019 2018
€'000 (restated) €'000
Financial assets:
Financial assets held at fair value through other comprehensive income 1,117 923
Loans and receivables 6,603 7,485
Cash and cash equivalents 1 267
7,721 8,675
FINANCIAL LIABILITIES BY CATEGORY
The categories of financial liabilities included in the statement of financial
position and the headings in which they are included are as follows:
2019 2018
€'000 (restated) €'000
Financial liabilities at amortised cost:
Trade and other payables 396 509
Borrowings 8,428 7,941
8,824 8,450
Financial instruments measured at fair value:
Level 1 Level 2 Level 3
€’000 €’000 €’000
As at 31 December 2019
Investments at fair value through profit or loss - - 1,117
- - 1,117
As at 31 December 2018
Investments at fair value through profit or loss - - 923
- - 923
The Group has adopted fair value measurements using the IFRS 7 fair value
hierarchy.
Categorisation within the hierarchy has been determined on the basis of the
lowest level of input that is significant to the fair value measurement of the
relevant 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 inputs other than quoted prices included in Level 1;
Level 3: valued by reference to valuation techniques using
inputs that are not based on observable markets criteria.
The Level 3 investment refers to an investment in GeoSim Systems Ltd, PBV
Monitor Srl, and ForCrowd Srl.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be
able to continue as going concerns while maximising the return to stakeholders
through optimisation of the debt and equity balance. The capital structure of
the Group consists of debt attributable to convertible bondholders,
borrowings, cash and cash equivalents, and equity attributable to equity
holders of the Group, comprising issued capital, reserves and retained
earnings, all as disclosed in the Statement of Financial Position.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including
the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument disclosed in Note 2 to the
financial statements.
Financial risk management objectives
The Company is exposed to a variety of financial risks which result from both
its operating and investing activities. The Group’s risk management is
coordinated by the board of directors and focuses on actively securing the
Company’s short- and medium-term cash flows by raising liquid capital to
meet current liability obligations.
Market price risk
The Company’s exposure to market price risk mainly arises from movements in
the fair value of its investments held for trading. The Group manages the
investment price risk within its long-term investment strategy to manage a
diversified exposure to the market. If the investments were to experience a
rise or fall of 15% in their fair value, this would result in the Group’s
net asset value and statement of comprehensive income increasing or decreasing
by €167,000 (2018: €138,000).
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which monitors the Group’s short, medium and long-term funding
and liquidity management requirements on an appropriate basis. The Group has
minimal cash balances at the reporting date (refer to Note 2 – Basis of
preparation and going concern). The Group continues to secure future funding
and cash resources from disposals as and when required in order to meet its
cash requirements. This is an on-going process and the directors are confident
with their cash flow models.
The following are the undiscounted contractual maturities of financial
liabilities:
Carrying Amount Less than 1 year Between 1 and 5 years Total
€’000 €’000 €’000 €’000
As at 31 December 2019
Trade and other payables 396 396 - 396
Borrowings 8,428 3,750 4,678 8,428
8,824 4,146 4,678 8,428
As at 31 December 2018
Trade and other payables 509 509 - 509
Borrowings 7,941 343 7,598 7,941
8,450 852 7,598 8,450
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 from operations will be adequate to support these financial
liabilities.
Interest rate risk
The Group and Company manage the interest rate risk associated with the Group
cash assets by ensuring that interest rates are as favourable as possible,
whilst managing the access the Group requires to the funds for working capital
purposes.
The Group’s cash and cash equivalents are subject to interest rate exposure
due to changes in interest rates. Short-term receivables and payables are not
exposed to interest rate risk. The borrowings are at fixed interest rates.
Group Company
2019 2018 (restated) 2019 2018 (restated)
€’000 €’000 €’000 €’000
Fixed rate instruments
Financial assets 7,721 8,675 2,014 2,003
Financial liabilities 8,428 7,941 8,428 7,941
Change in interest rates will affect the Group’s income statement as
follows:
Gain / (loss)
Group 2019 2018
€’000 €’000
Euribor +0.5% / -0.5% - / - -/-
The analysis was applied to financial liabilities based on the assumption that
the amount of liability outstanding as at the reporting date was outstanding
for the whole year.
