Proximus SA — Audit Report / Information 2020

Mar 19, 2021

Proximus NV van publiek recht/Proximus SA de droit public

Statutory report of the joint auditors to the shareholders' meeting for the year ended 31 December 2020 - Annual accounts

The original text of this report is in Dutch and French

Statutory report of the joint auditors to the shareholders' meeting of Proximus NV van publiek recht/Proximus SA de droit public for the year ended 31 December 2020 - Annual accounts

In the context of the statutory audit of the annual accounts of Proximus NV van publiek recht/Proximus SA de droit public (the "company"), we hereby submit our statutory audit report. This report includes our report on the annual accounts and the other legal and regulatory requirements. These parts should be considered as integral to the report.

As Required by law and the company's articles of association, and more specifically by article 25 of the law of 21 March 1991 reforming certain economic public corporations applicable to Proximus NV van publiek recht/ Proximus SA de droit public, the statutory auditors, members of the joint auditors, were appointed in their capacity as statutory auditor by the shareholder's meeting of 20 April 2016 for a period of six years, in accordance with the proposal of the board of directors issued upon recommendation of the audit and compliance committee. Our mandate will expire on the date of the shareholders' meeting deliberating on the annual accounts for the year ending 31 December 2021. Based on article 25, §3 of the law of 21 March 1991, two members of the Belgian Court of Audit were appointed as members of the joint auditors by the General assembly of the Belgian Court of Audit dated 11 March 2015 and 20 January 2016.

Deloitte Bedriifsrevisoren/Réviseurs d'Entreprises has performed the statutory audit of the annual accounts of Proximus NV van publiek recht/Proximus SA de droit public for 11 consecutive years. CDP Petit & Co has performed the statutory audit of the annual accounts of Proximus NV van publiek recht/ Proximus SA de droit public for 5 consecutive years.

Report on the annual accounts

Unqualified opinion

We have audited the annual accounts of the company, which comprises the balance sheet as at 31 December 2020 and the income statement for the year then ended, as well as the explanatory notes. The annual accounts show total assets of 7 232 706 (000) EUR and the income statement shows a profit for the year ended of 397 145 (000) EUR.

In our opinion, the annual accounts give a true and fair view of the company's net equity and financial position as of 31 December 2020 and of its results for the year then ended, in accordance with the financial reporting framework applicable in Belgium.

Basis for the unqualified opinion

We conducted our audit in accordance with International Standards on Auditing (ISA), as applicable in Belgium. In addition, we have applied the International Standards on Auditing approved by the IAASB applicable to the current financial year, but not yet approved at national level. Our responsibilities under those standards are further described in the "Responsibilities of the joint auditors for the audit of the annual accounts" section of our report. We have complied with all ethical requirements relevant to the statutory audit of the annual accounts in Belgium, including those regarding independence.

We have obtained from the board of directors and the company's officials the explanations and information necessary for performing our audit.

We believe that the audit evidence 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 annual accounts of the current period. These matters were addressed in the context of our audit of the annual accounts as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters	How our audit addressed the key audit matters
Revenue recognition on telecommunication activities
The accuracy of revenue is an inherent risk in the telecommunications industry. This is driven by the complexity of billing systems, the magnitude of volumes of data in combination with different products on the market and price changes during the year. The correct application of revenue recognition accounting standards to the separate elements of a customer's contract is complex and requires judgement by management. The details on revenue recognition are included in the explanatory notes 6.19 'Valuation rules' and 6.10 'Net turnover' to the annual accounts.	We addressed this key audit matter by applying the following controls and substantive test procedures to the material revenue streams: • We tested the design and operating effectiveness of the relevant key controls in place in the revenue cycle, as well as in the IT environment in which billing, rating and other relevant support systems reside, including the change control procedures in place around systems that support material revenue streams; • We performed tests of details on a sample of individual revenue transactions, tracing these back to order documentation and cash receipts; and
	We performed a substantive analytical review.
	Additionally, we assessed the appropriateness of the group's accounting policies with respect to revenue recognition and assessed compliance with the applicable accounting standards.

