THIS DOCUMENT AND THE ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser, who is authorised under the Financial Services and Markets Act 2000 (FSMA) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

This document, which comprises: (i) a circular prepared for the purposes of the General Meeting convened pursuant to the Notice of General Meeting set out at the end of this document; and (ii) a prospectus relating to the Ordinary Shares prepared in accordance with the Prospectus Rules of the Financial Conduct Authority (the FCA) made under section 73A of FSMA, has been approved by the FCA in accordance with section 87A of FSMA and made available to the public in accordance with Rule 3.2 of the Prospectus Rules.

Subject to the restrictions set out below, if you sell or transfer or have sold or transferred all of your Existing Ordinary Shares (other than ex-rights) held in certificated form before 8.00 a.m. on 30 January 2014 (the Ex-Rights Date), please send this document, together with the accompanying Form of Proxy and any Provisional Allotment Letter (duly renounced), if and when received, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for onward delivery to the purchaser or transferee. None of these documents should, however, be distributed, forwarded to or transmitted in or into any jurisdiction where to do so might constitute a violation of local securities laws or regulations, including but not limited to (subject to certain exceptions) the United States and any of the other Excluded Territories. Please refer to Sections 9 and 10 of Part II (Details of the Rights Issue) of this document if you propose to send this document and/or the Provisional Allotment Letter outside the United Kingdom. If you sell or have sold or transferred all or some of your Existing Ordinary Shares (other than ex-rights) held in uncertificated form before the Ex-Rights Date, a claim transaction will automatically be generated by Euroclear which, on settlement, will transfer the appropriate number of Nil Paid Rights to the purchaser or transferee. If you sell or have sold or transferred only part of your holding of Existing Ordinary Shares (other than ex-rights) held in certificated form before the Ex-Rights Date, please contact the stockbroker, bank or other agent through whom the sale or transfer was effected immediately. Instructions regarding split applications are set out in Part II (Details of the Rights Issue) of this document and in the Provisional Allotment Letter.

The distribution of this document, any other offering or public material relating to the Rights Issue and/or the Provisional Allotment Letter and/or the transfer of Nil Paid Rights, Fully Paid Rights and/or New Ordinary Shares through CREST or otherwise into a jurisdiction other than the United Kingdom may be restricted by law and therefore persons into whose possession this document (and/or any accompanying documents) comes should inform themselves about and observe any such restrictions. In particular, subject to certain exceptions, this document and the Provisional Allotment Letter should not be distributed, forwarded to or transmitted in or into the United States or any of the other Excluded Territories or into any other jurisdiction where the extension or availability of the Rights Issue would breach any applicable law. Any failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.

Applications will be made for the Rights Issue Shares and the Consideration Shares to be admitted to the premium segment of the Official List of the UKLA and to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission of the Rights Issue Shares (nil paid) will become effective, and that dealings in the Rights Issue Shares (nil paid) on the London Stock Exchange will commence, at 8.00 a.m. on 30 January 2014 and that Admission of the Consideration Shares will become effective, and that dealings in the Consideration Shares on the London Stock Exchange will commence in March 2014.

CINEWORLD GROUP PLC

(incorporated and registered in England and Wales with registered number 05212407)

Proposed Combination with the cinema operations of Cinema City International N.V.

8 for 25 Rights Issue of up to 47,965,465 Rights Issue Shares at 230 pence per New Ordinary Share to raise approximately £110.3 million and issue to Cinema City International N.V. of Consideration Shares representing 24.9 per cent. of the share capital of Cineworld following completion of the Combination

Notice of General Meeting

This document should be read as a whole. Your attention is drawn to the letter from your Chairman which is set out in Part I (Letter from the Chairman) of this document and which contains a recommendation from your Board that you vote in favour of the Resolution to be proposed at the General Meeting referred to below. The section of this document entitled ''Risk Factors'' includes a discussion of certain risk factors which should be taken into account when considering the matters referred to in this document.

A Notice of General Meeting of the Company, to be held at the offices of Slaughter and May, One Bunhill Row, London EC1Y 8YY at 11.00 a.m. on 29 January 2014, is set out at the end of this document. Whether or not you intend to be present at the General Meeting, you are asked to complete and return the enclosed Form of Proxy in accordance with the instructions printed on it as soon as possible and, in any event, so as to be received by the Registrar, Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU by not later than 11.00 a.m. on 27 January 2014 (or, in the case of an adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting). You may also submit your proxy electronically at www.capitashareportal.com using the Voting ID, Task ID and Shareholder Reference Number on the Form of Proxy. If you are a member of CREST you may be able to use the CREST electronic proxy appointment service. Proxies sent electronically must be sent as soon as possible and, in any event, so as to be received by not later than 11.00 a.m. on 27 January 2014 (or, in the case of an adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting). Completion and return of a Form of Proxy will not preclude you from attending and voting in person at the General Meeting, should you so wish.

The latest time and date for acceptance of, and payment in full for, the Rights Issue Shares by holders of Nil Paid Rights is expected to be 11.00 a.m. on 13 February 2014. The procedure for acceptance and payment is set out in Part II (Details of the Rights Issue) of this document and, for Qualifying Non-CREST Shareholders only, will also be set out in the Provisional Allotment Letter. Qualifying CREST Shareholders should refer to Section 5 of Part II (Details of the Rights Issue) of this document.

Subject to the passing of the Resolution at the General Meeting, it is expected that Qualifying Non-CREST Shareholders (other than Excluded Shareholders) will be sent Provisional Allotment Letters on 29 January 2014 and that Qualifying CREST Shareholders (other than Excluded Shareholders) will receive a credit to the appropriate stock accounts in CREST in respect of the Nil Paid Rights to which they are entitled on 30 January 2014. The Nil Paid Rights so credited are expected to be enabled for settlement by Euroclear as soon as practicable after Admission of the Rights Issue Shares.

Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Rights Issue.

Barclays, JP Morgan and Investec who are authorised in the United Kingdom by the Prudential Regulatory Authority and regulated in the United Kingdom by the Prudential Regulatory Authority and the FCA, are acting solely for Cineworld and no one else in connection with the Combination or the Rights Issue and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Combination or the Rights Issue and will not be responsible to anyone other than Cineworld for providing the protections afforded to respective clients of Barclays, JP Morgan and Investec nor for providing advice in connection with the Combination or the Rights Issue or any other matter referred to in this document.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, New Ordinary Shares or to take up entitlements to Nil Paid Rights or entitlements to Rights Issue Shares in any jurisdiction in which such offer or solicitation would be unlawful. This document is being sent to holders with registered or mailing addresses in any such jurisdiction only in connection with the General Meeting and, in that context, no part of this document or the Provisional Allotment Letter constitutes, or will constitute, or forms part of any offer to sell, or a solicitation of an offer to buy, New Ordinary Shares or to take up entitlements to Nil Paid Rights or entitlements to Rights Issue Shares. EXCEPT AS OTHERWISE PROVIDED HEREIN, THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OF NIL PAID RIGHTS, FULLY PAID RIGHTS, NEW ORDINARY SHARES OR PROVISIONAL ALLOTMENT LETTERS TO ANY SHAREHOLDER WITH A REGISTERED ADDRESS IN, OR WHO IS RESIDENT OR LOCATED IN, THE UNITED STATES OR ANY OF THE OTHER EXCLUDED TERRITORIES. All Excluded Shareholders and any person (including, without limitation, a nominee or trustee) who has a contractual or legal obligation to forward this document or any Provisional Allotment Letter, if received, or other document to any jurisdiction outside the United Kingdom should read Section 9 of Part II (Details of the Rights Issue) of this document.

Notice to US investors

The Provisional Allotment Letters, the Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the Securities Act) or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, into or within the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters or the Rights Issue Shares in the United States.

The Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares are being offered and sold (i) outside the United States in offshore transactions as such terms are defined in, and in reliance on, Regulation S under the Securities Act and (ii) within the United States to certain Shareholders in transactions exempt from the registration requirements of the Securities Act. Except for Permitted US Shareholders, no person in the United States may receive Provisional Allotment Letters, exercise Nil Paid Rights or Fully Paid Rights and/or purchase Rights Issue Shares.

In addition, until 40 days after completion of the Rights Issue, an offer, sale or transfer of the Rights Issue Shares within the United States by a dealer (whether or not participating in the Rights Issue) may violate the registration requirements of the Securities Act.

The Consideration Shares have not been, and will not be, registered under the Securities Act or under any securities laws of any state or other jurisdiction of the United States and may not be resold, directly or indirectly, into or within the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. None of the Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters, the New Ordinary Shares, this document or any other offering document has been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the Rights Issue or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence in the United States.

Notice to Canadian residents

This document constitutes an offering of the securities described only in those jurisdictions and to those persons where and to whom they may be lawfully offered for sale, and only by persons permitted to sell such securities. This document is not, and under no circumstances is to be construed as, an advertisement or a public offering of the securities referred to in this document in Canada. No securities commission or similar authority in Canada has reviewed or in any way passed upon this document or the merits of the securities described and any representation to the contrary is an offence.

Notice to all Investors

Any reproduction or distribution of this document or the Provisional Allotment Letters, in whole or in part, and any disclosure of its contents or use of any information for any purpose other than in considering an investment in the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares is prohibited. By accepting delivery of this document, each offeree of the Nil Paid Rights, the Fully Paid Rights and/or the New Ordinary Shares agrees to the foregoing.

The contents of this document are not to be construed as legal, business or tax advice. Each prospective investor should consult their own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

This document is dated 10 January 2014.

		Page
	SUMMARY	1
	RISK FACTORS	16
	EXPECTED TIMETABLE OF PRINCIPAL EVENTS	37
	CINEWORLD DIRECTORS, PROPOSED DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS .	39
	SHARE CAPITAL AND RIGHTS ISSUE STATISTICS	41
PART I	LETTER FROM THE CHAIRMAN	42
PART II	DETAILS OF THE RIGHTS ISSUE	55
PART III	TERMS AND CONDITIONS OF THE COMBINATION	77
PART IV	INFORMATION ON CINEWORLD	81
PART V	INFORMATION ON CINEMA CITY	85
PART VI	OPERATING AND FINANCIAL REVIEW OF CINEWORLD	95
PART VII	OPERATING AND FINANCIAL REVIEW OF THE CINEMA CITY BUSINESS	108
PART VIII	HISTORICAL FINANCIAL INFORMATION RELATING TO CINEWORLD	120
PART IX	FINANCIAL INFORMATION RELATING TO THE CINEMA CITY BUSINESS	132
PART X	UNAUDITED PRO FORMA STATEMENT OF NET ASSETS OF THE ENLARGED GROUP .	189
PART XI	TAXATION .	195
PART XII	DIRECTORS, RESPONSIBLE PERSONS, CORPORATE GOVERNANCE AND EMPLOYEES	204
PART XIII	ADDITIONAL INFORMATION	221
PART XIV	DOCUMENTS INCORPORATED BY REFERENCE	238
PART XV	DEFINITIONS	240
	NOTICE OF GENERAL MEETING .	248

SUMMARY

Summaries are made up of disclosure requirements known as 'Elements'. These Elements are numbered in Sections A—E (A.1—E.7). This summary contains all the Elements required to be included in a summary for this type of securities and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of 'not applicable'.

	Section A—Introductions and warnings
Element	Disclosure requirement	Disclosure
A.1	Warning	This summary should be read as an introduction to the prospectus. Any decision to invest in the securities should be based on consideration of the prospectus as a whole by the investor. Where a claim relating to the information contained in the prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus or it does not provide, when read together with the other parts of the prospectus, key information in order to aid investors when considering whether to invest in such securities.
A.2	Resale or final placement of securities through financial intermediaries	Not applicable. Cineworld is not engaging any financial intermediaries for any resale of securities or final placement of securities after publication of this document.

	Section B—Issuer
Element	Disclosure requirement	Disclosure
B.1	Legal and commercial name	Cineworld Group plc.
B.2	Domicile/legal form/ legislation under which the issuer operates/ country of incorporation	The Company is incorporated in England as a public limited company, limited by shares. Its registered office is situated in England and its registered number is 05212407. The principal legislation under which the Company operates is the Companies Act 2006.

Element	Disclosure requirement	Disclosure
B.3	Current operations/ principal activities/ principal markets	Cineworld The Cineworld Group is one of the leading cinema groups in the UK and Ireland. Following the acquisition of Picturehouse in December 2012, the Cineworld Group operates a portfolio of 886 screens across 102 sites under the Cineworld and Picturehouse brands, of which the majority are multiplex sites with five or more screens. The Cineworld Group's portfolio includes five out of the 10 highest grossing cinemas in the UK and Ireland in 2013 (Source: Rentrak). All of the Cineworld Group's sites have been converted to digital projection, and the Cineworld Group is one of the industry leaders in the UK and Ireland in 3D, a format which the Board believes will become increasingly
		important. Cineworld sells food and drinks (soft drinks, coffee and, in certain cinemas, alcohol) at its sites. Cineworld has developed its coffee offer by opening 11 Starbucks coffee outlets, with further outlets in the pipeline. In addition, the Company provides a range of services, including the sales of 3D glasses, screen/auditorium hiring services, games machines, gift cards and sponsorship. Digital Cinema Media Limited (DCM), Cineworld's joint venture screen advertising business formed in 2008 with Odeon UCI, sells advertising time on cinema screens on behalf of Cineworld, Picturehouse and its other clients. As at the end of the 2013 Interim
		Period, DCM sold advertising to 78.6 per cent. of screens in the UK. Through the Cineworld and Picturehouse brands, Cineworld operates in market segments that are differentiated in terms of film content, the style and appeal of the individual cinemas and the food and drink offered. Picturehouse, which is run by its pre-acquisition management, also provides operating systems to other cinemas, acts as a distributor for smaller films and programmes screenings at 34 independently owned cinemas.
		In FY 2013, Cineworld's box office revenue increased by 4.0 per cent. with admissions growing by 1.3 per cent. and average ticket price rising by 2.6 per cent. to £5.40 (2012: £5.26). Retail initiatives continued to gain momentum with nine Starbucks outlets opening within Cineworld's cinemas, contributing to an increase in average spend per person of £0.02 (0.8 per cent.) to £1.75 (2012: £1.73). Other income benefited from increased income from advertising as well as an increase in 3D glasses sales as admissions for 3D films grew. Picturehouse continued to perform in line with expectations and a new opening is planned in Colchester. Cineworld anticipates that performance for FY2013 will be in line with the Board's expectations.
		Cinema City
		The Cinema City Business is one of the largest cinema businesses in Europe and operates 99 multiplexes, with a total of 966 screens, across CEE and Israel, making it one of the largest operators in these regions. In Israel, the Cinema City Business operates under the Yes Planet and Rav-Chen brands, and in CEE, it operates cinemas under the Cinema City brand.

Element	Disclosure requirement	Disclosure
		Cinema operations represent Cinema City's core business and are comprised of box office sales, retail sales of food and drink through concession stands, and on and off-screen advertising.
		Cinema City Holding was incorporated in The Netherlands in December 2012 as a wholly-owned subsidiary of CCI. Cinema City Holding, together with the other members of the Cinema City Holding Group, will own and operate the Cinema City Business following completion of the Reorganisation. The corporate office of Cinema City Holding is located in Rotterdam, The Netherlands.
		New Age Media, the Cinema City Business' advertising and sponsorship arm, offers on and off-screen advertising in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria and Romania. Cinema City's Israeli advertising arm operates under the Cinema Channel brand. For FY 2012, Cinema City had total revenues of EUR 280.7 million (£231.6 million) and, in the 2013 Interim Period, it had total revenues of EUR 209.0 million (£172.5 million) (converted at an exchange rate of £1:A1.2117).
B.4a	Most significant recent trends of the Company and its industry	Cineworld The UK and Ireland cinema industry had a satisfactory year in FY 2013 with industry gross box office marginally declining by 0.3 per cent against the previous year (Source: Rentrak). Cineworld continued to benefit from its customer-focused initiatives, resulting in UK and Ireland market share for Cineworld growing to 25.4 per cent. (2012: 24.7 per cent.). Including Picturehouse, the Cineworld Group's market share was 27.4 per cent
		Cinema City In FY 2013, Cinema City's total number of admissions grew by three per cent compared to FY 2012. In October 2013, the opening of ''Walesa'', a Polish made film, had a positive impact on admissions in Poland. More recently, the opening of the second instalment of the Hunger Games series of films saw increased admissions in most territories in FY 2013 relative to the first Hunger Games film in FY 2012 and contributed to similar trends in overall admissions during the fourth quarter of FY 2013 compared with the same period in FY 2012. As a result, Cinema City's performance is expected to be in line with CCI's expectations for the full year.
B.5	Group structure	Cineworld is the parent company of the Cineworld Group and, following the Combination, will be the parent company of the Enlarged Group, the principal activities of which will be operating cinemas and associated retail offerings, cinema advertising and film distribution.
B.6	Notifiable interests, different voting rights and controlling interests	As at the Latest Practicable Date, the Company had been notified in accordance with DTR5 of the Disclosure and Transparency Rules of the following interests in its Ordinary Shares:
		Shareholder	Number of shares	Percentage of Total Voting Rights (%)
		Franklin Templeton Inv. Man. Ltd	8,453,635	5.64
		Mawer Investment Management Limited	7,484,903	4.99
		Rathbone Brothers plc	7,314,563	4.88
		AXA Investment Managers SA Royal London Asset Management	7,225,000	4.82
		Limited	4,887,024	3.26

Element	Disclosure requirement	Disclosure
		Save as disclosed in this Element, Cineworld is not aware of any person who, as at the Latest Practicable Date, directly or indirectly, has a holding which is notifiable under English law.
		Cineworld is not aware of any persons who, as the Latest Practicable Date, directly or indirectly, jointly or severally, exercise or could exercise control over Cineworld nor is the Company aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company.
		None of the Company's major shareholders has different voting rights. To the extent known to the Company, the Company is not directly or indirectly owned or controlled by any person or any group of persons.
B.7	Historical key financial information for the Company	Cineworld Selected historical financial information for Cineworld has been extracted without material adjustment from the audited consolidated financial statements of the Cineworld Group for FY 2010, FY 2011 and FY 2012 and the unaudited consolidated financial statements of the Cineworld Group for the 2013 Interim Period set out in Part VIII (Historical Financial Information relating to Cineworld) of this document:

Consolidated Statement of Profit or Loss

	52 weeks ended 30 December 2010	52 weeks ended 29 December 2011	52 weeks ended 27 December 2012	39 weeks ended 27 September 2012	39 weeks ended 26 September 2013
	£m	£m	£m	(Unaudited) £m	(Unaudited) £m
Revenue	342.8	348.0	358.7	252.9	303.7
Cost of sales	(259.7)	(261.5)	(263.9)	(191.1)	(220.8)
Gross profit	83.1	86.5	94.8	61.8	82.9
Operating profit	37.1	42.6	44.2	22.7	31.0
Analysed between:
Operating profit before depreciation and amortisation, impairment charges, onerous lease and other non-recurring charges and
transaction and reorganisation costs	59.0	63.3	66.9	40.8	52.6
—Depreciation and amortisation .	(17.2)	(18.9)	(21.5)	(15.8)	(18.0)
—Other adjustments	(4.7)	(1.8)	(1.4)	(2.3)	(3.6)
Net financing costs Share of loss of jointly controlled entity using equity accounting	(6.6)	(9.2)	(5.6)	(4.1)	(4.8)
method, net of tax	(0.1)	—	(0.1)	(0.2)	(0.2)
Profit before tax	30.4	33.4	38.3	18.4	26.0
Taxation	(9.4)	(9.5)	(10.8)	(5.1)	(7.3)
Profit for the period attributable to equity holders of the Company	21.0	23.9	27.5	13.3	18.7
Basic earnings per share Diluted earnings per share	14.8p 14.7p	16.8p 16.7p	19.2p 19.0p	9.3p 9.2p	12.5p 12.3p

Consolidated Statement of Financial Position

	As at 30 December 2010	As at 29 December 2011	As at 27 December 2012	As at 27 September 2012	As at 26 September 2013
	£m	£m	£m	£m (Unaudited)	£m (Unaudited)
Assets
Non-current assets
Property, plant and equipment	114.2	124.3	160.0	134.2	160.4
Other non-current assets	234.6	233.6	268.8	232.7	267.4
Total non-current assets	348.8	357.9	428.8	366.9	427.8
Current assets
Other current assets	25.7	28.7	38.1	32.1	34.6
Cash and cash equivalents	10.6	5.5	10.9	3.6	9.8
Total current assets	36.3	34.2	49.0	35.7	44.4
Total Assets	385.1	392.1	477.8	402.6	472.2
Liabilities Current liabilities Interest bearing loans and other
financial liabilities	(11.7)	(6.9)	(8.1)	(21.8)	(27.1)
Other current liabilities	(57.7)	(60.0)	(77.7)	(49.1)	(55.7)
Total current liabilities	(69.4)	(66.9)	(85.8)	(70.9)	(82.8)
Non-current liabilities Interest bearing loans and other
financial liabilities	(99.7)	(100.0)	(129.7)	(104.8)	(119.5)
Other non-current liabilities	(64)	(64.9)	(73.7)	(65.0)	(71.9)
Total non-current liabilities	(163.7)	(164.9)	(203.4)	(169.8)	(191.4)
Total liabilities	(233.1)	(231.8)	(289.2)	240.7	(274.2)
Net assets	152.0	160.3	188.6	161.9	198.0
Total Equity	152.0	160.3	188.6	161.9	198.0

Consolidated Statement of Cash Flows

	52 weeks ended 30 December 2010	52 weeks ended 29 December 2011	52 weeks ended 27 December 2012	39 weeks ended 27 September 2012	39 weeks ended 26 September 2013
	£m	£m	£m	(Unaudited) £m	(Unaudited) £m
Net cash inflow from operating activities Net cash outflow from investing	42.0	47.0	57.6	18.6	16.8
activities Net cash (outflow)/inflow from	(20.2)	(24.9)	(74.3)	(24.3)	(11.5)
financing activities	(28.1)	(27.2)	22.2	3.9	(6.5)
Net (decrease)/increase in cash and cash equivalents	(6.3)	(5.1)	5.5	(1.8)	(1.2)
Cash and cash equivalents, net of bank	10.6	5.5	10.9	3.6	9.8

Disclosure requirement	Disclosure
	Cineworld acquired Picturehouse on 6 December 2012. Due to the timing of this acquisition, the results and financial position of Picturehouse are not presented in the consolidated financial statements for FY 2010 and FY 2011 nor in the condensed consolidated interim financial statements for the 2012 Interim Period.
	Save as set out above, there has been no significant change to Cineworld's financial condition and operating results during or after the period covered by the historical key financial information on Cineworld set out in this Element.
	Cinema City The selected financial information set out below has been extracted from the combined financial statements of Cinema City Holding Group for FY 2010, FY 2011, FY 2012 and the interim condensed combined financial statements of Cinema City Holding Group for the 2013 Interim Period set out in Part IX (Financial Information Relating to the Cinema City Business) of this document:

Combined Statements of Profit or Loss

	Year ended 31 December 2010	Year ended 31 December 2011	Year ended 31 December 2012	9 months ended 30 September 2012	9 months ended 30 September 2013
			EUR (thousands)	(Unaudited)	(Unaudited)
Revenue	234,549	267,459	280,653	196,007	208,986
Cost of sales	(188,560)	(225,663)	(236,649)	166,223	174,680
Gross profit	45,989	41,796	44,004	29,784	34,306
Other operating expenses	—	(3,278)	—	—	—
Administrative expenses	(12,682)	(13,789)	(14,348)	(10,401)	(10,268)
Operating profit	33,307	24,729	29,656	19,383	24,038
Analysed between:
Operating profit before depreciation and amortisation, and transaction
and reorganisation costs	53,179	53,424	60,211	41,844	46,848
—Depreciation and amortisation	(19,872)	(25,417)	(30,555)	(22,461)	(22,810)
—Transaction and reorganisation
costs	—	(3,278)	—	—	—
Financial income .	683	634	2,130	1,352	3,540
Financial expenses	(2,857)	(4,074)	(6,012)	(3,721)	(9,655)
Net financing costs Gain (loss) on disposals and	(2,174)	(3,440)	(3,882)	(2,369)	(6,115)
write-off or other investments	(86)	(201)	(334)	45	(24)
Profit before tax	31,047	21,088	25,440	17,059	17,899
Taxation	(4,038)	286	(1,788)	(1,369)	(1,293)
Net Income	27,009	21,374	23,662	15,690	16,606
Profit for the period attributable to equity holders of Cinema City
Holding	27,368	20,925	23,411	15,439	16,606

Consolidated statement of financial position

	As at 31 December 2010	As at 31 December 2011	As at 31 December 2012	As at 30 September 2012 (Unaudited)	As at 30 September 2013 (Unaudited)
			EUR (thousands)
Assets
Non-current assets	234,592	279,176	445,871	325,296	440,578
Current assets	42,270	45,924	59,580	59,231	46,506
Total Assets	276,862	325,100	505,451	384,527	487,084
Liabilities
Current liabilities	44,509	71,017	71,556	60,515	45,370
Non-current liabilities	30,722	41,993	210,884	92,330	205,374
Total liabilities	75,231	113,010	282,440	152,845	250,744
Net assets	201,631	212,090	223,011	231,682	236,340
Total Equity	201,631	212,090	223,011	231,682	236,340

Combined statements of cash flows

	Year ended 31 December 2010	Year ended 31 December 2011	Year ended 31 December 2012	9 months ended 30 September 2012	9 months ended 30 September 2013
				(Unaudited)	(Unaudited)
			EUR (thousands)
Net cash from operating activities	57,075	45,032	66,148	35,978	38,674
Net cash used in investing activities Net cash from (used in) financing	(51,988)	(74,436)	(69,313)	(75,974)	(19,464)
activities Foreign currency exchange differences on cash and cash	(17,681)	28,879	17,613	38,400	(24,683)
equivalents	704	(725)	555	321	(319)
Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the	(11,890)	(1,250)	15,003	(1,275)	(5,792)
beginning of the period	22,417	10,527	9,277	9,277	24,280
Cash and cash equivalents at the end of the period	10,527	9,277	24,280	8,002	18,488

Element	Disclosure requirement	Disclosure
		On 19 January 2011, the Cinema City Holding Group acquired Palace Cinemas, comprising 141 screens in 15 multiplexes in Hungary, Czech Republic and Slovakia. Cinema City Holding accounted for this acquisition as a business combination.
		In addition, the Cinema City Holding Group entered into a club financing agreement (the Club Financing Agreement) in December 2012 with Bank Zachodni WBK S.A., HSBC Bank plc, ING Bank ´ Sl˛aski S.A., and from February 2013, BNP Paribas. The total amount of the facilities made available to the Cinema City Holding Group under the Club Financing Agreement is EUR 210 million (which includes a EUR 70 million revolving credit line).
		IT 2004 (which is not a member of the Cinema City Holding Group) entered into a facilities agreement with Bank Hapoalim BM on 19 February 2013, which was amended on 25 February 2013 (the Israeli Facilities Agreement). The total amount of the facilities made available to IT 2004 under the Israeli Facilities Agreement is up to NIS 195 million, comprising a term loan of NIS 170 million, a working capital and guarantee facility of NIS 24 million and an overdraft facility of NIS 1 million.

Element	Disclosure requirement	Disclosure
		Save as set out above, there has been no significant change to Cinema City's financial condition and operating results during or after the period covered by the historical key financial information on Cinema City set out in this Element.
B.8	Selected key pro forma financial information	Selected pro forma financial information which illustrates the effect of the Rights Issue and the Combination on the Cineworld Group's net assets as if they had occurred on 26 September 2013 is set out below.
		The unaudited summary pro forma net assets statement has been prepared in a manner consistent with the accounting policies to be adopted by the Cineworld Group in preparing its financial statements for the 52 week period ending 26 December 2013 and on the basis set out in the notes below and in accordance with Annex II to the PD Regulation.
		The unaudited summary pro forma information has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not represent the Cineworld Group's actual financial position or results.

Unaudited pro forma statement of net assets as at 26 September 2013

							Adjustments
	Cineworld Group	Rights Issue	Subtotal	Cinema City Holding Group	Carve out of cinema related assets	Carve out of non- cinema related assets	Proceeds from debt drawdown	Acquisition of Cinema City Holding Group	Transaction costs	Summary Pro forma net assets of Enlarged Group
	Note 1	Note 2	Note 3	Note 4	Note 5	Note 6	Note 7	Note 8	Note 9
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
NON-CURRENT ASSETS
Property, plant and equipment	160.4	—	160.4	251.2	(81.4)	—	—	—	—	330.2
Other non current assets	267.4	—	267.4	119.9	—	(100.3)	—	318.8	—	605.8
TOTAL NON-CURRENT ASSETS	427.8	—	427.8	371.1	(81.4)	(100.3)	—	318.8	—	936.0
CURRENT ASSETS
Other current assets	34.6	—	34.6	23.5	—	—	—	—	—	58.1
Cash and cash equivalents	9.8	107.1	116.9	15.6	—	—	206.0	(284.2)	(18.0)	36.3
TOTAL CURRENT ASSETS	44.4	107.1	151.5	39.1	—	—	206.0	(284.2)	(18.0)	94.4
TOTAL ASSETS	472.2	107.1	579.3	410.2	(81.4)	(100.3)	206.0	34.6	(18.0)	1,030.4
CURRENT LIABILITIES
Interest bearing loans and
other financial liabilities	(27.1)	—	(27.1)	(11.6)	—	11.6	(15.1)	—	0.8	(41.4)
Other current liabilities	(55.7)	—	(55.7)	(26.6)	—	—	—	—	—	(82.3)
TOTAL CURRENT
LIABILITIES	(82.8)	—	(82.8)	(38.2)	—	11.6	(15.1)	—	0.8	(123.7)
NON-CURRENT LIABILITIES
Interest bearing loans and
other financial liabilities Other non current liabilities	(119.5) (71.9)	— —	(119.5) (71.9)	(166.5) (6.5)	— 1.4	166.5 —	(190.9) —	— —	3.2 —	(307.2) (77)

TOTAL NON-CURRENT
LIABILITIES	(191.4)	—	(191.4)	(173.0)	1.4	166.5	(190.9)	—	3.2	(384.2)
TOTAL LIABILITIES	(274.2)	—	(274.2)	(211.2)	1.4	178.1	(206.0)	—	4.0	(507.9)
TOTAL NET ASSETS	198.0	107.1	305.1	199.0	(80.0)	77.8	—	34.6	(14.0)	522.5

Notes:

The summary financial information of the Cineworld Group as at 26 September 2013 has been extracted without material adjustment from the historical financial information for the Cineworld Group as set out in Part VIII (Historical Financial Information Relating to Cineworld) of this document.
1. This adjustment reflects the receipt of the net proceeds of the Rights Issue by Qualifying Shareholders of 48.0 million shares at 230 pence per share. The net proceeds receivable by the Company are £107.1 million (£110.3 million gross proceeds less direct issue costs of £3.2 million) (exclusive of recoverable VAT). Cineworld intends to use the proceeds of the Rights Issue to fund, in part, the Combination.
1. This summary pro forma statement subtotal reflects the Cineworld Group immediately following the Rights Issue and assuming that the Rights Issue occurred on 26 September 2013. This summary pro forma subtotal is presented on the basis that no acquisition of Cinema City Holding Group has yet occurred.
1. The summary financial information of Cinema City as at 30 September 2013 has been derived from the historical financial information as set out in Part IX (Financial Information Relating to the Cinema City Business) of this document by retranslating the Euro figures presented into Sterling, consistent with the presentation of the Cineworld Group. The assets and liabilities have been individually translated using a Euro to Sterling exchange rate of 1.1872, which reflects the Bank of England closing rate as at 26 September 2013.
1. Before Completion, certain cinema-related assets, amounting to £80 million (net of deferred tax liabilities amounting to £1.4 million), will be assigned by the Cinema City Holding Group to a related company which is a wholly owned subsidiary of CCI. These assets will not be acquired by Cineworld as part of the Combination, though they will be leased back to the cinemas operated by Cinema City Holding Group's wholly owned subsidiaries. The assets have been individually translated using a Euro to Sterling exchange rate of 1.1872, which reflects the Bank of England closing rate as at 26 September 2013.
1. Before Completion, loans receivable from related parties amounting to £99.3 million (including accrued interest of £2.7 million); external interest bearing bank loans totalling £178.1 million (split between £11.6 million current and £166.5 million non-current bank loans) and certain other assets including a deferred tax asset of £1.0 million net £77.8 million will be assigned by the Cinema City Holding Group to CCI. These assets and liabilities will not be acquired by Cineworld as part of the Combination, with the external interest bearing bank loans being settled by CCI using proceeds from the sale of the Cinema City Holding Group. (The assets and liabilities have been individually translated using a Euro to Sterling exchange rate of 1.1872, which reflects the Bank of England closing rate as at 26 September 2013.)
1. This adjustment reflects the receipt of the net proceeds of the current and non-current debt draw down on completion of £341.8 million. The debt drawn down comprises of £304.8 million of senior club debt and £37.0 million of revolving credit facility. The proceeds presented of £206.0 million reflect the gross draw down of £341.8 million less the settlement of the existing Cineworld debt of £135.8 million present in the 26 September 2013 balance sheet.
1. This adjustment reflects the acquisition of Cinema City Holding Group by Cineworld Group. The consideration payable to CCI for the acquisition of Cinema City Holding Group will consist of the issue of Consideration Shares in the Cineworld Group equivalent to 24.9 per cent. of the Ordinary Shares in issue, immediately subsequent to the issue of Consideration Shares, together with a cash payment of £272.0 million plus A14.5 million (£12.2 million) in respect of the Cinema City Holding Group cash balance as at 30 September 2013, as described on page 47 of this document. The fair value of the issue of the Consideration Shares is anticipated to be £231.4 million (being the issue of 65.6 million shares at a Theoretical Ex-Rights Price (TERP) of 353 pence per share). The premium paid of 326.2 million to acquire control of the Cinema City Holding Group has been allocated to Goodwill.

The goodwill generated on acquisition reflects total consideration of £503.4 million plus £12.2 million in respect of the Cinema City Holding Group cash balance less net assets acquired of £189.4 million (being the total net assets of the Cinema City Holding Group of £199.0 million less the carved out cinema related assets of £80.0 million plus carve out of the non-cinema related assets and liabilities of £77.8 million less the Cinema City Holding Group goodwill eliminated on acquisition of £7.4 million)) is presented as part of the pro forma goodwill of the Enlarged Group of £562.4 million. The balance presented of £318.8 million reflects the total goodwill of £326.2 million less the Cinema City Holding Group goodwill of £7.4 million. The goodwill balance created on acquisition has not yet been analysed and presented in accordance with IFRS 3 Business Combinations. The Cineworld Group expects to undertake a fair value exercise following Completion to enable the Cineworld Directors to identify individual intangible assets and make any fair value adjustments required.

This adjustment reflects the total transaction costs of £18.0 million incurred solely by the Cineworld Group as part of the Combination and the related work performed. Of these costs, £14.0 million relate solely to the cost of acquiring Cinema City Holding Group and have therefore been presented in equity as they would be expensed in accordance with IFRS 3, Business Combinations. The remaining costs of £4.0 million directly relate to the securing of the senior club debt facilities summarised in Note 7 above. In accordance with IAS 39 Financial Instruments: Recognition and Measurement these have been presented net against the gross current and non-current debt drawn down in Note 7 as prepaid interest costs and will be amortised over the five-year term of the debt.

The Cineworld Directors believe that, had the Transaction occurred at the beginning of the last financial period, the earnings of the Enlarged Group would have been affected. Assuming that the revised funding structure and additional asset leases were in place on 27 December 2012, the main impacts would have been to: increase the finance costs associated with the loans; increase property rental costs; and reduce depreciation with a corresponding net decrease in earnings before taxation.

This summary pro forma statement of net assets does not constitute financial statements within the meaning of section 434 of the Companies Act 2006.

No adjustment has been made to reflect the trading results of Cineworld since 26 September 2013 or of Cinema City since 30 September 2013 or any other change in the financial positions of either Cineworld or Cinema City in these respective periods.

Element	Disclosure requirement	Disclosure
B.9	Profit forecast and estimate	Not applicable. Neither Cineworld nor Cinema City has made a profit forecast or estimate.
B.10	Qualifications in the audit reports	Not applicable. The audit reports on the historical financial information contained in, or incorporated by reference into, this document are not qualified.
B.11	Insufficient working capital explanation	Not applicable. Cineworld is of the opinion that, after taking into account existing available facilities and the net proceeds of the Rights Issue, the working capital available to the Cineworld Group is sufficient for its present requirements, that is for at least the next 12 months from the date of publication of this document.
		Cineworld is of the opinion that, after taking into account the net proceeds of the Rights Issue, the Debt Financing and the bank and other facilities available to the Enlarged Group, the working capital available for the Enlarged Group is sufficient for its present requirements, that is for at least the next 12 months from the date of publication of this document.

	Section C—Securities
Element	Disclosure requirement	Disclosure
C.1	Type and the class of the securities	Cineworld will issue 47,965,465 ordinary shares of one pence each in the capital of Cineworld pursuant to the Rights Issue and ordinary shares of one pence each representing 24.9 per cent of the capital of Cineworld immediately following Admission of the Consideration Shares as consideration for the Combination. The ISIN for the New Ordinary Shares is GB00B15FWH70.
C.2	Currency of the securities issue	The New Ordinary Shares are priced in Pounds Sterling, and will be quoted and traded in Pounds Sterling.
C.3	Shares issued/value per share	As at the Latest Practicable Date the Company has in issue 149,892,079 fully paid shares of one pence each.
C.4	Description of the rights attaching to the securities	The Rights Issue Shares and the Consideration Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares in issue at the time they are issued, including in relation to any dividends or other distributions. Subject to any special rights, restrictions or prohibitions as regards voting for the time being attached to any Ordinary Shares (for example, in the case of joint holders of a share, the only vote which will count is the vote of the person whose name is listed before the other voters on the register for the share), Shareholders shall have the right to receive notice of and to attend and vote at general meetings of Cineworld. Subject to the provisions of the Companies Act 2006, Cineworld may from time to time declare dividends and make other distributions on the Ordinary Shares. Shareholders are entitled to participate in the assets of Cineworld attributable to their shares in a winding-up of Cineworld or other return of capital, but they have no rights of redemption.
C.5	Restrictions on free transferability of the securities	Not applicable; there are no restrictions on the free transferability of the Ordinary Shares.

Element	Disclosure requirement	Disclosure
C.6	Admission/regulated markets where the securities are traded	Application will be made to the UKLA and to the London Stock Exchange for the Rights Issue Shares and the Consideration Shares to be admitted to the Official List and to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission of the Rights Issue Shares and Admission of the Consideration Shares will become effective on 30 January 2014 and in March 2014, respectively, and that dealings in the Rights Issue Shares (nil paid) and (without prejudice to the lock-up agreement refered to in Section E.5 of this summary) the Consideration Shares will commence on 30 January 2014 and in March 2014, respectively.
C.7	Dividend policy	For FY 2012, the Company paid a dividend of 11.8 pence per share (2011: 11.0 pence per share), a 7.3 per cent. increase on the level in 2011. For the 26 week period ended 27 June 2013, the Company has paid an interim dividend of 4.1 pence per share (2012: 3.8 pence per share), representing a 7.9 per cent. increase on the 2012 payment. Reflecting the confidence that the Board has in the benefits of the Combination and the cash generative potential of the Enlarged Group, it is intended that, following Completion, the Enlarged Group will maintain its existing dividend policy, underpinned by the future prospects of the Enlarged Group.

Section D—Risks
Element	Disclosure requirement	Disclosure
D.1	Key information on the key risks that are specific to the Company or its industry	• Cineworld, Cinema City and, following the Combination, the Enlarged Group depend on their continued ability to license films and on the availability, diversity, quantity, appeal and performance of available films, as most of their revenue is generated by box office sales.
		• The ability of Cineworld, Cinema City and, following the Combination, the Enlarged Group to license films largely depends on maintaining good relations with major film distributors and studios, as this affects their ability to negotiate commercially favourable terms for first-run films or arrangements to distribute films. The timing of releases is also determined by film distributors, which can adversely impact on box office and retail revenue if there is limited content during key periods or if certain films underperform due to competing films being released or other events being held in the same period.
		• Any reduction to or elimination of the cinema ''release window'' for films could increase the attractiveness of alternative film delivery methods, reduce cinema admissions, limit the prices cinemas can charge for admission and decrease the box office revenue of Cineworld, Cinema City and, following the Combination, the Enlarged Group.
		• Any reduction in revenue from retail sales due to falling admissions or changes in consumer preferences, decreased disposable income or other economic and cultural factors could have a material adverse effect on the business and results of operations of Cineworld, Cinema City and, following the Combination, the Enlarged Group.
		• Competition from other leisure and entertainment attractions and major cultural or sporting events may decrease the box office revenue of Cineworld, Cinema City and, following the Combination, the Enlarged Group.
		• An increase in piracy of films may decrease the box office revenue of Cineworld, Cinema City and, following the Combination, the Enlarged Group or adversely affect relationships with distributors.

Element	Disclosure requirement	Disclosure
		• The Enlarged Group's industry is highly competitive. The Enlarged Group may face competition, both actual and potential from national, regional or independent cinema operators in the various territories in which it operates, which could affect its ability to acquire attractive cinema sites or cinemas, attract customers or license films.
		• Cineworld, Cinema City and, following the Combination, the Enlarged Group are subject to uncertainties relating to future expansion plans, including competition for and access to the most attractive sites, the market potential of new cinemas, and potential delays in opening new or acquired cinemas.
		• Completion is conditional upon (i) the passing of the Resolution; (ii) CCI Shareholder approval for the sale and purchase of the shares in Cinema City Holding; (iii) receipt of the relevant clearance from the Polish antitrust authorities; (iv) completion of the Reorganisation (other than the entering into of the Relevant Leases); and (v) receipt of the proceeds of the Rights Issue, and those conditions may not be satisfied (or waived, where capable of being waived). As the Rights Issue is not conditional on the Completion, the Rights Issue may complete while the Combination does not. In this event, the Cineworld Directors' current intention is that the proceeds of the Rights Issue will be applied to reducing the Company's net indebtedness on a short-term basis while the Cineworld Directors evaluate alternative uses of the funds. If no such uses can be found, the Cineworld Directors will consider how best to return surplus capital to Shareholders. Such a return could carry fiscal costs for certain Shareholders, will have costs for Cineworld and would be subject to applicable securities laws. • The Enlarged Group may experience difficulties in integrating the existing businesses carried on by Cineworld and by Cinema City, in
		particular because of the substantial increase in the scale of the combined operations and the operational complexity of the Enlarged Group.
D.3	Key information on the key risks that are specific to the securities	• The value of an investment in New Ordinary Shares may be subject to significant fluctuations due to a change in sentiment in the market regarding these securities, resulting in a decline in the market price of the New Ordinary Shares. • Existing Shareholders may, pursuant to the Rights Issue, and will, pursuant to the Combination, suffer a reduction in their proportionate ownership and voting rights in Cineworld due to the issue of the New Ordinary Shares, with the effect that the percentage that their Ordinary Shares will represent of the total share capital in Cineworld will be reduced accordingly.
		• The ability of Overseas Shareholders to bring actions or enforce judgments against the Enlarged Group or its directors or officers may be limited.

Section E—Offer
Element	Disclosure requirement	Disclosure
E.1	Total net proceeds and costs of the issue	The total net proceeds of the Rights Issue amount to approximately £107.1 million. The total costs, charges and expenses (including fees and commissions) (exclusive of recoverable VAT) payable by the Company in connection with the Rights Issue amount to approximately £3.2 million and in connection with the Combination are estimated to amount to approximately £14.8 million. The Company intends to pay for all expenses arising from, or in connection with, the Rights Issue. There are therefore no expenses to be charged to investors by the Company.

Element	Disclosure requirement	Disclosure
E.2a	Reasons for the Rights Issue/use of the proceeds	It is intended that the proceeds of the Rights Issue will be used towards financing the Combination, subject to certain conditions being met. If the Combination completes, the consideration to be received by CCI on completion will consist of:
		£272,000,000 in cash(1); and •
		• Consideration Shares,
		representing an enterprise value on a debt free/cash free basis of £503.4 million. In addition, CCI will also receive on Completion under the terms of the Combination:
		A14,488,000 in cash(2); and •
		the Earnings Consideration.(3) •
		1. Assuming no repayment or prepayment since 1 October 2013 under the Club Financing Agreement or the Israeli Facilities Agreement.
		2. Reflects the amount of cash and cash equivalents as at 30 September 2013 less A3,470,000 and A530,000 which were paid by a member of the Cinema City Holding Group or IT 2004 in respect of the Remaining Cinema City Group's acquisition of Ronson N.V. and the acquisition of certain land interests in Poland, in each case after 30 September 2013. A locked box mechanism has been and will be in place from (and including) 1 October 2013 to (and including) Completion, designed to prevent such cash and cash equivalents from ''leaking out'' of the Cinema City Holding Group to the Remaining Cinema City Group.
		3. The Earnings Consideration is an amount equal to: (i) A25,900,000 if Completion occurs in or before February 2014; and (ii) A28,900,000 if Completion occurs in or after March 2014; representing 75 per cent. of the forecast accumulated adjusted earnings of the Cinema City Business from (and including) 1 October 2013 to (and including) the date of Completion (assuming a February or March Completion, respectively).
		Following Completion, the Earnings Consideration is subject to a true-up adjustment based on 100 per cent. of the actual accumulated adjusted earnings of the Cinema City Business from (and including) 1 October 2013 to (and including) the date of Completion.
		The Combination will be funded through:
		• £107.1 million from the proceeds of the Rights Issue (net of expenses);
		• £240 million and A192 million from the Debt Financing, of which amounts will be drawn to: (i) fund, in part, cash consideration payable to CCI; (ii) refinance certain existing indebtedness of Cineworld and Cinema City; and (iii) for general working capital purposes; and
		• the issue of the Consideration Shares with an aggregate value of £231.4 million, based on the Theoretical Ex-Rights Price of 353 pence implied by the Closing Price of 392 pence per Existing Ordinary Share on 9 January 2014 (being the latest Business Day prior to announcement of the Rights Issue) and assuming no Ordinary Shares other than the Rights Issue Shares are issued prior to Completion.
		In the event that Admission of the Rights Issue Shares is effected but Completion does not occur, the Cineworld Directors' current intention is that the proceeds of the Rights Issue will be applied to reducing the Company's net indebtedness on a short-term basis while the Cineworld Directors evaluate alternative uses of the funds. If no such uses can be found, the Cineworld Directors will consider how best to return surplus capital to Shareholders. Such a return could carry fiscal costs for certain Shareholders, will have costs for Cineworld and would be subject to applicable securities laws.

Element	Disclosure requirement	Disclosure
E.3	Terms and conditions of the Rights Issue	The Company proposes to raise gross proceeds of approximately £110.3 million through the Rights Issue. The Rights Issue Shares are being offered by way of rights to all Qualifying Shareholders on the basis of 8 Rights Issue Shares at 230 pence per Rights Issue Share for every 25 Existing Ordinary Shares held and registered in their name at the close of business on the Record Date.
		Qualifying Shareholders with fewer than 4 Existing Ordinary Shares at the close of business on the Record Date will not receive any Rights Issue Shares. The Rights Issue Price of 230 pence per Rights Issue Share represents a discount of approximately 41.3 per cent. to the Closing Price of an Existing Ordinary Share of 392 pence on 9 January 2014 (being the latest Business Day prior to the announcement of the Rights Issue) and a 34.8 per cent. discount to the Theoretical Ex-Rights Price based on that Closing Price.
		The Rights Issue Shares will rank for all dividends declared, made or paid after the date of allotment and issue of the Rights Issue Shares and otherwise pari passu with the Existing Ordinary Shares. Application will be made to the UKLA and to the London Stock Exchange for the New Ordinary Shares (nil and fully paid) to be admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities.
		Fractions of Rights Issue Shares will not be allotted to any Qualifying Shareholders, but will be aggregated and sold in the market, ultimately for the benefit of the Company.
		The offer of Nil Paid Rights, Fully Paid Rights and/or New Ordinary Shares to persons resident in, or who are citizens of, or who have a registered address in countries other than the United Kingdom may be affected by the laws of the relevant jurisdiction. Those persons should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their rights.
		Qualifying Non-CREST Shareholders with registered addresses in the United States or in any of the other Excluded Territories will not be sent Provisional Allotment Letters and will not have their CREST stock accounts credited with Nil Paid Rights, except where the Company and the Underwriters are satisfied that such action would not result in the contravention of any registration or other legal or regulatory requirement in such jurisdiction.
		The Company has arranged for the Rights Issue to be underwritten in full to provide certainty as to the amount of capital to be raised. The Underwriting Agreement is not subject to any right of termination after Admission of the Rights Issue Shares (including in respect of any statutory withdrawal rights).
		The Rights Issue is conditional on, among other things, (i) the approval of the Resolution at the General Meeting; (ii) Admission of the Rights Issue Shares becoming effective by not later than 8.00 a.m. on 30 January 2014 (or such later time and/or date (not later than 13 February 2014) as the parties to the Underwriting Agreement may agree); and (iii) the Underwriting Agreement becoming unconditional in all respects (save for the condition relating to Admission of the Rights Issue Shares) and not having been terminated in accordance with its terms prior to Admission of the Rights Issue Shares.
E.4	Interests that are material to the issue/ conflicting interests	Not applicable. There are no interests (including conflicts of interest) which are material to the Rights Issue or the Combination.

Element	Disclosure requirement	Disclosure
E.5	Name of the offeror/	Cineworld Group plc.
lock-up agreements	CCI has agreed not to sell any Ordinary Shares for a period of 12 months following Completion subject to customary carve-outs. After that initial period, CCI will be permitted to sell Ordinary Shares provided that, where reasonably practicable, CCI has consulted with and considered the reasonable views of the Chairman or the Senior Independent Director of the Company.
E.6	Dilution	A Qualifying Shareholder who sells or otherwise elects not to take up its, his or her Nil Paid Rights will experience a 24.2 per cent. dilution (i.e. its, his or her proportionate interest in the Company will drop by 29.2 per cent.) if the Rights Issue completes, and a total dilution of 43.1 per cent. if both the Rights Issue and the Combination complete (assuming that no Ordinary Shares other than the Rights Issue Shares are issued prior to Completion).
		Those Qualifying Shareholders who are permitted to, and do, take up all of their rights to the Rights Issue Shares provisionally allotted to them in full will suffer dilution of up to 24.9 per cent. in their interests in the Company as a consequence of the issue of the Consideration Shares in connection with the Combination (assuming that no Ordinary Shares other than the Rights Issue Shares are issued prior to Completion).
E.7	Estimated expenses charged to the investor	Not applicable. There are no commissions, fees or expenses to be charged to investors by the Company.

RISK FACTORS

Any investment in Cineworld and the New Ordinary Shares carries a number of risks. Prospective investors should review this prospectus carefully and in its entirety (together with any documents incorporated by reference into it) and consult with their professional advisers before acquiring any New Ordinary Shares. You should carefully consider the risks and uncertainties described below, together with all other information in this document and the information incorporated into this document by reference, before making any investment decision. Prospective investors should note that the risks relating to the Cineworld Group, its industry and the New Ordinary Shares summarised in the section of this document headed 'Summary' are the risks that the Board believes to be most essential to an assessment by a prospective investor of whether to consider an investment in the New Ordinary Shares.

A number of factors affect the operating results, financial condition and prospects of each of Cineworld and Cinema City and, following completion of the Combination, will affect the Enlarged Group. This section describes risk factors considered to be material in relation to the Cineworld Group and the Cinema City Business as discrete groups based on information known at the date of this document. Each of these risks will continue to be relevant to the Enlarged Group following completion of the Combination.

However, these should not be regarded as a complete and comprehensive statement of all potential risks and uncertainties. Additional risks and uncertainties that are not presently known, or which are currently deemed immaterial, may also have an adverse effect on Cineworld's and Cinema City's and, following completion of the Combination, the Enlarged Group's operating results, financial condition or prospects. If any such risks were to materialise, the price of the Ordinary Shares could decline as a consequence and investors could lose all or part of their investment.

The information given is as of the date of this document and, except as required by the FCA, the London Stock Exchange, the Listing Rules, the Prospectus Rules or any other applicable law, will not be updated. Any forwardlooking statements are made subject to the reservations specified under 'Forward-Looking Statements' on pages 32-33 of this document.

RISKS RELATING TO THE BUSINESS AND INDUSTRY IN WHICH CINEWORLD AND CINEMA CITY OPERATE AND, FOLLOWING THE COMBINATION, THE ENLARGED GROUP WILL OPERATE

Cineworld and Cinema City depend and, following the Combination, the Enlarged Group will depend, on third party film production and performance.

Most of the revenue of Cineworld and Cinema City is generated by box office sales, which represented approximately 70.6 per cent. (excluding Picturehouse, which was acquired in December 2012) and approximately 59.1 per cent. of the revenue of Cineworld and Cinema City, respectively, in FY 2012. Cineworld and Cinema City license newly released, first-run films and, as a result, their business and results of operations depend heavily on their continued ability to license films, and the availability, diversity, quantity, appeal and performance of available films in the markets in which Cineworld and Cinema City operate.

The revenue generated by Cineworld and Cinema City from box office sales may be materially adversely affected by a number of factors relating to the films they offer, including:

there being fewer or no major films to drive cinema attendance;
a major film being released late or not performing at the box office in line with expectations;
disruption in the production of films;
a reduction in the marketing efforts of the major studios and distributors;
major films being released at the same time as competing films or other events; or
major films not being released during the key summer and year-end holiday seasons or, in the case of children's films, during the school holidays.

The occurrence of some or all of these events could have a material adverse effect on the business and results of operations of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

In addition, a significant change in the type and breadth of motion pictures offered by film studios may adversely affect attendance levels of various demographic bases of the film-going audience, which could have an adverse effect on the business and results of operations of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Furthermore, the availability of local film product plays an increasingly important role in box office success in the countries in which Cinema City operates. Lack of locally produced films could have a material adverse effect on the business and results of operations of Cinema City and, following the Combination, the Enlarged Group.

Cineworld and Cinema City are and, following the Combination, the Enlarged Group will be, largely dependent on third party film distributors (for all of Cineworld's films, and some of Cinema City's films) and on existing distribution agreements between film studios and their own distributors (in the case of Cinema City) to license films.

Cineworld and Cinema City rely and, following the Combination, the Enlarged Group will rely on other third party distributors of films, over whom they have no control, to obtain the rights to, in the case of Cineworld, all or, in the case of Cinema City, some of the films that they exhibit. The film distribution business is dominated by a number of Hollywood film studios. As a result, the businesses of Cineworld, Cinema City and, following the Combination, the Enlarged Group need to maintain good relations with major studio film distributors.

Film distributors license films to cinema operators, including Cineworld and Cinema City, on a territory-by-territory and, in the case of Cinema City, also on a film-by-film basis. Cineworld, Cinema City and, following the Combination, the Enlarged Group may not be able to negotiate favourable terms or reach agreement on terms for such agreements, particularly if the relationship with major international film distributors deteriorates. If Cineworld, Cinema City and, following the Combination, the Enlarged Group are unable to obtain a licence from one or more major film distributors for a particular territory or to do so on favourable terms, or if one or more licences is terminated, it could have a material adverse effect on their results of operations.

Cinema City engages in film distribution through its Forum Film brand in all the countries in which it operates. In all of its countries of operation, except for the Czech Republic, Poland and Slovakia, Forum Film acts as the exclusive motion picture distributor for the Walt Disney Company. In all of its countries of operation (other than the Czech Republic and Slovakia) Forum Film also acts as the exclusive film distributor for MGM. In the Czech Republic and Slovakia, MGM gives Forum Film exclusive distribution rights to certain films on a case-by-case basis. In Israel, Forum Film also serves as a sub-distributor of Sony Pictures and Fox Studios on behalf of AD Matalon and, in Bulgaria, Forum Film also distributes titles released by Paramount and Universal Studios. If Cinema City's or, following the Combination, the Enlarged Group's film distribution business is unable to maintain its existing arrangements to distribute films for these studios or replace such relationships with similar arrangements with other film studios, it could have a material adverse effect on their results of operations.

Any reduction to or elimination of the ''release window'' could increase the attractiveness of alternative film delivery methods and may decrease the box office revenue of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

If film studios reduce or eliminate the ''release window'' (the period between the film being released at the cinema and the film being released through other distribution channels), which varies from country-to-country and film-to-film, this could lead to increased competition from alternative film delivery methods, such as network, rental, cable and satellite television, in-home television (2D and 3D), DVDs and Blu-Ray, video-on-demand, pay-per-view services, streaming and downloads via the internet for Cineworld, Cinema City and, following the Combination, the Enlarged Group. In particular, competition from internet downloads may increase as broadband technology improves and downloading speeds increase. The continued development of existing and new technology may also introduce new competitive forces for the film-going audience.

Any reduction in, or elimination of, the release window which leads to increased competition from these alternative film delivery methods could reduce cinema admissions, limit the prices cinemas can charge for admission and adversely affect the box office sales of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Revenue from retail sales is an important contributor to the profits of Cineworld and Cinema City and, following the Combination, will be an important contributor to the profits of the Enlarged Group.

Retail sales of food and drink represent the largest source of revenue after box office receipts for Cineworld, Cinema City and, following the Combination, the Enlarged Group. Retail sales generally fluctuate in line with admissions, and attendance may not increase or may not be maintained at the current level. Moreover, retail spend per head may decrease due to changes in consumer preferences, decreased disposable income or other economic and cultural factors, such as the perceived disparity between the price at which such items are sold in cinemas as compared to external vendors, which are often located in close proximity to cinemas. In addition, if any of the governments in the territories in which Cineworld, Cinema City or, following the Combination, the Enlarged Group is active chooses to, as a result of public concerns over diet and health issues, implement restrictions on the marketing, advertising, sale or consumption of the food and drink that are sold in cinemas (for example, restrictions on portion size), this could lead to a decline in retail sales. A decrease in retail revenue could have a material adverse effect on the business and results of operations of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Competition from other leisure and entertainment attractions and events may decrease the box office revenue of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Cinemas compete for customers against other leisure and entertainment attractions, including television, theatre, concerts, amusement parks, sporting events, restaurants and other family or social leisure attractions. If these activities improve in value, frequency or attractiveness, or the ageing of the population and changes in fashions and tastes increase the attractiveness of such activities, the share of the public's leisure time and disposable income spent at the cinema could decrease, resulting in lower attendances and lower retail sales and, as a result, box office sales and other associated revenues of Cineworld, Cinema City and, following the Combination, the Enlarged Group could be negatively affected. In addition, if there is any reduction in consumer confidence or in levels of disposable income in general, this may affect the choices that consumers make between the leisure and entertainment attractions on offer, leading to increased competition.

In addition, cinemas also face competition from major cultural or sporting events. For example, in FY 2012, Cineworld's results of operations during the summer season were adversely impacted by the London Olympics. The occurrence of such events in the territories in which Cineworld, Cinema City and, following the Combination, the Enlarged Group are active could have a negative effect on the box office sales and other associated revenues of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

An increase in piracy of films may decrease the box office revenue of Cineworld, Cinema City and, following the Combination, the Enlarged Group or adversely affect relationships with distributors.

The cinema business is subject to piracy. An increase in piracy of films may decrease cinema admissions and reduce ticket prices. This risk is becoming greater as a result of technological advances, which have improved the quality of copies pirated by recording from a cinema screen. An increase in the availability, popularity and quality of pirated films may result in film studios reducing their investment in films, resulting in the release of fewer films and lower quality films with less commercial appeal, or the use of alternative delivery channels, such as digital downloads, which could adversely affect cinema admissions. In addition, if Cineworld, Cinema City or, following the Combination, the Enlarged Group are judged by distributors not to have taken reasonable measures to prevent piracy, this could adversely affect their relationships with distributors.

An increase in piracy could therefore materially adversely affect the business and results of operations of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

The business of Cineworld and Cinema City is and, following the Combination, the business of the Enlarged Group will be subject to significant competitive pressures.

Cineworld's and Cinema City's cinemas are subject to competition in the geographic areas in which they operate. Competitors may be national, regional or independent cinema operators. Competition among cinema companies arises in the following areas:

Acquiring attractive cinema sites. Cineworld and Cinema City compete with other cinema operators and other businesses in their efforts to locate and acquire attractive sites for their cinemas. It has been Cinema City's strategy to build modern multiplexes to service the under developed CEE cinema industries where multiplex screen density and/or penetration is relatively low. However, these under developed cinema industries could be equally inviting to existing competitors or new entrants. Competitors have built or may be planning to build cinemas in certain areas where Cineworld and Cinema City operate, which could result in excess capacity and increased competition for customers. Competition for new and desirable sites is strong and Cineworld and Cinema City cannot and, following the Combination, the Enlarged Group will not be able to, prevent competing cinema operators from opening cinemas that may reduce their attendance levels.
Acquiring cinemas. Each of Cineworld and Cinema City experience competition from other cinema operators when targeting new cinemas, and may not be able to acquire such cinemas at reasonable prices or do so on favourable terms. As a result, Cineworld, Cinema City and, following the Combination, the Enlarged Group may not succeed in acquiring cinemas or may have to purchase cinemas on comparatively unfavourable terms.
Attracting customers. The competition for customers is dependent upon factors such as the location (including the size and demographics of the catchment area) and number of cinemas, screens and seating capacity in a given market, the type of screens (including 3D or super-sized screens equivalent to IMAX screens), pricing, the popularity of films screened, film showtimes availability, customer service quality and the comfort and quality of the cinemas (including quality of projection and sound equipment). Cineworld's and Cinema City's competitors have sought to increase the number of screens that they operate or use pricing or promotions to attract customers away from Cineworld's and Cinema City's cinemas.
Licensing films. Cineworld believes that the principal competitive factors with respect to film licensing include licensing terms, number of screens available for a particular film, revenue potential, the location and condition of an operator's cinemas and demographics. Any material consolidation of competitors could weaken the negotiating position with distributors of Cineworld, Cinema City and, following the Combination, the Enlarged Group. Cinema operators with operations in more markets, or with more screens in a particular market, than Cineworld, Cinema City and, following the Combination, the Enlarged Group, may be able to leverage their scale to obtain more favourable licensing terms.

If Cineworld, Cinema City and, following the Combination, the Enlarged Group are unable to compete effectively with their competitors, it could have a material adverse effect on their business and results of operations.

Cineworld and Cinema City are and, following the Combination, the Enlarged Group will be subject to uncertainties relating to future expansion plans.

Cineworld's and Cinema City's strategy includes expanding operations through new openings and the acquisition of existing cinemas, with Cineworld planning to open at least a further 169 screens in the UK and Ireland by the end of 2017 and Cinema City's development plan for the next three years including the opening of 377 screens in Poland, Bulgaria, Romania and Israel. This is subject to various risks and uncertainties.

The availability of attractive locations for new openings and the opportunities for the acquisition of existing cinemas are subject to factors that are beyond Cineworld's, Cinema City's and, following the Combination, the Enlarged Group's control. These include local conditions (such as availability of space or increase in demand for real estate, demographic changes and changes in planning laws) and competition. Even if Cineworld, Cinema City and, following the Combination, the Enlarged Group identifies and secures suitable opportunities, there are a number of associated risks, including construction overruns, difficulties experienced by developers with whom cinema exhibitors typically partner in financing the project, unanticipated expenses relating to planning or other laws, long lead times and delays and/or non-completion or abandonment of a project. Cinema City has entered into various lease arrangements for new cinemas in Romania, Israel, Poland and Bulgaria for which construction has either not yet commenced or is still in progress. Before or during such construction, developers could suffer difficulties such as a lack of available financing, which could result in delays, non-completion or abandonment of the project. Even if these cinemas are not completed and opened, Cinema City could still incur expenses in relation to them. Any of the foregoing could lead to delays in achieving revenues from such a project or site and/or increase costs significantly.

Moreover, the market potential of new cinemas cannot be precisely determined, and newly opened cinemas may not perform as expected. Cineworld, Cinema City and, following the Combination, the Enlarged Group may select the wrong location for the opening of one or more new cinemas, which could result in lower than expected returns. Moreover, if the construction of one or more cinemas is deficient, it could adversely affect Cineworld's, Cinema City's and, following the Combination, the Enlarged Group's reputation and brands.

New cinema developments are governed by local government planning policies. Any failure to gain any required planning permissions, including as a result of planning policies to protect greenfield sites, to support urban regeneration, to encourage the use of public transport, or otherwise, may impact the ability of Cineworld, Cinema City and, following the Combination, the Enlarged Group to continue to expand their portfolio of sites, limit the construction of additional capacity and give rise to rent increases in respect of sites in such locations.

Any of the foregoing could restrict the ability of Cineworld, Cinema City and, following the Combination, the Enlarged Group to fulfil their expansion strategy successfully, which could have a material adverse effect on their business and results of operations.

Advertising revenues contribute to the profits of Cineworld and Cinema City and, following the Combination, will contribute to the profits of the Enlarged Group.

Advertising revenues account for a portion of the profits of Cineworld, Cinema City and, following the Combination, the Enlarged Group. Advertising revenue is partially linked to the level of admissions and the number of cinemas, and as such may decrease in the event that admissions do not meet a specified threshold. Advertising revenue may also be affected by overall demand for advertising and competitive pressure for a share of advertising budgets. Any substantial decline in the advertising revenue of Cineworld, Cinema City and, following the Combination, the Enlarged Group could have a material adverse effect on their business and results of operations.

Cinema City is and, following the Combination, the Enlarged Group will be exposed to foreign currency exchange rate risk that could affect results of operations and comparability of results between financial reporting periods.

Cinema City's and, following the Combination, the Enlarged Group's business operations are subject to risks associated with fluctuations in currency exchange rates, with a large portion of Cinema City's revenue, assets and liabilities being denominated in currencies other than Pounds Sterling, including the euro, US dollar, Israeli shekel, Polish złoty, Hungarian forint, Bulgarian lev, Romanian leu and Czech koruna. Changes in exchange rates will affect the value of the reported earnings and the value of those assets and liabilities denominated in foreign currencies, and may also impact on operating expenses where such operating expenses are in a currency other than that in which financing is obtained or those in which revenue is generated.

Cineworld and Cinema City rely and, following the Combination, the Enlarged Group will rely on key members of their senior management.

Cineworld and Cinema City benefit from senior management teams with many years of experience in the cinema industry in the United Kingdom and Ireland (in the case of Cineworld) and throughout CEE and Israel (in the case of Cinema City). In addition, under the terms of the distribution arrangements with the Walt Disney Company to which Forum Film entities in Hungary, Israel, Romania and Bulgaria are parties, the Walt Disney Company has the right to terminate the relevant local agreement if Moshe Greidinger ceases to be directly involved in Forum Film's business in that country. A loss of one or more of the members of these management teams without adequate replacement could therefore have a material

adverse effect on the business of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Profitability may be reduced due to increases in labour and energy costs or other overheads.

Cineworld's and Cinema City's operating costs include labour and energy costs as well as other overheads. These costs may increase more than management currently anticipates due, for example, to an increase in the level of the mandatory minimum wage; political pressure on employers to introduce a so-called living wage (a voluntary higher minimum wage for the lowest-paid employees), as is case in the United Kingdom; or increased market fluctuations in the price of gas and electricity which have increased significantly in recent years in all the countries in which Cineworld and Cinema City operate. If the cost of energy or labour were to rise further, it could have a material adverse effect on the business and results of operations of Cineworld, Cinema City and, following the Combination, the Enlarged Group, particularly if they are not able to implement measures to mitigate such cost in each of the countries in which Cinema City operates and any increase in Cinema City's overhead costs associated with its distribution business could reduce its profit margin accordingly.

Abnormal, severe or unseasonable weather conditions may adversely affect the results of operations of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Historically, cinema admissions have been affected by periods of abnormal, severe or unseasonable weather conditions. For example, the United Kingdom experienced an unusually hot summer in 2013 and Poland experienced an extreme winter from late 2011 through to early 2012 which adversely impacted Cineworld's and Cinema City's respective admissions and revenue. Prolonged abnormal, severe or unseasonable weather that coincides with the release of a major film could adversely affect admissions and hence box office and retail sales.

Cineworld, Cinema City and, following the Combination, the Enlarged Group may not realise the expected benefits from planned operational improvements or revenue enhancing capital expenditure initiatives.

In order to improve the efficiency of operations, Cineworld and Cinema City have implemented and continue to implement certain operational improvement initiatives, including a more sophisticated approach to content scheduling, ticket price strategy changes and energy saving initiatives, for example the digital conversion of Cineworld's and Cinema City's respective projection systems. Furthermore, Cineworld and Cinema City have invested and plan to continue to invest in revenue enhancing capital expenditure, including extending the respective cinema chains through new openings and expanding premium auditorium offerings. Cineworld, Cinema City and, following the Combination, the Enlarged Group cannot give any assurance that the level of expected cost savings or revenue increases will be realised or that the operating performance will improve as a result of past, current and planned operational improvement and revenue enhancing capital expenditure initiatives. Cineworld and Cinema City may also be subject to significant cost increases beyond their control, such as increases in statutory minimum wage requirements, film rental costs, rent reviews, energy prices or the cost of goods sold, which may cancel out or even exceed any benefits from operational improvements and capital expenditure initiatives.

Cineworld, Cinema City and, following the Combination, the Enlarged Group may be subject to more merger approvals in connection with future acquisition opportunities.

In light of Cineworld's existing presence in the United Kingdom and Ireland and Cinema City's existing presence in Poland, Israel, Hungary, the Czech Republic, Bulgaria, Romania and Slovakia, pursuit of future acquisition opportunities (as opposed to organic growth) that would increase the number of their cinemas, whether of competitors, or individual sites, may result in merger approval being required from the relevant competition authority under antitrust regulations. If such merger approval is required, Cineworld, Cinema City and, following the Combination, the Enlarged Group may be required to dispose of cinemas in order to complete such acquisitions (as was the case when Cineworld acquired Picturehouse) or may not be able to succeed in acquiring other companies or cinema operations.

Cineworld and Cinema City are and, following the Combination, the Enlarged Group will be subject to risks relating to leases.

A substantial number of Cineworld's and Cinema City's cinemas are located on property that is leased, and rental costs represent a substantial portion of their cost of sales. A significant number of such leases are long-term. Such leasehold interests are generally subject to periodic rent reviews, lease expirations, termination for default and renegotiations. As a result, Cineworld, Cinema City and, following the Combination, the Enlarged Group are susceptible to changes in the property rental market, such as increases in market rents, which they may not be able to pass on to customers in the form of higher prices. Any such rental increases may negatively impact on Cineworld's, Cinema City's and, following the Combination, the Enlarged Group's margins and could have a material adverse effect on their business, results of operations and financial condition. In addition, it may not be possible to terminate a lease on an underperforming site before the initial term expires, even if operations cease on such site, which could limit the ability of Cineworld, Cinema City and, following the Combination, the Enlarged Group to expand in other locations and which could adversely affect their profitability.

Cineworld and Cinema City are and, following the Combination, the Enlarged Group will be subject to various government regulations, and failure to comply with existing or future government regulations could damage their reputation, subject them to regulatory actions, materially reduce their revenues or otherwise adversely affect their business.

The operation of a cinema exhibition business is subject to various EU, national and local government laws and regulations, including regulation under environmental, food and drink retailing, sanitation, and labour and immigration laws, minimum wage requirements, overtime and work authorisation requirements.

Cineworld and Cinema City also sell food and drink, the sale of which involves legal, reputational and other risks. For example, Cineworld and Cinema City may need to recall food products if they become contaminated or, as resellers of food, may be liable if the consumption of any of the products they sell causes illness or injury. Claims of illness, whether or not traced to Cineworld's or Cinema City's cinemas, relating to food quality or handling at retail stands could also cause material loss of admissions. In addition, any negative publicity relating to these and other health-related matters might affect consumers' perceptions of Cineworld's and Cinema City's cinemas, or cinemas in general, and reduce admissions materially, and cause damage to the reputation of, and loss of consumer confidence in, Cineworld, Cinema City and, following the Combination, the Enlarged Group.

In addition, Cineworld and Cinema City are routinely audited to ensure compliance with all cinema and retail operation requirements, including compliance with age restrictions as dictated by film ratings that are determined by film classification authorities. The licences of Cineworld, Cinema City and, following the Combination, the Enlarged Group may not be renewed if they fail to pass such audits.

If Cineworld, Cinema City and, following the Combination, the Enlarged Group are found to be in breach of laws, rules and regulations applicable to them, they could face regulatory fines, be required to pay damages to private litigants, have their licences revoked and/or their cinemas closed for a period of time. Further, the cost of addressing or remedying any such non-compliance could be substantial. Moreover, adverse publicity could damage the reputation of Cineworld, Cinema City and, following the Combination, the Enlarged Group which could negatively impact their revenue. New laws or amendments to existing laws could also require significant unanticipated expenditures or impose restrictions on the use of locations. Any of the foregoing could have a material adverse effect on the business, results of operations and/or financial condition of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Acquired businesses may not perform as expected or may be difficult to integrate.

Cineworld and, following the Combination, the Enlarged Group may grow, in part, through acquisitions and joint ventures, which involve various risks and uncertainties, particularly if such acquisitions are significant. For example, the acquired businesses may fail to achieve in the near or long-term the financial results projected or the strategic objectives of the relevant acquisition (such as cost savings and synergies) may not be achieved; an acquisition may involve assuming unknown claims and liabilities; there may be difficulties in imposing adequate financial and operating controls on the acquired companies and their management; there may be difficulties in preparing and consolidating financial statements of acquired companies in a timely manner; and/or additional debt, amortisation expenses or acquisition-related impairments may be incurred as a result of the cash expenditure related to such acquisitions. Other risks include the diversion of management's and other employees' time and attention from other business concerns, cultural differences, and the particular economic, political and regulatory risks associated with specific countries.

There may also be difficulties in integrating and managing acquired businesses effectively and handling future growth. This will depend upon a number of factors, including the size of the acquired businesses, the quality of the acquired management, the nature and geographical locations of their operations, and the resulting complexity of integrating their operations. This risk is greater in the case of acquisitions in markets in which Cineworld or the Enlarged Group have limited or no prior experience.

In addition, Cineworld and, following the Combination, the Enlarged Group may choose to enter into joint ventures, business alliances or collaboration agreements, which could involve the same or similar risks and uncertainties as are involved in acquisitions. Joint ventures generally involve a lesser degree of control over business operations, which may in the future present greater financial, legal, operational and/or compliance risks.

If Cineworld and, following the Combination, the Enlarged Group is unable to effectively manage risks associated with acquisitions and joint ventures, the benefits anticipated as a result of such transactions may not be realised, which may have a material adverse effect on their business, results of operations and financial condition.

The terms of the financing arrangements of Cineworld, Cinema City and, following the Combination, the Enlarged Group may limit their commercial and financial flexibility.

The commercial and financial flexibility of Cineworld and Cinema City is restricted by certain covenants under the terms of their existing financing facilities and, following the Combination, the Enlarged Group will be restricted under the terms of the Debt Financing. These include customary restrictions relating to mergers and acquisitions, the granting of security over or disposal of assets, the incurrence of financial indebtedness, guarantees and indemnities, the extension of loans or credit by members of the Group and derivative transactions. Any inability to exploit commercial opportunities as a result of such covenants may have a material adverse effect on Cineworld, Cinema City or, following the Combination, the Enlarged Group.

Higher interest rates, whether as a result of market-driven fluctuations to floating interest rates or otherwise and more stringent borrowing requirements, whether mandated by law or required by lenders, could increase Cineworld's and Cinema City's, and following the Combination, the Enlarged Group's financing charges and reduce profitability, particularly if any hedging instruments used are not completely effective and/or Cineworld and Cinema City and, following the Combination, the Enlarged Group may be unable to extend or renew such instruments.

Cineworld and, following the Combination, the Enlarged Group may not recover all the costs incurred with the conversion to digital projection.

All of Cineworld's and Cinema City's cinemas have been converted to digital projection. Film studios offered incentives to cinema exhibitors to help fund the conversion. If Cineworld or, following the Combination, the Enlarged Group is unable to obtain full recovery of the costs in accordance with the terms of the arrangements they have in place, or do not realise the expected benefits from the operational improvements, it could have a material adverse effect on the business and results of operations of Cineworld and, following the Combination, the Enlarged Group.

Political, economic and legal risks associated with countries in emerging markets, including in CEE, could adversely affect the business and results of operations of Cinema City and, following the Combination, the Enlarged Group.

A significant proportion of Cinema City's and, following the Combination, the Enlarged Group's revenue is attributable to operations in CEE. Cinema City's growth strategy envisages continuing expansion in and into countries in South-Eastern Europe, particularly Bulgaria and Romania. Political, economic and legal systems and conditions in emerging market economies are generally less predictable than in countries with more developed institutional structures, subjecting Cinema City to additional risks of doing business in such economies. Additional risks associated with doing business in emerging markets include uncertainty in enforcing contracts, uncertain property rights which may be subject to challenge, challenges in obtaining legal redress, exchange rate controls, sudden changes in tax or regulatory environment, difficulty in adequately establishing, staffing and managing operations and increased risk associated with inflation, recession and currency and interest rate fluctuations. Any of the foregoing could have a material adverse effect on Cinema City's and, following the Combination, the Enlarged Group's, prospects and results of operations.

Additional risks may arise for Cineworld, Cinema City and, following the Combination, the Enlarged Group as a result of civil unrest, terrorism or other events beyond their control.

Cinema businesses may be affected by civil unrest or terrorist acts which could cause the public to avoid public cinemas. This could be the case as a result of incidents in the locations in which Cineworld, Cinema City and, following the Combination, the Enlarged Group operate or in other areas that increase general unease in the locations in which they operate. Road closures or reduced availability of public transport, whether as a result of such events or more generally, can also adversely impact box office sales.

In addition, Cinema City and, following the Combination, the Enlarged Group may be subject to an increased risk of boycott, targeted civil unrest or terrorist action as a result of operating in and being linked to certain countries.

In particular, Israel is one of Cinema City's key countries of operation. This subjects Cinema City to additional risks relating to the political and military situation in that country. Since the establishment of Israel in 1948, a state of hostility has existed, varying in degree and intensity, between Israel and certain other countries in the region, and between Israel and the Palestinians. Cinema City's operations could be negatively affected if major hostilities involving Israel were to break out again in the future, if the level of terrorist attacks in Israeli cities or towns were to increase, if the threat of missile attacks were to increase, or if other events or developments were to increase the level of concern over security in daily life among the population in Israel with the result that film admissions were adversely affected.

Any of the foregoing could materially adversely affect the results of operations and financial condition of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Uninsured and underinsured losses.

Each of Cineworld and Cinema City use, and, following the Combination, the Enlarged Group will use its discretion, having taken external, independent, specialist advice, in determining amounts, coverage limits and deductibility provisions of insurance, with a view to maintaining appropriate insurance coverage on its assets at market standard costs and on customary terms. This may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of its assets.

Cinema City does not maintain insurance against property and/or loss of revenue due to terrorism in any of its territories with the exception of the Mall of Rousse in Bulgaria and its three Yes Planet complexes in Israel (which are jointly insured for property damage and loss of revenue) and its other Israeli cinemas (which are covered by the Israeli government compensation scheme on an actual loss basis, without cover for loss of revenue). If Cinema City incurs any damage or loss as a result of terrorism which is neither sufficiently insured nor fully covered by the Israeli government compensation scheme, Cinema City and, following the Combination, the Enlarged Group, will have to cover all or some of such damage or losses using its own resources, and this could, in extreme circumstances, have a material adverse effect on its business and financial condition.

Cinema City and, following the Combination, the Enlarged Group could be negatively affected if certain copyright claims against Cinema City are successful.

Pursuant to Polish copyright law, screenplay authors, authors of other literary and musical works, film directors, directors of photography, and artistic performers, have the right to the royalties for the use of their material in films screened in cinemas in Poland. The obligation to pay these royalties rests with the cinema operators, who must make payment to collecting societies. Claims for payment of such royalties are subject to a 10-year statute of limitations. Cinema City and, following the Combination, the Enlarged Group does not have any agreements with collection societies regarding the payment of such royalties and does not pay such royalties, on the basis that currently the Polish collection societies are not entitled to collect such royalties on behalf of non-Polish authors, in particular authors based in the United States, which is the origin of most of the films that Cinema City and, following the Combination, the Enlarged Group exhibits in its cinemas in Poland. Cinema City and, following the Combination, the Enlarged Group is currently subject to court proceedings initiated by Zwiazek Autorow i Kompozytor ´ ow ( ´ Zaiks), a Polish collection society representing screenplay authors and authors of other literary and musical works used in audiovisual works that are exhibited in Poland in relation to the payment of such royalties. There can be no assurance that other collection societies will not bring claims against Cinema City and, following the Combination, the Enlarged Group for authors' rights to royalties or that courts will not find their claims justified and, if the courts find that any significant claims are justified, the payment of past and future royalties in Poland could have an adverse effect on Cinema City's and, following the Combination, the Enlarged Group's business, financial condition and results of operations.

Cineworld is and, following the Combination, the Enlarged Group will be subject to uncertainties related to new technologies, including the potentially high costs of re-equipping cinemas.

To compete with other cinema exhibitors, Cineworld and, following the Combination, the Enlarged Group may have to adopt technical advancements in sound and projection technologies, and satisfy changing demands of audiences regarding comfort and amenities. Changes in film production may also require changes to equipment. As a result of any such change, Cineworld and, following the Combination, the Enlarged Group may incur substantial expenses, which could have an adverse effect on their business and results of operations.

Security breaches and other disruptions could compromise the information of Cineworld, Cinema City and, following the Combination, the Enlarged Group and expose them to liability, which would cause their business and reputation to suffer.

In the ordinary course of their business, Cineworld and Cinema City collect and store sensitive data, including intellectual property (such as the films which they are showing), their proprietary business information and that of their customers, suppliers and business partners, and personally identifiable information of their customers and employees, in their data centres and on their networks. This includes, for example, data tied to loyalty programmes and credit, debit and charge card information. The secure processing, maintenance and transmission of this information is critical to the operations and business strategy of Cineworld and Cinema City. Despite their security measures, the information technology and infrastructure of Cineworld and Cinema City may be vulnerable to attacks by hackers or may be breached due to employee error, malfeasance or other disruptions. Any such breach could compromise the networks of Cineworld and Cinema City and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption of the operations of Cineworld, Cinema City and, following the Combination, the Enlarged Group and the services they provide to customers, and/or damage to their reputation, which could adversely affect their business, competitive position and results of operations.

Changes in privacy laws could adversely affect the ability of Cineworld and, following the Combination, the Enlarged Group to market products effectively.

Cineworld's and, following the Combination, the Enlarged Group's cinemas rely on a variety of direct marketing techniques, including email marketing. Any expansion of existing or new laws and regulations regarding marketing, solicitation or data protection, including as a result of the proposed changes in 2014 to the EU data protection regime, could adversely affect the continuing effectiveness of email and other marketing techniques and could result in changes to the marketing strategy. If this occurs, Cineworld may not be able to develop adequate alternative marketing strategies, which could adversely impact admissions levels and adversely affect the business, results of operations and financial condition of Cineworld and, following the Combination, the Enlarged Group.

Cineworld and, following the Combination, the Enlarged Group may be required to increase the level of contribution it makes to pension schemes.

Cineworld operates a number of pension arrangements, most of which are defined contribution schemes. Cineworld operates two defined benefit plans, the MGM Scheme and the Adelphi Plan, which are now closed to new entrants. Future actuarial valuations of Cineworld's, and, following the Combination, the Enlarged Group's defined benefit plans may necessitate additional contributions to the plans. Moreover, any change in government or accounting policies with respect to pensions may also have a material adverse effect on Cineworld's, and, following the Combination, the Enlarged Group's pension plans. Should future

investment returns on the plans' assets prove insufficient to meet future obligations, or should future obligations increase due to actuarial factors, such as mortality of plan participants, or changes in pension legislation, Cineworld, and, following the Combination, the Enlarged Group may be required to make additional cash contributions to its defined benefit plans. This could have a material adverse effect on the results of operations and financial condition of Cineworld and, following the Combination, the Enlarged Group.

Changes in lease accounting standards may materially adversely affect Cineworld, Cinema City and, following the Combination, the Enlarged Group.

The Financial Accounting Standards Board has proposed accounting rules that would require companies to capitalise all leases on their balance sheets by recognising a lessee's rights and obligations. The Exposure Draft issued in 2010 and revised in May 2013 sets out new accounting standards for lessee accounting under which a lessee would recognise a ''right-of-use'' asset representing its right to use the underlying asset and a liability representing its obligation to pay lease rentals over the lease term. If this proposal is adopted, many companies that account for certain leases on an ''off balance sheet'' basis would be required to account for such leases ''on balance sheet.'' This change would remove many of the differences in the way companies account for owned property and leased property, and could have a material effect on various aspects of businesses. As each of Cineworld and Cinema City leases a substantial number of their respective cinemas, and the costs of the leases represent a substantial part of their respective costs of sales, the impact of these revised lease accounting standards on each of them would be substantial. For example, these revisions would inflate the assets and liabilities of each of Cineworld and Cinema City, which in turn would make them appear to be more highly leveraged. Although the Exposure Draft does not contain an effective date for the proposed changes, and it is possible that it will be revised further, if adopted as currently proposed, the revisions to lease accounting standards may have a substantial material adverse effect on Cineworld, Cinema City and, following the Combination, the Enlarged Group.

The Cineworld Group and, following the Combination, the Enlarged Group may suffer from increased charges, financial loss, penalties and reputational damage if tax rates, tax laws or a tax authority's published practice change, or if the Cineworld Group and, following the Combination, the Enlarged Group fails to manage tax risks adequately.

