Condensed Consolidated Interim Financial Statements ... - PrimeTel

Condensed Consolidated InterimFinancial StatementsFor the period ended 30 June 20120

ContentsCondensed Consolidated Interim Financial StatementsFor the period ended 30 June 20122 Board of Directors, professional advisers and registered office3 Interim management statement4 Condensed consolidated statement of comprehensive income5 Condensed consolidated statement of financial position6 Condensed consolidated statement of changes in equity7 Condensed consolidated statement of cash flows8 Notes to the condensed consolidated financial statements21 Declaration of the members of the Board of Directors1

Board of Directors , Professional Advisers and Registered OfficeBoard of DirectorsPericles Manglis (Chairman)Hermes Stephanou (Managing Director)Philippos VatiliotisNicos EllinasIoannis TirkidesAndreas ChristodoulidesAndreas EleftheriadesAlexis PhotiadesSecretaryA.A.A. Regent Consultants LimitedIndependent AuditorsKPMG LimitedLegal AdvisorsChrysses Demetriades & CoAndreas KarydesBankersBank of Cyprus Public Company LimitedRegistered office Omonias Ave 141,The Maritime Center,3045 LimassolRegistration number 1391042

INTERIM MANAGEMENT STATEMENTFor the period ended 30 June 2012The Board of Directors of Primetel Plc (“the company”) at their meeting held on 20 August 2012, examinedand approved the consolidated financial results of the Group for the six month period ended 30 June 2012,which have not been audited by the Group’s external auditors.The summarized interim consolidated financial statements for the six month period ended 30 th June 2012 wereprepared on the basis of the International Accounting Standard No.34 – “Interim Financial Statements”.Theloss per share was calculated on the basis of the loss for the period attributable to the shareholders of theholding company and the average number of shares that were issued during the period.A copy of the complete text of the summarized interim financial statements will be available to the public,without any charge, at the Company’s offices, Omonia Avenue 141, The Maritime Centre, 3045 Limassol.Financial Analysis of resultsThe results of the Group of Primetel PLC for the six months period ending 30 June 2012, compared with thecorresponding period of 2011, present an increased turnover and improved results.Despite the economic recession in the market, the turnover for the six months period has increased to €16.9million compared with €16.3 million for the corresponding period of 2011.The operating expenses have increased by 2%. The selling and administration expenses have decreased by4% as a result of austerity measures taken by the Group in 2012.The EBITDA for the six months period ending 30 June 2012 was improved compared to the correspondingperiod of 2011 , reaching €2.5 million profit compared to €1.4 million profit in the corresponding period of 2011.The financing costs are showing a significant increase of 25% as a result of the increase in borrowing as wellas the adverse terms for bank lending which prevail in the Cyprus market.The loss for the period after taxation, amounted to €2.17 million compared to €2.46 million for thecorresponding 2011 period.ProspectsThe increase in the turnover and the reduction in losses, under conditions of strong economic downturn,appear promising for the future development of the Group. The involvement in the provision of mobile servicesand the securing of exclusive rights to the home games of the football club Omonia Nicosia for the 2013-2016football seasons, create new prospects for the Group.Main risks and uncertaintiesA description of the main risks and their management is presented on note 16 of the six month financialreports.Transactions with related companiesA description of the main transactions with related companies is presented on note 12 of the six monthfinancial reports.Pericles ManglisChairmanNicosia, 20 August 20123

Condensed Consolidated Statement of Comprehensive IncomeUnauditedFor the six month period ended 30 June 2012Note1.1.2012- 1.1.2011-30.06.2012 30.06.2011€ €Turnover 4 16.852.622 16.251.237Cost of sales (9.548.086) (9.327.980)Gross Profit 7.304.536 6.923.257Other income from operations 5 186.956 139.731Administration expenses (7.125.470) (7.181.381)Selling and distribution expenses (433.961) (714.353)Other operating expenses (8.120) -Operating (loss)/profit before financingIncome/(expenses)(76.059) (832.746)Finance Income 6 39.546 47.560Finance Expenses 6 (2.075.941) (1.678.875)Net Finance Expenses (2.036.395) (1.631.315)Loss before taxation (2.112.454) (2.464.061)Taxation 7 (52.085) -Loss for the period attributable to the shareholders 8 (2.164.539) (2.464.061)Basic and fully distributed loss per share ( cents) 9 (0,57) (0,82)The notes on pages 8 to 20 form an integral part of these financial statements.4

