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ANNUAL R E P O R T 20 23

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Chairman’s Message Group CEO’s & Group MD’s Message 06 07

Management Summary 11

Directors’ Report 08 11 At a Glance Financial Review 12 15

12 15 Operational Metrics Our Story 16 20

Global Economic Outlook Growth and Expansion 22 24

Key Development of the Year 25

Corporate Strategy 26

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Core Values

Milestones and Achievements

Competitive Advantage

Corporate Governance

Consolidated Financial Statements for the year ended 31 December 2023 (including Notes)

Sustainability Initiative

Business Model

United Arab Emirates (UAE) Providing Landscape for Virtual Assets

Independent Auditor’s Report

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H.E. Tareq Abdulraheem Al Hosani

CHAIRMAN OF THE BOARD

On behalf of the board of directors and management team, I would like to express my sincere gratitude to our shareholders for their continued trust and support and the leadership of Abu Dhabi. Together, we will continue to build a brighter future for our company and create value for all stakeholders.

Thank you

MESSAGE

As we reflect on the past year, I am proud to report that it has been a remarkable journey for Phoenix Group. The landscape of cryptocurrency mining and investment has evolved rapidly, presenting both challenges and opportunities. In the face of this dynamic environment, our firm has demonstrated resilience, adaptability, and a steadfast commitment to our strategic vision.

Furthermore, as responsible corporate citizens, we recognize the importance of environmental stewardship in the crypto mining industry. We are implementing innovative solutions to minimize our carbon footprint and reduce energy consumption, while maintaining operational excellence and profitability. By prioritizing sustainability, we are not only fulfilling our ethical obligations but also positioning ourselves for long- term success in a rapidly changing world.

Throughout the year, we have taken bold steps to position ourselves as a leader in the crypto mining and investment sector in the MENA region. We have leveraged our expertise, technology, and resources to capitalize on emerging trends and seize opportunities for growth. Our relentless focus on innovation and efficiency has enabled us to navigate market fluctuations effectively and deliver value to our stakeholders.

Looking ahead, we are confident that our group is wellpositioned to capitalize on the opportunities that lie ahead in the crypto mining, blockchain and investment space. We will continue to prioritize innovation, sustainability, and diversification as we navigate the ever-evolving landscape of the digital economy. With the dedication and talent of our team, the support of our stakeholders and our unwavering commitment to excellence, I am confident that we will continue to achieve new heights of success in the years to come.

One of the key highlights of the past year has been our listing at ADX. The share was oversubscribed 33 times and achieved 50% price increase upon listing.

GROUP CEO AND GROUP MD

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Munaf Ali

Seyed Mohammad Alizadehfard (Bijan)

In hosting, our expertise lies in developing, operating, and maintaining state-of-the-art mining facilities, providing unparalleled computing power for generating digital assets. Furthermore, in trading, our exclusive distribution rights in the MENA region for leading technology hardware brands and accessories further solidify our market position.

We are thrilled to share with you the outstanding financial results of Phoenix Group PLC for the year 2023. Through our collective efforts and unwavering dedication, we have achieved remarkable success, positioning us as a leading force in the cryptocurrency mining and blockchain industry.

Lastly, our investment arm continues to play a pivotal role in expanding our business by strategically acquiring profitable ventures, investing in tech innovation and offerings, enhancing synergies within our core operations, and contributing to our bottom line.

At Phoenix, our mission remains steadfast: to continuously explore and implement more efficient approaches, ensuring we stay at the forefront of the ever-evolving blockchain industry. With passion, determination, and an unyielding pursuit of excellence, we are actively shaping the future of technology, one step at a time. Our strategic focus on our four core verticals—mining, hosting, trading, and investments—serves as the cornerstone of our vision. It is through these pillars that we are poised to achieve sustainable growth and future prosperity as a company.

Our investments in M2 Exchange and Lyvely exemplify our strategic direction and commitment to fostering technological innovation in the UAE. As we celebrate these achievements, we extend our heartfelt gratitude to each and every one of you, to our shareholders, stakeholders and the leadership of Abu Dhabi for the unwavering support. Together, let us continue to push boundaries, seize opportunities, and shape the future of crypto mining, tech innovation, blockchain and Web3 development.

Delving deeper into our core verticals, Phoenix today proudly stands as the largest miner in the MENA region.

We look forward to a prosperous 2024 further strengthening our position as a market leader in the region.

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

DIRECTORS’ REPORT

The Directors have the pleasure in submitting this report, together with the audited consolidated financial statements of the Phoenix Group PLC (the “Company”) and its subsidiaries (collectively referred to as the “Group”) for the year ended 31 December 2023.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD) DIRECTORS’ REPORT

Transactions with related parties

Related party transactions are carried out as part of our normal course of business and in compliance with applicable laws and regulations. Related party transactions are disclosed in note 21 of the consolidated financial statements.

Principal activities

Role of the Directors

The Group is a technology conglomerate bringing cutting-edge blockchain solutions to an expansive market. The Group offers a comprehensive range of services, from high-performance computing machines trading and data centre hosting. The Group develops, operates, and manages highly specialised data centres, hosting high-performance computing power for digital asset across the UAE, Oman, US and Canada. Additionally, the Group also hosts, operates and maintains equipment within its existing data centres and enables investment opportunities within cloud mining.

The Directors are the Group’s principal decision-making forum. The Directors have the overall responsibility for leading and supervising the Group for delivering sustainable shareholder value through their guidance and supervision of the Group’s business. The Directors set the strategies and policies of the Group. They monitor performance of the Group’s business, guide and supervise its management.

Going concern

The Group is the exclusive distributor of industry-leading equipment manufacturer MicroBT and prominent distributor of Digital wallet Ledgers and CoolWallets, across the Middle East. The Group has four business verticals including trading, hosting, mining and investments.

Results for the year

For the year ended 31 December 2023, the Group reported revenue of USD 288,186,931 (2022 (unaudited: USD 754,962,342) and profit for the year attributable to the shareholders of USD 207,779,472 (2022 (unaudited): USD 138,877,130).

In 2023 the top line (revenue) was USD 288 million (2022 (unaudited): USD 754 million). The variance between 2023 and 2022 is attributed to a significant oneoff trading contract, which represented 68% of the sales in 2022. Normalising the 2022 sales for this one-off contract, year on year, increase in sales for 2023 was 20%. The net profit (total comprehensive income) for the period rose from USD 150 million in 2022 to USD 220 million in 2023, reflecting a growth rate of 47%. Earnings per share increased from USD 0.03 in 2022 to USD 0.04 in 2023, marking a growth rate of 33%. The total assets grew from USD 230 million in 2022 to USD 834 million in 2023. The net income grew 50% year on year aided by revenue growth in hosting and mining along with strong performance from investments in digital assets. In addition to strong financial performance, our major 2023 milestone includes Phoenix going from a privately held company to a listed group on Abu Dhabi Stock Exchange.

The attached consolidated financial statements have been prepared on a going concern basis. While preparing the consolidated financial statements, the management has made an assessment of the Group’s ability to continue as a going concern. The management has not come across any evidence that causes it to believe that material uncertainties related to the events or conditions existed, which may cast significant doubt on the Group’s ability to continue as a going concern.

Statement of Directors’ responsibilities

The applicable requirements require the Directors to prepare the consolidated financial statements for each financial year which present fairly in all material respects, the consolidated financial position of the Group and its financial performance for the year then ended.

The consolidated financial statements for the year have been prepared in conformity and in compliance with the relevant statutory requirements and other governing laws. The Directors confirm that sufficient care has been taken for the maintenance of proper and adequate accounting records that disclose with reasonable accuracy at any time, the consolidated financial position of the Group and enables them to ensure that the consolidated financial statements comply with the requirements of the applicable statute. The Directors also confirm that appropriate accounting policies have been selected and applied consistently in order for the consolidated financial statements to reflect fairly, the form and substance of the transactions carried out during the year under review and reasonably present the Group’s financial conditions and results of its operations.

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

DIRECTORS’ REPORT

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

MANAGEMENT SUMMARY

The consolidated financial statements set out on pages 58 to 139, which have been prepared on the going concern basis were approved by the Directors on the date of these consolidated financial statements and signed on behalf of the Group by:

Directors

H.E Tareq Abdulraheem Ahmed Rashed Alhosani
Elham Alqasim
Fady M Y Dahalan
Seyedmohammad Alizadehfard
Munaf Ali

Directors’ statement to the disclosure to auditors

In so far as the Directors are aware, there is no relevant information of which the

Group Auditors are unaware.

The Group’s auditors have been provided with access to all information of which we are aware that is relevant to the preparation of consolidated financial statements.

Independent auditors

RAI LLP, was appointed as the external auditors for the financial year 2023, by the board of directors in the board meeting on 24th January 2024.

On behalf of the Board of Directors

DocuSigned by:

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H.E. Tareq Abdulraheem Al Hosani Chairman of the board

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

AT A GLANCE

TRADING

Phoenix has exclusive distribution rights in the Middle East and Africa for industry leading technology hardware brands and accessories (Bitcoin mining equipment and crypto-wallets).

Founded in 2017, PHOENIX GROUP PLC has grown into a multi billion-dollar corporation and has established itself as a global leader in the development, operation and management of crypto datacenters.

Phoenix Group specializes in a range of services, from high-performance computing to crypto and cloud mining, data center hosting, crypto mining products and equipment.

It has also expanded its global footprint across UAE, Oman, Canada, USA and CIS countries through its four verticals and the establishment of the UAE’s first fully regulated digital asset exchange M2.

INVESTMENTS

MINING

Phoenix’s investment arm aims to expand the business by acquiring strategic and profitable businesses to add both synergies to its core business as well as making healthy contributions to its bottom line. Recent investment in M2 Exchange and Lyvely is testament to its strategic direction and support of tech innovation in UAE.

Phoenix is one of the world’s leading Bitcoin miners, with over 15 EH/s capacity, equivalent to circa 3%[1] of the global BTC hash rate.

HOSTING

Development, operations, and maintenance of specialized state-of-the-art mining facilities providing hosting services with high performance computing power for the generation of digital assets.

The metrics changes daily and is reported at time of publication of this information;

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TOTAL MINERS ON SITE (BTC) HASHRATE
~16 EH/s
117,831
SELF MINERS (BTC) TOTAL CAPACITY
(PROJECTED BY EOY 2024)
~765 MW
27,912
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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) FINANCIAL REVIEW

PHOENIX GROUP CONCLUDES A TRIUMPHANT 2023 - SOARING ABOVE EXPECTATIONS

REVENUE[1]

TOTAL COMPREHENSIVE INCOME[1]

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USD 288.2 MN
(AED 1.06 BN)
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USD 220.9 MN (AED 811.4 MN)

NET OPERATING PROFIT[1] USD 207.8 MN (AED 763.1 MN)

TOTAL ASSETS[1]

USD 234.0 MN (AED 3.06 BN)

EPS[1]

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USD 0.04
(AED 0.15)
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TOTAL ASSETS SALES REVENUE NET OPERATING PROFIT
(USD MN) (USD MN) (USD MN)
834.0 288.2 207.8
138.8 50%
240.8 [] 20%
229.6
263%
2022 2023 2022 2023 2022 2023
1 PHOENIX GROUP PLC 2023 Financials (Audited) as reported to ADX ; * Adjusting for a one-off contract amounting to ~USD 500 Mn
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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) OPERATIONAL METRICS

OVERALL BUSINESS

HASHING SHARE POOL EFFICIENCY IN THE NETWORK 2.8% 2.15 BTC /EHs/DAY

POWER COST PER KWHr[[3]]

BTC MINING POWER COST PER KWHr[[3]] PER DAY[1] 18.4 5.45 cent

CURRENT LIVE POWER CAPACITY[2]

527 MW

PHOENIX GROUP PLC Internal Data Metrics;

1 Total BTC mined inclusive of hosting business for clients and Citadel; 2 Remaining 238 MW will go live in 2024; 3 Blended cost The metrics changes daily and is reported as of end-of-year 2023.

MINING EFFICIENCY

31.4 MW/EHs

HASH RATE

2.9 EHs

01 MINING

HASHING SHARE 0.52%

BTC MINED PER DAY 6.2

POWER CONSUMPTION ~89.5 MW

MINING EFFICIENCY 30.8 MW/EHs

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HASH RATE 4.4 EHs HASHING SHARE 0.78% BTC MINED PER DAY HASH RATE 9.4 8.4 EHs POWER CONSUMPTION HASHING SHARE 02 03 ~139.6 MW 1.49% MINING EFFICIENCY BTC MINED PER DAY HOSTING 31.8 MW/EHs INVESTMENT 2.74

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PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

OUR STORY

Established in 2017 by co-founders Seyed Mohammad Alizadehfard (Bijan) and Munaf Ali, Phoenix Group has swiftly evolved into a towering presence in the realm of technology and finance. With a bold vision and unwavering determination, Phoenix has emerged as a beacon of innovation and leadership, pioneering groundbreaking advancements in blockchain, cryptocurrency, and Web3 technologies.

Moreover, Phoenix’s trading arm has secured exclusive distribution rights in key markets, solidifying its position as a trusted provider of technology hardware and accessories. Meanwhile, its strategic investments arm continues to identify and capitalize on promising ventures, bolstering its foothold in the ever-expanding digital ecosystem.

However, Phoenix’s journey extends beyond mere financial success. It is driven by a deeper purpose, a commitment to sustainability, ethical business practices, and community engagement. By championing environmental stewardship and fostering inclusivity, Phoenix is not only reshaping the future of finance but also paving the way for a more equitable and sustainable world.

With a legacy of excellence and a vision for the future, Phoenix Group is poised to redefine the boundaries of possibility in the digital age.

As a multi billion dollar ADX-listed entity, Phoenix Group has transcended geographical boundaries to command global recognition. From its inception, the company has been driven by a relentless commitment to driving innovation and sustainability, setting new benchmarks in the digital finance landscape.

Our journey began as a pioneering crypto company, initially focusing on the trading of crypto mining equipment in the MNEA region, subsequently venturing into designing and constructing crypto mining farms. We have seamlessly transitioned into a tech company, with aspirations to delve deeper into the tech eco-system. Regardless of whether it’s in the realms of web2 or web3, we firmly believe that the tech space harbors immense opportunities for growth and innovation.

Central to our vision is a steadfast belief in a decentralized future, where tokenomics will play a pivotal role in shaping the financial landscape of tomorrow.

Looking ahead, our future vision for Phoenix encompasses expanding our global mining footprint, introducing innovative products and services, making strategic investments, embracing sustainable energy adoption, and ultimately, fostering value creation for all stakeholders.

As we navigate through dynamic market landscapes and embrace technological advancements, Phoenix Group remains steadfast in its commitment to driving innovation, fostering growth, and delivering long-term value to our esteemed shareholders.

At the heart of Phoenix’s success lies its diverse portfolio, meticulously curated to encompass a wide spectrum of ventures. From crypto mining to hosting, trading, and strategic investments, each facet of the group reflects its dedication to embracing emerging trends and seizing lucrative opportunities.

In the realm of crypto mining, Phoenix stands at the forefront as one of the industry’s leading players, harnessing cutting-edge technologies to extract value from digital assets. Its hosting services, marked by state-of-the-art facilities and high-performance computing power, have become synonymous with reliability and efficiency.

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PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

GLOBAL ECONOMIC OUTLOOK

Economic Performance of the Industry in 2023

The global economy has showcased remarkable resilience in rebounding from the challenges posed by the COVID-19 pandemic, the geopolitical conflicts, and the escalating cost-of-living crisis. Inflation, which peaked in 2022, has been on a faster-than-expected decline, with its adverse effects on unemployment and economic activity mitigated to some extent.

The UAE economy has maintained its growth momentum, primarily driven by robust domestic activity. It has emerged as a prominent hub for innovation and technological advancement in the Middle East. This forward-thinking approach extends to the realm of cryptocurrency, where the UAE is actively shaping the future of the industry through strategic initiatives and a supportive regulatory environment.

Cryptocurrencies like Bitcoin have historically been viewed as a potential hedge against inflation. The price of Bitcoin, surged significantly in 2023 (Closing at $42,265,19) compared to 2022 ($ 16,547.85). This price increase directly translated into higher potential revenue for miners.

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BITCOIN PRICE (BTC/USD)
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50
45
40
35
30
25
20
15
10
5
0
JAN - DEC 2023
PRICE (USD ‘000)
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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) GLOBAL ECONOMIC OUTLOOK

Growth Outlook for the Crypto Industry in 2024 and Beyond

The halving event, in mid-2024 for Bitcoin presents a potential turning point for the industry. Historically, halving events have been followed by price surges for the associated cryptocurrency. As more miners entered the network to capitalize on the rising Bitcoin price, the mining difficulty increased significantly. This made it more challenging to mine coins, effectively reducing the profitability of individual miners. However, advancements in mining technology have led to the introduction of more efficient ASIC miners, allowing miners to extract coins with lower energy consumption, reducing operational costs and environmental impact.

Despite Phoenix’s being open for trading for only three weeks during the fiscal year, we demonstrated stability in its trading performance. The company’s stock price remained relatively stable throughout this period reflecting a steady and confident market sentiment towards our operations and prospects.

The stability observed in the company’s shares trading activity underscores the market’s confidence in Phoenix’s business model, leadership, and future potential. This consistent performance amidst a volatile market environment is a testament to the resilience and strength of our organization. Looking ahead, Phoenix remains committed to building upon this strong foundation of stability and confidence.

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SHARE PRICE PHOENIX GROUP PLC (ADX : PHX)
2.40
2.20
2.00
1.80
6 Dec 8 Dec 10 Dec 12 Dec 14 Dec 16 Dec 18 Dec 20 Dec 22 Dec 24 Dec 26 Dec 28 Dec
2023
PRICE (AED)
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PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD) GROWTH AND EXPANSION

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

KEY DEVELOPMENTS OF THE YEAR

Phoenix Group made a remarkable entry into the market with its IPO in November 2023, which was oversubscribed 33 times, raising a significant capital of $370 million. This strong debut highlights the market’s confidence in our company’s vision, capabilities, and potential for growth.

Phoenix Group prides itself on its diverse range of services within the blockchain and crypto space. From mining and data center hosting to crypto trading and Web3, our company offers a comprehensive suite of services, providing both stability and potential for significant upside. This diversification not only enhances our resilience but also positions us well to capitalize on emerging trends and opportunities within the industry.

The UAE’s proactive efforts in developing its crypto and blockchain ecosystem present promising growth prospects for Phoenix Group. As the region continues to embrace digital innovation and blockchain technology, we anticipate a conducive environment for our operations, potentially driving our growth trajectory in the coming years.

It’s crucial to acknowledge the inherent volatility and regulatory uncertainties prevalent in the cryptocurrency and blockchain industry. Phoenix Group remains vigilant and adaptable, continuously monitoring market dynamics and regulatory developments to mitigate risks and capitalize on opportunities. Our agile approach allows us to navigate through uncertainties while maintaining our commitment to delivering value to our stakeholders.