Foreign currency risk management
The Group undertakes certain transactions denominated in currencies other than
Euro, hence exposures to exchange rate fluctuations arise. Amounts due to
fulfil contractual obligations of £Nil (2018: £Nil) are denominated in
sterling. An adverse movement in the exchange rate will impact the ultimate
amount payable, a 10% increase or decrease in the rate would result in a
profit or loss of £Nil (2018: £Nil). The Group’s functional and
presentational currency is the Euro as it is the currency of its main trading
environment, and most of the Group’s assets and liabilities are denominated
in Euro. The parent company is located in the sterling area.
Credit risk management
The Group’s financial instruments, which are subject to credit risk, are
considered to be trade and other receivables. There is a risk that the amount
to be received becomes impaired. The Group’s maximum exposure to credit risk
is €6,604,000 (2018: €7,485,000) comprising receivables during the period.
About 67% (2018: 59%) of total receivables are due from a single company. The
ageing profile of trade receivables was:
2019 2018 (restated)
Total book value Allowance for impairment Total book value Allowance for impairment
Group €’000 €’000 €’000 €’000
Current 6,604 - 7,485 -
Overdue more than one year - - - -
6,604 - 7,485 -
Company
Current 1,493 - 1,396 -
Overdue more than one year - - - -
1,493 - 1,396 -
21. Share capital and share premium
ISSUED AND FULLY PAID: Number of ordinary shares Number of deferred shares Ordinary share capital €’000 Deferred share capital €’000 Share premium €’000 Total €’000
At 1 January 2018 310,291,286 199,409,377 946 5,467 43,563 49,976
Issue of shares 58,333,334 - 162 - 226 388
Settlement of other borrowings 22,321,429 - 62 - 186 248
Issue of shares 42,857,143 - 119 - 214 333
Issue of shares 63,157,890 - 175 - 490 665
Issue of shares 8,263,250 - 23 - 79 102
Issue of shares 7,868,130 - 22 - 75 97
Conversion of loan note to shares 1,625,000 - 4 - 68 72
Conversion of loan note to shares 50,992,826 - 141 - 1,985 2,126
Issue of shares 35,365,389 - 98 - 211 309
Issue of shares 3,076,923 - 8 - 25 33
Share issue costs - - - - (84) (84)
At 31 December 2018 604,152,600 199,409,377 1,760 5,467 47,038 54,265
Issue of shares 4,000,000 - 12 - 23 35
Issue of shares 54,218,847 - 158 63 221
At 31 December 2019 662,371,447 199,409,377 1,930 5,467 47,124 54,521
The deferred shares have restricted rights such that they have no economic
value.
Shares issued for the year ended 31 December 2019:
On 29 August 2019, 4,000,000 new ordinary shares of 0.25 pence per share were
issued to F Gardin, in settlement of part of his 2018 remuneration.
On 3 October 2019, the Company issued 54,218,847 new ordinary shares of 0.25p
as consideration for the acquisition of 20% interest in ForCrowd Srl, an
Italian equity crowdfunding platform based in Milan.
Shares issued for the year ended 31 December 2018:
On 26 January 2018, the Company raised a total of £350,000 (€388,000) gross
of expenses through a placing of 58,333,334 new ordinary shares of 0.25 pence
at a price of 0.60 pence per share.
In March 2018, the Company agreed with a lender to settle €250,000 of a loan
by issuing 22,321,429 new ordinary shares of 0.25 pence at a price of 1.00
pence per share.
On 16 March 2018, the Company raised a total of £300,000 (€333,000) gross
of expenses through a placing of 42,857,143 new ordinary shares of 0.25 pence
at a price of 0.70 pence per share.
On 23 May 2018, the Company raised a total of £600,000 (€665,000) gross of
expenses through a placing of 63,157,890 new ordinary shares of 0.25 pence at
a price of 0.95 pence per share.