Condensed Consolidated Statement of Changes in EquityUnauditedFor the six month period ended 30 June 2012ShareCapitalReserve fromIssue ofShares at apremiumReserve fromconversion ofshare capital intoEuroAccumulatedLossesMinorityInterest TotalNote € € € € € €Balance 1 January 2011 9.560.991 4.624.430 122.571 (10.475.269) 4.000 3.836.723Loss for the period - - - (6.356.424)- - (6.356.424)Defence contribution todeemed distribution ofdividends - - - (36.501) - (36.501)Expenses of issue of sharecapital and listing on theCyprus Stock Exchange (35,000) - (35.000)Issue of shares9.560.992 - - - - 9.560.992Balance 31 December2011 19.121.983 4.589.430 122.571 (16.868.194) 4.000 6.969.790Balance 1 January 201219.121.983 4.589.430 122.571 (16.868.194) 4.000 6.969.790Loss for the period - - - (2.164.539)- - (2.164.539)Balance 30 June 2012 19.121.983 4.589.430 122.571 (19.032.733) 4.000 4.805.251The notes on pages 8 to 20 form an integral part of these financial statements.6

Condensed Consolidated Statement of Cash FlowsUnauditedFor the six month period ended 30 June 20121.1.2012- 1.1.2011-30.06.2012 30.06.2011€ €NoteCash flow from operating activitiesLoss for the period (2.164.539) (2.464.061)Adjustments for:Depreciation of property plant and equipment 2.058.513 1.813.404Amortization of computer software 484.620 417.986Amortizing of rights of use 2.810.020 2.607.999Loss/(profit) from the sale of property plant and equipment 8.120 (1.443)Interest income (39.546) (47.560)Interest paid 2.009.250 1.593.875Taxation 52.085 -Cash flows from operations before working capital changes 5.218.523 3.920.200(Increase)/Decrease in inventories (107.492) 42.353Decrease in trade and other receivables 303.154 1.647.937Decrease in trade and other payables (832.798) (10.665.939)Cash flow from operations 4.581.387 (5.055.449)Tax paid (52.085) 4.498Net cash from operating activities 4.529.302 (5.050.951)Cash flows from investing activitiesPayment for purchase of intangible assets 12 (1.959.819) (7.560.255)Payment for purchase of property plant and equipment 10&11 (3.321.430) (4.548.703)Proceeds from sale of property, plant and equipment 2.456 33.906Interest received 39.546 47.560Net cash used in investing activities (5.239.247) (12.027.492)Cash flows from financing activitiesIncrease of share capital - 9.560.992Proceeds from new borrowings 2.821.199 3.801.709Interest paid (2.009.250) (1.593.875)Defence contribution todeemed distribution ofdividends - (36.500)Net Cash flows from financing activities 811.949 11.732.326Net increase/(decrease) in cash and cash equivalent 102.004 (5.346.117)Cash and cash equivalents at the beginning of the period (1.736.520) (3.970.539)Cash and cash equivalents at the end of the period (1.634.516) (9.316.656)The notes on pages 8 to 20 form an integral part of these financial statements.7

