Representation of the Members of the Board of Directors. (according to the article 5 par.2 of Law 3556/2007)

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2 Representation of the Members of the Board of Directors (according to the article 5 par.2 of Law 3556/2007) - Georgios Katsanevakis, 1 st Vice-Chairman - Spyridon Protopapadakis, 2 nd Vice-Chairman - Ioannis Vardinoyiannis, Managing Director Certify, as far as we know: a) the interim (separate and consolidated) financial statements of the Company for the period from 1 January 2008 to 30 June 2008, prepared according to the applicable International Financial Reporting Standards, present truly and fairly the assets and liabilities, the equity and the financial results of the Company Anek Lines SA, as well as of the consolidated companies, according to article 5 (par.3 to 5) of Law 3556/2007, and b) the semi-annual report of the Board of Directors presents in a truthful way the information required based on par. 6 of article 5 of Law 3556/2007. Chania, 26 August 2008 The 1 st Vice-Chairman The 2 nd Vice-Chairman The Managing Director GEORGIOS G. SPYRIDON I. IOANNIS I. VARDINOYIANNIS KATSANEVAKIS PROTOPAPADAKIS ID Card No. N ID Card No. AA ID Card No. Π ANEK LINES S.A. COMP.REG.NO /06/B/86/07 KARAMANLI AVE., CHANIA, CRETE TEL. : , FAX: info@anek.gr E

3 TABLE OF CONTENTS SEMI-ANNUAL DIRECTOR S REPORT 4 AUDIT REPORT ON INTERIM FINANCIAL STATEMENTS 7 INTERIM FINANCIAL STATEMENTS AS OF 30 JUNE INCOME STATEMENT - HALF YEAR INCOME STATEMENT - SECOND QUARTER 11 BALANCE SHEET 12 STATEMENT OF CHANGES IN EQUITY 13 CASH FLOW STATEMENT 14 INFORMATION AND EXPLANATORY NOTES TO THE INTERIM FINANCIAL STATEMENTS General information on the Company and the Group Preparation basis of the financial statements and accounting principles Seasonal nature of business activities Fixed assets / Investments in property Investments in subsidiaries & affiliates Inventories Trade receivables and other short-term receivables Financial assets at fair value through profit and loss Cash and cash equivalents Long-term borrowings Short-term borrowings Income tax Provision for retirement benefits Trade payables and other short-term liabilities Share capital/ Share premium Reserves Earnings / (losses) per share Segmental information Cost of sales Financial income and expenses Related parties transactions Commitments Contingent liabilities/ litigious disputes or disputes in arbitration Post-balance events 29 INFORMATION & DETAILS FOR THE FIRST HALF OF USE OF PROCEEDS REPORT FROM SHARE CAPITAL INCREASE 32 This semi-annual report was approved for publication by the Board of Directors on 26 August 2008, and is available at The attached financial statements have been translated from the Greek original version. F

4 SEMI-ANNUAL DIRECTOR S REPORT To the Shareholders of ANEK LINES S.A. I. PROGRESS, PERFORMANCE AND FINANCIAL STANDING The seasonal nature is the main characteristic of the passenger shipping industry. It has been noticed that, due to the intense seasonal nature of revenue, high profitability of shipping companies is recorded during summer months, especially during the third quarter each year. As a result, the figures for the first six-month period are not representative of the entire year. More specifically, the transportation of passengers and vehicles is particularly increased during summer months due to tourism and holidays, while the transportation of trucks demonstrates slight fluctuations during the year. In general, the results for the first six-month period of 2008 compared to the same period last year have been mainly affected by the strong rally in oil prices. The rise in fuel prices had a significant effect on the transportation industry, with a direct impact on passenger shipping as well, since the largest part of operating costs pertains to the cost of fuel. The fall in oil prices seen recently is expected to have a positive effect on the results for the 2 nd six-month period, improving the annual results of the Company as a total. The turnover during the 1 st six-month period of 2008 was increased by 3.1 million, 3% at a consolidated level, and by 1.0 million, or 1% at Company level, compared to the corresponding period of The Company s gross profit was reduced by 11.3 million, exclusively due to the rally of fuel prices. It is indicatively mentioned that the cost of fuel as a percentage to the cost of sales stood at 45% for the 1 st six-month period of 2008, from 36% for the same period in During the 2 nd six-month period of 2008, the consolidated turnover was increased by 6.2 million, or 10%, and by 4.6 million, or 8%, for the Company, reporting a significant improvement compared to the same period in Based on the current indications, the figures of the 3 rd quarter of 2008 are expected to be significantly improved in relation with the corresponding period of It should be noted that, as of , both the quick ratio at 1.3 (1.9 as of ) and the cash ratio at 1.2 (compared to 1.8) remain above 1, which demonstrates that the G

