DEUTSCHE TELEKOM INTERNATIONAL FINANCE B.V.
MAASTRICHT
Annual Report
for the year ended December 31, 2024
2
Table of contents
page
Company boards reports
3
Report of the Management Board
4
Report of the Supervisory Board
7
Financial statements
8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13
Other information
33
Proposed appropriation of result according to article 21 of the articles of association
33
Independent auditor’s report
34
3
Company boards reports
4
Report of the Management Board
The Management Board is pleased to present the financial statements of Deutsche Telekom International Finance B.V. (“the Company”) for
the financial year ended December 31, 2024.
Objectives, structure, and staffing
The Company was incorporated in the Netherlands in 1995 as a wholly owned subsidiary of Deutsche Telekom AG (DTAG). The purpose of
the Company is to finance business and companies belonging to the Deutsche Telekom Group by raising funds from the capital markets. The
Company has a two-tier board structure. The Management Board consists of two members and no further staff is hired. The Supervisory Board
consists of three members, all hired by DTAG. According to the regulations of the Dutch Civil Law (Wet Toezicht Bestuur effective as of 1
January 2013 and the gender appointment quota for supervisory boards effective as of 1 January 2022), the Company’s Boards are unbalanced
since less than 30% of their members are female. The Company’s Board members have been appointed based on qualifications and
availability, irrespective of gender. In order to create more balance, the Boards will take these regulations into account with respect to future
appointments of Board members.
Corporate Responsibilities
The Company recognizes the importance of corporate social responsibility (CSR) and is committed to contributing positively to society and
the environment. The Company has implemented several CSR initiatives focused on digital inclusion, environmental sustainability, and social
empowerment. Sustainability is at the heart of Deutsche Telekom Group’s business activities. Sustainability has been a component of DTAG’s
corporate activities for more than two decades. DTAG sees itself as a responsible company and has made this part of its Group strategy. By
doing so, it commits itself to implementing sustainability along its value chain – and to playing an important role in meeting environmental,
economic, and social challenges. As far as applicable the Company has embraced the sustainability goals as set by DTAG and the measures
to be taken and to report.
The requirements for transparency in corporate sustainability are constantly increasing. In light of the expected transposition of the European
Corporate Sustainability Reporting Directive (CSRD) into German national law, DTAG as a company with a global footprint has already based
the preparation of the combined sustainability statement (“sustainability statement”) on the first set of the European Sustainability Reporting
Standards (ESRS) as a framework for the Group’s sustainability statement and applied these standards in full.
The Company did expect to be in scope for reporting in accordance with the CSRD as from the 2025 financial year. However, as per date
hereof, the CSRD has not yet been implemented in Dutch national law. Moreover, on February 25, 2025, the European Commission has
adopted a new package of proposals to simplify EU rules, boost competitiveness, and unlock additional investment capacity. These first
‘Omnibus' packages, bringing together proposals in a number of related legislative fields, cover a far-reaching simplification in the fields of
sustainable finance reporting, sustainability due diligence, EU Taxonomy, carbon border adjustment mechanism, and European investment
programmes. The legislative proposals are submitted to the European Parliament and the Council for their consideration and adoption. The
changes will enter into force once the co-legislators have reached an agreement on the proposals and after publication in the EU Official
Journal. Thereafter the EU regulation will have to be adopted into Dutch law.
The changed reporting requirements would only apply to large undertakings with more than 1,000 employees on average (i.e. undertakings
that have more than 1000 employees and either a net turnover of above EUR 50 million or balance sheet of over EUR 25 million). Consequently,
even when these first Omnibus packages are adopted, the Company does not anticipate to have to comply with reporting duties in accordance
with the CSRD in the near future, since the Company employs only one employee.
5
Business activities
On January 22, 2024, the Company entered into a Loan Assumption Agreement with DTAG and Magyar Telekom Nyrt. (MT), a DTAG group
company registered in Budapest, Hungary. As a result of this agreement, parts of three loans to DTAG with nominal amounts of EUR 55 million,
EUR 105 million and EUR 65 million and effective dates of January 24, 2024, January 25, 2024, and January 26, 2024, respectively, were
assigned to MT.
In 2024 the Company did not issue any new bonds but further decreased its debt. On January 30, 2024, the Company redeemed a EUR Bond
with a remaining outstanding nominal value of EUR 834 million and a loan to DTAG with the same outstanding nominal amount was repaid to
the Company. On October 24, 2024, the Company redeemed a EUR Bond with a remaining outstanding nominal value of EUR 591 million
and a loan to DTAG with the same outstanding nominal amount was repaid to the Company. On December 13, 2024, the Company redeemed
a EUR Bond with a remaining outstanding nominal value of EUR 579 million and a loan to DTAG with the same outstanding nominal amount
was repaid to the Company.
Financial developments
The Company made a loss before income taxes of EUR 11,281 thousand in 2024 versus a loss before income taxes of EUR 21,010 thousand
in 2023. The result before income taxes of the Company under IFRS is volatile since derivatives are carried at fair value and the non-derivative
financial instruments at amortized cost. Additionally, the result before income taxes is affected by the decreased impairment of loan assets in
2024 compared with the impairment of loan assets recognized in 2023. We refer to note 6 of the notes to the financial statements for further
details.
The Company made a net loss of EUR 11,331 thousand in 2024 versus a net loss of EUR 21,099 thousand in 2023.
Management Board policy with respect to risks
The Management Board is responsible for the strategy, operations, financial position, financial reporting and compliance of the Company.
Within each of these fields the Company faces certain risks which are managed by the Management Board. Each of the risk fields are reviewed
and discussed in the Management Board meetings and measurements are mitigated. However, the way the Company has been structured
makes it inherently very limited exposed to risks. The strategic decisions are liaised with DTAG – Group Treasury and the Supervisory Board
of the Company. Therefore, the risks related to the Company’s strategy are minimized.
The operational activities of the Company are performed by a small team of experienced staff. Nevertheless, management has established a
fall-back procedure for mitigating the risks relating to the operational activities like omissions and fraud. Furthermore, the Company
participates in the DTAG’s Internal Control System (ICS). The accounting-related ICS comprises both preventive and detective controls which
include general IT management checks, four eyes principle, segregation of functions and the monitoring of the accounting reporting process.
The internal audit department of DTAG is responsible for independently reviewing the functionality and effectiveness of the ICS and the Audit
Committee of DTAG monitors the effectiveness of the ICS and the DTAG risk management system. In 2024 and 2023 respectively the ICS-
controls of the Company were assessed, and the results thereof were signed off by management.
The main financial risks arising from the Company’s financial instruments are currency risk, interest rate risk and liquidity risk. Additionally,
there is a limited credit and counterparty default risk. Management of these risks is performed in accordance with DTAG Group financial risk
management policy. We regard effective management of the interest rate risk and foreign currency risk as one of our main tasks. The currency
risk is mitigated by means of raising the funds in the same currency as the corresponding financing provided to the borrowers. However,
currency results under IFRS arise because the Company concluded two USD interest financial instruments in the past which are classified and
valuated differently compared to the USD loans for which hedges these contracts were concluded. The interest rate levels and the maturities
of the Company’s funding do in principle match with the interest rate levels, including a margin, and the maturities of the corresponding loans
provided by the Company. The credit and counterparty default risks are mainly covered by the guarantee agreement with DTAG. In this
guarantee agreement the own risk for the Company is limited to EUR 10 million in total for all outstanding financial assets.
The Company has obligations to disclose annual and non-audited semi-annual external financial reporting and a monthly internal financial
reporting. Since the activities of the Company and the kind of transactions closed do not differ much from previous ones, the risk of false or
misleading reporting is low.
6
Compliance with rules and regulations is a main risk which has a narrow focus with the Management Board. Within DTAG the Management is
in close contact with several DTAG departments in the fields of Compliance, Legal and Tax in order to mitigate the risks related to relevant
changes in laws and regulations. Furthermore, the Management Board has access to a network of external legal and tax advisors in order to
mitigate possible risks and uncertainties.
For further details of the risk policies, we refer to note 1 of the notes to the financial statements.
Code of Conduct and corporate culture
The Company applies and is in compliance with the Deutsche Telekom’s group Code of Conduct. The code includes measurements regarding
Corporate Governance, dealing with business relationship, avoiding conflicts of interest, private use of company property, handling information
and rules of behaviour. Deutsche Telekom actively stimulates staff of all its group companies to live the corporate culture. The six Guiding
Principles help to keep the shared values in mind at all times, and to align actions.
Future business and financing developments and expectations
The Management Board does not expect any new financings in 2025. Since derivatives are carried at fair value and the non-derivative
instruments at amortized costs, the financial result under IFRS of the Company is expected to remain volatile. However, management expects
net positive cash flow for the year ending December 31, 2025, as well as in each of the following years.
Events after the statement of financial position date
There were no events after the statement of financial position date.
Management representation
The members of the Management Board certify that, to the best of their knowledge:
• the financial statements give a true and fair view, in all material respects, of the assets, the liabilities, the financial position and profit
and loss of the Company;
• the annual report gives a true and fair view, in all material respects, of the Company as per December 31, 2024, and the business
activities during 2024; and
• the annual report describes the material risks that the Company is facing.
Maastricht, March 27, 2025
The members of the Management Board,
Markus Schäfer Frans Roose
7
Report of the Supervisory Board
As per December 31, 2024, the Supervisory Board of Deutsche Telekom International Finance B.V. comprised the following members:
• S. Wiemann, (m), Group Treasurer at Deutsche Telekom AG, Bonn, Germany; appointed on March 7, 2016
• Dr. Ch. Dorenkamp, (m), Senior Vice President Group Tax at Deutsche Telekom AG, Bonn, Germany; appointed on July 1, 2014
• Dr. A. Lützner (m), Vice President Legal GD/USA & Organization EU at Deutsche Telekom AG, Bonn, Germany; appointed on November 1,
2007
According to the regulations of the Dutch Civil Law (Wet Toezicht Bestuur effective as of January 1, 2013, and the gender appointment quota
for supervisory boards effective as of January 1, 2022), the Company’s Supervisory Board is unbalanced since less than 30% of its members
are female. The Company’s Supervisory Board members have been appointed for an indefinite period and based on qualifications and
availability, irrespective of gender. In order to create more balance, the Boards will take these regulations into account with respect to future
appointments of Board members.
