Emirates Integrated Telecommunications Company PJSC and Its Subsidiaries Consolidated Financial Statements For The Year Ended 31 December 2019

Emirates Integrated Telecommunications
Company PJSC and its subsidiaries
Consolidated financial statements

for the year ended 31 December 2019
Emirates Integrated Telecommunications Company PJSC and its subsidiaries
Consolidated financial statements for the year ended 31 December 2019
Pages
Independent auditors’ report 1–8
Consolidated statement of financial position 9
Consolidated statement of comprehensive income 10
Consolidated statement of changes in equity 11
Consolidated statement of cash flows 12
Notes to the consolidated financial statements 13 – 73

Deloitte & Touche (M.E.)
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United Arab Emirates
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www.deloitte.com
August 17th, 2016
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF

EMIRATES INTEGRATED TELECOMMUNICATIONS COMPANY PJSC
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Opinion
We have audited the consolidated financial statements of Emirates Integrated Telecommunications

Company PJSC (“EITC” or “the Company”) and its subsidiaries (collectively referred to as “the Group”),
which comprise the consolidated statement of financial position as at 31 December 2019, and the
consolidated statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and a summary of significant accounting
policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at 31 December 2019, and its financial performance
and its cash flows for the year then ended in accordance with International Financial Reporting Standards
(IFRSs).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report. We are independent of the Group in
accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code) together with the other ethical requirements that are relevant to
our audit of the Group’s consolidated financial statements in the United Arab Emirates, and we have
fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the consolidated financial statements of the current year. We have communicated the key audit
matters to the Audit Committee but they are not a comprehensive reflection of all matters that were
identified by our audit and that were discussed with the Audit Committee. On the following pages, we
have described the key audit matters we identified and have included a summary of the audit procedures
we performed to address those matters.
The key audit matters were addressed in the context of our audit of the consolidated financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Akbar Ahmad (1141), Anis Sadek (521), Cynthia Corby (995), Georges Najem (809), Mohammad Jallad (1164), Mohammad
Khamees Al Tah (717), Musa Ramahi (872), Mutasem M. Dajani (726), Obada Alkowatly (1056), Rama Padmanabha Acharya (701)
and Samir Madbak (386) are registered practicing auditors with the UAE Ministry of Economy.
EMIRATES INTEGRATED TELECOMMUNICATIONS COMPANY PJSC (continued)
Key audit matter How our audit addressed the Key audit matter
Accuracy and completeness of revenue
recognised and related IT systems
The Group reported revenue of AED 12.6 billion Our audit procedures included a combination of
from telecommunication and related activities. controls testing, data analysis and other
substantive procedures included, but were not
We focused on this area of the audit as there is an limited to, the following:
inherent risk related to the accuracy and
completeness of revenue recognized given the  obtaining an understanding of the significant
complexity of the systems and changing mix of revenue processes including performance of
business products and services, including a variety an end to end walkthrough of the revenue
of plans available for consumer and enterprise process and identifying the relevant controls
customers, tariff structures, roaming and (including Information Technology (“IT”)
international hubbing (‘wholesale’) agreements, systems, interfaces, revenue assurance and
site sharing agreements, incentive programmes reports);
and discounts.  testing the design and implementation as well
as the operating effectiveness of the relevant
Due to the estimates made, complexities involved controls;
and judgements applied in the revenue process  involving our internal IT specialists to test IT
and the degree of complexity of IT systems and general controls, system interfaces,
processes used, we have considered this matter as data/information reporting and application
a key audit matter. specific controls surrounding relevant revenue
systems;
The Group’s accounting policies relating to  reviewing significant new contracts on sample
revenue recognition are presented in note 2 and basis and the regulatory pronouncements, the
details about the Group’s revenue are disclosed in accounting treatments adopted and testing the
note 34 to the consolidated financial statements. related revenues recognised during the year;
 performing data analysis and substantive
analytical reviews of significant revenue
streams;
 reviewing key reconciliations performed by
the Revenue Assurance team;
 performing specific procedures to test the
accuracy and completeness of adjustments
relating to grossing up certain revenue and
costs;
 performing procedures to determine if the
revenue recognition criteria adopted for all
major revenue streams is appropriate and in
accordance with IFRSs; and
 assessing the disclosures in the consolidated
financial statements relating to revenue
against the requirements of IFRSs.
Federal royalty computation
The federal royalty is a significant charge levied In responding to this risk, our audit procedures
against regulated revenues of the Group and included, but were not limited to, the following:
against operating profits, based on fixed
percentages, as disclosed in Note 2.3 to the  obtaining an understanding of the process
consolidated financial statements. used by management to determine the federal
royalty charge and related accrual.
The federal royalty charge for the year is AED 2  testing the design and implementation of the
billion for the year with an accrual of AED 2.1 relevant controls over the calculation of the
billion as at 31 December 2019. federal royalty charge;
 holding meetings with management to discuss
We focused on this area of the audit as the royalty the federal royalty calculation and inspecting
calculations are subject to significant judgements, correspondence from the MOF relating to this
interpretations and assumptions in respect of the matter;
definition of regulated items, the determination of  assessing the judgements applied in the
certain allowable deductions and allocated costs calculation of the federal royalty for the
and the treatment of royalties on site sharing current year against the guidelines provided
transactions. by the MOF and the abovementioned
correspondence;
These are also subject to change from time to time  evaluating the classification of regulated and
as per the guidelines provided by the United Arab non-regulated revenues in the calculation of
Emirates Ministry of Finance (“the MoF”) are the federal royalty on the telecommunication
amended or as clarifications are received from the operations;
MoF.  testing the allocation of indirect costs on
nonregulated activities based on clarifications
Accordingly, the computation of the federal received from the MOF;
royalty for the year ended 31 December 2019 is
 evaluating the exclusion of items which were
considered to be a key audit matter. not included in the calculation of the federal
royalty against the guidelines and the
The critical accounting estimates made and clarifications received from the MOF;
judgements applied by management are disclosed
 reperforming the arithmetical accuracy of the
in note 2.3 and further details about the federal
calculation of the federal royalty for the year;
royalty are disclosed in note 26 to the
and
consolidated financial statements
financial statements relating to revenue
Carrying value of goodwill
As at 31 December 2019, the carrying value of We tested the goodwill impairment models and
goodwill amounted to AED 549 million, or 3.26% the key assumptions used by management with
of total assets as disclosed in Note 8 the the involvement of our valuation specialists. Our
consolidated financial statements. audit procedures included, but were not limited to,
the following:
In accordance with IAS 36 Impairment of Assets,
an entity is required to test goodwill acquired in a  understanding the business process for the
business combination for impairment at least impairment assessment, identifying the
annually irrespective of whether there is any relevant internal controls and testing their
indication of impairment. design, implementation and operating
effectiveness of controls over the impairment
An impairment is recognised on the consolidated assessment process, including indicators of
statement of financial position when the impairment;
recoverable amount is less than the net carrying  evaluating whether the cash flows in the
amount in accordance with IAS 36, as described models used by management to calculate the
in Note 3 to the consolidated financial statements. recoverable value are in accordance with IAS
The determination of the recoverable amount is 36 Impairment of Assets;
mainly based on discounted future cash flows.  obtaining and analysing the approved
business plans for each such asset (or CGU,
We considered the impairment of goodwill to be a as applicable) to assess accuracy of the
key audit matter, given the method for computations and the overall reasonableness
determining the recoverable amount and the of key assumptions;
significance of the amount in the Group’s  comparing actual historical cash flow results
consolidated financial statements. with previous forecasts to assess forecasting
accuracy;
In addition, the recoverable amounts are based on  assessing the methodology used by the Group
the use of important assumptions, estimates or to estimate the Weighted Average Cost of
assessments made by management, in particular Capital (WACC) and benchmarking that with
future cash flow projections, the estimate of the discount rates used by other similar
discount rates and long-term growth rates. businesses external sector related guidelines;
 benchmarking assumptions on long term
growth rates of local GDP and long term
inflation expectations with external sources of
data published by global monetary agencies;
 benchmarking the values with market
multiples where applicable;
 performing sensitivity analysis on the key
assumptions used by management to
understand the extent to which these
assumptions need to be adjusted before
resulting in additional impairment loss; and
 assessing the disclosure in the consolidated
financial statements relating to goodwill
Adoption of IFRS 16 Leases
The Group adopted IFRS 16 Leases with effect In responding to this risk, our audit procedures
from 1 January 2019, which resulted in changes included, but were not limited to, the following:
to the accounting policies. The Group elected to
apply the modified retrospective approach as a  obtaining an understanding of the Group’s
transition approach, by not restating adoption of IFRS 16 and identifying the
comparatives but adjusting equity. internal controls including entity level
controls adopted by the Group for the
This change in accounting policy results in right- accounting, processes and systems under the
of-use assets and lease liabilities being new accounting standard;
recognised in the statement of financial position.  assessing the design and implementation of
The incremental borrowing rate (“IBR”) method key controls pertaining to the application of
has been applied where the implicit rate in a IFRS 16;
lease is not readily determinable.  assessing the appropriateness of the discount
rates applied in determining lease liabilities;
The adoption of IFRS 16 has resulted in changes  verifying the accuracy of the underlying lease
to processes, systems and controls. Because of data by agreeing a representative sample of
the number of judgements which have been leases to original contracts or other supporting
applied and the estimates made in determining information and checking the integrity and
the impact of IFSR 16, this is considered a key mechanical accuracy of the IFRS 16
audit matter. calculations for each lease sampled through
recalculation of the expected IFRS 16
The transitional impact of IFRS 16 has been adjustment;
disclosed in Note 2 to the consolidated financial  we considered the completeness of the lease
statements. data by testing the reconciliation of the
Group’s lease liability to operating lease
commitments disclosed in the 2018
consolidated financial statements and by
considering if we had knowledge of any other
contracts which may contain a lease; and
financial statements pertaining to leases,
including disclosures relating to the transition
to IFRS 16, were in compliance with IFRSs.
Other Matter
The consolidated financial statements of the Group for the year ended 31 December 2018 were audited by
another auditor, who expressed an unmodified opinion on those statements on 20 February 2019.
Other Information
Management is responsible for the other information. The other information comprises the Chairman’s
message which we obtained prior to the date of this auditor’s report, and the Group’s Annual Report,
which is expected to be made available to us after that date. The other information does not include the
consolidated financial statements and our auditor’s report thereon.
Other Information (continued)
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance or conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
When we will read the Group’s Annual Report, if we conclude that there is a material misstatement
therein, we will be required to communicate the matter to those charged with governance and consider
whether a reportable irregularity exists in terms of the auditing standards, which must be reported.
Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRSs and the requirements of the UAE Federal Law No. (2) of 2015 and
the applicable provisions of the articles of association of the Company, and for such internal control as the
management determines is necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.
Auditor’s responsibilities for the audit of the consolidated financial statements (continued)
As part of an audit in accordance with ISA’s, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
 Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis of accounting and
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors’ report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
 Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Consolidated statement of comprehensive income

For the year ended 31 December
2019 2018
Notes AED 000 AED 000
Revenue 34 12,587,958 13,414,057
Operating expenses 25 (8,629,821) (9,406,225)
Provision for impairment of trade receivables and
contract assets (net of recoveries) (210,610) (244,524)
Other income 2,860 6,409
Operating profit before federal royalty 3,750,387 3,769,717
Federal royalty 26 (2,029,008) (2,078,812)
Operating profit 1,721,379 1,690,905
Finance income 27 124,052 145,456
Finance costs 27 (124,990) (93,583)
Share of profit of investments accounted for using
equity method 9 10,513 10,214
Profit for the year 1,730,954 1,752,992
Other comprehensive (loss)/income

Items that may be re‐classified subsequently
to profit or loss
Fair value changes on cash flow hedge 24 (10,448) (2,626)
Items that will not be re‐classified to profit or loss
Actuarial gain on defined benefit obligations 19 3,028 5,313
Other comprehensive (loss)/income for the year (7,420) 2,687
Total comprehensive income for the year attributable
entirely to shareholders of the Company 1,723,534 1,755,679
Basic and diluted earnings per share (AED) 28 0.38 0.39
The notes on pages 13 to 73 form an integral part of these consolidated financial statements. (10)
Consolidated statement of changes in equity
Other
Share Share reserves, Retained
capital premium (Note 24) earnings Total
AED 000 AED 000 AED 000 AED 000 AED 000
Adjusted balance at 1 January

2018 (Post impact of adoption of
IFRS 15) 4,532,906 232,332 2,426,559 1,150,779 8,342,576
Profit for the year - - - 1,752,992 1,752,992
Other comprehensive
(loss)/income - - (2,626) 5,313 2,687
Total comprehensive income - - (2,626) 1,758,305 1,755,679
Transfer to statutory reserve - - 175,299 (175,299) -

Interim cash dividend** - - 589,278 (589,278) -
Cash dividends paid - - (1,586,517) - (1,586,517)
At 31 December 2018 4,532,906 232,332 1,601,993 2,144,507 8,511,738
At 1 January 2019 4,532,906 232,332 1,601,993 2,144,507 8,511,738

Profit for the year - - - 1,730,954 1,730,954
Other comprehensive
(loss)/income - - (10,448) 3,028 (7,420)
Total comprehensive income - - (10,448) 1,733,982 1,723,534
-
Transfer to statutory reserve - - 173,095 (173,095) -
Final cash dividend* - - 997,239 (997,239) -
Interim cash dividend** - - 589,278 (589,278) -
Cash dividends paid - - (1,586,517) - (1,586,517)
At 31 December 2019 4,532,906 232,332 1,764,640 2,118,877 8,648,755
*For the year 2018, a final cash dividend of AED 0.22 per share amounting to AED 997,239 thousand was
proposed and paid.
**An interim cash dividend of AED 0.13 per share (2018: AED 0.13 per share) amounting to AED 589,278
thousand (2018: AED 589,278 thousand) was proposed and paid.
For the year 2019, a final cash dividend of AED 0.21 per share amounting to AED 951,910 thousand is
proposed.
Consolidated statement of cash flows
For the year ended 31 December
2019 2018
Notes AED 000 AED 000
Cash flows from operating activities
Profit for the year 1,730,954 1,752,992

