Earnings release
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. VODAFONE QATAR P.Q.S.C. CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2025
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VODAFONE QATAR P.Q.S.C. CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2025 CONTENTS Pages Independent auditors’ report Consolidated financial statements: Consolidated statement of income 1 Consolidated statement of comprehensive income 2 Consolidated statement of financial position 3 Consolidated statement of changes in equity 4 Consolidated statement of cash flows 5 Notes to the consolidated financial statements 6 - 51
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Independent auditor’s report To the Shareholders of Vodafone Qatar P.Q.S.C. Report on the Audit of the Consolidated Financial Statements Opinion We have audited the consolidated financial statements of Vodafone Qatar P.Q.S.C. (the ‘Company’) and its subsidiaries (together the ‘Group’), which comprise the c onsolidated statement of financial position as at 31 December 202 5, the consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising material accounting policies and other explanatory information. In our opinion, the accompanying c onsolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2025 , and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISA s). Our responsibilities under those standards are further described in the Auditor ’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) , as applicable to audits of the financial statements of public interest entities, together with the ethical requirements that are relevant to our audit of the Group’s c onsolidated financial statements in the State of Qatar, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. KPMG, Qatar Branch is registered with the Ministry of Commerce and Industry, State of Qatar, and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The KPMG name and logo are registered trademarks of KPMG International. KPMG Zone 25 C Ring Road Street 230, Building 246 P.O Box 4473, Doha State of Qatar Telephone: +974 4457 6444 Fax: +974 4436 7411 Website: kpmg.com/qa
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Independent auditor’s report (continued) Vodafone Qatar P.Q.S.C. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Revenue recognition and related IT systems See Note 3, 5 and 29 to the consolidated financial statements. The key audit matter How the matter was addressed in our audit The Group reported revenue of QR 3,446,506 thousands from telecommunication and related activities. We focused on this area due to the complexity of the Information Technology (IT) systems, volume of transactions, involvement of judgements in the application of the revenue recognition accounting standards; and inherent risk around accuracy and occurrence of revenue recorded. Our audit approach included a combination of test of controls and substantive procedures, in particular, the following: obtaining an understanding of the significant revenue processes including performance of an end to end walkthroughs and identifying the relevant controls including IT systems, interfaces, revenue assurance and reports; testing the design, implementation and operating effectiveness of key internal controls over recording of revenue including involving our internal specialists to test key automated application and general IT controls; performing substantive audit procedures on significant revenue streams including analytical procedures and/or test on the accuracy of invoices on a sample basis, as applicable; reviewing key reconciliations performed by the management; assessing the appropriateness of the accounting policies adopted in revenue recognition for existing and new revenue streams (if any); assessing the overall presentation, structure and content of revenue related disclosures to the consolidated financial statements to determine if they are in compliance with the IFRS Accounting Standards.
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Independent auditor’s report (continued) Vodafone Qatar P.Q.S.C. Other Information The Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the consolidated financial statements and our auditor’s report thereon. Prior to the date of this auditor’s report, we obtained the report of the Board of Directors which forms part of the Annual Report, and the remaining sections of the Annual Report are expected to be made available to us after that date. Our opinion on the consolidated financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon as part of our engagement to audit the consolidated financial statements. We have performed assurance engagements on the internal controls over financial reporting and the Company’s compliance with the provisions of the Qatar Financial Markets Authority’s Governance Code for Listed Companies that forms part of the other information and provided separate assurance practitioner’s conclusions thereon that will be included within the other information. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in 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. If, based on the work we have performed on the other information that we have 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 report in this regard. Responsibilities of Board of Directors for the Consolidated Financial Statements The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards , and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the Board of Directors 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 the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually 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.
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Independent auditor’s report (continued) Vodafone Qatar P.Q.S.C. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements (continued) As part of an audit in accordance with ISA s, 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 risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material missta tement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, 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. – Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. – Conclude on the appropriateness of the Board of Directors’ 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 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 disclosures are ina dequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor ’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. – 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 presentation. – Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion. We communicate with the Board of Directors 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. We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matt ers in our auditor ’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so wou ld reasonably be expected to outweigh the public interest benefits of such communication.
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Independent auditor’s report (continued) Vodafone Qatar P.Q.S.C. Report on Other Legal Requirements As required by the Qatar Commercial Companies Law No. 11 of 2015, whose certain provisions were subsequently amended by Law No. 8 of 2021 ("amended QCCL"), we also report that: i) We have obtained all the information and explanations we considered necessary for the purposes of our audit. ii) The Company has maintained proper accounting records and its consolidated financial statements are in agreement therewith. iii) We have read the report of the Board of Directors to be included in the Annual Report, and the financial information contained therein is in agreement with the books and records of the Company. iv) Furthermore, the physical count of the Company’s inventories was carried out in accordance with established principles. v) We are not aware of any violations of the applicable provisions of the amended QCCL or the terms of the Company’s Articles of Association having occurred during the year which might have had a material effect on the Company’s consolidated financial position or performance as at and for the year ended 31 December 2025. 2 February 2026 Gopal Balasubramaniam Doha KPMG State of Qatar Qatar Auditors’ Registry Number 251 Lic ensed by QFMA: External Auditors’ License No. 120153
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VODAFONE QATAR P.Q.S.C. CONSOLIDATED STATEMENT OF INCOME For the year ended 31 December 2025 The accompanying notes 1 to 33 form an integral part of these consolidated financial statements. 1 Notes 2025 2024 QR’000 QR’000 Revenues 5 3,446,506 3,189,539 Interconnection and other direct expenses 6 (1,135,426) (1,058,728) Network and other operational expenses 7 (458,193) (446,591) Employees’ salaries and benefits (301,048) (288,701) Depreciation of property, plant and equipment 12 (378,563) (356,759) Amortisation of intangible assets 13 (231,655) (198,430) Depreciation of right-of-use assets 14 (107,364) (110,420) Share of profit of equity-accounted investee 15 5,399 - Expected credit losses 16 (44,364) (31,349) Finance costs 23 (25,760) (33,516) Other financing costs 8 (21,901) (27,292) Other income 9 26,469 23,985 Profit before tax related fees 774,100 661,738 Tax related fees 10 (72,497) (61,075) Profit for the year 701,603 600,663 Basic and diluted earnings per share (in QR per share) 11 0.166 0.142 This statement has been prepared by the Group and stamped by the Auditor for identification purposes only.
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VODAFONE QATAR P.Q.S.C. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2025 The accompanying notes 1 to 33 form an integral part of these consolidated financial statements. 2 Notes 2025 2024 QR’000 QR’000 Profit for the year 701,603 600,663 Other comprehensive income Items that are or may be reclassified subsequently to the consolidated statement of income: Cash flow hedges – changes in fair value 22 7,664 (5,308) Total comprehensive income for the year 709,267 595,355 This statement has been prepared by the Group and stamped by the Auditor for identification purposes only.
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VODAFONE QATAR P.Q.S.C. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2025 The accompanying notes 1 to 33 form an integral part of these consolidated financial statements. 4 Notes Share Legal Retained Hedging Total capital reserve earnings reserve QR’000 QR’000 QR’000 QR’000 QR’000 Balance as at 1 January 2025 4,227,000 192,100 638,072 (5,308) 5,051,864 Profit for the year - - 701,603 - 701,603 Other comprehensive income for the year - - - 7,664 7,664 Total comprehensive income for the year - - 701,603 7,664 709,267 Transfer to legal reserve 21 - 38,929 (38,929) - - Dividend for the year ended 31 December 2024 31 - - (507,240) - (507,240) Transfer to social and sports fund 21.2 - - (17,540) - (17,540) Balance as at 31 December 2025 4,227,000 231,029 775,966 2,356 5,236,351 Balance as at 1 January 2024 4,227,000 157,787 551,709 - 4,936,496 Profit for the year - - 600,663 - 600,663 Other comprehensive income for the year - - - (5,308) (5,308) Total comprehensive income for the year - - 600,663 (5,308) 595,355 Transfer to legal reserve 21 - 34,313 (34,313) - - Dividend for the year ended 31 December 2023 31 - - (464,970) - (464,970) Transfer to social and sports fund 21.2 - - (15,017) - (15,017) Balance as at 31 December 2024 4,227,000 192,100 638,072 (5,308) 5,051,864 This statement has been prepared by the Group and stamped by the Auditor for identification purposes only.