On 30 May 2018, the Company agreed with a lender to settle a balance of
£91,722 (€102,000) of accrued interest on a loan by issuing 8,263,250 new
ordinary shares of 0.25 pence at a price of 1.11 pence per share.
On 30 May 2018, the Company issued 7,868,130 new ordinary shares of 0.25 pence
amounting to €100,000 to its Joint Venture Partner in Miner One Limited at a
price of 1.11 pence per share.
On 5 October 2018, the Company issued 1,625,000 new ordinary shares on
conversion by two bondholders of the 2010 7% Bonds (“Bonds”) with a face
value of £65,000 (€72,000) at a price of 4.00 pence per share.
On 28 December 2018, convertible bonds with a face value of €2,100,000 plus
accrued interest were converted into 50,992,826 new ordinary shares at a price
of 3.76 pence per share.
On 28 December 2018, the Company issued 35,365,389 new ordinary shares as
consideration of £278,750 (€309,000) to acquire a 10% interest in PBV
Monitor Srl at a price of 0.788 pence per share.
On 31 December 2018, the Company allotted 3,076,923 new ordinary shares of
0.25 pence, £30,000 (€33,000) to Francesco Gardin in settlement of his 2017
remuneration package at a price of 0.975 pence per share.
Within the year ended 31 December 2018, invoices with a cumulative value of
€127,000 were settled by the issue of new ordinary shares of 0.25 pence at
an average price of 0.740 pence per share. €84,000 related directly to
expenses incurred during the issue of new share capital.
22. Share based payments
Equity settled share option scheme
The Company operates share-based payment arrangements to remunerate directors
and key employees in the form of a share option scheme. Equity-settled
share-based payments are measured at fair value (excluding the effect of
non-market based vesting conditions) at the date of grant. The fair value
determined at the grant date of the equity-settled share-based payments is
expensed on a straight-line basis over the vesting period, based on the
Company’s estimate of shares that will eventually vest and adjusted for the
effect of non-market based vesting conditions.
On 31 July 2015, Francesco Gardin and Reginald Eccles were granted options to
subscribe for 10,000,000 and 3,000,000 new ordinary shares in the Company at
an exercise price of 1.25 pence per share. The options are exercisable for a
period of five years from the date of grant.
The significant inputs to the model in respect of the options granted in 2015
were as follows:
Grant date share price 0.74 pence
Exercise share price 1.25 pence
No. of share options 13,000,000
Risk free rate 1.5%
Expected volatility 50%
Option life 5 years
Calculated fair value per share 0.2 pence
The total share-based payment expense recognised in the income statement for
the year ended 31 December 2019 in respect of the share options granted was
€Nil (2018: €Nil).
Number of options at 1 Jan 2019 Granted in the year Exercised in the year Exercised in the year Number of options at 31 Dec 2019 Exercise Price, pence Expiry date
10,000,000 - - - 10,000,000 1.25 31.07.2020
3,000,000 - - - 3,000,000 1.25 31.07.2020
13,000,000 - - - 13,000,000
Number of options at 1 Jan 2018 Granted in the year Exercised in the year Cancelled in the year Number of options at 31 Dec 2018 Exercise Price, pence Expiry date
10,000,000 - - - 10,000,000 1.25 31.07.2020
3,000,000 - - - 3,000,000 1.25 31.07.2020
13,000,000 - - - 13,000,000
The remaining contractual life at 31 December 2019 is 0.5 years (31 December
2018 – 1.5 years).
23. Other reserves
The Group considers its capital to comprise ordinary share capital, share
premium, retained losses and its convertible bonds. In managing its capital,
the Group’s primary objective is to maintain a sufficient funding base to
enable the Group to meet its working capital and strategic investment needs.
In making decisions to adjust its capital structure to achieve these aims,
through new share issues, the Group considers not only their short-term
position but also their long-term operational and strategic objectives.
