3RD QUARTER 2020 – FINANCIAL REPORT for the three month period ended September 30, 2020

DIGI COMMUNICATIONS N.V. ("Digi")

(the "COMPANY")

(Digi, together with its direct and indirect consolidated subsidiaries are referred to as the "Group")

FINANCIAL REPORT (the "REPORT") for the three month period ended September 30, 2020

This Unaudited Condensed Consolidated Interim Financial Report for the period ended 30 September 2020 refers to the Unaudited Condensed Consolidated Interim Financial Statements prepared in accordance with IAS 34 "Interim Financial Reporting".

Important Information4
Cautionary Note Regarding Forward-Looking Statements 5
Operating and Market Data 5
Non-Gaap Financial Measures 6
Rounding 6
Management's Discussion and Analysis of Financial Condition and Results of Operations7
Overview 8
Recent Developments 8
Historical Results of Operations 11

Important Information

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Report are not historical facts and are forward-looking. Forward-looking statements include statements concerning our plans, expectations, projections, objectives, targets, goals, strategies, future events, future operating revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, our competitive strengths and weaknesses, our business strategy, and the trends we anticipate in the industries and the political and legal environments in which we operate and other information that is not historical information.

Words such as "believe," "anticipate," "estimate," "target," "potential," "expect," "intend," "predict," "project," "could," "should," "may," "will," "plan," "aim," "seek" and similar expressions are intended to identify forwardlooking statements, but are not the exclusive means of identifying such statements.

The forward-looking statements contained in this Report are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors, some of which are discussed below. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management's assumptions about future events may prove to be inaccurate. We caution all readers that the forward-looking statements contained in this report are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, many of which are beyond our control, and risks exist that the predictions, forecasts, projections and other forwardlooking statements will not be achieved. You should be aware that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, without limitation, various risks related to our business, risks related to regulatory matters and litigation, risks related to investments in emerging markets, risks related to our financial position as well as risks related to the notes and the related guarantee.

Any forward-looking statements are only made as of the date of this Report. Accordingly, we do not intend, and do not undertake any obligation, to update forward-looking statements set forth in this Report. You should interpret all subsequent written or oral forward-looking statements attributable to us or to persons acting on our behalf as being qualified by the cautionary statements in this Report. As a result, you should not place undue reliance on such forward-looking statements.

Operating and Market Data

Throughout this Report, we refer to persons who subscribe to one or more of our services as customers. We use the term revenue generating unit ("RGU") to designate a subscriber account of a customer in relation to one of our services. We measure RGUs at the end of each relevant period. An individual customer may represent one or several RGUs depending on the number of our services to which it subscribes. More specifically:

for our cable TV and DTH services, we count each basic package that we invoice to a customer as an RGU, without counting separately the premium add-on packages that a customer may subscribe for;
for our fixed internet and data services, we consider each subscription package to be a single RGU;
for our fixed-line telephony services, we consider each phone line that we invoice to be a separate RGU, so that a customer will represent more than one RGU if it has subscribed for more than one phone line; and
for our mobile telecommunication services we consider the following to be a separate RGU: (a) for pre-paid services, each mobile voice and mobile data SIM with active traffic in the last month of the relevant period, except for Romania where pre-paid RGUs are not included due to low usage and small number of users; and (b) for post-paid services, each separate SIM on a valid contract.

As our definition of RGUs is different for our different business lines, you should use caution when comparing RGUs between our different business lines. In addition, since RGUs can be defined differently by different companies within our industry, you should use caution in comparing our RGU figures to those of our competitors. We use the term average revenue per unit ("ARPU") to refer to the average revenue per RGU in a geographic segment or the Group as a whole, for a period by dividing the total revenue of such geographic segment, or the Group, for such period, (a) if such period is a calendar month, by the total number of RGUs invoiced for services in that calendar month; or (b) if such period is longer than a calendar month, by (i) the average number of relevant RGUs invoiced for services in that period and (ii) the number of calendar months in that period. In our ARPU calculations we do not differentiate between various types of subscription packages or the number and nature of services an individual customer subscribes for. Because we calculate ARPU differently from some of our competitors, you should use caution when comparing our ARPU figures with those of other telecommunications companies.

In this Report RGUs and ARPU numbers presented under the heading "Other" are the RGUs and ARPU numbers of our Italian subsidiary.

Non-Gaap Financial Measures

In this report, we present certain financial measures that are not defined in and, thus, not calculated in accordance with IFRS, U.S. GAAP or generally accepted accounting principles in any other relevant jurisdiction. This includes EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin (each as defined below). Because these measures are not standardized, companies can define and calculate these measures differently, and therefore we urge you not to use them as a basis for comparing our results with those of other companies.

We calculate EBITDA by adding back to our consolidated operating profit or loss charges for depreciation, amortization and impairment of assets. Adjusted EBITDA is EBITDA adjusted for the effect of non-recurring and one-off items, as well as mark-to-market results (unrealised) from fair value assessment of energy trading contracts. Adjusted EBITDA Margin is the ratio of Adjusted EBITDA to the sum of our total revenue and other operating income (other than mark-to-market gain/(loss) from fair value assessment of energy trading contracts). EBITDA, Adjusted EBITDA or Adjusted EBITDA Margin under our definition may not be comparable to similar measures presented by other companies and labelled "EBITDA", "Adjusted EBITDA" or "Adjusted EBITDA Margin," respectively. We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are useful analytical tools for presenting a normalized measure of cash flows that disregards temporary fluctuations in working capital, including due to fluctuations in inventory levels and due to timing of payments received or payments made. Since operating profit and actual cash flows for a given period can differ significantly from this normalized measure, we urge you to consider these figures for any period together with our data for cash flows from operations and other cash flow data and our operating profit. You should not consider EBITDA, Adjusted EBITDA or Adjusted EBITDA Margin as substitutes for operating profit or cash flows from operating activities.

In Note 3 to the Interim Financial Statements, as part of our "Other" segment we reported EBITDA of (i) our Italian operations, together with operating expenses of Digi. In this Report, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin represent the results of our Romanian, Hungarian, Spanish and Italian subsidiaries and operating expenses of Digi.

Rounding

Certain amounts that appear in this Report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Management's Discussion and Analysis of Financial Condition and Results of Operations

3rd Quarter 2020 – Financial Report pag. 7

The following discussion and analysis of the financial condition and results of operations of the Group should be read in conjunction with the unaudited interim condensed consolidated financial statements of the Group as of September 30, 2020.

The following discussion includes forward-looking statements based on assumptions about our future business. Our actual results could differ materially from those contained in these forward-looking statements as a result of many factors, including but not limited to those described in sections captioned "Forward-Looking Statements" of this Report.

Overview

We are a European leader in geographically-focused telecommunication solutions, based on the number of RGUs (Source: Group and peer reporting). We are a leading provider of telecommunication services in our core Romanian and Hungarian markets, have significant operations in Spain and are also present in Italy.

Romania. Our offerings in Romania include cable TV, fixed internet and data, mobile telecommunication services, fixed-line telephony and DTH.
Hungary. We provide cable TV, fixed internet and data, mobile telecommunication services, fixedline telephony and DTH services in Hungary.
Spain. We provide mobile telecommunication services as an MVNO through the mobile network of Telefónica. Starting with September 2018, we also offer fixed internet and data and fixed-line telephony services through Telefónica's fixed network and through our own GPON FTTH network.
Italy. We provide mobile telecommunication services as an MVNO through the mobile network of TIM. Our service offerings in Italy primarily target the large local Romanian community.

For the three months ended September 30, 2020, we had revenues of €327.6 million, net profit of €17.5 million and Adjusted EBITDA of €123.1 million (€106.4 million excluding the impact of applying lease accounting as per IFRS 16).

Recent Developments

COVID-19 outbreak

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. As a result, restriction measures have been taken in the territories were we have operations.

During this period, we have taken additional steps to ensure the health and safety of customers, employees and partners and the reliable delivery of services during the COVID-19 outbreak. In Q3 2020, the Group continued to implement necessary measures for the operational activity, to run similar to normal periods. Fixed and mobile networks have been working within normal parameters, coping with the increase in traffic.

At present the spread and consequences of the outbreak are still difficult to predict, as we see the start of a second wave of the pandemic and related restrictions measurs enforced by governments in the territories were we operate. A protracted uncertainty and lack of containment of COVID-19, as well as the measures that governments can implement during this period, could have negative consequences for the Group.

For details regarding the up-date of the litigations, please see Note 18 (c) from the Interim Consolidated Condensed Financial Statements as at September, 30 2020.

Basis of Financial Presentation

The Group prepared its Interim Financial Statements as of September 30, 2020 in accordance with IFRS as adopted by the EU. For the periods discussed in this Report, the Group's presentation currency was the euro. The Group's financial year ends on December 31 of each calendar year.

Functional Currencies and Presentation Currency

Each Group entity prepares individual financial statements in its functional currency, which is the currency of the primary economic environment in which such entity operates. As our operations in Romania and Spain generated approximately 62% and 22%, respectively, of our consolidated revenue for the three months ended September 30, 2020 our principal functional currencies are the Romanian leu and EUR.

The Group presents its consolidated Interim Financial Statements in euros. The Group uses the euro as the presentation currency of its consolidated Interim Financial Statements because management analysis and reporting is prepared in euros, as the euro is the most used reference currency in the telecommunication industry in the European Union.

Presentation of Revenue and Operating Expenses

Our Board of Directors evaluates business and market opportunities and considers our results primarily on a country by country basis. We currently generate revenue and incur operating expenses in Romania, Hungary, Spain and Italy. Revenue and operating expenses from our operations are broken down into the following geographic segments: Romania, Hungary, Spain and Other (the Other segment includes Italy).

In line with our management's consideration of the Group's revenue generation we further break down revenue generated by each of our four geographic segments in accordance with our five principal business lines: (1) cable TV; (2) fixed internet and data; (3) mobile telecommunication services; (4) fixed-line telephony; and (5) DTH.

Exchange rates

In the three month period ended September 30, 2020 the Romanian leu has depreciated with approximately 2.4% and the Hungarian forint has depreciated with approximately 7.7%.

The following table sets out, where applicable, the period end and average exchange rates for the periods under review of the euro against each of our principal functional currencies and the U.S. dollar, in each case as reported by the relevant central bank on its website (unless otherwise stated):

Value of one euro in the relevant currency	As at and for the three months ended September 30,		As at and for the nine months ended September 30,
	2019	2020	2019	2020
Romanian leu (RON) (1)
Period end rate	4.75	4.87	4.75	4.87
Average rate	4.73	4.84	4.74	4.83
Hungarian forint (HUF)(2)
Period end rate	334.65	364.65	334.65	364.65
Average rate	328.21	353.47	323.09	348.03
U.S. dollar (USD)(1)
Period end rate	1.09	1.17	1.09	1.17
Average rate	1.11	1.17	1.12	1.12

(1) According to the exchange rates published by the National Bank of Romania.

(2) According to the exchange rates published by the Central Bank of Hungary.

In the three months ended September 30, 2020, we had a net foreign exchange loss (which is recognized in net finance result on our statement of comprehensive income) of €6.4 million. In the three months ended September 30, 2019 we had a net foreign exchange loss of €11.1 million.

In the nine months ended September 30, 2020, we had a net foreign exchange loss (which is recognized in net finance results on our statement of comprehensive income) of €37.7 million. In the nine months ended September 30, 2019 we had a net foreign exchange loss of €19.3 million.

Growth in Business, RGUs and ARPU

Our revenue is mostly a function of the number of our RGUs and ARPU. Neither of these terms is a measure of financial performance under IFRS, nor have these measures been reviewed by an outside auditor, consultant or expert. Each of these measures is derived from management estimates. As defined by our management, these terms may not be comparable to similar terms used by other companies.

The following table shows our RGUs (thousand) by geographic segment and business line and monthly ARPU (€/month) by geographic segment as at and for the three month period ended September 30, 2019 and 2020:

RGUs (thousand)/ARPU (€/month)	As at and for the three months ended September 30,		% change
	2019	2020
Romania
RGUs
Pay TV(1)	4,033	4,639	15.0%
Fixed internet and data(2)	2,701	3,172	17.4%
Mobile telecommunication services(3)	3,396	3,599	6.0%
Fixed-line telephony(2)	1,112	1,064	(4.3)%
ARPU(4)	5.0	4.8	(4.0)%
Hungary
RGUs
Pay TV(1)	979	938	(4.2)%
Fixed internet and data	757	742	(2.0)%
Mobile telecommunication services(3)	72	164	127.8%
Fixed-line telephony	691	649	(6.1)%
ARPU(4)	6.4	5.9	(7.8)%
Spain
RGUs
Fixed internet and data	49	168	242.9%
Mobile telecommunication services(3)	1,728	2,211	28.0%
Fixed-line telephony	19	60	215.8%
ARPU(4)	9.7	10.1	4.1%
Other(5)
RGUs
Mobile telecommunication services(3)	227	253	11.5%
ARPU(4)	8.7	7.6	(12.6)%

(1) Includes RGUs for Cable television and DTH services.

(2) Includes residential and business RGUs.

(3) Includes mobile telephony and mobile internet and data RGUs.

(4) ARPU refers to the average revenue per RGU in a geographic segment or the Group as a whole, for a period by dividing the total revenue of such geographic segment, or the Group, for such period.

(5) Includes Italy.

Historical Results of Operations

Results of Operations for the three and nine months ended September 30, 2019 and 2020

	ended	As at and for the three months September 30,		As at and for the nine months ended
	2019(1)	2020	September 30, 2019(1)	2020
(€ millions)
Revenues
Romania	190.9	202.3	559.7	584.0
Hungary	53.1	48.8	163.6	151.6
Spain	50.6	71.7	137.9	200.1
Other	5.9	5.8	16.9	17.9
Elimination of intersegment revenues	(1.1)	(1.0)	(3.4)	(3.1)
Total revenues	299.4	327.6	874.6	950.6
Other income	0.01	-	-	1.2
Other expenses	-	(0.32)	(2.5)	(3.5)
Operating expenses
Romania	(90.8)	(108.2)	(303.6)	(311.9)
Hungary	(37.0)	(35.1)	(121.7)	(111.3)
Spain	(38.7)	(55.9)	(107.7)	(158.3)
Other	(6.5)	(6.3)	(18.2)	(19.3)
Elimination of intersegment expenses	1.1	1.0	3.4	3.1
Depreciation, amortization and
impairment of tangible and intangible	(75.2)	(74.8)	(218.9)	(227.9)
assets
Total operating expenses	(247.1)	(279.3)	(766.6)	(825.5)
Operating profit	52.3	47.9	105.6	122.7

Finance income	4.7	0.0	11.5	5.5
Finance expense	(28.8)	(20.0)	(77.2)	(135.8)
Net finance costs	(24.1)	(20.0)	(65.6)	(130.3)
Profit before taxation	28.2	28.0	39.9	(7.6)
Income tax expense	(6.4)	(10.5)	(15.0)	(16.0)
Profit for the period	21.8	17.5	24.9	(23.5)

(1) On 14 November 2019, the Company issued and published on its website the condensed consolidated interim financial report for the nine month period ended 30 September 2019 ("the original financial statements"). In connection with the Company's decision to issue senior secured notes in 2020, the Company was required to re-issue financial information for the nine month period ended 30 September 2019 ("the re-issued financial statements). As a result of this, the Company made certain changes compared to the original financial statements, as a result of not significant inaccuracies/errors that were identified and also as a result of additional disclosures requirements.