Valuation financial fixed assets

Per 31 December 2020, the investment held in Belgacom International Carrier Services NV/SA ('BICS') through Proximus OPAL NV/SA ('OPAL') amounts to 490 million EUR out of total financial fixed assets of 1 292 million EUR.

The annual impairment testing of BICS was important for our audit because it relies on a number of critical judgements, such as estimates and assumptions used in a discounted free cash flow model. The group uses a business plan reflecting the future strategy and using external sources for macro-economic assumptions such as inflation and long-term industry growth rate, as well as group specific assumptions on tax rates, capital spending and discount rates.

Estimating the underlying future operating cash flows of this investment required more management judgement given the ongoing negotiations before and after 2020 year-end with respect to the shareholding structure of BICS as well as the impact of COVID 19 pandemic on the performance of BICS.

The assessment of the valuation of BICS is sensitive to changes in assumptions (in particular the discount rate and the long-term growth rate).

The details on financial fixed assets are included in the explanatory notes 6.4.1 'Statement of financial fixed assets' to the annual accounts.

• We assessed the facts and circumstances with respect to the shareholding structure of BICS and read the minutes of board of directors' meetings to confirm our understanding.
• We assessed the available information with reference to the recoverable value of the investment in BICS. both related to Fair Value Less Costs to Sell and through Value In Use.
• We challenged the key assumptions, methodologies and data used by Proximus in its determination of the recoverable value, for example by analysing sensitivities in the discounted cash flow model and benchmarking with external macro-economic data to determine if they were reasonable and consistent with the current economic climate.
• We assessed the historical accuracy of management's estimates.
• We recalculated the recorded impairment.

Additionally, we assessed the sensitivities of assumptions and verified whether a reasonable possible change in assumptions could cause the carrying amounts to deviate from the net book value.

Responsibilities of the board of directors for the preparation of the annual accounts

The board of directors is responsible for the preparation and fair presentation of the annual accounts in accordance with the financial reporting framework applicable in Belgium and for such internal control as the board of directors determines is necessary to enable the preparation of the annual accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts, the board of directors is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters to be considered for going concern and using the going concern basis of accounting unless the board of directors either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Responsibilities of the joint auditors for the audit of the annual accounts

Our objectives are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue a statutory 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 annual accounts.

During the performance of our audit, we comply with the legal, regulatory and normative framework as applicable to the audit of annual accounts in Belgium. The scope of the audit does not comprise any assurance regarding the future viability of the company nor regarding the efficiency or effectiveness demonstrated by the board of directors in the way that the company's business has been conducted or will be conducted.

As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• identify and assess the risks of material misstatement of the annual accounts, 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 an 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 company's internal control;

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors;

• conclude on the appropriateness of the use of the going concern basis of accounting by the board of directors and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor's report to the related disclosures in the annual accounts 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 statutory auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern;

• evaluate the overall presentation, structure and content of the annual accounts, and whether the annual $\bullet$ accounts represent the underlying transactions and events in a manner that achieves fair presentation.

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

We also provide the audit and compliance committee with a statement that we have complied with relevant ethical requirements regarding independence, and we communicate with them about all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated to the audit and compliance committee, we determine those matters that were of most significance in the audit of the annual accounts of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes any public disclosure about the matter.

Other legal and regulatory requirements

Responsibilities of the board of directors

The board of directors is responsible for the preparation and the content of the directors' report on the annual accounts, the statement of non-financial information attached to the directors' report on the annual accounts and other matters disclosed in the annual report, for the documents to be filed according to the legal and regulatory requirements, for maintaining the company's accounting records in compliance with the legal and regulatory requirements applicable in Belgium, as well as for the company's compliance with the Code of companies and associations and the company's articles of association.

Responsibilities of the joint auditors

As part of our mandate and in accordance with the Belgian standard complementary to the International Standards on Auditing (ISA) as applicable in Belgium, our responsibility is to verify, in all material respects, the director's report on the annual accounts, the statement of non-financial information attached to the directors' report on the annual accounts and other matters disclosed in the annual report, those documents to be filed according to the legal and regulatory requirements and compliance with certain obligations referred to in the Code of companies and associations and the articles of association, as well as to report on these matters.

