Annual report 2012

31. Commitments and contingencies

Liabilities and receivables under operating leases

Company 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.

Payable in EUR thousand  2012 2011
- 1 year 17,351 16,686
- 1 to 2 years 29,694 29,520
- 3 to 5 years 31,745 30,670
- 3 to 5 years 82,761 77,736
Total 161,551 154,612

In 2012, the Company recorded EUR 18,062 thousand (2011: EUR 16,706 thousand) of lease costs from operating lease contracts.

Company as the lessor

Receivables from operating leases relate to the lease of property, plant and equipment, in particular to VPN services, the lease of fibre optics, bandwidth, and broadband and call access on the inter-operator market, etc.

Payable in EUR thousand  2012 2011
- 1 year 4,329 4,918
- 1 to 2 years 8,658 9,838
- 1 to 2 years 8,658 9,838
- more than 5 years 21,642 24,597
Total 43,287 49,191

As at 31 December 2012, income from operating leases recognised in profit or loss amounted to EUR 4,329 thousand (2011: EUR 4,918 thousand).

Liabilities under finance leases

The Company has 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 1,540 1,486
- 1 to 5 years 148 1,688
- more than 5 years 0 0
Total 1,688 3,174



EUR thousand 2012 2011
Contingent liabilities from legal actions 614,379 647,720

At the 31 December 2012, the Company recorded 37 pending legal actions brought against it, whereof the majority refers to Si.mobil in the amount of EUR 286,392 thousand, which is followed by T-2 in the amount of EUR 129,557, Tušmobil in the amount of EUR 114,176 thousand and in the amount of EUR 33,047 thousand. Based on the opinions of legal advisors, the Management Board expects the liabilities from the aforementioned legal actions to amount to EUR 25,163 thousand (refer to Note 25).

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 (former Mobitel) may be imposed for breach of the Act.

Guarantees provided

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

  • long-term interest-bearing borrowings in the amount of EUR 147,412 thousand;
  • performance bonds and repairs in the amount of EUR 3,961 thousand;
  • settlement of contractual obligations in the amount of EUR 9,281 thousand; and
  • other guarantees in the amount of EUR 391 thousand.

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

Commitments for intangible assets and property, plant and equipment

At the end of 2012, commitments for intangible assets amounted to EUR 4,861 thousand (2011: 2,462 thousand), mainly relating to the implementation of information systems, applications, services, integrations and information system upgrades.

Commitments for property, plant and equipment amounted to EUR 9,760 thousand (2011: EUR 6,383 thousand) in 2012 and primarily relate to the construction of the telecommunication network, purchases of IT and telecommunications equipment, the construction of electrical and mechanical installations, and construction work.