Revenue

Our revenue (excluding intersegment revenue and other income) for the three month period ended September 30, 2020 was €327.6 million, compared with €299.4 million for the three month period ended September 30, 2019, an increase of 9.4%.

Our revenue (excluding intersegment revenue and other income) for the nine month period ended September 30, 2020 was €950.6 million, compared with €874.6 million for the nine month period ended September 30, 2019, an increase of 8.7%.

The following table shows the distribution of revenue by geographic segment and business line for the three and nine month period ended September 30, 2019 and 2020:

	As at and for the three months ended September 30,			As at and for the nine months ended September 30,
	2019	2020	% change	2019	2020	% change
(€ millions)
Geographical segment
Romania	190.0	201.6	6.1%	557.2	581.8	4.4%
Hungary	53.1	48.8	(8.1)%	163.6	151.6	(7.3)%
Spain	50.5	71.5	41.6%	137.4	199.6	45.3%
Other(1)	5.7	5.7	0.0%	16.4	17.6	7.3%
Total	299.4	327.6	9.4%	874.6	950.6	8.7%

Category
Fixed services (2)	168.3	182.3	8.3%	495.8	530.1	6.9%
Mobile services	102.9	116.9	13.6%	293.7	341.6	16.3%
Other	28.2	28.3	0.5%	85.2	79.0	(7.3)%
Total	299.4	327.6	9.4%	874.6	950.6	8.7%

(1) Includes revenue from operations in Italy.

(2) Includes revenues from DTH operations.

Revenue in Romania for the three month period ended September 30, 2020 was €201.6 million compared with €190.0 million for the three month period ended September 30, 2019, an increase of 6.1%.

Revenue growth in Romania was mainly the result of the increase of cable TV and fixed internet and data RGUs in the period, due to organic growth, as well as following the entering into force of the Networking agreement between RCS & RDS and Digital Cable Systems S.A., AKTA Telecom S.A., respectively ATTP Telecommunicatios S.R.L ("Assignors"). Under these Agreements, RCS&RDS operates the networks of the Assignors and provides communications services to the clients, in exchange of the payments made by RCS & RDS to the Assignors.

ARPU growth in Romania, in constant currency, was partially offset by currency depreciation in the period (RON/EUR foreign exchange rate increased with 2.4% in Q3 2020 compared to Q3 2019, which impacted negatively the revenues translated from RON in EUR).

Our Pay TV (Cable TV and DTH) RGUs increased from approximately 4,033 thousand as at September 30, 2019 to approximately 4,639 thousand as at September 30, 2020, an increase of approximately 15.0%, and our fixed internet and data RGUs increased from approximately 2,701 thousand as at September 30, 2019 to approximately 3,172 thousand as at September 30, 2020, an increase of approximately 17.4%. This growth was mainly due to organic growth and due to the transfer of RGUs from the Assignors, as per the Network agreement described above.

Mobile telecommunication services RGUs increased from approximately 3,396 thousand as at September 30, 2019 to approximately 3,599 thousand as at September 30, 2020, an increase of approximately 6.0%.

Fixed-line telephony RGUs decreased from approximately 1,112 thousand as at September 30, 2019 to approximately 1,064 thousand as at September 30, 2020, a decrease of approximately 4.3%.

Revenue in Hungary for the three month period ended September 30, 2020 was €48.8 million, compared with €53.1 million (€49.3 million in constant currency) for the three month period ended September 30, 2019, a decrease of 8.1%. Average exchange rate for Q3 2020 compared to Q3 2019 increased with 7.7%, which impacted negatively the revenues translated from HUF in EUR. In constant currency, there is only a slight variation of 1.1% mainly as a result of the natural churn of Invitel's customers.

Our Pay TV (Cable TV and DTH) RGUs decreased from approximately 979 thousand as at September 30, 2019 to approximately 938 thousand as at September 30, 2020, a decrease of approximately 4.2%, our fixed internet and data RGUs decreased from approximately 757 thousand as at September 30, 2019 to approximately 742 thousand as at September 30, 2020, a decrease of approximately 2.0%, and our fixed-line telephony RGUs decreased from approximately 691 thousand as at September 30, 2019 to approximately 649 thousand as at September 30, 2020, a decrease of approximately 6.1%. We continue to investment in expanding and upgrading our fixed fiber optic network in Hungary.

Our mobile RGUs increased from 72 thousand as at September 30, 2019 to 164 thousand as at September 30, 2020, an increase of 127.8%. We continue to invest in building and rolling out our mobile network in Hungary.

Revenue in Spain for the three month period ended September 30, 2020 was €71.5 million, compared with €50.5 million for the three month period ended September 30, 2019, an increase of 41.6%. The increase in our Spain revenue was due to the increase in mobile telecommunication services RGUs from approximately 1,728 thousand as at September 30, 2019 to approximately 2,211 thousand as at September 30, 2020, an increase of approximately 28.0%, primarily due to new customer acquisitions as a result of more attractive and affordable mobile and data offerings. Fixed internet and fixed telephony services were launched by Digi Spain towards the end of September 2018, as a resale product on Telefonica's network. As at September 30, 2020 we had 168 thousand fixed internet and data RGUs and 60 thousand fixed line telephony RGUs, an increase of 242.9% and 215.8% compared to September 30, 2019.

Revenue in Other represented revenue from our operations in Italy and for the three month period ended September 30, 2020 was €5.7 million, compared with €5.7 million for the three month period ended September 30, 2019. Our mobile telecommunication services RGUs increased from approximately 227 thousand as at September 30, 2019 to approximately 253 thousand as at September 30, 2020, an increase of approximately 11.5%, primarily due to new customer acquisitions as a result of more attractive mobile and data offerings. Although RGUs increased, revenues remained flat due to decrease in ARPU driven by significant increases of mobile data allowances included in our packages with little additional cost to customers.

Total operating expenses

Our total operating expenses (excluding intersegment expenses and other expenses, but including depreciation, amortization and impairment) for the three period ended September 30, 2020 were €279.3 million, compared with €247.1 million for the three month period ended September 30, 2019, an increase of 13.0%, respectively.

Our total operating expenses (excluding intersegment expenses and other expenses, but including depreciation, amortization and impairment) for the nine months ended September 30, 2020 were €825.5 million compared with €766.6 million for the nine months ended September 30, 2019, an increase of 7.7%.

The following table shows the distribution of operating expenses by geographic segment for the three and nine month period ended September 30, 2019 and 2020:

	As at and for the three months ended September 30,		As at and for the nine months ended September 30,
	2019	2020	2019	2020
(€ millions)
Romania	90.6	107.9	302.7	311.1
Hungary	37.0	35.1	121.7	111.2
Spain	38.1	55.4	105.9	156.6
Other(1)	6.3	6.1	17.5	18.7
Depreciation, amortization and impairment
of tangible and intangible assets	75.2	74.8	218.9	227.9
Total operating expenses	247.1	279.3	766.6	825.5

(1) Includes operating expenses of operations in Italy and operating expenses of Digi.

Operating expenses in Romania for three month period ended September 30, 2020 were €107.9 million, compared with €90.6 million for the three month period ended September 30, 2019, an increase of 19.1%.

In Q3 2020, mainly salaries and utilities expenses increased. In Q3 2019, following the Ordinance 114/2018, telecom tax accrued for in Q1 and Q2 2019 was reversed in Q3 2019, when the legal provisions regarding this tax were changed, which led to an overall decrease of operating expenses in that period.

In general increases of operating expenses are in line with the growth of the business.

Operating expenses in Hungary for the three month period ended September 30, 2020 were €35.1 million, compared with €37.0 million for the three month period ended September 30, 2019 (€34.3 million in constant currency), a decrease of 5.1%. The HUF/EUR average exchange rate depreciated in Q3 2020 compared to Q3 2019 with 7.7%, resulting in a decrease in HUF expenses translated in EUR. The variation is mainly due to increase in bad debt allowance for the period and correction of accruals from previous periods.

Operating expenses in Spain for the three month period ended September 30, 2020 were €55.4 million, compared with €38.1 million for the three month period ended September 30, 2019, an increase of 45.4%. The increase refers mainly to interconnection and salaries expenses as a result of the business development.

In general increases of operating expenses are in line with the significant business development.

Operating expenses in Other represented expenses of our operations in Italy and expenses of Digi and for the three month period ended September 30, 2020 were €6.1 million, compared with €6.3 million for the three month period ended September 30, 2019, a decrease of 3.2%.

Depreciation, amortization and impairment of tangible and intangible assets

The table below sets out information on depreciation, amortization and impairment of our tangible and intangible assets for the three and nine month period ended September 30, 2019 and 2020.

	As at and for the three months		ended September 30,
	2019	2020	2019	2020
(€ millions)
Depreciation of property, plant and equipment	32.9	36.3	102.6	107.0
Amortization of non-current intangible assets	11.8	15.6	38.7	47.8
Amortisation of programme assets	9.5	15.3	30.7	30.5
Amortization of right of use assets	20.2	7.2	44.6	41.5
Impairment of property, plant and equipment	0.8	0.4	2.2	1.1

Total	75.2	74.8	218.9	227.9

Depreciation of property, plant and equipment

Depreciation of property, plant and equipment was €36.3 million for the three month period ended September 30, 2020, compared with €32.9 million for the three month period ended September 30, 2019, an increase of 10.3%. This variation is the result our continuing development of networks.

Amortization of non-current intangible assets

Amortization of non-current intangible assets was €15.6 million for the three month period ended September 30, 2020, compared with €11.8 million for the three month period ended September 30, 2019, an increase of 32.2%. This was due to increase in subscriber acquisition cost and additional mobile equipment licenses amortization charge in the period.

Amortization of right of use

The Group has adopted IFRS 16 Leases from January 1, 2019. In accordance with the leases standard requirements, the impact of adoption on our depreciation, amortisation and impairment of tangible and intangible assets for the three months period ended September 30, 2020 was €7.2 million, compared to €20.2 million or the three months period ended September 30, 2019. Modifications of lease contracts' stipulations for certain contracts during the period led to decrease in charge for the period.

Amortization of program assets

Amortization of program assets was €15.3 million for the three month period ended September 30, 2020, compared with €9.5 million for the three month period ended September 30, 2019, an increase of 61.1%. During the Q2 2020, because of COVID-19 restrictions, certain sports competitions were postponed and started to be broadcasted (and amortized) in Q3 2020, which lead to an increase in charge during the current period.

Other income/(expenses)

For the period of three months ended September 30, 2020 we recorded other expenses of €0.32 million related to the share option plans which are estimated to be one off events.

We recorded €0.01 million of other income in the three month period ended September 30, 2019 related to the share option plan approved in 2018 which are estimated to be one off events.

Operating profit

For the reasons set forth above, our operating profit was €47.9 million for the three month period ended September 30, 2020, compared with €52.3 million for the three month period ended September 30, 2019.

Net finance expense

We recognized net finance expense of €20.0 million in the three month period ended September 30, 2020, compared with €24.1 million for the three month period ended September 30, 2019, a decrease of 17.3%.

The net loss from foreign exchange in amount of €6.4 million in the three months period ended September 30, 2020 (compared to a foreign exchange loss of €11.1 million from previous period) has contributed to the decrease of the net finance loss.

Interest expenses decreased in the current period mainly because of the reduction in coupon related to the Senior Secured Notes issuance from 2020 (2.5% and 3.25%) compared to the 2016 Senior Secured Notes (5%). In February 2020, we fully repaid or prepaid Senior Facilities Agreements from 2018 and 2016, which resulted in a decrease of interest expense in the period.

Profit before taxation

For the reasons set forth above, our profit before taxation was €28.0 million in the three month period ended September 30, 2020, compared with profit before taxation of €28.2 million for the three month period ended September 30, 2019.

Income tax expense

An income tax expense of €10.5 million was recognized in the three month period ended September 30, 2020, compared to a tax expense of €6.4 million recognized in the three month period ended September 30, 2019.

Net profit for the period1

For the reasons set forth above, our net profit was €17.5 million in the three month period ended September 30, 2020, compared with net profit of €21.8 million for the three month ended September 30, 2019.

Liquidity and Capital Resources

Historically, our principal sources of liquidity have been our operating cash flows as well as debt financing. Going forward, we expect to fund our cash obligations and capital expenditures primarily out of our operating cash flows, credit facilities and letter of guarantee facilities. We believe that our operating cash flows will continue to allow us to maintain a flexible capital expenditure policy.

All of our businesses have historically produced positive operating cash flows that are relatively constant from month to month. Variations in our aggregate cash flow during the periods under review principally represented increased or decreased cash flow used in investing activities and cash flow from financing activities.

We have made and intend to continue to make significant investments in the growth of our businesses by expanding our mobile telecommunication network and our fixed fiber optic networks, acquiring new and renewing existing content rights, procuring CPE which we provide to our customers and exploring other investment opportunities on an opportunistic basis in line with our current business model. We believe that we will be able to continue to meet our cash flow needs by the acceleration or deceleration of our growth and expansion plans.

Historical cash flows

The following table sets forth our consolidated cash flows from operating activities for the three and nine month period ended September 30, 2019 and 2020, cash flows used in investing activities and cash flows from/(used in) financing activities.