Aspects regarding the directors' report

In our opinion, after performing the specific procedures on the directors' report on the annual accounts, the directors' report on the annual accounts is consistent with the annual accounts for that same year and has been established in accordance with the requirements of article 3:5 and 3:6 of the Code of companies and associations.

In the context of our statutory audit of the annual accounts we are also responsible to consider, in particular based on information that we became aware of during the audit, if the directors' report on the annual accounts is free of material misstatement, either by information that is incorrectly stated or otherwise misleading. In the context of the procedures performed, we are not aware of such material misstatement.

The non-financial information as required by article 3:6, § 4 of the Code of companies and associations, has been disclosed in a separate report, attached to the directors' report. This statement on non-financial information includes all the information required by article 3:6, § 4 of the Code of companies and associations and is in accordance with the annual accounts for the financial year then ended. The non-financial information has been established by the company in accordance with the GRI Standards reporting principles. In accordance with article 3:75, § 1, 6° of the Code of companies and associations we do not express any opinion on the question whether this non-financial information has been established in accordance with the GRI Standards - Core Option reporting principles mentioned in the directors' report.

Statement on the social balance sheet

The social balance sheet, to be filed at the National Bank of Belgium in accordance with article 3:12, § 1, 8° of the Code of companies and associations, includes, both in form and in substance, all of the information required by this Code, including those relating to wages and training, and is free from any material inconsistencies with the information available to us in the context of our mission.

Statements regarding independence

• No services, incompatible with the statutory audit of the annual accounts as referred to by the law, have been performed and our audit firms and, if applicable, our networks of audit firms remained independent from the company during the performance of our mandate.
• The fees for the additional non-audit services compatible with the statutory audit of the annual accounts, as defined in article 3:65 of the Code of companies and associations, have been properly disclosed and disaggregated in the notes to the annual accounts.

Other statements

• Without prejudice to certain formal aspects of minor importance, the accounting records are maintained in accordance with the legal and regulatory requirements applicable in Belgium.
• The appropriation of results proposed to the general meeting is in accordance with the relevant legal and regulatory requirements.
• We do not have to report any transactions undertaken or decisions taken which may be in violation of the $\bullet$ company's articles of association or the Code of companies and associations.
• We have assessed the financial consequences for the company relating to the decision taken in respect of the conflict of interest as described in the board of directors' report.
• In the context of article 7:213 of the Code of companies and associations, an interim dividend was distributed during the financial year on which we have issued the attached report in accordance with the legal requirements.
• This report is consistent with our additional report to audit and compliance committee referred to in article 11 of $\bullet$ Regulation (EU) N° 537/2014.

Signed at Brussels.

The joint auditors

Deloitte Bedrijfsrevisoren/Réviseurs d'Entreprises CVBA/SCRL
Represented by Geert Verstraeten

CDP Petit & Co BV/SRL Represented by Damien Petit

The Belgian Court of Audit Represented by Pierre Rion, Counselor

Deloitte Bedrijfsrevisoren/Réviseurs d'Entreprises Coöperatieve vennootschap met beperkte aansprakelijkheid/ Société coopérative à responsabilité limitée Registered Office: Gateway building, Luchthaven Brussel Nationaal 1 J, B-1930 Zaventem VAT BE 0429.053.863 - RPR Brussel/RPM Bruxelles -IBAN BE86 5523 2431 0050 - BIC GKCCBEBB

Member of Deloitte Touche Tohmatsu Limited

The Belgian Court of Audit Represented by Jan Debucquoy, Counsel

SRL CDP PETIT & Co Square de l'Arbalète 6 1170 Brussel/Bruxelles België Tel. + 32 2 660 70 46 VAT BE 0670.625.336 www.cdp-partners.be

Rekenhof/Cour des comptes Regentschapsstraat 2 2 Rue de la Régence 1000 Brussel/Bruxelles België Tel. + 32 2 551 81 11 Fax + 32 2 551 86 22 www.ccrek.be

