MAROC_TELECOM_REGISTRATION_DOCUMENT_2017

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FINANCIAL REPORT Consolidated financial statements at 31 December 2015, 2016 and 2017

NOTE 20 — TAXES, DUTIES, AND FEES

(in MAD million) Taxes and duties

2017

2016

2015

873

1,096 1,876 2,971

803

Fees

1,964 2,838

1,573 2,377

TOTAL

Royalties include amounts owed to telecom regulatory agencies in Morocco and internationally.

In 2017, total taxes, duties and fees fell by 4.5% versus 2016. Tax expense fell by MAD 223 million, mainly due to tax changes favoring Sub-Saharan subsidiaries.

NOTE 21 — OTHER OPERATING INCOME AND EXPENSES

(in MAD million) Communication Commissions Other including:

2017

2016

2015

822

809

815

1,845 3,517

1,745 2,931

1,628 2,879

Rental expenses

852

936 962 706 145

823

Maintenance, repair, and property-service charges

1,020

1,023

Fees

763 149 620 113

491 140

Postage and banking service Voluntary redundancy plan

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Other

183

398

TOTAL

6,183

5,485

5,323

In 2017, other operating income and expenses increased by MAD 698 million. The changes mainly reflect: – increase in commissions, reflecting the revenue growth of subsidiaries;

– significant increase in voluntary redundancy plan expense; – slight decline in rental expenses and other operating expenses. The “Other” item primarily includes foreign exchange gains and losses on operations, transfers of operating expenses, and gains or losses on disposals of fixed assets.

NOTE 22 — DEPRECIATION, IMPAIRMENT AND PROVISIONS

The following table sets out changes in this item for the fiscalbyears ended 31bDecemberb2015, 2016, and 2017:

(in MAD million)

2017

2016

2015

Depreciation and impairment of fixed assets

6,610

6,489

6,403

Net provisions and impairment

54

355

400

TOTAL

6,557

6,845

6,804

Net allocations to depreciation, impairment and provisions amounted to MAD 6,557 million at December end 2017, versus MAD 6,845 million at December end 2016. This change mainly reflects the reversal of provisions for the voluntary redundancy plan.

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MAROC TELECOM ____ 2017 Registration Document