With a team comprising thought leaders in the crypto space, Phoenix Group has a profound understanding of crypto assets and their ecosystems and actively manage risks that arise from the industry.

Phoenix Group is first cryptocurrency firm in MENA region to list on Abu Dhabi Stock Exchange (ADX).

The IPO, which closed on December 5, was met with unprecedented enthusiasm.

Abu Dhabi’s IHC (International Holding Company) acquired 10% stake in Phoenix through the firm’s subsidiary International Tech Group.

Phoenix Group stands at the forefront of the evolving blockchain and crypto landscape, driven by our commitment to innovation, diversification, and strategic investments. Despite the challenges posed by volatility and regulatory uncertainties, we remain steadfast in our pursuit of excellence, poised to capitalize on emerging opportunities and deliver long-term value to our investors, partners, and stakeholders alike.

Tech Innovation Awards for honoring Phoenix Group as the “Most Innovative Crypto Company of the Year”

Phoenix INV Holdings , a wholly owned subsidiary of Phoenix Group , entered into a subscription and investment agreement on December 26 to acquire a 25% stake in Lyvely.

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PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

CORPORATE STRATEGY

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Increasing global mining footprint
Innovative products and services
"PHOENIX
ONE" Strategic investments
strategy includes
Sustainable energy adoption
Value creation
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Global Expansion

Sustainability

Identify and evaluate strategic global locations for • Implement energy-efficient mining practices, explore mining operations based on energy costs, regulatory renewable energy sources, and actively participate in environment, and growth potential. sustainability initiatives.
Establish partnerships with international organizations • Strive for carbon neutrality and promote environmentally and stakeholders to facilitate global expansion. responsible mining within the industry.
Explore off-grid solutions to achieve self-reliance.

Technological Innovations

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) CORPORATE STRATEGY

In the rapidly changing world of Web3, marked by cutting-edge blockchain technologies and decentralization, Phoenix foresees a revolutionary shift in wealth creation and management. We are dedicated to constant innovation, harnessing cutting-edge technologies and innovative platforms in developing web3 centric products and services that adapt with the evolving needs of our clientele.

Central to our strategy is the investment in tokenization of traditional assets, leveraging blockchain technology to enable fractional ownership, enhance liquidity, and facilitate efficient transfer of high-value assets. This strategic approach not only diversifies our investment portfolio but also ensures agility and adaptability in the face of changing market dynamics.

Phoenix is strategically navigating towards a diversified investment portfolio encompassing traditional assets, while also venturing into promising Web3 projects including decentralized finance (DeFi), non-fungible tokens (NFTs), and blockchain infrastructure. Our investment decisions are grounded in thorough research and meticulous due diligence, identifying opportunities with robust growth potential and solid fundamentals.

Active portfolio management is a cornerstone of our strategy, involving continuous monitoring and rebalancing to optimize returns and mitigate risks amidst evolving market conditions. Through strategic partnerships with esteemed investors and blockchain projects, we secure exclusive opportunities aimed at enhancing portfolio performance and driving long-term value creation,

Despite the halving posing challenges for many miners, Phoenix’s exclusive agreements offer a distinct advantage. With locked-in supplies and streamlined operations, Phoenix is poised to weather the changes effectively. This strategic positioning not only ensures profitability but also underscores Phoenix’s commitment to long-term sustainability in the mining industry.

Value Creation

Investment in research and development to stay at the forefront of mining hardware and software technologies.
Enhance communication channels with all key internal and external stakeholders and establish clear and transparent reporting practices.
Collaborate with tech partners and industry experts to explore and adopt emerging innovations.
Explore and introduce additional services beyond • Launch corporate social responsibility initiatives that traditional mining, such as staking, decentralized finance positively impact stakeholders. (DeFi) participation, or blockchain development. •
Establish strong governance and ethical business practices to build trust among stakeholders.
Accelerate sales and trading of miners through storefronts.
Actively engage with and support the crypto community, fostering collaboration, inclusivity, and the sharing of knowledge to contribute to the growth and development of the industry.

Investments

Evaluate opportunities for strategic acquisitions or partnerships to enhance service offerings.

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

CORE VALUES

INTEGRITY

Upholding the highest standards of governance transparency, and ethical conduct in all aspects of our crypto-mining operations and investment decisions. We believe that integrity is the foundation of trust, and we consistently adhere to principles prioritizing the security and well-being of all our stakeholders.

SUSTAINABILITY

Recognizing the environmental impact of crypto-mining, we are dedicated to adopting eco-friendly practices and technologies, our commitment to sustainability extends beyond compliance, as we actively seek ways to minimize our carbon footprint and promote responsible energy consumption in the pursuit of a greener future.

INNOVATION

Embracing a culture of continuous improvement and forward-thinking, we are committed to staying at the forefront of technological advancements within the crypto-mining industry. Through innovative solutions and creative problem-solving, we strive to enhance the efficiency and sustainability of our operations.

COLLABORATION

Fostering a collaborative and inclusive environment, both internally and extemally, we believe in the power of partnerships and alliances within the crypto-mining and web3 community to share knowledge, drive innovation, and collectively contribute to the positive development of the industry.

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) CORE VALUES

ADAPTABILTY

Recognizing the dynamic nature of the crypto-mining industry, we remain agile and adaptable to changes in technology, regulations, and market trends. This adaptability allows us to navigate challenges effectively and seize opportunities for continuous improvement and growth.

EDUCATION

Promoting awareness and understanding of cryptocurrencies and blockchain technology. We are committed to providing educational resources and fostering a knowledgeable community, empowering individuals to make informed decisions about their involvement in the rapidly evolving landscape of digital finance.

VALUE CREATION

Placing our stakeholder at the center of everything we do, we prioritize their needs, security, and satisfaction. We are focused on creating value for our stakeholders, by delivering consistent, sustainable returns and contributing positively to the crypto ecosystem.

SECURITY

Providing risk assessment and prioritizing the utmost security of blockchain networks and the assets entrusted to us. We implement robust cybersecurity measures, follow best practices, and stay vigilant against emerging threats to safeguard the integrity and confidentiality of our clients’ information and assets.

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD) SUSTAINABILITY INITIATIVES

Sustainability is high on our agenda and is at the forefront of how we see our growth in the coming years. Phoenix has invested in renewable energy based Bitcoin mining.

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) SUSTAINABILITY INITIATIVES

At Phoenix Crypto, we’re building a sustainable future for cryptocurrency. Here’s how:

Smart Sourcing: We secure long-term, cost-effective energy contracts, prioritizing renewable sources like solar and

Investment in emerging technologies that can enhance energy efficiency in crypto mining, such as more advanced cooling systems, optimized algorithms, or new consensus mechanisms with lower energy requirements.

wind. This keeps our operations efficient and environmentally friendly.

Best in Efficiency: We invest in cutting-edge mining hardware, squeezing maximum power out of minimal energy.

We’re constantly on the lookout for the most efficient technology.

Tech for Tomorrow: We’re at the forefront of innovation, focusing on next-gen cooling systems, optimized algorithms,

and low-energy mining methods.

Optimizing energy usage by choosing locations strategically based on access to renewable energy and cool climates. Cold climates can reduce the need for extensive cooling systems, decreasing overall energy consumption.

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Location, Location, Location: We strategically place our mining operations near abundant energy supply and

naturally reducing our energy footprint.

Waste Not, Want Not: In future we aim to capture and reuse waste heat generated during mining operations and to invest in carbon offset programs for any remaining emissions.

Implement technologies to capture and reuse waste heat generated during the mining process and investment in carbon offset programs to compensate for the carbon emissions produced by mining activities.

Striving for gender diversity to foster innovation and inclusivity

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

MILESTONES & ACHEIVEMENTS

2017 1st Mining 2018 2019 Operation in UAE Company started International Expansion Became Middle East with Mining in Canada Official Distributor of BITMAIN

Contract signed Acquired 20.8% Started US Mining 2022 on $300Mn Oman stake in BITZERO Operations Became Official GDC facility Distributor of MICROBT

2023 M2 officially Acquired launched 25% stake Went Public with Listing in LYVELY

Went Public with Listing on Abu Dhabi Securities Exchange (ADX)

2024

Oman Mining Operations Facility under construction. Expected to go live in 2024

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PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

BUSINESS MODEL

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Exclusive distributor of best-in-class BTC mining equipment

Develop, operate and manage highly specialized data centers hosting high performance computing power for digital asset mining*

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NORWAY
25 MW
CIS
200 MW
AMERICAS
115 MW
MENA
425 MW
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PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

COMPETITIVE ADVANTAGE

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LOW-COST, LONGTERM ENERGY CONTRACTS

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CONDUCIVE REGULATORY FRAMEWORK

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FAVORABLE GEOGRAPHIC PRESENCE

HIGHLY EFFICIENT, BEST IN CLASS MINERS

LARGE SCALE DEPLOYMENTS

VERTICAL INTEGRATION

Strategic investment to support business growth

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One-stop social Digital Asset Exchange monetization platform and Marketplace fully regulated by ADGM 25% 15% ( 36MW attributable to Phoenix)

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Ambition of ESG-compliant Digital Asset Exchange BTC self mining company and Marketplace with operations in Norway fully regulated by ADGM 23% ( 23MW 30% attributable to Phoenix)

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INNOVATION

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HIGHLY TALENTED
TEAM
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PHOENIX GROUP PLC current structure and acquisition as of EY 2023 ; * Projected capacity by the end of 2024

www.phoenixgroupuae.com

UNITED ARAB EMIRATES (UAE) PROVIDING LANDSCAPE FOR VIRTUAL ASSETS

DEMONSTRATED CONSISTENT GROWTH AND IS SUPPORTED BY ROBUST UNDERLYING FUNDAMENTALS AND REGULATORY FRAMEWORK

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

CORPORATE GOVERNANCE

BOARD MEMBERS

UAE remains aggressive in its diversification initiatives, promoting sustainable development and striving to create a globally integrated business environment. This commitment is evident through impactful economic and social programs, establishing UAE as a preferred and leading destination for digital financial economy.

3rd

5.7%

GDP growth expected for UAE in 2024 as compared to 3.1% in 2023

UAE enjoys highest Sovereign Rating

Highest Income Per Capita (currently at USD 85,700)

60%+

1st

Projected Population Growth in the next 5 years

UAE’s non-oil revenue

UAE ranked top in FDI inflow in the MENA region

SUPPORTIVE CATALYSTS DRIVING SIGNIFICANT GROWTH

ECONOMIC DRIVERS

In 2018, the FSRA, a financial freezone regulatory authority published extensive regulations making Abu Dhabi Global Market (ADGM) the first jurisdiction in the world to introduce a comprehensive and bespoke regulatory framework for the regulation of spot virtual asset activities, including those undertaken by multilateral trading facilities, brokers, custodians, asset managers and other intermediaries.

UAE leadership has strong commitment to

Expand and support growth of UAEbased companies globally
Creating a market for unicorns in future growth sectors

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Attract flow of capital and inject more liquidity within the region

UAE Emerges as Crypto Powerhouse in MENA, Home to 1,800+ Industry Stakeholders

Transform UAE into a knowledge-based economy

UAE Central Bank, World Investment Report 2023, World Bank, UAE Statistics Center, Fintech News ME

The Board consists of two executive Directors and three non-executive Directors

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H.E. Tareq Abdulraheem Al Hosani
Chairman of the board
Ms. Elham Al Qasim Mr. Fadi Dahlan
Board Member Board Member
Mr. Seyed Mohammad Mr. Munaf Ali
Alizadehfard (Bijan) Board Member,
Board Member, Co- Co-founder & Group
founder & Group CEO MD
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The board sets strategic direction, oversees risk management, and ensures compliance with regulations and company policies. Meanwhile, executive management is responsible for day-to-day operations, implementing strategies, and achieving organizational goals.

www.phoenixgroupuae.com

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

PHOENIX GROUP PLC

CORPORATE GOVERNANCE

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H.E. Tareq Abdulraheem Al Hosani is the Chief Executive Officer of Tawazun Economic Council. He is responsible for managing the procurement of UAE Armed Forces and Abu Dhabi Police while driving the strategic plans for the development of the UAE defense and security sector. H.E. Al Hosani also manages the day-to-day business activities of Tawazun.

Prior to joining Tawazun, H.E. Al Hosani served as the Chief Executive Officer of Yahsat before taking on the role of Deputy Director General for the National Electronic Security Authority (NESA). He had also served as Yahsat’s Executive Director for Strategy & Business Development, as well as Deputy Chief Technical Officer.

H.E. Al Hosani also held the position of Associate Director at Mubadala Investment Company. H.E. Al Hosani currently serves as Chairman of the Board of Directors of Global Aerospace Logistics (GAL), and of Munich Health Daman Holding Limited, and as Vice Chairman in the Boards of Abu Dhabi Health Services (SEHA), Al Forsan International Sports Resorts, and Abu Dhabi Airports Company (ADAC).

H.E. Tareq Abdulraheem Al Hosani

He is a member of the Board of Directors of Al Yah Satellite Communication (Yah Sat), International Golden Group (IGG), Higher Colleges of Technology (HCT), EDGE Group, Emirates Defense Industries Company (EDIC), Royal Jet, Rabdan Academy as well as the Board of Trustees of the Paris-Sorbonne University – Abu Dhabi. Previously, H.E. Al Hosani sat on the Boards of several UAE strategic entities, such as UAE Space Agency, Bayanat, and National Health Insurance Company (Daman).

Chairman of the Board Non-Executive Board Member

He holds a Masters degree in Electronics & Communication from Université Pierre et Marie Curie in France and a Bachelors in Aeronautics from Saint Louis University in the United States of America.

He is also the holder of an Accelerated Executive Development Diploma from IMD Business School in Switzerland.

PHOENIX GROUP PLC

CORPORATE GOVERNANCE

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Elham Al Qasim is a senior executive and investment professional based in the UAE. She currently holds the position of Chief Strategy and Technology Officer at Majid Al Futtaim Holding, where she is responsible for developing the company’s long-term strategy, with a keen focus on sustainable value creation, innovation, and growth.

In her previous roles, Elham served as the CEO of Digital14, leading over 1,000 employees dedicated to providing cybersecurity and digital solutions. She was also the CEO of the Abu Dhabi Investment Office and Executive Director of the Ghada 21 program, managing a AED 50-billion investment program to accelerate Abu Dhabi’s economy. Her extensive career also includes her role as a Director at Mubadala Investment Company. She also served on the executive leadership team of Emirates Global Aluminum.

Elham started her international career at JPMorgan Investment Bank, where she was part of the Global Diversified Industrials Team based in London. Elham’s distinguished career has continuously flourished through her service in several non-executive director roles on both international and national public and private boards. Her experience includes positions at Global Foundries, IHC, Khalifa Fund, Amanat Holding, Cambridge Medical & Rehabilitation Center (CMRC) and Apex Holding.

Elham Al Qasim

Non-Executive Board Member

Elham recently received her honorary doctorate degree from Middlesex University Dubai for her dedication to empowering women in society as a collective responsibility and national duty. Her leadership roles and achievements stand as a testament to her commitment to breaking gender barriers in traditionally maledominated fields. She also holds a Master’s degree from the London School of Economics and Political Science, and a Bachelor’s degree in Business from the American University in Dubai.

In April 2010, Elham became the first Arab woman to undertake a successful ‘unsupported and unassisted’ skiing expedition to the North Pole. Currently, she is a Board Member of Bayanat, Al Ain Farms, Phoenix Group and Al Ramz Corporation.

www.phoenixgroupuae.com

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

PHOENIX GROUP PLC

CORPORATE GOVERNANCE

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Mr. Fadi Dahlan serves as the CEO of Citadel International Holdings (CIH), a prominent investment management firm headquartered in Abu Dhabi, UAE. CIH oversees a diverse portfolio that encompasses Capital Markets, Real Estate, Pharmaceuticals, Manufacturing & Retail, and Blockchain Technology, with investments strategically positioned across Europe, the Middle East, and Africa.

In addition to his role at CIH, Mr. Dahlan is the Managing Partner at CI Venture Capital (CI VC) in Abu Dhabi, a forward-thinking venture capital firm regulated by ADGM. With a keen eye for innovation, CI VC is dedicated to investing in and partnering with the region’s most promising startups, particularly those breaking ground in F&B, FinTech, and Super App development.

Mr. Dahlan’s influence in the digital currency realm is evident through his role as a Board Member at M2, a cutting-edge Digital Currency and Exchange Platform. His expertise is further showcased by his board memberships across a myriad of sectors, from hospitality and real estate to financial services, food processing, petconomy, construction, media, pharmaceuticals, and blockchain technology. Notably, he holds an observer seat in Multiply Group PJSC, a company publicly traded on the Abu Dhabi Stock Market, and plays a pivotal role in the startups incubated by CI Venture Capital, either as an observer or director.

Fadi Dahlan

Non-Executive Board Member

Prior to his current endeavors, Mr. Dahlan was associated with AMIRAL Holdings and IHC. He earned his bachelor’s degree in business management from Southern Illinois University – Illinois, USA. Demonstrating visionary leadership and profound strategic expertise throughout his career, Mr. Dahlan remains at the forefront of regional investment and innovation.

PHOENIX GROUP PLC

CORPORATE GOVERNANCE

Mr. Seyed Mohammad Alizadehfard (Bijan), Co-founder and Group CEO at the Phoenix Group, is one of the most prominent leader and visionaries within the cryptocurrency and blockchain ecosystem and has a longstanding track record of spearheading blockchain adoption in the MENA region and globally.

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In 2015, Mr. Bijan cofounded Phoenix (part of Phoenix Group of Companies), a conglomerate of 23 business that operates mining facilities across the world and have built the largest mining farm in the UAE. Mr. Bijan’s contribution to Phoenix is invaluable, and his vision and perseverance has established Phoenix as a regional and global player in crypto and blockchain industry.

Mr. Bijan is a firm believer in collaborating with innovative visionaries, exceptional talent, and venture capital partners. His aim is to foster a holistic blockchain community that benefits and nurture the ecosystem, paving the way for a more decentralized future for everyone.

Seyed Mohammad

Alizadehfard (Bijan)

Executive Board Member, Co-founder And Group CEO

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

CORPORATE GOVERNANCE

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Mr. Munaf Ali, Co-founder and Group MD of the Phoenix Group, is a visionary entrepreneur, and innovator with over 20 years capital markets experience (including previous executive banking roles in Citigroup in UK and UAE.) He has founded and built billion-dollar corporations globally across sectors including hospitality, leisure and blockchain.

Munaf is a seasoned real estate developer and has delivered mega development projects of significant value. He previously co-founded and was CEO for Range Developments, a luxury hospitality developer, that developed and delivered luxury branded resort hotels in the Eastern Caribbean.

As the Co-founder and Group MD of Phoenix, Munaf’s contribution towards Phoenix has been invaluable – he has established Phoenix as one of the leading players in the Blockchain and Cryptocurrency arena with mining facilities spanning across, US, Canada, CIS, Europe and the Middle East.