The Supervisory Board met once, on March 15, 2024. During this meeting the Management Board presented the business results for the year
2023 and a forecast for 2024. Main discussed items were the liability management transactions in 2023 and the related internal loan
repayments, increased OPEX and the consequences to the Company resulting from the implementation of new tax acts.
In the reporting year, bonds and assignable loans to group companies were repaid in an aggregate volume of EUR 2,004 million. The statement
of comprehensive income for the year 2024 discloses a net loss of EUR 11,331 thousand.
The financial statements for the year 2024 as presented by the Management Board have been audited and were given an unqualified opinion
by the independent external auditor of Deloitte Accountants B.V. The independent auditor’s report is included in this report. The Supervisory
Board has authorized the financial statements for the year 2024 of Deutsche Telekom International Finance B.V. for issue by the management
Board on March 27, 2025, for approval by the General Meeting of Shareholders. The Supervisory Board recommends that the General Meeting
of Shareholders adopts the financial statements for the year 2024.
The Supervisory Board has taken notice of the performed ICS control test assessment in 2024. By the controls and payment procedures in the
ICS, the risks of fraud and mistakes have been mitigated.
The Supervisory Board takes this opportunity to express its appreciation for the performance of the Management Board during the financial
year 2024.
Maastricht, March 27, 2025
Dr. Ch. Dorenkamp Dr. A. Lützner S. Wiemann
8
Financial Statements
9
Statement of comprehensive income
thousands of €
Note
2024
2023
Finance income
2
Interest income
727,131
845,745
Interest expense
(754,669)
(872,802)
Impairment reversals on financial assets
6
250
3,457
Other financial income
3
16,379
3,055
Loss from financial activities
(10,909)
(20,545)
General and administrative expenses
4
(428)
(489)
Other operating income
56
24
Loss from operations
(372)
(465)
Loss before income taxes
(11,281)
(21,010)
Income taxes
5
(50)
(89)
Loss after income taxes
(11,331)
(21,099)
Other comprehensive income
-
-
Loss attributable to owners:
(11,331)
(21,099)
Total comprehensive (loss) / profit attributable to the owners:
(11,331)
(21,099)
10
Statement of financial position
(Before proposed appropriation of result)
thousands of €
Note
31-12-2024
31-12-2023
ASSETS
Non-current assets
14,695,868
15,611,053
Financial assets
6
14,695,868
15,611,053
Current assets
1,542,772
2,220,299
Financial assets
6
1,528,316
2,205,906
Income tax receivable
5
-
5,395
Other assets
4
4
Cash and cash equivalents with aff. comp.
14,452
8,994
TOTAL ASSETS
16,238,640
17,831,352
SHAREHOLDER'S EQUITY AND LIABILITIES
Shareholder's equity
8
189,048
207,460
Issued Capital
500
500
Retained earnings
199,879
228,059
Net (loss) / profit
(11,331)
(21,099)
Non-current liabilities
14,532,057
15,428,121
Financial liabilities
7
14,532,057
15,428,121
Current liabilities
1,517,535
2,195,771
Financial liabilities
7
1,517,420
2,195,674
Income tax liability
5
9
-
Other liabilities
106
97
Liabilities
16,049,592
17,623,892
TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES
16,238,640
17,831,352
11
Statement of changes in equity
thousands of €
Note
Issued share
capital
Retained
earnings
Unappropriated
result for the year
Total
8
Balance as at January 1, 2023
500
202,919
46,099
249,518
Movements
Net (loss) / profit
(21,099)
(21,099)
Appropriation of result
46,099
(46,099)
-
Transactions with owners
Dividends paid
(20,959)
(20,959)
Balance as at December 31, 2023
500
228,059
(21,099)
207,460
thousands of €
Note
Issued share
capital
Retained
earnings
Unappropriated
result for the year
Total
8
Balance as at January 1, 2024
500
228,059
(21,099)
207,460
Movements
Net (loss) / profit
(11,331)
(11,331)
Appropriation of result
(21,099)
21,099
-
Transactions with owners
Dividends paid
(7,081)
(7,081)
Balance as at December 31, 2024
500
199,879
(11,331)
189,048
12
Statement of cash flows
thousands of €
Note
2024
2023
9
Interest received
2
735,718
795,068
Interest paid
2
(755,254)
(808,070)
Interest received from derivatives
3
239,907
229,974
Interest paid from derivatives
3
(207,459)
(198,369)
Guarantee fees paid
7
(15,141)
(18,914)
Net discount received on repaid bonds
7
-
77,657
Net discount paid on repaid loans
6
-
(77,657)
Net income tax received
5
5,354
2,852
Others
4
(394)
(528)
Net cash generated from operating activities
2,731
2,013
Proceeds from repayments of current loans
6
2,014,107
2,972,156
Proceeds from repayments of non-current loans
6
-
2,210,910
Net cash generated from investing activities
2,014,107
5,183,066
Repayment of current financial liabilities
7
(2,004,299)
(2,963,132)
Repayment of non-current financial liabilities
7
-
(2,210,910)
Dividend payments
8
(7,081)
(20,959)
Net cash used in financing activities
(2,011,380)
(5,195,001)
Net increase (decrease) in cash and cash equivalents with aff. comp.
5,458
(9,922)
Cash and cash equivalents with aff. comp., at the beginning of the year
8,994
18,916
Cash and cash equivalents with aff. comp., at the end of the year
14,452
8,994
13
Notes to the financial statements
General information
Deutsche Telekom International Finance B.V. (hereafter “the Company”) is the financing company of Deutsche Telekom AG, Bonn, Germany
(hereafter “DTAG”). Its principal activities consist of the issuance of debt instruments and funding of the Deutsche Telekom Group. The
Company has its registered office at Stationsplein 8-K, Maastricht, the Netherlands, registered under number 33274743 with the Dutch trade
register “Kamer van Koophandel” and is a 100% subsidiary of DTAG, which is also the ultimate parent of the Company. The Company’s
financial statements are included in the consolidated financial statements of DTAG. The financial statements of the Company for the 2024
financial year were authorised for issue by the Management Board on March 27, 2025.
Basis of preparation
The financial statements have been prepared under the historical cost convention, as modified by the revaluation of its derivatives. The financial
statements have been prepared in accordance with International Financial Reporting Standards (hereafter “IFRS”) as adopted by the EU and
with Part 9 of Book 2 of the Dutch Civil Code. All IFRSs issued by the International Accounting Standards Board (hereafter “IASB”) adopted by
the European Commission for use in the EU and effective at the time of preparing these financial statements have been applied by the
Company. The financial year corresponds to the calendar year. Both the functional and presentation currency of the Company is Euro (EUR).
All values are rounded to the nearest thousand except when indicated otherwise. As there is no doubt upon the entity’s ability to continue in
business for the foreseeable future the financial statements continue to be prepared on a going concern basis.
Initial application of standards, interpretations and amendments to standards and interpretations in the financial year
In the 2024 financial year, the Company applied the following IASB pronouncements and/or amendments to such pronouncements for the
first time:
Pronouncement
Title
Changes
Impact on the
presentation of the
Company’s results of
operations and
financial position
Applied by the
Company
from
IFRS Accounting Standards endorsed by the EU
Amendments to
IFRS 16
Lease Liability in a Sale
and Leaseback
Jan. 1, 2024
The amendments require a seller-lessee, when subsequently measuring lease liabilities
arising from sale-and-leaseback transactions, to determine “lease payments” and “revised
lease payments” in a way that it does not recognize any amount of the gain or loss that
relates to the right of use it retains. The amendments can particularly affect sale-and-
leaseback transactions which include variable lease payments that do not depend on an
index or interest rate.
No impact.
Amendments to
IAS 1
Classification of Liabilities
as Current or Non-current
Jan. 1, 2024
The amendments clarify that the classification of liabilities as current or non-current should
be based on rights that are in existence at the end of the reporting period. The amendments
also specify the definition of settlement of a liability.
No material impact.
Amendments to
IAS 1
Non-current Liabilities
with Covenants
Jan. 1, 2024
The amendments clarify that covenants in loan agreements with which an entity is required
to comply only after the reporting date do not affect the classification of a liability on the
reporting date as current or non-current. By contrast, covenants with which an entity must
comply on or before the reporting date affect the classification.
No impact.
Amendments to IAS
7 and IFRS
Supplier Finance
Arrangements
Jan. 1, 2024
The subject of the amendments is supplier finance arrangements, especially reverse
factoring arrangements. The amendments created additional disclosure requirements in
accordance with IAS 7 and IFRS 7 to increase transparency about the impact that supply
finance arrangements have on an entity’s liabilities, cash flows, and liquidity risk.
No impact.
14
Standards, interpretations and amendments issued, but not yet to be applied
Pronouncement
Title
To be applied by
Changes
Expected impact on
the presentation of the
Company’s results of
operations and
financial position
the Company
from
IFRS Accounting Standards endorsed by the EU
Amendments to
IAS 21
Lack of
Exchangeability
Jan. 1, 2025
The amendments amend IAS 21 to
– specify when a currency is exchangeable into another currency and when it is not;
– specify how an entity determines the exchange rate to apply when a currency is not
exchangeable; and
– require the disclosure of additional information when a currency is not exchangeable.
No impact.
IFRS Accounting Standards not yet endorsed by the EU
a
Amendments to
IFRS 9 and IFRS 7
Amendments to the
Classification and
Measurement of
Financial
Instruments
Jan. 1, 2026
The amendments
– clarify and add further guidance for assessing whether a financial asset meets the solely
payments of principal and interest (SPPI) criterion;
– clarify the date of recognition and derecognition of certain financial assets and liabilities, with a
new option for financial liabilities settled using an electronic payment system;
– add disclosure requirements for investments in equity instruments designated at fair value
through other comprehensive income, and for financial instruments with contingent cash flows
(including those with environmental, social, and governance (ESG)-linked features).