Adjustments for:
Depreciation and impairment of property, plant and
equipment 6 1,387,189 1,472,046
Depreciation of right-of-use assets 7 319,818 -
Amortisation and impairment of intangible assets 8 226,129 249,370
Provision for employees’ end of service benefits 19 35,283 35,309
Provision for impairment of contract assets 12 2,440 13,560
Provision for impairment of trade receivables 13 215,414 232,237
Finance income 27 (124,052) (145,456)
Finance costs 27 124,990 93,583
Adjustment for change in discount/inflation rates 20 259 (1,795)
Unwinding of discount on asset retirement obligations 20 4,806 3,260
Share of profit of investments accounted for using
equity method 9 (10,513) (10,214)
Changes in working capital 29 1,463,163 1,413,238
Cash generated from operations 5,375,880 5,108,130
Royalty paid 26 (2,069,210) (2,027,785)
Payment of employees’ end of service benefits 19 (34,647) (21,835)
Net cash generated from operating activities 3,272,023 3,058,510
Cash flows from investing activities

Purchase of property, plant and equipment (1,186,639) (817,963)
Purchase of intangible assets (164,640) (242,316)
Payment for additional investments accounted for using
equity method 9 (70,256) (35,879)
Interest received 157,522 165,839
Margin on guarantees released 1,355 57,653
Term deposits released (net) 1,051,299 1,025,000
Net cash (used in)/from investing activities (211,359) 152,334
Cash flows from financing activities

Proceeds from borrowings - 21,306
Repayment of lease liabilities 17 (128,448) -
Repayment of borrowings 18 (1,461,318) (1,461,318)
Dividend paid 24 (1,586,517) (1,586,517)
Interest paid on borrowings and lease liabilities (116,422) (85,696)
Net cash used in financing activities (3,292,705) (3,112,225)
Net (decrease)/increase in cash and cash equivalents (232,041) 98,619
Cash and cash equivalents at 1 January 496,698 398,079
Cash and cash equivalents at 31 December 16 264,657 496,698
Notes to the consolidated financial statements

for the year ended 31 December 2019
1 General information
Emirates Integrated Telecommunications Company PJSC the (“Company”) is a public joint stock company
with limited liability. The Company was incorporated according to Ministerial Resolution No. 479 of 2005
issued on 28 December 2005. The Company is registered in the commercial register under No. 77967. The
principal address of the Company is P.O Box 502666 Dubai, United Arab Emirates (UAE). These
consolidated financial statements for the year ended 31 December 2019 include the financial statements of
the Company and its subsidiaries (together “the Group”).
The Company’s principal objective is to provide fixed, mobile, wholesale, broadcasting and associated
telecommunication services in the UAE.
The Company has either directly or indirectly the following subsidiaries:

Country of
Subsidiaries Principal activities Shareholding incorporation
2019 2018
EITC Investment Holdings Holding investments in new business 100% 100% UAE
Limited i.e content, media, data and value
added services for
telecommunications
Telco Operations FZ-LLC Outsourcing services 100% 100% UAE
Smart Dubai Platform Project Software development, IT 100% 100% UAE

Company LLC infrastructure, public networking and
computer systems housing services
EITC Singapore PTE. LTD. Telecommunications resellers/third 100% 100% Singapore
party telecommunications providers
(including value added network
services)
During the year, the Group signed a Shareholder Agreement (“SHA”) with Bahrain Telecommunications
Company (B.S.C.) to form a limited liability private company (“investee company”) with an estimated capital
commitment of AED 31 million, which will be paid in three tranches over a period of 24 months. The investee
company has been incorporated with the name of Advanced Regional Communication Solutions Holding
Limited in UAE. The principal activity of the investee company will be provision of connectivity and data
centre services.
2 Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with International
Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS
IC) applicable to companies reporting under IFRS. The consolidated financial statements comply with IFRS as
issued by the International Accounting Standards Board (IASB). These consolidated financial statements have
been prepared under the historical cost convention except for a financial asset at fair value through other
comprehensive income (FVOCI) and derivative financial instruments that have been measured at fair value.
The preparation of consolidated financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the
Group’s accounting policies.
(13)

for the year ended 31 December 2019 (continued)
2 Basis of preparation (continued)
(i) Functional and presentation currency
The individual financial statements of each of the Group’s subsidiaries and associates are presented in the
currency of the primary economic environment in which they operate (its functional currency). For the
purpose of these consolidated financial statements, the results, financial position and cash flows of each
company are expressed in UAE Dirhams, which is the functional currency of the Company, and the
presentation currency of these consolidated financial statements.
(ii) Basis of consolidation
A subsidiary is an entity controlled by the Company. The financial statements of a subsidiary are included
in the consolidated financial information from the date that control commences until the date that control
ceases.
2.1 New standards, amendments and interpretations
(a) Amendment to standards and interpretations issued and effective during the financial year beginning
1 January 2019
 IFRS 16, ‘Leases’ (effective from 1 January 2019).
IFRS 16 - Leases was issued in January 2016 and it replaces IAS 17 ‘Leases’, IFRIC 4 ‘Determining
whether an arrangement contains a lease’, SIC-15 ‘Operating leases-incentives’ and SIC-27 ‘Evaluating
the substance of transactions involving the legal form of a Lease’.
IFRS 16 is effective for annual periods commencing on or after 1 January 2019. It stipulates that all leases
and the associated contractual rights and obligations should generally be recognize in the Group’s financial
position, unless the term is 12 months or less or the lease for low value asset. Thus, the classification
required under IAS 17 “Leases” into operating or finance leases is eliminated for Lessees. For each lease,
the lessee recognizes a liability for future lease obligations. Correspondingly, a right to use the leased asset
is capitalized, which is generally equivalent to the present value of the future lease payments plus directly
attributable costs and which is amortized over the right-of-use asset’s useful life.
The Group has adopted IFRS 16 using the modified retrospective transition approach as of 1 January 2019
and therefore the comparatives have not been restated and continues to be reported under IAS 17 and IFRIC
4. All right-of-use assets were measured at the amount of the lease liability on adoption (adjusted for prepaid
or accrued lease expenses). Each lease payment is allocated between the liability and finance cost. The
finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over
the shorter of the asset's useful life and the lease term on a straight-line basis. IFRS 16 transition disclosures
also requires the Group to present the reconciliation of the off-balance sheet operating lease commitments
as of 31 December 2018 with lease liabilities as of 1 January 2019, which is given below:
(14)

2.1 New standards, amendments and interpretations (continued)
AED 000
Operating lease commitments disclosed as of 31 December 2018 1,571,439
Less: contract assessed as service agreements (343,028)

Add: Adjustments as a result of changes in contracts, lease terms and payments (net) 908,663
Lease liability recognised as at 1 January 2019 2,137,074
Of which are:
Current lease liabilities 287,475
Non-current lease liabilities 1,849,599
2,137,074
Right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any
prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 31 December
2018. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets
at the date of initial application.
The change in accounting policy affected the following items in the statement of financial position on
1 January 2019:
 Right-of-use assets – increase by AED 2,109 million

 Lease liabilities – increase by AED 2,137 million
Based on the approach adopted by the Group on adoption of IFRS 16 Leases, it did not result in any impact
on retained earnings on 1 January 2019.
The detailed accounting policy, the key estimates and judgements adopted for IFRS 16 by the Group are
disclosed in Notes 3.1 and Notes 2.3 respectively.
(15)

The following tables summarise the impacts of adopting IFRS 16 on the Group’s consolidated statement of
financial position and consolidated statement of comprehensive income for the year ended 31 December
2019:
(i) Impact on consolidated statement of financial position
Amounts
As reported 31 without adoption
December 2019 Adjustments of IFRS 16
AED 000 AED 000 AED 000
Non-current assets
Right-of-use assets 1,699,651 (1,699,651) -
Other non-current assets 9,288,875 - 9,288,875
Total non-current assets 10,988,526 (1,699,651) 9,288,875
Current assets
Trade and other receivables 1,870,556 - 1,870,556
Other current assets 3,967,901 - 3,967,901
Total current assets 5,838,457 - 5,838,457
Total assets 16,826,983 (1,699,651) 15,127,332
Equity
Share capital and share premium 4,765,238 - 4,765,238
Other reserves, net of treasury shares 1,764,640 - 1,764,640
Retained earnings 2,118,877 48,016 2,166,893
Total equity 8,648,755 48,016 8,696,771
Non-current liabilities
Lease liabilities 1,396,800 (1,396,800) -
Other non-current liabilities 621,667 - 621,667
Total non-current liabilities 2,018,467 (1,396,800) 621,667
Current liabilities
Lease liabilities 460,005 (460,005) -
Trade and other payables 4,600,332 109,138 4,709,470
Other current liabilities 1,099,424 - 1,099,424
Current liabilities 6,159,761 (350,867) 5,808,894
8,178,228 (1,747,667) 6,430,561
Total equity and liabilities 16,826,983 (1,699,651) 15,127,332
(16)

(ii) Impact on consolidated statement of comprehensive income for the year ended 31 December 2019
Amounts
without
As reported 31 adoption of
December 2019 Adjustments IFRS 16
AED 000 AED 000 AED 000
Revenue 12,587,958 - 12,587,958
Operating expenses (8,629,821) (9,947) (8,639,768)

Provision for impairment of trade receivables
and contract assets (net of recoveries) (210,610) - (210,610)
Other income 2,860 - 2,860
Operating profit before federal royalty 3,750,387 (9,947) 3,740,440
Royalty (2,029,008) (20,578) (2,049,586)
Operating profit 1,721,379 (30,525) 1,690,854
Finance income 124,052 - 124,052
Finance costs (124,990) 78,541 (46,449)
Share of profit of investments accounted for
using equity method 10,513 - 10,513
Profit for the year 1,730,954 48,016 1,778,970
Other comprehensive loss (7,420) - (7,420)

Total comprehensive income for the year
attributable entirely to shareholders of
the Company 1,723,534 48,016 1,771,550
Basic and diluted earnings per share (AED) 0.38 0.39
(17)

(b) Other new and amended IFRS applied with no material effect
The following improvements and amendments have been adopted in these consolidated financial
statements. The application of these revised IFRSs has not had any material impact on the amounts
reported for the current and prior periods but may affect the accounting for future transactions or
arrangements.
 Annual Improvements to IFRSs 2015-2017 Cycle Amendments to IFRS 3 Business Combinations,
IAS 12 Income Taxes and IAS 23 Borrowing Costs; and
 Amendments to IAS 19 Employee Benefits Plan Amendment, Curtailment or Settlement
(c) New standards and amendments issued but not yet effective
Effective for annual periods beginning after 1 January 2020
 Amendments to IAS 1 and IAS 8 regarding the definition of ‘material’;

 Amendments to IFRS 3 to clarify the definition of a business ;
 IFRS 17: Insurance Contracts;
 Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates
and Joint Ventures (2011) relating to the treatment of the sale or contribution of assets from and
investor to its associate or joint venture; and
 Amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12,
IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32 to update those pronouncements with regard to references
to and quotes from the framework or to indicate where they refer to a different version of the
Conceptual Framework.
The above stated new standards and amendments are not expected to have any significant impact on
consolidated financial statements of the Group.
There are no other applicable new standards and amendments to published standards or IFRIC
interpretations that have been issued that would be expected to have a material impact on the consolidated
financial statements of the Group.
2.2 Earnings per share
The Group presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit attributable to the ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the year. Diluted EPS is calculated by adjusting the weighted
average number of equity shares outstanding to assume conversion of all dilutive potential ordinary shares.
The Group does not have any dilutive potential ordinary shares.
(18)

2.3 Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The Group performs sensitivity analysis where
applicable. The estimates and assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year are addressed below:
(i) Provision for expected credit losses of trade receivables and contract assets
The Group recognises a loss allowance for expected credit losses (ECL) on its trade receivables and contract
assets. The amount of expected credit losses is updated at the end of each reporting period to reflect changes
in credit risk since initial recognition of the respective financial asset.
The Group recognises lifetime ECL for trade receivables and contract assets, using the simplified approach.
The expected credit losses on these financial assets are estimated using a provision matrix based on the
Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general
economic conditions and an assessment of both the current as well as the forecast direction of conditions at
the reporting date.
For financial assets other than trade receivables and contract assets, the Group will calculate ECL using the
general approach (Note 2.3(ii)).
(ii) Provision for impairment of other financial assets
For all other financial assets, the Group recognises lifetime ECL when there has been a significant increase
in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has
not increased significantly since initial recognition, the Group measures the loss allowance for that financial
instrument at an amount equal to 12 months ECL. The assessment of whether lifetime ECL should be
recognised is based on significant increases in the likelihood or risk of a default occurring since initial
recognition instead of on evidence of a financial asset being credit-impaired at the end of the reporting
period or an actual default occurring.
(iii) Impairment of goodwill
The Group tests goodwill for impairment on an annual basis, in accordance with the accounting policy. The
recoverable amount of the cash-generating units has been determined based on value-in-use calculations.
The cash flows are derived from the budget for the next five years and do not include restructuring activities
that the Group is not yet committed to or significant future investments that will enhance the asset base of
the cash generating units being tested, but do include the Group’s expectations of future capital expenditure
necessary to maintain the Group’s network existing operations.
(19)

