UNDER ONE SKY

Your Life. Connected.™ UNDER ONE SKY

Together with our stakeholders, customers, and employees, we have created our own aurora borealis; we are all particles of light of varying colour and complexity dancing under one sky.

The cover image reveals the magic of the northern lights over Duck Lake, Saskatchewan. Like our voice, data, and internet networks, their shimmer carries countless stories.

Silent Dance was captured by acclaimed nature photographer Jason Leo Bantle. A donation has been made to his All in the Wild Land Fund to purchase and set aside land in Saskatchewan for conservation.

. SASKTEL 2018/19 ANNUAL REPORT | 1

Honourable Don Morgan Telecommunications Saskatchewan for Minister Responsible Respectfully submitted, Respectfully I have the honour to submit herewith the annual report of SaskTel for the year for SaskTel of the annual report I have the honour to submit herewith certified by duly statements, including the financial 31, 2019, ending March Board, by the Treasury approved and in the form the Corporation, auditors for Holding Telecommunications with The Saskatchewan all in accordance Act. Corporation Dear Lieutenant Governor: His Honour Molloy, Thomas The Honourable W. Saskatchewan Lieutenant Governor of Regina, Saskatchewan Saskatchewan Regina, 2019 June 29, Letter of Transmittal 2 | TABLE OF CONTENTS Table Contents of IBC 109 106 105 101 54 19 15 13 7 5 3 1

Contact Us Corpora Sask Board o Board o 61 58 56 55 54 Consolida Management’s DiscussionandAnalysis Corpora 2018/19 Cor 11 10 9 8 7 Sharing OurS Pr Highlights Letter o

esident’s Message

Tel Executive Consolida Independent Auditors’R R Management’s R A LittleKindness Under OneSky Small CellSite,BiggerR L The W Notes toConsolida evelling aVery Large PlayingField eport of ManagementonInternalControl OverFinancialReporting f Transmittal f Directors CommitteePriorities f Directors te GovernanceStatement te SocialResponsibilityBreeds Corporate Sustainability ted FinancialStatements orld NeedsWireless e Corporate SocialResponsibilityProgram Metrics tories ted FinancialStatements , Every LastOneof Us esponsibility for FinancialStatements ted FinancialStatements each eport Highlights

COMPARATIVE FINANCIAL INFORMATION EXCLUDES THE IMPACTS OF IFRS 15

Net IncomeFINANCIALS ($ Millions) $175 Net Income ($ millions)

$150 $4.5 $8.7 $0.3 $11.8 $3.7 $136.8 $133.0 $125 $2.0 $121.0 $2.8 $100 + % $75 13.1 Net Income ($ millions)

$50 2018/19 $ 136.8 t s s e 18 19 2017/18 $ 121.0 me xe ns nue ices 7/ udge rv co pe Ta tization 201 B 2018/ Reve r In d Benefit 19 d Se e Ex ewan an ch s an Othe d Amor 2018/ ges, an skat t Financ Good Sa Wa Ne iation ec t Salaries, Depr

2018/19 Revenue ($ Millions) Ne

Revenue ($ millions)

Long Distance 2.6% Other 2.9% Equipment and Professional Services 4.5% Wireless 41.4% +0.2% $1,256.0M Revenue ($ millions) 2018/19 $ 1,256.0 Marketing, Security, and Software 5.2% 2017/18 $ 1,253.2

maxTV service, Local and Enhanced 14.6% Internet, Data 28.8%

Expenses ($ Millions)

Expenses ($ millions)

$1,100 $1,099.0 $11.8 $2.8 $0.3 $1,091.7 $5.9 $4.5 SASKTEL 2018/19 ANNUAL REPORT $1,080 + % $1,060 0.8 Return on Equity

$1,040 2018/19 12.7% s s 18 19 it 2017/18 11.9% f xe ices 7/ iation rv Ta tization 201 2018/ ec d Bene d Se ewan Depr Amor an ch s an ges, skat Good Sa , Wa | 3 t Salaries Ne Highlights

CUSTOMER CONNECTIONS INFRASTRUCTURE

% + % (6.4 ) 1.3 Capital Expenditures Internet ($ millions) 2018/19 282,710 2018/19 $ 282.6 2017/18 278,977 2017/18 $ 302.0

% + % +26.2 1.5 Fibre to the Premises maxTV Service (Total passed) 2018/19 112,583 2018/19 304,173 2017/18 110,881 2017/18 241,082

+ % + % 19.2 0.4 Wireless Data Usage Wireless (Terabyte) 2018/19 609,951 2018/19 42,244 2017/18 607,448 2017/18 35,428

(6.2%) Wireline Voice 2018/19 338,779 2017/18 361,351 HIGHLIGHTS 4 | SASKTEL 2018/19 ANNUAL REPORT | 5 us continue to modernize our systems, reduce costs, costs, our systems, reduce to modernize us continue locations to be announced. locations in each community. A total of 91 of approximately approximately 91 of A total of in each community. better able to react to changing market conditions. to changing market better able to react broadband networks by introducing wireline internet internet wireline introducing networks by broadband have communities Mbps, 67 up to 1.5 have speeds of up to 10 Mbps or faster. have speeds of expansion and upgrade saw the continued program to new locations high speed Internet connectivity we stand at the forefront of many of today’s quickest today’s quickest many of of the forefront we stand at while improvements to our backhaul networks have to our backhaul while improvements download and upload speeds across the province. the province. download and upload speeds across available 50 rural communities’ gaps and improving and find new ways to serve our customers better. and construction on the remaining communities will communities on the remaining and construction allowed us to continue to increase the available the increase to allowed us to continue to new and opening up some existing locations of SaskTel’s fusion internet services; bringing wireless bringing wireless fusion internet services; SaskTel’s of Being prepared for what the future will bring is an the future what for Being prepared As an ICT company our operation. essential part of up, we’ve to keep evolving technologies. In order sees that strategy a digital transformation embraced continue throughout the upcoming year, with more with more year, the upcoming throughout continue Last year, the launch of the Wireless Saskatchewan Saskatchewan the Wireless the launch of Last year, the program Phase 2 of customers. In 2018/19, closing coverage services, LTE wireless enhanced a new small site with the launch of services, cellular Internet in 456 communities, three communities communities three Internet in 456 communities, services to communities as small as 90 households, as to communities services up to 5 Mbps, and 386 communities speeds of Our approach allows us to be more agile, efficient, and allows us to be more Our approach As of March 31, 2019, SaskTel offers DSL High Speed offers SaskTel 31, 2019, March As of 100 communities have been announced for Phase 2 for have been announced 100 communities TRANSFORMING FOR TOMORROW TODAY TOMORROW TRANSFORMING FOR This has allowed SaskTel to expand the reach of its of to expand the reach This has allowed SaskTel

is the envy of jurisdictions from coast to coast. to coast. coast jurisdictions from is the envy of in philosophy has allowed us to become more agile more in philosophy has allowed us to become role as the province’s leading ICT provider while leading ICT provider as the province’s role playing a more active role than ever before in the than ever before active role playing a more powered world. powered much more. It’s required us to refocus everything us to refocus It’s required much more. we do within the lens of how our actions will help how our actions we do within the lens of to make our networks better. our networks better. to make the implementation of the final year in our current the final year in our current of the implementation and quickly take advantage of market opportunities opportunities market advantage of and quickly take as they arise. our operations that will see SaskTel continue in its continue will see SaskTel that our operations of transformational change and, we’ve learned not change transformational of it. This shift only to adapt to change, but to embrace of introducing new and innovative services, and are and are services, new and innovative introducing of our province reap the benefits of a broadband of a broadband the benefits reap our province of that, we’ve long understood that it means so that we’ve long understood that, of For the past five years, SaskTel has walked the path the path has walked For the past five years, SaskTel communities we serve. communities customer experience, continued our long history continued customer experience, continued investment in our networks is a key part in our networks is a key investment continued BROADENING THE REACH OF BROADBAND THE REACH BROADENING setting a standard for broadband connectivity that that connectivity broadband for setting a standard light, like the North Star, it can be downright impossible. As Saskatchewan’s As Saskatchewan’s impossible. be downright it can Star, the North light, like set we’ve (ICT) technology and communications leading information company, is now. future And, that by broadband. powered a future toward our course

Saskatchewan, but we’ve made the most of it. of but we’ve made the most Saskatchewan, Saskatchewan people to their world. And while people Saskatchewan five-year strategic plan has spurred refinements to plan has spurred five-year strategic $282 million in capital as part of our tireless work our tireless $282 million in capital as part of Navigating a sea of change is difficult at the best of times and without a guiding and without of times best at the is difficult change a sea of Navigating At SaskTel, we’ve set out to be the best at connecting connecting we’ve set out to be the best at At SaskTel, Although 2018/19 had its own unique challenges, Although 2018/19 had its own unique

As a result, we’ve found new ways of enhancing our ways of new we’ve found As a result, President’s Message Throughout the past fiscal year, we invested over the past fiscal year, Throughout The construction season is notoriously short in season is notoriously The construction 6 | PRESIDENT’S MESSAGE Top Employersfor Young People for theseventhtime, Top Employersfor 13consecutive years,Canada’s AWARD-WINNING WORKFORCE At SaskTel weknowthebroadband future willbe Although weroutinely rankamongthebestin Along withmanyotherinitiatives, thishas ledSaskTel Our success at implementingourstrategic plan Work continues toconvert residential andbusiness We’re diligentlyworkingtoensure that While technologychangesthewaywedobusiness, Saskatchewan’s worldclasscommunications speed internetservice righttoourcustomers’homes. small communities –atrend wewillcontinue intothe saw usbeginintroducing infiNET toanumberof other IMPLEMENTING THE LATEST INNOVATIONSIMPLEMENTING LATEST THE EMPOWERING AN AN EMPOWERING In addition,withthelaunchof upto50 MbpsDSL customers from ourDSLservices tofibre services emphasizes honesty, integrity, andtakingownership chosen toworkfor SaskTel. WithourPartnership comes downtotheamazingpeoplewho’ve areas canbereached. and performance of ourlegacynetworksuntilthose and existingcustomerswhilemaximizingthevalue across Saskatchewan’s majorcentres. Also,2018/19 and Canada’sTop DiversityEmployer for thepast for one’sactions. for Excellence program, we’vebuiltaculture that that changethewaytheyconnect totheirworld. to benamedbyMediacorp asoneof Saskatchewan’s we’re rolling outnewtechnologiestoourcustomers revolution bybringingourinfiNET™ fibre optichigh based downloadservices inareas notyetready for next fiscalyear. powered byfibre. nine years. infiNET, weare improving availablespeedsfor new infrastructure canremain at theforefront of thefibre industry intermsof ourcustomerservice, we’re not

To keep our momentum, SaskTel muststaytrue A SUSTAINABLE FUTURE When SaskTel beganitsjourneyof strategic Service FirstInitiative (CXFirst)byempoweringSaskTel SETTING THE STAGE THE FOR SETTING Sincerely, strategically investingapproximately $2.9 million employees sothat they canbemore responsive to ever closer, SaskTel willcontinue tobethere helping communications technologydrawstheglobe Due totheeffective implementation of ourstrategic comes toconnecting Saskatchewan people our customers’needsandbetterabletodothings year, we’vechosentoreemphasize ourCustomer our customersnavigate afullybroadband reality. organizations that doasmuchuswhenit agile, andmore customerfocused future. a sustainablebusinessmodelfor thelongterm, annually inthenon-profit groups andcharitable for ourcustomers. for long-termsuccess. And,asinformation Doug Burnett,SaskTel President andCEO transformation, itwaswiththegoalof creating the communities weserve.Forus,thisincludes to beingaresponsible andactivemember of willing tobesatisfied with justthat. Overthelast while preparing usfor amore responsive, more with theircommunities andtheirworld. right thefirsttime,givingthemmore ownershipover plan overthepastyear, SaskTel iswellpositioned improving process andreducing pointsof contention

SASKTEL 2018/19 ANNUAL REPORT | 7

continue to expand its strategic portfolio portfolio to expand its strategic continue its reputation and strengthen services of to expertise and resources providing for the world. SI has around providers service engagements under led communication the Philippines’ the English Channel, across of the villages outlying Barangays, through and on the streets Kagera region, Tanzania’s Wellington. New Zealand’s of Bahamas to its impressive SI can add the Now, in in six continents over 30 countries list of projects. which they have completed “It has been a real pleasure working with working pleasure been a real has “It as we resources International the SaskTel a new mobile carrier in established ALIV as said Johnny market,” the Bahamian telecom Ingle, Chief ALIV Champion. the for SaskTel, the long-term pay-offs As for SaskTel for the opportunity provided project in a fast-paced experience employees to gain the team offered It also start-up environment. operations business to experience a chance culture. within a different “The nurturing and hours of many long my building ALIV has significantly increased to be it takes what of skills and awareness and competitive in an aggressive successful Dang. employee Peter said SaskTel industry,” enabled SI to The Bahamas project

Just three months after its creation, the its creation, months after Just three the Bahamian 99% of network covered in less than two Furthermore, population. the company network operation, years of and share achieved over 30% market network improvements to provide continues bringing most recently and innovations, to the region. service (VoLTE) over LTE Voice “This provides global recognition initiative and its hard-working to Saskatchewan shape people, while helping to successfully said the future of the Bahamian Telecom,” VP of International Scott Argue, SaskTel Customer Services and Project Sponsor. By supplying key resources over more over more resources By supplying key and guidance than two years, SI provided mentorship to ALIV as the new business quickly came to fruition. SI was engaged in the project by ALIV, a by ALIV, the project SI was engaged in between formed mobile network company and The Commonwealth Cable Bahamas Ltd. on consulting provide the Bahamas, to of design, construction, network operational operations. management, and project SaskTel International (SI) has been helping (SI) has been International SaskTel launch its second region the Bahamas operator. wireless

THE WORLD NEEDS WIRELESS THE WORLD Sharing Our Stories 8 | SHARING OUR STORIES with them.” collaborate alittlebitmoreeffectively bring acustomerinandbrainstorm allows ustokickitupanotchwhenwe newCollaboration Centre said Glenn.“The with customersinadifferentmanner,” approach, onewherewecouldengage “We werelookingforanon-traditional Lorne St.inRegina. the newSaskTel Collaboration Centre at 1855 That different way of thinkingwaswhat ledto need tothinkdifferently.” barriers are muchlower. That meanswereally of competitors isenteringourmarket andthe up righthere inSaskatchewan. Anew wave competitors andpotentialpartnerspopping globally andwealsoneedtobeaware of new ability tolaunchnewdisruptiveproducts provides theentrepreneur community an and Microsoft. Easyaccess tocloudservices companies like Google,Facebook, Amazon “Our competitors nowalsoinclude Glenn Buchanan,Technical SalesConsultant. longer companies like BellorTELUS,” said last few years,where ourcompetitors are no “We’ve seenadigitaltransformation inthe LEVELLING A VERY LARGE PLAYING FIELD PLAYING VERY LARGE A LEVELLING be aware of.” is awaytooffer themsolutionstheymaynot don’t knowwhat solutionsare outthere. This for customerstothinkoutsidethebox ifthey business problem indifferent ways.It’shard understand howtechnologycansolvea on givingcustomersideasandhelpingthem isasteptoward changingthegame “This customer andhelptoresolve their issues. down furtherintothechallengefaced by the that are similartotheirs.Theideaisdrill how othercustomersare solvingproblems and screens togivecustomersideasof to bevisiting.There are alsowriteablewalls the logoof whichevercustomerhappens screens intheroom. Instead,theyfeature There are noSaskTel logosfeatured onthe less like avendorandmore like apartner.” us inadifferent way different way, theywillengagewith When weengagewithcustomersina and buildrelationships from theground up. about them,really focus onthecustomer with customersandmake themfeel it’sall space isreally abouthowweengage “The ­—they willtr eat us SASKTEL 2018/19 ANNUAL REPORT | 9

“I am happy to report that we have had so that am happy to report “I community from much positive feedback coverage; cell members on their improved calls dropped we no longer have issues of devices.” wireless to use their inability or the Paddockwood Village of Joan Carriere, It ends up having the same end result for for end result having the same It ends up the customer. was part of site announcement The small cell Saskatchewan’s of the Government Phase 2 of a of 2017 announcement December rural to provide initiative four-phase to access enhanced with communities speed internet and high cellular reliable on the first 50 towers The upgrades services. 2019. March the end of at complete were commitment “This with SaskTel’s is all in keeping in communications to deliver the latest our province,” to our customers across services said Joash. “The data wireless demand for all the time. These upgrades is increasing to help bolster our network and add capacity demand.” that address been announced sites have already Another 41 site solution the small cell and will receive the next year. of over the course The small cell sites are designed specifically designed specifically are sites cell The small a smaller footprint. less customers in to handle

SMALL CELL SITE, REACH BIGGER CELL SMALL The small cell sites have similar functionality sites have similar functionality The small cell in the sites you will see cell as the standard the small being that The difference province. Term site has one sector and one Long cell layer as opposed to a standard (LTE) Evolution sectors. site with three cell “These sites are cost-sensitive cell specifically designed for small towns Joash with a few hundred residents,” said Picard, Project Manager for the project. “Theyth in connectivity within result speeds, and a better wireless experience.” throughout rural Saskatchewan and we are and we are rural Saskatchewan throughout site solution. a small cell doing so by deploying SaskTel announced plans in 2018 to improve plans in 2018 to improve announced SaskTel communities in 91 rural services cellular 4G LTE That’s a lot of territory to cover when you’re you’re when territory to cover a lot of That’s particularly in the provider, service a cellular is going the extra But SaskTel rural areas. (so to speak). kilometre If the province of Saskatchewan is your Saskatchewan of If the province correct! you are answer, What is 651,900 square kilometres and kilometres square is 651,900 What prairies? the Canadian the heart of in located 10 | SHARING OUR STORIES CTV eveningnews. of Iqbal’s situation whilewatching the Planning andStaffing, becameaware Sharon Davis,HRManager–Strategic as anengineerinCanada. to havehisdegree evaluated toqualify earning alivingfor hisfamilywhilewaiting background todrivingacab.Buthewas It wasquiteadifference togofrom that as aprofessor,” saidIqbal. in MechanicalEngineeringandwasworking “In India,Ihadcompleted aMaster’sDegree would evergettheopportunitytoworkagain. Through itall,hebegantodoubtthat he Rehabilitation Centre inRegina. both physicalandmental,at theWascana through alongrehabilitation process, how towalkandspeakagain.”Iqbalfought and father of two.“I slowlybegantolearn “I neededtobeginagain,”saidthehusband partially paralyzed. ButIqbalnevergaveup. recovered, hewasunabletospeakand killed himandputinacoma. Whenhe The attack resulted inabraininjurythat nearly after immigrating toCanadawithhisfamily. savagely stabbedwhileworkingasacabdriver In Novemberof 2016, IqbalSharmawas UNDER ONE SKY, ONE OF US EVERY LAST the needsofbusiness.” those abilitiesinothers,andpairingwith sometimes adifferentperspectivetosee Sharon. “It justtakes anopenmindand to contributeandprovidevalue,”said singlepersonhastheability “Every cognitive disabilities. for individualswithdisabilities,specifically meaningful employmentopportunities Employment Program. Thisprogram provides offered tohimaspart of SaskTel’s Supported to fitIqbal’ssituation andabilities The jobdescriptionwas‘carved’ specially position offer toIqbalasa Facilities Assistant. SaskTel extendedatemporarypart-time at SaskTel. determined that Iqbal was qualifiedtowork coach from PartnersinEmployment.Itwas a meetingwassetupwithIqbalandhisrehab She reached outtoIqbalthrough CTVand continue hisrehabilitation.” possible optionstoemployIqbal,sohecould them,” saidSharon. “I wastryingtothinkof all to getbackintotheworkforce andsupport because of what happened,hewasunable Canada togivehisfamilyabetterlife, and “Here wasthismanwhohadmovedto SASKTEL 2018/19 ANNUAL REPORT | 11 As part of the full day event, students heard heard day event, students the full As part of Clarke. expert Jared change climate from and to projects treated also They were Art and Physical led by Greenall’s activities teachers. Education conceived During art class, students of and expressions anti-bullying messages onto then painted were kindness. The phrases a school part of will be used as that rocks will allow that project beautification grounds years to come. for shared the messages to be together as enjoy coming students “Our these happen,” events like to make a group of Greenall the Principal said Jeff Moore, the High School who is also the head of “TheseOutdoor School program. days, online bullying is a topical issue because be it’s happening, and students need to with positive messages.” educated important than talking be more could “What being about being kind to each other and kind to the environment?” “The students at Greenall High School are “TheHigh School are Greenall at students like things and they take group, a great issues seriously,” bullying and environmental Human SaskTel McLeod, said Jennifer Manager. Resource The theme of the conference was, Be The theme of the and Be Kind to the Kind to Each Other made possible by Environment. It was Be Kind Online grant program. SaskTel’s in partnership with the MinistryAwarded the grant provides youth of Education, to find the opportunity to collaborate solutions to stop bullying and inspire others to do the same. Even though these were the words of Samuel Samuel of the words though these were Even Butte Pilot 8 student from Halipchik, a grade the of sentiment prevailing School, it was the Division Grade 8 students 175 Prairie School Conference the Kindness who attended at School program put on by the Outdoor Balgonie. High School in Greenall “Be friendly, accept everyone, say nice words words nice everyone, say accept friendly, “Be to everyone speak respectfully to them and you.” around A LITTLE KINDNESS 12 | 2018/19 CORE CORPORATE SOCIAL RESPONSIBILITY PROGRAM METRICS 2018/19 Core Corporate Social Responsibility (CSR) Program Metrics

BE KIND ONLINE

awarded

received up to since March 31, TOTAL APPLICATIONS 150 INCEPTION 82 GRANTS TOTAL 2019 $ Total amount 72,705 awarded UP TO MARCH 31, 2019

SASKTEL PIONEERS

$236,243 48.6 3,995 SASKTEL 2018/19 ANNUAL REPORT FINANCIAL DONATIONS HOURS/VOLUNTEER MEMBERS $610,495 34,925 IN-KIND DONATIONS VOLUNTEER HOURS | 13 2018/19 Core Corporate Social Responsibility Program Metrics

TELCARE CONTRIBUTIONS

TelCare

300 $293,912 $291,425 $296,335 $259,089 250 Employees 200 SaskTel 150

100

50

0 2015 2016 2017 2018

ENVIRONMENTAL IMPACT Rogers 600 Telus 500 G4-EN3: Energy Consumption Within the Organization as Measured in Gigajoules (GJ) Bell 400

NATURAL300 GAS = FLEET FUEL =

200

100 GJ GJ 89,1900 107,265 Wireless Wireline phone Cable and IPTV Internet

ELECTRICITY = 2018/19 TOTAL =

332,213GJ 528,668GJ

SaskTel has a solid foundation, with organizational practices aligned to environmental policies and an Environmental Management System (EMS) based on International Standard ISO 14001. This allows SaskTel to manage environmental aspects of its business effectively and move sustainability initiatives forward through accurate measurement and identification of their impact. In total, these actions make SaskTel a more efficient and socially responsible corporate citizen.

To view SaskTel’s full Corporate Social Responsibility report, please visit https://www.sasktel.com/about-us/company-info/financial-reports. 2018/19 CORE CORPORATE SOCIAL RESPONSIBILITY PROGRAM METRICS CORPORATE 2018/19 CORE 14 | SASKTEL 2018/19 ANNUAL REPORT | 15

9 million in support of 985 non- 9 million in support of Investing over $2. profit and charitable organizations, community and charitable organizations, profit venues, events, and partnerships associations, positively impacting 240 the province; across communities Saskatchewan

We understand they’ve placed their faith in us to not their faith in us to placed understand they’ve We to their world, but to help make them only connect we all want to is the kind the world we share that sure with. connect on its CSR efforts has focused this, SaskTel achieve To areas: key four A CULTURE OF COMMUNITY OF CULTURE A communities about the our employees care At SaskTel, we serve. This shows in the thousands of volunteer of we serve. This shows in the thousands employees each hours logged by past and present dollars raised, and thousands of of the hundreds year, and dollars invested in local non-profit the millions of the best work to make that charitable organizations everyone. to live in the world better for place giving back that’s of a culture we’ve grown Together, DNA. Throughout right into our shared grounded this tradition by: continued has SaskTel 2018/19, •

Although we’ve shared the path we’re on with the we’re the path Although we’ve shared we a century, than more for this province people of has made toward SaskTel the progress that recognize possible without achieving its CSR goals wouldn’t be partners, dedicated our community the support of employees, and amazing customers. By promoting sustainability, a culture of positivity, positivity, of a culture sustainability, By promoting we the communities and being an active member of “can from is changing the conversation serve, SaskTel everyone how we we build a better world” to showing can help us all get there. As Saskatchewan’s foremost ICT Company, SaskTel SaskTel ICT Company, foremost As Saskatchewan’s in business and is used to playing a leadership role we’ve the main reasons One of communications. successfully been able to hold onto our position CSR to heart by take we so long is the fact that for to proud our mission. We’re part of making it a core business and CSR activities that show this province game. don’t have to add up to a zero-sum If we all live under one sky, then we also share just just share then we also under one sky, If we all live are it may seem obvious, there one Earth. Although all use the reminder. we could times when it seems mind and use principle top of this we keep At SaskTel, our decisions not we understand that sure it to make good or bad, our bottom line; whether only affect impacts on our employees they can have significant we serve. and the communities

Breeds Corporate Sustainability Corporate Breeds Corporate Social Responsibility 16 | 2018/19 CORE CORPORATE SOCIAL RESPONSIBILITY PROGRAM METRICS • • elaunching IAmStronger, SaskTel’s bullying •

Enc career options of mobileappdevelopment,gamedesign,andIT hands-on workshopsthat explored theprinciples Students from Grades9through 12participated in Saskatchewan Polytechnic CampusinMooseJaw. Information Technology ThinkITBootCampat the Council (ICTC) tohostthefourth annualFocuson the In Partnering withPrairieSouthSchoolDivisionand through anever-more challengingonlineworld next generation andhelpthemnavigate theirway efforts, BeKindOnlinecanmore easily reach the a newmobile-firstwebsite,andenhanced outreach appeal toyoungpeopletoday, withupdated visuals, prevention program, asBeKindOnline.Designedto R worthwhile community initiatives over 34,000 hoursof volunteertime tosupport contributed more than$236,000 in donations and situations. In2018/19, theSaskTel Pioneers given awaytochildren indistress duringemergency General Hospitalandmakingteddybearstobe including testinginfant hearingat theRegina in awidevarietyof localprojects that helppeople, retired SaskTel employees,thePioneersare involved of the SaskTel Pioneers.Madeupof current and ouraging alifetime of volunteeringwiththehelp formation Communications Technology • • Just afew of thechangesimplementedinclude: for anincreasingly customer-focused future. customers rely ontointeractwithus;positioningus further refined thetechnologiesandprocesses our and from anywhere theywant.In2018/19, we’ve connect withuswhentheywant,how The second stepisensuringourcustomerscan catalogue of products andservices offered. courses toteachemployeesat alllevelsaboutthefull that end,weintroduced newcompany-wide training all beproduct, service, andbrandambassadors. To to theirworld,butourfirststepismakingsure wecan We strivetobethebestat connecting ourcustomers CONNECTING CUSTOMERS OUR WITH

way. Actionplanshavebeenintegrated it rightthefirsttimeandidentifyanybarriersin their employeestoidentifynewwaystheycould do Each departmentdesignedanactivitythat asked is where itshouldbe;ontheirneedsandnotours. sure that ineverycustomer interactionourfocus refocus onservingourcustomersbetterbymaking wide activitywasimplementedtohelpSaskTel may notbedirectly exposedtothrough theirwork of learning aboutkey products andhottopicsthey programs, providing employeeswithaformal way learning moduleshavebeenaddedtoourtraining interacting withacustomer. Ambassadoronline ambassadors whenoutinthecommunity or and services, sotheycanactasknowledgeable seeks toeducate allemployeesaboutourproducts Expanded ourAmbassadorso Launched DoitRighttheFirstTime.Thisc f SaskTel initiative that orporate- SASKTEL 2018/19 ANNUAL REPORT | 17 f Canada’s Top 100 Employers f Canada’s Top earning Management System earning Management System oximately every 18 months to two 18 months to every oximately Tel NextGEN, an employee network dedicated dedicated an employee network NextGEN, Tel Being named one o Held appr Sask the next great become staff to helping SaskTel the year, active throughout employees, was very were days that development hosting themed career the Finding Sessions like open to all employees. led by SaskTel’s Leader, to Being an Effective Path attended well were Officer, Chief Information all stages in their careers by employees at Launched the L employees to engage Mobile App, allowing SaskTel they’d like, in online training modules anytime This they can use their mobile phone. wherever was addition to our toolbox much-requested easily pursue to help employees more introduced no cost at the many training opportunities provided without needing to be tied to a formal by SaskTel space office Employers for the thirteenth time, Canada’s Top for the seventh time, Saskatchewan’s for People Young the thirteenth time, and Canada’s Employers for Top the ninth time by Best Diversity Employers for Canada Inc. Mediacorp years, the entire management team across the team across management entire years, the leadership a company-organized attends province on being held the most recent with conference, an provides The conference 2018. 13, September and a direction corporate opportunity to reaffirm issues key team to address executive the for forum team management with the entire face-to-face

Some highlights from the past year include: past year the from highlights Some • • • •

e working together to address address to together e working oduced maxTV Stream, a cutting-edge a cutting-edge Stream, maxTV oduced entertainment platform that provides SaskTel SaskTel provides that platform entertainment the best of ability to access customers with the on demand, and the latest live television, movies the best of apps. When TV compatible Android to with the freedom both worlds is combined Canada, SaskTel in anywhere most content access with entertainment the its customers is providing want they anywhere virtually way they want from in the country barriers so we can better serve our customers the our customers we can better serve barriers so want to be served way they Intr into departmental objectives and work plans, and plans, and work and objectives departmental into ar primes department

next generation of SaskTel employees develop into SaskTel of next generation leaders today. Never willing to be satisfied, 2018/19 saw us revamp our 2018/19 saw us Never willing to be satisfied, new employees and placed for process onboarding emphasis on training and development with a greater new workshops designed to help thethe launch of All of SaskTel has reason to be proud of the people the of proud to be has reason SaskTel All of it is. The Corporation’s what company this who make to be why it continues a big part of employees are in order top employers. But, the country’s one of on having the best rely we them to succeed, for empower that in place and processes practices employees to do their jobs better. POWERED BY OUR BY POWERED PEOPLE • • 18 | CORPORATE SOCIAL RESPONSIBILITY HIGHLIGHTS • initiatives carriedoutbySaskTel inthisarea are: environment. In2018/19, someof themajor of ouroperations andhelppromote ahealthier exploring newwaysthat canreduce theimpacts However, maintainingsustainabilitymeansalways Mediacorp Canadafor thetenthconsecutive time. named oneof Canada’s Greenest Employersby leader inenvironmental responsibility in2018, being Management System, SaskTel continued tobea stringent implementation of ourEnvironmental to following ourEnvironmental Strategy andthe track record that canbeattributed toourcommitment colour inmore waysthanone.Withan impressive In Saskatchewan, there’s nodoubtthat green isthe GREENER A BUILDING FUTURE

consumption from anindividuallightswitch capture detailsasgranulartrackingthepower to monitoringsystemsthat canbedesignedto with real-time data onenergy consumption thanks allows Greenwave Innovations toprovide clients electricity, andgas.Thisfull-spectrumapproach of a building’s energy usage,includingwater, technology hastheabilitytomonitorallelements new SaskTel Collaboration Centre inRegina. The Greenwave’s uniquetechnologytohelppowerthe monitoring solutionsinSaskatchewan while using Innovations tooffer energy efficiencyand Enter ed intoapartnershipwithGreenwave • •

Announc Sask bills everyyear. That’s 2,300 trees! 36 millionpieces of paper usedtosendcustomer in ourcommunities. Plus,itwillreduce theover use andwaste,reduce thecarbonfootprint paperless billingwillhelptodecrease resource customers throughout 2019. MovingtoeBILL an eBILLandwillcontinue tograduallymigrate migrating customerswithaccess tointernet consumption related tomonthlybills.SaskTel began initiatives across Saskatchewan funds for thegroup’s investmentsingreening bottles andcanshavebeenrecycled, providing Moose JawandRegina. To date, almost35,000 and cansfrom variousSaskTel buildingsin raised everyyearfrom thecollection of bottles were adoptedusingEnviroFunds, whichare Interpretive Centre inMooseJaw. Theowls residing at theSaskatchewan Burrowing Owl owls (Peanut, Artemis,Chip,Cricket, andThea) and raisingawareness byadoptingfiveburrowing celebrated fiveyears of helpingtheenvironment Tel’s EnviroCare employeevolunteergroup ed aninitiative aimed at reducing paper SASKTEL 2018/19 ANNUAL REPORT | 19

tes,

ces ehensive Income es e Expense ovided by Operating Activities ovided by Operating ome tion of New International Financial New International tion of eturn on Equity tandards and Interpretations ting Results Cash Pr Cash Used in Investing Activities Cash Used in Financing Activities Capital Management Financial Summary Net Inc R Revenue Expenses Net Financ Other Compr Year Record of Service Record of Year

47 48 48 Capital Expenditur Significant Accounting Policies, Estima and Judgments Applica Reporting Standards New S Five- Opera 40 41 42 45 47 47 Liquidity and Capital Resour Glossary 41 47 Adopted Not Yet

49 50 50 50 47 52 40 51

Looking e on Breadth of Services of e on Breadth ed Scorecard and Results Targets ed Scorecard y ease Broadband Penetration ease Broadband tegic Risks tegic Risks e Business Risks e Business Risks celerate Transformation to an Transformation celerate tionale for Balanced Scorecard Scorecard Balanced tionale for ow Revenue and Profit from the the from and Profit ow Revenue Stra Cor Balanc Balanc Ra Selection Measure Performance Ac Gr Deliver an Outstanding Customer Incr Capitaliz ICT Provider Business Market Experience

trategic Direction trategic op Companies Enterprise Risk Management 37 Performance Management 31 32 36 38 29 S 28 29 Our Business Our Industr T 26 Introduction Developments Accounting Policy Forward- Caution Regarding Information 27

37 31 21 23 23 20 20 20 20 Contents Management’sDiscussion and Analysis 20 | MANAGEMENT’S DISCUSSION AND ANALYSIS political conditions; interest andexchange rates; include, butare notlimitedto:generaleconomic and and assumptions.Factors that caninfluence performance actual results todiffer materially from estimates, predictions, looking statements, asanumberof factors could cause Readers shouldnotplace unduereliance onforward- nonrecurring itemsannounced oroccurring subsequently. do nottake intoconsideration theeffect of transactionsor statements willoccur. Aswell,forward-looking statements that any of thepredictions forecast byforward-looking out tobeinaccurate. Asaresult, SaskTel cannotguarantee impact thebusiness,orifestimates orassumptionsturn anticipated ifknownorunknownrisksanduncertainties of writing, actualresults could differ materially from those statements reflect expectations andintentions at thetime will, andsimilarexpressions. Since theseforward-looking anticipate, believe,could, expect,intend,may, should, Forward-looking statements mayincludewords suchas known todaytomake anassertionaboutthefuture. statement isforward-looking whenitusesinformation requirements, andournetworkdeploymentplans.A expect tousemeetouranticipated 2019/20cash plans andstrategic priorities,thesources of liquiditywe statements aboutSaskTel, itsbusinessoutlook,objectives, Many sectionsof thisdiscussionincludeforward-looking LOOKING INFORMATION REGARDINGCAUTION FORWARD- 15 onthecurrent year’soperations are highlighted. excluding theimpactof IFRS15. Theimpact of IFRS compares thecurrent andprioryear’sfinancial results, results. Where applicable,thediscussioninthisMD&A of IFRS15hadasignificanteffect onwireless operating of theprioryear’sfinancialinformation. Theadoption on thecumulative effect methodwithout restatement Reporting Standards” inthisMD&A.Adoptionwasbased discussed in“Application of NewInternational Financial Revenue from Contracts withCustomers(IFRS15)as Effective April1,2018, theCorporation adoptedIFRS15 ACCOUNTING DEVELOPMENTS POLICY Corporation uptoMay30, 2019, unlessotherwise stated. to 100of thisreport andincludesinformation availabletothe financial statements andaccompanying notesonpages54 in conjunction withtheCorporation’s auditedconsolidated its subsidiaries.Thisdiscussionandanalysisshouldberead Corporation), includingitsmajorstrategic businessunitsand Telecommunications HoldingCorporation (SaskTel orthe financial position,and results of operations of Saskatchewan focuses onthestrategies, businessoperations, consolidated The following management’sdiscussionandanalysis(MD&A) INTRODUCTION forward-looking statements mayornotoccur. Given theseuncertainties, assumptionscontained inthe performance; competition andregulatory environment. LOYALTY INTHECANADIANINDUSTRY. OF MARKETSHAREANDCUSTOMER ACHIEVED SOMEOFTHEHIGHESTLEVELS TWO OFTHEREASONSWHY WEHAVE ARE IMPORTANT TO SASKTEL—JUST AND OURWORLD-CLASS WORKFORCE POPULATION. CUSTOMER RELATIONSHIPS THAT COVERS 99%OFTHEPROVINCE’S SUCH ASOUR4GLTE WIRELESSSERVICE FOR THEPEOPLE OFSASKATCHEWAN, THE EXTENSIVEINVESTMENTS WEMAKE AND SOLUTIONS. WEAREPROUDOF INFORMATION TECHNOLOGY SERVICES INTERNET, ENTERTAINMENT, SECURITY, AND FOR ADVANCED COMMUNICATIONS, SASKTEL ISSASKATCHEWAN’S HOMETEAM BUSINESS OUR • and services inSaskatchewan, including: of communications andinformation technologyproducts SaskTel anditssubsidiariesoffer thewidestbreadth Saskatchewan’s largest employers. 3,700 full-timeequivalents(FTEs),makingSaskTel oneof the world.TheHoldco hasaworkforce of approximately and solutionstocustomersinSaskatchewan andaround SaskTel International) offer awidearray of products, services, wholly-owned subsidiaries(SaskTel, Directwest, SecurTek, and Saskatchewan Crown corporation. TheHoldingCorporation’s Saskatchewan Telecommunications HoldingCorporation isa Holding Corporation Saskatchewan Telecommunications

high speed data services in Saskatchewan high speeddata services inSaskatchewan networks deliverhigh-qualityand reliable voice and Generation (4G)andLong-Term Evolution (LTE) wireless Wir Your Life. Connected. eless services delivered onworld-classFourth ™

SASKTEL 2018/19 ANNUAL REPORT | 21

tion 5G t are fuelling innovation t are e emphasis on enhanced e adopting more extensive customer self-serve e adopting more easing customer expectations for service when, where, when, where, service for easing customer expectations e builds across the country continue to provide faster to provide continue the country e builds across oadband is an essential service as data demand as data oadband is an essential service and how they want it Br exponentially to grow continues Major investments being made in next genera speeds, lower faster wireless networks, facilitating wireless Things (IoT) of and enabling the Internet latency, Fibr Rapidly changing technologies tha  Rapidly changing technologies and disruption Incr Competitors placing mor customer experience Carriers ar automation levels of options and increasing and provide consumption, data speeds, enable greater the backbone for 5Gthe backbone for

• • • OUR INDUSTRY AN EXCITING IN COMPETES SASKTEL INDUSTRY. CHANGING AND CONSTANTLY ARE TECHNOLOGIES CUTTING-EDGE OF DOING WAYS NEW PROVIDING BETTER, CUSTOMERS BUSINESS—SERVING NEW PRODUCTS RAPIDLY, PROVIDING SPEEDS. FASTER AND OFFERING and IndustryThe Business Environment Trends (ICT) Technology and Communications The Information of: a result as transformation constant of industry is in a state • • • •

cess network throughout both urban network throughout cess omprehensive fixed wireless rural wireless fixed omprehensive ta centre footprint and service capabilities and service footprint ta centre service in Emerald Park, Estevan, in Emerald service infiNET Tek commercial and residential security monitoring, and residential commercial Tek Tel International software and consulting solutions for and consulting software International Tel Tel selectWI-FI access at over 5,000 access pointsaccess over 5,000 at access selectWI-FI Tel TV Stream — new streaming TV service that allows that service TV — new streaming TV Stream TV service — extensive Internet Protocol television — extensive Internet Protocol TV service omplementary portfolio of cloud-based of omplementary portfolio ectwest marketing services ectwest marketing ofessional and consulting services and consulting ofessional worker services worker Sask worldwide providers service communications communications and information technology services and information communications Dir Secur smartHOME, and SaskTel control, including access well as medical alert and lone as interactive services, A c Pr customers to watch live or streamed content anywhere anywhere content live or streamed customers to watch Ubiquitous local ac Expansive da max broadband access network access broadband the province throughout max the province (IPTV) throughout footprint in Canada and rural Saskatchewan Sask Martensville, Moose Jaw, Prince Albert, Regina, Rosthern, Regina, Albert, Prince Jaw, Moose Martensville, Warman, The Battlefords, Current, Swift Saskatoon, speeds enabling and Yorkton, White City, Weyburn, — c fusion Internet SaskTel SaskTel of up to 300 Mbps up to 300 of

• internet 282,000 network accesses, wireline 338,000 subscribers. service maxTV and over 112,000 accesses, SaskTel is highly competitive, achieving over $1.2 billion is highly competitive, SaskTel and just over 1.3 million customer in annual revenue accesses, wireless over 609,000 including connections, • • • • • • • • • • • 22 | MANAGEMENT’S DISCUSSION AND ANALYSIS 3 2 1 transform tomaintaintheircompetitiveness. move inanagilemannerwillberewarded. Companiesmust carefully andwithoutcomplacency. Theabilitytoadaptand and opportunitiesthat service providers willneedtonavigate The current businessenvironment presents manychallenges • • • • • • ompanies investinginData OverCableService • • Sources: TheConference Board of Canada;Statistics Canada. Complete dataset canbeaccessed one-Data. Area torightof boldedvertical bar represents forecast data; italics indicate percentage change. Conference Board of Canada,“Canadian Industrial Outlook:Telecommunications” Autumn2018, p.12. Conference Board of Canada,“Canadian Industrial Outlook:Telecommunications” Autumn2018, p.12. Conference Board of Canada,“Canadian Industrial Outlook:Telecommunications” Autumn2018, p.2. Real GDP(2007$millions) Employment (000s) Price index(2007=100) Revenue ($millions) Costs ($millions) Profits ($millions) Profit margin(percent)

for wireless networkequipment Geo-political issuesar P guarded against C streaming services T Lar » » » » » for newproducts, services, and operational effectiveness: of service providers’ business,providing opportunities So Amazon’s Alexa while integrating thesewithhomeassistantssuchas home automation, andsecuritymonitoringproducts Carriers ar investing infibre it criticalfor companies suchasSaskTel tocontinue competitive advantageinbroadband speeds,making Interface Specification (DOCSIS)infrastructure togain Cable c are stillsignificant competitors » » » » » elevision consumption habitscontinue tomovetoward ersistent anddisruptiveregulatory change yber securitythreats are increasing andmustbe digital transformation Need f Big da Artificial intelligenc Virtual r function virtualization (NFV) So ftware anddigitalization are penetrating allaspects ge, multinational over-the-top(OTT) service providers ftware-defined networks (SDN)andnetwork ta andanalytics or incumbent firms to undertake or incumbentfirmstoundertake eality andaugmentedreality (VR/AR) e targeting the “whole home” with smart home, e targeting the“wholehome”withsmarthome, e (AI)applications e impacting the supply chain e impactingthesupplychain 0213,2 0413,8 0863,9 1383,0 31,861 31,607 31,358 31,090 30,846 30,585 30,491 30,323 30,271 6076,1 7667,1 2027,9 4377,5 76,745 75,554 74,397 73,197 72,052 70,717 67,626 66,910 66,047 7265,2 8306,7 3276,6 5586,4 67,711 66,647 65,578 64,465 63,297 61,379 58,320 58,127 57,236 3. 3. 1. 2. 2. 2. 2. 2. 121.4 122.4 123.4 124.4 125.3 122.5 111.7 131.4 139.4 ,1 ,9 ,0 ,3 ,5 ,7 ,1 ,0 9,034 8,907 8,819 9,372 8,755 9,338 9,306 8,794 8,811 0521 0721 0922 0122 2023 2022 2021 2020 2019 2018 2017 2016 2015 . . -15.0 -5.7 - 3.9 10.0 331. 381. 221. 191. 11.8 11.8 11.9 11.9 12.2 13.2 13.8 13.1 13.3 1 1 1 1 1 1 1 1 119 119 117 116 115 114 113 112 111 ...... 0.8 0.8 0.9 0.8 0.9 0.3 0.6 0.2 0.1 ...... 0.8 0.8 0.8 0.8 1.1 0.9 0.3 0.8 1.0 ...... 1.6 1.6 1.6 1.6 1.9 4.6 1.1 1.3 1.9 ...... 1.6 1.6 1.7 1.8 3.1 5.2 0.3 1.6 0.8

- 0.3

Key Indicators . 0.3 5.9 at around 2.5%. revenue growth overthepastfiveyearshasbeenmodest profitable businessesinCanada, compound annual While communications services remain oneof themost • • • • • profits of over$9billion,andemploying111,000 people. Canadian economy, generating revenue of over$67billion, Communications Services isamajorsectorwithinthe The Communications ServicesSector Sectoral Breakdown The sectorcontinues tobecharacterized by: Wireline voice16 Broadcasting distribution15 Data andprivateline Sources: StatisticsCanada;TheConference BoardofCanada.

