Annual report 2012

Supervisory Board

Work of the Supervisory Board 

In the scope of its powers, the Supervisory Board was regularly briefed on the operations of Telekom Slovenije and the Telekom Slovenije Group. It met at 13 regular and three correspondence sessions. Members of the Supervisory Board regularly discussed strategically important activities and proposals by the Management Board, and actively responded to those proposals and provided their opinions. The work of the Supervisory Board is presented in more detail in the Report of the Supervisory Board.

Important activities:

  • it was briefed on the progress of the business process re-engineering project and on the operations of Group companies;
  • it approved the Telekom Slovenije Group’s updated strategic plan for the period 2012 to 2016;
  • it discussed the special audit report on transactions concluded by the Telekom Slovenije Group between 2006 and 2011;
  • it appointed a new President and member to the Management Board, and gave its consent to the appointment of the managing directors of subsidiaries;
  • it approved the introduction of the next generation LTE mobile data network;
  • it approved the project to introduce a wireless network in the City of Ljubljana;
  • it discussed and supported the measures presented by the Management Board for improving and maintaining stable operations in the long term;
  • it approved the Telekom Slovenije Group's business plan for 2013 with projections until 2017;
  • it approved a change to the organisational structure of Telekom Slovenije;
  • it approved the Planet TV project and the strategic partnership with Antenna Group; and
  • it approved the purchase of the participating interests of the minority owners of Primo and Aneks. 

Composition of the Supervisory Board

The Supervisory Board of Telekom Slovenije comprises nine members, six of whom are shareholder representatives and three of whom are employee representatives. All members of the Supervisory Board submitted statements of compliance with the criteria of independence for 2012 in accordance with the Corporate Governance Code (the statements are published on the Company’s website.The four-year term of shareholder representatives ends on 26 April 2013, while the term of employee representatives ends on 13 November 2013.

The Supervisory Board comprised the following members as at 31 December 2012:

Shareholder representatives:

1. Tomaž Berginc, MSc (President)

  • holds a master’s degree in economics;
  • CEO of ETI Elektroelement, Izlake;
  • president of the Supervisory Board of RC IRC Celje.

2. Dr Tomaž Kalin (Vice-President)

  • holds a doctorate in engineering;
  • independent consultant.

3. Dr Jaroslav Berce (member)

  • holds a doctorate in science, social information technology;
  • employed at the University of Ljubljana’s Faculty of Social Sciences;
  • president of the Supervisory Board of ELES (from October 2011 to December 2012).

4. Dr Marko Hočevar (member)

  • employed at the University of Ljubljana's Faculty of Economics as a professor of accounting and auditing;
  • member of the Supervisory Board of the STA.

5. Nataša Štelcer, MSc (member) 

  • holds a bachelor’s degree in law and a master’s degree in law;
  • works as a lawyer.

6. Franci Mugerle (member)

  • holds a bachelor’s degree in economics;
  • procurator at MAOP Računalniški inženiring Ljubljana.

Employee representatives:

1. Milan Richter (Vice-President)

  • electrical and electronic engineer;
  • employed in the fixed access network sector;
  • president of the SELEKS trade union;
  • president of the trade unions confederation of Telekom Slovenije;
  • member of the Works Council.

2. Martin Gorišek (member)

  • holds a bachelor’s degree in business informatics;
  • head of the centre for cable networks and provision of services in Celje;
  • chairman of the Works Council.

3. Branko Sparavec (member)

  • holds a master’s degree in law;
  • employed in the customer service sector.

Composition and function of Supervisory Board committees

All four committees of the Supervisory Board functioned in unchanged compositions in 2012. The committees discussed individual areas of expertise in accordance with their respective competences and tasks defined in the Corporate Governance Policy.

The Audit Committee met at five sessions at which it primarily discussed reports from the Internal Audit Service and its annual work plan. It also verified the Telekom Slovenije Group's interim business reports, and other reports, analyses and programmes.

The committee’s members are:

  • Dr Marko Hočevar,
  • Dr Jaroslav Berce,
  • Nataša Štelcer, MSc,
  • Branko Sparavec, and
  • Dr Sergeja Slapničar (external committee member).

