Semi-Annual Report of the Management Board on the Company

Transcription

Management Board Report on the Company Status
for the Period between 1 January 2014 and 30 June 2014
Zagreb, August 2014
Organisation and
Human
Resources
Network
Services
Multimedia
Services
Infrastructure
Television and
Radio
Programme
Broadcasting
Services
OB-31/0/14
www.oiv.hr
Report on the Company Status between 1 January - 31 June 2014
CONTENTS
1.
INTRODUCTION ....................................................................................................................................................... 4
MANAGEMENT BOARD REPORT ................................................................................................................................................... 4
2.
COMPANY ACTIVITIES AND POSITION ..................................................................................................................... 6
INSTITUTIONAL FRAMEWORK....................................................................................................................................................... 6
LEGAL FRAMEWORK .................................................................................................................................................................. 6
ACTIVITIES ............................................................................................................................................................................... 6
MANAGEMENT, STRUCTURE AND ORGANISATION ........................................................................................................................... 7
MANAGEMENT SYSTEM .............................................................................................................................................................. 9
Environmental Protection................................................................................................................................................ 9
3.
KEY FINANCIAL INDICATORS .................................................................................................................................. 11
4.
GENERAL OBJECTIVES ............................................................................................................................................ 12
5.
ACTIVITIES – CONDITION, OVERVIEW ON THE FIRST HALF OF 2014 OVERVIEW, AND 2014 OBJECTIVES ................ 13
TELEVISION AND RADIO BROADCASTING ....................................................................................................................................... 14
Digital Terrestrial Television – Publicly Available Programmes – „free-to-air“ ............................................................. 14
Digital Terrestrial Television – Programmes Protected by Conditional Access System (CAS) – "Pay-TV" ..................... 16
Terrestrial Broadcasting of Radio Programmes ............................................................................................................ 17
Satellite Transmission.................................................................................................................................................... 18
MULTIMEDIA ......................................................................................................................................................................... 19
IPTV ............................................................................................................................................................................... 19
Playout .......................................................................................................................................................................... 19
New Multimedia Services (OTT and HbbTV) .................................................................................................................. 20
FIBER OPTIC AND MICROWAVE LINKS ........................................................................................................................................... 20
Fiber Optic Link System ................................................................................................................................................. 21
Microwave Link System ................................................................................................................................................. 24
SERVICES IN PROFESSIONAL MOBILE NETWORK (PMR) .................................................................................................................. 25
SUPPORT AND OTHER ACTIVITIES ................................................................................................................................................ 26
Colocation – leasing electronic communications infrastructure ................................................................................... 26
Project Design, Installation, Maintenance .................................................................................................................... 26
Contact centre ............................................................................................................................................................... 27
6.
BUSINESS ENVIRONMENT AND OPERATIONAL RISKS ............................................................................................ 28
OPERATIONAL RISKS ................................................................................................................................................................ 28
Capital Risk .................................................................................................................................................................... 28
Price Risk ....................................................................................................................................................................... 28
Interest Rate Risk........................................................................................................................................................... 28
Credit Risk ...................................................................................................................................................................... 28
Liquidity Risk.................................................................................................................................................................. 29
7.
HUMAN RESOURCES.............................................................................................................................................. 30
EMPLOYEE COSTS AND STRUCTURE............................................................................................................................................. 30
EDUCATION ........................................................................................................................................................................... 30
WORK ENVIRONMENT ............................................................................................................................................................. 31
RESPONSIBILITY TOWARDS EMPLOYEES........................................................................................................................................ 31
REMUNERATION AND SUPPORT ................................................................................................................................................. 31
OCCUPATIONAL SAFETY............................................................................................................................................................ 31
PROTECTION OF EMPLOYEES' DIGNITY......................................................................................................................................... 32
EMPLOYEES - MANAGEMENT BOARD RELATIONSHIP ...................................................................................................................... 32
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8.
SOCIAL RESPONSIBILITY ......................................................................................................................................... 33
COMMUNITY ASSISTANCE ......................................................................................................................................................... 33
ETHICS IN BUSINESS................................................................................................................................................................. 33
CORPORATE MANAGEMENT CODE ............................................................................................................................................. 33
ANTI-CORRUPTION PROGRAMME ............................................................................................................................................... 33
9.
CONCLUSION ......................................................................................................................................................... 35
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1. Introduction
Management Board Report
Despite challenging business environment, company Odašiljači i veze d.o.o. achieved good business results and
positive financial result in the first half of 2014. In order to reduce further negative impacts of unfavourable
economic and financial circumstances and to maintain business stability, Company increased its efforts in
search for new markets, implemented business cost cutting measures and systematically realised goals
defined by strategic documents aimed at increasing income from new sources.
Company's pre-tax profit was HRK 17.9 million, 241.1% over the plan for the first half of 2014 and 24.4% more
than in the same period in 2013. The income tax was HRK 2.1 million, giving the after tax profit of HRK 15.8
million.
The operating income realised in the first half of 2014 was HRK 118.1 million, 6.6% under the plan and 1.8%
less than in the same period in 2013.
In accordance with the defined mission and outlined strategic objectives, Odašiljači i veze d.o.o. has been
applying an integrated management system compliant with the requirements of HRN ISO 9001:2008 Quality
Management Systems and ISO 14001:2004 Environmental Protection Management System. Given the
specificities of our services and their limited number of customers, particular attention was given to customer
relationship in order to realise mutual economic benefit and successful cooperation.
During the first half of 2014, OiV continued with regular broadcasting of the programmes of HRT, RTL Televizija
and Nova TV on multiplexes A and B, as well as regular broadcasting of all the national, regional, and local
television programmes on MUX D. Regular broadcasting of HRT's FM radio programmes also continued. At the
beginning of 2014 HRT cancelled broadcasting of Glas Hrvatske programme on medium wave (MW).
Starting from January 2014 broadcasting of the new programme RTL Kockica began.
During the 2014 World Cup in Brazil television broadcasting in HD format was established for HRT on a free
programme position on MUX B.
Satellite broadcasting of one radio and one television programme for Radio-television Serbia has been settled
from 1 June 2014 for a three-year period.
The interference from Italy continues to be a severe problem for the reception of Croatian TV and radio
programmes on the entire coastal area, from Istria to Dubrovnik and islands, and during summer, in warmer
weather, the reception issues become more prominent.
On 22nd May, 2014, the Ordinance on Amendments to the Ordinance on Payment of Fees for Right to Use
Addresses, Numbers and Radio Frequency Spectrum, Official Gazette 62/14, entered into force. It decreased
by 50 % the fees for the use of radio frequency spectrum for digital terrestrial television. Ordinance provisions
will apply effectively to MUX A and MUX B only after 24th April, 2014 and for all the publishers on MUX D the
broadcasting fee will be lower after 21 June 2014 following the lower fees for the use of frequency spectrum.
In 2014, following the contractual obligations between OiV and HPP, broadcasting of Pay TV service EvoTV
continued to the full extent on multiplexes MUX C and MUX E with total of 17 broadcasting locations and
covering 87.4% of citizens in Croatia.
