FINDING TRUE NORTH

2019/20 ANNUAL REPORT

Letter of Transmittal

Regina, Saskatchewan June 29, 2020

His Honour The Honourable Russ Mirasty, S.O.M., M.S.M. Lieutenant Governor of Saskatchewan

Dear Lieutenant Governor:

I have the honour to submit herewith the annual report of SaskTel for the year ending March 31, 2020, including the financial statements, duly certified by auditors for the Corporation, and in the form approved by the Treasury Board, all in accordance with The Saskatchewan Telecommunications Holding Corporation Act.

Respectfully submitted,

Honourable Don Morgan Minister Responsible for Saskatchewan Telecommunications SASKTEL 2019/20 ANNUAL REPORT | 1 FINDING TRUE NORTH FINDING TRUE true north is the Geographically, the earth’s northernmost point of axis into space axis. Extend that and the closest star is Polaris, the true Metaphorically, North Star. point in our spinning north is a fixed world, our own personal Polaris that on its journey to serve guides SaskTel and Saskatchewan the people of value to its shareholders. provide 2 | TABLE OF CONTENTS Table Contents of 132 117 113 112 108 62 23 16 8 5 3 Highlights IFC Contact Us Corporate GovernanceStatement SaskTel Executive Board of Directors CommitteePriorities Board of Directors 69 66 64 63 62 Consolidated FinancialStatements Management’s DiscussionandAnalysis 2019/20 Corporate SocialResponsibilityHighlights 14 12 11 9 8 Sharing OurStories President’s Message Letter of Transmittal

Notes toConsolidated FinancialStatements Consolidated FinancialStatements Independent Auditors’Report Report of ManagementonInternalControl OverFinancialReporting Management’s Responsibility for FinancialStatements Two More ShiningStars Our Customersare theReal Stars The SaskTel NorthStar Going Green for True Savings In theSpiritof theStarPeople SASKTEL 2019/20 ANNUAL REPORT | 3 Supporting in Saskatchewan Suppliers Located Saskatchewan Wireline Voice Subscriber Decline 2018/19 333,643 2019/20 308,719 Capital Investment Data Tra–c Growth Wireless Data Usage Fibre 2018/19 118,069 Subscriber Growth 2019/20 131,044 Organizations Return on Equity 70 Saskatchewan Contributions SaskTel TelCare Total Passed Growth Fibre to the Premises (Consumer and Businesses) Wireless Subscriber Growth 2018/19 609,951 2019/20 618,188 Revenue SaskTel Pioneers SK Coverage Over 42,000 Volunteer Hours Fibre Footprint $1.0M In-Kind/$0.2M Invested and maxTV Service 2018/19 112,583 2019/20 111,382 Subscriber Decline Net Income FINANCIALS INFRASTRUCTURE CORPORATE SOCIAL RESPONSIBILITY CORPORATE CUSTOMER CONNECTIONS CUSTOMER

Internet Community

Broadband SK Coverage 957 Non-Profit and Broadband 2018/19 775,269 2019/20 791,421 Subscriber Growth 50 Mbps Fixed Charitable Organizations Investment Program

*EXCLUDES IMPAIRMENT, THE MAJORITY OF WHICH IS RELATED TO THE IMPACTS OF COVID-19 IS RELATED TO THE IMPACTS THE MAJORITY OF WHICH *EXCLUDES IMPAIRMENT, Highlights 4 | HIGHLIGHTS Strategic Goals every touchpointalongtheirjourneywithSaskTel. Our customersare at thecentre of everythingwedo.We willdeliveranexceptional customerexperience at Deliver anExceptional CustomerExperience throughout theprovince of Saskatchewan for manyyearstocome. We willfindcreative solutions topositionSaskTel for financialsuccess, securing ourabilitytoservecustomers Maximize Long-Term FinancialSustainability our customers’expectations. Together, ourskilledworkforce iscommitted totransforming SaskTel for thefuture andensuringwedeliverto Empower aHigh-Performance Workforce with usandeasierfor ouremployeestoservethecustomer. We willusetechnologytobuildnewbusinesscapabilities,makingiteasierfor ourcustomerstodobusiness Reinvigorate SaskTel throughDigitalTransformation location–at home,work,andonthego. Broadband isessentialtothelivesof ourcustomers.We willprovide access tofastandreliable internetat any Lead theMarket inBroadbandServices

01

02

SASKTEL 2019/20 ANNUAL REPORT | 5 informed and their families entertained. informed increases in traffic and a shift in where our customers are our customers and a shift in where in traffic increases have the essential services they require to stay connected to to stay connected they require have the essential services world-class communications services in the province, in the province, services world-class communications we began to waive data overage charges for customers for overage charges we began to waive data were fusion Internet plans. We plans, and SaskTel wireless working, SaskTel’s networks and systems performed very well, networks and systems performed working, SaskTel’s to expect the highest quality of service so that they connect connect they so that service quality of to expect the highest they are. where to their world no matter through fixed or mobile, became a lifeline for individuals for individuals or mobile, became a lifeline fixed through to our customers while maintaining some relief to provide to reliably provide critical communications services to our services critical communications provide to reliably to maintain our world-class networks to ensure customers to maintain our world-class networks to ensure significant of in the face and friends. Even their work, family, maxTV and maxTV Stream customers, to help keep them customers, to help keep Stream and maxTV maxTV province. During the pandemic, broadband access, whether access, broadband During the pandemic, province. times. during very uncertain normalcy maintain a sense of Keeping the province connected throughout the COVID-19 the COVID-19 throughout connected the province Keeping especially in our rural areas where internet and wireless internet and wireless where areas especially in our rural Beginning in mid-March, services. essential communications extremely proud of how hard SaskTel employees are working employees are SaskTel how hard of proud extremely also pleased to provide free content to our residential to our residential content free also pleased to provide and a critical force in helping Saskatchewan families in helping Saskatchewan and a critical force and we are confident our network investment will allow us confident and we are BRIDGING THE DIGITAL DIVIDE BRIDGING THE DIGITAL of digital and data-driven communications and reaffirmed and reaffirmed communications digital and data-driven of plans, noSTRINGS Prepaid postpaid wireless on SaskTel’s outbreak became a priority, and we were pleased to be able and we were became a priority, outbreak connectivity continues to grow. Our customers have come Our customers have come grow. to continues connectivity customers until the pandemic ends. SaskTel’s focus on enhancing broadband connectivity in the connectivity on enhancing broadband focus SaskTel’s At year-end this situation continued to evolve, and I am to evolve, continued At year-end this situation At SaskTel, we understand the importance of providing providing of understand the importance we At SaskTel, The COVID-19 pandemic further highlighted the importance further highlighted the importance pandemic The COVID-19

leverage our IT expertise, collaborate with Saskatchewan with Saskatchewan leverage our IT expertise, collaborate investments, but the landscape we operate in is becoming in is becoming investments, but the landscape we operate down as we continue Therefore, competitive. increasingly balance the strategic investments necessary to prepare to prepare investments necessary the strategic balance by 2025. Since 2010, we have invested over $3 billion of billion of we have invested over $3 2010, Since by 2025. business, and accelerate improvements to our customer improvements business, and accelerate we operate and interact with our customers, vendors, and and interact with our customers, we operate this path, our strategy will look at finding new ways to will look at our strategy this path, transformation continues to be the main driver reshaping be the main driver reshaping to continues transformation to support customers’ shifting expectations and to continue and to continue to support customers’ shifting expectations modern infrastructure and pursue new digital products and and pursue new digital products modern infrastructure company our models designed specifically to strengthen providing exceptional service in a digital world. Digital in a digital world. Digital service exceptional providing In preparation for the next generation of technology and the of next generation the for In preparation greater role the Internet of Things (IoT) will inevitably play in Things (IoT) the Internet of role greater deliver quality user experiences today. today. deliver quality user experiences down this path. This year, our expenditures continued to continued our expenditures This year, down this path. service channels. service products and services we offer so that we can provide Saskatchewan people Saskatchewan can provide we so that we offer services and products and better serve our customers. and provide our team with the tools needed to help us our team with the tools needed and provide and everything we’re doing today is leveraging previous previous doing today is leveraging and everything we’re and emerging technologies continue to reshape the way to reshape technologies continue and emerging our lives, SaskTel will continue to develop our networks with will continue our lives, SaskTel our networks for future demand, and our commitment to demand, and our commitment future our networks for our North Star and achieve one million broadband accesses accesses broadband our North Star and achieve one million other partners. of monumental change in our industry as digital, web-based, monumental change in our industry as of capital throughout Saskatchewan to bolster our networks Saskatchewan capital throughout customer and employee experiences across our business. across customer and employee experiences SaskTel’s transformation journey began several years ago transformation SaskTel’s At SaskTel, we recognize that we must evolve our business that recognize we At SaskTel, As we enter a new decade, we find ourselves on the cusp we find ourselves on the cusp As we enter a new decade, At SaskTel, we have always worked hard to transform our networks and the networks our to transform hard worked we have always At SaskTel, with the foundation needed to stay connected in tomorrow’s world. in tomorrow’s to stay connected needed with the foundation

This year’s annual report is built on the theme of Finding of is built on the theme This year’s annual report as our mission to position broadband North, reflecting True President’s Message President’s 6 | PRESIDENT’S MESSAGE This pastyear, wealsocontinued theexpansionof infiNET 4G LTE wireless network.Thissuccess could belargely Applying innovation andvisiontodeveloprural

Since theinitiative beganinDecember of 2018, wehave Saskatchewan hasenabledustomake great stridesin customers inruralcentres. TheWireless Saskatchewan community toexperience thesheerspeedandlimitless communities having speeds up to 50 Mbps or faster.communities havingspeedsupto50 Mbps or communities asournextclosestcompetitor, offering communities, wemore thandoubledourtopconsumer customers, wehaveinvestedheavilyandwillcontinue to outside of majorcentres. Melfort becamethemostrecent our cutting-edgefibre opticsnetwork,to communities of newhouseholds.Asof March 31,2020, SaskTel boasts attributed tothepersistence of ouremployeesandthe a wireline network that reaches nearlytwice asmany a province-wide project that startedin2018, ourteam Outside of urbanareas, ithasalsobeenimperative that do best.Notonlydoesitmake goodbusinesssense,butit erected smallcell sitesinover100ruralcommunities Because of thevitalimportance of broadband toour planning backhaullinks,longbefore thefirstshovelwent meticulous preparation that wentintosecuringsitesand more of ourcommunities. possibilities that infiNET hastooffer. Manyother community network thispastyeartoenablesignificantspeedupgrades modernized severalaspectsof ourdigitalsubscriberline the province andkeep ourruralcommunities thriving. throughout Saskatchewan, servingtostrengthen our that respect. the opportunitiesthat direct fibre connections willbring to to continue inthecoming months,andwelookforward to we continue investigating waystobringreliable wireless helps tocreate therightconditions toattract newjobsto broadband andbettercellular coverage toourmany builds are inthedesignorconstruction phasewithworkset infrastructure that meetsourcustomers’needsiswhat we into theground. initiative inpartnershipwiththeGovernmentof internet services inatotalof 459communities, with319 internet plans,bringingspeedsupto50Mbpsthousands in ruralcommunities across theprovince. Inover260 invest inourwireline and wireless networks.Following TM , This iswhere anincreased focus oncollaboration comes To capitalize onrapidlychangingcustomerneeds,weare CREATING FUTURE ABETTER As customerexpectations shifttoward digitalchannels,we

customer andreduce theamountof timeittakes tolaunch customers, weare workinghard totransform thewaywe customer service channelstomake iteasierfor customers customer service systemsandimplementingnewsolutions customers andlearningfrom timeswedidn’tquitehitthe DELIVERING ONCUSTOMER EXPECTATIONS achieve productivity and customersatisfaction. and refocused successor toourprevious cyberbullyingand anticipate seeingmore growth inourLiveChat service. smartphones, thismakes perfect sense. Given theprevalence, easeof use,and multifunctionalityof Within ourInformation Systems Division, for example,we Office isleadingthat charge byworkingcloselywithour Over theyears,manyof ourcore goalsandactivitieshave employees alwaysaimtodoitrightthefirsttime,there is In additiontotransforming thewayweinteractwithour In 2019/20, wealsocontinued ourworkstrengthening our For thepastfew years,we’vedelivered onthiscommitment new products. Customer-specific teamsare alsohelpingto many divisionstotransform howweservecustomers. prevention program. provide asuperior service experience toallourcustomers. remained thesame. Specifically, ourstrong commitment to mark. Even inabusinessenvironment like SaskTel’s where year, weunveiledSaskTel BeKindOnline,areinvigorated to take advantageof more self-serveandself-installoptions. when itmakes sense. from missteps. focused onimproving thewaywelistentoandsupportour have integrated more agileprocedures tosupportthe by doingallwecantooptimize performance withexisting in. SaskTel’s newlyestablishedTransformation Management interact withourcommunities andyoungpeople.Last intrinsically awealthof learningandgrowth that comes SASKTEL 2019/20 ANNUAL REPORT | 7 lose focus of the essential nature of the communications of nature the essential of lose focus being of our communities.being of , SaskTel President and CEO President Doug Burnett, SaskTel will lead to long-term growth that will be beneficial to all the will be beneficial that growth will lead to long-term that champions innovation, excellence, and a commitment a commitment and excellence, innovation, champions that to community. to manage through unexpected challenges, and that we are that unexpected challenges, and to manage through they are strongly customer-focused and ready to challenge and ready customer-focused strongly they are of true north pursuit our that confident are quo. We the status rise to the challenge no matter what. what. rise to the challenge no matter proud of the way our employees have shown time and again the way our employees have shown time of proud Saskatchewan. people of It’s no accident that we were able to once again deliver able to once we were that It’s no accident Sincerely, When it comes to serving our customers, SaskTel will always will always our customers, SaskTel to serving When it comes While every company is transitioning in their own way, I am I own way, is transitioning in their While every company services we provide today. During the COVID-19 pandemic During the COVID-19 today. we provide services solid financial and operating results in 2019/20 as we results in 2019/20 and operating solid financial always ready to go above and beyond to support the well- to go above and beyond to support always ready our team demonstrated that they are able to come together able to come they are that our team demonstrated continued to build on our reputation as a provincial provider provider provincial as a build on our reputation to continued And though we are always looking to the future, we will never looking to the future, always And though we are TACKLING CHALLENGES TOGETHER TACKLING from the strong base of current and retired employees who employees and retired current base of the strong from use at home, at school, and within their communities to to their communities school, and within at home, use at website also serves as a one-stop shop of tools, tips, and tools, tips, and shop of serves as a one-stop website also to the pulse of our communities. to the pulse of the lives of survivors of domestic violence. domestic violence. survivors of the lives of respond to bullying. respond resources where youth can search for information they can information for search youth can where resources providing grants to student-led initiatives that benefit both that to student-led initiatives grants providing performed a kind of double duty by reducing the amount of the amount of duty by reducing double a kind of performed Be Kind Online aims to eliminate cyberbullying in in cyberbullying aims to eliminate Online Be Kind Houses and Services of Saskatchewan, has successfully successfully has Saskatchewan, of Houses and Services In addition, SaskTel and Saskatchewan communities benefit communities and Saskatchewan In addition, SaskTel electronic waste ending up in our landfills while transforming in our landfills while transforming waste ending up electronic give their time and effort to support their communities. communities. to support their give their time and effort Many of our other community initiatives also aim to address aim to address also initiatives our other community Many of students and the community as a whole. The program’s a whole. The program’s as the community students and and business. Our Phones for a Fresh Start program, in Start program, a Fresh for and business. Our Phones collaboration with the Provincial Association of Transition Transition of Association Provincial with the collaboration current issues that resonate with both our customers with both resonate issues that current capable of taking the lead to keep our company connected connected our company to keep taking the lead capable of Saskatchewan and promotes kindness within our schools by our schools within kindness promotes and Saskatchewan They have shown time and again they are more than more are They have shown time and again they 8 | SHARING OUR STORIES Sharing Our Stories Our Sharing important culturalaspectslike historyandtradition. presented anexcellent opportunitytopromote other celebration wasIndigenouslanguages,buttheeventalso that showcasetheirrichhistory. Thethemeof thisyear’s take inthedrumcircles, ceremonies, andotheractivities pow wow. Otherstravelledfrom across NorthAmericato drummers, andsingerstookpartinSaskatchewan’s largest In celebration of its30thyear, over600Indigenousdancers, November 1-3, 2019at theSaskTel CentreinSaskatoon. Celebration andPowWow, whichtookplaceon Indigenous Nations (FSIN)SpiritofourNations Cultural proudly sponsoredthe2019Federation ofSovereign and communities,that’s whySaskTel onceagain SaskTel greatly valuesSaskatchewan’s Indigenousculture The NorthStargoesbyseveralnamesinIndigenous finished onEarth,where they return. It’s where theStar People come from and,whenthey’re Folklore saystheNorth Staristheoneconstant intheuniverse. including Ekakatchet Atchakos, whichtranslates toitstandsstill. Participants in the Spiritof Our Nations CulturalCelebration andPow Wow inSaskatoon. IN THE SPIRIT OF THE STAR PEOPLE communities, communities, communities across theprovince.” strong relationship SaskTel hascreated withIndigenous educational success,” Colleensaid.“We are proud of the because itoffers more opportunities for economic and ever-increasing capacityfor advancement intechnology “As Indigenouscommunities grow, theyare embracingtheir future of SaskTel. will playanincreasingly importantrole intheeconomic cultural fabric,andwitharapidlygrowing population they Indigenous Peoples are anintegralpartof Saskatchewan’s the province. relationships wehavewithIndigenouscommunities across is committed tosustainingandenhancingthestrong treaty territoriesandhometoover74 FirstNations, SaskTel As acompany operating inaprovince covered bysix long-time attendee of theevent. for theBusinessSalesIndigenousMarket, whoisalsoa that showedup,”saidColleenCameron, Account Executive together, andthat showsthrough thethousandsof people FSIN alwaysdoessuchagreat jobof puttingthiscelebration team memberShawnAlbertandrepresent SaskTel. The “It wasabsolutelyincredible toattend thiseventwithmy SASKTEL 2019/20 ANNUAL REPORT | 9 with Saskatchewan Crowns continues to expand, continues Crowns with Saskatchewan as gas natural to integrate with SaskEnergy works Greenwave and public metrics into their analytic database consumption engagement displays. Innovations Greenwave is new, While the business partnership to use Greenwave’s continues SaskTel is no stranger to SaskTel. in the SaskTel consumption energy technology to monitor in Regina. Centre Collaboration to work with Greenwave opportunity think we have a real “I revenue bring in some additional their services, to promote their help our customers solve some of importantly, but more said Glenn Buchanan, Technical management problems,” energy to our it as complementary to think of like Sales Consultant. “I’d this partnership we have another With offerings. many service problems.” tool in our tool belt to help solve our customers’ SaskTel contributes to Greenwave’s solutions and expertise solutions and Greenwave’s to contributes SaskTel including on enabling components, collaboration through Collaboration integration. and systems data, connectivity,

GOING GREEN FOR TRUE SAVINGS TRUE GOINGGREEN FOR SaskTel Technical Sales Consultant, Lukas Terblanche (right) meets with representatives of Greenwave Innovations. Greenwave of (right) meets with representatives Sales Consultant, Lukas Terblanche Technical SaskTel Greenwave Innovations uses detailed measurement and detailed measurement uses Innovations Greenwave of to understand all elements in order solutions verification and electricity, usage, including water, a building’s energy even to capture gas. While designing monitoring systems their clients offers Greenwave details, the most granular of energy produce that and analytic services data real-time results. conservation “It’s very exciting to see SaskTel partner with a company partner very“It’s to see SaskTel exciting but a not only local that’s Innovations Greenwave like businesses maximize true leader in helping Saskatchewan said Doug Burnett, SaskTel their energy efficiency,” offer their services to “Partnering President and CEO. products and helps showcase the leading-edge business while ensuring the company solutions offered by SaskTel, of Canada’s continues its decade-long legacy as one Greenest Employers.” As the leading Information and Communications and Communications As the leading Information helps SaskTel in our province, provider Technology energy business in many ways, including Saskatchewan a of solutions. As a result management and monitoring Innovations, and Greenwave SaskTel partnership between and more building a greener a step toward we have taken our province. for future connected It took the North Star more than 20 million years to reach years to reach than 20 million North Star more It took the the for to shine point, it was ready that From nuclear fusion. we have in Saskatchewan, years or so. Here next 10 billion we use our energy. mindful about how more to be a little 10 | SHARING OUR STORIES the community centre. operations whentheirresidents canonce againenjoyusing is closed.Theywillnowbewellpositionedtooptimize in additionalsavingsof $2,500 permonthwhilethefacility able toreduce electricityconsumption by30%,resulting Arena. Leveraging theinformation available,Melfort was solutions throughout theirNorthernLightsPalace Pool and step aheadof thegamebyhavinginstalledGreenwave’s forced toclosetheirfacilities, theCityof Melfort wasone offer. Whilemunicipalitiesacross Saskatchewan were the immensevaluecollected consumption data can The COVID-19 pandemicpresentedof ademonstration Change Convention. Saskatchewan and accepted bythe Governmentof CanadaasaCanadiandelegate at the2019UnitedNations Climate Greenwave President and CEO Dean Clarkspeaksat COP25 inMadrid.Deanwasrecommended bytheGovernment of utility savingsandtosupporttheirsustainabilityinitiatives. Saskatchewan, allowingourclientstorecognize long-term to optimize energy consumption withinallbuildingsacross directly withGreenwave andtheclient.Together, weaim recognized bySaskTel involvingGreenwave, SaskTel willwork of future success for SaskTel. Whenasalesopportunityis Forming partnershipssuchastheseisanimportantpart SASKTEL 2019/20 ANNUAL REPORT | 11 While there still is much work to do to deliver the speeds to deliver the speeds is much work to do still While there customers are and that is delivering the competition that the broadband to reach on the path is SaskTel demanding, target. access nine Saskatchewan’s is now available in For example, infiNET and a number Rosthern, of the community major centres, is currently SaskTel communities. bedroom Saskatchewan of communities: more five to fibre of working on the expansion Melville, Nipawin, and Tisdale. Humboldt, Melfort, investment of approximately This is part of the SaskTel expansion broadband multi-year $670 million in the bonding like is using new technologies program. SaskTel subscriber line speeds such to deliver faster digital as the recent launch of 50 Mbps service in numerous communities throughout the province. service wireless LTE out enhanced also rolled SaskTel its rural wireless as part of communities of in dozens the to improve This is a major program improvements. Saskatchewan. throughout experience wireless Broadband (both fixed and mobile) is the SaskTel North Star and is foundational to the company’s future. to the foundational North Star and is and mobile) is the SaskTel (both fixed Broadband “Customers have choices as there are many competitors many competitors are as there have choices “Customers BPT. said Colleen Madden, Director, in our environment,” and “They they get good value in products will go where on providing focusing we’re initiative, With the BPT services. efficient and with the most customer service excellent go on behind the scenes.” that systems and processes The team has worked and collaborated with members from with members from collaborated and The team has worked very engaged in day-to- people who are of over 50 groups broadband wireline consumer day activities involving SaskTel about issues, feedback receive They and services. products processes. service gaps, and pain points with broadband While providing competitive speeds through the adoption the adoption speeds through competitive While providing delivery broadband new technologies is vital, improving of The experience. customer a great will also ensure processes (BPT) team is contributing Transformation Business Process goal. transformational corporate to that The SaskTel 2019/20 Strategic Plan identified for the first for Plan identified Strategic 2019/20 The SaskTel to the future deemed critical focus area time a specific one million broadband of A target SaskTel. of success North as the SaskTel 2025 has been identified by accesses to the high speed access and mobile fixed including Star, Things connections. of internet as well as Internet THESASKTEL NORTHSTAR 12 | SHARING OUR STORIES Keith Perras, CustomerService Technician, worksonamaxTV Stream install. • • • The CDEgoalisdefinedas: Customer Services Operations. introduced totransform SaskTel’s biggestdepartment, Delivery Evolution (CDE)program isallabout.CDEwas The interests of ourcustomersare what SaskTel’s Customer EVOLUTION DELIVERY CUSTOMER Review aimedat improvingourcustomerexperience. initiatives that resulted fromaCorporate Performance ever-changing demands.Featured hereareseveral transforming andevolvingtomeetourcustomer’s As ourbusinessworldchanges,SaskTel isbusy OUR CUSTOMERS ARE THE REAL STARS REAL THE ARE CUSTOMERS OUR demands orcorporate priorities Right time–Thehighestprioritytasks,basedoncustomer capacity tocomplete thework Right place –Theclosesttechnicianwiththeskillsetsand for thework Right person–Thetechnicianwiththeskillsetsrequired to helpaccelerate SaskTel onitsjourney. were digitaltransformation initiatives that are expected on pace anddeliveringtheexpectedbenefits.Several Corporate Performance Review tomake sure theyare improvement initiatives that were identifiedbythe for guidingandtrackingtheimplementation of the The Transformation ManagementOffice is responsible TRANSFORMATION MANAGEMENT OFFICE have everhad. and externalcustomersthebestcustomerexperience they creating aunitedteamfocused on providing bothinternal All inall,thenewSalesandSupportstrategy isabout specifically for sellingandservingexternalcustomers. For example,contact centres havecreated asalesqueue to besuccessful, andsimplifyprocess andprocedures. experience, strengthen oursalesculture, enableourpeople The focus of contact centres istoimprove customer CONTACT CENTRES experiences andmeetSaskTel’s financialandoperational targets. SaskTel toultimately provide bettercustomerandemployee Once implemented,theimprovement initiatives willallow SASKTEL 2019/20 ANNUAL REPORT | 13 clients throughout from feedback Gathering value to clients Delivering • delivery development, and design, • Adjusting the plan as needed when new all levels to at Empowering decision-making Removing unnecessary approvals and/or approvals unnecessary Removing Donna Young (left) and Tiffany Eide of the Transformation Management Office. Transformation of the (left) and Tiffany Eide Donna Young • discovered challenges are • delay avoid • our processes steps in in Regina. Contact Centre the SaskTel at Davies (left) and Melissa Totten Katherine The term for this approach is “agile,” and involves: is “agile,” this approach The term for SaskTel International supports this initiative primarily by primarily this initiative supports International SaskTel stable by providing lines. They do this front enabling their the customer and to support automation more systems and to deliver solutions time it takes the amount of by reducing products. and/or launch new DOING IT RIGHT TIME THE FIRST 14 | SHARING OUR STORIES TWO MORE SHINING STARS SHINING MORE TWO businesses inSaskatchewan. We moveveryquicklynow.” manage over700websitesfor smallandmedium-sized ads, wenowhavethelargest digitalbillboard networkand “And, whileourbusinessmodelthenwassellingcolour print along withtheincredible changesintechnology,” saidAllan. phone bookinthepast,Directwest hasadapteditsbusiness the company wasquitedifferent. “With a focus onthe Marketing ManagerAllanMillhamremembers atimewhen and more. social mediamarketing, onlinelistings,Googleproducts, with websitedesignandmanagement,digitalbillboards, companythat providesbusinesses marketing services Saskatchewan. Directwestisnowknownasadigital purpose–to providephonebooksforthecitizensof Thirty yearsago,Directwesthadasimplebutimportant FOR 30 YEARS CONGRATULATIONS, DIRECTWEST, Directwest anditsemployeescelebrated 30yearsin2019.

business forever!” could soonseehowthissystemwasgoingtochangeour she sawaCRMsystem.“I wasoverwhelmedinitially, butI Management (CRM)system.Joelleremembers thefirsttime depth knowledgeof Directwest’s CustomerRelationship for theYellow Pages.She’snowaBusinessAnalystwithin- was oneof thegraphicartistswhooriginallycreated ads Joelle McCall,BusinessRequirement andProcess Planner, SASKTEL 2019/20 ANNUAL REPORT | 15 SecurTek is now one of the market leaders for interactive for interactive leaders now one of the market is SecurTek in security monitoring and commercial residential footprint to have a national have grown Canada. “We Island to from Vancouver 70 authorized dealers with over Nico says in Saskatchewan,” including 28 Newfoundland, of Business Development for Vice President Khakhar, to over we provide monitoring “and SecurTek, customers.” 85,000 the highlights and milestones, of While it’s been 20 years SecurTek. looks bright for future SecurTek has been helping to keep customers safe and secure since 1999. since and secure customers safe has been helping to keep SecurTek The company started with a small group of employees, of started with a small group The company Saskatchewan- a few working with based in Yorkton, in which in an industry based dealers and competing Under was the incumbent. nor SaskTel neither SecurTek and others who followed, Al Rogers, the leadership of the best customer providing on focused the company philosophy it grew With that a fair price. for service within share market establishing a very strong rapidly, expanded outside of and soon Saskatchewan, the province. Twenty years ago, SecurTek was formed to bring quality to bring was formed ago, SecurTek years Twenty then, the Since residents. to Saskatchewan security services enjoys a presence evolved and now subsidiary has SaskTel the country. across SECURTEK CELEBRATES 20 YEARS! 2019/20 Corporate Social Responsibility Highlights

In a world of constant change, finding true north and staying on course with our corporate values to make our province and our world a better place is more important than ever. SaskTel is proudly local, and with a worldwide pandemic upon us, giving back to our communities and keeping Saskatchewan people connected with their world remains our priority.

For over 110 years, SaskTel has been connecting people by To provide a truly customer-centric organization, SaskTel providing world-class services to the people of Saskatchewan, launched a sales and support strategy to promote an improved making SaskTel a part of the fabric of our province. In 2019/20, customer experience for both external and internal customers. we declared broadband as our North Star and set a goal of This saw the alignment of our structure, processes, and people having one million broadband accesses by 2025. With the to allow us to achieve current and future business goals by COVID-19 pandemic changing the way our customers work, improving the customer experience, strengthening our sales broadband connections have become more critical. culture, and simplifying processes and procedures.

To better serve the people of Saskatchewan, SaskTel SaskTel is transforming at a rapid pace and requires an agile remains focused on providing exceptional customer service, workforce that can respond to these changes. To address increasing employee experience, investing in provincial this ever-changing environment, SaskTel established the communities, reducing our environmental footprint, and Transformation Management Office (TMO) following expanding our services. These efforts are delivering on the recommendations of a corporate performance review aimed company’s Corporate Social Responsibility (CSR) initiatives at identifying opportunities to grow revenue and reduce the and the commitment to residential and business customers. appropriate company costs. The TMO played an important role in the capital optimization project and the Contact CSR has been integrated into SaskTel’s business strategy Centre review. The capital optimization project enhances the for years and continues to help the company deliver on governance of capital spend by reviewing how every dollar is revenue growth, operational efficiency, risk management, allocated to meet the strategic priorities. The Contact Centre and strategic alignment. As a leading information and review saw several initiatives implemented that deliver improved communications technology provider in Saskatchewan, we customer experience, sales performance, and process maturity. attained annual revenue of approximately $1.3 billion with approximately 1.4 million customer connections, including • Won the J.D. Power award for Highest Television and over 618,000 wireless accesses, 314,000 wireline network Internet Customer Satisfaction in the West Region for accesses, 276,000 internet accesses, 111,000 maxTV service the seventh consecutive year subscribers, and 85,000 security monitoring customers.

