MAROC_TELECOM_REGISTRATION_DOCUMENT_2017

FINANCIAL REPORT

Consolidated financial statements at 31 December 2015, 2016 and 2017

NOTE 1 — ACCOUNTING PRINCIPLES AND VALUATION METHODS

opted not to adjust the figures published for the previous year as the IFRS 9 adoption allows. This change has had a non-significant impact on the Group’s consolidated statements.

Group companies are consolidated on the basis of their fiscal year ending Decemberb31st, except for CMC, whose fiscal year ends 31bMarchb2017. The financial statements and notes thereto were approved by the Management Board on 29bJanuaryb2018.

1.3 PRESENTATION AND PRINCIPLES GOVERNING THE PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENT Pursuant to IFRS principles, the consolidated financial statements have been prepared on an historical-cost basis, with the exception of certain asset and liability categories. The categories concerned are mentioned in the notes below. The consolidated financial statements are presented in Dirham and all values are rounded to the nearest million unless otherwise noted. They include the accounts of Maroc Telecom and its subsidiaries after elimination of intra-group transactions. 1.3.1 Statement of comprehensive income Maroc Telecomhas chosen to present its statement of comprehensive income in a format that breaks down income and expenses by type. 1.3.1.1 EARNINGS FROM OPERATIONS AND EARNINGS FROM CONTINUING OPERATIONS Earnings from operations, which in documents previously issued by Maroc Telecom was called operating income, includes revenues, cost of purchases, payroll costs, taxes and duties, other operating income and expenses, as well as net depreciation, amortization and provisions. Earnings from continuing operations includes earnings from operations, other income fromcontinuing operations, other expenses on continuing operations (including impairment of goodwill and other intangible assets), as well as the share of net earnings of equity associates. 1.3.1.2 FINANCING COSTS AND OTHER FINANCIAL INCOME AND EXPENSES Net financing costs comprise: – gross financing costs which includes interest payable on loans calculated using the effective-interest rate method; – financial income received from cash investments. Other financial income and expenses mainly include gains and losses on currency translation (other than those relating to operating activities recognized under earnings from operations), dividends received from non-consolidated companies, earnings from consolidated activities or companies not recognized under earnings fromdiscontinued activities or in the process of being discontinued. 1.3.2 Statement of financial position Assets and liabilities with maturities shorter than the operating cycle, i.e. generally less than 12 months, are recognized under current assets or liabilities. If their maturities are longer than this, they are recognized under noncurrent assets or liabilities, except for operating expenses.

1.1 BASIS OF PREPARATION FOR THE CONSOLIDATED FINANCIAL STATEMENTS FOR 2017, 2016, AND 2015

Pursuant to regulation (EC) no.b 1606/2002 of 19b Julyb 2002, concerning the adoption of international accounting standards, the consolidated financial statements of Maroc Telecom Group for the year ended 31bDecemberb2017, were prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), applicable as endorsed by the European Union (EU). For purposes of comparison, the 2017 financial statements also include financial information on 2016 and 2015. 1.2 COMPLIANCE WITH ACCOUNTING STANDARDS The consolidated financial statements of Itissalat Al-Marghrib SAhave been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations endorsed by the European Union and mandatory at 31bDecemberb2017. The accounting standards applied to the consolidated financial statements do not differ from those issued by the International Accounting Standards Board (IASB). 1.2.1 Standards and interpretations applied by Maroc Telecom for fiscal year 2017 All the new standards, interpretations and amendments published by the IASB andmandatory in the European Union since 1bJanuaryb2017 have been applied. 1.2.2 Impact of application of the standards and interpretations adopted in 2017 The annual improvements of the cycle 2011-2013 has an impact on the IFRS1, IFRS3, IFRS13 and IAS40 without material impact onMaroc Telecom’s annual financial statements. Following the publication by the IASB on 07/24/2014 of the final version of the new IFRS 9 and the adoption of the new standard by the European Union via European Regulation 2016/2067 of 11/22/2016 published in the official journal of the European Union on 29bNovemberb2016, IFRS 9 “Financial instruments” comes into effect on 1bJanuaryb2018. An early application of this new standard is authorized from 1bJanuaryb2017. Maroc Telecom Group has early adopted IFRS 9 “Financial Instruments” (Julyb 2014 revised version) and corresponding amendments to other IFRS since 1bJanuaryb2017. The Group has

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MAROC TELECOM ____ 2017 Registration Document