Emirates Integrated Telecommunications Company PJSC and Its Subsidiaries Consolidated Financial Statements For The Year Ended 31 December 2020

Emirates Integrated Telecommunications
Company PJSC and its subsidiaries
Consolidated financial statements

for the year ended 31 December 2020
Emirates Integrated Telecommunications Company PJSC and its subsidiaries
Consolidated financial statements

Pages
Independent auditors’ report 1–7
Consolidated statement of financial position 8
Consolidated statement of comprehensive income 9
Consolidated statement of changes in equity 10
Consolidated statement of cash flows 11
Notes to the consolidated financial statements 12 – 68

Deloitte & Touche (M.E.)
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Dubai
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 2020, 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 notes to the financial statements,
including a summary of significant accounting policies.
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 2020, 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), 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
Revenue recognition and related IT systems
The Group reported revenue of AED 11.1 billion from Our audit procedures included a combination of
telecommunication and related activities. controls testing, data analytics and other substantive
procedures, but were not limited to, the following:
We focused on this area of the audit as there is an
inherent risk related to revenue recognition given the • performing enhanced risk assessment procedures
complexity of the systems and changing mix of in response to the significant economic disruption
business products and services, including a variety of associated with the COVID-19 pandemic and
plans available for consumer and enterprise customers, increasing audit effort to challenge whether the
tariff structures, roaming and international hubbing revenue recognition criteria adopted for significant
(‘wholesale’) agreements, site sharing agreements, revenue streams is appropriate and in accordance
incentive programmes and discounts. with IFRSs;
• obtaining an understanding of the significant
Due to the estimates made, complexities involved and revenue processes including performance of an end
judgements applied in the revenue process and the to end walkthrough of the revenue process and
degree of complexity of IT systems and processes identifying the relevant controls (including
used, we have considered this matter as a key audit Information Technology (“IT”) systems,
matter. interfaces, revenue assurance and reports);
• testing the design and implementation as well as
The Group’s accounting policies relating to revenue the operating effectiveness of the relevant controls;
recognition are presented in note 3 and details about • involving our internal IT specialists to test IT
the Group’s revenue are disclosed in note 34 to the general controls, system interfaces,
consolidated financial statements. data/information reporting and application specific
controls surrounding relevant revenue systems;
• reviewing significant new contracts on a sample
basis and the regulatory pronouncements, the
accounting treatments adopted and testing the
related revenues recognised during the year;
• performing data analysis and substantive analytical
procedures of significant revenue streams;
• reviewing key reconciliations performed by the
Revenue Assurance team;
• performing test of details on non-routine
adjustments processed by management which are
outside of normal billing platform;
• performing specific procedures to test the accuracy
and completeness of adjustments relating to
grossing up certain revenue and costs; and
• assessing the disclosures in the consolidated
financial statements against the requirements of
IFRSs.
Federal royalty computation
The federal royalty is a significant charge levied In responding to this risk, our audit procedures included,
against regulated revenues of the Group and against but were not limited to, the following:
operating profits, based on fixed percentages, as
disclosed in Note 2.3 to the consolidated financial • obtaining an understanding of the process used by
statements. management to determine the federal royalty charge
and related accrual.
The federal royalty charge for the year is AED 1.5 • testing the design and implementation of the relevant
billion for the year with an accrual of AED 1.6 billion controls over the calculation of the federal royalty
as at 31 December 2020. charge;
• holding meetings with management to discuss the
We focused on this area of the audit as the royalty
federal royalty calculation and inspecting
calculations are subject to significant judgements,
correspondence from the MOF relating to this matter;
interpretations and assumptions in respect of the
definition of regulated items, the determination of • assessing the judgements applied in the calculation of
certain allowable deductions and allocated costs and the federal royalty for the current year against the
the treatment of royalties on site sharing transactions. guidelines provided by the MOF and the
abovementioned correspondence;
These are also subject to change from time to time as • evaluating the classification of regulated and non-
detailed in the guidelines provided by the United Arab regulated revenues in the calculation of the federal
Emirates Ministry of Finance (“the MoF”) are royalty on the telecommunication operations;
amended or as clarifications are received from the • testing the allocation of indirect costs on nonregulated
MoF. activities based on clarifications received from the
MOF;
Accordingly, the computation of the federal royalty for • evaluating the exclusion of items which were not
the year ended 31 December 2020 is considered to be a included in the calculation of the federal royalty
key audit matter. against the guidelines and the clarifications received
from the MOF;
The critical accounting estimates made and judgements • reperforming the arithmetical accuracy of the
applied by management are disclosed in note 2.3 and calculation of the federal royalty for the year; and
further details about the federal royalty are disclosed in • assessing the disclosures in the consolidated financial
note 27 to the consolidated financial statements statements against the requirements of IFRSs.
Carrying value of goodwill
As at 31 December 2020, the carrying value of We tested the goodwill impairment models and the key
goodwill amounted to AED 413 million, or 2.60 % of assumptions used by management with the involvement of
total assets as disclosed in Note 8 to the consolidated our valuation specialists. Our audit procedures included, but
financial statements. were not limited to, the following:
An entity is required to test goodwill acquired in a • understanding the business process for the impairment
business combination for impairment at least annually assessment, identifying the relevant internal controls
irrespective of whether there is any indication of and testing their design, implementation and operating
impairment. The Group has recorded an impairment effectiveness of controls over the impairment
loss of AED 135.8 million in relation to the assessment process, including indicators of
Broadcasting business for the year ended 31 December impairment;
2020 in accordance with IAS 36 Impairment of Assets. • evaluating whether the cash flows in the models used
by management to calculate the recoverable value are
An impairment is recognised when the recoverable in accordance with IAS 36 Impairment of Assets;
amount is less than the net carrying amount in • obtaining and analysing the approved business plans
accordance with IAS 36, as described in Note 3 to the for each such asset (or CGU, as applicable) to assess
consolidated financial statements. The determination of accuracy of the computations and the overall
the recoverable amount is mainly based on discounted reasonableness of key assumptions;
future cash flows. • comparing actual historical cash flow results with
previous forecasts to assess forecasting accuracy;
In addition, the recoverable amounts are based on the • Evaluating and challenging the Group’s cash flow
use of important assumptions, estimates or assessments forecasts based on historical forecasting accuracy and
made by management, in particular future cash flow external data (i.e. external industry and broker reports)
projections, the estimate of the discount rates and long- to substantiate management’s growth forecasts and
term growth rates. management’s assessment on the impact of COVID-
19 on the Group;
Uncertainty in the estimations have increased as
• assessing the methodology used by the Group to
COVID-19 has led to significant market volatility
estimate the Weighted Average Cost of Capital
through the year 2020, including an increase in country
(WACC) and benchmarking that with discount rates
risk premium which also leads to additional complexity
used by other similar businesses external sector related
in determining the appropriate discount rate.
guidelines;
• benchmarking assumptions on long term growth rates
The critical accounting estimates made and judgements
applied by management are disclosed in note 2.3 and of local GDP and long term inflation expectations with
further details about the impairment of goodwill is external sources of data published by global monetary
agencies;
disclosed in note 8 to the consolidated financial
statements. • benchmarking the values with market multiples where
applicable;
We considered the impairment of goodwill to be a key • performing sensitivity analysis on the key assumptions
audit matter, given the method for determining the used by management to understand the extent to which
recoverable amount and the significance of the amount these assumptions need to be adjusted before resulting
in the Group’s consolidated financial statements. in additional impairment loss; and
• assessing the disclosure in the consolidated financial
statements relating to goodwill against the
requirements of IFRSs.
Other Information
Management is responsible for the other information. The other information comprises the Board of
Directors’ report 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.
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 (as
amended) 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.
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.
Auditor’s responsibilities for the audit of the consolidated financial statements (continued)
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.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Further, as required by the UAE Federal Law No. (2) of 2015 (as amended), we report that:
• We have obtained all the information we considered necessary for the purposes of our audit;
• The consolidated financial statements have been prepared and comply, in all material respects, with
the applicable provisions of the UAE Federal Law No. (2) of 2015 (as amended);
• The Group has maintained proper books of account;
• The financial information included in the Board of Directors’ report is consistent with the books of
account of the Group;
• As disclosed in note 10 to the consolidated financial statements, the Group has made investments in a
Joint Venture during the financial year ended 31 December 2020;
• Note 15 to the consolidated financial statements discloses material related party transactions and
balances, and the terms under which they were conducted;
• Based on the information that has been made available to us, nothing has come to our attention which
causes us to believe that the Company has contravened during the financial year ended 31 December
2020 any of the applicable provisions of the UAE Federal Law No. (2) of 2015 (as amended) or of its
Articles of Association which would materially affect its activities or its financial position as at 31
December 2020; and
• Note 26 to the consolidated financial statements discloses the social contributions made by the Group
during the year ended 31 December 2020.
Deloitte & Touche (M.E.)
Rama Padmanabha Acharya

