HELLAS TELECOMMUNICATIONS II, SCA - WIND.gr · 2011-05-11 · Hellas III, Hellas IV, Hellas V and...

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HELLAS TELECOMMUNICATIONS II, SCA Condensed Consolidated Interim Financial Statements

30 June 2009

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HELLAS TELECOMMUNICATIONS II, SCA

INDEX TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Page

Condensed Consolidated Interim Statement of Financial Position 3 Condensed Consolidated Interim Statement of Comprehensive Income 4 Condensed Consolidated Interim Statement of Changes in Equity 5-6 Condensed Consolidated Interim Statement of Cash Flow 7 Notes to the Condensed Consolidated Interim Financial Statements 8-30 1. Reporting entity 8 2. Statement of compliance 8 3. Significant accounting policies 9 4. Significant accounting judgments, estimates and assumptions 9 5. Financial risk management – Liquidity risk of financial liabilities 10 6. Revenues 10 7. Other income 11 8. Purchases and services 11 9. Other expenses 12 10. Personnel expenses 12 11. Depreciation and amortization 12 12. Net finance costs 13 13. Income taxes 13-14 14. Property, plant and equipment 15 15. Intangible assets 15-16 16. Financial assets 16 17. Deferred tax assets and liabilities 17 18. Impairment testing of goodwill and intangibles with indefinite lives 18-19 19. Trade receivables 19-20 20. Other receivables 20 21. Equity 21 22. Financial liabilities 21-26 23. Other payables 27 24. Amounts due from/ to related companies 27-29 25. Commitments and contingencies 29 26. Subsequent events 30 Independent Auditors’ Report on Review of Interim Financial Information 31

HELLAS TELECOMMUNICATIONS II, SCA CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION In thousands of Euro, unless otherwise stated

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30 June 2009 31 December 2008 31 December 2007 Notes (unaudited) (restated) (restated) Assets Property, plant and equipment 14 660,748 676,729 637,292 Intangible assets 15 1,736,569 1,798,423 1,803,544 Financial assets 16 7,297 6,226 5,226 Deferred tax assets 17 61,438 57,464 27,147 Total non-current assets 2,466,052 2,538,842 2,473,209 Inventories 10,598 11,160 12,838 Trade receivables 19 218,024 219,865 253,019 Financial assets 16 15,676 8,291 67,084 Assets for current taxes 15,990 15,157 26,325 Other receivables 20 33,706 49,230 34,392 Cash and cash equivalents 31,861 36,771 110,070 Total current assets 325,855 340,474 503,728 Total assets 2,791,907 2,879,316 2,976,937 Equity and liabilities Equity attributable to equity holders of the parent

Issued capital 21 1,873 1,577 1,577 Share premium 21 179,134 - - Reserves 27,193 28,999 32,746 Accumulated deficit (1,352,597) (1,238,392) (1,122,171) Total (1,144,397) (1,207,816) (1,087,848) Non-controlling interest - - 62,986 Total equity (1,144,397) (1,207,816) (1,024,862) Liabilities Financial liabilities 22 3,211,629 3,145,951 3,130,341 Employee benefits 7,085 6,559 5,670 Provisions 20,218 19,954 33,624 Other non current liabilities 5,278 3,846 19,428 Deferred tax liabilities 17 179,330 185,518 232,004 Total non-current liabilities 3,423,540 3,361,828 3,421,067 Financial liabilities 22 142,374 118,838 84,413 Trade payables 273,434 314,273 365,162 Other payables 23 91,865 283,661 94,025 Tax payable 5,091 8,532 37,132 Total current liabilities 512,764 725,304 580,732 Total liabilities 3,936,304 4,087,132 4,001,799 Total equity and liabilities 2,791,907 2,879,316 2,976,937

The notes on pages 8 to 30 are an integral part of these condensed consolidated interim financial statements.

HELLAS TELECOMMUNICATIONS II, SCA CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME For the three and the six month period ended 30 June 2009 and 30 June 2008 In thousands of Euro, unless otherwise stated

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Notes

three months ended 30

June 2009 (unaudited)

three months ended 30 June 2008

(unaudited)

six months ended 30


six months ended 30 June 2008

(unaudited)

Revenues 6 273,209 310,582 536,751 608,038

Other income 7 5,852 1,605 8,365 3,057

Total revenue 279,061 312,187 545,116 611,095

Purchases and services 8 (167,262) (186,385) (330,316) (364,638)

Other expenses 9 (9,998) (10,637) (18,662) (17,382) Personnel expenses 10 (18,900) (22,114) (38,316) (44,399)

Depreciation and amortization 11 (64,710) (66,785) (127,059) (128,187)

Gains (losses) on disposal of non current assets

784 (5) 709 (53)

Operating income 18,975 26,261 31,472 56,436

Finance income 7,283 38,816 8,744 45,275

Finance expenses (64,615) (45,667) (163,977) (165,755)

Foreign exchange gains (losses) 171 79 95 189

Net finance costs 12 (57,161) (6,772) (155,138) (120,291)

(Loss) Profit before tax (38,186) 19,489 (123,666) (63,855)

Income tax (expense) benefit 13 (1,263) (22,194) 9,461 (10,328)

Loss for the period (39,449) (2,705) (114,205) (74,183) Other comprehensive income (loss) for the period, net of income tax

- - - -

Total comprehensive loss for the period (39,449) (2,705) (114,205) (74,183)

Total loss/ comprehensive loss attributable to:

Owners of the Company (39,449) 8,386 (114,205) (57,232) Non-controlling interest - (11,091) - (16,951) Total loss/ comprehensive loss (39,449) (2,705) (114,205) (74,183)


HELLAS TELECOMMUNICATIONS II, SCA CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY For the six month period ended 30 June 2009 and 30 June 2008 In thousands of Euro, unless otherwise stated

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Attributable to equity holders of the Company

Share capital

Share premium CPECs

Contribution from

shareholders

Cash flow hedge

reserve

Accumulated deficit Total

Non controlling

interest

Total Equity

31 December 2008 1,577 - 6,487 9,571 12,941 (1,238,392) (1,207,816) - (1,207,816)

Total comprehensive loss for the period:

Loss for the period - - - - - (114,205) (114,205) - (114,205)

Other comprehensive income (loss) for the period, net of income tax - - - - - - - - -

Total 1,577 - 6,487 9,571 12,941 (1,352,597) (1,322,021) - (1,322,021)

Release to income statement, net of income tax - - - - (1,806) - (1,806) - (1,806)

Transactions with owners, recorded directly in equity Issue of ordinary shares (note 21) 296 179,134 - - - - 179,430 - 179,430

30 June 2009 (unaudited) 1,873 179,134 6,487 9,571 11,135 (1,352,597) (1,144,397) - (1,144,397)


HELLAS TELECOMMUNICATIONS II, SCA CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY For the six month period ended 30 June 2009 and 30 June 2008 In thousands of Euro, unless otherwise stated