No impact.
Amendments to
IFRS 9 and IFRS 7
Amendments to
IFRS 9 and IFRS 7:
Contracts
Referencing Nature-
dependent
Electricity
Jan. 1, 2026
The amendments and clarifications relate to the accounting of nature-dependent electricity
contracts, structured as power purchase agreements, and include:
– clarifying the application of the ‘own-use’ requirements (own-use exemption);
– applying hedge accounting if these contracts are used as hedging instruments; and
– adding new disclosure requirements to disclose the effects of these contracts on the
Company’s financial performance and future cash flows
No impact.
Annual
Improvements to
IFRS Accounting
Standards
Annual
Improvements to
IFRS Accounting
Standards – Volume
11
Jan. 1, 2026
The subject of the amendments is supplier finance arrangements, especially reverse factoring
arrangements. The amendments created additional disclosure requirements in accordance with
IAS 7 and IFRS 7 to increase transparency about the impact that supply finance arrangements
have on an entity’s liabilities, cash flows, and liquidity risk.
No impact
IFRS 18
Presentation and
Disclosure in
Financial Statements
Jan. 1, 2027
IFRS 18 replaces the previous standard IAS 1 Presentation of Financial Statements.
The main changes arising from IFRS 18 are as follows:
– Improvement in the structure and comparability of the statement of profit or loss (income
statement) by introducing mandatory subtotals (such as “operating profit/loss before financing
and income taxes”) and categories (including “operating,” “investing,” and “financing”);
– Disclosures on entity-specific performance indicators that an entity uses in public
communications to communicate management’s view of an aspect of the financial performance
of the entity as a whole (“management-defined performance measures”);
– Introduction of additional principles for the aggregation and disaggregation of line items;
– Narrow-scope amendments to the statement of cash flows aimed at standardizing the
presentation in the statement of cash flows, particularly by eliminating certain presentation
options.
No impact.
IFRS 19
Subsidiaries without
Public
Accountability:
Disclosures
Jan. 1, 2027
IFRS 19 permits certain subsidiaries to use IFRS Accounting Standards with reduced disclosures
in their separate IFRS financial statements or subgroup financial statements.
No impact.
a
For standards not yet endorsed by the EU, the date of first-time adoption scheduled by the IASB is assumed for the time being as the likely date of first-time adoption.
With the exception of the standards, interpretations, and amendments of standards and interpretations that are effective for the first time in
the financial year, the Company did not make any major changes in its accounting policies.
15
Accounting policies
Key assets and liabilities shown in the statement of financial position are subsequently measured as follows:
Items in the statement of financial position
Measurement principle
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Amortized cost
Other financial assets
Loans to group companies; including interest receivables
Amortized cost
Derivative financial instruments
At fair value through profit and loss
ASSETS
NON-CURRENT ASSETS
Other financial assets
Loans to group companies
Amortized cost
Derivative financial instruments
At fair value through profit and loss
SHAREHOLDERS’ EQUITY AND LIABILITIES
CURRENT LIABILITIES
Financial liabilities
Bonds and other securitized liabilities
Amortized cost
Derivative financial instruments
At fair value through profit and loss
Income tax liabilities
Amount expected to be paid to the taxation authorities, using the tax rates that
have been enacted or substantively enacted by the end of the reporting period
Other liabilities
Amortized cost
SHAREHOLDERS’ EQUITY AND LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities
Bonds and other securitized liabilities
Amortized cost
Derivative financial instruments
At fair value through profit and loss
The material principles on recognition and measurement outlined below were applied uniformly to all accounting periods presented in these
financial statements.
Cash and cash equivalents with aff. comp., which include the balance from bank accounts included in the cash pooling and the inter-company
current account with DTAG, are generally measured at amortized cost.
FINANCIAL INSTRUMENTS
Financial instruments are recognized as soon as the Company becomes a party to the contractual regulations of the financial instrument.
However, in the case of regular way purchase or sale, the settlement date is relevant for the initial recognition and derecognition. This is the
day on which the asset is delivered to or by the Company. In general, financial assets and financial liabilities are offset and the net amount
presented in the statement of financial position when, and only when, the entity currently has a right to offset the recognized amounts and
intends to settle on a net basis. Transferred financial assets are derecognized in full if substantially all the risks and rewards of ownership are
transferred or if some of the risks and rewards of ownership are transferred (risk sharing) and the acquirer has both the legal and the practical
ability to sell the assets to a third party. If, in cases where risk is shared, the acquirer is unable to sell the assets to a third party, the assets will
continue to be recognized to the extent the maximum risk retained. Financial liabilities are derecognized when the obligation specified in the
contract expires or if there is a substantial modification of the terms of the contract.
Financial assets include loans to group companies, interest receivables and derivative financial assets. They are measured at fair value upon
initial recognition. For all financial assets not subsequently measured at fair value through profit or loss, the transaction costs directly
attributable to the acquisition are recognized plus, in the case of loans to group companies, a loss account for expected credit losses. The fair
values recognized in the statement of financial position are generally based on market prices of the financial assets. If these are not available,
the fair value is determined using standard valuation models based on current market parameters. For this calculation, the cash flows already
fixed or determined by way of forward rates using the current yield curve taking into account maturity adjusted spreads are discounted at the
measurement date using the discount factors calculated from the yield curve applicable at the reporting date. Middle rates are used.
For the classification and measurement of Loans to group companies, the respective business model for managing the loans and whether the
instruments have the characteristics of a standard loan, i.e., whether the cash flows are solely payments of principal and interest, is relevant.
Assuming the assets have these characteristics and if the business model is to hold to collect the asset’s contractual cash flows, they are
16
measured at amortized cost. This is computed using the effective interest method. The calculation takes into account any premium or discount
on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate. On each statement of financial
position date, the Company determines the recoverable amount of the assets by the calculation of the expected credit losses contributable to
each of the items.
At initial recognition, Loans to group companies are measured including a loss allowance account for expected credit losses. The loss
allowance is determined at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased
significantly since initial recognition. Otherwise, the loss allowance is calculated at an amount equal to twelve-month expected credit losses.
In this case, losses incurred later than twelve months after the reporting date would therefore not be considered. Based on the low credit risk
assumption of Loans to group companies, the Company applies the practical expedient related to the identification of significant increase in
credit risk.
When a loss allowance for expected credit losses is being determined, the historical probability of default supplemented by the relevant future
parameters for the credit risk is used as the basis for the calculation. For all Loans to group companies, publicly available market data related
to the Deutsche Telekom Group debt portfolio is used to determine the loss allowance for expected credit losses.
The loss allowance takes adequate account of the future expected credit risk; write-offs lead to the derecognition of the respective receivables.
For allowances, financial assets are grouped together on the basis of similar credit risk characteristics, tested collectively for impairment, and
written off, if necessary. The cash flows are discounted on the basis of the weighted average of the original effective interest rates of the
financial assets in the relevant portfolio. Impairments of trade receivables are recognized in some cases using allowance accounts. The
decision to account for credit risks using an allowance account or by directly reducing the receivable will depend on the reliability of the risk
assessment.
Derivative financial assets are measured at fair value through profit and loss.
Financial liabilities are measured at fair value on initial recognition. For all financial liabilities not subsequently measured at fair value through
profit and loss, the transaction costs directly attributable to the acquisition are also a component of the carrying amount. Subsequent to initial
recognition all non-derivative financial liabilities are measured at amortized cost using the effective interest method. Financial liabilities are
derecognized when the obligation under the liability is discharged, cancelled or expires.
Derivative financial liabilities are measured at fair value through profit and loss.
The Company uses derivative financial instruments to mitigate the interest rate risk resulting from its activities. The Company does not hold
derivatives for speculative nor trading purposes. The Company does not apply hedge accounting as defined under IFRS 9. Derivatives that are
not part of an effective hedging relationship as set out in IFRS 9 must be classified as and reported at fair value through profit or loss. If the fair
values are negative, the derivatives are recognized as financial liabilities. Derivatives are recognized initially at fair value. Subsequent to initial
recognition, derivatives are measured at fair value and changes in the fair value of derivatives are recognized immediately in other financial
income (expense) in profit and loss. In the case that no market value is available, the fair value must be calculated using standard financial
valuation models. The fair value of derivatives is the value that the Company would receive or have to pay if the financial instrument was
discontinued at the reporting date. This is calculated on the basis of the contracting parties’ relevant exchange rates, interest rates and credit
ratings at the reporting date. Calculations are made using mid rates. Currency basis and inter-tenor spreads are taken into account. In the case
of interest-bearing derivatives, a distinction is made between the ”clean price” and the ”dirty price”. In contrast to the clean price the dirty price
also includes the interest accrued. The fair values carried correspond to the full fair value or the dirty price.
Premiums and discounts on prepayments of financial liabilities and financial assets are recognized in the year of occurrence.
INCOME TAXES
Income taxes include current income taxes as well as adjustments of prior periods, if applicable. Current tax assets and liabilities must be
recognized where they are probable. They are measured in accordance with the tax laws applicable or already announced as of the reporting
date, provided said announcement has the effect of actual enactment. Where current tax is recognized, it must be reported as income or
expense except to the extent that the tax arises from a transaction which is recognized outside profit and loss, either in other comprehensive
income or directly in equity, or in connection with a business combination.
17
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates
and tax laws used to compute the amounts are those that are enacted by the statement of financial position date. Current tax assets and current
tax liabilities are offset in the statement of financial position if the Company has a legally enforceable right to set off current tax assets against
current tax liabilities and has an intention to settle net.
Other liabilities comprise provisions and other current obligations and are generally measured at face value.
Dividend distribution to the Company’s shareholder is recognized as a liability in the financial statement in the period in which the dividends
are approved by the Company’s shareholder.
Interest income (expense) is recognized as it accrues, using the effective interest method.
