REG - GVC Holdings PLC - Half-year Report <Origin Href="QuoteRef">GVC.L</Origin> - Part 3

EntainAnnouncement

14/09/2017 07:10

- Part 3: For the preceding part double click  ID:nRSN6927Qb 

calculated by the annual share bonus amount over the share
price at grant date. 
 
Fair value of share options and assumptions: 
 
 Date of grant                         Share price at date of grant*(in £)    Exercise price (in £)  Expected volatility  Exercise multiple  Expected dividend yield  Risk free rate**  Fair value at measurement date (in £)  
                                                                                                                                                                                                                               
                                                                                                                                                                                                                               
 02 Feb 16 - equity settled 30 months  4.67                                   4.22                   22%-30%              n/a                n/a                      n/a               0.32-0.47                              
 02 Feb 16 - equity settled 30 months  4.67                                   4.67                   22%-30%              n/a                n/a                      n/a               0.22-0.28                              
 02 Feb 16 - equity settled 24 months  4.67                                   4.22                   n/a                  n/a                n/a                      n/a               0.32-0.47                              
 16 Dec 16 - equity settled 30 months  6.48                                   4.22                   30%-28%              n/a                n/a                      n/a               1.43-1.94                              
 30 Mar 17 - equity settled 18 months  7.28                                   4.22                   30%-28%              n/a                n/a                      n/a               1.88-2.39                              
                                                                                                                                                                                                                               
                                                                                                                                                                                                                               
 
 
* This is the bid price, not the mid-market price, at market close, as sourced from Bloomberg. 
 
** The measurement of the risk-free rate was based on rate of UK sovereign debt prevalent at each grant date over the
expected term of the option. 
 
For the 2016 LTIP and MIP schemes, the expected volatilities have been calculated using historical prices for companies
that were constituents of the FTSE 250 at the grant date.  The LTIP scheme options accrue dividend credits and the yield is
assumed to be nil for 2016 and 10% thereafter.  As the schemes vest on a staggered basis over a period of up to 30 months,
the volatilities have been calculated over each relevant time period.  The fair value of each phase of the options has been
calculated separately, shown as a range in the table above, and the cost of each phase is allocated across the vesting
period for that phase. 
 
12.         RELATED PARTIES 
 
12.1      Identity of Related Parties 
 
The Group has related party relationships with its subsidiaries and with its Directors and executive officers. 
 
12.2      Transactions with Directors and Key Management Personnel 
 
Kenneth Alexander received dividends during the period of E0.5m (2016: Enil).  The wife of Kenneth Alexander received
dividends during the period of E0.1m (2016: Enil) in respect of her interest in the ordinary share capital of the Group. 
 
Karl Diacono is the Chief Executive Officer of Fenlex Corporate Services Limited, a corporate service provider incorporated
in Malta. During the period ended 30 June 2017 Fenlex received E0.05m from the Group in relation to Company Secretarial and
other matters arising in Malta (2016: E0.07m). 
 
Lee Feldman received dividends during the period of E0.2m (2016: Enil) in respect of his beneficial interest in the
ordinary share capital of the Group. Lee Feldman is the Managing Partner of Twin Lakes Capital, a private equity firm based
in New York. During the period ended 30 June 2017, Twin Lakes Capital received E0.03m (2016: E0.03m) in relation to office
services. 
 
Norbert Teufelberger received dividends of E0.8m during the period (2016: Enil), 
 
Peter Isola is a partner at Isolas, a law firm in Gibraltar, which charged legal expenses of E0.04m in the period (2016:
E0.2m). 
 
The Group purchased certain customer services of E1.0m (2016: E1.1m) from an associate, with amounts owed at 30 June 2017
of E0.2m (31 December 2016: E0.2m). 
 
13.         CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS 
 
13.1     East Pioneer Corporation Guarantee 
 
On 21 November 2011 the Group entered into a service agreement and guarantee relating to the acquisition by East Pioneer
Corporation B.V. ('EPC') from Sportingbet PLC of Superbahis, a Turkish language website. The maximum contingent liability
under this agreement at inception was E171 million. The Directors consider this has a fair value of Enil (31 December 2016:
Enil). 
 
The Group continues to provide back office and support services to EPC. Following the acquisition of Sportingbet PLC on 19
March 2013 the Group now receives all payments of amounts from EPC under the Business Purchase Agreement and other
Transaction Documents and does not now offer any guarantee of payments to legal entities outside of the Group. 
 
13.2     Indirect taxation 
 
Group companies may be subject to VAT on transactions which have been treated as exempt supplies of gambling, or on
supplies which have been exported outside the scope of VAT where legislation provides that the services are received or
used and enjoyed in the country where the service provider is located. Where group companies have treated supplies of
gambling as exempt based on exemptions available to comparable supplies in the place where the customer is located, the
right to exemption may be restricted if the supplies do not have similar characteristics or meet the same needs as other
exempt gambling from the customer's point of view. Where group companies have determined the taxable amount for supplies of
gambling to be the amount of stakes received less amounts that have to be returned to players, the right to a deduction for
amounts returned to players may be restricted to the extent that the obligation to make a payment is not enforceable in the
place where the customer is located. 
 
Revenues earned from customers located in any particular jurisdiction may give rise to further taxes in that jurisdiction.
If such taxes are levied, either on the basis of current law or the current practice of any tax authority, or by reason of
a change in the law or practice, then this may have a material adverse effect on the amount of tax payable by the Group or
on its financial position. Where it is considered probable that a previously identified contingent liability will give rise
to an actual outflow of funds, then a provision is made in respect of the relevant jurisdiction and period impacted. Where
the likelihood of a liability arising is considered remote, or the possible contingency is not material to the financial
position of the Group, the contingency is not recognised as a liability at the balance sheet date. 
 
This information is provided by RNS
The company news service from the London Stock Exchange