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Emirates Telecommunications Group Company PJSC(Formerly Emirates Telecommunications Corporation)Reports and consolidated financial statements for the year ended 31 December 2015
BOARD OF DIRECTORSChairmanMr. Eissa Mohamed Ghanem Al SuwaidiVice ChairmanSheikh Ahmed Mohd Sultan Bin Suroor Al DhahiriMembersMr. Abdulfattah Sayed Mansoor SharafMr. Otaiba Khalaf Ahmed Khalaf Al OtaibaMr. Mohamed Sultan Abdulla Mohamed AlhameliMr. Abdelmonem Bin Eisa Bin Nasser AlserkalMr. Khalid Abdulwahid Hassan AlrustamaniMr. Abdulla Salem Obaid Salem Al DhaheriMr. Essa Abdulfattah Kazim Al MullaMr. Mohamed Hadi Ahmed Abdulla Al HussainiMr. Hesham Abdulla Qassim Al QassimCorporation SecretaryMr. Hasan Mohamed Hasan Ahmed Al HosaniAUDIT COMMITTEEChairmanMr. Essa Abdulfattah Kazim Al MullaMembersSheikh Ahmed Mohd Sultan Bin Suroor Al DhahiriMr. Khalid Abdulwahid Hassan AlrustamaniMr. Salem Sultan Al Dhaheri (external member)NOMINATIONS AND REMUNERATION COMMITTEEChairmanMr. Mohamed Sultan Abdulla Mohamed AlhameliMembersMr. Abdelmonem Bin Eisa Bin Nasser AlserkalMr. Abdulla Salem Obaid Salem Al DhaheriMr. Hesham Abdulla Qassim Al QassimINVESTMENT AND FINANCE COMMITTEEChairmanMr. Eissa Mohamed Ghanem Al SuwaidiMembersMr. Abdulfattah Sayed Mansoor SharafMr. Otaiba Khalaf Ahmed Khalaf Al OtaibaMr. Mohamed Hadi Ahmed Abdulla Al HussainiHEAD OFFICE:Etisalat BuildingIntersection of Zayed, The 1st Street andSheikh Rashid Bin Saeed Al Maktoum StreetP.O. Box 3838Abu DhabiTelephone: 971 2 6283333 Fax: 971 2 6317000Telex: 22135 ETCHO EMwww.etisalat.aeREGIONAL OFFICES:Abu Dhabi, Dubai, Northern Emirates
Reports and consolidated financial statements for the year ended 31 December 2015ContentsIndependent auditor's reportPages1-2Consolidated statement of profit or loss3Consolidated statement of comprehensive income4Consolidated statement of financial position5Consolidated statement of changes in equity6Consolidated statement of cash flows7Notes to the consolidated financial statements8 - 54
Emirates Telecommunications Group Company PJSCConsolidated statement of comprehensive income for the year ended 31 December 55,8301,301,869Loss on revaluation of financial assets during the year(172,162)(27,969)Reclassification adjustment relating to available-for-salefinancial assets impaired during the )7,570,2437,964,230The equity holders of the Company7,674,5087,723,284Non-controlling ofit for the yearOther comprehensive (loss) / incomeItems that will not be reclassified subsequently to profit orloss:Remeasurement of defined benefit obligations - net of taxItems that may be reclassified subsequently to profit or loss:Exchange differences arising during the yearExchange differences on translation of foreign operationsGain on hedging instruments designated in hedges of thenet assets of foreign operations22Available-for-sale financial assetsReclassification adjustment relating to available-for-salefinancial assets on disposalTotal other comprehensive lossTotal comprehensive income for the year28Attributable to:The accompanying notes on pages 8 to 54 form an integral part of these consolidated financial statements.The Independent Auditor's report is set out on pages 1 & 24
Emirates Telecommunications Group Company PJSCConsolidated statement of changes in equity for the year ended 31 December 2015Attributable to equity holders of the CompanyNotesBalance at 1 January 2014 (aspreviously reported)Effects of restatement38Balance at 1 January 2014 (asrestated)Share tal comprehensive income for theyear as restated-Other movements in equity--Transfer to reserves-18,241Acquisition of a subsidiary--Transactions with owners:Acquisition of non-controllinginterestsEquity contribution from noncontrolling interests for acquisitionof a rs' ----8,159,9448,159,944(18,241)-12--12--33--Balance at 31 December 2014 17,994,12060,214,472Balance at 1 January -Total comprehensive income for theyear-Other movements in equity--28-881,31336-(162,993)Transfer to s with owners:Disposal of a subsidiaryAcquisition of non-controllinginterestsRepayment contribution of equitycontribution to non-controllinginterests for acquisition of asubsidiary----(434)-Bonus issue of 790.614 million fullypaid shares of AED 75427,583,414Balance at 31 December 20,861)15,886,048(8,164,013)59,375,099The accompanying notes on pages 8 to 54 form an integral part of these consolidated financial statements.The Independent Auditor's report is set out on pages 1 & 26
Emirates Telecommunications Group Company PJSCConsolidated statement of cash flows for the year ended 31 December 09,834,941Depreciation10, 32015Operating profit including discontinued operationsAdjustments for:Impairment and other lossesShare of results of associates and joint venturesProvisions and allowancesOther non-cash movementsOperating profit before changes in working 5)51,816Changes in working capital:InventoriesDue from associates and joint venturesTrade and other receivablesTrade and other payablesCash generated from operationsIncome taxes paidPayment of end of service 266,300)(447,245)(706,363)20,424,92017,208,520Net cash from (acquisition) / disposal of other investments(33,792)486,928Net cash outflow on disposal of a 2,898)Net cash generated from operating activitiesCash flows from investing activitiesPurchase of property, plant and equipmentProceeds from disposal of property, plant and equipmentPurchase of other intangible assetsProceeds from disposal of other intangible assetsMovement in term deposits with maturities over three months19Dividend income received from associates and other investmentsAcquisition of Maroc Telecom, net of cash acquiredAcquisition of additional equity in subsidiaryFinance and other income received30Net cash used in investing 18,370)1,966,853(12,806,856)(25,065,305)Cash flows