2018/19 SectoralBreakdown

impact performance andoperations The sectorishighlyr Households ac accounting for more than40%of revenue Wir providers service providers are three timesascapitalintensiveother A highlevelo throughout thecountry players, supplementedbyseveralplayersinregions A highdegr . 2.2 9.7 eless services represent thesector’slargest segment, . -0.3 - 6.2 ee of concentration withthree large national .9 3 % f capital intensity—communications service f capitalintensity—communications service

8. count for more thanhalfof sectorrevenue 5% (share of revenue 2016, percent) .6 egulated, and policy decisions can egulated, andpolicydecisionscan . . . -0.8 -0.8 -0.8 - 0.7 % . . 1.4 1.0 1.0 2 Wir Internet 17

eless 41

.6 .4 % % 1

SASKTEL 2018/19 ANNUAL REPORT | 23

orce ovince’s natural resource strengths strengths resource natural ovince’s ontinues to be committed to theontinues to be committed frastructure ompetitiveness easing export trade Investing in in Developing a skilled workf Ensuring c Incr Advancing the pr Maintaining sound fiscal management through innovation through

2. 3. 5. The government c has ongoing . SaskTel Growth Plan for Saskatchewan government priorities and discussions with CIC regarding investments in aligns itself to them. SaskTel’s how SaskTel to and its attention the province throughout infrastructure receive of alignment that areas are two efficiency operational ongoing alignment, CIC’s ensure To focus. considerable Plan and receives annual Strategic SaskTel’s approves Board quarterly. updates performance goals themes, and strategic vision, mission, core SaskTel’s and management Directors of developed by the Board were in mind. direction with the shareholder’s STRATEGIC DIRECTION THEIR TO CUSTOMERS CONNECTING OUR ADVANCED THROUGH WORLD BROADBAND AND COMPREHENSIVE SASKATCHEWAN. THROUGHOUT NETWORKS ADAPT TO OUR COMPANY TRANSFORMING AND MARKET. INDUSTRY A CHANGING TO FOCUS IN THESE AREAS OUR STRATEGIC FULFILL SASKTEL TO HAS POSITIONED OUR MOST IMPORTANT THE NEEDS OF PEOPLE STAKEHOLDERS—THE OF SASKATCHEWAN. Alignment to Our Shareholder of the Province of corporation is a Crown SaskTel the marketplace, to the needs of In addition Saskatchewan. is guided by the direction strategic overall the company’s government. the provincial priorities of the In September 2012, the government released Vision 2020 and Beyond. Growth: Plan for Saskatchewan framework forThis multi-year plan serves as the governing growth- Six core the province. development of the future which all outlined in the plan, to oriented priorities were expected are corporations Crown Saskatchewan to contribute: 1. 4. 6. 4 1.3 4.1 2.4 4.9 14.1 13.3 22.7 COGECO SaskTel BCE Rogers Communications Shaw Communications Quebecor) (part of Videotron TELUS Conference Board of Canada, “Canadian Industrial Outlook: Telecommunications” Autumn 2018, p. 6. Autumn 2018, Industrial Outlook: Telecommunications” Canada, “Canadian of Board Conference 4 The Software and Computer Services Sector The Software more technology becoming and computer With software and services, equipment embedded within communications once were between what is accelerating convergence and distinct sectors and technologies. Serviceseparate data commercial now operate such as SaskTel providers and technology products, information provide centres, opportunities This provides services. consulting professional It also increases and services. new products the delivery of for globally. locally and competition—both the level of The timing of 5G network rollouts are also contingent on two also contingent are rollouts 5G network The timing of in 2019 (600 MHz) andspectrum auctions, one taking place the widespread MHz). This implies that one in 2020 (3,500 until place will not take 5G networks in Canada of rollout on investment in these return the earliest, making 2020 at the short term. in upgraded networks only partially realizable and the capital investment required with the This, combined up, will weigh on prices to move providers inability of current in the medium term. providers of service margins the profit While Canada lags many other developed nations in the nations While Canada lags many other developed starting to make are providers 5G networks, service of rollout 5G—which significant investments in this new technology. and faster lower latency, will have a far superior capacity, to networks—is designed speeds than existing wireless the breakthrough many of the capabilities needed for provide years, such made headlines in recent have technologies that as self-driving cars and smart cities. The development of 5G wireless networks and the increasing the increasing networks and 5G wireless The development of (M2M) applications, and machine-to-machine IoT number of security smartHOME and SaskTel’s home devices, connected increase in a considerable will result and monitoring services, traffic.in data Sources: The Conference Board of Canada; Financial Post 500. Financial Post Canada; of Board The Conference Sources: TOP COMPANIES TOP billions) $ (revenue; 24 | MANAGEMENT’S DISCUSSION AND ANALYSIS  next severalyearswillbeacritical component. achieving this.Theeventualrollout of our5Gnetwork overthe fibr low latency, and aseamlesscustomerexperience. Mobile, in themostplaces, withthehighestspeeds,minimaldowntime, facilitate thisbyproviding thebestnetworksinSaskatchewan— and services that haven’tevenbeenimaginedyet.SaskTel will smart assistants,autonomousvehicles,andnewproducts intelligence, virtualandaugmentedreality, smarthomes, the emergence of newtechnologiesandapplications—artificial The needfor increases in broadband speeds isbeingdrivenby especially f significantly more. Faster uploadspeedswillalsobe critical, download speeds,withmanyhouseholdsrequiring average householdwillrequire aminimumof 25Mbps bandwidth consumption. By2022,itisexpectedthat the br rural andurbancustomersrequire consistent andhigh-quality and wireless networks.Throughout Saskatchewan, both 80 Mbpstohouseholdsandbusinessesviabothwireline speeds of upto300Mbpsanduploadspeedsof upto Our focus onbroadband willprovide increased download implement solutionsandmanagecomplexity. and provide professional services that willhelpcustomers managed services that willrunoverourbroadband networks, existing products, developnewIP-basedproducts and experience, developdeepercustomerinsights,evolveour success, SaskTel willdeliveranoutstandingcustomer While br throughout Saskatchewan. state-of-the-art networkcapabilitiesandcoverage our changingindustry. SaskTel willcontinue toimplement long-term growth that wewillfocus onaswenavigate mobile). Thisrepresents thesingle-largest driverof sustainable centers around ourNorthStar—broadband accesses (fixed and In linewiththechangingbusinessenvironment, SaskTel’s future SaskTel’s Future State Our Vision,Mission,andValues oadband connections toservice theirever-increasing e, fixed wireless, andDSLtechnologieswillallplaya role in and applications. and exceptional advanced service, solutions, experience through networks, superior our VALUES : MISSION VISION people to their world. oadband provides thefoundation for ourfuture or businessesandsomeconsumer niches. : :

To at connecting best the be Honesty, Integrity, Respect. and

To provide customer best the

to provide thebestexperiencepossible. customer experience. do businesswithusandeasyfor ourpeopletoprovide agreat to Transformation willbefacilitated through theuseof technology delivery tothepeopleof Saskatchewan. sustainability andtheachievementof high-qualityservice change withintheCrown sectorthat willfacilitate financial government, giventheirstated desire for transformational Transformation isalsoimportantfrom theperspectiveof the and optimize thecompany’s cost structure. services andrevenue streams, enhance customer experience, its agilityinthemarket, create opportunitiestodevelopnew Success with transformation willallowSaskTel toincrease intensely onthesinglecore strategic themeof Transformation. These factorsare creating theneedfor SaskTel tofocus more online experience. selection, fulfillmentspeed,customersupport,andafrictionless global companies raisingexpectations withrespect toproduct Customer experience isnowbeingsetat ahigherlevelby continuously improve howitinterfaces withandservesthem. Customers havemore choice thanever, andSaskTel needsto • • • • technology isresulting in: digital era.Rapidlyevolvingcommunications andinformation It allstartswiththecustomer—astheycontinue toembrace the Core Theme:Transformation it. Ourcustomersexpectnolessandwear set clearexpectations, andifthingsgowrong, ownitandfix encounter—treat customerswell,doitright,make iteasy, experience. by astrong focus ondeliveringanoutstandingcustomer new technologiesandservices mustalsobeaccompanied All o

consumer behaviours V of allshapesandsizes The emer F Disruptions toourindustry’sec to modernize ourbusiness,makingiteasyfor customersto alling barrierstomarket entry astly expanded consumer choice and changing astly expandedconsumer choice andchanging f theseimprovements inbroadband speedsandenabling SaskTel deliversapositiveexperienceonevery gence of non-traditional competitors gence of non-traditionalcompetitors onomics e prepared e prepared

SASKTEL 2018/19 ANNUAL REPORT | 25

celerate transformation celerate ow revenue and profit and profit ow revenue Ac  to an ICT provider Gr from the business market from  Deliver an outstanding customer experience 5. 5. 1. penetration broadband 2. Increase services of on breadth Capitalize 3. 4. The following sections outline these goals along withThe following each toward been accomplished have achievements that 2018/19. to the end of through through 2018/19: through Strategic Goals Strategic the challenges and state future desired with our In line SaskTel’s is presenting, the industry that and opportunities five distinct, identified Directors of and Board management yet interrelated strategic goals to guide the company goals to guide the strategic yet interrelated 26 | MANAGEMENT’S DISCUSSION AND ANALYSIS • • • • • • • • • 2018/19 ACHIEVEMENTS

all of ourcustomer service channels Extended digital cha Bill Analyzer into theirbillswithournewBusiness Pr customer needs aimed at improving insightsinto intelligence andanalyticscapabilities, Continued toevolveourbusiness eChannel throughout theyear Experienc Completed mySASKTELmobileappr » » » » » » First program: best practice CustomerExperience (CX) Continued toimplementourindustry Care Study 2018 CanadianWireless Customer Sask received thisrecognition Satisfaction Study, thesixthconsecutive yearSaskTel Sask network providers identifies SaskTel tobe “among thebest”in Canadian Network QualityStudyintheWest. Inthestudy, J.D. Power Sask » » » » » » to make Saskatchewan abetterplace for everyone. to provide thecommunications, entertainment,andinformation technologyservices that ourcustomersneed,helping outstanding customerexperience. relationships, wetake great prideinknowingwhat ourcustomersvalueandindesigningdeliveringaconsistently Serving thecustomerisingrainedineveryfacet of SaskTel. Asemployeesof alocalcompanythat hasdeepcustomer after-sales experience. to-end customerexperience startswithinitialcustomercontact, through toapotentialsale,andculminating inthe improvement inhow SaskTel deliversservices andinteractswithitscustomers.Thedeliveryof anoutstandingend- Increasing customer expectations for speed,simplicity, andself-managementoptionsdrivestheneedfor continuous ovided businesseswithgreater insights in oursupportchannels Incr and reliability Impr Impr sales channel Impr to thePremises (FTTP)program Impr Wi-Fi experience Impr Tel ranked second intheJ.D. Power Tel ranked firstinthe J.D. Power 2018TVandInternet Tel ranked firstinthe J.D. Power 2018CanadaWireless eased First Contact Resolution eased FirstContactResolution oved self-serve delivery oved self-servedelivery oved topproduct satisfaction drivers oved topCXdriversineach oved customerservice intheFibre ovements madetothein-home ed increases intheuseof our DELIVER AN OUTSTANDING CUSTOMER AN EXPERIENCEDELIVER t capabilitiesacross

We are ambassadorslivingincommunities throughout Saskatchewan andare proud

efresh

NORTH BAN • •

IN SERVICEAS OFMARCH31,2019 50 communities, with41 more plannedfor 2019/20 Enhanc and theabilitytomake purchases/upgrades experience withrespect todetermininginternational rates roaming toolon sasktel.com, improving thecustomer Enhanc TT LEFORD SMALL CELL SITES ed wireless LTE cellular services inthefollowing ements were completed totheinternational

SASKTEL 2018/19 ANNUAL REPORT | 27

Theodore Unity Wadena Waldheim Waskesiu Watson White Fox Wilkie Willow Bunch Wolseley Creek Yellow Waterhen Lake Waterhen Waterhen First Nation Waterhen Wadin Bay Wadin Plenty Plain Porcupine Qu’Appelle Beach Regina Viscount RocanvilleSt. Brieux Wapella Sheho Springside Star City Tantallon Young Stony Rapids Sled Lake La Ronge Indian Band La Ronge Loon Lake Loon Lumsden Margo Rama Maryfield Meacham Middle Lake Moosomin Sedley Muenster ShellbrookNaicam Spalding Paddockwood Whitewood Perdue Stockholm TV Stream has resulted in more speed upgrades in more has resulted TV Stream eased internet speeds in all of these rural communities these rural in all of eased internet speeds ta enhancements were completed in the wireless in the wireless completed were ta enhancements Incr the new maxTV the launch of for laid the foundation service Stream max Da portfolio prepaid and new internet connections were made available were and new internet connections

ed Earth First Nation River 156C—Lac Sucker • • • Kinistino Kinookimaw Lintlaw Lipton Kyle Lafleche Lenore Lake Marengo Landis Lanigan Leask Lebret Lemberg Osler Poundmaker Cree Cree Poundmaker Nation Patuanak St. George’s HillSt. George’s First Nation Sweetgrass Nekaneet First Nation Nation Cree Shoal Lake Lake Turnor R

Hague Harris HepburnHoldfast Hudson Bay Laird Veregin Lake Indian Head Jansen Kelliher Kelvington LeRoy La Ronge 156 –La Ronge Kinistin Saulteaux Nation Jans Bay Missinipe Grandmother’s Bay 219—Lac La Ronge Indian Band Indian Band Lac La Ronge e was launched Debden Dorintosh Grenfell Duck Lake GuernseyEatonia Elfros Kronau Elrose Eston Fort Qu’Appelle Goodeve e was launched in 120 t work together seamlessly INCREASE BROADBAND PENETRATION INCREASE BROADBAND English River First Nation Dore Lake Dore Dakota Nation Dakota Fond Du Lac Denesuline Nation Clearwater River Dene Clearwater Nation , controls, and security , controls, Brock Brock Buena Vista River Carrot Central Butte Christopher Lake Cole Bay Colonsay Coronach Craik Francis tic use of the best network for customers’ needs and location the best network for tic use of frastructure build continued in the major centres, build continued frastructure service is coming to Humboldt, is coming service infiNET ed that Multiple networks tha Automa Built-in quality

• • • As customers’ consumption of online content continues to increase, fixed and mobile broadband access services have services access broadband and mobile fixed to increase, continues content online of consumption As customers’ as to customers as important become has now access broadband reliable and lives. Fast to their indispensable become was. once service local landline by: characterized the future, of service core envisioned as SaskTel’s is intelligent broadband Secure, in 29 additional Indigenous and northern communities in 29 additional Indigenous and northern additional rural communities interNET Extended 25 servic with expansion to communities outside the majors, outside the with expansion to communities Melville, Nipawin, and Tisdale Melfort, interNET Extended 5 and 10 Mbps servic Announc Our FTTP in including Emerald Park, Martensville, Warman, and White White and including Emerald Park, Martensville, Warman, up to 300 Mbps enabling speeds of City, Brabant Lake Black Lake DenesulineBlack Lake Nation Birch Narrows Dene Narrows Birch Nation Buffalo River Dene Nation Allan Alsask AnnaheimArborfieldAsquith Canwood Assiniboia Caronport Balcarres Drake Balgonie Beauval Bethune Codette Big River Biggar Coleville Hills Birch Englefeld Bjorkdale Flaxcombe Imperial Dalmeny Ituna Gravelbourg Kerrobert Lestock interNET Extended 25 service was launched in 120 additional rural communities Abernethy Broadview Davidson Grayson interNET Extended in 29 additional Indigenous and northern communities Bear Creek

• • 2018/19 ACHIEVEMENTS • • 28 | MANAGEMENT’S DISCUSSION AND ANALYSIS • • • • 2018/19 ACHIEVEMENTS

and Saskatchewan Rushgames Saskatchewan Roughriders gamereplays maxTV service withondemand Enhanc Comedy Go Global, Discovery Go,Space Go,Bravo including: BNNBloomberg, CTVNews, Seven newmax but across Canada on multipledevices notonlywithinSaskatchewan service subscribers,allowingthemtoaccess theircontent The max from services suchasCrave,Netflix,and YouTube the maxTV app,alongwiththelatest over-the-topcontent content bundledwithnewfeatures suchasRestart TVand our televisionservice reach withthebestof traditional The newmax able todo. services toworkseamlesslyacross alldevices andnetworks;somethingnootherservice provider inSaskatchewan is SaskTel provides greater valuetocustomersbyemployingourmultiplenetworks todeliveraunifiedexperience, enabling together toprovide totalsolutionsfor selectsegmentsinbothourconsumer andbusinessmarkets. evolving needsof ourcustomers.To capitalize onourbreadth of services, SaskTel willcontinue tobundleservices services, alongwithevolvingourexistingproduct portfolio, providing up-to-date products andservices that meetthe provider inSaskatchewan. SaskTel willcontinue tofocus efforts ontheintroduction of newmanagedandemerging SaskTel, togetherwithitssubsidiariesandbusinesspartners,offers thewidestbreadth of services of anyservice ed localcontent offerings for TV appwasmadeavailabletoexistingmaxTV TV Stream service waslaunched,expanding TV GOappswere launched, CAPITALIZE SERVICES OF BREADTH ON

max NORTH BANO • • •

By theendo with competitors in bothprepaid andpostpaidwireless plans,onpar Impr R in 145 communities, withmore plannedin2019/2 top-ups toaddmore valuetowireless shareMORE plans TV STREAM AVAILABILITY STREAM TV TT ealigned pricingandprovided newdata add-onsand LEFORD oved international roaming andlongdistance rates AS OFMARCH 31,2019 f 2018/19, maxTV Stream wasmadeavailable 0

SASKTEL 2018/19 ANNUAL REPORT | 29

ow, SaskTel was recognized was recognized SaskTel ow, elationships with third party sales with third elationships ted Business Communications (IBC)ted Business Communications onsecutive year, SaskTel was named SaskTel onsecutive year, f maxTV Stream represented a significant represented Stream f maxTV Tel was recognized as one of Achievers 50 Most one of as was recognized Tel Canada’s earned a spot on the list of Tel Tel was mentioned in the Forbes 2019 Canada’s was mentioned in the Forbes Tel Canada’s Best Diversity was named one of Tel orked closely with our business customers in the creation closely with our business customers in the creation orked Continued to develop r channels within and outside Saskatchewan Launched our Integra W solutions new IoT of product out-of-province product top 50 employers in North America that display leadershiptop 50 employers in North America that employees and workplaces in engaging and innovation milestone in SaskTel’s evolution away from traditional evolution away from milestone in SaskTel’s over-the-top services to new, services Employers by Mediacorp Top Saskatchewan’s as one of Sask Best Employers list For the seventh year in a r People Young Employers for Canada’s Top as one of in Canada by Mediacorp Sask Sask in North America, honouring the Engaged Workplaces Sask The launch o For the thirteenth c Mediacorp year by the ninth consecutive Employers for 100 Employers Top

• • • • • • • • • • ed sales and contact centre tools for centre ed sales and contact f enhancing and improving internal systems f enhancing and improving tion of a new internet, cloud-based customer a new internet, tion of gence of non-traditional competitors that are disrupting traditional lines of business disrupting traditional lines of are that competitors non-traditional of gence ACCELERATE TRANSFORMATION TO ANICT TO PROVIDER TRANSFORMATION ACCELERATE eased consumer choice eased consumer eshaping of the industry’s economics (e.g., greater rewards to scale, scope, and speed; downward pressure pressure downward and speed; scope, to scale, rewards (e.g., greater the industry’s economics eshaping of alling barriers to market entryalling barriers to market , more agile service development methodology was development agile service , more on cost structures) structures) on cost F Emer Incr A r GROW REVENUE AND PROFIT FROM THE BUSINESS MARKET BUSINESS THE FROM PROFIT AND REVENUE GROW ong focus on digital transformation was established, on digital transformation ong focus

Tel’s Tier III Data Centres in Saskatoon and east of in Saskatoon Centres Tier III Data Tel’s • • • • ofessional services provided technology expertise provided services ofessional Continuing to make inroads in the business market is critical to SaskTel’s future. There are opportunities for end-to-end opportunities for are There future. is critical to SaskTel’s in the business market inroads Continuing to make in addition to our existing services (both IT-based managed and emerging and services business products delivery of beyond Saskatchewan. home and in select markets to our customers both at services) communications of portfolio The disruptions that these technological changes are unleashing show no signs of slowing. As a result, firms within our firms within slowing. As a result, unleashing show no signs of changes are these technological The disruptions that that is taking steps to ensure and how they do business. SaskTel both their offerings transform industry must proactively taking place. are that in line with the transformations our evolution as a company we accelerate Accelerating changes to communications and information technologies are resulting in: resulting are technologies and information to communications changes Accelerating Implemented enhanc Pr Sask and security assessments and digital network, IT, through investigations forensics Regina continued to attract customers that operate in operate customers that to attract continued Regina and internationally nationally, Saskatchewan, serving business customers A new putting in place a framework for the areas of focus that will that focus of the areas for a framework putting in place does business—making it easier how SaskTel modernize our our customers to do business with us and for for employees to do their work problem collaboration, adopted in which we do more with customers and businesssolving, and experimentation meet their needs partners to build capabilities that A str Implementa relationship management (CRM) tool management (CRM) relationship The journey o and processes aimed at achieving greater operational achieving greater aimed at and processes There continued in 2018/19. and speed agility, flexibility, on the focus strong again a particularly was once self-serve capabilities customer development of

• 2018/19 ACHIEVEMENTS • • • • 2018/19 ACHIEVEMENTS • • 30 | MANAGEMENT’S DISCUSSION AND ANALYSIS upcoming year, SaskTel willfocus onthefollowing fivestrategic goals: coupled withchangesinourbusinessenvironment andalignmenttotheCrown SectorStrategic Priorities(CSSPs).Duringthe SaskTel’s Board of Directors andmanagementupdated ourstrategic goalsbasedonprogress madeonourprevious goals, SaskTel continually reviews andassessesitsoverallstrategic direction andperformance toward achievingitsVision.For2019/20, 2019/20 Strategic Direction andGoals be vitaltolong-termsustainability. development of newrevenue sources will financial management of costs andthe pressures throughout ourindustry. Strong change continue tocreate financial economic conditions, andregulatory behaviour, rapidlyadvancing technology, Increasing competition, evolvingconsumer Sustainability Maximize Long-Term Financial and responsive toourcustomers. business willmake SaskTel more agile systems, skills,andhowweviewour and modernizingourprocesses, policies, deal withthisdisruption.Reinvigorating transformation isameanstoeffectively businesses throughout theworld.Digital is along-termmegatrend, impacting Disruption drivenbydigitaltechnologies Transformation Reinvigorate SaskTel Through Digital future success. environment. Ourworkforce iscriticalto to staycompetitive inachangingbusiness combined withstrong judgmentisrequired New, cutting-edgeskillsandknowledge empowered, high-performance workforce. SaskTel’s long-termsuccess isdrivenbyan Empower aHigh- will keep SaskTel competitive. to create acustomerexperience that customer expectations willallowus experience. Constantlylivingupto ensuring anoutstandingcustomer everything SaskTel doesiscriticalto Putting customersat thecenter of Experience Deliver anOutstandingCustomer our future success. and higherspeeds.Broadband iscriticalto demand for newaccesses, highercapacity, of ourcustomers,resulting ingrowing Broadband isindispensableinthelives mobile, isSaskTel’s core service. Broadband access, whetherfixed or Lead theMarket inBroadband Services Strategic Goal Performance Workforce

• • • • • • • • • • • • • • • • • •

low-value activities customer service to deliverproactive andpersonalized data analytics,artificialintelligence) technologies (businessintelligence, self-management capabilities customer self-serveand broadband services customer experience for our throughout Saskatchewan on bothourfixed andmobilenetworks infrastructure investments sources of revenue and innovation Stimula digital technologies work through theadoptionof new Simplifica business withus Mak development andrecruitment Enhanc remove obstacles Simplifica new ideasandimprove thebusiness of employeesat alllevelstodevelop L Empowering mor Utiliza Continuing investmentsin quality outc Doing thingsrightthefirsttime—deliver Impr Pr and lowerlatency to provide increased coverage, capacity, F Pr W Ensur Drive ac Continued developmento decision making urther developingourmobilenetworks everaging theknowledgeandskills ork toidentifyandreduce oviding anoutstandingend-to-end oviding enhanced broadband speeds e iteasierfor customerstodo oving in-homeWi-Fiexperience e solidreturns onour tion of advanced new te aculture of change e capabilitiesthrough skills ompetitive cost structure tion andacceleration of our tion of thebusinessto omes onthefirst attempt Focus Area e timely, agile f new

• • • • • • • • • • • • • • • • • • • • • •

Financial Sustainability T Customer Focus Financial Sustainability Prioritiz Priva T Customer Focus T Prioritiz Priva Customer Focus Financial Sustainability Skilled LabourFor Priva Financial Sustainability Prioritiz Customer Focus T T Customer Focus Skilled LabourFor echnology andInnovation echnology andInnovation echnology andInnovation echnology andInnovation echnology andInnovation te SectorEngagement te SectorEngagement te SectorEngagement e Investments e Investments e Investments CSSP Alignment ce ce SASKTEL 2018/19 ANNUAL REPORT | 31

tisfaction earning and Growth Employee Engagement L Customer Sa

• Ensures that SaskTel monitors the degree to which the company is meeting its customers’ expectations. to which the company monitors the degree SaskTel that Ensures include: Customer measures • its is engaged and is also developing workforce to which its is measuring the degree SaskTel that Ensures critical to delivering its services areas in key performance can assess its operational SaskTel that Ensures include: measures Excellence Operational efficiency. operational levels of and improving Execution to the Premises • Fibre • Network Advancements • Self-Serve • Efficiency and is achieving the financial its financial performance elements of is monitoring key SaskTel that Ensures include: Plan. Financial measures goals outlined in its Strategic Value • Shareholder • Revenue • Net Income • Capital skills and capabilities to align with evolving business requirements. People measures include: measures People requirements. skills and capabilities to align with evolving business • Operational Excellence Operational Financial Customer People BALANCED SCORECARD Balanced Scorecard Perspectives SummaryBalanced Scorecard With the evolution of the company’s strategic direction, several new indicators have been introduced for 2019/20. 2019/20. for have been introduced several new indicators direction, strategic the company’s With the evolution of SaskTel uses a balanced scorecard to monitor and measure performance in four perspectives critical to the company’s long- perspectives critical to the company’s in four performance and measure to monitor scorecard a balanced uses SaskTel within the (KSMs) found Measures Success and Financial. The Key Excellence, Operational People, Customer, term success: The KSMs enable looks like. success the company’s describe what and quantitatively strategy align to corporate scorecard each balanced for Targets as required. adjustments goals and make our strategic toward progress management to track internal stakeholder involves that process a rigorous by management through developed and vetted are measure scorecard and and results, measures of measuring, historical reviews others in the industry are to what checks, external comparisons scorecard the balanced approve and the CIC Board Board Both SaskTel’s measures. key for alignment to CIC directives basis. on a quarterly annually and monitor results measures PERFORMANCE MANAGEMENTPERFORMANCE TO RESPONSIBLE SASKTEL IS FUNDAMENTALLY CORPORATION, AS A CROWN OUR TO FINANCIAL RETURNS AND STRONG SERVICES EXCEPTIONAL PROVIDE THIS IS THAT ENSURE TO OF SASKATCHEWAN. PEOPLE SHAREHOLDERS—THE PERFORMANCE COMPANY’S THE MONITORS REGULARLY SASKTEL ACHIEVED, INDICATORS. OF BALANCED SCORECARD THROUGH A SET 32 | MANAGEMENT’S DISCUSSION AND ANALYSIS ● directly alignSaskTel’s newstrategic goalof empowering ahigh-performance workforce. employees are withtheirongoingskillsevolutionandpersonaldevelopment.Bothmeasures are relevant for 2019/20asthey highly competitive industrycharacterized byrapidlychangingtechnology. Itistherefore importanttomeasure howconfident and higherlevelsof customerexperience. Learning andgrowth isalsoacriticalindicator giventhat SaskTel operates ina and intellectualconnection totheirjob,organization, manager, orco-workers that, inturn,leadstoadditionalcommitment is acriticalindicator for SaskTel todetermineonanannualbasis—engagementisaproven measure of employees’emotional relationship wasestablishedin2017/18, whichresulted inanewbaselineresult for theseindicators. Employeeengagement results for bothmeasures are provided bydata collected through ourannualemployeesurvey. Anewmethodologyandvendor People measures for 2018/19were focused ontwospecificmeasures: employeeengagement,andlearninggrowth. The PEOPLE PERSPECTIVE improvement of 1%aboveour2018/19scores in boththeconsumer andbusinessindicators. Through ourongoingcommitment todeliveringanoutstandingcustomerexperience, in2019/20weare targeting an our customerexperience score by0.1 abovethe2017/18result. experience intheconsumer market proved tobechallenging.Forthebusinessmarket, weachievedourtarget of improving below ourtarget of a0.1 score improvement. Givenhighcustomerdemandfor service, achievinggrowth incustomer In 2018/19, wemaintainedourcustomerexperience result achievedin2017/18for theconsumer market, whichisslightly Customer Satisfaction Performance ● established in2016/17. perceived satisfaction, whetherornotacustomerhaddirect experience withus.Baselinesfor thesenewindicators were measure of customers’direct experiences withSaskTel. Previous customersatisfaction measures were basedonoverall primary customersatisfaction measures. Customerexperience wasdevelopedandadoptedin2017/18asamore accurate experience. In2018/19, wecontinued tomeasure customerexperience inboththeconsumer andbusinessmarkets asour of ourcustomerservice activitiesandhowwellweare performing onouroverallstrategy of delivering anoutstandingcustomer differentiator for SaskTel. Thecustomerperception indicators found withinthisperspectiveprovide insightintotheeffectiveness 2018/19 customermeasures are once againfocused oncustomersatisfaction, givenitsimportance asacompetitive CUSTOMER PERSPECTIVE Learning andGrowth Employee Engagement Measure Customer Satisfaction Measure BALANCED SCORECARD TARGETS RESULTS AND BALANCED

Achieved Achieved skills evolution Employee perception of mlyeeggmn cr Baselineestablished Employee engagementscore Customer experience –consumer Customer experience –business ● ● • •

Partially achieved Partially achieved ● ●

Not met Not met Baseline established Maintained 2016/17 0.1 above2016/17 071 cul21/9Ata 081 agtRsl 2019/20Target Result 2018/19Target 2018/19 Actual 2017/18 Actual 2019/20Target Result 2018/19Target 2018/19Actual 2017/18 Actual baseline baseline Four percentage Five percentage 2017/18 result 2017/18 result points below points below Maintained 0.1 above One percentage One percentage 2017/18 actual 2017/18 actual 2017/18 result 2017/18 result point above point above 0.1 above 0.1 above ● ● ● ● •

One percentage One percentage 2018/19 result 2018/19 result point above point above 1% above 1% above 2018/19 2018/19

SASKTEL 2018/19 ANNUAL REPORT | 33 cess to at least 10 Mbps fixed broadband least 10 Mbps fixed to at cess broadband least 50 Mbps fixed to at cess ough eChannel counts on eBILL counts Customer ac Customer transactions thr SK homes and businesses with ac SK homes and businesses with ac

• Achieving our targets in these two new indicators will demonstrate that we are delivering what customers want. delivering what we are that will demonstrate in these two new indicators Achieving our targets • As self-serve is quickly becoming the preferred channel for our customers, we are also including two new indicators that will that also including two new indicators are our customers, we for channel the preferred As self-serve is quickly becoming our “deliver an outstanding customer experience” aimed at are that in new customer self-serve initiatives our success measure goal: strategic • to our customers service outstanding broadband in providing success of further measures will supply These indicators speeds. broadband objectives for the CRTC’s working toward we are that and ensure the province throughout • The FTTP program is critical to improvements in our broadband access network, successful positioning versus our competitors, network, successful access broadband in our is critical to improvements The FTTP program goal. Heading into strategic broadband penetration” and delivery on our “increase efficiency, to operational improvements perspective: excellence in the operational indicators including two new broadband-related we are 2019/20, OPERATIONAL EXCELLENCE PERSPECTIVE EXCELLENCE OPERATIONAL operational overall and SaskTel’s our FTTP program of on the execution focused are measures excellence Operational margin The EBITDA margin. (EBITDA) and amortization depreciation, taxes, interest, by earnings before efficiency as measured to be our primary continues It and efficiency. profitability their operational to assess companies used by ratio is a common efficiency. overall operational of measure We continue to believe that our people are SaskTel’s greatest strength as we experience change and further the company’s as we experience strength greatest SaskTel’s people are our to believe that continue We in 2019/20. these indicators in to growth hoping to return are We transformation. We acknowledge and appreciate the feedback that employees provided. The results have been analyzed and action plans have and action plans have been analyzed results The employees provided. that the feedback appreciate acknowledge and We in 2019/20. results and help improve employee responses been developed to address Employee Engagement, and Learning and Growth Performance and Growth and Learning Engagement, Employee in 2017/18, indicators growth and and learning engagement, the employee on both performance our baseline establishing After came in both indicators for results The 2018/19 2019. survey in February its annual employee again conducted once SaskTel four came in at Employee engagement baseline actuals. above the 2017/18 point one percentage of target forecast below our below. points five percentage evolution finished skills of Employee perception below. points percentage 34 | MANAGEMENT’S DISCUSSION AND ANALYSIS *Only reflects results of SaskTel’s Fibre tothePremises program intheninemajor centres. cost management. Going forward, achievingpositive results willcontinue torequire astrong focus on continuous improvement andoperational and equipment that are required tostaycompetitive inourindustry(oneof themost capital-intensiveinCanada). Capital intensityalsocontinues to be acriticalindicator giventhecapital-intensivenature of theinvestmentsinnetworks of Saskatchewan. The netincome indicator continues tobe important toourshareholder asitfundsimproved services tothepeople to assessourperformance inthiscore area of ourbusiness. Consistent withourstrong emphasisonbroadband services, weare introducing for 2019/20thebroadband revenue measure This provides insightintoperformance toward ourstrategic goalof growing revenue andprofit from thebusinessmarket. Revenue indicators provide amacro viewof total revenue alongwith acloserlookat success withthebusinessmarket. our prescribed capitalstructure. measures are criticaltodeterminingifSaskTel istrackingtoward ourshareholders’ expectations for valuecreation, within earnings growth return onequity(ROE);and2)ourratio of totaldebttocapitalization (debtratio). Together, these Our shareholder valueindicators includecommon measures of 1)howwellweare usinginvestmentstogenerate operations, andservice offerings. costs, andprofit margins, andtheneedtomake significantinvestmentsincapital programs that are transforming ournetworks, long-term financialperformance. This focus isimportantgivenindustrychangesthat are placingpressure onSaskTel’s revenue, capital intensity. Allof ourkey financialmeasures are focused onensuringinsightintothe continuous improvement of SaskTel’s The 2018/19financialmeasures highlightSaskTel’s achievement of ourtargets for shareholder value, revenue, net income, and FINANCIAL PERSPECTIVE collaboration, businesssimplification andoperational improvements, andprudentspendingthroughout theyear. Improvements inEBITDA margin performance continues tobearesult of continuous improvement activities,suchasCrown The EBITDA margin isakey proxy for ouroveralloperational efficiency. Once again,wehave exceeded our2018/19 target. EBITDA MarginPerformance homes connected target, withtheremaining homesbooked for installinthefirsttwoweeks of fiscalyear2019/20. 75% duetothecompletion of carry-overworkthat wasinitiated at theendof theprevious year. We alsoachieved96% of our We are verypleasedwiththeresults of ourFTTPprogram in2018/19. We surpassedourtarget for homespassedbyover Execution Performance FTTP ● FTTP Execution* FTTP Measure Network Advancements Self-Serve Efficiency

Achieved (with IFRS15impacts) EBITDA margin Number of homespassed fixed broadband access toat least10Mbps SK homesandbusinesseswith Number of homesconnected fixed broadband access toat least50Mbps SK homesandbusinesseswith through eChannel Customer transactions Customer accounts oneBILL EBITDA margin ● •

Partially achieved ●

Not met 071 cul21/9Ata 081 agtRsl 2019/20Target Result 2018/19Target 2018/19Actual 2017/18 Actual 16,367 20,358 28.1% N/A New indicator for 2019/20 New indicator for 2019/20 New indicator for 2019/20 New indicator for 2019/20 32,988 19,377 27.6% 29.5% 18,763 20,135 29.2% N/A / 29.0% N/A ● ● ● •

226,737 347,000 10,156 14,839 98.0% 50.0%

N/A

SASKTEL 2018/19 ANNUAL REPORT | 35 N/A N/A N/A N/A N/A N/A $635.4M

• • • • ● ● ● ● ● ● N/AN/A 11.1% 49.0% N/A $1,324.3M N/A $344.0M N/A $129.5M N/A 24.2% N/A N/A N/A N/A N/A N/A 13.7% 51.3% 22.8% $366.9M $133.0M $1,317.8M 12.7% 48.3% 22.5% 11.0% 46.6% 21.0% $332.2M $136.8M $322.1M $127.4M $1,256.0M $1,279.6M New indicator for 2019/20 for New indicator N/A N/A N/A N/A N/A N/A 11.9% 46.2% 24.1% $331.1M $121.0M $1,253.2M 2017/18 Actual2017/18 2018/19 Actual 2018/19 Target Result 2019/20 Target Not met

● Partially achieved

• ● Telco business market revenue market business Telco ROE Debt ratio revenue Broadband (with IFRS 15 impacts) Total revenue Total Net income Capital intensity ROE (with IFRS 15 impacts) ROE (with IFRS IFRS 15 impacts) (with Debt ratio revenue Total (with IFRS 15 impacts) revenue market business Telco (with IFRS 15 impacts) (with IFRS 15 impacts) Net income Capital intensity (with IFRS 15 impacts) Achieved

