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Table of contents
02
Business Snapshot
04
Chairmans Statement
06
Board of Directors
08
Our Journey
10
12
Management Team
14
18
20
Operational Highlights
22
26
Management Review
Middle East
30
Africa 38
Asia 46
Head Office:
Etisalat Building
Intersection of Zayed The 1st Street and
Sheikh Rashid Bin Saeed Al Maktoum Street
P.O. Box 3838
Abu Dhabi, UAE
Regional Offices:
Abu Dhabi, Dubai, Northern Emirates
Awards
52
Human Resorces
54
56
Corporate Governance
58
60
62
63
64
65
66
67
116
Etisalat
01
48.8
23.4
AED
Billion Revenue
169
Million
Aggregate subscribers
AED
Billion EBITDA
8.9
AED
Billion Net Profit
8.9
AED
Billion CAPEX
70
Fils
Dividend per share
10
%
Bonus share
02
03
Aspire Forward
Business Snapshot
04
Etisalat
05
Chairmans Statement
06
Etisalat
07
Board of Directors
Chairman
Investment & Finance Committee
Vice Chairman
Member-Investment & Finance Committee
Member
Audit Committee
Abdulfattah Sayed
Mansoor Sharaf
Member
Investment & Finance Committee
Member
Nomination & Remuneration
Committee
Member
Nomination & Remuneration Committee
08
Member
Chairman-Nomination &
Remuneration Committee
Member
Nomination & Remuneration Committee
Investment & Finance Committee
Member
Chairman-Audit Committee
Hasan Al Hosani
Corporate Secretary
Etisalat
09
Our Journey
1994
The Middle Easts first
GSM service is introduced
in the UAE.
Etisalat launches Emirates
Data Clearing House, now
one of the worlds leading
clearing houses providing a complete
solution to GSM operators
to provide roaming
facilities to their
customers in turn.
1999
The ownership
structure changes
with the United Arab
Emirates government
getting a 60% share
in the company and
the remaining 40% is
publicly traded.
2012
Etisalat wins 3G
license in Afghanistan
and Ivory Coast and
launches the first 3G
services in
Afghanistan.
Etisalat awarded a
license to provide
mobile services in
Afghanistan.
Etisalat Services
Holding is formed to
manage eight business
units that offer
mission-critical
telecoms related
services to the
industry.
2009
1982
1976
Etisalat completes
acquisition of 53%
shareholding in Maroc
Telecom.
Etisalat successfully
issued its inaugural bond
under its Global Medium
Term Note (GMTN)
programme listed on the
Irish Stock Exchange.
2008
Emirates
Telecommunications
Corporation launches
Middle Easts first mobile
network.
2014
2003
1996
1983
2005
2006
2000
1995
Internet services are
rolled out across the
country, another first in
the region.
2004
Etisalat wins the second
license to operate in
Saudi Arabia, introducing
Etihad Etisalat Mobily.
Etisalat buys a stake in
Canar; a fixed line
operator in Sudan.
2007
2011
Etisalat introduces 4G
(LTE) experience to its
customers in the UAE.
2013
Etisalat signed SPA with
Vivendi to acquire
Vivendis 53% stake in
Maroc Telecom Group.
Etisalat Benin obtains a
Universal Mobile
Service License.
Emirates
Telecommunication
Corporation is founded.
10
11
12
Etisalat
13
Management Team
Serkan Okandan
Abdeslam Ahizoune
Chairman of the Management Board, Maroc Telecom
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 Tlcom ParisTech.
Abdulaziz Al Sawaleh
Saeed Al Hamli
14
Saleh Al Abdooli
Rainer Rathgeber
Chief Commercial Officer, Etisalat Group
Rainer Rathgeber was appointed as Chief Commercial Officer of EG in January 2013. Prior
to joining Etisalat, he was Senior Vice President of Marketing in Europe of the OTE Group.
Mr. Rathgeber joined Deutsche Telekom in 2002 as Head of Strategy for T-Mobile Germany,
and Executive Vice President of Sales and Service Strategy for T-Mobile International. He
then went on to serve in various positions including Executive Vice President of Market
Management for T-Mobile International, CEO of T-Mobile Croatia and Member of the
Executive Management Committee of T-Mobile International. Mr. Rathgeber is a board
member of Etisalat Nigeria, PTCL and Ufone. Mr. Rathgeber holds a Diplom-Kaufmann
Degree in Economics.
Etisalat
15
Management Team
Khalifa Al Shamsi
Hatem Bamatraf
Obaid Bokisha
Chief Procurement Officer, Etisalat Group
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 & Intl Support of Etisalat
UAE and Senior Vice President Mobile Networks Optimization EG.Mr. Bokisha serves on
the board of Canar, Zantel and Etisalat Nigeria. Mr. Bokisha has a degree in Communications
Engineering from the Etisalat College of Engineering.
16
Javier Garcia
Chief Internal Auditor, 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 Bachelors in
Economics and a Masters in Financial Markets from the Autonomous University of Madrid.
John Wilkes
Chief Internal Control Officer, Etisalat Group
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.
Etisalat
17
Vision, Mission
and Strategic Pillars
Vision
Mission
Strategic
Pillars
18
One
Company
People
& culture
Operational
Excellence
Portfolio
Customer
Experience
Service
offering
Etisalat
19
April 2014
October 2014
May 2014
June 2014
US$ 7 billion Global Medium Term Note
Programme
Etisalat lists its US$ 7 billion GMTN on the Irish
Stock Exchange and issues 4 bond tranches
consisting of: 5-year tranche (US$ 500 million),
7-year tranche ( 1.2 billion), 10-year tranche
(US$ 500 million) and 12-year tranche ( 1.2
billion). This bond issue is the biggest corporate
issue ever in the region.
20
December 2014
Etisalat Group CEO elected as GSMA
Deputy Chair
August 2014
Etisalat Nigeria and IHS sign tower sale
& lease back agreement
Etisalat Nigeria signs sales and leaseback
agreement with IHS Holding Limited as part of
its strategy to drive improvement in the quality
of network performance and to accelerate roll
out of 2G and 3G coverage and new services to
its customers. The transaction is the first by a
major GSM operator in Nigeria.