5 Company s liquidity is adequate to successfully meet the current cash needs. With regard to debt and capital structure ratios, it is mentioned that the Debt to Equity ratio as of stood at 57% (59% as of ) and the Equity to Borrowings ratio stood at 73% (compared to 75%), which demonstrates the effecting controlling of borrowing at safe levels for the Company. The 'Fixed Assets to Long-term borrowings ratio stood at 1.7 (from 1.5 on ) and proves that the Company provides the warranties required to adequately meet its obligations to creditors. II. IMPORTANT BUSINESS EVENTS a) 1 st SIX-MONTH PERIOD 2008 On 14 March 2008, the restructuring process of long-term debt was completed successfully and resulted in a new loan agreement between the Company and a syndicate of banks. This restructuring helped to achieve more favorable terms of repayment and reduction of the financial cost. On 18 May 2008, the Annual Ordinary General Meeting of the Company s Shareholders decided, inter alia, the distribution of results for 2007 and the allocation of a dividend of 0.05 per share ( 8.1 million in total). Moreover approved the decision of the Company s Board of Directors to extend the allocation of share capital increase which took place in 2007 until During the 1 st six-month period of 2008, and in the context of a more efficient restructuring of its lines, ANEK started a new route in Cyclades with the F/B PREVELIS and the results was much better than the expected. b) POST INTERIM EVENTS At the beginning of the 2 nd six-month period, ANEK took up the route from Piraeus to Chios- Mytilene-Thessaloniki, with the F/B LISSOS. Finally, the retrofit works on ELYROS, the Company s new vessel, were completed; the ship is expected to operate soon providing significant enforce to the ANEK fleet. H

6 III. MAIN RISKS AND UNCERTAINTIES FOR THE SECOND HALF OF 2008 Oil price risk The fuel cost, which represents the main part of the Group's operating costs, is affected by the volatile oil prices. This risk is partly hedged by adjustments to fares. Interest rate risk The Group s borrowings are Euribor rate linked. Cash flows may be affected by changes in interest rates, depending on market fluctuations. The Company s policy lies in rate volatility analysis, combined with financing needs. Other events The Company was called to appear at a hearing before the Competition Committee. The Company has already examined carefully all the Committee s issues and can ensure that there is not any significant matter that could cause a material impact. IV. IMPORTANT TRANSACTIONS WITH RELATED PARTIES The significant related party transactions are detailed in note 21 of the interim financial statements of Chania, 26 August 2008 The Company s Board of Directors I

7 AUDIT REPORT ON INTERIM FINANCIAL REPORTING To the Shareholders of ANEK LINES S.A. Introduction We have reviewed the accompanying separate and consolidated balance sheet of ANEK AE (the Company ) as at 30 June 2008, and the related separate and consolidated statements of income, changes in equity and cash flows for the six-month period then ended, as well as the selected explanatory notes that constitute the interim financial information, which is an integral part of the interim financial report under article 5 of L. 3556/2007. Management is responsible for the preparation and presentation of this interim condensed financial information in accordance with International Financial Reporting Standards as adopted by the European Union (EU) and which apply to interim financial information ( IAS 34 ). Our responsibility is to express a conclusion on this interim condensed financial information based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, to which the Greek Auditing Standards refer. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Greek Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard IAS 34. Without qualifying our review conclusion, we draw attention to: Note 12 in the Notes on the financial statements, where reference is made to the fact that the tax returns of the Parent Company for certain years have not been examined by the tax authorities and, as a consequence, the possibility exists of additional taxes and penalties being assessed at the time when the returns will be examined and will be accepted as final. The outcome of these tax inspections cannot be predicted at present and, therefore, no provision has been made in these financial statements in this respect. Report on Other Legal and Regulatory Requirements Further to the above interim financial information we have reviewed and all the other data of the interim financial report under article 5 of L. 3556/2007 and the authorized by this Law, J

8 Decisions of the Capital Market Commission. From the above review we ascertained that this interim financial report includes the data and information that are prescribed by the Law and the Decisions and is consistent with the accompanying financial information. Athens, 28 August 2008 Nikolaos G. Zaharias Emmanuel N. Diamantoulakis Institute of CPA Reg. No Institute of CPA Reg. No SOL S.A. Certified Public Accountants Auditors 3, Fok. Negri Street - Athens, Greece K

9 INTERIM FINANCIAL STATEMENTS AS OF 30 JUNE Any differences in units in the tables are due to the rounding of figures. L

10 I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e INCOME STATEMENT - HALF YEAR The Group Note The Company Revenue , , , ,571 Cost of sales 19 (106,632) (90,401) (91,114) (78,807) Gross profit 8,227 21,409 10,401 21,764 Other operating income 2,522 1, Administrative expenses (5,542) (5,328) (4,974) (4,764) Selling and marketing expenses (11,518) (11,649) (10,546) (10,773) Other operating expenses (803) (593) (716) (198) Earnings / (losses) before taxes, financing and investing results (EBIT) (7,114) 5,574 (5,353) 6,518 Financial expenses 20 (8,725) (8,647) (8,540) (8,605) Financial income Results from investing activities (233) Profit from associates Earnings / (losses) before taxes (14,818) (2,173) (12,942) (1,191) Income tax 12 (99) (174) (63) (69) Earnings / (losses) after taxes (14,917) (2,347) (13,005) (1,260) Attributable to: Equity holders of the Company (14,074) (1,714) - - Minority interests (843) (633) - - (14,917) (2,347) - - Earnings / (losses) per share - basic (in ) 17 (0,0873) (0,0203) (0,0806) (0,0149) Summary of results Earnings / (losses) before taxes, financing and investing results and depreciation (EBIITDA) (2,258) 13,807 (669) 13,923 Earnings / (losses) before taxes, financing & investing results (7,114) 5,574 (5,353) 6,518 Earnings / (losses) before taxes (14,818) (2,173) (12,942) (1,191) Earnings / (losses) after taxes (14,917) (2,347) (13,005) (1,260) The additional notes are an integral part of the above interim financial statements. DC

