Financial Statements - Entel

EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. & SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor Transalation Purposes OnlyBetween January 1, 2011 and December 31, 2012, no changes were recorded for issuing, surrenders,reductions, or any other circumstances.The portfolio does not contain shares in own companies.There are no reserves or commitments to issue shares to cover option and sale contracts.Cumulative Earnings (Losses)In the nine months of 2012 and 2011, the reserves fell by Th.CLP $50,188,235 andTh.CLP $54,229,998, respectively. The values correspond to the provisional dividends paid out forthese periods, plus the provision for the distribution of the legal minimum dividend.The remaining provisions required to meet the legal minimum dividend are CLP $62.19 andCLP $79.28 per share for the respective years.Dividend PolicyIn line with Act 18,046, and except when another agreement has been reached at the shareholdersmeeting by unanimity of issued shares, at least 30% of all profits made by public limited companiesduring the financial year must be paid as a dividend.The company’s current dividend distribution policy establishes dividends in excess of the legalminimums. However these limits stipulate maximums and as such any dividends in excess of thelegal minimum are discretionary and as such the company does not make dividend provisionsabove the legal minimum.The policy communicated at the most recent ordinary shareholders meeting held on April 26, 2012,proposed payments of up to 80% of profits for each financial year, conditional on the company’sannual results, investment requirements, and the covenants established in long-term bank loanagreements to which the company is committed for debt, liquidity and financing.The Chilean Securities and Insurance Supervisor requires the parent company to set out a policy forhandling income originating from the adjustment of financial assets and liabilities to fair value. Assuch, the company has established a policy whereby the unrealized profits that would have beengenerated from the income to be distributed are deducted from income.No adjustments are required for profits from 2012 and 2011.Except for the conditions mentioned in the previous paragraphs, the company is not subject toadditional restrictions for dividend payments.Dividend PaymentsThe following dividend payments were made in 2012 and 2011.At the ordinary shareholders meeting, held on April 26, 2012, a final dividend payment of CLP $405per share (equivalent to Th.CLP $95,792,096) was agreed, payable on May 22, 2012.- 46 -