Annual report 2012

27. Provisions

EUR thousand 31 Dec 2011 Utilisation and reversal Formation 31 Dec 2012
Provisions for probable payments resulting from legal actions 24,589 -1,679 5,174 28,084
Provisions for retirement benefits and jubilee premiums 9,235 -271 405 9,369
Provisions for estimated costs of base stations removal 3,469 0 281 3,750
Other provisions 1,881 -459 1,236 2,658
Provisions for restructuring of the Company 6,445 -5,158 558 1,845
Total 45,619 -7,567 7,654 45,706


Provisions for probable payments resulting from legal actions

Provisions for probable payments resulting from legal actions are created on the basis of the estimation of the actions' outcome. The date of payment cannot be determined.

Total damages claimed by pending legal actions brought against the Telekom Slovenije Group amount to EUR 614,438 thousand (2011: EUR 649,998 thousand).

The Competition Protection Office of the Republic of Slovenia began several ex officio processes to determine an alleged abuse of Telekom Slovenije's dominant position on the market. The Competition Protection Office may impose a fine up to 10% of the annual turnover of the Company. Therefore, the Company made provisions in the amount of EUR 1,992 thousand.


Provisions for retirement benefits and jubilee premiums

Provisions for termination benefits on retirement are based on actuarial calculations. The calculations applied the discount rate of 4.70%, whereas the rate of fluctuation takes account of the age interval ranging from 0% to 3% (2011: discount rate of 4.80%, rate of fluctuation ranging from 0% to 3%). Liabilities reported by the Group are equal to the present value of estimated future payments.

The Group has no other retirement-related liabilities.


Provisions for estimated costs of the removal of base stations

Provisions were formed in the amount of the estimated cost of removal discounted to present value by using the discount rate of 4.70% p.a. which equals the 2012 year-end yield on 10-year guilt-edged bonds from euro area issuers, increased by a local risk premium.