Etisalat
21
Operational Highlights
EBITDA
Subscribers
169
148
23.4
18.9
Revenues
38
.9
on
b il li
.8
8
4
on
illi
Revenues
(AED Bn)
22
7.1
90
2013
8.9
112
2014
Etisalat
23
Operational Highlights
CAPEX
8.9
6.3
(AED m)
FY13
FY14
Revenue
38,564
48,767
EBITDA
18,901
23,365
EBITDA Margin
49%
48%
Federal Royalty
6,115
5,333
Net Profit
7,078
8,892
18%
18%
FY13
FY14
15,450
18,543
Total Assets
85,716
129,585
Total Debt
5,872
22,229
Net Cash
9,579
(3,686)
49,593
60,927
DEBT
22.2
5.9
24
Total Equity
Etisalat Afghanistan (AED 1.5 billion)
Atlantique Telecom (AED 1.4 billion)
(AED m)
FY13
FY14
Operating
12,974
17,209
Investing
(4,854)
(24,102)
Financing
(6,585)
9,162
1,535
2,268
(19)
834
15,450
18,552
Etisalat
25
Etisalat Groups
Footprint
Afghanistan
Morocco
Pakistan
Egypt
Mauritania
Mali
Niger
Saudi Arabia
United
Arab
Emirates
Sudan
Burkina Faso
Nigeria
Sri Lanka
Central
Africa
Cote Divoire
Togo
Benin
Gabon
Tanzania
26
Regions
Middle East
Operator
Country
Etisalat
United Arab Emirates
Etisalat
Nigeria
PTCL/Ufone
Pakistan
Etisalat
Sri Lanka
Licence Type:
Etisalat Ownership
Population: (million)
Penetration
Number of operators
Network Coverage, population
Mobile
40%
174
72%
Mobile 5
82%
Mobile
100%
66
74%
Mobile 2-6 per country
59%
Mobile
100%
21
126%
Mobile 5
98%
Operator
Country
Etisalat Misr
Egypt
Thuraya
Zantel
Tanzania
Canar
Sudan
Etisalat
Afghanistan
Licence Type:
Etisalat Ownership
Population: (million)
Penetration
Number of operators
Network Coverage, population
Satellite Telecommunication
28%
Fixed
90%
34
1%
Fixed 2
31%
Mobile
100%
31
80%
Mobile 4
78%
Africa
Satellite 4
140 countries
Asia
Etisalat
27
Middle East
Middle East
Etisalat UAE
Management Review
30
allowance.
Introduction of new 3GB
and 10GB tiers, were key developments
in supporting a strong revenue growth
and contributing to a better customer
experience by avoiding bill shock issues.
Business DataShare was launched for the
first time in the region, allowing business
users to share one pool of data with multiple
users and stay online and connected while
in the office or on the go.
Also fundamental to mobile data growth,
was the significant expansion of Etisalat
UAEs smart devices portfolio and the
launch of affordable smartphones to
incentivise migration to 3G. By offering
smartphones and tablets from all major
vendors and mobile operating systems,
Etisalat has reaffirmed its position as the
operator of choice for smart devices.
Etisalat has had strong revenue growth
in its fixed business in 2014, validating
the strategic investment in FTTH and
reconfirming Etisalat global leadership
in fibre adoption. With the revamping of
eLife packages with an increased focus
on content segmentation, competitive
pricing and the expansion of the eLife
ON multiscreen service, there has been a
strong adoption of eLife packages with
more than 16% increase in customers.
Additionally, the launch of Smart Home
solutions and online gaming has cemented
Etisalats position as the key enabler of
home entertainment and automation in
the UAE.
The IPTV Customer base is now close to half
a million customers, and the OTT Customer
base increased by 205,000 with 17 new
E-Hospitality Bulk IPTV customers. In
addition the IPTV platform was upgraded
to support new features and applications
Etisalat
31
Middle East
Mobily
Middle East
Etisalat Egypt
32
Management Review
Etisalat
33
Middle East
Thuraya
Management Review
34
Etisalat
35
Etisalat Services
Holding (ESH)
Management Review
36
E-MARINE
E-marine is the trusted principal provider
of submarine cable solutions in the Middle
East and Asia Subcontinent.
E-Marine entered the offshore energy
market in 2014 and invested in Vessel CS
SAMA, to be commissioned soon. Handover
of another vessel is expected in early 2015,
in a bid to enhance our market share and
service quality.
In response to the increase in customer
demand for spare storage, we have
expanded our storage facilities in Salalah,
Oman and the Hamriyah Free Zone, UAE.
This will give E-Marine an edge to become
the preferred choice for our customers in
the region.
TAMDEED PROJECTS
Tamdeed Projects is the UAE leader in
the field of mega Fiber to the Home and
outside plant projects covering network
consultancy; design, and deployment.
Tamdeed also offers service provisioning;
inside plant projects implementation; inbuilding solutions, and end-to-end turnkey
solutions.
In 2014, we again were the recipient of
multiple awards for business excellence namely The Peak of Success under the
category of Display of Business Excellence
and we were internationally recognised by
bodies such as the World Confederation of
Businesses.
Tamdeed
introduced
several
new
initiatives, including turnkey offerings
to target new customers in the external
market. We also introduced the Annual
Maintenance Contract to UAE customers,
thereby enabling more value added
services. Tamdeed plans to cross-sell more
capabilities to strengthen relationships
Etisalat
37
Africa
Africa
Maroc Telecom Group
Management Review
40
PANTONE 3005 PC
C = 100
M = 34
J =0
N =2
PANTONE 1505 EC
C =0
M = 61
J = 92
N =0
Etisalat
41
Africa
Etisalat Nigeria
Africa
Atlantique Telecom
42
Management Review
Etisalat
43
Africa
Zantel
Africa
Canar
44
Management Review
Etisalat
45
Asia
Asia
PTCL Pakistan
Asia
Ufone Pakistan
48
Management Review
Etisalat
49
Asia
Etisalat Sri Lanka
Asia
Etisalat Afghanistan
50
Management Review
Etisalat
51
Awards
Marketing and Customer Care
2012
2013
2014
TeknoTel Awards
Best Customer Care
Corporate
2012
2013
2014
CommsMEA
Best Overall Operator of the Year
Managemant
52
2012
2013
2014
Arabian Business
CEO of the Year
Etisalat
53
Human Resources
Management Review
54
Etisalat
55
Corporate Social
Responsibility
Management Review
56
Etisalat
57
Corporate
Governance
58
Etisalat
59
Financials
Independent Auditors Report to the Shareholders
60
Etisalat
61
Financials
Emirates Telecommunications Corporation
Consolidated statement of profit or loss for the year ended 31 December 2014
Consolidated statement of comprehensive income for the year ended 31 December 2014
Notes
2014
AED000
2013
AED000
Continuing operations
Revenue
48,766,875
38,564,181
Operating expenses
(31,832,583)
(24,397,205)
(931,963)
(1,374,176)
13
(461,065)
1,754,341
15,541,264
14,547,141
(5,333,084)
(6,115,016)
10,208,180
8,432,125
Operating profit
Finance and other income
2,653,494
468,558
(1,736,511)
(437,572)
11,125,163
8,463,111
(1,153,576)
(648,647)
9,971,587
7,814,464
(118,108)
(63,516)
9,853,479
7,750,948
36
Non-controlling interests
8,892,019
7,078,388
961,460
672,560
9,853,479
7,750,948
AED 1.12
AED 0.90
2013
AED000
9,853,479
7,750,948
(141,593)
(126,618)
(2,376,730)
(1,969,056)
1,301,869
(27,969)
(138,909)
264,310
(284,991)
(1,529,414)
(1,970,273)
8,324,065
5,780,675
7,426,551
6,063,592
897,514
(282,917)
8,324,065
5,780,675
22
29
Attributable to:
The equity holders of the Corporation
35
2014
AED000
Notes
Non-controlling interests
______________________ ________________________
Chairman
The accompanying notes on pages 67 to 115 form an integral part of these consolidated financial statements.