2.3 Critical accounting estimates and judgements (continued)
(iii) Impairment of goodwill (continued)
These calculations are performed internally by the Group and require the use of estimates and assumptions.
The input factors most sensitive to change are management estimates of future cash flows based on budgets,
growth rates and discount rate. Further detail on these assumptions has been disclosed in Note 8.. No
impairment is recognised on the goodwill in the current and the prior year.
(iv) Useful lives of property, plant and equipment
Property, plant and equipment represent a significant proportion of the Group’s asset base. Therefore, the
judgements made in determining their estimated useful lives and residual values are critical to the Group’s
financial position and performance. Useful lives and residual values are reviewed on an annual basis with
the effects of any changes in estimates accounted for on a prospective basis.
In determining residual values, the Group uses historical sales and management’s best estimate based on
market prices of similar items. Useful lives of property, plant and equipment are based on management
estimates and take into account historical experience with similar assets, the expected usage of the asset,
physical wear and tear, technical or commercial obsolescence and legal restrictions on the use of the assets.
The useful lives of the property, plant and equipment are provided in Note 3.3.
(v) Asset retirement obligations
The Group exercises judgement in determining the expected cash outflows related to its asset retirement
obligations. Judgement is necessary in determining the timing of outflow as well as quantifying the possible
range of the financial settlements that may occur.
The present value of the Group’s provision is based on management’s best estimate of the future cash
outflows required to settle the obligations, discounted using appropriate discount rate. Additional
information on this provision is disclosed in Note 20.
(vi) Federal royalty
The computation of Federal Royalty in accordance with the Cabinet of Ministers of UAE decision No.
320/15/23 of 2012 and various guidelines issued by the UAE Ministry of Finance (“the MoF”) and
subsequent clarification letters require use of certain judgements, interpretations and assumptions. These
mainly relate to the segregation of items between regulated and other activities and items which the Group
judges as not subject to Federal royalty or which may be set off against revenue which are subject to Federal
royalty, and allocation of costs between regulated and non-regulated results.
(20)

2.3 Critical accounting estimates and judgements (continued)
(vii) Allocation of the transaction price
Products with multiple deliverables that have value to customers on a standalone basis are defined as
multiple element arrangements. The transaction price for these contracts must be allocated to the
performance obligations on a relative stand-alone selling price basis.
Management estimates the stand-alone selling price at contract inception based on observable prices of the
type of goods to be provided and the services rendered in similar circumstances to similar customers. If a
discount is granted, it is allocated to both performance obligations based on their relative stand-alone selling
prices. Where the stand-alone selling price are not directly observable, they are estimated based on expected
cost plus margin.
(viii) Determining the lease term

In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods
after termination options) are only included in the lease term if the lease is reasonably certain to be extended
(or not terminated).
(ix) Discounting of lease payments

The lease payments are discounted using the Group’s incremental borrowing rate (“IBR”). For calculation
of IBR, the Group has taken the 12 months LIBOR as on the transition date and the rate is adjusted for
Group’s specific risk, term risk and underlying asset risk.
(21)

3 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are
set out below.
Changes in significant accounting policies
The same accounting policies and methods of computation have been followed in these consolidated
financial statements as compared with the Group’s consolidated financial statements for the year ended
31 December 2018, except for the adoption of new and amended standards as set out below:
New standard became applicable for the current reporting year and the Group had to change its accounting
policies and make relevant adjustments as a result of adopting the following standard:
 IFRS 16 Leases
3.1 Leases
Below given policy is applied to all active contracts as of 1 January 2019, contracts entered into, or changed,
after 1 January 2019.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for the Group for
a period of time in exchange for consideration. To assess whether a contract conveys the right to control
the use of an identified asset, the Group assesses whether:
 the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and
should be physically distinct or represent substantially all of the capacity of a physically distinct asset.
If the supplier has a substantive substitution right, then the asset is not identified;
 the Group has the right to obtain substantially all of the economic benefits from use of the asset
throughout the period of use; and
 the Group has the right to direct the use of the asset. The Group has this right when it has the decision-
making rights that are most relevant to changing how and for what purpose the asset is used. In rare
cases where the decision about how and for what purpose the asset is used is predetermined, the Group
has the right to direct the use of the asset if either:
- the Group has the right to operate the asset; or
- the Group designed the asset in a way that predetermines how and for what purpose it will be
used.
At inception or on reassessment of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices.
However, where the contract is not separable into lease and non-lease component then the Group has elected
not to separate non-lease components and account for the lease and non-lease components as a single lease
component.
(22)

3 Summary of significant accounting policies (continued)

3.1 Leases (continued)
Practical expedient
In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by
the standard:
 the use of a single discount rate to a portfolio of leases with reasonably similar characteristics;
 reliance on previous assessments on whether leases are onerous; and
 use of hindsight in determining the lease term where the contract contains options to extend or
terminate the lease.
The Group assesses whether contract is or contains a lease, at inception of the contract. The Group
recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in
which it is the lessee.
Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily
determined, the Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
 fixed lease payments (including in-substance fixed payments), less any lease incentives; and
 payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to
terminate the lease.
The lease liability is presented as a separate line item in the statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the
lease liability (using effective interest method) and by reducing the carrying amount to reflect the lease
payments made.
The Group re-measures the lease liability (and makes a corresponding adjustment to the related right-of-
use asset) whenever:
 the lease term has changed or there is a change in the assessment of exercise of a purchase option, in
which case the lease liability is re-measured by discounting the revised lease payments using a revised
discount rate;
 the lease payments change due to changes in an index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease liability is re-measured by discounting the revised
lease payments using the initial discount rate (unless the lease payments change is due to a change in
a floating interest rate, in which case a revise discount rate is used); and
 a lease contract is modified and the lease modification is not accounted for as a separate lease, in which
case the lease liability is re-measured by discounting the revised lease payments using a revised
discount rate.
(23)

3.1 Leases (continued)
Right-of-use assets
The right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying
asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use of asset reflects
that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the
useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use of assets are presented as a separate line in the statement of financial position.
Right-of-use assets are assessed for impairment annually as per non-financial assets impairment policy
given in Note 3.17.2
Variable rents that do not depend on an index or rate are not included in the measurement of the lease
liability and the right-of-use asset. The related payments are recognised as an expense in the period in
which the event or condition that triggers those payments occurs and are included in the line ‘Other
operating expenses’ in the statement of comprehensive income.
Leases (policy applicable until 31 December 2018)
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received from
the lessor) are charged to the consolidated statement of comprehensive income on a straight-line basis over
the period of the lease.
Leases of property, plant and equipment where the Group has substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at the leases’ commencement at
the lower of the fair value of the leased property and the present value of the minimum lease payments.
Each lease payment is allocated between the liability and finance charges. The corresponding rental
obligations, net of finance charges, are included in other long term payables. The interest element of the
finance cost is charged to consolidated statement of comprehensive income over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. The
property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful
life of the asset and the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group
as lessee are classified as operating leases. Payments made under operating leases (net of any incentives
received from the lessor) are charged to consolidated statement of comprehensive income on a straight-
line basis over the period of the lease.
Lease income from operating leases where the Group is a lessor is recognised in income on a straight-line
basis over the lease term. The respective leased assets are included in the balance sheet based on their
nature.
(24)

3.2 Consolidation
(a) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity interests issued by the Group.
The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in
a business combination are measured initially at their fair values at the acquisition date. The Group
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair
value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s
identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains
or losses arising from such re-measurement are recognised in consolidated statement of comprehensive
income.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or
liability is recognised in accordance with IFRS 9 either in consolidated statement of comprehensive income
or as a change to other comprehensive income. Contingent consideration that is classified as equity is not
re-measured, and its subsequent settlement is accounted for within equity.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment
of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
(b) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity
transactions – that is, as transactions with the owners in their capacity as owners. The difference between
fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of
the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also
recorded in equity.
(25)

3.2 Consolidation (continued)
(c) Associates
Associates are all entities over which the Group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting. Under the equity method, the investment is initially
recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of
the profit or loss of the investee after the date of acquisition. The Group’s investment in associate includes
goodwill identified on acquisition.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income is reclassified to consolidated
statement of comprehensive income where appropriate.
If the ownership in an associate is increased in a way that the Group acquires power to govern the financial
and operating policies of the acquiree, the acquiree is consolidated as a subsidiary as a step acquisition as
per IFRS 3. After taking into account any impairment, the investment in the associate is derecognised and
any gain or loss on derecognition of the investment is taken to the consolidated income statement. However,
if the ownership is increased and the Group maintains significant influence, the Group increases the
investment amount at the cost of each purchase.
The Group’s share of post-acquisition profit or loss is recognised in the consolidated income statement,
and its share of post-acquisition movements in other comprehensive income is recognised in other
comprehensive income with a corresponding adjustment to the carrying amount of the investment. When
the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or
constructive obligations or made payments on behalf of the associate.
The Group determines at each reporting date whether there is any objective evidence that the investment
in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the
difference between the recoverable amount of the associate and its carrying value and recognises the
amount adjacent to ‘share of profit/(loss)’ of associate in the consolidated statement of comprehensive
income.
Profits and losses resulting from transactions between the Group and its associate are recognised in the
Group’s consolidated financial statements only to the extent of unrelated investor’s interests in the
associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of
the asset transferred. The accounting policies of the associates are same as the Group’s accounting policies.
(26)

3.3 Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the assets. Subsequent
costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. The carrying amount of any component accounted for as a
separate asset is derecognised when replaced. All other repairs and maintenance expenses are charged to
the consolidated statement of comprehensive income during the financial year in which they are incurred.
Depreciation is calculated using the straight-line method to allocate their cost or revalued amounts to their
residual values over their estimated useful lives, as follows:
Years
Buildings 25
Plant and equipment:
Network civil works/buildings 10-25
Infrastructure 3-25
IT hardware 3-10
Mobile network 8-10
Fixed network 2-10
Broadcasting 5-7
Furniture and fixtures 3-5
Motor vehicles 4
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount (Note 3.17.2).
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognised within “other income” in the consolidated statement of comprehensive income.
Capital work in progress includes assets which are under construction or inspection pending certification
for their intended use and are stated at cost net of any accumulated impairment losses. When available for
use, capital work in progress is transferred to property, plant and equipment and depreciated in accordance
with the Group’s policies. No depreciation is charged on such assets until available for use.
3.4 Intangible assets
Goodwill
Goodwill arises on the acquisition of subsidiaries or businesses and represents the excess of the
consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-
date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets
acquired.
(27)

3.4 Intangible assets (continued)
Goodwill (continued)
If the total of consideration transferred, non-controlling interest recognised and previously held interest
measured at fair value is less than the fair value of the net assets of the subsidiary acquiree, in the case of
a bargain purchase, the difference is recognised directly in the consolidated statement of comprehensive
income. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash inflows which are largely independent of the cash inflows from other assets
or groups of assets (cash-generating units). Each unit or group of units to which the goodwill is allocated
represents the lowest level within the Group at which the goodwill is monitored for internal management
purposes. Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in
circumstances indicate a potential impairment. The carrying value of the Cash Generating Units (CGUs)
containing the goodwill is compared to the recoverable amount, which is the higher of value in use and the
fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not
subsequently reversed.
Licenses and other rights of use
Separately acquired licenses and rights of use are shown at historical cost. Licenses and rights of use
acquired in a business combination are recognised at fair value at the acquisition date. Licenses and rights
of use have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is
calculated using the straight-line method to allocate the cost of licenses and rights of use over their
estimated useful lives as shown below:
Years
Telecommunications license fee 20
Rights of use 10-15
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring
to use the specific software. These costs are amortised over their estimated useful lives of five years. Costs
associated with maintaining computer software programmes are recognised as an expense as incurred.
3.5 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted
average method. It excludes borrowing costs. Net realisable value is the estimated selling price in the
ordinary course of business, less applicable variable selling expenses.
3.6 Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer.
If the Group perform by transferring goods or services to a customer before the customer pays consideration
or before payment is due, a contract asset is recognised for the earned consideration.
(28)

3.6 Contract assets (continued)
Contract assets also include subscriber acquisition costs (contract costs). These are incremental contract
costs incurred to obtain and fulfil a contract to provide goods or services to the customer which are opted
to capitalise and these costs are expected to be recovered. These costs are being amortised and tested for
impairment regularly. Contract costs is being amortised over the average customer life with the Group for
each segment. Contract assets are recognised initially at fair value and subsequently measured at amortised
cost using effective interest rate method, less provision for impairment.
3.7 Trade and other receivables
Trade and other receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. If the contractual collection date is in one year or less, they are classified as
current assets. If not, they are presented as non-current assets. Trade receivables are recognised initially at
fair value and subsequently measured at amortised cost using effective interest rate method, less provision
for impairment.
3.8 Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has
received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Group transfers goods or services to the customer, a contract liability is recognised
when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised
as revenue when the Group performs under the contract.
3.9 Cash and bank balances
Cash and bank balances comprise cash balances and call deposits with original maturities of three months
or less. Bank overdrafts, if any that are repayable on demand and form an integral part of the Group’s cash
management are included as a component of cash and cash equivalents for the purpose of the consolidated
statement of cash flows.
3.10 Financial instruments
3.10.1 Non-derivative financial assets
Classification, initial recognition and measurement
The Group classifies its financial assets as financial assets measured at amortised costs and financial assets
at fair value through other comprehensive income (FVOCI). The classification of financial assets at initial
recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business
model for managing them. With the exception of trade receivables that do not contain a significant
financing component or for which the Group has applied the practical expedient, the Group initially
measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through
profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or
for which the Group has applied the practical expedient are measured at the transaction price determined
under IFRS 15. For investments in equity instruments that are not held for trading, this will depend on
whether the Group has made an irrevocable election at the time of initial recognition to account for the
equity investment at FVOCI.
(29)