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Attributable to equity holders of the Company

Share capital

Share premium CPECs

Contribution from

shareholders

Cash flow hedge

reserve

Accumulated deficit Total

Non controlling

interest

Total Equity

31 December 2007 1,577 6,487 9,571 16,688 (1,122,171) (1,087,848) 62,986 (1,024,862)

Total comprehensive loss for the period:

Loss for the period - - - - - (57,232) (57,232) (16,951) (74,183)

Other comprehensive income (loss) for the period, net of income tax - - - - - - - - -

Total 1,577 - 6,487 9,571 16,688 (1,179,403) (1,145,080) 46,035 (1,099,045)

Release to income statement, net of income tax - - - (1,882) - (1,882) - (1,882)

30 June 2008 (unaudited) 1,577 - 6,487 9,571 14,806 (1,179,403) (1,146,962) 46,035 (1,100,927)


HELLAS TELECOMMUNICATIONS II, SCA CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOW For the three and the six month period ended 30 June 2009 and 30 June 2008 In thousands of Euro, unless otherwise stated

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Notes





six months ended 30


six months ended 30


Cash flows from operating activities Loss for the period (39,449) (2,705) (114,205) (74,183) Adjustments for:

Depreciation and amortization 11 64,710 66,785 127,059 128,187

Amortization of arrangement fees cost 2,341 2,004 4,542 3,956 Net change in provisions and employee benefits 549 709 790 1,085

(Gain) loss on disposal of non-current assets (784) 5 (709) 53

Impact of cash flow hedge (904) (1,038) (1,806) (1,882) Changes in current assets 1,473 10,526 13,120 2,247 Changes in current liabilities (27,613) (7,893) (63,171) (47,230) Net cash from (used in) operating activities 323 68,393 (34,380) 12,233

Cash flows from investing activities Acquisition of property, plant and equipment 14 (25,824) (31,277) (37,685) (48,458) Proceeds from sale of property and equipment 765 126 842 163 Acquisition of intangible assets 15 (5,654) (6,069) (9,903) (7,423) Net cash used in investing activities (30,713) (37,220) (46,746) (55,718) Cash flows from financing activities Proceeds from (repayments of) loans and banks facilities 22 50,000 15,000 48,500 (20,000)

Changes in other financial assets and liabilities (10,231) (63,316) 27,716 (6,115)

Net cash from (used in) financing activities 39,769 (48,316) 76,216 (26,115)

Net increase (decrease) in cash and cash equivalents 9,379 (17,143) (4,910) (69,600)

Cash and cash equivalents at the beginning of the period 22,482 57,613 36,771 110,070

Cash and cash equivalents at the end of the period 31,861 40,470 31,861 40,470

Additional cash flow information: Interest paid (65,176) (67,976) (123,482) (122,645) Income tax paid (2,154) (10,451) (3,557) (13,059)


HELLAS TELECOMMUNICATIONS II, SCA NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS In thousands of Euro, unless otherwise stated

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1. REPORTING ENTITY:

Hellas Telecommunications II SCA (“Hellas II”) was incorporated for an unlimited period of time under the laws of Luxembourg on 6 March, 2003 as a “société à responsabilité limitée”. Hellas II is a wholly owned subsidiary of Hellas Telecommunications I S.ár.l (“Hellas I”). The ultimate parent of Hellas II is Hellas Telecommunications S.ár.l (“Hellas”). Hellas II has its registered office at L – 1882 Luxembourg, 12, rue Guillaume Kroll and its main purpose is the acquisition, transfer, sale and maintenance of its investments in Luxembourg and foreign countries, by purchase, subscription or in any other manner. Hellas II may also borrow, in any form, and proceed with the issuance of bonds, without a public offer, which may be convertible and to the issuance of debentures. It may also carry out any commercial, industrial, or financial activities which it may deem useful in accomplishment of its purpose. Hellas II is a corporate taxpayer subject to common tax law and does not fall in the scope of the holding company Luxembourg law of 31 July, 1929.

The condensed consolidated interim financial statements of Hellas II as at 30 June 2009 comprise of Hellas II and its subsidiaries (together referred to as the “Company” and individually as “Company entities”) and are detailed below.

Name Country of

incorporation 2009

Hellas Telecommunications (Luxembourg) III (“Hellas III”) Luxembourg 100.00%

Hellas Telecommunications IV (“Hellas IV”) Luxembourg 100.00%

Hellas Telecommunications (Luxembourg) V (“Hellas V”) Luxembourg 100.00%

Hellas Telecommunications (Luxembourg) (“Hellas VI”) Luxembourg 100.00% WIND Hellas Telecommunications S.A. (“WIND Hellas”) Greece 100.00%

Hellas III, Hellas IV, Hellas V and Hellas VI are wholly-owned subsidiaries of Hellas II and were established for the sole purpose of holding the Company’s financial liabilities. The operating subsidiary WIND Hellas provides mobile, fixed telecommunication and internet access services in the Hellenic Republic ("Greece").

The consolidated financial statements of the Company as at and for the year ended 31 December 2008 are available from the Company’s website www.wind.com.gr.

2. STATEMENT OF COMPLIANCE:

The accompanying condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by European Union. They do not include all the information required for full annual consolidated financial statements, and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended 31 December 2008. These condensed consolidated interim financial statements were approved by the Board of Directors’ of the Company on 25 August 2009.

http://www.wind.com.gr/


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3. SIGNIFICANT ACCOUNTING POLICIES:

Except as disclosed below, the accounting policies applied by the Company in these condensed consolidated interim financial statements are the same as those applied by the Company in its consolidated financial statements as at and for the year ended 31 December 2008.

Presentation of financial statements: The Company applies revised IAS 1 Presentation of Financial Statements (2007), which became effective as at 1 January 2009. As a result, the Company presents in the consolidated statement of changes in equity all owner changes in equity, whereas all non-owner changes in equity are presented in the consolidated statement of comprehensive income. This presentation has been applied in these condensed consolidated interim financial statements as at and for the six months ended 30 June 2009. Comparative information has been represented so that it also is in conformity with the revised standard.

Customer loyalty programs: The Company applies IFRIC 13 Customer Loyalty Programs (2007) which became effective for annual periods beginning on or after 1 July 2008. As a result, the Company has reclassified for the six months ended 30 June 2009 and 2008 the amounts of €2.0 million and €2.0 million, respectively, from the caption Purchases and services to the caption Revenues. Furthermore for the three months ended 30 June 2009 and 2008, the amounts of €0.9 million and €1.2 million, respectively were reclassified from the caption Purchases and services to the caption Revenues. Comparative information has been represented so that is also is in conformity with the interpretation.