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the six month period ended 30 June 20121. Incorporation and principal activitiesPrimetel Co Limited ( the “Company”) was incorporated in Cyprus on 18 June 2003 as a private company with limitedliability in accordance with the Cyprus Company Law Cap.113. Its registered office is at Omonias Avenue 141, TheMaritime Center, 3045 Limassol. On 28 March 2006 it was renamed to Primetel Limited by a special resolution .On 4 June2007 by a special resolution the Company became Public in accordance with the Companies Law Cap. 113 and wasrenamed to Primetel Public Company Limited. Then on 30 August 2007 it was renamed to Primetel PLC. On 14 July theCompany entered the Alternative Market of the Cyprus Stock Exchange.The principal activities of the Company continue to be the services of Voice , Data and video through autonomous fiberopticnetwork. The fixed and mobile telephony , the broadband network and the Digital Television are some of the servicesprovided by the Company to individuals , enterprises and other telecommunications carriers as well as to companies thatprovide network service in Cyprus.The principal activities of the subsidiary M & S Madproperties Limited is the holding of leasehold land, whereas itssubsidiary Silver Link Investments Limited remained dormant.2. Unaudited condensed consolidated interim financial statementsThe condensed consolidated interim financial statements for the period from 1 st January 2012 to 30 June 2012 have notbeen audited by the external auditors.3. Basis of preparation(a) Statement of complianceThe unaudited Condensed Consolidated Interim Financial Statements of the Group for the six month period that ended on30 June 2012 consist of the Company Primetel PLC and the dependent Silverlink Investments Limited and M&SMedproperties Limited ( they are together reported as the “the Group”) and they are prepared according to the providencesof International Accountant Model No 34”Intermediary Economic Financial Statements”, the providences of the Law ofCyprus companies chapter 113 , as well as with providences of Values and Cyprus Stock Exchange Laws andRegulations.The unaudited Condensed Consolidated Financial Statements should be read in connection with the auditedFinancial Statements for the year ended on the 31 st December 2011. These Condensed Consolidated FinancialStatements were approved by the Board of Directors of the Company on the 20 th August 2012.(b) Basis of presentationThe condensed consolidated interim financial statements have been prepared under the historical cost conversion.(c) Functional and presentation currencyThe condensed consolidated interim financial statements are presented in Euro (€), which is the functional currency andpresentation of the group.(d) Significant accounting policiesThe accounting principles and the calculation methods applied for the preparation of these Condensed ConsolidatedInterim Financial Statements for the period ended 30 th June 2012 are the same as those applied by the Group in itsConsolidated Financial Statements for the year ended on 31 st December 2011.(e) Adoption of new and revised International Financial Reporting StandardsThe Group has adopted all the new and revised models and interpretations which are related with its operations and areeffective for accounting periods that begin on the 1 st January 2012. This adoption has not implicated any importantchanges in the accounting principles of the Group.8

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the period ended 30 June 20124 Operating SegmentsThe group has three basic operating segments:1. Services provided to Home customers2. Services provided to Corporate customers3. Services provided to other Telecom ProvidersProviders ofTotalHome CustomersBusiness Customers telecommunications1.1.12- 1.1.11- 1.1.12- 1.1.11- 1.1.12- 1.1.11- 1.1.12 1.1.1130.06.12 30.06.11 30.06.12 30.06.11 30.06.12 30.06.11 30.06.12 30.06.11€ € € € € € € €Turnover 9.149.320 9.197.468 4.007.516 4.061.598 3.695.786 2.992.171 16.852.622 16.251.237Gross Profit 7.304.536 6.923.257Other operating income 186.956 139.731Selling expenses (433.961) (714.353)Administration expenses (1.751.317) (2.341.992)Other operating expenses (8.120) -Depreciation (5.374.153) (4.839.389)Operating lossBefore net financing expenses(76.059) (832.746)Net financing expenses (2.036.395) (1.631.315)Loss before taxation (2.112.454) (2.464.061)Taxation (52.085) -Loss attributable to the(2.164.539) (2.464.061)shareholders of the companyTotal assets 73.808.216 75.614.0969

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the six month period ended 30 June 20125. Other operating income1.1.2012- 1.1.2011-30.06.2012 30.06.2011€ €Subsidies received from the E.U 186.956 138.288Profit from the sale of property plant and equipment - 1.443186.956 139.7316. Finance income and expenses1.1.2012- 1.1.2011-30.06.2012 30.06.2011€ €Finance incomeBank interest 19 24From related companies - 22.781Realized exchange gain 39.527 24.75539.546 47.560Finance expensesInterest payableOn loans 1.350.982 848.940On bonds 170.625 169.688On bank overdrafts 52.747 266.438To related companies 298.977 176.729Other banking rights 135.919 132.080Bad debts provision - general 66.691 85.000.(2.075.941) (1.678.875)1010