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VODAFONE QATAR P.Q.S.C. CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2025 The accompanying notes 1 to 33 form an integral part of these consolidated financial statements. 5 Notes 2025 2024 QR’000 QR’000 Operating activities Profit before tax related fees 774,100 661,738 Adjustments for: Depreciation of property, plant and equipment 12 378,563 356,759 Amortisation of intangible assets 13 231,655 198,430 Depreciation of right-of-use assets 14 107,364 110,420 Share of profit of equity-accounted investee 15 (5,399) - Provision for employees' end of service benefit 24.1 10,202 9,490 Expected credit losses 16 44,364 31,349 Finance costs 23 25,760 33,516 Other financing costs 8 21,901 27,292 Other income 9 (26,469) (23,985) Changes in operating assets and liabilities Increase in trade and other receivables (124,039) (21,426) Increase in inventories (11,934) (16,286) Decrease / (increase) in contract cost 9,331 (30,045) Increase in provisions 798 1,429 Increase / (decrease) in trade and other payables 128,175 (116,441) Cash generated from operations 1,564,372 1,222,240 Tax related fees paid (61,843) (52,548) Finance costs paid (26,458) (33,486) Employees' end of service benefit paid 24.1 (4,133) (3,805) Other income received 5,783 812 Net cash flows from operating activities 1,477,721 1,133,213 Investing activities Purchase of property, plant and equipment 12 (402,588) (384,964) Purchase of intangible assets 19.2 (171,482) (95,101) Proceeds from sale of property, plant and equipment 83 372 Advance paid for indefeasible right-of-use - (14,783) Deferred consideration paid for subsidiary acquisition - (1,000) Net cash flows used in investing activities (573,987) (495,476) Financing activities Proceeds from loans and borrowings 23 325,000 440,000 Repayment of loans and borrowings 23 (260,000) (492,500) Payment of lease liabilities 14 (144,116) (117,467) Dividend paid (508,893) (469,163) Movement in restricted dividend bank accounts 19.1 1,653 4,193 Net cash flows used in financing activities (586,356) (634,937) Net increase in cash and cash equivalents 317,378 2,800 Cash and cash equivalents at the beginning of the year 97,415 94,615 Cash and cash equivalents at the end of the year 19 414,793 97,415 This statement has been prepared by the Group and stamped by the Auditor for identification purposes only.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 6 1 INCORPORATION AND PRINCIPAL ACTIVITIES Vodafone Qatar P.Q.S.C. (the “Company”) is registered as a Qatari Shareholding Company for a twenty - five-year period (which may be extended by a resolution passed at a General Assembly) under Qatar Commercial Companies Law. The Company was registered with the Commercial Register of the Ministry of Economy and Commerce on 23 June 2008 under Commercial Registration No: 39656. The shares of the Company are listed on the Qatar Stock Exchange. The Company is licensed by the Communications Regulatory Authority (CRA) to provide both fixed and mobile telecommunications services in the State of Qatar. The conduct and activities of the Company are primarily regulated by the CRA pursuant to Law No. 34 of 2006 (Telecommunications Law), the terms of its mobile and fixed licences and applicable regulations. The Company is engaged in providing cellular mobile telecommunication services, fixed line and broadband services and selling related equipment and accessories. Vodafone and Qatar Foundation LLC ( VFQF) owns 45% shareholding ( 2024: 45% shareholding) of the Company. By virtue of agreements entered into by the shareholders of VFQF, the Company is not controlled or consolidated by VFQF or any other parties. Hence, there is no parent or ultimate parent for the Company. The Company’s head office is located in Doha, State of Qatar and its registered address is P.O. Box 27727, Msheireb Downtown, Doha, State of Qatar. The Company has a cooperation agreement with Vodafone Sales & Services Limited, a company registered in United Kingdom. In accordance with the agreement, the Company has rights to receive the benefit of Vodafone Group’s brand, products, services, expertise and technical knowledge. As at the current and comparative reporting date, the Company has the following subsidiaries . These consolidated financial statements comprise the Company and its subsidiaries (together referred to as the ‘Group. 31 December Subsidiary companies Location Nature of business 2025 2024 Infinity Solutions L.L.C Qatar Operational and administrative services 100% 100% Infinity Payment Solutions W.L. L Qatar Fintech and digital innovation services 100% 100% Allied Advertising Group W.L.L Qatar Advertising and sales promotion 100% 100% Infinity Fintech Ventures L.L.C Qatar Investment company 100% 100% Infinity Global Services L.L.C Qatar Investment company 100% 100% 2 BASIS OF PREPARATION a) Statement of compliance These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB). Details of Group’s accounting policies are included in note 3. b) Accounting convention These consolidated financial statements are prepared on a historical cost basis.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 7 2 BASIS OF PREPARATION (CONTINUED) c) Functional and presentation currency These consolidated financial statements are presented in Qatari Riyals, which is the Group’s functional and presentation currency. All the financial information presented in these consolidated financial statements have been rounded off to the nearest thousand (QR’000) except where otherwise indicated. d) Use of estimates and judgments The preparation of consolidated financial statements in conformity with IFRS Accounting Standards requires management to make judgements and estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting year. The Group’s judgments and critical accounting estimates are disclosed under note 29 “Critical accounting judgments and key sources of estimation uncertainty” of these consolidated financial statements. Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis and are consistent with the Group’s risk management . Revisions to accounting estimates are recognised prospectively. 3 MATERIAL ACCOUNTING POLICIES The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements. Refer note 30 for application of new and revised IFRS Accounting Standards in these consolidated financial statements. Basis of consolidation These consolidated financial statements include the financial statements of the Company and its Subsidiaries. a. Business combinations The acquisition of subsidiaries is accounted for using the acquisition method. Purchase consideration is measured as the aggregate of the fair value, at the date of exchange, of the assets given, equity instruments issued, and liabilities incurred or assumed. The acquiree’s identifiable assets and liabilities that meet the conditions for recognition under IFRS 3 Business Combinations are recognized at their fair value at the acquisition date. Acquisition-related costs are recognised in the consolidated statement of income as incurred. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognized in the consolidated statement of income immediately. b. Subsidiaries Subsidiaries are all entities over which the Company has control. Control is achieved when they Company: • has power over the investee; • is exposed to, or has rights to, variable returns from its involvement with the investee; and • has the ability to use its power to affect returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which the control commences until the date on which the control ceases. The Company reassesses whether or not it controls a subsidiary if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 8 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Basis of consolidation (continued) c. Changes in ownership interest When the Company ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognized in statement of income. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. d. Transactions eliminated on consolidation Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated upon consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of the subsidiaries are consistent with the policies adopted by the Group. e. Non-controlling interest (“NCI”) If the subsidiary is not fully owned, non-controlling interests in the results and equity of the subsidiary are shown separately in the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position respectively. f. Equity-accounted investee The Group’s interests in equity-accounted investee comprise interests in associates and a joint venture. Associates are those entities in which the Group has significant influence but not control or joint control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not to control nor to joint control over those policies. Interests in associates and the joint venture 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 the profit or loss and other comprehensive income of equity-accounted investee less any impairments in the value of the investments. Revenue recognition The Group recognises revenue from providing the following telecommunication services: access charges, airtime, data usage, messaging, interconnect fees, data broadband, TV service, installation and configuration, information provision, connection fees and equipment sales and management. Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer. Management considers recognizing revenue over time, if one of the following criteria is met, otherwise revenue will be recognized at a point in time: • the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; • the Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or • the Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 9 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Revenue recognition (continued) Stand-alone selling prices The stand-alone selling prices are determined based on the observable price at which the Group sells the products and services on a standalone basis. For items that are not sold separately (e.g. one off complex sale of equipment and installation projects) the Group estimates standalone selling prices using other methods (i.e. adjusted market assessment approach, cost plus margin approach or residual approach). Significant financing component The Group has decided to recognize financing income at appropriate annual rate over the contract period and total transaction price excluding financing component is recognized when equipment and services are delivered to customer. Revenue from mobile services (post-paid and pre-paid mobile services) Revenue from access charges, airtime usage, messaging , wholesale , roaming and managed services are recognised as services are performed, with unbilled revenue resulting from services already provided accrued at the end of each period and unearned revenue from services to be provided in future periods deferred. Revenue from the sale of prepaid credit is deferred until such time as the customer uses the airtime, or the credit expires. Revenue from data services and information provision is recognised when the Group has performed the related service and, depending on the nature of the service, is recognised either at the gross amount billed to the customer or the amount receivable by the Group as commission for facilitating the service. Revenue from interconnect fees is recognised at the time the services are performed. The Group has offerings where it provides customers with additional content, such as music and video streaming and SMS services, as Value-Added Services (VAS). On this type of service, the Group determines whether they are acting as a principal and accordingly recognizes gross revenue if it is a principal, and net revenue if it is an agent. Sale of equipment, related services and accessories The Group sells equipment and accessories both to the wholesale market and directly to customers through its own retail outlets. Sales-related warranties associated with goods cannot be purchased separately and they serve as an assurance that the products sold comply with agreed-upon specifications. For the sale of equipment to the wholesale market, revenue is recognised when control of the goods has transferred, being when the goods have been delivered to the wholesaler’s specific location (delivery). Following delivery, the wholesaler has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility when selling the goods and bears the risks of obsolescence and loss in relation to the goods. A receivable is recognised by the Group when the goods are delivered to the wholesaler as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due. For sales of equipment to retail customers, revenue is recognised when control of the goods is transferred, being at the point the customer purchases the goods at the retail outlet. Payment of the transaction price is due immediately at the point the customer purchases the equipment, unless the customer opts for an instalment plan Sale of equipment involving provision of the related installation, configuration, and maintenance where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration is recognized by reference to the stages of completion. Under the Group’s standard contract terms, customers have a right of return within 7 days. The Group uses its accumulated historical experience to estimate the number of returns on a portfolio level using the expected value method. It is considered highly probable that a significant reversal in the cumulative revenue recognised will not occur given the consistent level of immaterial returns over previous years.