LA CONSTITUCIÓN PULSIONAL

We have audited the financial state- ments 2015 of Fortuna Entertainment Group  N. V. (the company), based in Amsterdam. The financial statements include the consolidated financial state- ments and the company financial state- ments.

In our opinion:

the consolidated financial statements give a true and fair view of the finan- cial position of Fortuna Entertainment Group N. V. as at 31 December 2015, and of its result and its cash flows for 2015 in accordance with Interna- tional Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code;

the company financial statements give a true and fair view of the finan- cial position of Fortuna Entertainment Group N. V. as at 31 December 2015, and of its result for 2015 in accord-

ance with Part 9 of Book 2 of the Dutch Civil Code.

The consolidated financial statements comprise:

the consolidated statement of finan- cial position as at 31 December 2015; the following statements for 2015: consolidated statements of profit and loss and other comprehensive income, changes in equity and cash flows; and the notes comprising a summary of the significant accounting policies and other explanatory information. The company financial statements com- prise:

the company statement of financial position as at 31 December 2015; the company statement of profit or loss for the year ended 31 Decem- ber 2015; and

the notes comprising a summary of the significant accounting policies and other explanatory information. BASiS FOR OUR OPiniOn

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibili- ties under those standards are further described in the “Our responsibilities for the audit of the financial statements” sec- tion of our report.

We are independent of Fortuna Enter- tainment Group N. V. in accordance with the Verordening inzake de onafhanke- lijkheid van accountants bij assurance- opdrachten (ViO) and other relevant independence regulations in the Neth- erlands. Furthermore, we have complied with the Verordening gedrags- en ber- oepsregels accountants (VGBA). We believe that the audit evidence we have obtained is sufficient and appro- priate to provide a basis for our opin- ion.

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mAtERiALity

Materiality € 3.116.000 (2014: € 2.300.000)

Benchmark used 5% of pre-tax income adjusted for betting taxes and levies Additional explanation

We have chosen for adjusted pre-tax income since this represents the most important key performance indicator for Fortuna Entertainment Group and its stakeholders.

We have also taken into account mis- statements and/or possible misstate- ments that in our opinion are material for the users of the financial statements for qualitative reasons.

We agreed with the Supervisory Board that misstatements in excess of EUR 118,000, which are identified during the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds. SCOPE OF thE gROUP AUDit Fortuna Entertainment Group  N. V. is head of a group of entities. The financial information of this group is included in the consolidated financial statements of Fortuna Entertainment Group N. V.

Our group audit mainly focused on sig- nificant group entities in Czech Repub- lic, Poland and Slovakia. These entities represent 100% of total revenue, 100% of pre-tax income and 95% of total as- sets.

We have sent detailed instructions to component auditors in the Czech Re- public, Poland and Slovakia, covering the significant areas that should be covered and set out the information required to be reported to us. Based on our risk assessment, we visited component locations in the Czech Re- public and Slovakia. At these visits, we reviewed the component auditors’ files, discussed the outcome of their work and their reports thereon.

For goodwill we have applied a central- ized audit approach with specified audit procedures.

By performing the procedures at compo- nents, combined with additional proce- dures at group level, we have been able to obtain sufficient and appropriate audit evidence regarding the group’s financial information to provide an opinion on the financial statements.

OUR KEy AUDit mAttERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements. We have commu- nicated the key audit matters to the Su- pervisory Board. The key audit matters are not a comprehensive reflection of all matters discussed.

These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a  separate opinion on these matters.

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I N D E P E N D E N T A U D I T O R ’ S   R E P O R T

Risk Our audit response

it and revenue recognition

We refer to note 9.3.4 of the consolidated financial statements as part of the summary of the significant accounting policies The appropriate recognition of revenue is depend-

ent on IT systems correctly calculating commission revenues and appropriate wins and losses and con- trols accurately reporting on and reconciling these transactions.

Revenue streams for the vast majority of the Group’s products are computed on highly complex IT systems, with a number of different bases for calculating reve- nue. There are in excess of 0.5 billion transactions each year, all requiring a correct IT outcome. There is a risk that each system is not configured correctly from the outset such that commissions or winning and losing bets are calculated incorrectly, that the systems do not interface correctly from the customer facing systems through to the financial information systems and that unauthorized changes are made to any of these sys- tems, which may result in the misstatement of revenue.

Our audit procedures included, among others, the use of IT audit experts throughout the audit process. We critically assessed the design and operat- ing effectiveness of IT controls and tested that the systems are configured appropriately. We tested the configuration of the system which monitors the information transfer between each IT system and evaluated whether it was operating effectively. We have further tested the application con- trols, IT – dependent manual controls, manual prevent and manual detect controls over the two main revenue streams being betting and lottery. The tests of controls mainly concentrated on whether only the winning ticket is paid and the result is calculated correctly by the operational sys- tems including that all winning prices paid are supported by a ticket and the ticket is reviewed and stored at headquarters. Additionally it was tested whether the related commission, which is calculated automatically by the system, is correctly recognized in the accounting records. Assur- ance obtained through the tests of controls was supported by detailed analytical procedures.

Revenue recognition over the scratch tickets revenue stream was tested by performing substantive procedures concentrating mainly on whether the correct pay-out ratio is maintained and the respective accruals are calculated and accounted for correctly.

