REG - GVC Holdings PLC - Notification of Transfer to a Premium Listing <Origin Href="QuoteRef">GVC.L</Origin> - Part 4
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value in use calculations based on
cashflow projections covering the following ten year period. The Group believes that going beyond five years' cashflows in
the value in use calculations is appropriate given the Group is an established business and is a market leader in a growth
industry.
The Directors have concluded that there are no reasonably possible changes in the key assumptions which would cause the
carrying value of goodwill and other intangibles to exceed their value in use. The major assumptions used for the bwin
labels CGU are as follows:
Key assumptions used in the projections
Terminal
Discount Operating growth
bwin labels rate margin Rate
Key assumptions used in the projections 9.4% 30.8% 1.0%
Games labels
The recoverable amount of the Games labels CGU of E303.8m has been determined from value in use calculations based on
cashflow projections covering the following ten year period. The Group believes that going beyond five years' cashflows in
the value in use calculations is appropriate given the Group is an established business and is a market leader in a growth
industry.
The Directors have concluded that there are no reasonably possible changes in the key assumptions which would cause the
carrying value of goodwill and other intangibles to exceed their value in use. The major assumptions used for the Games
labels CGU are as follows:
Key assumptions used in the projections
Terminal
Discount Operating growth
Games labels rate margin Rate
Key assumptions used in the projections 9.4% 21.9% 1.0%
PXP
The PXP CGU which was acquired in 2014 forms part of the non-core segment. The recoverable amount of this CGU of E21.8m can
be individually identified and has been determined from value in use calculations based on cashflow projections of the PXP
business and synergies brought to all of the Group's operations. The cashflow projections have been made over a 5-year
period.
The table below shows what the effect of changes in the key assumptions would have on the recoverable amount.
Key assumptions used in the projections
Terminal
Discount growth
Other - PXP rate Rate
Key assumptions used in the projections 15.2% 2.0%
Effect of 1% increase in assumption (E1.6m) E1.2m
Effect of 1% decrease in assumption E2.0m (E1.0m)
A review was undertaken at 31 December 2015 to assess whether there were any factors that would give rise to concerns on
the carrying value of intangible assets. As a result of the review, it was concluded that an impairment charge of E16.4m
against goodwill was required in respect of the group's acquisition of PXP Solutions. This arises in large part due to the
fact that the goodwill included on the balance sheet in respect of the acquisition included an assumption, based on the
Board's best estimate at the time, that contingent consideration of E13.6m (based on exchange rates prevailing at 31
December 2015) would be payable.
Ultimately this amount was reduced to E0.4m, with the expectation at 31 December 2014 of retaining the overall cashflow
benefit identified at acquisition. The original contingent consideration estimate was based on the then anticipated ability
of the group to switch processing volumes from a third party provider to Kalixa. The software development required to
implement that change was postponed indefinitely during 2015 following an initial delay in 2014 due to issues arising with
third party contractors. This resulted in the impairment being recorded in the current year.
11. Property, plant and equipment
Fixtures,
Plant, fittings,
Land and machinery tools and
buildings and vehicles equipment Total
Cost or valuation Emillion Emillion Emillion Emillion
As at 1 January 2014 18.2 5.4 128.0 151.6
Acquired through business combinations - - 0.2 0.2
Additions 0.2 0.5 49.3 50.0
Disposals (3.3) (1.9) (32.6) (37.8)
Exchange movements 0.8 0.6 7.9 9.3
Reclassified as assets held for sale (3.2) (1.1) (5.2) (9.5)
As at 31 December 2014 12.7 3.5 147.6 163.8
Additions 0.2 0.3 22.7 23.2
Disposals (1.1) (0.4) (16.0) (17.5)
Exchange movements 0.5 0.2 7.2 7.9
As at 31 December 2015 12.3 3.6 161.5 177.4
Depreciation
As at 1 January 2014 6.1 4.5 104.2 114.8
Charge for the year 1.6 0.9 23.8 26.3
Disposals (1.7) (1.9) (31.5) (35.1)
Exchange movements 0.3 0.3 6.0 6.6
Reclassified as assets held for sale (0.9) (0.5) (3.3) (4.7)
As at 31 December 2014 5.4 3.3 99.2 107.9
Charge for the year 2.0 0.7 28.3 31.0
Disposals (0.4) (0.6) (15.9) (16.9)
Exchange movements 0.3 0.2 6.3 6.8
As at 31 December 2015 7.3 3.6 117.9 128.8
Carrying amounts
As at 1 January 2014 12.1 0.9 23.8 36.8
As at 31 December 2014 7.3 0.2 48.4 55.9
As at 31 December 2015 5.0 - 43.6 48.6
12. Commitments for capital expenditure
2015 2014
As at 31 December Emillion Emillion
Contracted but not provided for 1.1 4.0
13. Assets and liabilities held for sale
The Group has classified certain of its non-core assets as held for sale. This includes the Group's investment in the
Conspo Sportcontent Gmbh joint venture and its investment in Visa Europe Limited. This investment was previously carried as
an available for sale asset and has been reclassified to assets held for sale following the announcement in 2015 that this
asset will be acquired by Visa Inc as part of its acquisition of Visa Europe Limited. This acquisition is expected to
complete within the third quarter of 2016.
