Financial statements

NOTE 7



INVESTMENTS

The movements under this heading in 2018 were as follows:

(Amounts in euros) Opening balance at 01/01/2018 Additions Disposals Transfers Change in value Balance at 31/12/18
a) Group and associated entities
Equity investments: ANSEAC 30.000 0 0 0 30.000
Equity investments: AVATEL & WIKIKER TELECOM, S.L. 16.488.373 0 0 0 0 16.488.373
Non-current public debt 38.954.420 2.659.594 0 -37.938.420 0 3.675.594
Public sector debt (interest accrued and not paid) 10.617 69.712 0 -64.055 0 16.274
Long-term loan to ANSEAC 205.912 0 0 -23.074 0 182.838
b) Other companies
Equity investments 300.185 150 0 0 0 300.335
Investment funds 44.828.149 0 0 0 -2.706.339 42.121.810
Term Deposits 0 17.600.000 0 0 0 17.600.000
Term Deposits (interest accrued and not paid) 0 648 0 0 0 648
Dipòsits and guarantees 90.595 117 0 0 0 90.711
TOTAL 100.908.251 20.330.220 0 -38.025.549 -2.706.339 80.506.584
  1. Investments in subsidiaries and associates

The Company has a 50% interest in the share capital of the company ANSEAC, S.A.
ANSEAC, SA, Andorrana de Serveis d Atenció al Client, SA, with tax reference number L-7109938-N, trade registration number 925659-N, and registered office at La Massana, Avinguda Sant Antoni number 32, Edifici Els Arcs, has as its corporate purpose the provision of customer care services in the national and international market.
The Company was incorporated in 2015 and started its operations in 2016 through the ESPIC business. The carrying amount of the investment is 30,000 euros. The society is not listed on any stock exchange or any secondary market.
On 25 May 2018 the Company collected a dividend issued by the company ANSEAC, SA against its 2017 profits amounting to 70,000 euros, as approved by the shareholders of said company on 2 February 2018.
Its share capital, reserves and results for the last year are as follows:

ANSEAC, S.A. (Amounts in euros) 31/12/17 31/12/16
Share capital 60.000 60.000
Reserves 12.000 -
Prior year's profit / (loss) 182.620 47.668
Income for the year 160.526 286.953

The Company also holds 37.3% of the shares of the company AVATEL & WIKIKER TELECOM S.L. It acquired these shares on 9 November 2017. Avatel Telecom is a telecoms provider that operates in Spanish coastal areas. It has its own fibre optic network and offers internet, telephony and television services around Cadiz, Alicante and Malaga. The company’s tax ID is B-93-135218, and its registered address is at Azaleas, 51 (Centro Polo), Nueva Andalucía, Marbella (Malaga).
This acquisition involved an investment of 16 million euros, comprising the purchase of a 25.07% stake (16,926 shares) from AVANT TELECOM & URBOTIC, SL. for 9 million euros, and the subscription to all the 13,165 shares issued in a capital increase for 7 million euros. In line with forecasts, in 2018 AVATEL & WIKIKER TELECOM SL continued to grow, and is now Spain's sixth largest operator with a total of 74,000 customers.
At 31 December 2017 the payment of 1.35 million euros to AVANT TELECOM & URBOTIC, SL. was outstanding. This amount was deposited in an escrow account with an Andorran bank to be released in accordance with the terms of the sale agreement. As planned, payment was effected against said account on 6 February 2018.
Under the terms of the sale agreement, Andorra Telecom has a five-year option to acquire 12.7% of the share capital of AVATEL & WIKIKER TELECOM S.L. for 5.45 million euros, thereby increasing its interest in the share capital up to 50%. During this five year period, or until the option is exercised, whichever occurs first, Andorra Telecom will only be entitled to dividends in financial years when Avatel Telecom’s profits exceed 563 thousand euros.

Its share capital, reserves and results for 2017, the last year for which figures are available, are as follows:

AVATEL & WIKIKER TELECOM, S.L. (imports en euros) 31/12/17 31/12/16
Capital Social 7.237.269 237.307
Reserves 210.547 141.782
Resultat d'exercicis anteriors 1.394.992 536.290
Resultat de l'exercici 1.303.366 1.194.086
Subvencions, donacions i llegats rebuts 75.278 81.178

Non-current public debt
The Company subscribed to government debt securities issued by the government of Andorra during the year. The value and main conditions applicable to the issues are detailed below:

Issue Cash amount subscribed Maturity Annual yield Interest accrued and not paid Valuation
Issue 5 - year bonds 29/05/2017 1.016.000 29/05/2022 1,75% 10.522 1.026.522
Issue 2 - year bonds 13/04/2018 2.659.594 13/04/2020 0.85% 16.274 2.675.868
TOTAL NON-CURRENT GOVERNMENT DEBT 3.675.594 26.796 3.702.390

The interest accrued on the five-year bonds issued on 29 May 2017 amounting to 10,522 euros is classified under current receivables as it falls due in May 2019. The instruments are a long-term investment bearing annual interest.

Long-term loan to ANSEAC
On 1 March 2016 the Company granted a loan of 250,000 euros to the investee ANSEAC, SA, repayable in ten years and bearing interest at a fixed interest rate of 3.10%, to fund its cash requirements.
At 31 December 2018 the amount of 205,912 euros was pending repayment, of which 182,838 euros was classified as a non-current receivable and 23,074 euros as current, as it falls due in March 2019.

  1. Investments in other companies


Equity investments
The Company’s investments in other private Andorran companies at 31 December 2018 are as follows:

(Amounts in euros) Cost Provision Carrying amount % ownership
SEMTEE, S.A. 300.185 0 300.185 1,062%
TECNOLOGIA CAPITAL S.L. 150 0 150 5.00%
Total 300.335 0 300.335

SEMTEE, SA operates natural hot water springs in the municipality of Escaldes Engordany, with two thermal spas, Caldea and Innú. On 28 September 2018 the Company collected a dividend issued by the company SEMTEE, SA against its 2017 profits amounting to 6,690 euros, as approved by the shareholders of said company on 26 June 2018.

On 16 April 2018 the Company acquired 5% of the share capital of the company Tecnologia Capital SL for 150 euros. This company presently manages the APARKAND project, an initiative fostered by the NIU business start-up incubator set up by Andorra Telecom.

Investment funds
At 31 December 2018 the carrying amount of the portfolio was as follows:

(Amounts in euros) Opening balance at 01/01/2018 Additions Change in value Balance at 31/12/2018
Investment funds with Andorran banks 44.828.149 0 (-)2.706.339 42.121.810
TOTAL INVESTMENTS 44.828.149 0 (-)2.706.339 42.121.810

The contract and maturity dates of the items in the portfolio are:

Financial institution Instrument Contract date (*) Maturity
Andbanc Fons mixtel 5/10/2006 Unlimited
Banc Sabadell IQ-STA 4/4/2007 Medium-long term
Crèdit Andorrà Crèdit fons mixt 17/5/2005 Indefinite
BIBM Privat 1-S 5/7/2006 Indefinite
Banca Privada d'Andorra Euromix moderat 23/7/2008 Indefinite

(*) The date on which the investment funds were constituted by Servei de Telecomunicacions d’Andorra. These funds were subsequently transferred to the Company.
The Company intends to hold all the items in the investment fund portfolio for at least one year.

Non-current deposits
Non-current deposits comprise a number of deposits with Andorran banks.