Enriching

people’s
digital lives
Annual Report 2018
“In the Name of Allah Most Gracious Most Merciful.”

His Highness
Sheikh Tamim Bin Hamad Al Thani
Emir of the State of Qatar
2 Ooredoo Annual Report 2018
3

Our Vision
Enriching people’s
digital lives
Contents
4 Chairman’s Message 24 Our Businesses 74 Consolidated Financial
Statements
6 Group CEO’s Message 26 Ooredoo Qatar
76 Independent Auditor’s Report
8 Our Board of Directors 30 Indosat Ooredoo Indonesia
80 Consolidated Statement
10 Operational and 32 Ooredoo Kuwait of Profit and Loss
Financial Highlights
34 Ooredoo Oman 81 Consolidated Statement
12 Our Reach of Comprehensive Income
36 Asiacell Iraq
14 Key Moments 82 Consolidated Statement
38 Ooredoo Algeria of Financial Position
18 Our Strategy
40 Ooredoo Tunisia 84 Consolidated Statement
22 2018 Awards and of Changes in Equity
Industry Recognition 42 Ooredoo Myanmar
86 Consolidated Statement
44 Ooredoo Palestine of Cash Flows
46 Ooredoo Maldives 88 Notes to the Consolidated
Financial Statements
48 Our Social Responsibility

54 Corporate Governance Report

70 Financial Review
 4 Ooredoo Annual Report 2018
5

Growing market
“Ooredoo continues to build a
strong network foundation for our
customers. In each of our markets,
we continued our efforts to be the

leadership
leader in data services, enabling
customers to live better digital
lives.”

H.E. Sheikh Abdulla Bin

Mohammed Bin Saud Al Thani

Chairman

Chairman’s Message

Dear Shareholders Despite our progress in the digital sphere, We continue to attract, recruit and retain
New digital technologies provide the structural changes in our industry the strongest young talent in each of our
customers – whether individuals or that have impacted all operators affected operations, ensuring we have the right
companies – the ability to realise their Ooredoo and increased the pressure personnel on board both now and for the
ambitions and take advantage of the on voice revenue. This was exacerbated future. Our broad range of development
new opportunities of the digital world, in 2018 by general foreign exchange programmes, designed to ensure these
in both emerging and developed weakness of currencies in emerging young leaders receive the best in training
markets. Digital empowerment is the markets. and mentoring, has been expanded
future, and Ooredoo is committed to in 2018.
making the necessary investments Therefore, we have made leadership
that will contribute to providing changes where appropriate and pushed Reflecting growing confidence in our
modern networks to help our cost optimisation to ensure good returns position, Ooredoo’s S&P Global rating
customers succeed and grow. Through for our shareholders. was revised to stable from negative in
our strategy, Ooredoo supports the December and our A-/A-2 issuer credit
introduction and further development ratings were affirmed. The change was
Ongoing investment in digital
of innovations that enrich people’s prompted by the revision of the outlook
innovation
digital lives. for the State of Qatar to stable, due to its
Ooredoo continues to build a strong
macroeconomic resilience.
network foundation for our customers.
Our positive momentum was evident In each of our markets, we enhanced our Dividends
across our footprint: in Qatar, where we efforts to be the leader in data services,
In line with our stated strategy, the Board
launched the first commercially available enabling our customers to live better
is pleased to recommend to the General
5G network in the world and became the digital lives. These efforts delivered
Assembly the distribution of a cash
first telecom operator to test self-driving results both in terms of industry-changing
dividend of 25% of the nominal share
5G-connected aerial taxis. It was present mobile technology and mass market
value, equivalent to QR 2.5 per share.
in Oman, where we launched pre-5G with services, connecting more people and
a major home broadband enrichment enabling them to access all the benefits of The Board and Governance
programme. Digital transformation took the internet.
In closing, I offer Ooredoo’s sincere
hold in Algeria, where we became the first
gratitude and appreciation to His
operator to roll out a 4G network in all Pursuing a prudent path to stability
Highness Sheikh Tamim Bin Hamad Al We are fortunate to have the support, We firmly believe Ooredoo will continue
provinces of the country, and Palestine, 2018 was a year of consolidation for
Thani, the Emir of the State of Qatar, for guidance, and encouragement of our to excel and take the lead as the digital
where we launched 3G services for the Ooredoo Group as we continued to
his inspired leadership and unwavering Board Members. The Board has been the future becomes a reality. Working
first time in the West Bank. ensure we have the best possible people
efforts to support Qatar’s progress. backbone of our organisation, supporting hand-in-hand with our stakeholders,
heading up our operations and continued
our progress and development in 2018, we will deliver the very best in digital
As part of our Group’s vision, Ooredoo to train and develop the next generation His Highness is the driving force for and enabling us to maintain our position
of leaders. enablement.
is digitising its companies and has Qatar’s growth into an advanced society as a market leader. I would like to thank
introduced initiatives to enable it to capable of sustaining its development the Board members for their contribution
In January, we appointed a new Chief to Ooredoo’s success in 2018.
use its resources more efficiently, as and providing a high standard of Abdullah Bin Mohammed
Executive Officer at Ooredoo Myanmar,
we transform our internal procedures living for its people, through human, Bin Saud Al Thani
and in October a new Chief Executive I would also like to extend my thanks to
into digital procedures. These changes social, economic and environmental Chairman
Officer at Indosat Ooredoo. In both our customers, our employees and our
enable our companies to streamline their development. As a proud Qatari company,
cases, we have appointed experienced shareholders, who have continued to
business processes and implement their Ooredoo is fully committed to supporting 13 February 2019
executives with a deep understanding support our development and inspire the
this national vision.
objectives more effectively. of the needs of their respective markets, evolution of this company.
and the dedication and drive to take
performance to the next level.
 6 Ooredoo Annual Report 2018
7

Delivering a stronger
digital impact
Group CEO’s Message

Dear Shareholders, introduce paperless systems, streamline with an important competitive edge
Ooredoo is a company with a proud and improve key processes to deliver by connecting with young, digitally-
history that has always made sure to immediate and long-term benefits. aware customers. Our integrated ‘Enjoy
plan for the future. We recognised the the Internet’ campaign with brand
significant changes that were ahead for Throughout 2018, this programme ambassador Leo Messi connected with
our industry and adapted accordingly. contributed to cost optimisation through millions of customers following its launch “We have faced sharp
At the same time, we have continued greater efficiencies and provided the in June and we will continue to innovate competition and regulatory
to ensure that the whole company tools to support more knowledge-sharing in this area. challenges and have
remains focused on the core values and collaboration across the company. It demonstrated our capacity
that define Ooredoo as an organisation also positioned Ooredoo as a key partner Looking to the future to respond decisively and
and which help sustain our strong for our customers, by equipping our Our focus on digital enabling provides effectively. We have emerged
connections with our communities. teams with new skills and competencies our operations across the Middle East, stronger, more focused and
required to thrive in the digital economy. North Africa and Southeast Asia with clear more unified as a company,
These twin strengths – the capacity to direction as we move forward together. and better able to deliver this
change and the strong, shared values that Ooredoo’s move towards supporting
year’s positive results for our
Digital Enablers has seen our companies

USD
endure – enabled Ooredoo to continue We are proud of the important progress shareholders.”
to move forward in 2018, which was a continue to reinforce their networks made in our home market of Qatar,
year that saw some significant turmoil and introduce flagship services, such as where we launched the first live,

3.3 billion
in our markets. We have faced sharp Smart Stadium, Smart City, and our new commercially available 5G network on
competition and regulatory challenges Digital Experience, with a strong focus on the 3.5GHz spectrum band in the world
and have demonstrated our capacity to evolution to 5G. in May 2018, followed by a number of
5G-enabled innovations, from home Estimated brand value in 2018
respond decisively and effectively. We
Leveraging the strength of the broadband to aerial taxis later in the year.
have emerged stronger, more focused
Ooredoo brand
and more unified as a company, and
One of our key assets in our growth This progress was mirrored by Ooredoo of the internet and also enable Ooredoo 2021 roadmap, which outlines the 2018, with world-class networks in place
better able to deliver this year’s positive
and development continues to be the Kuwait, which launched 5G on a number to keep evolving its service offering steps necessary to move from legacy supporting our operating companies, and
results for our shareholders.
Ooredoo brand. In February 2018, a of test sites in 2018, and Ooredoo Oman, to meet the challenges of a changing businesses to take the lead in digital our mission and vision clear and built into
Driving a strategy for digital report from Brand Finance valued the which successfully expanded high-speed telecommunications market. services and become Indonesia’s leading our businesses.
transformation brand at US$3.3 billion, placing us in the 4G services across 90 percent of the digital provider.
top 50 telecoms brand in the world. population during the year as part of the A positive example of the progress I would like to join our Chairman in
In 2018, we communicated our vision of we are making in this area is Indosat This decisiveness is evident across our thanking His Highness Sheikh Tamim Bin
‘Enriching people’s digital lives’ across preparation for its 5G launch. Ooredoo
The strength of our brand was Myanmar rolled out 4G+ services across Ooredoo, which overcame significant businesses, and we will continue to Hamad Al-Thani, the Emir of the State of
all 10 operating companies and to all challenges in 2018 to end the period encourage it throughout 2019 and into the Qatar. His visionary leadership remains
demonstrated in Palestine in November, the country and became the first operator
employees. This was the first time that we in a strong position. The Indonesian future. Everyone – from our CEOs through the driver behind Qatar’s ambitious
when we rebranded our Wataniya to showcase Voice over LTE (VoLTE)
have successfully aligned strategy, vision telecommunications market underwent to the people on the frontline in shops plans for the future. I would also like
operations to ‘Ooredoo Palestine’, during the year.
and values across all our operations. turmoil during the year, with mandatory and call centres – is part of a grand effort to thank the Board, our shareholders,
extending our name to a ninth major
As part of this shift, Ooredoo aims to SIM card registration and intense to bring the power of digitization to our our employees and our customers for
market. Palestine has seen a number of Ooredoo has rolled out expanded 4G
digitally transform its business, so that competition reshaping the sector. customers. It is an exciting mission, and a working with us to achieve this vision.
important initiatives over the past period, services in Algeria, Indonesia and Tunisia,
its operating companies become “Digital task for which Ooredoo is ideally suited.
including the launch of 3G services and upgraded 4G services in the Maldives,
Enablers,” empowering our customers To pre-empt the impact of these changes, Sauod Bin Nasser Al Thani
the extension of our offering to West and enhanced network speeds in Iraq and
through digital services. Indosat Ooredoo has implemented a We know we have the knowledge, Group CEO
Bank, and the brand launch generated Palestine.
an immediate and extremely positive strategic shift towards quality growth, experience and expertise to continue
To support this strategic repositioning, recognising the significant potential of to deliver sustainable value for our 13 February 2019
response from our customers. These network evolutions, supported
we introduced the Group-wide Indonesia’s large, digitally-enthused customers, our shareholders and the
by our digital transformation strategy,
transformation programme, ‘Get Digital’. population. The newly appointed Board communities in which we operate. Our
We continue to invest in developing are the foundations that will enable our
This initiative saw the company of Directors has established a Vision brand identity has been strengthened in
our brand, because it provides us customers to experience the full potential
8 Ooredoo Annual Report 2018
9

Our Board of Directors

H.E. Sheikh Abdulla Bin Mohammed Bin Saud Al Thani has chaired the Ooredoo Board Dr. Nasser Mohammed Marafih joined Ooredoo’s Board of Directors in 2015 and is
since July 2000. In parallel with his role at Ooredoo, he was CEO of Qatar Investment currently the Advisor to the Chairman. Previously, he was Chief Executive Officer of
Authority from 2014-2018, taking the helm of one of the world’s largest sovereign wealth Ooredoo Group during from 2006 to 2015, and Chief Executive Officer of Ooredoo Qatar
funds. He has a diverse background in both governmental and military fields, including from 2002 to 2011. He currently chairs the board of the GSMA Mobile for Development
roles as Chief of the Royal Court (Amiri Diwan) and Member of the Planning Council, and is a member of the Broadband Commission. Dr. Marafih brings extensive experience
Chairman of the Board of Trustees for the North Atlantic College in Qatar, and Military of the telecoms sector to the Board.
Attaché to the United Kingdom. His Excellency’s wide experience and knowledge of
administration and government enrich the Board considerably.
H.E. Sheikh Abdulla Bin Mohammed Dr. Nasser Mohammed Marafih
Bin Saud Al Thani Member and Advisor of the Board’s
Chairman Chairman

H.E. Ali Shareef Al Emadi, Minister of Finance for the State of Qatar since 2013, joined Mr. Nasser Rashid Al Humaidi, who joined the Board in 2011, is Group Chief Operating
Ooredoo’s Board of Directors in March 1999. He has held leadership positions at a Officer at Barwa Bank. Prior to his current position, he held various management and
number of key Qatari institutions, including Secretary-General of the Supreme Council business technologies roles in multi-industry sectors including utilities, telecom, oil and
for Economic Affairs and Investment, Member of the Supreme Committee for Delivery gas, real estate and banking, and contributed to national steering committees. This
and Legacy, Chairman of the Board for QNB Group and President of the Executive Board diverse background brings a wealth of experience that contributes significantly to the
of Qatar Airways. H.E. Al Emadi brings more than 25 years of significant experience and Ooredoo Board.
knowledge in the fields of finance and banking to Ooredoo.

H.E. Ali Shareef Al Emadi Nasser Rashid Al Humaidi

Deputy Chairman Member

H.E. Mohammed Bin Issa Al Mohannadi joined the Board in July 2000. He currently Mr. Aziz Aluthman Fakhroo, who joined the Board in 2011, is currently Deputy
serves on the Boards of a number of Qatari companies and has held many prominent Undersecretary for Financial Affairs of the Ministry of Finance. Previously, he was
positions, including previous roles as Chief Financial Officer of the Royal Court (Amiri Assistant Undersecretary for General Budget Affairs of the Ministry of Finance and an
Diwan) and State Minister. His Excellency’s considerable experience in - and knowledge of Associate Director in the Mergers and Acquisitions Department of Qatar Holding LLC -
- administration, finance and government are greatly beneficial to the Board. the strategic and direct investments arm of the Qatar Investment Authority. He currently
represents Qatar Holding on the boards of United Arab Shipping Company, Canary Wharf
Group, and Chelsfield LLP. He is the founder and previous CEO of Idealys. He brings a
strong business background and deep understanding of technology to the Board.
H.E. Mohammed Bin Issa Aziz Aluthman Fakhroo
Al Mohannadi Member
Member

H.E. Turki Al Khater, who joined the Board in 2011, is the President of General Retirement H.E. Sheikh Ali Bin Ghanim Al Thani H.E. Sheikh Ali Bin Ghanim Al Thani joined Ooredoo’s Board of Directors in 2018. He is the
and Social Insurance Authority, Chairman of the United Development Company (UDC), Member owner and Chairman of Ali Bin Ghanim Holding Group. He currently serves on the Boards
and Board Member of Masraf Al Rayan. He has previously held the position of Managing of several Qatari companies, including Qatar Islamic Bank, Doha Insurance Group, and
Director of Hamad Medical Corporation and Undersecretary of Health Ministry and brings the Centre for Arab Unity Studies. His Excellency’s experience in business adds substantial
significant experience in business and finance to the Board. value to the Ooredoo Board.

H.E. Turki Mohammed Al Khater

Member

H.E. Ali Bin Ahmed Al Kuwari H.E. Ali Bin Ahmed Al Kuwari, who joined the Board in 2018, was appointed Minister Ibrahim Abdulla Al Mahmoud Mr. Ibrahim Abdullah Al Mahmoud joined Ooredoo’s Board in March 2014. He has held
Minister of Commerce and of Commerce and Industry in November 2018. Prior to his current role, His Excellency Member board-level positions with a number of insurance companies and academic organisations,
Industry was Group Chief Executive Officer of Qatar National Bank (QNB) from July 2013, after including Qatar Foundation for Education, Science and Community Development and
serving as Executive General Manger and Group Chief Business Officer. His Excellency Calgary University in Qatar.
is also Chairman of MasterCard Middle East and North Africa Advisory Board, Chairman
of QNB Capital, Chairman of QNB Indonesia and Chairman of QNB Suisse. He is also
Vice Chairman of Qatar Exchange and a Board Member in Qatar Finance and Business
Academy. His Excellency brings significant experience and knowledge in the fields of
finance, banking and strategic planning to the Board.
10 Ooredoo Annual Report 2018
11

Leveraging Net profit

strong foundations
to Ooredoo
QR 1,565m
Operational and Financial Highlights

The Ooredoo Group achieved solid financial and operational

performance across its markets in 2018. The results reflect the Ooredoo provides 4G networks in eight
challenges faced by the telecom industry and emerging markets.
out of 10 countries in which it operates.
Recognised as a market-leading digital enabler, Ooredoo now provides
4G networks in eight out of its 10 markets and is leading the way in
the drive towards achieving the necessary connectivity to promote
economic and social development across its global footprint.

Revenue Net profit attributable to Dividend per share

Amount in QR millions Ooreedoo Shareholders Amount in QR (Note A)
Amount in QR millions

29,927 1,565 2.50

33,207

32,161

32,646

29,927
32,503

2,134

2,118

2,193

1,897

1,565

4.00

3.00

3.50

3.50

2.50
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

EBITDA & EBITDA margin (%) Earnings per share Capital expenditure & Revenue by region
Amount in QR millions Amount in QR Capital expenditure to revenue (%)
Amount in QR millions (Note B)

12,202 4.89 4,872 60% 26% 14%

12,948

13,018

13,379

13,640

12,202

8,391

8,762

5,982

4,541

4,872
Middle East Southeast Asia North Africa
and
Subcontinent
5.92

4.89

25%

27%
39%

40%

41%

42%

41%

18%

14%

16%
6.66

6.61

6.84

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
* Further details in Financial review section (page 70) Note A - 2018 represents proposed dividend.
Note B - Capital expenditure does not include licence cost
12 Ooredoo Annual Report 2018
13

Global 115m
footprint Total customers

effective stake
8bn

penetration
population
Ooredoo

Country

Market
Mobile

share
Revenue (USD)
Our Reach

Middle East
Ooredoo Group’s operations in the Middle East region comprise Qatar
Headquartered in Doha, 1 100.0% 2.7 m 157% 68%
Ooredoo Qatar, Ooredoo Oman, Ooredoo Kuwait, Asiacell Iraq
Qatar, Ooredoo is a global (Ooredoo1)
and Ooredoo Palestine. Ooredoo enhanced its network leadership
telecommunications company in the region in 2018, making strong progress in the race towards
with a consolidated global 5G and delivering pioneering expansion in Palestine. May saw the
customer base of more than launch of the world’s first live, commercially available 5G network
115 million, as at 31 December Kuwait
in Qatar, with Oman and Kuwait also making strong 5G progress 2 92.1% 4.7 m 155% 32%
2018. Its operating network during the year. Wataniya Palestine was officially rebranded (Ooredoo2)
extends across 10 markets in Ooredoo Palestine in November.
the Middle East, North Africa
and Southeast Asia. Middle East customers
North Africa Middle East Southeast 24.1 million
3
Oman
55.0% 4.7 m 139% 43%

22.8m 24.1m Asia and the (Ooredoo)

customers customers Subcontinent

68.1m
customers
4
Iraq
(Asiacell)
64.1% 37.9 m 94% 37%

7 4
6 5 Palestine
2 5 45.4% 5.0 m 87% 30%
(Ooredoo2)
1
3 North Africa
9 Ooredoo’s operations in North Africa comprise Ooredoo Algeria Algeria
and Ooredoo Tunisia, markets which both experienced positive 6 74.4% 42.3 m 103% 33%
(Ooredoo2,4)
development in 2018. By April, Ooredoo Algeria had rolled out
its 4G network across all provinces – a feat achieved in just two
10 years. Ooredoo Tunisia also pursued a programme of digital and
network enhancement during the year.
Tunisia
7 84.1% 11.6 m 127% 41%
8 North Africa customers (Ooredoo2,5)
22.8 million

Southeast Asia and the Subcontinent

Ooredoo’s operations in Southeast Asia and the Subcontinent Indonesia
comprise Indosat Ooredoo in Indonesia, Ooredoo Maldives and 8 65.0% 266.0 m 108% 22%
(Indosat Ooredoo)
Ooredoo Myanmar. Indosat Ooredoo achieved 4G coverage of
around 80 percent of the population in 2018, while Ooredoo
Maldives completed the trial launch of 5G. Ooredoo Myanmar
worked with partners to inaugurate the country’s first 5G-ready
Technology Centre during the year. Myanmar
9 100.0% 53.8 m 101% 18%
(Ooredoo)
Southeast Asia and Subcontinent customers
68.1 million

The Maldives
10 83.3% 0.4 m 217% 50%
(Ooredoo2,3)

1. Operations integrated 2. Operations integrated 3. Holds 65% of WARF 4. 9% of Ooredoo Algeria is 5. 15% of Ooredoo Tunisia is
within Ooredoo QPSC; also within NMTC Kuwait. Telecom International held directly by Ooredoo held directly by Ooredoo
holds 72.5% of Starlink Private Limited as a QPSC. QPSC.
Qatar. subsidiary.
14 Ooredoo Annual Report 2018
15

Highlights
of the Year
Throughout 2018, Ooredoo took a firm
lead in the provision of supercharged
internet services, upgrading network
infrastructure and launching a series of
innovative digital applications. These
initiatives supported Ooredoo’s vision of
enriching the digital lives of customers
across its global footprint.

Key Moments

JAN FEB MAR APR MAY JUN

Ooredoo Launches 3G Ooredoo Group Ooredoo Group Ooredoo Group Achieves Ooredoo First in the World Ooredoo Qatar Takes
Network in West Bank, Announces Final Year Announces Deployment of Gold Certified Partnership to Launch 5G Network Delivery of First Live 5G
Palestine Results AI Solutions to Transform Status Ooredoo became the first operator in Home Broadband Devices
the world to launch a live, commercially
Ooredoo Palestine launched its 3G Ooredoo Group reported FY2017 group Network Towards 5G Ooredoo Group announced in April
available 5G network on the 3.5GHz
Ooredoo Qatar announced another
network for West Bank, building on its revenue of QAR 33 billion in February, that it had achieved the highest 5G milestone in June when it took
Ooredoo Group announced it was spectrum band in May. The Ooredoo
success in introducing services in Gaza with strong contributions from possible partnership status from IT and delivery of the world’s first live 5G
initiating deployment of artificial 5G service in Qatar deploys advanced
in 2017. This was an important step Indonesia, Iraq, Kuwait and Maldives. networking world leader Cisco for its home broadband devices. Tested on
intelligence solutions to transform network technology, which translates
for communities in Palestine, giving Excluding the Foreign Exchange Qatar, Kuwait and Oman operations, Ooredoo’s 5G network, the devices
its network for 5G, as part of a to higher speeds, greater capacity and
people in the West Bank access to Translation impact, revenues increased enabling the digital transformation of can achieve speeds of up to 2Gbps,
partnership designed to significantly better latency than existing cellular
high-speed mobile data services. by 2 percent compared to the reported small- and medium-sized enterprises. enabling customers to download
enhance customers’ mobile data systems.
1 percent. Being a Gold Certified Partner movies and games in seconds.
experience.
supported the further integration of
Ooredoo Announces collaboration, enterprise networking, Ooredoo Oman Launches
Vikram Sinha as CEO Qatar’s Gigabit-Speed data centre virtualisation, security and
Ooredoo Kuwait Launches
Fibre Penetration named service provider solutions throughout
New Business App 5G Test Sites
Ooredoo Myanmar Ooredoo Oman launched a new app to
Highest in the World the year. Ooredoo Kuwait launched 5G services
Vikram Sinha was confirmed as the new

5G
offer business customers more control
at a number of test sites in June, with
CEO of Ooredoo Myanmar. With almost A new report from research house over their accounts. The innovative
20 years’ experience in the telecom Arthur D. Little confirmed Qatar’s Ooredoo Algeria Rolls new service was the first of its kind in
the first live location at its head office
in Kuwait City. The sites can achieve
sector, he led Ooredoo Myanmar as Gigabit-speed fibre penetration is the Out 4G Network in 48 Oman and added an important new
speeds of up to 10 Gbps. The company
acting CEO from August 2017. highest in the world. Attributing the dimension to the company’s digital
impressive feat to the rapid roll-out Provinces solutions, making its full portfolio of
also announced the completion of a
network upgrade at more than 1,100
of Ooredoo Fibre, the report showed Following approval from the business-oriented products available
Asiacell Begins Year of that 99 percent of Qatar’s households Regulatory Authority Post and
locations across Kuwait, aimed at
through a single interface.
Network Expansion increasing network capacity.
are covered by fibre, with 88 percent Telecommunications, Ooredoo Algeria
Throughout 2018, Asiacell embarked connected. Ooredoo Maldives completed the roll-out of its 4G
on an ambitious nationwide Partners with UNDP to network to 48 provinces of the country Ooredoo Launches ‘Enjoy
in April. This announcement meant the
programme to upgrade its network
Host Science Festival for company was the first mobile operator
the Internet’ Campaign
across Iraq. Over the course of the
year, it added 50 new 3G sites in new Children to have a presence in every province, a with Messi
parts of the country, restored 200 sites feat achieved in just two years. Ooredoo teamed up with football star
Ooredoo Maldives partnered with
in a number of areas and upgraded the United Nations Development and global brand ambassador Lionel
more than 300 sites to 3G. The network Programme (UNDP) and Hulhumale Messi for a campaign highlighting the
modernisation programme laid the Development Corporation in March to potential of the internet. The integrated
foundations for the planned launch of host a Sci-Tech Festival for Children – ‘Enjoy the Internet’ campaign
4G services. an event designed to allow youngsters featured Messi alongside social media
to explore science and technology influencers from key Ooredoo markets,
through interactive activities. bringing alive the different ways that
the internet contributes to everyday
lives. The campaign saw 22 million
social media engagements, and 31
million video views across Facebook,
Instagram, and YouTube.
16 Ooredoo Annual Report 2018
17

Highlights
of the Year
Key Moments continued

JUL AUG SEP OCT NOV DEC

Ooredoo Is Named Ooredoo Myanmar Ooredoo Showcases Chris Kanter is named Wataniya Mobile Ooredoo Myanmar
Leading Telco in Qatar Reaches Out to Flood- Power of 5G With Trial of new CEO of Indosat Rebrands as “Ooredoo Establishes First 5G-Ready
for Data, Voice and SMS Affected Communities Aerial Taxi Ooredoo in Indonesia Palestine” Technology Centre
Services Following heavy monsoon rains that In a world first, Ooredoo tested a self- Indosat Ooredoo announced the In a historical step for Ooredoo, the Ooredoo Myanmar contributed to
flooded villages in the southern, driving 5G-connected aerial taxi at an appointment of Chris Kanter as Group announced that Wataniya the development of the first 5G-ready
International research company
eastern and central areas of Myanmar, event in Doha in September, designed President Director and CEO in Mobile in Palestine had officially Technology Centre in Myanmar in
Nielsen announced Ooredoo was the
Ooredoo Myanmar stepped in to to showcase the power and potential of October, as part of a reshuffle of been rebranded Ooredoo Palestine December. In collaboration with the
best ‘Overall Network Quality for Voice,
provide emergency supply bags to Ooredoo 5G. The driverless taxi, a large the company’s Boards of Directors in November. This rebrand was part Yangon Technological University and
SMS and Data,’ as shown by consumer
affected communities. Volunteers drone-like vehicle big enough to transport and Commissioners. He had of the Group’s strategy to evolve its Nokia, the Nokia Technology Centre
surveys conducted on Qatari residents
distributed food and aid provisions to two people to a destination up to 20 previously served as an Independent business and create a foundation for was equipped with advanced network
between 2012 and 2018. According
people who had been displaced by the minutes away with a 130km/hour speed, Commissioner and Commissioner of new opportunities, by connecting solutions to support the latest 5G
to the report, Ooredoo Qatar has
floods. is automatic and runs on Ooredoo’s 5G Indosat Ooredoo since 2010. customers in Palestine to Ooredoo’s technology and will offer postgraduate
achieved year-on-year improvements in
network. global community. diploma programmes alongside
customer satisfaction every year since
internships to provide education and
the study began. Ooredoo Tunisia signs exposure to the technology industry.
RNIA Agreement
Ooredoo Tunisia signed an agreement
with the government to support
National Integrated Network
Administration (RNIA), which aims to
establish an integrated network for
local government across 934 sites. The
secure and high-speed network will be
deployed by local authorities to provide
digital services for Tunisian citizens.

Ooredoo Launches “App

Factory” in Oman
Ooredoo inaugurated its new “App
Factory” in Oman, an integrated
and collaborative platform to foster
the development of new services
on the Ooredoo Oman app. The
initiative brought together different
departments within Ooredoo Oman
to facilitate more integrated app
development, as part of the company’s
wider digital transformation efforts.
18 Ooredoo Annual Report 2018
19

Ooredoo’s Values

Transforming Caring
• Simple & Transparent
Connecting
• Access to your community
Challenging
• Leading change and innovation

our business

WHAT IT MEANS
For our customers • Respond Quickly • Delivering relevant services • Passion to be the best
• Show Concern & Respect • Reliable and trustworthy • Youthful spirit

• Be engaged • Work as one team • Make a difference

For our employees • Take ownership • Think like a customer • Go the extra mile
• Help each other • Be open and friendly • Be persistent

As part of its bold new vision, Ooredoo aims to digitally transform its business, so that its operating companies become “Digital
Our Strategy Enablers,” and move beyond traditional telecom products and services by enabling digital services through partnerships with ICT
and over-the-top players.

In 2017, Ooredoo had evolved its vision

We aspire for our
to “Enriching people’s digital lives,”
operating Companies
to reflect its aspiration to continue to
to become “Digital To find new levers
exceed the needs and expectations of
Enablers” of growth, across
consumer, business and governmental To make each OpCo
customers across its markets by delivering relevant as a telco in group, adjacent to
superior products, services and customer the digital age our connectivity
experiences in the Digital Age. heritage while
minimising risk

Protect Grow the B2B(2C) Ecosystem Point E2E

Core Core Platforms Driver Solution Experience

Enriching Traditional Telco Digital Connectivity Digital Enabler

Digital life provider

people's
Our target position is to
Ooredoo Today achieve of vision as the “Digital
Enabler” of our customers to
go beyond telco by enabling
digital services through ICT/

digital
OTT partnerships

In 2018, this new vision was successfully

lives
implemented across all 10 operating
companies and communicated to all Ooredoo has a bold new vision and
employees. has embarked into a major transformation programme

Our Group values – Caring, Connecting,

Challenging - were also extended
to all 10 operating companies, and
In order to achieve this vision, OLD VISION
communicated to all Group employees.
Ooredoo launched a Group-wide
Enriching people’s
transformation programme NEW VISION
lives as a leading
called “Get Digital!” Enriching people’s
international
that includes specific digital DIGITAL lives
communications
ambitions both at Group and
operating company levels. company

We are embarking on a major Group digital

transformation programme:

“Get Digital!”
20 Ooredoo Annual Report 2018
21

Our Strategy

This in turn required new thinking with preferred digital partners of OTTs, interactions from physical to digital Our LEAD Strategy is driving our business • A richer MyOoredoo app In Algeria • Introduction of Chatbot automated
Ooredoo’s long-term LEAD Strategy, OEMs, consumers and businesses in channels. forward. In 2018, it was successfully digital assistants in Myanmar
which was updated in 2017 to include their markets. adopted/implemented across all 10 • The first self-service digital customer
specific priorities below each pillar to • Extend and Leverage – Ooredoo’s operating companies, and communicated care app in Indonesia • Automated sales process “lead-to-
deliver on Ooredoo’s digital aspirations, • Performance Culture – Ooredoo growth strategy will continue to to all employees. activate” in Palestine
and to add a fourth pillar – “Extend and intends to foster a radical culture include opportunistically exploring • Launch of Dimelo Social Media
Leverage” - to reflect its diversification transformation so that it becomes expansion possibilities, as well as In 2018, for the first time ever in solution in Iraq • A ‘Live Chat’ feature on website and
priorities. lean and agile, and to ensure that all specific opportunities to consolidate Ooredoo’s history, we had a fully aligned App in Qatar
employees become digitally skilled its leadership position in each market strategy, a fully aligned vision, and a • Network Analytics and Probes in
LEAD now includes the following throughout the organisation. in the areas of connectivity, consumer fully aligned set of values. Kuwait • Launch of modular digital offer
pillars: content and/or business-to-business or “Tedallel” in Tunisia
• Efficient Models – Ooredoo intends to In 2018, we also started making • A cross-functional Digital Task Force
ICT solutions.
• Market Leader – Ooredoo expects its continue to improve its organisational considerable progress towards in Maldives
operating companies to continue to efficiencies by leveraging advanced implementing our Digital
• Introduction of Facebook Workplace
be leaders in their markets through analytics, re-engineering its cost Transformation objectives. Examples of
in Myanmar
smarter distribution and leading models, leveraging its Group transformative changes across our OpCos
data networks, and by becoming the efficiencies, and moving customer included:

Strategy update | We updated LEAD for digital and diversification Major Digital Transformation innovations across our OpCos

Self-Service Digital Customer Care Apps Launched Dimelo Social Media Solution

Market Performance Efficient Extend and

Leader Culture Models Leverage Launched Sales Agent Price Calculator Cross-Functional Digital Task Force

Launched Social Media Care Introduced Facebook Work Place

• Smarter distribution • Culture transformation • Advanced analytics • Connectivity
• Leading data networks • Lean & Agile • Re-engineered cost models • Consumer content
• B2B/ICT
Network Analytics and Probes Introduced Chatbot Automated Digital Assistants
Preferred digital partner Digital operations Digital interactions

Growth > Market ROCE > WACC “Live Chat” Feature on Website and App Launched Modular Digital Offers

Value Creation (Free Cash Flow + ROCE)

22 Ooredoo Annual Report 2018
23

An industry 2018 saw Ooredoo receive recognition from the industry

leader
and from our communities, winning more than 30 top-tier
awards across a wide variety of categories and countries.

These awards validate our commitment to social and

technological development, in terms of growth, expansion,
and innovation. In particular, Ooredoo’s support for digital
transformation was cited as a key reason for many of these
honours.

Awards and Industry Recognition

Highlights in 2018 include:

February • Human Capital Forum 2018

• Qatar Exchange IR Excellence Programme Ooredoo Palestine: 2018 Excellence in Talent Management, Telecommunications, Gold winner for 5G Ooredoo Myanmar: Best New Product or Service of the Year,
first place MENA region Ooredoo Algeria: Mobile Site and App awards, Gold winner Bronze winner for Pitesan
Ooredoo Qatar: Best Investor Relations Website
for Haya! Chiche Ooredoo Maldives: Most Innovative Company of the Year,
Ooredoo Qatar: Best Investor Relations Officer Bronze winner
June Ooredoo Kuwait: Communications Department of the Year,
• Telecom Asia Awards Gold winner • World Communication Awards
• World HR Congress
Ooredoo Group: Marketing Campaign of the Year, Gold Ooredoo Myanmar: Best Operator in an Emerging Market,
Ooredoo Myanmar: Most Innovative Network
Ooredoo Maldives: Global HR Excellence Award, Best winner for ‘Enjoy the Internet’ Highly commended
Transformation Initiative, Winner for 4G
Strategy in-line with Business Ooredoo Qatar: Most Innovative Company of the Year, Silver
Indosat Ooredoo: Most Innovative Smart Cities Project,
Ooredoo Maldives: Global Best Employer Brand for winner • 2018 Risk Maturity Model Recognition Award
Winner for Kota Digital
Excellence in HR Through Innovation Ooredoo Qatar: Technical Innovation of the Year, Silver Asiacell Iraq: RMM Recognition Award, one of 14 recipients
Ooredoo Maldives: Global Best Employer Brand for Talent winner
• Asia Communications Awards out of 361 applicants
Management Ooredoo Myanmar: Customer Service Department of the
Indosat Ooredoo: Operator of The Year, Highly Commended Year, Silver winner
November
May Indosat Ooredoo: Social Contribution Award, Highly Ooredoo Kuwait: Communications or PR Campaign of the
Commended for Cyber School Programme • Stevie Women in Business
• APAC Stevie Awards Year, Silver winner for iPhone X Launch
Indosat Ooredoo: Corporate Social Responsibility Campaign Ooredoo Myanmar: Female Executive of the Year, Consumer
Ooredoo Myanmar: Innovation in Technology Development,
Bronze winner for 4G expansion
September of the Year, Silver winner for Belajar Services, Silver award
• Telecom World Awards Ooredoo Tunisia: Viral Marketing Campaign of the Year, Ooredoo Kuwait: Woman of the Year, Technology, Silver
Indosat Ooredoo: Innovation in Living, Learning and
Silver winner for Migalo award
Working Environments, Silver winner for Quipper Ooredoo Oman: Best National Operator Network, Winner
Ooredoo Group: Company of the Year, Telecommunications, Ooredoo Oman: Achievement in Women-Related Corporate
Indosat Ooredoo: Innovative Use of Technology in Customer Ooredoo Oman: Digital Content Services Award, Winner
Silver winner Social Responsibility, Gold award for Incubators for Women
Service, Telecommunication Industries, Bronze winner for
Data Centres Indosat Ooredoo: Best New Product or Service of the Year,
• 10th Middle East Investor Relations Awards
Indosat Ooredoo: Innovative Use of Technology in Customer Bronze winner for 4.5G
Ooredoo Qatar: Best investor Relations Professional
Service, Telecommunication Industries, Silver winner for Ooredoo Qatar: Communications or PR Campaign/
Satellite Services Programme of the Year, Bronze winner for 5G
Indosat Ooredoo: Innovation in B2B Services, Bronze winner October
for IoT Connect • IBA Stevie Awards
Ooredoo Qatar: Best New Product or Service of the Year:
24 Ooredoo Annual Report 2018
25

Our
Businesses Enhancing
customer
experience
Revenue
QR 29,927m
Ooredoo is a leading international
communications company, having operations
in the Middle East, North Africa and Southeast
Asia and Subcontinent. In every market, we
strive to enrich the digital lives of our customers
and deliver a full range of engaging, innovative
communication services.
26 Ooredoo Annual Report 2018
27

Ooredoo Building a digital

future
Qatar “2018 saw us consolidating our
position at the forefront of the
telecommunications industry; as a
true digital enabler, as a pioneer in
5G delivery, and as a key contributor
to Qatar’s progressive economy.
Our Businesses continued We are proud of our position as
market leader and have embraced
our responsibility to help build a
successful digital future for our
customers, shareholders and for
Overview commercial availability. This included the In the consumer market, Ooredoo Qatar the community.
Ooredoo is Qatar’s leading installation of more 5G-enabled network launched eSIMs in October and reached
towers and rigorous testing. In December, the historic milestone of connecting As always, we remain committed
communications company, and the
the Communications Regulatory Authority 400,000 homes to its fibre network in to improving people’s digital lives,
flagship operator of the Ooredoo
assigned the 5G spectrum for commercial 2018. supporting our community and
Group (Ooredoo Q.P.S.C.). Since
use and granted Ooredoo Qatar its full developing our business, within the
inception, the company has driven ICT
commercial licence for 5G. Supporting the customer experience framework of Qatar’s drive towards
innovation by providing its consumer
national transformation.”
and business customers with leading February 2018 saw the launch of a
life-enhancing products and services. The company also expanded its portfolio number of customer satisfaction
Waleed Al Sayed,
Ooredoo is committed to promote of smart business solutions, recognising enhancement initiatives referred to as
CEO,
human development and support the significant potential for growth in ‘Freedom’, offering customers worry-
Ooredoo Qatar
Qatar’s rapidly growing knowledge- Qatar’s dynamic commercial sector. free roaming and local data usage
based economy, in line with the Qatar The launch of a new business mobile enhancement.
National Vision 2030. solution, ‘Aamali,’ in March, generated a
positive response, with flexible plans that The company further improved digital
Ownership offered varying allowances and add-on customer interactions, with programmes
Ooredoo in Qatar is 100% owned and options across local and international to enhance touchpoints across the
managed by Ooredoo (Ooredoo Q.P.S.C.). minutes, data and roaming minutes. business and provide customers with
greater flexibility for self-care. More than
Highlights A major partnership was signed between half a million new users downloaded the
Ooredoo Qatar and Microsoft in June, Ooredoo app in 2018, encouraged by a
Ooredoo Qatar continued its market
enabling Ooredoo to be the first telecom number of key enhancements.
leadership in 2018, as the market
provider in the Gulf to offer Microsoft Live Chat, designed to offer customers
saw a return to stabilisation after the
Azure stack hybrid cloud. Ooredoo Qatar
challenging economic conditions in 2017.
and global fleet management leader
Consumer confidence rose during the
Geotab launched the Fleet Management an easier way to contact the company, fan-created films, proved to be with new technology trends. A process
year, with preparations for hosting the
IoT Solution to business customers in July. was launched in March for the website tremendously popular. automation exercise across the entire
2022 FIFA World Cup helping to improve
September saw Ooredoo Qatar achieve and the app. A new Aamali portal enabled organisation ensured agile and efficient
sentiment and drive investment in
Gold-Tier Cloud Service Provider with Dell business customers to follow up on Organisational Improvements operations. Ooredoo Qatar identified
the market.
EMC, the world’s top provider of cloud service requests, as well as managing Ooredoo Qatar introduced new cost technical and digital competencies that
infrastructure. their services and products. Internal optimisation measures in 2018 to support will prepare the organisation’s skillset
Ooredoo Qatar continue to maintain a
processes were updated to leverage EBITDA margins and free cash flows. for the future, hosting a number of
79% revenue market share during 2018.
The focus on business-to-business automation and provide greater speed The company continued the deployment workshops during the year to encourage
services helped to secure a number of and flexibility to employee interactions. of network sites based on value design-led thinking to reduce risk when
The highlight of the year for Ooredoo
significant customer agreements across a Ooredoo Qatar’s innovative advertising generation potential to ensure efficient bringing new products to the market.
Qatar came in May, with the launch of
portfolio of connectivity and ICT services approach also resonated with customers use of Capex.The company also
the world’s first live 5G network in Doha.
in 2018, including Doha Bank, Ministry in 2018. The ‘Ooredoo High 5’ campaign, restructured major business units to align
Following that important milestone,
of Public Health, Hamad International which encouraged people to submit
the company worked hard to ensure
Airport, Qatar Central Bank, beIN Sports
the network was ready and able to
and Government Data Centre.
support 5G-compatible devices ahead of
Total customers (thousands) Financial performance

Operator share of Group

3,281 2014 2015 2016 2017 2018

Revenue QR millions 7,148 7,897 8,007 7,791 7,742

2018 3,281
EBITDA QR millions 3,448 3,995 4,050 3,916 3,987
2017 3,436
EBITDA margin 48% 51% 51% 50% 52%

3% 26% 33% %18

15%
2016 3,484
Blended ARPU* QR 128.1 118.5 120.9 112.8 114.3
2015 3,506 Employees 1,614 1,554 1,530 1,490 1,362
Customers Revenue EBITDA Capex
2014 3,155 * Blended ARPU is for the three months ended 31 December.
28 Ooredoo Annual Report 2018
29

Ooredoo Investing in
the future
Qatar (continued) Ooredoo will continue
developing young and ambitious
Qatari leaders through its
“Many Paths, One Direction” and
#TakingTheLead campaigns.
Our Businesses continued

Standing with the community people’s digital lives, delivering value

Ooredoo Qatar is committed to through digitalisation and continued
supporting the community. In 2018, it investment in networks.
continued to sponsor the Qatar Business
Incubation Centre (QBIC), assisting young Ooredoo Qatar will strive to consolidate
entrepreneurs to facilitate start-ups and its market share and ensure customers
new technology-focused businesses. enjoy the best possible customer
experience. There will be increased
Ooredoo Qatar participated in the digitalisation of products, services and
Hamad Bin Khalifa University Orientation channels, enabling automation and the
Resource Fair at the Education City personalisation of service provisioning.
Student Centre and hosted activities
to mark International Labour Day, Beyond the core connectivity markets,
distributing snacks, international calling Ooredoo Qatar will focus on B2B ICT
vouchers and Hala cards to workers in propositions. This is an area of significant
camps in industrial areas. potential and growth, where the company
can leverage its expertise, experience and
In line with its environmental offerings.
responsibilities, the company launched an
aggressive initiative to become paperless, With the 2022 FIFA World Cup on the
reducing paper consumption across the horizon, Ooredoo Qatar will continue
business by 60% compared to 2017. to push forward in deploying the assets
required for staging the event; a strategy
The company also formed several which, although requiring investment at
valuable partnerships with local entities the outset, will deliver strong results in
to support vulnerable sectors of the terms of future revenues.
community. Ooredoo Qatar was the
Official Telecommunication Partner of the
Al Noor Institute for the Blind graduation
event and sponsor of the International
White Cane Day celebrations. It held
an exclusive educational event raising
awareness of disabilities in Qatar with
Best Buddies Qatar and distributed
pink ribbons in Ooredoo shops with the
Qatar Cancer Society. Ooredoo Qatar
was the Official Telecommunication
Sponsor of CUDOS 2018 (Conference on
Understanding Molecular Mechanisms in
Cardiovascular Biology Diabetes, Obesity
and Stroke).

