Emirates Integrated Telecommunications Company PJSC and its subsidiaries
Consolidated financial statements for the year ended 31 December 2021
Emirates Integrated Telecommunications Company PJSC and its subsidiaries
Consolidated financial statements for the year ended 31 December 2021
Pages | |
Independent auditors' report | 1 - 6 |
Consolidated statement of financial position | 7 |
Consolidated statement of comprehensive income | 8 |
Consolidated statement of changes in equity | 9 |
Consolidated statement of cash flows | 10 |
Notes to the consolidated financial statements | 11 - 71 |
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INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF EMIRATES INTEGRATED TELECOMMUNICATIONS COMPANY PJSC
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Opinion
We have audited the consolidated financial statements of Emirates Integrated Telecommunications Company PJSC ("EITC" or "the Company") and its subsidiaries (collectively referred to as "the Group"), which comprise the consolidated statement of financial position as at 31 December 2021, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2021, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the other ethical requirements that are relevant to our audit of the Group's consolidated financial statements in the United Arab Emirates, and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current year. We have communicated the key audit matters to the Audit Committee but they are not a comprehensive reflection of all matters that were identified by our audit and that were discussed with the Audit Committee. On the following pages, we have described the key audit matters we identified and have included a summary of the audit procedures we performed to address those matters.
The key audit matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Akbar Ahmad (1141), Cynthia Corby (995), Georges Najem (809), Mohammad Jallad (1164), Mohammad Khamees Al Tah (717), Musa Ramahi (872), Mutasem M. Dajani (726), Obada Alkowatly (1056), Rama Padmanabha Acharya (701) and Samir Madbak (386) are registered practicing auditors with the UAE Ministry of Economy.
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF
EMIRATES INTEGRATED TELECOMMUNICATIONS COMPANY PJSC (continued)
Key audit matter | How our audit addressed the Key audit matter | ||||||||
Revenue recognition and related IT systems | |||||||||
The Group reported revenue of AED 11.68 billion | Our audit procedures included a combination of | ||||||||
from telecommunication and related activities. | controls testing, data analytics and other | ||||||||
substantive procedures, but were not limited to the | |||||||||
We focused on this area of the audit as there is an | following: | ||||||||
inherent risk related to revenue recognition given | |||||||||
the complexity of the systems and changing mix | • performing | enhanced | risk | assessment | |||||
of business products and services including a | procedures in response to the significant | ||||||||
variety of plans available for consumer and | economic disruption associated with the | ||||||||
enterprise customers, tariff structures, roaming | COVID-19 pandemic and increasing audit | ||||||||
and | international | hubbing | ('wholesale') | effort to challenge whether the revenue | |||||
agreements, site sharing agreements, incentive | recognition criteria adopted for significant | ||||||||
programmes and discounts. | revenue streams is appropriate and in | ||||||||
Due to the estimates made, complexities involved | accordance with IFRSs; | ||||||||
• obtaining an understanding of the significant | |||||||||
and judgements applied in the revenue process | revenue processes including performance of | ||||||||
and the degree of complexity of IT systems and | an end to end walkthrough of the revenue | ||||||||
processes used, we have considered this matter as | process and identifying the relevant controls | ||||||||
a key audit matter. | (including Information Technology ("IT") | ||||||||
The | Group's accounting policies | relating to | systems, interfaces, | revenue assurance and | |||||
reports); | |||||||||
revenue recognition are presented in note 3 and | |||||||||
• testing the design and implementation as well | |||||||||
details about the Group's revenue are disclosed in | as the operating effectiveness of the relevant | ||||||||
note 34 to the consolidated financial statements. | |||||||||
controls; | |||||||||
• involving our internal IT specialists to test IT | |||||||||
general | controls, | system | interfaces, | ||||||
data/information | reporting | and | application | ||||||
specific controls surrounding relevant revenue | |||||||||
systems; | |||||||||
• reviewing significant new contracts on sample | |||||||||
basis and the regulatory pronouncements, the | |||||||||
accounting treatments adopted and testing the | |||||||||
related revenues recognised during the year; | |||||||||
• performing | data | analysis | and | substantive | |||||
analytical procedures | of significant revenue |
streams;
• reviewing key reconciliations performed by the Revenue Assurance team;
• performing test of details on non-routine adjustments processed by management which are outside of normal billing platform;
• performing specific procedures to test the accuracy and completeness of adjustments relating to grossing up certain revenue and costs; and
• assessing the disclosures in the consolidated financial statements relating to revenue against the requirements of IFRSs.
