QUEENCO LEISURE INTERNATIONAL LTD - Half-yearly Report

29 August 2013Queenco Leisure International Ltd.迷你倉價錢(The "Company" or "QLI", and together with its subsidiaries,associated companies and joint ventures, the "Group"),Financial Results for the 6 months ended 30 June 2013Queenco Leisure International Ltd., the emerging markets developerand operator of casinos and entertainment centers, is pleased to report itsfinancial results for the 6 months ended 30 June 2013.Operating and Business Highlights- The Group's activities are adversely affected by the globaleconomic crisis in general and the economic crisis in Greece in particular. Asa result the Company was not able to meet its original repayment schedules ofloans and credits received from (Y.Z.) Queenco Ltd. (the Company's parentcorporation, "Y.Z.") and from a previous shareholder in one of the Company'ssubsidiaries. So far, the Company has succeeded in reaching understandingswith Y.Z and the abovementioned previous shareholder regarding a reschedulingof the repayment schedules such that they will coincide with the Company'spayment abilities. Company's management is of the opinion that the Companywill succeed in the future, if needed, in rescheduling the repayment schedulesof loans from both Y.Z. and the previous shareholder. The Group is continuingin the implementation of its cost savings plans and is in the process ofexpanding their scope, mainly in Rhodes, due to the decrease in revenuescaused by the economic situation. The Group is also in a process ofrealization of excess assets. The Company's ability to meet all itsobligations in the foreseeable future is highly dependent on the Company'sability to successfully execute the above mentioned plans. The aforesaid raisesubstantial doubt about the Company's ability to continue as a going concern.- The Greek economic crisis has been prolonged although a newgovernment was elected in September 2012:* The uncertainty further exacerbates the gaming results at Loutraki and Rodos.* A lower minimum wage and renegotiation of employees' collective benefit agreements, may contribute to the Group's cost reduction scheme.- Due to the continued decline of Casino Loutraki and otherinformation provided to the Company in this regard, the Company has conductedan additional impairment test concerning this project, as more fully describedin Note 1 to our financial statements. As a result, the Company wrote animpairment loss of 12.8 million under "impairment of investment in anassociated company" for the six and three months ended 30 June 2013.- For developments regarding Casino Rodos' pending Greek corporatetax litigation, please see Note 1 to our quarterly financial statementsattached herewith.- On 12 August 2013 the Company completed a rights issue of itsordinary shares ("New Shares") , of which a portion were offered in the formof GDRs. The completion of the rights issue resulted in the subscription of488,408,824 New Shares par value NIS 1.00 each, of which 119,577,600 arerepresented by GDRs (including through an over-subscription mechanism asdetailed in the Rights Issue Memorandum) for a total consideration ofapproximately EUR5.9 million (including approximately EUR4.4 million received fromthe Company's controlling shareholders).Following the rights issue, the issued share capital of the Companyis comprised of 1,098,919,854 ordinary shares with a nominal value of NIS 1.00each.Upon completion of the rights issue, YZ and its wholly ownedsubsidiary, which held prior to the completion of the rights issueapproximately 67% of the Company's issued share capital, transferred theentire amount of New Shares purchased by them in the rights issue to A.S.Y.VHotels Ltd. ("A.S.Y.V"), an Israeli corporation. Consequently, A.S.Y.V nowholds approximately 33.5% of the issued and outstanding share capital of theCompany; and Y.Z. and its wholly owned subsidiary, together with anothercorporation controlled by Yigal Zilkha (one of the controlling persons ofY.Z.), now hold approximately 42.4% of the issued and outstanding sharecapital of the Company, and received from A.S.Y.V an irrevocable power ofattorney, valid for a period of 3 months, to vote such number of ordinaryshares of the Company that shall equal 4% of the issued and outstanding sharecapital of the Company following the rights issue.- The Group decided to strategically move away from Europe, towardsSouth East Asia where the opportunities remain more lucrative.- The Group's strategy to diverse revenue mix is progressing:- Queenco Casino in Sihanoukville, Cambodia soft launched during2012, giving us a strong platform for the future.- Exploring online gaming in areas where the Group already operatescontinues to progress well.- Developments in future South East Asia projects form part of ourlong term strategy.- The Company adopted IFRS 11, which removes the option to accountfor jointly controlled entities (JCEs) using Proportionate consolidation.Instead, JCEs that meet the definition of a joint venture under IFRS 11 mustbe accounted for using the equity method. The application of this new standardimpacted the financial position of the Group by replacing proportionateconsolidation of the joint venture in Vasanta with the equity method ofaccounting. IFRS 11 is effective for the periods beginning on 1 January 2013.Financial Highlights for the 6 months ended 30 June 2013 (ascompared to the 6 months ended 30 June 2012)- Gross revenues were EUR10.5 million (2012: EUR11.7 million)- Net Revenues were EUR7.5 million (2012: EUR8.9 million)- EBITDA was negative EUR2.7 million (2012: negative EUR2.8 million)- Loss for the period was EUR20.4 million (2012: Profit of EUR14.9million)- Cash and cash equivalents were EUR2.4 million as of 30 June 2013Haim Assayag, Executive Chairman of QLI, commented on the results:"We have witnessed some progress in Greece, which in the long termwill hopefully allow Greece to turn a corner, but uncertainty remains as tothe manner and timeframe of Greece's recovery. This situation adverselyaffects our Greece's operations"Along with the implementation of our cost-saving plans in ourEuropean projects, we have shifter our focus to South East Asia. The openingof Queenco Casino and Hotel in Sihanoukville, Cambodia, has shown some verypromising signs and we remain excited by what we can achieve in Asia in thefuture."We have successfully completed our rights issue in August 2013 fora total consideration of approximately EUR5.9 million."I would like to thank the shareholders and GDR holders whoparticipated in our recent rights issue".Chief Executive's ReviewIntroductionThe Group decided to strategically move away from Europe towardsSouth East Asia, in order to decrease the losses we had previously incurred.The strategy to diverse revenue mix remains on course having successfully softlaunched Queenco Casino in Sihanoukville, Cambodia, among other things.Summary of financial performanceResults for the 6 months ended 30 June 2013 (as compared to the 6months ended 30 June 2012)Gross revenues were EUR10.5 million (2012: EUR11.7 million), a decreaseof 10.2% whilst net revenues decreased by 16% to EUR7.5 million (2012: EUR8.9million), a decrease of EUR1.4 million, which is mainly due to the decrease inwin per visit in the 1st half of 