KvK Rotterdam/Rotterdam 3 1 JAN. 2013 FINTUR HOLDINGS B.V. CONSOLIDATED FINANCIAL STATEMENfS AT 31 DECEMBER 2011 TOGETHER WITH INDEPENDENf AUDITORS' REPORT adopted by the general meeting of shareholders by resolution passed on 29 Jamuary 2013 vastgesteld door de algemene vergadering van aandeelhouders bij besluit op 29 januari 2013 Prkt.'\\illl:rhou.sc(;oopers A<:countm11s N. \'. For idenlifirolion purpo~ouly lo pwc FINTUR HOLDINGS B.V. CONTENTS CONTENTS PAGES REPORT OF THE BOARD OF DIRECTORS .......................... 3-5 CONSOLIDATED FINANCIAL STATEMENTS................................................................... 6 - 58 CONSOLIDATED BALANCE SHEETS................................................................................. 7 CONSOLIDATED STATEMENTS OF INCOME.................................................................. 9 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME............................. 10 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY......................................... 11 CONSOLIDATED STATEMENTS OF CASH FLOWS.......................................................... 12 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.................................... 13-58 NOTE I ORGANISATION AND NATURE OF OPERATIONS............................................................................... 7-8 NOTE 2 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT RELEVANT ACCOUNTING POLICIES.......................................................................................................................... 9-33 NOTE 3 SEGMENT INFORMATION....................................................................................................................... 34-37 NOTE 4 CASH AND CASH EQUIVALENTS........................................................................................................... 38 NOTE 5 TRADE RECEIVABLES.............................................................................................................................. 38-40 NOTE 6 TRANSACTIONS AND BALANCES WITH SHAREHOLDERS AND OTHER RELATED PARTIES.................................................................................................................................... 40-41 NOTE 7 INVENTORIES............................................................................................................................................ 42 NOTE 8 OTHER CURRENT ASSETS....................................................................................................................... 42 NOTE 9 PROPERTY AND EQUIPMENT ................................................................................................................. 43-44 NOTE IO INTANGIBLE ASSETS............................................................................................................................... 45-47 NOTE 11 TRADE PAYABLES.................................................................................................................................... 47-48 NOTE 12 TAXATION ON INCOME........................................................................................................................... 48-50 NOTE 13 OTHER CURRENT LIABILITIES.............................................................................................................. 51 NOTE 14 OTHER NON-CURRENT LIABILITIES..................................................................................................... 51-52 NOTE 15 SHARE CAPITAL........................................................................................................................................ 52 NOTE 16 COST OF SERVICES................................................................................................................................... 53 NOTE 17 GENERAL AND ADMINISTRATIVE EXPENSES................................................................................... 53 NOTE 18 SELLING AND MARKETING EXPENSES............................................................................................... 54 NOTE 19 FINANCIAL INCOME AND EXPENSES................................................................................................... 54 NOTE 20 COMMITMENTS AND CONTINGENCIES............................................................................................... 54-58 NOTE 21 EMPLOYEE BENEFIT EXPENSES............................................................................................................ 58 NOTE 22 DEPRECIATION AND AMORTISATION EXPENSES............................................................................. 58 NOTE 23 EVENT AFTER BALANCE SHEET DATE................................................................................................ 58 COMPANY-ONLY FINANCIAL STATEMENTS.............................................................. 59-65 COMPANY-ONLY BALANCE SHEETS................................................................ 60 COMPANY-ONLY STATEMENTS OF INCOME.................................................................. 61 NOTES TO THE COMPANY-ONLY FINANCIAL STATEMENTS ................................ 62-65 NOTE 24 GENERAL. .............................................................................................................. 62 NOTE 25 INTANGIBLE ASSETS ................................................................................................. 62 NOTE 26 FINANCIAL ASSETS .................................................................................................. 63 NOTE 27 RECEIVABLES ......................................................................................................... 63 NOTE 28 SHAREHOLDERS' EQUITY ......................................................................................... 64 NOTE 29 NON-CURRENT LIABILITIES ...................................................................................... 64 PricC\\tlterhouseC'oo~r.; At't'OUntants N.V. For identification putpo.<'.('S on!) Jill pwc FINTUR HOLDINGS B.V. CONTENTS NOTE 30 CURRENT LIABILITIES .............................................................................................. 64 NOTE 31 EMPLOYEES ........................................................................................................................................... 64 NOTE 32 REMUNERATION OF THE BOARD ...................................................................................................... 65 NOTE 33 RELATED PARTIES ................................................................................................................................ 65 OTHER INFORMATION.................................................................................... 66 •PROFIT APPROPRIATION ACCCORDING TO THE ARTICLES OF ASSOCIATION......... 67 •PROPOSED PROFIT APPROPRIATION................................................................. 67 • DIVIDENDS.................................................................................................................................... 67 • EVENT AFTER BALANCE SHEET DATE.................................................................... 67 •AUDITOR'S REPORT....................................................................................... 68 PricC'\\':tlC'rl1ouscCoopcr.: 1kt:oun1nnlS N. \'. 2 For idenlilirotion purposes only ~ pwc FINTUR HOLDINGS B.V. REPORT OF THE BOARD OF DIRECTORS REPORT OF THE BOARD OF DIRECTORS General In accordance with the Articles of Association of the Company, the Board of Directors of Fintur Holdings B.V. ("the Company") hereby submits the Annual Accounts for the year ended 31 December 2011. Activities The major activity of the Company during the financial year was running mobile telecom operations through participation and investment in various businesses in telecommunications (GSM) in several countries in the so-called "Eurasia region". As at year-end 2011 management has no plans to change the activities of the Company and holds interests in the following GSM businesses: Kcell in Kazakhstan, Azercell (including internet service provider Azeronline) in Azerbaijan, Geocell in Georgia and Moldcell in Moldova. Developments during the year Results During the financial year 2011: Revenues increased by 9.3% to USO 1,957.9 million (2010: USO 1,791.7 million). The increase is mainly driven by Kcell in Kazakhstan. The Company made a (consolidated) profit to the amount of USO 369,615,000 (20 I 0: USO 302,320,000). This profit resulted mainly from the Company's paiticipation in the GSM business in Kazakhstan and in Azerbaijan. During 2011 the Company's GSM activities in all countries realised a profit. The amount of distributable reserves is USO I, 116 million as at 31 December 20 I I. As at 31 December 2011, Fintur has a sound financial position evidenced by the fact that shareholders' equity amounts to 63% of total assets, which is higher than as in the previous financial year (59%). In Georgia, due to continued regulatory pressure in 2011, introduction of 10% excise tax in late 2010 and unhealthy competition situation in the market, Geocell recorded negative growth in revenue of9%. On 1 July 2011, the Ministry of Communication and Information Of Kazakhstan extended Kcell's general licence for an unlimited period of time. In December 20 I I, Azercell purchased the right to use frequency ranges required to render 3G services in Azerbaijan. In Moldova, political instability continued due to unce1tainty in presidential elections. Cash flows During 20 I I the GSM activities of the Company rendered positive cash flows. The GSM activities of the Company are showing a strong growth.