	As at and for the three months		As at and for the nine months
	ended September 30,			ended September 30,
	2019(1)	2020	2019(1)	2020
(€ millions)
Cash flows from operations before working capital changes	123.5	113.8	329.9	342.4
Cash flows from changes in working capital	(18.2)	(9.0)	(24.9)	(38.7)
Cash flows from operations	105.3	104.7	304.9	303.7
Interest paid	(7.7)	(13.9)	(37.7)	(34.5)
Income tax paid	(2.0)	(1.3)	(5.4)	(5.1)
Cash flow from operating activities	95.5	89.6	261.9	264.1
Cash flow used in investing activities	(81.8)	(99.3)	(241.9)	(270.6)
Cash flows from /(used in) financing activities	(12.7)	(15.1)	(15.8)	57.9
Net decrease in cash and cash equivalents	1.1	(24.9)	4.1	51.3
Cash and cash equivalents at the beginning of the period	16.9	87.2	13.8	11.0
Effect of exchange rate fluctuation on cash and cash equivalent
held	0.0	0.0	0.0	0.0
Cash and cash equivalents at the closing of the period	18.0	62.3	18.0	62.3

Cash flows from operations before working capital changes were €113.8 million in the three month period ended September 30, 2020 and €123.5 million in the three month period ended September 30, 2019 for the reasons discussed in "—Historical Results of Operations—Results of operations for the three month period ended September 30, 2020 and 2019".

The following table shows changes in our working capital:

		For the three months ended September 30,		For the nine months ended September 30,
	2019	2020	2019	2020
(€ millions)
(Increase) in trade receivables and other assets	(12.7)	(14.9)	(42.5)	(48.3)
Decrease/(increase) in inventories	5.8	(2.4)	4.8	0.8
Increase/(decrease) in trade payables and other current liabilities	(13.8)	6.2	5.7	5.8
Increase/(decrease) in contract liabilities	2.4	2.1	7.0	2.9
Total	(18.2)	(9.0)	(24.9)	(38.7)

We had a working capital requirement of €9.0 million in the three month period ended September 30, 2020 (compared with a working capital requirement of €18.2 million in the three month period ended September 30, 2019). The

increase of trade receivables in the period is mainly the result of overall business growth and increase in RGUs at group level.

Cash flows from operating activities were €89.6 million in the three month period ended September 30, 2020 and €95.5 million in the three month period ended September 30, 2019. Included in these amounts are deductions for interest paid and income tax paid. Income tax paid which were €1.3 million in the three months ended September 30, 2020 and €2.0 million in the three months ended September 30, 2019. Interest paid was €13.9 million in the three months ended September 30, 2020, compared with €5.5 million in the three months ended September 30, 2019. The increase in cash flows from operating activities in the three months ended September 30, 2020 was primarily due to changes in working capital discussed above.

Cash flows used for investing activities were €99.3 million in the three month period ended September 30, 2020 and €81.8 million in the three month period ended September 30, 2019.

Purchases of property, plant and equipment were €82.7 million in the three months ended September 30, 2020 and €62.5 million in the three months ended September 30, 2019.

Purchases of intangible assets were €17.1 million in the three months ended September 30, 2020 and €19.1 million in the three months ended September 30, 2019.

Cash flows used for financing activities were €15.1 million outflow for the three months period ended September 30, 2020, €12.7 million outflow for the three months ended September 30, 2019.

DIGI COMMUNICATIONS NV

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PREPARED IN ACCORDANCE WITH IAS 34 INTERIM FINANCIAL REPORTING for the nine-month period ended 30 September 2020

CONTENTS Page

GENERAL INFORMATION	1
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	2 - 39
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION	2
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	3-4
INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT	5
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	6 - 7
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	8 - 37

GENERAL INFORMATION

Directors:

Serghei Bulgac

Bogdan Ciobotaru

Valentin Popoviciu

Piotr Rymaszewski

Emil Jugaru

Marius Catalin Varzaru

Zoltan Teszari

Registered Office: Digi Communications N.V. Str. Dr. Nicolae Staicovici, nr. 75, bl. Forum 2000 Building, Faza 1, et. 4, sect. 5, Bucuresti, Romania

DIGI Communications N.V. Interim Condensed Consolidated Statement of Financial Position for the period ended 30 September 2020

(all amounts are in thousand Eur, unless specified otherwise)

		Unaudited	Audited
	Notes	30 September 2020	31 December 2019
ASSETS
Non-current assets
Property, plant and equipment	4	1,226,191	1,188,394
Right of use assets	5	225,402	197,930
Intangible assets	6	331,977	268,928
Financial assets at fair value through OCI		37,490	39,592
Investments in associates		982	969
Long term receivables		2,440	2,642
Other non-current assets		6,882	5,943
Deferred tax asset		954	2,620
Total non-current assets		1,832,318	1,707,018
Current assets
Inventories		15,337	15,560
Programme assets	6	29,746	17,557
Trade and other receivables		102,122	69,680
Contract assets		51,063	50,715
Income tax receivable		-	9
Other assets		32,960	11,884
Derivative financial assets	17	21,098	40,095
Cash and cash equivalents		62,340	10,998
Total current assets		314,666	216,498
Total assets		2,146,984	1,923,516

EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent	7
Share capital		6,810	6,810
Share premium		3,406	3,406
Treasury shares		(15,550)	(16,806)
Reserves		(27,956)	(18,536)
Retained earnings		154,889	188,679
Total equity attributable to equity holders of the parent		121,599	163,553
Non-controlling interest		4,523	6,224
Total equity		126,122	169,777

Non-current liabilities
Interest-bearing loans and borrowings, including bonds	8	1,012,158	811,363
Lease liabilities	9	146,627	133,537
Deferred tax liabilities		75,781	69,746
Decommissioning provision		7,306	7,180
Other long term liabilities		33,923	40,312
Total non-current liabilities		1,275,795	1,062,138
Current liabilities
Trade payables and other payables		569,337	460,294
Interest-bearing loans and borrowings	8	70,700	130,667
Lease liabilities	9	64,826	64,721
Income tax payable		2,966	1,498
Derivative financial liabilities	17	770	785
Provisions		6,004	6,118
Contract liabilities		30,464	27,518
Total current liabilities		745,067	691,601
Total liabilities		2,020,862	1,753,739
Total equity and liabilities		2,146,984	1,923,516

The notes on pages 8 to 37 are an integral part of these unaudited interim condensed consolidated financial statements. The condensed consolidated interim financial report was issued on 13 November 2020.

	Notes	Three month period ended 30 September 2020	Three month period ended 30 September 2019

Revenues	11	327,559	299,408
Other income	20	-	11
Operating expenses	12	(279,296)	(247,086)
Other expenses	20	(320)	-
Operating Profit		47,943	52,333
Finance income	13	16	4,699
Finance expenses	13	(19,981)	(28,847)
Net finance costs		(19,965)	(24,148)
Profit before taxation		27,978	28,184
Income tax		(10,529)	(6,427)
Net profit for the period		17,449	21,757
Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign operations – foreign currency translation differences		(470)	(2,147)
Available for sale financial asset, net change in fair value		-	(30)
Cash Flow hedge reserves Other comprehensive income/(loss) for the period, net of		(3,437)	(1,765)
income tax		(3,907)	(3,942)
Total comprehensive income for the period		13,542	17,815

Profit attributable to:
Equity holders of the parent		16,593	22,804
Non-controlling interest		856	(1,048)
Profit for the period		17,449	21,756
Total comprehensive income attributable to:
Equity holders of the parent		12,697	19,001
Non-controlling interest		845	(1,188)

The notes on pages 8 to 37 are an integral part of these unaudited interim condensed consolidated financial statements.

Total comprehensive income for the period 13,542 17,813

The condensed consolidated interim financial report was issued on 13 November 2020.

DIGI Communications N.V. Interim Condensed Consolidated Statement of Comprehensive Income for the 9 month period ended 30 September 2020 (all amounts in EUR '000, unless specified otherwise)

	Notes	Nine month period ended 30 September 2020	Nine month period ended 30 September 2019

Revenues	11	950,596	874,644
Other income	20	1,153	-
Operating expenses	12	(825,508)	(766,595)
Other expenses	20	(3,510)	(2,496)
Operating Profit		122,731	105,553
Finance income	13	5,452	11,533
Finance expenses	13	(135,750)	(77,177)
Net finance costs		(130,298)	(65,644)
Profit before taxation		(7,567)	39,909
Income tax		(15,956)	(14,990)
Net profit for the period		(23,523)	24,919
Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign operations – foreign currency translation differences		(4,653)	(2,703)
Available for sale financial asset, net change in fair value		6	(106)
Cash Flow hedge reserves		(1,741)	4,613
Other comprehensive income/(loss) for the period, net of		(6,388)	1,804
income tax
Total comprehensive income for the period		(29,911)	26,723
Profit attributable to:
Equity holders of the parent		(22,589)	22,991
Non-controlling interest		(934)	1,927
Profit for the period		(23,523)	24,918
Total comprehensive income attributable to:
Equity holders of the parent		(28,739)	24,976
Non-controlling interest		(1,172)	1,746
Total comprehensive income for the period		(29,911)	26,722

The notes on pages 8 to 37 are an integral part of these unaudited interim condensed consolidated financial statements.

The condensed consolidated interim financial report was issued on 13 November 2020.

DIGI Communications N.V.

Interim Condensed Consolidated Cash Flow Statement for the 9 month period ended 30 September 2020

(all amounts in EUR '000, unless specified otherwise)

		Unaudited	Unaudited
	Notes	Nine month period ended 30 September 2020	Nine month period ended 30 September 2019
Cash flows from operating activities
Profit before taxation		(7,567)	39,909
Adjustments for:
Depreciation, amortization and impairment of property, plant and	12	227,885	218,860
equipment, intangibles and right-of-use assets
Interest expense, net	13	36,968	48,267
Finance cost		13,750	-
Impairment of trade and other receivables	12	6,521	6,383
Share-based payment expense		(421)	2,043
Unrealised losses/ (gains) on derivative financial instruments		37,213	(7,165)
Unrealised foreign exchange loss / (gain)		30,191	21,444
Gain on sale of assets		(2,117)	140
Cash flows from operations before working capital changes		342,423	329,881

Changes in:
Trade receivables, other assets and contract assets		(48,325)	(42,518)
Inventories		843	4,822
Trade payables, other payables		5,841	5,743
Contract liabilities Cash flows from operations		2,946 303,728	7,004 304,932

Interest paid		(34,520)	(37,689)
Income tax paid		(5,112)	(5,365)
Cash flows from operating activities		264,096	261,878
Cash flow used in investing activities
Purchases of property, plant and equipment		(205,477)	(149,428)
Purchases of intangibles		(65,636)	(92,387)
Acquisition of subsidiaries, net of cash acquired		(37)	(375)
Acquisition of associate		362	-
Proceeds from sale of property, plant and equipment
		162	241
Cash flows used in investing activities Cash flows from financing activities		(270,626)	(241,949)
Dividends paid to shareholders		(6,614)	(4,212)
Cash outflows from purchase of treasury shares		(166)	(3,574)
Proceeds from borrowings	8	896,302	234,496
Repayment of borrowings	8	(749,317)	(193,053)

Financing costs paid		(31,588)	(4,983)
Payment of lease obligations		(50,747)	(44,470)
Cash flows used in/from financing activities		57,870	(15,796)
Net increase / (decrease) in cash and cash equivalents		51,340	4,133
Cash and cash equivalents at the beginning of the period		10,998	13,832
Effect of exchange rate fluctuations of cash and cash equivalents held		-	-
Cash and cash equivalents at the end of the period		62,340	17,965

The notes on pages 8 to 37 are an integral part of these unaudited interim condensed consolidated financial statements.

DIGI Communications N.V. Interim Condensed Consolidated Statement of Changes in Equity for the period ended 30 September 2020 (all amounts in EUR '000, unless specified otherwise)

	Share capital	Share premium	Treasury shares	Translation reserve	Revaluation reserve	Fair value reserves	Cash flow hedge reserves	Retained earnings	Total equity attributable to equity holders of the parent	Non controlling interest	Total equity
Balance at 1 January 2020 (audited)	6,810	3,406	(16,806)	(36,708)	24,385	(6,220)	7	188,679	163,553	6,224	169,777
Comprehensive income for the period
Net profit for the period	-	-	-	-	-	-	-	(22,589)	(22,589)	(934)	(23,523)
Foreign currency translation differences	-	-	-	(4,415)	-	-	-	-	(4,415)	(238)	(4,653)
Gain on equity instruments measured at fair value through OCI	-	-	-	-	-	(1,741)	-	-	(1,741)	-	(1,741)
Cash Flow hedge reserves(1)	-	-	-	-	-	-	6	-	6	-	6
Transfer of revaluation reserve (depreciation)	-	-	-	-	(3,270)	-	-	3,270	-	-	-
Total comprehensive income/(loss) for the	-	-	-	(4,415)	(3,270)	(1,741)	6	(19,319)	(28,739)	(1,172)	(29,911)
period
Transactions with owners, recognized directly in equity
Contributions by and distributions to owners
Conversion of class A shares to class B shares
Purchase of treasury shares (Note 7)	-	-	(166)	-	-	-	-	-	(166)	-	(166)
Equity-settled share-based payment transactions	-	-	1,422	-	-	-	-	(1,771)	(349)	(72)	(421)
Dividends distributed	-	-	-	-	-	-	-	(12,700)	(12,700)	(457)	(13,157)
Total contributions by and distributions to owners	-	-	1,256	-	-	-	-	(14,471)	(13,215)	(529)	(13,744)
Changes in ownership interests in subsidiaries
Movement in ownership interest while retaining control	-	-	-	-	-	-	-	-	-	-	-
Total changes in ownership interests in subsidiaries
Total transactions with owners	-	-	1,256	-	-	-	-	(14,471)	(13,215)	(529)	(13,744)
Balance at 30 September 2020 (unaudited)	6,810	3,406	(15,550)	(41,123)	21,115	(7,961)	13	154,889	121,599	4,523	126,122

(1) The amount presented on Cash Flow Hedge reserves is included in Reserves in Statement of financial position.

The notes on pages 8 to 37 are an integral part of these unaudited interim condensed consolidated financial statements.

