Problems that manifest in relation to the supply

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Unformatted text preview: Group’s ability to attract and retain subscribers. /page 14/ telenor annual report 2011 report from the board of directors 2011 Telenor Group depends on key suppliers and third-party providers for supply and maintenance of equipment and services that the company needs to develop its network and operate its business. Problems that manifest in relation to the supply chain may adversely affect the Group’s business and results of operations. Telenor Group’s local partners or other co-shareholders may fail to adequately support the companies in which Telenor has invested, or disagree with the Group’s strategy and business plans. This may prevent these companies from operating or competing effectively. Across Telenor Group’s portfolio of operations there is depth of experience and knowledge on a broad range of market-facing, technical and partner engagement matters that have direct relevance beyond individual business units. Inability to leverage this asset may contribute to sub-optimisation in operational efficiency and market-side activity. Telenor Group handles substantial volumes of confidential information. Loss, mismanagement or unauthorised disclosure of such information could adversely affect the Group’s business. Concern has been expressed that electromagnetic signals from mobile handsets and base stations may pose health risks. Any substantiation of such claims may adversely affect the Group’s business and results of operations. The growing scale of Telenor Group’s international operations brings with it the potential for exposure to fraud and corruption, both internally and opposite external stakeholders who may have a differing set of business values from those under which Telenor Group operates. Failure to adhere to the values that Telenor Group commits to in our global operations may damage customer perception of the Telenor brand as well as adversely impact the Group’s results of operations. Operationally the aim is to integrate systematic risk management with the Group’s business processes. A key activity is to ensure that all managers at all levels assume responsibility for risk management within their areas, and for embedding risk management in the day-to-day business processes. Within larger business units, local risk managers are in place to coordinate risk management processes and drive management visibility of key risks in a structured way. Telenor Group operates in countries where there is a history of political instability and violence. Any recurrence or escalation of such events, including social unrest, terrorist attacks and war, may prevent the Group from operating its business effectively. ShArES AND ShArEhOLDEr ISSuES T he Telenor share is listed on the Oslo Stock Exchange (OSE) and was one of the most traded shares on OSE in 2011. An increasing part of the trades in the Telenor share is being done on other market places. OSE’s market share of the trades in the Telenor share declined from 62% in 2010 to 44% in 2011. risk management Telenor’s risk management objective is to earn competitive returns from its various business activities at acceptable risk levels and without compromising its vision, values and codes of conduct. Risk management is integrated within the Group’s annual strategy planning process, and key risks highlighted therein by business units are tracked through the quarterly Group Business Review process. Including reinvested dividends, the total return of the Telenor share was 8% in 2011, whereas the benchmark index STOXX Europe 600 Telecommunications Index Gross Return (SXKGR) was unchanged. The OSEBX index decreased by 12%. The Telenor share closed at NOK 98.10 at year-end 2011, corresponding to an equity value of NOK 158 billion. At year-end, Telenor’s share capital was NOK 9,649,161,678, divided into 1,608,193,613 ordinary shares. The share capital was reduced by NOK 298,171,398 in 2011. This was done by cancelling 22,877,098 shares and by redeeming 26,818,135 shares held by the Ministry of Trade and Industry. /page 15/ telenor annual report 2011 report from the board of directors 2011 T he company had approximately 45,800 shareholders at year-end, a decline of 8% from the previous year. The 20 largest shareholders held 79.7% of the registered shares. C alculated on a free float basis, North American investors owned 34% of the Telenor shares, while Norwegian investors held 20% at year end. European and UK investors held 19% and 15% of the company, respectively. Telenor owned 24.0 million treasury shares as of 31 December 2011, of which 22.2 million were held for the purpose of cancellation. Based on the number of treasury shares held for cancellation at year-end and subject to approval by the Annual General Meeting in 2012, 26.0 million of the Ministry of Trade and Industry’s Telenor shares will be redeemed for a consideration of approximately NOK 2.4 billion. This is a part of an agreement entered into in 2011 between Telenor and the Ministry, so that the Ministry’s ownership stake in Telenor of 53.97% will remain unaffected if Telenor repurchased shares for canc...
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This document was uploaded on 03/21/2014.

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