Munaf Ali

Executive Board Member, Co-founder & Group MD

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

CORPORATE GOVERNANCE

EXECUTIVE MANAGEMENT

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Mr. Seyed Mohammad
Mr. Munaf Ali
Alizadehfard (Bijan)
Board Member, Co-founder
Board Member, Co-founder
& Group Managing Director
& Group CEO
LEGAL FINANCE INVESTMENT
FARAH ZAFAR SHEHARYAR MALHI BILL QIAN
MD & GCLO GCFO MD & CIO
MINING OPS TECHNOLOGY MARKETING
REZA NEJATIAN JAMES STEPHENSON LUCIEN HARRINGTON
CEO MD & CO-CTO CMO
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www.phoenixgroupuae.com

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) CORPORATE GOVERNANCE

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Farah is a highly acclaimed Chief Legal Officer due to her 23 years’ experience in the Middle East where she has been instrumental to the growth and success of prominent development companies including Omniyat, Al Mazaya Holdings (Publicly listed - Dubai, Kuwait and Qatar) and has worked for the region’s most prominent leaders and visionaries which include the Ruler of Dubai and the Crown Prince of Saudi Arabia.

Farah has been a C – level executive for the regions’ most prominent entities including Engineers Office, Omniyat, Dubai Holding and The Public Investment Fund of Saudi Arabia.

Farah has led government to government transactions for and on behalf of the Government of Dubai, Government of Oman, Kingdom of Saudi Arabia, Emirate of Ajman and has represented investment and quasi- government entities in the GCC region.

FARAH ZAFAR

She is known for her strategic, commercial and execution ability, her ability to structure, grow and list billion-dollar entities, motivate and lead strong teams and provide clear and focused legal, strategic, corporate and investment support across all industry sectors.

Managing Director & Group Chief Legal Officer

She is fiercely passionate about Tech, Web3 and a decentralized future. She strongly believes and supports the UAE’s vision to be the global leader in the startup eco-system, Web3, crypto and blockchain and is excited to contribute to this space.

PHOENIX GROUP PLC

CORPORATE GOVERNANCE

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Sher is a seasoned professional with extensive global experience in strategic finance, accounting, audit, and business development. With a career spanning senior C-suite and Director level roles across Europe and the Middle East, Sher has consistently demonstrated expertise and leadership in complex financial environment.

Sher played a pivotal role in the IPO process of Phoenix Group, showcasing his ability to navigate the intricate requirements of public offerings and capital markets. His strategic insight and financial acumen were instrumental in steering the company through a successful transition to a publicly traded entity.

In his role as Group CFO for Europe’s largest hedge fund platform, his tenure was marked by the implementation of innovative financial strategies and rigorous financial oversight, contributing significantly to the platform’s market leadership.

SHEHARYAR MALHI

Previously, Sher served as a Director at KPMG’s Norwegian Head office in Oslo. At KPMG, one of the world’s leading accounting firms, he led major audit and consulting projects, delivering high-value solutions to a diverse portfolio of clients within a host of sectors including energy, tech and financial services.

Group Chief Financial Officer

Sher is a Qualified Chartered Accountant from both the Irish and English Institutes and an alumnus of the London School of Economics.

Awards include: 100 Most Influential People in Dubai (Arabian Business 2023 & 2024). 50 Most Powerful Women Leaders (Arabian Business 2024), Inspiring Female Business Leaders (Arabian Business 2022), Women of Influence in the Arab World (CEO Middle East 2021), Future Leaders (Arabian Business Leadership Summit 2023), General Counsel of the Year (Middle East Legal Awards 2020), Woman of the Year (Big Projects Middle East– 2019), Legal CEO of the Year (CEO Middle east 2019), General Counsel of the year (Oath Middle East Legal Awards 2019).

www.phoenixgroupuae.com

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) CORPORATE GOVERNANCE

Bill Qian serves as the Managing Director and Chief Investment Officer of Phoenix Group. Before joining Phoenix Group, Bill was the Global Head of M&A and Binance Labs at Binance, the largest global cryptocurrency platform, which held 55% of the global market share and facilitated $34 trillion in transactions in 2021. Prior to his tenure at Binance, Bill was the Head of Investment for Fintech/Tech at JD.COM, a leading Asian internet platform boasting over $400 billion in GMV.

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Bill’s career is a testament to his extensive experience and profound understanding of the digital landscape. He has successfully deployed and managed over $20 billion across a diverse range of projects spanning Web1, Web2, and Web3. His unique perspective as a ‘web-native investor’ enables him to identify and support exceptional founders in the Web3 industry.

In addition to his primary role, Bill also serves as the Chief Investment Officer of M2.com and Chairman of Cypher Capital. He is also a board member of the TON Foundation, which oversees the Layer 1 blockchain developed by Telegram, with 900 million monthly active users.

BILL QIAN

Managing Director & Chief Investment Officer

PHOENIX GROUP PLC

CORPORATE GOVERNANCE

Reza Nedjatian is the Chief Executive Officer at Phoenix Group’s Global Mining Operations. With over a decade of experience in business development and project management, he has been instrumental in driving the success of Phoenix Group’s global mining ventures. His strategic vision and commitment have led to the successful management of mining operations worldwide, particularly in the energy sector.

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Reza has a significant track record in leading key strategic initiatives, including the delivery of over 300 MW of power generation projects globally. His leadership has resulted in the record turnkey deliveries of power generation plants, demonstrating his capability to manage complex projects and lead specialist teams effectively. His extensive network within the energy sector, comprising consultants and contractors, allows him to access crucial industry insights, driving innovation and growth in his projects.

REZA NEJATIAN

Reza holds a Bachelor’s degree in Electrical Engineering from the American University of Dubai, which, combined with his business acumen, enables him to approach project leadership with a unique and effective perspective. His passion for the energy sector and extensive experience make him a valuable asset to any project team, fostering alternative thinking and problem-solving skills that ensure successful outcomes.

CEO - Global Mining Operations

www.phoenixgroupuae.com

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

CORPORATE GOVERNANCE

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James is a multi-award winning leader in digital technology and financial services, joining Phoenix from Bitstamp, where he was the Chief Technology and Operations Officer of the world’s longest running crypto-exchange.

Previously, James has held multiple C-suite roles across Techology, Product, and Marketing in leading digital banks across Europe and the Middle East, including as the co-founder and CTO of Tandem Bank. His traditional financial services experience includes roles as the Chief Operating Officer of Commercial Bank International, and a non-executive director of Monmouthshire Building Society.

James’s career also includes launching an award-winning mobile games studio, authoring numerous textbooks on digital technologies, and lecturing & speaking on disruption, digitisation and artificial intelligence. He holds a degree in Computer Science from the University of York.

JAMES STEPHENSON

Managing Director & Co-Chief Technology Officer

CORPORATE GOVERNANCE

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Lucien (Luke) Harrington has held several senior leadership roles across Europe, Middle East and Asia Pacific working for some of the worlds most recognized brands such as Disney and Time Warner and also held leadership roles at global agencies including FutureBrand and Lynxeye where he led teams that created award winning campaigns for brands like Mercedes, Spotify, Alibaba, Nespresso, Geely, Bangkok Bank, Volvo, Qantas, Virgin, Standard Chartered and H&M.

Most recently he was Group VP of Brands & Campaigns at Cenomi. Saudi Arabia’s largest retailer and mall operator. He has successfully launched over 30 new brands and businesses and won multiple awards for brand and marketing campaigns.

LUCIEN HARRINGTON

Chief Marketing Officer

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

CORPORATE GOVERNANCE

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Audit and Risk Committee

The Board approves the following members of the Audit & Risk Committee:

Elham Al Qasim– Chair of the committee.

H.E. Tareq Abdulraheem Al Hosani- Member

Munaf Ali - Member.

The Board recognizes that good corporate governance practices contribute to the creation, maintenance and increase of shareholder value. Therefore, the Board of Directors has constituted two (2) Board committees as follows:

Audit and Risk Committee

The Board of Directors maintains vigilant oversight over the internal controls to safeguard the interests of our stakeholders and uphold the integrity of our operations. This oversight is primarily facilitated through the diligent work of the Audit Committee, which operates under a robust mandate aimed at promoting transparency, accountability, and compliance across the organization.

Nomination and Remuneration Committee

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Nomination and Remuneration Committee

On 22 December 2023 the board approved Audit Committee Charter and the Nomination and Remuneration Committee Charter that defines the duties and responsibilities of the committees.

The sitting fees for the directors are set at AED 30,000 per meeting attended. All key transactions with directors are disclosed in the financial statement.

The Board approves the following members of the Nomination and Remuneration Committee:

Elham Al Qasim– Chair of the Committee.

H.E. Tareq Abdulraheem Al Hosani- Member

Munaf Ali - Member.

The Board of Directors maintains a Nomination and Remuneration Committee, which plays a pivotal role in ensuring the integrity and effectiveness of our corporate governance framework. The committee operates under a clear mandate aimed at upholding the highest standards of transparency, accountability, and fairness in the appointment and remuneration processes within our organization.

The main roles and responsibilities of the nomination and remuneration committee include the following as defined in the charter:

Oversight of nomination and selection process of the Company’s Directors and propose clear policies and criteria for membership in the Board and Executive Management.
Remuneration framework; and
People, Culture and Performance framework and practices.

The main roles and responsibilities of the audit committee include the following as defined in the charter :

Financial Reporting:

Provide its comments on the annual report, accounts, financial statements, audit opinions on the quarterly, half-yearly (as applicable) and year-end financial statements and recommend its adoption by the Board. This shall be done in compliance with international accounting standards. For the avoidance of doubt, approving the annual report, accounts and financial statements remain with the Board.
Recommend steps to ensure compliance with financial reporting standards and regulatory requirements
Discuss significant issues as well difficulties encountered in the interim or final audits.

Internal Control and Risk Management:

Discuss internal control and risk management systems.
Discuss the appointment, resignation or dismissal of the Internal Audit Staff and the internal audit provider, in case of an outsourced service provider.
Discuss any relevant reports submitted to the Committee by the Internal Audit Function and monitor management response and action to the findings and recommendations.
Ensure that the Internal Audit Function is adequately resourced and has appropriate authority and standing within Phoenix.
Discuss effectiveness of Internal Audit Function in the context of Group’s overall risk management framework.
Discuss the auditor’s assessment of the internal control procedures and recommend steps to ensure there is coordination between the internal auditor and the external auditor.
Report to the Board all matters presented to the Committee by virtue of the delegation.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) INDEPENDENT AUDITOR’S REPORT

To: The Shareholders of Phoenix Group PLC (formerly known as Phoenix Group Ltd)

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Phoenix Group PLC (referred to as the “Company”) and its subsidiaries (referred to as the “Group”), which comprise the consolidated statement of financial position as at 31 December 2023, and the consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2023, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards.

Recognition of cryptocurrency mining revenue (Note 28 to the Consolidated Financial Statements)

Key audit matter

How the matter was addressed in our audit

We have performed audit procedures to obtain assurance over the revenue from mining which included the following:

The group recognises revenue in accordance with IFRS 15, Revenue from Contracts with Customers.

The management recognizes revenue from the provision of transaction verification services within the Bitcoin network, commonly referred to as “cryptocurrency mining”. The Group participates in mining pools operated by third parties in order to limit its exposure to variability of mining output. The Group receives bitcoins from the mining pool operator as consideration for its participation in the pool.

Obtained and evaluated management’s rationale for the application of IFRS 15 to account for its cryptocurrency awards earned, including evaluating the provisions of the contract between the Group and pool;
Performed substantive transactional testing of income recognised, by vouching a sample of transactions from the Group’s digital wallets to the Bitcoin blockchain, and recalculating the fair value on recognition;

During the year ended 31 December 2023, the group recognised cryptocurrency mining revenue of USD 31,801,711. The Group’s management has exercised significant judgment in their - determination of how IFRS 15 should be applied to the accounting for cryptocurrency mining revenue recognised.

Vouched a sample of transactions directly from the Bitcoin blockchain back to the group’s digital wallets;
Evaluated and tested management’s rationale and supporting documentation associated with the valuation of cryptocurrency awards earned; and
We identified the accounting for cryptocurrency the valuation of cryptocurrency awards earned; mining revenue recognised as a key audit matter due and to the complexities involved in auditing completeness • Assessed the adequacy of disclosures in line and occurrence of the revenue recognised by the with the requirements of the IFRS.
Group.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (referred to as the “ISA”). 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) (the “IESBA Code”), together with the ethical requirements that are relevant to our audit of the consolidated financial statements in the United Arab Emirates, 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.

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.

Business combination under common control (Note 20 to the Consolidated Financial Statements)

Key audit matter

How the matter was addressed in our audit

We have performed audit procedures in respect to the management’s assessment by performing the following procedures:

In the year 2023, the Group acquired control over entities as disclosed in the consolidated financial statements. However, 2023 is the first year for which consolidated financial statements are being prepared for the Group.

Reviewed the board resolution to assess if the transfer fulfils the requirements of being classified as a business under IFRS 3; •

These acquisitions were excluded from the scope of IFRS 3, as these transfers represented business combination under common control, given that the Group and the acquired entities are controlled by the same ultimate shareholders before and after the acquisition.

Assessed the management judgement for the business combination under common control is transfer of shares and results in no implication of goodwill or bargain purchase.
Reviewed the accounting position paper prepared by the management to ensure the accounting of business combinations under common control; and

Management’s assessment was significant to our audit because it affects the composition of the Group’s business and its financial position and performance. The acquisition has been accounted for in the consolidated financial statements using pooling of interest method which reflects the economic substance of the transaction.

Assessed the adequacy of disclosures in line with the requirements of the IFRS.

www.phoenixgroupuae.com

Accounting for digital assets (Note 11 to the Consolidated Financial Statements)

Key audit matter

How the matter was addressed in our audit

The Group holds number of digital assets as intangible assets and as inventories disclosed in note 11 of the consolidated financial statements, respectively.

We have performed audit procedures in respect to the management’s assessment by performing the following procedures:

Confirmed good title to and quantities of the digital assets within the Group’s wallets and obtaining direct confirmation from relevant custodians;

There is no specific accounting standard that addresses the accounting treatment for digital assets and as a result significant judgement is applied to ensure these digital assets are accounted for in accordance with the International Financial Reporting Framework.

Reviewed and tested underlying agreements giving rise to the receipt of digital assets;
Performed an assessment of the fair values attributed to the digital assets at the transaction date and year end date, by vouching the value of quantities held to a third party website;

This was determined to be a key audit matter as it requires significant judgement in determining the recognition and presentation of the digital assets and confirming existence at reporting date.

• Performed an assessment of the liquidity of the tokens held and any impact on the subsequent measurement thereto;

Discussed with management the strategy for holding of said digital assets and reviewing the relevant accounting treatment applied; and
• Assessed the adequacy of the disclosures in note 11 to the consolidated financial statements.

Classification of investment as an associate (Note 9 to the Consolidated Financial Statements)

Key audit matter

How the matter was addressed in our audit

We have performed audit procedures in respect to the management’s assessment by performing the following procedures:

During the year, the Group acquired 7.5% shareholding in and entered into an Operation and Maintenance agreement with Citadel Technologies Group Limited.

Assessed the assumptions made by management for classification of investment as an associate;
• Obtained and inspected the operational and maintenance agreement with Citadel that results in significant influence;

The Group holds total shareholding of 15% amounted to USD 120 million at yearend. Management has classified it as investment in an associate due to acquiring 15% equity shareholding, 1 out of 5 board representation and Operational and Maintenance agreement for Citadel.

Inspected the shares certificate that shows the total investment of 15% in Citadel Technologies Group Limited; and

Due to significance of the amount involved and use of significant management judgement in classifying investment as an associate we have identified this as a key audit matter.

Evaluated the disclosures in the financial statements is in compliance with the applicable financial and reporting framework.

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) INDEPENDENT AUDITOR’S REPORT

Other Matter

The IFRS consolidated financial statements of the Group for the year ended 31 December 2022 were unaudited (refer note 5).

Other Information

Management is responsible for the other information. The other information comprises the Directors’ report and information included in Audit Report (but does not include the consolidated financial statements and our auditor’s report thereon). We obtained the Directors’ Report prior to the date of our auditor’s report.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information 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 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 Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards and in compliance with the applicable provisions of the ADGM Companies Regulation 2020, and for such internal control as management 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, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with Governance are responsible for overseeing the Group’s financial reporting process.

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

INDEPENDENT AUDITOR’S REPORT

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 ISA 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.

As part of an audit in accordance with ISA, we exercise professional judgment

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

INDEPENDENT AUDITOR’S REPORT

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.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with Governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

and maintain professional skepticism 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 misstatement 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, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on 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 inadequate, 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.

We also provide those charged with governance 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 those charged with governance, 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 matters 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 would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

Further, as required by the the Companies Regulations 2020 of ADGM, we report that:

the consolidated financial statements have been prepared in, all material respects, in accordance with the applicable requirements of the Companies Regulations 2020 of ADGM; and
the financial information included in the Directors’ report, is consistent with the consolidated financial statements of the Group.

For and on behalf of RAI LLP

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Ashraf Eradhun 26 March 2024 Abu Dhabi, United Arab Emirates

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 (INCLUDING NOTES)

	As at 31 December	As at 31 December	As at 31 December
		2023	2022
	Notes	USD	USD
	(unaudited)
ASSETS
Non-current assets Property and equipment Right-of-use asset Intangible assets Investment in associates Investment at fair value through profit or loss (FVTPL)			73,956,112 - - 28,976,795 43,127,923
	6	103,968,923
	7	680,484
	8	35,165
	9	120,310,026
	10	-
		224,994,598	146,060,830

CURRENT ASSETS
Digital assets Inventories Trade receivables Advances, deposits and other receivables Due from related parties Cash and short-term deposits	11	140,000,124	1,720,650 41,389,104 1,457,450 30,206,757 8,319,448 442,871
	12	73,261,697
	13	33,061,633
	14	164,519,371
	21	2,550
	15	198,164,555
Total assets		609,009,930	83,536,280 229,597,110

		834,004,528

EQUITY AND LIABILITIES
Equity Share capital Share premium Other reserve Shareholders’ current account Contribution from shareholders Statutory reserve Retained earnings			10,000 - 11,354,664 9,019,377 4,015,995 13,615 82,182,560
	16 (i)	164,705,882
	16 (i)	345,882,353
	16 (ii)	24,511,190
	17	-
	18	24,994,908
	19	13,615
		137,012,032
Total equity LIABILITIES Non-current liabilities Lease liability Employees’ end of service benefits Interest-bearing loans		697,119,980	106,596,211 - 170,483 3,721,282



	7	356,991
	22	858,965
	23	3,556,500
		4,772,456	3,891,765

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 (INCLUDING NOTES)

(INCLUDING NOTES)
	As at 31 December
		2023	2022
	Notes	USD	USD
			(unaudited)
Current liabilities
Lease liability Due to related parties Interest-bearing loans Trade payables Other liabilities	7	272,294	- 47,229,151 207,135 311,553 71,361,295
	21	54,710,583
	23	165,487
	24	575,497
	25	76,388,231
		132,112,092	119,109,134
Total liabilities		136,884,548	123,000,899
Total equity and liabilities		834,004,528	229,597,110

These consolidated financial statements were authorised for issue on 26 March 2024 and signed by:

DocuSigned by:

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A05333098C404FB... FDEC6C64F7B64C4... 37797D5A373F481... H.E. Tareq Abdulraheem Al Hosani Seyed Mohammad Alizadehfard Munaf Ali Chairman of the Board Group CEO and Board Member Group Managing Director & Board Member

The notes on pages 65 to 139 form an integral part of these consolidated financial statements.

