Financial statements

NOTE 7



INVESTMENTS

The movements under this heading in 2019 were as follows:

(Amounts in euros) Opening balance at 01/01/2019 Additions Disposals Transfers Change in value Balance at 31/12/2019
a) Group and associated entities 20.393.079 35.428.369 -16.488.373 -19.951.027 0 19.382.049
Equity investments: ANSEAC 30.000 0 0 0 0 30.000
Equity investments: AVATEL & WIKIKER TELECOM, S.L. 16.488.373 0 -16.488.373 0 0 0
Non-current public debt 3.675.594 35.359.084 0 -19.841.678 0 19.193.000
Public sector debt (interest accrued and not paid) 16.274 69.285 0 -85.560 0 0
Long-term loan to ANSEAC 182.838 0 0 -23.789 0 159.049
b) Other companies 60.113.505 11.599.057 0 -17.600.648 2.442.537 56.554.451
Equity investments 300.335 0 0 0 0 300.335
Other long-term loans 0 1.500.000 0 0 0 1.500.000
Investment funds 42.121.810 998.739 0 0 2.442.537 45.563.086
Term Deposits 17.600.000 9.100.000 0 -17.600.000 0 9.100.000
Term Deposits (interest accrued and not paid) 648 0 0 -648 0 0
Dipòsits and guarantees 90.711 319 0 0 0 91.030
TOTAL 80.506.584 47.027.427 -16.488.373 -37.551.675 2.442.537 75.936.499

a) 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 28 March 2019 the Company collected a dividend issued by the company ANSEAC, SA against its 2018 profits amounting to 50,000 euros.

Its share capital, reserves and results for the last year are as follows:

ANSEAC, S.A. (Amounts in euros) 31/12/19 31/12/18
Share capital 60.000 60.000
Reservations 12.000 12.000
Prior year's profit / (loss) 231.063 182.620
Income for the year 2.217 148.443

The Company acquired 37.3% of the shares in AVATEL & WIKIKER TELECOM 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).

On 23 October 2019, Andorra Telecom's Board of Directors approved the sale of Avatel shares for 32 million euros, which generated a net gain of 12.5 million euros. The transaction price included a sum of 1.5 million euros for transferring Andorra Telecom's pre-emption right to increase its equity stake to 50% as per pre-established time frames and economic conditions. This consideration is classified under non-current receivables as it will be collected, according to the sale agreement, in 18 months.

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 31/12/2019
Issue 60 - month bonds 29/05/2017 1.016.000 29/05/2022 1,75% 10.522 1.026.522
Issue 36 - month bonds 19/12/2019 18.177.000 19/12/2022 0.90% 5.378 18.182.378
TOTAL NON-CURRENT GOVERNMENT DEBT 19.193.000 15.900 19.208.900

The interest accrued on the five-year bonds issued on 29 May 2017 and on the three-year bonds issued on 19 December 2019 amounting to 15,900 euros is classified under current receivables as it falls due in May 2019 and December 2020. 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 2019 the amount of 182,838.18 euros was pending repayment, of which 159,048.77 euros was classified as a non-current receivable and 23,789.41 euros as current, as it falls due in March 2020.

b) Investments in other companies


Equity investments

The Company’s investments in other private Andorran companies at 31 December 2019 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 15 October 2019 the Company collected a dividend issued by the company SEMTEE, SA against its 2018 profits amounting to 6,690 euros, as approved by the shareholders of said company on 25 June 2019.

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 2019 the carrying amount of the portfolio was as follows:

(Amounts in euros) Opening balance at 01/01/2018 Additions Low Change in value Balance at 31/12/2018
Investment funds with Andorran banks 42.121.810 2.000.000 (-)1.001.261 2.442.537 45.563.086
TOTAL INVESTMENTS 42.121.810 2.000.000 (-)1.001.261 2.442.537 45.563.086

During the last quarter of 2019, the Company cashed in part of its units in the investment fund managed by Crèdit Fons Mixt, FI for almost 1 million euros, and then invested a further 2 million euros in the investment fund managed by BSA IQ FI-STA.

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

Financial institution Instrument Contract date (*) Maturity
ANDBANK Fons mixtel 05/10/2006 Unlimited
BANC SABADELL IQ-STA 04/04/2007 Medium-long term
CRÈDIT ANDORRÀ Crèdit fons mixt 17/05/2005 Indefinite
MORABANC Privat 1-S 05/07/2006 Indefinite
VALLBANC Euromix moderat 23/07/2008 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.