DIGI Communications N.V. Interim Condensed Consolidated Statement of Changes in Equity for the period ended 30 September 2020 (all amounts in EUR '000, unless specified otherwise)

	Share capital	Share premium	Treasury shares	Translatio n reserve	Revaluatio n reserve	Fair value reserves	Cash flow hedge reserves	Retained earnings	Total equity attributable to equity holders of the parent	Non controllin g interest	Total equity
Balance at 1 January 2019 (audited)	6,918	3,406	(14,527)	(34,242)	29,320	(13,755)	94	168,824	146,038	7,306	153,344
Comprehensive income for the period
Net profit for the period	-	-	-	-	-	-	-	22,991	22,991	1,927	24,918
Foreign currency translation differences	-	-	-	(2,529)	-	-	-	-	(2,529)	(174)	(2,703)
Loss on equity instruments measured at fair value through OCI	-	-	-	-	-	4,613	-	-	4,613	-	4,613
Cash Flow hedge reserves(1)	-	-	-	-	-	-	(99)	-	(99)	(7)	(106)
Transfer of revaluation reserve (depreciation)	-	-	-	-	(4,098)	-	-	4,098	-	-	-
Total comprehensive income/(loss) for the period	-	-	-	(2,529)	(4,098)	4,613	(99)	27,089	24,976	1,746	26,722
Transactions with owners, recognized directly in equity
Contributions by and distributions to owners
Conversion of class A shares to class B shares	(108)	-	-	-	-	-	-	108	-	-	-
Purchase of treasury shares (Note 7)	-	-	(3,574)	-	-	-	-	-	(3,574)	-	(3,574)
Equity-settled share-based payment transactions	-	-	3,904	-	-	-	-	(1,963)	1,941	102	2,043
Dividends distributed	-	-	-	-	-	-	-	(9,959)	(9,959)	(675)	(10,634)
Total contributions by and distributions to owners	(108)	-	330	-	-	-	-	(11,814)	(11,592)	(573)	(12,165)
Changes in ownership interests in subsidiaries
Movement in ownership interest while retaining control	-	-	-	-	-	-	-	(37)	(37)	(3)	(40)
Total changes in ownership interests in subsidiaries	-	-	-	-	-	-	-	(37)	(37)	(3)	(40)
Total transactions with owners	(108)	-	330	-	-	-	-	(11,851)	(11,629)	(576)	(12,205)
Balance at 30 September 2019 (unaudited)	6,810	3,406	(14,197)	(36,771)	25,222	(9,142)	(5)	184,062	159,385	8,476	167,861

(1)The amount presented on Cash Flow Hedge reserves is included in Reserves in Statement of financial position.

The notes on pages 8 to 37 are an integral part of these unaudited interim condensed consolidated financial statements.

1. CORPORATE INFORMATION

Digi Communications Group ("the Group" or "DIGI Group") comprises Digi Communications N.V., RCS&RDS S.A. and their subsidiaries.

The parent company of the Group is Digi Communications N.V. ("DIGI" or "the Company" or "the Parent"), a company incorporated in Netherlands with place of business and registered office in Romania. The main operations are carried by RCS&RDS S.A (Romania) ("RCS&RDS"), Digi T.S kft (Hungary), Digi Spain Telecom SLU, and Digi Italy SL. DIGI registered office is located in Str. Dr. Nicolae Staicovici, nr. 75, bl. Forum 2000 Building, Faza 1, et. 4, sect. 5, Bucuresti, Romania. On 11 April 2017 the Company changed its name to Digi Communications N.V., its former name being Cable Communications Systems N.V.

RCS&RDS is a company incorporated in Romania and its registered office is located at Dr. Staicovici 75, Bucharest, Romania.

RCS&RDS was setup in 1994, under the name of Analog CATV, and initially started as a cable TV operator in several cities in Romania. In 1996 following a merger with a part of another cable operator (Kappa) the name of the company became Romania Cable Systems S.A. ("RCS").

In 1998 Romania Cable Systems S.A established a new subsidiary Romania Data Systems S.A. ("RDS") for the purposes of offering internet, data and fixed telephony services to the Romanian market.

In August 2005, Romania Cable Systems S.A. absorbed through merger its subsidiary Romania Data Systems S.A. and changed its name into RCS&RDS.

RCS&RDS evolved historically both by organic growth and by acquisition of telecommunication operators and customer relationships.

The Group provides telecommunication services of Cable TV (television), Fixed and Mobile Internet and Data, Fixedline and Mobile Telephony ("CBT") and Direct to Home television ("DTH") services in Romania, Hungary, Spain and Italy. The largest operating company of the Group is RCS&RDS.

The principal shareholder of the DIGI is RCS Management ("RCSM") a company incorporated in Romania. The ultimate shareholder of DIGI is Mr. Zoltan Teszari, the controlling shareholder of RCSM. DIGI and RCSM have no operations, except for holding and financing activities, and their primary/ only asset is the ownership of RCS&RDS and respectively DIGI.

The consolidated financial statements were authorized for issue on 13 November 2020.

Re-issue of previously issued financial information for the nine month period ended 30 September 2019

On 14 November 2019, the Company issued and published on its website the condensed consolidated interim financial report for the nine month period ended 30 September 2019 ("the original financial statements"). In connection with the Company's decision to issue an additional senior secured notes, the Company was required to re-issue financial information for the nine month period ended 30 September 2019. As a result of this, the Company made certain changes compared to the original financial statements, as a result of not significant inaccuracies/errors that were identified and also as a result of additional disclosures requirements. For details, please see Revised Interim Condensed Consolidated Financial Statements as at 30 September 2019.

2.1 BASIS OF PREPARATION

(a) Statement of compliance

These unaudited interim condensed consolidated financial statements for the nine month period ended 30 September 2020 have been prepared in accordance with IAS 34 Interim Financial Reporting. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 31 December 2019. These interim condensed consolidated financial statements do not include all the information required

2.1 BASIS OF PREPARATION (CONTINUED)

for full annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2019 which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union and part 9 of book 2 of the Dutch Civil code.

(b) Basis of measurement

The interim condensed consolidated financial statements have been prepared on the historical cost basis, except for buildings, land, cable plant, equipment and devices and customer premises equipment measured at revalued amount, and except for financial assets at fair value through OCI and derivative financial instruments measured at fair value.

(c) Judgements and estimates

Preparing the interim condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these interim condensed consolidated financial statements, significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2019.

(d) Functional and presentation currency

The functional currency as well as the presentation currency for the financial statements of each Group entity is the currency of the primary economic environment in which the entity operates (the local currency).

The interim condensed consolidated financial statements are presented in Euro ("EUR") and all values are rounded to the nearest thousand EUR except when otherwise indicated. The Group uses the EUR as a presentation currency of the interim condensed consolidated financial statements under IFRS based on the following considerations:

management analysis and reporting is prepared in EUR;
EUR is used as a reference currency in telecommunication industry in the European Union;
Main debt finance instruments are denominated in EUR.

The assets and liabilities of the subsidiaries are translated into the presentation currency at the rate of exchange ruling at the reporting date (none of the functional currencies of the subsidiaries or the Parent is hyperinflationary for the reporting periods). The income and expenses of the Parent and of the subsidiaries are translated at transaction date exchange rates. The exchange differences arising on the retranslation from functional currency to presentation currency are taken directly to equity under translation reserve. On disposal of a foreign entity, accumulated exchange differences relating to it and previously recognized in equity as translation reserve are recognized in profit or loss as component of the gain or loss on disposal.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operation and translated at the closing rate.

The following rates were applicable at various time periods according to the National Banks of Romania and Hungary:

	2020			2019
Currency		Average			Average for
	1 Jan	for the 9 months	30 Sep	1 Jan	the 9 months	30 Sep
RON per 1EUR	4.7793	4.8257	4.8698	4.6639	4.7382	4.7511
HUF per 1EUR	330.52	348.03	364.65	321.51	323.09	334.65
USD per 1EUR	1.1234	1.1241	1.1708	1.1450	1.1237	1.0889

2.2. GOING CONCERN

Management believes that the Group will continue as a going concern for the foreseeable future. In the current year and recent years, the Group has managed to achieve consistently strong local currency revenue streams and cash flows from operating activities and has continued to grow the business. These results have been achieved during a period of significant investments in technological upgrades, new services and footprint expansion. The ability to offer multiple services is a central element of DIGI Group strategy and helps the Group to attract new customers, to expand the uptake of service offerings within the existing customer base and to increase customer loyalty by offering high valuefor-money package offerings of services and attractive content.

For further information refer to Note 15b) Liquidity risk.

2.3 SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies applied by the Group in this condensed consolidated unaudited interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2019.

The accounting policies used are consistent with those of the previous financial year.

Several amendments and interpretations apply for the first time in 2020, but do not have an impact on the interim condensed consolidated financial statements of the Group.

Amendments to IFRS 3: Definition of a Business

The amendment to IFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarified that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the consolidated financial statements of the Group.

Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark Reform

The amendments to IFRS 9 and IAS 39 Financial Instruments: Recognition and Measurement provide a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainties about the timing and or amount of benchmark-based cash flows of the hedged item or the hedging instrument. These amendments had no impact on the consolidated financial statements of the Group.

Amendments to IAS 1 and IAS 8: Definition of Material

The amendments provide a new definition of material that states "information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity." The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the consolidated financial statements.

Conceptual Framework for Financial Reporting issued on 29 March 2018

The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the consolidated financial statements of the Group.

Covid-19-Related Rent Concessions Amendment to IFRS 16

In May 2020, the IASB amended IFRS 16 Leases, to provide relief to lessees from applying the IFRS 16 guidance on lease modifications to rent concessions arising as a direct consequence of the covid-19 pandemic. The amendment does not apply to lessors. As a practical expedient, a lessee may elect not to assess whether a covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease

2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

payments resulting from the covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification. Lessees will apply the practical expedient retrospectively, recognising the cumulative effect of initially applying the amendment as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of the annual reporting period in which the amendment is first applied. These amendments had no impact on the consolidated financial statements of the Group.

Classification of Liabilities as Current or Non-current - Amendments to IAS 1

In January 2020, the Board issued amendments to paragraphs 69 to 76 of IAS 1 Presentation of Financial Statements to specify the requirements for classifying liabilities as current or non-current.

The amendments clarify:

What is meant by a right to defer settlement
That a right to defer must exist at the end of the reporting period
That classification is unaffected by the likelihood that an entity will exercise its deferral right

• That only if an embedded derivative in a convertible liability is itself an equity instrument, would the terms of a liability not impact its classification

These amendments had no impact on the consolidated financial statements of the Group.

Improvements to International Financial Reporting Standards - 2018-2020 cycle (issued in May 2020)

The IASB's annual improvements process deals with non-urgent, but necessary, clarifications and amendments to IFRS. The following is a summary of the amendments from the 2018-2020 annual improvements cycle, which were not early adopted by the Group:

IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a firsttime adopter
The amendment permits a subsidiary that elects to apply paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by the parent, based on the parent's date of transition to IFRS. This amendment is also applied to an associate or joint venture that elects to apply paragraph D16(a) of IFRS 1.
An entity applies the amendment for annual reporting periods beginning on or after 1 January 2022. Earlier application is permitted.

• IFRS 9 Financial Instruments - Fees in the '10 per cent' test for derecognition of financial liabilities

The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf. There is no similar amendment proposed for IAS 39.
An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment.
An entity applies the amendment for annual reporting periods beginning on or after 1 January 2022. Earlier application is permitted.

3. SEGMENT REPORTING

Three months ended 30 September 2020	Romania	Hungary	Spain	Other	Eliminations	Reconciling item	Group

Segment revenue	201,580	48,793	71,524	5,661	-	-	327,558
Inter-segment revenues	727	-	159	88	(974)	-	-
Segment operating expenses	(108,155)	(35,075)	(55,942)	(6,252)	974	-	(204,450)
Adjusted EBITDA	94,152	13,718	15,741	(503)	-	-	123,108
Depreciation, amortization and impairment of tangible, right of use and intangible assets	-	-	-	-	-	(74,843)	(74,843)
Other expenses (Note 20)	(320)	-	-	-	-	-	(320)
Operating profit							47,945
Additions to tangible and intangible non-current assets	146,986	11,659	30,194	(2,424)	-	-	186,415
Carrying amount of:
Non-current assets	1,295,347	367,092	118,652	2,479	-	-	1,783,570
Investments in associates and Financial assets at fair value through OCI	982	-	-	37,490	-	-	38,472

3. SEGMENT REPORTING (continued)

Three months ended 30 September 2019	Romania	Hungary	Spain	Other	Eliminations	Reconciling item	Group

Segment revenue	190,046	53,126	50,490	5,746	-	-	299,408
Inter-segment revenues	863	-	123	135	(1,121)	-	-
Segment operating expenses	(90,824)	(36,965)	(38,748)	(6,470)	1,121	-	(171,886)
Adjusted EBITDA	100,085	16,161	11,865	(589)	-	-	127,522
Depreciation, amortization and impairment of tangible, right of use and intangible assets						(75,200)	(75,200)
Other income (Note 20)	11	-	-	-	-	-	11
Operating profit							52,333
Additions to tangible and intangible non-current assets	165,468	101,713	21,687	1,106	-	-	289,974
Carrying amount of:
Non-current assets	1,145,321	415,926	48,870	2,605	-	-	1,612,722
Investments in associates and Financial assets at fair value through OCI	968	-	-	36,671	-	-	37,639

3. SEGMENT REPORTING (continued)

Nine months ended 30 September 2020	Romania	Hungary	Spain	Other	Eliminations	Reconciling item	Group

Segment revenue	581,784	151,590	199,647	17,574	-	-	950,595
Inter-segment revenues	2,264	-	492	320	(3,076)	-	-
Segment operating expenses	(311,883)	(111,252)	(158,302)	(19,260)	3,076	-	(597,621)
Adjusted EBITDA	272,165	40,338	41,837	(1,366)	-	-	352,974
Depreciation, amortization and impairment of tangible, right of use and intangible assets						(227,885)	(227,885)
Other income (Note 20)	1,153	-	-	-	-	-	1,153
Other expenses (Note 20)	-	(3,510)	-	-	-	-	(3,510)
Operating profit							122,732
Additions to tangible and intangible non-current assets	279,014	44,101	71,024	1,388	-	-	395,527
Carrying amount of:
Non-current assets	1,295,347	367,092	118,652	2,479	-	-	1,783,570
Investments in associates and Financial assets at fair value through OCI	982	-	-	37,490	-	-	38,472

3. SEGMENT REPORTING (continued)

Nine months ended 30 September 2019	Romania	Hungary	Spain	Other	Eliminations	Reconciling item	Group

Segment revenue	557,235	163,568	137,414	16,427	-	-	874,644
Inter-segment revenues	2,430	-	525	427	(3,382)	-	-
Segment operating expenses	(303,608)	(121,691)	(107,660)	(18,158)	3,382	-	(547,735)
Adjusted EBITDA	256,057	41,877	30,279	(1,304)	-	-	326,909
Depreciation, amortization and impairment of tangible and intangible assets						(218,860)	(218,860)
Other expenses (Note 20)	(2,496)	-	-	-	-	-	(2,496)
Operating profit							105,553
Additions to tangible and intangible non-current assets	271,733	135,415	40,562	2,231	-	-	449,941
Carrying amount of:
Non-current assets	1,145,321	415,926	48,870	2,605	-	-	1,612,722
Investments in associates and Financial assets at fair value through OCI	968	-	-	36,671	-	-	37,639

4. PROPERTY, PLANT AND EQUIPMENT

Acquisitions and disposals

During the nine-month period ended 30 September 2020, the Group acquired property, plant and equipment with a cost of EUR 196,989 (nine months ended 30 September 2019: EUR 171,549).