FOCUS ON CUSTOMER EXPERIENCE

SaskTel continues to transform in order to deploy innovative solutions to customers, and the focus on delivering an exceptional customer experience remains top of mind. Our customers always come first, and we are proud to provide the communications, entertainment, security, and information technology services that Saskatchewan people need to make the province a better place for everyone. 2019/20 CORPORATE SOCIAL RESPONSIBILITY HIGHLIGHTS 2019/20 CORPORATE 16 | SASKTEL 2019/20 ANNUAL REPORT | 17 Partners in Employment (works directly with employers (works directly Partners in Employment hidden or visible disabilities to create and individuals with job opportunities) successful support individualized (provides Inclusion Saskatchewan disabilities andand advocacy to individuals with intellectual their families) Centre Autism Resource At SaskTel, we strive to be fluent in the language of we strive to be fluent in the language At SaskTel, especially applicable when we’re That’s customer service. customers who require or business by residential contacted other than English. in a language assistance As SaskTel enters a new decade, focus on digital transformation enters a new decade, focus As SaskTel Companies in all industries success. is critical to the company’s that seeing challenges and opportunities in technologies are To rapidly changing customers’ needs and expectations. are launched its Digital Transformation meet these needs, SaskTel new skills and mindsets, to incorporate (DTLP) Path Learning is intended to things. The DTLP doing and new ways of and its impact on people, digital transformation introduce and technology. processes, As one of Canada’s Best Diversity Employers, hiring persons hiring persons Employers, Best Diversity Canada’s of As one seriously. very takes topic SaskTel is a diverse abilities with that an initiative 4to40 Program, in the participates SaskTel disabilities with forward- people who have aims to connect a flexible 4-to 40-hour who embrace thinking employers out reaches SaskTel partner, Being a consulting workweek. connections and community organizations to interested supporting for practices current the company’s to share disabilities. individuals with cognitive supports and works SaskTel Besides the 4to40 Program, including: with similar organizations, • • • SaskTel employees helped spread the word about wellness through the Get Your Wellness On 2019 Corporate Challenge. On 2019 Corporate Wellness the Get Your about wellness through the word employees helped spread SaskTel Bringing in the next generation of employees is crucial to of Bringing in the next generation and business continuity. success future SaskTel’s ensure look to larger While skilled and talented employees often plenty of are there their careers, to advance centres the to make continue that opportunities within SaskTel employees. prospective for choice an attractive company For the eighth year in a row, SaskTel was proud to be was proud SaskTel For the eighth year in a row, Employer for as a Top included in this list and recognized continues the labour market in Canada. As People Young looking for continuously to tighten, young employees are Co- SaskTel’s in their growth. invested are employers that mentoring, job shadowing program, Education operative to be cited by and NextGEN employee network continue SaskTel at an atmosphere create because they Mediacorp their careers. young employees can advance where Being a top employer means always taking steps forward to means always taking steps forward Being a top employer a certainly and that’s employees, for the workplace improve to be honoured was recently The company SaskTel. priority at Employers by Mediacorp Top Saskatchewan’s named one of always we’re years. At SaskTel, consecutive 14 Canada Inc. for our employees. Whether the needs and goals of considering a company as our aspirations one of work or personal life, wellness options and types of numerous that is to ensure employees. available for are programs EMPOWERING OUR EMPLOYEES of and culture diversity the represent Our employees the throughout They can be found Saskatchewan. volunteering in their raising families, and working, province, commitment, and Without their strength communities. the outstanding customer be able to deliver we wouldn’t we do today. experience As SaskTel continues to look for means to do it right the of volunteer time to support worthwhile community first time, and as Saskatchewan’s population continues to initiatives in 2019/20 grow and become more diverse, the company has taken • For the past 21 years, SaskTel has sponsored the SaskTel steps to ensure that all customers receive the best possible Indigenous Youth Awards of Excellence. These awards customer service. After a trial period one year ago, SaskTel offer inspiration for not just the youth, but their families partnered with LanguageLine and introduced the service to and communities. The awards, which had a record the Consumer Contact Centre. LanguageLine provides number of 164 nominees this year, allow Indigenous on-demand language translation services in 240 languages, youth to showcase their achievements in a positive any time of day, 365 days a year. and enlightening manner • In 2019/20, SaskTel proudly partnered with the Yorkton Film INVESTING IN SASKATCHEWAN COMMUNITIES Festival to present this year’s Golden Sheaf Awards, which took place during the festival. With over 140 nominees in 29 SaskTel is proud to remain an integral part of our community, categories, a few featured films were produced specifically and through long-standing partnerships we are committed for SaskTel’s maxTV Local on Demand programming to making a positive difference in the lives of Saskatchewan • SaskTel was proud to support National Indigenous people. Giving back to the communities where our employees Peoples Day, which was a chance to celebrate the live and work is part of the culture of SaskTel, including the heritage, diverse culture, and outstanding achievements following highlights: of First Nations, Inuit, and Métis. Members of the SaskTel • Throughout 2019/20, SaskTel contributed $2,850,827 to Aboriginal Employee Network were a big part of the Regina 957 non-profit and charitable organizations, community celebrations. SaskTel enthusiastically embraces diversity associations, venues, events, and partnerships in more in the communities where it operates, and where its than 233 communities employees live and work • In 2019/20, 73% of SaskTel suppliers were located in • The Computers for Schools program is all about education Saskatchewan, providing economic opportunities to and in Saskatchewan, the program provides more than small- and medium-sized businesses 4,000 computers a year to schools, libraries, and non-profits. • SaskTel supported Ability in Me (AIM), a Saskatoon program That makes the program a great opportunity to learn and that helps individuals with Down Syndrome reach their grow for anyone seeking a career in the IT field. Since the potential. SaskTel and the Bridge City Pioneers sponsored program’s inception in Saskatchewan, the SaskTel Pioneers the AIM program’s sixth annual Dine for a Difference have refurbished and donated over 70,000 computers fundraiser, raising over $50,000 that went directly to AIM’s and printers. This represents savings of approximately specialized services $60,000,000 for schools and libraries in the province • With 3,942 members across the province, the SaskTel • With a strong focus on youth, SaskTel sponsored the third Pioneers contributed $206,273 in financial donations, annual Trucktastic! Family Service Saskatoon fundraiser, $983,700 in-kind donations, and more than 42,000 hours which will help Family Service Saskatoon support programs to help families and children build healthy relationships. The 2019/20 CORPORATE SOCIAL RESPONSIBILITY HIGHLIGHTS 2019/20 CORPORATE The Ability in Me program offers specialized therapy and innovative programs that support individuals up to 22 years of age. 18 | SASKTEL 2019/20 ANNUAL REPORT | 19 one that can worsen online. Be Kind Online’s focus is tofocus Online’s Be Kind online. can worsen one that kids understand by helping it starts before bullying prevent The same a kinder world. we can make together that expand their partnership the SJHL to message attracted the showcase Be Kind Online in to include with SaskTel than sports or about more is the SJHL, athletics event. For competition; levels of to higher to advance opportunities skills and life it’s about building character Bullying Report Education’s of As host to the Ministry BeKindOnline.com Tool, Reporting SK – Student Online bullying of incidents to report location serves as a one-stop to find helpful schools, and a place within Saskatchewan those experiencing bullying or those to assist resources trying to support them • to to $1,000 up grants of youth can apply for Saskatchewan awareness bullying prevention their ideas around help share kindness in their schools and and/or random acts of over Be Kind Online has awarded date, To communities. $21,126 was the past year alone, a total of During $92,000! kindness. spread to help students awarded

bucket truck on display. The event display. The truck on bucket Saskatoon businesses haul their biggest businesses Saskatoon SaskTel Be Kind Online joined forces with the Online joined forces Be Kind SaskTel (SJHL) and the League Junior Hockey Saskatchewan (MJHL) to host 600 League Manitoba Junior Hockey the Showcase Pink and White Game and Rallystudents for This event raised in Regina. Centre the Co-operators at youth, and is for problem bullying is a that awareness SaskTel employees raised over $165,000 through SaskTel SaskTel through over $165,000 employees raised SaskTel to commitment Along with SaskTel’s in 2019. TelCare nearly the total reached each donation, 50% of match to 70 charitable and allocated are Funds $248,000. Regina’s Saskatchewan. across organizations non-profit charitable and 70 is one of Centre North Central Family a 2019receive to organizations Saskatchewan non-profit donation TelCare SaskTel and loudest equipment to the expo, where crowds equipment to the and loudest machinery in a safe favourite heavy observed their environment and supervised crowd at Prairieland Park in Saskatoon was revved up was revved in Saskatoon Park at Prairieland crowd the SaskTel to see saw local The After-School program at Regina’s North Central Family Centre provides daily meals, tutors, and arts and crafts for children. for daily meals, tutors, and arts and crafts provides Centre North Central Family Regina’s at The After-School program • • Corrie Herasymuik (left) and David Coldwell oversaw the SaskTel bucket truck at Trucktastic! in Saskatoon. Trucktastic! truck at bucket Corrie Herasymuik (left) and David Coldwell oversaw the SaskTel 20 | 2019/20 CORPORATE SOCIAL RESPONSIBILITY HIGHLIGHTS • • • • • • • Some benefits of anEMSinclude: set of core standards. business. TheEMSisbasedonauniversallyrecognized protecting thenatural environment andthefuture of the used toensure that thecompany remains focused on System (EMS)policy, whichisamanagementstructure SaskTel continues tofollow theEnvironmental Management organizational practices alignedwithenvironmental policies. sustainability andstewardship, withasolidfoundation that has are wellpositionedtotake thenextstepinenvironmental our businessprioritieswithprotecting theenvironment. We As agoodcorporate citizen, SaskTel workstobalance REDUCING OUR ENVIRONMENTAL FOOTPRINT The SJHL-MJHLShowcasePinkandWhiteGamefeatured brilliantpinkandwhitejerseyswornbybothteams. performance through more efficientoperations Increase profit, improving environmental impacts of businessactivities Gain betterunderstandingof environmental among employees Build awareness of environmental concerns Demonstrate goodcorporate image Reduce waste Maximize efficientuse of resources Minimize environmental liabilities

violence tobeginrebuilding theirlives. landfill, itassistsSaskatchewan peoplewhoare fleeingdomestic the environment bypreventing oldphonesfrom endingupin unwanted cell phonefor recycling. Notonlydoesthisprotect program, that’s exactly thecasewhenacustomerdonates an care of another, butwithSaskTel’s Phones for aFresh Start It’s notoften that bytakingcare of oneproblem we take environmentally responsible practices andprograms. have achievedexcellence through theircommitment to competition recognizes 50employers across Canadawho consecutive year. Annually, theCanada’s Greenest Employers of Canada’sGreenest Employersin2019for theeleventh efforts, Mediacorp Canadaselectedthe company asone Because of SaskTel’s long-standingenvironmental conservation environmental goals. regulators are followed tohelpthecompany reach businessand and procedures laidoutbyprovincial andfederal environmental aligned withSaskTel’s pre-assessment process, strictpolicies process toadviseonthesafest waytomoveforward. To stay identified, SaskTel conducts anin-depth review andscreening are screened for environmental concerns andifsomeare that protects theenvironment. Networkconstruction projects company’s dutytoensure that operations are doneinaway of Saskatchewan’s mostdelicate landscapes,andit’sthe Many of SaskTel’s construction projects are builtonsome SASKTEL 2019/20 ANNUAL REPORT | 21

SaskTel EnviroCare is an employee-led network committed to committed network is an employee-led EnviroCare SaskTel environmental and promoting community a greener creating to change a negative took this opportunity They awareness. of their mission a positive one, furthering into situation and live in. Besides in which we work the spaces Greening the throughout donations makes EnviroCare planned projects, of assistance to be mandate fits their that a situation year when (a was able to assist the YMCA group arises. In this case, the to deal with an unexpected organization) charitable non-profit made possible due to was donation EnviroCare’s situation. efforts recycling their internal bottle from received proceeds SaskTel. at Network Aboriginal Employee SaskTel’s For the past eight years, a recently, more clothing drives and (SAEN) has conducted schools to several community donated toy drive. Items were SAEN and like Employee networks and Saskatoon. in Regina being selected involvement led to SaskTel community SaskTel’s Canada Inc. by Mediacorp 100 Employer in Canada as a Top

Kindness and care help to soothe even the most senseless of help to soothe Kindness and care this past September this occurred An example of situations. out to the community reached Regina of when the YMCA Marion McVeety at a daycare of the playground help after for and the EnviroCare SaskTel vandalized. Elementary School was stepped up to help. Pioneers SaskTel Partnering with the Provincial Association of Transition Transition of Association the Provincial with Partnering sends SaskTel (PATHS), Saskatchewan of and Services Houses for International Distributors to Electronic phones cell donated to recycle have allowed SaskTel donations date, To processing. and purchase financing the phones, cell close to 117,000 addition, In phone cards. prepaid of worth $87,000 of donation more than 3,300 brand-new cell phones were distributed to 21 distributed phones were cell brand-new than 3,300 more the province. shelter agencies throughout PATHS participating SaskTel Pioneers volunteer at Camp Easter Seal. Pioneers volunteer at SaskTel 22 | 2019/20 CORPORATE SOCIAL RESPONSIBILITY HIGHLIGHTS One of SaskTel’s smallcell sitesinBulyea,Saskatchewan. 50 MbpsDSLservices allowthecompany tooffer the available inSaskatchewan. Innovations like SaskTel’s new tiers provide thefastestdigitalsubscriberline(DSL)services Extended 50HighSpeedInternetservice. Thenewservice SaskTel announced thelaunchof interNET50and for speed,andasalways,SaskTel delivers.During theyear, There are timeswhenSaskTel customershavetheneed small cell sitesinSaskatchewan communities. in December 2017. Since then,SaskTel hasdeployed103 the Governmentof Saskatchewan inpartnershipwithSaskTel high speedinternetservices. Theinitiative wasannounced by communities withenhanced access toreliable cellular and Saskatchewan ispartof afour-phase initiative toprovide rural The smallcell sitebeingdeployedbySaskTel inrural capabilities inthefuture. opportunities toprovide additionalenhancements and expenditures toimprove customerexperience andcreate Throughout 2019/20, SaskTel invested$263millionincapital customer demand,particularlyfor data andcell service. network. Thecompany’s investmentisalsohelpingtomeet meet growth needs, andensure aconsistently improved upgrades that helpstimulate economic growth, proactively SaskTel continues toinvestincapital expansionand PROVINCIAL ECONOMY CONTRIBUTING TO A STRONG

throughout Saskatchewan. from 106wireless towersservingover700communities 50 Mbpsorfaster. SaskTel fusionInternetservice isavailable up to25Mbps,and319communities havespeedsof have speedsupto10Mbps,15communities havespeeds 51 communities havespeedsupto5Mbps,74 communities Internet service in459communities across theprovince; As of March 31,2020, SaskTel offers wireline HighSpeed to 83.1% of Saskatchewan residents. offers thoselevels of broadband internetspeeds,orfaster, strides inachievingthisgoalthepastyearandcurrently services withinthenextdecade.SaskTel hasmade great and 10Mbpsuploadspeedfor fixed broadband internet Canadians willhaveaccess to50Mbpsdownloadspeed Commission hassetanaspirational target: 100%of The CanadianRadio-televisionandTelecommunications to fibre. continuing thetransitionof consumer networksfrom DSL increasingly quick speedsthat customersdemand,while SASKTEL 2019/20 ANNUAL REPORT | 23

Operating ResultsOperating Significant Accounting Policies, and JudgmentsEstimates, Financial New International of Application Reporting Standards and InterpretationsNew Standards Not Yet Adopted Not Yet Service Record of Five-Year Glossary

46 46 Financial Summary 47 Net Income 48 Revenue 51 Expenses Income 53 Other Comprehensive 53 Liquidity and Capital Resources 55 Capital Management 56 Capital Expenditures 57 57 57 58 60 Rationale for the Selection of Balanced Balanced Selection of the for Rationale

Enterprise Risk Management Introduction DevelopmentsAccounting Policy Forward-Looking Caution Regarding Our Business Industry Our Strategy Performance Management Scorecard Performance Measures Performance Scorecard

43 Risks 43 Strategic Business Risks 44 Core 24 24 24 24 Information 24 25 29 Goals 29 Strategic 30 Scorecard 30 Balanced 42

Contents Management’s Discussion and Analysis Discussion Management’s 24 | MANAGEMENT’S DISCUSSION AND ANALYSIS recurring itemsannounced oroccurring subsequently. not take intoconsideration theeffect of transactionsornon- statements willoccur. Aswell,forward-looking statements do that any of thepredictions forecasted 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 2020/21cash plans andstrategic priorities,thesources of liquiditywe statements aboutSaskTel, itsbusinessoutlook,objectives, Many sectionsof thisdiscussionincludeforward-looking LOOKING INFORMATION REGARDINGCAUTION FORWARD- retained earningswere required. initial application, April1,2019;however, noadjustmentsto the openingbalance of retained earningsat thedate of of initiallyapplyingIFRS16beappliedasanadjustmentto adoption of IFRS16alsorequires that thecumulative effect at thetime.Themodified retrospective approach tothe IAS 17, IFRIC4, SIC-15, andSIC-27, thestandards ineffect information, whichcontinues tobereported under approach, theCorporation hasnotrestated comparative modified retrospective approach. Inaccordance withthis Standards” inthisMD&A.Adoptionwasbasedonthe in “Application of NewInternational FinancialReporting Financial Reporting Standards (IFRS)16Leases asdiscussed Effective April1,2019, theCorporation adoptedInternational ACCOUNTING DEVELOPMENTS POLICY Corporation uptoMay28, 2020, unlessotherwisestated. to 107of thisreport andincludesinformation availabletothe financial statements andaccompanying notesonpages62 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

statements mayornotoccur. uncertainties, assumptionscontained intheforward-looking competition, andregulatory environment. Giventhese conditions, interest andexchange rates, performance, include, butare not limitedto:generaleconomic andpolitical and assumptions.Factors that caninfluence performance actual results todiffer materially from estimates, predictions, looking statements, asanumberof factorscould cause Readers shouldnotplace unduereliance onforward- in the province’s largest broadband networks, a better Saskatchewan through investments corporation, we are proud to of building part be million1.4 customer aCrown connections. As billion in annual$1.3 revenue approximately and provider in Saskatchewan, with approximately Communications Technology (ICT) SaskTel is the leading Information and BUSINESS OUR • and services inSaskatchewan, including: productscommunications andinformation technology(IT) SaskTel anditssubsidiariesoffer thewidestbreadth of Saskatchewan’s largest employers. 3,400 full-timeequivalents(FTEs),makingSaskTel oneof the world.TheHoldco hasaworkforce of approximately and solutionstocustomersinSaskatchewan andaround SaskTel International) offer awidearray of products, services, Corporation’s subsidiaries(SaskTel, Directwest, SecurTek, and is aSaskatchewan Crown corporation. TheHolding Saskatchewan Telecommunications HoldingCorporation Holding Corporation Saskatchewan Telecommunications businesses throughout the province. solutions available to consumers and awidearrayand and services, of products, data services inSaskatchewan networks, high-qualityandreliable voice andhigh speed Generation (4G)andLong-Term Evolution (LTE) wireless Wireless services delivered onworld-classFourth Y our Life.Connected . ™

SASKTEL 2019/20 ANNUAL REPORT | 25

Customers continuing to consume more data and demand and data more to consume Customers continuing streaming, video and music faster speeds to accommodate devices connected of number gaming, and increasing further expanding into as an essential service, Broadband rural areas Over Cable Service in Data investing Cable companies technology to gain broadband Specification Interface speed advantages higher speeds, for pressure Government and regulatory rates and lower coverage, improved effectiveness operational to improve Digital transformations artificial intelligence,utilizing cloud-based services, analytics data machine learning, and advanced and experience Customers expecting the same high-level in other industries companies from they receive service extensive customer self-serve Carriers adopting more automation the use of options and increasing with significantCarriers beginning to launch 5G networks, to continue capital investment and enhancements

INDUSTRY The ICT industry important an role plays in transformation, digital world’s the enabling importance placed ever-increasing an with implementing While connectivity. on broadband service providers technologies, network latest the and digital their enhance to working are cybersecurity capabilities. Industry and Business Environment Trends significant to undergo The ICT industry continues driven by: transformation • • • • • • • •

fibre optic network enabling speeds up tospeeds up enabling network optic fibre infiNET Local access network throughout urban and rural Saskatchewan network throughout access Local Expansive data centre footprint and service capabilities and service footprint centre Expansive data cloud-based communications of Complementary portfolio services technology and information services and consulting Professional services digital marketing Directwest security monitoring, and residential commercial SecurTek smartHOME and SaskTel control, including access well as medical alert and lone as interactive services, services worker solutions for and consulting software International SaskTel worldwide providers service communications 900 Mbps in Emerald Park, Estevan, Martensville, Melfort, Martensville, Estevan, Park, in Emerald 900 Mbps Saskatoon, Rosthern, Regina, Albert, Prince Moose Jaw, White Weyburn, Warman, Battlefords, The Current, Swift and Yorkton City, rural wireless fixed – comprehensive fusion Internet network access broadband points access network with over 5,000 selectWi-Fi SaskTel the province throughout television (IPTV) with Protocol – Internet service maxTV the province throughout extensive footprint customers to allowing service – streaming Stream maxTV in Canada anywhere live TV or on demand content watch SaskTel SaskTel The SaskTel International team - the ‘people behind the software’ that helped secure a major contract with CenturyLink. a major contract helped secure that team - the ‘people behind the software’ International The SaskTel • • • • • • • SaskTel is highly competitive, achieving annual revenue of achieving annual revenue is highly competitive, SaskTel million 1.4 $1.3 billion with approximately approximately wireless including over 618,000 customer connections, 276,000 network accesses, wireline 314,000 accesses, subscribers, and service maxTV 111,000 internet accesses, security monitoring customers. 85,000 • • • • • 26 | MANAGEMENT’S DISCUSSION AND ANALYSIS 2 Ibid.,pg.2. 1 TheConference Board of Canada,“CanadianIndustrial Outlook:Telecommunications,” Spring2019, pg. 1. how theyconduct business. their strategies andtransform theirinternaloperations and and opportunities.Successful companies willbeabletoadapt and disruption,service providers are facingnewchallenges As rapidlychangingtechnologiescontinue tofuelinnovation • • • • • • • • • • Profit margin(%) Profit Sources: Statistics Canada;TheConference Board of Canada. Data for 2019andbeyondisforecast. Italicsindicate percentage changes. Revenue ($ billions) ethical andenvironmentally friendlymanner Increasing expectations that companies willactinan constellations toprovide global broadband services Several companies deployinglowEarthorbitsatellite opportunities andnewcompetitors service offerings andenteradjacent industriesiscreating The abilityof companies toexpandtheirproduct and edge computing Increasing useof Internetof Things(IoT) devices and devices increases become more sophisticated andthenumberof connected Cybersecurity anddata privacyrisksare risingasattacks related revenue Continued declineinwireline voice subscribersand number of videostreaming services to accelerate, withconsumption shiftingtoincreasing Cord-cutting bytraditionaltelevisionsubscriberscontinues and disruption Rapidly changingtechnologiesfuellinginnovation to thefederal governmentsecurityreview Supplier uncertainty for wireless networkequipmentrelated considerably higherdata traffic change howmobiledevices are used,andresult in networks, whichare expectedtofacilitate newapplications, Increased speeds andreduced latency onemerging 5G Communications ServicesSector–FinancialOutlook 2017 13.8 67.6 5.9 1.1 9.3 2018 13.8 10.0 72.1 7.1 6.6 2019 - 1.4 13.3 74.1 2.7 9.8 2020 - 1.6 12.9 75.2 1.5 9.7

2021 - 0.8 12.6 76.3

1.5 9.6

2022 - 0.7 12.3 77.6 1.6 9.5 Sectoral Breakdown of Revenue • • • • • and employs120,000 people. It generates revenue of $72.1billion,profits of $10billion, composed of telecommunications andbroadcasting. The communications services sectorinCanadais Communications Services Sector

by thefollowing: Wireline voice 14.6% Broadcasting distribution14.4% Data andprivate line7.6% Sources: Statistics Canada;TheConference Board of Canada. Capital intensive–communications service providers for more than40%of revenue Wireless services are the sector’s largest segment, accounting and financialperformance Highly regulated –policydecisionscanimpactoperations Households account for more thanhalfof sectorrevenue provider service are three timesascapitalintensivetheaverage several smallerregional playersthroughout thecountry Highly concentrated –three large national playersand 2019/20 SectoralBreakdown 2023 - 0.1 12.1 78.8 1.6 9.5 (2019; $billions) TOP COMPANIES BY REVENUE SaskTel COGECO Inc. Quebecor (Videotron) Shaw Communications Inc. TELUS Corporation Rogers Communications Inc. BCE Inc. 2

1 The sector is characterized Thesectorischaracterized (2017) Internet 19.5% Wireless 43.9%

24.0

14.7 15.1 4.3 5.3 2.4 1.3

SASKTEL 2019/20 ANNUAL REPORT | 27

3

Federal government entities such as the Canadian Radio- Federal government entities such as the and Commission (CRTC) television and Telecommunications Development Canada and Economic Science Innovation, role over the industry. regulatory (ISED) have a significant and financial decisions can impact the operations Regulatory providers. service of performance framework the regulatory reviewing is currently The CRTC including the areas with focus services mobile wireless for for wholesale access markets, retail of competitiveness of and the future (MVNOs), mobile virtual network operators decision is expected in 2020. in Canada. A services providers service that established new measures The CRTC nuisance from Canadians must implement to better protect to implement providers service has asked calls. The CRTC calls in 2020. these additional technologies to further address costly and may be unproven The technology is currently to implement. the Internet Code in January 2020. introduced The CRTC new rights to consumer The Code is intended to provide businessinternet customers and establish consumer-friendly While the Code does not apply to all internetpractices. it does apply to SaskTel. in Saskatchewan, providers The Software and Computer Services Sector Services Computer and Software The services and computer software the Canadian years, In recent domestic in gross growth strong experienced sector has areas growth employment. Notable and revenue, product, and intelligence, analytics, artificial data include cybersecurity, shifting have been companies Many Canadian cloud services. storage and management functions such as data internal IT companies. party IT service to third sector and theservices and computer The software as to converge sector continue services communications and less distinct. integrated more technologies become beyond lines and service product expanding Companies are of these sectors is convergence The their traditional offerings. new business opportunities and new competitors. creating Regulatory Environment In 2019, Canada completed an auction for the 600 MHzfor an auction Canada completed In 2019, number a spectrum. The auction rules reserved band of area spectrum blocks in each geographic licence of telecom national large preventing smaller providers, for set-aside blocks. Several bidding on these from providers in successful were including SaskTel, smaller competitors, spectrum acquiring 600 MHz An auction for spectrum in the 3500 MHz band is scheduledAn auction for set-asideto begin in June 2021. This auction will include competition encouraging blocks in some geographic areas, with an competitors smaller and regional by providing 5G services spectrum to provide opportunity to acquire www.ic.gc.ca/eic/site/ict-tic.nsf/eng/h_it07229.html 2018,” Development Canada, “Canadian ICT Sector Profile and Economic Science 3 Innovation, Beginning in 2020, the launch of Canadian 5G networks will the launch of Beginning in 2020, in the sector is expected investment be gradual. Infrastructure deploy over the next several years as companies to be strong antennas to support future cell towers, and small fibre, and Performance on 5G networks. and traffic applications these of as a result will improve 5G networks capabilities of the 3500 MHz spectrum of investments, and the completion returns wave auctions. Financial millimetre auction and future as the time to realize investments will take on these large and adoption increases. improved networks are • • Several wireless spectrum bands are expected to be bands are spectrum Several wireless 5G networks: important for The deployment of 5G networks in Canada will provide users provide will in Canada 5G networks of The deployment latency, reduced and speeds wireless faster with significantly to It is anticipated urban and rural customers. benefiting devices how wireless change that applications new facilitate and devices, connected IoT number of the used, increase are (e.g., autonomous technologies revolutionary may empower agriculture). cities, and precision vehicles, smart 28 | MANAGEMENT’S DISCUSSION AND ANALYSIS underserved ruralandremote areas. access services at 50Mbpsdownload/10uploadin Fund to supporttheprovision of broadband internet applications underits$750million,five-yearBroadband In November2019, theCRTC announced thefirstcall for construction of ruralbroadband infrastructure. of theConnecttoInnovate program, intendedfor the 2030. Theannouncement includeda$1.7 billionrenewal 50 Mbpsdownload/10uploadby2026, and100%by businesses havingaccess tointernetspeedsof at least June 2019, settingatarget of 95%of Canadianhomesand and theRuralHighSpeedInternetStrategy for Canadain The federal governmentannounced theRuralStrategy reducing theaverage cost of cellular phonebillsby25%. the market, reserving spectrum space for newentrants,and established expectations that included:expandingMVNOs in Minister totheof Innovation, Science andIndustry The December 2019Mandate Letter from thePrime

Services Sector.” were discussedpreviously under“Communications These spectrumsare importanttofuture 5Gnetworksand the specificauctiondetailsandruleshavenotbeenfinalized. ISED isconsulting furtheronthelicencing frameworkand the licensing of millimetre wavespectrumwilloccur in2021. licences inthe3500MHzband.ISEDhasalsoindicated that framework that willgoverntheauctionof wireless spectrum In March 2020, ISEDreleased thepolicyandlicencing including 5G. rollout of advanced wireline andwireless networks, under thejurisdictionof theCRTC; andaccelerating the providers) within the scope of theBroadcasting Actand to Canadians(onlineandconventional, domesticandforeign include: bringingallentitiesproviding mediacontent services communications sectorinCanada.Therecommendations the legislative andregulatory frameworkgoverningthe report makes 97recommendations onmodernizing Legislative Review Panelpresented theirfinal report. The In January2020, theBroadcasting andTelecommunications

SASKTEL 2019/20 ANNUAL REPORT | 29 VALUES Honesty, Integrity, Respect Integrity, Honesty, customer experience To provide an exceptional To MISSION — at home,— at work, and on the go OUR NORTH STAR: BROADBAND OUR NORTH STAR: Providing our customers fast with and reliable access the internet location to any at Maximize Long-Term Financial Sustainability Maximize Long-Term Empower a High-Performance Workforce Empower a High-Performance Reinvigorate SaskTel through Digital Transformation SaskTel Reinvigorate Lead the Market in Broadband ServicesLead the Market Deliver an Exceptional Customer Experience Deliver an Exceptional VISION people their to world Be the best connecting at STRATEGIC GOALS STRATEGIC OUR STRATEGY and comprehensive do–building advanced everything we of centre the at are Our customers new to embrace our company and transforming Saskatchewan, throughout networks broadband with us and to do business our customers for making it easier the goal of with digital capabilities–all customers. employees to serve our easier for 30 | MANAGEMENT’S DISCUSSION AND ANALYSIS sustainable long-termgrowth for SaskTel. it isthecore service weprovide. Itisthelargest driverof Broadband isanessentialservice toourcustomersand at work, andonthego. throughout Saskatchewan, at anylocation—at home, endeavour todeliverfastandreliable broadband service experience beginswithourNorthStar—broadband. We SaskTel’s missiontoprovide anexceptional customer Our NorthStar measures andtargets. of SaskTel’s annualplan,includingbalanced scorecard expectations. TheCICBoard provides afinalapproval management plansmaintainalignmentwithshareholder ensure thedevelopmentof ourstrategic andperformance SaskTel’s Board of Directors andExecutive Team striveto Saskatchewan initiative. Rural cellular services willbeenhanced viatheWireless network, targeting onemillionbroadband accesses by2025. in theprovince. SaskTel willfurtherexpanditsfibre optic to invest,grow, andimprove technologyinfrastructure people of Saskatchewan. ThisincludesSaskTel continuing to buildingastrong economy andabetterlife for the Growth 2020–2030. Thisdocumentservesasaroad map Saskatchewan’s Growth Plan:TheNextDecade of SaskTel’s strategic planningisalsoinfluenced by • • • • • • The sixCrown Sector Strategic Priorities: SaskTel andtheCICCrown sector. shareholder expectations andbroad policydirection to develops Crown Sector Strategic Prioritiestoarticulate by Crown Investments Corporation (CIC).TheCICBoard Strategic shareholder direction iscommunicated toSaskTel exceptional experience todayandintothefuture. shareholder expectations, andprovide ourcustomerswithan to ensure thecompany continues totransform, achieve people of Saskatchewan. Ourstrategic goalshavebeenset SaskTel isaprovincial Crown corporation, ownedbythe Alignment withOurShareholder Technology andInnovation Private SectorEngagement Priority Investments Financial Sustainability Skilled LabourForce Customer Focus

in Saskatchewan. contribute toSaskTel providing thebestbroadband services Fibre, mobile,DSL, fixed wireless, andeventually5G, will and speedof ournetworksthroughout theprovince. enhancements toimprove thecoverage, capacity, reliability, These forces are drivingustocontinue investingin mobile broadband. At thesametime,competition isintensifyinginbothfixed and emergence of newtechnologies,applications, andservices. and higherquality. We knowthiswillcontinue withthe Customers are expecting fasterspeeds,more bandwidth, for each of our strategic goals. of strategic actions balanced and scorecard measures regularly monitors our performance through areview Saskatchewan. To ensure that this is achieved, SaskTel financial returns ourto shareholders—the people of responsible to provide exceptional strong and services aCrownAs corporation, SaskTel is fundamentally PERFORMANCE MANAGEMENT included inthisannualreport. targets for 2020/21havenotbeenfinalized andare not Due tobusinessimpactsrelated totheCOVID-19 pandemic, balanced scorecard are notreported intheannualreport. For competitive reasons certain measures includedonour monitored bytheSaskTel andCICBoards quarterly. us tomake operational adjustmentsasnecessary. Results are The measures are monitored throughout theyear, allowing of highperformance. goals. We setchallenging targets that reflect ourexpectations direction provided byCICandwilldriveustoachieveour rigorous internalprocess toensure theyare alignedwiththe organization. Measures andtargets are developedthrough a achieving ourstrategic goalsandtotheoverallsuccess of the The measures includedonthescorecard are integralto Crown sector. measurement systemandisusedthroughout theprovincial monitor performance. Itisawidelyaccepted performance SaskTel usesabalanced scorecard tomeasure and BALANCED SCORECARD BALANCED Performance Indicator Legend Off target (<80%) Slightly off target (<95%) On target (95%–120%) Exceeded target (>120%)

