MAROC_TELECOM_REGISTRATION_DOCUMENT_2017

FINANCIAL REPORT

Consolidated financial statements at 31 December 2015, 2016 and 2017

DEPRECIATION AND IMPAIRMENT OF FIXED ASSETS The following table sets out the depreciation and impairment of MarocTelecomGroup’s fixed assets for the fiscal years ended 31bDecemberb2015, 2016, and 2017:

(in MAD million)

2017

2016

2015

Other intangible assets

1,300

1,309

1,199

Building and civil engineering Technical plant and pylons

286

249

304

4,690

4,616

4,586

Other property, plant, and equipment

334

315

314

TOTAL

6,610

6,489

6,403

NET CHARGES TO PROVISIONS AND IMPAIRMENT The following table sets out the net charges to provisions and impairment of Maroc TelecomGroup for the fiscal years ended 31bDecemberb2015, 2016, and 2017:

4

(in MAD million)

2017

2016

2015

Impairment of trade receivables

178 -22

78 18

170

Impairment of inventories

-5

Impairment of other receivables

22

4

58

Provisions

-232

256 355

177 400

NET CHARGES AND REVERSALS

-54

NOTE 23 — INCOME FROM EQUITY AFFILIATES

No equity interest was accounted for by the equity method in 2015, 2016, or 2017.

NOTE 24 — NET FINANCIAL INCOME OR EXPENSE

24.1 BORROWING COSTS

(in MAD million)

2017

2016

2015

Income from cash and cash equivalents

6

10

14

Interest expense on loans NET BORROWING COSTS

-497 -491

-333 -322

-454 -439

Net borrowing costs include interest expense on loans less income from cash and cash equivalents (investment income).

Interest expense on borrowings increased by 49%. This variation is due not only to the increase in the Group’s debt volume, but also to the rise in interest rates.

155

MAROC TELECOM ____ 2017 Registration Document