a long-term growth rate of 3% has been applied to reflect the likely competitive pressures from other large online gaming
companies. a discount rate range of 20%-25% was used across the different geographical areas, and a sensitivity analysis
carried out including decreasing the growth rate to 1% and increasing the discount to 30%-45%. it was concluded that the carrying
value of the goodwill and trademarks was not impaired.
the following units have significant carrying amounts of goodwill:
Betboo 8,333 8,333
CasinoClub 40,339 40,339
sportingbet 84,221 84,221
total Goodwill 132,893 132,893
9. aVailaBle for sale financial asset - Betit holdings limited
Where an entity holds, directly or indirectly through subsidiaries, less than 20% 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.
at 1 January 3,801 -
additions - 5,394
impairment (1,216) (1,593)
at 31 december 2,585 3,801
on 14 may 2014, the Group acquired a 15% stake in Betit holdings limited ('Bhl') from Betit securities limited ('Bsl'). the
consideration was for €3.5 million, which was attributed to both the available for sale asset (€5.2 million) and the option liability
(€1.7 million) taken on at acquisition. the asset held for sale consideration, together with professional fees incurred at the time,
amounted to a total upfront cost of €5.4 million which was impaired at 31 december 2014 to €3.8 million.
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 available for sale asset is required to be re-measured at fair value at each reporting date. Changes in the fair value will be
recognised in other comprehensive income, except for impairment losses which are recognised through profit or loss as a
deduction from clean eBitda. the Group engaged a third party valuations specialist to value the asset.
in valuing the underlying business of Bhl, a discounted cash flow model was used, applying a long-term growth rate of 2%
(2014: 2%) to the Group's forecasts and a discount rate of 18% (2014: 18%) (based on comparison to industry peers and
observable inputs). Based on this model, the value as at 31 december 2015 of the asset available for sale was €2.6 million,
leading to an impairment of €1.2 million.
10. deriVatiVe financial instrUments: options
on 24 march 2015, GVC contracted with Winunited limited for the day-to-day back office operations of the Winunited business,
licensed in malta. Under the terms of the agreement, GVC obtained a call option to purchase the Winunited assets comprising
goodwill, customers, licenses, brands and websites. the exercise period for the option is in the three months prior to the five
year anniversary of the 24 march 2015. No consideration was paid for the call option.
the Betit option was acquired in the prior year as part of the asset purchase set out in note 9.
GVC HOLDINGS PLC ANNUAL REPORT 2015 69
notes to the consolidated financial statements