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One of Company's strategic goals is continued expansion of multimedia services IPTV and PlayOut. During the
first half of 2014, a test OTT platform was developed and implemented in order to offer new service on the
market.
The Company plans to continue building OiV fibre optic network with the goal of linking the largest cities in the
Republic of Croatia and establishing links with the fibre optic networks of neighbouring countries. Late in 2013
Varaždin was included in the network, in the first half of 2014 Zadar as well, and by the end of the year it is
planned to include border crossings Bajakovo and Bregana, important locations in Zagreb, Šibenik and Osijek,
and modulation link (also being the spare link) to Deanovec.
Since the beginning of 2014 significant activities, which started intensively during the previous business year
on the Project of unification of fiber optic infrastructure, have been realized. On February 21st, 2014 company
signed long term contracts for the management of the surplus of fiber optic infrastructure with the following
five companies: Autocesta Rijeka-Zagreb, Hrvatske autoceste, Hrvatske ceste, HŽ Infrastruktura, Janaf; the
contract with HEP Telekomunikacije was also signed on June 30th, 2014 and the contract with Plinacro is being
prepared.
Signed contracts mark the beginning of practical implementation of the Project by placing the surplus of fiber
optic infrastructure on the electronic communication market and the realisation of one of the important
objectives of the Strategy for the development of broadband access in Croatia.
On June 30th, 2014 the number of Company employees was 291.
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2. Company Activities and Position
Institutional Framework
Odašiljači i veze fall under the Ministry of Maritime Affairs, Transport and Infrastructure, and its activities are
under the Directorate for Air Traffic, Electronic Communications and Postal Services.
The following regulatory agencies have authority over its activities:
Croatian Regulatory Authority for Network Industries (hereinafter referred to as.: HAKOM)
Agency for Electronic Media (hereinafter referred to as.: AEM)
Legal Framework
Legal framework for the activities of Odašiljači i veze consists of the following acts:
Electronic Communications Act, Official Gazette 73/08, 90/11, 133/12, 80/13, 71/14
Electronic Media Act, Official Gazette 153/09, 84/11, 94/13, 136/13
Law on the Croatian Radio-Television, Official Gazette 137/10, 76/12
Laws in the area of physical planning and construction
Security and Intelligence System Act, Official Gazette 79/06, 105/06
Regulation on the requirements in the area of national security of the Republic of Croatia placed on
natural persons and legal entities in telecommunications, Official Gazette 64/08
Activities
Based on the classification of the relevant regulatory agency HAKOM - Croatian Regulatory Authority for
Network Industries, Odašiljači i veze is an operator registered for the following activities:
Providing access to and joint use of electronic communication infrastructure and related equipment;
Leasing electronic communication networks and/or lines;
Providing transmission of images, voice and sound using electronic communication networks (which
excludes broadcasting service);
Managing multiplex in broadcasting;
Conveying, transmitting and/or receiving images, voice, sound and other data for the purpose of direct
reception by public in terrestrial broadcasting;
Providing satellite services;
Providing services in the private mobile network (PMR) (from 1 January 2014).
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Management, Structure and Organisation
Odašiljači i veze d.o.o. is 100% owned by the Republic of Croatia.
Company Odašiljači i veze d.o.o. was founded by the Articles of Association that established an independent
limited liability company on April 16th, 2002, and it was created by dismantling the public institution Hrvatska
radiotelevizija (Croatian Radio and Television) into two entities: Hrvatska radiotelevizija and Odašiljači i veze
d.o.o.
In accordance with the Companies Act and Articles of
Association of Odašiljači i veze d.o.o., Company has an
MANAGEMENT BOARD
Assembly, a Supervisory Board and a Management Board. The
Assembly recalls and appoints the Supervisory Board.
DIVISION AND INDEPENDENT DEPARTMENT
DIRECTORS
Company's Supervisory Board has five members. Four
members of the Supervisory Board are elected by the
Figure 2-1 Organisational structure
Assembly, while one member is elected by the employees of
the Company. The term of office of the Supervisory Board
members is four years. The fundamental authority of the Supervisory Board is to continuously supervise how
Company business operations are managed, and to appoint members of the Management Board. During 2012,
the Supervisory Board members were appointed and during 2014, one member of the Supervisory Board,
employees' representative was changed. Supervisory Board Members
SUPERVISORY BOARD
Marijan Crnjak
Mislav Peričić
Lora Čurković
Damir Vuk
Saša Radulić
Pavao Vitaljić
Chairman of the Supervisory Board
Vice Chairman of the Supervisory Board
Supervisory Board Member
Supervisory Board Member
Supervisory Board Member, employees' representative till June 5, 2014
Supervisory Board Member, employees' representative from June 6, 2014
The authorities, duties and responsibilities of the Management Board relating to business management and
Company representation are laid down in the Articles of Association of Odašiljači i veze d.o.o., that being the
constitutive document of the Company. The Members of the Management Board represent Company severally
and independently. The fundamental authority of the Management Board is to conduct business of the
Company and to represent the Company in front of third parties. The Management Board is, among other
things, required and authorised to undertake all actions and render all decisions it deems necessary to
successfully manage business of the Company, which, among other things, includes making the decisions for
the purpose of implementing business strategy, and work and development plans and programmes. The
Management Board consists of the following members:
Aleksandar Golub
Vlatka Dokoza
Board Chairman
Board Member
The basic work organisation forms of Odašiljači i veze are organisational units representing operational
systems for providing services in the area of telecommunications in fixed networks, as well as using radio
spectrum, and providing services of projecting and supervising construction and installation of
telecommunication objects, creating projects in the field of electric and electronics, as well as installation,
maintenance, and directing of telecommunication equipment, and performance of joint tasks for the
requirements of Odašiljači i veze.
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Organisational structure consists of:
Divisions and Independent Departments;
Departments
Based on the decision of the Management Board of Odašiljači i veze, it is also possible to establish temporary
structural units on the company level for implementation of projects relevant for the overall activity of
Odašiljači i veze. The divisions are headed by division directors who report to the Company Management
Board. The independent departments are headed by independent department directors who report to the
Company Management Board. Departments are headed by the department managers who report to the
manager of the division that established the department. A general act on job systematisation, Management
Board decision, or employment contract can foresee for certain managers to manage lower organisational
units as well.
MANAGEMENT BOARD
SALES AND MARKETING
INDEPENDENT DEPARTMENT
STRATEGY AND DEVELOPMENT
MANAGEMENT OFFICE
HUMAN RESOURCES AND LEGAL
AFFAIRS INDEPENDENT DEPARTMENT
PLANNING, ACCOUNTING AND
FINANCES INDEPENDENT
DEPARTMENT
CONTROLLING
MANAGING,
MONITORING AND
PROCESSING DIVISION
REGIONAL
CENTER
DIVISION
INSTALLATION,
BUILDING AND
MAINTENANCE
DIVISION
TELECOMMUNICATION
DIVISION
RADIO
COMMUNICATION
DIVISION
LOGISTICS
DIVISION
Figure 2-2 Organisational structure
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Management system
The OiV activity is based on economic and developmental sustainability.