The Independent Auditors report is set out on page 1.
62
Board Member
The accompanying notes on pages 67 to 115 form an integral part of these consolidated financial statements.
The Independent Auditors report is set out on page 1.
Etisalat
63
Financials
Emirates Telecommunications Corporation
Consolidated statement of changes in equity for the year ended 31 December 2014
Notes
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Investment property
Investments in associates and joint ventures
Other investments
Other receivables
Derivative financial instruments
Loans to related party
Deferred tax assets
9
9
10
11
14
15
18
22
16
8
2014
AED000
2013
AED000
15,690,382
19,094,776
45,972,612
41,378
5,822,453
983,997
803,828
293,584
2,390,194
317,383
91,410,587
5,552,266
9,447,281
31,319,161
41,211
7,062,009
866,984
595,981
2,390,194
243,042
57,518,129
Current assets
Inventories
Trade and other receivables
Current income tax assets
Due from associates and joint ventures
Other investments held for sale
Cash and cash equivalents
17
18
8
16
15
19
624,652
17,376,549
637,299
459,855
18,542,859
37,641,214
498,232
10,613,248
503,396
683,833
448,448
15,450,248
28,197,405
36
532,757
129,584,558
85,715,534
1,075,480
18,619,459
936,699
4,740,292
17,283
126,736
2,044,540
27,560,489
828,565
4,467,122
68,751
1,749,839
2,460
201,089
1,911,773
9,229,599
Total assets
Non-current liabilities
Other payables
Borrowings
Payables related to investments and licenses
Deferred tax liabilities
Finance lease obligations
Provisions
Provision for end of service benefits
20
21
23
8
24
25
27
Current liabilities
Trade and other payables
Borrowings
Payables related to investments and licenses
Current income tax liabilities
Finance lease obligations
Provisions
20
21
23
8
24
25
30,988,248
3,609,711
3,133,794
369,379
6,983
1,862,566
39,970,681
21,164,411
1,404,543
2,963,623
185,812
2,564
1,172,286
26,893,239
Liabilities directly associated with the assets classified as held for sale
36
1,126,517
68,657,687
60,926,871
36,122,838
49,592,696
7,906,140
26,852,704
7,517,339
42,276,183
18,650,688
60,926,871
7,906,140
28,266,980
4,359,024
40,532,144
9,060,552
49,592,696
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained earnings
Equity attributable to the equity holders of the Corporation
Non-controlling interests
Total equity
______________________
Chairman
The accompanying notes on pages 67 to 115 form an integral part of these consolidated financial statements.
The Independent Auditors report is set out on page 1.
64
28
29
12
Reserves
Retained
earnings
Owners
equity
Noncontrolling
interests
Total
equity
AED000
AED000
AED000
AED000
AED000
AED000
7,906,140
29,115,839
3,492,333
40,514,312
9,398,260
49,912,572
(985,167)
7,048,759
6,063,592
(282,917)
5,780,675
29
136,308
(136,308)
12
284,220
284,220
87,233
371,453
Acquisition of non-controlling
interests
12
(7,804)
(7,804)
(5,782)
(13,586)
12
16,835
16,835
Dividends
34
(6,322,176)
(6,322,176)
(153,077)
(6,475,253)
7,906,140
28,266,980
4,359,024
40,532,144
9,060,552
49,592,696
7,906,140
28,266,980
4,359,024
40,532,144
9,060,552
49,592,696
(1,432,516)
8,859,068
7,426,552
897,514
8,324,066
325
325
362
687
Notes
Balance at 1 January 2013
Total comprehensive income for
the year
Transfer to reserves
Share
capital
Transfer to reserves
29
18,240
(18,240)
Acquisition of a subsidiary
30
8,159,944
8,159,944
Acquisition of non-controlling
interests
12
(150,933)
(150,933)
132,563
(18,370)
12
1,791,831
1,791,831
Dividends
34
(5,531,905)
(5,531,905)
(1,392,078)
(6,923,983)
7,906,140
26,852,704
7,517,339
42,276,183
18,650,688
60,926,871
_______________________
Board Member
The accompanying notes on pages 67 to 115 form an integral part of these consolidated financial statements.
The Independent Auditors report is set out on page 1.
Etisalat
65
Financials
Emirates Telecommunications Corporation
Consolidated statement of cash flows for the year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
2014
AED000
2013
AED000
10,099,333
8,418,003
5,163,502
1,694,716
931,963
461,065
965,915
(21,694)
3,798,455
809,093
1,374,176
(1,754,341)
300,806
-
19,294,800
12,946,192
51,816
223,979
(2,560,724)
3,171,317
(75,475)
(175,392)
210,436
995,923
20,181,188
(2,266,300)
(706,363)
13,901,684
(490,317)
(437,806)
17,208,525
12,973,561
486,928
(6,874,794)
239,141
(2,038,764)
25
797,559
(18,660,985)
(18,370)
1,966,853
(71,038)
40,000
(5,567,248)
73,586
(766,638)
1,010,169
427,682
(24,102,407)
(4,853,487)
Notes
Operating profit
Adjustments for:
Depreciation
Amortisation
Impairment and other losses
Share of results of associates and joint ventures
Provisions and allowances
Other non-cash movements
10, 11
9
9,10
13
27
14
30
19
34,636,255
(18,608,720)
1,813,528
(6,923,983)
(1,755,522)
3,491,716
(3,142,979)
(6,475,253)
(458,607)
9,161,558
(6,585,123)
2,267,676
15,450,248
833,849
18,551,773
1,534,951
13,934,076
(18,779)
1. General information
The
Emirates
Telecommunications
Corporation
Group
(the
Group)
comprises the holding company Emirates
Telecommunications Corporation (the
Corporation) and its subsidiaries. The
Corporation was incorporated in the United
Arab Emirates (UAE), with limited liability;
in 1976 by UAE Federal Government 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
Basis of preparation
15,450,248
The accompanying notes on pages 67 to 115 form an integral part of these consolidated financial statements.
The Independent Auditors report is set out on page 1.
66
Etisalat
67
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 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)
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2017
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 entitys separate financial statements
1 July 2016
Business combinations
Amendments resulting from September 2014 Annual Improvements to IFRS 5 Non-current Assets
Held for Sale and Discontinued Operations, IFRS 7 Financial Instruments: Disclosures, IAS 19 Employee
Benefits and IAS 34 Interim Financial Reporting
1 July 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
Annual Improvements 2010-2012 Cycle, IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16 and 38 and IAS 24
1 July 2014
1 July 2014
1 July 2014
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 and IFRS 9
financial Instruments 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 consolidation
These consolidated financial statements
68
Intercompany
transactions,
balances
and any unrealised gains/losses between
Group entities have been eliminated in the
consolidated financial statements.
Etisalat
69
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
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
Groups 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 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
70
Foreign currencies
i) Functional currencies
Borrowing costs
Borrowing 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.
Etisalat
71
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
Taxation (Continued)
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.
