REG-Clear Leisure Plc: Final Results for year ended 31 Dec 2013 <Origin Href="QuoteRef">CLPC.L</Origin> - Part 2
15/12/2014 17:31
- Part 2: For the preceding part double click ID:nPRrF31E8a
properties (as permitted by IFRS 1),
and for certain available for sale investments that are stated at their fair
values and land and buildings that have been revalued to their 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.
Going Concern
Any consideration of the forseeable future involves making a judgment, at a
particular point in time, about future events which are inherently uncertain.
The ability of the Group to carry out its planned business objectives is
dependent on its continuing ability to raise adequate financing from equity
investors and/or the achievement of profitable operations.
Nevertheless, at the time of approving these financial statements and after
making due enquiries, the Directors have a reasonable expectation that the
Group has adequate resources to continue operating for the forseeable future.
For this reason they continue to adopt the going concern basis of preparing the
Group's financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Group 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.
Non-controlling interests in subsidiaries are identified separately from the
Group's equity therein. Those interests of non-controlling shareholders that
are present ownership interests entitling their holders to a proportionate
share of net assets upon liquidation may initially be measured at fair value or
at the non-controlling interests' proportionate share of the fair value of the
acquiree's identifiable net assets. The choice of measurement is made on an
acquisition-by-acquisition basis. Other non-controlling interests are initially
measured at fair value. Subsequent to acquisition, the carrying amount of
non-controlling interests is the amount of those interests at initial
recognition plus the non-controlling interests' share of subsequent changes in
equity. Total comprehensive income is attributed to non-controlling interests
even if this results in the non-controlling interests having a deficit balance.
Changes in the Group's interests in subsidiaries that do not result in a loss
of control are accounted for as equity transactions. The carrying amount of the
Group's interests and the non-controlling interests are adjusted to reflect the
changes in their relative interests in the subsidiaries. Any difference between
the amount by which the non-controlling interests are adjusted and the fair
value of the consideration paid or received is recognised directly in equity
and attributed to the owners of the Group.
When the Group loses control of a subsidiary, the profit or loss on disposal is
calculated as the difference between (i) the aggregate of the fair value of the
consideration received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), less liabilities
of the subsidiary and any non-controlling interests. Amounts previously
recognised in other comprehensive income in relation to the subsidiary are
accounted for (i.e. reclassified to profit or loss or transferred directly to
retained earnings) in the same manner as would be required if the relevant
assets or liabilities are disposed of. The fair value of any investment
retained in the former subsidiary at the date when control is lost is regarded
as the fair value on initial recognition for subsequent accounting under lAS 39
Financial Instruments: Recognition and Measurement or, when applicable, the
costs on initial recognition of an investment in an associate or jointly
controlled entity.
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 lAS 12 Income Taxes and lAS 19 Employee Benefits respectively;
* liabilities or equity instruments related to the replacement by the Group
of an acquiree's share-based payment awards are measured in accordance with
IFRS 2 Share-based Payment, and
* assets (or disposal groups) that are classified as held for sale in
accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations are measured in accordance with that Standard.
If the initial accounting for a business combination is incomplete by the 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.
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
Impairment of goodwill
Goodwill has a carrying value of €9,000 (2012: €6,652,000). The Group tests
annually whether goodwill has suffered any impairment, in accordance with the
accounting policy stated in Note 2. The recoverable amounts of cash-generating
units have been determined based on value-in-use calculations.
Management has concluded that an impairment charge to the carrying value of
goodwill of €1,303,000 was necessary during the year. See Note 15 to the
Financial Statements.
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.
Going Concern
The Group's activities generated a loss from continuing operations of €
7,359,000 (2012: €2,491,000) and had net current liabilities of €16,330,000 as
at 31 December 2013. In addition the Company's shares are currently suspended
on the AIM Market. The Group's operational existence is still dependant 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.
4. Segment information
IFRS 8 requires reporting segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief
operating decision maker.
Information reported to the Group's chief operating decision maker for the
purposes of resource allocation and assessment of segment performance is
specifically focused on the geographical segments within the Group.
Information regarding the Group's reportable segments is presented below:
2013 2012
UK Italy Total UK Italy Total
Continuing operations €'000 €'000 €'000 €'000 €'000 €'000
Revenue - 1,291 1,291 - 1,499 1,499
Cost of sales - (515) (515) - (253) (253)
Gross Profit 776 776 - 1,246 1,246
Gain on disposal of - - - 1,367 1,877 3,244
investment
Finance Income - - - - 8 8
Finance charges (311) (133) (468) (337) (350) (687)
Other operating expenses (1,506) (803) (2,285) (817) (745) (1,562)
Other gains and losses - (5,342) (5,342) - (4,693) (4,693)
Loss for the financial (1,817) (5,502) (7,319) 213 (2,657) (2,444)
year
2013 2012
Segment Segment Net Net assets/ Segment Segment Net Net assets/
assets liabilities additions (liabilities) assets liabilities Additions (liabilities)
to to
non-current non-current
Assets assets
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
UK 60 (7,458) - (7,398) 15 (7,896) - (7,881)
Italy 50,502 (18,929) - 31,573 72,881 (33,537) 8,103 47,447
50,562 (26,387) - 24,175 72,896 (41,433) 8,103 39,566
5. Earnings per share
The basic earnings per share is calculated by dividing the loss attributable 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:
2013 2012
Per Per
Loss Weighted share Loss Weighted share
€'000 average no. Amount €'000 average no. Amount
of shares Euro of shares Euro
000's 000's
Basic and fully
diluted earnings per
share
Continuing (7,359) 197,564 (€0.04) (2,491) 92,327 (€0.02)
operations
Discontinued (7,358) 197,564 (€0.04) 105 92,327 -
operations
Total operations (14,717) 197,564 (€0.08) (2,386) 92,237 (€0.02)
IAS 33 requires presentation of diluted earnings per share when a company could
be called upon to issue shares that would decrease earnings per share. In
respect of 2012 and 2013 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.
6. Share capital and share premium
ISSUED AND FULLY PAID: Number of Ordinary Share Total
ordinary share premium
shares capital
€'000 €'000 €'000
At 1 January 2012 45,847,710 1,370 31,749 33,119
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