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF
EMIRATES INTEGRATED TELECOMMUNICATIONS COMPANY PJSC (continued)
Key audit matter | How our audit addressed the Key audit matter | |||||||||||||||
Federal royalty computation | ||||||||||||||||
The federal royalty is a significant charge levied | In responding to this risk, our audit procedures | |||||||||||||||
against regulated revenues of the Group and | included, but were not limited to, the following: | |||||||||||||||
against operating profits, based on fixed | ||||||||||||||||
percentages, as disclosed in Note 2.3 to the | • obtaining an understanding of the process used by | |||||||||||||||
consolidated financial statements. | management to determine the federal royalty | |||||||||||||||
The federal royalty charge for | the | year | is | charge and related accrual; | ||||||||||||
• testing | the design and implementation of the | |||||||||||||||
AED 1.38 billion for the year with an accrual of | relevant controls over the calculation of the | |||||||||||||||
AED 1.50 billion as at 31 December 2021. | federal royalty charge; | |||||||||||||||
We focused on this area of the audit as the royalty | • holding meetings with management to discuss the | |||||||||||||||
federal royalty calculation and inspecting | ||||||||||||||||
calculations are subject to significant judgements, | correspondence from the MOF relating to this | |||||||||||||||
interpretations and assumptions in respect of the | matter; | |||||||||||||||
definition of regulated items, the determination of | • | assessing | the | judgements | applied | in | the | |||||||||
certain allowable deductions and allocated costs | calculation of the federal royalty for the current | |||||||||||||||
and the | treatment | of royalties | on | site | sharing | |||||||||||
year against the guidelines provided by the MOF | ||||||||||||||||
transactions. | ||||||||||||||||
and the abovementioned correspondence; | ||||||||||||||||
These are also subject to change from time to time | • evaluating the classification of regulated and non- | |||||||||||||||
regulated revenues in the calculation of the federal | ||||||||||||||||
as per the guidelines provided by the United Arab | ||||||||||||||||
royalty on the telecommunication operations; | ||||||||||||||||
Emirates | Ministry | of Finance | ("the MoF") | are | ||||||||||||
• | testing | the | allocation | of | indirect costs | on | ||||||||||
amended or as clarifications are received from the | ||||||||||||||||
nonregulated | activities | based | on | clarifications | ||||||||||||
MoF. | ||||||||||||||||
received from the MOF; | ||||||||||||||||
Accordingly, | the | computation | of | the | federal | • evaluating the exclusion of items which were not | ||||||||||
included in the calculation of | the federal royalty | |||||||||||||||
royalty for the year ended 31 December 2021 is | ||||||||||||||||
against | the | guidelines | and | the | clarifications | |||||||||||
considered to be a key audit matter. | ||||||||||||||||
received from the MOF; | ||||||||||||||||
The critical | accounting | estimates | made | and | • | reperforming | the | arithmetical | accuracy | of | the | |||||
calculation of the federal royalty for the year; and | ||||||||||||||||
judgements applied by management are disclosed | ||||||||||||||||
• | assessing | the | disclosures | in | the | consolidated | ||||||||||
in note 2.3 and further details about the federal | ||||||||||||||||
financial | statements against | the requirements | of | |||||||||||||
royalty | are | disclosed | in note | 27 | to | the | ||||||||||
IFRSs. | ||||||||||||||||
consolidated financial statements. | ||||||||||||||||
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Emirate Integrated Telecommunications Company PJSC published this content on 11 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 February 2022 10:27:04 UTC.