Proximus SA under public law

Report on the limited review of the statement of assets and liabilities for the period ended 30 September 2020 of company Proximus SA under public law in the context of the distribution of an interim dividend

The original text of this report is in Dutch/French

Proximus SA under public law | 30 September 2020

Report on the limited review of the statement of assets and liabilities for the period ended 30 September 2020 of company Proximus SA under public law in the context of the distribution of an interim dividend

In accordance with article 7:213 of the Code of companies and associations and with article 45 of the articles of association of Proximus SA under public law ("the company"), the board of directors ("bestuursorgaan" / "organe d'administration") proposes to distribute an interim dividend, based on the profit of the current period. In accordance with article 7:213 of the Code of companies and associations and in the context of our appointment as statutory auditor, we hereby report to the board of directors on the limited review of the statement of assets and liabilities for the period ended 30 September 2020.

We have conducted the limited review of the company's enclosed statement of assets and liabilities for the period ended 30 September 2020 which was prepared based on the financial reporting framework applicable in Belgium, which show total assets of 7 364 552 (000) EUR.

Board of directors' responsibility for the preparation of the statement of assets and liabilities

The board of directors is responsible for the preparation of the statement of assets and liabilities for the period ended 30 September 2020 in accordance with the financial reporting framework applicable in Belgium, following the principles stipulated in article 3:1, § 1, first paragraph, of the Code of companies and associations, as well as for compliance with the conditions set by article 7:213, second paragraph, of the Code of companies and associations.

Statutory auditor's responsibility

Our responsibility is to draw a conclusion on the statement of assets and liabilities, based on the limited review conducted by us.

We conducted our limited review in accordance with ISRE 2410, "Review of interim financial information performed by the independent auditor of the entity". This kind of review consists of making inquiries, primarily with persons responsible for financial and administrative matters, and of applying analytical and other review procedures. A limited review is substantially less in scope than an audit performed in accordance with the International Standards on Auditing (ISA) and consequently does not enable us to obtain any assurance that we would become aware of all significant matters that might be identified during the audit.

Accordingly, we do not express an audit opinion on this statement of assets and liabilities.

: Geert Verstraetan (Signatu
Paranan iliha ke kalipun ole $av$ $C$ BE

By Damien Petit (Signature)
Time: 10/28/2020 | 1:17:51 PM CET C BE

$\mathbf{1}$

Proximus SA under public law | 30 September 2020

Conclusion

Based on our limited review, no facts have come to our attention that cause us to believe that the enclosed statement of assets and liabilities of Proximus SA under public law for the period ended 30 September 2020 showing total assets of 7 364 552 (000) EUR and a profit for the current period of 70 435 (000) EUR, has not been prepared, in all material respects, in accordance with the financial reporting framework applicable in Belgium.

Restrictions on the use and distribution of our report

This report has solely been prepared in virtue of article 7:213 of the Code of companies and associations and is exclusively intended for the board of directors and the shareholders of the company. It may therefore not be used for any other purposes.

Signed at Zaventem/Watermaal-Bosvoorde.

The statutory auditor

Enclosure: Statement of assets and liabilities for the period ended 30 September 2020 and accounting principles of the company

Deloitte Bedrijfsrevisoren/Réviseurs d'Entreprises

Coöperatieve vennootschap met beperkte aansprakelijkheid/Société coopérative à responsabilité limitée Registered Office: Gateway building, Luchthaven Brussel Nationaal 1 J, B-1930 Zaventem VAT BE 0429.053.863 - RPR Brussel/RPM Bruxelles - IBAN BE 17 2300 0465 6121 - BIC GEBABEBB

Member of Deloitte Touche Tohmatsu Limited

CDP Petit & Co BV / SRL Square de l'Arbalète 6, 1170 Watermaal-Bosvoorde VAT BE 0670.625.336 - RPR Brussel/RPM Bruxelles -IBAN BE 11 7320 4060 3948 - BIC GEBABEBB

Deloitte.