Group Merger reserve €’000 Loan note equity reserve €’000 Share option reserve €’000 Total other reserves €’000
At 1 January 2018 8,325 1,736 51 10,112
Prior period adjustment - (1,693) - (1,693)
At 1 January 2018 (Restated) 8,325 43 51 8,419
Transfer of reserves - (43) - (43)
At 31 December 2018 and 31 December 2019 8,325 - 51 8,376
Company Loan note equity reserve €’000 Share option reserve €’000 Total other reserves €’000
At 1 January 2018 1,736 51 1,787
Prior period adjustment (1,693) - (1,693)
At 1 January 2018 (Restated) 43 51 94
Transfer of reserves (43) - (43)
At 31 December 2018 and 31 December 2019 - 51 51
24. Ultimate controlling party
The Group considers that there is no ultimate controlling party.
25. Related party transactions
Transactions between the company and its subsidiaries, which are related
parties have been eliminated on consolidation, but are disclosed where they
relate to the parent company. These transactions along with transactions
between the company and its investment holdings are disclosed in the table
below, with all amounts being presented in Euros and being owed to the Group:
2019 2018 2019 2018
Related party Group Group Company Company
Clear Leisure 2017 Limited - - 951,243 871,255
Sipiem S.P.A 340,017 174,720 340,017 174,720
Sosushi Company Srl 107,402 107,402 107,402 107,402
PBV Monitor Srl 5,000 - 5,000 -
Geosim Systems Limited 44,671 - 44,671 -
64-Bit Limited (JV partner) - 200,000 - 200,000
497,091 482,122 1,448,334 1,353,377
On 29 August 2019, 4,000,000 new ordinary shares of 0.25 pence per share were
issued to F Gardin at a price of 0.75 pence per share, in settlement of part
of his 2018 remuneration.
During the year, Metals Analysis Limited, a company in which R Eccles is a
Director, charged Clear Leisure Plc €49,833 (2018: €6,000) for consultancy
fees. The amount owed from Metals Analysis Limited at year end is €14,631
(2018: €3,964 owed to).
The shareholder loan as disclosed in Note 19 ‘Borrowings’ is a loan
provided by Eufingest which has a 13.03% shareholding also has an outstanding
loan for €3,750,000.
Included in trade and other payables is an amount of €14,427 owed to Mr F
Gardin, Director.
Remuneration of key management personnel
The remuneration of the directors, who are the key personnel of the group, is
included in the Directors Report. Under “IAS 24: Related party
disclosures”, all their remuneration is in relation to short-term employee
benefits.
26. Events after the reporting date
On 18 February 2020, the Company entered into a new unsecured loan facility
agreement with Eufingest SA, for a further €150,000 at an interest rate of
2,5% per annum repayable on 30 June 2020.
Following the receipt of the first Mediapolis tranche, Clear Leisure repaid to
Eufingest the principal amount of €550,000 plus interest accrued on such
loans of €11,157. In addition, on 5 October 2020, the Eufingest loans,
totaling €3,375,000 and £30,000 had their repayment date extended to 31
October 2020.
The subsidiaries operations have been strongly impacted by the COVID pandemic,
delaying the launch of new projects and slowing the expected revenue stream.
Clear Leisure has been supportive with its portfolio companies, assisting as
much possible in this difficult period. Unfortunately, the progress of the
claims has been delayed (especially in Italy) due to the Courts being closed
during the national Lockdown.
In this context, the Company engaged Sapphire Capital Partners LLP, an FCA
registered entity, to act as the Investment Manager in a proposed Enterprise
Investment Scheme Fund (“EIS” fund) launched together with Clear Leisure,
acting as Investment Manager. The fund will seek to invest in companies which
focus on the integration of biological and digital systems.
On 1 October 2020, the Company’s shares were temporarily suspended from
trading after announcing that the Company was unable to publish its audited
annual report and accounts for the year ended 31 December 2019 due to the
Accounting and Audit work in respect of the these items remaining ongoing.
This delay was caused by historic issues in the accounting of transactions in
different foreign currencies alongside the valuation of key assets and
liabilities. These have now been resolved, and as outlined in Note 27, the
financial statements have been restated to reflect these changes.