Important matters for discussion:

  • special audits,
  • letters to the management of One and Ipko,
  • the annual report of Telekom Slovenije, d. d. for 2011 and the proposal for the appointment of the auditor,
  • the internal audit report for 2011,
  • the external audit of IT systems,
  • the half-yearly Business Report of Telekom Slovenije, d. d. and the Telekom Slovenije Group for the period January to June 2012,
  • the half-yearly internal audit report for 2012,
  • the report on the status of receivables, provisions, CAPEX and labour costs,
  • analysis of inventories, and the existing assessment of project management,
  • draft appraisal of real estate at Telekom Slovenije,
  • the real estate optimisation programme,
  • information regarding the operations of the Telekom Slovenije Group for the period January to September 2012,
  • the working capital management project, and
  • measures to improve project work.

The Audit Committee also reviewed consultancy agreements. Two sessions were also attended by the certified auditors of Ernst & Young, while two sessions were attended by the Company's lawyer (when the Audit Committee reviewed provisions and the risks arising from lawsuits). Representatives of Telekom Slovenije, d. d.’s Internal Audit Service were regularly invited to sessions. Special attention was given to risk management. The committee verified risks arising from lawsuits and the related provisions.

The Technical Committee met five times to discuss investments concerning technical and IT matters. 

The committee’s members are:

  • Dr Tomaž Kalin,
  • Martin Gorišek, and
  • Franci Mugerle.

Important matters for discussion:

  • the business plan and economics of the project to include the cable network and transfer to the Network Engineer information system,
  • the strategy for developing the network infrastructure and IP services at Telekom Slovenije (IP/MPLS - Internet protocol/Multiprotocol Packet Labelled Switching),   
  • briefings on the activities of the Research and Development Department,
  • the review of project activities,
  • the introduction of IP V6 technology in Telekom Slovenije’s network,
  • Telekom Slovenije’s proposal to achieve the objectives of the Digital Agenda,
  • the modernisation of the mobile network with fourth generation LTE mobile communications, and
  • the upgrading of Ipko’s network.

The Human Resource Committee met at seven regular sessions and one correspondence session at which it discussed procedures for recruiting management staff and their appointment, and the remuneration system.  

The committee’s members are:

  • Tomaž Berginc, MSc,
  • Dr Tomaž Kalin, and
  • Milan Richter.

Important matters for discussion:

  • the drafting of procedures for the appointment of Management Board members and the definition of their competences,
  • the wage system and the definition of objectives for members of the Management Board for 2012 with the aim of setting the variable component of their remuneration,
  • definition of the competences of members of the Supervisory Board and the procedure for proposing new members,
  • the remuneration of managing directors of subsidiaries, and  
  • the selection of candidates for President and member of the Management Board and candidates for management functions at important subsidiaries in the Group.

The committee to monitor Telekom Slovenije's strategy and the Orion project met four times to discuss the progress and content of the consolidation of companies within the Telekom Slovenije Group and the drafting of the Company's strategy.

The committee’s members are:

  • Dr Jaroslav Berce,
  • Milan Richter, and
  • Dr Bogomir Kovač (external committee member).

Key topics discussed: 

  • information for the President of Telekom Slovenije’s Management Board regarding activities in processes to merge Group companies,  
  • the implementation of the management by objectives strategy,
  • a review of the status of key projects such as the Cirus project to develop cloud computing services, the corporate governance project and the project to optimise working capital, and implementation plans for the aforementioned projects and links to IT,
  • the Telekom Slovenije Group’s strategic plans for the period 2012 to 2016, and
  • corporate governance acts.

The committee’s initial focus during the drafting of the strategic business plan was on the applied methodology. It was later included in the overall process of drafting the document. The strategic business plan adopted in April 2011 was updated in June 2012.

Remuneration of Supervisory Board members

Shareholders adopted a resolution at the 22nd General Meeting reversing the resolution of the 20th General Meeting of 31 August 2011 and abolishing the reimbursement of education and training costs of members of the Supervisory Board. There were no changes regarding other payments and reimbursements. Supervisory Board members are entitled to attendance fees, basic payment for performing their functions and additional payments for participation in Supervisory Board committees. The amounts of payments were fixed by a resolution adopted at the 20th General Meeting. Also defined were the maximum annual amounts of and eligibility criteria for the reimbursement of transportation expenses, daily allowances and costs of overnight stays. The amounts of payments made to members of the Supervisory Board are given in the Financial Report.