Changes in tax rates, tax laws or a tax authority's published practice, or changes in or interpretation of the law or a tax authority's published practice, or any failure to manage tax risks adequately could result in increased charges, financial loss, penalties and reputational damage, which may have an adverse effect on the Cineworld Group's and, following the Combination, the Enlarged Group's financial condition. The Cineworld Group and, following the Combination, the Enlarged Group cannot predict the impact of future changes in tax rates, tax laws or a tax authority's published practice on its products or the business. Such changes and/or the introduction of new tax legislation could have a material adverse effect on the Cineworld Group's and, following the Combination, the Enlarged Group's business and the Cineworld Group's and, following the Combination, the Enlarged Group's results of operations and/or financial condition.

Cineworld, Cinema City and, following the Combination, the Enlarged Group are subject to taxation which is complex and often requires subjective determinations.

Cineworld and Cinema City are subject to many different forms of taxation including but not limited to corporation income tax, withholding tax, VAT, stamp duty and social security and other payroll related taxes. Tax law and administration is complex and often requires subjective determinations. The tax authorities may not agree with the determinations that are made with respect to the application of tax law. Such disagreements could result in lengthy legal disputes and, ultimately, in the payment of substantial amounts for tax, interest and penalties, which could have a material effect on the business, results of operations or financial condition.

RISKS RELATING TO THE COMBINATION

The Combination is conditional upon certain conditions, which may not be satisfied and, as the Rights Issue is not conditional on Completion, if the Combination does not complete, but the Rights Issue does, the proceeds of the Rights Issue will be retained by Cineworld.

The Combination is conditional upon: (i) the passing of the Resolution; (ii) CCI Shareholder approval for the sale and purchase of the shares in Cinema City Holding; (iii) antitrust clearance from the President of the Office of Competition and Consumer Protection in Poland; (iv) completion of the Reorganisation (other than the entering into of the Relevant Leases); and (v) receipt of the proceeds of the Rights Issue. Although Cinema City and Cineworld have obligations in relation to the satisfaction of the conditions to the Combination, these conditions may not be fulfilled (or waived, where capable of being waived) and the Combination may not be completed. If the Rights Issue is completed but the Combination is not, Cineworld will have raised proceeds in the Rights Issue that will not subsequently be used to pay the purchase price for the Combination. In this event, the Cineworld Directors' current intention is that the proceeds of the Rights Issue will be applied to reducing the Company's net indebtedness on a short-term basis while the Cineworld Directors evaluate alternative uses of the funds. If no such uses can be found, the Cineworld Directors will consider how best to return surplus capital to Shareholders. Such a return could carry fiscal costs for certain Shareholders, will have costs for Cineworld and would be subject to applicable securities laws.

Cineworld will not have full recourse to CCI under the Combination Agreement against all potential liabilities in Cinema City, whether identified or unidentified.

Under the terms of the Combination Agreement, CCI will provide Cineworld with certain indemnities and warranties. However, these indemnities and warranties may not cover all potential liabilities associated with the business, whether identified or unidentified, and they are in certain circumstances limited in their scope, duration and/or amount. Accordingly, Cineworld may not have full recourse against, or otherwise recover in full from, CCI in respect of all losses which it may suffer in respect of a breach of those warranties, or in respect of the subject matter of any of the indemnities, or otherwise in respect of the Combination. In addition, Cineworld will be dependent on the ongoing solvency of CCI to the extent it seeks to recover amounts in respect of claims brought under such indemnities and warranties.

Combination-related costs may exceed Cineworld's expectations.

Cineworld expects to incur costs in relation to the Combination, including integration and post-closing costs in order to successfully combine the operations of Cineworld and Cinema City. The actual costs of the integration process may exceed those estimated and there may be further additional and unforeseen expenses incurred in connection with the Combination. In addition, Cineworld will incur legal, accounting and transaction fees and other costs relating to the Combination, some of which are payable whether or not the Combination is completed.

The Cineworld Directors believe that integration and Combination costs will be broadly in line with the realisation of the synergies resulting from the Combination, although these synergies may not be achieved in the short-term or at all, particularly if the Combination is delayed or is not completed. In addition, the costs incurred by the Enlarged Group in complying with the ongoing United Kingdom company and listing requirements are likely to exceed the costs currently incurred by Cineworld and increased costs are likely to arise from the issue of the New Ordinary Shares. These factors could materially adversely affect the Enlarged Group's results of operations.

The Enlarged Group may experience difficulties in integrating the existing businesses carried on by Cineworld and Cinema City, in particular due to the substantial increase in the scale of operations.

Cineworld and Cinema City currently operate and, until completion of the Combination, will continue to operate, as two separate and independent businesses. The Combination will lead to the integration of these two businesses and the success of the Enlarged Group will depend, in part, on the effectiveness of the integration process and the ability of the Enlarged Group to realise the anticipated benefits and cost savings from combining the respective businesses. Some of the potential challenges in combining the businesses may not become known until after completion of the Combination, in particular due to the substantial increase in the scale of the combined operations and the operational complexity of the Enlarged Group.

The key potential difficulties of combining the businesses include the following:

coordinating and consolidating services and operations, particularly across different countries, regulatory systems and business cultures;
integrating the business areas of Cinema City in which Cineworld has little or no previous experience, such as the provision of film distribution services outside the UK and Ireland;
consolidating infrastructure, procedures, systems, facilities, accounting functions and policies, compensation structures and other policies;
integrating management and retaining and incentivising key employees;
coordinating and communicating with a large, geographically dispersed workforce and maintaining employee morale;
the diversion of management's and other employees' time and attention from other business concerns;
cooperating and rationalising a large number of different technology platforms and systems; and
limiting the disruption to the ongoing businesses of each of Cineworld and Cinema City.

The process of integrating the businesses could potentially lead to the interruption of operations of the businesses, or a loss of customers or key personnel, which could have a material adverse effect on the business, results of operations or financial condition of the Enlarged Group. Any delays or difficulties encountered in connection with the integration of the businesses could also lead to reputational damage to the Enlarged Group. Nothing in this risk factor should be construed as implying that (i) the Company will be unable to comply with its obligations as a company with securities admitted to the Official List; or (ii) that the Combination will adversely affect the ability of the Enlarged Group, after Completion, to comply with the requirements of the Listing Rules or the Disclosure and Transparency Rules.

The Enlarged Group may not realise, or it may take longer than expected to realise, the perceived benefits and synergies of the Combination.

The Enlarged Group may fail to achieve the anticipated benefits and synergies that Cineworld expects will arise as a result of the Combination. Cineworld believes that the consideration for the Combination is justified in part by the business growth opportunities, margin benefits, cost savings and other synergies it expects to achieve by combining its operations with Cinema City. However, these expected benefits may not develop, and other assumptions upon which Cineworld determined the consideration payable for Cinema City may prove to be incorrect. To the extent that Cineworld incurs higher integration costs or achieves lower margin benefits or fewer cost savings than expected, the Enlarged Group's results of operations and financial condition, and Cineworld's share price may suffer. It could also adversely affect the services that each of Cineworld and Cinema City currently provide, and those that the Enlarged Group will provide going forward. This could have a material adverse effect on relationships with customers, film distributors, employees, suppliers and other market participants.

Existing Shareholders will experience a dilution of their ownership in Cineworld.

Pre-emption rights will not apply in relation to the issue of the Consideration Shares, resulting in a dilution of the ownership rights of Shareholders upon such issue. Therefore, when the Combination becomes effective, existing Shareholders will suffer a reduction in their proportionate ownership and voting interest in the ordinary share capital of Cineworld. Assuming that no Ordinary Shares other than the Rights Issue Shares are issued prior to Completion, existing Shareholders will suffer dilution of 24.9 per cent. as a consequence of the issue of the Consideration Shares in connection with the Combination (assuming that such Shareholders are permitted to, and do, take up all of their rights pursuant to the Rights Issue).

Risks of executing the Combination could cause the market price of Cineworld Ordinary Shares to decline.

The market price of Ordinary Shares may decline as a result of the Combination if, among other reasons, the integration of Cinema City's business is delayed or unsuccessful, Cineworld does not achieve the expected benefits of the Combination as rapidly or to the extent anticipated or at all, the effect of the Combination on Cineworld's financial results is not consistent with the expectations of investors, or Shareholders sell a significant number of Ordinary Shares after completion of the Combination.

Third parties may terminate or alter existing contracts with Cinema City.

Cinema City has contracts with suppliers, film distributors, customers, licensors, licensees, lessees, lessors, lenders, insurers and other business partners that contain ''change of control'' or similar clauses that allow the counterparty to terminate or change the terms of their contract upon completion of the Combination. In addition, there are other contracts which it is intended will be assigned or novated to a member of the Cinema City Holding Group from the Remaining Cinema City Group prior to Completion. Although Cinema City is seeking to obtain consent from certain counterparties for the Combination, they may not consent, or may not grant such consent on favourable terms, or such counterparties may elect to exercise their ''change of control'' rights at or following Completion.

RISKS RELATING TO THE RIGHTS ISSUE AND AN INVESTMENT IN ORDINARY SHARES

The value of an investment in New Ordinary Shares may be subject to material fluctuations and may not reflect the underlying asset value.

The market price of the Nil Paid Rights, Fully Paid Rights or New Ordinary Shares could be subject to significant fluctuations due to a change in sentiment in the market regarding these securities. The fluctuations could result from national and global economic and financial conditions, market perceptions of Cineworld and the Enlarged Group and other factors and events, including but not limited to regulatory changes affecting Cineworld's or the Enlarged Group's operations, variations in Cineworld's or the Enlarged Group's financial results, business developments of Cineworld or the Enlarged Group and/or their competitors and the liquidity of Cineworld or the financial markets. Moreover, the financial results and prospects of Cineworld or the Enlarged Group may be below the expectations of market analysts and investors from time to time. Any of these events could result in a decline in the market price of the Nil Paid Rights, Fully Paid Rights and/or New Ordinary Shares.

The market price for Ordinary Shares may decline below the Rights Issue Price.

The public trading market price of the New Ordinary Shares may decline below the Rights Issue Price for the New Ordinary Shares. Should that occur, Shareholders who exercise their rights in the Rights Issue will suffer an immediate loss as a result. Moreover, following the exercise of their rights, Shareholders may not be able to sell their New Ordinary Shares at a price equal to or greater than the Rights Issue Price for those shares. Shareholders who decide not to exercise their Nil Paid Rights may also sell or transfer them. If the public trading market price of the Ordinary Shares declines below the Rights Issue Price, investors who have acquired any such Nil Paid Rights in the secondary market will suffer loss as a result.

An active trading market in the Nil Paid Rights may not develop.

An active trading market on the London Stock Exchange in the Nil Paid Rights may not develop during the trading period. In addition, because the trading price of the Nil Paid Rights depends on the trading price of the Ordinary Shares, the Nil Paid Rights price may be volatile and subject to the same risk. The volatility of the price of Ordinary Shares may also magnify the price volatility of the Nil Paid Rights.

Qualifying Shareholders who do not, or who are not permitted to, acquire New Ordinary Shares in the Rights Issue will experience dilution in their ownership of Cineworld.

If Qualifying Shareholders do not, or are not permitted under the terms of the Rights Issue to, take up their entitlements under the Rights Issue, their proportionate ownership and voting interests in Cineworld will be reduced and the percentage that their Ordinary Shares will represent of the total issued share capital of Cineworld will be reduced accordingly. Even if any such Qualifying Shareholder elects to sell its unexercised Nil Paid Rights or such Nil Paid Rights are sold on its behalf, it may not receive any consideration, or any consideration it receives may not be sufficient to compensate it fully for the dilution of its percentage ownership of Cineworld's share capital that may be caused as a result of the Rights Issue.

Any future issue of Ordinary Shares will further dilute the holdings of current Shareholders and could adversely affect the market price of Ordinary Shares.

Other than pursuant to the Rights Issue and the Combination, Cineworld has no current plans for an offering of Ordinary Shares. Cineworld may, however, decide to offer additional Ordinary Shares in the future. If Shareholders did not take up any such offer of Ordinary Shares or were not eligible to participate in such offering, their proportionate ownership and voting interests in Cineworld would be reduced. An additional offering, or significant sales of Ordinary Shares by major shareholders, could have a material adverse effect on the market price of Ordinary Shares as a whole.

The Company's ability to pay dividends is not guaranteed.

Future dividends will be subject to the financial condition of Cineworld, Cinema City and, following the Combination, the Enlarged Group. Under UK company law, a company can only pay cash dividends to the extent that it has distributable reserves and cash available for this purpose. As a holding company, Cineworld's ability to pay dividends in the future is affected by a number of factors, principally its ability to receive sufficient dividends from its subsidiaries. The payment of dividends to Cineworld by its subsidiaries is affected by their financial condition and the existence of sufficient distributable reserves and cash in those subsidiaries. The ability of its subsidiaries to pay dividends to Cineworld and its ability to receive distributions from its investments in other entities are subject to applicable local laws and regulatory requirements and other restrictions. These requirements could limit the payment of dividends and distributions to Cineworld by its subsidiaries, which could in the future restrict Cineworld's ability to fund its operations or pay a dividend to the Shareholders.

Overseas Shareholders may not be able to acquire New Ordinary Shares in the Rights Issue or subscribe for future issues of Ordinary Shares.

Securities laws of certain jurisdictions may restrict the Company's ability to allow participation by certain Shareholders in any future issue of Ordinary Shares. In particular, and subject to certain exceptions, Shareholders who are located in the United States may not be able to exercise their rights in the Rights Issue or on a future issue of Ordinary Shares, unless a registration statement under the Securities Act is effective with respect to the Ordinary Shares or an exemption from the registration requirements is available thereunder. The New Ordinary Shares are not and will not be registered under the Securities Act and the Company may not file any such registration statements for future share issues, and an exemption to the registration requirements of the Securities Act may not be available in any case. In such an event, Shareholders with a registered address, or who are located, in the United States would be unable to participate in such an issue.

Qualifying Shareholders who have a registered address in or who are resident in countries other than the United Kingdom should consult their professional advisers as to whether they require any governmental or other consents, or need to observe any other formalities to enable them to take up their Nil Paid Rights or acquire New Ordinary Shares. Any Shareholder who is not entitled to participate in the Rights Issue or any future issue of Ordinary Shares carried out by the Company will suffer dilution, as described above.

The ability of Overseas Shareholders to bring actions or enforce judgments against the Enlarged Group or its directors or officers may be limited.

The ability of an Overseas Shareholder to bring an action against the Enlarged Group may be limited under law. Cineworld is a public limited company incorporated in England and Wales. The rights of Shareholders are governed by English law and the Articles. These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations. An Overseas Shareholder may not be able to enforce a judgment against some or all of the Cineworld Directors, the Proposed Directors and/or executive officers. The majority of the Cineworld Directors, Proposed Directors and/ executive officers are residents of the UK or Israel. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Cineworld Directors, Proposed Directors and/or the executive officers within the Overseas Shareholder's country of residence or to enforce against the Cineworld Directors, Proposed Directors and/or the executive officers judgments of courts of the Overseas Shareholder's country of residence based on civil liabilities under that country's securities laws. Overseas Shareholders may not be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the UK against the Cineworld Directors, Proposed Directors and/or the executive officers who are residents of the UK or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Cineworld Directors, Proposed Directors and/or the executive officers in any original action based solely on foreign securities laws brought against the Enlarged Group or the Cineworld Directors, Proposed Directors and/or the executive officers in a court of competent jurisdiction in England or other countries.

IMPORTANT NOTICES

DISCLAIMER

In considering whether to participate in the Rights Issue or approve the Combination, Shareholders must rely on their own examination, analysis and enquiry of Cineworld and the terms of the Rights Issue and the Combination, including the merits and risks involved. None of Cineworld or the Underwriters or any of their respective representatives is making any representation to any Shareholder or prospective investor regarding the legality or advisability of an investment in the securities of Cineworld or related or other securities or instruments (including, but not limited, to Nil Paid Rights, Fully Paid Rights, Provisional Allotment Letters and/or New Ordinary Shares) under the laws applicable to such Shareholder or prospective investor. The contents of this document are not to be construed as legal, business, tax or financial advice. Each Shareholder or prospective investor should consult with his or her own adviser as to the legal, tax, business, financial and related aspects of participation in the Rights Issue.

Any decision in connection with the Rights Issue or the Combination should be made solely on the basis of the information contained in this document. Without limitation to the foregoing, reliance should not be placed on any information in any announcements released by Cineworld prior to the date hereof, except to the extent that such information is repeated or incorporated by reference into this document and not superseded or revised.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Underwriters under FSMA or the regulatory regime established thereunder: (i) none of the Underwriters accepts any responsibility whatsoever and makes no representation or warranty, express or implied, in relation to the content of this document, including its accuracy, completeness or verification or in relation to any other statement made or purported to be made by it, or on its behalf, in connection with Cineworld, Cinema City, the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares, the Rights Issue or the Combination and nothing in this document is or shall be relied upon as a promise or representation in this respect, whether as to the past or future; and (ii) each of the Underwriters accordingly disclaims, to the fullest extent permitted by law, all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this document or any such statement.

None of the Underwriters, nor any person acting on behalf of any of them, accepts any responsibility or obligation to update, review or revise the information in this document or to publish or distribute any information which comes to its attention after the date of this document and the distribution of this document shall not constitute a representation by any of the Underwriters, or any such person, that this document will be updated, reviewed or revised or that any such information will be published or distributed after the date hereof.

Recipients of this document acknowledge that: (i) they have not relied on any of the Underwriters or any person affiliated with any of them in connection with any investigation of the accuracy of any information contained in or incorporated by reference into this document or their investment decision; and (ii) they have relied only on the information contained in or incorporated by reference into this document, and that no person has been authorised to give any information or to make any representation concerning Cineworld, its subsidiaries, CCI, CCI's subsidiaries or the New Ordinary Shares (other than as contained in or incorporated by reference into this document) and, if given or made, any such other information or representation should not be relied upon as having been authorised by Cineworld or the Underwriters.

The Underwriters may, in accordance with applicable legal and regulatory provisions and subject to the Underwriting Agreement, engage in transactions in relation to the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and/or related instruments for their own account for the purpose of hedging their commitments under the Underwriting Agreement. Except as required by applicable law or regulation, the Underwriters do not propose to make any public disclosure in relation to such transactions.

No person has been authorised to give any information or make any representations other than those contained in this document or incorporated by reference herein and, if given or made, such information or representations must not be relied upon as having been authorised by Cineworld or by the Underwriters. None of Cineworld or the Underwriters takes any responsibility for, or can provide assurance as to the reliability of, other information that you may be given. Subject to FSMA, the Listing Rules, the Disclosure and Transparency Rules and the Prospectus Rules, neither the delivery of this document nor any subscription or sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of Cineworld and/or Cinema City since the date of this document or that the

information in this document is correct as at any time subsequent to its date. Without limitation, the contents of the Cineworld Group's and the Existing Cinema City Group's websites do not form part of this document.

FORWARD-LOOKING STATEMENTS

This document contains or incorporates by reference forward-looking statements which are based on the beliefs, expectations and assumptions of the Board and other members of senior management about the Cineworld Group's business, the Combination, the Rights Issue and the Cinema City Business. All statements other than statements of historical fact included in this document may be forward-looking statements. Generally, words such as ''will'', ''may'', ''should'', ''could'', ''estimates'', ''continue'', ''believes'', ''expects'', ''aims, ''targets'', ''projects'', ''intends'', ''anticipates'', ''plans'', ''prepares'', ''seeks'' or, in each case, their negative or other variations or similar or comparable expressions identify forwardlooking statements.

These forward-looking statements reflect the beliefs of the Board and other members of senior management, as well as assumptions made by them and information currently available to them. Although the Board and other members of senior management believe that these beliefs and assumptions are reasonable, by their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Board and other members of senior management believe that these risks and uncertainties include but are not limited to:

the number, timing and attractiveness to customers of the films released in future periods;
the licensing fees and terms required by film distributors from Cineworld and, following the Combination, the Enlarged Group to exhibit their films;
the continued existence, and the duration of, the exclusive theatrical release window for films exhibited by Cineworld and, following the Combination, the Enlarged Group;
the inability of Cineworld and, following the Combination, the Enlarged Group to effectively implement its business and growth strategies;
the inability of Cineworld and, following the Combination, the Enlarged Group to effectively respond to competition and changes in technology;
the levels of expenditures on entertainment in general and cinemas in particular, including retail spending in Cineworld's and, following the Combination, the Enlarged Group's cinemas;
general economic and political conditions in markets in which Cineworld, and, following the Combination, the Enlarged Group, operates;
competition from other exhibitors and alternative forms of entertainment;
successful completion of the Combination;
the Enlarged Group's ability to integrate efficiently new businesses following the Combination;
the Enlarged Group's ability to achieve the anticipated financial and other benefits resulting from the Combination;

and other factors described in the section of this document entitled ''Risk Factors''. These factors should not be construed as exhaustive and should be read with the other cautionary statements in this document. Moreover, new risk factors may emerge from time to time and it is not possible to predict all such risks or assess their impact for disclosure in this document. Forward-looking statements are not guarantees of future performance. The Company's actual performance, results of operations, internal rate of return, financial condition, distributions to Shareholders and the development of its financing strategies may differ materially from the impression created by the forward-looking statements contained in this document. In addition, even if the Company's actual performance, results of operations, internal rate of return, financial condition, distributions to Shareholders and the development of its financing strategies are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.

Prospective investors should carefully review the section of this document entitled ''Risk Factors'' for a discussion of factors that could cause the Company's actual results to differ materially from those expected before making an investment decision. For the avoidance of doubt, nothing in this document constitutes a qualification of the working capital statement contained in Section 8 of Part XIII (Additional Information) of this document.

Forward-looking statements contained in this document apply only as at the date of this document. To the extent required by the Listing Rules, the Disclosure and Transparency Rules and the Prospectus Rules and other applicable regulations, the Company will update or revise the information in this document. Otherwise, the Company undertakes no obligation publicly to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Forward-looking statements contained in this document do not in any way seek to qualify the working capital statement contained in Section 8 of Part XIII (Additional Information) of this document.

PRESENTATION OF FINANCIAL INFORMATION

Prospective investors should consult their own professional advisers to gain an understanding of the financial information contained in this document. An overview of the basis for presentation of financial information in this document is set out below.

The historical financial information has been presented in accordance with the requirements of the Prospectus Directive Regulation and the Listing Rules in accordance with the basis of preparation included in Note 1 (Accounting policies) to the historical financial information in the Cineworld Group's 2012 Annual Report and Accounts incorporated by reference into this document.

Cineworld

The unaudited interim results for the 26 week period ended 27 June 2013 are also incorporated by reference into this document. The consolidated financial statements as of and for FY 2010, FY 2011 and FY 2012 were prepared in accordance with IFRS, were audited and the audit report for each such financial year was unqualified. Further details can be found in Part VIII (Historical Financial Information relating to Cineworld) of this Prospectus.

The unaudited condensed consolidated financial information for the 2013 Interim Period has been incorporated in this document in Part VIII (Historical Financial Information relating to Cineworld) and includes the condensed consolidated statement of profit and loss and other comprehensive income, the condensed consolidated statements of financial position, the condensed consolidated statements of changes in equity and the condensed consolidated statement of cashflows (and the related notes) of the Cineworld Group for the 2012 Inteirm Period.

The preparation of financial information 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 Cineworld Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the historical financial information are disclosed in Note 1 to the historical financial information in the Cineworld Group's 2012 Annual Report and Accounts which are incorporated by reference into this document.

Acquisition of Picturehouse

On 6 December 2012 the Cineworld Group obtained control of Picturehouse. Control was obtained by acquiring 100 per cent. of the shares and voting interests in the acquired entities. Due to the timing of the acquisition, the results and financial position of Picturehouse are not presented in the consolidated financial statements for FY 2010 and FY 2011 nor in the condensed consolidated interim financial statements for the 2012 Interim Period.

The impact of the acquisition on the consolidated financial statements of the Cineworld Group can be found in Note 9 to the historical financial information in the Cineworld Group's 2012 Annual Report and Accounts, which is incorporated by reference into this document.

Cinema City

The combined statements of financial position as at 31 December 2012, 2011 and 2010 and the combined statements of income and comprehensive income, changes in equity and cash flows for FY 2012, FY 2011 and FY 2010, presented in Part IX (Financial Information relating to the Cinema City Business) of this Prospectus, have been prepared in accordance with the requirements of the Listing Rules and in accordance with the basis of preparation in Note 2 of the Financial Information relating to the Cinema City business set out in Part IX (Financial Information relating to the Cinema City Business).

The basis of preparation describes how the financial information has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS as adopted by the EU), except as described below.

IFRS as adopted by the EU does not provide for the preparation of combined financial information, and accordingly in preparing the combined financial information certain accounting conventions commonly used for the preparation of historical financial information for inclusion in investment circulars as described in the Annexure to SIR 2000 (Investment Reporting Standard applicable to public reporting engagements on historical financial information) issued by the UK Auditing Practices Board have been applied. The application of these conventions results in a number of material departures from IFRS as adopted by the EU, which are listed in Note 2 of the Financial Information relating to the Cinema City Business, in Part IX (Financial Information relating to the Cinema City Business) of this document. In other respects IFRS as adopted by the EU have been applied.

The following historical financial information has been presented, in Part IX (Financial Information relating to the Cinema City Business), on the basis described above:

combined financial information of Cinema City Holding for FY 2012, FY 2011 and FY 2010 which includes combined statements for financial position, combined statements of profit and loss, combined statements of comprehensive income, combined statements of changes in shareholders' equity and combined statements of cash flows (and the related notes); and
combined unaudited interim financial information of Cinema City Holding for the 2013 Interim Period which includes interim condensed combined statements of financial position, interim condensed combined statements of profit or loss, interim condensed combined statements of comprehensive income, interim condensed combined statements of changes in equity, interim condensed combined statements of cash flows (and the related notes).

Non IFRS financial information

This document contains certain financial measures that are not defined or recognised under IFRS, including underlying trading measures EBITDA, EBITDAR, adjusted earnings and net debt. As the Cineworld Group's definition of these non-IFRS measures may differ from those used by other companies and industries, presentation of these measures may not be comparable to other similarly-titled measures used by other companies.

EBITDA and EBITDAR

EBITDA, as used in this document, represents operating profit before depreciation, impairments, reversals of impairments and amortisation, onerous lease and other non-recurring or non-cash property charges, transaction, pension, refinancing and reorganisation costs. These exceptional and non-trading items are set out on the face of the consolidated profit and loss account of the consolidated historical financial statements of the Cineworld Group incorporated by reference in Part VIII (Historical Financial Information relating to Cineworld) of this Prospectus.

EBITDA is presented to enhance a prospective investor's understanding of the Cineworld Group's results of operations and financial condition and to enhance a prospective investor's evaluation of the Cineworld Group's ability to employ its earnings towards capital expenditures, working capital and repayment of debt. The Cineworld Directors consider EBITDA to be a more accurate reflection of the underlying business performance of the Cineworld Group and believe that this measure provides additional useful information for prospective investors on the Cineworld Group's performance, and enhances comparability from period to period and with other companies, and is consistent with how business performance is measured internally.

EBITDAR, as used in this document, represents EBITDA before rent costs.

EBITDA and EBITDAR should not be considered as alternatives to IFRS measures of profit/(loss) or of cash flow from operations under IFRS or as an indication of liquidity. EBITDA and EBITDAR do not consider certain cash requirements, including interest payments, tax payments, debt service requirements and capital expenditures.

Adjusted earnings

Adjusted earnings comprises profit after tax adjusted for certain non-recurring and non-cash items. These non-recurring and non-cash items are set out in Note 5 to the historical financial information in the Cineworld Group's 2012 Annual Report and Accounts incorporated by reference into this document.

Adjusted earnings is presented to improve the underlying comparability of the performance of the earnings per share of the Cineworld Group adjusted for certain non-recurring and non-cash items. The Cineworld Directors consider that this measure provides shareholders and potential investors with improved visibility and comparability over the underlying performance of the Cineworld Group.

Net debt

Net debt represents net borrowings and derivatives.

Co-terminus period ends

The Cineworld Group operates a four, four, five week period quarter, with the end of the relevant period being the last Thursday of the month. This results in the date of the annual accounting period moving within four days of the calendar year end. The 52 week period end dates for 2010, 2011 and 2012 were 30 December, 29 December and 27 December respectively. The 39 week period end dates for 2012 and 2013 were 27 September and 26 September respectively.

The Cinema City Holding Group operates on a calendar month and year, with the relevant month or year ending on the last day of the month. For the annual periods 2010, 2011 and 2012 this is the 31 December and for the nine months period this is 30 September.

For the purpose of this report, the 52 week and 39 week periods of Cineworld and calendar year and nine month period of Cinema City Holding have been used as direct comparisons with no adjustments made for any difference in the number of days of a particular period. The Cineworld Directors have prepared the combined financial information and pro-forma information included in Part X (Unaudited pro forma statement of net assets of the Enlarged Group) on this basis as they consider the impact on the financial performance and position of the Combined Group due to the difference in days to be immaterial to the users of the prospectus.

Roundings

Certain data in this Prospectus, including financial, statistical, and operating information, has been rounded. As a result of the rounding, the totals of data presented in this document may vary slightly from the actual arithmetic totals of such data. Percentages in tables have been rounded and accordingly may not add up to 100 per cent.

In addition, certain percentages presented in the tables in this document reflect calculations based upon the underlying information prior to rounding, and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

Currency presentation and abbreviations

Unless otherwise indicated, all references in this document to ''sterling'', ''pounds sterling'', ''GBP'', ''£'', or ''pence'' are to the lawful currency of the United Kingdom. Cineworld prepares its financial statements in pounds sterling. All references to the ''euro'' or ''A'' are to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the treaty establishing the European Community, as amended. All references to ''US dollars'' or ''US\$'' are to the lawful currency of the United States.

The abbreviations ''£m'' or ''£ million'' represent millions of Pounds Sterling, and references to ''pence'' and ''p'' represent pence in Pounds Sterling.

NO INCORPORATION OF WEBSITE INFORMATION

Neither the content of Cineworld's website nor CCI's website, nor the content of any website accessible from hyperlinks on Cineworld's website or CCI's website, is incorporated into, or forms part of, this document and investors should not rely on them, without prejudice to the documents incorporated by reference into this document which will be made available on Cineworld's website.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Each of the times and dates in the table below is indicative only and may be subject to change.(1)

Announcement of the Combination and the Rights Issue	10 January 2014
Publication and posting of this document, the Notice of General Meeting and the Form of Proxy	10 January 2014
Latest time and date for receipt of Forms of Proxy	11.00 a.m. on 27 January 2014
Rights Issue Record Date	close of business on 27 January 2014
General Meeting	11.00 a.m. on 29 January 2014
Despatch of Provisional Allotment Letters (to Qualifying Non-CREST Shareholders only)	29 January 2014
Start of subscription period	8.00 a.m. on 30 January 2014
Admission of the Rights Issue Shares	8.00 a.m. on 30 January 2014
Dealings in Rights Issue Shares, nil paid, commence on the London Stock Exchange	8.00 a.m. on 30 January 2014
Existing Ordinary Shares marked ''ex-rights'' by the London Stock Exchange	8.00 a.m. on 30 January 2014
Nil Paid Rights credited to stock accounts in CREST (Qualifying CREST Shareholders only)(2)	as soon as practicable after 8.00 a.m. on 30 January 2014
Nil Paid Rights and Fully Paid Rights enabled in CREST	as soon as practicable after 8.00 a.m. on 30 January 2014
Recommended latest time and date for requesting withdrawal of Nil Paid Rights and Fully Paid Rights from CREST (i.e. if your Nil Paid Rights and Fully Paid Rights are in CREST and you wish to convert them to certificated form)	4.30 p.m. on 7 February 2014
Recommended latest time for depositing renounced Provisional Allotment Letters, nil or fully paid, into CREST or for dematerialising Nil Paid Rights or Fully Paid Rights into a CREST stock account (i.e. if your Nil Paid Rights and Fully Paid Rights are represented by a Provisional Allotment Letter and you wish to convert them to uncertificated form)	3.00 p.m. on 10 February 2014
Latest time and date for splitting Provisional Allotment Letters, nil or fully paid	3.00 p.m. on 11 February 2014
Latest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment Letters	11.00 a.m. on 13 February 2014
Results of Rights Issue to be announced through a Regulatory Information Service	by 8.00 a.m. on 14 February 2014
Dealings in Rights Issue Shares, fully paid, commence on the London Stock Exchange	by 8.00 a.m. on 14 February 2014
Rights Issue Shares credited to CREST accounts (uncertificated holders only)	as soon as practicable after 8.00 a.m. on 14 February 2014
CCI shareholder meeting to approve the sale and purchase of Cinema City Holding	21 February 2014
Expected date for despatch of definitive share certificates for the Rights Issue Shares in certificated form	by no later than w/c 24 February 2014
Expected date of Completion and Admission of the Consideration	March 2014

Shares Notes:

⁽¹⁾ The times and dates set out in the expected timetable of principal events above and mentioned throughout this document may be adjusted by Cineworld in consultation with Barclays, JP Morgan and Investec in which event details of the new times and dates will be notified to the UKLA, the London Stock Exchange and, where appropriate, Qualifying Shareholders.

(2) Subject to certain restrictions relating to Qualifying Shareholders with registered addresses outside the United Kingdom, details of which are set out in Section 9 of Part II (Details of the Rights Issue) of this document.
(3) References to times in this document are to London time.
(4) If you have any queries on the procedure for acceptance and payment or on the procedure for splitting Provisional Allotment Letters you should contact Capita Asset Services on 0871 664 0321 if calling from the UK or +44 208 639 3399 if calling from outside the UK between 9.00 a.m. and 5.30 p.m. Monday to Friday. Calls to the 0871 664 0321 number cost 10 pence per minute (including VAT) plus your service provider's network charges. Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. For legal reasons this helpline will not be able to provide advice on the merits of the Rights Issue or to provide financial, tax or investment advice.

CINEWORLD DIRECTORS, PROPOSED DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS

CINEWORLD DIRECTORS

Anthony Bloom	Non-Executive Chairman
Stephen Wiener*	Chief Executive Officer
Philip Bowcock	Chief Financial Officer
David Maloney	Senior Independent Director
Martina King	Non-Executive Director
Eric (Rick) Senat	Non-Executive Director
Peter Williams	Non-Executive Director

* Stephen Wiener's employment will cease on 31 March 2014. It is intended that, if the Combination completes, he will step down as Chief Executive Officer at Completion and that Moshe Greidinger will become the Chief Executive Officer of the Enlarged Group.

The business address of each of the Cineworld Directors is the registered office of the Company at Power Road Studios, 114 Power Road, Chiswick, London W4 5PY.

PROPOSED DIRECTORS

Moshe (Mooky) Greidinger	Chief Executive Officer
Israel Greidinger	Chief Operating Officer
Scott Rosenblum	Non-Executive Director
Arni Samuelsson	Non-Executive Director

COMPANY SECRETARY

Richard Ray

FINANCIAL ADVISER, JOINT GLOBAL CO-ORDINATOR AND JOINT BOOKRUNNER

Barclays Bank PLC 5 The North Colonnade Canary Wharf London E14 4BB

SPONSOR, JOINT GLOBAL CO-ORDINATOR, CORPORATE BROKER AND JOINT BOOKRUNNER

J.P. Morgan Securities plc 25 Bank Street London E14 5JP

CORPORATE BROKER AND JOINT BOOKRUNNER

Investec Bank plc 2 Gresham Street London EC2V 7QP

LEGAL ADVISERS TO CINEWORLD AS TO ENGLISH LAW

Slaughter and May One Bunhill Row London EC1Y 8YY

LEGAL ADVISERS TO CINEWORLD AS TO US LAW

Paul, Weiss, Rifkind, Wharton & Garrison LLP Alder Castle, 10 Noble Street London EC2V 7JU

LEGAL ADVISERS TO THE UNDERWRITERS

Herbert Smith Freehills LLP Exchange House Primrose Street London EC2A 2EG

AUDITOR AND REPORTING ACCOUNTANTS TO CINEWORLD

KPMG Audit Plc 15 Canada Square London E14 5GL

RECEIVING AGENT

Capita Asset Services Corporate Actions The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

REGISTRARS

Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

SHARE CAPITAL AND RIGHTS ISSUE STATISTICS

Rights Issue
Rights Issue Price per New Ordinary Share	230 pence
Basis of Rights Issue	8 Rights Issue Shares for every 25 Existing Ordinary Shares
Number of Ordinary Shares in issue at the Latest Practicable Date	149,892,079
Number of Rights Issue Shares to be provisionally allotted pursuant to the Rights Issue(1)	47,965,465
Number of Ordinary Shares in issue immediately following the completion of the Rights Issue(1)	197,857,544
Rights Issue Shares as a percentage of the enlarged issued share capital of Cineworld immediately following completion of the Rights Issue(1)	24.2 per cent.
Estimated gross proceeds of the Rights Issue	£110.3 million
Estimated expenses of the Rights Issue(2)	£3.2 million
Estimated net proceeds of the Rights Issue receivable by Cineworld, after deduction of estimated expenses of the Rights Issue(3)	£107.1 million
Combination
Number of Consideration Shares to be issued pursuant to the Combination(4)	65,601,236
Number of Ordinary Shares in issue immediately following Admission of the Consideration Shares(5)	263,458,780
Consideration Shares as a percentage of the share capital of the Enlarged Group in issue immediately following Admission of the Consideration Shares(5)	24.9 per cent.
Estimated expenses of the Combination for the Company(2)	£14.8 million
Total
Rights Issue Shares and Consideration Shares in aggregate as a percentage of the share capital of the Enlarged Group in issue immediately following Admission of the Consideration Shares(5)	43.1 per cent.
Estimated expenses of the Rights Issue and the Combination for the Company(2)(6)	£18.0 million

Notes:

(2) All expenses are exclusive of recoverable VAT.
(3) Based on the maximum number of Rights Issue Shares being issued under the Rights Issue.
(4) On the assumption that no further Ordinary Shares are issued from the date of this document until Admission of the Consideration Shares other than the Rights Issue Shares.
(5) On the assumption that no further Ordinary Shares are issued from the date of this document until Admission of the Consideration Shares other than the Rights Issue Shares and the Consideration Shares.
(6) No commissions, fees or expenses will be charged to subscribers for New Ordinary Shares by the Company.

⁽¹⁾ On the assumption that no further Ordinary Shares are issued from the date of this document until completion of the Rights Issue other than the Rights Issue Shares. The actual number of Rights Issue Shares to be issued under the Rights Issue will be subject to rounding to eliminate fractions.

PART I

LETTER FROM THE CHAIRMAN

Cineworld Group plc

(incorporated and registered in England and Wales with registered number 05212407)

Stephen Wiener 114 Power Road Philip Bowcock Chiswick David Maloney London W4 5PY Martina King Eric (Rick) Senat Peter Williams

Directors: Registered Office: Anthony Bloom Power Road Studios

10 January 2014

To the holders of Ordinary Shares

Dear Shareholder,

Proposed combination with the cinema operations of Cinema City International N.V., 8 for 25 Rights Issue of up to 47,965,465 Rights Issue Shares at 230 pence per New Ordinary Share, issue of Consideration Shares representing 24.9 per cent. of the share capital of Cineworld following Completion and Notice of General Meeting

1. Introduction

We have today announced the proposed combination with Cinema City, based on an enterprise value (on a debt free/cash free basis) for Cinema City of approximately £503.4 million. The consideration will comprise a combination of cash and shares, as further detailed in paragraph 5 below. As a result, CCI will become a 24.9 per cent. shareholder in the Enlarged Group.

Cinema City operates 99 multiplexes with 966 screens in seven countries, a cinema advertising business and the Forum Film distribution companies which distribute films for international and domestic film studios across the seven countries. In FY 2012, Cinema City had revenue of EUR 280.7 million (£231.6 million) and EBITDA of EUR 60.2 million (£49.7 million).(1)

The combination with Cinema City will create the second largest cinema operator in Europe with the number one or number two position (by number of screens) in every region in which the Enlarged Group will operate. Following Completion of the Transaction, the Enlarged Group will have 201 sites and 1,852 fully digital screens.

Cinema City brings growth opportunities in developing economies and markets in which multiplex screen penetration is comparatively low, with low admissions per capita and high population per screen. In 2009, the business had revenues of EUR 188.5 million (£155.6 million), EBITDA of EUR 35.8 million (£29.5 million) and operating profit of EUR 19.6 million (£16.2 million) and has since experienced strong growth with 2009-2012 revenue, EBITDA and operating profit CAGR of 14.2 per cent., 18.9 per cent. and 14.8 per cent. respectively.(1) Furthermore, Cinema City has a strong pipeline of screen openings in place to capitalise on further growth in these territories.

It is intended that, on Completion, the current Chief Executive Officer, Moshe Greidinger, and the current Chief Financial Officer, Israel Greidinger, of CCI will join the Board as Chief Executive Officer and Chief Operating Officer of the Enlarged Group, respectively. Philip Bowcock will remain as Chief Financial Officer of the Enlarged Group, and I will continue as Chairman of the Enlarged Group.

Cineworld proposes to finance the Combination through:

• the proceeds of the Rights Issue (approximately £107.1 million (net of expenses));

⁽¹⁾ Converted at an exchange rate of £1:A1.2117 (Bloomberg on 9 January 2014).

£240 million and A192 million from the Debt Financing, of which amounts will be drawn to: (i) fund, in part, cash consideration payable to CCI; (ii) refinance certain existing indebtedness of Cineworld and Cinema City; and (iii) for general working capital purposes; and
the issue of the Consideration Shares with an aggregate market value of £231.4 million(2) through which CCI will become a shareholder in Cineworld with a shareholding of 24.9 per cent.

CCI completed an initial public offering on the WSE in Poland in 2006. Following Completion, CCI will retain its Polish listing and intends to remain a long-term strategic shareholder in Cineworld. CCI intends to change its name to Global City Holdings N.V. at Completion.

The Combination is classified under the Listing Rules as a Class 1 transaction given the size of Cinema City compared to Cineworld. The Combination, together with the allotment of the Consideration Shares to CCI pursuant to the terms of the Combination, therefore requires the approval of the Shareholders. The sale and purchase of the shares in Cinema City Holding will also require the consent of the CCI Shareholders under Dutch law. The Combination is therefore conditional, among other things, on the approval of both the Shareholders and the CCI Shareholders.

As referred to below, the Rights Issue is not conditional upon Completion but is conditional on the passing of the Resolution.

The purpose of this document is to explain the background to, and reasons for, the Combination and the Rights Issue and to provide you with a Notice of General Meeting to be held to consider and, if thought fit, to pass the Resolution required to enable and authorise Cineworld to complete the proposed Rights Issue and the Combination and allot the Consideration Shares.

This document also explains why the Board considers the proposed Combination and the Rights Issue to be in the best interests of Shareholders and why the Board unanimously recommends that Shareholders vote in favour of the Resolution.

The General Meeting will be held at the offices of Slaughter and May, One Bunhill Row, London EC1Y 8YY at 11.00 a.m. on 29 January 2014. The Notice of General Meeting, along with the action to be taken in respect to the General Meeting, is set out at the end of this document.

2. Background, strategy and rationale for the Combination

2.1 Background and strategy

Cineworld's success in enhancing shareholder value over the last few years has been based around four core operating pillars:

''Put our customers at the heart of everything we do''— Cineworld aims to have an in-depth knowledge of its customers and believes that this strong understanding best enables it to increase attendance and revenue streams. Examples of initiatives include MyCineworld, which now has over 3.5 million members, and Unlimited, which now has approximately 372,000 members. Furthermore, the Company launched a newly designed website in 2012, helping to capture more customer data, thereby enhancing its CRM database. In 2013, more than 74 million visits to the Cineworld website were recorded.
''Deliver a great cinema experience''— Cineworld strives to ensure that its cinemas are comfortable, safe, clean and well-equipped, thereby giving its customers a great experience. Recent initiatives include increasing the number of Starbucks outlets at cinemas within the estate, increasing the number of IMAX screens, and trialling new ''4D Motion'' technology.
''Develop our people, effectiveness and efficiencies''— Cineworld endeavours to create a culture with a passion for ''People, Innovation and Achieving'', and the Board believes that developing and retaining the Company's employees is core to its success. The Company has a strong commitment to efficiency and is continually focused on ensuring that its training arrangements and systems are appropriate for a leading cinema business.
''Grow our estate''— Cineworld is focused on growth through selective new openings and acquisitions. Since 2012, Cineworld has opened Cineworld cinemas in Aldershot, Wembley, Gloucester Quays and at the Glasgow Science Centre. The development pipeline for the coming years remains strong and Cineworld is on target to open at least a further 169 screens in the UK and Ireland by the end of 2017.

⁽²⁾ Based on the Theoretical Ex-Rights Price of 353 pence implied by the Closing Price of 392 pence per Existing Ordinary Share as at 9 January 2014 and assuming no further Ordinary Shares other than the Rights Issue Shares are issued between the date of this document and Completion.

The acquisition of Picturehouse in December 2012 strengthened Cineworld's position in what the Board believes to be a high value, high growth segment of the UK cinema market. That transaction consolidated Cineworld's position as one of the largest cinema groups in the UK, adding a complementary portfolio of cinemas to Cineworld's existing estate, from both a geographic and strategic perspective. Picturehouse has performed in line with expectations since the acquisition and, in combination with the other initiatives set out above, has helped Cineworld increase its market share by box office revenue in the UK and Ireland from 23.8 per cent. in 2008 to 27.3 per cent. in the first nine months of 2013 (Source: Rentrak).

While Cineworld's focus to date has been on consolidating and advancing its position as one of the leading cinema businesses in the UK and Ireland, the Company has always recognised that the future holds exciting growth opportunities outside these countries. The Board believes it is now well positioned to begin to capitalise on these opportunities and the combination with Cinema City represents an important step as part of this strategic development.

2.2 Rationale for the Combination

Cinema City is a leading CEE cinema business present in a number of territories that offer attractive growth, complementing Cineworld's stable, core business. The Combination will create the second largest cinema operator in Europe (by number of screens) with strong positions in a number of highly attractive and growing markets. As at the Latest Practicable Date, the Enlarged Group would have 1,852 screens across Europe (Cinema City: 966 and Cineworld: 886), making it the second largest operator in Europe (by number of screens) after Odeon UCI, which had 2,187 screens as at 30 September 2013, with the number one or number two position (by number of screens) in every region in which the Enlarged Group will operate.

Cineworld believes that the Combination will drive growth in the business and enhance shareholder value by:

supplementing the Cineworld business with an attractive combination of industry leading operations in a number of attractive markets;
providing the Enlarged Group's business with a platform to expand in a number of Cinema City's territories;
providing the Enlarged Group's business with a platform for further European expansion;
providing a diversified revenue base to mitigate volatility in individual territories;
delivering estimated annualised pre-tax synergies of £2.0 million from cost savings, the majority of which are expected to be achieved in FY 2014;
giving the Enlarged Group significant scope to drive additional benefits from its combined operations through operational improvements and the sharing of best practice across the Cineworld and Cinema City businesses (including utilising Cineworld's experience in the mature UK market to improve returns in Cinema City's more developed cinema industries of Israel and Poland);
delivering an attractive return on invested capital, being earnings accretive(3) in FY 2014 and substantially accretive thereafter; and
allowing the Enlarged Group to maintain the existing Cineworld dividend policy, underpinned by the future prospects of the Enlarged Group.

2.3 Industry leading operations

Cinema City is one of the largest cinema operators in Europe and an industry leader in the CEE region, with leading industry positions by number of screens in all seven countries in which it operates, namely Poland, Israel, Hungary, Romania, the Czech Republic, Bulgaria and Slovakia.

Cinema City offers a strong combination of expertise in operating cinemas in CEE countries, with a track record in customer-focused entertainment and site rollout. Similarly to Cineworld, Cinema City puts the customer experience at the centre of its strategy and operates a well invested, modern, fully digitised estate

⁽³⁾ This statement does not constitute a profit forecast nor should it be interpreted to mean that the future earnings per share, profits, margins or cash flows of the Enlarged Group, taking into account the effect of the Rights Issue and the Combination, will necessarily be greater than the historical published earnings per share, profits, margins or cash flows of the Cineworld Group.

of 99 multiplexes, with 3D projection and stadium seating in all multiplexes, 10 IMAX theatres and five 4DX auditoriums. Cineworld believes that Forum Film and New Age Media, Cinema City's principal distribution and advertising arms, respectively, are complementary to Cineworld's Picturehouse Entertainment Limited and DCM.

2.4 Platform for growth

Many of Cinema City's assets are situated in fast growing territories with attractive demographics, including a growing middle class with rising disposable incomes, and a combined population of approximately 100 million. In general, the cinema sectors in CEE countries in which Cinema City operates are underpenetrated and have lower annual admissions per capita than is typical in Western European markets such as the UK. In such countries, Cineworld believes that there is significant potential for structural growth in cinema admissions by opening new cinemas, as can be seen in the table below. For example, in 2012 in Poland, where Cinema City has its largest number of screens, annual admissions per capita were 1.0 (UK: 2.7) and capita per screen was approximately 33,300 (UK: approximately 16,600). Cineworld believes that it will be able to drive strong box office revenue growth through increased penetration of these industries over time through opening new sites.

Country	Admissions per capita in 2012	Capita per screen in 2012	Average Ticket Price in 2012
		(in '000s)	£
US	3.9	7.9	4.8
France	3.1	11.9	5.3
UK	2.7	16.6	6.4
Germany	1.6	17.7	6.3
Poland	1.0	33.3	3.7
Israel	1.6	29.0	5.4
Hungary	1.1	25.5	3.0
Romania .	0.4	81.0	3.2
Czech Republic .	1.1	12.8	3.4
Bulgaria	0.7	38.0	3.7
Slovakia	0.6	25.3	4.2

Source: Dodona Research except admissions per capita in Israel (sourced from the Israel Cinema Association). Bulgaria figures based on Dodona estimates in 2011 for 2012.

Note: Average ticket prices have been converted from local currency to £ using exchange rates from Bloomberg as at 9 January 2014.

Furthermore, average box office prices in CEE countries in which Cinema City operates currently tend to be lower than in developed markets such as in the UK. As an example, the average ticket price for cinema attendance in Romania in 2012 is estimated to be approximately £3.15, compared with approximately £6.37 in the UK (Source: Dodona Research).

Cinema City has a strong track record of driving expansion and growth, having more than doubled its number of screens from 466 at the time of CCI's initial public offering in 2006 to 966 today. Cinema City currently has 36 new multiplexes (377 screens) under development and is well positioned to continue to explore possibilities in attractive markets in CEE, both organically and through potential acquisitions in existing and new markets.

The Enlarged Group will be the second largest cinema operator in Europe by number of screens with an attractive portfolio of strong positions in a number of highly attractive and growing markets. Cineworld believes that the Enlarged Group will be well positioned to expand further into new, attractive and underpenetrated European markets.

2.5 Diversified revenue base to mitigate volatility in individual territories

The Enlarged Group will have a diverse geographic footprint that the Board expects will help to mitigate year-on-year volatility from regional economic, weather and film performance risk and enable the Enlarged Group to diversify its film offering through local content.

2.6 Delivering synergies

The Board estimates that, following the Combination, the Enlarged Group will be able to achieve annualised pre-tax cost synergies of £2.0 million from the benefits of eliminating duplicated corporate costs, public company expenses and functional overheads. The synergies identified reflect both beneficial elements and relevant costs, are contingent on Completion, and could not be achieved independently. The Board expects that the Enlarged Group will benefit from the majority of these synergies in FY 2014 and it is expected that the realisation of these synergies will incur negligible one-off cash costs.

2.7 Best practice sharing

The Board believes that the Enlarged Group will be able to accrue considerable additional benefits from the sharing of best practice between Cineworld and Cinema City. As an example, Cineworld believes that the Enlarged Group will be well positioned to improve returns in Cinema City's more established businesses in Israel and Poland. Cineworld has had considerable success in the UK through the MyCineworld and Unlimited initiatives which the Board believes have been instrumental in improving Cineworld's attendance figures and market share performance. Given the dynamics in a number of the key Cinema City countries of operation, Cineworld believes that there is scope to achieve a similar level of success with analogous initiatives in these territories.

2.8 Attractive financial returns

The Board believes that the Transaction would be financially beneficial to Shareholders. The Board expects the return on invested capital associated with the Combination to be in line with Cineworld's stand-alone weighted average cost of capital in the third year after Completion, 2016, with higher returns expected to be achieved in following years, and to be earnings accretive in FY 2014 and substantially earnings accretive thereafter. This statement does not constitute a profit forecast nor should it be interpreted to mean that the future earnings per share, profits, margins or cash flows of the Enlarged Group, taking into account the effect of the Rights Issue and the Combination, will necessarily be greater than the historical published earnings per share, profits, margins or cash flows of the Cineworld Group.

The Board believes that Cineworld will be able to maintain its existing dividend policy following the completion of the Combination, underpinned by the future prospects of the Enlarged Group.

In light of the scale and size of the proposed Combination, Cineworld believes that it has taken a prudent approach to financing the Combination which balances a conservative financing structure, attractive shareholder returns and future flexibility with strong cash flow generation and a deleveraging profile.

The Board's expectations regarding these financial effects are based upon an assumed acquisition completion date of 31 March 2014 and the realisation of synergies on the basis described above and do not take into account any exceptional restructuring costs.

3. Summary information on Cineworld

Cineworld is one of the leading cinema groups in the UK and Ireland. The Cineworld Group currently operates 102 sites under the Cineworld and Picturehouse brands, of which the majority are multiplex sites with five screens or more. 21 of those sites are operated under the Picturehouse brand, which provides a different offering with fewer screens and individual styles. As a result of a Competition Commission decision following the acquisition of Picturehouse, Cineworld will be disposing of two Picturehouse cinemas in Aberdeen and Bury St Edmunds. Cineworld will also be disposing of a cinema in Cambridge and the Board will make its final decision on which cinema will be sold later in the year. The Cineworld Group's portfolio includes five out of the 10 highest grossing cinemas in the UK and Ireland in 2013 (Source: Rentrak). All of the Cineworld Group's sites have been converted to digital projection, and the Cineworld Group is one of the industry leaders in the UK and Ireland in 3D, a format which the Board believes will become increasingly important.

In FY 2013, Cineworld continued to benefit from its customer-focused initiatives resulting in UK and Ireland market share for Cineworld growing to 25.4 per cent. (2012: 24.7 per cent.). Including Picturehouse, the Cineworld Group market share was 27.4 per cent. In FY 2012, the Cineworld Group (including Picturehouse) accounted for over 47 million admissions, had revenues of £358.7 million (2011: £348.0 million) and EBITDA before exceptional items of £67.1 million (2011: £63.3 million).

4. Summary information on Cinema City

The Greidinger family started the predecessor to Cinema City in 1929 and opened its first cinema in Haifa, Israel in 1931. Israel was Cinema City's sole country of operation until 1997, when Cinema City looked beyond the mature Israeli cinema industry for growth opportunities. Cinema City then expanded into CEE, starting with Hungary in 1997, followed by the launch of operations in Poland and the Czech Republic in 1999, the establishment of a subsidiary in Bulgaria in 2003 (which commenced operations in 2006) and the launch of operations in Romania in 2007. With the acquisition of the Palace Cinemas chain in 2011, Cinema City added Slovakia as its seventh country of operations and expanded its operations in Hungary and the Czech Republic.

The Cinema City Business is now one of the largest cinema businesses in Europe and operates 99 multiplexes, with a total of 966 screens, across CEE and Israel. In Israel, the Cinema City Business operates cinemas under the Yes Planet and Rav-Chen brands and in CEE it operates cinemas under the Cinema City brand.

Cinema operations represent Cinema City's core business and are comprised of box office sales, retail sales of food and drink through concession stands, and on- and off-screen advertising. Cinema City also operates a film distribution business through its local Forum Film subsidiaries in all its countries of operation.

Cinema City Holding was incorporated in The Netherlands in December 2012 as a wholly-owned subsidiary of CCI. Cinema City Holding, together with the other members of the Cinema City Holding Group, will own and operate the Cinema City Business following completion of the Reorganisation. The corporate office of Cinema City Holding is located in Rotterdam, The Netherlands.

New Age Media, the Cinema City Business' CEE advertising and sponsorship arm, offers on- and off-screen advertising in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria and Romania. Cinema City's Israeli advertising arm operates under the Cinema Channel brand. For FY 2012, Cinema City had total revenues of EUR 280.7 million (£231.6 million) (2011: EUR 267.5 million (£220.7 million)) and in the 2013 Interim Period, it had total revenues of EUR 209.0 million (£172.5 million).(4)

5. Summary of the key terms of the Combination

Combination Agreement

Under the Combination Agreement, Cineworld has conditionally agreed to acquire the entire issued share capital of Cinema City Holding from CCI.

The consideration to be received by CCI on Completion under the terms of the Combination Agreement will consist of:

£272,000,000 in cash(5); and
Consideration Shares,

representing an enterprise value on a debt free/cash free basis of £503.4 million. In addition, CCI will also receive on Completion under the terms of the Combination:

A14,488,000 in cash(6); and
the Earnings Consideration.(7)

⁽⁴⁾ Converted at an exchange rate of £1:A1.2117 (Bloomberg on 9 January 2014).

⁽⁵⁾ Assuming no repayment or prepayment since 1 October 2013 under the Club Financing Agreement or the Israeli Facilities Agreement.

⁽⁶⁾ Reflects the amount of cash and cash equivalents as at 30 September 2013 less A3,470,000 and A530,000 which were paid by a member of the Cinema City Holding Group or IT 2004 in respect of the Remaining Cinema City Group's acquisition of Ronson N.V. and the acquisition of certain land interests in Poland, in each case after 30 September 2013. A locked box mechanism has been and will be in place from (and including) 1 October 2013 to (and including) Completion, designed to prevent such cash and cash equivalents from ''leaking out'' of the Cinema City Holding Group to the Remaining Cinema City Group.

⁽⁷⁾ The Earnings Consideration is an amount equal to: (i) A25,900,000 if Completion occurs in or before February 2014; and (ii) A28,900,000 if Completion occurs in or after March 2014; representing 75 per cent. of the forecast accumulated adjusted earnings of the Cinema City Business from (and including) 1 October 2013 to (and including) the date of Completion (assuming a February or March Completion, respectively).

Based on the Theoretical Ex-Rights Price of 353 pence implied by the Closing Price of 392 pence per Existing Ordinary Share on 9 January 2014 (being the latest Business Day prior to announcement of the Rights Issue), the Consideration Shares would be valued at £231.4 million(8). Following Completion, the Earnings Consideration is subject to a true-up adjustment based on 100 per cent. of the actual accumulated adjusted earnings of the Cinema City Business from (and including) 1 October 2013 to (and including) the date of Completion.

On the assumption that no further Ordinary Shares are issued or cancelled from the date of this document until Completion other than the Rights Issue Shares and the Consideration Shares, the number of Consideration Shares to be issued to CCI pursuant to the Combination will be 65,601,236.

The Greidinger family has indirect control of CCI's majority shareholder, ITIT, through its majority shareholding in Israel Theatres Ltd. ITIT is wholly-owned by Israel Theatres Ltd. More than 88 per cent. of the shares in Israel Theatres Ltd are held indirectly by Moshe Greidinger, Israel Greidinger and other members of the Greidinger family. ITIT is a 53.89 per cent. beneficial shareholder in CCI and, on Completion, will therefore become an indirect shareholder in Cineworld. As part of the Combination, Moshe Greidinger and Israel Greidinger will join the Board as Chief Executive Officer and Chief Operating Officer of the Enlarged Group, respectively. At the same time, Moshe Greidinger and Israel Greidinger will step down from CCI as its chief executive officer and chief financial officer, respectively, and will instead take up non-executive roles with CCI.

CCI, which, from Completion, will be a related party to the Enlarged Group for the purposes of Chapter 11 of the Listing Rules, will (via other members of the Remaining Cinema City Group) be a party to certain arrangements with the Enlarged Group following Completion including lease arrangements pursuant to which members of the Remaining Cinema City Group will lease seven cinema properties and one office property in Poland, Slovakia, the Czech Republic and Israel to the Enlarged Group. Further details of these, and other arrangements with the Remaining Cinema City Group which will remain (or be put) in place following Completion, are set out in Section 7 of Part XIII (Additional Information).

The Reorganisation

In anticipation of the Combination, the Existing Cinema City Group is in the process of undertaking an internal reorganisation exercise (the Reorganisation) with the effect that, following completion of the Reorganisation, all of the Cinema City Business will be held by Cinema City Holding, together with other members of the Cinema City Holding Group. As part of the Reorganisation, CCI will (i) transfer all of its Israeli cinema operations to the Cinema City Holding Group by way of a transfer to it of (a) the entire issued share capital of Cinema-Phone Ltd and Norma Film Ltd (together with its subsidiaries), and (b) the cinema-related assets (excluding freehold real estate) and Yes Planet brand owned by IT 2004 (which company will remain within the Remaining Cinema City Group); (ii) assume the outstanding external bank debt of Cinema City Finance; and (iii) transfer Cinema City Finance to Cinema City Holding.

In line with Cineworld's existing business model of operating a predominantly leasehold estate, Cineworld will not be acquiring freehold cinema property assets through this Combination. Accordingly, as part of the Reorganisation, all of the freehold real estate (land and buildings) and the related leasehold at AuPark that is currently owned by members of Cinema City Holding Group (including pursuant to the acquisition of Israel Theatre Real Estate B.V. in December 2012) will not be acquired by Cineworld pursuant to the Combination and the freehold property assets associated with six Cinema City cinema-related properties (Janki, Katowice, Łod´ ´z, Torun, Galaxie, AuPark) and the related leasehold at AuPark, one office property ´ (in Fosa) and one piece of land (at Gliwice) held by members of the Cinema City Holding Group will be transferred to the Remaining Cinema City Group. Members of the Enlarged Group will continue to operate from all of the cinema and office sites on a leasehold basis and will enter into new leases with the Remaining Cinema City Group in respect of all of these sites (but not in respect of the land at Gliwice) and the Rishon LeZion cinema (owned by IT 2004) (pursuant to which it shall incur an initial aggregate annual rental charge of EUR 7,650,000 (see Section 3 of Part V (Information on Cinema City) of this document for further details).

⁽⁸⁾ Assuming no further Ordinary Shares other than the Rights Issue Shares are issued from the date of this document until Completion.

Shareholder approvals

Owing to its size, the Combination constitutes a Class 1 transaction for the purposes of the Listing Rules. The Combination, together with the allotment of the Consideration Shares to CCI pursuant to the terms of the Combination, therefore requires approval from Shareholders. Accordingly, a General Meeting has been convened for 29 January 2014 (see Section 14 of this Part I).

The Cineworld Directors who hold interests in Existing Ordinary Shares, or, in the case of one director, a discretionary trust through which that director holds his interest, have irrevocably undertaken to vote in favour of, or to procure a vote in favour of, the Resolution to be proposed at the General Meeting to approve the Combination in respect of a total of 3,803,890 Ordinary Shares, representing, in aggregate, approximately 2.54 per cent. of Cineworld's issued share capital.

The sale and purchase of the shares in Cinema City Holding will also require the consent of the CCI Shareholders under Dutch law.

ITIT, which owns 53.89 per cent. of the share capital of CCI, has irrevocably committed to vote in favour of the sale and purchase of the shares in Cinema City Holding at the CCI Shareholders' Meeting.

Conditions

Completion of the Combination is conditional upon certain things, including:

(A) the passing of the resolution of the CCI Shareholders approving the sale and purchase of the shares in Cinema City Holding referred to above at the CCI Shareholders' Meeting;
(B) the passing of the Resolution;
(C) receipt of the relevant clearance from the Polish antitrust authorities;
(D) completion of the Reorganisation (other than the entering into of the Relevant Leases) (see Section 3 of Part V (Information on Cinema City)); and
(E) receipt of the proceeds of the Rights Issue.

Further to the condition set out under paragraph (D) above, while the Reorganisation (other than the entering into of the Relevant Leases) is a condition to Completion, Cineworld has the right to waive such condition in whole or in part if all other conditions have been satisfied or waived. To the extent that Cineworld does so, such that the Reorganisation has not been completed by Completion, Cineworld and CCI have agreed to work together to complete the Reorganisation as soon as reasonably practicable thereafter.

Relationship Agreement

The Relationship Agreement between CCI and Cineworld, the key operational terms of which are conditional upon Completion occurring, governs the continuing relationship between CCI and Cineworld following Completion. The Relationship Agreement contains, inter alia, provisions: (i) permitting CCI to appoint one Non-Executive Director (if none of Moshe Greidinger, Israel Greidinger or Scott Rosenblum is still on the Board) for so long as it holds at least 10 per cent. of the voting rights in Cineworld; (ii) to ensure that the Cineworld Group is capable of carrying on its business independently of the Remaining Cinema City Group (including requirements for arms' length arrangements between the parties and providing for the exclusion of CCI-connected non-independent board members from Board discussions and decisions regarding arrangements between the parties); and (iii) relating to restrictions on the disposal of Ordinary Shares by CCI for 12 months following Completion, together with a requirement for CCI to, where reasonably practicable, consult with and consider the reasonable views of the Chairman or the Senior Independent Director of Cineworld prior to a sale of Ordinary Shares by CCI after that initial 12-month period.

6. Financing the Combination

The Combination will be funded through:

• £107.1 million from the proceeds of the Rights Issue (net of expenses);

£240 million and A192 million from the Debt Financing, of which amounts will be drawn to: (i) fund, in part, the cash consideration payable; (ii) refinance certain existing indebtedness of Cineworld and Cinema City; and (iii) for general working capital purposes; and
the issue of the Consideration Shares with an aggregate value of £231.4 million; based on the Theoretical Ex-Rights Price of 353 pence implied by the Closing Price of 392 pence per Existing Ordinary Share as at the latest Business Day prior to announcement of the Rights Issue(9).

Details of the terms of the Debt Financing are set out in Section 6.1 of Part XIII (Additional Information) of this document.

Application will be made for the Consideration Shares to be admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission of the Consideration Shares will become effective, and dealings in the Consideration Shares will commence, in March 2014.

7. Management and employees

It is proposed that the Board of the Enlarged Group following the Combination would comprise:

Name	Position
Anthony Bloom	Chairman
Moshe (Mooky) Greidinger	Chief Executive Officer
Philip Bowcock	Chief Financial Officer
Israel Greidinger	Chief Operating Officer
David Maloney	Senior Independent Director
Martina King	Non-Executive Director
Scott Rosenblum	Non-Executive Director
Arni Samuelsson	Non-Executive Director
Eric (Rick) Senat	Non-Executive Director
Peter Williams	Non-Executive Director

Stephen Wiener, the current Chief Executive Officer of Cineworld, will leave the employment of Cineworld on 31 March 2014. Upon completion of the Transaction, it is now intended that Stephen Wiener will step down from his role at such time and that Moshe Greidinger will become the Chief Executive Officer of the Enlarged Group and his brother Israel Greidinger will become the Chief Operating Officer of the Enlarged Group. Both Moshe Greidinger and Israel Greidinger are currently directors of CCI and, as described earlier, have, together with other members of the Greidinger family, indirect control of CCI. Each has been instrumental in the development of the Cinema City Business to its position as a leading cinema business in CEE and Israel today. The Board believes that Moshe Greidinger's and Israel Greidinger's significant experience and success in the cinema industry, and their track record at CCI over many years, will prove invaluable as they form the executive leadership team of Cineworld alongside Philip Bowcock, the current Chief Financial Officer, for this next stage in the development of the Enlarged Group.

The Board attaches great importance to the skills and experience of the existing management and employees of Cineworld and Cinema City, and believes that there will be greater opportunities within the Enlarged Group. The Cineworld Directors do not currently anticipate any significant headcount reduction for the Enlarged Group following completion of the Transaction.

The Enlarged Group's headquarters and registered office will be the current registered office of the Company.

⁽⁹⁾ Assuming that no Ordinary Shares other than the Rights Issue Shares are issued prior to Completion.

8. Principal terms of the Rights Issue

Cineworld is proposing to raise approximately £107.1 million (net of expenses) pursuant to the Rights Issue. The Rights Issue is being fully underwritten by the Underwriters, subject to certain customary conditions. The Rights Issue Price of 230 pence per Rights Issue Share represents a 41.3 per cent. discount to the closing middle market price of Cineworld of 392 pence per Ordinary Share on 9 January 2014, the latest Business Day prior to the announcement of the Rights Issue and a 34.8 per cent. discount to the Theoretical Ex-Rights Price of 353 pence per Rights Issue Share calculated by reference to the closing middle market price on the same basis.

Subject to the fulfilment of, among other things, the conditions set out below, the Company will offer 47,965,465 Rights Issue Shares to Qualifying Shareholders at a Rights Issue Price of 230 pence per Rights Issue Share, payable in full on acceptance. The Rights Issue will be offered on the basis of:

8 Rights Issue Shares for every 25 Existing Ordinary Shares

held on the Record Date, and so in proportion to any other number of Existing Ordinary Shares then held and otherwise on the terms and conditions set out in this document.

Qualifying Non-CREST Shareholders with registered addresses in the United States or in any of the other Excluded Territories will not be sent Provisional Allotment Letters and will not have their CREST stock accounts credited with Nil Paid Rights, except where the Company and the Underwriters are satisfied that such action would not result in the contravention of any registration or other legal or regulatory requirement in such jurisdiction.

Fractions of Rights Issue Shares will not be allotted to any Qualifying Shareholders, but will be aggregated and sold in the market for the benefit of Cineworld.

The Rights Issue Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares.

The Rights Issue is conditional, among other things, upon:

(a) the passing of the Resolution at the General Meeting without material amendment;
(b) the Company having applied to Euroclear for admission of the Nil Paid Rights and Fully Paid Rights to CREST as participating securities, and no notification having been received from Euroclear on or before Admission of the Rights Issue Shares that such admission or facility for holding and settlement has been or is to be refused;
(c) Admission of the Rights Issue Shares becoming effective by not later than 8.00 a.m. on 30 January 2014 (or such later time and/or date as the Banks and the Company may agree in advance in writing but so that the last date for acceptance is not later than 13 February 2014); and
(d) the Underwriting Agreement becoming unconditional in all respects (save for the condition relating to Admission of the Rights Issue Shares) and not having been rescinded or terminated in accordance with its terms prior to Admission of the Rights Issue Shares.

Application will be made for the Rights Issue Shares to be admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission of the Rights Issue Shares will become effective and dealings in the Rights Issue Shares will commence at 8.00 a.m. on 30 January 2014.

The Rights Issue is not conditional on Completion. The Rights Issue may therefore complete while the Combination does not. In the event that Admission of the Rights Issue Shares is effected but Completion does not occur, the Cineworld Directors' current intention is that the proceeds of the Rights Issue will be applied to reducing the Company's net indebtedness on a short-term basis while the Cineworld Directors evaluate alternative uses of the funds. If no such uses can be found, the Cineworld Directors will consider how best to return surplus capital to Shareholders. Such a return could carry fiscal costs for certain Shareholders, will have costs for Cineworld and would be the subject to applicable securities laws.

The Cineworld Directors, who hold in aggregate 3,803,890 Ordinary Shares, representing 2.54 per cent. of the Company's existing issued ordinary share capital, each intend to take up their rights in full or in part in respect of the Rights Issue Shares to which they are entitled or, where their Ordinary Shares are held in trust or with nominees, such Cineworld Directors intend to recommend that such rights be taken up in full or in part.

9. Dividends

For FY 2012, the Company paid a dividend of 11.8 pence per share (2011: 11.0 pence per share), a 7.3 per cent. increase on the 2011 payment. For the 26 week period ended 27 June 2013, the Company has paid an interim dividend of 4.1 pence per share (2012: 3.8 pence per share), representing a 7.9 per cent. increase on the 2012 payment.

Reflecting the confidence that the Board has in the benefits of the Combination and the cash generative potential of the Enlarged Group, it is intended that, following Completion of the Combination, the Enlarged Group will maintain its existing dividend policy, underpinned by the future prospects of the Enlarged Group.

10. Current trading, trends and prospects

Cineworld

In FY 2013, Cineworld's box office revenue increased by 4.0 per cent. with admissions growing by 1.3 per cent. and average ticket price rising by 2.6 per cent. to £5.40 (2012: £5.26). Retail initiatives continued to gain momentum with nine Starbucks outlets opening within Cineworld's cinemas contributing to an increase in average spend per person of £0.02 (0.08 per cent.) to £1.75 (2012: £1.73). Other income benefited from increased income in advertising as well as an increase in 3D glasses sales as admissions for 3D films grew. Picturehouse continued to perform in line with expectations and a new opening is planned in Colchester. Overall Cineworld anticipates that performance for FY 2013 will be in line with the Board's expectations.

The UK and Ireland cinema industry had a satisfactory year in FY 2013 with industry gross box office marginally declining by 0.3 per cent. against the previous year (Source: Rentrak). Cineworld continued to benefit from its customer-focused initiatives, resulting in UK and Ireland market share for Cineworld growing to 25.4 per cent. (FY 2012: 24.7 per cent.). Including Picturehouse, the Cineworld Group's market share was 27.4 per cent.

There is a solid film release programme for 2014 which includes the next instalment from the Hunger Games franchise: ''The Hunger Games: Mockingjay—Part 1'', as well as the final film in The Hobbit franchise: ''The Hobbit: There and Back Again''. Other popular film franchises including Transformers, Spiderman and X-Men also have new releases throughout the year. This, along with plans for a total of four new Cineworld and Picturehouse cinema openings, means Cineworld looks forward to delivering further value to Shareholders in the forthcoming year.

Cinema City

In FY 2013, Cinema City's total number of admissions rose by three per cent. compared to FY 2012. In October 2013, the opening of ''Walesa'', a Polish made film, had a positive impact on admissions in Poland. More recently, the opening of the second instalment of the Hunger Games series of films saw increased admissions in most territories in FY 2013 relative to the first Hunger Games film in FY 2012 and contributed to similar trends in overall admissions during the fourth quarter of FY 2013 compared with the same period in FY 2012. As a result, Cinema City's performance is expected to be in line with CCI's expectations for the full year.

The line-up of films for 2014 includes a number of new instalments from several international blockbuster series including: ''The Hobbit'', ''Hunger Games'', ''Rio'', ''How To Train Your Dragon'' and ''Transformers'', and it is expected these will contribute positively to total admission levels in 2014. Locally in Poland for 2014, a strong line up of Polish films, including ''Wkreceni'', ''Jack Strong'' and ''Miasto 44'' is expected to support admission levels in that territory.

11. Overseas Shareholders

The attention of Qualifying Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Ordinary Shares for the benefit of such persons (including, without limitation, custodians, nominees, trustees and agents) or who have a contractual or other legal obligation to forward this document, a Provisional Allotment Letter and any other document in relation to the Rights Issue to such persons, is drawn to the information which appears in Section 9 of Part II (Details of the Rights Issue) of this document. In particular, subject to certain exceptions, the Rights Issue is not being made to shareholders in the United States or into any of the other Excluded Territories.

In particular, persons who have registered addresses in or who are resident in, or who are citizens of, countries other than the United Kingdom should consult their professional advisers whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlements to the Rights Issue.

12. Share Schemes

Participants in the Employee Share Schemes will be advised separately of adjustments (if any) to their rights or as to any entitlement to participate in the Rights Issue.

13. General Meeting

A notice convening a General Meeting to be held at the offices of Slaughter and May, One Bunhill Row, London EC1Y 8YY at 11.00 a.m. on 29 January 2014 at which the Resolution will be proposed is set out at the end of this document. The purpose of the General Meeting is to consider and, if thought fit, pass the Resolution, as set out in full in the Notice of General Meeting.

Your attention is again drawn to the fact that the Rights Issue and the Combination are conditional and dependent upon the Resolution being passed (there are also additional conditions which must be satisfied before the Combination can be completed). Because of the size of Cinema City when compared with Cineworld, the Combination is classified under the Listing Rules as a Class 1 transaction and its implementation, together with the issue of the Consideration Shares pursuant to the terms of the Combination, requires the approval of Shareholders.

However, Shareholders should be aware that it is possible that, after the Rights Issue becomes wholly unconditional, the Combination could fail to complete. This possibility is discussed further in Section 1 of Part II (Details of the Rights Issue) of this document.

Resolution

The Resolution proposes that:

(a) the Combination be approved and that the Cineworld Directors be authorised to take all steps and enter into all agreements and arrangements necessary or desirable to implement the Combination; and
(b) the Cineworld Directors be authorised to allot up to 65,767,000 Ordinary Shares, representing approximately 43.9 per cent. of the Company's current issued share capital in addition, to the extent unutilised, to the allotment authorities conferred on the Cineworld Directors at the 2013 AGM. This will provide the Cineworld Directors with the necessary authority and power under the Companies Act 2006 to proceed with the issue of Consideration Shares pursuant to the terms of the Combination. The authority will expire on the date of the Company's annual general meeting in 2014.

Further details in relation to the Resolution are provided at Section 2.4 of Part XIII (Additional Information) of this document.

The Resolution will be proposed as an ordinary resolution requiring a simple majority of votes in favour. The resolution must be approved by Shareholders who together represent a simple majority of the Ordinary Shares being voted (whether in person or by proxy) at the General Meeting. The Rights Issue and the Combination will not proceed unless the Resolution is passed.

For further information in relation to the Resolution to be proposed at the General Meeting, see the Notice of General Meeting at the end of this document.

14. Action To Be Taken

General Meeting

If you are a Shareholder, you will find enclosed with this document a Form of Proxy for use at the General Meeting. Whether or not you intend to be present at the General Meeting, you are asked to complete the Form of Proxy in accordance with the instructions printed on it and to return it to the Registrar, Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU, as soon as possible and, in any event, so as to arrive not later than 11.00 a.m. on 27 January 2014. The completion and return of the Form of Proxy will not preclude you from attending the General Meeting and voting in person if you wish to do so. You may also submit your proxies electronically at www.capitashareportal.com using the Voting ID, Task ID and Shareholder Reference Number on the Form of Proxy. If you hold shares in CREST, you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to the issuer's agent, ID RA10, so that it is received no later than 11.00 a.m. on 27 January 2014.

Rights Issue

The latest time for acceptance by Shareholders under the Rights Issue is 11.00 a.m. (London time) on 13 February 2014. The procedure for acceptance and payment is set out in Part II (Details of the Rights Issue) of this document. Further details also appear in the Provisional Allotment Letter which will be sent to all Qualifying Non-CREST Shareholders (other than, subject to certain exceptions, those Qualifying Non-CREST Shareholders with a registered address in the Excluded Territories).

If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant, fund manager or other independent financial adviser authorised under FSMA if you are in the United Kingdom or, if you are not, from another appropriately authorised independent financial adviser.

15. Further Information

Your attention is drawn to the section entitled ''Risk Factors'' of this document and to Part XIII (Additional Information) of this document. You should read all of the information contained in this document before deciding the action to take in respect of the General Meeting and/or the Rights Issue. If you are a Qualifying Shareholder, and, subject to certain exceptions, unless you have a registered address in, or are resident or located in, any of the Excluded Territories, your attention is drawn in connection with the Rights Issue to the further information contained in Sections 9 and 10 of Part II (Details of the Rights Issue) of this document.

The results of the votes cast at the General Meeting will be announced as soon as possible once known through a Regulatory Information Service and on the Cineworld website (www.cineworldplc.com). It is expected that this will be on 29 January 2014.

16. Financial Advice

The Board has received financial advice from Barclays in relation to the Combination. In providing its financial advice to the Cineworld Directors, Barclays has relied on the Cineworld Directors' commercial assessments of the Combination.

17. Recommendation

The Board considers the Combination, the Rights Issue and the Resolution to be in the best interests of the Company and its Shareholders taken as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolution, as all of the Cineworld Directors and a discretionary trust through which one of the directors holds his shares have irrevocably undertaken to do (or procure to be done), in respect of the Ordinary Shares in which they are interested, or in relation to which they are otherwise able to control the exercise of the voting rights, held at the time of the General Meeting, amounting to 3,803,890 Ordinary Shares in aggregate as at the Latest Practicable Date (representing approximately 2.54 per cent. of Cineworld's existing issued ordinary share capital).

Yours sincerely,

Anthony Bloom Chairman

PART II

DETAILS OF THE RIGHTS ISSUE

1. Summary of the Rights Issue

The Company is proposing to raise gross proceeds of approximately £110.3 million pursuant to the Rights Issue.

The Rights Issue Price of 230 pence per Rights Issue Share represents a discount of approximately 41.3 per cent. to the Closing Price of an Existing Ordinary Share of 392 pence on 9 January 2014 (being the latest Business Day prior to the announcement of the Rights Issue) and a 34.8 per cent. discount to the Theoretical Ex-Rights Price based on that Closing Price.

If Completion occurs, the Rights Issue proceeds will be applied (net of expenses) towards the financing of the Combination. In the event that Admission of the Rights Issue Shares is effected but Completion does not occur, the Cineworld Directors' current intention is that the proceeds of the Rights Issue will be applied to reducing the Company's net indebtedness on a short-term basis while the Cineworld Directors evaluate alternative uses of the funds. If no such uses can be found, the Cineworld Directors will consider how best to return surplus capital to Shareholders. Such a return could carry fiscal costs for certain Shareholders, will have costs for Cineworld and would be subject to applicable securities laws.

2. Terms and conditions of the Rights Issue

Subject to the terms and conditions set out in this document (and, in the case of Qualifying Non-CREST Shareholders, the Provisional Allotment Letter if they receive one), the Rights Issue Shares are being offered for acquisition by way of rights to Qualifying Shareholders on the following basis:

8 Rights Issue Shares at 230 pence per New Ordinary Share for every 25 Existing Ordinary Shares

held and registered in their name at the close of business on the Record Date and so in proportion for any other numbers of Ordinary Shares then held.

Qualifying Shareholders who do not, or who are not permitted to, take up any rights (for example because they are Excluded Shareholders) will have their proportionate shareholdings in the Company diluted by approximately 24.2 per cent. as a consequence of the Rights Issue and by a further 24.9 per cent. as a consequence of the issue of the Consideration Shares in connection with the Combination(10) (which, in aggregate, amounts to a 43.1 per cent. dilution). Those Qualifying Shareholders who are permitted to, and do, take up all of their rights to the Rights Issue Shares provisionally allotted to them in full will suffer dilution of up to 24.9 per cent. in their interests in the Company as a consequence of the issue of the Consideration Shares in connection with the Combination(10).

Holdings of Ordinary Shares in certificated and uncertificated form have been treated as separate holdings to calculate entitlements under the Rights Issue. Fractions of Rights Issue Shares will not be allotted to Qualifying Shareholders and fractional entitlements will be rounded down to the nearest whole number of Rights Issue Shares. Such fractions will be aggregated and, if possible, sold in the market. The net proceeds of such sales (after deduction of expenses) will be aggregated and an equivalent amount will accrue for the ultimate benefit of the Company. Qualifying Shareholders with fewer than 4 Ordinary Shares at the close of business on the Record Date will not receive any Rights Issue Shares.

The attention of Qualifying Shareholders and any person (including, without limitation, custodians, nominees and trustees) who has a contractual or other legal obligation to forward this document or a Provisional Allotment Letter into a jurisdiction other than the United Kingdom is drawn to Sections 9 and 10 of this Part II. In particular, subject to the provisions of Section 9 of this Part II, Qualifying Shareholders with registered addresses in the Excluded Territories have not been and will not be sent Provisional Allotment Letters and have not had and will not have their CREST stock accounts credited with Nil Paid Rights.

Application will be made to the UKLA for the Rights Issue Shares (nil paid and fully paid) to be admitted to the Official List, and to the London Stock Exchange for the Rights Issue Shares (nil paid and fully paid) to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected

⁽¹⁰⁾ Assuming that no Ordinary Shares other than the Rights Issue Shares are issued prior to Completion.

that Admission of the Rights Issue Shares will become effective and that dealings in the Rights Issue Shares will commence on the London Stock Exchange, nil paid, at 8.00 a.m. on 30 January 2014 (whereupon an announcement will be made by the Company to a Regulatory Information Service).

The Existing Ordinary Shares are already admitted to CREST. The Existing Ordinary Shares are and, when issued, the Rights Issue Shares will be in registered form and capable of being held in certificated form or uncertificated form via CREST. Applications will be made for the Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares to be admitted to CREST. Euroclear requires the Company to confirm to it that certain conditions are satisfied before Euroclear will admit the Rights Issue Shares to CREST. It is expected that these conditions will be satisfied on Admission of the Rights Issue Shares. As soon as practicable after Admission of the Rights Issue Shares, the Company will confirm this to Euroclear.

Subject to any relevant conditions being satisfied, it is expected that:

(i) Provisional Allotment Letters in respect of Nil Paid Rights will be despatched to Qualifying Non-CREST Shareholders (other than, subject to certain exceptions, Qualifying Non-CREST Shareholders with registered addresses in the Excluded Territories) following the General Meeting on 29 January 2014;
(ii) the Receiving Agent will instruct Euroclear to credit the appropriate stock accounts of Qualifying CREST Shareholders (other than, subject to certain exceptions, such Qualifying CREST Shareholders with registered addresses in the Excluded Territories) with such Shareholders' entitlements to Nil Paid Rights, with effect from 8.00 a.m. on 30 January 2014;
(iii) the Nil Paid Rights and the Fully Paid Rights will be enabled for settlement by Euroclear on 31 January 2014, as soon as practicable after the Company has confirmed to Euroclear that all the conditions for admission of such rights to CREST have been satisfied;
(iv) Rights Issue Shares will be credited to the appropriate stock accounts of relevant Qualifying CREST Shareholders (or their renouncees) who validly take up their rights by 8.00 a.m. on 14 February 2014; and
(v) share certificates for the Rights Issue Shares will be despatched to relevant Qualifying Non-CREST Shareholders (or their renouncees) who validly take up their rights by no later than the week commencing 24 February 2014 at their own risk.

Shareholders taking up their rights by completing a Provisional Allotment Letter or by sending an MTM Instruction to Euroclear will be deemed to have given the representations and warranties set out in Section 10 of this Part II, unless such requirement is waived by the Company and the Banks.

