Annual report 2012

13. Investments in subsidiaries and joint ventures

Investments in subsidiaries

  Company Address Country Core activity Tax rate Share in equity (%) Share of voting rights (%) Value of equity as at 31 Dec Profit or loss
                  2012   2011   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 3,043 1,961
2 Avtenta, napredne poslovne rešitve, d.o.o. Stegne 19, Ljubljana Slovenia system integrator 18% 100 % 100 % 5,996 2,612 183 365
3 TSmedia, medijske vsebine in storitve, d.o.o. Cigaletova 15,  Ljubljana Slovenia multimedia and internet services 18 % 100 % 100 % 9,236 8,007 -3,771 1,414
4 Soline, Pridelava soli, d.o.o. Seča 115, Portorož Slovenia production of salt and preserving and managing a natural park 18 % 100 % 100 % 4,808 4,641 26 227
  OTHER COUNTRIES                    
5 OTHER COUNTRIES Lagija Ulpiana, Rruga "Zija Shemsiu", nr 34, Prishtine Kosovo telecommunication services 10 % 93 % 93 % 4,586 6,377 -1,791 1,792
6 ANEKS d.o.o. Banja Luka Majke Jugovića 25, Banja Luka Bosnia and Herzegovina telecommunication services 10 % 100 % 70 % 9,228 7,666 263 346
7 ONE DOOEL Skopje Bul. Kuzman Josifovski Pitu 15, Skopje Macedonia telecommunication services 10 % 100 % 100 % 28,354 34,612 -7,009 -38,262
8 PRIMO Communications d.o.o. Autostrada Tiranë-Durrës, km 1, Komuna Kashar, Tirana Albanija Albania internet services 10 % 100 % 100 % -1,296 97 -1,396 -1,465
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 -27 -730
10 SIOL, d.o.o. Margaretska 3, Zagreb Croatia telecommunication services 20 % 100 % 100 % 597 589 10 25
11 "SiOL društvo za pružanje telekomunikacijskih usluga" d.o.o. Sarajevo Tešanjska ulica 24 a, Sarajevo Bosnia and Herzegovina telecommunication services 10 % 100 % 100 % 1,659 1,504 -44 -6
12 DRUŠTVO ZA TELEKOMUNIKACIJE "SIOL" DOO PODGORICA Bulevar Svetog Petra Cetinjskog br.106, Podgorica Montenegro telecommunication services 9 % 100 % 100 % 2,365 326 29 -4


Investments in subsidiaries and joint ventures

EUR thousand 2011 Increase Impairment 2012
GVO 5,758     5,758
Tsmedia 11,482 5,000   16,482
Avtenta 1,723 3,200   4,923
Soline 0 147   147
Ipko 6,690   -960 5,730
Aneks 10,000 989   10,989
Primo 528 159 -687 0
SIOL Zagreb 501     501
One 38,785   -2,524 36,261
Digi Plus Multimedia 2,000   -1,761 239
SIOL Podgorica 330 2,010   2,340
SiOL Sarajevo 1,510 200   1,710
Investments in subsidiaries 79,307 11,705 -5,932 85,080
Gibtelecom 36,775     36,775
M-Pay 63     63
Investments in joint ventures 36,838 0 0 36,838
         

Investments in subsidiaries and joint ventures

116,145

11,705

-5,932

121.918

Telekom Slovenije, as the sole owner of Avtenta, adopted a decision during the General Meeting of Shareholders to increase share capital by means of a capital contribution in the amount of EUR 3,200 thousand. Following entry in the companies register on 30 January 2012, the share capital of Avtenta amounts to EUR 4,869.170.

In July 2012, Telekom Slovenije increased the share capital of its subsidiary TSmedia by EUR 5,000 thousand. Share capital now amounts to EUR 5,568,817. In 2012, TSmedia completed liquidation proceedings against its subsidiaries, which were started 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.

During the General Meeting of Shareholders of Soline, Telekom Slovenije, as Soline’s sole shareholder, adopted a decision to increase share capital by a cash contribution in the amount of EUR 147 thousand. Following the increase and its entry in the companies register on 30 July 2012, the share capital of Soline amounted to EUR 4,047,330.92.

Ipko Telecommunications, d. o. o. is the sole owner (100%) of N.B. Media Works, d. o. o., Kosovo, Ipko Net Albania, d. o. o., and of the joint venture DSN, d. o. o. Telekom Slovenije, d. d.’s interest is 93.11%, while an agreement exists between the parent company and the minority shareholders on the acquisition of the remaining interest. The Company disclosed a liability accordingly as at 31 December 2012.