The acquisitions related mainly to networks EUR 111,558 (nine months ended 30 September 2019: EUR 90,264), customer premises equipment of EUR 31,085 (nine months ended 30 September 2019: EUR 32,425), equipment and devices of EUR 44,012 (nine months ended 30 September 2019: EUR 39,498), buildings and structures of EUR 4,270 (nine months ended 30 September 2019: EUR 5,204) and vehicles of EUR 3,156 (nine months ended 30 September 2019: EUR 2,118).

5. RIGHT OF USE ASSETS

Starting from 1 January 2019, IFRS 16 was adopted.

The Group has lease contracts for various items of land, commercial spaces, network, vehicles, equipment, etc. used in its operations. Right of use assets are accounted for at cost and depreciated over the contract period.

During the nine-month period ended 30 September 2020, right of use assets' gross book movement (additions, disposals and translation effect) is in amount of EUR 65,371.

6. NON-CURRENT INTANGIBLE ASSETS, CURRENT PROGRAMME ASSETS

a) Intangible assets

Acquisitions

Non-current intangible assets

During the nine-month period ended 30 September 2020, the Group acquired non-current intangible assets with a cost of EUR 119,014 (30 September 2019: EUR 59,810).

The additions were as follows:

Software and licences in amount of EUR 20,421 (30 September 2019: EUR 17,594);
Customer relationships by acquiring CATV and fixed internet subscribers in amount of EUR 67,946 (30 September 2019: EUR 16,537);

The main addition in the current period is related to the Networking agreement between RCS & RDS and Digital Cable Systems S.A., AKTA Telecom S.A., respectively ATTP Telecommunications S.R.L ("Assignors"). On July 24, 2020, the Competition Council issued the authorisation for the economic concentration accomplished by RCS&RDS through gaining sole control over certain assets pursuant to the agreements entered into on 28 November 2019 between RCS & RDS and the Assignors.

Under these Agreements, RCS&RDS operates the networks of the Assignors and provides communications services to the clients, in exchange for the payments made by RCS & RDS to the Assignors (rent). The Agreements are concluded for an initial duration of 3 years, which can be extended at the option of either party for a new term of 3 years. The total amount due as rent (as defined in the contract) or price by RCS&RDS under the Agreements are in maximum amount of EUR 77 million excluding VAT.

In accordance with IFRS requirements, for financial reporting purposes only, this transaction was considered to be treated as an aquisition of customer relationships in exchange of deffered payments over the life of the contract. The analysis of the fair value of the asset and corresponding liability is still in the preliminary phases and will be finalized in the coming period. As at 30 September 2020, the estimated preliminary fair value of the asset in amount of EUR 61,575 (recognised as intangible asset) and the corresponding liability (recognised in the Trade and other payables line), was estimated as the net present value of the discounted cash flows as defined in the contract, discounted at the Group's cost of debt.

6. NON-CURRENT INTANGIBLE ASSETS AND PROGRAMME ASSETS (CONTINUED)

Costs to obtain contracts with customers (Subscriber Acquisition Costs "SAC") in amount of EUR 30,647 (30 September 2019: EUR 25,679); SAC represents third party costs for acquiring and connecting customers of the Group;

Goodwill

(i) Reconciliation of carrying amount
Balance at 1 January 2020	80,844
Additions	-
Disposals	(440)
Effect of movement in exchange rates	(2,610)
Balance at 30 September 2020	77,794

(i) Reconciliation of carrying amount
Cost
Balance at 1 January 2019	82,903
Additions	-
Effect of movement in exchange rates	(2,080)
Balance at 30 September 2019	80,823

Impairment testing of goodwill

Goodwill is not amortized but is tested for impairment annually (as at 31 December) and when circumstances indicate the carrying values may be impaired. There were no impairment indicators for the cash generating units to which goodwill was allocated as of 30 September 2020.

b) Programme assets

During the nine-month period ended 30 September 2020, additions of programme assets in the amount of EUR 43,089 (30 September 2019: EUR 34,457) represent broadcasting rights for sports competitions for 2020/2021 season and related advance payments for future seasons, and also rights for movies and documentaries.

7. EQUITY

There were no changes in the share capital structure during the period ended 30 September 2020.

For stock option plan exercised during the period, please see Note 16.

As at 30 September 2020, the Company had 5.3 million treasury shares.

The GSM from 30 April 2020 approved the distribution of a gross dividend of 0.65 RON (EUR 0.14) per share, for 2019, which was distributed at the end of May 2020.

8. INTEREST-BEARING LOANS AND BORROWINGS

Included in long term interest-bearing loans and borrowings are bonds of EUR 851,252 (December 2019: EUR 552,433), bank loans EUR 160,907 (December 2019: EUR 258,930).

Included in short term interest-bearing loans and borrowing are bank loans of EUR 30,797 (December 2019: EUR 53,873), short portion of long term interest-bearing loans of EUR 34,717 (December 2019: EUR 68,307) and interest payable amounting to EUR 5,187 (December 2019: EUR 8,487).

On 5 February 2020 RCS & RDS SA issued Senior Secured Notes in total amount of EUR 850,000, in two tranches: (i) EUR 450,000 2.50% senior secured notes due 2025 and (ii) EUR 400,000 3.25% senior secured notes due 2028 (collectively, the "Notes").

The gross proceeds of the Offering were used (a) to redeem the entire aggregate principal amount outstanding of EUR 550,000 5.0% senior secured notes due 2023 issued by the Company and pay redemption premium and accrued, but unpaid, interest to holders thereof; (b) to prepay or repay partially the outstanding amounts under 2016 Senior Facility Agreement; (c) to prepay the entire aggregate principal amount 2018 Senior Facility Agreement; (d) to repay (without cancelling) certain overdraft facilities; (e) to pay costs, expenses and fees in connection with the Refinancing; and (f) for general corporate purposes (which may include acquisitions).

On 24 March 2020, we drew RON100.0 million under revolving Facility B of the 2016 Senior Facilities Agreement. The amounts drawn are for general corporate purposes.

The movements in total Interest-bearing loans and borrowings is presented in the table below:

	Carrying amount
Balance as of 1 January 2020	942,030

New drawings
Proceeds from bank loans and proceeds from Bond	896,302
Interest for the period	28,724
Repayment

Repayment of borrowings	(749,317)
Current year interest paid	(31,946)
New finance cost	622
Amortization of deferred finance costs and inception value of embedded derivative	1,545
Effect of movements in exchange rates	(5,102)
Balance as of 30 September 2020	1,082,858

8. INTEREST-BEARING LOANS AND BORROWINGS (continued)

Included in Other long term liabilities and Trade payables and other payables there are supplier balances that are part of several factoring arrangements amounting to EUR 68,796.

9. LEASE LIABILITY

The Group leases mainly network pillars, land, commercial spaces, cars and equipment. As at 30 September 2020, financial leasing liability was impacted by the variation of the foreign exchange rate for the Group's main functional currencies, by additions as well as by modifications of stipulations for certain leasing contracts related to rent amount, contract period, etc.

10. RELATED PARTY DISCLOSURES

		30 September 2020	31 December 2019
Receivables from Related Parties
Ager Imobiliare S.R.L.	(ii)	779	763
Other*		11	11
Total		790	774

		30 September 2020	31 December 2019
Payables to Related Parties
RCS Management S.A.	(i)(ii)	16,362	10,520
Mr. Zoltan Teszari	(i)	483	242
Other		481	358
Total		17,326	11,119

(i) Shareholder of DIGI

(ii) Entities affiliated to a shareholder of the parent

(*) Other includes RCS-Management

In May 2020, RCS & RDS declared dividends in amount of 50,000 RON, EUR 10,3 million equivalent, as distribution from 2019 profit.

Compensation of key management personnel of the Group

	Three months	Three months	Nine months	Nine months
	ended	ended	ended	ended
	30 September	30 September	30 September	30 September
	2020	2019	2020	2019
Short term employee benefits –salaries	967	775	2,695	2,614

In May 2020, share option plans were approved by the General Shareholders' Meeting for members of the Company's Board of Directors. For details, please see Note 16.

11. REVENUES

Allocation of revenues through business lines and geographical areas is as follows:

	Three months ended 30 September 2020	Three months ended 30 September 2019	Nine months ended 30 September 2020	Nine months ended 30 September 2019

Country
Romania	201,578	190,046	581,781	557,235
Hungary	48,794	53,124	151,591	163,567
Spain	71,524	50,491	199,647	137,414
Italy	5,663	5,747	17,577	16,428
Total revenues	327,559	299,408	950,596	874,644
Category
Fixed services(1)	182,294	168,314	530,059	495,780
Mobile services	116,933	102,910	341,574	293,667
Other	28,332	28,184	78,963	85,197
Total revenues	327,559	299,408	950,596	874,644

(1) Includes revenues from DTH operations.

Other revenues from contracts with costumers as at 30 September 2020 include mainly revenues from sale of handsets and other CPE, as well as advertising revenues.

The split of revenues based on timing of revenue recognition is presented below:

Timing of revenue recognition
	Three months	Three months	Nine	Nine
	ended 30 September	ended 30 September	months ended	months ended
	2020	2019	30	30
			September	September
			2020	2019
Goods transferred at a point in time	8,365	8,657	23,587	26,152
Services transferred over time	319,194	290,751	927,009	848,492
Total revenues	327,559	299,408	950,596	874,644

The transfer of goods to the customer at a point in time are presented in the first table above as "Other revenues". The rest of the services provided to customers are presented as revenues for each category line and country.

12. OPERATING EXPENSES

	Three months ended 30 September 2020	Three months ended 30 September 2019	Nine months ended 30 September 2020	Nine months ended 30 September 2019
Depreciation of property, plant and equipment	36,331	31,217	107,036	100,965
Amortisation of right of use assets	7,175	21,846	41,521	46,309
Amortization of programme assets	15,310	9,480	30,453	30,714
Amortization of non-current intangible assets	15,640	11,844	47,753	38,654
Salaries and related taxes	55,837	48,493	162,952	149,526
Contribution to pension related fund	1,622	1,567	4,614	4,762
Programming expenses	25,783	26,864	78,720	79,718
Telephony expenses	60,421	52,289	175,590	151,834
Cost of goods sold	7,874	7,602	21,800	23,598
Invoicing and collection expenses	5,615	5,571	16,975	16,422
Taxes to authorities and penalties	5,004	(1,667)	18,602	17,241
Utilities	7,907	7,056	23,396	19,474
Copyrights	3,069	3,053	9,007	8,894
Internet connection and related services	8,104	3,251	21,675	8,158
Impairment of receivables, net of reversals	2,201	2,289	5,532	6,383
Impairment of property, plant and equipment	387	746	1,106	2,111
Impairment of non-current intangible assets	-	67	16	107
Other materials and subcontractors	3,678	2,679	10,252	7,839
Other services	6,593	7,235	19,086	21,021
Rent and other expenses	10,745	5,603	29,422	32,864
Total operating expenses	279,296	247,085	825,508	766,594

For details regarding impairment of property, plant and equipment in current period, please Note 14.

Share option plans' expenses accrued in the period are included in the caption "Salaries and related taxes". For details, please see Note 16.

13. NET FINANCE COSTS

	Three months ended 30 September 2020	Three months ended 30 September 2019	Nine months ended 30 September 2020	Nine months ended 30 September 2019
Financial revenues
Interest from banks	16	24	81	3,351
Other financial revenues	-	4,675	5,371	8,182
Foreign exchange differences (net)	-	-	-	-
	16	4,699	5,452	11,533
Financial expenses
Interest expense and amortization of borrowing cost	(9,513)	(12,448)	(31,685)	(41,488)
Interest expense for lease	(2,373)	(2,181)	(5,283)	(6,779)
liability
Net gain/(loss) on derivative financial instruments	-	(5)	(5)	(7)
Foreign exchange differences (net)	(6,396)	(11,103)	(37,711)	(19,252)
Other financial expenses	(1,699)	(3,110)	(61,066)	(9,651)
	(19,981)	(28,847)	(135,750)	(77,177)
Net Financial Cost	(19,965)	(24,148)	(130,298)	(65,644)

On the same date, the EUR 550,000 Senior Secured Notes issued in 2016 (including the tap of Additional Notes from 12 February 2019) were repaid. Other financial expenses in the period ended 30 June 2020 include redemption penalties in amount of EUR 13,786. Interest expense in the period include related accrued interest of EUR 2,817.

At repayment, the 2016 Senior Secured Notes embedded derivative asset was derecognized and included in finance expenses in amount of EUR 39,956. The new embedded derivative asset related to the Senior Secured Notes issued in 2020 was recognized.

In the three months period ended September 2020, we recognised as other financial expense a fair value loss of EUR 591 related to Senior Secured Notes issued in 2020's embedded derivative asset.

In the three months period ended June 2020, we recognised as other financial income a fair value gain of EUR 5,257 related to Senior Secured Notes issued in 2020's embedded derivative asset. In the three month period ended March 2020, we recognized as other financial expenses a fair value loss on Senior Secured Notes issued in 2020's embedded derivative asset in amount of EUR 1,925, after taking into consideration fair value of the embedded derivative asset at inception of EUR 18,362.

14. ASSETS HELD FOR SALE

The Hungarian Competition Authority (Gazdasagi Versenyhivatal, hereinafter "GVH") withdrew on 14 November 2018 its initial decision approving the Transaction, issued in May 2018 (the "Withdrawal Decision") and opened a new merger control procedure with the purpose of reassessing certain limited aspects in connection with market overlaps between Invitel and i-TV Digitalis Tavkozlesi Zrt. ("i-TV", Digi HU's Hungarian subsidiary) (the "New Procedure").

GVH has issued on 18 March 2020 a new decision approving the acquisition by our Hungarian subsidiary, DIGI Tavkozlesi es Szolgaltato Kft. ("Digi HU") of shares representing in total 99.998395% of the share capital and voting rights of Invitel Tavkozlesi Zrt. ("Invitel") (the "Transaction")

14. ASSETS HELD FOR SALE (CONTINUED)

The Withdrawal Decision has been appealed by Digi HU, with the decision issued by the competent Hungarian court in first instance reducing the amount of the fine in half. In addition, although the competent court has maintained the Withdrawal Decision in relation to Digi HU's alleged failure to proactively act in a required manner, it also established that GVH had failed to properly gather the necessary information at the time of its initial approval in order to clarify the matter. Both GVH and Digi have filed appeals against the court's decision. The appeal hearing was initially scheduled for March 25, 2020, but as consequence to the measures implemented by the Hungarian government in response to the COVID – 19 epidemics, the hearing has been postponed.