2013. Revenues continue to be suppressed bythe prolonged economic crisis in Greece where the Group generates 72% of itsgross revenue from Casino Rodos. The decrease in win per visit is puttingpressure on EBITDA which remains negative at EUR2.7 million (2012: negative EUR2.7million). The Company's net loss during the period amounts to EUR20.4 million(2012: Profit EUR14.9 million).Cash and cash equivalents amounted to EUR2.4 million as of June 30,2013. The Company's management is of the opinion that the Company has goodchances of executing a major portion of its plans in a timely manner.Accordingly the Company's management is of the opinion that it's existing cashand the expected inflow of cash through the successful execution of its plans,will enable the Company to meet the needed cash levels required for theGroup's operations and the payment of its obligations when due.Basic loss per share was 0.3¢ (2012: Profit (0.3¢)) and loss perGDR (each GDR representing 10 ordinary shares) were 3.2¢ (2012: Profit(3.2¢)).Operational ReviewResults by project for the 6 months ended 30 June 2013 and 2012:Casino Gross Gaming Net Revenue EBITDA Visits Gross Win per QLI's Revenue (EUR (EURm) (000's) Visit (EUR) Economic m) (EURm) Interest2013 2012 2013 2012 2013 2012 2013 2012 2013 2012Rodos 7.3 8.5 5.1 6.0 (0.9) (1.3) 66 63 110 135 91.6%Sasazu - - 2.0 2.3 (0.2) 0.2 - - - - 100%Cambodia 0.7 0.5 0.3 0.4 (0.8) (0.4) 20 7 37 73 70%Results by project for the 3 months ended 30 June 2013 and 2012:Casino Gross Gaming Net Revenue EBITDA Visits Gross Win per QLI's Revenue (EUR (EURm) (000's) Visit (EUR) Economic m) (EURm) Interest2013 2012 2013 2012 2013 2012 2013 2012 2013 2012Rodos 4.1 4.6 2.9 3.3 - (0.4) 39 35 106 129 91.6%Sasazu - - 1.0 1.2 - 0.1 - - - - 100%Cambodia 0.2 0.5 0.1 0.4 (0.4) (0.4) 16 7 35 52 70%Casino RodosResults for the 6 months ended 30 June 2013 (as compared to the 6months ended 30 June 2012)As would be expected, revenues at Casino Rodos, the only casinolocated on the holiday island of Rhodes, continue to be impacted by theuncertainty in the Eurozone and the pending Greek decision on their bailoutconditions. Gross gaming revenues amounted to EUR7.3 million (2012: EUR8.4million) and net revenues amounted to EUR5.1 million (2012: EUR6.0 million) mainlydue to a reduction in wins per visit which is attributed to visitors' lowerdisposable income. EBITDA generated for the 6 months was negative at EUR0.9million compared to negative EBITDA of EUR1.3 million for the previous periodlast year.SaSaZu (Prague)Results for the 6 months ended 30 June 2013 (as compared to the 6months ended 30 June 2012)During the 6 months ended 30 June 2013, the gross revenues atSaSaZu decreased by 15.6%, and amounted to EUR2.0 million (2012: EUR2.3 million)and the project presented a negative EBITDA of EUR0.2 million compared topositive EBITDA of EUR0.2 million for the previous period last year. The Grouphas planned to export the brand SaSaZu to other QLI operations, however due tothe current economic climate in Europe, the Group is re-considering its plansconcerning this project.Queenco Casino, SihanoukvilleDuring the year 2012 the Queenco Casino in Sihanoukville has gone through asoft launch and we are encouraged by the revenue generation that the Casino iscurrently creating for the Group. This further confirms our strategy to moveaway from European gaming markets and further explore the opportunities thatSouth East Asia has to offer.As previously reported the Group has decided not to enter new developments inEurope but will continue to explore online gaming opportunities in thecountries where it operates.OutlookThe Greek economy remains stagnant and opportunities in EasternEurope have also decreased since we first entered these markets, hence ourdecision to move away from European markets. We have begun to diversify ourrevenue mix in South East Asia with the opening of Queenco Casino inSihanoukville and we will continue to explore opportunities there and inonline gaming.Yigal ZilkhaChief Executive's, Queenco Leisure International Limited29 August 2013Approval of Compensation for a Director under the CompaniesRegulations (Relief for Transactions with Interested Parties), 2000 (the"Regulations")On 26 and 28 of February 2013, the Company's audit committee andboard of directors resolved that Mr. Yitchak Shwartz, who has been serving asa director of the Company without pay, shall be entitled to receive an annualand per meeting compensation equal to the minimum amounts allowed to be paidto external directors of public companies pursuant to the second and thirdadditions of the Companies Regulations (Rules regarding Compensation andExpense Reimbursement of External Directors), 2000, and in accordance with theCompany's equity level pursuant to the first addition thereof. Accordingly, asof the date hereof, Mr. Shwartz is entitled to an annual compensation of NIS37 thousands NIS (Euro 7.8 thousand) and to a per-meeting compensation of NIS2,500 (Euro 530).Mr. Shwartz's compensation was approved pursuant to Section 1a ofthe Regulations, which allows the Company to approve the compensation of adirector who is not a controlling person or its relative without the approvalof the Company's general meeting of shareholders.Please note, that pursuant to Section 1c of the Regulations, ashareholder of the Company holding at least 1% of the share capital of theCompany or of its voting rights, is entitled to object to the relief grantedunder the Regulations within 14 days from the date of this report; in whichcase, the compensation of Mr. Shwartz as approved by the Company's auditcommittee and board of directors shall be brought for the approval of theCompany's shareholders as provided under Section 273 of the Israeli CompaniesLaw, 1999.For further information about the Company please visit .queenco.com or contact:Queenco Leisure International Ltd.Yigal Zilkha, CEO T: +972 (0)3 756 6555QUEENCO LEISURE INTERNATIONAL LTDInterim condensed consolidated financial statements for the interim periods ending 30 June 2013 (Unaudited)QUEENCO LEISURE INTERNATIONAL LTDInterim condensed consolidated financial statementsPageIndependent auditors review report 1Statements of comprehensive income (loss) 2-3Statements of financial position 4-5Statements of changes in equity 6-8Cash flow statements 9Condensed notes to the interim financial statements 10-23QUEENCO LEISURE INTERNATIONAL LTDConsolidated Statements of Comprehensive Income (Loss)(In thousands of EUR)3 months 6 months ended 30 June ended 30 June Year ended 2 0 1 2 2 0 1 2 2 0 1 3 (*) 2 0 1 3 (*) 2 0 1 2 (*) unaudited unaudited unaudited unauditedRevenues 4,111 4,952 7,485 8,904 20,171Operating costsCost of revenues (3,774) (4,255) (8,248) (8,539) (17,450)Selling and marketing expenses (550) (1,149) (1,016) (1,912) (4,012)General and administrativeexpenses (1,365) (1,728) (2,543) (2,994) (4,846)Other operating expenses (1,567) (779) (1,567) (779) (709)Share of results of associatedcompany and joint ventures (17) (2,517) (11) 24,560 19,846Impairment of investment inassociated company (12,886) - (12,886) - (46,666)Operating profit (loss) (16,048) (5,476) (18,786) 19,240 (33,666)Investment income 43 51 87 95 199Finance costs (225) (466) (757) (688) (1,384)Foreign exchange gain (loss) (83) 411 (1,134) 213 62Profit (loss) before tax (16,313) (5,480) (20,590) 18,860 (34,789)Tax benefit (expense) 109 45 203 (353) (1,010)Profit (loss) from continuedoperations (16,204) (5,435) (20,387) 18,507 (35,799)Loss from discontinuedoperations - - - (3,597) (3,597)Total profit (loss) for theperiod (16,204) (5,435) (20,387) 14,910 (39,396)Other comprehensive income(loss) items to be reclassifiedto profit or loss in subsequentperiods:Transfer to profit and loss oftranslation reserve fromdisposal of subsidiary - - - 11,107 11,107Exchange differences arising ontranslation of foreignoperations (255) 786 1,004 395 (420)Share of other comprehensiveincome of associated - (344) - (774) (546)Net other comprehensive income(loss) to be reclassified toprofit or loss in subsequentperiods (255) 442 1,004 10,728 10,141Items not to be reclassified toprofit or loss in subsequentperiods:Remeasurements of net definedbenefit liability - - - - (642)Share of other comprehensiveincome of associated company - - - - (742)Net other comprehensive income(loss) not to be reclassified toprofit or loss in subsequentperiods - - - - (1,384)Net other comprehensive income(loss) (255) 442 1,004 10,728 8,757Total comprehensive income(loss) for the period (16,459) (4,993) (19,383) 25,638 (30,639)(*) Restated for retrospective implementation of IFRS 11 and IAS19RQUEENCO LEISURE INTERNATIONAL LTDConsolidated Statements of Comprehensive Income (Loss) (Cont.)(In thousands of EUR)3 months 6 months ended 30 June ended 30 June Year ended 2 0 1 2 2 0 1 2 2 0 1 3 (*) 2 0 1 3 (*) 2 0 1 2 (*) unaudited unaudited unaudited unauditedTotal profit (loss) for theperiod attributable to:Equity holders of the parent (15,990) (5,136) (19,809) 15,339 (38,712)Non-controlling interest (214) (299) (578) (429) (684) (16,204) (5,435) (20,387) 14,910 (39,396)Total comprehensive income(loss) for the periodEquity holders of the parent (16,128) (4,743) (19,426) 26,053 (30,007)Non-controlling interest (331) (250) 43 (415) (632) (16,459) (4,993) (19,383) 25,638 (30,639)Profit (loss) per share for theperiod attributable to:Profit (loss) per share fromcontinued operations (¢) - basicand diluted (2.6) (1.1) (**) (3.2) 3.9(**) (5.6)Profit (loss) per share fromdiscontinued operations (¢) -basic and diluted - - - (0.7)(**) (0.6) (2.6) (1.1) (3.2) 3.2 (6.2)(*) Restated for retrospective implementation of IFRS 11 and IAS19R(**) Restated to reflect share issuance as a result of exercise of rights in2012..QUEENCO LEISURE INTERNATIONAL LTDConsolidated statements of Financial Position(In thousands of EUR)As at 30 June 31 December 2 0 1 3 2 0 1 2 (*) 2 0 1 2 (*) Unaudited UnauditedNon-current assetsIntangible assets 2,136 2,141 2,139Property, plant and equipment 21,928 34,058 32,416Investment in an associated company and jointventures 13,784 79,069 26,652Deferred tax asset 522 1,051 392Other long term receivables 2,509 1,906 1,910Total non-current assets 40,879 118,225 63,509Current assetsInventories 284 377 310Investments - 6 2Trade and other receivables 1,116 2,067 2,256Cash and cash equivalents 2,416 2,116 2,406 3,816 4,566 4,974Non - current assets held for sale 9,111 3,078 1,478Total current assets 12,927 7,644 6,452Total assets 53,806 125,869 69,961Current liabilitiesAccounts payable 1,672 1,351 1,333Current tax liabilities 1,602 1,766 1,684Other current liabilities 10,847 7,657 8,879Bank overdraft and loans 1,011 1,009 1,010Total current liabilities 15,132 11,783 12,906Total assets less current liabilities 38,674 114,086 57,055Non-current liabilitiesLong-term bank loans 5,768 6,739 5,754Other long-term liabilities 3,934 6,841 2,918Deferred tax 24 96 96Provision for retirement benefits 776 571 732Total non-current liabilities 10,502 14,247 9,500Net assets 28,172 99,839 47,555(*) Restated for retrospective implementation of IFRS 11 and IAS19RQUEENCO LEISURE INTERNATIONAL LTDConsolidated Statements of Financial Position (Cont.)(In thousands of EUR)As at 30 June 31 December 2 0 1 3 2 0 1 2 (*) 2 0 1 2 (*) Unaudited UnauditedShareholders' equityShare capital 114,122 62,530 114,122Share premium 83,597 131,196 83,597Translation reserve 12,898 13,192 12,515Reserve for the waiver of options 2,739 2,739 2,739 by a controlling shareholderOther reserves (14,319) (14,319) (14,319)Accumulated deficit (182,783) (107,591) (162,974)Equity attributable to equity 16,254 87,747 35,680 holders of the parentNon-controlling interest 11,918 12,092 11,875Total Equity 28,172 99,839 47,555(*) Restated for retrospective implementation of IFRS 11 and IAS19RThe financial statements were approved by the board of directors andauthorised for issue on August 29, 2013. They were signed on its behalf by:Haim Asayag Yigal Zilkha Arie Haviv Executive Chairman of the Chief Executive Officer, Chief financial officer Board DirectorAugust 29, 2013Consolidated Statements of Changes in Equity(In thousands of EUR)Reserve for the waiver of share options by a Share Share Translation controlling Other Accumulated Non-controlling Total capital premium reserve shareholder reserves deficit Parent interest equityFor the six months ended30 June 2013 (unaudited)Balance as at 1 January2013 114,122 83,597 12,515 2,739 (14,319) (162,952) 35,702 11,875 47,577Effect of Changes inAccounting Policies (seenote 2) - - - - - (22) (22) - (22)Balance as at 1 January2013 restated for changesin accounting policies 114,122 83,597 12,515 2,739 (14,319) (162,974) 35,680 11,875 47,555Translation differences - - 383 - - - 383 621 1,004Net loss for the period - - - - - (19,809) (19,809) (578) (20,387)Balance as at 30 June2013 (unaudited) 114,122 83,597 12,898 2,739 (14,319) (182,783) 16,254 11,918 28,172For the six months ended30 June 2012 (unaudited)Balance as at 1 January2012 62,530 131,196 2,478 2,739 (14,080) (125,037) 59,826 20,227 80,053Effect of changes inAccounting Policies (seenote 2) - - - - - 2,182 2,182 (8,282) (6,100)Balance as at 1 January2012 restated for changesin accounting policies 62,530 131,196 2,478 2,739 (14,080) (122,855) 62,008 11,945 73,953Translation differences - - (393) - - - (393) 14 (379)Expense resulting fromgrant of share options - - - - - (75) (75) - (75)Share issuance tonon-controllingshareholder - - - - (239) - (239) 239 -Deem disposal of interestin a jointly controlledentity - - 7,526 - - - 7,526 - 7,526Disposal of interest in asubsidiary - - 3,581 - - - 3,581 323 3,904Net profit for the period - - - - - 15,339 15,339 (429) 14,910Balance as at 30 June2012 (unaudited) 62,530 131,196 13,192 2,739 (14,319) (107,591) 87,747 12,092 99,839Consolidated Statements of Changes in Equity (cont.)(In thousands of EUR)Reserve for the waiver of share options by a Share Share Translation controlling Other Accumulated Non-controlling Total capital premium reserve shareholder reserves deficit Parent interest equityFor the three monthsended 30 June 2013(unaudited)Balance as at 1 April2013 (unaudited) 114,122 83,597 13,036 2,739 (14,319) (166,793) 32,382 12,249 44,631Translation differences - - (138) - - - (138) (117) (255)Net loss for the period - - - - - (15,990) (15,990) (214) (16,204)Balance as at 30 June2013 (unaudited) 114,122 83,597 12,898 2,739 (14,319) (182,783) 16,254 11,918 28,172For the three monthsended 30 June 2012(unaudited)Balance as at 1 April2012 (unaudited) 62,530 131,196 12,799 2,739 (14,080) (102,455) 92,729 12,103 104,832Translation differences - - 393 - - - 393 49 442Share issuance tonon-controllingshareholder - - - - (239) - (239) 239 -Net loss for the period - - - - - (5,136) (5,136) (299) (5,435)Balance as at 30 June2012 (unaudited) 62,530 131,196 13,192 2,739 (14,319) (107,591) 87,747 12,092 99,839Consolidated Statements of Changes in Equity (Cont.)