Years
20
10
15
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
57
Subscribers apparatus
35
General plant
27
Other assets:
Motor vehicles
Computers
Goodwill
arising
on
consolidation
represents the excess of the cost of an
acquisition over the fair value of the
Groups 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.
4-6
The assets residual values and useful lives are reviewed and adjusted, if appropriate, at the end of the reporting period.
72
Etisalat
73
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
74
Etisalat
75
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
76
Dividends
Etisalat
77
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
International
4. Segmental information
Information regarding the Groups
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 Groups 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 Groups
revenues, profits and assets relate to its
operations in the UAE. Outside of the UAE,
the Group operates through its subsidiaries
and associates in nineteen 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
Group 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 Groups Board of Directors
(Board of Directors) for the purposes
of resource allocation and assessment of
segment performance.
The Groups share of results from associates
and joint ventures has been allocated to
been
31 December 2014
Revenue
External sales
Inter-segment sales
Total revenue
Segment result
Federal royalty
Finance and other income
Finance and other costs
Profit before tax
Taxation
Profit for the year from
continuing operations
Total assets
Depreciation and amortisation
Impairment
Additions to non-current assets
31 December 2013
Revenue
External sales
Inter-segment sales
Total revenue
Segment result
Federal royalty
Finance and other income
Finance and other costs
Profit before tax
Taxation
Profit for the period
Total assets
Depreciation and amortisation
Impairment
Additions to non-current assets
UAE
AED000
Morocco
AED000
Egypt
AED000
Pakistan
AED000
Others
AED000
Eliminations
AED000
Consolidated
AED000
27,807,689
454,367
28,262,056
13,234,681
6,061,090
38,089
6,099,179
2,114,237
4,814,366
29,983
4,844,349
834,616
4,436,395
282,143
4,718,538
126,922
5,647,335
175,469
5,822,804
(769,192)
(980,051)
(980,051)
-
48,766,875
48,766,875
15,541,264
(5,333,084)
2,653,494
(1,736,511)
11,125,163
(1,153,576)
9,971,587
54,041,272
1,767,218
2,598,158
34,685,813
2,254,830
1,631,061
13,907,277
926,980
1,028,923
20,868,347
1,079,446
2,965,269
17,022,290
829,744
931,963
690,147
(10,940,441)
-
129,584,558
6,858,218
931,963
8,913,558
25,453,493
510,041
25,963,534
11,543,769
4,715,665
25,855
4,741,520
581,998
4,425,863
335,065
4,760,928
697,448
3,969,160
107,661
4,076,821
1,723,926
(978,622)
(978,622)
-
48,787,000
1,889,102
2,063,453
13,766,144
992,416
1,228,969
18,117,964
967,020
16,293
1,391,760
16,717,794
759,010
1,357,883
1,649,704
(11,673,368)
-
38,564,181
38,564,181
14,547,141
(6,115,016)
468,558
(437,572)
8,463,111
(648,647)
7,814,464
85,715,534
4,607,548
1,374,176
6,333,886
2014
AED million
2013
AED million
23,741
4,521
28,262
22,758
3,206
25,964
2014
AED million
2013
AED million
540,328
6,818
384,817
931,963
43,063
40,620
4,325
515,875
264,309
505,984
1,374,176
Impairment detail
of which relating to goodwill
of which relating to property, plant and equipment (Note 10)
of which relating to other financial assets
of which relating to loans to related party
of which relating to available-for-sale financial assets (quoted equity instruments) (Note 29)
of which other losses
There are no comparative amounts disclosed for Morocco segment as Maroc Telecom was acquired during the period. The comparative
figures for total assets for 2013 have been reclassified to conform with current periods presentation.
78
Etisalat
79
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
2014
AED000
2013
AED000
10,453,322
8,613,096
6,156,004
5,095,467
5,111,162
2014
AED000
2013
AED000
431,990
293,569
662,292
96,091
3,732,211
620,964
2,813,011
2,136,261
Unwinding of discount
21,265
47,912
Amortisation (Note 9)
1,685,022
807,181
1,736,511
437,572
Marketing expenses
1,278,317
876,933
1,763,011
461,898
Regulatory expenses
721,214
661,795
(26,500)
(24,326)
120,443
255,373
1,736,511
437,572
(365,664)
193,450
3,859,752
2,025,438
31,832,583
24,397,205
b) Federal Royalty
In accordance with the Cabinet decision No.
558/1 for the year 1991, the Corporation
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 Etisalat.
Under the new mechanism a distinction
is made between revenue earned from
services regulated by Telecommunications
Regulatory Authority (TRA) and nonregulated services as well as between
foreign and local profits.
Other income
80
2014
AED000
2013
AED000
1,506,816
496,907
(353,240)
151,740
1,153,576
648,647
a) Current tax
Corporate income tax is not levied in the
UAE for telecommunication companies and
2013
AED000
388,899
315,416
2,264,595
153,142
2,653,494
468,558
8. Taxation
2013
AED000
11,125,163
8,463,111
1,506,816
496,907
1,506,816
496,907
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
Etisalat
81
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
8. Taxation (continued)
2014
AED000
2013
AED000
317,383
243,042
(4,740,292)
(1,749,839)
(4,422,909)
(1,506,797)
Goodwill
AED000
Other intangible
assets
AED000
Total
AED000
7,507,405
16,024,057
23,531,462
766,638
766,638
(332,498)
(944,227)
(1,276,725)
7,174,907
15,846,468
23,021,375
1,578,318
5,797,949
7,376,267
809,093
809,093
43,063
43,063
1,260
(207,855)
(206,595)
1,622,641
6,399,187
8,021,828
5,552,266
9,447,281
14,999,547
7,174,907
15,846,468
23,021,375
2,038,764
2,038,764
11,761,694
10,729,232
22,490,926
(44,896)
(114,539)
(159,435)
(25,660)
(25,660)
(1,047,116)
(2,054,310)
(3,101,426)
17,844,589
26,419,955
44,264,544
1,622,641
6,399,187
8,021,828
1,694,716
1,694,716
540,328
540,328
(40,464)
(40,464)
Disposals
(25,635)
(25,635)
(8,762)
(702,625)
(711,387)
2,154,207
7,325,179
9,479,386
15,690,382
19,094,776
34,785,158
Cost
At 1 January 2013
Additions
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
At 1 January 2013
(Credit)/charge to the consolidated statement of profit or loss
Accelerated tax
depreciation
AED000
Deferred tax on
overseas earnings
AED000
Others
AED000
Total
AED000
1,976,983
159,582
41,194
2,177,759
6,121
21,661
(6,223)
21,559
(53)
(53)
(173,723)
14,838
(158,885)
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
85,296
(381,403)
(296,107)
1,964,827
158,361
3,104,470
5,227,658
Tax losses
AED000
Others
AED000
Total
AED000
At 1 January 2013
167,821
331,522
146,970
646,313
(44,107)
(73,906)
(12,168)
(130,181)
62,913
2,407
165
65,485
(13,160)
(25,566)
(9,308)
(48,034)
173,467
234,457
125,659
533,583
1,262
66,869
79,572
147,703
74,497
1,572
76,069
