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Finance Director's Statement
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11 The Group’s cash is held in a variety of leading financial institutions. At the balance sheet date, the principal positions were as follows: c000’s c000’s 2008 2007 Barclays 17,185 14,090 Bank of Valletta (Malta) 1,000 1,256 Other 649 513 Total 18,834 15,859 The currency components of the cash balances were, in Euro equivalents: c000’s c000’s 2008 2007 Euros 18,651 15,773 US dollars 22 63 GB Pounds 147 9 Other 14 14 18,834 15,859 Bank of Valletta has a Fitch credit rating of A- and a Moody’s Investor Service rating of A3. Barclays has a Fitch credit rating of AA- and a Moody’s Investor Service rating of Aa3. The Group is seeking to diversify its banking deposits. Customer balances Customers depositing funds for our betaland.com and betpro.it websites do so directly with GVC. The funds are held in dedicated bank and processor accounts and, in the case of betaland.com, are reported monthly to the Maltese regulator, the LGA, to comply with their requirements regarding the holding of segregated funds to cover such balances. There is no similar requirement from the Italian regulator, but the same policy is applied internally. At year-end the balances were c997k (2007: c547k). Customers depositing funds for betting on our other sites, principally www.casinoclub.com and www.pokerkings.com, do so via Webdollar, an affiliate of Boss Media AB. Webdollar retain at all times sufficient funds to cover these balances, clearing down to GVC only the funds lost by players. Neither these customer balances, nor the associated funds held by Webdollar, are shown on the balance sheet of GVC either within receivables or trade payables. Reserves and dividends The Group paid an interim dividend of c0.20 per share on 31 October 2008, and, subject to shareholder approval, the final dividend, a further c0.20 per share will be paid on 29 May 2009 to all shareholders on the register on 1 May 2009. The dividend will be paid in GBP, based upon the Euro/GBP spot rate offered by Barclays Bank plc on Tuesday 8 May 2009. Dividends are paid out of the reserves of Gaming VC Holdings S.A, (“GVC Lux”) as a stand-alone corporate entity, and not on a consolidated basis. The calculation of reserves for GVC Lux. is performed under Luxembourg GAAP, not IFRS, as Luxembourg, whilst being in the EU, has not adopted IFRS. As GVC Lux is not a trading company, its reserves are dependent on dividends received from elsewhere in the Group. Additionally, under Luxembourg corporate law, there is a legal reserve. Each year, 5% of the profit after tax is transferrable to the legal reserve, until an amount of c3,113,576 (or 10% of the issued share capital if greater) is reached.