Outlook
Looking ahead, Ooredoo Qatar has set
itself challenging strategic objectives
to ensure continued market leadership
within network, customer experience
and digital, supported by developing the
potential of our employee talent pool. The
company will retain its focus on enriching
30 Ooredoo Annual Report 2018
31

Indosat Ooredoo Focusing on

customers
Indonesia “Despite a challenging year for the
Indonesian telecommunications
industry, Indosat Ooredoo
demonstrated its resilience and
adaptability to a new market
environment.
Our Businesses continued
We expanded LTE coverage outside
of Java and now cover approximately
80% of the population. We have
introduced innovative products
Overview 2018 saw Indosat Ooredoo launch a 48% increase in purchase transaction that have created significant
In 2018, Indosat Ooredoo number of new innovative products completions and a reduction in customer differentiation in terms of product
demonstrated the resilience of its and services designed to differentiate complaints by more than 60%. positioning. We also enhanced our
business by navigating a challenging to better monetise data and attract B2B business, partnering with the
telecommunications market in customers. The company launched Indosat Ooredoo embarked on a journey government to develop Kota Digital
Indonesia. New government regulation Unlimited and Yellow, a product that of strategic network expansion and Indonesia, a smart cities initiative
surrounding the registration of SIM provides customers with YouTube capacity building, enabling the company recognised as the most innovative
cards led to the erosion of subscriber and Instagram access, driving up data to seize the potentially explosive growth smart city project by Telecom Asia
base across the industry. The industry revenues by converting non-data users in data usage across Indonesia and in 2018.”
was also affected by changing to data users. Similarly, the company meet the country’s future connectivity
consumer behaviour, with users supported its customer acquisitions by requirements. The company expanded Chris Kanter
moving away from higher margin voice launching low-cost starter packs that its network coverage in targeted areas President Director & CEO Indosat
and SMS services towards lower margin have resulted in the doubling of customer outside Java while also building up Ooredoo
data services in line with global trends. acquisitions since its launch. network capacity in key territories, with
approximately 17,000 4G sites covering
Erosion of the customer base impacted Other initiatives designed to complement 80% of the country’s population.
the company’s financial performance, the company’s data strategy and reduce
with challenges in revenue growth churn included the introduction of data The company also made notable strides
leading to a corresponding decrease vouchers, which enabled customers to in the B2B segment, partnering with the
in EBITDA. Several cost optimisation reload their data and enjoy seamless government on key digital initiatives.
initiatives were deployed to offset the data connectivity. Data vouchers now Indosat Ooredoo supported cities and
decline in revenues including reducing contribute more than 30% of Indosat regions in the country with Kota Digital
costs of sale through interconnect Ooredoo’s data revenue. For customers Indonesia, a smart cities initiative to
and SIM card cost optimisations. who enjoy heavy data usage, Indosat manage public services. The project
Insourcing and more efficient spare parts Ooredoo launched EXTRA Data, a booster involved offering a digital library and Indosat Ooredoo also participated in During the year, the company’s CSR capabilities to attract a new generation of
management helped reduce designed to improve customer experience Wi-Fi on public transport as well as several government projects, mainly on efforts touched over 700,000 beneficiaries tech-savvy users. Beyond the customer
network costs. whilst monetising the extra data usage. an e-Tax and e-Government system, public transportation such as providing across the nation. Indosat Ooredoo’s segment, Indosat Ooredoo will continue
amongst other services. The project was railway system telecommunications for commitment to serving local communities to innovate in the B2B segment to move
To address the shift in market Customer experience forms an integral recognised as the most innovative smart a transportation project in Indonesia. was recognised at the 10th Annual Global towards a digital apps ecosystem by
dynamics following the implementation part of Indosat Ooredoo’s brand city project by Telecom Asia in 2018. Additionally, the company has been CSR and Governance Awards 2018, where focusing on horizontal applications which
of the new regulation, Indosat identity. In 2018 the company evolved appointed to create a total-solution the company was presented with a special are relevant across industries, such as
Ooredoo implemented a new multi- its self-care app, MyIM3, into a customer To strengthen our capabilities on digital airport information system in West Java recognition award for 5 consecutive years productivity and collaboration apps and
faceted strategy that focuses on long engagement and acquisition platform. infrastructure we launched Indosat International Airport Kertajati. of CSR excellence. workforce management, as well as on
term growth. The strategy includes MyIM3 has become the highest rated Ooredoo IoT Connect, a web-based, easy- several vertical industries such as SME,
increased investment in network roll- telecommunications app in the market to-use, secure connectivity management During 2018 Ooredoo Indosat progressed Outlook hospitality, transportation and retail
out, especially outside of Java, tighter place gaining 16 times more monthly platform which enabled enterprise with its three major CSR programme Looking ahead to 2019, data is expected solutions.
cost discipline and continuing to offer active users since its launch in 2017. customers to visualise, monitor and pillars: women’s empowerment, education to be the key driver of growth, with
innovative, transparent products at an The company also enhanced its customer control SIM cards on their equipment and and innovation as well as health. Indosat Ooredoo capitalising on its digital
affordable price. service and procedures, which led to a machine in real time.

Total customers (thousands) Financial performance

Operator share of Group 58,074 2014 2015 2016 2017 2018

Revenue QR millions 7,395 7,274 7,994 8,145 5,919

2018 58,074
EBITDA QR millions 3,279 3,303 3,724 3,728 1,969
2017 110,200
EBITDA margin 44% 45% 47% 46% 33%
2016 85,654
50% 20% 16% %18
43% Blended ARPU* QR 8.0 7.3 6.7 5.0 6.1
2015 69,737 Employees 4,100 4,320 4,421 4,391 3,700
Customers Revenue EBITDA Capex
2014 63,298 * Blended ARPU is for the three months ended 31 December.
32 Ooredoo Annual Report 2018
33

Ooredoo Digital
transformation
Kuwait “Ooredoo Kuwait is a key player in
helping the government to achieve
the country’s Vision 2035 for a “New
Kuwait.” Our company’s services
and products around ICT will be at
the heart of a “New Kuwait” as the
Our Businesses continued government looks to digitise the
country and accelerate adoption
of transformative IoT (Internet of
Things) and smart city technology
for the benefit of people and
Overview Kuwait’s entrepreneurs and business costs and drive efficiency; it also shifted businesses.”
In 2018 Ooredoo Kuwait made leaders operate in an increasingly towards centralised sourcing, and began
significant progress towards digital economy and Ooredoo Kuwait is to leverage synergies across the Ooredoo Mohammed bin Abdullah Al Thani
becoming the leading integrated ideally positioned to empower Kuwait’s Group to increase efficiency and reduce CEO, Ooredoo Kuwait
communications provider in Kuwait, business community by driving digital costs.
with good growth across its consumer transformation and enriching people’s
and enterprise divisions. The company digital lives. Through sponsorship of B2B Supporting the development and
captured growth in an highly events and seminars including fintech empowerment of youth is the
penetrated market by strategically and start up gatherings, Ooredoo Kuwait cornerstone of Ooredoo Kuwait’s
targeting a higher value customer embarked on a campaign to educate the CSR strategy. In 2018 the company
base, and managed to increase its business community about going digital. sponsored the third consecutive year of
revenue market share, significantly the Arab Youth Volunteer Award, which
outperforming the competition. Despite a challenging market for attracted hundreds of young people
telecommunications services in Kuwait, from around the region. The programme
During 2018 Ooredoo Kuwait invested which is characterised by intense equips participants with the right set
in enhancing digital channels, including competition, Ooredoo Kuwait announced of skills and tools before matching
its mobile app and self-service kiosks, good financial results for 2018. them with volunteering opportunities.
creating a convenient and flexible user Revenues grew 8.2%, outperforming the
experience. This strategy resulted in a competition. The company also increased
significant improvement in the company’s its customer base in an already highly
overall customer satisfaction score and penetrated market. The company’s
contributed towards the 4.3% growth in customer base is now 2.31 million, up
customer base achieved during the year. 4.3% from the previous year, achieving
Ooredoo Kuwait’s position as the second
The company’s award-winning annual LinkedIn, launching the ‘Ooredoo leading integrated communications
Ooredoo Kuwait is committed to largest operator in terms of subscriber
volunteer programme continues to be a LinkedIn Day’. The team coached provider in Kuwait by focusing on
supporting the government’s Vision market share.
huge success, drawing a greater number employees on how to project the right customer experience leadership, product
2035 for a “New Kuwait” by meeting the of participants every year since its launch image on their online profiles and development and innovation, as well
digital needs of Kuwait’s people and Ooredoo Kuwait’s strong performance
in 2015. emphasised the importance of LinkedIn as digital transformation initiatives.
businesses. The company partnered with was supported by the launch of
in attracting local talent. Following the The enterprise business will become
SAP to provide best-in-class enterprise numerous innovative products and
People are a key component in Ooredoo event, Ooredoo Kuwait increased its an increasingly important contributor
cloud services and leveraged its state-of- services designed to retain a high value
Kuwait’s strategy to become the leading LinkedIn followers to almost 40,000 from to revenue as Ooredoo Kuwait further
the-art data centres to provide strategic user base. The company also limited the
enterprise clients with end-to-end IT integrated communications provider in just 5,000 in 2017. develops its digital and ICT offerings to
impact of ARPU erosion by offering higher
solutions. Ooredoo Kuwait secured a the country. The company launched an support the government’s vision for a
value bundles with a focus on exceptional
number of key contracts in 2018, most organisation wide e-Learning programme Outlook “New Kuwait.”
customer experience. EBITDA remained
notably with Boursa Kuwait for the to upskill employees to meet future Looking ahead to 2019, Ooredoo Kuwait
solid at QAR 662 million, a reflection
provision of disaster recovery services business needs. Ooredoo Kuwait also will advance its strategy to become the
of the company’s strategy to enable
at its data centre and Kuwait & Middle formed a strategic partnership with
execution through a lean model. In 2018
East Financial Investment Company for
running their financial services from our Ooredoo Kuwait employed value-based
Data Centre. network planning to reduce network
Total customers (thousands) Financial performance

Operator share of Group 2,311 2014 2015 2016 2017 2018

Revenue QR millions 2,149 2,275 2,382 2,675 2,905

2018 2,311
EBITDA QR millions 473 620 614 652 662
2017 2,216
EBITDA margin 22% 27% 26% 24% 23%
2016 2,346
2% 10% 5% %18
6% Blended ARPU* QR 65.6 71.7 66.5 72.7 68.8
2015 2,269 Employees** 856 737 1,018 1,140 1,225
Customers Revenue EBITDA Capex
2014 2,515 * Blended ARPU is for the three months ended 31 December.
** Employees at Fastelco is included from 2016
34 Ooredoo Annual Report 2018
35

Ooredoo A digital
telco
Oman “Testament to our strength in ICT
and the ground-breaking solutions
developed to meet the evolving
needs of the Sultanate, we are
proud to be Oman’s digital partner
of choice, with several contracts
Our Businesses continued signed in 2018 to supply smart city
solutions and digital services.

We also lead the market in

consumer innovation with the
Overview Chatbot that engages customers digitally, The service enables residents in Muscat New Shababiah, Oman’s first in-
Ooredoo Oman made excellent answers queries instantly and provides and Salalah to enjoy super-fast speeds of app prepaid proposition enabling
progress in driving forward its digital information on products and services. up to 1Gbps. The company’s wireless and customers to address all their
transformation agenda in 2018, signing The service is the first of its kind in the fixed line offerings are complemented by connectivity needs digitally,
key ICT contracts with government Sultanate and further distinguishes its fixed LTE, providing customers with a including the purchase and
bodies and major organisations, while Ooredoo Oman from its competitors. convenient plug and play solution. delivery of SIM cards.”
also launching key consumer-facing Throughout the year the mobile app
products and services. was enhanced with several new features The company’s commitment to Ian Dench
designed to bring convenience and maintaining the highest operating CEO, Ooredoo Oman
Ooredoo Oman is proud to be Oman’s flexibility to its customers, now over standards resulted in Ookla recognising
digital partner of choice in delivering 400,000 active users. Ooredoo Oman’s network as the fastest
in the country. Testament to Ooredoo Total customers (thousands)
smart city solutions. The company
signed an agreement with the National
Electricity Centre (NEC) to build a state-of-
Expanding its consumer service offering
beyond traditional voice and data
Oman’s network strength, its services
continued to run through natural 3,014
the-art Internet of Things network system services, the company launched Ooredoo disasters, namely the cyclones that
to facilitate seamless convergence of TV in 2018, delivering a broad selection of affected Oman.
2018 3,014
technologies, systems and services. entertainment options to its customers.
In addition, Ooredoo Oman signed an Alongside content, Ooredoo Oman Financially, Ooredoo Oman performed 2017 3,072
agreement with Oman Aquaculture continued to expand its B2B offerings, well; revenue grew by 3.7% on like-to-like
Development Company to provide a full signing new contracts with entities in the basis, stimulated by the growth in fixed 2016 2,947
suite of cloud-based data services. The energy, utilities and oil and gas sectors. line and a strong performance of the
company also signed contracts with other Ooredoo Oman is preparing the mobile and wholesale divisions. 2015 2,788

major organisations such as Petroleum Sultanate for a new era in connectivity

by upgrading its network infrastructure 2014 2,602
Development Oman (PDO), Shell, Bank
Dhofar and the Ministry of Endowment to facilitate the launch of 5G. In 2018
and Religious Affairs to provide a range the company started rolling out pre-
of digital services. 5G technology across the country to The company also increased market In the aftermath of Cyclone Mekunu the as cloud services and IoT, as well as
enhance Ooredoo’s high-speed 4G share for fixed line services, growing company provided relief to the affected seeking opportunities to target high-
As part of the company’s goal to digitise network, the Supernet. by 29.8%. areas of Salalah as part of its annual growth sectors and verticals such as Oil
customer experience, Ooredoo Oman goodwill journey during the holy month & Gas and SME. The fixed line business
launched the country’s first in-app Ooredoo Oman also made good Despite an increase in fixed costs, of Ramadan. is expected to be the fastest growing
prepaid proposition New Shababiah, progress with the expansion of its 4G EBITDA margins were stable at 54.4% opportunity for 2019 and the company
enabling customers to do everything network, exceeding its own goals for and benefitted from cost optimisation Outlook is well-prepared to capitalise on this
digitally: subscribe, have their SIM 4G coverage. The company’s Supernet initiatives. Initiatives included reducing growth.
Looking ahead to 2019, Ooredoo Oman
delivered to their home, top up and fully now covers over 95% of the Sultanate’s the cost of physical recharges by using will strengthen its digital leadership
manage their service through the app. population, offering customers a fast digital recharges, as well as operations position through investment in
and reliable wireless service. Ooredoo optimisations and automation. transformative technologies such
Another initiative designed to enhance Oman’s strategy stretches beyond its
customer experience was the launch wireless offering with the expansion of During 2018 Ooredoo Oman made a
of Saeed, an AI (Artificial Intelligence) its Super Fibre home internet services. significant investment in its people, Financial performance
launching its leadership development
2014 2015 2016 2017 2018
programme Qadaa, which provides
Operator share of Group managers with the skills to become Revenue* QR millions 2,231 2,475 2,639 2,670 2,685
effective leaders.
EBITDA QR millions 1,115 1,302 1,404 1,429 1,463
In support of developing local
communities, Ooredoo Oman launched EBITDA margin 50% 53% 53% 54% 54%
the Oman Digital Tutorial App, a portal Blended ARPU** QR 66.8 67.0 66.6 62.6 60.1
providing free digital education to all. The
3% 9% 12% %18
10% company also supported 100 secondary Employees 1,049 1,024 1,056 1,044 968
school students with special needs from
Customers Revenue EBITDA Capex underprivileged families across Oman by * Commission on cards was netted against revenue in 2018.
providing laptops and new wheelchairs. ** Blended ARPU is for the three months ended 31 December.
36 Ooredoo Annual Report 2018
37

Asiacell Expanding
3G coverage
Iraq “Asiacell maintained revenue market
leadership in Iraq and successfully
grew its customer base to more than
14 million subscribers.

2018 saw Iraq make good progress

Our Businesses continued in improving its security situation
whilst rebuilding efforts continued
across liberated territories. We
invested heavily to connect newly
liberated territories across the
Overview of stores to 104. The stores provide a engage and empower employees. country to support Iraq in its journey
In 2018 Iraq made great strides in conduit for customers to explore Asiacell’s The company launched the first Digital of economic redevelopment. During
improving the security situation in offerings and also act as a service centre. Leap Seminar and Town Hall to facilitate the year we brought over 200 new
the country. More territories were In line with local norms, Asiacell launched awareness and adoption of the company’s sites on air and connected over 500
liberated, which paved the way for a special service for female customers digital future strategy and created the sites to 3G.”
network roll-out and reconnections. with a dedicated female representative in Reward & Recognition entity within HR
Despite this, challenges persist, with stores. to celebrate the contribution of key Amer Al Sunna
intermittent disruptions to transport employees to business growth. CEO, Asiacell
links affecting supply chains and with As the economy in Iraq grows and
banking limitations making cash business begins to scale up, demand for Asiacell continues to be committed
payments and deposits challenging. B2B telecommunication services is set to to social responsibility to support the
To provide a reliable service to its expand. Asiacell is prepared to capture community. This year the company
customers, Asiacell put in place a this growth and in 2018 the company donated US$1 million to help those
strong contingency plan that enabled launched its B2B line offering a range of affected by the Basra water crisis,
the company to keep its network services to address the needs of Iraq’s supplied equipment for several computer
running with minimal disruption to business community and create a new labs in universities across Iraq and
service. The company’s extended revenue stream. These services include participated in the Marshland reviving
network, superior customer experience business lines with special offers, multiple initiative.
as well as consistent reliability enabled internet packages and machine to
it to take the lead in revenue market machine shared data packages.
share.
2018 was also a year of good financial
Asiacell is committed to expanding its returns. Asiacell increased revenues by
network across the county to support the 3%, benefitting from network expansion
redevelopment of Iraq’s infrastructure and customer acquisition. EBITDA
and economy by providing high-quality increased 6% as a number of cost
connectivity solutions. The company optimising measures were implemented. Outlook sectors as a strategic area for growth
made good progress with its “Hot Zone” These included optimising fuel contracts, With more areas liberated and a in 2019 and beyond and is preparing a
restoration strategy, putting 200 sites on insourcing contract validation processes significant improvement in the security comprehensive portfolio of solutions
air and connecting over 500 sites to 3G and increasing the share of e-payment situation, 2019 promises good growth to service this sector. The potential
in 2018. Network expansion contributed channels for customers, thereby reducing opportunities across both customer and approval of LTE licences in 2019 will have
to the growth in the company’s customer fixed and administrative costs. business segments. Asiacell will grow a significant impact on the development
base, which is up 10% compared to 2017. and develop its B2B offering to bring of the telecommunications industry in
The company invested in its digital more digital services and solutions to Iraq and Asiacell is committed to playing
Asiacell strengthened customer transformation future by enhancing the enterprise market. The company has a leading role in future developments.
experience and ease of access to people’s digital skillset, automating identified the industrial, service and SME
telecommunication services with the internal processes and developing new
opening of 31 new stores across the commercial digital initiatives. Asiacell
country, bringing the total number recognises its people are its key assets
and continues to roll out initiatives to
Total customers (thousands) Financial performance

Operator share of Group 14,232 Revenue* QR millions

2014

6,298
2015

4,884
2016

4,217
2017

4,490
2018

4,449

2018 14,232 EBITDA QR millions 2,939 2,136 1,923 1,982 2,093

2017 12,925 EBITDA margin 47% 44% 46% 44% 47%

Blended ARPU** QR 40.0 36.6 30.3 29.9 26.8

12% 15% 17% %18
3%
2016 11,987

2015 10,794
Employees 2,771 2,733 2,747 2,773 2,832
Customers Revenue EBITDA Capex
* Commission on cards was netted against revenue in 2018.
2014 12,302
** Blended ARPU is for the three months ended 31 December.
38 Ooredoo Annual Report 2018
39

Ooredoo Network
modernisation
Algeria “Differentiation was a key factor
in driving our success in 2018,
with Ooredoo Algeria once again
establishing its data leadership, being
the first and only operator to provide
all 48 wilayas and almost half of
Our Businesses continued the population with 4G technology,
and 85% of the population with 3G
technology.”

Abdellatif Hamad Daffalah

Overview The company’s commitment to provide a In 2018 Ooredoo Algeria affirmed Deputy CEO, Ooredoo Algeria
2018 was a challenging year for the fast and reliable service for its customers its commitment to reducing its
telecommunications industry in was recognised by Ookla which confirmed environmental footprint by harnessing
Algeria, with increased competition in Ooredoo Algeria’s position as the fastest the most efficient technologies and
the market leading to aggressive price internet mobile network in the country. optimising network engineering.
promotions and margin compression.
Weakening purchasing power in the For Ooredoo Algeria, maintaining
economy affected growth, while new leadership goes beyond the strength of
government taxes and tariffs further its network. Customers are at the heart of
impacted industry performance. the business, and in 2018, the company
enriched its offering with new products
Despite these challenges, Ooredoo specially designed for youth and families.
Algeria had a good year, doubling
capital expenditure to create the largest ‘Haya music’, an online music streaming
4G network in the country, while also application designed in Algeria for
launching new consumer products which Algeria, was launched to boost the
helped to more than double data traffic in company’s digital content portfolio whilst
2018 compared to the previous year. also supporting local developers.

Strategic data initiatives included ‘My Ooredoo’ app was released during
partnering with social media providers the year offering customers a complete
such as Facebook and content providers, self-care service experience in addition to
which enabled Ooredoo Algeria to a host of exciting offers and promotions.
capture the markets’ largest share of The app now boasts over 170,000 users.
data users. A milestone for the year was A new football sponsorship strategy was Outlook
Ooredoo Algeria believes in the power deployed, targeting regional coverage
Ooredoo Algeria reaching 6 million fans In 2019 Ooredoo Algeria will leverage its
of entrepreneurship to transform the by sponsoring four additional top local
on Facebook, placing it as number one strong brand reputation as the leading
economy and therefore set up ‘Injaz clubs. These included MC Alger and JS
in the country in terms of brand and service provider in the country, utilising
Eldjazair,’ providing youth with an Kabylie in the central region, MC Oran
engagement on the social media network. its market leading 4G network to drive
entrepreneurship programme as well in the western region and ES Sétif in the growth. The company will also continue
Supporting the increase in data traffic as creating new start-up incubators to eastern region. to develop its portfolio of products
and data users is Ooredoo Algeria’s support the local ecosystem.
and digital services to create a richer
market leading network infrastructure, customer experience.
Financially, 2018 was a challenging year
the company added 1400 4G sites to its
for Ooredoo Algeria, with increased
LTE network making Ooredoo Algeria’s 4G
competition and volatile economic
network the first in the country to serve
conditions. Ooredoo Algeria concentrated
48 wilayas and cover 48% of the country’s
on network expansion and product
population.
differentiation during the year to enable the
company to capture growth in the future.
Total customers (thousands)
Financial performance

Operator share of Group 13,887 2014 2015 2016 2017 2018

Revenue QR millions 4,623 4,023 3,732 3,422 2,760

2018 13,887
EBITDA QR millions 1,481 1,474 1,308 1,506 1,029
2017 14,294
EBITDA margin 32% 37% 35% 44% 37%

12% 9% 8% %18
11%
2016 13,769
Blended ARPU* QR 29.4 22.9 21.2 18.2 15.5
2015 13,037
Employees 2,895 3,008 2,830 2,785 2,807
Customers Revenue EBITDA Capex
2014 12,225
* Blended ARPU is for the three months ended 31 December.
40 Ooredoo Annual Report 2018
41

Ooredoo Strengthening
our position
Tunisia “As the world moves towards an
increasingly digital future, Ooredoo
Tunisia has forged strategic
partnerships in the digital space to
remain at the forefront of the industry.
In 2018 we cemented our leading
Our Businesses continued position in the telecommunications
market with more than 41% mobile
market share, an increase in our B2B
revenues and product offering, as well
as further investment in the fixed line
Overview To enable better customer access simulator enabling users to create a to accelerate growth.”
Ooredoo Tunisia confirmed its position throughout the country, Ooredoo Tunisia bespoke package to meet their specific
as the Number one telecom player in invested in developing its distribution requirements. Youssef El Masri
Tunisia throughout 2018 by providing network and in 2018, it boasted 144 CEO, Ooredoo Tunisia
high quality services and innovative outlets, making it the largest in the Beyond the consumer segment, Ooredoo
products in the mobile and fixed space. country. A strong distribution network is Tunisia developed a wider B2B offering. In
a key asset in maintaining the company’s 2018 the company signed a contract for
Despite challenging economic conditions mobile leadership in Tunisia, where shops the RNIA project (Réseau national intégré
in 2018, the Tunisian telecommunications are important avenues for customers de l’administration des collectivités
market has recovered, and Ooredoo to explore and purchase products locales) with the government, providing
Tunisia was able to leverage its leading and services as well as for servicing local authorities with access to a secure
position in the market to benefit from this requirements. and high-speed network to enable better
growth. delivery of digital services to Tunisian
During 2018 Ooredoo Tunisia continued citizens. The project involved setting an
The company grew its mobile customer to market its products in innovative integrated network of 934 sites and is
base by 7% during the year to 8.8M ways, creating viral and award-winning an example of Ooredoo Tunisia’s B2B
subscribers and successfully captured content to promote the company’s strategy to focus on creating innovative
a market share of 41%. The success products and service. Ooredoo Tunisia’s premium services to acquire high value
of Ooredoo Tunisia’s mobile business digital campaign, in partnership with clients.
is underpinned by the strength of its comedian Wassim Herissi (Migalo) and
network which was recognised as the the football club Paris Saint-Germain
leader in 4G downloads by Ookla. broke all national records in terms of
views and shares on social networks and
won the Silver Stevie Award for digital
campaigns, in addition to other awards
and accolades.

Moving towards a digital future, Ooredoo Ooredoo Tunisia announced good Outlook
Tunisia launched its ‘My Ooredoo’ app financial results for 2018. Revenues In 2019, Ooredoo Tunisia will accelerate
during the year creating a seamless and increased 9% in local currency terms, digitalisation activities and partnerships
convenient new platform through which benefitting from a recovery in the mobile to maintain its leading position in
digitally savvy customers can interact segment. EBITDA increased 2% in local the telecommunications market. The
with the company. ‘My Ooredoo’ app currency, supported by savings from company will focus on developing new
allows customers to monitor usage, top network optimisation, cost control and and engaging ways to interact with
up credit and earn rewards. The company other operational efficiencies. customers and offer products that will
also launched ‘Tedallel,’ a multi-platform maximise value.
offering providing users with the flexibility 4G network indoor coverage is 88 %
Ooredoo Tunisia almost doubled its to choose between voice, data or value-
fixed customer base in 2018 to more added services such as music, video and
than 236K customers. gaming. The platform includes a digital
Total customers (thousands)
Financial performance

Operator share of Group 9,052 2014 2015 2016 2017 2018

Revenue QR millions 2,288 1,803 1,714 1,530 1,526

2018 9,052
EBITDA QR millions 1,072 746 686 606 595
2017 8,352
EBITDA margin 47% 41% 40% 40% 39%

8% 5% 5% %18
3%
2016 7,961
Blended ARPU* QR 20.7 14.7 14.0 11.9 12.3
2015 7,491
Customers Revenue EBITDA Capex Employees 1,665 1,640 1,613 1,600 1,585
2014 7,552
* Blended ARPU is for the three months ended 31 December.
42 Ooredoo Annual Report 2018
43

Ooredoo Expanding 4G
Myanmar
“Beyond our robust financial
performance and the expansive
digital transformation initiatives
undertaken this year, we are proud
to be recognised as the leading
contributor to CSR activities for the
people of Myanmar.”

Vikram Sinha,
Our Businesses continued CEO, Ooredoo Myanmar

Overview connectivity needs of communities in Ooredoo Myanmar is proud of its role

2018 was characterised by network Myanmar. BYOP enables customers to in developing local communities. In
expansion and digital transformation. customise their mobile plans so that 2018, the company contributed towards
Ooredoo Myanmar expanded its 2G they can subscribe to the services that the United Nations Office for Project
and 4G networks in parallel to serve are most important to them. The My Services’ scheme to improve primary
the divergent needs of Myanmar’s Ooredoo App also serves as the gateway health services in Myanmar. Ooredoo
rural and urban communities. to Ooredoo VIP, a new customer loyalty Myanmar is the first private entity to
The company’s 4G network leads the programme designed to reward Ooredoo dedicate funds to the UNOP’s projects
market and now serves 300 townships, Myanmar’s customers with exciting offers through a US$3million partnership with
with Ookla recognising Ooredoo as and promotions. the Myanmar Government that involves
the provider of the fastest 4G network building 21 healthcare facilities in eight
in the country. The strength of The Ooredoo Myanmar brand continues regions across Myanmar, 16 of which
Ooredoo Myanmar’s network, along to be an effective tool for engaging have been completed and handed over to
with its sophisticated digital offering, customers. This year the company the Ministry of Health. To date, Ooredoo
enabled it to protect and grow its engaged the youth population in the Myanmar has also donated nearly 62
market share despite the increase in country by sponsoring the popular talent million MMK for disaster management in
competition with the entrance of a competition Myanmar Idol. Similarly, the affected areas across Myanmar.
fourth telecommunications operator in company became the first operator in
the market. Myanmar to live-stream the 2018 FIFA
World Cup exclusively on mobile via the
Digital channels were used to My Ooredoo App.
transform the way Ooredoo Myanmar
communicates with its customers. In Financially, the company had another
2018 the company launched Ooredoo year with excellent improvements,
Next, a real-time Facebook Messenger reporting robust revenue growth despite
the increase in competition. Expanding Ooredoo Myanmar continues to the company leadership team and Outlook
channel for customer service and product empower its employees by providing employees. Ooredoo’s commitment to its
sales. The service allows for richer and its 2G and 4G networks has aided the Ooredoo Myanmar will focus on
company’s customer acquisition efforts. learning opportunities for its people. employees was recognised with several expanding its 2G and 4G coverage to
more convenient customer interactions This year the company launched the awards and certifications. In 2018, OML
whilst also creating a new conduit to Ooredoo Myanmar grew its customer target a wider customer base of rural
base by 21% and EBITDA margin grew Sales Academy, where more than 600 was the first company ever to be certified and urban inhabitants and further
market Ooredoo’s innovative offerings. sales team members and distributor as a Great Place to Work in Myanmar
80% of Ooredoo Myanmar’s customer from 11% last year to 16% this year. diversify its customer mix. The most
EBITDA remains strong as a result of sales representatives were provided and has also won Myanmar Employer exciting opportunities will come from the
interactions are now conducted through with additional training to enhance Awards (People’s Choice) second time
its digital channels. renegotiation of contracts with various company’s digital initiatives, which will
vendors and service providers, and the customer excellence. To align the in a row. Some of OML’s many awards differentiate Ooredoo Myanmar from its
utilisation of digital services to reduce company’s strategy with that of its include Best Workplace Practices and competitors, and which will add value into
Strengthening its position as a digital employees, Ooredoo Myanmar hosted Innovative Retention Strategy by Global
leader, the company launched Build Your administrative costs. However, cost 2019 and beyond.
savings were partially offset by the its first Employee Communication HR Excellence.
Own Plan (BYOP) through its consumer Forum facilitating dialogue between
app, which is an innovative and flexible depreciation of the Myanmar Kyat, which
solution designed to meet the diverse affected USD payments.

Total customers (thousands) Financial performance

Operator share of Group 9,605 Revenue* QR millions

2014

189
2015

1,065
2016

1,470
2017

1,324
2018

1,262

2018 9,605 EBITDA QR millions (357) (76) (9) 152 197

2017 7,915 EBITDA margin -189% -7% -1% 11% 16%

Blended ARPU** QR 27.2 17.1 12.2 15.0 8.7

8% 4% 2% %18
7%
2016 9,000

Employees 953 949 939 966 914

2015 5,818
Customers Revenue EBITDA Capex
* Commission on cards was netted against revenue in 2018.
2014 2,236
** Blended ARPU is for the three months ended 31 December.
44 Ooredoo Annual Report 2018
45

Ooredoo A transformative
year
Palestine “We built a strong foundation in 2018,
with the growth of our market share
in the Gaza strip, the launch of 3G
in the West Bank and the successful
rebranding of Wataniya Mobile to
Ooredoo Palestine, all of which have
Our Businesses continued unlocked access to good growth
potential for the company.”

Dr Durgham Maraee
CEO, Ooredoo Palestine
Overview programme delves into all aspects of Finance costs were also slashed by the
Ever since the successful launch of the company’s operations and includes refinancing of a previously syndicated
operations in Gaza in Q4 2017, Ooredoo an internal digital maturity assessment loan at a lower interest rate.
Palestine has captured an additional and a business process review to enable
8.2% of market share. Other highlights automation. The company’s digital drive In 2018 the company invested
for the year included the rebranding also covers customer interactions which substantially in its employees, providing
to Ooredoo Palestine, the launch of 3G have been refined with revamped mobile a number of professional training
in the West Bank and the launch of the applications that provide a seamless courses to upskill employees in various
“Get Digital” programme, as well as customer experience. areas, including those related to the “Get
reaching a stronger financial position. Digital Programme”. In recognition of its
Beyond digital, Ooredoo Palestine commitment to employee development,
The successful rebranding campaign continues to focus on customer retention Ooredoo Palestine won the “2018
positioned Ooredoo Palestine as a leading by enhancing the “Nojoom” Loyalty Excellence in Talent Management” Award
telecom provider with a global brand to programme. The programme brings at the Human Capital Forum.
back its ambitions. Ooredoo Palestine’s a number of advantages by providing
customers will benefit from Ooredoo insights around customer churn and Ooredoo Palestine continued to support
Group’s cutting-edge technologies which enabling the deployment of win-back local communities with the “Reviving Of
have been deployed and tested in other activities that systemically target high The Old City” project in partnership with
territories as well as the cost benefits value customers. the Hebron Rehabilitation committee.
associated with economies of scale. On
a corporate level the Ooredoo brand has On the financial front, 2018 was another
brought Ooredoo Palestine closer to the strong year. Revenue was higher by 17%
group’s corporate identity and enabled over 2017, mainly due to the increased
it to better benefit from group derived market share from Gaza and penetration
synergies, leading to improvements in from the launch of 3G in the West Bank.
Ooredoo Palestine’s commercial and The growth in revenue was also aided The project involved the renovation of large sponsorships are provided through to invest in its network to expand 3G
technical operations. by portfolio optimisation which resulted buildings and infrastructure to avoid the parent company – Ooredoo Group - to coverage and capacity to meet the
in maximising the value extracted from winter floods, all of which contributed the Palestinian community. demand for connectivity services in
Throughout 2018, Ooredoo Palestine customers through the use of innovative to improvements in living standards and the Palestine market. Looking ahead,
continued building on its vision to be a packages and bundles. Furthermore, economic development. For a fourth year in a row, Ooredoo the company will build on the strong
digital enabler, bringing world class 3G the company benefited from the launch Palestine renewed its sponsorship of the foundation established in 2018 with its
services to the West Bank and connecting of new post-paid consumer rate plans. Additionally, the company donated Palestine Football League which now ‘Get Digital’ programme, driving down cost
Palestine to the global digital economy. US$ 1.5 million to the Palestinian showcases the rebranded ‘Ooredoo’ logo. whilst creating new and innovative ways to
The deployment of 3.75G technology, the EBITDA margins improved as the healthcare sector to cover the cost of acquire and interact with customers.
most advanced of this generation, has company implemented new technology 47 cochlear implant operations and Outlook
reaffirmed Ooredoo Palestine’s leadership solutions, such as storage modernisation, purchase specialised equipment, medical 3G will be the key engine for revenue
in the mobile data market in Palestine. alongside its 3G roll-out, which have led supplies and medicines. The above two growth and the company will continue
Under the theme of digital enablement, to significant cost savings. Further cost
Ooredoo Palestine introduced its ‘Get savings were achieved through increased
Digital Programme’. The multifaceted insourcing and renegotiation of contracts.
Total customers (thousands)
Financial performance

Operator share of Group 1,286 2014 2015 2016 2017 2018

Revenue QR millions 311 303 306 312 366

2018 1,286
EBITDA QR millions 47 78 80 69 96
2017 1,016
EBITDA margin 15% 26% 26% 22% 26%
1% 1% 0.8% %18
0.8%
2016 773
Blended ARPU* QR 32.3 29.2 27.2 25.1 21.5
2015 701
Customers Revenue EBITDA Capex Employees 427 419 447 572 534
2014 621
* Blended ARPU is for the three months ended 31 December.
46 Ooredoo Annual Report 2018
47

Ooredoo Making
history
Maldives “2018 was a transformational
year for the business which saw
Ooredoo Maldives prepare its
network and operations for the 5G
revolution, while also capitalising
on key opportunities offered by
Our Businesses continued new verticals, establishing itself as a
key content player. We are growing
the business beyond the remit of
traditional telecommunications
investing into adjacent businesses to
Overview This year the company delighted Maldivian communities, and Ooredoo’s capture the opportunities in
In 2018 Ooredoo Maldives maintained audiences by showcasing 5G in the continuous efforts to provide unique the Maldives.”
its mobile data leadership and Maldives. 5G’s revolutionary 1.8Gbps and innovative solutions which can help
captured a larger market share speeds unlock the potential for myriad customers achieve their goals. Be it Najib Khan
for its postpaid services and B2B new applications for Internet of network, products or customer care – CEO, Ooredoo Maldives
segment, while also growing its Things connected devices. Bringing Ooredoo Maldives stands out.
adjacent businesses to unlock growth the latest technologies to the market
opportunities beyond the tradition has distinguished Ooredoo Maldives As part of the digital transformation
telecom services. from other operators in the country programme, Ooredoo Maldives launched
and facilitated the development of new a successful Digital Resorts solution
m-Faisaa, Ooredoo Maldives’ mobile revenue streams. tailored for the tourism sector in
payment platform continues to gain Maldives, leading to positive trends for Total customers (thousands)
popularity with enhanced functionalities
in the app. The platform provides
Content is another avenue Ooredoo
Maldives has invested in to diversify
the company’s enterprise business.

Financially, Ooredoo Maldives was

440
customers with a seamless way to pay its revenue mix and capitalise on the
for various services such as utilities, digital revolution growth opportunities. impacted by the declaration of a state
2018 440
healthcare and education. The success In 2018 the company offered Amazon of emergency prior to the presidential
of m-Faisaa, which was shortlisted for a Prime Video to its customers, a platform elections causing a reduction in tourist
2017 440
number of awards including ‘Best Mobile offering OnDemand video streaming numbers which affected in-roaming
Payment Service’ at the Telecom Asia with a catalogue containing thousands revenues. Despite these challenges, 2016 397
Awards 2018, demonstrates Ooredoo of movies and series. The service offered Ooredoo Maldives maintained its revenue
Maldives’ commitment to digital within My Ooredoo App was very market share at 41.4%. Furthermore, 2015 350
enablement by building the foundation successful, gaining an impressive number Ooredoo Maldives has restructured
for a cashless society and increasing of subscribers within the first few days of distributor commissions across the board 2014 299
financial inclusion. launching. To build its content offering, achieving significant cost savings. 2018
Ooredoo Maldives partnered with a local revenue was solid at QR 461 million
The SuperNet Fixed Broadband business television operator to launch OpenMiTV, representing a growth of 6% compared to
grew its customer base by 75% driven an application allowing television to be 2017 and profitability was strong at During 2018, Ooredoo Maldives The company’s commitment to the Outlook
by network expansion, with the addition viewed everywhere. Customers also QR 129 million. partnered with the United Nations digital transformation of the Maldives Ooredoo Maldives will focus on
of 16 new islands and a product revamp benefited from the ‘My Ooredoo’ app Development Programme and the was greatly recognised within the nation maintaining its data leadership position
which introduced the new 2M pack. The which enabled live streaming of the 2018 The company is committed to the Housing Development Corporation to and its people, with the company being and continuing to grow adjacent
enterprise business grew 65% supported FIFA World Cup. development of local communities and conduct a number of initiatives under awarded the Best Telecommunication businesses with the aim of enriching
by the launch of IPTV services and Digital pledged its commitment to the United the Smart Cities Maldives programme, Company of the Year in the Maldives, the digital lives of communities and
Campaign for resort customers. The As a community focused company, Nations Sustainable Development Customer Experience Awards, and the businesses across the Maldives.
including a Smart Inclusivity Campaign,
service leverages Ooredoo’s high speed Ooredoo Maldives aims to support the Goals, which aims to eradicate extreme Award for Excellence in Information and The company’s success in 2018 with
a Promoting Disability Inclusive
network to carry linear content across the hopes, dreams and ambitions of its poverty, improve the lives of people and Communication at the Maldives Business services such as digital financial service,
create an all-round healthier world for Development Forum, Coding Camps,
Maldives. customers. To this end, the company Awards 2018. e-commerce and content distribution
tomorrow. Ooredoo Maldives leveraged a Sci-tech Festival, Urban Innovation will form the foundation for unlocking
launched the “Varah Thafaathu” campaign
Ooredoo Maldives established itself as its technological capabilities in 2018 to Challenge and more. The project had a further growth in 2019.
to celebrate the diversity among the great
the leader of the mobile data segment. help make these goals a reality. positive impact on Hulhumale’s residents,
particularly vulnerable groups such as
women and youth, people with disabilities Financial performance
and the elderly.
Operator share of Group 2014 2015 2016 2017 2018
The company’s close bond with the Revenue QR millions 206 288 381 435 461
people of the Maldives was further
strengthened through CSR activities such EBITDA QR millions 68 133 206 236 237
as the donation of three sea ambulances
EBITDA margin 33% 46% 54% 54% 52%
to the nation’s emergency response fleet,
0.4% 1.5% 2.0% %18
0.9% and popular community events such Blended ARPU* QR 46.0 50.3 48.6 53.3 52.3
as the Ooredoo Masrace and Ooredoo
Customers Revenue EBITDA Capex Employees 313 317 331 345 359
Colour Run, the largest community event
held in the country to date. * Blended ARPU is for the three months ended 31 December.
48 Ooredoo Annual Report 2018
49

Making
a positive
impact
Our Social
Responsibility
As a community-focused company operating across
the Middle East, North Africa and Southeast Asia,
Ooredoo’s corporate social responsibility is centred
on enriching people’s digital lives. The company is
passionate about using mobile technology as a tool
to realise positive social and economic change for its
customers and in the communities that it serves.
50 Ooredoo Annual Report 2018
51

Enriching people’s
digital lives
Ooredoo is delivering on
its brand promise as a
connecting, caring and
challenging company.

