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Annual Report & Accounts 2005 - Notes to the Financial Statements
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1 Segment reporting Segment information is presented in respect of the Groupís business and geographical segments. Business segments Based on risks and returns the management considers that the primary reporting format is by business segment. The directors consider that there currently is only one business segment being the casino operation of games of chance. Therefore the disclosures for the primary segment have already been given in these financial statements. A second business segment of skill based games was launched in the last quarter of the year. It only achieved revenue of e327,000 in the year which has been included in games of chance. It is expected to be sufficiently material to be disclosed separately in the full year accounts for 2006. Geographical segments Within the year the core business activity has been concentrated in the German language countries. Development specifically tailored for other European language countries is ongoing. Owing to current legislation in the US the company continues to block access to its games to potential players located there. Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one year. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the location of the assets themselves. Geographical segments Germany Austria Other Countries Consolidated In thousands of euro 2005 2004 2005 2004 2005 2004 2005 2004 Revenue from games of chance 30,293 496 7,742 134 2,408 40 40,443 670 Segment assets ^ ^ ^ ^ 112,713 107,501 112,713 107,501 Capital expenditure ^ ^ ^ ^ 142 105,516 142 105,516 2 Acquisitions of subsidiaries On 2 December 2004, the Company acquired 100 per cent of the ordinary share capital of Metioche Holding Limited, a newly incorporated company registered in Cyprus for CYP 1,000 with a premium price of the balance of e105,000,000 less the 1 CPY par value per share. On 6 December 2004 Metioche Holding Limited acquired 100 per cent of the ordinary share capital of Gaming VC (Jersey) Limited, a newly incorporated company registered in Jersey for Ľ2. On 7 December 2004 Metioche Holding Limited acquired 100 per cent of the ordinary share capital of GVC Corporation BV, a newly incorporated company registered in Netherland Antilles for e1. On 24 December 2004 GVC Corporation BV acquired 100 per cent of the ordinary share capital of GVC Corporation II BV, a newly incorporated company registered in Netherland Antilles for e1. On 17 December 2004 the Board of Metioche Holding Limited resolved to change its registered name to GVC (Cyprus) Limited. The acquisition of subsidiaries had no effect on the consolidated Groupís assets and liabilities as they were all new off the shelf companies with no assets or liabilities. The associated legal costs for acquisition were included in the IPO fees related to admission to AIM in December 2004.