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 10 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Revenue recognition (continued) Broadband and fixed line services The Group offers broadband and fixed line services which normally include installation and configuration services, internet connectivity, television, and telephony services. Fixed service revenue is recognized over the contract period. Interconnection and other direct expenses Interconnection and other expenses include interconnection charges, commissions and dealer charges, regulatory costs, cost of equipment sold, and other direct costs. Interconnection, managed services and roaming costs Costs of network interconnection and roaming with other domestic and international telecommunications operators are recognised in the consolidated statement of income on an accrual basis based on the actual recorded traffic usage. Managed services costs are initially booked as contract cost as part of the cost of unfulfilled performance obligation amount which will be recognized in the consolidated statement of income upon completion as the respective performance obligation. Equipment and other direct costs The cost of equipment refers to the total cost incurred for inventory sold, additionally, it includes any necessary adjustments made for inventory write -downs to reflect its net realizable value when the selling price is lower than the carrying cost. Other direct costs primarily involve expenses directly linked to the transaction, such as bank charges. These may include fees for processing payments, international transaction costs, and other related banking services that are incurred during the normal course of business operations. Commissions and dealer costs Intermediaries are given cash incentives by the Group to connect new customers, upgrade existing customers, bill payments and distribution of recharge cards. These cash incentives are recognised in the consolidated statement of income on an accrual basis, except for commission related to the acquisition of new customers is capitalised and amortised over the average customer retention period. Regulatory costs The annual license fee, spectrum charges and numbering charges are accrued as other operational expenses based on the terms of the License Fee Agreement and relevant applicable regulatory framework issued by the CRA. Leases – as a lessee The Group leases various exchange and network assets, buildings, offices and duct access. Rental contracts are typically made for fixed periods of 5-20 years but may have extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, and leased assets are not used as security for borrowing purposes. The Group assesses whether contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for certain sho rt-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 11 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Leases – as a lessee (continued) The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise: • fixed lease payments (including in-substance fixed payments), less any lease incentives; • variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date; • the amount expected to be payable by the lessee under residual value guarantees; • the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and • lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of lease if the Group is reasonably certain for early termination. The lease liability is presented as a separate line item in the consolidated statement of financial position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever: • the lease term has changed or there is a change in the assessment of exercise of a purchase option, or renewal /termination option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. • the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revise discount rate is used). • a lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. The right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right -of-use of asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use of assets are presented as a separate line in the consolidated statement of financial position. The Group applies IAS 36 to determine whether a right -of-use asset is impaired and accounts for an identified impairment loss as described in the ‘Impairment of non-financial assets’ policy. Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The expenses are recognised in the period in which the event or condition triggers that those payments occur and are included in the consolidated statement of income. As a practical expedient, IFRS16 “Leases” permits a lessee not to separate non -lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has used this practical expedient.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 12 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Foreign currencies Transactions in foreign currencies are initially recorded by the Group at the currency rate prevailing at the date of the transaction. Any differences on settlement of the transaction are immediately recognised in the consolidated statement of income. Mone tary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the end of the reporting period. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at reporting period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of income. Income tax In accordance with Income Tax Law No. 24 of 2018, which was amended by law No. 22 of 2024, multinational enterprises (“MNEs”) that fall within the scope of Pillar Two of the OECD Base Erosion and Profit Shifting (“BEPS”) framework are subject to a minimum effective tax rate of 15%. Other entities are subject to corporate income tax at a rate of 10% on net profits attributable to non-Qatari shareholding. The Income Tax Law also provides a tax exemption for companies listed on the Qatar Stock Exchange that do not meet the Pillar Two criteria. Accordingly, the Company qualifies for and benefits from this tax exemption. The Company’s subsidiary, Infinity Solutions L.L.C., is subject to income tax at a rate of 10% on its net profit in accordance with the Qatar Financial Centre regulations. Other subsidiaries are subject to corporate income tax at a rate of 10% to the extent of profits attributable to effective non-Qatari shareholding of the Parent entity - Vodafone Qatar P.Q.S.C. Property, plant and equipment Recognition and measurement Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses (if any). Assets in the course of construction are carried at cost, less any recognised impairment losses. The cost of property, plant and equipment includes directly attributable incremental costs incurred in their acquisition and installation. The costs of self -constructed assets include the cost of materials and direct labour, any other costs directly attributable for bringing the assets to a working condition for their intended use, capitalised borrowing costs and estimated discounted costs for dismantling and restoration of the sites, where the Group has an obligation to restore the sites. Any gain or loss on disposal of an item of property, plant and equipment is recognised in the consolidated statement of income. Depreciation Depreciation of these assets commences when the assets are ready for use as intended by the management. Depreciation is charged so as to write off the cost of assets less residual value , other than assets under construction, over their estimated useful lives using the straight-line method as follows: Network and equipment 2 - 25 years Furniture and fixtures 5 - 10 years Vehicles 5 years Derecognition An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the consolidated statement of income.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 13 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Property, plant and equipment (continued) Assets under construction Assets under construction are transferred to the related property, plant and equipment or intangible assets when the construction or installation and related activities necessary to prepare the property, plant and equipment or intangible assets for their intended use have been completed, and related assets are ready for operational use. Intangible assets Recognition and measurement Identifiable intangible assets are recognised when the Group controls the asset, it is probable that future economic benefits will flow to the Group and the cost of the asset can be reliably measured. Intangible assets include license fees, software and in defeasible rights-of-use (“IRU”). Intangible assets with finite useful lives are subsequently carried at cost less accumulated amortisation and impairment loss, if any. License Licences are stated at cost less accumulated amortisation. The amortisation period is determined primarily by reference to the unexpired licence period, the conditions for the licence renewal and whether licences are dependent on specific technologies. Amortisation is charged to the consolidated statement of income on a straight-line basis over the estimated useful lives from the commencement of service of the network. Indefeasible rights-of-use (“IRU”) IRUs correspond to the right to use a portion of the capacity of a terrestrial or submarine transmission cable granted for a fixed period. IRUs are recognised at cost as an intangible asset when the Group has the indefeasible right-to-use a specific asset, or dedicated wavelengths on specific cables, and the duration of the right is for a major part of the underlying asset’s economic life. IRU’s are considered as intangible assets with finite lives based on the contractual period/term. Other finite lived intangible assets (including software) Intangible assets with finite lives are stated at acquisition or development cost, less accumulated amortisation. The amortisation period and method is reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption o f future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognis ed in consolidated statement of income on a straight-line basis. Research and development Expenditure on research activities is recognised in the consolidated statement of income. Development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complet e development and to use or sell the asset. Otherwise, it is recognised in the consolidated statement of income as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated a mortisation and any accumulated impairment losses. Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in the consolidated statement of income. Amortisation Amortisation is calculated to write off the cost of intangible assets less their estimated residual values under the straight-line method over their estimated useful lives, and is generally recognised in the consolidated statement of income.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 14 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Intangible assets (continued) Amortisation (continued) The estimated useful lives for current and comparative period are as follows: License mobile 60 years License fixed line 25 years Software 3-8 years Indefeasible right-to-use 10-15 years Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. Impairment of non-financial assets At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Recoverable amount is the higher of value in use and fair value less cost of disposal. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash -generating unit is reduced to its recoverable amount. An impairment loss is recognised immediately in the consolidated statement of income. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, not to exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash-generating unit in prior periods. A reversal of an impairment loss is recognised immediately in the consolidated statement of income. Inventories Inventory is stated at the lower of cost and net realisable value. Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal. Cost is determined on the basis of weighted average cost and comprises direct materials cost and, where applicable, direct labour cost and those overheads that have been incurred in bringing the inventories to their present location and condition. Provisions Employees’ end of service benefits The Group provides end of service benefits to its employees. The entitlement to these benefits is based upon the employees' final salary and length of service, subject to the completion of a minimum service period of one year, calculated under the provisio ns of Qatar Labour Law and is payable upon resignation or termination of the employee. The expected costs of these benefits are accrued over the period of employment. Under Law No. 24 of 2002 on Retirement and Pension, the Group is required to make contributions to a government fund scheme for Qatari employees calculated as a percentage of the Qatari employees’ salaries. The Group’s obligations are limited to these contributions, which are expensed when due. In addition, the Group is required to make contributions of GCC citizens (State of Kuwait, Sultanate of Oman, United Arab Emirates, Kingdom of Bahrain and Kingdom of Saudi Arabia) working in Qatar under Retirement an d Pension Law of Qatar.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 15 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Provisions (continued) Asset retirement obligations In the course of the Group’s activities, a number of sites and other assets are expected to be restored and costs are expected to be incurred in relation to the asset decommissioning after eight years (of initial recognition of asset). Provisions related to decommissioning of assets are determined by discounting the expected future cash flows at a rate that reflects current market assessments of the time value of money and the risks specific to the liability, with the same corresponding amount added to the asset. The unwinding of the discount is recognised as finance cost. Other Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Financial Instruments Non-derivative financial instruments Financial assets and financial liabilities are recognised on the Group’s consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquis ition or issue. A trade receivable without a significant financing component is initially measured at the transaction price. Derivative financial instruments and hedge accounting Initial recognition and subsequent measurement The Group uses derivative financial instruments, such as forward currency contracts, to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. For the purpose of hedge accounting, the Group has the below hedge instrument: Cash flow hedges When hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecasted transaction or the foreign currency risk in an unrecognised firm commitment. At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 16 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Financial Instruments (continued) Cash flow hedges (continued) The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of s ources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements: • There is ‘an economic relationship’ between the hedged item and the hedging instrument. • The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship. • The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item. Hedges that meet all the qualifying criteria for cash flow hedge and are accounted for, as described below: The effective portion of the gain or loss on the hedging instrument is recognised in the consolidated statement of comprehensive income (OCI), while any ineffective portion is recognised immediately in the consolidated statement of income. The hedging reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. The Group uses forward currency contracts as a hedge against its exposure to foreign currency risk in forecasted transactions and firm commitments, The ineffective portion relating to foreign currency contracts is recognised in the consolidated statement of income. The amounts accumulated in OCI are accounted for, depending on the nature of the underlying hedged transaction. If the hedged transaction subsequently results in the recognition of a non -financial item, the amount accumulated in equity is removed from the hedging reserve and included in the initial cost or other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and hence it does not affect OCI for the period. This also appl ies where the hedged forecast transaction o f a non -financial asset or non -financial liability subsequently becomes a firm commitment for which fair value hedge accounting is applied. For any other cash flow hedges, the amount accumulated in OCI is reclassified to the consolidated statement of income as a reclassification adjustment in the same period or periods during which the hedged cash flows affect profit or loss. If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must remain in hedging reserve if the hedge of the future cash flows is still expected to occur. Otherwise, the amount will be immediately reclassified to the consolidated statement of income as a reclassification adjustment. After discontinuation, once the hedged cash flow occurs, any amount remaining in the hedging reserve must be accounted for depending on the nature of the underlying transaction as described above.