Other financial income (expense) includes gains (losses) from derivative financial instruments and from foreign exchange. Foreign-currency
transactions are translated into the functional currency at the exchange rate at the date of transaction. At statement of financial position dates,
monetary items are translated at the closing rate, and non-monetary items are translated at the exchange rate at the date of transaction.
Exchange rate differences are recognized in other financial income (expense) in profit or loss.
The exchange rates of significant currencies changed as follows:
in €
Average rate
Rate at balance sheet date
2024
2023
31-12-2024
31-12-2023
1 Pound sterling (GBP)
1,18105
1,14963
1,20562
1,15088
1 Hong Kong dollar (HKD)
0,11840
0,11811
0,12388
0,11587
1 U.S. dollar (USD)
0,92391
0,92468
0,96209
0,90506
General administrative expenses include personnel costs, service fees, audit and consultancy fees and operational leases (telephone,
computer equipment and office rent) and are recognized at cost.
Judgements and estimates
The Company exercises judgement in measuring and recognizing provisions. Judgement is necessary in assessing the likelihood that a liability
will arise and to quantify the possible range of the final settlement. These estimates are subject to change as new information becomes
available.
The determination of impairments to loan assets involves the exercise of judgement of the methodology used and the assumptions made for
the calculation of the expected credit loss. We refer to the section under accounting policies (Financial assets) and Note 6 in the Financial
Statements.
Regarding assumptions made for the calculation of fair values we refer to the section under accounting policies (Derivative financial
instruments).
Development of climate change and the associated impact
In the 2024 financial year, DTAG updated its climate scenario analysis and carried out the associated resilience analysis. Climate change risks
are already visible in the form of increasingly extreme weather conditions. Such storm events could damage the infrastructure and disrupt
network operation with direct or indirect effects on operations. DTAG is prepared for the rising impacts of physical risks, such as changes in
precipitation patterns and extreme weather variability and has already implemented comprehensive adaptation actions. Nevertheless, material
risks with a very high-risk extent but a very low probability of occurrence may result from extreme weather events. In addition, an analysis was
made of how resilient DTAG’s business model is to the potential future consequences of climate change. For this, transition aspects were
considered, i.e., factors associated with the transition to a low-emission, climate resilient economy. These may give rise to transition risks, e.g.,
as a consequence of political change or legislation. The measures DTAG is taking to counter these risks include measuring the Group’s own
energy efficiency and finding ways to improve it. The analysis showed that Deutsche Telekom is highly resilient overall to both material
18
transition risks and physical climate risks. Based on the analyses made by the Company and DTAG, the Company trust that DTAG will continue
to be able to fulfil their liabilities towards the Company and judges the default risk being limited. The effects of the challenges and the climate
change will not have a direct impact to the results, equity or valuation of the financial assets of the Company. The Company itself has taken
additional measures to mitigate its operational risks.
19
Notes to the statement of comprehensive income
1. Risk management, financial derivatives and other disclosures on capital management
Principles of risk management
The Company’s principal financial liabilities, other than derivatives, mainly comprise issued bonds and the Company’s financial assets, other
than derivatives, mainly comprise loans to group companies. These financial liabilities and financial assets are the result of the Company’s
main purpose, i.e. to raise funds for DTAG or group companies of DTAG.
The main risks arising from the Company’s financial instruments are currency risk, interest rate risk and liquidity risk. Additionally, there is a
limited credit and counterparty default risk. Management of these risks is performed in accordance with DTAG Group financial risk
management policy. The Management Board regards effective management of the interest rate risk and foreign currency risk as one of its
main tasks.
Historically, the Company has entered into various derivative transactions, primarily interest rate swaps and cross currency interest rate swaps,
to mitigate the interest rate risk and currency translation risk arising from the group’s operations and its sources of funding. It is the Company’s
policy that derivatives are exclusively used as hedging instruments, i.e. neither for trading nor for other speculative purposes. In 2024 and in
2023 the Company did not conclude any new derivative contracts.
For the presentation of market risks, IFRS 7 requires sensitivity analysis that show the effects of hypothetical changes of the relevant risk
variables on profit or loss and shareholder’s equity. In addition to currency risks the Company is exposed to interest rate risks according to the
definition of IFRS 7. The periodic effects are determined by relating the hypothetical changes in the risk variables to the balance of financial
instruments at the reporting date. It is assumed that the balance at the reporting date is representative for the year as a whole.
Currency risk
Currency risk as defined by IFRS 7 arises on account of financial instruments being denominated in a currency that is not the functional
currency and being of a monetary nature. The Company’s currency risk relates to positions in GBP, HKD and USD. The currency risk is
mitigated by means of raising the funds in the same currency as the financing provided to the borrowers.
The currency sensitivity analysis is based on the following assumptions:
• Major non-derivative monetary financial instruments (loans and other financial assets and interest-bearing and non-interest-
bearing liabilities) are directly denominated in the functional currency.
• Whereas derivatives are valued at fair value, non-derivative financial instruments are carried at amortized cost. The currency
valuation result of both derivatives and non-derivative financial instruments are included in other financial income (expense).
Therefore, a change in exchange rates has an impact on the result of the Company.
• Interest income and interest expense from financial instruments are recorded directly in the functional currency. The Company
does not hedge the future net margins. This has an impact on the net profit margin of the Company.
If the euro had gained 10 percent against all currencies at December 31, 2024, other financial income and equity would have been EUR 15.9
million lower (December 31, 2023: EUR 17.5 million lower). If the euro had lost 10 percent against all currencies at December 31, 2024, the
result would be in the opposite direction.
The hypothetical effect on profit or loss before income taxes of EUR 15.9 million mainly results from the currency sensitivity EUR/USD.
20
Interest rate risk
The Company is exposed to interest rate risk on the interest-bearing receivables and interest-bearing liabilities. However, the interest rates on
the Company’s funding do in principle match with the interest rates on the corresponding loans provided by the Company (including a margin).
Any interest rate exposure that nevertheless arose historically at the level of the Company has been mitigated by means of derivative contracts
with DTAG so effectively there will be no interest rate risk with respect to cash flows at the level of the Company. However, as these derivatives
are presented at fair value, a change in interest rates has an impact on the result of the company of the respective year.
The following table provides a breakdown of the USD Interest Rate Swaps concluded with DTAG:
Maturity
CCY
Notional
Pay
Receive
June 15, 2030
USD
1,685,000,000
6.28525%
SOFR +1.54851%
June 15, 2030
USD
1,685,000,000
SOFR +1.47326%
8.250%
Interest rate risks are presented by way of sensitivity analyses in accordance with IFRS 7. These show the effects of changes in market interest
rates on interest payments, interest income and expense, other income components and, if appropriate, shareholder’s equity. The interest rate
sensitivity analyses are based on the following assumptions:
• Changes in the market interest rates of non-derivative financial fixed instruments do not affect income because they are not
measured at fair value but at amortized cost.
• Changes in the market interest rates of non-derivative financial variable instruments do not affect income because these
instruments are back-to-back transactions.
• Changes in the market interest rate of derivatives do affect other financial income or expense since they are measured at fair
value and are not part of a hedging relationship as set out in IFRS 9. They are therefore taken into consideration in the income-
related sensitivity calculations.
If the market interest rates had been 100 basis points higher (lower) at December 31, 2024, the profit or loss before income taxes and equity
would have been EUR 3.7 million lower (higher) (December 31, 2023: respectively EUR 4.9 million lower (higher)).
Some issued bonds and attributed loan contracts granted to DTAG include a step-clause. If the rating of DTAG changes and triggers the step-
clause of the specific bonds and loan contracts, the interest rates of those contracts are adjusted. If the rating of DTAG had been upgraded to
A3 and A- as of December 31, 2024, this would trigger interest rates of two Bonds and three loan contracts being lowered by 0.5%. Two loan
contracts have been concluded with different starting dates and interest levels compared to the underlying bond and were hedged by the
derivatives concluded with DTAG. Consequently, with a decrease of the interest rate by 0.5% the profit or loss before income taxes would have
been EUR 1.8 million lower (December 31, 2023: EUR 2.3 million lower). If the rating of DTAG had been downgraded below Baa1 and BBB+
as of December 31, 2024, the interest rates of two other bonds and two other loan contracts would have been increased by 0.5%. However,
in that case the profit or loss before income taxes and equity would not have materially changed.
21
Credit and counterparty default risk
Loans are granted only to DTAG and DTAG group companies. As per the end of 2023, all existing loans were with DTAG only. In 2024, parts
of three loans to DTAG with an aggregate amount of EUR 225 million were assigned to the DT group company Magyar Telekom Nyrt. The
maximum exposure to credit and counterparty default risk is generally represented by the carrying amounts of the financial assets that are
carried in the statement of financial position, including derivatives with positive market values. However, the Company has concluded a
guarantee and credit default insurance agreement with DTAG in favour of the owners of financial liabilities issued by the Company, for which
the Company pays a fix guarantee fee plus a onetime premium on occasion of default, calculated as a ratio of the loan amount in default
divided by the total amount of loans outstanding multiplied by EUR 10 million. This guarantee and credit default insurance agreement also
covers the derivatives which were closed with DTAG, only for the reason of covering the interest exposures related to certain loans to affiliates
companies. Therefore, management has assessed that the risk exposure of default (CVA/DVA) with regard to the two derivatives is not material.
The loans granted are unsecured and management does not expect non-performance by the counterparties of these loans. However, under
IFRS 9 it is required to recognize and measure potential impairments in loans and receivables which are measured at Amortized Cost by the
expected credit loss model. The general approach is applied. As per 31.12.2023 the provision on financial assets under IFRS 9 amounted to
267 thousands of euro (hereafter “TEUR”) and as per 31.12.2024 this was calculated at an amount of TEUR 17. This decrease of the
impairment is due to the lower one-year default probability (1YDP) rate of DTAG per 31.12.2024 compared to 31.12.2023. The difference of
TEUR 250 has been recognized through comprehensive profit (loss). Please also refer to Note 6.
Liquidity risk
Please refer to Note 7.