Registration Number 701
8 February 2021
Dubai
United Arab Emirates
Consolidated statement of comprehensive income

For the year ended 31 December
2020 2019
Notes AED 000 AED 000
Revenue 34 11,083,845 12,587,958
Operating expenses 26 (8,253,903) (8,629,821)
Expected credit losses on contract assets, trade
receivables and due from related parties (net of
recoveries) (227,353) (210,610)
Other income 13,904 2,860
Federal royalty 27 (1,511,938) (2,029,008)
Finance income 28 50,575 124,052
Finance costs 28 (105,859) (124,990)
Impairment of goodwill 8 (135,830) -
Share of profit of investments accounted for using
equity method 10 10,099 10,513
Gain on disposal of investment accounted for using
equity method 10.1 519,374 -
Profit for the year 1,442,914 1,730,954
Other comprehensive (loss)/income

Items that may be re‐classified subsequently
to profit or loss
Fair value changes on cash flow hedge 25 (520) (10,448)
Items that will not be re‐classified to profit or loss

Actuarial gain on defined benefit obligations 20 19,451 3,028
Other comprehensive income/(loss) for the year 18,931 (7,420)
Total comprehensive income for the year attributable
entirely to shareholders of the Company 1,461,845 1,723,534
Basic and diluted earnings per share (AED) 29 0.32 0.38
The notes on pages 12 to 68 form an integral part of these consolidated financial statements. (9)
Consolidated statement of changes in equity
Other
Share Share reserves Retained
capital premium (Note 25) earnings Total
AED 000 AED 000 AED 000 AED 000 AED 000
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 paid - - - (997,239) (997,239)
Interim cash dividend paid - - - (589,278) (589,278)
At 31 December 2019 4,532,906 232,332 1,764,640 2,118,877 8,648,755
At 1 January 2020 4,532,906 232,332 1,764,640 2,118,877 8,648,755

Profit for the year - - - 1,442,914 1,442,914
Other comprehensive
(loss)/income - - (520) 19,451 18,931
Total comprehensive income - - (520) 1,462,365 1,461,845
-
Transfer to statutory reserve - - 144,291 (144,291) -
Final cash dividend paid* - - - (951,910) (951,910)
Interim cash dividend paid** - - - (589,278) (589,278)
At 31 December 2020 4,532,906 232,332 1,908,411 1,895,763 8,569,412
*For the year 2019, a final cash dividend of AED 0.21 per share amounting to AED 951,910 thousand was
approved by the shareholders at the Annual General Meeting held on 14 April 2020 and was paid in May 2020.
**For the year 2020, an interim cash dividend of AED 0.13 per share amounting to AED 589,278 thousand
was proposed on 21 July 2020 and paid in August 2020.
For the year 2020, a final cash dividend of AED 0.15 per share amounting to AED 679,936 thousand is
proposed.
Consolidated statement of cash flows

For the year ended 31 December
2020 2019
Notes AED 000 AED 000
Cash flows from operating activities
Profit for the year 1,442,914 1,730,954
Adjustments for:
Depreciation and impairment of property, plant and equipment 6 1,346,997 1,387,189

Depreciation of right-of-use assets 7 362,409 319,818
Amortisation and impairment of intangible assets 8 181,018 226,129
Loss on disposal of property, plant and equipment 1,032 -
Provision for employees’ end of service benefits 20 32,970 35,283
Loss allowance on contract assets 13 9,099 2,440
Loss allowance on trade receivables 14 219,996 215,414
Loss allowance on due from related parties 15 25,007 -
Finance income 28 (50,575) (124,052)
Finance costs 28 105,859 124,990
Impairment of goodwill 8 135,830 -
Adjustment for change in discount/inflation rates 21 1,239 259
Unwinding of discount on asset retirement obligations 21 6,953 4,806
Share of profit of investments accounted for using equity
method 10 (10,099) (10,513)
Gain on disposal of investment accounted for using equity -
method 10.1 (519,374)
Changes in working capital 30 1,430,256 1,463,163
Cash generated from operations 4,721,531 5,375,880
Royalty paid (net) 27 (1,950,078) (2,069,210)
Payment of employees’ end of service benefits 20 (26,312) (34,647)
Net cash generated from operating activities 2,745,141 3,272,023
Cash flows from investing activities

Purchase of property, plant and equipment (1,834,580) (1,186,639)
Purchase of intangible assets (174,414) (164,640)
Proceeds from disposal of property, plant and equipment 126 -
Payment for additional investments accounted for using equity
method 10 (31,000) (70,256)
Proceeds from disposal of investment accounted for using equity
method 800,000 -
Interest received 116,543 157,522
Margin on guarantees released 1,535 1,355
Term deposits released (net) 919,374 1,051,299
Net cash used in investing activities (202,416) (211,359)
Cash flows from financing activities

Repayment of lease liabilities (240,917) (128,448)
Repayment of borrowings 19 (716,332) (1,461,318)
Dividends paid (1,541,188) (1,586,517)
Interest paid on borrowings and lease liabilities (98,073) (116,422)
Net cash used in financing activities (2,596,510) (3,292,705)
Net decrease in cash and cash equivalents (53,785) (232,041)
Cash and cash equivalents at 1 January 264,657 496,698
Cash and cash equivalents at 31 December 17 210,872 264,657
Notes to the consolidated financial statements

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 2020 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
2020 2019
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)
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 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.
(i) Functional and presentation currency
The individual financial statements of each of the Group’s subsidiaries, associates and joint venture 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.
(12)

for the year ended 31 December 2020 (continued)
2 Basis of preparation (continued)

(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 statements from the date that control commences until the date that control
ceases.
(iii) Going concern
The directors have, at the time of approving the consolidated financial statements, a reasonable expectation
that the Group have adequate resources to continue in operational existence for the foreseeable future. Thus
they continue to adopt the going concern basis of accounting in preparing the consolidated financial
statements.
2.1 New standards, amendments and interpretations
(a) Amendment to standards and interpretations issued and effective during the financial year
beginning 1 January 2020.
 Amendments to references to the Conceptual Framework in IFRS standards

Amendments to References to the Conceptual Framework in IFRS Standards related 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.
 Definition of Business - amendments to IFRS 3

The amendments clarify that to be considered a business, an integrated set of activities and assets
must include, at a minimum, an input and a substantive process that together significantly
contribute to the ability to create output. IASB also clarify that a business can exist without
including all of the inputs and processes needed to create outputs. That is, the inputs and processes
applied to those inputs must have ‘the ability to contribute to the creation of outputs’ rather than
‘the ability to create outputs’.
 Definition of Material – amendments to IAS 1 and IAS 8

The new definition states that, ‘Information is material if omitting, misstating or obscuring it could
reasonably be expected to influence decisions that the primary users of general purpose financial
statements make on the basis of those financial statements, which provide financial information
about a specific reporting entity.’
 Interest Rate Benchmark Reform – amendments to IFRS 9, IAS 39 and IFRS 7