(In thousands of EUR)Reserve for the waiver of options by a Share Share Translation controlling Other Accumulated Non-controlling Total Capital Premium reserve shareholder reserves deficit Parent interest EquityBalance as at 1 January2012 62,530 131,196 2,478 2,739 (14,080) (125,037) 59,826 20,227 80,053Effect of Changes inAccounting Policies (seenote 2) - - - - - 2,182 2,182 (8,282) (6,100)Balance as at 1 January2012 restated forchanges in accountingpolicies 62,530 131,196 2,478 2,739 (14,080) (122,855) 62,008 11,945 73,953Share issuance 51,592 (47,599) - - - - 3,993 - 3,993Translation differences - - (1,070) - - - (1,070) 104 (966)Share issuance to a - - 239non-controlling interestshareholder - - - - (239) - (239) - -Deem disposal ofinterest in a jointlycontrolled entity - - 7,526 - - 7,526 7,526Disposal of interest ina subsidiary - - 3,581 - - - 3,581 323 3,904Expenses resulting fromgrant of share options - - - - - (75) (75) - (75)Remeasurements of netdefined benefitliability - - - - - (1,332) (1,332) (52) (1,384)Net loss for the year - - - - - (38,712) (38,712) (684) (39,396)Balance as at 31December 2012 114,122 83,597 12,515 2,739 (14,319) (162,974) 35,680 11,875 47,555Consolidated Cash Flow Statements(In thousands of EUR)3 months 6 monthsended 30 June ended 30 June Year ended 2 0 1 2 2 0 1 2 2 0 1 3 (*) 2 0 1 3 (*) 2 0 1 2 (*) unaudited unaudited unaudited unauditedNet cash from operating activities(see Note 3) (15) (1,589) (752) (2,523) (3,260)Investing activities:Interest received - - 44 30 131Purchases of property, plant andequipment (308) (361) (322) (399) (1,071)Proceeds on sale of property, plantand equipment - 27 - 27 1,791Purchase of other intangibles - (1) - (1) (1)Realisation of trading investments - (2) - 71 75Instalments for the acquisition ofan interest in a jointly controlledentity - (80) - (405) (767)Disposal of interest in subsidiary - - - (586) (586)Net cash used in investingactivities (308) (417) (278) (1,263) (428)Financing activities:Repayments of borrowings - - - - (1,015)Receipt of long term loan 190 1,779 726 2,828 3,734Repayment of long term loan - - - - (303)Receipt of short term loan 424 - 424 - -Share issuance - - - - 1,043Net cash provided by financingactivities 614 1,779 1,150 2,828 3,459Net decrease in cash and cashequivalents 291 (227) 120 (958) (229)Effect of foreign exchange ratechanges (249) 234 (110) 96 (343)Cash and cash equivalents atbeginning of periodFrom continued operations 2,374 2,109 2,406 2,392 2,392From discontinued operations - - - 586 586 2,374 2,109 2,406 2,978 2,978Cash and cash equivalents at end ofperiod 2,416 2,116 2,416 2,116 2,406Tax paid (41) (41) (82) (82) (164)Interest paid (167) (134) (167) (221) (525)(*) Restated for retrospective implementation of IFRS 11 and IAS19RNOTE 1 - GENERAL INFORMATION1.1 Formation and equity developmentsQueenco Leisure International Ltd (the "Company" or "QLI") isengaged, through various Israeli and foreign subsidiaries, associatedcompanies and joint ventures (together with the Company, the "Group") inemerging markets development and operations of casinos and entertainmentcentres.QLI was incorporated in Israel on 9 September 2002 by Milomor Ltd.("Milomor") (an Israeli company ) and (Y.Z) Queenco Ltd. ("Queenco" or "YZ")(an Israeli public company whose shares are listed for trading in the Tel-Avivstock exchange), which held, equally, the entire issued and paid up capital ofthe Company. The Company commenced its operating activities at the end of2002. The Company's address is 11 Menachem Begin Road, Ramat Gan, Israel.On 8 July 2013, the Company's extraordinary general meeting ofshareholders resolved to increase the authorized share capital of the Companyfrom NIS 800,000,000, consisting of 800,000,000 ordinary shares, each having anominal value of NIS 1.00, to NIS 1,200,000,000 consisting of 1,200,000,000ordinary shares, each having a nominal value of NIS 1.00.On 12 August 2013 the Company completed a rights issue of itsordinary shares ("New Shares") , of which a portion were offered in the formof GDRs.The completion of the rights issue resulted in the subscription of488,408,824 New Shares par value NIS 1.00 each, of which 119,577,600 arerepresented by GDRs (including through an over-subscription mechanism asdetailed in the Rights Issue Memorandum) for a total consideration ofapproximately EUR5.9 million (including approximately EUR4.4 million received fromthe Company's controlling shareholders).Following the rights issue, the issued share capital of the Companyis comprised of 1,098,919,854 ordinary shares with a nominal value of NIS 1.00each.Upon completion of the rights issue, (Y.Z.) Queenco Ltd. ("Queenco"or "YZ") and its wholly owned subsidiary, which held prior to the completionof the rights issue approximately 67% of the Company's issued share capital,transferred the entire amount of New Shares purchased by them in the rightsissue to A.S.Y.V Hotels Ltd. ("A.S.Y.V"), an Israeli corporation.Consequently, A.S.Y.V now holds approximately 33.5% of the issued andoutstanding share capital of the Company; and Y.Z. and its wholly ownedsubsidiary, together with another corporation controlled by Yigal Zilkha (oneof the controlling persons of Y.Z.), now hold approximately 42.4% of theissued and outstanding share capital of the Company, and received from A.S.Y.Van irrevocable power of attorney, valid for a period of 3 months, to vote suchnumber of ordinary shares of the Company that shall equal 4% of the issued andoutstanding share capital of the Company following the rights issue.1.2 Financial ConditionThe Group's activities are adversely affected by the globaleconomic crisis in general and the economic crisis in Greece in particular.The abovementioned, along with the Company's inability to exercise its rightsin Club Hotel Loutraki S.A. ("CHL") due to disagreements with B.A.T(Management) 2004 Ltd. (of the Club Hotel Group) ("B.A.T.") (see note 32 tothe financial statement for the year ended December 31,2012 that werepublished on 14 May 2013) and Casino Austria International Holding GmbH's("CAIH") unwillingness to comply with its contractual obligations to transferEUR49.5 million to Powerbrook Spain S.L ("PBS"), have brought the Company tooperating losses of approximately EUR18.8 million and EUR33.7 million for the sixmonths period ended 30 June 2013 and for the year ended 31 December, 2012,respectively, and to negative cash flows from its continued operations ofapproximately EUR0.8 million for the six month ended 30 June 2013. The Companynet deficit in working capital amounted to approximately EUR2.2 million on 30June 2013.NOTE 1 - GENERAL INFORMATION (Cont.)1.2 Financial Condition (Cont.)As a result, the Company was not able to meet its originalrepayment schedules of loans and credits received from Queenco and from aprevious shareholder in Dasharta (a company indirectly jointly