Capital management
The overriding aim of the Company’s capital management is to match amounts, return and maturities of its financial assets with its financial
liabilities in order to ensure its capability to repay its debt. The Company’s objective when managing capital is to safeguard the Company’s
ability to continue as a going concern in order to provide returns for the shareholder and benefits for other stakeholders.
22
2. Finance income (expense)
The following table provides a breakdown of finance income (expense):
thousands of €
2024
2023
Interest income
727,131
845,745
Interest expense
(754,669)
(872,802)
(27,538)
(27,057)
Interest income of TEUR 727,131 has been earned from loan contracts and cash deposits with Deutsche Telekom group companies in 2024
(2023: TEUR 768,088) and TEUR 0 from net discount received on prepaid bonds (2023: TEUR 77,657). In 2024 interest expense of TEUR
754,669 has been derived from Deutsche Telekom group external debt, including guarantee expenses (2023: TEUR 795,145), and TEUR 0
from net discount paid on prepaid loan contracts with Deutsche Telekom Group companies (2023: TEUR 77,657). The negative interest result
is mainly due to the fact that hedge accounting as defined in IFRS 9 is not applied. We refer to Note 1, 3 and 6.
3. Other financial income (expense)
The item “Other financial income” breaks down as follows:
thousands of €
2024
2023
Gain / (Loss) from financial instruments
16,226
3,383
Gain / (Loss) from foreign exchange differences
153
(328)
16,379
3,055
The position “Gain / (Loss) from financial instruments” in 2024 (and 2023) comprises the fair value change of two USD interest derivatives
which were concluded with DTAG. The Company does not apply hedge accounting under IFRS. Therefore, all movements in fair value of
financial instruments and related income and expenses are included in ‘Other financial income’. The position “Gain / (Loss) from foreign
exchange differences” includes a loss of TEUR 8 (2023: a gain of TEUR 10) resulted from spot trades (the exchange of net interest margin in
foreign currencies into euro) and is not disclosed in the net gain/loss by measurement category in Note 7.
4. General and administrative expenses
The following table provides a breakdown of total general and administrative expenses:
thousands of €
2024
2023
Personnel costs
Remuneration Management Board
108
107
Other personnel benefits
3
3
Other social security costs
12
11
Total personnel costs
123
121
Other general and administrative expenses
Office rent
20
19
Service fees
141
141
Audit and tax consultancy fees
128
191
Computer lease
11
12
Other
5
5
Total other general and administrative expenses
305
368
Total general and administrative expenses
428
489
As at December 31, 2024 the Company employed 1 person (2023: 1 person).
23
Service fees of TEUR 141 have been recognized in 2024 for services related to accounting, mainly provided by the shared service centre of
DTAG (2023: TEUR 141). Furthermore, computer and software leasing fees of TEUR 11 have been recognized in 2024 to DTAG (2023: TEUR
12).
The Audit and tax consultancy fees listed above relate to the procedures applied to the Company by accounting firms and external auditors
as referred to in Section 1, subsection 1 of the Audit Firms Supervision Act (‘Wet toezicht accountantsorganisaties – Wta’) as well as by Dutch
and foreign-based accounting firms, including their tax services and advisory groups. An amount of TEUR 80 has been recognized as fees for
the audit of the 2024 financial statements performed by Deloitte Accountants B.V. (2023: TEUR 75), and TEUR 48 for tax services, not
performed by Deloitte, regardless of whether the work was performed during the financial year (2023: TEUR 91). Deloitte Accountants B.V.
has not performed any other services than audit services to the Company in 2024 and 2023 respectively.
Remuneration Management Board and Supervisory Board
The remuneration of the Management Board consists of short-term employee benefits and complies with the “bezoldiging bestuurders” in
accordance with Dutch law article “2:383 BW” and IAS24. The Management Board consists of two persons of which one is remunerated by
the Company and one is employed by DTAG. There are no long-term benefits, no pension plan or agreements are applied. The remuneration
of the Supervisory Board in 2024 was nil (2023: nil). All Supervisory Board members are employed by DTAG. DTAG does not recharge
expenses made by its employees related to the tasks performed to the Company, which is not at arm’s length. As per 31.12.2024 and
31.12.2023 respectively no loan contracts were outstanding with the Management Board or the Supervisory Board.
5. Income taxes
Income taxes in the statement of comprehensive income:
thousands of €
2024
2023
Current income tax expenses
(67)
(60)
Adjustment in respect of current income tax of prior
years
17
(29)
(50)
(89)
The amount in “Current income tax expenses” reflects the calculated amount of income tax due over the year without having received a final
assessment.
In 2024 the Company received a refund of Corporate Income Tax (CIT) for the fiscal year 2022 amounting to TEUR 2,949 and TEUR 2,470
related to the fiscal year 2021. In 2023 the Company received a refund of CIT for the fiscal year 2020 amounting to TEUR 2,906. These refunds
in 2024 and 2023 respectively were a result of the settlement of a dispute between DTAG and the auditor of the German tax authorities related
to the remuneration the Company received via the interest spread on the loans to group companies granted by the Company. The Dutch tax
authorities have assumed the calculation by the German tax authorities based on a cost-plus method and decided to adjust the CIT returns of
the Company for the respective years. The current income tax positions for the fiscal years 2024 and 2023 have been calculated based on the
same cost-plus method.
The following table shows the analyses of the effective income tax rate:
thousands of €
2024
2023
(Loss) / Profit before income taxes
(11,281)
(21,010)
Income tax benefit (expense) according to statement of
comprohensive income
(50)
(89)
Effective income tax rate
(0.4)%
(0.4)%
24
Difference between effective tax rate and nominal tax rate can be explained as follows:
thousands of €
2024
2023
Current income tax (expense) based on cost-plus
calculation*
(67)
(60)
Income tax previous years **
17
(29)
Total income tax (expense)
(50)
(89)
* CIT is based on cost-plus basis and has been calculated as follows:
2024: Taxable income 313, 19% + 25.8% CIT: 67
2023: Taxable income 287, 19% + 25.8% CIT: 60
** Corrections on refunds of income tax for the financial years 2020, 2021 and 2022
Income taxes in the statement of financial position
Current income tax payable in the statement of financial position as of December 31, 2024, amounting to TEUR 9 refers to a provision for
expected income tax payable for the financial year 2024. Current income tax receivable in the statement of financial position as of December
31, 2023, amounting to TEUR 5,395 refers to receivable income taxes related to net refunds expected for the financial years 2021, 2022 and
2023. All income taxes are payable in the Netherlands.
Disclosure on global minimum level of taxation
As per January 1, 2022 Section 8bb has been introduced in the Dutch corporate income tax act which limits a downward adjustment of the
taxable profit in the Netherlands for taxpayers who do not demonstrate that the other group entity involved in the related transaction does not
have a corresponding upward adjustment to avoid (Dutch) unilateral downward transfer pricing adjustments. Based on the agreement with
the German and Dutch Tax Authorities, the annual taxable result of the Company is calculated based on a cost-plus approach, and other
results derived by the Company are considered to be part of the German tax base of DTAG. The cost-plus method aligns the transfer pricing
treatment for both the Netherlands and Germany and therefore should not lead to a unilateral Dutch transfer pricing adjustment.
Furthermore, the Dutch Minimum Taxation Act 2024, also known as Pillar Two, was implemented for reporting years starting on or after
December 31, 2023. Pillar Two provides for a minimum effective tax rate of 15% per jurisdiction for large international enterprises (annual
turnover exceeding 750 million euros) in line with the EU Directive of December 14, 2022. DTAG has conducted a review, based on qualifying
financial statements of the Pillar 2 impact for the Dutch Deutsche Telekom entities, including the Company. Based on the qualifying numbers,
the transitional safe harbor provision is applicable, as the simplified effective tax rate is at least 15%. Consequently, there is no additional Pillar
2 top-up tax liability in the Netherlands for the Company. However, the Company, together with its ultimate parent entity DTAG, is continuing
to assess the impact of Pillar Two income taxes legislation on its future financial performance.
25
Notes to the statement of financial position
6. Financial assets
The following table provides a breakdown of the financial assets:
thousands of €
31-12-2024
31-12-2023
Total
Of which: current
Total
Of which: current
Loans to group companies
15,825,033
1,342,035
17,340,527
2,011,973
Derivative financial instruments
with aff. companies
212,870
-
282,499
-
Interest receivables
186,281
186,281
193,933
193,933
16,224,184
1,528,316
17,816,959
2,205,906
In 2024, loans to group companies were repaid to the Company for total nominal amounts of EUR 2,004 million and USD 10 million (the
regular repayments of the annuity loan) resulting in a decrease of the book value of TEUR 2,008,035 (2023: total nominal amounts of EUR
3,404 million, GBP 447 million and USD 1,392 million resulting in a decrease of the book value of TEUR 5,183,066). Related to the prepayment
of loans in 2023, a total net discount amount of TEUR 77,657 was paid. Other movements in the value of “Loans to group companies”
compared to 2023 consist of FX differences, impairment and amortization.
The following table provides a breakdown of loans to DTAG group companies:
thousands of €
31-12-2024
31-12-2023
Total
Of which: current
Total
Of which: current
Germany*
15,600,654
1,277,063
17,340,527
2,011,973
Hungary
224,379
64,972
-
-
15,825,033
1,342,035
17,340,527
2,011,973
*Of which loans to shareholder: TEUR 15,600,654 (2023: TEUR 17,340,527)
The following table shows the movement of the provision on financial assets under IFRS 9:
Movement of provision in accordance with IFRS 9
2024
2023
thousands of €
Provision previous year
(267)
(3,724)
Release of provision in the year through comprehensive profit (loss)
250
3,457
Provision end of year
(17)
(267)
A financial asset is in default when it is 90 days past due and by an individual assessment of the Unlikeliness to Pay (UtP).
• With regard to all loans and receivables, none of those are past due.
• There are no indications as of the reporting date that the debtors will not meet their payment obligations.
