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Annual Report & Accounts 2012 - REPORT OF THE GROUP FINANCE DIRECTOR
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GVC HOLDINGS PLC BUSINESS REVIEW 2012 2011 €million €million B2B 72% 46% CasinoClub 58% 53% Betboo 35% 26% 1.5 Other operating costs These costs, which are analysed in detail in Note 4 to the accounts are before "non-cash" items such as depreciation, amortisation and share option charges. These costs increased to €19.6 million from €12.2 million in 2011. The principal components of this €7.4 million increase were as follows: €million Increased staff costs 4.8 - reflecting an increase in personnel in the B2B division - dividend related bonuses to the executive management team - other increased staffing costs - overall average staff numbers grew by 30% in the year Increased professional fees 0.2 Increased technology costs to support a more complicated business 0.8 Increased travel and other costs, reflecting visits to additional offices and the cost of those offices themselves 0.6 Increased third-party support providers cost for Betboo 0.8 Foreign exchange differences arising on the translation and transaction of non-Euro denominated amounts 0.2 7.4 1.6 Exceptional items Following the settlement of the legal disputes with Boss Media, there was a €0.2 million credit to the income statement, being the release of accruals relating to the disputes. 1.7 Depreciation and Amortisation This amounted to €2.5 million for the year (2011: €2.0 million), on additions of €1.1 million (2011: €1.6 million, excluding additional goodwill arising on the change in the Betboo earn-out arrangements). 1.8 Share option charges These fell to €79k (2011: €440k) chiefly due to the lapse of 1.1 million of options following the disposal of Betaland. 1.9 Financial income/expense This is an accounting, non-cash expense relating to the accounting treatment of the Betboo earn-out. The charge fell marginally to €2.2 million from €2.4 million in 2011. 1.10 Taxation The charge to taxation rose to €0.5 million from €0.2 million largely due to retrospective taxes imposed on the Group's operation in Tel-Aviv. 1.11 Discontinued activities Betaland was discontinued in the year. The business made a negligible contribution in the months it was trading, and closure costs, including depreciation and net of tax allowances amounted to a total loss of €1.1 million (2011: profit, €0.5 million). 11