3.10 Financial instruments (continued)
3.10.1 Non-derivative financial assets (continued)
(a) Financial assets measured at amortised cost
Financial assets measured at amortised cost applies to instruments for which the Group has a business
model to hold the financial asset to collect the contractual cash flows. The characteristics of the contractual
cash flows are that of solely payments of the principal amount and interest (referred to as solely payments
of principal and interest “SPPI”).
 Principal is the fair value of the instrument at initial recognition;

 Interest is the return within a basic lending arrangement and typically consists of consideration for
the time value of money, and credit risk. It may also include consideration for other basic lending
risks such as liquidity risk as well as a profit margin.
Financial assets measured at amortised costs are included in current assets, except for maturities greater
than 12 months after the end of the reporting period which are then classified as non-current assets. The
Group’s financial assets measured at amortised costs comprise trade and other receivables, contract assets,
due from related parties, short term investments and cash and bank balances in the consolidated statement
of financial position.
(b) Financial assets at fair value through other comprehensive income (FVOCI)
FVOCI is the classification for instruments for which Group has a dual business model, i.e. the business
model is achieved by both holding the financial asset to collect the contractual cash flows and through the
sale of the financial assets. The characteristics of the contractual cash flows of instruments in this category,
must still be solely payments of principal and interest. They are included in non-current financial assets
unless the investment matures or management intends to dispose of it within 12 months of the end of the
reporting period. The Group elected to classify irrevocably its non-listed equity investments under this
category.
Subsequent measurement
Financial assets measured at amortised cost
Financial assets measured at amortised cost are subsequently measured using the effective interest (EIR)
method and are subject to impairment. Gains and losses are recognised in consolidated statement of
comprehensive income when the asset is derecognised, modified or impaired.
Financial assets at fair value through other comprehensive income (FVOCI)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
instruments designated at FVOCI when they meet the definition of equity under IAS 32 Financial
Instruments: Presentation and are not held for trading. The classification is determined on an instrument-
by-instrument basis.
(30)

3.10.1 Non-derivative financial assets (continued)
(b) Financial assets at fair value through other comprehensive income (FVOCI) (continued)
Financial assets at fair value through other comprehensive income (FVOCI)
Gains and losses on these financial assets are not subsequently reclassified to profit or loss following its
derecognition. Dividends are recognised as other income in the statement of comprehensive income when
the right of payment has been established, except when the Group benefits from such proceeds as a recovery
of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Impairment losses
(and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately
from other changes in fair value.
3.10.2 Non-derivative financial liabilities
The Group non-derivative financial liabilities include borrowings, due to related parties and trade and other
payables in the consolidated statement of financial position.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition these financial liabilities are measured at amortised cost using the
effective interest rate method. The Group derecognises a financial liability when its contractual obligations
are discharged or cancelled or expire.
3.10.3 Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured to their fair value at the end of each reporting period. The accounting for
subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument,
and if so, the nature of the item being hedged. The Group designates certain derivatives as either:
 hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges)
 hedges of a particular risk associated with the cash flows of recognised assets and liabilities and
highly probable forecast transactions (cash flow hedges), or
 hedges of a net investment in a foreign operation (net investment hedges).
The Group documents at the inception of the hedging transaction the relationship between hedging
instruments and hedged items, as well as its risk management objective and strategy for undertaking various
hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing
basis, of whether the derivatives that are used in hedging transactions have been and will continue to be
highly effective in offsetting changes in cash flows of hedged items.
The fair value of the derivative financial instruments used for hedging purposes are disclosed in Note 11.
Movement in the hedging reserve in shareholders’ equity is shown in Note 24. The full fair value of a
hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged
item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of
the hedged item is less than 12 months.
(31)

3.10.3 Derivative financial instruments (continued)
Cash flow hedges
The Group has entered into interest rate swap contracts which are classified as cash flow hedges. The
effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income and accumulated in hedge reserve in equity. The gain
or loss relating to the ineffective portion is recognised immediately in consolidated statement of
comprehensive income, within other income.
Amounts accumulated in equity are reclassified to consolidated statement of comprehensive income in the
periods when the hedged item affects profit or loss. The gain or loss relating to the effective portion of
interest rate swaps hedging variable rate borrowings is recognised in consolidated statement of
comprehensive income within ‘finance costs’.
Hedge ineffectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic
prospective effectiveness assessments to ensure that an economic relationship exists between the hedged
item and hedging instrument.
The Group enters into hedge relationships where the critical terms of the hedging instrument match exactly
with the terms of the hedged item. The group therefore performs a qualitative assessment of effectiveness.
If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match
exactly with the critical terms of the hedging instrument, the Group uses the hypothetical derivative method
to assess effectiveness.
The Group enters into interest rate swaps that have similar critical terms as the hedged item, such as
reference rate, reset dates, payment dates, maturities and notional amount. The Group does not hedge 100%
of its loans, therefore the hedged item is identified as a proportion of the outstanding loans up to the notional
amount of the swaps. As all critical terms matched during the year, the economic relationship was 100%
effective.
Hedge ineffectiveness may occur due to:
 the credit value/debit value adjustment on the interest rate swaps which is not matched by the loan;
and
 differences in critical terms between the interest rate swaps and loans.
3.10.4 Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the consolidated statement of
financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts
and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities
simultaneously.
(32)

3.11 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares and share options are recognised as a deduction from equity.
3.12 Treasury shares
Own equity instruments of the Company which are acquired by the Company or any of its subsidiaries
(treasury shares) are deducted from other reserves and accounted for at weighted average cost.
Consideration paid or received on the purchase, sale, issue or cancellation of the Company’s own equity
instruments is recognised directly in equity. No gain or loss is recognised in the consolidated statement of
comprehensive income on the purchase, sale, issue or cancellation of own equity instruments.
3.13 Dividend on ordinary shares
Dividends payable on ordinary shares are recognised as a liability in the period in which they are approved
by the Group’s shareholders, but are included in a separate component of reserves once proposed by the
Company’s Board of Directors.
3.14 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course
of business from suppliers. Trade payables are classified as current liabilities if payment is due within one
year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-
current liabilities. Trade payables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest rate method.
3.15 Provisions
Provisions are recognised when the Group has a legal or constructive obligation as a result of a past event,
it is probable that an outflow of resources will be required to settle the obligation, and the amount can be
reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised even
if the likelihood of an outflow with respect to any one item included in the same class of obligations may
be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-
tax rate that reflects current market assessments of the time value of money and the risks specific to the
obligation. The increase in provision due to the passage of time is recognised as finance costs in the
consolidated statement of comprehensive income.
(33)

3.15 Provisions (continued)
Asset retirement obligations
This provision relates to the estimate of the cost of dismantling and removing an item of property, plant and
equipment and restoring the site on which the item was located to its original condition. The Group provides
for the anticipated costs associated with the restoration of leasehold property to its original condition at
inception of the lease, including removal of items included in plant and equipment.
3.16 Employee benefits
Payments made to state-managed pension schemes are dealt with as payments to defined contribution
schemes where the Group’s obligations under the schemes are equivalent to those arising in a defined
contribution scheme. Accordingly, the accrued cost of contribution is charged to the consolidated statement
of comprehensive income as incurred.
Provision for employees’ end of service benefits for non-UAE nationals is made in accordance with UAE
Labour Law. The provision is calculated in accordance with the Projected Unit Cost method as per IAS 19
‘Employee Benefits’ taking into consideration the UAE Labour Laws.
The present value of the defined benefit obligations is calculated using assumptions on the average annual
rate of increase in salaries, average period of employment of non-UAE nationals and an appropriate discount
rate. The assumptions used are calculated on a consistent basis for each period and reflect management’s best
estimate.
The net interest cost is calculated by applying the discount rate to the of the defined benefit obligation. This
cost is included in finance costs in the consolidated statement of comprehensive income.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognised in the period in which they occur, directly in other comprehensive income. They are included
in retained earnings in the consolidated statement of changes in equity and in the consolidated statement of
financial position.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments
are recognised immediately in profit or loss as past service costs.
Payments to defined contribution schemes are charged as an expense as they fall due. Payments made to
state-managed pension schemes are dealt with as payments to defined contribution schemes where the
Group’s obligations under the schemes are equivalent to those arising in a defined contribution scheme.
Provision is also made for the estimated liability for employees' unused entitlements to annual leave and
flights as a result of services rendered by eligible employees up to the reporting date. The provision relating
to annual leave and air passage is disclosed as a current liability, while that relating to end of service benefits
is disclosed as a non-current liability.
The Group also provides mobile allowances and discounted mobile telephone charges to employees for
official and personal purposes. This benefit is not separately accounted for as staff costs.
(34)

3.17 Impairment
3.17.1 Financial assets
The Group recognises a loss allowance for expected credit losses on financial assets measured at amortised
cost. No impairment loss is recognised for investments in equity instruments. The amount of expected
credit losses is updated at the end of each reporting period to reflect changes in credit risk since initial
recognition of the respective financial instrument.
economic conditions and an assessment of both the current as well as the forecast direction of conditions
at the reporting date.
(a) Approach selected for measurement lifetime ECL
Simplified approach - The Group is measuring the impairment at an amount equal to lifetime expected
credit losses (ECL) for trade receivables, due from related parties, contract assets, term deposits, bank
balances and receivables from employees.
(b) Measurement of lifetime ECL on trade receivables and contract assets
The Group evaluates the expected credit loss for its trade receivables and contract assets based on debt
flow rates for various customer segments i.e. enterprise, consumer, etc. Debt flow rates are calculated based
on experience and historical collections trends, adjusted with forward looking collection factors.
Periodic impairment losses based on the above debt flow and rates are adjusted against security deposit
and any other legally binding offsets at customer level. Provision for impairment is also taken on unbilled
receivables based on the applicable rate.
In addition, an allowance for impairment loss may be considered for a financial asset on case to case basis
based on specific information, company risk profile, market conditions and any other relevant information.
(c) Measurement of lifetime expected credit losses on term deposits and bank balances
Impairment for terms deposits and bank balances is based on probability of default, calculated on the basis
of ratings provided by credit rating agencies (e.g. Fitch, Moody’s etc.) of each bank and Loss Given Default
(LGD) driven by rating from reputable financial institutions.
For all other financial assets, the Group recognises lifetime ECL when there has been a significant increase
in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has
not increased significantly since initial recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12 months ECL. The assessment of whether lifetime ECL should
be recognised is based on significant increases in the likelihood or risk of a default occurring since initial
recognition instead of on evidence of a financial asset being credit-impaired at the end of the reporting
period or an actual default occurring.
(35)

3.17 Impairment (continued)
3.17.2 Non-financial assets
Intangible assets that have an indefinite useful life or intangible assets/property, plant and equipment
(including capital work in progress) not ready to use are not subject to amortisation/depreciation and are
tested annually for impairment. Assets that are subject to amortisation/depreciation are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal
and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely
independent cash inflows (CGUs’). Prior impairments of non-financial assets (other than goodwill) are
reviewed for possible reversal at each reporting date.
3.18 Foreign currency translation
(a) Functional and presentation currency
Items included in the consolidated financial statements are measured using the currency of the primary
economic environment in which the Group operates (‘the functional currency’). The consolidated financial
statements are presented in AED which is the Company’s and its subsidiaries functional and presentation
currency. The figures have been rounded to the nearest thousand except when otherwise stated.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the consolidated statement of comprehensive income within finance income or costs.
3.19 Revenue recognition
IFRS 15 Revenue from Contracts with Customers, established a single comprehensive model for entities
to use in accounting for revenue arising from contracts with customers
The core principle of IFRS 15 is that an entity should recognize revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to
be entitled in exchange for those goods or services.
The standard introduces a 5-step approach to revenue recognition:

 Step 1: Identify the contract(s) with a customer;
 Step 2: Identify the performance obligations in the contract;
 Step 3: Determine the transaction price;
 Step 4: Allocate the transaction price to the performance obligations in the contract; and
 Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
(36)

3.19 Revenue recognition (continued)
Revenue comprises the invoiced or accrued amounts from the sale of goods and services
(telecommunication and others) in the ordinary course of the Group’s activities. Revenue is shown net of
returns, discounts and rebates allowed.
Revenue recognition policies for product and services of the Group based on IFRS 15 guidelines is given
below:
Revenue from telecommunication services comprise amounts charged to customers in respect of monthly
access charges, airtime usage, messaging, the provision of other mobile telecommunications services,
including data services and information provision and fees for connecting fixed line and mobile users to
the Group’s network. The Group recognises revenue, as mobile/telecommunication services are provided.
Products with multiple deliverables that have value to a customer on standalone basis are defined as
multiple element arrangements. Contracts typically include the sale of equipment, subscriber identification
module (SIM) card and a service package which mainly include voice, data and SMS/MMS or other
services. These arrangements are divided into separate performance obligations. Where the contracts
include multiple performance obligations, the transaction price will be allocated to each performance
obligation based on the stand-alone selling prices. Where these are not directly observable, they are
estimated based on expected cost plus margin.
Revenue from sale of standalone handsets under separate contract is recognised when the handset is
delivered to the end customer and control has been transferred.
Revenue from the sale of prepaid credit is recognised on the actual utilisation of the prepaid credit. Unused
prepaid credit is deferred as contract liability until such time as the customer uses the credit, expires or
becomes unutilised. Unused prepaid vouchers are recognised as revenue on expiry of 24 months.
Revenue from sale of SIM cards is recognised on the date of activation of SIM.
Contract revenue, i.e. certain revenue from managed services provided by the Group, is recognised over
time based on the cost-to cost method, i.e. based on the proportion of contract costs incurred for work
performed to date relative to the estimated total contract costs. This input method is considered as an
appropriate measure of the progress towards complete satisfaction of these performance obligations under
IFRS 15.
Revenue from interconnection of voice and data traffic with other telecommunications operators is
recognised at the time the services are performed based on the actual recorded traffic.
(37)