The Management Board calculates the provision on financial assets under IFRS 9 by using the 1-year Default Probability (PD) rate of DTAG
and a Loss Giving Default (LGD) of 60%. All current and non-current financial assets relate to loans to the shareholder DTAG or DTAG group
companies. The rating of DTAG is BBB+ (according to Standard & Poor’s), BBB+ (according to Fitch) and Baa1 (according to Moody’s).
26
The loans have stated coupon interest rates as per December 31, 2024 of 2.276% to 9.33% (2023: 0.776% to 9.33%) and mature up to 17
years (2023: up to 18 years). The average interest rate of the loans was 4.52% as of December 31, 2024 (2023: 4.12%).
The Company does not hold derivatives for speculative nor for trading purposes. All derivatives have been contracted with the parent company
DTAG. The Company does not make use of hedge accounting as defined under IFRS 9. Since derivatives are carried at fair value and the non-
derivative instruments at amortized costs, the financial result under IFRS of the Company is volatile. As shown by the liquidity analysis under
note 7 the Company always has net positive cash flows in every year until the last contract expires.
All interest receivables as of December 31, 2024 (and December 31, 2023 respectively) refer to accrued interest from loans to companies
belonging to the DTAG Group, of which TEUR 184,827 relate to DTAG (2023: TEUR 193,933).
7. Financial liabilities
The following table provides a breakdown of financial liabilities and its maturities:
thousands of €
31-12-2024
Total
due within
due > 1 year
due
1 year
< 5 years
> 5 years
Bonds and other securitized liablities
15,758,200
1,330,530
7,345,719
7,081,951
Guarantee fees payable to aff. companies
59,385
6,284
20,906
32,195
Interest liabilities
180,606
180,606
-
-
Derivative financial instruments
51,286
-
-
51,286
16,049,477
1,517,420
7,366,625
7,165,432
thousands of €
31-12-2023
Total
due within
due > 1 year
due
1 year
< 5 years
> 5 years
Bonds and other securitized liablities
17,262,591
2,001,488
7,237,477
8,023,626
Guarantee fees payable to aff. companies
69,608
7,285
22,179
40,144
Interest liabilities
186,901
186,901
-
-
Derivative financial instruments
104,695
-
-
104,695
17,623,795
2,195,674
7,259,656
8,168,465
The average interest rate for the outstanding bonds is 4.69% as of December 31, 2024 (2023: 4.25%).
Guarantee fees payable to aff. companies are guarantee liabilities to be paid to DTAG over the terms of the external financial instruments.
DTAG provides a full and irrevocable guarantee for all liabilities issued by the Company, except for the own risk of EUR 10 million the Company
is exposed to. Payment dates of guarantee fees are generally matched with interest payment dates of the external financial liabilities.
In 2024 (and 2023 respectively) all interest liabilities refer to group external debt.
In 2024 bonds were repaid by the Company for a total nominal amount of EUR 2,004 million, resulting in a decrease of the book value of EUR
2,003 million (2023: total nominal amounts of EUR 3,404 million USD 1,382 million and GBP 447 million resulting in a decrease of the book
value of EUR 5,174 million). Related to the prepayment of bonds in 2023 a total net discount amount of TEUR 77,657 was received. The
discount received and premium paid were recognized in interest income and interest expense respectively in 2023. Other movements in the
value of “Bonds and other securitized liabilities” in 2024 compared to 2023 consist of FX differences and amortization.
27
Liquidity analysis
The following table shows the contractually agreed undiscounted interest and guarantee payments and repayments of the non-derivative
financial instruments and the derivatives with positive and negative values as of December 31, 2024 and as of December 31, 2023 respectively.
All instruments held at December 31, 2024 (December 31, 2023 respectively) and for which payments were already contractually agreed are
included. Planning data for future new assets or liabilities were not included. Each amount in foreign currency was translated at the closing
rate prevailing on reporting date. The variable interest payments arising from the financial instruments were calculated using the last interest
rates fixed before December 31, 2024 (December 31, 2023 respectively). Based on this liquidity analysis the Company expects net positive
cash flows in all years presented herein.
The following table show the undiscounted liquidity analysis as of December 31, 2024:
thousands of €
2025
2026-2029
>2029
Total cash flows
Carrying amount
Non derivative borrowings (cash payables)
(2,072,425)
(9,936,061)
(8,379,088)
(20,387,574)
(15,758,200)
Bonds fix
(2,072,425)
(9,936,061)
(8,379,088)
(20,387,574)
Guarantees payable to aff. companies
(13,293)
(37,816)
(21,570)
(72,679)
(59,385)
Derivatives
33,084
132,284
16,665
181,903
51,286
IR Derivatives outflow
(195,048)
(776,095)
(97,012)
(1,068,155)
IR Derivatives inflow
228,132
908,379
113,547
1,250,058
Loans granted (cash receivables)
2,058,998
9,860,134
8,392,087
20,311,219
15,825,033
Loans to aff. comp. fix
2,058,998
9,860,134
8,392,087
20,311,219
Total Cash Flow
6,364
18,541
7,964
32,869
The following table show the undiscounted liquidity analysis as of December 31, 2023:
thousands of €
2024
2025-2028
>2028
Total cash flows
Carrying
amount
Non derivative borrowings (cash payables)
(2,739,963)
(9,914,680)
(9,774,393)
(22,429,036)
(17,262,591)
Bonds fix
(2,739,963)
(9,914,680)
(9,774,393)
(22,429,036)
Guarantees payable to aff. companies
(14,941)
(43,794)
(26,288)
(85,023)
(69,608)
Derivatives
31,130
124,442
46,665
202,237
177,804
IR Derivatives outflow
(199,155)
(789,847)
(296,193)
(1,285,195)
IR Derivatives inflow
230,285
914,289
342,858
1,487,432
Loans granted (cash receivables)
2,730,814
9,854,944
9,764,718
22,350,476
17,340,526
Loans to aff. comp. fix
2,730,814
9,854,944
9,764,718
22,350,476
Total Cash Flow
7,040
20,912
10,702
38,654
28
Additional disclosures on financial instruments
The following table provides carrying amounts, amounts recognized and fair values by measurement categories:
thousands of €
Category in
accordance
to IFRS 9
Carrying
amount
31.12.2024
Amounts recognized in
statement of financial
position according to IFRS
9
Fair Value
31.12.2024
Amortized
cost
Fair value
recognized
in profit or
loss
Assets
Cash and cash equivalents with aff. comp
1
AC
14,452
14,452
-
-
Loans to aff. comp.
AC
15,825,033
15,825,033
-
16,338,626
Other financial assets
1
AC
186,281
186,281
-
-
Derivative financial assets
FVPL
212,870
-
212,870
212,870
Liabilities
Bonds and other securitized liablities
AC
15,758,200
15,758,200
-
16,423,801
Other financial liabilities
AC
239,991
239,991
-
242,773
Derivative financial liabilities
FVPL
51,286
-
51,286
51,286
Thereof aggregated according to IFRS 9 categories
Assets
Financial assets carried at amortized cost
AC
16,025,766
16,025,766
-
16,338,626
Financial assets at fair value through profit and loss
FVPL
212,870
-
212,870
212,870
Liabilities
Financial liabilities carried at amortized cost
AC
15,998,191
15,998,191
-
16,666,574
Financial liabilities at fair value through profit and loss
FVPL
51,286
-
51,286
51,286
thousands of €
Category in
accordance
to IFRS 9
Carrying
amount
31.12.2023
Amounts recognized in
statement of financial
position according to IFRS 9
Fair Value
31.12.2023
Amortized
cost
Fair value
recognized
in profit or
loss
Assets
Cash and cash equivalents with aff. comp.
1
AC
8,994
8,994
-
-
Loans to aff. comp.
AC
17,340,527
17,340,527
-
18,324,361
Other financial assets
1
AC
193,933
193,933
-
-
Derivative financial assets
FVPL
282,499
-
282,499
282,499
Liabilities
Bonds and other securitized liablities
AC
17,262,591
17,262,591
-
18,159,456
Other financial liabilities
AC
256,509
256,509
-
260,713
Derivative financial liabilities
FVPL
104,695
-
104,695
104,695
Thereof aggregated according to IFRS 9 categories
Assets
Financial assets carried at amortized cost
AC
17,543,454
17,543,454
-
18,324,361
Financial assets at fair value through profit and loss
FVPL
282,499
-
282,499
282,499
Liabilities
Financial liabilities carried at amortized cost
AC
17,519,100
17,519,100
-
18,420,169
Financial liabilities at fair value through profit and loss
FVPL
104,695
-
104,695
104,695
1
We refer to the exception of IFRS 7.29(a) for the disclosure of the fair value. The amounts disclosed are approximately equal to the fair values.
AC = Amortized Cost
FVPL = Fair Value and changes in Profit and Loss
29
Only derivative financial instruments are measured at fair value in the statement of financial position of the Company. IFRS 7 requires that the
classification of financial instruments at fair value is determined by reference to the source of input used to derive the fair value. The
classification uses the following three-level hierarchy: Level 1 uses quoted prices in active markets for identical assets or liabilities as input for
the determination of the fair value, level 2 uses inputs other than quoted prices included within level 1 that are observable for the asset or
liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) and level 3 uses inputs for the asset or liability that are not based
on observable market data (unobservable inputs). The derivatives of the Company are exclusively categorised under level 2 in the fair value
hierarchy of IFRS 7.
The fair values recognized in the statement of financial position generally correspond to the market prices of the financial assets. If these are
not immediately available, they must be calculated using standard valuation models based on current market parameters. For this calculation,
the cash flows already fixed or determined by way of forward rates using the current yield curve taking into account maturity adjusted spreads
are discounted at the measurement date using the discount factors calculated from the yield curve applicable at the reporting date. Middle
rates are used.
Since no quoted prices are available for the derivative financial instruments of the Company, the fair value is determined with the use of
standard valuation models based on observable market parameters. For this calculation, the cash flows already fixed or determined by way
of forward rates using the current yield curve taking into account maturity adjusted spreads are discounted at the measurement date using the
discount factors calculated from the yield curve applicable at the reporting date. Middle rates are used. A distinction between the Clean and
the Dirty price is made. The Dirty Price also comprises accrued interest. The recognized Fair Values correspond to the Full Fair Value or the
Dirty Price.