SASKTEL 2019/20 ANNUAL REPORT | 31

result result 2019/20 Result Maintained 2018/19 Maintained 2018/19 result result 2019/20 Target 1% above 2018/19 1% above 2018/19 result result Define and deliver the ideal customer experience Define and deliver the ideal customer business intelligence Understand our customers through KEY INITIATIVES • • 2018/19 Result 1% above 2017/18 Maintained 2017/18 CUSTOMER EXPERIENCE AT EVERY TOUCHPOINT ALONG THEIR JOURNEY WITH SASKTEL. JOURNEY WITH THEIR ALONG TOUCHPOINT EVERY EXPERIENCE AT CUSTOMER DELIVER AN EXCEPTIONAL EXPERIENCE CUSTOMER OUR CUSTOMERS ARE AT THE CENTRE OF EVERYTHING WE DO. WE WILL DELIVER AN EXCEPTIONAL WILL DELIVER AN WE CENTRE OF EVERYTHING THE DO. WE ARE AT OUR CUSTOMERS Customer experience – business Customer experience Customer experience – consumer Customer experience Our customers are evolving and have increasing expectations for the products and services they need. SaskTel is and services they need. SaskTel products the for expectations increasing and have evolving Our customers are our customers how and will serve customers. We in how we interact with our improvement on continuous focused analytics will further our ability intelligence and data it easy to do business with us. Business they want, making where deliver an to do things right the first time and strives service. SaskTel customer personalized and to deliver proactive contact and beyond. initial customer experience from exceptional our pride in knowing what we take customer relationships, a local company with strong As employees of the to provide proud are employees SaskTel Saskatchewan, in communities throughout customers value. Residing to make our neighbours need, helping technology services that entertainment, and information communications, everyone. place for a better Saskatchewan and Innovation customer experience is aligned with the Customer Focus, and Technology Delivering an exceptional Priorities. Sector Strategic Crown Measure Customer Satisfaction Customer experience results for both consumer and business customers in 2019/20 remained equal to the 2018/19 scores, equal to the 2018/19 scores, in 2019/20 remained and business customers both consumer for results Customer experience and business technical consumer of met or surpassed in the areas were Targets 1% improvement. slightly below our targeted wait times in our Customer Contact on opportunities to reduce is focused SaskTel operations. and consumer support, stores, Customer Satisfaction Performance Customer Satisfaction Centre and enhance the online self-serve options we provide. SaskTel is committed to providing our customers with to providing is committed SaskTel the online self-serve options we provide. and enhance Centre experiences. exceptional Our delivery of an exceptional customer experience is measured with a composite score of customer survey results taken at taken customer survey results of score with a composite is measured customer experience an exceptional Our delivery of A 10-point scale is used. separately. reported are touchpoints. Consumer and business customers key Balanced Scorecard 32 | MANAGEMENT’S DISCUSSION AND ANALYSIS • • • • Achievements in2019/20 • • • • • customers topurchase anydevice withnoupfront costs with more choice and device financingoptionsthat allow Launched newunlimitedwireless planstoprovide customers wireless inCanada Lowest customerchurnrate andhighestlifetime revenue for Expanded maxTV Stream to358communities at thecentre of everythingwedo an exceptional customerexperience, placingourcustomers Developed anewcorporate missionstatement: To provide » » » » » » » » lower pricing Introduced internetcontracts, providing customerswith or interest COVID-19 pandemic: Supported ourcustomersandcommunity duringthe offer newfunctionalityandanimproved experience Upgraded maxTV Stream andmaxTV appproducts to and Citytv on demandlibraries,includingHistory, HGTV, FX/FXX, Launched newmaxTV GOappsandsubscriptionvideo Added 28newchannelstomaxTV Stream throughout Saskatchewan

their seasonalproperties additional monthstosupportcustomersunableopen Extended theseasonaldisconnect optionfor uptosix Connecting Families initiative for low-income families currently signeduptotheFederalGovernment’s Provided atwo-monthservice credit toSaskTel customers a 12-monthrepayment plantoprovide relief tocustomers Offered zero-interest billdeferrals for uptosixmonthsand wait times Trained additionalstaff totake customercallsto reduce and employees services, withadditionalstepstaken toprotect customers Stores anddealersremained opentoprovide essential channels tomaxTV service andmaxTV Stream customers Provided complementary newsandentertainment Internet customersandinternetplansremained unlimited Waived data overagecharges for wireless andfusion Nations, education, andgovernmentagencies additional devices for health,protective services, First and otherservice providers toprocure thousandsof Leveraged ourrelationships withequipmentmanufacturers

• • • • » » program, withimprovements to: Continued toimplementourCustomerExperience First for theseventhconsecutive year Internet Service Provider Satisfaction Studies(West Region) Ranked firstinboththe J.D. Power 2019CanadaTVand to improve insights intocustomerneeds Advanced ourbusinessintelligence andanalyticcapabilities new macro towerswere constructed alongmajorhighways small cell sitescompleted in2018/19),andaddition,five the deploymentof smallcell sites(buildingonthe50rural services in53ruralcommunities throughout theprovince with The Wireless Saskatchewan project enhanced LTE cellular » » »

Customer service for theFibre tothePremises In-home Wi-Fiexperience First ContactResolution Self-serve delivery Wireless product satisfaction (FTTP) program maxTV STREAMAVAILABILITY March 31,2020

SASKTEL 2019/20 ANNUAL REPORT | 33

Build fixed and mobile broadband networks broadband and mobile Build fixed accesses broadband Maximize services broadband end-to-end delivery of Improve KEY INITIATIVES • • • LEAD SERVICES THE MARKET IN BROADBAND AND RELIABLE INTERNET AT ANY LOCATION—AT HOME, WORK, AND ON THE GO. HOME, WORK, ANY LOCATION—AT INTERNET AT AND RELIABLE BROADBAND IS ESSENTIAL TO THE LIVES OF OUR CUSTOMERS. WE WILL PROVIDE ACCESS TO FAST TO ACCESS PROVIDE WE WILL LIVES OF OUR CUSTOMERS. THE IS ESSENTIAL TO BROADBAND Broadband is SaskTel’s core service. Fixed and mobile broadband access services have become indispensable to become have access services and mobile broadband service. Fixed core is SaskTel’s Broadband and enjoy online entertainment. friends and family, them to work, learn, connect with our customers, enabling is to our customers and broadband the importance of understands to businesses. SaskTel is critical Performance Our services will work our networks. and speed of reliability, the coverage, capacity, improving on continually focused and networks. devices seamlessly across needs by: expanding broadband customer and future current will satisfy SaskTel is competitive. market The broadband wireless coverage;fixed DSL speeds; expanding mobile and and fibre network; improving our fibre of the reach performance. technologies to improve and applying new performance; in-home Wi-Fi improving Sector Strategic with all six Crown been aligned have services in broadband to lead the market initiatives Our key SectorInvestments; Private Financial Sustainability; Priority Force; Priorities: Customer Focus; Skilled Labour and Innovation. Engagement; and Technology Our performance delivering higher broadband speeds throughout the province is demonstrated by measures capturing by measures is demonstrated the province speeds throughout delivering higher broadband Our performance at least 50 Mbps fixed and broadband, least 10 Mbps fixed to at have access homes and businesses that of the percentage the from will be removed 10 Mbps measure faster speeds and in 2020/21 the to require Customers continue broadband. those customers represents least 300 Mbps will be added, which currently to at access for A new measure scorecard. balanced to fibre. with access The FTTP program has been a priority infrastructure investment. Our FTTP measures have tracked our success in bringing our success have tracked investment. Our FTTP measures has been a priority infrastructure The FTTP program and these original FTTP program The (connects). in the service customers to customers’ homes (passes) and enrolling fibre expanding and we are has been completed this work Much of nine major centres. based on Saskatchewan’s were measures on will no longer be included centres for the nine major communities. FTTP measures network beyond these initial our fibre in 2020/21. scorecard the balanced Balanced Scorecard to network advancements and the FTTP program of by our execution is measured performance service broadband SaskTel’s speeds. to higher broadband and businesses with access homes Saskatchewan provide 34 | MANAGEMENT’S DISCUSSION AND ANALYSIS • • • Achievements in2019/20 through theexpansionandenhancement of ourDSLservice. below ourtarget for theyear. Inadditiontoourfibre program, these coverage improvements were accomplished largely provincial coverage of homes andbusinesseswithaccess toat least10Mbpsfixed broadband from 95.6% to97.3%, slightly broadband downloadspeedsfrom 47.5% to83.1%, exceeding ourtarget byover33percentage points.We increased the In 2019/20, wesignificantlyincreased theprovincial coverage of homesandbusinesseswithaccess to at least50Mbpsfixed Network AdvancementPerformance also successful inconnecting nearly16,000 customerstoourinfiNET service, exceeding thetargeted connections by57%. new neighbourhoods,makingitavailabletoover16,000 more homesandexceeding ourtarget for homespassed. We were We are pleasedwiththeresults of ourFTTPprogram in2019/20. Duringtheyearwecontinued toexpandourfibre service to Execution Performance FTTP occurred inothercommunities are notincluded. * FTTP execution measures onlyreflect results for theoriginalprogram inSaskatchewan’s ninemajor centres. Additionalfibre passesand connectionsthat FTTP Execution FTTP Measure Network Advancements plans withspeedsupto900Mbps fast asdownloadspeeds);and,introduced highbandwidth speeds); launchedfullysymmetricalplans(uploadspeedsas half-symmetrical (uploadspeedshalfasfastdownload Business customers tomeetgrowing bandwidthdemand Continued expandingourfibre networktobusiness 300 Mbps Melfort, Warman, andWhiteCity, enablingspeedsof upto centres andbeyond,includingEmeraldPark,Martensville, Our FTTPinfrastructure buildcontinued inthemajor 300 Mbpsfixed broadband SK homesandbusinesseswithaccess toat least 50 Mbpsfixed broadband SK homesandbusinesseswithaccess toat least 10 Mbpsfixed broadband SK homesandbusinesseswithaccess toat least Number of homesconnected Number of homespassed infiNET improvements: allplansupgradedtobe * New measure for New measure for 2018/19 Result 2019/20 2019/20 19,377 32,988 • • • plans todothesameat CandleLake in2020 of Pasqua Lake and Crooked Lake whilealsoannouncing expanded DSLinternetservices totheresort communities Through theCommunityParticipation Program, SaskTel in-home performance Introduced anewfibre gateway withimproved 50 Mbps communities, providing downloadspeedsupto interNET Extended50waslaunchedin291rural New measure for 2020/21 2019/20 Target 10,156 14,839 50.0% 98.0% 15,972 16,614 83.1% 97.3% 2019/20 Result

SASKTEL 2019/20 ANNUAL REPORT | 35

Rama Sceptre Sheho Sintaluta Spruce Lake Benedict St. Gregor St. Stenen Valley Stewart FN Lake Sturgeon River 156CSucker Sylvania Tantallon Tuxford Veregin Weyakwin Wishart Communities in service 31, 2019 March as of Communities in service 31, 2020 March as of Kuroki Liberty Loreburn Love Macrorie Margo Marquis Meacham Minton FN Muskoday Neuanlage Neudorf Neville Otthon Pangman Plenty Plunkett Prud’homme Beechy Birsay Borden Brabant Lake Bulyea Ceylon River Dene Nation Clearwater Cole Bay Creelman Dubuc Elfros Fosston Frobisher Gainsborough Gladmar Glen Ewen Hazlet Jansen In service as of March 31, 2020 March as of In service SMALL CELL SITES Paddockwood Pennant Prelate Riverhurst Sedley Semans Simpson Spalding Theodore Torquay Marie Val Waldeck Waseca Weldon White Fox Park Zenon Lake Lenore Lake Lang Lintlaw Lucky Lake Macoun Manor Marcelin Marengo Marsden McTaggart Meota Mervin Midale Morse Mortlach Muenster Odessa SMALL SITE CELL LOCATIONS 31, 2019 March as of In service Abernethy Briercrest Brock Carievale Conquest Denzil Drake Earl Grey Ebenezer Fillmore Glenavon Goodsoil Govan Grayson Kennedy Kisbey Laird 36 | MANAGEMENT’S DISCUSSION AND ANALYSIS with us. we willalsoundertake additionalinitiatives aimedat streamlining ourworkandmakingiteasierfor customers todobusiness benefits realized from ourtransformation initiatives. WhileSaskTel will continue toenhance ourcustomerself-serve capabilities, In 2020/21,thesespecificself-servemeasures willbe replaced withamore comprehensive measure, capturingtheincremental made through eChannelinsteadof traditionalmethods;andthenumberof customeraccounts onpaperlesseBILL. two measures in2019/20tomonitoroursuccess innewcustomerself-serveinitiatives: thenumberof transactionscustomers Customer expectations are evolvingandself-serveisquicklybecoming thepreferred channelfor ourcustomers.SaskTel added operating profit (earnings before interest, taxes, depreciation, andamortization expense)asapercentage of revenue. SaskTel usesEBITDA margin tomeasure operational efficiencyand profitability. Itisawidelyusedfinancial ratio thatmeasures Balanced Scorecard REINVIGORATE SASKTEL THROUGH DIGITAL THROUGH REINVIGORATE TRANSFORMATION SASKTEL Private SectorEngagement;andTechnology andInnovation. Sector Strategic Priorities:CustomerFocus;SkilledLabourForce; FinancialSustainability;PriorityInvestments; SaskTel hasaligneditsstrategic goaltoreinvigorate ourcompanythrough digitaltransformation withallsixCrown experience. Thisreinvigoration willmake SaskTel more agileandresponsive totheevolvingneedsof ourcustomers. automation, andcustomerself-serveopportunitieswillfurtherourabilitytoprovide anexceptional customer new digitaltechnologies,developingskillsinouremployees,andsimplifyingprocesses. Businessintelligence, effective ways of doingbusinessandmakingiteasier for ouremployeestoservecustomers. We are adopting Our digitaltransformation placesthecustomerat thecentre of everythingwedo.We are focused onfindingmore customers have more choicesthaneverbefore. Products andservicesare changingrapidlyandnewcompetitorsare emerging from adjacentmarkets. SaskTel’s The worldisbecomingmore digitalandthisisimpactingeveryindustry, creating newchallengesandopportunities. WE WILLUSETECHNOLOGY TO BUILDNEWBUSINESSCAPABILITIES, MAKINGITEASIERFOROURCUSTOMERS TO DOBUSINESSWITHUSANDEASIERFOROUREMPLOYEES TO SERVETHECUSTOMER. • • KEY INITIATIVES Simplify andautomate processes Simplify products andbusinessrules

SASKTEL 2019/20 ANNUAL REPORT | 37

2019/20 Result 2019/20 29.2% 138,747 291,887 29.0% 226,737 347,000 2019/20 Target 2019/20 New measure for 2020/21 for New measure Embraced the use of many Community Cloud applications the use of Embraced ServiceNow, to manage our business, including Salesforce, 365 Office and Microsoft simplifies and expedites a cloud solution that Created used by all mobile devices for updates the distribution of business employees for SaskTel and apply our businessContinued to advance capabilities intelligence Completed a “do it right the first time” initiative of the accuracy to improve the company throughout business processes to time required the reduced that improvements Process plan changes and rate implement promotions and program Established the Enterprise Cybersecurity focus activities with a several key the team executed of disruption or breach a service the risk of on reducing information confidential • • • • • • 27.5% 2019/20 2019/20 2018/19 Result 2018/19 New measure for for New measure for New measure

Customer transactions through eChannel through Customer transactions eBILL on Customer accounts EBITDA margin EBITDA Deployed a team dedicated to cloud computingDeployed a team dedicated to expedite internal business in order orchestration and storage resources compute more for requirements improvement initiatives improvement cloud-basedBegan implementing an automated, efficient employee expense solution expected to be more processes than current and effective to evaluate and guide the implementation of and guide the implementation to evaluate , customer experience an exceptional provide To Developed a new corporate mission statement:Developed a new corporate placing our customers at the centre of everything of the centre placing our customers at we do our eChannel the use of Increased our made to enhance Continued investments were platforms, customer self-serve and e-commerce as well as internal systems and processes Established a Transformation Management Office Established a Transformation Measure Benefits realized from transformation initiatives transformation from realized Benefits Self-serve Transformation Efficiency • • • Achievements in 2019/20 • During the year, SaskTel increased the number of customer accounts on eBILL by nearly 64,000. While this result was below While this result by nearly 64,000. on eBILL customer accounts the number of increased SaskTel During the year, of still in the process paper bills and are no longer receiving to customers who are related the shortfall is largely our target, billing in 2020/21, we will maintain our transitioning customers to paperless As we continue transitioning to the eBILL service. a paper bill. those who prefer and accommodate on customer satisfaction focus • • Self-serve Performance determined that During the year SaskTel in 2019/20. well below target were our eChannel Customer transactions through customer of high levels methods to ensure our traditional service through best directed were transaction types certain the number of in increasing successful we established, we were did not achieve the ambitious target While we satisfaction. on enhancing to focus continues 34%. SaskTel of the 2018/19 level, an increase from eChannel transactions by nearly 35,000 our customers. of them in alignment with the preferences our self-serve capabilities and implementing EBITDA margin is a key measure for our overall operational efficiency. Once again, we have exceeded our 2019/20 target.exceeded again, we have Once efficiency. operational our overall for measure is a key margin EBITDA and business simplification growth, revenue of to be a result continue performance margin in EBITDA Improvements the year. spending throughout and controlled improvements, operational EBITDA Margin Performance EBITDA 38 | MANAGEMENT’S DISCUSSION AND ANALYSIS changing businessneeds. employee confidence that theyhavetheskillstosuccessfully perform theirdutiesinalignment withthe company’s The learningandgrowth measure, employeeperception of skillevolution,usesasubsetof surveyquestionsrelated to Employee engagementisanindicator of employees’dedication andwillingnesstogoabovebeyondintheirwork. SaskTel usesanindependentvendortoconduct andtabulate surveyresults. empowering ahigh-performance workforce. Theresults of thesemeasures are determinedbyourannualemployeesurvey. Measures focused onemployeeengagement,andlearninggrowth are usedaskey indicators of ourprogress on Balanced Scorecard Learning andGrowth Employee Engagement Measure Customer Focus;SkilledLabourForce; andTechnology andInnovation. Our strategic goalof empoweringahigh-performance workforce isalignedwiththeCrown SectorStrategic Priorities: strategic importance. and agilityof ourworkforce isessentialtoourabilitycollaborate effectively andallocate resources toareas of We looktoallemployeesdevelopnewideasandbusinessimprovements. Continuingtoenhancetheadaptability recruitment iscrucialtoremaining highlycompetitiveandsatisfying ourcustomers’evolvingneeds. of employees.We are committedtocontinual learning.Acquiringnewskillsandknowledgethrough trainingand Our industryischangingrapidly. Itiscriticaltoourfuture successtohave anenabled,engaged,andempowered team At SaskTel, wehave aculture that isproud, accountable, innovative, andcentred onourcustomers. Employee perception of skillevolution Employee engagementscore TOGETHER, OUR SKILLED WORKFORCE IS COMMITTED TOTOGETHER, TRANSFORMINGSASKTELFORTHEFUTURE OURSKILLEDWORKFORCE ISCOMMITTED EMPOWER HIGH-PERFORMANCE A WORKFORCE AND ENSURINGWEDELIVERTO OURCUSTOMERS’ EXPECTATIONS. points below2017/18 points below2017/18 Four percentage Five percentage 2018/19 Result result result One percentage One percentage 2019/20 Target 2018/19 result 2018/19 result • • • • KEY INITIATIVES point above point above Lead SaskTel through transformation Invest inskillsetsfor thefuture Strategic resource allocation Living ourculture points belowtarget point belowtarget Eight percentage One percentage 2019/20 Result

SASKTEL 2019/20 ANNUAL REPORT | 39 Enhanced the product knowledge learning content knowledge the product Enhanced our through business sales staff available to our front-line University program SaskTel Reward and Launched our Connections Recognition awards, employee recognition, which combines program, into one platform milestones and service with SaskTel, agreements Established new collective employees and Directwest SecurTek, • • • Canada’s Top 100 Employers (2020) 100 Employers Canada’s Top Employers (2020) Top Saskatchewan’s (2020) People Young Employers for Canada’s Top Canada’s Best Diversity Employers (2020) Employers (2019) Canada’s Greenest

Recognized by Mediacorp Canada Inc. as one of: Canada by Mediacorp Recognized » » » » » on efficiency. focus a company-wide Continued to foster opportunities the year we identified additional Throughout serve our customers and better processes to streamline Achievements in 2019/20 Achievements in • • Learning and Growth Performance Learning and Growth level, slightly below the 1% improvement the 2018/19 unchanged from remained evolution results skill of Employee perception It is important at SaskTel. of employee engagement of the top drivers as one growth identified professional have We target. Action plans have to transform. continues as our business they need confidence employees have the skills, training, and that training new and enhanced identifying, developing, and implementing is to the survey and SaskTel been developed in response employees. opportunities for Employee Engagement Performance Employee in survey scores disruption impacted While the labour the 2019/20 target. below fell engagement score The employee The survey for SaskTel. feedback constructive provide identified by employees and opportunities responses the some areas, top to SaskTel’s on enhancements focus with a particular have been developed, and action plans analyzed have been results engagement drivers. SaskTel conducted its annual employee survey in the fourth quarter. We appreciate the high response rate and feedback our and feedback rate response the high appreciate We quarter. the fourth survey in employee its annual conducted SaskTel survey. in the participation their through offered employees 40 | MANAGEMENT’S DISCUSSION AND ANALYSIS capital expenditures (excluding spectrum)dividedbyoperating revenue. intensity measure indicates howeffectively weare utilizingourcapitalinvestmentstogenerate revenue. Itiscalculated as Building andmaintainingcompetitive networkinfrastructure inourindustryrequires significantcapitalinvestment.The capital important services for thepeopleof Saskatchewan. Net income istheprimarymeasure of ourprofitability. Ournetincome allowsusto return cashtoourshareholder, funding overall measure. revenue. Individualcomponents willnolongerbemeasured separately astheyare effectively captured bythe broadband, ourcore service, andrevenue from thebusinessmarket. In2020/21ourbalanced scorecard willfocus ontotal Our revenue generation measures provide aviewof our totalrevenue aswelltwokey components: revenue from commonly usedfinancialratios, allowing comparison toother companies andindustrystandards. of howeffectively weare usingourequitytogenerate profits. Debt ratio isanindicator ofourcapitalstructure. Both are shareholder’s expectations togenerate afinancial return withinaprescribed capitalstructure. ROEprovides anindication Shareholder valueiscaptured bythereturn onequity(ROE)anddebtratio measures. Theytrackhowweare meetingour enhancing ourlong-termfinancialstability. our capitalinvestments.Thesemeasures provide importantinsightintoourcurrent financialperformance andoverallprogress Our financialmeasures are focused oncreating shareholder value,generating revenue andearnings,effectively leveraging Balanced Scorecard Sustainability; PriorityInvestments;Private SectorEngagement;CustomerFocus;andTechnology andInnovation. Maximizing ourlong-termfinancialsustainabilityisalignedwiththeCrown Sector Strategic Priorities:Financial workforce worktogethertoensure wepositionSaskTel for long-termsuccessandfinancialsustainability. Our focus oncustomers,digitaltransformation improvements, effective investment prioritization, andskilled business processes willcontributetoacompetitivecoststructure, freeing upresources for strategic growth areas. We are focused ondevelopingnewproducts andservicesthat willgenerate revenue intothefuture. Improving our operations. Regulatory changesandeconomicconditionspresent furtherchallenges. competition isincreasing. There isaneedtomake significantcapitalinvestmentstoenhancenetworks andtransform Customer needsare evolving.Legacyrevenue sources are indecline.Barrierstomarket entryare fallingand A numberof challengesare placingpressure onfinancial results inourindustry. Technologies are changingrapidly. WE WILLFINDCREATIVE SOLUTIONS TO POSITIONSASKTELFORFINANCIALSUCCESS, SECURING OURABILITY TO SERVECUSTOMERS THROUGHOUT THEPROVINCE OFSASKATCHEWAN FORMANYYEARSTO COME. MAXIMIZE LONG-TERMMAXIMIZE FINANCIAL SUSTAINABILITY • • KEY INITIATIVES Grow revenue andgross margin Create acompetitivecoststructure

SASKTEL 2019/20 ANNUAL REPORT | 41

2019/20 Result 2019/20 10.2% 47.8% 19.5% $596.4M $336.2M $119.8M $1,283.7M 11.1% 49.0% 24.2% $635.4M $344.0M $129.5M $1,324.3M 2019/20 Target 2019/20 Implemented Customer Contact Centre operational Implemented Customer Contact Centre and the customer experience changes to improve costs reduce reviews, Conducted several departmental organizational effectiveness, improved changes that in structure resulting costs and reduced customer experience, enhanced capital budgeting, ensuring Implemented zero-based planned spending and strategic of review a rigorous capital of prioritization no activities by customer service on core Focused stores bill payment transactions for in-store longer processing utilities and other Crown SaskTel and Saskatoon in Regina service Launched VoLTE • • • • • 11.0% 46.6% 21.0% 2019/20 $322.1M $127.4M $1,277.9M 2018/19 Result 2018/19 New measure for for New measure Debt ratio revenue Total ROE revenue Broadband revenue market business Telco Net income Capital intensity Increased out-of-province business sales resources and business sales resources out-of-province Increased to develop partnership opportunities inside andcontinued revenue to increase Saskatchewan outside of plan suite, and rate our unlimited wireless Enhanced add-on packages and prepaid launched Speed Restore roaming international over Virtual Internet and IP Trunking Launched Dedicated LAN Service Private on efficiency. focus company-wide Continued to foster we identified additional opportunities the year, Throughout and better serve our customers processes to streamline Measure Revenue Shareholder Value Shareholder Net Income Capital Investment • • • • Achievements in 2019/20 Capital Investment Performance spending within capital again due to prudent management of is once This result Capital intensity came in lower than targeted. our overall capital program. Net Income Performance the COVID-19 to the impact of million related $10.7 an impairment loss of of as a result expectations is below Net income the impairment excluding cash flows. Net income future and the related revenue services pandemic on declining marketing million and a total expense $5.8 of growth revenue year over year through million. This increased loss would have been $130.4 $4.2 of expense net finance million and increased of $1.8 other income by decreased million, partially offset $3.3 of reduction million. Revenue is below the target due to competitive wireless pricing, changing consumer behaviour, and increasing competition. and increasing behaviour, consumer pricing, changing wireless due to competitive is below the target Revenue services. legacy wireline declines from revenue opportunities to offset impacting SaskTel’s These factors are Revenue Performance Shareholder Value Performance Value Shareholder fiscal 2019/20 quarter of an impairment loss in the fourth of 11.1%, due to the recognition of ROE is below the target SaskTel’s debt 11.1%. SaskTel’s at ROE would have been on target the impairment loss, Excluding impact on net income. and its resulting 49.0%. of is below the target ratio 42 | MANAGEMENT’S DISCUSSION AND ANALYSIS Capital intensity Capital Net Income Telco businessmarket revenue Broadband revenue Total revenue Revenue Debt ratio ROE Shareholder Value Employee perception of skillevolution Learning andGrowth Employee engagementscore Employee Engagement 2020/21) for (new initiatives transformation from realized Benefits Transformation eBILL on accounts Customer eChannel Customer transactions through Self-serve EBITDA margin Efficiency (new for 2020/21) At least300Mbpsfixed broadband At least50Mbpsfixed broadband At least10Mbpsfixed broadband access to: SK homesandbusinesseswith Network Advancements Number of homesconnected Number of homespassed Execution FTTP Customer experience–business Customer experience–consumer Customer Satisfaction Measures RATIONALE FOR THE SELECTION OF BALANCED SCORECARD PERFORMANCE MEASURES

healthy netincome. being utilized togenerate revenue. Effectivea management of capitalintensitywillcontributeto competitive. Capitalintensityisused tomeasure howeffectively SaskTel’s capitalinvestmentsare SaskTel operates inanindustrywhere significantcapitalinvestmentsare necessaryto remain Province’s financialstatements. SaskTel’s net incomecontributestoSaskatchewan’s financialhealthasitisconsolidated intothe Net Incomeistheprimarymeasure of acompetitivecompany’sprofitability andfinancialhealth. the market isastrategic goal.Business revenue isanimportantgrowth market for SaskTel. measures for twokey componentsare alsoincluded.Broadband isourcore serviceandleading revenue isacommonfinancialmeasure that canbecompared toothercompanies.Revenue Revenue measures are importantindicators of ourgrowth andfinancialsustainability. Total ratios, allowingcomparisontoothercompanies. within aprescribed capitalstructure (debtratio). ROEanddebtratio are widely usedfinancial evaluate ourperformance generating thefinancial return (ROE)expected byourshareholder shareholder, theGovernmentandpeopleof Saskatchewan. We usethesetwomeasures to As aprovincial Crown corporation, SaskTel hasaresponsibility toprovide valuetoour our employees’confidence that theyhave theskillsnecessarytoperform successfully. requirement for empoweringahigh-performance workforce. We usethismeasure tomonitor learning andgrowth. Skillevolutionisakey componentof employeeenablementanda Our industryisexperiencingrapidtechnologychange,elevating theimportanceof employee experiences andimproved overallcorporate performance. organization andtheirrole withinit.Anengagedteamof employeesleadstobettercustomer employee engagementasanindicator of employees’connectionanddedication tothe Empowering ahigh-performance workforce isakey strategic goalfor SaskTel. We measure balanced scorecard in2020/21. generate newrevenue and/orimprove ouroperational efficiency. Itwillbeincludedonthe new measure willcapture theincremental benefits resulting from transformation initiatives that Reinvigorating SaskTel through digitaltransformation isoneof ourkey strategic goals.This companies around theworldare implementingandimproving. service providers. Thisisdrivingincreased demandfor customerself-serve capabilities,which Customer behaviours are evolvingandtheyexpectmore flexibilityandoptionstointeractwith financial ratio that canbecompared toindustrystandards. implemented, theresults willbereflected bythismeasure. EBITDA margin isacommonlyused improvements tooperating efficiencyand profitability. Asourtransformationare initiatives Digital transformation isakey strategy for SaskTel. EBITDA margin isusedtomonitorour Saskatchewan’s Growth Plan: with theexpansionof ourfibre opticnetworkinfrastructure intheprovince, whichisincludedin Access toat least300Mbpsisreflective of customers’growing speed requirements. Itisaligned of 2021. A downloadspeedof 50MbpsistheCRTC target speedfor 90%of Canadiansbytheend to deliveringhigherbroadband speedstocustomersthroughout Saskatchewan. Leading themarket inbroadband servicesisoneof ourkey strategic goals. SaskTel iscommitted is importanttoensuringSaskTel leadsthemarket inbroadband services. bringing fibre tocustomers’homes(passes)andenrolling customersintheservice(connects) customers’ current andfuture needsfor bandwidthandspeed.Measuringoursuccessin SaskTel’s program isahigh-priorityinfrastructure investmentandcriticaltosatisfying FTTP Delivering highlevelsof satisfaction toallourcustomersiscriticalsuccess. SaskTel. Ourindustryishighlycompetitiveandcustomershave more choicesthanever. Delivering anexceptional customerexperienceat alltouchpointsisakey strategic goalfor Rationale The NextDecadeof Growth 2020–2030.