Standards and certificates:
ISO 9001 – Quality Management System
ISO 14001 – Environmental Protection Management System
OHSAS 18001 – Occupational Health and Safety Management System
By doing business in compliance with the implemented international standards and specifications, that are
continually developed and maintained, Odašiljači i veze proves its eagerness to permanently improve quality
of business, to take care of the users of its services, to protect environment, and to not only accept legal
standards, but also to set on its own higher standards and to continuously monitor the state of its business
activities.
Ethics and protection of Company reputation and assets are given particular attention in all business
segments.
In accordance with its business policy, OiV manages the quality of its services using the Quality Management
System to define operating processes, to determine responsibilities and roles in the fulfilment of business
objectives, to conduct supervision, and to produce reports. The Management System is regularly updated and
adapted to the business strategy.
The Quality Management System is verified using internal assessments one to three times per year (depending
on the area), and once a year through the evaluation of an independent assessor, which is a certification
company.
Business objectives are defined in the business plan and their realisation is monitored on a monthly and
quarterly basis, and the Management Board is notified of the results.
Environmental Protection
The company Odašiljači i veze puts great importance into environmental protection and continuously works on
improving environmental protection management system, wherever and whenever possible.
The environmental protection goals are ensured
by:
New
technologies
Education and
improvement
Action in case of
unforseen
events
Waste
management
Waste reduction
/ Reuse
Preventive and
active
maintenance
Waste management procedures in accordance
with economic and environmental protection
principles that include
waste management
following the legally defined procedures;
Avoiding creation of waste, if possible, and
reusing it for some other purposes;
Preventive and active maintenance of
equipment and installations;
Continuous education and improvement of
environmental protection management system
procedures;
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Organised action in case of a sudden event in accordance with the intervention plans
Introduction of new technologies (reducing power use, long-term reduction of various waste loads...).
Figure 2-3 Realisation of environmental protection goals
OiV holds ISO 14001:2004 Environmental Protection Management System Certificate. By taking care of our
environment, we provide for needs and expectations of current and future generations.
Internal and external verification of the functioning of the Environmental Management System is conducted
systematically and regularly.
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3. Key Financial Indicators
Indicators
Realised in JanJun 2013
Realised in
Jan-Jun 2014
Comparison
Operating income
120,214,349
118,102,244
98.2
Total income (operating + financial)
121,490,338
119,962,041
98.7
Operating expenses
99,470,212
95,360,901
95.9
Material costs
34,462,331
30,523,398
88.6
Personnel costs
25,238,936
24,924,008
98.8
Depreciation
29,431,315
28,128,632
95.6
Intangible costs
10,337,630
11,784,863
114.0
107,078,452
102,039,122
95.3
EBIT
20,744,137
22,741,343
109.6
EBITDA
Total expenses (operating + financial)
50,175,452
50,869,975
101.4
EBIT margin
0.17
0.19
111.0
EBITDA margin
0.41
0.42
102.7
Gross profit
14,411,887
17,922,919
124.4
Earnings after taxation
13,241,196
15,794,130
119.3
141,745,378
141,116,299
99.6
Stock
24,484,511
30,838,803
126.0
Receivables
64,910,323
45,812,365
70.6
Current assets
Cash
15,821,850
2,862,728
18.1
Fixed assets
360,189,601
332,104,377
92.2
Total assets = Assets
505,921,952
476,529,930
94.2
Total capital
239,441,381
247,403,272
103.3
Current liabilities
35,930,693
167,959,024
467.5
226,659,824
56,700,865
25.0
ROE
0.06
0.07
ROA
0.03
0.04
ROS
0.12
0.15
Financial stability ratio
0.77
1.09
Coverage level I
0.66
0.74
Coverage level II
1.29
0.92
Debt ratio
0.52
0.47
Total assets turnover ratio
0.24
0.25
0.86
0.85
Long-term liabilities
Current assets turnover ratio
Table 3-1 Key Financial Indicators
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4. General Objectives
OiV's general objectives are strengthening its market position by developing new services, and maintaining
and developing electronic communication infrastructure and related equipment.
Strengthening positions in core activities and developing new services
Strengthen its position of the market leading network operator in the Republic of Croatia in the sector
of terrestrial broadcasting;
Continue expanding telecommunication services, especially by expanding capacities in the fiber optic
network;
Continue expanding multimedia services;
Develop new services;
Monitor customers' requirements and wishes and promptly react in all areas, especially in
telecommunication services, digital television, and new multimedia services;
Work continuously on improving quality of all services.
Maintaining and developing electronic communication infrastructure and related equipment
Keep its position among the leading infrastructure operators in the Republic of Croatia;
Work continuously on maintaining and developing infrastructure, and on upgrading services;
Take continuous care in all the aspects of environmental protection.
Basic development guidelines are innovation and adaptation of business offer in accordance with
technological development, market demands and needs of customers, making OiV more recognisable as an
innovative network and service operator in the area of electronic communications. The emphasis is on
providing high quality services to maintain and further make OiV more recognisable as a reliable partner able
to ensure customers’ satisfaction.
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5. Activities – Current situation, Overview on the first half of 2014, and
2014 Objectives
Business activity of Odašiljači i veze d.o.o. can be divided into:
Television and radio broadcasting;
Multimedia;
Fiber optic and microwave links;
Professional mobile radio network (PMR) - beginning with 2014;
Support and other activities.
The main Company objectives in 2014 are:
Income increase of 10% compared to 2013;
Network expansion and filling the remaining slots in the area of television and radio signal
broadcasting;
Project of fiber optic infrastructure unification;
Acquisition of new, primarily foreign, users and new services in the area of multimedia;
Development of professional mobile radio network (PMR) ;
Presence on foreign and neighbouring countries’ markets through consulting services and services of
designing, installing and maintaining digital terrestrial television systems.
Table shows the realization of the plan in the first half of 2014.
Item
2014 plan
Index
TOTAL INCOME
257,809,669
119,962,041
46.5
Operating income
255,202,669
118,102,244
46.3
Terrestrial radio and
television broadcasting
159,605,949
77,599,655
48.6
9,125,700
6,243,474
68.4
24,131,800
6,961,554
28.8
1,222,420
9,840
0.8
61,116,800
27,287,721
44.6
Multimedia
Fiber optic and microwave
links
Professional mobile radio
network (PMR)
Support and other
activities
Financial income
TOTAL EXPENDITURE
2,607,000
1,859,797
71.3
237,430,200
102,039,122
43.0
Operating expenses
224,655,200
95,360,901
42.4
Material costs
88,132,700
30,523,398
34.6
Personnel costs
53,110,000
24,924,008
46.9
Depreciation
60,000,000
28,128,632
46.9
Intangible costs
23,412,500
11,784,863
50.3
Financial expenses
12,775,000
6,678,221
52.3
Profit
30,547,470
22,741,343
74.4
Earnings after taxation
15,803,576
15,794,130
99.9
Table 5-1 Comparison of plan and realization
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There have not been significant differences in operating income compared to the same period of the previous
year.