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 (INCLUDING NOTES)

(INCLUDING NOTES)
	Year ended 31 December
		2023	2022
	Notes	USD	USD
			(unaudited)
Revenue from contract with customers Direct costs	28	288,186,931	754,962,342 (584,278,208)
	29	(199,325,057)
Grossprofit		88,861,874	170,684,134
General and administrative expenses Selling and distribution expenses Foreign exchange loss Other income Impairment of other receivables			(28,690,101) (743,090) (51,263) 2,475,235 (752,918)
	32	(35,289,044)
	31	(3,296,418)
		(281,224)
	30	39,478,738
	14	(2,984,934)
Operating profit		86,488,992	142,921,997
Fair value gain/(loss) on investment carried at FVTPL Share of results from associates Gain/(loss) on digital assets at FVTPL Gain on acquisition of interest in an associate Finance income Finance costs			(1,310,404) - (1,631,545) - - (1,102,918)
	10	823,524
	9	(31,110,277)
	11	100,731,489
	9	50,905,738
		273,151
	35	(333,145)

Profit for theyear attributable to the shareholders		207,779,472	138,877,130
Earningsper share

Basic and diluted(USD)	34	0.04	0.03

The notes on pages 65 to 139 form an integral part of these consolidated financial statements.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 (INCLUDING NOTES)

(INCLUDING NOTES)
	Year ended 31 December
Profit for the year Other comprehensive income		2023	2022
	Notes	USD	USD
			(unaudited) 138,877,130
		207,779,472

Items that may be reclassified to profit or loss in subsequent periods:_Exchange (loss)/ gain on retranslation of foreign subsidiaries _Items that will not be reclassified to profit or loss in subsequent periods: Gain on revaluation of property and equipment Share of other comprehensive income of associate Gain on revaluation of digital assets Other comprehensive income for theyear		(87,198)	19,865 11,380,058 - - 11,399,923

	6	-
	9	13,199,451
		44,273
		13,156,526
Total comprehensive income for the year attributable to the shareholders		220,935,998	150,277,053

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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----- Start of picture text -----

Shareholders’ Contribution
Share Share Statutory Retained Other current from Total
capital Premium reserve earnings reserves account shareholders equity
Note 16 (i) Note 16 (i) Note 19 Note 16(ii) Note 17 Note 18
USD USD USD USD USD USD USD USD
----- End of picture text -----

At 1 January 2022 (unaudited) Profit for the year Other comprehensive income Total comprehensive income for the year	10,000 - 13,615 43,898,230 (45,259) 50,810,229 3,841,470 98,528,285	10,000 - 13,615 43,898,230 (45,259) 50,810,229 3,841,470 98,528,285	10,000 - 13,615 43,898,230 (45,259) 50,810,229 3,841,470 98,528,285	10,000 - 13,615 43,898,230 (45,259) 50,810,229 3,841,470 98,528,285	10,000 - 13,615 43,898,230 (45,259) 50,810,229 3,841,470 98,528,285	10,000 - 13,615 43,898,230 (45,259) 50,810,229 3,841,470 98,528,285	10,000 - 13,615 43,898,230 (45,259) 50,810,229 3,841,470 98,528,285	10,000 - 13,615 43,898,230 (45,259) 50,810,229 3,841,470 98,528,285
	- - - 138,877,130 - - - 138,877,130 - - - - 11,399,923 - - 11,399,923
	- - - 138,877,130 11,399,923 - - 150,277,053
Additional capital contribution Dividend Movement during the year At 31 December 2022 (unaudited)
	- - -	- - -	- - -	- (100,592,800) -	- - -	- - (41,790,852)	174,525 - -	174,525 (100,592,800) (41,790,852)
	- - - (100,592,800) - (41,790,852) 174,525 (142,209,127) 10,000 - 13,615 82,182,560 11,354,664 9,019,377 4,015,995 106,596,211
At 1 January 2023 (unaudited) Profit for the year Other comprehensive income Total comprehensive income for the year	10,000 - 13,615 82,182,560 11,354,664 9,019,377 4,015,995 106,596,211
	- - - 207,779,472 - - - 207,779,472 - - - 13,156,526 - - 13,156,526
	- - - 207,779,472 13,156,526 - - 220,935,998

Repayment of capital contribution (Note 18) New share issue (Note 16) Contribution received from shareholders (Note 18) Dividend (Note 18) Funds paid (Note 17) Capitalisation ofretained earnings (Note 16) Public share issue (Note 16) At 31 December 2023	- 40,000 - - - 139,950,000 24,705,882	- - - - - - 345,882,353	- - - - - - -	- - - (13,000,000) - (139,950,000) -	- - - - - - -	- - - - (9,019,377) - -	(49,272,348) - 57,251,261 13,000,000 - - -	(49,272,348) 40,000 57,251,261 - (9,019,377) - 370,588,235
	164,705,882	345,882,353	13,615	137,012,032	24,511,190	-	24,994,908	697,119,980

www.phoenixgroupuae.com

The notes on pages 65 to 139 form an integral part of these consolidated financial statements.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

CONSOLIDATED STATEMENT OF CASH FLOWS

	Year ended 31 December	Year ended 31 December	Year ended 31 December
		2023	2022
	Notes	USD	USD
			(unaudited)
Operating activities
Profit for the year Adjustments for: Depreciation and amortization on property and equipment, intangible assets and right-of-use asset Share of loss from associates Impairment of investment in associate Gain on acquisition of interest in an associate (Gain)/loss on investment- FVTPL Gain on digital assets at FVTPL Miscellaneous income Employees’ end of service benefits provision (Reversal)/allowance for expected credit losses Allowance for net realisable value Loss on disposal of property and equipment Finance costs Finance income		207,779,472	138,877,130 1,437,791 - - - 2,941,949 - - 153,589 1,366,016 12,069,307 1,103,977 1,102,918 -



	6,7,8	795,265
	9	6,013,789
	9	25,096,488
	9	(50,905,738)
	10	(823,524)
	11	(99,510,000)
	30	(37,200,000)
	22	697,947
	32	(1,366,016)
	32	13,685,501
	32	-
	38	333,145
		(273,151)
Changes in working capital:		64,323,178	159,052,677


Inventories Trade receivables Advances, deposits and other receivables Due from a related party Digital assets Trade payables Other liabilities Due to relatedparties		(45,558,094)	(14,783,887) (30,360,886) 380,816,250 (6,027,099) 2,120,977 185,215 (304,873,754) 4,101,228
		(30,238,167)
		(134,312,614)
		8,316,898
		(1,525,201)
		263,944
		5,026,936
		{2,621,856}
Employees’ end of service benefits paid Finance income received		(136,324,976)	190,230,721 (16,894) -
	22	(9,465)
		273,151
Net cash(used in)/ generated from operating activities		(136,061,290)	190,213,827
Investing activities Purchase of intangible assets Investment for acquisition of interest in an associate/FVPTL Purchase ofpropertyand equipment			- (30,000) (44,578,817)

	8	(39,686)
		(4,283,584)
	6	(30,730,282)
Net cash flows used in investing activities		(35,053,552)	(44,608,817)

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)

(continued)
	Year ended 31 December
	Notes	2023	2022
		USD	USD
	(unaudited)
Financing activities
Dividend paid Proceeds from public share issue Repayment of interest-bearing loans Finance cost paid Payment of lease liability Funds repaid to shareholder on current account Funds received as contribution from shareholders (net)	36 - (100,592,800) 16 370,628,235 - 23 (206,430) (171,642) 38 (321,470) (1,102,918) 7 (136,147) - 17 (9,019,377) (44,483,529) 18 7,978,913 174,525
Net cash flows from/ (used in) financing activities	368,923,724 (146,176,364)
Net increase/ (decrease) in cash and cash equivalents Net foreign exchange difference Cash and cash equivalents at 1 January Cash and cash equivalents at 31 December	197,808,882 (571,254) (87,198) 19,865 442,871 994,260 15 198,164,555 442,871
Significant non-cash transactions Payable to WAS Four Investment- Sole Proprietorship L.L.C, UAE on acquisition of investment in an associate	9 10,109,414 - 16 40,000 - 16 139,950,000 - 9 50,905,738 - 9 43,951,447 - 6,126 - 36 13,000,000 - 25 20,441,040 -
Issuance of additional share capital
Capitalization of retained earnings to share capital
Gain on acquisition of interest in an associate
Transfer of investment from FVTPL to associate
Contribution in kind to associate
Dividend in kind
Deferred income
Investment made in acquisition of interest in associate	- 28,946,795
Acquisition of investment at fair value through profit or loss	- 43,127,923

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD) Notes to the consolidated financial statements for the year ended 31 December 2023

Corporate information

1.

Phoenix Group PLC (formerly known as Phoenix Group Ltd) (the “Company”) was incorporated on 2 August 2022, as a Private Company Limited by Shares in Abu Dhabi Global Market - Abu Dhabi, United Arab Emirates. The registered address of the Company is 3412ResCo-work10, 34 Floor, Al Maqam Tower, Regus ADGM Square, Al Maryah Island, Abu Dhabi, United Arab Emirates.

Subsequent to year ended 31 December 2022, the Board of Directors of Phoenix Group Ltd (currently known as Phoenix Group PLC), who were also the beneficial owners of the Entities as reported in the combined financial statements for the year ended 31 December 2022 and disclosed in Note 20, resolved and approved for restructuring of such Entities whereby the beneficial interest therein were transferred to Phoenix Group Ltd (currently known as Phoenix Group PLC) as the Parent Company. With this restructuring, the Parent Company together with such Entities formed the “Group”.

On 12 September 2023, Mr. Munaf Ali (21.50%), Mr. Seyedmohammad Alizadehfard (18.20%) and Mr. Najib Abou Hamze (16.50%) transferred aforementioned percentage of shares to M/s. Agora SPV Ltd, resulting in M/s. Agora SPV Ltd becoming a major shareholder with a 56.20% ownership stake in the Company.

On 19 September 2023, the Company has increased its authorized share capital from USD 10,000, consisting of ordinary shares having a nominal value of USD 1 per share, to USD 50,000, distributed among 50,000 ordinary shares with a nominal value ofUSD 1 per share.

On 25 September 2023, the legal status of the Company was changed from Private Company Limited by Shares to Public Company Limited by Shares and was registered with Abu Dhabi Global Market under a registration number 7975.

On 28 September 2023, the Company has further increased its authorized share capital from USD 50,000, consisting of ordinary shares valued at USD 1 per share, to USD 140,000,000 distributed among 5,141,500,000 ordinary shares having nominal value of USD 0.027 per share. This increase in the share capital was allocated to the shareholders existing on that date in proportion to their shareholding.

On 6 October 2023, M/s. Agora SPV LTD (5.62%), Mr. Najib Abou Hamze (1.35%), Mr. Seyedmohammad Alizadehfard (0.71%), M/s. Hyperion Holdings Limited (0.48%), M/s. Hades Holdings Limited (0.45%), M/s. Artemis Holdings Ltd (0.43%), M/s. Echo Holding Limited (0.40%), M/s. Horizon Holding Limited (0.30%), and M/s. Vertex Holding Limited (0.26%) transferred aforementioned percentage of shares to M/s. International Tech Group SP LLC, resulting in M/s. International Tech Group SP LLC becoming a shareholder with a 10% ownership stake in the Company.

www.phoenixgroupuae.com

(continued) for the year ended 31 December 2023

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

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----- Start of picture text -----

Country of % Interest
Name of entity Principal Activity
Incorporation 2023 2022
----- End of picture text -----

				(unaudited)
Phoenix HoldingCorporation Limited	To act as specialpurpose vehicle	UAE	100%	-
Phoenix Worldwide Holdings Limited	To act as specialpurpose vehicle	UAE	100%	-
Phoenix Assets Holdings Limited	To act as specialpurpose vehicle	UAE	100%	-
Phoenix Management Holdings Limited	To act as special purpose vehicle	UAE	100%	-
Phoenix Cohost Holdings Limited	To act as specialpurpose vehicle	UAE	100%	-
Phoenix Trade Ventures Holdings Limited	To act as special purpose vehicle	UAE	100%	-
Phoenix Digital Solutions Holdings Limited	To act as special purpose vehicle	UAE	100%	-
Phoenix INV Holdings Limited	To act as specialpurpose vehicle	UAE	100%	-
Phoenix Servco Holdings Limited	To act as specialpurpose vehicle	UAE	100%	-
Phoenix BT Holdings Limited	To act as specialpurpose vehicle	UAE	100%	-
Phoenix Global Ventures Holding Limited	To act as special purpose vehicle	UAE	100%	-
Phoenix Mena Holdings Limited	To act as specialpurpose vehicle	UAE	100%	-
Phoenix Techco Cryptocurrency Mining - L.L.C - O.P.C	Digital currency mining and electronic currency design and programming	UAE	100%	-
PGM Holdings Ltd	To act as specialpurpose vehicle	UAE	100%	-
Phoenix Namo Mining Holdings Limited	To act as special purpose vehicle	UAE	100%	-
Phoenix MISR MiningHoldings Ltd	To act as specialpurpose vehicle	UAE	100%	-
Phoenix World Electronics Trading LLC	Computer and peripheral equipment trading	UAE	100%	100%

www.phoenixgroupuae.com

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

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Country of % Interest
Name of entity Principal Activity
Incorporation 2023 2022
----- End of picture text -----

				(unaudited)
PTC Cloud Tech FZCO	To provide cloud service and data centers	UAE	100%	100%
	provider and robots and smart machines rental
Mega Phoenix Electronics TradingL.L.C	Computer andperipheral equipment trading	UAE	100%	100%
Phoenix World Electronics LLC	To engage in any lawful act or activity for which	USA	100%	100%
	corporations are authorised by the Delaware
	General Corporation Law
Advanced Power Solutions Inc.	To engage in those activities which are not	Canada	100%	100%
	prohibited by Alberta’s business Corporation
	Act
Absolute Power Solutions Inc.	To engage in any lawful act or activity for which	USA	100%	100%
	corporations are authorised by the Delaware
	General Corporation Law
Block Zero HS, Inc.	To engage in any lawful act or activity for which	USA	100%	100%
	corporations are authorised by the Delaware
	General Corporation Law
Block One Technology Inc.	To engage in those activities which are not	Canada	100%	100%
	prohibited by Alberta’s Business Corporation
	Act
Phoenix Electronics Logistics Limited	Insurancepolicyholder	HongKong	100%	100%
Phoenix Operations and Maintenance LLC	To engage in any lawful act or activity for which	USA	100%	100%
	corporations are authorised by the Delaware
	General Corporation
Phoenix Computer Equipment Trading Ltd	Wholesale of computers and outfit trading,	UAE	100%	100%
	wholesale of computer systems and software
	trading, wholesale of computer outfit and
	data processing trading, wholesale of
	telecommunication equipment trading and
	wholesale of spareparts trading
Phoenix Data Centre Limited	Providing data centre services such as	UAE	100%	100%
	operations and maintenance, developer and
	space management and leasing operations
	and maintenance, developer and space
	management and leasing
PhoenixVentures Limited	To provide internet and multimedia consultancy	UAE	100%	100%
	and software service solution To act as special
	purpose vehicle
Phoenix Power and EnergyHoldings Limited	To act as specialpurpose vehicle	UAE(ADGM)	100%	-
Phoenix OCM Company (FZ)	To engage in any lawful act or activity for which	Oman	100%	-
	corporations are authorized.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

2. Summary of material accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

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) and comply where appropriate, with the Articles of Association, the applicable requirements of Abu Dhabi Global Market (“ADGM”) Companies Regulations 2020 and Companies Regulations (International Accounting Standards) Rules 2015 issued by Abu Dhabi Global Market.

The preparation of consolidated financial statements in conformity with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3.

Basis of measurement

These consolidated financial statements have been prepared on the historical cost basis, except for investment at fair value through profit or loss, digital assets and building, which are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The Company and its subsidiaries constitute a “Group”.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

2.2 Changes in accounting policies and disclosures

(a) New and amended standards adopted by the Group

The accounting policies adopted are consistent with those of the previous financial year, except for the adoption of the following new standards, interpretations and amendments effective as of l January 2023. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective:

IFRS 17 Insurance Contracts (Amendments to IFRS 17 Insurance Contracts)
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
Definition of Accounting Estimates (Amendments to IAS 8)
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
International Tax Reform-Pillar Two Model Rules (Amendments to IAS 12)

These standards and amendments had no significant impact on the consolidated financial statements of the Group.

(b) Standards issued but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s consolidated financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
Supply Chain Financing Arrangements (Amendments to IFRS 7)
Lack of exchangeability (Amendments to IAS 21)
Sale or contribution of assets between and investor and its associate or joint venture (Amendments to IFRS 10 and IAS 28)

The Group does not expect that the adoption of these new and amended standards and interpretations will have a material impact on its consolidated financial statements.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

2.3 Consolidation

Subsidiaries are all entities (including structured entities) over which the Group has control.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Control is achieved when the Company has all of the following elements:

Power over the investee, i.e. The investor has existing rights that give it the ability to direct the relevant activities (the activities that significantly affect the investee’s returns)
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect the amount of the investor’s returns.

Specifically, the results of subsidiaries acquired or disposed of during the year are included in consolidated statement of profit or loss and comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Where necessary, adjustments are made to the consolidated financial statements of subsidiaries to bring the accounting policies used into line with the Group’s accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

All financial statements are made up to 31 December 2023. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies.

The principal accounting policies applied in these consolidated financial statements are set out below.

2.4 Foreign currency translation

(a) Functional and presentation currency

The consolidated financial statements are prepared and presented in US Dollars (“USD”), which is the Group’s presentation currency. Each component determines its functional currency and items included in the financial statements of these companies are measured using that functional currency.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

(b) Transactions and balances

Foreign currency transactions are translated into the respective functional currencies using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of comprehensive income. Foreign exchange gains and losses are presented in the consolidated statement of comprehensive income.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Differences arising on settlement or translation of monetary items are recognized in the consolidated statement of profit or loss with the exception of monetary items that are designated as part of the Group’s net investment in a foreign operation. These are recognized in consolidated statement of comprehensive income (OCI) until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recognized in other comprehensive income (OCI).

(a) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

Assets and liabilities for each consolidated statement of financial position presented are translated at the closing rate at the date of that balance sheet;
Income and expenses for each consolidated statement of profit or loss and consolidated statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
All resulting exchange differences are recognised in other comprehensive income.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Foreign currency differences are recognized in other comprehensive income and presented in the foreign currency translation reserve (“FCTR”) in equity. However, if the foreign operation is a non-wholly owned subsidiary, then the relevant proportion of the translation difference is allocated to non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to the consolidated statement of profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests.