The amendments in Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS
7) clarify that entities would continue to apply certain hedge accounting requirements assuming
that the interest rate benchmark on which the hedged cash flows and cash flows from the hedging
instrument are based will not be altered as a result of interest rate benchmark reform.
(13)

2.1 New standards, amendments and interpretations (continued)
 Covid-19-Related Rent Concessions – amendments to IFRS 16
The amendment provides lessees with an exemption from assessing whether a COVID-19-related rent
concession is a lease modification. This is effective for periods beginning on or after 1 June 2020.
The above stated new standards and amendments are not expected to have any significant impact on
consolidated financial statements of the Group except Covid-19 Related Rent Concessions – amendments
to IFRS 16, details given below:
In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16) that provides
practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-
19, by introducing a practical expedient to IFRS 16. The practical expedient permits a lessee to elect not
to assess whether a COVID- 19-related rent concession is a lease modification. A lessee that makes this
election shall account for any change in lease payments resulting from the COVID-19-related rent
concession the same way it would account for the change applying IFRS 16 if the change were not a lease
modification.
The practical expedient applies only to rent concessions occurring as a direct consequence of COVID-19
and only if all of the following conditions are met:
a) The change in lease payments results in revised consideration for the lease that is substantially the same
as, or less than, the consideration for the lease immediately preceding the change;
b) Any reduction in lease payments affects only payments originally due on or before 30 June 2021 (a rent
concession meets this condition if it results in reduced lease payments on or before 30 June 2021 and
increased lease payments that extend beyond 30 June 2021); and
c) There is no substantive change to other terms and conditions of the lease.
In the current financial year, the Group has applied the amendment to IFRS 16.
Impact on accounting for changes in lease payments applying the exemption
The Group has applied the practical expedient retrospectively to all rent concessions that meet the above
mentioned conditions and has not restated prior period figures.
The waiver of lease payments of AED 6,080 thousand has been accounted for as other income in statement
of comprehensive income. The Group has derecognised the part of the lease liability that has been
extinguished by the forgiveness of lease payments.
The Group has remeasured the lease liability using the revised lease payments and the discount rate
originally applied to the lease, resulting in a decrease in the lease liability of AED 6,080 thousand, which
has been recognised as other income in consolidated statement of comprehensive income. The Group
continued to recognize interest expense on the lease liability.
(14)

2.1 New standards, amendments and interpretations (continued)
(b) New standards and amendments issued but not yet effective
 Classification of Liabilities as Current or Non-Current - amendments to IAS 1 (effective from

1 January 2023). The amendments aim to promote consistency in applying the requirements by
helping companies determine whether, in the statement of financial position, debt and other liabilities
with an uncertain settlement date should be classified as current (due or potentially due to be settled
within one year) or non-current;
 Reference to the Conceptual Framework - Amendments to IFRS 3 (effective from 1 January 2022).
The amendments update an outdated reference to the Conceptual Framework in IFRS 3 without
significantly changing the requirements in the standard;
 Property, Plant and Equipment - Proceeds before Intended Use - amendments to IAS 16 (effective
from 1 January 2022). The amendments prohibit deducting from the cost of an item of property, plant
and equipment any proceeds from selling items produced while bringing that asset to the location and
condition necessary for it to be capable of operating in the manner intended by management. Instead,
an entity recognises the proceeds from selling such items, and the cost of producing those items, in
profit or loss;
 Onerous Contracts - Cost of Fulfilling a Contract - amendments to IAS 37 (effective from 1 January
2022). The amendments specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate
directly to the contract’. Costs that relate directly to a contract can either be incremental costs of
fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that
relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge
for an item of property, plant and equipment used in fulfilling the contract);
 IFRS 17: Insurance Contracts (effective from 1 January 2023). IFRS 17 requires insurance liabilities
to be measured at a current fulfilment value and provides a more uniform measurement and
presentation approach for all insurance contracts. These requirements are designed to achieve the goal
of a consistent, principle-based accounting for insurance contracts. IFRS 17 supersedes IFRS 4
Insurance Contracts as at January 1, 2023; and
 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 an investor
to its associate or joint venture.
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.
(15)


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.
2.3 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, the management is required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period
or in the period of the revision and future periods if the revision affects both current and future periods.
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are disclosed below:
Critical accounting judgements
(i) 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 21.
(ii) 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.
(iii) 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.
(16)

2.3 Critical accounting judgements and key sources of estimation uncertainty (continued)
Critical accounting judgements (continued)
(iii) Allocation of the transaction price (continued)
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.
(iv) 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). The assessment is reviewed if a significant event or a significant change in
circumstances occurs which affects this assessment and that is within the control of the lessee.
Key sources of estimation uncertainty
(i) Provision for expected credit losses of contract assets, trade receivables and due from related
parties
The Group recognises a loss allowance for expected credit losses (ECL) on its contract assets, trade
receivables and due from related parties. 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 contract assets, trade receivables and due from related parties, 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 contract assets, trade receivables and due from related parties, 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.
(17)

2.3 Critical accounting judgements and key sources of estimation uncertainty (continued)
Key sources of estimation uncertainty (continued)
(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.
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. An
impairment of AED 135,830 thousand is recognised on the goodwill in the current year. The sensitivity
analysis in respect of recoverable amount of the CGUs is prescribed in Note 8 to the consolidated financial
statements.
(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 3.2.
(v) 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.
2.4 COVID-19 updates
In January 2020, the World Health Organization (“WHO”) announced a global health emergency because
of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 Outbreak”). Subsequently
(March 2020), the WHO classified COVID-19 Outbreak as a pandemic based on the rapid increase in
exposure and infections across the world. The pandemic nature of this virus resulted in global travel
restrictions and total lockdown in most countries of the world between March and May 2020. Due to the
unprecedented adverse effect of the lockdown on the global economy and some success in the efforts to
flatten the infection curve, many countries started easing the lock down restrictions at the end of Q2 2020.
(18)

2.4 COVID-19 updates (continued)
In Q3 2020, the UAE government started re-opening the economy with gradual resumption of international
flights, re-opening of offices, malls, etc. with some additional safety measures around social distancing,
use of masks, increased COVID-19 testing (including tests at airport arrivals), etc. These measures allowed
first signs of the start of recovery in several business activities.
In Q4 2020, the economic activity continued to improve and further releases of restrictions on mobility
were introduced allowing an important increase in the tourist activity. The approval of few vaccines and
the start of their deployment boosted the general sentiment about a close exit to the crisis.
However, the increase in the number of infections particularly towards the end of the year and the risk of a
second wave in many countries led to a higher level of uncertainty and re-introduced doubts about the speed
of recovery.
Although the Group has been able to gradually improve its assessment of the COVID-19 impact on the
business, the surge in the number of infections during Q4 introduced a new element of volatility. Also, the
complete impact of the pandemic on the UAE population and economy in general requires further data,
time and analysis. The Group will continue monitoring the evolution of the situation and adjust its
operations in a dynamic manner to cope with an acceleration or a deceleration of the recovery.
From accounting perspective, the Group continued to assess the Expected Credit Loss (ECL) from trade
receivables and contract assets and accounted for such in the consolidated financial statements in
accordance with the requirements of IFRS 9. The Group also assessed the potential impacts of the current
situation across all relevant areas of the business; specifically relating to going concern, impairment of
assets and inventory, impairment of goodwill, subsidiary accounting, etc., with no material impact except
impairment of goodwill related to broadcasting business as disclosed in Note 8.
3 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are
set out below:
3.1 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.
(19)

3 Summary of significant accounting policies (continued)
3.1 Consolidation (continued)
(a) Subsidiaries (continued)
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.
3.2 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.
(20)

3.2 Property, plant and equipment (continued)
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.
3.3 Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases. The Group recognises
lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying
assets.
(21)

3.3 Leases (continued)
Group as a lessee (continued)
i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Right-of-use assets
are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of
the assets, as follows:
Year
Land and building 2-25

