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3. INVESTMENTS continued 2014 2013 €000's €000's Available for Sale Financial Asset At 1 January - - Additions 3,801 - At 31 December 3,801 - Total investments 31 December 152,364 148,563 On 14 May 2014, the Company acquired a 15% stake in Betit Holdings Limited ('BHL') from Betit Securities Limited ('BSL'). The consideration was for €3.5 million, which together with professional fees incurred at the time amounted to a total upfront cost of €3.6 million augmented by the net impact of the accounting of the option embedded in the contract - see below for explanation. Where an entity holds, directly or indirectly through subsidiaries, less than 20 per cent of the voting power of an investee, it is presumed that the entity does not have significant influence and therefore an investment does not qualify as an associate unless such influence can be clearly demonstrated. Although the Group has a Director on the Board of BHL and has influence through its shareholding over the payment of dividends the Director does not participate in policy making decisions, and the entity is unlikely to be in a dividend paying position over the lifetime of the investment. The Group does not believe there is evidence to rebut the presumption it does not have significant influence over BHL and therefore the investment is not considered to be an associate and has been accounted for as an available for sale asset. The Company has a call option to acquire the balance of the outstanding shares. The call option can be exercised no earlier than 1 July 2017 and no later than 30 September 2017, and would be subject to further MGA clearance and the AIM Rules. The minimum call option price is €70 million, and the actual price would be determined by the mix of revenues between regulated and non-regulated markets and certain multiples attaching thereto which at our current multiple levels would lead to the transaction being accretive for shareholders. If the Company decides not to exercise its call option BSL may require the Company to acquire its shares in BHL at a price determined by the mix of revenues between regulated and non-regulated markets and certain multiples thereof (but absent any floor on the price). Completion of this purchase would be subject to certain conditions including the Company's ability to raise the necessary financing. Should the Company not raise the required financing, BSL may acquire the Company's shares in BHL for nominal consideration. The above options are required to be carried at fair value through profit or loss in accordance with FRS 26. The Company engaged a third party valuations specialist to value the options using a Monte Carlo valuation model based on the enterprise value for BHL and modeling of the anticipated exercise price. In valuing the underlying business of BHL, a discounted cash flow model was used, applying a long-term growth rate of 2% to the Group's forecasts at acquisition and a discount rate of 18% (based on comparison to industry peers and observable inputs). Based on this model, the fair value of the put and call options at inception was estimated to be a €1.7 million liability, reflecting management's estimate of a 15% probability that the options will be effective. The options have been recognised in the balance sheet within creditors: amounts falling due after more than one year, as part of the initial investment transaction. The consideration for the investment of €3.6 million has been attributed to both the available for sale asset and the option liability taken on. This increases the value of consideration transferred in respect of the available for sale asset to €5.2 million, however, FRS 26 requires that financial assets are recognised initially at fair value plus attributable costs, therefore an impairment of €1.6 million has been recognised at inception. The carrying value of the asset at inception is therefore €3.8 million, and there has been no significant change in the fair value of the asset or the options as of the year-end. Both the available for sale asset and the options are required to be re-measured at fair value at each reporting date. Changes in the fair value of the available for sale asset will be recognised in the statement of total recognised gains and losses, except for impairment losses which are recognised through profit or loss and will be reported within financing costs. ANNUAL REPORT 2014 72 NOTES TO THE COMPANY FINANCIAL STATEMENTS continued for the year ended 31 December 2014