Annual report 2012

12. Property, plant and equipment

Land, buildings and cables lines are carried at fair value, whereas other items of property, plant and equipment are stated at cost.

Land and buildings were valued by a licensed appraiser to fair value as at 1 October 2012.

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties as at the date of measurement. The fair value of properties is usually their market value. The market value of property, plant and equipment is the estimated amount for which a property could be exchanged on the date of acquisition between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably.

For the purpose of appraisal, properties are classified into three groups by taking into account their carrying amount as at the date of appraisal:

  • properties whose carrying amount exceeds EUR 5 million (62% of total carrying amount);
  • properties whose carrying amount ranges from EUR 1 million to EUR 5 million;
  • properties whose carrying amount is up to EUR 1 million.

As defined within the International Valuation Standards, all three valuation methods (i.e. market value method, discounted cash flow method, and cost method) were applied for properties whose carrying amount exceeds EUR 5 millions. In case of properties with a value ranging from EUR million to EUR 5 million, the market value method and the cost method were applied, while the market value method was used for properties worth less than EUR 1 million. Taking into account the purpose for which the asset is used, the fair value hierarchy was applied for each asset separately.

Glede na namen uporabe pa je bila upoštevana hierarhija poštene vrednosti za vsako sredstvo posebej.

The value of land and buildings decreased according to the appraiser's report by EUR 4,223 thousand. A related impairment was recorded through profit or loss in the amount of EUR 1,919 thousand, as well as lower revaluation reserves by EUR 2,304 thousand and a reversal of deferred taxes in the amount of EUR 345 thousand.

Cable lines were valued by a licensed appraiser as at 1 January 2010 using the depreciated replacement cost method as no comparable prices are available for these assets.

In 2012, significant increases in property, plant and equipment primarily included the acquisition of real estate and cable lines amounting to EUR 9,253 thousand, construction and modernisation of the cable network in the amount of EUR 6,803 thousand, acquisition of telecommunications equipment in the amount of EUR 38,015 thousand and other equipment.

As at 31 December 2012, the carrying amount of equipment under finance lease was EUR 2,896 thousand.

Property, plant and equipment are free of encumbrances.


Property, plant and equipment are free of encumbrances.

EUR thousand Land, buildings, cables and lines Cable network Switching exchanges Equipment for mobile telephony Other equipment PPA under con-struction Total
COST              
Balance at 1 Jan 2012 393,500 871,951 277,106 587,061 410,299 28,331 2,568,248
Revaluation effect – increase 586 0 0 0 0 0 586
Revaluation effect – decrease -30,798 0 0 0 0 0 -30,798
Additions 0 0 0 12 3,834 61,141 64,987
Transfer from assets under construction 9,253 6,803 3,639 13,571 20,805 -54,071 0
Disposal, write-offs -1,140 -286 -8,018 -1,000 -18,512 -648 -29,604
Other transfers 54,785 0 13 -67,793 12,991 4 0
Balance at 31 Dec 2012 426,186 878,468 272,740 531,851 429,417 34,757 2,573,419
ACCUMULATED DEPRECIATION              
Balance at 1 Jan 2012 77,059 645,397 258,204 419,493 330,411 0 1,730,564
Revaluation effect -25,989 0 0 0 0 0 -25,989
Additions 84 0 0 0 0 0 84
Depreciation 17,649 24,413 8,065 36,081 32,410 0 118,618
Disposal, write-offs -42 -261 -7,902 -1,000 -17,920 0 -27,125
Other transfers 31,779 0 13 -39,528 7,738 0 2
Balance at 31 Dec 2012 100,540 669,549 258,380 415,046 344,867 352,639 0 1,796,154
CARRYING AMOUNT              
Balance at 1 Jan 2012 316,441 226,554 18,902 167,568 79,888 28,331 837,684
Balance at 31 Dec 2012 325,646 208,919 14,360 116,805 76,778 34,757 777,265


Movement in property, plant and equipment in 2011

EUR thousand Land, buildings, cables and lines Cable network Switching exchanges Equipment for mobile telephony Other equipment PPA under construction Total
COST              
Balance at 1 Jan 2011 388,358 865,698 283,567 570,353 410,800 29,607 2,548,383
Additions 0 0 0 131 585 50,849 51,565
Transfer from assets under construction 6,116 8,024 2,337 17,902 18,039 -52,418 0
Disposal, write-offs -973 -1,771 -8,798 -1,325 -19,125 292 -31,700
Other transfers -1 0 0 0 0 1 0
Balance at 31 Dec 2011 393,500 871,951 277,106 587,061 410,299 28,331 2,568,248
ACCUMULATED DEPRECIATION              
Balance at 1 Jan 2011 63,183 621,420 257,474 372,552 312,648 0 1,627,277
Additions 32 0 0 3,724 129 0 3,885
Depreciation 14,151 25,748 9,402 44,306 36,438 0 130,045
Disposal, write-offs -307 -1,771 -8,672 -1,089 -18,804 0 -30,643
Balance at 31 Dec 2011 77,059 645,397 258,204 419,493 330,411 0 1,730,564
CARRYING AMOUNT              
Balance at 1 Jan 2011 325,175 244,278 26,093 197,801 98,152 29,607 921,106
Balance at 31 Dec 2011 316,441 226,554 18,902 167,568 79,888 28,331 837,684