Etisalat Annual Report 2015 - English Edition (PDF)

Key Highlights of 2015

Business snapshots

Chairman’s statement

Board of Directors

Our Journey

CEO’s Statement

Management Team

Etisalat Strategic Piller

key events of the year

Operational Highlights

Etisalat group’s Footprint

UAE

Sauadi Arabia

Egypt

Morrocco

Nigeria

Pakistan

Human Resorces

Corporate Social Responsibility

Corporate Governance

Financials

Notice of General Annual Shareholders Meeting

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Head Office:Etisalat BuildingIntersection of Zayed The 1st Street andSheikh Rashid Bin Saeed Al Maktoum StreetP.O. Box 3838, Abu Dhabi, UAE

Regional Offices:Abu Dhabi, Dubai, Northern Emirates

05Etisalat Group04 Annual Report 2015

51.7AED

Billion Revenue

26.6AED

Billion EBITDA

8.3AED

Billion Net Profit

10.3AED

Billion CAPEX

80Fils

Dividend per share

167Million

Aggregate subscribers


Our aspiration is to be the leading and most admired emerging markets telecom group by consistently and pro-actively serving our customers with a common set of brand values based on innovation, customer centricity and building trusted relationships. This is evidenced by our key strategic pillars of owning and managing an attractive, well balanced portfolio of assets; providing differentiated, innovative service offerings that leverage our high quality infrastructure and networks; and a superior customer experience.

In 2015, in keeping with these goals and values, Etisalat Group completed the sale of our assets in West Africa, integrating this region into the Maroc Telecom Group and optimizing the value of our portfolio. This resulted in the creation of West Africa’s largest Francophone telecom group. 2015 also saw the completion of Etisalat’s sale of our 85% shares in Tanzania’s Zanzibar Telecom.

The Etisalat Group business model continues to be guided by the central principle of meeting and exceeding customers’ expectations. We aspire to achieve this through the continued investment in our networks and provision of innovative service offerings, ensuring that we provide our customers with the best possible experience. At the same time, we have continued our practice of high cash generation, so that we can continue to reward our shareholders and grow our business. We have sustained a generous dividend programme with close to AED 18 billion returned to shareholders in the past 3 years, including 10% bonus share.

Over the years, we have maintained a high level of capital expenditure to support wider coverage, higher speeds and greater capacity in our networks. With over 167 million customers, we are one of the world’s fastest growing telecom operators, with access to close to one billion people in the markets we operate in. The majority of our customers

and the bulk of our growing mobile customer base are in Africa and Asia.

We believe that voice is still a growth area that we intend to tap into with the continued upgrade of our networks; however our primary focus is on securing a leadership position in the more lucrative data segment. To that end, we have in the recent past invested in spectrum licences in Morocco, Mauritania, Pakistan, Afghanistan, Benin and Cote D’Ivoire to support our push into mobile data services and to support future growth.

Our focus is on leveraging our technology platforms to deliver innovative products and services that offer both economic and social benefits to our customers. We aspire to transform the communities we operate in, be it through enhancing financial services access, or enhancing the access to and quality of healthcare and education in remote areas.

Meanwhile, Etisalat Group continues to be committed to being a responsible global corporate citizen through strategic partnerships that enhance access to education and healthcare via the use of technology. These efforts are greatly contributing to bridging the gap in terms of access within the communities we serve, while generating impressive digital dividends in the form of jobs, economic growth and stability.

For nearly 40 years, Etisalat has helped the UAE sustain its position as the region’s hub for business, trade and foreign investment by providing reliable, high quality services. This was accomplished through Etisalat’s heavy investment in advanced world class networks where both fibre-to-the-home (FTTH) and LTE roll-out exceeds 90 percent coverage of the population.

Due to these investments, the UAE today demonstrates leadership in regional

technology innovation and deployment, and leads the world in terms of high-speed broadband penetration. The country enjoys one of the highest smartphone penetration rates in the world, with over 80 percent mobile consumers now using smartphones.

In the years to come, Etisalat Group plans to lead the way in terms of growth and innovation within the UAE’s multi-billion-dollar telecom market, with particular focus on the ICT segment.

Our business model is based on meeting our customers’ expectations through continued investment in our networks to support wider coverage, higher speeds and greater capacity, and to provide innovative service offerings.


2015 was a year of achievement, which has consolidated our position as a leading telecommunications operator in emerging markets

As we reflect on 2015 as a year of achievement, we should also recognise the significant milestones we have reached this year. While our achievements this year have consolidated our position as a leading telecommunications operator in emerging markets, our eyes must also remain on the future. We are witnessing a period of rapid development in the global telecommunication industry, where the only constant is the speed and acceleration of change. Our four decades of expertise and experience puts us in a strong position to adapt to this rapidly changing environment and take advantage of the opportunities before us.

The wise leadership of the UAE has played an important role in making 2015 a significant milestone in Etisalat Group’s journey of growth. I want to laud the Government’s historic decision to allow investors from local and foreign institutions, as well as non-local individuals, to own equity in Etisalat Group. This decision embodied a new phase in the journey of Etisalat Group, allowing it to realise its goals of more growth and prosperity, which will simultaneously have a positive impact on both shareholders and the financial market.

In this respect, consolidated annual revenues reached AED 51.7 billion, while

net profits, after the federal royalty, reached AED 8.3 billion. And in line with our strategy of finding added value for our shareholders, Etisalat Group Board has recommended the distribution of dividends to be of 80 fils per share for the year 2015.

Embodying our strategic role in providing innovative solutions which transform the communities in which we work, Etisalat Group is heavily involved in the development of Smart Cities. Etisalat Group has been given great responsibility in this aspect and we look forward to implementing the next phase, helping to achieve the vision and ambitions of the UAE Government about Smart cities and digital transformation.

Last year also witnessed an important development in the field of network sharing. The Telecommunications Regulatory Authority formally introduced network sharing in the UAE. This will no doubt have a positive impact on the telecommunications sector in the country, providing an incentivised competitive environment, which will boost performance and innovation in the country, to the benefit of operators and subscribers, in equal measure.

It is as the enabler of the technological future that Etisalat Group will continue

to have a significant role to play. The platforms and networks that we are investing in today will provide the basis for industrial growth, improved government services and enhanced personal experiences. By providing the technological support for a better life for individuals and communities across our footprint, it will also provide new sources of revenue to guarantee continuous profitability.

2015 was indeed a historic year in the journey of Etisalat Group. Our expertise, experience and success in 2015 are a source of strength, making us more determined and resilient as we move on to a new chapter in the Etisalat Group story. I want to thank the wise Government of the UAE for their constant support, our customers for their loyalty and trust in us for delivering the latest technology and services, our shareholders for their support, which enhances our ability to move forward, and the commitment of all Etisalat Group employees and the Etisalat Group management for their dedicated work.

Eissa Mohamed Al SuwaidiChairman - Etisalat Group


Eissa Mohamed Ghanem Al SuwaidiChairman of the BoardChairman of Investment & Finance Committee

Sheikh Ahmed Mohd Sultan Bin Suroor Al DhahiriVice chairman Member of Audit Committee

Mohamed Hadi Ahmed Abdulla Al HussainiBoard Member Member of Investment & Finance Committee

Abdulfattah Sayed Mansoor SharafBoard MemberMember of Investment & Finance Committee

Abdulla Salem Obaid Salem Al Dhaheri Board Member Member of Nomination & Remuneration Committee

Abdelmonem Bin Eisa Bin Nasser AlserkalBoard Member Member of Nomination & Remuneration Committee

Mohamed Sultan Abdulla Mohamed AlhameliBoard Member Chairman of Nomination & Remuneration Committee

Hesham Abdulla Qassim Al Qassim Board Member Member of Nomination & RemunerationCommittee

Otaiba Khalaf Ahmed Khalaf Al Otaiba Board Member Member of Investment & Finance Committee

Hasan Al HosaniCompany Secretary

Essa Abdulfattah Kazim Al MullaBoard Member Chairman of Audit Committee

Khalid Abdulwahed Hassan AlrostamaniBoard Member Member of Audit Committee



As we prepare to enter our fifth decade as a company, Etisalat Group’s perfor-mance in 2015 reflects our history of solid performance and innovation. The financial results seen in 2015 have con-solidated our position as a leading oper-ator in emerging markets. As a result, we are well-placed to meet the challenges of the fast-evolving telecommunication sector and move forward with confi-dence to provide greater value for our shareholders and meet the aspirations of the millions of our customers across our international footprint.

We are adapting to this evolution admi-rably so far, even though there is more work to do. And while it is important to recognise the challenges, it is just as im-portant to recognise our achievements. Our results in 2015 continue our long-term pattern of success; a clear indica-tion that we remain in a strong position. Group revenues grew by 7 per cent to reach AED 51.7 billion with Operating Profit before Federal Royalty rising by 14 per cent. Despite the challenges the industry faced in 2015, we were still able to deliver strong profits of AED 8.3 bil-lion and with a subscriber base of 167 million. The main source of revenue growth was the UAE, our most important market, which grew by 6% driven by a higher subscriber base and the strong performance of the mobile and fixed broadband segments. Performance of our international operations was muted by unfavourable movements in foreign exchange rates and currently make up 44% of Group consolidated revenues. Operating margins improved to 51%

supported by the strong performance of UAE operations and higher contribu-tion from Maroc Telecom Group. Group capital expenditure of AED 10.3 billion, represented 20% of the Group consoli-dated revenue. We allocated AED 4.9 bil-lion - about 48% of consolidated capital expenditure - to the UAE market given our unwavering commitment to provide a state-of-the-art telecommunications network to the citizens of the UAE, and reflecting the higher revenue per sub-scriber in the market. In international markets, we progressed with strategic investments that included; acquiring 4G license and launching of 4G+ services in Morocco, in addition to license acquisi-tion and renewal in Ivory Coast, Niger and Mauritania.

To be able to benefit from future oppor-tunities, we need to be at the forefront of progress today. Only by investing today can we deliver the future growth that will ensure our continued prosperity. One ex-ample of this approach, is delivering the objective we share with the UAE Govern-ment, to be one of the first countries in the world to have the fifth generation of mobile technology that is vital in deliver-ing the Smart City solutions, which will shape the next stage of human develop-ment.

At the heart of this digital revolution is the mobile phone. It is the constant in all our lives and will be the fundamen-tal element of everything that we do. The smartphone will be your identity, your wallet, your access to services and entertainment; ubiquitous to individuals

and business. In 2015 we expanded our Mobile Connect service, which helps cus-tomers to manage their Digital Identity and protect privacy on-line, across the majority of our operations. This year we launched Mobile Cashier in five markets within our footprint. It is a first-of-its-kind solution in the region, which enables business customers to manage transac-tions through their mobile phones, and is gradually transforming the SME sector and B2B capability.

Four decades of delivering large-scale projects and extensive ICT skills allows us to provide a value proposition for the digital age, which is end-to-end, scalable and innovative, and positions Etisalat Group firmly as a capable partner for driving economic growth within the markets in which we operate. We are well-placed to deliver the advanced and innovative solutions that will be the key to generating future growth and profitability. Only by adapting and investing today can meet what our consumers aspire to tomorrow and continue to deliver for our shareholders and customers in the next decade of our history and beyond.

Etisalat Group will continue to invest in the innovative products and services that our customers demand today and aspire to tomorrow


Mr. Okandan joined Etisalat in January 2012 as Chief Financial Officer of the Etisalat Group. Prior to his appointment, he was the Group Chief Financial Officer of Turkcell. Mr. Okandan started his professional career at PricewaterhouseCoopers in 1992, and worked for DHL and Frito Lay as a Financial Controller before joining Turkcell. Mr. Okandan is a board member and Chairman of the audit and risk committee of Etisalat Nigeria, PTCL, Ufone, Etisalat Services Holding, a board and audit committee member of Maroc Telecom and a board member of Mobily. Mr. Okandan graduated from Bosphorus University with a degree in Economics.

Mr. Al Sawaleh is the Chief Human Resources Officer (CHRO) of the Etisalat Group. Prior to this position, he was the CHRO of Etisalat UAE. Mr. Al Sawaleh has more than 25 years’ experience in various leadership positions. He is responsible for leading the global Human Capital strategies including the areas of talent development, organization effectiveness, compensation & benefits and Performance Management. Mr.Al Sawaleh is board member of Atlantique Telecom, Etisalat Nigeria, and Etisalat Services Holding and the Chairman of E Marine Board. Mr. Al Sawaleh holds an MBA degree in Global Leadership Management from UAE University and a BBA degree from the USA.

Serkan OkandanChief Financial Officer, Etisalat Group

Abdulaziz Al SawalehChief Human Resources Officer, Etisalat Group

Mr Hatem Dowidar joined Etisalat Group in September 2015 as Group Chief Operating Officer and was appointed as Acting Chief Executive Officer of Etisalat Group in March 9, 2016. Prior to joining Etisalat Group, Mr. Dowidar was latterly Chairman of Vodafone Egypt and Group Chief of Staff for Vodafone Group. Mr Dowidar has over 24 years of experience in multinational companies. He initially joined Vodafone Egypt in its early start-up operation in 1999 as Chief Marketing Officer. After successfully undertaking two group assignments and the role of CEO Vodafone Malta, he became the CEO of Vodafone Egypt from 2009 - 2014.

Hatem DowidarActing Chief Executive Officer, Etisalat Group

Khalifa Al Shamsi was appointed as Chief Digital Services Officer of the EG in 2012. Prior to this role, Mr. Al Shamsi held the position of Senior Vice President of Technology Strategy of the Etisalat Group. Since joining Etisalat in 1993, Mr. Al Shamsi has held various key senior positions including Vice President and Senior Vice President of Marketing of Etisalat UAE. Mr. Al Shamsi serves on the Boards of Mobily and Etisalat Afghanistan, Chair E-vision’s Board and appointed the Managing Director of Mobily. Mr. Al Shamsi has a Bachelor’s degree in Electrical Engineering from the University of Kentucky, USA.

Khalifa Al ShamsiChief Digital Services Officer, Etisalat Group

Mr. Ahizoune has been Chairman of the Maroc Telecom Management Board since February 2001 and served as CEO from 1998 to 2001. Earlier, he was Minister of Telecommunications in four different governments. Mr. Ahizoune has been Chairman of the Moroccan Royal Athletics Federation since 2006, and also serves as a board member of several foundations: Inter Alia; King Mohammed V for solidarity; King Mohammed VI for the environmental protection, and Princess Lalla Salma against cancer. He is also the Vice-President of CGEM and the President of its Moroccan-Emirati economic commission. He holds an engineering degree from Télécom ParisTech.

Mr. Farroukh joined was appointed as CEO of Mobily in July 2015. Prior to joining Mobily, he was CEO for MTN South Africa. He brings over thirty years of experience across Middle East, Africa, North America and Europe. Mr. Farroukh began his career in 1983 as the Finance Manager for Mediterranean Investor Group. After an early career in audit and finance, he joined Investcom in 1996, as Group Finance Controller. He was later appointed as Managing Director for Ghana and Regional Manager for its West Africa operations. Following Investcom’s acquisition by MTN Group, he served as CEO MTN Nigeria, Vice President West and Central Africa and later chief operating officer at MTN Group.

Mr. Metwally was appointed Chief Executive Officer of Etisalat Misr in October 2015. He started his telecom career in 1999 in sales distribution and operations focusing on both consumer and corporate segments. He joined Etisalat Misr in 2006 as Chief Commercial Officer managing sales, marketing, and customer care functions. In 2012, he was promoted to Chief Operating Officer expanding his responsibilities to include Carriers Relations and Wholesale Operations. Mr. Metwally holds a bachelor degree in Telecommunications and Electronics Engineering from Cairo University.

Engineer Saleh Al Abdooli was appointed as Chief Executive Officer of Etisalat UAE in April 2012. A strong and charismatic leader, Saleh rose to international fame after his resounding success in Egypt as the CEO of Etisalat Misr. He built and launched the first 3G operator in Egypt in 7 months. In less than five years, he achieved 27% of revenue share, 28% market share, 36% EBITDA margin, and 99% 2G/3G coverage. Mr Abdooli also serves on the Board of Etisalat Misr and Etisalat Services Holding, Al Abdooli holds Bachelor’s and Master’s in Electrical Eng. and Telecom from University of Colorado at Boulder, USA.

Saleh Al Abdooli Chief Executive Officer, Etisalat UAE

Abdeslam AhizouneChairman of the Management Board, Maroc Telecom

Ahmad FarroukhChief Executive Officer, Mobily

Hazem MetwallyChief Executive Officer, Etisalat Misr


Kamal Shehadi was appointed as Chief Legal & Regulatory Officer of EG in November 2012. He Joined Etisalat in 2010 as Head ofthe Regulatory Department. Prior to that, Dr. Shehadi was the Chairman and CEO of TRA, Lebanon. He has more than 17 years of experience in consulting and advisory services for telecom regulatory authorities and telecom service providers.Dr. Shehadi serves on the board of Atlantique Telecom Holding and Etisalat Nigeria. Dr. Shehadi has a B.A. in Economics from Harvard University and a PhD in International Political Economy from Columbia University, USA.

Obaid Bokisha was appointed as Chief Procurement Officer of the EG in June 2012. Since joining Etisalat, he was assigned various responsibilities contributed to the network implementation of all existing systems covering GSM, UMTS, LTE and WiFi networks. Positions held include Vice President Mobile Networks Planning & Int’l Support of Etisalat UAE and Senior Vice President – Mobile Networks Optimization EG.Mr. Bokisha serves on the board of Canar, and Etisalat Nigeria. Mr. Bokisha has a degree in Communications Engineering from the Etisalat College of Engineering.

Dr. Kamal Shehadi, PhDChief Legal & Regulatory Officer, Etisalat Group

Mr. Hatem Bamatraf was appointed Chief Technology Officer at Etisalat Group in September 2013. Prior to this position he wasthe Executive Vice President of Enterprise Business at Du. Hatem began his professional career in 1995 at Etisalat and was seconded to Mobily in 2004 as Director of Mobile Network Development in the Central Region, KSA. Mr. Bamatraf serves on the boards of Etisalat Afghanistan and Etisalat Sri Lanka and is the chairman of the Board of Technologia. He graduated from the Etisalat College of Engineering and holds a bachelor’s degree in Engineering.

Hatem BamatrafChief Technology Officer at Etisalat Group

Obaid BokishaChief Procurement Officer, Etisalat Group

Javier Garcia joined Etisalat in December 2012 as Chief Internal Auditor of the EG. Mr. Garcia was the head of Internal Audit at Telefonica Group before joining Etisalat. He held various positions with Telefonica including Business Process Audit Director and Vice President of Internal Audit (Chile) before becoming the Group Head of Internal Audit. Mr. Garcia serves on the audit committees of Maroc Telecom, PTCL and Ufone. Mr. Garcia holds a Bachelor’s in Economics and a Master’s in Financial Markets from the Autonomous University of Madrid.

John Wilkes was appointed as the Chief Internal Control Officer for EG in January 2013. Prior to this, Mr. Wilkes was the General Manager of Risk & Supply Chain of the Vodafone Hutchison Company. He has more than 24 years of experience in companies such as KPMG Air in New Zealand where he was the Group Internal Auditor and Stockland in Australia where he held the position of Chief Risk Officer. Mr. Wilkes is a qualified chartered accountant.

Javier GarciaChief Internal Auditor, Etisalat Group

John WilkesChief Internal Control Officer, Etisalat Group


Vision

Mission

To be the leading and most admired emerging markets telecom group

•Provide best in class total customer experience for retail and business

•Deliver attractive returns to shareholders while investing in the company’s long term future

•Support economic development and job creation through ICT & socially responsible behavior

Service offering

Operational Excellence

Customer Experience

One Company

Portfolio

People & culture

Operate consistently across portfolio with a common set of processes and systems leveraging scale economies.

Strengthen company leadership by attracting, nurturing and retaining management talent; Empower people by streamlining internal processes, delegating responsibility, holding people accountable; Execution focus by actively measuring performance.

Manage with a strong focus on efficiency and effectiveness in all operational and support processes at Group and in operating companies.

Own and manage controlling stakes in well positioned operators in target markets, balancing growth and returns.

Serve customers pro-actively and consistently, with a common set of brand values based on in-depth customer understanding and trusted relationships

Provide differentiated, Innovative service, media and entertainment offerings – leveraging broadband Infrastructure and network of partnerships


June 2015

August 2015

Sign 5G agreementEtisalat Group and Ericsson signs strategic partnership to develop the next generation of mobile technology - 5G. The partnership will tap into the potential of the 450Mbps LTE speed. Etisalat UAE has already demonstrated 115Gbps data transmission rate capability as part of the development of 5G.

Foreign and institutional investors effective trading date in Etisalat ShareOwnership of Etisalat share by foreign investors and local institutions became effective on 15 September 2015.

Etisalat Inclusion in MSCI IndexEquity index compiler MSCI announced the inclusion of Etisalat in the MSCI Emerging Markets Index post the close of business day of 30 November 2015.

December 2015License Renewal/Acquisition in Niger and Ivory CoastMaroc Telecom Group renewed/acquired 2G/3G licenses in Niger and granted universal license in Ivory Coast.

Etisalat Group completes the sale of ZantelEtisalat Group completes the sale of Etisalat’s shareholdings of 85% in Zanzibar Telecom Limited (Zantel) to Millicom.

Fixed-network infrastructure sharing in the UAEEtisalat UAE implemented phase I of fixed-network infrastructure sharing in the UAE.Government approves foreign ownership

The UAE Federal Government approves lifting the restriction on foreign ownership of Etisalat shares to local institutions, foreign institutions and expatriate individuals up to a limit of 20%.

Sale of French speaking West African operations to Maroc Telecom Etisalat Group completed the sale of its shareholding in its operations in Benin, the Central African Republic, Gabon, the Ivory Coast, Niger, Togo and Prestige Telecom to Maroc Telecom for Euro 474 million.

Launch 4G LTE services over VSAT technology in the Middle East region;Etisalat Group is the first operator to launch 4G LTE and triple play services (eLife) via VSAT in the Middle East region. It will allow customers in remote, desert and off shore areas to enjoy high-speed data and watch eLife channels over VSAT technology.

4G licence in Morocco In Morocco, Maroc Telecom was awarded a 20-year 4G license for MAD 1 billion.

Tap Issuance of USD 400 millionEtisalat Group successfully completes the tap issuance of US$400 million notes under its US$7bn GMTN Program.

New Federal Law and Articles of Association

Issuance of Decree by Federal Law no. 3 of and the issuance of new articles of association of Etisalat converting Emirates Telecommunications Corporation to a public joint stock company, changing the name of the company to “Emirates Telecommunications Group Company PJSC” (“Etisalat Group”), and allowing Non-UAE natural and legal/judicial persons to own up to 20% of Etisalat Group’s shares.

Tower sale and leaseback in Nigeria

Etisalat Nigeria and IHS Holding successfully completed the second phase of 555 towers sale and leaseback. This is part of Etisalat strategy to drive improvement in the quality of network performance and to expand coverage to new areas and accelerate roll out of services to its customers.

Credit Ratings affirmed The three Credit Ratings Agencies Standards & Poor’s, Moodys and Fitch affirmed Etisalat high credit rating at AA-/Aa3/A+ with stable outlook

Etisalat Group launches region’s first Internet of Things platform Etisalat Group announced the launch of the region’s first Internet of Things (IoT) application allowing customers to develop and deploy innovative new IoT solutions for the growing Machine-to-Machine (M2M) market.

Launch of 4G+ services in MoroccoMaroc Telecom Group launched 4G+ commercial services in Morocco.

Launches first Smart machine to sell SIM cards in UAEEtisalat UAE launched the first interactive touch screen ‘Smart Service’ machine to sell new activated prepaid SIM cards in the UAE.

January 2015

March 2015

September 2015

November 2015

October 2015

April 2015

July 2015


SubscribersEtisalat Group aggregate subscribers grew by 0.3% on an annual basis to 167 million in 2015. The net addition of 0.5 million subscribers in the year was mainly a factor of good subscriber growth in the UAE and Nigeria.

In the UAE, the active subscriber base grew to 11.6 million subscribers from 11.0 million in 2015, representing year on year growth of 6%. Subscriber growth continued to be driven by strong performance of mobile and eLife segments. The mobile subscriber base grew year on year by 7% to over 9.7 million subscribers representing a net addition of 0.6 million subscribers of which 41% was in the high quality postpaid segment. Fixed line voice only subscriber segment contracted 11% year on year primarily due to migration of subscribers to the eLife segment that continued to drive consistent growth with 12% year on year

increase. Total broadband segment grew by 8% year on year to 1.1 million subscribers.

In the international operations, Maroc Telecom evidenced strong subscriber growth in the year with year over year growth of 26% by adding 10.6 million net additions and closing the year with 50.8 million subscribers. This growth is mainly attributable to the acquired operations of Atlantique Telecom and the operations in Morocco, Mauritania and Burkina Faso. Nigeria, despite disconnected sim in compliance with the regulator mandated registration process, grew subscriber base to 22.2 million representing year over year growth of 5%. In Pakistan, subscriber base declined by 9% year over year to 24.0 million impacted by the biometric verification process mandated by the industry regulator

RevenuesRevenues of International consolidated operations, despite the unfavourable exchange movements that impacted financial performance of most of the countries of operations such as Morocco, West Africa countries, Pakistan and Egypt, grew year-on-year by 6% resulting in 43% contribution to Group,. In Maroc Telecom consolidated revenue amounted to AED 12.3 billion and revenue from international operations increased year over year by 62%, resulting in 41% contribution to Maroc Telecom Group’s consolidated revenue, an increase of 11 points compared to 2014. This increase is attributed to the consolidation of the acquired operations from Atlantique Telecom and growth in the historic international subsidiaries.

In Egypt, revenue declined by 6% to AED 4.5 billion, due to unfavourable exchange rate movements of Egyptian Pound against AED. In local currency, revenue growth was 2% mainly attributed to growth in the data segment and higher subscriber base.

In Pakistan, revenue for 2015 was AED 4.2 billion, a decline of 10% from the prior year. Revenue continued to be impacted by a highly competitive environment in the mobile segment, lower usage base as a result of disconnected SIMs due to the biometric verification process and lower revenue stream from the long distance international business due to competitive pricing and fall in incoming traffic. Data segment continued its growth trend driven by increase in DSL and EVO subscribers.Revenues (AED Bn)

51.7

48.5

20

14

20

15

1672014

1672015

Aggregate Subscribers (Mn)

Delivered Strong Operational and Financial Performance

Net Profit and EPSConsolidated net profit after Federal Royalty decreased by 4% to AED 8.3 billion resulting in profit margin of 16%. The decrease in profit is attributed to higher depreciation and amortization expenses, forex losses compared to forex gain in prior year, higher finance costs and royalty charges.

Earnings per share (EPS) amounted to AED 0.95 for the full year of 2015. On 9 of March 2016 the Board of Directors has resolved to

EBITDAGroup consolidated EBITDA grew to AED 26.5 billion representing a year-over-year growth of 14% in 2015, while EBITDA margin increased 3 point to 51%. EBITDA growth was mainly due to higher contribution from Maroc Telecom operations and continued strong growth in the domestic operations.

In the UAE, EBITDA in 2015 increased by 9% to AED 16.3 billion resulting in EBITDA margin of 57%, 1 point higher than prior year. EBITDA growth is mainly attributed to a higher revenue level and more rigorous cost control measures.

EBITDA of international consolidated operations in 2015 increased by 15% to AED 9.6 billion contributing 36% to Group Consolidated EBITDA. In Maroc Telecom’s EBITDA amounted to AED 6.3 billion with EBITDA margin declining 4 points to 51%. In local currency EBITDA in absolute terms increased by 7% due to international

operations that benefited from the consolidation of Atlantique Telecom operations.

In Egypt EBITDA for the full year was AED 1.7 billion with an EBITDA margin of 37%, 1 points higher than 2014. EBITDA continued to improve in local currency driven by enhanced revenue trend and slightly offset by higher network costs and provision for staff costs. In Pakistan, EBITDA for the full year increased year over year by 2% to AED 1.3 billion with EBITDA margin increasing by 4 points to 30%. This increase is mainly attributed to a one-off provision in the prior year related to the Voluntary Separation Scheme (VSS). Adjusting for VSS impact, EBITDA margin would have been down by 2 points from prior year mainly due to lower revenue from international calls and mobile segments.

propose a final dividend for 2015 at the rate of 40 fils per share, bringing the full year dividend to 80 fils per share. This proposal is subject to shareholder approval at the Annual General Meeting scheduled for the 27 March 2016.

EBITDA (AED Bn)

26.5

20152014

23.2

Net Profit (AED Bn) EPS (Fils)

20

14

20

15

99 95

8.6 8.3


CAPEXConsolidated capital expenditure increased by 16% to AED 10.3 billion resulting in capital intensity ratio of 20% compared to 18% in the prior year. This increase in capital spending is impacted by the license acquisitions in Morocco, Ivory Coast and Niger and license renewals in Mauritania and Niger. Adjusting for cost of licenses, capital expenditures would have been AED 9.4 billion and capital intensity ratio 18%.

In the UAE, capital expenditure in 2015 increased by 96% to AED 4.9 billion while capital intensity ratio increased 8 point to 17%. Capital expenditure was committed to mobile network modernization and coverage improvement in addition to building digital and ICT capabilities.

Capital expenditure in consolidated international operations amounted to AED 5.3 billion, a decrease of 15% from year 2014 level. In Maroc Telecom, capital

DEBTTotal consolidated debt amounted to AED 22.1 billion as of December 2015, as compared to AED 22.2 billion as at 31 December 2014 a decrease of AED 0.1 billion.

As at 31 December 2015, the total amounts issued under the global medium term note (GMTN) programme split by currency are US$ 1.4 billion and Euro 2.4 billion, representing a total amount of AED 14.6 billion.

Consolidated debt breakdown by operations as of 31 December 2015 is as following:

•EtisalatGroup(AED15.2billion)

expenditure amounted to AED 3.3 billion resulting in a capital intensity ratio of 27%. This increase is due to acquiring 4G licence and deploying 4G network in Morocco and the renewal/acquisition of the 2G/3G licences in Mauritania and Niger as well as acquisition of universal licence in Ivory Coast.

In Egypt, capital expenditure amounted to AED 0.9 billion resulting in a capital intensity ratio of 19%. Capital spending focused on network rollout and capacity enhancement to address the increased demand for data. Pakistan operations capital expenditure was AED 1.0 billion, down 65% year on year and capital intensity ratio of 24%, signifcnatly lower than last year This decline is due to acquisition of a 3G licence and renewal of the 2G licence as well as the rollout of the 3G network down in 2014.

•MarocTelecom(AED3.6billion)

•EtisalatMisr(AED2.0billion)

•PTCLGroup(AED1.0billion)

•EtisalatSriLanka(AED0.3billion)

71% of the debt balance is of long-term maturity that is due beyond 2017.

Consolidated cash balance amounted to AED 21.4 billion as of 31 December 2015 leading to a net debt position of AED 0.7 billion.

Currency mix for external borrowings is 44% in Euros, 28% in US Dollars, 12% in MAD and 16% in various currencies.

8.9 10.3

CAPEX (AED Bn)

2014 2015

22.2

22.1

DEBT (AED Bn)

2014 2015

Profit and Loss Summary

(AED m) 2014 2015

Revenue 48,508 51,737

EBITDA 23,212 26,526

EBITDA Margin 48% 51%

Federal Royalty 5,306 6,056

Net Profit 8.601 8,263

Net Profit Margin 18% 16%

Balance Sheet Summary

(AED m) 2014 2015

Cash & Cash Equivalents 18,543 21,422

Total Assets 128,109 128,265

Total Debt 22,229 22,080

Net Debt (3,686) (658)

Total Equity 60,214 59,375

Cash flow Summary

(AED m) 2014 2015

Operating 17,209 20,425

Investing (24,102) (9,349)

Financing 9,162 (8,108)

Net change in cash 2,268 2,967

Effect of FX rate changes 834 (9)

Reclassified as held for sales (9) (78)

Ending cash balance 18,543 21,422


Afghanistan

Pakistan

Sri Lanka

Egypt

Saudi Arabia

United Arab Emirates

Etihad Etisalat (Mobily)Saudi Arabia

Mobile & Interent28%32186%Mobile 3

Etisalat MisrEgypt

Mobile & Interent66%92116%Mobile 3

EtisalatUnited Arab Emirates

Mobile, Fixed and Internet100%9Mobile 208% Fixed 25%2

Middle East AsiaPTCL/UfonePakistan

Mobile, Fixed and Internet23%189Mobile: 78% Fixed: 3%Mobile 5, Fixed 11

EtisalatSri Lanka

Mobile100%21126%Mobile 5

EtisalatAfghanistan

Mobile100%3380%Mobile 4

OperatorCountry

Licence Type:Etisalat OwnershipPopulation: (million)PenetrationNumber of operators

Operator

Operator

Country


Country


Maroc TelecomMorocco

Mobile, Fixed48%34Mobile: 127% Fixed: 8%3

MoovCentral Afriacn Republic

Mobile48%526%4

SotelmaMali

Mobile, Fixed and Internet25%16133%2

AfricaOnatelBurkina Faso

Mobile, Fixed and Internet

25%

1880%3

Gabon Telecom / MoovGabon


25% / 44%

2172%4

MoovBenin

Mobile

48%

1183%5

MoovIvory coast

Mobile

41%

23106%5

MauritelMauritania


20%

4115%3

EtisalatNigeria

Mobile

40%

18277%Mobile 4

CanarSudan

Fixed92%401%Fixed 2

MoovTogo

Mobile46%7

65٪2

MoovNiger

Mobile

48%

18 38%4


28.8 AED Billion Revenue

16.3 AED Billion EBITDA

57% EBITDA Margin

7.3 AED Billion Net Profit

4.9 AED Billion CAPEX

Landline Subscribers

Fixed Broadband Subscribers

Mobile Subscribers

9.7 million

0.9 million

1.1 million


In 2015, Etisalat UAE further asserted our leadership position across all segments, including the ICT and digital arena via a focused, forward-looking strategy pivoted around innovation, customer centricity, differentiation, and value for money, enabled by superb infrastructure.