27. Prior year adjustment
The comparative figures for the year ended 31 December 2018 have been restated
as set out in the tables below:
Restated Group Income and Statement of Comprehensive Income for the year ended
31 December 2018
2018 Restatement 2018
Ref. €’000 €’000 Restated €’000
Continuing operations
Revenue 12 - 12
12 - 12
Administration expenses 1 (3,878) 56 (3,822)
Exceptional items 2,3 - 366 366
Operating loss (3,866) 422 (3,444)
Other gains and (losses) 3 (150) 150 -
Exceptional items 2 1,300 (1,300) -
Finance income - - -
Finance charges 3 (1,223) 927 (296)
Loss before tax (3,939) 199 (3,740)
Tax - -
Loss from continuing operations (3,939) 199 (3,740)
Other comprehensive (loss)
Loss on translation of overseas subsidiaries 1 (392) 392 -
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (4,331) 591 (3,740)
Earnings per share:
Basic and fully diluted loss per share (cents) (€0.008) - (€0.008)
Restated Group Statement of Financial Position as at 31 December 2018
Ref. Group 2018 €’000 Restatement 2018 €’000 Group 2018 (restated) €’000
Non-current assets
Investments 4,5 447 476 923
Total non-current assets 447 476 923
Current assets
Investments 4 1,118 (1,118) -
Trade and other receivables 4,5 7,003 482 7,485
Cash and cash equivalents 267 - 267
Total current assets 8,388 (636) 7,752
Total assets 8,835 (160) 8,675
Current liabilities
Trade and other payables 1 (507) (2) (509)
Borrowings (343) - (343)
Total current liabilities (850) (2) (852)
Net current assets/(liabilities) 7,538 (638) 6,900
Total assets less current liabilities 7,985 (162) 7,823
Non-current liabilities
Borrowings 6 (6,042) (1,556) (7,598)
Total non-current liabilities (6,042) (1,556) (7,598)
Total liabilities (6,891) (1,559) (8,450)
Net assets 1,943 (1,718) 225
Equity
Share capital 7,227 - 7,227
Share premium account 47,038 - 47,038
Other reserves 1,6 10,504 (2,128) 8,376
Retained losses 1 (62,826) 410 (62,416)
Total equity 1,943 (1,718) 225
Restated Company Statement of Financial Position as at 31 December 2018
Ref. Company 2018 €’000 Restatement 2018 €’000 Company 2018 (restated) €’000
Non-current assets
Investments 7 9,667 (9,327) 340
Total non-current assets 9,667 (9,327) 340
Current assets
Investments 4 535 (535) -
Trade and other receivables 4,5 99 1,297 1,396
Cash and cash equivalents 267 - 267
Total current assets 901 762 1,663
Total assets 10,568 (8,565) 2,003
Current liabilities
Trade and other payables 1 (251) (4) (255)
Borrowings (343) - (343)
Total current liabilities (594) (4) (598)
Net current assets/(liabilities) 307 758 1,065
Total assets less current liabilities 9,974 (8,569) 1,405
Non-current liabilities
Borrowings 6 (6,042) (1,556) (7,598)
Total non-current liabilities (6,042) (1,556) (7,598)
Total liabilities (6,636) (1,560) (8,196)
Net (liabilities)/assets 3,932 (10,125) (6,193)
Equity
Share capital 7,227 - 7,227
Share premium account 47,038 - 47,038
Other reserves 6 1,861 (1,810) 51
Retained losses 7 (52,194) (8,315) (60,509)
Total equity 3,932 (10,125) (6,193)
Restated Group Statement of Cash Flows for the year ended 31 December 2018
Group 2018 €’000 Restatement 2018 €’000 Group 2018 (restated) €’000
Cash used in operations
Loss before tax (3,939) 199 (3,740)
Other gains and losses 335 (335) -
Finance charges 1,223 (927) 296
Decrease /(increase) in receivables 2,030 137 2,167
(Decrease) /increase in payables (209) 35 (174)
Net cash outflow from operating activities (560) (891) (1,451)
Cash flows from investing activities
Increase in loan to subsidiary undertakings (145) 165 20
Interest paid (290) 290 -
Purchase of investments (95) 95 -
Net cash outflow from investing activities (530) 550 20
Cash flows from financing activities
Proceeds of issue of shares 1,357 (54) 1,303
Proceeds from borrowing - 407 407
Interest paid - (12) (12)
Net cash inflow from financing activities 1,357 341 1,698
Net (decrease)/increase in cash for the year 267 - 267