Group Corporate Social Responsibility Strategy

At Ooredoo the guiding vision is to women across the country. Ooredoo education to ever more users. More
deliver on its brand promise of being actively supports the GSMA and its than one million users in Indonesia
a connecting, caring, challenging Humanitarian Connectivity Charter, have accessed the internet using
company. It aims to connect working to support customers and internet.org, a mobile broadband
via engaging and working with first responders in a crisis. In Iraq, service launched exclusively in
communities; care by supporting the ‘Smile For Peace’ initiative aims partnership with Facebook, while
all members of communities; and to keep communication alive within their online identities are protected by
challenge itself to make a real conflict zones, providing refugees and Mobile Connect, the GSMA’s standard
difference in its communities’ lives. internally displaced people with the for secure access to mobile and digital
means to connect with their families. services launched in partnership with
As part of its support for social and Ericsson. Ooredoo’s Mobile Academy
economic development, Ooredoo • Prioritising gender equality is a currently has more than 350,000
has designed and implemented a key priority for the organisation. Full customers accessing more than 50
Sustainability Management strategy that recognition is given to the value of courses on a wide variety of subjects.
will enable the company to measure its bringing more women and girls into The company also recently launched
social and environmental performance the workplace, and a robust strategy Learn English, a mobile education
against industry benchmarks. Through has been implemented to ensure this service in Palestine. Ooredoo Qatar’s strong support for
this strategy, Ooredoo can better identify recognition is translated into tangible other community activities continued
and manage the social, environmental, results. Ooredoo is one of the key Employee Volunteering Programme in 2018 with a number of community
economic and governance risks and partners in the World Bank Group’s At Ooredoo, employees are actively partnerships
opportunities of its operations. ‘She Works’ initiative, promoting encouraged to play a full and effective
female inclusion in the workplace. part in the company’s social responsibility
UN Sustainability Goals Ooredoo’s Chairman is on the board strategy. It operates a comprehensive
Ooredoo remains committed to the of advisors of the World Economic Employee Volunteering Programme
United Nations Sustainability Goals, Forum’s gender parity programme, to ensure volunteering activities are
established in 2015 with the aim of while Ooredoo also worked with the impactful, cost-effective and of benefit to Ooredoo Qatar As an official sponsor of Qatar Cancer Vice Chairperson and CEO of Qatar
eradicating extreme poverty, improving GSMA to study the socio-economic the community, the organisation and the 2018 was a exciting year for social Society, pink ribbons were distributed Foundation (QF), signed a pioneering
the lives of citizens and creating an benefits of women achieving greater employees themselves. responsibility at Ooredoo Qatar. The in Ooredoo stores to raise awareness Memorandum of Understanding to
all-round healthier world for tomorrow: access to mobile technology. In Qatar, company prioritised health and fitness of breast cancer. Ooredoo was also the facilitate the two entities working together
poverty eradication; good health and Ooredoo has partnered with national Ooredoo understands that communities initiatives within Qatar. Official Telecommunications Sponsor to improve the lives of young people
wellbeing; quality education; gender community ‘How Women Work’ to value the impact its volunteers can have of the Conference on Understanding and benefit communities in Qatar, the
equality; good jobs and economic growth; provide opportunities to empower on people’s daily and digital lives, and The Ooredoo Doha Marathon 2018 Molecular Mechanisms in Cardiovascular wider Gulf region and around the world.
industry, innovation and infrastructure; women. Women in Indonesia have knows it is vital to maintain a positive was another significant success, Biology Diabetes, Obesity and Stroke The partnership will involve a number
climate action; peace and justice; and access to INSPERA, which uses brand reputation and public image. attracting more than 2,400 participants. (CUDOS) 2018. of initiatives including support for
partnerships. mobile technology to offer female Through volunteering, employees have A considerable sum was raised for development programmes and workshops
entrepreneurs functional training, the opportunity to enhance leadership worthwhile charities in Qatar via Ooredoo Qatar’s strong support for other aimed at driving youth enterprise in the
Within those nine goals, the company working capital and guidance on and interpersonal skills and improve their entrance fees. community activities continued in 2018 MENA region, with a particular focus on
is focusing on three key elements: financial independence. The company wellbeing. with a number of community partnerships engaging and deploying young Qatari
good health, gender equality; as well as offers tailored products and services Beyond the Ooredoo Doha Marathon, including the Doha Night Market, and leaders aiming to make a global impact.
innovation and infrastructure. for women in Iraq and Myanmar, Ooredoo’s Employee Volunteering Ooredoo also supported a number of the new ‘Made In Qatar Presented By The company also participated in the
aimed at overcoming cultural norms Programme enables the company to other sporting initiatives as sponsor or Ooredoo’ award at the Ajyal Film Festival. Hamad Bin Khalifa University Orientation
• Supporting good health, Ooredoo which may act as a barrier to female support communities, the company and partner, including the Red Rhino Cup, Resource Fair held at the Education City
has established Mobile Health mobile use. employees. As part of its volunteering Qatar’s Strongest Man and the Aspire Ramadan again saw a great team effort Student Centre.
Clinics in partnership with the Leo framework, it is activating and optimising Beach Volleyball Qatar Master. to support the less fortunate within the
Messi Foundation, providing free • Building resilient infrastructure and employee engagement, supporting its community, with a series of activities Ooredoo Qatar was the diamond sponsor
consultations and medical treatment fostering innovation, the company leaders and exploring opportunities Ooredoo Qatar was Official designed to engage all sectors including of Milipol Qatar 2018, the homeland
to vulnerable people in Algeria, is committed to growing the global to improve design of the programme Telecommunications Partner of the Al hospital visits, iftar with the elderly and security exhibition, where it showcased
Myanmar, Indonesia and Tunisia. In economy and driving economic through strategic partnerships with Noor Institute for the Blind graduation orphans and the distribution of iftar boxes how technology innovations can be used
Myanmar, Ooredoo has developed progress. Across the Ooredoo network, organisations that share similar values event, and sponsor of the International across the country. for protecting national infrastructure.
MayMay, a maternal health app that next-gen smart solutions offer the and policies. White Cane Day celebrations. Ooredoo It was also Gold Sponsor for Qatar
helps ensure pre- and post-natal potential to reduce energy usage, teamed up with Best Buddy Qatar to hold In April, Group CEO Sheikh Saud bin Central Bank’s 5th Information Security
maternal health and infant wellness enable greater automation and provide an exclusive event to raise awareness of Nasser Al Thani and Her Excellency Conference for the Financial Sector.
information is readily available to faster access to information and the needs of disabled people. Sheikha Hind bint Hamad Al-Thani,
52 Ooredoo Annual Report 2018
53

Enriching people’s It provided a US$1 million donation to

help Basra recover from the water crisis,
as well as supporting an initiative to
with the objective of unlocking the
potential of digital technologies in
order to achieve the UN’s Sustainable
The healthcare sector in Palestine
benefitted from a donation of US$1.5
million from the Ooredoo Group, as

digital lives continued

revive Iraq’s marshlands. The operating Development Goals. To begin the a contribution towards the cost of 47
company also supplied computer partnership, Ooredoo Myanmar hosted cochlear implant operations and the
labs to a number of higher education the largest hackathon ever held in purchase of medical supplies, medicines
institutions in the country, including Myanmar. and specialised equipment.
two labs to Mosul University, one lab to
Basra University and one lab to Karbala A US$3.1 million project partnership Ooredoo Palestine also provided support
University. supporting the Myanmar government to community-based initiatives intended
in its drive to improve primary health to increase the brand’s presence, such as
Asiacell also continued its internship services continued, with some 16 encouraging and enabling women’s start-
Group Corporate Social Responsibility continued programme to extend opportunities to healthcare facilities out of a target of ups and engaging in community events
the country’s youth. 21 completed and handed over to the and activities.
Ministry of Health. As the first private
Ooredoo Algeria entity to donate funds to United Nations Ooredoo Maldives
Ooredoo Algeria continued to build its Office for Project Services projects in Ooredoo Maldives carried out a number
programme of delivering community Myanmar, Ooredoo Myanmar donated of initiatives under the Smart Cities
With the aim of supporting and nurturing Indosat Ooredoo provided donations to Bowling Championship. services and corporate social more than MMK62 million to 4 states project in partnership with UNDP
young entrepreneurs in Qatar, Ooredoo Islamic orphanages and schools. responsibility. of lower Myanmar affected by flooding Maldives and the Housing Development
Qatar teamed up with Qatar Business Ooredoo Oman completed its annual during the year. Corporation, aimed at ensuring
Incubation Centre to sponsor young Indosat Ooredoo’s INSPERA women’s Goodwill Journey in 2018, with volunteers To support young people’s employment technological solutions introduced in
entrepreneurs, facilitating start-ups and empowerment programme (‘Inspiring travelling across the Sultanate to and entrepreneurial opportunities, ‘The More You Speak, The More Ooredoo Hulhumale’ – the future smart city – are
the inauguration of new technology- Indonesian Women’), which focuses on distribute donations and goods to Oman’s the company supported a new youth Donates’ – a programme to donate funds accessible to the entire population of
focused businesses in Qatar. enabling underprivileged women to families and charitable associations. This programme, ‘Injaz Eldjazair’ and created to entities such as orphanages and Maldives. Potentially vulnerable groups
earn an income through technology, year, the volunteers made an urgent new start-up incubator programmes to monasteries in rural and underserved such as women, youth, the elderly and
Ooredoo Qatar also hosted a number of supported more than 5,000 women by detour to Salalah in the wake of Cyclone strengthen the local ecosystem. areas of Myanmar - saw donations of those with disabilities were a particular
activities across the country to celebrate the end of 2018. Mekunu, so that volunteer teams could some MMK663 million benefit 8 states focus, with initial efforts concentrating
International Labour Day and show their provide assistance to those affected by Ooredoo Algeria joined and supported and provinces. on Smart People, Smart Living and Smart
appreciation to Qatar’s diverse workforce The company’s Mobile Clinic programme the storm. national celebrations with a range Mobility.
for their commitment to helping Qatar expanded coverage to reach underserved of initiatives, including International Ooredoo Myanmar’s Digital Libraries
grow and evolve. These activities included communities in 1,950 locations in 14 During the 23rd Arabian Cup, Ooredoo Women’s Day, National Knowledge Day, project connected 90 libraries to the The company initiated a digital literacy
distribution of healthy food across provinces by the end of 2018. The Oman contributed to the national spirit International Celebration of Literacy Day, internet, as well as providing training programme to support the drive towards
Qatar’s work camps, and the donation of programme provides primary healthcare by sending a charter flight full of Oman and the International Day of Disabled programmes and donating computers a Digital Maldives. The programme
international calling vouchers and Hala services and conducts preventive health fans to Kuwait to watch the final. It also Persons. and tablets, and extended support to a focused on teaching digital skills to senior
cards to help labourers stay connected to education activities. celebrated the 48th Omani National Day total of 150 libraries across Myanmar. citizens, from how to use a smartphone
the Supernet and therefore stay closer to with a host of special offers and activities. During the Holy Month of Ramadan, and apps to ensure safety online.
friends and family. Ooredoo Indonesia deepened its positive the company organised volunteer visits Ooredoo Myanmar was the main
impact on communities by facilitating In support of the local community, the to sick children in hospital and opened sponsor for the Women Empowerment Ooredoo Maldives joined in a host
Indosat Ooredoo public access to telecommunications company provided assistance to the special restaurants at its headquarters programme in 2018, aimed at promoting of celebrations throughout the year
services and digital products, as well Clubs’ Youth Camps for young women in for the needy. Ooredoo Algeria also the development of young girls and promoting a variety of causes, from
Indosat Ooredoo has identified three
as providing social contributions to Nizwa, as well as supporting the Friends developed a special beach cleaning women, via digital technology and a International Happiness Day to Earth
pillars that carry the potential to deliver
communities across Indonesia. Cricket Club for the 2018 Oman Cricket volunteer programme, to protect the usage system called Tech Age Girls. Hour, International Women’s Day and
the greatest gains and synergise with
League. nation’s natural beauty. Children’s Day. The operating company
one another – Women’s Empowerment,
Ooredoo Kuwait Ooredoo Palestine also supported an event for autism
Education and Innovation and Health.
Ooredoo Kuwait’s award-winning annual Ooredoo Oman also launched free digital Ooredoo Tunisia awareness, entitled ‘Different, Not Less’,
Some 300,000 people benefitted from With the support of Ooredoo Qatar,
volunteer programme was expanded in education to all through the Oman as well as the Enigma Exhibition for
programmes based on these pillars Ooredoo Tunisia continued to support Ooredoo Palestine undertook
2018, continuing to attract hundreds of Digital Tutorial App, and supported 100 cancer awareness and fundraising.
throughout 2018. healthy lifestyles in 2018 through its and continued a number of social
participants. The programme ensures secondary school students with special
ambitious sponsorship programme, responsibility initiatives in 2018.
volunteers have the required skills needs from underprivileged families The company donated three sea
The company received numerous as well as deploying digital services to
and tools necessary for volunteering across Oman. Ooredoo Group, Ooredoo Palestine and ambulances to the Ministry of Health and
awards for its social contribution support education, employment and
opportunities and then matches them the Hebron Rehabilitation Committee introduced a Mobile Health Clinic initiative
during 2018, including ‘Corporate Social entrepreneurial development for young
Furthering progress of the local economy to ensure citizens and residents of all
Responsibility Programme of the Year’ with opportunities in the community that people. concluded a project to revive the old
and national development, Ooredoo islands can benefit from free medical
for its Indonesia Belajar (‘Indonesia’s suit their skillset. city, which involved renovation of run-
Oman hosted more than 340 Omanis treatment, advice and vitamins, as well as
Learning’) programme, which supports Ooredoo Tunisia’s Najjahni service, which down buildings and old houses and
Supporting Youth was the main pillar in as part of the National Employment health education.
digital education initiatives to improve offers learning and employment services the rehabilitation of key infrastructure
Ooredoo Kuwait’s CSR strategy in 2018. Programme and, as a result, recruited 40
education processes, empower teachers via mobile continued to expand its reach, elements to help avoid flooding in winter.
new employees. In addition, 16 women In partnership with the UNDP, Ooredoo
and provide digital infrastructure. Indosat The company sponsored the Arab Youth connecting more than 400,000 people to As well as improving living standards
also graduated from the Women’s Maldives launched Miyaheli, a social
Ooredoo’s commitment to serving local Volunteer Award for the third successive new opportunities in 2018. in the old city and providing economic
Incubator Programme during the ‘Omani innovation camp for youth focusing on
communities was also recognised at year. The award attracts submissions of stimulus, it is also hoped the project will
Night for My Country’ celebration. themes crucial to social cohesion and
the Global CSR and Governance Awards youth initiatives, volunteer achievements The company also continued to support encourage more visitors to the area. development.
2018, where the company was presented and volunteering ideas from scores of its Mobile Health Clinics, in collaboration
Asiacell in Iraq
with a special recognition award for five young people around the Arab world. with the Tunisian Red Crescent. The With the aim of ensuring long-term talent Other community initiatives included
In line with the Group’s commitment Clinics provide access to health services is available to help Palestine progress
consecutive years of CSR excellence. the whitelisting of NGO webpages to
Ooredoo Oman to making a difference in communities’ for people in remote areas. socially and economically in the future, allow free access, a Community Hubs
As part of its support for education, Partnering with non-profit organisation lives, Asiacell focused on initiatives that Ooredoo Palestine also provided financial project to help vulnerable communities
Indosat Ooredoo donated computer and Outward Bound Oman, Ooredoo Oman improved access to resources, assisted Ooredoo Myanmar support to the Chevening Scholarship, broaden their horizons through acquiring
connectivity equipment for charitable sponsored the second Next Generation education and supported development of a programme offering opportunities to
November saw Ooredoo Myanmar sign technical skills, an awareness campaign
organisation NU in support of its training programme for students from the country. Palestinian youth wishing to study for
a memorandum of understanding to for scam calls and a programme allowing
educational development activities. the National College of Automotive enter into a two-year partnership with the masters’ degrees in the UK. fishermen to stay connected to each other
During the Holy Month of Ramadan, Technology, and also sponsored the Arab United Nations Development Programme, and their fishing community for less.
54 Ooredoo Annual Report 2018
55

Providing
a solid
foundation

Corporate
Governance
Report
Ooredoo aims to be a leader in
corporate governance and ethical business
conduct by maintaining best practices,
transparency, and accountability to its
stakeholders.
56 Ooredoo Annual Report 2018
57

Corporate Governance Report continued

“The Board of Directors and senior executives are entrusted with overseeing and Within this framework, the Board of Directors undertakes major responsibilities and duties, including:
managing Ooredoo Group, and this important responsibility requires commitment, − Vision and strategy: determining and refining the Group vision and objectives, as well as those of Ooredoo, which are the
objectivity and accountability from those in leadership positions. foundation for all the actions and decisions of the Board and management.
− Management oversight: appointing the CEO, establishing his duties and powers, assessing his performance and determining
Our role is to ensure the implementation of the highest governance principles
his remuneration; nominating the Board members and the key officers of Ooredoo and its Group.
and ethics in the company. We implement best practices in accordance with the
requirements of stock markets in which Ooredoo is listed. − Financial and investment: reviewing and approving reports and accounts and overseeing the Group and Ooredoo financial
positions.
We assure our shareholders that the principles and policies of governance we − Governance and compliance: preparing and adopting the corporate governance rules for Ooredoo and establishing
implement are the basis for each decision we issue and procedure we implement at guidelines for the governance of the Group.
Ooredoo Group level.”
− Communication with stakeholders: overseeing shareholder reporting and communications.
Abdulla Bin Mohammed Bin Saud Al-Thani
Chairman of the Board The Board of Directors is also responsible for disclosure of information to shareholders of Ooredoo in an accurate and timely
manner. All shareholders can access information relating to the Company and its Board members and their qualifications. The
Company also updates its website with all Company news continuously, in addition to including this information in the Annual
Report presented to the General Assembly.

Based on the above, disclosure to stock markets in Qatar and Abu Dhabi where Ooredoo’s stocks are listed, by means of quarterly
1. Ooredoo values and corporate governance philosophy
reports and complete annual financial statements, reflects Ooredoo’s commitment to the terms and conditions of relating stock
Ooredoo’s Board and management believe that good corporate governance practices contribute to the creation, maintenance and markets.
increase of shareholder value. Sound corporate governance principles are the foundation upon which the trust of investors is built,
and are critical to growing a Company’s reputation for its dedication to both excellence and integrity. Responsibilities of the Board have been outlined in the Company’s articles of association and the board’s charter in compliance with
the Company’s Law and the Corporate Governance and Legal Entities System.
In order to establish a distinct model of commitment and compliance, the Board of directors has taken into account the provisions
and principles set out in the Commercial Companies Law number 11 for 2015, and the Corporate Governance Code for Companies In December 2018 Qatar National Bank appointed Mr. Abdullah Mubarak Al Khalifa as a representative for the Bank on Ooredoo
and Legal Entities listed on the main market issued by Qatar Financial Markets Authority and other related laws and regulations,
taking these into consideration when drafting laws and regulations of the Company to instil a culture of governance across the 3. Board Members:
Company, and in the practices of all of its employees with the best implementation of the adjudications of the code. Ooredoo’s Board of Directors has the following members:

As Ooredoo continues its rapid growth and global expansion, it is particularly critical to demonstrate to its shareholders, customers, 1. H.E. Sh. Abdulla Bin Mohammed Bin Saud Al Thani Chairman Non independent / non executive member
employees and communities the same high levels of commitment and good corporate citizenship that have earned it a strong
reputation in Qatar. 2. H.E. Ali Shareef Al Emadi Vice Chairman Non independent / non executive member
3. H.E. Mohammed Bin Isa Al Mouhanadi Member Non independent / non executive member
Ooredoo aims to be a leader in corporate governance and ethical business conduct by maintaining best practices, transparency
General Retirement & Social Insurance Authority
and accountability to its stakeholders. This includes a commitment to the highest standards of corporate governance, by regularly 4. Member Non independent / non executive member
represented by H.E Mr. Turki Mohammed Al Khater
reviewing the governance structures and practices in place to ensure their effectiveness and consistency with local and international
developments. 5. Mr. Aziz Aluthman Fakhroo Member Non independent / non executive member
6. Mr. Nasser Rashid Al Humaidi Member Independent / non executive member
During the year, Ooredoo further on strengthened its corporate governance framework in compliance with the requirements of
Ali Bin Ghanim Al-Thani Group represented by Sheikh Ali
governance rules set by Qatar Financial Markets Authority (QFMA) through: 7. Member Independent / non executive member
Bin Ghanim Al Thani
1- Updating and development of the Company’s Articles of Association.
2- Updating and development of governance policies and procedures guides. 8. Mr. Ibrahim Al Mahmoud Member Independent / non executive member
3- Updating and implementation of the board’s and sub committees’ charter. Qatar National Bank (QNB) represented by H.E. Mr. Ali
4- Implementation of best practices adopted in the State of Qatar. 9. Member Independent / non executive member
Ahmed Al-Kuwari
10. Dr. Nasser Mohammed Marafih Member Non Independent / non executive member
As outlined in the report, Ooredoo affirms that we abide by the provisions of governance rules issued by QFMA during 2018 and
disclosure requirements.

2. Role and Responsibilities of the Board of Directors (QPSC) Board of Directors in place of HE Mr. Ali Ahmed Al-Kuwari.

The primary role of the Board of Directors is to provide institutional leadership to the Company, within a framework of prudent and Pursuant to Article 31 of the Company’s Articles of Association, the Secretary of the Board shall be selected by the Board, which shall
effective controls enabling risk to be assessed and managed. This role has been fully illustrated through the Articles of Association determine his duties and remuneration. The duties of the Board’s secretary are contained in the Company’s Corporate Governance
of the Company and its relevant by-laws, the Commercial Companies Law No. (11) for 2015 and Corporate Governance Code for Manual and Corporate Governance Code for Companies and Legal Entities listed on the main market issued by Qatar Financial
Companies and Legal Entities listed on the main market issued by Qatar Financial Markets Authority, in particular articles (8) and (9), Markets Authority.
which were incorporated as a Charter of the Board in a special section of the Corporate Governance Manual.
4. Board Meetings:
The Board of Directors has the power and full authority to manage Ooredoo and its Group, and to pursue the primary objective of
creating value for shareholders, with consideration given to the continuity of the Group’s business and the achievement of corporate Board meetings are conducted regularly, given that there should be no less than 6 Board meetings in the annual financial year, in
objectives. The Board is also concerned with maintenance of equity and justice among stakeholders in terms of timely disclosures accordance with Article 27 of the Company’s Articles of Association and Article 104 of Commercial Companies Law No. 11 for 2015.
and making information available to QFMA and the Company’s shareholders. The Board is also concerned with periodically reviewing
the implementations of governance and compliance with developing the code of ethics, internal policies and the fundamental In this context Ooredoo confirms that the Board of Directors held six (6) meetings in 2018. It is also worth mentioning that the
covenants which includes: 1) Covenants of the Board and its committees, 2) Policies to deal with concerned parties and shareholders, quorum for the Board’s meetings has been fulfilled according to Commercial Company’s Law No 11 for 2015, and the Articles of
3) The rules for qualified insider trading. As Ooredoo QSPC is both the parent Company of the Ooredoo Group and an operating Association of the Company, and the Corporate Governance Manual and the Legal Entities listed on the main market issued by QFMA.
Company in the State of Qatar, its Board of Directors has a dual role.
58 Ooredoo Annual Report 2018
59

Corporate Governance Report continued

In accordance with Ooredoo’s Corporate Governance Manual, the Board conducts an annual evaluation of its performance and Employees must avoid: conflicts of interest, particularly in commercial transactions, business administration and activities; using the
that of its committees to investigate the familiarity of the Chairman and members of the Board with the duties as set forth in Company’s assets, records, and information; and relationships with related parties outside the Company. No employee may accept
the Corporate Governance Manual and the Articles of Association of the Company, the Commercial Companies Law No. 11 for or request gifts or bribes, loans or bonuses, prizes or commissions. The Company is resolved to combat all forms of conflicts of
2015, and the Corporate Governance Code issued by the Qatar Financial Markets Authority, as well as to inform them of the latest interest in addition to other matters.
developments in the field of governance, and based on some requirements or the results of the evaluation process, development
programmes are built per board member. In case of real deficiency in the performance of a Board member, which was not solved Furthermore, the Company complies with Articles 108,109,110, and 111 of the Commercial Companies Law No. 11 for 2015 that
at the appropriate time, then the Board shall have the right to take the appropriate action in accordance with Law and Corporate states the following:
Governance. In this regard, each board member signs a declaration that they are fully familiar with the Corporate Governance
Manual and the Corporate Governance Code for Companies and Legal Entities listed on the main market issued by Qatar Financial 1. The Chairman or a Board Member may not participate/engage in any business that competes with the Company’s business, or
Markets Authority and that they are committed to implementing them as a board member. to be involved, either on his/her own behalf or on others’ behalf, in any type of business or activities in which the Company is
engaged, otherwise the Company is entitled to ask him/her for compensation or take the ownership of the activities he/she is
To further familiarise board members with the latest developments in Governance, the above mentioned Corporate Governance engaged in.
Workshop was organised and presented by advisors specialised in the area of Governance.
2. The Chairman, a Board Member, or a Director is not permitted to practice any activity that is similar to the Company’s activities,
As for the senior executive management, an annual evaluation is undertaken using a Target Score Card at the Company’s level, then or to have any direct or indirect interest in contracts, projects and covenants made in favour of the Company.
at the level of the major sectors of the Company.
3. The Company may not offer a cash loan of any kind to any member of its Board of Directors or to guarantee any loan held
The Company shall comply with the rules and conditions that govern the disclosure and listing in markets. It shall also inform the by one of them with others, or make an agreement with banks or other credit companies to lend money to any of the Board
Authority of any dispute that the Company is part of and is affecting its activities and shares, including litigation and arbitration, and Members, or open a facility or guarantee a loan with other parties beyond the terms and conditions set by the Central Bank of
shall disclose any transactions or deals concluded with any related party. Qatar. Agreements beyond the provisions of this Article will be considered null and void, and the Company retains it rights to
request compensation when necessary from the offending parties.

Number of Board Meetings 4. It is prohibited for the Chairman and the Board Members or the Company’s staff to take advantage of any information
Board Member Name
Attended During 2018 delivered to his/her knowledge by virtue of his/her membership or position for the benefit of him/herself, his/her spouse, his/
H.E. Sh. Abdulla Bin Mohammed Bin Saud Al Thani 6 her children or any of his relatives to 4th degree either directly or indirectly, as a result of dealing in company securities of
H.E. Ali Shareef Al Emadi 4 the Company. Nor may they have any interest, directly or indirectly, with any entity conducting operations intended to make
a change in the securities prices issued by the Company, and this ban stays in effect for three years after the expiry of the
H.E. Mohammed Bin Isa Al Mouhanadi 5 person’s membership in the Board of Directors or the expiry of his work in the Company.
General Retirement & Social Insurance Authority represented by
6 7. Duties of the Board of Directors
H.E Mr./Turki Mohammed Al Khater
Mr. Aziz Aluthman Fakhroo 4 The role of the Board of Directors is to lead the Company in a pioneering way within the framework of effective directives that
allow for risk assessment and management. The Board of Directors has the authority and full power to manage the Company and
Mr. Nasser Rashid Al Humaidi 6 continue business to fulfil the fundamental goal of upholding shareholders’ rights, in addition to the following tasks:
Ali Bin Ghanim Al-Thani Group represented by
4 1. Determine the terms of reference, duties, and powers of the Chief Executive Officer and assess his performance and
Sheikh Ali Bin Ghanim Al Thani
remuneration.
Mr. Ibrahim Al Mahmoud 5 2. Evaluate, withdraw and define the powers granted to the members of the Board of Directors and Board committees, and define
Qatar National Bank (QNB) represented by ways of exercising the powers, and formulating a policy for that.
2 3. Monitor the performance of the senior executive management; review management plans in relation to the replacement
H.E. Mr. Ali Ahmed Al-Kuwari
process and the arrangements for remunerations of senior executive management.
Dr. Nasser Mohammed Marafih 6
4. Verify the appropriateness of organisational, administrative and accounting structures for the Company and its Group, with a
focus on the internal control system.
5. Ensure adequate planning for the succession and replacement of senior executive management.
5. Composition and Remuneration of the Board:
6. Provide recommendations to appoint, re-appoint or quarantine the auditor appointed by the shareholders on the basis of their
The Board of Directors is composed in accordance with Article 20 of the Company’s Articles of Association. The Board of Directors consent during the Annual General Meeting of the Company, as recommended by the Audit and Risk Management Committee.
consists of 10 non-executive members, five of whom, including the Chairman, shall be appointed by the Qatar Holding. The 7. Direct members of the Board of Directors and provide them with continuous guidance through planning of the induction and
other five Board members are elected by secret ballot of the General Assembly according to the applicability of the terms of the guidance programmes. The Chairman of the Board is responsible for consistently providing induction and guidance programmes
nomination on them. A Board member’s term is three years and may be renewed. To maintain minority’s rights, Article 41 of the to Board members, to help them perform their duties and ensure they understand ongoing developments on Company issues.
Articles of Association provides for that shareholders holding no less than 10% of the capital have the right to call for a General 8. Members of the Board of Directors are expected to be seriously committed to the Board and the Company, and also to develop
Assembly meeting. and expand their knowledge of the Company’s current operations and its main business, and to be available to contribute to
the work of the Board and Committees.
The Company pursues separation between positions of the Chairman of the Board and any other executive position in the Company, 9. Members of the Board of Directors and the senior executive management will be trained according to capacity.
where H.E. Sh. Abdulla Bin Mohammed Bin Saud Al Thani is the Chairman, Sh. Saud Bin Nasser Bin Faleh Al Thani is the Group CEO of 10. Review and approval of company’s major strategic plans and oversee its execution.
Ooredoo and responsible for its management, and Waleed Al-Sayed is the Deputy Group Chief Executive Officer and Chief Executive 11. Oversee company’s special corporate governance system and the extent of its abidance by the System of Corporate
Officer of Ooredoo Qatar, with responsibility for its business in Qatar and the Group. Governance and legal Entities listed on the main market.
12. Approval of the Guide of Executing the Company’s Strategy and Objectives prepared by the higher executive management,
The value of the Board’s remunerations for the period ending 31 December 2017 amounted to QR11,600,000. which should include determination of means and tools of rapid communication with the authority and other regulatory
parties, and all other parties concerned with governance including nominating a point of contact.
6. Conflict of Interests: 13. Establishing of internal control rules and controls, and of them through a written policy that regulates conflict of interests and
The Company adopts a policy that ensures the confidentiality and integrity any reports of illegal actions relating to employees resolves any situation conflict for all board Members and the higher executive management and shareholders. In addition to
and general performance measures, which are clarified in Ooredoo’s Code of Business Conduct and Ethics. The Code includes the establishing a complete disclosure system which accomplishes justice and transparency, preventing the conflict of interests and
expected behaviour of employees, particularly with regard to compliance with laws and regulations. taking advantage of information.
14. Developing precise policies for board Membership, according to applied laws. .
15. Drafting of a written policy to organise and regulate the relationship between stakeholders and their rights.
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16. Creation of policies and procedures for disclosure to shareholders, debitors, and stakeholders. 10. Qualifications and Duties of the Board Secretary
17. Invitation of all shareholders to attend the General Assembly Meeting according to the Companies’ Law, and the Company’s The Board of Directors has appointed Sheikh Ali Bin Jabor Al-Thani as Secretary of the Board of Directors. Sheikh Ali holds a Bachelor’s
Articles of Association. degree in law from Sharjah University (2010). In 2010, he became a legal advisor in the real estate sector, and in 2013 he joined
18. Approval of the nominations related to appointments at the higher executive management, and the progression plan for these Ooredoo and continued until he was appointed as Chief of Legal and Regulatory Department in Ooredoo Qatar. In 2018 he was
roles. appointed in the position of Acting Chief of Corporate Governance for Ooredoo Group.
19. Creation of awareness programmes as necessary to spread a culture of auto-regulatory and risk management in the Company. The Board Secretary assists the Chairman and all Board Members in executing their duties, and he commits to make sure the Board
20. Approval of a written and clear policy determining the basics and method of remunerating Board Members and determining proceedings are carried out appropriately, including:
the remuneration and incentives of the higher executive management and the workers in the Company according to principles 1. Preparation and revision of Board meetings’ minutes
of corporate governance and legal entities listed on the main market without any discrimination and achievement of approval 2. Filing of the Board’s decisions in a well-maintained record according to meetings’ numbers and the decisions according to its
by the General Assembly. issue date.
3. Preserving the Board’s meetings-related minutes, decisions, memorandums and reports on paper and in electronic formats.
8. Liabilities of the Board 4. Send meetings invitations to Board Members with the meeting agenda two weeks prior to the meeting date, and receiving
The Board is obliged to perform its duties and responsibilities, and is keen on doing the following: Members’ requests to add an item or more to the meeting agenda mentioning the date of its submission.
1. Attend the meetings of the Board’s and its committees, and not to retire the Board except for a necessity and at the appropriate 5. Full coordination between the Chairman of the Board and its Members and concerned parties and stakeholders including
time. shareholders and the administration and employees.
2. Hold high the interest of the Company, partners, shareholders and all stakeholders, and favour it over their private interest. 6. Enable the Chairman and Members quick access to all company documents including its data and information.
3. Provide an opinion on the strategic issues of the Company, its policy in the implementation of its projects, systems of 7. Keep Board Members’ declaration of no combination between membership of the board and occupations from which they are
accountability of employees, their resources, basic appointments and work standards. prohibited, according to Companies Law and Corporate Governance System issued by the commission.
4. Monitor the performance of the Company in achieving its goals and objectives, and to review reports on its performance,
including the annual, semi-annual and quarterly reports. 11. The Company’s Irregularities
5. Supervise the development of the procedural rules for governance and work to ideally implement them in accordance with this As a leading Company in its own field, and in the telecommunication sector, Ooredoo Board of Directors and its top management
system. are keen to implement all rules and regulations outlined in corporate governance and legal entities listed on the main market order
6. Benefit from their diverse skills and expertise to diversify their competencies and qualifications in managing the Company issued by Qatar Financial Markets Authority and Commercial Companies Law No. (11) for 2015. Accordingly, the Company did not
in an efficient and productive manner, and to work to realise the interest of the Company, partners, shareholders and other commit any irregularity during 2018.
stakeholders.
7. Participate effectively in the Meetings of the Company’s General Assembly and meet the demands of its members in a balanced 12. Board Activities in 2018
and fair manner.
In 2018, Ooredoo’s Board of Directors achieved a number of key governance goals and supervised the implementation of a number
8. Refrain from giving any statements, data or information without prior written permission from the President or his authorised
of key successful initiatives, including:
representative. The Council shall nominate the official spokesperson of the Company.
9. Disclose financial and commercial relationships and law suits that may negatively affect performing any functions assigned to • Approving the Group’s performance report for 2018;
the board. • Approving the Group’s financial consolidated statements for 2017 and providing a recommendation to the General Assembly in
this regard;
9. Chairman of the Board’s role and duties • Approving submitting a recommendation to the General Assembly regarding the appointment of Deloitte & Touche as the
The main function of the Chairman of the Board is to lead the board and ensure that the duties are undertaken as required by law and auditors of the Company for 2017;
the relevant legislation, in addition to the following tasks: • Approving the Governance Report for 2017 and providing a recommendation to the General Assembly in this regard;
• Approving distributing a cash dividend of 35% of the nominal share value, and the remunerations of the Chairman and
1. Represent the Company in court, and in its relationship with others, and to communicate with them, and inform the Board of members of the board, and providing a recommendation to the General Assembly in this regard;
their views. • Approving the business plan of the Group for the years 2019, 2020 and 2021, as well as the budget and finance plan for 2019;
2. To chair the Board, selected committees, and General Assembly meetings, and run discussions as openly as possible, to • Approving the financial strategy of the Group;
encourage Board members to participate effectively in discussions that serve the interests of the Company. • Approving the recommendation submitted by the Nomination and Remunerations Committee to assess the performance of
3. Coordinate with the Chief Executive Officer and the heads of the committees and the Secretary of the Board of Directors to Ooredoo Group CEO and Ooredoo Qatar CEO during 2018;
determine the schedule for Board and committee meetings, and other important meetings. • Approving a number of technical decisions related to investment opportunities;
4. Coordinate with the Chief Executive Officer to ensure that information is provided to the Board of Directors, so that the Board • Following up on executing the Group strategy for the coming years, and allocating the necessary budget to do so; and
can make appropriate decisions and follow-up their execution. • Determining the permitted risk margin for the Group’s companies.
5. Review the timing and quality of delivery of supporting documentation to the management’s suggestions to ensure an effective
flow of information to the Board of Directors. 13. Role of Board Committees
6. Guide and enhance the effectiveness of the Board of Directors and members, and assign tasks to them as required.
In order to make the decision-making process more efficient and to support the vision relating to corporate governance, the Board
7. Review monthly results for the Company’s business in coordination with the Chief Executive Officer.
has three main committees: Executive Committee, Audit and Risks Committee and Nomination and Remuneration Committee.
8. Ensure that the Company has good relations with official and non-official departments, and with various media.
9. Issue the agenda for Board meetings, taking members’ suggestions into account. Assess the performance of the Board annually,
Each committee is composed of not less than three Board members (to be appointed by the Board), taking into account the
and the performance of its committees and members, possibly using a third-party consultancy to conduct the evaluation.
experience and capabilities of each Board member participating in the committee. The Board may substitute the committee
10. Encourage Board members to collectively and effectively take part in conducting the Board affairs to ensure that the Board is
members at any time.
undertaking its responsibilities to achieve the interests of the Company.
11. Find effective communications means with shareholders and convey their opinion to the Board.
Each of the Board committees works in accordance with a written charter approved by the Board of Directors that clarifies its
12. Allow the opportunity to non-executive Board Members to effectively take part in and encourage building constructive
responsibilities and authorities. The charter of each committee has verified that it is in line with the Corporate Governance Code and
relationships between executive and non-executive Board Members.
Articles of Association of the Company and the Commercial Companies Law No. 11 for 2015, and the Corporate Governance Code of
13. Keep the members always abreast of execution of the rulings of Corporate Governance and Legal Entities Order issued by the
the Qatar Financial Markets Authority.
Authority.

The Chairman may delegate some of these powers to another member of the Board of Directors, or the Chief Executive Officer, or the
Secretary of the Board.
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Board Committees B. Audit and Risks Committee

The committee is comprised of three independent members, and it assists Ooredoo’s Board in overseeing the integrity of the
Committee Name of Board member Position
Company’s financial statements. It also provides consultancy to the Board on the efficiency and adequacy of internal control systems
Executive Committee H.E. Mohammed Bin Eissa Al Mohannadi Chairman and arrangements for risk management. The committee is also responsible for ensuring that internal and external audit functions
H.E. Turki Mohammed Al Khater Member are independent and objective.

Dr. Nasser Mohammed Marafih Member The committee reviews the annual internal audit and auditors’ reports, and prepares reports on issues arising from auditing the
H.E. Ali Ahmed Al-Kuwari Member Company and its subsidiaries, including management reaction; the level of cooperation and information provided during the audit
process; and the usefulness of the audit report versus cost.
Audit and Risks Committee Mr. Nasser Rashid Al-Humaidi Chairman
Mr. Ibrahim Abdullah Al Mahmoud Member The committee also sets up communication channels between executive management and internal and external auditors.
Sheikh Ali Bin Ghanim Al Thani Member
In addition, the Committee reviews risk management reports, and advises the Board on all matters that need attention and seek a
Nomination and Remuneration decision. The Committee also puts great emphasis on investigating any violations in the Group’s companies.
H.E. Turki Mohammed Al Khater Chairman
Committee
H.E. Ali Ahmed Al-Kuwari Member In 2018 the committee completed a number of major works including:
Mr. Aziz Aluthman Fakhroo Member
• Reviewed the annual and quarterly internal audit reports regularly;
• Reviewed annual and quarterly Risk Management Report regularly;
• Reviewed the annual disclosure results for 2018;
• Approved the annual internal audit plan for 2018;
A. Executive Committee • Approved quarterly financial statements, and reviewed the annual financial statements and submitted a recommendation to
The Executive Committee is comprised of four members and aims to ensure that decisions are made at the highest levels, to achieve the Board;
the Company’s objectives in a flexible and timely manner in accordance with the authority delegated to the committee by the Board • Reviewed the results of the Internal Audit Quality Assurance Review for Ooredoo and Group companies;
of Directors. • Approved the selection process of the auditors for the operating, holding and investment companies of the Group;
• Approved the appointment of an auditor for the Company’s accounts for 2018 and submitted a recommendation to the
The committee is also responsible for studying issues that need detailed and in-depth review before presenting to the Board for final board in this regard;
decision. It also oversees Ooredoo’s strategy and methods deployed for adopting financial and strategic investments. • Approved the recommendations of the report on review of the requirements listed on the main markets issued by Qatar
In 2018 the committee completed a number of major projects: Financial Markets Authority.
• Reviewed investment opportunities and made recommendations to the Board of Directors;Reviewed subsidiaries’ work plans • Reviewed Fraud Policy, Risk Management Policy, Corporate Governance Guide and Ooredoo Group’s Decision-Making
and their budgets and provided recommendations to the board in this regard; Manual, Archiving, Debts Control Policy, Policy for owning selling and renting Real Estates, and the charter of the
• Reviewed recommendations for awarding contracts, and took appropriate decisions; administrative committee for Ooredoo Group, and submitted them to the Board.
• Reviewed the conditions of Ooredoo Group companies to determine suitability and position in the markets in which it operates, • Approved the results of the performance index of the Internal Audit Department and Corporate Governance Department for
and made recommendations to the Board of Directors; 2017;
• Reviewed the Company’s financial portfolios; • Approved the performance index of the Internal Audit Department and performance index of the Corporate Governance
• Reviewed the strategies of the Group’s companies and set their priorities; Department for 2019;
• Approved updating the financial limits of other parties (banks and financial institutions); • Approved the budget of the Internal Audit Department and the budget of the Corporate Governance Department for 2018;
• Approved the Group work plan for 2019, 2020, and 2021, as well as approving 2019 budget, and providing a recommendation • Approved the Governance report for 2018 and provided a recommendation to the Board in that regard.
to the Board in this regard. • Approved the amendment of the organisational structure of the Internal Audit Department, and provided a recommendation
• Approved Ooredoo Group work plans for 2019, 2020, and 2021, as well as approving the 2019 budget, and provided a to the Nominations and Remunerations Committee in that regard.
recommendation to the Board in this regard.
• Approved the financing strategy and plan for 2019 and provided a recommendation to the Board in this regard. The committee held eight (8) meetings in 2018.
• Approved Ooredoo Qatar work plans for 2019, 2020 and 2021, as well as approved the 2018 budget and provided a
recommendation to the Board in this regard. According to the annual evaluation, the Board of Directors is satisfied with the committee’s performance while executing its
responsibilities and authorities, as well as the recommendations it provided during the year ending 31 December 2018.
The committee held six (6) meetings in 2018.
According to the annual evaluation, the Board of Directors is satisfied with the committee’s performance while executing its Number of the Audit and Risk
responsibilities and authorities, as well as the recommendations it provided during the year ending 31 December 2018. Management Committee’s
Members Name
Meetings the member has
attended during 2018
Number of the Executive 1. Mr. Nasser Rashid Al Humaidi 8
Committee’s Meetings
Members Name 2. Mr. Ibrahim Al Mahmoud 8
the Member has
attended during 2018 3. Ali Bin Ghanim Al-Thani Group represented by Sheikh Ali Bin Ghanim Al Thani 5
1. H.E. Mr. Mohammed Bin Eissa Al Mohannadi 6
2. General Retirement & Social Insurance Authority represented by H.E Mr. Turki Mohammed Al
6 C. Nominations and Remunerations Committee
Khater
The committee is comprised of three members. It assists the Board in executing its responsibilities in regards to nominating and
3. Dr. Nasser Mohammed Marafih 6 appointing Ooredoo Board members, and Board members of its subsidiaries, and determining the remuneration of the Chairman
4. Qatar National Bank (QNB) represented by H.E. Mr. Ali Ahmed Al-Kuwari 2 and members of the Board, and the remuneration of members of the senior executive management and employees. The committee
also takes part in assessing the performance of the Board.
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In 2018, the committee completed a number of major works: In June 2012, Mr. Yousif Al Kubaisi was appointed as Head of Corporate Sales and
International Services at Ooredoo Qatar, where he helped the company expand its
• Approved the appointment of Ooredoo representatives on Asiacell Board; partnerships with many operators and global telecoms companies. In 2014, Mr. Al Kubaisi
• Approved the performance evaluations of the executive directors of Ooredoo Qatar for 2017; was appointed Chief Executive Officer of Ooredoo Global Services specialising in corporate
• Approved the performance evaluation of the Operations Manager of Ooredoo Qatar; sales. He has been instrumental in leading the company’s growth internationally.
• Approved the performance evaluation of the CEO of Ooredoo Qatar and Deputy CEO of Ooredoo Group; provided a Mr. Yousuf holds a bachelor’s degree in Electrical Engineering from the University of
recommendation to the Board; Western Michigan in the United States of America.
• Approved performance index card for Ooredoo Group for 2018;
• Approved performance index card for Ooredoo Qatar for 2018;
Abdulla Al-Zaman was appointed as Chief Finance Officer of Ooredoo Qatar in January
• Approved the performance evaluation of the CEO of Ooredoo Group for 2018 and provided a recommendation to the Board; Abdulla Ahmed Al-Zaman
2018, after joining the Group in 2013 and holding multiple senior roles. He is responsible
• Approved performance index card for executive chiefs of Business Units (CXOs) of Ooredoo Group for 2018; Chief Finance Officer – Ooredoo
for facilitating organisational accountability and transparency, maintaining sustainable
• Approved performance index card of Ooredoo Group for 2018; Qatar
value for shareholders and other stakeholders. Mr. Al-Zaman has extensive experience in
• Approved performance index card for Ooredoo Qatar and performance index card for Business Units Chiefs’(CXO) for 2018;
leadership roles within finance, both in telecommunications and other industries. He holds
• Approved the suggestion regarding Ooredoo representatives on subsidiaries’ boards, Asiacell, Ooredoo Kuwait, Ooredoo
a bachelor’s degree in Finance & Business Administration from California, USA, and an
Oman, Ooredoo Myanmar, Ooredoo Tunisia, Ooredoo Palestine, Starlink;
EMBA from the University of Hull.
• Approved the appointment of Executive Director Consumer Commercial;
• Approved the new organisational structure for Technology;
• Approved appointment of Chief Technology and Infrastructure Officer for Ooredoo Qatar; Mohammed Al-Kuwari was appointed as Chief Corporate Services Officer of Ooredoo
• Approved the appointment of President Director and Chief Executive Officer of Indosat Ooredoo; Mohammed Al-Kuwari
Qatar in January 2012, having joined the company in 2005. He is responsible for Human
• Approved the amendment of some items in the Human Resources Policy (version 3.0). Chief Corporate Services Officer –
Resources, Procurement and Supply Chain, Building and Support Services and Operational
Ooredoo Qatar
Excellence. Mr. Al-Kuwari has more than 20 years of rich and diverse experience in HR,
The committee held seven (7) meetings during 2018. Procurement and Support Services. He has a bachelor’s degree in Science – Business
According to the annual evaluation, the Board of Directors is satisfied with the committee’s performance while executing its Administration from The American University, Washington DC.
responsibilities and authorities, as well as the recommendations it provided during the year ending 31 December 2018.

Number of The Nominations and Munera Al-Dosari was appointed as Chief Strategy Officer of Ooredoo Qatar in February
Munera Fahad Al-Dosari
Members Name Remunerations Committee Meetings 2017, after joining the Group in 2010. Ms. Al-Dosari is responsible for the formulation and
Chief Strategy Officer – Ooredoo
the member has attended during 2018 implementation of Ooredoo Qatar’s corporate strategy to help meet business plan and
Qatar
strategic goals. She has worked on various high-profile programmes and projects and
1. General Retirement & Social Insurance Authority represented by has been instrumental in implementing industry-leading governance frameworks. Ms. Al-
7
H.E Mr. Turki Mohammed Al Khater Dosari has a bachelor’s degree in Electronics Engineering from University of Portsmouth
2. H.E.Mr. Mohammed Bin Isa Al Mouhanadi 3 and an Executive Specialised Master, Strategic Business Unit Management from HEC Paris,
Qatar.
3. Mr. Aziz Aluthman Fakhroo 6
4. Qatar National Bank (QNB) represented by H.E. Mr. Ali Ahmed Al-Kuwari 3
Sheikh Ali Bin Jabor Al-Thani was appointed Chief Legal & Regulatory Officer of Ooredoo
Sh. Ali Bin Jabor Al-Thani
Qatar in March 2016, having joined the Group in 2013 in the Corporate Governance
14. The Executive Management Chief Legal & Regulatory Officer –
department. Sheikh Ali is responsible for the provision of strategic, proactive and forward-
Ooredoo Qatar
The role of Executive Management is to manage the Company’s business operations, which requires planning different looking advice to business units, CEO and the Board on all aspects of external contracting,
developments’ processes in adherence to the company’s principles and practices. In addition, Executive Management is responsible internal policies, litigation and compliance within the legal and regulatory frameworks in
for monitoring the development of financial performance and business plans. The Executive Management team reports to the Chief Qatar. Sheikh Ali has a bachelor’s degree in Law from the University of Sharjah.
Executive Officer and Chief Operating Officer, with their performance monitored by the Board of Directors.

Bjorn Stefan Axelsson was appointed as Chief Technology Officer of Ooredoo Qatar in
Bjorn Stefan Axelsson
Executive Manager Name Summary Curriculum Vita February 2016, having had various leadership roles within Ooredoo Technology BU.
Chief Technology Officer –
Stefan is responsible for enabling Ooredoo business units with best-in-class Network &
Ooredoo Qatar
Mr. Waleed Al Sayed IT platforms and supporting achievement of revenue and profitability goals. Mr Axelsson
Mr. Waleed Al Sayed is the Executive Vice President of Ooredoo Group and Chief
Deputy Group Chief Executive Executive Officer of Ooredoo Qatar since November 2015. He is currently the President has a Master of Science in Physics & Electrical Engineering from Linköping Institute of
Officer and Chief Executive Officer of Commissioner of Indosat Ooredoo and Chairman of Ooredoo Myanmar and a Board Technology, Sweden
Ooredoo Qatar Member of MEEZA.

Mr. Waleed joined Ooredoo in 1987 and held several important positions in a number of Sheikh Nasser bin Hamad bin Sheikh Nasser bin Hamad bin Nasser Al Thani was appointed as Chief Business Officer
departments such as Operations Management, Sales, Marketing, Project Management, Nasser Al Thani of Ooredoo Qatar in July 2017. In his current role he is responsible for end-to-end profit
Business Solutions, Communications, Public Relations and Customer Service. He oversaw and loss accountability for Ooredoo Qatar’s B2B portfolio including Connectivity, ICT
Chief Business Officer –
the implementation of several corporate social responsibility initiatives, reinforcing and Mega Projects as well as the Qatar Data Centre. Sheikh Nasser has an MBA from the
Ooredoo as a community-focused company and contributing to the company’s efforts to Ooredoo Qatar
University of Wales, a bachelor’s degree from Qatar University and has attended various
win numerous local, regional and international awards.
Executive Development programmes from HEC Paris, London School of Economics and
Mr. Waleed Al Sayed holds an Executive MBA in Business Administration with Honors from
HEC Paris. IMD Switzerland. He also holds a Telecoms Mini MBA from Telecoms Academy, United
Kingdom.