The Rights Issue Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends or other distributions made, paid or declared after the date of allotment and issue of the Rights Issue Shares.

If a Qualifying Shareholder does not, or is not permitted to, take up its entitlement to Rights Issue Shares, then the Joint Bookrunners shall use reasonable endeavours to procure acquirers for all of those Rights Issue Shares, at a price at least equal to the Rights Issue Price and the expenses of procuring such acquirers. In the event that the Joint Bookrunners are unable to procure such acquirers, the Underwriters have agreed to underwrite fully, severally and in their Due Underwriting Proportions, the Rights Issue in accordance with the terms and subject to the conditions in the Underwriting Agreement.

The Underwriting Agreement is conditional upon certain customary matters being satisfied or not breached, and it may be terminated by the Underwriters prior to Admission of the Rights Issue Shares in certain circumstances (in which case the Rights Issue may not proceed. In the event that the Rights Issue does not proceed then the Combination will not proceed). The Underwriting Agreement is not subject to any right of termination after Admission of the Rights Issue Shares (including in respect of any statutory withdrawal rights). The Underwriters may arrange sub-underwriting for some, all or none of the Rights Issue Shares. A summary of certain terms and conditions of the Underwriting Agreement is contained in Section 6.1(b) of Part XIII (Additional Information) of this document.

The Underwriters and any of their respective affiliates may engage in trading activity in connection with their roles under the Underwriting Agreement and, in that capacity, may retain, purchase, sell, offer to sell or otherwise deal for their own account in securities of the Company and related or other securities and instruments (including Ordinary Shares, Nil Paid Rights and Fully Paid Rights). None of the Underwriters intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so. In addition certain of the Underwriters or their affiliates may enter into financing arrangements (including swaps) with investors in connection with which such Underwriters (or their affiliates) may from time to time acquire, hold or dispose of Rights Issue Shares.

All documents and cheques posted to or by Qualifying Shareholders and/or their transferees or renouncees (or their agents, as appropriate) will be posted at their own risk.

If the Rights Issue is delayed so that Provisional Allotment Letters cannot be despatched on 29 January 2014, the section of this document entitled ''Expected Timetable of Principal Events'' will be adjusted accordingly and the revised dates will be set out in the Provisional Allotment Letters and announced through a Regulatory Information Service, in which case all references in this Part II should be read as being subject to such adjustment.

3. Action to be taken by Qualifying Shareholders

The action to be taken by Qualifying Shareholders in respect of the Rights Issue Shares depends on whether, at the relevant time, the Nil Paid Rights or Fully Paid Rights in respect of which action is to be taken are in certificated form (that is, are represented by Provisional Allotment Letters) or are in uncertificated form (that is, are in CREST).

If you are a Qualifying Non-CREST Shareholder and do not have a registered address in the United States or any of the other Excluded Territories (subject to certain limited exceptions), please refer to Section 4 of this Part II.

If you hold your Ordinary Shares in CREST and do not have a registered address in the United States or any of the other Excluded Territories (subject to certain limited exceptions), please refer to Section 5 of this Part II and to the CREST Manual for further information on the CREST procedures referred to below.

CREST sponsored members should refer to their CREST sponsors, as only their CREST sponsors will be able to take the necessary actions specified below to take up the entitlements or otherwise to deal with the Nil Paid Rights or Fully Paid Rights of CREST sponsored members.

If you have any questions relating to this document, or the completion and return of the Form of Proxy or Provisional Allotment Letter, please telephone Capita Asset Services between 9.00 a.m. and 5.30 p.m. (London time) Monday to Friday on 0871 664 0321 from within the UK or +44 208 639 3399 if calling from outside the UK. Calls to the 0871 664 0321 number cost 10 pence per minute (including VAT) plus your service provider's network extras. Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Transaction nor give any financial, legal or tax advice.

4. Action to be taken by Qualifying Non-CREST Shareholders in relation to Nil Paid Rights represented by Provisional Allotment Letters

(a) General

Provisional Allotment Letters are expected to be despatched to Qualifying Non-CREST Shareholders (other than, subject to certain exceptions, Qualifying Non-CREST Shareholders with registered addresses in the Excluded Territories) on 29 January 2014. The Provisional Allotment Letter sets out:

(i) the holding of Ordinary Shares on which a Qualifying Non-CREST Shareholder's entitlement to Rights Issue Shares has been based;
(ii) the aggregate number and cost of Rights Issue Shares provisionally allotted to such Qualifying Non-CREST Shareholder;
(iii) the procedures to be followed if a Qualifying Non-CREST Shareholder wishes to dispose of all or part of his entitlement or to convert all or part of his entitlement into uncertificated form; and
(iv) instructions regarding acceptance and payment, consolidation, splitting and registration of renunciation.

The latest time and date for acceptance and payment in full will be 11.00 a.m. on 13 February 2014.

If the Rights Issue is delayed so that Provisional Allotment Letters cannot be despatched on 29 January 2014, the expected timetable, as set out at the front of this document, will be adjusted accordingly and the revised dates will be set out in the Provisional Allotment Letters and announced through a Regulatory Information Service, in which case all relevant references in this Part II should be read as being subject to such adjustment.

(b) Procedure for acceptance and payment

(i) Qualifying Non-CREST Shareholders who wish to accept in full

Holders of Provisional Allotment Letters who wish to take up all of their Nil Paid Rights should complete the Provisional Allotment Letter in accordance with its instructions. The Provisional Allotment Letter must be returned, together with the cheque or banker's draft in Pounds Sterling, made payable to ''Capita Registrars Limited Re Cineworld Group Plc Rights Issue A/C'' and crossed ''A/C payee only'', for the full amount payable on acceptance, in accordance with the instructions printed on the Provisional Allotment Letter, by post or by hand (during normal business hours only) to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU so as to be received as soon as possible and, in any event, not later than 11.00 a.m. on 13 February 2014. A prepaid business reply envelope is enclosed with the Provisional Allotment Letter (for use within the UK only). If you post your Provisional Allotment Letter, it is recommended that you allow sufficient time for delivery (for instance, allowing four days for first class post within the UK). Payments via CHAPs, BACS or electronic transfer will not be accepted.

(ii) Qualifying Non-CREST Shareholders who wish to accept in part

Holders of Provisional Allotment Letters who wish to take up some but not all of their Nil Paid Rights should refer to Section 4(f) of this Part II.

(iii) Qualifying Non-CREST Shareholders who wish to dispose of some or all of their Nil Paid Rights

Any Qualifying Non-CREST Shareholder who is permitted to, and wishes to, dispose of all or part of his Nil Paid Rights should contact his or her stockbroker or bank or other appropriate authorised independent financial adviser to arrange the disposal of those Nil Paid Rights in the market. The stockbroker, bank or other authorised independent financial adviser will require the Provisional Allotment Letter to arrange such a disposal and you will need to make arrangements with the stockbroker, bank or other authorised independent financial adviser for the completion of the Provisional Allotment Letter and its despatch to the stockbroker, bank or other authorised independent financial adviser. Further information about such disposals by Qualifying Non-CREST Shareholders is set out in Section 4(d) of this Part II.

Nil Paid Rights may only be transferred in compliance with applicable securities laws and regulations of all relevant jurisdictions.

(iv) Discretion as to validity of acceptances

If payment as set out in Section 4(b)(v) of this Part II is not received in full by 11.00 a.m. on 13 February 2014, the provisional allotment will be deemed to have been declined and will lapse. However, the Company (in consultation with the Banks) may, by mutual agreement, but shall not be obliged to, treat as valid acceptances in respect of which remittances for the full amount are received prior to 11.00 a.m. on 13 February 2014 from an authorised person (as defined in section 31(2) of FSMA) specifying the number of Rights Issue Shares to be acquired and an undertaking by that person to lodge the relevant Provisional Allotment Letter, duly completed, by a time and date which are satisfactory to the Company, having consulted with the Banks, in its sole discretion.

The Company, having consulted with the Banks, may also (in its absolute discretion) treat a Provisional Allotment Letter as valid and binding on the person(s) by whom or on whose behalf it is lodged even if it is not completed in accordance with the relevant instructions or is not accompanied by a valid power of attorney where required.

The Company reserves the right to treat as invalid any acceptance or purported acceptance of the Rights Issue Shares that appears to the Company to have been executed in, despatched from, or that provides an address for delivery of definitive share certificates for Rights Issue Shares in, an Excluded Territory.

A Qualifying Non-CREST Shareholder who makes a valid acceptance and payment in accordance with this paragraph is deemed to request that the Rights Issue Shares to which they will become entitled be issued to them on the terms set out in this document and the Provisional Allotment Letter and subject to the Articles.

(v) Payments

All payments made by Qualifying Non-CREST Shareholders must be made in Pounds Sterling by cheque or banker's draft in Pounds Sterling made payable to ''Capita Registrars Limited Re Cineworld Group Plc Rights Issue A/C'' and crossed ''A/C payee only''. Third party cheques may not be accepted except building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the back of the cheque or draft to such effect. Cheques or banker's drafts must be drawn on an account at a branch (which must be in the United Kingdom, the Channel Islands or the Isle of Man) of a bank or building society which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques and banker's drafts to be cleared through facilities provided by either of these companies. Such cheques and banker's drafts must bear the appropriate sort code in the top right-hand corner. Post-dated cheques will not be accepted. Payments via CHAPS, BACS or electronic transfer will not be accepted.

Cheques and banker's drafts will be presented for payment on receipt, and held in a non-interest bearing account. It is a term of the Rights Issue that cheques shall be honoured on first presentation, and the Company may elect to treat as invalid any acceptances in respect of which cheques are not so honoured. Return of a Provisional Allotment Letter will constitute a warranty that the cheque will be honoured on first presentation. All documents, cheques and banker's drafts sent through the post will be sent at the risk of the sender. If Rights Issue Shares have already been allotted to Qualifying Shareholders prior to any payment not being so honoured or such Qualifying Shareholders' acceptances being treated as invalid, the Company may (in its absolute discretion as to manner, timing and terms) make arrangements for the sale of such shares on behalf of those Qualifying Shareholders and hold the proceeds of sale (net of the Company's reasonable estimate of any loss that it has suffered as a result of the acceptance being treated as invalid and of the expenses of sale including, without limitation, any stamp duty or SDRT payable on the transfer of such shares, and of all amounts payable by such Qualifying Shareholders pursuant to the provisions of this Part II in respect of the acquisition of such shares) on behalf of such Qualifying Shareholders. None of the Company, the Banks or any other person shall be responsible for, or have any liability for, any loss, expenses or damage suffered by Qualifying Shareholders as a result.

(c) Money Laundering Regulations

To ensure compliance with the Money Laundering Regulations, the Receiving Agent may require, at its absolute discretion, verification of the identity of the person by whom or on whose behalf the Provisional Allotment Letter is lodged with payment (which requirements are referred to below as the ''verification of identity requirements''). If an application is made by a UK regulated broker or intermediary acting as agent and which is itself subject to the Money Laundering Regulations, any verification of identity requirements are the responsibility of such broker or intermediary and not of the Receiving Agent. In such case, the lodging agent's stamp should be inserted on the Provisional Allotment Letter. The person lodging the Provisional Allotment Letter with payment (the applicant), including any person who appears to the Receiving Agent to be acting on behalf of some other person, shall thereby be deemed to agree to provide the Receiving Agent with such information and other evidence as the Receiving Agent may require to satisfy the verification of identity requirements and agree for the Receiving Agent to make a search using a credit reference agency for the purpose of confirming such identity; where deemed necessary a record of the search will be retained. Submission of a Provisional Allotment Letter will constitute a warranty that the Money Laundering Regulations will not be breached by the acceptance of the remittance and an undertaking by the applicant to provide promptly to the Receiving Agent such information as may be specified by the Receiving Agent as being required for the purpose of the Money Laundering Regulations.

If the Receiving Agent determines that the verification of identity requirements apply to any applicant or application, the relevant Rights Issue Shares (notwithstanding any other term of the Rights Issue) will not be issued to the relevant applicant unless and until the verification of identity requirements have been satisfied in respect of that applicant or application. The Receiving Agent is entitled, in its absolute discretion, to determine whether the verification of identity requirements apply to any applicant or application and whether such requirements have been satisfied, and none of the Receiving Agent, the Company or the Banks will be liable to any person for any loss or damage suffered or incurred (or alleged), directly or indirectly, as a result of the exercise of such discretion.

If the verification of identity requirements apply, failure to provide the necessary evidence of identity within a reasonable time may result in delays and potential rejection of an application. If, within a reasonable period of time following a request for verification of identity, the Receiving Agent has not received evidence satisfactory to it as aforesaid, the Company may, in its absolute discretion, treat the relevant application as invalid, in which event the application monies will be returned (at the applicant's risk) without interest to the account of the bank or building society on which the relevant cheque or banker's draft was drawn. If the acceptance is not treated as invalid and the verification of identity requirements are not satisfied within such period, being not less than seven days after a request for evidence of identity is despatched to the applicant, as the Company may in its absolute discretion allow, the Company will be entitled to make arrangements (in its absolute discretion as to manner, timing and terms) to sell the relevant shares (and for that purpose the Company will be expressly authorised to act as agent of the applicant). Any proceeds of sale (net of expenses) of the relevant shares which shall be issued to and registered in the name of the purchaser(s) or an amount equivalent to the original payment, whichever is the lower, will be held by the Company on trust for the applicant, subject to the requirements of the Money Laundering Regulations.

The verification of identity requirements will not usually apply if:

(a) the applicant is an organisation required to comply with the EU Money Laundering Directive (2005/60/EC);
(b) the applicant is a regulated United Kingdom broker or intermediary acting as agent and is itself subject to the Money Laundering Regulations;
(c) the applicant (not being an applicant who delivers his/her application in person) makes payment by way of a cheque drawn on an account in the name of such applicant; or
(d) the aggregate price for taking up the relevant Rights Issue Shares is less than EUR 15,000 (or its Pounds Sterling equivalent).

In other cases, the verification of identity requirements may apply. Satisfaction of these requirements may be facilitated in the following ways:

(i) if payment is made by building society cheque (not being a cheque drawn on an account of the applicant) or banker's draft, by the building society or bank endorsing on the back of the cheque or draft the applicant's name and the number of an account held in the applicant's name at such building society or bank, such endorsement being validated by a stamp and an authorised signature;
(ii) if the Provisional Allotment Letter(s) is/are lodged with payment by an agent which is an organisation of the kind referred to in sub-section (a) above or which is subject to anti-money laundering regulations in a country which is a member of the Financial Action Task Force (the non-EU members of which are Argentina, Australia, Brazil, Canada, Gibraltar, Hong Kong, Iceland, Japan, Mexico, Luxembourg, New Zealand, Norway, the Russian Federation, Singapore, South Africa, Switzerland, Turkey and the United States and, by virtue of their membership of the Gulf Co-operation Council, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE), the agent should provide with the Provisional Allotment Letter(s) written confirmation that it has that status and written assurance that it has obtained and recorded evidence of the identity of the person for whom it acts and that it will on demand make such evidence available to the Receiving Agent and/or any relevant regulatory or investigatory authority.

In order to confirm the acceptability of any written assurance referred to in this sub-section (ii), or in any other case, the applicant should contact the Receiving Agent. The telephone number of the Receiving Agent is 0871 664 0321 or +44 20 8639 3399 if calling from overseas. Calls to the 0871 664 0321 number from inside the UK are charged at 10 pence per minute plus network extras. Calls to the +44 20 8639 3399 number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be randomly monitored for security and training purposes; or

(iii) if the Provisional Allotment Letter(s) is/are lodged by hand by the applicant in person, the applicant should ensure that they have evidence of identity bearing their photograph (for example, the applicant's passport) and separate evidence of their address.

(d) Dealings in Nil Paid Rights

Dealings on the London Stock Exchange in the Nil Paid Rights are expected to commence at 8.00 a.m. on 30 January 2014. A transfer of Nil Paid Rights can be made by renunciation of the Provisional Allotment Letter in accordance with the instructions printed on it or, in the case of any person in whose favour the rights have been renounced, by delivery of such letter to the transferee.

(e) Dealings in Fully Paid Rights

After acceptance of the provisional allotment and payment in full in accordance with the provisions set out in this document and the Provisional Allotment Letter, the Fully Paid Rights may be transferred by renunciation of the relevant fully paid Provisional Allotment Letter and lodging of the same, by post or by hand (during normal business hours only), with the Receiving Agent, so as to be received not later than 11.00 a.m. on 13 February 2014. To do this, a Qualifying Non-CREST Shareholder will need to have his fully paid Provisional Allotment Letter returned to him after the acceptance has been effected by the Receiving Agent. However, fully paid Provisional Allotment Letters will not be returned to Qualifying Non-CREST Shareholders unless their return is requested by ticking Box 4 on page 4 of the Provisional Allotment Letter.

After 14 February 2014, the Rights Issue Shares will be in registered form and transferable in the usual way.

(f) Renunciation and splitting of Provisional Allotment Letters

Qualifying Non-CREST Shareholders who wish to transfer all of their Nil Paid Rights or, after acceptance of the provisional allotment and payment in full, Fully Paid Rights comprised in a Provisional Allotment Letter may (save as required by the laws of certain overseas jurisdictions) renounce such allotment by completing and signing Form X on page 4 of the Provisional Allotment Letter (if it is not already marked ''Original Duly Renounced'') and passing the entire Provisional Allotment Letter to their stockbroker or bank or other appropriate financial adviser or to the transferee. Once a Provisional Allotment Letter has been renounced, it will become a negotiable instrument in bearer form. The latest time and date for registration of renunciation of Provisional Allotment Letters is 11.00 a.m. on 13 February 2014.

If a holder of a Provisional Allotment Letter wishes to have only some of the Rights Issue Shares registered in his name and to transfer the remainder, or wishes to transfer all the Nil Paid Rights, or (if appropriate) Fully Paid Rights, but to different persons, he may have the Provisional Allotment Letter split, for which purpose he must sign and date Form X on page 4 of the Provisional Allotment Letter. The Provisional Allotment Letter must then be delivered by post or by hand (during normal business hours only) to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU by not later than 3.00 p.m. on 11 February 2014, to be cancelled and exchanged for the split Provisional Allotment Letters required. The number of split Provisional Allotment Letters required and the number of Nil Paid Rights or (as appropriate) Fully Paid Rights to be comprised in each split Provisional Allotment Letter should be stated in an accompanying letter. Form X on page 4 of split Provisional Allotment Letters will be marked ''Original Duly Renounced'' before issue. The Provisional Allotment Letter will then be cancelled and exchanged for split Provisional Allotment Letters. The split Provisional Allotment Letter representing the Rights Issue Shares they wish to accept should be delivered together with the cheque or banker's draft in Pounds Sterling for the appropriate amount, made payable to ''Capita Registrars Limited Re Cineworld Group Plc Rights Issue A/C'' and crossed ''A/C payee only'' by 11.00 a.m. on 13 February 2014, the last date and time for acceptance. The second Provisional Allotment Letter (representing the Rights Issue Shares they do not wish to take up) will be required in order to sell those rights.

Alternatively, Qualifying Non-CREST Shareholders who wish to take up some of their rights, without selling or transferring the remainder, should complete the boxes on page 1 of the Provisional Allotment Letter and Form X on page 4 of the original Provisional Allotment Letter and return it by post or by hand (during normal business hours only) to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU together with a covering letter confirming the number of Rights Issue Shares to be taken up and a cheque for the appropriate amount made payable to ''Capita Registrars Limited Re Cineworld Group Plc Rights Issue A/C'' and crossed A/C payee only and with the Allotment Number which appears on page 1 of the Provisional Allotment Letter, written on the reverse of the cheque or banker's draft to pay for this number of shares. In this case, the Provisional Allotment Letter and cheque or banker's draft must be received by the Receiving Agent by 3.00 p.m. on 11 February 2014, being the last date and time for splitting Nil Paid Rights.

The Company reserves the right to refuse to register any renunciation in favour of any person where the Company believes such renunciation may violate applicable legal or regulatory requirements including (without limitation) any renunciation in the name of any person with an address outside the United Kingdom.

(g) Registration in names of Qualifying Shareholders

A Qualifying Shareholder who wishes to have all the Rights Issue Shares to which he is entitled registered in his name must accept and make payment for such allotment in accordance with the provisions set out in this document and (in the case of Qualifying Non-CREST Shareholders) the Provisional Allotment Letter.

(h) Registration in names of persons other than Qualifying Shareholders originally entitled

To register the Rights Issue Shares in certificated form in the name of someone other than the Qualifying Shareholder(s) originally entitled, the renouncee or his agent(s) must complete Form Y on page 4 of the Provisional Allotment Letter (unless the renouncee is a CREST member who wishes to hold such Rights Issue Shares in uncertificated form, in which case Form X and the CREST Deposit Form (both on page 4 of the Provisional Allotment Letter) must be completed (see Section 4(i) of this Part II)) and send the entire Provisional Allotment Letter, by post or by hand (during normal business hours only) to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU so as to be received by not later than 11.00 a.m. on 13 February 2014. Registration cannot be effected unless and until the Rights Issue Shares comprised in a Provisional Allotment Letter are fully paid.

The Rights Issue Shares comprised in two or more Provisional Allotment Letters (duly renounced where applicable) may be registered in the name of one holder (or joint holders). To consolidate rights attached to two or more Provisional Allotment Letters, complete Form Y on page 4 of the Provisional Allotment Letter and attach a letter detailing each Provisional Allotment Letter number (as shown on page 1 of the Provisional Allotment Letter), the number of Rights Issue Shares represented by each Provisional Allotment Letter, the total number of Provisional Allotment Letters to be consolidated and the total number of Rights Issue Shares represented by all the Provisional Allotment Letters to be consolidated. All the Provisional Allotment Letters to be consolidated must be lodged in one batch together.

(i) Deposit of Nil Paid Rights or Fully Paid Rights into CREST

The Nil Paid Rights or Fully Paid Rights represented by a Provisional Allotment Letter may be converted into uncertificated form, that is, deposited into CREST (whether such conversion arises as a result of a renunciation of those rights or otherwise). Similarly, Nil Paid Rights or Fully Paid Rights held in CREST may be converted into certificated form, that is, withdrawn from CREST. Subject as provided in the following Section or in the Provisional Allotment Letter, normal CREST procedures and timings apply in relation to any such conversion. Shareholders are recommended to refer to the CREST Manual for details of such procedures.

The procedure for depositing the Nil Paid Rights or Fully Paid Rights represented by a Provisional Allotment Letter into CREST, whether such rights are to be converted into uncertificated form in the name(s) of the person(s) whose name(s) and address(es) appear on page 1 of the Provisional Allotment Letter or in the name of a person or persons to whom the Provisional Allotment Letter has been renounced, is as follows: Form X and the CREST Deposit Form (both on page 4 of the Provisional Allotment Letter) will need to be completed and the Provisional Allotment Letter deposited with the CCSS (as this term is defined in the CREST Manual). In addition, the normal CREST Stock Deposit procedures will need to be carried out, except that: (a) it will not be necessary to complete and lodge a separate CREST Transfer Form (prescribed under the Stock Transfer Act 1963) with the CCSS; and (b) only the whole of the Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter may be deposited into CREST. If a Shareholder wishes to deposit some only of the Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter into CREST, he must first apply for split Provisional Allotment Letters in accordance with Section 4(f) of this Part II. If the rights represented by more than one Provisional Allotment Letter are to be deposited, the CREST Deposit Form on each Provisional Allotment Letter must be completed and deposited.

A holder of the Nil Paid Rights (or, if appropriate, the Fully Paid Rights) represented by a Provisional Allotment Letter who is proposing to convert those rights into uncertificated form (whether following a renunciation of such rights or otherwise) is recommended to ensure that the conversion procedures are implemented in sufficient time to enable the person holding or acquiring the Nil Paid Rights (or, if appropriate, the Fully Paid Rights) in CREST following the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 13 February 2014. In particular, having regard to processing times in CREST and on the part of the Receiving Agent, the latest recommended time for depositing a renounced Provisional Allotment Letter (with Form X and the CREST Deposit Form on page 4 of the Provisional Allotment Letter duly completed) with the CCSS (to enable the person acquiring the Nil Paid Rights (or, if appropriate, the Fully Paid Rights) in CREST as a result of the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 13 February 2014) is 3.00 p.m. on 10 February 2014.

When Form X and the CREST Deposit Form (both on page 4 of the Provisional Allotment Letter) have been completed, the title to the Nil Paid Rights or the Fully Paid Rights represented by the Provisional Allotment Letter will cease forthwith to be renounceable or transferable by delivery and, for the avoidance of doubt, any entries in Form Y on page 4 of the Provisional Allotment Letter will not be recognised or acted upon by the Receiving Agent. All renunciations or transfers of the Nil Paid Rights or Fully Paid Rights must be effected through the means of the CREST system once such rights have been deposited into CREST.

CREST sponsored members should contact their CREST sponsors, as only their CREST sponsors will be able to take the necessary actions to take up the entitlements or otherwise to deal with the Nil Paid Rights or Fully Paid Rights of CREST sponsored members.

(j) Issue of Rights Issue Shares in definitive form

Definitive share certificates in respect of the Rights Issue Shares to be held in certificated form are expected to be despatched by post by no later than the week commencing 24 February 2014, at the risk of persons entitled thereto, to Qualifying Non-CREST Shareholders or to persons entitled thereto at their registered address (unless lodging agent details have been completed on page 4 of the Provisional Allotment Letter). After despatch of definitive share certificates, Provisional Allotment Letters will cease to be valid for any purpose whatsoever. Pending despatch of definitive share certificates, instruments of transfer of the Rights Issue Shares will be certified by the Registrar against the register.

5. Action to be taken by Qualifying CREST Shareholders in relation to Nil Paid Rights in CREST

(a) General

Subject as provided in Sections 9 and 10 in this Part II in relation to certain Excluded Shareholders, each Qualifying CREST Shareholder is expected to receive a credit to his CREST stock account of his entitlement to Nil Paid Rights on 30 January 2014. The CREST stock account to be credited will be an account under the participant ID and member account ID that apply to the Ordinary Shares held on the Record Date by the Qualifying CREST Shareholder in respect of which the Nil Paid Rights are provisionally allotted.

The maximum number of Rights Issue Shares that a Qualifying CREST Shareholder may take up is that which has been provisionally allotted to that Qualifying CREST Shareholder and for which he receives a credit of entitlement into his stock account in CREST. The minimum number of Rights Issue Shares a Qualifying CREST Shareholder may take up is one.

The Nil Paid Rights constitute a separate security for the purposes of CREST and can accordingly be transferred, in whole or in part, by means of CREST in the same manner as any other security that is admitted to CREST.

If for any reason it is impracticable to credit the stock accounts of Qualifying CREST Shareholders or to enable the Nil Paid Rights, Provisional Allotment Letters shall, unless the Company determines otherwise, be sent out in substitution for the Nil Paid Rights which have not been so credited or enabled and the expected timetable as set out in this document will be adjusted as appropriate. References to dates and times in this document should be read as subject to any such adjustment. The Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates but Qualifying CREST Shareholders may not receive any further written communication.

CREST members who wish to take up all or part of their entitlements in respect of, or otherwise to transfer all or part of, their Nil Paid Rights or Fully Paid Rights held by them in CREST should refer to the CREST Manual for further information on the CREST procedures referred to below. If you are a CREST sponsored member, you should consult your CREST sponsor if you wish to take up your entitlement, as only your CREST sponsor will be able to take the necessary action to take up your entitlement or otherwise deal with your Nil Paid Rights or Fully Paid Rights.

(b) Procedure for acceptance and payment

(i) MTM Instructions

CREST members who wish to take up all or part of their entitlement in respect of Nil Paid Rights in CREST must send (or, if they are CREST sponsored members, procure that their CREST sponsor sends) an MTM Instruction to Euroclear which, on its settlement, will have the following effect:

(a) the crediting of a stock account of the Receiving Agent under the participant ID and member account ID specified below, with the number of Nil Paid Rights to be taken up;
(b) the creation of a settlement bank payment obligation (as this term is defined in the CREST Manual), in accordance with the RTGS payment mechanism (as this term is defined in the CREST Manual), in favour of the RTGS settlement bank of the Receiving Agent in respect of the full amount payable on acceptance in respect of the Nil Paid Rights referred to in sub-section (a) above; and
(c) the crediting of a stock account of the accepting CREST member (being an account under the same participant ID and member account ID as the account from which the Nil Paid Rights are to be debited on settlement of the MTM Instruction) of the corresponding number of Fully Paid Rights to which the CREST member is entitled on taking up his Nil Paid Rights referred to in sub-section (a) above.

(ii) Contents of MTM Instructions

The MTM Instruction must be properly authenticated in accordance with Euroclear's specifications and must contain, in addition to the other information that is required for settlement in CREST, the following details:

the number of Nil Paid Rights to which the acceptance relates;
the participant ID of the accepting CREST member;
the member account ID of the accepting CREST member from which the Nil Paid Rights are to be debited;
the participant ID of the Receiving Agent, in its capacity as a CREST receiving agent. This is 7RA33;
the member account ID of the Receiving Agent, in its capacity as a CREST receiving agent. This is 28144CIN;
the number of Fully Paid Rights that the CREST member is expecting to receive on settlement of the MTM Instruction. This must be the same as the number of Nil Paid Rights to which the acceptance relates;
the amount payable by means of the CREST assured payment arrangements on settlement of the MTM Instruction. This must be the full amount payable on acceptance in respect of the number of Nil Paid Rights to which the acceptance relates;
the intended settlement date (which must be on or before 11.00 a.m. on 13 February 2014);
the Nil Paid ISIN which is GB00BH7JGG67;
the Fully Paid ISIN which is GB00BH7JGJ98;
the Corporate Action Number for the Rights Issue. This will be available by viewing the relevant corporate action details in CREST;
a contact name and telephone number (in the free format shared note field); and
a priority of at least 80.

(iii) Valid acceptance

An MTM Instruction complying with each of the requirements as to authentication and contents set out in sub-section (b) (ii) of this Section 5 of this Part II will constitute a valid acceptance where either:

(a) the MTM Instruction settles by not later than 11.00 a.m. on 13 February 2014; or
(b) at the discretion of the Company: (i) the MTM Instruction is received by Euroclear by not later than 11.00 a.m. on 13 February 2014; (ii) the number of Nil Paid Rights inserted in the MTM Instruction is credited to the CREST stock account of the accepting CREST member specified in the MTM Instruction at 11.00 a.m. on 13 February 2014; and (iii) the relevant MTM Instruction settles by 2.00 p.m. on 13 February 2014 (or such later date as the Company has determined).

An MTM Instruction will be treated as having been received by Euroclear for these purposes at the time at which the instruction is processed by the Network Provider's Communications Host (as this term is defined in the CREST Manual) at Euroclear of the network provider used by the CREST member (or by the CREST sponsored member's CREST sponsor). This will be conclusively determined by the input time stamp applied to the MTM Instruction by the Network Provider's Communications Host.

(iv) Representations, warranties and undertakings of CREST members

A CREST member or CREST sponsored member who makes a valid acceptance in accordance with this Section 5 of this Part II represents, warrants and undertakes to the Company and the Banks that he has taken (or procured to be taken), and will take (or will procure to be taken), whatever action is required to be taken by him/her/it or by his/her/its CREST sponsor (as appropriate) to ensure that the MTM Instruction concerned is capable of settlement at 11.00 a.m. on 13 February 2014 and remains capable of settlement at all times after that until 2.00 p.m. on 13 February 2014 (or until such later time and date as the Company and the Banks may determine). In particular, the CREST member or CREST sponsored member represents, warrants and undertakes that at 11.00 a.m. on 13 February 2014 and at all times thereafter that until 2.00 p.m. on 13 February 2014 (or until such later time and date as the Company and the Banks may determine) there will be sufficient Headroom within the Cap (as those terms are defined in the CREST Manual) in respect of the cash memorandum account to be debited with the amount payable on acceptance to permit the MTM Instruction to settle. CREST sponsored members should contact their CREST sponsor if they are in any doubt. In addition, such CREST sponsored member taking up entitlements makes the representations and gives the warranties set out in Section 10(b) of this Part II.

If there is insufficient Headroom within the Cap (as those terms are defined in the CREST Manual) in respect of the cash memorandum account of a CREST member or CREST sponsored member for such amount to be debited or the CREST member's or CREST sponsored member's acceptance is otherwise treated as invalid and Rights Issue Shares have already been allotted to such CREST member or CREST sponsored member, the Company may (in its absolute discretion as to manner, timing and terms) make arrangements for the sale of such Rights Issue Shares on behalf of that CREST member or CREST sponsored member and hold the proceeds of sale (net of the Company's reasonable estimate of any loss that they have suffered as a result of the acceptance being treated as invalid and of the expenses of sale including, without limitation, any stamp duty or SDRT payable on the transfer of such Rights Issue Shares, and of all amounts payable by the CREST member or CREST sponsored member pursuant to the provisions of this Part II in respect of the acquisition of such Rights Issue Shares) on behalf of such CREST member or CREST sponsored member. None of the Company, the Banks or any other person shall be responsible for, or have any liability for, any loss, expenses or damage suffered by such CREST member or CREST sponsored member as a result.

(v) CREST procedures and timings

CREST members and CREST sponsors (on behalf of CREST sponsored members) should note that Euroclear does not make available special procedures in CREST for any particular corporate action.

Normal system timings and limitations will therefore apply in relation to the input of an MTM Instruction and its settlement in connection with the Rights Issue. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST sponsored member, to procure that his CREST sponsor takes) the action necessary to ensure that a valid acceptance is received as stated above by 11.00 a.m. on 13 February 2014. In this connection, CREST members and (where applicable) CREST sponsors are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

(vi) CREST member's undertaking to pay

A CREST member or CREST sponsored member, who makes a valid acceptance in accordance with the procedures set out in this Section 5 of this Part II: (a) undertakes to pay to the Receiving Agent, or procure the payment to the Receiving Agent of, the amount payable in Pounds Sterling on acceptance in accordance with the above procedures or in such other manner as the Receiving Agent may require (it being acknowledged that, where payment is made by means of the RTGS payment mechanism (as defined in the CREST Manual) the creation of a RTGS settlement bank payment obligation in Pounds Sterling in favour of the Receiving Agent's RTGS settlement bank (as defined in the CREST Manual), in accordance with the RTGS payment mechanism shall, to the extent of the obligation so created, discharge in full the obligation of the CREST member (or CREST sponsored member) to pay to the Receiving Agent the amount payable on acceptance); and (b) requests that the Fully Paid Rights and/or Rights Issue Shares, to which they will become entitled, be issued to them on the terms set out in this document and subject to the Articles.

If the payment obligations of the relevant CREST member in relation to such Rights Issue Shares are not discharged in full and such Rights Issue Shares have already been allotted to the CREST member or CREST sponsored member, the Company may (in its absolute discretion as to the manner, timing and terms) make arrangements for the sale of such shares on behalf of that CREST member or CREST sponsored member and hold the proceeds of sale (net of the Company's reasonable estimate of any loss that it has suffered as a result of the same and of the expenses of sale including, without limitation, any stamp duty or SDRT payable on the transfer of such shares, and all amounts payable by the CREST member or CREST sponsored member pursuant to the provisions of this Part II in respect of the acquisition of such shares) or an amount equal to the original payment of the CREST member or CREST sponsored member (whichever is lower) on trust for such CREST member or CREST sponsored member. In these circumstances, neither the Banks nor the Company shall be responsible for, or have any liability for, any loss, expenses or damage arising as a result.

(vii) Discretion as to rejection and validity of acceptances

The Company may (having consulted with the Banks) agree in its absolute discretion to:

(a) reject any acceptance constituted by an MTM Instruction, which is otherwise valid, in the event of breach of any of the representations, warranties and undertakings set out or referred to in this Section 5 of this Part II (and, to the extent applicable, pursuant to Section 10(b) of this Part II). Where an acceptance is made as described in this Section 5 of this Part II which is otherwise valid, and the MTM Instruction concerned fails to settle by 2.00 p.m. on 13 February 2014 (or by such later time and date as the Company and the Banks may determine), the Company and the Banks shall be entitled to assume, for the purposes of the Company's right to reject an acceptance as described in this Section 5 of this Part II, that there has been a breach of the representations, warranties and undertakings set out or referred to in this Section 5 of this Part II.
(b) treat as valid (and binding on the CREST member or CREST sponsored member concerned) an acceptance which does not comply in all respects with the requirements as to validity set out or referred to in this Section 5 of this Part II;
(c) accept an alternative properly authenticated dematerialised instruction from a CREST member or (where applicable) a CREST sponsor as constituting a valid acceptance in substitution for, or in addition to, an MTM Instruction and subject to such further terms and conditions as the Company and the Banks may determine;
(d) treat a properly authenticated dematerialised instruction (in this sub-section the first instruction) as not constituting a valid acceptance if, at the time at which the Receiving Agent receives a properly authenticated dematerialised instruction giving details of the first instruction, either the Company or the Receiving Agent has received actual notice from Euroclear of any of the matters specified in Regulation 35(5)(a) of the Uncertificated Securities Regulations in relation to the first instruction. These matters include notice that any information contained in the first instruction was incorrect or notice of lack of authority to send the first instruction; and
(e) accept an alternative instruction or notification from a CREST member or (where applicable) a CREST sponsor, or extend the time for acceptance and/or settlement of an MTM Instruction or any alternative instruction or notification if, for reasons or due to circumstances outside the control of any CREST member or CREST sponsored member or (where applicable) CREST sponsor, the CREST

member or CREST sponsored member is unable validly to take up all of part of his/her Nil Paid Rights by means of the above procedures. In normal circumstances, this discretion is only likely to be exercised in the event of any interruption, failure or breakdown of CREST (or of any part of CREST) or on the part of facilities and/or systems operated by the Receiving Agent in connection with CREST.

(c) Money Laundering Regulations

If a person holds his Nil Paid Rights in CREST and applies to take up all or part of his entitlement as agent for one or more persons, and he is not a UK or EU regulated person or institution (e.g. a UK financial institution), then, irrespective of the value of the application, the Receiving Agent is required to take reasonable measures to establish the identity of the person or persons on whose behalf the person is making the application. Such person must therefore contact the Receiving Agent before sending any MTM Instruction or other instruction so that appropriate measures may be taken.

Submission of an MTM Instruction which constitutes, or which may on its settlement constitute, a valid acceptance as described above constitutes a warranty and undertaking by the applicant to provide promptly to the Receiving Agent any information the Receiving Agent may specify as being required for the purposes of the Money Laundering Regulations or FSMA. Pending the provision of evidence satisfactory to the Receiving Agent as to identity, the Receiving Agent, having consulted with the Company and the Banks, may take, or omit to take, such action as it may determine to prevent or delay settlement of the MTM Instruction. If satisfactory evidence of identity has not been provided within a reasonable time, then the Receiving Agent will not permit the MTM Instruction concerned to proceed to settlement, but without prejudice to the right of the Company to take proceedings to recover any loss suffered by it as a result of failure by the applicant to provide satisfactory evidence.

(d) Dealings in Nil Paid Rights

Assuming the Rights Issue becomes unconditional, dealings in the Nil Paid Rights on the London Stock Exchange are expected to commence at 8.00 a.m. on 30 January 2014. Dealings in Nil Paid Rights can be made by means of CREST in the same manner as any other security that is admitted to CREST. The Nil Paid Rights are expected to be disabled in CREST after the close of CREST business on 13 February 2014.

(e) Dealings in Fully Paid Rights

After acceptance of the provisional allotment and payment in full in accordance with the provisions set out in this document, the Fully Paid Rights may be transferred by means of CREST in the same manner as any other security that is admitted to CREST. The last time for settlement of any transfer of Fully Paid Rights in CREST is expected to be 11.00 a.m. on 13 February 2014. The Fully Paid Rights are expected to be disabled in CREST after the close of CREST business on 13 February 2014.

After 14 February 2014, the Rights Issue Shares will be registered in the name(s) of the person(s) entitled to them in the Company's register of members and will be transferable in the usual way.

(f) Withdrawal of Nil Paid Rights or Fully Paid Rights from CREST

Nil Paid Rights or Fully Paid Rights held in CREST may be converted into certificated form, that is, withdrawn from CREST. Normal CREST procedures (including timings) apply in relation to any such conversion.

The recommended latest time for receipt by Euroclear of a properly authenticated dematerialised instruction requesting withdrawal of Nil Paid Rights or, if appropriate, Fully Paid Rights, from CREST is 4.30 p.m. on 7 February 2014, so as to enable the person acquiring or (as appropriate) holding the Nil Paid Rights or, if appropriate, Fully Paid Rights, following the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 13 February 2014. It is recommended that you refer to the CREST Manual for details of such procedures.

(g) Issue of Rights Issue Shares in CREST

Fully Paid Rights in CREST are expected to be disabled in CREST after the close of CREST business on 13 February 2014 (the latest date for settlement of transfers of Fully Paid Rights in CREST). Rights Issue Shares will be issued in uncertificated form to those persons registered as holding Fully Paid Rights in CREST at the close of business on the date on which the Fully Paid Rights are disabled. The Receiving Agent will instruct Euroclear to credit the appropriate stock accounts of those persons (under the same

participant ID and member account ID that applied to the Fully Paid Rights held by those persons) with their entitlements to Rights Issue Shares with effect from the next Business Day (expected to be 14 February 2014).

(h) Right to allot/issue in certificated form

Despite any other provision of this document, the Company reserves the right to allot and to issue any Nil Paid Rights, Fully Paid Rights or Rights Issue Shares in certificated form. In normal circumstances, this right is only likely to be exercised in the event of an interruption, failure or breakdown of CREST (or of any part of CREST) or of a part of the facilities and/or systems operated by the Receiving Agent in connection with CREST.

6. Procedure in respect of Rights Issue Shares not taken up

If an entitlement to Rights Issue Shares is not validly taken up in accordance with the procedure laid down for acceptance and payment, then that provisional allotment shall be deemed to have been declined and will lapse. If an entitlement to Rights Issue Shares is not validly taken up by 11.00 a.m. on 13 February 2014 in accordance with the procedure laid down for acceptance and payment, then the Joint Bookrunners will use reasonable endeavours to procure, by not later than 4.30 p.m. on 17 February 2014, acquirers for all (or as many as possible) of those Rights Issue Shares not taken up, provided that an amount not less than the total of the Rights Issue Price and the expenses of procuring such acquirers (including any related commissions and amounts in respect of VAT which are not recoverable) can be obtained.

Notwithstanding the above, the Joint Bookrunners may cease to endeavour to procure any such acquirers if, in their opinion, it is unlikely that any such acquirers can be so procured at such a price by such time. If and to the extent that acquirers cannot be procured on the basis outlined above, those of the relevant Rights Issue Shares in respect of which acquirers have not been found will be acquired by the Underwriters as principals pursuant to the Underwriting Agreement in the Due Underwriting Proportions or by sub-underwriters procured by the Underwriters, in each case, at the Rights Issue Price.

Rights Issue Shares for which acquirers are procured on this basis will be re-allotted to such acquirers and the aggregate of any premiums (being the amount paid by such acquirers after deducting the price at which the Rights Issue Shares are offered pursuant to the Rights Issue and the expenses of procuring such acquirers, including any applicable brokerage and commissions and amounts in respect of VAT which are not recoverable), if any, will be paid (without interest) to those persons entitled (as referred to above) pro rata to the relevant lapsed provisional allotments on the basis set out below:

(i) where the Nil Paid Rights were, at the time they lapsed, represented by a Provisional Allotment Letter, to the person whose name and address appeared on page 1 of the Provisional Allotment Letter;
(ii) where the Nil Paid Rights were, at the time they lapsed, in uncertificated form, to the person registered as the holder of those Nil Paid Rights at the time of their disablement in CREST; and
(iii) where an entitlement to Rights Issue Shares was not taken up by an Excluded Shareholder, to that Excluded Shareholder,

save that no payment will be made of amounts of less than £5 (five Pounds Sterling), which amounts will be aggregated and will ultimately accrue to the benefit of the Company.

Any transactions undertaken pursuant to this Section 6 of this Part II shall be deemed to have been undertaken at the request of the persons entitled to the lapsed provisional allotments and none of the Company, the Banks or any other person procuring acquirers shall be responsible for any loss or damage (whether actual or alleged) arising from the terms of or timing of any such acquisition, any decision not to endeavour to procure acquirers, or the failure to procure acquirers on the basis described above. Cheques for the amounts due will be sent in Pounds Sterling, by post, at the risk of the person(s) entitled, to their registered addresses (in the case of joint holders, to the registered address of the first named), provided that where any entitlement concerned was held in CREST, the amount due will, unless the Company (in its absolute discretion) otherwise determines, be satisfied by the Company procuring the creation of an assured payment obligation in favour of the relevant CREST member's (or CREST sponsored member's) RTGS settlement bank in respect of the cash amount concerned in accordance with the RTGS payment mechanism.

Shareholders will not be entitled to apply for Rights Issue Shares in excess of their entitlement.

7. Withdrawal rights

Persons wishing to exercise statutory withdrawal rights after the issue by the Company of a prospectus supplementing this document, if any, must do so by sending a written notice of withdrawal, which must include the full name and address of the person wishing to exercise such right of withdrawal and, if such person is a CREST member, the participant ID and the member account ID of such CREST member, to Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU or email to [email protected] (for further details, Shareholders should contact the Receiving Agent on 0871 664 0321 (from inside the UK) or +4420 8639 3399 (from outside the UK)), no later than two Business Days after the date on which the supplementary prospectus is published, with any withdrawal only becoming effective on receipt of such notice by the Receiving Agent. Calls to the 0871 664 0321 number cost 10 pence per minute (including VAT) plus your service provider's network charges. Calls to the +4420 8639 3399 helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Notice of withdrawal given by any other means or which is deposited with or received by the Receiving Agent after expiry of such period will not constitute a valid withdrawal. Furthermore, the exercise of withdrawal rights will not be permitted after payment in full by the relevant person in respect of their Rights Issue Shares taken up and the allotment of those Rights Issue Shares to such person becoming unconditional. In such circumstances, Shareholders are advised to consult their professional advisers. Provisional allotments of entitlements to Rights Issue Shares which are the subject of a valid withdrawal notice will be deemed to be declined. Such entitlements to Rights Issue Shares will be subject to the provisions of Section 6 of this Part II as if the entitlement had not been validly taken up.

8. Employee Share Schemes

Participants in the Employee Share Schemes will be advised separately of adjustments (if any) to their rights or as to any entitlement to participate in the Rights Issue.

9. Overseas Shareholders and selling and transfer restrictions

This document has been approved by the FCA, being the competent authority in the UK. It is expected that Qualifying Shareholders in each EEA State will be able to participate in the Rights Issue.

It is the responsibility of any person (including, without limitation, custodians, nominees and trustees) outside the UK wishing to take up rights under the Rights Issue to satisfy himself as to the full observance of the laws of any relevant territory in connection therewith, including the obtaining of any governmental or other consents which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such territories.

The comments set out in this Section 9 of this Part II are intended as a general guide only, and any Overseas Shareholder who is in doubt as to his, her or its position should consult his, her or its professional adviser without delay.

(a) General

The offer of Nil Paid Rights, Fully Paid Rights and/or Rights Issue Shares to persons resident in, or who are citizens of, or who have a registered address in, countries other than the United Kingdom may be affected by the law of the relevant jurisdiction. Those persons should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their rights.

This Section 9 of this Part II sets out the restrictions applicable to Qualifying Shareholders who have registered addresses outside the United Kingdom, who are citizens or residents of countries other than the UK, or who are persons (including, without limitation, custodians, nominees and trustees) who have a contractual or legal obligation to forward this document to a jurisdiction outside the UK or who hold Ordinary Shares for the account or benefit of any such person.

Rights Issue Shares will be provisionally allotted to all Qualifying Shareholders, including Excluded Shareholders. However, Provisional Allotment Letters will not be sent to, and Nil Paid Rights will not be credited to CREST accounts of, Excluded Shareholders with registered addresses in the Excluded Territories or to their agent or intermediary, except where the Company and the Underwriters are satisfied that such action would not result in a contravention of any registration or other legal requirement in any such jurisdiction.

Having considered the circumstances, the Cineworld Directors have formed the view that it is necessary or expedient to restrict the ability of Qualifying Shareholders in the US and the other Excluded Territories to take up their rights under the Rights Issue due to the time and costs involved in the registration of this document and/or compliance with the relevant local legal or regulatory requirements in those jurisdictions.

Receipt of this document and/or a Provisional Allotment Letter or the crediting of Nil Paid Rights to a stock account in CREST does not and will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, this document and/or a Provisional Allotment Letter must be treated as sent for information only and should not be copied or redistributed. No person who has received or receives a copy of this document and/or a Provisional Allotment Letter and/or who receives a credit of Nil Paid Rights to a stock account in CREST in any territory other than the United Kingdom may treat the same as constituting an invitation or offer to him, nor should he in any event use the Provisional Allotment Letter or deal with Nil Paid Rights or Fully Paid Rights in CREST, in the relevant territory, unless such an invitation or offer could lawfully be made to him, or the Provisional Allotment Letter or Nil Paid Rights or Fully Paid Rights in CREST could lawfully be used or dealt with, without contravention of any registration or other legal or regulatory requirements.

Accordingly, persons who have received a copy of this document or a Provisional Allotment Letter, or whose stock account in CREST is credited with Nil Paid Rights or Fully Paid Rights, should not, in connection with the Rights Issue, distribute or send the same in or into, or transfer Nil Paid Rights or Fully Paid Rights to any person in or into, any Excluded Territory. If a Provisional Allotment Letter or a credit of Nil Paid Rights or Fully Paid Rights in CREST is received by any person in any such territory, or by his/her agent or nominee, he must not seek to take up the rights referred to in the Provisional Allotment Letter or in this document, or renounce the Provisional Allotment Letter, or transfer the Nil Paid Rights or Fully Paid Rights in CREST, unless the Company determines (in consultation with the Banks) that such actions would not violate applicable legal or regulatory requirements. Any person who does forward this document or a Provisional Allotment Letter in or into any such territories (whether under a contractual or legal obligation or otherwise) should draw the recipient's attention to the contents of this Section 9 of this Part II.

Subject to sub-sections (b) and (d) of this Section 9 of this Part II, any person (including, without limitation, agents, nominees and trustees) outside the United Kingdom wishing to take up their rights under the Rights Issue must satisfy himself as to full observance of the applicable laws of any relevant territory, including obtaining any requisite governmental or other consents, observing any other requisite formalities, and paying any issue, transfer or other taxes due in such territories. Any Qualifying Shareholder who is in any doubt as to his, her or its position should consult his, her or its professional advisers without delay.

The Company may treat as invalid any acceptance or purported acceptance of the offer of Fully Paid Rights, Nil Paid Rights or Rights Issue Shares which appears to the Company (in consultation with the Banks), or its agents, to have been executed, effected or despatched in a manner which may involve a breach of the laws or regulations of any jurisdiction or if, in the case of a Provisional Allotment Letter, it provides for an address for delivery of the share certificates in or, in the case of a credit of Rights Issue Shares in CREST, a CREST member or CREST sponsored member whose registered address is in, any of the Excluded Territories or any other jurisdiction outside the United Kingdom in which it would be unlawful to deliver such share certificates or make such a credit, or if the Company (in consultation with the Banks), or its agents, believe that the same may violate applicable legal or regulatory requirements. The attention of US persons and Qualifying Shareholders with registered addresses in the United States or holding Ordinary Shares on behalf of persons with such addresses is drawn to Section 9(b) of this Part II. The attention of Qualifying Shareholders with registered addresses in other territories outside of the United Kingdom or holding Ordinary Shares on behalf of persons with such addresses is drawn to Section 9(d) of this Part II.

Despite any other provision of this document or the Provisional Allotment Letter, the Company reserves the right to permit any Qualifying Shareholder to take up his/her rights if the Company (in consultation with the Banks) in its sole and absolute discretion is satisfied that the transaction in question is exempt from or not subject to the legislation or regulations giving rise to the restrictions in question. If the Company is so satisfied, the Company will arrange for the relevant Qualifying Shareholder to be sent a Provisional Allotment Letter if he is a Qualifying Non-CREST Shareholder or, if he is a Qualifying CREST Shareholder, arrange for Nil Paid Rights to be credited to the relevant CREST stock account.

Those Qualifying Shareholders who wish, and are permitted, to take up their entitlement should note that payments must be made as described in Sections 4(b) and 5(b) of this Part II.

The provisions of this Section 9 of this Part II will apply to all Excluded Shareholders who do not or are unable to take up Rights Issue Shares provisionally allotted to them. Accordingly, such Excluded Shareholders will be treated as not having taken up their rights to Rights Issue Shares and the Banks will use reasonable endeavours to procure, on behalf of such Excluded Shareholders, acquirers for the Rights Issue Shares.

Specific restrictions relating to certain jurisdictions are set out below.

(b) Offering restrictions relating to the United States

The Rights Issue Shares, the Nil Paid Rights, the Fully Paid Rights and the Provisional Allotment Letters have not been and will not be registered under the Securities Act or under any securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, into or within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters or the Rights Issue Shares in the United States.

Accordingly, no offering is being made in the United States and neither this document nor the Provisional Allotment Letters constitute or will constitute an offer, or an invitation to apply for, or an offer or invitation to acquire, any Rights Issue Shares, Nil Paid Rights or Fully Paid Rights in the United States. Except in the limited circumstances described below, Provisional Allotment Letters have not been, and will not be, sent to, and Nil Paid Rights have not been, and will not be, credited to the CREST account of, any Qualifying Shareholder with a registered address in the United States.

Envelopes containing Provisional Allotment Letters should not be postmarked in the United States or otherwise despatched from the United States, and all persons acquiring Rights Issue Shares and wishing to hold such shares in registered form must provide an address for registration of the Rights Issue Shares issued upon exercise thereof outside the United States.

Except in the limited circumstances described below, any person who acquires Rights Issue Shares, Nil Paid Rights or Fully Paid Rights will be deemed to have declared, warranted and agreed, by accepting delivery of this document or the Provisional Allotment Letter and delivery of the Rights Issue Shares, Nil Paid Rights or Fully Paid Rights, that it is not, and that at the time of acquiring the Rights Issue Shares, Nil Paid Rights or Fully Paid Rights it will not be, in the United States or acting on behalf of, or for the account or benefit of a person on a non-discretionary basis in the United States.

Cineworld reserves the right to treat as invalid any Provisional Allotment Letter: (i) that appears to it or its agents to have been executed in or despatched from the United States or that provides an address in the United States for the acceptance or renunciation of the Rights Issue; (ii) that does not include the relevant warranty set out in the Provisional Allotment Letter headed ''Excluded Shareholders'' to the effect that the person accepting and/or renouncing the Provisional Allotment Letter does not have a registered address (and is not otherwise located) in the United States and is not acquiring the Nil Paid Rights, Fully Paid Rights or the Rights Issue Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Nil Paid Rights, Fully Paid Rights or Rights Issue Shares in the United States; or (iii) where Cineworld believes acceptance of such Provisional Allotment Letter may violate applicable legal or regulatory requirements, Cineworld shall not be bound to allot (on a non-provisional basis) or issue any Rights Issue Shares, Nil Paid Rights or Fully Paid Rights in respect of any such Provisional Allotment Letter. In addition, Cineworld and the Underwriters reserve the right to reject any MTM Instruction sent by or on behalf of any CREST member with a registered address in the United States in respect of Nil Paid Rights.

Notwithstanding the foregoing, the Nil Paid Rights may be offered and delivered to, and the Fully Paid Rights and the Rights Issue Shares may be offered to and acquired by, a limited number of Qualifying Shareholders whom Cineworld determines, in its sole discretion, are able, based on such procedures and certifications as it deems appropriate, to participate in the Rights Issue pursuant to an applicable exemption from the registration requirements of the Securities Act (each a Permitted US Purchaser). Any person in the United States who obtains a copy of this document or a Provisional Allotment Letter and who is not a Permitted US Purchaser is required to disregard them.

Until 40 days after the commencement of the Rights Issue, an offer, sale or transfer of the Rights Issue Shares, Nil Paid Rights or Fully Paid Rights within the United States by a dealer (whether or not participating in the Rights Issue) may violate the registration requirements of the Securities Act.

For the purposes of the Rights Issue, Cineworld will be relying on an exemption from the registration requirements under the Securities Act for an offer and sale that do not involve a public offering in the United States. The Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares may not be deposited, or caused to be deposited, in any unrestricted depositary receipt facility in the United States.

(c) US transfer restrictions; Procedures for exercising the Nil Paid Rights and Fully Paid Rights in the United States

The offering and delivery of the Provisional Allotment Letters and the Nil Paid Rights, and the offering and sale of the Fully Paid Rights or Rights Issue Shares in the United States to a limited number of Permitted US Purchasers is being made in reliance on an exemption from the registration requirements of the Securities Act. None of the Nil Paid Rights, Fully Paid Rights, Rights Issue Shares or the Provisional Allotment Letters has been or will be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and, accordingly, may not be offered, sold, taken up, exercised, resold, renounced, pledged or otherwise transferred or delivered, directly or indirectly, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, registration under the Securities Act or pursuant to an effective registration statement under the Securities Act.

In order to exercise the Nil Paid Rights and Fully Paid Rights, each Permitted US Purchaser will be required to execute and deliver to Cineworld such certifications and other instruments as Cineworld shall, in its sole discretion, determine.

The provisions of Section 6 of this Part II will apply to any Rights Issue Shares not taken up. Accordingly, subject to certain exceptions, Qualifying Shareholders with registered addresses in the United States will be treated as holders who are not participating in the Rights Issue, and the Underwriters will endeavour to sell the Rights Issue Shares relating to such holders' entitlements on such holders' behalf.

(d) Other overseas territories

Provisional Allotment Letters will be posted to Qualifying Non-CREST Shareholders (other than, subject to certain limited exceptions, those Qualifying Non-CREST Shareholders who have registered addresses in the Excluded Territories) and Nil Paid Rights have been and, where relevant, will be credited to the CREST stock accounts of Qualifying CREST Shareholders (other than, subject to certain limited exceptions, those Qualifying CREST Shareholders who have registered addresses in the Excluded Territories). No offer of or invitation to take up Rights Issue Shares is being made by virtue of this document or the Provisional Allotment Letters in the Excluded Territories. Qualifying Shareholders in jurisdictions other than the Excluded Territories may, subject to the laws of their relevant jurisdiction, accept their rights under the Rights Issue in accordance with the instructions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letter.

Qualifying Shareholders who have registered addresses in or who are resident in, or who are citizens of countries other than the United Kingdom should consult their appropriate professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their Nil Paid Rights or to acquire Fully Paid Rights (Shareholders only) or Rights Issue Shares.

If you are in any doubt as to your eligibility to accept the offer of Rights Issue Shares or to deal with Nil Paid Rights or Fully Paid Rights, you should contact your appropriate professional adviser immediately.

(ii) Canada

Restrictions on Resale

The distribution in Canada of the Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares (the Securities) is being made on a private placement basis and is exempt from the requirement that the Company prepare and file a prospectus with the relevant Canadian securities regulatory authorities.

Any resale of the Securities in Canada must be made in accordance with applicable Canadian securities laws, which vary depending on the province or territory. These resale restrictions may in some circumstances apply to resales made outside Canada. Generally, purchasers of the Securities may not resell such Securities within Canada unless such further sale is made:

pursuant to and in compliance with (i) an exemption from the prospectus requirements contained in applicable securities laws or in a transaction not subject to such laws; and/or (ii) an exemption from the registration requirements contained in applicable securities laws or through an appropriately registered dealer;
pursuant to discretionary relief or an exemption from the prospectus and/or registration requirements contained in an order, ruling or decision document issued by the securities regulatory authority or regulator in the applicable province or territory; or
pursuant to a final prospectus for which a receipt has been received in the appropriate jurisdiction in accordance with applicable securities laws.

Since the Company is not currently a reporting issuer in any province or territory of Canada and does not intend to become a reporting issuer, the resale restrictions applicable to the Securities referred to above may never expire.

The foregoing is only a summary of resale restrictions relevant to purchasers of the Securities. It is not intended to be exhaustive. All persons purchasing the Securities pursuant to this document should consult with their own advisers:

(a) prior to acquiring the Securities pursuant to this document for advice with respect to the restrictions on the transferability of such Securities; and
(b) prior to selling any of the Securities to ensure compliance under applicable securities laws.

Reporting Requirements

The Company is not a reporting issuer or the equivalent thereof under the securities legislation in any jurisdiction in Canada and does not intend to become a reporting issuer. Accordingly, the Company is not subject to the continuous disclosure requirements and other reporting requirements prescribed by such securities legislation. For example, the Company is not subject to the requirements to provide prompt notification of material changes by way of press releases or to prepare and file with the Canadian securities regulatory authorities annual information forms, proxy circulars and similar disclosure documents, or to prepare and file quarterly unaudited and annual audited financial statements.

Statutory Exemptions

The Securities are being offered and sold to persons resident in certain provinces and territories of Canada pursuant to exemptions from the prospectus and registration requirements that otherwise apply to a distribution of securities under applicable Canadian securities legislation. Such exemptions relieve the Company from the provisions under such legislation that would, among other things, require the Company to prepare and file a preliminary and final prospectus in respect of this offering, with the result that purchasers will not receive certain protections associated with an investment in securities distributed under a prospectus, including the review of this document by a securities commission or similar regulatory authority and the ability to exercise rights of withdrawal or statutory rights of action in certain jurisdictions.

Each purchaser is urged to consult with its own legal adviser as to the details of the exemptions being relied upon and the consequences of purchasing Securities pursuant to such exemptions.

Language of Documents

Upon receipt of this document, you hereby confirm that you have expressly requested that all documents evidencing or relating in any way to the sale of the securities described herein (including for greater certainty, any purchase confirmation or any notice) be drawn up in the English language only. Par la r´eception de ce document, vous confirmez par les pr´esentes que vous avez express´ement exig´e que tous les documents faisant foi ou se rapportant de quelque maniere que ce soit a la vente des valeurs mobili `eres d´ecrites aux pr´esentes (incluant, pour plus de certitude, toute confirmation d'achat ou tout avis) soient r´edig´es en anglais seulement.

(iii) EEA States (other than the UK)

In relation to each EEA State which has implemented the Prospectus Directive (each, a relevant member state) (except for the UK), with effect from and including the date on which the Prospectus Directive was implemented in that relevant member state (the relevant implementation date) no Rights Issue Shares, Nil Paid Rights or Fully Paid Rights have been offered or will be offered pursuant to the Rights Issue to the public in that relevant member state prior to the publication of a prospectus in relation to the Rights Issue Shares, Nil Paid Rights and Fully Paid Rights which has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in the relevant member state, all in accordance with the Prospectus Directive, except that with effect from and including the relevant implementation date, offers of Rights Issue Shares, Nil Paid Rights or Fully Paid Rights may be made to the public in that relevant member state at any time:

(a) to any legal entity which is a ''qualified investor'', as defined in the Prospectus Directive;
(b) to fewer than 100 or, if the relevant member state has implemented provisions of the relevant amending directive (2010/73/EU), 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Rights Issue Shares, Nil Paid Rights or Fully Paid Rights shall result in a requirement for the publication by the Company or any Underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.

For this purpose, the expression ''an offer of any Rights Issue Shares, Nil Paid Rights or Fully Paid Rights to the public'' in relation to any Rights Issue Shares, Nil Paid Rights and Fully Paid Rights in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the Rights Issue and any Rights Issue Shares, Nil Paid Rights and Fully Paid Rights to be offered so as to enable an investor to decide to acquire any Rights Issue Shares, Nil Paid Rights or Fully Paid Rights, as the same may be varied in that relevant member state by any measure implementing the Prospectus Directive in that relevant member state.

10. Additional representations and warranties

(a) Qualifying Non-CREST Shareholders

Any person accepting and/or renouncing a Provisional Allotment Letter or requesting registration of the Rights Issue Shares comprised therein represents and warrants to the Company and the Banks that, except where proof has been provided to the Company's satisfaction that such person's use of the Provisional Allotment Letter will not result in the contravention of any applicable legal or regulatory requirement in any jurisdiction: (i) such person is not accepting and/or renouncing the Provisional Allotment Letter, or requesting registration of the relevant Rights Issue Shares, from within the United States or is otherwise located in the United States, (ii) such person is not in any of the other Excluded Territories or in any territory in which it is otherwise unlawful to make or accept an offer to acquire Rights Issue Shares or to use the Provisional Allotment Letter in any manner in which such person has used or will use it, (iii) such person is not acting on a non-discretionary basis on behalf of, or for the account or benefit of, a person located within the Excluded Territories, and in particular such person is not accepting for the account or benefit of any person who is located in the United States unless (a) the instruction to accept was received from a person outside the United States and (b) the person giving such instruction has confirmed that (x) it has the authority to give such instruction, and either (y) has investment discretion over such account or (z) is an investment company that is acquiring the Rights Issue Shares in an ''offshore transaction'' within the meaning of Regulation S, and (iv) such person is not acquiring Rights Issue Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Rights Issue Shares into the United States or any territory referred to in (ii) above. The Company may treat as invalid any acceptance or purported acceptance of the allotment of Rights Issue Shares comprised in, or renunciation or purported renunciation of, a Provisional Allotment Letter if it: (a) appears to the Company to have been executed in or despatched from the United States or any of the other Excluded Territories or otherwise in a manner which may involve a breach of the laws of any jurisdiction or if the Company or its agents believe the same may violate any applicable legal or regulatory requirement, (b) provides an address in the United States or any of the other Excluded Territories for delivery of definitive share certificates for Rights Issue Shares or any jurisdiction outside the United Kingdom in which it would be unlawful to deliver such certificates, or (c) purports to exclude the warranty required by this Section.

(b) Qualifying CREST Shareholders

A CREST member or CREST sponsored member who makes a valid acceptance in accordance with the procedures set out in this Part II represents and warrants to the Company and the Banks that, except where proof has been provided to the Company's satisfaction that such person's acceptance will not result in the contravention of any applicable legal requirement in any jurisdiction: (i) such person is not within the United States, (ii) such person is not in any of the other Excluded Territories or in any territory in which it is otherwise unlawful to make or accept an offer to acquire Fully Paid Rights or Rights Issue Shares, (iii) such person is not accepting on a non-discretionary basis on behalf of, or for the account or benefit of, a person located within the United States, any of the other Excluded Territories, or any of the other territories referred to in (ii) above at the time the instruction to accept was given, and (iv) such person is not acquiring Fully Paid Rights or Rights Issue Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Fully Paid Rights or Rights Issue Shares into the United States, any of the other Excluded Territories, or any of the other territories referred to in (ii) above.

The Company may treat as invalid any MTM Instruction which appears to the Company to have been despatched from the United States, any of the other Excluded Territories or from any territory in which it is otherwise unlawful to make or accept an offer to acquire the Fully Paid Rights or Rights Issue Shares, or otherwise in a manner which may involve a breach of the laws of any jurisdiction or if the Company or its agents believes the same may violate any applicable legal or regulatory requirement or purports to exclude the warranty required by this Section.

11. Waiver

The provisions of Sections 9 and 10 of this Part II and of any other terms of the Rights Issue relating to Excluded Shareholders may be waived, varied or modified as regards specific Shareholder(s) or on a general basis by the Company in its absolute discretion. Subject to this, the provisions of Sections 9 and 10 of this Part II supersede any terms of the Rights Issue inconsistent herewith. References in Sections 9 and 10 of this Part II and in this Section 11 of this Part II to Shareholders shall include references to the person or persons executing a Provisional Allotment Letter and, in the event of more than one person executing a Provisional Allotment Letter, the provisions of this Section 11 of this Part II shall apply to them jointly and to each of them.

12. Taxation

Information on taxation in the United Kingdom in relation to the Rights Issue is set out in Part A of Part XI (Taxation) of this document. Information on taxation in the United States in relation to the Rights Issue is set out in Part B of Part XI (Taxation).

The information contained in Part XI (Taxation) of this document is intended only as a general guide to the current tax position in the United Kingdom and the United States. Qualifying Shareholders in the United Kingdom and the United States should consult their own tax advisers regarding the tax treatment of the Rights Issue in light of their own circumstances. Qualifying Shareholders who are in any doubt as to their tax position or who are subject to tax in any other jurisdiction should consult an appropriate professional adviser immediately.

13. Times and dates

The Company shall, in its discretion and after consultation with its financial and legal advisers, be entitled to amend the date that dealings in Nil Paid Rights commence and amend or extend the latest date for acceptance under the Rights Issue and all related dates set out in this document, and in such circumstances shall notify the UKLA, and a Regulatory Information Service and, if appropriate, Shareholders.

If a supplementary prospectus is issued by the Company two days or fewer prior to the date specified in this document as the latest date for acceptance under the Rights Issue (or such later date as may be agreed between the Company and the Banks), the latest date of acceptance under the Rights Issue shall be extended to the date which is three Dealing Days after the date of issue of the supplementary prospectus (and the dates and times of principal events due to take place following such date shall be extended accordingly).

14. Governing law and jurisdiction

The terms and conditions of the Rights Issue as set out in this document and the Provisional Allotment Letter (where appropriate) and any non-contractual obligation arising out of or related thereto shall be governed by, and construed in accordance with, English law. The courts of England and Wales are to have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Rights Issue, this document or the Provisional Allotment Letter (where appropriate). By accepting rights under the Rights Issue in accordance with the instructions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letter, Qualifying Shareholders irrevocably submit to the jurisdiction of the courts of England and Wales and waive any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum.

PART III

TERMS AND CONDITIONS OF THE COMBINATION

1. Combination Agreement

The Combination Agreement was entered into on 10 January 2014 between CCI and the Company pursuant to which the Company has conditionally agreed to acquire the entire issued share capital of Cinema City Holding from CCI. The Company has the right to nominate another person, being a whollyowned English subsidiary of the Company, to be the transferee of such share capital.

(a) Consideration

The consideration to be received by CCI on Completion under the terms of the Combination Agreement will consist of:

£272,000,000 in cash(11); and
Consideration Shares,

representing an enterprise value on a debt free/cash free basis of £503.4 million. In addition, CCI will also receive on Completion under the terms of the Combination:

A14,488,000 in cash(12); and
the Earnings Consideration.(13)

The Earnings Consideration is subject to a true-up adjustment based on 100 per cent. of the actual accumulated adjusted earnings of the Cinema City Business from (and including) between 1 October 2013 to (and including) the date of Completion.

The Consideration Shares will be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid Ordinary Shares, including the right to receive all dividends, distributions or any return of capital declared, paid or made after the date of Completion.

(b) Conditions

Completion is conditional upon certain things, including:

(A) the passing of the resolution of the shareholders of CCI approving the sale and purchase of the shares in Cinema City Holding at the CCI Shareholders' Meeting;
(B) the passing of the Resolution;
(C) receipt of the relevant clearance from the President of the Office of Competition and Consumer Protection in Poland;
(D) completion of the Reorganisation (other than the entering into of the Relevant Leases) (see Section 3 of Part V (Information on Cinema City)); and
(E) receipt of the proceeds of the Rights Issue.

While the Reorganisation is a condition to Completion, the Company has the option to waive condition (D) in whole or in part. To the extent that it waives condition (D) such that the Reorganisation has not been completed by Completion, the Company and Cinema City have agreed to work together to complete the Reorganisation as soon as reasonably practicable thereafter.

⁽¹¹⁾ Assuming no repayment or prepayment since 1 October 2013 under the Club Financing Agreement or the Israeli Facilities Agreement.

⁽¹²⁾ Reflects the amount of cash and cash equivalents as at 30 September 2013 less A3,470,000 and A530,000 which were paid by a member of the Cinema City Holding Group or IT 2004 in respect of the Remaining Cinema City Group's acquisition of Ronson N.V. and the acquisition of certain land interests in Poland, in each case after 30 September 2013. A locked box mechanism has been and will be in place from (and including) 1 October 2013 to (and including) Completion, designed to prevent such cash and cash equivalents from ''leaking out'' of the Cinema City Holding Group to the Remaining Cinema City Group.

⁽¹³⁾ The Earnings Consideration is an amount equal to: (i) A25,900,000 if Completion occurs in or before February 2014; and (ii) A28,900,000 if Completion occurs in or after March 2014; representing 75 per cent. of the forecast accumulated adjusted earnings of the Cinema City Business from (and including) 1 October 2013 to (and including) the date of Completion (assuming a February or March Completion, respectively).

ITIT has entered into an irrevocable undertaking in favour of the Company and CCI under which it has agreed to vote in favour of the resolution of the CCI Shareholders referred to in paragraph (A) above in respect of the shares in the capital of CCI it holds, amounting to 27,589,996 shares in CCI as at the Latest Practicable Date (representing 53.89 per cent. of CCI's existing issued ordinary share capital). ITIT voting in favour of such resolution to be put to the CCI Shareholders will be sufficient to pass such resolution. In addition, each of the Cineworld Directors or, in the case of one director, a discretionary trust through which that director holds his interest, has entered into an irrevocable undertaking in favour of CCI under which he or she or it has agreed to vote in favour, or procure a vote in favour, of the Resolution in respect of the Ordinary Shares he or she or it is interested or is otherwise able to control the exercise of the voting rights attaching to, amounting to an aggregate of 3,803,890 shares in Cineworld as at the Latest Practicable Date (representing approximately 2.54 per cent. of Cineworld's existing issued ordinary share capital as at the Latest Practicable Date).

(c) Break Fee

The Company has agreed to pay a break fee to CCI as follows:

(A) of an amount equal to one per cent. of the market capitalisation of the Company(14) if an offer is made or a possible offer or proposal is announced by a third party in respect of all or substantially all of the Ordinary Shares or assets of the Cineworld Group or a transaction which is otherwise inconsistent with the transaction contemplated by the Combination Agreement (an Alternative Proposal) and this Agreement is terminated as a result of the Resolution not having been passed in circumstances where (i) any or all of the directors of the Company change, withdraw or qualify their recommendation to the shareholders to vote in favour of the Resolution, (ii) the General Meeting has not been called so as to enable it to be held by the Long Stop Date or has been postponed beyond the Long Stop Date, or (iii) although paragraph (A)(i) does not apply, the Company or any or all of the directors of the Company has drawn to the attention of the Shareholders any new circumstances or matters which are likely to be relevant for the consideration of the Resolution by the Shareholders or otherwise taken any action or step which is likely to have the effect of causing the Shareholders to doubt or question the merits of the transactions contemplated by the Combination Agreement; and
(B) of an amount equal to 0.66 per cent. of the market capitalisation of the Company(14) if there has not been an Alternative Proposal and any of the following occur (i) any or all of the directors of the Company change, withdraw or qualify their recommendation to the shareholders to vote in favour of the Resolution, (ii) the General Meeting has not been called so as to enable it to be held by the Long Stop Date or has been postponed beyond the Long Stop Date, or (iii) although paragraph (B)(i) does not apply, the Company or any or all of the directors of the Company has drawn to the attention of the Shareholders any new circumstances or matters which are likely to be relevant for the consideration of the Resolution by the Shareholders or otherwise taken any action or step which is likely to have the effect of causing Shareholders of the Company to doubt or question the merits of the transaction contemplated by the Combination Agreement, PROVIDED THAT, prior to any of the matters set out in paragraph (B)(i) to (B)(iii) (inclusive) occurring, the Combination Agreement has not been terminated pursuant to the rights set out in the second paragraph of paragraph 1(f) below.

(d) Warranties

The Combination Agreement contains warranties given by CCI in relation to:

(A) its title and ownership of the shares in Cinema City Holding;
(B) its capacity to enter into the Combination Agreement (among others); and
(C) the underlying Cinema City Business.

(e) Conduct of business prior to Completion

(A) CCI

CCI has agreed to procure that the Cinema City Business, and the Company has agreed to procure that the business of the Cineworld Group, in each case, is, prior to Completion, carried on in the ordinary course and consistent with past practice. CCI and the Company have also agreed to procure that certain material

⁽¹⁴⁾ By reference to the Closing Price per Existing Ordinary Share as at 10 January 2014.

acts will only be carried out following prior consultation with the other party or, in the case of CCI, with the prior consent of, the Company.

(B) The Company

The Company has agreed to enforce the Cineworld Group's rights under the Facility Agreement and to use its best endeavours to fulfil the Cineworld Group's obligations thereunder and to satisfy all of the conditions thereunder, in each case, that are within the Cineworld Group's power and control, and to take all other steps necessary and in the Cineworld Group's power and control to enable drawdown under the facility in order to meet its payment obligations on Completion under the Combination Agreement.

The Company has also agreed to enforce its rights under the Underwriting Agreement and to use all reasonable endeavours to fulfil its obligations thereunder and to satisfy all of the conditions thereunder, in each case, that are within its power and control, to ensure that the Underwriting Agreement is not terminated prior to completion of the Rights Issue.

The Company has also agreed to procure that neither the Underwriting Agreement nor the Facilities Agreement is, prior to Completion, amended or varied in any material respect or at its election or request, or with its agreement, terminated, without the prior written consent of CCI.

(f) Termination

In the event that:

(A) the conditions to Completion have not been satisfied or waived by 24 April 2014 (such date may be postponed by up to 20 business days); or
(B) at Completion, either party does not carry out the material actions required of it under the Combination Agreement,

then either party (in the case of (A) above) or the innocent party (in the case of (B) above) may terminate the Combination Agreement.

In addition, CCI and Cineworld can terminate the Combination Agreement prior to Completion if: (i) a material adverse effect had occurred or exists in relation to the business of the Cineworld Group (in the case of CCI's termination right) or the Cinema City Business (in the case of Cineworld's termination right); (ii) the Underwriting Agreement has been terminated (provided that, in the case of the Company, it has complied with its obligations with respect to the Underwriting Agreement referred to in paragraph 1(e)(B) above); or (iii) the Debt Financing has been terminated or the required funds are not available for drawdown under the Debt Financing immediately prior to Completion (provided that, in the case of the Company, it has complied with its obligations will respect to the Debt Financing referred to in paragraph 1(e)(B) above).

(g) Proposed Directors

Cineworld has indemnified each of the Proposed Directors in respect of any personal liability incurred by virtue of their taking responsibility for the contents of the Prospectus. These indemnities, which are subject to certain appropriate carve-outs, cover the period between publication of the Prospectus and Completion, at which point the Proposed Directors will be appointed as directors to the Board and will benefit from the indemnity from Cineworld as described in Section 3 of Part XIII (Additional Information) of this document on the same basis as the Cineworld Directors.

2. Relationship Agreement

The Relationship Agreement was entered into on 10 January 2014 between CCI and the Company for the purposes of governing the continuing relationship between the parties following Completion. The key provisions of the Relationship Agreement are conditional upon Completion occurring.

(a) Board Composition and Board Committees

The parties agree on the composition of the Board immediately following Completion (which is as set out in Section 7 of Part I (Letter from the Chairman)) and that at any time thereafter, appointments to the Board shall be carried out in accordance with the relevant practice from time to time adopted by the Board save that if, at any time, none of Moshe (Mooky) Greidinger, Israel Greidinger and Scott Rosenblum or

any director appointed to the Board by CCI pursuant to its rights under the Relationship Agreement (the Relevant Directors) is a member of the Board, CCI shall, provided it and any of its affiliates, together, hold at least 10 per cent. of the voting rights in the Company, be entitled to appoint one Non-Executive Director.

(b) Independence and conduct

The parties acknowledge that, unless the Board (excluding the Relevant Directors) consent or agree otherwise that:

(A) any members of the Board connected with CCI that are not considered to be independent shall be excluded from Board discussions and decisions regarding arrangements between the parties;
(B) all arrangements between the parties shall be conducted on a normal commercial basis and at arm's length; and
(C) the Cineworld Group shall, at Completion, be capable of carrying on its business independently of the Remaining Cinema City Group.

(c) Disposal of shares and orderly marketing

CCI has agreed not to sell any Ordinary Shares for a period of 12 months following Completion (the Lock-in Period) subject to customary carve-outs. After the expiry of the Lock-in Period, CCI is entitled to sell Ordinary Shares provided that, where reasonably practicable, CCI has consulted with and considered the reasonable views of the Chairman or the Senior Independent Director of the Company.

(d) Information rights

The Relationship Agreement contains customary provisions regarding the sharing of information with CCI that relates to the Cineworld Group.

3. Lease Agreements

Members of the Cinema City Holding Group currently have a portfolio of approximately 100 leasehold properties and the benefit of approximately 35 agreements for lease. Cineworld, CCI and certain other members of the Existing Cinema City Group and the Remaining Cinema City Group have also agreed that leases over eight properties which will be owned by members of the Remaining Cinema City Group following completion of the Reorganisation will be granted to members of the Cinema City Holding Group, with tenant obligations guaranteed by Cineworld. The properties subject to such lease arrangements comprise four cinema properties (Janki, Katowice, Łod´ ´z and Torun) and one office property ´ (in Fosa) in Poland, one cinema property in Slovakia (AuPark), one cinema property in the Czech Republic (Galaxie) and one cinema property in Israel (Rishon LeZion).

Each lease will be based on a framework form of lease agreement which has been agreed between Cineworld and CCI, and will be for a term of 18 years, with a right to renew all (but not some) of those leases held by members of the Enlarged Group at the end of the initial term for a further period of five years and an aggregate annual net initial rent for all properties of EUR 7,650,000, denominated in Euro and payable in local currency, which shall increase on an indexed basis on each anniversary date of the leases. The framework form of lease agreement is based on a standard form of full repairing and insuring lease (with the tenant paying, directly or indirectly, all rates, occupancy taxes, insurance costs and outgoings). It is intended that this agreed form of lease will be tailored, for each property, to the local law requirements of the relevant jurisdiction and the normal institutional terms appropriate for that jurisdiction. To the extent that any of the individual leases are not in place at Completion, the parties have agreed appropriate arrangements to allow the relevant members of the Enlarged Group to occupy the relevant property on agreed commercial terms pending finalisation of the relevant lease.

PART IV

INFORMATION ON CINEWORLD

1. Introduction

Cineworld acts as a holding company for a group of companies whose principal activity is the operation of cinemas in the UK and Ireland for the exhibition of films and related retail activity.

Since the acquisition of Picturehouse in December 2012, the Cineworld Group operates a portfolio of 886 screens across 102 sites under the Cineworld and Picturehouse brands, of which the majority are multiplex sites with five or more screens. The Company primarily operates in the UK and Ireland and its portfolio includes five out of the 10 highest grossing cinemas in these markets in 2013 (Source: Rentrak). Cineworld is headquartered in London and employs around 5,500 people.

2. History and Development

Stephen Wiener, backed by a consortium of equity investors, set up the Cine-UK business in 1995, with the first multiplex cinema being opened in Stevenage under the Cineworld brand in 1996. Between 1996 and 2004, Cineworld opened a further 34 multiplex cinemas. In 2004, the Blackstone Group acquired the Cine-UK business, with the management team in place at that time retaining a significant proportion of their interest in the business. Later that year, Cine-UK acquired the UK operations of UGC, and the UGC and Cine-UK cinema businesses merged under the Cineworld brand.

In 2006, Cineworld re-registered as a public company and, in 2007, Cineworld listed on the London Stock Exchange. In the same year, Cineworld entered into an agreement with REAL D to introduce 3D projection into its digital portfolio. In 2008, DCM, the joint venture screen advertising business with Odeon, was established, and DCM acquired certain assets from Carlton Screen Advertising. In 2009, Cineworld acquired 74 additional digital projectors from NEC, doubling its digital estate.

In 2010, Cineworld entered into a VPF agreement with Arts Alliance Media. In 2011, Cineworld opened its first IMAX screen in Edinburgh—it now has nine IMAX screens in total.

In 2012, Cineworld acquired the Picturehouse chain of cinemas and also opened its first licensed coffee outlet in partnership with Starbucks at Cineworld Sheffield. It now has 11 such outlets.

In 2013, Cineworld opened a nine-screen cinema in Wembley and a new 10-screen cinema in Gloucester Quays. In October 2013, it also reopened the IMAX screen at the Glasgow Science Centre as a Cineworld cinema.

The principal events in Cineworld's history are listed below:

Year	Event
1996	Opening of the first multiplex cinema in Stevenage under the Cineworld brand
2004	Blackstone acquire Cine-UK
	Cine-UK and UGC merge under the Cineworld brand
2007	Cineworld lists on the London Stock Exchange
2008	DCM screen advertising joint venture established
2009	Acquisition of digital projectors from NEC
2010	VPF agreement with Arts Alliance Media
2011	First IMAX screen opened in Edinburgh
2012	First Starbucks-licensed coffee outlet opened at Cineworld Sheffield
	Acquisition of Picturehouse
2013	Opening of multiplexes in Wembley and Gloucester Quays and IMAX screen in Glasgow Science Centre

3. Strategy

Cineworld's success in enhancing shareholder value over the last few years has been based around four core operating pillars:

''Put our customers at the heart of everything we do''—Cineworld aims to have an in-depth knowledge of its customers and believes that this strong understanding best enables it to increase attendance and revenue streams. Examples of initiatives include MyCineworld, which now has over 3.5 million members, and Unlimited, which now has approximately 372,000 members. Furthermore, the Company launched a newly designed website in 2012, helping to capture more customer data, thereby enhancing its CRM database. In 2013, more than 74 million visits to the Cineworld's website were recorded.
''Deliver a great cinema experience''—Cineworld strives to ensure that its cinemas are comfortable, safe, clean and well equipped, thereby giving its customers a great experience. Recent initiatives include increasing the number of Starbucks outlets at cinemas within the estate, increasing the number of IMAX screens, and trialling new ''4D Motion'' technology.
''Develop our people, effectiveness and efficiencies''—Cineworld endeavours to create a culture with a passion for ''People, Innovation and Achieving'', and the Board believes that developing and retaining the Company's employees is core to its success. The Company has a strong commitment to efficiency and is continually focused on ensuring that its training arrangements and systems are appropriate for a leading cinema business.
''Grow our estate''—Cineworld is focused on growth through selective new openings and acquisitions. Since 2012, Cineworld has opened Cineworld cinemas in Aldershot, Wembley, Gloucester Quays and at the Glasgow Science Centre. The development pipeline for the coming years remains strong and Cineworld is on target to open at least a further 169 screens in the UK and Ireland by the end of 2017.