Item
Operating income
Realised in
Jan-Jun 2014
Comparison
120,214,349
118,102,244
98.2
Television and radio broadcasting
Multimedia
Fiber optic and microwave links
Professional mobile radio network (PMR)
80,214,443
7,020,980
9,798,230
0
77,599,655
6,243,474
6,961,554
9,840
96.7
88.9
71.0
-
Support and other activities
23,180,696
27,287,721
117.7
Table 5-2 Income by activity
Television and radio broadcasting
Digital Terrestrial Television – Publicly Available Programmes – “free-to-air“
Over the last ten years Odašiljači i veze has invested significant assets in building digital terrestrial television
networks (DVB-T). Three digital terrestrial television networks (multiplexes - MUX) have been built for DVB-T
standard with MPEG-2 video content encoding system:
MUX A
 10-year licence – valid until 24 April 2019;
 National coverage – more than 98% of the population;
 The entire multiplex capacity is used, four national programmes are broadcast, two of which
are general HRT programmes in line with the Law on the Croatian Radio-Television;
MUX B
 10-year licence – valid until 24 April 2019;
 National coverage – more than 96 % of the population;
 Multiplex broadcasts four specialised programmes, and the fifth slot remains empty.
MUX D
 10-year licence – valid until 21 July 2020;
 National coverage – more than 90% of the population. two programmes are broadcast on
national level (sptv, CMC), and an additional new programme– RTL Kockica started in January
2014.
 Regional coverage (D1-D9) – coverage depends on the region, but it is at least 70% of the
population. There are 16 programmes broadcast on regional level.
 Local coverage (networks have been built for regions d71, d72 and unified region d44-d45d46). There are four programmes broadcast on local level. In each of the regions D2, D4, D6,
D7 and D9, and d71 and d72 there is one free slot, and in the region d44-d45-d46 there are
two free programme slots.
The main problem are vacant slots in multiplexes B and D, and subsequently reduced income which has direct
impact on cost effectiveness of the digital broadcasting of a multiplex, since the permits have a set expiration
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date. Apart from that, operational costs of networks are the same no matter how filled their slots are, all the
frequency fees are paid in full amount, equipment depreciation goes on, etc. Because of one vacant slot in the
B multiplex OiV loses approximately HRK 7.4 million per year.
Global economic crises caused significant reduction in advertising, main income source of all commercial
television networks, and this has also reflected on OiV since publishers, especially those on regional and local
levels, meet their obligations with increasing difficulty.
The continuation of this trend is to be expected over the forthcoming period, i.e. some publishers might stop
their operations, there might be bankruptcies, merging of publishers etc., all of which can also have negative
impact on the occupation of multiplex slots, and thus loss of income.
Other problems are:
Interference by Italian transmitters on the entire Adriatic coastal area. The interference by Italian
transmitters on the entire coastal area, from west shore of Istria to Prevlaka, is a particular problem
for all the digital terrestrial television networks, preventing good reception of all Croatian
programmes. Still, there has been no progress with resolving Italian interference which led to huge
public pressure caused by justified complaints by viewers who are, especially during summer months,
prevented from following national and local broadcasters’ programmes. There is a danger that part of
the viewers will stop paying television licence fees, which can indirectly also have effect on OiV. Apart
from the viewers, publishers are also sustaining great damages, and there is the danger that they will
cancel
transmission
service
or
request
fee
reduction.
In December 2013 the Italian Government adopted a regulation requiring the release by the end of
2014 of all the frequencies causing reception interference to domestic television programmes in the
neighbouring countries. If the frequencies are not released, after that deadline the Italian authorities
will be able to undertake further enforcement measures foreseen by the legislation. In the first half of
2014 those measures gave no specific results.
In addition, a new public tender for Italian frequencies was carried out, which can additionally increase
the interference problem. Out of the planned three new network frequencies, only one has been
awarded (channels 25 and 59) for the period of 20 years.
Potential interference from new LTE networks of mobile operators HT and VIPnet operating in
the frequency area of 791-862 MHz (so called 1st digital dividend, 800 MHz band). Resolving potential
interference from LTE networks falls on mobile operators, and the procedure has been defined in
collaboration with HAKOM.
Business in the first half of 2014
In the first half of 2014 the realised income was HRK 45.8 million, HRK 0.3 million more than in the same
period of 2013 despite the removal of TV PLUS d.o.o. on May 21st 2013 from the digital broadcasting system in
MUX D, and despite price adjustments in MUX A and B in April 2013 and in MUX D in July 2013. Transmission
pricing was adjusted due to lower fees for the use of radio spectrum, and due to the increased prices of
electric power and fuel compared to those in 2009 (MUX A, B) and 2010 (MUX D). The adjusted prices are
lower than the old prices, which decreased the income, but, at the same time, the costs are lower, so the
mentioned changes have no significant impact on profit.
At the beginning of January 2014, began broadcasting of the new programme RTL Kockica on MUX D. In its
session of 24 June 2014, the Electronic Media Council decided to permanently revoke the concession for
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programme of Gradska televizija d.o.o. Zadar, and based on that decision, OiV has cancelled broadcasting of
the programme in MUX D, region d71.
Objectives in 2014
Find solution to filling the remaining capacity of the multiplexes B and D.
The investments concern regular, planned investments into network optimization and equipment
replacement based on its life cycle and permit duration, which includes the equipment for signal processing,
conveyance and transmission, and UHF antenna systems.
Digital Terrestrial Television – Programmes Protected by Conditional Access
System (CAS) – "Pay-TV"
On the grounds of a joint bid in the HAKOM's public tender procedure for managing MUX C and MUX E, OiV,
HPP, and HP were selected as the network operator. Both networks operate using DVB-T2 standard with
MPEG-4 encoding system and conditional access system (CAS) for the broadcast content, with the goal of
offering service of paid digital terrestrial television (PayTV) under the commercial name "evotv".
Based on to the Permit and mutual contractual obligations, OiV is bound to build and manage MUX C and MUX
E networks in two phases as defined by the Permit. There is a possibility of further expansion, i.e. additional
phases, depending on the project's success. HPP is in charge of managing and coordinating the entire project,
while HP is in charge of procuring and buying content and copyright on the content to be transmitted, and sale
of the service to end users.
Just like in the case of FTA (free-to-air) DVB-T networks, there is a problem of Italian interference in the
Adriatic coastal area that, together with the global economic crisis, has negative impact on service sales to end
users.
In the first half of 2014 the realised income was HRK 10.5 million, HRK 1.1 million more compared to the same
period of the previous year.
The first phase of network building was finished on July 15th, 2012 by starting operations at 12 transmitter
locations for both multiplexes, achieving coverage of more than 80% of the population of the Republic of
Croatia. The commercial operation started on September 15th 2012.
On May 9th, 2013 holders of the Permit for MUX C&E (HPP, OiV, HP) submitted a request to HAKOM to change
the Permit RF-DTV-01/11 in the part regarding the dynamics of further network building.