Measure Shareholder Value Shareholder Revenue Net Income Capital Capital Performance capital spending within again due to prudent management of is once This result Capital intensity came in lower than targeted. our overall capital program. Net income exceeded expectations as a result of a strong focus on the management of expenses. of on the management focus a strong of as a result expectations exceeded Net income Net Income Performance Revenue Performance pricing, aggressive to their national compared province pricing in the wireless due to lower competitor is below target Revenue behaviour. consumer and changing competition, SaskTel’s ROE and debt ratio are below the targets of 13.7% and 51.3% respectively, due to the opening equity increases as a due to the opening equity increases and 51.3% respectively, 13.7% of below the targets are ROE and debt ratio SaskTel’s significant changes in the from resulted The increase (AOCI). income other comprehensive accumulated increased of result previous year. pension plan in the the defined benefit primarily to the assets and liabilities of actuarial assumptions related Shareholder Value Performance Value Shareholder ● 36 | MANAGEMENT’S DISCUSSION AND ANALYSIS Capital intensity Capital Net Income Telco businessmarket revenue Broadband revenue Total revenue Revenue Debt ratio ROE Shareholder Value EBITDA margin Efficiency Customer accountsoneBILL through eChannel Customer transactions Self-Serve (new) fixed broadband access toat least50Mbps SK homesandbusinesseswith fixed broadband access toat least10Mbps SK homesandbusinesseswith Network Advancements(new) Number of homesconnected Number of homespassed Execution FTTP Employee perception of skillsevolution Learning andGrowth Employee engagementscore Employee Engagement Customer experience–business Customer experience–consumer Customer Satisfaction Measures andIndicators RATIONALE FOR BALANCED SCORECARD PERFORMANCE SELECTION MEASURE

to measure howeffective itisinutilizingitscapital investments. investments incriticalcommunications infrastructure. Itistherefore importantfor SaskTel Telecommunications isacapital-intensive industry, characterized bymulti-milliondollar consolidated intotheProvince’s financialstatements. health. SaskTel’s netincome isalsoacontributor toSaskatchewan’s financialhealth asitis Net income istheultimate measure of acompetitive organization’s profitability andfinancial market, are alsomonitored. trends for broadband (fixed andwireless), asSaskTel’s foundational product, andbusiness,asa key revenue isacommon industrymeasure that canbebenchmarked toindustrystandards. Revenue Revenue measures are importantindicators of growth for theorganization. Growth intotal monitored toensure that SaskTel remains withinprescribed limits. improvement basisaswellincomparison toothercompanies intheindustry. Debtratio isalso shareholders—the people of Saskatchewan. Return onequityismonitored onbothanannual As aprovincial Crown corporation, SaskTel hasaresponsibility todelivervaluebackits also acommon industrymeasure that canbebenchmarked toindustrystandards. SaskTel measures EBITDA margin aswayof monitoringimprovements tooperating efficiency.is It are beingimplementedbycompanies across Canadaandaround theworld. their service provider. Thisisdrivingincreased demandfor customerself-servecapabilities—which Customers are demandingmore flexibilityandoptionswith respect tohowtheyinteractwith and Canadiangovernmentsthat are promoting universalbroadband availability. throughout Saskatchewan. Thisisalsoanimportantmeasure for boththeSaskatchewan SaskTel iscommitted todeliveringhigherbroadband speedstocustomersonitsnetworks service offerings. uptake of theseservices isvitaltoensuringthat SaskTel remains competitive initsinternetaccess fibre-based services andhigherspeedstomore communities alongwiththelevel of customer customers across theprovince are demanding. Measuringthecompany’s success inrolling out SaskTel’s Fibre tothePremises program iscriticaltodeliveringthebandwidthandspeedsthat how confident employeesare withtheirongoingskillsevolutionandpersonaldevelopment. in anindustrycharacterized byrapidlychangingtechnology. Itistherefore importanttomeasure Learning andgrowth isanotherimportantworkforce-related measure giventhat SaskTel operates customer experience. manager, orco-workers that inturn,leadstoadditionalcommitment andhigherlevelsof measure of employees’emotionalandintellectualconnection totheirjob,organization, Employee engagementisanimportantindicator for SaskTel giventhat engagementisaproven A criticaldifferentiator for SaskTel istheabilitytodeliverhighlevels of customersatisfaction. The Canadiantelecommunications industryishighlycompetitive across alllinesof business. Rationale forInclusioninBalancedScorecard

SASKTEL 2018/19 ANNUAL REPORT | 37

line of defense line of defense line of defense Internal Audit Internal Business units st rd nd 1 3 2 Risk & Compliance function Risk & Compliance WORKFORCE Governance Board, Executive Committee Board, Executive OPERATING ENVIRONMENT OPERATING Board of Directors, Audit & Risk Committee of the of Audit & Risk Committee Directors, Board of Having the required workforce for the future for workforce Having the required Competitive capabilities restricted by policies, processes, by policies, processes, Competitive capabilities restricted and systems STRATEGIC RISKS STRATEGIC Digital transformation, operating in a fast-paced competitive in a fast-paced operating Digital transformation, changing customer needs all impact and ICT industry, and culture, New skill sets, evolving roles, the workforce. required. mindsets are planning and cultural reviews workforce Annual corporate has the SaskTel identify priorities and actions to ensure today and in the future. needs to be successful it workforce With over 110 years in business and the need to manage bothWith over 110 years in business and the operating has a complex SaskTel traditional and new services, and business with multiple systems, processes, environment market challenges in meeting current rules. This creates needs with speed and agility. to improve in place and projects has roadmaps SaskTel business intelligence increase environment, the operating and systems to improve processes capabilities, and streamline the customer experience. KEY RISKS business and core strategic the key risks are The following facing SaskTel. risks and uncertainties deemed to be lower riskAdditional risks and uncertainties may also have a material unknown currently are or risks that on the business. Any discussion about risks shouldeffect be considered in conjunction with caution regarding with caution regarding in conjunction be considered page 20. on information forward-looking on the determined based risks are strategic The following outlined goals and financial targets ability to achieve strategic these risks of one or more of Plan. Realization in the Strategic direction. to modify its strategic SaskTel may require

Control Evaluate Mitigate & RNANCE Report Identify VE GO Assess Monitor RESPONSIBILITIES to approach in SaskTel’s defense of lines three are There expected to understand and manage risks. All employees are Various their responsibility. of manage risks within the scope oversight to provide functions and compliance risk, control, and Internal Audit provides defense line of the second form the ERMof the effectiveness of independent assurance and controls. mitigations, processes, policy, Audit and Risk Committee of the Board, and Executive the Board, Audit and Risk Committee of risk appetite provides risk matrix Committee. An approved levels. and tolerance GOVERNANCE Directors, of Board by SaskTel’s is provided Governance risk is depicted in the framework below. risk is depicted in the Every business unit plays a role in the risk management unit plays a role business Every with together Directors, of Board with SaskTel’s process, risk for responsibility having ultimate senior management, used to manage The process SaskTel. management at ENTERPRISE RISKENTERPRISE MANAGEMENT and risk that subject to uncertainty are All businesses their ability to achieve on effect a material may have manages SaskTel and business objectives. goals strategic and risk to business priorities relation in risk exposures and Compliance Risk, its Governance, through tolerance aligning enterprise-wide approach (GRC) framework; an Operations, Planning, Enterprise Risk Management, Strategic Enterprise Risk Management (ERM)and Internal Audit. The and within the framework is applied to identify process risks. to key respond 38 | MANAGEMENT’S DISCUSSION AND ANALYSIS facing SaskTel are as follows. service, andsafety andenvironment. Thekey operational risks security, infrastructure, supplychain, resources, customer Operational risksconsider areas suchasbusinessinterruption, Operational Risks financial, and compliance andlegalrisks. to execute businessfunctionsrelated tooperations, The following core businessrisksfocus on theability plans inplace tomitigate disruptionifrequired. SaskTel maintainsrelationships withmultiplevendorsandhas to foreign laws,culture, andpoliticalenvironments. originating inforeign jurisdictionsposeauniquethreat due emerge that could changeorendtherelationship. Vendors When relying onthird parties,there isalwaysariskthat factors products andservices neededtooperate ourbusiness. SaskTel workswithmanyexternalsupplierstoprovide meet market demands. SaskTel continues toexpanditsfixed andmobile networks to and astrong focus oncustomerexperience. Itiscriticalthat roadmaps, launchingnewservices, evolvingsalesstrategies, Several initiatives are inplace orunderway, includingproduct offering low-cost solutions. technologies, andlarge non-traditionalglobalcompanies highly competitive wireless market, emerging disruptive profit margins dueto commoditized legacyproducts,a It isincreasingly challenging toincrease revenue and to ensure itsposition isknown. SaskTel activelyparticipates inCRTC andotherproceedings to ourbusiness,andimpactprofitability. These reforms often result inincreased costs, addcomplexity incumbents, inparticular, regional operators suchasSaskTel. to engageinregulatory reforms that are disadvantageousto by thefederal governmentanditsagencies,whichcontinue Telecommunications andbroadcasting services are regulated CORE BUSINESS RISKS CORE BUSINESS Federal regulation andpoliciesincrease costs andcomplexity Reliance onvendorsandpartners and profit Having competitive services that enablerevenue growth REVENUE GROWTH REGULATORY SUPPLIERS

offset significantlosses. protocols come intoeffect. Insurance isalsoinplace to occurs, businesscontinuity plansanddisasterrecovery security measures, maintenance, andupgrades.Ifanevent significant eventorloss,includingfire detectionsystems, Preventative measures existtoreduce thechance of a physical assets,whichcould disruptservice. Any natural weather event,fire, orvandalismcandamage help minimize impacts. business continuity anddisasterrecovery plansare inplace to duration, andseverityof outages.Shouldanoutageoccur, and changecontrol processes helpreduce theoccurrence, components, redundancy of networksandsystemhardware, legacy technologyandend-of-life systems,alarmingof key available. Regular updates andmaintenance, replacement of Networks andsystemsare designedandbuilttobehighly period, itcould causesignificantcustomerimpacts. and ifeitherof thembecameunavailablefor anextended SaskTel’s networksandsystemsare core todeliveringservices and mitigations. risk management, highlightssomefinancialexposures Statements, Note27–Financialinstruments andrelated reported at thistime. TheNotestoConsolidated Financial cash flow. Nosignificant core businessfinancialrisksare investments, publicreporting, revenue assurance, fraud,and exchange, credit, financialmisstatement, pensionplan, Areas reviewed inthiscategory include interest rate, foreign Financial Risks and response plansare alsoinplace should aneventoccur. against service disruption.Incidentmanagementprocesses customer, employee,andcorporate information, andmitigate SaskTel hasextensivecontrols andmeasures toprotect and massivenumbersof connected devices. toward digitalization, automation, software-based products, breaches. Thisthreat willonlyincrease withthemovement SaskTel, like anycompany, issubjecttocyberattacks ordata disrupts service A securitythreat ordata breach compromises information or infrastructure disruptsservice Significant loss of access ordamagetocriticalbuildingsand A significantnetworkorsystemsoutagedisruptsservice NETWORK ANDSYSTEMSRISKS PHYSICAL INFRASTRUCTURE SECURITY

SASKTEL 2018/19 ANNUAL REPORT | 39

LITIGATION A lawsuit with significant consequences A lawsuit with significant

Contracts, tariffs, in-house counsel, due diligence, andcounsel, due diligence, Contracts, tariffs, in-house the risk. mitigating to policies contribute Every business is subject to lawsuits due to various activities is subject to lawsuits due to various business Every people interact with thousands of Employees undertaken. and visible. numerous assets are daily and SaskTel’s include contractual, legal risk exposure of aspects Various which could party liability, third and statutory, professional, and reputation. results impact SaskTel’s negatively . and contingencies Note 29 – Commitments Compliance and Legal Risks and Legal Compliance need to SaskTel’s on focus this category in reviewed Areas contractual, including laws and regulations, with comply environmental, statutory, party, third professional, and regulatory, litigation, intellectual property, governance, detail is More below. risk is described key SaskTel’s privacy. Statements, Financial Consolidated available in Notes to 40 | MANAGEMENT’S DISCUSSION AND ANALYSIS Total comprehensive income Other comprehensive income Net income Net finance expense Results from operating activities Expenses Other services International software andconsulting services Security monitoringservices Marketing services Long distance services Equipment andprofessional services Local andenhanced services maxTV service, internet,anddata services Wireless services ($ millions) For theyearendedMarch 31, Consolidated Revenue 1. nmf Consolidated NetIncome current year’soperations are highlighted. compares thecurrent andprioryear’sfinancial results, bothexcluding theimpacts of IFRS15. Theimpacts of IFRS15onthe The adoptionof IFRS15hadasignificanteffect onwireless operating results.Where applicable,thediscussioninthisMD&A restated andcontinues tobereported basedonthestandards ineffect at thetime. IFRS 15recognized asanadjustmenttotheretained earningsat April1,2018. Asaresult, comparative information hasnotbeen SaskTel hasadoptedIFRS15asof April1,2018, usingthecumulative effect method resulting intheeffect ofinitiallyapplying ADOPTION OFIFRS15REVENUEFROMCONTRACTS WITHCUSTOMERS (IFRS15) RESULTSOPERATING Other income Revenue ($ millions) For theyearendedMarch 31, FINANCIAL SUMMARY Saskatchewan taxes Amortization Depreciation Internal labourcapitalized Salaries, wages,andbenefits Goods andservices purchased –nomeaningfulfigure $519.5 $ 1,256.0 $ 141.0 $ 1,256.0 $ 1,091.7 1,259.4 (23.7) 163.5 136.8 167.7 370.3 511.5 182.5 361.8 2019 2019 30.9 27.1 43.0 36.9 28.6 30.2 33.0 56.9 4.2 6.6 3.4 Excluding theimpactsof IFRS15 Excluding theimpactsof IFRS15 ,5. . 0.2 2.8 $ 1,253.2 $ 1.4 7.0 $ 512.5 $ 157.6 40.2 (26.6) 7. (.) (2.0) (7.4) 377.7 2. (18 (2.3) (11.8) 523.3 279 (69 (38.1) (86.9) $ 227.9 $ 1,253.2 $1,253.2 1,099.0 1,254.6 169 127 (96.1) 13.1 (102.7) 15.8 106.9 121.0 5. 217.8 12.1 155.6 9. 1.) (7.6) 3.5 (15.1) 12.1 197.6 349.7 08Change 2018 08Change 2018 46 37 (10.7) (3.7) 34.6 26.8 69 –– – 6.7 1.8 (10.4) 36.9 (11.3) 14.0 (3.5) (4.2) 26.8 7.0 33.7 37.2 49.9 . 23 (25.8) (2.3) 8.9 1.4 . 0.2 2.8 $ 73 (0.7) (7.3) . 3.7 5.9 . 7.0 2.8 (10.9) 2.9 . 1.1 0.3 . 0.4 4.8 2.0 nmf % % 1 Impacts of Impacts of Impacts of Impacts of 23.6 $ (75.3) $ (9.4) $ 23.6 $ IFRS 15 IFRS 15 99.1 (0.5) 33.0 41.6 23.6 (8.6) (9.4) (9.4) 0.3 – – – – – – – – – – – –

upon adoption upon adoption upon adoption upon adoption 1,279.6 $ 444.2 $ As reported As reported 131.6 $ 1,279.6 $ As reported As reported of IFRS15 of IFRS15 1,124.7 1,283.0 156.0 182.5 361.8 (23.7) 163.5 127.4 158.3 370.3 553.1 2019 2019 28.9 30.2 33.0 36.4 34.4 30.9 27.1 6.6 4.2 3.4

SASKTEL 2018/19 ANNUAL REPORT | 41

.4 .4 $127 $127 2018/19* 2018/19* .8 .8 $136 $136 2018/19 2018/19

f IFRS 15 $121.0 $121.0 2017/18 2017/18 ($ millions) .8 .8 $134 $134 2016/17 2016/17 $90 $90 $110 *Including the impact o $110 $130 Accumulated other comprehensive income increased increased income other comprehensive Accumulated on net actuarial gains of million as a result by $4.2 defined benefit pension plan SaskTel’s Net income increased $15.8 million $15.8 increased Net income million $13.0 of repayment Equity advance $130

million (2.3%), largely due to management’s focus on due to management’s focus million (2.3%), largely with rates roaming spending and decreased controlled other carriers efficiency initiatives million primarily due to workforce Depreciation and amortization increased by $8.7 million by $8.7 increased and amortization Depreciation assets in service due to increased in an IFRS 15 in 2018/19 resulted of The implementation million $9.4 of adjustment to net income accounting Goods and services purchased decreased $11.8 $11.8 decreased purchased Goods and services by $4.5 Net salaries, wages, and benefits decreased Net Income Net Income *Including the impacts of IFRS 15 *Including the impacts of

s t s Return on equity increased to 12.7% in fiscal 2018/19, up in fiscal 2018/19, to 12.7% on equity increased Return 0.8 percentage points from fiscal 2017/18. points from percentage 0.8

s s t t

* 19 .4 2018/

$127

15 IFRS of .4 Impact $9

.8 19 2018/

$136

2018/19* e ns pe Ex e Financ t Ne

$3.7

s xe Ta ewan ch skat Sa

% 11.0%

$0.3

tization Amor d an iation ec .7 Depr

2018/19

$8

s it f Bene d an ges, Wa Salaries, t Ne

$4.5

ices rv Se d an s Good

$11.8

2017/18 me co In r Othe (percentage)

$2.0

nue Reve ($ millions) $2.8 % 11.9% 12.7

.4 18 7/ 201 15 2016/17 $121.0 % % % increases in wireless, maxTV service, internet, data, and internet, data, service, maxTV in wireless, increases revenue. and services products managed and emerging to legacy by decreases is being offset growth Revenue and services, enhanced such as local access, services, long distance the same period in 2017/18. Net income increased increased Net income the same period in 2017/18. and total expense 0.2% of growth revenue through 0.7% of reduction .0 .0 Revenue increased $2.8 million (0.2%), mainly due to million (0.2%), $2.8 increased Revenue Net income was $136.8 million, up $15.8 million from million from million, up $15.8 was $136.8 Net income

*Including the impact of IFRS 15 *Including the impact of *Including the impacts of IFRS 15 $75 $50 14 12.0% 16 10.0 *Including the impacts of IFRS 15 *Including the impacts of s s SaskTel provides strong returns to the Province of to the Province returns strong provides SaskTel optimizing its its costs, by managing Saskatchewan services, new competitive introducing legacy services, business segments, in key growth revenue and providing and new internet, data, service, maxTV including wireless, and services. products and emerging $125 Return on Equity $150 *Including the impacts of IFRS 15 *Including the impacts of $100 RETURN ON EQUITY NET INCOME Net Income Net Income ($ millions) — Data Points for Narrative see World Version see World for Narrative — Data Points ($ millions) Net Income 42 | MANAGEMENT’S DISCUSSION AND ANALYSIS Revenues ($millions) cloud andTierIIIData Centre services toitscustomers. SaskTel continues togrow itsmanagedandemerging services portfolio byoffering innovative ICTsolutions,includingmanaged infrastructure, includingFTTP, fusion,andfurtherexpansionsof DSLinternetandwireless broadband toruralcommunities. wireless broadband. SaskTel offers itscustomersincreasing internetbandwidththrough improvements toitsnetwork services, andlongdistance (17.2%). Legacy revenue continues todeclinebutthisisoffset by revenue growth infixed and SaskTel’s revenue iscomposed primarilyof wireless (41.4%); maxTV service, internet,anddata (28.8%); localaccess, enhanced *Including theimpactsof IFRS15 Revenue REVENUE s s $1,200 $1,280 $1, 24 Wireless revenue increased by$7.0 million(1.4%) Revenue for the fiscalyearendingMarch 31,2019, revenue peruser(ARPU) postpaid subscriberbaseandincreased average from 2017/18, duetocontinued growth inour managed andemerging services portfolio over SaskTel’s fibre network,andstrong growth inour internet growth ascustomersoptfor services delivered through continued wireless adoption,aresurgence in wireline services. Thesechallengesare beingmet opportunities tooffset revenue declinesfrom legacy and increasing competition are impactingSaskTel’s regional wireless pricing,changingconsumer behaviour same periodin2017/18. Theeconomic environment, was $1,256.0 million,up$2.8 million(0.2%) from the 0 $1,253.

2017/18 ($ millions) 2 $7

Wireless .0 $12.1

maxT V Service, Internet, and Data $15.1 Local and Enhanced $7

Equipment and Professional Services .0 $4.2 Long Distance $4

Marketing, Security, and Software .0 $0.0 Other Services $1,256

2018/19 .0 $23

Impact of IFRS 15 .6 $1,279

2018/19* .6 2018/19 RevenueProfile Local andEnhanced Internet, andData28 maxTV Service, Professional Services Equipment and and Software 5. Advertising, Security, s t s 2018/19 RevenueProfile Equipment salesandprofessional services revenue Legacy wireline services such aslocalaccess, enhanced maxTV service, internet,anddata continues topost wireless devices business-grade communications systemsandconsumer increased $7.0 million(14.0%), duetogrowth inboth million (8.2%) duetodecreased accesses services, andlongdistance revenue decreased $19.3 has increased over year. Access growth remains strong andARPU strong revenue growth of $12.1million(3.5%) year 2% 14 .8 4. % 5% .6 % $1,256 .0 M Long Distance2.6% Wir Other 2.9% eless 41

.4 % SASKTEL 2018/19 ANNUAL REPORT | 43

SERVICE, INTERNET, AND DATA SERVICES DATA AND SERVICE, INTERNET,

TV

LOCAL ACCESS AND ENHANCED SERVICES AND ENHANCED ACCESS LOCAL million declined by $15.1 services and enhanced access Local in This decline is due to a reduction 2017/18. from (7.6%) and internet- driven by ongoing wireless network accesses, by themitigated based technology substitution, partially 16.9% reflecting a efforts retention our strong of success year. the previous in net losses from reduction WIRELESS SERVICES WIRELESS in (1.4%) million by $7.0 increased revenue Wireless subscriber base in the postpaid growth reflecting 2018/19, the price customers selecting from ARPU and increased onfocus Our and features. buckets data larger plans with quality, leading network and our initiatives customer-first in an increase postpaid churn and in decreased resulted or 0.4%. 2,503 additions of year over year net subscriber max increased revenue services and data internet, service, maxTV activations This is driven by increased by $12.1 million (3.5%). offerings, richer retail in our expanded FTTP footprint, our high speed customer demand for and increased saw increased services infiNET SaskTel’s internet services. to increased and has contributed 18.0% of growth access ARPU growth.

ACCESSES thousands ACCESSES ACCESSES thousands ACCESSES ACCESSES thousands ACCESSES 250 300 400 300 200 100 0 200 625 600 575 550 525 500 $444.2 $182.5 2018/19 $361.8 2018/19 $519.5 6 .7 $197. 2017/18 $349 2017/18 5 FRS 1 s sses sses s of I 5 esse ce ce 4. cc l ac l a l ac $21 2016/17 $337.5 mpact 2016/17 ta ta ta $526.5 $512.5 2016/17 2017/18 2018/19 2018/19* To To To g the i Service, Internet, and Data – Revenue and Accesses and Revenue – Data and Internet, Service, , Internet and Data – Revenue and Accesses , Internet and Data – Revenue Service $0 TV ludin $50

$150

$100 $250

$300

$200 $375 $325 $550

$450 nc $350 $500 $300 $400

REVENUE $ millions $ REVENUE Wireless – Revenue and Accesses – Revenue Wireless millions $ REVENUE REVENUE $ millions $ REVENUE max Local and Enhanced – Revenue and Access Counts *I Local and Enhanced – Revenue and Accesses maxTV Wireless – Revenue and Accesses – Revenue Wireless $ Millions

44 | MANAGEMENT’S DISCUSSION AND ANALYSIS LD RevenueandMinutes Security MonitoringRevenue Marketing Revenue Long DistanceRevenue Equipment Revenue $200 $30 $20 $6 $40 $40 $20 $30 $50 $100 $30 $150 $25 $35 $10 $10 $50 $0 $0 *I $0 0 *I nc nc ludi ludi ng 2016/17 2016/17 ng $60. $2 th 2016/17 2016/17 th 4. $37. $42.0 e impact 5$ $49 2 e impact 1$ s of s of 2017/18 2017/18 IFRS 26 ($ millions) IFRS ($ millions) .8 .9 15 2017/18 15 ($ millions) 2017/18 33.7 $37.2 2018/19 2018/19 $28. $56 ($ millions) .9 6$ 2018/19 $30. 2018/19* 2018/19* $156 2018/19 $33 28 2 .9 .0 .0 and migration towireless andinternet-basedalternatives. long distance services asaresult of wireline access erosion from 2017/18, reflecting reduced subscribers of traditional Long distance revenue hasdecreased $4.2 million(11.3%) LONG DISTANCE and increased sales of higher-priced smartphones. communications systemsandprofessional services, due toincreased sales of SaskTel’s business-grade Equipment revenue increased by$7.0 million(14.0%), EQUIPMENT ANDPROFESSIONALSERVICES through customeraccount acquisitions. to activelyseekoutbusinessgrowth bothorganically and for residential andbusiness consumers. SaskTel continues security that provides securityandautomation technology use of value-addedfeatures, such asSaskTel’s smartHOME million in2018/19, duetocustomergrowth andincreased Security monitoringrevenue increased $1.8 millionto$28.6 MONITORING SERVICES SECURITY investment toitscustomers. diversification supportedbyanabilitytoprove solid return on of Homebillboard medialineof business,andnewproduct media products), continued growth of itsnew DigitalOut product suitethrough itsadvertisingbundles(printanddigital is tomaintainitsSaskatchewan leadingmarketing services revenue declinessince itspeakin2008. SaskTel’s strategy has experienced significantfinancial pressures andongoing continuing toexceed thetraditionaldirectory industry, which million (10.4%). Profits andcashflows remainstrong while 2018/19, from $33.7 millionin2017/18, adecrease of $3.5 Marketing services revenue decreased to$30.2 millionin MARKETING SERVICES

SASKTEL 2018/19 ANNUAL REPORT | 45

(2.3%), largely due to management’s focus on controlled on controlled focus due to management’s (2.3%), largely with other carriers rates roaming spending and decreased primarily due to workforce efficiency initiatives primarily due to workforce fell $7.3 million (0.7%) to $1,091.7 million to $1,091.7 million (0.7%) $7.3 fell networks broadband and wireless to invest in our fixed Expenses for the 12 months ending March 31, 2019, 31, 2019, the 12 months ending March Expenses for million, by $8.7 increased and amortization Depreciation continues as SaskTel assets in service due to increased million as a result $0.3 increased taxes Saskatchewan capital taxes corporate increased of

Goods and services purchased decreased $11.8 million $11.8 decreased purchased Goods and services million, by $4.5 Net salaries, wages, and benefits decreased

$6.6 million in 2018/19, down $2.3 million from 2017/18, 2017/18, million from down $2.3 in 2018/19, million $6.6 and decreased to lower enhancements primarily due by offset partially and support fees, maintenance services. professional increased projects. commercial in larger INTERNATIONAL SOFTWARE AND CONSULTING SERVICES CONSULTING AND SOFTWARE INTERNATIONAL to decreased revenue services consulting and Software SERVICES OTHER In with 2017/18. was consistent revenue Other services in the in new services saw growth this portfolio 2018/19, Centre and Data Business Communications Integrated contributionsfewer customer offset by offerings, Service t t t s s

7

* 19 4. 2018/

$1,12

Impact 15 .0 IFRS

$33

19 2018/ .4

$1,091.7 36

s xe Ta ewan ch skat 2018/19* Sa .6 $0.3 $6

2018/19

tization Amor 9$ $2.8

$36.

2018/19

iation ec .9 Depr $5 ($ millions)

($ millions)

.9 15

15

s it f Bene d an ges, Wa , Salaries t $8 Ne .9 2017/18 IFRS IFRS $4.5 36

s of s of 2017/18

ices rv Se d an s Good $11.8

.0 e impact e impact 18 7/ ($ millions) 201 6$ .9 th th $7 $32. ng ng 2016/17 $1,099 2016/17 ludi ludi nc nc *I *I $1,100 $1,120 $1,080 $1,040 $1,060 Expenses *Including the impacts of IFRS 15 *Including the impacts of EXPENSES $0 $5 $0 $10 Other Services Revenue Other Services Revenue $30 $20 $40 $10 International Software Solutions Solutions Software International Revenue and Consulting . Expenses ($ Millions) $ Millions

46 | MANAGEMENT’S DISCUSSION AND ANALYSIS $200 Saskatchewan Taxes Depreciation andAmortization Net SalariesandBenefits Goods andServicesPurchased $60 $180 $400 $190 $500 $210 $450 $550 $300 $360 $20 $30 $330 $10 $0 0 *I *I nc nc ludi ludi 2016/17 $201. ng 2016/17 2016/17 ng $26. 2016/17 512$2. 515$553. $511.5 $523.3 $541.2 $354 th th 4$ e impact 2$ e impact .7 s of 2017/18 s of 2017/18 197. IFRS ($ millions) IFRS 8$ 2017/18 2017/18 15 26 $351.1 15 ($ millions) .8 2018/19 206. 2018/19 ($ millions) ($ millions) 5$ 2018/19 $27. 2018/19 $346 2018/19* 1 2018/19* 197. .6 9 1 efficiency initiatives. million, down$4.5 millionprimarilyduetoworkforce Net salaries,wages,andbenefitsdecreased to$346.6 (NET OFINTERNALLY CAPITALIZED LABOUR) WAGES,SALARIES, ANDBENEFITS subscriber base. and increased TV content costs, drivenbyourgrowing TV of salesfor smartphonesandbusiness-gradeequipment, and decreased roaming rates, slightlyoffset byincreased cost is aresult of management’sfocus oncontrolled spending fiscal 2018/19, down$11.8 million(2.3%)from 2017/18. This Goods andservices purchased decreased to$511.5 millionfor GOODS ANDSERVICESPURCHASED from 2017/18. Taxes were $27.1 millionin2018/19, up$0.3 million in Saskatchewan. cities, towns,villages,ruralmunicipalities,andnorthernsites Province of Saskatchewan and grants-in-lieuof taxes paidto Taxes represent thepaymentof corporation capitaltaxtothe SASKATCHEWAN TAXES and speedsacross theprovince. fibre footprint andtoincrease wireless capacity, coverage, networks, includinglarge expenditures toexpandSaskTel’s to increased spendingonourfixed andwireless broadband million in2018/19, up$8.7 millionfrom 2017/18. Thisisdue Depreciation andamortization expenseincreased to$206.5 DEPRECIATION ANDAMORTIZATION

SASKTEL 2018/19 ANNUAL REPORT | 47

2018/19 2018/19 2018/19 2018/19 of IFRS 15 of IFRS 15 of IFRS 15 of IFRS 15 of As reported As reported As reported As reported $ 30.9 $ 292.3 $ 262.4 $ 4.2 upon adoption upon adoption upon adoption upon adoption

– – IFRS 15 IFRS 15 IFRS 15 IFRS 15 $ (14.4) $ (14.4) Impacts of Impacts of Impacts of Impacts of % % % % (7.8) (5.5) (10.7) (96.1) (3.7) (26.0) (16.2) (102.7) 2017/18 Change 2017/18 Change 2017/18 Change 2017/18 Change $ 34.6 $ $ 106.9 $ $ 332.7 $ $ 293.0 $ Excluding the impacts of IFRS 15 IFRS the impacts of Excluding IFRS 15 the impacts of Excluding IFRS 15 of the impacts Excluding IFRS 15 the impacts of Excluding 2018/19 2018/19 2018/19 2018/19 $ 30.9 $ 4.2 $ 306.7 $ 276.8 CASH INVESTING IN USED ACTIVITIES CASH PROVIDED BY OPERATING ACTIVITIES OPERATING BY CASH PROVIDED OTHER COMPREHENSIVE INCOME COMPREHENSIVE OTHER NET FINANCE EXPENSE NET FINANCE ($ millions) expense Net finance ($ millions) income Other comprehensive ($ millions) activities Operating ($ millions) Investing activities Cash used in investing activities was $276.8 million for the fiscal year ended March 31, 2019, down $16.2 million from the million from down $16.2 31, 2019, fiscal year ended March the million for Cash used in investing activities was $276.8 spending on by increased networks, partially offset and core on the wireless spending primarily due to reduced year, previous plant and equipment was $234.1 cash invested in property, Total builds. and fibre Sask program, the Wireless demand services, million. No government million to $42.7 $8.4 Spending on intangible assets decreased 2018. million from million, down $10.9 included in are the 2019 capital program Additional details of million in 2018. to $3.1 in 2019 compared funding was received section. the capital expenditures fiscal year. million in the current $14.4 in cash used in investing activities of in a decrease IFRS 15 has resulted Adoption of Adoption of IFRS 15 has resulted in a decrease in cash from operating activities of $14.4 million in the current fiscal year. million in the current $14.4 activities of operating in cash from in a decrease IFRS 15 has resulted Adoption of Cash provided by operating activities for the fiscal year ended March 31, 2019, was $306.7 million, down $26.0 million from the million from million, down $26.0 was $306.7 31, 2019, year ended March the fiscal activities for by operating Cash provided after adjusting net income by increased partially offset working capital requirements, year primarily due to increased previous non-cash adjustments. the impact of for LIQUIDITY AND CAPITAL RESOURCES LIQUIDITY AND CAPITAL Other comprehensive income decreased to $4.2 million, down $102.7 million from 2017/18. A significant amount of other A significant amount 2017/18. million from million, down $102.7 to $4.2 decreased income Other comprehensive primarily to therelated assumptions due to significant changes in the actuarial in 2017/18, was recorded income comprehensive gainsfrom increased resulted impacts year Current previous year. the defined benefit pension plan in the assets and liabilities of partially on the defined benefit pension liability, rate in the discount a decrease of on sinking fund assets, as well as the impact are disclosed in Note 23 – plan. The assumptions of the defined benefit pension returns on the plan assets reduced by offset financial statements. the consolidated Employee Benefits of Net finance expense decreased $3.7 million year over year. The decrease is primarily due to reduced interest expense on the interest reduced is primarily due to decrease The over year. million year $3.7 expense decreased Net finance long-term debt due to on new increase in interest offset by an income, partially finance and increased defined benefit plans borrowings debt due to increased on short-term interest and increased mid-2018/19, 2017/18 and in late long-term debt issued rates. interest and increased 48 | MANAGEMENT’S DISCUSSION AND ANALYSIS rating of theProvince of Saskatchewan, whichissuesdebt The interest rate onSaskTel’s debtdepends onthecredit and 1.31%at March 31,2018. short-term debtoutstandingat March 31,2019, was 1.88% at March 31,2018. The weightedaverageinterest rate of the debt wasapproximately 4.62% at March 31,2019, and4.70% The weightedaverageinterest rate onSaskTel’s fixed rate is at fixed interest rates. at market rates ineffect on theissuedate. Long-term debt Province of Saskatchewan. Short-term debtisissued debt. Bothare issuedthrough, andguaranteedby, the SaskTel’s debtportfolio consists of short-termandlong-term Instruments Debt 1.7 percentage points. Adoption of IFRS15results inadecrease inthedebtratio of and repaying equityadvances of $13.0 million. income of $4.2 million,declaringdividendsof $114.7 million recording netincome of $136.8 million,othercomprehensive as intangibleassets.Equityincreased $13.3 millionafter investment inproperty, plantandequipment,aswell debt increased $91.8 million,primarilytofund continued up from 46.2% at March 31,2018. Theoveralllevelof net SaskTel’s debtratio increased to48.3% at March 31,2019, 1 of $349.9 millionindividendswhilemaintainingadebtratio withinindustrystandards. ending March 31, 2019, anincrease of $26.4 millionovertheprevious year. Duringthelastfivefiscalyears,SaskTel paidatotal offset byincreased netborrowing compared to2018. SaskTel paiddividends of $116.3 milliontoCICduringthefiscalyear previous year. Thisisprimarilyduetoincreased dividendpaymentsandanequityadvance repayment of $13million, partially Cash usedinfinancingactivitieswas$42.1million for thefiscalyear endedMarch 31,2019, compared to$33.5 million forthe Financing activities ($ millions) Debt ratio Capitalization Net debt ($ millions) Equity Less: Sinkingfunds Short-term debt Long-term debt or thepurposesof calculating thedebtratio isdefinedasequityadvances, accumulated other comprehensive income (loss)and retained earnings at the endof theperiod. Equity f CAPITAL MANAGEMENT USED IN FINANCING ACTIVITIES CASH Cash 1 March 31, 42.1 $ 2,102.5 $ 1,003.3 $ 2018/19 1,087.0 1,015.5 48.3% 176.0 193.3 2019 Excluding theimpactsof IFRS15 Excluding theimpactsof IFRS15 5.1

March 31,

35$ 33.5 $ ,9. $ 1,997.4 $ 5. $ 953.5 $ 071 Change 2017/18 1,073.7

46.2% 923.7 155.6 143.1 08Change 2018 17.3 $1,096.6 millionat March 31,2018. outstanding debt was$1,196.6 millionat March 31,2019, and $1.8 billionincombined short-termandlong-termdebt.Total Besides thiscredit facility, SaskTel hasauthoritytoissueup accessed $193.3 millionof thesefacilities. the Province of Saskatchewan. AtMarch 31,2019, SaskTel had lines of credit withfinancial institutionsandadvances from Credit facilitiesconsist of upto$500millionincombined issued through theProvince of Saskatchewan. accessed through short-termnotesandlong-termdebt will beinitiallyfrom operations. Additionalfundingwillbe expenditures, growth initiatives, anddividend payments The 2019/20planassumesthat fundingof capital initiatives, anddividendpayments. and equipment,intangibleassetexpenditures, growth The primaryusesof cashin2019/20willbeproperty, plant Access to Capital of theProvince at March 31,2019. on SaskTel’s behalf. Thefollowing tableliststhecredit ratings hr-emlaiiisA1 - hg)NotRated R-1(high) AA A-1+ AA(stable) Short-term liabilities Long-term debt

105.1 (12.2) 13.3 91.8 20.4 50.2 49.8 8.6 2.1 (70.5) 25.7 13.1 35.1 1.2 4.5 5.3 9.9 5.2 & BSMoody’s DBRS S&P % % Impacts of Impacts of Impacts of Impacts of – $ 78.1 $ – $ IFRS 15 IFRS 15 (1.7)% 78.1 – – – –

upon adoption upon adoption upon adoption upon adoption 42.1 $ 2,180.6 $ 1,003.3 $ As reported As reported As reported As reported of IFRS15 of IFRS15 Aaa 2018/19 2018/19 1,165.1 1,015.5 46.6% 176.0 193.3 5.1

SASKTEL 2018/19 ANNUAL REPORT | 49

ed nnect Co (Consumer and Business) (Consumer Passed 2013 2014 2015/16 2016/17 2017/18 2018/19 0

50

150 100 350 300 250 200

) housands (t PREMISES Fibre to the Premises the Premises to Fibre – $34.7 million) (2018/19 and Wi-Fi LTE network LTE is the largest network LTE wireless SaskTel’s the in the residents 99% of and covers in Saskatchewan to SaskTel’s customers enjoy access SaskTel province. data them with unlimited free which provides selectWI-FI, in 30 communities across spread locations in over 2,400 available in Wi-Fi network it the largest making Saskatchewan, in increased investments result These ongoing Saskatchewan. positively impacts that coverage speeds and improved data the speed and capabilities and provides customer experience and listen to multimedianeeded to travel the internet, watch, smartphone on cloud-based services and access content without delay. devices Access Network Demand – $35.1 (2018/19 million) is an ongoing Network Demand program The Access new neighbourhoods to to add infrastructure program has to offer. Other Network Improvements – $59.5 million) (2018/19 its network to increase of has invested in other areas SaskTel may it so that components key capacity and modernize and businesses, residents Saskatchewan meet the needs of These economy. to support the growing and continue to our include: capacity improvements improvements to our rural networks; improvements and wireless wireline fixed of rural growth to accommodate transport infrastructure and expansion services; video, and data and mobile voice, facilities, which will bring high speed northern fibre of and businesses. to northern residents bandwidth services Facility – $16.4 million) Renovation (2018/19 SaskTel network. These SaskTel’s a vital part of facilities are SaskTel critical network equipment of amount facilities host a large to SaskTel services telecommunications used to provide includes program facility renovation customers. The current electrical equipment, which will provide end-of-life replacing Building and maintainability. reliability, capacity, greater air from the critical site’s infrastructure upgrades will protect efficiency. energy greater and provide penetration and water and increased capacity in existing neighbourhoods so capacity in existing neighbourhoods and increased SaskTel that all the services customers may access that % % Fibre to the Premises (Consumer and Business) and (Consumer Premises to the Fibre .5 .6

% .5

Wireline – Fibre 37 – Fibre Wireline Wireline – Copper 3 Wireline Wireline – Other 17 Wireline $268.2M % .5 % .8 2018/19 Capital Expenditures Wireless 12.9% Wireless IT Infrastructure 14.2% IT Infrastructure Buildings and Equipment 9 Other 4 Fibre to the Premises (2018/19 – $62.5Fibre the Premises to million) (2018/19 is an ongoing program program to the Premises The Fibre service, facilities and bring infiNET to upgrade broadband our customers’ doors optic network, right to fibre SaskTel’s Emerald Park, locations: Saskatchewan in the following Melville, Moose Estevan, Humboldt, Martensville, Melfort, Saskatoon, Rosthern, Albert, Regina, Prince Nipawin, Jaw, Weyburn, Tisdale, Warman, The Battlefords, Current, Swift network, which includes The fibre Yorkton. and White City, can deliver download premises, fibre-ready over 300,000 speeds up to 300 Mbps, upload speeds up to 80 Mbps, to seven media services feature-rich high-definition, and the ability to high-definition televisions simultaneously, while lowering ongoing once, shows at up to four record customer delivery costs. and Wi-Fi), the Access Network Demand program, and Network Demand program, and Wi-Fi), the Access million $28.9 the remaining facility renovation; SaskTel of the million reflective (2017/18 – $51.2 million or $37.4 IFRS 15) was spent on intangible assetsadoption of such as customer self-serve systems and accounting systems. reporting Of the $268.2 million, $239.3 million (2017/18 – $250.8 $250.8 million (2017/18 – million, $239.3 Of the $268.2 plant and equipment, million) was spent on property, networks (LTE wireless to the Premises, including: Fibre Capital Expenditures 2018/19 Capital Expenditures *Capital expenditures excluding IFRS 15 impacts were $282.6 $282.6 IFRS 15 impacts were excluding *Capital expenditures million in 2017/18. $302.0 million in 2018/19 and SaskTel operates the most extensive networks in Saskatchewan extensive networks the most operates SaskTel 110 years. for investing in Saskatchewan of and is a result in capital million an additional $268.2* invested SaskTel million) (2017/18 – $288.2 during 2018/19 expenditures create today and experience our customers’ to improve and enhancements additional opportunities to provide capabilities in the future. CAPITAL EXPENDITURES CAPITAL impacts the reflect this section within numbers The 2018/19 on made in expenditures million which $14.4 IFRS 15 in of from reclassified assets were or intangible accounts customer to obtain. to cost capital expenditures 50 | MANAGEMENT’S DISCUSSION AND ANALYSIS item will no longer be limited to the non-contingent item will nolongerbe limited tothenon-contingent largely unaffected, the revenue allocated toadelivered revenue recognized duringtheterm of acontract willbe Under multiple-element arrangements,although thetotal consolidated financialstatements. impacts are discussedbelowandinNote2of the materially impactedbytheapplication of IFRS 15. These many telecommunications companies, the Corporation is and accounting for costs toobtainandfulfill contracts. Like the classification of revenue betweenproducts andservices, IFRS 15primarilyimpactsthetimingof revenue recognition, at the time. Transfers of Assetsfrom Customers,thestandards ineffect 18 not beenrestated andcontinues tobereported underIAS at April 1,2018. Asaresult, comparative information has as anadjustmenttotheopeningbalance of retained earnings cumulative effect of initiallyapplyingIFRS15is recognized cumulative effect method,which requires that the IFRS 15, theCorporation hasapplied IFRS15usingthe statements. Inaccordance withthetransitionprovisions of of presentation (Note2),of theconsolidated financial application of April1,2018, asdescribedinNote2–Basis The Corporation hasadoptedIFRS15withadate of initial with Customers(IFRS15): (IFRIC) issuedthefollowing IFRS15Revenuefrom Contracts International FinancialReporting Interpretations Committee The International Accounting Standards Board (IASB)andthe FINANCIAL REPORTING STANDARDS APPLICATION INTERNATIONAL NEW OF remediation; andthefairvalueof financialinstruments. the future liabilitiesfor decommissioning andenvironmental assumptions related topensionobligations; estimation of assets; impairmentof assetsandcash-generating units; amortization of property, plantandequipment,intangible costs toobtaincontracts; capitalization anddepreciation or revenue from contracts withcustomers;determination of on financial results, including: theamountandtiming of Certain of thesepoliciescould haveasignificantimpact each applicableaccount inpreparing itsfinancialstatements. principles, estimates, andjudgmentsthat SaskTel usesfor specific notes for more information about theaccounting applicable tothefinancialstatements asawhole,well statements for accounting policies,estimates, andjudgments Note 2–Basisof presentation totheconsolidated financial are contained intheconsolidated financialstatements. See Significant accounting policies,estimates, andjudgments International FinancialReporting Standards (IFRS). statements, whichhavebeenprepared inaccordance with results of operations are basedontheconsolidated financial SaskTel’s discussionandanalysisof ourfinancial positionand ESTIMATES, AND JUDGMENTS ACCOUNTINGSIGNIFICANT POLICIES, and IFRIC 18 Revenue, IAS11Construction Contracts, andIFRIC18

as incurred orcapitalized as intangibleassets. the customer. Thesecosts were eitherpreviously expensed period andpattern of deliveryof products orservices to position andamortized onabasisconsistent withthe a customerare recognized inthestatement of financial and otherincremental costs of obtainingacontract with Sales commissions, customeraccount acquisitioncosts, resulting inacorresponding decrease inservice revenue. customer contract maybeattributed toadelivered product, portion of thetotalrevenue recognized duringthetermof a no longerlimitedtothenon-contingent amount,agreater As revenue allocated toasatisfied performance obligation is the customercontract. statement of financialposition,tobe realized overtheterm of and results inacorresponding contract assetrecorded inthe recognition of revenue aheadof theassociated cash inflows amount, usuallytheprice of thedevice. Thisaccelerates the of adoption of IFRS 16 Note 2provides additionaldetails ontheanticipated impact corresponding declineincashflows from financing activities. result inanimprovement incashflowsfroma operations and The changeinpresentation of operating leaseexpensewill expected tochangebyamaterial amount. the Corporation’s leasesat April1,2019, netincome isnot liabilities willreplace operating leaseexpenses.Basedon expense from unwindingof thediscount onthelease Depreciation charges onright-of-use assetsandtheinterest not besignificantlyimpacted. upon adoptionwillbesignificant. Retained earningswill right-of-use assetsinthestatement of financialposition indicated theprobable recognition of leaseliabilities and to IAS17. Theanalysisconducted oninitialapplication to thecontinued requirement toclassifyleases according lessors remain largely unchanged, particularlywithregard for allleases.Incontrast, theaccounting requirements for be recognized for thepaymentobligations entered into recognized for therightof usereceived andliabilitiesmust to thepresentation of leases. Infuture, assets mustbe IFRS 16requires lesseestoadoptauniform approach no adjustmenttoprioryearfigures. accordance withthemodified retrospective approach with The Corporation willadoptIFRS16onApril1,2019, in Lease (IFRIC4). Determining WhetheranArrangement Contains a IFRS 16replaces IAS17Leases (IAS17)andIFRIC4 IFRS 16Leases (IFRS16) March 31,2019. IFRIC that ismandatory for fiscalperiodsbeginning after The following newstandard wasissuedbytheIASBor INTERPRETATIONS ADOPTED NOT YET STANDARDSNEW AND .