4. Organisational structure

Cineworld is the holding company of the Cineworld Group. A full list of Cineworld's principal subsidiary undertakings, which are considered by Cineworld to be likely to have a significant effect on the assessment of the assets and liabilities, the financial position and the profits and losses of Cineworld, is set out in Section 5 of Part XIII (Additional Information) of this document. Following completion of the proposed Combination, Cinema City Holding will be a wholly-owned subsidiary of Cineworld. Further information on the Cinema City Business is set out in Part V (Information on Cinema City).

5. Principal activities and principal markets

Cinemas

Since the acquisition of Picturehouse in December 2012, the Company operates a portfolio of 886 screens across 102 sites in the UK and Ireland, of which the majority are multiplex sites with five or more screens. Cineworld aims to offer as wide as possible a range of films and other events (such as live opera and theatre) alongside its core Hollywood offering, including Bollywood, Tamil and other foreign films. In the 2013 Interim Period, Cineworld's gross UK and Ireland box office market share was 27.3 per cent. including Picturehouse and 25.5 per cent. excluding Picturehouse (Source: Rentrak) making it the number one cinema operator in the UK and Ireland by box office revenue. With the acquisition of Picturehouse, Cineworld now operates under two separate cinema brands, which operate in market segments that are differentiated in terms of film content, the style and appeal of the individual cinemas and the food and drink offered.

Cineworld also offers IMAX screens and D-Box seats. IMAX is a motion picture format which allows images to be recorded and displayed at a far greater size and resolution than conventional film systems. D-Box is a seat motion system which creates motion effects to accompany feature films. Cineworld currently operates nine IMAX screens, and has recently signed an agreement to open three more IMAX screens, at least one of which is scheduled to open during 2014. Cineworld has eight D-Box screens at present.

Retail

Food and drink sales are Cineworld's second largest source of revenue. Cineworld sells food and drinks (soft drinks, coffee and, in certain cinemas, alcohol) at its sites. Cineworld continues to develop its coffee offering and now operates 11 Starbucks coffee outlets within its cinemas, with further outlets in the pipeline.

Other income

The largest single element of other income is screen advertising revenue which is largely derived from the activities of DCM. DCM's primary function is to sell advertising time on cinema screens on behalf of Cineworld, Picturehouse, Odeon UCI and its other clients, including Vue. As at the end of the 2013 Interim Period, DCM sold screen advertising to 78.6 per cent. of screens in the UK. DCM also engages in related promotional work between advertisers and cinemas.

The completion of Cineworld's conversion to digital programme has enabled DCM to launch a digital advertising offering, providing greater flexibility in its screen advertising offer and enabling DCM to attract new advertisers and advertising campaigns.

In addition, the Company provides a range of services, including the sales of 3D glasses, screen/auditorium hiring services, games machines, gift cards and sponsorship.

Initiatives and Developments

Cineworld's ''Unlimited'' card subscription programme is one of the pillars that underpin Cineworld's strategy of growing revenues and admissions. The Unlimited programme is a subscription service which is a fixed monthly (or annual) subscription enabling customers to watch as many 2D films at Cineworld cinemas as they wish, as well as premium offerings at a discount. Cineworld is currently the only major cinema operator in the UK and Ireland to offer this service. As at the date of this document, there were approximately 372,000 members. The Unlimited programme brings to the Cineworld Group the financial benefits of regular subscription income, thereby reducing the level of fluctuation in the Cineworld Group's revenues. It also brings operational benefits by encouraging repeat visits, often at off-peak times. This, in turn, enables Cineworld to improve capacity utilisation at its cinemas, provides more retail opportunities, allows Cineworld to offer a wider range of films than its competitors and assists Cineworld in maintaining a significant market share among the smaller, less mainstream films.

The Cineworld Group has also introduced a number of CRM initiatives. On 16 March 2012, Cineworld became the first major cinema operator in the UK to abolish online booking fees. Research showed the fee to be a barrier to booking in advance and it was unpopular with Cineworld's customers. In 2012, Cineworld also launched a 10 per cent. reduction in the price of tickets for booking online through MyCineworld and membership of MyCineworld has since increased to over 3.5 million members as at the date of this document.

The growth of MyCineworld is an important part of Cineworld's strategy to engage further with its customers. It has enabled Cineworld to improve its customer retention and helps Cineworld to encourage more frequent visits to its cinemas. By transferring bookings online, Cineworld aims to improve customer service by reducing queues at the box offices and to convert more space to other activities which will improve the customer experience at Cineworld's cinemas and help drive incremental revenues. Between 28 December 2012 and 22 November 2013, 20.8 per cent. of Cineworld's bookings were made online. The Board believes that the addition of new sites will facilitate the expansion of Cineworld's Unlimited and MyCineworld propositions into new locations, thereby growing and consolidating Cineworld's business further.

Cineworld also participates in the Tesco Clubcard loyalty programme and is currently the exclusive cinema gift card partner with Morrisons. These partnerships help to promote and reinforce Cineworld's brand profile nationally.

Picturehouse

On 6 December 2012, the Cineworld Group acquired the Picturehouse cinema chain for £47.3 million. This was Cineworld's only principal investment in the period covered by the historical financial information.

Picturehouse, which continues to be run by its pre-acquisition management, provides a different offering to the multiplexes offered by Cineworld, with 21 cinemas, all of which have five or less screens and which have individual styles. As a result of a Competition Commission decision following the acquisition of Picturehouse, Cineworld will be disposing of two of those cinemas in Aberdeen and Bury St Edmunds. Cineworld will also be disposing of a cinema in Cambridge and the decision as to which of the cinemas will be sold will be made later in the year.

While blockbuster films may be shown at these cinemas, non-mainstream and specialised films are central to Picturehouse's programming as an ''art-house'' cinema chain. The cinemas tend to be located in urban areas with a high student, affluent and diverse, adult-orientated population. Food and drink is a key differentiator, and some of Picturehouse's cinemas have bars and food operations which form a significant proportion of that cinema's total business. Cinemas tend to have their own individual styles and provide a unique ambience compared with that of a multiplex cinema, and appeal to students and a more mature audience that requires a different retail and film choice. Typical Picturehouse customers will tend to visit as a social occasion or as a cultural outing rather than purely to view films, and therefore require a more personal cinema-going experience.

Picturehouse also provides operating systems to other cinemas, acts as a distributor for smaller films and programmes screenings at 34 independently owned cinemas.

Future development

Cineworld plans to open at least a further 169 screens by the end of 2017 in the UK and Ireland.

6. Property, plant and equipment

Cineworld (excluding Picturehouse) operates 85 cinemas from leasehold premises, typically over a lease term of 25 years with rent reviews every five years. The Cineworld estate is principally formed of multiplex cinemas which range from five screens to 20 screens. The largest site is 100,000 square feet.

Picturehouse has 17 leasehold properties and four freehold properties.

All of the properties are located in the UK and Ireland except for one which is located in Jersey. There are no known major encumbrances and/or environmental issues affecting the estate.

Cineworld's cinema operating equipment includes digital projectors, the related IT infrastructure and the screens.

7. Environment and health and safety

Being a multi-site business, the Cineworld Group is conscious of its total energy consumption and the amount of waste materials generated, and is actively working to reduce both energy usage and the quantity of waste materials produced that cannot be recycled. During 2013, there was a continued focus on raising energy awareness at Cineworld's cinema sites with the aim to promote best practice and to reduce energy usage through better housekeeping and operating more efficiently.

With over 47 million customer visits, the Cineworld Group is committed to the safety and welfare of its customers, staff and contractors. Annual cinema audits covering Fire, Food and Health and Safety are undertaken on an unannounced basis in order to reflect the true operation of health and safety at each site. Overall, the continuous focus on health and safety during 2013 to date has resulted in further improvements in site standards compared with the same period last year.

PART V

INFORMATION ON CINEMA CITY

1. Introduction

Cinema City Holding was incorporated in The Netherlands in December 2012 as a wholly-owned subsidiary of CCI. Cinema City Holding, together with the other members of the Cinema City Holding Group, will, following the Reorganisation, own and operate all of the Cinema City Business, whose operations cover six CEE countries (Poland, Hungary, the Czech Republic, Romania, Bulgaria and Slovakia) and Israel. The corporate office of Cinema City Holding is located in Rotterdam, The Netherlands. As part of the Combination, Cineworld will be acquiring the Cinema City Business through its acquisition of Cinema City Holding (see Section 3 below).

2. History and development

The Greidinger family started the predecessor to Cinema City in 1929 and opened its first cinema in Haifa, Israel in 1931. Israel was Cinema City's sole country of operations until 1997, when Cinema City looked beyond the more mature Israeli cinema industry for growth opportunities. Cinema City then expanded into CEE, starting with Hungary in 1997, followed by the launch of operations in Poland and the Czech Republic in 1999, the establishment of a subsidiary in Bulgaria in 2003 (which commenced operations in 2006), and the launch of operations in Romania in 2007. With the acquisition of the Palace Cinemas chain in 2011, Cinema City added Slovakia as its seventh country of operations and expanded its operations in Hungary and the Czech Republic.

In 2006, CCI completed an initial public offering of its shares on the WSE and issued 10 million new shares at US\$6.251 per share. CCI chose to list on the WSE as Poland was, at that time, its primary territory, with revenues reflecting approximately 62 per cent. of the Existing Cinema City Group's total admissions at that time.

In December 2012, upon the incorporation of Cinema City Holding, CCI transferred its cinema operations in CEE to Cinema City Holding. Cinema City's Israeli operations will be transferred to Cinema City Holding as part of the Reorganisation.

Year	Event
1931	Opening of the first cinema in Haifa, Israel
1982	Opening of the first multiplex in Israel
1997	First multiplex in CEE region opened in Budapest, Hungary
1999	Launch of operations in Poland and in the Czech Republic Agreement with the Imax Corporation
2002	Commencement of operations of New Age Media in Poland Acquisition of Ster Century in Poland
2003	Bulgarian subsidiary established Commencement of operations of Forum Film Poland
2005	Romanian subsidiary established Commencement of operations of Forum Film Hungary
2006	CCI IPO on the Warsaw Stock Exchange Commencement of operations in Bulgaria
2007	Acquisition of Kinepolis in Poland First multiplexes opened in Romania Commencement of operations of New Age Media in Romania and Hungary
2008	Commencement of digitalisation of cinemas Development of Internet ticket sales
2009	Opening of the first megaplex in Bucharest, Romania

The principal events in Cinema City's history are listed below:

Year	Event
2010	Digital revolution—conversion and installation of more than 150 screens into digital format
2011	Acquisition of Palace Cinemas in the Czech Republic, Hungary and Slovakia
2012	Digitalisation process completed First digital IMAX theatre in Israel and the first 4DX projection in Israel—Yes Planet multiplex, Rishon LeZion, Israel Transfer by CCI of cinema operations in CEE to Cinema City Holding
2013	Completion of first stage of deployment of 4DX auditorium systems

3. Proposed restructuring

Certain of Cinema City's operations and assets, which relate to Cinema City's Israeli cinema operations, are not currently held by Cinema City Holding but are held by CCI through other Existing Cinema City Group Companies. Cinema City's Israeli cinema business is owned and operated by the following members of the Existing Cinema City Group — Cinema-Phone Ltd, Norma Film Limited (and its subsidiaries, Forum Film Limited, Cinema Theatres Ltd, I.T. Planet Advertising Ltd) and IT 2004.

In anticipation of the Combination, the Existing Cinema City Group is in the process of undertaking an internal reorganisation exercise (the Reorganisation) with the effect that, following the completion of the Reorganisation, all of the Cinema City Business will be held by Cinema City Holding, together with other members of the Cinema City Holding Group. As part of the Reorganisation, CCI will: (i) transfer all of its Israeli cinema operations to Cinema City Holding by way of a transfer of (a) the entire issued share capital of Cinema-Phone Ltd and Norma Film Ltd (together with its subsidiaries), and (b) the cinema-related assets (excluding real estate) and Yes Planet brand owned by IT 2004 (with that company remaining within the Remaining Cinema City Group); (ii) assume the outstanding external bank debt of Cinema City Finance; and (iii) transfer Cinema City Finance to Cinema City Holding.

While the Reorganisation (other than the entering into of the Relevant Leases) is a condition to Completion, the Company has the right to waive such condition (in whole or in part) if all other conditions have been satisfied or waived. To the extent that Cineworld does so, such that the Reorganisation has not been completed by Completion, the Company and Cinema City have agreed to work together to complete the Reorganisation as soon as reasonably practicable thereafter.

Assuming that the Reorganisation is completed in full prior to Completion, Cineworld will, on Completion, acquire the whole of the Cinema City Business through its acquisition of the Cinema City Holding Group (as constituted following the completion of the Reorganisation).

The freehold real estate (land and buildings) and the related leasehold at AuPark that is owned by the Existing Cinema City Group will not be acquired by Cineworld pursuant to the Combination. Therefore, as part of the Reorganisation, all of the freehold real estate assets and the related leasehold at AuPark currently held by Cinema City Holding subsidiaries, being Cinema City Poland CC Sp. Zoo SKA (Janki and Katowice cinema-related property and an office property in Fosa), I.T. Poland Development 2003-CC Sp. Zoo SKA (Torun and Ł ´ od´ ´z cinema-related property and land at Gliwice), Cinema City Czech s.r.o. (Galaxie cinema-related property) and Cinema City Slovakia s.r.o. (AuPark cinema-related property), will be transferred to members of the Remaining Cinema City Group. It is proposed that, as part of the Reorganisation, Cineworld, CCI and certain members of the Enlarged Group and the Remaining Cinema City Group will enter into leasehold arrangements in respect of these real estate assets (other than the land at Gliwice) and the Rishon LeZion cinema property owned by IT 2004, as more particularly described in Section 3 of Part III (Terms of the Combination).

Consents from HSBC Bank PLC, Bank Zachodni WBK S.A., ING Bank N.V., ING Bank Slaski S.A. and BNP Paribas will be required in respect of the Polish, Slovak and Czech aspects of the Reorganisation, and the consent of Bank Hapoalim will be required in respect of the Israeli aspects of the Reorganisation. Consent from the landlord of the land on which the AuPark cinema is built will also be required to transfer the AuPark cinema-related property from Cinema City Slovakia s.r.o. to the relevant member of the Remaining Cinema City Group.

4. Organisational structure

Following completion of the proposed Reorganisation, Cinema City Holding will be the principal holding company for Cinema City. A full list of Cinema City Holding's principal subsidiary undertakings (including those which will become subsidiaries of Cinema City Holding in advance of Completion as a result of the Reorganisation) which are considered to be likely to have a significant effect on the assessment of the assets and liabilities, financial position and profits and losses of the Enlarged Group, is set out in Section 5 of Part XIII (Additional Information) of this document.

5. The industry

In the CEE countries in which Cinema City operates, the cinema industry has experienced strong growth both in terms of number of screens and admissions levels between 2005 and 2012, although the cinema industry in several of these countries (such as Bulgaria and Romania) remains underdeveloped both in terms of admissions per capita and capita per screen.

In most of Cinema City's countries of operations, there has been a noticeable shift in recent years from traditional smaller, often mall-based, cinema sites (which, in some of the relevant CEE countries, were historically state-owned) to the development of the multiplex and, in certain countries including Israel and Romania, the megaplex.

Average ticket prices and concession spend per head have continued to increase in excess of inflation, 32.2 per cent. and 94.6 per cent., respectively, between 2005 and 2012.

6. Principal activities and principal markets

(A) Principal activities

Cinema operations

Cinema operations represent Cinema City's core business, specifically the operation of multiplexes, with up to 24 screens per cinema, with box office revenues representing approximately 59.1 per cent. of total revenues for FY 2012 and 58.4 per cent. of total revenue in the 2013 Interim Period. Cinema City's cinema operations are comprised of box office sales, retail sales of food and drink through concession stands and on and off-screen advertising. Multi-screen cinemas enable Cinema City to offer a diversified selection of films over longer periods and also to realise operating efficiencies through the use of common facilities and staggered film starting times.

Cinema City aims to operate an efficient seats-to-lease area ratio. Cinema City applies standardised interior design and technology in every country in which it operates with a view to building brand recognition and creating economies of scale. All of Cinema City's cinemas have digital surround sound systems, wide screens and digital projectors, the latter enabling Cinema City to offer an enhanced viewing experience, including 3D format, to its customers.

Cinema City has exclusive rights to develop and operate IMAX screens in Poland, Romania, Bulgaria, the Czech Republic, Israel (excluding Eilat) and Hungary.

Cinema City has also embraced 4DX technology, which allows the cinema audience to view feature-length Hollywood films in 4D with a choreographed mix of air, water, scent, motion and vibration, fully immersing the audience in the action on screen. The first Cinema City theatre to offer a 4DX auditorium was in Rishon LeZion, Israel, which opened in July 2012, and Cinema City now operates this technology in all of its countries of operation except Romania and Slovakia.

Cinema City has continued to develop its own internet ticket sales channels. Customers in all of Cinema City's countries of operation can book tickets using Cinema City's website with Poland, Israel and Romania offering the option to book and pay in advance, and Hungary, the Czech Republic, Slovakia and Bulgaria offering advance booking with pay ''in cinema'' before the film. In certain countries in which Cinema City operates, customers also have the option to print their tickets at home.

Concessions

Concession sales are Cinema City's second largest source of revenue after box office revenues, representing approximately 20 per cent. of total revenues for FY 2012 and 21 per cent. of total revenue in the 2013 Interim Period.

Concession sales have a much higher profit margin than admission sales and Cinema City has devoted considerable management effort to increase these sales and improve its operating margin as a result.

These efforts have included the implementation of the following strategies:

Product mix optimisation: Concession products are primarily comprised of various sizes of popcorn, soft drinks and confectionery. Cinema City offers varieties and flavours of confectionary and soft drinks tailored to a particular geographic region. Cinema City has also introduced specially priced ''combo-meals'' for all customers, as well as offerings targeted towards children and senior citizens. Cinema City also periodically introduces new concession products designed to attract additional concession purchases.
Cinema design: Cinema City's cinemas are designed to optimise efficiencies at concession stands, including strategic placements so as to emphasise their visibility and reduce the length of concession stand queues.
Cost control: Cinema City negotiates prices for concession supplies directly with the sellers and manufacturers on a bulk rate basis. Cinema City has supply arrangements in place to sell Coca-Cola products in its cinemas in all of the countries in which Cinema City operates.
''Coffee Corner'': Cinema City offers ''Coffee Corner'' concessions which it owns and operates within its cinemas. These concessions enhance the variety of products available to customers.

Advertising and Sponsorship

Advertising and sponsorship represents Cinema City's third largest source of revenue behind box office and concession revenues, representing approximately 11.7 per cent. of Cinema City's revenues in FY 2012 and 11.7 per cent. for the 2013 Interim Period.

In CEE, Cinema City engages in advertising through New Age Media, an advertising sales house, established in 2002 in Poland and subsequently expanded out to each of Cinema City's countries of operations in CEE. In Israel, Cinema City offers advertising and sponsorship services through its Cinema Channel brand. Through New Age Media and Cinema Channel, Cinema City offers full service on-screen and off-screen advertising campaigns, both country-specific and cross-border. Its services include adapting clients' advertisements to cinema standards, delivering cinema-media planning services, organising promotional events, and developing marketing materials.

New Age Media currently covers advertising for over 1,000 screens across the six CEE countries in which Cinema City operates. In FY 2012, New Age Media conducted 889 campaigns across these countries.

Through New Age Media and Cinema Channel, Cinema City also offers sponsorship contracts for Cinema City's multiplexes, ranging from sponsorship of individual films to an entire multiplex site. Through this offering, advertisers have the opportunity to advertise their brands and products on a long-term basis.

Film distribution

Cinema City is also active in film distribution, which complements its cinema operations and associated retail and advertising activities, and supports its revenue growth. Film distribution represented approximately 9 per cent. of Cinema City's revenues in FY 2012 and 7.3 per cent. for the 2013 Interim Period.

Cinema City engages in film distribution in all of its countries of operation through its Forum Film arm, actively engaging in marketing and promotional efforts to increase the visibility of films. In all of its countries of operation, except for the Czech Republic, Poland and Slovakia, Forum Film acts as the exclusive motion picture distributor for the Walt Disney Company. In all of its countries of operation (other than the Czech Republic and Slovakia) Forum Film also acts as the exclusive film distributor for MGM. In the Czech Republic and Slovakia, MGM gives Forum Film exclusive distribution rights to certain films on a case-by-case basis. In Israel, Forum Film also serves as a sub-distributor of Sony Pictures and Fox Studios on behalf of AD Matalon and, in Bulgaria, Forum Film also distributes titles released by Paramount and Universal Studios.

(B) Principal markets

Overview

Cinema City operates 966 screens across 99 multiplex cinemas in its seven countries of operation, making it the largest cinema operator in the region by number of screens. Cinema City operates cinemas under the Cinema City brand in all of its countries of operation with the exception of Israel, where Cinema City operates cinemas under the ''Yes Planet'' and ''Rav-Chen'' brands.

Cinema City's operations by country are illustrated below:

In 2012, Cinema City's position in its countries of operations, by number of screens, was as follows:

Country	Number of screens (Total)	Number of screens (Cinema City)	% of screens operated by Cinema City
Poland	1,150	339	29.5
Hungary	390	176	45.1
Czech Republic .	828	111	13.4
Romania .	264	134	50.8
Bulgaria	157	65	41.4
Slovakia	217	29	13.4
Israel	275	112	40.7

(Source: Dodona Research (ex Bulgaria), Cinema City's own data (Bulgaria).)

Poland

Industry overview

The cinema industry in Poland is one of the largest in CEE based on admissions. The Polish cinema industry is relatively under-penetrated and under-screened compared with its Western European counterparts: in 2012, Poland had approximately 33,300 capita per screen (compared with approximately 16,600 capita per screen in the UK) and admissions per capita of 1.0 (compared with 3.1 in France and 2.7 in the UK during the same period). The Polish cinema industry has experienced strong growth in the recent past, with more than 500 multiplex screens being developed since 2000. Entry to the EU in May 2004 has also attracted European investment to the country.

The Polish cinema industry has three main operators: Cinema City, Multikino (Vue) and Helios, with a combined share of more than 80 per cent. of admissions.

In terms of film distribution in Poland, United International Pictures has been Poland's top film distributor since 2008 due to its representation of Paramount, Sony and Universal. Other distributors in Poland include Kino Swiat; Forum Film (Poland); Warner Bros; ITI Cinema; Monolith; and Imperial Cinepix.

Cinema City position

Cinema City commenced operations in Poland in 1999, and now operates 339 screens (including five IMAX screens), with 69,903 seats in 31 cinemas. Cinema City has grown to become the largest cinema operator in Poland by market share, with a 29.5 per cent. share in 2012 based on number of screens, as well as by ticket sales.

Poland is currently the most significant country for Cinema City's operations, accounting for approximately 37 per cent. of box office sales in FY 2012. During this period, box office sales were impacted by a drop in the performance of Polish films, both in terms of releases and admissions. In the 2013 Interim Period, Poland has generated approximately 33 per cent. of Cinema City's box office sales.

ITIT, CCI's parent company, commenced its operations in Poland initially through the development of sites in Warsaw. Cinema City has since developed its position in the country through both organic and acquisitive growth (for example, Cinema City acquired four multiplexes from Ster Century in 2002). Cinema City's strategy has been to target densely populated urban areas, and it currently operates cinemas in 19 cities across Poland (the largest of which is in Krakow). Cinema City's most recent cinema is in Torun, ´ which opened in 2011.

In selected locations, such as Cinema Parks and Spin City, Cinema City operates educational and entertainment centres within its multiplex operations, which are intended to facilitate and encourage cinema attendance in cinemas not connected to a shopping centre.

New Age Media, Cinema City's advertising sales house, covers 480 screens, both for Cinema City and Helios (the third largest cinema operator in Poland), representing approximately 70 per cent. of the Polish cinema advertising sector.

Forum Film (Poland) distributes films from MGM and several other independent producers and domestic film studios.

Hungary

Industry overview

The cinema industry in Hungary was largely built in the late 1990s and remains underdeveloped in terms of both capita per screen (approximately 25,500 capita per screen in 2012 compared with approximately 16,600 in the UK) and admissions per capita (1.1 in 2012 compared to 3.1 in France and 2.7 in the UK).

Since the first multiplexes arrived in Hungary in 1996, multiplexes have gradually replaced the more traditional screens. There are now only a third as many traditional screens as there were in 1995, while total screen numbers have fallen by around 200 since that time.

Cinema City operates almost half of all screens in the Hungarian cinema industry, and other operators include MiMoznik and Budapest Film.

Film distribution in Hungary is shared principally between three distributors: InterCom (representing Fox, Sony and Warner Bros), UIP-Duna (a joint venture between Paramount, Universal and state television company Duna Televizio) and Forum Film (Hungary).

Cinema City position

Following the acquisition of Palace Cinemas Kft in January 2011 (comprising four multiplexes in Budapest with 44 screens), Cinema City is now the largest operator in Hungary by number of screens. In 2012, Cinema City operated 176 screens (which includes one IMAX screen), accounting for 45.1 per cent. of the Hungary cinema market by number of screens in Hungary.

Cinema City currently operates 20 multiplexes in Hungary, with 33,851 seats across the country. For FY 2012, Hungary accounted for approximately 16 per cent. of Cinema City's ticket sales. In the 2013 Interim Period, Hungary generated approximately 16 per cent. of Cinema City's ticket sales.

Cinema City commenced cinema operations in Hungary in 1997, which represented its first operations outside Israel. Cinema City has concentrated its development in Hungary both within Budapest and, given the relatively developed state of the cinema industry in Budapest, in certain other cities across the country. Between 1998 and 2000, Cinema City opened eight new multiplexes in selected major cities (including Gyor, Szekesfehervar and Pecs) and, since 2001, Cinema City has extended its development to less populated cities (including Zalaegerszeg, Szombathely and Vezprem).

In recent years, Cinema City has followed an acquisitive strategy in Hungary, acquiring Palace Cinemas Kft in January 2011 and, also in 2011, signing new lease agreements for three multiplexes, with a total of 17 screens, previously run by Palace Mozi.

Forum Film (Hungary) exclusively distributes films from MGM (which, in 2012, included ''The Hobbit: An Unexpected Journey'' and ''Skyfall'') and Walt Disney and also distributes films from several other independent producers.

Czech Republic

Industry overview

The growth of the cinema industry in the Czech Republic was marked by the opening of the country's first multiplex in 1999, after a period of decline in the state support for cinemas which had been enjoyed in the early 1990s, and a consequent fall in admissions levels. Multiplexes have increasingly become the leading format in the Czech Republic, representing around a quarter of the country's screens and three quarters of box office revenue. There is also a substantial, though low revenue, independent cinema sector. Although admissions remain volatile on a year to year basis (averaging around 11 to 13 million), ticket prices have risen by 26 per cent. since 2003.

There are two main cinema operators in the Czech Republic: Cinema City and CineStar, with a combined share of more than 24 per cent. of the country's screens.

There are three principal film distributors operating in the Czech Republic: Bontonfilm (which represents Fox, Paramount and Universal, as well as releasing many local language titles), Falcon (which represents Sony and Walt Disney, as well as certain local titles) and Warner Bros (which distributes its own films). Forum Film (Czech) entered the film distribution sector in 2012 and exclusively distributes some MGM films on a case-by-case basis.

Cinema City position

Following the acquisition of Palace Cinemas' Czech operations in 2011, Cinema City is now the largest cinema operator in the Czech Republic, operating 13.4 per cent. of the country's 828 screens in 2012 and capturing 35 per cent. of admissions over the same period.

Cinema City currently operates 13 multiplexes in the Czech Republic, with 111 screens (including one IMAX and one 4DX auditorium) and 22,037 seats across the country. For FY 2012, the Czech Republic accounted for approximately 13 per cent. of Cinema City's box office sales. In the 2013 Interim Period, the Czech Republic generated approximately 11 per cent. of Cinema City's box office sales.

Cinema City commenced cinema operations in the Czech Republic in September 1999 and, until 2008, focused its operations in Prague. Since 2008, Cinema City has expanded its operations into other major cities, and now operates cinemas in seven cities across the country. The acquisition of Palace Cinema's Czech operations in 2011 added eight multiplexes (with 65 screens) across the Czech Republic to Cinema City's portfolio.

Cinema City has been active in the Czech film distribution sector since March 2012, when it set up Forum Film (Czech), its Czech film distribution arm.

Romania

Industry overview

The Romanian cinema industry has evolved from a principally state-owned structure to one led by international operators with a more modern style of cinema chain. This shift was marked by the opening of Romania's first multiplex in Bucharest in 2000. Romania's cinema industry has grown substantially over the last five years, with screen numbers more than doubling, admissions almost tripling and box office revenues quadrupling. In 2012, there were around 25 multiplexes operating across the country. Despite this growth, however, Romania remains significantly underdeveloped in terms of admissions per capita (0.39 in 2012 compared with 3.1 in France and 2.7 in the UK) and capita per screen (approximately 81,000 capita per screen in 2012 compared with approximately 16,600 capita per screen in the UK).

Cinema operations in Romania are represented principally by Cinema City and a number of smaller competitors.

The film distribution sector is principally split between five distributors, accounting for two thirds of releases and over 90 per cent. of annual admissions. These distributors are MediaPro Distribution (a part of Central European Media Enterprises); Ro-Image 2000 (which represents Paramount and Universal); Forum Film (Romania); InterCom Film (which represents Sony); and Odeon Cineplex (which represents Twentieth Century Fox).

Cinema City position

Cinema City has a leading position in the Romanian cinema industry, operating approximately 50.7 per cent. of the country's 264 screens in 2012 and capturing approximately 52 per cent. of the admissions in the same period. Cinema City has a number of small competitors in Romania, but is the only business so far to have built a substantial circuit of modern cinemas.

Cinema City operates 15 multiplexes with 142 screens (including one IMAX) and 26,925 seats across Romania. In FY 2012, Romania accounted for approximately nine per cent. of Cinema City's total box office sales. In the 2013 Interim Period, Romania generated approximately 11 per cent. of Cinema City's total box office sales.

Cinema City commenced cinema operations in Romania in December 2007, commencing its operations through opening cinemas in what are now the third and fourth most populous cities in the country (Timisoara and Iasi). Cinema City entered Bucharest in 2009 by opening a megaplex (including an IMAX screen) in one of the biggest shopping malls in the capital. Cinema City has since continued to strengthen its position in Romania and now operates in 12 cities across the country. Cinema City's latest cinema was the opening of an eight-screen multiplex in the Polus Centre, Cluj, in 2013.

Forum Film has been active in Romania since 2010, exclusively distributing Walt Disney and MGM films (which, in 2012, included ''Skyfall'' and ''The Hobbit: An Unexpected Journey'').

Bulgaria

Industry overview

The Bulgarian cinema industry remains underdeveloped, both in terms of admissions per capita (approximately 0.7 in 2012 compared with 2.7 in the UK over the same period) and capita per screen (approximately 37,969 capita per screen in 2012 against approximately 16,600 in the UK over the same period).

The Bulgarian cinema industry is currently led by two operators, Alexandra Films and Cinema City.

Film distribution in Bulgaria is currently shared principally between Alexandra Films and Forum Film.

Cinema City position

Cinema City is currently the second largest operator in Bulgaria by number of screens, with 51 screens (representing 26.2 per cent. of the total number of screens in Bulgaria) against 70 screens (representing 35.9 per cent. of the total number of screens in Bulgaria) for Alexandra Films in 2012.

Cinema City entered Bulgaria in 2003, opening the first modern multiplex and IMAX screen in Sofia as part of the ''Mall of Sofia'' shopping mall project. Cinema City now operates six multiplexes in five cities in Bulgaria, with 65 screens and 11,684 seats across the country. In FY 2012, Bulgaria accounted for approximately four per cent. of Cinema City's total box office sales. In the 2013 Interim Period, Bulgaria generated approximately four per cent. of Cinema City's total box office sales.

Cinema City, through Forum Film (Bulgaria), entered the film distribution sector in Bulgaria in 2009. Forum Film (Bulgaria) exclusively distributes films for Walt Disney and MGM, and is the key distributor for Paramount and Universal films.

Slovakia

Industry overview

Since 2000, the Slovakian cinema industry has evolved from a market comprising largely single screen cinemas to one dominated by multiplexes and miniplexes, with a corresponding rise in admissions levels (up by around a third) and ticket prices (which have quadrupled). This shift was marked by the development of the country's first multiplex in Bratislava in 2000. The cinema industry in Slovakia remains undeveloped, with admissions per capita at 0.63 in 2012 (compared with 2.7 in the UK over the same period).

At the end of 2012, the cinema industry in Slovakia consisted of seven multiplexes with 52 screens between them, 111 single-screen cinemas, 13 outdoor cinemas and three video cinemas. The remainder of the sector was made up of one duplex cinema and a number of miniplexes with three to five screens each.

The Slovakian cinema industry is led by two main operators: CineMAX (43 screens) and Cinema City (29 screens), with a combined share of more than 33 per cent. of screens.

Until 2012, the film distribution sector had historically been led by four distributors that between them represented the major Hollywood Studios: Continental Film (Warner Bros); Tatrafilm (Fox, Paramount and Universal); Itafilm; and Saturn Entertainment. This position has shifted in recent years, however, with the entry of Forum Film (Slovakia) in 2011 and the acquisition of Tatrafilm in August 2012 by the Czech distributor, Bontonfilm.

Cinema City position

In 2012, Cinema City represented approximately 13.4 per cent. of cinema screens in Slovakia, operating three multiplexes in Bratislava with 29 screens and 5,560 seats.

Cinema City entered commercial cinema operations in Slovakia through the acquisition of these three multiplexes from Palace Cinema in January 2011. To date, this represents Cinema City's only operations in Slovakia.

For FY 2012, Slovakia accounted for approximately 4.0 per cent. of Cinema City's box office sales. In the 2013 Interim Period, Slovakia generated approximately three per cent. of Cinema City's total box office sales.

Cinema City entered the film distribution sector in Slovakia through its distribution arm, Forum Film (Slovakia), in 2011. In its first full year of trading in 2012, Forum Film (Slovakia) achieved third place in the distribution sector, largely due to a distribution arrangement with MGM by which it distributed ''Skyfall''. This agreement accounted for around a third of Forum Film (Slovakia)'s revenues in Slovakia in 2012.

Israel

Industry overview

The cinema industry in Israel sits between the CEE countries and Western European countries in terms of its level of maturity. The cinema industry in Israel has grown in recent years as megaplexes replace the more traditional smaller mall-based multiplexes (though the number of screens in Israel has declined as a consequence of this shift). In 2012, Israel's population of approximately 8 million generated approximately 11.8 million admissions.

Besides Cinema City, there are two main cinema operators in Israel: New Lineo (which operates under the ''Cinema City'' brand name — see further below) and Globus.

Distributors play a key role in the Israeli cinema industry because cinema operators generally have preferential arrangements with selected distributors. Only cinemas that face no local competition will show films from all distributors. Major cinema operators have therefore developed their own distribution entities, and film distribution in Israel is led by two companies: Globus (which distributes UIP and Warner Bros films) and Forum Film (Israel) (which distributes Walt Disney and MGM films).

Cinema City position

Cinema City operates cinemas in Israel under the ''Rav-Chen'' and ''Yes Planet'' brand names but not, as a result of the trademark not being registered in Israel, under the ''Cinema City'' brand name. The ''Cinema City'' brand name is used in Israel by one of Cinema City's competitors, New Lineo.

Cinema City currently operates 104 screens (one of which is an IMAX screen) in Israel, with 18,548 seats across 11 cinemas. In 2012, Cinema City operated 40.7 per cent. of the screens in Israel and captured approximately 39 per cent. of admissions.

Israel is currently Cinema City's second most significant territory by revenue, accounting for approximately 17 per cent. of Cinema City's box office sales in FY 2012. For the 2013 Interim Period, Israel generated approximately 21 per cent. of Cinema City's box office sales. Cinema City's financial performance for this period was strengthened by the revenue generated by the opening of the megaplex in Rishon LeZion in July 2012 (see further below).

The predecessor to Cinema City, which was started by the Greidinger family, commenced its operations in Israel in 1931 and, until 1997, Israel was Cinema City's sole territory of operation. Cinema City's cinema operations in Israel are mainly along the coastline and in Israel's major cities, including Tel-Aviv (where Cinema City opened Israel's first multiplex in 1982), Jerusalem and Haifa.

Cinema City continues to modernise and upgrade its Israeli chain and strengthen its position in Israel through the closing of its smallest and oldest multiplexes while opening modern state-of-the-art larger multiplexes. In July 2012, Cinema City opened its third Yes Planet megaplex in Israel, in Rishon LeZion, which has become Cinema City's flagship operation in Israel with 24 screens, including Cinema City's first 4DX auditorium and IMAX screen in the country.

Forum Film (Israel) distributes films exclusively for Walt Disney and MGM studios, and also sub-distributes Fox and Sony pictures on behalf of AD Matalon. It currently holds an approximate 40 per cent. share in film distribution in Israel.

Future development

Cinema City's development plan for the next three years includes the opening of 377 new screens. Openings are planned in the following countries in which Cinema City operates: 87 screens in Poland, 12 screens in Bulgaria, 233 screens in Romania and 45 screens in Israel. As part of the developments in Israel, Cinema City has commenced work for a new real-estate cinema development in Jerusalem which is scheduled to open in 2015 with an intended 15 screens.

7. Customers and suppliers

Customers

Due to the nature of its products and services, Cinema City is not dependent on any single client or demographic of customers. No single customer or client accounts for more than 10 per cent. of total sales of Cinema City.

Suppliers

Cinema City's long-standing relationships with the production studios for which Forum Film acts as distributor in all of Cinema City's countries of operations, as described above, are of strategic importance to Cinema City.

8. Regulatory Environment

No special or significant concessions, permits and other administrative authorisations for carrying on business are required in any of Cinema City's countries of operation. Cinema City maintains the necessary permits which are required in connection with its business.

PART VI

OPERATING AND FINANCIAL REVIEW OF CINEWORLD

The following review of Cineworld's financial condition and operating results should be read in conjunction with the historical financial information on Cineworld and the notes related thereto set out in Part VIII (Historical Financial Information relating to Cineworld) incorporated by reference in this document in accordance with Part XIV (Documents incorporated by reference) of this document and the other financial information included elsewhere in this document. Except as otherwise stated, the information in this Part VI has been extracted without material adjustment from Cineworld's annual report and audited accounts for FY 2012, FY 2011 and FY 2010, the unaudited interim results for the 26 week period ended 27 June 2013 which have been incorporated by reference into this document and the unaudited interim results for the 2013 Interim Period which are set out in Section 3 of Part VIII (Historical Financial Information relating to Cineworld). The historical financial information has been prepared in accordance with IFRS.

Some of the information in the review below and elsewhere in this document includes forward-looking statements based on current expectations that involve risks and uncertainties. See ''Forward-Looking Statements'' on pages 32-33 of this document for a discussion of important factors that could cause actual results to differ materially from the results described in the forward-looking statements contained in this document.

1. Documents incorporated by reference

The operating and financial reviews included in the following documents are incorporated by reference into this document:

the Cineworld Group's 2010 Annual Report and Accounts;
the Cineworld Group's 2011 Annual Report and Accounts;
the Cineworld Group's 2012 Annual Report and Accounts; and
the Cineworld Group's 2013 Interim Report.

2. Cross-reference list

The following list is intended to enable investors to identify easily specific items of information which have been incorporated by reference into this document.

2.1 Cineworld Group's 2010 Annual Report and Accounts

The page numbers below refer to the relevant pages of the Cineworld Group's 2010 Annual Report and Accounts:

Highlights 2010—page 1;
Chairman's Statement—page 4;
Our Strategy—page 6;
Chief Executive and Chief Financial Officers' Review—pages 8 to 15; and
Risks and Uncertainties—pages 16 to 18.

2.2 Cineworld Group's 2011 Annual Report and Accounts

The page numbers below refer to the relevant pages of the Cineworld Group's 2011 Annual Report and Accounts:

Highlights 2011—page 1;
Chairman's Statement—pages 2 to 3;
Our Strategy—pages 6 to 7;
Chief Executive and Chief Financial Officers' Business Review—pages 14 to 21; and
Risks and Uncertainties—pages 24 to 25.

2.3 Cineworld Group's 2012 Annual Report and Accounts

The page numbers below refer to the relevant pages of the Cineworld Group's 2012 Annual Report and Accounts:

Highlights 2012—page 1;
Chairman's Statement—page 2;
Our Strategic Framework—pages 8 to 9;
Our Strategic Progress—pages 10 to 11;
Chief Executive and Chief Financial Officers' Business Review—pages 12 to 22; and
Risks and Uncertainties—pages 24 to 25.

2.4 Cineworld Group's 2013 Interim Report

The page numbers below refer to the relevant pages of the Cineworld Group's 2013 Interim Report:

Highlights 2013—page 1;
Chief Executive Officer's Review—pages 2 to 9; and
Risks and Uncertainties—pages 22 to 23.

3. Results of operations for the 2013 Interim Period compared with the 2012 Interim Period

3.1 Performance Overview

		39 week period ended 26 September 2013		39 week period ended 27 September 2012
	Total Group	Picturehouse	Cineworld	Total Group
	Total	Total	Total	Total
Admissions	39.3m	2.2m	37.0m	34.8m
	£m	£m	£m	£m
Box office	210.9	13.7	197.2	180.5
Retail	71.0	6.8	64.2	59.0
Other Income	21.8	6.1	15.7	13.4
Total revenue	303.7	26.6	277.1	252.9

Cineworld Group plc's interim results for the 2013 Interim Period reflect the trading and financial position of the Cineworld Group. Picturehouse became part of the Cineworld Group on 6 December 2012 and was consolidated for the final 22 days of 2012 only.

Total revenue in the 2013 Interim Period was £303.7 million, an increase of 20.0 per cent. on the 2012 Interim Period (2012: £252.9 million). Box office revenue increased 16.8 per cent. to £210.9 million. Average ticket price per admission increased by 3.5 per cent. to £5.37 (2012: £5.19) while total retail revenues of £71.0 million were ahead of the previous year (2012: £59.0 million). Other revenues increased by 62.7 per cent. to £21.8 million (2012: £13.4 million).

The Cineworld Group's box office market share in the combined UK and Irish market during the 2013 Interim Period was 27.3 per cent. (2012: 26.6 per cent.) making it the largest cinema operator in the UK and Ireland. Cineworld's market share (excluding Picturehouse) was 25.5 per cent. (2012: 24.9 per cent.) (all market data supplied from Rentrak).

3.2 Cineworld cinemas

(A) Box Office

Cineworld's principal income over the 2013 Interim Period was represented by box office revenues. An increase in admissions in the 2013 Interim Period combined with a better average ticket price contributed to a 9.2 per cent. increase in box office sales to £197.2m. This equated to a 8.2 per cent. increase on a gross box office basis (inclusive of VAT); while the UK and Ireland cinema industry as a whole was up 4.6 per cent. against the 2012 Interim Period (Source: Rentrak).

The average ticket price per admission increased by 2.7 per cent. to £5.33 (2012: £5.19). This increase resulted in part from annual price increases, a higher proportion of adults visiting at peak times and an increased level of 3D business. The average net ticket price (excluding VAT) of 3D was £6.66 compared with 2D of £4.82. The proportion of customers attending during the weekend has increased slightly from the 2012 Interim Period, which has also contributed to the increase in average ticket price.

Box office revenues are spread across a number of films, with the top ten highest grossing films in the 2013 Interim Period accounting for over a third of Cineworld's total box office revenues (2012: 40 per cent.). Film performance in 2013 Interim Period was underpinned by the success of ''Despicable Me 2'', ''Les Miserables'' (both grossing nationally in excess of £40 million) and ''Iron Man 3'' (grossing nationally in excess of £30 million). This was supported by a number of other film performances including ''Man of Steel'', ''Monsters University'', ''The Croods'', ''Star Trek into Darkness'' and ''Fast & Furious 6'', all of which grossed nationally over £25 million. Cineworld also remained the biggest exhibitor of Bollywood films in the UK with a market share in excess of 50 per cent. (Source: Rentrak). In addition, other specialised and foreign language films were played and Cineworld has continued to be a leading exhibitor of Tamil films.

Cineworld continued to make good progress during the 2013 Interim Period in developing its event cinema offering which has been made possible by Cineworld's digital conversion programme. In the field of the performing arts, Cineworld's core live opera and theatre product came from the New York Metropolitan Opera, The National Theatre and The Royal Opera House, all of which were well attended. Screening of these live events is increasing in popularity among Cineworld's core customers. The screening of ''RSC Live: Richard II'' (with David Tennant) was the highest grossing live event during the period to date. The ''Doctor Who'' 50th anniversary ''Doctor Who: The Day of the Doctor'' 3D event in November 2013 also performed well. Event cinema currently contributes a small part of Cineworld's revenues. However, demand for the right product is strong and overall ticket prices can be more than 50 per cent. higher than for regular film screenings. It therefore remains a continuing part of Cineworld's strategy.

(B) Retail

Retail, which includes food and drink sales to Cineworld's customers, was the second largest source of revenue over the 2013 Interim Period, representing 23 per cent. of total revenues (2012: 23 per cent.). Total retail revenues were stronger at £64.2 million (2012: £59.0 million).

Net retail spend per person improved 2.4 per cent. in the period to £1.74 (2012: £1.70) partly due to the film mix, but also reflecting the expansion of Cineworld's retail offerings.

During the 2013 Interim Period, Cineworld continued to make progress in developing its coffee offering. As at the end of September 2013, Cineworld had opened seven Starbucks coffee outlets. Since the end of the 2013 Interim Period, Cineworld has opened a further four outlets and is scheduling more locations for 2014. Although many sites have been operational for a short period, the longer-standing outlets have shown a significant positive effect on profitability. The Cineworld Directors believe that the more recent openings will also contribute positively to profitability.

(C) Other Income

Other income includes all other revenue streams outside box office and retail and represented about 5.7 per cent. of total revenues in the 2013 Interim Period (2012: 5.3 per cent.). Revenues during the 2013 Interim Period increased by 17.2 per cent. to £15.7 million (2012: £13.4 million).

The largest single element of other income is screen advertising revenue. Trading at DCM was better in the 2013 Interim Period than in the comparable period for 2012 and resulted in a 16.8 per cent. increase in Cineworld's share of advertising revenues.

The management team at DCM has been driving operational efficiencies and effectiveness and, during the 2013 Interim Period, has been working on further exploiting the benefits of digital projection. The Board believes that DCM is now in a position to offer a greater number and a more diverse range of campaigns to its customers.

Other income during the 2013 Interim Period included sales of 3D glasses, ticket bookings and theatre hires. Much of the increase in income was due to sales of 3D glasses which reflected higher 3D admissions compared with the previous comparative period.

3.3 Picturehouse

Since its acquisition in December 2012, Picturehouse has traded in line with expectations. As stated at the time of announcing the acquisition, Picturehouse continues to be run under its pre-acquisition management who Cineworld believes are well positioned to develop the Picturehouse brand and pipeline of new cinemas.

	Picturehouse 39 weeks to 26 September 2013 Total	Picturehouse 39 weeks to 27 September 2012(1) Total
Admissions	2.2m	2.1m
	£m	£m
Box office	13.7	12.6
Retail	6.8	6.0
Other Income	6.1	5.7
Total revenue	26.6	24.3

(1) Comparative information is presented for Picturehouse on a pro forma basis and is not included in the consolidated Cineworld Group information for the 39 weeks to 27 September 2012

Overall, revenues for the 2013 Interim Period have increased by 9.5 per cent. Box office revenues increased by 8.7 per cent. to £13.7 million—the result of both a 4.8 per cent. increase in admissions and a 3.8 per cent. rise in average ticket price. Retail revenue increased by 13.3 per cent. to £6.8 million and other income increased by 7.0 per cent. to £6.1 million (other income includes advertising income, membership subscription income and screen hire income). EBITDA has increased by 3.3 per cent. to £3.1 million on a pro forma basis.

On 8 October 2013, the Competition Commission published their final decision on the acquisition of Picturehouse resulting in the requirement for Cineworld to dispose of one cinema in each of Aberdeen, Bury St Edmunds and Cambridge. A decision has been made to dispose of the Picturehouse cinemas in Aberdeen and Bury St Edmunds. Cineworld will also dispose of one of the cinemas owned by the Cineworld Group in Cambridge and the decision as to which cinema will be sold will be made later in the year.

3.4 Other cinema expansion

One of the key strategic priorities of the Cineworld Group remains expansion. Cineworld continues to maintain the financial capability to pursue such opportunities aided by the cash generative nature of its business model.

Since the end of the 2013 Interim Period, Cineworld has opened a nine-screen cinema in Wembley and a new 10-screen cinema in Gloucester Quays to replace the existing six-screen cinema already in place. In October, Cineworld also reopened the IMAX screen at the Glasgow Science Centre as a Cineworld cinema. Unfortunately, due to delays in construction, the new six-screen cinema in St Neots will not now open until early 2014, with new cinemas in Swindon and Telford also scheduled to open during 2014. Picturehouse is scheduled to open a further three sites during 2014.

While the uncertainty over development financing and timing of new projects continues, Cineworld has seen improvements in confidence in the property market during the year with renewed interest in existing proposals as well as new plans and ideas being tabled. Cineworld's strong financial position and its good track record of driving high footfalls through its cinemas makes Cineworld an attractive partner for property developers. Cineworld has a number of further development sites signed or in legal negotiation and has a good pipeline of further opportunities to achieve its target of 169 new screens in the UK and Ireland within the next three years.

3.5 Initiatives and developments

At the end of the 2013 Interim Period, there were over 367,000 members in Cineworld's ''Unlimited'' Programme (2012: 308,000). Cineworld has continued to enjoy significant market share among the smaller, less mainstream films during the 2013 Interim Period to date.

The Cineworld Group introduced a number of CRM initiatives in line with its stated strategy. On 16 March 2012, Cineworld became the first major cinema operator in the UK to abolish online booking fees. Research showed the fee to be a barrier to booking in advance and it was unpopular with Cineworld's customers. Cineworld also launched a 10 per cent. reduction in the price of tickets for booking online through MyCineworld and membership has since increased to over 3.2 million members by the end of the 2013 Interim Period (2012: 1.9 million). The addition of new sites will facilitate the expansion of Cineworld's Unlimited and MyCineworld propositions into new locations, thereby growing and consolidating Cineworld's business further.

Activity on Cineworld's consumer website has continued to increase, with the 2013 Interim Period to date recording, on average, over a million visits per week. This performance has enabled the Cineworld website to remain in the top 30 most visited retail websites in the UK during the 2013 Interim Period (2012: top 40) (as reported in the IMRG Experian Hitwise Hot Shops List). In addition, Cineworld's successful mobile enabled web booking service is now complemented by mobile applications.

In terms of improving the customer experience, Cineworld is expanding the IMAX format across a selection of its sites following its successful introduction in 2011. The IMAX screens opened in the second half of 2012 have performed well during the 2013 Interim Period and Cineworld continues to operate nine IMAX screens successfully. As mentioned above, in October 2013, Cineworld reopened the IMAX screen at the Glasgow Science Centre where Cineworld offers a broad range of IMAX feature films as well as working closely with the Glasgow Science Centre to enhance their educational IMAX offering. Cineworld has also recently signed a new deal to open a further three IMAX screens, at least one of which is scheduled to be opened during 2014.

Cineworld's successful participation in Tesco's Clubcard loyalty programme continued during the 2013 Interim Period, despite no longer being their only cinema partner. Cineworld remains the exclusive gift card partner with Morrisons to date.

3.6 Factors affecting Cineworld's results of operations

Availability of appealing films. Cineworld's business depends on the availability of films for screening in its cinemas and the appeal of such films to its customers. Cineworld receives almost all of its revenue, directly or indirectly, from attendance of its cinemas, which Cineworld measures by one of its key performance indicators, admissions. Cineworld's box office revenue is driven by admissions, which depend on the number, timing and popularity of the films Cineworld is able to show in its cinemas. Admissions, in turn, drive the two other main revenue streams for Cineworld, the concessionary sales to Cineworld's box office customers, comprising principally food and drink for consumption within its cinemas, and revenue from advertisements shown on Cineworld's cinema screens prior to feature presentations.

Except for the revenue generated by Cineworld's subscription services, box office revenue is a function of the number of admissions and ticket price per admission, less VAT. The film slate, including the timing of film releases, in any given period affects Cineworld's ability to draw customers to its cinemas, and the unexpected emergence of a successful film, or the failure of an expected success, can lead to volatility in Cineworld's box office revenue over the course of the financial year. The future success of the Cineworld Group in the remainder of 2013 and throughout 2014 will principally remain dependent on the strength of the film releases throughout the year. Some of the volatility inherent in the slate of films historically has been smoothed by film studios through the release of successful film sequels. The Cineworld Directors believe that sequels and franchises will continue to contribute a significant number of the higher profile blockbuster films. The ''Harry Potter'' series has been replaced with ''The Hobbit'' trilogy. Similarly, ''The Twilight'' series has been followed by ''The Hunger Games'' as an alternative for the same female and teenage audience. Many such films outperform the original film or concept, so the film studios will continue to look to capitalise on proven successful formulae. The outstanding success of ''Iron Man 3'' and ''Thor: The Dark World'' will provide further impetus to advance the Marvel franchises, with films including ''X-Men: Days of Future Past'', ''Captain America: The Winter Soldier'' and ''Guardians of the Galaxy'' all scheduled for release during 2014.

The films available in any given period also affects box office revenue and average ticket prices through variations in the mix of different ticket types sold. Certain films tend to attract an adult audience that will purchase higher-priced adult tickets, whereas other films are intended for children or seniors, whose tickets are sold at a discount as compared with standard adult tickets. Certain films are also more likely to be shown in premium formats, such as 3D, which command higher prices per ticket.

Theatrical release window. Film distributors, while licensing a film to the film exhibition industry, have traditionally refrained from making the same film available through other film delivery methods for a certain period of time, a practice commonly referred to as the ''theatrical release window.'' Alternative distribution channels, such as video-on-demand and film rentals providers, are putting pressure on cinema exhibitors to reduce the time period between theatrical and secondary release dates, and certain distributors are talking about possible simultaneous or near simultaneous releases in multiple channels of distribution. If film distributors significantly reduce the duration of the theatrical release window, the appeal of viewing films in cinemas may be reduced, which may materially adversely affect Cineworld's business, financial condition and results of operations.

Distributors' share of box office receipts for exhibition of films. Cineworld's ability to retain a sufficient share of its box office collections for the films that it exhibits is one of the key drivers of its operating profit, as the fees payable to the film distributors represent a substantial portion of its cost of sales. Cineworld predominantly licenses ''first-run'' films from distributors owned by major film production companies and from independent distributors. The majority of mainstream and popular films are produced by a small number of studios in the United States.

Cineworld generally licenses films for exhibition by the payment of a percentage of the box office receipts which a film generates on any given screen. The percentage of the box office receipts is generally on a fixed tier basis and varies by distributor.

Distributors' share of films' revenue depends on the type of film, estimated box office takings, the length of time the film has been showing, the identity of the studio which has produced the film, considerations relevant to each distributor and other factors specific to each individual film. In the future, if distributors are able to demand a higher share of films' revenues, Cineworld would retain a smaller share of its box office takings, which would adversely affect Cineworld's operating profit.

Digital film and technological innovation. Technological innovation in the film exhibition industry has impacted both revenue and costs for Cineworld. All of Cineworld's cinemas have now been converted to digital projection. The operating flexibility of digital projection technology has enhanced the capacity utilisation capabilities of Cineworld. Digital film content can be easily moved to and from auditoriums in its cinemas to maximise admissions. Cineworld can also offer shorter lead times and improved advertisement targeting to its advertisers.

Technical innovation has also allowed Cineworld to enhance the consumer experience through premium formats such as IMAX, 3D and other large screen formats. The enhanced customer experience has, Cineworld believes, made its cinemas a more attractive entertainment option for its customers, thus contributing to admissions. It has also enabled Cineworld to achieve higher ticket prices for premium formats. Cineworld is also trialling 4D Motion technology in some of its cinemas which will allow Cineworld to charge premium prices for 4D tickets as a result of providing additional sensory experiences for customers.

It is anticipated that 2014 overall will see a slightly lower number of 3D films compared with 2013. The price differential between 3D and 2D films is expected to continue, and should help support the overall revenue levels. Films based on action, fantasy and animation and appealing to an older teenage and young adult audience, such as ''Marvel: Avengers Assemble'' and ''The Hobbit: An Unexpected Journey'', have had the highest take up of 3D, while those which appealed to younger children tend to attract a lower proportion of 3D business.

Customer retail spending. Retail spend per person is a performance indicator for Cineworld's revenue from the concessionary sales. Retail revenue is impacted by the types and length of films which Cineworld plays, the exhibition format and general economic conditions. Cineworld believes that its retail revenue further reflects the product mix, promotions, concessionary capacity of Cineworld's cinemas and the disposable income of its customers.

Macro political and economic conditions. Cineworld's business and results of operations are affected by changes in political and economic conditions in the markets in which it operates. Cineworld's customers may respond to adverse political or economic conditions by reducing amounts spent on entertainment, including attending films and purchasing concessions. Any reduction in consumer confidence or disposable income in general may affect the demand for films or severely impact the films production industry. In addition, Cineworld's concession revenue reflects retail spend per person, which in turn reflects the economic environment, with its customers being significantly more value conscious during difficult times.

The general economic and consumer environment is expected to remain uncertain for the foreseeable future and will continue to present trading challenges. Cineworld expects that the strong mid-week business enjoyed through ''Bargain Tuesdays'' and ''Orange Wednesdays'' promotions will continue and Cineworld is encouraged by the number of customers returning to weekend screenings.

Appeal of screen advertising. The attractiveness of cinema screen advertising, as well as the demand for advertising generally, drive Cineworld's revenue from DCM. Screen advertising revenue generally varies depending on the type of films screened, the minutes and value of advertising sold, the number of attendees who view the film, and the placement of the advertisement in relation to the start time of the film. Demand in the wider advertising industry is anticipated to remain challenging, which would be reflected in cinema screen advertising. However, full digital conversion by DCM's major exhibitor clients (Cineworld, Odeon UCI and Vue) in 2012 has improved DCM's competitive position and continues to support its objective of gaining a larger share of advertisers' budgets, especially local retail, which is a sector largely unexploited in cinema advertising.

Expansion and improvements. Customers choose to attend cinemas in part based on the state of their facilities and their locations. Cineworld maintains the quality of its offering by adding new screens, upgrades to seating concepts, expansion of food and drink offerings, and by disposing of older screens. In addition, part of Cineworld's strategy includes growth through further acquisitions and opening of new cinemas. Planning laws, economic environment, and the ability of developers to finance their projects where Cineworld may choose to locate its cinemas are some of the factors that may impact Cineworld's development and growth initiatives.

The acquisition of Picturehouse has provided a new and additional channel for expansion in the art-house market under the Picturehouse brand and the existing pipeline of new multiplex cinemas is also increasing.

Competition. Cineworld competes with other film exhibitors and a number of other film delivery methods, including DVDs, video-on-demand, pay-per-view services, satellite and downloads via the internet. Cineworld also competes for the public's leisure time and disposable income with other forms of entertainment, including sporting events, concerts, live theatre and restaurants.

Key attractions of going to the cinema remain the good value of cinema compared with other forms of entertainment and leisure and the desire for escapism. Cineworld also focuses on creating a pleasurable experience for its customers to encourage repeat visits.

Cineworld expects to continue to offer a highly compelling choice within the wider range of entertainment and leisure activities. Cineworld believes going to the cinema remains one of the best value forms of popular entertainment and will continue to attract audiences who seek quality film product, where the immersive viewing experience remains unmatched by any other media.

Capacity utilisation. Cineworld's operating profit depends on the optimisation of the use of its facilities. A large part of the Cineworld Group's expenses is fixed and does not vary with admissions or box office revenue. Maximising utilisation of Cineworld's facilities drives Cineworld's incremental revenue and profit. Cineworld's multiplex cinemas are designed with the intention of maximising profitability per square foot. Auditorium seating capacities vary within each multiplex cinema, allowing Cineworld to show films for a longer period on a cost-efficient basis by moving films to smaller auditoria as demand decreases over time. In addition, large multiplex cinemas provide significant operating efficiencies, enabling Cineworld to offset costs against higher operating revenue from non-film sources. For example, Cineworld designs its multiplex cinemas to have more concessions capacity to make it easier to serve larger numbers of customers and therefore to more efficiently leverage their additional capacity. The digital projection technology enables Cineworld to vary its programming and screen advertisements more frequently and with greater customisation.

Subscription programmes. Cineworld's and Picturehouse's subscription programmes help smooth out the level of seasonal fluctuation in Cineworld's revenue. They also encourage customers to come during off-peak periods as it is generally not possible to make advance bookings, thereby improving Cineworld's capacity utilisation. The subscription programmes also help support Cineworld's CRM initiatives to improve customer segmentation, customise customer offerings and drive future revenue.

3.7 Impact of the Combination

Assuming the Combination is completed, it will have a significant impact on reported results.

Synergies and integration. The Board estimates that, following the Combination, the Enlarged Group will be able to achieve annualised pre-tax cost synergies of £2.0 million from the benefits of eliminating duplicated corporate costs, public company expenses and functional overheads. The synergies identified reflect both beneficial elements and relevant costs, are contingent on Completion, and could not be achieved independently. The Board expects that the Enlarged Group will benefit from the majority of these synergies in the financial year ending in December 2014 and it is expected that the realisation of these synergies will incur negligible one-off cash costs.

Over the course of the 12-18 months following the Completion of the Combination, Cineworld will be integrating and merging its operations with those of Cinema City. Since Cineworld and Cinema City operate in distinct geographical markets, Cineworld expects most of the integration processes to involve changes to its supply chain, changes in its internal back-office processes, information technology systems and changes in its management. Cineworld intends to allocate internal resources to ensure success of the integration, but the temporary disruption and uncertainty may affect the performance of the business of Cineworld and Cinema City in the short-to-medium term.

Increase in size. Following the Combination, the Enlarged Group will have 1,852 screens at 201 sites in nine countries. Cineworld expects that should the Combination complete, the Enlarged Group's revenue will benefit from the addition of revenue from Cinema City's cinemas.

Foreign exchange exposure. Following the Combination, Cineworld will become subject to foreign exchange rates fluctuations, since a large portion of Cinema City's revenue, assets and liabilities are denominated in currencies other than Pounds Sterling, including the euro, US dollar, Israeli shekel, Polish złoty, Hungarian forint, Bulgarian lev, Romanian leu and Czech koruna. Cineworld and, following the Combination, the Enlarged Group, will continue to present its consolidated financial statements in Pounds Sterling, which is its presentation currency. Changes in exchange rates will affect the value of the reported earnings and the value of those assets and liabilities denominated in foreign currencies, and may also impact on operating expenses where such operating expenses are in a currency other than that in which financing is obtained or those in which revenue is generated.

3.8 Cineworld's cost of sales

Cineworld's cost of sales comprises film hire costs, concession supplies costs, wages, salaries and benefits, lease expenses and energy and property costs.

Film hire rates are generally negotiated with each distributor on a film-by-film basis and can be fixed or variable. Film hire costs that are variable in nature fluctuate with the Cineworld Group's box office revenue. Film hire costs as a percentage of revenue are generally higher for periods in which more blockbuster films are released. Film hire costs can also vary based on the length of a film's run. Concession supplies expense is variable in nature and fluctuates with Cineworld's concession revenue. Cineworld negotiates prices for concession supplies directly with concession vendors and manufacturers to obtain volume rates. Although salaries and wages include a fixed cost component (i.e. the minimum staffing costs to operate a theatre facility during non-peak periods), salaries and wages move in relation to revenues as theatre staffing typically is adjusted to respond to changes in attendance. Facility lease expense is primarily a fixed cost at the theatre level as most of Cineworld's facility leases require a fixed monthly minimum rent payment. Certain of the leases are subject to percentage rent only, while others are subject to percentage rent in addition to their fixed monthly rent if a target annual revenue level is achieved. Facility lease expense as a percentage of revenue is also affected by the number of theatres under operating leases and the number of theatres under capital leases. Utilities and other costs include certain costs that have both fixed and variable components such as utilities, taxes, janitorial costs, repairs and maintenance and security services.

3.9 Financial performance

				39 week period ended 27 September 2012
		39 week period ended 26 September 2013		Total
	Total Group	Picturehouse	Cineworld	Group(2)
	Total	Total	Total	Total
Admissions	39.3m	2.2m	37.0m	34.8m
	£m	£m	£m	£m
Box office	210.9	13.7	197.2	180.6
Retail	71.0	6.8	64.2	58.9
Other	21.8	6.1	15.7	13.4
Total revenue	303.7	26.6	277.1	252.9
EBITDA(1)	52.6	3.3	49.3	40.8
Operating profit	31.0			22.7
Financial income Net change in fair value of cash flow hedges	0.2			0.2
reclassified as equity	—			1.0
Financial expenses	(5.0)			(5.3)
Net financing costs	(4.8)			(4.1)
Share of loss from joint venture	(0.2)			(0.2)
Profit on ordinary activities before tax	26.0			18.4
Tax on profit on ordinary activities	(7.3)			(5.1)
Profit for the period attributable to equity holders of
the Company	18.7			13.3

(1) EBITDA is defined as operating profit before depreciation, impairments, reversals of impairments and amortisation, onerous lease and other non-recurring or non-cash property charges, transaction, pensions, refinancing and reorganisation costs.

(2) Picturehouse results consolidated for 22 days covering 6 December 2012 to 27 December 2012 and therefore not reflected in the 2012 comparative information

The following commentary on the profitability, cash flow and balance sheet focuses on the Cineworld Group including Picturehouse, except where stated.

(A) EBITDA and operating profit

Group EBITDA was up 28.9 per cent. for the 2013 Interim Period at £52.6 million (2012 Interim Period: £40.8 million) and was achieved through higher revenues. Gross profit margin has suffered a small reduction from the comparative prior year period. While the film hire rate has reduced, this has been more than offset by increased concession costs and higher royalties paid following the relative success of IMAX and 3D films during the period. In addition there were higher energy and property costs as well as general increases in other operating costs. Operating profit at £31.0 million was 36.6 per cent. higher (2012 Interim Period: £22.7 million), and 3.5 per cent. of this increase relates to the inclusion of Picturehouse in the current year.

Operating profit included a number of non-recurring and non-trade related costs. These were transaction and reorganisation costs which related to the Competition Commission investigation into the acquisition of Picturehouse and other restructuring costs during the period. As a result of the investigation, Cineworld will dispose of the Picturehouse cinemas in Aberdeen and Bury St Edmunds and will also dispose of one of the cinemas owned by the Cineworld Group in Cambridge. A goodwill impairment of £0.7 million has been recognised in respect of this divestment. An asset impairment review also resulted in £1.2 million asset write-downs at weaker performing cinemas.

The total depreciation and amortisation charge (included in administrative expenses) in the 2013 Interim Period of £18.0 million was higher than in the 2012 Interim Period (2012: £15.8 million). The increase includes £1.2 million of amortisation in respect of brand and customer list intangible assets recognised as part of the acquisition accounting for Picturehouse. The residual increase of £1 million has resulted from having a fully digitalised estate from the start of the period and an additional site.

(B) Finance costs

The net financing costs of £4.8 million were higher than the £4.1 million in the comparative period in the prior year. There has been an increased level of borrowing from the start of the 2013 Interim Period following the cash acquisition of Picturehouse in December 2012. The overall charge for the 2012 Interim Period also included £1.0 million credit on the expiry of one of three interest rate swaps in May 2012, which necessitated a reclassification of the closing derivative value from equity to the income statement. Of the £0.2 million financial income reported in the current period, £0.1 million related to interest receivable (2012: £0.1 million) and £0.1 million to the actuarial valuation of the returns on the defined benefit pension plan assets (2012: £0.1 million).

(C) Earnings

Overall profit on ordinary activities before tax in the 2013 Interim Period was £26.0 million, 41.3 per cent. higher than the 2012 Interim Period of £18.4 million (37.5 per cent. excluding Picturehouse). Basic diluted earnings per share amounted to 12.2p (2012 Interim Period: 9.2p). Taking account of the one-off, non trade related items described above, totalling £5.9 million and the credit of £1.0 million relating to the expiry of an interest rate swap (included in comparative period net financing costs), adjusted pro-forma diluted earnings per share were 16.0p (using a normalised tax rate of 23.25 per cent.) compared with the 2012 Interim Period of 11.1p. The weighted average number of shares in issue during the 2013 Interim Period was 149.8 million including 0.3 million shares issued during that period.

(D) Taxation

The overall tax charge during the period was £7.3 million giving an overall effective tax rate of 28.1 per cent. for the 2013 Interim Period (2012 Interim Period: 27.7 per cent.) which reflects the extent of one-off disallowable expenditure during the period.

(E) Cash flow and balance sheet

The Cineworld Group continued to be cash generative at the operating level. Total cash generated from operations in the 2013 Interim Period was £24.9 million compared to £26.0 million in the 2012 Interim Period. The current operating period suffered from a significant cash outflow at the start of the period in respect of film hire on ''Skyfall'', the cash inflow benefit for which occurred in the last month of 2012.

Net cash spent on capital during the 2013 Interim Period was £11.6 million. Included in this cash expenditure was £4.0 million in relation to the development of new sites, £5.1 million in respect of maintenance and £0.4 million on other revenue generating initiatives. Picturehouse incurred capital expenditure of £2.0 million during the 2013 Interim Period.

Net debt increased to £136.8 million at the end of the 2013 Interim Period (2012 Interim Period: £123.0 million). During the 2013 Interim Period the net movement on the Existing Facilities Agreement was a repayment of £5.5 million (repayment of £33.0 million and a draw-down of £27.5 million). This was offset by a £14.3 million cash outflow in respect of the timing of the rent payable at the end of the 2013 Interim Period.

Overall, net assets increased to £198.0 million (2012 Interim Period: £161.9 million). This includes the recognition of fair value of net assets acquired with Picturehouse totalling £23.9 million, and the residual goodwill recognised on acquisition of £19.8 million. Due to the timing of the acquisition and its close proximity to the year-end 2012, the fair value of acquired net assets and residual goodwill were recognised at December 2012 on a provisional basis. The acquisition accounting was finalised by June 2013 and reported in the Cineworld Group's interim statements. Goodwill arising on acquisition increased from £19.6 million as previously stated to £19.8 million following a small reduction in other intangibles recognised and a corresponding adjustment to deferred tax liabilities in respect of Picturehouse.

(F) Current trading and outlook

4. Capitalisation and indebtedness

The following table sets out the capitalisation of the Cineworld Group as at 26 September 2013. This statement of capitalisation has been extracted without material adjustment from the Cineworld Group's unaudited interim results for the 2013 Interim Period.(1)

	As at 26 September 2013
	(unaudited) £m
Shareholders' equity—Cineworld Group shareholders' equity as at 26 September 2013
Share capital	1.5
Share premium	188.2
Other reserves(2)	8.3
Total	198.0

Notes:

(2) Included in the ''Other reserves'' line item is ''net profit—Cineworld Group share'' of £18.7 million for the 2013 Interim Period and total retained earnings, as at 26 September 2013, of £9.10 million.

The following table sets out the indebtedness of the Cineworld Group as at 21 November 2013. This statement of indebtedness has been extracted without material adjustment from the Cineworld Group's unaudited management accounts:

	As at 21 November 2013
	(unaudited) £m
Total current financial debt
Guaranteed	(5.0)
Unguaranteed and unsecured (including financial leases)	(0.9)
Interest rate swaps	(1.1)
Total current financial debt	(7.0)
Total non-current financial debt (excluding current portion of long-term debt)
Guaranteed	(132.4)
Unguaranteed and unsecured (including financial leases)	(5.9)
Interest rate swaps	(1.2)
Total non-current financial debt	(139.5)
Total financial debt	(146.5)

⁽¹⁾ Since 26 September 2013, there has been no material change in the capitalisation of £198.0 million.

The following table sets out the net financial indebtedness of the Cineworld Group as at 21 November 2013. This statement of net financial indebtedness has been extracted without material adjustment from the Cineworld Group's unaudited management accounts.

		As at 21 November 2013
		(unaudited) £m
A. B.	Cash Cash equivalents	20.1 —
C.	Liquidity (A+B)	20.1
D. E. F.	Current bank debt Current portion of non current debt Current other financial debt	— (5.0) (0.9)
G	Current financial debt (D+E+F)	(5.9)
H.	Net current financial liquidity (C-G)	14.2
I. J.	Non-current bank debt Non-current other financial debt	(132.4) (5.9)
K.	Non-current financial debt (I+J)	(138.3)
L.	Net financial debt excluding impact of debt derivatives qualifying as hedges (H+K)	(124.1)
M.	Debt derivatives qualifying as hedges and other derivatives	(2.3)
N.	Net financial debt including impact of debt derivatives qualifying as hedges (L+M)	(126.4)

5. Liquidity and capital resources

The Cineworld Group meets its day to day working capital requirements through its bank facilities which consist of a five year facility of £187.5 million, comprised of a £87.5 million term loan, with repayments of £2.5 million every six months commencing in June 2011, and a £100 million revolving credit facility (the Existing Facilities Agreement). The term loan has been hedged in accordance with the terms of the Existing Facilities Agreement on a weighted average fixed rate of 4.6 per cent., while the revolving credit facility has a floating interest rate of LIBOR plus 1.95 per cent. The Existing Facilities Agreement is due to expire in April 2016.

As at the date of this document, £85.0 million remained outstanding under the term loan and £43.5 million had been drawn down under the revolving credit facility.

The Existing Facilities Agreement is unsecured and is subject to two covenants: (i) the ratio of EBITDA to net debt; and (ii) the ratio of pre-rent EBITDA to net finance charges. The Cineworld Group operated within its banking covenants during FY 2012 and the 2013 Interim Period.

There is no other indirect or contingent indebtedness within the Cineworld Group as at the date of this document.

The Existing Facilities Agreement described above will be refinanced pursuant to the terms of the Combination. Summary details of the Debt Financing are set out in Section 6.1(d) of Part XIII (Additional Information).

6. Changes in accounting policies

The Cineworld Group's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The accounting policies for the Cineworld Group are described at pages 57 to 64 of the Company's Annual Report for FY 2012, which has been incorporated by reference into this document. These accounting policies applied, with the exception of the following change in accounting policy, during the 2013 Interim Period and 2012 Interim Period covered by this operating and financial review.

Amendments to IAS 19 Employee Benefits

The Cineworld Group has adopted the amendments to IAS 19 Employee Benefits during the 2013 Interim Period which has been applied retrospectively and has resulted in the restatement of some of the comparative information.

Under the revised IAS 19, the Cineworld Group determines the net interest income for the relevant period on the net defined benefit asset by applying the discount rate used to measure the defined benefit obligation at the beginning of the period to the net defined benefit asset at the end of the period, taking into account any changes in the net defined benefit asset during the period as a result of contributions and payments. Consequently, the net interest income on the net defined benefit asset now comprises: interest on the defined benefit obligation and interest income on plan assets.

Previously, the Cineworld Group determined interest income on plan assets based on their long-term rate of expected return.

Pension administrative expenses previously netted off against the return on defined benefit pension plan assets have been reclassified to administrative expenses.

PART VII

OPERATING AND FINANCIAL REVIEW OF THE CINEMA CITY BUSINESS

1. Description of Cinema City

The Cinema City Business is one of the largest in Europe and operates 99 multiplexes, with a total of 966 screens across Poland, Israel, Hungary, the Czech Republic, Romania, Bulgaria and Slovakia. In Israel, Cinema City operates under the Yes Planet and Rav-Chen brands, and in CEE, it operates cinemas under the Cinema City brand.

Cinema operations are the core segment of Cinema City, and are comprised of box office sales, retail sales of food and drink through concession stands, and on- and off-screen advertising.

New Age Media, the Cinema City Business's advertising and sponsorship arm, offers on- and off-screen advertising in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria and Romania. Cinema City's Israeli advertising arm operates under the Cinema Channel brand.

Film distribution complements Cinema City's primary cinema and associated retail and advertising activities, and supports its revenue growth. Cinema City engages in film distribution through its Forum Film brand in all its countries of operation.

2. Performance overview

2.1 Number of admissions

		For the year ended 31 Dec		For the nine months ended 30 September
	2010	2011	2012	2012	2013
			All figures in 000s
Admissions:
Poland	15,005	14,883	13,493	9,697	8,726
Hungary	4,703	6,636	7,022	4,997	5,232
Israel	4,506	3,840	4,619	3,236	4,151
Bulgaria	1,361	1,574	1,711	1,257	1,401
Slovakia	—	1,196	1,196	863	833
Romania	3,091	3,725	4,367	3,042	3,648
Czech Republic	1,848	3,600	3,934	2,790	2,592
Total	30,514	35,454	36,342	25,882	26,583

In 2012, Cinema City sold 36.3 million tickets, 2.5 per cent. higher than in 2011. Growth was driven by increased admissions in Hungary, Romania, Israel, the Czech Republic and Bulgaria, which offset flat admissions in Slovakia and reduced admissions in Poland. Reduced Polish film production in 2012 as compared with 2011, together with competition from newly opened cinemas and the digitalisation of smaller cinemas, led to reduced ticket sales. Overall admission levels in 2012 were positively impacted by the cinemas opened throughout 2011 and 2012, especially through the contribution of the 24-screen Yes Planet in Rishon LeZion in Israel, which was opened in July 2012. In 2011, Cinema City sold 35.5 million tickets, 16.2 per cent. more than in 2010. The growth in admissions was driven by new openings and the acquisition of Palace Cinemas in Hungary, the Czech Republic and Slovakia.

During the 2013 Interim Period, Cinema City sold 26.6 million tickets, which was 2.7 per cent. higher than the comparative period in 2012. Growth across territories varied, with increased volumes in Israel, Romania, Hungary and Bulgaria, stable attendance in Slovakia and lower admissions in Poland and the Czech Republic.

2.2 Number of screens at the end of the period

	For the year ended 31 December			For the nine months ended 30 September
	2010	2011	2012	2012	2013
Screens:
Poland	331	339	339	339	339
Hungary	115	176	176	176	176
Israel	101	96	112	112	104
Bulgaria	41	41	51	51	65
Slovakia	—	29	29	29	29
Romania .	88	114	134	122	142
Czech Republic .	46	111	111	111	111
Total	722	906	952	940	966

At the end of FY 2012, Cinema City had 98 multiplexes with 952 screens (5.1 per cent. more than in 2011). This increase was the result of organic growth, which led to the opening of five new cinemas with a total of 62 screens.

Cinema City experienced significant growth between 2010 and 2011 due to the acquisition of Palace Cinemas, which comprised of 15 multiplexes with 141 screens.

As of 30 September 2013, Cinema City had 99 multiplexes with 966 screens (2.76 per cent. more than in 30 September 2012). This increase was due to organic growth, which led to the opening of three new cinemas with a total of 34 screens and the closure of one cinema with eight screens.

2.3 Average price of ticket

''Average ticket price'' is calculated as the box office revenue divided by the number of admissions. It is an important indicator for exhibitors and the cinema operators.

	For the year ended 31 December			For the nine months ended 30 September
	2010	2011	2012	2012	2013
ATP (E):
Poland	4.73	4.58	4.59	4.62	4.67
Hungary	3.56	3.70	3.71	3.73	3.78
Israel	6.45	6.23	6.21	6.25	6.20
Bulgaria	3.69	3.49	3.79	3.78	3.82
Slovakia	—	4.68	4.96	4.95	5.03
Romania	3.56	3.56	3.53	3.54	3.61
Czech Republic	5.36	5.39	5.37	5.43	5.06
Average	4.68	4.53	4.56	4.58	4.59

In 2012, the average ticket price across the entire Cinema City Business increased by 0.8 per cent. from 2011 to EUR 4.56.

In the 2013 Interim Period, the average ticket price across the entire Cinema City Business was EUR 4.59, an increase of 0.2 per cent. compared with the comparative period in 2012.

Fluctuations in the average ticket price are driven by a number of factors, including the number of premium admissions (e.g. 3D, 4DX), exchange rate fluctuations, visitor structure and pricing policy.

2.4 Revenue per country

	For the year ended 31 December			For the nine months ended 30 September
	2010	2011	2012	2012	2013
(E)
Poland	119.6	115.5	109.5	77.0	72.3
Hungary	25.8	38.7	41.5	28.9	32.6
Israel	49.2	46.7	54.1	37.6	48.4
Bulgaria	7.0	9.1	10.4	7.4	8.7
Romania	18.8	21.9	25.6	17.5	21.5
Czech Republic	14.1	26.8	30.0	20.8	18.9
Slovakia	—	8.8	9.6	6.8	6.6
Total	234.5	267.5	280.7	196.0	209.0

In 2012, revenue per country increased in most of the countries in which Cinema City operates, resulting in an increase in total revenue of 4.9 per cent. from 2011 to EUR 280.7 million.

In the 2013 Interim Period, revenue per country increased in most of the countries in which Cinema City operates, resulting in an increase in total revenues of 6.6 per cent. from the 2012 Interim Period to EUR 209.0 million.

2.5 Revenue per head

Revenue per head is calculated as concession revenue divided by the number of admissions.

	For the year ended 31 December			For the nine months ended 30 September
	2010	2011	2012	2012	2013
RPH (E):
Poland	1.31	1.28	1.33	1.34	1.40
Hungary	1.41	1.52	1.55	1.52	1.65
Israel	2.14	2.21	2.32	2.28	2.53
Bulgaria	0.96	0.99	1.07	1.05	1.17
Slovakia	—	1.62	1.57	1.56	1.68
Romania	1.66	1.71	1.64	1.63	1.67
Czech Republic	1.26	1.33	1.34	1.32	1.41
Average	1.47	1.47	1.53	1.52	1.66

In 2012, concession revenue per head grew by four per cent. to EUR 1.53, rising in most of the countries in which Cinema City operates, with the greatest increase in Bulgaria (7.7 per cent.), Israel (5.3 per cent.) and Poland (4.4 per cent.). This increase was driven by an increased variety of products for sale at the concession stands. In 2011, revenue per head was generally stable, although some growth was seen in all the countries in which Cinema City operates except Poland.

During the 2013 Interim Period, revenue per head increased by 9.4 per cent. compared with the comparative period in 2012, rising in all the countries in which Cinema City operates, with the greatest increases in Israel (11.3 per cent.) and Bulgaria (11.2 per cent.). This increase was driven by an increased variety of products for sale at the concession stands.

3. Key trends and factors potentially affecting the future

Cinema City generates revenue from its cinema operations (including box office receipts, concessions and on- and off-screen advertising) and film distribution activities. Cinema City's revenues from cinema operations are primarily affected by changes in film attendance, average ticket price and concession sales per customer, which in turn are determined by a variety of factors.

Advertising revenues are generated from on- and off-screen advertising and sponsorship sales. On-screen advertising rates are fixed at either a cinema or country level and are typically charged either on a per period or on a per customer basis. Off-screen advertising sales are generated by the provision of promotional facilities and are negotiated on a case-by-case basis. Sponsorship sales are generated from agreements under which Cinema City allows the sponsor to associate its name with a cinema, an element of a cinema or a product offered at a cinema.

Cinema City also generates revenues from film distribution. Cinema City licenses films to cinemas and typically receives revenue based upon a gross receipts formula, which is negotiated on a film-by-film basis in advance of distribution. The fees are generally related to the anticipated performance of the film. In addition, Cinema City receives revenue from the distribution of films to television, the fees for which are negotiated on the basis of the period for which the film is screened.

Cinema City's principal expenses consist of operating costs and general and administrative expenses. Cinema City's operating costs consist of costs associated with cinema operations (such as film rental, concession supplies, salaries and wages, and leases), film distribution (such as revenue sharing arrangements) and depreciation and amortisation expenses allocated to each business segment.

Availability of appealing films. The line-up of films for screening in its cinemas is a key factor which affects Cinema City's business. Cinema City receives approximately 91 per cent. of its revenue, directly or indirectly, from attendance at its cinemas, which Cinema City measures by one of its key performance indicators, admissions.

In 2014, attendance will remain dependent on the commercial appeal of the films released and, to a certain extent, on seasonal fluctuations, the weather and competing attractions, such as major sports events. Cinema City expects upcoming sequels including ''The Hobbit: The Desolation of Smaug'' to continue to contribute to the number of international blockbuster films which serve to attract large audiences.

The pipeline of films in a given period also affects box office revenue and average ticket prices through changes in the composition of tickets sold. Films which attract adult audiences and films which are shown in premium formats, such as 3D, tend to result in higher prices per ticket.

Demand for watching films at the cinemas. Cinema City competes with alternative distribution channels, such as network, rental, cable and satellite television (2D and 3D), DVDs and Blu-Ray, video-on-demand, pay-per-view services, streaming and downloads via the internet. Traditionally, motion picture distributors have delayed licensing their motion pictures to these other delivery vehicles during the cinema release window. A material reduction in or elimination of the current release window could dilute the consumer appeal of the in-cinema film offering, which could have a material effect on Cinema City's business and results of operations.

The cinema industry is in the process of converting to digital 3D technology and Cinema City has embraced this technological revolution in its countries of operation. Cinema City believes that this revolution and the showing of 3D films could increase the appeal of cinemas relative to alternative distribution channels, particularly as a home 3D market is still in its infancy.

Competition. While the multiplex screen density in Cinema City's countries of operation in CEE, in comparison to Western Europe, remains relatively low, and while it is Cinema City's strategy to build modern multiplexes to service these under-screened territories, this low density could also be equally inviting to competitors who desire to compete in a territory with relatively low barriers of entry.