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the six period ended 30 June 20127. Taxation1.1.2012- 1.1.2011-30.06.2012 30.06.2011€ €Special contribution to the defense fund for prior years 52.085 -52.085 -The Group is not subject to taxation due to tax losses incurred during the current season and tax losses which arecarried forward from previous years. Under the existing tax legislation losses are allowed to be offset against futureprofits.8. Loss for the period attributable to shareholders1.1.2012- 1.1.2011-30.6.2012 30.6.2011€ €Loss for the period attributable to shareholders is calculated after charge for:Staff costs 2.826.627 3.162.627DepreciationPlant, machinery and equipment 2.058.513 1.813.404Intangible assets and rights of use 3.294.640 3.025.985Rent payable 340.088 367.3049. Loss per share1.1.2012- 1.1.2011-30.06.2012 30.06.2011€ €Loss attributable to the shareholders (2.164.539) (2.464.061)Weighted average number of ordinary shares issued during the year 382.439.656 300.194.268Basic and fully dilutedLoss per chare (cent)(0,57) (0,82)

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the six period ended 30 June 201210. Property, plant and equipmentYear 2011CostAdditions andImprovement toLeaseholdbuildingsLand andbuildingsUnderconstructionFiber-opticNetworkandtelecommunicationequipmentMotorVehiclesMachinery,plant ,furnitureand fittings andofficeequipmentComputerandequipment€ € € € € € €Balance 1 January 2011 1.504.769 3.637.691 11.726.481 627.314 13.079.799 11.923.732 42.499.786Additions 459.545 - 2.526.782 15.442 2.157.192 377.039 5.896.000Disposals - - - (9.689) (33.972) (264) (43.925)Transfer 2.720.252 (2.720.252) (603.006) - 603.006 - -TotalBalance 31 December 2011 4.684.566 917.439 13.650.257 633.067 16.166.025 12.300.507 48.351.861DepreciationBalance 1 January 2011 159.939 - 1.288.640 397.952 2.629.738 5.728.149 10.204.418Transfer - (121.346) - 121.346 -Charge for the year 110.242 - 492.523 93.095 1.307.240 1.710.673 3.713.773Disposals - - - (7.714) (3.468) (157) (11.339)Balance 31 December 2011 270.181 - 1.659.817 483.333 4.054.856 7.438.665 13.906.852Net book valueBalance 31 December 2011 4.4 14.385 917.439 11.990.440 149.734 12.111.169 4.861.842 34.445.00912

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the six monthperiod ended 30 June 201210. Property, plant and equipment30.06.2012CostAdditions andImprovement toLeaseholdbuildingsLand andbuildingsUnderconstructionFiber-opticNetworkandtelecommunicationequipmentMotorVehiclesMachinery,plant ,furnitureand fittings andofficeequipmentComputerandequipment€ € € € € € €TotalBalance 1 January 2012 4.684.566 917.439 13.650.257 633.067 16.166.025 12.300.507 48.351.861Additions 233.628 - 674.795 - 2.240.259 172.748 3.321.430Disposals/discards - - - (11.043) (9.535) (993.900) (1.014.478)Balance 30 June 2012 4.695.401 917.439 14.325.052 622.024 18.396.749 11.479.355 50.658.813DepreciationBalance1 January 2012 270.181 - 1.659.817 483.333 4.054.856 7.438.665 13.906.852Charge for the year 88.617 - 271.913 33.061 908.655 756.267 2.058513Disposals/discards - - - (9.418) (8.351) (986.133) (1.003.902)Balance 30 June 2012 358.798 - 1.931.730 506.976 4.955.160 7.208.799 14.961.463Net book valueBalance 30 June 2012 4.336.603 917.439 12.393.322 115.048 13.441.589 4.270.556 35.697.350