The classification in level 1 or level 2 of quoted bonds has been determined by the trading volume of the instrument. USD and EUR
denominated bonds traded in an active market have been classified in level 1, all other, traded in less liquid markets, in level 2.
In 2024 and in 2023 the guarantee fees have been classified in level 2 and a fair value for the Other financial liabilities is disclosed accordingly.
The fair values of the financial instruments classified in level 1 equal the nominal amounts multiplied by the price quotations at the reporting
date. All other fair values of the financial instruments classified in level 2 are calculated as present values of the payments associated with the
debts, based on the applicable yield curve and DTAG’s credit spread curve for specific currencies.
The following table shows the classification of financial instruments that are not recognized at fair value but whose fair values are disclosed:
thousands of €
31-12-2024
Level 1
Level 2
Total
Assets
Loans to aff. comp.
16,338,626
16,338,626
Liabilities
Financial liabilities at amortized cost
13,763,250
2,903,324
16,666,574
- of which marketable securities
13,763,250
13,763,250
- of which non-marketable securities
2,660,551
2,660,551
- of which other financial liabilities
242,773
242,773
thousands of €
31-12-2023
Level 1
Level 2
Total
Assets
Loans to aff. comp.
18,324,361
18,324,361
Liabilities
Financial liabilities at amortized cost
16,167,720
2,252,449
18,420,169
- of which marketable securities
16,167,720
16,167,720
- of which non-marketable securities
1,991,736
1,991,736
- of which other financial liabilities
260,713
260,713
30
The following table provides net gains and losses from interests by measurement categories:
thousands of €
From interest
From subsequent measurement
From
derecognition
Net gain (loss)
At fair value
Currency
translation
2024
Financial Assets at Amortized Cost (AC)
727,131
-
499,144
250
1,226,525
Financial Instruments measure at Fair
Value and changes in Profit and Loss
16,227
-
16,227
Financial liabilities measured at
amortized cost (AC)
(754,669)
-
(498,983)
-
(1,253,652)
thousands of €
From interest
From subsequent measurement
From
derecognition
Net gain (loss)
At fair value
Currency
translation
2023
Financial Assets at Amortized Cost (AC)
845,745
-
(249,214)
3,457
599,988
Financial Instruments measure at Fair
Value and changes in Profit and Loss
3,383
-
3,383
Financial liabilities measured at
amortized cost (AC)
(872,802)
-
248,876
-
(623,926)
The following financial instruments are subject to enforceable master netting arrangements and similar agreements. The counterparty for all
those derivative financial instruments is DTAG. Even though a netting option exists, netting is currently not applied. However, both parties will
have the potential right to settle all derivative financial instruments on a net basis in the event of default of the other party.
Offsetting 31.12.2024:
thousands of €
Derivative financial assets
Derivative financial liabilities
Net amount presented in the balance sheet
212,870
51,286
Related amounts not set off in the balance sheet
51,286
51,286
thereof: financial instruments
51,286
51,286
thereof: collaterals
-
-
Net amount
161,584
-
Offsetting 31.12.2023:
thousands of €
Derivative financial assets
Derivative financial liabilities
Net amount presented in the balance sheet
282,499
104,695
Related amounts not set off in the balance sheet
104,695
104,695
thereof: financial instruments
104,695
104,695
thereof: collaterals
-
-
Net amount
177,804
-
Interest from financial instruments is recognized in finance income and other financial income (expense). We refer to notes 2 and 3.
Currency translation from financial instruments is recognized in other financial income (expense). We refer to note 3.
The net result from the subsequent measurement for financial instruments held for trading also includes interest and currency translation
effects.
Finance expense from financial liabilities measured at amortized cost primarily consists of interest expense on bonds and other financial
liabilities.
Finance income from loans and receivables primarily consists of interest income on loans to group companies.
31
8. Equity
The issued share capital amounts to EUR 500,000 and consists of 1,000 shares of common stock at a par value of EUR 500. There were no
movements in the number of shares in 2024 or 2023. All shares are held by DTAG.
In 2024 the Company paid EUR 7,080.58 dividend per share (2023: EUR 20,959). In 2023 as well as in 2024 the Management Board assessed
that the Company expects net positive cash flows for the year ending December 31, 2025 as well as in each of the following years. For the
result of these assessments, we refer to the liquidity analyses in note 7 of these notes.
The Management Board proposes to charge the results for the year to retained earnings; this has not yet been reflected in the Statement of
financial position.
Based on its assessment, the liquidity analysis referred to in note 7 and the proposed result appropriation of the Management Board, a dividend
of EUR 6,686,540 will be distributed to the shareholder, awaiting approval of the Supervisory Board and resolution by the General Meeting of
Shareholders. The related amount per share is EUR 6,686.54.
9. Notes to the statement of cash flows
The statement of cash flows has been prepared using the direct method, showing each major class of gross receipts and gross cash payments.
The position of “Cash and cash equivalents with aff. comp.” refers to the balance from bank accounts included in the cash pooling and the
inter-company current account, both with DTAG and is completely available for use by the Company.
Net cash generated from operating activities is mainly a result of the net margin earned by the Company. Net cash generated from investing
activities comprises from cash inflows for loans that have been repaid to the Company. Net cash used in financing activities mainly includes
cash outflows for the redeemed bonds and dividend payment to the Companies’ shareholder.
As far as applicable for the years 2023 and 2024 the cash in- and outflows for loan and derivative repayments and for new loans granted to
companies of DTAG Group matched the cash in- and outflows from issues and/or repayments of bonds.
10. Segment reporting
The primary activity of the Company is to finance its parent company DTAG and DTAG group companies. Therefore, segment information
other than geographic information and information per major customer is not reported separately. There is only one reportable segment.
Geographic information
Interest income from group companies according to their country of operations:
thousands of €
2024
2023
Germany
723,333
845,745
Hungary
3,798
-
727,131
845,745
All interest income from group companies in Germany is earned from loans to and the cash-pooling and inter-company current accounts with
DTAG
For non-current loan receivables, we refer to note 6.
32
11. Events after the statement of financial position date
No other events have occurred since December 31, 2024 which would make the present financial position materially different from that shown
in the statement of financial position as of that date or which would require adjustment to or disclosure in the financial statement.
12. Related parties
The Company is a group finance company and hence it had related party transactions during 2024 and 2023 respectively. Main existing
transactions are with DTAG and are covered by loan contracts, derivative agreements and a guarantee and credit default risk insurance
agreement. Related party transactions with other Deutsche Telekom group companies, such as the shared service centre, were covered by
service level agreements. All transactions with DTAG, except for the remuneration to the Management Board member and Supervisory Board
members of the Company hired by DTAG, and other Deutsche Telekom group companies are based on the arm’s length principle. All amounts
of material transactions with related parties are disclosed in notes 2, 3, 4, 6, 7, 8, 9 and 10.
Maastricht, March 27, 2025
The Management Board:
The Supervisory Board:
F. Roose
S. Wiemann
M. Schäfer
Dr. Ch. Dorenkamp
Dr. A. Lützner
33
OTHER INFORMATION
Proposed appropriation of result according to article 21 of the articles of association
Article 21.1 of the articles of association states that “The General Meeting has the authority to allocate the profits determined by the adoption
of the annual accounts. If the General Meeting does not adopt a resolution regarding the allocation of the profits prior to or at the latest
immediately after the adoption of the annual accounts, the profits will be reserved.”.
Article 21.2 of the articles of association states that “The General Meeting has the authority to make distributions. If the Company is required
by law to maintain reserves, this authority only applies to the extent that the equity exceeds these reserves. No resolution of the General Meeting
to distribute shall have effect without the consent of the Management Board. The Management Board may withhold such consent only if it
knows or reasonably should expect that after the distribution, the Company will be unable to continue the payment of its due debts.”.
Independent audit
The Company is required by Dutch law to have its financial statements audited. We refer to the independent auditor’s report as set out on the
next pages.
34
Independent auditor’s report
To: the shareholder and supervisory board of Deutsche Telekom International Finance B.V.
Report on the audit of the financial statements 2024 included in the annual report
Our opinion
We have audited the financial statements 2024 of Deutsche Telekom International Finance B.V., based in Maastricht.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of Deutsche Telekom
International Finance B.V. as at 31 December 2024, and of its result and its cash flows for 2024 in accordance with Internati onal
Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.
The financial statements comprise:
1. The statement of financial position as at 31 December 2024.
2. The following statements for 2024: the statements of comprehensive income, changes in equity and cash flows.
3. The notes comprising material accounting policy information and other explanatory information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under th ose
standards are further described in the 'Our responsibilities for the audit of the financial statements' section of our report .
We are independent of Deutsche Telekom International Finance B.V. in accordance with the EU Regulation on specific requiremen ts
regarding statutory audit of public-interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision ac t), the
Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional
Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands.
Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics for
Professional Accountants).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Information in support of our opinion
We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion
thereon. The following information in support of our opinion was addressed in this context, and we do not provide a separate opinion
or conclusion on these matters.
Materiality
Based on our professional judgment we determined the materiality for the financial statements as a whole at EUR 162,000,000. The
materiality is based on 1% of Total assets. We have also taken into account misstatements and/or possible misstatements that in our
opinion are material for the users of the financial statements for qualitative reasons.
We agreed with those charged with governance that misstatements in excess of EUR 8,100,000, which are identified during the a udit,
would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds.
35
Audit approach fraud risks
We identified and assessed the risks of material misstatements of the financial statements due to fraud. During our audit we obtained
an understanding of the entity and its environment and the components of the system of internal control, including the risk
assessment process and management's process for responding to the risks of fraud and monitoring the system of internal contro l and
how those charged with governance exercise oversight, as well as the outcomes. We refer to section management board policy of the
management report for management's fraud risk assessment and section paragraph 4 in which those charged with governance
reflect on this fraud risk assessment. We note that management has not formalised its fraud risk assessment.
