8S Erdam' 2 9 JAN
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otterdarnfRott ~ LL\. l!I ~8S erdam' 2 9 JAN. 2010 L FINTUR HOLDINGS B.V. ANNUAL ACCOUNTS AT 31 DECEMBER 2008 TOGETHER WITH AUDITORS' REPORT adopted by the general meeting of shareholders on 4 January 2010 vastgesteld door de algemene vergadering van aandeelhouders op 4 januari 2010 PricewaterhouseCoopers Accountants N.V. For identification purposes only FINTUR HOLDINGS TABLE OF CONTENT CONTENTS PAGES ANNUAL REPORT OF THE DIRECTORS CONSOLIDATED BALANCE SHEETS.................................................................................. 1-2 CONSOLIDATED STATEMENTS OF INCOME.................................................................. 3 CONSOLIDATED STATEMENTS OF CHANGES lN EQUITY........................................... 4 CONSOLIDATED STATEMENTS OF CASH FLOW............................................................ 5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.................................... 6-49 NOTE! ORGANISATION AND NATURE OF OPERATIONS ........................................................................... 6-7 NOTE2 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT RELEVANT ACCOUNTING POLICIES ................................................................................................................... 7-25 NOTEJ SEGMENT INFORMATION .................................................................................................................... 26-29 NOTE4 CASH, CASH EQUIVALENTS AND RESTRICTED CASH ................................................................. .. 30 NOTES TRADE RECEIVABLES .......................................................................................................................... 30-31 NOTE6 TRANSACTIONS AND BALANCES WITH SHAREHOLDERS AND OTHER RELATED COMPANIES ..................................................................................................................... .. 32-33 NOTE 7 INVENTORIES ........................................................................................................................................ .. 34 NOTES OTHER CURRENT ASSETS .................................................................................................................. .. 34 NOTE9 PROPERTY AND EQUIPMENT, NET .................................................................................................. .. 35-36 NOTE 10 INTANGIBLE ASSETS - NET ................................................................................................................ .. 37-39 NOTE 11 OTHER NON-CURRENT ASSETS ......................................................................................................... 39 NOTE 12 TRADE PAYABLES ................................................................................................................................ 40 NOTE 13 TAXATION ON INCOME ....................................................................................................................... 40-43 NOTE 14 OTHER CURRENT LIABILITIES ........................................................................................................... 43 NOTE IS OTHER NON-CURRENT LIABILITIES ................................................................................................. 43-45 NOTE16 SHARE CAPITAL .................................................................................................................................... 45 NOTE 17 COST OF SERVICES ............................................................................................................................... 46 NOTE 18 GENERAL AND ADMINISTRATIVE EXPENSES ................................................................................ 46 NOTE 19 SELLING AND MARKETING EXPENSES ............................................................................................ 47 NOTE20 FINANCIAL INCOME ............................................................................................................................. 47 NOTE21 FINANCIAL EXPENSE ........................................................................................................................... 47 NOTE 22 COMMITMENTS AND CONTINGENCIES .......................................................................................... .. 48-49 NOTE 23 SUBSEQUENT EVENT ........................................................................................................................... 49 COMPANY-ONLY ACCOUNTSAT31 DECEMBER2008.................................................... 50 COMPANY-ONLY BALANCE SHEETS............................................................ 51 COMPANY-ONLY PROFIT AND LOSS ACCOUNTS.......................................................... 52 NOTES TO THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT ................. 53-57 NOTE 25 GENERAL................................................................................................................ 53 NOTE 26 INTANGIBLE FIXED ASSETS....................................................................................... 53 NOTE 27 FINANCIAL FIXED ASSETS......................................................................................... 54 NOTE 28 RECEIVABLES.......................................................................................................... 55 NOTE 29 SHAREHOLDERS' EQUITY.......................................................................................... 55 NOTE 30 CURRENT LIABILITIES.............................................................................................. 56 NOTE 31 EMPLOYEES ........................................................................................................................................... 56 NOTE 32 REMUNERATION OF THE BOARD....................................................................................................... 56 NOTE 33 RELATED PARTIES................................................................................................................................. 56 PricewaterhouscCoopers Accountants N.V. For identification purposes only FINTUR HOLDINGS TABLE OF CONTENT OTHER INFORMATION................................................................................... 58 •PROFIT APPROPRIATION ACCCORDING TO THE ARTICLES OF ASSOCIATION 59 •PROPOSED PROFIT APPROPRIATION................................................................. 59 •AUDITOR'S REPORT................................................................................................... 60 Price\vaterhouseCoopers Accountants N.V. For identification purposes only FINTUR HOLDINGS B.V. ANNUAL REPORT OF THE DIRECTORS General In accordance with the Articles of Association of the Company, the Board of Directors ofFintur Holdings B.V. ("the Company") hereby submits the Annual Accounts for the year ended 31 December 2008. Activities The major activity of the Company during the financial year was the participation and investment in various businesses in telecommunications (GSM) in several countries in the so-called "Eurasia region". As at year-end 2008 management has no plans to change the activities of the Company and holds interests in the following GSM businesses: Kcell, Azercell (including internet service provider Azeronline), Geocell and Moldcell. Developments during the year Results During the financial year 2008: Revenues increased by 23% to USO 1,823.1 million compared to a growth of 28% in the preceding year. The Company made a (consolidated) profit to the amount of USO 364,545,000 (2007: USO 262,850,000). This profit resulted mainly from the Company's GSM business in Kazakhstan and in Azerbaijan. During 2008 the Company's GSM activities in all countries realised a profit. On October I st 2008 TeliaSonera closed the Visor acquisition announced on 26 September. TeliaSonera acquired 51 percent of the shares in TeliaSonera Asia Holding B.V. TeliaSonera Asia Holding B. V owns 80 percent of the shares and votes in Spice Nepal, the second largest mobile operator in Nepal, and I 00 percent of the shares and votes in Applifone, a start-up mobile operator in Cambodia. The total cash consideration to be paid by TeliaSonera is approximately USO 484 million, corresponding to 51 percent of the total equity value of TeliaSonera Asia Holding B.V. Although the acquisition has been perfonned by TeliaSonera, Fintur will be responsible for the management of the operations. The amount of distributable reserves is USO 734 million as at 31 December 2008. As at 31 December 2008, Fintur has a sound financial position evidenced by the fact that shareholders' equity amounts to 54% of total assets. On 4 January 2008, Fintur acquired an additional 14.3% ofGeocell shares for a purchase consideration ofUSD 33 million, which increases the effective ownership ofFintur in Geocell to 97.5%. The acquired shares were previously held by several local shareholders. In April 2008, the privatization of the Republic of Azerbaijan's 35.7% ownership in Azercell was completed. Azertel acquired the entire stake from the Republic of Azerbaijan for a consideration of USO 180 million, increasing Azertel's ownership in Azercell to 100%. At the same time, the minority shareholders in Azertel increased their ownership to 49%. Fintur's effective ownership in Azercell therefore remained at 51 %. One of the minority shareholders was also granted a put option, giving the shareholder the right to sell its 42.2% stake in Azertel to Fintur at fair value in certain deadlock situations regarding material decisions at the general assembly. f'RJCEWAfERHOUsE@JPERS ~ PricewaterhouseCoopers Accoun1anl5o N.V_ For identification