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Annual Report & Accounts 2013 - NOTES
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24. GROUP ENTITIES Ownership interest Significant subsidiaries Country of incorporation 2013 2012 GVC Corporation B.V.* Netherlands Antilles 100% 100% Intera N.V. Netherlands Antilles 100% 100% GVC Sports B.V. Netherlands Antilles 100% 100% Gaming VC Corporation Limited Malta 100% 100% GVC Administration Services Limited England and Wales 100% 100% Sportingbet PLC England and Wales 100% N/A Interactive Sports (C.I.) Limited Alderney 100% N/A Sportingbet Management Services Limited England and Wales 100% N/A Sportingbet (IT Services) Limited England and Wales 100% N/A Sportingbet (Product Services) Limited England and Wales 100% N/A Sporting Odds Limited England and Wales 100% N/A *also has a branch registered in Israel 25. CONTINGENT LIABILITIES The Group, through its trading websites, offers progressive jackpots on slot machines. 25.1 CasinoClub Progressive Jackpots CasinoClub offers an equivalent system in which only its own customers participate. This means that CasinoClub make no contributions to the central fund as it builds up (since they are the only operator in the scheme, this would serve no purpose) and, should a CasinoClub customer win the progressive jackpot, there is no central fund to cover the payout so the cost of this would be taken directly to the Income Statement in the period in which it would be won. Across 44 games, the total of the available jackpots at 31 December 2013 was €7.4 million (2012: 37 games and total available jackpot of €6.6 million). The single largest jackpot available amounted to €3.0 million from the slots game "Aladdin's Lamp" (2012: €2.9 million). The Group had no winners of a significant jackpot. 25.2 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 €171 million. The Directors consider this has a fair value of €nil (2012: €nil). GVC continues to provide back office and support services to EPC. Following the acquisition of Sportingbet PLC on the 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. 26. ACCOUNTING ESTIMATES AND JUDGEMENTS The Directors discuss the development, selection and disclosure of the Group's critical accounting policies and estimates and the application of these policies and estimates. In the application of the accounting policies, which are detailed in this note, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The estimates and assumptions, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. 26.1 Intangible assets For all acquisitions management has recognised separately identifiable intangible assets on the Balance Sheet. These intangible assets have been valued based on expected future cash flow projections from existing customers. The calculations of the value and estimated future economic life of the assets involve, by the nature of the assets, significant judgement. GVC HOLDINGS PLC ANNUAL REPORT 2013 59 NOTES TO THE FINANCIAL STATEMENTS