Segment reporting: As at 1 January 2009 the Company determines and presents operating segments based on the information that is provided internally to the CEO, who is the Company’s chief operating decision maker. This change in accounting policy is due to the adoption of IFRS 8 Operating Segments. Previously, operating segments were determined and presented in accordance with IAS 14 Segment Reporting. The adoption of the new accounting policy in respect of segment operating disclosures does not have any impact on the presentation of the condensed consolidated interim financial statements since the Company operates in one segment.

4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS:

The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The actual results may be different from these estimates.

Except as described below, in preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2008.

During the six months ended 30 June 2009, management re-assessed its estimates in respect of:

a. Impairment of goodwill, indefinite and definite life intangible assets and tangible assets as the Company has one CGU (see note 18).

b. Recoverability of deferred tax assets relating to tax losses carried forward (see notes 13, 17).

c. Valuation of financial instruments and assets (see notes 16, 19, 22).


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5. FINANCIAL RISK MANAGEMENT – LIQUIDITY RISK OF FINANCIAL LIABILITIES:

During the second quarter of 2009, the Company experienced a significant revenue decline as a result of the following factors: (1) the significant competitive market environment leading to price reductions, (2) the regulatory reduction in interconnection tariffs and (3) the existing economic crisis. These factors have not allowed the Company to generate sufficient revenues and cash flows to sustain its operations and therefore the Company has had to rely on financing activities to supplement cash from operations. Furthermore, due to the fact that the Company is highly leveraged, the above factors may constrain the Company’s ability to meet its broader strategic objectives as well as its future interest payments.

The Company needs to restructure its debt and continue to reduce corporate overhead expenses in order to alleviate future potential liquidity restrictions, so that the Company’s strategic objectives may be met and the Company’s revised business plan may be advantageously executed. The Company’s internal projections of expected cash flows from operations currently indicate that there may be insufficient cash to cover the debt interest payments, and there is a risk of default of its financial covenant under the Revolving Credit Facility.

Due to the above issues, the Company has initiated a process to evaluate strategic alternatives to address its capital structure.

The financial information included in the condensed consolidated interim financial statements has been presented on a going concern basis. However, until the outcome of the Company’s evaluation of its strategic alternatives and the implications of this for the Company’s future debt structure are known, there may be a material uncertainty about the appropriateness of this basis of presentation.

The financial information presented above does not reflect any adjustments which would be required if the going concern assumption was not appropriate. Given the possible material uncertainty described above, it is not currently possible to determine the extent and quantification of any such adjustments.

6. REVENUES:





six months ended 30


six months ended 30


Revenues from sales of handsets and accessories 12,552 15,389 25,095 32,906

Telephony services 202,390 220,369 402,137 428,182 Interconnection traffic 51,271 67,151 100,371 134,537 International roaming 6,105 7,353 7,535 9,155 Other income from services 891 320 1,613 3,258

Total 273,209 310,582 536,751 608,038


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7. OTHER INCOME:





six months ended 30


six months ended 30


Income from various charges to customers 1,713 771 3,550 1,579 Income from co-operative agreements 578 354 592 354 Income from reversal of personnel accruals 3,100 - 3,100 - Other 461 480 1,123 1,124 Total 5,852 1,605 8,365 3,057

8. PURCHASES AND SERVICES:

three months

ended 30 June 2009

(unaudited)

three months

ended 30 June 2008

(unaudited)

six months

ended 30 June 2009

(unaudited)

six months

ended 30 June 2008

(unaudited) Cost of sales of handsets and accessories 26,256 28,238 50,537 58,806 Interconnection traffic 52,902 66,257 103,969 127,693 Customer acquisition costs 20,732 21,753 39,676 42,936 National and international roaming 3,535 2,497 6,245 6,824 Advertising and promotional services 11,624 19,138 26,101 34,331 Rental of civil and technical sites 9,957 9,475 19,229 18,654 Rental of circuits 10,396 8,545 21,893 16,156 Outsourced services 2,890 2,846 4,463 5,354 Maintenance costs 10,340 10,873 22,042 22,433 Consulting and professional services 12,518 6,008 16,996 8,944 Other service expenses 6,112 10,755 19,165 22,507 Total 167,262 186,385 330,316 364,638


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9. OTHER EXPENSES:





six months ended 30


six months ended 30


Write-down of current receivables (note 19) 4,550 4,732 9,276 7,161 Annual contributions for licences 638 655 1,345 1,333 Taxes and duties 4,042 3,891 6,567 6,798 Other operating expenses 768 1,359 1,474 2,090 Total 9,998 10,637 18,662 17,382

10. PERSONNEL EXPENSES:





six months ended 30


six months ended 30


Wages and salaries 14,451 17,504 30,494 36,178 Social security 3,461 3,612 6,411 6,542 Defined benefit pension costs 263 298 526 594 Other personnel costs 725 700 885 1,085 Total 18,900 22,114 38,316 44,399

11. DEPRECIATION AND AMORTIZATION:





six months ended 30


six months ended 30


Depreciation of property, plant & equipment: -Buildings 919 1,961 1,816 3,063 -Plant and machinery 22,999 21,923 44,435 40,764 -Other tangible assets 3,920 5,029 7,502 8,666 Amortization of intangible assets: -Software 9,463 8,979 18,908 17,736 -Licenses 6,872 9,478 13,744 19,129 -Other intangible assets 20,537 19,415 40,654 38,829

Total 64,710 66,785 127,059 128,187


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12. NET FINANCE COSTS:

three months

ended 30 June 2009

(unaudited)

three months

ended 30 June 2008

(unaudited)

six months

ended 30 June 2009

(unaudited)

six months

ended 30 June 2008

(unaudited)

Finance income Interest income on bank deposits 110 476 269 913 Cash flow hedges, transfer from equity (note 22) 1,205 1,383 2,408 2,509 Fair value gains on derivative instruments 5,847 31,986 5,847 31,986 Derivatives related accrued interest - 4,905 - 9,776 Others 121 66 220 91 Total 7,283 38,816 8,744 45,275 Foreign exchange gain 171 79 95 189 Finance expenses Interest expense on bonds and bank borrowings (note 22) (43,810) (75,671) (109,686) (151,086) Unwinding of discount on asset retirement obligation (113) (85) (227) (170) Fair value losses on derivative instruments 4,999 30,891 (24,125) (13,023) Other financial expenses (25,691) (802) (29,939) (1,476) Total (64,615) (45,667) (163,977) (165,755)

Net finance costs (57,161) (6,772) (155,138) (120,291)

13. INCOME TAXES:





six months ended 30


six months ended 30


Current income tax expense Current period 50 6,073 99 10,502 50 6,073 99 10,502 Deferred income tax expense (benefit) Origination and reversal of temporary differences (note 17) 1,213 16,121 (9,560) (174) 1,213 16,121 (9,560) (174) Total income tax expense (benefit) 1,263 22,194 (9,461) 10,328