Furniture and fixtures 8-13
Motor vehicle 2
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the
exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Right-of-use assets are assessed for impairment annually as per non-financial assets impairment policy
given in Note 3.17.2.
ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value
of lease payments to be made over the lease term. The lease payments include fixed payments (including
in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on
an index or a rate. The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term
reflects the Group exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they
are incurred to produce inventories) in the period in which the event or condition that triggers the payment
occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate
at the lease commencement date because the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest
and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate used to determine such lease payments) or a change
in the assessment of an option to purchase the underlying asset.
(22)

3.3 Leases (continued)
Group as a lessor
The Group also enters into lease agreements as a lessor. Leases for which the Group is a lessor are classified
as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified
as operating leases.
When the Group is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate
contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset
arising from the head lease.
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant
lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognised on a straight-line basis over the lease term.
Amounts due from lessees under finance leases are recognised as lease receivables at the amount of the
Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to
reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.
Subsequent to initial recognition, the Group regularly reviews the estimated unguaranteed residual value
and applies the impairment requirements of IFRS 9, recognising an allowance for expected credit losses
on the lease receivables.
Finance lease income is calculated with reference to the gross carrying amount of the lease receivables,
except for credit-impaired financial assets for which interest income is calculated with reference to their
amortised cost (i.e. after a deduction of the loss allowance).
When a contract includes both lease and non-lease components, the Group applies IFRS 15 to allocate the
consideration under the contract to each component.
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.
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.
(23)

3.4 Intangible assets (continued)
Goodwill (continued)
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 indefeasible 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
Indefeasible 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.
Capital work in progress includes assets which are under development 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 software in use and amortised in accordance with the Group’s
policies. No amortisation is charged on such assets until available for use.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from
use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference
between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss
when the asset is derecognised.
3.5 Associates and joint venture
An associate is an entity over which the Group has significant influence. Significant influence is the power
to participate in the financial and operating policy decisions of the investee, but is not control or joint
control over those policies. A joint venture is a type of joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require the unanimous consent of the parties sharing control.
(24)

3.5 Associates and joint venture
The considerations made in determining significant influence or joint control are similar to those necessary
to determine control over subsidiaries. The Group’s investment in its associate and joint venture are
accounted for using the equity method.
Under the equity method, the investment in an associate or a joint venture is initially recognised at cost.
The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets
of the associate or joint venture since the acquisition date. Goodwill relating to the associate or joint venture
is included in the carrying amount of the investment and is not tested for impairment separately.
The statement of profit or loss reflects the Group’s share of the results of operations of the associate or
joint venture. Any change in OCI of those investees is presented as part of the Group’s OCI. In addition,
when there has been a change recognised directly in the equity of the associate or joint venture, the Group
recognizes its share of any changes, when applicable, in the statement of changes in equity. Unrealised
gains and losses resulting from transactions between the Group and the associate or joint venture are
eliminated to the extent of the interest in the associate or joint venture.
The aggregate of the Group’s share of profit or loss of an associate and a joint venture is shown on the face
of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-
controlling interests in the subsidiaries of the associate or joint venture.
The financial statements of the associate or joint venture are prepared for the same reporting period as the
Group. When necessary, adjustments are made to bring the accounting policies in line with those of the
Group.
After application of the equity method, the Group determines whether it is necessary to recognise an
impairment loss on its investment in its associate or joint venture. At each reporting date, the Group
determines whether there is objective evidence that the investment in the associate or joint venture is
impaired. If there is such evidence, the Group calculates the amount of impairment as the difference
between the recoverable amount of the associate or joint venture and its carrying value, and then recognises
the loss as ‘Share of profit of investments accounted for using equity method’ in the statement of profit or
loss.
Upon loss of significant influence over the associate or joint control over the joint venture, the Group
measures and recognises any retained investment at its fair value. Any difference between the carrying
amount of the associate or joint venture upon loss of significant influence or joint control and the fair value
of the retained investment and proceeds from disposal is recognised in profit or loss.
3.6 Inventories
Inventories are measured at the lower of cost and net realisable value. Cost comprises direct materials and
where applicable, directs labour costs and those overheads that have been incurred in bringing the
inventories to their present location and condition. It excludes borrowing costs. Allowance is made, where
appropriate, for deterioration and obsolescence. Cost is determined in accordance with the weighted
average cost method. Net realisable value represents the estimated selling price less all estimated costs of
completion and costs to be incurred in marketing, selling and distribution.
(25)


3.7 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.
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 the Group
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.
3.8 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.
3.9 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.
3.10 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.
3.11 Financial instruments
3.11.1 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.
(26)

3.11 Financial instruments (continued)
3.11.1 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.
(27)

3.11.1 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) (continued)
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.
3.11.2 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.
3.11.3 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 12.
Movement in the hedging reserve in shareholders’ equity is shown in Note 25. 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.
(28)

3.11.3 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.
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.
3.11.4 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.
(29)

3.12 Share capital
Ordinary shares are classified as equity.
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.
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.
(30)

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 Credit 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 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.
(31)

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.
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.
(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 and contract assets.
(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.
(32)

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.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s
foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense
items are translated at the average exchange rates for the period, unless exchange rates fluctuate
significantly during that period, in which case the exchange rates at the date of transactions are used.
Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in a
foreign exchange translation reserve. Since the presentation currency of the Group and its subsidiaries AED
or USD which is pegged to AED, there is no foreign currency translation reserve at reporting date.
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.
(33)


3.19 Revenue recognition (continued)
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.
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, SMS/MMS, VAS 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 recognition for voice, data, SMS/MMS, VAS or
other services is over the period when these services are provided to the customers.
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.
(34)


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.
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 by using the most likely amount method. Variable consideration
adjusted to the transaction price at contract inception.
Contract Modification
Contract modifications exist when the parties to the contract approve a modification that creates or changes
the enforceable rights and obligations of the parties to the contract.
A modification is accounted for as either a separate contract (Accounted for prospectively) or as part of the
existing contract (accounted through a cumulative catch-up adjustment). This assessment is to be based on
whether:
(a) the modification adds distinct goods and services and
(b) the distinct goods and services are priced at their standalone selling prices.
If the modification results only in a change in price of the contract, then that change is allocated to separate
performance obligations under the contract on the same basis as at contract inception including the satisfied
performance obligations at the date of modification. This will result in a cumulative catchup adjustment to
revenue.
If the modification results in change in scope of the contract adding distinct goods or services at a price
reflecting their standalone selling price the contract is accounted for as a new contract till the end of the
contract term.
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.
(35)

Significant financing component (continued)
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.
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 provide.
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.
(36)

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.
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.
(37)

5 Financial risk management (continued)
5.1 Financial risk factors (continued)
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.
(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, contract assets and due from related parties
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.
The Group recognises lifetime ECL for trade receivables, contract assets and due from related parties, 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. 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, contract assets and due from related parties is
given in Note 32.1.
(38)

(a) Credit risk (continued)
Trade receivables, contract assets and due from related parties (continued)
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.
Ratings Term deposits Cash and bank balances

2020 2019 2020 2019
AED 000 AED 000 AED 000 AED 000
Aa3 - - 63,982 515

A1 - - 32,526 14,784
A+ - - 5,211 7,821
A2 275,000 225,000 6,949 7,493
A3 - 375,000 4,909 79,422
A- 400,000 475,000 - 3,641
AA- 350,000 - - -
Baa1 - - 52,479 116,120
Baa2 - - 14,030 -
BBB+ 1,005,000 1,875,000 3,235 3,756
Others - - 30,150 36,442
2,030,000 2,950,000 213,471 269,994
Less: loss allowance (673) (1,299) (96) (1,299)
2,029,327 2,948,701 213,375 268,695
(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.
(39)

(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, 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.
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.
(40)

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.
2020 2019
AED 000 AED 000
Total borrowings (Note 19) - 716,332