In our ceaseless efforts to capture market potential within new competitive spaces in the industry and improve on services delivered to existing customers, Etisalat UAE continued to invest in network transformation. This spans coverage, capacity, bandwidth, affordability, and customer service. To improve customer experience, enhance operational efficiency and support new offerings that require higher capacity, Etisalat UAE took several notable actions within the mobile sector in 2015.

Building on our already-outstanding infrastructure, Etisalat UAE improved mobile network coverage and capacity considerably in 2015, which further entrenched our position as the leading mobile quality service provider in the UAE market. These improvements were further bolstered by the modernization of more than 5400 (8200+ cumulative) mobile sites (2G, 3G, & 4G) and the tactical deployment of 770 additional new mobile sites (base stations) across all UAE sectors. Similarly, in response to global recognition of 4G as the number one network solution, Etisalat shareholders and Management supported major strategic investment in this avenue. Over 2,400 4G sites were deployed with more than 30% of the sites supporting LTE advanced features, and UMTS 900-Mhz band was activated on more than 2100 sites.

At the same time, we augmented our diverse product portfolio with additional novel and market-changing innovations – including Deal of the Day, data gifting, the Etisalat Challenge, Mobile Cashier, C’Me, the Etisalat UAE mobile app, and eCloud (also for eLife Customers) – within the mobile space.

Several of the services launched in 2015 targeted the reduction of customer expenses. Whilst Deal of the Day is a daily personalized offer to prepaid mobile customers, Data Gifting allows both post-paid and prepaid customers to send mobile data to others and get extra data in return. In this way,

customers can buy and send any mobile data packages to any Etisalat subscriber they choose and Etisalat will present a free bonus for every data package purchased. This exclusive service is another Etisalat UAE first in the region – the Company’s response to the increasing demand for data – and earned us Ovum’s Innovative Service of the Month Award for March 2015. This customer-centric approach in 2015 extended to the launch of the Etisalat Challenge campaign, which commits us to providing the best prices to our residential mobile customers.

2015 also saw Etisalat UAE collaborate with the National Bank of Abu Dhabi (NBAD) to launch Mobile Cashier – the first solution of its kind in the UAE. Using Mobile Cashier, business customers can use their mobile phones to accept credit, debit or prepaid card payments, and manage cash transactions efficiently. Merchants can use Mobile Cashier to accept payments directly on their mobile phones, securely connected to a card reader via Bluetooth, and send transaction receipts via SMS or email.

Meanwhile, Etisalat UAE’s digital presence is continually evolving to empower customers and simplify their interactions with the Company. As part of our digitization strategy, several usability improvements were made and features added to the Etisalat UAE mobile app, which is now available to more than one million customers who have already installed it on their smart devices. We have also refreshed the look and feel of our website, aligning it with the overall Etisalat brand image. At the same time, Etisalat UAE answered increasing customer demand for easy access to social media by further expanding our social data packages portfolio. Now, Etisalat customers can enjoy unlimited access to their favorite social applications like WhatsApp, BBM, Twitter, Facebook and LinkedIn.

To minimize OTT exposure and build the Etisalat customer base, Etisalat UAE launched C’Me – the first rich communication suite in the region. With C’Me, customers can enjoy reliable high-quality rich communications – including voice or HD video calls from their phones or tablets (iOS and Android) over the mobile network or Wi-Fi. In addition to innovative rich messaging options, C’Me users also enjoy features like social network

(e.g. Twitter feed) integration and a secure address book.

Thanks to these initiatives and others, Etisalat UAE earned numerous awards and accolades within the mobile sector in 2015. Among others, Etisalat UAE achieved the global Number One OOKLA ranking for our “Best in Class” Mobile service (best connectivity attracting mass service usage). Etisalat UAE also won the prestigious Data Centre Project of the Year Award at the 2015 Network World Middle East Awards, on the basis of our design excellence, operational efficiency, environmental friendliness, and value to customers.

Etisalat also used 2015 to achieve a number of objectives in terms of both FTTH and cloud storage services. We enhanced our FTTH network capacity via the development of over 70,000 home-ready tenancies across all strategic areas in the UAE. Additionally, full redundant fiber connectivity infrastructure has been prepared for “2,600” enterprise customers. Meanwhile, Etisalat progressed in building our ICT capabilities and launched an eCloud service for our mobile and eLife customers. eCloud is a cloud storage service that safeguards customers’ personal digital content, giving multi-device access on smartphones, tablets, laptops and desktop computers. eCloud subscribers receive 10GB of free storage space and exclusive access to musical compositions by international artists, Nenad Bach and Jill Stevenson.

In addition to providing premium services to our individual customers and surplus value through a rich portfolio of exclusive and non-exclusive devices, Etisalat UAE also placed strong emphasis on our corporate clients, both small and large, in 2015. In this regard, our primary concern was with helping businesses to focus on their core competencies, without having to worry about their telecommunications or business solution needs. We also bore in mind that the changing competitive landscape in the UAE is not only raising the demand for bandwidth and seamless connectivity but is also increasing security concerns for businesses of all sizes. Firstly, Etisalat’s fully managed Business Wi-Fi service, providing wireless access and high-speed broadband to business customers, their employees, and guests, was launched. Business Wi-Fi features segmented

Etisalat reinforced its leadership position driven by its customer-centric strategy build around differentiation, innovation and user experience.

offers for businesses of all types and sizes, and bundled add-ons specifically focused on varying industry verticals such as hospitality, retail, banking, healthcare and government. Secondly, Etisalat UAE introduced the on-boarding program, Hello Business, for new small and medium-sized businesses setting up in the region. Hello Business offers many simple and convenient benefits, including value-for-money mobile and office product offerings, a personalized visit from authorized representatives, an information kit, access to Etisalat’s state-of-the-art dedicated SMB call center and the Etisalat online business portal.

Etisalat UAE also continued to strengthen our position as the key enabler of home entertainment and automation in the UAE in 2015. Three different Smart Living packages, linked to the UAE government’s drive for eGoverment services and smart cities were launched: Eye Home, Cool Home and Safe Home are turnkey solutions that include free delivery, free installation and free training. These packages allow users to monitor, automate, secure and control their homes remotely from anywhere and at any time, using a phone, tablet or computer. Furthermore, Etisalat UAE remained aware of the diversity of the UAE population and continued to strive to bring the most relevant content to our different communities. For example, in 2015, cricket fans were able to follow the ICC Cricket World Cup 2015 with eLife TV and Filipino communities enjoyed the top-rated Philippines TV shows with MyGMA.

To meet the telecommunication needs of the millions of visitors hosted by the UAE every year, Etisalat UAE revamped our visitor product line with a range of hassle-free talk, text and surf packs. These packs are primarily available at airports, Etisalat stores, and partner outlets, and are the ideal choice for visitors to stay in touch with their families and friends back home. Simultaneously, Etisalat UAE now has global LTE roaming agreements with 122 international destinations and an extended roaming network with 734 mobile operators. The Company’s SmartHub has become the leading capacity and content hub in the region, with an ISO certified data center serving a total 33 high-profile carriers and content providers. Additionally, during 2015, Etisalat IPX was classified as a Tier 1 IP Network with 19 major IPX peering agreements.

Finally, in the IPTV domain, Etisalat continued to innovate in the content space, breaking all conventions in terms of video on demand (VOD) releases. For the first time in the region and even in Bollywood history, Etisalat brought the worldwide release of a new blockbuster directly to the VOD platform, even before it arrived at cinemas. Other Hollywood productions were also aired in eLife VOD at the same time as in UAE and US cinemas.

Moreover, Etisalat UAE offered our customers the best connectivity experience wherever they go through our newly launched UAE widespread Public Wi-Fi network and our new Ana Emarat postpaid packages, which are considered the first in the world to include satellite minutes. This allows customers to enjoy our high-quality services while on the go both on land and at sea.

Persistence in pursuing innovation allowed Etisalat UAE to launch the Virtual Mall, which was implemented in one of Dubai’s leading malls, it is a unique experience in the region that demonstrated the company’s innovative capabilities, which were not limited to propositions, but also extended to tackle reach and customer convenience through the launch of “Smart Mobishops” – which are vans staffed with trained agents and equipped with advanced systems to efficiently interact with customers and conduct on-spot transactions similar to any physical business center - and Smart Service Machines, which provide selected essential services conveniently and quickly in a manner similar to that of ordinary vending machines.

Moving forward, Etisalat UAE continues to operate in a fast-moving market that is being challenged by various industry dynamics and will be subject to further liberalization when it comes to mobile and fixed services. Etisalat UAE is very alert to the fact that this will enable customers to switch operators while maintaining original numbers. As such, we are highly aware of the great opportunities and new frontiers that will come along. We are confidently ready to embrace and capture the benefits of such coming changes. 2015 was an exceptional year for Etisalat UAE due to our focus on enhancing customer experience, which began with the remodeling of the organization design into a leaner and more agile form.

To enhance the quality of service, a frontline Assessment Center, which assesses all applicants to frontline roles, was introduced, along with a unified induction program for various frontline staff to cover all customer touch points. Moreover, the Etisalat UAE Customer Experience Training Program, whereby 3,009 staff underwent training in various modules, was a major achievement in 2015 as it enabled customer-centric learning for all customer touch points During 2015, there were 17,000 technical as well as management training course days - 4.0 days per full-time staff member.

Online learning and new ways of blended learning were also been introduced and Harvard Business Portal access was provided to 100+ people to keep them abreast of the latest global business trends. Ultimately, the Company placed great emphasis on creating a continuous learning organization in 2015. Aside from the aforementioned formal training, cross-functional and targeted expert training was also prioritized. This served to facilitate on-the-job training and knowledge sharing between staff members.

Looking to the future of Etisalat UAE’s human capital, we continued our efforts to attract national talent through career fairs and recruitment campaigns. Etisalat UAE also supported key events and collaborated with universities and other educational institutes to seek fresh competitive local talent. The commitment and vitality of this strategy is highly valuable. In addition to this, Etisalat UAE introduced the Nationalization Key Performance Indicators at multi-levels covering top management, each department’s contribution, and overall nationalization percentage targets.


All the while, customer centricity continues to be embedded as a core element in Mobily’s strategy and operations, ranging from branding to unique offers to the Company’s efforts to better understand customers’ needs along all touch points. In an effort to satisfy customer needs in an extremely efficient manner, Mobily implemented the User Process Management (UPM) system, which provides comprehensive insights into customer behavior and experience trends when contacting the Call Center, so that marketing and customer experience initiatives can be fine-tuned in line with customer needs.

Furthermore, Mobily continued its support for entrepreneurial responsibility initiative, FIRNAS, the first open innovation platform in the region,

by enabling young Saudi entrepreneurs to pitch their business ideas to public and potential investors. To similar ends, Mobily actively worked on increasing its nationalization rate and developing fresh Saudi graduates. In addition, Mobily has introduced Mobily Elite as the Company’s flagship development program, which aims to attract and develop outstanding young Saudi talents.

To promote Global Family synergy, Mobily is actively participating in various initiatives – which improve efficiency, reduce costs, and stimulate revenue – with the Etisalat Group. In 2015, among other things, Mobily sought and benefited from Etisalat Group expertise in reviewing, restructuring and in-sourcing of Customer Value Management (CVM) campaigns to increase marketing efficiency and performance.

Mobily works tirelessly toward re-establishing its strong leadership position in the Kingdom of Saudi Arabia’s ICT sector – leveraging product, process and technological innovations to retain existing customers and attract a larger share of the market.

During 2015, the Kingdom of Saudi Arabia’s ICT market witnessed intense competition among its various players – largely due to regulatory changes but also as a result of price cuts and the proliferation of other telecom options. One of the most significant regulatory developments of the year was the reduction in mobile and fixed interconnection rates by 40% for mobile and 30% for fixed termination.

The result was a steep decline in retail prices, which, in turn, placed immense pressure on profit margins. In addition, mobile voice revenues continued to be impacted, partly due to an increase in over-the-top (OTT) services in the market and partly due to the price competition from the newly launched MVNO services. At the same time, mobile data remained the key growth driver facilitated by the increasing number of medium- to low-end smartphones in the market. Fixed broadband penetration also continued to increase as both Mobily and its main competitor increased their offerings to the market.

In order to contend with these challenges, Mobily progressed with several product, process and technology innovation initiatives – all ultimately geared at greater customer satisfaction in this highly competitive market – in 2015. The success of these initiatives can largely be attributed to the fact that innovation has always been a key objective and differentiator for Mobily. The Mobily Call Center, for example, introduced “Virtual Queue”, which allows customers to leave the call center queue and receive a call back when their turn comes. Mobily also managed to drop the billing cycle time from four days to less than 24 hours for its postpaid customers.

In the technology domain, Mobily implemented unified licensing, provisioning, and operations for all types of technologies (public Wi-Fi, VoWi-Fi, FTTH, GGSN/PGW 2G, 3G and 4G) through the introduction of unified authentication, authorization and accounting.

Mobily and the Etisalat Group digital team worked closely together to accelerate the commercial

activities related to Machine-to-Machine (M2M) communications – in particular, the Jasper Platform. As a result, Mobily was first to market M2M control center solutions in the Kingdom. In addition, the collaboration was strengthened in the fields of connected cars and the Internet of Things. In the wholesale domain, joint-procurement initiatives with the Etisalat Group resulted in significant cost savings through volume discounts, due to collective buying of IP transit capacity. Furthermore, the roaming connectivity GRX backbone was upgraded 1.2Gbps with Etisalat.

Within the Home segment, Mobily continued increasing its penetration of households in the Kingdom through the Company’s FTTH and IPTV offerings in 2015. The Mobily Business Unit, meanwhile, continued its growth in revenue, in addition to acquiring noteworthy accounts – including Al Rajhi Bank, SAMASCO, SECO, Dallah TransArabia, Samba Bank, SABIC, Sadara Chemicals, Tayyaba University, and SACO. Moreover, the Wholesale and Carrier Services division achieved savings on international capacity and enhanced the portfolio by materializing deals with both domestic and foreign players.

Mobily’s aim for 2016 is to return to its strong challenger position. To achieve this, management has outlined certain strategic priorities– which include boosting data profitability and leveraging customer experience to win market share. Next to mobile data, one of the key growth drivers is the monetization of our fiber-optic infrastructure, supported by revamped state-of-the-art sales, system and execution capabilities. Moreover, to improve efficiency and keep pace with our customers’ connected-lifestyle requirements, Mobily plans to further digitize both internal and customer-facing operations. Finally, the Company aims to improve returns by placing strong emphasis on market- and profit-driven capital expenditure allocation in addition to the optimization of operating costs. However, none of this would be possible without continued investments in Mobily’s key competitive advantage – our human resources.

14.4 SAR Billion Revenue

2.9 SARBillion EBITDA

3.4 SARBillion CAPEX

Mobily works tirelessly toward re-establishing its leadership position in the ICT sector.


Free Basics to access a variety of popular and useful websites and online services for free, such as Facebook and FB Messenger, Wikipedia, Accuweather and others. It is anticipated that the launch of Free Basics will lead to increased internet accessibility, customer engagement, data usage, and revenue generation, as well as a push for new subscribers.

In a further drive for mobile internet growth, Etisalat Misr has begun offering two new daily bundles: The Social Bundle allows customers to enjoy unlimited usage of Facebook, Twitter, WhatsApp and Instagram, whilst the Chat Bundle offers unlimited usage of WhatsApp, Viber, Line and BBM Chat.

Indeed, internet services have become strategic priorities for our customers in recent

years, which is why the successful launch of the channel serving social media has resulted in multiple ongoing improvements. EM’s response time reached two minutes and Facebook service levels for all cases were met to 100% satisfaction. In fact, EM was officially recognized for the success of our social media initiatives: we were named the most socially devoted service provider for 2015, we achieved second and third place for growth rate and audience respectively on Facebook, and second place for both audience and growth rate on Twitter.

Beyond these specifically mobile-based services and technologies, EM also released two other initiatives in 2015: eCloud hosted services and a “machine-to-machine” in-house platform for SIM management.

eCloud securely delivers hosted services (like storage, software applications, and software development platforms) over the Internet. It includes both SaaS (software as a service) and

9.5 EGP Billion Revenue

3.6 EGP Billion EBITDA

1.9 EGP Billion CAPEX

Customer centricity has become a major strategic priority in Etisalat Misr’s drive to create competitive advantage in the bourgeoning Egyptian mobile market whilst respecting crucial regulatory requirements. Every EM initiative in 2015 has been informed by this central value.

In 2015, Etisalat Misr has navigated an oftentimes challenging external environment by complying with regulatory mandates, expanding control channels, and introducing a new business model to ensure sustainability, profitability and increased customer satisfaction. To this end, we have launched various initiatives related to Innovation, Customer Centricity, and the Global Family in 2015.

The imposed regulatory mandate to sell SIMs through controlled channels impacted the growth potential in the mobile sector. Within this regulatory framework, Etisalat Misr has strategically increased its retail footprint to reach 1.6K controlled outlets, which allows a wider reach to new customers and makes the Company a market leader in ensuring excellent customer experience in an exponentially expanding direct channel.

2015 saw the launch of Egypt’s first mass market reward program. The innovative “Choose Your Gift” loyalty program allows customers to select gifts from various categories (telecom, instant rewards, and raffles). By granting non-telecom lifestyle-focused benefits to customers, we show that we both appreciate and understand them as people and not just telecom users. The level of customer loyalty that this engenders is a significant competitive advantage in this increasingly saturated market.

Our focus on customer experience made us pay special attention to the Top 20% of the Company’s clients by insourcing their services, which were previously all outsourced. This has had a direct positive impact on the quality of the services offered and improved productivity as handling time within calls has decreased by an average of 11%, repeatability of calls has decreased by 37%, and queue agent attrition has decreased by 60%.

Etisalat’s overall customer base was considerably broadened this year with our launch of the “Internet.Org/ www.Freebasics.com” initiative. This collaborative ES-Facebook project aims to bring more Egyptians online through mobile devices – a first in the country. Customers can use

IaaS (Infrastructure as a service) and offers several unique business applications. A3maly, for example, is a fully fledged ERP solution that includes a comprehensive suite of business applications, including accounting, warehouse management, manufacturing, and human resource management. Another eCloud application handles email and web hosting, including professional templates and designs as well as a website builder that can create a single website adapted to all technologies and devices.

Also part of eCloud, My Customers organizes sales, marketing and support information within a single application that keeps information-flow management simple. My Storage enables SMEs to control files and applications using cloud storage technology. In addition, it enables companies to access their data from anywhere using any device. My Documents is a software-collaboration tool that helps corporate employees to manage all company documents online instead of using paper documents. It helps them to handle large and important electronic documents in various formats (text, graphics, audio, etc.).

eCloud’s IaaS Virtual Servers enable users to host their companies’ websites or operate software that needs servers (like business applications, communication applications, file-sharing applications, and so forth) without the costs of purchasing and maintaining these servers.

Additionally, EM has developed an in-house platform for the “machine to machine” enterprise segment to enable customers to manage their SIMs in M2M/IoT space. Managed SIM is a new service, whereby customers can activate, deactivate, suspend, change RP, and track their embedded SIMs. It is our first step towards becoming the M2M provider of choice in Egypt and paves the way for all future M2M/IoT solutions.

Going forward, our focus will be on introducing more value added services, applications and increasing awareness of cloud service as the solution of choice in Egypt. In 2016, we aim to create distinctive propositions and customer experience (differentiate through proposition leadership and a concentrated focus on customer demands across all touch points), and engage with key stakeholders including regulator and government for favorable outcomes on issues related to spectrum, licenses and pricing.

Every initiative was informed by the central value of customer centricity to drive competitive advantage.



1.9 million

34.1 MADBillion Revenue

16.7 MADBillion EBITDA

49% EBITDA Margin

5.6 MAD Net Profit

8.8 MAD Billion CAPEX

Mobile Subscribers

47.7 million

Broadband Subscribers

1.2 million


The Maroc Telecom Group’s strategic acquisitions, speedy operational consolidation, and ongoing investment in network densification and modernization combined with its innovative solutions, make the Group a key industry player in Morocco and the rest of Africa.

2015 marked the finalization of Maroc Telecom’s acquisition of six new operators in Africa, significantly boosting the Group’s presence in markets with major growth potential. Meanwhile, on the home front, the development of local business activities, including the launch of 4G+ services, served to strengthen Maroc Telecom’s technological leadership position and promote the growth of mobile high-speed broadband services throughout Morocco.

In July, Maroc Telecom put its 4G+ network, the most advanced version of the fourth generation mobile with data rates up to 225Mbps, into operation. Customers are able to access to new network without changing SIM card and at no additional cost. Simultaneously, the launch of an important network densification and modernization program provided support during the operational consolidation of the Group’s new subsidiaries to encourage profitable, sustainable and robust growth.

Together, the launch of 4G+ and the rapid expansion of Maroc Telecom’s fiber-optic

internet infrastructure have cemented the Group’s position as an innovation leader. The Maroc Telecom Group mobilizes all of its innovation capability to provide offers that meet the needs of all its customers and attract a greater share of the market.

A major area of innovation to which Maroc Telecom attaches great importance is the facilitation of access to digital content. In 2015, the Group partnered with YouTube and Dailymotion to launch the Pass Video prepaid mobile top-up offering (the first of its kind in Morocco), which allows users to purchase large volumes of data at very affordable prices to view and upload videos on both of these platforms.

The Group also introduced its Icflix service offering unlimited HD movies, series, animated content, and documentaries on five devices simultaneously via the Internet.

In addition to rolling out these various new innovations, Maroc Telecom focused on enhancing product offerings in 2015. Accordingly, it launched the permanent quadruple top-up offer

for prepaid mobile customer, replacing the double and triple top-up deals.

2015 also saw the launch of My Cloud, the first local online storage service to be fully hosted in Morocco.

My Cloud users can record data on servers located in Morocco, enabling them to access and share it easily and securely from any connected device.

Being customer centric with primary focus on providing more value to customers, many hours of talk-time and large volumes of data were added to all mobile rate plans with no impact on prices. Additionally, in consideration of the unique needs of each user, the unlimited mobile offer, which was originally one single package, was segmented into three, more specific offers – unlimited national calls; unlimited national and international calls; and unlimited national, international calls and internet. Maroc Telecom also continued to diversify its prepaid packages, which are currently the most generous on the market. The enhancement of the customer experience was also extended to our postpaid customers with the “Fidelio”, the Moroccan telecoms industry’s first points-based loyalty program, allows customers to accumulate points based on usage and receive benefits in the form of free or discounted products or services.

In addition to these enhancements of mobile and fixed-line offers, companies and professionals enjoyed even more personalized services with Maroc Telecom in 2015.

Maroc Telecom Group succeeded in expanding its international footprint by acquiring six operations in West Africa.

Several solutions were designed with corporate clients, in particular, in mind: SMS Connect, to create and send SMS campaigns; an abbreviated dialing service; Security Pack GateProtect and Cyberoam, to protect Internet connections; and MobiControl, an MDM (Mobile Device Management) solution for managing mobile fleets.

Among the services designed to provide more convenience to customers’ lives are the M-payment solutions, which are implemented by almost all of the Group’s operators. Maroc Telecom was the first operator to launch this service, under the product title Mobicash, in Morocco in 2010. In 2015, Moov Cote d’Ivoire, Moov Niger, Moov Togo, and Etisalat Bénin enhanced their M-payment service, Flooz, to allow money transfers within the sub-region, including Benin, Ivory Coast, Niger and Togo.

As a technology leader, the Group continued its practice of renewing its infrastructure and introducing very high-speed internet. Almost half of the mobile network has now been upgraded and modernized to run

on single radio access network (RAN) equipment, the most advanced technology available. For fixed-line access, the multi-service access node (MSAN) equipment is now deployed close to customers to increase speed and improve the quality of service.

Maroc Telecom Group maintained its commitment to the Group’s international networks and infrastructure to improve operating companies’ competitiveness, enhance customer experience and support new offerings that require higher capacity. In Gabon, a 3G/4G licensewas awarded to Gabon Telecom and 2G license was renewed in Mauritania.

In 2015, the Group completed deployment of the “TransAfrican” – a fiber-optic cable that connects Morocco to Burkina Faso and Niger via Mauritania and Mali, over a distance of 5,700 kilometers. This cable enhances the high-speed broadband connectivity of Maroc Telecom’s subsidiaries in these countries by connecting them to the submarine cable system to which the Group has access.

In 2015, Maroc Telecom continued to implement measures to strengthen the protection of its information systems and online services against attacks. This is inline with the commitment it made to protect personal data (ISO 27001 version 2013) and in keeping with the 09/08 law on protection of natural persons with respect to

the treatment of personal data.. The Group also ensures that all processing of personal data does not pose any risk to privacy and is carried out under the authorizations granted by the National

Commission for the Protection of Personal Data (CNDP). Internal and external audits are conducted annually to verify

the compliance of Maroc Telecom’s activities and process with legal and regulatory requirements and with ISO 27001 standards.

Maroc Telecom and its subsidiaries constitute a unique network providing lower roaming

charges. Nomadis, launched in 2010, ensures that all of Group roaming customers are charged domestic rates while using one of the Group networks. In 2015, Maroc Telecom expanded the Nomadis offer to the new Moov subsidiaries, enabling all Maroc Telecom group customers to use the roaming service at reduced rates across all of the Group’s mobile network.

In 2016, Maroc Telecom focus will be on extracting synergies within its subsidiaries with the aim to enhance investments and share technological and operational expertise. This will require upgrading management processes, optimizing distribution activity, standardizing the automation of collection processes, and securing strategic infrastructure to ensure uninterrupted service to customers. In addition, strategic negotiations with vendors and centralizing of procurements, will enable cost savings.


Etisalat Nigeria has leveraged innovative products and services, a quality network, and excellent customer service to strengthen market position and give customers even more reasons to connect with the Company in 2015.

Building on the Company’s position as a local telecom market leader, Etisalat Nigeria has further introduced a number of valuable and innovative products and services – including Cliqliteworld, GTEasysavers and SME Share Data Bundles – to enhance customer convenience and overall quality of life in 2015. These developments span the broad spectrum of everyday life – from education to banking and beyond.

Cliqliteworld was introduced to the market in 2015 to expand on the success of Etisalat Nigeria’s 2014 release, Cliqlite, an educational plan for children aged 8 to 15 years. Cliqliteworld provides primary and secondary school students with access to a large volume of educational content. Subscribers to the platform can access government-approved textbooks, interactive educational videos, engaging science simulations, and educational games. Parents can also find recommended appropriate schools or teachers, while ensuring their children’s online safety by activating the parental control feature.

In the mobile banking sphere, Etisalat Nigeria has partnered with Guaranty Trust Bank to create GTEasysavers in 2015. GTEasysavers is a pioneering GTBank savings account product that enables customers to open bank accounts instantly at the click of a button and then operate them from their mobile phones. It was designed to enable under-banked and unbanked individuals to achieve their financial goals while operating a regular bank account via their mobile phones.

Uniquely, GTEasysavers generates an instant bank account for the customer upon request, enabling subscribers to deposit cash, top up airtime, and transfer cash easily via their mobile phones.Finally, Etisalat Nigeria has also made inroads on the business world in 2015 with our SME Share Data bundles. SME Share Data bundles are prepaid and postpaid packages that enable business owners to buy large data bundles and share them with employees. They

come as internet wallet bundles, which can be divided into smaller bundles with multiple SIMs or MSISDNs, regardless of beneficiaries’ geographical locations. Unlike similar competitor offerings, SME Share Data by Etisalat Nigeria has a Web-access-restriction feature that gives business owners control over the types of sites visited by their staff. Business owners can allocate a variety of SME Share Data bundles from Etisalat data sizes to a maximum of 30 different beneficiaries.

While most actions taken in 2015, have been underpinned by the high premium the Company place on customer satisfaction, the primary aim was to bridge the gap between sales and service outlets in locations where the return on investment for experience centers is not viable.

This entailed the aggressive deployment of branded outlets to improve Etisalat Nigeria presence in identified areas across Nigeria, and enhanced service portfolio/capabilities in Digital Access Carrier Systems (DACs) and their return to EEC standard.

The immediate impact of this has taken the form of increased foot traffic and loyalty from subscribers and partners;increased SIM push; reduction in distance-to-serve, especially in rural areas; and improved customer satisfaction (as indicated in monthly customer service surveys).

Another significant challenge identified with regard to the Etisalat customer roaming experience was different rates charged across Etisalat’s partner networks within a roaming destination. To resolve this issue, the Company decided to create a one-country-one-rate roaming tariff by standardizing all tariffs across the operators in each country. We deployed

a standardized tariff on voice, SMS and PAYG data across our Top 10 high-value roaming destinations in July 2015. Subsequent to this, we recorded 29% growth in revenue in these 10 destinations.

In July 2011, a Global Plan aimed at eliminating new HIV infections among children and keeping their mothers alive was launched at the United Nations General Assembly High Level Meeting on AIDS. Nigeria’s part in this is the 2015-2016 National Operational Plan, unveiled in November 2014, for the elimination of mother-to-child HIV transmission. This plain is intended to bolster the implementation of such efforts in Nigeria.

It is within this context that Etisalat Nigeria partnered with UNAIDS to support the National Agency for the Control of AIDS (NACA), other government departments, and civil society to boost Nigeria’s efforts to eliminate mother-to-child HIV transmission. In the first partnership of its kind, Etisalat Nigeria collaborated with the Joint United Nations Programme on HIV/AIDS to ensure that no more children in Nigeria are born with HIV. As part of this, EN subscribers received regular text messages explaining how and where to access services for the prevention of mother-to-child HIV transmission in Nigeria.

Etisalat Nigeria anticipates regulatory developments in 2016 that will have long-lasting impacts on the Nigerian telecom industry. Significantly, the prevailing Mobile Termination Rate (MTR) regime is scheduled to expire in March 2016. In addition, the Nigerian Communications Commission (NCC) has indicated that it will consider developing a framework for the sharing of active infrastructure in 2016. Etisalat Nigeria will continue to engage with the regulator in efforts to secure approval for active infrastructure sharing and national roaming. Compliance and enforcement continue to be focus areas for both the regulator and operators. Etisalat Nigeria has taken proactive steps to strengthen its end-to-end SIM card registration processes and will continue to monitor them. This encompasses re-training of agents, stronger contractual terms, and upgrades and improvements to IT and back-end processing.

227.6 NGN Billion Revenue

41.7 NGNBillion EBITDA

60.2 NGN Billion CAPEX

Etisalat Nigeria’s unmatched service and network quality strengthened market position.


118.6 PKR Billion Revenue

36.2 PKRBillion EBITDA

31% EBITDA Margin

1.9 PKRBillion Net Profit

28.9 PKRBillion CAPEX


Mobile Subscribers

20 million

4 million


PTCL has continued to strengthen its leadership position in the Pakistani market in 2015 by intensifying the customer centricity of its offerings, taking innovative measures to further develop its nationwide presence and matchless network capabilities.

PTCL initiatives and innovations in 2015 have been underpinned by a single unifying principle – the importance of creating a customer-centric culture that ensures customer loyalty as well as subscriber growth. This long-held strategic imperative has taken on even greater significance this year, as the competitiveness of the local telecom market continues to intensify. Thus, even actions not directly related to customer centricity have been conceived and executed with the enhancement of the PTCL customer experience as their ultimate objectives.