46,955
46,955
8,596
(7,860)
(298)
438
257,822
293,466
253,461
804,749
2014
AED million
2013
AED million
1,554
1,642
1,272
1,153
251
489
30
71
Exchange differences
At 31 December 2013
(Credit)/charge to the consolidated statement of profit or loss
(Credit)/charge to other comprehensive income
Acquisition of Maroc Telecom (Note 30)
Exchange differences
At 31 December 2014
Unused tax losses
of which no deferred tax asset recognised, due to unpredictability of future taxable profit streams
of the unrecognized tax losses, losses that will expire in the next three years are
82
At 31 December 2013
Retirement benefit
obligations
AED000
Exchange differences
Exchange differences
At 31 December 2014
Carrying amount
At 31 December 2014
Etisalat
83
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
2014
AED000
2013
AED000
14,066,257
8,046,956
IRU
564,917
387,804
Computer software
Licenses
Maroc Telecom
2014
AED000
2013
AED000
9,246,613
1,291,211
4,252,905
4,055,239
890,352
231,933
Customer relationships
1,099,868
405,005
667,224
1,218,897
Trade names
2,155,596
221,206
26,306
27,111
317,786
154,377
44,896
19,094,776
9,447,281
206,123
206,123
15,690,382
5,552,266
Others
2013
AED000
16,293
16,293
923,339
71,715
540,328
43,063
24,327
383,011
4,325
8,624
1,286,168
515,875
of which relating to available-for-sale financial assets (quoted equity instruments) (Note 29)
264,309
6,818
1,806
505,984
931,963
1,374,176
Others
84
Etisalat
85
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
Plant and
equipment
AED000
Motor vehicles,
computer, furniture
AED000
Assets under
construction
AED000
Total
AED000
8,566,580
44,833,427
3,421,778
6,073,394
62,895,179
Additions
17,576
1,178,689
104,735
4,263,687
5,564,687
Transfers
187,069
4,007,140
1,052,034
(5,246,243)
Disposals
(239)
(158,289)
(29,351)
(44,430)
(232,309)
(393,731)
(1,609,659)
(180,586)
(111,091)
(2,295,067)
8,377,255
48,251,308
4,368,610
4,935,317
65,932,490
2,597,893
26,761,597
2,435,245
59,767
31,854,502
109,735
2,962,777
722,912
3,795,424
Cost
At 1 January 2013
Exchange differences
At 31 December 2013
40,620
40,620
(27)
(134,902)
(23,791)
(158,720)
(20,264)
(799,800)
(98,433)
(918,497)
2,687,337
28,830,292
3,035,933
59,767
34,613,329
5,689,918
19,421,016
1,332,677
4,875,550
31,319,161
Carrying amount
At 31 December 2013
At 1 January 2014
8,377,255
48,251,308
4,368,610
4,935,317
65,932,490
195,113
1,267,828
118,640
5,290,561
6,872,142
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)
Additions
Acquisition of Maroc Telecom (Note 30)
(14,032)
(499,415)
(55,271)
(78,138)
(646,856)
(241,164)
(3,046,779)
(276,947)
(79,127)
(3,644,017)
10,468,956
62,151,131
5,152,257
4,578,421
82,350,766
2,687,337
28,830,292
3,035,933
59,767
34,613,329
186,961
4,195,564
778,490
5,161,015
6,818
6,818
(63,626)
(607,979)
(139,206)
(810,811)
(11,850)
(328,525)
(51,236)
(391,611)
(227,978)
(1,748,506)
(224,102)
(2,200,586)
2,570,844
30,340,846
3,406,697
59,767
36,378,154
7,898,112
31,810,285
1,745,559
4,518,654
45,972,612
2013
AED000
56,771
54,210
2,654
2,561
59,425
56,771
15,560
12,529
2,487
3,031
At 31 December
18,047
15,560
41,378
41,211
70,450
65,842
Cost
At 1 January
Additions
At 31 December
Depreciation
At 1 January
Additions
Cost
2014
2013
AED million
AED million
10.9
12.0
1.3
1.0
Carrying amount
At 31 December 2014
86
Etisalat
87
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
12. Subsidiaries
Country of
incorporation
Principal activity
UAE
Name
2014
2013
Telecommunications services
100%
100%
UAE
100%
100%
UAE
90%
90%
E-Marine PJSC
UAE
100%
100%
UAE
Infrastructure services
100%
100%
India
Technology solutions
100%
100%
Tanzania
Telecommunications services
85%
65%
Republic of
Sudan
Telecommunications services
90%
90%
UAE
100%
100%
Etisalat Afghanistan
Afghanistan
Telecommunications services
100%
100%
Egypt
Telecommunications services
66%
66%
Cote dIvoire
Telecommunications services
100%
100%
Etisalat Benin
Benin
Telecommunications services
100%
100%
Sri Lanka
Telecommunications services
100%
100%
Pakistan
Telecommunications services
23%
23%
UAE
91.3%
0%
Kingdom of
Morocco
100%
Kingdom of
Morocco
Telecommunications services
48%
Mauritius
100%
100%
88
Information relating to subsidiaries that have non-controlling interests that are material to the group are provided below:
Maroc Telecom
PTCL
Etisalat Misr
51.6%
76.6%
34%
828,140
88,622
162,138
Dividends
(1,215,766)
(291,237)
3,839,633
4,977,393
2,716,757
4,270,395
2,761,353
1,561,629
Non-current assets
16,968,960
11,066,726
12,345,648
Current liabilities
10,082,959
2,849,027
4,177,413
3,714,540
4,481,150
1,581,349
AED000
2014
Non-current liabilities
AED000
2013
n/a*
76.6%
34%
Profit
n/a*
618,382
95,504
n/a*
(265,036)
(134,873)
Dividends
n/a*
(141,106)
n/a*
4,820,564
2,635,964
Current assets
n/a*
2,546,468
1,093,194
Non-current assets
n/a*
8,578,638
12,672,950
Current liabilities
n/a*
2,051,623
3,675,356
Non-current liabilities
n/a*
2,780,319
2,169,319
Etisalat
89
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
Name
Country of
incorporation
Principal activity
Percentage
shareholding
Saudi Arabia
Telecommunications services
27%
2014
AED000
2013
AED000
9,060,552
9,398,260
UAE
28%
961,461
672,560
Nigeria
Telecommunications services
40%
(108,642)
(96,989)
37,759
(859,520)
6,936
1,032
362
8,159,944
87,233
132,563
(5,782)
1,791,831
16,835
(1,392,078)
(153,077)
18,650,688
9,060,552
As at 1 January
Total comprehensive income:
Profit for the year
Remeasurement of defined benefit obligations - net of tax
All Associates
2014
AED000
2013
AED000
2014
AED000
2013
AED000
6,795,949
5,961,612
7,001,701
6,231,988
(445,846)
1,807,648
(473,001)
1,743,379
40
(356)
(776,531)
(973,311)
(776,531)
(973,311)
5,573,572
6,795,949
5,752,209
7,001,701
Other movements
Dividends
Carrying amount at 31 December
All Associates
2014
AED000
2013
AED000
(473,001)
1,743,379
11,936
10,962
(461,065)
1,754,341
2014
AED000
2013
AED000
2014
AED000
Current assets
12,262,830
14,383,036
13,134,348
15,204,318
Non-current assets
34,220,161
31,102,917
41,015,802
38,766,386
(27,276,983)
(12,285,770)
(31,272,340)
(14,638,751)
(195,663)
(10,455,078)
(15,724,817)
(25,117,047)
19,010,346
22,745,106
7,152,993
14,214,906
Current liabilities
Non-current liabilities
Net assets
Revenue
15,422,108
18,911,033
20,284,080
22,758,961
(Loss) / Profit
(894,481)
5,853,620
(6,008,153)
1,205,629
(894,481)
5,853,620
(6,008,153)
1,205,629
776,531
973,311
776,531
973,311
Dividends received
90
2013
AED000
2014
AED000
2013
AED000
9,082,335
17,654,107
Etisalat
91
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
e) Joint ventures
Other investments comprise of the following, all of which are classified as available-for-sale, with the exception of the Sukuk, which are
classified as held-to-maturity investments.
