On 15 february 2012 telenor group issued a notice to

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Unformatted text preview: ranted to Uninor. The quashing is effective 4 months from 2 February 2012. Meanwhile, the TRAI (Telecom Regulatory Authority of India) shall make fresh recommendations for grant of licences and allocation of spectrum in the 2G band by auction, as was done for allocation of spectrum in 3G band. As a consequence of this an impairment loss of NOK 4.1 billion was recognised in the fourth quarter of 2011. On 15 February 2012, Telenor Group issued a notice to its Indian strategic partner Unitech Ltd, that it will seek indemnity and compensation following the cancellation of Uninor’s 22 licences by the Supreme Court of India. The Group holds Unitech Ltd. liable for the breach of warranties related to the cancellation of the licences – seeking compensation for all investment and damages caused by the Supreme Court Order. Telenor also makes an indemnity claim against Unitech Ltd. for the failure to obtain spectrum in the strategically critical Delhi region. Uninor has at 2 March 2012 filed a petition seeking review of the judgment and order passed by the Supreme Court of India. Uninor has prayed to the Supreme Court for relief against the Court’s previous order of cancellation of its licences. Telenor Group will consider every option available in India. It is the group’s position that the strategic partnership with Unitech Ltd does not have a future, and Telenor therefore have started the process of looking for a new Indian partner. VimpelCom Ltd Telenor Group, on 15 February 2012, purchased 234,000,000 VimpelCom preferred shares from Weather Investments II S.a.r.l. (“Weather”), for NOK 2.2 billion thereby increasing the Group’s voting share in VimpelCom Ltd. to 36.36%. At the same time, Telenor and Weather entered into an option agreement, granting Weather a putoption on Telenor for the remaining 71,000,000 preference shares in VimpelCom at the same price per share as in the first transaction. Telenor has in addition certain situational calloptions, amongst other related to the remaining preference shares. In connection with the transaction, the Group has withdrawn all its claims against Altimo Holdings & Investments Ltd., Altimo Cooperatief U.A. and VimpelCom Ltd. in the pending arbitration proceeding. The Group’s withdrawal of its claims will result in the termination of the VimpelCom shareholders agreement. /page 17/ telenor annual report 2011 report from the board of directors 2011 OuTLOOk FOr 2012 Based on the current Group structure including Uninor and currency rates as of 31 December 2011, Telenor expects: • Organic revenue 2) growth above 5% • An EBITDA margin before other income and expenses in the range of 32–33% • Capital expenditure as a proportion of revenues, excluding licences and spectrum, in the range of 12–13% Telenor expects that Uninor will contribute with an EBITDA loss around NOK 2.0 billion and capital expenditure, excluding licences and spectrum, around NOK 1.0 billion. Due to the cancellation of Uninor’s licences by the Indian Supreme Court on 2 February 2012, the outlook for Uninor for 2012 is highly uncertain. For more details about the cancellation, please refer to events after the reporting period. A growing share of Telenor Group’s revenues and profits is derived from operations outside Norway. Currency fluctuations may to a greater extent influence the reported figures in Nor wegian Krone. Financial, regulatory, operational, industry, political and reputational risks, may also influence the profits. ANNuAL rESuLT AND ALLOCATION Telenor ASA’s net income for the year 2011 was NOK 6,168 million, after receipt of a group contribution of NOK 11,200 million. The Board proposes the following allocation: After this allocation, Telenor ASA’s distributable equity totalled NOK 16, 262 million as at 31 December 2011. The proposed cancellation of shares will impact the equity available for distribution as dividend by NOK 2.2 billion. At the Annual General Meeting in May 2012, the Board will propose a dividend of NOK 5 per share for 2011 to be paid in May/June 2012, in total NOK 7.9 billion. Transferred to retained earnings: NOK 6,168 million. Fornebu, 21 March 2012 Harald Norvik Chairman Liselott Kilaas Deputy Chairman Sally Davis Board member Hallvard Bakke Board member Frank Dangeard Board member Dr. Burckhard Bergmann Board member Barbara Milian Thoralfsson Board member 2) Dag J. Opedal Board member Harald Stavn Board member Brit Østby Fredriksen Board member Bjørn André Anderssen Board member Jon Fredrik Baksaas president & Ceo Organic revenue is defined as revenue adjusted for the effects of acquisitions and disposals of operations and currency effects. /page 18/ telenor annual report 2011 financial statements / Telenor Group Consolidated Income Statement Telenor Group 1 January–31 December NOK in millions, except per share amounts Revenues Operating expenses Costs of materials and traffic charges Salaries and personnel costs Other operating expenses Other income (expenses) Depreciation and amortisation Impairment losses Operating profit Note 2011 2010 6 98 516 94 843 (27 541) (10 814) (29 635) (485) (15 309) (4 340) 10 393 (26 239) (10 852) (28 532) (572) (16 134) (14) 12 500 7 8 9, 11 10 12 12 Share of net income from associated companies Gain on disposal of associated companies 21 21 2 114 1 662 3 145 6 549 Financial income and expenses Financial income Financial expenses Net currency gains (losses) Net change in fair...
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