11 I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e INCOME STATEMENT 2 ND QUARTER The Group The Company Revenue 68,214 62,008 61,180 56,576 Cost of sales (59,558) (48,833) (51,293) (42,646) Gross profit 8,656 13,175 9,887 13,930 Other operating income 1,948 1, Administrative expenses (2,937) (2,802) (2,634) (2,474) Selling and marketing expenses (6,930) (7,009) (6,340) (6,578) Other operating expenses (215) (511) (167) (119) Earnings / (losses) before taxes, financing and investing results (EBIT) 522 4,051 1,165 5,190 Financial expenses (4,527) (4,535) (4,379) (4,511) Financial income Results from investing activities (19) Profit from associates Earnings / (losses) before taxes (3,358) 236 (2,529) 1,512 Income tax (56) (140) (31) (35) Earnings / (losses) after taxes (3,414) 96 (2,560) 1,477 Attributable to: Equity holders of the Company (3,014) Minority interests (400) (426) - - (3,414) Earnings / (losses) per share - basic (in ) (0.0183) (0.0156) Summary of results Earnings / (losses) before taxes, financing and investing results and depreciation 2,994 8,410 3,584 9,107 Earnings / (losses) before taxes, financing & investing results 522 4,051 1,165 5,190 Earnings / (losses) before taxes (3,358) 236 (2,529) 1,512 Earnings / (losses) after taxes (3,414) 96 (2,560) 1,477 The additional notes are an integral part of the above interim financial statements. DD

12 I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e BALANCE SHEET The Group The Company Note ASSETS Tangible fixed assets 4 396, , , ,848 Investments in property 4 2,228 2,249 1,171 1,192 Intangible assets Investments in subsidiaries ,625 4,625 Investments in associates 5 3,187 3, Other long-term receivables Total non-current assets 402, , , ,372 Inventories 6 12,754 12,008 11,491 10,809 Trade receivables 7 88,142 69,860 86,704 70,432 Other receivables and prepayments 7 5,865 6,800 5,081 5,181 Financial assets at fair value through profit & loss 8 3,306 1,492 3,290 1,476 Cash and cash equivalents 9 29,865 56,257 28,794 54,632 Total current assets 139, , , ,530 TOTAL ASSETS 542, , , ,902 LIABILITIES AND EQUITY Long-term borrowings , , , ,862 Deferred tax liabilities 1,368 1, Retirement benefits provisions 13 3,433 3,247 3,195 3,045 Other provisions Grants for assets 4 1,024 1, Total non-current liabilities 233, , , ,850 Short-term borrowings 11 36,992 44,235 34,621 43,016 Trade payables 14 41,085 32,424 33,840 27,747 Other current liabilities 14 37,650 12,711 33,928 10,457 Total current liabilities 115,727 89, ,389 81,220 Total liabilities 349, , , ,070 Share Capital , , , ,299 Share premium 15 1,080 1,195 1,080 1,195 Reserves 16 35,210 33,828 33,995 32,635 Retained earnings (9,083) 14,437 (7,727) 14,703 Total Equity holders of the Company 188, , , ,832 Minority interest 4,749 5, Total equity 193, , , ,832 TOTAL LIABILITIES AND EQUITY 542, , , ,902 The additional notes are an integral part of the above interim financial statements. DE

13 I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e STATEMENT OF CHANGES IN EQUITY The Group Note Share Capital Share premium Asset revaluation Other Retained reserves reserves earnings Total Minority interests Total Balance ,740-2,124 41,216 2, ,287 6, ,333 Net results for the period (1,714) (1,714) (633) (2,347) Dividends (9,678) (9,678) (139) (9,817) Share capital increase 101,559 1, , ,754 Additional acquisition in subsidiary - (5) (5) Transfer between reserves 69 (69) - - Net equity ,299 1,195 2,124 31, ,649 5, ,917 Balance ,299 1,195 2,124 31,704 14, ,759 5, ,463 Net results for the period (14,074) (14,074) (843) (14,917) Dividends 14 (8,065) (8,065) (111) (8,176) Transfer between reserves 16 1,382 (1,382) - - Expenses recognized directly to equity 15 (115) (115) (115) Net equity ,299 1,080 2,124 33,086 (9,083) 188,506 4, ,255 The Company Share Capital Share premium Asset revaluation Other Retained reserves reserves earnings Total Balance ,740-1,072 41,198 1, ,135 Net results for the period (1,260) (1,260) Dividends (9,678) (9,678) Share capital increase 101,559 1, ,754 Transfer between reserves 33 (33) - Net equity ,299 1,195 1,072 31,553 (168) 194,951 Balance ,299 1,195 1,072 31,563 14, ,832 Net results for the period (13,005) (13,005) Dividends 14 (8,065) (8,065) Transfer between reserves 16 1,361 (1,361) - Expenses recognized directly to equity 15 (115) (115) Net equity ,299 1,080 1,072 32,923 (7,727) 188,647 The additional notes are an integral part of the above interim financial statements. DF

