26.8 Sportingbet PLC - Spanish Subsidiaries
Under a UK court sanctioned Scheme of Arrangement Sportingbet PLC was divided between the assets to be acquired by
William Hill PLC (mainly Australia and certain freehold property in Guernsey) and other assets to be acquired by the Group.
However, the subsidiary companies operating the business in Spain, which are regulated, were not immediately included
in the acquisition. The arrangement included a provision for the temporary running of this business by the Group during a
transitional period post acquisition. This consisted of a call option for William Hill to purchase the business six months post
In the absence of an any scope exclusion within IAS 27 for subsidiaries acquired when control is intended to be temporary,
the Directors have considered whether, at the date of acquisition, GVC Holdings PLC retained control over the Spanish
business. IAS 27 presumes that where the Parent owns more than half of the voting power of an entity then control is
presumed to exist. However, it is possible to demonstrate, in exceptional circumstances, that such ownership does not
constitute control of the business. Control is defined in IAS 27 as "the power to govern the financial and operating policies
of an entity so as to obtain benefits from its activities".
Taking into account the Transfer Deed dated 12 March 2013, the Co-Existence Agreement dated 19 March 2013, and the
Side Deed dated 5 September 2013; the Directors are satisfied that the running of the Spanish business by GVC Holdings
PLC was envisaged as a temporary transitional arrangement to allow an orderly migration of the Spanish business, and did
not constitute the power of governance. As part of the transition a Steering committee, comprised of members equally from
GVC Holdings PLC and William Hill coordinated the migration and supervision of the transitional running of the Spanish
business. In addition, certain obligations falling on GVC Holdings plc were drafted limiting the actions that GVC Holdings
PLC could take in respect of the Spanish business during the transitional period.
Therefore as the Group did not control the subsidiaries operating the business in Spain during the year, results have not
been included within the 2013 consolidated financial statements.
27. GOING CONCERN
The Group's business activities, together with the factors likely to affect its future performance and position are set out in
the Chairman's, Chief Executive's and Group Finance Director's statements. Note 22 to the financial statements sets out
the Group's financial risk management policies, and its exposure to credit risk and liquidity risk.
The Directors have assessed the financial risks facing the business, and compared this risk assessment to the net current
assets position and dividend policy. The Directors have also reviewed relationships with key suppliers and software providers
and are satisfied that the appropriate contracts and contingency plans are in place. The Directors have prepared income
statement and cash flow forecasts to assess whether the Group has adequate resources for the foreseeable future.
The Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable
future. For this reason, they continue to adopt the going concern basis in preparing the consolidated financial statements.
28. SUBSEQUENT EVENTS
There have been no subsequent events between 31 December 2013 and the date of the signing of these accounts that
GVC HOLDINGS PLC ANNUAL REPORT 2013 61
NOTES TO THE FINANCIAL STATEMENTS