Less: Cash and bank balances/term deposits (Notes 16 and 17) (2,242,702) (3,217,396)
Net debt (2,242,702) (2,501,064)
Total equity 8,569,412 8,648,755
Total capital 6,326,710 6,147,691
Gearing ratio (35%) (41%)
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 in 2019 and the borrowings were fully repaid in 2020.
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).
(41)

5.3 Fair value estimation (continued)

In AED’000
Level 1 Level 2 Level 3 Total
At 31 December 2020
Financial asset at fair value through other
comprehensive income (Note 11) - - 18,368 18,368
Derivative financial instruments (Note 12) - - - -
- - 18,368 18,368
At 31 December 2019
comprehensive income (Note 11) - - 18,368 18,368
Derivative financial instruments (Note 12) - 520 - 520
- 520 18,368 18,888
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. 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).
(42)

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 2019 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
Additions 15 1,210,437 6,129 - 469,567 1,686,148
Addition: asset retirement obligations - 9,343 - - - 9,343
Transfers - 456,458 8,319 - (464,777) -
Disposals/write-off - (196,207) (6,359) (35) (646) (203,247)
At 31 December 2020 52,532 19,934,123 327,900 4,403 610,990 20,929,948
Depreciation / impairment
At 1 January 2019 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
Reclassifications (Note 6.1) - 8,879 - - 14,558 23,437
Charge for the year 2,273 1,316,038 17,746 385 30 1,336,472
Disposals/write-off - (194,303) (6,126) (35) (29) (200,493)
Impairment charge - 2,247 1,024 - 7,254 10,525
At 31 December 2020 33,449 12,444,290 288,694 3,849 96,244 12,866,526
Net book value
At 31 December 2020 19,083 7,489,833 39,206 554 514,746 8,063,422
At 31 December 2019 21,341 7,142,663 43,761 939 532,415 7,741,119
The carrying amount of the Group’s buildings include a nominal amount of AED 2 (2019: AED 2) in relation plots of to land granted to the Group by the UAE Government.
(43)

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 management has identified certain PPE assets for which
accumulated depreciation was recorded under intangible assets instead of PPE, therefore re-classified from
intangible assets to PPE.
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 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
Additions 696,817 - - 696,817

Transfer to lease receivable (177,425) - - (177,425)
Re-measurement 14,778 - - 14,778
Disposals (51,002) - (144) (51,146)
At 31 December 2020 2,482,982 945 2,572 2,486,499
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
Charge for the year 361,103 100 1,206 362,409

Disposals (31,019) - (144) (31,163)
At 31 December 2020 632,493 200 2,377 635,070
Net book value
At 31 December 2020 1,850,489 745 195 1,851,429
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. Short term and low value leases are also included in right of
use assets.
The maturity analysis of lease liabilities is presented in (Note 18).
2020 2019
AED 000 AED 000
Amounts recognised in consolidated statement of comprehensive income
Depreciation expense on right-of-use assets (Note 26) 362,409 319,818
Interest expense on lease liabilities (Note 28) 86,454 78,541
s
(44)

8 Intangible assets and goodwill

2020 2019
AED 000 AED 000
Goodwill 413,220 549,050

Intangible assets 486,995 502,396
900,215 1,051,446
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:
2020 2019
AED 000 AED 000
Broadcasting operations - 135,830

Fixed line business 413,220 413,220
413,220 549,050
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 was lower than the carrying amount of its net
assets including goodwill, by AED 137,010 thousands. As a result of this analysis, the Group has recognised
an impairment charge of AED 135,830 thousand in the current year against broadcasting CGU goodwill
and AED 1,180 thousand against related assets. The impairment charge of AED 135,830 thousand on
broadcasting CGU goodwill is presented separately on consolidated statement of comprehensive income
and AED 1,180 thousand related to broadcasting CGU assets is disclosed in operating expenses under
“depreciation and impairment on property, plant and equipment” Note 26.
The estimated recoverable amount of the fixed line business CGU exceeded its carrying amount by
approximately 191%.
The key assumptions for the value-in-use calculations at 31 December 2020 include:
- 5 year revenue growth projections for the fixed line business and broadcasting operations;
- a pre-tax discount rate of 10.62% (2019: 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.
(45)

8 Intangible assets and goodwill (continued)
Sensitivity analysis
The Group has conducted an analysis of the sensitivity of the impairment test to changes in the key
assumptions used to determine the recoverable amount for each of the CGUs to which goodwill is allocated.
For broadcasting business CGU, any adverse movement in key assumptions (1% underperformance against
forecast revenue or 1% increase in discount rate) would lead to further impairment.
For fixed line business CGU, any adverse movement in key assumptions (1% underperformance against
forecast revenue or 1% increase in discount rate) would not result in an impairment charge.
Intangible assets
Capital Telecomm- Indefeasible
Software work in unications rights of
in use progress license fees use Total
Cost
At 1 January 2019 2,205,237 132,591 124,500 185,451 2,647,779
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
Additions 25,899 108,230 - 8,055 142,184
Transfers 21,706 (21,706) - - -
Write off (54) - - - (54)
At 31 December 2020 2,444,079 183,895 124,500 207,359 2,959,833
Amortisation/impairment
At 1 January 2019 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
Reclassifications* (4,244) (19,194) - - (23,438)
Charge for the year 158,304 - 6,223 16,404 180,931
Impairment charge 87 - - - 87
Write off (49) - - - (49)
At 31 December 2020 2,137,555 41,208 92,516 201,559 2,472,838
Net book value

At 31 December 2020 306,524 142,687 31,984 5,800 486,995
At 31 December 2019 413,071 36,969 38,207 14,149 502,396
(46)

8 Intangible assets and goodwill (continued)
Intangible assets
* The management has identified certain PPE assets for which accumulated depreciation was recorded
under intangible assets instead of PPE, therefore re-classified from intangible assets to PPE (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.
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.
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. 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.
9 Lease receivable
Current Non-current
2020 2019 2020 2019
AED 000 AED 000 AED 000 AED 000
Lease receivable 18,213 - 149,963 -
During the year Group signed a sub-lease agreement to lease its data centre with a customer for a period of
10 years.
10 Investments accounted for using the equity method
Dubai Smart City Accelerator FZCO

During the year 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

The Group had 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. In September 2020, the ownership in this associate
has been disposed (Note 10.1).
Advanced Regional Communication Solutions Holding Limited

In 2019, the Group signed a Shareholder Agreement (“SHA”) with Bahrain Telecommunications Company
(B.S.C.) to form a limited liability private company (“the Joint Venture”). The joint venture has been
incorporated with the name of Advanced Regional Communication Solutions Holding Limited (ARC
Limited) in UAE. The Group has 50% ownership in shares of ARC Limited. The principal activity of the
joint venture is provision of connectivity and data centre services.
(47)

10 Investments accounted for using the equity method (continued)
Movement in investments in associates and joint venture

2020
Associates Joint venture Total
AED 000 AED 000 AED 000
At 1 January 268,948 - 268,948

Investments during the year - 31,000 31,000
Share of profit/(loss) for the year 12,620 (2,521) 10,099
Disposal of investment during the year (Note 10.1) (280,212) - (280,212)
At 31 December 1,356 28,479 29,835
2019
AED 000 AED 000 AED 000
At 1 January 188,179 - 188,179

Investments during the year 70,256 - 70,256
Share of profit for the year 10,513 - 10,513
At 31 December 268,948 - 268,948
Summarised financial information for the associates and joint venture are as follows:
Associate and joint venture statement of financial position as of 31 December and statement of
comprehensive income for the year ended 31 December:
2020
AED 000 AED 000 AED 000
Non-current assets 5,038 246 5,284

Current assets 741 63,915 64,656
Current liabilities (9) (7,208) (7,217)
Non-current liabilities - - -
Net assets 5,770 56,953 62,723
Revenue 156,127 4,113 160,240

Profit/(loss) for the year 37,689 (5,042) 32,647
(48)