14 I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e CASH FLOW STATEMENT Operating activities The Group The Company Profits / (losses) before taxes (14,818) (2,173) (12,942) (1,191) Adjustments for: Depreciation 5,158 8,356 4,906 7,486 Grants amortization (302) (123) (222) (81) Provisions Results of investing activities (100) (227) (71) (147) (Gain) / loss from disposal of property, plant & equipment (7) Exchange differences (10) (1) (1) 2 Financial expenses (less financial income) 7,534 8,222 7,378 8,188 Adjustments for changes of working capital accounts or related to operating activities: (2,106) 14,159 (502) 14,407 Decrease / (increase) of inventories (746) (695) (682) (370) Decrease / (increase) of receivables (18,953) (10,203) (18,050) (9,332) Increase/ (decrease) of liabilities (excluding borrowings) 26,238 8,587 22,471 6,610 Less: Interest and financial expenses paid (9,328) (5,062) (9,144) (5,027) Income tax paid (114) (337) (46) (229) Cash flows from operating activities (a) (5,009) 6,449 (5,953) 6,059 Investing activities Acquisition of affiliates, securities and other investments (1,374) (120) (1,374) (120) Proceeds from disposal of securities and other investments Purchase of tangible and intangible assets (31,518) (4,069) (27,421) (3,756) Proceeds from the sale of property, plant & equipment Interest received Dividends received Cash flows from investing activities (b) (30,713) (3,353) (26,737) (3,058) Financing activities Proceeds of share capital increase - 106, ,637 Share capital increase expenses paid (115) (3,883) (115) (3,883) Proceeds from borrowings 12,580-10,023 - Payment of borrowings (3,107) (25,752) (3,035) (25,485) Proceeds from grants Dividends paid (27) (13) (21) (3) Cash flows from financing activities (c) 9,331 77,106 6,852 77,266 Net increase/(decrease) in cash and cash equivalents (a) + (b) + (c) (26,392) 80,202 (25,838) 80,267 Cash and cash equivalents at the begging of the period 56,257 3,259 54,632 2,562 Cash and cash equivalents at the end of the period 29,865 83,461 28,794 82,829 The additional notes are an integral part of the above interim financial statements. DG

15 INFORMATION AND EXPLANATORY NOTES ON THE INTERIM FINANCIAL STATEMENTS DH

16 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e General information on the Company and Group The Parent Company was established in 1967 (Government Gazette 201/ ) under the corporate name Shipping Company of Crete S.A. trading as ANEK LINES (hereinafter ANEK or the Company ) and operates in the passenger ferry shipping sector. The Company s seat is located in the municipality of Eleftherios Venizelos, Prefecture of Chania Crete, and its registered offices are located on K.Karamanli Ave, Chania. The Company s shares have been listed on the Athens Exchange and traded under the large capitalization category. In addition to the Parent, the Group includes the following subsidiaries and affiliates with the following participation percentages: Group Registered Name Activity percentage Office Ag. Nikolaos LANE S.A % Passenger ferry shipping Lasithiou ETANAP S.A. 50% Stylos Production and distribution of Chania bottled water LEFKA ORI S.A. 62%* Stylos Production and trade of plastic Chania bottles and packaging products CHAMPION FERRIES L.T.D. 70% Marshall Islands Shipping ANEK HOLDINGS SA 99.5%** El.Venizelos, Tourism- participation in other Chania companies- consulting, etc. El.Venizelos, Sailing company under Law TC SAILING 97,5%*** Chania 959/79 ANEK LINES LUXEMBOURG S.A. 100% Luxembourg Special purpose company ANEK LINES ITALIA S.r.l. 49% Ancona Factoring and representation of Italy shipping companies * direct participation: 24% and indirect via ETANAP: 38% ** direct participation: 99% and indirect via ETANAP: 0.5% *** direct participation: 95% and indirect via LANE: 2.5% The aforementioned companies in which ANEK participates by more than 50% have been included in the consolidated financial statements using the method of full consolidation. ANEK LINES ITALIA S.r.l. in which the Parent Company participates by 49% was consolidated using the net equity method. ANEK HOLDINGS SA participates by 100% in ANEK ENERGY LTD, which, like TC SAILING SA has not commenced its activities as of today. The number of personnel employed as of 30 June 2008 amounted to 1,205 persons for the Company (out of which 950 were employed as crew aboard ships) and to 1,393 persons for the Group (crew aboard ships 1,095 persons). The interim financial statements as of 30 June 2008 have been approved by ANEK s Board of Directors at its meeting on 26 August DI