The carrying value of the Conspo investment represents the lower of cost and the current fair value. The carrying value of
the Visa Europe Limited investment, which was previously classified as available for sale, is recorded at fair value. The
assets and liabilities held for sale are disclosed in the table below.
Assets Liabilities
held-for-sale held-for-sale Total
Emillion Emillion Emillion
As at 1 January 2014 - - -
Reclassified as held-for-sale 32.8 (7.4) 25.4
Impairment of assets held-for sale (5.3) - (5.3)
As at a 31 December 2014 27.5 (7.4) 20.1
Disposals (23.6) 7.4 (16.2)
Reclassified as held-for-sale 10.6 - 10.6
As at 31 December 2015 14.5 - 14.5
14. Investments
Available-
for-sale
Joint financial
Associates ventures assets Total
Emillion Emillion Emillion Emillion
As at 1 January 2014 1.9 3.6 10.6 16.1
Additions including loans advanced - 1.4 0.4 1.8
Repayment of loan - (2.0) - (2.0)
Share of profit 0.3 2.1 - 2.4
Unrealised loss transferred to equity - - (0.4) (0.4)
Impairments - (1.0) (2.2) (3.2)
Transfer to assets held-for-sale (0.1) (3.9) - (4.0)
Foreign exchange - - 0.3 0.3
As at 31 December 2014 2.1 0.2 8.7 11.0
Additions including loans advanced - 0.9 0.3 1.2
Disposals - - (3.5) (3.5)
Distribution of profits (1.2) - - (1.2)
Share of profit (losses) 0.1 (0.6) - (0.5)
Unrealised gain transferred to equity - - 10.1 10.1
Adjustment to investment following dividend - - (1.4) (1.4)
Transfer to assets held for sale - - (10.6) (10.6)
Foreign exchange - 0.2 0.2 0.4
Impairments - (0.7) - (0.7)
As at 31 December 2015 1.0 (0.0) 3.8 4.8
Investment in associate
The following entity meets the definition of an associate and has been equity accounted in the consolidated financial
statements.
Proportion ofvoting rights
Country of incorporation held at 31 December
Name 2015 2014
bwin e.k. Germany 50% 50%
Aggregated amounts relating to associate are as follows:
2015 2014
Emillion Emillion
Non-current assets 0.1 0.2
Current assets 2.1 4.6
Current liabilities 0.8 2.6
Revenues 3.1 3.0
Profit 0.5 0.6
There is no unrecognised share of losses arising during the year. Any excess of the cost of acquisition over the Group's
share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised
at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the
investment.
Investment in joint ventures
The following entities met the definition of a joint venture and have been equity accounted in the consolidated financial
statements:
Proportion ofvoting rights
Country of held at 31 December
Name incorporation 2015 2014
Circulo Payment Limited United Kingdom 50% 50%
Nordeus Win (Gibraltar) Limited Gibraltar - 50%
The group's investment in Nordeus Win (Gibraltar) Limited was liquidated in the year. Aggregated amounts relating to joint
ventures are as follows:
2015 2014
Emillion Emillion
Non-current assets 1.4 2.0
Current assets 0.3 16.4
Total liabilities 0.7 10.4
Revenues - 37.6
(Loss) profit (1.2) 4.4
There is no unrecognised share of losses arising during the year.
Circulo Payment Limited was a venture launched with Millicom International Cellular S.A., to develop a payment service
provider to operate in Africa and Latin America. A decision has been taken with the joint venture partner to wind up this
entity and, accordingly, the investment has been impaired in 2015.
Available-for-sale investments
The value of overall investments fell by E4.9m (2014: E1.8m), principally as a result of the sale of the Group's investment
in Gaming Realms through the NewGame Capital LLP fund. Other movements include a dividend of E2.3m from Axon which resulted
in an adjustment of E1.4m to the carrying value of the fund.