SASKTEL 2018/19 ANNUAL REPORT | 51

NON-GAAP AND OTHER FINANCIAL MEASURES AND OTHER NON-GAAP the comparing a basis for provides Capital intensity: This measure varying of other companies to those of capital expenditures level of within the same industry. size (excluding as capital expenditures is calculated This measure divided by total and non-monetary transactions) spectrum licenses revenue. operating the of the capitalization measures : The debt ratio Debt ratio comparison capital structure allows for This measure Corporation. in the same industry. with other companies Net debt isIt is defined as net debt divided by total capitalization. minus cash and sinkingdefined as long-term and short-term debt as net debt plus period-end is defined capitalization funds. Total including AOCI. equity, depreciation, income taxes, interest, (earnings before EBITDA a company’s of is used as an indicator : EBITDA and amortization) debt, and as ato incur service and ability performance operating valuation metric. expenses.revenue minus operating as operating is defined EBITDA of other revenue exclusive is defined as total revenue Operating of goods and defined as the sum expenses are Operating income. salaries, wages, and benefits less internal purchased, services labour capitalized. operating of is the percentage margin margin: EBITDA EBITDA investment and return capital debt coverage, available for revenue divided by is defined as EBITDA margin EBITDA to the shareholder. revenue. operating to the shareholders the return on equity): ROE measures ROE (return by the Corporation. retained including AOCI, based on the equity, divided by average equity is defined as net income The calculation the fiscal period.for : A 4G mobile telecommunications: A 4G evolution) (long-term LTE standard. industry global wireless the leading is that technology devices and networked : Technologies M2M (machine-to-machine) actions without and perform information able to exchange are that assistance.any human (OTT)Over-the-top in a video and applications : Content, services, medium other a through the delivery occurs where environment delivery infrastructure. than the established video where services payment for of method Postpaid: A conventional of services a significant portion pays for a subscriber is billed and the services. consuming after and usage in arrears, allows a customer to prepay that payment : A method of Prepaid actual usage. of in advance airtime and/or data of a set amount for allows that network operators by wireless offered Roaming: A service of area mobile phones while in the service subscribers to use their another operator. used in radio frequencies electromagnetic Spectrum: The range of a wireless of and video. The capacity data, voice, the transmission of and licensed spectrum the amount of network is in part a function of used by the carrier. allows any user fidelity): Networking technology that (wireless Wi-Fi point oraccess to a wireless to connect with a Wi-Fi-enabled device public locations.hotspot in high-traffic

and management. along which light pulses are network: Hair-thin glass fibres Fibre large used to transmit networks are transmitted. Optical fibre between locations. data amounts of network any broadband term for to the x): A collective (fibre FTTx of the existing all or part replace to using optical fibre architecture FTTP denotes to the home, local loops. FTTH denotes fibre copper and FTTN denotes node or neighbourhood. premises, access plus): A 4G technology capable of (high speed packet HSPA+ up download speeds of data wireless delivering manufacturer-rated dual-cell 4 to 6 Mbps expected). HSPA+ to 21 Mbps (typical speeds of technology can double those download speeds. uniquely identifiable end points: A network of Things (IoT) Internet of interact without human intervention, most commonly(or things) that and act on analyze, network. These systems collect, over a wireless time and can be deployed to enable the creation in real information businesses, homes, cars, and cities. smart-connected of delivering data for protocol : A packet-based IP (Internet Protocol) networks. across network: A network designed using IP and QoS (quality IP-based and efficiently support all types technology to reliably service) of data, and video. An IP-based including voice, customer traffic, of applications and advanced IP devices network allows a variety of network. over a single, common to communicate IPTV uses a that television): A television service (Internet Protocol a network by way of signal sent through two-way digital broadcast set-top box. to a dedicated connection broadband a streamed GLOSSARY technologies wireless of generation : The generation) 4G (fourth as defined by the advanced, and LTE LTE, HSPA+, includes that Union. Telecommunications International performance per user): This business revenue ARPU (average is predominantly per month, a dollar rate as expressed measure, to describe the revenue and cable industries wireless used in the a of per month. ARPU is an indicator per customer generated performance. or cable business’ operating wireless speed transmission data of Bps (bits per second): A measurement in a second is transferred that data the amount of measuring used for points or within network devices.between two telecommunications bps; Mbps (megabits per is thousands of Kbps (kilobits per second) is billions of Gbps (gigabits per second) bps; is millions of second) bps. is trillions of per second) bps; and Tbps (terabits allow the that services : Telecommunications Broadband and video data, voice, transmission of simultaneous high speed at speeds of 1.5 Mbps and above on fixed and wireless networks. and wireless and above on fixed Mbps 1.5 speeds of at is used to describe the measure Churn: This business performance It is a service. customers to a telecommunications of rate disconnect reflective least partially at customer turnover and is often of measure It is usually expressed intensity. quality and competitive service of subscriber units as the number of and calculated as a percentage units on number of in a period divided by the average disconnecting the network in the same period. (Canadian Radio-television and Telecommunications CRTC radio and television for regulator Commission): The federal companies and telecommunications cable TV, broadcasters, in Canada. storage and data hosted applications : A facility for centre Data 52 | MANAGEMENT’S DISCUSSION AND ANALYSIS ($ millions) Consolidated Statement of IncomeandOtherComprehensive Income FIVE-YEAR RECORD SERVICE OF Other income Expenses Revenue Results from operating activities Net finance expense Net income Total comprehensive income Other comprehensive income (loss) *Results includingthe adoptionof IFRS15 ($ millions) Consolidated Statement of CashFlows Total liabilitiesandProvince of Saskatchewan’s equity Province of Saskatchewan’s equity Other long-termliabilities Long-term debt Current liabilities Total assets Other long-termassets Property, plantandequipment Current assets ($ millions) As at Consolidated Statement of Financial Position Cash andcashequivalents,endof year Increase (decrease) incash Cash provided by(usedin)financingactivities Cash usedininvestingactivities Cash provided byoperating activities Cash andcashequivalents,beginningof year Goods andservices purchased Saskatchewan taxes Amortization Depreciationw Internal labourcapitalized Salaries, wages,andbenefits 12 months ended 12 monthsended 12 months ended 12 monthsended March 31,2019* March 31,2019*

2,662.1 $ 446.2 $ 2,662.1 $ 278.1 $ 5.1 $ 17.3 $ 1,279.6 $ 131.6 $ 1,165.2 1,003.3 1,854.7 1,283.0 1,124.7 (262.4)

2019* (42.1) (23.7) (30.9) 529.3 553.1 292.3 163.5 370.3 158.3 127.4 47.4 12.2 27.1 34.4 3.4 4.2

12 months ended 12 monthsended 12 months ended 12 monthsended March 31,2018 March 31,2018 ,8. ,9. ,5. 2,068.9 $ 375.3 $ 2,253.1 $ 2,068.9 2,394.5 $ 463.1 $ $ 167.2 $ 2,489.9 2,253.1 $ 422.3 $ $ 218.9 $ 2,394.5 $ 408.1 $ 232.9 2,489.9 $ $ 214.7 $ 73$1. 61$8.9 $ 16.1 24.4 $ $ 11.1 $ 8.9 $ 17.3 $ 16.1 $ 11.1 $ ,5. $1228 ,6. 1,231.0 $ 1,569.6 $ 1,282.8 $ 1,253.2 $ 2. $183$108$19.1 $ 120.8 $ 188.3 $ 227.9 $ 1,254.6 1,099.0 1,073.7 1,779.5 (293.0) (34.6) 523.3 157.6 377.7 (26.6) 155.6 121.0 106.9 953.5 495.7 332.7 (33.5) 2018 26.8 40.2 54.6 1.4 6.2 March 31,

12 months ended 12 monthsended 12 months ended 12 monthsended March 31,2017 March 31,2017

,9. 1,574.2 1,292.9 ,2. 1,407.4 1,123.5 ,9. 1,594.3 1,693.2 (311.9) (34.6) 541.2 163.0 380.6 (25.9) 169.4 134.8 851.9 954.7 165.6 468.4 324.1 (17.2) 2017 10.1 26.2 38.4 53.5 (5.0)

15 months ended 15 monthsended 15 months ended 15 monthsended March 31,2016 March 31,2016 (370.4) (40.1) 777.3 796.3 216.4 439.9 333.6 673.9 211.4 474.8 (27.3) 166.8 126.7 2016 (5.9) 44.0 31.0 43.6 7.2 4.6

December 31,2014 December 31,2014 12 months ended 12 monthsended 12 months ended 12 monthsended December 31, 1,232.7 1,133.7 1,511.6 (279.1) (22.6) 548.9 166.2 374.4 (23.1) (57.3) 776.8 713.0 203.8 390.1 271.0 (15.5) 2014 25.8 41.5 99.0 76.4 (7.4) 1.7 SASKTEL 2018/19 ANNUAL REPORT | 53

Q1 2014 3,999 10.5% 52.8% 618,083 442,471 258,705 103,716 2017/18 $ 53.3 $ 83.7 $ 282.7 1,422,975

December 31, December Q2 12 months ended 12 months ended12 months December 31, 2014 December December 31, 2014 31, December 2017/18

3,956 16.8% 51.9% Q3 2016 2017/18 March 31, 2016 March March 31, 2016 March

15 months ended 15 months ended15 months Q4

Excluding the impacts of IFRS 15 IFRS the impacts of Excluding 2017/18 3,916 15.4% 47.9% 2017

Q1 March 31, 2017 March March 31, 2017 March 12 months ended 12 months ended12 months 2018/19

March 31, March Q2 3,880 2018 11.9% 46.2% $ 108.9 $ 30.0 $ 37.5 $ 89.9$ 302.0 $ 30.0 $ 316.1 $ $ 30.0 378.0 607,448361,351278,977 615,882110,881 388,519 275,356 614,221 110,591 413,052 264,196 107,321 2018/19 1,358,657 1,390,348 1,398,790 $ 325,095 $ 326,761 $ 361,265 $ 322,173

March 31, 2018 March March 31, 2018 March 12 months ended 12 months ended12 months 8.6 8.5 8.7 10.2 10.1 10.1 9.8 6.0 6.4 9.7 5.5 5.9 6.2 9.2 1.3 (2.7) 0.5 21.2 90.2 (0.5) (4.0) Q3 (0.7) 1.7 0.7 (0.4) 0.7 0.30.8 (5.8) (5.9) (6.7) (7.1) (6.9) (6.1) (6.5) 92.2 89.3 96.6 95.9 95.4 91.9 94.5 41.7 40.3 39.7(7.9) 38.8 (7.5) 38.6 (7.4) 38.4 (8.3) 41.8 (8.4) (9.2) (8.7) 39.1 45.531.2 37.2 38.0 41.8 29.8 32.7 33.5 43.8 24.3 37.3 34.6 28.6

331.9 316.9 317.9 309.4 317.8 317.3 310.1 150.1 132.8 132.7 124.3 142.0 133.0 124.0 292.8 271.4 280.7 267.6 285.1 273.5 272.8 $ 332.6 $ 315.2 $317.2 $ 309.8 $ 317.1 $ 317.0 $ 309.3 $ 32.5 $ 35.3 $ 30.3 $ 54.7 $ 114.5 $ 34.1 $ 24.6 2018/19 2019 3,719 11.0% 46.6% $ 114.7 $ 116.3 $ 268.2 609,951 338,779 282,710 112,583 Including the impacts of IFRS 15 of Including the impacts 1,344,023 1.7 Q4 8.6 5.0 5.1 $ 317,096 92.2 41.8 36.5 28.4 (5.3) (8.1) 316.3 137.5 279.8 $ 314.6 $ 33.5 March 31, 2019 March 2018/19 March 31, 2019* March 12 months ended 12 months ended12 months

Goods and services purchased Goods and services Salaries, wages, and benefits Internal labour capitalized Internal labour capitalized Depreciation Amortization Saskatchewan taxes Saskatchewan Employees and payroll employees Total Salaries earned (000s) Debt ratio Dividends declared Return on equity Return Dividends paid Capital expenditures *Results including the adoption of IFRS 15 adoption of including the *Results Financial Indicators Financial ($ millions) ($ millions) Revenue Other income Expenses *Does not include SaskTel internal use *Does not include SaskTel Customer accesses Wireless* Wireline* subscribers) service Internet (includes maxTV subscribers service maxTV accesses Total Annual Operating Statistics Annual Operating As at Consolidated Statement of Income and Other Comprehensive Income and Other Comprehensive Income of Statement Consolidated Results from operating activities operating from Results expense Net finance Net income (loss) income Other comprehensive Total comprehensive income income comprehensive Total 54 | CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements Financial Consolidated May 30, 2019 Chief Executive Officer Pr Doug Burnett of Saskatchewan. Accountants, asappointedbytheLieutenantGovernorinCouncilandapproved byCrown InvestmentsCorporation The consolidated financialstatements havebeenauditedbytheindependentfirm of KPMG LLPChartered Professional to theBoard of Directors for finalapproval. management andtheexternalauditortoreview theCorporation’s annualconsolidated financialstatements priortosubmission on theadequacyof internalcontrols, andthequalityof financial reporting. TheAuditandRiskCommitteehasmetwith auditor. Boththeinternalandexternalauditors have free access tothiscommittee todiscusstheirauditwork,opinion and externalauditors.TheAuditRiskCommitteeisresponsible for engagingorreappointing theservices of the external and RiskCommittee,consisting of outsidedirectors, whichmeetsperiodicallywithmanagementaswelltheinternal The Board of Directors fulfillsits responsibility with regard tothe consolidated financialstatements principallythrough itsAudit legislation andrequired authority, assetsare properly safeguarded, andreliable financial records are maintained. audit program. These measures provide reasonable assurance that transactionsare recorded andexecuted incompliance with including writtenpoliciesandprocedures, anorganizational structure that segregates duties,andacomprehensive internal To ensure theintegrityandobjectivityof thefinancialdata, managementmaintainsa comprehensive system of internal controls, annual report isconsistent withthat intheconsolidated financialstatements. consistently appliedtoalltheperiodspresented unlessotherwisenoted.Thefinancialinformation presented elsewhere inthis Financial Reporting Standards (IFRS),asissuedbytheInternational Accounting Standards Board. Thepoliciessetouthavebeen by theBoard of Directors. Managementhasprepared theconsolidated financial statements inaccordance withInternational Holding Corporation for thefiscalyearendedMarch 31,2019, are the responsibility of managementandhavebeenapproved The accompanying consolidated financialstatements, includedintheannual report of Saskatchewan Telecommunications FOR FINANCIAL STATEMENTS RESPONSIBILITY MANAGEMENT’S esident and

Chief FinancialOffic Charlene Gavel er

SASKTEL 2018/19 ANNUAL REPORT | 55

er Charlene Gavel Chief Financial Offic

, 2019 be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made. the circumstances light of not misleading in a statement to make is necessary or that be stated has designed internal controls authorities; and SaskTel with applicable legislative assets and compliance of safeguarding of SaskTel. to the circumstances appropriate are reporting that over financial over financial internal controls that assurance reasonable provide can this assessment, SaskTel of and, based on the results found in the design or weaknesses were and no material effectively operating 31, 2019 were March as of reporting reporting. over financial the internal controls of operation exercised reasonable diligence, the financial statements included in the annual report, fairly present, in all material respects, in all material present, report, fairly in the annual included statements the financial diligence, reasonable exercised in thepresented for the periods 31, 2019 and of March as and cash flows, of operations, results condition, the financial financial statements. to either required is fact that a material fact, or omit to state material of any untrue statements do not contain SaskTel of esident and c. That SaskTel is responsible for establishing and maintaining effective internal control over financial reporting, which includes reporting, which over financial control internal effective establishing and maintaining for is responsible SaskTel c. That reporting over financial controls internal of the Corporation’s the effectiveness its assessment of conducted SaskTel d. That a. That we have reviewed the financial statements included in the annual report of SaskTel. Based on our knowledge, havingBased on our knowledge, SaskTel. of report in the annual included statements the financial have reviewed we a. That report included in the annual financial statements the diligence, reasonable exercised based on our knowledge, having b. That Chief Executive Officer Chief Executive May 30 Pr Doug Burnett REPORT OF REPORTING MANAGEMENT FINANCIAL OVER ON INTERNAL CONTROL (SaskTel), Corporation Holding Telecommunications of Saskatchewan Officer and Chief Executive Doug Burnett, President I, following: certify the of SaskTel, Officer Chief Financial Charlene Gavel, and I, 56 | CONSOLIDATED FINANCIAL STATEMENTS Those charged withgovernance are responsible for overseeingtheCorporation’s financial reporting process. management either intendstoliquidate theCorporation ortocease operations, orhasno realistic alternative but todoso. concern, disclosingasapplicable,matters related togoingconcern and usingthegoingconcern basisof accounting unless In preparing thefinancialstatements, managementis responsible for assessingtheCorporation’s abilityto continue asagoing from material misstatement, whetherduetofraudorerror. for suchinternalcontrol asmanagementdeterminesisnecessary toenablethepreparation of financialstatements that are free Management isresponsible for thepreparation andfairpresentation of thefinancialstatements inaccordance withIFRS, and Responsibilities of ManagementandThoseChargedwithGovernancefortheFinancialStatements We havenothingtoreport inthisregard. there isamaterial misstatement of thisotherinformation, weare required toreport that factintheauditors’report. as at thedate of this auditors’report. If, based ontheworkwehaveperformed onthisotherinformation, weconclude that We obtainedtheinformation, otherthan thefinancialstatements andtheauditors’ report thereon, includedintheannual report obtained intheauditandremain alertfor indications that theotherinformation appearstobematerially misstated. in doingso,consider whethertheotherinformation ismaterially inconsistent withthe financial statements orourknowledge In connection withourauditof thefinancialstatements, our responsibility isto read theotherinformation identifiedaboveand, assurance conclusion thereon. Our opiniononthefinancialstatements doesnot cover theotherinformation andwedonotwillexpress any form of Management isresponsible for theotherinformation. Otherinformation comprises: Other Information with Customers. revenue from contracts withcustomersduring2018/19duetotheadoptionof IFRS15, Revenuefrom Contracts As discussedinNote2totheconsolidated financialstatements, theCorporation haschangeditsmethod of accounting for Emphasis of Matter –ChangeinAccountingPolicy We believethat theauditevidence wehaveobtainedissufficientandappropriate to provide abasis forouropinion. financial statements inCanadaandwehavefulfilledourotherethical responsibilities in accordance with these requirements. We are independentof theCorporation inaccordance withtheethicalrequirements that are relevant toourauditof the report. auditors’ those standards are furtherdescribedinthe“Auditors’Responsibilitiesfor theAuditof theFinancialStatements ” sectionof our We conducted ourauditinaccordance withCanadiangenerallyaccepted auditingstandards. Ourresponsibilities under Basis forOpinion then endedinaccordance withInternational FinancialReporting Standards (IFRS). of theCorporation asat March 31,2019, anditsconsolidated financialperformance andits consolidated cashflows fortheyear In ouropinion,theaccompanying financialstatements present fairly, inallmaterial respects, the consolidated financialposition (Hereinafter referred toasthe“financialstatements”). (“the Corporation”) whichcomprise: We haveauditedtheconsolidated financialstatements of Saskatchewan Telecommunications HoldingCorporation Opinion To TheMembersof theLegislative Assembly, Province of Saskatchewan AUDITORS’INDEPENDENT REPORT • • • • • •

the in and notestothec the c the c the c the c

onsolidated statement of cashflows for theyearthenended onsolidated statement of changesinequityfor theyearthenended onsolidated statement of income andothercomprehensive income for theyearthenended onsolidated statement of financialpositionas at March 31,2019 formation, otherthanthefinancialstatements andtheauditors’ report thereon, includedintheannual report. onsolidated financial statements, includingasummary of significant accounting policies

SASKTEL 2018/19 ANNUAL REPORT | 57

f material misstatement of the financial statements, whether due to fraud or error, design and design to fraud or error, whether due the financial statements, of misstatement f material f internal control relevant to the audit in order to design audit procedures that are appropriate in appropriate are that to design audit procedures in order to the audit relevant f internal control opriateness of management’s use of the going concern basis of accounting and, based on the audit accounting basis of the going concern management’s use of of opriateness

opriate audit evidence regarding the financial information of the entities or business activities within the financial information regarding audit evidence opriate te with those charged with governance regarding, among other matters, the planned scope and timing of the and timing of the planned scope among other matters, regarding, with governance te with those charged

valuate the overall presentation, structure and content of the financial statements, including the disclosures, and whether including the disclosures, financial statements, the of and content structure the overall presentation, valuate valuate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related and related estimates accounting of policies used and the reasonableness accounting of the appropriateness valuate internal control. internal control. going concern. Communica Obtain sufficient appr supervision for the direction, responsible We are an opinion on the financial statements. to express Corporation the Group audit opinion. our for solely responsible remain audit. We the group of and performance E fair presentation. achieves the underlying transactions and events in a manner that represent the financial statements that we identify during our audit. control any significant deficiencies in internal audit and significant audit findings, including the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s an opinion on the effectiveness expressing the purpose of for but not the circumstances, E made by management. disclosures Conclude on the appr cast significant doubt may that to events or conditions exists related uncertainty a material obtained, whether evidence exists, we are uncertainty a material that If we conclude as a going concern. ability to continue on the Corporation’s if such disclosures or, in the financial statements disclosures to the related auditors’ report in our to draw attention required our of obtained up to the date based on the audit evidence are opinion. Our conclusions to modify our inadequate, are as a to continue to cease may cause the Corporation events or conditions future However, auditors’ report. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud error, from one resulting fraud is higher than for from resulting misstatement not detecting a material The risk of internal control. or the override of intentional omissions, misrepresentations, forgery, may involve collusion, Obtain an understanding o risks o Identify and assess the provide a to is sufficient and appropriate that those risks, and obtain audit evidence to responsive audit procedures perform our opinion.basis for

• • • • • • • (“KPMG International”), a Swiss entity. KPMG Canada provides services to KPMG LLP. to KPMG services Canada provides KPMG entity. a Swiss International”), (“KPMG KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative KPMG International with affiliated of independent member firms network of the KPMG LLP is a Canadian limited liability partnership and a member firm KPMG May 30, 2019 May 30, Regina, Canada Chartered Professional Accountants Professional Chartered We also: We As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and professional we exercise auditing standards, generally accepted with Canadian an audit in accordance As part of the audit. throughout skepticism maintain professional Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could or in the aggregate, individually if, material considered and are error fraud or can arise from Misstatements financial statements. of the on the basis taken of users decisions the economic influence be expected to reasonably Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian accordance in an audit conducted not a guarantee that but is assurance, of is a high level assurance Reasonable when it exists. misstatement a material will always detect auditing standards generally accepted Auditors’ Responsibilities for the Audit of the Financial Statements Financial the of for the Audit Responsibilities Auditors’ material from free are as a whole statements financial whether the about assurance obtain reasonable to are Our objectives includes our opinion. that issue an auditors’ report and to or error, whether due to fraud misstatement, 58 | CONSOLIDATED FINANCIAL STATEMENTS Net income See Accompanying Notes Thousands of dollars Consolidated Statement ofChangesinEquity See Accompanying Notes All netincome andtotalcomprehensive income are attributable toCrown InvestmentsCorporation of Saskatchewan. Revenue Thousands of dollars For theyearendedMarch 31, Consolidated Statement ofIncomeandOtherComprehensive Balance a Other comprehensive income Total comprehensive income Total othercomprehensive income Other comprehensive income Net income Net financeexpense Results from operating activities Expenses Other income Total comprehensive income Dividends declared Net income Balance at April1,2017 Other comprehensive income Repayment of equityadvance Total comprehensive income Balance at March 31,2019 Dividends declared Balance at March 31,2018 Net actuarialgainsonemployeebenefitplans Items that willneverbereclassified tonetincome Sinking fundmarket valuegains Items that willbereclassified tonetincome Saskatchewan taxes Amortization Depreciation Internal labourcapitalized Salaries, wages,andbenefits Goods andservices purchased Impact of adoptionof IFRS15 As previously reported As restated t April1,2018 Note 25 5,0 $1011$7350 1,073,691 $ 723,520 $ 100,171 $ 250,000 $ 3,0 $1432$8386$1,165,168 $ 823,806 $ 104,362 $ 237,000 $ 5,0 $(,4)$7146$954,672 $ 711,416 $ (6,744) $ 250,000 $ 5,0 $1011$7350$1,073,691 $ 723,520 $ 100,171 $ 250,000 $ advances 250,000 13,000 Equity – – – – – – – – – Ac cumulated other comprehensive income (loss) 100,171 106,915 106,915 Note 4,191 4,191 23 15 14 13 3 6 5 4 – – – – – – R etained earnings $ 131,622 $ see Note2) 1,279,637 1,124,666 1,283,015 (23,741) 127,431 158,349 163,501 370,309 553,152 (restated 1,6 1,161,234 811,063 127,431 127,431 114,688 30,918 27,073 34,372 121,035 121,035 108,931 87,543 4,026 3,378 4,191 2019 165

– – – 1,253,177 $ 227,950 $ 1,098,991 1,254,557 127,431 131,622 114,688 121,035 106,915 227,950 108,931 106,189 121,035 155,566 157,566 377,768 523,346 106,915 (26,634) 87,543 13,000 34,531 26,768 40,177 equity 4,191 1,380 T 2018 otal 726 SASKTEL 2018/19 ANNUAL REPORT | 59 – – – – – – 575 2018 6,013 9,150 23,964 55,168 68,693 31,849 16,118 26,506 118,232 250,000 100,171 723,520 214,656 408,171 953,494 331,014 155,564 143,069 1,073,691 1,416,220 1,779,527 $ 17,292 $ 2,489,911 $ 169,903 $ 2,489,911 – 479 2019 6,721 9,123 6,774 15,019 20,089 41,547 57,289 20,878 44,598 25,815 14,475 56,984 24,880 139,057 104,362 823,806 237,000 278,122 446,165 281,020 176,021 193,295 1,165,168 1,496,935 1,854,690 1,003,280 $ 5,121 $ 2,662,103 $ 161,883 $ 2,662,103 7 8 9 25 12 29 10 11 11 12 13 19 21 22 23 24 14 19 20 15 16 17 18 Note ylvestre Glenys S

Cash Trade and other receivables Trade Inventories Accumulated other comprehensive income other comprehensive Accumulated earnings Retained Equity advance Contract costs Prepaid expenses Prepaid Contract assets Contract liabilities Other liabilities Trade and other payables and Trade Dividend payable Notes payable Grant Kook Grant Kook See Accompanying Notes See Accompanying the Board On behalf of May 30, 2019 May 30, Assets assets Current Consolidated Statement of Financial Position of Financial Statement Consolidated 31, March As at dollars of Thousands Commitments and contingencies equity Saskatchewan's of Province Contract assets Contract costs plant and equipment Property, Contract liabilities revenue Deferred income – government funding Deferred Long-term debt Employee benefit obligations Provisions Intangible assets Sinking funds Other assets equity Liabilities and Province's liabilities Current 60 | CONSOLIDATED FINANCIAL STATEMENTS Net changeinnon-cashworkingcapital See Accompanying Notes Adjustments toreconcile netincome tocashprovided byoperating activities: Net income Operating activities Thousands of dollars For theyearendedMarch 31, Consolidated Statement ofCashFlows Proceeds from long-termdebt Financing activities Government funding Intangible assetexpenditures Property, plantandequipmentexpenditures Investing activities Sinking fundinstalments Net proceeds (repayment) of notes payable Repayment of equityadvance Cash, endof year Cash, beginningof year Increase (decrease) incash Dividends paid Other Amortization of governmentfunding Interest received Interest paid Net finance expense Depreciation andamortization 22, 26b 15, 26b 25, 26b 13, 14 Note 26b 26b 26a 21 21 6 127,431 $ 5,121 $ (262,347) (234,065) (116,314) (47,761) (28,282) (23,660) (12,391) (13,000) (12,171) (42,116) 197,873 292,292 (6,000) 30,918 49,363 50,226 17,292 4,736 8,755 2019 – 121,035 $ 17,292 $ (292,984) (244,951) 197,743 332,684 101,127 (43,744) (51,112) (34,036) (10,641) (33,475) (89,925) 34,531 21,644 (6,260) 11,067 1,256 6,479 3,079 6,225 2018 – SASKTEL 2018/19 ANNUAL REPORT | 61

in connection with a business combination are expensed as incurred. are with a business combination in connection Transaction costs, other than those associated with the issue of debt or equity securities, that the Corporation incurs the Corporation debt or equity securities, that with the issue of other than those associated costs, Transaction The accounting policies, estimates, and judgments included in this section relate to the consolidated financial statements, to the consolidated this section relate and judgments included in policies, estimates, The accounting at the acquisition date. the identifiable net assets, amount of the recognized of share its proportionate or at Accounting policies, estimates, and judgments Accounting policies, estimates, The consolidated financial statements have been prepared on the historical cost basis, except for certain items that are not are certain items that for cost basis, except on the historical have been prepared financial statements The consolidated policies. as noted in specific accounting historical cost carried at currency and presentation Functional functional currency. which is the Corporation’s in Canadian dollars, presented are financial statements The consolidated The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards Financial with International in accordance have been prepared financial statements The consolidated (IASB). Board Standards Accounting (IFRS), as issued by the International Note 2 – Basis of presentation and as well as estimates financial statements to the consolidated relate that policies accounting the Corporation’s Certain of are financial statements, in the consolidated has made and how they impact amounts reported judgments the Corporation or judgment is applicable to a specific note to the accounts estimate, policy, an accounting in this section. Where incorporated and applied by the either effective were that note. This note also describes new standards the policy is described within that not yet effective. were or that year, current during the Corporation The Corporation elects on a transaction-by-transaction basis whether to measure non-controlling interest at its fair value, at interest non-controlling elects on a transaction-by-transaction basis whether to measure The Corporation Accounting policies have been applied consistently by the Corporation and its subsidiaries throughout all periods presented all periods presented and its subsidiaries throughout by the Corporation policies have been applied consistently Accounting unless otherwise indicated. consolidation Basis of Accounting policies Business combinations including the recognized transferred, the consideration of goodwill as the fair value measures For acquisitions, the Corporation the identifiable amount (generally fair value) of less the net recognized in the acquiree, interest any non-controlling amount of purchase a bargain is negative, When the excess the acquisition date. as of and liabilities assumed, all measured assets acquired in net income. immediately gain is recognized as a whole. Estimates and judgments may impact reported amounts of revenue and expenses, reported amounts of assets and amounts of reported and expenses, revenue amounts of and judgments may impact reported as a whole. Estimates contingencies. of liabilities, and disclosure Saskatchewan Telecommunications Holding Corporation (the Corporation) is a corporation located in Canada. The address The address in Canada. located is a corporation (the Corporation) Corporation Holding Telecommunications Saskatchewan is a Saskatchewan Corporation SK, S4P 3Y2. The Regina, Drive, Saskatchewan is 2121 office registered the Corporation’s of Corporation Holding Telecommunications The Saskatchewan the authority of under operating corporation Crown Provincial taxes income to Federal or Provincial not subject subsidiaries are and its wholly owned the Corporation Act and, as such, Notes to Consolidated Financial Statements Financial to Consolidated Notes General information Note 1 – One of the Corporation’s subsidiaries, Saskatchewan Telecommunications (SaskTel) is regulated by the Canadian is regulated (SaskTel) Telecommunications subsidiaries, Saskatchewan the Corporation’s One of , the Corporation has been designated as a subsidiary of Crown Investments Crown as a subsidiary of has been designated Act, 1993, the Corporation Corporations The Crown By virtue of consolidated in the included are of the Corporation results the financial (CIC). Accordingly, Saskatchewan of Corporation corporation. Crown a Provincial CIC, of financial statements security, equipment, marketing, entertainment, internet, data, voice, wireless, of and supplies a range markets The Corporation and services. products and consulting software, in Canada. (Canada). Act under the Telecommunications (CRTC) Commission Telecommunications Radio-television and 62 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES to variabilityof returns from theCorporation’s involvement withtheinvestee. members; therighttodirect theinvesteetoenterintotransactionsfor theCorporation’s benefit;andtheexposure, orrights, other shareholders; theextentof participation bythoseshareholders inappointingkey managementpersonnelorboard activities of theinvestee.Consideration isgivento:votingrights;therelative size anddispersionof thevotingrightsheldby Judgment involvesassessingcontrol, whichentailsdeterminingwhethertheCorporation hasthepowertodirect therelevant Accounting estimates, andjudgments are eliminated inpreparing theconsolidated financialstatements. Inter-company balances andtransactions,anyincome andexpensesarisingfrom inter-company transactions, Transactions eliminated onconsolidation of theconsolidated entity. Throughout thesefinancialstatements, thephrase“theCorporation” isusedto collectively describetheactivities may beimpaired, thentherecoverable amountisdeterminedfor theCGU to which thecorporate assetbelongs. The Corporation’s corporate assetsdonot generate separate cashinflows. Ifthere isanindication that a corporate asset reporting purposes. is subjecttoanoperating segmentceiling testandreflects thelowestlevel at whichthat goodwill ismonitored for internal allocated totheCGU, orthegroup of CGUs, that isexpectedtobenefitfrom thesynergies of the combination. Thisallocation specific totheasset.Forpurposes of goodwillimpairmenttesting,acquired inabusiness combination is present valueusingapre-tax discount rate that reflects current market assessments of thetimevalue of money andtherisks in useanditsfairvaluelesscosts tosell.Inassessingvalueinuse,theestimated future cashflowsare discounted totheir groups of assets(the cash-generating unitortheCGU). Therecoverable amountof anassetorCGU isthegreater of itsvalue of assets that generate cashinflows from continuing usethat are largelyor independent of thecashinflows ofotherassets For thepurposeof impairmenttesting,assetsthat cannotbetested individually are grouped together into thesmallestgroup lives, todeterminewhetherthere isanyindication that theyhavesuffered animpairmentloss. the carryingamountsof itsassetsinuse,includingproperty, plantandequipment,identifiableintangibleassets withfinite if eventsorcircumstances indicate there may beanimpairment.Attheendof eachreporting period,theCorporation reviews are notsubjecttoamortization andare testedat leastannuallyfor impairment(typicallyinthethird quarter),ormore frequently Assets that haveanindefiniteusefullife (i.e.spectrumlicences andgoodwill)orintangibleassetsthat are notyet ready for use Accounting policies Impairment testing financial statements, are prepared and released publicly: Separate auditedfinancialstatements for each of theundernotedwhollyowned corporations, whichare consolidated inthese commences untilthedate onwhichcontrol ceases. The financialstatements of subsidiariesare includedinthe consolidated financialstatements from the date onwhich control through itspower overtheentity. it isexposedto,orhasrightsvariablereturns from itsinvolvementwiththeentityandhasabilitytoaffect those returns A subsidiaryisanentitythat iscontrolled byanotherentity, knownastheparent. TheCorporation controls anentitywhen The consolidated financialstatements includethefinancialstatements oftheCorporation anditssubsidiaries. Subsidiaries Note 2–Basisof presentation, continued SecurTek MonitoringSolutionsInc.(SecurTek) Directwest Corporation (Directwest) (SaskTel International) Saskatchewan Telecommunications International, Inc. Saskatchewan Telecommunications (SaskTel) Subsidiary

Security monitoring Marketing services andconsulting Telecommunications software solutions Telecommunications Principal Activity

SASKTEL 2018/19 ANNUAL REPORT | 63

alues based on quoted prices in markets that are not active or model inputs that are observable either directly observable either directly are not active or model inputs that are that in markets alues based on quoted prices alues based on prices or valuation techniques that require inputs, which are both unobservable and significant both inputs, which are require techniques that or valuation alues based on prices alues based on unadjusted quoted prices in active markets that are accessible at the measurement date the measurement at accessible are that in active markets alues based on unadjusted quoted prices or indirectly for substantially the full term of the asset or liability. the asset substantially the full term of for or indirectly V  V  to the overall fair value measurement. V identical assets or liabilities. for evel 2 - evel 3 - evel 1 - L L L