Although we firmly continue to believe that the Withdrawal Decision was incorrect, in the context of the New Procedure and in order to address the authority's concerns formulated at the time of it issuing the Withdrawal Decision, in consultation with GVH, Digi HU proposed a remedy package.

One of the main elements of this package is the sale by Invitel to a third party of its operations in 15 Hungarian settlements and parts of its network in the Szeged settlement that overlapped with DIGI Hungary's own network there, the sale and purchase agreement having been executed on 9 January 2020. The transaction was closed on 30 June 2020. Assets sold were measured at the lower of the carrying amount and fair value less costs to sell (selling price). The loss was recognized in the period. The net loss of EUR 3,510 is recognized as Other expense. For details, please see Note 20.

In response to the competition concerns identified by GVH in connection with 67 settlements where Invitel has overlapping services with i-TV, Digi HU proposed to ensure that i-TV's rental agreements with the relevant local network operators will not be terminated until December 31, 2023 (but will be discontinued from 1 January 2024). Following its analysis of the proposal of this remedial package aimed at addressing competition concerns in connection with the Transaction, GVH authorised again DIGI Hungary's acquisition of Invitel.

15. FINANCIAL RISK MANAGEMENT

The Group has exposure to the following risks from the use of financial instruments:

credit risk
liquidity risk
market risk (including currency risk and interest rate risk).

This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risk, and the Group's management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

(a) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's trade receivables from customers. Management mitigates credit risk mainly by monitoring the subscribers base and identifying bad debt cases, which are suspended, in general, in an average of 15 days period after the invoice due date.

The carrying amount of the non-derivative financial assets, net of the recorded allowances for expected credit losses, represents the maximum amount exposed to credit risk. The Group evaluates the concentration of risk with respect to trade receivables and contract assets as low.

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. As a result, restriction measures have been taken in the territories were we have operations.

Collection of receivables could be influenced by macro-economic factors. Management believes that there is no significant risk of loss to the Group beyond the allowances already recorded.

The credit exposure for derivatives is limited, as there will be no incoming cash-flow arising from the embedded derivatives.

Cash and cash equivalents are placed in financial institutions, which are considered at time of deposit to have minimal risk of default.

The credit risk on cash and cash equivalents is very small, since the cash and cash equivalents are held at reputable banks in different countries. The most significant part of cash and cash equivalents balance is generally kept at the main subsidiary (RCS RDS) level with internationally reputable banks, having at least A-2 rating in a country with a "BBB-" rating.

15. FINANCIAL RISK MANAGEMENT (CONTINUED)

(b) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, vendor financing and reverse factoring agreements. Management monitors on a monthly basis the forecast of cash outflows and inflows in order to determine its funding needs.

At 30 September 2020, the Group had net current liabilities of EUR 430,401 (31 December 2019: EUR 475,104). As a result of the volume and nature of the telecommunication business current liabilities exceed current assets. A large part of the current liabilities is generated by investment activities. Management considers that the Group will generate sufficient funds to cover the current liabilities from future revenues.

The Group's policy on liquidity is to maintain sufficient liquid resources to meet its obligations as they fall due and to keep the Group's leverage optimized. The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, finance leases and working capital, whilst considering future cash flows from operations. Management believes that there is no significant risk that the Group will encounter liquidity problems in the foreseeable future.

(c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, market electricity prices and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Exposure to currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures (other than the functional currency of each legal entity), primarily with respect to the EUR and USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in currencies other than the functional currencies of the Company and each of its subsidiaries.

Management has set up a policy to manage the foreign exchange risk against the functional currency. To manage their foreign exchange risk arising from future commercial transactions and recognized assets and liabilities, the Group used forward/option contracts, transacted with local banks.

The Group imports services and equipment and attracts substantial amount of foreign currency denominated borrowings.

Interest rate risk

The Group's income and operating cash flows are substantially independent of changes in market interest rates. The Group is exposed to interest rate risk (EUR and USD) though market fluctuations of interest rates. Details of borrowings are disclosed in Note 8.

d) Capital Management

The Group's objectives when managing capital are to safeguard the Groups ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal structure to reduce the cost of capital. Management monitors "total net debt to EBITDA" ratio which is computed in accordance with the Senior Facilities Agreement.

15. FINANCIAL RISK MANAGEMENT (CONTINUED)

(e) Fair values

The Group measures at fair value the following: financial assets at fair value through other comprehensive income and embedded derivatives.

16. SHARE-BASED PAYMENT

The Group implemented share-based payment plans for certain members of the management team and key employees. The options vest if and when certain performance conditions, such as revenue, subscriber targets and other targets of the Group were met. Some of the share option plans vested in 2019 were closed.

Currently, the following share option plans are in place:

16.1 In December 2017, the Board of Directors approved a stock option plan whereby a number of directors, officers and employees of certain subsidiaries of the Group in Romania were granted options to acquire for free class B shares of the Company, with up to 1.6% out from the total number of shares issued by the Company being allocated for this program.

In 2017, 1.5 million shares were granted as options to eligible employees under the share based payment plan. A total number of 2,746 employees are included in the share based payment plan, which was a one-time event after the IPO. Fair value at granting date was EUR 12,387. The Plan vested at the end of 2018 and beginning of 2019 and was settled in shares.

This stock option plan was closed during the third quarter of 2020.

16.2 On 2 May 2018, the General Shareholder's Meeting has approved the grant of stock options for class B shares applicable to the executive and non-executive Board members in 2018.

In May 2018, Mr. Serghei Bulgac (Chief Executive Officer and Executive Director of the Company), Mr. Valentin Popoviciu (Executive Director of the Company), Mr. Marius Varzaru (Non-executive Director) and Mr. Bogdan Ciobotaru (Non-executive Director) have been granted by the Company conditional stock options pursuant to the decision of the Company's general meeting of shareholders dated 2 May 2018. The number of options of class B shares granted as part of this stock option plan (applicable for the years 2018 and 2019) amounts to a total of 686,090 stock options.

On 28 May 2019 Mr. Serghei Bulgac, Chief Executive Officer and Executive Director of the Company and Mr. Valentin Popoviciu, Executive Director of the Company, have exercised their stock options, which have vested in accordance with the provisions of the Company's stock option plan. In accordance with this stock option plan, Mr. Serghei Bulgac was granted 170,000 shares, while Mr. Valentin Popoviciu was granted 90,000 shares.

On 6 April 2020 Mr. Bogdan Ciobotaru, Non-Executive Director of the Company, have exercised his stock option, which have vested in accordance with the provisions of the Company's stock option plan and which were granted pursuant to the decision of the Company's general meeting of shareholders dated 2 May 2018. In accordance with this stock option plan and the general meeting of shareholders dated 2 May 2018, Mr. Bogdan Ciobotaru was granted 116,090 class B shares.

On 15 May 2020, Mr. Serghei Bulgac, Chief Executive Officer and Executive Director of the Company and Mr. Valentin Popoviciu, Executive Director of the Company, have exercised their stock options, which have vested in accordance with the provisions of the Company's stock option plan and which were granted pursuant to the decision of the Company's general meeting of shareholders dated 2 May 2018. In accordance with this stock option plan, Mr. Serghei Bulgac was granted 170,000 shares, while Mr. Valentin Popoviciu was granted 90,000 shares.

On 3 June 2020 Mr. Marius Catalin Varzaru, Non-Executive Director and Vice-President of the Board of Directors of the Company, has exercised his stock options, which have vested in accordance with the provisions of the Company's stock option plan and which were granted pursuant to the decision of the Company's general meeting of shareholders dated 2 May 2018. In accordance with this stock option plan, Mr. Marius Catalin Varzaru was granted 50,000 shares.

This stock option plan was closed.

16. SHARE-BASED PAYMENT (continued)

16.3 On 30 April 2020, the General Shareholder's Meeting has approved the grant of stock options for class B shares applicable to the executive Board members in 2020.

Mr. Serghei Bulgac (Chief Executive Officer and Executive Director of the Company) and Mr. Valentin Popoviciu (Executive Director of the Company), have been granted by the Company conditional stock options pursuant to the decision of the Company's general meeting of shareholders dated 30 April 2020. The number of options of class B shares granted as part of this stock option plan amounts to a total of 130,000 stock options.

16.4 On 19 May 2020, the Board of Directors of the Company has approved the grant of stock options for the benefit of certain employees and managers of RCS&RDS S.A., its Romanian subsidiary and of DIGISOFT IT SRL, a subsidiary of RCS&RDS S.A. The options granted are for a number of 185,500 Class B shares. The vesting of such options is conditional upon fulfilment of several performance criteria, with the vesting period being a minimum of 1 year.

For three months period ended at 30 September 2020 the related share option expense of EUR 226 is included in the Consolidated statement of profit or loss and other comprehensive income included in the line item Operating expenses, within salaries and related taxes (Note 12). For the nine months period ended 30 September 2020, the amount of EUR 1,153 (income) is excluded from EBITDA because the related share option plans are estimated to be one-time events.

17. DERIVATIVE FINANCIAL INSTRUMENTS

For assets and liabilities that are measured at fair value on a recurring or non-recurring basis in the statement of financial position after initial recognition, the valuation techniques and inputs used to develop those measurements are presented below:

Financial assets at fair value through OCI

Financial assets at fair value through OCI comprise shares in RCSM. In 2017 the Company's class B shares were listed on the Bucharest Stock Exchange. As at 30 September 2020, the fair value assessment of the shares held in RCSM was consequently performed based on the average quoted price/share of the shares of the Company as of the valuation date (RON/share 31.5), adjusted for the impact of other assets and liabilities of RCSM, given that the main asset of RCSM is the holding of the majority of the shares of the Company. The fair value assessment also takes into account the cross-holdings between the Group and RCSM.

Embedded derivatives

As at 31 December 2019, the yields used as input in the Option Adjusted Spread (OAS) model presented some anomalies. Therefore, alternatively, a discounted cash flow valuation technique was used in order to estimate the option-free value at this date. Main inputs were the callable bond market value, coupon, payment terms and maturity date. The fair value was obtained from an independent valuation specialist. The management has determined that such prices were developed in accordance with the requirements of IFRS 13.

As at 30 September 2020, the valuation method was consistent with the one used as at 31 December 2019.

As at 30 September 2020 the Group had derivative financial assets in amount of EUR 21,098 (31 December 2019: EUR 40,095), which included:

• Embedded derivatives of EUR 21,098 (31 December 2019: EUR 40,095) related to the 2025 and 2028 Senior Secured Notes (includes several call options as well as one put option). The fair value of the Notes was also assessed at inception date, in February 2020, in amount of EUR 18,362 and recognized as embedded derivative asset with a corresponding increase of the bond liability.

As at 30 September 2020 the Group had derivative financial liabilities in amount of EUR 770 (31 December 2019: EUR 785), which included:

• Redemption Options share contracts fair value of EUR 770 (31 December 2019: EUR 770) related to the Company's acquisition of 7,781,832 shares in RCS & RDS SA from certain minority shareholders. There is a redemption option in the contracts regarding the right of these minority shareholders to redeem these shares in a 3 year period, for an established price. This embedded option was accounted in Group's consolidated financial

17. DERIVATIVE FINANCIAL INSTRUMENTS (continued)

statements at fair value. The fair value was obtained from an independent valuation specialist. The management has determined that such fair value was developed in accordance with the requirements of IFRS 13.

Interest rate swaps liabilities ended in April 2020.

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

	Level 1	Level 2	Level 3	Total
30 September 2020
Financial assets at fair value through OCI	-	-	37,490	37,490
Redemption Options share contracts	-	-	(770)	(770)
Interest rate swaps	-	-	-	-
Embedded derivatives	-	-	21,098	21,098
Total	-	-	57,818	57,818

31 December 2019
Financial assets at fair value through OCI	-	-	39,592	39,952

Financial assets at fair value through OCI	-	-	39,592	39,952
Redemption Options share contracts	-	-	(770)	(770)
Interest rate swaps	-	-	(15)	(15)
Embedded derivatives	-	-	40,095	40,095
Total	-	-	78,902	78,902

18. GENERAL COMMITMENTS AND CONTINGENCIES

(a) Contractual commitments

Commitments are presented on a discounted basis, using an interest rate of 3M LIBOR + 5.33% p.a., 3M EURIBOR + 5.33% p.a. or 3M ROBOR + 5.33% p.a.

As at 30 September 2020, contractual commitments for capital expenditure amounted to approximately EUR 85,971 (31 December 2019: EUR 125,967) and contractual operating commitments amounted to approximately EUR 99,378 (31 December 2019: EUR 98,488).

(b) Letters of guarantee

As of 30 September 2020, there were bank letters of guarantee and letters of credit issued in amount of EUR 14,315 mostly in favour of content and satellite suppliers and for participation to tenders (31 December 2019: EUR 93,527).

We have cash collateral agreements for issuance of letters of counter guarantees. As at 30 September 2020 we had letters of guarantee issued in amount of EUR 1,114 (31 December 2019: EUR 1,114). These agreements are secured with moveable mortgage over cash collateral accounts.

(c) Legal proceedings

Uncertainties associated with the fiscal and legal system

The tax frameworks in Romania and other Eastern and Central Europe countries are subject to frequent changes (some of them resulting from EU membership, others from the domestic fiscal policy) and often subject of contradictory interpretations, which might be applied retrospectively.

Furthermore, the Romanian and other Eastern and Central Europe governments work via a number of agencies authorized to carry on audits of the companies operating in these countries. These audits cover not only fiscal aspects but also legal and regulatory ones that are of interest to these agencies.

The Dutch, Romanian and other Eastern and Central Europe Fiscal legislation include detailed regulations regarding transfer pricing between related parties and includes specific methods for determining transfer prices between related prices at arm's length. Transfer pricing documentation requirements have been introduced so that taxpayers who carry out transactions with affiliated parties are required to prepare a transfer pricing file that needs to be presented to the tax authorities upon request.

The Company and its subsidiaries entered into various transactions within the Group, as well as other transactions with related parties. In light of this, if observance of arm's length principle cannot be proved, a future tax control could challenge the values of transactions between related parties and adjust the fiscal result of the Company and/ or its subsidiaries with additional taxable revenues/ non-deductible expenses (i.e. assess additional profit tax liability and related penalties).

Group management believes that it has paid or accrued all taxes, penalties and interest that are applicable, at the Company and subsidiaries level.

During the year, the Group was involved in a number of court proceedings (both as a plaintiff and a defendant) arising in the ordinary course of business. In the opinion of the management, there are no current legal proceedings or other claims outstanding which could have a material effect on the result of operations or financial position of the Group and which have not been accrued or disclosed in these consolidated financial statements. Specifically, for the litigations described below the Group did not recognize provisions (except for limited amounts in limited cases) as management assessed that the outcome of these litigations is not more likely than not to result in significant cash outflows for the Group.