The carrying value of the investment in Visa Europe Limited which was previously not capable of reliable measurement and
carried at cost was revalued during the period to E10.6m. As a result of the proposed acquisition of Visa Europe Limited by
Visa Inc this asset was subsequently transferred to assets held for sale (see note 13).
15. Trade and other receivables
Group Company
As at As at As at As at
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Emillion Emillion Emillion Emillion
Payment service providers 32.4 32.4 - -
Less: chargeback provision (1.5) (1.2) - -
Payment service providers - net 30.9 31.2 - -
Prepayments 15.0 17.2 0.2 0.3
Contingent consideration 6.0 - - -
Derivative financial assets 1.2 1.9 - -
Other receivables 47.2 37.2 0.1 -
Due from Group companies - - 2.1 1.3
Current assets 100.3 87.5 2.4 1.6
Contingent consideration 6.4 10.6 - -
Non-current assets 6.4 10.6 - -
The Directors consider that the carrying amount of trade and other receivables approximates to their fair values, which is
based on estimates of amounts recoverable. The recoverable amount is determined by calculating the present value of
expected future cashflows.
Deferred and contingent consideration relates to amounts receivable for the sale of Ongame and domain names. The
non-discounted book values for these amounts are E6.5 m (2014: Enil) due within one year and E7.0 m (2014: E12.4m) due
later than one year but not later than five years.
Provisions are expected to be settled within the next year and relate to chargebacks which are recognised at the Directors'
best estimate of the provision based on past experience of such expenses applied to the level of activity. Movements on the
provision are as follows:
Emillion
As at 1 January 2014 1.3
Charged to consolidated statement of comprehensive income 6.4
Credited to consolidated statement of comprehensive income (6.5)
As at 31 December 2014 1.2
Charged to consolidated statement of comprehensive income 3.3
Credited to consolidated statement of comprehensive income (3.0)
As at 31 December 2015 1.5
16. Short-term investments
2015 2014
As at 31 December Emillion Emillion
Restricted cash 16.1 13.5
16.1 13.5
Restricted cash represents cash held as guarantees for regulated markets' licences and significant marketing contracts
together with client funds held for payment service provider transactions. In addition, at 31 December 2015 there are other
guarantees in place that are not secured with cash of E16.7m (2014: E26.8m).
17. Cash and cash equivalents
Group Company
2015 2014 2015 2014
As at 31 December Emillion Emillion Emillion Emillion
Total cash in hand and current accounts 150.3 164.4 0.2 0.2
Cash held within assets held for sale - (1.5) - -
Cash in hand and current accounts 150.3 162.9 0.2 0.2
18. Trade and other payables
Group Company
As at As at As at As at
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Emillion Emillion Emillion Emillion
Contingent consideration 0.8 0.2 0.5 -
Other payables 110.2 82.4 20.6 0.7
Due to Group companies - - 206.8 143.7
Current liabilities 111.0 82.6 227.9 144.4
Contingent consideration 4.4 4.5 4.3 -
Other payables - 12.9 - -
Later than one year but not later than five years 4.4 17.4 4.3 -
Non-current liabilities 4.4 17.4 4.3 -
Contingent consideration relates to amounts payable for the acquisitions of WPT and PXP. The contingent consideration
related to WPT was transferred to the Company from another Group entity during 2015 following the sale of WPT (see note 27)
as this liability was not included as part of the sale.
Other payables comprise amounts outstanding for trade purchases and other ongoing costs. The carrying amount of other
payables approximates to their fair value which is based on the net present value of expected future cashflows.
The non-discounted book values for these amounts are as follows:
Contingent consideration Other payables
As at As at As at As at
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Emillion Emillion Emillion Emillion
Within one year 1.0 0.2 110.5 83.3
Later than one year but not later than five years 5.0 5.6 - 14.1
6.0 5.8 110.5 97.4
Included within contingent consideration is E5.5m (2014: Enil) which also relates to the company. Of this E0.5m falls due
within one year whilst the remainder is due later than one year but not later than five years.
19. Client liabilities and progressive prize pools
As at As at
31 December 31 December
2015 2014
Emillion Emillion
Client liabilities 106.3 106.9
Progressive prize pools 8.6 9.2
114.9 116.1
Client liabilities and progressive prize pools represent amounts due to customers including net deposits received, undrawn
winnings, progressive jackpots and tournament prize pools and certain promotional bonuses. The carrying amount of client
liabilities and progressive prize pools approximates to their fair value which is based on the net present value of
expected future cashflows.