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the six month period ended 30 June 201211. Intangible assetsYear 2011InternallygeneratedsoftwareRights ofuse Total€ € €CostBalance 1 January 2011 6.771.267 28.794.311 35.565.578Additions 1.153.980 7.936.478 9.090.458Balance 31 December 2011 7.925.247 36.730.789 44.656.036AmortisationBalance 1 January 2011 2.653.318 7.045.352 9.698.670Amortisation for the year 857.957 5.620.676 6.478.633Balance 31 December 2011 3.511.275 12.666.028 16.177.303Net book valueBalance 31 December 2011 4.413.972 24.064.761 28.478.73330.06.2012InternallygeneratedsoftwareRights ofuse Total€ € €CostBalance 1 January 2012 7.925.247 36.730.789 44.656.036Additions 330.654 1.629.165 1.959.819Balance 30 June 2012 8.255.901 38.359.954 46.615.855AmortisationBalance 1 January 2012 3.511.275 12.666.028 16.177.303Amortisation for the period 484.620 2.810.020 3.294.640Balance 30 June 2012 3.995.895 15.476.048 19.471.943Net book valueBalance 30 June 2012 4.260.006 22.883.906 27.143.91214

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the six month period ended 30 June 201212. Related party transactionsα. Transactions(i) Sales of services1.1.2012-30.06.20121.1.2011-30.06.2011€ €- -To related partiesFrancoudi & Stephanou Limited 9.535 9.559Aeolos Travel 81.374 69.313Velister Limited 30.600 -Teledev East Limited 962 962Aeolos (Cyprus) Travel Limited 8 42Aeolos Swiss (CapoBay) Limited 1.675 15.337Teleset Network Public Company Limited -Francoudi & Stephanou Insurance Ltd 3.210 3.211Hollandia Aviation Ltd 295 260Photos Photiades Limited 69 69Photos Photiades Distributors Limited 106 2.494Photos Photiades Brewery Limited 302 5.716Photos Photiades Group Limited 138 199Lametus Holdings Limited - 18.482Agios Andronikos Development Companies 5.906 4.982134.180 130.626The sales to the subsidiary and to the related companies were made on commercial terms and condtions.(ii) Purchase of products and services1.1.2012-30.06.20121.1.2011-30.06.2011Nature of transactions € €From related partiesTeledev East Limited Rent and electricity 58.434 58.434Photos Photiades Distributors Ltd Drinks 94 76Francoudi & Stephanou Insurance Ltd Insurance 94.696 92.714Francoudi & Stephanou LimitedServices , commonexpenses 219.668 209.391Logica Development Limited Rent 187.372 223.826Lametus Holdings Limited Advisory services 86.700 102.000Aeolos Cyprus Travel Limited Tickets overseas - 18.619Aeolos Travel Rent 3.159 34Aeolos Swiss (Capo Bay) Limited Services 7.224Beluggaweb Limited Services 31.353 -The HNS Property trust Rent 7.494 -Alert Management Services LTD Services 708 -696.902 705.094

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the six month period ended 30 June 2012(i) Amounts receivable from related companiesNature of 30.06.2012 31.12.2011Name Transaction € €Aeolos Travel Limited Commercial 14.967 42,693Aeolos Swiss (Capo Bay) Limited Commercial 20.194 28,303R&D Primetel Limited Commercial 1.610 1.610ΗΝS Limited Commercial 314 314Hollandia Aviation Limited Commercial 40 140Teledev East Limited Commercial 197.800 155.361Thunderworx Limited (Μέτοχος) Financing 550.640 547.257Photos Photiades Group Limited Commercial 81 114Photos Photiades Limited Commercial 519 439Photos Photiades Brewery Limited Commercial 191 11.584Photos Photiades Distributors Limited Commercial - 1.325Aeolos Cyprus Travel Commercial 658 649Ayios Andronicos Development Co Limited Commercial 3.278 3.191F&S Marina Limited Commercial 107 459Elvora Holdings Limited Commercial 4.154 16.855Repina Holdings Limited Commercial 412 203M&S Medproperties Ltd Commercial 3.435 -Thundertel SA Commercial 1.100 -Velister Limited Commercial 17901 11.730Velister Limited Financing 250000 250.0001.067.400 1,072,227(ii) Amounts payable to related companiesNature 30.06.2012 31.12.2011Name of transaction € €Francoudi & Stephanou Insurance Ltd Commercial 8.111 149.789Francoudi & Stephanou Limited Commercial 49.223 23.779Logica Development Limited Commercial 30.157 138.724Lametus Holdings Limited Commercial 1.275.274 1,299.778The HNS Property trust Commercial 6.763 12.028Teleset Limited Commercial - 1Beluggaweb Limited Commercial 35.079 18.114Two Serve Airport Services Ltd Commercial - -Photos Photiades Distributors Limited Commercial 1.617 -1.406.223 1.642.213Τhe above amounts are payable within one year and were provided interest free.13. Share capitalAuthorised30.06.2012 30.06.2012 31.12.2011 31.12.2011Number ofshares €Number ofshares €Ordinary shares of € 0,05 each 850.000.000 42.500.000 850.000.000 42.500.000Issued and fully paidBalance 1 January 382.439.656 19.121.983 191.219.828 9.560.991Issue of shares - - 191.219.828 9.560.992Balance 30 June 2012 382.439.656 19.121.983 382.439.656 19.121.983.16