Controlled byQLI), from whom the Company 迷你倉urchased residual shares in said company in 2008.The said liabilities to the previous shareholder in Dasharta amounted as at 30June 2013 to EUR704. The said liabilities to Queenco amounted as at 30 June 2013to NIS 30.1 million. So far, the Company has succeeded in reachingunderstandings with Queenco and the abovementioned previous shareholderregarding a rescheduling of the repayment schedules such that they willcoincide with the Company's payment abilities.The Company's management is of the opinion that they will succeedin the future, if needed, in rescheduling the repayment schedules of loansfrom both Queenco and the previous shareholder. However, the current paymentschedule of the loans from Queenco is in line with the repayment schedule ofQueenco of debentures issued by it. Accordingly, the ability of the Company tore-schedule the payment terms of the loans from Queenco is dependent on theability of Queenco to obtain other financing sources to repay its debenturesobligations.As mentioned in note 1.1, in August of 2013 the Company completed arights issue for a total consideration of approximately EUR5.9 million, to beused for general corporate purposes as approved from time to time by theBoard, including repayment of loans..Casino Rhodes, a subsidiary of the Company, reached an agreementwith the Greek authorities for the rescheduling of the payment terms of anamount of EUR3 million not paid when due.The Group is continuing in the implementation of its cost savingplans and is in the process of expanding their scope, mainly in Rhodes, due tothe decrease in revenues caused by the economic situation.The Group is also in a process of realization of excess assets. TheCompany's real estate in Bulgaria (which is not in use by the Group) and the 9Hectare land in Cambodia are held for sale. The Company's Board of Directors,in a meeting held in February 2013, agreed on the sale of 9 Hectare plot theCompany owns in Cambodia, if needed, to enable the Company to meet itsobligations. The Company has contracted a selling agent in Cambodia to help itin realizing the property. However, if the Company succeeds in raisingsufficient funds from sources other than the land, the Company may re-considerits decision.The Company recorded an impairment loss of approximately EUR0.5million with respect to the assets held for sale in Bulgaria, as a result ofnegotiations started with a prospective buyer, based on the Company's bestestimation of the price the assets can be sold.The Company also recorded an impairment loss of approximately EUR1.1million on the fix assets in Prague. The Company is currently examining thepossibility of selling the activity in Prague and has started negotiationswith a prospective buyer. The impairment charge was recorded based on theCompany's best estimation of the price for which the activity can be sold.At 1 July 2013 the Company received a court decision following amotion filed by a subsidiary of the Company (the "Applicant"), which serves asa director of Agastia Holdings Ltd. ("Agastia"), against B.A.T. Management(2004) Ltd., the other director of Agastia, and Mr. Moshe Bublil; in which theApplicant requested the court to enforce the respondents to carry out theresolutions of Agastia's board of directors of 23 June. Agastia is one of thecompanies through which the Company indirectly holds, together with others,CHL.NOTE 1 - GENERAL INFORMATION (Cont.)1.2 Financial Condition (Cont.)The court: (a) rejected the Applicant's request concerningappointment and/or dismissal of directors in PBS (the direct shareholder ofCHL); and (b) accepted the Applicant's request to enforce Agastia'sresolutions concerning the distribution of available cash at PBS and orderedthe respondents to effectuate this resolution. The result of the court's firstdecision has no a significant impact following the resignation of CasinoAustria director and currently without the participation of the directors bythe company it is not possible to convene the B.O.D.In order to implement the courts second decision the company needto change PBS article of association due to the company relationship with thepartner the company can not estimate the time the process will be complete.The Company's ability to meet all its obligations in theforeseeable future is dependent on its ability to successfully execute theabove mentioned plans.The aforesaid raise substantial doubt about the Company's abilityto continue as a going concern. The financial statements do not include anyadjustments that might result from the outcome of this uncertainty.The timing and scope of the success in the execution of some of theabovementioned actions depend on agreements with third parties and/or areaffected by processes and other factors which are not under the Company'scontrol. Nonetheless, the Company's management is of the opinion that theCompany has good chances of executing the sale of the land in Cambodia and atleast a major portion of its other plans in a timely manner. Accordingly, theCompany's management is of the opinion that its existing cash and the expectedinflow of cash through the successful execution of the above mentioned plans,will enable the Company to meet the needed cash levels required for itsoperations and the payment of obligations when due.For further information please see note 5.Project in LoutrakiIn addition to the significant losses CHL incurred in 2012, CHLalso incurred a net loss of EUR 17 million during the six months ended June 30,2013, and as of that date, CHL's current liabilities exceeded its currentassets by EUR78 million (of which EUR37 million are unsecured credit to BankPiraeus). On 8 July 2013 CHL singed two loan agreements with Piraeus Bank fora total amount of EUR42.5 million for the refinancing of the existing overdraftfacilities including accrued interest, through a secured long term loan. Bothloans will have a grace period of 18 months and will be repaid in 8installments starting from July 2015 and ending January 2019.CHL's 2013 budget shows a significant loss and additional negativecash flow for which no funding source is available. On 1 August 2013 duringthe meeting of the Administrative Board of Club Hotel Casino Loutraki("CHCL"), the joint venture that operates the project, the Administratorinformed the representatives of Touristiki Loutrakiou S.A. (a company owned byLoutraki municipality, a partner in CHCL), about the financial performance ofCHCL and its financial deadlock, and that from the figures presented it wasevident that the CHCL will not be able to cover its obligations for the monthof August 2013 towards the Greek State, employees, Social Security Fund etc,unless the deficit would be funded through CHL S.A.The above further supports the Company's management's opinion thatthere are significant doubts as to the ability of CHL to continue itsoperations as a going concern in the foreseeable future.The financial statements do not include any adjustments that mightresult from the outcome of this uncertainty.NOTE 1 - GENERAL INFORMATION (Cont.)1.2 Financial Condition (Cont.)Project in Loutraki (cont.)As per information received from CHL management, CHL's managementcontinues its efforts to restructure the operation, rationalize the