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The reconciliation of the effective tax rate is as follows:





Loss for the period (39,449) (2,705) Total income tax expense 1,263 22,194 (Loss) Profit for the period before taxes (38,186) 19,489 Income tax using the Company's domestic tax rate 29.6% (11,341) 29.6% 5,775 Effect of tax rates in foreign jurisdictions (1.8%) 684 (5.4%) (1,050) Non-deductible expenses 1.7% (660) 10.5% 2,056

Expiration of taxable losses previously recognised (26.6%) 10,142 - -

Recognition of previously unrecognized temporary differences

9.7% (3,686) - -

Current year losses for which no deferred tax asset was recognized

(16.0%) 6,124 79.1% 15,413

(3.3%) 1,263 113.9% 22,194

six months ended 30


six months ended 30


Loss for the period (114,205) (74,183) Total income tax (benefit) expense (9,461) 10,328 Loss for the period before taxes (123,666) (63,855) Income tax using the Company's domestic tax rate 29.6% (36,642) 29.6% (18,920) Effect of tax rates in foreign jurisdictions (2.6%) 3,198 (0.2%) 110 Non-deductible expenses (2.0%) 2,448 (4.9%) 3,152 Expiration of taxable losses previously recognised (8.2%) 10,142 - -

Recognition of previously unrecognized temporary differences 3.0% (3,686) - - Current year losses for which no deferred tax asset was recognized (12.2%) 15,079 (40.7%) 25,986 7.7% (9,461) (16.2%) 10,328


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14. PROPERTY, PLANT AND EQUIPMENT:

The major classes of property, plant and equipment are as follows:

30 June 2009 (unaudited)

31 December 2008 Cost: Land and buildings 78,172 76,895 Plant and machinery 772,308 750,840 Commercial and industrial equipment 5,935 5,657 Other tangible assets 84,223 72,271 Tangible assets in progress 54,506 55,454

995,144 961,117 Accumulated depreciation (334,396) (284,388)

Net book value 660,748 676,729

Additions in the normal course of operations for the six months ended 30 June 2009 and 2008 amounted to approximately €37.7 million and €48.5 million, respectively. Write-offs of fully depreciated property, plant and equipment and other movements for the six months ended 30 June 2009 and 2008 amounted to approximately €3.7 million and €1.7 million, respectively.

Depreciation for the six months ended 30 June 2009 and 2008 amounted to approximately €53.8 million and €52.5 million, respectively. Write-offs of fully depreciated assets and other movements for the six months ended 30 June 2009 and 2008 amounted to approximately €3.7 million and €1.7 million, respectively.

15. INTANGIBLE ASSETS:

30 June 2009

(unaudited)

31 December 2008 Cost: Software 198,518 191,172 Licenses 326,310 326,309 Other Intangible assets 737,908 733,692

Prepayments for purchases of software 6,449

6,495

Goodwill (note 18) 995,457 995,457 2,264,642 2,253,125 Accumulated amortization (528,073) (454,702)

Net book value 1,736,569 1,798,423


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Additions in the normal course of operations for the six months ended 30 June 2009 and 2008 amounted to approximately €9.9 million and €7.4 million, respectively and mainly related to software licences and connection fees for leased lines. Other movements for the six months ended 30 June 2009 and 2008 amounted to approximately €1.5 million and nil, respectively.

Amortization for the six months ended 30 June 2009 and 2008 amounted to approximately €73.3 million and €75.7 million, respectively.

Other intangible assets relate to the following finite and indefinite intangible assets as follows:

Useful life 30 June 2009

(unaudited)

31 December 2008 Cost: Q brand name (note 18) Indefinite 67,100 67,100 Tellas brand name (note 18) Indefinite 65,450 65,450 Customer relationships Finite 533,658 533,658 WIND Italy - Tellas contract Finite 5,020 5,020 PPC backbone contract Finite 51,100 51,100 Other Finite 15,580 11,364 737,908 733,692 Accumulated amortization (280,595) (239,875)

Net book value 457,313 493,817

16. FINANCIAL ASSETS:

30 June 2009 (unaudited) 31 December 2008

Non-current Current Non-current Current

Derivative financial assets - 15,663 - - Security deposits and other 7,297 13 6,226 8,291

Total 7,297 15,676 6,226 8,291

The derivative financial assets relate to two foreign exchange forward swap contracts with notional amounts of US$275 million. The notional amounts indicated are effective for settlement on 15 January 2010. The Company entered into these contracts in January 2009, considering that the two cross-currency interest rate swap contracts (note 22) called for a final exchange of principal on 15 January 2010 at an original fixed exchange rate. This created an open foreign exchange position for the Company, and as a result, in order to hedge this existing foreign exchange risk, the Company entered into these two new contracts.


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17. DEFERRED TAX ASSETS AND LIABILITIES:

30 June 2009

(unaudited)

31 December 2008 Deferred tax assets: Provision for liabilities and charges 3,190 2,906 Deferred airtime revenue 4,893 6,006 Derivative financial instruments 14,411 3,554 Roaming discounts 4,859 7,268 Tax loss carry-forward 24,903 30,228 Other 9,182 7,502 Deferred tax assets 61,438 57,464

Deferred tax liabilities: Property, plant and equipment, intangible assets (147,580) (157,494) Deferred charges for financial liabilities (14,085) (15,400) Derivative financial instruments (4,641) - Other (13,024) (12,624) Deferred tax liability (179,330) (185,518)

Net deferred tax liability (117,892) (128,054)

Movement in net deferred tax liability 30 June 2009

(unaudited) Balance at 1 January 2009 (128,054) Charged directly to equity (relates to derivative financial instruments) 602 Benefit for the period (note 13) 9,560 Balance at period end (117,892)


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18. IMPAIRMENT TESTING OF GOODWILL AND INTANGIBLES WITH INDEFINITE LIVES:

(I) Goodwill: For the purpose of impairment testing, goodwill of €995 million is allocated to the operating subsidiary, WIND Hellas, which represents the lowest level within the Company at which goodwill is monitored for internal management purposes. Following a decrease in revenues and an increased loss for the six months ended 30 June 2009, the Company assessed the recoverable amount of its cash-generating unit (CGU). As a result of this test, the carrying value of the CGU was determined to be lower than the estimated recoverable amount of the Company. Also, the Company believes that no reasonable possible change in any of the key assumptions would cause the carrying value of the CGU to exceed its recoverable amount.