Name
Country of
incorporation
Principal activity
Percentage
shareholding
UAE
50%
UAE
ICT Services
50%
2014
AED000
2013
AED000
60,309
93,347
11,936
10,962
(40,000)
(2,000)
(4,000)
70,245
60,309
2013
AED000
165,252
93,176
83,112
77,549
Current liabilities
(107,877)
(50,107)
Net assets
140,487
120,618
157,277
99,282
27,157
21,924
Current assets
Non-current assets
Revenue
Profit or loss
The Group has not identified any contingent liabilities or capital commitments in relation to its interest in joint ventures.
Fair value
through Profit
and loss
AED000
Quoted equity
investments
AED000
Un-quoted
equity
investments
AED000
Sukuks
AED000
Total
AED000
At 1 January 2013
1,213,264
92,707
145,524
1,451,495
Additions
19,117
53,495
72,612
(65,286)
(65,286)
Investment revaluation
(138,909)
(138,909)
Sukuk redemption
(1,856)
(1,856)
Unwinding of discount
(1,578)
(1,578)
Exchange differences
(1,046)
(1,046)
At 31 December 2013
1,074,355
45,492
195,585
1,315,432
937
44,595
29,529
75,061
49,271
46,562
33,509
129,342
Disposal
(453,731)
(561)
(454,292)
Investment revaluation
(56,588)
(56,588)
Impairment
(3,061)
(3,061)
(3,570)
(3,570)
(5,583)
(7,158)
(1,992)
(3,594)
(18,327)
44,625
648,035
99,346
191,991
983,997
Additions
Acquisition of Maroc Telecom (Note 30)
Exchange differences
At 31 December 2014
92
Etisalat
93
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
2013
AED000
12,069,550
6,623,754
(4,333,450)
(1,550,560)
7,736,100
5,073,194
5,310,370
2,984,878
Joint Ventures
2014
AED millions
2013
AED millions
2014
AED millions
2013
AED millions
136.8
123.0
99.6
105.0
Prepayments
666,822
506,203
272.9
234.5
7.3
Accrued income
954,840
499,734
451.5
670.2
8.4
13.6
Other receivables
3,512,245
2,145,220
At 31 December
18,180,377
11,209,229
18,180,377
11,209,229
17,376,549
10,613,248
803,828
595,981
2014
AED000
2013
AED000
8,905,884
4,640,536
622,006
538,219
Trading transactions
Telecommunication services sales
Telecommunication services purchases
Short-term benefits
17. Inventories
2,390.2
2,390.2
The Groups normal credit terms ranges between 30 and 120 days (2013: 30 and 120 days).
Ageing of net trade receivables, including amounts due from other telecommunication operators/
carriers
Upto 60 days
90-365 days
1,492,935
1,400,590
2,025,645
1,478,727
13,046,470
8,058,072
2014
AED000
2013
AED000
1,550,560
1,555,738
109,513
(5,178)
2,687,329
(13,952)
4,333,450
1,550,560
2014
AED000
2013
AED000
17,272
35,141
61-90 days
2013
AED000
Subscriber equipment
400,464
263,536
224,188
234,696
624,652
498,232
2014
AED000
94
At 31 December
Etisalat
95
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
Maintained locally
Maintained overseas, unrestricted in use
Maintained overseas, restricted in use
Cash and cash equivalents
Reclassified as held for sale (Note 36)
Cash and cash equivalents from continued operations
2014
AED000
2013
AED000
15,924,323
13,834,412
2,335,947
1,448,825
291,504
167,011
18,551,774
15,450,248
(8,915)
18,542,859
15,450,248
21. Borrowings
The carrying value of the Groups bank and other borrowings a re as follows:
Fair Value
Carrying Value
2014
AED000
2013
AED000
2014
AED000
2013
AED000
Bank overdrafts
2,416,452
105,895
2,416,452
105,895
Bank loans
4,966,465
4,579,854
4,909,289
4,576,106
14,901,901
14,164,803
52,705
60,382
56,562
60,382
389,831
541,676
366,057
541,676
8,189
8,420
8,671
8,420
22,735,543
5,296,227
21,921,834
5,292,479
570,715
579,186
22,492,549
5,871,665
(263,379)
22,229,170
5,871,665
Bank borrowings
Other borrowings
Bonds
Loans from non controlling interest
Vendor financing
2013
AED000
Current
Others
Federal royalty
5,661,415
6,129,150
Total Borrowings
Trade payables
12,890,068
4,955,221
3,558,866
2,472,950
1,810,399
1,487,470
3,609,711
1,404,543
7,067,500
6,119,620
18,619,459
4,467,122
30,988,248
21,164,411
Non-current
Other payables and accruals
At 31 December
96
1,075,480
828,565
1,075,480
828,565
Etisalat
97
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
The terms and conditions of the Groups bank and other borrowings are as follows:
Carrying Value
Year of
maturity
Currency
Nominal
interest rate
2014
AED000
2013
AED000
2014-2016
EGP
1,207,849
1,345,355
2014-2017
EURO
EURIBOR +0.8%
334,650
504,520
2014-2015
USD
LIBOR +2.9%
367,798
2014
USD
LIBOR +4.8%
263,379
351,002
2016-2018
USD
LIBOR +1.3%
29,316
33,155
Nominal Value
Fair
Value
Carrying
Value
2014-2020
USD
LIBOR + 1.6%
206,176
2014
AED000
2014
AED000
2014
AED000
2014-2015
EURO
EURIBOR +4.9%
54,107
137,189
2014-2019
PKR
KIBOR + 70 BP
109,800
2014-2019
PKR
KIBOR + 80 BP
329,400
Bonds
2.375% US dollar 500 million notes due 2019
1,837,000
1,841,225
1,824,285
2014-2019
USD
720,972
1,837,000
1,879,618
1,812,709
2014-2019
PKR
KIBOR + 50 BP
109,800
2014-2019
EUR
6 month
EURIBOR+.1.4%
545,749
685,669
2014-2016
USD
3 months LIBOR+3.5%
19,099
2014-2019
LKR
3 months SLIBOR+4%
64,256
2015-2020
USD
KIBOR+0.2%
661,232
2014-2019
USD
KIBOR+0.2%
271,273
2014-2014
USD
5.0%
74,795
2014-2015
MAD
3.8%
2,080,295
2014-2017
CFA
8.0%
44,791
65,803
2014-2015
EGP
10.0%
56,562
60,382
N/A
USD
Interest free
570,715
579,186
2014-2015
PKR
Interest free
296,375
Bonds
2019
USD
2.5%
1,824,285
Bonds
2024
USD
3.7%
1,812,710
Bonds
2021
EUR
2.0%
5,283,174
Bonds
2016
EUR
2.8%
5,244,633
Others
Various
Various
Various
1,580,831
437,931
22,492,549
5,871,665
(263,379)
22,229,170
5,871,665
5,354,400
5,495,221
5,283,174
5,354,400
5,685,837
5,244,635
14,382,800
14,901,901
14,164,803
At 31 December 2014
of which due within 12 months
of which due after 12 months
14,164,803
Other borrowings
Advances from non-controlling interests
Unsecured vendor financing
Total Borrowings
Reclassified as held for sale (Note 36)
Borrowings from continuing operations
98
Etisalat
99
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
Non-current
AED000
Total
AED000
2,936,653
2,936,653
11,022
11,022
Republic of Benin
24,828
24,828
161,291
936,699
1,097,990
3,133,794
936,699
4,070,493
2,936,653
2,936,653
11,022
11,022
14,179
65,476
79,655
1,769
3,275
5,044
2,963,623
68,751
3,032,374
a)Interest rates
The weighted average interest rate paid during the year on bank and other borrowings is set out below:
At 31 December 2014
2014
2013
Bank borrowings
5.1%
5.4%
Other borrowings
2.9%
4.9%
b)Available facilities
At 31 December 2014, the Group had AED 2,000 million (2013: AED 1,966 million) of undrawn committed b
orrowing facilities in respect
of which all conditions precedent had been met.
