Annual Report 2011 - T-Hrvatski Telekom

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100 Consolidated financial statements 11 Property, plant and equipment Land and buildings HRK millions Telecom plant and machinery HRK millions Tools, vehicles, IT and office equipment HRK millions Assets under construction HRK millions Total HRK millions At 1 January 2010 Cost Accumulated amortization 1,938 (822) 11,088 (6,493) 1,000 (677) 478 (5) 14,504 (7,997) Net book value 1,116 4,595 323 473 6,507 Year ended 31 December 2010 Opening net book value Acquisition of a subsidiary Additions Transfers Disposals Amortization charge Impairment loss 1,116 - 62 100 (1) (103) - 4,595 - 515 152 (4) (774) (46) 323 7 50 85 (3) (129) (4) 473 1 276 (337) (3) - (15) 6,507 8 903 - (11) (1,006) (65) Net book value 1,174 4,438 329 395 6,336 At 31 December 2010 Cost Accumulated amortization 2,098 (924) 11,330 (6,892) 1,176 (847) 411 (16) 15,015 (8,679) Net book value 1,174 4,438 329 395 6,336 Year ended 31 December 2011 Opening net book value Additions Transfers Transfers to intangible assets Disposals Amortization charge Impairment loss 1,174 39 25 - (6) (105) (5) 4,438 436 257 (2) (1) (796) (12) 329 58 28 - (1) (128) - 395 163 (310) - (1) - (22) 6,336 696 - (2) (9) (1,029) (39) Net book value 1,122 4,320 286 225 5,953 At 31 December 2011 Cost Accumulated amortization 2,152 (1,030) 11,428 (7,108) 1,122 (836) 248 (23) 14,950 (8,997) Net book value 1,122 4,320 286 225 5,953
101 Included within assets under construction of the Group are major spare parts of HRK 27 million (31 December 2010: HRK 53 million), net of a provision of HRK 1 million (31 December 2010: HRK 10 million). Beginning in 2001, the Group has performed additional procedures which have provided support for the existence of legal title to land and buildings transferred from HPT s.p.o. under the Separation Act of 10 July 1998. The Group is still in the process of formally registering this legal title. The Group does not have any material property, plant and equipment held for disposal, nor does it have any material idle property, plant and equipment. Impairment loss In 2011, the Group recognized an impairment loss of property, plant and equipment of HRK 39 million (2010: HRK 65 million) due to transfer to the newer technology. The recoverable amount of that equipment is its fair value less costs to sell, which is based on the best information available to reflect the amount that the Group could obtain, at the statement of financial position date, from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. Disposal of property, plant and equipment The disposal of the property, plant and equipment primarily relates to the disposal of telecom machinery, old tools, IT, office equipment and vehicles of HRK 300 million and disposal of technical equipment for mobile voice services of HRK 380 million (all values stated as gross book values). of HT’s infrastructure that may be considered as a real estate which is also known as Distributive Telecommunication Infrastructure (DTI, TI or ducts) - does not have all the necessary documents (building, use permits etc.) and the major part is not registered in the land registry, which may be relevant to the issue of proving the ownership towards third parties. Intrusions in HT’s ducts by other competitors and some requirements of ownership over these assets by the local authorities (the City of Zagreb and City of Split present the majority of problems), may have a material effect on the financial statements in the case that HT will not be able to prove its ownership rights for some ducts. The Company formed the Technical Infrastructure Contractual Relation Management Work Unit that is responsible to assure that all network technology related assets are properly legalised, documented and that this documentation is available to all relevant departments and authorities. The overall process is slow and complex since the registration depends not only on HT but also on local and state authorities. Since the year 2006 the actions of HT have been concentrated on the conclusion of “right of servitude” contracts with local municipalities and “right of use” contracts with Croatian and County Roads. In connection with the offer for sale of ordinary shares held by the Government of Republic of Croatia (RoC) in 2007, the Government of RoC, the Company and Deutsche Telekom AG have entered into a Memorandum of Understanding on how the various issues relating to the Initial Public Offering, including DTI infrastructure should be resolved. Inter alia this provides the underlying principles under which right of way charges and shared usage issues will be based. Consolidated financial statements Ownership over ducts Although the assets (including the ducts as a part of the infrastructure) were transferred from the legal predecessor of the Company, HPT Public Company by virtue of the “Law on Separation of Croatian Post and Telecommunication” and contributed by the Republic of Croatia (“RoC”) to the share capital at the foundation of the Company on 1 January 1999, according to other Croatian legislation, part The Government of the Republic of Croatia has committed, within the limits of its authority, to use its reasonable efforts to provide for the appropriate legislation and regulations under the Croatian legal system as soon as practicably possible. In accordance with Ordinance on Manner and Conditions for Access and Joint Use of Electronic Communications Infrastructure and Related Equipment (Official Gazette No. 154/08 effective as