10 Investments accounted for using the equity method (continued)
2019
AED 000 AED 000 AED 000
Non-current assets 1,444,602 - 1,444,602

Current assets 121,556 - 121,556
Current liabilities (162,106) - (162,106)
Non-current liabilities (457,379) - (457,379)
Net assets 946,673 - 946,673
Revenue 149,618 - 149,618

Profit for the year 38,264 - 38,264
10.1 Gain on disposal of investment accounted for using equity method

On 14 September 2020, EITC Investment Holding, a fully owned subsidiary of EITC Group, signed with
Technology Holding Company, a fully owned subsidiary of Mubadala, a sale and purchase agreement to
sell its 26% shareholding (including its interest in shareholder loans) in Khazna Data Center Limited for a
consideration of AED 800 million.
On 30 September 2020 the transaction was concluded and EITC Group received the AED 800 million cash
consideration. The impact of this transaction on the financial statements is reflected as per the below:
2020 2019
AED 000 AED 000
Consideration received in cash 800,000 -

Less: carrying value of the investment (280,212) -
Less: transaction cost (414) -
Gain on disposal 519,374 -
11 Financial asset at fair value through other comprehensive income
2020 2019
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.
(49)

12 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 19).
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.
As of 31 December, the fair value of derivative financial instruments was as follows:
2020 2019
AED 000 AED 000
Interest rate swap contracts – cash flow hedges - 520
The related movement in derivative financial instruments is shown under hedge reserve (Note 25.2).
During the year 2020 borrowings has been fully repaid and related interest rate swap contract is also settled.
There was no ineffectiveness during 2020 and 2019 in relation to the interest rate swap contracts.
13 Contract assets and contract liabilities
Current Non-current
2020 2019 2020 2019
AED 000 AED 000 AED 000 AED 000
Contract assets* 493,153 509,191 226,618 218,353

Less: provision for impairment of
contract assets (39,052) (35,996) (15,402) (9,359)
454,101 473,195 211,216 208,994
*Contract assets include unamortised subscriber acquisition costs (contract costs) amounting to
AED 314,288 thousands (2019: AED 304,097 thousands).
13.1 The movement in the allowance for expected credit losses of contract assets is as follows:
2020 2019
AED 000 AED 000
1 January 45,355 42,915

Charge during the year 9,099 2,440
31 December 54,454 45,355
(50)

13 Contract assets and contract liabilities (continued)

Current Non-current
2020 2019 2020 2019
AED 000 AED 000 AED 000 AED 000
Contract liabilities 358,538 377,019 195,149 193,095
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 contracts with customers are for periods of one year or less or are billed based on service provided.
As permitted under IFRS 15, the transaction price allocated to the unsatisfied contracts is not disclosed.
14 Trade and other receivables

2020 2019
AED 000 AED 000
Trade receivables 1,761,251 1,941,223

Due from other telecommunications operators* 103,472 201,176
Less: provision for impairment of trade receivables and due from other
telecommunications operators (646,099) (662,358)
Trade receivables, net 1,218,624 1,480,041
Prepayments 124,726 95,355
Advances to suppliers 240,829 178,544
Other receivables** 142,222 116,616
Total trade and other receivables 1,726,401 1,870,556
*Due from other telecommunications operators are presented after netting of payable balances (where right
to set off exists) amounting to AED 862,534 thousand (31 December 2019: AED 833,130 thousand).
**Other receivables mainly include interest receivable on term deposits.
The Group’s normal credit terms ranges between 15 and 150 days (2019: 15 and 150 days). No interest is
charged on the trade and other receivable balances.
The movement in the allowance for expected credited losses of trade receivables and due from other
telecommunications operators is as follows:
2020 2019
AED 000 AED 000
At 1 January 662,358 759,281

Charge for the year 219,996 215,414
Write-off during the year (227,571) (312,337)
Transfer of provision to due from related parties (8,684) -
At 31 December 646,099 662,358
(51)

15 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 are Emirates Investment Authority, Mamoura Diversified Global
Holding PJSC & Emirates International Telecommunications Company L.L.C. Transactions with related
parties are in the ordinary course of business and are approved by the Group’s management or by the Board
of Directors.
Related party balances
2020 2019
AED 000 AED 000
Due from related parties
Axiom Telecom LLC (Entity under common shareholding) 105,695 106,045
Injazat Data Systems LLC (Entity under common shareholding) 63,193 58,950
ARCS Bahrain S.P.C (Subsidiary of a joint venture) 790 -
ARCS Holding Limited (Joint venture) 3,882 -
173,560 164,995
Less: Loss allowance (33,691) -
139,869 164,995
The movement in loss allowances for due from related parties is as follows:
2020 2019
AED 000 AED 000
Reclassified from trade and other receivables 8,684 -

Expected credit losses during the period 25,007 -
Closing balance 33,691 -
Due to related parties

Khazna Data Center Limited (Associate) 2,684 4,103
Tecom Investments FZ LLC (Entity under common shareholding) 2,426 1,970
Closing balance 5,110 6,073
Due to the short term nature of related party balances, their carrying amount is considered to be the same as
their fair values.
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 in
the ordinary course of business. The following table reflects the gross value of transactions with related
parties.
2020 2019
AED 000 AED 000
Net revenue 948,070 1,395,937

Rent and services 35,168 148,322
Recharge of operating expenses incurred on behalf of joint venture 3,882 -
Additional funding to associate and joint venture 31,000 70,256
Sale of an associate to a related party (Note 10.1) 800,000 -
(52)

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

2020 2019
AED 000 AED 000
Short term employee benefits 30,628 39,520

Employees’ end of service benefits 245 706
Post-employment benefits 1,245 1,311
Long term incentives 4,000 7,463
36,118 49,000
Board of Directors fee during the year was AED 10,000 thousand (2019: AED 10,000 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 27 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.
16 Term deposits
2020 2019
AED 000 AED 000
Term deposits 2,030,000 2,950,000

Less: loss allowance (673) (1,299)
2,029,327 2,948,701
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.
(53)

17 Cash and bank balances
For the purposes of the consolidated statement of cash flows, cash and cash equivalents comprise:
2020 2019
AED 000 AED 000
Cash at bank (on deposit and call accounts) 213,264 269,278

Cash on hand 784 716
Less: loss allowance (673) (1,299)
Cash and bank balances 213,375 268,695
Less: margin on guarantees (Note 31) (2,503) (4,038)
Cash and cash equivalents 210,872 264,657
18 Lease liabilities
2020 2019
AED 000 AED 000
At 1 January 1,856,805 2,137,074
Lease liabilities during the year 696,817 122,521
Interest expense during the year 86,454 78,541
Payments made during the year (327,371) (206,989)
Re-measurement during the year 14,778 51,752
Disposals during the year (18,860) (326,094)
Closing balance 2,308,623 1,856,805
Current Non-current
2020 2019 2020 2019
AED 000 AED 000 AED 000 AED 000
Lease liabilities 616,896 460,005 1,691,727 1,396,800
2020 2019
AED 000 AED 000
Maturity analysis:
Not later than 1 year 692,269 529,436
Later than 1 year and not later than 5 years 1,082,705 994,699
Later than 5 years 733,887 665,826
2,508,861 2,189,961
Less: unearned interest on lease liabilities (200,238) (333,156)
2,308,623 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.
(54)

19 Borrowings
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 440,820 - (440,820) -
Unsecured
Unsecured
716,332 - (716,332) -
The borrowings were fully repaid during the year.
20 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 2020 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:
2020 2019
AED 000 AED 000
At 1 January 258,740 252,564

Current service cost 32,970 35,283
Interest cost (Note 28) 8,090 8,568
Actuarial gain recognised in other comprehensive income* (19,451) (3,028)
Benefits paid during the year (26,312) (34,647)
At 31 December 254,037 258,740
*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 437 thousand
(2019: AED 306 thousand ), experience adjustments amounting to AED 18,053 thousand (2019: AED 2,722
thousand) and demographic assumptions amounting to AED 961 thousand (2019: AED nil)
(55)