The recoverable amount of the CGU is based on value-in-use calculations. These are determined using pre-tax cash flow projections based on financial budgets approved by Company management covering a five-year period. It reflects management’s expectations of revenue growth, operating costs and margin for the CGU based on past experience. Cash flows beyond the five-year period are extrapolated using the estimated growth rates indicated in the table below. These growth rates have been determined with regard to projected growth rates for the specific market in which the CGU operates and are not considered to exceed the long term average growth rates for the market. Discount rates applied in determining the recoverable amounts of the CGUs are derived from the Company’s pre-tax weighted average cost of capital and are indicated in the table below:

WIND Hellas

Growth rate1 0.5% Discount rate2 9.5%

1Growth rate used to extrapolate cash flows beyond the budget period. 2Pre-tax discount rate applied to the cash flow projections.

Other key assumptions used in the value of use calculations were as follows: - Post-paid and prepaid customer base: The customer base is expected to grow in the period 2010 – 2013 as a result of the new commercial positioning set to provide a unique selling proposition and fully-convergent offerings combining mobile and fixed broadband services with “best in class” customer experience and sustainable differentiation towards competition. This is also evident in the projected declining churn rates for the period 2010 – 2013, despite the increase in the churn rates in the year 2009 while at the same time a number of commercial-driven operating expenses and capital expenditures grow in order to support the increased commercial effort. - Growth in the market segment of fixed telephony customers: the growth is expected to come primarily out of the double play customer expansion whereas indirect voice customers are projected to decline steadily throughout the 2009 – 2013 periods, representing the Company’s shift of focus from the indirect to direct (LLU) customer base. - Declining interconnection rates: Interconnection rates are expected to decrease significantly up to the year 2013, in line with regulator’s decision for reductions in mobile termination rates.


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- Revenues: year 2009 total revenues are not expected to exceed the 2008 level but they are expected to increase by an aggregate of 11.3% from 2009 to 2013. - Improved earnings before interest taxes, depreciation and amortization (EBITDA) margin: the fall back in EBITDA in 2009 and 2010 is mainly the result of the following factors: (i) the ongoing recessionary economic environment which adversely affects consumer behaviour, (ii) the aggressive competitive pricing in the local market which affected the profitability levels in 2009 and (iii) the imposed interconnection rates reduction. In the years 2011 onwards, EBITDA is expected to increase to a sustainable level which is based on the Company’s expected expanded customer base and improved efficiency and effectiveness of the business operational model as the commercial effort is easing off from its peak in the year 2010 and increased economies and synergies are produced.

(ii) Q brand name: The intangible asset relating to the brand name for Q amounted to €67.1 million and is included in “Other Intangibles” in the intangible assets schedule (note 15). This asset is not amortized since it has an indefinite life. The determination of the recoverable amount of the Q brand is based on the key assumptions outlined above and the Company believes that no reasonably possible change in any of the key assumptions would cause the carrying amount of the CGU to exceed its recoverable amount. (iii) Tellas brand name: The intangible asset relating to the brand name for Tellas amounted to €65.5 million, is a result of the finalization of the purchase price allocation for the Wind PPC Holdings N.V. acquisition and is included in “Other Intangibles” in the intangible assets schedule (note 15). This asset is not amortized since it has an indefinite life. The determination of the recoverable amount of the Tellas brand is based on the key assumptions outlined above and the Company believes that no reasonably possible change in any of the key assumptions would cause the carrying amount of the CGU to exceed its recoverable amount.

19. TRADE RECEIVABLES:


31 December 2008 Receivables due from customers 176,230 171,288 Receivables due from telephone operators 62,328 63,504 Receivables due from dealers 12,028 23,274 Other trade receivables 32,534 26,656

283,120 284,722 Less: Provisions for doubtful debts (65,096) (64,857)

Total 218,024 219,865


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The movement in the provision for doubtful debts is as follows:

30 June 2009

(unaudited) Balance at 1 January 2009 64,857 Charge for the period (note 9) 9,276 Write off receivable (9,037)

Balance at period end 65,096

The Company discovered that the unbilled traffic revenue and the related accrual for the years 2008 and 2007 were overstated by €3.2 million and €10.4 million net of income tax, respectively. This overstatement was a result of a technical problem identified with the report that the Company used in determining this accrual. As a result, the captions detailed below were impacted as follows:

All affected financial statement captions have been restated accordingly.

20. OTHER RECEIVABLES:


31 December 2008

Receivables due from social security authority 1 1 Receivables due from tax authority 88 14,633 Prepaid expenses 24,159 25,022 Other receivables group - 1,680 Other receivables third parties 9,458 7,894

Total 33,706 49,230

31 December 2008 31 December 2007 Increase (decrease) Increase (decrease) Deferred tax assets 4,980 3,903 Trade receivables (18,596) (14,285) Accumulated deficit 13,616 10,382


21

21. EQUITY:

As at 30 June 2009, the authorized and issued share capital amounted to 18,734 shares with a par value of €100 each. All issued shares are fully paid. In February 2009, the Company issued 2,965 shares with a nominal value of €100 per share in settlement of an outstanding payable with Hellas I amounting to €179.4 million which was related to the purchase of the non-controlling interest in WIND PPC Holding N.V. in September 2008 (note 23). Also, the issued and outstanding CPECs as at 30 June 2009 were 6,487,136 certificates with a par value of €1 each.

22. FINANCIAL LIABILITIES:

This note provides information about the contractual terms of the Company’s financial liabilities, which are measured at amortised cost. Borrowing and derivative financial liabilities The following table provides details of financial liabilities:


Current Non Current Total Current Non Current Total Bonds and bank financing 55,166 2,954,034 3,009,200 65,604 2,899,489 2,965,093 Financing from related parties (note 24) 2,904 257,595 260,499 2,871 246,462 249,333 Derivative financial liabilities 84,304 - 84,304 50,363 - 50,363 Total 142,374 3,211,629 3,354,003 118,838 3,145,951 3,264,789

The following table provides details of the maturity dates of financial liabilities:


< 1 year 1 to 5 years > 5 years Total < 1 year 1 to 5 years > 5 years Total Bonds and bank financing 55,166 1,813,653 1,140,381 3,009,200 65,604 1,761,151 1,138,338 2,965,093 Financing from related parties (note 24) 2,904 - 257,595 260,499 2,871 - 246,462 249,333 Derivative financial liabilities 84,304 - - 84,304 50,363 - - 50,363 Total 142,374 1,813,653 1,397,976 3,354,003 118,838 1,761,151 1,384,800 3,264,789


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The following table provides an analysis of financial liabilities, excluding derivative financial liabilities, by currency of issuance and effective interest rate:


< 5% 5% - 7.5% 7.5% - 10% 10% - 12.5% > 12.5% Total

Euro 309,241 1,211,354 1,283,605 257,594 - 3,061,794

US Dollar 2,826 205,079 - - - 207,905

Total 312,067 1,416,433 1,283,605 257,594 - 3,269,699

(a) Third party borrowings

Terms and conditions of outstanding financial liabilities were as follows:

Ref

Currency

Nominal interest

rate

Year of

Maturity


31 December 2008

Face value Carrying

amount Face

value Carrying

amount Current

Bond Loan (v) € 3M Euribor + 1.75% 2009 3,312 3,312 3,312 3,312

Accrued interest on bond and bank financing €

2009

51,854

51,854

62,292

62,292 55,166 55,166 65,604 65,604 Non Current Senior Secured Notes - €925 million issue

(i) € 3M Euribor + 3.5%

2012 925,000 918,631 925,000 917,777

Senior Secured Notes - €200 million issue

(i) € 3M Euribor + 3.5%

2012 200,000 195,956 200,000 195,414

Senior Secured Notes - €97.3 million issue

(i) € 3M Euribor + 3.5%

2012 97,250 96,767 97,250 96,705

Senior Notes - €355 million issue (ii) € 8.50% 2013 355,000 348,303 355,000 347,686 Subordinated Notes - €960 million issue

(iii) € 3M Euribor + 6.00%

2015 960,000 935,302 960,000 933,634

Subordinated Notes – US $275 million issue

(iii) $ 3M Libor + 5.75%

2015 210,406 205,079 210,406 204,705

Revolving Credit Facility (iv) € 3M Euribor + 2.25% 2012 250,000 247,370 200,000 196,942



3,004,282 2,954,034 2,954,282 2,899,489 Total 3,059,448 3,009,200 3,019,886 2,965,093


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(i) On 7 October 2005, Hellas V issued senior secured floating rate notes (the “Senior Secured Notes”) with a principal amount of €925.0 million under an indenture agreement (the “Senior Secured Indenture”) dated 7 October 2005, as supplemented on 31 January 2006 and amended and restated as of 18 December 2006, among itself, the guarantors party thereto and the Bank of New York, as trustee. Furthermore, on 1 February 2006, Hellas V issued additional Senior Secured Notes with a principal amount of €200.0 million under the Senior Secured Indenture in connection with the financing of the Q-Telecom acquisition which occurred in 2006. Finally, on 21 December 2006, Hellas V issued additional Senior Secured Notes with a principal amount of €97.25 million under the Senior Secured Indenture. As at 30 June 2009 and 31 December 2008, total principal outstanding for the Senior Secured notes was €1,222.25 million. The Senior Secured Notes constitute a single class of debt securities under the Senior Secured Indenture, they mature on 15 October 2012 and bear interest at a rate per annum, reset quarterly, equal to EURIBOR plus 3.5%. The funds raised by the issuance of the €200.0 Senior Secured Notes were used to settle a senior secured bridge facility agreement entered into by Hellas V on 31 January 2006. This bridge facility was cancelled following the settlement.

(ii) On 7 October 2005, Hellas III issued senior notes (the “Senior Notes”) with a principal amount of €355.0 million. The Senior Notes mature on 15 October 2013 and bear interest at a fixed rate per annum of 8.50%. The Senior Notes were issued under an indenture dated as of 7 October 2005, as supplemented on 31 January 2006 and amended and restated as of 18 December 2006, between, among others, Hellas III and the Bank of New York, as trustee.

(iii) On 21 December 2006, Hellas II issued Euro-denominated floating rate subordinated notes (the “Euro Subordinated Notes”) with a principal amount of €960.0 million and US dollar-denominated floating rate subordinated notes (the “Dollar Subordinated Notes”) with a principal amount of US$275.0 million (collectively referred to as the “Subordinated Notes”) in accordance with an indenture agreement dated 21 December 2006 among Hellas II, The Bank of New York, as trustee and Deutsche Bank AG as security agent. The Euro Subordinated Notes bear interest at a rate per annum, reset quarterly, equal to EURIBOR plus 6.0% and the Dollar Subordinated Notes bear interest at a rate per annum, reset quarterly, equal to LIBOR plus 5.75%. The Subordinated Notes mature on 15 January 2015.

(iv) A senior subscription agreement (the “Revolving Credit Facility”) was entered into on 3 April 2005 and subsequently amended and restated on 15 July 2005, 12 September 2005, 31 January 2006, 21 December 2006 and 20 April 2007 (the Super Priority Subscription Agreement) and most recently on 17 December 2007 between, among others, Hellas V and WIND Hellas as borrowers and J.P. Morgan Europe Limited as issuing bank, agent and security agent. The Revolving Credit Facility initially provided for commitments of up to €250 million in the form of a revolving facility and a domestic facility, which commitments were automatically reduced to €200 million upon consummation of the cash-out merger of WIND Hellas with and into Troy GAC Telecommunications S.A on 3 November 2005. The facility was further reduced to €150 million on 20 April 2007, the closing date of the acquisition of Hellas by Weather Investments S.p.A. Pursuant to the most recent amendment on 17 December 2007, the facility was increased by €100 million to a total of €250 million, in order to fund the acquisition of WIND PPC Holding N.V. The Revolving Credit Facility matures on 3 April 2012 and bears interest at a rate of EURIBOR plus a margin ranging from 1.5% to 2.25%. As of 30 June 2009 €250 million was drawn under this facility. The Revolving Credit Facility is guaranteed by Hellas II, Hellas IV, Hellas V, Hellas VI and WIND Hellas.

(v) As at 31 December 2007, WIND Hellas obtained a bond loan totalling €13.25 million from a local Greek financial institution for the expansion of its network infrastructure. This bond loan bears interest at EURIBOR plus 1.75% and the principal amount is payable over a four year period in equal annual instalments. As of 30 June 2009, the amount outstanding is €9.93 million.


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Hellas III and Hellas V obtained consents from the holders of the Senior Notes and the Senior Secured Notes, respectively, and Hellas V has obtained waivers and consent from creditors under the Revolving Credit Facility to permit the issuance of €97.25 million of Senior Secured Notes and the Subordinated Notes on 21 December 2006.

On 2 March 2007, Hellas II, Hellas III and Hellas V completed a consent solicitation process, having obtained consents from the holders of the Subordinated Notes, the Senior Notes and the Senior Secured Notes, respectively, to among other things, permit the one-time waiver of the change of control covenant of each of (i) the amended and restated indenture dated 18 December 2006 (the “Senior Secured Indenture”), among Hellas V, the Guarantors as defined therein, The Bank of New York and others, pursuant to which the Senior Secured Notes were issued, (ii) the indenture dated 21 December 2006 (the “Subordinated Indenture”), among Hellas II, The Bank of New York and others, pursuant to which the Subordinated Notes were issued and (iii) the amended and restated indenture dated 18 December 2006 (the “Senior Indenture”), among Hellas III, the Guarantors as defined therein, the Bank of New York and others, pursuant to which the Senior Notes were issued which would otherwise have required the relevant company to make a change of control offer upon completion of the proposed sale by the sellers of Hellas to Weather Investments S.p.A..

