ANNUAL REPORT For the year 1 January 2019 to 31 December 2019 According to Law 3556/2007 In accordance with the International Financial Reporting Standards as adopted by the European Union Forthnet S.A. Registration No S.A. 34461/06/Β/95/94 G.E.M.I. 77127927000 Scientific Technological Park of Crete Vassilika Vouton, Iraklion Crete 71003 http://www.forthnet.gr Page 1 from 117 HELLENIC COMPANY FOR TELECOMMUNICATIONS AND TELEMATIC APPLICATIONS S.A. Annual Financial Report for the year ended December 31, 2019 (amounts in Euro unless stated otherwise) INDEX TO THE ANNUAL REPORT STATEMENTS OF THE MEMBERS OF THE BOARD OF DIRECTORS ................................................................................................................................................... 3 BOARD OF DIRECTORS’ REPORT ON ΤΗΕ FINANCIAL STATEMENTS ................................................................................................................................................ 4 1. PERFORMANCE AND KEY FINANCIAL DATA .................................................................................................................................................................. 4 2. SIGNIFICANT EVENTS FOR THE YEAR ENDED 2019 ....................................................................................................................................................... 7 3. PROSPECTS FOR THE NEXT FINANCIAL YEAR 2020 ....................................................................................................................................................... 9 4. PRINCIPAL RISKS AND UNCERTAINTIES FOR 2020 .......................................................................................................................................................10 5. COVID-19 – IMPACT ASSESSMENT ..............................................................................................................................................................................14 6. NON-FINANCIAL REPORT ............................................................................................................................................................................................18 7. ALTERNATIVE NON-PERFORMANCE MEASURES ("APMs") ..........................................................................................................................................23 8. CORPORATE GOVERNANCE STATEMENT ON THE BASIS OF ARTICLES 152 & 153 OF L. 4548/2018.............................................................................24 9. RELATED PARTIES ........................................................................................................................................................................................................37 10. BOARD OF DIRECTORS’ EXPLANATORY REPORT (according to Article 4(7)&(8) of Law 3556/2007) ............................................................................39 INDEPENDENT AUDITOR’S REPORT ..........................................................................................................................................................................................44 STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2019 ..............................................................................................................51 STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2019 ................................................................................................................................................52 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2019 .......................................................................................................................53 CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2019 ..........................................................................................................................................55 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 ..................................................................................................................56 1. CORPORATE INFORMATION: .......................................................................................................................................................................................56 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS ...............................................................................................................................................58 3. BASIS OF CONSOLIDATION ..........................................................................................................................................................................................58 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES...................................................................................................................................................58 5. CHANGES IN ACCOUNTING POLICIES ..........................................................................................................................................................................71 6. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES .......................................................................................................................................76 7. PRIOR YEAR ERROR CORRECTION ...............................................................................................................................................................................78 8. GOING CONCERN ........................................................................................................................................................................................................79 9. GROUP SEGMENT INFORMATION ...............................................................................................................................................................................81 10. REVENUE FROM CONTRACTS WITH CUSTOMERS .......................................................................................................................................................81 11. PAYROLL AND RELATED COSTS ...................................................................................................................................................................................81 12. SUNDRY EXPENSES ......................................................................................................................................................................................................82 13. DEPRECIATION AND AMORTISATION ..........................................................................................................................................................................82 14. FINANCIAL INCOME / (EXPENSES) ...............................................................................................................................................................................82 15. INCOME TAXES ............................................................................................................................................................................................................83 16. LOSS PER SHARE ..........................................................................................................................................................................................................87 17. PROPERTY, PLANT AND EQUIPMENT ..........................................................................................................................................................................87 18. INTANGIBLE ASSETS ....................................................................................................................................................................................................89 19. CONTRACTS COST .......................................................................................................................................................................................................90 20. GOODWILL ..................................................................................................................................................................................................................91 21. INVESTMENTS IN SUBSIDIARIES ..................................................................................................................................................................................92 22. OTHER NON CURRENT ASSETS ....................................................................................................................................................................................93 23. OTHER FINANCIAL ASSETS ...........................................................................................................................................................................................93 24. INVENTORIES ..............................................................................................................................................................................................................93 25. PROGRAMME AND FILM RIGHTS ................................................................................................................................................................................93 26. TRADE RECEIVABLES ...................................................................................................................................................................................................94