Proximus Board October 28, 2020

Statement of assets and liabilities as per September 30, 2020 of Proximus S.A. under public law (in EUR)

$Nr$ . 0202.239.951

ANNUAL ACCOUNTS

BALANCE SHEET AFTER APPROPRIATION

01/01/20 - 30/09/20

01/01/19 - 31/12/19

	Notes	Codes	Period	Previous period
ASSETS
FORMATION EXPENSES	6.1	20
FIXED ASSETS		21/28	6.102.913.282	6.349.418.087
Intangible fixed assets	6.2	21	2.149.960.435	2.388.781.287
Tangible fixed assets	6.3	22/27	2.613.498.474	2.716.226.861
Land and buildings		22	104.033.743	111.013.223
Plant, machinery and equipment		23	2.485.324.495	2.573.508.155
Furniture and vehicles		24	10.697.923	14.168.846
Leasing and other rights		25	316,006	198.877
Other tangible fixed assets		26	13.126.307	17.337.760
Tangible assets under construction and advance payments made		27
Financial fixed assets	6.41 6.5.1	28	1.339.454.373	1.244.409.939
Affiliated enterprises	6.15	280/1	1.333.244.528	1.238.111.531
Participating interests		280	1.333.244.528	1.238.111.531
Amounts receivable		281
Other enterprises linked by participating interests	6.15	282/3	3.925.493	3.925.594
Participating interests		282	3.925.493	3.925.594
Amounts receivable		283
Other financial assets		284/8	2.284.352	2.372.814
Shares		284
Amounts receivable and cash guarantees		285/8	2.284.352	2.372.814

0202.239.951

Nr.

01/01/20 - 30/09/20
---------------------	--

01/01/19 - 31/12/19

Notes Codes Period Previous period 1.261.638.415 1.425.566.670 29/58 CURRENT ASSETS 29 89.013.383 89.013.383 Amounts receivable after more than one year 290 Trade debtors 291 89.013.383 89.013.383 Other amounts receivable 3 118.809.580 107.814.719 Stocks and contracts in progress 30/36 81.145.885 97.136.523 Stocks 30/31 Raw materials and consumables 30.797.438 34.068.812 32 Work in progress 33 Finished goods 34 63.067.711 50.348.447 Goods purchased for resale 35 Immovable property intended for sale 36 Advance payments 37 26.668.834 21.673.057 Contracts in progress 40/41 397.163.472 573.068.008 Amounts receivable within one year 377.599.344 40 429.492.850 Trade debtors 41 143.575.158 19.564.128 Other amounts receivable 6.5.1/ 50/53 398.631.626 Current investments 445.909.940 6.6 50 241.315.234 383.947.044 Own shares 51/53 14.684.582 204.594.706 Other investments and deposits 54/58 183.259.831 Cash at bank and in hand 157.949.274 490/1 63.787.627 62.784.242 6.6 Deferred charges and accrued income 20/58 7.364.551.697 7.774.984.757 TOTAL ASSETS		U 17U 17ZV - JU/UJ/ZV

0202.239.951 Nr.				C 3.2
			01/01/20 - 30/09/20	01/01/19 - 31/12/19
	Notes	Codes	Period	Previous period
EQUITY AND LIABILITIES
EQUITY		10/15	1.744.119.535	1.674.500.685
Capital	6.7.1	10	1.000.000.000	1.000.000.000
Issued capital		100	1.000.000.000	1.000.000.000
Uncalled capital 4		101
Share premium account		11
Revaluation surpluses		12
Reserves		13	509.442.999	507.212.579
Legal reserve		130	100.000.000	100.000.000
Reserves not available		131	255.722.350	398.723.795
In respect of own shares held		1310	241.315.234	383.947.044
Others		1311	14.407.116	14.776.751
Untaxed reserves		132	7.962.970	8.488.784
Available reserves		133	145.757.679
Accumulated profits (losses)		14	234.676.536	167.288.106
Investment grants		15
Advance to associates on the sharing out of the assets 5		19
PROVISIONS AND DEFERRED TAXES		16	686.028.240	913.260.950
Provisions for liabilities and charges		160/5	684.907.503	911.964.942
Pensions and similar obligations		160
Taxation		161
Major repairs and maintenance		162
Environmental liabilities		163	2.491.036	2.571.430
Other risks and costs	6.8	164/5	682.416.467	909.393.512
Deferred taxes		168	1.120.737	1.296.008

$\overline{\mathbf{4}}$ Amount to be deducted from the issued capital.