One measure taken this year specifically to increase customer convenience and resolve complaints speedily was the introduction of a one-window platform for complaint management, device support, and customer self-management. Similarly, in view of the essential position occupied by tradition and cultural values in Pakistani society, we have launched the PTCL IVR (Interactive Voice Response), enabling complaint registration and order provisioning in regional languages. PTCL has also introduced a dedicated helpline to provide priority customer care for customers, their families, and their friends in a timely manner. Complementing these measures has been the introduction of online channel accessibility, an e-payment channel that allows cash and credit card payments as well as automatic restoration of suspended accounts. At the same time, PTCL has gone to great lengths to improve its product offerings during 2014. Although PTCL is already the only telecom operator in Pakistan with a network of three major submarine cable systems, the Company has invested significant resources in further upgrading the IMEWE and SMW4 submarine cables. We are also participating in the AAE1 cable system to further expand our global communication route. This is intended to better serve digital customers’ ever-growing bandwidth requirements and improve network resiliency. Additionally,

we have started working to upgrade our 10G Metro DWDM transmission network to 100G DWDM (to meet the data surge caused by 3G and 4G services and OTT players) and expanded our network to backhaul the Ufone 3G services on 77 new routes.

Innovation occupies a central position in PTCL’s working culture and it helps us build and maintain high-capacity data networks to offer unmatched services nationwide. PTCL proudly operates Pakistan’s largest GPON-enabled Wi-Fi network across Islamabad’s mass-transit Metro Bus route. This first-of-its-kind Wi-Fi service provides commuters with on-the-move connectivity and has already clocked 6.4 Tera Bytes of data in its first three months. It enabled PTCL to provide Islamabadi society with access to the benefits of broadband. PTCL has also launched Pakistan’s first customized LTE tablet to offer high-speed broadband services to our valued customers. This tailored tablet solution for motorists is fully equipped with Sygic GPS Navigation, free LTE internet, and a SmartTV app that allow customers to stream hundreds of live TV channels, movies, and video-on-demand anytime, anywhere. Another significant success story has been the launch of the SmartLink service, which allowed customers the freedom to make and receive landline calls via a SmartLink OTT on smartphones.

PTCL also worked relentlessly to offer customized and innovative solutions to its corporate customers and, as part of this, the Company has launched SMART CLOUD (a Software as a Service platform offering applications and software without any upfront capital investment by the customer), CorpWatch (an online portal for corporate clients to overview their product statistics), and SIP Trunk (offering traditional voice over internet protocol services instead of more modern, advanced technologies).

In addition to all of this, PTCL has continued to grow network capacity and efficiency via Solar Power project for alternate power back-up solutions. So far, 185 sites have been powered up and another 250 are in progress. This will enable PTCL to

counter the effects of widespread power outages in the country, helping to cut down operational expenses and provide uninterrupted customer service.

PTCL undertook several to improve collaboration and synergy with other Etisalat Group operating companies. MCB, Regus, China Unicom, Thomson Reuters, and Carrefour are a few examples of PTCL teaming up with other Etisalat OpCos to realize their common goal of bringing international corporate clients onboard. PTCL also facilitated a promotional deal between Etisalat Afghanistan and Ufone, which resulted in increased traffic and revenue from these companies.

Yammer, an Etisalat Group social network to get work done smarter and faster, was launched for PTCL employees. This resource was aggressively promoted within the organization as a tool for bringing together the Etisalat Global Family to share new ideas and best practices. Awareness sessions regarding the benefits of yammer as a collaborative tool led to the registration of a significant number of PTCL staff members, who are now actively contributing on the forum. To further strengthen ties within the Etisalat Global Family, employees participated in the mHealth Grand Tour, representing Etisalat in creating global diabetes awareness.

PTCL is a strong advocate of corporate social responsibility initiatives and believes in giving back to the community. In keeping with this, PTCL provided medical relief to more than 6,700 flood victims and also launched the ILM (Illuminating Learning Movement) Online Learning Platform for underprivileged youth to improve the prospects of deserving students. PTCL also lead a tree-planting drive in an effort to preserve the environment for future generations.

Looking ahead to 2016, PTCL plans to consolidate its broadband market leadership by enhancing customer experience through continuous improvement in our network infrastructure and monetization, expand into digital entertainment, and achieve greater diversification.

PTCL built and maintained high-capacity data networks to offer unparalleled services nationwide.

Ufone’s progress in 2015 has largely been focused on growing the mobile data segment via innovation and alertness to the market’s increasing demands in order to provide services of impeccable quality.

The initiatives taken by Ufone during 2015 were developed and implemented within the macro-context of the uniquely challenging Pakistani mobile industry. These challenges include stiff competition leading to price wars and declining revenue trends, an extended energy crisis, a deteriorating legal framework, an unfavorable tax regime, and fluctuating local currency leading to high operational costs.

One of Ufone’s major achievement in 2015, has been the successful creation and implementation of a secure, scalable and highly robust Biometric Verification System (BVS), originally launched in 2014 in response to the strict Pakistani Telecommunication Authority policy that all mobile operators must eliminate un-registered and non-verified SIMs from the country. Over the course of 2015, the Ufone BVS has come into use at business centers and franchises all over Pakistan, as effectively meeting threats and ensuring all citizens’ safety of remains top of mind for the Pakistani Government.

Among the innovative initiatives launched in 2014 and continued in 2015 is the Super Card initiative. It is an inventive way to present customers with rewards, rather than cash, in return for recharging. 2015 has seen a strong customer uptake as the brand value of convenience presented by Super Card has resonated with the market. Super Card has become Ufone’s biggest product, achieving new levels of end-customer satisfaction. Indeed, Ufone has an almost six-month lead on our competitors in this industry-changing innovation. Despite competitors’ reaction, it did not slow down the growth of this Ufone product’s popularity.

Also launched in 2014 and further developed in 2015 is the world’s first Islamic Branchless Banking service. While several new players have entered the mobile financial services playing field in the last couple of years, there is no

product differentiation. Retailers have high bargaining power and are heavily incentivized to influence customer choices. To break through the clutter, Ufone collaborated with Pakistan’s largest Islamic Bank, Meezan Bank Limited, to offer the first Islamic Branchless Banking service under the brand name, Meezan-UPaisa. Due to the local population’s strong religious affiliations, a customer pull for the Islamic service as opposed to traditional services is expected to reduce retailer bargaining power, resulting in increased market share and improved profitability.

In 2015, Ufone also made further progress with our 2014 Converged Billing System (CBS) initiative. Despite the complexity of CBS projects due to the re-engineering of business processes, several major benefits have resulted from the CBS upgrade thus far. These include the provision of real-time credit visibility and control for postpaid customers; increased customer loyalty in exchange for real-time promotions/rewards; the development of innovative rating and charging features for postpaid subscribers; a shortened overall billing and invoicing cycle; and increases in the dimensions of MIS data for management reporting. The project has contributed considerably to overall customer satisfaction and operational efficiency.

Another major initiative launched in 2015 and focused on evolving and enhancing retail customer experience is the “Own Shop” project, the first its kind in the country.

It was created to entice customers to visit Ufone retail outlets, which were transformed into modern centers equipped with LED media walls, digital posters, interactive self-service screens, experience stalls with the latest handsets, and virtual teller machine zones, and trained customer services staff. Currently, there are six company-operated service centers and 40 Own-Shop-model Franchises.

Meanwhile, Ufone has continued its aggressive 3G network roll-out in the second half of the 2015 and introduced 3G coverage in 86 cities. Roll-out has

included the addition of new 3G sites to unserved areas, and capacity sites to already launched cities where 3G capacity is choked due to high data traffic. Ufone has also expanded our backhaul capacity to provide higher speeds and, ultimately, improved end-customer experience, as a part of our customer centricity drive.

In an effort to ease the hardships faced by farmers because of unfavorable weather conditions, floods and declining profits, the Pakistani Prime Minister announced the provision of relief package of Rs341 billion to revive the farm sector in 2015. To support this initiative, Ufone, being a socially responsible corporate entity, devised an innovative solution for biometric verification to ensure fair cash disbursement to farmers.

2015 also saw the launch of a cutting-edge automated self-service kiosk known as a VTM (Virtual Teller Machine). A VTM is an in-house-built solution that serves as a remote office capable of performing all office activities. Ufone is currently in the expansion phase and is in the process of acquiring more VTMs, to be installed at high-foot-traffic areas like malls, community flats, enclosed communities, and airports.

Finally, by participating in multiple roaming agreements through Etisalat Group, we have achieved smoother overall Ufone roaming operations. In the last 12 months, Ufone has entered into agreements with Mobily, Etisalat Sri Lanka, Vodafone, Telefonica, and T-Mobile to maintain a competitive edge and traffic inflow.

Ufone is all geared up to reshape the digital revolution in Pakistan in 2016 by capitalizing on its market position, aiming to offer innovative new solutions to Pakistanis during the next few years. Considering the prevailing trends, Pakistan is expected to have over 40 million smartphone users, spending roughly 2.5 hours per day on mobile devices, by 2018. This is why definitive on-demand mobile services comprise the exact market area into which Ufone is hoping to tap.

Ufone grew its mobile data segment by leveraging its investment in 3G network.


Etisalat Services Holding (ESH) strives to add strategic value to its customers by delivering innovative telecom-related business services.

In 2015, ESH continued its commitment to achieving operational excellence across all business units, thereby paving the way for innovation and revenue maximization in the coming year.

Since its inception in 2007, ESH has come to manage a portfolio of over one billion dirham and a total workforce exceeding six thousand staff members. Our client-management activities spread across various industries and geographies, including Etisalat Group operating companies, global telecom operators, large clients in multiple industries, and prominent government entities. Our capacity to deliver seamless solutions, with a central focus on innovation and value-added services, continues to surpass all expectations.

ESH consists of eight companies, each of which offers unique tailored solutions to meet the needs of the other Etisalat Group companies as well as their external clients. These are: Etisalat Facilities Management (EFM), Emirates Data Clearing House (EDCH), E-marine, Tamdeed Projects, Etisalat Information Services (eIS), Ebtikar Card Systems (ECS), Etisalat Academy (EA), and Etisalat Real Estate (eRE).

ETISALAT FACILITIES MANAGEMENT (EFM)

EFM’s visionary outlook and emphasis on high-quality services continues to inform all of its actions in offering integrated facilities management within the wide spectrum of all related areas. The Company has many years of experience in facilities management, specializing in telecom and critical infrastructure portfolios. In 2015, EFM has also set up a joint venture with Emirates Transport to serve the Government sector exclusively. This partnership is expected to bring unparalleled advances to the sector and the country in the near future. EFM plans to stimulate ongoing progress via several unique initiatives, consultation with industry experts, and enhanced product knowledge, coupled with strategic investment in original products

and solutions. Thanks to the success of its energy-saving product, Mabanina, initially launched in 2014, EFM’s contribution to the environment and UAE society has become considerable and is expected to experience exponential growth in the coming years.

EMIRATES DATA CLEARING HOUSE (EDCH)

Since the inception of Emirates Data Clearing House (EDCH) in 1994, it has maintained a single source of support for roaming telecom facilities. EDCH has always stood out as one of only a handful of suppliers worldwide with its capacity to deliver innovative, reliable and secure services to the Global System for Mobile Communications (GSM) roaming community. As part of this, EDCH validates data to standards compatible with the requirements of the GSM Association by offering data and financial clearing, as well as an increasing number of customized value-added services.

In 2015, EDCH worked intensively on enhancing its portfolio to position itself as the intelligent roaming and revenue management partner of choice. This has also entailed the provision of simplified roaming services, improved utilization of available resources, and increased operator profitability.

Among other initiatives, EDCH joined forces with top telecom and IT solution providers to create an intelligent solution for predicting subscribers’ behavior, awakening silent roamers, preventing bill shocks, and improving subscribers’ overall experience. In addition, EDCH launched several services and innovative products – such as Mobile Money hub solutions, cloud-based services, a Wi-Fi roaming hub, a data-package engine, silent-roamer analysis, IREG dashboard, interconnect ecosystem, and bill shock prevention – to add to its long list of products to support roaming.

E-MARINE

E-marine is the trusted principal provider of submarine cable solutions in the Middle East and the Sub-Continent and is committed to the expansion and advancement of the region. In keeping with this, it added a new cable ship, the CS MARAM, to help maintain

its dominance in the core submarine cable business at the end of 2015. The Company is also preparing to tap into the oil and gas market so that, when the market rebounds in this segment within the next two-three years, E-Marine will be ready with a vessel specific to the needs of the energy sector to capture a sizeable portion of this promising source of revenue.

Furthermore, to cater to the rapidly developing East African market, E-Marine is also planning to open a third depot in this region. This will create a strategic advantage for E-marine – not only in its ability to procure additional business but also in terms of its position relative to competitors. To summarize, E-Marine’s comprehensive business blueprint will give the Company the edge it needs to become the preferred choice for the customers in the region and beyond.

TAMDEED PROJECTS

With its focus on producing unique infrastructure solutions, encompassing all facets of the building networks, Tamdeed Projects is an industry frontrunner when it comes to visionary technological breakthroughs.

Tamdeed’s dynamic network of feedback loops is composed of smart materials, sensors, data exchange, and automated systems that merge together, functioning as a security-sensitive virtual information and communications technology system.

With a portfolio of outside- and inside-plant solutions seamlessly integrated into its outdoor network and in-building solutions, Tamdeed is a market leader in producing sustainable, reactive and community-oriented intelligent building solutions, enabling users to engage and communicate efficiently across vast spaces.

Via Tamdeed’s ongoing collaboration with Etisalat Services Holding’s various business units, the Company has become an industry-leading single-service provider, capable of undertaking turn-key projects from design to delivery – including the physical infrastructure layer, low-voltage components, systems and platforms, communication, and application.

In 2015, ESH delivered creative business solutions to strategically benefit the operations of it’s customers.

ETISALAT INFORMATION SERVICES (eIS)

Widely regarded as the UAE’s leading directory services provider, Etisalat Information Services (eIS) is utilized by Directory Enquires (181) and also publishes printed and digital directories on web and mobile app platforms.

The directional media advertising industry is very quickly evolving into the digital space and it is estimated that the digital media advertising industry will grow at a CAGR rate of 38% over the next few years. Meanwhile, sales figures for printed hard-copy directories continue to decline. In response to these trends, eIS began to focus more intensively on digital media advertising in 2015, partnering with global industry innovators to create

www.connect.ae. This is the UAE’s first hyper-local search engine enabling location-based search and navigation services for all small and medium-sized businesses in the country.

eIS also formed multiple partnerships with various players – including industry leaders like Booking.com, Roundmenu.com and Zomato – in the digital play arena and it continues to aggregate various verticals by enhancing these partnerships.

In 2016, eIS has planned several aggressive marketing campaigns that will help to create awareness and encourage a much greater number of potential customers to utilize eIS products. As 2016 undergoes the aforementioned shift in the digital advertising industry, eIS and its stakeholders will be ready and waiting to derive maximum profit from this industry evolution.

EBTIKAR CARD SYSTEMS (ECS)

Ebtikar Card Systems (ECS) is a major provider of smart card solutions and one of the best secure industrial organizations in the UAE. ECS was established in 1996 to fulfill the growing business and application demands for smart cards in this market. The ECS factory is certified with the GSMA Association’s Security Accreditation Scheme certificate (SAS) for SIM and Smartcard manufacturing, in addition to being ISO 9000, 14000 and 18001 certified for quality, health and safety standards.

In 2015, ECS enhanced internal production capacity to support market growth, demonstrating the Company’s ability to produce high volumes of high-quality SIM cards, whilst still adhering to the strictest set of standardized security criteria. During this time, ECS introduced multiple new products, including Trio Cards (multi SIM) and M2M and 4G/ LTE SIM cards. Concurrent to ensuring operational excellence, ECS drastically reduced OPEX via supplier negotiations to save considerably on procurement costs.

2016 will see a more aggressive drive to procure new customers, while steps are taken to enhance production capacity to support market growth. Ebtikar is also planning to introduce several new products – like quarter SIM card with multiple plug forms, M2M, 4G/LTE products, and embedded SIM subscriptions management – which will not only ensure client retention through cross-selling but will also enable Ebtikar to move into new markets in a focused manner.

ETISALAT ACADEMY (EA)

Etisalat Academy (EA) is the largest in-bound and out-bound single source-training provider for the Middle East for telecommunications, technology and business training. EA also offers human resources and competency consultancy training.

In the summer of 2015, EA conducted one of the UAE’s largest and most diverse youth summer camps, sponsored by the ICTFund of the Telecommunications Regulatory Authority (TRA). Camp activities were conducted in several emirates and the number of participants exceeded 1200 Emirati national students from primary, preparatory and secondary schools.

Locally, EA kicked-off the special Etisalat Sales Academy project for Etisalat UAE and maintained strong ties with government entities. Internationally, EA conducted several projects in the KSA, Oman and Nigeria.

EA is working on adding several new clients to its customer base in the next few months, thereby diversifying its client-specific courses and programs.

ETISALAT REAL ESTATE (eRE)

Etisalat Real Estate (eRE) manages and oversees the Portfolio of Etisalat Properties in the UAE and is in the process of implementing [TRIRIGA], a Real Estate Management System by (IBM), which provides enterprise-level capabilities for asset management, tenant management, space management and staff movement, and third-party integration.

eRE performs registration and asset optimization activities for Etisalat properties in the UAE to assist it to efficiently utilize office spaces, and maximize the potential use of the unutilized spaces for revenue generation. This is addition to supporting other ESH Business Units and Etisalat UAE in technical consultancy and project management.

ESH has earmarked 2016 as a year for aggressive growth through innovation and distribution. The focus will be spread across products, markets, customer segments, and the competitive landscape. The Company has already lined up multiple strategic initiatives across the various businesses and is working with industry leaders to develop winning partnerships, offering a variety of new business models in 2016. These business models will ensure rapid growth for ESH and its associated companies.


In 2015, Etisalat Afghanistan has gained further traction in the country’s increasingly competitive telecommunications sector by placing special emphasis on customer centricity whilst continuing to build on the innovative approach cultivated in 2014.

With the proliferation of Over-the-Top telecommunications services as well as the 3G licensing of all operators in the market, Afghanistan’s telecommunications sector is growing ever-more competitive. An additional factor in the regulatory sphere has placed further pressure on local telecoms companies in terms of ensuring customer satisfaction. This is the telecom regulator’s recent introduction, by presidential decree, of a new 10% telecom service fee tax, deductible upfront from all airtime top-ups and other bills, with effect from 23 September 2015. This has profoundly affected the financial performance of Afghani telecoms operators as well as other players, including the customer, further downstream. Most significantly, the tax burden has been passed on to customers and business partners.

As a result, retaining existing subscribers and attracting new ones has become far more challenging. This is why Etisalat Afghanistan has placed great emphasis on cultivating consumer-brand affinity via various key innovations, competitive pricing, and exceptional network performance in 2015. Meanwhile, we have continued to explore potential avenues for new acquisitions and revenue streams.

Thus, Etisalat Afghanistan’s various customer-centric initiatives in 2015 reflect the Company’s ever-deepening commitment to provide relevant products and services that improve engagement and promote the economic and social empowerment of our customers. In the past year, we have shifted our focus to the youth and businesses in their elementary stages.To improve service penetration, we have developed innovative products for young students and have sought to add value to our SME customer experience by providing various business solutions and services.

Within the youth market, Etisalat has lessened barriers to telecom services

for students who use this technology for communication and research in their studies. We have achieved this by subsidizing call charges within the closed user group of students registered under the special campus package and pre-loading student dongles with free data.

The extension of this customer-centric approach to the business sector has included several SME business forums, where entrepreneurs were trained on how to run successful and profitable businesses using widely acclaimed business guidelines, conducted by Etisalat Afghanistan in various provinces.

In addition to these specific focus areas, we have also taken numerous other actions to improve the Etisalat Afghanistan customer experience across the board. This includes the introduction, in collaboration with other Etisalat Groups’ operations, of a new data roaming product designed with citizens of the global village in mind. Additionally, we have explored opportunities for retail channel expansion that brings the product closer to where people need it, despite the challenges posed by the security environment. We have achieved this by expanding our retail network, improving retailer incentive schemes, micromarketing activities at grassroots level, and pushing for E-Top Up services. Etisalat has also promoted the use of mobile money to enable easier customer access to services and payments. In addition, mobile money services to government entities have been explored for the disbursement of payments.

As part of Etisalat’s determination to contribute to the development of Afghanistan, our CSR Strategy continues to focus on the development of sports and sportspeople in the country. In 2015, we renewed our commitment to the National Volley Ball Federation, as the official sponsors of the sport. Two international tournaments and 15 national tournaments took place. Etisalat also sponsored several other sporting events in the fields of cycling, football, swimming and cricket and our product and services are endorsed by the two National Team Cricket Celebrities.

Etisalat Afghanistan’s CSR efforts extended

beyond sports into the cultural arena in 2015. The Etisalat Annual Quran Contest – which, along withthe Annual Ramadan Food distribution drive, is one of the most anticipated annual events in Afghanistan – drew over 2,000 participants from all 34 provinces and was watched by more than seven million national television viewers.

As part of our people focus, we celebrated International Women’s Day on 8 March 2015 and initiated several awareness sessions aimed at creating safe working environments for employees. We also celebrated ‘Apple Day’, under the theme ‘We Care’, to communicate the importance of leading a healthy lifestyle. We conducted a blood-donation camp, wherein over 110 employees including the CEO participated, at our head office on 15 June 2015. Subsequent to the blood-donation camp and in response to arequest from the Ministry of Public Health, we sent blood-donation awareness SMSs to more than 100,000 customers.

As part of our Global Family initiative, we, along with other Etisalat affiliate companies, participated in the 2015 Health Grand Tour from 3 to 12 September. The 1,500km race began in Brussels on 3 September and concluded in Geneva on 12 September. The objective of the tour was to create awareness surrounding diabetes and help to test and develop new mobile health solutions. Mr. Ahmad Shekib Noori, from Etisalat Afghanistan, participated in this event.

With continued focus on data as the next frontier for further growth, Etisalat Afghanistan will be looking at the following areas in 2016 and beyond: Developing the retail network and micromarketing activities at grassroots level of each low-penetration province; leveraging small-screen vs. large-screen data propositions in pursuit of increased customer-focused innovations;Wi-Fi off-loading of 3G data services for improved service quality; and developing limited commercialization models for OTT as data continues to cannibalize IDD revenues.

Etisalat Afghanistan cultivated consumer-brand affinity via innovation and exceptional network performance.

In today’s highly volatile, politicized and competitive Sri Lankan mobile telecom industry, Etisalat Lanka used a customer centric approach and increased brand visibility to retain old customers and draw new ones in 2015.

The Sri Lankan mobile sector has less than 20 million subscribers serviced by five operators. This goes a long way to explaining why the industry, which is also highly volatile and politicized, has become so intensely competitive. This competitiveness is exacerbated by the fact that Sri Lanka has the world’s lowest data prices and among the world’s lowest mobile voice prices. Meanwhile, the Sri Lankan telecom regulatory pricing regime, due to a price differential, is also fairly skewed and biased in favor of larger players. At the same time, telcos must contend with the threat posed by the low pricing offered by Over-The-Top (OTT) service providers and Mobile Virtual Network Operators (MVNOs). The task of increasing revenue and profitability is thus very challenging for any telecom operator in this market.

Nevertheless, Etisalat Lanka took on this daunting task and prevailed in 2015 thanks to innovative marketing campaigns and promotions, improved leverage of social media, customer loyalty rewards, and a purposeful drive to increase brand visibility and awareness.

As Etisalat Lanka’s customers have always been an integral part of all company activities, we designed several promotions in 2015 to reward our most loyal customers. Significant among these campaigns was the 25th Anniversary promotion in celebration of the Copmany’s quarter-century-long presence in Sri Lanka.

This promotion ran for a period of six months, during which customers were presented with daily, weekly and monthly rewards to the value of LKR 25 million in total.

2015 also saw the launch of our campaign – entitled ‘If its internet, its Etisalat’ – to promote Etisalat Lanka as the network of choice for internet services on the island.

Meanwhile, Etisalat Lanka became the country’s first network to partner with the biggest OTT player in the market, WhatsApp, to offer unique daily and monthly plans to our prepaid customers.

Campaigns aimed specifically at strengthening Etisalat Lanka’s overall presence in the social media sphere included the Twitter Premier League and Social Media Day – which we hosted for the third and fourth consecutive years, respectively. Our Social Media Day was recommended by Mashable as one of the Top Five social media events in the world to attend.

Further to our customer-centric approach in 2015, Etisalat Lanka used creative loyalty rewards to bring our customers’ preferred lifestyles closer to them. The Etisalat Epic Rewards program treats customers to special offers such as exclusive passes to events and experiences. Devoted Etisalat Lanka customers are able to access this choice lifestyle by redeeming the loyalty currency they earn when they make their postpaid bill payments and purchase prepaid reloads. Focusing on the High Value Customer, Elite and Top Corporate segments were gifted with exclusive personalized Etisalat merchandise, accompanied by a message promising exciting rewards in the coming year. Etisalat Lanka organized exclusive movie screenings at Sri Lanka’s largest 3D cinema for its customers in the Epic Rewards High Value and Etisalat Very High Value Post-Paid Individual segments.

Finally, to show how in touch we are with our customers and their desired lifestyles, Etisalat Lanka hosted special live screenings of cricket matches and 2015 Rugby World Cup games where customers were able to enjoy Sri Lanka’s two favorite sports in a festive atmosphere with signature Etisalat hospitality.

In addition to rewarding our existing customers, Etisalat Lanka actively worked on enhancing brand visibility to draw new customers in 2015 and beyond. Targeting both local and foreign shoppers, travelers and youth, we strategically selected some of the most significant and popular

locations in and around Sri Lanka to gain brand ownership and drive our products and services. For example, we now own brand visibility in one of Sri Lanka’s most popular malls, Crescat, which receives a large number of local and Middle Eastern visitors each day. Other locations include the International Airport and bus stops.

As part of the Company’s corporate social responsibility efforts, the Etisalat Spectacle Dansala was held for the third consecutive year. The initiative saw the distribution of over 4,000 spectacles during this Poson season. Etisalat Lanka partnered with non-government organization So Others May See (SOMS) to conduct this program to provide spectacles and essential professional optometry services to needy individuals.

Furthermore, in celebration of the Poson season, we offered a free train shuttle service to all Sri Lankans. Conducted in collaboration with the Sri Lanka Railway Department, this special train shuttle service completed over 70 trips during its three-day run. Over 40,000 tickets were given away for free over the course the initiative.

Etisalat Lanka focus in 2016 will continue to be centered on enhancing customer experience, as well as improving efficiency and optimising cost structures. Our innovative solutions will influence mobile usage and positively impact the community through the launch of value-added products and services catered to customers’ needs and preferences.

Etisalat Lanka’s customer centric approach helped retain existing customers and attract new ones.


As the MSS industry faces increasing threats from cellular communication, fixed satellite services, and weak macroeconomic developments, Thuraya uses a customer-centric and innovative business model to continue to grow within traditional MSS sectors and expand into the retail sector.

Consumer and enterprise worldwide are showing an ever-increasing awareness of mobile satellite services (MSS), in general, and of Thuraya, in particular. Thuraya has largely been a pioneering force for this trend through innovative products like SatSleeve – the world’s first satellite adaptor for smartphones – which was launched in 2014.

However, while Thuraya remains committed to the growth that had outpaced the industry in past years, new macroeconomic and industry-specific challenges have recently caused this trend to slow down. Specifically, the continued penetration expansion of the Global System for Mobile communications’ (GSM) through terrestrial networks is increasingly encroaching on the MSS industry and so is a threat to growth. In 2015, Thuraya experienced this impact directly when the erection of GSM towers in Niger resulted in our losing all the event-based voice revenue we had benefited from during the “gold rush” in 2014 and the beginning of 2015. From only 60% of people having access to cellular networks back in 2005, more than 85% have access today.

Meanwhile, the MSS industry faces additional challenges from other avenues, such as the increasing convergence of Fixed Satellite Services (FSS) via the Ku and Ka bands as coverage is expanding and terminal sizes and prices are decreasing, making the FSS service more affordable and appealing. Moreover, although natural and man-made events are typically beneficial to the MSS industry, terrestrial resumption is now quicker and mobile base stations reduce the need for prolonged MSS “emergency” dependence.

Adding to this, military troop withdrawals in certain countries and budget cuts are also reducing demand from the traditional

primary MSS customer – government. This resulted in increasing competition in the industry for a larger piece of the declining demand.

During 2015, Thuraya proactively faced these significant challenges with a combination of innovative products, expansion into new sectors, and increased customer centricity.

Our greatest innovation of 2015 was arguably our launch of the industry’s most advanced satellite phone, the Thuraya XT-PRO. Targeted at professional users across a range of market sectors – including government, energy, media and NGOs, – the Thuraya XT-PRO offers talk-time of up to nine hours, which is the longest on any satellite phone currently on the market.

Also in 2015, Thuraya teamed up with DigiGone to launch DigiMed, a telemedicine solution to assist relief aid teams working in remote areas. The cutting-edge DigiMed kit allows crucial face-to-face consults to take place between patients and doctors through real-time teleconferencing, enabled by Thuraya’s portfolio of broadband terminals. It is also capable of streaming patient data in real time and allowing medical professionals to make on-the-spot decisions in emergency situations. DigiMed can be used with the Thuraya IP, IP+, IP Voyager and Orion IP terminals to establish a secure, flexible platform that can be customized to a specific business.

Meanwhile, Thuraya expanded our retail and online presence in2015 via a groundbreaking agreement with leading online retailer, Expansys, to facilitate the delivery of our products to the retail market. This coincided with the launch of a new generation of SatSleeve models – SatSleeve+ and SatSleeve Hotspot – which build on the original SatSleeve concept by offering greater choice, improved quality, and a new hotspot option. Thuraya is, again, leading in innovation by developing new ways to deliver its full SatSleeve product range to key target markets, which extend to a consumer audience alongside key enterprise sectors. The Expansys agreement enabled the

SatSleeve+ and SatSleeve Hotspot models to become available immediately in 28 countries across Europe. The full scope of the Expansys distribution agreement also means that Thuraya SatSleeve models are now available in high-profile third-party online stores, such as Amazon, Orange and Carrefour. This also allows managers and ship owners to monitor budgets effectively, as usage is charged to the Calling Card and not the telephone account.

Finally, Thuraya announced the launch of Calling Card – a dynamic market solution that reinforces value-for-money, convenience and versatility for both individual users and business managers – in 2015. Thuraya Calling Card was carefully developed with the customer’s needs in mind and will come as a welcome relief to cost-conscious managers, particularly in the maritime and energy sectors, who need to control operational costs of both equipment and staff. Thuraya Calling Card allows entire crews to use their individual Calling Cards to make personal calls from a single phone – ensuring that business and personal calls are kept separate.

As we move into 2016, Thuraya remains focused on growing its revenues in traditional MSS sectors (i.e. maritime, voice and IP), which are typically accessed through enterprise and government customers. However, Thuraya also plans to combat the aforementioned macroeconomic and industry-related threats to these revenue streams by simultaneously tapping more into the retail and mobile network operator markets to grow revenue in non-traditional ways. In addition, Thuraya will focus on preserving C-Band for satellite use, expanding licensing into new geographies, obtaining type approvals for new products, protecting existing spectrum, and securing additional spectrum in certain areas (i.e. Asia). All the while, Thuraya will remain committed to controlling costs while pursuing strategic initiatives that prepare the company for the next generation constellation.

Thuraya tackled challenges with a proactive combination of innovation and customer centricity.

Canar continues to develop new digital products and services in response to prevailing trends, thus expanding revenue streams, whilst always placing a very high premium on operational excellence, customer centricity, and innovation.

In 2015, Canar has built on the milestones achieved in 2014 by carefully tracking trends in the Sudanese market to develop innovative new products and services and update packages and bundles accordingly. This has contributed considerably to the expansion of Canar’s digital services revenue stream. Among other things, we have developed Transit Traffic Termination in Africa, extended our fiber network to new markets and neighboring countries (e.g. CHAD, Eretria and South Sudan), and leveraged our EASSY connectivity by developing wholesale businesses in East Africa. In addition, Canar has developed new capacity solutions (e.g. Fiber to BTS) for operators in Sudan and upgraded the existing CDMA/WIMAX network to LTE, whilst continuously providing state-of-the art technology and excellent QoS. Through all of these actions, Canar has become the leading Sudanese broadband service provider.

Whilst focusing specifically on product and service development and improvement, Canar has always maintained strong emphasis on enhancing our operational excellence.

In 2015, we endeavored to become an efficient and lean operation, engage continuously in performance-improving activities, enhance our support services, and increase the quality of all of our services. Further actions taken to improve operational excellence include the automation of operational workflow, and the re-engineering of operational processes to decrease time-to-market periods.