Mr. Yousef Abdullah Al Kubaisi, Yousef Abdullah Al Kubaisi was appointed Chief Operating Officer at Ooredoo Qatar in
Chief Operating Officer, Ooredoo November 2015. He currently serves as Chairman of Ooredoo Tunisia, Ooredoo Global Damian Philip Chappell was appointed as Chief Consumer Officer of Ooredoo Qatar in July
Services, Starlink and is a Navlink Board Member. Damian Philip Chappell
Qatar Chief Consumer Officer – Ooredoo 2017, having been one of the driving forces behind Ooredoo Qatar’s Product Marketing
Qatar team since joining Ooredoo in 2008.
Mr. Yousif Al Kubaisi joined the company in 1987 and has held several managerial positions
related to international telecommunication infrastructure, corporate services and legislative In his current role Mr Chappell is responsible for all customer facing activities and product
functions. offerings for our Retail Customers. Mr Chappell has a bachelor’s degree in Applied Science
In Information Technology from Swinburne University of Technology, Australia.
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Mohammed Al Emadi 17. Supervising and Controlling the Group

Mohammed Al-Emadi was appointed as Group Chief Audit Executive (GCAE) in November
Group Chief Audit Executive Monitoring and supervision at Group level has separate lines for operating strategically and in financial control in a full review in each
2011 and has successfully transformed the Internal Audit Function into a Group Internal
Audit. He is responsible for providing assurance and consulting services to Ooredoo of the affiliated companies. This is done according to a regular cycle of visits and meetings of the executive management of the Group
Qatar, Ooredoo Group and Starlink, as well as supporting Internal Audit functions in the with the executive management of the affiliated companies, supported by a specific schedule for reports on internal performance.
Operating Companies. Mr Al-Emadi holds a bachelor’s degree in Accounting from Qatar This detailed inspection of the performance of each operating company is considered a primary source of information, provided to
University and a Masters in Accounting and Finance from University of Southampton, UK. shareholders through quarterly or annual reports.

Control and surveillance measures vary in each operating company, reflecting the delegation of powers to the Board of Directors and
executive management of each of the companies, but all companies at Group level are required to issue reports according to what is
• Total value of the remunerations to the executive management for the year ending on 31 December 2018 was equivalent expected from them. The process of unifying the Audit Committees’ charters will ensure that overseeing the system of internal control
to QR23.8 million, is delegated to audit committees in line with international best practice.
• The Board of Directors’ evaluation of the performance of the Executive Management: Based on the annual evaluation,
the Board of Directors is satisfied with the performance of the Executive Management while executing its responsibilities, 18. Risk management and internal control
authorities and recommendations which have been provided during the year ending 31 December 2018. Ooredoo has established a system for monitoring, managing and controlling internal and external risks to protect the Company’s
investments and operations inside and outside Qatar. This system is designed to:
15. Corporate Governance Department
The Corporate Governance Department was established in 2008 and is responsible for assisting the management and Board in • Identify, assess, monitor and manage risks in the company; and
ensuring the efficiency and implementation of corporate governance policies and practices in Ooredoo and its Group. • Inform the Ooredoo Board of material changes to Ooredoo’s risk profile.

In 2018, the Corporate Governance Department completed a number of major works: The Board is responsible for establishing the risk management system and for reviewing the effectiveness of its implementation in
Ooredoo and its Group. Management is responsible for systematically identifying, assessing, monitoring and managing material risks
• Monitored the implementation of Corporate Governance in all of Ooredoo Group companies; throughout the organisation. This system includes the Company’s internal compliance and control systems. In addition, the Company
• Reviewed the list of Ooredoo representatives on the Boards of the Group’s companies; has tight controls and well-established systems that control its transactions and relationships with related parties.
• Adopted an employee disclosure procedure for non-Ooredoo interests;
• Monitored the publication of the Corporate Governance code in Group companies; Ooredoo Group implements a risk management policy at Group level, where it states that the Group’s Board of Directors, supported
• Assisted the Board of Directors in the annual assessment and evaluation of adherence to the Code of Conduct; by Audit Committee and Internal Audit Department, will review every quarter all risks that Ooredoo and its subsidiaries might face.
• Management of Special Purpose Companies (SPVs); Identifying risks that any of the operating companies might face is the responsibility of its executive management and employees, while
the Group’s Risk Management examines the risk ratings determined, and the action plans to address these risks.
• Assisted the Board in conducting governance workshops;
• Compliance with the order of Corporate Governance and listed Legal Entities on the main market.
The concerned department gathers all the potential risks and planned measures to mitigate these risks, and presents them to the Audit
and Risk Management Committee.
16. Internal audit objectives and activities
Providing independent and objective consultancy services drafted in a way that contributes to adding more value and improving The department then analyses the effectiveness of Ooredoo’s risk management and compliance with internal control measures, as well
Ooredoo’s processes. The activity performed by the internal audit helps to achieve the company’s objectives through a structured and as the effectiveness of their implementation.
systematic approach to assess and improve the effectiveness of risk management, monitoring and governance. Also, the Internal Audit
department complies with the International Standards for the Professional Practice of Internal Auditing to provide practical instructions Measures for identifying and managing risks vary between affiliated companies. However, these measures are being standardised,
for the management of internal audit, planning, execution, and reporting activities, which are designed to add more value and improve starting with reviewing and amending Audit Committee charters in affiliated companies to ensure that audit committees are
permanently assigned to oversee the risk management in subsidiaries.
Ooredoo processes/operations.
These tasks are performed under the supervision of the Audit and Risks Committee. There are clear instructions from the Board, Audit
High level financial measurements are collected at Group level according to the recurring timetables, which might be monthly,
Committee, and Executive Management to all units to work in accordance with external and internal audit systems, and to respond to quarterly, or yearly, depending on the details of these measurements. These measurements provide an indication as to the risks faced
any issue or topic raised by auditors. by each OpCo, with special attention to issues of cash and funding needs as well as the degree of endurance to be able to deal with the
unexpected.
In 2018, the Internal Audit Department completed a number of major works:
• Prepared an internal risk-based audit plan; 19. Company’s adherence to internal and external audit systems
• Reviewed and evaluated the operations, risk management and internal control framework through implementing the approved The Company has appointed an external auditor and is working on adherence to internal and external audit systems. There are
internal audit plan; decisions and clear instructions from the Board of Directors, Audit and Risks Committee and senior executive management that
• Reviewed quarterly and annual Enterprise Risk Reports of Ooredoo Qatar and the Group and assessed the effectiveness of plans emphasise the necessity for all sectors and departments of the Company to adhere to internal and external audit, and deal with all
to reduce these risks; cases identified by the auditors.
• Complied with the Internal Audit Manual based on the International Standards for the Professional Practice of Internal Auditing to
provide practical guidance to manage internal audit activity, planning, execution and reporting; With regard to technical and accounting reports, some observations are contained in the reports of the Internal Auditor, External
• Reviewed the quarterly Internal Audit Department reports in Group companies; Auditor and the Audit Bureau. These are being dealt with as appropriate.
• Reviewed Risk Internal Audit plans for Group companies; providing advice and consultation.
• Followed up on the execution of the Internal Audit Department programme to improve and control quality for internal audit Also, the Company has a policy to ensure staff protection and confidentiality in the event of informing them of any suspicious
departments in the Group and its companies; transactions. This policy has been included as part of the Code of Ethics and Business Conduct.
• Coordinated between External Auditors, Audit Bureau Qatar and management;
• Supported operating companies’ internal audit functions; 20. Availability of information
• Reviewed recommended policies to provide opinion on the efficiency of internal audit procedures.
The Company guarantees for all shareholders the right to review all relevant information and disclosures through its website and
annual reports that are made available to all shareholders. Shareholders can access all information relating to Board members and
To ensure transparency and credibility, an investigation is held to look into any matters that draw the attention of the internal auditor,
their qualifications, including the number of shares they own in the Company, their presidencies or membership on the boards of
external auditor, or finance team, based on the nature of those issues.
directors of other companies, as well as information on executive management of the Company. All stakeholders are entitled to access
to all relevant information.
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In Articles (41), (43), and (48) of the Company’s Articles of Association, the rights of minority shareholders have been implicitly 25. The Company’s achievements
provided for: In 2018, the company achieved a number of key milestones, notably:
• The Board of Directors may invite the Assembly to convene whenever the need arises, and shall call upon it whenever requested • May 2018 saw Ooredoo become the first operator in the world to launch a live 5G network on the 3.5 GHz spectrum band, with
by the controller or a number of shareholders representing not less than 10% of its capital. the deployment of the 5G Supernet in Qatar.
• The General Assembly shall convene at an extraordinary meeting upon the invitation of the Board, or upon a written request • Ooredoo continued to be a data leader in its markets with 4G networks available in 8 of Ooredoo’s 10 markets.
addressed to the Board by a number of shareholders representing not less than one quarter of the company shares. • The company was successful in increasing the monetisation of its data business, with significant data growth coming from
• Decisions of the General Assembly issued in accordance with the Company’s Articles of Association are binding for all consumer and enterprise customers. In total, data revenue increased to 47% of Group revenue, with revenue from data
contributing QAR 14.2 billion in 2018.
shareholders, including those who are absent from them, those who disagree with the opinion, or those who are disqualified or
• Ooredoo maintained its position as one of the 10 most valuable brands in the Middle East, according to the Brand Directory
deficient.
rankings for 2018.
• Ookla’s Speedtest Intelligence recognised Ooredoo Qatar, Ooredoo Myanmar, Ooredoo Oman and Ooredoo Algeria for their
21. Dividend policy provision of the fastest mobile network in their respective countries.
Profits are distributed upon a recommendation by the Board of Directors and a decision of the General Assembly of the Company in its • A report from research house Arthur D. Little confirmed Qatar’s Gigabit-speed fibre penetration as the highest in the world, and
ordinary annual meeting, in compliance with Article 53 of the Articles of Association of the Company. attributed this achievement to the rapid roll-out of fibre by Ooredoo Qatar. The report shows 99 percent of Qatar’s households
are covered by fibre, with 88 percent connected.
22. Shareholder records • Ooredoo Tunisia launched the first Tunisian Internet of Things (IoT) network in 2018, to facilitate the development of Smart City,
Smart Industry and Smart Environment solutions, among others.
Subject to the provisions of Article 10 of the Company’s Articles of Association, Article 159 of the Commercial Companies Law No. 11
• Ooredoo Myanmar successfully acquired additional spectrum, including 2 x 10 MHz of the 1800MHz spectrum in January and 2 x
for 2015, and Article 30 of the Corporate Governance Code issued by the Qatar Financial Markets Authority and at the direction of
2.2 MHz of EGSM 900MHz spectrum in November.
Qatar Exchange, the Company keeps true, accurate, and up-to-date records of the Company’s shareholders via the central system for
• Wataniya Mobile launched its 3G network in West Bank, Palestine, in January 2018, offering data and digital services for the first
shareholders, run by the Stock Exchange.
time. The company recorded impressive customer growth throughout the year, building on this launch and the launch of services
in the Gaza Strip in October 2017.
Any shareholder or any related parties can look at the shareholders’ register, and obtain all relevant information.
• Ooredoo Algeria rolled out its 4G network to 48 provinces in April, becoming the first mobile operator to have a presence in all
The two tables below show the major shareholders and shares held by members of the Board. provinces in the country.
• Ooredoo Myanmar successfully moved around 80% of customer experience interactions onto digital channels during the year, as
part of its digital journey.
Major Shareholders • Ooredoo Qatar tested the world’s first self-driving 5G-connected aerial taxis and connected more than 80 live 5G sites on the
3.5GHz spectrum band in the country.
Name Country Number of Shares Percentage • Ooredoo Oman upgraded 14 of its Home Broadband Network sites with massive multiple-input and multiple-output (Massive
MIMO) in preparation for the roll-out of 5G by December.
Qatar Holding Company Qatar 165,580,842 51.7%
• In Iraq, Asiacell was awarded the CARE Award for excellence in customer service.
General Retirement and Social Insurance Authority Qatar 40,060,916 12.5% • Ooredoo Myanmar demonstrated the country’s first-ever voice call over LTE in September.
Abu Dhabi Investment Authority United Arab Emirates 32,031,994 10.0% • Ooredoo Group successfully tested the first live eSIM on its world-class Supernet network in Qatar and in Kuwait.
• Wataniya Mobile in Palestine rebranded to Ooredoo Palestine in November 2018. The rebranding campaign will empower
General Military Retirement and Ooredoo Palestine on all levels including commercial and technical, and will support the performance of all departments across
Qatar 6,202,996 1.9%
Social Insurance Authority the company.
• The Group’s social media campaign with global brand ambassador Lionel Messi, “Enjoy the Internet,” engaged with tens of
millions of people over the year.
Shares held by members of the Board • The company’s performance was reflected in the number of regional and international awards received, including the Telecom
World Awards, CMO Asia Awards, Stevie International Business Awards and Telecom Asia Awards.
Name of Board Member Number of Shares Country Benefeciary Name
• In Palestine, Wataniya Mobile (now Ooredoo Palestine) successfully concluded a capital share increase of US$35 million through a
General Retirement & Social Insurance Authority General Retirement & Social secondary offering.
40,060,916 Qatar
represented by H.E Mr./Turki Mohammed Al Khater Insurance Authority • The Group finalised a US$200 million loan over a five-year period with KFW IPEX Bank in Germany.
H.E Mr. Turki Mohammed Al Khater 5,000 Qatar H.E Mr. Turki Mohammed Al Khater
26. Parties Concerned
Qatar National Bank (QNB) represented by Mr. Ali
2,502,760 Qatar Qatar National Bank (QNB) The company has strict controls and deep-rooted regulations which govern its activities in going into deals or relationships with parties
Ahmed Al-Kuwari
concerned. Also, the company’s policy prohibits the Chairman and Members of the Board from making any deals for selling or buying
Mr. Ibrahim Al Mahmoud 6,200 Qatar Mr. Ibrahim Al Mahmoud the company’s shares during the period specified by Qatar Stock Exchange, until the company’s financial results are disclosed to the
Mr. Nasser Rashid Al Humaidi 5,000 Qatar Mr. Nasser Rashid Al Humaidi public and it is confirmed none of the parties concerned has made any deals during ban periods.
Information is available on deals held with the related parties concerned through revising the notes complementing audited and
Dr. Nasser Mohammed Marafih 3,200 Qatar Dr. Nasser Mohammed Marafih consolidated financial lists for the fiscal year ending 31 December 2018.

23. Fair treatment of shareholders and voting rights 27. Social Responsibility:

According to the provisions of Article 16 of the Company’s Articles of Association, which states that “each share shall give its holder Corporate Social Responsibility (CSR) focuses on ethical, social and environmental issues. Ooredoo is committed to ethical and legal
standards in terms of practising its activities and contributing to economic development and improving the quality of living conditions
equal proprietary rights as other shareholders, without any discrimination, in the Company’s assets and equal rights to receive
of the company’s employees and their families, as well as the local community and society as a whole. It also works to respond to the
dividends as herein-after provided”, the dividend will be distributed to the shareholders. demands of stakeholders and the environment in which they operate.

According to the provisions of Article 38 of the Company’s Articles of Association, each shareholder has the right to attend the General Ooredoo believes that CSR is an investment in society. It works to engage management and employees in CSR activities. The company
Assembly, either personally or by proxy. is keen to invest in the local community in Qatar, as well as in the communities in which it operates. Based on our belief that Ooredoo
can enrich customers’ digital lives and stimulate human development, the company works hard to ensure that everyone in its markets
is able to take full advantage of our leading networks.
24. Employees of the Company
The human resources policy adopted and applied by the Company is prepared in accordance with the provisions of the Labour Law No. The company is committed to the United Nations’ Goals of Sustainable Development. Ooredoo supports those goals in a number of
14 of 2004, and related ministerial decisions which serve the interests of the Company and its employees, and takes into account at the areas across many initiatives, including projects to eradicate extreme poverty, improve human life and work to create a healthier world
in the future. Details of these initiatives can be found in the Social Responsibility section of the Ooredoo Annual Report 2018.
same time the principles of justice, equality, and non-discrimination on the basis of sex, race, or religion.
70 Ooredoo Annual Report 2018
71

Financial
Review

Delivering
a robust
performance
72 Ooredoo Annual Report 2018
73

Financial Review continued

EBIT Total Group Debt % change % change

Amount in QR millions Amount in QR millions (Note B) 2018 2017 2017 to 2018 2016 2016 to 2018

4,202 36,966
Operations
Revenue QR millions 29,927 32,646 -8% 32,503 -8%
EBITDA QR millions 12,202 13,640 -11% 13,379 -9%
EBITDA margin Percentage 41% 42% 41%
Net profit attributable to Ooredoo shareholders QR millions 1,565 1,897 -18% 2,193 -29%
Earnings per share (EPS) - basic and diluted QR 4.89 5.92 6.84

43,185

43,101

41,100

40,144

36,966
5,322

5,073

5,015

5,220

4,202

Cash Dividend declared per share QR 2.50 3.50 3.50

Long Term
Short Term
Dividend payout ratio (Note A) Percentage 51% 59% 51%
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Operational cash flow QR millions 7,867 9,427 -17% 9,195 -14%
Capital expenditure QR millions 4,872 4,541 7% 5,982 -19%
Net Debt & Net Debt/EBITDA Free Cash Flow
Amount in QR millions (Note C) Amount in QR millions (Note D) Employees Number 16,469 17,279 -5% 17,016 -4%

22,260 4,921 Financial position

Total net assets QR millions 28,178 29,585 -5% 29,001 -3%
Net debt (Note C) QR millions 22,260 25,138 -11% 27,715 -20%
Net debt to EBITDA Multiples 1.8 1.8 2.0
2.3x

2.2x

2.0x

1.8x

1.8x

Free cash flow (Note D) QR millions 4,921 6,167 -20% 5,129 -4%
29,391

28,489

27,715

25,138

22,260

Market capitalization QR millions 24,024 29,069 -17% 32,609 -26%

1,764

1,477

5,129

6,167

4,921
Customers
Wireless postpaid (incl. wireless broadband) Thousands 5,235 5,426 -4% 4,993 5%
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Wireless prepaid Thousands 109,165 157,795 -31% 132,774 -18%
Total Customers Proportional Customers Fixed line (incl. fixed wireless) Thousands 825 726 14% 656 26%
Thousands Thousands (Note E)
Total Customers Thousands 115,225 163,946 -30% 138,422 -17%

115,225 82,453 Investor relations

Ooredoo’s investor relations activities are intended to promote understanding of the company by its shareholders, investors and
other market participants, encourage them to properly assess the company’s value, and provide feedback on market opinions to the
management of Ooredoo.

Key areas of focus:

107,254

116,751

138,422

163,946

115,225

113,509
74,457

82,006

97,320

82,453

• The delivery of timely and accurate information;

• Ensuring disclosure, transparency and governance practices continue to be enhanced and region-leading; and
• Proactive investor outreach and management access via conferences, roadshows, calls, and regular meetings.
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Dividend policy

Share price Share price Ooredoo Q.P.S.C. has a stated strategy of expanding organically and inorganically within key geographies and strategic lines of
Company Share price ORDS QD Equity ORDS ORDS QD Equity
QD Equity
DSM Index business. A key tenet of this strategy is ensuring flexibility for the company in declaring dividend distributions. This flexibility allows
ownership profile performance
DSM Index
DSM Index
130.00
Ooredoo to balance the demands of its growth strategy while still maintaining sufficient reserves and liquidity to address operational
130.00
and financial needs. As a result, dividends may vary from year to year.
Value rebased to one hundred
Value rebased to one hundred

120.00 120.00

52% State of Qatar 110.00 110.00

15% Other Qatari government- 100.00

100.00
related entities
90.00 90.00
10% Abu Dhabi Investment
Authority 80.00 80.00

23% Others 70.00 70.00

18

8
88

8
17

18
18
8
88

88
88

8
188
8
7

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18
8

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18

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D

Note A Dividend payout ratio = dividend/net profit Note C Net Debt = Total Loans and Borrowings + Contingent Liabilities
to Ooredoo shareholders. (letters of guarantee + letters of credit) + Finance Lease + Vendor
Note B Short term debt includes debt with a maturity Financing less cash (net of restricted cash and Banks below BBB+
of less than twelve months. rating)
Note D Free cash flow = net profit plus depreciation and amortisation
less capex; net profit adjusted for extraordinary items.
Note E Proportional customers represent the customers for each
operating company, multiplied by the effective stake in that
operating company.
74 Ooredoo Annual Report 2018
75

Consolidated
Financial
Statements

Creating
long-term
growth

Contents

76 Independent auditor’s report

Consolidated financial statements
80 Consolidated statement of profit or loss
81 Consolidated statement of comprehensive income
82 Consolidated statement of financial position
84 Consolidated statement of changes in equity
86 Consolidated statement of cash flows
88 Notes to the consolidated financial statements
76 Ooredoo Annual Report 2018
77
Deloitte & Touche – Qatar Branch Tel : +974 44341112
AI Ahli Bank Head Office Building Fax : +974 44422131
Suhaim Bin Hamad Street, AI Sadd Area www.deloitte.com
P.O. Box 431, Doha – Qatar

Independent Auditor’s Report

Independent Auditor’s Report (continued)

Key audit matters How our audit addressed the key audit matters
QR. 99-8
RN: 0492/SM/FY2019 Impairment of intangible assets and goodwill
To the shareholders of Ooredoo Q.P.S.C.
Doha, Qatar The Group’s total assets include intangible assets and We tested the recoverable value assessment models and the key
goodwill of QR. 26,656,686 thousand, which represents assumptions used by management with the involvement of our valuation
Report on the Audit of the Consolidated Financial Statements 31% of total assets. specialists. Our audit procedures included the following:

Opinion • Understanding the business process for recoverable value

We have considered their carrying value as a key audit
We have audited the consolidated financial statements of Ooredoo Q.P.S.C. (the “Company”), and its subsidiaries (together the matter because the evaluation of the recoverable assessment, identifying the relevant internal controls and testing
“Group”) which comprise the consolidated statement of financial position as at 31 December 2018, and the consolidated statement amount of the intangible assets and goodwill requires their design, implementation and operating effectiveness of
of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated significant judgements and estimates, especially of the controls over the impairment assessment process, including
statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. assumptions used in determining the discounted future indicators of impairment.
cash flows and utilization of relevant assets. • Evaluating whether the cash flows in the models used by
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial management to calculate the recoverable value are in accordance
position of the Group as at 31 December 2018, and its consolidated financial performance and its consolidated cash flows for the Refer to the following notes to the consolidated financial with IAS 36 Impairment of Assets.
year then ended in accordance with International Financial Reporting Standards (IFRSs). statements: • Obtaining and analyzing the approved business plans for each
such asset (or CGU, as applicable) to assess accuracy of the
Basis for Opinion • Note 3.1 – Basis of consolidation; computations and the overall reasonableness of key assumptions;
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards • Compared actual historical cash flow results with previous forecasts
• Note 3.3 – Summary of significant accounting
are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. to assess forecasting accuracy.
policies;
We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for • Assessing the methodology used by the Group to estimate the
Professional Accountants (IESBA Code) together with the other ethical requirements that are relevant to our audit of the Group’s • Note 13 - Intangible assets and goodwill; and Weighted Average Cost of Capital (WACC) and benchmarking that
consolidated financial statements in the State of Qatar, and we have fulfilled our other ethical responsibilities. We believe that the • Note 39 – Significant accounting judgements and with discount rates used by other similar businesses external sector
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. estimates. related guidelines;
• Benchmarking assumptions on long term growth rates of local GDP
Key Audit Matters and long term inflation expectations with external sources of data
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated published by global monetary agencies; and
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial • Benchmarking the values with market multiples where applicable.
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We performed sensitivity analysis on the key assumptions used by
Key audit matters How our audit addressed the key audit matters management to understand the extent to which these assumptions need
to be adjusted before resulting in additional impairment loss.
Revenue recognition and related IT systems
Further, we instructed and ensured that the component auditors of the
The Group reported revenue of QR. 29,926,724 We updated our understanding of the Group’s revenue recognition policies; Group’s significant entities have performed consistent audit procedures
thousand from telecommunication related activities. in particular, the adoption of IFRS 15 and identified the internal controls as per above, as applicable.
including entity level controls adopted by the Group for the accounting
We have considered this as a key audit matter due to processes and systems under the new accounting standard. We assessed the overall presentation, structure and content of the
the estimates and judgments involved in the application related disclosures in notes 3.1, 3.3, 13 and 39 to the consolidated
We tested revenue through a combination of controls testing and financial statements.
of the revenue recognition accounting standards; and
substantive audit procedures which included:
the complexity of IT systems and processes used in the
Group’s revenue recognition. • Updating our understanding of the significant revenue processes and Provisions and contingent liabilities from tax, legal and other regulatory matters
identifying the relevant controls (including IT systems, interfaces and
The Group has adopted IFRS 15 – Revenue from reports); The Group operates in multiple jurisdictions that In responding to this area of focus, our procedures included the
Contracts with Customers effective from 1 January 2018, • Performing automated and manual controls tests, and substantive tests, exposes it to various tax, legal and other regulatory following:
which resulted in changes in key accounting policies, to ascertain accuracy and completeness of revenue; matters. We have considered this as a key audit matter • Understanding the group’s policies in addressing tax, legal and
judgments and estimates, and disclosures for revenue • Testing IT general controls, covering pervasive IT risks around access because of the following: regulatory requirements;
recognition. As permitted by transitional provisions security, change management, data centre and network operations;
1. There is a risk of non-compliance with the • Assessed the adequacy of the design and implementation of controls
of IFRS 15, the Group elected not to restate the • Assessing and testing Group’s revenue accounting policies including the
regulatory requirements and laws which includes over the appropriateness and completeness of provisions;
comparative numbers, and recorded an adjustment of application of new accounting policies, key judgements and estimates
but not limited to legal, regulatory and taxation
QR. 229,554 thousand to the opening retained earnings applied by management in consideration of the requirements of IFRS 15; laws. Such non-compliance may have financial • Discussed open matters with the group’s tax, legal and regulatory
as at 1 January 2018. • Performing data analysis and analytical reviews on significant revenue impact (i.e., provision, contingent liabilities, etc.) teams;
streams; on the components and might also affect the • Read external legal opinions and other relevant documents supporting
Refer to the following notes of the consolidated financial • Testing IT application controls around input, data validation and component’s ability to continue as going concern. management’s conclusions on these matters, where available; and
statements: processing of transactions;
2. The accounting of these matters require significant • Obtained direct confirmation and/or discussion with third party legal
• Assessing the design of the systems and processes to account
• Note 3.3 – Summary of significant accounting judgements by management in estimating the counsel and tax representatives regarding material cases, where
for transactions in accordance with the new standard and used in provisions and related disclosures in accordance
policies; applicable.
determining the estimated impact of the initial application of IFRS 15; and with IFRS.
• Note 4 – Revenue; • Testing and validating the controls implemented on the new revenue
Refer to the following notes to the consolidated financial
• Note 19 – Contract cost and assets; recognition software upon adoption of IFRS 15. Further, we have instructed and ensured that component auditors have
statements:
• Note 39 – Significant accounting judgements and Further, we instructed and ensured that the component auditors of the performed consistent audit procedures as per above, as applicable.
• Note 3.3 – Summary of significant accounting policies;
estimates; and Group’s significant entities have performed consistent audit procedures • Note 35 – Contingent liabilities; and We assessed the completeness and appropriateness of the related
• Note 41 – Segment information. as per above, as applicable. We also assessed the overall presentation,
• Note 39 – Significant accounting judgments and disclosures in Notes 3.3, 33 and 37 of the consolidated financial
structure and content of revenue related disclosures in notes 3.3, 4,19,39
estimates. statements.
and 41 to the consolidated financial statements.
78 Ooredoo Annual Report 2018
79

Independent Auditor’s Report continued

Independent Auditor’s Report (continued) • Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
Other Information the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosure is
Management is responsible for the other information. The other information comprise Chairman’s Message, Group CEO’s Message,
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
Operational and Financial Highlights, Our Reach, Our Businesses, Corporate Governance Report, Financial Review, which we
report. However, future events or conditions may cause the Group to cease to continue as a going concern.
obtained prior to the date of this auditor’s report and the annual report, which is expected to be made available to us after that date.
The other information does not include the consolidated financial statements and our auditor’s report thereon. • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and
whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of presentation.
assurance or conclusion thereon. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in performance of the group audit. We remain solely responsible for our audit opinion.
doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
report in this regard. regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with From the matters communicated with those charged with governance, we determine those matters that were of most significance in
IFRS, applicable provisions of Qatar Commercial Companies Law and the Company’s Articles of Association and for such internal the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these
control as management determines is necessary to enable the preparation of consolidated financial statements that are free from matters in our auditor’s report unless law and regulations preclude public disclosure about the matter or when, in extremely rare
material misstatement, whether due to fraud or error. circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such communication.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Report on Other Legal and Regulatory Requirements
management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Further, as required by the Qatar Commercial Companies Law, we report the following:

Those charged with governance are responsible for overseeing the Group’s financial reporting process. • We are of the opinion that proper books of account were maintained by the Company, physical inventory verification has been
duly carried out and the contents of the director’s report are in agreement with the Company’s accompanying consolidated
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements financial statements.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from • We obtained all the information and explanations which we considered necessary for the purpose of our audit.
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable • To the best of our knowledge and belief and according to the information given to us, no contraventions of the applicable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect provisions of Qatar Commercial Companies Law and the Company’s Articles of Association were committed during the year
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually which would materially affect the Group’s consolidated financial position or its consolidated financial performance.
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout
the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risk, and obtain audit evidence that is sufficient and appropriate Doha – Qatar For Deloitte & Touche
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than the 13 February 2019 Qatar Branch
one resulting from error, as fraud may involve collusion, forgery, intentional omission, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
Midhat Salha
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
Partner
disclosures made by management.
License No. 257
QFMA Auditor License No. 120156
80 Ooredoo Annual Report 2018
81

Consolidated Statement of Profit or Loss Consolidated Statement of Comprehensive Income

For the year ended 31 December 2018 For the year ended 31 December 2018

Note 2018 2017 Note 2018 2017

(Restated) (Restated)
QR’000 QR’000 QR’000 QR’000
Revenue 4 29,926,724 32,645,949 Profit for the year 1,792,730 2,288,661
Operating expenses 5 (11,803,510) (12,016,723) Other comprehensive income
Selling, general and administrative expenses 6 (6,409,712) (6,943,601) Items that may be reclassified subsequently to profit or loss
Depreciation and amortisation 7 (8,000,497) (8,419,634) Effective portion of changes in fair value of cash flow hedges 25 142 81
Net finance costs 8 (1,732,802 (1,740,780) Share of other comprehensive income (loss) of associates and joint ventures 25 4,081 (6,585)
Impairment losses on goodwill, financial assets and other assets 12, 13, 15, 16, 22 (171,433) (4,772) Foreign currency translation differences 25 (1,712,009) (39,356)
Other income – net 9 469,340 152,235 Net changes in fair value of available-for-sale investments 25 - 66,119
Share of results in associates and joint ventures – net of tax 15 488,737 (45,641) Items that will not be reclassified subsequently to profit or loss
Royalties and fees 10 (489,156) (564,724) Net changes in fair value on investments in equity instruments designated as at FVTOCI 25 29,723 -
Profit before income tax 2,277,691 3,062,309 Net changes in fair value of employees’ benefit reserve 25 54,244 (23,046)
Income tax 18 (484,961) (773,648) Other comprehensive loss – net of tax (1,623,819) (2,787)
Profit for the year 1,792,730 2,288,661 Total comprehensive income for the year 168,911 2,285,874
Profit attributable to: Total comprehensive income attributable to:
Shareholders of the parent 1,565,065 1,897,311 Shareholders of the parent 128,412 1,963,132
Non-controlling interests 227,665 391,350 Non-controlling interests 40,499 322,742
1,792,730 2,288,661 168,911 2,285,874
Basic and diluted earnings per share
(Attributable to shareholders of the parent) (Expressed in QR. per share) 11 4.89 5.92

The attached notes 1 to 45 form part of these consolidated financial statements The attached notes 1 to 45 form part of these consolidated financial statements
82 Ooredoo Annual Report 2018
83

Consolidated Statement of Financial Position

As at 31 December 2018

Note 2018 2017 Note 2018 2017

(Restated) (Restated)
QR’000 QR’000 QR’000 QR’000

ASSETS LIABILITIES

Non-current assets Non-current liabilities

Property, plant and equipment 12 27,207,493 29,474,307 Loans and borrowings 27 27,479,441 32,611,650

Intangible assets and goodwill 13 26,656,686 28,804,983 Employees’ benefits 28 825,611 888,588

Investment property 14 52,802 60,930 Deferred tax liabilities 18 358,260 374,614

Investment in associates and joint ventures 15 2,146,946 2,119,041 Other non-current liabilities 29 2,197,505 1,959,775

Financial assets – equity instruments 16 947,237 812,933 Contract liabilities 31 14,121 -

Other non-current assets 17 858,994 701,831 Total non-current liabilities 30,874,938 35,834,627

Deferred tax asset 18 569,892 341,648 Current liabilities

Contract costs and assets 19 151,806 - Loans and borrowings 27 9,279,920 7,243,694

Total non-current assets 58,591,856 62,315,673 Trade and other payables 30 13,330,351 13,512,019

Current assets Deferred income 26 1,940,644 1,883,100

Inventories 20 643,061 679,623 Contract liabilities 31 145,132 -

Contract costs and assets 19 312,070 - Income tax payable 1,550,803 1,321,635

Trade and other receivables 21 8,233,543 7,912,601 26,246,850 23,960,448

Bank balances and cash 22 17,493,273 18,390,694 Liabilities held for sale - 76,300

26,681,947 26,982,918 Total current liabilities 26,246,850 24,036,748

Assets held for sale 25,672 157,894 TOTAL LIABILITIES 57,121,788 59,871,375

Total current assets 26,707,619 27,140,812 TOTAL EQUITY AND LIABILITIES 85,299,475 89,456,485

TOTAL ASSETS 85,299,475 89,456,485

EQUITY
Share capital 23 3,203,200 3,203,200
Legal reserve 24 (a) 12,434,282 12,434,282
Fair value reserve 24 (b) 606,299 522,873
Employees’ benefit reserve 24 (c) 22,031 (12,497)
Translation reserve 24 (d) (7,805,451) (6,298,501)
Other statutory reserves 24 (e) 1,252,304 1,202,508
Retained earnings 12,496,038 12,000,973
Equity attributable to shareholders of the parent 22,208,703 23,052,838
Non-controlling interests 5,968,984 6,532,272
TOTAL EQUITY 28,177,687 29,585,110

The attached notes 1 to 45 form part of these consolidated financial statements The attached notes 1 to 45 form part of these consolidated financial statements
 84
Consolidated Statement of Changes in Equity
For the year ended 31 December 2018

Attributable to shareholders of the Parent

Employees Other Non –
Share Legal Fair value benefit Translation statutory Retained controlling Total
capital reserve reserve reserve reserve reserves earnings Total interests equity
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000

At 1 January 2018 – (restated) (Note 44) 3,203,200 12,434,282 522,873 (12,497) (6,298,501) 1,202,508 12,000,973 23,052,838 6,532,272 29,585,110
Effect of change in accounting policy for:
Initial application of IFRS 15 - - - - - - 229,544 229,544 (4,004) 225,540
Initial application of IFRS 9 - - (120,818) - - - 99,835 (20,983) (17,320) (38,303)
Adjusted balance as at 1 January 2018* 3,203,200 12,434,282 402,055 (12,497) (6,298,501) 1,202,508 12,330,352 23,261,399 6,510,948 29,772,347
Profit for the year - - - - - - 1,565,065 1,565,065 227,665 1,792,730
Other comprehensive income (loss) - - 35,769 34,528 (1,506,950) - - (1,436,653) (187,166) (1,623,819)
Total comprehensive income (loss) for the year - - 35,769 34,528 (1,506,950) - 1,565,065 128,412 40,499 168,911
Realized loss on FVTOCI investment recycled to retained
- - 168,475 - - - (168,475) - - -
earnings
Transaction with shareholders of the parent, recognised
directly in equity
Dividend for 2017 (Note 32) - - - - - - (1,121,120) (1,121,120) - (1,121,120)
Transfer to other statutory reserves - - - - - 49,796 (49,796) - - -
Transaction with non-controlling interest, recognised
directly in equity
Change in subsidiary’s non-controlling interest - - - - - - (4,633) (4,633) 65,708 61,075
Loss of control of a subsidiary** - - - - - - - - (36,178) (36,178)
Change in holding interest of an associate*** - - - - - - (5,870) (5,870) - (5,870)

Change in associate’s non-controlling interest in its

- - - - - - 2,029 2,029 - 2,029
subsidiary

Dividends for 2017 - - - - - - - - (611,635) (611,635)

Transaction with non-owners of the
Group, recognised directly in equity
Transfer to employee association fund - - - - - - (1,889) (1,889) (358) (2,247)
Transfer to social and sports fund (Note 42) - - - - - - (49,625) (49,625) - (49,625)
At 31 December 2018 3,203,200 12,434,282 606,299 22,031 (7,805,451) 1,252,304 12,496,038 22,208,703 5,968,984 28,177,687

*The Group has initially applied IFRS 15 and IFRS 9 as at 1 January 2018. Under the transition method selected, the comparative information is not restated and cumulative catch-up adjustment is recorded in the opening balances.
** On 1 April 2018, the Group lost control in one of its subsidiaries and accordingly deconsolidated the subsidiary. The remaining share in investment is accounted for as an investment in an associate.
*** On 8 August 2018, the Group’s shareholding in one of its associate was diluted in accordance with shareholders’ agreement.

The attached notes 1 to 45 form part of these consolidated financial statements

Consolidated Statement of Changes in Equity

For the year ended 31 December 2018

Attributable to shareholders of the Parent

Employees’ Other Non –
Share Legal Fair value benefit Translation statutory Retained controlling Total
capital reserve reserve reserve reserve reserves earnings Total interests Equity
QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 QR’000

At 1 January 2017 3,203,200 12,434,282 462,600 2,482 (6,319,028) 1,152,553 11,247,966 22,184,055 6,817,056 29,001,111
Profit for the year (restated) - - - - - - 1,897,311 1,897,311 391,350 2,288,661
Other comprehensive income (loss) (restated) - - 60,273 (14,979) 20,527 - - 65,821 (68,608) (2,787)
Total comprehensive income (loss) for the year
- - 60,273 (14,979) 20,527 - 1,897,311 1,963,132 322,742 2,285,874
(resated)
Transactions with shareholders of the Parent,
recognised directly in equity
Dividend for 2016 (Note 32) - - - - - - (1,121,120) (1,121,120) - (1,121,120)
Transfer to other statutory reserves - - - - - 49,955 (49,955) - - -
Transactions with non-controlling interest,
recognised directly in equity

Change in non-controlling interest of a subsidiary (i) - - - - - - 69,226 69,226 25,129 94,355

Change in associate’s non-controlling interest of its

671 671 - 671
subsidiary - - - - - -
Dividend for 2016 - - - - - - - - (632,303) (632,303)
Transactions with non-owners of the Group,
recognised directly in equity
Transfer to social and sports fund (Note 42) - - - - - - (41,269) (41,269) - (41,269)
Transfer to employee association fund - - - - - - (1,857) (1,857) (352) (2,209)
At 31 December 2017 (restated) (Note 44) 3,203,200 12,434,282 522,873 (12,497) (6,298,501) 1,202,508 12,000,973 23,052,838 6,532,272 29,585,110

(i) One of the Group subsidiaries, Ooredoo Maldives, finalised an initial public offering (“IPO”) representing 9.5% shareholding on 20 July 2017. This resulted in total proceeds amounting to QR. 94.4 million and gain on disposal
amounting to QR. 69.2 million treated as an equity transaction.
Ooredoo Annual Report 2018
85

The attached notes 1 to 45 form part of these consolidated financial statements

86 Ooredoo Annual Report 2018
87

Consolidated Statement of Cash Flows

For the year ended 31 December 2018

Note 2018 2017 Note 2018 2017

(Restated) (Restated)
QR’000 QR’000 QR’000 QR’000
OPERATING ACTIVITIES INVESTING ACTIVITIES
Profit before income tax 2,277,691 3,062,309 Acquisition of property, plant and equipment (4,664,779) (3,801,347)
Adjustments for: Acquisition of intangible assets (1,332,085) (1,225,693)
Depreciation and amortization 8,000,497 8,419,634 Investment in an associate (21,519) (43,960)
Dividend income 9 (43,750) (28,424) Investment in joint ventures (550) (79,838)
Impairment losses on goodwill, financial assets and other assets 201,004 4,772 Additional investment in financial asset at FVTOCI (2017: available-for-sale
(18,221) (20,218)
investments)
Reversal of impairment of intangible assets - (8,265)
Proceeds from disposal of property, plant and equipment 159,539 117,121
Gain on disposal of investments at FVTPL 129 -
Proceeds from disposal of investments at FVTPL (2017: available-for-sale
Changes in fair value of FVTPL investments (30,554) - 43,310 3,277
investments)
Gain on loss of control of a subsidiary (235,969) - Movement in restricted deposits 51,649 (106,210)
Gain on disposal of available-for-sale investments - (1,295) Movement in short-term deposits 428,286 (318,229)
Gain on disposal of property, plant and equipment (42,783) (63,681) Movement in other non-current assets (155,079) (108,264)
Net finance cost 8 1,732,802 1,740,780 Dividend received 400,323 133,042
Provision for employees’ benefits 213,291 162,785 Interest received 360,624 351,144
Provision against doubtful debts 342,590 351,339 Net cash used in investing activities (4,748,502) (5,099,175)
Share of results in associates and joint ventures – net of tax 15 (488,737) 45,641 FINANCING ACTIVITIES (i)
Operating profit before working capital changes 11,926,211 13,685,595 Proceeds from rights issue of a subsidiary 56,956 -
Working capital changes: Proceeds from share issue of a subsidiary 4,119 -
Changes in inventories 36,562 (98,479) Proceeds from loans and borrowings 9,103,504 4,515,609
Changes in trade and other receivables (696,849) (633,037) Repayment of loans and borrowings (11,931,283) (5,361,342)
Changes in contract costs and assets (199,333) - Proceeds from IPO transaction - 94,355
Changes in trade and other payables (451,291) (684,033) Additions to deferred financing costs 26 (12,949) (8,076)
Changes in contract liabilities (9,959) - Dividend paid to shareholders of the parent 32 (1,121,120) (1,121,120)
Cash from operations 10,605,341 12,270,046 Dividend paid to non-controlling interests (611,635) (632,303)
Finance costs paid (2,007,548) (2,010,478) Movement in other non-current liabilities 295,994 (286,046)
Employees’ benefits paid 27 (236,098) (272,110) Net cash used in financing activities (4,216,414) (2,798,923)
Income tax paid (494,608) (560,566) NET CHANGE IN CASH AND CASH EQUIVALENTS (1,097,829) 1,528,794
Net cash from operating activities 7,867,087 9,426,892 Effect of exchange rate fluctuations 535,369 4,078
Cash and cash equivalents at 1 January 17,095,602 15,562,730
CASH AND CASH EQUIVALENTS AT 31 DECEMBER 22 16,533,142 17,095,602

Please refer to Note 22 for details of non-cash transactions.

(i) Refer to Note 45 for the reconciliation of liabilities arising from financing activities.

The attached notes 1 to 45 form part of these consolidated financial statements The attached notes 1 to 45 form part of these consolidated financial statements
88 Ooredoo Annual Report 2018
89

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018
Notes to the Consolidated Financial Statements (continued)

1. REPORTING ENTITY 3. SIGNIFICANT ACCOUNTING POLICIES

Qatar Public Telecommunications Corporation (the “Corporation”) was formed on 29 June 1987 domiciled in the State of Qatar by The consolidated financial statements comprise the financial statements of Ooredoo Q.P.S.C. and its subsidiaries (together referred
Law No. 13 of 1987 to provide domestic and international telecommunication services within the State of Qatar. The Company’s to as the “Group”). The accounting policies set out below have been applied consistently to all the periods presented (except as
registered office is located at 100 Westbay Tower, Doha, State of Qatar. mentioned otherwise) in these consolidated financial statements, and have been applied consistently by the Group entities, where
necessary, adjustments are made to the financial statements of the subsidiaries to bring their accounting policies in line with those
The Corporation was transformed into a Qatari Shareholding Company under the name of Qatar Telecom (Qtel) Q.S.C. (the used by the Group.
“Company”) on 25 November 1998, pursuant to Law No. 21 of 1998.
3.1 BASIS OF CONSOLIDATION
In June 2013, the legal name of the Company was changed to Ooredoo Q.S.C. This change had been duly approved by the The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company
shareholders at the Company’s extraordinary general assembly meeting held on 31 March 2013. (including structured entities) and its subsidiaries. Control is achieved when the Company:
• Has power over the investee;
The Company changed its legal name from Ooredoo Q.S.C. to Ooredoo Q.P.S.C. to comply with the provisions of the new Qatar
• Is exposed, or has rights, to variable returns from its involvement with the investee; and
Commercial Companies Law issued on 7 July 2015.
• Has the ability to use its power to affect returns.
The Company is a telecommunications service provider licensed by the Communications Regulatory Authority (CRA) (formerly The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
known as Supreme Council of Information and Communication Technology (ictQATAR)) to provide both fixed and mobile more of the three elements of control listed above.
telecommunications services in the state of Qatar. As a licensed service provider, the conduct and activities of the Company are
regulated by CRA pursuant to Law No. 34 of 2006 (Telecommunications Law) and the Applicable Regulatory Framework. When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting
rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers
The Company and its subsidiaries (together referred to as the “Group”) provides domestic and international telecommunication all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it
services in Qatar and elsewhere in the Asia and MENA region. Qatar Holding L.L.C. is the Parent Company of the Group. power, including:
• The Size Of The Company’s Holding Of Voting Rights Relative To The Size And Dispersion Of Holdings Of The Other Vote Holders;
In line with an amendment issued by Qatar Financial Markets Authority (“QFMA”), effective from May 2018, listed entities are
• Potential Voting Rights Held By The Company, Other Vote Holders Or Other Parties
required to comply with the Qatar Financial Markets Authority’s law and relevant legislations including Governance Code for
• Rights Arising From Contractual Arrangements; And
Companies & Legal Entities Listed on the Main Market (the “Governance Code”). The Group has taken appropriate steps to comply
• Any Additional Facts And Circumstances That Indicate That The Company Has, Or Does Not Have The Current Ability To Direct The
with the requirements of the Governance Code.
Relevant Activities At The Time That Decisions Need To Be Made, Including Voting Patterns At Previous Shareholders’ Meetings.
The consolidated financial statements of the Group for the year ended 31 December 2018 were authorised for issue in accordance
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses
with a resolution of the Board of Directors of the Company on 13 February 2019.
control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in
the consolidated statement of profit and loss and other comprehensive income from the date the Company gains control until the
2. BASIS OF PREPARATION
date when the Company ceases to control the subsidiary.
a) Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-
issued by the International Accounting Standards Board (IASB), applicable provisions of Qatar Commercial Companies Law and the controlling interests. Total comprehensive income of subsidiaries is attributable to the owners of the Company and to the non-
Company’s Articles of Association. controlling interests even if this results in the non-controlling interests having a deficit balance.

b) Basis of measurement When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with
The consolidated financial statements have been prepared on a historical cost basis except for the following: the Group’s accounting policies.