Cash and cash equivalents at beginning of year - - -
Cash and cash equivalents at end of year 267 - 267
Restated Company Statement of Cash Flows for the year ended 31 December 2018
Company 2018 €’000 Restatement 2018 €’000 Company 2018 (restated) €’000
Cash used in operations
Loss before tax (1,921) (8,526) (10,447)
Other gains and losses 42 8,529 8,571
Finance charges 284 7 291
Decrease /(increase) in receivables 355 215 570
(Decrease) /increase in payables (460) 39 (421)
Net cash outflow from operating activities (1,700) 264 (1,436)
Cash flows from investing activities
Increase in loan to subsidiary undertakings 352 (352) -
Interest paid (284) 284 -
Purchase of investments (504) 504 -
Net cash outflow from investing activities (436) 436 -
Cash flows from financing activities
Proceeds of issue of shares 2,403 (1,100) 1,303
Proceeds from borrowing - 407 407
Interest paid - (7) (7)
Net cash inflow from financing activities 2,403 (700) 1,703
Net (decrease)/increase in cash for the year 267 - 267
Cash and cash equivalents at beginning of year - - -
Cash and cash equivalents at end of year 267 - 267
Notes to prior year restatement tables
Group
1.
In the previous year adjustments were incorrectly made translating balances
into the functional and presentational currency of the Group, when the
underlying balances were already denominated in Euros. An adjustment has
been made to eliminate these incorrect foreign currency translations by making
an adjustment to the foreign currency reserve and other comprehensive income
of €392,000.An adjustment of €43,000 has also been made between the loan
note equity reserve and retained earnings.In addition, €56,000 of
adjustments have been made to the Income Statement for the impairment of other
receivables and foreign exchange translation differences alongside changes to
the corresponding balances in the Statement of Financial Position.
2.
Exceptional items disclosed after operating loss of €1,300,000 have been
reclassified to exceptional items before operating losses.
3.
Finance charges have been restated by €6,000 with €934,000 related to a
loss on syndicated loans from Mediapolis being reclassified to “Exceptional
items” before operating losses. €150,000 of Other gains and losses has
been reclassified to Administrative Expenses.
4.
Current asset investments totaling €1,118,000 have been reclassified with
€923,000 going to Non-current asset investments and £195,000 going to Trade
and Other Receivables as this more accurately reflects the underlying
substance of the financial instrument.
5.
Following a reclassification of €354,000 from Non-Current Asset Investments
to Trade and Other Receivables, a restatement to reduce this balance by
€24,000 due to foreign exchange translation errors and an impairment of
€48,000, resulting in a balance of €282,000 being recognised in trade and
other receivables as well as the €195,000 per note 4 above which was
increased by €5,000 due to a fair value adjustment.
6.
Eufingest loan balance was increased by €1,556,000 after reclassifying the
equity component of loan from other reserves as the accounting treatment
previously adopted has now been assessed as being incorrect.
Company
7.
€9,667,000 has been reclassified from Investments to Trade and Other
Receivables.Of the balance transferred, €8,956,000 has been impaired
primarily relating to a balance within a subsidiary company which was
considered to be not recoverable.Trade and Other Receivables has also been
increased by €386,000 to correct a translation to the Company’s
presentational currency.A further amount of €200,000 has been reclassified
from Current Asset Investments to Trade and Other Receivables as stated in
note 5 above.
8.
Following the various adjustments and reclassifications noted above, the
Statement of Cash Flows for the Group and the Company have been recalculated.
-ends-
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