Such levels of operational excellence could not have been achieved were it not for our strongly customer-centric approach, by which the needs of the client are always at the top of our mind. As such, Canar devoted 2015 to: creating operational objectives designed to enhance customer satisfaction rates, defining staff performance key performance indicators built around

customer satisfaction, defining network and service quality parameters, creating dashboards to monitor Quality of Services, conducting ongoing customer satisfaction surveys (the results of which were responded to promptly and appropriately), developing the Canar Call Center with for stronger focus on corporate business, and outsourcing corporate customer provisioning.

Furthermore, as an important facet of customer-centricity, customer certainty was a major priority in 2015. As part of this, Canar introduced its new Customer Relations Management (CRM) section within the Enterprise Sales Unit. The CRM section caters to VIP customers and enables our account managers to give more attention to each customer segment without prioritizing any one over the others.

Being an enterprise-focused organization, Canar strives to provide corporate customers with a superior customer experience. In keeping with this, we established accounts on various social media outlets (such as WhatsApp and Facebook) to enable more efficient support and feedback to our corporate clients.

Beyond our accountability to our direct customers, our commitment to responsible corporate citizenship within the country of Sudan continued in 2015, during which time Canar focused its CSR activities on the education sector.

Canar set a precedent in the market through its flat rate offer to lease backhauling capacity to MTN, allowing the telecom provider to relay on the Canar network.

Canar rewarded its employees through the Fikrati reward program, designed to acknowledge special contributions or achievements outside of normal day-to-day tasks. Rewards were based on specific elements, such as cost optimization, staff productivity, revenue growth, improvement of service quality, innovation in systems and tools improvement, and enhancement of governance and processes.

Finally, innovation played a central role in Canar’s 2015 activities. We developed a virtual network operator model to monetize

existing networks and infrastructure. Through this model, Canar will overcome distribution obstacles such as high operating costs, service availability, better geographical coverage, and so forth.

Looking forward, Canar will leverage the success achieved in 2015 and introduce further innovative and services that aim to elevate the customer experience.

Canar realized the benefits of developing new digital products and services.


Capability building, performance alignment and people development remain at the top of the Etisalat Group agenda, as we remain committed to develop and invest in our people to support career growth and reach business objectives.

Etisalat Group’s talent initiatives run across many different countries and talent programs with differing levels of shareholding implemented across multiple geographies. In light of this, to ensure that our HR initiatives have a truly meaningful impact, Etisalat Group takes context into careful consideration and monitors the rate of transformation very closely. This helps us to build a cohesive, powerful workforce within a culturally diverse environment.

We ensure the placement of best-in-class specialists, with the ability to set agendas and govern operations effectively within their areas of expertise, within all Group functions. To identify and attract employees of this caliber, talent acquisition teams across our footprint now leverage professional social media platforms with remarkable results.

Our talent management initiatives continued to build on the successes of the past years in 2015, with the second cohort of High Potentials completing the program this year. This Group program has evolved over the years, with the aim of developing future leaders via collaboration between Etisalat and various best-in-class institutions. These institutions are all leaders in innovative learning solutions and executive education and include Harvard Manage Mentor, Informa Telecoms Academy, and HEC Paris. The High Potentials program is part of a concerted effort on the part of the Etisalat Group and our operating companies to grow future leaders from within, involving people from 21 nationalities across our footprint. We have also completed the Core Leadership Programme (CLP), for group middle management, and commenced the Global Leadership Programme (GLP), for executive development. The success of these programs is reflected in the fact that the number of critical executive positions filled internally has increased to 68%.

The global mobility of our assignees is one of the pillars of our talent management

2015 Awards); CHRO Etisalat UAE – HR Professional of the Year Private Sector, Best Employer Award for Promoting Health in the Workplace, Award for Excellence in HR through Technology (World HRD Congress Awards), Etisalat Misr – Employer of the Year award, Etisalat Nigeria – Best Company in Education and Best Company in the Promotion of Gender Equality (2015 SERAs Awards), in acknowledgement of the Company’s commitment to Corporate Social Responsibility in Nigeria.

Extending this beyond the workplace, the Etisalat Group is also committed to promoting active, healthy lifestyles in our employees. Accordingly, in 2015, we joined hands with the global community and leading technology partners once more to promote mHealth solutions for better healthcare in general and the prevention and proper management of diabetes in particular.

Given our belief that our people are what will determine our long-term success, in 2016, Etisalat Group will continue to search for innovative and effective solutions to motivate and grow our talent to drive optimal performance throughout our footprint.

approach and is a valuable tool for attracting, developing and retaining top talent. As part of this, in 2015, we substantially increased the number of cross-operating companies’ assignments. By actively managing our assignees and working closely with key stakeholders, we continue to optimize our assignment management, resulting in a more effective and efficient business model.

Etisalat UAE’s continued commitment to supporting the progress, learning and development of UAE nationals is part of our wider goal of developing local communities across our footprint. As such, nurturing national talent and investing in enhancing the skills and capabilities of UAE nationals remains a key strategic priority.

The global employee survey continues to grow in strength each year, with the 2015 survey seeing a record 82% of employees participating across the group. Inputs from the survey are instrumental in driving innovation and improvements in business performance across all our operations.

As a result of these and other initiatives, our employer brand image continues to improve, with our Talent Brand Index now at 18%. In 2015, the Etisalat Group was recognized as one of the Top 100 Most “In Demand” Employers in the EMEA and ranked Number 1 in the telecommunication industry in addition to being named “Dream Company to Work For” at the Asia Best Employer Awards 2015.

The performance management of HR activities is thus central to our ability to enact our strategy, as the Etisalat Group’s objectives are shared and aligned across all OpCo executives. The Etisalat Group’s emphasis on human resources to drive business performance was recognized in the form of several international awards in 2015 “Best HR Strategy”, “Best HR Strategy in Line with the Business”, “Dream Company to Work For”, “Asia’s Best Employer Brand” and “Excellence in improving Performance through Leadership”

Furthermore, operating companies across the group won many awards of their own: Etisalat UAE – HR Team of the Year Award (Human Assets Expansion Summit MENA

We remain committed to develop and invest in our people who will determine our long-term success


In 2015, Etisalat Group’s ongoing commitment to corporate social responsibility was once again evidenced by its numerous initiatives to address local economic development in the areas of education, health, environment and personal finances. These initiatives – some brand new and some continuations of existing programs – are about empowering the communities that Etisalat Group serves across its international footprint. They aim to improve communities by connecting people in ways never thought possible. In doing so, Etisalat not only helps to bridge the gap between emerging markets and developed nations but also to bring home the benefits of its digital dividend in the form of employment, economic growth and stability.

Etisalat Group recognises and values mobile technology as a tool for empowerment, but in order for CSR to be truly effective, it has to tie in with business objectives. As such, CSR has become an integral aspect of Etisalat Group’s business strategy, which entails long-term commitments to the markets in which it operates by working to build trust as a reliable partner for growth.

In Africa, for example, Etisalat has already begun to realise its ability to have a real transformational impact on local communities. By enabling small businesses to grow, Etisalat can help to create jobs and deliver new, innovative products and services to stimulate vast improvements in education, healthcare and many other socially vital initiatives. This is sustainability in action.

Etisalat Group’s sustainability and social responsibility strategy has been transformed in recent years, as it has undertaken several commitments to ensure that its efforts are better coordinated across all operations. This included pledging its support to the United Nations Global Compact (including adherence to the Compact’s Ten Principles) and working with the telecommunication industry body, GSMA to respond positively to sustainability issues through its Ambassador Programme.

In April 2015, Etisalat Group joined forces with Ericsson and Refugees United (REFUNITE) to launch a campaign to help the thousands of refugees and almost two-million internally displaced people in Pakistan and Afghanistan to reconnect through mobile services. This involved a free mobile application, a

Weena now employs over 93,000 female selling agents in Togo, Benin, Cote d’lvoire, Nigeria, Afghanistan and Pakistan and has, so far, impacted the lives of over 1.3 million people. In Nigeria, Etisalat partnered with the Charity for Cheer Foundation and the Bauchi State Government to launch the Free Eye Surgeries Camp, a community support initiative dedicated to positive intervention in areas related to health and education. As a result, 50 patients suffering from cataract infections underwent surgery and regained full sight.

In Saudi Arabia, Etihad Etisalat (or Mobily), in collaboration with several Saudi government departments, issued over 90 million “awareness SMS” across the country in 2015. These simple but effective texts are aimed at educating citizens in various fields, such as health care and legal matters, in order to improve various national economic and social sectors. In Egypt, the Origin program continues to provide water connections to the underprivileged in society. Through this initiative the most marginalized children and their families have a chance to get their basic

needs for safe water met and enjoy better health, hygiene, and opportunities to fulfill their potential.Origin’s initial target was to benefit 5,000 community members, but this ongoing project has, so far, benefited the daily lives of half a million people. The ultimate goal is to provide safe drinking water nationally.

Etisalat is also utilising new technology to help with environmental issues in the UAE. In 2015, Etisalat introduced the Middle East’s first embedded SIM cards, to be used with refuse bins for smart refuse management. The sensors show which bins are full and provide a more efficient way to plan and manage the deployment of bins and the fleet of collection vehicles.

Finally, in line with Etisalat’s strong belief in the necessity of strengthening its CSR programme across all operating companies, the Group launched an internal CSR Excellence award campaign. to promote and share best practices across the Group. In recognition of the business imperative, the assessment criteria included sustainability and return on investment.

free helpline, and a free SMS notification service, as well as awareness campaigns in conflict zones, refugee camps and tented cities. Coordinated, international efforts, like this, can only be achieved through the multinational, cross-agency cooperation managed by Etisalat Group.

Similarly, Etisalat took measures to assist refugees in countries like Mali, the Central African Republic, Northern Nigeria, Egypt, Afghanistan, and Pakistan. Displaced to remote areas by tragic regional conflicts and political unrest, these refugees were given access to financial aid through a partnership between the Etisalat Group and the World Food Programme. This took the form of a secure and simple transaction tool (the Electronic Social Cash initiative), which was instantly rolled out across entire countries, enabling refugees to satisfy their needs, even in the areas with no power or banking infrastructure.

The programme provided the refugees with cards pre-loaded with credit, which they could use to purchase goods (via a scanning system) or with telephone SIM cards loaded with credit for financial transactions. The additional advantage of this programme was that it controlled merchant price levels for subsidised goods and allowed for control over the distribution of funds.

Also in Africa, Etisalat Group also teamed up with the African Union in response to the outbreak of the deadly Ebola virus on the continent. Seven countries (Nigeria, Benin, Togo, Gabon, Niger, Central Africa, Burkina Faso and Cote d’Ivoire) participated in a SMS campaign to raise awareness and funds to support the fight against the disease.

2015 also witnessed the continued success of Etisalat Group’s flagship CSR initiatives, Weena – a mobile-for-development programme that focuses on empowering women in rural Africa and Asia. It is an integrated mobile service, providing dynamic and effective opportunities for women in resource-poor areas who experience low income, low empowerment, limited access to education, and limited mobility.

Weena agents, who own and use mobile phones, are rewarded for that usage through a unique community-focused programme based on Etisalat’s Mobile Money platform.

Etisalat Group partners with key players to foster good health, education, local culture, and sustainability, whilst realising pivotal business objectives.


The General Assembly:

The General Assembly (“GA”) is composed of all the shareholders and exercises all the powers granted thereto under the Law of incorporating the Company (“Company Law”) and its Articles of Association (AoA).

The General Assembly of the Company is entitled to look into all the matters related to the Company, and is, particularly, entrusted with approving the Annual Report on the Company’s activities & financial position during the preceding financial year, appointing external auditors & approving their report, and discussing & approving the balance sheet and the profit & loss accounts for the previous year. It also has the power to approve the Board of Directors’ recommendations with regard to dividends’ pay-outs.

The General Assembly is vested with electing the Board Members who are not appointed by the Government Shareholder and reviewing the Board remunerations & setting them. The GA is the authority which absolves the Board members and the external auditors from liability, discharges them or files a liability lawsuit against them.

Board of Directors:

The Board of Directors exercises all the powers required to carry out Company’s business as mandated in its objects, unless a Special Resolution passed to the contrary by the General Assembly or otherwise is explicitly stated in the Company Law or Articles of Association. The Board of Directors of Etisalat currently consists of eleven members. Seven Board Members, including the Chairman of the Board, were appointed by virtue of Federal Decree No.

No. 518 of 2009 concerning Governance

Rules and Corporate Discipline Standards. This Charter is considered a delegation from Board to the Audit Committee to undertake the tasks mentioned therein, which include the following :

-Ensuring the safety and integrity of theCompany’s financial statements;

-Reviewing and implementing systems and internal control policies, and supervising the Internal Control Department to ensure that it is undertaking its duties accurately;

-Monitoring the Company’s abidance by the laws and regulations;

-Developing and implementing a policy for contracting with the external auditors and ensuring their independence; and

-Reviewing financial control systems and risk management.

The Committee’s Charter has clarified the Audit Committee’s duties in detail, its composition, the conditions & quorum of convening its meetings, and the mechanism of its decision-making.

The Committee is comprised of three (3) non-executive and independent members of the Board of Directors, in addition to an external member experienced in accounting and finance. The Committee convenes quarterly or whenever necessary.

Nomination and Remuneration Committee:

In compliance with the applicable laws in the field of governance and in implementation of its best practices, the Board of Directors has constituted the Nomination and Remuneration Committee

30 of 2015 concerning the appointment of the Government’s representatives in Etisalat Board of Directors.

The other four members of the Board of Directors were elected during the General Assembly meeting which was held on 24th March 2015 by the shareholders who own 40 per cent of the Company’s shares, i.e. the shares which are not held by Emirates Investment Authority (the entity which represents the Federal Government’s stake in Etisalat).

Etisalat is committed to applying best practices and corporate governance standards, taking into consideration best international standards in this regard and the applicable laws in the UAE. Therefore, the composition of the Company’s Board of Directors took into account the requirements of the Ministerial Resolution No. 518 of 2009 concerning Governance Rules and Corporate Discipline Standards with respect to the capacity of the Board members, where all current Board members are non-executive and independent.

Committees of the Board of Directors:

For the purpose of rendering the assistance to the Board of Directors in discharging its responsibilities, the Board has established three Committees, namely:

1) Audit Committee;

2) Nomination and Remuneration Committee; and

3) Investment and Finance Committee.

Audit Committee:

The Audit Committee undertakes its duties in accordance with its Charter, which complies with the Ministerial Resolution

to undertake the duties stipulated under the Committee’s Charter, which is in line with the Ministerial Resolution No. 518 of 2009 concerning Governance Rules and Corporate Discipline Standards. This Charter is considered a delegation from the Board of Directors to the Committee to discharge its duties mentioned therein.

The main objective of constituting the Nomination and Remuneration Committee is to ensure that the Board of Directors is undertaking its duties diligently and is complying with the Governance Rules and Discipline Standards. The Committee is also responsible for organizing and following up the nomination procedures for the Board membership, constantly ensuring the independence of the members of the Board of Directors and reporting to the Board if any Board member becomes no more independent.

The Committee is further entrusted with developing policies with respect to determining the Company’s needs for talents at the level of executive management and employees as well as developing policies for granting remunerations, incentives and salaries to the Company’s Board members, executive management and employees in a manner that ensures meeting its objectives and commensurate with its performance.

The Committee’s Charter provided for the detailed powers of the Committee, its composition, the conditions & quorum of its meetings convention and decision-making mechanism.

In the course of exercising its functions, the Committee takes into consideration the competitive nature of the Company strategy and the fair compensations commensurate with the same to attract

and retain talented employees for achievement of best results.

Nomination and Remuneration Committee is comprised of four (4) non-executive independent members from the Board of Directors. The Committee holds at least four meetings per year.

Investment and Finance Committee:

In addition to the Audit Committee and the Nomination and Remuneration Committee provided for in the Ministerial Resolution No.518 of 2009 concerning Governance Rules and Corporate Discipline Standards, the Board of Directors of Company constituted the Investment and Finance Committee to assist the Board in carrying out its functions related to the Company’s internal and external investments.

The Charter of the Committee defined the functions and duties assigned to the Committee and specified the cases where the Committee is entitled to make decisions as it deems appropriate. On the other hand, it provided for the cases where the Committee’s role is confined with raising recommendations to the Board for passing appropriate resolutions thereon. This Charter is deemed an authorization by the Board for the Committee to carry out the functions and responsibilities stipulated therein.

The Investment and Finance Committee is comprised of four (4) independent non-executive members from the Board of Directors.

Operating Structure of the Company

During 2015, Etisalat continued to implement its revised structure, which was commenced in 2009.

The purpose was to manage its international expansion strategy, protect value resulting from the Company’s operations

in the United Arab Emirates and overseas, and gain the trust of its stakeholders by putting in place a solid structure based on best governance practices and corporate punctuality.

At the level of the United Arab Emirates, the Group organization structure features two autonomous Operating Units: Etisalat UAE Unit (which is entrusted with providing the licensed telecom services in the United Arab Emirates); and the Etisalat Services Unit (a wholly owned holding company entrusted with providing certain non-core, non-telecom services to the Company as well as third parties).

The Company carries out its wide array of activities and responsibilities and defines the framework for the same. It also establishes key policies of its operating companies, prepares their plans, monitors their operational & financial performance, and presents reports on the same to the Board of Directors on a regular basis.


Independent Auditor’s Report to the Shareholders

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of Emirates Telecommunications Group Company PJSC (“the Company”) and its subsidiaries (together, the “Group”), which comprise the consolidated statement of financial position as at 31 December 2015, and the consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards and their preparation in compliance with the applicable provisions of the UAE Federal Law No. (2) of 2015, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as at 31 December 2015 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Report on other legal and regulatory requirements

Further, as required by the UAE Federal Law No. (2) of 2015, we report that:

i. We have obtained all the information we

considered necessary for the purposes of our audit;

ii. 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;

iii. The Group has maintained proper books of account;

iv. The financial information included in the Chairman’s statement is consistent with the books of account of the Group;

v. As disclosed in note 12 to the consolidated financial statements, the Group has further invested in shares in subsidiaries during the financial year ended 31 December 2015;

vi. Note 16 to the consolidated financial statements discloses material related party transactions and balances, and the terms under which they were conducted;

vii. Based on the information that has been made available to us nothing has come to our attention which causes us to believe that the Group has contravened during the financial year ended 31 December 2015 any of the applicable provisions of the UAE Federal Law No. (2) of 2015 or in respect of the Company, its Articles of Association which would materially affect its activities or its financial position as at 31 December 2015; and

viii. Note 5 to the consolidated financial statements discloses the social contributions made during the financial year ended 31 December 2015.

Deloitte & Touche (M.E.)Rama Padmanabha AcharyaRegistered Auditor Number 7019 March 2016


Emirates Telecommunications Group Company PJSCConsolidated statement of profit or loss for the year ended 31 December 2015

2014(Restated)

AED’0002015

AED’000Notes

Continuing operations

Revenue 51,737,018 48,508,398

Operating expenses 5 (33,048,845) (31,705,838)

Impairment and other losses 9 (995,330) (931,963)

Share of results of associates and joint ventures 13 (315,929) (639,173)

Operating profit before federal royalty 17,376,914 15,231,424

Federal royalty 5 (6,054,976) (5,305,530)

Operating profit 11,321,938 9,925,894

Finance and other income 6 916,078 2,652,927

Finance and other costs 7 (1,212,177) (1,736,288)

Profit before tax 11,025,839 10,842,533

Taxation 8 (1,277,590) (1,165,325)

Profit for the year from continuing operations 9,748,249 9,677,208

Discontinued operations

Loss from discontinued operations 35 (237,331) (114,662)

Profit for the year 9,510,918 9,562,546

Profit attributable to:

The equity holders of the Company 8,262,756 8,601,086

Non-controlling interests 1,248,162 961,460

9,510,918 9,562,546

Earnings per share

Basic and diluted 34 AED 0.95 AED 0.99

Chairman

The accompanying notes on pages 67 to 121 form an integral part of these consolidated financial statements. The Independent Auditor’s report is set out on page 61

Board Member

Emirates Telecommunications Group Company PJSCConsolidated statement of comprehensive income for the year ended 31 December 2015


20152014

(Restated)Notes AED’000 AED’000

Profit for the year 9,510,918 9,562,546

Other comprehensive (loss) / income

Items that will not be reclassified subsequently to profit or loss:

Remeasurement of defined benefit obligations - net of tax (55,432) (141,596)

Items that may be reclassified subsequently to profit or loss:

Exchange differences arising during the year

Exchange differences on translation of foreign operations (3,248,799) (2,445,629)

Gain on hedging instruments designated in hedges of the net assets of foreign operations

22 1,255,830 1,301,869

Available-for-sale financial assets

Loss on revaluation of financial assets during the year (172,162) (27,969)

Reclassification adjustment relating to available-for-sale financial assets impaired during the year

295,964 -

Reclassification adjustment relating to available-for-sale financial assets on disposal

28 (16,076) (284,991)

Total other comprehensive loss (1,940,675) (1,598,316)

Total comprehensive income for the year 7,570,243 7,964,230

Attributable to:

The equity holders of the Company 7,674,508 7,723,284

Non-controlling interests (104,265) 240,946

7,570,243 7,964,230 7,964,230


Emirates Telecommunications Group Company PJSCConsolidated statement of financial position as at 31 December 2015

2014(Restated)

AED’000

2013(Restated)

AED’000

2015

AED’000NotesNon-current assets

Goodwill 9 14,577,512 15,690,382 5,552,266

Other intangible assets 9 17,193,072 19,094,776 9,447,281

Property, plant and equipment 10 46,269,981 45,972,612 31,319,161

Investment property 11 39,357 41,378 41,211

Investments in associates and joint ventures 14 4,648,888 4,969,044 6,491,053

Other investments 15 812,338 983,997 866,984

Other receivables 18 213,645 240,066 595,981

Derivative financial instruments 22 675,412 293,584 -

Loans to related party 16 1,232,884 2,390,194 2,390,194

Deferred tax assets 8 308,734 317,383 243,042

85,971,823 89,993,416 56,947,173

Current assets

Inventories 17 774,089 624,652 498,232

Trade and other receivables 18 18,215,158 17,318,579 10,613,248

Current income tax assets 8 703,089 637,299 503,396

Due from associates and joint ventures 16 565,804 459,855 683,833

Other investments held for sale 15 - - 448,448

Cash and bank balances 19 21,422,354 18,542,859 15,450,248

41,680,494 37,583,244 28,197,405

Assets classified as held for sale 35 612,230 532,757 -

Total assets 128,264,547 128,109,417 85,144,578

Non-current liabilities

Other payables 20 1,533,176 1,075,481 828,565

Borrowings 21 17,880,525 18,619,459 4,467,122

Payables related to investments and licenses 23 693,661 936,699 68,751

Derivative financial instruments 22 1,607 - -

Deferred tax liabilities 8 4,015,579 4,702,839 1,721,291

Finance lease obligations 24 10,934 17,283 2,460

Provisions 25 207,808 126,736 201,089

Provision for end of service benefits 26 1,910,480 2,044,540 1,911,773

26,253,770 27,523,037 9,201,051

Current liabilities

Trade and other payables 20 32,685,713 30,770,852 20,974,568

Borrowings 21 4,199,637 3,609,711 1,404,543

Payables related to investments and licenses 23 3,213,147 3,133,794 2,963,623

Current income tax liabilities 8 320,115 369,379 185,812

Finance lease obligations 24 7,070 6,983 2,564

Provisions 25 1,918,844 1,976,404 1,172,286

42,344,526 39,867,123 26,703,396

Liabilities directly associated with the assets

classified as held for sale 35 291,152 504,785 -

Total liabilities 68,889,448 67,894,945 35,904,447

Net assets 59,375,099 60,214,472 49,240,131

Equity

Share capital 27 8,696,754 7,906,140 7,906,140

Reserves 28 27,583,414 27,440,371 28,266,980

Retained earnings 7,208,883 6,873,841 4,006,459

Equity attributable to the equity holders of the Company 43,489,051 42,220,352 40,179,579

Non-controlling interests 12 15,886,048 17,994,120 9,060,552

Total equity 59,375,099 60,214,472 49,240,131

Chairman


Board Member

Emirates Telecommunications Group Company PJSCConsolidated statement of changes in equity for the year ended 31 December 2015


Share capital ReservesRetained earnings

Owners' equity

Non-controlling interests

Totalequity

Notes AED’000 AED’000 AED’000 AED’000 AED’000 AED’000

Balance at 1 January 2014 (as previously reported) 7,906,140

28,266,980

4,359,024

40,532,144

9,060,552

49,592,696

Effects of restatement 38 - - (352,565) (352,565) - (352,565)

Balance at 1 January 2014 (as restated)

7,906,140 28,266,980 4,006,459 40,179,579 9,060,552 49,240,131

Total comprehensive income for the year as restated

- (844,850) 8,568,134 7,723,284 240,946 7,964,230

Other movements in equity - - 326 326 356 682

Transfer to reserves - 18,241 (18,241) - - -

Acquisition of a subsidiary - - - - 8,159,944 8,159,944

Transactions with owners: - Acquisition of non-controlling interests

12 - - (150,933) (150,933) 132,569 (18,364)

Equity contribution from non-controlling interests for acquisition of a subsidiary

12 - - - - 1,791,831 1,791,831

Dividends 33 - - (5,531,904) (5,531,904) (1,392,078) (6,923,982)

Balance at 31 December 2014 (as restated)

7,906,140 27,440,371 6,873,841 42,220,352 17,994,120 60,214,472

Balance at 1 January 2015 7,906,140 27,440,371 6,873,841 42,220,352 17,994,120 60,214,472

Total comprehensive income for the year

- (575,277) 8,249,785 7,674,508 (104,265) 7,570,243

Other movements in equity - - 770 770 16,362 17,132

Transfer to reserves 28 - 881,313 (881,313) - - -

Transactions with owners:

Disposal of a subsidiary 36 - (162,993) - (162,993) 115,450 (47,543)

Acquisition of non-controlling interests

- - (434) (434) (5,664) (6,098)

Repayment contribution of equity contribution to non-controlling interests for acquisition of a subsidiary

- - - - (209,094) (209,094)

Bonus issue of 790.614 million fully paid shares of AED 1

27 790,614 - (790,614) - - -

Dividends 33 - - (6,243,152) (6,243,152) (1,920,861) (8,164,013)

Balance at 31 December 2015 8,696,754 27,583,414 7,208,883 43,489,051 15,886,048 59,375,099

Attributable to equity holders of the Company


Emirates Telecommunications Group Company PJSCNotes to the consolidated financial statements for year ended 31 December 2015

Emirates Telecommunications Group Company PJSCConsolidated statement of cash flows for the year ended 31 December 2015 2015

2014(Restated)

Notes AED’000 AED’000Operating profit including discontinued operations 11,087,406 9,834,941

Adjustments for:

Depreciation 10, 11 5,837,793 5,163,502

Amortisation 9 1,828,310 1,694,716

Impairment and other losses 9,10 995,330 931,963

Share of results of associates and joint ventures 13 315,929 639,173

Provisions and allowances 886,745 1,079,753

Other non-cash movements (84,654) (21,694)

Operating profit before changes in working capital 20,866,859 19,322,354

Changes in working capital:

Inventories (176,155) 51,816

Due from associates and joint ventures (104,283) 223,979

Trade and other receivables (1,904,834) (2,560,729)

Trade and other payables 3,952,581 3,143,763

Cash generated from operations 22,634,168 20,181,183

Income taxes paid (1,762,003) (2,266,300)

Payment of end of service benefits 26 (447,245) (706,363)

Net cash generated from operating activities 20,424,920 17,208,520

Cash flows from investing activities

Net cash from (acquisition) / disposal of other investments (33,792) 486,928

Net cash outflow on disposal of a subsidiary (22,756) -

Purchase of property, plant and equipment (8,779,322) (6,874,794)

Proceeds from disposal of property, plant and equipment 196,558 239,141

Purchase of other intangible assets (1,529,228) (2,038,764)

Proceeds from disposal of other intangible assets 127,329 25

Movement in term deposits with maturities over three months 19 (3,457,471) (962,898)

Dividend income received from associates and other investments 7,800 797,559

Acquisition of Maroc Telecom, net of cash acquired 30 - (18,660,985)Acquisition of additional equity in subsidiary (99,956) (18,370)Finance and other income received 783,982 1,966,853

Net cash used in investing activities (12,806,856) (25,065,305)

Cash flows from financing activities

Proceeds from borrowings and finance lease obligations 5,694,619 34,636,255

Repayments of borrowings and finance lease obligations (4,186,981) (18,608,720)Equity (repayment to)/contribution from non-controlling interests for acquisition of a subsidiary (209,094) 1,813,528 Dividends paid (8,164,013) (6,923,982)

Finance and other costs paid (1,242,993) (1,755,522)

Net cash (used in) / generated from financing activities (8,108,462) 9,161,559

Net (decrease) / increase in cash and cash equivalents (490,398) 1,304,774

Cash and cash equivalents at the beginning of the period 6,052,923 3,914,295

833,854Effects of foreign exchange rate changes (9,225)

Cash and cash equivalents at the end of the year 19 5,553,300 6,052,923

During the year, the Group concluded the swap of its entire stake in one of the available for sale financial assets with the stake of one of the minority shareholders in Canar and the derecognition of the spectrum in PTCL, having a non cash impact of AED 6.1 million and AED 80 million respectively, which have been reflected as non-cash transactions in the consolidated statement of cash flows for the year ended 31 December 2015.

Certain fixed deposits having maturities greater than three months have been excluded from cash and cash equivalents and the comparative figures have accordingly been reclassified (refer note 19).

The accompanying notes on pages 67 to 121 form an integral part of these consolidated financial statements. The Independent Auditor’s report is set out on pages 61

The significant accounting policies adopted in the preparation of these consolidated financial statements are set out below.

Basis of preparationThe consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applicable to companies reporting under IFRS and the applicable provisions of UAE Fderal Law No. (2) of 2015. The preparation of 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. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3. The consolidated financial statements are prepared under the historical cost convention except for the revaluation of certain financial instruments and in accordance with the accounting policies set out herein.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether the price is directly observable or estimated using another valuation technique.

The consolidated financial statements are presented in UAE Dirhams (AED) which is the Company’s functional and presentational currency, rounded to the nearest thousand except where otherwise indicated.

New and amended standards adopted by the GroupThe accounting policies adopted in the preparation of the consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2014, except for the adoption of the following new or amended accounting policies and new standards and interpretations

effective as of 1 January 2015.

The following revised IFRSs have been adopted in this consolidated financial statements. The application of these revised IFRSs has not had any material impact on the amounts reported for the current and prior periods but may affect the accounting for future transactions or arrangements.

• Annual Improvements to IFRSs 2010 - 2012 Cycle that includes amendments to IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24 and IAS 38.

• Annual Improvements to IFRSs 2011 - 2013 Cycle that includes amendments to IFRS 1, IFRS 3, IFRS 13 and IAS 40.

• Amendments to IAS 19 Employee Benefits to clarify the requirements that relate to how contributions from employees or third parties that are linked to service should be attributed to periods of service.

1. General information

The Emirates Telecommunications Group (‘’the Group’’) comprises the holding com-pany Emirates Telecommunications Group Company PJSC (‘‘the Company’’), formerly known as Emirates Telecommunications Corporation (“Corporation”) and its subsidi-aries. The Corporation was incorporated in the United Arab Emirates (“UAE”), with lim-ited liability, in 1976 by UAE Federal Gov-ernment decree No. 78, which was revised by the UAE Federal Act No. (1) of 1991 and further amended by Decretal Federal Code No. 3 of 2003 concerning the regulation of the telecommunications sector in the UAE. In accordance with Federal Law No. 267/10 for 2009, the Federal Government of the UAE transferred its 60% holding in the Cor-poration to the Emirates Investment Author-ity with effect from 1 January 2008, which is ultimately controlled by the UAE Federal Government.

In accordance with the Decree by Federal Law no. 3 of 2015 amending some provisions of the Federal Law No. 1 of 1991 (the “New Law”) and the new articles of association of

Emirates Telecommunications Group Compa-ny PJSC (the “New AoA”), Emirates Telecom-munications Corporation has been converted from a corporation to a public joint stock company and subject to the provisions of UAE Federal Law no. 2 of 2015 on Commer-cial Companies (the “Companies Law”) unless otherwise stated in the New Law or New AoA. Accordingly, the name of the corporation has been changed to Emirates Telecommu-nications Group Company PJSC. The new law introduces two new types of shareholders re-lating to government shareholders, a Special Shareholder and a Government Shareholder. Under the new law, the Company may issue different classes of shares, subject to the ap-proval of the Special shareholder. The new law reduces the minimum number of shares held by any UAE government entity in the Company from owning at least 60% shares in the Company’s share capital to an owner-ship of not less than 51%, unless the Spe-cial Shareholder decides otherwise. Under the new Law, foreign shareholders (whether natural or legal / judicial persons) may own up to 20% of the Company’s ordinary shares provided that shares owned by such foreign persons / entities shall not hold any voting

rights in the Company’s general assembly (however, holders of such shares may attend such meeting). The Company has to under-take the procedures required to implement and align its status with the provisions of the new law within one year from the date of its issue, renewable by a decision of the Special Shareholder. The address of the registered office is P.O. Box 3838, Abu Dhabi, United Arab Emirates. The Company’s shares are listed on the Abu Dhabi Securities Exchange.