$\overline{\mathbf{5}}$ Amount to be deducted from the other components of equity.

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0202.239.951 Nr.				C 3.2
			01/01/20 - 30/09/20	01/01/19 - 31/12/19
	Notes	Codes	Period	Previous period
AMOUNTS PAYABLE		17/49	4.934.403.922	5.187.223.122
Amounts payable after more than one year	6.9	17	2.865.862.669	2.737.656.018
Financial debts		170/4	2.782.965.925	2.632.314.041
Subordinated loans		170
Unsubordinated debentures		171	2.106.965.925	1.956.314.041
Leasing and other similar obligations		172
Credit institutions		173	400.000.000	400.000.000
Other loans		174	276.000.000	276.000.000
Trade debts		175	82.896.744	105.341.977
Suppliers		1750	82.896.744	105.341.977
Bills of exchange payable		1751
Advances received on contracts in progress		176
Other amounts payable		178/9
Amounts payable within one year	6.9	42/48	1.988.327.755	2.361.580.551
Current portion of amounts payable after more than one year falling due within one year		42	83.957.927	78.310.971
Financial debts		43	933.964.293	996.127.562
Credit institutions		430/8		156.000.000
Other loans		439	933.964.293	840.127.562
Trade debts		44	623.290.284	639.207.326
Suppliers		440/4	623.290.284	639.207.326
Bills of exchange payable		441
Advances received on contracts in progress		46	1.537.935	4.599.347
Taxes, remuneration and social security	6.9	45	324.667.101	278.273.418
Taxes		450/3	152.508.538	97.276.173
Remuneration and social security		454/9	172.158.563	180.997.245
Other amounts payable		47/48	20.910.215	365.061.927
Accrued charges and deferred income	6.9	492/3	80.213.498	87.986.553
TOTAL LIABILITIES		10/49	7.364.551.697	7.774.984.757

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VALUATION RULES

The valuation rules comply with the terms of Chapter II of the R.D. of Jan 30, 2001 modified by R.D. Dec 18, 2015.

These rules were approved and modified by the Board of Directors on May 27, 1993, Dec 4, 1997, Oct 22, 1998, Oct 28, 1999, Oct 26, 2000, April 25, 2002, Oct 23, 2003, Dec 13, 2004, Dec 18, 2008, Feb 24, 2011, March 1, 2012, February 27, 2014 and February 28th, 2019.

BALANCE SHEET

FORMATION EXPENSES

The debt issuance costs are charged to income statement in the year in which they are incurred. Material formation expenses are capitalised and depreciated over a 5 year period. The acquisitions of the year are depreciated pro rata temporis.

Restructuring costs are expensed as incurred.

INTANGIBLE ASSETS

The intangible assets are measured at cost; this is the purchase price, production cost or the contribution value. General expenses are not included in the cost.

Intangible assets with an indefinite useful life are not amortized. An impairment loss on these assets is recorded in case of a permanent loss or durable decrease of value.

Intangible assets with a finite useful life are amortized on a straight line basis (except for broadcasting rights acquired in 2018 and 2019) at a fixed rate using the following plan, established on the basis of economic criteria:

• Goodwill: over the estimated useful life, if the useful life cannot be estimated reliably: 5 to 10 vears
• Software: 5 years or the license period in case the latter one is shorter than 5 year $\overline{a}$
• Network licenses: over the license period
• Rights to use, football and broadcasting rights: over the contract period
• Customer bases and trademarks: 3 to 10 years

The acquisitions of the year are amortized pro rata temporis.

Broadcasting rights acquired in 2018 and 2019 are amortized using the double of the linear depreciation rate with a maximum of 40% of the initial purchase value.

The goodwill resulting from the merger of early 2010 is depreciated over 15 years. This depreciation period is justified by the long life character of the expected profitability of all the merged companies.