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 17 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Financial Instruments (continued) Financial assets All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. Classification and subsequent measurement of financial assets (i) Debt instruments designated at amortised cost. Debt instruments that meet the following conditions are measured subsequently at amortised cost: • the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; 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. (ii) Debt instrument designated at other comprehensive income. 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. By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL). Despite the foregoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset: • The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and • The Group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch. For financial instruments other than purchased or originated credit-impaired financial assets (i.e. assets that are credit -impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding 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 -adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition. Amortised cost and effective interest rate method The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initia l 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.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 18 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Financial Instruments (Continued) Financial assets (Continued) The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVTOCI. For financial instruments other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit -impaired (see below). For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, 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. For purchased or originated credit-impaired financial assets, the Group recognises interest income by applying the credit-adjusted effective interest rate to the amortised cost of the financial asset from initial recognition. The calculation does not rever t 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. Financial assets recognised by the Group include: Trade receivables Trade receivables normally do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Estimated irrecoverable amounts are based on the ageing of the receivable balances, historical experience or when the counterparty has been placed under liquidation or entered into bankruptcy proceedings. Individual trade receivables are provided as per Expected Credit Loss (“ECL”) policy and written off when management deems them not to be collectible based on above mentioned criteria. Cash and cash equivalents Cash and cash equivalents comprise cash on hand, bank balances and short-term deposits (e.g. Mudaraba) that are readily convertible to a known amount of cash with the original maturity of three months or less and are subject to an insignificant risk of change in value , less restricted bank accounts pertaining to uncollected shareholder dividends and escrow bank balances. Cash and cash equivalents are carried at amortised cost in the consolidated statement of financial position. 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: • the contractual rights to receive cash flows from the asset have expired; • the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or • 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 transferred control of the asset.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 19 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Financial Instruments (Continued) Impairment of financial assets (Continued) The Group recognises loss allowances for Expected Credit Loss ( ECL) on financial assets measured at amortised cost. The Group measures loss allowance either at an amount equal to: • Lifetime ECL, which are those ECL that result from all possible default events over the expected life of a financial instruments; or • 12-months ECL, which includes the portion of ECL that results from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months) For the financial assets, except for the cash at bank, the Group applied the simplified approach to measuring ECL which recognises the lifetime ECL of these assets that reflect an increased credit risk. The maximum period considered when estimating ECL is the maximum contractual period over which the Group is exposed to credit risk. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment and including forward looking information. Loss allowances on bank balances are always measured at an amount equal to 12 -months ECL. The Group considers bank balances and term deposit receipts to have a low risk level when their credit risk rating is equivalent to the globally understood definition of “investment grade”. Measurement of ECL ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group ex pects to receive). ECL are discounted at the effective interest rate of the financial asset. Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data: • significant financial difficulty of the borrower or issuer; • a breach of contract such as a default or being more than 270 days past due; or • it is probable that the borrower will enter bankruptcy or other financial reorganization. Presentation of impairment Provision for impairment of trade receivables is deducted from gross carrying value of trade receivables and impairment losses relating to trade receivables are separately presented in the consolidated statement of income.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 20 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) Financial Instruments (Continued) Financial liabilities Financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings and lease liabilities. Financial liabilities measured subsequently at amortised cost Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held- for-trading, or (iii) designated as at FVTPL, are measured subsequently at amortised cost using the effective interest method. 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 fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability. Foreign exchange gains and losses For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. Foreign exchan ge gains and losses on financial liabilities that are not part of a designated hedging relationship are recognised in consolidated statement of income. For those which are designated as a hedging instrument for a hedge of foreign currency risk, foreign exchange gains and losses are recognised in other comprehensive income and accumulated in a separate component of equity. The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchan ge component forms part of the fair value gains or losses and is recognised in statement of income for financial liabilities that are not part of a designated hedging relationship. Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an exis ting liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the consolidated statement of income. Offsetting Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. Share capital Ordinary shares issued by the Company are classified as equity. Dividend on ordinary share capital Dividend distributions to the Group’s shareholders are recognised as a liability in the consolidated financial statements in the period in which the dividend is approved by the shareholders. Dividend for the year that is approved after the consolidated statement of financial position date is dealt with as a non-adjusting event after the balance sheet date.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 21 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) 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 disclosed in the consolidated financial statements when material. 4 SEGMENT REPORTING Operating segments are components that engage in business activities that may earn revenues or incur expenses, whose operating results are regularly reviewed by the Chief Operating Decision Maker (CODM), and for which discrete financial information is available. The CODM is the person or group of persons who allocates resources and assesses the performance of the components. For the Group, the functions of the CODM are performed by the Board of Directors. The Group’s total costs, assets and liabilities have not been identified to any of the operating segments as the majority of the total costs, operating assets and liabilities are fully integrated between consumer and enterprise segments. The Group believes that it is not practical to segregate and provide segment allocation relating to total costs, assets and liabilities between operating segments. The Group only operates in the State of Qatar and is therefore viewed to operate in one geographical area. The operating segments that are regularly reported to the CODM are Consumer and Enterprise & others. This is the measure reported to the Group’s CODM for the purpose of resource allocation and assessment of segment performance. Set out below is the information regarding Group’s operating segments in accordance with IFRS 8 Operating Segments:
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 22 4 SEGMENT REPORTING (CONTINUED) 2025 2024 Consumer Enterprise & others Total Consumer Enterprise & others Total QR'000 QR'000 Segment revenue Timing of revenue recognition: Over time 1,897,283 1,190,443 3,087,726 1,780,273 1,110,784 2,891,057 Point in time 11,149 347,631 358,780 6,304 292,178 298,482 1,908,432 1,538,074 3,446,506 1,786,577 1,402,962 3,189,539 Unallocated costs Interconnection and other direct expenses (1,135,426) (1,058,728) Network and other operational expenses (458,193) (446,591) Employees’ salaries and benefits (301,048) (288,701) Depreciation and amortisation (717,582) (665,609) Share of profit of equity-accounted investee 5,399 - Expected credit losses (44,364) (31,349) Finance costs (25,760) (33,516) Other financing costs (21,901) (27,292) Other income 26,469 23,985 Profit before tax related fees 774,100 661,738 Tax related fees (72,497) (61,075) Profit for the year 701,603 600,663
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 23 5 REVENUES 2025 2024 QR’000 QR’000 Revenue from post-paid mobile services 1,344,908 1,308,423 Revenue from pre-paid mobile services 577,731 529,460 Revenue from broadband, roaming, wholesale and managed services 1,048,654 992,745 Sale of equipment, related services and accessories 460,960 350,329 Other revenues 14,253 8,582 3,446,506 3,189,539 The Group derives its revenue from contracts with customers for the transfer of goods and services over time and at a point in time in the following major product lines: 2025 2024 QR’000 QR’000 Disaggregation of revenue – over time Post-paid mobile services 1,344,908 1,308,423 Pre-paid mobile services 577,731 529,460 Broadband, roaming, wholesale and managed services 1,048,654 992,745 Sale of equipment, related services and accessories 112,902 57,240 Other revenues 3,531 3,189 3,087,726 2,891,057 Disaggregation of revenue – at a point in time Sale of equipment, related services and accessories 348,058 293,089 Other revenues 10,722 5,393 358,780 298,482 Total revenue 3,446,506 3,189,539 The amount of revenue recognised for the year ended 31 December 202 5 from unsatisfied performance obligations (or partially satisfied) of previous year is QR 82.4 million (2024: QR 100.4 million). Unsatisfied performance obligations (contract liability) are short term in nature (one year or less) refer to note 25.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 24 6 INTERCONNECTION AND OTHER DIRECT EXPENSES 2025 2024 QR’000 QR’000 Interconnection, managed services and roaming costs 434,686 469,158 Equipment and other direct costs 448,417 355,514 Commissions and dealers’ costs (i) 184,798 168,947 Regulatory costs 67,525 65,109 1,135,426 1,058,728 (i) Commissions and dealers cost includes employees’ sales incentives and commissions of QR 8.9 million, (2024: QR 10.2 million). 7 NETWORK AND OTHER OPERATIONAL EXPENSES 2025 2024 QR’000 QR’000 Other operational and network expenses (i) 428,544 419,870 Leased lines, capacity, and short-term leases 29,649 26,721 458,193 446,591 (i) This includes auditor’s remuneration comprising of fees for the audit of the financial statements amounting to QR 0.43 million (2024: QR 0.43 million) and fees for non-audit services amounting to QR 0.35 million (2024: QR 0.35 million). 8 OTHER FINANCING COSTS 2025 2024 QR’000 QR’000 Unwinding of lease liabilities (note 14) 15,922 18,353 Unwinding of asset retirement obligations (note 24.2) 2,743 3,297 Unwinding of discounted portion of a liability 1,006 4,775 Financing fees against loans and borrowing 2,230 867 21,901 27,292 9 OTHER INCOME 2025 2024 QR’000 QR’000 Gain on settlement of leases (note 14) 10,681 - Financing income (i) 7,698 10,637 Profit from Mudaraba 5,439 812 Gain on remeasurement of asset retirement obligation - 6,917 Others (ii) 2,651 5,619 26,469 23,985 (i) Financing income is recognized on long-term receivables (note 16) that have significant financing component at the rate mentioned in the agreement with the customer. (ii) This includes interest income received from conventional banks amounting to QR 344 thousands, (2024: QR 106 thousands).