3.19 Revenue recognition (continued)
When the Group sells goods or services as a principal, revenue from customers and payments to suppliers
are reported on a gross basis in revenue and operating costs. If the Group sells goods or services as an
agent, revenue and payments to suppliers are recorded in revenue on a net basis, representing the margin
earned.
The Group operates loyalty programmes where customers accumulate points for purchases made, which
entitle them to discounts on future purchases. The reward points are recognised as a separately identifiable
component of the initial sale transaction by allocating the fair value of the consideration received between
the reward points and the other components of the sale such that the reward points are initially recognised
as contract liabilities at their fair value. Revenue from the reward points is recognised when the points are
redeemed. Breakage (forfeiture of points) is recognised when redemption becomes remote.
Significant financing component
Significant financing component exists if the timing of payments agreed to by the parties to the contract
(either explicitly or implicitly) provides the customer or the Group with a significant benefit of financing
the transfer of goods or services to the customer. In such circumstances, the contract contains a significant
financing component.
Currently, in the case of handsets instalment products (bundled and standalone) with periods exceeding
one year, since the list price, cash selling price and the promised consideration are significantly equal, the
Group has assessed that financing component does not exist. In principle, the Group considers any price
difference above 5% as significant in making necessary accounting based on the practical expediency.
However, if there are any changes in products structure indicating the existence of a financing component,
above 5%-6% of the standalone selling price of the products will be considered significant and accounted
for accordingly.
Variable Consideration
Certain customer contracts include variable discounts, rebates, refunds, credits, and incentives etc, which
are provided to the customers during the contract period. Variability arises due to contractual terms and
conditions, whereby customers are provided discounts/rebates/incentives etc upon reaching certain volume
thresholds. Under IFRS 15, if consideration promised in the contract (either explicit or implicit) includes a
variable amount, then the Group should estimate the amount and adjust the total transaction price at
contract inception. The Group has certain interconnect and roaming contracts which contain such variable
considerations, which are estimated and adjusted to the transaction price at contract inception.
3.20 Commission to intermediaries
Intermediaries are paid commissions by the Group mainly in return for selling recharge credits. Such
commissions are recognised in consolidated statement of comprehensive income in the same period of
services provided.
(38)

3.21 Recognition of finance income and costs
Finance income comprises interest income on short term investments and other bank deposits. Interest
income is recognised as it accrues in consolidated statement of comprehensive income, using the effective
interest rate method.
Finance costs is mainly interest payable on borrowing facilities obtained from suppliers and financial
institutions at normal commercial rates and is recognised as an expense in the consolidated statement of
comprehensive income in the period in which it is incurred.
3.22 Cash dividend distribution to equity holders of the parent
The Group recognises a liability to make cash distributions to equity holders when the distribution is
authorised and the distribution is no longer at the discretion of the Company. As per the UAE Federal Law
No. 2 of 2015 ("Companies Law"), a distribution is authorised when it is approved by the shareholders. A
corresponding amount is recognised directly in equity.
3.23 Segmental information
Information regarding the Group’s operating segments is reported in accordance with IFRS 8 Operating
Segments. IFRS 8 requires operating segments to be identified on the basis of internal reports that are
regularly reviewed by the Group’s chief operating decision maker and used to allocate resources to the
segments and to assess their performance.
3.24 Government grants
Government grants relating to non-monetary assets are recognised at nominal value. Grants that
compensate the Group for expenses are recognised in the consolidated statement of comprehensive income
on a systematic basis in the same period in which the expenses are recognised. Grants that compensate the
Group for the cost of an asset are recognised in the consolidated statement of comprehensive income on a
systematic basis over the expected useful life of the related asset upon capitalisation.
4 Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities. Fair values have been determined for measurement
and/or disclosure purposes, based on the following methods.
4.1 Contract assets
The fair value of contract assets are estimated as the present value of future cash flows, discounted at the
market rate of interest at the reporting date where applicable.
4.2 Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at the reporting date.
(39)

4 Determination of fair values (continued)
4.3 Derivative financial instruments
Derivative financial instruments are initially measured at fair value at trade date, and are subsequently
remeasured at fair value. All derivatives are carried at their fair values as assets where the fair values are
positive and as liabilities where the fair values are negative.
Derivative fair values are determined from quoted prices in active markets where available. Where there is
no active market for an instrument, fair value is derived from prices for the derivative’s components from
mark to market values provided by the bankers.
The method of recognising fair value gains and losses depends on whether derivatives are held for trading
or are designated as hedging instruments, and if the latter, the nature of the risks being hedged. The Group
purchases derivatives only for hedging purposes.
5 Financial risk management
5.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, cash
flow and fair value interest rate risks and price risk), credit risk and liquidity risk. The Group’s overall risk
management process focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group’s financial performance.
This note presents information about the Group’s exposure to each of the above risks, the Group’s
objectives, policies and processes for measuring and managing risk, and the Group’s management of
capital. Further quantitative disclosures are included throughout these consolidated financial statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework. The Board is responsible for developing and monitoring the Group’s risk
management policies.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group,
to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s
activities. The Group, through its training and management standards and procedures, aims to develop a
disciplined and constructive control environment in which all employees understand their roles and
obligations.
The Group’s Audit Committee oversees how management monitors compliance with the Group’s risk
management policies and procedures and reviews the adequacy of the risk management framework in
relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal
Control department. Internal Control department undertakes both regular and adhoc reviews of risk
management controls and procedures, the results of which are reported to the Audit Committee.
(40)

5 Financial risk management (continued)
5.1 Financial risk factors (continued)
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s receivables from
customers.
Trade receivables and contract assets
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer
and the extent to which extended credit terms are offered.
The management has established a credit policy under which each new customer is analysed for
creditworthiness before the Group’s terms and conditions are offered. The Group’s review can include
external ratings, when available, customer segmentation, and in some cases bank references. Credit limits
are established for each customer in accordance with this policy, which represents the maximum open
amount without requiring approval from senior management. These limits are reviewed periodically.
In monitoring customer credit risk, customers are classified according to their credit characteristics,
including whether they are an individual or legal entity, projected business volumes, new or established
businesses and existence of previous financial relationships with the Group.
The Group may require deposit or collateral in respect of granting credit for trade and other receivables,
subject to results of risk assessment and the nature and volumes contemplated by the customer.
economic conditions and an assessment of both the current as well as the forecast direction of conditions
at the reporting date. All individually significant assets (such as receivables from broadcast customers and
distributors etc.) are assessed for specific impairment.
Information on the ageing of trade and other receivables is given in Note 32.1.
The carrying amount of financial assets recorded in the consolidated financial statements, net of any
allowances for impairment losses, represents the Group’s maximum exposure to credit risk without taking
account of the value of any collateral obtained.
Term deposits and cash and bank balances
Cash is placed with reputable banks and the risk of default is considered remote. The table below presents
the external credit ratings as at 31 December of the Group’s short term investments and bank balances
based on Fitch and Moody’s rating scale.
(41)

(a) Credit risk (continued)
Term deposits and cash and bank balances (continued)
Ratings Term deposits Cash and bank balances

2019 2018 2019 2018
AED 000 AED 000 AED 000 AED 000
Aa3 - - 515 17,768
A1 - - 14,784 20,660
A+ - - 7,821 3,413
A2 225,000 - 7,493 8,917
A - - - -
A3 375,000 375,000 79,422 31,888
A- 475,000 900,000 3,641 219
AA- - 350,000 - -
Baa1 - 200,000 116,120 108,080
Baa2 - - - 251,471
BBB+ 1,875,000 2,175,000 3,756 14,386
Others - - 35,143 45,289
2,950,000 4,000,000 268,695 502,091
Less: loss allowance (1,299) - - -
2,948,701 4,000,000 268,695 502,091
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they
fall due.
The Group’s approach to managing liquidity is to ensure that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s business and reputation. A major
portion of the Group’s funds are invested in short term investments which are readily available to
meet expected operational expenses, including servicing of financial obligations. The table in Note
32.2 analyses the Group’s non-derivative financial liabilities and derivative financial liabilities, if
any, into relevant maturity groupings based on the remaining period at the reporting date to the
contractual maturity date. Derivative financial liabilities, if any, are included in the analysis if
their contractual maturities are essential for an understanding of the timing of the cash flows. The
amounts disclosed in the table are the contractual undiscounted cash flows.
(42)

(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return. The Group’s exposure to market risk arises from:
 Foreign exchange risk

 Cash flow and fair value interest rate risks
(i) Foreign exchange risk
The Group is exposed to currency risk on sales and purchases that are denominated in a currency, primarily
the Euro, other than the functional currency of the Company and its subsidiaries. In respect of the Group’s
transactions denominated in US Dollars (USD), the Group is not exposed to material currency risk as the
AED is currently pegged to the USD at a fixed rate of exchange.
The Group’s exposure and sensitivity analysis in respect to the foreign exchange risk is detailed in Note
32.3.
(ii) Cash flow and fair value interest rate risks
The Group’s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the
Group to cash flow interest rate risk which is partially offset by short term investments held at variable
rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During 2019 and
2018, the Group’s borrowings at variable rate were denominated in the USD.
The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking
into consideration refinancing, renewal of existing positions, alternative financing and interest rate swaps.
Based on these scenarios, the Group calculates the impact on profit and loss of a defined interest rate shift.
The scenarios are run only for liabilities that represent the major interest-bearing positions.
(43)

(c) Market risk (continued)
(ii) Cash flow and fair value interest rate risks (continued)
The sensitivity analysis performed by the Group in respect to the interest rate risk is detailed in Note 32.4.
The sensitivity analysis is done on a regular basis to verify that the maximum loss potential is within the
limit given by the management.
Based on the various scenarios, the Group manages its cash flow interest rate risk by using floating-to-
fixed interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings
from floating rates to fixed rates. Generally, the Group raises long-term borrowings at floating rates and
swaps them into fixed rates that are lower than those available if the Group borrowed at fixed rates
directly.
5.2 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This
ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings as shown
in the consolidated statement of financial position, less cash and bank balances and term deposits. Total
capital is calculated as ‘equity’ as shown in the consolidated statement of financial position plus net debt.
2019 2018
AED 000 AED 000
Total borrowings (Note 18) 716,332 2,177,650

Less: Cash and bank balances/term deposits
(Notes 15 and 16) (3,217,396) (4,502,091)
Net debt (2,501,064) (2,324,441)
Total equity 8,648,755 8,511,738
Total capital 6,147,691 6,187,297
Gearing ratio (41%) (38%)
Under the terms of the major borrowing facility, the Group is required to comply with certain financial
covenants including interest cover, total bank debt to EBITDA multiple and gearing ratio. The Group has
complied with these covenants throughout the year.
(44)

5.3 Fair value estimation
The fair values of the Group’s financial assets and liabilities approximated their book amounts as reflected
in these consolidated financial statements.
The table below analyses financial instruments carried at fair value, by valuation method. The different
levels have been defined as follows:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted prices included within level 1 that are observable for asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3 – Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs).
In AED’000
Level 1 Level 2 Level 3 Total
At 31 December 2019
Financial asset at fair value through other
comprehensive income (Note 10) - - 18,368 18,368
Derivative financial instruments (Note 11) - 520 - 520
- 520 18,368 18,888
At 31 December 2018
comprehensive income (Note 10) - - 18,368 18,368
Derivative financial instruments (Note 11) - 10,968 - 10,968
- 10,968 18,368 29,336
The fair value of financial instruments that are not traded in an active market is determined by using
valuation techniques. These valuation techniques maximize the use of observable market data where it is
available and rely as little as possible on entity specific estimates. Due to the uncertain nature of cash flows
arising from investment by the Group in unlisted shares, the carrying amount is considered to be the best
estimate of its fair value. The fair value of interest rate swaps classified as derivative financial instruments
in the table above is provided by the bank.
Financial instruments comprise financial assets and financial liabilities.
Financial assets of the Group include financial assets at FVOCI, cash and bank balances, trade and other
receivables, contract assets, due from related parties and short term investments. Financial liabilities of the
Group include borrowings, trade payables and accruals, due to other telecommunication operators,
customer deposits, retention payable, accrued royalty, due to related parties and other payables. The fair
values of these financial assets and liabilities are not materially different from their carrying values unless
stated otherwise (Note 32).
(45)

6 Property, plant and equipment
Plant and Furniture Motor Capital work in
Buildings equipment and fixtures vehicles progress Total
AED 000 AED 000 AED 000 AED 000 AED 000 AED 000
Cost
At 1 January 2018 47,569 16,596,727 300,797 1,384 1,007,117 17,953,594
Reclassifications (Note 6.1) 416 (293,595) (10,426) 2,052 (13,066) (314,619)
Additions 132 499,044 17,381 155 367,748 884,460
Addition: asset retirement obligations - 3,375 - - - 3,375
Transfers (214) 618,031 1,648 - (619,465) -
Disposals/write-off - (372,565) (2,895) - (4,562) (380,022)
At 31 December 2018 47,903 17,051,017 306,505 3,591 737,772 18,146,788
Additions 4,614 884,085 13,683 866 355,744 1,258,992
Addition: asset retirement obligations - 73,646 - - - 73,646
Transfers - 483,550 1,068 29 (484,647) -
Disposals/write-off - (38,206) (1,445) (48) (2,023) (41,722)
At 31 December 2019 52,517 18,454,092 319,811 4,438 606,846 19,437,704
Depreciation / impairment
At 1 January 2018 26,451 9,138,328 256,854 1,372 9,723 9,432,728
Reclassifications (Note 6.1) 189 (238,065) (9,858) 2,023 - (245,711)
Charge for the year 2,263 1,392,331 16,429 45 - 1,411,068
Disposals/write-off - (320,855) (2,874) - (52) (323,781)
Impairment charge - - - - 60,978 60,978
At 31 December 2018 28,903 9,971,739 260,551 3,440 70,649 10,335,282
Reclassifications (Note 6.1) - - - - 4,723 4,723
Charge for the year 2,273 1,364,086 15,907 107 - 1,382,373
Disposals/write-off - (28,144) (408) (48) (2,009) (30,609)
Impairment charge - 3,748 - - 1,068 4,816
At 31 December 2019 31,176 11,311,429 276,050 3,499 74,431 11,696,585
Net book value
At 31 December 2019 21,341 7,142,663 43,761 939 532,415 7,741,119
At 31 December 2018 19,000 7,079,278 45,954 151 667,123 7,811,506
The carrying amount of the Group’s buildings include a nominal amount of AED 2 (2018: AED 2) in relation to land granted to the Group by the UAE Government.
(46)