At 31 December 2013
1,301,869
During the year, the Group has entered into cross currency USD-EUR swaps which are designated as hedges of net investment. 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:
2014
AED000
Fair value of swaps designated as net investment hedge
The fair value of bonds designated as hedge is disclosed in note 21.
Investments
293,584
Investments
Etisalat International Pakistan LLC
Atlantique Telecom S.A.
Licenses
Republic of Benin
Pakistan Telecommunication Company Limited
2014
AED000
2013
AED000
2014
AED000
2013
AED000
7,150
2,724
6,983
2,564
18,182
4,012
17,283
2,460
25,332
6,736
24,266
5,024
(1,066)
(1,711)
24,266
5,025
24,266
5,024
6,983
2,565
6,983
2,564
17,283
2,460
17,283
2,460
100
lease
o bligations is approximately
equal to their carrying value.
Etisalat
101
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
25. Provisions
Other
AED000
Total
AED000
33,677
779,863
813,540
2,719
1,001,252
1,003,971
(208,067)
(208,067)
(16,167)
(184,150)
(200,317)
(5,890)
(5,890)
Unwinding of discount
(162)
(162)
Exchange differences
(346)
(29,354)
(29,700)
19,721
1,353,654
1,373,375
At 1 January 2013
Additional provision during the year
Utilization of provision
Release of provision
Reclassification
At 31 December 2013
Included in current liabilities
1,172,286
201,089
At 31 December 2013
19,721
1,353,654
1,373,375
20,718
737,070
757,788
197,061
197,061
(6)
(46,511)
(46,517)
(6,025)
(243,774)
(249,799)
(549)
(1,188)
(1,737)
Unwinding of discount
673
673
Exchange differences
(426)
(41,116)
(41,542)
34,106
1,955,196
1,989,302
1,862,566
126,736
34,106
1,955,196
1,989,302
At 31 December 2014
At 31 December 2014
the basis
o f measurement and the
bases of recognition of income and
expenses) for each class of financial
asset and
f inancial
disclosed in Note 2.
liability
are
Capital management
The Groups capital structure is as follows:
Bank borrowings
Bonds
Other borrowings
Finance lease obligations
Cash and cash equivalents
Net funds
2014
AED000
2013
AED000
(7,325,741)
(4,682,001)
(14,164,803)
(1,002,005)
(1,189,664)
(24,266)
(5,024)
18,542,859
15,450,248
(3,973,956)
9,573,559
Total equity
60,926,871
49,592,696
Net equity
64,900,827
40,019,137
2014
AED000
2013
AED000
2,850,049
3,074,027
Financial assets
Loans and receivables, held at amortised cost:
Loans to/due from associates and joint ventures
Trade and other receivables, excluding prepayments
Available-for-sale financial assets (including other investments held for sale)
17,513,554
10,703,026
20,363,603
13,777,053
747,381
1,119,847
44,625
Held-to-maturity investments
191,991
195,585
18,542,859
15,450,248
293,584
40,184,043
30,542,733
30,253,329
20,505,506
Borrowings
22,492,549
5,871,665
4,070,493
3,032,374
102
24,266
5,024
56,840,637
29,414,569
Etisalat
103
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
The
Groups
presentation/functional
currency is United Arab Emirates Dirham
(AED). Foreign currency risk arises from
transactions denominated in foreign
currencies and net investments in foreign
operations.
The Group has foreign currency
transactional 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 the functional
currencies including Nigerian Naira,
Egyptian Pounds, Pakistani R
upee, 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 Telecom
Group enters into Euros contracts as CFA
is pegged to Euro and Maroc Telecom also
enters into Euro contracts as Moroccan
Dirham is 80% pegged to Euro. The 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.
In addition to transactional foreign
currency exposure, a foreign currency
exposure arises from net investments in
Group entities whose functional currency
differs from the Groups presentation
currency (AED). The risk is defined as the
risk of fluctuation in spot exchange rates
between the functional currency of the net
investments and the Groups presentation
currency. This will cause the amount of the
net investment to vary. Such a risk may
have a significant impact on the Groups
consolidated financial statements.
2013
AED000
112,074
108,489
1,164,144
52,808
12,187
7,569
156,556
104
2014
2013
Investment in UAE
86%
99%
14%
1%
2013
AED
Rating
AED
Rating
7.0 billion
A+
5.9 billion
A+
1.7 billion
1.6 billion
NA
1.5 billion
adequate
reserves, banking facilities and
reserve borrowing facilities by continuously
monitoring forecast and actual cash fl
ows
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
2014 to further reduce liquidity risk is
included in Note 21. The majority of the
Groups financial liabilities as detailed in the
consolidated statement of financial position
are due within one year.