When the Group disposes of only part of its investment in associate that includes a foreign operation while retaining significant influence, the relevant proportion of the cumulative amount is reclassified to the consolidated statement of profit or loss.

Foreign exchange gains and losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recognized in other comprehensive income and are presented within equity in the FCTR.

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences are recognized in other comprehensive income.

2.5 Property and equipment

Refer Note 6.

2.6 Capital work-in-progress (CWIP)

Refer Note 6.

2.7 Intangible assets

Refer Note 8.

2.8 Investments:

Refer Note 9 and 10.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

2.9 Financial instruments

2.9.1 Financial assets

The Group has the following financial assets: ‘due from a related party’, ‘cash and short-term deposits’, ‘trade receivables’ and ‘deposits and other receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Cash and short-term deposits

Cash and short-term deposits include cash in hand, cash at bank and shortterm deposits varying from one day to three months.

Classification of financial assets and liabilities

Financial assets

All financial assets under scope of IFRS 9 are required to be subsequently measured at amortised cost or fair value on the basis of the Group’s business model for managing the financial assets and contractual cash flow characteristics of the financial assets.

A financial asset is measured at amortised cost, if both the following conditions are met:

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.

A financial asset is measured at fair value through other comprehensive income, if both of the following conditions are met:

The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling 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.

A financial asset is measured at fair value through profit or loss, unless it is measured at amortised cost or at fair value through other comprehensive income. However, the Group may make an irrevocable election at initial recognition for particular investments in equity instruments that would otherwise be measured at fair value through profit or loss to present subsequent changes in fair value in other comprehensive income.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

2.9.2 Financial liabilities

All financial liabilities are classified as subsequently measured at amortised cost, except for:

Financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, are subsequently measured at fair value;
Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies;
Financial guarantee contracts; and
Commitments to provide a loan at a below-market interest rate.

At initial recognition, the Group may irrevocably designate a financial liability as measured at fair value through profit or loss when permitted, or when doing so results in more relevant information, because either:

It eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to ‘as an accounting mismatch’) that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases; or
A group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the entity’s key management personnel.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

2.9.3 Offsetting

Financial assets and financial liabilities are only offset and the net amount reported in the consolidated statement of financial position when there is legally enforceable right to offset the recognised amounts and the Group intends to settle on a net basis.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

2.9.4 Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on tradedate, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

2.9.5 Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL ), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in the consolidated statement of profit or loss.

2.9.6 Impairment

The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables, see note 3.2 for further details.

2.10 Trade receivables

Refer Note 13.

2.11 Digital assets

Refer Note 11.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

(a) Deferred tax

The tax expense/ credit for the year comprise current and deferred tax.

The current income tax charge is calculated on the basis of the tax laws enacted at the end of the reporting period in the countries where the Group’s subsidiaries operate and generate taxable income.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Also deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill in a business combination. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted in the jurisdiction of the individual companies by the end of the reporting period and are expected to apply when the related deferred income tax liability is settled or the deferred income tax asset is realised. A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available, against which the temporary differences can be utilised.

2.12 Cash and short-term deposits

Refer Note 15.

2.13 Trade payables

Refer note 24.

2.14 Taxation

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Deferred income tax assets and liabilities offset when:

A legally enforceable right exists to offset current income tax assets against current income tax liabilities,
The deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

(b) Value added tax (VAT)

Expenses and assets are recognised net of the amount of VAT, except:

When the VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable; or
When receivables and payables are stated with the amount of VAT included.

The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the consolidated statement of financial position.

2.15 Provisions

Provisions are recognised when the Group has an obligation (legal or constructive) arising from a past event, and the costs to settle the obligation are both probable and able to be reliably measured.

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 end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably

2.16 Employees’ end of service benefits

Refer Note 22.

2.17 Earnings per share

Basic earnings per share is calculated by dividing:

The profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares; and
By the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements and share split in ordinary shares issued during the year and excluding treasury shares.

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

The after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
The weighted average number of additional ordinary shares that would have been outstanding, assuming the conversion of all dilutive potential ordinary shares.

2.18 Interest-bearing loans

After initial recognition, interest bearing loans are subsequently measured at amortised cost using the effective interest rate method.

Gains and losses are recognised in the consolidated statement of profit or loss when the liabilities are derecognised as well as through the amortisation process.

2.19 Deferred income

Refer Note 25.

2.20 Revenue recognition

Refer Note 28.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

2.21 Leases

Refer Note 7.

2.22 Inventories

Refer Note 12.

2.23 Current versus non-current classification

The Group presents assets and liabilities in the consolidated statement of financial position based on current/non-current classification. An asset is current when it is:

Expected to be realised or intended to be sold or consumed in the normal operating cycle;
Held primarily for the purpose of trading;
Expected to be realised within twelve months after the reporting period; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

3. Significant accounting judgements, estimates and assumptions

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

3.1 Significant accounting judgements

(a) Business combination under common control

The consolidated financial statements of the Group are prepared based on the judgement that on the date of acquisition of Entities as disclosed in Note 20, the Company and the Entities are controlled by the same parties. And this restructuring does not impact the beneficial interest of such parties in the Company and the Entities before and after the transition. Hence, the Group’s management believes that the acquisition of interest in entities through restructuring meets the criteria of business under common control and are accounted for under the pooling of interest method using predecessor values method.

A liability is current when:

It is expected to be settled in the normal operating cycle;
• It is held primarily for the purpose of trading;
It is due to be settled within twelve months after the reporting period; or There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

2.24 Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time as the assets is substantially ready for their intended use. All other borrowing costs are recognized as an expense in the consolidated statement of profit or loss in the period in which they are incurred.

(b) Classification of an investment in an associate

For assessing significant influence, the Group has assessed if there is evidence of one or more of the following ways of having significant influence in the Citadel Technologies Group LLC (“Citadel”):

Representation on the board of directors or equivalent governing body of the investee
Participation in policy-making processes, including participation in decisions about dividends or other distributions;
Material transactions between the entity and its investee;
Interchange of managerial personnel; or
Provision of essential technical information.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

The Group has the right to appoint 1 out of 5 members of the Board of Directors (representing 20% of the total voting rights) that is the governance body responsible for directing the relevant activities of Citadel beside having a 15% equity stake in Citadel and provision of essential technical information through the Operation & Maintenance Agreement entered with the remaining shareholders of Citadel.

Based on above, the Group’s management believe that they have practical ability to exercise significant influence over Citadel and therefore, accounted for it as an associate as per the equity method of accounting.

(c) Classification of digital assets

As intangible assets

The management recognizes income from the provision of transaction verification services within the Bitcoin network, commonly referred to as “cryptocurrency mining”. The Group through its wholly owned subsidiaries, participates in mining pools operated by third parties in order to limit its exposure to variability of mining output. The Group receives bitcoins from the mining pool operator as consideration for its participation in the pool.

Income earned from mining is measured based on the fair value of the bitcoin reward received. The fair value is derived based on the end of day average price of bitcoin, on the date of receipt, which is not materially different from the fair value at the time the Group earned the award.

The revenue is recognised with corresponding asset (under intangible asset) based on the delivery of digital asset into the Group’s wallet once an algorithm has been solved.

The criteria for performance obligation is assessed to have occurred once the digital asset has been received in the Group’s wallet. Mining earnings are made up of the baseline block reward and transaction fees upto 5% of total block reward, however, these are bundled together in the daily deposits from mining and therefore are not capable of being analysed separately.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

As inventory

The management has assessed that it acts in a capacity as a commoditybroker trader with respect to digital assets acquired for trading as defined in IAS 2. If assets held by commodity broker-traders are principally acquired for the purpose of selling in the near future and generating a profit from fluctuations in price or broker-traders’ margin, such assets are accounted for as inventory, and changes in fair value (less cost to sell) are recognized in consolidated statement of profit or loss.

By applying the principles of IAS 2, the Group treats its digital assets as inventory, measured at fair value less cost to sell. Consequently, any changes in fair value are recognized in the consolidated statement of profit or loss. Management believes that recognizing digital assets at fair value through the profit and loss accurately reflects the economic substance of their trading activities and is in line with the Group’s overall strategic vision for holding these assets.

(d) Tax

UAE Corporate Tax

On 9 December 2022, the UAE Ministry of Finance released Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (Corporate Tax Law or the Law) to enact a Federal corporate tax (CT) regime in the UAE. The CT regime is effective from 1 June 2023 and accordingly, it has an income tax related impact on the financial statements for accounting periods beginning on or after 1 June 2023. The Cabinet of Ministers Decision No. 116/2022 (published in December 2022 and considered to be effective from 16 January 2023) specifies that taxable income not exceeding AED 375,000 would be subject to the 0% UAE CT rate, and taxable income exceeding AED 375,000 would be subject to the 9% UAE CT rate. With the publication of this Decision, the UAE CT Law is considered to be substantively enacted for the purposes of accounting for Income Taxes. The UAE CT Law shall apply to the Company with effect from 1 January 2024. The Ministry of Finance continues to issue supplemental Decisions of the Cabinet of Ministers of the UAE (Decisions) to further clarify certain aspects of the UAE CT Law. Such Decisions, and other interpretive guidance of the UAE Federal Tax Authority, are required to fully evaluate the impact of the UAE CT Law on the Company.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Based on the current provisions of the UAE CT Law (including interpretation based on the Ministerial decisions and related guidance) and in accordance with IAS 12 Income Taxes, the company has evaluated deferred tax accounting impact as at the reporting date. Following assessment of the potential impact of the UAE CT Law on the consolidated statement of financial position, we do not consider there to be any temporary differences on which deferred taxes should be accounted. The Company will continue to monitor the publication of subsequent Decisions and related guidance, as well as continuing its more detailed review of its financial matters, to consider any changes to the position at subsequent reporting dates.

(e) Classification of crypto mining machines

The management has classified crypto mining machines as inventories. The machines are purchased for trading purpose as one of the lines of business. These machines are in the Group’s own use until these are sold to customers. The Group uses machines for digital assets mining and records mining revenue as disclosed in note 11(b) and 28, respectively.

Based on the business objective and purpose of purchases of machines, the Group has classified these as inventories.

3.2 Significant accounting estimates and assumptions

(a) Useful lives of property and equipment, right-of-use assets and intangible assets

The Group determines the estimated useful lives and related depreciation charges for its property and equipment, right of-use assets and intangible assets. This estimate is based on the intended use of the assets and the expected economic lives of those assets. It could change significantly as a result of technical innovations and competitor actions in response to severe industry cycles.

Management will increase the depreciation charge where useful lives are less than previously estimated lives, or it will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold.

(b) Impairment of trade receivables

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

The loss allowance for trade receivables is based on assumptions about risk of default and expected loss rates. Management uses judgement in making these assumptions and selecting the inputs to the impairment calculation which are applied to the exposure at default to arrive at the expected credit losses at the reporting date. Management base their assumptions on the Group’s historical data, existing market conditions as well as forward looking estimates.

At the reporting date, gross trade receivables were USD 33,061,633 (2022 (unaudited): USD 2,823,466) with a provision for expected credit losses amounting to USD Nil (2022 (unaudited): USD 1,366,016) as at 31 December 2023 (Note 13). Any difference between the amounts actually collected in future periods and the amounts expected to be received will be recognised in the consolidated statement of profit or loss.

(c) Leases - Estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency).

(d) Provision for obsolete and slow-moving inventories

The Group reviews its inventories to assess losses on account of obsolescence on a regular basis. In determining whether a provision for obsolescence should be recorded in the consolidated statement of profit or loss, the Group makes judgements based on the ageing of the stocks and the past consumption of the stocks, as to whether there is any observable data indicating whether individual products are saleable and indicating the net realisable value of such products. Accordingly, a provision for impairment is recorded where the net realisable value is less than cost based on best estimates by the management.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for trade receivables.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Inventory is regularly reviewed by the management and slow moving items, if any, are brought down to their net realisable value (NRV). NRV signifies the estimated selling price in the ordinary course of business less the estimated costs of necessary to make the sale.

(e) Fair value of digital assets

Management note that the topic of digital assets and the accounting for digital assets continues to be considered by the International Accounting Standards Board (IASB) and continues to monitors new comments and interpretations released by the Board and other standard setters from around the world.

In line with this, the Group has considered its position for the year ended 31 December 2023 and has determined that the Group’s digital assets fall into 2 categories:

Intangible asset method (the method noted by the IASB in its most recent deliberations)

• Inventory method (used where the digital asset meets the criteria of inventories)

Management notes that under the methods noted above, the treatment continues to be to measure digital assets at fair value (unless otherwise disclosed and provided certain conditions are met) under the respective accounting standards.

Digital assets are measured at fair value using the quoted price in United States dollars on from a number of different sources with the primary being Coin Market Cap (www.coinmarketcap.com) at closing Coordinated Universal Time. Management considers this fair value to be a Level 1 input under the IFRS 13 Fair Value Measurement fair value hierarchy as the price on the quoted price (unadjusted) in an active market for identical assets.

Management uses M2 exchanges in order to provide the Group with appropriate size and liquidity to provide reliable evidence of fair value for the size and volume of transactions that are reasonably contemplated by the Group.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

4. Financial risk management objectives and policies

Interest rate risk

The Group is exposed to interest rate risk arising from its floating rate borrowings and deposits.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group’s profit (through the impact on floating rate borrowings and short-term deposits). There is no impact on the Group’s equity.

Increase in basis points	Net effect on profit for one year USD
+/-100 1,944,425
+/- 100 39,284

2023 2022 (unaudited)

Credit risk

Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions. Individual risk limits are based on management’s assessment on a case-by-case basis. The utilisation of credit limits is regularly monitored.

The Group’s policy is to place cash and short-term deposits with reputable banks and financial institutions.

The Group trades only with recognized, creditworthy third parties. Receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. Credit risks limited to the carrying values of financial assets in the consolidated statement of financial position. Its 3 (2022 (unaudited): 3) largest customers account for 92% (2022 (unaudited): 79%) of outstanding trade receivables at 31 December 2023.

Impairment of financial assets

As mentioned in note 2.9.6, the Group’s trade receivables are subject to the expected credit loss.

While cash and short-term deposits are also subject to the impairment requirements of IFRS 9, the Group has determined the expected credit loss on bank balances to be insignificant considering that the counterparty banks are investment grade category and have a low probability of default and loss given default.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The loss allowance for trade receivables is based on assumptions about risk of default and expected loss rates. The expected credit loss on trade receivables is determined to be insignificant. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group’s exposure through the expected credit loss is immaterial for the year ended and as at 31 December 2023.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense are denominated in a different currency from the Group’s functional currency), financial assets at fair value through profit or loss and the Group’s net investments in foreign subsidiaries.

Liquidity risk

The Group limits its liquidity risk by ensuring bank facilities and adequate cash from operations are available.

The table below summarises the contractual and expected maturities of the Group’s financial liabilities at 31 December based on undiscounted payments and current market interest rates.

The Group has an exposure on its foreign currency transactions mainly from UK Pounds (GBP) and United Arab Emirates Dirham (UAE Dirham). As the UAE Dirham is pegged to the US Dollar, any balances in US Dollars, so UAE Dirham currency is not considered to represent significant currency risk.

At 31 December 2023, the Group does not have material foreign currency risk.

Other risk

Less than 3 months USD	Less than 3 months USD	3 to 12 months USD	1 to 5 years USD	>5 years USD	Total USD
At 31 December 2023
Trade payables (Note 24) Other liabilities* (Note 25) Interest-bearing loans Lease liability	- - 117,604 -	575,497 26,396,743 352,811 272,294	- - 2,352,075 408,441	- - 3,214,504 -	575,497 26,396,743 6,036,994 680,735
Total	117,604	27,597,345	2,709,067	3,214,504	33,689,969
At 31 December 2022(unaudited)
Trade payables (Note 24) Other liabilities* (Note 25) Interest-bearingloans	- - 111,733	311,553 12,398,644 351,441	- - 2,352,075	- - 3,684,919	311,553 12,398,644 6,500,168
Total	111,733	13,061,638	2,352,075	3,684,919	19,210,365

For the purpose of the liquidity risk disclosure, amounting to USD 49.99 million (2022:(unaudited): USD 58.96 million) have been excluded from other liabilities related to advance received from customers and deferred income.

The Group is exposed to price risk arising from prices of the digital assets. Prices fluctuates based on the supply and demand of MMX coins and Bitcoins that may result in reductions in net profit. There can be no set predictions at a level that provides assurance of the same or similar prices, and any reduction in the prices on the said digital assets would have a material adverse impact on the results of operations and financial position.

operations and financial position.	sition.
In% Value Effect on profit for one year USD Effect on other comprehensive income for one year USD 2023 +/-1 1,367,100 32,901	Effect on profit for one year USD	Effect on other comprehensive income for one year USD
2022 (unaudited) +/- 1 - 17,206

Capital management

Whilst the continuity of the Group’s long-term investment program depends on the availability of the financing from the Shareholders, the management’s objective is to generate necessary operating cash flows to sustain day to day activities of the Group.

The Group monitors capital using a gearing ratio, which is net debt divided by total equity plus net debt. The Group includes within net debt, interest-bearing loans lease liability, less cash and short-term deposits. Capital includes share capital, share premium, other reserves, contribution from shareholders, shareholders’ current account and retained earnings.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) Notes to the consolidated financial statements (continued) for the year ended 31 December 2023	PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) Notes to the consolidated financial statements (continued) for the year ended 31 December 2023	PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) Notes to the consolidated financial statements (continued) for the year ended 31 December 2023
2023 2022 USD USD
		(Unaudited)
Interest-bearing loans (Note 23)	3,721,987	3,928,417
Lease liability (Note 7) Less: cash and short-term deposits (Note 15)	629,285	- (442,871)
	(198,164,555)
Net (cash)/debt	(193,813,283)	3,485,546
Share capital (Note 16(i)) Share premium (Note 16(i)) Retained earnings Shareholders’ current account (Note 17) Contribution from shareholders (Note 18) Other reserves (Note 16(ii))	164,705,882	10,000 - 82,182,560 9,019,377 4,015,995 11,354,664
	345,882,353
	137,012,032
	-
	24,994,908
	24,511,190
Net equity	697,106,368	106,582,596
Net equity and net debt		110,068,142
	503,293,085
Gearing ratio	Nil	3.17%

Fair value estimation

The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Consequently, differences can arise between carrying values and the fair value estimates.

While the Group prepares its consolidated financial statements under the historical cost convention except for measurement at fair value of derivatives, in the opinion of management, the carrying values and fair values of those financial assets and liabilities that are not carried at fair value in the consolidated financial statements are not materially different, since assets and liabilities are either short term in nature or frequently repriced.