In order to achieve a 'first mover advantage' in its territories of operation, Cinema City has focused on developing technologically advanced multi-screen complexes in strategically selected locations. Even as the cinema market matures in Cinema City's territories of operation, opportunities for further growth and development in these markets are likely to be available to Cinema City

Macro, political and economic conditions. Cinema City's business and results of operations are affected by changes in political and economic conditions within the countries in which it operates. Cinema City could be materially impacted if adverse political or economic conditions lead to a reduction in entertainment, advertising and concession spends. Historically, during periods of economic difficulty, consumers have typically tended to spend more on film-going as a relatively inexpensive form of entertainment, which has resulted in strong admissions for Cinema City.

Pricing. Cinema City seeks to maximise its revenue through the use of dynamic pricing, which is intended to optimise the relationship between average ticket prices and total admissions, thereby maintaining operating margins. During lower admissions periods, such as mid-week or early in the day, Cinema City offers flexible ticket prices to reach audiences who would like to attend in that period. Ticket prices vary by cinema, location and other variables, including time of day, day of week and type of customer for each film. Box office represents the largest cost category for Cinema City. Most films are typically licensed from film distributors representing film distribution companies. Film exhibition licenses typically specify rental fees based on a gross receipts formula which is negotiated on a film-by-film basis in advance of distribution. The fees are generally related to the anticipated performance of the film based on the distributor's experience in other territories, if possible. Under a formula such as this, the distributor receives a specified percentage of box office receipts, with the percentage declining over the term of the run.

Virtual Printing Fees.

While Cineworld collects VPFs through an intermediary, Cinema City has direct VPF arrangements with six major film distributors. VPFs are paid by the film studios to cinema operators as an inducement to encourage cinema operators to deploy approved digital systems in their cinemas. The film studios benefit from considerable cost savings from the on-going use of digital systems by cinema operators due to the significantly lower cost of distributing films in digital format rather than in (non-digital) 35mm format.

Employees. The majority of Cinema City's employees are employed in the operations of the various cinemas. The number of employees fluctuates due to the seasonal nature of the cinema business. In Poland, Cinema City employs most of its part-time employees through a wholly-owned subsidiary of Cinema City Holding, All Job (Poland), which enables Cinema City to optimise operational flexibility.

No employees of Cinema City are members of unions in any of the countries of operation except in Israel, where Cinema City, along with other cinema operators in Israel, has entered into a general collective agreement with the Cinema Industry Trade Union. Cinema City considers that it has good relations with its employees and the Cinema Industry Trade Union. Furthermore, Cinema City has not experienced any material disruptions to its operations arising from labour disputes with its employees in FY 2010, FY 2011, FY 2012 or in the 2013 Interim Period.

In September 2013, Cinema City employed over 4,000 people with approximately 550 of Cinema City's employees working full-time, with the rest working part-time. This allows Cinema City to operate a flexible work force that caters for the variances in attendances that are typical for the cinema exhibition industry.

4. Financial review of consolidated results of operations

4.1 Review of operating performance and financial review of consolidated results of operations — 2013 Interim Period against 2012 Interim Period

Overview

In the 2013 Interim Period, Cinema City sold 26.6 million tickets across its seven countries of operation, (this represented an increase of 2.7 per cent. from the comparative period in 2012). Admissions on a same-cinema basis decreased by 3.0 per cent. to 25.1 million tickets. Ticket prices in local currencies increased, while ticket prices in euro remained stable in almost all of Cinema City's territories of operations.

Revenue

Total revenues increased by 6.6 per cent. from EUR 196.0 million for the 2012 Interim Period to EUR 209.0 million for the 2013 Interim Period. Cinema operating revenues increased by 7.0 per cent. from EUR 181.1 million during the 2012 Interim Period to EUR 193.7 million during the 2013 Interim Period. This increase was mainly due to two factors: (1) the increase in cinema admissions; and (2) the increase in the average concession revenue per visitor (in euro and in local currencies) in all of Cinema City's countries of operation.

Distribution operating revenues increased by 2.4 per cent. from EUR 14.9 million for the 2012 Interim Period to EUR 15.3 million for the 2013 Interim Period. The increase was primarily due to the increase in the distribution activities in most of Cinema City's territories of operations.

Costs

Operating costs, excluding depreciation and amortisation, increased by 5.6 per cent., from EUR 143.8 million for the 2012 Interim Period to EUR 151.9 million for the 2013 Interim Period. This net increase was largely due to the effect of an increase in cinema operating expenses, which were primarily explained by the increase in the revenue generated from cinema operations.

General and administrative expenses decreased by 1.3 per cent., from EUR 10.4 million for the 2012 Interim Period, to EUR 10.3 million for the 2013 Interim Period. The decrease in general and administrative expenses was due to changes in foreign exchange rates (for example, an appreciation in the euro as against both the Czech crown and the Hungarian forint).

Depreciation and amortisation expenses increased by 1.6 per cent., from EUR 22.5 million for the 2012 Interim Period to EUR 22.8 million for the 2013 Interim Period. The increase was mainly due to higher depreciation as a result of the newly opened cinemas in 2012, primarily in Israel and Romania.

EBITDA

As a result of the factors described above, EBITDA increased by 12.0 per cent., from EUR 41.8 million for the 2012 Interim Period to EUR 46.8 million for the 2013 Interim Period.

Operating profit

For the 2013 Interim Period, operating profit increased by 24.0 per cent., from EUR 19.4 million for the 2012 Interim Period, to EUR 24.0 million. This increase was as a result of the factors described above, partially offset by an increase in depreciation and amortisation mainly due to the newly opened theatres in 2012, primarily in Israel and Romania.

Net Income

For the 2013 Interim Period, net income increased by 5.8 per cent., from EUR 15.7 million in the 2012 Interim Period, to EUR 16.6 million. This increase was as a result of the factors described above, partly offset by an increase in net finance expenses due to an increase in net debt.

Capital expenditures

Cinema City's capital expenditures aggregated to a net investment of EUR 17.6 million and EUR 62.7 million for the 2013 Interim Period and 2012 Interim Period, respectively. The net investment in the 2012 Interim Period relates to the construction of the Yes Planet megaplex in Rishon LeZion in Israel, as well as an investment in distribution rights and a loan granted to a related party.

Net Debt

Cinema City's net debt as of 30 September 2013 was EUR 75.1 million (net of a loan granted to related parties of EUR 117.9 million), compared with EUR 88.8 million (net of a loan granted to related parties of EUR 16.7 million) as of 30 September 2012. The net debt to EBITDA ratio (annualised in the 2013 Interim Period and the 2012 Interim Period) decreased from 2.1 in the 2012 Interim Period to 1.6 in the 2013 Interim Period. The decrease in the net debt to EBITDA ratio was primarily due to the repayment of part of the loans outstanding, which was financed from cash generated from operating activities.

4.2 Review of operating performance and financial review of consolidated results of operations — full year ended 31 December 2012 against full year ended 31 December 2011

In FY 2012, Cinema City sold a record number of tickets (36.3 million tickets; 2.5 per cent. more than in FY 2011). Tickets sold for 3D films accounted for 27.1 per cent. of all admissions sold by Cinema City in FY 2012.

The average ticket price was EUR 4.56 (0.8 per cent. higher than in FY 2011). Average ticket prices expressed in local currencies rose in all countries in which Cinema City operates, except for Israel where it dropped by 0.8 per cent. below FY 2011 prices.

Revenue

Cinema City's total revenues increased by 4.9 per cent., from EUR 267.5 million in FY 2011, to EUR 280.7 million in FY 2012. Revenues expressed in EUR and in local currencies increased in all countries except Poland, where revenues were impacted by a weaker pipeline of Polish films.

Revenues from cinema operations increased by 4.1 per cent., from EUR 245.7 million in FY 2011, to EUR 255.7 million in FY 2012. This increase was caused by a rise in cinema admissions and average ticket prices.

Film distribution revenues increased by 14.5 per cent., from EUR 21.8 million in FY 2011, to EUR 24.9 million in FY 2012. The strong results in the distribution segment were due to the large variety of films distributed by Cinema City, including big international feature films such as ''The Hobbit: An Unexpected Journey'' and ''Skyfall''. The distribution of independent films such as ''The Hunger Games'', ''The Artist'' and ''Hope Springs'' also contributed towards the strong performance of this segment.

Costs

Operating costs, excluding depreciation and amortisation, increased by 2.9 per cent. from EUR 200.2 million in FY 2011 to EUR 206.1 million in FY 2012. The increase in expenses was largely explained by an expansion in Cinema City's cinema operations. The increased expenses were partly offset by the reorganisation of Palace Cinemas which was carried out in 2011, the digitalisation process that Cinema City completed during the first half of 2012 and the contribution of EUR 1.2 million which Cinema City received as a settlement for its claim under an insurance policy for costs incurred relating to the purchase of Palace Cinemas.

Depreciation and amortisation expenses increased by 20.2 per cent., from EUR 25.4 million in FY 2011, to EUR 30.6 million in FY 2012. The increase in depreciation was due to newly opened cinemas in 2012 and the new digital projectors acquired during 2011 and the first half of 2012.

General and administrative costs increased by 4.1 per cent., from EUR 13.8 million in FY 2011, to EUR 14.3 million in FY 2012, as a result of an overall expansion in Cinema City's operations.

EBITDA

In FY 2012, in line with the revenue and costs described above, EBITDA increased by 12.7 per cent. from EUR 53.4 million in FY 2011 (excluding acquisition-related costs and reorganisation costs in the amount of EUR 3.3 million), to EUR 60.2 million in FY 2012.

Operating profit

In FY 2012, operating profit increased by 5.9 per cent. from EUR 28.0 million in FY 2011, to EUR 29.7 million (excluding acquisition-related costs and reorganisational costs in the amount of EUR 3.3 million). This was as a result of the factors described above, partially offset by an increase in depreciation and amortisation, mainly due to the opening of new cinemas.

Net Income

In FY 2012, net income decreased by 4.0 per cent. from EUR 24.7 million in FY 2011 to EUR 23.7 million (excluding acquisition-related costs and reorganisational costs in the amount of EUR 3.3 million). This decrease was as a result of the factors described above, as well as tax benefits in Poland in 2011 as a result of the reorganisation of the Polish businesses, which were not received in 2012. The decrease was partially offset by an increase in finance expenses due to an increase in net debt.

Capital expenditures

Cinema City's capital expenditures aggregated to a net investment of EUR 70.1 million and EUR 75.2 million in 2012 and 2011, respectively (including the acquisition of Palace Cinemas). The 2011 net investment figure of EUR 75.2 million includes an EUR 18.4 million net cash consideration for the Palace Cinemas acquisition, as well as EUR 10.1 million relating to the construction of the Planet megaplex cinema in Rishon LeZion in Israel.

Net Debt

Cinema City's net debt in FY 2012 was EUR 87.8 million (net of loans granted to related parties of EUR 112.5 million), as compared with EUR 57.5 million in FY 2011, leading to an increase in the net debt to EBITDA ratio from 1.1x in FY 2011 to 1.5x in FY 2012. The increase in the net debt and EBITDA ratio was due to the new club financing agreement which was used by the Cinema City Holding Group to finance the loan granted to Cinema City Real Estate B.V (CCRE), to refinance other Existing Cinema City Group credit facilities and for other general corporate purposes.

4.3 Review of operating performance and financial review of consolidated results of operations—full year ended 31 December 2011 against full year ended 31 December 2010

In FY 2011, Cinema City sold 35.5 million tickets (16.2 per cent. more than FY 2010). Tickets sold for 3D films accounted for 28.9 per cent. of all admissions in FY 2011.

The average ticket price was EUR 4.53 (3.2 per cent. lower than in 2010). Average ticket prices (in local currencies) decreased in Israel, Bulgaria and the Czech Republic by 1.9 per cent., 3.5 per cent. and 2.1 per cent., respectively, due to exchange rate fluctuations. In other countries, the average ticket prices (in local currencies) increased above their 2010 levels.

Revenue

In FY 2011, Cinema City's total revenues increased by 14.0 per cent., from EUR 234.5 million in FY 2010, to EUR 267.5 million in FY 2011.

Cinema operating revenues increased by 12.9 per cent., from EUR 217.6 million in FY 2010, to EUR 245.7 million in FY 2011. Concession revenues rose by 16.9 per cent. to EUR 52.2 million in FY 2011. The increase in cinema operating revenues was mainly due to the contribution of the Palace Cinemas chain and new cinemas opened during 2010 and 2011 in Bulgaria and Romania. This increase was partly offset by the fact that in 2011 there were no 3D blockbusters comparable with ''Avatar'' and ''Alice in Wonderland'', which significantly impacted the operating revenues during 2010.

Film distribution revenues increased by 28.1 per cent. from EUR 17.0 million in FY 2010 to EUR 21.8 million in FY 2011. The increase was largely due to the development of Cinema City's distribution activities.

Costs

Operating costs, excluding depreciation and amortisation, increased by 18.7 per cent., from EUR 168.7 million in FY 2010, to EUR 200.2 million in FY 2011. The increase is mainly due to more revenue being generated in the cinema operations as a result of the acquisition of Palace Cinemas and new cinemas opened during 2010 and 2011.

Depreciation and amortisation expenses increased by 27.9 per cent., from EUR 19.9 million in FY 2010, to EUR 25.4 million in FY 2011. The increase in depreciation was due to the opening of new cinemas in FY 2011 and FY 2010, the acquisition of Palace Cinemas and the equipment associated with the intensive digitalisation programme for Cinema City's cinema systems.

General and administrative costs increased by 8.7 per cent., from EUR 12.7 million in FY 2010, to EUR 13.8 million in FY 2011. The increased general and administrative expenses were due to the overall expansion of Cinema City's operations and are mainly offset by the decrease in Cinema City Holding Group's management bonus accrual.

EBITDA

In FY 2011, as a result of the revenue and costs above, EBITDA increased by 0.5 per cent., from EUR 53.2 million in FY 2010, to EUR 53.4 million in FY 2011 (excluding acquisition-related costs and reorganisation costs in the amount of EUR 3.3 million).

Operating profit

Operating profit decreased by 15.9 per cent., from EUR 33.3 million in FY 2010, to EUR 28.0 million in FY 2011 (excluding acquisition-related costs and reorganisation costs in the amount of EUR 3.3 million). This was as a result of the factors described above, an increase in depreciation as a result of the acquisition of Palace Cinemas, more new cinemas opened in 2011 and an increase in amortisation of intangible assets following the purchase of distribution rights during 2011.

Net Income

Cinema City's net income decreased by 8.7 per cent. from EUR 27.0 million in FY 2010 to EUR 24.7 million in FY 2011 (excluding acquisition-related costs and reorganisation costs in the amount of EUR 3.3 million). This was as a result of the factors described above.

Capital expenditure

In FY 2011, Cinema City spent EUR 75.2 million (including acquisition of subsidiaries and net of proceeds) on investments in new cinemas, on technology for digitalisation and on the construction of the Yes Planet megaplex cinema in Rishon LeZion.

EUR 54.4 million of the total investment in FY 2011 was used for the development of Cinema City's cinema operations, including the opening of four multiplexes, the financing of the second stage of construction of the Yes Planet megaplex in Rishon LeZion and the digitalisation of the remainder of Cinema City's screens.

In FY 2011, Cinema City opened four cinemas with a total of 34 screens in Romania and Poland. Cinema City opened 3 cinemas in Romania: Braila (10 screens), Arad (eight screens) and Turgu Mures (eight screens). One cinema was opened in Poland—Torun (eight screens). ´

Net Debt

The level of net debt for FY 2011 was EUR 57.5 million, as compared with EUR 20.7 million for FY 2010, leading to an increase in net debt to EBITDA ratio from 0.4x in FY 2010 to 1.1x in FY 2011. The increase was mainly due to an increase in bank debt as a result of the Palace Cinemas acquisition.

5. Capitalisation and Indebtedness

The following table sets out the unaudited consolidated capitalisation of the Cinema City Holding Group as at 30 September 2013.(1)

	As at 30 September 2013
	(unaudited) EUR M
Shareholders' equity—Cinema City Holding Group shareholders' equity as of 30 September
2013
Share and Share premium	63.5
Accumulated currency translation adjustments	(7.6)
Hedge reserve	(0.2)
Retained earnings	180.6
Total	236.3

Note:

⁽¹⁾ Since 30 September 2013, there has been no material change in the capitalisation of EUR 236.3 million.

The following table sets out the unaudited consolidated indebtedness of the Cinema City Holding Group as at 1 November 2013.

	As at 1 November 2013
	(unaudited) EUR M
Current financial debt
Guaranteed and/or secured	13.8
Unguaranteed and unsecured (including financial leases)	—
Non-current financial debt (excluding current portion of long-term debt)
Guaranteed and/or Secured	198.2
Unguaranteed and unsecured (including financial leases)	—
Net financial indebtedness as at 30 September 2013
A. Cash	17.4
B. Cash equivalents	0.2
C. Financial assets at fair value through income	—
D. Liquidity (A+B+C)	17.6
E. Current portion of financial receivables F. Current bank debt	— —
G. Current portion of non current debt	13.8
H. Current other financial debt	—
I. Current financial debt (F+G+H)	13.8
J. Net current financial debt (I-E-D)	(3.8)
K. Non-current bank debt	198.2
L. Bonds issued	—
M. Long term loan to related parties N. Non-current financial debt (K+L-M)	118.2 80.0
O. Net financial debt excluding impact of debt derivatives qualifying as hedges (J+N) . .	76.2
P. Debt derivatives qualifying as hedges and other derivatives	—
Q. Net financial debt including impact of debt derivatives qualifying as hedges (O+P) . .	76.2

6. Cash Flow Analysis

For the 2013 Interim Period, Cinema City generated net cash from operations of EUR 38.7 million (2012 Interim Period: EUR 36.0 million). The difference between Cinema City's net income and cash flow from operating activities is principally due to depreciation and amortisation expenses of EUR 22.8 million and EUR 22.5 million in the 2013 Interim Period and the 2012 Interim Period, respectively, partially offset by changes in working capital and net of interest expenses.

Cinema City ended the 2013 Interim Period with cash of EUR 18.5 million (2012 Interim Period: EUR 8.0 million).

Short-term borrowings for the 2013 Interim Period were EUR 13.8 million and long-term debt was EUR 197.7 million, resulting in a net debt of EUR 75.1 million (net of loans granted to related parties of EUR 117.9 million (30 September 2012: net debt was EUR 88.8 million).

Cinema City ended FY 2012 with cash of EUR 24.3 million (FY 2011: EUR 9.3 million). Cinema City funds its day-to-day operations principally from the cash flow provided by its operating activities.

In FY 2012, Cinema City generated net cash from operations of EUR 66.1 million (FY 2011: EUR 45.0 million). The difference between Cinema City's net income and cash flow from operating activities (excluding the changes in working capital) was principally due to depreciation and amortisation expenses of EUR 30.6 million and EUR 25.4 million in FY 2012 and FY 2011, respectively.

The cash inflows of EUR 17.6 million (2011: EUR 28.9 million) in respect of financing activities in 2012 were mostly due to proceeds from new long-term loans assumed of approximately EUR 148 million and only partly offset by repayments of long-term loans of EUR 87 million, a net decrease in short-term bank credits of EUR 17.8 million and a payment made to shareholders of EUR 17.8 million as a capital distribution.

The cash flows used of EUR 69.3 million in respect of investing activities in 2012 (2011: EUR 74.4 million) were mainly due to investments in property and equipment (new cinemas) of EUR 61.9 million and investment in new distribution rights of EUR 8.3 million. The 2011 net investment included the net cash consideration of the Palace Cinemas acquisition of EUR 18.4 million as well as EUR 10.1 million due to the Rishon LeZion construction in Israel.

Cinema City ended FY 2011 with cash of EUR 9.3 million (2010: EUR 10.5 million). In 2011, Cinema City generated net cash from operations of EUR 45.0 million (2010: EUR 57.1 million). Short-term borrowings were EUR 30.3 million and long-term debt was EUR 36.5 million, resulting in a net debt of EUR 57.5 million (2010: net debt: EUR 20.7 million).

In 2012, Cinema City generated net cash from operations of EUR 66.1 million (31 December 2011: EUR 45.0 million).

Cinema City ended 2012 with cash of EUR 24.3 million (2011: EUR 9.3 million). Short-term borrowings were EUR 20.5 million and long-term debt was EUR 204.1 million, resulting in a net debt of EUR 87.8 million (net of loans granted to related parties of EUR 112.5 million) (2011: EUR 57.5 million).

In 2011, Cinema City generated net cash from operations of EUR 45.0 million (2010: EUR 57.1 million).

Cinema City ended FY 2011 with cash of EUR 9.3 million (31 December 2010: EUR 10.5 million). Short-term borrowings were EUR 30.3 million and long-term debt was EUR 36.5 million, resulting in a net debt of EUR 57.5 million (31 December 2010: net debt: EUR 20.7 million).

7. Capital resources and liquidity

Cinema City's principal sources of liquidity to finance its operations are through cash generated from operating cash flows and by debt borrowings as described above.

The Cinema City Holding Group conducts most of its cinemas and corporate operations in leased premises. Many leases have renewal options. Most of the leases provide for contingent rentals based on the revenues of the underlying cinema, while certain leases contain escalating minimum rental provisions. Most of the leases require the tenant to pay local taxes, insurance and other costs applicable to the leased premises.

Future minimum lease payments under non-cancellable operating leases from third parties for the years after 31 December 2012 are as follows:

	E (in thousands)
2013	36,155
2014	34,842
2015	33,735
2016	33,416
2017	30,380
After 2017	92,498
	261,026

Principal sources of borrowing

Cinema City has historically financed its operations through its operating cash flows and through debt borrowings.

At the end of December 2012, the Existing Cinema City Group closed a new club bank financing agreement with three leading European banks BZ WBK, HSBC and ING Bank ´ Sl˛aski for a total EUR 210 million including a EUR 70 million revolving credit line. In February 2013, an additional leading European bank, BNP Paribas, joined the new club bank financing group. The term of the facility is six years. The facility may be used in EUR and PLN and has been secured mainly by pledges of shares in Cinema City Holding's main subsidiaries, investment certificates and mortgages on its major real estate assets. The credit agreement provides for standard covenants, which Cinema City Holding is obliged to meet from the period that started on 30 June 2013, including those relating to a pre-determined level of

leverage (net leverage covenant) and margin. It also includes a change of control clause in case the Greidinger family's holdings in Cinema City Holding decrease below 30 per cent. or another investor obtains control over Cinema City Holding.

The new club financing agreement was used by Cinema City Holding to finance a loan of EUR 113 million granted to CCRE, to refinance other Existing Cinema City Group credit facilities, and for other general corporate purposes. The only other financing agreement of the Existing Cinema City Group that is currently in place in addition to the new club financing is a local Israeli financing of approximately EUR 40 million.

Prior to Completion, CCI will assume liability for all outstanding amounts owed by Cinema City Finance under the Club Financing Agreement and, on Completion, Cineworld will pay to the relevant banks, from the consideration for the Combination, an amount equal to such outstanding amounts. Following repayment, the facilities will be cancelled and all security granted over shares and assets of the Cinema City Holding Group will be released.

7.1 Credit risk

Credit risk is the risk of financial loss to Cinema City if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Exposure to credit risk is limited to the carrying amount of financial assets recognised at the relevant reporting date, namely cash and cash equivalents and trade and other receivables.

Financial instruments that potentially subject Cinema City to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments and receivables. Cinema City places its cash and cash equivalents and short-term investments in financial institutions with high credit ratings. Concentrations of credit risk with respect to trade receivables are relatively low due to the relatively large number of clients to whom Cinema City provides products and services.

8. Changes in accounting policies

The Cinema City Holding Group's combined financial statements are prepared in accordance with IFRS as adopted by the EU. The accounting policies for the Cinema City Holding Group are described at pages 143-150 of Cinema City Holding's combined annual financial statements for FY 2012, which are included in Part IX (Financial Information Relating to the Cinema City Business) of this document. These accounting policies applied, with the exception of the following change in accounting policy, during the 2013 Interim Period and 2012 Interim Period covered by this operating and financial review. The adoption of the new standards and interpretations had no impact on the combined financial statements of Cinema City Holding.

PART VIII

HISTORICAL FINANCIAL INFORMATION RELATING TO CINEWORLD

1. Basis of financial information

The audited consolidated financial statements of the Cineworld Group included in the Cineworld Group's annual reports for FY 2010, FY 2011 and FY 2012, together with the audit reports thereon, are incorporated by reference into this document. The unaudited interim results for the 26 week period ended 27 June 2013 are also incorporated by reference into this document. The consolidated financial statements as of and for the 52 week period ended 30 December 2010, the 52 week period ended 29 December 2011 and the 52 week period ended 27 December 2012 were prepared in accordance with IFRS, were audited and the audit report for each such financial year was unqualified.

The unaudited interim results for the Cineworld Group for the 2013 Interim Period are set out in Section 3 of this Part VIII.

2. Cross-reference list

The following list is intended to enable investors to identify easily specific items of information which have been incorporated by reference into this document.

2.1 Cineworld Group's 2010 Annual Report and Accounts

The page numbers below refer to the relevant pages of the Cineworld Group's 2010 Annual Report and Accounts:

auditor's report—page 42;
consolidated statement of comprehensive income—page 43;
consolidated statement of financial position—page 44;
consolidated statement of changes in equity—page 45;
consolidated statement of cash flows—page 46; and
notes to the accounts—pages 47 to 77.

2.2 Cineworld Group's 2011 Annual Report and Accounts

The page numbers below refer to the relevant pages of the Cineworld Group's 2011 Annual Report and Accounts:

auditor's report—page 52;
consolidated statement of comprehensive income—page 53;
consolidated statement of financial position—page 54;
consolidated statement of changes in equity—page 55;
consolidated statement of cash flows—page 56; and
notes to the consolidated financial statements—pages 57 to 85.

2.3 Cineworld Group's 2012 Annual Report and Accounts

The page numbers below refer to the relevant pages of the Cineworld Group's 2012 Annual Report and Accounts:

auditor's report—page 52;
consolidated statement of comprehensive income—page 53;
consolidated statement of financial position—page 54;
consolidated statement of changes in equity—page 55;
consolidated statement of cash flows—page 56; and
notes to the consolidated financial statements—pages 57 to 89.

2.4 Cineworld Group's 2013 Interim Report

The page numbers below refer to the relevant pages of the Cineworld Group's 2013 Interim Report:

condensed consolidated statement of profit or loss and other comprehensive income—page 10;
condensed consolidated statement of financial position—page 11;
condensed consolidated interim statement of changes in equity—pages 12 to 13;
condensed consolidated statement of cash flows—page 14;
notes to the interim condensed consolidated financial statements—pages 15 to 20; and
independent review report—page 21.

3. Unaudited Interim Results for the Cineworld Group for the 2013 Interim Period

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

for the 39 week period ended 26 September 2013

	Note	39 week period ended 26 September 2013	39 week period ended 27 September 2012	52 week period ended 27 December 2012
		(unaudited)	(unaudited)	(audited) (restated(1))
		£m	£m	£m
Revenue		303.7	252.9	358.7
Cost of sales		(220.8)	(191.1)	(263.9)
Gross profit		82.9	61.8	94.8
Other operating income .		0.2	0.1	0.3
Administrative expenses		(52.1)	(39.2)	(51.1)
Operating profit Analysed between:		31.0	22.7	44.0
Operating profit before depreciation and amortisation, impairment charges, onerous lease and other non-recurring charges and transaction and
reorganisation costs		52.6	40.8	66.9
—Depreciation and amortisation		(18.0)	(15.8)	(21.5)
—Onerous leases and other non-recurring charges		—	(1.6)	(1.6)
—Impairments and reversals of impairments		(1.9)	(0.3)	(0.3)
—Other non-recurring income		—	—	2.0
—Transaction and reorganisation costs		(1.7)	—	(1.1)
—Defined benefit pension scheme past service costs		—	(0.4)	(0.4)
Financial income .	4	0.2	0.2	0.3
Financial expenses Net change in fair value of cash flow hedges	4	(5.0)	(5.3)	(6.9)
reclassified from equity	4	—	1.0	1.0
Net financing costs Share of loss of jointly controlled entity using equity		(4.8)	(4.1)	(5.6)
accounting method, net of tax		(0.2)	(0.2)	(0.1)
Profit before tax		26.0	18.4	38.3
Taxation	3	(7.3)	(5.1)	(10.8)
Profit for the period attributable to equity holders of
the Company		18.7	13.3	27.5
Other comprehensive income
Foreign exchange translation gain/(loss)		0.3	(0.5)	(0.5)
Re-measurement of the defined benefit asset		0.7	(1.2)	1.2
Movement in fair value of cash flow hedge Income tax (charge)/credit on other comprehensive		1.1	(0.5)	(0.1)
income		(0.4)	0.4	(0.9)
Other comprehensive income for the period, net of income tax .		1.7	(1.8)	(0.3)
Total comprehensive income for the period
attributable to equity holders of the Company		20.4	11.5	27.2
Basic earnings per share		12.5p	9.3p	19.2p
Diluted earnings per share		12.3p	9.2p	19.0p

(1) Comparative information restated following the adoption of the amendments to IAS 19 Employee Benefits. Refer to Note 11.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 26 September 2013

	26 September 2013		27 September 2012		27 December 2012
	(unaudited) £m	£m	(unaudited) £m	£m	(audited) £m	£m
Non-current assets
Property, plant and equipment		160.4		134.2		160.0
Goodwill		236.2		217.1		236.7
Other intangible assets		14.2		0.2		15.7
Investment in equity-accounted
investee .		0.5		0.6		0.7
Other receivables		1.4		1.4		1.4
Employee benefits .		6.3		1.6		4.4
Deferred tax assets		8.8		11.8		9.9
Total non-current assets		427.8		366.9		428.8
Current assets
Inventories	3.6		2.9		3.8
Trade and other receivables	31.0		29.2		34.3
Cash and cash equivalents	9.8		3.6		10.9
Total current assets		44.4		35.7		49.0
Total assets		472.2		402.6		477.8
Current liabilities
Interest-bearing loans, borrowings and
other financial liabilities	(27.1)		(21.8)		(8.1)
Trade and other payables	(51.3)		(46.1)		(72.7)
Current taxes payable	(4.0)		(2.6)		(4.7)
Provisions	(0.4)		(0.4)		(0.3)
Total current liabilities		(82.8)		(70.9)		(85.8)
Non-current liabilities
Interest-bearing loans, borrowings and
other financial liabilities	(119.5)		(104.8)		(129.7)
Other payables	(52.1)		(51.6)		(53.3)
Government grants	(1.9)		—		(1.9)
Provisions	(10.7)		(11.2)		(11.1)
Deferred tax liabilities	(7.2)		(2.2)		(7.4)
Total non-current liabilities		(191.4)		(169.8)		(203.4)
Total liabilities		(274.2)		(240.7)		(289.2)
Net assets		198.0		161.9		188.6
Equity attributable to equity holders
of the Company
Share capital		1.5		1.4		1.5
Share premium		188.2		171.9		188.1
Translation reserve .		1.6		1.3		1.3
Hedging reserve Retained earnings/(deficit)		(2.4) 9.1		(3.9) (8.8)		(3.5) 1.2

Total equity		198.0		161.9		188.6

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

for the 39 week period ended 26 September 2013

	Issued capital	Share premium	Translation reserve	Hedging reserve	Retained deficit	Total
	£m	£m	£m	£m	(restated(1)) £m	£m
Balance at 29 December 2011	1.4	171.8	1.8	(3.4)	(11.3)	160.3
Profit for the period .	—	—	—	—	13.3	13.3
Other comprehensive income Items that will not subsequently be reclassified to profit or
loss
Re-measurement of the defined benefit asset .	—	—	—	—	(1.2)	(1.2)
Tax recognised on items that will not be reclassified to
profit or loss	—	—	—	—	0.4	0.4
Items that will subsequently be reclassified to profit or loss
Movement in fair value of cashflow hedge	—	—	—	(0.5)	—	(0.5)
Retranslation of foreign currency denominated
subsidiaries	—	—	(0.5)	—	—	(0.5)
Tax recognised on items that will be reclassified to
profit or loss	—	—	—	—	(0.1)	(0.1)
Contributions by and distributions to owners
Dividends .	—	—	—	—	(10.6)	(10.6)
Movements due to share-based compensation	—	—	—	—	0.7	0.7
Issue of shares	—	0.1	—	—	—	0.1
Balance at 27 September 2012	1.4	171.9	1.3	(3.9)	(8.8)	161.9
Balance at 29 December 2011	1.4	171.8	1.8	(3.4)	(11.3)	160.3
Profit for the period .	—	—	—	—	27.5	27.5
Other comprehensive income
Items that will not subsequently be reclassified to profit or loss
Re-measurement of the defined benefit asset .	—	—	—	—	1.2	1.2
Tax recognised on items that will not be reclassified to
profit or loss	—	—	—	—	(0.2)	(0.2)
Items that will subsequently be reclassified to profit or loss
Movement in fair value of cashflow hedge	—	—	—	(0.1)	—	(0.1)
Retranslation of foreign currency denominated
subsidiaries	—	—	(0.5)	—	—	(0.5)
Tax recognised on items that will be reclassified to
profit or loss	—	—	—	—	(0.6)	(0.6)
Contributions by and distributions to owners
Dividends .	—	—	—	—	(16.0)	(16.0)
Movements due to share-based compensation	—	—	—	—	0.6	0.6
Issue of shares	0.1	16.3	—	—	—	16.4
Balance at 27 December 2012	1.5	188.1	1.3	(3.5)	1.2	188.6
Profit for the period .	—	—	—	—	18.7	18.7
Other comprehensive income
Items that will not subsequently be reclassified to profit or
loss
Re-measurement of the defined benefit asset .	—	—	—	—	0.7	0.7
Tax recognised on items that will not be reclassified to
profit or loss	—	—	—	—	(0.2)	(0.2)
Items that will subsequently be reclassified to profit or loss
Movement in fair value of cashflow hedge	—	—	—	1.1	—	1.1
Retranslation of foreign currency denominated
subsidiaries	—	—	0.3	—	—	0.3
Tax recognised on items that will be reclassified to
profit or loss	—	—	—	—	(0.3)	(0.3)
Contributions by and distributions to owners
Dividends .	—	—	—	—	(12.0)	(12.0)
Movements due to share-based compensation	—	—	—	—	1.0	1.0
Issue of shares	—	0.1	—	—	—	0.1
Balance at 26 September 2013	1.5	188.2	1.6	(2.4)	9.1	198.0

(1) Comparative information restated following the adoption of the amendments to IAS 19 Employee Benefits. Refer to Note 11.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

for the 39 week period ended 26 September 2013

	39 week period ended 26 September 2013	39 week period ended 27 September 2012	52 week period ended 27 December 2012
	(unaudited)	(unaudited)	(audited) (restated(1))
	£m	£m	£m
Cash flows from operating activities
Profit for the period	18.7	13.3	27.5
Adjustments for:
Financial income	(0.2)	(0.2)	(0.3)
Financial expense .	5.0	5.3	6.9
Refinancing credit	—	(1.0)	(1.0)
Taxation charge	7.3	5.1	10.8
Share of loss of equity-accounted investee	0.2	0.2	0.1
Operating profit	31.0	22.7	44.0
Depreciation and amortisation	18.0	15.8	21.5
Non-cash property charges	—	1.6	1.6
Impairments and reversals of impairments .	1.9	0.3	0.3
Non-cash pension gain following change in indexation	—	0.4	0.4
Surplus of pension contributions over current service cost	(1.2)	(1.2)	(1.6)
Decrease/(increase) in trade and other receivables	3.3	(2.6)	(5.3)
Decrease/(increase) in inventories.	0.2	(0.8)	(1.3)
(Decrease)/increase in trade and other payables	(28.1)	(10.3)	10.4
(Decrease) in provisions and employee benefits	(0.2)	—	(3.0)
Cash generated from operations	24.9	25.9	67.0
Tax paid	(8.1)	(7.3)	(9.4)
Net cash flows from operating activities	16.8	18.6	57.6
Cash flows from investing activities
Interest received	0.1	0.1	0.1
Acquisition of subsidiaries net of acquired cash	—	—	(43.3)
Acquisition of property, plant and equipment	(11.6)	(24.4)	(31.1)
Net cash flows used in investing activities	(11.5)	(24.3)	(74.3)
Cash flows from financing activities
Proceeds from share issue	—	—	16.4
Dividends paid to shareholders	(12.0)	(10.6)	(16.0)
Interest paid	(3.8)	(4.9)	(4.9)
Repayment of bank loans	(37.0)	(2.5)	(5.0)
Proceeds from bank loans	46.9	22.5	32.3
Payment of finance lease liabilities	(0.6)	(0.6)	(0.6)
Net cash used in financing activities	(6.5)	3.9	22.2
Net (decrease)/increase in cash and cash equivalents	(1.2)	(1.8)	5.5
Effect of exchange rate fluctuations on cash held .	0.1	(0.1)	(0.1)
Cash and cash equivalents at start of period	10.9	5.5	5.5
Cash and cash equivalents at end of period .	9.8	3.6	10.9

(1) Comparative information restated following the adoption of the amendments to IAS 19 Employee Benefits. Refer to Note 11.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of preparation

Reporting entity

Cineworld is a company domiciled in the United Kingdom. The interim condensed consolidated financial statements of the Company as at and for the 39 weeks ended 26 September 2013 comprises the Company and its subsidiaries (together referred to in this Part VIII as the Group) and the Group's interests in jointly controlled entities.

The consolidated financial statements of the Group as at and for the 52 week period ended 27 December 2012 are available upon request from the Company's registered office at Power Road Studios, 114 Power Road, Chiswick W4 5PY.

Statement of compliance

These Condensed Consolidated Interim Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. These condensed consolidated interim financial statements have been prepared in accordance with the requirements of the Prospectus Directive regulation and the Listing Rules, and in accordance with this basis of preparation. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the 52 weeks ended 27 December 2012.

The comparative figures for the financial year ended 27 December 2012 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was: (i) unqualified; (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report; and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Significant accounting policies

These Condensed Consolidated Interim Financial Statements are unaudited and, have been prepared on the basis of accounting policies consistent with those applied in the Consolidated Financial Statements for the 52 weeks ended 27 December 2012.

The amendments to IAS 19 Employee Benefits were adopted during 2013 and, although not significant to the financial statements at any of the three balance sheet dates presented, have been applied retrospectively.

2. Operating segments

Determination and presentation of operating segments

Following the acquisition of Picturehouse, the Group has determined that is has two operating segments: Cineworld and Picturehouse.

	Cineworld	Picturehouse	Total
	(restated(1)) £m	£m	(restated(1)) £m
39 weeks to 26 September 2013
Total revenues	277.2	26.5	303.7
Segmental operating profit .	30.2	0.8	31.0
Net finance costs Share of loss of jointly controlled entities using equity method,	(4.7)	(0.1)	(4.8)
net of tax	(0.2)	—	(0.2)
Profit before taxation	25.3	0.7	26.0
Segmental total assets	457.4	14.8	472.2
39 weeks to 27 September 2012
Total revenues	252.9	—	252.9
Segmental operating profit	22.7	—	22.7
Net finance costs Share of loss of jointly controlled entities using equity method,	(4.1)	—	(4.1)
net of tax	(0.2)	—	(0.2)
Profit before taxation	18.4	—	18.4
Segmental total assets	402.6	—	402.6
52 weeks to 27 December 2012
Total revenues	356.2	2.5	358.7
Segmental operating profit	43.9	0.1	44.0
Net finance costs Share of loss of jointly controlled entities using equity method,	(5.6)	—	(5.6)
net of tax	(0.1)	—	(0.1)
Profit before taxation	38.2	0.1	38.3
Segmental total assets	441.2	36.6	477.8

(1) Comparative information restated following the adoption of the amendments to IAS 19 Employee Benefits. Refer to Note 11.

3. Taxation

The taxation charge has been calculated by reference to the expected effective corporation tax rates for the full financial year to end on 26 December 2013 applied against the profit before tax for the period ended 26 September 2013. Recognised in the income statement:

	39 week period ended 26 September 2013 (unaudited) £m	39 week period ended 27 September 2012	52 week period ended 27 December 2012
		(unaudited) £m	(audited) (restated(1)) £m
Current year tax expense
Current year	6.7	4.7	10.0
Adjustments in respect of prior years	—	—	(0.6)
Total current year tax expense Deferred tax charge	6.7	4.7	9.4
Current year	0.6	0.4	1.4
Total deferred tax expense	0.6	0.4	1.4
Total tax charge in the income statement	7.3	5.1	10.8
Effective tax rate	28.1%	27.7%	28.2%

(1) Comparative information restated following the adoption of the amendments to IAS 19 Employee Benefits. Refer to Note 11.

4. Finance income and expense

	39 week period ended 26 September 2013	39 week period ended 27 September 2012	52 week period ended 27 December 2012
	(unaudited)	(unaudited)	(audited) (restated(1))
	£m	£m	£m
Interest income .	0.1	0.1	0.1
Defined benefit pension scheme net finance income	0.1	0.1	0.2
Financial income .	0.2	0.2	0.3
Interest expense on bank loans and overdrafts	3.8	3.7	4.9
Amortisation of financing costs	0.3	0.3	0.4
Unwind of discount on onerous lease provision .	0.6	0.6	0.8
Interest charge as a result of change in discount rate relating
to onerous lease provisions .	—	0.4	0.4
Other financial costs	0.3	0.3	0.4
Financial expense	5.0	5.3	6.9
Amounts reclassified from equity to profit and loss in respect
of cash flow hedges	—	(1.0)	(1.0)
Total financial expense	5.0	4.3	5.9

(1) Comparative information restated following the adoption of the amendments to IAS 19 Employee Benefits. Refer Note 11.

5. Earnings per share

Basic earnings per share is calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period, after excluding the weighted average number of non-vested ordinary shares held by the employee ownership trust. Adjusted earnings per share is calculated in the same way except that the profit for the period attributable to ordinary shareholders is adjusted by adding back the amortisation of intangible assets, the cost of share-based payments and other one-off income or expense. Adjusted pro forma earnings per share is calculated by applying a tax charge at the statutory rate, to the adjusted profit.

Diluted earnings per share is calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period, after excluding the weighted average number of any non-vested ordinary shares held by the employee share ownership trust and after adjusting for the effects of dilutive options.

	39 week period ended 26 September 2013	39 week period ended 27 September 2012	52 week period ended 27 December 2012
	(unaudited)	(unaudited)	(audited) (restated(1))
	£m	£m	£m
Profit for the period attributable to ordinary shareholders Adjustments:	18.7	13.3	27.5
Amortisation of intangible assets	1.3	0.1	0.2
Share based payments	1.0	0.7	0.9
Transaction and reorganisation costs .	1.7	—	1.1
Impairments	1.9	1.0	1.0
Onerous lease cost	—	1.6	1.6
Defined benefit scheme past service costs	—	0.4	0.4
Income relating to VAT reclaim	—	—	(2.0)
Refinancing income/(expenses)	—	(1.0)	(1.0)
Adjusted earnings	24.6	16.1	29.7
Add back tax charge	7.3	5.1	10.8
Adjusted profit before tax	31.9	21.2	40.5
Less tax at statutory rate 23.25% (2012: 24.5%)	(7.4)	(5.2)	(9.9)
Adjusted profit after tax	24.5	16.0	30.6

(1) Comparative information restated following the adoption of the amendments to IAS 19 Employee Benefits. Refer Note 11.

	Number of shares	Number of shares	Number of shares
	m	m	m
Weighted average number of shares in issue	149.8	142.6	143.1
Basic and adjusted earnings per share denominator	149.8	142.6	143.1
Dilutive options	2.5	1.9	1.6
Diluted earnings per share denominator	152.3	144.5	144.7
Shares in issue at period end	149.9	142.8	149.6
	Pence	Pence	Pence
Basic earnings per share	12.5	9.3	19.2
Diluted earnings per share	12.3	9.2	19.0
Adjusted basic earnings per share	16.4	11.2	21.4
Adjusted diluted earnings per share	16.1	11.1	21.1

6. Dividends

The Cineworld Directors have declared an interim dividend of 4.1 pence per share, amounting to 6.1 million, which was paid on 4 October 2013 to ordinary shareholders on the register at the close of business on 6 September 2013. In accordance with IAS 10, this will be recognised in the reserves of the Group on the payment date.

7. Analysis of net debt

	Cash at bank and in hand	Bank loans	Finance leases	Interest rate swap	Net debt
	£m	£m	£m	£m	£m
Balance at 27 December 2012	10.9	(127.3)	(7.0)	(3.5)	(126.9)
Cash flows	(1.1)	(9.8)	0.6	—	(10.3)
Non cash movement	—	(0.3)	(0.4)	1.1	0.4
Balance at 26 September 2013	9.8	(137.4)	(6.8)	(2.4)	(136.8)

8. Property, plant and equipment

During the 2013 Interim Period, the Cineworld Group acquired assets of £18.1 million (2012 Interim Period: £22.6 million; FY 2012: £32.8 million).

9. Capital commitments

Capital commitments at the end of the financial period for which no provision has been made were £18.5 million at 26 September 2013 (27 September 2012: £6.3 million and 27 December 2012: £7.5 million) relating primarily to new sites.

10. Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.

Total compensation for the Directors during the 2013 Interim Period was £891,000 (2012 Interim Period: £867,000; FY 2012: £1,692,000).

Revenue receivable from DCM in the 2013 Interim Period was £9.4 million (2012 Interim Period: £14.4 million and FY 2012: £14.4 million) and as at 26 September 2013, £1.5 million was due from DCM in respect of trade receivables (27 September 2012: £0.9 million; 27 December 2012: £0.2 million). In addition the Group has a working capital loan outstanding from DCM of £0.5 million (27 December 2012: £0.5 million).

11. Changes in accounting policy

The Group has adopted the amendments to IAS 19 Employee Benefits during the period which have been applied retrospectively and has resulted in the restatement of some comparative information.

Under IAS 19 revised, the Group determines the net interest income for the period on the net defined benefit asset by applying the discount rate used to measure the defined benefit obligation at the beginning of the period to the net defined benefit asset at the end of the period, taking into account any changes in the net defined benefit asset during the period as a result of contributions and payments. Consequently, the net interest income on the net defined benefit asset now comprises interest on the defined benefit obligation and interest income on plan assets. Previously, the Group determined interest income on plan assets based on their long-term rate of expected return.

Pension administrative expenses previously netted off against the return on defined benefit pension plan assets have been reclassified to administrative expenses.

The impact of the adoption of these amendments is not considered significant in any of the three periods presented. Specifically, net finance income on the defined benefit pension scheme for the 2013 Interim Period has decreased by £83,000 to £154,000. The impact on the 2013 Interim Period to 2012 Interim Period and FY 2012 is a £114,500 decrease in net pension return to £93,500 and a £229,000 decrease in net pension return to £187,000 respectively.

Pension administrative expenses for the 2013 Interim Period were £141,000. Pension administrative expenses reclassified from net finance income to administrative expenses for the 2013 Interim Period to the 2012 Interim Period were £145,500 and for FY 2012 were £194,000.

The net impact of the above two adjustments on the net pension finance income for the 2013 Interim Period is an increase of £31,000. This is made up of an increase of £145,500 due to the reclassification of administration costs being offset by the decrease in net pension return of £114,500. The net impact on FY 2012 is a decrease of £35,000 which is made up of an increase of £194,000 due to pension administration costs being reclassified offset by the decrease in net finance income of £229,000.

12. Post balance sheet events

On 30 April 2013 the Office of Fair Trading referred Cineworld's acquisition of Picturehouse to the Competition Commission in order for it to investigate if any reduction in competition was likely to occur following the transaction.

The Competition Commission issued its final report on 8 October 2013, in which it ruled that as a result of the transaction there was a substantial lessening of competition in three local geographical areas: Aberdeen, Bury St Edmunds and Cambridge. The remedy required by the Competition Commission was the divestment of either a Cineworld or Picturehouse cinema in each of these locations.

At the balance sheet date, 26 September 2013, the Cineworld Directors were optimistic that the Competition Commission ruling would fall in their favour. Following this October ruling, the Group has taken the decision to divest the Picturehouse cinemas based in Aberdeen and Bury St Edmunds. The Board will determine which of the Cambridge cinemas will be sold later in the year.

As at the date of the approval of the financial statements both the Aberdeen and Bury St Edmunds sites are being actively marketed for sale. On the date of approval of these financial statements indicative offers have been received. The proposed sales have resulted in an impairment of the Goodwill balance attached to those cinemas of £0.7 million. The impairment change has been presented within the impairment line of the Condensed Consolidated Statement of Comprehensive Income.

Due to the fact that the sites were not actively marketed at the balance sheet date, the provisions of IFRS 5: Non-current Assets Held for Sale and Discontinued Operations have not been applied.

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE INTERIM REPORT

The Cineworld Directors confirm that to the best of their knowledge the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and were approved by a duly appointed committee of the Board on 8 January 2014.

PART IX

FINANCIAL INFORMATION RELATING TO THE CINEMA CITY BUSINESS

Basis of financial information

The financial information in this Part IX is in two parts:

Part A: Combined Financial Information of Cinema City Holding for FY 2012, FY 2011 and FY 2010; and
Part B: Combined Unaudited Interim Financial Information of Cinema City Holding for the 2013 Interim Period.

The Cineworld Directors confirm that the Combined Unaudited Interim Financial Information of Cinema City Holding is prepared in a form that is consistent with Cineworld's accounting policies in its latest annual accounts, except for the adoption of new standards effective as of 1 January 2013 (which had no material effect on the combined financial information).

The Directors Cineworld Group plc Power Road Chiswick London W4 5PY United Kingdom

Dear Sirs,

Cinema City Holding B.V.

We report on the financial information of the Cinema City Business which comprises combined statements of financial position as at 31 December 2012, 2011 and 2010 and the combined statements of profit or loss and comprehensive income, changes in equity and cash flows for the years ended 31 December 2012, 2011 and 2010. This financial information has been prepared for inclusion in the class 1 circular relating to the acquisition of the Cinema City Business dated 10 January 2014 of Cineworld Group Plc. on the basis of the accounting policies set out in Note 3 to the combined financial information. This report is required by Listing Rule 13.5.21 and is given for the purpose of complying with that rule and for no other purpose.

Save for any responsibility which we may have to those persons to whom this report is expressly addressed and which we may have to ordinary shareholders as a result of the inclusion of this report in the class 1 circular or arising under Prospectus Rule 5.5.3R (2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Listing Rule 13.4.1R (6) and item 23.1 of Annex I to Commission Regulation (EC) 809/2004, consenting to its inclusion in the class 1 circular and the prospectus dated 10 January 2014 respectively.

Responsibilities

The Directors of Cineworld Group plc are responsible for preparing the financial information on the basis of preparation set out in Note 2 to the combined financial information and in a form that is consistent with the accounting policies adopted in Cineworld Group plc's latest annual accounts.

It is our responsibility to form an opinion on the financial information and to report our opinion to you.

Basis of opinion

We conducted our work in accordance with Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of significant estimates and judgments made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the entity's circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion

In our opinion, the combined financial information gives, for the purposes of the class 1 circular dated 10 January 2014, a true and fair view of the state of affairs of the Cinema City Business as at the dates stated and of its profits, cash flows and changes in equity for the periods then ended in accordance with the basis of preparation set out in Note 2.

Declaration

For the purposes of Prospectus Rule 5.5.3R (2)(f) we are responsible for this report as part of the prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the prospectus in compliance with item 1.2 of Annex I of Commission Regulation (EC) 809/2004.

Yours faithfully Kost Forer Gabbay & Kasierer A Member of Ernst & Young Global

Cinema City Holding

Combined Financial Information for the years ended 31 December 2012, 2011 and 2010

Combined Statements of Financial Position

			For the year ended 31 December
	Note	2012	2011	2010
			EUR (thousands)
ASSETS
NON-CURRENT ASSETS
Intangible assets	6	18,359	13,159	801
Property and equipment, net	7	308,986	263,917	231,761
Deferred tax asset	21	2,964	2,100	2,030
Long-term loan to related party		112,540	—	—
Other long-term receivables		3,022	—	—
Total non-current assets		445,871	279,176	234,592
CURRENT ASSETS
Inventories	8	4,544	6,652	4,660
Receivables
Trade accounts receivable	9	19,700	14,758	13,387
Receivable from related parties		—	1,040	480
Income taxes receivable		315	604	1,061
Other accounts receivable and prepaid expenses	10	7,651	12,585	11,546
Total receivables		27,666	28,987	26,474
Financial assets
Foreign currency exchange contracts		—	644	90
Marketable securities		7	24	190
Total financial assets		7	668	280
Cash and short-term deposits
Cash and cash equivalents .	11	24,280	9,277	10,527
Short-term bank deposits—collateralised	12	3,083	340	329
Total cash and short-term deposits		27,363	9,617	10,856
Total current assets		59,580	45,924	42,270
TOTAL ASSETS		505,451	325,100	276,862

Combined Statements of Financial Position

		For the year ended 31 December
	Note	2012	2011	2010
			EUR (thousands)
EQUITY AND LIABILITIES
EQUITY .	13
Share and share premium reserve		63,299	80,635	80,619
Accumulated currency translation adjustments		(4,322)	(11,272)	2,474
Hedge reserve		—	451	73
Retained earnings		164,034	144,347	123,422
Total equity attributable to equity holders of
Cinema City Holding		223,011	214,161	206,588
Non-controlling interests		—	(2,071)	(4,957)
Total equity		223,011	212,090	201,631
LONG-TERM LIABILITIES
Long-term loans, net of current portion	15	204,077	36,494	19,066
Accrued employee retirement rights, net	14	1,061	849	734
Deferred tax liabilities	21	4,687	3,391	6,405
Financial lease	18(1)f	929	1,080	1,215
Other long-term liabilities		130	179	3,302
Total long-term liabilities		210,884	41,993	30,722
CURRENT LIABILITIES
Short-term borrowings	16	20,540	30,331	12,111
Trade accounts payable		18,942	17,414	9,702
Payable to related parties		—	210	524
Employee and payroll accruals		2,620	2,401	2,036
Other accounts payable	17	28,098	18,281	18,986
Income tax payable		1,356	2,380	1,150
Total current liabilities		71,556	71,017	44,509
Total liabilities		282,440	113,010	75,231
TOTAL EQUITY AND LIABILITIES		505,451	325,100	276,862

Combined Statements of Profit or Loss

		For the year ended 31 December
	Note	2012	2011	2010
			EUR (thousands)
Revenues	26	280,653	267,459	234,549
Operating costs .	19	236,649	225,663	188,560
Gross margin		44,004	41,796	45,989
General and administrative expenses Acquisition-related and reorganisation expenses		(14,348) —	(13,789) (3,278)	(12,682) —
Operating profit		29,656	24,729	33,307
Financial income .	20	2,130	634	683
Financial expenses .	20	(6,012)	(4,074)	(2,857)
Net finance expenses		(3,882)	(3,440)	(2,174)
Loss on disposals, and write-off of other investments		(334)	(201)	(86)
Operating income before taxation		25,440	21,088	31,047
Income tax benefit/(expense)	21	(1,778)	286	(4,038)
Net income		23,662	21,374	27,009
Attributable to:
Equity holders of Cinema City Holding		23,411	20,925	27,368
Non-controlling interests		251	449	(359)
Net income		23,662	21,374	27,009

Combined Statements of Comprehensive Income

		For the year ended 31 December
	Note	2012	2011	2010
			EUR (thousands)
Net income for the year		23,662	21,374	27,009
Other comprehensive income
Foreign exchange translation differences	21(IV)	6,851	(13,540)	6,280
Cash flow hedges, net	21(IV)	(451)	378	(1,201)
Other comprehensive income (loss), net		6,400	(13,162)	5,079
Total comprehensive income for the year		30,062	8,212	32,088
Attributable to:
Equity holders of Cinema City Holding		29,910	7,557	33,058
Non-controlling interests		152	655	(970)
Total comprehensive income for the year		30,062	8,212	32,088

Combined Statements of Changes in Shareholders' Equity

					Attributable to equity holders of Cinema City Holding
	Share and Share premium	Translation reserve	Hedge reserve	Retained earnings	Total	Non controlling interests	Total equity
				EUR (thousands)
Balance as of 1 January
2010	13,763	(4,417)	1,274	96,054	106,674	(3,987)	102,687
Net income (loss) for the
year	—	—	—	27,368	27,368	(359)	27,009
Foreign currency
translation adjustment . .	—	6,891	—	—	6,891	(611)	6,280
Cash flow hedges, net	—	—	(1,201)	—	(1,201)	—	(1,201)
Share-based payments
granted by CCI .	63	—	—	—	63	—	63
Capital contribution	66,793	—	—	—	66,793	—	66,793
Balance as of 31 December
2010	80,619	2,474	73	123,422	206,588	(4,957)	201,631
Net income for the year	—	—	—	20,925	20,925	449	21,374
Foreign currency
translation adjustment . .	—	(13,746)	—	—	(13,746)	206	(13,540)
Cash flow hedges, net	—	—	378	—	378	—	378
Share-based payments
granted by CCI .	16	—	—		16	—	16
Classification of minority
shareholders' loan to
non-controlling interests .	—	—	—	—	—	2,231	2,231
Balance as of 31 December
2011	80,635	(11,272)	451	144,347	214,161	(2,071)	212,090
Balance as of 31 December
2011	80,635	(11,272)	451	144,347	214,161	(2,071)	212,090
Net income for the year	—	—	—	23,411	23,411	251	23,662
Foreign currency
translation adjustment . .	—	6,950	—	—	6,950	(99)	6,851
Cash flow hedges, net	—	—	(451)	—	(451)	—	(451)
Share-based payments
granted by CCI	489	—	—		489	—	489
Acquisition of
non-controlling interests .	—	—	—	(3,724)	(3,724)	1,919	(1,805)
Distribution to
shareholders	(17,825)	—	—		(17,825)	—	(17,825)

Balance as of 31 December
2012	63,299	(4,322)	—	164,034	223,011	—	223,011

Combined Statements of Cash Flows

			For the year ended 31 December
	Note	2012	2011	2010
			EUR (thousands)
Cash flows from operating activities
Net income Adjustments to reconcile net income to net cash from operating activities:		23,662	21,374	27,009
Depreciation and amortisation Increase in accrued employee rights upon retirement,	19	30,555	25,417	19,872
net Decrease in provision related to onerous lease		208	144	57
contracts		—	—	(349)
Loss on disposals and written off fixed assets		317	201	98
Share-based payments	13	489	16	63
Interest expenses		5,579	4,074	3,109
Interest income		(790)	(634)	(798)
Income tax paid		(2,056)	(951)	(3,464)
Tax expenses (benefit)		1,778	(286)	4,038
Operating income before working capital		59,742	49,355	49,635
Decrease/ (increase) in inventories		2,388	(2,156)	645
Decrease/ (increase) in trade accounts receivable Decrease/ (increase) in prepaid expenses and other		(4,306)	(1,045)	3,279
receivables		1,643	(540)	3,214
Decrease/ (increase) in receivable from governmental
institutions Decrease in long-term film distribution costs and		1,323	(1,051)	1,606
deferred expenses		119	1,373	452
Increase/(decrease) in accounts payable and other payables		5,069	(95)	(1,618)
Increase in employee and payroll accruals		174	86	38
Increase/ (decrease) in payables to related parties		205	(590)	366
Increase in receivables from related parties		(209)	(305)	(542)
Net cash from operating activities		66,148	45,032	57,075
Cash flows used in investing activities
Acquisition of subsidiaries and associates, net of cash
acquired	5	—	(18,426)	—
Purchase of property and equipment*		(61,875)	(52,791)	(44,022)
Investment in intangible assets	6	(8,342)	(4,065)	(364)
Proceeds from disposition of property and equipment
and intangible assets		97	117	224
Short-term bank deposits—collateralised		—	(14)	(119)
Changes in payables to tax authorities related to
investment activity				(8,493)
Interest received		790	634	798
Changes in marketable securities		17	109	(12)
Net cash used in investing activities		(69,313)	(74,436)	(51,988)

* Taking into account movements in investment creditors.

Combined Statements of Cash Flows (continued)

		For the year ended 31 December
	Note	2012	2011	2010
			EUR (thousands)
Cash flows from financing activities
Proceeds from long-term loans		148,193	41,531	12,782
Repayment of long-term loans		(87,026)	(18,556)	(96,961)
Interest Paid		(4,709)	(4,074)	(3,109)
Decrease in long-term payables		(290)	(1,390)	(63)
Distribution to shareholders		(17,825)	—	—
Acquisition of non-controlling interest		(1,805)	—	—
Contribution from shareholders		—	—	66,793
Short-term bank deposits—collateralised		(2,670)	—	—
Short-term bank credit, net		(16, 255)	11,368	2,877
Net cash from (used in) financing activities Foreign currency exchange differences on cash and		17,613	28,879	(17,681)
cash equivalents		555	(725)	704
Increase/(decrease) in cash and cash equivalents		15,003	(1,250)	(11,890)
Cash and cash equivalents at beginning of year		9,277	10,527	22,417
Cash and cash equivalents at end of year .	11	24,280	9,277	10,527

Note 1—General

A. Description of the Cinema City Holding Group's business

Cinema City Holding was incorporated in The Netherlands in December 2012. Cinema City Holding is a wholly-owned subsidiary of CCI. CCI via its subsidiaries is principally engaged in the operation of cinema related entertainment activities in various countries in CEE and Israel. In December 2012, upon the incorporation of Cinema City Holding, CCI contributed its cinema operations in CEE to Cinema City Holding in consideration of the issuance of shares by Cinema City Holding. The corporate office of Cinema City Holding is located in Rotterdam, The Netherlands.

CCI's shares are publicly traded on the WSE. CCI was incorporated in The Netherlands and its corporate office is located in Rotterdam.

CCI has been engaged in the theatre business since 1929. CCI through its subsidiaries operates 99 multiplexes with a total of 966 screens in seven countries: Poland, Israel, Hungary, the Czech Republic, Romania, Bulgaria and Slovakia. In the CEE countries, the Cinema City Holding Group operates cinemas under the Cinema City brand and in Israel it operates under the Yes Planet and Rav-Chen brands. Cinema operations are the Cinema City Holding Group's core business comprising of selling tickets, snacks and beverages in concession stands, as well as of cinema advertising run under its brand name New Age Media. Most of Cinema City Holding's cinema operations in CEE are conducted in leased premises, and a portion are conducted in real estate (land and buildings) owned by the Cinema City Holding Group.

The Cinema City Holding Group also operates film distribution through its subsidiaries in various countries under the brand name Forum Film. Forum Film serves as the exclusive motion picture distributor for Walt Disney Company and MGM studio in most of its countries of operations. In Israel, via its sub-distributor relationship with A.D. Matalon, the Cinema City Holding Group also distributes films for Sony and Fox studios and in Bulgaria Forum Film is a distributor for Paramount and Universal Studios.

B. Proposed Transaction

The Combination is to be effected by Cineworld acquiring CCI's cinema business in consideration for cash and shares in Cineworld. The cinema business to be purchased will include the theatre operations, including the leases of properties and related leasehold improvements, the Cinema City Holding Group's brand names, and the film distribution and advertising businesses. The freehold real estate (land and buildings) and one related leasehold that is owned by members of the Cinema City Holding Group will not be acquired in the Combination and, following the Reorganisation, will be leased from relevant members of the Remaining Cinema City Group.

In anticipation of the Combination, the Existing Cinema City Group is in the process of undertaking the Reorganisation with the effect that, following completion of the Reorganisation, all of the Cinema City Business will be held by Cinema City Holding, together with other members of the Cinema City Holding Group. As part of the Reorganisation, CCI will (i) transfer all of its Israeli cinema operations to Cinema City Holding by way of a transfer to it of (a) the entire issued share capital of Cinema-Phone Ltd and Norma Film Ltd (together with its subsidiaries), and (b) the cinema-related assets (excluding real estate) and ''Yes Planet'' brand owned by IT 2004 (which company will remain within the Remaining Cinema City Group); (ii) assume the outstanding external bank debt of Cinema City Finance; and (iii) transfer Cinema City Finance to Cinema City Holding.

As the freehold real estate (land and buildings) and one related leasehold at AuPark that is owned by members of the Cinema City Holding Group will not be acquired by Cineworld pursuant to the Combination, all of the freehold real estate assets and the related leasehold at AuPark currently held by members of the Cinema City Holding Group, being Cinema City Poland CC Sp. Zoo SKA (Janki and Katowice cinema-related property and an office property in Fosa), I.T. Poland Development 2003-CC Sp. Zoo SKA (Torun and Ł ´ od´ ´z cinema-related property and land at Gliwice), Cinema City Czech s.r.o. (Galaxie cinema-related property) and Cinema City Slovakia s.r.o. (AuPark cinema-related property), will be transferred to members of the Remaining Cinema City Group. Members of the Enlarged Group will continue to operate from all of these cinema and office sites on a leasehold basis and will enter into new leases with members of the Remaining Cinema City Group in respect of these sites (but not in respect of the land at Gliwice) and the Rishon LeZion cinema (owned by IT 2004) (pursuant to which it shall incur an initial aggregate annual rental charge of EUR 7,650,000) (see Section 3 of Part V (Information on Cinema City Cinema) for further details).

C. Combined financial information

Cinema City Holding has prepared combined financial information specifically for the purpose of this document in order to reflect the assets, liabilities, and the activities and operations of the Cinema City Business. It should be noted that the combined financial information of the Cinema City Business was prepared to show the performance of that business prior to the Combination and therefore includes all cinema-related real estate (land and buildings) of Cinema City Holding (which, for the avoidance of doubt, will not be acquired as part of the proposed Combination as described in Note 1(b) above).

Since the contribution of the cinema operations by CCI to Cinema City Holding, a newly established subsidiary, did not result in any change of economic substance, Cinema City Holding accounted for the common controlled transaction in its consolidated financial statements as a continuation of the Cinema City Holding Group, in a manner similar to a pooling of interests. Accordingly, the historical consolidated financial statements of Cinema City Holding reflect the carrying values as recorded by CCI of each of the entities acquired from CCI. In addition, the consolidated financial statements for periods prior to the date of the actual contribution in December 2012 reflect the contribution of the entities as if it had occurred at the beginning of the earliest period presented in the financial statements of Cinema City Holding.

Moreover, since as mentioned above as part of the Combination the Israeli cinema operations and Cinema City Finance will be contributed to Cinema City Holding, the financial statements of the cinema operations in CEE and Israel including their related assets and liabilities and the financial statements of Cinema City Finance for all periods presented are presented based on a combined basis.

Note 2—Basis of preparation

A. Statement of compliance

The combined statements of financial position as at 31 December 2012, 2011 and 2010 and the combined statements of income and comprehensive income, changes in equity and cash flows for the years ended 31 December 2012, 2011 and 2010 have been prepared in accordance with the requirements of the Listing Rules and in accordance with this basis of preparation. The basis of preparation describes how the financial information has been prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS as adopted by the EU), except as described below. IFRS as adopted by the EU does not provide for the preparation of combined financial information, and accordingly in preparing the combined financial information certain accounting conventions commonly used for the preparation of historical financial information for inclusion in investment circulars as described in the Annexure to SIR 2000 (Investment Reporting Standard applicable to public reporting engagements on historical financial information) issued by the UK Auditing Practices Board have been applied. The application of these conventions results in the following material departures from IFRS as adopted by the EU. In other respects IFRS as adopted by the EU have been applied.

The combined financial information is prepared in accordance with IFRS as adopted by the EU, except in respect of the following matters:

The combined financial information does not comply with IAS 27 Consolidated and Separate Financial Statements, because, prior to 31 December 2012, Cinema City Holding did not control Cinema City Finance and the subsidiaries carrying out the Israeli cinema business and, consequently, Cinema City Holding is not permitted by IAS 27 to present consolidated financial information. The financial information has therefore been prepared on a combined basis by applying the principles underlying the consolidation procedures of IAS 27.
The combined financial information does not constitute a set of general purpose financial statements under IAS 1, Presentation of Financial Statements, and consequently, Cinema City Holding does not make an explicit and unreserved statement of compliance with IFRS as required by IAS 1.
During the periods covered by the combined financial information, the Existing Cinema City Group paid royalties to CCI for the use of the brand. The brand name of the cinema operations was transferred (at its nil carrying value) to a subsidiary of the Existing Cinema City Group in 2011. As the brand name is an integral part of the cinema operations and will remain in the Cinema City Holding Group subsequent to the Combination, the combined financial information reflect the brand as if it was held by the Cinema City Holding Group for all periods presented and therefore excludes the royalty charges. Since the payments of royalties were paid to CCI, which is not part of the combined entities, this elimination is not in accordance with IAS 27.

• As Cinema City Holding is not in the process of filing its financial statements with a securities commission for the purpose of issuing shares in a public market, no earnings per share calculation is presented.

The combined financial information has been prepared on the assumption that the Cinema City Holding Group is a going concern, meaning it will continue its operation in the foreseeable future and will be able to realise assets and discharge liabilities in the normal course of its operations.

The basis of preparation and accounting policies used in preparing the combined financial information for the years ended 31 December 2012, 2011 and 2010 are set out below. The basis of the combined financial information is prepared in a form that is consistent with Cineworld Group plc's accounting policies in its latest annual accounts. The accounting policies set out below have been applied consistently for all periods presented in the combined financial information.

It should be noted that the combined financial information of the Cinema City Business shows the performance of that business prior to the Combination and therefore includes all the freehold real estate (land and buildings) and one related leasehold property at AuPark owned by members of the Cinema City Holding Group (which, for the avoidance of doubt, will not be acquired as part of the proposed Combination as described in Note 1(B) above) (see also Note 7).

B. Basis of measurement

Cinema City Holding presents its combined financial information in euro since its operations are located in the Eurozone where EUR is considered to be the main currency. The combined financial information is prepared on the historical cost basis except for derivatives, marketable securities and share-based payments that are measured at fair value.

C. Use of estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an on-going basis.

The following accounting policies are particularly sensitive to management estimates:

Related parties' transactions and disclosures.
Goodwill impairment analysis.

D. Principles of consolidation

Subsidiaries are those enterprises which are controlled by Cinema City Holding. Control exists when Cinema City Holding has the power, directly or indirectly, to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the Combined Financial Statements from the date that control effectively commences until the date that control effectively ceases.

All inter-company accounts and transactions are eliminated when preparing the Combined Financial Statements.

E. Foreign currency translation

(a) Functional and presentation currency

The functional currencies of the operations in CEE are the relevant local currencies: the Bulgarian lev, the Czech crown, the Hungarian forint, the Polish złoty and the Romanian new lei. The functional currency of the operations in Israel is the New Israeli shekel. The functional currency for the Dutch, Cypriot and Slovakian operations is the euro. Cinema City Holding presents its combined financial report in the euro since its operation is in the Euro zone where the euro is considered to be the main currency.

(b) Transactions and balances

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 remeasured. Foreign 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 Combined Income Statement within 'finance income or expense', except when deferred in other comprehensive income as qualifying cash flow hedges.

(c) Cinema City Holding Group entities

The results and financial position of all Cinema City Holding Group entities that have a functional currency different from the presentation currency are translated into euro (presentation currency) as follows:

assets and liabilities, both monetary and non-monetary, are translated at the closing exchange rate at the date of that balance sheet;
income statement items are translated at the prevailing transaction rates; and
all resulting exchange differences are recognised in other comprehensive income.

Note 3—Summary of significant accounting policies

A. Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. Acquisition costs incurred are expensed and included in acquisition-related and other reorganisation costs.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Cinema City Holding Group's cash-generating units that are expected to benefit from the combination. The level of testing goodwill for impairment is not larger than operating segment.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation.

B. Intangible assets—excluding goodwill

Intangible assets that are acquired by the Cinema City Holding Group are stated at cost less accumulated amortisation, calculated over the estimated useful life of the assets, and after impairment losses, if any. The carrying amount of the intangible assets is reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated as the higher of fair value less cost to sell and value in use. Amortisation methods, useful lives and residual values are reviewed at each reporting date.

Costs incurred in relation of the purchase of software are treated as intangible assets and are usually amortised over a period between three to five years.

Costs incurred in relation of the purchase of distribution rights are treated as intangible assets and are usually amortised over a period of three years based on the pattern in which the asset's future economic benefits are expected to be consumed by the Cinema City Holding Group.

C. Property and equipment

(1) Property and equipment are stated at cost less accumulated depreciation and impairment losses. Expenditures for maintenance and repairs are charged to expenses as incurred, while renewals and improvements of a permanent nature are capitalised.

(2) Depreciation is calculated by means of the straight-line method over the estimated useful lives of the assets. Annual rates of depreciation are as follows:

	%
Buildings	2–3
Cinema equipment	Mainly 10
Leasehold improvements	Mainly 5
Computers, furniture and office equipment	6–33
Vehicles	15–20

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

(3) Leasehold improvements are depreciated over the estimated useful lives of the assets, or over the period of the lease, including certain renewal periods, if shorter.
(4) Constructions in progress contain cinemas that are under development. Those projects are recognised at cost and are not depreciated until the cinema is starting to operate.
(5) Leases in terms of which the Cinema City Holding Group assumes substantially all the risks and rewards of ownership are classified as finance leases.
(6) Financing expenses relating to short-term and long-term loans, which were taken for the purpose of purchasing or constructing property and equipment, as well as other costs which refer to the purchasing or constructing of property and equipment, are capitalised to property and equipment.

D. Impairment of non-financial assets

The carrying amounts of the Cinema City Holding Group's non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. Goodwill and indefinite-lived intangible assets are tested annually for impairment. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit (CGU) exceeds its recoverable amount. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that is largely independent of the cash inflows of other assets or CGUs.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Cinema City Holding Group estimates the asset's or CGU's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

Goodwill is tested for impairment annually (as at 31 December) and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

E. Inventories

Inventories are valued at the lower of cost or net realisable value, and include concession products, spare parts, music cassettes, CDs and video cassettes. Cost is determined by means of the 'first in, first out' method. Net realisable value is the estimated selling price during the normal course of business, less the estimated costs of completion and variable selling expenses.

F. Financial assets

(a) Marketable securities

The investments in securities held by the Cinema City Holding Group are classified as trading securities and presented at fair value through profit and loss. Trading securities are bought and held principally for the purpose of selling them in the short term and are recorded at fair value. Unrealised gains and losses on these securities are included in the statement of profit or loss.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These are initially recognised at fair value, but subsequently at amortised cost. The Cinema City Holding Group's loans and receivables in these Combined Financial Statements comprise both current and non-current receivables.

(c) Financial assets at fair value through profit or loss

The Cinema City Holding Group uses derivative financial instruments to hedge its exposure to foreign exchange rate and interest rate risks arising from operational and financing activities.

Derivative financial instruments are recognised initially and subsequently at fair value. The fair value of foreign contracts is based on the relevant current exchange rates at the reporting date. The change in the fair value of contracts that are effective hedges is recorded directly into other comprehensive income. The Cinema City Holding Group designates these contracts to hedge future cash flow fluctuations deriving from differences between the EUR and the US dollar against local currencies. Amounts are reclassified from the hedge reserve to profit or loss when the future transaction is settled.

The derivative instruments of the Cinema City Holding Group are classified as level 2 in the fair value hierarchy in IFRS 7.

G. Allowance for doubtful accounts

The allowance for doubtful accounts is determined based upon Cinema City Holding management's evaluation of receivables doubtful for collection on a case-by-case basis.

H. Cash and cash equivalents

Cash and cash equivalents comprise cash balances and short-term highly liquid investments, that are readily convertible to known amounts of cash, and which are subject to insignificant risks of changes in value.

I. Employee benefit liabilities

The Cinema City Holding Group has several employee benefit plans:

Short-term employee benefits:

Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognised as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing plan is recognised when Cinema City Holding Group has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made.

Post-employment benefits:

The plans are normally financed by contributions to insurance companies and classified as defined contribution plans or as defined benefit plans.

The Cinema City Holding Group has defined contribution plans which the Cinema City Holding Group pays fixed contributions and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient amounts to pay all employee benefits relating to employee service in the current and prior periods. Contributions to the defined contribution plan in respect of severance or retirement pay are recognised as an expense when contributed concurrently with performance of the employee's services.

The Cinema City Holding Group also operates a defined benefit plan in respect of which its liability is calculated pursuant to applicable local laws and relevant employee agreements in relation to salaries. The liability for termination of employment is measured using the projected unit credit method. The actuarial assumptions include rates of employee turnover and future salary increases based on the estimated timing of payment.

In respect of its severance pay obligation to certain of its employees, Cinema City Holding makes current deposits in pension funds and insurance companies (the plan assets). Plan assets comprise assets held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not available to the Cinema City Holding Group's own creditors and cannot be returned directly to the Cinema City Holding Group.

J. Share based payment

CCI operates a share-based incentive plan. Such incentive plans are also granted to Cinema City Holding Group employees and members of the Management Board of the Existing Cinema City Group. The fair value of share options granted is recognised as an expense over the vesting period, with a corresponding increase in equity representing the benefit granted to Cinema City Holding Group by CCI. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest.

K. Loans, accruals and short-term liabilities

All long-term loans and borrowings are initially recognised at fair value net of issue costs associated with the borrowing. After initial recognition, interest-bearing loans are measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, as well as through the amortisation process. Derecognition takes place when its contractual obligations are discharged or cancelled or expire.

L. Revenue recognition

(1) Revenues from admission (ticket sales) and concession sales (snack-bars operated by the Cinema City Holding Group) are recognised when services are provided.
(2) Revenues from distribution of cinema films are recognised on an accrual basis by a percentage of admissions from the related films.
(3) Revenues from distribution of films to cable television companies and television stations are recognised over the agreed period for the screening of the film.
(4) Revenues from sales of video cassettes and DVDs are recognised upon delivery to the customer.
(5) Revenues from on-screen advertising contracts are included in theatre revenues and are recognised when the related advertisement or commercial is screened, or, in some cases, over the period of the contract.
(6) Revenues from rental contracts are included in other revenues and are recognised on an accrual basis.

M. Cost of revenues

(1) Costs of theatre sales include direct concession product and theatre facility costs such as employee costs, theatre rental and utilities, which are common to both ticket sales and concession operations.
(2) Costs of films distributed are capitalised until the time the films are distributed for screening. Once the films have been distributed and screening has begun, the costs are amortised at a rate equal to the ratio of revenues in the period to total estimated revenues for the films.
(3) General advertising expenses are expensed as incurred. Film advertising expenses are expensed when the film is distributed or is shown to the public.

N. Income taxes

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, calculated at the applicable local tax rates.

Deferred income tax is provided using the liability method on all temporary differences at the reporting date. The amount of deferred tax provided is based on the expected timing of the reversal of the temporary differences, using tax rates enacted or substantially enacted at the reporting date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the unused tax losses and credits can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred tax assets and liabilities are offset if there is a legal enforceable right to offset current tax assets and liabilities, and they relate to income taxes received by the same tax authority.

O. Leases

The Cinema City Holding Group as lessee:

Finance leases:

Finance leases transfer to the Cinema City Holding Group substantially all the risks and benefits incidental to ownership of the leased asset. At the commencement of the lease term, the leased assets are measured at the lower of the fair value of the leased asset or the present value of the minimum lease payments. The liability for lease payments is presented at its present value and the lease payments are apportioned between finance charges and a reduction of the lease liability using the effective interest method.

The leased asset is amortised over the shorter of its useful life or the lease term.

Operating leases:

Lease agreements are classified as an operating lease if they do not transfer substantially all the risks and benefits incidental to ownership of the leased asset. Lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term.

P. Provisions

A provision in accordance with IAS 37 is recognised when the Cinema City Holding Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The following are the types of provisions included in the financial statements:

Legal claims:

A provision for claims is recognised when the Cinema City Holding Group has a present legal or constructive obligation as a result of a past event, it is more likely than not that an outflow of resources embodying economic benefits will be required by the Cinema City Holding Group to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Onerous contracts:

A provision for onerous contracts is recognised when the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received by the Cinema City Holding Group from the contract. The provision is measured at the lower of the present value of the anticipated cost of exiting from the contract and the present value of the net anticipated cost of fulfilling it.

Q. New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations, insofar as they are endorsed by the EU, did not apply to the year ended 31 December 2012, and have not been applied in preparing these combined financial statements:

• The first phase of IFRS 9 Financial Instruments: Classification and Measurement—effective for financial years beginning on or after 1 January 2015—not endorsed by EU until the date of approval of these financial statements. In subsequent phases, the IASB will address hedge accounting and impairment. The application of the first phase of IFRS 9 will have impact on classification and measurement of the financial assets of the Cinema City Holding Group. The Cinema City Holding Group will quantify the effect in conjunction with the other phases, when issued, to present a comprehensive picture.

Amendments to IAS 19 Employee Benefits—effective for financial years beginning on or after 1 January 2013.
Amendments to IAS 1 Presentation of Financial Statements: Presentation of Items of Other Comprehensive Income—effective for financial years beginning on or after 1 July 2012.
Amendments to IAS 12 Income Taxes: Deferred Tax: Recovery of Underlying Assets—effective for financial years beginning on or after 1 January 2012.
IFRS 10 Consolidated Financial Statements—effective for financial years beginning on or after 1 January 2013.
IFRS 12 Disclosure of Interests in Other Entities—effective for financial years beginning on or after 1 January 2013.
Amendments to IFRS 10, IFRS 11 and IFRS 12 Transition Guidance—effective for financial years beginning on or after 1 January 2013.
IFRS 13 Fair Value Measurement—effective for financial years beginning on or after 1 January 2013.
Amendments to IFRS 7 Financial Instruments—Disclosures: Offsetting Financial Assets and Financial Liabilities—effective for financial years beginning on or after 1 January 2013.
Amendments to IAS 32 Financial Instruments—Presentation: Offsetting Financial Assets and Financial Liabilities—effective for financial years beginning on or after 1 January 2014.
Improvements to IFRSs (issued in May 2012)—effective for financial years beginning on or after 1 January 2013.
Amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities (issued on 31 October 2012) effective for financial years beginning on or after 1 January 2014.
Amendment to IAS 36 Impairment of Assets—effective for financial years beginning on or after 1 January 2014—not endorsed by EU until the date of approval of these financial statements.

Note 4—Changes in consolidated entities

A. Changes in consolidated entities during 2012

Other changes:

The acquisition of the non-controlling interests in Norma Film Ltd (see Notes 5 and 33); and
The acquisition of the non-controlling interests in Cinema Theatres Ltd., a subsidiary of Norma Film Ltd.—currently dormant—in which Norma Film Ltd. previously held a 60 per cent. interest.

Following these transactions, Norma Film Ltd. and its subsidiaries, Forum Film Ltd., I.T. Planet Advertising Ltd. and Cinema Theatres Ltd., are wholly-owned by Cinema City Holding.

Note 5—Business combinations and Acquisition of Non-controlling interests

Acquisition of non-controlling interests in Norma Film (2012)

During the second quarter of 2012, Cinema City Holding completed the acquisition of the non-controlling interests in Norma Film Ltd. The 50 per cent. interest in Norma Film, was acquired for an amount of EUR 1,755,000 in cash from I.M. Greidinger Ltd., an Israeli company owned by Messrs Moshe Greidinger and Israel Greidinger, both Managing Directors and (indirectly) shareholders of Cinema City Holding. Following the acquisition, Norma Film Ltd. is wholly-owned by Cinema City Holding.

Cinema City Holding has recognised directly in equity the difference between the purchase price of the non-controlling interests and the adjustments to the carrying amounts of Norma Film Ltd following the acquisition of the non-controlling interests. As a result, an amount of EUR 3,724,000 has been charged to equity (under retained earnings).

Norma Film Ltd. holds 100 per cent. of the equity share in Forum Film Ltd., a major film distributor in Israel, with distribution exclusivity in Israel for films produced by Disney (excluding Eilat), MGM and several other independent studios. In addition, Forum Film Ltd. acts as a sub-distributor for Sony and Fox films in Israel.

Acquisition of Palace Cinemas (2011)

On 19 January 2011, the Cinema City Holding Group signed a share and asset purchase agreement with Palace Cinemas (Central Europe) B.V. (Palace Cinemas), under which agreement the Cinema City Holding Group acquired 100 per cent. of the shares in four CEE subsidiaries of Palace Cinemas: Palace Cinemas Czech s.r.o., Palace Cinemas Kft, Palace Cinemas Slovak Republic s.r.o. and Palace Multikino s.r.o. and related assets. The acquisition comprised in total 15 multiplexes with 141 screens in the Czech Republic, Hungary and Slovakia plus a leasing agreement for one multiplex with eight screens in Ostrava, the Czech Republic which the Cinema City Holding Group opened in 2012. Under the share and asset purchase agreement with Palace Cinemas, the Cinema City Holding Group also provided selected management services, during a transitional period, for the 8 multiplexes (with 48 screens) operated by Palace Mozi Kft, a Hungarian subsidiary of Palace Cinemas that was not acquired by Cinema City Holding. In May 2011, the landlord at three of these multiplexes terminated the lease agreement with Palace Mozi Kft and, in mutual settlement of outstanding amounts owed by Palace Mozi Kft, assumed control of the assets of these multiplexes. Upon taking control, the landlord immediately leased the space occupied by these 3 multiplexes to the Cinema City Holding Group, which is currently operating these theatres.

Cinema City Holding, supported by an independent valuation expert, identified the fair value of assets acquired and liabilities assumed on the acquisition date (Purchase Price Allocation). In connection with the Acquisition, an amount of EUR 8,826,000 was recognised as goodwill which is mainly made up of future economic benefits including post-acquisition synergies.

The following summarises the consideration transferred, the recognised amounts of identifiable assets acquired and liabilities assumed at the acquisition date and the recognised goodwill:

	EUR (thousands)
Identifiable assets acquired and liabilities assumed
Property and equipment	20,248
Intangible assets	997
Trade accounts receivable	1,317
Inventories	295
Deferred tax assets	1,010
Other accounts receivable and prepaid expenses	2,195
Cash and cash equivalents in subsidiaries acquired	2,948
Long-term loans assumed	(6,546)
Other long-term liabilities	(613)
Deferred tax liabilities	(967)
Trade accounts payable	(3,992)
Employee and payroll accruals	(404)
Other accounts payable	(3,940)
Total net identifiable assets	12,548
Recognised goodwill (Note 6)	8,826
Total consideration	21,374
Less: cash and cash equivalents in subsidiaries acquired	2,948
Total net cash consideration	18,426

Cinema City Holding incurred acquisition-related costs of EUR 3,278,000 associated primarily with legal, accounting and advisory fees and one-time reorganisation expenses in conjunction with integrating the acquisition into the Cinema City Holding Group's existing platform. These amounts have been included in the Combined Statement of Profit or Loss as acquisition-related and reorganisation expenses.