The principal activities of the Group are to provide telecommunications services, media and related equipment including the provi-sion of related contracting and consultancy services to international telecommunications companies and consortia. These activities are carried out through the Company (which holds a full service license from the UAE Tel-ecommunications Regulatory Authority valid until 2025), its subsidiaries, associates and joint ventures.

These consolidated financial statements were approved by the Board of Directors and au-thorised for issue on 9 March 2016.

2. Significant accounting policies



New and amended standards adopted (continued)

New and amended standards in issue but not yet effective

At the date of the consolidated financial statements, the following Standards, Amendments and Interpretations have not been effective but have not been early adopted:

Effective date

IFRS 9 Financial Instruments (revised versions in 2009, 2010, 2013 and 2014) 1 January 2018

Amendment to IFRS 7 Financial Instruments: Disclosures relating to transition to IFRS 9 (or otherwise when IFRS 9 is first applied)

When IFRS 9 is first applied

IFRS 14 Regulatory deferral accounts 1 January 2016

IFRS 7 Financial Instruments: Disclosures relating to the additional hedge accounting disclosures (and consequential amendments) resulting from the introduction of the hedge accounting chapter in IFRS 9

When IFRS 9 is first applied

Amendments to IFRS 11 - Accounting for acquisitions of Interests in Joint operations 1 January 2016

Amendments to IAS 16 and IAS 38 - Clarification of acceptable methods of depreciation and amortisation 1 January 2016

Amendments to IAS 16 and IAS 41 - Agriculture: Bearer plants 1 January 2016

IFRS 15 – Revenue from contracts with customers 1 January 2018

Amendment to IAS 27 Separate Financial Statements (as amended in 2011) relating to reinstating the equity method as an accounting option for investments in in subsidiaries, joint ventures and associates in an entity’s sepa-rate financial statements

1 January 2016

Annual Improvements to IFRSs 2012 - 2014 Cycle covering amendments to IFRS 5, IFRS 7, IAS 19 and IAS 34 1 January 2016

Amendments to IFRS 10 and IAS 28 clarify that the recognition of the gain or loss on the sale or contribution of assets between an investor and its associate or joint venture depends on whether the assets sold or contributed constitute a business

1 January 2016

IFRS 16 Leases 1 January 2019

IAS 1 Presentation of Financial Statements: Amendments resulting from the disclosure initiative 1 January 2016

Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures (2011) relating to the treatment of the sale or contribution of assets from and investor to its associate or joint venture 2.3

Effective date de-ferred indefinitely

Management anticipates that the application of the above Standards and Interpretations in future periods will have no material impact on the consolidated financial statements of the Group in the period of initial application with the exception of IFRS 15 Revenue From Contracts with Customers, IFRS 9 Financial Instruments and IFRS 16 Leases which management is currently assessing. However, it is not practicable to provide a reasonable estimate of effects of the application of these standards until the Group performs a detailed review.

Basis of consolidationThese consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved when the Group has:

• has power over the investee;

• is exposed , or has rights, to variable returns from its involvement;

• has the ability to use its power to affect its returns.

The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has the

2. Significant accounting policies (continued)

power to control another entity.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling interests share of changes in equity since the date of the business combination. Total comprehensive income within subsidiaries is attributed to the Group and to the non-controlling interest even if this results in non-controlling interests having a deficit balance.

Subsidiaries are consolidated from

the date on which effective control is transferred to the Group and are excluded from consolidation from the date that control ceases. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Intercompany transactions, balances and any unrealised gains/losses between Group entities have been eliminated in the consolidated financial statements.



Basis of consoldation (continued)Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Group.

Business combinations The acquisition of subsidiaries is accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the fair value, at the date of exchange, of the assets given, equity instruments issued and liabilities incurred or assumed. The acquiree’s identifiable assets and liabilities that meet the conditions for recognition under IFRS 3 Business Combinations are recognised at their fair values at the acquisition date. Acquisition-related costs are recognised in the consolidated statement of profit or loss as incurred.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the acquisition-date net fair value of the acquiree’s identifiable assets and liabilities exceeds the cost of the business combination, the excess is recognised immediately in the consolidated statement of profit or loss.

The non-controlling interest in the acquire is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

Step acquisitionIf the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquire is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in the consolidated statement of profit or loss. Amounts arising from interests in the acquire prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment

would be appropriate if that interest were disposed of.

Associates and joint ventures A joint venture is a joint arrangement whereby the Group has joint control of the arrangement and has corresponding rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. Associates are those companies over which Group exercises significant influence but it does not control or have joint control over those companies. Investments in associates and joint ventures are accounted for using the equity method of accounting except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with IFRS 5. Investments in associates and joint ventures are carried in the consolidated statement of financial position at cost as adjusted by post-acquisition changes in the Group’s share of the net assets of the associates and joint ventures less any impairment in the value of individual investments. Losses of the associates and joint ventures in excess of the Group’s interest are not recognised unless the Group has incurred legal or constructive obligations.

The carrying values of investments in associates and joint ventures are reviewed on a regular basis and if impairment in the value has occurred, it is written off in the period in which those circumstances are identified.

Any excess of the cost of acquisition over the Group’s share of the fair values of the identifiable net assets of the associates at the date of acquisition is recognised as goodwill and included as part of the cost of investment. Any deficiency of the cost of acquisition below the Group’s share of the fair values of the identifiable net assets of the associates at the date of acquisition is credited to the consolidated statement of profit or loss in the year of acquisition.

The Group’s share of associates’ and joint ventures’ results is based on the most recent financial statements or interim financial statements drawn up to the

Group’s reporting date. Accounting policies of associates and joint ventures have been adjusted, where necessary, to ensure consistency with the policies adopted by the Group.

Profits and losses resulting from upstream and downstream transactions between the Groups (including its consolidated subsidiaries) and its associate or joint ventures are recognised in the Group’s financial statements only to the extent of unrelated group’s interests in the associates or joint ventures. Losses may provide evidence of an impairment of the asset transferred, in which case appropriate provision is made for impairment.

Dilution gains and losses arising on deemed disposal of investments in associates and joint ventures are recognised in the consolidated statement of profit or loss.

Revenue Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for telecommunication products and services provided in the normal course of business. Revenue is recognised, net of sales taxes, discounts and rebates, when it is probable that the economic benefits associated with a transaction will flow to the Group and the amount of revenue and associated cost can be measured reliably. Revenue from telecommunication services comprises 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 users of other fixed line and mobile networks to the Group’s network.

Access charges and airtime used by contract customers are invoiced and recorded as part of a periodic billing cycle and recognised as revenue over the related access period, with unbilled revenue resulting from services already provided from the billing cycle date to the end of each period accrued and unearned revenue from services provided in periods after each accounting period deferred.



Revenue (continued)Revenue from the sale of prepaid credit is recognised on the actual utilisation of the prepaid credit and is deferred as deferred income until such time as the customer uses the airtime, or the credit expires.

Revenue from data services and information provision is recognised when the Group has performed the related service and, depending on the nature of the service, is recognised either at the gross amount billed to the customer or the amount receivable by the Group as commission for facilitating the service.

Incentives are provided to customers in various forms and are usually offered on signing a new contract or as part of a promotional offering. Where such incentives are provided on connection of a new customer or the upgrade of an existing customer, revenue representing the fair value of the incentive, relative to other deliverables provided to the customer as part of the same arrangement, is deferred and recognised in line with the Group’s performance of its obligations relating to the incentive.

In revenue arrangements including more than one deliverable that have value to a customer on standalone basis, the arrangement consideration is allocated to each deliverable based on the relative fair value of the individual elements. The Group generally determines the fair value of individual elements based on prices at which the deliverable is regularly sold on a standalone basis.

Contract revenue is recognised under the percentage of completion method. Profit on contracts is recognised only when the outcome of the contracts can be reliably estimated. Provision is made for foreseeable losses estimated to complete contracts.

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.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assets to that asset’s net carrying amount.


LeasingLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

i) The Group as lessorAmounts due from lessees under finance leases are recorded as 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.

Revenues from the sale of transmission capacity on terrestrial and submarine cables are recognised on a straight-line basis over the life of the contract. 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.

ii) The Group as lesseeRentals payable under operating leases are charged to the consolidated statement of profit or loss on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

Foreign currencies

i) Functional currencies The individual financial statements of each of the Group’s subsidiaries, associates and joint ventures are presented in the currency of the primary economic environment in which they operate (its functional currency). For the purpose of the consolidated financial statements, the results, financial position and cash flows of each Group company are expressed in UAE Dirhams, which is the functional currency of the Company, and the presentation currency of the consolidated financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional currency are recorded at exchange rates prevailing at the dates of the transactions. At end of reporting period, monetary items that are denominated in foreign currencies are retranslated into the entity’s functional currency at rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

ii) ConsolidationOn consolidation, the assets and liabilities of the Group’s foreign operations are translated into UAE Dirhams at exchange rates prevailing on the date of end of each reporting period. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are also translated at exchange rates prevailing at the end of each reporting period. 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 are recognised in other comprehensive income and are presented in the translation reserve in equity. On disposal of overseas subsidiaries or when significant influence is lost, the cumulative translation differences are recognised as income or expense in the period in which they are disposed of.

iii) Foreign exchange differencesExchange differences are recognised in the consolidated statement of profit or loss in the period in which they arise except for exchange differences that relate to assets under construction for future productive use. These are included in the cost of those assets when they are regarded as an adjustment to interest costs on foreign currency borrowings. Exchange differences on transactions entered into to hedge certain foreign currency risks; and exchange differences on monetary items receivable from or payable to a foreign



iii) Foreign exchange differences (continued)

operation for which settlement is neither planned nor likely to occur, which form part of the net investment in a foreign operation are recognised initially in other comprehensive income and reclassified from equity to the consolidated statement of profit or loss on disposal of net investment.

Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in the consolidated statement of profit or loss in the period in which they are incurred.

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 profit or loss 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 profit or loss on a systematic basis over the expected useful life of the related asset upon capitalisation.

End of service benefits 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 for employees’ end of service benefits for non-UAE nationals is made in

accordance with the Projected Unit Cost method as per IAS 19 Employee Benefits taking into consideration the UAE Labour Laws. The provision is recognised based on the present value of the defined benefit obligations.

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 discount rates are set in line with the best available estimate of market yields currently available at the reporting date with reference to high quality corporate bonds or other basis, if applicable.

TaxationThe tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of profit or loss because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by end of the reporting period.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the liability method.

Deferred tax is calculated using relevant tax rates and laws that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax is charged or credited in the consolidated statement of profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that sufficient taxable profits will be available in the future against which deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither taxable profit nor the accounting profit.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Property, plant and equipmentProperty, plant and equipment are only measured at cost, less accumulated depreciation and any impairment. Cost comprises the cost of equipment and materials, including freight and insurance, charges from contractors for installation and building works, direct labour costs, capitalised borrowing costs and an estimate of the costs of dismantling and removing the equipment and restoring the site on which it is located.



Property, plant and equipment (Continued)

Assets in the course of construction are carried at cost, less any impairment. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting policy. Depreciation of these assets commences when the assets are ready for their intended use.

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. All other repairs and maintenance costs are charged to consolidated statement of profit or loss during the period in which they are incurred.

Other than land (which is not depreciated), the cost of property, plant and equipment is depreciated on a straight line basis over the estimated useful lives of the assets as follows:

Buildings:

Permanent – the lesser of 20 – 30 years and the period of the land lease.

Temporary – the lesser of 4 – 10 years and the period of the land lease.

Plant and equipment: Years

Submarine – fibre optic cables 20

– coaxial cables 10

Cable ships 15

Coaxial and fibre optic cables 15 – 25

Line plant 15 – 25

Exchanges 5 – 10

Switches 15

Radios/towers 10 – 15

Earth stations/VSAT 5 – 10

Multiplex equipment 10

Power plant 5 – 7

Subscribers’ apparatus 3 – 5

General plant 2 – 7

Other assets:

Motor vehicles 5

Computers 5

Furniture and fittings 4-6

The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at the end of the reporting period.

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the consolidated statement of profit or loss.

Investment propertyInvestment property, which is property held to earn rentals and/or for capital appreciation, is carried at cost less accumulated depreciation and impairment loss. Investment properties are depreciated on a straight-line basis over the lesser of 20 years and the period of the lease.

Intangible assets(i) GoodwillGoodwill arising on consolidation represents the excess of the cost of an acquisition over the fair value of the Group’s share of net




identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (CGUs) expected to benefit from the synergies of the combination. CGUs to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other non-financial assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of an associate, joint venture, or a subsidiary or where Group ceases to exercise control, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

(II) LicensesAcquired telecommunication licenses are initially recorded at cost or, if part of a business combination, at fair value. Licenses are amortised on a straight line basis over their estimated useful lives from when the related networks are available for use. The estimated useful lives range between 10 and 25 years and are determined primarily by reference to the unexpired license period, the conditions for license renewal and whether licenses are dependent on specific technologies.

(III) Internally-generated intangible assetsAn internally-generated intangible asset arising from the Group’s IT development is recognised at cost only if all of the following conditions are met:

• an asset is created that can be identified (such as software and new processes);

• it is probable that the asset created will generate future economic benefits; and

• the development cost of the asset can be measured reliably.

Internally-generated intangible assets are amortised on a straight-line basis over their useful lives of 3-10 years. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred.

(IV) Indefeasible Rights of Use (“IRU”)IRUs correspond to the right to use a portion of the capacity of a terrestrial or submarine transmission cable granted for a fixed period. IRUs are recognised at cost as an asset when the Group has the specific indefeasible right to use an identified portion of the underlying asset, generally optical fibres or dedicated wavelength bandwidth, and the duration of the right is for the major part of the underlying asset’s economic life. They are amortised on a straight line basis over the shorter of the expected period of use and the life of the contract which ranges between 10 to 20 years.

(V) Other intangible assetsCustomer relationships and trade names are recognised on acquisition at fair values. They are amortised on a straight line basis over their estimated useful lives. The useful lives of customer relationships range from 3-13 years and tradenames have a useful life of 15-25 years.

Impairment of tangible and intangible assets excluding goodwillThe Group reviews the carrying amounts of its tangible and intangible assets whenever there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of any impairment loss. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset with an

indefinite useful life (including goodwill) is tested for impairment annually.

Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

InventoryInventory is 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. 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.



Financial instrumentsFinancial assets and financial liabilities are recognised in the consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

i) Fair valueFinancial assets and financial liabilities are initially measured at fair value The fair values of financial assets and financial liabilities are determined as follows:

• the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices; and

• the fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions.

ii) Financial assetsFinancial assets are classified into the following specified categories: ‘held-to-maturity’ investments, ‘available-for-sale’ financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

All financial assets are recognised and derecognised on trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.

iii) Effective interest methodThe effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash

receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period.

Income is recognised on an effective interest rate basis for debt instruments that are held-to-maturity, are available-for-sale, or are loans and receivables.

iv) Held-to-maturity investments

Bonds and Sukuk bonds with fixed or determinable payments and fixed maturity dates that the Group has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are recorded at amortised cost using the effective interest method less any impairment, with revenue recognised on an effective yield basis. The Group considers the credit risk of counterparties in its assessment of whether such financial instruments are impaired.

v) Available-for-sale financial assets (“AFS”)Listed securities held by the Group that are quoted in an active market are classified as being AFS and are stated at fair value at the end of each reporting period. Gains and losses arising from changes in fair value are recognised directly in equity in the investment revaluation reserve with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets, which are recognised directly in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the investments revaluation reserve is included in the consolidated statement of profit or loss.

Dividends on AFS equity instruments are recognised in the consolidated statement of profit or loss when the Group’s right to receive the dividends is established.

The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate prevailing

at the end of each reporting period. The foreign exchange gains/losses that are recognised in the consolidated statement of profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange gains/losses are recognised in other comprehensive income.

The Group assesses at the end of each reporting period whether there is objective evidence that AFS assets are impaired. In the case of equity securities, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. When an AFS financial asset is impaired, the cumulative loss that had been recognised in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment even though the financial asset has not been derecognised. Impairment losses previously recognised in profit or loss for an investment in an equity instrument classified as available for sale shall not be reversed through profit or loss.

AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost less any identified impairment losses at the end of each reporting period.

vi) Loans and receivablesTrade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method less impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Appropriate allowances for estimated irrecoverable amounts are recognised in the consolidated statement of profit or loss where there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the assets’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The allowance for doubtful debts reflects estimates of losses arising from the failure




vi) Loans and receivables (continued)

or inability of the Group’s customers to make required payments. The estimates are based on the ageing of customer’s accounts and the Group’s historical write-off experience.

vii) Cash and cash equivalentsCash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

viii) Financial liabilitiesFinancial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ (“FVTPL”) or other financial liabilities.

ix) Financial guarantee contract liabilities Financial guarantee contract liabilities are measured initially at their fair values and are subsequently measured at the higher of:

• the amount of the obligation under the contract, as determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and

• the amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance with the revenue recognition policies set out above.

x) Financial liabilities at FVTPLFinancial liabilities are classified as at FVTPL where the financial liability is either held for trading or it is designated as such. A financial liability is classified as held for trading if it has been incurred principally for the purpose of disposal in the near future or it is a derivative that is not designated and effective as a hedging instrument. Financial liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in the consolidated statement of profit or loss.

xi) Other financial liabilitiesOther financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

xii) Derecognition of financial liabilitiesThe Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

xiii) Derivative financial instrumentsThe Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risk, including forward foreign exchange contracts, interest rate swaps and cross currency swaps.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability.

xiv) Embedded derivativesDerivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of host contracts and the host contracts are not measured at fair value with changes in fair value recognised in the consolidated statement of profit or loss.

xv) Hedge accountingThe Group may designate certain hedging instruments, which include derivatives, embedded derivatives and non-derivatives in respect of foreign exchange risk, as either fair value hedges, cash flow hedges, or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges where appropriate criteria are met.

At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

xvi) Put option arrangementsThe potential cash payments related to put options issued by the Group over the equity of subsidiary companies are accounted for as financial liabilities when such options may only be settled other than by exchange of a fixed amount of cash or another financial asset for a fixed number of shares in the subsidiary.

The amount that may become payable under the option on exercise is initially recognised at fair value within borrowings with a corresponding charge directly to equity. The charge to equity is recognised separately as written put options over non-controlling interests, adjacent to non-controlling interests in the net assets of consolidated subsidiaries. For options that involve a fixed amount of cash for a fixed number of shares in the subsidiary, the Group recognises the cost of writing such put options, determined as the excess of the fair value of the option over any consideration received, as a financing cost.

Such options are subsequently measured at amortised cost, using the effective interest rate method, in order to accrete the liability up to the amount payable under the option at the date at which it first becomes exercisable. The charge arising is recorded as a financing cost.



In the event that the option expires unexercised, the liability is derecognised with a corresponding adjustment to equity.

xvii) Derecognition of financial assetsThe Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset or substantially all the risk and rewards of ownership to another entity. If the Group neither transfer nor retains substantially all the risks and reward of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

xviii) Financial asset at fair value through profit or lossA financial asset at fair value through profit or loss is a financial asset that meets either of the following conditions:

a) It is classified as held for trading, i.e. it is:

(i) acquired or incurred principally for the purpose of selling or repurchasing it in the near term;

(ii) part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit taking; or

(iii) a derivative (except for a derivative that is a designated and effective hedging instrument).

b) Upon initial recognition it is designated by the entity as “at fair value through profit or loss” (FVTPL). An entity may use this designation only when doing so results in


xvi) Put option arrangements (continued)more relevant information (i.e. it eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities and their gains and losses on different basis; or a group of financial assets and/or financial liabilities is both managed and its performance is evaluated on a fair value basis; or if the instrument contains one or more embedded derivatives)

ProvisionsProvisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the reporting date, and are discounted to present value where the effect is material.

Transactions with non-controlling interestsThe Group applies a policy of treating transactions with non-controlling interest holders as transactions with parties external to the Group. Disposals to non-controlling interest holders result in gains and losses for the Group and are recorded in the consolidated statement of profit or loss. Purchases from non-controlling interest holders result in goodwill, being the difference between any considerations paid and the relevant share acquired of the carrying value of net assets of the subsidiary.

DividendsDividend distributions to the Group’s shareholders are recognised as a liability in the consolidated financial statements in the period in which the dividends are approved.

Disposal of Assets/ Assets Held for Sale

• Assets may be disposed of individually or as part of a disposal group. Once the decision is made to dispose of an asset, it is classified as “Held for Sale” and shall no longer be depreciated. Assets that are classified as “Held for

Sale” must be disclosed in the financial statements.

• An asset is considered to be Held for Sale if its carrying amount will be recovered principally through a sale transaction, not through continuing use. The criteria for classifying an asset as Held for Sale are as follows:

º It must be available for immediate sale in its present condition,º Its sale must be highly probable, and

º It must be sold, not abandoned.

3. Critical accounting judgements and key sources of estimation uncertaintyIn the application of the Group’s accounting policies, which are described in Note 2, the directors are 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.

i) Fair value of other intangible assetsOn the acquisition of mobile network operators, the identifiable intangible assets may include licenses, customer bases and brands. The fair value of these assets is determined by discounting estimated future net cash flows generated by the asset, where no active market for the assets exists. The use of different assumptions for the expectations of future cash flows


3. Critical accounting judgements and key sources of estimation uncertainty (continued)

i) Fair value of other intangible assets (continued)and the discount rate would change the valuation of the intangible assets.

The relative size of the Group’s intangible assets, excluding goodwill, makes the judgements surrounding the estimated useful lives critical to the Group’s financial position and performance.

The useful lives used to amortise intangible assets relate to the future performance of the assets acquired and management’s judgement of the period over which economic benefit will be derived from the asset.

ii) Business combinationsThe recognition of business combinations requires the purchase price of acquisitions to be allocated to the identifiable assets acquired and the liabilities assumed measured at their acquisition-date fair values. The Group makes judgments and estimates in relation to the fair value determination of the assets acquired and liabilities assumed and allocation of the purchase price. If any unallocated portion is positive it is recognised as goodwill and if negative, it is recognised in the statement of profit or loss.

iii) Impairment of goodwill and associatesDetermining whether goodwill is impaired requires an estimation of the value-in-use of the cash-generating unit to which the goodwill has been allocated. The value-in-use calculation for goodwill and associates requires the Group to calculate the net present value of the future cash flows for which certain assumptions are required, including management’s expectations of:

• long term growth rates in cash flows;

• timing and quantum of future capital expenditure; and

• the selection of discount rates to reflect the risks involved.

Further, in assessing the recoverability of its loans to associate, management has taken into consideration the estimation of the value-in-use of that related party in determining its ability to repay the loans and the resulting impairment amount, if any.

The key assumptions used and sensitivities are detailed on Note 9 of the consolidated

financial statements. A change in the key assumptions or forecasts might result in an impairment of goodwill and investment in associates.

iv) Impairment of intangiblesImpairment testing is an area involving management judgement, requiring assessment as to whether the carrying value of assets can be supported by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of highly uncertain matters including management’s expectations of:

• long term growth rates in cash flows;

• timing and quantum of future capital expenditure; and

• the selection of discount rates to reflect the risks involved.

v) Property, plant and equipmentProperty, plant and equipment represent a significant proportion of the total assets of the Group. Therefore, the estimates and assumptions made to determine their carrying value and related depreciation are critical to the Group’s financial position and performance. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. Increasing/decreasing an asset’s expected life or its residual value would result in a reduced/increased depreciation charge in the consolidated statement of profit or loss.

vi) Impairment of trade receivables The Group determines the impairment of trade receivables based on their ageing when objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of the trade receivables. Management exercises significant judgments in assessing the impact of adverse indicators and events on recoverability of trade receivables.

vii) Classification of associates, joint ventures and subsidiariesThe appropriate classification of certain investments as subsidiaries, associates and joint ventures requires significant analysis and management judgement as to whether the Group exercises control, significant influence or joint control over these investments. This may involve consideration of a number of factors, including ownership and voting rights, the extent of Board representation, contractual arrangements and indicators of defacto control.

Changes to these indicators and management’s assessment of the power to control or influence may have a material impact on the classification of such investments and the Group’s consolidated financial position, revenue and results.

viii) Federal royaltyThe computation of Federal Royalty in accordance with the Cabinet of Ministers of UAE decision No. 320/15/23 of 2012 and guidelines issued by the UAE Ministry of Finance (“the MoF”) dated 21 January 2013 and subsequent clarification letters dated 24 April 2013, 30 October 2013 and 29 January 2014 requires a number of calculations. In performing these calculations, management has made certain critical judgments, interpretations and assumptions. These mainly relate to the segregation of items between regulated and other activities and items which the Company judges as not subject to Federal royalty or which may be set off against profits which are subject to Federal royalty.

In addition, in the prior year, certain clarifications have been received from the Ministry of Finance vide its letter dated 23 December 2014 on the mechanism of computation of federal royalty for the prior years. These clarifications have been considered for the computation of federal royalty for the year ended 31 December 2014 (refer note 5(b)).

The mechanism for computation of federal royalty for the year ended 31 December 2015 is in accordance with the revised guidelines received from the MOF, which are subject to clarifications from the MOF. The Company has made certain judgements for the computation of federal royalty in



3. Critical accounting judgements and key sources of estimation uncertainty (Continued)

viii) Federal royalty (continued)the absence of clarifications from MOF. The Group is in discussion with MOF on the basis of allocation of indirect costs between regulated and non regulated services.

ix) Regulatory expensesThe Company is required to pay the UAE Telecommunication Regulatory Authority (TRA) 1% of its revenues annually as regulatory expenses towards ICT contributions. In the computation of the regulatory expenses, the Company has made certain critical judgments and assumptions relating mainly to the interpretation of revenues, which the Company contends to include UAE regulated revenues only and not revenues in other UAE entities as well as overseas subsidiaries.

x) Valuation of derivative financial instrumentsThe fair values of derivative financial instruments measured at fair value or generally obtained by reference to quoted market prices, discounted cash flow models and recognized pricing models as appropriate. Information about the valuation techniques and inputs used in determining the fair value of derivative are disclosed in note 22.

xi) Impairment of Available- for-sale financial assets (“AFS”)The Group determines the impairment of AFS financial assets based on the objective evidence of significant and prolonged decline in the share market price below its cost.

xi) Recognition of deferred tax assetThe recognition of deferred tax asset is based upon whether it is more likely than not that there will be sufficient and suitable taxable profits in the relevant legal entity or tax group against which to utilise the assets in the future. Judgement is required when determining probable future taxable profits, which are estimated using the latest available profit forecasts. Prior to recording

deferred tax assets for tax losses, relevant tax law is considered to determine the availability of the losses to offset against the future taxable profit.

4.Segmental information Information regarding the Group’s operating segments is set out below 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.

a) Products and services from which reportable segments derive their revenues

The Group is engaged in a single line of business, being the supply of telecommunications services and related products. The majority of the Group’s revenues, profits and assets relate to its operations in the UAE. Outside of the UAE, the Group operates through its subsidiaries and associates in eighteen countries which are divided in to the following operating segments:

• Pakistan

• Egypt

• Morocco

• International - others

Revenue is attributed to an operating segment based on the location of the Company reporting the revenue. Inter-segment sales are charged at arms’ length prices.

b) Segment revenues and results

Segment results represent operating profit earned by each segment without allocation of finance income, finance costs and federal royalty. This is the measure reported to the Group’s Board of Directors (“Board of Directors”) for the purposes of resource allocation and assessment of segment performance.

The Group’s share of results from

associates and joint ventures has been allocated to the segments based on the geographical location of the operations of the associate and joint venture investments. The allocation is in line with how results from investments in associates and joint ventures are reported to the Board of Directors.

c) Segment assetsFor the purposes of monitoring segment performance and allocating resources between segments, the Board of Directors monitors the tangible, intangible and financial assets attributable to each segment. All assets are allocated to reportable segments. Goodwill is allocated based on separately identifiable CGUs as further disclosed in Note 9. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments.

The segment information has been provided on the following page.

UAE Morocco Egypt Pakistan Others Eliminations ConsolidatedAED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000

31 December 2015

Revenue

External sales 29,473,205 7,926,522 4,509,866 4,178,315 5,649,110 - 51,737,018

Inter-segment sales 369,406 78,901 33,636 58,053 274,691 (814,687) -

Total revenue 29,842,611 8,005,423 4,543,502 4,236,368 5,923,801 (814,687) 51,737,018

Segment result 14,068,713 2,784,764 774,020 41,383 (291,966) - 17,376,914

Federal royalty (6,054,976)

Finance and other income

Finance and other costs

916,078

(1,212,177)Finance and other costs (1,212,177)

Profit before tax 11,025,839

Taxation (1,277,590)Profit for the year from continuing operations 9,748,249

Total assets 57,168,689 32,604,589 12,982,700 19,909,477 20,869,205 (15,270,113) 128,264,547

Non-current assets * 25,299,915 29,643,138 11,062,738 17,151,841 14,860,508 (13,030,463) 84,987,677

Depreciation and amortisation 1,930,585 2,045,383 870,844 1,188,459 1,545,283 - 7,580,554

Impairment and other losses 947,274 - - 5,627 42,429 - 995,330

31 December 2014 (Restated)RevenueExternal sales 27,802,546 6,061,090 4,814,366 4,436,395 5,394,001 - 48,508,398 Inter-segment sales 449,617 38,089 29,983 282,143 180,219 (980,051) - Total revenue 28,252,164 6,099,179 4,844,349 4,718,537 5,574,220 (980,051) 48,508,398 Segment result 13,120,843 2,114,237 834,616 126,921 (965,193) 15,231,424 Federal royalty (5,305,530)Finance and other income 2,652,927 Finance and other costs (1,736,288)Profit before tax 10,842,533 Taxation (1,165,325)Profit for the year from continuing operations 9,677,208 Total assets 53,384,094 32,818,038 13,727,236 20,868,347 20,967,801 (13,656,100) 128,109,417 Non-current assets * 23,054,772 30,242,110 11,988,655 18,103,605 15,688,048 (9,694,741) 89,382,449 Depreciation and amortisation 1,767,218 2,095,574 926,980 1,079,446 899,543 - 6,768,761Impairment and other losses - - - - 931,963 - 931,963

UAE Segment revenue breakup: 2015 2014AED million AED million

UAE Revenue - TRA regulated 24,724 23,741UAE Revenue - Non-regulated 5,119 4,511

29,843 28,252

Impairment details 2015 2014AED’000 AED’000

of which relating to goodwill - 540,328of which relating to property, plant and equipment (Note 10)

8,014 6,818

of which relating to other financial assets 40,042 384,817of which relating to available-for-sale financial assets (quoted equity instruments) (Note 28) 295,964

-

of which relating to loans to related party 651,310 - 995,330 931,963

International

-

In May 2014, the Group acquired 53% stake in Maroc Telecom. Maroc Telecom is accordingly consolidated in the Group consolidated financial statements from the date of acquisition.

Accordingly, the comparatives for the year ended 31 December 2014 include the results of operations relating to Maroc Telecom with effect from the date of acquisition.

* Non-current assets exclude derivative financial assets and deferred tax assets.

4. Segmental information (continued)



b) Federal Royalty In accordance with the Cabinet deci-sion No. 558/1 for the year 1991, the Company (formerly known as “Corpo-ration”) was required to pay a federal royalty, equivalent to 40% of its annual net profit before such federal royalty, to the UAE Government for use of federal facilities. With effect from 1 June 1998, Cabinet decision No. 325/28M for 1998 increased the federal royalty payable to 50%.

On 9 December 2012, the Cabinet of Ministers of UAE issued decision no. 320/15/23 of 2012 in respect of a new royalty mechanism applicable to Com-pany. Under this mechanism a distinc-tion was made between revenue earned from services regulated by Telecommu-nications Regulatory Authority (“TRA”) and non-regulated services as well as between foreign and local profits. The Company was required to pay 15 % roy-alty fee on the UAE regulated revenues and 35 % of net profit after deduction of the 15 % royalty fee on the UAE regulated revenues. In respect of foreign profit, the 35 % royalty was reduced by

the amount that the foreign profit has already been subject to foreign taxes.