• Equity instruments, classified as Fair Value Through Other Comprehensive Income (“FVTOCI”) and Fair Value Through Profit and All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group
Loss (“FVPTL”), are measured at fair value (2017: Available-for-sale investments are measured at fair value); are eliminated in full on consolidation.
• Derivative financial instruments are measured at fair value; and
• Liabilities for cash-settled share-based payment arrangements are measured at FVTPL. a) Business combinations and goodwill
The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The
Historical cost is based on the fair value of the consideration, which is given in exchange for goods and services. The methods used
consideration transferred in the acquisition is measured at fair value, as are the identifiable net assets acquired, and any amount
to measure fair values are discussed further in note 37.
of any non-controlling interest in the acquiree. Any goodwill that arises is tested annually for impairment. Any gain on a bargain
purchase is recognised in consolidated statement of profit or loss immediately. Transaction costs are expensed as incurred, except if
c) Functional and presentation currency related to the issue of debt or equity securities.
These consolidated financial statements are presented in Qatari Riyals, which is the Company’s functional currency. All the financial
information presented in these consolidated financial statements has been rounded off to the nearest thousand (QR.’000) except The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
where otherwise indicated. generally recognised in profit or loss.

d) Use of estimates and judgments Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified
The preparation of consolidated financial statements in conformity with IFRSs requires management to make judgments, estimates as equity, then it is not remeasured and settlement is accounted for within equity. Contingent consideration classified as an asset or
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and liability that is a financial instrument and within scope of IFRS 9 Financial instruments, is measured at fair value with changes in fair
expenses. Actual results may differ from these estimates. value recognised in the consolidated statement of profit or loss in accordance with IFRS 9. Other contingent consideration that is not
within the scope of IFRS 9 is measured at FV at each reporting date with changes in fair value are recognised in profit or loss.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimates are revised and in any future periods affected. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized
for non-controlling interests and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the
fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group reassess whether we correctly
In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies
identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to
that have the most significant effect on the amounts recognised in the consolidated financial statements is included in note 39.
be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the
aggregate consideration transferred, then the gain is recognized in profit or loss.
90 Ooredoo Annual Report 2018
91

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.1 BASIS OF CONSOLIDATION (continued) 3.1 BASIS OF CONSOLIDATION (continued)
a) Business combinations and goodwill (continued) e) Interests in associates and joint ventures (continued)

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination For one of the Group’s joint ventures, the Group accounts for its share in the results, assets and liabilities of its joint venture, which
occurs, the Group report in our consolidated financial statements provisional amounts for the items for which the accounting is is an investment entity and applies fair value measurement to its subsidiaries, using equity method of accounting. Profits and losses
incomplete. During the measurement period, which is no longer than one year from the acquisition date, the provisional amounts resulting from upstream and downstream transactions between the Group (including its consolidated subsidiaries) and its associate
recognized at acquisition date are retrospectively adjusted to reflect new information obtained about facts and circumstances that or joint venture are recognised in the Group’s consolidated financial statements only to the extent of unrelated group’s interests in
existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. the associates or joint ventures.
During the measurement period, the Group also recognize additional assets or liabilities if new information is obtained about facts
and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and f) Transactions eliminated on consolidation
liabilities as of that date.
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated. Unrealised gains arising from transactions with associates and joint ventures are eliminated against the investment to
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment
the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to
testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of our cash-generating units,
the extent that there is no evidence of impairment.
or CGUs, that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to those units.
The subsidiaries of the Group, incorporated in the consolidated financial statements of Ooredoo Q.P.S.C. are as follows:
Where goodwill acquired in a business combination has yet to be allocated to identifiable CGUs because the initial accounting
Group effective
is incomplete, such provisional goodwill is not tested for impairment unless indicators of impairment exist and we can reliably
shareholding
allocate the carrying amount of goodwill to a CGU or group of CGUs that are expected to benefit from the synergies of the business
percentage
combination. Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss Country of
on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the disposed Name of subsidiary Principal activity incorporation 2018 2017
operation and the portion of the CGU retained. Ooredoo Investment Holding S.P.C. Investment company Bahrain 100% 100%

b) Non-controlling interests (“NCI”) Ooredoo International Investments L.L.C Investment company Qatar 100% 100%
NCI are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Changes in the Ooredoo Group L.L.C. Management service company Qatar 100% 100%
Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
Ooredoo South East Asia Holding S.P.C Investment company Bahrain 100% 100%
c) Subsidiaries West Bay Holding S.P.C. Investment company Bahrain 100% 100%
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable Ooredoo Asian Investments Pte. Ltd. Investment company Singapore 100% 100%
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial
Al Dafna Holding S.P.C. Investment company Bahrain 100% 100%
statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the
date on which control ceases. Al Khor Holding S.P.C. Investment company Bahrain 100% 100%
IP Holdings Limited Investment company Cayman Islands 100% 100%
d) Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and Ooredoo Myanmar Tower Holding Co. Investment company Cayman Islands 100% 100%
other components of equity. Any resulting gain or loss is recognised in consolidated statement of profit or loss. Any interest retained wi-tribe Asia Limited Investment company Cayman Islands 100% 100%
in the former subsidiary is measured at fair value when control is lost.
Ooredoo Asia Pte. Ltd. Investment company Singapore 100% 100%
e) Interests in associates and joint ventures Ooredoo International Finance Limited Investment company Bermuda 100% 100%
Associates are those entities in which the Group has significant influence, but not control or joint control. Significant influence is the MENA Investcom S.P.C. Investment company Bahrain 100% 100%
power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
Omani Qatari Telecommunications Company
Telecommunication company Oman 55.0% 55.0%
S.A.O.G. (“Ooredoo Oman”)
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have 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 Starlink W.L.L. Telecommunication company Qatar 72.5% 72.5%
about the relevant activities require unanimous consent of the parties sharing control. National Mobile Telecommunications
Telecommunication company Kuwait 92.1% 92.1%
Company K.S.C.P (“Ooredoo Kuwait”)
Interests in associates and joint ventures are accounted for using the equity method. They are recognised initially at cost, which
includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of Wataniya International FZ – L.L.C. Investment company United Arab Emirates 92.1% 92.1%
the profit or loss and other comprehensive income of associates and joint ventures less any impairment in the value of individual Al-Bahar United Company W.L.L. (“Phono”)  Telecommunication company Kuwait 92.1% 92.1%
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 on their behalf. The carrying values of investments in associates and joint ventures Al Wataniya Gulf Telecommunications Holding
Investment company Bahrain 92.1% 92.1%
are reviewed on a regular basis and if an impairment in the value has occurred, it is written off in the period in which those Company S.P.C.
circumstances are identified. Ooredoo Maldives PLC Telecommunication company Maldives 83.3% 83.3%
WARF Telecom International Pvt. Ltd. Telecommunication company Maldives 59.9% 59.9%
Any excess of the cost of acquisition over the Group’s share of the fair values of the identifiable net assets of the associates and joint
ventures at the date of acquisition is recognised as goodwill and included as part of the cost of investment. Any deficiency of the cost Wataniya Telecom Algerie S.P.A. (”Ooredoo
Telecommunication company Algeria 74.4% 74.4%
of acquisition below the Group’s share of the fair values of the identifiable net assets of the associates and joint ventures at the date Algeria”)
of acquisition is credited to the consolidated statement of profit or loss in the year of acquisition. Ooredoo Consortium Ltd. Investment company Malta 92.1% 92.1%
The Group’s share of associates’ and joint ventures’ results is based on the most recent financial statements or interim financial Duqm Data Centre SAOC (iv) Telecommunication company Oman 33.0% 28.1%
statements drawn up to the Group’s reporting date.
92 Ooredoo Annual Report 2018
93

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.1 BASIS OF CONSOLIDATION (continued) 3.1 BASIS OF CONSOLIDATION (continued)
f) Transactions eliminated on consolidation (continued) f) Transactions eliminated on consolidation (continued)

Group effective
shareholding (i) The Group holds 45.4% (2017: 44.6%) of Ooredoo Palestine and has established control over the entity as it can demonstrate power through its
percentage indirect ownership of National Mobile Telecommunications Company K.S.C.P (“NMTC”) by virtue of NMTC having more than 51% of the voting
interests in Wataniya Palestine Mobile Telecommunications Public Shareholding Company (“Ooredoo Palestine”). This exposes and establishes
Country of
Name of subsidiary Principal activity incorporation 2018 2017 rights of the Group to variable returns and gives ability to affect those returns through its power over Ooredoo Palestine. Wataniya Palestine
was rebranded to Ooredoo Palestine in 2018 (although the legal name remains Wataniya Palestine).
Ooredoo Tunisia Holdings Ltd. Investment company Malta 92.1% 92.1%
(ii) The Group incorporated Raywood Inc (“Raywood”), a special purpose entity registered in Cayman Islands with 100% (2017: 100%) voting interest
Ooredoo Malta Holdings Ltd. Investment company Malta 100% 100% held by the Group to carry out investment activities in Iraq. Raywood acquired 49% voting interest of Midya Telecom Company Limited (“Fanoos”)
Ooredoo Tunisie S.A. Telecommunication company Tunisia 84.1% 84.1% in Iraq. Although the Group holds less than a majority of the voting rights of Fanoos, the Group can still demonstrate its power by virtue of
shareholders’ agreement entered into between Raywood and Fanoos, Iraq. This arrangement exposes the Group to variable returns and gives
Wataniya Palestine Mobile the ability to affect those returns over Fanoos.
Telecommunications Public Shareholding Telecommunication company Palestine 45.4% 44.6%
(iii) The Group has the power, indirectly through PT Indosat Tbk (“Indosat Ooredoo”) by virtue of Indosat Ooredoo having control over these
Company (“Ooredoo Palestine”) (i)
companies. This exposes the Group to variable returns from their investment and gives ability to affect those returns through its power over
Raywood Inc. Investment company Cayman Islands 100% 100% them. Hence, these companies have been considered as subsidiaries of the Group.
Newood Inc. Investment company Cayman Islands 100% 100% (iv) The Group has the power, indirectly through Omani Qatari Telecommunications Company S.A.O.G. (“Ooredoo Oman”) by virtue of Ooredoo
Midya Telecom Company Limited (“Fanoos”) (ii) Telecommunication company Iraq 49.0% 49.0% Oman having more than 51% of the voting interest or control in this company, to which exposes the Group to variable return from its investment
and gives ability to affect those returns through its power over them, hence, this company has been considered as a subsidiary of the Group.
Al-Rowad General Services Limited Investment company Iraq 100% 100%
Asiacell Communications PJSC Telecommunication company Iraq 64.1% 64.1% 3.2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs)
wi-tribe Limited Investment company Cayman Islands 86.1% 86.1% 3.2.1 New and amended IFRSs that are effective for the current year
Barzan Holding S.P.C. Investment company Bahrain 100% 100%
The following new and revised IFRSs, which became effective for annual periods beginning on or after January 2018, have been
Laffan Holding S.P.C. Investment company Bahrain 100% 100%
adopted in these consolidated financial statements.
Zekreet Holding S.P.C. Investment company Bahrain 100% 100%
The Group applies, for the first time, IFRS 9 Financial Instruments (as revised in July 2014) and IFRS 15 Revenue from contracts
Ooredoo Myanmar Ltd. Telecommunication company Myanmar 100% 100%
with customers ) and the related consequential amendments to other IFRS Standards that are effective for an annual period that
Al Wokaer Holding S.P.C. Investment company Bahrain 100% 100% begins on or after 1 January 2018. The impact of the initial application of these standards are disclosed in the changes in accounting
Al Wakrah Holding S.P.C. Investment company Bahrain 100% 100% policies paragraph below.

Ooredoo Tamweel Ltd. Investment company Cayman Islands 100% 100% Due to the transition methods chosen by the Group in applying these standards, comparative information throughout these
Ooredoo IP L.L.C. Management service company Qatar 100% 100% consolidated financial statements have not been restated to reflect the requirements of the new standards.
Ooredoo Global Services FZ-L.L.C Management service company United Arab Emirates 100% 100%
Impact of initial application of IFRS 9 Financial Instruments
Ooredoo Global Services L.L.C Management service company Qatar 100% 100%
Seyoula International Investments W.L.L Investment company Qatar 100% 100% In the current year, the Group has applied IFRS 9 Financial Instruments (as revised in July 2014) and the related consequential
amendments to other IFRS Standards that are mandatorily effective for an accounting period that begins on or after 1 January
Fast Telecommunications Company W.L.L. Telecommunication company Kuwait 92.1% 92.1% 2018. Transition provisions of IFRS 9 allow an entity not to restate comparatives.
Ooredoo Myanmar Fintech Limited Telecommunication company Myanmar 100% 100%
Additionally, the Group adopted consequential amendments to IFRS 7 Financial Instruments: Disclosures that were applied to the
OIH Investment L.L.C. Investment company Qatar 100% 100% disclosures about 2018 and to the comparative period.
Al Wokaer East L.L.C. Investment company Qatar 100% 100%
Details of these IFRS 9 new requirements as well as their impact on the Group’s consolidated financial statements are described
Barzan East L.L.C. Investment company Qatar 100% 100%
below.
Mena Investcom L.L.C. Investment company Qatar 100% 100%
Al Wakra East L.L.C. Investment company Qatar 100% 100% The Group has applied IFRS 9 in accordance with the transition provisions set out in IFRS 9.

OSEA Investment L.L.C. Investment company Qatar 100% 100% (a) Classification and measurement of financial assets
PT. Indosat Tbk (“Indosat Ooredoo”) Telecommunication company Indonesia 65.0% 65.0% The date of initial application (i.e., the date on which the Group has assessed its existing financial assets and financial liabilities
Indosat Singapore Pte. Ltd. Management service company Singapore 65.0% 65.0% in terms of the requirements of IFRS 9) is 1 January 2018. Accordingly, the Group has applied the requirements of IFRS 9 to
instruments that continue to be recognised as at 1 January 2018 and has not applied the requirements to instruments that have
PT Indosat Mega Media Telecommunication company Indonesia 64.9% 64.9% already been derecognised as at 1 January 2018.
PT Starone Mitra Telekomunikasi Telecommunication company Indonesia 65.0% 65.0%
All recognised financial assets that are within the scope of IFRS 9 are required to be measured subsequently at amortised cost or
PT Aplikanusa Lintasarta (iii) Telecommunication company Indonesia 47.0% 47.0% fair value on the basis of the Group’s business model for managing the financial assets and the contractual cash flow characteristics
PT Artajasa Pembayaran Elektronis (iii) Telecommunication company Indonesia - 25.9% of the financial assets.
PT Lintas Media Danawa (iii) Investment company Indonesia 32.9% 32.9%
PT Interactive Vision Media Telecommunication company Indonesia 64.9% 64.9%
PT Portal Bursa Digital (iii) Investment company Indonesia 40.3% 40.3%
94 Ooredoo Annual Report 2018
95

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (continued) 3.2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (continued)
3.2.1 New and amended IFRSs that are effective for the current year (continued) 3.2.1 New and amended IFRSs that are effective for the current year (continued)
(a) Classification and measurement of financial assets (continued) (d) Disclosures in relation to the initial application of IFRS 9 (continued)
Retained Fair value
The directors of the Group reviewed and assessed the Group’s existing financial assets as at 1 January 2018 based on the facts and earnings NCI reserve
circumstances that existed at that date and concluded that the initial application of IFRS 9 has had the following impact on the Particulars QR.’000 QR.’000 QR.’000
Group’s financial assets as regards their classification and measurement: Closing balance as at 31 December 2017 12,000,973 6,532,272 522,873
Impact on reclassification and re-measurements
• Financial assets classified as loans and receivables under ias 39 that were measured at amortised cost continue to be measured
at amortised cost under ifrs 9 as they are held within a business model to collect contractual cash flows and these cash flows 1. Investment securities (equity) from available-for-sale to those
consist solely of payments of principal and interest on the principal amount outstanding; measured at fair value through other comprehensive income 127,119 (1,957) (123,233)
• At the date of initial application equity investments that the group intends to hold for the long term strategic purposes (“FVTOCI”)
are designated at fvtoci. The accumulated fair value reserve related to these investments will never be reclassified to the
2. Investment securities (equity) from available-for-sale to those
consolidated statement of profit or loss; and 29,087 16,961 2,415
measured at fair value through profit or loss (“FVTPL”)
• Financial assets are measured at fvtpl if they are not held within either a business model whose objective is to hold assets to
collect contractual cash flows or within a business model whose objective is achieved by both collecting contractual cash flows Impact on recognition of Expected Credit Losses
and selling financial assets.
1. Trade and other receivables (48,542) (32,540) -
The Group has elected not to restate comparative figures but any adjustments to the carrying amounts of financial assets and liabilities 2. Bank balance and cash (10,168) (204) -
at transition date were recognized in the opening balances of retained earnings, fair value reserve and non-controlling interest.
3. Related tax impact 2,339 420 -
Note (d) below tabulates the change in classification and the related adjustments arising from such reclassifications and IFRS 9 transition impact 99,835 (17,320) (120,818)
remeasurements of the Group’s financial assets upon application of IFRS 9.
Balance as at 1 January 2018 (after IFRS 9 adjustment) 12,100,808 6,514,952 402,055
(b) Impairment of financial assets
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model as opposed to an incurred credit loss
model under IAS 39. The expected credit loss model requires the Group to account for expected credit losses and changes in those
Original Additional New
expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. In other carrying loss allowance carrying
words, it is no longer necessary for a credit event to have occurred before credit losses are recognised. amount Retained amount
Original New under earning effect under
Specifically, IFRS 9 requires the Group to recognise a loss allowance for expected credit losses on: classification classification IAS 39 Remeasurements as at 1 January IFRS 9
under IAS 39 under IFRS 9 QR.’000 Reclassifications other than ECL 2018 QR.’000
1. Trade and other receivables;
2. Bank balances and cash; Financial assets
3. Contract costs and assets; and
4. Financial guarantee contracts to which the impairment requirements of IFRS 9 apply. Equity Available for
FVTOCI 812,933 (19,821) 1,929 - 795,041
securities sale
In particular, IFRS 9 requires the Group to measure the loss allowance for a financial instrument at an amount equal to the lifetime Equity Available for
expected credit losses (ECL) if the credit risk on that financial instrument has increased significantly since initial recognition, or FVTPL - 19,821 48,463 - 68,284
securities sale
if the financial instrument is a purchased or originated credit‑impaired financial asset. However, if the credit risk on a financial
instrument has not increased significantly since initial recognition (except for a purchased or originated credit‑impaired financial Trade
Loans and Amortised
asset), the Group is required to measure the loss allowance for that financial instrument at an amount equal to 12‑months ECL. IFRS and other 7,912,601 - - (81,082) 7,831,519
receivables cost
9 also requires a simplified approach for measuring the loss allowance at an amount equal to lifetime ECL for trade receivables and receivables
contract assets in certain circumstances.
Bank balances Loans and Amortised
18,390,694 - - (10,372) 18,380,322
and cash receivables cost
The consequential amendments to IFRS 7 have also resulted in more extensive disclosures about the Group’s exposure to credit risk
in the consolidated financial statements. Refer to note 36.
The Group has elected not to restate comparatives, for the purpose of assessing whether there has been a significant increase in
(c) Classification and measurement of financial liabilities credit risk since initial recognition of financial instruments that remain recognised on the date of initial application of IFRS 9 (i.e. 1
The application of IFRS 9 had no material impact on the classification and measurement of the Group’s financial liabilities. January 2018).

(d) Disclosures in relation to the initial application of IFRS 9 The result of the assessment is as follows:
The table below illustrates the classification and measurement and the related adjustments of financial assets and financial liabilities
under IFRS 9 at the date of initial application, 1 January 2018. • Trade and other receivables – The Group applies the simplified approach and recognises lifetime ECL for these financial assets.
The cumulative additional loss allowance recognised on 1 January 2018 amounted to QR. 81,082 thousand.
• Bank balances and cash – All bank balances are assessed to have low credit risk at the reporting date as they are held with
reputable international banking institutions. The cumulative additional loss allowance recognised on 1 January 2018 amounted
to QR. 10,372 thousand.
• Financial guarantee contracts – There has been no significant increase in the risk of default on the underlying loans since initial
recognition up to 1 January 2018.
96 Ooredoo Annual Report 2018
97

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (continued) 3.2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (continued)
3.2.1 New and amended IFRSs that are effective for the current year (continued) 3.2.1 New and amended IFRSs that are effective for the current year (continued)
Impact of application of IFRS 15, Revenue from Contracts with Customers (continued)
Impact of application of IFRS 15, Revenue from Contracts with Customers
The Group has disclosed below the impact of changes to the line items in consolidated statement of financial position as at 31
In the current year, the Group has applied IFRS 15 Revenue from Contracts with Customers (as amended in April 2016) which is December 2018, without adoption of IFRS 15:
effective for an annual period that begins on or after 1 January 2018. IFRS 15 introduced a 5‑step approach to revenue recognition.
Details of the new requirements as well as their impact on the Group’s consolidated financial statements are described below. Impact on the consolidated statement of financial position
As at 31 December 2018
The Group has applied IFRS 15 using cumulative effect method on initial application of this standard as permitted by IFRS 15.C3(b).
Under this transition method, the Group elected to apply IFRS 15 retrospectively only to contracts that are not completed as at 1 Amounts
January 2018. The Group has used the practical expedients for modified contracts in IFRS 15.C5(c). without
adoption of
IFRS 15 uses the terms ‘contract asset’ and ‘contract liability’ to describe what might more commonly be known as ‘accrued revenue’ As reported Adjustments IFRS 15
and ‘deferred revenue’, however the Standard does not prohibit an entity from using alternative descriptions in the consolidated QR.’000 QR.’000 QR.’000
statement of financial position. The Group has adopted the terminology used in IFRS 15 to describe such balances, except for
deferred income. ASSETS
Investment in associates and joint ventures 2,146,946 (93,120) 2,053,826
The Group’s accounting policies for its revenue streams are disclosed in detail in Note 3.3.
Deferred tax assets 569,892 11,065 580,957
Impact of cumulative catch up adjustment in opening retained earnings and NCI:
Contract cost and assets – non-current 151,806 (151,806) -
Inventories 643,061 18,016 661,077
Retained
earnings NCI Contract cost and assets – current 312,070 (312,070) -
Particulars QR.’000 QR.’000
Trade and other receivables 8,233,543 (5,346) 8,228,197
Retained earnings at 1 January 2018 (after IFRS 9 impact) 12,100,808 6,514,952
LIABILITIES
Impact on revenue recognition
Deferred tax liabilities 358,260 75 358,335
1. Transit services 408,149 -
Contract liabilities – non-current 14,121 (14,121) -
2. Customer loyalty programme (70,497) (195)
Deferred income 1,940,644 (56,524) 1,884,120
3. Handset sales impact 1,519 303
Trade and other payables 13,330,351 (5,161) 13,325,190
4. Connection fees 11,988 (2,871)
Contract liabilities – current 145,132 (145,132) -
5. Multi element arrangements 77,562 13,444
Income tax payable 1,550,803 (232) 1,550,571
6. Subscription fees, Voice, SMS & Data (97,724) (54,607)
EQUITY
7. Other revenue streams recognised over the period (461) (26)
Translation reserve (7,805,451) 22,372 (7,783,079)
8. Associate transition impact* 93,120 -
Retained earnings 12,496,038 (295,395) 12,200,643
9. Upfront commission (222,406) (99,595)
Non-controlling interests 5,968,984 (39,143) 5,929,841
201,250 (143,547)
The Group has disclosed below the impact of changes to the line items in the consolidated statement of profit or loss for the year
Impact on cost recognition
ended 31 December 2018, without adoption of IFRS 15.
1. Transit service cost 408,149 -
2. Installation cost and commission to third party dealers (123,381) (30,817) Impact on the consolidated statement of profit or loss
For the year ended 31 December 2018
3. Customer loyalty programme (103,132) (5,369)
Amounts
4. Handset cost impact 1,461 291 without
5. Other cost recognised over period 15,232 6,706 adoption of
As reported Adjustments IFRS 15
6. Royalties and fees on net impact 7,407 319 QR.’000 QR.’000 QR.’000
7. Related tax impact (12,042) (11,303) Continuing operations
8. Net finance cost 418 225 Revenue 29,926,724 (18,121) 29,908,603
Upfront commission (222,406) (99,595) Operating expense (11,803,510) 263,634 (11,539,876)
(28,294) (139,543) Selling, general and administrative expenses (6,409,712) (400,443) (6,810,155)
IFRS 15 transition impact 229,544 (4,004) Depreciation and amortisation (8,000,497) (281) (8,000,778)
Balance as at 1 January 2018 (after IFRS 9 and IFRS 15 adjustment) 12,230,352 6,510,948 Other income – net 469,340 2,613 471,953
Royalties and fees (489,156) (1,091) (490,247)
*This refers to the share in transition impact of the Group’s investment in an associate upon initial application of IFRS 15. Income tax expense (484,961) 46,266 (438,695)
98 Ooredoo Annual Report 2018
99

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (continued) 3.2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (continued)
3.2.1 New and amended IFRSs that are effective for the current year (continued) 3.2.2 New and revised IFRSs applied with no material effect on the consolidated financial statements (continued)
Impact of application of IFRS 15, Revenue from Contracts with Customers (continued) Effective for
annual periods
The following table provides information on the initial application of IFRS 15 related to trade and other receivables, contract costs New and revised IFRSs beginning on or after
and assets and contract liabilities from contract with customers upon transition to IFRS 15. Amendments to IAS 40 Investment Property: Amends paragraph 57 to state that an entity shall 1 January 2018
IFRS 15 transfer a property to, or from, investment property when, and only when, there is evidence of
31 December Transition 1 January a change in use. A change of use occurs if property meets, or ceases to meet, the definition of
2017 Impact 2018 investment property. A change in management’s intentions for the use of a property by itself
QR.’000 QR.’000 QR.’000 does not constitute evidence of a change in use. The paragraph has been amended to state that
the list of examples therein is non-exhaustive.
Trade and other receivables 7,912,601 (381) 7,912,220
IFRS 16 Leases 1 January 2019
Contract costs and assets - 378,702 378,702
General impact of application of IFRS 16 Leases
Contract liabilities - 75,934 75,934
IFRS 16 provides a comprehensive model for the identification of lease arrangements and their
treatment in the financial statements for both lessors and lessees.  IFRS 16 will supersede the
The Group has elected to apply the practical expedient on contract modification. The practical expedient for contract modification current lease guidance including IAS 17 Leases and the related Interpretations when it becomes
in IFRS 15 allows to calculate revenue on prorate basis from the date of initial activation to expiry date of contracts which were effective for accounting periods beginning on or after 1 January 2019.
extended in 2017 and are not completed or expired as at 1 January 2018.
The following are the main areas impacting the Group on initial application of IFRS 16:
Applying the practical expedient for all contract modifications that occur before 1 January 2018, the remaining unearned revenue
pertaining to the open performance obligations are adjusted to the deferred revenue, retained earnings and deferred tax.
3.2.3 New and revised IFRSs in issue but not yet effective and not early adopted
The cumulative effect of the changes made to the consolidated statement of financial position from adoption of IFRS 15 is as follows:
The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective:

Effective for
31 December 1 January annual periods
2017 Adjustments 2018 New and revised IFRSs beginning on or after
QR.’000 QR.’000 QR.’000
Impact of the new definition of lease 1 January 2019
Deferred income 1,883,100 161,874 2,044,974
The Group will make use of the practical expedient available on transition to IFRS 16 not to
Deferred tax 341,648 40,469 382,117 reassess whether the existing contracts contains lease. Accordingly, the definition of a lease in
accordance with IAS 17 and IFRIC 4 will continue to apply to those leases entered or modified
Retained earnings 12,000,973 (121,405) 11,879,568 before 1 January 2019.

The Group will apply the definition of a lease and related guidance set out in IFRS 16 to all lease
3.2.2 New and revised IFRSs applied with no material effect on the consolidated financial statements
contracts entered into or modified on or after 1 January 2019 (whether it is a lessor or a lessee in
The following new and revised IFRSs, which became effective for annual periods beginning on or after 1 January 2018, have been the lease contract).
adopted in these consolidated financial statements. The application of these revised IFRSs has not had any material impact on the
amounts reported for the current and prior years but may affect the accounting for future transactions or arrangements. Impact on Lessee Accounting

Operating leases
Effective for IFRS 16 will change how the Group accounts for leases previously classified as operating leases
annual periods under IAS 17, as off‑balance sheet items.
New and revised IFRSs beginning on or after
On initial application of IFRS 16, for all leases the Group will:
Annual Improvements to IFRS Standards 2014 – 2016 Cycle amending IFRS 1 and IAS 28 1 January 2018 a. Recognise right‑of‑use assets and lease liabilities in the consolidated statement of financial
position, mainly arising due to:
Amendments to IFRS 4 Insurance Contracts: Relating to the different effective dates of IFRS 9 and 1 January 2018
• GSM Towers
the forthcoming new insurance contracts standard. • Office and shop space
IFRIC 22 Foreign Currency Transactions and Advance Consideration 1 January 2018 b. Estimate the incremental borrowing rate and use it to determine the present value of the
The interpretation addresses foreign currency transactions or parts of transactions where: future lease payments.
c. Recognise depreciation of right‑of‑use assets and interest on lease liabilities in the
• There is consideration that is denominated or priced in a foreign currency; consolidated statement of profit or loss; and
• The entity recognises a prepayment asset or a deferred income liability in respect of that d. Separate the total amount of cash paid into a principal portion (presented within financing
consideration, in advance of the recognition of the related asset, expense or income; and activities) and interest expense (presented within operating activities) in the consolidated
• The prepayment asset or deferred income liability is non-monetary. statement of cash flow.
Amendments to IFRS 2 Share Based Payment regarding classification and measurement of share 1 January 2018 For short-term leases and leases of low-value assets, the Group will opt to recognise a lease
based payment transactions. expense on a straight-line basis as permitted by IFRS 16.

The Group plans to apply modified retrospective approach upon adoption of IFRS 16.

In preparation for the first time application of IFRS 16, the Group has carried out an
implementation project. The impact of applying the Standard is still under final assessment;
however based on management’s initial assessment, the Group expects to have a major impact
on initial application of IFRS 16 on the Group’s consolidated financial statements.
100 Ooredoo Annual Report 2018
101

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (continued) 3.2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (continued)
3.2.3 New and revised IFRSs in issue but not yet effective and not early adopted (continued) 3.2.3 New and revised IFRSs in issue but not yet effective and not early adopted (continued)
Effective for Effective for
annual periods annual periods
New and revised IFRSs beginning on or after New and revised IFRSs beginning on or after
IFRS 17 Insurance Contracts 1 January 2021 Amendments to IAS 19 Employee Benefits Plan Amendment, Curtailment or Settlement 1 January 2019

IFRS 17 requires insurance liabilities to be measured at a current fulfilment value and provides
a more uniform measurement and presentation approach for all insurance contracts. These Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates Effective date deferred
requirements are designed to achieve the goal of a consistent, principle-based accounting for and Joint Ventures (2011) relating to the treatment of the sale or contribution of assets from and indefinitely. Adoption is still
insurance contracts. IFRS 17 supersedes IFRS 4 Insurance Contracts as at 1 January 2021. investor to its associate or joint venture. permitted.

Amendments to IFRS 9 Prepayment Features with Negative Compensation 1 January 2019 IFRIC 23 Uncertainty over Income Tax Treatments 1 January 2019

The amendments to IFRS 9 clarify that for the purpose of assessing whether a prepayment The interpretation addresses the determination of taxable profit (tax loss), tax bases, unused tax
feature meets the SPPI condition, the party exercising the option may pay or receive reasonable losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments
compensation for the prepayment irrespective of the reason for prepayment. In other words, under IAS 12. It specifically considers:
prepayment features with negative compensation do not automatically fail SPPI.
• Whether tax treatments should be considered collectively;
The amendment applies to annual periods beginning on or after 1 January 2019, with earlier • Assumptions for taxation authorities’ examinations;
application permitted. There are specific transition provisions depending on when the • The determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax
amendments are first applied, relative to the initial application of IFRS 9. credits and tax rates; and
• The effect of changes in facts and circumstances.
Management of the Group do not anticipate that the application of the amendments in the
future will have an impact on the Group’s consolidated financial statements. Management anticipates that these new standards, interpretations and amendments will be adopted in the Group’s consolidated
financial statements as and when they are applicable and adoption of these new standards, interpretations and amendments, except
Amendments to IAS 28 Investment in Associates and Joint Ventures: Relating to long-term interests 1 January 2019 for IFRS 16 as highlighted in previous paragraphs, may have no material impact on the consolidated financial statements of the
in associates and joint ventures. These amendments clarify that an entity applies IFRS 9 Financial Group in the period of initial application.
Instruments to long-term interests in an associate or joint venture that form part of the net
investment in the associate or joint venture but to which the equity method is not applied. 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Annual Improvements to IFRSs 2015-2017 Cycle Amendments to IFRS 3 Business Combinations, IFRS 1 January 2019
11 Joint Arrangements, IAS 12 Income Taxes and IAS 23 Borrowing Costs Revenue
Upon adoption of IFRS 15 – applicable from 1 January 2018
The Annual Improvements include amendments to four Standards. Revenue is measured at an amount that reflects the considerations, to which an entity expects to be entitled in exchange for
transferring goods or services to customer, excluding amounts collected on behalf of third parties. Revenue is adjusted for expected
IAS 12 Income Taxes discounts and volume discounts, which are estimated based on the historical data or forecast and projections. The Group recognizes
The amendments clarify that an entity should recognise the income tax consequences of revenue when it transfers control over goods or services to its customers.
dividends in profit or loss, other comprehensive income or equity according to where the entity
originally recognised the transactions that generated the distributable profits. This is the case Revenue from telecommunication services mainly consists of access charges, airtime usage, messaging, interconnect fees, data and
irrespective of whether different tax rates apply to distributed and undistributed profits. connectivity services, connection fees and other related services. Services are offered separately or as bundled packages along with
other services and/or devices.
IAS 23 Borrowing Costs 1 January 2019
The amendments clarify that if any specific borrowing remains outstanding after the related For bundle packages, the Group accounts for individual products and services separately if they are distinct i.e. if a product or
asset is ready for its intended use or sale, that borrowing becomes part of the funds that an service is separately identifiable from other items in the bundled package and if a customer can benefit from it. The consideration is
entity borrows generally when calculating the capitalisation rate on general borrowings. allocated between separate product and services (i.e. distinct performance obligations, “PO”) in a bundle based on their stand-alone
selling prices.
IFRS 3 Business Combinations
The amendments to IFRS 3 clarify that when an entity obtains control of a business that is a joint The stand-alone selling prices are determined based on the observable price at which the Group sells the products and services on
operation, the entity applies the requirements for a business combination achieved in stages, a standalone basis. For items that are not sold separately (e.g. customer loyalty program) the Group estimates standalone selling
including re-measuring its previously held interest (PHI) in the joint operation at fair value. prices using other methods (i.e. adjusted market assessment approach, cost plus margin approach or residual approach).
The PHI to be re-measured includes any unrecognised assets, liabilities and goodwill relating to
the joint operation. The Group principally obtains revenue from following key segments:

IFRS 11 Joint Arrangements Mobile services

The amendments to IFRS 11 clarify that when a party that participates in, but does not have joint Mobile service contracts typically consist of specific allowances for airtime usage, messaging and data, and connection fees. In this
control of, a joint operation that is a business obtains joint control of such a joint operation, the type of arrangement, the customer simultaneously receives and consumes the benefits as the Group performs the service. Thus, the
entity does not re-measure its PHI in the joint operation. revenue is recognized over the period as and when these services are provided.

All the amendments are effective for annual periods beginning on or after 1 January 2019 and Fixed services
generally require prospective application. Earlier application is permitted. The Group offers fixed services which normally include installation and configuration services, internet connectivity, television and
telephony services. These services are bundled with locked or unlocked equipment, such as router and/or set-top box. Similar to
Management of the Group do not anticipate that the application of the amendments in the mobile service contracts, fixed service revenue with locked equipment are recognized over the contract period, whereas revenue
future will have an impact on the Group’s consolidated financial statements. recognition for unlocked equipment is upon transfer of control to the customer.
102 Ooredoo Annual Report 2018
103

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue (continued) Revenue (continued)
Upon adoption of IFRS 15 – applicable from 1 January 2018 (continued) Upon adoption of IFRS 15 – applicable from 1 January 2018 (continued)

Sale of unlocked devices Significant financing component

Devices such as smart phones, tablets, Mi-Fis that are sold separately and are not bundled with mobile/fixed service contracts have The Group has decided to recognize interest expense at appropriate annual interest rate over the contract period and total
standalone value to the customer and are unlocked devices. The revenue from sale of unlocked devices is recognized upon transfer transaction price including financing component is recognized when equipment is delivered to customer.
of control to the customer.
Contract assets and liabilities
Interconnection service The Group has determined that contract assets and liabilities are to be recognised at the performance obligation level and not at the
Revenue from the interconnection of voice and data traffic with other telecommunications operators is recognised at the time of contract level and both contract assets and liabilities are to be presented separately in the consolidated financial statements. The
transit across our network. Group classifies its contract assets and liabilities as current and non-current based on the timing and pattern of flow of economic
benefits.
Revenue from transit services
The Group has concluded that it is acting as principal on these arrangements and hence revenue is accounted on gross basis. This Discounts and promotions
change has resulted in an increase in transit revenue and cost. The Group provides various discounts and promotions to its customers, which may be agreed at inception or provided during the
contract term. The impact and accounting of these discounts and promotions vary under IFRS 15 which may result in recognition of
Customer loyalty schemes contract asset.
The Group has concluded that it is acting as an agent on customer loyalty scheme arrangements which are redeemed through
its partners hence revenue is accounted on net basis. These changes have resulted in decrease in revenue and cost from loyalty Contract modification
schemes. The Group has applied IFRS 15 using modified retrospective approach using practical expedient in paragraph C5(c) of IFRS 15, under
which, for contracts that were modified before 1 January 2018, the Group need not to retrospectively restate the contract for those
The Group concluded that under IFRS 15, the loyalty scheme gives rise to a separate performance obligation because it generally contract modifications. Instead, the Group reflected the aggregate effect of all of the modifications that occurred before 1 January
provides a material right to the customer. The Group allocates a portion of the transaction price to the loyalty scheme liability based 2018 and presented when (i) the performance obligations were satisfied and unsatisfied; (ii) determined the transaction price; and
on the relative standard standalone selling price of loyalty points and a contract liability is recognised until the points are redeemed (iii) allocated the transaction price.
or expired.
Revenue recognition under IAS 18, applicable before 1 January 2018
Value-added services Revenue represents the fair value of consideration received or receivable for communication services and equipment sales net of
The Group has offerings where it provides customer with additional content, such as music and video streaming and SMS services, discounts and sales taxes. Revenue from rendering of services and sale of equipment is recognised when it is probable that the
as Value-Added Services (VAS). On this type of services, the Group has concluded that they are acting as a principal and revenue will economic benefits associated with the transaction shall flow to the Group and the amount of revenue and the associated costs can
be recognized at a gross basis. be measured reliably.

Connection fees When deciding the most appropriate basis for presenting revenue and cost of revenue, we assess our revenue arrangements
The Group has concluded that connection fees charged for the activation of services will be recognized over the contract period. The against specific criteria to determine if we are acting as principal or agent. We consider both the legal form and the substance of our
connection fees that is not considered as a distinct performance obligation shall form part of the transaction price and recognised agreement, to determine each party’s respective roles in the agreement. We are acting as a principal when we have the significant
over the period of service. risks and rewards associated with the rendering of telecommunication services.

Multi elements arrangements (Mobile contract plus handset) When our role in a transaction is that of principal, revenue is presented on a gross basis, otherwise, revenue is presented on a net
The Group has concluded that in case of multiple elements arrangements with subsidized products delivered in advance, the basis. Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer
component delivered in advance (e.g. mobile handset), will require recognition of a contract asset. Contract asset primary relates to and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or
the Group’s right on consideration for services and goods provided but not billed at the reporting date. service to a customer.

Installation cost, commissions to third party dealers, marketing expenses The Group principally obtains revenue from providing telecommunication services comprising access charges, airtime usage,
The Group has concluded that commissions and installation costs meet the definition of incremental costs to acquire a contract or a messaging, interconnect fee, data services and infrastructure provision, connection fees, equipment sales and other related services.
costs to fulfil a contract. The Group has capitalized these expenses as contract cost assets and amortized as per portfolio approach. The specific revenue recognition criteria applied to significant elements of revenue are set out below:
Recognized contract assets will be subject to impairment assessment under IFRS 9 requirements.
Revenue from rendering of services
Upfront commission Revenue for access charges, airtime usage and messaging by contract customers is recognised as revenue as services are performed
The Group has concluded that the sale of prepaid cards to dealers or distributors where the Group retains its control over the with unbilled revenue resulting from services already provided accrued at the end of each period and unearned revenue from
prepaid cards is assessed as a consignment arrangement. Thus, the Group shall not recognize revenue upon sale to dealers or services to be provided in future periods deferred.
distributors but upon utilisation or expiration of prepaid cards. Consequently, the commission arising from the sale of prepaid card
is recognized as an expense. Interconnection revenue
Revenues from network interconnection with other domestic and international telecommunications carriers are recognised based
In cases where the Group transfers its control over the prepaid cards to dealers, distributors or customers, the Group has concluded on the actual recorded traffic minutes in the period of occurrence.
that the upfront commission qualifies as a consideration payable to a customer and therefore will be treated as a reduction of the
transaction price. Similarly, the Group shall recognise revenue only upon utilization or expiration of prepaid cards.
104 Ooredoo Annual Report 2018
105

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue (continued)
Revenue recognition under IAS 18, applicable before 1 January 2018 (continued) Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date.
Sales of prepaid cards
Sale of prepaid cards is recognised as revenue based on the actual utilisation of the prepaid cards sold. Sales relating to unutilised Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership
prepaid cards are accounted as deferred income. Deferred income related to unused prepaid cards is recognised as revenue when to the lessee. All other leases are classified as operating leases.
utilised by the customer or upon termination of the customer relationship or upon expiration of the prepaid cards.
The Group as lessor
Multiple element deliverables Leases where we retain substantially all the risks and benefits of ownership of the asset are classified as operating leases. Any initial
In revenue arrangements including more than one deliverable that have value to a customer on standalone basis, the arrangement direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the
consideration is allocated to each deliverable based on their relative fair value to reflect the substance of the transaction. Where fair lease term on the same bases as rental income. Rental income is recognized in our consolidated income statement on a straight-line
value is not directly observable, the total consideration is allocated using an appropriate allocation method. The cost of elements is basis over the lease term.
immediately recognised in consolidated statement of profit or loss.
The amounts due from lessees under finance leases are recorded as receivables at the amount of Group’s net investment in the
Third party projects leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net
Network infrastructure projects undertaken on behalf of third parties is measured on the percentage of completion method based investment outstanding in respect of leases.
on the costs incurred plus profits recognized to date less progress billings and recognized losses.
Revenues from the sale of transmission capacity on terrestrial and submarine cables are recognized on a straight-line basis over the
In the consolidated statement of financial position, projects in progress for which costs incurred plus recognized profits exceed life of the contract. Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.
progress billings and recognized losses are presented as trade and other receivables. Advances received from customers are Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset
presented as deferred income/revenue. and recognized on a straight-line basis over the lease term.