6 Property, plant and equipment (continued)
6.1 Management of the Group undertook a review of the individual asset wise categorisation of its property,
plant and equipment (PPE) and intangible assets to reflect changes in technology and information
technology architecture. As a result of the review, certain assets were reclassified into different PPE
categories and certain PPE assets were reclassified to intangible assets and certain intangible assets were
reclassified to PPE. Accordingly, the related costs and accumulated depreciation/impairment provision
were also reclassified.
7 Right-of-use assets
Land and Furniture Motor
buildings and fixtures vehicles Total
AED 000 AED 000 AED 000 AED 000
Cost
At 1 January 2019 upon
adoption of IFRS 16 2,105,347 825 2,805 2,108,977
Additions during the year 243,821 120 - 243,941
Re-measurement/disposals (349,354) - (89) (349,443)
At 31 December 2019 1,999,814 945 2,716 2,003,475
Depreciation
Charge for the year 318,403 100 1,315 319,818
Disposals (15,994) - - (15,994)
At 31 December 2019 302,409 100 1,315 303,824
Net book value
At 31 December 2019 1,697,405 845 1,401 1,699,651
The Group leases several assets including shops, technical sites, offices, warehouses, billboards and motor
vehicles. The average lease term is 8.44 years.
The maturity analysis of lease liabilities is presented in Note 17.

2019
AED 000
Amounts recognised in consolidated statement of comprehensive income
Depreciation expense on right-of-use assets (Note 25) 319,818
Interest expense on lease liabilities (Note 27) 78,541
(47)

8 Intangible assets and goodwill

2019 2018
AED 000 AED 000
Goodwill 549,050 549,050

Intangible assets 502,396 553,825
1,051,446 1,102,875
Goodwill
The Group acquired the business of three wholly owned subsidiaries/divisions of Tecom Investments FZ
LLC with effect from 31 December 2005. Goodwill represents the excess of purchase consideration paid
over the fair value of net assets acquired.
Carrying amount of goodwill allocated to each of Cash Generating Units (“CGU”) is as follows:
2019 2018
AED 000 AED 000
Broadcasting operations 135,830 135,830

Fixed line business 413,220 413,220
549,050 549,050
The Group tests goodwill for impairment annually. The recoverable amount of the Cash Generating Units
(“CGU”) is determined using the Discounted Cash Flow method based on the five year business outlook.
The estimated recoverable amount of the broadcasting CGU exceeded the carrying amount of its net assets
including goodwill, by approximately 39% and that of the fixed line business exceeded its carrying amount
by approximately 164%.
The key assumptions for the value-in-use calculations at 31 December 2019 include:
- 5 year revenue growth projections for the fixed line business and broadcasting operations;
- a pre-tax discount rate of 10.23% based on the historical industry average weighted-average cost of capital;
- maintenance capital expenditure projections allowing for replacement of existing infrastructure at the end
of its useful life; and
- terminal growth rate of 3% for the fixed line and 0% for broadcasting businesses, determined based on
management’s estimate of the long term compound EBITDA growth rate, consistent with the assumption
that a market participant would make.
The fixed line model calculations are particularly sensitive to the revenue growth assumptions, including
expectations around the impact of future competition in the Group's existing network zones. However,
management considers that it would require a significant decline in revenue growth before any impairment
of the fixed line CGU was required.
(48)

8 Intangible assets and goodwill (continued)
Intangible assets
Capital Telecomm-
Software work in unications Rights of
in use progress license fees use Total
Cost
At 1 January 2018 1,594,292 280,480 124,500 193,990 2,193,262
Reclassifications* 300,714 13,905 - - 314,619
Adjustment - - - (8,539) (8,539)
Additions 130,949 30,595 - - 161,544
Transfers 192,389 (192,389) - - -
Write off (13,107) - - - (13,107)
At 31 December 2018 2,205,237 132,591 124,500 185,451 2,647,779
Reclassifications*
Adjustment
Additions 103,242 53,534 - 13,853 170,629
Transfers 88,754 (88,754) - - -
Write off (705) - - - (705)
At 31 December 2019 2,396,528 97,371 124,500 199,304 2,817,703
Amortisation/impairment
At 1 January 2018 1,396,458 - 73,847 141,675 1,611,980
Reclassifications* 245,711 - - - 245,711
Charge for the year 186,570 - 6,223 14,265 207,058
Impairment charge 42,312 - - - 42,312
Write off (13,107) - - - (13,107)
At 31 December 2018 1,857,944 - 80,070 155,940 2,093,954
Reclassifications* (65,125) 60,402 - - (4,723)
Charge for the year 190,691 - 6,223 29,215 226,129
Impairment charge - - - - -
Write off (53) - - - (53)
At 31 December 2019 1,983,457 60,402 86,293 185,155 2,315,307
Net book value

At 31 December 2019 413,071 36,969 38,207 14,149 502,396
At 31 December 2018 347,293 132,591 44,430 29,511 553,825
* These reclassifications represent certain assets reclassified from property, plant and equipment to
intangibles assets and from intangible assets to property, plant and equipment (Note 6.1).
The Software in use represents all applications such as ERP and Billing systems which are currently in use
while the Capital work in progress relates to the development of these systems. Software is being amortised
on a straight-line basis over a period of 5 years.
Telecommunication license fees represent charge by the Telecommunications Regulatory Authority to the
Group to grant the license to operate as a telecommunications service provider in the UAE.
(49)

8 Intangible assets and goodwill (continued)
Intangible assets (continued)
The fees are being amortised on a straight-line basis over a period of 20 years which is the term of the
license, from the date of granting the license.
Indefeasible right of use represent the fees paid to a telecom operator to obtain rights to use Indoor Building
Solutions relating to certain sites in the UAE. The fees are amortised on a straight line basis over 10 years.
Also included in the balance is an amount charged by an operator of a fibre-optic cable system for the right
to use its submarine fibre-optic circuits and cable system. The fees are amortised on a straight-line basis
over a period of 15 years from the date of activation of the cable system.
9 Investments accounted for using the equity method
Dubai Smart City Accelerator FZCO (DSCA)
In 2017, the Group acquired 23.53% shares in Dubai Smart City Accelerator FZCO (“the Associate”), a
Free Zone Company with limited liability established in Dubai Silicon Oasis Free Zone, in the Emirate of
Dubai. The business of the Associate is to run accelerator programs with the purpose of sourcing innovation
and technology applicable to the Smart City Industry.
Khazna Data Center Limited (KDC)
The Group has 26% ownership shares in Khazna Data Center Limited (“the Associate”), a limited liability
company established in the Masdar City Free Zone, in the Emirate of Abu Dhabi. The business of the
Associate is providing wholesale data centre services.
Movement in investments in associates (DSCA and KDC)
2019 2018
AED 000 AED 000
At 1 January 188,179 142,086

Investments during the year* 70,256 35,879
Share of profit for the year 10,513 10,214
At 31 December 268,948 188,179
Summarised financial information for the Associates are as follows:

Associates’ statement of financial position as of 31 December:
Non-current assets 1,444,602 910,526
Current assets 121,556 133,388
Current liabilities (162,106) (66,726)
Non-current liabilities (457,379) (321,819)
Net assets 946,673 655,369
(50)

9 Investments accounted for using the equity method (continued)
Associates’ income statement for the year ended 31 December:

2019 2018
AED 000 AED 000
Revenue 149,618 138,934

Profit for the year 38,264 41,835
*The investments during the year 31 December 2019, represent payment made for additional funding to
Khazna Data Center Limited amounting to AED 70,256 thousand.
10 Financial asset at fair value through other comprehensive income
2019 2018
AED 000 AED 000
Unlisted shares
Anghami 18,368 18,368
In 2016, the Group acquired 4.8% shares in Anghami, a Cayman Islands exempted company registered in
the Cayman Islands (unlisted company). The company is involved in the provision of media related content.
The Group classified the investment as financial asset at fair value through other comprehensive income.
Due to the uncertain nature of cash flows arising from investment by the Group in unlisted shares of
Anghami, the carrying amount is considered to be the best estimate of its fair value.
11 Derivative financial instruments
In 2015, the Group entered into floating to fixed interest rate swaps with corresponding banks to hedge the
interest rate risk relating to a portion of the floating rate interest payable on unsecured bank term loans. The
terms of the loans include quarterly interest payments, at a rate of LIBOR + 0.95% on the outstanding
principal amount (Note 18).
The hedge covers the risk in variability of LIBOR over the entire term of the loans. The hedging instruments
match the actual terms of the related interest payments on the loans in all respects, including LIBOR rate
used, reset dates and notional amounts outstanding.
(51)

11 Derivative financial instruments (continued)
As of 31 December, the fair value of derivative financial instruments was as follows:
2019 2018
AED 000 AED 000
Interest rate swap contracts – cash flow hedges 520 10,968
The related movement in derivative financial instruments is shown under hedge reserve (Note 24.2).
There was no ineffectiveness during 2019 and 2018 in relation to the interest rate swap contracts.
12 Contract assets and contract liabilities
Current Non-current
2019 2018 2019 2018
AED 000 AED 000 AED 000 AED 000
Contract assets* 509,191 539,616 218,353 208,243

Less: provision for impairment of
contract assets (35,996) (31,359) (9,359) (11,556)
473,195 508,257 208,994 196,687
*Contract assets include unamortised subscriber acquisition costs (contract costs) amounting to AED 304,097
thousands (2018: AED 273,080 thousands).
12.1 The movement in the provision for impairment of contract assets is as follows:
2019 2018
AED 000 AED 000
Opening balance 42,915 29,355

Impairment charge during the year 2,440 13,560
Closing balance 45,355 42,915
Current Non-current
2019 2018 2019 2018
AED 000 AED 000 AED 000 AED 000
Contract liabilities 377,019 444,141 193,095 190,631
There was no revenue recognised in the current reporting period that is related to performance obligations
that were satisfied in the prior year.
The Group has reviewed its contracts with customers and as permitted under IFRS 15, the transaction price
allocated to the unsatisfied contracts is not disclosed.
(52)

13 Trade and other receivables

2019 2018
AED 000 AED 000
Trade receivables 1,941,223 2,046,585

Due from other telecommunications operators* 201,176 179,730
Less: provision for impairment of trade receivables and due from other
telecommunications operators (662,358) (759,281)
Trade receivables, net 1,480,041 1,467,034
Prepayments 95,355 176,739
Advances to suppliers 178,544 134,166
Other receivables** 116,616 129,799
Total trade and other receivables 1,870,556 1,907,738
*Due from other telecommunications operators are presented after netting of payable balances (where right
to set off exists) amounting to AED 833,130 thousand (31 December 2018: AED 677,410 thousand).
**Other receivables mainly include interest receivable on term deposits.
The Group’s normal credit terms ranges between 15 and 150 days (2018: 15 and 150 days). No interest is
charged on the trade and other receivable balances.
The movement in the provision for impairment of trade receivables and due from other telecommunications
operators is as follows:
2019 2018
AED 000 AED 000
At 1 January 759,281 661,758

Provision for impairment 215,414 232,237
Write-off during the year (312,337) (134,714)
At 31 December 662,358 759,281
(53)

14 Related party balances and transactions
Related parties comprise the shareholders of the Company, entities under common shareholding, its
directors, key management personnel and entities over which they exercise control, joint control or
significant influence. The founding shareholders mentioned in the note are Emirates Investment Authority,
Mamoura Diversified Global Holding PJSC and Emirates International Telecommunications Company
L.L.C. Transactions with related parties are done on an arm’s length basis in the ordinary course of business
and are approved by the Group’s management or by the Board of Directors.
Related party balances

2019 2018
AED 000 AED 000
Due from related parties
Axiom Telecom LLC (Entity under common shareholding) 106,045 129,078
Injazat Data Systems LLC (Entity under common shareholding) 58,950 -
164,995 129,078
Due to related parties
Tecom Investments FZ LLC (Entity under common shareholding) 1,970 3,249
Khazna Data Center Limited (Associate) 4,103 6,585
6,073 9,834
Due to the short-term nature of the related party balances, their carrying amount is considered to be the same
as their fair value.
Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. All transactions with related parties referred to below are
done on an arm’s length basis in the ordinary course of business. The following table reflects the gross value
of the transactions with related parties.
2019 2018
AED 000 AED 000
Entities under common shareholding
Tecom Investments FZ LLC:
- Office rent and services 40,630 39,697
Axiom Telecom LLC – Authorised distributor – net sales 1,323,665 1,527,311
Injazat Data Systems LLC – Data Centre - rent and services 9,554 569
Injazat Data Systems LLC – Data Centre – net revenue 72,272 -
Associates
Khazna Data Center Limited – rent and telecom services 98,138 116,746
Khazna Data Center Limited- additional funding 70,256 34,044
Dubai Smart City Accelerator FZCO- additional funding - 1,835
(54)