During 2014, certain clarifications had been received from the Ministry of Fi-nance (“MOF”) on the mechanism of computation of federal royalty for the prior years. These clarifications have been considered for the computation of federal royalty for the year ended 31 De-cember 2014. On 25 February 2015, MOF issued revised guidelines (which was received by the Company on 1 March 2015) for the computation of federal royalty for the financial years ending 31 December 2014, 2015 and 2016 (“Guide-lines”).

The Company responded to the MOF with a letter dated 23 March 2015 and was engaged in discussions with the MOF seeking clarifications regarding the Guidelines.

The Company assumed the guidelines would not apply for the Financial Year ending 31 December 2014, which was already closed at the time the Guidelines were issued.

The mechanism for computation of fed-eral royalty for the year ended 31 De-cember 2015 is in accordance with the Guidelines, which are subject to clarifi-cations from the MOF. The Company has made certain judgements for the compu-tation of federal royalty in the absence of clarifications from MOF. The Group is in discussion with MOF on the basis of allocation of indirect costs between reg-ulated and non regulated services.

The federal royalty has been treated as an operating expense in the consolidated statement of profit or loss on the basis that the expenses the Company would otherwise have had to incur for the use of the federal facilities would have been classified as operating expenses.

6. Finance and other income

20152014

(Restated)AED’000 AED’000

Interest on bank deposits and held-to-maturity investment 436,440 388,897

Other income 479,638 2,264,030

916,078 2,652,927

a) Operating expenses (before federal royalty) 20152014


Direct cost of sales 11,112,853 10,294,285

Staff costs 5,433,064 6,192,735

Depreciation (Notes 10,11) 5,772,304 5,092,328

Network and other related costs 2,974,392 2,793,203

Amortisation (Note 9) 1,808,250 1,676,433

Marketing expenses 973,298 1,277,551

Regulatory expenses 1,013,150 1,039,950

Operating lease rentals 304,917 225,035

Foreign exchange (losses)/gains 257,156 (359,870)

Other operating expenses 3,399,461 3,474,188

Operating expenses (before federal royalty) 33,048,845 31,705,838

Operating expenses include an amount of AED 5.49 million (2014: AED 29.51 million), relating to social contributions made during the year.

5. Operating expenses and federal royalty


All interest charges are generated on the Group’s financial liabilities measured at amortised cost. Borrowing costs included in the cost of qualifying assets during the year arose on specific and general borrowing pools. Borrowing costs attributable to general borrowing pools are calculated by applying a capitalisation rate of 8.50% (2014: 9.28%) to expenditure on such assets. Borrowing costs have been capitalised in relation to loans by certain of the Group’s subsidiaries.

a) Current tax

Corporate income tax is not levied in the UAE for telecommunication companies and accordingly the effective tax rate for the Corporation is 0% (2014: 0%). The table below reconciles the difference between the expected tax expense, (based on the UAE ef-fective tax rate) and the Group’s tax charge for the year.

b) Current income tax assets and liabilities

The current income tax assets represent refunds receivable from tax authorities and current income tax liabilities represent income tax payable.

c) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when these relate to the same income tax authority. The amounts recognised in the consolidated statement of financial position after such offset are as follows:

20152014


Interest on bank overdrafts, loans and other financial liabilities 435,651 431,990

Interest on other borrowings 527,332 662,069

Other costs 215,896 620,964

Unwinding of discount 33,298 21,265

1,212,177 1,736,288

Total borrowing costs 1,240,819 1,762,788

Less: amounts included in the cost of qualifying assets (Note 10) (28,642) (26,500)

1,212,177 1,736,288

8. Taxation

20152014


Current tax expense 1,768,096 1,527,471

Deferred tax credit (490,506) (362,146)

1,277,590 1,165,325

20152014


Profit before tax 11,025,839 10,842,533

Tax at the UAE corporate tax rate of 0% (2014: 0%) - -

Effect of different tax rates of subsidiaries operating in other jurisdictions 1,768,096 1,527,471

Current tax expense for the year 1,768,096 1,527,471

20152014


Deferred tax assets 308,734 317,383Deferred tax liabilities (4,015,579) (4,702,839)

(3,706,845) (4,385,456)

7. Finance and other costs



The following represent the major deferred tax liabilities and deferred tax assets recognised by the Group and movements thereon without taking into consideration the offsetting of balances within the same tax jurisdiction.

Deferred tax liabilities

Accelerated tax

depreciationDeferred tax on

overseas earnings Others TotalAED’000 AED’000 AED’000 AED’000

At 1 January 2014 1,809,381 181,243 49,756 2,040,380

70,150 (22,882) (205,012) (157,744)

- - 3,494 3,494 - - 3,637,635 3,637,635

Exchange differences 85,296 - (381,403) (296,107)

1,964,827 158,361 3,104,470 5,227,658

- (37,453) - (37,453)

1,964,827 120,908 3,104,470 5,190,205

(87,838) (14,838) (267,408) (370,084)

Exchange differences (102,329) - (288,527) (390,856)

1,774,660 106,070 2,548,535 4,429,265

Deferred tax assets

Retirement benefit

obligations Tax losses Others TotalAED’000 AED’000 AED’000 AED’000

At 1 January 2014 173,467 234,457 125,659 533,583

1,262 66,869 79,572 147,703

Charge to other comprehensive income 74,497 - 1,572 76,069

Acquisition of Maroc Telecom (Note 30) - - 46,955 46,955

Exchange differences 8,597 (7,860) (298) 439

257,823 293,466 253,460 804,749

(13,970) 52,502

81,890

120,422

(133,657) - - (133,657)

Exchange differences (11,720) (38,017) (19,357) (69,094)98,476 307,951 315,993 722,420

Total unused tax losses 1,369 1,554

of which deferred tax assets recognised for 1,147 1,272

221 252of the unrecognized tax losses, losses that will expire in the next three years 1 30

Restatement

(Credit)/charge to the consolidated statement of profit or loss

At 31 December 2014 (previously reported)

(Credit)/charge to the consolidated statement of profit or loss

Charge to the consolidated statement of profit or loss

At 31 December 2014 (Restated)

At 31 December 2014

At 31 December 2015

Charge to the consolidated statement of profit or loss

of which no deferred tax asset recognised,

At 31 December 2015

Credit to other comprehensive income

(Credit)/charge to other comprehensive incomeAcquisition of Maroc Telecom (Note 30)

due to unpredictability of future taxable profit streams

Unused tax losses 2015 2014AED million AED million

8. Taxation (Continued)


Goodwill Licenses Trade names Others TotalAED'000 AED’000 AED’000 AED’000 AED’000

CostAt 1 January 2014 7,174,907 12,891,983 237,006 2,717,480 15,846,469

Additions - 1,429,854 - 608,910 2,038,764

Acquisition of Maroc Telecom (Note 30) 11,761,694 6,292,302 2,218,006 2,218,924 10,729,232

Reclassified as held for sale (Note 35) (44,896) (6,087) - (108,452) (114,539)

Disposals - - - (25,660) (25,660)

Exchange differences (1,047,116) (1,131,212) (229,033) (694,066) (2,054,311)

17,844,589 19,476,840 2,225,979 4,717,136 26,419,955

Amortisation and impairmentAt 1 January 2014 1,622,641 4,845,027 15,800 1,538,360 6,399,187

Charge for the year - 767,137 57,882 869,697 1,694,716

Impairment losses 540,328 - - - -

Elimination on items reclassified as held for sale (Note 35) - (1,205) - (39,259) (40,464)

Disposals - - - (25,635) (25,635)

Exchange differences (8,762) (200,374) (3,299) (498,952) (702,625)

At 31 December 2014 2,154,207 5,410,585 70,383 1,844,211 7,325,179

Carrying amountAt 31 December 2014

At 31 December 2014

15,690,382 14,066,255 2,155,596 2,872,925 19,094,776

CostAt 1 January 2015 17,844,589 19,476,840 2,225,979 4,717,136 26,419,955

Additions 47,496 1,004,996 - 439,172 1,444,168

Transfer from Assets under construction - - - 125,681 125,681

Reclassified as held for sale (Note 35) - (88,390) - (47,774) (136,164)

Disposals (4,412) (167,499) - (788,534) (956,033)

Exchange differences (1,160,311) (1,524,948) (192,373) (422,988) (2,140,309)

At 31 December 2015 16,727,362 18,700,999 2,033,606 4,022,693 24,757,298

At 1 January 2015 2,154,207 5,410,585 70,383 1,844,211 7,325,179

Charge for the year - 820,342 94,246 902,529 1,817,117

Elimination on items reclassified as held for sale (Note 35) - (55,307) - (7,240) (62,547)

Disposals - (91,712) - (661,900) (753,612)

Exchange differences (4,357) (374,079) (10,075) (377,757) (761,911)

At 31 December 2015 2,149,850 5,709,829 154,554 1,699,843 7,564,226

At 31 December 2015 14,577,512 12,991,170 1,879,052 2,322,850 17,193,072

Other Intangible assets

Carrying amount

Amortisation and impairment

AED’000 AED’000

IRU 526,212 564,917

Computer software 713,175 890,352

Customer relationships 568,859 1,099,868

Others 514,604 317,788

2,322,850 2,872,925

Others - net book values 2015 2014

9. Goodwill, other intangible assets, impairment

and other losses



20152014


Pakistan Telecommunication Company Limited (PTCL) 5,627 -

of which relating to property, plant and equipment (Note 10) 5,627 -

Atlantique Telecom S.A (AT) 40,318 923,339

of which relating to goodwill - 540,328

of which relating to property, plant and equipment (Note 10) 276 -

of which relating to other financial assets 40,042 383,011

8,624

6,818

1,806

-

-

Others 949,385of which relating to loans to related party 651,310

295,964of which relating to property, plant and equipment (Note 10) 2,111of which relating to other financial assets -

of which relating to available-for-sale financial assets (quoted equity instruments) (Note 28)

Total impairment and other losses for the year 995,330 931,963

Other intangible assets balance for 2014 included an amount of AED 10,729 mil-lion representing cost of assets acquired through business combination in 2014 (refer to note30) which were classified as licences, computer software, custom-er relationships, trade names and other intangibles amounting to AED 6,292 million, AED 736 million, AED 1,123 mil-

Impairment losses were primarily driven by increased discount rates as a result of increase in inflation in the operat-ing countries and challenging economic and political conditions, as well as nega-tive local currency fluctuation. Impair-ment losses of the Group’s investment in available-for-sale financial assets was triggered by a significant and prolonged

lion, AED 2,218 and AED 360 million re-spectively.

There were no intangible assets acquired through business combinations or inter-nally generated in 2015.

a) Impairment and other losses

The net impairment losses recognised in

decline in the fair value of the quoted investments.

b) Cash generating units

Goodwill acquired in a business combi-nation is allocated, at acquisition, to the CGUs that are expected to benefit from that business combination. The Group tests goodwill annually for impairment

the consolidated statement of profit or loss in respect of the carrying amounts of investments, goodwill, licenses and property, plant and equipment are as follows:

or more frequently if there are indica-tions that goodwill might be impaired. The carrying amount of goodwill (all re-lating to operations within the Group’s International reportable segment) is al-located to the following CGUs:

9. Goodwill, other intangible assets, impairment and

other losses (continued)


Goodwill has been allocated to the respective segment based on the separately identifiable CGUs.

Cash generating units (CGU) to which goodwill is allocated :

2015 2014

AED’000 AED’000Maroc Telecom 8,425,822 9,246,613

Maroc Telecom International Subsidiaries 1,176,812 1,291,211

Pakistan Telecommunication Company Limited (PTCL) 4,108,560 4,252,905

Atlantique Telecom, S.A. (AT) 636,173 667,224

Etisalat Misr (Etisalat) S.A.E. 24,023 26,306

Etisalat Lanka (Pvt) Limited (Etisalat Lanka) 206,122 206,123

14,577,512 15,690,382

c) Key assumptions for the value in use calculations:

The key assumptions for the value in use calculations are those regarding the long term forecast cash flows, working capi-tal estimates, discount rates and capital expenditure.

Long term cash flows and working capi-tal estimates

The Group prepares cash flow forecasts and working capital estimates derived from the most recent annual business plan approved by the Board of Directors for the next five years. The business plans take into account local market consid-erations such as the revenues and costs associated with future customer growth,

the impact of local market competition and consideration of the local macro-economic and political trading envi-ronment. This rate does not exceed the average long-term growth rate for the relevan markets and it ranges between 1.8% to 6.5% (2014: 3.10% to 6.7%).

Discount rates

The discount rates applied to the cash flows of each of the Group’s operations are based on an internal study conduct-ed by the management. The study uti-lized market data and information from comparable listed mobile telecommu-nications companies and where avail-able and appropriate, across a specific territory. The pre-tax discount rates use

a forward looking equity market risk premium and ranges between 7.01% to 17.7% (2014: 11.0% to 18.1%).

Capital expenditure

The cash flow forecasts for capital ex-penditure are based on past experience and include the ongoing capital expend-iture required to continue rolling out networks in emerging markets, provid-ing enhanced voice and data products and services, and meeting the popula-tion coverage requirements of certain li-censes of the Group. Capital expenditure includes cash outflows for the purchase of property, plant and equipment and other intangible assets.

9. Goodwill, other intangible assets, impairment and

other losses (continued)



Land and buildingsPlant and

equipmentMotor vehicles,

computer, furnitureAssets under

construction TotalAED’000 AED’000 AED’000 AED’000 AED’000

CostAt 1 January 2014 8,377,255 48,251,308 4,368,610 4,935,317 65,932,490

Additions 195,113 1,267,828 118,640 5,290,561 6,872,142

Acquisition of Maroc Telecom (Note 30) 2,092,884 12,325,579 393,038 75,457 14,886,958

Transfers 154,711 4,591,962 790,718 (5,537,391) -

Disposals (95,811) (739,352) (186,530) (28,258) (1,049,951)

Reclassified as held for sale (Note 35) (14,032) (499,415) (55,271) (78,138) (646,856)

Exchange differences (241,164) (3,046,779) (276,947) (79,127) (3,644,017)

At 31 December 2014 10,468,956 62,151,131 5,152,258 4,578,421 82,350,766

Depreciation and impairment

At 1 January 2014 2,687,337 28,830,292 3,035,933 59,767 34,613,329

Charge for the year 186,961 4,195,564 778,490 - 5,161,015

Impairment losses - - 6,818 - 6,818

Disposals (63,626) (607,979) (139,206) - (810,811)

Elimination on items reclassified as held for sale (Note 35) (11,850) (328,525) (51,236) -

(391,611)

Exchange differences (227,978) (1,748,506) (224,102) - (2,200,586)

At 31 December 2014 2,570,844 30,340,846 3,406,697 59,767 36,378,154

Carrying amountAt 31 December 2014 7,898,112 31,810,285 1,745,561 4,518,654 45,972,612

Cost

At 1 January 2015 10,468,956 62,151,131 5,152,258 4,578,421 82,350,766

Additions 250,299 1,789,362 93,036 6,773,730 8,906,427

Transfer to Intangibles - - - (125,681) (125,681)

Transfers 396,964 5,135,194 703,258 (6,235,416) -

Disposals (170) (1,086,142) (76,992) (28,565) (1,191,869)

Reclassified as held for sale (Note 35) (25,549) (248,025) (23,365) 381 (296,558)

Exchange differences (595,148) (4,261,389) (279,069) (128,890) (5,264,496)

At 31 December 2015 10,495,352 63,480,131 5,569,126 4,833,980 84,378,589

Depreciation and impairment

At 1 January 2015 2,570,844 30,340,846 3,406,697 59,767 36,378,154

Charge for the year 221,132 4,926,138 648,808 - 5,796,078

Impairment losses - 8,014 - - 8,014

Disposals (61) (860,879) (106,088) - (967,028)

Elimination on items reclassified as held for sale (Note 35) (16,121) (141,355) (19,861) -

(177,337)

Exchange differences (158,129) (2,562,792) (208,352) - (2,929,273)

At 31 December 2015 2,617,665 31,709,972 3,721,204 59,767 38,108,608

Carrying amountAt 31 December 2015 7,877,687 31,770,159 1,847,922 4,774,213 46,269,981

10. Property, plant and equipment


2015 2014AED’000 AED’000

Cost

At 1 January 59,425 56,771

Additions 600 2,654

At 31 December 60,025 59,425

DepreciationAt 1 January 18,047 15,560

Additions 2,621 2,487

At 31 December 20,668 18,047

Carrying amount at 31 December 39,357 41,378

Fair value at 31 December 72,211 70,450

Investment property rental income and direct operating expenses 2015 2014AED million AED million

Property rental income 7.9 10.9

Direct operating expenses 1.2 1.3

The fair value of the Group’s investment property has been determined based on a Sales Comparable approach and with reference to observable latest market prices for similar commercial properties in the neighbourhood. Accordingly, the fair value is classified as level 3 of the fair value hierarchy.

The carrying amount of the Group’s land and buildings includes a nominal amount of AED 1 (2014: AED 1) in rela-tion to land granted to the Group by the Federal Government of the UAE. There are no contingencies attached to this grant and as such no additional amounts have been included in the consolidated statement of profit or loss or the con-solidated statement of financial position in relation to this.

An amount of AED 28.6 million (2014: AED 26.5 million) is included in prop-erty, plant and equipment on account of capitalisation of borrowing costs for

the year.

Borrowings are secured against property, plant and equipment with a net book value of AED 3,190 million (2014: AED 3,195 million).

Assets under construction include build-ings, multiplex equipment, line plant, exchange and network equipment.

11. Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is stated at depreciated

cost and included separately under non-current assets in the consolidated state-ment of financial position.

10. Property, plant and equipment (continued)



a) The Group’s principal subsidiaries are as follows:

Name Country of incorporation

2015 2014

Emirates Telecommunications and Marine Services FZE UAE Telecommunications services 100% 100%

Emirates Cable TV and Multimedia LLC UAE 100% 100%

Etisalat International Pakistan LLC UAE 90% 90%

E-Marine PJSC UAE 100% 100%

Etisalat Services Holding LLC UAE 100% 100%

Etisalat Software Solutions (Private) Limited India 100% 100%

Zanzibar Telecom Limited Tanzania Telecommunications services - 85%

Canar Telecommunications Co. Limited Republic of Sudan Telecommunications services 90% 90%

Etisalat International Nigeria Limited UAE 100% 100%

Etisalat Afghanistan Afghanistan Telecommunications services 100% 100%

Etisalat Misr S.A.E. Egypt Telecommunications services 66% 66%

Atlantique Telecom S.A. Togo Telecommunications services 100% 100%

Etisalat Lanka (Pvt.) Limited Sri Lanka Telecommunications services 100% 100%

Pakistan Telecommunication Company Limited Pakistan Telecommunications services 23% 23%

Etisalat Investment North Africa LLC UAE 91.3% 91.3%

Société de Participation dans les Télécommunications (SPT)

Kingdom of Morocco 100% 100%

Etisalat Al Maghrib S.A (Maroc Telecom) Kingdom of Morocco Telecommunications services 48% 48%

Etisalat Mauritius Private Limited Mauritius 100% 100%Holds investment in Etisalat DB

Telecom Private Limited

Holds investment Société de Participation dans les

Télécommunications (SPT)

Cable television services

Holds investment in Pakistan Telecommunication Co. Ltd

Technology solutions

Holds investment in Emerging Market Telecommunications Services B.V.

(Netherlands)

Holds investment in Maroc Telecom

Submarine cable activities

Infrastructure services

Percentage shareholdingPrincipal activity

On 14 May 2014, the Group completed the acquisition of Maroc Telecom at a net adjusted price of EUR 4.1 billion (AED 20.9 billion), which was primarily financed through external borrowings. This amount includes the cash value of the 2012 dividend, amounting to EUR 0.3 billion (AED 1.5 billion).

On 3 June 2014, the directors approved a plan to dispose of the Group’s interest in Zanzibar Telecom Limited (Zantel), one of the Group’s overseas subsidiary. The dis-posal is in line with the Group’s strategy to optimise its returns on investments in the international segment. On 4 June 2015, the Group signed a Share Purchase Agreement with Millicom International Cellular SA (“Millicom’’) for the sale of the Group’s 85% interest in Zantel. Un-der the terms of the agreement, Group

will receive cash consideration of USD 1 and Millicom will assumethe net liabili-ties in the books of Zantel. In addition, Zantel will have up to USD 32 million in net current liabilities at closing. On 22 October 2015, the Group completed the sale of its 85% shareholdings in Zanzi-bar Telecom Limited (Zantel) to Millicom after securing all regulatory approv-als from the Tanzanian Communication Regulatory Authority and the Fair Com-petition Commission (Note 35).

On 4 May 2014, the Group announced the signing of an agreement with Ma-roc Telecom for the sale of the Group’s shareholdingsn in its operations in Be-nin, CAR, Gabon, Cote d’Ivoire, Niger and Togo to Maroc Telecom, for a total consideration of EUR 474 million. The transaction was closed on 26 January

2015 and has been accounted for by the Group as a transaction under common control.

On 1 April 2015, PTCL acquired 100% ownership of DVCOM Data. The entity has Wireless Local Loop (WLL) License of 1900 MHz spectrum in nine telecom re-gions of Pakistan.

On 12 October 2015, PTCL incorporated a wholly owned new entity, Smart Sky as a private Limited comany to provide Direct-to-Home (DTH) television service through out the country under the li-cense from the authorities. However the said license is yet to be auctioned by the authorities and the entity has not yet started commercial operations.

12. Subsidiaries



Maroc Telecom consolidated

PTCL consolidated

Etisalat Misr consolidated

AED'000

Information relating to non-controlling interests:

Non-controlling interest (shareholding %) 51.6% 76.6% 34%

Profit 1,112,165 28,367 149,254

Total comprehensive loss (763,259) (370,002) (239,802)

Dividends (1,530,466) (338,811) (51,585)

Non-controlling interests as at 31 December 7,397,153 5,891,136 2,577,070

Summarized information relating to subsidiares:

Current assets 6,613,092 2,757,637 1,919,962

Non-current assets 33,217,963 17,151,841 11,062,738

Current liabilities 12,588,260 5,420,384 3,924,046

Non-current liabilities 4,299,232 5,390,308 1,441,883

AED'000Information relating to non-controlling interests:

Non-controlling interest (shareholding %) 51.6% 76.6% 34%

Profit 774,968 87,358 162,138

Dividends (1,213,005) (281,547) -

Non-controlling interests as at 31 December 8,710,201 6,571,582 2,716,746

Summarized information relating to subsidiaries:

Current assets 6,210,368 2,761,653 1,561,629

Non-current assets 33,159,577 18,106,693 12,165,580

Current liabilities 10,114,183 5,752,276 3,604,457

Non-current liabilities 3,364,827 5,052,799 1,573,563

2014

2015

a) Disclosures relating to subsidiaries

Information relating to subsidiaries that have non-controlling interests that are material to the Group are provided below:

12. Subsidiaries (continued)



b) Movement in non-controlling interests

The movement in non-controlling interests is provided below:

20152014


As at 1 January 17,994,120 9,060,552

Total comprehensive income:Profit for the year 1,248,162 961,460

Remeasurement of defined benefit obligations - net of tax (42,461) (108,642)

Exchange differences on translation of foreign operations (1,300,678) (618,808)

(Loss)/gain on revaluation of available-for-sale financial assets (9,288) 6,936

Other movement in equity 16,362 356

Acquisition of a subsidiary - 8,159,944

Disposal of a subsidiary 115,450 -

Acquisition of non-controlling interests (5,664) 132,570

Repayment contribution of equity contribution to non-controlling interests for acquisition of a subsidiary (209,094) 1,791,831

Dividends (1,920,861) (1,392,078)

As at 31 December 15,886,048 17,994,121

13. Share of results of associates and joint ventures

20152014


Associates excluding EMTS (Note 14 b) (327,904) (651,109)

Joint ventures (Note 14 f) 11,975 11,936

Total (315,929) (639,173)

During the previous year, the Group has reassessed its accounting treatment for share of results of one of its associates. Consequently, the Group has discontin-ued the recognition of the share of re-sults of that associate with effect from 1 January 2013. Accordingly, no share of losses have been offset against loans due from associates as the investment in associate has already been fully written down by prior year losses. The amount receivable towards interest on loan to the associate of AED 817 million (2014: AED 718 million) has been impaired dur-

ing the year. The net unrecognised share of losses in the associate for the year ended 31 December 2015 amounts to AED 779 million (2014: AED 1,689 mil-lion). The cumulative net unrecognised share of losses as at 31 December 2015 amounts to AED 3,952 million (2014: AED 3,173 million).

During the year, Etihad Etisalat Company (Mobily) has restated its financial results for 2014 and prior years. This restate-ment has resulted due to the change in accounting policies for the recognition

of revenue from certain contracts and the change in the practice of capitali-sation of property, plant and equipment and corresponding depreciation. Accord-ingly, the annual consolidated financial statements for the year ended 31 De-cember 2014 (including comparatives) were reissued to reflect the impact of such restatements (refer to Note 38).

12. Subsidiaries (continued)

a) Associates

NameCountry of

incorporationPercentage

shareholding

Etihad Etisalat Company ("Mobily") Saudi Arabia Telecommunications services 27%

UAE 28%

Nigeria Telecommunications services 40%

b) Movement in investments in associates

20152014

(Restated) 20152014

(Restated)AED’000 AED’000 AED’000 AED’000

Carrying amount at 1 January 4,720,161 6,224,993 4,898,798 6,430,745

Share of results (Note 13) (293,914) (623,955) (327,904) (651,109)

Exchange differences - (68,900) - (68,901)

Other movements - (35,446) (226) (35,405)Dividends - (776,531) - (776,531)Carrying amount at 31 December 4,426,247 4,720,161 4,570,668 4,898,799

c) Reconciliation of the above summarised financial information to the net assets of the associates

20152014

(Restated) 20152014

(Restated)

AED’000 AED’000 AED’000 AED’000

Net Assets 15,229,323 16,299,163 1,968,556 4,828,843

Our share in net assets of associates * 4,181,820 4,475,587 4,526,395 4,852,860

Others ** 244,427 244,574 244,273 245,939

Impairment - - (200,000) (200,000)

4,426,247 4,720,161 4,570,668 4,898,799

d) Aggregated amounts relating to associates

20152014

(Restated) 20152014


Current assets 8,219,218 12,236,079 10,322,709 13,620,360

Non-current assets 33,254,541 33,414,430 38,946,136 39,542,307

Current liabilities (26,009,691) (29,155,683) (29,410,616) (32,577,701)

Non-current liabilities (234,745) (195,663) (17,889,673) (15,756,123)

Net assets 15,229,323 16,299,163 1,968,556 4,828,843

Revenue 14,112,564 13,704,679 18,811,004 18,566,650

Loss (1,069,514) (1,543,114) (3,886,080) (6,514,093)

Total comprehensive loss (1,069,514) (1,543,114) (3,886,080) (6,514,093)

Dividends received - 776,531 - 776,531

Thuraya Telecommunications Company PJSC ("Thuraya")

All Associates

Principal activity

Emerging Markets Telecommunications Services Limited ("EMTS Nigeria")

Mobily

Satellite communication services

Mobily All Associates

Mobily All Associates

* Our share in the net assets of associates does not include the share of results of EMTS effective from 1 January 2013 (refer note 13)** "Others" include an amount of AED 150 million (2014: AED 150 million) relating to premium paid on rights issue in the prior years.

Contingent liabilities relating to the associates are disclosed in note 32.

Borrowings amounting to AED 8,247 million classified as non current liabilities in the financial statements of Mobily have been reclassified to current liabilities in the above table, to comply with the requirements of IFRS.

14. Investment in associates and joint ventures



Emirates Telecommunications Group Company PJSCNotes to the consolidated financial statements for the year ended 31 December 2015


e) Market value of an associate

The shares of one of the Group’s associates are quoted on public stock markets and it is classified as “Level-1” fair value. The market value of the Group’s shareholding based on the quoted prices is as follows:

The Group had recognized its share of results from Mobily in its published condensed consolidated interim financial information during the year with a lag of one quarter. However, the share of results of Mobily recognised for the year ended 31 December 2015 represents the Group’s share of results for the full year results of Mobily for 2015.

2015 2014

AED’000 AED’000

Etihad Etisalat Company ("Mobily") 4,920,891 9,082,335

e) Joint ventures

NameCountry of


shareholding

Ubiquitous Telecommunications Technology LLC UAE 50%

Smart Technology Services DWC – LLC UAE 50%

f) Movement in investment in joint ventures2015 2014

AED’000 AED’000Carrying amount at 1 January 70,245 60,309

Share of results 11,975 11,936

Dividends (4,000) (2,000)


g) Aggregated amounts relating to joint ventures2015 2014

AED’000 AED’000Current assets 245,962 165,252

Non-current assets 13,610 83,112

Current liabilities (103,136) (107,877)

Net assets 156,436 140,487

Revenue 185,294 157,277

Profit or loss 23,949 27,157

15. Other investments

Fair value through Profit

and loss Available for sale Held to maturity TotalAED’000 AED’000 AED’000 AED’000

At 1 January 2014 - 1,119,847 195,585 1,315,432

Additions 937 74,124 - 75,061

Acquisition of Maroc Telecom (Note 30) 49,271 80,071 - 129,342

Disposal - (454,292) (3,594) (457,886)

Investment revaluation - (56,588) - (56,588)

Impairment - (3,061) - (3,061)

Reclassified as held for sale (Note 35) - (3,570) - (3,570)

Exchange differences (5,583) (9,150) - (14,733)

At 31 December 2014 44,625 747,381 191,991 983,997

Additions - 30,671 13,428 44,099

Disposal (7,616) (8,793) (2,114) (18,523)


Impairment - (516) - (516)


At 31 December 2015 33,025 576,008 203,305 812,338

Installation and management of network systems

Principal activity

The Group has not identified any contingent liabilities or capital commitments in relation to its interest in joint ventures.

ICT Services

14. Investment in associates and joint ventures (continued)

e) Joint ventures

NameCountry of


shareholding

Ubiquitous Telecommunications Technology LLC UAE 50%

Smart Technology Services DWC – LLC UAE 50%

f) Movement in investment in joint ventures2015 2014

AED’000 AED’000Carrying amount at 1 January 70,245 60,309

Share of results 11,975 11,936

Dividends (4,000) (2,000)


g) Aggregated amounts relating to joint ventures2015 2014

AED’000 AED’000Current assets 245,962 165,252

Non-current assets 13,610 83,112

Current liabilities (103,136) (107,877)

Net assets 156,436 140,487

Revenue 185,294 157,277

Profit or loss 23,949 27,157

Fair value through Profit

and loss Available for sale Held to maturity TotalAED’000 AED’000 AED’000 AED’000

At 1 January 2014 - 1,119,847 195,585 1,315,432

Additions 937 74,124 - 75,061

Acquisition of Maroc Telecom (Note 30) 49,271 80,071 - 129,342

Disposal - (454,292) (3,594) (457,886)


Impairment - (3,061) - (3,061)

Reclassified as held for sale (Note 35) - (3,570) - (3,570)


At 31 December 2014 44,625 747,381 191,991 983,997

Additions - 30,671 13,428 44,099

Disposal (7,616) (8,793) (2,114) (18,523)


Impairment - (516) - (516)


At 31 December 2015 33,025 576,008 203,305 812,338

Installation and management of network systems

Principal activity

The Group has not identified any contingent liabilities or capital commitments in relation to its interest in joint ventures.

ICT Services

The held to maturity investment rep-resents Sukuk which is the bond struc-tured to conform with the principles of Islamic Sharia law. At 31 December 2015, the market value of the investment in Sukuk was AED 203 million (2014: AED 194 million)

16. 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. Trans-actions between the Group and other related parties are disclosed below.

a) Federal Government and state con-trolled entities

As stated in Note 1, in accordance with Federal Law No. 267/10 for 2009, the Federal Government of the UAE trans-ferred its 60% holding in the Company to the Emirates Investment Authority with effect from 1 January 2008, which is ultimately controlled by the UAE Fed-eral Government. The Group provides telecommunication services to the Fed-eral Government (including Ministries and local bodies). These transactions are at normal commercial terms. The credit period allowed to Government custom-ers ranges from 90 to 120 days. Trade receivables include an amount of AED

1,231 million (2014: AED 1,073 million), which are net of allowance for doubtful debts of AED 125 million (2014: AED 101 million), receivable from Federal Min-istries and local bodies. See Note 5 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 Govern-ment exerts control, joint control or significant influence. The nature of the transactions that the Group has with such related parties is the provision of telecommunication services.

15. Other Investments


Sales to related parties comprise of the provision of telecommunication prod-ucts and services (primarily voice traffic and leased circuits) by the Group based on normal commercial terms. Purchases relate exclusively to the provision of tel-ecommunication products and services by associates to the Group based on normal commercial terms.