17 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e Preparation basis of the financial statements and accounting principles The interim separate and consolidated financial statements as of 30 June 2008 (hereinafter the financial statements ) have been prepared according to the International Financial Reporting Standards (hereinafter IFRS ), as issued by the International Accounting Standards Board (IASB) and adopted by the European Union, and more specifically to the IAS 34 interim financial reporting". Therefore, they do not include all the information required for the annual financial statements and should be read in conjunction with the published statements as of 31 December 2007 which have been posted on the Company s website at The basic accounting principles adopted in the preparation of the interim financial statements are the same as those followed in the preparation of the annual financial statements as of , except for the new standards and interpretations which are applicable after January 1 st The preparation of financial statements according to IFRS requires that the management makes estimates, assumptions and assessments, which affect the assets and liabilities, as well as the disclosures of contingent receivables and liabilities as of the date of the financial statements, as well as the published amounts of income and expenses. The actual results may differ from these estimates. Change in accounting estimate: The residual values of Group vessels were revised and adjusted at the beginning of 2008 (change in accounting estimate), taking into account the fair values thereof, with the purpose of making a more precise approach of their value at the end of useful life. The adjustment of residual values for the 1 st semester of 2008 demonstrated reduced depreciation by approximately 3.1 million compared to the respective period of Figure re-classification: The figure "proceeds from grants" in the Group s cash flow statement was reclassified from investing to financing activities, which resulted in an equal difference of 117 thousand between investing and financing activities flows for the comparable period. The International Accounting Standards Board, as well as the Interpretation Committee, have issued a range of new IFRS and interpretations, which are mandatory for accounting periods starting from January 1 st 2008 and thereafter. The estimate of the Group s management as regards the impact from the application of those new standards and interpretations is as follows: IFRS 8, Operating Segments (applies to annual accounting periods starting on or after January 1 st 2009): IFRS 8 replaces IAS 14 Financial Information by Segment and adopts an administrative approach as regards the financial information provided by segment. The information to be provided shall be that used by the management internally to evaluate the performance of operating segments and the allocation of sources to those segments. No change to the DJ

18 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e presented operating segments is expected following adoption. IAS 23: Borrowing costs (revised 2007) (applies to annual accounting periods starting on or after January 1 st 2009): The revised IAS 23 removes the option of immediately recognizing as an expense borrowing costs that relate to the acquisition, construction or production of qualifying assets. A qualifying asset is an asset that takes a substantial period of time to get ready for use or sale. Nevertheless, an entity is required to capitalise borrowing costs as part of the cost of such assets. The revised Standard does not require capitalisation of borrowing costs related to qualifying assets measured at fair value and inventories that are manufactured or otherwise produced in large quantities on a repetitive basis and that take a substantial period to get ready for use or sale. The impact on the Group's financial statements from the adoption of IAS 23 depends on the amount of loans used for the acquisition, construction or production of qualifying assets. IAS 1 (modified), Presentation of Financial Statements (applies to annual accounting periods starting on or after January 1 st 2009): IAS 1 has been modified to upgrade the usefulness of information presented in the financial statements. The most important modifications are: the requirement that the statement of changes to equity includes only transactions with shareholders, the introduction of a new statement of comprehensive income, which combines all income and expenses recognised in the income statement with other comprehensive income, and the requirement that any restated figures in the financial statements or retrospective application of new accounting policies be reflected from the beginning of the comparative period. IFRS 2 (amended), Share-based payment (applies to annual accounting periods starting on or after January 1 st 2009): The amendment clarifies the definition of vesting conditions, and makes reference to features of a share-based payment other than service conditions or performance conditions. It is also clarified that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment. IFRS 3, Business combinations, and IAS 27, Consolidated and separate Financial Statements (modifications apply to annual accounting periods starting on or after July 1 st 2009): The revised IFRS 3 introduces a number of changes to the accounting treatment of business combinations, which will affect the amount of recognised goodwill, the results for the period in which the business combination takes place and future results. These changes require that all costs related to acquisition and contingent consideration at fair value must be expensed in profit and loss. The amended IAS 27 requires that transactions leading to changes in participation percentages in a subsidiary are accounted for as equity transactions. IAS 32 and IAS 1, Puttable instruments (amendments apply to annual accounting periods starting on or after July 1 st 2009): DK