14 Related party balances and transactions (continued)
Key management compensation

2019 2018
AED 000 AED 000
Short term employee benefits 39,520 38,511

Employees’ end of service benefits 706 884
Post-employment benefits 1,311 1,267
Long term incentives 7,463 18,436
49,000 59,098
Board of Directors fee during the year was AED 10,000 thousand (2018: AED 12,074 thousand).
No loan has been provided to Directors, their spouses, children and relatives of the second degree and any
corporates in which they own 20% or more.
The Group also provides telecommunication services to the Federal Government (including Ministries and
local bodies). These transactions are at normal commercial terms. The credit period allowed to Government
customers ranges from 15 to 150 days. Refer Note 26 for disclosure of the royalty payable to the Federal
Government of the UAE. In accordance with IAS 24 (revised 2009): Related Party Disclosures, the Group
has elected not to disclose transactions with the UAE Federal Government and other entities over which the
Federal Government exerts control, joint control or significant influence.
15 Term deposits
2019 2018
AED 000 AED 000
Term deposits 2,950,000 4,000,000

Less: loss allowance (1,299) -
2,948,701 4,000,000
Term deposits represent bank deposits with maturity periods exceeding 3 months from the date of
acquisition. These term deposits denominated primarily in UAE Dirham, with banks. Interest is earned on
these term deposits at prevailing market rates. The carrying amount of these term deposits approximates to
their fair value.
(55)

16 Cash and bank balances
For the purposes of the consolidated statement of cash flows, cash and cash equivalents comprise:
2019 2018
AED 000 AED 000
Cash at bank (on deposit and call accounts) 269,278 501,431

Cash on hand 716 660
Less: loss allowance (1,299) -
Cash and bank balances 268,695 502,091
Less: margin on guarantees (Note 30) (4,038) (5,393)
Cash and cash equivalents 264,657 496,698
17 Lease liabilities
2019 2018
AED 000 AED 000
At 1 January 2019 upon adoption of IFRS 16 2,137,074 -
Lease liabilities for the year 122,521 -
Payments made during the year (128,448) -
Re-measurement during the year (274,342) -
Closing balance 1,856,805 -
Current Non-current
2019 2018 2019 2018
AED 000 AED 000 AED 000 AED 000
Lease liabilities 460,005 - 1,396,800 -
2019 2018
AED 000 AED 000
Maturity analysis:
Not later than 1 year 460,005 -
Later than 1 year and not later than 5 years 785,812 -
Later than 5 years 610,988 -
Closing balance 1,856,805 -
The Group does not face a significant liquidity risk with regard to its lease liabilities.
The Group does not have any variable component in lease payments.
(56)

18 Borrowings
Current Non-current
2019 2018 2019 2018
AED 000 AED 000 AED 000 AED 000
Bank borrowings 716,332 1,432,665 - 716,332

Buyer credit arrangements - 28,653 - -
716,332 1,461,318 - 716,332
The details of borrowings are as follows:
Nominal Year of Opening Closing

Currency interest rate maturity balance Drawn Repaid balance
AED 000 AED 000 AED 000 AED 000
Bank
borrowings
Unsecured
term loan 1 USD LIBOR+0.95% 2020 1,322,460 - (881,640) 440,820
Unsecured
term loan 2 USD LIBOR+0.95% 2020 551,025 - (367,350) 183,675
Unsecured
term loan 3 USD LIBOR+0.95% 2020 275,512 - (183,675) 91,837
2,148,997 - (1,432,665) 716,332
Buyer credit arrangement
Buyer credit
arrangement USD Nil 2019 28,653 - (28,653) -
(57)

19 Provision for employees’ end of service benefits
The Group provides end of service benefits (defined benefit obligations) to its eligible employees. The most
recent actuarial valuations of the present value of the defined benefit obligations were carried out as at 31
December 2019 by a registered actuary in the UAE. The present value of defined benefit obligations and the
related current and past service cost, were measured using the Projected Unit Credit Method. Changes in the
present value of defined benefit obligations is as follows:
2019 2018
AED 000 AED 000
At 1 January 252,564 236,072

Current service cost 35,283 35,309
Interest cost (Note 27) 8,568 8,331
Actuarial gain recognised in other comprehensive income* (3,028) (5,313)
Benefits paid during the year (34,647) (21,835)
At 31 December 258,740 252,564
*Actuarial gain recognised in other comprehensive income relates to re-measurements of the employees’
end of service benefits obligation from changes in financial assumptions amounting to AED 306 thousand
(2018: AED 1,861 thousand ) and experience adjustments amounting to AED 2,722 thousand (2018: AED
3,452 thousand).
The provision is recognised based on the following significant actuarial assumptions:

2019 2018
Average period of employment (years) 7.50 7.54

Average annual rate of salary increase 2.77% 3%
Discount rate 3.57% 3.80%
Sensitivity of the provision for employees’ end of service benefits to changes in principal assumptions is
included below:
Impact on defined benefit obligation
Change in Increase in Decrease in
assumption assumption assumption
2019 2018 2019 2018 2019 2018
Average period of employment (years) 1 year 1 year (0.29 %) (0.51%) 0.22 % 0.51%
Average annual rate of salary increase 1% 1% 8.48% 8.31% (7.57%) (7.40%)
Discount rate 1% 1% (7.01%) (6.86%) 7.99% 7.83%
(58)

20 Other provisions
Asset retirement obligations
In the course of the Group’s activities a number of sites and other commercial premises are utilised which
are expected to have costs associated with exiting and ceasing their use. The associated cash outflows are
expected to occur at the dates of exit of the assets to which they relate. These assets are long-term in nature,
primarily in period up to 10 years from when the asset is brought into use.
2019 2018
AED 000 AED 000
At 1 January 115,764 110,924

Additions during the year 49,003 3,375
Adjustment for change in discount/inflation rates 259 (1,795)
Unwinding of discount 4,806 3,260
At 31 December 169,832 115,764
The provision is recognised based on the following significant assumptions:

2019 2018
Average period of restoration (years) 10 10

Inflation rate 1.80% 2.10%
Discount rate 3.96% 3.99%
21 Trade and other payables

2019 2018
AED 000 AED 000
Trade payables and accruals 1,675,211 1,707,932

Due to other telecommunications operators* 523,658 603,129
Accrued federal royalty (Note 26) 2,062,972 2,103,174
Valued Added Tax (VAT) payable 8,987 26,427
Other payables and accruals 329,504 362,074
4,600,332 4,802,736
*Due to other telecommunications operators are presented after netting of receivable balances (where right
to set off exists) amounting to AED 833,130 thousand (31 December 2018: AED 677,410 thousand).
The carrying amounts of trade and other payables approximate their fair value.
(59)

22 Share capital
2019 2018
No of shares No of shares
Authorised, issued and fully paid up share capital
(par value AED 1 each) 4,532,905,989 4,532,905,989
23 Share premium
2019 2018
AED 000 AED 000
Premium on issue of common share capital 232,332 232,332
(60)

24 Other reserves
Statutory reserve Hedge reserve

(Note 24.1) (Note 24.2) Proposed dividend Total
AED 000 AED 000 AED 000 AED 000
At 1 January 2018 1,415,726 13,594 997,239 2,426,559

Transfer to statutory reserve 175,299 - - 175,299
Interim cash dividend - - 589,278 589,278
Cash dividends paid - - (1,586,517) (1,586,517)
Fair value changes on cash flow hedge - (2,626) - (2,626)
At 31 December 2018 1,591,025 10,968 - 1,601,993
At 1 January 2019 1,591,025 10,968 - 1,601,993

Transfer to statutory reserve 173,095 - - 173,095
Final cash dividend proposed - - 997,239 997,239
Proposed interim cash dividend - - 589,278 589,278
Cash dividends paid - - (1,586,517) (1,586,517)
Fair value changes on cash flow hedge - (10,448) - (10,448)
At 31 December 2019 1,764,120 520 - 1,764,640
24.1 In accordance with the UAE Federal Law No. 2 of 2015 ("Companies Law") and the Company's Articles of Association, 10% of the net profit is
required to be transferred annually to a non-distributable statutory reserve. Such transfers are required to be made until the balance of the statutory reserve
equals one half of the Company's paid up share capital.
24.2 Hedge reserve is related to derivative financial instrument (Note 11)
(61)

25 Operating expenses
31 December
2019 2018
AED 000 AED 000
Interconnect costs 2,811,216 2,954,075

Product costs 894,253 1,335,156
Depreciation and impairment on property, plant and equipment (Note 6) 1,387,189 1,472,046
Depreciation on right-of-use assets (Note 7) 319,818 -
Amortisation and impairment on intangible assets (Note 8) 226,129 249,370
Staff costs 934,169 1,018,455
Network operation and maintenance 526,756 755,640
Outsourcing and contracting 360,504 422,955
Commission 390,423 388,105
Telecommunication license and related fees 407,575 217,358
Marketing 250,082 317,140
Others 121,707 275,925
8,629,821 9,406,225
During the year ended 31 December 2019, the Group has paid AED 1,555 thousand (2018: AED 14,430
thousand) for various social contribution purposes.
26 Federal royalty
The royalty rates payable to the UAE Ministry of Finance for the period from 2017 to 2021 are 15% on
regulated revenue and 30% on regulated profit after deducting royalty on regulated revenue.
2019 2018
AED 000 AED 000
Total revenue for the year (Note 34) 12,587,958 13,414,057

Broadcasting revenue for the year (160,825) (156,798)
Other allowable deductions (3,521,026) (4,128,702)
Total adjusted revenue 8,906,107 9,128,557
Profit before royalty 3,759,962 3,831,804
Allowable deductions (113,425) (91,182)
Total regulated profit 3,646,537 3,740,622
(62)

26 Federal royalty (continued)

2019 2018
AED 000 AED 000
Charge for royalty: 15% (2018:15%) of the total adjusted revenue plus
30% (2018: 30%) of net regulated profit for the year before distribution
after deducting 15% (2018: 15%) of the total adjusted revenue. 2,029,103 2,080,685
Adjustments to charge (95) (3,745)

Charge for the year 2,029,008 2,076,940
Royalty reimbursement (net) - 1,872
Total royalty charge for the year 2,029,008 2,078,812
Movement in the royalty accruals is as follows:
At 1 January 2,103,174 2,054,019

Payment made during the year (2,069,210) (2,027,785)
Charge for the year 2,029,008 2,076,940
At 31 December (Note 21) 2,062,972 2,103,174
27 Finance income and costs

2019 2018
AED 000 AED 000
Finance income
Interest income 124,052 145,456
Finance costs
Interest expense on lease liability 78,541 -
Interest expense others* 46,824 92,226
Exchange (gain)/loss, net (375) 1,357
124,990 93,583
*Interest expense others includes interest cost on defined benefit obligations amounted to AED 8,568
thousand (2018: AED 8,331 thousand) (Note 19).
(63)

28 Earnings per share

2019 2018
Profit for the year (AED 000) 1,730,954 1,752,992

Weighted average number of shares (‘000’) 4,532,906 4,532,906
Basic and diluted earnings per share (AED) 0.38 0.39
Diluted earnings per share have not been presented separately as the Group has no commitments that would
dilute earnings per share.
29 Changes in working capital

2019 2018
AED 000 AED 000
Change in:
Inventories 17,516 (29,928)
Contract assets 20,315 119,504
Trade and other receivables (275,706) (459,242)
Trade and other payables 1,805,374 1,695,247
Contract liabilities (64,658) 40,999
Due from related parties (35,917) 57,118
Due to related parties (3,761) (10,460)
Net changes in working capital 1,463,163 1,413,238
30 Contingent liabilities and assets
The Group has outstanding bank guarantees amounting to AED 70,626 thousand (2018: AED 36,677). Bank
guarantees are secured against margin of AED 4,038 thousand (2018: AED 5,393 thousand) (Note 16).
The Group is subject to litigation with a party and expecting a reasonable prospect of success. If successful
this is going to have a favourable impact on the Group's consolidated financial statements. Other than above,
there are litigations in the normal course of business and the management is of the view that the outcome of
these court cases will not have a material impact on the Group's consolidated financial statements. Details
of these cases are not disclosed in order not to prejudice the Group’s position in these litigations.
31 Commitments
The Group has outstanding capital commitments amounting to AED 1,321,653 thousand (2018:
AED 1,139,214 thousand).
(64)

32 Financial instruments and risk management
32.1 Credit risk
Exposure to credit risk

The carrying amount and the fair value of financial assets represent the maximum credit exposure. The
maximum exposure to credit risk at the reporting date was:
Notes Carrying amount Fair value

2019 2018 2019 2018
AED 000 AED 000 AED 000 AED 000
Derivatives
Interest rate swap contracts – cash flow
hedges 11 520 10,968 520 10,968
Non-derivatives
18,368 18,368 18,368 18,368
comprehensive income 10
Contract assets 12 378,092 431,864 378,092 431,864
Trade and other receivables 13 1,596,657 1,596,833 1,596,657 1,596,833
Due from related parties 14 164,995 129,078 164,995 129,078
Term deposits 15 2,948,701 4,000,000 2,948,701 4,000,000
Cash and bank balances 16 268,695 502,091 268,695 502,091
5,375,508 6,678,234 5,375,508 6,678,234
For the purpose of the exposure to credit risk on financial assets disclosure, non-financial assets (subscriber
acquisition costs, prepayments and advances to suppliers) amounting to AED 577,996 thousand (2018:
AED 583,985 thousand) have been excluded from contract assets and trade and other receivables.
Impairment of contract assets and trade and other receivables
The ageing of contract assets and trade receivables is as follows:
Gross Impaired Impaired Gross Impaired Impaired

2019 2019 2019 2018 2018 2018
AED 000 % AED 000 AED 000 % AED 000
Not past due 917,467 3.36% (30,803) 924,288 3.43% (31,711)