Note 6—Intangible assets

			Financial year 2012
	Balance at beginning of year	Additions during the year	Acquisitions through business combinations	Foreign currency translation adjustments	Sales and disposals	Balance at end of year
			EUR (thousands)
Cost
Goodwill (see Note 5)	8,826	—	—	—	—	8,826
Distribution rights Other intangible assets	3,333 4,464	7,732 610	— —	293 (36)	— (61)	11,358 4,977
	16,623	8,342	—	257	(61)	25,161
Amortisation and
impairment
Distribution rights	915	2,825	—	128	—	3,868
Other intangible assets	2,549	664	—	(218)	(61)	2,934
	3,464	3,489	—	(90)	(61)	6,802
Carrying amount	13,159	4,853	—	347	—	18,359
			Financial year 2011 (thousands)
	Balance at beginning of year	Additions during the year	Acquisitions through business combinations	Foreign currency translation adjustments	Sales and disposals	Balance at end of year
			EUR (thousands)
Cost
Goodwill (see Note 5)	—	—	8,826	—	—	8,826
Distribution rights	—	3,333	—	—	—	3,333
Other intangible assets	2,219	732	1,832	(272)	(47)	4,464
	2,219	4,065	10,658	(272)	(47)	16,623
Amortisation and
impairment
Distribution rights Other intangible fixed	—	915	—	—	—	915
assets	1,418	492	835	(150)	(46)	2,549
	1,418	1,407	835	(150)	(46)	3,464

Carrying amount	801	2,658	9,823	(122)	(1)	13,159

	Financial year 2010 (thousands)
	Balance at beginning of year	Additions during the year	Acquisitions through business combinations	Foreign currency translation adjustments	Sales and disposals	Balance at end of year
			EUR (thousands)
Cost
Other intangible assets	1,799	364	—	97	(41)	2,219
	1,799	364	—	97	(41)	2,219
Amortisation and
impairment
Other intangible assets	1,110	277	—	71	(40)	1,418
	1,110	277	—	71	(40)	1,418
Carrying amount	689	87	—	26	(1)	801

The goodwill has been allocated for impairment testing to the theatre operations in Hungary (EUR 2,678,000) and the theatre operations in the Czech Republic and Slovakia combined (EUR 6,148,000).

For the years ended 31 December 2011 and 2012, Cinema City Holding has determined that there is no impairment of any of its (group of) cash-generating units containing goodwill. The recoverable amounts of the units are calculated on the basis of value in use and based on financial budgets covering a five-year period, and a discount rate of 14.5 per cent. to the Hungarian operation and 11.0 per cent. to the Czech and Slovakian operations, respectively, representing Cinema City Holding's weighted average cost of capital. The cash flows beyond the five-year period are extrapolated using a prudent 2.8 per cent. growth rate for the relevant segments. Cinema City Holding's management believes that any reasonable possible change in the key assumptions on which the recoverable amounts are based would not cause the relevant carrying amounts to exceed these recoverable amounts.

Key assumptions used in the value in use calculations, which are based on Cinema City Holding's past experience, are the following:

Cinema City Holding has assumed an average annual growth rate of two per cent. during the next five years.
The fixed costs will increase by three per cent. annually in the next five years.

Note 7—Property and equipment

	Financial year 2012
	Balance at beginning of year	Additions during the year(1)	Foreign currency translation adjustments	Sales and disposals	Balance at end of year
			EUR (thousands)
Cost
Land and buildings(2)	89,571	25,692	4,352	—	119,615
Cinema equipment(3)	198,971	21,544	9,523	(2,908)	227,130
Leasehold improvements(2)	134,238	10,518	6,617	(853)	150,520
Computers, furniture and office
equipment	9,687	1,026	247	(233)	10,727
Vehicles	1,820	300	44	(160)	2,004
	434,287	59,080	20,783	(4,154)	509,996
Accumulated depreciation
Land and buildings	23,261	2,836	1,692	—	27,789
Cinema equipment	85,609	15,753	3,727	(2,739)	102,350
Leasehold improvements	52,774	7,465	1,952	(853)	61,338
Computers, furniture and office
equipment	7,855	599	211	(68)	8,597
Vehicles	871	134	19	(88)	936
	170,370	26,787(4)	7,601	(3,748)	201,010
Carrying amount	263,917	32,293	13,182	(406)	308,986(4)

(1) Included under 'Additions during the year—at cost' are borrowing costs amounting to EUR 1,116,000 capitalised using an average rate of 4.7 per cent.

(2) The balance as of 31 December 2012 includes EUR 6,047,000 construction in progress.

(3) The balance as of 31 December 2012 includes EUR 426,000 in respect of cinema equipment not yet operational.

(4) The balance as of 31 December 2012 and the depreciation for the year then ended included EUR 96,913,000 and EUR 1,809,000, respectively, in respect of freehold properties and one related leasehold property owned by members of the Cinema City Holding Group which will not be acquired as part of the proposed Combination.

	Financial year 2011
	Balance at beginning of year	Additions during the year(1)	Acquisitions through business combinations(2)	Foreign currency translation adjustments	Sales and disposals	Balance at end of year
			EUR (thousands)
Cost
Land and buildings(3)	75,334	11,512	7,942	(5,217)	—	89,571
Cinema equipment(4)	154,219	36,801	23,365	(13,804)	(1,610)	198,971
Leasehold improvements(3)	124,314	5,018	15,707	(10,792)	(9)	134,238
Computers, furniture and
office equipment	7,950	497	1,809	(557)	(12)	9,687
Vehicles	1,524	568	41	(99)	(214)	1,820
	363,341	54,396	48,864	(30,469)	(1,845)	434,287
Accumulated depreciation
Land and buildings	21,034	2,320	1,660	(1,753)	—	23,261
Cinema equipment	64,515	13,084	15,510	(6,060)	(1,440)	85,609
Leasehold improvements	39,112	7,665	9,938	(3,937)	(4)	52,774
Computers, furniture and
office equipment	6,154	666	1,502	(461)	(6)	7,855
Vehicles	765	275	6	(43)	(132)	871
	131,580	24,010(5)	28,616	(12,254)	(1,582)	170,370
Carrying amount	231,761	30,386	20,248	(18,215)	(263)	263,917(5)

(1) Included under 'Additions during the year—at cost' are borrowing costs amounting to EUR 815,000 capitalised using an average rate of 4.3 per cent.

(2) See Note 5—Business combinations and acquisition of Non-controlling interests.

(3) The balance as of 31 December 2011 includes EUR 23,046,000 construction in progress.

(4) The balance as of 31 December 2011 includes EUR 134,000 in respect of cinema equipment not yet operational.

(5) The balance as of 31 December 2011 and the depreciation for the year then ended included EUR 70,127,000 and EUR 1,398,000, respectively, in respect of freehold properties and one related leasehold property owned by members of the Cinema City Holding Group which will not be acquired as part of the proposed Combination.

	Financial year 2010
	Balance at beginning of year	Additions during the year(1)	Foreign currency translation adjustments	Sales and disposals	Balance at end of year
			EUR (thousands)
Cost
Land and buildings(2)	63,040	9,431	2,874	(11)	75,334
Cinema equipment(3)	128,915	20,424	5,787	(907)	154,219
Leasehold improvements	108,675	9,333	7,092	(786)	124,314
Computers, furniture and office
equipment	7,409	368	644	(471)	7,950
Vehicles	1,660	398	144	(678)	1,524
	309,699	39,954	16,541	(2,853)	363,341
Accumulated depreciation
Land and buildings	17,860	2,432	745	(3)	21,034
Cinema equipment	52,409	10,025	2,985	(904)	64,515
Leasehold improvements	31,273	6,118	2,505	(784)	39,112
Computers, furniture and office
equipment	5,236	787	537	(406)	6,154
Vehicles	809	233	66	(343)	765
	107,587	19,595(4)	6,838	(2,440)	131,580
Carrying amount	202,112	20,359	9,703	(413)	231,761(4)

(1) Included under 'Additions during the year—at cost' are borrowing costs amounting to EUR 353,000 capitalised using an average rate of 4.5 per cent.

(2) The balance as of 31 December 2010 includes EUR 13,255,000 construction in progress.

(3) The balance as of 31 December 2010 includes EUR 63,000 in respect of cinema equipment not yet operational.

(4) The balance as of 31 December 2010 and the depreciation for the year then ended included EUR 1,765,000 in respect of freehold properties and one related leasehold property which will not be acquired as part of the proposed Combination.

Note 8—Inventories

Composition:	31 December
	2012	2011	2010
		EUR (thousands)
Concession products	1,723	1,760	1,431
Video cassettes and DVDs	128	260	354
IMAX films inventories	—	1,474	1,671
Spare parts	2,693	3,158	1,204
	4,544	6,652	4,660

Note:No impairment of inventory was recorded in all periods presented.

Note 9—Trade accounts receivable

Composition:	31 December
	2012	2011	2010
		EUR (thousands)
Trade accounts receivable	19,780	14,884	13,518
Allowance for doubtful accounts	(80)	(126)	(131)
	19,700	14,758	13,387

Note 10—Other accounts receivable and prepaid expenses

	31 December
Composition:	2012	2011	2010
		EUR (thousands)
Government institutions	1,308	2,599	1,321
Advances to suppliers	779	816	742
Prepaid expenses	3,142	6,264	5,594
Prepaid cinema film and video film distribution costs(1)	1,334	1,450	2,948
Other	1,088	1,456	941
	7,651	12,585	11,546

(1) Stated at cost, in respect of video and cinema films which have not yet been distributed, after being reviewed for recoverability.

Note 11—Cash and cash equivalents

Composition:	31 December
	2012	2011	2010
		EUR (thousands)
Cash at bank and in hand	23,152	9,229	9,259
Short-term deposits	1,128	48	1,268
	24,280	9,277	10,527

Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Cinema City Holding Group, and earn interest at a short-term deposit rate of 2.0 per cent. in 2011 and 2012 (2010: 2.5 per cent.).

Note 12—Short-term bank deposits—collateralised

In 2012, deposits with banks in CEE denominated in euro for a total amount of EUR 3,083,000 (2011: EUR 340,000 and 2010: EUR 329,000) were made to serve as collateral for credit facilities provided to a subsidiary of Cinema City Holding. The interest rates earned on these deposits vary from 0.75 per cent. to 2.8 per cent. on an annual basis.

Note 13—Shareholders' equity

a. Share capital

The authorised share capital of Cinema City Holding consists of 90,000 shares of EUR 1.00 par value each. The number of issued and outstanding ordinary shares as at 31 December 2012 was 18,000.

Ordinary shares carry the right of one vote per share and participation in payments of dividends.

b. Share premium

1. During 2010 as part of the sale of the real estate activities of CCI, CCI invested in cinema activities EUR 66,793,000 which was recognised in the combined financial statements as a capital contribution.
1. During December 2012, the Cinema City Holding Group paid its shareholders an amount of EUR 17,825,000 which was recognised as a capital distribution.

c. Share options

During the years 2006-2012, CCI granted long-term incentive plans to employees and members of the board of managing directors of CCI. The fair value of the options was valued using a Black & Scholes model. The Cinema City Holding Group recorded an expense over the vesting period against an increase in equity. The expense recorded in the years 2010, 2011 and 2012 was EUR 63,000, EUR 16,000 and EUR 489,000, respectively.

Note 14—Accrued employee retirement rights

a. According to the relevant laws, Cinema City Holding's subsidiaries in Europe are required to deposit amounts, on a monthly basis, to retirement and pension funds on behalf of their employees, and therefore have no such liabilities towards them.
b. Local applicable labour laws and agreements require group companies to pay severance pay to dismissed or retiring employees (including those leaving their employment under certain other circumstances). The calculation of the severance pay liability was made in accordance with labour agreements in force and based on salary components that, in management's opinion, create entitlement to severance pay.

The severance plans of the Cinema City Holding Group are funded partially by regular deposits with recognised pension and severance pay funds in the employees' names and by purchase of insurance policies, and are accounted for as if they were a defined contribution plan. The amounts funded as above are netted against the related liabilities and are not reflected in the statement of financial position since they are not under the control and management of the companies.

c. The amounts of the liability for severance pay presented in the statement of financial position reflect that part of the liability not covered by the funds and the insurance policies mentioned in (b) above, as well as the liability that is funded by deposits with recognised central severance pay funds held under the name of Cinema City Holding's subsidiaries.
d. The provision for accrued employee rights upon retirement, net, comprises:

		31 December
Composition:	2012	2011	2010
		EUR (thousands)
Present value of unfunded obligation	3,124	2,670	2,530
Less: Fair value of plan assets	(2,063)	(1,821)	(1,796)
	1,061	849	734

Note 15—Long-term loans

A. Composition:

		31 December
	Interest rates(1)	2012	2011	2010
	%		EUR (thousands)
In CZK	—	—	2,832	3,487
In EUR	EURIBOR 3M +3.5%
	EURIBOR 3M+3.75%	136,632	16,860	9,022
In HUF	—	—	860	1,380
In NIS	Prime + 1.69% and .63%	34,549	—	—
In PLN .	WIBOR + 3.5%	52,013	28,996	10,596
		223,194	49,548	24,485
Less: current portion		(19,117)	(13,054)	(5,419)
		204,077	36,494	19,066

(1) The interest rates shown concern the rates per 31 December 2012.

B. The loans mature as follows:

	31 December
	2012	2011	2010
		EUR (thousands)
First year—current maturities	19,117	13,054	5,419
Second year	18,108	11,274	6,517
Third year	23,878	10,598	4,641
Fourth year	23,615	7,943	4,415
Fifth year	23,606	374	1,259
Sixth year and thereafter	114,870	6,305	2,234
	223,194	49,548	24,485

C. Liens—see Note 18 (2).

At the end of December 2012, the Cinema City Holding Group entered into a new club bank financing agreement with three leading European banks Bank Zachodni WBK S.A., HSBC Bank plc and ING Bank ´ Sl˛aski for a total EUR 210 million (which includes a EUR 70 million revolving credit line). In February 2013 an additional leading European bank, BNP Paribas, joined the club bank financing group. The term of the facility is six years. The facility may be used in EUR and PLN and has been secured mainly by pledges of shares in Cinema City Holding's material subsidiaries, investment certificates and mortgages on its major real estate assets. The financing agreement provides for standard covenants, which Cinema City Holding is obliged to meet from the period that started on 30 June 2013, including those relating to a pre-determined level of leverage (net leverage covenant) and margin. It also includes a change of control clause in case the Greidinger family's holdings in the Existing Cinema City Group decrease below 30 per cent. or another investor obtains control over the Existing Cinema City Group.

The financing agreement was used by Cinema City Holding to finance the loan granted to CCRE, to refinance all other Cinema City Holding Group credit facilities and for other general corporate purposes. The only other Cinema City Holding Group financing that remains in place following the club financing is a local Israeli financing of approximately EUR 40 million.

Early in 2013, the Cinema City Holding Group concluded interest rate swap agreements for an amount of EUR 92.4 million (representing 66 per cent. of the term loan) for a period of two years in accordance with the terms of the facility agreement, on a weighted average fixed rate of 4.06 per cent., while the revolving credit facility and the rest of the term loan attract floating interest rates of EURIBOR + 3.0 per cent. for amounts denominated in EUR and WIBOR + 3.0 per cent. for amounts denominated in PLN.

The interest rate swap is considered to be a hedging instrument for accounting purposes.

Note 16—Short-term borrowings

Composition:		31 December
	Interest rates(1)	2012	2011	2010
	%		EUR (thousands)
Current maturities of long-term loans	See Note 15	19,117	13,054	5,419
Short-term bank credit:
Unlinked (NIS)	3.6%	1,423	10,197	6,675
In PLN .			7,080	—
In EUR		—	—	17
		20,540	30,331	12,111

(1) The interest rates shown concern the rates per 31 December 2012.

Note 17—Other accounts payable

		31 December
Composition:	2012	2011	2010
		EUR (thousands)
Investment creditors	877	2,628	654
Accrued expenses	22,467	12,540	13,340
Deferred income	1,029	1,397	2,642
Government institutions	2,203	1,002	1,760
Advances and income received in advance	298	119	114
Other	1,224	595	476
	28,098	18,281	18,986

Note 18—Commitments, liens and contingent liabilities

(1) Commitments

a. Cinema City Holding and its subsidiaries conduct most of their cinemas and corporate operations on leased premises. Many leases have renewal options. Most of the leases provide for contingent rentals based on the revenues of the underlying cinema, while certain leases contain escalating minimum rental provisions. Most of the leases require the tenant to pay city taxes, insurance, and other costs applicable to the leased premises.

Future minimum lease payments under non-cancellable operating leases from third parties for the years after 31 December 2012 are as follows:

	EUR (thousands)
2013	36,155
2014	34,842
2015	33,735
2016	33,416
2017	30,380
After 2017	92,498
	261,026

Rental expenses for theatres during 2012: EUR 33,623,000 (2011 amounted to EUR 30,442,000; 2010: EUR 23,506,000).

b. As at 31 December 2012, the Cinema City Holding Group has unpaid commitments to invest in the development of properties of approximately EUR 4.1 million (31 December 2011: EUR 15.5 million; 31 December 2010: EUR 2.6 million) and has further commitments to acquire cinema equipment of approximately EUR 100,000 (31 December 2011: EUR 8.7 million; 31 December 2010: EUR 8.6 millon).

c. In consideration for expanding the distribution activities and the supply of distribution product, Cinema City Holding has signed, through its distribution arm in all countries of activity, agreements with third parties for exclusive distribution rights for several films. Under these agreements, Cinema City Holding has committed to pay minimum guaranteed fees in the near future based on a timeline set in each agreement. The payments are subject to the supply of films. The total value of the agreements signed until the end of 2012 is around EUR 10 million (and until the end of 2011 is around EUR 5 million).
d. The Cinema City Holding Group, through its subsidiaries, has signed agreements with third parties in Israel, Poland and Hungary. According to these agreements, the Cinema City Holding Group grants the third parties exclusive broadcasting rights on Israeli, Polish and Hungarian television for specific films. The duration of these rights vary from three to five years for each film sold.
e. Films are typically licensed from film distributors representing film production companies. Film exhibition licences typically specify rental fees based upon a gross receipts formula, which is negotiated on a film-by-film basis in advance of distribution. The fees are generally related to the anticipated performance of the film based on the distributor's experience in other markets, if possible. Under such a formula, the distributor receives a specified percentage of box office receipts, with the percentage declining over the term of the run.
f. Lease contracts of certain cinema equipment of IMAX systems are classified as finance leases. The total of the lease obligation at 31 December 2012 amounted to EUR 929,000 (31 December 2011: EUR 1,080,000; 31 December 2010: EUR 1,215,000), and is classified as 'Other long-term payables'. The capital lease is bearing 6.5 per cent. annual interest. The lease term expires on 31 December 2021, after which the ownership will be transferred to Cinema City Holding.

(2) Liens

a. The Cinema City Holding Group entered into a loan facility agreement with Bank Leumi. In order to secure the Cinema City Holding Group's liabilities for these bank credits and loans, the Cinema City Holding Group provided the bank with the following: (i) a registered first degree fixed lien on IT 2004's (an Israeli subsidiary of CCI) unissued share capital and goodwill; (ii) a first degree floating lien on IT 2004's assets, including insurance benefits in respect of the assets and rights of any kind which ITIT has or would have in the future; (iii) an undertaking that the assets of IT 2004 would not be pledged and the lien cannot be transferred without the agreement of the bank; (iv) a guarantee of the debt of IT 2004; and (v) an undertaking that certain financial covenants would be fulfilled and maintained. Cinema City Holding complied with the financial covenants during the years 2012 and 2011, as at 31 December 2012 and as at 31 December 2011.

During FY 2012, IT 2004 signed an agreement with Bank Leumi BM for a new funding facility for a total amount of NIS 170 million (EUR 34.3 million). Under the facility agreement, the Cinema City Holding Group provided a guarantee while IT 2004 is subject to certain covenants which it is required to meet as of the balance sheet date in order to secure that loan, the Cinema City Holding Group provided to the bank new liens regarding rights in land under lease and rent agreements relating to its project in Rishon LeZion, and the outstanding share capital in IT 2004 was pledged in favour of the bank by CCI.

In December 2012, Bank Leumi released the pledge over the outstanding share capital in IT 2004 owned by Cinema City Holding, and the guarantee of CCI in respect of IT 2004's obligations was terminated.

On 25 February 2013, IT 2004 entered into a credit facility agreement with Bank Hapoalim, in an amount of up to NIS 190 million, which was used to refinance the outstanding debt to Bank Leumi. IT 2004 provided Bank Hapoalim a registered first degree fixed lien on IT 2004's unissued share capital and goodwill, liens regarding rights in land under lease and rent agreements relating to its project in Rishon LeZion, and a floating lien on IT 2004's current and future assets. IT 2004 is subject to certain covenants which it meets as of the balance sheet date.

In addition, IT 2004 pledged a cash deposit to secure outstanding bank guarantees issued by Bank Leumi.

b. In order to secure an outstanding loan from a Bulgarian bank of approximately EUR 1.6 million (2011: EUR 2 million; 2010: EUR 2.4 million) a subsidiary company has provided to the bank several commitments such as a going concern pledge agreement, trademark pledge agreement, sponsor support agreement and receivables pledge agreement.

c. In connection with the sale of the real estate by CCI in Bulgaria to Israel Theatres Ltd. in 2010, the Cinema City Holding Group has agreed to refrain from borrowing additional funds if such borrowings would result in Israel Theatres Ltd. on a fully consolidated basis (together with the Cinema City Holding Group) breaching agreed-upon EBITDA to debt ratios.

As part of the Palace Cinemas acquisition in January 2011 as described in Note 5, Cinema City Holding assumed EUR 6.6 million in existing debt of the acquired companies including existing securities such as pledge over properties, share capital and receivables. The Slovakian subsidiary gave several financial covenants which such company is required to meet as of the balance sheet date.

d. In December 2012, subsidiaries of Cinema City Holding entered into a financing agreement with a club of European banks amounting to EUR 210 million. In order to secure the facility Cinema City Holding provided the club banks with the following: (i) pledges over the shares of material subsidiaries; (ii) pledges over the assets of material subsidiaries, other than Bulgaria assets; (iii) pledges over the main operating bank accounts of cinemas in Poland, Czech Republic and Hungary; (iv) guarantees from material subsidiaries; and (v) an undertaking from Cinema City Holding to maintain 80 per cent. coverage of its guarantees.

(3) Contingent liabilities

From time to time, the Cinema City Holding Group is involved in routine litigation and proceedings during the normal course of business. As at 31 December 2012, the Cinema City Holding Group was not involved in any litigation or proceedings except for the following:

Cinema City Poland Sp. z.o.o. (CCP), a wholly-owned subsidiary of Cinema City Holding, is the defendant in a claim brought by Zwi˛azek Autorow I Kompozytorow (Zaiks), a Polish collection society representing screenplay authors and authors of other literary and musical works used in audio-visual works that are exhibited in Poland. Cinema City Holding understands that Zaiks has also brought similar claims against many other major cinema exhibitors and cable TV operators in Poland, some of which may have settled with Zaiks. The claimant seeks royalties in the amount of approximately EUR 2 million plus interest for the period through June 2007 for the use of works by certain of its members in films exhibited in Poland. Recently, Zaiks filed a motion with the court to settle with CCP for the period through 2009. Although no claims have been raised by Zaiks for the period after June 2007, Zaiks' motion to the court for settlement for the period through 2009 makes it more likely that Zaiks will make a claim for additional amounts for the period after 2007. Cinema City Holding continues to accrue amounts in connection with this matter. Based on legal advice, Cinema City Holding's management does not expect the outcome of the claim (in excess of the accrual) to have a material effect on the Cinema City Holding Group's financial position.

Note 19—Operating costs

	Financial year
	2012	2011	2010
	EUR (thousands)
Costs of theatre sales	187,690	182,251	153,090
Distribution costs	18,404	17,995	15,598
Depreciation and amortisation	30,555	25,417	19,872
Total cinema-related operating costs	236,649	225,663	188,560

Note 20—Financial income/expenses

a. Financial income

	Financial year
	2012	2011	2010
	EUR (thousands)
Interest income	1,165	574	256
Currency exchange differences	965	60	427
Total financial income	2,130	634	683

b. Financial expenses

	Financial year
	2012	2011	2010
	EUR (thousands)
Interest expenses incurred	(6,695)	(4,042)	(2,638)
Interest cost capitalised	1,116	815	353
Currency exchange differences	(433)	(847)	(572)
Total financial expenses	(6,012)	(4,074)	(2,857)

Note 21—Taxation: deferred tax assets, deferred tax liabilities and income tax expense

I. Tax laws applicable to the Cinema City Holding Group

1. Results of operations for tax purposes of Cinema City Holding and its Dutch subsidiaries are computed in accordance with Dutch tax legislation.
1. Tax rates applicable to Cinema City Holding and its subsidiaries are as follows:

The subsidiary	Tax rate
The Netherlands .	25% – (2011 and 2010 – 25.5%)
Hungary .	10% – (2011 and 2010 – 10%)
Czech Republic	23% – (2011 and 2010 – 19%)
Poland	19% – (2011 and 2010 – 19%)
Israel *	25% – (2011 – 24% 2010 – 25%)
Bulgaria .	10% – (2011 and 2010 – 10%)
Romania	16% – (2011 and 2010 – 16%)
Slovakia .	23% – (2011 and 2010 – 19%)
Cyprus .	10% – (2011 and 2010 – 10%)

* During the third quarter of 2013, the tax rate in Israel increased to 26.5 per cent. with effective date of 1 January 2014. The change did not have a material effect on the Cinema City Holding Group's combined financial statement.

II. Deferred income taxes

The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences can be offset or become deductible. Cinema City Holding's management believes that all of the deferred income tax assets are realisable and therefore has not provided for valuation allowance.

Deferred income taxes (assets and liabilities) are in respect of the following items:

Deferred income tax included in assets:

	31 December
	2012	2011	2010
	EUR (thousands)
Accrued employee benefits	249	211	168
Fixed assets	274	(148)	1
Operating tax losses carry-forward	2,435	1,866	1,835
Other	6	171	26
	2,964	2,100	2,030

Deferred income tax included in liabilities:

	31 December
	2012	2011	2010
	EUR (thousands)
Accrued employee benefits	(185)	(161)	(121)
Fixed assets	4,850	3,529	7,126
Operating tax losses carry-forward	—	—	(242)
Long-term liabilities	—	—	(586)
Other	22	23	228
	4,687	3,391	6,405

The unused tax losses carried forward for which no deferred tax asset is recognised in the Combined Consolidated Statement of Financial Position as at 31 December 2012 amount to EUR 26,687,000 (as at 31 December 2011: EUR 18,645,000, as at 31 December 2010: EUR 10,169,000).

Temporary differences related to fixed assets for which no deferred tax asset is recognised in the Combined Consolidated Statement of the Financial Position as at 31 December 2012 amount to EUR 23,456,000 (as at 31 December 2011: EUR 9,433,000; as at 31 December 2010: nil).

III. Income tax expense in the income statement

		Financial year
Composition:	2012	2011	2010
		EUR (thousands)
Current taxes	1,486	1,996	2,748
Deferred taxes	462	(2,820)	1,319
In respect of previous years	(170)	538	(29)
Income tax (benefit)/expense	1,778	(286)	4,038

IV. Income tax recognised in other comprehensive income

	Financial year 2012
	Before tax	Tax benefit	Net of tax
	EUR (thousands)
Foreign exchange translation differences	6,851	—	6,851
Cash flow hedges, net	(474)	23	(451)
Total other comprehensive income	6,377	23	6,400

		Financial year 2011
	Before tax	Tax expense	Net of tax
	EUR (thousands)
Foreign exchange translation differences	(13,540)	—	(13,540)
Cash flow hedges, net	384	(6)	378
Total other comprehensive income	(13,156)	(6)	(13,162)

	Financial year 2010
	Before tax	Tax benefit	Net of tax
	EUR (thousands)
Foreign exchange translation differences	6,280	—	6,280
Cash flow hedges, net	(1,484)	283	(1,201)
Total other comprehensive income	4,796	283	5,079

V. Tax reconciliation

The difference between the amount of tax calculated on income before taxes at the regular tax rate in The Netherlands and the tax expenses included in the financial statements is explained as follows:

	Financial year
	2012	2011	2010
		EUR (thousands)
Tax calculated at the regular rate (2011 and 2012: 25%; 2010:
25.5%)	6,360	5,272	7,917
Adjustment for reduced tax rate in foreign subsidiaries	(1,862)	(1,758)	(1,555)
Effect of reduction in tax rates on deferred income taxes* .	—	(2,030)	(21)
Non-deductible expenses	137	141	211
Recognition of previously unrecognised tax losses	(982)	(122)	(1,461)
Income exempt from taxes*	(2,247)	(3,373)	(715)
Taxes in respect of previous years	(170)	538	(29)
Other differences	542	1,046	(309)
Total recognised income tax (benefit)/expense	1,778	(286)	4,038

* Towards the end of the third quarter of 2011, Cinema City Holding conducted a process of reorganising its Polish operations, which were regrouped within a closed investment fund registered in Cyprus. The reorganisation in Poland is expected to bring organisational benefits and to enable tax optimisation when managing the operational companies starting from the fourth quarter of 2011.

Note 22—Related party transactions

Cinema City Holding is wholly-owned subsidiary of CCI. CCI is controlled by ITIT, incorporated in Israel, which owns 53.89 per cent. of the outstanding shares (2011 and 2010: 53.89 per cent.) of CCI. The remaining 46.11 per cent. are held by the public and traded on the WSE. The ultimate parent of the Existing Cinema City Group is Israel Theatres Ltd., incorporated in Israel. The ultimate controlling parties are Moshe Greidinger and Israel Greidinger, both Managing Directors of CCI.

Transactions with related parties

a. Income/(expenses):

	Financial year
	2012	2011	2010
	EUR (thousands)
Rental fees	(573)	(651)	(716)
Management services	406	397	386

All outstanding balances with these related parties are priced on an arm's length basis. None of the balances is secured. As of the beginning of 2013, none of the above-mentioned management services is provided any longer.

b. During 2012, Israel Theatres Ltd. (the parent company of ITIT) leased real estate properties on which two (in 2011 and 2010—three) of Cinema City Holding's theatres are located. The annual lease payments for the above properties aggregated to EUR 244,000 (denominated in NIS and linked to the Israeli CPI Index).
c. Pursuant to the management services agreement between Cinema City Holding and Israel Theatres Ltd., Cinema City Holding provided Israel Theatres Ltd. for an indefinite period with certain

management services. Management services include office and accounting services through to providing Israel Theatres Ltd. with senior personnel and administration of Israel Theatres Ltd.'s business. The management services agreement is for a fixed annual sum of EUR 406,000 (denominated in NIS and linked to the Israeli CPI Index). The agreement was terminated at the beginning of 2013.

d. Forum Film Ltd. leases offices and storage space in Herzelia from Rav Chen Real Estate Ltd. for a consideration of EUR 9,000 (NIS 44,000) per month. Rav Chen Real Estate Ltd. leases offices in Herzelia to IT 2004 for a consideration of EUR 11,000 (NIS 53,000) per month.
e. In December 2003, employment agreements with Moshe Greidinger, Israel Greidinger and Amos Weltsch ('Managing Directors'), signed originally with ITIT in 1998, were assigned to CCI. The fulfilment of Cinema City Holding's obligation under the agreements are performed by CCI, or by its Israeli subsidiaries.

In accordance with the said agreement, the aggregate gross monthly remuneration for the Managing Directors amounts to EUR 42,000 per month (denominated in NIS and linked to the Israeli Consumer Price Index), which, together with related employee benefits, will amount to EUR 68,000 per month.

In addition, the Managing Directors are entitled to an annual bonus aggregating to 6.65 per cent. of CCI's consolidated profits before tax for any fiscal year. The above-mentioned Managing Directors undertook to be employed by CCI for an indefinite period, with a six month notice of termination, and to refrain from competing with the Cinema City Holding Group's business for a period of 12 months following termination of their employment with Cinema City Holding.

On 24 November 2006, the General Meeting of Shareholders of CCI approved a new remuneration policy which confirmed the entitlement of the members of the Management Board to receive a monthly base salary and annual participation in a cash bonus pool designated for the members of the Management Board equal to 7 per cent. of CCI's pre-tax profit before the bonus. In addition, under the same remuneration policy, each member of the Management Board is entitled to a car, contribution to a severance fund as well as to a statutory provident fund, a travel allowance and reimbursement of reasonable business expenses.

Also on 26 November 2006, the General Meeting of Shareholders of CCI approved a long-term incentive plan (the Plan). The persons eligible for participation in the Plan are the employees of the Existing Cinema City Group, including the members of the Management Board.

Under the Plan, both option rights to acquire shares of CCI and cash bonuses may be granted to the participants. In April 2012, Mr Amos Weltsch, member of the Management Board of CCI, was granted 650,000 options as a part of his remuneration package, each entitling him to subscribe for one share in CCI at the issue price of PLN 29 per share.

The options granted to Mr Weltsch will vest in 47 equal monthly tranches of 13,542 options, each on the last day of each month in the period from 30 April 2012 to 29 February 2016, with an additional tranche of 13,526 options vesting on 31 March 2016. Mr Weltsch may exercise the options vested to him in each of the tranches on multiple occasions within two years from the date the given tranche of share options was vested. As part of the plan, the annual bonus was decreased to 6.65 per cent.

The Managing Directors of the Cinema City Holding Group received remuneration totalling EUR 3,118,000 in 2012 (2011: EUR 2,388,000; 2010: EUR 3,338,000). The members of the Supervisory Board received fees totalling EUR 135,000 (2011: EUR 128,000; 2010: EUR 131,000). The total remuneration is included in general and administrative expenses. The members of the Management and Supervisory Board of CCI did not receive any option rights to acquire shares in Cinema City Holding or of CCI during the financial year 2012 except as described above.

The remuneration for the Managing Directors is divided between the Managing Directors as follows:

	Financial year
	2012	2011	2010
		EUR (thousands)
Mr. Moshe Greidinger, General director:
Salary and other short-term benefits	283	282	261
Post-employment benefits	16	15	15
Management bonus	954	794	1,269
	1,253	1,091	1,545
Mr. Amos Weltsch ,Operational director:
Salary and other short-term benefits	245	235	263
Share based payments	489	—	—
Post-employment benefits	13	13	13
Management bonus	382	397	635
	1,129	645	911
Mr. Israel Greidinger, Financial director:
Salary and other short-term benefits	246	242	234
Post-employment benefits	13	13	13
Management bonus	477	397	635
	736	652	882
Total	3,118	2,388	3,338

Total compensation to key management personnel amounts to EUR 3,253,000 (2011: EUR 2,516,000; 2010: EUR 3,469,000), EUR 3,211,000 relates to short-term employee benefits (2011: EUR 2,475,000; 2010: EUR 3,428,000), EUR 42,000 to post-employment benefits (2011 and 2010: EUR 41,000).

f. The Greidinger family has indirect control of the Existing Cinema City Group majority shareholder, ITIT, through its majority shareholding in Israel Theatres Ltd. More than 88 per cent. of the shares in Israel Theatres Ltd. are held indirectly by Moshe Greidinger, Israel Greidinger and other members of the Greidinger family.
h. Israel Theatres Ltd., ITIT and its directors and principal officers undertook not to compete, whether directly or indirectly, with Cinema City Holding's business in the film exhibition, distribution, video rental and real-estate fields. The length of this undertaking is for as long as they are directors or officers in either of the companies, or beneficially own a controlling interest in Cinema City Holding. The agreement specifically states that Israel Theatres Ltd. and ITIT may not engage in the development, sale or lease of property for theatrical or video rental use without the prior written consent of Cinema City Holding, unless it is to be used by Cinema City Holding.
i. During the second quarter of 2012, Cinema City Holding completed its acquisition of the non-controlling interests in Norma Film Ltd. (Forum Film Israel).

As the acquisition of the non-controlling interests qualifies as a transaction with a related party— I.M. Greidinger Ltd., being controlled by major (indirect) shareholders and Managing Directors of Cinema City Holding—and also qualifies as a transaction constituting a conflict of interest with the Management Board, the Supervisory Board of CCI formed a special committee of independent Supervisory Directors of CCI to review the proposed terms of the transaction. In order to ensure that the transaction is at arm's length, and to ensure compliance with best practice provisions of the Dutch Governance Code in respect of conflicts of interest, this committee reviewed and approved the transaction and where necessary represented Cinema City Holding in the transaction.

j. The long-term loan to related party was granted mainly to CCRE. The loan granted to CCRE together with any interest incurred on the loan will be repaid not early than 31 December 2020. The loan is denominated in EUR and bears interest at a rate of 3 month EURIBOR + margin of 3.75 per cent. per annum.

Note 23—Financial instruments and financial risk management

The Cinema City Holding Group's principal financial instruments, other than derivatives and cash and cash equivalents, comprise bank loans and short-term bank credits. The main purpose of these financial instruments is to raise finance for the Cinema City Holding Group's operations. The Cinema City Holding Group has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations.

The main risks arising from the Cinema City Holding Group's financial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Cinema City Holding Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(1) Price risk

The Cinema City Holding Group's exposure to marketable securities price risk is not significant.

(2) Interest rate risk

The Cinema City Holding Group closed a new club bank financing agreement in December 2012, a six-year facility agreement consisting of a EUR 140 million term loan (split into EUR 102 million (denominated in EUR) and EUR 38 million (denominated in PLN)) and additionally a EUR 70 million revolving credit facility (split into EUR 51 million (denominated in EUR) and EUR 19 million (denominated in PLN)). In early 2013, Cinema City Holding concluded interest rate swap agreements for an amount of EUR 92.4 million (representing 66 per cent. of the term loan) for a period of two years in accordance with the terms of the facility agreement, on a weighted average fixed rate of 4.06 per cent. while the revolving credit facility and the rest of the term loan attract floating interest rates of EURIBOR + 3.5 per cent. for amounts denominated in euro and WIBOR + 3.5 per cent. for amounts denominated in PLN.

In addition, Cinema City Finance granted a loan to related party in an amount of EUR 113 million as described in note 22(J) above. This loan bears interest at a rate of 3 month EURIBOR + margin of 3.75 per cent. per annum.

(3) Foreign exchange risk

The Cinema City Holding Group incurs foreign currency risk on future commercial transactions and recognised assets and liabilities that are denominated in a currency other than the relevant local functional currencies. The Cinema City Holding Group monitors the exposure to currencies other than the relevant functional currency at an entity-by-entity level. From time to time, the Cinema City Holding Group entered into forward exchange contracts in order to hedge some of its US dollar and euro expenses. The foreign exchange risk for all periods presented is immaterial.

Credit risk

Financial instruments that potentially subject the Cinema City Holding Group to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments and receivables. The Cinema City Holding Group places its cash and cash equivalents and short-term investments in financial institutions with high credit ratings. Cinema City Holding's management does not expect any counterparty to fail to meet its obligations. Concentrations of credit risk with respect to trade receivables are relatively low due to the relatively large number of clients comprising the Cinema City Holding Group's clients list. The carrying amount of the financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	31 December
	2012	2011	2010
		EUR (thousands)
Trade receivables	19,700	14,758	13,387
Receivables from related parties	—	1,040	480
Other receivables	2,396	4,055	2,262
Long-term loan to related party	112,540	—	—
Non-marketable securities held for sale	7	24	90
Cash and cash equivalents*	18,283	7,049	9,261
Short-term bank deposits	3,083	340	329
Foreign currency exchange contracts	—	644	90
	156,009	27,910	25,899

* The rest of 'Cash and cash equivalents' is cash at hand.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:

	31 December
	2012	2011	2010
	EUR (thousands)
Trade receivables:
Counterparty without/with unknown external credit rating
Group 1*	17,022	12,715	11,472
Group 2**	2,586	1,667	1,810
Group 3***	92	376	105
Total Trade receivables	19,700	14,758	13,387

* Group 1—new receivables (less than six months).

** Group 2—existing receivables (more than six months) with no defaults in the past.

*** Group 3—existing receivables (more than six months) with some defaults in the past. All defaults were fully recovered.

Liquidity risk

The Cinema City Holding Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Cinema City Holding Group's reputation.

The table below analyses the Cinema City Holding Group's financial liabilities and net-settled derivative financial liabilities based on the remaining period at the reporting to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

	As at 31 December 2012
	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	Over 5 years
	EUR (thousands)
Borrowings	19,117	18,108	71,099	114,870
Other long-term payables	113	113	340	493
Current liabilities*	48,005	17	3	34

	As at 31 December 2011
	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	Over 5 years
		EUR (thousands)
Borrowings	13,054	11,274	18,915	6,305
Other long-term payables .	146	176	438	499
Current liabilities*	39,157	4	4	5
		As at 31 December 2010
	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	Over 5 years
		EUR (thousands)
Borrowings	5,419	6,517	10,315	2,234

Other long-term payables .	120	120	1,335	2,942

* Excluding short-term borrowings, deferred income and income received in advance.

Derivative financial instruments

As at 31 December 2011, Cinema City Holding had hedged some of its US dollar and euro expenses through 2012 and 2011 in respect of its Polish, Hungarian and Czech theatre operations, against the PLN, the Hungarian forint and the Czech crown, respectively. As at 31 December 2012, Cinema City Holding had not entered into any new forward foreign exchange contract.

Fair values

The carrying amount of the Cinema City Holding Group's financial assets and liabilities approximate their fair value.

Note 24—Capital management

When managing capital, it is the Cinema City Holding Group's objective to safeguard the Cinema City Holding Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Consistent with others in the industry, the Cinema City Holding Group monitors capital on the basis of the gearing ratio and leverage. No external capital requirements existed as at 31 December 2012 and 31 December 2011 or 31 December 2010.

The gearing ratios and leverage at 31 December 2012, 2011 and 2010 were as follows:

	2012	2011	2010
		EUR (thousands)
Bank debt:
Long-term borrowings, including current portion	223,194	49,548	24,485
Short-term bank credit	1,423	17,277	6,692
Total debt	224,617	66,825	31,177
Long-term loan granted to related party	(112,540)	—	—
Cash and cash equivalents	(24,280)	(9,277)	(10,527)
Net debt	87,797	57,548	20,650
Construction in progress (see Note 7)	(6,047)	(23,046)	(3,406)
Cinema equipment not operated yet (see Note 7)	(426)	(134)	(63)
Net debt financing assets in operation	81,324	34,368	17,181
Total equity	223,011	214,161	206,588
Total capital employed	304,335	248,529	223,769
Gearing ratio	39.4%	26.9%	10.0%
Leverage	28.8%	23.2%	9.2%

Note 25—Linkage terms of monetary items

	31 December 2012
	In or linked to EUR	In or linked to PLN	In or linked to foreign currencies	Total
			EUR (thousands)
Assets
Cash and cash equivalents	3,531	9,164	11,585	24,280
Short-term bank deposits—collateralised	3,083	—	—	3,083
Trade accounts receivable	739	7,407	11,554	19,700
Income tax receivable	112	—	203	315
Other accounts receivable	1,061	625	710	2,396
Long-term loan to related party	112,540			112,540
Marketable securities	—	—	7	7
	121,066	17,196	24,059	162,321
Liabilities
Short-term bank credit	—	—	1,423	1,423
Trade accounts payable	1,301	5,940	11,700	18,942
Employee and payroll accruals	89	282	2,249	2,620
Other accounts payable (including income tax
payables)	2,413	8,714	17,001	28,127
Long-term loans (including current portion)	136,632	52,013	34,549	223,194
Accrued employee rights upon retirement	—	—	1,061	1,061
	140,435	66,949	67,983	275,367

	31 December 2011
	In or linked to EUR	In or linked to PLN	In or linked to foreign currencies	Total
			EUR (thousands)
Assets
Cash and cash equivalents	2,458	2,784	4,035	9,277
Short-term bank deposits—collateralised .	340	—	—	340
Trade accounts receivable	1,376	5,366	8,016	14,758
Income tax receivable	247	—	357	604
Other accounts receivable	918	979	2,158	4,055
Receivable from related parties	100	—	940	1,040
Marketable securities .	—	—	24	24
Foreign currency exchange contracts .	—	159	485	644
	5,439	9,288	16,015	30,742
Liabilities
Short-term bank credit	—	7,080	10,197	17,277
Trade accounts payable	2,601	6,698	8,115	17,414
Employee and payroll accruals.	81	187	2,133	2,401
Other accounts payable (including income tax
payables)	1,078	6,247	11,820	19,145
Payable to related parties .	—	—	210	210
Long-term loans (including current portion)	16,860	28,996	3,692	49,548
Accrued employee rights upon retirement .	—	—	849	849
	20,620	49,208	37,016	106,844

	31 December 2010
	In or linked to EUR	In or linked to PLN	In or linked to foreign currencies	Total
		EUR (thousands)
Assets
Cash and cash equivalents	1,782	3,213	5,532	10,527
Short-term bank deposits—collateralised .	329	—	—	329
Trade accounts receivable	54	6,359	6,974	13,387
Income tax receivable	—	—	1,061	1,061
Other accounts receivable and prepaid expenses .	537	327	1,398	2,262
Receivable from related parties	—	—	480	480
Marketable securities .	109	—	81	190
Foreign currency exchange contracts .	—	90	—	90
	2,811	9,989	15,526	28,326
Liabilities
Short-term bank credit	17	—	6,675	6,692
Trade accounts payable	304	3,449	5,949	9,702
Employee and payroll accruals.	—	214	1,822	2,036
Other accounts payable	1,662	9,049	6,669	17,380
Payable to related parties .	—	—	524	524
Long-term loans (including current portion)	9,022	10,596	4,867	24,485
Accrued employee rights upon retirement .	—	—	734	734
	11,005	23,308	27,240	61,553

Note 26—Segment reporting

The Cinema City Holding Group's operations in Israel and CEE are organised under the reportable segments, as shown below, which are the Cinema City Holding Group's major business segments. The strategic business units offer different products and services because they require different processes and marketing strategies. The following summarises the operations in each of the Cinema City Holding Group's reportable segments:

Cinema operations.
Distribution—Distribution of films.

Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements. However, finance costs, finance income and income taxes are managed on a group basis and are not allocated to operating segments.

Inter-segment pricing is determined on an arm's length basis.

Business segments

	Financial year 2012
	Cinema operations	Distribution	Eliminations	Consolidated
			EUR (thousands)
Revenues
External sales	255,722	24,931	—	280,653
Inter-segment sales	—	18,428	(18,428)	—
Total revenues	255,722	43,359	(18,428)	280,653
Results
Segment result before depreciation,
amortisation and impairment	55,387	4,824	—	60,211
Depreciation, amortisation and impairment	27,731	2,824	—	30,555
Segment result	27,656	2,000	—	29,656
Financial income				2,130
Financial expenses				(6,012)
Loss on disposals				(334)
Income tax expenses				(1,778)
Net income				23,662

		31 December 2012
	Cinema operations	Distribution	Unallocated	Consolidated
	EUR (thousands)
Segment assets	370,858	19,089	115,504	505,451
Segment liabilities	40,756	12,380	229,304	282,440
Capital expenditure and acquisitions	59,979	7,734	—	67,713

31 December 2011
Cinema operations	Distribution	Eliminations	Consolidated


245,687	21,772	—	267,459
50	13,173	(13,223)	—
245,737	34,945	(13,223)	267,459


			50,146
24,266	1,151	—	25,417
23,903	826	—	24,729
			634
			(4,074)
			(201)
			286
			21,374
	48,169	1,977	EUR (thousands) —

	31 December 2011
	Cinema operations	Distribution	Unallocated	Consolidated
		EUR (thousands)
Segment assets	313,232	9,768	2,100	325,100
Segment liabilities	38,509	4,285	70,216	113,010
Capital expenditure	54,441	4,020	—	58,461
		Financial year 2010
	Cinema operations	Distribution	Eliminations	Consolidated
		EUR (thousands)
Revenues
External sales	217,558	16,991	—	234,549
Inter-segment sales	52	12,247	(12,299)	—
Total revenues	217,610	29,238	(12,299)	234,549
Results
Segment result before depreciation,
amortisation and impairment	53,041	83	—	53,124
Depreciation, amortisation and impairment	19,639	178	—	19,817
Segment result	33,402	(95)		33,307
Financial income .				683
Financial expenses				(2,857)
Loss on disposals				(86)
Income tax expense				(4,038)
Net income				27,009

	Financial year 2010
	Cinema operations	Distribution	Unallocated	Consolidated
	EUR (thousands)
Segment assets	268,735	6,097	2,030	276,862
Segment liabilities	30,573	7,076	37,582	75,231
Capital expenditure	44,458	361	—	44,819

In addition to the information on business segments based on the structure of the Cinema City Holding Group, the figures below present information for geographical segments. Determination of geographical segments is based on location of assets and is identical to customer location.

	31 December 2012
	Poland	Israel	Hungary	Other	Unallocated	Consolidated
			EUR (thousands)
Revenues
External sales	109,512	54,016	41,524	75,601	—	280,653
Non-current assets
Segment assets	129,319	85,098	26,217	202,273	2,964	445,871
Capital expenditure and
acquisitions	13,423	35,800	4,200	14,290	—	67,713

		31 December 2011
	Poland	Israel	Hungary	Other	Unallocated	Consolidated
			EUR (thousands)
Revenues
External sales	115,451	46,766	38,709	66,533	—	267,459
Non-current assets
Segment assets	115,793	53,461	23,464	84,358	2,100	279,176
Capital expenditure	9,957	17,190	11,265	20,049	—	58,461
			31 December 2010
	Poland	Israel	Hungary	Other	Unallocated	Consolidated
			EUR (thousands)
Revenues
External sales	119,139	48,497	27,091	39,822	—	234,549
Non-current assets
Segment assets	130,040	41,839	13,197	47,486	2,030	234,592
Capital expenditure	11,362	13,988	2,111	17,358	—	44,819

Note 27—Personnel

Personnel costs are specified as follows:

	31 December
	2012	2011	2010
	EUR (thousands)
Salaries and wages	26,468	25,200	19,614
Pension costs	1,597	1,611	1,215
Other social charges	3,758	4,149	2,914
Share-based payments under the share option plan	489	16	63
Total personnel costs	32,312	30,976	23,806

For 2012, 2011 and 2010, the pension costs comprised defined contribution expenses only.

The increase in the personnel costs was mainly due to the increase of employees due to the purchase of Palace Cinemas and new cinemas opened in 2012, 2011 and 2010.

Note 28—Subsequent events

On 1 September 2013, the Existing Cinema City Group received Mr. Amos Weltsch's resignation, effective as of that date, from the senior management positions he held in the Existing Cinema City Group. Following 33 successful years in the Existing Cinema City Group, Mr Weltsch decided to step down from his role in order to pursue personal projects. Mr. Weltsch will continue to be involved with the Existing Cinema City Group in various projects and areas as a special adviser until the end of 2014. In addition, Mr Weltsch signed a non-competition agreement for a period until the end of 2017.

Note 29—Details of corporations in the Cinema City Holding Group

	31 December 2012
	Cinema City Holding's (in)direct voting rights	Cinema City Holding's equity share	Combined	Country of incorporation
	%	%	%	%
I.T. International Theatres 2004 Ltd.	100%	100%	Full	(6)
I.T. Magyar Cinema Moziuzemelt ¨ o ˝ es´
´ Filmforgalmazo Kft	100%	100%	Full	(2)
Cinema City Finance B.V.	100%	100%	Full	(1)
Cinema City Poland CC Sp.Zoo S.K.A	100%	100%	Full	(4)
Star Sp.Zoo	100%	100%	Full	(4)
Stars Sp.Zoo	100%	100%	Full	(4)
Janki properties Poland Sp. Z.o.o. IT Poland Development 2003–CC Sp. Z.o.o.	100%	100%	Full	(4)
sp.j.	100%	100%	Full	(4)
Cinema City Czech S.R.O	100%	100%	Full	(3)
Forum Film Czech s.r.o.	100%	100%	Full	(3)
New Age Media CC Sp. Z.o.o. sp.j.	100%	100%	Full	(4)
Forum Film Poland CC Sp. Z.o.o. sp.j.	100%	100%	Full	(4)
All Job Poland CC Sp. Z.o.o. sp.j.	100%	100%	Full	(4)
Cinema City Poland Sp. Z.o.o. CC sp.k.	100%	100%	Full	(4)
Forum 40 Fundus Inwestycyjny Zamkniety	100%	100%	Full	(4)
Norma Film Ltd.	100%	100%	Full	(6)
Forum Film Ltd.	100%	100%	Full	(6)
Cinema Theatres Ltd.	100%	100%	Full	(6)
I.T. Planet Advertising Ltd.	100%	100%	Full	(6)
Mabat Ltd.	100%	100%	Full	(6)
Cinema-Phone Ltd.	100%	100%	Full	(6)
Cinema City Plus Ltd.	100%	100%	Full	(6)
Cinema City Bulgaria EOOD	100%	100%	Full	(5)
Forum Film Bulgaria EOOD	100%	100%	Full	(5)
Forum Home Entertainment Czech s.r.o	100%	100%	Full	(3)
New Age Cinema Kft	100%	100%	Full	(2)
Forum Hungary Film Distribution Kft	100%	100%	Full	(2)
Cinema City Romania SRL	100%	100%	Full	(7)
Forum Film Romania SRL	100%	100%	Full	(7)
New Age Media Romania SRL	100%	100%	Full	(7)
Palace Cinemas Kft	100%	100%	Full	(2)
Cinema City Slovakia s.r.o	100%	100%	Full	(8)
Forum Film Slovakia s.r.o.	100%	100%	Full	(8)
Seracus Ltd.	100%	100%	Full	(9)

(1) Dutch corporation.

(2) Hungarian corporation.

(3) Czech corporation.
(4) Polish corporation.

(5) Bulgarian corporation.

(6) Israeli corporation.

(7) Romanian corporation.

(8) Slovakian corporation.

(9) Cypriot corporation.

	31 December 2011
	Cinema City Holding's (in)direct voting rights	Cinema City Holding's equity share	Combined	Country of incorporation
	%	%	%	%
I.T. International Theatres 2004 Ltd. I.T. Magyar Cinema Moziuzemelt ¨ o ˝ es´	100%	100%	Full	(6)
´ Filmforgalmazo Kft	100%	100%	Full	(2)
Cinema City Finance B.V.	100%	100%	Full	(1)
Cinema City Poland CC Sp.Zoo sp.j.	100%	100%	Full	(4)
Star Sp.Zoo	100%	100%	Full	(4)
Stars Sp.Zoo	100%	100%	Full	(4)
Janki properties Poland Sp.Zoo	100%	100%	Full	(4)
IT Poland Development 2003–CC Sp.Zoo. sp.j.	100%	100%	Full	(4)
Cinema City Czech S.R.O	100%	100%	Full	(3)
Forum Film Czech s.r.o	100%	100%	Full	(3)
New Age Media CC Sp.Zoo sp.j.	100%	100%	Full	(4)
Forum Film Poland CC Sp.Zoo sp.j.	100%	100%	Full	(4)
All Job Poland CC Sp. Zoo sp.j.	100%	100%	Full	(4)
Cinema City Poland Sp.Zoo CC sp.k.	100%	100%	Full	(4)
Forum 40 Fundus Inwestycyjny Zamkniety	100%	100%	Full	(4)
Norma Film Ltd. .	60%	50%	Full	(6)
Forum Film Ltd. .	60%	50%	Full	(6)
Cinema Theatres Ltd. .	60%	30%	Full	(6)
I.T. Planet Advertising Ltd.	60%	50%	Full	(6)
Mabat Ltd.	100%	100%	Full	(6)
Cinema-Phone Ltd.	100%	100%	Full	(6)
Cinema City Plus Ltd.	100%	100%	Full	(6)
Cinema City Bulgaria EOOD	100%	100%	Full	(5)
Forum Film Bulgaria EOOD	100%	100%	Full	(5)
Forum Home Entertainment Czech s.r.o	100%	100%	Full	(3)
New Age Cinema Kft	100%	100%	Full	(2)
Forum Hungary Film Distribution Kft	100%	100%	Full	(2)
Cinema City Romania SRL	100%	100%	Full	(7)
Forum Film Romania SRL	100%	100%	Full	(7)
New Age Media Romania SRL	100%	100%	Full	(7)
Palace Cinemas Hungary Kft	100%	100%	Full	(2)
Cinema City Slovakia s.r.o	100%	100%	Full	(8)
Forum Film Slovakia s.r.o.	100%	100%	Full	(8)
Seracus Ltd.	100%	100%	Full	(9)

(1) Dutch corporation.

(2) Hungarian corporation.
(3) Czech corporation.
(4) Polish corporation.
(5) Bulgarian corporation.
(6) Israeli corporation.
(7) Romanian corporation.
(8) Slovakian corporation.
(9) Cypriot corporation.

	31 December 2010
	Cinema City Holding's (in)direct voting rights	Cinema City Holding's equity share	Combined	Country of incorporation
	%	%	%	%
I.T. International Theatres 2004 Ltd.	100%	100%	Full	(6)
I.T. Magyar Cinema Moziuzemelt ¨ o ˝ es´
´ Filmforgalmazo Kft	100%	100%	Full	(2)
Cinema City Finance B.V.	100%	100%	Full	(1)
Cinema City Poland Sp.Zoo sp.j.	100%	100%	Full	(4)
New Cinemas Poland Sp.Zoo	100%	100%	Full	(4)
IT Poland Development 2003 Sp.Zoo sp.j.	100%	100%	Full	(4)
Cinema City Czech S.R.O	100%	100%	Full	(3)
Forum Home Entertainment Czech S.R.O	100%	100%	Full	(3)
Forum Film Czech S.R.O	100%	100%	Full	(3)
New Age Media Sp.Zoo sp.j.	100%	100%	Full	(4)
Forum Film Poland Sp.Zoo sp.j.	100%	100%	Full	(4)
All Job Poland Sp. Zoo sp.j.	100%	100%	Full	(4)
Cinema City Poland Sp.Zoo CC sp.k.	100%	100%	Full	(4)
Norma Film Ltd. .	60%	50%	Full	(6)
Forum Film Ltd. .	60%	50%	Full	(6)
Cinema Theatres Ltd. .	60%	30%	Full	(6)
I.T. Planet Advertising Ltd.	60%	50%	Full	(6)
Mabat Ltd.	100%	100%	Full	(6)
Cinema-Phone Ltd.	100%	100%	Full	(6)
Cinema City Plus Ltd.	100%	100%	Full	(6)
Cinema City Bulgaria EOOD	100%	100%	Full	(5)
Forum Film Bulgaria EOOD	100%	100%	Full	(5)
Forum Film Home Entertainment KFT	100%	100%	Full	(2)
New Age Cinema KFT	100%	100%	Full	(2)
Forum Hungary Film Distribution KFT	100%	100%	Full	(2)
Cinema City Romania SRL	100%	100%	Full	(7)
Forum Film Romania SRL	100%	100%	Full	(7)
New Age Media Romania SRL	100%	100%	Full	(7)

(1) Dutch corporation.

(2) Hungarian corporation.

(3) Czech corporation.
(4) Polish corporation.
(5) Bulgarian corporation.

(6) Israeli corporation.

(7) Romanian corporation.

(8) Slovakian corporation.

(9) Cypriot corporation.

Combined Interim Financial Information for the nine months ended 30 September 2013

Interim Condensed Combined Statements of Financial Position (Unaudited)

	30 September 2013	30 September 2012	31 December 2012
		EUR (thousands)
ASSETS
NON-CURRENT ASSETS
Intangible assets	18,428	17,610	18,359
Property and equipment, net	298,251	304,710	308,986
Deferred tax asset	2,938	2,414	2,964
Long-term loans to related parties	117,851	562	112,540
Other long-term receivables	3,110	—	3,022
Total non-current assets	440,578	325,296	445,871
CURRENT ASSETS
Inventories	4,329	6,020	4,544
Receivables
Trade accounts receivable	11,816	13,784	19,700
Income taxes receivable	818	442	315
Receivables from related parties	—	16,138	—
Other accounts receivable and prepaid expenses	11,049	14,496	7,651
Total receivables	23,683	44,860	27,666
Financial assets Marketable securities	6	8	7
Total financial assets Cash and short-term deposits	6	8	7
Cash and cash equivalents	18,488	8,002	24,280
Short-term bank deposits — collateralised	—	341	3,038
Total cash and short-term deposits	18,488	8,343	27,363
Total current assets	46,506	59,231	59,580
TOTAL ASSETS	487,084	384,527	505,451

	30 September 2013	30 September 2012	31 December 2012
		EUR (thousands)
EQUITY AND LIABILITIES
EQUITY
Share and Share premium reserve	63,504	80,980	63,299
Accumulated currency translation adjustments	(7,607)	(5,360)	(4,322)
Hedge reserve	(197)	—	—
Retained earnings	180,640	156,062	164,034
Total equity attributable to equity holders of Cinema City
Holding	236,340	231,682	223,011
LONG-TERM LIABILITIES
Long-term loans, net of current portion	197,716	86,741	204,077
Accrued employee retirement rights, net	994	700	1,061
Deferred tax liabilities	5,659	3,734	4,687
Financial lease	894	894	929
Other long-term liabilities	111	261	130
Total long-term liabilities	205,374	92,330	210,884
CURRENT LIABILITIES
Short-term borrowings	13,768	26,744	20,540
Trade accounts payable	17,149	15,720	18,942
Employee and payroll accruals	2,543	2,403	2,620
Payables to related parties	—	204	—
Other accounts payable	11,559	13,641	28,098
Income tax payables	351	1,803	1,356
Total current liabilities	45,370	60,515	71,556
Total liabilities	250,744	152,845	282,440
TOTAL EQUITY AND LIABILITIES	487,084	384,527	505,451

Interim Condensed Combined Statements of Profit or Loss (Unaudited)

	For the 9 months ended 30 September		For the year ended 31 December
	2013	2012	2012
		EUR (thousands)
Revenues	208,986	196,007	280,653
Operating costs	174,680	166,223	236,649
Gross margin	34,306	29,784	44,004
General and administrative expenses	10,268	10,401	(14,348)
Operating profit	24,038	19,383	29,656
Financial income	3,540	1,352	2,130
Financial expenses	9,655	3,721	6,012
Gain/ (loss) on disposals, and write-off of other investments	(24)	45	(334)
Operating income before taxation	17,899	17,059	25,440
Income tax expense	1,293	1,369	1,778
Net income for the period	16,606	15,690	23,662
Attributable to:
Equity holders of Cinema City Holding	16,606	15,439	23,411
Non-controlling interests	—	251	251

Interim Condensed Combined Statements of Comprehensive Income (Unaudited)

	For the 9 months ended 30 September		For the year ended 31 December
	2013	2012	2012
		EUR (thousands)
Net income for the period	16,606	15,690	23,622
Other comprehensive income Items to be reclassified to profit or loss in subsequent periods:
Foreign exchange translation differences Cash flow hedges, net	(3,285) (197)	5,813 (451)	6,851 (451)
Other comprehensive income/(loss), net	(3,482)	5,362	6,400
Total comprehensive income for the period	13,124	21,052	30,022
Attributable to:
Equity holders of Cinema City Holding	13,124	20,900	29,870
Non-controlling interests	—	152	152

Interim Condensed Combined Statements of Changes in Equity (Unaudited)

	Attributed to equity holders of Cinema City Holding
	Share and share premium	Accumulated currency translation adjustment	Hedge reserve	Retained earnings	Total	Non controlling interests	Total equity
				EUR (thousands)
Balance as of 1 January 2013	63,299	(4,322)	—	164,034	223,011	—	223,011
Net income for the period	—	—	—	16,606	16,606	—	16,606
Other comprehensive loss	—	(3,285)	(197)	—	(3,482)	—	(3,482)
Total comprehensive income/(loss)	—	(3,285)	(197)	16,606	13,124	—	13,124
Share-based payments granted by CCI .	205	—	—	—	205	—	205
Balance as of 30 September 2013	63,504	(7,607)		(197) 180,640	236,340	—	236,340

	Attributed to equity holders of Cinema City Holding
	Share and share premium	Accumulated currency translation adjustment	Hedge reserve	Retained earnings	Total	Non controlling interests	Total equity
	EUR (thousands)
Balance as of 1 January 2012	80,635	(11,272)	451	144,347	214,161	(2,071)	212,090
Net income for the period	—	—	—	15,439	15,439	251	15,690
Other comprehensive income/(loss)	—	5,912	(451)	—	5,461	(99)	5,362
Total comprehensive income/(loss)	—	5,912	(451)	15,439	20,900	152	21,052
Share-based payments granted by CCI	345	—	—	—	345	—	345
Acquisition of non-controlling interests .	—	—	—	(3,724)	(3,724)	1,919	(1,805)
Balance as of 30 September 2012	80,980	(5,360)	—	156,062	231,682	—	231,682

		Attributable to equity holders of Cinema City Holding
	Share and share premium	Translation reserve	Hedge reserve	Retained earnings	Total	Non controlling interests	Total equity
				EUR (thousands)
Balance as of 1 January 2012	80,635	(11,272)	451	144,347	214,161	(2,071)	212,090
Net income for the year	—	—	—	23,411	23,411	251	23,662
Other comprehensive income/(loss)	—	6,950	(451)	—	6,499	(99)	6,400
Total comprehensive income/(loss)		6,950	(451)	—	6,499	(99)	6,400
Share-based payments granted by CCI . .	489	—	—		489	—	489
Acquisition of non-controlling interests	—	—	—	(3,724)	(3,724)	1,919	(1,805)
Distribution to shareholders	(17,825)	—	—		(17,825)	—	(17,825)
Balance as of 31 December 2012	63,299	(4,322)	—	164,034	223,011	—	223,011

Interim Condensed Combined Statements of cash flows (Unaudited)

	For the 9 months ended 30 September	For the year ended 31 December
	2013	2012	2012
		EUR (thousands)
Cash flows from operating activities
Net income Adjustments to reconcile net income to net cash from operating activities:	16,606	15,690	23,662
Depreciation and amortisation	22,810	22,461	30,555
Increase (decrease) in accrued employee rights upon retirement, net	(100)	(111)	208
Loss on disposals and write off fixed assets	23	25	317
Share-based payments	206	345	489
Interest expenses	9,541	3,563	5,579
Interest income	(3,488)	(922)	(790)
Income taxes paid	(2,066)	(1,640)	(2,056)
Income tax expenses	1,293	1,369	1,778

Operating income before working capital	44,825	40,780	59,742
Decrease in inventories	140	855	2,388
Decrease/ (increase) in trade accounts receivable	7,766	1,316	(4,306)
Decrease/ (increase) in prepaid expenses and other receivables	(562)	369	1,643
Decrease/ (increase) in governmental institutions	(1,809)	(78)	1,323
Decrease in long-term film distribution costs and deferred expenses	149	39	119
Increase/ (decrease) in accounts payable	(11,741)	(5,825)	5,069
Increase in receivables from related parties	—	(1,460)	(209)
Increase in Payables to related parties	—	—	205
Increase/ (decrease) in employee and payroll accruals	(94)	(18)	174
Net cash from operating activities	38,674	35,978	66,148
Cash flows from investing activities
Purchase of property and equipment	(14,642)	(55,723)	(61,875)
Investments in intangible assets	(3,131)	(7,088)	(8,342)
Loans granted to related parties, net	(2,063)	(14,245)	—
Proceeds from disposition of property and equipment and intangible assets	131	137	97
Interest received	240	922	790
Short-term bank deposits redeemed	—	3	—
Changes in marketable securities	1	20	17

Net cash used in investing activities	(19,464)	(75,974)	(69,313)
Cash flows from financing activities
Proceeds from long-term loans	40,457	66,500	148,193
Payment of loan arrangement fees	(4,844)	—	—
Repayment of long-term loans	(52,921)	(13,372)	(87,026)
Interest paid	(8,896)	(3,563)	(4,709)
Decrease in long-term payables	(22)	(185)	(290)
Proceeds from short-term bank credit	203	1,923	—
Distribution to Shareholders	—	—	(17,825)
Repayment of short-term bank credit	(1,663)	(11,098)	(16,255)
Decrease in short-term bank deposit — collateralised	3,003	—	(2,670)
Acquisition of non-controlling interests	—	(1,805)	(1,805)
Net cash (used in)/from financing activities	(24,683)	38,400	17,613
Foreign currency exchange differences on cash and cash equivalents	(319)	321	555
Increase/(decrease) in cash and cash equivalents	(5,792)	(1,275)	15,003
Cash and cash equivalents at beginning of year	24,280	9,277	9,277
Cash and cash equivalents at end of period	18,488	8,002	24,280

Note 1 — General and principal activities

Cinema City Holding was incorporated in The Netherlands in December 2012. Cinema City Holding is a wholly-owned subsidiary of CCI. CCI, via its subsidiaries, is principally engaged in the operation of cinema related entertainment activities in various countries in CEE and Israel. In December 2012, upon the incorporation of Cinema City Holding, CCI contributed its cinema operations in CEE to Cinema City Holding in consideration of the issuance of shares by Cinema City Holding. The corporate office of Cinema City Holding is located in Rotterdam, The Netherlands.

The combined financial statements of the Cinema City Holding Group have been prepared in a condensed format as of 30 September 2013 and for the nine months then ended (interim combined financial information). The interim combined financial information should be read in conjunction with Cinema City Holding's annual combined financial information as of 31 December 2012 and for the year then ended and accompanying notes as included in the Circular document of Cineworld Group Plc dated 10 January 2014 (annual combined financial information).

Note 2 — Significant Accounting Policies

A. Basis of preparation of the interim combined financial information:

Cinema City Holding Group's unaudited interim combined financial information for the 2013 Interim Period is prepared in a form that is consistent with Cineworld Group Plc's accounting policies in its latest annual accounts, except for the adoption of new standards effective as of 1 January 2013, as described below. The interim combined financial information is prepared in accordance with International Financial Reporting Standards as adopted by the EU as applicable to interim condensed financial statements, except in respect of certain matters as more fully described in the annual combined financial information.

B. Adoption of new standards:

The Cinema City Holding Group applies, for the first time, the following new Standards which had no material effect on the combined financial information:

IAS 1 Presentation of Items of Other Comprehensive Income—Amendments to IAS 1—The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time now have to be presented separately from items that will never be reclassified. The amendment only affected the presentation of items and had no impact on the Cinema City Holding Group's financial position or performance.

IAS 34 Interim financial reporting and segment information for total assets and liabilities (Amendment)—The amendment clarifies the requirements in IAS 34 relating to segment information for total assets and liabilities for each reportable segment to enhance consistency with the requirements in IFRS 8 Operating Segments. Total assets and liabilities for a reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change in the total amount disclosed in the entity's previous annual combined financial statements for that reportable segment. The Cinema City Holding Group provides this disclosure as total segment assets were reported to the chief operating decision maker (CODM).

As a result of this amendment, the Cinema City Holding Group now also includes disclosure of total segment liabilities as these are reported to the CODM.

IAS 19 Employee Benefits (Revised 2011) (IAS 19R)—IAS 19R includes a number of amendments to the accounting for defined benefit plans, including actuarial gains and losses that are now recognised in other comprehensive income (OCI) and permanently excluded from profit and loss. Expected returns on plan assets are no longer recognised in profit or loss, instead, there is a requirement to recognise interest on the net defined benefit liability (asset) in profit or loss, calculated using the discount rate used to measure the defined benefit obligation. Other amendments include new disclosures, such as quantitative sensitivity disclosures. In case of the Cinema City Holding Group, the transition to IAS 19R had no impact on the condensed combined financial statements.

IFRS 13 Fair Value Measurement—IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The application of IFRS 13 has not materially impacted the fair value measurements carried out by the Cinema City Holding Group. IFRS 13 also requires specific disclosures on fair values. Some of these disclosures are specifically required for financial instruments by IAS 34.16A(j), thereby affecting the interim condensed combined financial statements period. The carrying amount of the Cinema City Holding Group's financial assets and liabilities approximate their fair value.

Note 3 — Functional and reporting currency and exchange rates

Exchange rates

Information relating to the relevant euro exchange rates (at end of period and averages for the period):

	Exchange rate of euro
	Czech crown (CZK)	Hungarian forint (HUF)	Polish złoty (PLN)	US dollar (USD)	Israeli shekel (NIS)	Romania new lei (RON)
As of
30 September 2013	25.72	298.51	4.22	1.35	4.77	4.46
31 December 2012	25.11	290.85	4.08	1.32	4.92	4.44
30 September 2012	25.13	285.35	4.12	1.29	5.06	4.54
	%	%	%	%	%	%
Change during the period
2013 (9 months)	2.43	2.63	3.43	2.27	(3.05)	0.45
2012 (12 months)	(2.30)	(6.79)	(7.90)	2.32	(0.40)	2.78
2012 (9 months)	(2.22)	(8.55)	(7.00)	0.00	2.43	5.09

	Exchange rate of euro
	Czech crown (CZK)	Hungarian forint (HUF)	Polish złoty (PLN)	US dollar (USD)	Israeli shekel (NIS)	Romania new lei (RON)
Average for the period
2013 (9 months)	25.74	296.66	4.20	1.32	4.80	4.41
2012 (12 months)	25.14	289.31	4.18	1.29	4.95	4.46
2012 (9 months)	25.13	291.28	4.21	1.28	4.94	4.43
	%	%	%	%	%	%
Change during the period
2013 (9 months)	2.39	2.54	0.48	2.33	(3.03)	(1.12)
2012 (12 months)	2.28	3.61	1.46	(7.19)	(0.60)	5.19
2012(9 months)	2.24	4.32	2.18	(7.91)	(0.80)	4.48

Since the exchange rate of Bulgarian leva versus the euro for the applicable periods is unchanged, a currency table is not included. The exchange rate for the applicable periods used is 1.95583 Bulgarian leva for one euro.

	Exchange rate of euro
	Czech crown (CZK)	Hungarian forint (HUF)	Polish złoty (PLN)	US dollar (USD)	Israeli shekel (NIS)	Romania new lei (RON)
Average for the quarter ended
30 September
2013	25.84	297.81	4.25	1.33	4.75	4.44
2012	25.08	282.8	4.13	1.25	4.98	4.52
	%	%	%	%	%	%
Change quarter over quarter
2013	3.03	5.29	2.91	6.4	(4.62)	(1.77)
2012	2.96	3.15	(0.24)	(11.97)	(0.60)	6.1

Note 4 — Events during the period

a. At the end of December 2012, the Cinema City Holding Group entered into a new club bank financing agreement with three leading European banks: Bank Zachodni WBK S.A., HSBC Bank plc and ING Bank ´ Sl˛aski for a total EUR 210 million (which includes a EUR 70 million revolving credit line). In February 2013, an additional leading European bank, BNP Paribas, joined the club bank financing group. The term of the facility is six years. The facility may be used in EUR and PLN and has been secured mainly by pledges of shares in Cinema City Holding's material subsidiaries, investment certificates and mortgages on its major real estate assets. The financing agreement provides for standard covenants, which Cinema City Holding is obliged to meet from the period that started on 30 June 2013, including those relating to a pre-determined level of leverage (net leverage covenant) and margin. It also includes a change of control clause in case the Greidinger family's holdings in the Existing Cinema City Group decrease below 30 per cent. or another investor obtains control over the Existing Cinema City Group.

The financing agreement was used by Cinema City Holding to finance the loan granted to CCRE, to refinance other Cinema City Holding Group credit facilities and for other general corporate purposes. The only other Cinema City Holding Group financing that is currently in place in addition to the club financing is a local Israeli financing of approximately EUR 40 million.

Early in 2013, the Cinema City Holding Group concluded interest rate swap agreements for an amount of EUR 92.4 million (representing 66 per cent. of the term loan) for a period of two years in accordance with the terms of the facility agreement, on a weighted average fixed rate of 4.06 per cent., whilst the revolving credit facility and the rest of the term loan attract floating interest rates of EURIBOR + 3.0 percent for amounts denominated in EUR and WIBOR + 3.0 per cent for amounts denominated in PLN. The interest rate swap is considered to be a hedging instrument for accounting purposes.

b. On 1 September 2013 the Existing Cinema City Group received Mr. Amos Weltsch's resignation effective as of that date, from the senior management positions he held in the Existing Cinema City Group. Following 33 successful years in the Existing Cinema City Group, Mr. Weltsch, decided to step down from his role in order to pursue personal projects. Mr. Weltsch will continue to be involved with the Existing Cinema City Group in various projects and areas as a special advisor until his retirement at the end of 2014. In addition, Mr. Weltsch signed a non-competition agreement for a period lasting until the end of 2017.
c. During the third quarter of 2013, the tax rate in Israel increased from 25 per cent. to 26.5 per cent. with effective date of 1 January 2014. This change did not have a material effect on the Cinema City Holding Group's condensed combined financial statements.
d. As mentioned in Note 1(B) to the annual combined financial information, all freehold real estate (land and buildings) and one related leasehold owned by members of the Cinema City Holding Group will not be acquired as part of the proposed Combination. The balance of the above-mentioned real estate as of 30 September 2013 and the depreciation for the nine months then ended is EUR 96,663,000 and EUR 1,785,000, respectively.

Note 5 — Segment Reporting

The Cinema City Holding Group's operations in Israel and CEE are organised under the reportable segments, as shown below, which are the Cinema City Holding Group's major business segments. The strategic business units offer different products and services as they require different processes and marketing strategies. The following summarises the operations in each of the Cinema City Holding Group's reportable segments:

Cinema operations.
Distribution—Distribution of films.

	For the nine months ended 30 September 2013
	Cinema operations	Distribution	Eliminations	Consolidated
			EUR (thousands)
Revenues
External sales	193,734	15,252	—	208,986
Inter-segment sales	—	11,049	(11,049)	—
Total revenues	193,734	26,301	(11,049)	208,986
Segment results	21,903	2,135	—	24,038
Net financial expense				(6,115)
Loss on disposals				(24)
Income taxes				(1,293)
Net income				16,606

	30 September 2013
	Cinema operations	Distribution	Unallocated	Consolidated
	EUR (thousands)
Segment assets	346,924	19,199	120,961	487,084
Segment liabilities	27,550	6,062	217,132	250,744
Capital expenditure	12,646	2,831	—	15,477

	For the nine months ended 30 September 2012
	Cinema operations	Distribution	Eliminations	Consolidated
			EUR (thousands)
Revenues
External sales	181,117	14,890	—	196,007
Inter-segment sales	—	10,752	(10,752)	—
Total revenues	181,117	25,642	(10,752)	196,007
Segment results	18,197	1,186	—	19,383
Net financial expense				(2,369)
Gain on disposals				45
Income taxes				(1,369)
Net income				15,690

	30 September 2012
	Cinema operations	Distribution	Unallocated	Consolidated
	EUR (thousands)
Segment assets	369,875	12,238	2,414	384,527
Segment liabilities	31,028	4,598	117,219	152,845
Capital expenditures	52,831	6,709	—	59,540

			Financial year 2012
	Cinema operations	Distribution	Eliminations	Consolidated
			EUR (thousands)
Revenues
External sales	255,722	24,931	—	280,653
Inter-segment sales	—	18,428	(18,428)	—
Total revenues	255,722	43,359	(18,428)	280,653
Results
Segment result before depreciation,
amortisation & impairment write-downs	55,387	4,824	—	60,211
Depreciation, amortisation & impairment write
downs	27,731	2,824	—	30,555
Segment result	27,656	2,000	—	29,656
Financial income				2,130
Financial expenses				(6,012)
Loss on disposals				(334)
Income tax expenses				(1,778)
Net income				23,662
	31 December 2012
	Cinema

	operations	Distribution	Unallocated	Consolidated
			EUR (thousands)
Segment assets	370,858	19,089	115,504	505,451
Segment liabilities	40,756	12,380	229,304	282,440
Capital expenditures	59,979	7,734	—	67,713

Note 6 — Seasonality

The Cinema City Holding Group's activities are not of a material seasonal nature. Therefore, the results presented by the Cinema City Holding Group do not fluctuate significantly during the year due to the seasonality.

Historically, the Cinema City Holding Group's revenues have tended to have a relatively small ''seasonality'' impact driven in large part by the way major film distributors release films. In the past, the film studios released the most marketable films during the summer months and the holiday season from late November through December, corresponding with what the studios believed to be the periods of highest customer interest. In recent years, however, this seasonal impact has become less pronounced as films are now more evenly distributed during the year. In addition, attendance may be temporarily impacted by the weather, whereby cinema attendance tends to increase during those periods when the weather is less conducive to outside activities, though such impact is typically relatively short-lived and cannot be predicted.

PART X

UNAUDITED PRO FORMA STATEMENT OF NET ASSETS OF THE ENLARGED GROUP

Basis of preparation

The unaudited pro forma statement of net assets set out below has been prepared to illustrate the impact of the Rights Issue and the Combination on the net assets of the Enlarged Group as at 26 September 2013 had the Rights Issue and Combination occurred on that date.

The unaudited pro forma net assets statement has been prepared in a manner consistent with the accounting policies to be adopted by the Cineworld Group in preparing its financial statements for the 52 week period ending 26 December 2013 and on the basis set out in the notes below and in accordance with Annex II to the PD Regulation.

The unaudited pro forma information has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not represent the Cineworld Group's actual financial position or results. It does not, therefore, give a true picture of the Cineworld Group's financial position or results nor is it indicative of the results that may or may not be expected to be achieved in the future.

For the Cineworld Group, the unaudited pro forma historical financial information has been extracted without material adjustment from the unaudited historical financial information of the Cineworld Group for the 39 week period ended 26 September 2013 set out in Part VIII (Historical Financial Information Relating to Cineworld) of this Prospectus.

For the Cinema City Holding Group the unaudited pro forma historical financial information has been derived from the unaudited historical financial information of Cinema City Holding Group for the nine months ended 30 September 2013 set out in Part IX (Financial Information relating to the Cinema City Business) of this Prospectus and translated into Pounds Sterling from euro using the rate (A1.1872:£1).