SASKTEL 2 018/19 AN NUAL R EPORT | 37 e s h SASKTEL 2019/20 ANNUAL REPORT | 43 g d v t l k s . e n e s a o s o i i i v e r t n i r

r s e s b r i t

k e a

l p e i s e n u t r s t e w i t t d c e i t h e s e r u s m e t

a e e n g n

i u i

n e t ,

e

p i r f u e o k p a a e v s

v

n r c

s m h e o o b h ,

n s g g e e t .

t a a o t o i m u t r

e l r

a a

n x w

f h l n d p

r sse i s b l e o t p m d

e e o

e o n o e

u a l d as c m g l i t

t m t

e

r r

c r m v a t n i l p m h r i

e

n

i a n d

a u e o , a e o

i l c f the r

u l r t ase t l o t t s e g e l

b m h

d e c e o s p o a r

b

c r

e c

u t

r i d ss n o T , , y r

o o ial s a s k

c s m s a d d u e e c d t sse s

e e

s

c e d l p e r n i c r e n n e l c - d a i d a

c . d n e a u c i

a o n o

i c s a t ine i o S n

n g l

a e

e 0 SASl KTEL 2 018/19 AN NUAL R EPORT | 37

g t r y u u day o a a c

o e n e n ast 2 f p n i

e r e i a u m

f

m ommittee o b o p t r g t fi h n r

s has . r

g

g a p t e e

e t l

s e n h a

g e u n d l a m i

y e v t o l e e k e l , c h s i n r d

. e g e t e

n e s i t

t s a e o s o t i b e s s d i i v f ommittee v

e s u r t

T a n i n n n r l

e r sse s e d s b r a s r n n i T f m h t a i t

k e a

l k p n

e

i s o r d e t

a n u t k r p s m s e t d o e m w o i e t t i

d n c e i c t s e t

o h w

e

a

e f

s e r s u s m e s t

g r a e t v e

n g c n

s

t i e u s a i

a n e n e t its ,

e

p n n i o r l f e u

l e o k p j a w t a s a s ies o e e v

c i s n

v e

e c n r c

s r

o m S h e i i t o b o t h

o , y

s a s

n s g g n e S p o e

t .

y r t a o a o i u t c c r

t o , i m u n t r a

. e s l n r

a a f r t i t y r n x n w

e k f h l n d , e

p o

r sse s s i i s b g l e o i c a p c

t y p s m d

e e s n e t e o , a

e k o s o n o s o e ecutive C r

p u a l d as c m g n t l ORKFORCE n

g i t a n

i d f n

t t m t

e u

r e r

i c r m i v a t n c

i l z i e g p t m h e t r o g e l i e

line of defense r e n line of defense

k i i u . line of defense a n e s d

a i r u e o , a e o

i s e o l c

o r n f the r Internal Audit Business units u

l l s l r

r t ase t W l c

o t t c i st t rd c n s c n nd n isk e g e l TING ENVIRONMENT p

b s

m i h

d e e i c e i o i s t p o o u a r h

e e b

a c l 1 y r 3 r

p a

2 l e e c a

u t

e r l i d ss n f n o l T , , t y i

m v g o c r

f l i agi o o c ial s g c a b e

s k t and

c s

m s t a d

d u e e l c d

t r b

k sse s

e

e

u

l .

c ,

s

c itie m e k e d l p n

a e r wo n j m r i c m r e n i n l n e n s n R a e l c t o - d e a

i d s a

i c . d n s e a n r u S r u c

d i n

a n o n e t d o

a i c a s o i a t n

Board, Executive Committee Board, Executive g ine i o e . s S o n

u e n g l

a a i e

h e 0 l b Risk and compliance functions Risk and compliance functions

Board, Ex d p

i

g t r t y a

e u r o u e l day o r r a o a c

o K e o e n e n h

t ast 2 f e

p n o a n i

i

e r c e s r i r a f u m r m t

and

f

w n r r m ommittee o b w i o t i p d t r g t fi

h e t n s r e

s

has s r i . OPERA

r

g

g a c S p t t w

e p a f Directors, Audit & Risk C f Directors, Audit n

c s e t l

e n n a u a

e e i u l n

l u a s m i a

y e I

T

o e e u e a i v l k , n c h i n a r s d p

h d

e d g t e

e e s i t

t r e

t b e s

s k d c a v f t q ommittee

s s u e P d

T t e a a s n n n n t x l OPERATING ENVIRONMENT OPERATING q e n sse e d N i a s e r n n

R i T f m h t e t a i

i t n s k

n

g o r d

e d t

m

a k p m v s r s a e d

r o m

n o e i

e y n c t e s e . e

e o w s

r

a e e

s e e f r

adma a c a i s s r g GOVERNANCE

r t

v

w c

n s r t e s a n i a e r n e its a e oard of Directors, Audit and Risk Committee of the of and Risk Committee Audit Directors, oard of d t n n d o l e

l i e j a w

t k s r

s ve ca ies C o i e

n c i n e e c p i S e g g

o r

o o S i i i t o t 0 g m

o t B y

a s a a

s I , g n S p o

k c y r s r o e i r u c c f r

t t , n r c n s a e e

. s Board o n h t i f r t i t y r n 1 n n e k , e r

e

o s , s i

y p r g i i c n a p c n

r s t e i i e y s the r c e n s a n e o t t , o a

i k o s o s ecutive C r p

1 r r n c t ORKFORCE n s G

g t a n d i

r

i f n

t u e

e i i t a h s c a

e z i o e g t i t l n m e t o g e l l S e line of defense r line of defense u k i r u . line of defense e s o i r

e a s s e t o g

a o w w r a n f r Internal Audit Business units l o s l r

E W y c

c i l st t a s rd i c n c i n nd n isk

TING ENVIRONMENT p a a s

h i a e u r i i s o i t o u h e K e a l 1 y p r 3 s k r - n c p a 2 l e a t e h e r c l o o n f m l t t i

t t i m d v g o c

f u T h l i agi c ities g sid r r c l l b n e o

t and

n q

t t

l

r b

k w l v

e u l l

l l d . c l , s itie m e k t n

S a n y wo j m e r i d m n i

l e n s s n n R a d T t o e A

n s l i r

o o

e s o n o r S f r u

d n n e t d a

a e p a o i s n o

i o o g s e . u s i o u e i f a i n k h r b Risk and compliance functions a

b Board, Ex d o p .

i t a

n a y a

e r o e f f l t r r e o o t K o e

h

t T e

i o a R n r RIS i c s r r u f s Hav Competi a k m r t t t d c o w and

w n s d r r w i a t i d i

e t i s e

i s i r i OPERA

k c S s t w

h p a f Directors, Audit & Risk C y n c r s c h n n a u l e i l

u s w a r I

T Y

n u a i v k e e n T a t v e e n

s d p

h i d t p s e e Competitive capabilities restricted by policies, processes, by policies, processes, Competitive capabilities restricted and systems T r k

g

i a i

r l k e e e c a t q s e P d o

t e e a s n t x i q n e N i e

R i e t adit E r

i n t n s e h h e

n a s S g a b

e d m

v s r a

r

n e y u i e . e h r h h e o s r e e C s e r

d n adma a c a i r

w n r n i r e t b f T a i m t t e S r n c r Addi D T o W K I t i w m A a e d t d i e STRATEGIC RISKS STRATEGIC

k r

ve ca C i n p i S e g g

o o i o 0 g m t a a

I , g

k c s r e r f t n r c s e e

Board o h t i KEY RISKS business and core strategic the key risks are The following and Additional risks facing SaskTel. risks and uncertainties are to be lower risk or risks that deemed uncertainties on the effect unknown may also have a material currently be considered business. Any discussion about risks should Forward-looking Regarding with “Caution in conjunction on page 24. Information” 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 With over 110 years in business and the need to manage both operating has a complex SaskTel traditional and new services, and business with multiple systems, processes, environment quickly to challenges in responding rules. This creates changes. market the to transform in place maps and projects has road SaskTel including simplifying and automating environment, operating customer experience. the business to improve 1 n n r e

,

y p r i n n r s t e i i e the r c n a o t o i

1 r r c s G

t

r

i

e t a h s a

e o t i l n m l S u r o

e a s t g a w w a f r o E y

l a s i i

a a h a u r s o K p s k r - n c e t h r c o o m t t t i d

u T h ities sid r r l l n o

n q t w l v e l l l d l s , t

S n y e i d

s n d T A n l r

o o

e o o f a

e p s o i o o s u s i i d f n k r a b o . n a y a

f f t e o s t

T i R r RIS u s Hav Competi a k t t d c w o

s d a s i

i i i n k n s

h ) o y r c h n l w r Y n u e e T t n e e v

i t p s l t T k g

i a i r l e e e e k o

e a i

o adit E r n e h h e n a s S a b

e i o i u M h h h r o t C s s e d n o d e & i

e t t f m b T a i t m I D A i W w K T r Addi o n S r t t c e t i i i g t h d r r t

t e r c h R , t o a t v t

d i a a n t s a r n g g E n r i k e

e i r e o ( n n V g e t a s e u

r w s n o

p v i h g i , l o t

a i . f o r lia a p t r n s d stan p t

t g

r a p c s i

a y

i m n s r e n n p ) o h a y t l c t u y C a a u e l t n e i v O t k i d a f v

e e o e t

l

e

i

i o a M M t i e s s T e o d i e & c i a

e h t o , t i E

l i m t d k n m i g r t h d r g d r o t

t k e r c h R t i , r t i t o

a t v t

e

b m s d i a a n t s l a a h r n u s n o a g i g E n r i i n k e

e e b i m r e p o n

i ( n x N n e V g e e i t r a s D e u

s r

w e s c n o

p v r i h g i A n l o u s

t

a i . g f C o r lia e p a E p t s r

n

stan p t d

t g

r g a T p c f i

a n

a y o l E

s a i i m n r e p e h a y a t l c t y C o a k a u e t n d n i i v O t i a d f v e e o e

t

v a d o l ide . o e o t

d

i a m M i e T t i c s a h o , t

E

l m t d k n m

i r r g d s o n m k o t i s n r t i

, n ’ n

o e b p d o d m e n s l r

a l a h M n u s o a i l i n i d e b m r p r a n

i p t x N s e p s e i r D d s a

e c a r k r

e A n

g S u s

o v o g C e r p e

E s

d e s .

g p T f

i p

a n o l E

s a e i r , s s e , e a y a a . t

o k t T d n i i r a o r t o

t v o a d o ide . t o e o e t

d a m t k Ma s t r

s

s k u

r d i w r s t n m o o s

n r n

, n ’ n o p d p

o d e n l r c n

a r M r ied l n k I i

d s r r a GE p t

i s e p s n i l d a p c a o r

k e

e

g S B o v o r e e

e

a e s .

l p o

i p a s e e

r , s s v e , a y e a . t

a T i ss Ris p e r o o r t i t d o t t e a x k A Ma h s i s r p t s

s e k

u c r d w i S o t r o

t r n i ’ p

h c n r , t t r ied e i n

k I

Man p r s a GE l

i e n r i l x p c o

Ris e e t

B b e e c a B

l o a s e

t v

k e e c c w a

d e ss n Ris p and e o i

e d t e N x D A h s i e s p t e f

n i y c i S n o r

t i - e ’ h a m

, t t e

i i

Man p r i k c a

l n T j c r x n o Ris e e f i t s

b c B f

t r

k e o c e i c i w

e s d e n and r

t k e e e N D e e f n i y A n n a

u

- b e n l is a a m r

h t Ris

i i k c

r s n T j e c s m n o e f i s o

s f o f

u s

p r t o e i i l i e s r a

t k , e

k e e

A n a u

u b u n o l

p is a

r a h t Ris n r s n r e a s m o

s f o u r s

p

t s l e i b

k n f a

, r

k e

o n u u o d

p

e a w p n n r a e

M r

S

e s e b

e k n p f r s r s s r o n r d e w p g n e o o e

M e

o

i S f i e e p

s r s s c r r e r g o n e o o e ss

f h o

i f i t o

t c r e r e r o e a d ss f h t o

t y r e n r e a d

o e t a y n

o e e t n a I

i c e w n I i i c e e w i T e e e T t v

e

t v

n

n e e p p K K t t Report o Report o m b m t b

t

d s a v d d s a v r d e s

. d n r e y i c e s

n . E o d n e y i c a l n

a i n E l B

o t a f

a l S e n a i y e l B

r d

t f a e f e

S o e s y o e e e t g j r I f p d

m v l f G e i e h e a o s o s

o e

e e

t g ’ l o h j

I f T p t

u m v l G i e h n a a b l o s p ,

o

t h e

s k n .

. e d ’ l o h r

a T m t p t R mit

u e r b i s t n a E e b l u l f

p ,

s o s s T

t i h a

s h k n

. l . e d v t n n m o

p n r

s e a miti T m p t R , mit

e r S e b t i k i a i . i s t m d E

;

e l u f l

k

s e r e s s T e

e

c t i , E a p o h s n g

E

h S

i h n

k l

i v i t n n e m o

p s n n r

o

s v e miti T s ,

l n h l S t a e t i k i r a i r g r . n l d i m d

t ;

d

n

u S t d a a m

i l p k

e e r e e i e e c t

, E

p C o h a s l n g

u o I E

a

E S A n

i e h n

u n S y k

n s

i e i e n s s n r w

o d i

v s s

n l n s h l t a

. o i r s t e r g i r a o e s n A A l e C w g d i t n d

n

u e S t r d R a

a r s s h m

i e p als e e i e k , t n c l h

. e

C c a t e a a r l

l r e u o

k k I h a

E i A h t n l e

u n S y n o s c

e c a e i e n e FRAMEWORK P t s w n t Risk

n n d i s s

u i c s

o n sses i o o s

i i

P

. s o m i g s t e o i w e n r a o s a t e s a t A A r r e

C

w g s p n

n w e

e r e t t i

r e r m R d

r

MANAGEMENT r R a s s h

e

, als t r o e c k , e t a n u e c c l r h . e NSIBILITI i c a n c t e p i e n e d a r e e e s s n n i m l r e

s k k f i h i

l a h t t l RNAN E p

h n b d

o c s s , c

a n e g i a g e e g g n s P o t s g n t t Risk r n

n ) r s s o O u i x c

m o E n o sses y i

o o

i i

e e

a e a P e ENTERPRISE RISK t s I c t u m y T e o g e e o w e o n r P i s e is a t a r r t t

r r C

c

t V s r i p n

c c w

M , e

n i r s e t t i

v e r m m b p d

r R m a S l d a e e

, d a

R e n k k t k r o l c a ana ana s r o o e s a r l N u e c r O o r NSIBILITI o i n c E p i e n e d l u e e r r e h o v s s s s s n n t i n m e t s f i i i i e o o

l G a A t RNAN E p

h n b d

f p r E m r m a A R p G G and T C E A s ( S t r s m r p s s ,

n g a g g g n s o s g t r

) r o O x

m o E n y

e e a e a e t I c t u y T e o e e o P i e is r r t

C c t V r i c c

M , n i s v m b p m S l d a e e d a

R e n k k k l a ana ana s r o o s r l N O o r o E l u r r h o v s s s t n 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, GOVERNANCE Audit Directors, of Board by SaskTel’s is provided Governance Committee. and Executive the Board, and Risk Committee of assessing risks serves as a tool for risk matrix An approved risk appetite. against SaskTel’s 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, is used to manage risk The process SaskTel. management at below. depicted in the framework ENTERPRISE RISK MANAGEMENT RISK ENTERPRISE may risk that and to uncertainty subject are All businesses to achieve strategic on their ability effect have a material risk manages SaskTel business objectives. goals and risk tolerance priorities and to business in relation exposures (GRC) Risk and Compliance its Governance, through aligning strategic approach an enterprise wide framework, risk management (ERM), operations,planning, enterprise framework is within the ERM process and internal audit. The risks. to key respond applied to identify and e t i i i e o o G A f r m T m p R A G G C and r A s E t ( r p E S a p s r m y e h s o e s e c u s e i t r s k l t

n r n h u e u a a

a l

e e t s e r

c o h . . l w s v a

v t a a t s i e c s i a

m e l u g i a e h — o n s a p

t r

o a w

o s R , n c s n i s e e

t l f

t o i

t i t s m p l . k t

e , n

n s s l

n

i l e e n o r o s t i a s t m r c a

i a t n i a T r a u e o o n

e o

d s

a a p k t r r eds ilit n l l T t r c

r

l n s w o

k fi i e t e o w b e tio a t f is e n bus t t s e s

i t an t

p a d o f a e k h as h u s .

z h Sa th in vel t

n l lev S s n r o c Deb l c

apa

rtan

e s in n do t e and w . t a a d o y in t ess c

. v i a r o f o y a sta e men b

o bot i

e c y r

k a

l r y t its gani t her t h l e h e h n and s c y r i le s al d t

n ve o ines . n n r l g e s

G g ili l a e and b r th u i c e u o t

ue

, a imp s o e d i o t .

a r l e i s l n k b s S l

t

l s t , h

l t h and

w

r dus n v

r a g r n a t e n t s e c i cia idth h d u u e u a b l a tability

ti-m e a v t r r i o

n v s d

o a o l n rson l o

e i

f-se u i i e e n t d s e

fi i r o h

y’s c l s h w t a

o e h r r . h o j . n e p t e l u t w s a t v y a d g w

n s f v t

i a o v a t s e n i e

d e

i e e

r a c a o r s i t p r a n

i

s o t e m m a o t o e

a v u l m m p h g i e n h a z e

e i h t — o w

a r r n i s t i r a p p fi

s i t t r e o l

r o

p d t

a r

o

a h w

o t n s n e d R p h , n c y s t t c n u n i s e e

m u h s e o

t g e t

l f e

t t o i

n t b ’ i ’s s n l

t e t a h s n o

m c p b r s l a . k

i m d

t e , n

n d

b d

o . n a

t s s

l n

i n l e e a n n u

a d o r

o e

s a n m t i a e g s o s n o t e c m r e s r o c a m d

o i a i m f a t n r t s n i c a o T

r n l a o u e p e e n t o o t n

i i o h

i k v c

e o e

i

d t

e s

o a i

s e a t t p

t k s i r t o r v r a eds s o ilit n u

l f l w o T t t

o i r i i t r c

o z

r

s i i n

l m I n a a e

t e i m s t w n y adb o

t t k o t e m

s

N fi i e i t e o e g

g w e b r e r tio t

a u . z e l y t f is r o a

a e h i

n bus t i o t ain i

s e u e e r l h d t s l s h n

d t h i y m e t an i t l c

p i r a i t a i m d p t

d h t t O

n t

o d p e c e u f d r e a e

g k h i t h as h u s r c b u . o I m t t

z h n i g o Sa a c s r T th in

e s d k vel t

n e e l lev c v m i n l o S e a a s q e n k r o o Deb c r l m sib c a c u a l n g

T l v o apa b n

r f e w i rtan

a r e n k e s i s in i t u n do r t e o f e n a

l and n e l r w o .

a t a I o d e o a r l

o s y in t s p a ess a c

e

f s

c r . o C a v n s i d a r r o e . f c u o o

y

s n c e l

a a h n m sta - e men . m b S

o bot h b i

e l m

n r c s y t n e s r o n

e

s E k i d T

a p

l s S h ’ e r e y its t gani o h c

r t r her t l h l t e d

t v a e l h k o a n k s

c m o and e

s v c e i y r i L i c w le c i al d t

, c i n s ada r u ve o e s o ines . e n n n t n n l h h o e t r r n l g t

G g o ili b

t n t f e l y a and b t t r o i th E u i r a T m n r p e n

o a t

a

a ue e t p g r

,

t a r imp o o c l d

c g k u t o i .

M

r a l e i t l n S o r b s e e S a

f u l

t

n S

s t b u

r , h a

o

l e

s a h g and n t

. s u n

h g t w o

k r dus m v t

r a i e b d o a i g n a g t e d

r t C a s o e c t i cia c p idth r f

d u o r e t a g b u l c tability

n t i

a e d e ti-m E s h c v t a t r r o i i addi n o

n v S s a d o t i p o t l e n rson as

d o o s

s t o i i u o R n d

f-se e i u i

i e n

h d n

i fi i t

i m o l t

g g h y’s o l s c h o w a s r t a

R e t a b r e l s h r . n h j o b i n y n e p t e r u s a t t

t a w

a t

i m r y d d g i o w n n

o n s s f m c r

ecard w

i l r i o o a

v e e n f

n r e s

d d e

i

e

b

t r a

g

a o h r t n r U t

t a n p c t a y r

o , n

e o l

i a t s s o e t m e s s n

a o t n t o

a

) iso v o m r a m i n m n c p i h

n a e n h t n i i z e e h

n i T S t w

a r i r i r v t

i a t r i

r l p a

fi

s s i u r t i i t r i e o a e i a c l

r k w a

a r o e

o

ads

t p d c

a s o

a

s

t h f s r t r n n

e d p s A h m d c s y e t c t c b h e t c u u d n e m r s m u n h s e o

t g e i c n

i e e p t l o y n p n b u a ’ o e ’s d n s n l

s h n n a l

e t g h a a h E n n o

c

a b i r e i

s o a s

i m i d , t d s o i

d S b r d e main

l o t . n a e d a

a t e n i

h a

c n m a

e n e t u

a p r d a idl r t

h s e

n a n

t n m , t a n e g e o g g r s e i r n e o n i l

e h c e

M s r r o m d o o r e n i m a

o

f e a r o p t s a n n t c a o n

i a

flex n

l o n e o fi p e p u n a t r i t t

g m i i e o h i k u v l

s c i

c w is

c a i k e r i o p t

e l o r s p s i o

e s t e t

i

o t

t a

t

s i r n o E v a r n s o v i t n m s

u i e

s

r f

w o w t i t i p

o ’ i r

r a i i

a s

t

a u o t z r n d n s i

i n

a

l i r m I T r o a a a e i

m t e i m n t e m n y adb y o i t s y e e t a C i e t o a t e i m

s

N h s e k i e g

u g n e a e r t r h e r

S d t

r

is u . r z e t l c y a r o b o t s c r a

s c a h

h

i t

t

i a h o i ain v i

i

e u e r l h m d T t f t o n l s h n d o m i

t N h y e m n s o a . e a s c a i n l c m s

r i a a i t e v l i i

i g m

d

ise i

p t

d n . h a t t t O

n i o

o t

p l d d p e c e p S u d u d r

e capital- v g

s e h l

g

A e h v i t m y

s e r c b u o r s u I m n m

t t n m t h n i n t g s e i m o i c a e s t r T

m

s e d n e k e o e i d

e

e b e z o m a a r i c l v m o i n l e o x

a

a i

r e a o

i a q e a y k o r h o r

s m sib e s a ’ c u e a m l n

M t g

T

r l v o b r n d c fi r w o r r e f p w i s

c p o a d s r w e h ind c k n s i s T i P t u y r t o

e (

f e n t a

n e m e

l i m t n .

t e l

r o i

e I n o e o R l P a i o r l

m s

e

t s r e s . e s

n n p c a n o a

e

e e t f s i n

c t r r e k i e o C a a l n s a n d d r l e e . a a c

c u e u h o d o h e

r

r s n c o e l

e a h n m -

v . h m t S e c

ns i t n h O h r w p c b l m n

o n u y a p r r s t e n t c d c m e i e s o n

t e s E o i d m h

T

p

s r

e S h ’ e e t d n t t es and o e

u a y o F o m h t v c

i r o r e w i e e i l n t t d es

t v a e l k e o e m a l r e

k a s

c l s i m m i o a e

n e t r c v e w i b r s v o L i c w i

c

i i o

g , o c i m R asis

s ada r - d e u t k o h e p e s o h h o m n a e n n t r n c l h h o r C e t r d u n

s

v t o t o t t a n g b t

t

o n t f s m e oss ’

y e e b t t t o n i

r c o E

E r r e a c T

e n m s l l r l o p n

a g r a

a

i e a s i e t p

g r

g

s m a o

t n r

o s c l

l

t — c r g e c n k u t a i a n p i e

M r e n p i c p t c S y o m o r P e e i a

f

n u

e S e n n

S

r o

s b u a

s d r a d a r o n

r T e a x e

s e a a

r g

a t

n t r . s u m s

n

c h g t o t e a o

k e t e h m f k

t b

i e b d o a n e m i t e e b d g

d

i r s t o C e a i e d s o t c p r t f

s c

s

n o r c e t D g u

u m

r d o a c r s n t

i i a i e

fi d F m r r , E s h c

f i t

e a m d a adi u o i a adi addi n

S a m t i r p t v

l a e s e e v g o as

d o

s s t o i u o n R n d s e R e i o i

e o

e

s h g o r S n r d d i n o n t

i m e ’

e l , t

g e g f o i

r n o c h o a s r yee a R l l t a c b o e l l h s t i

u . n a b i n e a c m r y v n o n A r s a

t t g

mer m i a u w

e i

i u g m r d i ommu s t e e b o o n n c o s s tmen e e m c r

n o ecard h. w

l r i o i a

n p e l o a o a f

n

r s C k - s C d n n i o t

o

T T eho b u

s t c

k d g

s t

r h r t n C U

t r l

a n c n t a y r t t n r

a k k o a i , n r e e o l a s a t s e e e s s n

o tionale for Inclusion in Balanced Scor tionale for Inclusion in Balanced n n o n t t a p s s

r d ) iso a a o m r s

s l a a E i n n c i

n a o a a e t e n r i i e h e b n

v T S u s i r v

a t r e eve i s

l e p a u u o

a a b s n r l e e u h r i i i eve a e h i h r a c

r k w

a a o n n m e R

ads t c s how r t i R m i C i c T u c L s h fi a m c m A Net m t a S t a Emp S Ra The o

a

s

t s f r r

s A m d c s e c b h e t c u d e m r s n i c n i e p O l o y p n u a o e d n s n l

h n a

g h a E n

a i e i

o s i , t d s o i S r e main

C

l t a e d a e n i

h a c m n

e e t

p r a idl r t h s n n

t , t S a n e g g r e i r e n i l

o h

M r o r e n i a

o

e o p a n t a n

a i flex t

n o fi p u a r i t g m e u

l s i c w is D

c a k i r o p u l r s p s o e t t

i

o r

a

l n E r n v i n t m s

i e s

r E

w i i p ’

r a

e

a s t a u t r o n d n

s

a l i r T r o a i m n e m y o v i s y

e e t C a s C i e a i

h s e k m u n e a t h e

r S d ) r

e is r t c e a e b o t s c r s c h

t h u h

t

a h i N v i

d m t t T f t n o n u e s w o m i

N n o s L i a e . i a s c i a n m s

a e v l r i

i e lls g

ise i

A d n e . n s n a L i

t

i o

t

o p l d p S d I u w w

o capital- v g s e h l

A e v e m y n u

o L

s e c r s u n s m

n s m ( t h n t B s e i m i e v s s t d

m c b n e e o i e d

e

sk e

b z p o m a A p a

r i e l o e x s f e

e a

a i e sc

r o

i a

y r h o

s n t e s ’ t b e r m t

M t b s

r s r

o B d c fi r w o r p s n s c p o n d n

s s w h ind s c t n s

T P n y t

e (

tors n t

n

e m e M i m t M . t

n i o e – e –

e n e a e esse h R l

n o P e e i e o

m

s e

t s r e . e

o

n n R c t n o

e e i t c c i n o k t r c p e k n n i e s o 0 a l a n d 0 i l e e i i t

a a i

c r e m u h d o h e r t m m r o n n t e l w

t 1 5 v h s s s s t e c ns i t n e O c O h r u a w p c e

n o e y u e n a p e e c r t e c d c e m e i t p t t o e e o u u i i m h

a

u F n r

e ) g e t d c n t t es and g o u a

u a r l r r F f o s s n m

t v m e i o e d w d i e e i b b n t y es e a s

e n e m l e r

n s a

l a s i m i m m a a e e a o n e t t r c w c w n i b G r s v o n n E v i s i

i o i

g g n

a o o r t m d d R asis

e e c V p p - d e o o t k e h p e h h i s s o m n a r l l c

e e r C L d u v s

g v n d o e a t

t nga t x x t a n c n n g t

o r r h s h m oss ’ han

n e e e n b r t t t n

r o c u

E r

e c

e s l l e ( d l o S E a p e g n tra a e e a a r u

i e A s e i

f

f

a

g s e n m

a

a a o n C

s d n l

t — i r c e n a

A a t a c n r i p e r r e r r n p i c p e s s d c e o

o

y o m adba adba e e P m i

e n o s

e e S l e n

r o s N

a s d i m e e

n o o e e d a e e v r n

r T e a x e e e a

r e k

e e e g i es and Indica r

r a t o o v

o

t r u t t m s

c r o o x t

e a r t e e h h f

k

r r b

l y y y l n e m t e u e e a n e e b c A d

m i O b m m m m s o t e e i m m s s e h E d s i t o g r r s c

s

a n b b c a I o D

o o u

m b b

r n o d a

r n

s

i s s i o S

fi t o o l o o l l F m t D e r r , o o n l

I f i u

t

e m i i d o a adi u a adi t t t t t P

e - r w m T e e r r adban d d v

l a e s e v g o p p p T E a h h f m m n s s s s s t t b s c e R o o p p i e v I o

e a T s

g t l o r S a r c c d d n l o e e n o r A e

’ e , e f i u e e u e

r n u u a o u u a u h e r O yee a l l m m m B x x e h K K c e T c c o o e l t i

u a n e h a c m r v n o A

g mer m i R u e N F R T B T S C t C C C L E i N S R D N E a a N S S fi E Measur C C C E fi u g ommu s t e e b o c s tmen e e n o h.