Telekom Slovenije established SIOL, Podgorica in Montenegro in 2011 with the aim of developing a regional optical network over the territory of Montenegro. As the aforementioned company’s sole owner, Telekom Slovenije made a capital increase in April 2012 in the amount of EUR 2,010 thousand. Following entry in the companies register, the share capital of SIOL, Podgorica amounted to EUR 2,340 thousand.

Based on an increase in share capital via a capital contribution paid in December 2011, resolutions adopted by the General Meeting of Shareholders and entry in the companies register in Bosnia and Herzegovina, Telekom Slovenije acquired an additional interest in SiOL, d.o.o., Sarajevo in the amount of EUR 1,500 thousand. As the sole owner of SiOL, d.o.o., Sarajevo, Telekom Slovenije adopted a decision in October 2012 on an additional increase of share capital in the amount of EUR 200 thousand.

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

Telekom Slovenije is the sole owner of all of its subsidiaries as a result of agreements made with minority shareholders on the acquisition of remaining interests in the companies.

In December 2012, Telekom Slovenije signed an agreement 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 a minority shareholder to purchase a 30% participating 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.  


Impairment of investments

As there were objective signs of impairment, the Company made assessments of the fair value of its investments in subsidiaries Ipko Telecommunications, d. o. o., Primo Communications, d. o. o., One, d. o. o. Skopje, and Digi Plus Multimedia DOOEL Skopje.

Due to interwoven operations of the companies in Macedonia and the planned merger of One and Digi Plus Multimedia DOOEL Skopje, both companies were valued together (as One). The carrying amount of One, d.o.o. Skopje represents its value in use, determined as the present value of future free cash flows based on company's 5-year projections. The discount rate before tax applied in the projection ranges from 15.0% in 2012 to 12.9% over the residual period, whereas cash flows over five years are extrapolated based on a 2% growth rate. Based on the valuation, non-current investments in One, d.o.o. Skopje and in Digi Plus Multimedia DOOEL were impaired in the total amount of EUR 4,285 thousand. A sensitivity analysis for the recoverable amount in relation to the weighted average costs of total equity and the growth rate of the residual period within the range -0.5% to + 0.5% and in view of rates applied indicates changes in the recoverable amount in the range EUR 31,043 thousand to EUR 43,383 thousand.

The recoverable amount of Ipko Telecommunications, d. o. o. represents its value in use, determined as the present value of future free cash flows based on company's projections. The discount rate before tax applied in the projection ranges from 15.0% in 2012 to 12.5% over the residual period; cash flows over five years are extrapolated based on the average 3% growth rate of. In compliance with the valuation, the non-current investment in Ipko Telecommunications, d. o. o. was impaired in the amount of EUR 960 thousand. A sensitivity analysis for the recoverable amount in relation to the weighted average costs of total equity and the growth rate of the residual period within the range -0.5% to + 0.5% and in view of rates applied indicates changes the recoverable amount in the range EUR 0 to EUR 19,713 thousand.

The recoverable amount of Primo Communications, d. o. o. represents its value in use, determined as the present value of future free cash flows based on company's projections. The discount rate before tax applied in the projection ranges from 18.5% in 2012 to 14.6% over the residual period; cash flows over five years are extrapolated based on the average 2% growth rate. In compliance with the valuation, the non-current investment in Primo was impaired in the amount of EUR 687 thousand. A sensitivity analysis for the weighted average costs of total equity and the growth rate of the residual period within the range - 1% to + 1% indicates that the analysed factors have no material impact on the estimated recoverable amount of the company as the estimated value is in all cases negative or equals EUR 0.


Investments in joint ventures

  Company Address Country Core activity Tax rate Share in equity (%) Share of voting rights (%) Value of equity as at 31 Dec Profit or loss
                2012 2011 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 % 194 185 13 13
2. Gibtelecom Limited 15/21 John Mackintosh Square, Gibraltar Gibraltar telecommunication services 20 % 50 % 50 % 34,047 35,138 4,797 9,916

In April 2007, Telekom Slovenije, acquired a 50-percent interest in Gibtelecom, a telecommunications provider in Gibraltar. Gibtelecom is a private entity that is not listed on any public stock exchange.

Through its merger with Mobitel, Telekom Slovenije obtained a 50-percent interest in M-Pay.