Past due 0-30 days 263,433 7.55% (19,894) 398,864 4.94% (19,702)
Past due 31-180 days 491,235 14.11% (69,335) 599,399 15.13% (90,706)
More than 180 days 1,726,841 34.03% (587,681) 1,455,953 45.34% (660,077)
3,398,976 (707,713) 3,378,504 (802,196)
Non-financial assets (unamortised subscriber acquisition costs) amounting to AED 304,097 thousand
(2018: AED 273,080 thousand) have been excluded from gross amounts.
(65)

32 Financial instruments and risk management (continued)
32.1 Credit risk (continued)
Impairment of contract assets and trade and other receivables (continued)
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared
credit risk characteristics and the days past due. The expected credit loss are based on the analysis of billing,
collection and outstanding balance over an appropriate period adjusted for factors that are specific to the
debtors, general economic conditions and an assessment of both the current as well as the forecast direction of
conditions at the reporting date.
The impairment provision in respect of contract assets and trade receivables is used to record impairment losses
unless the Group is satisfied that there is no reasonable expectation of recovery of the amount owing is
possible; at that point the amounts considered irrecoverable are written-off. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment
plan with the group, and a failure to make contractual payments for a period of greater than 365 days past due.
32.2 Liquidity risk
The following are the contractual maturities of financial liabilities along with fair values:
31 December 2019
---------------- Contractual cash flows --------------------------
Fair Carrying 6 months 6-12 Above 2
value amount Total or less months 1-2 years years
AED 000 AED 000 AED 000 AED 000 AED 000 AED 000 AED 000
Non-derivative
financial liabilities
Borrowings 716,332 716,332 716,332 716,332 - - -

Trade payables and
accruals 1,675,211 1,675,211 1,675,211 1,675,211 - - -
Due to other
telecommunication
operators 523,658 523,658 523,658 523,658 - - -
Accrued royalty 2,062,972 2,062,972 2,062,972 2,062,972 - - -
Valued Added Tax
(VAT) Payable 8,987 8,987 8,987 8,987 - - -
Other payables and - - -
accruals 329,504 329,504 329,504 329,504
Due to related - - -
parties 6,073 6,073 6,073 6,073
5,322,737 5,322,737 5,322,737 5,322,737 - - -
(66)

32.2 Liquidity risk (continued)
31 December 2018
---------------- Contractual cash flows --------------------------
Fair Carrying 6 months 6-12 Above 2
value amount Total or less months 1-2 years years
AED 000 AED 000 AED 000 AED 000 AED 000 AED 000 AED 000
Non-derivative
financial liabilities
Borrowings 2,177,650 2,177,650 2,238,361 764,388 750,896 723,077 -
Trade payables and
accruals 1,707,932 1,707,932 1,707,932 1,707,932 - - -
Due to other
telecommunication
operators 603,129 603,129 603,129 603,129 - - -
Accrued royalty 2,103,174 2,103,174 2,103,174 2,103,174
Valued Added Tax
(VAT) Payable 26,427 26,427 26,427 26,427 - - -
Other payables and
accruals 362,074 362,074 362,074 362,074 - - -
Due to related
parties 9,834 9,834 9,834 9,834 - - -
6,990,220 6,990,220 7,050,931 5,576,958 750,896 723,077 -
Contractual maturities related to lease liabilities disclosed in Note 17.
32.3 Currency risk
Exposure to currency risk
The Group’s exposure to foreign currency risk was as follows:
31 December 2019 31 December 2018

------------ Thousand ------------- ------------ Thousand ------------
EUR GBP EUR GBP
Trade receivables 11,614 451 6,663 3,234
Trade payables - (161) (46) (591)
Net exposure 11,614 290 6,617 2,643
The following significant exchange rates against AED have been applied during the year:
Average rate Reporting date spot rate

2019 2018 2019 2018
EUR 1 4.1327 4.3673 4.1195 4.2142
GBP 1 4.7017 4.9380 4.8722 4.6881
(67)

32.3 Currency risk (continued)
Sensitivity analysis
A 10 percent strengthening of the AED against the following currencies at 31 December would have
increased/(decreased) equity and profit by the amounts shown below. This analysis assumes that all other
variables, in particular interest rates, remain constant.
2019 2018
AED 000 AED 000
Increase/(decrease) in profit
EURO (4,800) (2,890)
GBP (136) (1,305)
Conversely a 10 percent weakening of the AED against the above currencies at 31 December will have had
the exact reverse effect. In each of the above cases the impact on equity would have the same values as the
above amounts.
32.4 Interest rate risk
Exposure to interest rate risk
The interest rate profile of the Group’s interest bearing financial instruments was:
Carrying Amount
2019 2018
AED 000 AED 000
Variable interest rate instruments
Bank borrowings 716,332 2,148,997
Sensitivity analysis
An increase of 100 basis points in interest rates at the reporting date would have decreased equity and profit
or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign
currency rates, remain constant.
2019 2018
AED 000 AED 000
Decrease in profit
Variable interest rate instruments 7,139 14,377
Conversely a decrease in interest rates by 100 basis points will have had the exact reverse effect. In each of
the above cases the impact on equity would have the same values as the above amounts.
During previous years, the Group entered into floating to fixed interest rate swaps with corresponding banks
to hedge the interest rate risk relating to a portion of the floating rate interest payable on unsecured bank
borrowings. Hedged portion of the bank borrowings is not included in the sensitivity analysis (Note 11).
(68)

32.5 Financial instruments by category
The accounting policies for financial instruments have been applied to the line items below:
2019 2018
AED 000 AED 000
Derivative financial instruments 520 10,968
Financial asset at fair value through other comprehensive income 18,368 18,368
Financial assets measured at amortised cost

Contract assets 378,092 431,864
Trade and other receivables 1,596,657 1,596,833
Due from related parties 164,995 129,078
Term deposits 2,948,701 4,000,000
Cash and bank balances 268,695 502,091
5,357,140 6,659,866
Lease liabilities 1,856,805 -
Borrowings 716,332 2,177,650
Trade and other payables 4,600,332 4,802,736
Due to related parties 6,073 9,834
7,179,542 6,990,220
For the purpose of the financial instruments disclosure, non-financial assets amounting to AED 577,996
thousand (2018: AED 583,985 thousand) have been excluded from contract assets, trade and other
receivables.
33 Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the consolidated statement of
financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts
and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities
simultaneously.
(69)

33 Offsetting financial assets and financial liabilities (continued)
The following table presents the recognised financial instruments that are offset in the statement of financial
position, as at 31 December 2019 and 31 December 2018.
31 December 2019 31 December 2018

Gross Net Gross Net
Gross amounts amount Gross amounts amount
amounts set off presented amounts set off presented
AED 000 AED 000 AED 000 AED 000 AED 000 AED 000
Financial assets
Trade and other receivables 2,703,686 (833,130) 1,870,556 2,585,148 (677,410) 1,907,738
Total 2,703,686 (833,130) 1,870,556 2,585,148 (677,410) 1,907,738
Financial liabilities
Trade and other payables 5,433,462 (833,130) 4,600,332 5,480,146 (677,410) 4,802,736
Total 5,433,462 (833,130) 4,600,332 5,480,146 (677,410) 4,802,736
34 Segment analysis
The Group mainly has operations in the UAE. The Group is organised into four major business segments
as follows:
 Mobile segment offers mobility services to the enterprise and consumer markets. Services include
mobile voice and data, mobile content and mobile broadband WIFI. Mobile handset sales, including
instalment sales, are also included in this segment.
 Fixed segment provides wire line services to the enterprise and consumer markets. Services include
broadband, IPTV, IP/VPN business internet and telephony.
 Wholesale segment provides voice and sms to national and international carriers and operators.
Services include termination of inbound international voice traffic and international hubbing.
 Others. Others include broadcasting services, international roaming, site sharing, etc.
Segment contribution, referred to by the Group as Gross Margin, represents revenue less direct costs of
sales. It is calculated before charging network operating costs, sales and general and administration
expenses. This is the measure reported to the Group’s Board of Directors for the purpose of resource
allocation and assessment of segment performance.
(70)

34 Segment analysis (continued)
31 December 2019
Mobile Fixed Wholesale Others Total
Segment revenue
Timing of revenue
recognition
Over time 6,536,690 2,484,172 2,059,516 927,196 12,007,574
At a point in time 517,909 9,120 - 53,355 580,384
7,054,599 2,493,292 2,059,516 980,551 12,587,958
Segment contribution 4,409,691 2,140,970 1,318,954 637,757 8,507,372
Unallocated costs (4,759,845)
Other income 2,860
Operating profit before
federal royalty 3,750,387
Federal royalty (2,029,008)
Operating profit 1,721,379
Finance income/costs and
share of profit of
investments accounted for
using equity method (net) 9,575
Profit for the year 1,730,954
(71)

34 Segment analysis (continued)
31 December 2018
Mobile Fixed Wholesale Others Total
Segment revenue
Timing of revenue
recognition
Over time 7,103,905 2,339,042 2,128,333 894,571 12,465,851
At a point in time 904,276 10,418 - 33,512 948,206
8,008,181 2,349,460 2,128,333 928,083 13,414,057
Segment contribution 4,792,250 2,051,762 1,413,971 471,184 8,729,167
Unallocated costs (4,965,859)
Other income 6,409
Operating profit before
federal royalty 3,769,717
Federal royalty (2,078,812)

Operating profit 1,690,905
Finance income/costs and
share of profit of
investments accounted for
using equity method (net) 62,087
Profit for the year 1,752,992
The Group’s assets and liabilities have not been identified to any of the reportable segments as the majority
of the operating fixed assets are fully integrated between segments. The Group believes that it is not
practical to provide segment disclosure relating to total assets and liabilities since a meaningful segregation
of available data is not feasible.
(72)

35 Comparatives
Change in the presentation of consolidated statement of comprehensive income
During 2019, the Group has changed the categorisation and presentation of its expenses in the ‘consolidated
statement of comprehensive income’ from ‘by nature’ to ‘by function’, both of which are allowed as per
International Financial Reporting Standards. Accordingly, the presentation of comparative information for
the year ended 31 December 2018 has been amended to be consistent with the current year presentation.
There is no impact of the change on revenues, finance costs, provision for impairment of trade receivables
and contract assets, total amount of expenses or on profit for the year.
The table below shows the impact of the change in classification of various expenses for the year ended
31 December 2018:
Presentation of expenses by nature AED'000 Presentation of expenses AED'000

by function
Interconnect costs 2,954,075 Operating expenses 9,406,225

Product costs 1,335,156
Depreciation and impairment on
property, plant and equipment 1,472,046
Amortisation and impairment of
intangible assets 249,370
Staff costs 1,018,455
Network operation and maintenance 755,640
Outsourcing and contracting 422,955
Commission 388,105
Telecommunication license and
related fees 217,358
Rent and utilities 125,852
Marketing expenses 317,140
Other expenses 150,073
9,406,225
There is no change to the consolidated statement of financial position presentation or amounts as a result
of the above change.
(73)

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Emirates Integrated Telecommunications Company PJSC and Its Subsidiaries Consolidated Financial Statements For The Year Ended 31 December 2019

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Emirates Integrated Telecommunications

Company PJSC and its subsidiaries

Consolidated financial statements

Independent auditors’ report 1–8

Consolidated statement of financial position 9

Consolidated statement of comprehensive income 10

Consolidated statement of changes in equity 11

Consolidated statement of cash flows 12

Notes to the consolidated financial statements 13 – 73

Tel: +971 (0) 4 376 8888

August 17th, 2016

INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF

REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

We have audited the consolidated financial statements of Emirates Integrated Telecommunications

Basis for Opinion

Key Audit Matters

Other Information (continued)

Auditor’s responsibilities for the audit of the consolidated financial statements

Consolidated statement of comprehensive income

Other comprehensive (loss)/income

Basic and diluted earnings per share (AED) 28 0.38 0.39

Consolidated statement of changes in equity

Adjusted balance at 1 January

Transfer to statutory reserve - - 175,299 (175,299) -

At 1 January 2019 4,532,906 232,332 1,601,993 2,144,507 8,511,738

At 31 December 2019 4,532,906 232,332 1,764,640 2,118,877 8,648,755

Profit for the year 1,730,954 1,752,992

Cash flows from investing activities

Cash flows from financing activities

Notes to the consolidated financial statements

The Company has either directly or indirectly the following subsidiaries:

Smart Dubai Platform Project Software development, IT 100% 100% UAE

Notes to the consolidated financial statements

2 Basis of preparation (continued)

(i) Functional and presentation currency

(ii) Basis of consolidation

2.1 New standards, amendments and interpretations

 IFRS 16, ‘Leases’ (effective from 1 January 2019).

Notes to the consolidated financial statements

2 Basis of preparation (continued)

2.1 New standards, amendments and interpretations (continued)

Less: contract assessed as service agreements (343,028)

 Right-of-use assets – increase by AED 2,109 million

Notes to the consolidated financial statements

2 Basis of preparation (continued)

2.1 New standards, amendments and interpretations (continued)

(i) Impact on consolidated statement of financial position

Notes to the consolidated financial statements

2 Basis of preparation (continued)

2.1 New standards, amendments and interpretations (continued)

Revenue 12,587,958 - 12,587,958

Operating expenses (8,629,821) (9,947) (8,639,768)

Other comprehensive loss (7,420) - (7,420)

Basic and diluted earnings per share (AED) 0.38 0.39

Notes to the consolidated financial statements

2 Basis of preparation (continued)

2.1 New standards, amendments and interpretations (continued)

Effective for annual periods beginning after 1 January 2020

 Amendments to IAS 1 and IAS 8 regarding the definition of ‘material’;