20. Provisions
Total
Emillion
As at 1 January 2014 -
Charged to consolidated statement of comprehensive income 11.4
Utilised during the year (3.3)
As at 31 December 2015 8.1
Onerous contracts relate to provisions made against the future costs of contracts where the future economic benefits
received by the Group are less than the costs involved with fulfilling the remaining terms and conditions of the contracts
and are recognised at the Directors' best estimate based on their knowledge of the markets of the countries involved. The
provision arose as a result of the disposal of WPT as per note 27.
The amounts due for provisions are recognised based on the above and carried at the best estimate of the provision. Due to
the short-term nature of the provisions which are expected to be settled with 12 months, no discounting has been applied.
21. Loans and borrowings
2015 2014
As at 31 December Emillion Emillion
Secured bank loan 6.8 31.8
Current liabilities 6.8 31.8
Secured bank loan 49.7 25.1
Later than one year but not later than five years 49.7 25.1
Non-current liabilities 49.7 25.1
Bank borrowings are recognised at fair value and subsequently carried at amortised cost based on their internal rates of
return. The effective interest rate applied was 4.8% (2014: 5.3%). There are no material differences between book and fair
values.
Principal terms and the debt repayment schedule of loans and borrowings before amortisation are as follows:
Year of
maturity
As at 31 December 2015 Amount Nominal rate of facility Security
The Royal Bank of Scotland plc £30 millionandE16 million 3 monthsLIBOR plus3.00% 2018 Floating charge over the assets of various of the Group's subsidiary undertakings
As at 31 December 2014
The Royal Bank of Scotland plc £25 million 3 monthsLIBOR plus3.25% 2015 Floating charge over the assets of Cashcade Limited and its subsidiary undertakings
The Royal Bank of Scotland plc £20 million 1 month'sLIBOR plus3.00% 2016 Floating charge over the assets of various of the Group's subsidiary undertakings
The maturity analysis of loans and borrowings, including interest and fees, is as follows:
2015 2014
As at 31 December Emillion Emillion
Within one year 8.7 34.3
Later than one year and not later than five years 52.6 26.6
61.3 60.9
The £30 million and E16 million outstanding to The Royal Bank of Scotland plc as at 31 December 2015 were drawdowns of part
of a £75 million multi-currency facility. On completion of the acquisition of the Group in 2016 (see note 33), these
facilities along with any accrued interest were repaid in their entirety and cancelled.
22. Deferred tax
Emillion
As at 1 January 2014 36.9
Acquired through business combinations 3.5
Exchange differences 0.2
Credited to consolidated statement of comprehensive income (5.1)
Credited on impairment of intangible fixed assets (8.3)
As at 31 December 2014 27.2
Exchange differences 0.4
Credited to consolidated statement of comprehensive income (5.6)
Charged to other comprehensive income 2.1
As at 31 December 2015 24.1
Deferred tax of E24.1m (2014: E27.2m) consists of E26.1m (2014: E27.2m) deferred tax liabilities and E2.0m (2014: Enil) of
deferred tax assets. Deferred tax liabilities relate primarily to temporary differences arising from fair value adjustments
of acquired intangibles and fair value uplift of investments. The deferred tax asset relates primarily to temporary timing
differences in respect of taxes in certain jurisdictions.
23. Operating lease commitments
The total future minimum lease payments due under non-cancellable operating lease payments are analysed below:
2015 2014
As at 31 December Emillion Emillion
Within one year 6.7 8.6
Later than one year but not later than five years 17.1 24.5
More than five years 7.8 13.1
31.6 46.2
All operating lease commitments relate to land and buildings. Rental costs under operating leases are charged to the
consolidated statement of comprehensive income in equal annual amounts over the period of the leases.
24. Contingent liabilities
From time to time the Group is subject to legal claims and actions against it. The Group takes legal advice as to the
likelihood of success of such claims and actions.
As part of the Board's ongoing regulatory compliance process, the Board continues to monitor legal and regulatory
developments and their potential impact on the business and takes appropriate advice in respect of these developments.
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 zero rated for export to Gibraltar where legislation provides that the services are received or
used and enjoyed in the country where the service provider 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.
Litigation
As a consequence of the as yet non-harmonised regulatory environment for online gaming in Europe, a number of civil and
administrative proceedings are pending against the Group and/or its board members in several countries (including but not
limited to Germany, Portugal and Spain) aimed at preventing bwin.party from offering its services in these countries.
