Annual report 2012

33. Commitments and contingencies

Liabilities and receivables under operating leases

Group companies as the lessee

Liabilities from operating leases include property, plant and equipment and primarily relate to leased lines, business premises leases and base stations leases. Non-cancellable operating leases are payable as follows:

Payable in EUR thousand 2012 2011
- 1 year 16,662 16,517
- 1 to 2 years 26,531 28,155
- 1 to 2 years 28,628 29,232
- more than 5 years 74,491 72,398
Total 146,312 146,302

In 2012, the Group recorded EUR 19,228 thousand (2011: EUR 18,506 thousand) of lease costs from operating lease contracts.


Group companies as the lessor

Receivables from operating leases relate to the lease of property, plant and equipment.

Payable in EUR thousand 2012 2011
- 1 year 2,981 2,898
- 1 to 2 years 5,961 5,797
- 3 to 5 years 5,961 5,797
- more than 5 years 14,902 14,492
Total 29,805 28,984

As at 31 December 2012, income from operating leases recognised in profit or loss amounted to EUR 2,981 thousand (2011: EUR 1,962 thousand).


Liabilities under finance leases

The Group acquired IP software and hardware under finance leases. Minimum lease payments in future years are presented below.

Payable in EUR thousand 2012 2011
- 1 year 1,544 1,494
- 1 to 5 years 150 1,702
Total 1,694 3,196


Contingencies

EUR thousand 2012 2011
Contingencies from legal actions 614,438 649,998

At the 31 December 2012, the Group recorded 42 pending legal actions brought against it, whereof the majority refers to Si.mobil in the amount of EUR 286,392 thousand and 30,362 thousand, which is followed by T-2 in the amount of EUR 129,557, Tušmobil in the amount of EUR 86,000 thousand, Sky.net in the amount of EUR 33,047 thousand, and Tušmobil in the amount of EUR 28,176 thousand.

The Competition Protection Office of the Republic of Slovenia issued its decision in February 2012 stating that Telekom Slovenije (formerly Mobitel) was in breach of provisions of the Competition Protection Act over the period from November 2008 to July 2010 relating to the sale of its package “Itak Džabest«. In accordance with legal opinion and other professional basis, the Management Board believes that the Company did not breach provisions of the Act and will file an appeal against the decision. Accordingly, no provisions were made. A fine of up to 10% of the annual turnover of the Company (formerly Mobitel) may be imposed for breach of the Act.

Based on the opinions of legal advisors, the management boards of Group companies expect the liabilities from the said legal actions to amount to EUR 28,084 thousand (refer to Note 27).


Commitments for intangible assets and property, plant and equipment

At the end of 2012, commitments for intangible assets amounted to EUR 5,047 thousand (2011: EUR 2,887 thousand), mainly relating to the implementation of information systems and software licences.

Commitments for property, plant and equipment amounted to EUR 7,414 thousand (2011: EUR 6,818 thousand) in 2012 and primarily relate to the construction of the telecommunication network.


Guarantees provided

As at 31 December 2012, the Group provided guarantees for:

  • long-term interest-bearing borrowings in the amount of EUR 147,902 thousand;
  • long-term interest-bearing borrowings in the amount of EUR 147,902 thousand;
  • settlement of contractual obligations in the amount of EUR 5,097 thousand; and
  • settlement of contractual obligations in the amount of EUR 5,097 thousand; and

None of the stated liabilities meets the terms for recognition in the statement of financial position. Thus, no related material consequences are expected.