20 Provision for employees’ end of service benefits (continued)
The provision is recognised based on the following significant actuarial assumptions:
2020 2019
Average period of employment (years) 7.05 7.50

Average annual rate of salary increase 2.00% 2.77%
Discount rate 2.50% 3.57%
Through its defined benefit plan, the Group is exposed to a number of actuarial risks, the most significant of
which include, longevity risk, withdrawal risk and salary increase risk.
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
2020 2019 2020 2019 2020 2019
Average period of employment (years) 1 year 1 year (0.37%) (0.29 %) 0.39% 0.22%
Average annual rate of salary increase 1% 1% 7.61% 8.48% (6.84%) (7.57%)
Discount rate 1% 1% (6.30%) (7.01%) 7.13% 7.99%
21 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.
2020 2019
AED 000 AED 000
At 1 January 169,832 115,764

Additions during the year 6,557 49,003
Adjustment for change in discount/inflation rates 1,239 259
Unwinding of discount 6,953 4,806
At 31 December 184,581 169,832
The provision is recognised based on the following significant assumptions:

2020 2019
Average period of restoration (years) 10 10

Inflation rate 1.94% 1.80%
Discount rate 3.87% 3.96%
(56)

22 Trade and other payables

2020 2019
AED 000 AED 000
Trade payables and accruals 1,438,164 1,675,211

Due to other telecommunications operators* 593,085 523,658
Accrued federal royalty (Note 27) 1,624,832 2,062,972
Valued Added Tax (VAT) payable 4,829 8,987
Other payables and accruals 330,887 329,504
3,991,797 4,600,332
*Due to other telecommunications operators are presented after netting of receivable balances (where
right to set off exists) amounting to AED 862,534 thousand (31 December 2019: AED 833,130 thousand).
The carrying amounts of trade and other payables approximate their fair value.
23 Share capital
2020 2019
AED 000 AED 000
Authorised, issued and fully paid up share capital
(4,532,905,989 shares of AED 1 each) 4,532,906 4,532,906
24 Share premium
2020 2019
AED 000 AED 000
Premium on issue of common share capital 232,332 232,332
25 Other reserves
Statutory reserve Hedge reserve
(Note 25.1) (Note 25.2) Total
AED 000 AED 000 AED 000
At 1 January 2019 1,591,025 10,968 1,601,993

Transfer to statutory reserve 173,095 - 173,095
Fair value changes on cash flow hedge - (10,448) (10,448)
At 31 December 2019 1,764,120 520 1,764,640
At 1 January 2020 1,764,120 520 1,764,640

Transfer to statutory reserve 144,291 - 144,291
Fair value changes on cash flow hedge - (520) (520)
At 31 December 2020 1,908,411 - 1,908,411
25.1 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.
25.2 Hedge reserve is related to derivative financial instrument (Note 12).

(57)

26 Operating expenses
31 December
2020 2019
AED 000 AED 000
Interconnect costs 2,552,170 2,811,216

Depreciation and impairment on property, plant and equipment (Note 6) 1,346,997 1,387,189
Staff costs 979,194 934,169
Product costs 833,451 894,253
Network operation and maintenance 703,448 633,682
Telecommunication license and related fees 390,813 407,575
Commission 367,064 390,423
Depreciation on right-of-use assets (Note 7) 362,409 319,818
Outsourcing and contracting 196,435 222,229
Amortisation and impairment on intangible assets (Note 8) 181,018 226,129
Marketing 150,629 250,082
Others 190,275 153,056
8,253,903 8,629,821
During the year ended 31 December 2020, the Group has paid AED 1,055 thousand (2019: AED 1,555
thousand) for various social contribution purposes.
In order to conform with current year presentation, the items “network operation and maintenance”,
“outsourcing and contracting” and “other expenses” for the year ended 31 December 2019 were presented
reflecting certain reclassifications to ensure comparability with 2020 figures. Without these
reclassifications the figures should have been AED 526,756 thousand, AED 360,504 thousand and AED
121,707 thousand respectively.
27 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.
2020 2019
AED 000 AED 000
Total revenue for the year (Note 34) 11,083,845 12,587,958

Broadcasting revenue for the year (148,214) (160,825)
Other allowable deductions (3,232,266) (3,521,026)
Total adjusted revenue 7,703,365 8,906,107
Profit before royalty 2,954,852 3,759,962
Allowable deductions (467,439) (113,425)
Total regulated profit 2,487,413 3,646,537
(58)

27 Federal royalty (continued)

2020 2019
AED 000 AED 000
Charge for royalty: 15% of the total adjusted revenue plus 30% of net
regulated profit for the year before distribution (after deducting 15% of
the total adjusted revenue). 1,555,077 2,029,103
Adjustments to charge (43,139) (95)

Charge for the year 1,511,938 2,029,008
Movement in the royalty accruals is as follows:
At 1 January 2,062,972 2,103,174

Payment made during the year (net) (1,950,078) (2,069,210)
Charge for the year 1,511,938 2,029,008
At 31 December (Note 22) 1,624,832 2,062,972
28 Finance income and costs

2020 2019
AED 000 AED 000
Finance income
Interest income 47,771 124,052
Finance income on lease receivable 2,804 -
50,575 124,052
Finance costs
Interest expense on lease liabilities 86,454 78,541
Interest expense others* 20,528 46,824
Exchange (gain)/loss, net (1,123) (375)
105,859 124,990
*Interest expense others includes interest cost on defined benefit obligations amounted to AED 8,090
thousand (2019: AED 8,568 thousand) (Note 20).
29 Earnings per share

2020 2019
Profit for the year (AED 000) 1,442,914 1,730,954

Weighted average number of shares (‘000’) 4,532,906 4,532,906
Basic and diluted earnings per share (AED) 0.32 0.38
Diluted earnings per share have not been presented separately as the Group has no commitments that would
dilute earnings per share.
(59)

30 Changes in working capital

2020 2019
AED 000 AED 000
Change in:
Inventories 50,282 17,516
Contract assets 7,773 20,315
Trade and other receivables (141,809) (275,706)
Trade and other payables 1,531,281 1,805,374
Contract liabilities (16,427) (64,658)
Due from related parties 119 (35,917)
Due to related parties (963) (3,761)
Net changes in working capital 1,430,256 1,463,163
31 Contingencies and commitments
The Group has outstanding bank guarantees amounting to AED 82,647 thousand (2019: AED 70,626). Bank
guarantees are secured against margin of AED 2,503 thousand (2019: AED 4,038 thousand) (Note 17).
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 the
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.
The Group has outstanding capital commitments amounting to AED 1,282,735 thousand (2019:
AED 1,321,653 thousand).
(60)

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

2020 2019 2020 2019
AED 000 AED 000 AED 000 AED 000
Derivatives
Interest rate swap contracts – cash flow
hedges 12 - 520 - 520
Non-derivatives
18,368 18,368 18,368 18,368
comprehensive income 11
Lease receivable 168,176 - 168,176 -
Contract assets 13 351,028 378,092 351,028 378,092
Trade and other receivables 14 1,360,846 1,596,657 1,360,846 1,596,657
Due from related parties 15 139,869 164,995 139,869 164,995
Term deposits 16 2,029,327 2,948,701 2,029,327 2,948,701
Cash and bank balances 17 213,375 268,695 213,375 268,695
4,280,989 5,375,508 4,280,989 5,375,508
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 679,844 thousand (2019: AED
577,996 thousand) have been excluded from contract assets, trade and other receivables and due from related
parties.
Impairment of contract assets, trade receivables and due from related parties
The ageing of contract assets, trade receivables and due from related parties as follows:
Gross Impaired Impaired Gross Impaired Impaired

2020 2020 2020 2019 2019 2019
AED 000 % AED 000 AED 000 % AED 000
Not past due 903,126 1.29% (11,658) 1,082,462 2.85% (30,803)