On 16 October 2014, the Portuguese Supreme Court confirmed a ruling of the Oporto Court of First Instance of September 2011
against Liga Portuguesa de Futebol Profissional ('Liga'), bwin.party digital entertainment plc and bwin.party services
(Gibraltar) Ltd (together 'bwin.party'). In this initial ruling the first instance Court had (i) declared the (meanwhile
already terminated) sponsorship agreement between bwin.party and the Liga as illegal, (ii) declared bwin.party's gaming
offer and advertising measures as illegal in Portugal, (iii) prohibited bwin.party to exploit mutual bets and lottery games
in Portugal and to carry out any form of publicity or promotion of the website bwin.com, (iv) imposed on the defendants
pecuniary sanctions of (A) E50,000 for each day the infraction lasts, payable to the Portuguese Casino Association ('APC')
and (B) E50,000 for each infraction, payable to Santa Casa da Misericórdia de Lisboa, and (v) ordered the publishing of the
ruling and the notification of Portuguese media organisations.
Following the initial first instance ruling, the Liga and bwin.party already took measures in order to comply with the
decision. However, it cannot be ruled out that certain activities may still be considered as violation of the ruling.
In June 2012, APC initiated enforcement proceedings against the Liga and bwin.party, requesting the payment of pecuniary
sanctions in the total amount of E6.35 million for the alleged violation of the first instance court judgment during the
period between 24 September 2011 and 31 January 2012. The Liga and bwin.party remain firmly of the view that such
enforcement action is without merit. In June 2012, the Oporto enforcement court dismissed APC's enforcement claim for lack
of enforceability. APC filed an appeal against this decision, which the appellate enforcement court granted on 25 November
2014 and decided that pecuniary sanctions were enforceable at the time APC initiated the enforcement proceeding without
assessing the enforcement case on its merits. On 29 May 2015, the Supreme Court rejected the appeal submitted by the Liga
solely on formal admissibility grounds and the Liga subsequently filed a petition requesting that the case be presided over
by a chamber of three judges of the Supreme Court, which the Supreme Court rejected on 17 November 2015 confirming the
rejection of the appeal lodged by the Liga, on the same grounds as in its initial rejection. On 3 December 2015, the Liga
submitted an appeal to the Constitutional Court on grounds of unconstitutionality of the interpretation of the applicable
admissibility rules. The Supreme Court did not rule on the substantive matter of whether or not the pecuniary sanctions are
in fact due in the present case, which, despite the petition pending at the Constitutional Court on the formal question of
enforceability, will be the subject of the enforcement proceedings initiated by APC that will be continued before the
Oporto enforcement court, where the Liga and bwin.party will submit their defence arguments.
On 28 February 2014, bwin.party digital entertainment plc received a claim filed at the District Court of Limassol by
Rodolfo Odoni against Nomato Investments Limited ('Nomato') and six other defendants, including bwin.party digital
entertainment plc and BAW International Limited (now bwin.party services (Gibraltar) Limited). Among other things, Mr.
Odoni seeks damages in the amount of E6.9 million or 30% of realised profits in Nomato since 29 June 2005 and a declaration
that he holds 30% of the shares in Nomato. As the documents were not served to bwin.party digital entertainment plc and
bwin.party services (Gibraltar) Limited in accordance with EU-Regulation 1393/2007/EC on the service of documents and not
all documents had been translated into English, bwin.party refused to accept the service according to the rights granted
under the EU-Regulation. Local counsel filed a conditional appearance to prevent a default judgment and an application to
set aside service and/or strike out the action, which the court assessed in the oral hearing of 5 February 2015. The court
has not yet set a date for its decision on the formal issues.
No provision has been made for contingent liabilities relating to the above detailed claims. The Directors do not consider
that there are any other contingent liabilities requiring disclosure.
25. Share capital
Ordinary shares
Issued and
fully paid Number
E million
As at 1 January 2014 146,378 817.1
Employee share options exercised during the year 1,009 7.0
Issued for satisfaction of consideration 107 0.6
Redeemed as part of share buy-back scheme (301) (1.6)
As at 31 December 2014 147,193 823.1
Employee share options exercised during the year 14,389 8.2
As at 31 December 2015 161,582 831.3
The issued and fully paid share capital of the Group amounts to E161,582.36 and is split into 831,294,594 ordinary shares.
The share capital in UK Sterling is £124,694.19 and translates at an average exchange rate of 1.295826 Euros to £1
Sterling.
Authorised share capital and significant terms and conditions
The Company's authorised share capital is £225,000 divided into 1,500 million ordinary shares of 0.015 pence each. All
issued shares are fully paid. The holders of ordinary shares are entitled to receive dividends when declared and are
entitled to one vote per share at meetings of the Company. The Trustee of the Employee Trust has waived all voting and
dividend rights in respect of shares held by the Employee Trust.