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the six month period ended 30 June 201214. Long Term Loans and bank overdraft accounts30.06.2012 31.12.2011Non current liabilities € €(i) Long term bank loans(i) Loans repayble until 2016 485.455 508.817(ii) Loans repayable until 2020(See note below)43.307.769 35.286.83043.793.22435.795.647(iii) Loans from related parties 3.027.481 8.206.95646.820.705 44.002.603Amount payable within one year (4.151.102) (3.142.986)42.669.603 40.859.617The repayments of the long term amounts of these loans are scheduled as follows:30.06.2012 31.12.2011€ €Between one and two years 5.800.396 4.148.790Between two and five years 21.047.312 20.907.027More than five years 15.821.895 15.803.80042.669.603 40.859.617Current liabilitiesBank current accounts 2.268.983 2.202.701Current portion of long term loans 4.151.102 3.142.986Note:6.420.085 5.345.687On 5 March 2012 the Company entered into a new agreement with Bank of Cyprus Public Company Limited regardingthe merger of its loans , as well as the two loans obtained by its affiliated companies on behalf of the Company on aloan with new repayment terms.Interest ratesThe bank loans and the bank overdrafts bear interest at the following rates:- For bank overdrafts:(i) 6 months Euribor + 1,75%(ii) Base rate of the Bank + 1,75%- For bank loans:(i) 6 months Euribor + 1,75%(ii) Base rate of the Bank with a margin ranging from 1,5% - 2,75%.(iii) Basic rate of the ECB + 1,5%

Notes to the Condensed Consolidated Financial StatementsUnauditedFor the six month period ended 30 June 201215 .Long Term Loans and bank overdraft accounts (continued)SecuritiesThe loans and bank overdraft accounts are secured with:Personal guarantess of Mr. Pericles Manglis for a total amount of €1.000.000.Personal guarantess of Mr. Hermes Stephanou for a total amount of €1.000.000.Personal guarantess of Mr. Hermes Stephanou as well as of Good Hope Investments Limited for theamount of €13.848.000.Personal guarantee of Mr. Pericles Manglis as well as of Ayios Andronikos Development Co. Limitedfor the amount of €9.592.000.Company Guarantee of Aeolos Swiss (Capo Bay) Limited for the amount of €5.500.000.Existing 1st mortgage on the property with registration number 2/50 in Geroskipou Pafos area , ownedby Primetel PLC for the amount of €750.000.Existing 7th and 8th mortgages on Capo Bay hotel which is owned by Aeolos Swiss (Capo Bay) Limitedfor the amount of €3.000.000 and €2.500.000 respectively.Floating charge on the assets of the Company for the amount of €15.000.000.InterestThe bank interest on loans for the period amounted to €1.350.982 (30.6.2011 € 848.940).15. Bonds30.06.2012 31.12.2011€ €500 bonds of €10.000 each 5.000.000 5.000.000Less expenses from issue of bonds (12.389) (15.486)4.987.611 4.984.514On July 21 , 2009, the Company issued 500 bonds of nominal value €10.000 each maturing on 30 June 2014.The bondscarry a fixed rate of 6,75% of the noninal value.The bonds constitute subordinated unsecured securities of the Company,which are guaranteed by Bank of Cyprus Publin Company Ltd ( “Guarantor”, “Bank”) and are ranked pari passu.The company has the right to early redemption of the bonds in full on 30 June 2011 or on any interest payment datefollowing, the purchase price as defined below , plus any accrued interest.Purchase price plus premium 2% on their nominal value with reduction of 0,5% each year:2012: €10,150 per bond2013: €10,100 per bond2014: €10,050 per bondInterestThe interest on bonds ofr the year are amounted to €170.625.18