The Senior Secured Notes are guaranteed by Hellas II and certain of its subsidiaries, including WIND Hellas on a senior basis and are secured by liens on substantially all of the assets of Hellas II and certain of its subsidiaries, including WIND Hellas. The Senior Notes are guaranteed by Hellas II and certain of its subsidiaries, including WIND Hellas, on a senior subordinated basis and are secured by junior liens on the shares of WIND Hellas, all inter-company bond loans owed to Hellas III and the bank accounts of Hellas III. The Subordinated Notes are secured by liens over certain equity interests in Hellas II.

Transaction costs directly related to the issuance of the Senior Notes, the Senior Secured Notes, the Subordinated Notes and the Revolving Credit Facility have been considered as reductions in the proceeds from these issuances and are amortized over the life of the debt instruments using the effective interest method.

The Senior Secured Notes and the Subordinated Notes (collectively, the “Notes”) have been issued under the Senior Secured Indenture and the Subordinated Indenture, respectively, among Hellas V and the Senior Secured Guarantors, and Hellas II, as applicable, the Senior Secured Trustee or the Subordinated Trustees, respectively, and the Security Agent (collectively, the "Indentures").

The Indentures contain covenants including, among others, the following restrictions:

incur or guarantee additional indebtedness;

pay dividends or make other distributions or repurchase or redeem the Company’s stock;

make investments or other restricted payments;

create liens;

enter into certain transactions with affiliates;

enter into agreements that restrict the Company’s restricted subsidiaries' ability to pay dividends; and

consolidate, merge or sell all or substantially all of the Company’s assets.


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If an event of default of the covenants and the continuance of the default, the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an event of default relating to certain events of bankruptcy, insolvency or reorganization of the parent guarantor occurs and is continuing, the principal of and interest on all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences. Further to the abovementioned covenants, the Revolving Credit Facility contains various covenants substantially similar to the covenants in the indentures governing the Senior Secured Notes, the Senior Notes and the Subordinated Notes. In addition, the Revolving Credit Facility contains a financial covenant relating to the maintenance of the ratio of net senior secured debt to consolidated earnings before income taxes depreciation and amortization of Hellas II and certain of its subsidiaries which is tested quarterly. As at 30 June 2009, the Company is in compliance with all covenants.

The Company’s assets that have been pledged as security for financial liabilities as of 30 June 2009 amount to €755 million and comprise of trade receivable (€106 million), inventories (€11 million), cash (€32 million) and property plant and equipment (€606 million).

For finance expenses incurred for the Company’s financial liabilities for the six months ended 30 June 2009 and 2008, refer to note 12.

(b) Related party borrowing Included in non-current financing from related parties are the preferred equity certificates (“PECs”) issued to Hellas I. On 21 December 2006, the Company issued PECs with a par value of €191.1 million. The accrued interest on the PECs is determined with reference to the interest rate earned on PIK Notes issued by Hellas Telecommunications Finance SCA, a subsidiary of Hellas I, of three-month EURIBOR plus 8%. These outstanding PECs have a mandatory redemption date of 21 December 2036 at a redemption price equal to the sum of the par value for each outstanding PEC and accrued interest earned. During 2009 and 2008, no new PECs were issued by the Company. At 30 June 2009 and 31 December 2008, the total outstanding PECs, including accrued interest, amounted to €257.6 million and €244.9 million, respectively (note 24). Interest expense incurred for the PECs for the six months ended 30 June 2009 and 2008 amounted to €12.7 million and €13.8 million, respectively and are included in the caption Interest expense on bond and bank borrowings in note 12. The amounts included under current financial liabilities concern cash advances and payments made on behalf of the Company by related parties, and as of 30 June, 2009 amounted €2.9 million (note 24).


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(c) Derivatives liabilities

30 June 2009

(unaudited)

31 December 2008 Interest rate swaps 65,450 32,126 Cross currency interest rate swaps 18,854 18,237 Total 84,304 50,363

As at 30 June 2009, the Company had the following derivative financial liabilities outstanding which are described as follows:

i. Three interest rate swap contracts with notional amounts of €1,125 million. The notional amounts indicated are effective to 14 October 2010. These amounts are subsequently reduced to €550 million effective 15 October 2010 to 15 October 2012. These contracts were entered into in October 2005.

ii. Four interest rate swap contracts with notional amounts of €1,057.25 million. The notional amounts indicated are effective to 15 October 2009. These amounts are subsequently reduced to €530 million effective 15 October 2009 to 15 October 2012. These contracts were initially entered into by the Company in December 2006 with a total notional amount of €1,060 million and in January 2007, the notional amounts of two of these contracts were amended from €100 million to €97.25 million, while the other terms remained unchanged.

iii. Two cross-currency interest rate swap contracts with notional amounts of €210 million. The notional amounts indicated are effective to 15 January 2010. These contracts were initially entered into by the Company in December 2006 as one cross-currency interest rate swap contract and were subsequently amended in January 2007 to split them into two contracts. All other terms remained the same.

The above contracts were entered into by the Company in order to mitigate its exposure to interest and exchange rate fluctuations associated with its variable rate financial liabilities.

The first three interest rate swap contracts qualified for hedge accounting (cash flow hedges) up to August 2006 and the resulting gains or losses, net of tax impact, from the valuation of the derivatives up to that date (net gain of €16.5 million) were reflected directly within equity in 2006. Starting September 2006, the Company revoked the designation of the swap contracts as a cash flow hedge and any further changes in their fair value has been included in finance income in the condensed consolidated interim statement of comprehensive income (note 12).


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23. OTHER PAYABLES:


31 December 2008 Social security payables 1,550 3,345 Personnel payables 7,150 5,849 Due to local authorities 17,629 16,840 Prepaid traffic to be realized 19,934 24,024 Deferred income 22,042 21,981 Other payables due to related parties (note 24) - 187,695 Current portion of asset retirement obligation provision 1,895 1,495 Other 21,665 22,432 Total 91,865 283,661

Other payables due to related parties was settled by the Company with an issuance of equity amounting to €179.4 million (note 21).

24. AMOUNTS DUE FROM/ TO RELATED COMPANIES:

Parent and ultimate controlling party

The ultimate controlling party of the Company is Weather Investments S.p.A.. The following table provides the total amount of transactions, which have been entered into with related parties for the relevant financial period. The terms and conditions of the transactions with these related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-related entities on an arm’s length basis.