Own shares
Own shares
reserve Number
Emillion million
As at 1 January 2014 (5.2) 2.8
Purchase of own shares for the Employee Trust (0.2) 0.1
Employee share options exercised during the year 3.3 (2.0)
As at 31 December 2014 (2.1) 0.9
Purchase of own shares for the Employee Trust (0.2) 0.2
Employee share options exercised during the year 0.0 (0.1)
As at 31 December 2015 (2.3) 1.0
As at 31 December 2015 1,041,614 (2014: 891,631) ordinary shares were held as treasury shares by the Employee Trust.
Additionally 431,124 (2014: 494,453) were held in the Employee Trust on behalf of employees of the Group. In 2015 the
Company donated £0.2m (2014: £0.2m) to the Employee Trust, which the Employee Trust then used to purchase 205,340 (2014:
293,462) ordinary shares in the market.
26. Related parties
Group
Transactions between Group companies have been eliminated on consolidation and are not disclosed in this note.
Directors and key management
Key management are those individuals who the Directors believe have significant authority and responsibility for planning,
directing and controlling the activities of the Group. The aggregate short-term and long-term benefits, as well as
share-based payments of the Directors and key management of the Group are set out below:
Group Company
2015 2014 2015 2014
Year ended 31 December Emillion Emillion Emillion Emillion
Short-term benefits 8.8 6.4 2.9 2.7
Share-based payments 16.7 3.6 7.6 1.5
Termination benefits 3.6 0.6 3.3 -
29.1 10.6 13.8 4.2
An interest bearing loan to a former Board member of E3.1m was repaid during the period. The Group held an investment in a
fund of E0.4m (2014: E2.0m) for whom this former Board member was a partner. The Group received a dividend from this fund
of E2.3m (2014: Enil) during the year.
One director had a loan with the Group of E3.1m with interest accrued as at 31 December 2015. This loan was repaid in full
in 2016 following the acquisition of the Group as per note 33.
One director has previously made a deposit into a customer account with InterTrader with a balance as at 31 December 2015
of Enil (2014: E2.1m). The director is a director and shareholder of a company that provides investment advisory services
to a fund for which InterTrader Limited is the broker. InterTrader earned commissions of E26,322 (2014: Enil) in the period
and the fund had a balance of E4.4m deposited with InterTrader as at 31 December 2015.
In 2014 and part of 2015 a furnished property was leased to two separate members of key management at an annual lease
rental of Enil for which the open market value of rent of the property was E42,100. This property was sold in 2015.
Short-term interest free loans totalling E135,800 had been advanced to members of key management personnel during the year.
These amounts have now been repaid and the balance of loans outstanding at 31 December 2015 was Enil.
Associates and joint ventures
The Group purchased certain customer services of E2.8m (2014: E3.1m) from an associate, with amounts owed at 31 December
2015 of E0.3m (2014: E0.3m).
The Group purchased certain rights to broadcast licensed media of E3.5m (2014: E3.5m) from Conspo Sportcontent Gmbh a joint
venture, with amounts prepaid at 31 December 2015 of Enil (2014: E0.3m). Certain expenses were paid on behalf of this
associate, resulting in a receivable balance of E0.2m. In addition a dividend was received in the year of E3.0m (2014:
Enil).
Company
Where the cash obligations of bwin.party digital entertainment plc (the 'Company') for operating expenditure are discharged
by its operating subsidiaries, amounts paid by the subsidiaries are accounted for through an adjustment to the related
intercompany balances. During the year, costs of E1.5m were incurred by subsidiaries on behalf of the Company (2014:
E1.3m). At year end, the Company did not have any other borrowing facilities (2014: Enil). In 2015 the Company received a
dividend of E1.4m from one of its subsidiaries (2014: Enil) and also charged interest of E0.7m through providing a loan of
E30.5m to that subsidiary. The loan was fully repaid in the year.
Details of amounts owed to and from subsidiaries are included in notes 15 and 18.
27. Disposals during the period
On 24 June 2015, the Group sold the World Poker Tour ('WPT') business to Ourgame International Holdings ('Ourgame') for
consideration of E32.7m paid in cash during the year. This business had been carried within the balance sheet as
held-for-sale.