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 25 10 TAX RELATED FEES 2025 2024 QR’000 QR’000 Industry fees (i) 72,134 60,744 Income tax 363 331 72,497 61,075 (i) In accordance with its operating licenses for Public Telecommunications Networks and Services granted in Qatar by Communications Regulatory Authority (CRA), the Company is liable to pay to the CRA an annual industry fee which is calculated at 12.5% of adjusted net profit from regulated activities. (ii) Qatar, the jurisdiction of the Group, has adopted the Base Erosion and Profit Shifting (BEPS) Pillar Two Anti-Global Base Erosion ("GloBE") Rules. These rules incorporate multiple mechanisms designed to ensure that large multinational enterprises (MNEs) maintain a minimum effective tax rate of 15% (Global Minimum Tax - GMT), calculated based on net profits in each jurisdiction where an entity operates. The Group has conducted an impact assessment and concluded that it does not qualify as an MNE under the BEPS framework. Consequently, the GloBE Rules do not apply to the Group, and hence there is no financial impact. 11 BASIC AND DILUTED EARNINGS PER SHARE 2025 2024 Profit for the year (QR ‘000) 701,603 600,663 Weighted average number of ordinary shares (in thousands) 4,227,000 4,227,000 Basic and diluted earnings per share (QR) 0.166 0.142 There is no dilutive element and hence the basic and diluted shares are the same.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 26 12 PROPERTY, PLANT AND EQUIPMENT Network and equipment Furniture and fixtures Vehicles Assets under construction Total QR’000 QR’000 QR’000 QR’000 QR’000 Cost: Balance at 1 January 2024 3,754,716 332,056 2,501 298,497 4,387,770 Additions 13,988 9,744 102 361,130 384,964 Disposals (11,311) (1,955) (100) - (13,366) Write offs (12,594) - - - (12,594) Transfer 406,654 5,436 (861) (411,229) - Balance at 31 December 2024 4,151,453 345,281 1,642 248,398 4,746,774 Additions 40,136 2,869 400 359,183 402,588 Disposals (5,944) (1,480) - - (7,424) Write off (1,146,911) (234,577) - - (1,381,488) Reclassifications to intangible assets (note 13) (41,751) (205) - - (41,956) Transfer 408,389 12,849 - (421,238) - Balance at 31 December 2025 3,405,372 124,737 2,042 186,343 3,718,494 Accumulated depreciation: Balance at 1 January 2024 2,181,028 271,529 748 - 2,453,305 Depreciation 333,391 23,052 316 - 356,759 Disposals (6,897) (1,955) (27) - (8,879) Write offs (12,594) - - - (12,594) Transfer 136 - (136) - - Balance at 31 December 2024 2,495,064 292,626 901 - 2,788,591 Depreciation 354,455 23,828 280 - 378,563 Disposals (5,944) (1,480) - - (7,424) Write off (1,146,911) (234,577) - - (1,381,488) Reclassifications to intangible assets (note 13) (18,628) (205) - - (18,833) Balance at 31 December 2025 1,678,036 80,192 1,181 - 1,759,409 Net book value: At 31 December 2025 1,727,336 44,545 861 186,343 1,959,085 At 31 December 2024 1,656,389 52,655 741 248,398 1,958,183
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 27 13 INTANGIBLE ASSETS License Software Indefeasible right-to-use Total QR’000 QR’000 QR’000 QR’000 Cost: Balance at 1 January 2024 7,726,000 474,757 61,507 8,262,264 Additions - 56,056 - 56,056 Write offs - (13,306) - (13,306) At 31 December 2024 7,726,000 517,507 61,507 8,305,014 Additions - 132,437 - 132,437 Reclassifications from property plant and equipment (note 12) - 41,956 - 41,956 Write offs - (118,953) - (118,953) Balance at 31 December 2025 7,726,000 572,947 61,507 8,360,454 Accumulated amortisation: Balance at 1 January 2024 3,997,136 193,437 34,304 4,224,877 Amortisation 84,093 108,407 5,930 198,430 Write offs - (13,306) - (13,306) Balance at 31 December 2024 4,081,229 288,538 40,234 4,410,001 Amortisation 84,093 141,632 5,930 231,655 Reclassifications from property plant and equipment (note 12) - 18,833 - 18,833 Write offs - (118,953) - (118,953) Balance at 31 December 2025 4,165,322 330,050 46,164 4,541,536 Net book value: At 31 December 2025 3,560,678 242,897 15,343 3,818,918 At 31 December 2024 3,644,771 228,969 21,273 3,895,013 13.1 The license mainly represents mobile license from CRA, which is valid till 2068. 13.2 The net book value of software includes software under development amounting to QR 72.7 million (2024: QR 25 million) which is eligible for amortisation.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 28 14 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES The Group leases various network assets, buildings, offices and ducts. Rental contracts are typically for fixed periods of 5-20 years with an option to renew the lease after that date. Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year: Network assets Buildings / offices Duct access Total QR000 QR000 QR000 QR000 As at 1 January 2024 288,084 97,148 43,367 428,599 Additions 18,108 8,731 10,988 37,827 Modification (5,647 ) 463 2,518 (2,666 ) Reduction on early termination (15,898 ) (213 ) - (16,111 ) Depreciation expense (72,280 ) (25,886 ) (12,254 ) (110,420 ) As at 31 December 2024 212,367 80,243 44,619 337,229 As at 1 January 2025 212,367 80,243 44,619 337,229 Additions 154,646 12,555 408 167,609 Modification (17,060) 3,896 9,166 (3,998) Reduction on early termination (4,286) (3,553) - (7,839) Depreciation expense (70,729) (25,413) (11,222) (107,364) As at 31 December 2025 274,938 67,728 42,971 385,637 Below is the movement in lease liabilities: 2025 2024 QR’000 QR’000 Balance at 1 January 376,674 471,395 Additions during the year 167,609 37,827 Interest expense on lease liabilities 15,922 18,353 Modification (3,998) (3,039) Reduction on early termination (9,403) (17,635) Settlement / offsetting of balances (10,681) (12,760) Paid during the year (144,116) (117,467) Balance at 31 December 392,007 376,674 Presented in consolidated statement of financial position as: Non-current lease liabilities 257,300 226,948 Current lease liabilities 134,707 149,726 392,007 376,674
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 29 15 EQUITY-ACCOUNTED INVESTEE The Group through its subsidiary company, Infinity Solutions L.L.C., acquired 51% of the shares of Sirti Mena for Projects W.L.L, (“Acquiree”) on 4 December 2025 (“date of acquisition”) for a total consideration of QR 51. The acquiree is a company registered in the State of Qatar under Commercial Registration Number 60018 in accordance with the provisions of the Qatar Commercial law No. 08 of 2021. The acquiree specializes in the design and implementation of network infrastructure and systems integration solutions, providing telecommunications and technology solutions, and offers comprehensive expertise in infrastructure and security systems integration. The Group’s interest in Sirti Mena for Projects W.L.L, is accounted for using the equity method in the consolidated financial statements. The financial information presented below includes the results of the acquiree for the period from 4 December 2025 to 31 December 2025. Since Sirti Mena for Projects W.L.L. was acquired on 4 December 2025, the financial information of 2024 is not presented. 2025 QR’000 Percentage ownership interest 51% Non-current assets 194 Current assets 53,845 Non-current liabilities (4,538) Current liabilities (38,914) Net assets 10,587 Group’s share of net assets (51%) 5,399 Carrying amount of the equity-accounted investee 5,399 The financial information presented below represents the results of acquiree for the period from the date of acquisition to 31 December 2025: For the period from 4 December 2025 till 31 December 2025 QR’000 Revenue 20,262 Profit for the period 980 Other comprehensive income for the period - Total comprehensive income for the period 980 Group’s share of total comprehensive income (51%) 500
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 30 15 EQUITY-ACCOUNTED INVESTEE (CONTINUED) The carrying amount of investments in equity-accounted investee, is calculated using the equity method as follows: 2025 QR’000 Cost of acquisition - Share of profit (i) 5,399 Balance at 31 December 5,399 (i) The share of profit includes share of total comprehensive income of QR 0.5 million and excess fair value share over the cost of equity-accounted investee of QR 4.9 million. 16 TRADE AND OTHER RECEIVABLES 2025 2024 QR’000 QR’000 Non-current assets: Trade receivables 124,753 162,922 Advances for indefeasible right of use 54,203 54,203 Prepayments 18,227 10,038 Contract assets (iii) 18,194 - Deposits 7,887 8,468 223,264 235,631 Current assets: Trade receivables – net (i) (ii) 400,149 402,200 Contract assets-net (iii) 134,301 42,343 Prepayments 25,134 28,743 Due from related parties (note 26) 10,758 16,766 E-Wallet due from financial institutions 10,568 3,905 Advances to payment service providers 7,286 - Forward contract assets 2,356 - Other receivables– net (ii) 6,339 2,534 596,891 496,491 (i) Trade receivables include financing income receivable amounting to QR 6.8 million (2024: QR 10.6 million). (ii) Trade receivables and other receivables are net of the expected credit losses (ECL) amounting to QR 202.4 million (2024: QR 159.8 million). The gross value of trade and other receivables are QR 1,022.6 million (2024: QR 891.9 million). No interest is charged on outstanding trade receivables except for certain receivables which are long term in nature. The Group measures the loss allowance for trade receivables component at an amount equal to lifetime ECL. The expected credit losses on trade receivables without significant financing component are estimated using a provision matrix by reference to past default 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 as the forecast direction of conditions at the reporting date. The receivables usually have settlement terms within 30- 90 days. The Group has recognised a loss allowance of 100% against all non-government receivables over 180 days past due because historical experience has indicated that recovery from these receivables are negligible.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 31 16 TRADE AND OTHER RECEIVABLES (CONTINUED) The expected credit losses on trade receivables with significant financing component are estimated for lifetime ECL by reference to the debtor credit risk. The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proc eedings, or when the trade receivables are over two years past due, whichever occurs earlier. Measurement of the expected credit loss allowance The measurement of the expected credit loss allowance for financial assets measured at amortised cost is an area that requires the use of complex models and significant assumptions about future economic conditions and credit behaviour (e.g. the likelihood of customers defaulting and the resulting losses). Elements of the ECL models that are considered accounting judgments and estimates include: • development of ECL models, including the various formulas and choice of inputs • determining the criteria if there has been a significant increase in credit risk, therefore allowances for financial assets should be measured on a lifetime ECL basis and the qualitative assessment • the segmentation of financial assets when their ECL is assessed on a collective basis • determination of associations between macroeconomic scenarios and, economic inputs, and their effect on probability of default (PDs), exposure at default (EADs) and loss given default (LGDs) ; and • selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic inputs into the ECL models. It has been the Group’s policy to regularly review its models in the context of actual loss experience and adjust when necessary. The following table details the risk profile of trade receivables, contract assets and other receivables based on the Group’s provision matrix (including expected credit loss on government related trade and other receivables and contract assets capped at 5.2%). 31 December 2025 Not Due Up to 30 days 31 – 90 days 91–180 days Above 180 days Total QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 Expected credit loss rate 0%-3% 4%-7% 10%-61% 22%-80% 100% Lifetime expected credit loss 297,474 187,422 61,480 60,007 279,757 886,140 Loss allowance 1,621 9,722 8,891 13,557 168,613 202,404 31 December 2024 Not due Up to 30 days 31– 90 days 91–180 days Above 180 days Total QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 Expected credit loss rate 0% 4%-7% 10%-61% 17%-80% 100% Lifetime expected credit loss 275,985 106,781 90,454 79,744 216,873 769,837 Loss allowance - 7,715 10,150 13,760 128,213 159,838
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 32 16 TRADE AND OTHER RECEIVABLES (CONTINUED) There is no loss allowance provided against cash at bank, and due from related parties as there is no material expected credit loss risk associated with these financial assets. The expected credit loss on government related trade and other receivables is capped at 5.2%. The following table shows the movement in expected credit losses that was recognised against trade receivables and other receivables: 2025 2024 QR’000 QR’000 Balance at beginning of the year 159,838 126,329 Expected credit loss recognised during the year 44,364 31,349 Collection from previously written off balances 1,615 2,160 Write offs during the year (3,413) - Balance at end of the year 202,404 159,838 Information about the Group’s exposure to credit and market risks, and impairment losses for trade and other receivables is included in note 27. (iii) Amounts relating to contract assets are balances earned but not yet billed to the customers. Any amount previously recognized as a contract asset is reclassified to trade receivables at the point at which it is invoiced to the customer. Payment for telecommunication services is not due from the customer until the bill cycle is complete and therefore a contract asset is recognized over the period in which the telecommunication services are performed to represent the Group’s right to consideration for the services transferred to date. The management of the Group always measures the loss allowance on amounts due from customers at an amount equal to lifetime ECL, taking into account the historical default experience and the future prospects. 17 INVENTORIES 2025 2024 QR’000 QR’000 Handsets 44,842 40,081 Accessories and other equipment 17,306 10,133 62,148 50,214 Inventory is reported net of allowance for obsolescence, an analysis of which is as follows: 2025 2024 QR’000 QR’000 Balance at 1 January 10,163 7,182 Allowance for obsolescence (reversed) /charged for the year (864) 3,392 Write offs during the year (2,219) (411) Balance at 31 December 7,080 10,163 During the year, inventories of QR 334.9 million (2024 QR 282.6) were recognised as an expense during the year and included in the equipment and other direct costs – note 6. Inventories include other equipment held at third-party’s premise amounting to QR 14.0 million, (2024: nil).