expenses,finding a hotel operator to lease the hotel, absorbing simultaneously thelargest part of CHCL personnel that is assigned to the hotel, restrain theeffect of the continuing financial crisis on revenue and deal with theobligations from the past, CHL has unsecured assets which can be used tosecure future debt financing, if needed.CHL management is looking for additional ways to raise fundsincluding capital injection, selling of assets and receipt of additionalloans. The Company is not obligated to provide a capital injection to CHL orto cover its liabilities and to the best of the Company's knowledge, PBS'scash position as of 30 June 2013 is approximately EUR 8.2 million.As a result of the above and due to the significant discrepanciesbetween forecasts used for the 31 December 2012 impairment test and the actualresults of CHL, the Company has conducted another impairment test for thepurpose of these financial statements that embodied the continuing decline inCHL operations. Consequently, the Company's management had to apply its bestjudgment and base the impairment test on a weighted combination of (a) certainassumptions made by it as to future performance of the casino (contributingapproximately 20% to the weighted calculation) and (b) the forecasts receivedfrom CHL which resulted in zero value to CHL operation (contributingapproximately 80% to the weighted calculation). This process is addingadditional uncertainty to the inherent uncertainty involved in the projectionsand assumptions needed for an impairment examination.As a result of the impairment test, the Company wrote an impairmentloss of 12.8 million under "impairment of investment in an associated company"for the six and three months ended 30 June 2013.Please also see note 1.3 and 16 to the Company's financialstatement for the year ended December 31, 2012 for the uncertaintiessurrounding the preparation of the valuation of the associated company inLoutraki.Project in RhodesIn relation to the information provided under Note 32 to theCompany's annual financial statements for the year ended December 31, 2012, in2005, Casino Rodos ("CR") was assessed taxes and penalties amounting to EUR 16million due to the disqualification of CR's accounting books for the years1999 and 2000, resulting from faults discovered at audits conducted duringthese years. CR appealed these assessments and on 28 June 2013, the courtissued a resolution (which was delivered on 22 August 2013 to the attorneysrepresenting CR in the appeal), in which the court ordered the Greek taxauthorities to present to the court additional evidence relating to theinvestigations conducted by the Financial Crime Investigation Body (SDOE) inthe years 1999 and 2000, which resulted in the above assessments.In the opinion of the Greek attorneys handling this matter for CR,the court's request to review these documents, along with the current publicatmosphere in Greece concerning tax evasions, which is reflected, among otherthings, in frequent legislation changes and decisions aimed at increasing theenforcement in the tax field, have resulted in the reduction of CR's chancesof winning the appeal. Nevertheless, CR's attorneys have clarified that CR canstrengthen its claims by taking some additional actions, including, amongothers, additional documentation and supporting evidences.NOTE 1 - GENERAL INFORMATION (Cont.)1.2 Financial Condition (Cont.)Project in Rhodes (cont.)The attorneys handling the case for CR have estimated that,assuming that CR is able to complete and present to the court such documentsand evidences within the time period available for the submission of suchevidence and documents, CR's chances of winning the appeal are slightly above51%. CR's management is of the opinion, after thoroughly discussing andexamining each of the actions required, that it is able to submit the requireddata to the court within the available time frame in accordance with theinstructions of its attorneys in such scope that will defined its chances ofwinning the appeal at slightly above 51%.Therefore, the Company has resolved not to include in its financialstatements any provision regarding this case.The tax assessments as of the date hereof (including interest andpenalties) amount to approximately Euro 23 million. If the court rules againstCR, neither CR nor the Group as a whole have the financial means to pay suchamount and CR will probably not be able to continue to operate as a goingconcern. It is clarified that QLI and Y.Z. have provided guarantees for thepayment of a loan extended to CR by a bank corporation, which balance as of 30June 2013 amounts to approximately Euro 6.7 million. If the Company or Y.Z.are required to pay their guarantees, there is high likelihood that they willnot have the financial means to do so.NOTE 2 - SIGNIFICANT ACCOUNTING POLICIESThe interim financial statements have been prepared in accordancewith generally accepted accounting principles for the preparation of financialstatements for interim periods, as prescribed in IAS 34, "Interim FinancialReporting". The significant accounting policies and methods of computationadopted in the preparation of the interim Condensed financial statements areconsistent with those followed in the preparation of financial statements asof December 31, 2012 except as noted below.New standards, interpretations and amendments adopted by theCompanyThe accounting policies adopted in the preparation of the interimcondensed financial statements are consistent with those followed in thepreparation of financial statements for the year ended 31 December 2012,except for the adoption of new standards and interpretations effective as of 1January 2013.The Company applies, certain standards and amendments that requirerestatement of previous financial statements IAS 19R Employee Benefits andIFRS 11 Joint Arrangements. The nature and the impact of each newstandard/amendment is described below:IAS 19 Employee Benefits (Revised 2011) (IAS 19R):IAS 19R includes a number of amendments to the accounting fordefined benefit plans, including actuarial gains and losses that are nowrecognised in other comprehensive income (OCI) and permanently excluded fromprofit and loss; expected returns on plan assets that are no longer recognisedin profit or loss, instead, there is a requirement to recognise interest onthe net defined benefit liability in profit or loss, calculated using thediscount rate used to measure the defined benefit obligation, and; unvestedpast service costs are now recognised in profit or loss at the earlier of whenthe amendment occurs or when the related restructuring or termination costsare recognised. The amendments require the recognition of changes in definedbenefit obligations and in fair value of plan assets when they occur, andhence eliminate the 'corridor approach' permitted under the previous versionof IAS 19 and accelerate the recognition of past service costs. Otheramendments include new disclosures, such as, quantitative sensitivitydisclosures.NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)IAS 19 Employee Benefits (Revised 2011) (IAS 19R): (Cont.)In the case of the Group, the transition to IAS 19R had an impacton the net defined benefit plan obligations due to the difference inaccounting