i n p l a o o a

s C k - C n n i o t o T T eho u

s c

k d s t

r

C

r l

n r t t n r a k k

a

i n r e s a e e o S I S Y L A N A D N A N O I USS C S I D S ’ T N E M E G A N A M | 6 tionale for Inclusion in Balanced Scor Inclusion in Balanced tionale for 3 n o n t a p s s r d a a s

s l a E o a e a e r e b

v u s e eve s e p u u o a a b n l r e e h eve h h r n n m R how r m i i t R L c i c T C u a m s h fi t m A c Net m S The Emp Ra a S a t O C n S o

i t D u r l E e o s v

C s m ) e e e h u h N d t t n u e s w L i i i r e lls A e n s n L i

t

I w w o e n u

o L c s s ( B v s s d

c b e sk p A p

e s f e e e sc

n t t b r t b s s

o B s n n

n s s t n

n tors n M M n o e – e – e a e esse h

n o e e e

o R t i c c o k c p n n s o 0 0 i i i e t

i r m t m m n n t l w t 5 1 s s s s e O c u a e

e e n e e c e p t t o e e u u i i a u F n ) g c g u a r l r r f s s n

m e d d b b y e a s

n n s

a m m a a e e o t w c n i G n n E v i s i g n

a o r t d d e e c V p p o o e i s s l l

e e L v g n d e a

t nga x x c n n r r h h han n e n r t t u

e ( d S E p e n tra a e e a a u A e f

f a

e n

a a C d n i a

A t c r r r r r s e s d e o

o

adba adba e e m e o s e l N

i m e e

n o o e e e e v e e e k e e e g a es and Indic i r

r o o v o t t t u r o x

r h

r r l y y y l e u e a n e c A m O b m m m m e m m s s h E i o g r r

a b b a I o

o o b b n

n

s s o S t l o o o o l l t D e o o n l I u t i i o t t t t t P e - r w T e e r adban d d p p p T E a h h f m m s s s s s t t b c o p p v I a T

t l a c c l e e o r A u e e u e u a u u u a u

e O r m m m B x x e h K K e T c c e o

h R N F T B T R L E C C t C C S R D S N fi a E S a fi S C C Measur E N E C N

S I S Y L A N A D N A N O I USS C S I D S ’ T N E M E G A N A M | 6 3 44 | MANAGEMENT’S DISCUSSION AND ANALYSIS to ensure itspositionisknown. SaskTel activelyparticipates inCRTC andotherproceedings to ourbusiness,andnegatively impactprofitability. These reforms often result inincreased costs, addcomplexity competitor-friendly policies,andlowerprices for consumers. SaskTel. There isastrong focus onincreasing competition, to incumbents,inparticular, regional operators suchas to engageinregulatory reforms that are disadvantageous by thefederal governmentanditsagencies,whichcontinue Telecommunications andbroadcasting services are regulated workforce itneedstobesuccessful, today andinthefuture. identify prioritiesandactionstoensure SaskTel hasthe Annual corporate workforce planning andculturalreviews workforce. Newskills,culture, andmindsetsare required. industry, andever-changingcustomerneedsallimpactthe Digital transformation, operating inafast-paced competitive pursuit of newmarkets. including product road maps,launchingnewservices, and experience. Severalinitiatives are inplace orunderway, It isequallyimportanttokeep astrong focus oncustomer (mobile andfixed) to continue to offer competitiveservices. It isimperative that SaskTel expandsitsbroadband network offering low-cost solutions. technologies, andlarge non-traditionalglobalcompanies competitive wireless market, emerging disruptive margins duetocommoditized legacyproducts, ahighly It isincreasingly challenging toincrease revenue and profit Having therequired workforce for thefuture negatively impactprofitability Federal regulation andpoliciesincrease complexity and and profit Having competitive services that enablerevenue growth REVENUE GROWTH REGULATORY WORKFORCE

plans inplace tomitigate disruptionifrequired. SaskTel maintainsrelationships withmultiplevendorsandhas foreign laws,culture, andpoliticalenvironments. originating inforeign jurisdictions poseauniquethreat dueto emerge that maychangeorendtherelationship. Vendors relying onthird parties,there isalwaysariskthat factors products andservices neededtooperate ourbusiness.When SaskTel workswithmanyexternalsupplierstoprovide extensive dealer network help mitigate the risk of not extensive dealernetworkhelpmitigate theriskof not a workfrom homesolution,aneChannelpresence, andan to supporttheirneeds.Businesscontinuity plans,including advertising campaigns,promotions, andfindingsolutions SaskTel isworkingtostayconnected tocustomersthrough also arisktoSaskTel’s abilitytodeliverservice toitscustomers. revenue lossduetoreduced customerspending.There is but there isariskthat SaskTel willexperience significant Full impactsof theCOVID-19 pandemicare stillunknown facing SaskTel are listedonthefollowing page. service, andsafety andenvironment. Thekey operational risks security, infrastructure, supplychain,resources, customer Operational risksconsider areas suchasbusinessinterruption, Operational Risks and compliance andlegalrisks. execute businessfunctionsrelated to operational, financial, The following core businessrisksfocus ontheabilityto and self-enablementenhancements. priorities andpursuenewopportunities,includingself-serve identify andaccelerate where thebusinessneedstoshiftits are beingtaken tosecure supplies.SaskTel continues to available, cybersecurityprotocols are inplace, and actions network infrastructure isplannedandbuilttobehighly being abletoservecustomers.Inaddition,SaskTel’s CORE BUSINESS RISKS CORE BUSINESS Reliance onvendorsandpartners SaskTel’s abilitytoservecustomers COVID-19 outbreak impactscustomerspendingand COVID-19 PANDEMIC SUPPLIERS

SASKTEL 2019/20 ANNUAL REPORT | 45

LITIGATION A lawsuit with significant consequences A lawsuit with significant Financial Risks Financial foreign rate, interest include this category in reviewed Areas pension plan, misstatement, financial credit, exchange, fraud, and assurance, revenue public reporting, investments, are risks business financial core No significant cash flow. Financial The Notes to Consolidated this time. at reported risk and related instruments Note 29 – Financial Statements, exposures highlights some financial management, and mitigations. Legal Risks Compliance and need to on SaskTel’s focus in this category reviewed Areas including contractual, with laws and regulations, comply environmental, statutory, party, third professional, and regulatory, litigation, intellectual property, governance, detail is More risk is described below. key SaskTel’s privacy. Statements, Financial Consolidated available in Notes to . and contingencies Note 31 – Commitments could negatively impact SaskTel’s results and reputation. results impact SaskTel’s negatively could andcounsel, due diligence, Contracts, tariffs, in-house the risk. mitigating to policies contribute Every business is subject to lawsuits due to various activities Every people of Employees interact with thousands undertaken. and visible. Various numerous assets are daily and SaskTel’s include contractual, legal risk exposure aspects of which party liability, and third statutory, professional,

SECURITY PHYSICAL INFRASTRUCTURE NETWORK and SYSTEMS RISKS and SYSTEMS NETWORK A security threat or data breach compromises information compromises breach or data A security threat or disrupts service Significant loss of access or damage to critical buildings and or damage to critical buildings of access Significant loss disrupts service infrastructure A significant network or systems outage disrupts service network or systems A significant SaskTel regularly assesses its environment and continues assesses its environment regularly SaskTel to protect and measures to implement extensive controls and to information, employee, and corporate customer, management disruption. Incident against service mitigate should an also in place plans are and response processes event occur. SaskTel, like any company, faces the risk of cyberattacks the risk of faces any company, like SaskTel, with the will only increase This threat breaches. or data software-based automation, digitalization, movement toward devices. connected and massive numbers of products, Preventative measures exist to reduce the chance of a of the chance exist to reduce measures Preventative systems, detection significant event or loss, including fire and upgrades. If an event maintenance, security measures, plans and disaster recovery business continuity occurs, offset to is also in place Insurance into effect. come protocols significant losses. Any natural weather event, fire, or vandalism can damage event, fire, weather Any natural disrupt service. physical assets, which could Networks and systems are designed and built to be highly are Networks and systems of replacement and maintenance, updates available. Regular key systems, alarming of end-of-life legacy technology and networks and system hardware, of redundancy components, the occurrence, reduce help processes and change control outages. Should an outage occur, and severity of duration, to in place plans are and disaster recovery business continuity impacts. help minimize SaskTel’s networks and systems are core to delivering services to delivering core systems are networks and SaskTel’s an extended for them became unavailable of and if either impacts. cause significant customer period, it could 46 | MANAGEMENT’S DISCUSSION AND ANALYSIS Other services International software andconsulting services Equipment andprofessional services Marketing services Security monitoringservices Local, enhanced andlongdistance services maxTV service, internet,anddata services Wireless networkservices andequipmentrevenue ($ millions) For theyearendedMarch 31, Consolidated Revenue 1. nmf Expenses Other income Revenue ($ millions) For theyearendedMarch 31, Consolidated NetIncome at thedate of initialapplication, April1,2019;however, noadjustmentstoretained earningswere required. that thecumulative effect of initiallyapplyingIFRS16beappliedasanadjustmenttotheopeningbalance of retained earnings SIC-15, andSIC-27, thestandards ineffect at thetime.Themodified retrospective approach toadoption ofIFRS16also requires this approach, the Corporation hasnotrestated comparative information, whichcontinues tobereported underIAS17, IFRIC4, Financial Reporting Standards” inthisMD&A.Adoptionwasbasedonthemodified retrospective approach. Inaccordance with Effective April1,2019, theCorporation adoptedIFRS16Leases (IFRS16)asdiscussedin“Application of NewInternational ADOPTION OFIFRS16LEASES RESULTSOPERATING Total comprehensive income Other comprehensive income Net income Net finance expense Results from operating activities FINANCIAL SUMMARY Depreciation -right-of-use assets Depreciation -property, plantandequipment Internal labourcapitalized Salaries, wages,andbenefits Goods andservices purchased Saskatchewan taxes Impairment loss Amortization –nomeaningfulfigure $ $ $ $ $ 1,287.0 1,283.7 1,132.1 1,283.7 (21.2) 173.0 359.0 543.4 124.6 119.8 154.9 194.6 377.9 575.8 2020 2020 35.1 27.2 10.7 33.4 43.8 23.2 27.8 32.4 4.8 6.6 3.3 8.2 $ $

1,277.9 $1,277.9 $ $ 1,283.0 1,124.7 1,277.9 127.4 163.5 370.3 553.1 131.6 158.3 (23.7) 215.5 361.8 565.0 2019 2019 34.4 30.9 27.1 34.7 35.2 30.2 28.9 5.1 4.2 6.6 – –

$ $ $

$ $ Change Change (11.3) (20.9) (12.0) 10.7 (1.8) (9.7) (7.0) (1.0) (7.6) (3.4) 16.1 10.8 (2.4) 4.0 6.6 5.8 9.5 2.5 0.6 7.4 4.2 0.1 1.6 5.8 9.1 3.5 (35.3) (10.5) (34.1) nmf nmf 14.3 13.6 (3.1) (1.8) (5.3) (2.9) (6.0) (2.1) 24.2 26.2 12.1 (9.7) (7.9) 0.3 0.5 5.8 0.7 0.4 4.4 1.9 0.5 % % 1 1 SASKTEL 2019/20 ANNUAL REPORT | 47 $119.8 2019/20 New Long-Term Debt Debt Ratio ($ millions) $127.4 2018/19 ($ millions) $90 $110 $130 Net Income Increased AOCI* Decreased Net Income Return Net Income on Equity $119.8 $4.2 $0.1 Adoption of IFRS 16 Increased Operating Revenue Decreased Operating Expense EBITDA Margin $25.8 $8.8 $9.7 Revenue Increased Wireless Revenue Increased Wireline Growth Revenue Decreased Wireline Legacy Revenue Operating $1.8 $5.8 ($ millions) $127.4 Recognition of Impairment Loss Increased Depreciation Increased Operating Revenue Decreased Operating Expenses Net Income Net Income ($ millions) — Data Points for Narrative see World Version see World Narrative Points for Net Income ($ millions) — Data $75 $50 Net Income NET INCOME $175 $125 $150 Net income graph Net income $100 Accumulated other comprehensive income other comprehensive Accumulated * The adoption of IFRS 16 did not have a significant impact on net earnings. IFRS 16 did not have a significant The adoption of SaskTel provides strong returns to the Province of Saskatchewan by managing its costs, optimizing its legacy services, optimizing its legacy managing its costs, by Saskatchewan of Province to the returns strong provides SaskTel maxTV wireless, segments, including business in key growth revenue and providing services, competitive new introducing million from million, down $7.6 $119.8 was Net income services. and products emerging and new and data, internet, service, of to the impact million related $10.7 an impairment loss of of as a result decreased Net income the same period in 2018/19. the excluding cash flows. Net income future related and the revenue services pandemic on declining marketing the COVID-19 million and $5.8 of growth revenue over year through year million, which increased have been $130.4 impairment loss would net finance million and increased of $1.8 other income by decreased million, partially offset $3.3 of a total expense reduction million. $4.2 expense of 48 | MANAGEMENT’S DISCUSSION AND ANALYSIS solutions, includingmanaged cloudandTierIIIData Centre services andremote networkmonitoringservices toitscustomers. to ruralcommunities. SaskTel continues toexpanditsmanagedandemerging services portfolio byoffering innovative ICT improvements toitsnetworkinfrastructure, includingFTTP, fusion,andexpansionsof DSLinternetandwireless broadband offset by revenue growth infixed andwireless broadband. SaskTel offers itscustomersincreasing internetbandwidth through and data (29.4%), andlocalaccess, enhanced services, andlongdistance (15.2%). Legacy revenue continues todeclinebutis SaskTel’s revenue iscomposed primarilyof wireless networkservices andequipmentrevenue (44.9%), maxTV service, internet Revenue wireline isaresult of strong growth inourmanagedandemerging services portfolio. customers optfor higherinternetspeedsandmore services delivered overSaskTel’s fibre network.The remaining growth in increased revenue inwireline growth services isaresult of ahigherinternetandmaxTV service revenue percustomer, as services. Growth inwireless revenue reflects agrowing subscriberbaseandincreased averagebillingperuser(ABPU),where and increased revenue from wireline growth services. Thisgrowth waspartiallyoffset byongoingdeclinesinlegacywireline Revenue for thefiscalyearendingMarch 31,2020was$1,283.7 million,up$5.8 million, reflecting continuedwireless adoption Broadband Internet REVENUE Revenues ($millions) +16,152 vs2018/19 $1,200 $1,280 $1,240 $1,320 Customer connections graph ($ millions) $1,277.9 $10.8 $16.1 (1,201) vs2018/19 $20.9 maxTV Service $2.7 $12.0 $9.1 +8,237 vs2018/19 $1,283.7 Wireless Long Distance 15.2% Local, Enhanced, and Internet, andData 29.4% maxTV Service, Professional Services 1.8% Equipment and and Software 5.3% Marketing, Security, 2019/20 RevenueProfile 2019/20 RevenueProfile +12,975 vs2018/19 Fibre $1,283.7M (24,924) vs2018/19 Wireline Voice Other Services 3.4% and Equipment44.9% Wireless Network SASKTEL 2019/20 ANNUAL REPORT | 49

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

TV ARPU growth. AND ENHANCED, ACCESS, LOCAL SERVICES DISTANCE LONG declined services and long distance enhanced, access, Local This decline is due to 2018/19. from million (9.7%) by $20.9 driven by ongoing wireless in network accesses, a reduction and internet-based technology substitution. SECURITY SERVICES MONITORING million to $32.4 $3.5 increased Security monitoring revenue 12.1% and of due to customer growth million in 2019/20, such as SaskTel’s value-added features use of increased safety, interactive security, provides smartHOME security that and residential technology for cameras, and automation to actively seek out continues SaskTel business consumers. customer and through both organically business growth acquisitions. account WIRELESS NETWORK SERVICES AND SERVICES NETWORK WIRELESS REVENUE EQUIPMENT in 2019/20, million (1.9%) $10.8 increased revenue Wireless a greater subscriber base, our wireless in growth reflecting mix and increased handsets in the sales premium volume of data plans with larger selecting price customers ABPU from on customer-first initiatives Our focus and features. buckets in resulted quality and coverage, and our leading network in year over year an increase churn and wireless decreased or 1.4%. 8,237 of net subscriber additions max increased revenue services and data internet, service, maxTV activations by increased This is driven million (4.4%). by $16.1 offerings richer retail (56.4%) in our expanded FTTP footprint, our High Speed Internet customer demand for and increased access saw increased service fibre infiNET SaskTel’s service. to increased and has contributed 11.0% of growth $32.4 ($ millions) ($ millions) 2019/20 $377.9 $194.6 ($ millions) 2019/20 2019/20 $575.8 2019/20 ($ millions) $28.9 2018/19 $215.5 $361.8 2018/19 2018/19 $565.0 2018/19 $0 $10 $30 $20 $40 $0 $50 $150 $100 $250 $300 $200 $375 Security monitoring $325 $350 $300 $400 $550 $450 $500 $400 $600 Local, Enhanced and Long Distance Revenue maxTV service, Internet and Datea Revenue service, Internet and Datea maxTV Wireless – Revenue and Accesses and – Revenue Wireless Security Monitoring Revenue Local, Enhanced, and Long Distance Revenue Local, Enhanced, and Long Distance Revenue maxTV Service, Internet, and Data Revenue and Data Service, Internet, maxTV Wireless – Network and Equipment Revenue Revenue and Equipment – Network Wireless 50 | MANAGEMENT’S DISCUSSION AND ANALYSIS Other ServicesRevenue( International Software andConsultingRevenue Equipment Revenue Marketing Revenue Marketing Services Equiptment Revenue Other servicesrevenue Other servicesrevenue $20 $30 $25 $35 $40 $20 $30 $10 $0 $10 $40 $20 $30 $50 $10 $0 $5 2018/19 2018/19 $30.2 2018/19 $35.2 2018/19 $6.6 $34.7 ($ millions) ($ millions) ($ millions) 2019/20 2019/20 2019/20 $23.2 $27.8 $8.2 2019/20 $43.8 ($ millions) communications systemsandprofessional services. decreased one-time salesof SaskTel’s business-grade Equipment revenue decreased by$12.0 millionreflecting EQUIPMENT ANDPROFESSIONALSERVICES new product diversification. Digital Outof Homebillboard medialineof business,and have beenpartiallyoffset by continued growth of itsnew revenue declinessince itspeakin2008. Thesedeclines experience significantfinancial pressures, andongoing strong asthetraditional directory industrycontinues to of $2.4 million(7.9%). EBITDA andcashflows remain in 2019/20, from $30.2 millionin2018/19, adecrease Marketing services revenue decreased to$27.8 million MARKETING SERVICES contributions for larger commercial projects. Centre service offerings, alongwithincreased customer in theIntegrated BusinessCommunications andData In 2019/20, thisportfolio sawgrowth innewservices Other services revenue increased $9.1 millionfrom 2018/19. OTHER SERVICES the newsuiteof networkmanagementservices. maintenance andsupportfees from significant contracts for primarily duetohigherprofessional services andincreased $8.2 millionin2019/20, up$1.6 millionfrom 2018/19, Software andconsulting services revenue increased to INTERNATIONAL SOFTWARE AND CONSULTING SERVICES

SASKTEL 2019/20 ANNUAL REPORT | 51

Goods and Services 48.0% Services Impairment Loss 0.9% Loss Impairment

Saskatchewan Taxes 2.4% Taxes Saskatchewan Full-Time Equivalents $1,132.1M Expenses Net Salaries, Wages, and Net Salaries, Wages, Benefits 29.8% Amortization 3.0% Amortization Depreciation 15.9% Depreciation Profile 2019/20 Expense GOODS AND SERVICES PURCHASED to decreased purchased Goods and services driven by million (1.8%) $9.7 of million, a decrease $543.4 the adoption of IFRS 16 (see Note 2), decreased equipment IFRS 16 (see Note 2), decreased the adoption of and business-grade equipment, devices wireless sales for on expenses, and management’s focus lower roaming spending. controlled $1,132.1 EBITDA Growth $0.1 $10.7 $543.4 2019/20 $1.0 ($ millions) $1,283.7M $16.1 $8.8 $553.1 2018/19 $9.7 ($ millions) $1,124.7 Reductions $550 $600 $450 $500 $400 Goods and services purchased Operating Expense $1,120 EXPENSES $1,180 $1,140 $1,160 $1,100 $1,060 $1,080 $1,040 Expenses

Goods and Services Purchased Goods and Services Purchased Expenses increased $7.4 million from the previous year to $1,132.1 million. This increase reflects an impairment loss of $10.7 of $10.7 an impairment loss reflects million. This increase year to $1,132.1 the previous million from $7.4 Expenses increased cash future and the related revenue services pandemic on declining marketing the COVID-19 of to the impact million related volumes, and decreased device wireless reduced equipment sales, fewer one-time business-grade by offset flows, slightly focus of management’s a result on is of the decrease remainder The efficiencies. salaries and benefits due to workforce assets. in capital due to growth depreciation by increased offset spending, slightly controlled Expenses 52 | MANAGEMENT’S DISCUSSION AND ANALYSIS Net FinanceExpense Saskatchewan Taxes Depreciation, Amortization, andImpairment Net Salaries,Wages, andBenefits Saskatchewan Taxes Salaries, Wages, Benefits NetFinanceExpense $300 $360 $330 NetFinanceExpense Saskatchewan Taxes $20 $30 $10 $40 $20 $30 $0 $10 $0 $40 $20 $20 $30 $30 $10 $10 Depreciation, Amortization andImpairment $200 $0 $250 $0 $150 2018/19 2018/19 2018/19 $27.1 $346.6 $30.9 2018/19 2018/19 $30.9 2018/19 $27.1 $197.9 ($ millions) ($ millions) ($ millions) 2019/20 2019/20 $27.2 2019/20 2019/20 2019/20 2019/20 $35.1 $337.8 $206.4 $10.7 $27.2 $35.1 $6.6 ($ millions) revenue andtherelated future cashflows. of theCOVID-19 pandemic ondecliningmarketing services An impairmentlossof $10.7 millionisrelated totheimpact assets. right-of-use IFRS 16, where wenowrecognize thedepreciation of remainder of theincrease isaresult of theapplication of capacity, coverage, andspeedsacross theprovince. The to expandSaskTel’s fibre footprint andtoincrease wireless wireless broadband networks,includinglarge expenditures million, primarilyduetoincreased spendingonourfixed and Depreciation andamortization expenseincreased to$213.0 DEPRECIATION, AMORTIZATION, ANDIMPAIRMENT down $8.8 millionduetoworkforce efficiencyinitiatives. Net salaries,wages,andbenefitsdecreased to$337.8 million, (NET OFINTERNALLY CAPITALIZED LABOUR) WAGES,SALARIES, ANDBENEFITS subscriber accounts. rates, andincreased financingincome and interest on to highersinking fundbalances andhigheraverage interest This ispartiallyoffset byincreased sinkingfundearnings due interest onleaseliabilitiesduetotheadoptionof IFRS16. interest rates; reduced capitalized interest; and increased early 2019/20;increased short-termborrowings andhigher term debt;newlong-termdebt issuedinmid-2018/19and This isdueto:increases ininterest onlong-termandshort- Net finance expenseincreased $4.2 millionyearoveryear. NET FINANCEEXPENSE from 2018/19. Taxes were $27.2 millionin2019/20, up$0.1 million in Saskatchewan. cities, towns,villages,ruralmunicipalities,andnorthernsites Province of Saskatchewan andgrants-in-lieuof taxes paidto Taxes represent thepaymentof corporate capitaltaxtothe SASKATCHEWAN TAXES IFRS16adoption Impairmentloss Depreciation andamortization

SASKTEL 2019/20 ANNUAL REPORT | 53

Broadband Year over year change Year Cash Used in Increased net borrowing Decreased dividend and equity advance payments Investment in Financing Activities $1,283.7M Debt Ratio financial statements. of the consolidated of Note 25 – Employee benefits OTHER COMPREHENSIVE INCOME COMPREHENSIVE OTHER million, $4.8 to increased income Other comprehensive from resulted The increase 2018/19. million from up $0.6 as well as the impact on sinking fund assets, gains increased benefit on the defined rate in the discount an increase of on thereturns reduced by partially offset pension liability, of the plan assets and the impact defined benefit pension in disclosed limit. The assumptions are asset ceiling Year over year change Year Cash Used in Decreased spending on plant equipment and intangible assets Increased government funding $4.8 Investing Activities Dividend Payout Ratio $0.5 ($ millions) $0.1 Increased working capital requirements Increased cash from operations Cash from Declared Year over year change Year Dividends $4.2 Operating Activities LIQUIDITY AND CAPITAL RESOURCES LIQUIDITY CAPITAL AND OTHER COMPREHENSIVE INCOME COMPREHENSIVE OTHER $2 $4 $6 $0 Liquidity and capital resources Other Comprehensive Income Other Comprehensive

54 | MANAGEMENT’S DISCUSSION AND ANALYSIS Cash UsedinFinancingActivities Cash UsedinInvestingActivities Cash Provided byOperating Activities Operation expense Cash usedinfinanceactivities Investing Activities $280 Cash usedinfinanceactivities Investing Activities Operation expense $250 $265 $295 $280 $240 $240 $250 $265 $295 $270 $270 $255 $255 $40 $40 $20 $30 $50 $20 $30 $50 $10 $10 $0 $0 2018/19 $292.3 2018/19 2018/19 2018/19 2018/19 2018/19 $262.3 $262.3 $292.3 $42.1 $42.1 ($ millions) ($ millions) ($ millions) 2019/20 $292.6 2019/20 2019/20 2019/20 2019/20 2019/20 $256.0 $256.0 $292.6 $24.5 $24.5 included intheCapitalExpenditure section,page56. in 2019. Additionaldetailsof the2020capitalprogram are received in2020whilenogovernmentfundingwasreceived $35.1 million.Governmentfundingof $2.6 millionwas Spending onintangibleassetsincreased $6.8 millionto equipment was$223.6 million,down$10.5 millionfrom 2019. the previous year. Total cashinvested inproperty, plantand fiscal yearendedMarch 31,2020, down$6.3 millionfrom Cash usedininvestingactivitieswas$256.0 millionfor the CASH USEDININVESTINGACTIVITIES increased working capitalrequirements. activities asaresult of increased EBITDA, partiallyoffset by previous yearprimarily duetoincreased cashfrom operating March 31,2020was $292.6 million,up$0.3 millionfrom the Cash provided by operating activitiesfor thefiscalyearended CASH PROVIDED BY OPERATING ACTIVITIES industry standards. in dividendswhilemaintainingadebtratio within last fivefiscalyears,SaskTel paid atotal of$373.4 million a decrease of $9.1 millionfrom theprevious year. Duringthe million toCICduringthefiscalyearendingMarch 31,2020, the adoptionof IFRS16. SaskTel paiddividendsof $107.2 offset byincreased leaseliabilitypaymentsasa result of the previous yearthat wasnotrequired in2019/20, partially dividend paymentsandanequityadvance repayment in the previous year. Thisisprimarilyduetoslightlyreduced year endedMarch 31,2020, compared to$42.1millionfor Cash usedinfinancingactivitieswas$24.5 million for the CASH USEDINFINANCINGACTIVITIES

SASKTEL 2019/20 ANNUAL REPORT | 55 % 1.4 3.9 6.6 (2.3) 12.8 10.6 2.6% nmf¹ 1.2 (4.4) 16.8 84.1 12.1 67.3 22.5 106.3 Change $ $

5.1 2019 193.3 176.0 46.6% 1,165.2 2,180.6 1,015.4 1,003.2 March 31, March $ $

17.2 2020 188.9 198.5 47.8% 1,182.0 2,264.7 1,082.7 1,109.5 $ $ March 31, March Access to Capital plant in 2020/21 will be property, cash The primary use of growth and equipment and intangible asset expenditures, payments. and dividend initiatives, capital funding of The 2020/21 plan assumes that dividend payments and initiatives, growth expenditures, Additional funding will be operations. will be initially from short-term notes and long-term debt through accessed Saskatchewan. of the Province issued through up to $500 million in combined of facilities consist Credit from institutions and advances with financial credit lines of had SaskTel 31, 2020, At March Saskatchewan. of the Province these facilities. million of $188.9 accessed has authority to issue up to SaskTel facility, Besides this credit and long-term debt. Total short-term billion in combined $1.8 2020 and 31, March million at outstanding debt was $1,298.4 31, 2019. March million at $1,196.6 Aaa

Moody’s Not Rated

AA DBRS R-1 (high) S&P A-1+ AA (stable) 2 2 3 Cash - no meaningful figure - no meaningful figure CAPITAL MANAGEMENT CAPITAL Long-term debt Short-term liabilities Capitalization Debt ratio Net debt Less: Sinking funds Less: Equity Short-term debt lease liabilities and short-term debt exclude 2. Long-term at retained earnings (loss), and income comprehensive other accumulated is defined as equity advances, the debt ratio calculating the purposes of for Equity 3. the period. the end of 1. nmf The weighted average interest rate on SaskTel’s fixed rate fixed on SaskTel’s rate The weighted average interest and 4.62% 31, 2020, March at 3.92% debt was approximately the of rate The weighted average interest 31, 2019. March at 31, 2020 was 1.68% March short-term debt outstanding at 31, 2019. March at and 1.88% Debt Instruments Debt short-term and long- of consists debt portfolio SaskTel’s by, and guaranteed issued through, term debt. Both are Short-term debt is issued at Saskatchewan. of the Province atLong-term debt is on the issue date. in effect rates market rates. interest fixed comprehensive income of $4.8 million and $4.8 of income comprehensive million. $107.8 declaring dividends of as intangible assets. Equity increased $16.8 million $16.8 as intangible assets. Equity increased million, other $119.8 of net income recording after SaskTel’s debt ratio increased to 47.8% at March 31, 2020, 2020, 31, March at to 47.8% increased debt ratio SaskTel’s net overall level of The 31, 2019. March at 46.6% from million, primarily to fund continued $67.2 debt increased plant and equipment as well investment in property, ($ millions) Long-term debt Long-term 56 | MANAGEMENT’S DISCUSSION AND ANALYSIS Wireless 22.7% IT Infrastructure 12.6% Equipment 5.6% Buildings and Other 7.9% Capital Expenditures 2019/20 customer deliverycosts. to record uptofour showsat once, whileloweringongoing seven highdefinitiontelevisions simultaneously, theability 80 Mbps,highdefinitionand feature-rich mediaservices to download speedsupto900Mbps, uploadspeedsupto White City, andYorkton. Thefibre networkcandeliver Swift Current, TheBattlefords, Tisdale,Warman, Weyburn, Jaw, Nipawin,Prince Albert,Regina, Rosthern, Saskatoon, Estevan, Humboldt,Martensville,Melfort, Melville,Moose Saskatchewan’s largest centres including: EmeraldPark, new fibre opticnetwork,righttoourcustomers’doorsin to upgradebroadband facilitiesandbringinfiNET, SaskTel’s The Fibre tothePremises program isanongoingprogram million) (2019/20 to –$63.8 Premises the Fibre accounting reporting systems, andwireless spectrum. on intangibleassetssuchascustomerself-servesystems, remaining $34.5 million (2018/19–$28.9 million)wasspent Access Demand, andothernetworkimprovements whilethe to thePremises (FTTP),wireless networks(LTE andWi-Fi), was spentonproperty, plantandequipment,includingFibre Of the$262.9 million,$228.4 million(2018/19–$239.3 million) capabilities inthefuture. opportunities toprovide additionalenhancements and to improve ourcustomer’s experience todayandcreate expenditures during 2019/20(2018/19-$268.2 million) SaskTel investedanadditional$262.9 millionincapital and speedof ournetworks. enhancements toimprove thecoverage, capacity, reliability, throughout Saskatchewan bycontinuing toinvestin endeavour todeliverfastandreliable broadband service experience beginswithourNorthStar—broadband. We SaskTel’s missiontoprovide anexceptional customer 2018/19 CapitalExpenditures CAPITAL EXPENDITURES $262.9M Wireline –Other14.6% Wireline – Fibre 34.3% Wireline –Copper2.3%

C Fibre tothePremises services tonorthernresidents andbusinesses. northern fibre facilitieswhichwillbringhighspeedbandwidth and mobilevoice, video,anddata services andexpansionof transport infrastructure toaccommodate ruralgrowth of fixed wireline andwireless networks;improvements toourrural improvements include:capacityimprovements toour and continue tosupportthegrowing economy. These meet theneedsof Saskatchewan residents andbusinesses capacity andmodernize key components sothat itmay SaskTel hasinvestedinotherareas of itsnetworktoincrease million) (2019/20 –$45.3 Improvements Network Other to offer. customers mayaccess alltheservices that SaskTel has and increases capacityinexistingneighbourhoodssothat program toaddinfrastructure tonewneighbourhoods The Access NetworkDemandprogram isanongoing (2019/20 million) –$25.6 Demand Network Access based services ontheirsmartphonedevices withoutdelay. watch andlistentomultimediacontent, andaccess cloud- provide thespeedsandcapabilitiestotravelinternet, coverage that positivelyimpactcustomerexperience and investments result inincreased data speedsandimproved Wi-Fi networkavailableinSaskatchewan. Theseongoing 50 communities intheprovince, makingitthelargest unlimited free data inover2,500 locations spread across province. SaskTel selectWi-Fiprovides SaskTel customers in Saskatchewan andcovers 99%of theresidents inthe SaskTel’s wireless LTE networkisthe largest LTE network LTE Wi-Fi and (2019/20 –$47.5 million) PREMISES (thousands) 200 250 300 350 100 150 50 0 14.1% 2013 Passed 25.3% 2014 (Consumer andBusiness) 2015/16 34.5% 2016/17 45.2% 2017/18 47.5% Connected 2018/19 46.0%

