(34) Commitments and Contingent Assets and Liabilities

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A tax audit of the years 2003 to 2007 performed in an Austrian subsidiary resulted in a potential additional payment of TEUR 17,000 for prior periods. Based on the circumstances and the rules to be applied, Telekom Austria Group estimates an actual payment to be improbable.

In 2011, Si.mobil filed a lawsuit against Telekom Slovenije for alleged violation of competition laws. On 29 December 2014, an agreement was signed which was subject to conditions precedent and provided for payment by Telekom Slovenije to Si.mobil of up to TEUR 30,000 as well as continued business cooperation.

On 12 June 2014, Mobiltel received the tax assessment act for the audit covering the years 2006 and 2007. The material findings relate to the accounting of brand name and customer base. Tax authorities did not recognise tax amortisation on these assets and thus imposed a potential additional claim of TEUR 19,500 including penalty interest. Mobiltel appealed to the highest tax authority. On 1 December 2014, Mobiltel received the final decision confirming the potential additional claim. Mobiltel initiated a court procedure in Bulgaria. The outcome and the timing of any further decision on the case are highly unpredictable. Moreover, a subsequent tax audit covering the years 2008 to 2012 is currently ongoing, the results of which are hard to estimate before the previous case is finally closed. In case of an unfavourable outcome of the court proceedings, Mobiltel might face a further potential additional claim for the years 2008 to 2012 of up to TEUR 74,000 including penalty interest. Mobiltel expects the court decision to be in favour of Mobiltel due to the fact that Mobiltel followed the approach confirmed by the Minister of Finance and two consecutive tax audits in the past. Mobiltel assesses an additional claim including interest to be improbable. Mobiltel has already issued a bank guarantee covering up to TEUR 22,800 to secure the possible tax claim.

In the normal course of business, Telekom Austria Group is subject to proceedings, lawsuits and other claims, including proceedings under laws and regulations related to interconnection. Such matters are subject to many uncertainties, and the outcomes are not predictable with certainty. Consequently, Management is unable to ascertain the ultimate aggregate amount of the monetary liability or the impact on the financial position of Telekom Austria Group with respect to these matters at 31 December 2014. These matters could materially affect the operating results or cash flows of any quarter when resolved in future periods. However, Management believes that after final settlement, any monetary liability or financial impact on Telekom Austria Group, beyond such provided for at year-end, would not be material to its Consolidated Financial Statements.

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