Accordingly, during 2013 the realisation of the second phase of network building started, and it was
concluded in December 2013 by starting operations at 5 additional transmitter locations, achieving coverage
of approximately 87.4% of the population of the Republic of Croatia for both multiplexes.
2014 Plan
Further expansion of MUX C and E should be planned together with "evotv" project partners.
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Terrestrial Broadcasting of Radio Programmes
Odašiljači i veze built and managed the following VHF/FM radio networks with national concessions:
HRT HR1;
HRT HR2;
HRT HR3;
HRT HR locally.
Since December 2012 there is a new contract between OiV and HRT on broadcasting service for HRT's radio
programmes, and the contract duration is until the end of 2016.
Apart from broadcasting of radio programmes, OiV, in its role of infrastructure operator, leases its electronic
communication infrastructure in the entire Republic of Croatia, where other holders of radio concessions on
national and/or regional level broadcast their programmes by their own transmitters using either their own
VHF antenna systems or leasing OiV's VHF transmitting antenna systems
Just like in the case of TV technology, the Italian VHF stations have been causing reception problems on the
Adriatic coast for many years. In cooperation with the relevant agency (HAKOM), OiV has been implementing
measures to reduce impacts of Italian interference (increasing VHF radio station power, changing parameters polarization, transmitter frequency, the way the modulating signal is introduced etc.).
In 2013 service income presentation was aligned with the provisions of the Electronic Communications Act
and requirements of the Croatian Regulatory Authority for Network Industries.
The income from technical services provided to holders of radio and TV concessions has been divided into
three items:
- income from providing radio distribution and transmission services in analogue terrestrial
broadcasting;
- income from providing conveyance of images, voice and sound;
- income from providing design, installation, measuring and maintenance services.
Cancelling of the broadcasting service for the programme Glas Hrvatske on VHF at the beginning of 2013 and
establishing a new conveyance system by using a new encoding system (Eapt-X) from July 2013 caused
income decrease in 2013 which continued in the first half of 2014.
Following the HRT decision, broadcasting of Glas Hrvatske programme on medium wave stopped at the
beginning of 2014.
2014 Plan
Increase in quality and coverage of the population and territory of the Republic of Croatia by the signal of the
third programme of Hrvatski radio (Croatian Radio - HRT HR3). To do that, it is planned to increase
transmitting power at some of the existing locations (e.g. Tusti vrh, Uljenje), as well as to build a dozen of new
locations that would cover areas with currently insufficient coverage (e.g. Sinj, Knin, Imotski, Metković,
Krapina, road route ZG-RI). It is also planned to build additional locations in HR2 network to extend coverage
of the coastal area (Omiš and the area between Makarska and Zaostrog).
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In order to keep the service quality dependant on the age of the existing VHF radio equipment on individual
transmitter locations, OiV will invest assets into renovation of VHF/GM transmitters and VHF antenna systems.
Satellite Transmission
Odašiljači i veze provide satellite transmission service on satellite Eutelsat E16A on orbital location 16°E and on
satellite Spacecom AMOS3 on position 5°W for the users:
EutelsatE16A
o
o
o
o
HRT (four TV and five radio programmes)
RTVSLO (three TV and four radio programmes)
HKR (radio programme)
RTS, Serbian radio television (one TV and one radio programme)
AMOS 3
o
o
o
MTV Adria (two TV programmes)
NTH (TV programme)
KlasikTV (TV programme)
For the programmes of HRT, MTV, and KlasikTV there is also an option of Viaccess conditional access system
that limits reception of the said programmes to the users who possess an authorised decoder card. OiV
provides services of authorisation and deactivation of decoder cards upon user demand.
In the first half of 2014 the realised income was HRK 2.4 million, 23.8% less than in same period of the
previous year. The income decrease is mostly attributed to the expiration of contracts with customers who
had no further interest in continuing cooperation.
2014 Plan
The plan is to fill the remaining available capacity on the existing satellites on which we are currently
transmitting, and to use other free satellite transmission stations to provide services to new customers.
Furthermore, there is a plan to upgrade the existing Viaccess system to the latest software version to provide
the highest possible copyright protection from unauthorised watching of the programmes.
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Multimedia
IPTV
OiV has an IPTV platform for providing interactive television wholesale service. The users of the service are
cable and telecom operators who provide their end users with payTV service without investing into their own
service infrastructure. IPTV service is divided into two groups:
IPTV HeadEnd
IPTV turn-key
IPTV HeadEnd service consists of receiving, processing and delivering TV and radio programmes using IP
technologies, while IPTV turn-key includes, in addition to IPTV HeadEnd, service interactive platform like
Middleware, Conditional Access, Video-on-Demand, nPVR, etc.
During 2014, the income from multimedia decreased due to unfavourable trends in the environment.
In the first half of 2014 the realised income was HRK 4 million, 14.6% less than in same period of the previous
year.
2014 Plan
By expanding intercity and international network, OiV can offer its wholesale IPTV services to smaller cable
and telecom operators outside Zagreb and Croatia. In the future period OiV will focus on keeping its existing
users in the Republic of Croatia, and at the same time it will try to attract new regional users of wholesale IPTV
services by implementing fiber optic links at border crossings.
Playout
Playout service represents automatic transmission of TV programmes that allows content owners or copyright
holders to start new TV programmes in a timely and cost effective way. The OiV Playout platform is located in
satellite and multimedia centre Deanovec. The advantages of the OiV Playout service to the users are:
Minimal initial investment in technical infrastructure;
Exceptionally short time required to start new TV programmes;
Focus on programming content (OiV worries about technical infrastructure);
Capacity of signal distribution over multiple channels (terrestrial transmission, satellite transmission,
IPTV).
OiV's Playout services are used by the holders of content rights to produce and distribute TV channel signal for
Croatian and regional market.
The income realised in the first half of 2014 was HRK 2.2 million, which is similar to the income from the same
period of the previous year.
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2014 Plan
During the next period OiV will focus on keeping its existing users and on acquiring new ones, primarily foreign
media houses wanting to regionalise existing TV channels for pay TV platforms in Croatia and in the region.
The main risk is represented by foreign competitors offering services similar to Playout, and telecom operators
offering regionalisation of the existing TV programmes.
New Multimedia Services (OTT and HbbTV)
During the next period OiV will focus on development of new services that will provide new income in the
future and it will widen the focus of new multimedia services from telecom operators to media houses and
other entities. Following market trends, user inquiries and sale opportunities, new alternative ways to convey
TV signal are:
Over-The-Top (OTT) distribution of audio-visual contents;
Interactive television based on Hybrid Broadcast Broadband TV (HbbTV) standard.
The term OTT means delivery of audio-visual contents to end users over Internet without direct involvement
of Internet service providers in the process of content distribution. An Internet service provider can be aware
of the traffic transporting audio-visual content, but it is in no way responsible for it, nor can it control access to
it. To access and reproduce OTT content the end user can use computer, video game console, "smart" phone,
"smart" TV set, or any other device that can access Internet and reproduce audio-visual content.
During the first half of 2014 new test OTT platform was developed and implemented in order to offer new
service on the market.