We also tested controls related to access to programs and data, program change and development and computer operations by evaluating account set-up and termination for users, password restrictions, access reviews, users with super-user access, program change and development process controls and integration monitoring, and tested whether any unauthorized changes had been made to the system. The overall IT environment was criti- cally assessed, including security policies and procedures, IT organizational structure, strategy and reporting, disaster recovery and back-up testing. valuation of goodwill

We refer to note 9.3.1 of the consolidated financial statements as part of the summary of the significant accounting policies and note 9.14 to the financial statements

Under EU-IFRS, Fortuna Entertainment Group N. V. is required to annually test the amount of goodwill for impairment. This annual impairment test was signifi- cant to our audit because the assessment process is complex and highly judgmental and is based on as- sumptions that are affected by expected future mar- ket or economic conditions, particularly those in the Czech Republic.

As a result, our audit procedures included, among others, using a valuation expert to assist us in evaluating the assumptions and methodologies used by the entity. We in particular paid attention to the assumptions relating to the discount rate, the forecasted revenue growth and profit margins. We also focused on the adequacy of Fortuna Entertainment Group N. V.’s dis- closures, about these assumptions to which the outcome of the impairment test is most sensitive. This means, those assumptions that have the most significant effect on the determination of the realizable value of goodwill. Included in our procedures, we assessed whether the aforementioned disclosures are sufficient and provide sufficient insight in the selection of the assumptions and the sensitivity of the assumptions for the valuation.

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Risk Our audit response

Capital expenditure as part of the new sports betting and gaming platform

We refer to note 9.3.6 and 9.3.7 of the consolidated financial statements as part of the summary of the significant accounting poli- cies and note 9.15 and 9.16 to the financial statements

The assessment and timing of whether assets meet the capitalization criteria set out in IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets requires judgment, as well as the selection of appropriate use- ful economic lives.

We considered this as a key audit matter because For- tuna Entertainment Group N. V. is developing a new sports betting and gaming platform.

In addition determining whether there is any indica- tion of impairment of the carrying value of assets also requires judgment.

An impairment charge of € 0,4 million is recorded in the profit and loss account.

We tested capital expenditures relating to the new sports betting and gam- ing platform and examined management’s assessment as to whether the project spend met the recognition criteria. Our procedures included un- derstanding the business case for each project, challenging key assump- tions or estimates, verifying capital project authorization especially relat- ing to internal hours, tracing project costs to third party evidence and as- sessing the useful economic life attributed to the asset.

In addition, we considered whether any indicators of impairment were pre- sent by understanding the business rationale for each project performing independent reviews for indicators of impairment, as well as testing man- agement’s controls to identify impairment of assets.

Recognition and measurement of deferred tax asset in Poland

We refer to note 9.3.18 of the consolidated financial statements as part of the summary of the significant accounting policies and note 9.12 to the financial statements

Deferred tax assets are recognized by the company to the extent that it is probable that future taxable profits are available against which the deferred tax asset can be utilized. We considered this as a key audit matter because of the degree of estimation uncertainty about the future taxable profits.

We have verified the proper calculation of the difference between the carrying amounts of assets and liabilities and the corresponding tax ba- sis in Poland. We furthermore evaluated the Company’s assumptions and estimates used for determining its future taxable income and assessed whether these estimates are reasonable and whether they allow the de- ferred tax assets to be (partially) recognized. These reviews and assess- ments were carried out with the support from our tax specialists.

RESPOnSiBiLitiES OF mAnAgEmEnt AnD thE SUPERviSORy BOARD FOR thE FinAnCiAL StAtEmEntS Management is responsible for the prepa- ration and fair presentation of the finan- cial statements in accordance with EU- IFRS and Part 9 of Book 2 of the Dutch Civil Code, and for the preparation of the man- agement board report in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

As part of the preparation of the finan- cial statements, management is respon- sible for assessing the company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, management should pre- pare the financial statements using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. Management should disclose events and circumstances that may cast significant doubt on the company’s ability to con- tinue as a going concern in the financial statements.

The Supervisory Board is responsible for overseeing the company’s financial reporting process.

OUR RESPOnSiBiLitiES FOR thE AUDit OF thE FinAnCiAL StAtEmEntS

Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assur- ance, which means we may not have de- tected all errors and fraud.

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I N D E P E N D E N T A U D I T O R ’ S   R E P O R T

Misstatements can arise from fraud or error and are considered material if, in- dividually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified mis- statements on our opinion.

We have exercised professional judg- ment and have maintained profes- sional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and in- dependence requirements. Our audit included e.g.:

Identifying and assessing the risks of material misstatement of the fi- nancial statements, whether due to fraud or error, designing and per- forming audit procedures respon- sive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a  basis for our opinion. The risk of not detect- ing a material misstatement result- ing from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtaining an understanding of in- ternal control relevant to the audit in order to design audit procedures that are appropriate in the circum- stances, but not for the purpose of expressing an opinion on the effec- tiveness of the company’s internal control.

Evaluating the appropriateness of accounting policies used and the reasonableness of accounting esti- mates and related disclosures made by management.

Concluding on the appropriateness of management’s use of the going con- cern basis of accounting, and based on the audit evidence obtained, whether a  material uncertainty ex- ists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclo- sures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclu- sions are based on the audit evidence obtained up to the date of our audi- tor’s report. However, future events or conditions may cause the company ceasing to continue as a going con- cern.

Evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and

Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and perform- ing the group audit. In this respect we have determined the nature and extent

of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of financial information or specific items.

We communicate with the Supervisory Board regarding, among other mat- ters, the planned scope and timing of the audit and significant audit findings, including any significant findings in in- ternal control that we identify during our audit.

We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regard- ing independence, and to communi- cate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safe- guards.

From the matters communicated with the Supervisory Board, we determine those matters that were of most signifi- cance in the audit of the financial state- ments of the current period and are therefore the key audit matters. We de- scribe these matters in our auditor’s re- port unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.

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Report on other legal and regulatory requirements