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 33 18 CONTRACT COSTS 2025 2024 QR’000 QR’000 Incremental customers’ acquisition cost (i) 31,060 31,764 Cost of unfulfilled performance obligation 2,684 11,311 33,744 43,075 (i) Information about the Group’s estimation of the customers’ average retention period used in the amortization of the incremental customers’ acquisition cost, is included in note 29. 19 CASH AND CASH EQUIVALENTS Cash and bank balances at the end of the financial year as shown in the consolidated statement of cash flows are as follows: 2025 2024 QR’000 QR’000 Cash at bank 517,924 144,933 Cash on hand 77 77 Total cash and bank balances in the consolidated statement of financial position 518,001 145,010 Less: Balance with restricted bank accounts – note (i) (103,208) (47,595) Cash and cash equivalents in the consolidated statement of cash flows 414,793 97,415 (i) Restricted bank accounts comprise of funds maintained for uncollected shareholder dividends of QR 19.4 million, (2024: QR 21 million), (note 25) and escrow bank accounts of QR 83.8 million, not available for the use of the Group (2024: QR 26.5 million). (ii) Purchase of intangible assets amounting to QR 171.4 million (2024: QR 95.1 million), as disclosed in consolidated statement of cash flows, includes a payment of QR 39 million (2024: QR 39 million) against a software acquired during 2023 amounting to QR 105 million on deferred payment basis.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 34 20 SHARE CAPITAL 2025 2024 Number QR’000 Number QR’000 Ordinary shares authorised, allotted, issued and fully paid: Ordinary shares of QR 1 each 4,227,000,000 4,227,000 4,227,000,000 4,227,000 All shares have equal rights. 21 LEGAL RESERVE AND RETAINED EARNINGS The Company was incorporated under Article 68 of the Qatar Commercial Companies’ Law No. 5 of 2002. This law was subsequently replaced by Qatar Commercial Companies Law No.8 of 2021. The Articles of Association of the Company were amended after the introduction of Qatar Commercial Companies Law No.8 of 2021 and subsequently approved by the Ministry of Commerce and Industry. The legal reserve and distributable profits of the Company are determined in line with Article 75 and 76 of its Article of Association. Legal reserve: The excess of issuance fees collected over the issuance cost during the initial public offering of the ordinary shares has been transferred to the legal reserve as required by Article 154 of Qatar Commercial Companies Law No. 5 of 2002. Further, as per the Articles of Association of the Company, 5% of annual distributable profits of the Company should be transferred to a separate legal reserve. The General Assembly may discontinue this deduction if the legal reserve reaches 10% of the paid-up capital. The legal reserve may not be wholly or partially distributed to the shareholders or capitalized, except upon the recommendation of the board of directors and approval of the annual general assembly of shareholders. Distributable profits: As per the Articles of Association of the Company, distributable profits are defined as the reported net profit/loss of the Company for the financial year plus amortisation of license fees for the year. Undistributed profits are carried forward and are available for distribution in future periods . The movement in the balance of distributable profits is as follows:
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 35 21 LEGAL RESERVE AND RETAINED EARNINGS 2025 2024 Retained earnings Retained earnings Distributable profits Accumulated losses Total Distributable profits Accumulated losses Total QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 Balance as at 1 January 1,235,052 (596,980) 638,072 1,063,093 (511,384) 551,709 Net profit of the Group - 701,603 701,603 - 600,663 600,663 Transfer to distributable profits -note 21.1 778,588 (778,588) - 686,259 (686,259) - Transfer to legal reserve (38,929) - (38,929) (34,313) - (34,313) Dividends declared for the year 2024/2023 (507,240) - (507,240) (464,970) - (464,970) Contribution to Social and Sports fund -note 21.2 (17,540) - (17,540) (15,017) - (15,017) Balance as at 31 December 1,449,931 (673,965) 775,966 1,235,052 (596,980) 638,072 21.1 Transfer to distributable profits 2025 2024 QR’000 QR’000 Net profit of the Company 694,495 602,166 License fee amortisation 84,093 84,093 Total 778,588 686,259 21.2 Social and Sports Fund According to Qatar Law No. 13 for the year 2008 and the related clarifications issued in January 2010 the Group is required to contribute 2.5% of annual net profits of the Group to the State Social and Sports Fund. The clarification relating to Law No. 13 requires the payable amount to be recognised as an appropriation of profit directly in the consolidated statement of changes in equity.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 36 22 HEDGING RESERVE The Group designated foreign currency forward contracts as cash flow hedge to manage the risk associated with highly probable future payments in the Euro currency. The forecasted purchases are expected to occur between March 2026 and June 2028. For the year ended 31 December 2025, the effective portion of gain on cash flow hedge is QR 7.7 million (2024: loss of QR 5.3 million) and is included in the consolidated statement of comprehensive income. 23 LOANS AND BORROWINGS Type Currency Profit rate Maturity 2025 2024 QR’000 QR’000 Secured (i) QR QMRL - Margin 31 August 2026 376,639 352,060 Secured (ii) QR QMRL - Margin 9 September 2027 65,061 25,338 441,700 377,398 2025 2024 QR’000 QR’000 Balance at beginning of the year 377,398 429,868 Proceeds during the year 325,000 440,000 Repayments during the year (260,000) (492,500) Finance cost incurred during the year 25,760 33,516 Finance cost paid during the year (26,458) (33,486) 441,700 377,398 Presented in the consolidated statement of financial position as: Non-current liabilities 65,000 375,000 Current liabilities 376,700 2,398 441,700 377,398 (i) The Group has a rollover Islamic financing facility of QR 1,211 million for general corporate purposes and capital expenditure (the “Rollover Facility”), The facility is secured over assets agreement and receivable asset agreement with carrying amount of QR 50 million. The rollover facility mandates compliance with a covenant requiring the total debt to EBITDA (earnings before interest, tax, depreciation and amortisation) ratio less than 2.5:1. (ii) The Group has a Murabaha working capital (revolving) facility agreement with a local bank of QR 500 million (the “Murabaha Facility”), for working capital requirements. The Murabaha’s Facility principal is to be paid in bullet at final maturity and is secured over assignment of proceeds. The Murabaha Facility mandates compliance with a covenant requiring the net debt to EBITDA ratio less than 2.5:1. The Group has complied with covenant requirement of the above financing facilities during the year ended 31 December 2025. Information about the Group’s exposure to interest rates and liquidity risks is included in note 27.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 37 24 PROVISIONS 2025 2024 QR’000 QR’000 Employees’ end of service benefits (note 24.1) 73,853 67,784 Asset retirement obligations (note 24.2) 45,643 42,102 119,496 109,886 24.1 Employees’ end of service benefits 2025 2024 QR’000 QR’000 Balance at 1 January 67,784 62,099 Charge for the year 10,202 9,490 Payments during the year (4,133) (3,805) Balance at 31 December 73,853 67,784 Management has classified the obligation within non -current liabilities in the consolidated statement of financial position as it does not expect that there will be significant payments towards its employees’ end of service benefits obligation within 12 months from the reporting date. 24.2 Asset retirement obligations 2025 2024 QR’000 QR’000 Balance at 1 January 42,102 48,334 Net addition to the provision during the year 798 1,429 Unwinding of discount 2,743 3,297 Derecognition of asset retirement obligation - (10,958) Balance at 31 December 45,643 42,102 25 TRADE AND OTHER PAYABLES 2025 2024 QR’000 QR’000 Trade payables 509,057 520,214 Accruals 523,241 463,003 Regulatory and industry fee 123,508 109,631 Contract liabilities (i) 111,380 82,377 Electronic wallet balances 62,059 18,896 Dividend payable 19,405 21,058 Payable to social and sports fund (note 21.1) 17,540 15,017 Due to related parties (note 26) 34,718 29 Forward contract liability - 5,308 Other payables 12,625 9,491 1,413,533 1,245,024 (i) The contract liabilities primarily relate to the advance consideration received from customers for access charges, airtime usage, messaging, data broadband services and other services for which revenue is recognised over time.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 38 26 RELATED PARTY TRANSACTIONS Related parties represent major shareholders, directors and key management personnel of the Group and companies controlled or jointly controlled by those parties. The following transactions were carried out with related parties: 2025 2024 QR’000 QR’000 Sales of goods and services Affiliate entities 21,295 22,363 Purchases of goods and services Equity-accounted investee 23,996 - Affiliate entities 9,306 9,841 33,302 9,841 Goods and services are bought from related parties at prices approved by management, as being on an arm's length basis. Balances arising from transactions with related parties are as follows: 2025 2024 QR’000 QR’000 Due from related parties: Affiliate entities 10,758 16,766 Due to related parties: Equity-accounted investee 34,659 - Affiliate entities 59 29 34,718 29 The receivables from related parties arise mainly from sale transactions which are unsecured in nature and bear no interest. Compensation of key management personnel Key management personnel include the Board of Directors, Managing Director, Chief Executive Officer (CEO) and the executives who directly report to the CEO. Compensation of key management personnel are as follows: 2025 2024 QR’000 QR’000 Salaries and short-term benefits 53,190 46,750 Employees' end of service benefits 941 932 54,131 47,682
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 39 27 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT The Group’s board of directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The board of directors has established the risk management committee, which is responsible for developing and monitoring the Group's risk management policies. The committee reports regularly to the board of directors on its activities. The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The Group ’s Audit Committee oversees how management monitors compliance with the Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group ’s Audit Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee. Capital management The following table summarises the capital structure of the Group: 2025 2024 QR’000 QR’000 Loans and borrowings 441,700 377,398 Cash and cash equivalents (414,793) (97,415) Net debt 26,907 279,983 Total equity 5,236,351 5,051,864 Gearing ratio 0.51% 5.54% Capital Management The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. Financial instruments Material accounting policies Details of material policies and methods adopted including the criteria for recognition for the basis of measurement in respect of each class of financial assets and financial liabilities are disclosed in note 3 to these consolidated financial statements.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 40 2 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Categories of financial instruments Carrying value 2025 2024 QR’000 QR’000 Financial assets at amortised cost: Trade receivables -net 524,902 565,122 Cash and bank balances 518,001 145,010 Due from related parties 10,758 16,766 E-Wallet due from financial institutions 10,568 3,905 Deposits 7,887 8,468 Advances to payment service providers 7,286 - Other receivables - net 6,339 2,534 1,085,741 741,805 Financial liabilities at amortised cost: Trade payables 509,057 520,214 Loans and borrowings 441,700 377,398 Lease Liabilities 392,007 376,674 Electronic wallet balances 62,059 18,896 Due to related parties 34,718 29 Other payables 12,625 9,491 1,452,166 1,302,702 Financial assets and liabilities at fair value: Forward contract asset 2,356 - Forward contract liability - 5,308 2,356 5,308 Fair value of financial instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using anothe r valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants take those characteristics into account when pricing the asset or liability at the measurement date. The fair values of financial assets and financial liabilities are determined as follows: • The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market bid prices at the close of the business on the reporting date. • The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. Fair value measurements are analysed by levels in the fair value hierarchy as follows: • Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). • Level 3 – Inputs for the asset or liability that are not based on observable market data (that is, unobserved inputs).