2019/20 47.6% SASKTEL 2019/20 ANNUAL REPORT | 57

NEW STANDARDS AND NEW STANDARDS YET NOT ADOPTED INTERPRETATIONS IASB is issued by the amended standard The following 31, 2020. after March fiscal periods beginning for mandatory (IFRS 3) Amendments to IFRS 3 Business combinations IFRS 3 of guidance The amendments to the implementation of a business to assist entities to determineclarify the definition as a business for whether a transaction should be accounted or an asset acquisition. combination future whether The amendments to IFRS 3 may affect oras business combinations for accounted acquisitions are the of allocation asset acquisitions, along with the resulting between the net identifiable assets acquired price purchase and goodwill. will adopt the amendments to IFRS 3The Corporation with the on April 1, 2020 in accordance prospectively the standard. of transition provisions accordance with IAS 17, the lease liability will be recognized recognized will be liability the lease with IAS 17, accordance payments, lease remaining the value of the present at borrowing incremental using the Corporation’s discounted asset will be measured The right-of-use 2019. April 1, at rate made plus any payments the lease liability of the amount at for requirements transition. The accounting at or accrued with regard unchanged, particularly largely lessors remain to to classify leases according requirement to the continued has the Corporation adopting IFRS 16, of As a result IAS 17. to both assets and liabilities, a significant increase recognized earnings. retained was no impact to opening there however, to decrease in: a IFRS 16 has also resulted The adoption of lease rent of the removal for purchased goods and services due to depreciation in depreciation expense; an increase to net finance and an increase assets; the right-of-use of expense additional interest of expense due to recognition of The change in presentation to the lease liabilities. related in in an improvement also resulted lease expense operating decline in corresponding and a operations cash flows from financing activities. cash flows from

, and SIC-27 – Incentives Leases Operating SIC-15 As a result, comparative information has not been restated has not been restated information comparative As a result, (IAS 17), under IAS 17 Leases to be reported and continues a contains Determining whether an Arrangement IFRIC 4, Lease, lessees to adopt a uniform IFRS 16 requires Adoption of in the leases resulting of to the presentation approach and use received the right of assets for of recognition all into for entered obligations the payment liabilities for in had been classified as operating leases. For leases that The International Accounting Standards Board (IASB) and the Board Standards Accounting The International Committee Interpretations Reporting Financial International was applied by that standard (IFRIC) issued the following (IFRS 16) withadopted IFRS 16 Leases has The Corporation described in April 1, 2019 as of initial application of a date financial the consolidated , of presentation – 2 Basis of Note with the transition provisions In accordance statements. has applied IFRS 16 using the the Corporation IFRS 16, of the that requires that approach retrospective modified as recognized of initially applying IFRS 16 is effect cumulative earnings at retained of an adjustment to the opening balance April 1, 2019. Involving the Legal Transactions of the Substance Evaluating at the time. in effect the standards a Lease, Form of APPLICATION OF NEW INTERNATIONAL OF NEW INTERNATIONAL APPLICATION STANDARDS REPORTING FINANCIAL (IFRS 16) IFRS 16 Leases the Corporation. Significant accounting policies, estimates, and judgments policies, estimates, Significant accounting See financial statements. in the consolidated contained are financial to the consolidated presentation Note 2 – Basis of judgments and policies, estimates, accounting for statements a whole, as well as as statements applicable to the financial about the accounting information for more specific notes for uses SaskTel and judgments that principles, estimates, its financial statements. in preparing each applicable account have a significant impact these policies could Certain of of the amount and timing results including: on financial of determination with customers; contracts from revenue or and depreciation capitalization to obtain contracts; costs plant and equipment, and intangible property, of amortization units; assets and cash-generating assets; impairment of of estimation obligations; to pension assumptions related and environmental decommissioning liabilities for the future financial instruments. of and the fair value remediation; SaskTel’s discussion and analysis of our financial position and our financial analysis of discussion and SaskTel’s financial on the consolidated based are operations of results with in accordance which have been prepared statements, (IFRS). Standards Financial Reporting International SIGNIFICANT ACCOUNTING POLICIES, SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES, 58 | MANAGEMENT’S DISCUSSION AND ANALYSIS FIVE-YEAR RECORD SERVICE OF Total liabilitiesandProvince of Saskequity Province of Saskequity Other long-termliabilities Long-term debt Property, plantandequipment †Results excluding theadoption of IFRS15 *Results excluding the adoptionof IFRS16 Consolidated Statement of CashFlows Current liabilities Total assets Other long-termassets Current assets ($ millions) As at Consolidated Statement of Financial Position Consolidated Statement of IncomeandOtherComprehensive Income Cash provided byoperating activities Cash, beginningof year ($ millions) Total comprehensive income Other comprehensive income (loss) Net income Net finance expense Results from operating activities Expenses Other income Revenue ($ millions) Cash usedininvestingactivities Cash, endof year continuing ops Increase (decrease) incashfrom Cash provided by(usedin)financingactivities Saskatchewan taxes Impairment loss Amortization Depreciation -right-of-use assets and equipment Depreciation -property, plant Internal labourcapitalized Salaries, wages,andbenefits Goods andservices purchased 12 monthsended 12 monthsended March 31,2020 March 31,2020 $ $ $ $ $ 1,283.7 1,132.1 1,287.0 $ $ $ $ (21.2) (35.1) 124.6 119.8 154.9 173.0 359.0 543.4 (256.0) 27.2 10.7 33.4 (24.5) 292.6 4.8 6.6 3.3 17.2 12.1 2,807.3 1,182.0 1,904.7 2,807.3 5.1 833.1 712.2 423.3 479.3

2020 80.0

12 months ended 12 monthsended 12 months ended 12 monthsended March 31,2019* March 31,2019* $ $ $ $ $ $ $ $ $ 1,124.7 1,283.0 1,277.9 (262.4) 131.6 127.4 158.3 163.5 370.3 553.1 (23.7) (30.9) 292.3 (12.2) (42.1) 27.1 34.4 2,662.1 1,165.2 1,003.3 1,854.7 2,662.1 17.3 4.2 5.1 2019* 446.2 278.1 529.3 5.1 – – 47.4 12 months ended 12 monthsended 12 months ended 12 monthsended March 31,2018*† March 31,2018*† $ $ $ $ $ March 31 $ $ $ $ 1,253.2 1,099.0 1,254.6 (293.0) 227.9 106.9 121.0 155.6 157.6 377.7 523.3 (26.6) (34.6) 2,489.9 1,073.7 1,779.5 2,489.9 332.7 (33.5) 2018*† 26.8 40.2 11.1 17.3 953.5 408.1 214.7 495.7 1.4 6.2 54.6 – – 12 months ended 12 monthsended 12 months ended 12 monthsended March 31,2017*† March 31,2017*†

$ $ $ $ $ $ $ $ $ 1,282.8 1,123.5 1,292.9 (311.9) 2,394.5 1,693.2 2,394.5 188.3 134.8 169.4 163.0 380.6 541.2 (25.9) (34.6) 2017*† 324.1 (17.2) 53.5 26.2 38.4 10.1 165.6 954.7 851.9 422.3 232.9 468.4 16.1 11.1 (5.0) – – 15 months ended 15 monthsended 15 months ended 15 monthsended March 31,2016*† March 31,2016*† $ $ $ $ $ $ $ $ $ 2,253.1 1,594.3 2,253.1 1,569.6 1,407.4 1,574.2 (370.4) 2016*† 216.4 796.3 777.3 463.1 218.9 439.9 120.8 126.7 166.8 211.4 474.8 673.9 333.6 (27.3) (40.1) 31.0 43.6 44.0 16.1 (5.9) 8.9 4.6 7.2 – – SASKTEL 2019/20 ANNUAL REPORT | 59

- – 0.7 8.8 9.6 0.5 Q1 37.5 30.0 2016 (6.7) 96.6 39.7 (7.4) 37.3 29.9 30.4 378.0 16.8% 51.9% 3,956 318.1 317.4 132.8 280.8 67,173 $ $ $ 614,221 413,052 264,196 107,321 361,265 2018/19 1,465,963 $ $ $ $

– – March 31, 2016 March 2.1 8.6 6.4 Q2 March 31, 2016*† March (5.9) 89.3 40.3 (7.5) (2.7) 45.8 38.3 35.6 15 months ended15 months 15 months ended 317.2 315.1 132.7 271.4 $ $ $ 2018/19 2017

73,722 3,916 30.0 30.0 – – 615,882 388,519 275,356 110,591 316.1 47.9% 15.4% 8.6 6.0 1.3 Q3 1,464,070 326,761 (0.3) (5.8) 92.2 41.7 (7.9) 39.1 31.2 32.5 $ $ $ 331.3 331.6 149.5 292.2 $ $ $ $ 2018/19 March 31, 2017 March 12 months ended

March 31, 2017*† March – – 12 months ended12 months 2.6 8.4 5.1 5.1 Q4 Excluding the impacts of IFRS 16 IFRS the impacts of Excluding (5.3) 92.2 41.8 (8.1) 36.1 28.0 33.1 316.4 313.8 138.1 280.3 2018 $ $ $ 2018/19 89.9 3,880 72,467 108.9 302.0 46.2% 11.9% 607,448 361,351 278,977 110,881 325,095 1,431,124 $ $ $

March 31 March – 1.7 8.4 9.7 $ Q1 (0.6) (5.8) 92.2 42.2 (9.1) (7.9) 31.7 22.6 14.7 March 31, 2018 March 310.5 311.1 130.4 278.8 $ $ $ 12 months ended March 31, 2018*† March 2019/20 12 months ended12 months

– 2019 0.9 1.7 8.4 4.0 6.4 Q2 76,692 (6.1) 87.3 43.1 (8.6) 41.9 33.3 37.3 3,719 114.7 116.3 268.2 46.6% 11.0% 609,951 338,779 277,244 112,583 321.9 321.0 139.2 280.0 317,096 1,415,249 $ $ $ 2019/20 $ $ $

$ March 31, 2019 March 2.5 1.6 8.6 0.6 7.1 5.7 Q3 March 31, 2019* March (4.3) 88.9 43.2 (8.9) 48.7 39.8 46.9 12 months ended 12 months ended12 months 340.7 338.2 147.7 292.0 $ $ $

2019/20

2020 85,948 Including the impacts of IFRS 16 of Including the impacts 3,415 0.5 1.6 Q4 8.0 1.6 5.4 618,188 314,739 276,460 111,382 107.8 107.2 262.9 47.8% 10.2% 90.6 44.5 10.1 32.6 24.1 25.7 (5.0) (8.5) 308,003 1,406,717 313.9 313.4 126.1 281.3 $ $ $ $ $ $ 2019/20 $ March 31, 2020 March March 31, 2020 March 12 months ended 12 months ended 12 months Goods and services purchased Goods and services Salaries, wages, and benefits Internal labour capitalized Internal labour capitalized Depreciation - property, plant - property, Depreciation and equipment Depreciation - right-of-use assets - right-of-use Depreciation Amortization Impairment loss Saskatchewan taxes Saskatchewan Debt ratio Dividends declared Employees and payroll FTEs Total Salaries earned (000s) ($ millions) on equity Return *Results including the adoption of IFRS 16 adoption of including the *Results IFRS 15 the adoption of excluding †Results Indicators Financial Dividends paid Capital expenditures *Does not include SaskTel internal use *Does not include SaskTel Statistics Annual Operating As at Customer accesses Wireless* Wireline* Internet (includes maxTV) subscribers maxTV Security monitoring subscribers accesses Total Consolidated Statement of Income and Other Comprehensive Income and Other Comprehensive Income of Statement Consolidated Expenses Other income ($ millions) Revenue Results from operating activities operating from Results expense Net finance (loss) income Other comprehensive Net income income comprehensive Total 60 | MANAGEMENT’S DISCUSSION AND ANALYSIS storage andmanagement. Data centre: Afacilityfor hostedapplications anddata companies inCanada. broadcasters andcableTV, andtelecommunications Commission): CRTC (CanadianRadio-televisionandTelecommunications same period. divided bytheaveragenumberof unitsonthenetworkin as thenumberof subscriberunitsdisconnecting inaperiod intensity. Itisusuallyexpressed asapercentage andcalculated at least partiallyreflective of service quality and competitive service. Itisameasure of customerturnoverandisoften the disconnect rate of customerstoatelecommunications Churn: Thisbusinessperformance measure isusedtodescribe of assets. independent of thecashinflows from otherassetsorgroups group of assetsthat generate cashinflows that are largely CGU (cashgenerating unit):isthesmallestidentifiable Broadband: trillions of bps. second) isbillionsof bps;andTbps(terabitspersecond) is (megabits persecond) ismillionsof bps;Gbps(gigabitsper Kbps (kilobitspersecond) isthousandsof bps;Mbps points orwithinnetworkdevices. transferred inasecond betweentwotelecommunications speed usedfor measuringtheamountof data that is Bps (bitspersecond):Ameasurement of data transmission wireless orcablebusiness’ operating performance. generated percustomermonth.ARPUisanindicator of a used inthewireless andcableindustriestodescribetherevenue measure, expressed asadollarrate permonth,ispredominantly ARPU (averagerevenue peruser):Thisbusinessperformance per month. network duringtheperiod,andisexpressed asarate by theaveragenumberof mobilephonesubscribersonthe monthly service plan,roaming andusagecharges, divided measure calculated asnetworkrevenue derivedfrom ABPU (averagebillingperuser):Thisbusinessperformance defined bytheInternational Telecommunications Union. technologies that includesHSPA+, LTE andLTE advanced, as 4G (fourthgeneration): Thegeneration of wireless GLOSSARY at speedsof 1.5 Mbpsandaboveonfixed andwireless networks. simultaneous high-speedtransmissionof voice, data, and Telecommunications services that allowthe The federal regulator for radioand television

video video FTTx (fibre tothex): large amountsof data betweenlocations. are transmitted.Optical fibre networksare usedto transmit Fibre network:Hair-thinglassfibres alongwhichlightpulses LTE telecommunications mobile 4G (long-termevolution):A dedicated set-topbox. network bywayof astreamed broadband connection toa that usesatwo-waydigitalbroadcast signalsentthrough a (InternetProtocol television):Atelevisionservice IPTV common network. and advanced applications tocommunicate overasingle and video.AnIP-basednetworkallowsavarietyof IPdevices support alltypesof customertraffic, includingvoice, data, (quality of service) technologytoreliably andefficiently IP-based network:AnetworkdesignedusingIPandQoS data across networks. IP (InternetProtocol): Apacket-based protocol for delivering connected businesses,homes,cars,andcities. time andcanbedeployedtoenablethecreation of smart These systemscollect, analyze, andactoninformation inreal intervention, mostcommonly overawireless network. end points(orthings)that interactwithouthuman Internet of Things(IoT): Anetworkof uniquelyidentifiable those downloadspeeds. 6 Mbpsexpected).HSPA+ dual-cell technologycan double download speedsof upto21Mbps(typicalspeedsof 4to capable of deliveringmanufacturer-rated wireless data HSPA+ (highspeedpacket accessplus):A4Gtechnology or neighbourhood. of services andusageinarrears, after consuming theservices. where asubscriberisbilledandpaysfor asignificant portion Postpaid: Aconventional methodof paymentfor services medium otherthantheestablishedvideodeliveryinfrastructure. a videoenvironment where thedeliveryoccurs through a Content,services, andapplications in Over-the-top (OTT): actions withoutanyhumanassistance. devices that are abletoexchange information and perform M2M (machine-to-machine):Technologies andnetworked technology that istheleadingglobalwireless industrystandard. home, FTTPdenotespremises, andFTTNdenotesnode of theexistingcopper localloops.FTTHdenotesfibre tothe network architecture usingopticalfibre to replace allorpart A collective termfor anybroadband

SASKTEL 2019/20 ANNUAL REPORT | 61

indicator of a company’s of indicator operating performance and ability to incur and service debt, ability to incur and service and performance operating metric. and as a valuation revenue minus operating is defined as operating EBITDA revenue is defined as total revenue expenses. Operating defined as expenses are Operating other income. of exclusive salaries, wages, and purchased, services goods and the sum of less internal labour capitalized. taxes benefits and Saskatchewan operating of is the percentage margin margin: EBITDA EBITDA and capital investment debt coverage, available for revenue to the shareholder. return EBITDA margin is defined as EBITDA divided by operating revenue. divided by operating is defined as EBITDA margin EBITDA to the the return ROE measures on equity): ROE (return retained including AOCI, based on the equity, shareholders as net income is defined The calculation by the Corporation. the fiscal period. divided by average equity for NON-GAAP AND OTHER FINANCIAL MEASURES FINANCIAL AND OTHER NON-GAAP comparing for a basis provides This measure Capital intensity: of other companies of to those capital expenditures the level of the same industry. within varying size (excluding as capital expenditures calculated is This measure by transactions) divided and non-monetary licences spectrum revenues. total operating of the capitalization measures The debt ratio Debt ratio: capital structure allows for This measure the Corporation. in the same industry. with other companies comparison Net divided by total capitalization. It is defined as net debt and short-term debt minus cashdebt is defined as long-term is defined as net debt capitalization and sinking funds. Total including AOCI. plus period-end equity, depreciation, taxes, income interest, (earnings before EBITDA is used as an EBITDA and amortization):

A method of payment that allows a customer to a customer allows that payment of A method Networking technology that allows fidelity): Networking technology that (wireless Wi-Fi to a wireless to connect any user with a Wi-Fi-enabled device public locations. point or hotspot in high-traffic access to wireless customers over LTE wireless networks. wireless LTE customers over to wireless A platform to provide voice services voice to provide A platform (VoLTE): over LTE Voice The range of electromagnetic radio frequencies radio frequencies electromagnetic Spectrum: The range of The and video. data, voice, of used in the transmission the of network is in part a function a wireless capacity of and used by the carrier. spectrum licensed amount of A service offered by wireless network operators by wireless offered Roaming: A service in mobile phones while to use their allows subscribers that another operator. of area the service of actual usage. of Prepaid: Prepaid: prepay for a set amount of airtime and/or data in advance data airtime and/or of a set amount for prepay Consolidated Financial Statements

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The accompanying consolidated financial statements, included in the annual report of Saskatchewan Telecommunications Holding Corporation for the fiscal year ended March 31, 2020, are the responsibility of Management and have been approved by the Board of Directors. Management has prepared the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board. The policies set out have been consistently applied to all the periods presented unless otherwise noted. The financial information presented elsewhere in this annual report is consistent with that in the consolidated financial statements.

To ensure the integrity and objectivity of the financial data, Management maintains a comprehensive system of internal controls including written policies and procedures, an organizational structure that segregates duties, and a comprehensive internal audit program. These measures provide reasonable assurance that transactions are recorded and executed in compliance with legislation and required authority, assets are properly safeguarded, and reliable financial records are maintained.

The Board of Directors fulfills its responsibility with regard to the consolidated financial statements principally through its Audit and Risk Committee, consisting of outside directors, which meets periodically with Management as well as with the internal and external auditors. The Audit and Risk Committee is responsible for engaging or re-appointing the services of the external auditor. Both the internal and external auditors have free access to this committee to discuss their audit work, their opinion on the adequacy of internal controls and the quality of financial reporting. The Audit and Risk Committee has met with Management and the external auditor to review the Corporation’s annual consolidated financial statements prior to submission to the Board of Directors for final approval.

The consolidated financial statements have been audited by the independent firm of KPMG LLP Chartered Professional Accountants, as appointed by the Lieutenant Governor in Council and approved by Crown Investments Corporation of Saskatchewan.

Doug Burnett Charlene Gavel President and Chief Financial Officer Chief Executive Officer May 28, 2020 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED 62 | SASKTEL 2019/20 ANNUAL REPORT | 63 Charlene Gavel Chief Financial Officer exercised reasonable diligence, the financial statements included in the Annual Report, fairly present, in all material respects all material in Report, fairly present, included in the Annual the financial statements diligence, reasonable exercised presented in the for the periods 2020 and 31, of March cash flows, as and of operations, results condition, the financial financial statements. to be either required is fact that a material fact, or omit to state material of any untrue statements do not contain SaskTel of under which it was made. the circumstances of not misleading in light a statement to make is necessary or that stated has designed internal controls authorities; and SaskTel legislative with applicable 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, 2020 were March as of reporting reporting. over financial the internal controls of operation b. That based on our knowledge, having exercised reasonable diligence, the financial statements included in the annual report included in the annual financial statements the diligence, reasonable exercised based on our knowledge, having b. That includes reporting, which over financial control internal effective establishing and maintaining for is responsible SaskTel c. That reporting over financial controls internal corporation’s of the the effectiveness of its assessment conducted SaskTel d. That a. That we have reviewed the financial statements included in the annual report of SaskTel. Based on our knowledge, having of SaskTel. report included in the annual the financial statements we have reviewed a. That Doug Burnett President and President Officer Chief Executive 2020 May 28, I, Doug Burnett, the President and Chief Executive Officer of Saskatchewan Telecommunications Holding Corporation (SaskTel), (SaskTel), Holding Corporation Telecommunications of Saskatchewan Officer and Chief Executive President Doug Burnett, the I, following: certify the of SaskTel, Officer the Chief Financial Charlene Gavel, and I, REPORT OF REPORTING MANAGEMENT FINANCIAL OVER ON INTERNAL CONTROL INDEPENDENT AUDITORS’ REPORT

To The Members of the Legislative Assembly, Province of Saskatchewan

Opinion We have audited the consolidated financial statements of Saskatchewan Telecommunications Holding Corporation (“the Corporation”) which comprise:

• the consolidated statement of financial position as at March 31, 2020 • the consolidated statement of income and other comprehensive income for the year then ended • the consolidated statement of changes in equity for the year then ended • the consolidated statement of cash flows for the year then ended • and notes to the consolidated financial statements, including a summary of significant accounting policies (Hereinafter referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated financial position of the Corporation as at March 31, 2020, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).

Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the “Auditors’ Responsibilities for the Audit of the Financial Statements” section of our auditors’ report.

We are independent of the Corporation in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information Management is responsible for the other information. Other information comprises:

• the information, other than the financial statements and the auditors’ report thereon, included in the annual report. Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit and remain alert for indications that the other information appears to be materially misstated.

We obtained the information, other than the financial statements and the auditors’ report thereon, included in the annual report as at the date of this auditors’ report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in the auditors’ report.

We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Corporation’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Corporation’s financial reporting process. CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED 64 | SASKTEL 2019/20 ANNUAL REPORT | 65

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether including the disclosures, the financial statements, of and content structure the overall presentation, Evaluate fair presentation. achieves the underlying transactions and events in a manner that represent the financial statements the and timing of the planned scope among other matters, regarding, with governance charged with those Communicate that we identify during our audit. control any significant deficiencies in internal audit and significant audit findings, including of the entities or business activities withininformation the financial regarding audit evidence Obtain sufficient appropriate supervision for the direction, responsible We are an opinion on the financial statements. to express Corporation the Group our audit opinion. for solely responsible remain audit. We the group of and performance Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related and related estimates accounting of and the reasonableness policies used accounting of the appropriateness Evaluate made by management. disclosures Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and due to fraud or error, whether statements, the financial of misstatement material risks of 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 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, Conclude on the appropriateness 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 Conclude on the appropriateness 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 concern. as a going to continue to cease may cause the Corporation events or conditions future However, auditors’ report. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the appropriate are that audit procedures to design to the audit in order relevant internal control Obtain an understanding of control. internal of the Corporation’s an opinion on the effectiveness expressing the purpose of but not for circumstances, • • • • • • • (“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 Chartered Professional Accountants Professional Chartered 2020 May 28, Regina, Canada 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, Consolidated Statement of Income and Other Comprehensive Income

For the year ended March 31, 2020 2019 Thousands of dollars Note Revenue 3 $ 1,283,670 $ 1,277,937 Other income 4 3,358 5,078 1,287,028 1,283,015

Expenses Goods and services purchased 543,448 553,152 Salaries, wages, and benefits 358,965 370,309 Internal labour capitalized (21,143) (23,741) Depreciation - property, plant and equipment 13 173,043 163,501 Depreciation - right-of-use assets 14 6,579 – Amortization 15 33,353 34,372 Impairment loss 15 10,660 – Saskatchewan taxes 5 27,211 27,073 1,132,116 1,124,666

Results from operating activities 154,912 158,349 Net finance expense 6 35,136 30,918

Net income 119,776 127,431

Other comprehensive income Items that will be reclassified to net income Sinking fund market value gains 16 4,129 4,026 Items that will never be reclassified to net income Net actuarial gains on employee benefit plans 25 713 165

Total other comprehensive income 4,842 4,191 Total comprehensive income $ 124,618 $ 131,622

All net income and total comprehensive income are attributable to Crown Investments Corporation of Saskatchewan.

See Accompanying Notes Consolidated Statement of Changes in Equity Accumulated other Equity comprehensive Total Thousands of dollars advances income Retained earnings equity Balance at April 1, 2019 $ 237,000 $ 104,362 $ 823,806 $ 1,165,168 Net income – – 119,776 119,776 Other comprehensive income – 4,842 – 4,842 Total comprehensive income – 4,842 119,776 124,618 Dividends declared – – 107,798 107,798 Balance at March 31, 2020 $ 237,000 $ 109,204 $ 835,784 $ 1,181,988

Balance at April 1, 2018 $ 250,000 $ 100,171 $ 811,063 $ 1,161,234 Net income – – 127,431 127,431 Other comprehensive income – 4,191 – 4,191 Total comprehensive income – 4,191 127,431 131,622 Dividends declared – – 114,688 114,688 Repayment of equity advance 13,000 – – 13,000 Balance at March 31, 2019 $ 237,000 $ 104,362 $ 823,806 $ 1,165,168 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED See Accompanying Notes 66 | SASKTEL 2019/20 ANNUAL REPORT | 67 – – – – 479 2019 6,721 6,774 9,123 5,121 14,475 25,815 24,880 56,984 44,598 20,878 20,089 41,547 57,289 15,019 237,000 104,362 823,806 446,165 161,883 193,295 176,021 281,020 139,057 278,122 1,165,168 1,496,935 2,662,103 1,003,280 2,662,103 1,854,690 $ $ $ $ 407 2020 6,493 8,891 12,913 37,592 22,577 25,448 55,978 15,173 74,887 43,351 58,349 17,221 22,341 45,953 61,548 16,735 15,371 237,000 109,204 835,784 833,065 150,302 712,216 276,464 188,851 271,486 142,860 423,291 123,603 1,181,988 1,625,263 2,807,251 1,904,655 2,807,251 $ $ $ $ 7 8 9 31 27 26 25 24 23 22 20 18 17 23 19 20 21 16 15 14 13 12 11 10 11 12 16 Note Glenys Sylvestre Accumulated other comprehensive income other comprehensive Accumulated earnings Retained Equity advance Trade and other payables and Trade Current portion of long-term debt portion of Current Dividend payable Notes payable Contract liabilities Other liabilities Cash Trade and other receivables Trade Inventories expenses Prepaid Contract assets Contract costs funds sinking portion of Current Commitments and contingencies equity Saskatchewan's of Province Provisions Employee benefit obligations Lease liabilities Long-term debt Deferred income – government funding Deferred Liabilities and Province's equity Liabilities and Province's liabilities Current Contract liabilities Other assets Sinking funds Intangible assets Right-of-use assets Right-of-use Property, plant and equipment Property, Assets assets Current Contract costs May 28, 2020 May 28, Grant Kook Grant Kook See Accompanying Notes See Accompanying the Board On behalf of Consolidated Statement of Financial Position of Financial Statement Consolidated 31, March As at dollars of Thousands Contract assets Consolidated Statement of Cash Flows

For the year ended March 31, 2020 2019 Thousands of dollars Note Operating activities Net income $ 119,776 $ 127,431 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 13, 14, 15 212,975 197,873 Net finance expense 6 35,136 30,918 Interest paid (52,504) (47,761) Interest received 6 9,443 8,755 Amortization of government funding 22 (5,765) (6,000) Impairment loss 15 10,660 – Other 1,523 4,736 Net change in non-cash working capital 28a (38,618) (23,660) 292,626 292,292

Investing activities Property, plant and equipment expenditures (223,580) (234,065) Intangible asset expenditures (35,073) (28,282) Government funding 22 2,633 – (256,020) (262,347)

Financing activities Proceeds from long-term debt 23, 28b 105,918 49,363 Net proceeds (repayment) of notes payable 28b (4,444) 50,226 Payment of lease liabilities 24, 28b (5,835) – Sinking fund instalments 16, 28b (12,915) (12,391) Repayment of equity advance – (13,000) Dividends paid 28b (107,230) (116,314) (24,506) (42,116)

Increase (decrease) in cash 12,100 (12,171) Cash, beginning of year 5,121 17,292 Cash, end of year $ 17,221 $ 5,121

See Accompanying Notes CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED 68 | SASKTEL 2019/20 ANNUAL REPORT | 69

COVID-19 impact assessment COVID-19 slowdown. The in an economic to businesses and has resulted disruption pandemic has caused material The COVID-19 of The magnitude and duration on its operations. COVID-19 monitor the impact of to has assessed and continues Corporation willof time, the impacts to the Corporation for an extended period disruption and, if it causes significant is uncertain COVID-19 or unavailable with a remote chain disruption, challenges associated supply revenue, impacts include loss of Potential increase. potential asset impairment. and workforce, 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. The accounting policies, estimates, and judgments included in this section relate to the consolidated financial statements as financial statements to the consolidated this section relate and judgments included in policies, estimates, The accounting assets and amounts of and expenses, reported revenue amounts of judgments may impact reported and a whole. Estimates contingencies. of liabilities, and disclosure 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 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 Notes to Consolidated Financial Statements Financial to Consolidated Notes General information Note 1 – The Corporation markets and supplies a range of wireless, voice, entertainment, internet, data, equipment, marketing, security, security, equipment, marketing, entertainment, internet, data, voice, wireless, of and supplies a range markets The Corporation and services. products and consulting software, One of the Corporation’s subsidiaries, Saskatchewan Telecommunications (SaskTel) is regulated by the Canadian Radio- is regulated (SaskTel) Telecommunications subsidiaries, Saskatchewan the Corporation’s One of (Canada). Act under the Telecommunications (CRTC) Commission television and Telecommunications , 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 and, as such, the Corporation and its wholly owned subsidiaries are not subject to Federal or Provincial income taxes income to Federal or Provincial not subject subsidiaries are and its wholly owned the Corporation Act and, as such, in Canada. 70 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES variability of returns from theCorporation’s involvementwiththeinvestee. members; therighttodirect theinvesteetoenterintotransactionsfor theCorporation’s benefit;andtheexposure, orrights,to other shareholders; theextentof participation bythoseshareholders inappointingkey managementpersonnel orboard activities of theinvestee.Consideration isgivento:votingrights;the relative size anddispersionof thevotingrightsheldby Judgment involvesassessingcontrol, whichentailsdeterminingwhethertheCorporation hasthepowertodirect therelevant Accounting estimates, andjudgments eliminated inpreparing theconsolidated financialstatements. Inter-company balances andtransactions,anyincome andexpensesarisingfrom inter-company transactions,are Transactions eliminated onconsolidation consolidated entity. Throughout thesefinancialstatements, thephrase“theCorporation” isusedto collectively describetheactivities of the 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 itspowerovertheentity. is exposedto,orhasrightsvariablereturns from itsinvolvementwiththeentityandhasabilitytoaffect those returns A subsidiaryisanentitythat iscontrolled byanotherentity, known astheparent. The Corporation controls anentitywhenit The consolidated financialstatements includethefinancialstatements ofthe Corporation anditssubsidiaries. Subsidiaries connection withabusinesscombination are expensedasincurred. Transaction costs, otherthanthoseassociated withtheissueof debtorequitysecurities,that theCorporation incursin its proportionate share of therecognized amountof theidentifiablenetassets, at theacquisitiondate. The Corporation electsonatransaction-by-transactionbasiswhethertomeasure non-controlling interest at itsfairvalue, orat gain isrecognized immediately innetincome. assets acquired and liabilitiesassumed,allmeasured asof theacquisitiondate. Whentheexcess isnegative, abargain purchase amount of anynon-controlling interest intheacquiree, lessthenetrecognized amount(generallyfairvalue)of theidentifiable For acquisitions,theCorporation measures goodwillasthefairvalueof theconsideration transferred, includingtherecognized Business combinations Accounting policies Basis of consolidation liability values. COVID-19 itisnotpossibletodetermineifthere are significantadditionalimpactsoncurrent operations or reported assetand Estimates of theseimpactshavebeenincludedwhere appropriate. Giventheuncertainty of themagnitudeandduration of 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 2019/20 ANNUAL REPORT | 71