Amounts owed by related parties included in trade receivables 30 June 2009

(unaudited)

31 December 2008 Subsidiary of shareholder of Hellas - WIND Telecommunicazioni S.p.A. 4,480 713 Subsidiary of shareholder of Hellas - WIND International Services 4,226 - Subsidiary of shareholder of Hellas - Mobinil 52 12 Subsidiary of shareholder of Hellas - Orascom Algeria 8 5 Subsidiary of shareholder of Hellas - Orascom Tunisia 1 1 Total 8,767 731

Amounts owed by related parties included in other receivables 30 June 2009

(unaudited)

31 December 2008 Shareholder of Hellas and ultimate parent company - Weather Investments S.p.A. - 21

Subsidiary of shareholder of Hellas - WIND Telecommunicazioni S.p.A. - 1,659 Total - 1,680


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Amounts owed to related parties included in trade payables 30 June 2009

(unaudited)

31 December 2008 Shareholder of Hellas and ultimate parent company - Weather Investments S.p.A. 2,975 1,065

Subsidiary of shareholder of Hellas - WIND Telecommunicazioni S.p.A. 9,601 563 Subsidiary of shareholder of Hellas - WIND International Services 795 - Subsidiary of shareholder of Hellas - Mobinil - 40 Subsidiary of shareholder of Hellas - Orascom Algeria 1 4 Subsidiary of shareholder of Hellas - Orascom Tunisia 7 5 Total 13,379 1,677

Amounts owed to related parties included in other payables 30 June 2009

(unaudited)

31 December 2008 Parent company - Hellas I (note 23) - 179,430 Subsidiary of shareholder of Hellas - WIND Telecommunicazioni S.p.A. - 8,265 Total - 187,695

Services to related parties


(unaudited)

six months ended 30 June 2008 (unaudited))

Subsidiary of shareholder of Hellas - WIND Telecommunicazioni S.p.A. (i) 2,796 4,323 Subsidiary of shareholder of Hellas - WIND International Services (i) 4,226 - Subsidiary of shareholder of Hellas - Mobinil 51 30 Subsidiary of shareholder of Hellas - Orascom Algeria 6 7 Subsidiary of shareholder of Hellas - Orascom Tunisia 2 4 Total 7,081 4,364 (i) the transactions relate to telecommunication and other services

Services from related parties


(unaudited)


(unaudited) Shareholder of Hellas and ultimate parent company - Weather Investments S.p.A. (i) 2,031 2,021

Subsidiary of shareholder of Hellas - WIND Telecommunicazioni S.p.A. (ii) 1,400 858 Subsidiary of shareholder of Hellas - WIND International Services (ii) 795 - Subsidiary of shareholder of Hellas - Mobinil 123 238 Subsidiary of shareholder of Hellas - Orascom Algeria 5 10 Subsidiary of shareholder of Hellas - Orascom Tunisia 17 18 Total 4,371 3,145 (i) the transactions relate to consulting services (ii) the transactions relate to telecommunication services and other expenses


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Amounts owed by related parties included in financial assets


(unaudited)

31 December 2008 Ultimate parent company - Hellas 28 25 Parent company - Hellas I 1,084 1,036 Subsidiary of parent - Hellas Finance 10 10 Total 1,122 1,071

Amounts owed to related parties included in financial liabilities


(unaudited)

31 December 2008 Shareholder of Hellas and ultimate parent company - Weather Investments S.p.A. 2,731 2,733

Ultimate parent company – Hellas 120 120 Parent company - Hellas I (note 22) (i) 257,648 244,971 Subsidiary of shareholder of Hellas - Weather Capital Sarl (ii) - 1,509 Total 260,499 249,333 (i) For finance expenses incurred for related parties for the six months ended 30 June 2009 and 2008, respectively refer to note 22 (ii) Unsecured bond loan, interest bearing at three month EURIBOR plus 2.5%. The bond loan matured on 24 November 2012 which was paid in the first quarter of 2009

Compensation of key management personnel of the Company


(unaudited)


(unaudited) Short term employee benefits (salaries, employers' contributions, bonuses) 4,736 5,863

Outstanding balances are unsecured and settlement occurs in cash. 25. COMMITMENTS AND CONTINGENCIES:

Commitments Capital commitments: The Company has a number of outstanding capital commitments on supplier contracts which at 30 June 2009 amounted to approximately €40.0 million.

Contingent Liabilities

There have been no significant changes in the contingent liabilities reported in the notes to the consolidated financial statements as at and for the year ended 31 December 2008.

The Company has outstanding letters of bank guarantees amounting to approximately €23.8 million as at 30 June 2009.


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26. SUBSEQUENT EVENTS:

With respects to the Vassilias litigation case outstanding, the Court of First Instance issued its court decision which indicated that the Company should pay Vassilias an amount of approximately €260 thousand. Both the parties will appeal the decision.

On 13 August 2009, Hellas II head office and the address for all notices or communications for the purposes of the indenture dated December 21, 2006 among the Issuer, The Bank of New York Mellon and others, pursuant to which the Notes were issued, has moved from 12, rue Guillaume Kroll, L-1882 Luxembourg to Suite 304, New Broad Street House, 35 New Broad Street, London EC2M 1NH, United Kingdom.

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Independent Auditors’ Report on Review of Interim Financial Information

To the Shareholders of Hellas Telecommunications II S.C.A.:

Introduction We have reviewed the accompanying condensed consolidated interim statement of financial position of Hellas Telecommunications II S.C.A. and its subsidiaries (the “Company”) as at 30 June 2009, the condensed consolidated interim statements of comprehensive income, changes in equity and cash flows for the six month period then ended (the “Condensed Consolidated Interim Financial Information”). Management is responsible for the preparation and presentation of this Condensed Consolidated Interim Financial Information in accordance with IAS 34 “Interim Financial Reporting”, as adopted in the European Union. Our responsibility is to express a conclusion on this Condensed Consolidated Interim Financial Information based on our review.

Scope of review We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying Condensed Consolidated Interim Financial Information as at 30 June 2009 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting, as adopted in the European Union.

Emphasis of matter Without qualifying our review opinion, we draw your attention to Note 5 of the Condensed Consolidated Interim Financial Information which describes that during the second quarter of 2009, the Company experienced a significant revenue decline as a result of the following factors: (1) the significant competitive market leading to price reductions, (2) the regulatory reduction in interconnection tariffs and (3) the existing economic crisis. These factors have not allowed the Company to generate sufficient revenues and cash flows to sustain its operations and therefore the Company has had to rely on financing activities to supplement cash from operations. Furthermore, due to the fact that the Company is highly leveraged, the above factors may constrain the Company’s ability to meet its broader strategic objectives as well as its future interest payments which may lead to a potential risk of default of its financial debt covenant. These conditions, along with other matters described in Notes 5 and 18 to the Condensed Consolidated Interim Financial Information, indicates the existence of a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern.

/s/KPMG Certified Auditors A.E.

Athens, Greece 31 August 2009

HELLAS TELECOMMUNICATIONS II, SCA - WIND.gr · 2011-05-11 · Hellas III, Hellas IV, Hellas V and...

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