Foreign currency transactions currency Foreign Accounting policies the dates at rates exchange at the Corporation of functional currency to the translated are currencies in foreign Transactions to the translated are date the reporting at currencies in foreign the transactions. Monetary assets and liabilities denominated of gain or loss on monetary items is the difference currency The foreign date. that at rate the exchange at functional currency and payments interest effective the period, adjusted for the beginning of at in the functional currency cost between amortized period. the reporting the end of at rate the exchange at translated currency in foreign cost during the period, and the amortized rate using the exchange translated are currency in a foreign cost historical in terms of measured are Non-monetary items that the transaction. of the date at The three levels of the fair value hierarchy are: hierarchy the fair value levels of The three Fair value Fair Accounting policies between transaction a liability in an orderly to sell an asset or paid to transfer received would be that value is the price Fair using another observable or estimated is directly price that whether of regardless date, the measurement participants at market Level 1, 2, or 3 based on the into categorized are reporting purposes, fair value measurements financial technique. For valuation of the inputs. The Corporation’s observable and the significance are to which the inputs to the fair value measurement degree fair value. techniques used to measure the inputs to valuation prioritizes fair value hierarchy An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior losses recognized other assets, impairment of In respect is not reversed. goodwill of loss in respect An impairment exists. An impairment or no longer the loss has decreased that any indications for date each reporting assessed at periods are loss amount. An impairment used to determine the recoverable a change in the estimates has been if there loss is reversed would have been the carrying amount that amount does not exceed the asset’s carrying that only to the extent is reversed impairment loss had been recognized. if no or amortization, depreciation determined, net of and judgments Accounting estimates, assessing value for rate discount determining the appropriate asset or CGU; the appropriate Judgment involves identifying and judgments Accounting estimates, or other conditions periods due to market and may change in subsequent reporting a point-in-time at are value estimates Fair values) reasonable be determined using multiple methods, which can cause values (or a range of can factors. Estimates rates, and inflation discount liquidity, volatility, price, assumptions about future require may In addition, estimates to differ. realized. could be the amounts that reflect fair value may not accurately of variables. The estimates defaults, and other relevant significant to the fair value are inputs that assessment of level is based on the Corporation’s the hierarchy of Determination and judgment. and is subject to estimation measurement Note 2 – Basis of presentation, continued presentation, of 2 – Basis Note amount. recoverable its estimated exceeds or its CGU an asset of amount the carrying if loss is recognized An impairment reduce to first allocated are CGUs of in respect recognized Impairment losses in net income. recognized losses are Impairment in the the other assets of the carrying amounts reduce units, and then to to the allocated any goodwill amount of the carrying basis. rata on a pro units) of unit (group The Corporation cannot predict if specific events that potentially trigger impairment will occur, when they may occur, or may occur, when they impairment will occur, potentially trigger that if specific events cannot predict The Corporation cash flow potential or significant unanticipated asset amounts. Unexpected declines in future reported how they may affect impairment. impact carrying values and the potential for technology changes could in use; and making assumptions about future cash flows and market conditions over the long-term life of the assets or CGUs. of the assets or long-term life conditions over the cash flows and market about future in use; and making assumptions 64 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Depreciation expense–increase Millions of dollars Total Accretion expense–increase corresponding increase indecommissioning liabilities.Theimpactsonnetincome are asfollows: The impactof initialrecognition at April1,2018, isanincrease inproperty, plantandequipmentof $5.6 millionanda Provisions. Previously, theseliabilitieswere estimated tonotbesignificant. The Corporation hasrecognized estimates related todecommissioning liabilitieseffective April1,2018, seeNote – 24 Changes inaccountingestimates related financialdisclosures. Additional significantaccounting policies,estimates, andjudgmentsare disclosedthroughout the following noteswiththe Additional accountingpolicies adopted for thecurrent year. Certain of the2017/18comparative information hasbeenreclassified to conform withthefinancialstatement presentation Comparative information Note 2–Basisof presentation, continued oeTopic Note 0Otherliabilities 20 0Prepaid expenses 10 8Notespayable 18 6Otherassets 16 9Cnrc iblte X Contractliabilities 19 14 2Contractcosts 12 13 5Sinkingfunds 15 17 1Contractassets 11 8 e iac xes X Netfinance expense 6 Inventories 9 Otherincome 4 3 Saskatchewan taxes 5 Cash 7 customers contracts with Revenue from payables Trade andother Intangible assets equipment Property, plantand receivables Trade andother Accounting Accounting Policies X X X X X X X X X X X Accounting Judgments Estimates and 75 X 71 X 79 77 X 76 X X 75 74 X X 83 X Page 73 73 82 73 75 74 82 81 82 83

$ $ 0922 0122 2023 2022 2021 2020 2019

oeTopic Note . $ 0.5 $ 0.2 0.3 30 28 29 26 24 2Long-term debt 22 3Epoe eeisX Employeebenefits 23 25 27 21

funding – government Deferred income Provisions obligations Future performance contingencies Commitments and transactions Related party management and related risk instruments Financial capital disclosures Equity advance and information flows –supporting statement of cash Consolidated

. $ 0.5 $ 0.2 0.3 Fiscal yearendingMarch 31,

. $ 0.5 $ 0.2 0.3 Accounting

Policies X X X X

. $ 0.5 $ 0.2 0.3 Accounting

Judgments Estimates and

83 X 85 X 90 X 99 X 91 X . $ 0.5 $ 0.2 0.3 2024 and

beyond Page 100 84 99 94 92

9.6 5.0 4.6 SASKTEL 2018/19 ANNUAL REPORT | 65

e; and tisfied and unsatisfied performance obligations; performance tisfied and unsatisfied tion will not retrospectively restate contract modifications for all contract modifications that occur before occur before that contract modifications for all modifications contract restate tion will not retrospectively tion may apply the standard to a portfolio of contracts. Specific contract types will be assessed to determine Specific contracts. of to a portfolio tion may apply the standard tion will not adjust the promised amount of consideration for the effects of a significant financing the effects for consideration amount of tion will not adjust the promised tion will recognize revenue from contracts where the right to consideration from a customer corresponds a customer corresponds from the right to consideration where contracts from revenue tion will recognize tion will apply the standard retrospectively only to contracts that are not completed contracts at the at contracts not completed are that only to contracts retrospectively tion will apply the standard tion will recognize the incremental costs of obtaining contracts as an expense when incurred if the as an expense when incurred obtaining contracts of costs the incremental tion will recognize ting the transaction price to the satisfied and unsatisfied performance obligations. performance and unsatisfied to the satisfied ting the transaction price Corporation will not disclose the aggregate amount of the transaction price allocated to the performance obligations performance the to allocated price transaction the of amount aggregate the disclose not will Corporation Identifying the sa Determining the transaction pric Alloca

ii. iii. i. The an original expected have contracts that for reporting period of the end of the as (or partially satisfied) unsatisfied are that with directly a customer corresponds from the right to consideration where one year or less and contracts of duration in the amount to which the Corporation to date completed performance the Corporation’s the value to the customer of has the right to invoice;  The Corpora when: the standard of initial application of the date if the portfolio method is most appropriate. method if the portfolio The Corpora  The Corpora  when the Corporation the period between that inception, the contract expects, at if the Corporation component will be one year or less; the service and when the customer pays for to the customer the good or service transfers directly with the value to the customer of the Corporation’s performance completed to date in the amount to which the to date completed performance the Corporation’s with the value to the customer of directly to invoice; has the right Corporation The Corpora The Corpora  date of initial application; of date amortization period would have been one year or less; andamortization The Corpora ) f g) e) d) c) a) b)

The application of IFRS 15 has significant impacts on the recognition of revenue, specifically from wireless contracts, and the wireless from revenue, specifically of recognition on the IFRS 15 has significant impacts of The application impacts are the significant changes and quantitative The details of contracts. customer to acquire incurred costs of treatment set out below. stores corporate devices through wireless Sale of was not was limited to the amount that revenue store, a corporate sold in a bundled package through devices For wireless the customer upon from received consideration typically the amount of services, wireless future of on the provision contingent in the included and services to all products allocated is in a contract the total consideration Under IFRS 15, signing the contract. determined based on the list prices are The stand-alone selling prices based on their stand-alone selling prices. contract, at which the Corporation sells wireless devices and services. devices sells wireless which the Corporation at (IFRS 15) with a date of initial application initial application of (IFRS 15) with a date with Customers Contracts has adopted IFRS 15 Revenue from The Corporation has applied IFRS 15 using the the Corporation IFRS 15, of provisions with the transition In accordance April 1, 2018. of applying IFRS 15 as an adjustment to the of initially effect the cumulative recognizing i.e. by method; effect cumulative and has not been restated information comparative As a result, April 1, 2018. at earnings retained of opening balance Transfers (IAS 11) and IFRIC 18 Contracts (IAS 18), IAS 11 Construction under IAS 18 Revenue to be reported continues has elected the Corporation IFRS 15, at the time. In adopting in effect Customers (IFRIC 18), the standards Assets from of expedients: to apply the following Revenue from Contracts with Customers Contracts IFRS 15 Revenue from of Adoption Application of new International Financial Reporting Standards Financial Reporting of new International Application was that standard issued the following Committee (IFRIC) Interpretations Financial Reporting the International The IASB and the Corporation. applied by Note 2 – Basis of presentation, continued presentation, of 2 – Basis Note 66 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Opening balanceunderIFRS15at April1,2018 Total equityadjustments Closing balanceunderprevious standardsat March 31,2018 Retained earnings Thousands of dollars Transition The impactsof adoptionof IFRS15are asfollows: when theeventoccurs. to customerretention are recognized overtheremaining termof thecontract. Incentives specifictoaneventare recognized Incentives related toacontract asawholeare includedintheallocation of consideration withinthecontract. Incentives related these incentives are recognized basedonthepattern of deliveryof theperformance obligations asaresult of theincentive. point intimetheincentive wasavailabletothecustomerorover theremaining term of thecustomercontract. UnderIFRS15, Incentive amountsprovided tocustomerswere recognized basedon the intentof theincentive andrecognized eitherat the Customer incentives performance obligations includedinspecific contracts. to specificperformance obligation andassuchare includedasa component of the consideration allocated totheother The Corporation previously recognized activation fees overtheterm of thecontract. UnderIFRS15thesefees donotrelate Activation fees recognized whentherelated service isperformed. These amountswere amortized overthetermof theanticipated customerrelationship. UnderIFRS15, theseamountsare Service connectionchargerevenue andexpense expected toberecovered. costs are amortized consistently withthepattern of revenue of therelated contract ifthecosts of obtainingthecontract are commissions andcustomeracquisitioncosts are capitalized ascosts of obtainingacontract whentheyare incremental. These when theywere incurred, andcustomeracquisitioncosts related toservice contracts asintangibleassets.UnderIFRS15, the The Corporation previously recognized commissions payable to dealersandemployeesrelated tocontracts as selling expenses Cost of obtainingcustomercontracts Corporation sellswireless devices andservices. Inaddition,direct costs are recognized ingoodsandservices purchased. and services includedinthecontract. Thestand-alonesellingprices are determinedbased onthelistprices at whichthe included intheCorporation’s revenue. Theconsideration isallocated basedonthestand-alonesellingprice of theproducts the principalandthustotalconsideration inacontract isallocated toallproducts andservices includedinthecontract and as thedealerwasdeterminedtobeprincipalintransaction.UnderIFRS15, theCorporation isdeemedtobeactingas For wireless devices soldinabundledpackagethrough dealers,norevenue wasrecognized bytheCorporation underIAS18, Sale of wireless devicesthrough dealers Note 2–Basisof presentation, continued Customer incentives Service connection charge expenses Service connection charge revenue Activation fee revenue Costs of obtainingcustomercontracts Device salesthrough corporate stores anddealers Impact of adopting IFRS 15 Impact of adoptingIFRS15 at April1,2018 $ $ 723,520 811,063 (2,867) (4,793) 76,783 87,543 9,366 1,267 7,787

SASKTEL 2018/19 ANNUAL REPORT | 67 165 4,191 4,026 3,378 30,918 27,073 34,372 127,431 158,349 163,501 370,309 553,152 (23,741) 1,124,666 of IFRS 15 of 1,283,015 As reported As reported $ 131,622 $ 1,279,637 upon adoption upon adoption – – – – – – – – – (9,361) (9,361) (8,617) 32,961 41,578 23,600 IFRS 15 Impact of Impact of 165 4,191 4,026 3,378 30,918 27,073 42,989 IFRS 15 136,792 167,710 (23,741) 163,501 370,309 511,574 1,091,705 1,259,415 impacts of impacts of Excluding the the Excluding $ 140,983 $ (9,361) $ 1,256,037 $ 23,600 Items that will never be reclassified to net income to will never be reclassified Items that Net actuarial gains on employee benefit plans Items that will be reclassified to net income will be reclassified Items that value gains Sinking fund market Total comprehensive income comprehensive Total Total other comprehensive income other comprehensive Total Other comprehensive income Other comprehensive Net income Net finance expense Results from operating activities operating Results from Saskatchewan taxes Saskatchewan Amortization Internal labour capitalized Depreciation Salaries, wages, and benefits Expenses purchased Goods and services Revenue Other income Thousands of dollars of Thousands Note 2 – Basis of presentation, continued presentation, of 2 – Basis Note income on net Impact 31, 2019 ended March For the year 68 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Retained earnings Accumulated othercomprehensive income Equity advance Province of Saskatchewan's equity Provisions Employee benefitobligations Long-term debt Deferred income–governmentfunding Deferred revenue Contract liabilities Other liabilities Contract liabilities Notes payable Dividend payable Trade andotherpayables Current liabilities Liabilities andProvince's equity Other assets Sinking funds Intangible assets Property, plantandequipment Contract costs Contract assets Contract costs Contract assets Prepaid expenses Inventories Trade andotherreceivables Cash Current assets Assets 1. Reclassification of certain amounts to conform withIFRS15 presentation requirements Thousands of dollars As at March 31,2019 Impact onthestatement of financialposition Note 2–Basisof presentation, continued Excluding the Excluding the ,9,3 $7,1 $(,4)$ (9,446) $ 78,815 $ 2,592,734 $ 6,8 $ $–$ – $ – $ 161,883 $ ,9,3 $7,1 $(,4)$ (9,446) $ 78,815 $ 2,592,734 $ ,2 $ $ – $ – $ 5,121 $ impacts of ,8,8 8,4 (9,361) 87,543 1,086,986 1,003,280 1,505,748 1,854,690 4,2 8,4 (9,361) 87,543 745,624 104,362 237,000 450,636 193,295 176,021 331,335 216,182 139,057 IFRS 15 14,475 25,815 058 (4,626) 70,578 24,880 456 332 (4,430) (3,302) 14,506 195 516 (5,212) (5,156) 51,915 20,089 6,721 ,2 (4,429) 4,821 – – – – – 894 (1,695) 58,984 – –

IFRS 15at date of adoption Impact of (8,728) 18,923 60,876 (4,395) 2,318 ,4 8,686 7,048 231 96 – – 870 (41,565) (8,750) – – – – – – – – – – – – Current period impact of FS1 Reclassifications IFRS 15 (1) (56,719) (110) 1,955 1,779 (110) (85) 25 – – – –

– – – – – – – – – – – 56,753 42,280 (417) (715) (715) 383 34 – – – –

– – – – – – – – – – – – – – – – – – – 1 upon adoption 2,662,103 $ 161,883 $ 2,662,103 $ 5,121 $ As reported of IFRS15 1,165,168 1,003,280 1,496,935 1,854,690 823,806 104,362 237,000 446,165 193,295 176,021 281,020 278,122 139,057 14,475 25,815 56,984 24,880 44,598 20,878 15,019 57,289 41,547 20,089 6,721 9,123 6,774 479 – SASKTEL 2018/19 ANNUAL REPORT | 69 4,736 6,620 8,755 36,355 33,043 30,253 28,903 30,918 (6,000) 292,292 182,458 155,997 197,873 361,794 (28,282) (23,660) (47,761) (234,065) of IFRS 15 of IFRS 15 of As reported As reported As reported $ (262,347) $ 1,279,637 $ 127,431 $ 444,214 upon adoption upon adoption upon adoption – – – – – – – – – – – 271 (512) 3,562 14,416 (8,617) 99,110 IFRS 15 IFRS 15 (14,416) Impact of Impact of Impact of Impact of 4,736 6,620 8,755 (6,000) 36,867 56,887 33,043 30,253 28,632 30,918 IFRS 15 IFRS 15 (42,698) (27,222) 306,708 (47,761) 182,458 206,490 361,794 (234,065) impacts of impacts of impacts of impacts of Excluding the Excluding Excluding the the Excluding $ (276,763) $ 14,416 $ 1,256,037 $ 23,600 $ 136,792 $ (9,361) $ 519,483 $ (75,269) Other services Amortization of government funding government of Amortization Other services Equipment and professional services distance Long services Marketing Security monitoring services services and consulting software International Net finance expense Net finance paid Interest received Interest services and enhanced Local maxTV services, internet, and data services internet, and data services, maxTV Depreciation and amortization and amortization Depreciation services Wireless Investing activities plant, and equipment expenditures Property, Intangible asset expenditures Net change in non-cash working capital Operating activities Operating Net income activities: by operating to cash provided income net Adjustments to reconcile Revenue Thousands of dollars Thousands of Impact on revenue classification Impact on revenue 31, 2019 For the year ended March Thousands of dollars of Thousands Note 2 – Basis of presentation, continued presentation, of 2 – Basis Note lines – selected cash flows of statement on the Impact 31, 2019 ended March For the year 70 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES mandatory for fiscalperiodsbeginning after March 31,2019. Theseinclude: Certain newstandards, interpretations, andamendmentstoexistingstandards were issuedbytheIASBorIFRICthat are New standardsandinterpretations notyetadopted Note 2–Basisof presentation, continued FS1 essIFRS16replaces IAS17andtherelated Description IFRS 16Leases Standard treating allleasesasfinance leases. leases (for thelessee–leasecustomer), of leasesaseitheroperating leasesorfinance sheets. IFRS16alsoremoves theclassification leases willbebrought ontocompanies’ balance interpretations. Underthenewstandard all cash flowsfrom financingactivities. flows from operations anda corresponding declinein lease expensewillresult inanimprovement incash Cash flow:Thechangeinpresentation of operating by amaterial amount. at April1,2019, netincome isnotexpectedtochange will berecognized. BasedontheCorporation’s leases from unwindingof thediscount ontheleaseliabilities charges onright-of-use assetsandtheinterest expense of operating leaseexpense,infuture, depreciation Net income:Incontrast tothepresentation todate significantly impacted. increase inleaseliabilities.Retained earningswillnotbe Net debtwillincrease accordingly duetothematerial $47.1 million(April1,2019)asaresult of thetransition. the statement of financialpositionwillbeapproximately recognition of leaseliabilities andright-of-use assetsin conducted oninitialapplication indicated theprobable to classifyleasesaccording toIAS17. Theanalysis particularly withregard to thecontinued requirement requirements for lessorsremain largely unchanged, or accrued at transition.Incontrast, theaccounting amount of theleaseliability, plusanypayments made The right-of-use assetwillgenerallybemeasured at the borrowing rate at thetimestandard isfirstapplied. payments, discounted usingthelessee’sincremental recognized at thepresent valueof theremaining lease in accordance withIAS17, theleaseliabilitywillbe leases that havebeenclassifiedtodate asoperating payment obligations entered intofor allleases.For received andliabilitiesmustberecognized for the future, assetsmustberecognized for therightof use a uniform approach tothepresentation of leases.In Financial position:IFRS16requires lesseestoadopt the Corporation: impacts ontheresults of operations andcashflows of consolidated statement of financialpositionwithlesser 16 willhaveamaterial impactoncomponents of the conducted ontheinitialapplication indicated that IFRS prior yearfigures willnotbeadjusted.Analysis accordance withthemodified retrospective approach, The Corporation willadoptIFRS16onApril1,2019, in Impact Early adoptionispermitted. practical expedientsavailable. retrospectively withcertain after January1,2019, applied Fiscal yearsbeginningonor Effective Date SASKTEL 2018/19 ANNUAL REPORT | 71

For wireline customers, products are usually paid in full at the point of sale and services are paid on a monthly basis except are sale and services the point of usually paid in full at are customers, products For wireline can generally that customers under long-term contracts business a billing schedule has been established with certain where extend up to five years. Product revenue from the sale of equipment is recognized when a customer takes possession of the product. Service revenue revenue Service the product. possession of takes when a customer equipment is recognized the sale of from revenue Product using output is recognized long-term contracts on certain Revenue provided. are over time, as the services is recognized time elapsed, or milestones met. For multiple element to date, completed performance delivered, methods based on products and other conditions market adjusted for prices determined using observable are arrangements, stand-alone selling prices business arrangements. customized for approach plus margin or the expected cost factors, as appropriate, or to resellers and other carriers. or to resellers Revenue is also generated from providing data, including internet access and internet protocol television (IPTV), local, long and internet protocol including internet access data, providing from is also generated Revenue and business customers. to residential and products services communications as well as other and security services, distance, from services wholesale business, which sells telecommunications the Corporation’s amounts from also includes Revenue and on a monthly basis for services. For wireless products and services sold in multiple element arrangements, customers and services products For wireless services. and on a monthly basis for business customers. customers and up to 36 months for residential months for 24 up to term of pay monthly over a contract For multiple element arrangements, the Corporation accounts for individual products and services when they are separately when they are and services products individual for accounts arrangements, the Corporation For multiple element consideration arrangement on its own. The total product or service is from the customer can benefit identifiable, and the its stand-alone selling price. with the customer based on included in the contract or service to each product allocated Note 3 – Revenue from contracts with customers with from contracts 3 – Revenue Note policies Accounting salesand excludes with a customer in a contract the expected consideration of based on the value is measured Revenue is or service a product of control when is recognized Revenue parties. third on behalf of amounts collected and other taxes value with the directly corresponds a customer from to consideration right Corporation’s When the to a customer. transferred amount to which in the revenue recognizes Corporation the to date, transferred and services the products of to the customer has a right to invoice. the Corporation Product revenue from the sale of wireless handsets and devices is recognized when a customer takes possession of the possession of takes when a customer is recognized and devices handsets wireless the sale of from revenue Product element arrangements, For multiple provided. are over time, as the services is recognized revenue service Wireless product. and other factors, conditions market adjusted for determined using observable prices are stand-alone selling prices Wireless revenue is principally generated from providing integrated digital wireless voice and data communications products products communications data and voice digital wireless integrated providing from is principally generated revenue Wireless business customers. and to residential and services Capitalized costs are amortized on a systematic basis that is consistent with the period and pattern of transfer to the customer transfer of with the period and pattern is consistent basis that a systematic on amortized are costs Capitalized or services. products the related of A contract asset is recognized when the Corporation’s right to consideration from the transfer of products or services to or services products of the transfer from right to consideration when the Corporation’s asset is recognized A contract to trade transferred assets are Contract or services. other products to transfer on the obligation a customer is conditional liability is A contract time. only as to the passage of conditional becomes consideration when the right to receivables Contract the customer. to or services products of the transfer of in advance is received when consideration recognized to customers. When the services provide and others who enter into arrangements with subcontractors may The Corporation based on the amounts billed revenue recognizes principal in these arrangements, the Corporation acts as the Corporation contract and prepaid commissions sales of principally comprised with a customer, obtaining a contract of costs Incremental position. of financial in the statement recognized costs, are fulfillment products sale for the point of customers usually pay in full at sold separately, are that and services products For wireless Stand-alone selling prices are generally determined based on the observable prices at which the Corporation sells products sells products Corporation which the at based on the observable prices generally determined are Stand-alone selling prices adjusted of services, with the same range offerings non-bundled service for and prices contract without a service separately the not sold separately, are and services When similar products factors, as appropriate. and other conditions market for and services Products prices. to determine stand-alone selling approach plus margin uses the expected cost Corporation separately. for accounted are those included in the bundled arrangement of in excess by a customer purchased on a net basis. presented are to the same contract assets and liabilities relating as revenue. retains the Corporation the net amount that recognizes to customers. Otherwise, the Corporation as appropriate. 72 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Revenue Thousands of dollars For theyearendedMarch 31, Supporting information the costs meetthedeferral criteriawithinIFRS15andwhetherthecosts will berecoverable. obtain acontract includingtheidentification of incremental costs also requires judgment.Thisincludesdeterminingwhether distinct, andthetimingof satisfaction of performance obligations underlong-termcontracts. The determination of costs to obligations withinacontract, includingthedetermination of whetherapromise todelivergoodsorservices isconsidered of products andservices, determiningthestand-alonesellingprices of products andservices, identification of performance of revenue from contracts withcustomers, includingestimates andjudgmentsrelated to;determiningthetransactionprice The application of IFRS15requires theCorporation tomake judgmentsandestimates that affect theamountandtiming Accounting estimates, andjudgments the contract orbasedonspecifieddeliverableswithinthe contract. related product orservice; andfor professional service contracts andmultipleelementcontracts, eitheruponcompletion of due inaccordance withthetermsof thecontract withthecustomer:for perpetuallicences, typicallyupondeliveryof the method. Amountsbilledorpaidinadvance of services provided are recorded ascontract liabilities.Customerpaymentsare contract. Revenue for customized software projects andconsulting services isrecognized usingthepercentage-of-completion arrangements, are recognized asservices are rendered. Supportandmaintenance fees are recognized overthetermof the of performance obligations tobedelivered. Feesfor professional services, otherthaninthecontext of multipleelement perpetual licence andwhichare separate performance obligations. Revenue isrecognized inaccordance withthe assessment the arrangementincludesmultipleelements,elementsare assessedtodeterminewhichelementsare integraltothe Revenue for perpetuallicences isrecognized ondeliveryoraccording to thetermsof thelicence agreement. Where payments are due monthlyastheservices are provided. date. Amountsbilledinadvance for marketing services are deferred andrecognized overthetermof thecontract. Customer with thecontractual termswiththeadvertisers,onamonthlybasisoverlife of theservices, commencing withthedisplay sale of print,online,andout-of-home marketing services. Marketing service revenue isgenerallyrecognized, inaccordance Marketing revenue isgenerated from conventional, digitalmedia,andout-of-home advertising.Revenue isearnedthrough the Note 3–Revenuefromcontracts withcustomers,continued International software andconsulting services Security monitoringservices Marketing services Long distance services Equipment andprofessional services Local andenhanced services maxTV service, internet,anddata services Wireless services Other services 444,214 $ $ 1,279,637 155,997 182,458 361,794 28,903 30,253 33,043 36,355 6,620 2019 512,479 $ 1,253,177 $ 197,578 349,761

26,805 33,657 37,246 49,856 36,866 8,929 2018

SASKTEL 2018/19 ANNUAL REPORT | 73 – 302 2018 2018 2018 1,072 4,080 6,983 6,260 4.28% (5,290) (3,164) (6,479) (9,643) 40,094 44,174 $ 44,312 $ 34,531 $ 1,380 $ 19,785 $ 26,768 $ (5,182) 244 243 2019 2019 2019 2,506 7,078 6,000 3,153 4.16% 43,226 43,713 (5,842) (8,755) (4,040) (12,795) $ 46,562 $ 30,918 $ 27,073 $ 3,378 $ 19,995 $ (5,775) 24 23 15 21 Note Note Amortization of government funding of Amortization Other Net loss on retirement or disposal of property, plant, and equipment plant, property, or disposal of retirement Net loss on Interest on provisions on provisions Interest Net interest on defined benefit liability Net interest Sinking fund earnings Interest income Interest Grants-in-lieu of taxes Grants-in-lieu of Other income (loss) Other income capital tax corporate Saskatchewan net income in consolidated Recognized on long-term debt Interest For the year ended March 31, For the year ended March dollars Thousands of Supporting information Finance expenses are composed of interest expense on borrowings, changes in the fair value of financial assets classified as fair the fair value of changes in expense on borrowings, interest of composed expenses are Finance on the net defined expense on financial assets, and the net interest recognized losses or loss, impairment profit value through assetof a qualifying construction, or production attributable to the acquisition, directly are costs that Borrowing benefit liability. as an expense. recognized are costs asset. Other borrowing that of the cost part of form Accounting policies financial assets classified as fair on funds invested, changes in fair value of income interest of is composed income Finance on the net defined benefit asset. income interest or loss, and net profit value through Note 6 – Net finance expense For the year ended March 31, For the year ended March dollars Thousands of Note 5 – Saskatchewan taxes Note 5 – Saskatchewan on short-term debt Interest capitalized Interest Note 4 – Other income 4 – Other Note 31, March year ended For the dollars of Thousands Net interest expense Net interest Finance expense Finance Interest capitalization rate capitalization Interest Finance income Finance Net finance expense 74 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Other High-cost servingarea subsidy Accounts receivable Thousands of dollars As at March 31, Supporting information for doubtfulaccounts willbeincreased byrecording anadditionalexpense. expected collection trends. Ifeconomic conditions orspecificindustrytrends become worsethananticipated, the allowance are basedonthelikelihood of collecting accounts receivable basedonpastexperience, takingintoconsideration current and Determining whenamountsare deemeduncollectible requires judgment.Estimates of theallowance for doubtfulaccounts Accounting estimates, andjudgments recourse bytheCorporation toactionssuchasformal collection activity, orthefinancialassetis90daysmore pastdue. accounts receivable tobeindefaultwhentheborrower isunlikely topayitscredit obligations totheCorporation infull,without the credit riskon afinancialassethasincreased significantlyifitismore than30dayspastdue.TheCorporation considers Corporation’s historicalexperience andinformed credit assessment,includingforward-looking information. Itisassumedthat available withoutunduecost oreffort. Thisincludesbothquantitative andqualitative information andanalysis,basedonthe estimating expectedcredit loss(ECL), theCorporation considers reasonable andsupportableinformation that isrelevant and When determiningwhetherthecredit riskof afinancialassethasincreased significantlysince initial recognition andwhen any provision for impairmentlossesof tradeaccounts receivable. to initialrecognition, tradeandotherreceivables are measured at amortized cost usingtheeffective interest method,less The Corporation initiallyrecognizes tradeandotherreceivables at fairvalueonthedate that theyare originated. Subsequent Accounting policies Note 8–Trade andotherreceivables using theeffective interest method. The Corporation classifiescashandequivalents,includingamountswithamaturity of 90daysorless, at amortized cost Accounting policies Note 7–Cash Allowance for doubtfulaccounts Accrued receivables –customer Customer accounts receivable Note 27 27 139,057 $ 110,092 $ 110,152 (2,396) 27,040 1,865 2,456 2019 118,232 $ 87,200 $

28,284 87,548 (2,349) 2,400 2,697 2018

SASKTEL 2018/19 ANNUAL REPORT | 75 2018 2018 2,531 4,528 1,512

$ 48,109 $ 55,168 $ 22,452 $ 23,964

– 965 2019 2019 1,155 $ 40,392 $ 41,547 $ 19,124 $ 20,089 Prepaid expenses Prepaid Deferred service connection charges connection service Deferred Short-term customer incentives Inventories for resale Inventories for Materials and supplies Materials When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when recognition initial significantly since a financial asset has increased risk of When determining whether the credit and is relevant that and supportable information reasonable considers the Corporation loss (ECL), expected credit estimating based on the and analysis, information and qualitative This includes both quantitative or effort. available without undue cost that It is assumed information. assessment, including forward-looking credit and informed historical experience Corporation’s than 30 days past due. significantly if it is more risk on a financial asset has increased the credit Amortization is recognized in net income consistent with the pattern of delivery of the related goods and services, ranging from ranging from services, goods and the related delivery of of with the pattern consistent in net income is recognized Amortization years. two to four – $0.4 million). – $0.4 Accounting policies to or services products of the transfer from right to consideration when the Corporation’s asset is recognized A contract to trade transferred assets are Contract or services. other products to transfer on the obligation a customer is conditional is liability time. A contract only as to the passage of conditional becomes when the right to consideration receivables Contract to the customer. or services products of the transfer of in advance is received when consideration recognized on a net basis. presented are to the same contract assets and liabilities relating Note 11 – Contract assets As at March 31, March As at dollars Thousands of For the year ended March 31, 2019, writedowns of inventory to net realizable value amounted to $0.2 million (2017/18 million value amounted to $0.2 realizable inventory to net writedowns of 31, 2019, For the year ended March Note 10 – Prepaid expenses The cost of inventories recognized as an expense during the year was $75.9 million (2017/18 – $74.4 million). – $74.4 million (2017/18 as an expense during the year was $75.9 inventories recognized of The cost As at March 31, March As at dollars Thousands of Supporting information In establishing the appropriate provision for supplies inventory obsolescence, management estimates the likelihood that the likelihood estimates management inventory obsolescence, supplies for provision the appropriate In establishing to inventory when charged Other supplies are to changes in technology. obsolete due become on hand will supplies inventory when used. or capitalized and expensed purchased and judgments Accounting estimates, value. net realizable of measure the appropriate Judgment involves determining Note 9 – Inventories Note policies Accounting inventories are Other supplies value. and net realizable cost weighted average of the lower valued at are resale for Inventories cost. and replacement average cost lower of the valued at 76 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES of therelated products orservices. Capitalized costs are amortized onasystematic basisthat isconsistent withtheperiodandpattern of transfer tothecustomer fulfillment costs are recognized inthestatement of financialposition. Incremental costs of obtaining acontract withacustomer, principallycomposed of salescommissions, andprepaid contract Accounting policies Note 12–Contractcosts Long-term portion Current portion Impairment allowance Contract terminations transferred totradereceivables Amortization of contract assets Contract assetsrecognized inthecurrent period Balance at April1,2018 Thousands of dollars As at March 31, Supporting information the impairmentallowance willbeincreased byrecording anadditionalexpense. current andexpected collection trends. Ifeconomic conditions orspecificindustrytrends become worsethananticipated, on thelikelihood of collecting therelated accounts receivable, whichisbasedonpastexperience, takingintoconsideration determining whenamountsare deemeduncollectible requires judgment.Estimates of theimpairmentlossesare based is considered distinct,andthetimingof satisfaction of performance obligations underlong-termcontracts. Inaddition, of performance obligations withinacontract, includingthedetermination of whetherapromise todelivergoodsorservices assets. Estimates andjudgmentsincludeestimates of thestand-alonesellingprices of products andservices, theidentification revenue from contracts withcustomers,whichalsoimpactsthedetermination of contract assetsandtheamortization of these The application of IFRS15requires theCorporation tomake judgmentsandestimates that affect theamountandtiming of Accounting estimates, andjudgments Note 11–Contract assets,continued 20,878 $ 78,843 $

(71,462) 157,611 (7,046) 79,103 57,289 78,167 78,768 (936) 2019

SASKTEL 2018/19 ANNUAL REPORT | 77

2019 (884)

53,978 53,978 23,683 77,661 59,617 15,019 (17,160)

$ 44,598 $ – 3–17 years 3–50 years 20–75 years Estimated useful life Estimated Asset Buildings and improvements Plant and equipment and equipment furniture Office As previously reported As previously Impact of IFRS 15 Impact of As restated Depreciation is recognized in net income on the straight-line basis over the estimated useful life of each part of an item each part of of useful life on the straight-line basis over the estimated in net income is recognized Depreciation less its residual value. less its residual plant and equipment as follows: property, of Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, an asset, or other amount substituted for of which is the cost amount, over the depreciable is calculated Depreciation When property, plant and equipment is disposed of or retired, the related cost and accumulated depreciation is eliminated from from is eliminated depreciation and accumulated cost the related or retired, plant and equipment is disposed of When property, of and the carrying amount between the sale proceeds gain or loss, determined as the difference Any resulting the accounts. for the year. in net income the asset, is reflected The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is the item in the carrying amount of is recognized plant and equipment property, an item of part of replacing of The cost cost can be measured and its benefits embodied within the part will flow to the Corporation economic the future that probable and plant property, the day-to-day servicing of of The costs part is derecognized. the replaced The carrying amount of reliably. as incurred. in net income recognized equipment are to the appropriate class of asset. class of to the appropriate Note 13 – Property, plant and equipment Note 13 – Property, Accounting policies impairment losses. and any accumulated depreciation less accumulated cost, at measured plant and equipment are Property, their intended use. for to bringing the assets to a working condition attributable directly are that Cost includes expenditures Borrowing costs. attributable and directly labour, direct services, assets includes materials, self-constructed of The cost period. Assets under during the construction capitalized are with major capital and development projects associated costs transferred which time they are use, at for and available operational until they are as in progress recorded are construction Depreciation methods, useful lives, and residual values are reviewed at each financial reporting date and adjusted if appropriate. reporting date each financial at reviewed values are methods, useful lives, and residual Depreciation As at March 31, March As at dollars Thousands of April 1, 2018 Balance at recognized Contract costs purchased included in goods and services Amortization Terminations Supporting information Note 12 – Contract costs, continued costs, 12 – Contract Note judgments and estimates, Accounting of the amount and timing affect that and estimates judgments to make the Corporation IFRS 15 requires of The application costs also of incremental the identification including obtain a contract to costs of The determination a contract. to obtain costs will the costs whether within IFRS 15, criteria meet the deferral whether the costs includes determining judgment. This requires contracts. under related obligations performance of satisfaction and the timing of be recoverable, Current portion Current Long-term portion 78 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES At March 31,2018 At April1,2017 At March 31,2019 At April1,2018 amounts Carrying Balance at March 31,2018 eieet,dsoas n dutet 2949 121 (26,596) (1,271) (249,429) Retirements, disposals,andadjustments Depreciation Balance at April1,2017 Balance at March 31,2019 Retirements, disposals,andadjustments eieet,dsoas n dutet 2394 368 (26,574) (3,658) Depreciation Balance at April1,2018 Accumulated depreciation (253,974) Balance at March 31,2018 Retirements, disposals,andadjustments Transfers Additions Balance at April1,2017 Balance at March 31,2019 Retirements, disposals,andadjustments Transfers Additions Balance at April1,2018 Cost Thousands of dollars Supporting information in impairmentsorchangestodepreciation expenseinfuture periods,particularlyifusefullivesare significantly reduced. of future technologies.Changesintheseassumptionscould result inmaterial adjustmentstoestimates, whichcould result of benefit,prospective changesare madetotheir remaining usefullives.Uncertainties are inherent inestimating theimpact the endof eachreporting period.Whenitisdeterminedthat assignedassetlivesdonotreflect theexpected remaining period The Corporation assessesitsexistingassetsandtheirusefullivesinconnection withthereview of networkoperating plansat accounting estimates. are accounted for bychangingthedepreciation periodormethodasappropriate, andare treated aschangesin in theexpectedusefullife ortheexpectedpattern of consumption of future economic benefitsembodiedintheasset Asset residual values andusefullivesare reviewed and adjustedifappropriate, at theendof eachreporting period.Changes of depreciation. extended assetlife orfunctionality;theestimated usefullife overwhichsuch costs shouldbedepreciated; andthemethod different depreciation methodsorrates are appropriate); which repairs andmaintenance constitute betterments, resulting in management withreference tofunctionality;theappropriate levelof componentization (for individualcomponents for which cessation of cost capitalization, considering thecircumstances inwhichtheassetistobeoperated, normallypredetermined by Judgment involvesdetermining:whichcosts are directly attributable (e.g.,labourandrelated costs); appropriate timingfor Accounting estimates, andjudgments Note 13–Property, plant andequipment, continued ,5,1 $3350 324 0,8 $3,7 $1,854,690 $ 1,779,527 38,670 $ $ 38,489 $ 103,484 $ 172,220 $ 63,204 $ 57,107 $ 393,520 $ 351,156 $ 1,255,812 $ 1,160,555 $ ,8,5 8,9 1,3 – – 2,576,782 $ – $ – $ 113,330 $ 181,497 $ 2,281,955 $ ,0,3 $1872 1,4 $ $ $2,587,185 $ – $ – $ 110,542 $ 168,712 $ 2,307,931 $ ,3,6 7,1 7,3 0,8 860$4,431,472 $ 38,670 $ 103,484 $ 176,534 $ 575,017 $ 3,537,767 $ ,6,8 $5988 6,4 $1220 849 4,366,712 $ 38,489 $ 172,220 $ 167,649 $ 519,868 $ 3,468,486 $ ,6,5 $3116 717 7,2 $3,8 $1,779,527 $ 1,693,234 38,489 $ $ 38,344 $ 172,220 $ 2,587,185 $ 145,736 $ 57,107 – $ 59,733 $ $ 351,156 $ – 355,028 $ 1,160,555 $ $ 1,094,393 $ 110,542 $ 168,712 $ 2,307,931 $ ,3,5 $1738 1,0 $ $ $2,706,915 $ – $ – $ 116,503 $ 157,358 $ 2,433,054 $ ,6,8 1,6 6,4 7,2 849$4,366,712 $ 38,489 $ 172,220 $ 167,649 $ 519,868 $ 3,468,486 $ ,2,4 $5236 7,3 $1576 834 4,400,149 $ 38,344 $ 145,736 $ 176,236 $ 512,386 $ 3,527,447 $ equipment Plant and (154,817) (160,434) 2,4 1,5 21,308 13,352 128,841 6,2 5,9 1,4 (2,2)(234) (226,721) 10,545 50,690 165,720 2,0 1,2 20,635 12,625 124,306 0,9 11,110 101,396 63,995 93,617 improvements Buildings and Buildings and ,5 (18,519) 4,459 57 (18,520) (567) 0 650 4,8 16 250,780 156 140,387 16,590 30 – 689 5,8 49 239,258 419 157,985 16,859 – Office furniture and equipment ,9 (113,903) 1,397 osrcinLand construction Plant under – – – 4 (174,498) (4) – – – – 1)(284,217) (11) – – (173,904) – – 163,501 – – (277,296) – – 157,566 – –