Unaudited pro forma statement of net assets as at 26 September 2013

						Adj ustm	ents
	Cin rld Gro ewo up Not e 1	Rig hts Issu e Not e 2	Sub l tota Not e 3	Cin Cit ema y Hol ding Gro up Not e 4	Car f ut o ve o cine rela ted ma- ets ass Not e 5	Car f ut o ve o -cin non ema rela ted- ts asse and lia bili ties Not e 6	Pro ceed s fr om deb t dr awd own Not e 7	Acq uisi tion of Cin Cit ema y Not e 8	Tra ctio sts nsa n co Not e 9	Pro for net ma Ass of ets Enl ed arg Gro up
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
NO N C UR REN T A SSE TS
Pro lant d eq uipm ty, p ent per an . . . . . . . . . . . . . . . .	160 .4	—	160 .4	251 .2	(81 .4)	—	—	—	—	330 .2
Goo dwi ll .	236 .2	—	236 .2	7.4	—	—	—	318 .8	—	562 .4
Oth er i gibl ntan sets e as	14.2	—	14.2	8.1	—	—	—	—	—	22.3
Inve in ity ed i stm ents unt stee equ acco nve . . . . . . . . . . . .	0.5	—	0.5	—	—	—	—	—	—	0.5
Oth ivab les er r ece . . . . . . . . . . . . . . . . . . . . . .	1.4	—	1.4	2.6	—	—	—	—	—	4.0
ploy ee b fits Em ene . . . . . . . . . . . . . . . . . . . . . . . .	6.3	—	6.3	—	—	—	—	—	—	6.3
Def d ta sets erre x as . . . . . . . . . . . . . . . . . . . .	8.8	—	8.8	2.5	—	(1.0 )	—	—	—	10.3
ivab le f rel ated rtie Lon g te rm rece rom pa s . . . .	—	—	—	99.3	—	(99 .3)	—	—	—	—
TO TAL NO N C T A SSE TS UR REN CU ASS ETS RRE NT	427 .8	—	427 .8	371 .1	(81 .4)	(10 0.3)	—	318 .8	—	936 .0
Inve ries nto . . . . . . . . . . . . . . . . . . . . . . . . . .	3.6	—	3.6	3.6	—	—	—	—	—	7.2
de a nd oth ivab les Tra er r ece	31.0	—	31.0	19.9	—	—	—	—	—	50.9
Cas h an d ca sh e quiv alen ts . . . . . . . . . . . . . . . . . . .	9.8	107 .1	116 .9	15.6	—	—	206 .0	(28 4.2)	(18 .0)	36.3
TO TAL CU RRE NT ASS ETS	44.4	107 .1	151 .5	39.1	—	—	206 .0	(28 4.2)	(18 .0)	94.4
TO TAL AS SET S	472 .2	107 .1	579 .3	410 .2	(81 .4)	(10 0.3)	206 .0	34.6	(18 .0)	1,03 0.4
CU LIA S RRE NT BIL ITIE
Inte be arin g lo and oth er f inan cial liab iliti rest ans es . . . . . . .	(27 .1)	—	(27 .1)	(11 .6)	—	11.6	(15 .1)	—	0.8	(41. 4)
de a nd oth ayab les Tra er p . . . . . .	(51. 3)	—	(51 .3)	(24 .2)	—	—	—	—	—	(75. 5)
ploy nd roll ls Em ee a pay acc rua . . . .	—	—	—	(2.1 )	—	—	—	—	—	(2.1 )
Cur x lia bilit ies t ta ren	(4.0 )	—	(4.0 )	(0.3 )	—	—	—	—	—	(4.3 )
visi Pro ons	(0.4 )	—	(0.4 )	—	—	—	—	—	—	(0.4 )
TO TAL CU LIA S RRE NT BIL ITIE NO N C IAB IES T L ILIT	(82. 8)	—	(82 .8)	(38 .2)	—	11.6	(15 .1)	—	0.8	(12 3.7)
UR REN Inte be arin and oth er f inan cial liab iliti rest						166 .5			3.2	(307 .2)
g lo ans es . . . . . . . de a nd oth les Tra	(11 9.5)	—	(11 9.5)	(16 6.5)	—		(19 0.9)	—
ayab er p . . . . . . irem ben efit obli Ret ent	(52. 1)	—	(52 .1)	(0.1 )	—	—	—	—	—	(52. 2)
gati ons . . Gov ent ts	—	—	—	(0.8 )	—	—	—	—	—	(0.8 )
ernm gran . . . . . . visi Pro	(1.9 )	—	(1.9 )	—	—	—	—	—	—	(1.9 )
ons d ta x lia bilit ies Def	(10. 7)	—	(10 .7)	—	— 1.4	—	—	—	—	(10. 7)
erre e le Fin	(7.2 )	—	(7.2 )	(4.8 )		—	—	—	—	(10. 6)
anc ase . .	—	—	—	(0.8 )	—	—	—	—	—	(0.8 )
TO TAL NO N C IAB IES UR REN T L ILIT	(191 .4)	—	(19 1.4)	(17 3.0)	1.4	166 .5	(19 0.9)	—	3.2	(38 4.2)
TO TAL LIA BIL ITIE S	(274 .2)	—	(27 4.2)	(21 1.2)	1.4	178 .1	(20 6.0)	—	4.0	(50 7.9)
TO TAL NE T A SSE TS	198 .0	107 .1	305 .1	199 .0	(80 .0)	77.8	—	34.6	(14 .0)	522 .5

1. The financial information of the Cineworld Group as at 26 September 2013 has been extracted without material adjustment from the historical financial information for the Cineworld Group as set out under in Part VIII (Historical Financial Information relating to Cineworld) of this document.
1. This adjustment reflects the receipt of the net proceeds of the Rights Issue by Qualifying Shareholders of 48.0 million shares at 230 pence per share. The net proceeds receivable by the Company are £107.1 million (£110.3 million gross proceeds less direct issue costs of £3.2 million). Cineworld intends to use the proceeds of the Rights Issue towards the funding of the Combination.
1. This pro forma statement subtotal reflects the Cineworld Group immediately following the Rights Issue and assuming that the Rights Issue occurred on 26 September 2013. This pro forma subtotal is presented on the basis that no acquisition of Cinema City Holding Group has yet occurred.
1. The financial information of the Cinema City Holding Group as at 30 September 2013 has been derived from the historical financial information as set out under Part IX (Financial Information relating to the Cinema City Business) of this document by retranslating the euro figures presented in that historical financial information into Pounds Sterling, consistent with the presentation of the Cineworld Group. The assets and liabilities have been individually translated using a euro to Pounds Sterling exchange rate of 1.1872, which reflects the Bank of England closing rate as at 26 September 2013.
1. Before Completion, certain cinema-related assets, amounting to £80.0 million (net of deferred tax liabilities amounting to £1.4 million), will be assigned by the Cinema City Holding Group to a related company which is a wholly owned subsidiary of CCI. These assets will not be acquired by Cineworld as part of the Combination, though they will be leased back to the cinemas operated by Cinema City Holding Group's wholly owned subsidiaries. The assets have been individually translated using a Euro to Sterling exchange rate of 1.1872, which reflects the Bank of England closing rate as at 26 September 2013.
1. Before Completion, loans receivable from related parties amounting to £99.3 million (including accrued interest of £2.7 million); external interest bearing loans totalling £178.1 million (split £11.6 million current and £166.5 million non-current), and certain other assets including a deferred tax asset of £1.0 million net £77.8 million will be assigned by the Cinema City Holding Group to CCI. These assets will not be acquired by the Cineworld Group as part of the Combination, with the external interest bearing bank loans being settled by CCI using proceeds from the sale of the Cinema City Holding Group. (The assets and liabilities have been individually translated using a Euro to Sterling exchange rate of 1.1872, which reflects the Bank of England closing rate as at 26 September 2013.)
1. This adjustment reflects the receipt of the net proceeds of the current and non-current debt draw down on completion of £341.8 million. The debt drawn down comprises of £304.8 million of senior club debt and £37.0 million of revolving credit facility. The proceeds presented of £206.0 million reflect the gross draw down of £341.8 million less the settlement of the existing Cineworld debt of £135.8 million present in the 26 September 2013 balance sheet.
1. This adjustment reflects the acquisition of Cinema City Holding Group by Cineworld Group. The consideration payable to CCI for the acquisition of Cinema City Holding Group will consist of the issue of Consideration Shares in the Cineworld Group equivalent to 24.9 per cent. of the Ordinary Shares in issue, immediately subsequent to the issue of Consideration Shares, together with a cash payment of £272.0 million plus A14.5 million (£12.2 million) in respect of the Cinema City Holding Group cash balance as at 30 September 2013, as described on page 47 of this document. The fair value of the issue of the Consideration Shares is anticipated to be £231.4 million (being the issue of 65.6 million shares at a Theoretical Ex-Rights Price (TERP) of 353 pence per share.). The premium paid of £326.2 million to acquire control of the Cinema City Holding Group has been allocated to Goodwill.

This adjustment reflects the total transaction costs of £18.0 million incurred solely by the Cineworld Group as part of the Combination and the related work performed. Of these costs, £14.0 million relate solely to the cost of acquiring Cinema City Holding Group and have therefore been presented in equity as they would be expensed in accordance with IFRS 3, Business Combinations. The remaining costs of £4.0 million directly relate to the securing of the senior club debt facilities summarised in Note 7 above. In accordance with IAS 39 Financial Instruments: Recognition and Measurement these have been presented net against the gross current and non-current debt drawn down in Note 7 as prepaid interest costs and will be amortised over the five-year term of the debt.

Notes

The Cineworld Directors believe that, had the Transaction occurred at the beginning of the last financial period, the earnings of the Enlarged Group would have been affected. Assuming that the revised funding structure and additional asset leases were in place on 27 December 2012, the main impacts would have been to: increase finance costs associated with loans; increase property rental costs; and reduce depreciation with a corresponding net decrease in earnings before taxation.

This pro forma statement of net assets does not constitute financial statements within the meaning of section 434 of the Companies Act 2006.

No adjustment has been made to reflect the trading results of the Group since 26 September 2013 or any other change in its financial position in that period.

Canary Wharf DX157460 London E14 5GL United Kingdom

KPMG Audit plc Tel +44 (0) 20 73111000 15 Canada Square Fax +44 (0) 20 7311 3311

Accountants' Report on Pro Forma Financial Information

The Directors Cineworld Group plc Power Road Studios, 114 Power Road, Chiswick, London W4 5PY

10 January 2014

Dear Sirs

Cineworld Group plc

We report on the pro forma net assets statement (the 'Pro forma financial information') set out in Part X (Unaudited pro forma statement of net assets of the Enlarged Group) of the combined Class 1 circular and prospectus dated 10 January 2014, which has been prepared on the basis described on page 189, for illustrative purposes only, to provide information about how the acquisition and issue of shares pursuant to the rights issue and the shares issued as consideration for the acquisition might have affected the financial information presented on the basis of the accounting policies to be adopted by Cineworld Group plc in preparing the financial statements for the period ending 26 December 2013. This report is required by paragraph 13.3.3R of the Listing Rules of the Financial Conduct Authority and paragraph 20.2 of Annex 1 of the Prospectus Directive Regulation and is given for the purpose of complying with those paragraphs and for no other purpose.

Responsibilities

It is the responsibility of the directors of Cineworld Group plc to prepare the Pro forma financial information in accordance with paragraph 13.3.3R of the Listing Rules of the Financial Conduct Authority and paragraph 20.2 of Annex I of the Prospectus Directive Regulation.

It is our responsibility to form an opinion, as required by paragraph 7 of Annex II of the Prospectus Directive Regulation, as to the proper compilation of the Pro forma financial information and to report that opinion to you.

In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro forma financial information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.

Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) to any person as and to the extent there provided, or which we may have to those persons to whom this report is expressly addressed and which we may have to ordinary shareholders as a result of the inclusion of the report in the combined Class 1 circular and prospectus, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Listing Rule 13.4.1R(6) and paragraph 23.1 of Annex I of the Prospectus Directive Regulation, consenting to its inclusion in the combined Class 1 circular and prospectus.

Basis of opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro forma financial information with the directors of Cineworld Group plc.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro forma financial information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of Cineworld Group plc.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion

In our opinion:

the Pro forma financial information has been properly compiled on the basis stated; and
such basis is consistent with the accounting policies of Cineworld Group plc.

Declaration

For the purposes of Prospectus Rule 5.5.3R (2)(f) we are responsible for this report as part of the prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the prospectus in compliance with paragraph 1.2 of Annex I of the Prospectus Directive Regulation.

Yours faithfully

KPMG Audit Plc

PART A: UNITED KINGDOM TAXATION

1. General

The following statements:

(A) do not constitute tax advice and are intended to apply only as a general guide to the position under current UK tax law and the published practice of HMRC as at the date of this document, either of which is subject to change at any time (possibly with retrospective effect);
(B) relate only to certain limited aspects of the UK taxation treatment of Qualifying Shareholders and are intended to apply only to Qualifying Shareholders who:
(i) are resident in (and only in) the UK for UK tax purposes (unless the context otherwise requires) and to whom split-year treatment does not apply;
(ii) hold their Ordinary Shares as investments; and
(iii) are the beneficial owners of their Ordinary Shares; and
(C) may not apply to certain classes of Qualifying Shareholders such as, for example, dealers in securities, insurance companies, collective investment schemes and Qualifying Shareholders who have (or who are deemed to have) acquired their Ordinary Shares by virtue of an office or employment.

Any person who is in any doubt as to his or her tax position or who may be subject to tax in any jurisdiction other than the United Kingdom should consult an appropriate professional tax adviser without delay.

2. Taxation of chargeable gains

2.1 Rights Issue

(A) Issue of New Ordinary Shares

For the purposes of UK taxation of chargeable gains, the issue of New Ordinary Shares by the Company to Qualifying Shareholders who take up their rights under the Rights Issue should constitute a reorganisation of the Company's share capital. On that basis, a Qualifying Shareholder should not be treated as making a disposal of any part of his Existing Holding by reason of taking up all or part of his entitlement to acquire New Ordinary Shares under the Rights Issue. No liability to UK taxation on chargeable gains should arise in respect of the issue of New Ordinary Shares if a Qualifying Shareholder takes up his full entitlement to New Ordinary Shares. For the purposes of the taxation of chargeable gains, if a Qualifying Shareholder takes up all or any of his rights to the New Ordinary Shares, his Existing Ordinary Shares and his New Ordinary Shares should be treated as the same asset, acquired at the time he acquired his Existing Holding. The amount of subscription money paid for the New Ordinary Shares will be added to the base cost of his Existing Ordinary Shares when computing any gain or loss on any subsequent disposal.

In the case of a Qualifying Shareholder within the charge to corporation tax, in calculating the chargeable gain or allowable loss arising on a subsequent disposal of New Ordinary Shares indexation allowance will apply to the amount paid for the New Ordinary Shares only from, generally, the date the subscription monies for the New Ordinary Shares were payable. In the case of Qualifying Shareholders not within the charge to corporation tax, indexation allowance is not available.

(B) Disposal or lapse of rights to acquire New Ordinary Shares

If a Qualifying Shareholder:

(i) sells or otherwise disposes of all or some of his rights to subscribe for New Ordinary Shares; or
(ii) allows or is deemed to allow all or any part of his rights to subscribe for New Ordinary Shares to lapse and receives a cash payment in respect of them,

the proceeds will be treated as a capital distribution to that Qualifying Shareholder by the Company, he shall be treated as if he had disposed of a part of his Existing Holding and he may, depending on his circumstances, incur a liability to taxation on any chargeable gains. However, if the proceeds resulting from a lapse or disposal of rights to subscribe for New Ordinary Shares are ''small'' as compared with the market

value (on the date of lapse or disposal) of that Qualifying Shareholder's Existing Holding, such a Qualifying Shareholder should not generally be treated as making a disposal for the purposes of the taxation of chargeable gains. The proceeds will instead reduce the base cost of that Qualifying Shareholder's Existing Ordinary Shares used to compute any chargeable gain or allowable loss on a subsequent disposal. This treatment will not apply where such proceeds are greater than the base cost of that Qualifying Shareholder's Existing Ordinary Shares.

The current practice of HMRC is to treat proceeds as ''small'' where either (i) the proceeds of the disposal or lapse of rights do not exceed five per cent. of the market value (at the date of the disposal or lapse) of the Existing Holding in respect of which the rights arose or (ii) the amount of the proceeds is £3,000 or less, regardless of whether the five per cent. test is satisfied.

2.2 Subsequent Disposals of New Ordinary Shares

(A) Individual Qualifying Shareholders

A disposal of New Ordinary Shares may, depending on the circumstances and subject to any available exemption or relief, give rise to a chargeable gain (or an allowable loss) for the purposes of UK capital gains tax.

An individual Qualifying Shareholder who is resident in the UK for UK tax purposes and whose total taxable gains and income in a given tax year, including any gains made on the disposal or deemed disposal of his New Ordinary Shares, are less than or equal to the upper limit of the income tax basic rate band applicable in respect of that tax year (the Band Limit) will generally be subject to capital gains tax at the flat rate of 18 per cent. in respect of any gain arising on a disposal or deemed disposal of his New Ordinary Shares.

An individual Qualifying Shareholder who is resident in the UK for UK tax purposes and whose total taxable gains and income in a given tax year, including any gains made on the disposal or deemed disposal of his New Ordinary Shares, are more than the Band Limit will generally be subject to capital gains tax at the flat rate of 18 per cent. in respect of any gain arising on a disposal or deemed disposal of his New Ordinary Shares (to the extent that, when added to the Qualifying Shareholder's other taxable gains and income in that tax year, the gain is less than or equal to the Band Limit) and at the flat rate of 28 per cent. in respect of the remainder.

No indexation allowance will be available to an individual Qualifying Shareholder in respect of any disposal of New Ordinary Shares. However, each individual has an annual exemption, such that capital gains tax is chargeable only on gains arising from all sources during the tax year in excess of this figure. The annual exemption is £10,900 for the tax year 2013-2014.

Individuals who are temporarily non-resident may, in certain circumstances, be subject to tax in respect of gains realised while they are not resident in the UK.

(B) Corporate Qualifying Shareholders

Where a Qualifying Shareholder is within the charge to UK corporation tax, a disposal of New Ordinary Shares may, depending on the circumstances and subject to any available exemption or relief, give rise to a chargeable gain (or an allowable loss) for the purposes of corporation tax.

Corporation tax is charged on chargeable gains at the rate of corporation tax applicable to that company. It should be noted for the purposes of calculating any indexation allowance available on a disposal of New Ordinary Shares that generally the expenditure incurred in acquiring the New Ordinary Shares will be treated as incurred only when the Qualifying Shareholder made, or became liable to make, payment, and not at the time those shares are otherwise deemed to have been acquired.

3. Taxation of dividends

The Company is not required to withhold tax at source from dividend payments it makes.

3.1 Individuals

A Qualifying Shareholder who is an individual resident in the UK for tax purposes and who receives a dividend from the Company will be entitled to a tax credit which may be set off against his total income tax liability. The tax credit will be equal to 10 per cent. of the aggregate of the dividend and the tax credit (the gross dividend), which is also equal to one-ninth of the amount of the cash dividend received.

In the case of such a Qualifying Shareholder who is not liable to UK income tax at either the higher or the additional rate, that Qualifying Shareholder will be subject to UK income tax on the gross dividend at the rate of 10 per cent. The tax credit will, in consequence, satisfy in full that Qualifying Shareholder's liability to UK income tax on the gross dividend.

In the case of a Qualifying Shareholder who is liable to UK income tax at the higher rate, the Qualifying Shareholder will be subject to UK income tax on the gross dividend at the rate of 32.5 per cent. to the extent that the gross dividend falls above the threshold for the higher rate of UK income tax but below the threshold for the additional rate of UK income tax when it is treated as the top slice of the Qualifying Shareholder's income. The tax credit will, in consequence, satisfy only part of the Qualifying Shareholder's liability to UK income tax on the gross dividend and the Qualifying Shareholder will have to account for UK income tax equal to 22.5 per cent. of the gross dividend (which is also equal to 25 per cent. of the cash dividend received). For example, if the Qualifying Shareholder received a dividend of £80 from the Company, the dividend received would carry a tax credit of £8.89 and therefore represent a gross dividend of £88.89. The Qualifying Shareholder would then be required to account for UK income tax of £20 on the gross dividend (being £28.89 (i.e. 32.5 per cent. of £88.89) less £8.89 (i.e. the amount of the tax credit)).

In the case of a Qualifying Shareholder who is liable to UK income tax at the additional rate, the Qualifying Shareholder will be subject to UK income tax on the gross dividend at the rate of 37.5 per cent. for the 2013-2014 tax year, to the extent that the gross dividend falls above the threshold for the additional rate of UK income tax when it is treated as the top slice of the Qualifying Shareholder's income. After setting off the tax credit comprised in the gross dividend, the Qualifying Shareholder will, accordingly, have to account for UK income tax equal to 27.5 per cent. of the gross dividend (which is also equal to 30.55 per cent. of the cash dividend received). For example, if the Qualifying Shareholder received a dividend of £80 from the Company, the dividend received would carry a tax credit of £8.89 and therefore represent a gross dividend of £88.89. The Qualifying Shareholder would then be required to account for UK income tax of £24.44 on the gross dividend (being £33.33 (i.e. 37.5 per cent. of £88.89) less £8.89 (i.e. the amount of the tax credit)).

A UK resident individual Qualifying Shareholder whose liability to UK income tax in respect of a dividend received from the Company is less than the tax credit attaching to the dividend will not be entitled to any payment from HMRC in respect of any part of the tax credit attaching to the dividend.

3.2 Companies

A Qualifying Shareholder within the charge to UK corporation tax which is a ''small company'' (for the purposes of UK taxation of dividends) will not generally be subject to tax on dividends from the Company, provided certain conditions are met.

Other Qualifying Shareholders within the charge to UK corporation tax will not be subject to tax on dividends from the Company so long as the dividends fall within an exempt class and do not fall within certain specified anti-avoidance provisions and the Qualifying Shareholder has not elected for the dividends not to be exempt. Each Qualifying Shareholder's position will depend on its own individual circumstances, although it would normally be expected that dividends paid by the Company would fall within an exempt class. Examples of dividends that are within an exempt class are dividends in respect of portfolio holdings, where the recipient owns less than 10 per cent. of the issued share capital of the payer (or any class of that share capital).

4. Stamp duty and SDRT

The following statements are intended as a general and non-exhaustive guide to the current UK stamp duty and SDRT position and apply regardless of whether or not a Qualifying Shareholder is resident in the UK.

(A) Issue of New Ordinary Shares and issue or crediting of rights to New Ordinary Shares

No stamp duty or SDRT will generally be payable on the issue of Provisional Allotment Letters, split Provisional Allotment Letters or definitive share certificates, on the crediting of Nil Paid Rights or Fully Paid Rights to accounts in CREST, or on the issue in uncertificated form of New Ordinary Shares.

Where New Ordinary Shares represented by such documents or rights are registered in the name of the Qualifying Shareholder entitled to such shares, or where New Ordinary Shares are credited in uncertificated form to CREST, no liability to stamp duty or SDRT will generally arise.

Following the decision of the European Court of Justice in HSBC Holdings and Vidacos Nominees (Case 569/07) and the First-tier Tax Tribunal decision in HSBC Holdings and The Bank of New York Mellon, HMRC has confirmed that 1.5 per cent. SDRT is no longer payable when new shares are issued into a clearance service or depositary receipt service.

(B) Purchase of rights to New Ordinary Shares

Persons who purchase (or are treated as purchasing) rights to New Ordinary Shares represented by Provisional Allotment Letters (whether nil paid or fully paid), or Nil Paid Rights or Fully Paid Rights held in CREST, on or before the latest time for registration of renunciation, will not generally be liable to pay stamp duty. However, such a purchaser will normally be liable to pay SDRT at the rate of 0.5 per cent. of the actual consideration paid. Where such a purchase is effected through a stockbroker or other financial intermediary, that person will normally account to HMRC for the SDRT and should indicate that this has been done in any contract note issued to the purchaser. In other cases, the purchaser of the rights to the New Ordinary Shares represented by the Provisional Allotment Letters is liable to pay the SDRT and must account for it to HMRC. Any SDRT arising on the transfer of Nil Paid Rights or Fully Paid Rights held in CREST should be collected and accounted for to HMRC by CREST.

No stamp duty or SDRT will be payable on the registration of Provisional Allotment Letters or split Provisional Allotment Letters, whether by the original holders or their renouncees.

(C) Subsequent dealings in New Ordinary Shares

Except in relation to depositary receipt systems and clearance services (to which the special rules outlined below apply), any subsequent dealings in New Ordinary Shares will be subject to stamp duty or SDRT in the normal way. Subject to an exemption for certain low value transactions, the transfer on sale of New Ordinary Shares effected outside CREST will generally be liable to stamp duty at the rate of 0.5 per cent. of the amount or value of the consideration payable (rounded up to the nearest multiple of £5) or, if an unconditional agreement to transfer New Ordinary Shares is not completed by a duly stamped transfer, or where the transfer is effected in CREST, SDRT at the rate of 0.5 per cent. of the amount or value of the consideration payable.

Where New Ordinary Shares are transferred (a) to, or to a nominee or an agent for, a person whose business is or includes the provision of clearance services or (b) to, or to a nominee or an agent for, a person whose business is or includes issuing depositary receipts, stamp duty or SDRT will generally be payable at the higher rate of 1.5 per cent. of the amount or value of the consideration given or, in certain circumstances, the value of the New Ordinary Shares. There is an exception from the 1.5 per cent. charge on the transfer to, or to a nominee or agent for, a clearance service where the clearance service has made and maintained an election under section 97A(1) of the Finance Act 1986, which has been approved by HMRC. In these circumstances, SDRT at the rate of 0.5 per cent. of the amount or value of the consideration payable for the transfer will arise on any transfer of shares in the Company into such an account and on subsequent agreements to transfer such shares within such account. Any liability for stamp duty or SDRT in respect of a transfer into a clearance service or depositary receipt system, or in respect of a transfer within such a service, which does arise will strictly be accountable by the clearance service or depositary receipt system operator or their nominee, as the case may be, but will, in practice, be payable by the participants in the clearance service or depositary receipt system.

PART B: UNITED STATES TAXATION

1. Certain US federal income tax considerations

TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, HOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF US FEDERAL TAX ISSUES IN THIS PROSPECTUS IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY HOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON HOLDERS UNDER THE US INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS INCLUDED HEREIN BY THE ISSUER IN CONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) BY THE ISSUER OF THE TRANSACTIONS OR MATTERS

ADDRESSED HEREIN; AND (C) HOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISER.

The following is a summary of certain material US federal income tax consequences of the receipt, exercise and disposition of Nil Paid Rights and Fully Paid Rights (for the purposes of this Part B of this Part XI only, together the Rights) pursuant to the Rights Issue, as well as the acquisition, ownership and disposition of Rights Issue Shares, in either case, by a US Holder. This summary deals only with US Holders that receive Rights in the Rights Issue and will hold the Rights and Rights Issue Shares as capital assets (generally, property held for investment) within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (for the purposes of this Part B of this Part XI only, the Code). The discussion does not cover all aspects of US federal income taxation that may be relevant to, or the actual tax effect that any of the matters described herein will have on, the receipt, exercise or disposition of Rights or the acquisition, ownership or disposition of Rights Issue Shares by particular investors, and does not address state, local, foreign or other tax laws. This summary also does not address tax considerations applicable to investors that own (directly or indirectly) 10 per cent. or more of the voting stock of the Company, nor does this summary discuss all of the tax considerations that may be relevant to certain types of investors subject to special treatment under US federal income tax law (such as banks, financial institutions, insurance companies, investors liable for the alternative minimum tax, individual retirement accounts and other tax-deferred accounts, regulated investment companies or real estate investment trusts, tax-exempt organisations, brokers or dealers in securities or currencies or traders in securities that elect to use a mark-to-market method of accounting, investors that will hold the Rights Issue Shares as part of straddles, hedging transactions or conversion transactions for US federal income tax purposes, investors whose functional currency is not USD and persons holding Rights or Rights Issue Shares in connection with a permanent establishment or fixed base outside the United States).

The US federal income tax treatment of a partner in a partnership (or owner of other business entity treated as a partnership for US federal income tax purposes) that holds Rights or Rights Issue Shares will depend on the status of the partner and the activities of the partnership. Partnerships (and entities that are treated as partnerships for US federal income tax purposes) and persons holding Rights or Rights Issue Shares through such partnerships should consult their tax advisers concerning the US federal income tax consequences to their partners of the acquisition, ownership, exercise, and disposition of Rights or Rights Issue Shares by the partnership.

The Company believes that it is not a PFIC for US federal income tax purposes, and does not expect to become a PFIC in the future. A non-US corporation is a PFIC in any taxable year in which, after taking into account the income and assets of the corporation and certain subsidiaries pursuant to applicable ''look-through rules'', either (i) at least 75 per cent. of its gross income is ''passive income'' or (ii) at least 50 per cent. of the average value of its assets is attributable to assets which produce passive income or are held for the production of passive income. The determination of PFIC status must be made annually, which is very fact specific and may be affected by changes in the Company's activities, revenue and assets subsequent to the Rights Issue, and there can be no assurance in this regard. Accordingly, it is possible that the Company may become a PFIC in the current taxable year or in future years. If the Company were to be treated as a PFIC for any taxable year when a US Holder owns or owned the Rights Issue Shares, materially adverse consequences could result to such US Holders for that year and all future years during which such US Holders retain such share, regardless of whether the Company continues to meet the PFIC test. The following discussion assumes that the Company is not, has not been and will not become, a PFIC.

This summary is based on the Code, its legislative history, existing and proposed regulations thereunder, published rulings and court decisions, all as of the date hereof and all subject to change at any time, possibly with retroactive effect. We have not requested, and will not request, a ruling from the IRS with respect to any of the US federal income tax consequences described below, and as a result there can be no assurance that the IRS will not disagree with or challenge any of the conclusions we have reached and describe herein.

THE SUMMARY OF US FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR GENERAL INFORMATION ONLY. ALL PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISERS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING THE RIGHTS AND RIGHTS ISSUE SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.

2. Taxation in Respect of Rights

(a) Receipt of Nil Paid Rights

The tax consequences of the receipt of Nil Paid Rights by a US Holder are not free from doubt. In particular, it is not clear whether the sale of Rights by the Underwriters, and the remittance of the proceeds from that sale to certain holders whose Nil Paid Rights were sold, should be treated as a sale and distribution by the Company, or as a distribution of Nil Paid Rights by the Company and a subsequent sale of those Nil Paid Rights (or as a deemed exercise of the Nil Paid Rights and subsequent sale of the corresponding Rights Issue Shares) by the relevant holders. If the sale and distribution were considered to be made by the Company, then the receipt of Nil Paid Rights would be taxable to US Holders as a dividend to the extent of the Company's current or accumulated earnings and profits, as described below (''Taxation in Respect of Rights Issue Shares—Dividends—General'').

However, based on the particular facts relating to the Nil Paid Rights and the sale of unexercised Nil Paid Rights, if any, by the Underwriters under UK law, we believe it is proper to take the position that a US Holder is not required to include any amount in income for US federal income tax purposes as a result of the receipt of the Nil Paid Rights, and that the holding period of the Nil Paid Rights will include the holding period of the Existing Ordinary Shares in respect of which such Nil Paid Rights were received. It is possible that the IRS will take a contrary view and that the view would be sustained. The remainder of this discussion assumes that the receipt of the Nil Paid Rights will not be a taxable event for US federal income tax purposes. US Holders should consult their own tax advisers regarding the US federal income tax treatment of the receipt of the Nil Paid Rights.

(b) Tax Basis in Nil Paid Rights

If, on the date of receipt, the fair market value of Nil Paid Rights is less than 15 per cent. of the fair market value of the Existing Ordinary Shares with respect to which Nil Paid Rights are received, Nil Paid Rights will be allocated a zero tax basis unless the US Holder affirmatively elects to allocate a portion of such US Holder's adjusted tax basis in its Existing Ordinary Shares to the Nil Paid Rights in proportion to the relative fair market values of the US Holder's Existing Ordinary Shares and Nil Paid Rights received determined on the date of receipt. This election must be made in the US Holder's timely filed US federal income tax return for the taxable year in which Nil Paid Rights are received and is irrevocable.

If, on the date of receipt, the fair market value of Nil Paid Rights is 15 per cent. or more of the fair market value of the Existing Ordinary Shares with respect to which Nil Paid Rights are received, then, except as discussed below (''Expiration of Nil Paid Rights''), the US Holder's adjusted tax basis in its Existing Ordinary Shares must be allocated between the Existing Ordinary Shares and Nil Paid Rights received in proportion to their fair market values determined on the date of receipt.

(c) Sale or Other Disposition of Nil Paid Rights

Upon a sale or other disposition of Nil Paid Rights by a US Holder, a US Holder will generally recognise gain or loss equal to the difference, if any, between the USD value of the amount realised and the US Holder's adjusted tax basis in the Nil Paid Rights. A US Holder's holding period in the Nil Paid Rights will include the holding period in the Existing Ordinary Shares with respect to which the Nil Paid Rights were distributed. Any gain or loss generally will be capital gain or loss, and will be a long-term capital gain or loss if the US Holder's holding period in the Nil Paid Rights exceeds one year. Any gain or loss will generally be US source. If the US Holder is not a corporation, long-term capital gains are generally eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

The amount realised on a sale or other disposition of the Nil Paid Rights for an amount in a currency that is not USD (for the purpose of this section such non-USD currency shall be referred to as ''foreign currency'') will be the USD value of this amount on the date of sale or disposition. On the settlement date, the US Holder generally will recognise foreign currency exchange gain or loss (taxable as ordinary income or loss) equal to the difference, if any, between the USD value of the amount received based on the exchange rates in effect on the date of sale or other disposition and the settlement date. However, in the case of the Nil Paid Rights traded on an established securities market (as defined under the applicable Treasury regulations) that are sold by a cash basis US Holder (or an accrual basis US Holder that properly elects such treatment), the amount realised will be based on the exchange rate in effect on the settlement date for the sale, and no foreign currency exchange gain or loss will be recognised at that time. Such an election by an accrual basis US Holder must be applied consistently from year to year and cannot be revoked without the consent of the IRS. It is unclear if this exception will apply to any sale of the Nil Paid Rights, in part because it is uncertain whether an active trading market on an established securities market will develop for the Nil Paid Rights.

(d) Expiration of Nil Paid Rights

If a US Holder allows the Nil Paid Rights to expire without selling or exercising them and does not receive any proceeds from the sale of Rights by the Underwriters, the holder will not recognise any loss upon the expiration of the Nil Paid Rights, and the holder will not be entitled to allocate any basis to the Nil Paid Rights.

(e) Exercise of Nil Paid Rights

A US Holder will generally not recognise income upon the receipt of Fully Paid Rights pursuant to the exercise of Nil Paid Rights or upon the receipt of Rights Issue Shares acquired through Fully Paid Rights. A US Holder's basis in the Fully Paid Rights and subsequently the Rights Issue Shares will equal the sum of the USD value of the Rights Issue Price determined at the spot rate on the date of exercise (or in the case of cash basis and electing accrual basis taxpayers, the settlement date) and the US Holder's basis, if any, in the Nil Paid Rights exercised. A US Holder's holding period in each Rights Issue Share acquired through the exercise of a Nil Paid Right will begin with and include the date of exercise. A United States Holder that exercises Nil Paid Rights received in this Rights Issue after disposing of the Existing Ordinary Shares with respect to which the Nil Paid Rights were received is urged to consult a tax adviser regarding the potential application of the ''wash sale'' rules under Section 1091 of the Code.

(f) Sale or other disposition of Fully Paid Rights

Upon a sale or other disposition of Fully Paid Rights, a US Holder will generally recognise capital gain or loss equal to the difference, if any, between the USD value of the amount realised (as determined on the date of the sale or other disposition) and the US Holder's adjusted tax basis in the Fully Paid Rights. A US Holder's holding period in Fully Paid Rights will not include the holding period in the Existing Ordinary Shares with respect to which the Nil Paid Rights were distributed. Accordingly, any gain or loss is expected to be short-term capital gain or loss. Any gain or loss will generally be US source. For the US federal income taxation of an amount realised in a foreign currency from a sale or other disposition of the Fully Paid Rights, refer to the discussion above (''Taxation in Respect of Rights—Sale or Other Disposition of Nil Paid Rights'').

3. Taxation in Respect of Rights Issue Shares

(a) Dividends

General. Distributions paid by the Company out of current or accumulated earnings and profits (as determined for US federal income tax purposes) will generally be taxable to a US Holder as foreign source dividend income, and will not be eligible for the dividends received deduction allowed to corporations. Distributions in excess of current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the US Holder's basis in the Rights Issue Shares and thereafter as capital gain. However, the Company does not maintain calculations of its earnings and profits in accordance with US federal income tax accounting principles. US Holders should therefore assume that any distribution by the Company with respect to Rights Issue Shares will constitute ordinary dividend income. US Holders should consult their own tax advisers with respect to the appropriate US federal income tax treatment of any distribution received from the Company.

Subject to applicable limitations, dividends paid by the Company will generally be taxable to a non-corporate US Holder at the special reduced rate normally applicable to long-term capital gains, provided the Company qualifies for the benefits of the tax treaty between the United States and the United Kingdom. The Company expects to qualify for the benefits of such treaty. A US Holder will be eligible for this reduced rate only if it has held the Rights Issue Shares for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date.

Prospective purchasers should consult their tax advisers concerning the applicability of the foreign tax credit and source of income rules to dividends on the Rights Issue Shares.

Dividends paid in foreign currency will be included in income in a USD amount calculated by reference to the exchange rate in effect on the day the dividends are received by the US Holder, regardless of whether the foreign currency dividends are converted into USD at that time. If dividends received in foreign currency are converted into USD on the day they are received, the US Holder generally will not be required to recognise foreign currency gain or loss in respect of the dividend income. If instead the foreign currency is converted at a later date, any currency gains or losses resulting from the conversion of the foreign currency will be treated as US source ordinary income or loss.

(b) Sale or other Disposition

A U.S. Holder's tax basis in a Rights Issue Share will generally be the USD cost of a Fully Paid Right as described above in paragraph 2(e) above (''Taxation in Respect of Rights—Exercise of Nil Paid Rights'').

A US Holder generally will recognise capital gain or loss on a sale or other disposition of Rights Issue Shares equal to the difference, if any, between the amount realised on the sale or other disposition and the US Holder's adjusted tax basis in the Rights Issue Shares. This capital gain or loss will be long-term capital gain or loss if the US Holder's holding period in the Rights Issue Shares exceeds one year. However, regardless of a US Holder's actual holding period, any loss may be long-term capital loss to the extent the US Holder receives a dividend that qualifies for the reduced rate described above under ''Dividends— General'' and exceeds 10 per cent. of the US Holder's basis in (or, in certain cases, the fair market value of) its Rights Issue Shares. As discussed above, if the US Holder is not a corporation, long-term capital gains for taxable dispositions of Rights Issue Shares are generally eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

The amount realised on a sale or other disposition of Rights Issue Shares for an amount in foreign currency will be the USD value of this amount on the date of sale or disposition. On the settlement date, the US Holder generally will recognise foreign currency exchange gain or loss (taxable as ordinary income or loss) equal to the difference, if any, between the USD value of the amount received based on the exchange rates in effect on the date of sale or other disposition and the settlement date. However, in the case of Rights Issue Shares traded on an established securities market that are sold by a cash basis US Holder (or an accrual basis US Holder that so elects), the amount realised will be based on the exchange rate in effect on the settlement date for the sale, and no exchange gain or loss will be recognised at that time. Any currency gain or loss realised on the settlement date or on a subsequent conversion of the foreign currency into USD will generally be US source ordinary income or loss.

(c) Disposition of Foreign Currency

Foreign currency received on the sale or other disposition of a Rights Issue Share will have a tax basis equal to its USD value on the settlement date. Any gain or loss recognised on a sale or other disposition of a foreign currency will be US source ordinary income or loss.

4. Additional Tax on Passive Income

An additional 3.8 per cent. tax will generally be imposed on the ''net investment income'' of certain US Holders that are individuals, estates and trusts whose income exceeds certain thresholds. ''Net investment income'' generally includes the following: (1) gross income from interest and dividends other than from the conduct of a non-passive trade or business; (2) other gross income from a passive trade or business; and (3) net gain attributable to the disposition of property other than property held in a non-passive trade or business. Therefore, dividends on, and capital gains from the sale or other taxable disposition of the Nil Paid Rights and Rights Issue Shares may be subject to this additional tax.

5. Backup Withholding and Information Reporting

Dividends and other proceeds with respect to the Rights or Rights Issue Shares, by a US paying agent or other US intermediary will be reported to the IRS and to the US Holder as may be required under applicable regulations. In addition, payments that are subject to information reporting may be subject to backup withholding if the US Holder fails to provide an accurate taxpayer identification number or certification of exempt status or fails to report all interest and dividends required to be shown on its US federal income tax returns. Certain US Holders (including, among others, corporations) are not subject to backup withholding. Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules are available to be credited against a US Holder's US federal income tax liability and may be refunded to the extent they exceed such liability, provided the required information is provided to the IRS. US Holders should consult their tax advisers as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.

(a) Transfer Reporting Requirements

A US Holder who purchases Rights Issue Shares pursuant to the exercise of Nil Paid Rights may be required to file Form 926 (or similar form) with the IRS if the purchase, when aggregated with all transfers of cash or other property made by the US Holder (or any related person) to the Company within the preceding 12 month period, exceeds US\$100,000 (or its equivalent). US Holders should consult their own tax advisers with respect to whether they should file Form 926. A US Holder who fails to file any such required form could be required to pay a penalty equal to 10 per cent. of the gross amount paid for the Rights Issue Shares (subject to a maximum penalty of US\$100,000, except in cases of intentional disregard). US Holders should consult their tax advisers with respect to this or any other reporting requirement that may apply to an acquisition of the Rights Issue Shares.

(b) Foreign Financial Asset Reporting

Rights or Rights Issue Shares held by non-corporate US Holders may be subject to information reporting unless the Rights or Rights Issue Shares are held in an account at a US financial institution. US Holders should consult their tax advisers regarding the application of this legislation.

PART XII

DIRECTORS, RESPONSIBLE PERSONS, CORPORATE GOVERNANCE AND EMPLOYEES

1. Persons responsible

The Company, the Cineworld Directors and the Proposed Directors accept responsibility for the information contained in this document. To the best of the knowledge of the Company, the Cineworld Directors and the Proposed Directors (who have taken all reasonable care to ensure that such is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. Cineworld Directors

The following table sets out information relating to each of the Cineworld Directors as at the date of this document:

Name	Age	Current position in respect of Cineworld
Executive Directors:
Stephen Wiener* .	62	Chief Executive Officer
Philip Bowcock	45	Chief Financial Officer
Non-Executive Directors:
Anthony Bloom .	74	Chairman
David Maloney	58	Senior Independent Director
Martina King	52	Non-Executive Director
Eric (Rick) Senat	64	Non-Executive Director
Peter Williams .	60	Non-Executive Director

The business address of the Cineworld Directors is Power Road Studios, 114 Power Road, Chiswick, London W4 5PY.

3. Directors' Profiles

Anthony Bloom (Chairman)

Anthony Bloom joined the Board in October 2004 as Chairman and has served as Chairman of Cine-UK Limited since the business was founded in 1995. He was previously Chairman and Chief Executive of The Premier Group Limited (South Africa) and a director of Barclays Bank (South Africa), South African Breweries and Liberty Life Assurance. Mr Bloom holds Bachelor of Commerce and Bachelor of Law degrees (cum laude) from the University of Witwatersrand in South Africa and a Masters of Law degree from Harvard Law School. He was a Sloan Fellow at the Stanford Graduate School of Business. In 2002, Mr Bloom was awarded the degree of Doctor of Law (H.C.) by the University of Witwatersrand in recognition of his contribution towards the establishment of a non-racial society in South Africa.

Stephen Wiener (Chief Executive Officer)

Stephen Wiener joined the Board in October 2004. He has 43 years experience in the cinema industry, starting in the US as an usher while a full time student, and rising through various roles culminating in Vice President for Cineplex Odeon in New York City. He then moved to Warner Bros Europe in 1991 to become Managing Director. In 1995, he left to found Cine-UK Limited and developed the business into a chain of 34 cinemas before it was acquired by Blackstone in October 2004. At the time of the UGC acquisition, he was appointed Chief Executive Officer of the combined Cineworld Group. He is also a non-Executive Director of Digital Cinema Media Limited, the screen advertising company 50 per cent. owned by Cineworld.

Philip Bowcock (Chief Financial Officer)

Philip Bowcock joined the Board in December 2011 as the Chief Financial Officer. His experience spans senior financial roles in the property, retail and leisure industries, having acted as Financial Controller at Barratt Developments plc, Finance Director for Tesco's UK property portfolio, Vice President of Finance at Hilton Group and latterly as Finance Director at Luminar Group Holdings plc. Mr Bowcock has a degree in Economic History and is a chartered management accountant.

David Maloney (Senior Independent Director)

David Maloney joined the Board in May 2006. He is the Senior Independent Director, Chairman of the Audit Committee and a member of the Nomination and Remuneration Committees. Mr Maloney is currently Deputy Chair of Micro Focus International plc and the Senior Independent non-Executive Director of Enterprise Inns plc and Stock Spirit Group plc. He is also the Chairman of Reed & Mackay Limited, Brandon Hire Limited and the Board of Trustees of Make A Wish Foundation (UK). Previously, he was the Chairman of Hoseasons Holdings Ltd, a Director of Virgin Mobile Holdings (UK) plc, Ludorum plc and Carillion plc and held a number of senior positions, including Chief Financial Officer for Le Meridien Hotels & Resorts, Thomson Travel Group plc and Avis Europe plc. Mr Maloney holds a degree in Economics from Heriot Watt University, Edinburgh and is a fellow of the Chartered Institute of Management Accountants.

Martina King (Non-Executive Director)

Martina King joined the Board in July 2010. She is a member of the Audit, Nomination and Remuneration Committees. Martina is currently CEO of Featurespace and a non-Executive Director of Capita Plc and Debenhams Plc. Previous roles include Managing Director (London Stations) of Capital Radio PLC and MD of Yahoo! UK and Europe.

Eric (Rick) Senat (Non-Executive Director)

Rick Senat joined the Board in July 2010 and is a member of the Audit, Nomination and Remuneration Committees. He has over 40 years' experience in the film industry. Rick joined Warner Bros in 1976, becoming its Senior Vice-President for Business Affairs in Europe. Among the projects with which he was closely associated are the ''Harry Potter'' films, ''Greystoke'', ''Batman'', ''Superman'' and many more. He retired from Warner Bros after 25 years' service. He was a director of the legendary and recently revived film company Hammer Film Productions, and has served as Vice Chair of the British Film Institute. Currently, he is a partner in the Blair Partnership—a literary agency, a non-Executive Director of Pottermore Limited and Bank Leumi (UK) plc and Chairman of the London Film Museum. Mr Senat is a graduate of University College London and a solicitor.

Peter Williams (Non-Executive Director)

Peter Williams joined the Board in May 2006. He is Chairman of the Remuneration Committee and a member of the Audit and Nomination Committees. He is the Senior Independent Director of Sportech PLC; Chairman of both Mister Spex GmbH, an online eyewear retailer based in Berlin, and OfficeTeam Limited, an office supplies group; a non-Executive Director of Silverstone Holdings Limited and a trustee of the Design Council. In the past, he has also served on the boards of ASOS plc, the EMI group, Blacks Leisure Group plc, JJB Sports plc, GCap Media plc, and Capital Radio Group plc. In his executive career, he was Chief Executive at Alpha Group plc and prior to that Chief Executive of Selfridges plc where he also acted as Chief Financial Officer for over 10 years. Mr Williams has a degree in Mathematics from Bristol University and is a chartered accountant.

4. Proposed Directors

In addition to the Cineworld Directors, following completion of the Combination, the Proposed Directors will be directors of the Enlarged Group. The Proposed Directors are as follows:

Name	Age	Position as from completion of the Combination
Moshe (Mooky) Greidinger	61	Chief Executive Officer
Israel Greidinger .	52	Chief Operating Officer
Scott Rosenblum .	64	Non-Executive Director
Arni Samuelsson	71	Non-Executive Director

5. Profiles of the Proposed Directors

Moshe (Mooky) Greidinger

Moshe Greidinger was appointed Chief Executive Officer of CCI in 1984. Moshe Greidinger joined the Existing Cinema City Group in 1976. Since 1984, he has held executive positions with the Existing Cinema City Group with substantially the same responsibilities as he presently maintains. Moshe Greidinger has also served as a director and Deputy Managing Director of Israel Theatres Limited since 1983 and Co-Chairman of the Cinema Owners Association in Israel since August 1996. He is the brother of Israel Greidinger and the son of the late Coleman Greidinger. Moshe achieved the ''Exhibitor of the Year Award'' at ShoWest in Las Vegas in 2004 and ''International Exhibitor of the Year Award'' at CineEurope, in Amsterdam in 2011, with special recognition for having developed new markets in CEE. Moshe has served for the last 12 years as head of the board of trustees of the Hebrew Reali School of Haifa.

Israel Greidinger

Israel Greidinger joined the Existing Cinema City Group in 1994 and was appointed as Chief Financial Officer of CCI in 1995. Since that time, he has held executive positions with the Existing Cinema City Group with substantially the same responsibilities as he presently maintains. Israel Greidinger has also served as a director of Israel Theatres Limited since 1994. From 1985 to 1992, Israel Greidinger served as Managing Director of C.A.T.S. Limited (Computerised Automatic Ticket Sales), and from 1992 to 1994 he was President and Chief Executive Officer of Pacer C.A.T.S. Inc. He is the brother of Moshe Greidinger and the son of the late Coleman Greidinger.

Scott Rosenblum

Scott Rosenblum was appointed as a member of the Supervisory Board of CCI in 2004. He became Vice Chairman of the Supervisory Board of CCI from 19 November 2010 until 14 November 2011, when he was appointed as Chairman of the Supervisory Board. He has been Chairman of the Remuneration Committee and the Appointment Committee of CCI since November 2006 and is also a member of the Audit Committee. He is licensed as a lawyer and is admitted to the New York Bar Association. For the past 20 years he has been a partner in the law firm of Kramer Levin Naftalis & Frankel LLP, New York, and was Managing Partner between 1994 and 2000. He is currently on the Executive Committee of Kramer Levin Naftalis & Frankel LLP and is Co-Chairman of its Corporate Department. He is currently a director of Temco Service Industries, Inc., Investec USA Holdings Corp and Investec Securities (US) LLC. He is also a legal adviser to Israel Theatres Ltd., the indirect majority shareholder of CCI.

Arni Samuelsson

6JAN201422070645 6JAN201422070645 6JAN201422070645 Arni Samuelsson has over 40 years of cinema exhibition and film distribution experience, principally through SAMfelagi ´ (Samfilm)—a cinema exhibitor and film distributor in Iceland, of which he has been joint owner and chief executive officer since it was formed in 1975. He has been chief executive officer of Samfilm EHF (SAMfelagi ´ 's distribution arm) since 1975, and chief executive officer at SAMcinema (SAMfelagi ´ 's cinema arm) since the same year. Prior to this, Arni Samuelsson was a director and owner of Vikurbaer, a supermarket business in Keflavik, from 1972 until its sale in 1982.

6. Interests of the Cineworld Directors

6.1 Interests of the Cineworld Directors in Ordinary Shares

As at the Latest Practicable Date, the interests (all of which are beneficial) of the Cineworld Directors and the Proposed Directors, their immediate families and (so far as is known to them or could with reasonable diligence be ascertained by them) their connected persons (within the meaning of section 96B of FSMA) in Ordinary Shares, including: (i) those arising pursuant to transactions notified to Cineworld pursuant to DTR 3.1.2R; or (ii) those of connected persons of the Cineworld Directors or the Proposed Directors, which would, if such connected person were a Cineworld Director or Proposed Director be required to be disclosed under (i) above, together with such interests as are expected to subsist immediately following completion of (i) the Rights Issue; and (ii) the Transaction, are set out below:(1)

	As at the Latest Practicable Date			Interests immediately following completion of the Rights Issue	Interests immediately following completion of the Transaction
	Number of Ordinary Shares	Per cent. of issued share capital of Cineworld	Number of Ordinary Shares	Per cent. of issued share capital of the Enlarged Group	Number of Ordinary Shares	Per cent. of issued share capital of the Enlarged Group
Cineworld Directors
Anthony Bloom	1,723,224(2)	1.1	2,158,006	1.1	2,158,006	0.8
Stephen Wiener	1,988,677	1.3	1,991,177	1.0	1,991,177	0.8
Philip Bowcock	10,000	0.0	13,200	0.0	13,200	0.0
David Maloney	20,000	0.0	26,400	0.0	26,400	0.0
Martina King	1,942	0.0	2,563	0.0	2,563	0.0
Rick Senat	20,047	0.0	26,462	0.0	26,462	0.0
Peter Williams	40,000	0.0	52,800	0.0	52,800	0.0

Notes:

(1) The interests of the Cineworld Directors in Ordinary Shares following the Rights Issue and the Combination are based on the intentions of the Cineworld Directors set out in Section 8 of Part I (Letter from the Chairman) of this document and assuming that there is no exercise of options or awards under the Employee Share Schemes between the date of this document or any other issue of Ordinary Shares (other than the Rights Issue Shares) and completion of the Rights Issue and the Combination.

(2) Shares are held by a nominee for a Jersey based discretional trust, of which Mr Bloom is one of the potential beneficiaries.

Taken together, the combined percentage interest of the Cineworld Directors in the issued share capital of Cineworld as at the Latest Practicable Date was approximately 2.54 per cent. Taken together, the combined percentage interest in the issued ordinary share capital of Cineworld of the Cineworld Directors and the Proposed Directors immediately following completion of the Rights Issue and the Combination will be approximately 1.62 per cent., assuming that the Cineworld Directors take up their rights under the Rights Issue as expected.

Details of options over Ordinary Shares and interests in the Employee Share Schemes held by the Cineworld Directors are set out below in Section 6.2 of this Part XII. They are not included in the interests of the Cineworld Directors shown in the table above.

Moshe Greidinger, Israel Greidinger and other members of the Greidinger family are, together, the indirect majority shareholders in ITIT, which holds 53.89 per cent. of the shares in CCI, which will hold 24.9 per cent. of the Ordinary Shares following completion of the Combination.

6.2 Interests of Cineworld Directors in Ordinary Shares pursuant to the Employee Share Schemes

A description of each of the Employee Share Schemes can be found at Section 11 of this Part XII.

In addition to their interests as detailed above, as at the Latest Practicable Date, the Cineworld Directors held the following options in respect of Ordinary Shares, and awards of Ordinary Shares, under the terms of the Employee Share Schemes:

(i) Cineworld Group Sharesave Scheme

	At 28 Dec 2012	Lapsed	At Latest Practicable Date	Exercise price	Date from which exercisable	Expiry date
Stephen Wiener	5,232	—	5,232	£1.72	Jun 2015	Nov 2015
Philip Bowcock	5,232	—	5,232	£1.72	Jun 2015	Nov 2015

(ii) Cineworld Group Performance Share Plan

Name of Director	At 28 Dec 2012	Awarded	Lapsed	Exercised	At Latest Practicable Date	Exercise price	Date from which exercisable(5)	Expiry date
Stephen Wiener .	109,774(1)	—	1,284	108,490	—	£Nil	Mar 2013	Sept 2013
	153,205(2)	—	—	—	153,205	£Nil	Mar 2014	Sept 2014
	159,683(3)	—	—	—	159,683	£Nil	Mar 2015	Sept 2015
	—	169,104(4)	—	—	169,104	£Nil	Mar 2016	Sept 2016
Philip Bowcock	87,500(3)	—	—	—	87,500	£Nil	Mar 2015	Sept 2015
	—	92,699(4)	—	—	92,699	£Nil	Mar 2016	Sept 2016

(1) Mid-market closing price of a Cineworld Group plc share the date before grant was £1.85

(2) Mid-market closing price of a Cineworld Group plc share the date before grant was £2.0825.

(3) Mid-market closing price of a Cineworld Group plc share the date before grant was £2.13.

(4) Mid-market closing price of a Cineworld Group plc share the date before grant was £2.7875.

(5) Subject to satisfaction of the relevant performance conditions (details of which are set out below).

(iii) Cineworld Group Company Share Option Plan

Name of Director	At 28 Dec 2012	Awarded	Lapsed	At Latest Practicable Date	Exercise price	Date from which exercisable(2)	Expiry date
Stephen Wiener	5,050(1)	—	60	4,990	£1.98	Jul 2013	Jun 2020
	4,801(1)	—	—	4,801	£2.08	Mar 2014	Feb 2021
	4,694(1)			4,694	£2.13	Mar 2015	Mar 2022
Philip Bowcock	4,694(1)	—	—	4,694	£2.13	Mar 2015	Mar 2022
	—	3,587(1)	—	3,587	£2.7875	Mar 2016	Mar 2023

(1) HM Revenue and Customs approved share options.

(2) Subject to satisfaction of the relevant performance conditions (details of which are set below).

7. Remuneration and Benefits

This section provides information on the remuneration arrangements for the Cineworld Directors and the Proposed Directors.

7.1 Cineworld Directors' remuneration

The aggregate remuneration for the Executive Directors for FY 2012 was £1,334,000 (2011: £1,453,000).

Salaries for the SMT are reviewed annually by the Remuneration Committee. The Cineworld Board approves the overall budget for employee salary increase and the Remuneration Committee agrees the specific increases for the SMT. For the members of the SMT below the level of the Cineworld Board, the Remuneration Committee receives a recommendation from the Chief Executive Officer which it reviews and approves as appropriate. In determining appropriate salary levels, the Remuneration Committee takes into account the progress made by the Cineworld Group and also the packages receives by similar individuals in companies whose activities are comparable with the Cineworld Group. Salaries for the Executive Directors are set with reference to individual responsibilities, skill, experience and performance.

Details of the remuneration for the Cineworld Directors for FY 2012 are as follows:

Fees/Basic Salary	Performance Bonus	Benefits	Pension contributions	Total inc. pension contributions 31 Dec. 2012	Total inc. pension contributions 31 Dec. 2011
£	£	£	£	£	£

463,000	278,000	36,000	93,000	870,000	863,000
255,000	140,000	18,000	51,000(1)	464,000	27,000

100,000	—	—	—	100,000	100,000
53,000	—	—	—	53,000	54,000
38,000	—	—	—	38,000	38,000
38,000	—	—	—	38,000	38,000
53,000	—	—	—	53,000	53,000
1,000,000	418,000	54,000	144,000	1,616,000	1,173,000

Notes:

(1) Philip Bowcock receives a pension allowance for this amount. For the purposes of this disclosure it has been shown as a pension contribution.

(2) This table does not include the remuneration of Thomas McGrath (who resigned on 15 May 2013). Details of the remuneration of this director can be found on page 49 of the Cineworld Group's 2012 Annual Report and Accounts.

(a) Executive Directors

Executive Directors' remuneration currently comprises an annual salary, a performance-related bonus, a share-based LTIP, pension contributions and other benefits.

The level of the performance-related bonus is determined by the Remuneration Committee based on the overall performance of the Cineworld Group in meeting its primary EBITDA financial objectives. With effect from the 2013 financial year, the Remuneration Committee has agreed that the level of this bonus will be reduced, in light of weighting bonus arrangements towards longer-term performance and thereby increasing the level of awards under the LTIP. These changes will be implemented fully for the 2013 financial year for the Chief Executive Officer and for the 2014 financial year for the Chief Financial Officer, who joined part way through the transitional arrangements.

In addition, the Executive Directors receive further benefits, including a company car or car allowance, life insurance, permanent health insurance, private medical cover and, for the Chief Executive Officer only, a driver.

The Executive Directors are, under the terms of their service contracts, entitled to an annual review of their base salary each year. In the case of the Chief Executive Officer, a minimum increase in line with the Retail Prices Index must be made. Stephen Wiener's and Philip Bowcock's base salaries were both increased by 3.6 per cent. with effect from 1 July 2012. Following Completion it is proposed that Philip Bowcock's annual salary will increase to £375,000.

Cineworld has agreed with Stephen Wiener that his employment will end on 31 March 2014 and he will then be paid £349,060 representing nine months salary and contractual benefits, a further payment of £70,585 to the company pension scheme on his behalf subject to the scheme and HMRC rules and, subject to applicable performance targets being achieved, a time pro rated bonus for 2014. He will also retain the use of his car and driver until 31 December 2014 and be covered by the Company's private medical insurance until 31 March 2017, or in each case until he finds new employment (which in the case of the medical insurance provides equivalent cover). His awards under the 2007 Performance Share Plan are retained and will vest on the normal vesting dates subject to the satisfaction of applicable performance targets and on a time pro rated basis and his awards under the Company Share Option Plan shall vest and become exercisable from 31 March 2014 on a time pro rated basis.

(b) Non-Executive Directors

Remuneration for Non-Executive Directors, other than the Chairman (whose fee is determined by the Remuneration Committee), is determined by the Cineworld Board after taking into account appropriate advice, and no Non-Executive Director participates in discussions relating to the setting of his or her own remuneration.

There was no increase in the fees paid to the Chairman or the Non-Executive Directors during 2012. With effect from 1 June 2013, the basic fee for a Non-Executive Director was increased from £33,000 to £41,000 per annum. No additional fee of £5,000 per annum was paid thereafter for being a member of a particular committee, however an additional fee of £14,000 per annum (previously £5,000 per annum) is paid to each of the chairmen of the Audit and Remuneration Committees and the Senior Independent Director receives an additional fee of £2,000 per annum. The Non-Executive Directors do not receive any share options, bonuses or other performance-related payments nor do they receive any pension entitlement or other benefits.

7.2 Proposed Directors' Remuneration

As required under UK law, Cineworld will be putting a remuneration policy to Shareholders for their approval at its annual general meeting in 2014. It is anticipated that the remuneration for the Proposed Directors will be in line with that policy.

8. Directors' service contracts and letters of appointment

8.1 Cineworld Directors' service contracts and letters of appointment

	Contract Date	Notice Period
Executive Directors
Stephen Wiener	23 April 2007	12 months
Philip Bowcock	16 November 2011	6 months
Non-Executive Directors
Anthony Bloom .	7 October 2004	1 month
David Maloney	22 May 2006	1 month
Martina King	2 July 2010	1 month
Eric (Rick) Senat	2 July 2010	1 month
Peter Williams .	22 May 2006	1 month

Although Cineworld is not a FTSE 350 company, Cineworld follows best practice for larger companies under the UK Corporate Governance Code with regards to the annual re-election of directors. At the 2013 AGM, all the current Cineworld Directors stood for re-election. This is more than required by the Articles, which require only that a third of the Cineworld Directors stand for re-election.

The Company may, in lieu of giving notice, terminate an Executive Director's service contract by making a payment equivalent to 95 per cent. (in the case of the Chief Executive Officer) and 100 per cent. (in the case of the Chief Financial Officer) of base salary and contractual benefits for the notice period. In this event, the relevant Executive Director would not be entitled to any bonus for his notice period, but would be eligible for a pro rata bonus for the period up to the date of the termination of his contract. The Company's policy is to endeavour to minimise any payment on early termination by insisting on mitigation of any loss where possible.

The Non-Executive Directors, including the Chairman, are appointed pursuant to letters of appointment. The appointment of each Non-Executive Director is terminable on notice unless their appointment is terminated by a resolution of the shareholders in general meeting or if they fail to be re-elected by shareholders in general meeting.

8.2 Proposed Directors' service contracts and letters of appointment

After due consideration and consultation with remuneration consultants, the Board has agreed that the following arrangements will be put in place in relation to the Proposed Directors from Completion.

Each Proposed Director that will sit on the Board as an executive director will have service agreements with an indefinite term that may be terminated by either party on written notice of 12 months for the new Chief Executive Officer and six months for the new Chief Operating Officer. Under these service agreements, the Company may terminate the agreements by making a payment in lieu of any unexpired notice period. The payment in lieu of notice is limited to the value of basic salary and contractual benefits. The Company may require the director to take garden leave while serving any period of notice.

Employment can be terminated immediately without notice or payment in lieu of notice if (in summary) the director commits a serious or persistent breach of his service agreement or regulatory rules, is guilty of gross misconduct, brings the Company into disrepute, is convicted of an arrestable criminal offence (other than non-custodial traffic offences), is adjudged bankrupt, is disqualified as a director, or resigns as a director.

The Company will pay Moshe Greidinger (as the new Chief Executive Officer) a salary of £550,000 per year. A bonus will be payable at the discretion of the Company and Moshe will also receive a company car or car allowance of £14,000 per year, a disturbance allowance of £40,000 per year, and pension contributions of 20 per cent. of basic salary, payable either as a salary supplement or into a nominated pension fund.

The Company will pay Israel Greidinger (as the new Chief Operating Officer) a salary of £375,000 per year. A bonus will be payable at the discretion of the Company and Israel will also receive a company car or car allowance of £14,000 per year, a disturbance allowance of £40,000 per year, and pension contributions of 20 per cent. of basic salary, payable either as a salary supplement or into a nominated pension fund.

Moshe and Israel will also receive life assurance cover, membership of the Company's medical insurance scheme and membership of the Company's permanent health insurance scheme.

Moshe Greidinger and Israel Greidinger will be eligible to participate in the Employee Share Schemes, details of which are set out in Section 11 of this Part XII. Where vesting of any award granted to Moshe and/or Israel would result in them holding Ordinary Shares, or an interest in Ordinary Shares, carrying 30 per cent. or more of the voting rights of the Company then Moshe and/or Israel can require the Company not to issue or transfer Ordinary Shares on vesting of such awards but instead to make them a cash payment equal to the market value of the Ordinary Shares comprised in the vested award.

Each Proposed Director that will sit on the Board as a non-executive director will be engaged pursuant to a letter of appointment with Cineworld, the particulars of which will be similar to those of the existing Non-Executive Directors.

9. Corporate governance and Board Committees

9.1 Board practices

The Cineworld Board is committed to ensuring that an appropriate standard of corporate governance is maintained throughout the Cineworld Group.

As at the date of this document, Cineworld is in full compliance with the provisions of the UK Corporate Governance Code, with the exception of the following: under Code provisions A.3.1 and B.1.1, Anthony Bloom (Chairman) was not considered by the Cineworld Board to be independent on his appointment as, at the time of his appointment, he also served as chairman on the board of another company within the Cineworld Group, Cine-UK Limited, a position he had held since the company's foundation in 1995. The Cineworld Board considers that, although Anthony Bloom was not viewed as independent on appointment, his knowledge and understanding of the business are such as to justify him retaining the role as Chairman.

9.2 Enlarged Group Board structure

The UK Corporate Governance Code recommends that at least half the members of the board of directors (excluding the chairman) of a public limited company incorporated in the UK should be independent in character and judgement and free from relationships or circumstances which are likely to affect, or could appear to affect, their judgement.

Currently, the Cineworld Board is composed of seven members, consisting of the Chairman and the Chief Executive Officer, together with one other Executive Director and four other Non-Executive Directors, all of whom were considered independent. David Maloney is the Senior Independent Director. Once reconstituted as the Enlarged Group Board, there would be 10 members, consisting of the Chairman and the Chief Executive Officer, together with two other Executive Directors and six other Non-Executive Directors, five of whom will be considered independent.

The roles of the Chairman and the Chief Executive Officer will continue to be distinct and separate under the Enlarged Group Board structure, with a clear division of responsibilities.

9.3 Board Committees

The Cineworld Board has established formal Nomination, Remuneration and Audit Committees with specific delegated powers, duties and responsibilities and written terms of reference, the details of which are set out below. Following the Combination, the membership of those committees will be reviewed in light of the changes to the Board, and amended as appropriate.

Nomination Committee

The Nomination Committee comprises David Maloney, Martina King, Rick Senat (chairman) and Peter Williams, all of whom are independent Non-Executive Directors. Anthony Bloom (Chairman of Cineworld) is also invited to attend meetings and does so, except when his own position is being discussed. The Nomination Committee meets at least twice a year and also as required to consider appointments to the Cineworld Board.

The responsibilities of the Nomination Committee include:

assisting the Cineworld Board in discharging its responsibilities relating to the composition of the Cineworld Board;
evaluating the balance of skills, knowledge and experience on the Cineworld Board, the size, structure and composition of the Cineworld Board, retirements and appointments of additional and replacement directors, the independence of directors and making appropriate recommendations to the Cineworld Board on such matters; and
ensuring that the Cineworld Directors have sufficient time to discharge their duties on appointment, and thereafter, with such matters being specifically addressed in the letters of appointment of the Non-Executive Directors.

Remuneration Committee

The Remuneration Committee comprises Martina King, David Maloney, Rick Senat and Peter Williams (chairman), all of whom are independent Non-Executive Directors. Stephen Wiener (Chief Executive Officer) is consulted on the remuneration packages of the other senior executives and attends discussions of the Remuneration Committee by invitation, except when his own position is being discussed. Anthony Bloom (Chairman of Cineworld) is also invited to attend meetings and does so, except when his own position is being discussed. The Remuneration Committee meets at least twice a year and otherwise as required. In 2012, it met four times.

The Remuneration Committee appointed Towers Watson as an external adviser in November 2008.

The Remuneration Committee assists the Cineworld Board in determining its responsibilities in relation to remuneration, including:

making recommendations to the Cineworld Board on the Company's policy on executive remuneration;
determining the individual remuneration and benefits package of each of the Executive Directors; and
monitoring and approving the remuneration of senior management below Cineworld Board level.

The Remuneration Committee does not deal with the fees paid to the Non-Executive Directors (with the exception of the Chairman).

Audit Committee

The Audit Committee comprises David Maloney (chairman), Martina King, Rick Senat and Peter Williams, all of whom are independent Non-Executive Directors and two of whom are considered to have recent and relevant financial experience for the purposes of the UK Corporate Governance Code. The Audit Committee may also invite other members of the SMT and/or the Cineworld Group's auditors to attend its meetings. The Audit Committee meets at least three times a year. In 2012, it met four times.

The Audit Committee assists the Cineworld Board in discharging is responsibility with regard to financial reporting, external and internal audits and controls, including:

• monitoring the financial reporting process;

reviewing the Company's annual financial statements;
reviewing and monitoring the extent of the non-audit work undertaken by external auditors;
advising on the appointment of external auditors; and
reviewing the level of risk and the effectiveness of the Company's internal audit activities, internal controls and risk management systems.

10. Employees

10.1 Cineworld Group

The average number of persons employed by the Cineworld Group (including the Cineworld Directors and part-time employees) for the three years ended 31 December 2010, 2011 and 2012 is set out below:

	2012	2011	2010
Head Office	215	155	138
Cinemas	5,226	4,517	4,487
Totals	5,441	4,672	4,625

10.2 Cinema City Business

The average number of persons employed by the Cinema City Business for the three years ended 31 December 2010, 2011 and 2012 is set out below:

	2012	2011	2010
Advertising	23	20	15
Distribution	61	65	61
Cinemas	3,506	4,167	3,506
Totals	3,590	4,252	3,582

11. Employee Share Schemes

Cineworld operates the following Employee Share Schemes:

(i) the Cineworld Group Performance Share Plan (PSP);
(ii) the Cineworld Group Sharesave Scheme (the Sharesave Scheme); and
(iii) the Cineworld Group Company Share Option Plan (CSOP).

The principal features of the Employee Share Schemes are summarised below. See also Section 6.2 of this Part XII for details in relation to options/awards held by the Cineworld Directors under the Employee Share Schemes.

Awards under the Employee Share Schemes can be satisfied using new issue shares, treasury shares or shares purchased in the market in conjunction with the Cineworld Group Employee Benefit Trust, established by the Company on 24 March 2006 with independent trustees based in Jersey. If new issue shares are used, the following limits will apply:

In any 10 year period, the number of shares which may be issued under the PSP and under any other executive share or option scheme established by the Company may not exceed 5 per cent. of the issued ordinary share capital of the Company from time to time.
In any 10 year period, the number of shares which may be issued under the PSP and under any employees' share or option scheme established by the Company may not exceed 10 per cent. of the issued ordinary share capital of the Company from time to time.

Cineworld operates a share retention policy under which each Executive Director is expected to build up over a period of time and then retain a holding in shares equal to 100 per cent. of his or her salary. As part of the process, each Executive Director is expected to retain 50 per cent. of any shares acquired under the PSP or on exercise of the options, after allowing for the sale of shares to pay tax, until such time as the Executive Director has built up such a holding.

11.1 Cineworld Group Performance Share Plan

General

Since 2008, awards have generally been made in March each year after the announcement of the Company's results for the preceding financial year.

At the Latest Practicable Date, a total of 1,701,123 Ordinary Shares were the subject of outstanding awards under the PSP.

Eligibility

Only Executive Directors and certain other members of the SMT, decided at the discretion of the Remuneration Committee, have been selected to participate in the PSP. Non-Executive Directors, including the Chairman, are not eligible to participate in the PSP.

Grant of options/awards

Under the PSP, awards may be made in the form of conditional shares that vest after three years or nil cost options over shares which become exercisable after three years or forfeitable shares that remain at risk of forfeiture for three years. Awards under the PSP are subject to continued employment and, in the case of the Executive Directors, the achievement of specified performance conditions.

Performance conditions

The performance conditions applying to all awards to the Executive Directors in each year are summarised in the annual remuneration report and are based on the average annual growth in EPS (calculated by comparing the EPS for the last financial year prior to the date of grant and the EPS for the financial year ending three years later) exceeding prescribed targets.

The conditions may be varied in exceptional circumstances following the grant of an award so as to achieve their original purpose, but not so as to make their achievement any more or less difficult to satisfy.

Overall limits

The maximum value of shares subject to an award to an individual in any financial year is 200 per cent. of annual base salary as at the award date.

Vesting

On vesting, participants will also receive additional shares or a cash sum equivalent to the dividends that would have been paid on the vested shares in respect of dividend record dates occurring between grant and vesting.

Variation of Capital

On any variation of the share capital of the Company or a demerger, special dividend or other similar event which affects the market price of shares to a material extent, the Remuneration Committee may make such adjustments as it considers appropriate to the number of shares comprised in an award and/or the option price.

Alterations

Except as noted below, the Remuneration Committee may at any time alter the PSP or the terms of any award granted under it. Save for minor alterations to benefit the administration of the PSP, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment, no alteration to the advantage of an individual participant shall be made to the provisions governing eligibility, individual or overall limits, the basis for determining the participant's entitlement to Shares, the ability to adjust on a variation of capital and the power of amendment without the prior approval of the Company's Shareholders in general meeting.

No alteration to the material disadvantage of participants shall be made unless the alteration is approved by the majority of participants who have indicated whether or not they approve the change.

11.2 Cineworld Group Sharesave Scheme

General

The Sharesave Scheme is an HM Revenue and Customs approved scheme open to all employees of nominated companies with the relevant qualifying period of service (currently three months) at the date of invitation.

As at the Latest Practicable Date, a total of 567,792 Ordinary Shares were the subject of outstanding options under the Sharesave Scheme.

Eligibility

Under the Sharesave Scheme, employees are eligible to acquire shares in the Company at a discount of up to 20 per cent. of the market value at grant if they agree to enter into a savings contract for a three (or five) year period.

Performance conditions

Consistent with the relevant legislation, no performance conditions apply.

Vesting

In normal circumstances, at the end of their savings contract, participants may use the proceeds of that contract to exercise their option.

Variation of Capital

Subject to HMRC approval, on any variation of the share capital of the Company the Board may make such adjustments as it considers appropriate to the number of shares in respect of which any option may be exercised and/or the option price.

Alterations

Except as noted below, the Board may at any time alter the Sharesave Scheme or the terms of any option granted under it. If an alteration is made to a key feature of the Sharesave Scheme then HMRC approval is required. Save for minor alterations to benefit the administration of the scheme, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment, no alteration to the advantage of an individual participant shall be made to the provisions governing eligibility, individual and overall limits, the basis for determining a participant's entitlement to shares, the ability to adjust on a variation of capital and the power of amendment without the prior approval of the Company's shareholders in general meeting.

No alteration to the material disadvantage of any participant shall be made unless the alteration is approved by a majority of those participants who have indicated whether or not they approve it.

11.3 Cineworld Group Company Share Option Plan

General

Since its approval in 2010 awards have generally been made each year following the announcement of the Company's results for the preceding financial year.

As at the Latest Practicable Date, a total of 166,135 Ordinary Shares were the subject of outstanding options under the CSOP.

Eligibility

Only Executive Directors and certain other members of the SMT, decided at the discretion of the Remuneration Committee, have been selected to participate in the CSOP which allows the grant of HM Revenue and Customs approved options and unapproved options. Non-Executive Directors, including the Chairman, are not eligible to participate in the CSOP.

Grant of options/awards

In 2012, each participant in the PSP (see further above) had a proportional part of their PSP award replaced by a HM Revenue and Customs approved share option granted under the CSOP. These grants were subject to identical performance conditions to the PSP awards made in 2012.

Overall limits

By legislation, the maximum value of approved share options that may be granted to an individual is £30,000. No unapproved share options under the CSOP have currently been granted.

Vesting

Options will generally become exercisable after a period of three years subject to the satisfaction of any applicable performance conditions.

Variation of Capital

On any variation in the share capital of the Company the number of shares comprised in each option and the option price may, subject in the case of approved options to the prior approval of HMRC, be adjusted in such manner as the Remuneration Committee deems appropriate.

Alterations

Subject to the following the CSOP may be altered by the Remuneration Committee from time to time although no alteration shall take effect to a key feature of the approved part of the plan without HMRC approval. Except for minor amendments to benefit the administration of the CSOP, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment, no amendment to the advantage of a participant will be made to the provisions concerning eligibility, the overall limits, the basis for determining an option holder's entitlement to shares, the ability to adjust on a variation of capital without the prior approval of the Company's shareholders in general meeting. No alteration that would adversely affect any rights of participants shall be made except with the consent of participants.

12. Pension benefits

All Cineworld Group employees are invited to participate in the Group Plan, which is a money purchase plan. All the major schemes operated by the Cineworld Group are money purchase in nature and have no defined benefits.

The Cineworld Group previously provided pensions benefits to employees on a defined benefit basis through two defined benefit schemes, the MGM Scheme in the UK, and the Adelphi Plan in Ireland.

The MGM Scheme was closed to future accrual from 31 May 2009, though the link to final pay at retirement was retained. The Company made contributions of £1.6 million during FY 2012 (FY 2011: £1.6 million). As at the 5 April 2012 funding valuation, there were 10 active members of the MGM Scheme. The Adelphi Plan is closed to new entrants and the current service cost is £nil. The Adelphi Plan had a surplus of £222,000 as at the last valuation on 1 April 2013. The Company was not required to make contributions under the Adelphi Plan in either FY 2011 or FY 2012.

Under their terms of engagement, the Executive Directors are entitled to an annual pension allowance of 20 per cent. of their base salary. The Chief Financial Officer has elected not to participate in the Group Plan and instead receives a pension allowance equivalent to 20 per cent. of his salary. Bonuses are not pensionable. In FY 2012, pension contributions made by the Cineworld Group in respect of the Executive Directors amounted to £144,000 (FY 2011: £115,000) (including the pension allowances made in respect of the Chief Financial Officer).

13. Directors' confirmations

Save as disclosed below, as at the date of this document, none of the Cineworld Directors or Proposed Directors have, during the five years prior to the date of this document:

(a) been convicted in relation to a fraudulent offence;

(b) been associated with any bankruptcies, receiverships or liquidations while acting in the capacity of a member of the administrative, management or supervisory bodies or as a partner, founder or senior manager of any partnership or company;
(c) been subject to any official public incrimination and/or sanctions by any statutory or regulatory authorities (including any designated professional bodies); or
(d) been disqualified by a court from acting as a director of a company or from acting as a member of the administrative, management or supervisory bodies of any company or from acting in the management or conduct of the affairs of any company.

Philip Bowcock was a director of Luminar Group Holdings plc, in respect of which an administrator was appointed on 27 October 2011, and was also a director of several of its subsidiaries (namely Luminar Oceana Limited, Luminar Liquid Limited, Luminar Dancing (2006) Limited, Luminar Finance Limited, Luminar Gems Limited, Luminar Holdings Limited, Luminar Leisure Limited, Luminar Lava Ignite Limited and Luminar IP (II) Limited) when administrators were appointed on 28 October 2011. The majority of the businesses and assets of the companies in administration were sold on 9 December 2011, following a short period of trading. Philip Bowcock remains a director of Luminar Oceana Limited.

Peter Williams was a director of JJB Sports plc when it was subjected to a company voluntary arrangement in March 2011. Peter Williams was also a director of Blacks Leisure Group plc when it was put through a pre-pack administration in January 2012.

14. Conflicts of interest

In respect of any Cineworld Director, there are no actual or potential conflicts of interests between any duties they have to the Company, either in respect of the Rights Issue, the Combination or otherwise, and the private interests and/or other duties they may also have. Save as disclosed in this Part XII, there are no interests, including conflicting ones, that are material to the Rights Issue or the Combination.

In respect of any Proposed Director, there are no actual or potential conflicts of interests between any duties they have to the Company, either in respect of the Rights Issue, the Combination or otherwise, and the private interests and/or other duties they may also have. Save as set out below, there are no interests, including conflicting ones, that are material to the Rights Issue or the Combination.

Moshe Greidinger, Israel Greidinger and other members of the Greidinger family are, together, the indirect majority shareholders of ITIT. ITIT is the majority shareholder of CCI. Moshe Greidinger and Israel Greidinger are also currently Chief Executive Officer and Chief Financial Officer of CCI, respectively.

Subject to obtaining approval of the CCI Shareholders at the CCI Shareholder Meeting, the following changes to CCI's board structure and composition will be made immediately following Completion:

(i) CCI's board structure will be changed from a two-tier to a unitary board;
(ii) Moshe Greidinger and Israel Greidinger will cease to be Chief Executive Officer and Chief Financial Officer, respectively, and will instead be appointed to the unitary board as non-executive directors of CCI; and
(iii) there will be a new appointee to the unitary board as an executive director.

No Cineworld Director or Proposed Director has or had a material interest in any significant contract with Cineworld or any of its subsidiaries other than those arrangements referred to in Section 7 of Part XIII (Additional Information).

No Cineworld Director or Proposed Director was selected to be a director of Cineworld pursuant to any arrangement or understanding with any major customer, supplier or other person having a business connection with the Cineworld Group.

No restrictions have been agreed by any Cineworld Director or Proposed Director on the disposal within a certain period of time of his holding in Cineworld securities.

Save for Moshe Greidinger and Israel Greidinger, who are brothers, there are no family relationships between any of the Cineworld Directors, any of the Proposed Directors or between any of the Cineworld Directors and any of the Proposed Directors.

15. Other Directorships and Partnerships

The details of those companies and partnerships outside the Cineworld Group and the Cinema City Holding Group in which the Cineworld Directors and Proposed Directors are, or have been, members of the administrative, management and supervisory bodies or partners at any time during the five years prior to the date of this document are as follows:

	Interests	Status (Current/ Previous)
Cineworld Directors Stephen Wiener	Digital Cinema Media Limited	Current
Philip Bowcock	Luminar Oceana Limited	Current
	Luminar Group Holdings plc	Previous
Anthony Bloom	Rockridge Consolidated Limited	Current
	Transdek Limited	Current
	London Symphony Orchestra Limited	Current
	LSO Live Ltd	Current
	Cortiva Group Inc.	Current
	WealthTouch Inc.	Current
	United Trust Pty Ltd	Current
	Jayem Pty Ltd	Current
	National Angels Limited Jerusalem Foundation Trustees Limited	Previous Previous
	Axs-One Inc.	Previous
Peter Williams	ASOS Foundation Limited	Current
	Brissi London Limited	Current
	Design Council Enterprises Limited	Current
	London Transport (Trading) Limited	Current
	Project Oliver Investors Limited	Current
	Project Oliver Topco Limited	Current
	Project Oliver Holdco Limited	Current
	Silverstone Holdings Limited	Current
	Sportech PLC	Current
	Without Prejudice London Limited ASOS plc	Current Previous
	Blacks Leisure Group plc	Previous
	Blane Leisure Limited	Previous
	Erno Laszlo Group Limited	Previous
	Global Charity	Previous
	Golf TV Limited	Previous
	JJB Sports plc	Previous
	Maltby Investments Limited	Previous
	Mayfind Limited	Previous
	The Golf Channel (UK) Limited	Previous
	TV Sports Shop (International) Limited	Previous
	TV Sports Shop Limited	Previous
David Maloney	Brandon Hire Limited	Current
	Enterprise Inns plc	Current
	Make a Wish Foundation (UK) Ltd	Current
	Micro Focus International plc	Current
	Reed & Mackay Travel Ltd Stock Spirits Group plc	Current Current
	Carillion plc	Previous
	Hoseasons Holidays Ltd	Previous
	Ludorum plc	Previous
Martina King	Featurespace Limited	Current
	Capita plc	Current
	Debenhams plc	Current
	Coram Trading Limited	Current
	The Seckford Foundation	Current
	F. Johnston & Company Limited	Previous

	Interests	Status (Current/ Previous)
	Aurasma Ltd	Previous
	Goodpak LLP	Previous
	Independent Media Distribution Limited	Previous
	Tradedoubler AG	Previous
	Johnston Press plc	Previous
Eric (Rick) Senat	Bank Leumi (UK) plc	Current
	Blair Partnership LLP	Current
	Bramordene Ltd	Current
	Bronte Films and Television Ltd	Current
	Business Affairs Productions Ltd Create More Ltd	Current Current
	CS Films Ltd	Current
	ECM (London) Ltd	Current
	GTS Films Ltd	Current
	H F L Ltd	Current
	Hogarth Investments (1961) Ltd	Current
	Hogarth Properties Limited	Current
	Hptp Limited	Current
	Iconic International Images Ltd	Current
	Jewish Film Foundation	Current
	L&G Productions Limited Monserrat Court Hotels Limited	Current Current
	Platform 93⁄4 Kings Cross Ltd	Current
	Poster Pictures Limited	Current
	Pottermore Ltd	Current
	Ripley's Bion Productions Ltd	Current
	Take It Films Development Ltd	Current
	The Casual Vacancy Productions Ltd	Current
	UK Friends of the Abraham Fund Initiatives	Previous
	Cadogan Entertainment Investments Limited	Previous
	The Grierson Trust	Previous
	Inkheart Productions Services Limited	Previous
	Legendary Pictures LLC	Previous
Proposed Directors Moshe (Mooky)
Greidinger	Cinema Plus Ltd.	Current
	IT Theatres Holding and Finance Ltd.	Current
	I.T International Theatres Ltd.	Current
	Kolnoa Gat Be Tel Aviv Ltd.	Current
	Beit Theatres Parking Ltd.	Current
	Theatraot Israel Ltd. (in English, known as Israel Theatres Limited)	Current
	Rav Chen Real Estate Ltd.	Current
	Beit Theatres Management Ltd.	Current
	Near East Corporation Ltd.	Current
	Theatraot Israel Nechasim 1985 Ltd.	Current
	Pirsumei Mabat Ltd.	Current
	Armon Management Theatres Ltd. Armon Parking Theatres Ltd.	Current Current
	Theatraot Construction and Development Ltd.	Current
	Dalia G. Europe Investments Ltd.	Current
	Dalia G. Investments Ltd.	Current
	Dalia G. Trading 1994 Ltd.	Current
	Dalia G. Direct Marketing (1993) Ltd.	Current
	Theatraot Haifa Ltd.	Current
	Theatraot Mahanaim Ltd.	Current
	I.T Theatres MerCaz Ltd.	Current
	Y.M Greidinger Investments Ltd.	Current
	Panorama Hevra Leyezur Sratim Ltd.	Current
	T.I Kolnoa Plus Ltd.	Current

	Interests	Status (Current/ Previous)
	Shopping Center Theatres Ltd. STD Ltd. D.K.G Investment Company Ltd. Cinema City International N.V. I.T. International Theatres 2004 Ltd. Theatraot Mutakin Vepirsum Ltd. Cinema-Phone Ltd.	Current Current Current Current Current Current Current Current
Israel Greidinger	IT Theatres Holding and Finance Ltd. I.T International Theatres Ltd. Kolnoa Gat BeTel Aviv Ltd. Beit Theatres Parking Ltd. Theatraot Israel Ltd. (in English, known as Israel Theatres Limited) Rav Chen Real Estate Ltd.	Current Current Current Current Current Current
	Beit Theatres Management Ltd. Near East Corporation Ltd. Theatraot Israel Nechasim 1985 Ltd. Armon Management Theatres Ltd. Armon Parking Theatres Ltd. Brickhouse Ltd.	Current Current Current Current Current Current
	Theatraot Construction and Development Ltd. Dalia G. Europe Investments Ltd. Dalia G. Investments Ltd. Dalia G. Trading 1994 Ltd. Dalia G. Direct Marketing (1993) Ltd. T.I Theatres Investments Ltd.	Current Current Current Current Current Current
	Theatraot Haifa Ltd. Theatraot Mahanaim Ltd. I.T Theatres MerCaz Ltd. Y.M Greidinger Investments Ltd. Panorama Hevra Leyezur Sratim Ltd. T.I Kolnoa Plus Ltd.	Current Current Current Current Current Current
	Shopping Center Theatres Ltd. STD Ltd. T.Y Theatre Communications Ltd. D.K.G Investment Company Ltd. Cinema City International N.V. I.T. International Theatres 2004 Ltd. Ronson Europe N.V. Theatraot Mutakim Vepirsum Ltd. Cinema-Phone Ltd.	Current Current Current Current Current Current Current Current Current
Scott Rosenblum	Temco Services Industries Inc. Investec USA Holdings Corp Dovenmuehle Mortgage Inc Richman Group of Companies King Cross Associates Inc Cinema City International N.V. Investec Securities (US) LLC Kramer Levin Naftalis & Frankel LLP	Current Current Current Current Current Current Current Current
Arni Samuelsson	SAMfelagi ´ 6JAN201422070645 Samfilm EHF SAMcinema	Current Current Current

PART XIII

ADDITIONAL INFORMATION

1. The Company

The Company was incorporated and registered in England and Wales on 23 August 2004 with registered number 05212407, as a private company limited by shares under the Companies Act 1985, with the name Augustus 2 Limited. It name was changed on 24 August 2004 to JAD 1 Limited, and on 6 October 2004 to Cineworld UK Limited. On 17 May 2006, the Company re-registered as a public limited company and changed its name to Cineworld Group plc.