The HbbTV term refers to an industry standard and promotional initiative for harmonisation of different
(broadcast, broadband) end user delivery methods. Members of HbbTV consortium (that defines and
promotes HbbTV standard) are leading manufacturers of consumer electronics and software, but also TV
publishers. Leading European TV publishers have until now mostly already started end user services based on
HbbTV (as pilot projects or commercial services).
2014 Plan
During 2014, OiV will work on promoting HbbTV standard and it will continuously follow development of
HbbTV services in Europe. The risk comes from unregulated market of digital user receivers that form the basis
for providing an HbbTV service.
Fiber optic and microwave links
Odašiljači i veze d.o.o. is one of the largest providers of transmission services in the Republic of Croatia.
Service of conveying telecommunication capacities supports the most varied technological platforms
(PDH/SDH, Ethernet/GbEthernet, IP/MPLS), as well as high speed data transfer. Spread of potential
capacities/transfer speeds range from 2Mbit/s to 10Gbit/s and more.
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Leasing links can be provided with different high reliability transport systems with high degree of redundancy:
digital microwave link systems mean a high capacity network based on SDH technology with access
links in towns;
fiber optic link systems based on DWDM and CWDM technology.
Fiber Optic Link System
During the last five years Odašiljači i veze have, for the purpose of providing electronic communication
services, started construction of a modern fiber optic network based on DWDM technology. The network has
been built using the fiber optic infrastructure of the companies that are in majority ownership of the Republic
of Croatia (ARZ, HAC, Plinacro). The network can provide a wide range of services of conveying high speed
telecommunication capacities (from 2Mbit/s to 10Gbit/s and more) between cities Zagreb, Rijeka, Split,
Varaždin and Zadar and it is also used to provide services of OiV's core business (distribution of radio and TV
programming, and multimedia services). By the end of the year it is planned to include in the network border
crossings Bajakovo and Bregana, important locations in Zagreb, Šibenik and Osijek, and modulation link (also
being the spare) to Deanovec.
The income realised in the first half of 2014 was HRK 6.7 million which is 31.73% less than in the same period
in the previous year. Income decrease is the result of lower fees for the aforementioned services.
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Figure 5-1 DWDM network – current situation
Further Development of the Optical Network – 2014
Further development of the optical network in 2014 will be based on the following indicators:
-
needs of telecommunication operators in the Republic of Croatia;
needs of telecommunication operators outside the Republic of Croatia with the purpose of
establishing new transit routes through Croatia;
needs of business users (economic zones and data centres);
needs of building a core network in order to implement the Project of unification;
needs of services of OiV's core business (distribution of radio and TV programmes, and multimedia
services);
Digital Agenda for Europe 2020.
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Figure 5-2 DWDM network – current state and planned expansion
In addition, apart from providing services of conveying high speed telecommunication capacities, OiV partially
focused on leasing fiber optic links of the mentioned companies, which should bring a significant income
increase.
Project of unification of fiber optic infrastructure
The Project of unification of fiber optic infrastructure in companies majority-owned by the Republic of Croatia
was initiated at beginning of 2013. The Project objective is to unify and standardise the offer on the electronic
communication market; to enable faster and better development of the wholesale market, thus also realising
the outlined development goals of broadband access for citizens and economic subjects, in accordance with
the "Strategy for the development of broadband access in Croatia".
In its 72nd session held on January 17th, 2013, the Government of the Republic of Croatia adopted its
Conclusion on the Project of unification of fiber optic infrastructure in companies majority-owned by the
Republic of Croatia by which it gave responsibility to CEI (Center for Monitoring Business Activities in the
Energy Sector and Investments) to draft the analysis and the proposal of the contractor in charge of the
operative implementation of the technical part of the project and of the management and maintenance of the
executed Project.
By Decision on the selection and duties of the contractor in charge of implementation of the Project of
unification of fiber optic infrastructure in companies majority-owned by the Republic of Croatia, adopted by the
Government of the Republic of Croatia on April 11th, 2013, Official Gazette 46/2013, OiV was appointed to be
the contractor in charge of operative implementation of the "Project of unification of fiber optic infrastructure
in companies majority-owned by the Republic of Croatia".
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In the session held on December 18th 2013 the Government adopted the Decision on the operative
implementation method for the Project of unification of fiber optic infrastructure in companies majorityowned by the Republic of Croatia that defines that OiV and companies ARZ, HEP, HAC, HC, HŽ Infrastruktura,
Janaf and Plinarcro are to sign a contract on business cooperation based on the income sharing model for
the duration of 30 years by which OiV would be allowed to place surplus of fiber optic infrastructure of the
aforementioned companies on the electronic communication market for the purpose of Project
implementation.
On February 21st 2014, company signed the long term contract on business cooperation and the management
of the
surplus of fiber optic infrastructure with the
following five
companies:
Autocesta Rijeka-Zagreb, Hrvatske autoceste, Hrvatske ceste, HŽ Infrastruktura, Janaf; the contract with HEP
Telekomunikacije was also signed on June 30 2014 while the contract with Plinacro is being prepared.
Signed contracts mark the beginning of practical implementation of the Project by placing the surplus of fiber
optic infrastructure on the electronic communication market and at the same time the realisation of one of
the important objectives of the Strategy for the development of broadband access in Croatia
Microwave Link System
OiV has a large system of microwave links with more than 200 individual systems of different capacities, two of
which are two national microwave backbone networks (on 4 and 8 GHz).
The system is constantly expanded to new microwave links, depending on the market demands, but in the
recent years there has been reduced investment into expansion, with the exception of the expansion for the
needs of MUX C and MUX E project, mostly because microwave links do not meet needs of high capacities
(above approximately 200 Mbit/S on interregional links) since their permits are expensive and thus they are
not competitive with optical links for larger capacities based on the cost. Therefore, in the following period,
with the exception of distribution of DVB-T, DVB-T2 signals, and conveying radio and TV programmes
(contribution), the microwave links will be used for smaller capacities and for regional links (e.g. Požega-Osijek,
Pula-Rijeka or Dubrovnik-Split). Požega-Osijek, Pula-Rijeka ili Dubrovnik-Split).
In the period between January and June 2014 the realised income was HRK 16.2 million, 4.8% less than in
same period of the previous year.
2014 Plan
In order to optimise costs, it will be necessary to replace the existing digital microwave equipment on certain
routes with the equipment operating in higher frequency ranges. This would gain significant savings in costs
for RF usage permits, and keep the existing technical specifications.
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Picture 5-3 OiV microwave network
Services in Professional Mobile Network (PMR)
Odašiljači i veze plans to expand its offer of mobile and fixed services based on digital professional radio
systems (from now on, "PMR services") in UHF and VHF ranges. OiV's PMR service will provide a high quality,
reliable and safe voice and data fixed and mobile communication that will be always available, independent of
the state of the public communication services.
Planned PMR services include providing:
voice and data services on own professional radio communication network;
maintenance and managing service for the existing radio communication systems of others;
planning, projecting, and building professional radio communication systems for others' needs.