Total

– – SASKTEL 2018/19 ANNUAL REPORT | 79

1–10 years Estimated useful life Estimated Software Asset Amortization is recognized in net income on a straight-line basis over the estimated useful lives of the assets as follows: useful lives of estimated on a straight-line basis over the in net income is recognized Amortization Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For measurement of goodwill at initial goodwill at of For measurement subsidiaries is included in intangible assets. the acquisition of arises upon Goodwill that impairment less any accumulated cost at goodwill is measured . Subsequently, presentation see Note 2 – Basis of recognition, losses. Goodwill is not amortized. Costs associated with maintaining software as well as expenditures on research activities, undertaken with the prospect of prospect with the activities, undertaken on research as well as expenditures maintaining software with Costs associated as an expense as incurred. recognized and understanding, are gaining new scientific or technical knowledge Capitalized software is measured at cost less accumulated amortization and any accumulated impairment losses. and any accumulated amortization less accumulated cost at is measured software Capitalized Software development activities involve a plan or design for the production of new or substantially improved products and products improved new or substantially of the production design for development activities involve a plan or Software or product the reliably, be measured can costs only if development capitalized are Development expenditures processes. to and intends the Corporation and probable, benefits are economic future feasible, is technically and commercially process cost include the capitalized asset. The expenditures development and to use or sell the complete to resources has sufficient its intended use. Borrowing the asset for to preparing attributable directly are that costs and related labour, direct materials, of in net recognized are Other development expenditures capitalized. are qualifying assets of to the development related costs as incurred. income Intangible assets are recorded initially at cost of acquisition or development and relate primarily to software, spectrum licences, software, primarily to and relate or development acquisition of cost initially at recorded assets are Intangible it is when asset is recognized An intangible primarily to software. relate intangible assets Internally generated and goodwill. of the cost and the to the asset will flow to the Corporation attributable benefits economic the expected future that probable reliably. asset can be measured Note 14 – Intangible assets Intangible – 14 Note policies Accounting by controlled and to the Corporation, economic benefits to bring future identifiable, able defined as being assets are Intangible rights. contractual or arises from criterion when it is separable the identifiability An asset meets the Corporation. or groups of CGUs expected to benefit from the business combination in which the goodwill arose. combination the business expected to benefit from CGUs of or groups Goodwill is allocated to CGUs or groups of CGUs for the purpose of impairment testing based on the level at which it is based on the level at impairment testing the purpose of for CGUs of or groups to CGUs Goodwill is allocated is made to those CGUs segment. The allocation a level higher than an operating by management, and not at monitored Estimation is applied to determine expected useful lives used in the amortization of intangible assets with finite lives. Changes intangible assets of is applied to determine expected useful lives used in the amortization Estimation into an asset (taken of consumption of or the expected pattern changes in useful life from can result estimates in accounting period or method, as appropriate). by changing the amortization account Spectrum licences have been classified as indefinite-life intangible assets due to the current licencing terms, the most licencing intangible assets due to the current have been classified as indefinite-life Spectrum licences Should theserevocation. licence of material precedent regulatory fees and no renewal minimal are of which significant cost less any at recorded have been reassessed. Spectrum licences will be of indefinite-life factors change, the classification impairment losses. accumulated Accounting estimates, and judgments Accounting estimates, timing the appropriate amortization, the method of capitalization, eligible for Judgment is applied to determine expenditures intangible assets. assets as indefinite-life certain intangible of and classification capitalization, cost of cessation for 80 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Acquisitions reflect theexpected return andrisk for the CGU. plan, aswellterminalvalue capitalization. Theexpectedcashflowsandterminalvaluewere thendiscounted at arate to Management hasappliedthe value-in-use valuation methodologyfor theCGU usingtheBoard-approved 2020–2024 financial monitored for internalmanagementpurposes,which isnothigherthantheCorporation’s operating segments. – $1.2million)are allocated tooneCGU: Directwest. ThisisthelowestlevelwithinCorporation at which goodwillis For thepurposeof impairmenttesting, goodwill,andaportionof finite-life assetsunderdevelopment, $0.4 million(2017/18 under development Impairment testingforthecash-generating unitcontaininggoodwillandrecoverability testingof finite-lifeintangibleassets Acquisitions –internallydeveloped Balance at April1,2018 Cost Thousands of dollars Supporting information Note 14 –Intangible assets,continued Transfers Retirements, disposals,andadjustments Balance at April1,2017 Balance at March 31,2019 Disposals Transfers Acquisitions –internallydeveloped Acquisitions Amortization Balance at March 31,2018 Retirements, disposals,andadjustments Balance at April1,2018 Accumulated amortization Balance at April1,2017 Balance at March 31,2019 Amortization Disposals Balance at March 31,2018 At April1,2017 At March 31,2019 At April1,2018 amounts Carrying At March 31,2018 As restated Impact of adoptionof IFRS15 As previously reported As restated Impact of adoptionof IFRS15 As previously reported Goodwill ,7 $3238 2,9 $1878 227 641,376 $ 12,277 $ 108,738 $ 121,997 $ 392,388 $ 5,976 $ ,7 2,5 0,3 $219$545,270 $ 2,199 $ 108,738 $ – $ 428,357 $ 5,976 $ 3,3 $7,2 $ $ $310,362 $ – $ – $ 74,627 $ 235,735 $ – $ – 6,5 – – 264,250 $ – $ – $ – $ 264,250 $ – $ ,7 $1417 0,3 $219 281,020 $ 286,402 2,199 $ $ 12,277 $ 108,738 $ 108,738 $ – – $ 164,107 $ $ 159,411 $ 5,976 $ 5,976 $ ,7 $3032 0,7 $1878 147 594,704 $ 21,497 $ 108,738 $ 108,171 $ 350,322 $ 5,976 $ ,7 9,8 2,9 0,3 227$641,376 $ 12,277 $ 108,738 $ 121,997 $ 392,388 $ 5,976 $ – 0,7 $6,9 $ $ $275,872 $ – $ – $ 66,794 $ 209,078 $ – $ – 3,3 467$ $ $310,362 $ – $ – $ 74,627 $ 235,735 $ – $ ,7 $1124 137 0,3 $2,9 $318,832 $ 21,497 $ 108,738 $ 41,377 $ 141,244 $ 5,976 $ ,7 $1663 730 0,3 $1,7 $331,014 $ 12,277 $ 108,738 $ 47,370 $ 156,653 $ 5,976 $ ,7 395,146 5,976 – ,5 (121,997) 2,758 – – 3,743 – – 5,944 – – 29,369 – – (5,845) – – 34,372 – – – (4,583) 13,826 37,249 5,312 – 4,088 – – – – 234 7,833 32,344 – – (5,687) – 235,735 – (5,857) – Software – (74,627) – Customer accounts –18781,7 522,137 12,277 108,738 – – – – – – – – – – – – Spectrum licences – – 692 20,695 16,952 – – – (29,369) – – – – – – 913 37,017 (37,249) 19,103 – – – – – – –

development Under ,3 8,283 2,339 ,2 14,238 8,926 – (119,239) – – (5,845) – – 235,735 – – (74,627) – – 34,372 – – (4,583) – – 40,177 – – (5,687) –

(5,857) – Total – – SASKTEL 2018/19 ANNUAL REPORT | 81

726 2018 3,164 10,641 $ 141,033 $ 155,564 2019 4,040 4,026 12,391 $ 176,021 $ 155,564 12% 12% -2.5% Terminal value capitalization Terminal rate Growth Discount rate Discount Instalments Earnings Valuation adjustment Valuation Thousands of dollars Thousands of Balance at March 31, March Balance at The changes in the carrying amount of sinking funds are as follows: sinking funds are The changes in the carrying amount of Supporting information to pay annually into sinking funds, administered is required to the long-term debt, the Corporation attached Under conditions the debt outstanding. The fund includes the 1% to 2% of amounts representing Finance, Ministry of by the Saskatchewan gains or losses. revaluation of share earnings, and its proportional of share its proportional contributions, required Corporation’s Note 15 – Sinking funds Accounting policies intends to the Corporation because income comprehensive other value through Sinking funds have been classified as fair the business and therefore funding the assets are of the debt that the financial assets to the duration of the duration match realized as well as sale proceeds of principal and interest) cash flows (payments contractual model is to both hold to collect who makes Finance Ministry of the Saskatchewan managed through The investments are durations. of matching through and documented risk management with the Corporation’s value in accordance and sale decisions based on their fair purchase are income comprehensive other at fair value through financial assets Subsequent to initial recognition, investment strategy. in recorded losses are gains and and unrealized in net income recorded gains or losses are fair value. Realized at measured (OCI). income other comprehensive Balance at April 1, Balance at Note 14 – Intangible assets, continued assets, – Intangible 14 Note the to values assigned The set out below. are amount the recoverable of estimation used in the assumptions material The key from data based on historical and have been in the industry trends future of management’s assessment represent assumptions and internal sources. both external Impairment testing for the cash-generating unit containing indefinite-life intangible assets and recoverability testing of testing recoverability assets and unit containing indefinite-life intangible for the cash-generating Impairment testing assets under development finite-life intangible intangibleof finite-life and a portion assets (spectrum licences) intangible impairment testing, indefinite-life For the purpose of which indefinite-life at the Corporation This is the lowest level within to SaskTel. allocated are assets under development whichfor internal management purposes, monitored assets under development are intangible finite-life intangible assets and Impairment testing indicated no impairment at March 31, 2019. March at no impairment Impairment testing indicated The Corporation’s CGU impairment tests were based on fair value less costs to sell using comparable companies that are are that companies to sell using comparable based on fair value less costs impairment tests were CGU The Corporation’s (EV) to derive an Enterprise Value used were these companies for prices actively traded. Share and are listed on exchanges a demonstrable was then adjusted for that ratio (EBITDA) and amortization depreciation, taxes, interest, to earnings before was then applied to the adjusted ratio The resulting prices. with these publicly traded share associated minority discount no the unit. Impairment testing indicated of amount the unit to determine the recoverable of 2018/19 EBITDA estimated 31, 2019. March impairment at is not higher than the Corporation’s operating segments. operating Corporation’s is not higher than the 82 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES from April1,2019, toAugust1,2019, andhave aweightedaverageeffective interest rate of 1.88% (2017/18 –1.31%). Notes payableare duetotheProvince of Saskatchewan’s GeneralRevenue Fund (GRF).Thesenoteshavevaryingmaturities Supporting information The Corporation derecognizes afinancialliabilitywhenits contractual obligations are discharged orcancelled, orexpire. liabilities are measured at amortized cost usingtheeffective interest method. recognized initiallyat fairvalueplusanydirectly attributable transaction costs. Subsequenttoinitialrecognition, thesefinancial The Corporation initiallyrecognizes debtsecuritiesissuedonthedate that theyare originated. Suchfinancialliabilitiesare Accounting policies Note 18–Notespayable Other Payroll andotheremployee-related liabilities Trade payablesandaccrued liabilities Thousands of dollars As at March 31, Supporting information The Corporation derecognizes afinancial liabilitywhenits contractual obligations are discharged orcancelled, orexpire. the effective interest method. attributable transactioncosts. Subsequenttoinitialrecognition, thesefinancialliabilitiesare measured at amortized cost using to thecontractual provisions of theinstrument.Suchfinancialliabilitiesare recognized initially at fairvalueplusanydirectly The Corporation initiallyrecognizes trade andotherpayablesonthetradedate at whichtheCorporation becomes aparty Accounting policies Note 17–Trade andotherpayables Other Financing leases Long-term customerincentives Deferred service connection charges Thousands of dollars As at March 31, Note 16–Otherassets Sinking fundinstalmentsdueineachof thenextfiveyearsendingMarch 31are as follows: Note 15–Sinkingfunds,continued 2024 2023 2022 2021 2020 March 31, Years ending Thousands Thousands 12,916 $ of dollars 12,916 8,650 8,650 8,650

161,883 $ 119,435 $ 6,774 $ – $ 10,206 32,242 6,275 2019 2019 444 55 169,903 $ 128,103 $ 9,150 $ 2,262 $ 32,438 9,362 1,107 5,769 2018 2018 12 SASKTEL 2018/19 ANNUAL REPORT | 83 47

(23) 2018 2019 3,732 5,677 3,279 56,939 56,939 57,463 56,984 350,113 407,052 (349,566) $ 55,958 $ 68,693 $ – $ 479 – – 2019 5,711 3,379 $ 33 $ 9,123 21 Note As previously reported As previously Impact of adoption of IFRS 15 adoption of Impact of As restated Advance billings Advance Deferred customer activation and connection fees and connection customer activation Deferred – government funding income deferred portion of Current Customer deposits Risk management liabilities in its capacity as shareholder or as a government). in its capacity as shareholder the useful life of the asset. of the useful life and judgments Accounting estimates acting in their capacity as funding is a transaction with the shareholder in determining whether certain Judgment is required government acting a specific purpose (i.e. is the or whether the funding would be available to other parties for a shareholder Note 21 – Deferred income – government funding Accounting policies they will be received, that assurance is reasonable when there income initially as deferred recognized Government grants are for the Corporation compensate with the grant. Grants that associated with the conditions will comply and the Corporation on a systematic income and other comprehensive income of statement in the consolidated recognized are expenses incurred an of the cost for the Corporation compensate Grants that recognized. basis in the same period in which the expenses are basis over on a systematic income and other comprehensive income of statement in the consolidated recognized asset are Note 20 – Other liabilities 31, March As at dollars Thousands of As at March 31, March As at dollars Thousands of Balance at April 1, 2018 Balance at Contract liabilities recognized in revenue Recognized Terminations portion Current Long-term portion Supporting information Note 19 – Contract liabilities 19 – Contract Note policies Accounting to the services or products of the transfer of in advance is received when consideration is recognized liability A contract liabilities are on a net basis. Contract presented are same contract to the and liabilities relating Contract assets customer. obligations. performance the related of satisfaction upon in revenue recognized and judgments estimates, Accounting and timing the amount affect that judgments and estimates to make the Corporation 15 requires IFRS of The application and the timing of liabilities contract of which also impacts the determination with customers, contracts from revenue of of the stand-alone selling prices of estimates and judgments include Estimates liabilities as revenue. contract of recognition of whether the determination contract, including a within obligations of performance the identification and services, products under obligations performance of satisfaction of distinct, and the timing is considered or services to deliver goods a promise long-term contracts. 84 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Long-term portion Current portion Amortization Funding received Funding accrued Balance at March 31, Balance at April1, Thousands of dollars As at March 31, Supporting information The Corporation derecognizes afinancial liabilitywhenits contractual obligations are discharged orcancelled, orexpire. recognition, thesefinancialliabilitiesare measured at amortized cost usingtheeffective interest method. These financialliabilitiesare recognized initially at fair valueplusanydirectly attributable transaction costs. Subsequenttoinitial The Corporation initiallyrecognizes debt securitiesissuedandsubordinated liabilitiesonthedate that theyare originated. Accounting policies Note 22–Long-termdebt Balance at April1, Thousands of dollars As at March 31, obligations withrespect tothisprogram. dedicated internetservice tospecificFirstNations offices and all TribalCouncil offices (FTFN).TheCorporation hasfulfilled Also, inconjunction withanAANDCfundingagreement, theCorporation hasreceived fundingof $2.4 milliontoprovide obligations withrespect totheseprograms. provision of access tohighspeedinternetinruralandremote partsof Saskatchewan. TheCorporation hasfulfilledall (FNS&H), theFirstNations Service Improvement Project (FNSIP),andtheConnectingCanadiansprogram (CCDN) for the Corporation (SCN)totheCorporation, internetservice toselectedFirstNations schoolsandhealthfacilitiesinSaskatchewan Program (RIP),the transfer of thesatellite distributionandcommunications assetsof Saskatchewan Communications Network Science andEconomic DevelopmentCanada,asfullorpartialfundingof variousprograms including;theRuralInfrastructure well astheGovernmentof Canadathrough AboriginalAffairsandNorthernDevelopmentCanada(AANDC),Innovation, The Corporation hasreceived fundingfrom theProvince of Saskatchewan through CICandtheMinistryof Education, as Supporting information Note 21–Deferredincomegovernment funding,continued Amortiza L ong-term debtissues tion of debtdiscounts netof premiums ,3 $8 $435 ,0 $557 ,6 $25,815 $ 1,269 $ 5,527 $ 5,306 $ 4,395 $ 87 $ 9,231 $ 781 7 ,9 $574 ,4 $166$37,526 $ 1,626 $ 6,743 $ 5,784 $ 5,395 $ 177 $ 17,801 $ 356 3 485 ,4 615 ,0 31,526 1,303 6,135 5,545 4,895 132 13,516 78117 ,9 574 ,4 16637,526 1,626 6,743 5,784 5,395 177 17,801 ,8 4 50 3 608 239 500 45 4,285 ,8 4 0 29 0 336,000 323 608 239 500 45 4,285 I C NI N& CNFF Total FTFN CCDN FNS&H FNSIP SCN RIP – – – – – – – – – – – – 2019 – – 3 5,711 34 $1,003,280 953,494 $ – – 49,363 2019 423 – – 953,494 $ 851,949 $ 31,849 $ 43,762 $ 101,127 37,526 43,786 (3,055) 2018 5,677 6,260 3,079 2018 Total 418 SASKTEL 2018/19 ANNUAL REPORT | 85 –

2018 50,243 50,000 50,368 73,704 35,000 74,301 50,735 126,310 147,949 145,243 $ 149,641 $ 953,494 March 31, March

2019 Outstanding amount Outstanding 50,000 73,790 35,000 50,206 50,332 74,315 50,720 49,370 126,408 148,006 145,342 $ 149,791 $1,003,280 – – 206 332 720 (192) (685) (630) Years ending March 31, March ending Years premiums premiums (discounts) Unamortized Unamortized Par value 2020 2021 2022 2023 2024 $ – $ 276.6 $ – $ – – $ $ 1,011,600 $ (8,320) rate (%) rate Coupon 4.01 3.90 $ 150,000 $ (209) 3.11 4.15 2.56 3.20 5.97 4.15 5.18 2.65 50,000 3.49 5.75 50,000 4.09 5.60 50,000 3.35 3.40 75,000 3.22 3.90 35,000 150,000 3.01 3.30 (1,210) 150,000 3.30 2.95 75,000 (1,994) 50,000 (4,658) 50,000 10.18 10.08 126,600 rate (%) rate interest interest Effective Effective Maturity date Maturity July 2020 June 2024 2029 March 2029 March June 2048 June 2058 Millions of dollars Millions of Principal repayments The Corporation has a defined benefit pension plan (Plan A), a service recognition defined benefit plan (Plan B), and a defined recognition has a defined benefit pension plan (Plan A), a service The Corporation pension plan (Plan C). contribution Accounting policies Defined benefit plans (Plans A and B) employees benefit that future the amount of by estimating Plan A is calculated of in respect net obligation The Corporation’s amount and deducting the fair value that and prior periods; discounting in the current their service for have earned in return Note 23 – Employee benefits credit projected unit annually by a qualified actuary using the is performed obligation the net defined benefit of The calculation asset is limited to the present the recognized the Corporation, in a potential asset for results method. When the calculation contributions to reductions in future the plan or refunds from of any future form benefits available in the economic value of There is a requirement attached to above advances to make annual payments into sinking funds in amounts representing 1% to representing annual payments into sinking funds in amounts to make advances to above attached is a requirement There issues upon debt of the retirement used for earned are annual payments plus interest The cumulative the original issue. 2% of 15 – Sinking funds). on a net basis (see Note maturity, plan assets. of is given to any applicable minimumconsideration benefits, economic value of the present calculate the plan. To funding requirements. The Corporation’s long-term debt is unsecured. As at March 31, 2019, principal repayments due in each of the next five years the next five due in each of principal repayments 31, 2019, March As at debt is unsecured. long-term The Corporation’s as follows: were On June 26, 2018, the Corporation issued $50 million of long-term debt at a discount of $0.6 million through the million through $0.6 of a discount debt at long-term issued $50 million of the Corporation 2018, On June 26, and matures 3.01%, of rate interest an effective 2.95%, of rate The debt issue has a coupon Finance. of Ministry Saskatchewan on June 2, 2058. Thousands of dollars of Thousands Note 22 – Long-term debt, continued 22 – Long-term Note Saskatchewan of the Province from advances Unsecured Issue date July 2010 November 1990May 2014 2020 December 2010December 2017December 2025 December 1999 March June 2027 1999 March February 2012 2013December 2016December February 2042 June 2045 May 2017 June 2048 June 2018 Total due to Province of Saskatchewan of due to Province Total 86 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES audited financial statements for thedefinedbenefitplan are prepared and releasedpublicly. Act, Canada,andregulated bytheFinancialandConsumer AffairsAuthority of Saskatchewan – Pensions Division.Separate SaskTel defined benefitpensionplanis registered underThePensionandBenefitsAct,1992,Saskatchewan, the Income Tax Plan A,thedefinedbenefit pension planisgovernedbySaskTel andhasbeenclosedtonewmembershipsince 1977. The Defined benefitplans(Plans AandB) Supporting information of the assumptionscould, at somepoint,require additionalcontributions totheplan. assumptions result inahigherobligation whilelowermortalityrates result inalowerobligation. Thecombined impact on theCorporation’s cashflowsthrough aneffect onthe projected benefitobligation. Lowerdiscount ratesandindexing assumptions andmortalityrates at leastat eachactuarialstudydate. Changes intheseassumptionscould haveaneffect The Corporation determinestheappropriate discount rates at theendof eachreporting periodandtheindexing of the plan.Themortalityrate impactsthefuture liabilitybasedontheestimated life expectancy of planmembers. of the planmembers.Theindexingassumptionistheestimate of thefuture inflation rate, whichimpacts thefuture liabilities yield of long-term,high-quality, corporate fixed income investments(AAcredit-rated bonds) withterms reflecting the profile the future cashflowsthat theCorporation expectswillbe required tosettleemployeebenefitobligations. Itisbasedonthe the indexingassumption,andmortalityrate. Thediscount rate istheinterest rate usedtodeterminethepresent valueof The mostsignificantassumptionsusedtocalculate thenetemployee benefitplan’sobligation include:thediscount rate, independent actuaries. rates. Theseassumptionsare determinedbymanagementandare reviewed at leastannuallybytheCorporation’s Estimates andjudgmentsare required todeterminediscount rates, indexingassumptions,retirement age,andmortality Accounting estimates, andjudgments months of thereporting period,thentheyare discounted totheirpresent value. and whentheCorporation recognizes costs for arestructuring. Ifbenefits are notexpected tobesettledwhollywithin12 Termination benefitsare expensed at theearlier of whentheCorporation cannolongerwithdrawthe offer ofthosebenefits service provided bytheemployee,andobligations canbeestimated. expected tobepaidiftheCorporation hasapresent legalorconstructive obligation topaythisamountasaresult of past Short-term employeebenefitobligations are expensedasthe related service isprovided. Aliabilityis recognized for theamount Short-term benefitsandtermination benefits as anassettotheextentthat acashrefund orareduction infuture paymentsisavailable. comprehensive income in theperiodsduringwhichservices are rendered byemployees.Prepaid contributions are recognized contribution pensionplanare recognized asanemployee benefitexpenseinthe consolidated statement of income andother entity andwillhavenolegalorconstructive obligation topayfurtheramounts.Obligations for contributions tothedefined A defined contribution planisapost-employmentbenefitunderwhichanentitypays fixed contributionsintoaseparate Defined contributionplans(PlanC) obligation isperformed annuallybyaqualifiedactuaryusingtheprojected unitcredit method. have earnedinreturn for theirservice inpriorperiodsanddiscounting that amount.Thecalculation of thedefinedbenefit The Corporation’s netobligation inrespect of PlanBiscalculated byestimating theamountof future benefitthat employees losses onthesettlementof thedefinedbenefitplanwhensettlement occurs. service orthegainlossoncurtailmentisrecognized immediately innetincome. TheCorporation recognizes gainsand When thebenefits of theplanare changedorwhentheplaniscurtailed, resulting changeinbenefitthat relates topast benefit planare recognized innetincome. the periodasaresult of contributions andbenefitpayments.Netinterest expenseandotherexpenses related tothedefined period tothethen-netdefinedbenefitliability(asset),takinginto account anychangesinthenetdefinedliability(asset)during for theperiodbyapplyingdiscount rate usedtomeasure thedefinedbenefitobligation atthe beginning oftheannual comprehensive income (OCI).TheCorporation determinesthenetinterest expense(income) onthenetdefinedliability(asset) (excluding interest) andtheeffect of theasset ceiling (ifany, excluding interest), are recognized immediately inother Remeasurements of thenet definedbenefitliability, which compriseactuarialgainsandlosses,the returnonplanassets Note 23–Employeebenefits,continued

SASKTEL 2018/19 ANNUAL REPORT | 87 – –

3.20%

Plan B

9.2 years

0% in 2018/19 2.5% thereafter – – 3.40% 2.25% 1.60% 2018 Plan A Canadian Pensioner 2014 2014 Canadian Pensioner – Private Sector Mortality Table Sector Mortality Table – Private at 100% for males and 110% for males and 110% for 100% for at with CPM Improvement Scale B Improvement with CPM females projected generationally generationally projected females – – 3.00% Plan B 0% in 2019/20 2.0% thereafter – – 8.4 years 3.20% 2.25% 1.60% 2019 Plan A Canadian Pensioner 2014 Canadian Pensioner 2014 – Private Sector Mortality Table Sector Mortality Table – Private 100% for males and 110% for at with CPM Improvement Scale B with CPM Improvement females projected generationally generationally females projected Discount rate – end of year – end of rate Discount Inflation rate Inflation Expected salary increase Post-retirement index Post-retirement mortality Future At March 31, 2019, the weighted average duration of the defined benefit obligation was 11.3 years (2017/18 – 11.2 years). the defined benefit obligation of the weighted average duration 31, 2019, At March Estimated average remaining average remaining Estimated life employee service As at March 31, March As at An actuarial valuation for accounting purposes was performed at March 31, 2017. The latest valuation for funding purposes for valuation The latest 31, 2017. March at purposes was performed accounting for An actuarial valuation Funding The determined by actuarial valuations. funding Plan A. Contributions are adequately for is responsible The Corporation benefits. service and future returns, salary projections, investment assumptions about future actuarial reflect contributions Defined benefit obligation Actuarial assumptions and uses management’s and ad hoc benefit increases, uncommitted for includes a provision actuarial valuation The accounting courses and planned circumstances economic of set the most probable reflect on assumptions that based best estimates and guidance actuarial advice, independent based on management’s expectations, assumptions are action. The actuarial of The the estimate. from materially the actual amount may differ involves risks that therefore, The estimate, by IFRS. provided as follows: are major assumptions used in the valuations Plan B, the service recognition defined benefit plan provided a retiring allowance of two days’ salary per year of service, which of service, of two days’ salary per year allowance retiring a provided defined benefit plan recognition service the Plan B, the April 22, 2005, ratified and Unifor, between the Corporation on the Collective Agreement Based is payable on retirement. 19, 2005. March effective program was curtailed benefit defined recognition service to Plan B. next year related million in the expects to pay $1.5 Corporation The Plan B is unfunded. The defined benefit pension plan is administered by a five-member Board (SaskTel Pension Board), consisting of two employer of two consisting Pension Board), (SaskTel Board by a five-member pension plan is administered The defined benefit by law to act in the is required Board Pension The SaskTel an independent chair. and two union representatives representatives, policies (e.g., investment, certain for setting responsible participants and is the defined benefit pension plan of best interests defined benefit pension plan. the policies) of and indexation contribution, to the contribute to required no longer and are pensionable service years of the maximum All plan members have reached years least every three at is performed valuation A have also ceased. contributions service employer current plan. As a result, not required. are contributions actuarial valuation under the going concern The plan is in a surplus position, and therefore, of pensionable earnings times the number of years of service up to a maximum of 35 years of service. A reduced pension A reduced service. 35 years of of up to a maximum service years of number of earnings times the pensionable of 2% per year. 31, 2017. March as of was performed pension benefit. the accrued value of to determine the actuarial present Note 23 – Employee benefits, continued benefits, 23 – Employee Note of serviceyears least 20 at 60 with at age 65, at age a full pension provides plan pension benefit defined The SaskTel For employees who retire before the age of 65, but meet other age plus service requirements, either a reduced or unreduced or unreduced either a reduced requirements, age plus service but meet other 65, the age of before who retire For employees a maximum of Index (CPI) up to to annual indexing with the Consumer Price subject are Pensions pension may be payable. or upon completion of 35 years of service. The pension is calculated to be 2% times the average of the highest three years the highest three of times the average to be 2% is calculated The pension service. of 35 years of or upon completion met. are criteria service years of age and if certain for may be opted 88 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Net definedbenefitliability(PlanA) Represented by: Net definedbenefitliability(PlanB) Balance at March 31, Benefits paid Other Remeasurement loss(gain): Included inOCI Interest cost (income) Current service cost Included innetincome Balance at April1, Thousands of dollars As at March 31,2019 and itscomponents. The following tableshowsareconciliation from theopeningbalances totheclosingbalances for thenetdefinedbenefitliability Movement inthepresent valueof thedefinedbenefitobligation other assumptionsconstant: The following illustrates theeffect ontheobligations of theplans of changing certain actuarialassumptionswhileholdingall Sensitivity analysis Note 23–Employeebenefits,continued Thousands of dollars For theyearendedMarch 31, Inflation (1%movement) Discount rate (1%movement) Salary increase (1%movement) Future indexing(0.4% increase and 1% decrease) - Effect of asset ceiling limit - - excluding interest income R Actuarial loss(gain)arisingfr  eturn onplanassets - financialassumptions - demographicassumptions

om: 1,040,784 $ 1,052,620 $ eie eei biainFi au fpa sesNetdefinedbenefitliability Fairvalue ofplanassets Defined benefitobligation (68,598) 22,169 22,072 34,593 34,593 2019 97 – – – 1,052,620 $ 1,149,585 $ 1359 2,4 78 892 $ (798) $ 124,342 $ (103,529) $ (68,394) (67,539) (40,854) (26,685) 38,968 38,968 2018 Increase (56,686) – – – 55,869 Plan A – (1,026,309) $ $ (1,036,502) (22,334) (19,914) (33,995) (34,350) (2,420) 66,522 Defined benefitobligation 2019 355 – – Decrease (123,619) (1,036,502) $ $ 274 (1,030,246) – (38,650) (45,695) (34,504) (34,888) 66,898 7,045 2018 384 – – – $ 14,475 $ 14,475 $ 16,118 $ nraeDecrease Increase (19,914) 754 Plan B (2,076) (2,420) 14,475 22,072 – – (165) 2019 598 243 355 97 16,118 $ 16,118 $ – $ 119,339 $ (106,189) (45,695) (40,854) (26,685) 16,118 (1,496) 7,045 4,464 4,080 (690) 2018 384 – – SASKTEL 2018/19 ANNUAL REPORT | 89 – 600 2018 8,648 2,514 58,223 44,670 47,184 (7,045) 171,059 112,615 186,194 454,037 996,865 1,044,049 $ 5,489 $ 1,037,004 – 2019 8,911 5,007 2,180 89,566 14,051 16,231 (4,625) 173,388 112,749 174,390 443,969 1,015,508 1,031,739 $ 7,528 $ 1,027,114 39% 17% 44% 40% 15% 45% Range Target Actual 30–50% 12–18% 40–50% Real estate Real income Fixed Equities Asset category Defined contribution plans (Plan C) Defined contribution of employees’ pensionable 7.45% contribute to the Corporation requires pension plan, contribution the defined Plan C, contribution defined the for cost total earnings. The pensionable of 4.45% of minimum a contribute to employees and earnings, the for and employer contributions pension cost The Corporation’s contribution. required plan is equal to the Corporation’s (2017/18 – $22.1 million). 31, 2019 the year ended March million for $21.7 Plan are Public Employees Pension The SaskTel Pension Board employs a pension risk management strategy that addresses continued capital market volatility and volatility market capital continued addresses that employs a pension risk management strategy Board Pension The SaskTel the defined benefit pension plan the assets of strives to ensure the plan. This approach for the overall demographic trends the plan. the liabilities of evolve to match The defined benefit pension plan’s investment policy provides a framework for the prudent investment and administration for the prudent investment and provides a framework The defined benefit pension plan’s investment policy the investment managers with a written managing capital assets. The policy provides the purpose of for Fund the Pension of it is meeting the to ensure revisited annually The policy is return standards. of quantity and rate specific quality, of statement meet all pension obligations. the defined benefit pension plan’s capital management to ultimately objectives of Taking into consideration the investment and risk philosophy of the defined benefit pension plan, the following range and target the defined benefit pension plan, the the investment and risk philosophy of into consideration Taking asset mix has been established: The defined benefit pension plan’s permissible investments include Canadian equities (including rights, warrants, instalmentThe defined benefit pension plan’s permissible securities, mortgages, real Canadian issuers, short-term equities, bonds of and international U.S. and capital shares), receipts, Board. Pension the SaskTel of approval investment is not permitted without prior Any other type of and pooled funds. estate, As at March 31, March As at dollars of Thousands Note 23 – Employee benefits, continued benefits, 23 – Employee Note Plan assets follows: plan is as benefit pension the defined of allocation The asset Asset category Short-term investments Pooled real estate real Pooled Canadian equities Canadian pooled equity funds Canadian pooled equity U.S. pooled equity fund U.S. Non-North American pooled equity funds Non-North American Pooled bond funds Pooled Pooled mortgage fund Pooled Bonds Investments under securities lending program Short-term investments Canadian equities Total investments Total Effect of asset ceiling limit of asset Effect Net investments Note 24 – Provisions

Accounting policies A provision is recognized if, as a result of a past event, the Corporation 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, the timing or amount of which is uncertain. Provisions are determined by discounting the expected future cash flows at a rate that reflects current market assessments of the time value of money and the risks specific to the obligation, or at the best estimate to settle the obligation at the end of the reporting period. The unwinding of the discount on provisions is recognized as finance expense.

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

Decommissioning provisions A decommissioning provision is a legal or constructive obligation associated with the decommissioning of property, plant and equipment. The Corporation recognizes decommissioning provisions in the period incurred if a reasonable estimate of fair value (net present value) can be determined. The Corporation recognizes provisions to decommission towers, antennae, and fuel storage tanks in the period in which the facility is ready for service. The fair value of estimated decommissioning cost is recorded as a provision with an offsetting amount capitalized and included as part of property, plant and equipment. Decommissioning provisions are increased periodically for the passage of time by calculating accretion expense on the provision. The offsetting capitalized costs are depreciated over the estimated useful life of the related asset.

The calculations of fair value are based on detailed studies that take into account various assumptions regarding the anticipated future cash flows, including the method and timing of decommissioning and an estimate of future inflation. Decommissioning provisions are periodically reviewed and any changes in the estimated timing and amount of future cash flows, as well as changes in the discount rate, are recognized as an increase or decrease in the carrying amount of the liability and the related asset. If the asset is fully depreciated, the changes are recognized in net income immediately.

Environmental remediation A provision for environmental remediation is accrued when the occurrence of an environmental expenditure, related to present or past activities of the Corporation, is considered probable and the costs of remedial activities can be reasonably estimated. These estimates include costs for investigations and remediation at identified sites. These provisions are based on management’s best estimate considering current environmental laws and regulations and are recorded at fair value in net income. The Corporation reviews its estimates of future environmental expenditures on an ongoing basis. Changes in the estimated timing and amount of future cash flows, as well as changes in the discount rate, are recognized in net income immediately.

Accounting estimates, and judgments Judgment is involved in the estimation of the future liabilities for decommissioning and environmental remediation, the determination of the expected period until decommissioning, as well as inflation factors and discount rates to determine the present value of the provisions. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES FINANCIAL STATEMENTS CONSOLIDATED 90 | SASKTEL 2018/19 ANNUAL REPORT | 91 – 575 459 244 Total (716) (347) 5,790

– $ – – 25 827 575 (128) provisions Decommissioning provisions Decommissioning 0.5% increase0.5% decrease 0.5% $ (652) $ 760 Environmental Environmental – $ 575 $ 575 – – $ – $ 575 $ 575 459 244 (219) 5,765 provisions $ $ $ $ 6,249 $ 472 $ 6,721 Decommissioning Decommissioning $13 2019 2.00% 1.74% – 2.80% 1.74% Long-term inflation rate inflation Long-term Discount rate, end of period end of rate, Discount As at March 31, March As at (millions) cash flows Undiscounted Balance at March 31, 2018 March at Balance Due to its ownership structure, the Corporation has no access to capital markets for internal equity. Equity advances in Equity advances internal equity. for to capital markets has no access the Corporation Due to its ownership structure, the determined through on an annual basis. Dividends to CIC are determined by the shareholder are the Corporation on an annual basis. budget process Provincial Saskatchewan Supporting information the Corporation During the year, its equity capitalization. CIC to form from an equity advance has received The Corporation million to CIC. $13.0 in the amount of the equity advance a portion of repaid Accounting estimates, and judgments Accounting estimates, to determine is first analyzed Funding CIC. and sole equity holder, parent its funding from periodically receives The Corporation e.g. equity injection, or whether equity holder, whether the funding is a transaction with the equity holder in their capacity as an certaincomply with to requirement is no a specific purpose. If there the funding would be available to other parties for must If the Corporation as an equity advance. the funding is recorded the entity, activities of to the operating relating conditions be and the funding could the Corporation, of activities to the operating relating conditions past or future with certain comply income as a government grant (see Note 21 – Deferred recorded a specific purpose, the funding is available to other parties for funding). – government Note 25 – Equity advance and capital disclosures Assumptions Thousands of dollars of Thousands Note 24 – Provisions, continued Provisions, – 24 Note information Supporting Balance at April 1, 2018 April Balance at 31, 2019 March Balance at Provision for decommissioning and environmental remediation liabilities remediation and environmental decommissioning for Provision Thousands of dollars Thousands of rate Discount rate Inflation Sensitivity of assumptionsSensitivity of 31, 2019, at March liability as recorded on the rate and inflation rate in the discount to changes provisions Sensitivity of Discount rates based on the Government of Saskatchewan bond yields were used to calculate the carrying values of the of the carrying values used to calculate bond yields were Saskatchewan based on the Government of rates Discount 2025 and 2071. No funds have been set between will be incurred provisions the decommissioning of The costs provisions. provisions. to settle the decommissioning aside by the Corporation is as follows: Provision for decommissioning and environmental remediation liabilities remediation and environmental decommissioning for Provision Change in assumptions expense Accretion Settled during the period April 1, 2017 at Balance 92 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Debt ratio Pr Net debt Less: Sinkingfunds Notes payable Capitalization Net changeinnon-cashworkingcapitalbalancesrelated tooperations Thousands of dollars For theyearendedMarch 31, a) Netchangeinnon-cashworkingcapital Note 26–Consolidated statement ofcashflows–supportinginformation Long-term debt Thousands of dollars As at March 31, The debtratio isasfollows: The Corporation madenochangestoitsapproach tocapitalmanagementduringtheyear. of Saskatchewan’s strong credit rating andreceive financing at attractive interest rates. Saskatchewan Ministryof Finance. Thistypeof borrowing allowstheCorporation totake advantageof theProvince The Corporation raisesmostof itscapitalrequirements through internaloperating activitiesandlong-termdebtthrough the consolidated entity. Thetarget ratio for 2018/19was51.3%. approved bythe Board. TheCorporation usestargeted debtratios tocompile aweightedaveragedebttoequityratio for the standards. Thisreview includessubsidiarycorporations’ plansfor capitalspending.Thetarget debtratios for subsidiariesare The Corporation reviews thedebtratio targets of allitssubsidiariesonanannualbasistoensure consistency withindustry at theendof theyear. downturns inrevenue and stillmeetfixed paymentobligations. Theratio iscalculated asnetdebtdividedbycapitalization Too higharatio relative totarget indicates anexcessive debtburden that mayimpairtheCorporation’s abilitytowithstand of financialleverageandinturn,itsflexibility. measures theamount of debtinacorporation’s capitalstructure. TheCorporation usesthismeasure inassessingtheextent The Corporation closelymonitorsitsdebtlevelutilizingtheratio asaprimaryindicator of financialhealth.Thedebtratio Note 25–Equityadvanceandcapitaldisclosures,continued ovince of Saskatchewan's equity Other Contract costs Contract liabilities Contract assets Deferred revenue Other liabilities Trade andotherpayables Prepaid expenses Inventories Trade andotherreceivables Cash

Note 15 22 (23,660) $ (20,825) $ 2,180,601 $ 1,003,280 $ (5,639) (8,902) 8,465 3,874 (948) (260) 2019 524 51 1,015,433 1,165,168 – 176,021 193,295 46.6% 5,121 2019 21,644 $ 23,703 $ 1,997,398 $ 953,494 $

1,073,691 923,707 155,564 143,069 17,292 (2,042) (3,797)

46.2% 1,329 1,498 2018 2018

168 785 – – – SASKTEL 2018/19 ANNUAL REPORT | 93 418 418 423 (726)