Past due 0-30 days 232,426 9.06% (21,051) 263,433 7.55% (19,894)
Past due 31-180 days 546,139 11.59% (63,303) 491,235 14.11% (69,335)
More than 180 days 1,624,609 39.29% (638,232) 1,726,841 34.03% (587,681)
3,306,300 (734,244) 3,563,971 (707,713)
Non-financial assets (subscriber acquisition costs, prepayments and advances to suppliers) amounting to
AED 679,844 thousand (2019: AED 577,996 thousand) have been excluded from contract assets, trade
receivables and due from related parties.
(61)

32 Financial instruments and risk management (continued)
32.1 Credit risk (continued)
Impairment of contract assets, trade receivables and due from related parties (continued)
To measure the expected credit losses, contract assets, trade receivables and due from related parties have
been grouped based on shared credit risk characteristics and the days past due. The expected credit losses
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, trade receivables and due from related parties 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 2020
---------------- 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
Trade payables and
accruals 1,438,164 1,438,164 1,438,164 1,438,164 - - -
Due to other
telecommunication
operators 593,085 593,085 593,085 593,085 - - -
Accrued royalty 1,624,832 1,624,832 1,624,832 1,624,832 - - -
Valued Added Tax
(VAT) Payable 4,829 4,829 4,829 4,829 - - -
Other payables and
accruals 330,887 330,887 330,887 330,887 - - -
Due to related
parties 5,110 5,110 5,110 5,110 - - -
3,996,907 3,996,907 3,996,907 3,996,907 - - -
(62)

32.2 Liquidity risk (continued)
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 - - -
Contractual maturities related to lease liabilities disclosed in Note 18.
32.3 Currency risk
Exposure to currency risk
The Group’s exposure to foreign currency risk was as follows:
31 December 2020 31 December 2019

------------ Thousand ------------- ------------ Thousand ------------
EUR GBP EUR GBP
Trade receivables 5,360 329 11,614 451
Trade payables (59) (416) - (161)
Net exposure 5,301 (87) 11,614 290
The following significant exchange rates against AED have been applied during the year:
Average rate Reporting date spot rate

2020 2019 2020 2019
EUR 1 4.1624 4.1327 4.4879 4.1195
GBP 1 4.6856 4.7017 5.0246 4.8722
(63)

32.3 Currency risk (continued)
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.
2020 2019
AED 000 AED 000
Increase/(decrease) in profit
EURO (2,206) (4,800)
GBP 41 (136)
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
2020 2019
AED 000 AED 000
Variable interest rate instruments
Bank borrowings - 716,332
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.
2020 2019
AED 000 AED 000
Decrease in profit
Variable interest rate instruments - 7,139
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 12).
(64)

32.5 Financial instruments by category
The accounting policies for financial instruments have been applied to the line items below:
2020 2019
AED 000 AED 000
Derivative financial instruments - 520
Financial asset at fair value through other comprehensive income 18,368 18,368
Financial assets measured at amortised cost

Lease receivable 168,176 -
Contract assets 351,028 378,092
Trade and other receivables 1,360,846 1,596,657
Due from related parties 139,869 164,995
Term deposits 2,029,327 2,948,701
Cash and bank balances 213,375 268,695
4,262,621 5,357,140
Lease liabilities 2,308,624 1,856,805
Borrowings - 716,332
Trade and other payables 3,991,797 4,600,332
Due to related parties 5,110 6,073
6,305,531 7,179,542
For the purpose of the financial instruments disclosure, non-financial assets amounting to AED 679,844
thousand (2019: AED 577,996 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.
(65)

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 2020 and 31 December 2019.
31 December 2020 31 December 2019

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 2,588,935 (862,534) 1,726,401 2,703,686 (833,130) 1,870,556
Total 2,588,935 (862,534) 1,726,401 2,703,686 (833,130) 1,870,556
Financial liabilities
Trade and other payables 4,854,331 (862,534) 3,991,797 5,433,462 (833,130) 4,600,332
Total 4,854,331 (862,534) 3,991,797 5,433,462 (833,130) 4,600,332
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.
(66)

34 Segment analysis (continued)
31 December 2020
Mobile Fixed Wholesale Others Total
Segment revenue
Timing of revenue
recognition
Over time 5,454,339 2,562,418 1,800,823 766,097 10,583,677
At a point in time 481,756 6,191 - 12,221 500,168
5,936,095 2,568,609 1,800,823 778,318 11,083,845
Segment contribution 3,428,069 2,193,145 1,288,179 416,662 7,326,055
Unallocated costs (4,723,466)
Other income 13,904
Federal royalty (1,511,938)
Finance income/costs,
impairment of goodwill and
share of profit of investments
accounted for using equity
method (net) (181,015)
Gain on disposal of
investment accounted for
using equity method 519,374
Profit for the year 1,442,914
(67)

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
Federal royalty (2,029,008)
Finance income/costs and
share of profit of
investments accounted for
using equity method (net) 9,575
Profit for the year 1,730,954
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.
35 Comparatives
In order to conform with current year presentation, the comparative figures for the previous year has been
regrouped, where necessary. Such regrouping did not affect the previously reported profit, comprehensive
income or equity.
36 Subsequent events
The Federal Decree-Law No. 26 of 2020 on the amendment of certain provisions of Federal Law No. 2
of 2015 on Commercial Companies was issued on 27 September 2020 and shall take effect starting from
the 2 January 2021. The Group shall apply and adjust their status in accordance with the provisions thereof
(to the extent applicable) by no later than one year from the date on which this Decree-Law takes effect.
(68)

Emirates Integrated Telecommunications Company PJSC and Its Subsidiaries Consolidated Financial Statements For The Year Ended 31 December 2020

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Emirates Integrated Telecommunications Company PJSC and Its Subsidiaries Consolidated Financial Statements For The Year Ended 31 December 2020

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Emirates Integrated Telecommunications

Company PJSC and its subsidiaries

Consolidated financial statements

Consolidated financial statements

Independent auditors’ report 1–7

Consolidated statement of financial position 8

Consolidated statement of comprehensive income 9

Consolidated statement of changes in equity 10

Consolidated statement of cash flows 11

Notes to the consolidated financial statements 12 – 68

Tel: +971 (0) 4 376 8888

August 17th, 2016

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Deloitte & Touche (M.E.)

Rama Padmanabha Acharya

Consolidated statement of comprehensive income

Other comprehensive (loss)/income

Items that will not be re‐classified to profit or loss

Basic and diluted earnings per share (AED) 29 0.32 0.38

Consolidated statement of changes in equity

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

Transfer to statutory reserve - - 173,095 (173,095) -

At 1 January 2020 4,532,906 232,332 1,764,640 2,118,877 8,648,755

At 31 December 2020 4,532,906 232,332 1,908,411 1,895,763 8,569,412

Consolidated statement of cash flows

Depreciation and impairment of property, plant and equipment 6 1,346,997 1,387,189

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

(i) Functional and presentation currency

Notes to the consolidated financial statements

2 Basis of preparation (continued)

(iii) Going concern

 Amendments to references to the Conceptual Framework in IFRS standards

 Definition of Business - amendments to IFRS 3

 Definition of Material – amendments to IAS 1 and IAS 8

 Interest Rate Benchmark Reform – amendments to IFRS 9, IAS 39 and IFRS 7

Notes to the consolidated financial statements

2 Basis of preparation (continued)

2.1 New standards, amendments and interpretations (continued)

 Covid-19-Related Rent Concessions – amendments to IFRS 16

c) There is no substantive change to other terms and conditions of the lease.

Impact on accounting for changes in lease payments applying the exemption

Notes to the consolidated financial statements

2 Basis of preparation (continued)

2.1 New standards, amendments and interpretations (continued)

 Classification of Liabilities as Current or Non-Current - amendments to IAS 1 (effective from

Notes to the consolidated financial statements

2 Basis of preparation (continued)

2.3 Critical accounting judgements and key sources of estimation uncertainty

Critical accounting judgements

(i) Asset retirement obligations