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Annual Report & Accounts 2015 - REPORT OF THE GROUP FINANCE DIRECTOR
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sUMMARY oF MoVeMents in the stAteMent oF FinAnciAL Position a bridge between the 2014 and 2015 financial position is shown below in table 9: Table 9: Statement of financial position bridge total €000's At 1 January 2015 149,458 profit before tax 25,506 tax charge (847) 24,659 share based payment charges on equity settled options 509 share options surrendered (12,183) Dividends paid (34,319) At 31 December 2015 128,124 no share options were exercised during the year and no shares were issued. cURRencY eXPosURes During the year, the charge to operating Costs within the income statement from realised and unrealised foreign exchange was €1.0 million. in addition the william hill loan is denominated in sterling (£4.6 million at 1 January 2015) and incurred an unrealised loss of €0.5 million included within financial expenses. also included within financial expenses are the foreign exchange differences arising on the finance leases. many non-euro currencies are handled by the Group's payment processing intermediaries up-front. additionally, the net Current assets of the Group are revalued each month at month-end exchange rates and this also results in exchange gains and losses. the principal revaluations are for customer liabilities, although these are now largely currency matched to produce a natural hedge. in anticipation of the bwin.party acquisition, the Group entered into a foreign currency option in order to enable the euro-denominated Cerberus loan to be converted into GBp for the purchase of shares and the settlement of associated costs incurred in GBp. this instrument has been stated at fair value at 31 December 2015. Key foreign exchange rates are shown in the table below: Table 10: Currency rates against the Euro 1 Jan 30 Jun 31 Dec 30 Jun 31 Dec Average Average 2014 2014 2014 2015 2015 2014 2015 uK (GBp) 0.831 0.802 0.779 0.711 0.734 0.803 0.724 Brazil (BrL) 3.254 3.000 3.224 3.470 4.312 3.110 3.710 turkey (trY) 2.959 2.897 2.829 2.995 3.177 2.894 3.031 israel (iLs) 4.775 4.695 4.720 4.207 4.248 4.739 4.308 as the Group's operations result in a currency mis-match between income and costs (long euro, short GBp), the Group is retaining a significant GBp bank balance which will of course be subject to foreign exchange revaluation at each balance sheet date. ceRBeRUs LoAn FAciLitY the senior loan facility from Cerberus Business finance LLC has a number of components other than simple interest and therefore there are significant differences between the cash profile of the payments and the accounting recognition. firstly the deal and associated fees need to be allocated to each portion of the drawdown; secondly, they need to be expensed over the two year period of the loan facility. the simple interest on the loan is 11.5% above a 1% euriBor floor. this floor has been identified as an "embedded derivative", which is not material at 31 December 2015 in respect of the initial draw-down and will be evaluated again when the second tranche is drawn down in 2016. the tables below show each of the fee components, how they are allocated and in which year the charges would arise. 20 RePoRt oF the GRoUP FinAnce DiRectoR continued GVC HOLDINGS PLC ANNUAL REPORT 2015