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 41 27 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Fair value of financial instruments (continued) Level 1 Level 2 Level 3 Total 31 December 2025 QR’000 QR’000 QR’000 QR’000 Financial liabilities measured at fair value Forward contract assets - 2,356 - 2,356 Level 1 Level 2 Level 3 Total 31 December 2024 QR’000 QR’000 QR’000 QR’000 Financial liabilities measured at fair value Forward contract liability - 5,308 - 5,308 Management believes that the carrying values of its financial assets and financial liabilities as at the reporting date are a reasonable approximation of their fair values. Reconciliation of liabilities arising from financing activities The below table details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes: At 1 January 2025 Net financing cash flows Non-cash changes* At 31 December 2025 QR’000 QR’000 QR’000 QR’000 Loans and borrowings 377,398 65,000 (698) 441,700 Lease liabilities 376,674 (144,116) 159,449 392,007 Dividend payable 21,058 (508,893) 507,240 19,405 Restricted dividend bank account (21,058) 1,653 - (19,405) At 1 January 2024 Net financing cash flows Non-cash changes* At 31 December 2024 QR’000 QR’000 QR’000 QR’000 Loans and borrowings 429,868 (52,500) 30 377,398 Lease liabilities 471,395 (117,467) 22,746 376,674 Dividend payable 25,251 (469,163) 464,970 21,058 Restricted dividend bank account (25,251) 4,193 - (21,058) *This comprises finance cost net of payment , additional lease liability recognized and interest on lease liability net of terminations and modifications, in addition to dividend declared.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 42 27 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Financial Risk Management Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Foreign currency risk management The Group undertakes certain transactions denominated in foreign currencies and hence exposed to risks on exchange rate fluctuations. The use of financial derivatives is governed by the Group’s policies, which provide written principles on the use of financial derivatives consistent with the Group’s risk management strategy. The Group's risk management strategy involves mitigating currency risk exposure through the use of forward exchange contracts. These contracts are typically designated as cash flow hedges. The Group designates the spot element of forward foreign exchange contracts to hedge its currency risk and applies a hedge ratio of 1:1. The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. The Group assesses whether the derivative designated in each hedging relationship is expected to be and has been effective in offsetting changes in cash flows of the hedged item. In these hedge relationships, the main sources of ineffectiveness are: • the effect of the counterparties’ and the Group’s own credit risk on the fair value of the forward foreign exchange contracts, which is not reflected in the change in the fair value of the hedged cash flows attributable to the change in exchange rates; and • changes in the timing the hedged transaction. Majority of foreign currency receivable/payable balances are in U nited states Dollars (USD) , which is pegged against Qatari riyals (QR). Therefore, these receivable/payable balances are not exposed to foreign currency exchange rate fluctuation risk. The Group has a minimal exposure of receivable/payable balances in Euro and other currencies where effect of any 10% increase/decrease in foreign exchange rates is expected to be in the range of QR 2.5 million (2024: QR 0.8 million). Cash flow hedge: At 31 December 202 5, the Group held the following instrument to hedge exposure to changes in foreign currency.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 43 27 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Financial Risk Management (continued) 31 December 2025 Maturity 1-6 months 6-12 months More than one year Total Euro’000 Euro’000 Euro’000 Euro’000 Foreign currency risk Forward exchange contract- Net exposure 2,739 3,659 10,694 17,092 Average QR: Euro forward contract rate 4.11 4.15 4.22 31 December 2024 Maturity 1-6 months 6-12 months More than one year Total Euro’000 Euro’000 Euro’000 Euro’000 Foreign currency risk Forward exchange contract- Net exposure 3,316 2,739 15,722 21,777 Average QR: Euro forward contract rate 4.05 4.09 4.19 The following provides a movement of other comprehensive income items, resulting from cash flow hedge accounting. Hedging reserve 2025 2024 QR’000 QR’000 Balance at 1 January (5,308) - Changes in fair value due to foreign currency risk 7,664 (5,308) Balance at 31 December 2,356 (5,308) Interest rate risk management The Group is liable to pay interest on financing facilities, which is aggregate of the applicable margin and QMR-L. Every one percent rise or fall in the applicable interest rate against the QMRL of the financing facilities, would increase or reduce the to tal profit of the Group for the financial year by QR 4.4 million (2024: QR 3.8 million). Credit risk management Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group’s exposure and the creditworthiness of its counterparties are continuously monitored, and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by management. Trade and other receivables and contract assets Trade receivables consist of a large number of customers (both consumers and enterprises). The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate. The Group does not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are related entities.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 44 27 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Credit risk management (continued) At 31 December, the exposure to credit risk for gross trade and other receivables by type of counter party was as follows: 2025 2024 QR’000 QR’000 Enterprise customers (i) 612,319 525,367 Consumers 273,821 244,470 886,140 769,837 (i) Enterprise customers’ trade receivables include a balance of QR 60.6 million (2024: 46.1 million) of which no expected credit loss was recognised because of collaterals provided with a value of QR 75 million, (2024: QR 75 million). Movement in provision for expected credit losses account is presented in note 16. Bank balances The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. ECL on bank balances has been measured on a 12-months expected loss basis and reflects the short maturities of the exposures. The Group considers that its bank balances have low credit risk based on the external credit ratings of the counterparties. Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is: Carrying amount 2025 2024 QR’000 QR’000 Bank balances 517,924 144,933 Trade and other receivables -net 694,494 613,904 1,212,418 758,837 Liquidity risk management Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages liquidity risk by maintaining adequate reserves and adequate loans and borrowings, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The table below analyses the Group’s financial liabilities based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 45 27 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Liquidity risk management (continued) At 31 December 2025 Less than 1 year More than 1 year QR’000 QR’000 Trade payables 509,057 - Loans and borrowings 376,700 65,000 Lease liabilities 134,707 257,300 Electronic wallet balances 62,059 - Due to related parties 34,718 - Other payables 12,625 - 1,129,866 322,300 At 31 December 2024 Less than 1 Year More than 1 year QR’000 QR’000 Trade payables 520,214 - Loans and borrowings 2,398 375,000 Lease liabilities 149,726 226,948 Electronic wallet balances 18,896 - Due to related parties 29 - Other payables 9,491 - 700,754 601,948 28 COMMITMENTS AND CONTINGENT LIABILITIES Commitments 2025 2024 QR’000 QR’000 Contracts placed for future capital expenditure not provided for in the consolidated financial statements 298,471 93,197 Contingent liabilities 2025 2024 QR’000 QR’000 Performance bonds 43,822 44,682 Tender bonds 12,170 10,641 Credit and payment guarantee – third party indebtedness 54,516 49,316
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 46 28 COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED) Performance bonds Performance bonds require the Group to make payments to third parties in the event that the Group does not perform what is expected of it under the terms of any related contracts. Tender bonds This comprises bonds submitted at the time of submission of tenders. Credit and payment guarantee – third party indebtedness Credit guarantees comprise guarantees and indemnity of bank or other facilities. 29 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY The Group prepares its consolidated financial statements in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board, the application of which often requires judgments to be made by management when formulating the Group’s financial position and results. Under IFRS Accounting Standards, the management are required to adopt those accounting policies most appropriate to the Group’s circumstances for the purpose of presenting fairly the Group’s financial position, financial performance and cash flows. In determining and applying accounting policies, judgment is often required in respect of items where the choice of specific policy, accounting estimate or assumption to be followed could materially affect the reported results or net asset position of the Group should it later be determined that a different choice would be more appropriate. Management considers the accounting estimates and assumptions discussed below to be its critical accounting estimates and accordingly provide an explanation of each below. The discussion below should also be read in conjunction with the Group’s disclosure of material accounting policies, which is provided in note 3 to the consolidated financial statements. Impairment reviews IFRS Accounting Standards requires management to undertake an annual test for impairment of indefinite lived assets and, for finite lived assets, to test for impairment if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment testing is an area involving management judgment, requiring assessment as to whether the carrying value of assets can be supported by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of highly uncertain matters, including management’s expectations of: • growth in earnings before financing income/costs, tax, depreciation and amortisation, calculated as adjusted operating profit before depreciation and amortisation; • timing and quantum of future capital expenditure; • long term growth rates; • expected costs to renew the license; and • the selection of discount rates to reflect the risks involved. The Group has considered all the internal and external indicators to assess whether there are any indicators of impairment during the year. Based on assessment performed, the Group concluded that there have been no events or change in circumstances which indicates that carrying amounts of assets may not be recoverable. Hence, no impairment testing is performed.