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Support and other activities
Colocation – leasing electronic communications infrastructure
There is various radio and telecommunication equipment installed on the existing OiV locations, such as radio
transmitting equipment, GSM/UMTS/LTE equipment, microwave link devices, wireless equipment, equipment
for satellite reception and transmission, etc.
We offer services of project preparation, installation, maintenance, and remote monitoring for all the
equipment that the user might need to install on OiV locations.
Project Design, Installation, Maintenance
Project Design
An experienced, expert team of certified engineers can offer planning and projecting of radio communication
and telecommunication networks and objects, compiling project documentation in the field of electronic
communication necessary for operating permits, designing projects of electric installations and grounding for
objects, projecting metal constructions and mounts for different types of antennas and antenna systems,
making projects for installation of electronic communication equipment, supervising object building and
installing of electronic communication equipment.
We have licensed software packages for projecting antenna systems for transmission of radio and television
programmes, making radiation graphs, making coverage maps with digital terrain model and GIS data
(population, traffic infrastructure, settlements, waterways, etc.), projecting microwave and fiber optic
systems.
Installation
OiV has expertly qualified employees for installation of different types of electronic communication devices
and equipment (radio and television transmission equipment, microwave link equipment, signal processing
equipment, satellite equipment, etc.) and of electric power equipment (plant switchboards, electric
installations, object grounding, AC and DC UPS, generators). Most of Company's own equipment in OiV's
objects, as well as the other users' equipment, was installed by OiV's employees.
Engineers and technicians are constantly educated on courses and seminars, and in production plants of
equipment manufacturers.
Experienced and trained mechanics-installation experts are qualified to install antennas on all kinds of masts,
and we make all kinds of bearing structures and constructions for antennas and antenna systems in our own
mechanic shop.
Maintenance
OiV employees independently maintain devices and equipment used for providing services, as well as the
associated electric power equipment. We have measuring instruments for all kinds of measurements on radio
and telecommunication equipment, as well as the mobile monitoring vehicle for radio measuring in electronic
communication network, as well as measuring, testing and determining interference in radio spectrum.
Our own Surveillance and Management Centre (NOC), located in Zagreb, performs supervision of radio and TV
transmission, telecommunication capacities, multimedia contents, and processing and transmitting devices
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and equipment, and it also supervises the infrastructure (electric energy equipment, plant premises) at all the
more important objects.
Overview of 2014
In the period between January and June 2014 the listed services brought income of HRK 0.6 million.
Contact centre
After the call centre of the HR Government for assistance in move to digital television ended its operations (call
centre 0800 1-1-2011 ended operations on November 30th 2011), OiV's contact centre (0800-0897) took over
more intensive communication with viewers with the goal of providing citizens with all the information on
conditions and possibilities of reception of digital television and radio transmitted by terrestrial transmitters
and by satellite. Unfortunately, most of the viewers' calls came because of the interference caused by illegal
Italian transmitters all over Adriatic, from western coast of Istria to the far south in Dubrovnik region,
especially during the summer when interference is the most prominent.
During 2014 OiV's contact centre will continue regular operations within the existing tasks.
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6. Business Environment and Operational Risks
Operational Risks
Operational risks are impossible to avoid, since there is no entrepreneurship without risk. Company Odašiljači i
veze is exposed to different financial risks related to price, interest rate, credit, and liquidity risk, as well as to
market risk, albeit at lower level. Company monitors mentioned risks related to its business operations and
manages them using internal risk reports that report risk exposures analysed in terms of their degree and size,
thus trying to reduce their impact. In order to reduce Company exposure to various risks as much as possible,
Company collects solvency and credit worthiness information on buyers, stipulates advance payments, collects
bank guarantees, stipulates precisely type, quality and quantity of goods and services, as well as delivery
deadlines and take-over procedures, defining suitable transport and storage, contracting strong and stable
payment currencies, etc.
Capital Risk
The Company manages its capital in order to ensure unlimited continuation of business operations, while
simultaneously generating the greatest return to interested parties through optimizing the balance between
debt and equity capital. The structure of the Company's capital consists of the capital that comprises
subscribed capital, reserves and kept profit.
Price Risk
OiV operates mainly on the domestic market, and the Company's Management Board sets prices of its services
based on the real market prices. This type of risk is more and more prominent in consequence of the global
crisis.
Interest Rate Risk
The interest rate risk is the risk that the value of financial instruments will change due to changes to the
market interest rates compared to the interest rates applicable to the financial instruments. Company is
exposed to the interest rate risk because of the received loans that are linked to EURIBOR trends on the
international market, as well as to TBMF trends of on the domestic market, and most of them have been
contracted with the variable interest rate.
Credit Risk
The credit risk refers to the risk of default of the contractual obligations by the other party to the contract,
whereby the Company would suffer financial losses. Company follows procedures that ensures sales to the
customers who have a good credit score and who do not exceed the acceptable limit of credit exposure. The
Company exposure and its business partners' credit scores are constantly monitored. In spite of the above,
the global economic crises brought significant fall of advertising, which is the main income source of
all the commercial televisions, that also reflects on OiV since publishers, especially those on regional
and local levels, meet their obligations with increasing difficulty. It is expected that the trend will
continue over the next period, that is, that certain publishers will stop operating or end in bankruptcy, that
there be mergers of publishers, and similar.
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Liquidity Risk
The liquidity risk management means maintaining adequate amount of money by maintaining adequate
reserves, and by using suitable bank credit products and loans from central reserves through continuous
monitoring of the estimated and actual cash flows, and by adjusting the maturity of financial assets and
financial liabilities.
The ultimate responsibility for the liquidity risk management is borne by the Management Board, which has
set a sound framework for the liquidity risk management, and identified requirements concerning liquidity
management.
In order to efficiently manage the liquidity risk, OiV follows the liquidity management policy that comprises
planning of expected known and potential outbound cash flows, and of sufficient inbound cash flows to cover
the former. In that sense, OiV continuously monitors liquidity and takes adequate measures to remove or
prevent anything that might cause lack of liquidity.
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7. Human Resources
Employee Costs and Structure
The greatest value of Company rests with its employees whose educational structure indicates that they are
overall highly educated human resources, and who, through their engagement, experience and knowledge,
form the main prerequisite to maintain competitive advantage of Company.
One of the basic business objectives of Company is to attract and to retain highly educated, high-quality
personnel, applying efficient models of motivation and of encouragement of personal ambitions of each
individual employee.
Basic principles:





equal opportunities and working conditions for all employees;
equality and protection of human rights;
ethics in business operations;
fairness as a general moral principle;
achieving the greatest good for the greatest number of people.
On October 1st, 2013 OiV implemented reorganisation and restructuring of Company, transforming the
organisation from the model that supported previous investment projects into the model that would optimally
support current and future projects. During 2014 the adjustment of qualification and age structure, as well as
of the number of employees, will continue following the strategic objectives and business projections of
Odašiljači i veze d.o.o.
On June 30th, 2014 Company had 291 employees, 40 women. The average employee seniority was 19 years
and the average age was 43. 46% of the employees were highly educated (graduate or higher), 9% had college
education, and the remaining 45% high school or lower education. Considering number of employees,
employee seniority and education there were no significant changes compared to the same period of the year
before.