Total (42,116) (116,314) – (13,000) ––– 861,845 (762,256) (12,391) – (3,164) – – – (3,472) earnings (restated (restated Retained (116,314) (116,314) see Note 2) –– (89,925) (89,925) (89,925) (33,475) – – – – – 102,029 102,029 Equity ––– – – – 129,057 – (4,026) 129,057 (7,643) – – (4,040) – – – – – (10,641) – – (656,936) – – 724,027 – Equity advance –– (13,000) – – – – – – – – – – – Notes Notes payable – – – – – (762,256) – – – – – (656,936) – – – – Liabilities 418 418 418 418 423 423 – debt term term Long- – – – – – – – – – 101,127 622,900 – – 49,363 812,482 (726) funds (3,164) (3,890) (4,026) (8,066) (4,040) (10,641) 101,127 (34,036) (10,641) Sinking Sinking Assets (12,391) 49,363 50,226 (13,000) (12,391) $ (141,033) $ 851,949 $ 177,105 $ 250,000 $ 711,416 $ 1,849,437 $ (155,564) $ 953,494 $ 143,069 $ 250,000 $ 723,520 $ 1,914,519 $ (155,564) $ 953,494 $ 143,069 $ 250,000 $ 811,063 $ 2,002,062 $ (176,021) $ 1,003,280 $ 193,295 $ 237,000 $ 823,806 $ 2,081,360 Dividends paid financing cash flows changes from Total Other changes Asset and liability related Sinking fund earnings Instalments Note 26 – Consolidated statement of cash flows – supporting information, continued information, – supporting cash flows of statement 26 – Consolidated Note activities financing arising from to cash flows changes in liabilities of b) Reconciliation Balance at April 1, 2017 at Balance Changes from financing cash flows Changes from loans and borrowings from Proceeds borrowings of Repayment adjustments Sinking fund valuation dollars of Thousands April 1, 2018 Balance at Amortization of net discount on long-term debt net discount of Amortization other changes asset and liability related Total Amortization of net discount on long-term debt net discount of Amortization other changes equity-related Total 31, 2019 March Balance at Sinking fund valuation adjustments Sinking fund valuation other changes asset and liability related Total Other changes Asset and liability related Sinking fund earnings Dividends paid financing cash flows from changes Total Changes from financing cash flows financing Changes from loans and borrowings from Proceeds Repayment of borrowings of Repayment Instalments equity advance of Repayment Total equity-related other changes equity-related Total Balance at March 31, 2018 March at Balance 94 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES net income assubstantiallyallof theCorporation’s debtisat fixed rates at March 31,2019, withmaturities of 2020andbeyond. rate risk asof March 31,2019. TheCorporation hasnotprovided asensitivityanalysisof theimpactof interest rate changeson environment, theserisksare considered low. Asaresult, theCorporation hasnofinancial contracts inplace to offset interest The Corporation maybeexposedtointerest rate riskonthematurity of itslong-termdebt.However, inthecurrent interest rate ($15.0 million)unfavourable effect onnetincome. yields) could havean11.6% ($15.0 million)favourable effect onnetincome whilea1.0% strengthening wouldhavean11.6% shift inexcess of 1.0% could haveamaterial impactonnetincome. Specifically, a1.0% weakening ininterest rates (orbond exposed tointerest rate riskonthesinkingfunds.Assumingallothervariablesremain constant at March 31,2019, ayieldcurve related debtmaturities andtheyare managedbasedonthismaturity profile andmarket conditions. TheCorporation maybe GRF hasinvestedthesefundsprimarilyinProvincial andFederalgovernment bondswithvaryingmaturities tocoincide with million (2017/18–$155.6 million)insinkingfunds,whichisrequired for certain long-termdebtissues.AtMarch 31,2019, the The Corporation hasondepositwiththeProvince of Saskatchewan, undertheadministration of theMinistryof Finance, $176.0 movements. Interest rate riskprimarilyimpactsthevalueof sinkingfundinvestmentsanddebtrefinancing. Interest rate riskrepresents thepotentialfor lossfrom changesinthevalueof financialinstruments related tointerest rate Interest rate risk changes ininterest rates, foreign exchange rates, andequityprices. Market riskrepresents thepotentialfor lossfrom changesinthevalueof financialinstruments. by Value canbe affected Market risk senior managementandtheBoard. TheCorporation’s financialriskshavenotchangedsignificantly from thepriorperiod. through Board-approved policies,limitsonuseandamountof exposure, internalmonitoring,andcompliance reporting to financial instruments to manage these exposures. The Corporation mitigates the risk associated with these financial instruments The Corporation isexposedtofluctuations in foreign exchange rates andinterest rates. TheCorporation utilizes anumber of Supporting information subsequent changesrecognized innetincome. with changesinfairvaluerecognized inprofit orloss. Theseembeddedderivatives are typicallymeasured at fairvaluewith derivative hasthesametermsasthoseof astand-alonederivative, andthecombined contract isnotmeasured at fairvalue the economic characteristicsandrisksare notclearlyandcloselyrelated tothoseof thehostinstrument,whenembedded contains ahostthat isnotanassetwithinthescope of IFRS9, anembeddedderivative istreated asaseparate derivative when that isafinancialassetwithinthescope of IFRS 9, theentire contract isclassifiedasafinancialasset.Ifhybrid contract Derivatives maybeembeddedinhybridcontracts that alsoincludeanon-derivative host.Ifahybridcontract contains ahost and settletheliabilitysimultaneously. when, theCorporation hasalegalrighttooffset theamountsandintendseithertosettleonanetbasisor realize theasset Financial assetsandliabilitiesare offset, andthenetamountpresented inthestatement of financialpositionwhen,andonly or retained bythe Corporation isrecognized asaseparate assetorliability. risks andrewards of ownershipof thefinancialassetare transferred. Anyinterest intransferred financialassetsthat is created transfers therightstoreceive thecontractual cashflowsonthefinancialassetinatransactionwhichsubstantiallyall The Corporation derecognizes afinancialassetwhenthe contractual rightstothecashflows from theassetexpire,it or each reporting date andchangesinthefairvalueare recorded ineithernetincome orOCI. assets are accounted for onthetradedate. Financialinstrumentsrecorded at fairvalueonanongoingbasisare remeasured at at fairvaluethrough profit orlossare recognized immediately innetincome. Regular waypurchases andsales of financial (normally thetransactionprice) adjustedfor transactioncosts. Transaction costs related tofinancialassetsorliabilities The Corporation initiallyrecognizes financialassetsandliabilitiesinthe consolidated financial statements atfairvalue Accounting policies Note 27–Financialinstrumentsandrelated riskmanagement

SASKTEL 2018/19 ANNUAL REPORT | 95 – 2018 2018 4,069 5,308 (9,412) 118,232 155,564 $ 2,349 $ 2,384 $ 17,292 $ 291,088 2019 4,917 3,838 2019 (8,708) 78,167 139,057 176,021 $ 2,396 $ 2,349 $ 5,121 $ 398,366 8 11 15 Note Provisions for losses for Provisions 31, March Balance at Balance at April 1, Balance at Recoveries Less: accounts written off accounts Less: Trade and other receivables and Trade Contract assets Sinking funds As at March 31, March As at dollars Thousands of Cash Trade and other receivables Trade collective level. both a specific asset and at receivables trade and other for impairment of evidence considers The Corporation customers commercial residential, farm, and many diversified among are and unbilled revenue and other receivables Trade Saskatchewan. primarily throughout found not toreceivables be specific impairment. All individually significant for assessed are receivables All individually significant Receivables but not yet identified. has been incurred any impairment that for assessed collectively then are specifically impaired with similar riskreceivables together for impairment by grouping collectively assessed are not individually significant are that within each segment, and default probabilities of the accounts segment, an aging characteristics, specifically based on business within each segment. recoveries default, timing of of the probability of uses historical trends impairment, the Corporation In assessing collective and credit economic future or management’s judgment as to whether current adjusted for loss incurred, and the amount of or less than suggested by historical trends. to be greater likely the actual losses are such that are conditions based regularly is reviewed potential impairment losses, of an indication which provides doubtful accounts, for The allowance to be considered are outstanding amounts that of an estimate receivable, customer accounts the aging of on an analysis of impacts. environment policy and economic collection and future uncollectible, detailed as follows: are receivable customer accounts of and the aging doubtful accounts for The allowance Allowance for doubtful accounts As at March 31, March As at dollars Thousands of The carrying amount of financial assets represents the maximum credit exposure as follows: as exposure the maximum credit represents financial assets The carrying amount of Credit risk Credit the other party to incur a and cause an obligation will fail to discharge one party to a transaction risk is the risk that Credit or economic have similar that counterparties customers or of to groups relates risk of credit financial loss. Concentration by changes in economic similarly affected to be obligations to meet contractual cause their ability that industry characteristics to trade risk relates credit risk. Current credit of concentrations does not have material The Corporation or other conditions. receivable. and interest assets, sinking funds, contract and unbilled revenue, and other receivables Note 27 – Financial instruments and related risk management, continued management, risk and related instruments 27 – Financial Note risk currency Foreign short-term suppliers and with foreign transactions through dollars, risk, primarily U.S. currency is exposed to The Corporation of 15% in excess fluctuations currency 31, 2019, March at constant variables remain Assuming all other commitments. foreign dollar versus in the Canadian weakening a 15% Specifically, the Corporation. of the cash flow impact on a material would have could strengthening flow while a 15% on cash effect million unfavourable a $15.0 have could rate exchange dollar the U.S. financial instruments of derivative combination to a uses The Corporation on cash flow. million favourable effect have a $15.0 derivatives currency had no foreign the Corporation 31, 2019, At March when deemed appropriate. manage these exposures financial instruments. trade derivative does not actively outstanding. The Corporation 96 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Net contractassets Allowance for credit losses Gross contract assets Greater than2years Between 1and2years Within 1year Amortization period Thousands of dollars As at March 31, Contract assets Balance at March 31, Transferred toaccounts receivable allowance Additions Balance at April1, Thousands of dollars As at March 31, Allowance forcontractassetcredit losses The allowance for contract assetcredit lossesandtheagingof contract assetsare detailedasfollows: whether towriteoff amountscharged totheimpairmentallowance for contract assetsagainst contract assets. asset arose are allconsidered whendeterminingimpairmentallowances. Thesamefactorsare considered whendetermining conditions, historicalinformation (includingcredit agencyreports, ifavailable),andthelineof businessfrom whichthecontract The Corporation maintainsallowances for lifetime expectedcredit lossesrelated tocontract assets.Current economic follows aprogram of credit evaluations of customersandlimits theamountof credit extendedwhendeemednecessary. risk associated withcontract assetsisinherently managedbythesize anddiversityof ourcustomer base.TheCorporation also assets, are diversified amongmany residential, farm,and commercial customersprimarilythroughout Saskatchewan. Credit of tradeandotherreceivables at bothaspecificassetand collective level. Trade andother receivables, andtherefore contract The Corporation considers evidence of impairmentfor contract assetsbasedontherelated assessmentof theimpairment Contract assets Thousands of dollars As at March 31, Customer accountsreceivable Note 27–Financialinstruments andrelated riskmanagement, continued Net customeraccountsreceivable Allowance for doubtfulaccounts Gross customeraccounts receivable Greater than90days 61–90 days 30–60 days Current Note 8 8 107,696 $ 91,126 $ 110,092 (2,396) 11,992 4,579 2,395 2019 78,167 $ 57,975 $ 936 $ 936 $ $ 69,563 $ (1,872) 79,103 21,128 84,851 87,200 13,556 (2,349) 1,872 1,513 2,568 (936) 2019 2019

2018 – SASKTEL 2018/19 ANNUAL REPORT | 97 – – – – – 5 years More than than More – – – – – 3–5 years – – – – – 1–2 years

– – – Contractual cash flows 7–12 months 47 0–6 0–6 months 47 Total 47 143,069 143,534 143,534 169,903 169,903 169,903 amount 193,295 193,647 193,647 – 161,883 161,883 161,883 – Carrying $ 953,494 $ 1,521,650 $ 22,478 $ 22,479 $ 44,959 $ 367,163 $ 1,064,571 $ 1,266,513 $ 1,835,134 $ 335,962 $ 22,479 $ 44,959 $ 367,163 $ 1,064,571 $ 1,003,280 $ 1,584,464 $ 23,217 $ 23,217 $ 315,943 $ 83,468 $ 1,138,619 $ 1,358,458 $ 1,939,994 $ 378,747 $ 23,217 $ 315,943 $ 83,468 $ 1,138,619 Long-term debt (a) Long-term Notes payable fund instalments. sinking payments but exclude for long-term debt include principal and interest a) Contractual cash flows Thousands of dollars Thousands of 31, 2019 March As at The following summarizes the contractual maturities of the Corporation’s financial liabilities: the Corporation’s of maturities the contractual summarizes The following Sufficient operating cash flows are expected to be generated to fund the short-term contractual obligations and and obligations contractual the short-term to fund be generated are expected to the cash flows Sufficient operating long-term debt upon maturity. it will be able to refinance anticipates Corporation In addition, the Corporation maintains credit policies and limits in respect to short-term investments and counterparties to and counterparties to short-term investments and limits in respect policies maintains credit In addition, the Corporation financial transactions. Liquidity risk due. The Corporation as they become commitments its financial is unable to meet the Corporation that Liquidity risk is the risk Finance. of Ministry the Saskatchewan through to capital markets and as such has access corporation Crown is a Provincial Note 27 – Financial instruments and related risk management, continued management, risk and related instruments 27 – Financial Note funds Sinking sinking funds. held in the the investments of risk rating credit based on the sinking funds is assessed to risk related The credit of the definition is equivalent to rating risk risk when its credit credit security to have low a debt considers The Corporation held per Moody’s. Investments DBRS or Aa or higher be AA or higher per this to considers grade.” The Corporation “investment grade. In investment rated bonds, which are Federal government and Provincial primarily of sinking funds consist within the to have considered sinking funds are a result, the sinking fund. As assets held within of been no defaults have addition, there necessary. is deemed allowance risk and no loss low credit Trade and other payables and Trade Notes payable Trade and other payables and Trade As at March 31, 2018 March As at debt (a) Long-term Derivative financial liabilities Derivative 98 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Long-term debt Notes payable Trade andotherpayables Financial liabilities Sinking funds Trade andotherreceivables The Corporation hadnocontracts withembeddedderivatives asat March 31,2018, andMarch 31,2019. Embedded derivatives in 2017/18or2018/19. There were noitemsmeasured at fairvalueusingLevel 3inputsin2017/18or2018/19andnoitemstransferred betweenlevels pricing for thesesecurities. Ministry of Finance usinginformation provided byinvestmentdealers.To theextentpossible,valuations reflect secondary The fairvalueof sinkingfunds,classifiedasfairvaluethrough other comprehensive income, isdeterminedbytheSaskatchewan Sinking funds Investments carriedat fairvaluethrough othercomprehensive income interest for theequivalentProvince of Saskatchewan debtinstruments. The fairvalueof long-termdebtisdeterminedbythepresent valueof future cashflows,discounted at themarket rate of Long-term debt values duetotheshort-termmaturity of thesefinancialinstruments. The carryingvaluesof cash,tradeandotherreceivables, tradeandotherpayables,notespayableapproximate theirfair Cash, tradeandotherreceivables, tradeandotherpayables, notespayable Financial instrumentsmeasured at amortized cost b) SeeNote 2–Basisof presentation for discussionof thepoliciesrelated tofairvaluemeasurements. a) Classification detailsare: FVOCI –fairvaluethrough OCI. Cash Financial assets Thousands of dollars As at March 31, Fair valueof financialassetsandliabilities as beingrealizable inanimmediate settlementof theinstruments. Therefore, duetotheuseof judgmentandfuture-oriented information, aggregate fairvalueamountsshouldnotbeinterpreted concerning theamountandtimingof estimated future cashflowsanddiscount rates that reflect varyingdegrees ofrisk. estimates usingpresent valueandothervaluation techniques,whichare significantly affected bytheassumptionsused current markets for instrumentswithsimilarcharacteristics,suchasrisk,principal,andremaining maturities. Fair valuesare Fair valuesare approximate amountsat whichfinancialinstruments could beexchanged betweenwillingpartiesbasedon Fair value Note 27–Financialinstruments andrelated riskmanagement, continued

oeClassification (a) Note 2Amortized cost 22 Amortized cost 17 15 mrie otN/A Amortized cost 8 Amortized cost mrie otLevel 1 Amortized cost VC Level 2 FVOCI hierarchy (b) Fair value Level 1 Level 2 N/A ,2 $5,121 $ 5,121 $ ,0,8 1,133,553 1,003,280 Carrying Carrying 3,5 139,057 139,057 9,9 193,295 193,295 7,2 176,021 176,021 6,8 161,883 161,883 mutFair value amount 2019 722 17,292 $ 17,292 $ Carrying 1,3 118,232 118,232 4,6 143,069 143,069 155,564 155,564 953,494 169,903 169,903 mutFair value amount 2018 1,056,426 1,056,426 SASKTEL 2018/19 ANNUAL REPORT | 99 180 2018 2018 7,240 14,679 $ 5,337 $ 5,517 $ 7,448 $ 29,367 181 2019 2019 16,272 11,353 $ 4,926 $ 4,745 $ 7,694 $ 35,319 ojects $15.9 million (2017/18 – $24.0 million) million (2017/18 – $24.0 ojects $15.9 ting activities $62.6 million (2017/18 – $77.5 million) – $77.5 million (2017/18 ting activities $62.6 etter of credit in the amount of $19.2 million (2017/18 – nil) $19.2 of in the amount credit etter of • Opera • Capital pr • L

Post-employment benefits – defined contribution plans contribution benefits – defined Post-employment During the year ended March 31, 2019, the Corporation recognized $12.7 million (2017/18 – $13.9 million) as rent expense million) as rent – $13.9 million (2017/18 $12.7 recognized the Corporation 31, 2019, During the year ended March leases. to operating related As at March 31, March As at dollars Thousands of Short-term employee benefits as follows: are lease commitments operating Non-cancellable than 1 year Less Between 1 and 5 years Note 29 – Commitments and contingencies Commitments Supporting information commitments: significant has the following the Corporation 31, 2019, March As at For the year ended March 31, For the year ended March dollars Thousands of Key management personnel compensation is composed of: is composed compensation management personnel Key than 5 years Greater In addition, the Corporation provided management and administrative services to the Corporation’s defined benefit pension defined benefit to the Corporation’s services and administrative management provided In addition, the Corporation million). 31, 2019 (2017/18 – $0.3 year ended March the basis for recovery on a cost million $0.3 of plan in the amount compensation management personnel Key eitherofficers, a executive and non-cash benefits to directors also provides the Corporation In addition to their remuneration, recognition defined benefit pension. contribution pension, and a service defined benefit pension or a defined Routine operating transactions with related parties were conducted in the normal course of business and were accounted for accounted business and were of course in the normal conducted parties were with related transactions operating Routine with transactions the Corporation’s of amount the aggregate 31, 2019, March amount. For the year ended the exchange at expenses (2017/18 – operating 11.3% of (2017/18 – 6.6%), revenue of 7.3% approximately entities are other government-related (2017/18 – 0.9%). expenditures plant and equipment property, of 11.1%), and 0.6% Note 28 – Related party transactions party 28 – Related Note Corporation’s the of its ownership through Saskatchewan of by the Government controlled is indirectly The Corporation Crown Saskatchewan transactions with various are financial statements in these consolidated Included CIC. parent, by the control common virtue of by to the Corporation related and commissions boards, agencies, ministries, corporations, influence and significant to joint control and enterprises subject corporations non-Crown and Saskatchewan of Government elected to has Corporation entities”). The to as “government-related referred (collectively Saskatchewan of by the Government the extent of entities to limit which allows government-related Party Disclosures, Related IAS 24 under a partial exemption take entities. or other government-related party transactions with government about related disclosures 100 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Upon adoptionof, andtransitionto,IFRS15, wehaveelectedtoutilize thefollowing practicalexpedientsandnotdisclose: Greater than3years Between 1and3years 1 yearorless Thousands of dollars As at March 31, obligations relates tomonthly services, whichisexpectedtoberecognized asfollows: satisfied performance obligations as at March 31,2019. Theunsatisfied portion ofthetransactionprice oftheperformance The tablebelowshowstherevenue that theCorporation expectstorecognize inthefuture, related tounsatisfied orpartially Note 30–Future performanceobligations results of operations. management that theirresolution willnothaveamaterial adverseeffector ontheCorporation’s consolidated financialposition with respect toclaimsandlitigation pendingat March 31,2019, cannotbepredicted withcertainty, itistheopinionof In thenormalcourse of operations, theCorporation becomes involvedinvarious claimsandlitigation. Whilethefinaloutcome Corporation’s liabilityinsurer. TheCorporation believesthere isnomerittotheclaimanddefending it. or otherafflictions allegedlycausedby cellphoneuse.Thisclaimisbeingdefended byexternallegal counsel retainedbythe manufacturers. Theclaimisprimarilyoneof product liabilityinvolvingallegations bywireless customerswhohavehadcancer seek unquantifieddamagesfrom thedefendant wireless communications service providers andmostknownwireless device On February6, 2013, theCorporation wasservedwithaclaimoutof theSupreme Courtof BritishColumbia.ThePlaintiffs allegations ascertified inthe2004action. pleadings, documentandoraldiscovery totrial.TheCorporation continues tobelievethat ithasstrong defenses tothe 13, 2008. TheclassactionperiodwasextendedtoMarch 31,2014. Thematter willnowproceed intheusualfashionof finalized enrichment onlyfor wireless customersduringtheperiodof April1,1987, andthedate of thecertification order beingFebruary 17, 2007, theSaskatchewan court certified thePlaintiff’s proceeding asaclassactionwith respecttoanallegation ofunjust Similar proceedings havebeenfiledby, oronbehalf of, Plaintiffs’ counselinother provincial jurisdictions.OnSeptember Telecommunications. ThePlaintiffsseekunquantifieddamages from thedefendant wireless communications service providers. and cellular service providers, includingSaskatchewan Telecommunications HoldingCorporation andSaskatchewan On August9, 2004, aproceeding undertheClassActionsAct(Saskatchewan) wasbrought againstseveralCanadianwireless Supporting information the Corporation’s consolidated financialstatements. appropriate, however, thepotentialfor large liabilitiesexistsandtherefore theseestimates could haveamaterial impacton effects are matters for judgment.Where noamountsare recognized, suchamountsare contingent, anddisclosure maybe of whetherrecognition ordisclosure intheconsolidated financialstatements is required, andestimation of potentialfinancial of theoutcome of suchuncertain events(i.e.beingvirtuallycertain, probable, remote, orundeterminable),determination The Corporation becomes involvedinvariouslitigation andregulatory matters intheordinary course of business.Prediction Accounting estimates, andjudgments Contingencies Note 29–Commitments andcontingencies, continued

• • theunsa amount invoiced tothecustomer. the unsa  tisfied portions of performance obligations where the revenue theCorporation recognizes corresponds withthe tisfied portions of performance obligations related to contracts withaduration of oneyearorless; 190,629 $ 137,215 $ 53,408

2019

6 SASKTEL 2018/19 ANNUAL REPORT | 101

of 2013 and 2014 CIS University 2014 2013 and of Member of Board Cup, and past Hockey the new Saskatchewan Fame. Hall of the of Grant is a recipient Order 2013 Saskatchewan Merit, 2012 Queenof Elizabeth II Diamond Jubilee and Medal, Commemorative the for Medal Commemorative Saskatchewan Centennial of as the 2018 and was recognized the Year of ABEX Business Leader also the He is in Saskatchewan. Saskatoon the 2014 of recipient the award, Leadership Tourism Proud are Brith – We 2008 B’nai Ernst & Young Award, You of of Entrepreneur nominee for and 2003, in 1998 the Year in 2008 and was recognized Most the Province’s as one of Men by Saskatchewan Influential Business Magazine. of Directors and serves on the Directors of Police of Albert Board Prince Commissioners as Chairperson. He has also served on the Board Albert Tourism Prince and as President Directors of Northern Lightsand Advisor for Wow. Casino Pow the studied at Richard Indian Federated Saskatchewan Douglas College and has a P.A. Management& Associates Renoof a University certificate, Nevada Gaming Management and a Queen’s School certificate certificate. Business Executive of enjoys spending time Richard with his family and is a collector vintage history books andof warplane memorabilia.

He is active in many community including serving organizations, the of Past Chair as Voluntary Hospital Foundation Children’s Executive Saskatchewan, of theCommittee Member of Miracle Golf Drive for Weir Mike theKids, Sponsorship Chair for Cup, Vanier 2006 PotashCorp and 2004 Canadian Nokia Brier, Sponsorship of President Vice Junior 2010 Canadian World for Championship, Director Hockey Chair 2012 Tim Hortons Brier, of Saskatchewan Health Authority, Health Authority, Saskatchewan and the Saskatchewan Investment Federation Teachers’ He is the pastCommittee. the Canadian of President Vice Equity Capital and Private Venture past member (CVCA), Association Entrepreneurs the World of and was theAssociation, the Saskatchewan- Co-chair of Asia Advisory Council. secondary schooling, andsecondary youth mentorship. In 2012, his for he was recognized withinoutstanding contributions and province, his community, the Queen and received country, Elizabeth II Diamond Jubilee Recognizing Distinction. of Medal was Richard safety, workplace instrumental in taking the lead Albert mini Safety the Prince for Charter signing and is a strong Mission Zero. for advocate closely has also worked Richard Society Cross with the Red as a the province throughout Member and Board Volunteer, Chairperson. He is also now, an active member of presently CAA Board the Saskatchewan

Mr. Kook serves on the boards serves on the boards Kook Mr. and private numerous of publicly traded companies, Blue including Saskatchewan and 3sHealth Shared Cross Saskatchewan, Services A proud member of the member of A proud Mr. First Nation, Ahtahkakoop has been appointed Ahenakew to serve on the Ahtahkakoop Developments Board, Cree insight to business offering and community strategies He has also served oninitiatives. Chamber of the Saskatchewan over eight years, for Commerce beingand has the distinction of of First Nations the first President appointed to the background Chamber Board, Saskatchewan a milestone within Canada. In 2011, Saskatchewan presented Polytechnic with an honorary Richard his work diploma recognizing studies, post- to promote investors in a broad range of a broad investors in funds, includinginvestment Retail first Saskatchewan’s Golden Fund, Capital Venture Inc. Westcap Opportunities Fund Manager tois also the Fund FirstHeadStart on a Home, First and Métis Fund, Nations, Business DevelopmentNations and several high netFund, Mr. Equity Funds. worth Private and Chief is also President Kook of Cheung Officer Executive an Ltd., On Investments Group investor syndicated international the President and has been Fund, of Officer and Chief Executive andthe Ramada Hotels (Regina 1992. since Saskatoon)

Board Member is the General Ahenakew Richard the NorthernManager of Albert,Lights Casino in Prince in there beginning his career and holding a variety of 1996, positions within the organization role. assuming his current before Richard Ahenakew Grant J. Kook is Founder, is Founder, Kook Grant J. Chief Executive President, Westcap of and Chair Officer, a leading venture Mgt. Ltd., equity fundcapital and private manager with over half a billion in assets under management. Founded over 25 years ago, has an uncompromising Westcap vision to build long-term value and institutional retail for Grant Kook

Chair of the Board Chair of Board of Directors of Board Joel Friesen Distinction) and Law degrees at the Swift Current Saskatchewan Board Member the University of Saskatchewan Party Constituency Association, in 2006. He also completed the the Elmwood Golf Club, the Joel Friesen has been a partner Directors Education Program Water Appeal Board, and Swift with Anderson & Company law (ICD.D.) through the Institute of Current Library Board. Joel has firm in Swift Current since 2013, Corporate Directors in 2017. also been active in the local having initially joined the firm in community coaching kids’ 2008. Prior to this, he completed Mr. Friesen has served on hockey, lacrosse, and basketball. his articles in Regina after numerous community boards, completing his Commerce (with including acting as President of

JoeAnne Hardy a global membership of 350 Development Committee, Board Member leading IT service organizations. and currently serves as Director and Chair of the Executive JoeAnne Hardy is the President JoeAnne has also been Committee. In 2019, she of WBM Technologies Inc. recognized by CDN joined the Board of Directors She first joined WBM and the Magazine as one of the top for Saskatchewan Blue Cross Information Technology industry 10 women in IT in Canada. and currently serves on the in 1996. Today, WBM’s offices In 2016, JoeAnne was nominated Corporate Social Responsibility in Western Canada employ over and successfully completed Committee, as well as the 290 team members focused the Quantum Shift Program at Audit and Risk Committee. on delivering technology the Ivey School of Business, solutions to organizations JoeAnne resides between as well as the Institute of across the country. Calgary, Saskatoon, Vancouver, Corporate Directors, Directors and Regina during the workweek. Born and raised in Saskatchewan, Education Program through the Most weekends find her enjoying JoeAnne has served in various Edwards School of Business. the beautiful city of Saskatoon leadership roles in the North As a long-time member of with her family, and making good American IT industry, including Saskatoon’s Business Association, use of an ever-growing collection three consecutive terms as the NSBA, she became a member of bicycles and running shoes! President of the Trust X Alliance, of the Board of Directors in an IT industry association with 2015, served on the Economic

Rachel Heidecker Rachel obtained her Chartered shared services, web applications Board Member Director (C.Dir.) designation and development, teaching and from The Directors College learning systems, and library Rachel Heidecker is a leader through McMaster University search and discovery systems. in business strategy and and the Conference Board of She has taught Management transformation, specializing Canada. She is an M.B.A. and and Marketing courses as an in technology, innovation, B.Sc. graduate of the University instructor of business strategy management, and marketing. of Saskatchewan and received and strategic decision-making at She is an experienced executive, a postgraduate diploma (PgD) the Edwards School of Business. in Software Technology from manager, and strategist with Rachel grew up in Regina the University of Calgary. 20 years of experience in ICT. and is currently a resident of Rachel is a strong believer in Rachel was previously a Osler, Saskatchewan. She is creative thinking, continuous director and manager at the passionate about the arts and improvement, measured University of Saskatchewan, may be seen in a variety of results, and enabling business overseeing teams responsible flamenco dance performances through technology. for continuous improvement of around Saskatoon. BOARD OF DIRECTORS BOARD 102 | SASKTEL 2018/19 ANNUAL REPORT | 103

in the University of Senate. Saskatchewan on several local boards, boards, on several local andassociations, and currently committees, seatholds an elected Jerri is currently the Assistant currently Jerri is Services Financial of Director Albert. Prince City of the for positionsJerri has held She is currently a Director of Lex of a Director She is currently Capital Corp., a Regina-based family investment vehicle, and Capital Management Lex of equity fundInc., a private She management company. thealso served as Co-chair for the Committee for Volunteer Basketball National CIS Women’s Championships hosted by the in 2009 and Regina University of the member of was a founding Inc. Research Prairie Vascular fundraiser in 2019. holds currently Valerie memberships with the Legal of Association and theAdministrators of Calgary Association She also Administrators. Legal enjoys staying involved with & Care through the community the United Way Saskatoon, Share and as a Fundraiser, Corporate volunteer with the SPCA. including the Inaugural Shooting Stars Foundation Golf Tournament hosted by Golf Tournament Sillinger. and Mike Jamie Heward has a Professional Darrell Business Management and a Business certificate diploma from Administration Community College. Lethbridge

electronics manufacturing, electronics as a public and financial services, assurance performing accountant, and audit engagements. she established a successful she established a successful in the legal community. career spent over 25 years Ms. Makela Assistant, Office as Executive and Operations Administrator, a high-profile Manager for moving firm before litigation position as on to her current Human Resources of Director LLP. with McKercher firm’s 100-plus-year history. firm’s 100-plus-year history. Pamela practised with the firm to electing 13 years before for on her second concentrate raising as a homemaker career two daughters. is a past President Ms. Lothian Bar Association the Regina of the Regina of and a Director Community Basketball and the ArthritisAssociation Saskatchewan. Society of McMaster University and the University McMaster Canada. of Board Conference as an has worked Ms. Hoback a wide variety in accountant in Alberta and industries, of She hasSaskatchewan. Sales as the Territory he worked Manager for and Marketing Adidas Golf. TaylorMade Member is a Board Kennedy Mr. Masonry the Saskatchewan of Institute and the Regina Home Buildersand Region He is a long-timeAssociation. Royal the Member at Board Golf Club and has chaired Regina many golf tournaments, experience in oil and gas services, in experience

Valerie Makela Valerie Board Member retired recently Makela Valerie at the Management Team from after LLP in Saskatoon McKercher serving 12 years as a member. Born and raised in rural attended Valerie Saskatchewan, Business College inReeves she In 1979, North Battleford. where to Saskatoon returned Pamela Lothian Board Member of is a graduate Pamela Lothian Saskatchewan, the University of Artsobtaining a Bachelor of in 1982 degree Science) (Political She in 1985. and a law degree articled with and then joined of McDougallthe law firm (now McDougall Gauley Ready the first becoming LLP), later woman to achieve partnership in thewith McDougall Ready Darrell Kennedy Darrell Board Member is the owner Kennedy Darrell Timberstone Distribution,of stucco, a wholesale masonry, siding, landscaping, and companyflooring distribution Western across with locations Canada. He also owns Discovery ad and a corporate Marketing, Prior to that, company. apparel Jerri Hoback Jerri Member Board has earned severalJerri Hoback completing since designations Commerce of a Bachelor the University of from (B.Comm.) She holds a CPA, Saskatchewan. and designation CMA accounting Director obtained her Chartered from designation (C.Dir.) College through The Directors to prepare businesses for Canada. During his career, Alan to the consulting business after succession to new owners or was involved as an educator of that company was acquired by to improve their businesses Chartered Accountants through Cervus Equipment in 2012. through financial restructuring, the Institute of Chartered Alan is a passionate supporter acquisitions, or divestitures and Accountants of Saskatchewan, of the NSBA, Saskatoon’s typically takes on the capacity of the CA School of Business, Business Association, and is Chief Executive Officer or Chief and the Master of Professional currently in his second term as Financial Officer while working Accounting program at the the Board Chair after 10 years with his clients. University of Saskatchewan. as a Director. Mr. Migneault is With a bachelor’s degree in In 2000, Alan joined a client in currently enrolled in the Institute Commerce from the University the Canadian Banking industry, of Corporate Directors’ Directors of Saskatchewan and a Chartered working in the capacity of Senior Education Program and holds Alan Migneault Professional Accountant (CPA, Vice President before taking several Board Director and Board Member CA) designation, Mr. Migneault on the role of Chief Executive Committee positions, including Born and raised in Saskatchewan, started his career working with Officer of the Saskatoon Regional SustainaPulp Canada Inc., Alan Migneault is President of PricewaterhouseCoopers LLP as Economic Development Authority Pacific Northwest Economic AJM Management Corp. As an auditor, and later transitioned in 2006. In 2009, he entered Region, Enterprise Capital a Professional Management to consulting where he was the transportation industry as of Saskatoon Corporation, Consultant, Alan works with leading the technology and risk the Chief Financial Officer for and numerous industry and clients across Western Canada management practice in Western Frontier Peterbilt, and returned community associations.

Grant Payant Business, life member of the Inc., where he represented Board Member Association of Canadian Custom custom harvesters in Western Harvesters Inc., and other various Canada regarding access to Grant Payant is retired from committees and organizations. the U.S. market and other farming, ranching, and numerous industry-related issues. He other businesses he has been Mr. Payant’s background in was active as President and involved in over the last few agriculture led him to sit on the Campaign Manager for the years, but plays an active role Saskatchewan Farm Ownership local provincial constituency. with his son who has taken Board. He spent several years as over the agricultural-related an Agricultural Representative Grant and his wife Debbie businesses. He is a long-standing for the Assiniboia Economic currently live in Assiniboia. member of Western Canadian Development Committee. He enjoys his family and Wheat Growers, Saskatchewan Additionally, he spent four years travelling, while staying Canola Growers, Canadian as President of the Association active in the community. Federation of Independent of Canadian Custom Harvesters

Glenys Sylvestre Ms. Sylvestre is a Chartered numerous organizations on Board Member Professional Accountant, and topics such as fundamentals of was awarded Fellowship in accounting, risk management, Glenys Sylvestre is Executive 2007. She served for six years as interpretation of financial Director, University Governance, a Councillor with the Institute information, and monitoring at the University of Regina. of Chartered Accountants of financial performance. She has She has been with the U of R Saskatchewan, including service served on several community for over 19 years, previously as President and Chair. She also boards, including Arcola East serving as Associate Dean and obtained the Chartered Director Community Association, Regina Instructor with the Paul J. Hill designation in 2011. Exhibition Association Limited, School of Business. Prior to her and Gymnastics Saskatchewan. employment with the University, Glenys facilitates board she was an Audit and Assurance and executive training and Manager at Deloitte & Touche. development sessions for BOARD OF DIRECTORS BOARD 104 | Board of Directors Committee Priorities

AUDIT AND RISK COMMITTEE ENVIRONMENTAL AND Members HUMAN RESOURCES COMMITTEE Glenys Sylvestre, Chair Members JoeAnne Hardy, Member Pamela Lothian, Chair Jerri Hoback, Member Richard Ahenakew, Member Darrell Kennedy, Member JoeAnne Hardy, Member Valerie Makela, Member Valerie Makela, Member Alan Migneault, Member Grant Payant, Member Glenys Sylvestre, Member Priorities • Oversee the implementation of evolving Priorities accounting standards • Oversee management efforts to improve • Monitor progress on the cyber-security risk employee engagement as part of the Enterprise Risk Program • Oversee executive succession plans, including the CEO

CORPORATE GROWTH AND TECHNOLOGY COMMITTEE GOVERNANCE COMMITTEE Members Members Rachel Heidecker, Chair Joel Friesen, Chair Joel Friesen, Member Richard Ahenakew, Member Jerri Hoback, Member Rachel Heidecker, Member Alan Migneault, Member Darrell Kennedy, Member Grant Payant, Member Pamela Lothian, Member

Priorities Priorities • Monitor the industry’s technological risks, • Ensure compliance with with a focus on evolving the networks shareholder’s governance practices to new technologies • Oversee the growth strategies of SaskTel and the subsidiaries SASKTEL 2018/19 ANNUAL REPORT | 105 SaskTel Executive

Doug Burnett divisions. Doug began his and a Certified Human President and career at SaskTel in 1990 as Resources Professional Chief Executive Officer (CEO) Corporate Counsel, providing (CHRP) designation. He is a In January 2019, Doug Burnett legal advice and services to the member of the Law Society was appointed President and Corporation in every facet of of Saskatchewan and serves CEO. Prior to his appointment, business. During this time, he as a Board Member for the Doug served as Acting worked on several international Wicihitowin Foundation, President and CEO, and he projects, as well as providing SecurTek, Directwest, also served as Vice President advice to Human Resources SaskTel International, of Human Resources and and Industrial Relations. Prior to Junior Achievement, Corporate Services where he joining SaskTel, Doug practised and West Wind Aviation. law in Regina from 1983 to 1989. was responsible for SaskTel’s Doug was born and raised Corporate Services, Human He holds a Bachelor of Arts in Regina and is active in Resources, Industrial Relations from the University of Regina, his community. He enjoys as well as its Health, Safety, a Bachelor of Laws from the sports of any kind, particularly Environment, and Diversity University of Saskatchewan, skiing and water-skiing.

Jim Dundas having grown the Saskatchewan serves as the CEO of SaskTel Chief Information Officer operation fourfold by delivering International, a fully owned excellent client satisfaction subsidiary of Saskatchewan Prior to joining SaskTel in and financial performance. Telecommunications, providing November 2013, Jim Dundas Throughout his 37-year career solutions to communications was Regional Vice President in the Information Technology service providers and network for CGI, where he had overall industry, he has held positions service operators worldwide. executive responsibility for with Saskatchewan Government He was born, raised, and operations in Saskatchewan. Insurance, Saskatchewan educated in Saskatchewan, He received the prestigious CGI Workers’ Compensation loves cottage life and remains Builder Award for exceptional Board, and Co-operators Data active on the family farm. leadership achievements, Services Limited. Jim also

David Ekstrand centres—designed, built, and With infectious high energy, Vice President, Business Sales operated by SaskTel. he has the edge to make the tough decisions when and Solutions A recognized industry leader, necessary and a strong will David Ekstrand leads the he has 25 years of management that drives execution. David is SaskTel team responsible and leadership experience a caring member of the business for all sales, marketing, and across Canada and in the U.S. community and is a true, trusted operations for SaskTel’s business David’s experience spans sales advisor to many. market. These services are and operational roles, including delivered and assured by roles at CompuCom and Rogers. David enjoys fishing and hunting David’s team of qualified and His passion for excellence and and has a passion for anything experienced communications pursuit of the best customer motorized, including extreme and IT professionals over experience possible has snowmobile equipment and Saskatchewan’s most rewarded him with a strong numerous off-road toys. David advanced networks and following of associates and and his partner Leanne reside hosted in advanced data customers over his career. just outside of Saskatoon and have four grown children. SASKTEL EXECUTIVE 106 | SASKTEL 2018/19 ANNUAL REPORT | 107

Board for the University of for Board Engineering of Faculty Regina Daryl hasand Applied Science. the from a BScME and P.Eng Saskatchewan University of theand is a member of Professional of Association Engineers and Geoscientists of (APEGS). Saskatchewan and Arts degree Bachelor of certificate Public Relations Regina, the University of from Socialas well as a Corporate the from certificate Responsibility She also Toronto. University of Directors of serves on the Board Schools. Computers for for Chair She is the past Vice Regina. of Authority Safety Technical of (TSASK)Saskatchewan Board and the Chair of Directors of the TSASK Human Resources the Board. Committee of serves on the Shara currently International, SaskTel of boards as and SecurTek, Directwest, well as Ignite Adult Learning and Sexual Assault Centre Saskatchewan. of Services Charlene earned a Bachelor earned Charlene from Degree Administration of and Regina of the University Professional is a Chartered She has CA. Accountant, the Institute ofalso achieved designation. Directors Corporate serves Charlene currently SaskTel of on the boards SecurTek, International, Pension the SaskTel Directwest, Plan, the Public Employees’ Plan, and thePension Business Downtown Regina District Board. Improvement

Corporation. Darcee has over Darcee Corporation. and has 25 years with SaskTel, positions inheld a variety of Communications, Marketing Customer Media Relations, Community Relations, Relations, andInternal Communications, Government Relations. She was born and raised in has a Darcee Saskatchewan. Planning, Staffing HR – Strategic Management, and Performance the Senior and most recently Human Resources of Director Services. and Corporate Shara has an MBA and a with Distinction, from B.Admin, and Regina, the University of in the Certificate completed the from Internet Marketing British Columbia.University of She has also been a Sessional the University of at Lecturer His SaskTel International His SaskTel assignments include Network in Leicester, Director Services UK and Chief Technology Tanzania for Officer Company. Telecommunications Daryl has held positions in the Engineering Society andRegina Labs. He TR of on the Board the Advisoryis a member of variety of senior leadership of variety her throughout positions she recently, Most career. Vice position of has held the Financial and Chief President International. at SaskTel Officer Charlene heldPrior to that, the Regina positions with as Qu’Appelle Health Region andChief Financial Officer Financial of President Vice Information and at Services, (ISC) Corporation Services andas Chief Financial Officer Finance of President Vice and Administration.