We evaluated the design and relevant aspects of the system of internal control and in particular the fraud risk assessment, a s well as
among others the code of conduct, whistle blower procedures and incident registration. We evaluated the design and the
implementation and, where considered appropriate, tested the operating effectiveness, of internal controls designed to mitigate fraud
risks.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to financial reporting fraud,
misappropriation of assets and bribery and corruption in close co-operation with our forensic specialists. We evaluated whether these
factors indicate that a risk of material misstatement due to fraud is present.
We identified the following fraud risks and performed the following specific procedures:
• Management override of controls:
o we have reviewed journal entries made and evaluated whether these include elements that could relate to fraud
and management override;
o we have identified and obtained an understanding of the business rationale for significant or unusual transactions
that are outside the normal course of business;
o we have evaluated whether the judgments and decisions made by management in making the estimates included
in the financial statements, even if they are individually reasonable, indicate a possible bias on the part of the
entity’s management.
We considered the outcome of our other audit procedures and evaluated whether any findings were indicative of fraud or non -
compliance.
We considered available information and made enquiries of relevant executives and those charged with governance.
We tested the appropriateness of journal entries recorded in the general ledger and other adjustments made in the preparation of the
financial statements.
We evaluated whether the selection and application of accounting policies by the entity, particularly those related to subjec tive
measurements and complex transactions, may be indicative of fraudulent financial reporting.
We evaluated whether the judgments and decisions made by management in making the accounting estimates included in the
financial statements indicate a possible bias that may represent a risk of material misstatement due to fraud. Management ins ights,
estimates and assumptions that might have a major impact on the financial statements are disclosed in note Accounting policies of
the financial statements. We performed a retrospective review of management judgments and assumptions related to significant
accounting estimates reflected in prior year financial statements. Impairment testing of intangible and fixed assets is a significa nt
area to our audit as the determination whether these assets are not carried at more than their recoverable amounts is subject to
significant management judgment.
For significant transactions such as redemption of bonds we evaluated whether the business rationale of the transactions sugg ests
that they may have been entered into to engage in fraudulent financial reporting or to conceal misappropriation of assets.
This did not lead to indications for fraud potentially resulting in material misstatements.
36
Audit approach compliance with laws and regulations
We assessed the laws and regulations relevant to the entity through discussion with management, reading minutes.
As a result of our risk assessment procedures, and while realizing that the effects from non -compliance could considerably vary, we
considered the following laws and regulations: (corporate) tax law, the requirements under the International Financial Report ing
Standards as adopted by the European Union (EU-IFRS) and Part 9 of Book 2 of the Dutch Civil Code with a direct effect on the financial
statements as an integrated part of our audit procedures, to the extent material for the financial statements. We obtained sufficient
appropriate audit evidence regarding provisions of those laws and regulations generally recognised to have a direct effect on the financial
statements.
Apart from these, Deutsche Telekom International Finance B.V. is subject to other laws and regulations where the consequences of
non-compliance could have a material effect on amounts and/or disclosures in the financial statements, for instance, through
imposing fines or litigation.
Given the nature of Deutsche Telekom International Finance B.V.'s business and the complexity of these other laws and regulat ions,
there is a risk of non-compliance with the requirements of such laws and regulations.
Our procedures are more limited with respect to these laws and regulations that do not have a direct effect on the determinat ion of
the amounts and disclosures in the financial statements. Compliance with these laws and regulations may be fundamental to th e
operating aspects of the business, to Deutsche Telekom International Finance B.V.'s ability to continue its business, or to a void
material penalties (e.g., compliance with the terms of operating licenses and permits or compliance with environmental regul ations)
and therefore non-compliance with such laws and regulations may have a material effect on the financial statements. Our
responsibility is limited to undertaking specified audit procedures to help identify non -compliance with those laws and regulations
that may have a material effect on the financial statements. Our procedures are limited to
(i) inquiry of management, those charged with governance, the executive board and others within Deutsche Telekom
International Finance B.V. as to whether Deutsche Telekom International Finance B.V. is in compliance with such laws and
regulations and
(ii) inspecting correspondence, if any, with the relevant licensing or regulatory authorities to help identify
non-compliance with those laws and regulations that may have a material effect on the financial statements.
Naturally, we remained alert to indications of (suspected) non-compliance throughout the audit.
Finally, we obtained written representations that all known instances of (suspected) fraud or non -compliance with laws and
regulations have been disclosed to us.
Audit approach going concern
Management has prepared the annual report on the basis of going concern for the period of 12 months from the date of preparat ion
of the annual report. Our work to review the board’s going concern assessment includes, among others:
• Considering whether the management’s going concern assumption contains all relevant information.
• Determining whether management has identified events or circumstances that may cast significant doubt on the company’s
ability to continue as a going concern.
• Analysing whether the current and required financing for the continuation of the entire business activities is guaranteed.
Our audit procedures show that the going concern assumption used by management is acceptable and no going concern risks have
been identified.
37
Our key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financi al
statements. We have communicated the key audit matters to those charged with governance. The key audit matters are not a
comprehensive reflection of all matters discussed.
Key audit matter: Impairment of the loans to the group company
Key audit matter is the risk associated with the possible impairment of the loans to a group company Deutsche Telekom AG.
Reference is made to note 6 of the financial statements.
The loans to the group company including the related interest comprise a significant part of the Company’s balance sheet. The loans
to the group company are valued at amortised cost less any impairments if applicable.
The loans to group company mainly consist of receivables from the parent company, Deutsche Telekom AG 2024: Total receivable
EUR 15,785,498,350). The risk of potential impairments is identified as a result of the significant part of the Company’s bal ance
sheet and the fact that it mainly relates directly or indirectly to one counterparty. Inaccurate valuation of loans to Deutsch e Telekom
AG. could have a material impact on the valuation of the loans to Deutsche Telekom AG. We consider the valuation of these account
balances to be a key audit matter.
How our audit addressed the matter
We performed the following procedures to audit the valuation of the loans to the group company:
• We recalculated the amortized cost value and the related interest income based on the effective interest method.
• We reviewed the audited 2024 financial statements of Deutsche Telekom AG, analysed the financial performance and
evaluated valuation of the loans to Deutsche Telekom AG to conclude on possible triggering events for impairment.
• We have challenged the information used by management.
• We concluded on existence of the receivables in verifying the outstanding amount with the loan agreements, the financial
statements of the parent company and by signed confirmations from the parent company.
• We reviewed the Company’s disclosure note 6 on the matter.
Key observations and conclusion
Based on the procedures performed, as described above, we did not identify any material reportable matters in management’s
assessment of the recoverability of the loans to the group company.
Report on the other information included in the annual report
The annual report contains other information, in addition to the financial statements and our auditor's report thereon.
The other information consists of:
• Report of the management.
• Report of the supervisory board.
• Other Information as required by Part 9 of Book 2 of the Dutch Civil Code.
Based on the following procedures performed, we conclude that the other information:
• Is consistent with the financial statements and does not contain material misstatements.
• Contains all the information regarding the management report and the other information as required by
Part 9 of Book 2 of the Dutch Civil Code.
38
We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial
statements or otherwise, we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch
Standard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of t he
financial statements.
Management is responsible for the preparation of the management report in accordance with Part 9 of Book 2 of the Dutch Civil
Code, and the other information as required by Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements
Engagement
We were engaged by the supervisory board as auditor of Deutsche Telekom International Finance B.V. in 2022,
as of the audit for the year 2022 and have operated as statutory auditor ever since that financial year.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements
regarding statutory audit of public-interest entities.
European Single Electronic Format (ESEF)
Deutsche Telekom International Finance B.V. has prepared its annual report in ESEF. The requirements for this
are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on the specification of a single
electronic reporting format (hereinafter: the RTS on ESEF).
In our opinion, the annual report, prepared in XHTML format, including the financial statements of
Deutsche Telekom International Finance B.V. complies in all material respects with the RTS on ESEF.
Management is responsible for preparing the annual report including the financial statements in accordance with the RTS on ES EF.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report complies with the RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N
‘Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal verantwoordingsdocument’ (assurance
engagements relating to compliance with criteria for digital reporting).
Our examination included amongst others:
• Obtaining an understanding of the company’s financial reporting process, including the preparation of the annual report in
XHTML format.
Identifying and assessing the risks that the annual report does not comply in all material respects with the
RTS on ESEF and designing and performing further assurance procedures responsive to those risks to provide
a basis for our opinion including obtaining the annual report in XHTML format and performing validations to determine whether the
annual report complies the RTS on ESEF.
39
Description of responsibilities regarding the financial statements
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with EU -IFRS and Part
9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control as management determin es is
necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to frau d or
error.
As part of the preparation of the financial statements, management is responsible for assessing the company's ability to cont inue as a
going concern. Based on the financial reporting frameworks mentioned, management should prepare the financial statements using
the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or ha s no
realistic alternative but to do so.
Management should disclose events and circumstances that may cast significant doubt on the company's ability to continue as a
going concern in the financial statements.
The supervisory board is responsible for overseeing the company’s financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate aud it
evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material
misstatements, whether due to fraud or error, during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reas onably be
expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality a ffects the
nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion .
We have exercised professional judgment and have maintained professional scepticism throughout the audit, in accordance with
Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:
• Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error,
designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal
control.
• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Concluding on the appropriateness of management's use of the going concern basis of accounting, and based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause the company to cease to continue as a going concern.
• Evaluating the overall presentation, structure and content of the financial statements, including the disclosures.
• Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant findings in internal control that we identified during our audit. I n this respect
we also submit an additional report to the audit committee in accordance with Article 11 of the EU Regulation on specific
requirements regarding statutory audit of public-interest entities. The information included in this additional report is cons istent with
our audit opinion in this auditor's report.
From the matters communicated with those charged with governance, we determine the key audit matters: those matters that were of
most significance in the audit of the financial statements. We describe these matters in our auditor's report unless law or r egulation
precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public
interest.
Amsterdam, 27 March 2025
Deloitte Accountants B.V.
Signed on the original: J. Penon