Etisalat
105
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
The movement in defined benefit obligations for funded and unfunded plans is as follows:
Borrowings
Payables
related to
investments
and licenses
Finance
lease
obligations
Total
29,389,497
3,952,158
3,133,794
6,983
36,482,432
1,075,533
1,034,817
936,699
17,283
3,064,332
12,451
4,881,624
4,894,075
336
12,623,950
12,624,286
30,477,817
22,492,549
4,070,493
24,266
57,065,125
19,663,755
1,404,543
2,963,623
2,564
24,034,485
1,012,431
1,112,335
68,751
2,460
2,195,977
15,520
2,999,402
3,014,922
33,799
355,385
389,184
20,725,505
5,871,665
AED000
On demand or within one year
Trade and
other payables,
excluding
deferred revenue
2014
AED000
2013
AED000
4,467,509
4,376,946
162,946
(2,276)
Service cost
146,761
132,541
Interest cost
447,896
382,308
11,754
4,712
210,071
208,290
(706,363)
(344,296)
233,420
Exchange difference
162,212
(292,992)
As at 31 December
5,133,930
4,467,509
2014
AED000
2013
AED000
2,555,736
2,390,283
318,868
268,676
Contributions received
458,295
308,449
(371,355)
(214,939)
Exchange difference
127,846
(196,733)
As at 31 December
3,089,390
2,555,736
2014
AED000
2013
AED000
Service cost
146,766
132,419
Interest cost
54,911
130,075
Others
10,739
3,715
212,416
266,209
2014
AED000
2013
AED000
2.80%
3.07%
Pakistan
11.25%- 12.5%
11% - 12.5%
Morocco
4%
4.0%
4.0%
Pakistan
7% - 11.5%
7% - 11.5%
Morocco
3%-5%
As at 1 January
Acquisition of Maroc Telecom (Note 30)
Actuarial gain
Remeasurements
Benefits paid
Gain and loss on settlement
As At 31 December 2013
3,032,374
5,024
29,634,568
As at 1 January
2013
AED000
3,541,336
3,025,327
(3,089,390)
(2,555,736)
451,946
469,591
Funded Plans
Present value of defined benefit obligations
Less: Fair value of plan assets
Following are the significant assumptions used relating to the major plans
Unfunded Plans
Present value of defined benefit obligations and other employee benefits
Total
Benefits paid
1,592,594
1,442,182
2,044,540
1,911,773
Discount rate
UAE
106
Etisalat
107
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
2014
AED000
2013
AED000
2,469,808
1,922,083
477,771
393,635
As at 1 January
Investment property
292,957
250,206
Fixed assets
175
170
Other assets
4,555
5,092
(155,876)
(15,450)
3,089,390
2,555,736
less: liabilities
The expense recognised in profit or loss relating to contribution plan at the rate specified in the rules of the plans amounting to
AED 124 million (2013: AED 123 million).
2014
AED000
2013
AED000
(2,209,881)
(1,100,345)
(1,112,621)
(1,109,536)
(3,322,502)
(2,209,881)
As at 1 January
204,477
80,108
Loss on revaluation
(34,904)
(139,940)
(284,991)
264,309
(115,418)
204,477
7,850,000
7,850,000
8,166,000
8,108,000
58,000
8,166,000
8,166,000
165,077
97,561
24,580
67,516
189,657
165,077
14,091,307
14,080,515
(6,340)
10,792
14,084,967
14,091,307
Translation reserve
As at 31 December
Investment revaluation reserve
2014
AED000
2013
AED000
8,000,000
8,000,000
Authorised:
Development reserve
As at 1 January and 31 December
As at 1 January
7,906,140
7,906,140
Statutory reserve
As at 1 January
Transfer from retained earnings
As at 31 December
29. Reserves
The movement in the Reserves is provided below:
As at 1 January
Total comprehensive income for the year
Transfer from retained earnings
As at 31 December
108
2014
AED000
2013
AED000
28,266,980
29,115,839
(1,432,516)
(985,167)
18,240
136,308
26,852,704
28,266,980
General reserve
As at 1 January
Transfer from retained earnings
As at 31 December
Etisalat
109
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
10,729,232
14,886,958
Investments
Inventory
4,303,344
46,955
2,261,948
Bank loans
(2,543,565)
(3,637,635)
17,321,184
(8,159,944)
(8,664,357)
(162,946)
Provision
(197,061)
(22,450)
Goodwill
11,761,694
20,922,933
191,419
110
129,342
The following table summarises the fair values of the assets acquired, liabilities assumed, r elated deferred taxes and goodwill as of the
acquisition date further to the purchase price allocation process (PPA).
Etisalat
111
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
32. Commitments
a) Capital commitments
The Group has approved future capital projects and investments commitments to the extent of AED 9,377 million (2013: AED 5,448
million).
b) Lease commitments
i) The Group as lessee
Minimum lease payments under operating leases recognised as an expense in the year (Note 5)
2014
AED000
2013
AED000
227,777
258,458
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:
2014
AED000
2013
AED000
272,814
275,839
1,040,687
1,330,078
1,159,391
722,640
2,472,892
2,328,557
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 two years.
ii) The Group as lessor
a) Bank guarantees
2014
AED million
2013
AED million
949.0
527.0
771.3
393.0
39.4
228.0
10,207
Between 2 to 5 years
8,224
29,673
16,493
39,880
AED000
Final dividend for the year ended 31 December 2012 of AED 0.45 per share
3,556,224
Interim dividend for the year ended 31 December 2013 of AED 0.35 per share
2,765,952
6,322,176
31 December 2014
Final 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
2,765,952
5,531,905
8,269
31 December 2013
At the reporting date, the Group had contracted with tenants for the following future minimum lease payments:
Property rental income earned during the year was AED 11 million (2013: AED 12 million). All of the properties held h
ave committed
tenants for the next 4 years.
2013
AED000
34. Dividends
2014
AED000
2014
2013
8,892,019
7,078,388
7,906,140
7,906,140
Earnings (AED000)
Earnings for the purposes of basic earnings per share being the profit attributable to the equity
holders of the Corporation
Number of shares (000)
Weighted average number of ordinary shares for the purposes of basic earnings per share
The Group does not have potentially dilutive shares and accordingly, diluted earnings per share equals to basic e arnings per share.
112
Etisalat
113
Financials
Emirates Telecommunications Corporation
Notes to the consolidated financial statements for year ended 31 December 2014
Notes to the consolidated financial statements for year ended 31 December 2014
Revenue
Operating expenses
Operating profit
Finance and other income
Finance costs
Loss for the year from a discontinued operation
2013
AED000
299,666
297,121
(408,513)
(311,243)
(108,847)
(14,122)
41,001
(257)
(50,262)
(49,137)
(118,108)
(63,516)
On 26 January 2015,
Emirates
Telecommunications
Corporation
(Etisalat), Atlantique Telecom SA (AT)
and Etisalat International Benin Limited
(EffiL) successfully completed the sale of
At 31 December 2014 the disposal group comprised the following assets and liabilities
Assets classified as held for sale
2014
AED000
Goodwill
44,896
74,075
255,245
Other investments
3,570
Inventories
11,374
134,682
8,915
532,757
2014
AED000
860,862
Borrowings
263,379
2,276
1,126,517
593,760
2014
AED000
24,861
(309)
(89,055)
(64,503)
There are no cumulative income or expenses recognised in other comprehensive income relating to the disposal group
114
Etisalat
115
116
www.etisalat.com