The net amount due from related par-ties are unsecured and will be settled in cash. The loans due from a related party is subordinated to external borrowings.

The principal management and other services provided to the Group’s associ-ates are set out below based on agreed contractual terms and conditions.

i. Etihad Etisalat Company

Pursuant to the Communications and Information Technology Commission’s (CITC) licensing requirements, Mobily (then under in Company) entered into a management agreement (“the Agree-ment”) with the Company as its operator from 23 December 2004. Amounts in-voiced by the Company relate to annual management fees, fees for staff second-ments and other services provided under the Agreement. The term of the Agree-ment is for a period of seven years and can be automatically renewed for suc-cessive periods of five years unless the Company serves a 12 month notice of termination or Mobily serves a 6 month notice of termination prior to the expiry of the applicable period.

ii. Thuraya Telecommunications Com-pany PJSC

The Company provides a primary gate-way facility to Thuraya including main-tenance and support services. The Cor-poration receives annual income from Thuraya in respect of these services.

iii. Emerging Markets Telecommunica-tions Services B.V.

Amounts invoiced by the Company re-late to annual management fees, fees for staff secondments, interest on loan and other services.

c) Remuneration of key management personnel

The remuneration of the Board of Direc-tors, who are the key management per-sonnel of the Group, is set out below in aggregate for the category specified in IAS 24 Related Party Disclosures.

b) Joint ventures and associates

2015 2014 2015 2014AED millions AED millions AED millions AED millions

Telecommunication services – sales 76.8 136.8 - -

Telecommunication services – purchases 93.5 99.6 - -

Management and other services 219.7 272.9 7.3 7.3

Net amount due from related parties as at 31 December 562.9 451.5 2.9 8.4

Loans to a related party

Loans due from a related party as at 31 December, net 1,232.9 2,390.2 - -

Joint Ventures

Trading transactions

Associates

2015 2014AED’000 AED’000

Short-term benefits 16,790 17,272

17. Inventories2015 2014

AED’000 AED’000Subscriber equipment 470,500 444,321

Maintenance and consumables 340,040 224,188

Obsolescence allowances (36,451) (43,857)

Net Inventories 774,089 624,652

Movement in obsolescence allowances 2015 2014

AED’000 AED’000

At 1 January 43,857 93,374

Net decrease in obsolescence allowances (4,065) (51,143)

Foreign Exchange differences (3,341) 1,626

At 31 December 36,451 43,857

Inventories recognised as an expense during the year in respect of continuing operations 2,152,393 2,190,424

16. Related party transactions (continued)

2015 2014AED’000 AED’000

Short-term benefits 16,790 17,272

17. Inventories2015 2014

AED’000 AED’000Subscriber equipment 470,500 444,321

Maintenance and consumables 340,040 224,188

Obsolescence allowances (36,451) (43,857)

Net Inventories 774,089 624,652

Movement in obsolescence allowances 2015 2014

AED’000 AED’000

At 1 January 43,857 93,374

Net decrease in obsolescence allowances (4,065) (51,143)

Foreign Exchange differences (3,341) 1,626

At 31 December 36,451 43,857

Inventories recognised as an expense during the year in respect of continuing operations 2,152,393 2,190,424

18. Trade and other receivables

20152014

(Restated)

AED’000 AED’000Amount receivable for services rendered 9,366,038 9,382,221

Allowance for doubtful debts (1,954,616) (1,646,120)

Net trade receivables 7,411,422 7,736,101

Amounts due from other telecommunication operators/carriers 6,887,638 5,310,370

Prepayments 566,460 666,822

Accrued income 1,143,078 954,840

Other receivables 2,420,205 2,890,512

At 31 December 18,428,803 17,558,645

Total trade and other receivables 18,428,803 17,558,645of which current trade and other receivables 18,215,158 17,318,579

of which non-current other receivables 213,645 240,066

The Group’s normal credit terms ranges between 30 and 120 days (2014: 30 and 120 days).




20152014


Upto 60 days 9,923,695 8,905,884

61-90 days 576,975 622,006

90-365 days 1,915,806 1,492,935

Over one year 1,882,584 2,025,646

Net trade receivables 14,299,060 13,046,471

2015 2014AED’000 AED’000

At 1 January 1,646,120 1,550,560

Net increase in allowance for doubtful debts 319,011 122,931

Foreign Exchange difference 8,205 (13,419)

Reclassified as held for sale (Note 35) (18,720) (13,952)

At 31 December 1,954,616 1,646,120

Movement in allowance for doubtful debts :

19. Cash and cash equivalents 2015 2014AED’000 AED’000

Maintained locally 17,746,449 15,924,323

Maintained overseas, unrestricted in use 3,487,184 2,335,947

Maintained overseas, restricted in use 275,990 291,504

Cash and bank balances 21,509,623 18,551,774

(87,269) (8,915)

Cash and bank balances from continuing operations 21,422,354 18,542,859

(15,956,323) (12,498,851)

Cash and cash equivalents from continuing operations 5,466,031 6,044,008

Less: Deposits with maturities exceeding three months from the date of deposit

Reclassified as held for sale (Note 35)

20. Trade and other payables

2015 2014(Restated)

AED’000 AED’000

CurrentFederal royalty 5,847,678 5,444,018

Trade payables 8,207,720 9,070,849

Amounts due to other telecommunication administrators 5,534,660 4,039,455

Deferred revenue 1,554,145 1,810,398

Other payables and accruals 11,541,510 10,406,132

At 31 December 32,685,713 30,770,852

Non-currentOther payables and accruals 1,533,176 1,075,481

At 31 December 1,533,176 1,075,481

Cash and cash equivalents comprise cash on hand and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. These are denominated primarily in UAE Dir-ham, with financial institutions and banks. Interest is earned on these investments at prevailing market rates. The carrying amount of these assets approximates to their fair value.

No interest is charged on the trade receivable balances. With respect to the amounts receivable from the services rendered the Group holds AED 424 million (2014: AED 299 million) of collateral in the form of cash deposits from customers. Amounts due from other telecommunication operators/carriers include interconnect balances with related parties.

Amounts due to other telecommunication administrators include interconnect balances with related parties.

Federal royalty for the year ended 31 December 2015 is to be paid as soon as the consolidated financial statements have been approved but not later than 4 months from the year ended 31 December 2015.

Ageing of net trade receivables, including amounts due from other telecommunication operators/carriers :18. Trade and other receivables (continued) 21. Borrowings

Details of the Group’s bank and other borrowings are as follows:

2015 2014 2015 2014AED’000 AED’000 AED’000 AED’000

Bank overdrafts 3,055,377 2,416,452 3,055,377 2,416,452Bank loansOther borrowingsBonds 15,139,036 14,901,901 14,608,777 14,164,803

Loans from non controlling interest 7,803 8,189 8,584 8,671

Vendor financing 271,950 389,831 271,950 366,057

Others 62,577 52,705 63,488 56,562

21,978,068 22,735,543 21,519,941 21,921,834

Advances from non controlling interest 560,221 570,715Total Borrowings 22,080,162 22,492,549

Reclassified as held for sale (Note 35) - (263,379)

Borrowings from continuing operations 22,080,162 22,229,170of which due within 12 months 4,199,637 3,609,711

of which due after 12 months 17,880,525 18,619,459

Carrying ValueFair Value

Bank borrowings

3,441,325 4,966,465 3,511,765 4,909,289

Advances from non-controlling interest represent advances paid by the minority shareholder of Etisalat International Pa-kistan LLC (EIP) towards the Group’s ac-quisition of its 26% stake in PTCL, net of repayments. The amount is interest free and is not repayable within 12 months from the statement of financial position date and accordingly the full amount is carried in non-current liabilities. The fair value of advances is not equivalent to its carrying value as it is interest-free. However, as the repayment dates are variable, a fair value cannot be reason-ably determined.

External borrowings of AED 1,320 mil-lion (2014: AED 2,673 million) are se-cured by property, plant and equipment.

During the prior year, one of the Group’s subsidiaries had breached the covenants on the external borrowings facility of CFA 42,637 million (AED 290 million) . The carrying value of the above facil-ity as at 31 December 2014 amounted to CFA 7,954 million (AED 54 million). The lender was notified regarding the breach. The lender did not request for accelerated repayment of the loan and the terms of the loan were not resched-uled. The loan was repayable within 12 months.

On 28 April 2014, the Group had entered into multi-currency facilities agreement for EUR 3.15 billion (AED 15.9 billion) with a syndicate of local and interna-tional banks for the purpose of financ-ing the Maroc Telecom’s acquisition. Financing consisted of two facilities: Tranche A was a twelve months bridge loan amounting to EUR 2.1 billion (AED 10.6 billion) at a price of Euribor plus 45 basis points for the first six months increased by 15 basis points in each of the following three months. Tranche B was a three years term loan amounting to EUR 1.05 billion (AED 5.3 billion) at a price of Euribor plus 87 basis points. Both these tranches have been settled in June 2014 following issuance of bonds as mentioned below.

On 22 May 2014, the Group had com-pleted the listing of USD 7 billion (AED 25.7 billion) Global Medium Term Note (GMTN) programme which will be used to meet medium to long-term fund-ing requirements on the Irish Stock Ex-change (“ISE”). Under the programme, Etisalat can issue one or more series of conventional bonds in any currency and amount up to USD 7 billion. The listed programme was rated Aa3 by Moody’s, AA- by Standard & Poor’s and A+ by Fitch.

On 11 June 2014, the Group issued the inaugural bonds under the GMTN pro-gramme. The issued bonds were denomi-nated in US Dollars and Euros and con-sisted of four tranches:

a. 5 years tranche: USD 900 million with coupon rate of 2.375% per an-num

b. 7 years tranche: EUR 1,200 million with coupon rate of 1.750% per an-num

c. 10 years tranche: USD 500 million with coupon rate of 3.500% per an-num

d. 12 years tranche: EUR 1,200 mil-lion with coupon rate of 2.750% per annum

The effective date for the bonds term was 18 June 2014. Net proceeds from the issuance of the bonds were used for re-payment of outstanding facilities of EUR 3.15 billion, as above, utilized for the ac-quisition of Maroc Telecom.

In May 2015, the Group issued an ad-ditional bonds amounting to USD 400 million under the existing USD 5 years tranches.




Nominal ValueFair

ValueCarrying

Value

2015 2015 2015AED’000 AED’000 AED’000

2.375% US dollar 900 million notes due 2019 3,306,600 3,294,696 3,306,574 3.500% US dollar 500 million notes due 2024 1,837,000 1,859,595 1,815,817

1.750% Euro 1,200 million notes due 2021 4,816,800 4,901,576 4,761,356


At 31 December 2015 14,777,200 15,139,036 14,608,777of which due within 12 months -of which due after 12 months 14,608,777

-

Bonds in net investment hedge relationship

Bonds

As at 31 December 2015, the total amounts in issue under this programme split by currency are USD 1.4 billion (AED 5.14 billion) and Euro 2.4 billion (AED 9.63 billion) as follows:

Nominal ValueFair

ValueCarrying

Value

2014 2014 2014AED’000 AED’000 AED’000

2.375% US dollar 500 million notes due 2019 1,837,000 1,841,225 1,824,285 3.500% US dollar 500 million notes due 2024 1,837,000 1,879,618 1,812,709



At 31 December 2015 14,382,800 14,901,901 14,164,803

of which due within 12 months -

of which due after 12 months 14,164,803

The terms and conditions of the Group’s bank and other borrowings are as follows:

Bonds

Bonds in net investment hedge relationship

21. Borrowings (continued)

Year of maturity Currency Interest rate2015

AED’0002014

AED’000

Variable interest borrowings

Unsecured Share holders Loans 2010-2017 EGP Mid Corridor +1.4% 1,318,825 1,207,849

Secured bank loan 2014-2017 EURO EURIBOR +0.8% - 334,650

Unsecured Share holders Loans 2015-2018 EGP Mid corridor + 1.4% 324,748 -

Secured bank loan 2014 USD LIBOR +4.8% - 263,379

2015-2016 USD Mid Corridor +0.75% 379,715 -

Secured bank loan 2012-2019 USD 3M SLIBOR+4% 188,407 206,176

Secured bank loan 2014-2015 EURO EURIBOR +4.9% - 54,107

Secured bank loan 2014-2022 PKR 0.75% 735,000 549,000

Secured bank loan 2014-2019 USD6 month LIBOR

+.1.52%- 720,972

Secured bank loan 2014-2019 EUR6 month

EURIBOR+.1.4%- 545,749

Secured bank loan 2014-2016 USD3 months

LIBOR+3.5%- 19,099

Secured bank loan 2012-2018 EGP Mid corridor + 0.75% 43,957 64,256

Secured Bank Overdrafts 2012-2020 PKR month KIBOR + 30BP 271,950 337,447

Fixed interest borrowings

Unsecured bank overdrafts 2015-2016 MAD 5.45% 2,489,855 2,080,295

Secured Other Financing 2017 USD 0% 53,185 29,316

Secured Bank Loans 2017 EUR 2% 233,959 -

Unsecured loans from non-controlling interests 2013-2015 EGP 10% 8,584

8,671

Secured Bank Loans 2017 0 9.69% 57,387 -

Secured bank loan 2014-2017 CFA 8.0% - 44,791

Other borrowings

Advances from non-controlling interests N/A USD Interest free 560,221 570,715

Bonds 2019 USD 2.375% 1,827,933 1,824,285

Bonds 2019 USD 2.375% 1,478,641 -

Bonds 2024 USD 3.500% 1,815,817 1,812,710

Bonds 2021 EUR 1.750% 4,761,356 5,283,174

Bonds 2026 EUR 2.750% 4,725,030 5,244,633

Others Various Various Various 805,592 1,291,275

Total Borrowings 22,080,162 22,492,549


Borrowings from continuing operations 22,080,162 22,229,170

Carrying Value





2015 2014

Bank borrowings 6.0% 5.1%

Other borrowings 2.7% 2.9%

a) Interest rates

The weighted average interest rate paid during the year on bank and other borrowings is set out below:

b) Available facilities

At 31 December 2015, the Group had AED 4,832 million (2014: AED 2,000 million) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met.

22. Net investment hedge relationships

During the prior year, Euro bonds issued (refer to note 21) and cross currency swaps have been designated as net investment hedges. There was no material ineffectiveness of these hedges recorded as at the end of the reporting period.

As at the end of the reporting period the Group has cross currency USD-EUR swaps which are designated as hedges of net invest-ment. The fair value of the cross currency swaps are calculated by discounting the future cash flows to net present value using appropriate market interest and prevailing foreign currency rates. The fair value of swaps is as follows:

2015 2014AED’000 AED’000

Effective part directly recognised in other comprehensive income 1,255,830 1,301,869

2015 2014AED’000 AED’000

Fair value of swaps designated as net investment hedge (Derivative financial assets) 675,412 293,584

Fair value of swaps designated as net investment hedge (Derivative financial liabilities) (1,607) -

The fair value of bonds designated as hedge is disclosed in note 21.


According to the terms of the share purchase agreement between Etisalat International Pakistan LLC and the Government of Pakistan (“GOP”) payments of AED 6,612 million (2014: AED 6,612 million) have been made to GOP with the balance of AED 2,937 million (2014: AED 2,937 mil-lion) to be paid. The amounts payable are being withheld pending completion of certain conditions in the share purchase agreement related to the transfer of certain assets to PTCL.

All amounts payable on acquisitions are financial liabilities measured at amortised cost and are mostly denominated in either USD, AED or PKR.

It is the Group policy to lease certain of its plant and machinery under finance leases. For the year ended 31 December 2015, the average effective borrowing rate was 20% (2014: 25%). The fair value of the Group’s lease obligations is approximately equal to their carrying value.

Current Non-current TotalAED’000 AED’000 AED’000

At 31 December 2015Investments

Etisalat International Pakistan LLC 2,936,653 - 2,936,653

Atlantique Telecom S.A. 11,022 - 11,022

Licenses

Pakistan Telecommunication Company Limited 265,472 693,661 959,133

3,213,147 693,661 3,906,808

At 31 December 2014

Investments

Etisalat International Pakistan LLC 2,936,653 - 2,936,653

Atlantique Telecom S.A. 11,022 - 11,022

Licenses

Republic of Benin 24,828 - 24,828

Pakistan Telecommunication Company Limited 161,291 936,699 1,097,990

3,133,794 936,699 4,070,493

24. Finance lease obligations

20152014

(Restated) 20152014


Amounts payable under finance leaseWithin one year 7,230 7,150 7,070 6,983

Between 2 and 5 years 11,253 18,182 10,934 17,283

18,483 25,332 18,004 24,266

Less: future finance charges (479) (1,066) - -

Present value of lease obligations 18,004 24,266 18,004 24,266

of which due within 12 months 7,070 6,983 7,070 6,983

of which due after 12 months 10,934 17,283 10,934 17,283

Minimum lease paymentsPresent value of minimum lease

payments

23. Payables related to investments and licenses




Asset retirement obligations Other Total

AED’000 AED’000 AED’000

At 1 January 2014 19,721 1,353,654 1,373,375

Additional provision during the year 20,718 850,908 871,626

Acquisition of Maroc Telecom (Note 30) - 197,061 197,061

Utilization of provision (6) (46,511) (46,517)

Release of provision (6,025) (243,774) (249,799)

Adjustment for change in discount rate (549) (1,188) (1,737)

Unwinding of discount 673 - 673

Exchange differences (426) (41,116) (41,542)

At 31 December 2014 (as restated) 34,106 2,069,034 2,103,140

Included in current liabilities 1,897 1,974,507 1,976,404

Included in non-current liabilities 32,209 94,527 126,736

At 1 January 2015 (as restated) 34,106 2,069,034 2,103,140

Additional provision during the year 4,151 963,593 967,744

Reclassified as held for sale (Note 35) (2,696) - (2,696)

Utilization of provision - (769,966) (769,966)

Release of provision (630) (100,659) (101,289)

Adjustment for change in discount rate 1,315 - 1,315

Unwinding of discount 8 24 32

Exchange differences (2,933) (68,695) (71,628)

At 31 December 2015 33,321 2,093,331 2,126,652

Included in current liabilities 530 1,918,314 1,918,844

Included in non-current liabilities 32,791 175,017 207,808

At 31 December 2015 33,321 2,093,331 2,126,652

Asset retirement obligations relate to certain assets held by certain Group’s overseas subsidiaries that will require restoration at a future date that has been approximated to be equal to the end of the useful economic life of the assets. There are no expected reimbursements for these amounts.

“Other” includes provisions relating to certain indirect tax liabilities and other regulatory related items, including provisions relat-ing to certain Group’s overseas subsidiaries.

25. Provisions

: 2015 2014

AED’000 AED’000

Funded PlansPresent value of defined benefit obligations 3,686,056 3,541,336

Less: Fair value of plan assets (3,266,580) (3,089,390)

419,476 451,946

Unfunded PlansPresent value of defined benefit obligations and other employee benefits 1,491,004 1,592,594

Total 1,910,480 2,044,540

The movement in defined benefit obligations for funded and unfunded plans is as follows: 2015 2014AED’000 AED’000

As at 1 January 5,133,930 4,467,509

Other Adjustments - 162,946


Service cost 151,407 146,761

Interest cost 500,671 447,896

Actuarial (loss)/gain (654) 11,754

Remeasurements 33,715 210,071

Benefits paid (436,562) (472,943)

Exchange difference (205,447) 162,212

As at 31 December 5,177,060 5,133,930

The movement in the fair value of plan assets is as follows: 2015 2014AED’000 AED’000

As at 1 January 3,089,390 2,555,736

Return on plan assets 295,745 318,868

Contributions received 257,586 458,295

Benefits paid (239,247) (371,355)


As at 31 December 3,266,580 3,089,390

The amount recognised in statement of profit or loss is as follows: 2015 2014AED’000 AED’000

Service cost 136,238 146,766


Others (1,501) 10,739

270,664 212,416

Following are the significant assumptions used relating to the major plans

Discount rate

UAE 2.50% 2.80%

Pakistan 9.5%- 11.5% 11.25%- 12.5%

Morocco 4% 4.25%

Average annual rate of salary

UAE 3.5% - 4% 4.0%

Pakistan 7% - 10% 7% - 11.5%

Morocco 3%-5% 3%-5%

Plan assets for funded plan are comprised as follows: 2015 2014AED’000 AED’000

Debt instruments - unquoted 2,564,547 2,469,808

Cash and cash equivalents 424,297 477,771

Investment property 284,173 292,957

Fixed assets 242 175

Other assets 747 4,555

less: liabilities (7,426) (155,876)

3,266,580 3,089,390

2015 2014

The liabilities recognised in the consolidated statement of financial position are:

26. Provision for end of service benefits




: 2015 2014

AED’000 AED’000

Funded PlansPresent value of defined benefit obligations 3,686,056 3,541,336

Less: Fair value of plan assets (3,266,580) (3,089,390)

419,476 451,946

Unfunded PlansPresent value of defined benefit obligations and other employee benefits 1,491,004 1,592,594

Total 1,910,480 2,044,540

The movement in defined benefit obligations for funded and unfunded plans is as follows: 2015 2014AED’000 AED’000

As at 1 January 5,133,930 4,467,509

Other Adjustments - 162,946


Service cost 151,407 146,761


Actuarial (loss)/gain (654) 11,754

Remeasurements 33,715 210,071

Benefits paid (436,562) (472,943)


As at 31 December 5,177,060 5,133,930

The movement in the fair value of plan assets is as follows: 2015 2014AED’000 AED’000

As at 1 January 3,089,390 2,555,736

Return on plan assets 295,745 318,868

Contributions received 257,586 458,295

Benefits paid (239,247) (371,355)


As at 31 December 3,266,580 3,089,390

The amount recognised in statement of profit or loss is as follows: 2015 2014AED’000 AED’000

Service cost 136,238 146,766


Others (1,501) 10,739

270,664 212,416

Following are the significant assumptions used relating to the major plans

Discount rate

UAE 2.50% 2.80%

Pakistan 9.5%- 11.5% 11.25%- 12.5%

Morocco 4% 4.25%

Average annual rate of salary

UAE 3.5% - 4% 4.0%

Pakistan 7% - 10% 7% - 11.5%

Morocco 3%-5% 3%-5%

Plan assets for funded plan are comprised as follows: 2015 2014AED’000 AED’000

Debt instruments - unquoted 2,564,547 2,469,808


Investment property 284,173 292,957

Fixed assets 242 175

Other assets 747 4,555

less: liabilities (7,426) (155,876)

3,266,580 3,089,390

2015 2014

The expense recognised in profit or loss relating to contribution plan at the rate specified in the rules of the plans amounting to AED 132 million (2014: AED 124 million).

At the extraordinary general meeting held on 24 March 2015, the shareholders approved the increase of the authorised share capi-tal of the Etisalat Group (formerly known as ‘’Corporation’’) to AED 10 billion. The Company has amended the articles of association to reflect this increase. At the ordinary assembly meeting held on 24 March 2015, the shareholders approved the issue of one bonus shares for every ten shares held.

27. Share capital

2015 2014AED’000 AED’000

Authorised:10,000 million (2014: 8,000 million) ordinary shares of AED 1 each 10,000,000 8,000,000

Issued and fully paid up:

8,696.8 million (2014: 7,906.1 million) ordinary shares of AED 1 each 8,696,754 7,906,140

26. Provision for end of service benefits (continued)

The movement in the Reserves is provided below: 20152014

RestatedAED’000 AED’000

As at 1 January 27,440,371 28,266,980

Total comprehensive income for the year (575,277) (844,849)

Disposal of Subsidiary (Note 35) (162,993) -

Transfer from retained earnings 881,313 18,240

As at 31 December 27,583,414 27,440,371

The movement for each type of reserves is provided below: 20152014

RestatedAED’000 AED’000

Translation reserve

As at 1 January (2,734,834) (2,209,881)

Total comprehensive income for the year (692,291) (524,953)

Disposal of Subsidiary (Note 36) (162,993) -

As at 31 December (3,590,118) (2,734,834)

Investment revaluation reserve

As at 1 January (115,419) 204,477

Loss on revaluation (162,874) (37,582)

Reclassification adjustment relating to available-for-sale financial assets disposed during the year (16,076) (282,314)

Reclassification adjustment relating to available-for-sale financial assets impaired during the year 295,964 -

As at 31 December 1,595 (115,419)

Development reserve

As at 1 January and 31 December 7,850,000 7,850,000

Asset replacement reserve

As at 1 January 8,166,000 8,166,000

Transfer from retained earnings 24,286 -

As at 31 December 8,190,286 8,166,000

Statutory reserve

As at 1 January 189,657 165,077

Transfer from retained earnings 849,862 24,580

As at 31 December 1,039,519 189,657

General reserve

As at 1 January 14,084,967 14,091,307

Transfer from retained earnings 7,165 (6,340)

As at 31 December 14,092,132 14,084,967

28. Reserves




a) Development reserve, asset replace-ment reserve and general reserve

These reserves are all distributable re-serves and comprise amounts trans-ferred from unappropriated profit at the discretion of the Group to hold reserve amounts for future activities including the issuance of bonus shares.

b) Statutory reserve

In accordance with the UAE Federal Law No. 2 of 2015, and the respective Articles

The capital structure of the Group con-sists of bonds, bank and other borrow-ings, finance lease obligations, cash and bank balances and total equity compris-ing share capital, reserves and retained earnings.

The Group monitors the balance be-

of Association of some of the Group’s subsidiaries, 10% of their respective an-nual profits should be transferred to a non- distributable statutory reserve. The Company’s share of the reserve has ac-cordingly been disclosed in the consoli-dated statement of changes in equity.

The profit for the year attributable to the equity holders of the Company which is available for distribution after transfer of the statutory reserve amounts to AED 7,436 million.

tween equity and debt financing and es-tablishes internal limits on the maximum amount of debt relative to earnings.

The limits are assessed, and revised as deemed appropriate, based on various considerations including the anticipated funding requirements of the Group and

c) Translation reserve

Cumulative foreign exchange differenc-es arising on the translation of overseas operations are taken to the translation reserve.

the weighted average cost of capital. The overall objective is to maximise re-turns to its shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

29. Financial instruments

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the basis of measure-ment and the bases of recognition of income and expenses) for each class of financial asset and financial liability are disclosed in Note 2.

: 2015

2014(Restated)

AED’000 AED’000

Bank borrowings (6,567,142) (7,325,741)

Bonds (14,608,777) (14,164,803)

Other borrowings (904,243) (1,002,005)

Finance lease obligations (18,004) (24,266)


Net funds (675,812) (3,973,956)

Total equity 59,375,099 60,214,472

Capital management

The Group’s capital structure is as follows:

28. Reserves (continued)

Financial risk management objectives

The Group’s corporate finance function monitors the domestic and international financial markets relevant to managing the financial risks relating to the opera-tions of the Group. Any significant de-cisions about whether to invest, borrow funds or purchase derivative financial instruments are approved by either the Board of Directors or the relevant au-thority of either the Group or of the individual subsidiary. The Group’s risk includes market risk, credit risk and li-quidity risk.

The Group takes into consideration sev-eral factors when determining its capi-tal structure with the aim of ensuring sustainability of the business and maxi-mizing the value to shareholders. The Group monitors its cost of capital with a goal of optimizing its capital structure. In order to do this, the Group monitors the financial markets and updates to standard industry approaches for cal-culating weighted average cost of capi-tal, or WACC. The Group also monitors a net financial debt ratio to obtain and

maintain the desired credit rating over the medium term, and with which the Group can match the potential cash flow generation with the alternative uses that could arise at all times. These general principles are refined by other considerations and the application of specific variables, such as country risk in the broadest sense, or the volatility in cash flow generation, or the applicable tax rules, when determining the Group’s financial structure.

Categories of financial instruments

The Group’s financial assets and liabilities consist of the following: 20152014


Financial assetsLoans and receivables, held at amortised cost:

Loans to/due from associates and joint ventures 1,798,688 2,850,049

Trade and other receivables, excluding prepayments 17,862,343 16,891,823

19,661,031 19,741,872

Available-for-sale financial assets (including other investments held for sale) 576,008 747,381

Fair value through Profit or loss 33,025 44,625

Held-to-maturity investments 203,305 191,991


Derivative financial instruments 675,412 293,584

42,571,135 39,562,312

Financial liabilitiesOther financial liabilities held at amortised cost:

Trade and other payables, excluding deferred revenue 32,664,744 30,035,935

Borrowings 22,080,162 22,492,549

Payables related to investments and licenses 3,906,808 4,070,493

Finance lease obligations 18,004 24,266

58,669,718 56,623,243

29. Financial instruments (continued)




a) Market risk

The Group’s activities expose it primarily to the financial risks of changes in for-eign currency exchange rates, interest rates and price risks on equity invest-ments. From time to time, the Group will use derivative financial instruments to hedge its exposure to currency risk. There has been no material change to the Group’s exposure to market risks or the manner in which it manages and measures the risk during the year.

Foreign currency risk

The Company’s presentation/functional currency is United Arab Emirates Dirham (“AED”). Foreign currency risk arises from transactions denominated in foreign currencies and net investments in for-eign operations.

The Group has foreign currency transac-tional exposure to exchange rate risk as it enters into contracts in other than the functional currency of the entity (mainly USD and Euro). The Group entities also enter into contract in it’s functional cur-rencies including Nigerian Naira, Egyp-tian Pounds, Pakistani Rupee, Sri Lankan Rupee, Afghani, Tanzanian Shilling CFA Francs and Moroccan Dirham. Etisalat UAE also enters into contracts in USD which is pegged to AED. Atlantique Tel-ecom Group enters into Euros contracts as CFA is pegged to Euro and Maroc Telecom also enters into Euro contracts as Moroccan Dirham is 60% pegged to Euro. The Group enters into a variety of

derivative financial instruments to man-age its exposure to interest rate and foreign exchange rate risk, including forward foreign exchange contracts, interest rate swaps and cross currency swaps.

In addition to transactional foreign cur-rency exposure, a foreign currency ex-posure arises from net investmentsin the Group entities whose functional currency differs from the Group’s pres-entation currency (AED). The risk is de-fined as the risk of fluctuation in spot exchange rates between the functional currency of the net investments and the Group’s presentation currency. This will cause the amount of the net investment to vary. Such a risk may have a signifi-cant impact on the Group’s consolidated financial statements.

This translation risk does not give rise to a cash flow exposure. Its impact arises only from the translation of the net in-vestment into the group’s presentation currency. This procedure is required in preparing the Group’s consolidated fi-nancial statements as per the applicable IFRS.

The cross currency swaps involve the ex-change of principal and floating or fixed interest receipts in the foreign currency in which the issued bonds are denomi-nated, for principal and floating or fixed interest payments in the Company’s functional currency.

The fair value of a cross currency is de-termined using standard methods to value cross currency swaps and is the es-timated amount that the swap contract can be exchanged for or settled with under normal market conditions. The key inputs are the yield curves, basis curves and foreign exchange rates. In accord-ance with the fair value hierarchy within IFRS 7 Financial Instruments: Disclosure, the fair value of cross currency swaps represent Level 2 fair values.

Foreign currency sensitivity

The following table presents the Group’s sensitivity to a 10 per cent change in the Dirham against the Egyptian Pound, the Euro, the Pakistani Rupees and Moroc-can Dirham.

These four currencies account for a sig-nificant portion of the impact of net profit, which is considered to materi-ally occur through cash and borrowings within the Group’s financial statements in respect of subsidiaries and associ-ates whose functional currency is not the Dirham. The impact has been deter-mined by assuming a weakening in the foreign currency exchange of 10% upon closing foreign exchange rates. A posi-tive number indicates an increase in the net cash and borrowings balance if the AED/USD were to strengthen against the foreign currency.

2015 2014AED’000 AED’000

Increase in profit/(loss) and increase/(decrease) in equityEgyptian pounds 41,507 112,074

Euros 970,526 1,164,144

Pakistani rupees (1,802) 12,187

MAD 195,230 156,556


Interest rate risk

The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates. The Group monitors the market interest rates in comparison to its current bor-rowing rates and determines whether or not it believes it should take action related to the current interest rates. This includes a consideration of the current cost of borrowing, the projected future interest rates, the cost and availability of derivate financial instruments that could be used to alter the nature of the interest and the term of the debt and, if applicable, the period for which the in-terest rate is currently fixed.

Interest rate sensitivity

Based on the borrowings outstanding at 31 December 2015, if interest rates had been 2% higher or lower during the year and all other variables were held con-stant, the Group’s net profit and equity would have decreased or increased by AED 70 million (2014: AED 87 million). This impact is primarily attributable to the Group’s exposure to interest rates on its variable rate borrowings.

The Group’s sensitivity to interest rate has reduced significantly during the year due to the fixed coupon bonds issued in June 2014.