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

quoted (unadjusted) other techniques for techniques which use prices in active markets for which all inputs which inputs which have a identical assets or liabilities; have a significant effect significant effect on on the recorded fair value the recorded fair value are observable, either that are not based on directly or indirectly; and observable market data.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

The below table shows the hierarchy used by the Group for the assets and liabilities that are measured at fair value or for which fair value information is disclosed as at 31 December 2023 and 2022:

Level 1 Level 2 Level 3 Total USD USD USD USD	Level 1 Level 2 Level 3 Total USD USD USD USD	Level 1 Level 2 Level 3 Total USD USD USD USD	Level 1 Level 2 Level 3 Total USD USD USD USD	Level 1 Level 2 Level 3 Total USD USD USD USD
31 December 2023
Assets which are at fair value Building (Note 6) Digital assets(Note 11)	- 140,000,124	21,704,138 -	- -	21,704,138 140,000,124
	140,000,124	21,704,138	-	161,704,262
31 December 2022(unaudited)
Assets which are at fair value Building (Note 6) Digital assets (Note 11) Investment at fair value through profit or loss(FVTPL) (Note 10)	- 1,720,650 -	21,704,138 - 43,127,923	- - -	21,704,138 1,720,650 43,127,923
	1,720,650	64,832,061	-	66,55,711

On a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the year ended 31 December 2023 and 2022, there are no transfers between the levels of fair value measurements.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

5. Comparative note

This is the first year for which IFRS consolidated financial statements are being prepared for the Group. For the year ended 31 December 2022, management of the Company prepared combined financial statements prepared under special purpose framework comprising the Company and Entities with common shareholding as disclosed in note 20. Those combined financial statements were audited.

6. Property and equipment

Material accounting policies

Property and equipment except for building are stated at cost less accumulated depreciation and impairment loss, if any. Building stated at revalued amount, which is the fair value at the date of revaluation. Subsequently, these are stated at revalued amounts less subsequent impairment losses, if any.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the consolidated statement of profit or loss when incurred.

Any revaluation increase arising on the revaluation of an asset such building is recognised in consolidated statement of comprehensive income and accumulated in equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in consolidated statement of profit or loss, in which case the increase is credited to consolidated statement of profit or loss to the extent of the decrease previously expensed. A decrease in the carrying amount arising on the revaluation of such asset is recognised in consolidated statement of profit or loss to the extent that it exceeds the balance, if any, held in the properties revaluation reserve relating to a previous revaluation of that asset. The incremental depreciation charge on the fair value of building is charged to equity under revaluation surplus and transfer to retained earnings.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Depreciation is recognised so as to write off the cost or valuation of assets (other than capital work in progress) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

The following useful lives are used in the calculation of depreciation:

Mining equipment	Years
	3-5
Building	40
Furniture and fixtures	3-5
Office equipment	3

Capital work-in-progress is stated at cost and is not depreciated. These costs are directly attributable to the construction, development, or acquisition activities these costs include:

Direct materials, labor, and overhead costs, and
Directly attributable indirect costs that meet the recognition criteria outlined in IAS 16 Property, Plant and Equipment.

Capitalization commences when expenditures are incurred for the construction, development, or acquisition of the asset. Capitalization ceases when the asset is substantially complete and ready for its intended use or sale.

Capital work-in-progress is recognized as an asset on the consolidated statement

of financial position when the following criteria are met:

a) Expenditures are incurred for the construction, development, or acquisition of a long-term asset,
b) The asset is not yet ready for its intended use or sale, and
c) Future economic benefits are expected to flow to the Group.

	Mining equipment USD	Building USD	Furniture and fixtures USD	Office equipment USD	Capital work-in- progress USD	Total USD
Cost:
At 1 January 2022 (unaudited) Additions Disposals Revaluation	6,095,340 - (6,095,340) -	- 10,324,080 - 11,380,058	27,572 2,068,361 - -	52,771 43,100 - -	18,439,638 32,143,276 - -	24,615,321 44,578,817 (6,095,340) 11,380,058
At 31 December 2022 (unaudited) Additions	- -	21,704,138 -	2,095,933 2,993	95,871 63,142	50,582,914 30,664,147	74,478,856 30,730,282
At 31 December 2023	-	21,704,138	2,098,926	159,013	81,247,061	105,209,138
Accumulated depreciation:
At 1 January 2022 (unaudited) Charge for the year Disposals	4,060,545 930,818 (4,991,363)	- 258,101 -	5,301 223,566 -	10,469 25,307 -	- - -	4,076,315 1,437,792 (4,991,363)
At 31 December 2022 (unaudited) Chargefor the year	- -	258,101 258,102	228,867 419,796	35,776 39,573	- -	522,744 717,471
At31 December 2023	-	5161203	648,663	75,349	-	1,240,215
Net carrying amount: At31 December 2023	-	21,187,935	1,450,263	83,664	81,247,061	103,968,923
At31 December 2022(unaudited)	-	21,446,037	1,867,066	60,095	50,582,914	73,956,112

The Group has carried out the last valuation exercise through an independent valuer in year 2022. Had there been no revaluation, the carrying amount of building and revaluation surplus on building would have been lower by USD 11.38 million and USD 11.38 million, respectively.

The fair values were determined with reference to market-based evidence, based on active market prices and relevant enquiries and information as considered necessary, and adjusted for any difference in nature, location or condition of the specific properties. The fair value of said lands falls under level 2 of fair value hierarchy (i.e. significant observable inputs).

Capital work-in-progress pertains to data centers which are under construction at USA and Oman. The management of the Group expect the projects relating to capital work-in-progress to complete by 2025.

www.phoenixgroupuae.com

The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amount, being the higher of their fair value less costs to sell and their value in use.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

7. Right-of-use asset and lease liability

Material accounting policies

Leases, where the Group is a lessee, are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

Fixed payments (including in-substance fixed payments), less any lease incentives receivable
Variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
Amounts expected to be payable by the group under residual value guarantees
The exercise price of a purchase option if the group is reasonably certain to exercise that option, and
Payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Group:

Where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received.
Uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the lessee which does not have recent thirdparty financing, and
Makes adjustments specific to the lease, e.g. Term, country, currency and security.

When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Lease payments are allocated between principal and finance cost. The finance cost is charged to consolidated statement of profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

The amount of the initial measurement of lease liability
Any lease payments made at or before the commencement date less any lease incentives received,
Any initial direct costs, and
Restoration costs.

Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

Payments associated with short-term leases are recognised on a straight-line basis as an expense in consolidated statement of profit or loss. Short-term leases are leases with a lease term of 12 months or less.

A lease modification is a change in scope of the lease, or the consideration for the lease that was not part of the original terms of the lease. When a modification increases the scope of the lease adding more underlying assets and the consideration is commensurate, the modification is accounted as a separate lease contract. However, if a modification increases the scope of the lease without adding the right to use of more underlying assets, or the increase in lease consideration is not commensurate, the modification is accounted for by remeasuring the existing lease.

remeasuring the existing lease.
	Years
Building	3

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Building USD	Building USD
Cost:
Additions At 31 December 2023	753,757 753,757
Accumulated depreciation:
Charge for the year At 31 December 2023 Net carrying amount:	73,273 73,273
At 31 December 2023	680,484
At 31 December 2022 (unaudited)	-
Set out below, is the carrying amount of the Group’s lease liability and the movement during the year: 2023 USD
At 1January	-
Addition Finance costs(Note 35)	753,757 11,675
Payments made	(136,147)
At 31 December	629,285

Set out below is the carrying amount of right-of-use asset recognised and the movements during the year:

www.phoenixgroupuae.com

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Lease liability is analysed in the consolidated statement of financial position as follows:

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

8. Intangible assets

Material accounting policies

	2023 USD
Current	356,991
Non-current	272,294
	629,285

Intangible assets comprise of the Group’s digital mining website and mobile application with a useful lives of 3 years.

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is recorded at fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

The useful lives of intangible assets are assessed to be either finite or indefinite.

Set out below, are the amounts recognised in the consolidated statement of profit or loss related to leases:

	2023	2022
	USD	USD
		(unaudited)
Depreciation expense of right-of-use asset Finance costs on lease liability (Note 35)	73,273	- -
	11,675
Rent expense - short-term leases (Note 32)	266,477	158,227

Impairment of intangible assets

At the end of each reporting period, the Group reviews the carrying amounts of its intangible 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 of the impairment loss (if any). When 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. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest company of cash-generating units for which a reasonable and consistent allocation basis can be identified.

www.phoenixgroupuae.com

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

2023
	Digital mining website USD	Mobile application USD	Total USD
Cost:
At 1 January 2022 and 31 December 2022 (unaudited) Additions	- 13,206	- 26,480	- 39,686
At 31 December 2023	13,206	26,480	39,686
Accumulated depreciation:
At 1 January 2022 and 31 December 2022 (unaudited) Charge for theyear	- 2,315	- 2,206	- 4,521
At 31 December 2023	2,315	2,206	4,521
Net carrying amount:
At 31 December 2023	10,891	24,274	35,165
At 31 December 2022(unaudited)	-	-	-

9. Investment in associates

Material accounting policies

An associate is an entity over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.

The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries. The results and assets and liabilities of Group’s associates are incorporated in these consolidated financial statements using the equity method of accounting, except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with IFRS 5.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Under the equity method, an investment in an associate is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive income of the associate. When the Group’s share of losses of an associate exceeds the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

An investment in an associate is accounted for using the equity method from the date on which the investee becomes an associate. On acquisition of the investment in an associate, any excess of the cost of the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in statement of profit or loss and other comprehensive income in the period in which the investment is acquired.

When the Group reduces its ownership interest in an associate but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

When the Group transacts with an associate of the Group, profits and losses resulting from the transactions with the associate are recognised in the Group’s consolidated financial statements only to the extent of interests in the associate that are not related to the Group.

The consolidated statement of profit or loss reflects the Group’s share of the results of operations of the associate. Any change in other comprehensive income (OCI) of those investees is presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes, when applicable, in the consolidated statement of changes in equity.

The aggregate of the Group’s share of profit or loss of associates is shown on the face of the consolidated statement of profit or loss.

The financial statements of the associate are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.

www.phoenixgroupuae.com

100

101

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value, and then recognises the loss within ‘Share of profit/(loss) of an associate’ in the consolidated statement of profit or loss.

Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognised in consolidated statement of profit or loss.

The balance of investment in associates in the consolidated statement of financial position as at 31 December 2023 and 31 December 2022 are as follows:

2023 2022 USD USD (unaudited)	2023	2022
Investment in Bitzero Blockchain Inc. (Bitzero) Investment in Citadel Technologies Group LLC, UAE (Citadel)- note i Investment in Lyvely FZE (Lyvely) Investment in M2 Holdings Limited,UAE(M2)	-	28,946,795 - - 30,000
	117,569,776
	2,740,250
	-
120,310,026 28,976,795

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

The Group’s interest in the associates are accounted for using the equity method in the consolidated financial statements, and the movement is as follows:

	2023	2022
	USD	USD
		(unaudited)
At 1January	28,976,795	-
Additions •Bitzero •Citadel •M2 •Lyvely Share of loss Share of other comprehensive income Provision for impairment of investment		28,946,795 - 30,000 - - - -
	-
	104,966,600
	1,277,457
	3,000,000
	(6,013,789)
	13,199,451
	(25,096,488)
At 31 December	120,310,026	28,976,795

www.phoenixgroupuae.com

102

103

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

(i) Acquisition of interest in Citadel

2023 USD	2023 USD
At 1January	-
Transfer from investment at FVTPL (Note 10) Additional investment (i) Share of loss Share of other comprehensive income Contribution made bya relatedpartyon behalf of the Group	43,951,447 50,905,738 (596,274) 13,199,451 10,109,414
At 31 December	117,569,776

(i) On October 12, 2023, beside the existing 7.5% shareholding in Citadel (classified as investment carried at fair value through profit or loss), the Group was awarded sweat equity of additional 7.5% of the ordinary share capital of the Citadel along with one board representation on Citadel out of the 5 board members of Citadel. Based on this additional shareholding and board representation, management of the Group has assessed that the Group is able to exercise significant influence over Citadel and hence classified the investment as an associate. Since, this additional 7.5% sweat equity was acquired at Nil consideration resulting in a gain on acquisition of investment in associate amounting to USD 50,905,738 after comparison to the carrying value on the date of acquisition.

The initial recognition of investment in Citadel as an associate is the provisional assessment of fair value while the Group management will appoint an independent valuation for carrying out the purchase price allocation (PPA) for determining the fair value of investment in associate and recognise any additional adjustment to the carrying value, if required, within the 12 months provisional period.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Summarised statement of profit or loss and comprehensive income of associates:

	Bitzero USD	Citadel USD	Lyvely USD	M2 USD	Total USD
For the year ended 31 December 2023
Revenue Cost of sales Administrative expenses Loss for the year Other comprehensive income	12,640,133 (20,871,715) (8,243,845) (16,475,427) -	178,223,077 (196,246,367) 2,158,142 (15,865,148) 111,343,606	2,000 (68,000) (973,000) (1,039,000) -	37,056,654 (23,946,482) (155,690,412) (142,580,240) 7,059,593	227,921,864 (241,132,564) (162,749,115) (175,959,815) 118,403,199
Total comprehensive(loss)/income for the year Percentage holding Group’s share of loss for the year Group’s share of loss for the year proportionately Group’s share of other comprehensive income	(16,475,427) 23.37% (3,850,307) (3,850,307) -	95,478,459 15% (2,379,771) (596,274) 13,199,451	(1,039,000) 25% (259,750) (259,750) -	(135,520,647) 30% (1,307,458) (1,307,458) -	(57,556,616) (7,797,291) (6,013,789) 13,199,451
Unrecorded losses	-	-	-	(39,348,736)	(39,348,736)

*Since the acquisition was made on October 12, 2023, hence the Group’s share is related to post acquisition period.

www.phoenixgroupuae.com

104

105

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Summarised statement of profit or loss and other comprehensive income of associates (continued):

	Bitzero USD	M2 USD	Total USD
31 December 2022(unaudited)
Revenue Cost of sales Administrative expenses Total comprehensive loss for the year Percentage holding	6,131,037 (7,930,203) (30,396,436) (32,195,602) 23.37%	- - - - 30%	6,131,037 (7,930,203) (30,396,436) (32,195,602) -
Group’s share ofprofit for theyear	-	-	-
Unrecorded losses	(7,524,112)	-	(7,524,112)

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

2023
	Bitzero	M2
	USD	USD
At 31 December 2022(unaudited)
Non-current assets Current assets Non-current liabilities Current liabilities	50,368,884 5,615,585 2,905,751 8,068,421	- - - -
Equity/net assets	45,010,297	-
Percentage holding	23.37%	30%
Group’s share of net assets	10,518,906	-
Other cost/adjustments relatingto investment	18,427,889	-
Carrying amount of the investment	28,946,795	30,000

Summarised statement of financial position of associates:

10. Investment at fair value through profit or loss (FVTPL)

	Bitzero USD	Citadel USD	Lyvely USD	M2 USD
At 31 December 2023
Non-current assets Current assets Non-current liabilities Current liabilities	43,786,352 5,199,855 2,349,204 8,102,131	791,807,802 25,729,195 2,025 29,889,696	- 3,936,000 - 90,000	9,734,534 209,550,890 90,570,485 49,985,586
Equity/ net assets	38,534,872	787,645,276	3,846,000	78,729,353
Percentage holding	23.37%	15%	20%	30%
Group’s share of net assets	9,005,199	118,146,791	769,000	23,618,806
Other cost/adjustments relatingto investment	16,091,289	(577,015)	1,971,250	(26,643,306)
Impairment of investment Carrying amount of the investment	(25,096,488) -	- 117,569,776	- 2,740,250	- -

	2023	2022
	USD	USD
		(unaudited)
At 1January	43,127,923	-
Additions Changes in fair value Derecognition on transfer to investment in associate (Note 9) At 31 December	-	44,438,327 (1,310,404) - 43,127,923
	823,524
	(43,951,447)
	-

www.phoenixgroupuae.com

106

107

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

The Group held 7.5% of the ordinary share capital of Citadel Technologies Group LLC (“Citadel”), a company licensed to invest and manage technological projects, commercial enterprises and mine cryptocurrencies in United Arab Emirates. Until October 12, 2023, the management of the Group assessed that the Group did not have ability to exercise significant influence over Citadel as the other 92.5% of the ordinary share capital was held by two shareholders.

During the year i.e., on the aforementioned date, the Group was awarded sweat equity of additional 7.5% of the ordinary share capital of the Citadel, one board representation on Citadel out of 5 board members. Further, the Group is awarded the operational and maintenance contract for Citadel. Based on these, management of the Group has assessed that the Group is able to exercise significant influence over Citadel and hence classified the investment as an associate (Note 9). On derecognition date, the Group reassessed the fair value of the investments using the best estimate of the net assets value of Citadel and recorded a fair value gain of USD 823,524.

11. Digital assets

Material accounting policies

Digital assets are assets such as Bitcoin and MMX coins, which use an opensource software-based online system where transactions are recorded in a public ledger (blockchain) using its own unit of account. Digital assets are an emerging technology and asset class, and as such there are no specific accounting standards that cover the treatment, rather digital assets are assessed by applying existing accounting standards in conjunction with guidance released by the accounting standard setting bodies such as the IASB. Management considers it appropriate to group digital assets in the consolidated financial statements based on the underlying activities and respective recognition criteria under the IFRS.

The fair value of digital assets on hand at the end of the reporting period is calculated as the quantity of digital assets on hand multiplied with the price quoted on external market source as at the reporting date. Management considers this fair value to be a level 1 input under IFRS 13 fair value measurement fair value hierarchy as the price source represents quoted prices on multiple digital asset exchanges.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

The Group consider that any digital asset that does not fall under the inventory or financial asset methodology and meet the recognition criteria (identifiable, controllable and capable of generation future economic benefits) are considered to intangible assets.

Management has exercised judgement in determining the useful life of digital asset, whether it has indefinite or definite life. In order to consider indefinite life, the management considers the market practice of such assets, laws and regulations, industry and the economic environment in which they operate. Accordingly, the management concluded the life of those assets as indefinite.

Digital assets are recognized when the Group disposes of the asset or when the Group otherwise loses control and, therefore, access to the economic benefits associated with ownership of the digital asset. On derecognition any reserve outstanding in the equity relating to fair value of digital assets is transferred to the retained earnings within equity.

retained earnings within equity.
	2023	2022
	USD	USD
		(unaudited)
Digital assets - inventory (a) Digital assets-intangibles (b)	136,710,000	- 1,720,650
	3,290,124
	140,000,124	1,720,650

(a) Accounted for using inventory methodology

The Group has determined that its holding of certain digital asset should be accounted for under IAS 2 Inventories, as it meets the definition of a commodity broker-trader. Under IAS 2, digital assets are measured at fair value less cost to sell, with changes in fair value recognized in consolidated statement profit or loss. In accordance with IAS 2, commodity broker-traders are those who buy or sell commodities for others or on their own account. The inventories held by commodity broker-traders are principally acquired for the purpose of selling in the future and generating a profit from fluctuations in price or broker-traders’ margin. As these inventories are measured at fair value less costs to sell, they are excluded from only the measurement requirements of IAS 2.