The principal legislation under which the Company operates, and pursuant to which the New Ordinary Shares will be created, is the Companies Act 2006 and the regulations made thereunder.

The Company is domiciled in the United Kingdom and its registered and head office is at Power Road Studios, 114 Power Road, London W4 5PY.

The Existing Ordinary Shares are listed on the Official List of the London Stock Exchange. The ISIN of the Existing Ordinary Shares is GB00B15FWH70.

2. Share capital

The Company has only one class of share capital which is ordinary shares of one pence each.

The following table shows the issued share capital of the Company at the Latest Practicable Date, and the issued share capital of the Company following completion of the Rights Issue and following completion of the Rights Issue and the Combination (excluding any Ordinary Shares which may be issued on the exercise of options under the Employee Share Schemes during the Rights Issue and the effect of not allotting fractions):

	Ordinary Shares at the Latest Practicable Date		Ordinary Shares following completion of the Rights Issue		Ordinary Shares following completion of the Rights Issue and the Combination
	Number	£	Number	£	Number	£
Issued and fully paid .	149,892,079	1,498,920.79	197,857,544	1,978,575.44	263,458,780	2,634,587.80

At the Latest Practicable Date, none of the Ordinary Shares were held in treasury.

2.1 Share capital history

As at 1 January 2010, the first day covered by the historical financial information incorporated by reference into this document, the Company's issued share capital comprised 141,721,509 Ordinary Shares with a nominal value of one pence each.

Between 1 January 2010 and the Latest Practicable Date, the Company has issued 8,170,570 Ordinary Shares in total, of which:

(A) 492,712 Ordinary Shares were issued pursuant to the Sharesave Scheme;
(B) 774,779 Ordinary Shares were issued pursuant to the PSP;
(C) 53,080 Ordinary Shares were issued pursuant to the CSOP; and

(D) 6,849,999 Ordinary Shares were issued in connection with the acquisition of Picturehouse.

Other than these issues of Ordinary Shares, there have been no changes to the issued share capital of the Company between 1 January 2010 and the Latest Practicable Date.

2.2 Dilution

The Rights Issue Shares and Consideration Shares represent in aggregate up to approximately 75.8 per cent. of the Ordinary Shares in issue immediately prior to the Rights Issue.(15)

⁽¹⁵⁾ Assuming no Ordinary Shares other than the Rights Issue Shares are issued prior to Completion.

Qualifying Shareholders who take up their pro rata entitlements to Rights Issue Shares in full will suffer dilution of up to 24.9 per cent. in their interests in the Company as a consequence of the issue of the Consideration Shares(16) in connection with the Combination. Qualifying Shareholders who do not take up their entitlements to Rights Issue Shares will suffer dilution of up to 43.1 per cent. in their interests in the Company as a consequence of both the Rights Issue and the issue of the Consideration Shares in connection with the Combination.(16)

2.3 New Ordinary Shares

It is expected that the New Ordinary Shares will be admitted to the Official List, the London Stock Exchange's main market for listed securities, and that they will trade under UK ISIN GB00B15FWH70.

The New Ordinary Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares in issue at the time the Rights Issue Shares are issued pursuant to the Rights Issue and the Consideration Shares are issued pursuant to the Combination, including in relation to dividends or other distributions. It is expected that the New Ordinary Shares, when allotted and issued, will be capable of being held and transferred by means of CREST.

2.4 Existing Shareholder authorities

At the 2013 AGM, the following resolutions were passed by Shareholders:

(a) an ordinary resolution was passed by Shareholders authorising the Cineworld Board to allot Ordinary Shares and to grant rights to subscribe for or convert any security into Ordinary Shares:
(i) up to an aggregate nominal amount of £498,850; and
(ii) comprising equity securities (as defined in section 560 of the Companies Act 2006), up to a nominal amount of a further £498,850 (in addition to any shares issued under sub-section (a)(i) above) in connection with an offer by way of a rights issue to:
- (a) Shareholders in proportion as nearly as may be practicable to their existing holdings; and
- (b) people who are holders of other equity securities if this is required by the rights of those securities or as the Cineworld Directors otherwise consider necessary,

and so that the Cineworld Board may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter,

such authorities are to expire (unless previously revoked by the Company) at the conclusion of the next annual general meeting of the Company or on 14 August 2014, whichever is the earlier, except that the Company may before such expiry make offers or agreements which would or might require relevant securities to be allotted after such expiry and the Cineworld Directors may allot relevant securities in pursuance of such offers or agreements as if the power conferred hereby had not expired; and

(b) a special resolution was passed by Shareholders giving the Cineworld Board the power to allot equity securities (as defined in the Companies Act 2006) for cash under the authority given by the resolution described at sub-section (a) above as if section 561 of the Companies Act 2006 did not apply to any such allotment or sale, such power to be limited to:
(i) the allotment of equity securities in connection with an offer of equity securities (but in the case of the authority granted under sub-section a(ii) above, by way of a rights issue only) to:
- (a) ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and
- (b) people who are holders of other equity securities if this is required by the rights of those securities or as the Cineworld Directors otherwise consider necessary,

and so that the Cineworld Board may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements,

⁽¹⁶⁾ Assuming no Ordinary Shares other than the Rights Issue Shares are issued prior to Completion.

record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter; and

(ii) in the case of the authority granted under sub-section (a)(i) above, to the allotment or sale (otherwise than under sub-section (a)(i) above) of equity securities up to an aggregate nominal amount of £74,800,

and such power to cease to have effect when the authority given by resolution (a) is revoked or expires, but the Company may make offers or agreements which would or might require equity securities to be allotted after this authority expires and the Cineworld Directors may allot equity securities in pursuance of such offers or agreements notwithstanding that the authority has expired.

At the General Meeting, Shareholders will be asked to consider and vote on the Resolution, which (inter alia) authorises the Cineworld Directors to allot up to 65,767,000 Ordinary Shares, representing approximately 43.9 per cent. of the Company's current issued share capital (excluding treasury shares). This will enable the Company to allot sufficient Ordinary Shares to satisfy its obligations in connection with the Combination. This authority will expire on the date of the Company's annual general meeting in 2014. The authority granted under the Resolution is in addition to the authority to allot Ordinary Shares which was granted to the Cineworld Directors at the 2013 AGM, which the Cineworld Directors have no present intention of exercising, except pursuant to the Rights Issue and the Employee Share Schemes, and which will expire at the Company's annual general meeting in 2014 or on 14 August 2014, whichever is the earlier.

Accordingly, the New Ordinary Shares to be issued in connection with the Rights Issue will be created, allotted and issued pursuant to the authorities conferred on the Company at the 2013 AGM, and the New Ordinary Shares to be issued in connection with the Combination will be created, allotted and issued pursuant to the authority to be granted under the Resolution proposed at the General Meeting.

3. Cineworld Articles

The following is a summary of Cineworld's Articles, which were adopted by the Company on 12 May 2010 and which are available for inspection at the addresses specified in Section 14 of this Part XIII.

(i) Unrestricted objects

The objects of the Company are unrestricted.

(ii) Limited liability

The liability of the Company's members is limited to the amount, if any, on the shares in the Company held by them.

(iii) Share rights

Subject to applicable statutes and existing shareholders' rights, the Company may issue shares with any rights or restrictions attached to them. These rights or restrictions can either be decided by an ordinary resolution passed by the shareholders or be decided by the directors as long as there is no conflict with any resolution passed by the shareholders.

Subject to applicable statutes and existing shareholders' rights, redeemable shares may be issued. The directors can decide on the terms and conditions and the manner of redemption of any redeemable share.

(iv) Voting rights

Shareholders will be entitled to vote at a general meeting or class meeting whether on a show of hands or a poll, as provided in the legislation. The Companies Act 2006 provides that:

(a) on a show of hands every member present in person has one vote and every proxy present who has been duly appointed by one or more members will have one vote, except that a proxy has one vote for and one vote against if the proxy has been duly appointed by more than one member and the proxy has been instructed by one or more members to vote for and by one or more other members to vote against. For this purpose the Articles provide that, where a proxy is given discretion as to how to vote on a show of hands, this will be treated as an instruction by the relevant shareholder to vote in the way that the proxy decides to exercise that discretion; and

(b) on a poll every member has one vote per share held by him and he may vote in person or by one or more proxies. Where he appoints more than one proxy, the proxies appointed by him taken together shall not have more extensive voting rights than he could exercise in person.

This is subject to any rights or restrictions which are given to any shares or on which shares are held.

If more than one joint shareholder votes (including voting by proxy), the only vote which will count is the vote of the person whose name is listed before the other voters on the register for the share.

(v) Dividends and other distributions

The shareholders may by ordinary resolution from time to time declare dividends not exceeding the amount recommended by the directors.

Subject to the legislation, the directors may pay interim dividends, and also any fixed rate dividend, whenever the financial position of the Company, in the opinion of the directors, justifies any such payments. If the directors act in good faith, they are not liable for any loss that shareholders may suffer because a lawful dividend has been paid on other shares that rank equally with or behind their shares.

Unless the rights attached to any shares or the terms of any shares say otherwise, all dividends will be divided and paid in proportions based on the amounts paid up on the shares during any period for which the dividend is paid, and dividends may be declared or paid in any currency.

Any dividend unclaimed after a period of 12 years from the date when it was declared or became due for payment will be forfeited and go back to the Company unless the directors decide otherwise.

(vi) Transfer of shares

Shares in certificated form may be transferred by an instrument of transfer in writing in any usual form, or in such other form as the board may approve. The instrument of transfer shall be executed by or on behalf of the transferor and (in the case of a share which is not fully paid) by or on behalf of the transferee. Shares in uncertificated form may be transferred in accordance with the Uncertificated Securities Regulations.

The directors can refuse to register the transfer of any shares which are not fully paid. The directors may also refuse to register the transfer of any certificated shares unless all of the following conditions are satisfied:

(a) it is only in respect of only one class of shares and is in favour of a single transferee or not more than four joint transferees;
(b) it is duly stamped (if required); and
(c) it is delivered for registration accompanied by the certificate for the shares to which it relates and such other evidence of ownership as the Board may reasonably require to prove the title of the intending transferor or person renouncing.

Subject to, and in accordance with, the provisions of the Uncertificated Securities Regulations 2001, the operator of the relevant system may refuse to register a transfer of any uncertificated shares in circumstances permitted by the Uncertificated Securities Regulations.

(vii) Changes in capital and purchase of own shares

The Company may increase, divide or consolidate its share capital in accordance with the Companies Act 2006.

(viii) Variation of rights

If legislation allows, rights attached to any class of shares may be changed if this is approved either in writing by shareholders holding at least three-quarters of the issued shares of that class by amount (excluding any shares of that class held as treasury shares), or by a resolution passed at a separate meeting of the holders of those shares.

If new shares are created or issued which rank equally with any other existing shares, the rights of the existing shares will not be regarded as changed or abrogated unless the terms of the existing shares expressly say otherwise.

(ix) General Meetings

The Company shall hold annual general meetings in accordance with the relevant legislation. Under the Companies Act 2006, an annual general meeting shall be called by not less than 21 clear days' notice, and a general meeting of the Company other than an annual general meeting shall be called by not less than 14 clear days' notice. The notice shall specify: whether the meeting is an annual general meeting or another general meeting, the place, the date and time of meeting, the general nature of the business to be conducted at that meeting and that a member entitled to vote may appoint one or more proxies to vote instead of him on a poll at such meeting. A notice convening a meeting to pass an ordinary resolution or a special resolution as the case may be shall specify the intention to propose the resolution as such. A meeting may be called on shorter notice if, in the case of an annual meeting, it is agreed by all members entitled to attend and vote at the meeting, or in the case of any other general meeting, if it is agreed by a majority of members having a right to attend and vote at such meeting and which hold not less than 95 per cent. of the nominal value of shares giving that right.

Each director can attend and speak at any general meeting of the Company. The chairman of a meeting can also allow anyone to attend and speak where he considers that this will help the business of the meeting.

(x) Directors

Number of directors

The Company must have a minimum of two directors and a maximum of 10 directors, although this can be amended by the shareholders passing an ordinary resolution.

Appointment

Directors may be appointed by the shareholders passing an ordinary resolution, or by the board. A director appointed by the board shall hold office only until the dissolution of the next annual general meeting and is not taken into account in determining the directors who are to retire by rotation at that meeting.

The directors or any committee authorised by the directors can appoint one or more directors to any executive position, on such terms and for such period as they think fit and they can also terminate or vary such an appointment at any time.

Retirement

At each annual general meeting one third of the directors who are subject to retirement by rotation will retire by rotation and be eligible for re-election. The directors to retire will be, firstly, those who wish to retire and, secondly, those directors who have been longest in office since their last appointment or reappointment or, in the case of those who were appointed or reappointed on the same day, the director to be subject to retirement will (unless they otherwise agree) be determined by lot.

Removal by ordinary resolution

The Company's shareholders can by ordinary resolution remove any director before the expiration of his period of office.

Vacation of office

Any director automatically stops being a director if:

(a) he gives the secretary or the board notice of resignation;
(b) where he has been appointed for a fixed term, the term expires;
(c) he ceases to be a director under the legislation, he is removed from office under the Articles or he becomes prohibited by law from being a director;
(d) he becomes bankrupt or applies for a voluntary arrangement under section 253 of the Insolvency Act 1986;
(e) he is or has been suffering from mental or physical ill health and the directors pass a resolution removing the director from office;
(f) he has missed directors' meetings (whether or not an alternate director appointed by him attends) for six consecutive months without permission from the directors and the directors pass a resolution removing the director from office; or
(g) he is removed from office by notice signed by all his co-directors.

If a director stops being a director for any reason, he will also automatically cease to be a member of any committee of the board.

Alternate directors

Any director can appoint any person (including another director) to act as an alternate director.

Remuneration

The fees of the directors for their services shall not in aggregate exceed £500,000 per annum (or such higher amount as the Company may decide to set by ordinary resolution). Subject to this limit, a director shall be paid a fee (to accrue from day to day) at such rate as the board may decide. Such remuneration is distinct from any remuneration payable by the Company to executive directors under service contracts or other amounts payable under the Articles.

Any director who is appointed to any executive office shall be entitled to such remuneration as the board may determine, and this may be in addition to, or instead of, any fees payable to him for his services as a director.

The board shall also be repaid all reasonable travelling, hotel and other expenses properly incurred by them in the performance of their duties, including the expenses of attending the meetings of the board, committee meetings, general meetings and separate meetings of the holders of any class of securities of the Company.

The board may exercise all the powers of the Company to provide pensions or other retirement or superannuation benefits and to provide death or disability benefits or other allowances or gratuities to a person who is or has at any time been a director of the Company or a director of any company which is or was a subsidiary undertaking of or allied to or associated with the Company or a subsidiary of the Company and to the relatives or dependants of any such person.

Powers of the board

The board shall manage the Company's business and exercise all the powers of the Company whether relating to the management of the business or not.

The board may delegate any of it powers, authorities and discretions to a committee of one or more persons.

Borrowing powers

The board may exercise all the powers of the Company to borrow money and to mortgage or charge all or part of the undertaking, property and assets (present or future) and uncalled capital of the Company, to issue debentures and other securities, whether outright or as collateral security for a debt, liability or obligation of the Company or of a third party.

The board shall restrict the borrowings of the Company and shall exercise all voting and other rights or powers of control exercisable by the Company in relation to its subsidiary undertakings so as to ensure (as regards subsidiary undertakings, to the extent possible) that the aggregate principal amount outstanding in respect of monies borrowed by the group does not at any time without the previous sanction of an ordinary resolution of the Company exceed a sum equal to the greater of three times the adjusted capital and reserves and £225 million.

Directors' interests

A director who is in any way, whether directly or indirectly, interested in any transaction or arrangement that has been entered into by the Company or any subsidiary undertaking of the Company, or any proposed transaction or arrangement with the Company or any subsidiary undertaking of the Company, shall declare the nature and extent of his interest to the other directors.

Additionally, before any situation arises in which a director has, or can have, a direct or indirect interest or duty that conflicts or possibly may conflict with the interests of, or his duty to, the Company or any of its subsidiary undertakings, he shall declare the nature and extent of his interest or duty to the other directors.

Authorisation of conflicts of interest

The directors may, subject to the Articles, authorise any matter which would otherwise involve a director breaching his duty under the legislation to avoid conflicts of interest. For the purpose of this authorisation, the interested director(s) must not vote, a quorum of the board must be satisfied after excluding the interested director(s) and the director(s) may be excluded from participation in discussions of the board in relation to the matter in which he/they is/are interested.

In authorising a matter which would otherwise constitute a conflict of interest, the directors may impose, vary or remove such terms and conditions as they may think fit from time to time (whether at the time of giving the authorisation or subsequently).

No director shall, by reason of his office as director of the Company (or by reason of the fiduciary relationship established by holding that office), be liable to account to the Company for any benefit which he derives from any matter which would otherwise constitute a conflict of interest which has been authorised by the directors in accordance with the Articles and no contract, transaction or arrangement shall be liable to be avoided by reason of any interest of a director which has been so authorised.

Powers to vote

A director may not vote (or be counted in the quorum at a meeting) in respect of any resolution concerning his own appointment (including fixing or varying the terms of appointment), or the termination of his own appointment, as the director of, or the holder of any other office or place of profit with, the Company or any undertaking in which the Company is interested.

Unless otherwise provided in the Articles, a director may not vote (or be counted in the quorum) in respect of any transaction or arrangement or any other proposal in which he has a material interest which (together with any interest of any person connected with him within the meaning of section 252 of the Companies Act 2006) may reasonably be regarded as likely to give rise to a conflict of interest and, if he purports to do so, his vote shall not be counted.

Subject to the Companies Act 2006, the Company may by ordinary resolution suspend or relax the restrictions in the Articles on a director's ability to vote to any extent or ratify any transaction or other arrangement in which he is interested that has not been not duly authorised by reason of a contravention of the Articles.

Indemnity of officers

The Articles provide that, subject to remaining consistent with the relevant company law, every director and other officer (other than an auditor) of the Company shall be indemnified out of the assets of the Company against all liabilities (subject to certain exceptions) attaching to him in relation to the Company in the actual or purported execution and/or discharge of his duties and/or the exercise or purported exercise of his powers. Cineworld has entered into indemnities in favour of the Cineworld Directors and the Proposed Directors (effective from the date on which they are appointed to the Board) on this basis.

4. Major shareholders

Insofar as it is known to the Company as at the Latest Practicable Date, the following persons have an interest in the Ordinary Shares which is notifable under DTR5 of the Disclosure and Transparency Rules:

Shareholder	Number of shares	Percentage of Total Voting Rights (%)
Franklin Templeton Inv. Man. Ltd	8,453,635	5.64
Mawer Investment Management Limited	7,484,903	4.99
Rathbone Brothers plc	7,314,563	4.88
AXA Investment Managers SA	7,225,000	4.82
Royal London Asset Management Limited	4,887,024	3.26

Save as disclosed above, the Company is not aware of any person who had a notifiable interest under DTR 5 of the Disclosure and Transparency Rules as at the Latest Practicable Date.

As at the Latest Practicable Date, the Company was not aware of any person or persons who directly or indirectly, jointly or severally, exercise or could exercise control over the Company, nor is it aware of any arrangement the operation of which may at a subsequent date result in a change in control of the Company.

None of the Company's major shareholders has or will have different voting rights attached to the shares they hold in the Company.

5. Significant Subsidiaries

Cineworld is the parent company of the Cineworld Group. The following table contains a list of the principal (but not necessarily direct) subsidiaries and associated undertakings of Cineworld and Cinema City Holding (each of which is considered to be likely to have a significant effect on the assessment of the assets, liabilities, the financial position and/or the profits and losses of the Enlarged Group).

The businesses listed below operate principally in the country in which they are incorporated.

Name	Percentage ownership interest (%)	Nature of Business	Country of Incorporation
Principal Cineworld subsidiaries (directly held)
Augustus 1 Limited	100	Holding company	England and Wales
Principal Cineworld subsidiaries (indirectly held)
Augustus 2 Limited	100	Holding company	England and Wales
Cineworld Holdings Limited	100	Holding company	England and Wales
Cine-UK Limited	100	Cinema operations	England and Wales
Cineworld Cinemas Holdings Limited	100	Holding company	England and Wales
Cineworld Cinemas Limited .	100	Holding company and cinema operations	England and Wales
Cineworld Finance Limited	100	Dormant	England and Wales
Cineworld Estates Limited .	100	Cinema property leasing	England and Wales
Cineworld South East Cinemas Limited	100	Holding company	England and Wales
Cineworld Exhibition Limited .	100	Dormant	England and Wales
Gallery Holdings Limited	100	Holding company	England and Wales
Gallery Cinemas Limited	100	Dormant	England and Wales
Slough Movie Centre Limited	100	Dormant	England and Wales
Adelphi-Carlton Limited	100	Cinema operations	Eire
Cineworld Cinema Properties Limited	100	Property company	England and Wales
Cineworld Elite Pictures Theatre
(Nottingham) Limited	99.1	Non-trading	England and Wales
Classic Cinemas Limited	100	Retail services company	England and Wales
Computicket Limited	100	Dormant	England and Wales
Digital Cinema Media Limited	50	Screen Advertising	England and Wales
Picturehouse Cinemas Limited City Screen (Aberdeen) Limited	100 100	Cinema operations Cinema operations	England and Wales England and Wales
City Screen (Bath) Limited	100	Cinema operations	England and Wales
City Screen (Brighton) Limited .	100	Cinema operations	England and Wales
CS (Brixton) Limited	100	Cinema operations	England and Wales
City Screen (Cambridge) Limited	100	Cinema operations	England and Wales
City Screen (Clapham) Limited	100	Cinema operations	England and Wales
City Screen Developments Limited	100	Cinema operations	England and Wales
CS (Exeter) Limited	100	Cinema operations	England and Wales
CS (Greenwich) Limited	100	Cinema operations	England and Wales
City Screen (Liverpool) Limited	100	Cinema operations	England and Wales
CS (Norwich) Limited	100	Cinema operations	England and Wales
Newman Online Limited .	100	Software development and provider	England and Wales
City Screen (Oxford) Limited .	100	Cinema operations	England and Wales
City Screen (Southampton) Limited .	100	Cinema operations	England and Wales
City Screen (SOA) Limited	100	Cinema operations	England and Wales
City Screen (Stratford) Limited	100	Cinema operations	England and Wales
Picturehouse Bookings Limited .	100	Ticket booking operations	England and Wales
City Screen (Virtual) Limited .	100	Cinema operations	England and Wales
City Screen (York) Limited	100	Cinema operations	England and Wales
Picturehouse Entertainment Limited	100	Film Distribution	England and Wales

Name	Percentage ownership interest (%)	Nature of Business	Country of Incorporation
City Screen (3D) Limited	100	Cinema operations	England and Wales
City Screen (No. 2) Limited .	100	Cinema operations	England and Wales
Principal Cinema City Holding subsidiaries I.T. Magyar Cinema Moziuzemelt ¨ o ˝ es´
¨ Filmforgalmazo Kft .	100	Cinema theatre operations	Hungary
Cinema City Finance B.V. .	100	Finance entity	The Netherlands
Cinema City Poland Sp.Zoo .	100	Fund general partner	Poland
Cinema City Poland CC Sp. Zo.o. sp.j. .	100	Cinema theatre operations	Poland
Cinema City Czech S.R.O	100	Cinema theatre operations	Czech Republic
Forum Film Czech s.r.o. .	100	Distribution	Czech Republic
New Age Media CC Sp. Zo.o. sp.j.	100	Advertising	Poland
Forum Film Poland CC Sp. Zo.o. sp.j.	100	Distribution	Poland
All Job Poland CC Sp. Zo.o. sp.j.	100	Human resources	Poland
Cinema City Poland Sp. Z.o.o. CC sp.k. . .	100	Intellectual Property	Poland
Forum 40 Fundus Inwestycyjny Zamkniety	100	Fund	Poland
Norma Film Ltd.(1)	100	Holding company	Israel
Forum Film Ltd.(1) .	100	Distribution	Israel
Cinema Theatres Ltd(2) .	100	Cinema theatre operations	Israel
Cinema-Phone Ltd.(1)	100	Cinema theatre operations	Israel
Cinema City Bulgaria EOOD .	100	Cinema theatre operations	Bulgaria
Forum Film Bulgaria EOOD	100	Distribution	Bulgaria
Forum Home Entertainment Czech s.r.o . .	100	Distribution	Czech Republic
New Age Cinema Kft .	100	Advertising	Hungary
Forum Hungary Film Distribution Kft	100	Distribution	Hungary
Cinema City Romania SRL	100	Cinema theatre operations	Romania
Forum Film Romania SRL	100	Distribution	Romania
New Age Media Romania SRL	100	Advertising	Romania
Palace Cinemas Kft	100	Cinema theatre operations	Hungary
Cinema City Slovakia s.r.o .	100	Cinema theatre operations	Slovakia
Forum Film Slovakia s.r.o. .	100	Distribution	Slovakia
Seracus Ltd. .	100	Holding company	Cyprus
Cinema City Holding B.V. .	100	Holding company	The Netherlands

(1) Currently a direct or indirect subsidiary of CCI. Upon completion of the Reorganisation, it will become a direct or indirect subsidiary of Cinema City Holding.

(2) Cinema Theatres Ltd. is currently a dormant subsidiary of CCI. Prior to Completion, this company will, as part of the Reorganisation, become an indirect subsidiary of Cinema City Holding and then acquire the cinema operation currently held by IT 2004.

6. Material Contracts

6.1 Cineworld's material contracts

The following is a summary of each contract (not being a contract entered into in the ordinary course of business) which has been entered into by members of the Cineworld Group: (i) within the two years immediately preceding the date of this document and which is, or may be, material; or (ii) which contains any provision under which any member of the Cineworld Group has any obligation or entitlement which is material to the Cineworld Group as at the date of this document.

(a) Combination Agreement

A description of the principal terms of the Combination Agreement is set out in Part III (Terms and Conditions of the Combination) of this document.

(b) Underwriting Agreement

On 10 January 2014, the Company entered into the Underwriting Agreement with the Underwriters. Pursuant to the terms and conditions of the Underwriting Agreement:

the Underwriters have severally agreed, subject to certain conditions, to use reasonable endeavours to procure subscribers, or failing which, the Underwriters will themselves, in their Due Underwriting Proportions, severally subscribe for Rights Issue Shares not taken up under the Rights Issue or will procure sub-underwriters to do so, in each case, at the Rights Issue Price; and
the Company has also appointed the Sponsor in connection with the Acquisition and the Company's applications for Admission of the Rights Issue Shares and Admission of the Consideration Shares.

In consideration of the services of the Underwriters under the Underwriting Agreement, and subject to their obligations under the Underwriting Agreement having become unconditional and the Underwriting Agreement not being terminated, the Company has agreed to pay a commission of 2.5 per cent. at such times and in such proportions as between the Underwriters as contained in the Underwriting Agreement. The Company shall pay the costs and expenses of, or in connection with, the Rights Issue on the basis contained in the Underwriting Agreement.

The Company has given certain customary representations and warranties to the Underwriters as to the accuracy of the information contained in the Document and other relevant documents, and in relation to other matters relating to the Company, Cinema City, the Cineworld Group and the Enlarged Group. In addition, the Company has given customary indemnities to the Underwriters and certain indemnified persons connected with each of them.

The obligations of the Underwriters under the Underwriting Agreement are subject to certain customary conditions including, amongst others:

1. the fulfilment by the Company of certain of its obligations under the Underwriting Agreement including the delivery of certain documents to the Underwriters, by the times and dates specified in the Underwriting Agreement; and
1. Admission of the Rights Issue Shares having occurred by not later than 8.00 a.m. on 30 January 2014 (or such later time and/or date as the Company may agree with the Underwriters but being no later than 13 February 2014).

In certain circumstances, prior to the Admission of the Rights Issue Shares, including where any of the conditions are not satisfied (or waived by the Underwriters acting in good faith and following consultation with the Company) or shall have become incapable of being satisfied by the required time and date, the Underwriters may terminate the Underwriting Agreement.

The Company has given certain undertakings including (i) an undertaking that it will not waive or terminate, without the prior written consent of the Joint Bookrunners, for a period of 12 months commencing on the date of Admission of the Consideration Shares, the agreement to be entered into between the Company and CCI pursuant to which CCI will agree not to sell, transfer or otherwise dispose of any Ordinary Shares; and (ii) an undertaking that it will not, without the prior written consent of the Joint Bookrunners, undertake certain actions in relation to its share capital, including issuing further Ordinary Shares, for a period of 180 days from 13 February 2014, subject to certain exceptions, including the issue of the Rights Issue Shares and the Consideration Shares.

(c) Acquisition of Picturehouse

On 6 December 2012, the Cineworld Group acquired 100 per cent. of the share capital and voting rights in City Screen Group, which trades as Picturehouse (Picturehouse). Headline consideration was £47.3 million in cash.

Picturehouse was the largest non-multiplex cinema chain in the UK and Irish markets of 2012. It specialises in offering a wide range of alternative content. Prior to the acquisition, Picturehouse's primary shareholders were Arts Alliance, Lyn Goleby (Picturehouse's Managing Director) and the Albion Venture Capital Trust.

The acquisition was funded from undrawn bank facilities and assumed debt. The cash proceeds from an issue of 6.85 million new ordinary shares were subsequently utilised to repay some of that debt. Of these, 6.40 million new ordinary shares were placed with institutional and other investors, including certain Cineworld Directors, with the remainder being allotted to Lyn Goleby as part of her acquisition arrangements.

On 8 October 2013, the Competition Commission published a decision requiring the Cineworld Group to dispose of one cinema in each of Aberdeen, Bury St Edmunds and Cambridge. Cineworld has announced the intention to dispose of the Picturehouse cinemas in Aberdeen and Bury St Edmunds and will make a decision as to which cinema belonging to the Cineworld Group it intends to dispose of in Cambridge later in the year.

(d) Debt Financing

The Company meets its general corporate and working capital requirements through its five year £187,500,000 Facilities Agreement dated 21 March 2011 between, amongst others, the Company and certain of its subsidiaries as obligors and Barclays Bank PLC as agent, as amended from time to time (the Existing Facilities Agreement).

The Existing Facilities Agreement is unsecured, but the obligations of the borrowers thereunder are guaranteed by certain members of the Cineworld Group whose aggregate EBITDA and aggregate gross assets (calculated on an unconsolidated basis and excluding all intra-group items and investments in subsidiaries of any member of the Cineworld Group) exceed, respectively, 85 per cent. of the consolidated EBITDA and consolidated gross assets of the Cineworld Group.

The Existing Facilities Agreement includes voluntary prepayment, mandatory prepayment and cancellation provisions, as well as customary representations, undertakings and events of default. In addition, the Existing Facilities Agreement contains two financial covenants: the ratio of EBITDA to net debt and the ratio of pre-rent EBITDA to net finance charges.

The Existing Facilities Agreement is due to expire on 21 March 2016. However, to assist with funding, the Company entered into a £240 million and A192 million Facilities Agreement on 10 January 2014 (the Facilities Agreement), which comprises of £165 million and A132 million term loans and £75 million and A60 million revolving facilities. On completion of the Combination, subject to the fulfilment of certain conditions (including that the Combination Agreement has become unconditional (except in relation to the debt financing of the Combination)), amounts will be drawn from the Facilities Agreement in order to:

(A) repay the Existing Facilities Agreement in full; and
(B) fund, in part, the Combination, including without limitation:
(i) repay the existing EUR 153,000,000 and PLN 233,523,000 facilities agreement dated 13 December 2012 between, amongst others, CCI as the company and ING Bank N.V. as the agent (as amended from time to time) in full; and
(ii) repay the existing NIS 195 million facility agreement dated 19 February 2013 between IT 2004 and Bank Hapoalim (as amended from time to time) in full.

The Facilities Agreement will also provide general corporate and working capital for the Enlarged Group going forward.

The Facilities Agreement is subject to two financial covenants: the ratio of EBITDA to net debt and the ratio of EBITDAR (pre-rent EBITDA) to net finance charges.

The Facilities Agreement is unsecured, but includes a requirement that 85 per cent. of the Enlarged Group guarantee the obligations of the borrowers under the Facilities Agreement (the Guarantor Coverage Test). To meet the Guarantor Coverage Test, it is intended that certain members of the Cinema City Holding Group accede to the Facilities Agreement as guarantors upon completion of the Combination.

The interest rate payable under the Facilities Agreement will be calculated by aggregating either the relevant LIBOR or EURIBOR rate (depending on the currency of the loan) and also the relevant margin percentage rate per annum. From the first utilisation date until 30 June 2014, each loan will be subject to a margin rate of 2.15 per cent. if the loan is borrowed under the term facility and 1.90 per cent. if the loan is borrowed under the revolving facility. Thereafter, and subject to certain adjustments, the margin percentage rate per annum is set out in the table below, opposite the range for consolidated net debt to consolidated EBITDA in respect of the then most recently completed rolling annual testing period following 30 June 2014:

Consolidated net debt: consolidated EBITDA	Term facility margin per cent. p.a.	Revolving facility margin per cent. p.a.
Greater than or equal to 3.00:1	3.15	2.90
Less than 3.00:1 but greater than or equal to 2.50:1	2.65	2.40
Less than 2.50:1 but greater than or equal to 2.00:1	2.15	1.90
Less than 2.00:1 but greater than or equal to 1.50:1	1.90	1.65
Less than 1.50:1	1.65	1.40

The Facilities Agreement expires on 31 December 2018.

(e) Agreement with Arts Alliance Media

In June 2010 Cineworld announced an agreement with Arts Alliance Media (AAM) to roll out digital projection facilities in a number of cinemas across the estate. Under the AAM deal, Cineworld acquired the digital projectors directly from a third party and retained full control over the timing of the purchase and over the installation and operation of the projectors. Cineworld benefits from AAM's systems, technical capabilities and utilising AAM's VPF agreements with film distributors and exhibitors. The VPF deal covers a ten year period during which AAM collects VPFs from film studios on behalf of Cineworld the first time a film is played in digital on a screen rather than in 35mm. VPFs are, for up to a ten year period, discounted from the cost Cineworld pays for film rental and reflects the cost savings to studios of the move to digital. These discounts are expected to refund a substantial proportion of the total conversion cost of £40 million over a period up to ten years before taking into account the associated benefits of 3D and digital.

6.2 Cinema City's material contracts

The following is a summary of each contract (not being a contract entered into in the ordinary course of business) which has been entered into by members of the Existing Cinema City Group: (i) within the two years immediately preceding the date of this document and which is, or may be, material; or (ii) which contains any provision under which any member of the Existing Cinema City Group has any obligation or entitlement which is material to the Existing Cinema City Group as at the date of this document.

(a) Club Bank Financing Agreement

Cinema City Finance and certain other members of the Existing Cinema City Group (including certain members of the Cinema City Holding Group) are parties to a club financing agreement which was entered into in December 2012 with Bank Zachodni WBK S.A., HSBC Bank plc, ING Bank ´ Sl˛aski S.A., and from February 2013, BNP Paribas (the Club Financing Agreement). The total amount of the facilities made available to the Existing Cinema City Group under the Club Financing Agreement is EUR 210 million (comprising a term loan of EUR 102 million (in euros) and EUR 38 million (in Polish złoty), and a EUR 70 million revolving credit facility). As at the Latest Practicable Date, approximately EUR 185 million of the facilities remains outstanding.

The term of the facility is six years. The facilities have been secured by (i) pledges over the shares in certain material subsidiaries within the Existing Cinema City Group; (ii) pledges over the assets of certain material subsidiaries within the Existing Cinema City Group, other than assets in Bulgaria; (iii) pledges over the main operating bank accounts of cinemas in Poland, the Czech Republic and Hungary, and guarantees from certain members of the Existing Cinema City Group. The Club Financing Agreement also provides for standard covenants, which the Existing Cinema City Group is obliged to meet from the period that started on 30 June 2013, including those relating to a pre-determined level of leverage (net leverage covenant) and margin. It also includes a change of control clause in case the Greidinger family's holdings in the Existing Cinema City Group decrease below 30 per cent. or another investor obtains control over the Existing Cinema City Group.

Prior to Completion, CCI will assume liability for all outstanding amounts owed by Cinema City Finance under the Club Financing Agreement and, on Completion, part of the cash consideration will be applied towards the repayment of the debt under the Club Financing Agreement and certain other debt facilities. Upon repayment, the facilities will be cancelled and all security granted over shares and assets of the Cinema City Holding Group will be released.

(b) IT 2004 Facilities

IT 2004 is party to a facilities agreement with Bank Hapoalim BM which was entered into on 19 February 2013 and amended on 25 February 2013 (the Israeli Facilities Agreement). The total amount of the facilities made available to IT 2004 under the Israeli Facilities Agreement is up to NIS 195 million, comprising a term loan of NIS 170 million, a working capital and guarantee facility of NIS 24 million and an overdraft facility of NIS 1 million. As at the Last Practicable Date, approximately NIS 161.5 million of the facilities remains outstanding. The term of the facilities is seven years. The facilities have been secured by: (i) a fixed charged over certain real estate assets and lease arrangements of IT 2004; (ii) a fixed charge over the goodwill and unpaid share capital of IT 2004; and (iii) a floating charge over all rights, assets, enterprise and property of IT 2004 (including the cinema-related assets currently held by IT 2004).

IT 2004 will not form part of the Cinema City Holding Group. However, pursuant to the Reorganisation, its cinema-related assets and leases will be transferred to Cinema Theatres Ltd. prior to Completion and in connection therewith, Cinema Theatres Ltd. will accede to the facilities as a borrower under the Israeli Facilities Agreement prior to Completion. On Completion, part of the cash consideration will be applied towards the repayment of the debt under the Israeli Facilities Agreement. Upon repayment, the facilities will be cancelled and all security granted over the assets of Cinema City Holding Group will be released.

7. Related party transactions

A description of the related party transactions that Cineworld has entered into is given in note 24 on pages 76 and 77 of the Cineworld Group's 2010 Annual Report and Accounts, note 24 on page 85 of the Cineworld Group's 2011 Annual Report and Accounts, note 24 on page 89 of the Cineworld Group's 2012 Annual Report and Accounts and note 10 on page 18 of the Cineworld Group's 2013 Interim Results. There have been no additional related party transactions by Cineworld during the period between 26 September 2013, being the date to which the unaudited interim financial results of the Cineworld Group set out in Section 3 of Part VIII (Historical Financial Information relating to Cineworld) have been prepared, and the Latest Practicable Date.

Moshe Greidinger, Israel Greidinger and other members of the Greidinger family are, together, the indirect majority shareholders of ITIT. ITIT holds 53.89 per cent. of the shares in CCI.

The following arrangements are (or will be put in place on or prior to Completion) with CCI and/or ITIT and will accordingly from Completion constitute related party arrangements of the Enlarged Group.

Existing lease arrangements with the Remaining Cinema City Group

Certain of the office and cinema properties occupied by the Cinema City Business are owned by members of the Remaining Cinema City Group. In Israel, IT 2004 leases the Rav Chen Gat and Rav Chen Dizingof cinemas and IT 2004 and Forum Film Ltd. both lease office and storage space in Herzelia from Rav Chen Real Estate Ltd. (a member of CCI's real estate business). In addition, in Bulgaria, Cinema City Bulgaria EOOD leases its Mall of Rousse cinema from another real estate business subsidiary of CCI, Mall Rousse AD. The Rav Chen Gat and Rav Chen Dizingof leases were entered into in 1967 and 1952, respectively, and were each extended in January 2013 for a further five years. The lease of the offices and storage space in Herzelia was entered into in 2013 and has a term of five years. Cinema City Bulgaria's lease of the Mall of Rousse cinema commenced in 2010 and has a term of 10 years. These lease arrangements, subject to extension and/or renewal, will therefore remain in place following Completion until their termination or expiry and as part of the Reorganisation, IT 2004 will transfer or assign its rights under those aforementioned leases to which it is a party to Cinema Theatres Ltd.

Lease arrangements with the Remaining Cinema City Group following the Reorganisation

Members of the Cinema City Holding Group currently have a portfolio of approximately 100 leasehold properties and the benefit of approximately 35 agreements for lease. Cineworld, CCI and certain members of the Cinema City Holding Group and the Remaining Cinema City Group have also agreed that leases over eight properties which will be owned by members of the Remaining Cinema City Group following completion of the Reorganisation will be granted to members of the Cinema City Holding Group, with tenant obligations guaranteed by Cineworld. The properties subject to such lease arrangements comprise four cinema-related properties (Janki, Katowice, Łod´ ´z and Torun) and one office property (in Fosa) in ´ Poland, one cinema-related property in Slovakia (AuPark), one cinema-related property in the Czech Republic (Galaxie) and one cinema-related property in Israel (Rishon LeZion).

Each lease will be based on a framework form of lease agreement which has been agreed between Cineworld and CCI, and will be for a term of up to 18 years, with a right to renew all (but not some) of those leases held by members of the Enlarged Group at the end of the initial term for a further period of five years and an aggregate net initial rent for all properties of EUR 7,650,000, denominated in Euro and payable in local currency, which shall increase on an indexed basis on each anniversary date of the leases. The framework form of lease agreement is based on a standard form of full repairing and insuring lease (with the tenant paying, directly or indirectly, all rates, occupancy taxes, insurance costs and outgoings). It is intended that this agreed form of lease will be tailored, for each property, to the local law requirements of the relevant jurisdiction and the normal institutional terms appropriate for that jurisdiction. To the extent that any of the individual leases are not in place at Completion, the parties have agreed appropriate arrangements to allow the relevant members of the Enlarged Group to occupy the relevant property on agreed commercial terms pending finalisation of the relevant lease.

Reorganisation

As part of the Reorganisation, all of the lease agreements to which IT 2004 is party as tenant, will be assigned to Cinema Theatres Ltd. As primary responsibility for these leases will remain with IT 2004 after the assignment, Cinema City Holding will provide an undertaking and indemnity to IT 2004 to procure the compliance of Cinema Theatres Ltd. with the terms of these leases.

Other arrangements

The Cinema City Business is generally operated at the level of local Cinema City entities, with almost all contractual arrangements of the Cinema City Business effected by each individual subsidiary for its own account, rather than at a group level. However, the following contractual arrangements will be entered into by the Enlarged Group to address contractual arrangements relating to the Cinema City Business which are currently in place at CCI or ITIT level:

Guarantees

CCI has granted corporate guarantees to (a) third party lessors in respect of certain properties leased by local subsidiaries within the Cinema City Business and (b) United International Pictures (UIP) in respect of Forum Film (Bulgaria)'s obligations under its film distribution arrangements with UIP (the Guarantees). The Guarantees will remain with CCI until such time as they are replaced with equivalent guarantees from Cineworld. Pending such replacement, Cineworld will provide a counter-indemnity in favour of CCI in respect of any liability incurred under the Guarantees following Completion.

4DX Agreement

CCI is party to an agreement with CJ 4DPlex Co., Ltd. for the acquisition and licensing of 4DX cinema systems (the 4DX Agreement). CCI has assigned all of its rights under the 4DX Agreement to Cinema City Holding. However, as primary responsibility for the 4DX Agreement still remains with CCI, Cinema City Holding has provided an undertaking and indemnity (to be guaranteed by Cineworld with effect from Completion) to CCI to carry out CCI's obligations under the 4DX Agreement.

IMAX

ITIT is party to a series of agreements with Imax Corporation for the operation of IMAX cinemas by the Cinema City Business (the IMAX Agreements). ITIT has assigned all of its rights under the IMAX Agreements to CCI. Cineworld and CCI have agreed that they will work together to procure the novation and/or assignment of these arrangements to Cinema City Holding, to the extent necessary. Cinema City Holding and/or Cineworld will, from Completion, provide an undertaking and indemnity to CCI and ITIT to comply with the terms of the IMAX Agreements until such time as CCI and ITIT are released from all of their obligations under the IMAX Agreements.

VPF

CCI is party to long-term, non-exclusive VPF arrangements with six major film studios (the VPF Agreements). As the VPF Agreements relate to the Cinema City Business, CCI has assigned all of the VPF Agreements to Cinema City. As primary responsibility for the VPF Agreements remains with CCI, Cinema City Holding has provided an undertaking and indemnity (to be guaranteed by Cineworld with effect from Completion) to CCI to carry out CCI's obligations under each VPF Agreement with effect from Completion.

Warranty Insurance

CCI is party to an agreement with Chartis Europe S.A. in relation to warranty insurance (the Warranty Insurance Agreement). CCI has assigned all of its rights under the Warranty Insurance Agreement to Cinema City Holding. However, as primary responsibility for the Warranty Insurance Agreement still remains with CCI, Cinema City Holding has provided an undertaking and indemnity (to be guaranteed by Cineworld with effect from Completion) to CCI to carry out CCI's obligations under the Warranty Insurance Agreement.

Film Distribution

CCI is party to an agreement with MGM Studios Inc. in relation to film distribution (the MGM Agreement). Cineworld and CCI have agreed that they will work together to procure the novation or assignment of the MGM Agreement to Cinema City Holding, to the extent necessary. Cinema City Holding and/or Cineworld will, from Completion, provide an undertaking and indemnity to CCI to comply with the terms of the MGM Agreement until such time as CCI is released from all of its obligations under the MGM Agreement.

Coca Cola

IT 2004, a wholly-owned subsidiary of CCI, is party to an agreement with Coca Cola Israel in relation to beverage distribution (the Coca Cola Agreement). Cineworld, CCI and IT 2004 have agreed that they will work together to procure the novation and/or assignment of the Coca Cola Agreement to Cinema City Holding, to the extent necessary. Cinema City Holding and/or Cineworld will, from Completion, provide an undertaking and indemnity to IT 2004 to comply with the terms of the Coca Cola Agreement until such time as IT 2004 is released from all of its obligations under the Coca Cola Agreement.

Equipment Supply

CCI is party to equipment supply agreements with Barco N.V. (the Barco Agreement) and Master Image 3D Europe PLC (the Master Image Agreement). Cineworld and CCI have agreed that they will work together to procure the novation and/or assignment of the Barco Agreement and the Master Image Agreement to Cinema City Holding, to the extent necessary. Cinema City Holding and/or Cineworld will provide an undertaking and indemnity to CCI to comply with the terms of the Barco Agreement and the Master Image Agreement until such time as CCI is released from all of its obligations under each agreement.

8. Working capital statement

Cineworld is of the opinion that, after taking into account existing available facilities and the net proceeds of the Rights Issue, the working capital available to the Cineworld Group is sufficient for its present requirements, that is for at least the next 12 months from the date of publication of this document.

Cineworld is of the opinion that, taking into account the net proceeds of the Rights Issue, the Debt Financing and the bank and other facilities available to the Enlarged Group, the working capital available for the Enlarged Group is sufficient for its present requirements, that is, for at least the 12 months following the date of publication of this document.

9. Litigation

9.1 Cineworld

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which Cineworld is aware) during the period covering the 12 months preceding the date of this document which may have, or have had in the recent past, significant effects on the financial position or profitability of the Cineworld Group.

9.2 Cinema City

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened), which, during the 12 month period prior to the publication of this document, may have or have had, in the recent past, significant effects on Cinema City Holding's or Cinema City's financial position or profitability.

10. No significant change

10.1 Cineworld

There has been no significant change in the financial or trading position of the Cineworld Group since 26 September 2013, being the end of the last financial period of the Cineworld Group for which unaudited interim financial information has been provided.

10.2 Cinema City

There has been no significant change in the financial or trading position of the Cinema City Business since 30 September 2013, being the end of the last financial period of the Cinema City Business for which unaudited interim financial information has been provided.

11. Mandatory bids and compulsory acquisition rules relating to Ordinary Shares

The Company is subject to the Takeover Code. Other than as provided by the Companies Act 2006 and the Takeover Code, there are no rules or provisions relating to mandatory bids and/or squeeze-out and sell-out rules in relation to the Ordinary Shares. There is not in existence any current mandatory takeover bid in relation to the Company. There have been no takeover bids by third parties during the period from incorporation to 31 December 2012 or in the current financial year.

12. Third-party information

Certain information has been obtained from external publications and is sourced in this document where the information is included. Cineworld confirms that this information has been accurately reproduced and, so far as Cineworld is aware and is able to ascertain from the information published by third parties, no facts have been omitted which would render the reproduced information inaccurate or misleading. Unless otherwise stated, such information has not been audited.

13. General

Barclays has given and has not withdrawn its written consent to the inclusion in this document of its name and the references to it in the form and context in which they appear.

JP Morgan has given and has not withdrawn its written consent to the inclusion in this document of its name and the references to it in the form and context in which they appear.

Investec has given and has not withdrawn its written consent to the inclusion in this document of its name and the references to it in the form and context in which they appear.

The auditor and reporting accountant of the Company is KPMG Audit plc, whose address is at 15 Canada Square, London E14 5GL, and who is a member firm of the Institute of Chartered Accountants of England and Wales. KPMG Audit plc has given and has not withdrawn its written consent to the inclusion in this document of its report included in Part X (Unaudited pro forma statement of net assets of the Enlarged Group), and has authorised the contents of this report for the purposes of paragraph 5.5.3(2)(f) of the Prospectus Rules.

Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, whose address is at 3 Aminadav Street, Tel Aviv, Israel, has given and has not withdrawn its written consent to the inclusion in this document of its report included in Part IX (Financial Information relating to the Cinema City Business), and has authorised the contents of this report for the purposes of paragraph 5.5.3(2)(f) of the Prospectus Rules.

The aggregate costs and expenses payable by Cineworld in connection with the Rights Issue and the Combination are estimated to amount to approximately £18.0 million (excluding amounts in respect of VAT). Total estimated costs and expenses are split as follows: Rights Issue £3.2 million and Combination £14.8 million.

14. Documents available for inspection

Copies of the following documents will be available for inspection during normal business hours on any Business Day, free of charge, at the registered office of the Company at Power Road Studios, 114 Power Road, London, W4 5PY and at the offices of Slaughter and May, One Bunhill Row, London EC1Y 8YY, from the date of this document up to and including the later of the Admission of the Rights Issue Shares and the Admission of the Consideration Shares:

(a) the Articles;
(b) the Combination Agreement;
(c) the audited financial statements of the Cineworld Group for the FY 2012, FY 2011 and FY 2010, the unaudited interim results of the Cineworld Group for the 26 week period ended 27 June 2013, the unaudited interim results of the Cineworld Group for the 2013 Interim Period and the 2012 Interim Period;
(d) the combined financial statements of the Cinema City Business for FY 2012, FY 2011 and FY 2010 and the unaudited interim results of the Cinema City Business for the 2013 Interim Period and the 2012 Interim Period;
(e) the Accountants' Report on the Combined Financial Information on Cinema City set out in Part IX (Financial Information relating to the Cinema City Business) of this document;
(f) the Accountants' Report on the Unaudited Pro Forma Information on the Enlarged Group set out in Part X (Unaudited pro forma statement of net assets of the Enlarged Group) of this document;
(g) the letters of consent referred to in Section 13 of this Part XIII; and
(h) a copy of this document and the Form of Proxy.

15. Announcement of results of the Rights Issue

The Company will make an appropriate announcement(s) to a Regulatory Information Service giving details of the results of the Rights Issue.

PART XIV

DOCUMENTS INCORPORATED BY REFERENCE

This document should be read and construed in conjunction with the following documents which have been previously published and filed with the FCA and which shall be deemed to be incorporated in, and form part of, this document:

Reference Document	Information incorporated by reference into this document	Page number in reference document
Cineworld Group's Interim Report 2013,	Highlights 2013	1
containing Cineworld's unaudited consolidated interim financial statements for	Chief Executive Officer's Review	2
the 26 week period ended 27 June 2013.	Risks and Uncertainties	22
	Consolidated statement of profit or loss and other comprehensive income	10
	Consolidated statement of financial position	11
	Consolidated statement of changes in equity	12
	Consolidated statement of cash flows	14
	Notes to the condensed consolidated financial statements	15
	Independent review report	21
Cineworld Group's Annual Report and Accounts 2012, containing Cineworld's audited consolidated financial statements in respect of the financial year ended 31 December 2012, together with the audit report in respect of that period and a discussion of Cineworld's financial performance.	Highlights 2012	1
	Chairman's Statement	2
	Our Strategic Framework	8
	Our Strategic Progress	10
	Chief Executive and Chief Financial Officers' Business Review	12
	Risks and Uncertainties	24
	Auditors' Report	52
	Consolidated statement of comprehensive income	54
	Consolidated statement of financial position	55
	Consolidated statement of changes in equity	56
	Consolidated statement of cash flows	57
	Notes to the accounts
Cineworld Group's Annual Report and	Highlights 2011	1
Accounts 2011, containing Cineworld's audited consolidated financial statements in	Chairman's Statement	2
respect of the financial year ended	Our Strategy	6
31 December 2011, together with the audit report in respect of that period and a discussion of Cineworld's financial	Chief Executive and Chief Financial Officers' Business Review	14
performance.	Risks and Uncertainties	24
	Auditors' Report	52
	Consolidated statement of comprehensive income	53
	Consolidated statement of financial position	54

Reference Document	Information incorporated by reference into this document	Page number in reference document
	Consolidated statement of changes in equity	55
	Consolidated statement of cash flows	56
	Notes to the accounts	57
Cineworld Group's Annual Report and Accounts 2010, containing Cineworld's audited consolidated financial statements in respect of the financial year ended 31 December 2010, together with the audit report in respect of that period and a discussion of Cineworld's financial	Highlights 2010	1
	Chairman's Statement	4
	Our Strategy	6
	Chief Executive and Chief Financial Officers' Review	8
performance.	Risks and Uncertainties	16
	Auditors' Report	42
	Consolidated statement of comprehensive income	43
	Consolidated statement of financial position	44
	Consolidated statement of changes in equity	45
	Consolidated statement of cash flows	46
	Notes to the accounts	47

To the extent that any document or information incorporated by reference or attached to this document itself incorporates any information by reference, either expressly or impliedly, such information will not form part of this document for the purposes of the Prospectus Rules, except where such information or documents are stated within this document as specifically being incorporated by reference or where this document is specifically defined as including such information.

Any statement contained in a document which is deemed to be incorporated by reference into this document shall be deemed to be modified or superseded for the purpose of this document to the extent that a statement contained in this document (or in a later document which is incorporated by reference into this document) modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this document.

These documents are also available on the Company's website at www.cineworldplc.com.

Except as set out above, no other portion of these documents is incorporated by reference into this document and those portions which are not specifically incorporated by reference in this document are either not relevant for the prospective investors or the relevant information is included elsewhere in this document.

PART XV

DEFINITIONS

The following definitions apply throughout this document unless the context requires otherwise:

2012 Interim Period	in the case of Cineworld, the 39 week period ended 27 September 2012, and in the case of Cinema City Holding, the nine month period ended 30 September 2012;
2013 AGM	the annual general meeting of the Company held on 15 May 2013;
2013 Interim Period	in the case of Cineworld, the 39 week period ended 26 September 2013, and in the case of Cinema City Holding, the nine month period ended 30 September 2013;
4DX	4DXTM;
Adelphi Plan	the Adelphi-Carlton Limited Contributory Pension Plan;
Admission of the Consideration Shares	admission of the Consideration Shares to the Official List and to trading on the London Stock Exchange's main market for listed securities;
Admission of the Rights Issue Shares	admission of the Rights Issue Shares, nil paid, to the Official List and to trading on the London Stock Exchange's main market for listed securities;
Articles	the articles of association of Cineworld;
Audit Committee	the audit committee of Cineworld;
Auditors	KPMG Audit plc;
Banks	Barclays, JP Morgan and Investec;
Barclays	Barclays Bank PLC;
Board	the board of directors of the Company from time to time;
Business Day	any day (excluding Saturdays, Sundays and public holidays in England and Wales) on which banks are generally open for business in London;
CAGR	compound annual growth rate;
Capita Asset Services	a trading name for Capita Registrars Limited;
CCI	Cinema City International N.V., a company incorporated in The Netherlands;
CCI Shareholders	holders of ordinary shares in CCI;
CCI Shareholders' Meeting	the meeting of the CCI Shareholders to be held on or around 21 February 2014 to approve the Combination;
CCRE	Cinema City Real Estate B.V.;
CEE	Central and Eastern Europe or the Central and Eastern European Region, as the context requires;
certificated or in certificated form	in relation to a share or other security, a share or other security title to which is recorded in the relevant register of the share or other security concerned as being held in certificated form (that is, not in CREST);
Cinema City or the Cinema City Business	the Existing Cinema City Group's cinema business;
Cinema City Finance	Cinema City Finance B.V.;
Cinema City Holding	Cinema City Holding B.V.;

Cinema City Holding Group	Cinema City Holding together with its subsidiaries and subsidiary undertakings;
Cineworld or the Company	Cineworld Group plc, a company incorporated in England and Wales with registered number 05212407, whose registered office is at Power Road Studios, 114 Power Road, Chiswick, London W4 5PY;
Cineworld Directors	the directors of Cineworld, and Cineworld Director shall mean any one of them;
Cineworld Group	the Company together with its subsidiaries and subsidiary undertakings;
Cineworld Group's 2010 Annual Report and Accounts	the annual report and accounts of the Cineworld Group for the 52 week period ended 30 December 2010;
Cineworld Group's 2011 Annual Report and Accounts	the annual report and accounts of the Cineworld Group for the 52 week period ended 29 December 2011;
Cineworld Group's 2012 Annual Report and Accounts	the annual report and accounts of the Cineworld Group for the 52 week period ended 27 December 2012;
Cineworld Group's 2013 Interim Report	the unaudited interim results of the Cineworld Group for the 26 week period ended 27 June 2013;
Closing Price	the closing middle market quotation of an Existing Ordinary Share as derived from the daily official list published by the London Stock Exchange;
Club Financing Agreement	a club financing agreement entered into in December 2012 by Cinema City Finance and certain other members of the Existing Cinema City Group (including certain members of the Cinema City Holding Group) with Bank Zachodni WBK S.A., HSBC Bank plc, ING Bank Slaski S.A., and from February 2013, BNP Paribas;
Code	the US Internal Revenue Code of 1986, as amended;
Combination	the proposed acquisition of the entire issued share capital of Cinema City Holding pursuant to the Combination Agreement;
Combination Agreement	the share purchase agreement dated 10 January 2014 between CCI and the Company pursuant to which the Company has conditionally agreed to acquire the entire issued share capital of Cinema City Holding, a summary of which is contained in Part III (Terms and Conditions of the Combination) of this document;
Companies Act 2006	the Companies Act 2006, as amended from time to time;
Completion	completion of the Combination;
Consideration Shares	the Ordinary Shares representing 24.9 per cent. of Cineworld's share capital immediately following Completion, which are proposed to be issued by Cineworld pursuant to the Combination;
CREST	the paperless settlement procedure operated by Euroclear enabling system securities to be evidenced otherwise than by certificates and transferred otherwise than by written instrument;
CREST Deposit Form	the CREST deposit form set out on page 4 of the Provisional Allotment Letter;
CREST Manual	the rules governing the operation of CREST as published by Euroclear;

CREST member	a person who has been admitted by Euroclear as a system member (as defined in the CREST Regulations);
CREST Regulations	the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755), as amended;
CRM	customer relationship management;
CSOP	the Cineworld Group Company Share Option Plan;
DCM	Digital Cinema Media Limited;
Dealing Day	a day upon which dealings in domestic securities may take place on the London Stock Exchange;
Debt Financing	the provision of the £240 million and EUR192 million term and revolving facilities pursuant to the terms of the Facilities Agreement;
DTR or Disclosure and Transparency Rules	the disclosure and transparency rules made by the FCA under section 73A of FSMA, as amended from time to time;
Due Underwriting Proportions	in the case of Barclays, 40 per cent., in the case of JP Morgan, 40 per cent. and in the case of Investec, 20 per cent;
Earnings Consideration	an amount equal to: (i) A25,900,000 if Completion occurs in or before February 2014; and (ii) A28,900,000 if Completion occurs in or after March 2014; representing 75 per cent. of the forecast accumulated adjusted earnings of the Cinema City Business from (and including) 1 October 2013 to (and including) the date of Completion (assuming a February or March Completion, respectively);
EBITDA	operating profit before depreciation, impairments, reversals of impairments and amortisation, onerous lease and other non-recurring or non-cash property charges, transaction, pension, refinancing and reorganisation costs;
EBITDAR	EBITDA before rent costs;
EEA	the European Economic Area;
EEA States	the member states of the European Economic Area;
Employee Share Schemes	the PSP, the Sharesave Scheme and the CSOP;
Enlarged Group	the Cineworld Group as enlarged by the Rights Issue proceeds and the Combination (following completion of the Rights Issue and completion of the Combination, as applicable);
EPS	earnings per share before goodwill, amortisation and exceptional items;
ESMA	European Securities and Markets Authority;
EU	the European Union;
EUR, euro or E	the lawful currency of the EU;
EURIBOR	Euro Interbank Offered Rate;
Euroclear	Euroclear UK & Ireland Limited, the operator of CREST;
Ex-Rights Date	the date on which the New Ordinary Shares are expected to commence trading ex-rights, being 8.00 a.m. on 30 January 2014;
Excluded Shareholders	subject to certain exceptions described under ''Overseas Shareholders and selling and transfer restrictions—Offering restrictions relating to the United States,'' Shareholders who have registered addresses in, who are incorporated in, registered in or otherwise resident or located in, any Excluded Territory, and Excluded Shareholder shall be construed accordingly;

Excluded Territories	Australia, Canada, New Zealand, the United States and any other jurisdiction where the extension or availability of the Rights Issue (and any other transaction contemplated thereby) would breach any applicable law or regulation, and Excluded Territory shall be construed accordingly;
Executive Directors	collectively, the Chief Executive Officer and the Chief Financial Officer of Cineworld, and Executive Director shall mean either one of them;
Existing Cinema City Group	CCI together with its subsidiaries and subsidiary undertakings;
Existing Facilities Agreement	the existing bank facility of the Cineworld Group, as described at Section 5 of Part VI (Operating and Financial Review of Cineworld) of this document;
Existing Holding	a Qualifying Shareholder's holding of Ordinary Shares on the Record Date;
Existing Ordinary Shares	the Ordinary Shares of one pence each in the capital of Cineworld in issue immediately prior to the Rights Issue;
Facilities Agreement	the facility agreement to be entered into by the Company pursuant to the Combination, as described at Section 6(d) of Part XIII (Additional Information) of this document;
FCA	the Financial Conduct Authority;
Form of Proxy	the form of proxy enclosed with this document for use in connection with the General Meeting;
FSMA	the Financial Services and Markets Act 2000, as amended from time to time;
Fully Paid Rights	rights to acquire Rights Issue Shares, fully paid;
FY 2010	in the case of Cineworld, the 52 week period ended 30 December 2010, and in the case of Cinema City Holding, the financial year ended 31 December 2010;
FY 2011	in the case of Cineworld, the 52 week period ended 29 December 2011, and in the case of Cinema City Holding, the financial year ended 31 December 2011;
FY 2012	in the case of Cineworld, the 52 week period ended 27 December 2012, and in the case of Cinema City Holding, the financial year ended 31 December 2012;
FY 2013	in the case of Cineworld, the 52 week period ended 26 December 2013, and in the case of Cinema City Holding, the financial year ended 31 December 2013;
FY 2014	in the case of Cineworld, the 53 week period ended 1 January 2015, and in the case of Cinema City Holding, the financial year ended 31 December 2014;
General Meeting	the general meeting of the Company proposed to be held at the offices of Slaughter and May at 11.00 a.m. on 29 January 2014 to approve the Resolution, the notice of which is contained in this document;
Group	the Cineworld Group, the Cinema City Holding Group and/or the Enlarged Group, as the context permits;
HMRC	HM Revenue & Customs, the UK tax authority;
IFRS	International Financial Reporting Standards as adopted by the EU;
IMAX	IMAX;

Investec	Investec Bank plc;
IRS	the US Internal Revenue Service;
ISIN	international securities identification number;
Israeli Facilities Agreement	a facilities agreement entered into on 19 February 2013 by IT 2004 with Bank Hapoalim BM, as amended on 25 February 2013;
IT 2004	International Theatres 2004 Limited;
ITIT	I.T. International Theatres Ltd.;
Joint Bookrunners	Barclays, JP Morgan and Investec;
JP Morgan	J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove;
Latest Practicable Date	8 January 2014;
LIBOR	London Interbank Offered Rate;
Listing Rules	the listing rules made by the FCA under section 73A of FSMA, as amended from time to time;
London Stock Exchange	London Stock Exchange plc;
Long Stop Date	24 April 2014 (or such later date as is agreed pursuant to the terms of the Combination Agreement);
LTIP	long-term incentive scheme;
member account ID	the identification code or number attached to any member account in CREST;
Member State	a member state of the EEA;
MGM Scheme	the MGM Pension Scheme;
Money Laundering Regulations	the Money Laundering Regulations (2007) S.I. 2012/2157, as amended;
MTM Instruction	many-to-many instruction which allows two CREST members to settle up to four movements of securities and create up to two assured payment obligations at the same time;
New Ordinary Shares	as the context permits, the Rights Issue Shares and/or the Consideration Shares;
Nil Paid Rights	Rights Issue Shares in nil paid form provisionally allotted to Qualifying Shareholders pursuant to the Rights Issue;
NIS	new Israeli shekel, the lawful currency of Israel;
Nomination Committee	the nomination committee of Cineworld;
Non-Executive Directors	the Cineworld Directors who hold the position of Chairman or non-executive director, and Non-Executive Director shall mean any one of them;
Notice of General Meeting	the notice of General Meeting contained in this document;
Official List	the official list of the UKLA;
Ordinary Shares	the ordinary shares with a nominal value of one pence each in the capital of the Company including, if the context requires, the Rights Issue Shares and the Consideration Shares;
Overseas Shareholders	Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom, and Overseas Shareholder shall be construed accordingly;
PD Regulation	the Prospectus Directive Regulation (No 2004/809/EC);

Permitted US Shareholders	Qualifying Shareholders resident in the United States permitted by Cineworld to participate in the Rights Issue;
PFIC	a passive foreign investment company;
Picturehouse	Picturehouse Cinemas Limited (formerly City Screen Limited) and its subsidiaries, acquired by the Cineworld Group on 6 December 2012;
PLN	Polish złoty, the lawful currency of Poland;
Pounds Sterling or £	the lawful currency of the United Kingdom;
Proposed Directors	the persons who have agreed to become directors of the Company upon Completion, being Moshe (Mooky) Greidinger, Israel Greidinger, Scott Rosenblum and Arni Samuelsson, and Proposed Director shall be construed accordingly;
Prospectus or this document	this combined prospectus and class 1 circular;
Prospectus Directive	Directive 2003/71/EC (as amended from time to time, including by Directive 2010/73/EC (the PD Amending Directive) to the extent implemented in the relevant EEA State) and includes any relevant implementing measures in each EEA State that has implemented Directive 2003/71/EC;
Prospectus Directive Regulation	Regulation number 809/2004 of the European Commission;
Prospectus Rules	the prospectus rules made by the FCA under section 73A of FSMA, as amended from time to time;
Provisional Allotment Letter	the provisional allotment letter to be issued to Qualifying Non-CREST Shareholders;
PSP	the Cineworld Group Performance Share Plan;
Qualifying CREST Shareholders	Qualifying Shareholders holding Ordinary Shares on the register of members of the Company on the Record Date which are in uncertificated form;
Qualifying Non-CREST Shareholders	Qualifying Shareholders holding Ordinary Shares on the register of members of the Company on the Record Date which are in certificated form;
Qualifying Shareholders	holders of Ordinary Shares who are on Cineworld's register of members at the Record Date;
Receiving Agent	Capita Asset Services;
Record Date	close of business on 27 January 2014;
Registrar	Capita Asset Services;
Regulation S	Regulation S under the Securities Act;
regulatory authority	any central bank, ministry, governmental, quasi governmental (including the EU), supranational, statutory, regulatory or investigative body or authority (including any national or supranational antitrust or merger control authority), national, state, municipal or local government (including any subdivision, court, administrative agency or commission or other authority thereof), private body exercising any regulatory, taxing, importing or other authority, trade agency, association, institution or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction, including for the avoidance of doubt, the takeover panel, the FCA, the UKLA and the London Stock Exchange;

Regulatory Information Service	one of the regulatory information services authorised by the UKLA to receive, process and disseminate regulatory information from listed companies;
Relationship Agreement	the relationship agreement between CCI and the Company dated 10 January 2014 relating to certain matters associated with CCI's shareholding in the Company following the issue to it of the Consideration Shares;
Relevant Leases	leases of seven existing Cinema City cinema-related properties (Janki, Katowice, Łod´ ´z and Torun in Poland; Galaxie in the ´ Czech Republic; AuPark in Slovakia; and Rishon LeZion in Israel) and one office (in Fosa, Poland) to be granted by members of the Remaining Cinema City Group to members of Enlarged Group based on a framework form of lease agreement as more particularly described in Section 3 of Part III (Terms of the Combination);
Remaining Cinema City Group	CCI and its subsidiaries and subsidiary undertakings following Completion;
Remuneration Committee	the remuneration committee of Cineworld;
Reorganisation	the internal reorganisation of the Existing Cinema City Group, as described in further detail in Section 3 of Part V (Information on Cinema City);
Resolution	the resolution set out in the Notice of General Meeting;
Rights Issue	the offer by way of rights to Qualifying Shareholders to acquire New Ordinary Shares on the terms and conditions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letter;
Rights Issue Price	230 pence per Rights Issue Share;
Rights Issue Shares	47,965,465 Ordinary Shares proposed to be issued by Cineworld pursuant to the Rights Issue;
SDRT	UK stamp duty reserve tax;
Securities Act	the US Securities Act of 1933, as amended from time to time;
Shareholder	any holder of Ordinary Shares registered on the register of members of the Company;
Sharesave Scheme	the Cineworld Group Sharesave Scheme;
SMT	the senior management team of Cineworld, including the Executive Directors;
Sponsor	JP Morgan;
Takeover Code	the City Code on Takeovers and Mergers;
Theoretical Ex-Rights Price	the price per Ordinary Share calculated as at a date by applying the following formula: (current price * Existing Ordinary Shares) plus (Rights Issue Price * Rights Issue Shares) divided by Existing Ordinary Shares plus Rights Issue Shares;
Transaction	the Combination, the Rights Issue and the Debt Financing;
UK Corporate Governance Code	the combined code on corporate governance issued by the Financial Reporting Council in the United Kingdom from time to time;
UKLA	the FCA acting in its capacity as the competent authority under FSMA;

uncertificated or in uncertificated form	in relation to a share or other security, a share or other security title to which is recorded in the relevant register of the share or other security concerned as being held in uncertificated form (that is, in CREST) and title to which may be transferred by using CREST;
Uncertificated Securities Regulations	the Uncertificated Securities Regulations 2001 as amended from time to time;
Underwriters	Barclays, JP Morgan and Investec;
Underwriting Agreement	the underwriting agreement dated 10 January 2014 between the Company and the Banks, a summary of which is contained in Section 6(b) of Part XIII (Additional Information) of this document;
United Kingdom or UK	the United Kingdom of Great Britain and Northern Ireland;
United States or US	the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia, and all other areas subject to its jurisdiction;
USD, US\$ or US dollar	the lawful currency of the United States;
US Holder	a beneficiary owner of Nil Paid Rights, Fully Paid Rights or Rights Issue Shares that is (i) an individual citizen or resident of the United States for US federal income tax purposes, (ii) a corporation (or other entity treated as a corporation for US federal income tax purposes) created or organised under the laws of the United States or any state or political subdivision thereof, (iii) an estate the income of which is subject to US federal income tax without regard to its source, or (iv) a trust if a court within the United States is able to exercise primarily supervision over the administration of the trust and one or more US persons have the authority to control all substantial decisions of the trust, or the trust has elected to be treated as a domestic trust for US federal income tax purposes;
VAT	(i) within the EU, any tax imposed by any member state in conformity with the directive of the council of the EU on the common system of value added tax (2006/112/EC), and (ii) outside the EU, any tax corresponding to, or substantially similar to, the common system of value added tax referred to in paragraph (i) of this definition;
VPF	virtual print fee;
WIBOR	Warsaw Interbank Offered Rate; and
WSE	Warsaw Stock Exchange.

NOTICE OF GENERAL MEETING

Cineworld Group plc

(incorporated and registered in England and Wales with registered number 05212407)

NOTICE IS HEREBY GIVEN that a general meeting of Cineworld Group plc (the Company) will be held at 11.00 a.m. on 29 January 2014 at the offices of Slaughter and May, One Bunhill Row, London EC1Y 8YY (the General Meeting) for the purposes of considering and, if thought fit, passing the following resolution which will be proposed as an ordinary resolution (this means that for the resolution to be passed, more than half of the votes cast must be in favour of the resolution).

THAT:

Resolution 1

(a) the proposed acquisition of the entire issued share capital of Cinema City Holding B.V. (the Combination) pursuant to the terms and subject to the conditions contained in the conditional share purchase agreement dated 10 January 2014 between Cinema City International N.V. and the Company (the Combination Agreement) and all other agreements and ancillary arrangements contemplated by the Combination Agreement be and are hereby approved and that the directors of the Company (the Directors) (or any duly constituted committee of the Directors) be and are hereby authorised to take all such steps as may be necessary, expedient or desirable in relation thereto and to carry the same into effect with such modifications, variations, revisions or amendments (provided such modifications, variations or amendments are not of a material nature) as they shall deem necessary, expedient or desirable; and
(b) subject to and conditional upon admission to listing on the premium segment of the Official List by the UK Listing Authority and to trading on London Stock Exchange plc's market for listed securities of the new ordinary shares of one pence each to be issued by the Company in connection with the Combination and, in addition, to the extent unutilised, to the authority conferred on them at the last annual general meeting of the Company on 15 May 2013, the Directors be and they are hereby generally and unconditionally authorised, pursuant to and in accordance with section 551 of the Companies Act 2006, to exercise all the powers of the Company to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company, credited as fully paid up, up to an aggregate nominal amount of £657,670 in connection with the Combination, such authority to expire on the date of the Company's annual general meeting in 2014, save that the Company may enter into agreements at any time prior to such expiry in connection with the Combination (whether before or after the passing of this resolution) which would or might require such shares in the Company to be allotted after such expiry and the Directors may allot shares in the Company in pursuance of such agreements as if the power conferred hereby had not expired.

10 January 2014

By the order of the Board

Richard Ray Company Secretary

Registered office: Power Road Studios 114 Power Studios Chiswick London W4 5PY

Notes:

Note 1

Holders of ordinary shares, or their duly appointed representatives, are entitled to attend and vote at the General Meeting. Shareholders are entitled to appoint a proxy to exercise all or any of their rights to attend and speak and vote on their behalf at the meeting. A shareholder can appoint the Chairman of the meeting or anyone else to be his/her proxy at the meeting. A proxy need not be a shareholder. More than one proxy can be appointed in relation to the General Meeting provided that each proxy is appointed to exercise the rights attached to a different ordinary share or shares held by that shareholder. To appoint more than one proxy, the proxy form should be photocopied and completed for each proxy holder. The proxy holder's name should be written on the proxy form together with the number of shares in relation to which the proxy is authorised to act. A failure to specify the number of shares each proxy appointment relates to or specifying an aggregate number of shares in excess of those held by the member will result in the proxy appointment being invalid. The box on the proxy form must also be marked with a cross to indicate that the proxy instruction is one of multiple instructions being given. All proxy forms must be signed.

The return of a completed proxy form, other such instrument or any CREST Proxy Instruction (as described in Note 2) will not prevent a shareholder attending the General Meeting and voting in person if he/she wishes to do so.

A form of proxy is enclosed with this notice. To be valid, the form of proxy, together with the power of attorney or other authority under which it is signed (or a notarially certified copy of such power or authority), must be deposited with the Company's Registrars, Capita Asset Services at PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU not later than 11.00 a.m. on 27 January 2014 or not less than 48 hours before the time of the General Meeting if it is adjourned. Alternatively, to appoint a proxy online (which must be done by the same deadline as above), shareholders may go to the following website: www.capitashareportal.com. You should select ''Register for the Share Portal'' and enter ''Cineworld Group plc''. The Company's name will be presented on the next screen and you should click on this. Once you have clicked, you should follow the prompts on the screen by entering your surname, investor code, postcode, e-mail address and to select a password. Once registered, you will be able to complete your proxy appointment online.

A member present in person or by proxy shall have one vote on a show of hands and on a poll every member present in person or by proxy shall have one vote for every ordinary share of which he/she is the holder.

Note 2

In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by Capita Asset Services (ID RA10) not later than 11.00 a.m. on 27 January or not less than 48 hours before the time of the General Meeting if it is adjourned. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which Capita Asset Services is able to retrieve the message by enquiry to CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular messages and normal system timings and limitations will apply in relation to the input of a CREST Proxy Instruction. It is the responsibility of the CREST member concerned to take such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in regulation 35(5)(a) of the Uncertificated Securities Regulations.

Note 3

A person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a Nominated Person) may, under an agreement between him/her and the shareholder by whom he/she is nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.

The statements of the rights of members in relation to the appointment of proxies in notes 1 and 2 above do not apply to a Nominated Person. The rights described in those notes can only be exercised by registered members of the Company.

Note 4

Pursuant to regulation 41(1) of the Uncertificated Securities Regulations, only those shareholders registered in the register of members of the Company as at 11.00 a.m. on 27 January 2014 shall be entitled to attend and vote at the meeting in respect of the number of shares registered in their name at that time. Changes to entries on the relevant register of members after that time shall be disregarded in determining the rights of any person to attend or vote at the meeting. If the meeting is adjourned to a time not more than 48 hours after the specified time applicable to the original meeting, that time will also apply for the purpose of determining the entitlement of members to attend and vote (and for the purpose of determining the number of votes they may cast) at the adjourned meeting. If the meeting is adjourned for a longer period then, to be so entitled, a member must be entered on the Company's register of members at the time which is 48 hours before the time fixed for the adjourned meeting or, if the Company gives notice of the adjourned meeting, at the time specified in that notice.

Note 5

As at 8 January 2014, the Company's issued share capital consists of 149,892,079 ordinary shares, carrying one vote each. Therefore the total voting rights in the Company as at 8 January 2014 are 149,892,079.

Note 6

All shareholders and their proxies attending have the right to ask questions at the meeting. The Company will answer any such questions relating to the business of the meeting, but it may not answer if (a) if it would involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is not desirable in the interests of the Company or the good order of the meeting that the question be answered.

Note 7

Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares.

Note 8

A copy of this notice can be found at www.cineworldplc.com.

Merrill Corporation Ltd, London 13ZDE17201

AI Terminal

CINEWORLD GROUP PLC

5311_prs_2014-01-10_7f11ce17-2312-4eed-8ce4-2f380e39659b.pdf

THIS DOCUMENT AND THE ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION.

CINEWORLD GROUP PLC

Proposed Combination with the cinema operations of Cinema City International N.V.

Notice of General Meeting

Notice to US investors

Notice to Canadian residents

Notice to all Investors

TABLE OF CONTENTS

SUMMARY

Consolidated Statement of Profit or Loss

Consolidated Statement of Financial Position

Consolidated Statement of Cash Flows

Combined Statements of Profit or Loss

Consolidated statement of financial position

Combined statements of cash flows

Unaudited pro forma statement of net assets as at 26 September 2013

RISK FACTORS

RISKS RELATING TO THE BUSINESS AND INDUSTRY IN WHICH CINEWORLD AND CINEMA CITY OPERATE AND, FOLLOWING THE COMBINATION, THE ENLARGED GROUP WILL OPERATE

Cineworld and Cinema City depend and, following the Combination, the Enlarged Group will depend, on third party film production and performance.

Any reduction to or elimination of the ''release window'' could increase the attractiveness of alternative film delivery methods and may decrease the box office revenue of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Revenue from retail sales is an important contributor to the profits of Cineworld and Cinema City and, following the Combination, will be an important contributor to the profits of the Enlarged Group.

Competition from other leisure and entertainment attractions and events may decrease the box office revenue of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

An increase in piracy of films may decrease the box office revenue of Cineworld, Cinema City and, following the Combination, the Enlarged Group or adversely affect relationships with distributors.

The business of Cineworld and Cinema City is and, following the Combination, the business of the Enlarged Group will be subject to significant competitive pressures.

Cineworld and Cinema City are and, following the Combination, the Enlarged Group will be subject to uncertainties relating to future expansion plans.

Advertising revenues contribute to the profits of Cineworld and Cinema City and, following the Combination, will contribute to the profits of the Enlarged Group.

Cinema City is and, following the Combination, the Enlarged Group will be exposed to foreign currency exchange rate risk that could affect results of operations and comparability of results between financial reporting periods.

Cineworld and Cinema City rely and, following the Combination, the Enlarged Group will rely on key members of their senior management.

Profitability may be reduced due to increases in labour and energy costs or other overheads.

Abnormal, severe or unseasonable weather conditions may adversely affect the results of operations of Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Cineworld, Cinema City and, following the Combination, the Enlarged Group may not realise the expected benefits from planned operational improvements or revenue enhancing capital expenditure initiatives.

Cineworld, Cinema City and, following the Combination, the Enlarged Group may be subject to more merger approvals in connection with future acquisition opportunities.

Cineworld and Cinema City are and, following the Combination, the Enlarged Group will be subject to risks relating to leases.

Acquired businesses may not perform as expected or may be difficult to integrate.

The terms of the financing arrangements of Cineworld, Cinema City and, following the Combination, the Enlarged Group may limit their commercial and financial flexibility.

Cineworld and, following the Combination, the Enlarged Group may not recover all the costs incurred with the conversion to digital projection.

Political, economic and legal risks associated with countries in emerging markets, including in CEE, could adversely affect the business and results of operations of Cinema City and, following the Combination, the Enlarged Group.

Additional risks may arise for Cineworld, Cinema City and, following the Combination, the Enlarged Group as a result of civil unrest, terrorism or other events beyond their control.

Uninsured and underinsured losses.

Cinema City and, following the Combination, the Enlarged Group could be negatively affected if certain copyright claims against Cinema City are successful.

Cineworld is and, following the Combination, the Enlarged Group will be subject to uncertainties related to new technologies, including the potentially high costs of re-equipping cinemas.

Security breaches and other disruptions could compromise the information of Cineworld, Cinema City and, following the Combination, the Enlarged Group and expose them to liability, which would cause their business and reputation to suffer.

Changes in privacy laws could adversely affect the ability of Cineworld and, following the Combination, the Enlarged Group to market products effectively.

Cineworld and, following the Combination, the Enlarged Group may be required to increase the level of contribution it makes to pension schemes.

Changes in lease accounting standards may materially adversely affect Cineworld, Cinema City and, following the Combination, the Enlarged Group.

Cineworld, Cinema City and, following the Combination, the Enlarged Group are subject to taxation which is complex and often requires subjective determinations.

RISKS RELATING TO THE COMBINATION

The Combination is conditional upon certain conditions, which may not be satisfied and, as the Rights Issue is not conditional on Completion, if the Combination does not complete, but the Rights Issue does, the proceeds of the Rights Issue will be retained by Cineworld.

Cineworld will not have full recourse to CCI under the Combination Agreement against all potential liabilities in Cinema City, whether identified or unidentified.

Combination-related costs may exceed Cineworld's expectations.

The Enlarged Group may experience difficulties in integrating the existing businesses carried on by Cineworld and Cinema City, in particular due to the substantial increase in the scale of operations.

The Enlarged Group may not realise, or it may take longer than expected to realise, the perceived benefits and synergies of the Combination.

Existing Shareholders will experience a dilution of their ownership in Cineworld.

Risks of executing the Combination could cause the market price of Cineworld Ordinary Shares to decline.

Third parties may terminate or alter existing contracts with Cinema City.

RISKS RELATING TO THE RIGHTS ISSUE AND AN INVESTMENT IN ORDINARY SHARES

The value of an investment in New Ordinary Shares may be subject to material fluctuations and may not reflect the underlying asset value.

The market price for Ordinary Shares may decline below the Rights Issue Price.

An active trading market in the Nil Paid Rights may not develop.

Qualifying Shareholders who do not, or who are not permitted to, acquire New Ordinary Shares in the Rights Issue will experience dilution in their ownership of Cineworld.

Any future issue of Ordinary Shares will further dilute the holdings of current Shareholders and could adversely affect the market price of Ordinary Shares.

The Company's ability to pay dividends is not guaranteed.

Overseas Shareholders may not be able to acquire New Ordinary Shares in the Rights Issue or subscribe for future issues of Ordinary Shares.

The ability of Overseas Shareholders to bring actions or enforce judgments against the Enlarged Group or its directors or officers may be limited.

IMPORTANT NOTICES

DISCLAIMER

FORWARD-LOOKING STATEMENTS

Forward-looking statements contained in this document do not in any way seek to qualify the working capital statement contained in Section 8 of Part XIII (Additional Information) of this document.

PRESENTATION OF FINANCIAL INFORMATION

Cineworld

Acquisition of Picturehouse

Cinema City

Non IFRS financial information

EBITDA and EBITDAR

Adjusted earnings

Net debt

Co-terminus period ends