for interest on plan assets, unvested past service costs andelimination of the "corridor approach".IFRS 11 Joint Arrangements and IAS 28 Investments in Associates andJoint VenturesIFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13Jointly-controlled Entities - Non-monetary Contributions by Ventures. IFRS 11removes the option to account for jointly controlled entities (JCEs) usingProportionate consolidation. Instead, JCEs that meet the definition of a jointventure under IFRS 11 must be accounted for using the equity method.The application of this new standard impacted the financialposition of the Group by replacing proportionate consolidation of the jointventure in Vasanta with the equity method of accounting.IFRS 11 is effective for annual periods beginning on 1 January2013.The effect of the implementation of IFRS 11 and IAS19R on theCompany's June 30, 2012 unaudited financial statements is as follows:30 June 2012 As was As presented Effect presented in Effect of of at these financial change of change financial statements IFRS 11 IAS 19R statementsCash and cash equivalents 6,812 (4,696) - 2,116Other current assets 5,516 12 - 5,528 12,328 (4,684) 7,644Property, plant and equipment 39,466 (5,408) - 34,058Investment in an associatedcompany and joint ventures 66,570 12,499 79,069Other non-current assets 9,581 (4,483) - 5,098 115,617 2,608 - 118,225Total Assets 127,945 (2,076) - 125,869Current liabilities (11,944) 161 - (11,783)Other long term liabilities (8,756) 1,915 - (6,841)Other non-current liabilities (7,927) - 521 (7,406) (16,683) 1,915 521 (14,247)99,318 - (521) 99,839NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)Six months ended 30 June 2012 Effect As As was of presented presented in Effect of change at these financial change of of IAS financial statements IFRS 11 19R statementsRevenues 20,285 (11,381) - 8,904Cost of revenues (19,653) 11,114 - (8,539)Selling and marketing expenses (4,964) 3,052 - (1,912)General and administrativeexpenses (5,333) 2,339 - (2,994)Other operating expenses (1,578) 799 - (779)Share of results of associatedcompany and joint ventures (2,429) 28,694 (1,705) 24,560Profit on deem disposal ofsubsidiary 33,580 (33,580) - -Operating profit 19,908 1,037 (1,705) 19,240Investment income 66 29 - 95Finance costs (1,019) 331 - (688)Foreign exchange gain 194 19 - 213Profit before tax 19,149 1,416 (1,705) 18,860Tax benefit (expense) 124 (477) - (353)Profit from continued operations 19,273 939 (1,705) 18,507Loss from discontinuedoperations (3,597) - - (3,597)Total profit for the period 15,676 939 (1,705) 14,910Realization of translationreserve due to the disposal anddeem disposal of subsidiaries 11,107 - - 11,107Exchange differences arising ontranslation of foreignoperations (498) 119 - (379)Total comprehensive income forthe period 26,285 1,058 (1,705) 25,638Profit for the year attributableto:Equity holders of the parent 17,044 - (1,705) 15,339Non- controlling interests (1,368) 939 - (429) 15,676 939 (1,705) 14,910Total comprehensive income(loss) for the year attributableto:Equity holders of the parent 27,758 - (1,705) 26,053Non-controlling interests (1,473) 1,058 - (415) 26,285 1,058 (1,705) 25,638There is no effect of the implementation of IFRS 11 on theCompany's for the year attributable to the equity holders of the parent.NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)Three months ended 30 June 2012 Effect As As was of presented presented in Effect of change at these financial change of of IAS financial statements IFRS 11 19R statementsRevenues 4,952 - - 4,952Cost of revenues (4,255) - - (4,255)Selling and marketing expenses (1,149) - - (1,149)General and administrativeexpenses (1,766) 38 - (1,728)Other operating expenses (779) - - (779)Share of results of associatedcompany and joint ventures (2,429) (88) - (2,517)Profit on deem disposal ofsubsidiary - - - -Operating profit (5,426) (50) - (5,476)Investment income 32 19 - 51Finance costs (483) 17 - (466)Foreign exchange gain 397 14 - 411Profit before tax (5,480) - - (5,480)Tax benefit (expense) 45 - - 45Profit from continued operations (5,435) - - (5,435)Loss from discontinuedoperations - - - -Total profit for the period (5,435) - - (5,435)Realization of translationreserve due to the disposal anddeem disposal of subsidiaries - - - -Exchange differences arising ontranslation of foreignoperations 442 - - 442Total comprehensive loss for theperiod (4,993) - - (4,993)Profit (loss) for the yearattributable to:Equity holders of the parent (5,136) - - (5,136)Non- controlling interests (299) - - (299) (5,435) - - (5,435)Total comprehensive income(loss) for the year attributableto:Equity holders of the parent (4,743) - - (4,743)Non-controlling interests (250) - - (250) (4,993) - - (4,993)NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)The effect of the implementation of IFRS 11 and IAS19R on theCompany's 2012 financial statements is as follows:31 December 2012 As was Effect As presented of presented in Effect of change at these financial change of of IAS financial statements IFRS 11 19R statementsCash and cash equivalents 7,038 (4,632) - 2,406Other current assets 4,037 9 - 4,046 11,075 (4,623) - 6,452Property, plant and equipment 37,576 (5,160) - 32,416Investment in an associatedcompany and joint ventures 14,586 12,066 - 26,652Other non-current assets 8,803 (4,362) - 4,441 60,965 2,544 - 63,509Total Assets 72,040 (2,079) - 69,961Current Liabilities (13,070) 164 - (12,906)Other long term liabilities (10,587) 1,915 (8,672)Long term deferred taxes (96) - - (96)Other non-current liabilities (710) - (22) (732) (11,393) 1,915 (22) (9,500)47,577 - (22) 47,555NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)Year ended 31 December 2012 Effect As As was of presented presented in Effect of change at these financial change of of IAS financial statements IFRS 11 19R statementsRevenues 31,552 (11,381) - 20,171Cost of revenues (28,663) 11,114 99 (17,450)Selling and marketing expenses (7,064) 3,052 - (4,012)General and administrativeexpenses (7,253) 2,407 - (4,846)Other operating expenses (1,508) 799 - (709)Share of results of associatedcompany and joint ventures (7,975) 28,784 (963) 19,846Impairment of investment in anassociated company (46,666) - - (46,666)Profit on deem disposal ofsubsidiary 33,580 (33,580) - -Operating profit (loss) (33,997) 1,195 (864) (33,666)Investment income 135 64 - 199Finance costs (1,740) 356 - (1,384)Foreign exchange gain (loss) 261 (199) - 62Profit before tax (35,341) 1,416 (864) (34,789)Tax expense (533) (477) - (1,010)Loss from continued operations (35,874) 939 (864) (35,799)Loss from discontinued -operations (3,597) - (3,597)Total loss for the year (39,471) 939 (864) (39,396)Realization of translationreserve due to the disposal anddeem disposal of subsidiaries 11,107 - - 11,107Remeasurements of net definedbenefit liability - - (1,384) (1,384)Exchange differences arising ontranslation of foreignoperations (1,085) 119 - (966)(29,449) 1,058 (2,248) (30,639)Total comprehensive loss for theyearloss for the year attributableto:Equity holders of the parent (37,840) - (872) (38,712)Non- controlling interest (1,631) 939 8 (684) (39,471) 939 (864) (39,396)Total comprehensive loss for theyear attributable to:Equity holders of the parent (27,803) - (2,204) (30,007)Non-controlling