Notes to the condensed consolidated financial statementsUnauditedFor the six month period ended 30 June 201216. Financial Management Risk(a) Financial risk factorsThe Group is exposed to the following risks from its use of financial instruments:Credit riskLiquidity riskMarket price riskCompliance riskReputation riskOperating riskLegislation riskOther risksThe Board of Directors has overall responsibility for the establishment and oversight of the risk managementframework.The Company’s risk management policies are established to identify and analyze the risks faced by the Group , to setappropriate risk limits and controls and monitor risks and adherence to limits. Financial risk management policies andsystems are reviewed regularly to reflect changes in market conditions and the Group’s activities.The policies did notchange since year end.17. Capital / contingent liabilitiesThe Group had capital/contingent liabilities as at 30 June 2012 as follows:Capital commitmentsAt 30 June 2012 the Company had capital commitments to Electricity Authority Cyprus (EAC), CYTA, ApollonPodosfero (Public) Limited, etc.,for a total amount of €12.686.614 out of which €1.193.489 (2011: €3.705.724) arecovered by bank guarantees.Further to the above in accordance with the existing agreement between the Company and EAC ,the Company willpay to EAC 3% of the net profit each year.

Notes to the condensed consolidated financial statementsUnauditedFor the six month period ended 30 June 201217. Capital/ Contingent Commitments (Cont’d)Operating lease commitmentsThe Group has committed on various contracts under non – cancellable operating leases for renting of officesand shops with the method of leasing. These leases can be cancelled only with the consent of both parties.The total commitments of the Group as at 30 June 2012 are analysed as follows:30.06.2012 31.12.2011€ €Payable with one year 578.548 541.098Payable between one and five years 547.987 496.240Capital commitments1.126.535 1.037.338Capital expenditure related to contracts signed in previous years and during the period from 1 January 2012until 30 June 2012 but not yet incurred are as follows:30.06.2011 31.12.2011€ €Capital commitments 12.250.000 13.063.12518. Shareholders holding more that 5% of the share capital30.06.2012 31.12.2011€ €Thunderworx Limited 15,30 15,30Manglis (Holdings) LimitedCelltech Limited31,9326,5531,9326,55HNS Limited 6,75 6,7519. Post balance sheet eventsThere are no material post balance sheet events.20

Declaration of members of the Directors and Company Officialsresponsible for these Financial StatementsAccording to article 10, sections (3) ( c ) and (7) of the Conditions of Transparency (Mobile Values to Negotiation inRegulated Market) Law 2007, we the members of the Board of Directors and other persons in charge of Primetel PLCfor the Condensed Consolidated Interim Financial Statements for the six month period that ended on 30 June 2012 ,we confirm that from all we know:(α) The Condensed Consolidated Interim Financial Statements that are presented in the pages 4 up to 20:(β)(i)(ii)Were prepared according to International Accountant Model [art].34 “Intermediary Economic Report”, as itwas adopted by the European Union and according to the provisions of the Article 10, section (4) the Law,andProvide a true and fair view of debit and credit balances , the financial position and profit or loss of theGroup that is included in the Condensed Consolidated Interim Financial Statements as total andThe interim management statement which is presented on page 5 provides fair assessment ( fair review) of theinformation that is required from Article 10, section (6) of the Law.The members of the board of directors…………………………………………..Pericles ManglisPresident…………………………………………..Hermes StephanouManaging Director…………………………………………..Philippos Vatiliotis…………………………………………..Nicos Ellinas…………………………………………..Ioannis Tirkides…………………………………………..Andreas Christodoulides………………………………………….Alexis Photiades…………………………………………...Alexis PhotiadesPerson responsible for the preparation of the financial statement…………………………………………..Luke HadjiloucasFinancial ManagerLimassol, 20 August 2012