Sales of equipment The Group as lessee

Revenue from sales of peripheral and other equipment is recognised when the significant risks and rewards of ownership are Rentals payable under operating leases are charged to the consolidated statement of profit or loss on a straight –line basis over
transferred to the buyer which is normally when the equipment is delivered and accepted by the customer. 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.
Investment property rental income
Rental income from investment property is recognised as revenue on a straight-line basis over the term of the lease. Rental income In the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability. The
from other property is recognised as other income. Lease incentives granted are recognised as an integral part of the total rental aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis, except where another
income, over the term of the lease. systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Loyalty program All other leases are classified as finance leases. A finance lease gives rise to the recognition of a leased asset and finance lease
The Group has a customer loyalty programme whereby customers are awarded credits (“points”) based on the usage of products and liability. Capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term, if
services, entitling customers to the right to redeem the accumulated points via specified means. The fair value of the consideration there is no reasonable certainty that we will obtain ownership of the leased asset at the end of the lease term. Interest expense is
received or receivable in respect of the initial sale is allocated between the points and the other components of sale. The amount recognized over the lease term using the effective interest method (“EIR”).
allocated to the points is estimated by reference to the fair value of the right to redeem it at a discount for the products of the Group
or for products or services provided by third parties. The fair value of the right to redeem is estimated based on the amount of Sale and leaseback transactions – where the Group is the lessee
discount, adjusted to take into account the expected forfeiture rate. A sale and leaseback transaction involves the sale of an asset by the Group and the leasing of the same asset back to the Group. The
lease payments and the sale price are usually interdependent as they are negotiated as a package. The accounting treatment of a
The amount allocated to the points is deferred and included in deferred revenue. Revenue is recognised when these points are sale and leaseback transaction depends upon the type of lease involved and the economic and commercial substance of the whole
redeemed and the Group has fulfilled its obligations to the customer. The amount of revenue recognised in those circumstances is arrangement.
based on the number of the points that have been redeemed, relative to the total number of points that is expected to be redeemed.
Deferred revenue is also released to revenue when it is no longer considered probable that the points will be redeemed. (a) Finance leases
Sale and leaseback arrangements that result in the Group retaining the majority of the risks and rewards of ownership of assets are
Licence and spectrum fees accounted for as finance leases. Any excess of sales proceeds over the carrying amount is deferred and amortised over the lease
Amortisation periods for licence and spectrum fees are determined primarily by reference to the unexpired licence period, the term.
conditions for licence renewal and whether licences are dependent on specific technologies.
(b) Operating leases
Amortisation is charged to the consolidated statement of profit or loss on a straight-line basis over the estimated useful lives from Sale and leaseback arrangements that result in substantially all of the risks and rewards of ownership of assets being transferred
the commencement of service of the network. to the lessor are accounted for as operating leases. Any excess of sales proceeds over the carrying amount is recognised in the
statement of profit or loss as gain on disposal.
The Group is dependent on the licenses that each operating company holds to provide their telecommunications services.
Other income/(expenses) - net
Other income represents income generated by the Group that arises from activities outside of the provision for communication
services and equipment sales. Key components of other income are recognised as follows:
106 Ooredoo Annual Report 2018
107

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Other income/(expenses) – net (continued) Taxation (continued)
Deferred income tax (continued)
Fair value gains
Fair value gains on financial assets at fair value through profit or loss, gains on the remeasurement to fair value of any pre-existing Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and
interest in an acquire in a business combination and gains on hedging instruments that are recognised in the consolidated unutilised tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
statement of profit or loss. differences, and the carry forward of unused tax credits and unutlised tax losses can be utilised except:
• Where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of
Dividend income
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
Dividend income is recognised when the Group’s right to receive the dividend is established.
accounting profit or loss nor taxable profit or loss; and
• In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
Commission income
ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences will
When the Group acts in the capacity of an agent rather than as the principal in the transaction, the revenue recognised is the net
reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
amount of commission made by the Group.
The carrying amount of deferred income tax assets is reviewed at each end of the financial reporting year and reduced to the extent
Ancillary service income
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
Revenue from ancillary services is recognised when these services are provided.
utilised. Unrecognised deferred income tax assets are reassessed at each end of the financial reporting year and are recognised to
the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Other expenses
Other expenses comprise of fair value losses on financial assets at fair value through profit or loss, losses on hedging instruments
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
that are recognised in consolidated statement of profit or loss and reclassifications of net losses previously recognised in
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of the
consolidated statement of other comprehensive income.
financial reporting year.
Borrowing cost
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current income
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised
tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same
in consolidated statement of profit or loss using the effective interest method.
taxation authority.
Foreign exchange gain and losses
Current and deferred tax for the year
Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis as either finance income or
Current and deferred income tax are recognized in profit or loss, except when they related to items that are recognized in other
finance cost depending on whether foreign currency movements are in a net gain or net loss position.
comprehensive income or directly in equity, in which case, the current deferred tax are also recognized in other comprehensive
income or directly in equity respectively. Where current tax or deferred income tax arises from the initial accounting for a business
Taxation
combination, the tax effect is included in the accounting for the business combination.
Some of the subsidiaries, joint ventures and associates are subject to taxes on income in various foreign jurisdictions. Income tax
expense represents the sum of current and deferred tax.
Tax exposure
In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and
Current income tax
whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of
Current income tax assets and liabilities for the current year and prior years are measured at the amount expected to be recovered
judgments about future events. New information may become available that causes the Group to change its judgments regarding
from or paid to the taxation authorities.
the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination
is made.
The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the
financial reporting year and any adjustment to tax payable in respect of previous years.
Discontinued operations
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly
Deferred income tax
distinguished from the rest of the Group and which:
Deferred income tax is provided based on temporary differences at the end of the financial reporting year between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
• Represents a separate major line of business or geographical area of operations;
• Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
Deferred income tax liabilities are recognised for all taxable temporary differences, except:
• Is a subsidiary acquired exclusively with a view to re-sale.
• Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit or loss nor taxable Classification as a discontinued operation occurs on disposal or when the operation meets the criteria to be classified as held-for-
profit or loss; and sale, if earlier. When an operation is classified as a discontinued operation, the comparative consolidated statement of profit or loss
or other comprehensive income is represented as if the operation had been discontinued from the start of the comparative year.
• In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
108 Ooredoo Annual Report 2018
109

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property, plant and equipment (continued)
Finance income and finance cost Depreciation (continued)
Finance income comprises interest income on funds invested that is recognised in the consolidated statement of profit or loss and
reclassifications of net gains previously recognised in other comprehensive income. Interest income is recognised as it accrues in
profit or loss, using effective interest method. Land lease rights under finance lease 50 years
Buildings 5 – 40 years
Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions recognised in consolidated
statement of other comprehensive income. Exchange and networks assets 5 – 25 years
Subscriber apparatus and other equipment 2 – 10 years
Property, plant and equipment
Recognition and measurement The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Assets in indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated
the course of construction are carried at cost, less any impairment. recoverable amount, the assets are written down to their recoverable amount, being the higher of their fair value less costs to sell
Cost includes expenditure that is directly attributable to the acquisition of the asset. The costs of self constructed assets include the and their value in use.
following:
• The cost of materials and direct labour; Derecognition
• Any other costs directly attributable to bringing the assets to a working condition for their intended use; An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its
• When the Group has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing use or disposal. Any gain or loss arising on derecognition of the asset is included in the consolidated statement of profit or loss in
the items and restoring the site on which they are located; and the year the asset is derecognised. The asset’s residual values, useful lives and method of depreciation are reviewed, and adjusted if
• Capitalized borrowing costs appropriate, at each financial year end.

Cost also includes transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, Borrowing costs
plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes substantial
equipment. period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing
costs are expensed as incurred. Borrowing costs consist of interest and other costs that the Group incurs in connection with the
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major borrowing of funds.
components) of property, plant and equipment.
Intangible assets and goodwill
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business
from disposal and the carrying amount of the item) is recognised in consolidated statement of profit or loss. combination is fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised
Capital work-in-progress is transferred to the related property, plant and equipment when the construction or installation and development costs, are not capitalised and expenditure is reflected in the consolidated statement of profit or loss in the year in
related activities necessary to prepare the property and equipment for their intended use have been completed, and the property which the expenditure is incurred.
and equipment are ready for operational use.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an
Transfer to investment property indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset
When the use of property changes from owner-occupied to investment property, the property is reclassified accordingly at the with a finite useful life is reviewed at each financial year. Changes in the expected useful life or the expected pattern of consumption
carrying amount on the date of transfer in accordance with cost model specified under IAS 40. of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate,
and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the
Expenditure consolidated statement of profit or loss in the expense category consistent with the nature of the intangible asset.
Expenditure incurred to replace a component of an item of property, plant and equipment that is accounted for separately is
capitalised and the carrying amount of the component that is replaced is written off. Other subsequent expenditure is capitalised Research and development
only when it increases future economic benefits of the related item of property, plant and equipment. All other expenditure is Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
recognised in the consolidated statement of profit or loss as incurred. understanding, is recognised in profit or loss as incurred.

Depreciation Development activities involve a plan or design for the production of new or substantially improved products and processes.
Items of property, plant and equipment are depreciated on a straight line basis in the consolidated statement of profit or loss over Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and
the estimated useful lives of each component. Leased assets are depreciated over the shorter of the lease term and their useful lives commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete
unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated. development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour, overhead costs
that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other development
Depreciation of these assets commences from the date that they are installed and are ready for use, or in respect of internally expenditure is recognized in profit or loss as incurred. Capitalised development expenditure is measured at cost less accumulated
constructed assets, from the date that the asset is completed and ready for use. The estimated useful lives of the property, plant and amortisation and any accumulated impairment losses.
equipment are as follows:
110 Ooredoo Annual Report 2018
111

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Intangible assets and goodwill (continued) Investment property (continued)

Indefeasible rights of use (“IRU”) Investment properties are depreciated on straight line basis using estimated useful life of 20 years.
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 Investment properties are derecognised when either they have been disposed of or when the investment property is permanently
underlying asset, generally optical fibres or dedicated wavelength bandwidth, and the duration of the right is for the major part of withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal
the underlying asset’s economic life. They are amortised on a straight line basis over the shorter of the expected period of use and of an investment property are recognised in the consolidated statement of profit or loss in the year of retirement or disposal.
the life of the contract which ranges between 10 to 15 years.
Fair value measurement
Capital work-in-progress related to IRU is initially presented as part of property, plant and equipment. When the construction or For measurement and disclosure purposes, the Group determines the fair value of an asset or liability at initial measurement
installation and related activities necessary to prepare the IRU for their intended use and operations have been completed, the or at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
related IRU will be transferred from property, plant and equipment to intangible assets. transaction between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. The fair value measurement is based on the presumption that the transaction to sell
The useful lives of intangible assets are assessed to be either finite or indefinite. the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
Goodwill • In the absence of a principal market, in the most advantageous market for the asset or liability
Goodwill represents the excess of the cost of the acquisition over the fair value of identifiable net assets of the investee at the date of
acquisition which is not identifiable to specific assets. The principal or the most advantageous market must be accessible to the Group. The fair value of an asset or a liability is measured
using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act
Goodwill acquired in a business combination from the acquisition date is allocated to each of the Group’s cash-generating units, or in their economic best interest.
groups of cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other
assets or liabilities of the Group are assigned to those units or groups of units. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by
using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and
Each unit or group of units to which the goodwill is allocated: best use.
• Represents the lowest level within the group at which the goodwill is monitored for internal management purposes; and
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
• Is not larger than a segment based on the group’s operating segments as determined in accordance with ifrs 8, operating
measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
segments.
Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis,
A summary of the useful lives and amortisation methods of Group’s intangible assets other than goodwill are as follows:
except for share-based payment transactions that are within the scope of IFRS 2; leasing transactions that are within the scope of IAS
17 and measurements that have some similarities to fair value, but are not fair value, such as net realisable value in IAS 2 or value in
Customer contracts use in IAS 36.
and related customer Brand / IRU, software and
License costs relationship Trade names other intangibles All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Useful lives : Finite Finite Finite Finite • Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
(10 – 50 years) (2 – 8 years) (6 – 25 years) (3 – 15 years) • Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable
Amortised on a Amortised on a Amortised on a Amortised on a
• Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
straight line basis straight line basis straight line basis straight line basis
Amortisation method used : over the periods of over the periods of over the periods of over the periods of
availability availability. availability availability For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that
Internally generated or is significant to the fair value measurement as a whole) at the end of each reporting date.
: Acquired Acquired Acquired Acquired
acquired
Financial instruments
Investment property Upon adoption of IFRS 9 – applicable from January 1, 2018
Financial assets and financial liabilities are recognised in the Group’s consolidated statement of financial position when the Group
Investment properties are properties held either to earn rental income or for capital appreciation or for both, but not for
becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at
sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purpose.
fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other
Investment properties are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of
than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the
the investment property. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition
and amortization. Depreciation and amortization of investment properties are computed using the straight line method over the
of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in consolidated statement of
estimated useful lives (EUL) of assets of twenty (20) years.
profit or loss.
When the use of a property changes such that it is reclassified as property and equipment, its fair value at the date of
reclassification becomes its cost for subsequent accounting.
112 Ooredoo Annual Report 2018
113

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial instruments (continued) Financial instruments (continued)
Upon adoption of IFRS 9 – applicable from January 1, 2018 (continued) Upon adoption of IFRS 9 – applicable from January 1, 2018 (continued)
Financial assets (continued)
Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. (iii) Equity instruments designated as at FVTOCI
On initial recognition, the Group may make an irrevocable election (on an instrument-by-instrument basis) to designate investments
All recognised financial assets are subsequently measured in their entirety at amortised cost or fair value through other in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is
comprehensive or fair value through profit and loss, depending on the classification of the financial assets. contingent consideration recognised by an acquirer in a business combination.

Classification of financial assets Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are
(i) Debt instruments designated at amortised cost measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and
Debt instruments that meet the following conditions are measured subsequently at amortised cost: accumulated in the fair value reserve. The cumulative gain or loss will not be reclassified to consolidated statement of profit or loss
on disposal of the equity investments, instead, they will be transferred to retained earnings.
• The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash
flows; and Dividends on these investments in equity instruments are recognised in consolidated statement of profit or loss in accordance with
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and IFRS 9, unless the dividends clearly represent a recovery of part of the cost of the investment.
interest on the principal amount outstanding.
(iv) Financial assets at FVTPL
For financial instruments other than purchased or originated credit-impaired financial assets (i.e. assets that are credit-impaired on Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL. Specifically:
initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees paid • Investments in equity instruments are classified as at FVTPL, unless the Group designates an equity investment that is neither
or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding held for trading nor a contingent consideration arising from a business combination as at FVTOCI on initial recognition.
expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross
carrying amount of the debt instrument on initial recognition. For purchased or originated credit-impaired financial assets, a credit- Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses
adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the recognised in the consolidated statement of profit or loss.
amortised cost of the debt instrument on initial recognition.
Impairment of financial assets
Amortised cost and effective interest rate method The Group recognises a loss allowance for expected credit losses (“ECL”) on investments in debt instruments that are measured at
amortised cost or at FVTOCI, trade and other receivables, contract assets, as well as on financial guarantee contracts. The amount
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective
principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial financial instrument.
amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised
cost of a financial asset before adjusting for any loss allowance. The Group recognises lifetime ECL for trade and other receivables and contract assets. The expected credit losses on these financial
assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of
over the relevant period. conditions at the reporting date, including time value of money where appropriate.

Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since
and at FVTOCI. For financial instruments other than purchased or originated credit-impaired financial assets, interest income is initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the
calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. The assessment of whether
have subsequently become credit-impaired. For financial assets that have subsequently become credit-impaired, interest income lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial
is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, recognition instead of on evidence of a financial asset being credit-impaired at the reporting date.
the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest
income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a
For purchased or originated credit-impaired financial assets, the Group recognises interest income by applying the credit-adjusted financial instrument that are possible within 12 months after the reporting date.
effective interest rate to the amortised cost of the financial asset from initial recognition. The calculation does not revert to the gross
basis even if the credit risk of the financial asset subsequently improves so that the financial asset is no longer credit-impaired.

(ii) Debt instruments designated at FVTOCI

Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income
(FVTOCI):

• The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and
selling the financial assets; and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
114 Ooredoo Annual Report 2018
115

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial instruments (continued) Financial instruments (continued)
Upon adoption of IFRS 9 – applicable from January 1, 2018 (continued) Financial assets (continued)
Financial assets (continued) (iv) Measurement and recognition of expected credit losses (continued)

(i) Significant increase in credit risk The Group recognises an impairment gain or loss in consolidated statement of profit or loss for all financial instruments with a
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments
compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on that are measured at FVTOCI, for which the loss allowance is recognised in other comprehensive income and accumulated in the fair
the financial instrument as at the date of initial recognition. In making this assessment, the Group considers both quantitative and value reserve, and does not reduce the carrying amount of the financial asset in the consolidated statement of financial position.
qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is
available without undue cost or effort. (v) Write-off policy
The Group writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and
For financial guarantee contracts, the date that the Group becomes a party to the irrevocable commitment is considered to be the there is no realistic prospect of recovery.
date of initial recognition for the purposes of assessing the financial instrument for impairment. In assessing whether there has
been a significant increase in the credit risk since initial recognition of a financial guarantee contracts, the Group considers the Derecognition of financial assets
changes in the risk that the specified debtor will default on the contract. The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group
The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the
risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains
amount becomes past due. 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.
(ii) Definition of default
The Group employs statistical models to analyse the data collected and generate estimates of probability of default (“PD”) of On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum
exposures with the passage of time. This analysis includes the identification for any changes in default rates and changes in key of the consideration received and receivable is recognised in consolidated statement of profit or loss. In addition, on derecognition
macro-economic factors across various geographies of the Group. of an investment in a debt instrument classified as at FVTOCI, the cumulative gain or loss previously accumulated in the fair value
reserve is reclassified to consolidated statement of profit or loss. In contrast, on derecognition of an investment in equity instrument
(iii) Credit-impaired financial assets which the Group has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in the
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that fair value reserve is not reclassified to consolidated statement profit or loss, but is transferred to retained earnings.
financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following events:
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where:
(a) Significant financial difficulty of the issuer or the borrower;
(b) A breach of contract, such as a default or past due event; • The contractual rights to receive cash flows from the asset have expired;
(c) The lender of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted • The group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without
to the borrower a concession that the lender would not otherwise consider; material delay to a third party under a ‘pass-through’ arrangement; or
(d) It is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or • The group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks
(e) The disappearance of an active market for that financial asset because of financial difficulties. and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
(iv) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default, loss given default and the exposure at Financial liabilities
default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking All financial liabilities are measured either at FVTPL or at amortised cost using the effective interest method.
information. As for the exposure at default, for financial assets, this is represented by the assets’ gross carrying amount at the
reporting date; for financial guarantee contracts, the exposure includes the amount drawn down as at the reporting date, together Financial liabilities at FVTPL
with any additional amounts expected to be drawn down in the future by default date determined based on historical trend, the Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on changes in fair value recognised in the
Group’s understanding of the specific future financing needs of the debtors, and other relevant forward-looking information. consolidated statement of profit or loss to the extent that they are not part of a designated hedging relationship. The net gain or loss
recognised in the consolidated statement profit or loss incorporates any interest paid on the financial liability.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the
Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective However, for financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that
interest rate. is attributable to changes in the credit risk of that liability is recognised in consolidated statement of other comprehensive income,
unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge
For a financial guarantee contract, as the Group is required to make payments only in the event of a default by the debtor in an accounting mismatch consolidated statement of in profit or loss. The remaining amount of change in the fair value of liability is
accordance with the terms of the instrument that is guaranteed, the expected loss allowance is the expected payments to reimburse recognised in consolidated statement of profit or loss. Changes in fair value attributable to a financial liability’s credit risk that are
the holder for a credit loss that it incurs less any amounts that the Group expects to receive from the holder, the debtor or recognised in consolidated statement of other comprehensive income are not subsequently reclassified to consolidated statement
any other party. of profit or loss; instead, they are transferred to retained earnings upon derecognition of the financial liability.
116 Ooredoo Annual Report 2018
117

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial instruments (continued) Financial instruments under IAS 39, applicable before 1 January 2018 (continued)
Financial liabilities (continued) Financial assets (continued)
Financial liabilities at FVTPL (continued) Bank balances and cash (continued)

Gains or losses on financial guarantee contracts issued by the Group that are designated by the Group as at FVTPL are recognised in For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash on hand, call deposits and
consolidated statement of profit or loss. demand deposits with original maturity of less than three months.

Financial liabilities measured at amortised cost Trade and other receivable

Financial liabilities, that are not designated as at FVTPL, are measured subsequently at amortised cost using the effective interest Trade receivables and prepayments that have fixed or determinable payments that are not quoted in an active market are classified
method. as ‘loans and receivables’. Loans and receivables are recognized initially at fair value and subsequently measured at amortised cost
using the effective interest method less impairment.
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 (including all Appropriate allowances for estimated irrecoverable amounts are recognized in the consolidated statement of profit or loss where there
fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) is objective evidence that the asset is impaired. The allowance recognized is measured as the difference between the asset’s carrying
through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability. amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Derecognition of financial liabilities Available-for-sale investments

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. Available-for-sale investments are non-derivative financial assets that are designated as available for sale or are not classified in
The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is any of the above categories of financial assets. Available-for-sale investments are recognised initially at fair value plus directly
recognised in consolidated statement of profit or loss. attributable transaction costs. After initial recognition, available for sale investments are subsequently remeasured at fair value, with
any resultant gain or loss directly recognised as a separate component of equity as fair value reserve under other comprehensive
Financial instruments under IAS 39, applicable before 1 January 2018 income until the investment is sold, collected, or the investment is determined to be impaired, at which time the cumulative gain
or loss previously reported in equity is included in the consolidated statement of profit or loss for the year. Interest earned on
(i) Financial assets the investments is reported as interest income using the effective interest rate. Dividend earned on investments are recognised
The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets in the consolidated statement of profit or loss as “Dividend income” when the right to receive dividend has been established. All
(including assets designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the regular way purchases and sales of investment are recognised on the trade date when the Group becomes or cease to be a party to
Group becomes a party to the contractual provisions of the instrument. contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid
rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of prices at the close of business at the end of the financial reporting year. For investments where there is no active market, fair value is
ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group determined using valuation techniques. Such techniques include using recent arm’s length market transactions, reference to current
is recognised as a separate asset or liability. market value of another instrument which is substantially the same, discounted cash flow analysis or other valuation models.
For investment in funds, fair value is determined by reference to net asset values provided by the fund administrators.
Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when, and
only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and Due to the uncertain nature of cash flows arising from certain unquoted equity investments of the Group, the fair value of these
settle the liability simultaneously. investments cannot be reliably measured. Consequently, these investments are carried at cost, less any impairment losses.

The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, If an available-for-sale investment is impaired, an amount comprising the difference between its cost and its current fair value,
loans and receivables and available-for-sale investments. less any impairment loss previously recognised in the consolidated statement of profit or loss, is transferred from equity to the
consolidated statement of profit or loss. Impairment losses on equity instruments recognised in the consolidated statement of profit
Financial assets at fair value through profit or loss or loss are not subsequently reversed. Reversals of impairment losses on debt instruments are reversed through the consolidated
A financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon statement of profit or loss; if the increase in fair value of the instrument can be objectively related to an event occurring after the
initial recognition. Financial assets are designated at fair value through profit or loss if the Group manages such investments impairment loss was recognised in the consolidated statement of profit or loss.
and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented risk management
or investment strategy. Attributable transaction costs are recognised in the consolidated statement of profit or loss as incurred. When the investment is disposed of, the cumulative gain or loss previously recorded in equity is recognised in the consolidated
Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognised in the statement of profit or loss.
consolidated statement of profit or loss.

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets
are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables
comprise bank balances and cash and trade receivables.

Bank balances and cash

Bank balances and cash comprise cash on hand, call deposits 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.
118 Ooredoo Annual Report 2018
119

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial instruments under IAS 39, applicable before 1 January 2018 (continued) Financial instruments under IAS 39, applicable before 1 January 2018 (continued)
Financial assets (continued)
(iii) Derivative financial instruments and hedge accounting
Derecognition of financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where: Derivative financial instruments are recognised initially at fair value; attributable transaction costs are recognised in the consolidated
statement of profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes
• The contractual rights to receive cash flows from the asset have expired; therein are recognized in described below for those derivative instruments designated for hedging cash flows, while changes in the
• The group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without fair value of derivative instruments not designated for cash flow hedges are charged directly to the consolidated statement of profit
material delay to a third party under a ‘pass-through’ arrangement; or or loss.
• The group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks
and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has For the purpose of hedge accounting, hedges are classified as:
transferred control of the asset.
• Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or unrecognised firm
Impairment and uncollectibility of financial assets commitment (except for foreign currency risk); or
An assessment is made at each end of the reporting period to determine whether there is objective evidence that a specific financial
asset may be impaired. If any such evidence exists, impairment loss is recognised in the consolidated statement of profit or loss. • Cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particular risk associated
Impairment is determined as follows: with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm
commitment.
(a) For assets carried at fair value, impairment is the difference between cost and fair value, less any impairment loss previously
recognised in the consolidated statement of profit or loss; At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group
(b) For assets carried at cost, impairment is the difference between carrying value and the present value of future cash flows wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.
discounted at the current market rate of return for a similar financial asset;
The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being
(c) For assets carried at amortised cost, impairment is the difference between carrying amount and the present value of future hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged
cash flows discounted at the original effective interest rate. item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting
change in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective
(ii) Financial liabilities throughout the financial reporting periods of which they were designated.

The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other Hedges which meet the criteria for hedge accounting are accounted for as follows:
financial liabilities are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual
provisions of the instrument. Fair value hedges
The change in the fair value of a hedging derivative is recognised in the consolidated statement of profit or loss. The change in the
Financial liabilities include loans and borrowings and trade payables and accruals. fair value of the hedged item attributable to the risk hedged is recorded as a part of the carrying value of the hedged item and is
also recognised in consolidated statement of profit or loss.
Loans and borrowings
Loans and borrowings are recognised initially at fair value of the consideration received, less directly attributable transaction Cash flow hedges
costs. Subsequent to initial recognition, loans and borrowings are measured at amortised cost using the effective interest method. The effective portion of the gain or loss on the hedging instrument is recognised as other comprehensive income and is taken
Instalments due within one year at amortised cost are shown as a current liability. directly to equity, while any ineffective portion is recognised immediately in the consolidated statement of profit or loss.

Gains or losses are recognised in the consolidated statement of profit or loss when the liabilities are derecognised as well as through The Group uses interest rate swap contracts to hedge its risk associated primarily with interest rate fluctuations relating to the
the amortisation process. Interest costs are recognised as an expense when incurred except those eligible for capitalisation. interest charged on its loans and borrowings. These are included in the consolidated statement of financial position at fair value and
any resultant gain or loss on interest rate swaps contracts that qualify for hedge accounting is recognised as other comprehensive
Trade and other payables income and subsequently recognised in the consolidated statement of profit or loss when the hedged transaction affects the
Liabilities are recognised for amounts to be paid in the future for services received or when the risks and rewards associated with consolidated statement of profit or loss.
goods are transferred to the Group, whether billed by the supplier or not.
The Group uses cross currency swap contracts and forward currency contracts to hedge its risks associated with foreign exchange
Derecognition of financial liabilities rate fluctuations. Further, the Group also have an interest rate swap which is not designated as a hedge. These cross currency
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Where an existing swaps, forward currency contracts and the interest rate swaps which is not designated as hedge are included in the consolidated
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are statement of financial position at fair value and any subsequent resultant gain or loss in the fair value is recognised in the
substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of consolidated statement of profit or loss.
a new liability, and the difference in the respective carrying amounts is recognised in the consolidated statement or profit or loss.
The fair value of cross currency swaps and forward currency contracts is calculated by reference to respective instrument current
exchange rates for contracts with similar maturity profiles. The fair value of interest rate swap contracts is calculated by reference to
the market valuation of the swap contracts.
120 Ooredoo Annual Report 2018
121

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial instruments under IAS 39, applicable before 1 January 2018 (continued)
(iii) Derivative financial instruments and hedge accounting (continued) Inventories
Inventories are stated at the lower of cost and net realisable value.
Embedded derivative is presented with the host contract on the consolidated statement of financial position which represents an
appropriate presentation of overall future cash flows for the instrument taken as a whole. The cost of inventories is based on the weighted average principle, and includes expenditure incurred in acquiring the inventories
and other costs incurred in bringing them to their existing location and condition
Derivative instruments that are not designated as effective hedging instruments are classified as current or non-current or
separated into a current and non-current portion based on an assessment of the facts and circumstances (i.e., the underlying Net realisable value is based on estimated selling price less any further costs expected to be incurred on completion and disposal.
contracted cash flows).
Provisions
• Where the group will hold a derivative as an economic hedge (and does not apply hedge accounting) for a period beyond 12 Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event, and it is probable
months after the reporting date, the derivative is classified as non-current (or separated into current and non-current portions) that the Group will be required to settle that obligation. Provisions are measured as a best estimate of the expenditure required to
consistent with the classification of the underlying item. settle the obligation at the reporting date, and are discounted to present value where the effect is material.

• Embedded derivatives that are not closely related to the host contract are classified consistent with the cash flows of the host Decommissioning liability
contract. The Group recognises a decommissioning liability where it has a present legal or constructive obligation as a result of past events,
and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of
• Derivative instruments that are designated as, and are effective hedging instruments, are classified consistent with the obligation can be made.
classification of the underlying hedged item. The derivative instrument is separated into a current portion and non-current
portion only if a reliable allocation can be made. The Group records full provision for the future costs of decommissioning for network and other assets. When the liability is initially
recognised, the present value of the estimated costs is capitalised by increasing the carrying amount of the related network and
(v) Fair value of financial instruments other assets to the extent that it was incurred by the development/construction.

The fair value of financial instruments that are traded in active markets at each reporting date is determined with reference to Changes in the estimated timing or cost of decommissioning are dealt with prospectively by recording an adjustment to the
quoted market prices or dealer price quotations, without any deduction for transaction costs. For financial instruments not traded provision and a corresponding adjustment to network and other assets. Any reduction in the decommissioning liability and,
in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent therefore, any deduction from the asset to which it relates, may not exceed the carrying amount of that asset. If it does, any excess
arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; discounted over the carrying value is taken immediately to the consolidated statement of profit or loss.
cash flow analysis or other valuation models. An analysis of fair values of financial instruments and further details as to how they are
measured are provided in note 34. If the change in estimate results in an increase in the decommissioning liability and, therefore, an addition to the carrying value of
the asset, the Group considers whether this is an indication of impairment of the asset as a whole, and if so, tests for impairment. If,
Offsetting of financial instruments the estimate for the revised value of network and other assets net of decommissioning provision exceeds the recoverable value, that
Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, portion of the increase is charged directly to expense.
and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net
basis, or to realise the assets and settle the liabilities simultaneously Over time, the discounted liability is increased for the change in present value based on the discount rate that reflects current
market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognised in the consolidated
Share capital statement of profit or loss as a finance cost.
Ordinary shares
Ordinary shares are classified as equity. The bonus shares and rights issued during the year are shown as an addition to the share The Group recognises neither the deferred tax asset in respect of the temporary difference on the decommissioning liability nor the
capital. Issue of bonus shares are deducted from the accumulated retained earnings of the Group. Any share premium on rights corresponding deferred tax liability in respect of the temporary difference on a decommissioning asset.
issue are accounted in compliance with local statutory requirements.
End of service benefits
Dividend on ordinary share capital The Group provides end of service benefits to its employees. The entitlement to these benefits is based upon the employees’ final
Dividend distributions to the Group’s shareholders are recognized as a liability in the consolidated financial statements in the period salary and length of service, subject to the completion of a minimum service period, calculated under the provisions of the Labour
in which the dividend are approved by the shareholders. Dividend for the year that are approved after the reporting date of the Law and is payable upon resignation or termination of the employee. The expected costs of these benefits are accrued over the
consolidated financial statements are considered as an event after the reporting date. period of employment.

Earnings per share Pensions and other post-employment benefits

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the Pension costs under the Group’s defined benefit pension plans are determined by periodic actuarial calculation using the projected-
profit or loss attributable to ordinary shareholders of the parent by the weighted average number of ordinary shares outstanding unit-credit method and applying the assumptions on discount rate, expected return on plan assets and annual rate of increase in
during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted compensation.
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible
notes and share options granted to employees, if any.

Where the effect of the assumed conversion of the convertible notes and the exercise of all outstanding options have anti-dilutive
effect, basic and diluted EPS are stated at the same amount.
122 Ooredoo Annual Report 2018
123

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

3. SIGNIFICANT ACCOUNTING POLICIES (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Provisions (continued) Foreign currency transactions (continued)
Pensions and other post-employment benefits (continued)
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as
The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the
future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of exchange rates at the date when the fair value is determined. Foreign currency differences arising on retranslation are recognised
any plan assets. in the consolidated statement of profit or loss, except for differences arising on the retranslation of available-for-sale equity
investments which are recognised in other comprehensive income.
The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method.
When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of economic Translation of foreign operations
benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to
present value of economic benefits, consideration is given to any applicable minimum funding requirements. Qatari riyals at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Qatari Riyals
at exchange rates at the dates of the transactions.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding
interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income. Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation
The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying reserve (translation reserve) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate
the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such
benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of that control or significant influence is lost, the cumulative amount in the translation reserve related to that foreign operation is
contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in the reclassified to the consolidated statement of profit or loss as part of the gain or loss on disposal.
consolidated statement of profit or loss.
When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part
gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a of its investment in an associate that includes a foreign operation while retaining significant influence or joint control, the relevant
defined benefit plan when the settlement occurs. proportion of the cumulative amount is reclassified to consolidated statement of profit or loss.

With respect to the Qatari nationals, the Company makes contributions to Qatar Retirement and Pension Authority as a percentage When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the
of the employees’ salaries in accordance with the requirements of respective local laws pertaining to retirement and pensions. foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net
The Company’s share of contributions to these schemes, which are defined contribution schemes under International Accounting investment in a foreign operation and are recognised in other comprehensive income, and presented in the translation
Standard (IAS) – 19 Employee Benefits are charged to the consolidated statement of profit or loss. reserve in equity.

Cash settled share-based payment transactions Impairment of Non-financial assets

The Group provides long term incentives in the form of shadow shares (“the benefit”) to its employees. The entitlement to these The carrying amounts of the Group’s non-financial assets, other than inventories are reviewed at each reporting date to determine
benefits is based on individual performance and overall performance of the Group, subject to fulfilling certain conditions (“vesting whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
conditions”) under documented plan and is payable upon end of the vesting period (“the exercise date”). The benefit is linked to The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In
the share price of the Group, and the Group proportionately recognise the liability against these benefits over the vesting period assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
through the consolidated statement of profit or loss, until the employees become unconditionally entitled to the benefit. reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment
testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are
The fair value of the liability is reassessed on each reporting date and any changes in the fair value of the benefit are recognized largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).
through the consolidated statement of profit or loss.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable
Once the benefit is settled in cash at the exercise date, the liability is derecognised. The amount of cash settlement is determined amount. Impairment losses are recognized in the consolidated statement of profit or loss.
based on the share price of the Group at the exercise date. On breach of the vesting conditions, the liability is derecognised through
the consolidated statement of profit or loss. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill
allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
Foreign currency transactions Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased
Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
measured using that functional currency. Transactions in foreign currencies are initially recorded by the Group entities at their amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
respective functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
currencies are retranslated at the functional currency spot rate of exchange ruling at the end of the financial reporting year.
Segment reporting
Segment results that are reported to the Group’s Chief Operating Decision Maker (“CODM”) include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis. Financial information on operating segments is presented in
Note 41 to the consolidated financial statements.

Events after the reporting date

The consolidated financial statements are adjusted to reflect events that occurred between the reporting date and the date when the
consolidated financial statements are authorised for issue, provided they give evidence of conditions that existed at the reporting
date. Any post year-end events that are non-adjusting events are discussed on the consolidated financial statements when material.
124 Ooredoo Annual Report 2018
125

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

4. REVENUE 6. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

2017 2017
2018 (Restated) 2018 (Restated)
QR.’000 QR.’000 QR.’000 QR.’000
Revenue from rendering of telecommunication services 27,895,273 30,693,109 Employee salaries and associated costs 3,269,380 3,271,585

Sale of telecommunications equipment 1,747,461 1,636,762 Marketing costs and sponsorship 932,101 1,060,676

Revenue from use of assets by others 283,990 316,078 Commission on cards 594,934 958,667

29,926,724 32,645,949 Legal and professional fees 215,816 259,261

Timing of revenue recognition Rental and utilities 253,226 262,707

Allowance for impairment of trade receivables 342,590 351,339
At a point in time 1,747,461 1,636,762
Repairs and maintenance 88,698 76,754
Overtime 28,179,263 31,009,187
Other expenses 712,967 702,612
29,926,724 32,645,949
6,409,712 6,943,601
As permitted under the transitional provisions in IFRS 15, the transaction price allocated to unsatisfied performance obligations as
of 31 December 2017 is not disclosed. 7. DEPRECIATION AND AMORTISATION
Management expects that the transaction price allocated to the unsatisfied contracts as at 31 December 2018, mainly relating to 2018 2017
deferred income, will be recognized as revenue during 2019. QR.’000 QR.’000

Depreciation of property, plant and equipment and investment property 5,990,497 6,472,944
5. OPERATING EXPENSES
Amortisation of intangible assets 2,010,000 1,946,690
2017
8,000,497 8,419,634
2018 (Restated)
QR.’000 QR.’000
8. NET FINANCE COSTS
Out payments and interconnect charges 2,445,705 2,269,579
2018 2017
Regulatory and related fees 2,446,224 2,513,226 QR.’000 QR.’000
Rentals and utilities – network 1,755,657 1,710,222 Finance cost
Network operation and maintenance 2,129,052 2,221,699 Interest expenses 1,858,486 1,841,015

Cost of equipment sold and other services 3,011,024 3,293,203 Profit on Islamic financing obligation 170,965 175,024

Provision for obsolete and slow moving inventories 15,848 8,794 Amortisation of deferred financing costs (note 27) 93,385 70,888
Other finance charges (29,410) 4,997
11,803,510 12,016,723
2,093,426 2,091,924
Finance income
Interest income (360,624) (351,144)
Net finance costs 1,732,802 1,740,780

9. OTHER INCOME – NET

2017
2018
(Restated)
QR.’000 QR.’000

Foreign currency (loss)/gain – net (360,366) 81,166

Dividend income 43,750 28,424

Rental income 30,003 30,413

Change in fair value of derivatives – net 4,516 (10,539)

Unrealised gain on equity investments at FVTPL 30,554 -

Miscellaneous income – net (i) 720,883 22,771

469,340 152,235

i.Miscellaneous income – net includes:

• Gain on loss of control of a subsidiary, and
• Compensation received for performing certain one off ancillary services in Qatar.
126 Ooredoo Annual Report 2018
127

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

10. ROYALTIES AND FEES 12. PROPERTY, PLANT AND EQUIPMENT

Subscriber
2018 2017
Exchange and apparatus
QR.’000 QR.’000
Land and networks and other Capital work
Royalty (i) 262,603 307,810 buildings assets equipment in progress Total
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000
Industry fees (ii) 206,763 234,679
Cost
Other statutory fees (iii) 19,790 22,235
At 1 January 2017 8,137,158 57,507,744 7,095,644 3,046,114 75,786,660
489,156 564,724 Additions (i) 82,033 1,032,645 237,744 2,905,570 4,257,992
Transfers 231,099 2,840,113 672,620 (3,743,832) -
• Royalty is payable to the Government of the Sultanate of Oman based on 12% (2017: 12%) of the net of predefined sources of
revenue and operating expenses. Disposals (ii) (30,852) (4,428,819) (271,294) (2,107) (4,733,072)
Reclassification (3,064) (17,540) (21,989) (5,643) (48,236)
• In accordance with its operating licenses for Public Telecommunications Networks and Services granted in Qatar by ictQATAR,
now referred to as the Communications Regulatory Authority (CRA), the Company is liable to pay to the CRA an annual industry Related to assets held for sale (41,233) (48,337) (25,659) - (115,229)
fee which is calculated at 12.5% of adjusted net profit on regulated activities undertaken in Qatar pursuant to the licenses. Exchange adjustment (145,988) (466,578) 89,680 (33,136) (556,022)
At 31 December 2017 (restated) 8,229,153 56,419,228 7,776,746 2,166,966 74,592,093
• Contributions by National Mobile Telecommunications Company K.S.C.P to Kuwait Foundation for the Advancement of Sciences
(“KFAS”), National Labour Support Tax (“NLST”) and Zakat are included under other statutory fees. Additions 270,682 902,183 203,013 3,560,753 4,936,631
Transfers 235,168 1,844,468 486,813 (2,566,449) -
11. BASIC AND DILUTED EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit for the year attributable to shareholders of the Parent by the weighted Disposals (48,399) (336,902) (244,397) (34) (629,732)
average number of shares outstanding during the year. There were no potentially dilutive shares outstanding at any time during the Impairment - - - (29,571) (29,571)
year and therefore, the diluted earnings per share is equal to the basic earnings per share. Reclassification 2,949 446,288 (225,151) (211,125) 12,961
Exchange adjustment (330,921) (2,225,290) (328,233) (95,432) (2,979,876)
2017
2018 (Restated) At 31 December 2018 8,358,632 57,049,975 7,668,791 2,825,108 75,902,506

Profit for the year attributable to shareholders of the parent (QR.’000) 1,565,065 1,897,311 Accumulated depreciation
At 1 January 2017 3,950,761 34,482,195 4,903,699 - 43,336,655
Weighted average number of shares (in ’000) 320,320 320,320
Provided during the year 506,301 5,133,814 824,701 - 6,464,816
Basic and diluted earnings per share (QR.) 4.89 5.92
Disposals (ii) (25,919) (3,960,785) (236,283) - (4,222,987)
Reclassification 523 (1,670) (11,482) - (12,629)
Related to assets held for sale (9,329) (31,953) (18,381) - (59,663)
Exchange adjustment (25,070) (331,447) (31,889) - (388,406)
At 31 December 2017 (restated) 4,397,267 35,290,154 5,430,365 - 45,117,786
Provided during the year 495,931 4,682,232 804,206 - 5,982,369
Disposals (26,756) (358,027) (131,233) - (516,016)
Reclassification (14,156) 158,811 (131,557) - 13,098
Impairment 4,006 16,023 - - 20,029
Exchange adjustment (216,484) (1,484,103) (221,666) - (1,922,253)
At 31 December 2018 4,639,808 38,305,090 5,750,115 - 48,695,013
Carrying value
At 31 December 2018 3,718,824 18,744,885 1,918,676 2,825,108 27,207,493
At 31 December 2017 3,831,886 21,129,074 2,346,381 2,166,966 29,474,307

i) Exchange and network assets include finance lease assets recognized on account of sale and lease back transaction of one of the Group’s subsidiaries,
Indosat Ooredoo.
ii) In 2017, the Group had entered into a non-cash transaction for exchange of certain property, plant and equipment.
iii) Due to the current security situation of certain locations in Iraq, Asiacell, one of the Group’s subsidiaries, may be unable to effectively exercise
control of some of its property and equipment. Asiacell has regained control on these property and equipment and based on their assessment, an
insignificant amount of damage has occurred which has been provided for.
iv) Asiacell reached an agreement with a local bank wherein it received properties in exchange for the equivalent value of the bank deposits. As at 31
December 2018, Asiacell had received parcels of lands and buildings located in Baghdad and Sulaymaniah amounting to QR. 440,440 thousand.
Currently, the legal title is transferred to a related party of Asiacell and it will be transferred in the name of Asiacell upon completing legal formalities.
However, the Group has obtained an indemnity letter from the related party that these assets are under the Group’s control and the ownership will be
transferred upon completing the legal formalities. During the year Asiacell appointed a third party consultant to review the status of these properties.
v) Certain property, plant and equipment amounting to QR. 295,928 thousand (2017: QR. 318,691 thousand) are used as collaterals to secure the Group’s
borrowings.
 128
Notes to the Consolidated Financial Statements
For the year ended 31 December 2018

13. INTANGIBLE ASSETS AND GOODWILL

Customer
contracts and IRU, software
License related customer Brand/ and other
Goodwill costs relationship Trade names intangibles Total
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000
Cost
At 1 January 2017 9,823,416 28,461,990 660,569 2,671,344 2,962,612 44,579,931
Additions - 522,531 - - 740,032 1,262,563
Disposals - - - - (779) (779)
Reclassification - - - - 48,236 48,236
Related to assets held for sale - - - - (36,105) (36,105)
Exchange adjustment (147,340) (45,058) (8,542) (8,093) (29,396) (238,429)
At 31 December 2017 (restated) 9,676,076 28,939,463 652,027 2,663,251 3,684,600 45,615,417
Additions - 1,101,677 - - 207,193 1,308,870
Disposals - - - - (27,930) (27,930)
Reclassification - - - - (12,961) (12,961)
Exchange adjustment (662,179) (1,126,041) (47,716) (123,921) (54,282) (2,014,139)
At 31 December 2018 9,013,897 28,915,099 604,311 2,539,330 3,796,620 44,869,257

Customer
contracts and IRU, software
License related customer Brand/ and other
Goodwill costs relationship Trade names intangibles Total
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000
Accumulated amortization and impairment losses
At 1 January 2017 591,484 10,257,554 658,207 1,443,288 2,012,244 14,962,777

Amortisation during the year - 1,551,250 1,019 87,974 306,447 1,946,690

Reversal of impairment - - - - (8,265) (8,265)
Disposals - - - - (779) (779)
Reclassification - - - - 12,629 12,629
Related to asset held for sale - - - - (20,075) (20,075)
Exchange adjustment (12,638) (30,837) (8,565) (5,227) (25,276) (82,543)
At 31 December 2017 (restated) 578,846 11,777,967 650,661 1,526,035 2,276,925 16,810,434
Amortisation during the year - 1,612,513 1,024 83,893 312,570 2,010,000
Disposals - - - - (24,890) (24,890)
Reclassification - - - - (13,098) (13,098)
Impairment 9,760 - - - 9,760
Exchange adjustment (45,656) (377,506) (47,714) (63,816) (44,943) (579,635)
At 31 December 2018 542,950 13,012,974 603,971 1,546,112 2,506,564 18,212,571
Carrying value
At 31 December 2018 8,470,947 15,902,125 340 993,218 1,290,056 26,656,686
At 31 December 2017 9,097,230 17,161,496 1,366 1,137,216 1,407,675 28,804,983
Ooredoo Annual Report 2018
129
130 Ooredoo Annual Report 2018
131

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

13. INTANGIBLE ASSETS AND GOODWILL (continued) 13. INTANGIBLE ASSETS AND GOODWILL (continued)
Key Assumptions used in value in use calculations (continued)
i. Impairment testing of goodwill
Cash generating units Discount rate Terminal value growth rate
Goodwill acquired through business combinations has been allocated to individual cash generating units (CGUs) for impairment
testing as follows: 2018 2017 2018 2017
Ooredoo Kuwait 8.8% 8.8% 2.75% 2.75%
Carrying Carrying
Ooredoo Algeria 12.9% 10.7% 2.75% 2.75%
value value
2018 2017 Ooredoo Tunisie 10.5% 10.0% 2.75% 2.75%
Cash generating units QR.’000 QR.’000
Indosat Ooredoo 11.0% 10.5% 2.75% 2.75%
Ooredoo Kuwait 586,767 589,583
Asiacell, Iraq 12.8% 14.3% 2.75% 2.75%
Ooredoo Algeria 2,122,379 2,132,565
Ooredoo Myanmar 16.2% 16.1% 4.00% 4.00%
Ooredoo Tunisie 2,331,651 2,747,512
Ooredoo Maldives 14.6% 16.3% 2.75% 2.75%
Indosat Ooredoo 3,035,030 3,222,548
Asiacell, Iraq 353,408 353,408 Management considers that changes to the discount rate could cause the carrying value of the following CGUs to exceed their
recoverable amount. If the discount rate is increased by the percentages as mentioned below, the recoverable amount equals the
Ooredoo Maldives 29,689 29,831 carrying value:
Others 12,023 21,783
8,470,947 9,097,230 2018 2017
Ooredoo Kuwait 1.8% 2.3%
Goodwill was tested for impairment as at 31 December 2018. The recoverable amount of the CGUs was determined based on value
in use calculated using cash flows projections by management covering a period of ten years. Ooredoo Algeria 3.2% 5.7%
Ooredoo Tunisie 1.0% 1.1%
Key Assumptions used in value in use calculations
Indosat Ooredoo 3.2% 6.4%
Key Assumptions Asiacell, Iraq 10.5% 3.0%
The principal assumptions used in the projections relate to the number of subscribers, roaming revenue, average revenue per
user, operating costs, capital expenditure, taxes and EBITDA. The assumptions are constructed based upon historic experience and Ooredoo Myanmar 1.5% 4.9%
management’s best estimate of future trends and performance and take into account anticipated efficiency improvements over the
Ooredoo Maldives 64.4% 126.4%
forecasted period.