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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

2023
	As at 31 December
	2023
	USD
At 1January	-
Additions (note i) Change in fair value*	37,200,000
	99,510,000
At 31 December	136,710,000

*Represents gain on fair valuation of digital assets at FVTPL held at year end.

(i) During the year ended 31 December 2023, the Group was rewarded digital assets worth USD 37,200,000 upon provision of intellectual services (Note 30). Further, the Group has recognised a fair value gain on these digital assets of USD 99,510,000 during the period post-acquisition till 31 December 2023.

(b) Accounted for using intangible asset methodology

The Group carries out mining of digital assets and recognizes revenue in relation to assets through mining activity with corresponding recognition of intangible assets under IAS 38, Intangible Assets. Such intangible assets have an indefinite useful life, initially measured at cost, deemed to be the fair value upon receipt, and subsequently measured under the revaluation model. Under the revaluation model, increases or decreases in the digital asset’s carrying amount is recognized in consolidated statement of comprehensive income and the revaluation reserve in equity, unless it reverses valuation deficit of the same asset previously recognised in consolidated statement of profit or loss. A revaluation deficit is recognised in consolidated statement of profit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the revaluation reserve.

	As at 31 December	As at 31 December
	2023	2022
	USD	USD
		(unaudited)
Digital assets	3,290,124	1,720,650

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

(c) Accounted for using intangible asset methodology

	2023	2022
	USD	USD
		(unaudited)
Gain on Digital assets - inventory Gain/(loss)Digital assets - intangibles	99,510,000	- (1,631,545)
	1,221,489
	100,731,489	(1,631,545)

12. Inventories

Material accounting policies

Inventories are measured at the lower of cost and net realisable value.

Cost includes expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition. The cost of inventories is based on the weighted average cost method.

Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

	2023	2022
	USD	USD
		(unaudited)
Finished goods Consumables items Stock in transit	59,495,074	41,371,847 17,257 -
	126,500
	13,640,123
	73,261,697	41,389,104

During the year ended 31 December 2023, inventory amounting to USD 113,805,605 (2022 (unaudited): USD 555,689,727) was charged to cost of goods sold (Note 29). Included in finished goods are items costing USD 73,180,575 which has been written down to its net realisable values (NRV) amounting to USD 59,495,074 during the year.

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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

13. Trade receivables

Material accounting policies

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for expected credit losses.

Trade receivables are amounts due from customers for services performed in the ordinary course of business. Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.

The Group’s trade receivables are subject to the expected credit loss model. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.

Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.

Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

Receivables for which an impairment provision was recognised were written off against the provision when there is no expectation of recovering additional cash.

2023 2022 USD USD	2023 2022 USD USD	2023 2022 USD USD
		(unaudited)
Trade receivables Less:provision for expected credit losses	33,061,633	2,823,466
	-	(1,366,016)
	33,061,633	1,457,450

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

At 31 December 2023, trade receivables at nominal value of USD Nil (2022 (unaudited): USD 1,366,016) were impaired. Out of the above balance of trade receivables, USD 4,801,515 relates to a related party (note 21(i)(a)).

The movement of the provision for expected credit loss is as follows:

	2023	2022
	USD	USD
		(unaudited)
At 1 January (Reversal)/ charge for theyear(Note 32)	1,366,016	- 1,366,016
	(1,366,016)
At 31 December	-	1,366,016

Management performed the expected credit loss assessment and there is no material impact on the consolidated financial statements as of 31 December 2023.

14. Advances, deposits and other receivables

	2023	2022
	USD	USD
		(unaudited)
Advance to suppliers (i) Deposits Accrued income VAT receivable Prepaid expenses Other receivables	132,110,576	19,149,724 7,746,909 1,426,236 105,468 182,594 641,905 478,672 475,249
	31,664,170
	273,151
	183,191
	171,587
	108,545
Staff loans and advances	8,151
Consultant advances	-
	164,519,371	30,206,757

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113

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

(i) This includes balance of USD 46,316,976 given to a related party (Note 21).

During the year, the Group has written off receivables amounting to USD 2,984,934 (2022 (unaudited): USD 752,918). Further, the expected credit loss on the outstanding deposits and other receivables is estimated to be immaterial for the Group for the year ended 31 December 2023.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

16. Share capital, share premium and other reserves

Material accounting policies

i) Share capital and share premium

Ordinary shares are classified as equity.

15. Cash and short-term deposits

Material accounting policies

Cash and short-term deposits in the consolidated statement of financial position comprise of cash at banks and on hand and short-term highly liquid deposits with a maturity of three months or less, that are held for the purpose of meeting shortterm cash commitments and are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value.

For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, as they are considered an integral part of the Group’s cash management.

Cash and short-term deposits in the consolidated statements of financial position and cash flows consist of the following:

	2023	2022
	USD	USD
		(unaudited)
Cash at bank and on hand Short-term deposits - less than three months original maturity	23,164,555	442,871 -
	175,000,000
	198,164,555	442,871

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

The expected credit loss on bank balances is estimated to be immaterial as the Group only deals with reputable banks with good ratings.

The transaction costs associated with issuance of new shares and stock exchange listing are accounted for as follows:

Incremental costs that are directly attributable to issuing new shares is deducted from equity; and

Costs that relate to the stock market listing or are otherwise not incremental and directly attributable to issuing new shares, are recorded as an expense in the consolidated statement of profit or loss. Costs that relate to both share issuance and listing are allocated between those functions on a rational and consistent basis. In the absence of a more specific basis for apportionment, an allocation of common costs based on the proportion of new shares issued to the total number of (new and existing) shares listed is applied.

	Authorised issued and fully paid	Authorised issued and fully paid
	2023	2022
	USD	USD
	(unaudited)
6,048,823,529 shares of USD 0.027 each (2022 (unaudited): 10,000 shares of USD 1 each)	164,705,882 10,000

Movement in the share capital and share premium as is follows:

	Issued share capital No. of shares	Share Capital USD	Share Premium USD
At 1 January 2023 (USD 1 per share) (unaudited) Issuance of new shares (USD 1 per share)	10,000 40,000	10,000 40,000	- -
Capitalization of retained earnings Share split (approx. USD 0.027 (AED 1) per share)	50,000 - 5,141,450,000	50,000 139,950,000 -	- - -
Issuance of new shares (with nominal value of approx. USD 0.027 per share and subscription value of USD 1.5 per share)	5,141,500,000 907,323,529	140,000,000 24,705,882	- 345,882,353
At 31 December 2023	6,048,823,529	164,705,882	345,882,353

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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

On 12 September 2023, Mr. Munaf Ali (21.50%), Mr. Seyedmohammad Alizadehfard (18.20%) and Mr. Najib Abou Hamze (16.50%) transferred aforementioned percentage of their shares to M/s. Agora SPV Ltd, resulting in M/s. Agora SPV Ltd becoming a shareholder with a 56.20% ownership stake in the Company.

On 24 November 2023, the Company has further issued 907,323,529 shares to the public bringing the total number of shares to 6,048,823,529 with nominal value of USD 0.027 per share.

On 5 December 2023, the Company has issued fresh 907,323,529 shares to public carrying face value of AED 0.1 (USD 0.027) issued at AED 1.5 (USD 0.41) total amounting to AED 1,360,985,293 (USD 370,588,235) out of which AED 1,270,252,941 (USD: 345,882,353) becomes part of the share premium.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

(ii) Other reserves

	Revaluation reserve (Note a) USD	Foreign currency translation reserve (Note b) USD	Fair value through OCI (Note c) USD	Total USD
At 1 January 2022 (unaudited) Movement for the year At 31 December 2022 (unaudited) Movement for theyear	- 11,380,058 11,380,058 -	(45,259) 19,865 (25,394) (87,198)	- - - 13,243,724	(45,259) 11,399,923 11,354,664 13,156,526
At 31 December 2023	11,380,058	(112,592)	13,243,724	24,511,190

(a) Revaluation reserve

This reserve relates to the revaluation gain recognised on the fair valuation of building. Any incremental depreciation charge on the revalued amount compared to the cost is charged to this reserve with corresponding adjustment in the retained earnings.

(b) Foreign currency translation reserve

This reserve relates to the translation of foreign operations of the Group.

(c) Fair value through other comprehensive income reserve

This reserve relates to the Group’s share of other comprehensive income from associate and fair value gain on the digital assets held as intangible assets.

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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

17. Shareholders’ current account

	2023	2022
	USD	USD
		(unaudited)
Shareholders’ current account	-	9,019,377
	-	9,019,377

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

19. Statutory reserve

According to the Federal Law No. 32 of 2021, 5% of annual net profits of certain subsidiaries is allocated to the statutory reserve. The transfer to statutory reserve may be suspended when the reserve reaches 50% of the paid-up capital. The reserve is not available for distribution.

20. Business combination under common control

Material accounting policies

The amount is repayable at the discretion of the Group therefore, the shareholders’ current account is classified within equity.

18. Contribution from shareholders

18. Contribution from shareholders	rs
2023 USD	2023	2022
	USD	USD
		(unaudited)
At 1 January 4,015,995 Funds received during the year 57,251,261 Dividend in kind* 13,000,000 Repayment (49,272,348)		4,015,995 - - -
At 31 December 24,994,908		4,015,995

*These funds are provided as a contribution from the shareholders and are interest free and unsecured, with no contractual repayment obligations and therefore classified within equity in the consolidated statement of financial position. Subsequent to the year end 2023, the Group has repaid the outstanding amount in full.

**During the year shareholders declared dividend of USD 13,000,000 which was transferred and settled through contribution from shareholders.

Acquisition of controlling interest in entities that are under common control of the shareholders which lack commercial substance and are based on a decision by the shareholders are accounted for in accordance with the pooling of interest method of accounting using predecessor values method. The consolidated financial statements of the combined entities are presented as if the business had been combined from the date when the combining entities were first brought under common control without restating and presenting the prior period. The assets and liabilities are accounted for at carrying amounts previously recorded in the books of the transferor. The components of equity of the acquired entities are added to the same components within the Group’s equity. Any transaction cost paid for acquisition is recognised directly in equity.

Transfer of Entities to Phoenix Group PLC (formerly known as Phoenix Group Ltd)

Effective 30 September 2023, the Shareholders of the Company, who were also the beneficial owners of the Entities as mentioned in page below, transferred their beneficial interest in such Entities to the Company, as part of the Group restructuring activities in exchange for a Nil consideration.

Acquisition of interest in entities that are under common control of the ultimate shareholders are accounted for in accordance with the pooling of interest method of accounting using predecessor values method. The consolidated financial statements of the Group are presented as if the business had been combined from the date when the transferred entities were first brought under common control without restating and presenting the prior years. The assets and liabilities are accounted for at carrying amounts previously recorded in the respective books of the entities.

In an event when no purchase consideration is paid, the components of equity of the transferred entities are added to the same components within the Group’s equity. Whereas, when a consideration is paid, any difference between the total net assets carrying value and purchase consideration is recognised as a separate equity reserve.

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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

==> picture [526 x 34] intentionally omitted <==

----- Start of picture text -----

Country of Beneficial
Entities Principal activity
incorporation ownership
----- End of picture text -----

Phoenix World Electronics TradingLLC	Computer and peripheral equipment trading and wireless telecommunication equipment trading	UAE	100%
PTC Cloud Tech FZCO	Provider of cloud service and data centres provider and robots and smart machines rental	UAE	100%
Mega Phoenix Electronics TradingLLC	Computer and peripheral equipment trading	UAE	100%
	Engage in any lawful act or activity for which
Phoenix World Electronics LLC	corporations are authorised by the Delaware General	USA	100%
	Corporation Law
Advanced Power Solutions Inc.	Engage in those activities which are not prohibited by Alberta’s business Corporation Act	Canada	100%
	Engage in any lawful act or activity for which
Absolute Power Solutions Inc.	corporations are authorised by the Delaware General	USA	100%
	Corporation Law
	Engage in any lawful act or activity for which
Block Zero HS. Inc.	corporations are authorised by the Delaware General	USA	100%
	Corporation Law
Block One Technology Inc.	Engage in those activities which are not prohibited by Alberta’s Business Corporation Act	Canada	100%
Phoenix Operations and Maintenance LLC	Engage in any lawful act or activity for which corporations are authorised by the Delaware General Corporation	USA	100%
	Wholesale of computers and outfit trading,
Phoenix Computer Equipment Trading Ltd	wholesale of computer systems and software trading, wholesale of computer outfit and data processing trading, wholesale of telecommunication equipment	UAE	100%
	tradingand wholesale of spareparts
	Providing data centre services such as operations and
Phoenix Data Centre Limited	maintenance, developer and space management and	UAE	100%
	leasing
Phoenix Ventures Limited	To provide internet and multimedia consultancy and software service solution	UAE	100%
Phoenix Electronics Logistics Limited	Insurance policy holder	Hong Kong	100%

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

The transfer had been accounted for using the pooling of interest method in accordance with business combination under common control. Consequently, all assets and liabilities of such Entities were transferred to the Group at their carrying amounts as the effective date of 30 September 2023. These were presented as if the business had been combined from 1 January 2022 the date when the transferred entities were first brought under common control. The components of equity of the transferred Entities were added to the same components within the Group’s equity.

The carrying values of the assets and liabilities of the Entities mentioned above on the effective date of transfer are not materially different to those presented below:

30 September 2023 USD	30 September 2023 USD
	(unaudited)
Property and equipment Capital work-in-progress Right of use asset Intangible assets Investments in associates Investments FVPTL Inventories Trade and other receivables Cashand short-termdeposits	22,875,768
	71,299,089
	739,102
	1,262,423
	28,946,995
	43,215,577
	81,050,792
	67,871,012
	1,511,173
Total assets	318,771,931
Lease liabilities Employees’ end of service benefits Borrowings from banks and financial institution Trade and other payables Total liabilities
	619,945
	256,016
	3,761,665
	110,788,157
	115,425,783
Total identifiable net assets at carrying value	203,346,148
Share capital Statutory reserves Foreign currency translation reserve Retained earnings and other reserves Shareholdercontribution
	140,139,044
	13,615
	(109,532)
	9,971,759
	53,331,262
Total equity	203,346,148

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PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

21. Related party transactions and balances

The Group, in the ordinary course of business, enters into transactions, at agreed terms and conditions, with other business enterprises or individuals that fall within the definition of related party contained in IAS 24 Related Party. Related parties represent the shareholders, directors and key management personnel of the Group and entities controlled, jointly controlled or significantly influences by such parties. Pricing policies and terms of their transactions are approved by the Group’s management.

i. Related party balances

Balances with related parties included in the consolidated statement of financial position are as follows:

(a) Due from related parties included in the trade receivables

		2023	2022
	Relationship	USD	USD
			(unaudited)
Seyedmohammed Alizadehfard, UAE Munaf Ali.,UAE	Director	4,017,864	- -
	Director	783,651
Total		4,801,515	-

(b) Due from related parties

		2023	2022
	Relationship	USD	USD
		-	(unaudited)
AlphaBit, LLC, USA Phoenix Technology Investments Holding AG, Switzerland Cypher Labs Information Technology Consultants L.L.C, UAE Phoenix Technology Bilgisayar Elektronik Limited, Turkey Other related parties M2 Holdings Limited,UAE	Common directorship	-	738,808 77,305 1,128,268 580,605 448,344 5,346,118
	Common directorship	-
	Common directorship	-
	Common directorship	-
	Common directorship	-
	Associate	2,550
		2,550	8,319,448

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

(c) Due to related parties

		2023	2022
	Relationship	USD	USD
			(unaudited)
WAS Four Investment - Sole Proprietorship L.L.C, UAE Citadel Technologies Group LLC, UAE Logica Ventures Corp, Canada Phoenix Trading FZCO, UAE	Affiliates of major		44,595,041 6,127 16,748 2,611,235
	shareholder	54,698,329
	Associate	12,254
	Common directorship	-
	Common directorship	-
Total		54,710,583	47,229,151

(d) Advances to a related party

		2023	2022
	Relationship	USD	USD
			(unaudited)
Cypher Capital TechnologyLLC,UAE	Common directorship	46,316,976	-

This amount is included in advance to suppliers (Note 14).

(e) Advances from associates

		2023	2022
	Relationship	USD	USD
			(unaudited)
M2 Global wealth Limited,UAE	Affiliate of associate	18,279,651	-

This amount is included in advance from customers (Note 25).

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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

ii. Related party transactions

Transactions included in the consolidated statement of profit or loss with its related parties are as follows:

Revenue

Revenue
		2023	2022
	Relationship	USD	USD
			(unaudited)
Agora SPV Ltd Citadel Technologies Group LLC Cypher Capital Technology LLC M2 Global wealth Limited Munaf Ali., UAE Seyedmohammed Alizadehfard Others	Major shareholder	69,952,370	- 514,679,280 16,056,273 - 12,684,514 2,813,020 475,845
	Associate	2,996,010
	Common directorship	26,290,973
	Associate	19,964,646
	Director	6,133,689
	Director	10,091,961
	Common directorship	-

Purchases

	Relationship	2023 USD	2022 USD
			(unaudited)
Seyedmohammed Alizadehfard	Director	4,500,000	432,600
Munaf Ali	Director	-	2,303,256
Cypher Capital Technology LLC	Common directorship	-	4,370,228
Phoenix Trading FZCO	Common directorship	-	2,711,388

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Other transactions

2023 2022 USD USD (unaudited)	2023	2022
	USD	USD
Investment in Lyvely FZE 3,000,000 - Investment in Citadel Technologies Group LLC 104,966,600 - Investment in M2 Holdings Ltd 1,277,458 30,000 Acquisition of digital asset - MMX (i) 37,200,000 -

(i) During the year ended 31 December 2023, the Group was rewarded digital assets worth USD 37,200,000 on provision of intellectual services.

iii. Compensation of key management personnel

The remuneration of directors during the year are as follows:

	2023	2022
	USD	USD
		(unaudited)
Salaries and other benefits End of service benefits	1,778,612	766,433 153,589
	422,074
	2,200,686	920,022
Number of key management personnel	2	2

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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

22. Employees’ end of service benefits

Material accounting policies

Provision is made for the full amount of end of service indemnity due to nonU.A.E. national employees in accordance with the applicable Labour Law and is based on current remuneration and their period of service at the end of the reporting year. The Group maintains a non-contributory defined benefit retirement plan for the benefit of its regular employees. The normal retirement age is 60. Normal retirement benefit is in accordance with the UAE Labour law.

