Financial Statements - Entel

EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. & SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor Translation Purposes Onlyb) Transactions:Companies for which transactions have been made with Chile as country of origin.Tax IDCOMPANYNature ofDescription ofrelationship transaction ValueTh. CLP$12/31/2012 12/31/2011Effect on income(charge/credit)ValueTh. CLP$Effect on income(charge/credit)91.440.000-7 Forestal Mininco S.A. Shared director Services provided 237,660 237,660 229,372 229,37295.304.000-K CMPC Maderas S.A. Shared director Services provided 220,416 220,416 213,342 213,34296.529.310-8 CMPC Tissue S.A. Shared director Services provided 235,565 235,565 222,790 222,79096.532.330-9 CMPC Celulosa S.A. Shared director Services provided 294,802 294,802 294,478 294,47896.768.750-2 Servicios Compartidos CMPC S.A. Shared director Services provided 1,077,943 1,077,943 1,098,524 1,098,524Telecommunications services provided to related companies correspond to standard servicescovered by the Entel Group’s business activities (mobile and wireline telephony services, Internet,data services and call center).c) Remuneration and Benefits Received by Directors and Group ExecutivesThe parent company is managed by a board of directors with nine members whose remunerationsfor 2012 and 2011 were Th. CLP $401,142 and Th. CLP $400,759 respectively.For the same periods, remuneration of top-level staff was Th. CLP $4,665,752 andTh. CLP $7,297,889. These values include annual bonus payments of Th. CLP $1,197,200 andTh. CLP $4,098,366 for each of the periods.There were 23 executives in each period.10. INVENTORYInventory is primarily composed of mobile telephone handsets and accessories. These are valuedaccording to the accounting criteria described in Note 3 d) and the breakdown is as follows.12/31/2012 12/31/2011Th. CLP$Th. CLP$Handsets and accessories for mobile services 65,025,959 62,166,064Merchandise 384,242 308,000Work in progress 472,577 583,440Other Inventory 475,096 34,296Total 66,357,874 63,091,800At the close of each period there were no duties on any of the items that compose up inventories.For mobile handsets, according to the contract changes described in Note 22, which took effect fromOctober 1 2012, the cost of equipment is directly recorded under income when contracts are signed.During the periods covered by these financial statements, allocations of Th. CLP $159,183,667 andTh. CLP $101,624,554 were recorded under income for sales costs and to supplies and equipments.- 25 -