Financial Statements - Entel

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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 -
EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. & SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor Transalation Purposes OnlyAt the ordinary shareholders meeting, held on April 26, 2011, a final dividend payment of CLP $445per share (equivalent to Th.CLP $105,253,044) was agreed, payable on May 24, 2011.At the board meeting held on November 5, 2012, an interim dividend payment of CLP $150 pershare (equivalent to Th.CLP $35,478,554) was agreed, payable on December 12, 2012.At the board meeting held on Monday, November 07, 2011, an interim dividend payment ofCLP $150 per share (equivalent to Th.CLP $35,478,554) was agreed, payable on December 12, 2011.Other ReservesOther reserves in the Statement of Changes in Equity are as follows.Reserves for Foreign Currency Translation – This value reflects the cumulative results of exchangerate fluctuations for converting the financial statements of subsidiaries based abroad from theirworking currency into the Group reporting currency (Chilean Pesos).Cash Flow Hedge Reserve – This is the difference between the spot and fair values of cash flowhedge contracts (CCS) classified as effective, net of deferred tax. The values are transferred toincome upon maturity of the contract.Other Reserves (Various) – Charges and credits to equity for the adjustments made for the first-timeapplication of the International <strong>Financial</strong> Reporting Standards (IFRS), effective from January 1,2008.The main balances for controlled adjustments in this reserve are for deferred tax liabilities andprepaid charges revenue from customers not recorded on this date for Th.CLP $10,866,212 andTh.CLP $8,215,281, respectively.Additionally, in accordance with Act 18,046, Article 10, , and Circular 456 of the Chilean Securitiesand Insurance Supervisor, the revaluation of paid-in capital for 2008 must be listed under this item.21. EARNINGS PER SHAREEarnings per share for the two periods are as follows.Cumulative01/01/2012 01/01/201112/31/2012 12/31/2011Th. CLP$Th. CLP$Earnings (losses) attributable to holders of stock instruments in controllingshareholder equity167,294,116 180,766,659Income available to ordinary shareholders, basic 167,294,116 180,766,659Weighted average of no. of shares, basic 236,523,695 236,523,695Basic earnings (losses) per share 707.30 764.26The calculation of basic earnings per share for 2012 and 2011 is based on the profits attributable toshareholders and the number of shares of the single series. The company has not issued convertible- 47 -
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