Discount rates 14 INVESTMENT PROPERTY

Discount rates reflect management’s estimate of the risks specific to each unit. Discount rates are based on a weighted average cost
2018 2017
of capital for each CGU. In determining the appropriate discount rates for each unit, the yield local market ten-year government
QR.’000 QR.’000
bond is used, where available. If unavailable, yield on a ten-year US Treasury bond and specific risk factors for each country has been
taken into consideration. Cost
At 1 January 151,087 151,087
Terminal value growth rate estimates
For the periods beyond that covered by the projections, long-term growth rates are based on management’s best estimates of the At 31 December 151,087 151,087
growth rates relevant to telecommunications industry in the particular country.
Accumulated depreciation
Budgeted EBITDA growth rate At 1 January 90,157 82,029
Budgeted EBITDA was based on expectations of future outcomes taking into account past experience, adjusted for the anticipated
revenue growth. Revenue growth was projected taking into account the average growth levels experienced over the past years and Provided during the year 8,128 8,128
the estimated subscribers and price growth for the forecasted period. At 31 December 98,285 90,157

Budgeted Capex Carrying value

The cash flow forecasts for budgeted capital expenditure are based on past experience and include the ongoing capital expenditure
At 31 December 52,802 60,930
required to continue rolling out networks in emerging markets, providing enhanced voice and data products and services, and
meeting the population coverage requirements of certain licenses of the Group. Capital expenditure includes cash outflows for the
Investment property comprises of the portion of the Group’s head quarter building rented to a related party.
purchase of property, plant and equipment and other intangible assets
There was a valuation exercise performed by an external valuer, and management believe that the fair value has not significantly
changed since the latest valuation. The fair value of Investment property is approximately QR. 77,000 thousand (2017: QR.
77,000 thousand), which is higher than the carrying value at reporting dates. The fair value was determined based on the market
comparable approach that reflects recent transaction prices for similar properties/other methods. The fair value hierarchy for
valuation of investment property is categorized under level 2.
132 Ooredoo Annual Report 2018
133

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

15. INVESTMENT IN ASSOCIATES AND JOINT VENTURES 15. INVESTMENT IN ASSOCIATES AND JOINT VENTURES (continued)
The Group has the following investment in associates and joint ventures:
The following table is the summarised financial information of the Group’s investments in the associates and joint ventures:

Associate / Joint Venture Country of Effective Joint Associates Joint Total

companies Principal activity Classification incorporation ownership Associates ventures Total 2017 ventures 2017
2018 2017 2018 2018 2018 (Restated) 2017 (Restated)
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000
Managed Service Provider Group’s share of associates and joint ventures statement of financial position:
Navlink, Inc., a Delaware United States of
delivering technology solutions in Associate 38% 38%
Corporation America
the enterprise data market Current assets 1,070,163 58,993 1,129,156 913,629 96,779 1,010,408

Asia Mobile Holdings Pte Ltd Non-current assets 2,897,442 68,918 2,966,360 2,487,972 251,456 2,739,428
Holding company Associate Singapore 25% 25%
(“AMH”)
Current liabilities (731,827) (4,460) (736,287) (749,183) (43,759) (792,942)
Satellite based telecommunication
PT Multi Media Asia Indonesia Associate Indonesia 17% 17% Non-current liabilities (2,178,034) - (2,178,034) (1,995,992) (30,098) (2,026,090)
services
Net assets 1,057,744 123,451 1,181,195 656,426 274,378 930,804
MEEZA QSTP LLC Information technology services Associate Qatar 20% 20%
Goodwill 965,751 - 965,751 985,047 203,190 1,188,237

PT Citra Bakti, Indonesia Product certification and testing Associate Indonesia 9% 9% Carrying amount of the investments 2,023,495 123,451 2,146,946 1,641,473 477,568 2,119,041
Group’s share of associates’ and joint
Titan Bull Holdings Limited Holding Company Associate Cayman Islands 18% 20% ventures’ revenues and results:
Monetix SPA Electronic Banking Associate Algeria 19% 19% Revenues 1,772,158 1,764 1,773,922 1,665,856 45,766 1,711,622

SB ISAT Fund, L.P. Investment Management Associate Cayman Islands 28% 28% Share of results – net of tax 231,380 257,357 488,737 105,197 (150,838) (45,641)

Satellite Telecommunication
PT Palapa Satelit Nusa Sejahtera Associate Indonesia 23% 23% 15.1. The significant balance of investment in associates relates to Asia Mobile Holdings Pte Ltd. (“AMH”) and PT Artajasa Pembayaran
Operator and Services
Elektronis. During the year, management has performed impairment assessment of AMH based on the indicators and currently
Mountain Indosat Company Ltd Business Incubation and Digital available information. The Group has applied value-in-use approach to determine the recoverable amount of the investment in
Associate Hong Kong 29% 29% AMH and no impairment was noted. The Group has used WACC of 7.14%, with a WACC sensitivity of 0.37% and terminal growth rate
(“MCL”) Services
of 2.29% in their business model. Management has incorporated their effective share in AMH, based on the estimated unaudited
PT Satera Manajemen Persada Telecommunication Services and financial information of AMH, in the Group’s consolidated financial statements.
Associate Indonesia 32% 32%
Indonesia Equipment Provider
15.2. One of the Group’s joint venture, Asia Internet Holdings S.a.r.l., entered into a Sale and Purchase agreement with a third party
PT Artajasa Pembayaran Elektronis Electronic payment services Associate Indonesia 26% - for disposal of one of its major subsidiary. The disposal was finalized on 8 May 2018 and has resulted in a gain.

Telecommunication Services and 15.3. Based on the investment agreement, the Group has committed to fund Asia Internet Holding (AIH), a joint venture with Rocket
Sadeem Telecom Joint venture Qatar 50% 50% Internet. In 2017, the Group has funded QR. 378,838 thousand, however in 2018 the Group has reversed the remaining payable
Investment
amount of QR. 108,180 thousand committed on the agreement, since the contractual obligation to pay the deferred consideration
Asia Internet Holding S.a r.l., Holding Company Joint venture Luxembourg 50% 50% has been waived.

Intaleq Technology Consulting & Technical services for Sports 15.4. During the year the Group recognised an impairment loss allowance of QR. 143,928 thousand, impairing the related goodwill,
Joint venture Qatar 55% -
Services W.L.L venues and events recorded on acquisition of Asia Internet Holding.

15.5. One of the Group’s associate, Titan Bull Holdings entered into a Sale and Purchase agreement with a third party for disposal of
its subsidiary. The disposal was finalized on 8 August 2018 and has resulted in a gain on disposal.

15.6. As a result of loss of control of one of its subsidiaries, the Group has accounted PT Artajasa Pembayaran Elektronis as an
investment in associate during the year.
134 Ooredoo Annual Report 2018
135

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

16. FINANCIAL ASSETS – EQUITY INSTRUMENTS 18. INCOME TAX (continued)

2018 2017
QR.’000 QR.’000 Income tax represents amounts recognised by subsidiary companies. The major components of income tax expense for the years
Investment in equity instrument designated at FVTOCI (i) 855,195 - 2018 and 2017 are:

Available for sale investments (ii) - 812,933 The adjustments are based on the current understanding of the existing laws, regulations and practices of each subsidiaries’
Financial assets measured at FVTPL 92,042 - jurisdiction. In view of the operations of the Group being subject to various tax jurisdictions and regulations, it is not practical to
provide a detailed reconciliation between accounting and taxable profits together with the details of the effective tax rates. As a
947,237 812,933 result, the reconciliation includes only the identifiable major reconciling items. The Group tax reconciliation is presented as follows:

The respective fair value of these investments is disclosed in note 37. 2017
2018 (Restated)
i) The Group have elected to designate these investments in equity instruments as at FVTOCI as these investments are held QR.’000 QR.’000
for medium to long-term strategic purposes and not held for trading. Further, management believe that recognising short- Profit before tax 2,277,691 3,062,309
term fluctuations in these investments’ fair value in consolidated statement of profit or loss would not be consistent with the
Group’s strategy. Profit of parent and subsidiaries not subject to corporate income tax (1,738,481) (1,057,687)
Profit of parent and subsidiaries subject to corporate income tax 539,210 2,004,622
ii) At 31 December 2017, certain unquoted equity investments amounting to QR. 33,847 thousand were carried at cost less
impairments due to non-availability of quoted market prices or other reliable measures of their fair value. Add:
Allowances, accruals and other temporary differences 880,629 491,095
iii) The Group has recorded an impairment loss of QR. nil (2017: QR. 4,772 thousand) on certain equity investments. In the opinion
of management, based on the currently available information, there is no evidence of further impairment in the value of these Expenses and income that are not subject to corporate tax 1,086,893 997,144
investments.
Depreciation – net of accounting and tax 200,994 181,248
17. OTHER NON-CURRENT ASSETS
2017 Taxable profit of subsidiaries and associates that are
2018 2,707,726 3,674,109
(Restated) subject to corporate income tax
QR.’000
QR.’000
Income tax charge at the effective income tax rate of 18% (2017: 19%) 490,673 714,078
Prepaid rentals 304,973 321,087
Other long term receivables 461,224 283,051
Others 92,797 97,693 Consolidated statement of Consolidated statement of
financial position profit or loss
858,994 701,831
2017 2017
2018 (Restated) 2018 (Restated)
18. INCOME TAX QR.’000 QR.’000 QR.’000 QR.’000
Income tax represents amounts recognised by subsidiary companies. The major components of income tax expense for the years Accelerated depreciation for tax purposes 54,497 (25,394) 87,792 9,556
2018 and 2017 are:
2017 Losses available to offset against future taxable income 216,119 (92) 241,450 (139)
2018 (Restated) Allowances, accruals and other temporary differences 270,295 366,802 (113,988) 83,926
QR.’000 QR.’000
Deferred tax origination on purchase price allocation (329,279) (374,282) 23,561 25,040
Current income tax
Deferred tax (liability) / deferred tax income – net 211,632 (32,966) 238,815 118,383
Current income tax charge 490,673 714,078
Adjustments in respect of previous years’ income tax 233,103 177,953
Reflected in the consolidated statement of financial position as follows:
Deferred income tax 2017
Relating to origination and reversal of temporary differences (238,815) (118,383) 2018 (Restated)
QR.’000 QR.’000
Income tax included in the consolidated statement of profit or loss 484,961 773,648 Deferred tax asset 569,892 341,648

The Parent company is not subject to income tax in the State of Qatar. The tax rate applicable to the taxable subsidiaries is in the Deferred tax liability (358,260) (374,614)
range of 10% to 36% (2017: 10% to 35%). For the purpose of determining the taxable results for the year, the accounting profit of 211,632 (32,966)
the companies were adjusted for tax purposes. Adjustments for tax purposes include items relating to both income and expense
allowed in accordance with respective tax laws of subsidiaries.
136 Ooredoo Annual Report 2018
137

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

18. INCOME TAX (continued) 21. TRADE AND OTHER RECEIVABLES

2017
Movement of deferred tax liability – net 2018 (Restated)
2017 QR.’000 QR.’000
2018 (Restated)
QR.’000 QR.’000 Trade receivables – net of impairment allowances 3,128,879 3,499,848
At 1 January 32,966 152,253 Other receivables and prepayments – net of impairment allowances 4,000,871 3,464,480
Initial adoption of IFRS 15 (23,345) - Unbilled subscribers revenue 518,543 603,026
Initial adoption of IFRS 9 (2,759) - Amounts due from international carriers – net 584,673 344,780
Deferred tax income during the year (238,815) (118,383) Positive fair value of derivatives contracts 264 241
Deferred tax on other comprehensive income 18,018 (7,635) Net prepaid pension costs 313 226
Related to asset held for sale - (2,283) 8,233,543 7,912,601
Exchange adjustment 2,303 9,014
At 31 December 2018, trade receivables amounting to QR. 1,688,461 thousand (2017: QR. 1,502,363 thousand) were impaired and
At 31 December (211,632) 32,966 fully provided for.

19. CONTRACT COSTS AND ASSETS Movement in the allowance for impairment of trade receivables is as follows:

31 December 2018 1 January 2018 2018 2017

QR.’000 QR.’000
QR. ‘000 QR.’000
At 1 January 1,502,363 1,199,188
Current 312,070 308,159
Adjustment on application of IFRS 9 56,831 -
Non-Current 151,806 70,543
Charge for the year 342,590 351,339
463,876 378,702
Amounts written off (70,015) (41,202)
Contract costs and assets primary relates to the Group’s right on consideration for goods and services provided but not billed at the Amounts recovered (39,901) -
reporting date. The Group has determined that contract costs and assets are to be recognised at the performance obligation level
and not at the contract level. Related to asset held for sale - (135)
Exchange adjustment (103,407) (6,827)
20. INVENTORIES
At 31 December 1,688,461 1,502,363
2018 2017
QR.’000 QR.’000 At 31 December, the ageing of unimpaired trade receivables is as follows:
Subscribers’ equipment 429,323 436,209
Past due, not impaired
Other equipment 238,876 266,950 Neither
past due nor 30-60 60-90 90-360 > 360
Cables and transmission equipment 81,131 84,657
Total impaired Days Days Days Days
749,330 787,816 QR. ‘000 QR. ‘000 QR. ‘000 QR. ‘000 QR. ‘000 QR. ‘000
2018 3,128,879 1,092,456 321,716 174,670 621,073 918,964
Less: Provision for obsolete and slow moving inventories (106,269) (108,193)
2017 3,499,848 1,285,741 437,803 312,967 952,556 510,781
643,061 679,623
Unimpaired receivables are expected on the basis of past experience to be fully recoverable. It is not the practice of the Group to
Inventories consumed are recognised as expense and included under operating expenses. These amounted to QR. 1,890,677
obtain collateral over receivables and the vast majorities are therefore, unsecured.
thousand (2017: QR. 2,260,853 thousand).
The average credit period on sales of goods and rendering of services varies from 30 to 90 days depending on the type of customer
Movement in the provision for obsolete and slow moving inventories is as follows:
and local market conditions. No interest is charged on outstanding trade receivables.
2018 2017
QR.’000 QR.’000 The Group always measures the loss allowance for trade receivables at an amount equal to lifetime ECL using the simplified
approach. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default
At 1 January 108,193 129,121 experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the
debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well
Provided during the year 15,848 8,794
as the forecast direction of conditions at the reporting date. The Group has recognised a loss allowance of QR. 342,590 thousand
Amounts reversed (written off) (15,400) (28,699) against all receivables.
Exchange adjustment (2,372) (1,023)
At 31 December 106,269 108,193
138 Ooredoo Annual Report 2018
139

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

21. TRADE AND OTHER RECEIVABLES (continued) 22. CASH AND CASH EQUIVALENTS (continued)

The following table details the risk profile of trade receivables based on the Group’s provision matrix. As the Group’s historical credit (i) Bank balances and cash equivalents include deposits maturing after three months amounting to QR. 5,625,000 thousand (2017:
loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance QR. 7,513,000 thousand). The Group is of the opinion that these deposits are readily convertible to cash and are held to meet
based on past due status is not further distinguished between the Group’s different customer base. short-term commitments. The Group recorded QR. 8,704 thousand (2017: nil) provision for impairment.

Trade receivables – days past due (ii) Deposits are made for varying periods depending on the immediate cash requirements of the Group and earn interest on the
Over 365 respective deposit rates ranging from 0.50% to 12.52% (2017: 0.50% to 9.50%).
30 – 60 days 60-90 days 90-360 days Total
31 December 2018 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 (iii) Deposits with maturity of more than three months were reclassified from bank balances and cash.
Expected credit loss rate 1% 11% 11% 6%
(iv) On 29 June 2016, Asiacell received a letter from one of its banks notifying that cash in the amount of QR. 173,971 thousand was
Estimated total gross carrying amount at default 978,963 456,684 1,744,584 1,637,109 4,817,340 transferred from current account to restricted cash. This is based on the Communications and Media Commission of Iraq letter
Lifetime ECL 6,900 50,800 192,102 92,788 342,590 dated 4 February 2016.

Also in 2016, Asiacell has transferred its cash from its current bank account to restricted account amounting QR. 104,345
Trade receivables – days past due thousand. Asiacell is in the process of reaching a settlement agreement with the bank. The remaining balance pertains to
certain restricted bank deposits maintained for dividend payments and the restricted cash related to the derivative financial
Over 365
30 – 60 days 60-90 days 90-360 days Total instruments between the Group and a local bank.
1 January 2018 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000
(v) Certain cash and cash equivalents are used as collaterals to secure the Group’s obligations.
Expected credit loss rate 1% 1% 3% 0%
Estimated total gross carrying amount at default 1,311,150 460,505 1,548,554 1,682,002 5,002,211 Non-cash transactions
• The Group availed non-cash discount on the purchases of property, plant and equipment from a supplier amounting to QR.
Lifetime ECL 7,655 4,677 45,654 (1,155) 56,831
72.4 million.
• Gain on loss of control of a subsidiary amounting to QR. 236.0 million, which pertains to fair value gain as a result of
The below table shows the collective assessment of movement in lifetime ECL that has been recognised for trade and other deconsolidation.
receivables in accordance with the simplified approach set out in IFRS 9.
Total
QR.’000 Balances with banks are assessed to have low credit risk of default since these banks are highly regulated by the central banks of
Balance as at 1 January 2018 under IAS 39 1,502,363 the respective countries. Accordingly, the management of the Group estimates the loss allowance on balances with banks at the end
of the reporting period at an amount equal to 12 month ECL. None of the balances with banks at the end of the reporting period
Adjustment upon application of IFRS 9 56,831 are past due, and taking into account the historical default experience and the current credit ratings of the bank, the management
Balance as at 1 January 2018 – As restated 1,559,194 of the Group have assessed that there is impairment and have recorded QR. 8,704 thousand (2017: nil) as loss allowances on these
balances.
Net remeasurement of loss allowance 342,590
Amounts written off (70,015) 23. SHARE CAPITAL
2018 2017
Amounts recovered (39,901)
No of shares No of shares
Foreign exchange gains and losses (103,407) (000) QR.’000 (000) QR.’000
Balance as at 31 December 2018 1,688,461 Authorised
Ordinary shares of QR. 10 each
22. CASH AND CASH EQUIVALENTS
At 1 January / 31 December 500,000 5,000,000 500,000 5,000,000
Cash and cash equivalents included in the consolidated statement of cash flows comprise the following items:

2018 2017
Note Issued and fully paid up
QR.’000 QR.’000
Bank balances and cash – net of impairment allowance (i),(ii) 17,493,273 18,390,694 Ordinary shares of QR. 10 each
Bank overdraft (69,388) - At 1 January / 31 December 320,320 3,203,200 320,320 3,203,200
17,423,885 18,390,694
24. RESERVES
Less: a) Legal reserve
Deposits with maturity of more than three months (iii) (99,134) (519,256) In accordance with Qatar Commercial Companies Law No. 11 of 2015 and the Company’s Articles of Association, 10% of the profit
of the Company for the year should be transferred to the legal reserve until such reserves reach 50% of the issued share capital.
Restricted deposits (iv) (791,609) (843,258) During 2008, an amount of QR. 5,494,137 thousand, being the net share premium amount arising out of the rights issue was
transferred to legal reserve. During 2012, an amount of QR. 5,940,145 thousand, being the net share premium amount arising out
16,533,142 17,028,180
of the rights issue was transferred to legal reserve.
Related to assets held for sale - 67,422
The reserve is not available for distribution except in the circumstances stipulated in the Qatar Commercial Companies Law and
Cash and cash equivalents as per consolidated statement of cash flows at
16,533,142 17,095,602 the Company’s Articles of Association.
31 December
140 Ooredoo Annual Report 2018
141

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

24. RESERVES (continued) 25. COMPONENTS OF OTHER COMPREHENSIVE INCOME (continued)

2017
b) Fair value reserve 2018 (Restated)
The fair value reserve comprises the cumulative net change in the fair value of financial assets - equity instruments at FVTOCI QR.’000 QR.’000
(2017: available-for-sale investments) and effective portion of qualifying cash flow hedges.
Items that will not be reclassified subsequently to profit or loss
2018 2017 Fair value reserve
QR.’000 QR.’000
Changes in fair value of equity investments at fair value through other comprehensive
Fair value reserve of financial assets - equity instruments at FVTOCI (2017: available for sale 29,723 -
593,579 514,323 income
investments)
29,723 -
Cash flow hedge reserve 12,720 8,550
Employees’ benefit reserve
606,299 522,873
Net movement in employee benefit reserve 72,258 (30,717)
c) Employees’ benefit reserve Deferred tax effect (18,014) 7,671
Employment benefit reserve is created on account of adoption of revised IAS – 19 “Employee benefits”. Employee benefit reserve
comprises actuarial gains / (losses) pertaining to defined benefit plans. 54,244 (23,046)
Other comprehensive loss for the year – net of tax (1,623,819) (2,787)
d) Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of
foreign operations. 26. DEFERRED INCOME
Deferred income pertains to unearned revenue from services that will be provided in future periods. It primarily includes revenue
e) Other statutory reserves from the unused and unutilized portion of prepaid cards sold, value of loyalty points not yet redeemed and advance billing to
In accordance with the statutory regulations of the various subsidiaries, a share of their respective annual profits should be customers. The sale of prepaid cards is deferred until such time as the customer uses the airtime, or the credit expires.
transferred to a non-distributable statutory reserve.
27. LOANS AND BORROWINGS
25. COMPONENTS OF OTHER COMPREHENSIVE INCOME Presented in the consolidated statement of financial position as:
2017 2018 2017
2018 (Restated) QR.’000 QR.’000
QR.’000 QR.’000
Non-current liabilities
Items that may be reclassified subsequently to profit or loss
Available-for-sale investments Secured loan 198,349 459,218
Unsecured loan 9,068,482 11,150,383
Gain/(loss) arising during the year - 62,642
Islamic Finance 335,200 456,946
Reclassification to profit or loss - (1,295)
Bonds 18,043,377 20,785,401
Transfer to profit or loss on impairment - 4,772
Less: Deferred financing costs (165,967) (240,298)
- 66,119
27,479,441 32,611,650
Cash flow hedges
Current liabilities
Gain arising during the year 146 117
Secured loan 225,597 297,725
Deferred tax effect (4) (36)
Unsecured loan 5,684,028 1,594,315
142 81
Islamic Finance 95,158 4,637,872
Share of changes in fair value of cash flow hedges 4,081 (6,585)
Bonds 3,246,532 762,202
Foreign exchange reserve
Bank overdraft 69,388 -
Foreign exchange translation differences – foreign operations (1,712,009) (39,356)
Less: Deferred financing costs (40,783) (48,420)
(1,712,009) (39,356)
9,279,920 7,243,694
36,759,361 39,855,344
142 Ooredoo Annual Report 2018
143

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

27. LOANS AND BORROWINGS (continued) 28. EMPLOYEES’ BENEFITS

2018 2017
The deferred financing costs consist of arrangement and other related fees. Movement in deferred financing costs was as follows: QR.’000 QR.’000

2018 2017 Employees’ end of service benefits 476,252 458,035

QR.’000 QR.’000
Post-retirement health care plan 132,458 196,898
At 1 January 288,718 351,644
Cash settled share based payments 187,561 232,118
Additions during the year 12,949 8,076
Defined benefit pension plan/Labour Law No. 13/2003 93,493 120,147
Amortised during the year (note 8) (93,385) (70,888)
Other employee benefits 12,391 14,863
Exchange adjustment (1,532) (114)
Total employee benefits 902,155 1,022,061
At 31 December 206,750 288,718
Current portion of cash settled share based payments (note 29) (76,544) (133,473)

The loans and borrowings presented in the consolidated statement of financial position consist of the following: Employee benefits – non current 825,611 888,588

2018 2017
Type Currency Nominal Interest / Profit rate Year of maturity QR.’000 QR.’000 Movement in the provision for employee benefits are as follows:
2018 2017
Unsecured loan USD LIBOR plus 2.95%-5.85% On demand - Oct 23 12,285,774 11,358,216
QR.’000 QR.’000
Unsecured loan TND TMM Rate + 1.10% - 1.75% Jun 18 - Mar 21 355,203 489,283 At 1 January 1,022,061 1,099,095
Unsecured loan KWD CBK +0.39% - 0.4% Jan - Jun 19 685,219 - Provided during the year 213,291 162,785
Unsecured loan MMK 10.5% - 11% Jun - Dec 19 141,290 - Paid during the year (236,098) (272,110)
Unsecured loan IDR 2.00% - 9.5% Apr 18 - Feb 24 1,285,025 482,407 Other comprehensive (loss)/income (72,258) 30,717
Secured loan USD to LIBOR +5.25% - 5.69% 6.00% Sep 18 - Sep 24 241,979 329,897 Exchange adjustment (24,841) 1,574
Secured loan DZD 4.5% to 5.5% Jun 19 - Sep 19 177,614 427,046 At 31 December 902,155 1,022,061
Secured loan KWD 3.14% to 3.15% Jan 18 - Apr 18 - 414,792
Secured loan OMR LIBOR +2.25% Jun 18 4,353 - The details of the benefit plans operated by one of the Group’s subsidiaries are as follows:
Plan A - Post-retirement healthcare plan
Islamic Finance loan
IDR 7.00% - 11.20% Jun 18 - Jun 25 430,357 540,832 One of the subsidiaries, Indosat provides post-retirement healthcare benefits to its employees who leave after the employees fulfill
Obligation
the early retirement requirement. The immediate family of employees who have been officially registered in the records of the
Islamic Finance loan USD 3.04% Dec-18 - 4,551,877 company are also eligible to receive benefits.
Islamic Finance loan KWD 7.00% Jul-18 - 2,109
Plan B - Defined Benefit Pension Plan - Labour Law No. 13/2003
Bonds USD 3.25% - 7.88% Jun 19 - Jan 43 17,661,282 17,661,282 Indosat Ooredoo, Lintasarta and IMM also accrue benefits under Indonesian Labor Law No. 13/2003 (“Labor Law”) dated 25 March
2003. Their employees will receive the benefits under this law or the defined benefit pension plan, whichever amount is higher.
Bonds IDR 6.15% - 11.20% Jun 18 – Sept 26 3,628,627 3,886,321
Bank overdraft DZD 4.50% Jun 19 69,388 - Plan C - Defined Benefit Pension Plan
The subsidiaries, Indosat Ooredoo, Satelindo and Lintasarta provide defined benefit pension plans to their respective employees
36,966,111 40,144,062 under which pension benefits to be paid upon retirement. A state-owned life insurance company, PT Asuransi Jiwasraya (“Jiwasraya”)
Less: Deferred financing manages the plans. Pension contributions are determined by periodic actuarial calculations performed by Jiwasraya.
(206,750) (288,718)
cost
Based on the agreement, a participating employee will receive:
Total 36,759,361 39,855,344 • Expiration benefit equivalent to the cash value at the normal retirement age, or
• Death benefit not due to accident equivalent to 100% of insurance money plus cash value when the employee dies not due to
(i) Loans and borrowings are availed for general corporate purposes or specific purposes which include purchase of accident, or
telecommunication and related equipment, financing working capital requirements and repayment or refinancing of existing
borrowing facilities. Death benefit due to accident equivalent to 200% of insurance money plus cash value when the employee dies due to accident.

(ii) Secured loans and borrowings are secured against bank balances, property plant and equipment amounting to QR. 295,928
thousand (2017: QR. 318,691 thousand) and cash collateral.

(iii) Bonds are listed on London, Irish and Indonesia Stock Exchanges. Certain bonds are unconditionally and irrevocably
guaranteed by Ooredoo Q.P.S.C.

(iv) Islamic Finance includes notes issued under Sukuk Trust Programme on the Indonesia Stock Exchange.
144 Ooredoo Annual Report 2018
145

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

28. EMPLOYEES’ BENEFITS (continued) 28. EMPLOYEES’ BENEFITS (continued)

Actuarial assumptions Plan assets comprises of time deposits, debt securities, long-term investment in shares of stock and property as follows:

The actuarial valuations were prepared by an independent actuary, using the projected-unit-credit method, the following were the 2018 2017
principal actuarial assumptions at the reporting date.
Investments in:
2018 2017 Shares of stocks and properties 29.53% 29.53%
Plan A Plan B Plan C Plan A Plan B Plan C Mutual fund 46.94% 46.94%
Annual discount rate 8.5% 8.25% - 8.5% 8.0% -8.5% 7.5% 7.0% - 7.25% 8.0% -8.5% Time deposits 10.38% 10.38%

Ultimate cost trend rate 6.0% - - 6.0% - - Debt securities 11.87% 11.87%

Next year trend rate 10.0% - - 10.0% - - Others 1.28% 1.28%

Period to reach ultimate cost trend Sensitivity analysis on defined benefit obligation
8 Years - - 8 Years - -
rate
Quantitative sensitivity analysis for each 1% change in the following significant assumptions as of 31 December 2018 are as follows:
Increase in compensation - 6.5% 3.0% - 9.0% - 6.5% 3.0% - 9.0%
Impact of change in assumptions to defined benefit obligation
Mortality rate - - TMI 2011 - - TMI 2011
Increase Decrease
Pension benefit cost
Movement in net defined benefit (asset) / liability
Discount rate Decrease by 5.49% - 9.82% Increase by 6.00% - 11.39%
The following table shows the reconciliation from the opening balances to the closing balances for net defined benefit liability (asset) Obligation under Labor Law
and its components.
Discount rate Decrease by 8.99% - 11.58% Increase by 10.34% - 13.65%

2018 2017 Post-retirement healthcare benefit

Discount rate Decrease by 13.92% Increase by 17.73%
Plan A Plan B Plan C Plan A Plan B Plan C
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 Medical cost trend Increase by 5.18% Decrease by 5.63%
At 1 January 201,714 122,562 (14,070) 226,948 101,682 (15,457)
29. OTHER NON-CURRENT LIABILITIES
Included in profit or loss
2018 2017
Interest cost 13,882 7,207 (5,008) 19,036 8,281 (5,536) QR.’000 QR.’000
Service cost 6,052 11,870 5,876 7,508 11,229 6,285 License cost payables (i) 1,070,994 686,961

Curtailment gain (10,488) - - (68,733) - - Site restoration provision 86,013 79,575

Immediate recognition of past Finance lease liabilities (note 34) 709,569 686,046
- (10,449) 72 - (2,251) 450
service cost – vested benefit Deferred gain on finance leases 91,973 135,457
Cost of employee transfer - 46,170 - - - - Others 238,956 371,736
9,446 54,798 940 (42,189) 17,259 1,199 2,197,505 1,959,775

Included in other
comprehensive income (i) This represents amounts payable to Telecom regulators in Indonesia, Palestine and Myanmar for license charges.
Other comprehensive income (55,578) (18,820) 2,140 24,363 6,044 310
30. TRADE AND OTHER PAYABLES
Other movements 2018 2017
QR.’000 QR.’000
Contribution - - (179) - - (330)
Trade payables 3,456,452 3,131,630
Benefit payment (7,128) (54,125) - (5,475) (2,534) -
Accrued expenses 6,484,202 6,443,633
Refund - - 726 - - 189
Interest payable 375,234 371,157
Exchange adjustment (11,932) (8,262) (392) (1,933) 111 19
Profit payable on Islamic financing obligation 3,067 14,651
(19,060) (62,387) 155 (7,408) (2,423) (122) License costs payable 414,028 336,605
At 31 December 136,522 96,153 (10,835) 201,714 122,562 (14,070) Amounts due to international carriers -net 470,024 451,145
Current portion 4,064 2,660 (313) 4,816 2,415 (226) Negative fair value of derivatives 83,273 45,338
Non-current portion 132,458 93,493 (10,522) 196,898 120,147 (13,844) Finance lease liabilities (note 34) 177,969 154,462
Cash settled share based payments (note 28) 76,544 133,473
Other payables 1,789,558 2,429,925
13,330,351 13,512,019
146 Ooredoo Annual Report 2018
147

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

31. CONTRACT LIABILITIES 33. DERIVATIVE FINANCIAL INSTUMENTS (continued)

31 December 1 January 2018 Fair values
2018 QR.’000
QR.’000 2018 2017

Current 145,132 64,078 Positive Negative Positive Negative

QR.’000 QR.’000 QR.’000 QR.’000
Non-current 14,121 11,856
Cross currency swaps - - 2 134
159,253 75,934
Currency forward contracts - 9,278 - 312
Interest rate swaps - 223 - 1,049
(i) A contract liability mainly arises in respect of the Group’s customer loyalty points scheme (“loyalty points”). As these loyalty
points provide a benefit to customers that they would not receive without entering into a purchase contract, the promise to Fair value derivatives - 73,772 - 43,722
provide loyalty points to the customer is a separate performance obligation.
- 83,273 2 45,217
The following table includes revenue expected to be recognized in the future related to performance obligations that are unsatisfied
(or partially unsatisifed) at the reporting date
At 31 December 2018, the Group has several interest rates swap entered into with a view to limit its floating interest rate term loans
and currency forward contract that effectively limits change in exchange rate for a future transaction.
2019 2020 2021 Total
QR.’000 QR.’000 QR.’000 QR.’000 The table below shows the positive and negative fair values of derivative financial instruments held as cash flow hedges together
with the notional amounts:
Contract liabilities 145,132 13,351 770 159,253
Negative fair Positive fair Notional
value value Amounts
32. DIVIDEND QR.’000 QR.’000 QR.’000
Dividend paid and proposed
31 December 2018
2018 2017
QR.’000 QR.’000 Interest rate swaps - 264 104,180

Declared, accrued and paid during the year - 264 104,180

Final dividend for 2017, QR. 3.5 per share (2016 : QR. 3.5 per share) 1,121,120 1,121,120 31 December 2017
Proposed for approval at Annual General Meeting Currency forward contracts 121 - 182,075
(not recognised as a liability as at 31 December)
Final dividend for 2018, QR. 2.5 per share Interest rate swaps - 239 104,180
(2017 : QR. 3.5 per share) 800,800 1,121,120 121 239 286,255

The proposed final dividend will be submitted for formal approval at the Annual General Meeting.

33. DERIVATIVE FINANCIAL INSTUMENTS

Derivatives not designated as hedging instruments
The Group uses cross currency swap contracts, currency forward contracts and interest rate swaps to manage some of the currency
transaction exposure and interest rate exposure. These contracts are not designated as cash flow, fair value or net investment
hedges and are accounted for as derivative financial instruments:

Notional amounts
2018 2017
QR.’000 QR.’000
Cross currency swaps - 69,189
Currency forward contracts 1,636,613 70,099
Interest rate swaps 16,095 32,191
Fair value derivatives 304,856 304,567
1,957,564 476,046
148 Ooredoo Annual Report 2018
149

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

34. COMMITMENTS 35. CONTINGENT LIABILITIES (continued)

Capital expenditure commitments Litigation and claims (continued)

2018 2017 (a) Proceedings against PT Indosat Mega Media relating to misuse of radio frequencies
QR.’000 QR.’000 In early 2012, the Attorney General’s Office in Jakarta (the “AGO”) initiated corruption proceedings against PT Indosat Mega Media
(“IM2”), a 99 per cent owned subsidiary of PT Indosat Tbk., a subsidiary of the Group, for unlawful use of a radio frequency band
Estimated capital expenditure contracted for at the end of the financial reporting year but allocation that had been granted to Indosat. On 8 July 2013, the Indonesia Corruption Court imposed a fine against IM2 in a related
2,818,880 2,610,737
not provided for: case against the former President Director of IM2. Both the former President Director of IM2 and the AGO lodged appeals to the
Jakarta High Court. A written decision of the Supreme Court was received in January 2015 which confirmed that the Supreme Court
Operating lease commitments had upheld the former President Director’s of IM2 prison sentence of eight years and that the fine against IM2 of approximately USD
130 million had been reinstated.
2018 2017
QR.’000 QR.’000 On 16 March 2015, the former President Director’s of IM2 submission of judicial review was officially registered at the Corruption
Future minimum lease payments: Court. Since the Criminal Case Verdict and the Administrative Case Verdict were contradictory, BPKP (State Audit Bureau) filed on
16 March, 2015 a Judicial Review on the Administrative Case in order to annul the previous Administrative Case Verdict. Due to the
Not later than one year 509,463 481,206 BPKP’s Judicial Review, on 13 October, 2015 the Supreme Court has issued a verdict (on Administrative Case) which stated that the
BPKP audit report held by BPKP is valid.
Later than one year and not later than five years 1,884,916 1,844,125
Later than five years 1,584,387 2,146,811 On the Supreme Court’s official website, the Supreme Court on 4 November, 2015 issued a verdict (on Criminal Case) that rejected
the Judicial Review submitted by the former President Director of IM2. PT Indosat Tbk. is preparing a second judicial review for the
Total operating lease expenditure contracted for at 31 December 3,978,766 4,472,142 Criminal Case.

Finance lease commitments On 28 March 2016, the former President Director of IM2 and IM2 filed a tort lawsuit of unlawful act against Ministry of
2018 2017 Communication and IT (MOCIT) and BPKP at the Central Jakarta District Court. On 22 November 2016, the Central Jakarta District
QR.’000 QR.’000 Court dismissed the lawsuit. On 15 August 2017, an appeal was lodged with the Jakarta High Court on which gave a ruling against
MOCIT and BPKP, as stated on its official website. Further, MOCIT and BPKP filed an appeal to the Supreme Court against the ruling.
Amounts under finance leases On 24 July, 2018, the Supreme Court rejected MOCIT and BPKP’s cassation request.
Minimum lease payments
The Group has provided adequate provision for this case.
Not later than one year 253,601 229,308
(b) Tax demand notices against Asiacell
Later than one year and not later than five years 722,433 770,458 As at the reporting date, one of the Group’s subsidiaries, Asiacell Communication PJSC (“ACL”) was subject to tax demand notice
Later than five years 156,774 54,030 by the General Commission for Taxes, Iraq (the “GCT”) for the years from 2004 to 2007 for an amount of QR. 251.0 million, 2008
amounting to QR. 144 million, 2009-2010 amounting to QR. 250 million, 2011-2012 amounting to QR. 221 million, 2013-2014
1,132,808 1,053,796 amounting to QR. 237 million, 2015-2016 amounting to QR. 186 million and 2017 amounting to QR. 110 million.
Less: unearned finance income (245,270) (213,288) Asiacell raised an objection against each of these claims. The Group has set up adequate provision against these claims and
Present value of minimum lease payments 887,538 840,508 management is of the view that Asiacell has strong grounds to challenge each of these claims.

(c) Proceedings against Asiacell relating to regulatory fee

On 10 June 2014, the Communications and Media Commission (CMC) issued a letter notifying the Company that the structure of the
2018 2017 Company in relation to ownership of the shares in its capital does not fulfill the License requirements as an Iraqi Company to pay
Note QR.’000 QR.’000 15% of its gross revenue as a regulatory fee, as per license agreement.
Present value of minimum lease payments Consequently the CMC requested the Company to pay a regulatory fee of 18% of gross revenues instead of 15%. The amount
Current portion 30 177,969 154,462 requested by CMC was QR. 276 million (USD 76 million) from the period that the CMC is claiming that the Iraqi ownership had changed
until the end of first half of 2013. The Company has made an appeal against this claim. On 11 November 2014, the CMC issued a letter
Non-current portion 29 709,569 686,046 notifying the Company that they revised the claim relating to the additional 3% and that the total new amount from June 2012 to 30
887,538 840,508 June 2014 should be equal to QR. 370.7 million (USD 101.8 million). The Company has a full provision against this claim amounting to
QR. 675.9 million (USD 185.6 million). In January 2016, the Erbil Court of Cassation has issued a final decision in favor of the company.
Letters of credit 232,735 253,428
On 4 February 2016, the CMC sent a letter for restricted use of certain bank accounts of Asiacell, for CMC’s benefit. This is against a
disputed amount for which the company already has a court decision in their favor.
35. CONTINGENT LIABILITIES
In July 2014, Asiacell disputed the CMC’s decision and appealed it to the CMC Appeal Board and subsequently to the Iraqi courts on
2018 2017
the basis that Asiacell is entitled to benefit from the 3% discount in the regulatory fee as it’s an Iraqi Company with a majority Iraqi
QR.’000 QR.’000
Shareholder. The dispute progressed from the Court of First Instance to the Kurdistan Court of Cassation, which, on 27 January 2016,
Letters of guarantees 570,176 654,258 ruled in favor of Asiacell and concluded that the CMC is not entitled to apply the 18% license fee to Asiacell as it is an Iraqi company
with Iraqis owning more than 84% of its shares. Asiacell implemented the court decision at the Karadda Execution Office in Baghdad.
Claims against the Group not acknowledged as debts 6,899 2,208
In June 2017, the Iraqi Ministry of Finance raised a “third party objection” case at Erbil Court against its own decision. On 9 August
Litigation and claims 2017, the Court dismissed the objection and confirmed its past decision. After an appeal, the Cassation Court, on 17 October 2017,
The Group is from time to time a party to various legal actions and claims arising in the ordinary course of its business. The Group ruled against the Ministry of Finance and confirmed the decision in favor of Asiacell.
does not believe that the resolution of these legal actions and claims will, individually or in the aggregate, have a material adverse
effect on its financial condition or results of operations, except as noted below. The Company has a full provision, as at 31 December 2018, against this claim.
150 Ooredoo Annual Report 2018
151

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

35. CONTINGENT LIABILITIES (continued) 36. FINANCIAL RISK MANAGEMENT (continued)

(d) Proceedings against Asiacell relating to frequency spectrum fee Interest rate risk
On 10 September 2014, the Communication and Media Commission (CMC) issued a letter notifying the Company to pay frequency The Group’s financial assets and liabilities that are subject to interest rate risk comprise bank deposits, loans receivable, available-
spectrum usage fees of QR. 224.1 million (USD 61.7 million) for the period from the date frequencies were allocated to the Company for-sale debt instruments, loans payables and borrowings. The Group’s exposure to the risk of changes in market interest rates
to 31 December 2013. The Company has made an appeal against this claim. The CMC has not provided the method of calculation and relates primarily to the Group’s financial assets and liabilities with floating interest rates and fixed interest instruments maturing
the Company is disputing the basis for its calculation. within three months from the end of the financial reporting year.

In January 2015, Asiacell appealed the CMC 2014 decision to the CMC’s Appeal Board, which dismissed the CMC 2014 decision and The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. To manage
instructed to determine the spectrum fees in coordination with Asiacell and best international practices. this, the Group enters into interest rate swaps, in which the Group agrees to exchange, at specified intervals, the difference between
fixed and variable rate interest amounts calculated by reference to an agreed upon notional amount. The swaps are designated to
On 29 June 2016, CMC sent a new letter to Asiacell asking it to pay the total amount of QR. 167.5 million (USD 45.7 million) and in hedge underlying debt obligations. At 31 December 2018, after taking into the effect of interest rate swaps, approximately 60% of
response to the CMC letter, Asiacell committed itself to pay an adjusted amount and in December 2016 paid an amount QR. 163 the Group’s borrowings are at a fixed rate of interest (2017: 69%).
million (USD 44.8 million) to CMC. This proceeding is considered closed from a legal perspective.
The following table demonstrates the sensitivity of the consolidated statement of profit or loss and equity to reasonably possible
(e) Deduction disallowed in corporate income tax assessment changes in interest rates by 25 basis points, with all other variables held constant. The sensitivity of the consolidated statement of
On 20 November 2014, Indosat received an assessment letter of tax overpayment (“SKPLB”) from the DGT where, the DGT made a profit or loss and equity is the effect of the assumed changes in interest rates for one year, based on the floating rate financial assets
correction totaling QR. 84 million (having a Corporate Tax impact of QR. 21 million), which decreased the tax loss carried forward as and financial liabilities held at 31 December. The effect of decreases in interest rates is expected to be equal and opposite to the
of 31 December 2012. On 18 February 2015, Indosat submitted an objection letter to the Tax Office regarding the above correction. effect of the increases shown.
The tax objection was declined by the Tax Authority, and Indosat has filed an appeal with the Tax Court. Consolidated
Consolidated statement of
On 27 December 2013, Indosat received the assessment letter on tax underpayment (“SKPKB”) from the DGT for Indosat’s 2007 and statement of changes in
2008 corporate income tax amounting to QR. 28 million and QR. 24 million, respectively, which was paid on 24 January 2014. On 20 profit or loss equity
March 2014, Indosat submitted objection letters to the Tax Office regarding this correction on Indosat’s 2007 and 2008 corporate +25bp +25 bp
income tax, respectively. The tax objection was declined by the Tax Office and Indosat has filed an appeal with the Tax Court. QR.’000 QR.’000
At 31 December 2018
(f) Withholding tax deducted by Indosat at lower rate
On 20 November 2014, Indosat received SKPLBs from the DGT for Indosat’s 2012 income tax article 26 amounting to QR. 158 million USD LIBOR (30,963) 260
(including potential penalties). On 18 February 2015, Indosat submitted objection letters to the Tax Office regarding the correction Others (6,377) -
that was declined by the Tax Authorities and Indosat has filed an appeal with the Tax Court.

(g) Preliminary tax notification issued on Wataniya Telecom Algeria At 31 December 2017
In July 2017, the tax authorities started a tax audit covering the period from 2013 to 2016. On 24 December 2018, a final notification
USD LIBOR (28,162) 716
for the year 2013 was received by Ooredoo Algeria for QR. 72 million and a temporary tax notification for the years 2014 to 2016 for
an amount QR. 374 million. Others (2,997) -

Ooredoo Algeria has raised an objection against each of these claims. The Group has set up adequate provision against these claims Foreign currency risk
and management is of the view that Ooredoo Algeria has strong grounds to challenge each of these claims. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s
(h) Tax notification issued to Ooredoo Tunisie operating activities and the Group’s net investment in foreign subsidiaries.
In October 2017, Ooredoo Tunisie received a preliminary tax notification covering the period from 2013-2015. The total amount
claimed by Tax Authority is QR. 144 million. The Group had the following significant net exposure denominated in foreign currencies.

