Annual report 2012

2. Basis for preparation

a.  Statement of compliance

The accompanying consolidated financial statements of the Telekom Slovenije Group have been prepared in accordance with International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (IFRIC), as adopted by the European Union.

The consolidated financial statements were approved for release by the Management Board on 26 March 2013.


b.  Subsidiaries and jointly controlled entities

The Telekom Slovenije Group comprises the parent company Telekom Slovenije and following subsidiaries and jointly controlled entities or groups of subsidiaries: 


SUBSIDIARIES

  Company Address Country Core activity Tax rate Share in equity (%) Share of voting rights (%) Value of equity as at 31 December
                  2012 2011 
  SLOVENIA                
1 GVO, gradnja in vzdrževanje telekomunikacijskih omrežij, d.o.o. Cigaletova 10, Ljubljana Slovenia building and maintenance works on telecommunication networks 18 % 100 % 100 % 15,237 12,194
2 Avtenta, napredne poslovne rešitve, d.o.o. Stegne 19, Ljubljana Slovenia systems integrator 18 % 100 % 100 % 5,996 2,612
3 TSmedia, medijske vsebine in storitve, d.o.o. Cigaletova 15,  Ljubljana Slovenia multimedia and internet services 18 % 100 % 100 % 9,236 8,007
4 SOLINE Pridelava soli d.o.o. Seča 115, Portorož Slovenia production of salt and preservation and management of a natural park 18 % 100 % 100% 4,808 4,641
                   
  OTHER COUNTRIES                
5 IPKO Telecommunications d.o.o. Lagija Ulpiana, Rruga "Zija Shemsiu", nr 34, Prishtine Kosovo telecommunication services 10 % 93 % 93 % 4,586 6,377
6 ANEKS d.o.o. Banja Luka Majke Jugovića 25, Banja Luka Bosnia and Herzegovina telecommunication services 10 % 100 % 70 % 9,228 7,666
7 ONE DOOEL Skopje Bul. Kuzman Josifovski Pitu 15, Skopje Macedonia telecommunication services 10 % 100 % 100 % 28,354 34,612
8 PRIMO Communications d. o. o. Autostrada Tiranë-Durrës, km 1, Komuna Kashar, Tirana Albanija Albania internet services 10 % 100 % 100 % -1,296 97
9 DIGI PLUS MULTIMEDIA Društvo za telekomunikaciski uslugi DOOEL Skopje Bul. Partizanski odredi, no. 70, DTC Aluminka, Skopje Macedonia services of digital television 10 % 100 % 100 % 249 274
10 SIOL d.o.o. Margaretska 3, Zagreb Croatia telecommunication services 20 % 100 % 100 % 597 589
11 SiOL d. o. o. društvo za pružanje telekomunikacijskih usluga, Sarajevo Tešanjska ulica 24 a, Sarajevo Bosnia and Herzegovina telecommunication services 10 % 100 % 100 % 1,659 1,504
12 DRUŠTVO ZA TELEKOMUNIKACIJE "SIOL" DOO PODGORICA Bulevar Svetog Petra Cetinjskog br.106, Podgorica Montenegro telecommunication services 9 % 100 % 100 % 2,365 326


JOINTLY CONTROLLED ENTITIES

  Company Address Country Core activity Tax rate Share in equity (%) Share of voting rights (%) Value of equity as at 31 December
                2012 2011
1. M-PAY, Družba za mobilno plačevanje, storitve in trgovino d.o.o. Ul.Vita Kraigherja 3, MARIBOR Slovenia processing of mobile phone payments 18 % 50 % 50 % 197 185
2. Gibtelecom Limited 15/21 John Mackintosh Square, Gibraltar Gibraltar telecommunication services 20 % 50 % 50 % 34,047 35,138

In December 2012 Telekom Slovenije signed a contract with the two minority shareholders of Primo Communications, Albania on the purchase of a 25% interest in the company. Following the entry of the transfer of the interest in the companies register in Tirana, Telekom Slovenije became the sole owner (100%) of the aforementioned company.

In December 2012 Telekom Slovenije concluded an agreement with the minority shareholder to purchase a 30% interest in Aneks, d. o. o., Banja Luka. Telekom Slovenije will become the sole owner (100%) of the aforementioned company following the entry of the transfer of the interest in the companies register in Banka Luka.

In 2012 TSmedia, which held a 100% interest in the subsidiaries Pogodak Tražilica, d. o. o. – in liquidation in Croatia and Pogodak, d. o. o., Belgrade – in liquidation in Serbia, completed the respective liquidation procedures that were initiated in 2011. Accordingly, Pogodak, d. o. o., Belgrade – in liquidation was deleted from the companies register in Belgrade on 1 February 2012, while Pogodak Tražilica, d. o. o. – in liquidation was deleted from the companies register in Zagreb on 23 August 2012.

SIOL, B.V. – in liquidation, owned 100% by Telekom Slovenije, d. d., was deleted from the companies register on 12 July 2012.

Within the Ipko Group, the parent company Ipko Telecommunications is the sole owner (100%) of N.B. Media Works, d. o. o., Kosovo, Ipko Net Albania, d. o. o., and the joint venture DSN, d. o. o. Telekom Slovenije is the sole owner (100%) of Ipko as a result of an agreement concluded with the minority shareholders on the acquisition of the remaining interest. 

Investments in joint ventures include a 50% interest in Gibtelecom Limited and a 50% interest in M-Pay. Both companies are included in the consolidated financial statements according to the equity method.


c.  Basis for the preparation of financial statements

The consolidated financial statements have been prepared based on the going concern assumption.

The consolidated financial statements have been prepared on a historical cost basis except for the measurement of available-for-sale financial assets and derivative financial instruments that are measured at fair value and certain classes of property, plant and equipment which are revalued by using the fair value model (refer to accounting policy 3.e. Property, plant and equipment).


d.  Functional currency and foreign currency transaction

The consolidated financial statements are presented in euro, rounded to the nearest thousand, which is the functional and presentation currency of the Group.

Monetary assets and liabilities in foreign currency are translated at the exchange rate of the functional currency prevailing at the date of the statement of financial position. All differences resulting from foreign currency translation are recognised in the income statement.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rates prevailing at the dates of the initial transactions. Non-monetary assets and liabilities measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.


e.  Use of estimates and judgements

The preparation of the financial statements requires managements to make certain judgements, estimates and assumptions that impact the carrying values of Group's assets and liabilities and the disclosure of contingent items at the reporting date and the reported amounts of income and expenses for the period then ended.

Future events and their effects cannot be perceived with certainty. Accordingly, the accounting estimates made require the exercise of judgment, and those used in the preparation of the financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Group’s operating environment changes. Actual results may differ from those estimates. The formulation of estimates and related assumptions and uncertainties are discussed in individual items of segment 3. Summary of significant accounting policies.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Management's judgments include but are not limited to:

  • depreciable lives and residual values of property, plant and equipment and intangible assets,
  •  fair value of land, buildings and cable lines,
  • allowances for inventories and doubtful debts,
  • provisions and contingent liabilities,
  • network interconnection,
  • impairment of the UMTS and GSM licences, and
  • impairment of goodwill.


f.  Change in accounting policies

Group's accounting policies have not changed over the previous period.