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

The three levels of the fair value hierarchy are: the fair value hierarchy levels of The three Fair value Fair Accounting policies transaction between a liability in an orderly paid to transfer to sell an asset or would be received that value is the price Fair using another observable or estimated is directly price whether that of regardless date, the measurement participants at market Level 1, 2, or 3 based on the into categorized are reporting purposes, fair value measurements technique. For financial valuation of the inputs. The Corporation’s observable and the significance are to which the inputs to the fair value measurement degree fair value. measure techniques used to the inputs to valuation prioritizes fair value hierarchy The Corporation cannot predict if specific events that potentially trigger impairment will occur, when they may occur, or when they may occur, occur, potentially trigger impairment will if specific events that predict cannot The Corporation cash flow potential or significant unanticipated declines in future reported asset amounts. Unexpected how they may affect impairment. impact carrying values and the potential for technology changes could Accounting estimates, and judgments Accounting estimates, assessing value infor rate discount appropriate determining the asset or CGU; Judgment involves identifying the appropriate CGUs. or of the assets conditions over the long-term life flows and market cash use; and making assumptions about future An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior recognized other assets, impairment losses of In respect goodwill is not reversed. of An impairment loss in respect or no longer exists. An impairment decreased the loss has that any indications for date reporting each assessed at periods are An impairment loss amount. used to determine the recoverable has been a change in the estimates if there loss is reversed have been would the carrying amount that the asset’s carrying amount does not exceed only to the extent that is reversed been recognized. if no impairment loss had or amortization, depreciation determined, net of An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. recoverable its estimated exceeds an asset or its CGU if the carrying amount of An impairment loss is recognized reduce first to allocated are CGUs of in respect Impairment losses recognized net income. in recognized Impairment losses are the other assets in the the carrying amounts of to the units, and then to reduce any goodwill allocated the carrying amount of basis. rata units) on a pro of unit (group in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their discounted cash flows are future assessing value in use, the estimated to sell. In less costs in use and its fair value and the risksof money value of the time assessments market current reflects that rate discount value using a pre-tax present iscombination in a business acquired goodwill impairment testing, goodwill of For the purposes specific to the asset. asset belongs. to which the corporate the CGU amount is determined for then the recoverable may be impaired, For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group group together into the smallest grouped individually are cannot be tested that impairment testing, assets For the purpose of Accounting policies Accounting for useready not yet are that or intangible assets and goodwill) licences (i.e. spectrum life have an indefinite useful Assets that frequently more quarter), or in the third (typically impairment least annually for at tested and are to amortization not subject are reviews period, the Corporation reporting each At the end of be an impairment. may there indicate circumstances if events or intangible assets with finite plant and equipment, and identifiable including property, its assets in use, of the carrying amounts an impairment loss. they have suffered that is any indication there lives, to determine whether Note 2 – Basis of presentation, continued presentation, of 2 – Basis Note testing Impairment The Corporation’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate assetcorporate a that is an indication If there cash inflows. separate assets do not generate corporate The Corporation’s of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets of the cash inflows independent or largely are that continuing use from cash inflows generate assets that of its value of is the greater an asset or CGU of amount The recoverable unit or the CGU). assets (the cash-generating of groups This allocationcombination. of the the synergies from is expected to benefit that CGUs, of or the group to the CGU, allocated for internal goodwill is monitored at which that level the lowest test and reflects segment ceiling is subject to an operating purposes. reporting 72 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES related financialdisclosures. Additional significantaccounting policies,estimates, andjudgmentsare disclosedthroughout the following noteswiththe Additional accountingpolicies adopted for thecurrent year. Certain of the2018/19comparative information hasbeenreclassified to conform withthefinancialstatement presentation Comparative information at thedate of thetransaction. Non-monetary itemsthat are measured intermsof historicalcost inaforeign currency are translated usingtheexchange rate during theperiod,andamortized cost inforeign currency translated at theexchange rate at theendof thereporting period. between amortized cost inthefunctionalcurrency at thebeginningof theperiod,adjustedfor effective interest andpayments functional currency at theexchange rate at that date. Theforeign currency gainorlossonmonetaryitemsisthedifference of thetransactions.Monetaryassetsandliabilitiesdenominated inforeign currencies at thereporting date are translated tothe Transactions inforeign currencies are translated tothefunctionalcurrency of theCorporation at exchange rates at thedates Accounting policies Foreign currency transactions measurement and issubjecttoestimation andjudgment. Determination of thehierarchy levelisbasedontheCorporation’s assessmentof inputsthat are significanttothefairvalue defaults, andotherrelevant variables.Theestimates of fairvaluemaynotaccurately reflect theamountsthat could be realized. to differ. Inaddition,estimates may require assumptionsaboutfuture price, volatility, liquidity, discount andinflation rates, factors. Estimates canbedeterminedusingmultiplemethods,whichcausevalues(orarangeof reasonable values) Fair valueestimates are at apoint-in-timeandmaychangeinsubsequentreporting periodsduetomarket conditions orother Accounting estimates, andjudgments Note 2–Basisof presentation, continued Note 20 10 18 16 19 14 12 13 15 21 17 11 8 6 9 4 3 5 7 Net finance expense Contract assets Cash Saskatchewan taxes Sinking funds Intangible assets Right-of-use assets and equipment Property, plant Contract costs Inventories receivables Trade andother customers contracts with Revenue from Prepaid expenses Other income Notes payable payables Trade andother Other assets Contract liabilities Other liabilities Topic Accounting Accounting Policies X X X X X X X X X X X X X X Accounting Judgments Estimates and X X X X X X X X X Page 77 77 80 79 78 77 87 86 84 83 81 80 79 78 75 88 87 88 88 Note 30 28 29 26 24 22 23 32 25 27 31 funding – government Deferred income Long-term debt Lease liabilities contingencies Commitments and Employee benefits transactions Related party management and related risk instruments Financial obligations Future performance information flows –supporting statement of cash Consolidated capital disclosures Equity advance and Provisions Topic Accounting Policies X X X X X X Accounting Judgments Estimates and X X X X X X Page 105 106 107 101 89 89 91 99 92 98 97 SASKTEL 2019/20 ANNUAL REPORT | 73

, the standards in, the standards a Lease of Form the Legal Involving Transactions of the Substance and SIC 27 – Evaluating Operating Leases – Leases Operating (IFRIC 4), SIC 15 a Lease contains an Arrangement (IAS 17), IFRIC 4 Determining whether Leases effect at the time. The modified retrospective approach to adoption of IFRS 16 also requires that the cumulative effect the cumulative that requires of IFRS 16 also to adoption approach retrospective modified at the time. The effect initial of the date earnings at retained of adjustment to the opening balance initially applying IFRS 16 be applied as an of required; earnings were no adjustments to retained however, April 1, 2019, application, measured IAS 17, leases applying classified as operating leases previously lease liabilities for recognized has The Corporation the at rate borrowing incremental Corporation’s using the lease payments, discounted the remaining value of the present at and initial application; of date as classified leases previously for initial application of the date assets at right-of-use recognized has The Corporation or accrued adjusted by any prepaid the lease liability, an amount equal to at measured IAS 17, leases applying operating of the date before financial position immediately of in the statement lease recognized that to lease payments relating The Corporation has not restated comparative information. Comparative information continues to be reported under IAS to be reported continues information Comparative information. comparative has not restated The Corporation 17 Incentives, initial application. has applied leases. The Corporation which transactions are the assessment of elected to grandfather has The Corporation not identified as leases under IAS 17 were identified as leases. Contracts that previously were that IFRS 16 only to contracts a lease under IFRS 16 was appliedof the definition is a lease. Therefore, whether there for not reassessed and IFRIC 4 were April 1, 2019, or changed on or after into entered only to contracts of the date at assets the right-of-use of the measurement from costs initial direct elected to exclude has The Corporation and initial application; elected to use hindsight, most specifically in determining the lease term. has The Corporation b) c) a) a) b) c) (IFRS 16) with a date of initial application of April 1, 2019. In accordance with the In accordance April 1, 2019. of initial application of (IFRS 16) with a date has adopted IFRS 16 Leases The Corporation In accordance approach. retrospective IFRS 16 using the modified has applied Corporation the IFRS 16, of transitional provisions adoption: with the method of Adoption of IFRS 16 Leases of Adoption of lease payments treatment in of financial position, the impacts on the statement IFRS 16 has had significant of The application cash flows.of lease payments on the statement and the impact of income, and other comprehensive income of the statement set out below. impacts are the significant changes and the quantitative The details of is the lessee the Corporation Leases where requires IFRS 16 as an expense as incurred. recognized leases were classified as operating leases previously payments for Lease and use received the right of for recognized leases. Assets are of to the presentation approach lessees to adopt a uniform in had been classified as operating that all leases. Leases into for entered the payment obligations for recognized liabilities are upon transition The lease liabilities, lease liability. asset and a related as a right-of-use now recorded with IAS 17 are accordance using the Corporation’s lease payments, discounted the remaining value of as the present have been recognized to IFRS 16, lease liabilities will be determined based on the Future is first applied. the time the standard at rate borrowing incremental the Corporation’s implicit in the lease or rate either the interest at lease payments discounted the future value of present guarantees, residual for determinable, adjusted, as appropriate, is not if the implicit lease rate rate borrowing incremental of the amount at assets upon transition have been measured penalties. The right-of-use options, and termination purchase based on the assets will be determined right-of-use transition. Future at the lease liability plus any payments made or accrued costs, initial direct lease payments, lease incentives, or accrued prepaid for the lease liability adjusted, as appropriate, amount of obligations. and asset retirement Note 2 – Basis of presentation, continued presentation, of 2 – Basis Note Standards Reporting Financial International new of Application was that standard issued the following Committee (IFRIC) Interpretations Financial Reporting the International The IASB and the Corporation. applied by expedients: to apply the following has elected the Corporation In adopting IFRS 16, these short-term or low-value leases; however, for exemption has not elected the recognition On transition, the Corporation leases, and a new asset classes which include short-term on a class-by-class basis for may be adopted in the future exemptions low-value leases. lease-by-lease basis for 74 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Thousands of dollars For theyearendedMarch 31,2020 Impact onnetincome The impactsof adoptionof IFRS16are asfollows: The accounting requirements for theCorporation asalessorremain largely unchanged. Leases where theCorporation isthelessor operations andacorresponding declineincashflowsfrom financingactivities. depreciation of right-of-use assetsandinterest expenseonleaseliabilitiesalsoresulted inanimprovement incashflowsfrom to recognition of additionalinterest expenserelated toleaseliabilities.Thechangeinpresentation of operating leaseexpenseto expense; anincrease indepreciation duetodepreciation of theright-of-use assets;andanincrease tonetfinance expensedue The adoptionof IFRS16hasalsoresulted in:adecrease togoodsandservices purchased for theremoval of leaserent Note 2–Basisof presentation, continued Other income Revenue Goods andservices purchased Expenses Depreciation -right-of-use assets All otherexpenses Results from operating activities Net financeexpense Net income Province of Saskatchewan’s equity Other liabilities Lease liabilities Other liabilities Current liabilitiesnotimpacted Current liabilities Liabilities andProvince's equity Other assets Right-of-use-assets Current assets Assets Thousands of dollars As at March 31,2020 Impact onthestatement of financialposition $ $ $ $ Excluding the Excluding the 2,340,609 impacts of 2,763,900 1,182,732 1,581,168 2,763,900 697,043 875,455 708,233 423,291 IFRS 16 11,190 (2,520) –

IFRS 16at date $ $ $ $ $ $ Excluding the of adoption impacts of 1,283,670 1,287,028 1,132,487 Impact of 550,398 582,089 154,541 120,520 IFRS 16 34,021 47,310 47,310 47,310 41,275 47,310 3,358 6,035 6,035 – – – – – –

$ $ $ $ Current period $ $ Impact of impact of IFRS 16 IFRS 16 (3,959) (2.052) (2.052) (6,950) (3,959) (3,215) (1,163) (3,959) 6,579 1,115 (371) (744) (744) 371 – –

– – – – – – upon adoptionof $ $ $ $ upon adoption $ $ As reported As reported of IFRS16 1,283,670 1,287,028 1,132,116 2,807,251 1,181,988 1,625,263 2,340,609 2,807,251 543,448 582,089 154,912 119,776 875,455 712,216 697,043 423,291 IFRS 16 35,136 43,351 15,173 37,592 3,358 6,579

SASKTEL 2019/20 ANNUAL REPORT | 75

35,136 (5,835) 292,626 212,975 119,776 (18,671) (24,506) (52,504) (22,757) of IFRS 16 of As reported As reported $ $ upon adoption upon adoption – – (744) 5,835 6,579 1,115 Effective Date Effective Prospectively for fiscal years for Prospectively on or aftercommencing January 1, 2020 (5,835) (5,835) (1,115) IFRS 16 Impact of

$ $

– 34,021 IFRS 16 (18,671) (18,671) (22,757) (51,389) 286,791 206,396 120,520 impacts of impacts of Excluding the the Excluding $ $ Impact The amendments to IFRS 3 – Business Combinations accounted acquisitions are future whether may affect or asset acquisitions, as business combinations for the purchase of allocation along with the resulting between the net identifiable assets acquired price and goodwill. Description The amendments to the implementation of IFRS 3 clarify the definition of guidance a business to assist entities to determine whether as a for a transaction should be accounted or an asset acquisition. business combination Net finance expense Net finance Interest paid Interest Depreciation and amortization and amortization Depreciation Standard IFRS 3 - Business combinations Other financing activities Financing activities lease liabilities Payment of Other adjustments and net change in non-cash working capital Other adjustments and Adjustments to reconcile net income to cash provided by operating activities: by operating to cash provided net income Adjustments to reconcile Operating activities Operating Net income 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 Contract assets are 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 assets 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 and liabilities relating For multiple element arrangements, the Corporation accounts for individual products and services when they are separately when they are and services individual products for accounts For multiple element arrangements, the Corporation consideration on its own. The total arrangement product or service is from the identifiable, and the customer can benefit Stand- with the customer based on its stand-alone selling price. included in the contract or service to each product allocated separately sells products which the Corporation at prices generally determined based on the observable are alone selling prices for market adjusted of services, with the same range offerings service non-bundled for and prices contract without a service the Corporation not sold separately, are and services When similar products and other factors, as appropriate. conditions by a purchased and services Products to determine stand-alone selling prices. approach plus margin uses the expected cost separately. for accounted those included in the bundled arrangement are of customer in excess Revenue is measured based on the value of the expected consideration in a contract with a customer and excludes sales with a customer and excludes in a contract the expected consideration based on the value of is measured Revenue is or service a product of when control is recognized parties. Revenue third on behalf of and other amounts collected taxes with the value directly a customer corresponds from right to consideration When the Corporation’s to a customer. transferred in the amount to which revenue recognizes the Corporation to date, transferred and services the products to the customer of has a right to invoice. the Corporation Note 3 – Revenue from contracts with customers Note 3 – Revenue Accounting policies Amendments to standards not yet adopted Operating lease commitments at March 31, 2019 were $35.3 million. The difference between the operating lease commitments lease between the operating million. The difference $35.3 31, 2019 were March at lease commitments Operating million related $21.4 of April 1, 2019 is mainly due to an increase million at $47.3 liabilities of 31, 2019 and the lease March at lease future of to discounting million related $9.4 of and a reduction to be exercised certain options reasonably to renewal 2.48%. on adoption of rate borrowing incremental payments based on a weighted average 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, 2020 ended March For the year 76 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES contract orbasedonspecifieddeliverables withinthe contract. product orservice; andfor professional service contracts andmultipleelementcontracts, eitherupon completion of the in accordance withthetermsof thecontract withthecustomer:for perpetuallicences, typicallyupondeliveryof therelated method. Amountsbilledorpaidinadvance of services provided are recorded as contract liabilities.Customerpaymentsare due 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 withtheassessment arrangement includesmultipleelements,theelementsare assessedtodetermine whichelementsare integraltothe Revenue for perpetuallicences isrecognized ondelivery oraccording tothetermsof thelicence agreement. Where the payments are duemonthlyastheservices are provided. date. Amountsbilledinadvance for marketing services are deferred andrecognized overtheterm of thecontract. Customer with thecontractual termswiththeadvertisers,onamonthlybasis overthelife 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 extend uptofiveyears. where abillingschedulehasbeenestablishedwithcertain businesscustomers underlong-termcontracts that cangenerally For wireline customers,products are usuallypaidinfullat thepointof saleandservices are paidonamonthlybasisexcept factors, asappropriate, ortheexpectedcost plusmargin approach for customized businessarrangements. arrangements, stand-alonesellingprices are determinedusingobservableprices adjustedfor market conditions andother methods basedonproducts delivered, performance completed todate, timeelapsed,ormilestonesmet.Formultipleelement recognized overtime,astheservices are provided. Revenue oncertain long-term contracts isrecognized usingoutput Revenue from thesaleof equipmentisrecognized whenacustomertakes possessionof theproduct. Service revenue is resellers andothercarriers. Revenue alsoincludesamountsfrom theCorporation’s wholesalebusiness,whichsellstelecommunication services from orto distance, andsecurityservices aswellothercommunications services andproducts toresidential andbusinesscustomers. Revenue isalsogenerated from providing data, includinginternetaccess andinternetprotocol local,long television(IPTV), over acontract termof upto24 monthsfor residential customersandupto36monthsfor businesscustomers. a monthlybasisfor services. Forwireless products andservices soldinmultipleelementarrangements,customers paymonthly For wireless products andservices that are soldseparately, customersusuallypayinfullat thepointof salefor products andon as appropriate. stand-alone sellingprices are determinedusingobservableprices adjustedfor market conditions andotherfactors, product. Wireless service revenue isrecognized overtime,astheservices are provided. Formultipleelementarrangements, Equipment revenue from thesaleof wireless handsetsanddevices isrecognized whenacustomertakes possessionof the and services toresidential andbusinesscustomers. Wireless revenue isprincipallygenerated from providing integrated digitalwireless voice anddata communications products 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 obtainingacontract withacustomer, principallycomprised of salescommissions andprepaid contract customers. Otherwise,theCorporation recognizes thenetamountthat theCorporation retains asrevenue. Corporation actsastheprincipalinthesearrangements,Corporation recognizes revenue basedontheamountsbilledto The Corporation mayenterintoarrangementswithsubcontractors andotherswhoprovide services tocustomers.Whenthe Note 3–Revenuefromcontracts withcustomers,continued

SASKTEL 2019/20 ANNUAL REPORT | 77 2019 2019 2019 4,853 5,078 6,000 7,078 6,620 (5,775) 27,073 34,655 19,995 28,903 33,043 30,253 35,218 564,993 361,794 182,458 1,277,937 $ $ $ $ $ $ 2020 2020 2020 3,358 1,400 5,765 7,058 8,224 27,211 20,153 43,811 32,428 29,537 27,768 23,164 (3,807) 575,799 377,896 165,043 1,283,670 $ $ $ $ $ $ 22 Note

Other Amortization of government funding of Amortization Wireless network services and equipment network services Wireless plant and equipment property, or disposal of Net loss on retirement Other services service, internet, and data services data internet, and service, maxTV services and enhanced Local Security monitoring services Long distance services distance Long services Marketing services Equipment and professional services and consulting software International Finance expenses are composed of interest expense on financial liabilities and lease liabilities measured at amortized cost, at amortized expense on financial liabilities and lease liabilities measured interest of composed expenses are Finance expense on the net or loss, the net interest profit financial assets classified as fair value through changes in the fair value of are directly costs that Borrowing provisions, less amounts capitalized. expense on accretion and defined benefit liability, asset. Other that of the cost part of a qualifying asset form of or production to the acquisition, construction, attributable as an expense. recognized are costs borrowing 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 or loss, and net interest 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 Revenue Other income (loss) capital tax corporate Saskatchewan Note 4 – Other income 31, For the year ended March dollars Thousands of For the year ended March 31, For the year ended March dollars Thousands of Grants-in-lieu of taxes Grants-in-lieu of Supporting information The Corporation is required to make judgments and estimates that affect the amount and timing of revenue from contracts revenue from of timing the amount and affect that and estimates judgments to make is required The Corporation and services, products of transaction price to; determining the related and judgments including estimates with customers, contract, within a obligations of performance identification services, and products of prices the stand-alone selling determining of distinct, and the timing is considered goods or services to deliver a promise whether of the determination including including to obtain a contract costs of determination The contracts. under long-term obligations performance of satisfaction costs meet the deferral This includes determining whether the judgment. requires costs also of incremental the identification will be recoverable. the costs criteria and whether Note 3 – Revenue from contracts with customers, continued with customers, contracts from 3 – Revenue Note judgments and estimates, Accounting 78 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES for doubtful accounts willbeincreased byrecording anadditional expense. expected collection trends. Ifeconomic conditions orspecificindustrytrends become worsethananticipated, theallowance are basedonthelikelihood of collecting accounts receivable based onpastexperience, takingintoconsideration current and Determining whenamountsare deemeduncollectible requires judgment.Estimates of theallowance for doubtfulaccounts Accounting estimates, andjudgments Corporation infull. Corporation considers accounts receivable tobeindefaultwhentheborrower isunlikely topayitscredit obligations tothe based ontheCorporation’s historicalexperience andinformed credit assessment,includingforward-looking information. The is relevant andavailablewithoutunduecost oreffort. Thisincludesbothquantitative and qualitative information andanalysis, When estimating lifetime expectedcredit loss(ECL), theCorporation considers reasonable andsupportableinformation that The allowance for doubtfulaccounts ontradeandotherreceivables are alwaysrecorded at lifetime expectedcredit losses. provision for impairmentlossesof tradeaccounts receivable. to initialrecognition, tradeandotherreceivables are measured at amortized cost usingtheeffective interest method,lessany The Corporation initiallyrecognizes trade andotherreceivables at fairvalueonthedate that theyare originated. Subsequent Accounting policies Note 8–Trade andotherreceivables interest method. The Corporation classifiescash,includingamountswithamaturity of 90daysorless, at amortized cost usingtheeffective Accounting policies Note 7–Cash Note 6–Netfinanceexpense,continued Interest capitalization rate Net financeexpense Finance income Finance expense Net interest expense Interest capitalized Interest onshort-termdebt Interest onlong-termdebt Recognized inconsolidated netincome Thousands of dollars For theyearendedMarch 31, Interest income Sinking fundearnings Interest onprovisions Net interest ondefinedbenefitliability Interest onleaseliabilities Note 16 26 25 24 $ $ (14,868) (5,425) (9,443) (4,239) 50,004 35,136 48,404 49,907 3.99% 1,115 2,736 2020 221 264 $ $ (12,795) 30,918 43,713 (4,040) (8,755) 43,226 46,562 (5,842) 4.16% 2,506 2019 244 243 – SASKTEL 2019/20 ANNUAL REPORT | 79 965 2019 2019 2019 1,155 2,456 1,865 (2,396) 19,124 20,089 40,392 41,547 27,040 110,092 139,057 110,152 $ $ $ $ $ $ $

715 683 2020 2020 1,063 2020 14,656 44,890 15,371 45,953 2,190 29,741 (2,606) 112,852 142,860 112,436 $ $ $ $ $ $ 29 29 Note Customer accounts receivable Customer accounts Allowance for doubtful accounts for Allowance Other Accrued receivables – customer receivables Accrued High-cost serving area subsidy serving area High-cost Inventories for resale Inventories for expenses Prepaid Materials and supplies Materials Short-term customer incentives As at March 31, March As at dollars Thousands of Note 10 – Prepaid expenses Accounts receivable million). (2018/19 – $0.2 For the year ended March 31, 2020, writedowns of inventory to net realizable value amounted to $0.2 million value amounted to $0.2 inventory to net realizable of writedowns 31, 2020, For the year ended March As at March 31, March As at dollars Thousands of million). million (2018/19 – $75.9 as an expense during the year was $68.5 inventories recognized of The cost Supporting information In establishing the appropriate provision for supplies inventory obsolescence, management estimates the likelihood that the likelihood management estimates obsolescence, supplies inventory for provision In establishing the appropriate when to inventory charged are Other supplies obsolete due to changes in technology. supplies inventory on hand will become when used. and expensed or capitalized purchased and judgments Accounting estimates, value. net realizable of measure Judgment involves determining the appropriate Note 9 – Inventories Accounting policies and supplies materials value. Other and net realizable weighted average cost the lower of valued at are resale Inventories for cost. and replacement average cost lower of the valued at inventories are As at March 31, 31, March As at dollars of Thousands Note 8 – Trade and other receivables, continued receivables, other and 8 – Trade Note information Supporting 80 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES satisfaction of performance obligations underrelated contracts. includes determining whetherthecosts meetthe deferral criteria,whetherthecosts will be recoverable andthetiming of The determination of costs toobtainacontract including theidentification of incremental costs also requires judgment. This The Corporation isrequired tomake judgmentsandestimates that affect theamountandtiming of costs to obtaina contract. Accounting estimates, andjudgments of therelated products orservices whichistypicallybetweentwoand10years. Capitalized costs are amortized onasystematic basisthat isconsistent withtheperiodandpattern of transfer tothecustomer fulfillment costs are recognized inthestatement of financialposition. Incremental costs of obtainingacontract withacustomer, principallycomposed of sales commissions, andprepaid contract Accounting policies Note 12–Contractcosts Long-term portion Current portion Balance at March 31, Impairment allowance Contract terminations transferred totradereceivables Amortization of contract assets Contract assetsrecognized inthecurrent period Balance at April1, Thousands of dollars As at March 31, Supporting information will beincreased byrecording anadditionalexpense. collection trends. Ifeconomic conditions orspecificindustrytrends become worsethananticipated, theimpairment allowance collecting therelated accounts receivable, whichisbasedonpastexperience, takingintoconsideration current andexpected amounts are deemeduncollectible requires judgment.Estimates of theimpairmentlossesare basedonthelikelihood of distinct, andthetimingof satisfaction of performance obligations underlong-termcontracts. Inaddition,determiningwhen obligations withinacontract, includingthedetermination of whetherapromise todelivergoodsorservices isconsidered judgments includeestimates of thestand-alonesellingprices of products andservices, theidentification of performance with customers,whichalsoimpactsthedetermination of contract assetsandtheamortization of theseassets.Estimates and The Corporation isrequired tomake judgmentsandestimates that affect theamountandtiming of revenue from contracts Accounting estimates, andjudgments the credit riskon afinancialassethasincreased significantlyifitismore than30dayspastdue. Corporation’s historicalexperience andinformed credit assessment,includingforward-looking information. Itisassumedthat without unduecost oreffort. Thisincludesbothquantitative andqualitative information andanalysis,basedonthe expected credit loss (ECL), theCorporation considers reasonable andsupportableinformation that isrelevant andavailable The allowance for impairmentlossesoncontract assetsisalwaysrecorded at lifetime expectedcredit losses.Whenestimating two tofour years. Amortization isrecognized innetincome consistent withthepattern of deliveryof therelated goodsandservices, rangingfrom and liabilitiesrelating tothesamecontract are presented onanetbasis. recognized whenconsideration isreceived inadvance of thetransfer of products orservices tothecustomer. Contractassets receivables whentherighttoconsideration becomes conditional onlyastothepassageof time.Acontract liabilityis a customerisconditional ontheobligation totransfer otherproducts orservices. Contractassetsare transferred totrade A contract assetisrecognized whentheCorporation’s righttoconsideration from thetransfer of products orservices to Accounting policies Note 11–Contractassets $ $ (76,665) 167,870 (1,461) (5,855) 22,341 61,548 83,889 85,350 88,767 79,103 2020 $ $ 157,611 (71,462) 20,878 78,843 57,289 78,167 79,103 78,768 (7,046) 2019 (936)

SASKTEL 2019/20 ANNUAL REPORT | 81 (884) 2019

53,978 23,683 77,661 59,617 15,019 44,598 (17,160)

$ $ (735) 2020 59,617 75,084 34,269 93,886 16,735 58,349 (18,067) $ $ 3–17 years 3–50 years 20-75 years Estimated useful life Estimated continued Asset Buildings and improvements and equipment furniture Office Plant and equipment Depreciation is recognized in net income on the straight-line basis over the estimated useful life of each part of an item of each part of of useful life on the straight-line basis over the estimated in net income is recognized Depreciation plant and equipment as follows: property, Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less cost, an asset, or other amount substituted for of amount, which is the cost over the depreciable is calculated Depreciation value. its residual 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 plant and 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 associated with major capital and development projects are capitalized during the construction period. Assets under construction period. during the construction capitalized are capital and development projects with major associated to the appropriate transferred which time they are use, at and available for operational they are until progress as in recorded are asset. class of 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, intended use. The their for to bringing the assets to a working condition attributable directly are that Cost includes expenditures costs Borrowing costs. attributable and directly labour, direct services, assets includes materials, self-constructed of cost As at March 31, March As at dollars of Thousands , costs 12 – Contract Note information Supporting Balance at April 1, April Balance at 31, March Balance at Contract costs recognized Contract costs purchased goods and services included in Amortization Terminations portion Current Long-term portion 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 and judgments Accounting estimates, timing for appropriate costs); (e.g., labour and related attributable directly are Judgment involves determining: which costs by normally predetermined in which the asset is to be operated, the circumstances considering capitalization, cost of cessation which for individual components (for componentization level of to functionality; the appropriate management with reference resulting in constitute betterments, repairs and maintenance which appropriate); are methods or rates depreciation different and the method be depreciated; should over which such costs useful life the estimated or functionality; extended asset life of depreciation. of 82 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Supporting information impairments orchangestodepreciation expenseinfuture periods,particularlyifusefullivesare significantly reduced. of future technologies.Changesintheseassumptionscould result inmaterial adjustmentstoestimates, whichcould result in 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. accounted for bychangingthedepreciation periodormethodasappropriate, andare treated as changesin in theexpectedusefullife ortheexpectedpattern of consumption of future economic benefitsembodiedintheassetare Asset residual values andusefullivesare reviewed and adjustedifappropriate, at theendof eachreporting period.Changes Note 13–Property, plant andequipment, continued Balance at April1,2019 Accumulated depreciation Balance at March 31,2019 Retirements, disposals,andadjustments Transfers Additions Balance at April1,2018 Balance at March 31,2020 Retirements, disposals,andadjustments Balance at March 31,2020 Retirements, disposals,andadjustments Depreciation Transfers At March 31,2019 At April1,2019 amounts Carrying Balance at March 31,2019 Retirements, disposals,andadjustments Depreciation Balance at April1,2018 Additions Balance at April1,2019 Cost At April1,2018 At March 31,2020 Thousands of dollars $ $ $ $ $ $ $ $ $ $ $ $ equipment 3,639,106 2,281,955 2,376,967 3,537,767 1,262,139 1,255,812 3,537,767 3,468,486 1,255,812 1,160,555 2,281,955 2,307,931 Plant and (160,434) (154,817) (39,367) (40,194) 135,206 165,720 128,841 63,995 81,447 59,259 $ $ $ $ $ $ $ $ $ $ $ $ improvements Buildings and Buildings and 587,515 181,497 195,695 575,017 391,820 393,520 575,017 519,868 393,520 351,156 181,497 168,712 (2,305) (1,219) 15,417 14,803 50,690 13,352 4,459 (567) – - furniture and $ $ $ $ $ $ $ $ $ $ $ $ equipment (53,171) (48,027) 153,572 113,330 176,534 176,534 167,649 (18,519) 113,330 110,542 (18,520) 21,592 22,420 87,723 65,849 63,204 16,859 10,545 21,308 63,204 57,107 Office 8,617 construction Plant under $ $ $ $ $ $ $ $ $ $ $ $ (104,867) (226,721) 145,124 103,484 146,507 145,124 103,484 157,985 103,484 172,220 103,484 172,220 – – – – – – – – – – $ $ $ $ $ $ $ $ $ $ $ $ 39,723 38,670 39,723 38,670 38,670 38,489 38,670 38,489 1,055