19 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e The modification to IAS 32 requires that certain puttable instruments and obligations arising on liquidation of an entity be classified as equity on specific criteria. The amendment to IAS 1 requires the disclosure of information on puttable instruments which are classified as equity. Interpretation 11, IFRS 2 Group and Treasury Share Transactions (applies to annual accounting periods starting on or after March 1 st 2007): This Interpretation requires a share-based payment arrangement in which an entity receives goods or services as consideration for its own equity-instruments to be accounted for as an equity-settled share-based payment transaction, even when the entity opts or has the obligation of purchasing such equity instruments from third parties or the company shareholders provide the instruments to be granted. The Interpretation also addresses how subsidiaries handle plans in their financial statements, under which employees are granted rights on equity instruments of the entity s parent. The interpretation 11 does not apply to the Group. Interpretation 12, Service Concession Arrangements (applies to annual accounting periods starting on or after January 1 st 2008): Interpretation 12 addresses how service concession operators should apply existing International Financial Reporting Standards (IFRSs) to account for the obligations they undertake and rights they receive in service concession arrangements. According to the Interpretation, service concession operators should not recognise the relevant infrastructure as tangible assets, but recognize one financial asset or one intangible asset. The interpretation 12 does not apply to the Group. Interpretation 13, Customer Loyalty Programmes (applies to annual accounting periods starting on or after July 1 st 2008): Customer loyalty programmes motivate customers to buy the goods or services of an entity. If a customer buys goods or services, then the entity grants loyalty award credits (e.g. points), which the customer can redeem in the future to obtain free or discounted goods or services. These programmes may be applied by the entity or a third party. Interpretation 13 may apply to all customer loyalty programmes which an entity may provide to its customers as part of a sales transaction. The Group considers any impact that Interpretation 13 may have on its financial statements. Interpretation 14: IAS 19 The limit of defined benefit asset, minimum funding requirements and their interaction (applies to annual accounting periods starting on or after January 1 st 2008): Interpretation 14 covers the interaction between minimum funding requirements (usually imposed by laws and regulations) and the measurement of a defined benefit asset. The issue considered in Interpretation 14 only relates to limited cases of defined benefit asset plans after retirement measured as surplus or subject to minimum funding requirements. Among other issues, it addresses the meaning of available as used in IAS 19. In general, the Interpretation explains that an economic benefit is available if an entity has an unconditional right to a refund during the life or upon settlement of the defined benefit asset plan. The DL

20 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e recognition of an asset does not depend on whether financial benefits are immediately recognizable as of the date of the balance sheet or on how the entity intends to use any surplus. The Interpretation also addresses the accounting treatment of an obligation for minimum funding requirements arising from services already received by the entity. Interpretation 14 does not apply to the Group. Interpretation 15, Agreements for the construction of real estate (applies to annual accounting periods starting on or after January 1 st 2009): Interpretation 15 pertains to existing different accounting methods to treat real estate sales. Some financial entities recognise the revenue subject to IAS 18 (i.e. when risks and benefits of real estate ownership are transferred), and others recognize the revenue depending on the real estate completion stage, in line with IAS 11. The interpretation clarifies which standard applies to each case. The interpretation 15 does not apply to the Group. Interpretation 16, Hedges of a net investment in a foreign operation (applies to annual accounting periods starting on or after October 1 st 2008): Interpretation 16 applies to a financial entity which hedges the foreign currency exposure arising from a net investment in a foreign operation, and complies with the terms on hedge accounting in accordance with IAS 39. The interpretation provides guidance about the method in which a financial entity should determine the amounts reclassified from equity to profit and loss, both in respect of the hedging instrument and the hedged asset. The interpretation 16 does not apply to the Group. 3. Seasonal nature of business activities The activities of Group shipping companies are highly seasonal, which affects the income and results of the interim financial statements. More specifically, the transportation of passengers and vehicles is particularly increased during summer months due to tourism and holidays, while the transportation of trucks demonstrates slight fluctuations during the year. Therefore, the highest sales take place during the third quarter of each year (from to 30.09), which includes the summer months. 4. Fixed assets / Investments in property The tables of fixed assets (tangible and intangible) for the 1 st six-month period of 2008 and 2007 for the Group and the Company are shown in the next page: EC

21 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e The Group Vessels Land & buildings Other equipment Property in progress Intang ible assets Total Acquisition value as of ,451 12,641 6, , ,939 Additions , ,681 Disposals (5) - (47) - - (52) Acquisition value as of ,074 13,232 6,541 32,928 1, ,568 Additions of period , ,518 Disposals of period - - (6) - - (6) Transfers - - (30) Acquisition value as of ,262 13,357 6,998 63,662 1, ,080 Accumulated depreciation , , ,023 Depreciation charge 14, ,117 Disposals (1) - (20) - - (21) Reversal of assets impairment (492) (492) Accumulated depreciation , ,746-1, ,627 Depreciation charge 4, ,137 Disposals Accumulated depreciation ,298 1,026 5,070-1, ,764 Net book value ,290 12,337 1,795 32, ,941 Net book value ,964 12,331 1,928 63, ,316 The Company Vessels Land & buildings Other Property equipment in progress Intangibl e assets Total Acquisition value as of ,267 8,633 2, , ,016 Additions , ,067 Disposals - - (2) - - (2) Acquisition value as of ,844 8,839 2,677 32,928 1, ,081 Additions of period , ,420 Disposals of period Acquisition value as of ,025 8,943 2,705 60,026 1, ,501 Accumulated depreciation , , ,283 Depreciation charge 13, ,360 Disposals - - (2) - - (2) Accumulated depreciation , ,200-1, ,641 Depreciation charge 4, ,885 Disposals Accumulated depreciation , ,295-1, ,526 Net book value ,372 8, , ,439 Net book value ,039 8, , ,975 Existing liens On the assets of the Group there are the following liens: a) Mortgages on the vessels of million and b) Prenotations on property of 5.2 million and pledges on machinery (of the subsidiary companies ETANAP and LEFKA ORI) of 2.5 million. million. The above liens exist to secure borrowings which, as of , stood at Grants for assets The net book value, on 30 June 2008 of the grants for assets of the Company, amount to 821 thousand ( 1,185 thousand for the Group) from which 729 thousand ( 1,024 ED