Vice President, Human ResourcesVice President, Services and Corporate since SaskTel at Shara has worked 1994 in various management SaskTel in Marketing, roles Interactive Solutions,Advanced Human Resources. and SaskTel Prior to her appointment as Vice Human Resources of President she has Services and Corporate Training of been the Director of and Development, Director Vice President, Corporate and Corporate Vice President, Government Relations Corporate of President As Vice andCommunications for Government Relations MacFarlane Darcee SaskTel, external for is accountable and internal communications, and government, customer, the for relations community Shara McCormick Chief Technology Officer Chief Technology Officer, As Chief Technology 36-year Daryl Godfrey’s includes with SaskTel career senior positions in Network Planning and Provisioning, Business International, SaskTel Development, and Stentor. MacFarlane Darcee Daryl Godfrey Charlene Gavel Charlene OfficerChief Financial Financial Officer, As the Chief is responsible Charlene Gavel financial the Corporation’s for leadership provides activities and financial of in the development for is responsible She strategies. accounting, strategic, providing the to and financial advice subsidiary and CEO, President executive SaskTel’s Presidents, Directors of team, and the Board Charlene has extensive a and has held experience Greg Meister participate in the communities President of Saskatchewan Vice President, Operations of Regina, Prince Albert, North Crime Stoppers, Vice President Battleford, and Saskatoon. of the Saskatoon Gun Club, Greg Meister leads the SaskTel Director with Saskatchewan team responsible for building, Greg holds a Bachelor of Skeet Shooting Corp. operating, and connecting Commerce degree from the customers to the Corporation’s University of Saskatchewan Born, raised, and educated in advanced networks, solutions, where he focused in the areas Saskatchewan, Greg enjoys living and services. of Finance and Marketing. He in the growing community of has received certificates for Warman with his wife Nadine Beginning his career with extension programs from the and daughter Cassidy. SaskTel in 1993, he has held University of British Columbia positions in Marketing, Sales, and Queen’s University. As a and Operations, allowing dedicated volunteer, Greg is Greg and his family to live and

John Meldrum regulatory policy matters, as well Corporate Counsel and held that Vice President, Corporate as SaskTel’s Legal Department. position until he was appointed Counsel and Regulatory Affairs to his current position. and Chief Privacy Officer John worked five summers with the Corporation while attending In December 2000, he received As Vice President of Corporate university and in 1977, after the Queen’s Counsel (QC) Counsel and Regulatory Affairs, receiving his Bachelor of Laws designation. John is a member John Meldrum’s portfolio degree from the University of of The Canadian Bar Association includes the provision of legal Saskatchewan, joined SaskTel as a and the Law Society of guidance, advice, and services solicitor in the Legal Department. Saskatchewan. He serves on the to the Corporation. He is In May of 1984, John became boards of Directwest, SecurTek, also responsible for the areas General Counsel and Corporate SaskTel International, and the of Carrier Relations, Carrier Secretary and in September University of Regina Rams Services, Land and Easements, 1986, he became Vice President, Football Club. and Regulatory Affairs, including

Stacey Sandison strategic planning, corporate Administration degree from Chief Strategy Officer marketing strategy, service Ellis College in New York. development, corporate Stacey Sandison has had an Stacey is a Board Member program prioritization, and extensive career at SaskTel, of SecurTek and Directwest brand management. with successful leadership and is a past Board Member responsibilities in marketing, She holds a Bachelor of of the Canadian Wireless sales, and operations. As Business Administration degree Telecom Association and Chief Strategy Officer, Stacey from the University of Regina the RCMP Foundation. is accountable for corporate and a Master’s in Business

Katrine White and wireline phone service. She Katrine earned a Bachelor of Vice President, Consumer Sales is also accountable for industry- Commerce degree from the and Solutions leading sales, customer service, University of Saskatchewan and As Vice President of Consumer and support channels. a certificate in Marketing from Queen’s University. She serves Sales and Solutions, Katrine White Prior to this, Katrine held a on the Hospitals of Regina leads the team responsible for all number of positions with Foundation Board and is a group sales, marketing, and operations increasing accountability at leader at Evolution Fitness. She for SaskTel’s consumer market. SaskTel and SaskTel Mobility in is married with three children, This includes the development consumer and business product loves to travel, and spend time and management of SaskTel’s management, advertising and at the lake. wireless voice and data services, communications, customer maxTV service, internet products, loyalty, and strategic planning. SASKTEL EXECUTIVE 108 | SASKTEL 2018/19 ANNUAL REPORT | 109 CORPORATE GOVERNANCE PRACTICES GOVERNANCE CORPORATE of set a comprehensive has implemented Board The SaskTel to clear disclosure is committed and practices governance best with current in accordance practices its governance of standards. disclosure practice Administrators the Canadian Securities 2005, On June 30, Governance 58-201 on Corporate Policy (CSA) National 58-101 on Governance Instrument Guidelines and National standards The CSA Rules came into effect. Disclosure Corporate Exchange Stock Toronto the supercede used previously the Board Guidelines, which Governance Committee has Governance The to assess its practices. adapting the Board’s the Guidelines with a view of reviewed and effective to the guidelines, where practices governance comply with to required is not beneficial. Although SaskTel used has guidelines, the Corporation the CSA governance in Practices Governance them to benchmark its Corporate section. the following amendments the CSA announced 2014, On October 15, Corporate of Instrument 58-101 Disclosure to National 31, 2014. December effective Practices Governance or explain” The amendments implement a “comply women of the representation model regarding disclosure positions and the director officer and in executive on boards any The amendments do not introduce selection process. intended to increase They are quotas or targets. mandatory women on of the representation regarding transparency no sanctions are There and in senior management. boards non-compliance. for

The Board discharges its responsibilities directly, by directly, its responsibilities discharges The Board the Committees of to management and through delegation the Audit the Board: Committees of four are There Board. and Technology Growth and Risk Committee; the Corporate and Human Resources Committee; the Environment Committee. Committee; and the Governance KEY ACCOUNTABILITIES the supervising for is responsible Directors of The Board focusing While of the Corporation. management and affairs the Board the Corporation, leadership of on the strategic holds to management and day-to-day operations delegates performance. the Corporation’s for them accountable The Lieutenant Governor in Council appoints members ofThe Lieutenant Governor in Council appoints Subject Chair. Vice the Chair and and designates the Board a fixed appointed for are Directors to applicable legislation, expiry. at term and their appointments can be renewed (12) members on the Board. twelve are There BOARD APPOINTMENTS BOARD Through the Chair, who is an independent Director, is an independent Director, who the Chair, Through to the Minister is accountable Directors of the Board is a key The Minister Responsible SaskTel. for Responsible Cabinet, CIC, link among the Corporation, communications and the public. the Legislature, AUTHORITY governed by The Corporation is a Crown SaskTel Holding Corporation Telecommunications Saskatchewan Investments The Crown of provisions Act, and subject to the Investments Corporation Act, 1993. The Crown Corporation for company (CIC), as the holding Saskatchewan of has Corporations, Crown commercial Saskatchewan’s to certain related SaskTel for direction authority to establish set out in legislation. matters Corporate Governance Statement 110 | CORPORATE GOVERNANCE STATEMENT NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 1(a) NI 58-101F1,sections1(a)to(d) 3.1 NP 58-201,section3.1 COMPOSITION OFTHEBOARD 3.2. NP 58-201,section3.2 (d) (c) (b)

is areporting issuer. director of anyotherissuerthat Disclose whetheradir and o Disclose whetherthemajority the basisfor that determination; who are notindependentand Disclose theidentityo who are independent; Disclose theidentityo independent directors. have amajorityof The boar successfully carryoutitsduties. board’s agendawillenableitto board andwhoensures that the is theeffective leader of the be anindependentdirector who The chairo f directors are independent; (Summary) d should f theboard should f directors f directors ector isa

Grant Kook, Chair:INDEPENDENT All directors ontheSaskTel Board (12outof 12)are independent. Alan Migneault:INDEPENDENT Pamela Lothian:INDEPENDENT Darrell Kennedy: INDEPENDENT JoAnne Hardy:INDEPENDENT Richard Ahenakew: INDEPENDENT Discussion and Comments an effective balance betweenthe role of theBoard andthat of management. between theBoard andtheshareholder, andensures Board agendasreflect in board organization, processes, effectiveness and renewal, servesasliaison The Chairof theBoard isanindependentdirector whoprovides leadership and isnotanissuer. Section 1(d)doesnotapplytoSaskTel asSaskTel doesnothaveshare capital, 52-110, AuditCommittees. and isbasedonanassessmentof therequirements inMultilateral Instrument The determination of independence ismadebytheGovernance Committee Glenys Sylvestre: INDEPENDENT Grant Payant:INDEPENDENT V Jerri Hoback Rachel Heidecker: INDEPENDENT Joel Friesen: INDEPENDENT alerie Makela: INDEPENDENT – Ex – R – Pr – Dir – Lawyer – Entr – Ac – Consultant – Pr – Lawyer – GeneralManager – Pr etired esident andCEO, Westcap Mgt.Ltd. esident, AJMManagementCorp. esident, WBMSaskatoon ecutive Director, UniversityGovernance at theUniversityof Regina countant ector of HumanResources, McKercher LLP epreneur –BusinessOwner : INDEPENDENT , AndersonandCompany , NorthernLightsCasino SaskTel align? Does Does Yes Yes Yes SASKTEL 2018/19 ANNUAL REPORT | 111 Yes Yes Does SaskTel align? SaskTel ttendance and encouraging full participation full participation and encouraging ttendance O and the Corporate Secretary to set Board to set Board Secretary O and the Corporate f the Board and ensuring meetings are properly properly and ensuring meetings are f the Board ommittee chairs to maintain effective communications communications ommittee chairs to maintain effective ole in assessing and addressing any concerns related related any concerns ole in assessing and addressing ectors to achieve full utilization of individual abilities of ectors to achieve full utilization onjunction with the CEO, developing productive relationships and relationships developing productive onjunction with the CEO, omoting an open and constructive working relationship between working relationship omoting an open and constructive and senior management to the CEO and counsel oviding advice ommunicating with directors between meetings with directors ommunicating epresenting the shareholder’s interests and perspective to and perspective interests the shareholder’s epresenting and division of responsibilities and division of by directors at meetings at by directors performance or director committee, to Board, pr working with c pr r management’s views to the shareholder management, and representing in c stakeholders key and with the shareholder the Corporation representing chairing meetings o legally is conducted and business convened working with the CE establish agendas meeting schedules and monitoring meeting a c taking a lead r assisting dir senior management and the Board

• • • • • • • • • • • Comments and Discussion is an independent director. and he the Board is the Chair of Grant Kook and is the shareholder to and ultimately to the Board The Chair reports the that and ensuring the Board meetings of over presiding for responsible primary responsibilities. The Chair’s and legal its fiduciary discharges Board duties include: As a Standing Agenda item, the Board holds an in-camera session without holds an in-camera As a Standing Agenda item, the Board All directors Board. the meeting of each regular at management present with an has a conflict a director where in the sessions, except participate item under discussion.

ectors (Summary) Disclose whether the chair Disclose whether is an independent the board of the identity of disclose director; the role the chair and describe the chair. of The independent dir scheduled should hold regularly which non- meetings at and independent directors management members of not present. are

NI 58-101F1, section 1(f)NI 58-101F1, 1(f) NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 MEETINGS OF INDEPENDENT DIRECTORS NP 58-201, section 3.3 3.3 112 | CORPORATE GOVERNANCE STATEMENT NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 1(g) NI 58-101F1,section1(g) 1(e) NI 58-101F1,section1(e)

Disclose thea independent directors. and candiddiscussionamong board doestofacilitate open are notheld,disclosewhat the 12 months;ifsuchmeetings meetings heldintheprevious disclose thenumberof such management are notpresent; at whichmembersof regularly scheduledmeetings independent dir Disclose whetherthe financial year. most recently completed board meetingsheldinthe record of eachdirector for (Summary) ttendance ectors hold

V Glenys S independent judgmentbydirectors include: Board practices that facilitate openandcandiddiscussionamong including alldirectors were held. regular meetings,in-camerasessionswithoutmanagementpresent but There were ten(10)Board meetingsheldin2018/19, andduringall10 Richar decisions inthebestinterests of theCorporation andtheshareholder. discussion anddebate andthat itretains theindependence of mindtomake The Board issatisfied that itsgovernance practices foster fullandopen Discussion and Comments b a ** * Gayle MacDonald Pamela L Darr Jerri Hoback Rachel Heideck JoeAnne Har Joel F Grant Kook, Chair Director meetings attended byeachdirector in2018/19issetoutbelow. The Board heldten(10)meetingsin2018/19. Thenumberof Board Grant Payant Rick Orr Alan Migneault John Ritchie

alerie Makela

• • • • was appointedtotheBoar individual wasaBoard member Figur to bepresent. For thepurposeso was aBoar

ell Kennedy are encouraged toraiseanyissuesof concern Board andmanagement pr clearly delinea having anindependentdir holding in-camerasessionso riesen d Ahenakew oviding for theBoard/directors toaccess externaladvice es inbrackets represent themaximumnumberof meetingsfor theperiodinwhich a

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othian d memberuntilNovember22,2018

a

b dy

b b

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f thisreport, memberswhoattended meetingsinpartwere considered

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ting thedivisionof responsibilities between d November22,2018 ector asChairof theBoard f nofixed duration where directors Meetings A 10 10 10 10 10 8 6 9 4 2 3 5 5 9 7

(6) (10) (6) (10)** (10) (10) (10) (10) (10) (10) (10) (6) (4) (4) (4) ttended* SaskTel align? Does Does Yes Yes SASKTEL 2018/19 ANNUAL REPORT | 113 Yes Does Substantial compliance SaskTel align? SaskTel f the Corporation’s internal control and control internal f the Corporation’s ocesses to enable effective communication with communication to enable effective ocesses O, evaluate the performance of senior management and of the performance evaluate O, te in identifying the principal risks of the business in which the the business in which the risks of te in identifying the principal ovide leadership in setting the Corporation’s long-range strategic long-range strategic the Corporation’s ovide leadership in setting

pr plan overall strategic the Corporation’s and annually approve direction participa appropriate of and oversee the implementation is engaged Corporation risks systems to manage the appoint the CE planning processes succession effective ensure adopt policies and pr and the public stakeholders, the shareholder, monitor the integrity o systems management information

• • • • • The Board has approved Terms of Reference for Directors where the where Directors for Reference of Terms has approved The Board delineated. are individual directors of and responsibilities expectations to obtain surveys internal and external stakeholders regularly SaskTel in a participates the Board The Chair of activities. about Corporate feedback all subsidiary the chairs of of which is comprised established by CIC, forum and of mutual interest issues where CIC officials, and senior boards Crown shared. are concern Reference of Terms not specifically identified in the the Policy Elements of has established (a), the Board include (a) and (g). Respecting the Board for (see conduct ethical business of a culture which promote practices to (g) the Board NP 58-201). With respect of discussion under section 3.8 Committee to oversee the to the Governance responsibility has delegated governance. to corporate approach Corporation’s Comments and Discussion The Board has written Terms of Reference that contain the majority of the of the majority contain that Reference of has written Terms The Board Board’s outline the Reference of The Terms the Policy. by elements required as to function including responsibility principal duties and responsibilities, and to: the Corporation of stewards The Board’s principal responsibilities are described above. The text of the described above. The text of are principal responsibilities The Board’s the Corporate can be obtained by contacting Reference of Terms Board’s to the Board. Secretary

tisfying tion’s f the board’s f the board’s tegic planning f the ommunications ommunications tion of the principal tion of d should adopt d should adopt (Summary) cession planning, cession Corporation’s internal control internal control Corporation’s and management information systems; and developing the Corpora including appointing, training, and monitoring senior management; adopting a c the Corporation; policy for the integrity o to corporate approach including a set governance, principles and guidelines of specific to the Corporation. identifica suc adopting a stra least at and approving process plan which annually a strategic among into account, takes other things, the opportunities the business; and risks of the Corporation’s risks of business and ensuring the appropriate of implementation systems to manage these risks; to the extent possible, sa to the extent possible, the of itself as to the integrity and that and executive CEO a culture they have created the integrity throughout of organization; The boar which a written mandate explicitly acknowledges the for responsibility the Corporation of stewardship for: and responsibility Disclose the text o written mandate.

(g) (e) (f) (c) (d) (b) (a) The written mandate should also The written mandate receiving for measures address (for stakeholders from feedback stakeholders for example, a process independent directors); to contact and and the expectations including directors, of responsibilities meetings basic duties to attend in advance. materials and review BOARD MANDATE BOARD section 3.4 NP 58-201, 3.4 NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 NI 58-101F1, section 2 2 114 | CORPORATE GOVERNANCE STATEMENT NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 3.6 NP 58-201,sections3.6 and3.7 CONTINUING EDUCATION ORIENTATION AND 3(a) NI 58-101F1,sections3(a)and(b) 3.5 NP 58-201,section3.5 POSITION DESCRIPTIONS 3.7 (b)

business iscurrent. knowledge of theCorporation’s abilities andensure their to enhance theirskillsand opportunities for all directors continuing education for theCEO. a writtenpositiondescription and CEO havedeveloped Disclose whethertheboar of eachsuchposition. role andresponsibilities the board delineates the and, ifnot,describehow of eachboard committee of theboard andthechair descriptions for thechair has developedwrittenposition Disclose whethertheboar responsible tomeet. objectives that theCEO is approve corporate goalsand responsibilities; developor CEO delineating management’s a positiondescriptionfor the together withtheCEO, develop chair of eachboard committee; the chairof theboard andthe clear positiondescriptionsfor The boar The boar operation of thebusiness. to make, andthenature and individual directors are expected committees, thecontribution the role of theboard and orientation andfullyunderstand directors receive comprehensive The boar (Summary) d shouldensure new d shouldprovide d should:develop d d

opportunities madeavailabletodirectors are describedonthenextpage. processes, andbestpractices incorporate governance. Otherdevelopment focuses ontheskillsthat directors needtodotheirjobs,effective Board to thebusinessandindustry. CICdeliversatrainingprogram that Management provides newdirectors withacomprehensive orientation Board, theChairof eachCommittee,andtheCEO. The Board hasdevelopedwrittenpositiondescriptions for theChairof the assigned bytheBoard. Corporation achievesthebusinessplanandtomeetanyothertargets and performance indicators. TheCEO isresponsible toseethat the approves abusinessplanthat includesCorporate objectives,priorities goals for theCEO that are approved by theBoard. TheBoard annually recommends performance indicators for theCorporation andpersonal The Environment andHumanResources (EHR)Committeeannually delegates othermatters tomanagement. monetary matters, setsoutthosematters that require Board approval and duties, andaFinalAuthorization Policy, applicabletomonetaryandnon- and responsibilities. TheBoard Terms of Reference address management The CEO’s Position DescriptionsetsouttheCEO’s primaryaccountabilities directors andhasadoptedaPosition Descriptionfor theCEO. the Board, theChairof eachCommittee,Committee andindividual The Board hasapproved Terms of Reference for theBoard, theChairof Comments and Discussion and Comments SaskTel align? Does Does Yes Yes Yes SASKTEL 2018/19 ANNUAL REPORT | 115 Yes Yes Does SaskTel align? SaskTel , and new directors receive receive Manual, and new directors Reference Directors’ , which Conduct of Code with the Directors’ comply members must Board all its subsidiary Crown of was developed by CIC and applies to the directors and its subsidiaries must of the Corporation and employees Officers boards. , which includes a whistle- Business Conduct of Code with SaskTel’s comply blowing policy. deter wrongdoing, integrity and designed to promote Both Codes are corporation, to a Crown as they apply the Policy the elements of address behaviour. illegal or unethical a mechanism to report and provide Comments and Discussion with a to the Board all members appointed provides The Corporation comprehensive an orientation session delivered by management. The orientation session The orientation by management. session delivered an orientation the critical business risks and challenges, trends, industry key addresses senior staff. of and responsibilities structure, plan, organizational strategic learn with senior managers to able to meet informally are New directors meetings, outside experts in Board to some regular about the business. Prior invited to speak to the industry are the telecommunications various aspects of educational has also delivered and senior management. Management Board the business. technical aspects of to explain sessions to directors directors for program education CIC sponsors a comprehensive Each year, roles on the key has focused The program boards. CIC subsidiary Crown of the skills directors and directors, committees, boards, of and responsibilities and and best practices, responsibilities their discharge need to effectively in can participate Directors governance. corporate new developments in where their duties as directors to external development opportunities related or the Board. by the Corporation authorized

es taken to es taken to es taken d should adopt a tion’s security (Summary) otection and proper use otection and proper onfidentiality of onfidentiality with laws, rules, ompliance onflicts of interest, including of interest, onflicts eporting of illegal or eporting of holders, customers, suppliers, and employees; competitors, c r unethical behaviour. pr assets and corporate of opportunities; c information; corporate fair dealing with the Corpora and and regulations; c The boar transactions and agreements has or officer a director where interest; a material written code of business of written code and ethics applicable conduct and officers, to directors, the Corporation employees of integrity designed to promote and deter wrongdoing. should address: The code Describe the measur Describe the measur Describe the to the role directors orient new and committees, the board, of of and to the nature directors business. the Corporation’s education continuing provide all directors. opportunities for

(b) 4(a) (e) (c) (d) (f) (b) CODE OF BUSINESS CONDUCT OF BUSINESS CONDUCT CODE AND ETHICS NP 58-201, section 3.8 3.8 (a) NP 58-101F1, sections 4(a) and (b) sections 4(a) and NP 58-101F1, NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 116 | CORPORATE GOVERNANCE STATEMENT NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 5(b) NI 58-101F1,section5(b) 3.9 NP 58-201,section3.9 5(a) NI 58-101F1,section5(a)

or officer hasa material interest. agreements where adirector considering transactionsand independent judgmentin to ensure directors exercise details of thematerial change. officers shoulddisclosefull the code for anydirectors or for amaterial departure from board committee. Anywaivers granted bytheboard ora executive officers shouldbe the benefit of directors and and anywaiversgrantedfor compliance withthecode The boar from theCode. that constitutes adeparture conduct of adirector orofficer financial year relating toany report inthemostrecent reference anymaterial change compliance withtheCode;and Code; howtheboard monitors how toobtainacopy of the employees of theCorporation; for thedirectors, officers, and of ethicalbusinessconduct has adoptedawrittencode Disclose whethertheboar Describe stepstheboar (Summary) d shouldmonitor d takes d

may haveamaterial interest andsuchitemsare notdistributed tothedirector. Management monitorsagendaitems toidentifyanyissueswhere adirector to assisttheminproactively addressing potential conflict of interests. to theGovernance Committee, theCorporate Secretary, andtheiradvisors services availabletothegeneralpublic. Thecompleted form isprovided or itssubsidiaries.Therequired information excludes the acquisitionof SaskTel andanymaterial contracts theymayhaveentered intowith SaskTel their knowledgeof thebusinesstheirassociates haveormaytransactwith their directorships onandmaterial interests inbusinessesotherthanSaskTel, In 2005, theBoard adoptedaDisclosure form toenabledirectors todeclare and nottoparticipate indiscussionsaboutorvoteonthematter. to declare anysuchinterest at themeetingwhere thematter isconsidered transaction beingconsidered bytheCorporation, thedirector isresponsible Where adirector has,ormaybeperceived tohave,apersonalinterest ina in 2018/19. No waiversfrom eitherCodehavebeengrantedtoanydirector orofficer dealt withpursuanttotheCodesfullBoard. compliance withtheCodesof Conduct.TheCommitteesreport anyissues The Board hasdelegated toitsCommitteestheresponsibility tomonitor no material changereports havebeenfiled. SaskTel doesnothaveshare capitalandisnotanissuer. Therefore, the CommitteeleveltoBoard at each regular meeting of theBoard. and regulations. TheChairof theCommitteereports anyissuesraisedat address, amongotherthings,compliance withrelated policies,legislation, Business Code.TheCommitteereceives reports from managementthat and safety, andhumanresource programs, includingcompliance withthe The EHRCommitteemonitorscompliance withenvironmental, health and alldirectors receive summaries of riskmanagementreports. Board at eachregular meetinganysuchissuesaddressed bytheCommittee, reports related tolegalrisks.TheChairof theCommitteereports tothe The AuditCommitteereceives quarterlyriskmanagementreports, including things, anyinstances of illegalorimproper treatment of Corporate assets. external auditors,whoreport totheCommitteeconcerning, amongother and accountability. TheCommitteeinteractsdirectly withtheinternaland accounting andfinancial reporting, riskmanagement,internal controls, Corporation andassiststheBoard tomeetitsresponsibilities respecting The AuditandRiskCommitteemonitorsthefinancialperformance of the regarding compliance withtheDirectors’ Code . addressed bytheCommittee,andsubmitsanannualreport totheBoard Committee reports totheBoard at eachregular meetinganysuchissues administer, monitor, andenforce theDirectors’ Code. TheChairof the with Corporate donation andsponsorshippoliciesisresponsible to and theBusinessCode.TheGovernance Committeemonitorscompliance Committees of theBoard monitorcompliance withtheDirectors’ Code contacting SaskTel. CIC. Acopy of theCode of BusinessConduct canbeobtainedby A copy of theDirectors’ Code of Conduct canbeobtainedbycontacting Comments and Discussion and Comments SaskTel align? Does Does Yes Yes Yes SASKTEL 2018/19 ANNUAL REPORT | 117 Yes Yes Does Substantial Compliance SaskTel align? SaskTel The Board encourages and promotes a culture of ethical business ethical of a culture promotes and encourages The Board governance. corporate in best practices current by following conduct about and honest discussion by open reinforced are These practices between gatherings informal at meetings and Board business issues at and senior management. the Board ethically in its business dealings, expects management to act The Board Business Conduct of the Code with all applicable legislation, in accordance the In 2005, or the shareholder. the Board of or policies and any directives a whistle-blowing to incorporate was revised Business Conduct of Code Issues concern. issues of by employees of reporting mechanism to facilitate to and monitored reported are Business Conduct of arising under the Code to the Governance and management reports by the EHR Committee to the have arisen pursuant issues that significant Committee respecting may also be made directly reports Whistle-blowing whistle-blowing policy. Committee. the Governance to the Chair of committee. Committee functions as the nominating The Governance Committee, including the of the Governance All five (5) members independent directors. are Committee Chair, by the a decision made are SaskTel of directors Appointments of Committee in Council. The Governance an Order government through recommend committee, as nominating their responsibility through may, and to have consideration for Board qualified nominees to the SaskTel to the CIC Board consideration for those nominees be recommended the Government. and ultimately the composition Committee, reviews the Governance through The Board, annually with a view to maintaining an appropriate directors and skill sets of to support the and diversity on the Board expertise, experience, mix of the Corporation. needs of and operating direction strategic identifying the skill sets for Committee is responsible The Governance that Profile developing and maintaining a Skills needed on the Board, any skill gaps, and identifies directors current of the competencies delineates have the any nominees that to the Board while seeking and recommending competencies to fill identified gaps. In addition to competencies required the of diversity in the composition encourage practices and skills, current recommendations the Committee may receive In seeking candidates, Board. Potential senior management, and the shareholder. the directors, from may be interviewed to determine their overall fit with the needs candidates participation their effective would preclude that conflicts any the Board, of work. The Committee and whether they have the time to devote to Board each vacant position to the Board, for candidates a list of may recommend approval. for to the shareholder candidates which in turn would recommend appointments. Board authority to make has the legislative The shareholder to Board related best practices following The Committee believes that candidates and recruiting appointments, maintaining a skills matrix, and diversity skills, background, of combination who possess the required decision-making supports an objective to add value to corporate process. nomination Comments and Discussion

d ocess by ocess d should appoint (Summary) d takes to encourage and to encourage d takes which the board identifies which the board board for new candidates nomination. Disclose whether the boar The boar Describe the pr committee has a nominating of entirely composed and, independent directors if not, describe the steps the an to encourage takes board process. objective nomination a nominating committee committee a nominating entirely of composed independent directors. promote a culture of ethical of a culture promote business conduct. Describe other steps the Describe other boar

(b) NOMINATION OF DIRECTORS NOMINATION NP 58-201, section 3.10 3.10 NI 58-101F1, section 5(c) NI 58-101F1, 5(c) NI 58-101F1, sections 6(a) and (b) 6(a) NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 CSA Corporate Governance Policy, Does NP 58-201, and Disclosure Instrument, Comments and Discussion SaskTel align? NI 58-101F1 (Summary)

NP 58-201, section 3.11 3.11 The nominating committee The Governance Committee has written Terms of Reference setting out Substantial should have a written charter its purpose and principal responsibilities, which address the Committee’s compliance establishing the committee’s responsibility to lead the process of recruiting and nominating candidates for purpose, responsibilities, appointment to the Board, as well as the other elements of the Policy except member qualifications, member member qualifications and the ability to delegate tasks. The Committee appointment and removal, has authority to engage outside advisors to assist it in performing its duties, structure and operations subject to the approval of the Board. The shareholder has the right to (including any authority to nominate candidates for appointment to the Board. delegate to individual directors or subcommittees), and manner of reporting to the board. In addition, the nominating committee should be given authority to engage and compensate outside advisors necessary to permit it to carry out its work. Where a third party has a legal right to nominate directors, the selection and nomination of those directors need not involve the approval of an independent nominating committee.

NI 58-101F1, section 6(c) 6(c) If the board has a nominating The Governance Committee performs the functions of a nominating Yes committee, describe the committee, and its Terms of Reference describe the responsibilities, powers, responsibilities, powers, and and operation of the Committee. The Committee is appointed by the Board, operation of the committee. serves in an advisory capacity and may make recommendations to the Board within its area of responsibility. A copy of the Committee’s Terms of Reference can be obtained by contacting the Corporate Secretary to the Board.

NP 58-201, section 3.12 3.12 The board should adopt a The Board’s nomination process is described above, and it meets the Yes nomination process which guidelines of the Instrument. considers the competencies and skills of the board By legislation, the Board is comprised of a maximum of twelve (12) directors. as a whole; assesses the As the Committee responsible for the Board’s approach to corporate competencies and skills governance, the Committee makes recommendations to promote timely possessed by each existing and effective decision-making. director; and considers the personality and other qualities of each director. The board should also consider the appropriate size of the board, with a view to effective decision-making, and should consider the advice and input of the nominating committee.

NP 58-201, section 3.13 3.13 The nominating committee The Governance Committee identifies the skills sets that are required for Partial should be responsible for the Board. The identification and appointment of Directors of SaskTel are compliance identifying individuals qualified a decision made by the Government through an Order in Council. to become new board members and recommending to the board the new director nominees. CORPORATE GOVERNANCE STATEMENT GOVERNANCE CORPORATE 118 | SASKTEL 2018/19 ANNUAL REPORT | 119 Yes Yes Does Partial compliance SaskTel align? SaskTel 750.00 ,500.00 3 2,500.00 25,000.00 40,000.00

$ $ $ $ $ Director Remuneration Schedule Remuneration Director Other Committee Chair retainer Board Chair retainer Board member retainer Board Committee member meeting fee day $750; (Meeting Fees = Full Half day $375 – less than 4 hours) Audit and Risk Committee Chair retainer Comments and Discussion set that with complies Committee the Governance by followed The process previously. and is described out in the Policy A copy of CIC’s remuneration and expense guidelines for directors directors and expense guidelines for CIC’s remuneration of A copy to the Board. Secretary the Corporate can be obtained by contacting and the Board compensation, executive CIC has established a framework for framework. The Board packages within that compensation can approve and making recommendations addressing for responsibility has delegated issues to the EHR Committee. management compensation concerning changes to to the Board: and recommends The EHR Committee reviews and benefits plans; overall compensation the Corporation’s the design of industry standards; reflect packages that management compensation indicators, and annual Corporate programs; compensation performance senior for compensation including a sub-set used to determine performance to this function, the Committee has the ability management. In discharging the Board. by external advisors, subject to approval retain The EHR Committee performs the functions of a compensation committee. committee. a compensation the functions of The EHR Committee performs EHR Committee, including the the (4) members of all four Currently independent directors. are Committee Chair, All members of the EHR Committee, which serves as the compensation the EHR Committee, which serves as the compensation All members of independent directors. are committee, levels and set expense remuneration authority to fix CIC has the legislative Committee has authority to The Governance directors. guidelines for to CIC) adjustments to directors’ (and the Board to the Board recommend the respecting quarterly reports The Committee receives compensation. any anomalies and reports the Board, by members of received remuneration to the Board. member. acting as a Board for an annual retainer receives Each director the Board members of levels established by CIC for The remuneration set out below. are

ocess by ocess ecommendations ecommendations d should appoint a (Summary) the nominating committee committee the nominating the should consider: that and skills competencies necessary considers the board to as a whole the board for possess; the competencies directors; existing and skills of skills and the competencies each nominee; and whether of devote each new nominee can resources sufficient time and work. to board In making its r In making its Disclose whether the compensation committee committee compensation of entirely composed independent directors. Describe the pr determines which the board the directors for compensation of the Corporation. and officers has a compensation board composed committee independent of entirely and, if not, describe directors takes the steps the board an objective to ensure determining for process such compensation. The boar

NP 58-201, section 3.14 NP 58-201, 3.14 NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 NI 58-101F1, section 7(a) and (b) 7(a) (b) COMPENSATION NP 58-201, section 3.15 3.15 120 | CORPORATE GOVERNANCE STATEMENT (c) NI 58-101F1,section7(c) 3.17 NP 58-201,section3.17 NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 3.16 NP 58-201,section3.16

public disclosure. compensation priorto and reviewing executive and equity-basedplans; compensation plans compensation, incentive- CEO officer anddirector board respecting non- recommendations tothe on theevaluation; making compensation levelbased and determiningtheCEO’s corporate goalsandobjectives, performance inlightof those evaluating theCEO’s relevant toCEO compensation, corporate goalsandobjectives reviewing andapproving should beresponsible for: The c operation of thecommittee. responsibilities, powers,and committee, describethe If theboar out itswork. necessary topermititcarry compensate outsideadvisors authority toengageand committee shouldbegiven addition, thecompensation of reporting totheboard. In subcommittees), andmanner to individualdirectors or any authoritytodelegate structure, operations (including appointment andremoval, member qualifications, member purpose, responsibilities, establishing thecommittee’s should haveawrittencharter The c ompensation committee ompensation committee (Summary) d hasacompensation

executive compensation reports priortopublicdisclosure. publication of Crown payeereports. TheCommitteedoesnotreview Executive compensation information isavailable tothepublicthrough Director compensation isdeterminedbyCIC. by CIC. AsaCrown corporation, SaskTel doesnothaveequity-basedplans. Executive compensation decisionsare subjecttoanyguidelinesestablished management’s eligibilityfor performance compensation. annually andtheextenttowhichtargets are achieveddetermines The Board reviews andapproves theachievementof Corporate targets performance compensation programs, andannualperformance targets. for recommending totheBoard managementcompensation packages, Respecting non-CEO officer compensation, theCommitteeis responsible determining compensation. the CEO’s performance are approved bythefullBoard, andare usedin Corporate objectivesandtheCEO’s individual targets. Theresults of for theCEO. TheCEO’s performance isassessedagainsttheestablished performance targets, andleadstheannualperformance evaluation process The EHRCommitteeannuallyrecommends totheBoard theCEO’s can beobtainedbycontacting theCorporate Secretary totheBoard. area of responsibility. Acopy of theCommittee’sTerms of Reference advisory capacityandmakes recommendations totheBoard withinits Committee. TheCommitteeisappointedbytheBoard, servesinan compensation issues,aswellthepowersandoperation of the Terms of Reference describetheCommittee’sresponsibilities respecting The EHRCommitteeservesastheCompensation Committee,andits approval of theBoard. to engageoutsideadvisorsassistitinperforming itsduties,subjecttothe qualifications andtheabilitytodelegate tasks.TheCommitteehasauthority compensation, aswelltheotherelementsof thePolicy except member which addresses theCommittee’sresponsibilities withrespect to The Board hasapproved Terms of Reference for theEHRCommittee, Comments and Discussion and Comments SaskTel align? compliance compliance Substantial Substantial Does Does Yes SASKTEL 2018/19 ANNUAL REPORT | 121 Yes Yes Yes Does SaskTel align? SaskTel The Governance Committee oversees the implementation of the above of Committee oversees the implementation The Governance survey-based, using an instrument are The evaluations processes. evaluation and with outside consultant with an developed by CIC in consultation members. Board Crown against the is measured performance Committee, and director Chair, Board, and Reference of Terms set out in their respective duties and expectations The purpose instruments. outlined in the evaluation the specific standards Chair, Committee, the Board, where is to identify areas the evaluations of may benefit by that is managing well and to highlight areas or director and attention. additional focus in writing on the feedback surveys to provide complete Directors Committees, Chairs and of the Board, contribution and effectiveness up the party may follow Chair or a third The Board individual directors. to elicit additional concerns directors with interviews of written responses improvement. or suggestions for outlining the evaluation reports Committee prepares The Governance approval. and review for submitted to the Board which are results, as a result action required follow-up The Committee recommends and tracks reports, made in the evaluation recommendations of any action items. of implementation Board, Board Chair, Committee Chair, and Committee evaluations as well and Committee evaluations Committee Chair, Chair, Board Board, cycle, annually on a three-year performed peer assessments are as director being conducted Chair evaluations and Board Board with comprehensive being conducted Committee evaluations Committee Chair and one year, The evaluations year. the third peer evaluations and director the next year, the Policy. of the elements into consideration take conducted. were evaluations Peer Board In 2018, Comments and Discussion the EHR Committees, and Governance to the Audit and Risk, In addition (CGT) Committee. and Technology Growth has a Corporate also Board to develop a growth Committee: works with management The CGT investments and and recommends reviews policies; and related strategy the performance respecting to the Board reports monitors and divestitures; the concerning recommendations and makes investments; and reviews of strategies long-term technology in the Corporation, technology evolution of Reference of the Committee’s Terms of A copy and technology investments. to the Board. Secretary the Corporate can be obtained by contacting

d has standing d has standing d, its committees, (Summary) Disclose whether the its committees, board, and individual directors assessed with regularly are to their effectiveness respect and, if yes, and contribution used. describe the process and each individual director and each individual director assessed. should be regularly An assessment should consider: or to the board with respect or its mandate committees, to an charter; with respect the applicable individual director, position description(s), as well and skillsas the competencies brings each individual director to the board. The boar If the boar the board, of committees other than audit, compensation, committees, and nominating and identify the committees describe their function.

OTHER BOARD COMMITTEES BOARD OTHER section 8 NI 58-101F1, 8 ASSESSMENTS BOARD NP 58-201, section 3.18 3.18 NI 58-101F1, section 9 9 NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 122 | CORPORATE GOVERNANCE STATEMENT 12 NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 11(a) 10 Governance Practices Disclosure ofCorporate CSA National Policy58-101 (b)

(iv) (iii) (ii) (i) reasons for not doingso. board, disclosetheissuer’s election orre-election tothe nominating candidates for the board inidentifyingand representation of womenon not consider thelevelof the board. Iftheissuerdoes for electionorre-election to and nominating candidates on theboard inidentifying of representation of women committee considers thelevel how theboar Disclose whetherand,ifso, respect of thepolicy: disclose thefollowing in a policyreferred toin(a), If anissuerhasadopted r has adoptedawrittenpolicy Disclose whethertheissuer disclose whyithasnotdoneso. mechanisms of board renewal, director termlimitsorother If theissuerhasnotadopted mechanisms of board renewal. director termlimitsorother include adescriptionof those of board renewal and,ifso, board orothermechanisms limits f the issuerhasadoptedterm Disclose whetherornot why ithasnotdoneso. adopted suchapolicy, disclose directors. Iftheissuerhasnot and nomination of women elating totheidentification

effectiveness of thepolicy. committee measures the the boar whether and,ifso,how of thepolicy;and achieving theobjectives progress bytheissuerin annual andcumula implemented; has beeneffectively ensure that thepolicy the measur provisions; its objectivesandkey a shortsummaryo (Summary) or thedirectors onits d oritsnominating d ornominating es taken to f tive

of representation of womenontheBoard. It istheresponsibility of Executive Counciltoconsider thelevel was comprised of six(6)womenoutof atotalof twelve(12)members(50%). of atotalof twelve(12)members(50%).Asof March 31,2019, theBoard As of March 31, 2018, theBoard wascomprised of six(6)womenout the skillsetsrequired for theBoard anddiversitystatistics. when Board appointmentdecisionsare made.Theinformation includes Annually, CICforwards information totheshareholder tobeconsidered progress madeinthepercentage of womenservingonCrown Boards. CIC maintainsstatistics regarding diversityof eachCrown Board, including not subjecttotermlimits. Telecommunications HoldingCorporation Act.Director appointmentsare the LieutenantGovernorinCouncilpursuanttoTheSaskatchewan The appointmentandremoval of Directors istheprerogative of Comments and Discussion and Comments women, Aboriginalpersons,andvisibleminorities. term “diversitycandidates” isnotdefinedbutitinterpreted asincluding Directors, itrequires Crown Boards toinclude“diversitycandidates.” The does notspecifically refer totheidentification andnomination of female CIC hasawritten“Board of Directors’ AppointmentPolicy.” Whilethepolicy SaskTel align? Compliance Compliance Partial Partial Does Does Yes No SASKTEL 2018/19 ANNUAL REPORT | 123 No Yes Yes Yes Does SaskTel align? SaskTel The Board is currently comprised of twelve (12) members, six (6) of which of twelve (12) members, six (6) of comprised is currently The Board women (50%). are are women. Officers (13) Executive of the thirteen five (5) Currently, On August 13, 2015, SaskTel adopted a policy to provide a target regarding regarding a target adopted a policy to provide SaskTel 2015, On August 13, positions. Officer women in Executive positions least 40% women in Executive is to have at target The current by 2020. Although the CIC policy requires Crown Boards to include “diversity to Boards Crown requires Although the CIC policy for policy does not adopt a specific target the CIC candidates,” Board. women on the of representation Comments and Discussion Executive Officer appointments are made by the CEO in consultation with consultation CEO in made by the are appointments Officer Executive of representation the level of to consideration gives The CEO the Board. relevant factors, along with other positions, Officer women in Executive appointments. Officer Executive when making

tive get regarding get regarding get regarding onsiders the onsiders the f this Item, get; and (Summary) progress of the issuer in of progress achieving the target. the tar the annual and cumula get referred to in either (b) get referred

oportion (in percentage oportion (in percentage oportion (in percentage oportion (in percentage

terms) of executive officers of officers executive terms) of including all major the issuer, who the issuer, subsidiaries of women. are Disclose the number and pr on the directors terms) of women. are who issuer’s board Disclose the number and pr If the issuer has adopted a tar or (c), disclose: women on the issuer’s board. If women on the issuer’s board. the issuer has not adopted disclose why it has a target, not done so. Disclose whether the issuer has adopted a tar officer women in executive If the the issuer. positions of issuer has not adopted a target, disclose why it has not done so. Disclose whether the issuer has adopted a tar For purposes o means a number a “target” or a range or percentage, numbers or percentages, of adopted by the issuer of women on the issuer’s board positions officer or in executive the issuer by a specific date. of level of representation of of representation level of officer women in executive positions when making appointments. officer executive consider If the issuer does not of representation the level of officer women in executive positions when making appointments, officer executive disclose the issuer’s reasons so. not doing for Disclose whether and, if so, Disclose whether c how the issuer (ii) (i)

(b) (b) (d) 14(c) 15(a) 13 14(a) NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1

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™ Your Life. Connected. Your Saskatchewan is known as the land of living skies, an especially fitting hallmark considering SaskTel empowered empowered living skies, an especially fitting is known as the land of Saskatchewan hallmark considering SaskTel approximately 1.35 million customer connections over the past year, many over our wireless and cloud-based networks. networks. and cloud-based many over our wireless 1.35 million customer connections over the past year, approximately