Half Year Report 2011 - Fortuna Entertainment Group EU

FORTUNA ENTERTAINMENT GROUP N.V.
Notes to the interim condensed consolidated financial statements as at 30 June 2011
There is no change in the classification of the interest rate swaps occurring since the previous year.
Fortuna Group enters into derivative financial instruments with various counterparties, principally financial
institutions with investment grade credit ratings. Derivatives valued using valuation techniques with market
observable inputs are interest rate swaps. The most frequently applied valuation techniques include swap
models, using present value calculations. The models incorporate various inputs including the credit quality
of counterparties and interest rate curves.
Bank loans
At 30 June 2011 the Group was in compliance with syndicated bank loan covenants.
15. OTHER OPERATING EXPENSES
30 June 2011
(unaudited)
€ 000
30 June 2010
(unaudited)
€ 000
Operating lease expense (4,427) (4,269)
Franchise fees (822) (753)
Materials and office supplies (914) (861)
Marketing and advertising (2,359) (2,023)
Telecommunication costs (911) (678)
Energy and utilities (866) (851)
Repairs and maintenance (367) (477)
Taxes and fees paid to authorities (262) (398)
Bad debt expense (54) (131)
IT services (589) (224)
Travelling and entertainment costs (346) (296)
Others (1,463) (817)
(13,380) (11 779)
Since 2011, expenses of the Czech companies are charges to the statement of income including VAT. In
the year 2010 amounts were included to the expenses without VAT and related VAT receivables were fully
provided for with effect to other operating expenses. The comparatives of other operating expenses were
adjusted for VAT related to Czech companies. The change in 2011 has no effect on total other operating
expenses, there is only a classification difference between Bad debt expense and other cost categories
within other operating expenses.
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