Annual report 2012

Report of the Supervisory Board

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The Supervisory Board functioned in the following composition during the 2012 financial year: Tomaž Berginc, MSc, Dr Tomaž Kalin, Dr Marko Hočevar, Dr Jaro Berce, Nataša Štelcer, MSc, Franci Mugerle, Milan Richter, Brane Sparavec and Martin Gorišek. Tomaž Berginc, MSc served as President of the Supervisory Board, while Dr Tomaž Kalin and Milan Richter served as Vice-Presidents.


Work of the Supervisory Board

The Supervisory Board met at 13 regular and three correspondence sessions in 2012. Sessions were held at the Company's registered office, with the exception of one session held at the registered office of a subsidiary. The Supervisory Board prudently and responsibly monitored and supervised the operations of Telekom Slovenije, d. d. Its primary focus was on the operations of the Telekom Slovenije Group as a whole, while it also monitored the operations of individual Group companies. Following a change to the Company’s Articles of Association in 2012, the Supervisory Board was given greater authority with regard to monitoring the operations of subsidiaries.

The members of the Supervisory Board assess that the Management Board of Telekom Slovenije, d. d. provided sufficient data, reports and information. Materials were received on time, so that members of the Supervisory Board could prepare for and discuss individual items on the agenda. When discussing specific items on the agenda, an external auditor was invited to attend Supervisory Board sessions and the sessions of the Supervisory Board's Audit Committee.

The members of the Supervisory Board function independently. The Supervisory Board comprises competent members who are recognised experts in their fields. With their experiences and familiarity with the Company, employee representatives also contribute a different view to matters at the Company.

The majority of Supervisory Board members attended all sessions. All members were present at ten sessions, while two members were excused from two sessions and one member was excused from one session. The majority of decisions were approved unanimously, reflecting the uniform view of members with regard to Company-related issues and their resolution.

The Supervisory Board defined the necessary competences that are expected from each member of the Management Board. It also defined the necessary procedures and methods for selecting Management Board members. The same activities were carried out for candidates for members of the Supervisory Board in accordance with legal provisions. Due to his retirement effective 31 August 2012, the Supervisory Board released Ivica Kranjčević from his position as President of the Management Board and appointed Rudolf Skobe, MSc as new President effective 1 September 2012. The Supervisory Board reached agreement with Marko Boštjančič regarding the latter’s release from his position as member of the Management Board effective 31 December 2012, and appointed Mateja Božič, MSc as his replacement effective 1 January 2013. The Supervisory Board assesses that partial changes to the Management Board will serve as the basis for even better operating results and, above all, the more aggressive market approach of the Telekom Slovenije Group as a whole.

The Supervisory Board gave its consent to the appointment of Tomaž Pernovšek as Managing Director of TSmedia, medijske vsebine in storitve, d. o. o. effective 1 September 2012, and to the recall of Meta Zakrajšek from her position as Managing Director of Primo Communications, d. o. o. and the appointment of Klemen Ramoveš to the vacated position effective 1 September 2012. It also gave its consent to the appointment of Klavdij Godnič as Managing Director of Soline Pridelava soli, d. o. o. effective 1 July 2012, replacing Alojz Jurjec, who retired.

The Supervisory Board regularly monitored the operating results of the Telekom Slovenije Group. It included most recommendations of the Capital Assets Management Agency of the Republic of Slovenia, issued in 2011 and 2012, in its regular monitoring of results.

The Supervisory Board actively monitored the results of the merger of Mobitel, d. d. and Telekom Slovenije, d. d., which was carried out on 1 July 2011. Through its commission established to monitor the drafting of the Telekom Slovenije Group’s strategic plan and the Orion project, the Supervisory Board actively participated in the monitoring of the effects of the merger and the Group’s strategic projects and in the development of corporate governance in the Telekom Slovenije Group. The Supervisory Board also discussed the Group’s revised strategic plan.

The Supervisory Board will continue to regularly monitor and influence the implementation of the Company's business plans and its new strategy. This will contribute to achieving the results expected from the Company and Group in the coming years and ensure their operations are comparable with the best companies in the sector.