The goodwill resulting from the merger of Wireless Technology in 2016 is depreciated over 10 years. This depreciation period reflects the useful life over which the economic benefits from the assets in the business combination are expected to be consumed by Proximus.

The goodwill resulting from the merger of Proximus Group Services NV in 2019 has been fully recognized in the income statement.

TANGIBLE ASSETS

Tangible assets are valued at cost; this is the purchase price, production cost or the contribution value. General expenses are not included.

_ $\mathcal{L}^{\text{max}}{\text{max}}$ and $\mathcal{L}^{\text{max}}{\text{max}}$ and $\mathcal{L}^{\text{max}}_{\text{max}}$ - -	'Nr. --------- ____	202.239.951	. ___ . _____	. . . O. . .
---------------------------------------------------------------------------------------------------------------------------------------------------	---------------------------	-------------	------------------------------	-----------------------

Tangible assets with an indefinite useful life are not depreciated. An impairment loss on these assets is recorded in case of a permanent loss or durable decrease of value.

Tangible assets with a finite useful life are depreciated using the straight line method (except for tangible assets acquired in 2018 and 2019). The tangible assets acquired in 2018 and 2019 are depreciated using the annual declining method meaning the double of the linear rate with a maximum of 40% of the initial purchase value.

The determination of the depreciable amount takes into account a residual value if this can be determined accurately, is material and its realization is sufficiently certain.

They are depreciated at a fixed rate using the following plan, established on the basis of economic criteria:

	Useful life (years)
Land and buildings
- Land	indefinite
- Buildings and building equipment	$22 - 33$
- Facilities in buildings	$3 - 10$
- Leasehold improvements	$3 - 10$
Technical and network equipment
- Cables and ducts	$15 - 20$
- Switches	$8 - 10$
- Transmission equipment	$6 - 8$
- Radio Access Network	$6 - 7$
- Mobile sites and site facility equipment	$5 - 10$
- Equipment installed at client premises	$2 - 8$
- Data and other network equipment	$2 - 15$
Furniture and vehicles
- Furniture and office equipment	$3 - 10$
- Vehicles	$3 - 10$

Fixed assets held under leasing or other similar rights are depreciated based on the useful life of the fixed asset as defined in the contract.

Assets under construction and advance payments are depreciated over the life term of the assets to which they relate.

Fixed assets that are put out of order are valued at net book value or at their expected realisation value if lower. They are no longer depreciated.

The acquisitions of the year are depreciated pro rata temporis.

The tangible assets as well as the assets related to the broadcasting rights acquired in 2018 and 2019 are depreciated using the annual declining method meaning the double of the linear rate with a maximum of 40%. The acquisitions of 2020 are depreciated using the straight-line method.

FINANCIAL ASSETS

Participating interests and shares are valued at their acquisition cost, which is the purchase price or the contribution value. Only the material ancillary costs are capitalised.

A write down is recorded if a durable permanent impairment or decrease in value of these assets is observed, based on the financial situation, the profitability or the perspectives of the company in which the participating interests or shares are held, taking into account the CBN/CNC advice n° 126-8.

Receivables are recognized at their nominal value. An allowance is recorded when, at the due date, the payment is partially or entirely uncertain.

AMOUNTS RECEIVABLE AFTER MORE THAN ONE YEAR

Amounts receivables are booked at nominal value. Amounts receivable expressed in foreign currencies are converted to EUR at the rate in force at the date of delivery and are translated at the year-end rate.

A bad debt allowance is recorded on the nominal value when at the due date, the payment is partially or entirely uncertain.

STOCKS AND CONTRACTS IN PROGRESS

Inventories of consumables and goods for resale are booked at their cost.

At the time of the annual inventory, the Weighted Average Price method is used to assess the various subdivisions in this caption.

A write down is applied when the realisable value or market value is lower than the acquisition cost or to take into consideration the risks inherent to the nature of the products.

Contracts in progress and work in process are valued at production cost or at market price (if this is lower than the production cost).

The projects of the ICT activity (contracts in progress) are taken into result based on stage of completion

AMOUNTS RECEIVABLE WITHIN ONE YEAR

These amounts appear on the balance sheet at nominal value.