The amounts recognised in the consolidated statement of financial position and the movements in the employee’s end of service benefit over the year ended 31 December is as follows:

December is as follows:
	2023	2022
	USD	USD
		(unaudited)
At 1 January Charge for the year Paid duringtheyear	170,483	33,788 153,589 {16,894)
	697,947
	(9,465)
At 31 December	858,965	170,483

23. Interest-bearing loans

The amounts recognised in the consolidated statements of financial position is as follows:

as follows:
	2023	2022
	USD	USD
		(unaudited)
Non-current Current	3,556,500	3,721,282 207,135
	165,487
	3,721,987	3,928,417

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

The movement in interest-bearing loans is as follows:

			2023	2022
			USD	USD
				(unaudited)
At 1 January Payments made			3,928,417	4,100,059 {l 71,642}
			(206,430}
As at 31 December			3,721,987	3,928,417

			2023	2022
	Interest rate	Maturity	USD	USD
				(unaudited)
FAB loan	EIBOR+3%	06-0ct-2036	3,721,987	3,928,417

Key terms of the loan:

First degree registered mortgage over property i.e., Unit 2901, plot 165, municipality 345-894, building 2, BD BLVD Plaza T2, Burj Khalifa, Dubai, UAE held in favour of bank with no restrictions.
Property valuation report against the above mortgage property from an evaluator acceptable to Bank. Property to remain insured till full and final settlement of the facility.
Assignment of property all risk insurance policy of the above mortgaged property in favor of Bank, as first loss payee supported by premium payment receipt, from insurance company acceptable to Bank. Property to remain insured till full and final settlement of the facility.
Assignment of key man insurance from Mr. Munaf Ali in favor of Bank, as first loss payee supported by premium payment receipt, from insurance company acceptable to Bank.
Undated cheque on drawn on Borrower’s account maintained with the Bank to the extent of overall facility amount in favor of the Bank.

Other conditions

Loan to value (LTV) to maintain at maximum 70% throughout the tenor of the facility. The borrower has to provide additional collateral acceptable to Bank in case if any reduction in the property value or exposure to be reduced to keep the LTV at 70%. The Group is not in breach of the key terms and covenants of the facility for the year ended and as at 31 December 2023.

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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

24. Trade payables

Material accounting policies

Liabilities are recognised for amounts to be paid in the future for goods or services received, whether billed by the supplier or not.

	2023	2022
	USD	USD
		(unaudited)
Tradepayables	575,497	311,553

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

26. Commitments

At 31 December 2023, the Group and its associates had no capital commitments and outstanding letters of guarantees (2022 (unaudited): USD Nil).

27. Contingencies

At 31 December 2023, the Group and its associates had no contingent liabilities (2022 (unaudited): USD Nil).

28. Revenue from contracts with customers

Material accounting policies

Revenue from contracts with customers

Trade payables are non-interest bearing and are normally settled between 30-90 days term.

The Group recognises revenue from contracts with customers based on a fivestep model as set out in IFRS 15:

25. Other liabilities

25. Other liabilities
	2023	2022
	USD	USD
		(unaudited)
Advances received from customers (i) Deferred income (ii) Provision for expenses Deposit received Provision for leave salary Otherpayables	29,550,448	58,962,851 - 4,982,218 6,606,829 123,822 685,775
	20,441,040
	20,257,625
	5,268,150
	850,964
	20,004
	76,388,231	71,361,495

(i) This includes amount of USD 18,279,651 which is from a related party (Note 21).

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----- Start of picture text -----

Identify contract(s) with Identify performance
a customer: A contract is obligations in the contract:
defined as an agreement A performance obligation is
between two or more parties a promise in a contract with a
that creates enforceable rights customer to transfer a good or
and obligations and sets out service to the customer.
the criteria for every contract
that must be met.
Step 1 Step 2
----- End of picture text -----

Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Group allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Group expects to be entitled in exchange for satisfying each performance obligation. Step 4

Determine the transaction price: The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. Step 3

Recognise revenue when (or as) the Group satisfies a performance obligation.

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----- Start of picture text -----

Step 5
----- End of picture text -----

(ii) Deferred income pertains to credit received from supplier for future purchases.

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PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

The Group satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Performance obligations:

Information about the Group’s performance obligations are summarised below:

a) The Group’s performance does not create an asset with an alternate use to the Group and the Group has as an enforceable right to payment for performance completed to date.
b) The Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced.
c) The customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs.

For performance obligations where one of the above conditions are not met, revenue is recognised at the point in time at which the performance obligation is satisfied.

When the Group satisfies a performance obligation by delivering the promised goods or services it creates a contract based asset on the amount of consideration earned by the performance. Where the amount of consideration received from a customer exceeds the amount of revenue recognised this gives rise to a contract liability.

Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes and duty.

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably.

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

The transaction price is the amount of consideration which the Group expects to be entitled in exchange for transferring promised goods or services to the customer. The consideration expected by the Group may include fixed or variable amounts. Revenue is recognized when it transfers control over goods and services to the customer and only when it is highly probable that a significant reversal of revenue will not occur when uncertainties related to a variable consideration are resolved.

(i) Mined income

The management recognizes income from the provision of transaction verification services within the Bitcoin network, commonly referred to as “cryptocurrency mining”. The Group participates in mining pools operated by third parties in order to limit its exposure to variability of mining output. The Group receives bitcoins from the mining pool operator as consideration for its participation in the pool.

Income earned from mining is measured based on the fair value of the bitcoin reward received. The transaction price is the fair value of crypto mined, being the fair value per the prevailing market rate for that crypto currency on the transaction date, and this is allocated to the number of crypto mined. The fair value is derived based on the end of day average price of bitcoin, on the date of receipt, which is not materially different from the fair value at the time the Group earned the award. The revenue is recognised with corresponding asset under intangible asset based on the delivery of digital asset into the Group’s wallet once an algorithm has been solved. The criteria for performance obligation is assessed to have occurred once the digital asset has been received in the Group’s wallet once an algorithm has been solved. Mining earnings are made up of the baseline block reward and transaction fees upto a certain% of total block reward, however, these are bundled together in the daily deposits from mining and therefore are not capable of being analysed separately.

(ii) Hosting Revenue

The Group recognised management fees on the services provided to third parties for management of mining machines on their behalf, ensuring the machines are optimised and mining as efficiently as possible.

Management fee is recognized from the hosting contract between the Group and its customers under IFRS 15. The performance obligations include providing hosting facilities with defined electricity rates, ensuring uptime within contractual limits, and other services such as repair and maintenance as defined in the contract. The transaction price is based on the electricity rates agreed with the customer. Revenue should be recognized in overtime monthly intervals, as the performance obligations in the hosting contracts are satisfied during the period in which services are provided.

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131

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

(iii) Revenue from sale of ASICs, wallets, and equipment

Revenue from the sale of goods and services in normal course of business is recognised either at a point in time or over time.

The Group recognises revenue over time if one of the following criteria is met:

The customer simultaneously receives and consumes all of the benefits provided by the entity as the Group performs;
The Group’s performance creates or enhances an asset that the customer controls as the asset is created or;
The Group’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.

If an entity does not satisfy its performance obligation over time, it satisfies it at point of time.

Revenue from the sale of goods and services is therefore recognised at a point in time or over time when the performance obligation is satisfied and is based on the amount of the transaction price that is allocated to the performance obligation. The transaction price is the amount of consideration which the Group expects to be entitled in exchange for transferring promised goods and services to the customers.

The consideration expected by the Group may include fixed or variable amounts. Revenue is recognised when it transfers control over goods and services to the customer and only when it is highly probable that a significant reversal of the revenue will not occur when uncertainties related to a variable consideration are resolved.

Transfer of control varies depending on the individual terms of the contract of sale. Revenue from transactions that have distinct goods and services are accounted for separately based on their stand-alone selling prices. A variable consideration is recognised to the extent it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The Group mainly deals in trading of ASICs, wallets, and equipment. The performance obligations are satisfied at a point in time upon delivery of goods to the customers.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

Below is the disaggregation of the Group’s revenue from contracts with customers:

(a) Type of revenue

	2023	2022
	USD	USD
		(unaudited)
Revenue from contracts with customers:
Trading revenue • Sales of ASICs, wallets, and equipment • Hosting revenue • Mining revenue Service income		715,083,556 34,381,133 5,473,856 23,797
	180,989,786
	75,281,765
	31,801,711
	113,669
	288,186,931	754,962,342

(b) Geographical markets

	2023	2022
	USD	USD
		(unaudited)
Outside UAE Within UAE	287,094,655	751,043,303 3,919,039
	1,092,276
	288,186,931	754,962,342
(c) Timing of revenue recognition
	2023	2022
	USD	USD
		(unaudited)
At a point in time Over time	180,989,786	715,083,556 39,878,786
	107,197,145
	288,186,931	754,962,342

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PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

29. Direct costs

29. Direct costs
	2023	2022
	USD	USD
		(unaudited)
Inventory - as at 1 January Add: purchases and other direct costs Less: Inventory- as at 31 December	41,389,136	36,198,138 560,880,693 (41,389,104)
	145,678,166
	(73,261,697)
Cost of inventory consumed Hosting electricity costs Mining expenses* Warehouse expenses	113,805,605	555,689,727 24,929,326 3,170,713 488,442
	69,408,326
	15,925,338
	185,788
	199,325,057	584,278,208

*Represents electricity expenses incurred in operation of mining machines.

30. Other income

Material accounting policies

The Group recognises income from coupon sale, finance income, income earned on provision and intellectual service and miscellaneous income as income when respective performance obligations are satisfied.

Finance income comprises interest income on funds invested with banks. Finance income is recognised as it accrues in consolidated statement of comprehensive income using the effective interest method.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

	2023	2022
	USD	USD
		(unaudited)
Coupon sale Miscellaneous income_(note i)_ Compensation received	1,392,000	2,397,412 77,823 -
	37,718,627
	368,111
	39,478,738	2,475,235

(i) During the year, intellectual services were provided to M2 Holdings Limited (M2) for constructing interface. Performance obligation was satisfied when the interface was transferred to M2. This was one off service provided by the Group and is therefore classified as other income. M2 issued 93,000,000 MMX coins to the Group as consideration for rendering such services and the market rate for such MMX coins on the date of issuance was USD 0.4 per coin resulting in the other income of USD 37,200,000.

31. Selling and distribution expenses

	2023	2022
	USD	USD
		(unaudited)
Business promotion Commission Advertisements	879,018	163,922 480,825 98,343
	101,124
	2,316,276
	3,296,418	743,090

Coupon sale is recognised when coupon is sold to customers. The Group receives credits and or coupons for the purchase and use of S19 mining machines from Bitman Development PTE. These credits are provided to the Group after it purchases cutting edge Bitcoin mining machines. The credits are transferable. The Group elects to sells the credits at the market rate to willing buyers upon receipt of the credits. Other income is recognised at the date the sale is completed.

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135

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

32. General and administrative expenses

32. General and administrative ex	penses
	2023	2022
	USD	USD
		(unaudited)
Allowance for net realizable value Staff costs (Note 33) Site expenses Legal and professional fees* Management fee (Note 21) Compensation Depreciation (Note 6) Office expenses Auditor’s remuneration Travelling and entertainment Rent Insurance Utility and communication expenses Amortization ofright-of-use assets (Note 7) Bank charges Repair and maintenance Printing and stationery Amortization of intangible assets (Note 8) Other expenses (Reversal)/ provision for doubtful debts (Note 13) Loss on disposals of property and equipment Investment written off	13,685,501	12,069,307 2,876,704 269,103 1,248,041 920,022 3,829,929 1,437,791 763,277 117,960 431,466 158,227 170,900 101,786 - 29,610 10,599 8,439 - 1,223,800 1,366,016 1,103,977 553,147
	7,499,339
	5,743,830
	3,856,642
	2,200,686
	879,478
	717,471
	525,195
	437,840
	294,790
	266,477
	196,269
	83,733
	73,273
	56,626
	52,303
	36,726
	4,521
	44,360
	(1,366,016)
	-
	-
	35,289,044	28,690,101

Includes expenses incurred relating to initial public offering amounting to USD 819,064.

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

33. Staff costs

33. Staff costs
	2023	2022
	USD	USD
		(unaudited)
Basic salary End of service benefits Other benefits	6,549,817	2,439,121 16,893 420,690
	275,875
	673,647
	7,499,339	2,876,704
Number of employees	188	57

34. Earnings per share

The basic and diluted earnings per share is calculated by dividing the profit attributable to equity shareholders by the weighted average number of shares in issue.

	2023	2022
	USD	USD
		(unaudited)
Profit for the year Weighted average number of ordinaryshares in issue	207,779,472	138,877,130 5,140,031,000
	5,234,882,471
Basic and diluted earnings per share	0.04	0.03
35. Finance costs
	2023	2022
	USD	USD
		(unaudited)
Interest on interest-bearing loans Interest expense Interest on leases(Note 7)	301,048	181,617 921,301 -
	20,422
	11,675
	333,145	1,102,918

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PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

36. Segment reporting

Material accounting policies

For management purposes, the activities of the Group are organised into one reportable operating segment. The Group operates in the said reportable operating segment based on the nature of the products/services, risks and returns, organizational and management structure, and internal financial reporting systems. Accordingly, the figures reported in these consolidated financial statements are related to the Group’s only reportable segment.

All sales of the Group comprise of sale of crypto mining machines, host mining services and mining.

All non-current assets of the Group at the end of the current and preceding year were located in United Arab Emirates, Canada, USA and Oman.

Two (2022(unaudited): two) of the Group’s customers contributed USD 96.24 million (2022(unaudited): USD 549.58 million) and each customer individually exceeded 10% of the revenue.

37. Financial instruments by category

	2023	2022
	USD	USD
		(unaudited)
Financial assets:
Trade receivables (Note 13) Due from a related party (Note 21) Deposits and other receivable* (Note 14) Cash and short-term deposits (Note 15)	33,061,633	1,457,450 8,319,448 9,920,518 442,871
	2550
	, 32,229,057
	198,164,555
	263,457,795	20,140,287

Financial liabilities:
Trade payables (Note 24) Due to related parties (Note 21) Other liabilities** (Note 25) Lease liability (Note 7) Interest-bearingloans(Note 23)	575,497	311,553 47,229,151 12,398,644 - 3,928,417
	54,710,583
	26,396,743
	629,285
	3,721,987
	86,034,095	63,867,765

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

*For the purpose of the financial instruments disclosure, non-financial assets amounting to USD 132.32 million (2022 (unaudited): USD 20.2 million) have been excluded from advances, deposits and other receivables.

**For the purpose of the financial instrument disclosure, amounting to USD 49.99 million (2022:(unaudited): USD 58.96 million) have been excluded from other liabilities related to advance received from customers and deferred income.

38. Reconciliation of assets and liabilities arising from financing activities

	Liabilities from financing activities	Liabilities from financing activities	Liabilities from financing activities	Liabilities from financing activities	Liabilities from financing activities
	Interest- bearing loans- due within one year USD	Interest- bearing loans - due after one year USD	Lease liabilities - due within one year USD	Lease liabilities - due after one year USD	Total USD
At 1January2022(unaudited)	215,935	3,884,124	-	-	4,100,059
Non-cash adjustment Cash flows	162,842 (171,642)	(162,842) -	- -	- -	- (171,642)
At 31 December 2022(unaudited)	207,135	3,721,282	-	-	3,928,417
Non-cash adjustment Additions Cash flows Foreign exchange adjustment	164,782 - (206,430) -	(164,782) - - -	- 493,138 (136,147) -	- 272,294 - -	- 765,432 (342,577) -
At 31 December 2023	165,487	3,556,500	356,991	272,294	4,351,272

39. Non-adjusting event after the reporting date

In March 2024, Phoenix Group PLC, via one of its subsidiary received dividend from Citadel Technologies Group LLC in the form of 1,285.3 BTC and settled it’s liability towards WAS Four Investments. The adjustment for this dividend and liability settlement, will be incorporated in the subsequent consolidated financial statements of the Group.

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PHOENIX GROUP PLC CONTACT US

Abu Dhabi, United Arab Emirates

Contact

+971 4 323 9120

Adress

3412, 34 Floor, Al Maqam Tower, Regus Adgm Square, Al Maryah Island, Abu Dhabi, UAE

PO Box Number

35665

Dubai, United Arab Emirates

Contact

+971 4 323 9120

Adress

3412, 34 Floor, Al Maqam Tower, Regus Adgm Square, Al Maryah Island, Abu Dhabi, UAE

Investor Relations

[email protected]

Media Enquiries

[email protected]

AI assistant

PHOENIX GROUP PLC — Annual Report 2023

66581_rns_2024-06-14_47b693b1-3467-45cc-9a04-61c94d172a5e.pdf

ANNUAL R E P O R T 20 23

H.E. Tareq Abdulraheem Al Hosani

Thank you

MESSAGE

GROUP CEO AND GROUP MD

Munaf Ali

Seyed Mohammad Alizadehfard (Bijan)

PHOENIX GROUP PLC

DIRECTORS’ REPORT

PHOENIX GROUP PLC

Transactions with related parties

Principal activities

Role of the Directors

Going concern

Results for the year

Statement of Directors’ responsibilities

PHOENIX GROUP PLC

DIRECTORS’ REPORT

MANAGEMENT SUMMARY

Directors

Directors’ statement to the disclosure to auditors

Independent auditors

On behalf of the Board of Directors

PHOENIX GROUP PLC

AT A GLANCE

TRADING

INVESTMENTS

MINING

HOSTING

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) FINANCIAL REVIEW

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) OPERATIONAL METRICS

OVERALL BUSINESS

527 MW

2.9 EHs

PHOENIX GROUP PLC

OUR STORY

With a legacy of excellence and a vision for the future, Phoenix Group is poised to redefine the boundaries of possibility in the digital age.

PHOENIX GROUP PLC

GLOBAL ECONOMIC OUTLOOK

Economic Performance of the Industry in 2023

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) GLOBAL ECONOMIC OUTLOOK

Growth Outlook for the Crypto Industry in 2024 and Beyond

PHOENIX GROUP PLC

PHOENIX GROUP PLC

(FORMERLY KNOWN AS PHOENIX GROUP LTD)

KEY DEVELOPMENTS OF THE YEAR

PHOENIX GROUP PLC

CORPORATE STRATEGY

Global Expansion

Sustainability

Technological Innovations

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) CORPORATE STRATEGY

Value Creation

Investments

PHOENIX GROUP PLC

CORE VALUES

INTEGRITY

SUSTAINABILITY

INNOVATION

COLLABORATION

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) CORE VALUES

ADAPTABILTY

EDUCATION

VALUE CREATION

SECURITY

PHOENIX GROUP PLC

PHOENIX GROUP PLC (FORMERLY KNOWN AS PHOENIX GROUP LTD) SUSTAINABILITY INITIATIVES

At Phoenix Crypto, we’re building a sustainable future for cryptocurrency. Here’s how:

PHOENIX GROUP PLC

MILESTONES & ACHEIVEMENTS

PHOENIX GROUP PLC

BUSINESS MODEL

PHOENIX GROUP PLC

COMPETITIVE ADVANTAGE

UNITED ARAB EMIRATES (UAE) PROVIDING LANDSCAPE FOR VIRTUAL ASSETS

DEMONSTRATED CONSISTENT GROWTH AND IS SUPPORTED BY ROBUST UNDERLYING FUNDAMENTALS AND REGULATORY FRAMEWORK

PHOENIX GROUP PLC

PHOENIX GROUP PLC Annual Report 2023