interest (1,646) 1,058 (44) (632) (29,449) 1,058 (2,248) (30,639)NOTE 3 - NOTE FOR THE CONSOLIDATED CASHFLOW STATEMENTS3 months ended 6 months ended Year ended June 30 June 30 December 31 2 0 1 2 2 0 1 2 2 0 1 3 (*) 2 0 1 3 (*) 2 0 1 2 (*) Unaudited UnauditedNet profit (loss) (16,204) (5,435) (20,387) 14,910 (39,396)Adjustments for:Depreciation ofproperty, plant andequipment 806 823 1,619 1,779 3,476Decrease in provisions (88) (12) (64) (127) (608)Loss on sale ofproperty, plant andequipment anddisposals - 777 - 777 (45)Impairment ofinvestment 12,886 - 12,886 - 46,666Impairments anddisposals 1,567 - 1,567 - 735Loss on disposal ofdiscontinued operation - - - 3,597 3,597Investment income (43) (51) (87) (95) (199)Finance costs 225 466 757 688 1,384Foreign exchange loss(gain) 83 (411) 1,134 (213) (62)Share of result ofassociated company andjoint ventures 17 2,517 11 (24,560) (19,846)Expense relating togrant of share options - - - (75) (75)Operating cash flowsbefore movements inworking capital (751) (1,326) (2,564) (3,319) (4,373)Decrease (increase)inventories 2 (75) 21 (74) (16)Decrease inreceivables 377 307 513 541 577Increase in payables 565 (320) 1,527 632 1,241Cash generated byoperations 193 (1,414) (503) (2,220) (2,571)Income taxes paid (41) (41) (82) (82) (164)Interest paid (167) (134) (167) (221) (525)Net cash fromoperating activities (15) (1,589) (752) (2,523) (3,260)(*) Restated for retrospective implementation of IFRS 11 and IAS19RNOTE 4 - SEGMENT INFORMATIONIFRS 8 requires operating segments to be identified on the basis ofinternal reports about components of the Group that are regularly reviewed bythe chief operating decision maker in order to allocate resources to thesegment and to assess its performance.Due to the loss of indirect joint control in CHL the contributionto the operations of each of the Company's location has increased andaccordingly Management has decided to present each location as a reportablesegment, retrospectively from 2012.Segmental Revenues and Profit:Rhodes Prague Cambodia Adjustments Total Six months ended June 30, 2013Revenues 5,076 1,980 281 148 7,485Segment profit (EBITDA before other operating expenses) (939) (168) (752) (844) (2,703)Depreciation & Amortization 864 651 37 67 1,619Impairment of investment in associated company (12,886)Impairment of fix assets (1,088) (1,088)Impairment of non - current asset held for sale (479)Share of results of associates and joint ventures (11)Operating loss (18,786)Finance costs, investment income and Foreign exchange gain (1,804)Loss before tax (20,590)Rhodes Prague Cambodia Adjustments Total Six months ended June 30 2012 (*)Revenues 6,010 2,345 448 101 8,904Segment profit (EBITDA before other operating expenses) (1,319) 219 (387) (1,275) (2,762)Depreciation & Amortization 942 760 12 65 1,779Disposals of fix assets (779)Share of results of associates and joint ventures 24,560Operating profit 19,240Finance costs, investment income and Foreign exchange gain (380)Profit before tax 18,860(*) Restated for retrospective implementation of IAS19RNOTE 4 - SEGMENT INFORMATION (Cont.)Segmental Revenues and Profit:Rhodes Prague Cambodia Adjustments Total Three months ended June 30, 2013Revenues 2,897 1,008 117 89 4,111Segment profit (EBITDA before other operating expenses) 24 (4) (381) (424) (785)Depreciation & Amortization 429 310 19 35 793Impairment of investment in associated company (12,886)Impairment of fix assets (1,088) (1,088)Impairment of non - current asset held for sale (479)Share of results of associates and joint ventures (17)Operating loss (16,048)Finance costs, investment income and Foreign exchange gain (265)Loss before tax (16,313)Rhodes Prague Cambodia Adjustments Total Three months ended June 30, 2012 (*)Revenues 3,266 1,203 448 35 4,952Segment profit (EBITDA before other operating expenses) (380) 110 (387) (703) (1,360)Depreciation & Amortization 432 350 12 26 820Impairment of investment in associated companyDisposal of fix assets (779)Share of results of associates and joint ventures (2,517)Operating loss (5,476)Finance costs, investment income and Foreign exchange gain (4)Loss before tax (5,480)(*) Restated for retrospective implementation of IAS19RNOTE 4 - SEGMENT INFORMATION (Cont.)Segmental Revenues and Profit:Rhodes Prague Cambodia Adjustments Total Year ended 31 December 2012 (*)Revenues 14,407 4,950 596 218 20,171Segment profit (EBITDA before other operating expenses) 136 195 (1,003) (1,941) (2,613)Depreciation & Amortization 1,851 1,495 34 144 3,524Impairment of investment in associated company (46,666)Other operating expenses (709)Share of results of associates and joint ventures 19,846Operating loss (33,666)Finance costs, investment income and Foreign exchange gain (1,123)Loss before tax (34,789)(*) Restated for retrospective implementation of IAS19RNOTE 5 - other information1. Following the termination of Mr. Tal Taragan's services as thechief executive officer of the Company on April 30, 2013, the Company's boardof directors has requested Mr Yigal Zilkha, who is an indirect majorshareholder and an office holder of the Company, to serve as the Company'schief executive officer until a new chief executive officer for the Company islocated and appointed. Mr Zilkha has accepted this appointment and also servesas the chief executive officer of (Y.Z.) Queenco Ltd., the Company's parentcorporation. Mr Zilkha is not entitled to any compensation for his services.2. Mr Haim Assayag, has resigned from his position as the company'sChairman of the Board, effective as of 1 September 2013.3. Dr Ziv Reich and Mr Effy Abudi have resigned from their positionas non-executive directors with immediate effect.4. The Company's primary contingent liabilities relate todisagreements with Moshe Bublil, the controlling shareholder of Club HotelEilat Ltd. (including members of its group companies, "Club Hotel") and thejointly controlling shareholder in Vasanta. CHL is held through variousIsraeli and foreign corporations, in which the Company and certain thirdparties, primarily Club Hotel, hold direct and indirect interests. Thearticles of associations of the various holding companies, as well as thestructure of their boards and various resolutions adopted thereby reflect astructure of an ultimately, indirectly, joint control of CHL by the Companyand Club Hotel. Accordingly, all the decisions relating to PBS and CHL aresupposed to be jointly adopted by the Company and Club Hotel. Towards the endof 2008, certain disagreements arose between the Company and Moshe Bublil.These disagreements resulted in frequent and lengthy shareholders and boardmeetings of the various holding companies, non-performance of variousresolutions adopted at such meetings and disputes regarding the substance andinterpretation of various resolutions adopted at such meetings (some of whichaffect the decision making process at CHL). In addition, the parties haveinitiated certain legal proceedings in connection with these disputes, whoseoutcome could affect the holding companies' structure of the boards, decisionmaking process, distribution of dividends and the flow of information to theCompany. For further information see Note 32 to the Company's financialstatements for the year ended December 31, 2013.儲存