22 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e thousand for the Group) included under non-current liabilities, and 92 thousand ( 161 thousand for the Group) included under other current liabilities. Investments in property The account Investments in property includes the value of part of a parent company privately-owned leased office, and the value of three plots owned by the subsidiary ETANAP, not included in the productive pipeline. The income from the lease of the building for the 1 st six-month period of 2008 stood at 18 thousand. The investment property movement is as follows : The Group The Company Net book value and ,249 2,291 1,192 1,234 Additions / (disposals) for the period / year Depreciation charge for the period / year Net book value and ,228 2,249 1,171 1,192 Depreciation Depreciations have been allocated in operations as follows: The Group The Company Cost of sales 4,733 7,875 4,514 7,028 Administrative expenses Selling & marketing expenses Investments in subsidiaries & affiliates Subsidiaries The Parent company participations in subsidiaries and the respective participation percentages are presented in note 1. The value of participations in subsidiaries in the Parent s financial statements stood at 4,625 thousand and no change occurred during the first semester compared to Affiliates The participation value in the affiliate ANEK LINES ITALIA S.r.l. in the consolidated financial statements as of stands at 3,187 thousand, increased, compared as of , by those earnings for the 1st semester of 2008 which corresponded to the Group ( 333 thousand) and reduced by the amount of dividends ( 245 thousand). 6. Inventories Inventories as of and are analyzed as follows: EE

23 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e The Group The Company Merchandise and products 2,972 2,325 2,789 2,248 Raw materials and packaging 2,572 2,196 1,983 1,669 Fuels and lubricants 2,850 3,888 2,591 3,465 Spare parts & others 4,360 3,599 4,128 3,427 12,754 12,008 11,491 10, Trade receivables and other short-term receivables Trade receivables include the following: The Group The Company Debtors 47,639 32,109 47,707 33,741 Cheques and notes 47,442 44,390 45,611 43,005 95,081 76,499 93,318 76,746 Less: provisions for bad debts (6,939) (6,639) (6,614) (6,314) 88,142 69,860 86,704 70,432 Additional provisions of 300 thousand were recorded during the 1 st six-month period 2008 for doubtful debts, included under the other expenses figure. Other short-term receivables as of and are analyzed as follows: The Group The Company Other debtors 439 2,750 1,002 2,593 State receivables 2,129 1,808 1,441 1,390 Advances to creditors 1,755 1,765 1,657 1,009 Other prepayment & accrued income 1, ,865 6,800 5,081 5, Financial assets at fair value through profit and loss Financial assets at fair value through profit and loss include financial derivatives (futures held for sale) of 1,660 thousand. 9. Cash and cash equivalents The cash and cash equivalents analysis is as follows: The Group The Company Cash 1, , Bank accounts (current and deposit) 28,366 55,550 27,526 53,980 29,865 56,257 28,794 54,632 Bank deposits with banks as of include part of the proceeds of share capital increase (completed in 2007), which have not yet been allocated. EF

24 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e Long-term borrowings Long-term borrowings for the Group as of 30 June 2008 stood at 227,120 thousand, of which 225,246 thousand correspond to the Company. Upon restructuring of the Parent company s long term loans, completed during the 1 st quarter 2008, two new syndicate loans were entered into with a syndicate of banks for the total amount of 245 million, at floating rate (Euribor plus spread) and a term of 8 years (final repayment date: ). Payable installments over the next twelve months stand at 18 million. Maturity dates (progress of payments) of long-term loans of the Company as of were as follows: amounts in thousand 1 to 2 years 18,000 2 to 5 years 54,000 Over 5 years 155,000 Collaterals have been provided to secure the aforementioned syndicated loans (shipping mortgages on vessels) to the banks (see note 4). 11. Short-term borrowings The short-term borrowings are as follows: The Group The Company Short-term loans 18,339 20,847 16,621 19,656 Long-term installments payable within the next 12 months 18,653 23,388 18,000 23,360 36,992 44,235 34,621 43, Income tax The income tax reflected in the income statement for the first half of 2008 and 2007 for the Company and the Group mainly pertains to the tax under Law 27/1975 on total tonnage. The unaudited fiscal years of consolidated companies are shown in the following table: Company Unaudited years ANEK LANE ETANAP LEFKA ORI ANEK HOLDINGS 2007 TC SAILING 2007 ANEK LINES LUXEMBOURG 2007 ANEK LINES ITALIA As regards the unaudited fiscal years, the Group have made relevant provisions ( 81 thousand in aggregate), as appropriate, for additional taxes which might arise during future tax audits of the unaudited periods. In any case, the Group s management estimates that the final tax audit differences shall be insignificant. EG