from financing activitiesProceeds from borrowings and finance lease 993)(1,755,522)Repayments of borrowings and finance lease obligationsEquity (repayment to)/contribution from non-controlling interests for acquisition of asubsidiaryDividends paidFinance and other costs paidNet cash (used in) / generated from financing activities(8,108,462)9,161,559Net (decrease) / increase in cash and cash equivalents(490,398)1,304,774Cash and cash equivalents at the beginning of the 52,923Effects of foreign exchange rate changesCash and cash equivalents at the end of the year19During 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 theminority shareholders in Canar and the derecognition of the spectrum in PTCL, having a non cash impact of AED 6.1 million and AED 80million respectively, which have been reflected as non-cash transactions in the consolidated statement of cash flows for the year ended 31December 2015.Certain fixed deposits having maturities greater than three months have been excluded from cash and cash equivalents and the comparativefigures have accordingly been reclassified (refer note 19).The accompanying notes on pages 8 to 54 form an integral part of these consolidated financial statements.The Independent Auditor's report is set out on pages 1 & 27
Emirates Telecommunications Group Company PJSCNotes to the consolidated financial statements for year ended 31 December 20151. General informationThe Emirates Telecommunications Group (‘’the Group’’) comprises the holding company Emirates Telecommunications GroupCompany PJSC (‘‘the Company’’), formerly known as Emirates Telecommunications Corporation (“Corporation”) and itssubsidiaries. The Corporation was incorporated in the United Arab Emirates (“UAE”), with limited liability, in 1976 by UAEFederal Government decree No. 78, which was revised by the UAE Federal Act No. (1) of 1991 and further amended byDecretal Federal Code No. 3 of 2003 concerning the regulation of the telecommunications sector in the UAE. In accordancewith Federal Law No. 267/10 for 2009, the Federal Government of the UAE transferred its 60% holding in the Corporationto the Emirates Investment Authority with effect from 1 January 2008, which is ultimately controlled by the UAE FederalGovernment.In accordance with the Decree by Federal Law no. 3 of 2015 amending certain provisions of the Federal Law No. 1 of 1991(the “New Law”) and the new articles of association of Emirates Telecommunications Group Company PJSC (the “New AoA”),Emirates Telecommunications Corporation has been converted from a corporation to a public joint stock company and madesubject to the provisions of UAE Federal Law no. 2 of 2015 on Commercial Companies (the “Companies Law”) unlessotherwise stated in the New Law or New AoA. Accordingly, the name of the corporation has been changed to EmiratesTelecommunications Group Company PJSC. The New Law introduces two new types of share, ie ordinary shares and oneSpecial Share held by the Government of the United Arab Emirates and carries certain preferential rights related to thepassing of certain decisions by the company or the ownership of the UAE telecommunication network. Under the New Law,the Company may issue different classes of shares, subject to the approval of the Special shareholder. The New Lawreduces the minimum number of ordinary shares held by any UAE government entity in the Company from owning at least60% shares in the Company’s share capital to an ownership of not less than 51%, unless the Special Shareholder decidesotherwise. Under the New Law, shareholders who are not public entities of the UAE, citizens of the UAE, or corporateentities of the UAE wholly controlled by citizens of the UAE, (which includes foreign individuals, foreign or UAE free zonecorporate entities, or corporate entities of the UAE that are not fully controlled by UAE citizens ) may own up to 20% of theCompany’s ordinary shares, however the shares owned by such persons / entities shall not hold any voting rights in theCompany’s general assembly (however, holders of such shares may attend such meeting). The Company has to undertakethe procedures required to implement and align its status with the provisions of the New Law within one year from thedate 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 theprovision 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 TelecommunicationsRegulatory Authority valid until 2025), its subsidiaries, associates and joint ventures.These consolidated financial statements were approved by the Board of Directors and authorised for issue on 9 March2016.8
Emirates Telecommunications Group Company PJSCNotes to the consolidated financial statements for year ended 31 December 20152. Significant accounting policiesThe 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 FinancialReporting Standards (“IFRS”) applicable to companies reporting under IFRS and the applicable provisions of UAE FederalLaw No. (2) of 2015. The preparation of financial statements in conformity with IFRS requires the use of certain criticalaccounting estimates. It also requires management to exercise its judgement in the process of applying the Group’saccounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions andestimates are significant to the consolidated financial statements are disclosed in note 3. The consolidated financialstatements are prepared under the historical cost convention except for the revaluation of certain financial instruments andin 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 valueis the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between marketparticipants at the measurement date, regardles
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 provision of related contracting and consultancy services to international telecommunications companies and