Pecuniary claim filed by the National Cinematography Centre

On 4 November 2016, the National Cinematography Centre filed before the Bucharest Tribunal a claim for payment with respect to a value of EUR 1,200, including principal and accessories as royalty tax due by law to this claimant. In March 2019, the Bucharest Court of Appeal admitted the National Cinematography Centre's claim in part by granting to the claimant RON 3,900,000 (by maintaining the first court solution). This amount has been recorded as a provision on the statement of financial position. Although already enforceable, this decision is not final and we filed an appeal in this case. The High Court for Cassation and Justice established the first hearing on the appeal on December 16, 2020.

For great part of the amounts claimed by the National Cinematography Centre we continue to consider the claim as ungrounded and abusive, and we will continue to resist to these claims, as the amounts that we deem legitimate to be paid by RCS&RDS are significantly smaller.

Litigation with Electrica Distribuţie Transilvania Nord in relation to a concession agreement between RCS&RDS and the Oradea municipality

In 2015, Electrica Distribuţie Transilvania Nord S.A. (the incumbent electricity distributor from the North-West of Romania) challenged in court the concession agreement we have concluded with the local municipality from Oradea regarding the use of an area of land for the development of an underground cable trough, arguing that the tender whereby we obtained the concession agreement was irregularly carried out. Furthermore, Electrica Distribuţie Transilvania Nord S.A. claims that the cable trough is intended to include electricity distribution wires that would breach its alleged exclusive right to distribute electricity in the respective area.

Based on our request, the trial was suspended pending final settlement of a separate lawsuit in which two Group companies are challenging the validity of the alleged exclusivity rights of incumbent electricity distributors (this claim was denied by the court of first instance). Should the final court decision be unfavourable to us, it may result in a partial loss of our investment in the underground cable trough.

Motion filed by certain US individuals against the Company, RCS&RDS, RCS Management S.A., DIGI Távközlési és Szolgáltató Kft, and its subsidiary, i-TV Digitális Távközlési Zrt.

On 2 May 2017, certain individuals (William Hawkins, Eric Keller, Kristof Gabor, Justin Panchley, and Thomas Zato) (collectively, the "Plaintiffs") filed in the United States District Court for the Eastern District of Virginia – Alexandria Division (the "US Court") a motion to enforce a default judgment (the "Motion") that was issued in favour of the Plaintiffs by the US Court in the Civil Action No. 1:05-cv-1256 (LMB/TRJ) in February 2007 (the "Default Judgment") against Laszlo Borsy, Mediaware Corp., MediaTechnik Kft., Peterfia Kft, and DMCC Kommunikacios Rt. (the predecessor to i-TV Digitális Távközlési Zrt.) (the "Defendants") jointly and severally. Additionally, the Motion sought to extend the enforcement of the Default Judgment against the following entities that were not parties to the original proceedings and not named in the Default Judgment: i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A., and the Company.

The Default Judgment, of which enforcement is sought before the US Court, awarded the Plaintiffs approximately USD 1,800,000 in damages resulting from alleged unpaid debts that appear to have been caused by Laszlo Borsy and several related entities. It also ordered that the ownership interest of Defendants Mediaware Corp., MediaTechnik Kft., Peterfia Kft, and DMCC Kommunikacios Rt. be distributed to the Plaintiffs in total percentage of 56.14%. Finally, it prohibited Defendants Laszlo Borsy, Mediaware Corp., MediaTechnik Kft., Peterfia Kft, and DMCC Kommunikacios Rt. from disposing of or dissipating any assets of the initial defendant entities or engaging in any corporate transactions without the consent of the Plaintiffs.

The Motion alleges that i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft. and the upstream separate companies RCS&RDS, the Company, and RCS Management S.A. violated the Default Judgment, to which these companies were not party, when, ten years ago, DIGI Távközlési és Szolgáltató Kft. entered the share capital of DMCC Kommunikacios Rt. (i-TV Digitális Távközlési Zrt.'s predecessor).

For more than ten years after the Default Judgment was issued in 2007, the Plaintiffs filed no actual claim against i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A. or the Company. During the same period, the Plaintiffs never sought to enforce the Default Judgment against i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A., or the Company in Hungary or another foreign jurisdiction. Nor did they seek to enforce the Default Judgment against any of the Defendants in their domestic countries.

We deem the Motion, which requests payment from the Defendants, i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A. and the Company, jointly and severally, of USD 1,800,000, plus interest, as well as other compensation, damages, fees and expenses, as vexatious for numerous legal and factual reasons. Those reasons include, but are not limited to, the lack of any actual proof of fraud on behalf of either of i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A., or the Company, the Plaintiffs' passivity for more than ten years, the lack of jurisdiction of the US Court over i-TV Digitális Távközlési

Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, S.A., RCS Management S.A., or the Company, as well as the fact that the Motion, if granted, would go against mandatory legal provisions of any of the jurisdictions where i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A., or the Company operate.

On 8 February 2018, the US Court granted the Defendants' motion to vacate and dismissed the entire lawsuit for lack of subject matter jurisdiction. The US Court also vacated all prior orders entered in the case (the "US Court's Decision"). The Plaintiffs filed an appeal against the US Court's Decision with the United States Court of Appeals for the Fourth Circuit (the "Appellate Court"). The Defendants also filed a conditional cross-appeal that was to be considered only if the Appellate Court would have admitted the appeal filed by the Plaintiffs.

On 15 August 2019, the Appellate Court dismissed the appeal filed by the Plaintiffs regarding the introduction in the judgement of RCS&RDS, RCS Management S.A., the Company and DIGI Távközlési és Szolgáltató Kft.. The Appellate Court noted that, none of the mentioned companies have sufficient contacts with US in order to extend over them the US jurisdiction. Consequently, the Appellate Court decided to eliminate these companies from the case. On the other hand, the Appellate Court decided that i-TV Digitális Távközlési Zrt. doesn't have the same treatment taking into consideration that at the moment of the initial judgement was named party to that trial.

On 29 August 2019, the Plaintiffs challenged the decision issued by the Appellate Court to the same court (in plen, en banc), and such motion was dismissed by the Appellate Court. The Plaintiffs had the opportunity to challenge this ruling in front of the Supreme Court. However, the Plaintiffs have failed to file an appeal in the applicable deadline. Accordingly, the Appellate Court's decision is final, which means that the Company, RCS&RDS, RCS Management S.A., and DIGI Tavkozlesi es Szolgaltato Kft, are effectively dismissed from the case. As a result, only i-TV remains to act as a defendant in the case. Further, the US Court will resume the judgment of the case as regards i-TV. Additionally, the opinion of external lawyers representing the Company in this litigation is that any judgement issued by the US Court against i-TV would not be enforceable and it will need to be first recognised in the relevant jurisdiction, subject to foreign judgement's compliance with the respective jurisdiction's mandatory legal provisions.

On 27 April 2020, i-TV filed a motion to dismiss the Plaintiff's contempt claim for alleged failure of complying with the decision issued in October 2006. The plaintiffs have submitted their reply to the motion to dismiss, filed on April 27th, 2020. On 27 August 2020, i-TV's motion to dismiss the plaintiff's contempt claim regarding the failure of complying with the decision of October 2006 was granted. The court based its decision on the fact that the plaintiffs showed lack of diligence, the defense of laches being admitted. On 24 September 2020 the plaintiffs filed an appeal against the decision from 27 august. The Defendant must submit the Response brief until 23 December 2020, while the Plaintiff shall submit the Plaintiff's brief until 13 January 2021.

Investigation by the Romanian National Anti-Corruption Agency brought to court

In 2009, RCS&RDS entered into a joint venture with Bodu S.R.L. (the "JV") with respect to an events hall in Bucharest. This venue enjoys a good location in the city and is relatively close to our headquarters. We believed at the time that the property would have been very helpful to the development of our media business and, potentially, other businesses and desired to acquire the venue from Bodu S.R.L. However, Bodu S.R.L. only agreed to a joint venture arrangement, making certain representations concerning future economic benefits of its joint development, which we accepted in good faith. At the time when RCS&RDS entered into the JV, Bodu S.R.L. was owned by Mr. Bogdan Dragomir, a son of Mr Dumitru Dragomir, who served as the President of the Romanian Professional Football League (the "PFL").

In 2013, certain individuals within Antena Group (with which we had a number of ongoing litigations at the time) blackmailed Mr. Ioan Bendei (who at the time was a member of the Board of Directors of RCS&RDS and is a director of Integrasoft S.R.L. (see below)) threatening to report him (and us) to the prosecuting authorities. They alleged that our investment into the JV represented a means to extend an unlawful bribe to Mr. Dumitru Dragomir in exchange for his alleged assistance with granting to us content rights to Romania's national football competitions administered by the PFL and to certain subsequent modifications to the payment terms of content rights awarded through an auction process in 2008. Mr. Ioan Bendei reported the blackmailers to the prosecutors, which resulted in the General Manager of Antena Group being convicted of blackmail and incarcerated. However, Antena Group's allegations against Mr. Ioan Bendei were also brought to the attention of the Romanian National Anti-Corruption Agency (the "DNA").

By 2015, the JV became virtually insolvent, as initial expectations on its prospects had failed to materialize. In 2015, in order to recover the EUR 3,100 investment it had made into the JV from 2009 to 2011 and to be able to manage the business of the events hall directly and efficiently, RCS&RDS entered into a settlement agreement with Bodu S.R.L. In 2016, in accordance with that settlement agreement, RCS&RDS acquired (at a discount to nominal value) Bodu S.R.L.'s outstanding bank debt (which was secured by its share of, and assets it contributed to, the JV). Thereafter, RCS&RDS set-off its acquired receivables against Bodu S.R.L. in exchange for the real estate and business of the events hall. Bodu S.R.L. was replaced as RCS&RDS's JV partner by Integrasoft S.R.L., one of our Romanian subsidiaries.

Following this acquisition, in addition to its investigation of Antena Group's bribery allegations in relation to our investment into the JV, the DNA opened an enquiry as to whether the transactions that followed (including the 2015 settlement and the 2016 acquisition) represented unlawful money-laundering activities.

On 7 June 2017, Mr. Bendei Ioan, member of the Board of directors of RCS&RDS, was indicted by the DNA in connection with the offences of bribery and accessory to money laundering. Mr. Bendei Ioan was also placed under judicial control. On 25 July 2017, RCS&RDS was indicted by the DNA in connection with the offences of bribery and money laundering, Integrasoft S.R.L. (one of RCS&RDS's subsidiaries in Romania) was indicted for the offence of accessory to money laundering, Mr. Mihai Dinei (member of the Board of directors of RCS&RDS), was indicted by the DNA in connection with the offences of accessory to bribery and accessory to money laundering. On 31 July 2017, Mr. Serghei Bulgac (Chief Executive Officer of RCS&RDS and General Manager and President of the Board of Directors of RCS&RDS), was indicted by the DNA in connection with the offence of money laundering.

The offences of bribery, of receiving bribes and the accessories to such offenses under investigation are alleged to have been committed through the 2009 joint-venture between RCS&RDS and Bodu SRL with respect to the events hall in Bucharest in relation to agreements between RCS&RDS and LPF with regard to the broadcasting rights for Liga 1 football matches, while the offences of money laundering and accessory to money laundering are alleged to have been perpetrated through RCS&RDS's acquisition of the Bodu S.R.L. events hall in 2016.

On 15 January 2019, the Bucharest Tribunal dismissed the giving of bribe related allegations against RCS&RDS and its past and current directors on the basis that they had become time-barred, convicted RCS&RDS in connection with the offence of money laundering for which the court applied a criminal fine in the amount of RON 1,250,000. The Bucharest Tribunal's decision also decided on the confiscation from RCS&RDS of an amount of EUR 3,100 plus RON 655,000 and it maintained the seizure over the two real estate assets first instituted by the DNA. Integrasoft S.R.L. was convicted in connection with the offence of accessory to money laundering for which the court applied a criminal fine of RON 700,000. Mr. Bendei Ioan was convicted to a 4 years imprisonment sentence in connection with the offence of accessory to money laundering resulting from his capacity of director of Integrasoft S.R.L.

Mr. Serghei Bulgac (Chief Executive Officer and President of the board of directors of RCS&RDS), Mr. Mihai Dinei (member of the board of directors of RCS&RDS), as well as Mr. Alexandru Oprea (former Chief Executive Officer of RCS&RSD) were acquitted in connection with all the accusations brought against them by the DNA.

In the same case file, Mr. Dumitru Dragomir was convicted to a 4 years imprisonment sentence in connection with the offences of receiving of bribe and accessory to money laundering, Mr. Bădiță Florin Bogdan (director of Bodu S.R.L.) was convicted to a 4 years imprisonment sentence in connection with the offences of accessory to the receiving of bribe and to money laundering, the company Bodu S.R.L. was convicted in connection with the offences of accessory to the receiving of bribe and money laundering, while Mr. Bogdan Dumitru Dragomir was acquitted in connection with all the accusations brought against him by the DNA.

The decision also cancels the joint-venture agreement from 2009 concluded between RCS&RDS and Bodu S.R.L., as well as all the agreements concluded between RCS&RDS, Bodu S.R.L. and Integrasoft S.R.L. in 2015 and 2016.

We strongly deem the Bucharest Tribunal's decision to be profoundly unjust, incorrect and ungrounded. This decision is neither final nor enforceable and the appeal can be judged only once we receive the written reasoning of the decision taken by the first instance. We have anyway already challenged this decision to the Bucharest Court of Appeal.

We strongly believe that RCS&RDS, INTEGRASOFT S.R.L. and their current and former officers have acted appropriately and in compliance with the law, and we strongly restate that we will continue to defend against all the above allegations.

Reassessment by the Hungarian Competition Authority of limited aspects in connection with the Invitel acquisition

In connection with the decision issued by the Hungarian Competition Authority (Gazdasági Versenyhivatal – "GVH") in May 2018 (the "Initial Decision") approving the acquisition by our Hungarian subsidiary – DIGI Távközlési és Szolgáltató Kft. ("Digi HU"), as the purchaser, of shares representing in total 99.998395% of the share capital and voting rights of Invitel Távközlési Zrt. ("Invitel") from Ilford Holding Kft. and InviTechnocom Kft., acting as sellers (the "Transaction" – the completion of which we have disclosed to the market on 30 May 2018), on 14 November 2018, the GVH issued several decisions whereby it formally withdrew the Initial Decision and it opened a new investigation ("New Procedure") for reassessing limited aspects in connection with certain settlements where i-TV Digitális Távközlési Zrt. ("i-TV" – one of Digi HU's subsidiaries in Hungary, representing a minor part of its business) and Invitel overlap. For the duration of the New Procedure, Digi HU's ownership and control over Invitel was not affected.