The Supervisory Board regularly monitored the results of companies in Slovenia and in particular of those abroad, in terms of both costs and revenues. The operations of all foreign subsidiaries are consolidated. The Supervisory Board gave its consent to arrange relations with the minority owners of foreign companies: Primo Communications, d. o. o., Tirana and Aneks, d. o. o., Banja Luka.

The Supervisory Board monitored the launch of the new Planet TV television station in commercial terms, the creation of Planet TV content and the inclusion of a new partner in 2013.


Work of Supervisory Board committees

There was no change in the number of Supervisory Board committees relative to 2011. The Supervisory Board’s committees discussed topics related to the Supervisory Board's work and advised it in important matters. This contributed significantly to improving the work and effectiveness of the Supervisory Board. The work of committees is described in detail in the section, Corporate governance, in the Business Report section of the annual report.


Assessment of the work of the Management Board and Supervisory Board

The work of the Supervisory Board and its committees was carried out in 2012 in line with legal provisions, the Corporate Governance Code and other recommendations of the Ljubljana Stock Exchange and the Capital Assets Management Agency of the Republic of Slovenia. The Supervisory Board precisely and comprehensively verified and monitored the governance of the Company throughout the year. At its sessions, the Supervisory Board worked with the Management Board and its authorised representatives. It continuously assessed the work of the Management Board, in particular when discussing interim results of the Company's operations. The members of the Supervisory Board assess the work of the Management Board in the current economic conditions as very good. The Management Board and Supervisory Board worked well together at sessions, while the presidents of the Management Board and Supervisory Board communicated regularly between sessions. The members of the Supervisory Board continuously demonstrated their willingness for training and professional development. Unfortunately, funding for the training of members of the Supervisory Board was abolished by a General Meeting resolution in 2012. The Supervisory Board monitored possible conflicts of interest between its members, and issued its opinion in one case.

The Supervisory Board also performed a self-assessment of its work and adopted an action plan at the beginning of 2012 to further improve the quality of its work in the future.


Approval of the annual report and the proposed use of the distributable profit for 2012

The Supervisory Board thoroughly reviewed the annual report of Telekom Slovenije, d. d. and the Telekom Slovenije Group for 2012 by the legally prescribed deadline. The Supervisory Board finds that the Telekom Slovenije Group operated in accordance with forecasts for 2012. The Telekom Slovenije Group generated EUR 793.1 million in operating revenues. Earnings before interest, taxes, depreciation and amortisation (EBITDA) reached EUR 241.6 million. Earnings before interest and taxes (EBIT) was EUR 62.5 million. Following the calculation of corporate income tax in the amount of EUR 2.6 million, the Telekom Slovenije Group generated a profit of EUR 43.7 million.

Distributable profit for 2012 is EUR 100,839,530.63. In compliance with the request by the 23rd General Meeting, the company has already paid an interim dividend in the amount of EUR 3.70 per share, while the Management Board and the Supervisory Board of Telekom Slovenije d.d. will propose to the General Meeting that additional payment of dividends be made in the amount of EUR 1.46 per share.

The Supervisory Board was briefed on and discussed the audit report, in which the certified auditors of KPMG find that the financial statements, which are an integral part of the annual report, present a true and fair picture of the financial position of the Company and the Group, their operating and financial results and changes in equity. The Supervisory Board had no comments regarding the audit report. It likewise had no comments or reservations that would prevent the adoption of a decision to approve the annual report and consolidated annual report. 

The Supervisory Board finds that the annual report is a credible reflection of developments and a comprehensive source of information regarding operations in 2012. The annual report of Telekom Slovenije, d. d. and the consolidated annual report of the Telekom Slovenije Group, with the accompanying audit report for 2012, were approved by the members of the Supervisory Board at its 59th session of 24 April 2013. We hereby formally approve the annual report in accordance with the provisions of Article 282 of the Companies Act and the Articles of Association of Telekom Slovenije, d. d.

 

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Tomaž Berginc, MSc
President of the Supervisory Board of Telekom Slovenije, d.d.