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Annual Report & Accounts 2016 - Notes to the Company Statements
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Company financ 112 ial statements continued GVC Holdings PLC Annual Report 2016 NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED for the year ended 31 December 2016 3. INVESTMENTS CONTINUED Subsidiaries The significant subsidiaries of the Company are detailed below: Subsidiary Country of incorporation Ownership interest 2016 2015 GVC Services B.V.1 Netherlands Antilles 100% 100% Intera N.V. Netherlands Antilles 100% 100% Bluebell B.V. Netherlands Antilles 100% 100% Sporting Odds Limited England and Wales 100% 100% Interactive Sports (C.I.) Limited Alderney 100% 100% Longfrie Limited Guernsey 100% 100% Martingale Malta 2 Limited Malta 100% 100% Headlong Limited Malta 100% 100% Electraworks Limited Gibraltar 100% 100% PartyGaming IA Limited Bermuda 100% 100% PartyGaming Finance Limited Bermuda 100% 100% 1. Also has a branch registered in Israel. 4. DEBTORS 2016 €m 2015 €m Amounts owed by Group undertakings 124.3 131.1 Other debtors 2.2 3.3 Prepayments and accrued income 1.5 7.9 128.0 142.3 5. DERIVATIVE FINANCIAL INSTRUMENTS Winunited option €m Early repayment option €m Betit option €m Total €m BALANCE AT 1 JANUARY 2015 - - (1.7) (1.7) Movement in fair value 3.8 - 1.0 4.8 BALANCE AT 31 DECEMBER 2015 3.8 - (0.7) 3.1 Recognised on loan drawdown - 7.4 - 7.4 Disposal in the period - - 0.7 0.7 Change in fair value of early repayment option (0.1) 15.1 - 15.0 BALANCE AT 31 DECEMBER 2016 3.7 22.5 - 26.2 5.1 Winunited option 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, licences, brands and websites. The exercise period for the option is in the three months prior to the five year anniversary of 24 March 2015. No consideration was paid for the call option. At 31 December 2016 the option was valued using a Monte Carlo valuation model and two methodologies: a discounted cashflow and a multiples-based calculation. A long-term growth rate of 2% (2015: 2%) was assumed, and a discount rate of 13% (2015: 15%) based on industry peers and observable inputs. Based on this model, the value of the call option at 31 December 2016 was €3.7m (2015: €3.8m). This decrease in the fair value of the option has been recognised in the income statement in accordance with IAS 39.