GVH's stated reason for withdrawing the Initial Decision is based on allegations that Digi HU has failed to proactively comment during the initial assessment on certain data regarding the territorial scope of certain telecommunications services provided by i-TV, which has been used by the GVH in its Initial Decision. On that basis, the GVH also imposed a fine on Digi HU of approximately EUR 260 (HUF 90,000,000). In December 2018, we have challenged in a competent Hungarian court parts of the GVH's decision alleging Digi Hu's failure to act in a certain manner, as well as the size of the fine. The court of first instance (i) reduced the fine imposed on DIGI HU by the GVH from HUF 90,000,000 (approximately EUR 260) to HUF 45,000,000 (approximately EUR 130). (ii) confirmed the authority's decision regarding DIGI HU's liability for failure to proactively comment on certain data regarding the territorial scope of certain telecommunications services provided by i-TV, but also ruled that (iii) the Initial Decision was adopted not only because of Digi HU's conduct, but also that GVH had failed itself to properly gather the necessary information at the time of the evaluation leading to the Initial Decision, which was not exclusively due to Digi HU's failure to proactively act in the required manner. GVH filed an appeal and Digi HU filed a cross-appeal against the court's decision. The judgment of the Curia approved the first instance decision and confirmed the reasoning according to which GVH should have requested confirmation with respect to the data on which it based its Initial Decision. The judgment is final and binding.

Although we continue to strongly believe that Digi HU fully cooperated during the initial procedure by providing complete and accurate information, and that GVH's decision to withdraw the Initial Decision and to apply a fine is incorrect, in order to address GVH's concerns in connection with the Transaction in the context of the New Procedure, in consultation with GVH Digi HU proposed as remedial measure sale by Invitel to a third party of its operations in 14 Hungarian settlements and parts of its network in the Szeged settlement that overlapped with DIGI Hungary's own network there, the underlying sale and purchase agreement having been executed on January 9, 2020. Following the proposal of this remedial package, on March 18, 2020 GVH authorised again the Transaction, subject to fulfilment of the remedial measures within three months as of the communication of its approval issued in the New Procedure.

By way of its decision, the GVH amended the final decision issued in the case. The reason for this was that one of the i-TV overlapping settlements was incorrectly included in the final decision, which fact, however, did not affect the merits of the case. As a result of this incorrect data, the GVH also imposed a fine of HUF 20,000,000 (approximately EUR 58) on DIGI HU. DIGI HU challenged the order with respect to the imposition of the fine before court.

Dispute with the Hungarian National Media and Telecommunication Authority ("NMHH") relating to its refusal to allow the Company to participate in an auction for mobile telecommunication frequencies in Hungary

On September 13, 2019, the NMHH issued an order refusing to allow the Company to participate in a public auction for the acquisition of mobile telecommunication frequencies in Hungary, which we intended to use in the development of our mobile telecommunication network in the country.

The main argument of the NMHH was that the Company did not actually intend to participate in the auction procedure in good faith as, allegedly, its bid was merely a way to avoid potential disqualification had the bid been submitted by DIGI Hungary. In turn, as NMHH alleged, DIGI Hungary would not have been allowed to participate in the first place as a consequence of its alleged violations during Invitel's acquisition, a review of which is pending. The NMHH erroneously alleged that, had the bid been successful, the Company would not have been able to provide mobile telecommunication services in Hungary because it was not a registered service provider and did not have sufficient infrastructure and frequency bandwidth.

The Company challenged the NMHH's order to the President of NMHH. As it stated in the appeal, the NMHH's order had been rendered based on subjective allegations, rather than objective grounds and applicable procedural requirements. We believe that the Company met all applicable requirements of the auction documentation and there are no objective grounds to refuse its registration as a participant in the auction. The Company had acted in good faith and had not, and had no intention to, mislead the NMHH. Furthermore, we believe that even if the bid was submitted by DIGI Hungary, there were no formal grounds to deny its registration as a participant.

While our appeal to the President of the NMHH was pending, the auction procedure was suspended. On November 27, 2019, the appeal was rejected on similar reasoning stated in the initial order. On November 29, 2019, we appealed that decision the competent Hungarian court, the Metropolitan Court of Budapest.

We also filed for injunctive reliefs to suspend the auction pending judicial review of our claims three times, which were rejected both by the first and the second instance courts.

By way of its judgment issued on November 4, 2020, the Metropolitan Court of Budapest rejected the Company's statement of claims. The first instance court established that the procedural rules of the 5G auction were in line with the applicable statutory rules and the NMHH lawfully rejected the Company's registration in the auction. The Company may file an appeal against the judgment with the Curia within 15 days.

Furthermore, on April 16, 2020, we filed a statement of claim requesting the Metropolitan Court to annul NMHH's decision on the merits of the case issued on April 1, 2020, which was forwarded by NMHH to the court. Magyar Telekom joined the court proceedings as an intervenor in favor of NMHH. The Metropolitan Court set the date for the court hearing in the case, which is January 13, 2021.

In addition to the above, there are two court proceedings pending with respect to NMHH's rejections of our requests to access the case file of the auction procedure.

On May 15, 2020 we received the judgment of the Metropolitan Court with respect to the Company's statement of claim regarding the denial of access to the notice of public interest which was filed in the auction procedure and which was referred to by NMHH in the order refusing the Company's registration in the auction procedure. It annulled NMHH decision and established that the Company would have been entitled to access the non-confidential version of the notice of public interest. The court ordered the NMHH to commence administrative proceedings and allow access for the Company to the case file. As a result, the Company could access the non-confidential version of the notice of public interest in July 2020.

Dispute with the National Authority for Consumer Protection ("NACP") in relation to 2019 increases of our tariffs in Romania

In the beginning of 2019, RCS&RDS increased certain tariffs charged to Romanian customers for electronic communication services. In April and May 2019, the NACP carried out a review of those increases (along with their review of prices charged by our competitors), as a result of which it issued a minutes sanctioning RCS&RDS with a fine of RON70,000 for allegedly having violated the law in so increasing the tariffs. According to the NACP, those increases were the result of RCS&RDS transferring to its customers the costs that had increased on account of the costs imposed by the law, the authority making reference to the emergency Government Ordinance no.114, dated December 28, 2018. The NACP also ordered RCS&RDS the termination of the allegedly unfair commercial practice which can result in the reverse of the price increases.

We believe that the NACP's minutes and order are entirely without merit as (i) the disputed tariff increases were in no way unlawful; and (ii) there were solid economic reasons therefor, which were not related to additional costs imposed by legislation changes. In particular, from 2009 to 2019 RCS&RDS did not increase the main prices for its

electronic communication services; therefore the 2019 increases were the function of economic developments over the past 10 years (such as increases in operational costs (including wages), significant depreciation of the RON against the EUR and the USD, significant inflation and a series of changes in VAT rates, among others), as well as very significant investments by the RCS&RDS in the development of its services. As a private company operating in a competitive market environment, the RCS&RDS is entitled by law to direct its own pricing policy.

On June 14, 2019, RCS&RDS appealed the NACP's minutes to a Romanian court of the first instance (thereby suspending their application). The appeal was granted on November 18, 2019, under which the court cancelled the minutes. The NACP filed an appeal against the judgement. On 27 October 2020, the court dismissed the appeal filed by the NACP. The decision is definitive.

On July 18, 2019, RCS&RDS filed for injunctive relief requesting that the NACP's order be suspended. The injunctive relief was granted on August 9, 2019, but was appealed by the NACP. On the 3rd of June 2020, the court dismissed the appeal filed by the NACP.

On September 26, 2019, RCS&RDS filed to a Romanian court of the first instance a substantive appeal against the NACP's order itself. At the hearing from March 17, 2020 the first instance scheduled the issuance of the decision on the substantive appeal for March 25, 2020.

On 22 April 2020, the first court admitted RCS&RDS claim and annulled the NACP order. NACP can challenge the court decision in 15 days as of the communication of the decision.

19. SUBSEQUENT EVENTS

COVID-19 outbreak

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. As a result, restriction measures have been taken in the territories were we have operations.

For details regarding the up-date of the litigations, please see Note 18 (c) above.

20. EBITDA

In the telecommunications industry the benchmark for measuring profitability is EBITDA (earnings before interest, taxes, depreciation and amortization). EBITDA is a non-IFRS accounting measure.

For the purposes of disclosure in these notes, EBITDA is calculated by adding back to consolidated operating profit/(loss) our charges for depreciation, amortization and impairment of assets. Our Adjusted EBITDA is EBITDA adjusted for the effect of non-recurring and one-off items.

	Three months ended	Three months Nine months	Nine months
			ended 30 September	ended 30 September
	30 September 2020	2019	2020	September
				2019
Revenues and other income	327,559	299,408	950,596	874,644
EBITDA
Operating profit	47,943	52,333	122,731	105,553
Depreciation, amortization and impairment	74,843	75,200	227,885	218,860
EBITDA	122,786	127,533	350,616	324,413
Other income		(11)	(1,153)	-
Other expenses	320	-	3,510	2,496
Adjusted EBITDA	123,106	127,522	352,973	326,909
Adjusted EBITDA (%)	37.58%	42.59%	37.13%	37.38%
Adjusted EBITDA excl. IFRS 16	106,399	105,151	299,704	279,564
Adjusted EBITDA (%)excl. IFRS 16	32.48%	35.12%	31.53%	31.96%

Starting with January 1, 2019, the Company adopted the IFRS 16. The impact of adopting IFRS 16 on EBITDA was EUR 16,707 for the three month period ended 30 September 2020 (EUR 53,269 for the nine month period ended 30 September 2020).

The impact of adopting IFRS 16 on EBITDA was EUR 22,370 for the three month period ended 30 September 2019 (EUR 47,345 for the nine month period ended 30 September 2019).

For the nine months period ended 30 September 2020, other income is related to share option plans vested and are expected to be one-time events (for details, please see Note 16) in amount of 1,153 EUR.

For the nine months period ended 30 September 2020, other expenses include the net result from the sales of Invitel's operations in selected locations in amount of EUR 3,510 (for details, please see Note 14), and other expenses related to share option plans vested and are expected to be one-time events (for details, please see Note 16) in amount of 320 EUR.

For the nine months ended 30 September 2019, EBITDA was adjusted to exclude Other expenses of EUR 2,496 related to the share option plan from 2018 and 2017.

19. FINANCIAL INDICATORS

Financial Indicator	Value as at 30 September 2020
Current ratio
Current assets/Current liabilities	0.42
Debt to equity ratio
Long term debt/Equity x 100
(where Long term debt = Borrowings over 1 year)	829%
Long term debt/Capital employed x 100
(where Capital employed = Long term debt+ Equity)	89%
Trade receivables turnover
Average receivables/Revenues x 270	38.85 days
Non-current assets turnover
(Revenues/Non-current assets)	0.69

On behalf of the Board of directors of Digi Communications N.V.

Serghei Bulgac, Valentin Popoviciu CEO Executive Director

AI Terminal

Digi Communications N.V.

6226_rns_2020-11-13_6126831b-1dd5-479f-aeb0-c313b58ef8a9.pdf

DIGI COMMUNICATIONS N.V. ("Digi")

Important Information

Cautionary Note Regarding Forward-Looking Statements

Operating and Market Data

Non-Gaap Financial Measures

Rounding

Overview

Recent Developments

COVID-19 outbreak

Basis of Financial Presentation

Functional Currencies and Presentation Currency

Presentation of Revenue and Operating Expenses

Exchange rates

Growth in Business, RGUs and ARPU

Historical Results of Operations

Revenue

Total operating expenses

Depreciation, amortization and impairment of tangible and intangible assets

Depreciation of property, plant and equipment

Amortization of non-current intangible assets

Amortization of right of use

Amortization of program assets

Other income/(expenses)

Operating profit

Net finance expense

Profit before taxation

Income tax expense

Net profit for the period1

Liquidity and Capital Resources

Historical cash flows

DIGI COMMUNICATIONS NV

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS Page

GENERAL INFORMATION

DIGI Communications N.V. Interim Condensed Consolidated Statement of Financial Position for the period ended 30 September 2020

DIGI Communications N.V. Interim Condensed Consolidated Statement of Comprehensive Income for the 9 month period ended 30 September 2020 (all amounts in EUR '000, unless specified otherwise)

DIGI Communications N.V.

Interim Condensed Consolidated Cash Flow Statement for the 9 month period ended 30 September 2020

DIGI Communications N.V. Interim Condensed Consolidated Statement of Changes in Equity for the period ended 30 September 2020 (all amounts in EUR '000, unless specified otherwise)

DIGI Communications N.V. Interim Condensed Consolidated Statement of Changes in Equity for the period ended 30 September 2020 (all amounts in EUR '000, unless specified otherwise)

1. CORPORATE INFORMATION

Re-issue of previously issued financial information for the nine month period ended 30 September 2019

2.1 BASIS OF PREPARATION

(a) Statement of compliance

2.1 BASIS OF PREPARATION (CONTINUED)

(b) Basis of measurement

(c) Judgements and estimates

(d) Functional and presentation currency

2.2. GOING CONCERN

2.3 SIGNIFICANT ACCOUNTING POLICIES

Amendments to IFRS 3: Definition of a Business

Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark Reform

Amendments to IAS 1 and IAS 8: Definition of Material

Conceptual Framework for Financial Reporting issued on 29 March 2018

Covid-19-Related Rent Concessions Amendment to IFRS 16

2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Classification of Liabilities as Current or Non-current - Amendments to IAS 1

Improvements to International Financial Reporting Standards - 2018-2020 cycle (issued in May 2020)

• IFRS 9 Financial Instruments - Fees in the '10 per cent' test for derecognition of financial liabilities

3. SEGMENT REPORTING

3. SEGMENT REPORTING (continued)

3. SEGMENT REPORTING (continued)

3. SEGMENT REPORTING (continued)

4. PROPERTY, PLANT AND EQUIPMENT

Acquisitions and disposals

5. RIGHT OF USE ASSETS

6. NON-CURRENT INTANGIBLE ASSETS, CURRENT PROGRAMME ASSETS

a) Intangible assets

Acquisitions

Non-current intangible assets

6. NON-CURRENT INTANGIBLE ASSETS AND PROGRAMME ASSETS (CONTINUED)

Goodwill

Impairment testing of goodwill

b) Programme assets

7. EQUITY

8. INTEREST-BEARING LOANS AND BORROWINGS

8. INTEREST-BEARING LOANS AND BORROWINGS (continued)