The value of the underlying identifiable assets and liabilities sold, the sale consideration and the profit on disposal
were as follows:
Emillion
Non-current assets
Intangible assets 4.4
Property, Plant and equipment 1.7
Current assets
Trade and other receivables 20.4
Cash and cash equivalents 1.3
Current Liabilities
Trade and other payables (3.4)
Client liabilities and prize pools (0.2)
Reserves
Currency reserve reclassified to profit or loss (8.2)
Net movement in assets 16.0
Net cash received 32.7
Onerous contract arising on disposal (11.4)
Fair value receivable 21.3
Profit on disposal 5.3
The group has disposed of certain other non-core assets during the period from those assets held-for-sale realising a loss
of E0.3m.
28. Investment in subsidiaries
Emillion
As at 1 January 2014 1,205.5
Options issued to employees of subsidiary undertakings 8.0
Liabilities of subsidiary undertakings satisfied by equity instruments 1.1
Reversal of impairments 31.3
As at 31 December 2014 1,245.9
Options issued to employees of subsidiary undertakings 15.2
Reversal of impairments 200.6
As at 31 December 2015 1,461.7
Investments in subsidiaries carried by the Company are carried at cost less any impairment in value. Investments increased
in value by E200.6m in the year (2014: revaluation gain of E31.3m). The carrying value is measured as the difference
between the market capitalisation of the Company and the carrying value of the Company's investments in subsidiaries as at
the respective year ends.
During the year ended 31 December 2015 the Company issued share options with a fair value of E15.2m (2014: E8.0m) in
respect of employees of subsidiary undertakings.
The Company is the ultimate holding company of the Group. The following table shows the Company's subsidiary undertakings
at 31 December 2015. Each of these companies is included within the consolidated accounts of the Group, either by virtue of
being wholly-owned by a member of the Group (other than bwin.party entertainment (NJ) LLC which is 90% owned) with fully
paid issued share capital or where the Group exerts sufficient controls over the operations of that entity for it to
warrant being consolidated within the Group accounts.
Name of Subsidiary Undertaking Country of Incorporation Principal Business
Alancia Limited Cyprus Intermediate holding company
Amber Limited Gibraltar Dormant
Bellingrath Enterprises Limited Cyprus Intermediate holding company
BES SAS France Online gaming
bwin Argentina SA Argentina Dormant
bwin European Markets Holding Spa Italy Intermediate holding company
Bwin Interactive Marketing España SL Spain Marketing support services
bwin Italia Srl Italy Online gaming
bwin.party (USA) Inc USA B2B services
bwin.party corporate services Limited British Virgin Islands Company Secretarial Services
bwin.party entertainment (NJ) LLC USA Online gaming
bwin.party entertainment Limited Gibraltar Intermediate holding company
bwin.party Games AB Sweden Dormant
bwin.party holdings Limited Gibraltar Intermediate holding company
bwin.party Holdings Malta Limited Malta Dormant
bwin.party International Malta Limited Malta Dormant
bwin.party Limited Gibraltar IT, customer support and
marketing services
bwin.party management (Gibraltar) Gibraltar Management and IT services
Limited
bwin.party marketing (Gibraltar) Limited Gibraltar Marketing services
bwin.party marketing (Israel) Limited Israel Marketing support services
bwin.party marketing (UK) Limited United Kingdom Marketing support services
bwin.party partners Limited Gibraltar Dormant
bwin.party services (Austria) GmbH Austria IT, customer support and
marketing support services
bwin.party services (Bulgaria) EOOD Bulgaria IT and customer support services
bwin.party services (Gibraltar) Limited Gibraltar Dormant
bwin.party services (Malta) Limited Malta B2B services
bwin.party services (NJ) Inc USA B2B services
bwin.party services (UK) Limited United Kingdom Dormant
Cashcade Limited United Kingdom Marketing services
Dominion Entertainment Limited Malta Online gaming
Dominion Services GmbH Austria Marketing support services
DSG Deutsche Sportwett GmbH Germany Dormant
ElectraGames Limited Gibraltar Dormant
ElectraWorks (Alderney) Limited Alderney IT services
ElectraWorks (España) PLC Malta Online gaming
ElectraWorks (France) Limited Malta Online gaming
ElectraWorks (Kiel) Limited Malta Online gaming
ElectraWorks Limited Gibraltar Online gaming
EZE International Limited Gibraltar Dormant
Herotech Limited United Kingdom Marketing services
iGlobalMedia Entertainment Limited Gibraltar Dormant
IGM Domain Name Services Limited Gibraltar Domain management services
Independent Technology Ventures Limited British Virgin Islands Online gaming and
IT services
Infield Servicios De Consultoria Portugal Dormant
E Marketing Unipessoal LDA