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 47 29 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONTINUED) Revenue recognition The Group give its customers the option to return the handsets within a period of 7 days of purchase. Keeping in view the negligible numbers of returns in the history, no provision is made with regard to return of goods sold. Revenue recognition: judgments in determining the timing of satisfaction of performance obligations Revenue and associated costs are recognised over time – i.e. before the performance obligation is fully complete. Revenue is recognised over time as the services are provided. Transfer of control of the service is assessed based on the service performed. Progress is determined based on the output method because the customer obtains control of the work in progress as the project specific milestones are achieved. Revenue presentation: gross versus net When deciding the most appropriate basis for presenting revenue and costs of revenue, both the legal form and substance of the agreement between the Group and its business partners are reviewed to determine each party’s respective role in the transaction. Where the Group’s role in a transaction is that of principal, revenue is recognised on a gross basis. This requires revenue to comprise the gross value of the transaction billed to the customer, after trade discounts, with any related expenditure charged as an operating cost. Where the Group’s role in a transaction is that of an agent, revenue is recognised on a net basis, with revenue representing the margin earned. Transit revenue is recognised on a gross basis as the Group assumes credit risk and acts as a principal in the transactions. Estimation of useful life and residual value The useful life used to depreciate/amortise assets relate to the future performance of the assets acquired and management’s judgement of the period over which economic benefit will be derived from the asset. The basis for determining the useful life for the most significant categories of tangible and intangible assets is as follows: Intangible assets The estimated useful life of license is generally the term of the licence unless there is a presumption of renewal at negligible cost. Using the licence term reflects the period over which the Group will receive economic benefit. For technology specific licences with a 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 consideration such factors as changes in technology. The management determines the estimated useful lives of its other intangible assets for calculating amortisation. This estimate is determined based on the expected pattern of consumption of future economic benefits embodied in the asset. Property, plant and equipment Property, plant and equipment represent s a significant proportion of the asset base of the Group being 25.77% (2024: 27.35%) of the Group’s total assets. Therefore, the estimates and assumptions made to determine their carrying value and related depreciation are critical to the Group’s financial position and performance. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. Increasing an asset’s expected life or its residual value would result in a reduced depreciation charge in the consolidated statement of income. The useful lives and residual values of the Group’s assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 48 29 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONTINUED) Estimation of useful life and residual value (continued) Property, plant and equipment (continued) During the year, the Group reassessed the useful lives of its property, plant and equipment, this has resulted in reassessment and reduction of useful life of some of the old assets and consequently higher deprecation charge of QR 53.3 million for the year (2024: QR 18.52 million), There will be no impact on future periods, as the net book values of these assets have been fully depreciated. During the year, the Group have reviewed the property, plant, equipment and intangible assets register, and have written of a total of QR 1.5 billion worth of assets that are fully depreciated. Contract cost The Group reviews its policy regarding the amortisation period for customer acquisition costs. The Group estimates the amortisation period based on the average Customers’ Retention Period, in accordance with IFRS 15 - Revenue from Contracts with Customers. The Group applies a practical expedient to recognise customer acquisition costs directly in the consolidated statement of income when the average customer retention period is one year or less. During the year, the Group have reassessed the Customers’ Retention Period, and there was no material change in the estimated period. Impairment of inventories Inventories are held at the lower of cost and net realisable value. When inventories become old or obsolete, an estimate is made of their net realisable value. Inventories which are old or obsolete, are assessed Individually a nd a provision applied according to the inventory type and the degree of ageing or obsolescence, based on historical selling prices. Asset retirement obligation A provision for asset retirement obligation exists where the Group has a legal or constructive obligation to remove an infrastructure asset and restore the site . Asset retirement obligation is recorded at the present value of expected costs to settle the obligation using estimated cash flows and is recognised as part of the particular asset. The cash flows are discounted at the rate that management considers reflects the risk specific to the asset retirement obligation i.e. 7.49% (2024: 7.49%). Subsequent to initial recognition, an unwinding expense relating to the provision is periodically recognised as a financing cost. While the provision is based on the best estimate of future costs and the useful lives of infrastructure assets, there is uncertainty regarding both the amount and timing of incurrence of these costs. Any subsequent change in the present value of the estimated cost due to changes in the gross removal costs or discount rates, is dealt with prospectively as a change in accounting estimate and reflected as an adjustment to the provision and a corresponding adjustment to the infrastructure assets. Expected credit losses An estimate of the collectible amount of trade receivables contract assets and other receivables are made when collection of the full amount is no longer probable. For individually significant amounts, this estimation is performed on an individual basis. Amounts which are not individually significant, but which are past due, are assessed collectively and a provision applied according to the length of time the amount has been due. Calculation of loss allowance When measuring ECL, the Group uses reasonable and supportable forward-looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other. Loss given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, taking into account cash flows from collateral and integral credit enhancements. 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.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 49 29 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONTINUED) Determining the lease term In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated), management performed reasonably certain period assessment, to determine the lease term. Discount rate on leases The lease payments are discounted using the Group’s incremental borrowing rate (“IBR”). Management has applied judgments and estimates to determine the IBR at the commencement of lease , the IBR during the year ended 31 December 2025 was 6% - 4% (31 December 2024: 6% - 4.43%). 30 APPLICATIONS OF NEW AND REVISED IFRS ACCOUNTING STANDARDS A number of new accounting standards are effective for annual reporting periods beginning after 1 January 2025 and earlier application is permitted. However, the Group has not early adopted the following new or amended accounting standards in preparing these consolidated financial statements. (i) New currently effective requirements The Group has applied the following new and revised IFRS Accounting Standards that have been issued and are effective for annual periods beginning on or after 1 January 2025: Effective date New standards or amendments 1 January 2025 Lack of Exchangeability – Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates The application of these amendments had no material impact on the Group’s consolidated financial statements. (ii) New and revised standards and interpretations issued but not yet effective The following new and amendments standards are not expected to have a significant impact on Group’s consolidated financial statements other than IFRS 18 ‘Presentation and Disclosure in Financial Statements’. Effective date New standards or amendments 1 January 2026 Classification and Measurement of Financial Instruments – Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7 Annual Improvements to IFRS Accounting Standards – Amendments to: • IFRS 1 First-time Adoption of International Financial Reporting Standards; • IFRS 7 Financial Instruments: Disclosures and its accompanying Guidance on implementing IFRS 7; • IFRS 9 Financial Instruments; • IFRS 10 Consolidated Financial Statements; and • IAS 7 Statement of Cash flows 1 January 2027 IFRS 18 Presentation and Disclosure in Financial Statements IFRS 19 Subsidiaries without Public Accountability: Disclosures IFRS for SMEs third edition IAS 21 The Effects of Changes in Foreign Exchange Rates To be determined (i) Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures. (i) The effective date for these amendments was deferred indefinitely. Early adoption continues to be permitted.
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 50 30 APPLICATIONS OF NEW AND REVISED IFRS ACCOUNTING STANDARDS (CONTINUED) A. IFRS 18 Presentation and Disclosure in Financial Statements IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies for annual reporting periods beginning on or after 1 January 2027. The new standard introduces the following key new requirements. • Entities are required to classify all income and expenses into five categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations and income tax categories. Entities are also required to present a newly -defined operating profit subtotal. Entities’ net profit will not change. • Management-defined performance measures (MPMs) are disclosed in a single note in the financial statements. • Enhanced guidance is provided on how to group information in the financial statements. In addition, all entities are required to use the operating profit subtotal as the starting point for the statement of cash flows when presenting operating cash flows under the indirect method. The Group is still in the process of assessing the impact of the new standard, particularly with respect to the structure of the Group’s statement of profit or loss, the statement of cash flows and the additional disclosures required for MPMs. The Group is also assessing the impact on how information is grouped in the financial statements, including for items currently labelled as ‘other’. B. Other accounting standards The following new and amended accounting standards are not expected to have a significant impact on the Group’s consolidated financial statements. • Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7); and • Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS. 31 DIVIDENDS Dividend declared for year 2024 During 2025, following the approval at the Annual General Assembly held on 2 4 February 202 5, the Company paid a cash dividend of 12% of the nominal share value amounting to QR 507 million (QR 0.12 per share with nominal value of QR 1 each). Proposed dividend for year 2025 The Board of Directors has proposed a cash dividend of 12% of the nominal share value amounting to QR 507 million (QR 0.12 per share with nominal value of QR 1 each). The proposed dividend is subject to approval of the shareholders during the Annual General Assembly on 01 March 2026. 32 OFFSETTING Financial assets and financial liabilities are offset, and the net amount presented in the consolidated statement of financial position when, and only when, the Group has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. As at the reporting date, the Group has presented financial assets net of financial liabilities, when they are subject to offsetting. Gross and net amounts presented in the consolidated statement of financial position are as follows:
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VODAFONE QATAR P.Q.S.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 51 32 OFFSETTING (CONTINUED) Gross amounts Offsetting amounts Net amounts QR’000 QR’000 QR’000 Current assets As at 31 December 2025 Trade and other receivables 618,074 (21,183) 596,891 As at 31 December 2024 Trade and other receivables 562,341 (65,850) 496,491 Gross amounts Offsetting amounts Net amounts QR’000 QR’000 QR’000 Current liabilities As at 31 December 2025 Trade and other payables 1,434,716 (21,183) 1,413,533 As at 31 December 2024 Trade and other payables 1,267,811 (22,787) 1,245,024 Lease liabilities 192,789 (43,063) 149,726 1,460,600 (65,850) 1,394,750 33 COMPARATIVE INFORMATION The comparative amounts and related disclosures have been reclassified, where necessary, in order to confirm to the current year’s presentation. Such reclassification does not affect the previously reported net profits, net assets, or equity, The reclassifications are as follows: Previous Presentation Reclassification Current Presentation QR’000 QR’000 QR’000 Current assets: E-Wallet due from financial institutions - 3,905 3,905 Other receivables– net 6,439 (3,905) 2,534