The total costs of employees in the first six months of 2014 were HRK 24.9 million with no significant changes
compared to the same period of the year before. The cost of employees in the operating income of the
examined period of 2014 has slightly increased, and on average it is 21%.
Education
Since lifelong learning is one of the key prerequisites for the continued development of Company and its
survival on the demanding technological market, continuous investment into knowledge of employees is OiV's
priority. Sophisticated technology requires continuous investment in knowledge and competencies of
employees, and training and education both in the Republic of Croatia and abroad. Employees acquire
specialised and general knowledge within the Company. Specialised knowledge is often acquired through
training and education provided by the provider of the equipment used by Company for its core activity, at
conferences and seminars in Croatia and abroad, as well as on in-house seminars. Therefore, there is a marked
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growth of the number of employees who participate in various forms of education, and, in parallel, there is
growth of the total average investment into education.
Work Environment
There is a permanent effort to improve the working environment with the goal of increasing the employee
satisfaction and motivation through:
 Possibility of a continuous process of learning and training;
 Elaborated incentive system based on performance results;
 Stimulating working environment, work place with modern equipment;
 Care for the employees' health through regular annual medical examinations;
A management system governing employee and manager efficiency is currently under development, and new
communication tools are being implemented, both of which will contribute to strengthening of motivation and
achievement on all levels, and by well-defined evaluation criteria contribute to work transparency and socially
responsible business.
Implementing employee efficiency management system involves:
Evaluation of work effectiveness model and defining goals in the entire organisation;
Employee reviews, periodically and every six months;
Adjustment of the reward system based on results and work efficiency evaluations;
Education of directors and managers to use efficiency management system;
Informing workforce on process details.
Responsibility towards Employees
In general, the Company employees are employed without time limitation. Temporary employment is used
only as a solution to temporary replacements, and this kind of employment holds just a minimum share.
Employees have the opportunity to continuously learn and train. There is an elaborated system of incentives
based on work performance. Employees work in a stimulating working environment in work places with
modern equipment. Care for the employees' health is reflected in the regular annual medical examinations.
On 23rd June, 2014, based on the Conclusion of the Coordinating Committee for the economy, investments
and EU funds, the Company adopted the "Monitoring System of hiring process", contributing to increasing
operational efficiency, transparency and responsible governance.
Remuneration and Support
The Company has signed a collective agreement with The OiV's Trade Union and it has been in force since 21
December 2012. It provides certain benefits and support for the employees of the Company.
Occupational Safety
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OiV holds certificate for specification OHSAS 18001 - occupational health and safety management system. The
specification was introduced for the purpose of more efficient risk management for health, work safety, and
minimising work related injuries and occupational diseases. There is a systematic monitoring of legal and other
regulations, and adaptation of measures and activities in their implementation, education and training in
occupational safety, examination of work tools that are extra dangerous, periodic medical examinations of
workers on positions that have special working conditions, periodic examination of personal protective
equipment and work equipment, as well as a series of other measures.
OHSAS 18001 specification in OiV has been integrated with ISO 9001 and ISO 14001 standards.
Protection of Employees' Dignity
For the purpose of protecting the employees' dignity, Company has appointed an employee who, in addition
to the Management Board, is authorised to receive and resolve complaints regarding the protection of
employees' dignity. In order to provide a working environment that is free of any form of behaviour that could
endanger the dignity of employees, the rules have been set defining the procedure to be followed if any form
of harassment or inappropriate behaviour occurs. The actual procedures, as well as any details regarding the
procedures, are inviolable and confidential, while the initiation of the procedure is defined by internal rules.
Employees - Management Board Relationship
There is a Workers' Council in Company, established in 2005, comprised of 5 members. Through the Workers'
Council, in the manner and according to the terms and conditions stipulated in the Labour Act, the employees
participate in the decision-making process in matters related to their economic and social rights and interests.
Also, the Company has a trade union that acts for the welfare of the employees.
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8. Social Responsibility
Socially responsible business is adoption of good business practice and its application in management and
making business decisions. The key areas of activity within the context of socially responsible business are
market behaviour, attitude towards employees, attitude towards environment, and attitude towards local
community. The company won CSR Index Award for 2011 and 2012, as well as the recognition of CSR Index for
2013 given by the Croatian Business Council for Sustainable Development and the Chamber of Commerce.
Community Assistance
Whenever possible, Odašiljači i veze d.o.o. (OiV) tends to offer humanitarian assistance to children or people
in need, to support the gifted students, to give donations to pre-school and school institutions and to donate
to scientific and professional conferences etc.
Following the principles of transparency, the report on donations and sponsorships in 2013 was published on
the Company intranet and website.
We are especially proud of the collected goods and financial means for residents of flood-affected areas of
Croatia, and the personal commitment of the majority of employees.
Ethics in Business
In 2010 the Code of Ethics and Business Conduct was adopted and published on the Company intranet. The
purpose of the Code is to promote ethical values in business conduct, in daily work and in interpersonal
relations. The Code provides for the appointment of a commissioner in charge of receiving reports about nonabidance or breaches of adopted ethical principles. It is also the duty of the commissioner to advance ethical
conduct and activities in the Company, and to promote changes and improvements by promoting ethical
values in business operations. Furthermore, internal regulations determining the procedure in the event of a
breach of the ethical rules of conduct are accessible to all the employees, and they have been published on the
Company website. The ethics commissioner is elected among the employees of the Company.
Corporate Management Code
The basis for the proper orientation and management of Company, taking into account risks and respecting
legislation and rules, may be integrated as "Corporate management, risks and conformity". By adopting the
Code, the Company has continued with best practices for corporate management, and through its business
strategy, business policy and key internal documents, contributes to transparent and efficient business
operations and quality connections with the business environment in which it operates.
Pursuant to the above mentioned and with the goal of management support, OiV contracted company "Krakorevizija d.o.o", relying on its objective and advisory function in the capacity of internal revision, to establish
even higher standards of the corporate management.
Anti-corruption Programme
OB-31/0/14
Page 33/35
In the wider sense of the socially responsible business, great importance is given to the execution of the Anticorruption Programme. The programme execution is based on strengthening of the legal framework, of all the
forms of Anti-corruption prevention measures, including removal of all shortcomings that may benefit
corruption.
The goals of the Anti-corruption Programme are strengthening of integrity, responsibility, and transparency in
work, creating prerequisites to prevent corruption on all the levels, affirming "zero tolerance" approach to
corruption.
In the upcoming period, OiV will continue to dedicate particular attention to enforcing anti-corruption
measures with the goal of preventing and reducing potential corruptive behaviour of employees, both through
education and through a system of controls. In order to achieve that, in mid-2014, on its own initiative, OiV
has adopted a new Action plan for the implementation of anti-corruption measures for the period between 1
June 2014 to 31 May 2015.
OB-31/0/14
Page 34/35

Semi-Annual Report of the Management Board on the Company

Transcription

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