Other price risk

The Group is exposed to equity price risks arising from its equity investments. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these invest-ments. See Note 15 for further details on the carrying value of these investments.

If equity price had been 5% higher or lower:

•profitfortheyearended31December2015 would increase/decrease by AED 19 million (2014: 15 million) due to loss/profit realised on impairment/disposal of investments in available-for-sale shares

• other comprehensive income for theyear ended 31 December 2015 would in-crease/decrease by AED 15 million (2014: increase/decrease by AED 28 million) as a result of the changes in fair value of available-for-sale shares.

b) Credit risk management

Credit risk refers to the risk that the counterparty will default on its contrac-tual obligations resulting in financial loss to the Group and arises principally from the Group’s bank balances and trade and other receivables. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit rat-ings of its counterparties are monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

For its surplus cash investments, the Group considers various factors in de-termining with which banks and /cor-porate to invest its money including but not limited to the financial health, Government ownership (if any), the rat-ing of the bank by rating agencies The assessment of the banks and the amount to be invested in each bank is assessed annually or when there are significant changes in the marketplace.

Group's bank balance 2015 2014

Investment in UAE 83% 86%Investment outside of the UAE 14%

Bank rating for Investment in UAE

AED Rating AED RatingBy Fitch - NA 7.0 billion A+

- NA 1.7 billion ABy Moody's 5.2 billion Baa1 - NA

4.1 billion A2 - NABy S&P 3.0 billion BBB+ - NA

2015 2014

17%

The Group’s trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts

receivable and, where appropriate, col-lateral is received from customers usually in the form of a cash deposit The carry-ing amount of financial assets recorded in the consolidated financial statements,

net of any allowances for losses, repre-sents the Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.






AED’000Trade and other

payables, excluding deferred revenue

Borrowings Payables related to

investments and licenseslicenses

Finance lease obligations

Total

On demand or within one year 31,132,905 4,199,637 3,213,147 7,070 38,552,759 In the second year 883,124 2,246,354 206,250 10,934 3,346,662 In the third to fifth years inclusive 527,319 4,130,718 248,293 - 4,906,330 After the fifth year 121,396 11,503,453 239,118 - 11,863,967 As At 31 December 2015 32,664,744 22,080,162 3,906,808 18,004 58,669,718

On demand or within one year 29,172,100 3,952,158 3,133,794 6,983 36,265,035

In the second year 1,533,229 1,034,817 936,699 17,283 3,522,028

In the third to fifth years inclusive 12,451 4,881,624 - - 4,894,075

After the fifth year 336 12,623,950 - - 12,624,286

As At 31 December 2014 (as restated) 30,718,116 22,492,549 4,070,493 24,266 57,305,424

c) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Direc-tors, which has built an appropriate liquid-ity risk management framework for the management of the Group’s short, medium

The above table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.

and long-term funding and liquidity man-agement requirements. The Group manages liquidity risk by maintaining adequate re-serves, banking facilities and reserve bor-rowing facilities by continuously moni-toring forecast and actual cash flows and matching the maturity profiles of financial

assets and liabilities. The details of the available undrawn facilities that the Group has at its disposal at 31 December 2015 to further reduce liquidity risk is included in Note 21. The majority of the Group’s finan-cial liabilities as detailed in the consolidat-ed statement of financial position are due within one year.

Level 1 Level 2 Level 3 TotalAED’000 AED’000 AED’000 AED’000

Financial assets

Derivative financial assets - 675,412 - 675,412

Other Investments 578,556 - 233,784 812,340

578,556 675,412 233,784 1,487,752

Financial liabilities

Borrowings - 21,978,068 - 21,978,068

Derivative financial liabilities - 1,607 - 1,607

- 21,979,675 - 21,979,675

Level 1 Level 2 Level 3 Total

AED’000 AED’000 AED’000 AED’000

Financial assets

Derivative financial assets - 293,584 - 293,584

Other Investments 753,157 - 230,840 983,997

753,157 293,584 230,840 1,277,581

Financial liabilities

Borrowings - 22,735,543 - 22,735,543

Derivative financial liabilities - - - -

- 22,735,543 - 22,735,543

Fair value hierarchy as at 31 December 2015

Fair value hierarchy as at 31 December 2014

Financial liabilities are repayable as follows:

d) Fair value measurement of financial

assets and liabilities



Level 1 classification comprises financial instruments where fair value is deter-mined by unadjusted quoted prices in active markets for identical assets or li-abilities. Level 2 classification comprises items where fair value is determined from inputs other than quoted prices that are observable for the asset or li-ability, either directly or indirectly. Level 3 classification comprises unobservable inputs.

Some of the Group’s financial assets and liabilities are measured at fair value or for which fair values are disclosed. In-formation on how these fair values are determined are provided below:

•Borrowingsaremeasuredandrecordedin the consolidated statement of finan-cial position at amortised cost and their fair values are disclosed in Note 21.

• Derivative financial instrument fairvalues are present values determined from future cash flows discounted at rates derived from market sourced data.

•ListedsecuritiesandSukukareclassi-fied as available for sale financial assets and held to maturity investments respec-tively and their fair values are derived from observable quoted market prices for similar items. These represent Level

d) Fair value measurement of financial assets and liabilities (continued)

1 fair values. Unquoted equity securities represent Level 3 fair values. Details are included in note 15 “Other investments”.

The carrying amounts of the other finan-cial assets and liabilities recorded in the consolidated financial statements ap-proximate their fair values

The fair value of the Group’s investment property for an amount of AED 72.2 mil-lion (2014: AED 70.4 million) has been determined based on a Sales Comparable approach and with reference to observ-able latest market prices for similar com-mercial properties in the neighbourhood.

Accordingly, the fair value is classified as level 3 of the fair value hierarchy. The significant unobservable inputs used in the fair value measurement are average market rates used in the Sales Compara-ble method. Significantly lower market rates in isolation would result in lower fair value measurement.

The fair value of other investments amounting to AED 230 million are clas-sified as Level 3 because the investments are not listed and there are no recent arm’s length transactions in the shares.

The valuation technique applied is mar-ket comparison technique based on com-

parison with quoted prices of entities similar to the investees. The significant unobservable inputs include forecasted earnings per share and adjusted market multiple. Any significant change in these inputs would change the fair value of these investments

There have been no transfers between Level 2 and 3 during the year.

The fair values of the financial assets and financial liabilities included in the level 2 and level 3 categories above have been determined in accordance with generally accepted pricing models based on cash flows discounted at rates derived from market sourced data.

TotalAED’000

As at 1 January 230,840Additions 29,991

Foreign exchange difference (11,440)

Disposal (16,409)

Other movement 802 As at 31 December 233,784

Reconciliation of Level 3




On 4 November 2013, the Group signed a share purchase agreement for the acquisition of Vivendi’s stake in Maroc Telecom. The acquition was in line with the group’s strategy to reach out to new customers and markets.

On 28 April 2014, the Group entered into a multi-currency facilities agreement with a syndicate of local and international banks for the purpose of financing the acquisition.

On 14 May 2014, the Group completed the acquisition at a net adjusted price of EUR 4.1 billion (AED 20.9 billion) which was primarily financed through external borrowings. This amount included the cash value of the 2012 dividend, amounting to EUR 0.3 billion (AED 1.5 billion). The transaction was effected through the acquisition by Etisalat International North Africa LLC

(“EINA”) of Vivendi’s 100% shareholding in Société de Participation dans les Télécommunications (“SPT”) established in the Kingdom of Morocco, which directly holds 53% of the shares in Maroc Telecom. The effective interests in the capital of EINA are Etisalat (91.33%) and Abu Dhabi Fund for Development (8.67%).

The application of acquisition accounting under IFRS 3 requires that the total purchase price to be allocated to the fair value of the assets acquired and liabilities assumed based on their fair values at the acquisition date, with amount exceeding the fair values being recorded as goodwill. Accordingly, on 14th May 2014, the assets and liabilities of Maroc Telecom have been appraised, based on third party valuations, for inclusion in the consolidated statement of financial position.

The purchase price allocation process (PPA) requires an analysis of acquired fixed assets, licenses, customer relationships, brands, contractual commitments and contingencies to identify and record the fair values of all assets acquired and liabilities assumed. In valuing acquired assets and liabilities assumed, fair values were based on but not limited to: future expected discounted cash flows for customer relationships, current replacement cost for similar capacity and obsolescence for certain fixed assets, comparable market rates for real estate and appropriate discount rates and growth rates.

The following table summarises the fair values of the assets acquired, liabilities assumed, related deferred taxes and goodwill as of the acquisition date further to the purchase price allocation process (PPA).

Fair values based on purchase price

allocationAED’000

Intangible assets 10,729,232

Property, plant and equipment 14,886,958

Investments 129,342

Inventory 191,419

Trade and other receivables 4,303,344

Deferred tax assets 46,955

Cash and cash equivalents 2,261,948

Trade and other payables (8,664,357)

Provision for end of service benefits (162,946)

Provision (197,061)

Obligations under finance leases (22,450)

Bank loans (2,543,565)

Deferred tax liabilities (3,637,635)

Net identifiable assets acquired 17,321,184

Non-controlling interests in the acquiree (8,159,944)

Goodwill 11,761,694

Fair value of investment 20,922,934

Net cash inflow arising on acquisition:

Cash and cash equivalents acquired 2,261,948

Net cash outflow on acquisition of Maroc Telecom 2014AED’000

Consideration paid 20,922,933

Less: cash and cash equivalents acquired (2,261,948)

18,660,985

30. Acquisition of Maroc Telecom


Included in the profit for the prior year was AED 796 million attributable to the business generated by Maroc Telecom Group. Revenue for the prior year includes AED 7,934 million in respect of Maroc Telecom. Had this business combination been effected at 1 January 2014, the restated revenue of the Group would have been AED 52,826 million and the restated profit for the prior year would have been AED 9,674 million.

The receivable acquired in these transactions are treated at their fair value and had a gross contractual amount of AED 5,167 million. Their best estimate at acquisition date of the contractual cash flows not expected to be collected amounted to AED 2,777 million.

Following the acquisition in May 2014, the Group has received a dividend of AED 1,249.1 million (MAD 2,795.6 million)

from Maroc Telecom relating to the year 2013.

Goodwill resulting from the acquisition has been assigned to Maroc Telecom and Maroc Telecom’s international subsidiaries as separate CGUs. Acquisition accounting allows for recognition of deferred tax liabilities on acquired intangibles (other than goodwill) which is expected to be reflected as a tax benefit on the Group’s future consolidated statement of profit or loss in proportion to and over the amortization period of the related intangible asset. There is no deferred tax liability recorded for fair value adjustment relating to land as this is not depreciated.

Goodwill arose in the acquisition of Maroc Telecom because the cost of the combination included:

•Limitedcompetitionofthefixedline

business in North and Western Africa; and

•Long-termabilitytoretainmobilecustomers and maintain market share in its key markets;

•Abilitytoparticipateintheconsolidation of telecommunications industry in North Africa and Western Africa; and

•Trainedandskilledworkforce.

These benefits are not recognised separately from Goodwill because that do not meet recognition criteria for identifiable intangible assets.

Acquisition related costs amounting to AED 621 million have been excluded from the consideration transferred and have been recognised as an expense in profit and loss of the prior year.

31. Commitments

a) Capital commitments

The Group has approved future capital projects and investments commitments to the extent of AED 5,105 million (2014: AED 7,188 million).

b) Operating lease commitments

i) The Group as lessee

At the end of the reporting period, the Group had outstanding commitments for future minimum lease payments under non- cancellable operating leases, which fall due as follows:

Operating lease payments represent rentals payable by the Group for certain of its office and retail properties. Leases are negotiated for an average term of five to ten years.

2015 2014AED’000 AED’000

304,917 225,035Minimum lease payments under operating leases recognised as an expense in the year (Note 5)

2015 2014AED’000 AED’000

Within one year 297,436 272,814

Between 2 to 5 years 1,104,972 1,040,687

After 5 years 1,019,504 1,159,391

2,421,912 2,472,892

30. Acquisition of Maroc Telecom (continued)



ii) The Group as lessor

Property rental income earned during the year was AED 16 million (2014: AED 11 million). All of the properties held have committed tenants for the next 5 years.At the end of the reporting period, the Group had contracted with tenants for the following future minimum lease payments:

32. Contingent liabilities

a) Bank guarantees

2015 2014AED’000 AED’000

Within one year 7,551 8,269

Between 2 to 5 years 7,400 8,224

14,951 16,493

2015 2014AED million AED million

i) Performance bonds and guarantees in relation to contracts 1,403.1 949.0 Corporation Overseas investments 1,298.5 771.3

ii) Promissory notes and letter of credit - 39.4

b) Foreign exchange regulations

On 23 July 2011, Etisalat DB Telecom Pvt Limited (“Etisalat DB”) received a show cause notice from the Directorate of Enforcement (the ED) of India alleging certain breaches of the Foreign Exchange Management Act 1999 (FEMA), by Etisalar DB and its Directors (at the time of the alleged breach). Etisalat DB and its Directors have filed their response(s) to the notice and the cases of each of the notices have been part heard by the ED. Should there be an adverse finding by the ED, the penalty for a breach of FEMA carries a theoretical exposure in excess of US$ 1.0 billion; however, there is no clarity on how such a fine would be apportioned between the respondents. The proceedings of the case are ongoing as at end of the reporting period.

c) Other contingent liabilities

I) The Group and its associates are disputing certain charges from the governmental and telecom regulatory agencies and telecom operators in the UAE and certain other jurisdictions but do not expect any material adverse effect on the Group’s financial position and results from resolution of these.

ii) With regard to the appeals filed by PTCL, a subsidiary of the Group, before the Honourable Supreme Court of Pakistan against the orders passed by various High Courts, the Honourable Supreme Court of Pakistan dismissed such appeals through announcement of the earlier-reserved order on 12th June, 2015. Based on the directives contained in the said order and the pertinent legal provisions, the Group is evaluating the extent of its responsibility vis-à-vis such order. PTCL, the Pakistan Telecommunication Employees Trust (“PTET”) and the Federal Government of Pakistan have filed Review Petitions before the Apex Court in this regard. Under the circumstances, the Group is of the view that it is not possible at this stage to ascertain the financial obligations, if any, flowing from the Honourable Supreme Court decision which could be disclosed in these consolidated financial statements. In the meanwhile, PTET has issued notices to prospective beneficiaries for the determination of their entitlements. A full bench of the Honourable Supreme Court headed by the Chief Justice has started conducting hearings into this Review Petition but no decision has been made to date.

iii) The Group’s associate, Etisalat

Etihad Company (Mobily) has received several penalty resolutions from the Communication Information Technology Commission (CITC’s) Violation Committee which Mobily has opposed in accordance with the Telecom regulations.

Multiple lawsuits were filed by Mobily against CITC at the Board of Grievances to oppose such resolutions of the CITC’s committee in accordance with the Telecom regulations. The status of these lawsuits as at 31 December 2015 was as follows:

•Thereare347 lawsuitsfiledbyMobilyagainst CITC amounting to Saudi Riyals 632 million (AED 618 million);

•TheBoardofGrievancehasissued170preliminary verdicts in favor of the Group voiding 170 resolutions of the CITC’s violation committee with total penalties amounting to Saudi Riyals 390 million (AED 382 miilion); and

• Some of these preliminary verdictshave become conclusive (after they were affirmed by the appeal court) resulting in cancellation of penalties with a total amount of Saudi Riyals 155 million (AED 152 million).

Mobily received additional claims from

b) Operating lease commitments (continued)

31. Commitments (continued)


CITC during 2015 for which it has provided additional Saudi Riyals 171 million (AED 167 million) during the year ended 31 December 2015 believing that to be an appropriate estimate of the amounts that it may ultimately have to pay to settle such claims.

Furthermore, subsequent to 31 December 2014, there were 166 lawsuits filed by a number of shareholders against Mobily before the Committee for the Resolutions of Security Disputes and which are currently being adjudicated by the said committee. Mobily received final verdict on 41 and preliminary judgments on 90 of these cases in its favour. Mobily management and Directors believe that the likelihood of additional material liabilities arising from these lawsuits is not probable.

In this context, the Group is aware that 24 shareholder claims have been made against the 2013/2014 members of the Board of Mobily and others, and these have been filed with the CRSD . These proceedings are in their infancy which does not at this stage allow to qualify

their legal standing or quantify the potential liability, if any, arising there under.

Further, the Group notes that the Saudi Capital Market Authority (“CMA”) has launched claims against members of the 2013/2014 Board of Mobily. These proceedings are also in their infancy which does not at this stage allow to qualify their legal standing or quantify the potential liability, if any, arising there under.

iv) The Company is required to pay the UAE Telecommunication Regulatory Authority (TRA) 1% of its revenues annually as regulatory expenses towards ICT contributions.

The cumulative difference between the amount being claimed by TRA and the amount settled by the Company is approximately around AED 1,309 million as of 31 December 2015 (2014: AED 1,008 million).

v) In the prior years, Atlantique Telecom SA, a subsidiary of the Group, has been engaged in arbitration proceedings

against SARCI Sarl (“SARCI”), a minority shareholder of one of its subsidiaries, Telecel Benin. SARCI was seeking compensation for alleged damages caused to Telecel Benin during the period from 2002 till 2007.

In November 2015, the Arbitral Tribunal has ordered Atlantique Telecom SA to pay damages to SARCI amounting to approximately EURO 413 million (AED 1.6 billion). Certain local courts have considered that this decision can be enforced and Sarci has started execution proceedings in Togo, Benin and Central African Republic, however no exequatur has been granted so far in Benin and are challenged in other jurisdictions. . Two previous arbitration proceedings on the same issue had been cancelled upon Atlantique Telecom’s request in 2008 and 2013. Atlantique Telecom has initiated legal proceedings in order to obtain the cancellation of the award of this third arbitration process and the suspension of any execution thereof. The proceedings of the case are ongoing as at end of the reporting period.

Amounts recognised as distribution to equity holders: AED’000

31 December 2014Final dividend for the year ended 31 December 2013 of AED 0.35 per share 2,765,953

Interim dividend for the year ended 31 December 2014 of AED 0.35 per share 2,765,951

5,531,904

31 December 2015Final dividend for the year ended 31 December 2014 of AED 0.35 per share 2,765,954

Interim dividend for the year ended 31 December 2015 of AED 0.40 per share 3,477,198

6,243,152

A final dividend of AED 0.35 per share was declared by the Board of Directors on 25 February 2015, bringing the total dividend to AED 0.70 per share for the year ended 31 December 2014.

An interim dividend of AED 0.40 per share was declared by the Board of Directors on 28 July 2015 for the year ended 31 Decem-ber 2015.

A final dividend of AED 0.40 per share was declared by the Board of Directors on 9 March 2016, bringing the total dividend to AED 0.80 per share for the year ended 31 December 2015.

33. Dividends

32. Contingent liabilities (continued)

c) Other contingent liabilities (continued)



20152014

(Restated)

Earnings (AED'000)

8,262,756 8,601,086

Number of shares ('000)

8,696,754 8,696,754

Earnings per share

Basic and diluted AED 0.95 AED 0.99

Earnings for the purposes of basic earnings per share being the profit attributable to the equity holders of the Company

Weighted average number of ordinary shares for the purposes of basic earnings per share

20152014

(Restated)Note AED’000 AED’000

Revenue 466,397 548,249

Operating expenses (700,929) (639,202)

Operating losses (234,532) (90,953)

Finance and other income (24,817) 10,317

Finance costs (9,190) (19,234)

Loss before tax (268,539) (99,870)

Taxation (7,821) (14,792)

(276,360) (114,662)

36 39,029 -

Loss for the year from discontinued operations (237,331) (114,662)

Gain on disposal of operation including a cumulative exchange gain reclassified from foreign translation reserve to profit or loss

The weighted average number of shares for the prior year was calculated by taking into consideration the bonus shares issued in 2015. The Group does not have potentially dilutive shares and accordingly, diluted earnings per share equals to basic earnings per share.

35. Disposal Group held for sale/ Discontinued operations

35.1 Disposal of Zanzibar Telecom Limited (‘’Zantel’’)

On 3 June 2014, the directors approved a plan to dispose of the Group’s interest in Zanzibar Telecom Limited (Zantel), one of the Group’s overseas subsidiary. The disposal is in line with the Group’s strategy to optimise its returns on investments in the international segment. Further, on 4 June 2015, the Group signed a Share Purchase Agreement with Millicom International Cellular SA (“Millicom’’) for the sale of the Group’s 85% interest in Zantel. Under the terms of the agreement, the Group will receive cash consideration of USD 1 and Millicom will assume the net liabilities in the books of Zantel. In addition,

Zantel will have up to USD 32 million in net current liabilities at closing. On 22 October 2015, the Group completed the sale of its 85% shareholdings in Zantel to Millicom after securing all regulatory approvals from the Tanzanian Communication Regulatory Authority and the Fair Competition Commission. The calculation of the profit or loss on disposal, are disclosed in note 36.

35.2 Plan to dispose one of it’s subsidiaryDuring the year, the directors approved a plan to dispose of the Group’s interest in one of it’s subsidiary. The disposal is in line with the Group’s strategy to optimise its returns on investments in

the international segment. The Group is currently in negotiation with some potential buyers.

The results of operations included in the profit for the year from discontinued operations are set out below:

35.3 Analysis of loss for the year from discontinued operations

The combined results of the discontinued operations included in the profit for the year are set out below. The comparative loss and cash flows from discontinued operations have been re-presented to include those operations classified as discontinued in the current year.

34. Earnings per share


2015 2014(Restated)

Assets classified as held for sale AED’000 AED’000

Goodwill - 44,896

Other intangible assets 73,617 74,075

Property, plant and equipment 119,221 255,245

Other investments - 3,570

Inventories 1,262 11,374

Trade and other receivables 330,861 134,682


Assets classified as held for sale 612,230 532,757

20152014

(Restated)

Liabilities classified as held for sale AED’000 AED’000

Trade and other payables 288,455 239,130

Borrowings - 263,379

Provision for end of service benefits - 2,276

Provision 2,697 -

Liabilities associated with assets classified as held for sale 291,152 504,785

Net assets classified as held for sale 321,078 27,972

2015 2014Cash flows from discontinued operations AED’000 AED’000

Net cash inflows from operating activities 49,605 24,861

Net cash outflows from investing activities (20,742) (309)

Net cash outflows from financing activities (9,909) (89,055)

Net cash inflows / (outflows) 18,954 (64,503)

Cumulative income or expense recognised in other comprehensive income - -

At 31 December 2015 the disposal group comprised the following assets and liabilities:

There are no cumulative income or expenses recognised in other comprehensive income relating to the disposal group.

35. Disposal Group held for sale/ Discontinued operations (continued)



36.1 Consideration received 2015

AED’000

Total Consideration received -

36.2 Analysis of assets and liabilities over which control was lost

2015

Assets AED’000

Goodwill 44,896

Other intangible assets 60,385

Property, plant and equipment 169,833

Other investments 2,890

Inventories 6,799

Trade and other receivables 83,542

Cash and cash equivalents 12,149

380,494

2015

Liabilities AED’000

Trade and other payables 227,973

Borrowings 211,950

Provision for end of service benefits 1,748

441,671

Net liabilities 61,177

36.3 Gain on disposal of subsidiary 2015

AED’000

Consideration received -

Other cost (69,691)

Net liabilities disposed of 61,177

Non controlling Interest (115,450)

162,993

Gain on disposal 39,029

Cumulative exchange gain in respect of the net assets of the subsidiary reclassified from equity to profit or loss on loss of control of subsidiary

On 22 October 2015, the Group disposed of Zanzibar Telecom Limited (Zantel) for a consideration of US$ 1.

36. Disposal of a Subsidiary


In February 2012, the Supreme Court of India cancelled all of Etisalat DB Telecom Private Limited’s (“Etisalat DB”) licenses, removing Etisalat DB’s ability to operate its current mobile telecommunications business. Following the cancellation, the Board of Etisalat DB resolved to shut down its telecommunications network in India and gave the appropriate notices to the Indian authorities. Furthermore, the resignation of the directors of the Etisalat DB appointed by the majority shareholders without replacement adversely affected the ability of the Etisalat DB’s Board of Directors to take decisions. Subsequently, Etisalat Mauritius Limited (which is wholly owned by the Company) filed proceedings on 12 March 2012 for the just and equitable winding up of the Etisalat DB (the Etisalat DB Petition). Etisalat DB Petition was admitted by the Company Court by its judgment dated 18 November 2013. However, the decision was appealed to the Appeal Court by one of the Company’s shareholders but dismissed by an order dated 8 April 2014. The decision of the Appeal Court was further appealed to the Supreme Court

but finally dismissed by an order dated 14 July 2014. The Company Petition was finally admitted by the Bombay High Court on 22 February 2015. The Official Liquidator has been appointed by the Bombay High Court and the reports of the Official Liquidator continue to be heard as at the end of the reporting period.

38. Restatement and reclassification of comparative figures

On 27 June 2015, Mobily (an associate of Etisalat Group) made an announcement on Saudi Stock Exchange (“Tadawul”) regarding the restatement of its financial results for 2014 and prior years. This restatement has resulted due to the change in accounting policies for the recognition of revenue from certain contracts and the change in the practice of capitalisation of property, plant and equipment and corresponding depreciation. Accordingly, the annual consolidated financial statements of Mobily for the year ended 31 December

2014 (including comparatives) were reissued to reflect the impact of such restatements, and the Group’s consolidated financial statements for the year ended 31 December 2014 have been restated.

Also, other reclassifications/adjustments were made to the prior year reported figures to conform with current year presentation.

37. Other significant event



As previously reported

Adj for a subsidiary

classified as held for sale

Mobily Restatement Others As restated

AED '000AED '000 AED '000 AED '000 AED '000

Consolidated statement of profit or loss for the year ended 31 December 2014

Revenue 48,766,875 (258,477) - - 48,508,398

Operating expenses (31,832,583) 240,583 - (113,838) (31,705,838)

Impairment and other losses (931,963) - - - (931,963)

Share of results of associates and joint ventures (461,065) -

-

(178,108) - (639,173)

Operating profit before federal royalty 15,541,264 (17,894) (178,108) (113,838) 15,231,424

Federal royalty (5,333,084) (3,117) 30,671 (5,305,530)

Operating profit 10,208,180 (17,894) (181,225) (83,167) 9,925,894

Finance and other income 2,653,494 (567) - - 2,652,927

Finance and other costs (1,736,511) 223 - - (1,736,288)

Profit before tax 11,125,163 (18,238) (181,225) (83,167) 10,842,533

Taxation (1,153,576) 14,792 8,905 (35,446) (1,165,325)

Profit for the year from continuing operations 9,971,587 (3,446) (172,320) (118,613) 9,677,208

Loss from discontinued operations (118,108) 3,446 - - (114,662)

Profit for the year 9,853,479 - (172,320) (118,613) 9,562,546


The equity holders of the Company 8,892,019 - (172,320) (118,613) 8,601,086

961,460Non-controlling interests 961,460 - - -

9,853,479 - (172,320) (118,613) 9,562,546

Investments in associates and joint ventures 5,822,453

-

(749,064)

(104,345)

4,969,044

Liabilities directly associated with the assets classified as held for sale 1,126,517 - - (621,732) 504,785Trade and other receivables 17,376,549 - - (57,970) 17,318,579Other receivables - non current 803,828 - - (563,762) 240,066Deferred tax liabilities 4,740,292 - (37,453) - 4,702,839Trade and other payables 30,988,248 - (186,726) (30,670) 30,770,852Provision 1,862,566 - - 113,838 1,976,404Non-controlling interests 18,650,688 - - (656,568) 17,994,120Reserves 26,852,704 - - 587,667 27,440,371Retained earnings 7,517,339 - (524,885) (118,613) 6,873,841


-

(570,956)

-

6,491,053

Deferred tax liabilities 1,749,839 - (28,548) - 1,721,291Trade and other payables 21,164,411 - (189,843) - 20,974,568Retained earnings 4,359,024 - (352,565) - 4,006,459

Consolidated statement offinancial position as at 31 December 2013

Consolidated statement of financial position as at 31 December 2014

38. Restatement and reclassification of comparative figures (continued)








Revenue 48,766,875 (258,477) - - 48,508,398




-

(178,108) - (639,173)


Federal royalty (5,333,084) (3,117) 30,671 (5,305,530)





Taxation (1,153,576) 14,792 8,905 (35,446) (1,165,325)







9,853,479 - (172,320) (118,613) 9,562,546


-

(749,064)

(104,345)

4,969,044



-

(570,956)

-

6,491,053










Revenue 48,766,875 (258,477) - - 48,508,398




-

(178,108) - (639,173)


Federal royalty (5,333,084) (3,117) 30,671 (5,305,530)





Taxation (1,153,576) 14,792 8,905 (35,446) (1,165,325)







9,853,479 - (172,320) (118,613) 9,562,546


-

(749,064)

(104,345)

4,969,044



-

(570,956)

-

6,491,053




38. Restatement and reclassification of comparative figures (continued)

122 Annual Report 2015

The Board of Directors of Emirates Telecommunications Group Company PJSC –Etisalat Group- has the pleasure to invite the esteemed shareholders to attend the Annual General Assembly Meeting to be held at 4:30 p.m. on Sunday 27th March 2016 at Etisalat Group’s Head Office building located at the intersection of Shiekh Zayed II Street and Sheikh Rashid bin Saeed Al Maktoum Road in Abu Dhabi, where the following meeting agenda will be discussed:

1. To hear and approve the report of the Board of Directors on the Company’s activities and its financial position for the financial year ended 31st December 2015.

2. To hear and approve the External Auditors’ report for the financial year ended 31st December 2015.

3. To discuss and approve the Company’s consolidated statements of financial position and profit & loss for the financial year ended 31st December 2015.

4. To consider the Board of Directors’ recommendations on the distribution of dividends in the amount of 40 fils per share for the second half of the year 2015, bringing the full dividend paid out for the financial year ended 31st December 2015 to 80 fils per share (80% of share nominal value).

5. To absolve the Members of the Board of Directors of liability in respect of the financial year ended 31st December 2015.

6. To absolve the External Auditors of liability in respect of the financial year ended 31st December 2015.

7. To appoint the External Auditors for the year 2016 and to determine their fees.

8. To approve the payment of the remunerations of the Members of the Board of Directors for the financial year ended 31st December 2015.

Notes:

1. Each shareholder is entitled to attend or to delegate a proxy who is not a Board Member to attend at the Annual General Assembly Meeting on his/her behalf by virtue of a written special authorization made pursuant to the delegation form attached with the invitation dispatched by mail. All delegation forms shall be submitted to the Securities Department of the National Bank of Abu Dhabi, P.O. Box 6865-Abu Dhabi, latest by 23rd March 2016. Only original delegation forms will be accepted. Proxy holders representing the shareholders who are countable in quorum of the Annual General Assembly Meeting (except for Government Shareholder) may not represent, in this capacity, more than 5% of the Company’s share capital. Minors and those who have no legal capacity shall be represented by their legal representatives.

2. Natural shareholders should submit original passport or UAE I.D or Khulasat Al Qaid. The corporate shareholders shall submit official documents issued by competent authorities to prove the identity and nationality of their owners.

3. The corporate shareholder may delegate one of its representatives or management members by virtue of a resolution passed by its Board of Directors (or whoever carries out the duties of the Board of Directors) to represent him in the General Assembly Meeting.

4. Only the holders of the Company’s shares as on Thursday, 24th March 2016 shall be entitled to vote in the Annual General Assembly Meeting.

5. Notwithstanding item 4 above and for the purposes of voting in the General Assembly, the votes of the Associated Persons (as defined in Article 1 of Etisalat’s Articles of Association “AoA”) shall be counted to the extent that they do not reach 5% of the ordinary shares represented in the meeting.

6. The restricted shares owned by foreign shareholders (categories of shareholders not mentioned in Article 7 of AoA) shall not be counted for the quorum nor shall their holders be eligible for voting or participating in the deliberations.

7. The owners of the shares as on Wednesday, 6th April 2016, shall be entitled to shares’ dividends.

8. The shareholders can review the Company’s financial statements and Governance Report on the website of Abu Dhabi Securities Exchange (ADX).

9. The convention of the General Assembly meeting shall only be valid if attended by Shareholders representing, in person or by proxy, at least 66% of the Company’s ordinary shares. If the quorum is not achieved at the first meeting, a second meeting for General Assembly should be held on Sunday, 3rd April 2016, in the same time and venue. The postponed meeting shall be considered duly held regardless of the number of attendees.

10. Attendance record shall be closed upon announcing the quorum of the meeting and no shareholder or proxy may register his attendance in the meeting, and neither his votes nor views shall be counted for in respect of the matters addressed during the meeting.

11. The Shareholders should update their own contacts and addresses at ADX.

Notice of General Shareholders Meeting

124 Annual Report 2015

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