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Annual Report 2011
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3 Operating Statistics Key operatio
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Content 5 2 3 7 8 10 12 16 21 22 28
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8 Letter To Shareholders Introducti
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10 Corporate Profile Introduction A
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12 Investor Information Economic en
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14 Dividend proposal for the 2011 f
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16 Management Board Introduction Br
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18 Introduction Branka Skaramuča M
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20 Introduction As a result of the
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22 Supervisory's Board Report Intro
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24 Introduction • Cash management
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26 Summary of the work performed Re
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28 Corporate Governance Code Compli
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30 Introduction Currently the Manag
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II. Business review 2011 Croatian T
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35 first 10 months of 2011 against
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Regulatory Environment 37 Croatian
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Group's Strategy 39 T-HT Group Miss
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Organization of the Group 41 T-HT G
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43 Blended ARPU decreased by 11.0%
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45 additional products: naked bitst
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47 Transport Layer DWDM (Dense Wave
Page 49 and 50: 49 Data and IT Security The protect
Page 51 and 52: 51 Corporate Responsibility III. Co
Page 53 and 54: 53 Code of Conduct T-HT’s Code of
Page 55 and 56: 55 Culture Museum of Contemporary A
Page 57 and 58: 57 Full time employees by education
Page 59 and 60: 59 with direct investments into ext
Page 61: 61 In 2011, Iskon was the official
Page 64 and 65: 64 Group Financial Performance Fina
Page 66 and 67: 66 Financial Review 2011 Terminal e
Page 69 and 70: Consolidated financial statements 3
Page 71 and 72: Independent auditor’s report 71 T
Page 73 and 74: Consolidated statement of financial
Page 75 and 76: Consolidated statement of cash flow
Page 77 and 78: Notes to the consolidated financial
Page 79 and 80: 79 IAS 39 Financial instruments: Re
Page 81 and 82: 81 two types of joint arrangement:
Page 83 and 84: 83 substance of the tax), the Group
Page 85 and 86: 85 Impairment losses relating to go
Page 87 and 88: 87 k) Leases Leases in which a sign
Page 89 and 90: 89 provided that there are no unful
Page 91 and 92: 91 · Statement of comprehensive in
Page 93 and 94: 93 Revenue — by geographical area
Page 95 and 96: 95 7 Other expenses Maintenance ser
Page 97 and 98: 97 The deferred tax asset of the Gr
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Page 103 and 104: 103 The movement in investments in
Page 105 and 106: 105 14 Available-for-sale financial
Page 107 and 108: 107 At 1 January Charge for the yea
Page 109 and 110: 109 At 1 January Service costs reco
Page 111 and 112: 111 23 Legal reserves Legal reserve
Page 113 and 114: 113 27 Contingencies At the time of
Page 115 and 116: 115 The main transactions with rela
Page 117 and 118: 117 29 Financial risk management ob
Page 119 and 120: 119 Year ended 31 December 2011 Cro
Page 121 and 122: 121 electronic communications netwo
Page 123 and 124: 123 the achievement of two share va
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Page 127 and 128: 127 FINANCING 75 Pojmovnik FRAME RE
Page 129: 129 SUPERVISORY BOARD 7, 9, 14, 18,
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Annual Report 2011 - T-Hrvatski Telekom

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