Carphone Warehouse 2013 Annual Report Download - page 73

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ANNUAL REPORT 2013 CARPHONE WAREHOUSE GROUP PLC 71
BUSINESS REVIEW GOVERNANCE FINANCIAL STATEMENTS
13 INTERESTS IN JOINT VENTURES
Interests in joint ventures are as follows:
Country of 2013 2012
Business Principal activities incorporation interest interest
Best Buy Europe Retail, distribution, insurance, telecoms services England and Wales 50.0% 50.0%
Virgin Mobile France MVNO England and Wales 46.3% 46.6%
The Group’s interest in Virgin Mobile France reduced from 46.6% to 46.3% during the year, following the exercise of share options by
management of Virgin Mobile France. In addition to share options, management hold warrants that give them the right to acquire new
shares at a price based on the value of existing shareholder funding and an additional amount which increases with the quantity of
shares being acquired. The maximum potential dilution to the Group’s stake if all existing share options and warrants were exercised is
approximately 5.2%, although the value of this dilution would be partially offset by cash inflows in relation to the proceeds on exercise.
a) GROUP BALANCE SHEET INTERESTS
The Group’s interests in joint ventures are analysed as follows:
Net assets
(liabilities) Goodwill Loans Total
2013 £m £m £m £m
Opening balance 408.3 102.9 24.3 535.5
Share of results 0.4 — — 0.4
Loans repaid (net) — — (4.0) (4.0)
Share of other reserve movements 2.7 — — 2.7
Acquisition of shares —0.2 —0.2
Foreign exchange 2.2 —0.2 2.4
Closing balance 413.6 103.1 20.5 537.2
Best Buy Europe 420.6 102.9 —523.5
Virgin Mobile France (7.0) 0.2 20.5 13.7
Closing balance 413.6 103.1 20.5 537.2
Net assets
(liabilities) Goodwill Loans Total
2012 £m £m £m £m
Opening balance 453.6 102.9 35.7 592.2
Share of results (34.1) — — (34.1)
Loans repaid (net) — — (9.9) (9.9)
Share of other reserve movements 0.7 — — 0.7
Foreign exchange (11.9) —(1.5) (13.4)
Closing balance 408.3 102.9 24.3 535.5
Best Buy Europe 418.1 102.9 —521.0
Virgin Mobile France (9.8) —24.3 14.5
Closing balance 408.3 102.9 24.3 535.5
The Group has no formal funding commitments to Best Buy Europe, which is funded principally through a £400m RCF from its core
bank group. As at 31 March 2013 this facility was due to mature in July 2015. Further to the CPW Europe Acquisition, agreement has
been reached with the Group’s core relationship banks for the provision of a new £400m RCF, which will mature in April 2017. CPW
Europe also has a number of overdrafts and other uncommitted facilities which are used for cash management purposes.
Loans are provided to Virgin Mobile France under a shareholder agreement; funding requirements are agreed between the shareholders
ona regular basis and are provided in proportion to each party’s shareholding. Virgin Mobile France also has an overdraft facility and since
the year end has agreed a third party three-year financing arrangement to provide funding up to €25.0m in respect of capital expenditure.