A bad debt allowance is recorded on the nominal value when at the due date, the payment is partially or entirely uncertain.

Amounts receivable expressed in foreign currencies are converted into EUR at the rate in force on the date of delivery. At balance date they are translated at closing rate.

CURRENT INVESTMENTS

Current investments are valued at nominal value when they concern funds held in financial institutions and at acquisition cost, acquisition price without ancillary costs, in the other case.

A write-down is recorded on the nominal value or on the acquisition cost when the sales value on the closing date of the balance sheet is less than the previously booked value.

For the determination of the realisable value of own shares the market value is taken into account on the one hand and the strike price of granted share options for which these shares are held on the other hand.

Current investments in foreign currencies are translated into EUR at the rate in force on the closing date of the balance sheet.

CASH AT BANK AND IN HAND

Cash at bank and in hand is valued at nominal value. A write-down is recorded on the nominal value when the realisation value on the closing date of the balance sheet is less than the previously booked value. Cash at bank and in hand in foreign currencies is translated into EUR at the rate in force on the closing date of the balance sheet.

PROVISIONS AND DEFERRED TAXES

On the closing date of the balance sheet, an inventory is made of all foreseeable liabilities and contingent losses arising during the current year or during prior years. Provisions are established based on a reliable estimate of the risk on the moment of the establishment of the annual accounts. Provisions reflect the best estimate of probable costs or, when it relates to an obligation, the best estimate of the amount necessary to settle this at year-end closing.

In the framework of the departure plans, provisions are made after approval by the Joint Committee. These provisions are determined as the present value of the benefits granted during the period of inactivity, both for current and future beneficiaries.

In the framework of post-employment benefits, a provision is made for the current and future beneficiaries of these benefits. For the current beneficiaries this provision is determined as the present value of the obligation resulting from the granted benefits. For future beneficiaries, this provision is built up gradually based on the number of years of service. As a consequence, at the pension date, the provision corresponds also to the present value of the obligation for the granted benefits.

The provision for damages concerning vehicles is built by the company as "own insurer" and is valued through an individualisation of all damages that occurred before 2014 and for which the costs will reasonably be bared by the company in future years.

Deferred taxes are booked in compliance with article 76 of the R.D. of January 30, 2001.

AMOUNTS PAYABLE WITHIN ONE YEAR AND AFTER MORE THAN ONE YEAR

Amounts payables are recognized on the balance sheet at nominal value.

Amounts payable in foreign currencies are converted into EUR as follows:

• loans in foreign currencies at the rate in force at the time the loan is concluded;
• trade debts at the exchange rate on the date of entry of the reception of the goods and services.

Trade debts and financial debts, not covered against exchange risks, expressed in foreign currencies are translated at closing rate.

TRANSLATION DIFFERENCES

Exchange gains and losses resulting from the translation are taken in the income statement.

INCOME STATEMENT

The items in the income statement are valued at nominal value. Own construction is booked at production cost excluding indirect costs.

TURNOVER

Revenue is recorded in the period to which they refer, regardless of their payment. The turnover takes commercial and volume discounts into account.

Specific revenue streams and related recognition criteria are as follows:

• revenue from fixed line, mobile and carrier traffic is recognized on usage.
• revenue from connection fees and installation fees is recognized in income at the time of connection or installation.
• revenue from sales of communication equipment is recognized upon delivery to the third party distributors or upon delivery by the own Proximus shops to the end-customer.

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• revenue relating to the monthly rent, the monthly subscription fee and access fees in the framework of fixed and mobile telephony, internet and digital television are recognized in the period in which the services are provided.
• prepaid revenue such as revenue from pre-paid fixed and mobile phone cards is deferred and reca. ognized based on usage of the cards.
• maintenance fees are recognized as revenue over the maintenance period on a pro-rata basis.
• s revenue from the ICT activity linked to projects is recognized in the result in function of the realization percentage.

RIGHT AND COMMITMENTS NOT ACCRUED IN THE BALANCE SHEET

The rights and commitments not accrued in the balance sheet are mentioned in the notes, per category, at the nominal value of the commitment in the contract, or failing that, at their estimated value.