25 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e Provision for retirement benefits The movement for retirement benefits obligation is as follows: The Group The Company Opening balance 3,247 2,912 3,045 2,757 Benefits paid - (15) - - Provision recognized in income statement* Closing Balance 3,433 3,247 3,195 3,045 * included in administrative and selling-marketing expenses 14. Trade payables and other short-term liabilities Trade payables include the following: The Group The Company Creditors 38,100 28,583 32,675 25,464 Cheques payable 2,985 3,841 1,165 2,283 41,085 32,424 33,840 27,747 Respectively, the remaining short-term liabilities are as follows: The account Other creditors includes payable dividends of the Parent for the fiscal year 2007, which stand at the total amount of 8,065 thousand ( 0.05 per share), according to the decision of the annual Ordinary General Meeting of 18 May The Group The Company Tax & social securities payables 3,218 2,578 2,339 1,772 Advances from debtors 2,384 2,223 2,184 2,184 Other creditors 15,284 5,562 13,749 4,376 Accrued expenses 3,116 1,351 3,009 1,349 Accrued income 13, , ,650 12,711 33,928 10, Share capital / Share premium The Company's share capital stands at 161,299, divided into 157,360,940 common and 3,938,251 preferred voting shares with the nominal value of 1.00 each. Preferred shares enjoy only those benefits stipulated by law, namely the preferential collection of first dividend and preferential participation in the proceeds. The share premium arising after the Company s share capital increase in 2007 stood at 5,078 thousand, reaching 1,080 thousand following deduction of increase expenses (the amount of 115 thousand was registered during the 1 st six-month period of 2008). 16. Reserves Reserves as of and are as follows: EH

26 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e The Group The Company Legal reserves 14,220 12,838 14,153 12,792 Statutory reserves 12,417 12,417 12,417 12,417 Asset revaluation reserves 2,124 2,124 1,072 1,072 Other reserves 6,449 6,449 6,354 6,354 35,210 33,828 33,995 32, Earnings / (losses) per share Basic earnings/ (losses) per share are calculated by dividing the earnings/ (losses) corresponding to the parent shareholders by the weighted number of outstanding shares during the period. The Group The Company Earnings / (losses) after taxes attributable to Equity holders of the Company (14,074) (1,714) (13,005) (1,260) Weighted average number of shares 161,299,191 84,428, ,299,191 84,428,756 Earnings / (losses) per share - basic (in ) (0.0873) (0.0203) (0.0806) (0.0149) 18. Segmental information The basic business activity of the Group is concentrated upon passenger ferry shipping activities, both domestic and abroad. The main sources of revenue generates from passenger, vehicles and truck fares, as well as other on-board activities (bar, restaurants, stores). Revenue of non-shipping Group companies are included in income from trade activities. The following table shows the geographic allocation of activities of both the Group and the Company for the first half of 2008 and 2007: EI

27 N o t e s o n t h e I n t e r i m F i n a n c i a l S t a t e m e n t s f o r t h e p e r i o d f r o m 1 J a n u a r y u n t i l 3 0 J u n e Domestic Abroad Total The Group Revenues from fares 46,210 43,001 55,303 55, ,513 98,970 On-board & other trade activities 7,604 6,536 5,518 6,163 13,122 12,699 Other Total 53,964 49,658 60,895 62, , ,810 Gross operating results* 6,023 10,258 2,204 11,151 8,227 21,409 Grants to LANE 1, , Vessel value additions Vessel depreciation charge for the period 825 2,967 3,690 4,691 4,514 7,658 Net book value of vessels 62,059 57, , , , ,691 Non-distributed assets , ,320 Total Assets , ,011 The Company Revenues from fares 42,244 40,012 48,206 49,806 90,450 89,818 On-board revenues 5,330 4,455 5,518 6,163 10,848 10,618 Other Total 47,717 44,582 53,798 55, , ,571 Gross operating results 8,301 11,239 2,100 10,525 10,401 21,764 Vessel value additions Vessel depreciation charge for the period 825 2,337 3,690 4,691 4,514 7,028 Net book value of vessels 54,134 49, , , , ,653 Non-distributed assets , ,383 Total Assets , ,036 * The above gross Group results do not include grants for unprofitable lines received from the Ministry of Aegean to the subsidiary LANE, which are included in the figure other income. Additions, depreciation and net book value of vessels were allocated to geographic activities depending on the time of operation of each vessel on domestic and abroad lines. Any allocation besides gross operating results would be arbitrary. 19. Cost of sales The cost of sales appearing on the financial statements for the 1 st six-month periods of 2008 and 2007 can be analyzed as follows: The Group The Company Payroll / fuel / consumables 78,325 63,327 67,710 56,025 Insurance / repairs & maintenance / other 23,574 19,199 18,890 15,754 Depreciation 4,733 7,875 4,514 7, ,632 90,401 91,114 78,807 EJ