2018 2017
In October 2018, Ooredoo Tunisia has signed a partial agreement settlement with Tax Authorities where tax adjustment of QR. 9
QR.’000 QR.’000
million was accepted and settled and Ooredoo Tunisia has appealed against the balance amount.
Assets Assets
(Liabilities) (Liabilities)
36. FINANCIAL RISK MANAGEMENT
Objectives and policies Indonesian Rupiah (IDR) 5,004,099 5,925,697
The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, finance leases, and trade payables. Kuwaiti Dinar (KD) 16,412,642 17,459,403
The main purpose of these financial liabilities is to raise finance for the Group’s operations. The Group has various financial assets
US Dollars (USD) (2,772,382) (6,999,252)
such as trade receivables, investments and cash and short-term deposits, which arise directly from its operations.
Euro (EUR) 138,886 671,426
The Group also enters into derivative transactions, primarily interest rate swaps, cross currency swaps and forward currency contracts. Great British Pounds (GBP) (1,203) (1,297)
The purpose is to manage the interest rate and currency risks arising from the Group’s operations and its sources of finance.
Tunisian Dinar (TND) 3,045,083 3,813,592
The main risks arising from the Group’s financial instruments are market risk, credit risk, liquidity risk and operational risk. The Algerian Dinar (DZD) 1,950,716 2,143,269
Board of Directors reviews and agrees policies for managing each of these risks which are summarized below:
Iraqi Dinar (IQD) 2,596,834 2,327,077
Market risk Myanmar Kyat (MMK) 2,483,561 317,226
Market risk is the risk that changes in market prices, such as interest rates, foreign currency exchange rates and equity prices will
Maldivian Rufiyaa (MVR) 240,335 228,368
affect the Group’s profit, equity or value of its holding of financial instruments. The objective of market risk management is to
manage and control the market risk exposure within acceptable parameters, while optimizing return. Singapore Dollar (SGD) 1,505,338 1,386,083
United Arab Emirates Dirham (AED) 978,514 992,647
Others 3,217 28,716
152 Ooredoo Annual Report 2018
153

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

36. FINANCIAL RISK MANAGEMENT (continued) 36. FINANCIAL RISK MANAGEMENT (continued)
Credit risk (continued)
The following table demonstrates the sensitivity to consolidated statement of profit or loss and equity for a reasonably possible
change in the following currencies against Qatari Riyal, with all other variables held constant, of the Group’s profit due to changes in The Group provides telecommunication services to various customers. It is the Group’s policy that all customers who obtain the
the fair value of monetary assets and liabilities and the Group’s equity on account of translation of foreign subsidiaries. The effect of goods and/or services on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored
decreases in foreign exchange rates is expected to be equal and opposite to the effect of the increases shown: on an ongoing basis and the purchase of service limits are established for each customer, which are reviewed regularly based on the
level of past transactions and settlement. The Group’s maximum exposure with regard to the trade receivables net of allowance for
Effect on consolidated statement impairment as at 31 December is as follows:
of profit or loss Effect on equity 2018 2017
2018 2017 2018 2017 QR.’000 QR.’000
+ 10% + 10% + 10% + 10% Qatar 1,406,640 1,233,654
QR.’000 QR.’000 QR.’000 QR.’000
Other countries 1,722,239 2,266,194
Indonesian Rupiah (IDR) - - 500,410 592,570
3,128,879 3,499,848
Kuwaiti Dinar (KD) (2) (3) 1,641,266 1,745,943
US Dollars (USD) (317,089) (734,329) 39,851 34,404 With respect to credit risk arising from the other financial assets, the Group’s exposure arises from default of the counterparty, with
Euro (EUR) 1,599 (933) 12,290 68,076 a maximum exposure equal to the carrying amount of these instruments are as follows:

Great British Pounds (GBP) (120) (130) - - 2018 2017

QR.’000 QR.’000
Tunisian Dinar (TND) - 6,166 304,508 375,194
Bank balances (excluding cash) 17,275,955 18,168,781
Algerian Dinar (DZD) - - 195,072 214,327
Positive fair value of derivatives 264 241
Iraqi Dinar (IQD) 23,927 41,643 235,757 191,065
17,276,219 18,169,022
Myanmar Kyat (MMK) - - 248,356 31,723
Maldivian Rufiyaa (MVR) - - 24,034 22,837 The Group reduces the exposure of credit risk arising from bank balances by maintaining bank accounts in reputed banks 56%
(2017: 60%) of bank balances represents balances maintained with local banks in Qatar with a rating of at least BBB+. Credit risk
Singapore Dollar (SGD) (1) (14) 150,535 138,623 arising from derivative financial instruments is at any time, limited to those with positive fair values, as recorded on the consolidated
United Arab Emirates Dirham (AED) - - 97,851 99,265 statement of financial position. With gross settled derivatives, the Group is also exposed to settlement risk.

Equity price risk 2018 2017

The following table demonstrates the sensitivity of the fair value reserve to reasonably possible changes in quoted equity share QR.’000 QR.’000
prices, with all other variables held constant. The effect of decreases in equity prices is expected to be equal and opposite to the Amounts due from international carriers 584,673 344,780
effect of the increases shown.
Unbilled subscriber revenue 518,543 603,026
Changes in
equity indices Effect on equity 1,103,216 947,806

QR.’000
The exposure of credit risk from amounts due from international carriers is minimal as the amounts are driven by contractual
2018 arrangements. For unbilled revenues, this is automatically billed based on the customers billing cycle and thus have a very minimal
credit risk.
Abu Dhabi Stock Exchange (ADX) 10% 6
Indonesia Stock Exchange (IDX) 10% 332 Credit risk measurement
The Group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in
2017 credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the
Abu Dhabi Stock Exchange (ADX) 10% 297 company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial
recognition. It considers available reasonable and supportive forwarding-looking information. Especially the following indicators are
Indonesia Stock Exchange (IDX) 10% 215 incorporated:
• Internal credit rating;
Credit risk • External credit rating (as far as available);
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur • Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a
a financial loss. The Group’s exposure to credit risk is as indicated by the carrying amount of its assets which consist principally of significant change to the borrower’s ability to meet its obligations;
trade receivables, bank balances, financial assets at FVTOCI, financial assets at FVTPL and loans receivable and positive fair value of • Actual or expected significant changes in the operating results of the borrower;
derivatives. • Significant increases in credit risk on other financial instruments of the same borrower;
154 Ooredoo Annual Report 2018
155

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

36. FINANCIAL RISK MANAGEMENT (continued) 36. FINANCIAL RISK MANAGEMENT (continued)

Credit risk measurement (continued) Liquidity risk

- Significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit Liquidity risk is the risk that the Group will not be able to meet financial obligations as they fall due. The Group’s approach to
enhancements; and managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due,
- Significant changes in the expected performance and behavior of the borrower, including changes in the payment status of under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The
borrowers in the group and changes in the operating results of the borrower. Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of the Group’s own reserves
and bank facilities. The Group’s terms of sales require amounts to be paid within 30 to 90 days from the invoice date. The table below
Macroeconomic information (such as market interest rates or growth rates) is incorporated as part of the internal rating model. summarizes the maturity profile of the Group’s financial liabilities at 31 December based on contractual undiscounted payments:
Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30-90 days, depending on
the type of customer and local market conditions, past due in making a contractual payment.
On demand Less than 1 year 1 to 2 years 2 to 5 years > 5 years Total
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. As At 31 December 2018
at 31 December 2018, the Group’s maximum exposure to credit risk without taking into account any collateral held or other credit
Loans and borrowings 69,388 10,868,409 5,364,455 16,390,244 12,052,723 44,745,219
enhancements, which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties and
financial guarantees provided by the Group arises from the carrying amount of the respective recognised financial assets as stated Trade payables - 3,456,452 - - - 3,456,452
in the consolidated statement of financial position.
License costs payable - 443,125 426,036 468,683 706,954 2,044,798
Credit risk grades Finance lease liabilities - 253,601 230,982 491,450 156,775 1,132,808
Credit risk grades are defined using qualitative and quantitative factors that are indicative of risk of default. These factors vary
depending on the nature of the exposure and the type of borrower. Exposures are subject to on-going monitoring, which may result Other financial liabilities - 629,841 197,030 - - 826,871
in an exposure being moved to a different credit risk grade. 69,388 15,651,428 6,218,503 17,350,377 12,916,452 52,206,148

The tables below detail the credit quality of the Group’s financial assets, contract assets and financial guarantee contracts, as well as
the Group’s maximum exposure to credit risk by credit risk rating grades: Less than 1
On demand 1 to 2 years 2 to 5 years > 5 years Total
Gross year
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000
carrying Loss Net carrying QR.’000
External Internal 12-month or amount allowance amount At 31 December 2017
31 December 2018 credit rating credit rating lifetime ECL QR.’000 QR.’000 QR.’000
Loans and borrowings - 9,055,005 9,582,496 14,765,075 15,481,354 48,883,930
Cash and bank balances Caa1 – Aa1 N/A 12-month ECL 17,501,977 (8,704) 17,493,273
Trade payables - 3,131,630 - - - 3,131,630
Lifetime ECL
Trade and other (simplified License costs payable - 351,816 281,146 268,775 399,067 1,300,804
receivables (i) N/A Note (i) approach) 4,817,340 (1,688,461) 3,128,879
Finance lease liabilities - 229,308 215,790 554,668 54,030 1,053,796

(i) For trade and other receivables, the Group has applied the simplified approach in IFRS 9 to measure the loss allowance at Other financial liabilities - 629,956 178,220 - - 808,176
lifetime ECL. The Group determines the expected credit losses on these items by using a provision matrix, estimated based - 13,397,715 10,257,652 15,588,518 15,934,451 55,178,336
on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect current
conditions and estimates of future economic conditions. Accordingly, the credit risk profile of these assets is presented based
on their past due status in terms of the provision matrix. Note 21 includes further details on the loss allowance for these assets
respectively.

The carrying amount of the Group’s financial assets at FVTPL and FVTOCI, as disclosed in note 16, best represents their respective
maximum exposure to credit risk. The Group holds no collateral over any of these balances.
156 Ooredoo Annual Report 2018
157

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

36. FINANCIAL RISK MANAGEMENT (continued) 37. FAIR VALUES OF FINANCIAL INSTRUMENTS (continued)

Capital management The following methods and assumptions were used to estimate the fair values.
The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to • Cash and short-term deposits, trade receivables, trade payables, and other current liabilities approximate their carrying
shareholders through the optimization of the debt and equity balance. The Group makes adjustments to its capital structure, in light amounts largely due to the short-term maturities of these instruments.
of changes in economic and business conditions. To maintain or adjust the capital structure, the Group may adjust the dividend • Long-term fixed-rate and variable-rate receivables are evaluated by the Group based on parameters such as interest rates,
payment to shareholders, or issue new shares. No changes were made in the objectives, policies or processes during the year ended specific country risk factors, and individual creditworthiness of the customer and the risk characteristics of the financed project.
31 December 2018 and 31 December 2017. Based on this evaluation, allowances are taken to account for the expected losses of these receivables. At the end of the
reporting period, the carrying amounts of such receivables, net of allowances, approximate their fair values.
Capital includes share capital, legal reserve, other statutory reserves and retained earnings and is measured at QR. 28,177,687
• Fair value of quoted investments is based on price quotations at the end of the reporting period. The fair value of loans from
thousand at 31 December 2018 (2017: QR. 29,585,110 thousand).
banks and other financial debts, as well as other non-current financial liabilities is estimated by discounting future cash flows
using rates applicable for similar risks and maturity profiles. Fair values of unquoted financial assets are estimated using
The Group’s management reviews the capital structure of the Group on a semi-annual basis. As part of this review, the committee
appropriate valuation techniques.
considers the cost of capital and the risks associated with each class of capital. The gearing ratio as at 31 December 2018 is 68%
(2017: 73%). • The Group enters into derivative financial instruments with various counterparties, principally financial institutions with
investment grade credit ratings. Derivatives valued using valuation techniques with market observable inputs are mainly
Gearing ratio interest rate swaps, foreign exchange forward, contracts for differences and currency swaps. The most frequently applied
The gearing ratio at year end was as follows: valuation techniques include forward pricing and swap models using present value calculations. The models incorporate
various inputs including the credit quality of counter parties, foreign exchange spot and forward rates and interest rate curves.
2018 2017
QR.’000 QR.’000 Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique.
Debt (i) 36,759,361 39,855,344 Level 1: Quoted prices (unadjusted) prices in active markets for identical assets or liabilities that the Group can access at the
measurement date
Cash and bank balances (17,493,273) (18,390,694)
Level 2: Inputs other than quoted prices included within level 1 that are observable for the assets of liability, either directly or
Net debt 19,266,088 21,464,650 indirectly
Equity (ii) 28,177,687 29,585,110 Level 3: Unobservable inputs for the asset or liability
The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities at 31 December 2018 and 31
Net debt to equity ratio 68% 73%
December 2017:

31 December 2018 Level 1 Level 2 Level 3

(i) Debt is the long term debt obtained as, as detailed in note 27.
QR.’000 QR.’000 QR.’000 QR.’000
(ii) Equity includes all capital and reserves of the Group that are managed as capital.
Assets:

37. FAIR VALUES OF FINANCIAL INSTRUMENTS Financial assets measured at fair value:
Fair values FVTOCI 855,195 - 236,894 618,301
Set out below is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments that are carried in
the consolidated financial statements: FVTPL 92,042 3,377 88,662 3
Derivative financial instruments 264 - 264 -
Carrying amounts Fair values
Other assets for which fair value is disclosed
2018 2017 2018 2017
QR.’000 QR.’000 QR.’000 QR.’000 Trade and other receivables 4,232,095 - - 4,232,095
Financial assets Bank balances and cash 17,493,273 - - 17,493,273
Financial assets – equity instruments (2017: available- 22,672,869 3,377 325,820 22,343,672
947,237 812,933 947,237 812,933
for-sale investments)
Liabilities:
Trade and other receivables 4,232,359 4,447,895 4,232,359 4,447,895
Other financial liabilities measured at fair value
Bank balances and cash 17,493,273 18,390,694 17,493,273 18,390,694
Derivative financial instruments 83,273 - 83,273 -
Financial liabilities
Cash settled share-based payments 187,561 - 187,561 -
Loans and borrowings 36,759,361 39,855,344 36,825,982 40,936,370
Other financial liability for which fair
Other non-current liabilities 1,070,994 686,961 1,070,994 686,961
value is disclosed
Finance lease liabilities 887,538 840,508 887,538 840,508 Loans and borrowings 36,825,982 21,693,684 15,132,298 -
Trade and other payables 6,668,180 6,913,924 6,668,180 6,913,924 37,096,816 21,693,684 15,403,132 -
Income tax payable 1,550,803 1,321,635 1,550,803 1,321,635
158 Ooredoo Annual Report 2018
159

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

37. FAIR VALUES OF FINANCIAL INSTRUMENTS (continued) 38. RELATED PARTY DISCLOSURE (continued)
31 December 2017 Level 1 Level 2 Level 3
QR.’000 QR.’000 QR.’000 QR.’000 b) Transactions with Directors and other key management personnel
Key management personnel comprise the Board of Directors and key members of management having authority and responsibility
Assets:
of planning, directing and controlling the activities of the Group.
Financial assets measured at fair value:
Available-for-sale investments 779,086 5,116 227,876 546,094 Directors’ remuneration including committee fees of QR. 23,884 thousand was proposed for the year ended 31 December 2018
(2017: QR. 25,700 thousand). The compensation and benefits related to key management personnel amounted to QR. 416,519
Derivative financial instruments 241 - 241 - thousand (2017: QR. 362,785 thousand) and end of service benefits amounted to QR. 14,759 thousand (2017: QR. 17,051 thousand).
Other assets for which fair value is disclosed The remuneration to the Board of Directors has been included under the caption employee salaries and associated costs” in Selling,
general and administration expenses in note 6.
Trade and other receivables 4,447,654 - - 4,447,654
Bank balances and cash 18,390,694 - - 18,390,694 39. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
23,617,675 5,116 228,117 23,384,442 The preparation of the consolidated financial statements in compliance with IFRS requires the management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, income and expenses and disclosure of contingent assets and
Liabilities: contingent liabilities. Future events may occur which will cause the assumptions used in arriving at the estimates to change. The
Other financial liabilities measured at fair effects of any change in estimates are reflected in the consolidated financial statements as they become reasonably determinable.
Value
Judgments and estimates are continually evaluated and are based on historical experience and other factors, including expectations
Derivative financial instruments 45,338 - 45,338 - of future events that are believed to be reasonable under the circumstances.
Cash settled share-based payments 232,118 - 232,118 -
Judgements
Other financial liability for which fair In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those
value is disclosed involving estimations, which have the most significant effect on the amounts recognized in the consolidated financial statements:
Loans and borrowings 40,936,370 27,413,054 13,523,316 -
Classification of investment securities (under IAS 39 - 2017)
41,213,826 27,413,054 13,800,772 - Management decides on the acquisition of an investment whether to classify it as available for sale, held-to-maturity or financial
assets at fair value through profit or loss. The Group classifies investments as held-to-maturity if it has both the positive intention
38. RELATED PARTY DISCLOSURES and ability to hold the investment till maturity. The Group classifies investments as financial assets at fair value through profit or loss
if the investment is classified as held for trading and upon initial recognition it is designated by the Group as at fair value through
Related party transactions and balances
profit or loss. All other investments are classified as available for sale.
Related parties represent associated companies including Government and semi Government agencies, associates, major
shareholders, directors and key management personnel of the Group, and companies of which they are principal owners. In the
Classification of associates, joint ventures and subsidiaries
ordinary course of business, the Group enters into transactions with related parties. Pricing policies and terms of transactions are
The appropriate classification of certain investments as subsidiaries, associates and joint ventures requires significant analysis and
approved by the Group’s management. The Group enters into commercial transactions with the Qatar Government related entities
management judgement as to whether the Group exercises control, significant influence or joint control over these investments.
in the ordinary course of business in terms of providing telecommunication services, placement of deposits and obtaining credit
This may involve consideration of a number of factors, including ownership and voting rights, the extent of Board representation,
facilities etc.
contractual arrangements and indicators of de fact control.
a) Transactions with Government and related entities Principal versus agent
As stated in Note 1, Qatar Holding L.L.C. is the Parent Company of Ooredoo Q.P.S.C. Group, which is controlled by Qatar Investment The Group determines whether it is acting as a principal or an agent, for each of the arrangement, to provide good or service
Authority. The Group enters into commercial transactions with the Government and other Government related entities in the promised to the customer by:
ordinary course of business, which includes providing telecommunication services, placement of deposits and obtaining credit a) Identifying the specified goods or services to be provided to the customer; and
facilities. All these transactions are at arm’s length and in the normal course of business. Following are the significant balances and
transactions between the Company and the Government and other Government related entities. b) Assessing whether it controls each specified good or service before that good or service is transferred to the customer.
The Group is a principal if it controls the specified good or service before that good or service is transferred to a customer while the
• Trade receivables – net of impairment include an amount of QR. 429,015 thousand (2017: QR. 285,258 thousand) receivable Group is an agent if the Group’s performance obligation is to arrange for the delivery of the specified good or service for
from Government and Government related entities. another party.
• The most significant amount of revenue from a Government related entity was earned from a contract with the Ministry of
Foreign Affairs, amounting to QR. 37,031 thousand (2017: QR. 38,192 thousand).
• Industry fee (Note 10) pertains to the industry fee payable to CRA, a Government related entity.

In accordance with IAS 24 (revised 2009) Related Party Disclosures, the Group has elected not to disclose transactions with the Qatar
Government and other entities over which the Qatar Government exerts control, joint control or significant influence. The nature of
transactions that the Group has with such related parties relates to provision of telecommunication services. 
160 Ooredoo Annual Report 2018
161

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

39. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (continued) 39. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (continued)
Recognition revenue In making their judgement, the directors considered the detailed criteria for the recognition of revenue set out in IFRS 15 and, in
Management considers recognizing revenue over time, if one of the following criteria is met, otherwise revenue will be recognized at particular, whether the Group had transferred control of the goods to the customer. Following the detailed quantification of the
a point in time: Group’s liability in respect of rectification work, and the agreed limitation on the customer’s ability to require further work or to
a) The Customer Simultaneously Receives And Consumes The Benefits Provided By The Group’s Performance As The Group require replacement of the goods, the directors are satisfied that control has been transferred and that recognition of the revenue in
Performs; the current year is appropriate, in conjunction with the recognition of an appropriate warranty provision for the rectification costs.
b) The Group’s Performance Creates Or Enhances An Asset That The Customer Controls As The Asset Is Created Or Enhanced; Or
Principal versus agent (Upon adoption of IFRS 15, applicable from 1 January 2018)
c) The Group’s Performance Does Not Create An Asset With An Alternative Use To The Entity And The Entity Has An Enforceable
Significant judgements are made by management when concluding whether the Group is transacting as an agent or a principal. The
Right To Payment For Performance Completed To Date.
assessment is performed for each separate revenue stream in the Group. The assessment requires an analysis of key indicators,
specifically whether the Group:
Capitalisation of costs • Carries any inventory risk;
Management determines whether the Group will recognise an asset from the costs incurred to fulfil a contract and costs incurred to
• Has the primary responsibility for providing the goods or services to the customer;
obtain a contract if the costs meet all the following criteria:
a) The costs relate directly to a contract or to an anticipated contract that the group can specifically identify; • Has the latitude to establish pricing; and
b) Tthe costs generate or enhance resources of the Group that will be used in satisfying performance obligations in the future; and • Bears the customer’s credit risk.
c) The costs are expected to be recovered.
These indicators are used to determine whether the Group has exposure to the significant risks and rewards associated with the
Such asset will be amortised on a systematic basis that is consistent with the transfer to the customer of the goods or services to
sale of goods or rendering of services. For example, any sale relating to inventory that is held by the Group, not on consignment, is a
which the asset relates.
strong indicator that the Group is acting as a principal.
Credit risk measurement
Estimates
The assessment of credit risk of a portfolio of assets entails further estimations as to the likelihood of defaults occurring, of the
The key assumptions concerning the future and other sources of estimation uncertainty at the financial position date that have a
associated loss ratios and of default correlations between counterparties. The Group measures credit risk using Probability of
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
Default (PD), Exposure at Default (EAD) and Loss Given Default (LGD).
discussed below.
Credit quality assessments
Impairment of non-financial assets
The Group has mapped its internal credit rating scale to Moody’s rating scale as at 31 December 2018.
The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill and
other indefinite life intangibles are tested for impairment annually and at other times when such indicators exist.
Contract variations
Contract variations are recognised as revenues only to the extent that it is probable that they will not result in a significant reversal
The factors that the Group considers important which could trigger an impairment review include the following:
of revenue in subsequent periods. Management considers prior experience, application of contract terms and the relationship with
• Significant Or Prolonged Decline In The Fair Value Of The Asset;
the customers in making their judgement.
• Market Interest Rates Or Other Market Rates Of Return On Investments Have Increased During The Period, And Those
Contract claims Increases Are Likely To Affect The Discount Rate Used In Calculating The Asset’s Value In Use And Decrease The Asset’s
Contract claims are recognised as revenue only when management believes that only to the extent that it is probable that they will Recoverable Amount Materially;
not result in a significant reversal of revenue in subsequent periods. Management reviews the judgment related to these contract • Significant Underperformance Relative To Expected Historical Or Projected Future Operating Results;
claims periodically and adjustments are made in the future periods, if assessments indicate that such adjustments are appropriate. • Significant Changes In The Manner Of Use Of The Acquired Assets Or The Strategy For Overall Business; And
• Significant Negative Industry Or Economic Trends.
Judgements in determining the timing of satisfaction of performance obligations
The Group determines an impairment loss whenever the carrying amount of an asset exceeds its recoverable amount. The
Per note 4, the Group generally recognise revenue over time as it performs continuous transfer of control of these services to the
recoverable amount has been determined based on value in use calculations. The cash flows are derived from the budget for the
customers. Because customers simultaneously receives and consumes the benefits provided by these services and the control
next ten years and do not include restructuring activities that the Group is not yet committed to or significant future investments
transfer takes place over time, revenue is also recognised based on the extent of service transfer/completion of transfer of each
that will enhance the asset base of the cash-generating unit being tested. The recoverable amount of investment is determined
performance obligation. In determining the method for measuring progress for these POs, we have considered the nature of these
based on the net present value of future cash flows, management assumptions made, including management’s expectations of the
services as well as the nature of its performance.
investment’s:
• Growth in earnings before interest, tax, depreciation and amortisation (“ebitda”), calculated as adjusted operating
For performance obligations satisfied at a point in time, the Group considers the general requirements of control (i.e. direct the use
profit before depreciation and amortisation;
of asset and obtain substantially all benefits) and the following non-exhaustive list of indicators of transfer of control:
• Entity has present right to payment • Timing and quantum of future capital expenditures;
• Customer has legal title • Long term growth rates ranges during discrete period and terminal period; and
• Entity has transferred legal possession • The selection of discount rates reflects the risks involved.

• Customer has significant risk and rewards

The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected
• Customer has accepted the asset future cash inflows and the growth rate used for extrapolation purposes. Refer Note 15 for the impairment assessment for
investment in an associate.
162 Ooredoo Annual Report 2018
163

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

39. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (continued) 39. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (continued)
Estimates (continued) Estimates (continued)
Impairment of non-financial assets (continued)
Impairment of inventories
In the case of goodwill and intangible assets with indefinite lives, at a minimum, such assets are subject to an annual impairment Inventories are held at the lower of cost and net realisable value. When inventories become old or obsolete, an estimate is made of
test and more frequently whenever there is an indication that such asset may be impaired. This requires an estimation of the value their net realisable value. For individually significant amounts, this estimation is performed on an individual basis. Inventories which
in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an are not individually significant, but which are old or obsolete, are assessed collectively and a provision applied according to the
estimate of the expected future cash flows from the cash-generating unit and to choose a suitable discount rate in order to calculate inventory type and the degree of ageing or obsolescence, based on historical selling prices.
the present value of those cash flows (Note 13).
Impairment of trade receivables (Financial instruments under IAS 39, applicable before 1 January 2018)
Useful lives of property, plant and equipment and investment property An estimate of the collectible amount of trade receivables is made when collection of the full amount is no longer probable.
The Group’s management determines the estimated useful lives of its property, plant and equipment and investment properties For individually significant amounts, this estimation is performed on an individual basis. Amounts which are not individually
based on the period over which the assets are expected to be available for use. The estimated useful lives of property, plant and significant, but which are past due, are assessed collectively and a provision applied according to the length of time past due, based
equipment and investment properties are reviewed at least annually and are updated if expectations differ from previous estimates on historical recovery rates.
due to physical wear and tear and technical or commercial obsolescence on the use of these assets. It is possible that future results
of operations could be materially affected by changes in these estimates brought about by changes in factors mentioned above. Fair value determination for customer loyalty programmes (IFRIC 13 Revenue recognition, applicable before 1 January 2018)
A reduction in the estimated useful lives of property, plant and equipment and investment properties would increase depreciation The Group estimates the fair value of points awarded under its Loyalty programmes, which are within the scope of IFRIC 13,
expense and decrease noncurrent assets. Customer Loyalty Programme, by estimating the weighted average cost for redemption of the points. Inputs to the models include
making assumptions about expected redemption rates, the mix of products that will be available for redemption in the future and
Classification of investment property customer preferences.
When determining whether property, plant and equipment should be classified as investment property, the Group assesses whether
the property is held to earn rentals for capital appreciation or both. The Group follows the guidance of IAS 40 on classifying its Business combinations
investment property. If the property meets the definition, the Group assesses the suitable basis for allocation for the ratio of leased The recognition of business combinations requires the excess of the purchase price of acquisitions over the net book value of assets
out area in proportion to the total area of the property, either on the basis of floors or square meter area rented out. acquired to be allocated to the assets and liabilities of the acquired entity.

Useful lives of intangible assets The Group makes judgements and estimates in relation to the fair value allocation of the purchase price. If any unallocated portion
The Group’s management determines the estimated useful lives of its intangible assets for calculating amortisation. This estimate is is positive it is recognised as goodwill and if negative, it is recognised in the consolidated statement of profit or loss.
determined based on the expected pattern of consumption of future economic benefits embodied in the asset.
Licences and spectrum fees
Provision and contingent liabilities The estimated useful life is generally the term of the licence unless there is a presumption of renewal at negligible cost. Using
The Group’s management determines provision on best estimate of the expenditure required to settle the present obligation as a the licence term reflects the period over which the Group will receive economic benefit. For technology specific licences with a
result of the past event at the reporting date. presumption of renewal at negligible cost, the estimated useful economic life reflects the Group’s expectation of the period over
which the Group will continue to receive economic benefit from the licence. The economic lives are periodically reviewed taking into
The Group’s management measures contingent liabilities as a possible obligation depending on whether some uncertain future consideration such factors as changes in technology. Historically any changes to economic lives have not been material following
event occurs or a present obligation but payment is not probable or the amount cannot be measured reliably. these reviews.

Derecognition of financial liability Uncertain tax exposures

The Group’s management applies judgment to derecognise a financial liability when situations may arise where a liability is In certain circumstances, the Group may not be able to determine the exact amount of its current or future tax liabilities or
considered unlikely to result in an outflow of economic resources. This is determined when the obligation specified in the contract or recoverable amount of the claim refund due to ongoing investigations by, or discussions with the various taxation authorities.
otherwise is discharged or cancelled or expires. In determining the amount to be recognized in respect of uncertain tax liability or the recoverable amount of the claim for tax refund
related to uncertain tax positions, the Group applies similar considerations as it would use in determining the amount of a provision
Decommissioning liability to be recognized in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets and IAS 12, Income Taxes.
The Group records full provision for the future costs of decommissioning for network and other assets. The assumptions based on
the current economic environment have been made, which management believes are a reasonable basis upon which to estimate Estimation of financial information
the future liability. These estimates are reviewed regularly to take into account any material changes to the assumptions. However, The Group accounts for its investment in associate using equity accounting as required by IAS 28. For the investment where
actual decommissioning costs will ultimately depend upon future market prices for the necessary decommissioning works required information is not available at the reporting date, the Group has estimated the financial information based on the historical
that will reflect market conditions at the relevant time. Furthermore, the timing of decommissioning is likely to depend on when trends, quarterly financial information, budgets and future forecasts. Management believes that estimated financial information is
the network assets cease to produce at economically viable rates. This, in turn, will depend upon future technologies, which are reasonable.
inherently uncertain.
Customer loyalty programme (Upon adoption of IFRS 15, applicable from 1 January 2018)
Fair value of unquoted equity investments Under IFRS 15, the Group will need to allocate a portion of the transaction price to the loyalty programme based on relative stand
Where the fair value of financial assets and financial liabilities recorded in the consolidated statement of financial position cannot be alone selling price (“SSP”). The adoption of IFRS 15 has only resulted in reallocation of revenues for the prior period in between the
derived from active markets, they are determined using valuation techniques including the discounted cash flows model. The inputs services and equipment.
to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required
in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the reported fair value of financial instruments.

Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be
available against which the losses can be utilised. The Group believes that sufficient taxable profit will be available to allow or part of
the deferred tax assets to be utilized. Significant management judgment is required to determine the amount of deferred tax assets
that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.
164 Ooredoo Annual Report 2018
165

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

39. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (continued) 40. SUMMARISED FINANCIAL INFORMATION OF SUBSIDIARIES WITH MATERIAL NON – CONTROLLING INTERESTS
Estimates (continued) The following table summarizes the information relating to each of the Group’s subsidiaries that have material non-controlling
interests, before any intra-group eliminations:
Upon adoption of IFRS 9, applicable from 1 January 2018
Business model assessment Asiacell NMTC* Indosat Ooredoo Ooredoo Oman
Classification and measurement of financial assets depends on the results of the SPPI and the business model test. The Group QR.’000 QR.’000 QR.’000 QR.’000
determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular
31 December 2018
business objective. This assessment includes judgement reflecting all relevant evidence including how the performance of the assets
is evaluated and their performance measured, the risks that affect the performance of the assets and how these are managed and Non-current assets 4,990,148 10,329,979 12,691,503 2,934,043
how the managers of the assets are compensated. The Group monitors financial assets measured at amortised cost or fair value
through other comprehensive income that are derecognised prior to their maturity to understand the reason for their disposal and Current assets 5,013,416 3,608,484 1,846,990 973,326
whether the reasons are consistent with the objective of the business for which the asset was held. Monitoring is part of the Group’s Non-current liabilities (126,197) (2,032,396) (6,102,011) (154,813)
continuous assessment of whether the business model for which the remaining financial assets are held continues to be appropriate
and if it is not appropriate whether there has been a change in business model and so a prospective change to the classification of Current liabilities (5,348,106) (5,242,438) (5,524,101) (1,317,015)
those assets. Net assets 4,529,261 6,663,629 2,912,381 2,435,541

Significant increase in credit risk Carrying amount of NCI 1,627,855 1,496,161 1,261,330 1,100,867
As explained in note 3, ECL are measured as an allowance equal to 12-month ECL for stage 1 assets, or lifetime ECL assets for stage
Revenue 4,448,836 8,017,456 5,919,012 2,685,125
2 or stage 3 assets. An asset moves to stage 2 when its credit risk has increased significantly since initial recognition. IFRS 9 does not
define what constitutes a significant increase in credit risk. In assessing whether the credit risk of an asset has significantly increased Profit 451,135 421,009 (529,727) 396,514
the Group takes into account qualitative and quantitative reasonable and supportable forward looking information.
Profit allocated to NCI 162,142 73,832 (131,933) 177,948
Calculation of loss allowance
Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a
given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions. Indosat
Asiacell NMTC* Ooredoo Ooredoo Oman
When measuring ECL the Group uses reasonable and supportable forward looking information, which is based on assumptions for QR.’000 QR.’000 QR.’000 QR.’000
the future movement of different economic drivers and how these drivers will affect each other. 31 December 2017

Loss given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due Non-current assets 6,186,502 11,864,071 11,767,695 3,035,192
and those that the lender would expect to receive, taking into account cash flows from collateral and integral credit enhancements. Current assets 3,925,288 4,055,774 2,544,494 731,187

Fair value measurement Non-current liabilities (284,022) (2,451,786) (5,853,973) (193,732)

Some of the Group’s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value
Current liabilities (4,762,662) (6,083,615) (4,501,306) (1,306,342)
of an asset or a liability, the Group uses market-observable data to the extent it is available. Where Level 1 inputs are not available,
the Group engages qualified external valuers to perform the valuation. The management/valuation committee if any works closely Net assets 5,065,106 7,384,444 3,956,910 2,266,305
with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model. Information about the
valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in respective notes. Carrying amount of NCI 1,820,443 1,606,178 1,603,451 1,021,117
Revenue 4,490,037 8,374,088 8,234,267 2,670,143
Profit 111,468 618,262 460,366 293,337
Profit allocated to NCI 40,063 135,424 190,519 131,429

*This includes the Group’s subsidiaries with material non-controlling interest (NCI) within NMTC sub-group (Wataniya Telecom Algerie S.P.A.
(”Ooredoo Algeria”), Ooredoo Tunisie S.A. (Ooredoo Tunisia), Wataniya Palestine Mobile Telecommunications Public Shareholding Company (“Ooredoo
Palestine”), before any intra-group eliminations.
166 Ooredoo Annual Report 2018
167

283,990
Total
QR.’000

27,895,273

1,747,461

-
29,926,724

1,747,461
28,179,263
29,926,724

2,277,691
8,000,497
1,732,802
(iii)
(ii)
(i)
Adjustments
and

QR.’000

-
(728,683)
eliminations

(728,683)

(268,040)
(460,643)
(728,683)

(548,186)
534,452
-
41. SEGMENT INFORMATION
Information regarding the Group’s reportable segments is set out below in accordance with “IFRS 8 Operating Segments”. IFRS
8 requires reportable segments to be identified on the basis of internal reports that are regularly reviewed by the Group’s Chief
Operating Decision Maker (“CODM”) and used to allocate resources to the segments and to assess their performance.

Others
QR.’000

23,304

269,280
-
288,370
580,954

324,210
256,744
580,954

(86,891)
28,288
145
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 MENA. Outside of Qatar, the Group operates

The following tables present revenue and profit information regarding the Group’s operating segments for the year ended 31 December 2018 and 2017:
through its subsidiaries and associates and major operations that are reported to the Group’s CODM are considered by the Group to
be reportable segment. Revenue is attributed to reportable segments based on the location of the Group companies. Inter-segment
sales are charged at arms’ length prices.

Ooredoo
Myanmar
QR.’000

1,247,828

2,086
9,907
2,500
1,262,321

2,086
1,260,235
1,262,321

(924,950)
796,042
42,257
For management reporting purposes, the Group is organised into business units based on their geographical area covered, and has
six reportable segments as follows:
1. Ooredoo Qatar is a provider of domestic and international telecommunication services within the State of Qatar;

2. Asiacell is a provider of mobile telecommunication services in Iraq;

Ooredoo
Oman
QR.’000

2,602,901

51,515
23,639
7,070
2,685,125

51,515
2,633,610
2,685,125

591,949
597,874
12,156
3. NMTC group is a provider of mobile telecommunication services in Kuwait and elsewhere in the Middle East and North African
(MENA) region. NMTC group includes balances of Ooredoo Kuwait, Ooredoo Tunisia, Ooredoo Algeria, Ooredoo Palestine,
Ooredoo Maldives PLC and others. Management believe that presenting NMTC as one segment will provide the most relevant
information to the users of the consolidated financial statement of the Group, as NMTC is a public listed company in Kuwait and
it presents detailed segment note in its consolidated financial statements, which are publically available.

Indosat
Ooredoo
QR.’000

5,603,005

83,472
228,345
4,190
5,919,012

83,472
5,835,540
5,919,012

(676,227)
2,292,705
627,172
4. Indosat Ooredoo is a provider of telecommunication services such as cellular services, fixed telecommunications, multimedia,
data communication and internet services in Indonesia (please refer to note 44 for restatement of prior year balances);

5. Ooredoo Oman is a provider of mobile and fixed telecommunication services in Oman;

6. Ooredoo Myanmar is a provider of mobile and fixed telecommunication services in Myanmar; and

NMTC
QR.’000

6,768,634

1,092,282
3,595
152,945
8,017,456

1,092,282
6,925,174
8,017,456

937,560
1,578,559
87,959
7. Others include some of the Group’s subsidiaries which are providers of wireless and telecommunication services.

Management monitors the operating results of its operating subsidiaries separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss of these
reportable segments. Transfer pricing between reportable segments are on an arm’s length basis in a manner similar to transactions
with third parties.

Asiacell
QR.’000

4,438,569

-
-
10,267
4,448,836

-
4,448,836
4,448,836

765,832
1,325,475
19,934
Notes to the Consolidated Financial Statements

Ooredoo
Qatar
QR.’000

7,211,032

248,826
18,504
263,341
7,741,703

461,936
7,279,767
7,741,703

2,218,604
847,102
943,179
For the year ended 31 December 2018

41. SEGMENT INFORMATION (CONTINUED)

Sale of telecommunications equipment

Revenue from use of assets by others
Revenue from rendering of telecom

Segment profit / (loss) before tax

Depreciation and amortisation
Timing of revenue recognition
Year ended 31 December 2018

At a point in time
Operating segments

Net finance costs

Over time
Inter-segment
Total revenue
Revenue

services

Results
Notes to the Consolidated Financial Statements
168

For the year ended 31 December 2018

41. SEGMENT INFORMATION (CONTINUED)

Year ended 31 December 2017

Adjustments
Ooredoo Indosat Ooredoo Ooredoo and
Qatar Asiacell NMTC Ooredoo Oman Myanmar Others eliminations Total
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000
Revenue
Revenue from rendering of telecom
7,103,651 4,470,862 7,296,815 7,852,339 2,638,239 1,298,095 33,108 - 30,693,109
services
Sale of telecommunications equipment 229,554 1,355 806,039 51,978 6,522 18,844 522,470 - 1,636,762
Revenue from use of assets by others 18,957 - 49,250 229,600 15,563 2,708 - - 316,078
Inter-segment 438,479 17,820 221,984 11,267 9,819 3,858 163,107 (866,334) -
Total revenue 7,790,641 4,490,037 8,374,088 8,145,184 2,670,143 1,323,505 718,685 (866,334) (i) 32,645,949
Timing of revenue recognition
At a point in time 596,818 1,355 806,039 51,978 6,522 18,844 522,470 (367,264) 1,636,762
Over time 7,193,823 4,488,682 7,568,049 8,093,206 2,663,621 1,304,661 196,215 (499,070) 31,009,187
7,790,641 4,490,037 8,374,088 8,145,184 2,670,143 1,323,505 718,685 (866,334) 32,645,949
Results
Segment profit / (loss) before tax 1,792,635 442,619 1,199,185 578,784 461,417 (503,439) (383,798) (525,094) (ii) 3,062,309
Depreciation and amortisation 861,173 1,415,495 1,680,748 2,536,964 641,317 726,687 32,156 525,094 (iii) 8,419,634
Net finance costs 914,961 37,218 101,924 625,710 19,728 39,854 1,385 - 1,740,780

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

41. SEGMENT INFORMATION (CONTINUED)

Note:
(i) Inter-segment revenues are eliminated on consolidation.
(ii) Segment profit before tax does not include the following:

2018 2017
QR.’000 QR.’000
Amortisation of intangibles (538,426) (525,094)
Impairment of intangibles (9,760) -
(548,186) (525,094)

(iii) Amortisation relating to additional intangibles identified from business combination was not considered as part of segment expense.
The following table presents segment assets of the Group’s operating segments as at 31 December 2018 and 2017.

Adjustments
Indosat Ooredoo Ooredoo and
Ooredoo Qatar Asiacell NMTC Ooredoo Oman Myanmar Others Eliminations Total
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000 QR.’000
Segment assets (i)
At 31 December 2018 18,693,034 9,850,453 19,661,685 15,256,760 3,890,053 5,438,759 4,037,784 8,470,947 85,299,475
At 31 December 2017 19,483,794 9,959,541 21,644,579 15,055,507 3,744,225 6,428,654 4,042,955 9,097,230 89,456,485
Capital expenditure (ii)
At 31 December 2018 719,919 137,723 1,074,675 3,099,432 497,767 707,914 8,071 - 6,245,501
At 31 December 2017 814,042 202,005 1,359,443 1,899,725 445,888 788,630 10,822 - 5,520,555

Note:
(i) Goodwill amounting to QR. 8,470,947 thousand (31 December 2017: QR. 9,097,230 thousand) was not considered as part of segment assets.
(ii) Capital expenditure consists of additions to property, plant and equipment and intangibles excluding goodwill and assets arising from business combinations.
Ooredoo Annual Report 2018
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170 Ooredoo Annual Report 2018
171

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

42. CONTRIBUTION TO SOCIAL AND SPORTS FUND 44. RESTATEMENT OF PRIOR YEAR FINANCIAL INFORMATION (continued)
As at December 31, 2017, Consolidated statement of financial position
According to Qatari Law No. 13 for the year 2008 and the related clarifications issued in January 2010, the Group is required to
contribute 2.5% of its annual net profits to the state social and sports fund. The clarification relating to Law No. 13 requires the As previously
payable amount to be recognised as a distribution of income. Hence, this is recognised in statement of changes in equity. reported As restated
31 December 31 December
During the year, the Group appropriated an amount of QR. 49,625 thousand (2017: QR. 41,269 thousand) representing 2.5% of the 2017 Adjustment 2017
net profit generated from Qatar Operations. QR.’000 QR.’000 QR.’000
Assets
43. EVENT AFTER THE REPORTING DATE
Non-current assets
As per the resolution issued by Qatar Financial Market Authority resolution, issued on 6 January 2019, listed Companies should Property, plant and equipment 29,529,873 (55,566) 29,474,307
ensure the nominal values of their share is QR. 1 and such need to be amended in articles of association and legal documents. The Intangible assets and goodwill 28,821,013 (16,030) 28,804,983
Group is in process of scheduling an Extraordinary General Meeting to pass a resolution.
Investment in associates 2,119,936 (895) 2,119,041
Other than as disclosed in the consolidated financial statements, there are no other material events subsequent to the reporting Other non-current assets 685,308 16,523 701,831
date, which have a bearing on the understanding of these consolidated financial statements.
Deferred tax assets 305,711 35,937 341,648
44. RESTATEMENT OF PRIOR YEAR FINANCIAL INFORMATION Current assets
Trade and other receivables 8,105,264 (192,663) 7,912,601
Management has identified and corrected the following in the consolidated financial statements for the year ended 31 December
2017 by restating each of the affected consolidated financial statements line items for the prior period as per IAS 8 “Accounting Bank balances and cash 18,459,188 (68,494) 18,390,694
Policies, Changes in Accounting Estimates and Errors” and the impact is set out below. Assets held for sale - 157,894 157,894
Equity
a. During the year, the Group has recorded a prior year adjustment related to revenue and provision for receivables of PT
Indosat by restating the related numbers in 2017 consolidated statement of profit or loss and consolidated statement of Translation reserve (6,298,659) 158 (6,298,501)
financial position as at 31 December 2017.
Retained earnings 12,070,177 (69,204) 12,000,973
b. The assets and liabilities related to Artajasa Pembayaran Elektronis (“APE”), an indirect subsidiary of Ooredoo through Non-controlling interests 6,569,451 (37,179) 6,532,272
Indosat, have been restated as held for sale in 2017 following the approval by the Extraordinary General Shareholders’ Liabilities
Meeting of APE on 13 October 2017 to divest portion of their investments in APE due to the requirements of local
jurisdiction. Non-current liabilities
Deferred tax liabilities 376,897 (2,283) 374,614
Other non-current liabilities 1,963,028 (3,253) 1,959,775
Current liabilities
Trade and other payables 13,598,427 (86,408) 13,512,019
Income tax payable 1,323,060 (1,425) 1,321,635
Liabilities held for sale - 76,300 76,300

For the year ended 31 December 2017

Consolidated statement of profit or loss and other comprehensive income

As previously
reported
2017 Adjustment As restated 2017
QR.’000 QR.’000 QR.’000
Revenue 32,735,032 (89,083) 32,645,949
Operating expenses (12,018,282) 1,559 (12,016,723)
Selling, general and administrative expenses (6,888,608) (54,993) (6,943,601)
Other income – net 144,108 8,127 152,235
Income tax (801,570) 27,922 (773,648)
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45. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes.
Liabilities arising from financing activities are for which cash flows were, or future cash flows will be, classified in the Group’s
consolidated statement of cash flows as cash flows from financing activities.

1 January Financing cash Non-cash Other changes 31 December

2018 flows (i) changes (ii) (iii) 2018
QR.’000 QR.’000 QR.’000 QR.’000 QR.’000

Loans and borrowings (note 27) 40,144,062 (2,758,391) - (419,560) 36,966,111

Deferred financing costs (note 27) (288,718) (12,949) 93,385 1,532 (206,750)
Other non-current liabilities (note 29) 1,959,775 295,994 - (58,264) 2,197,505

Note
(i) The financing activities in the statement of cash flows mainly includes the cash flows from loans and borrowings and other
non-current liabilities.
(ii) The non-cash changes pertain to the amortisation of deferred financing costs.
(iii) Other changes include exchange adjustments and reclassification.