Interskill Games Limited Gibraltar Dormant
InterTrader Limited Gibraltar Financial services
ISG (Gibraltar) Limited Gibraltar Domain
management services
ITV Holdings Limited British Virgin Islands Intermediate holding company
IVY BPO Services Private Limited India Customer support services
IVY Comptech Private Limited India IT and customer support services
IVY Foundation India Charity
IVY Software Development India Software Development Services
Services Private Limited
Kaiane Services Limited Malta B2B services
Kalixa Accept Limited United Kingdom Transaction services
Kalixa Group Limited Gibraltar Intermediate holding company
Kalixa Pay Limited United Kingdom Transaction Services
Kalixa Payments GmbH Austria Dormant
Kalixa Payments Group Limited United Kingdom Transaction Services
Kalixa Services GmbH Austria Intermediate holding company
Kalixa USA Inc. USA Transaction services
Leodata Limited Gibraltar Dormant
Party InterVentures Limited Gibraltar Dormant
Party Ventures Limited Gibraltar Intermediate holding company
PartyGaming Finance Limited Bermuda Treasury Services
PartyGaming IA Limited Bermuda Intellectual Property holding
Paytech International Limited Gibraltar Dormant
PB (Italia) S.r.l. Italy Online gaming
PGB Limited Gibraltar Intermediate holding company
PKR Services Limited Gibraltar Dormant
PXP Solutions Inc. USA Gateway services provider
PXP Solutions Limited United Kingdom Intermediate holding company
PXP Solutions PTY Limited Australia Gateway services provider
Servebase Limited United Kingdom Gateway services provider
Websports Entertainment Marketing Austria Marketing support services
Services GmbH
Westman Holdings Limited British Virgin Islands Intermediate holding company
WIN (Gibraltar) Limited Gibraltar Dormant
WIN Interactive (Israel) Limited Israel Dormant
WIN Interactive LLC Ukraine Software Development Services
Winner Summit Limited BVI Dormant
WorldNet DNS Management Limited Gibraltar Dormant
29. Financial instruments and risk management
The Group is exposed through its operations to the following financial risks:
• Liquidity risk
• Capital Risk
• Credit Risk
• Market Risk
• Interest Rate Risk
• Currency Risk
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This
note describes the Group's objectives, policies and processes for managing these risks and the methods used to measure
them. Further quantitative information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and
processes for managing these risks or the methods used to measure them from previous periods, unless otherwise stated in
this note.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
> investments;
> short-term investments;
> trade and other receivables;
> cash and cash equivalents;
> loans and borrowings;
> trade and other payables;
> contingent consideration;
> client liabilities and progressive prize pools; and
> foreign exchange forward contracts.
The Group operates a sports betting business and always has open bets representing bets placed by customers for which
events have not yet happened. As at 31 December 2015 and at the prior year end the fair market value of open bets was
negligible.
Financial instruments by category
Included within overall financial instruments in the tables below are financial assets and liabilities which have been
classified as held for sale within note 13.
Financial assets
Loans &Receivables Available for sale Fair value through Profit & Loss
Financial instrument
2015 2014 2015 2014 2015 2014
Year ended 31 December Emillion Emillion Emillion Emillion Emillion Emillion
Investments - - 14.4 8.7 - -
Short term investments 16.1 13.5 - - - -
Cash & cash equivalents 150.3 164.4 - - - -
Trade & other receivables 78.1 68.4 - - - -
Derivative financial assets - - - - 1.2 1.9
Contingent consideration
- current - - - - 6.0 -
Contingent consideration
- non-current - - - - 6.4 10.6
244.5 246.3 14.4 8.7 13.6 12.5
Financial liabilities
At fair valuethrough profit & loss Amortised cost
Financial instrument
2015 2014 2015 2014
Year ended 31 December Emillion Emillion Emillion Emillion
Trade & other payables - current - 9.2 95.0 82.4
Trade & other payables - non-current - - - 12.9
Client liabilities and progressive prize pools - - 114.9 116.1
Loans and borrowings - current - - 6.8 31.8
Loans and borrowings - non-current - - 49.7 25.1
Contingent consideration - current 0.3 0.2 0.5 -
Contingent consideration - non-current 0.1 0.2 4.3 4.3
0.4 9.6 271.2 272.6
Financial instruments not measured at fair value within the financial statements
Financial instruments not measured at fair value includes cash and cash equivalents, short term investments, trade and
other receivables, trade and other payables, client liabilities and progressive prize pools, loans and borrowings and
contingent consideration
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