Land (234) 419 (2) (4) – – – – – – – – – $ $ $ $ $ $ $ $ $ $ $ $ 4,565,040 2,576,782 2,660,385 4,431,472 1,904,655 1,854,690 4,431,472 4,366,712 1,854,690 1,779,527 2,576,782 2,587,185 (174,498) (173,904) (94,845) (89,440) 173,043 228,413 239,258 163,501 Total – – SASKTEL 2019/20 ANNUAL REPORT | 83

– (29) Total 3,814 6,579 6,550 47,310 49,901 47,310 43,351 (1,223) $ $ $ $ $ $ – – 307 658 658 Land 9,683 8,879 9,683 8,221 (1,111) $ $ $ $ $ $ – – – 288 2,578 2,578 27,436 27,724 27,436 25,146 Buildings and $ $ $ $ $ $ improvements – (29) (112) 3,219 3,343 9,984 3,314 10,191 13,298 10,191 Plant and equipment $ $ $ $ $ $ the amount of the initial measurement of the lease liability; of the initial measurement the amount of received; less any lease incentives date, the commencement or before at lease payments made by the lessee; and incurred costs initial direct the site on restoring the underlying asset, dismantling and removing by the lessee in to be incurred costs of an estimate the lease, of the terms and conditions by required to the condition the underlying asset or restoring which it is located the at either those costs for inventories. The lessee incurs the obligation to produce incurred are unless those costs asset during a particular period. having used the underlying of or as a consequence date commencement • • • • Thousands of dollars Thousands of Cost April 1, 2019 Balance at Additions Retirements, disposals, and adjustments disposals, and adjustments Retirements, Balance at March 31, 2020 March Balance at depreciation Accumulated April 1, 2019 Balance at Depreciation Retirements, disposals, and adjustments Retirements, Carrying amounts April 1, 2019 At 31, 2020 March At Balance at March 31, 2020 March Balance at Supporting information the right-of-use asset, and estimation of the useful lives of right-of-use assets. right-of-use the useful lives of of and estimation asset, the right-of-use Estimation involves determination of the lease payments to be included in the lease liability, estimation of the incremental the incremental of estimation in the lease liability, the lease payments to be included of involves determination Estimation of additional amounts to be included in the determination of estimation as appropriate, rate or implicit lease rate borrowing Judgments include determining whether a contract contains an identifiable asset, assessing control of assets in a contract,of assets in a control assessing an identifiable asset, contains a contract Judgments include determining whether terms, and determining whether lease and cancellation renewal assessment of determining the lease term including the to existing leases or new leases. result in changes modifications The Corporation is required to make estimates and judgments that affect or impact the determination of right-of-use assets of right-of-use the determination or impact affect and judgments that estimates to make is required The Corporation depreciation. and the related Right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease to the earlier of the end the earlier of the lease to of date the commencement on a straight-line basis from depreciated assets are Right-of-use the asset expects to obtain ownership of the lease term, unless the Corporation or the end of the asset of the useful life of reasonably are options that lease term, renewal the non-cancellable of the lease term. The lease term consists the end of at expected to be exercised. not reasonably are options that and termination expected to be exercised and judgments Accounting estimates, Right-of-use assets are initially measured at cost. The cost of the right-of-use asset includes: asset the right-of-use of The cost cost. at initially measured assets are Right-of-use and depreciation less any accumulated cost at assets the right-of-use measures the Corporation After the initial recognition, revised or modifications the lease liability due to lease of any remeasurement impairment losses; adjusted for any accumulated lease payments. fixed in-substance Note 14 – Right-of-use assets Right-of-use – 14 Note policies Accounting based on the a lease, is, or contains, the contract assesses whether Corporation the a contract, of At the inception contract within a components Lease time. of a specified period for an identified asset the use of right to control Corporation’s or one contain that contracts For the contract. of non-lease components the from a lease separately as for accounted are on the stand-alone based component to each is allocated the consideration components, lease or non-lease additional more components. and non-lease the lease of price 84 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES groups of CGUs expectedtobenefitfrom thebusiness combination inwhichthegoodwillarose. monitored bymanagement,andnotat alevelhigherthananoperating segment.The allocation ismadetothoseCGUs or Goodwill isallocated toCGUs orgroups of CGUs for thepurposeof impairmenttestingbasedonthelevelat whichitis account bychangingtheamortization periodormethod,asappropriate). in accounting estimates canresult from changes inusefullife ortheexpectedpattern of consumption of anasset(taken into Estimation isappliedtodetermineexpectedusefullivesusedintheamortization of intangibleassetswithfinitelives.Changes accumulated impairmentlosses. factors change,theclassification of indefinite-life willbe reassessed.Spectrumlicences havebeen recorded at costlessany significant of whichare minimal renewal fees andno regulatory precedent of material licence revocation. Shouldthese Spectrum licences havebeenclassifiedasindefinite-life intangibleassetsdueto thecurrent licencing terms,themost for cessation of cost capitalization, andclassification of certain intangibleassetsasindefinite-life intangibleassets. Judgment isappliedtodetermineexpenditures eligiblefor capitalization, themethodof amortization, theappropriate timing Accounting estimates, andjudgments Amortization isrecognized innetincome onastraight-linebasisovertheestimated usefullivesof theassets asfollows: losses. Goodwillisnotamortized. recognition, seeNote2–Basisof presentation. Subsequently, goodwillismeasured at cost lessanyaccumulated impairment Goodwill that arisesupontheacquisitionof subsidiariesisincludedinintangibleassets.Formeasurement of goodwillat initial gaining newscientificortechnicalknowledgeandunderstanding,are recognized asanexpenseincurred. Costs associated withmaintainingsoftware aswellexpenditures onresearch activities,undertaken withtheprospect of Capitalized software ismeasured at cost lessaccumulated amortization andanyaccumulated impairmentlosses. income asincurred. costs related tothedevelopmentof qualifyingassetsare capitalized. Otherdevelopmentexpenditures are recognized innet of materials, direct labour, andrelated costs that are directly attributable topreparing theassetfor itsintendeduse.Borrowing has sufficient resources to completedevelopmentandtouseorselltheasset.Theexpenditures capitalized includethe cost process istechnicallyandcommercially feasible, future economic benefitsare probable, andtheCorporation intendstoand processes. Developmentexpenditures are capitalized onlyifdevelopmentcosts canbemeasured reliably, theproduct or Software developmentactivitiesinvolveaplanordesignfor theproduction of neworsubstantiallyimproved products and asset canbemeasured reliably. probable that theexpectedfuture economic benefits attributable totheassetwillflowCorporation andthe cost ofthe and goodwill.Internallygenerated intangibleassetsrelate primarilytosoftware. Anintangibleassetisrecognized whenitis Intangible assetsare recorded initiallyat cost of acquisitionordevelopmentandrelate primarilytosoftware, spectrumlicences, the Corporation. Anassetmeetstheidentifiabilitycriterionwhenitisseparableorarisesfrom contractual rights. Intangible assetsare defined asbeingidentifiable,abletobringfuture economic benefitstotheCorporation, and controlled by Accounting policies Note 15–Intangibleassets Software Asset Estimated usefullife 1–10 years SASKTEL 2019/20 ANNUAL REPORT | 85 – – Total (283) (283) 8,283 6,755 4,684 20,695 (5,845) (5,857) 34,372 27,724 33,353 (5,976) 522,137 235,735 264,250 286,402 545,270 281,020 545,270 573,490 271,486 302,004 281,020 264,250 $ $ $ $ $ $ $ $ $ $ $ $ – – – – – – – – – – – – 961 2,339 2,199 2,199 2,199 2,199 Under Under 12,277 16,952 12,277 10,945 12,172 12,172 (1,933) (29,369) $ $ $ $ $ $ $ $ $ $ $ $ development – – – – – – – – – – – – – – – – – 12,167 108,738 108,738 108,738 108,738 108,738 120,905 120,905 108,738 licences Spectrum $ $ $ $ $ $ $ $ $ $ $ $ – (283) (283) 3,743 5,944 4,612 5,794 1,933 4,684 (5,845) 29,369 (5,857) 34,372 33,353 395,146 235,735 264,250 159,411 428,357 164,107 428,357 440,413 138,409 302,004 164,107 264,250 Software $ $ $ $ $ $ $ $ $ $ $ $ – – – – – – – – – – – – – – – – – – – 5,976 5,976 5,976 5,976 5,976 5,976 (5,976) Goodwill $ $ $ $ $ $ $ $ $ $ $ $ Management has applied the value-in-use valuation methodology for the CGU using the Board-approved 2021– 2025 using the Board-approved the CGU methodology for Management has applied the value-in-use valuation included in the cash flow CGU cash flows were The expected risk to the financial plan, as well as terminal value capitalization. of capitalcost value using the weighted average to the present then discounted cash flows were The resulting projections. applicable to the CGU. Impairment testing for the cash-generating unit containing goodwill and recoverability testing of finite-life intangible assets finite-life testing of unit containing goodwill and recoverability Impairment testing for the cash-generating under development million (2018/19 – $0.4 assets under development, $0.3 finite-life impairment testing, goodwill, a portion of For the purpose of This is the lowest Directwest. to one CGU: allocated million) are million (2018/19 – $9.4 $3.7 software, million) and a portion of purposes, which is not higher than the internal management for is monitored which goodwill at level within the Corporation segments. operating Corporation’s Thousands of dollars of Thousands Note 15 – Intangible assets, continued assets, 15 – Intangible Note information Supporting Acquisitions Acquisitions – internally developed Acquisitions – internally Cost 1, 2019 April Balance at Transfers Balance at April 1, 2018 at Balance Impairment loss Retirements, disposals, and adjustments disposals, Retirements, 31, 2020 March Balance at Acquisitions Acquisitions – internally developed Transfers At April 1, 2018 Retirements, disposals, and adjustments Retirements, April 1, 2018 at Balance Balance at March 31, 2019 March at Balance Amortization At March 31, 2020 March At Balance at March 31, 2020 March Balance at Impairment loss Retirements, disposals, and adjustments Retirements, Amortization Retirements, disposals, and adjustments Retirements, 31, 2019 March at Balance Carrying amounts April 1, 2019 At At March 31, 2019 At March Accumulated amortization Accumulated April 1, 2019 Balance at 86 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Corporation’s required contributions, itsproportional share of earnings,anditsproportional share of revaluation gainsorlosses. by theSaskatchewan Ministryof Finance, amountsrepresenting 1%to2%of thedebtoutstanding.The fund includesthe Under conditions attached tothelong-termdebt,Corporation isrequired topayannuallyintosinkingfunds,administered Supporting information other comprehensive income (OCI). measured at fairvalue.Realized gainsorlossesare recorded innetincome andunrealized gainsandlossesare recorded in investment strategy. Subsequenttoinitialrecognition, financialassets at fairvaluethrough other comprehensive income are purchase andsaledecisionsbasedontheirfairvalueinaccordance withtheCorporation’s documented riskmanagementand through matching of durations. Theinvestmentsare managedthrough theSaskatchewan Ministryof Finance whomakes model istobothholdcollect contractual cashflows(payments of principalandinterest) aswellsaleproceeds realized match theduration of thefinancialassetstoduration of thedebtthat theassetsare fundingandtherefore thebusiness Sinking fundshavebeenclassifiedasfairvaluethrough other comprehensive income becausetheCorporation intendsto Accounting policies Note 16–Sinkingfunds testing indicated noimpairmentat March 31,2020. was thenappliedtotheestimated 2019/20EBITDA of theunittodeterminerecoverable amountof theunit.Impairment discount associated withthesepubliclytradedshare prices. Theresulting adjustedratio usingLevel 3fairvaluehierarchy inputs, earnings before interest, taxes, depreciation andamortization (EBITDA) ratio that wasthenadjustedfor ademonstrableminority on exchanges and are activelytraded. Share prices for these companies were usedtoderiveanEnterpriseValue tothe (EV) The Corporation’s CGU impairmenttestswere basedonfairvaluelesscosts tosellusingcomparable companies that are listed Corporation’s operating segments. finite-life intangibleassetsunderdevelopmentare monitored for internalmanagementpurposes,whichisnothigherthanthe million) are allocated toSaskTel. ThisisthelowestlevelwithinCorporation at whichindefinite-life intangibleassetsand assets underdevelopment,$12.2million(2018/19–$2.2million)andaportionof software, $135.5 million(2018/19–$155.6 For thepurposeof impairmenttesting,indefinite-life intangibleassets(spectrumlicences), aportion of finite-life intangible finite-life intangibleassetsunderdevelopment Impairment testingforthecash-generating unitcontainingindefinite-lifeintangibleassetsand recoverability testing of amount of theCGU is$18.0 millionbasedonitsvalue-in-use. primarily duetodeclininglegacymarketing services revenue, accelerated bytheimpactsof COVID-19. Therecoverable The impairmenttestresulted intherecognition of animpairmentlossof $10.7 millionduringtheyearendedMarch 31,2020 both externalandinternalsources. assumptions represent management’sassessmentof future trends intheindustryandhavebeenbasedonhistoricaldata from The key material assumptionsusedintheestimation of therecoverable amountare setoutbelow. Thevaluesassignedtothe Note 15–Intangible assets,continued Growth rate Terminal valuecapitalization Discount rate 12.00% -2.50% 8.85% SASKTEL 2019/20 ANNUAL REPORT | 87 – 55 444 2019 2019 2019 6,275 6,774 4,040 4,026 12,391 32,242 10,206 155,564 176,021 119,435 161,883 176,021 $ $ $ $ $ $ 56 242 2020 2020 2020 8,593 8,891 5,425 4,129 12,915 33,066 74,887 12,066 176,021 105,170 198,490 150,302 123,603 $ $ $ $ $ $

9,900 14,666 10,400 10,400 10,400 of dollars of $ Thousands Years ending Years 31, March 2021 2022 2023 2024 2025 Instalments Earnings Valuation adjustment Valuation As at March 31, March As at dollars Thousands of Supporting information The Corporation derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. or cancelled, discharged are contractual obligations a financial liability when its derecognizes The Corporation Financing leases Other and other payables Note 18 – Trade Accounting policies a party becomes which the Corporation at trade and other payables on the trade date recognizes initially The Corporation at fair value plus any directly initially recognized the instrument. Such financial liabilities are of provisions to the contractual cost using at amortized measured these financial liabilities are to initial recognition, Subsequent transaction costs. attributable method. interest the effective Note 17 – Other assets 31, March As at dollars Thousands of Sinking fund instalments due in each of the next five years ending March 31 are as follows: as 31 are the next five years ending March due in each of Sinking fund instalments Balance at April 1, April Balance at customer incentives Long-term liabilities payables and accrued Trade liabilities and other employee-related Payroll Thousands of dollars of Thousands Note 16 – Sinking funds, continued funds, 16 – Sinking Note as follows: funds are sinking of amount the carrying in The changes Balance at March 31, March Balance at Other Current portion Current Long-term portion 88 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Long-term portion Current portion Balance at March 31, Terminations Recognized inrevenue Contract liabilitiesrecognized Current portionof deferred income -governmentfunding Current portionof leaseliabilities Customer deposits Advance billings Thousands of dollars As at March 31, Note 21–Otherliabilities Balance at April1, Thousands of dollars As at March 31, Supporting information considered distinct,andthetimingof satisfaction of performance obligations underlong-termcontracts. of performance obligations withinacontract, includingthedetermination of whetherapromise todelivergoods orservices is revenue. Estimates andjudgmentsincludeestimates of thestand-alonesellingprices of products andservices, theidentification with customers,whichalsoimpactsthedetermination of contract liabilitiesandthetimingof recognition of contract liabilitiesas The Corporation isrequired tomake judgmentsandestimates that affect theamountandtiming of revenue from contracts Accounting estimates, andjudgments recognized inrevenue uponsatisfaction of therelated performance obligations. customer. Contractassetsandliabilitiesrelating tothesamecontract are presented onanetbasis.Contract liabilitiesare A contract liabilityisrecognized whenconsideration isreceived inadvance of thetransfer of products orservices tothe Accounting policies Note 20–Contractliabilities April 15, 2020, toJuly15, 2020, andhaveaweightedaverageeffective interest rate of 1.68% (2018/19 –1.88%). Notes payableare duetotheProvince of Saskatchewan’s GeneralRevenue Fund (GRF).Thesenoteshavevaryingmaturities from 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 transactioncosts. Subsequenttoinitialrecognition, thesefinancial The Corporation initiallyrecognizes debtsecuritiesissuedonthedate that theyare originated. Suchfinancialliabilitiesare Accounting policies Note 19–Notespayable Note 24 22 $ $ $ $ (325,399) 381,805 324,342 55,978 56,385 15,173 57,463 2,818 6,503 5,817 2020 2020 (21) 407 35 $ $ $ $ (349,566) 407,052 350,113 56,984 57,463 56,939 9,123 3,379 5,711 2019 2019 479 (23) 33 – SASKTEL 2019/20 ANNUAL REPORT | 89 – Total 6,000 5,711 37,526 37,526 31,526 25,815 2019 $ $ Total 2,633 5,765 5,817 31,526 34,159 28,394 22,577 $ $

– 44 103 2,633 2,633 2,589 2,486 Innovate $ $ Connect to 2020 – 5,721 5,714 31,526 31,526 25,805 20,091 $ $ all obligations fulfilled all obligations Fully funded programs with funded programs Fully

Thousands of dollars Thousands of The Corporation derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. or cancelled, discharged are contractual obligations a financial liability when its derecognizes The Corporation Accounting policies originated. they are that liabilities on the date debt securities issued and subordinated initially recognizes The Corporation Subsequent to initialcosts. attributable transaction plus any directly at fair value initially recognized These financial liabilities are method. interest cost using the effective at amortized measured these financial liabilities are recognition, Note 23 – Long-term debt Balance at April 1, 2019 Balance at As at March 31, March As at Funding received Funding The Corporation has entered into an agreement with ISED through the Connect to Innovate program to receive $6.5 million $6.5 to receive program the Connect to Innovate with ISED through into an agreement entered has The Corporation has The Corporation communities. in rural and remote infrastructure high-capacity broadband of to partially fund provision in the next fiscal year. will be conducted million which has been applied to capital. Additional spending $2.6 funding of received The Corporation has received funding from the Province of Saskatchewan through CIC and the Ministry of Education, as well Education, CIC and the Ministry of through Saskatchewan of the Province funding from has received The Corporation ScienceCanada (AANDC), and Innovation, Affairs and Northern Development Aboriginal Canada through of as the Government the Rural Infrastructure including; various programs Canada (ISED), as full or partial funding of Development and Economic Network Communications Saskatchewan of assets distribution and communication the satellite of the transfer Program, the First schools and health facilities in Saskatchewan, Nations to selected First internet service to the Corporation, Corporation to high speed internet in access of the provision for the Connecting Canadians program Project, Improvement Service Nations Tribal and offices to specific First Nations internet service dedicated of and provision Saskatchewan, parts of rural and remote programs. respect to these with has fulfilled all obligations The Corporation Council offices. Note 22 – Deferred income – government funding government – income 22 – Deferred Note policies Accounting will be received, they that assurance is reasonable when there income initially as deferred recognized grants are Government for the Corporation compensate grant. Grants that with the associated with the conditions will comply and the Corporation on a systematic income comprehensive and other income of statement in the consolidated recognized are incurred expenses an of cost the for Corporation the compensate that Grants recognized. the expenses are same period in which basis in the the basis over a systematic on income comprehensive and other income of statement consolidated in the recognized asset are the asset. of useful life and judgments Accounting estimates, acting in their capacity as a funding is a transaction with the shareholder whether certain in determining Judgment is required in purpose (i.e., is the government acting a specific parties for the funding would be available to other or whether shareholder or as a government). its capacity as shareholder Supporting information

Amortization 31, March Balance at Current portion Current Long-term portion 90 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Long-term portion Current portion Long-term portion Current portion Total duetoProvince of Saskatchewan June 2018 April 2019 May 2017 December 2016 December 2013 February 2012 March 1999 March 1999 December 2017 December 2010 May 2014 November 1990 July 2010 Issue date Balance at March 31, Principal repayments Millions of dollars upon maturity, onanetbasis(seeNote16–Sinkingfunds). 1% to2%of theoriginalissue.Thecumulative annualpaymentsplus interest earned are usedfor theretirement of debtissues There isarequirement attached toaboveadvances tomake annualpaymentsintosinkingfundsinamountsrepresenting were asfollows: The Corporation’s long-termdebtisunsecured. Asat March 31,2020, principalrepayments dueineachof thenextfiveyears Ministry of Finance. Thedebtissuehasacoupon rate of 3.10%, aneffective interest rate of 2.81%, andmatures onJune2,2050. On April2,2019, theCorporation issued$100millionof long-term debtat apremium of $5.9 millionthrough theSaskatchewan Thousands of dollars Unsecured advancesfromtheProvinceofSaskatchewan Balance at April1, Thousands of dollars As at March 31, Supporting information Note 23–Long-termdebt,continued Amortization of debtdiscounts netof premiums Long-term debtissues June 2058 June 2050 June 2048 June 2048 June 2045 February 2042 March 2029 March 2029 June 2027 December 2025 June 2024 December 2020 July 2020 Maturity date Effective interest rate (%) 10.18 3.01 2.81 3.22 3.35 4.09 3.49 5.18 5.97 2.56 4.15 3.11 4.01 Coupon rate (%) 10.08 2.95 3.10 3.30 3.30 3.90 3.40 5.60 5.75 2.65 4.15 3.20 3.90 $ $ $ 276.6 1,111,600 835,000 276,600 100,000 150,000 150,000 126,600 150,000 2021 50,000 50,000 75,000 35,000 75,000 50,000 50,000 50,000 value Par Unamortized $ – 2022 (discounts) premiums $ $ Years endingMarch 31, (4,554) (1,935) (1,118) (1,935) (2,071) 5,796 (621) (671) (136) 705 295 168 (84) (52) $ $ $ – – – 2023 1,109,529 1,003,280 833,065 276,464 105,918 $ $ 2020 331 1,109,529 145,446 148,065 105,796 126,516 149,948 833,065 276,464 $ – 49,379 74,329 50,705 35,000 73,882 50,295 50,000 50,168 Outstanding amount 2024 2020 March 31, $ $ $ $ $ 50.0 1,003,280 1,003,280 1,003,280 1,003,280 953,494

49,363 145,342 148,006 149,791 126,408 49,370 74,315 50,720 35,000 73,790 50,332 50,000 50,206 2025 2019 423 2019 – – – SASKTEL 2019/20 ANNUAL REPORT | 91

fixed payments (including in-substance fixed payments), less any lease incentives receivable; payments), less any lease incentives fixed in-substance payments (including fixed the as at using the index or rate measured initially index or a rate, depend on an that variable lease payments date; commencement guarantees; value be payable by the lessee under residual amounts expected to and option; that to exercise certain if the lessee is reasonably option a purchase of price the exercise option to terminate an the lessee exercising if the lease term reflects the lease, terminating penalties for payments of interest on the lease liability; and interest or condition the lease liability in the period in which the event of the measurement variable lease payments not included in occurs. triggers those payments that the lease. lease liability; on the interest the carrying amount to reflect increasing payments made; and the lease the carrying amount to reflect reducing revised in-substance reflect or to or lease modifications, reassessment any the carrying amount to reflect remeasuring lease payments. fixed • • • • • • • • • • Estimation involves determination of the lease payments to be included in the lease liability, estimation of the incremental the incremental of estimation the lease payments to be included in the lease liability, of involves determination Estimation the of to be included in the determination additional amounts of estimation as appropriate, or implicit lease rate rate borrowing assets. right-of-use the useful lives of of asset, and estimation right-of-use Judgments include determining whether a contract contains an identifiable asset, assessing control of assets in a contract,of assets in a control assessing an identifiable asset, contains a contract Judgments include determining whether terms, and determining whether lease and cancellation renewal assessment of determining the lease term including the result in changes to existing leases or new leases. modifications Accounting estimates, and judgments Accounting estimates, theof lease liabilities and the determination or impact affect and judgments that estimates to make is required The Corporation expense. interest related At the commencement date, the lease payments included in the measurement of the lease liability include the following the lease liability include of in the measurement lease payments included the date, At the commencement date: the commencement not paid at are asset during the lease term that the right to use the underlying payments for Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date. commencement the not paid at are that the lease payments of value the present at initially measured are liabilities Lease rate If that determined. can be readily rate in the lease, if that implicit rate the interest using discounted payments are The lease rate. borrowing uses its incremental determined, the Corporation readily cannot be Note 24 – Lease liabilities – Lease 24 Note policies Accounting another asset applying other amount of included in the carrying are unless the costs in net income, Amounts recognized include: applicable standards, Interest on the lease liability in each period during the lease term is calculated using the effective interest method resulting in a method interest using the effective the lease term is calculated on the lease liability in each period during Interest is the initial discount interest of The periodic rate the lease liability. of balance on the remaining interest of periodic rate constant rate. discount if applicable, a revised or, rate After initial recognition, the lease liability is measured by: the lease liability is measured After initial recognition, 92 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Total cashoutflowforleases Lease liabilityprincipalpayments Interest onleaseliabilities Thousands of dollars For theyearendedMarch 31, Amounts recognized inthestatement of cashflows Interest onleaseliabilities Thousands of dollars For theyearendedMarch 31, Amounts recognized innetincome Non-current Current statement of financialposition at March 31, Discounted leaseliabilitiesincludedinthe Total undiscountedleaseliabilitiesat March 31, Maturity analysis-contractualundiscountedcashflows Thousands of dollars As at March 31, benefit planare recognized in net income. the periodasaresult of contributions andbenefitpayments. Netinterest expenseandotherexpenses related tothedefined period tothethen-netdefined benefitliability(asset),takinginto account anychangesinthenet definedliability(asset)during for the period byapplyingthediscount rate usedtomeasure thedefinedbenefitobligation atthebeginning oftheannual comprehensive income (OCI).TheCorporation determinesthenetinterest expense(income) onthenetdefined liability(asset) (excluding interest) andtheeffect of theasset ceiling (ifany, excluding interest), are recognized immediately inother Remeasurements of thenetdefinedbenefitliability, which compriseactuarial gainsandlosses,the returnonplanassets To calculate thepresent valueof economic benefits, consideration isgiventoanyapplicableminimumfunding requirements. of economic benefitsavailableinthe form of anyfuture refunds from theplanor reductions infuture contributions totheplan. method. Whenthecalculation results inapotentialassetfor theCorporation, therecognized assetislimitedtothepresent value The calculation of thenetdefinedbenefitobligation isperformed annuallyby aqualifiedactuaryusingthe projectedunit credit plan assets. have earnedinreturn for theirservice inthecurrent andpriorperiods;discounting that amountanddeductingthefairvalueof The Corporation’s netobligation inrespect of PlanAiscalculated byestimating theamountof future benefitthat employees Defined benefitplans(PlansAandB) Accounting policies contribution pensionplan(PlanC). The Corporation hasadefinedbenefitpensionplan(PlanA), service recognition definedbenefitplan(PlanB),anda Note 25–Employeebenefits Supporting information Note 24 –Leaseliabilities,continued More thanfiveyears One tofiveyears Less thanoneyear

$ $ $ $ $ $ $

44,095 37,592 26,194 19,333 52,337 5,835 6,503 6,950 1,115 1,115 6,810 2020 2020 2020

SASKTEL 2019/20 ANNUAL REPORT | 93

2% per year. 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, but meet other age plus service 65, the age of before For employees who retire Index (CPI) up to a maximum of the Consumer Price subject to annual indexing with are pension may be payable. Pensions completion of 35 years of service. The pension is calculated to be 2% times the average of the highest three years of the highest three 2% times the average of to be The pension is calculated service. 35 years of of completion pension may be A reduced service. 35 years of up to a maximum of service years of pensionable earnings times the number of met. are criteria service age and years of if certain opted for The SaskTel defined benefit pension plan provides a full pension at age 65, at age 60 with at least 20 years of service or upon of service at least 20 years at age 60 with 65, at age provides a full pension defined benefit pension plan The SaskTel Plan A, the defined benefit pension plan, is governed by SaskTel and has been closed to new membership since 1977. The 1977. since and has been closed to new membership Plan A, the defined benefit pension plan, is governed by SaskTel Act, Tax the Income under The Pension and Benefit Act, 1992, Saskatchewan, registered defined benefit pension plan is SaskTel auditedPensions Division. Separate – of Saskatchewan by the Financial and Consumer Affairs Authority Canada, and regulated released publicly. and prepared are for the defined benefit plan financial statements Supporting information The Corporation determines the appropriate discount rates at the end of each reporting period and the indexing assumptions period and the each reporting the end of at rates discount the appropriate determines The Corporation on the have an effect Changes in these assumptions could each actuarial study date. least at at and mortality rates rates and indexing assumptions Lower discount projected benefit obligation. on the an effect cash flows through Corporation’s the assumptions impact of The combined in a lower obligation. result while lower mortality rates in a higher obligation result to the plan. additional contributions some point, require at could, Defined benefit plans (Plans A and B) The most significant assumptions used to calculate the net employee benefit plan’s obligation include: the discount rate, the include: the discount the net employee benefit plan’s obligation to calculate The most significant assumptions used the value of used to determine the present rate the interest is rate The discount rate. indexing assumption, and the mortality It is based on the yield to settle employee benefit obligations. of required expects will be the Corporation cash flows that future of the planprofile reflecting the bonds) with terms investments (AA credit-rated income fixed corporate long-term, high-quality, of the plan. liabilities which impacts the future rate inflation the future of estimate members. The indexing assumption is the members. plan expectancy of life liability based on the estimated the future impacts The mortality rate rates. These assumptions are determined by management and are reviewed at least annually by the Corporation’s least annually by the at reviewed determined by management and are are These assumptions rates. independent actuaries. Short-term benefits and termination benefits and termination Short-term benefits of those benefitsoffer can no longer withdraw the the Corporation of when at the earlier expensed benefits are Termination wholly within 12 not expected to be settled If benefits are a restructuring. for costs recognizes and when the Corporation value. to their present discounted then they are period, the reporting months of and judgments Accounting estimates, age, and mortality retirement indexing assumptions, rates, determine discount to required are and judgments Estimates A defined contribution plan is a post-employment benefit under which an entity pays fixed contributions into a separate contributions fixed pays benefit under which an entity contribution plan is a post-employment A defined to the defined contributions for amounts. Obligations to pay further obligation no legal or constructive entity and will have and otherof income statement consolidated the as an employee benefit expense in recognized pension plan are contribution recognized are contributions by employees. Prepaid rendered are periods during which services in the income comprehensive payments is available. in future reduction or a a cash refund that as an asset to the extent for the amount recognized A liability is is provided. service related expensed as the are Short-term employee benefit obligations past of to pay this amount as a result obligation legal or constructive has a present expected to be paid if the Corporation can be estimated. and the obligations by the employee, provided service Defined contribution plans (Plan C) Defined contribution The Corporation’s net obligation in respect of Plan B is calculated by estimating the amount of future benefit that employees that benefit future amount of the by estimating Plan B is calculated of in respect net obligation The Corporation’s defined benefit the of The calculation amount. that periods and discounting in prior their service for in return have earned method. unit credit projected annually by a qualified actuary using the is performed obligation Note 25 – Employee benefits, continued benefits, 25 – Employee Note to past relates benefit that change in resulting the is curtailed, the plan or when changed plan are of the the benefits When and gains recognizes The Corporation in net income. immediately is recognized gain or loss on curtailment or the service occurs. when the settlement defined benefit plan the the settlement of losses on 94 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES At March 31,2020, theweighted averageduration of thedefinedbenefitobligation was 10.5 years(2018/19–11.3years). major assumptionsusedinthevaluations are asfollows: provided byIFRS. Theestimate, therefore, involvesrisksthat theactualamountmaydiffer materially from theestimate. The of action.Theactuarialassumptionsare basedonmanagement’sexpectations, independentactuarialadvice, andguidance best estimates basedonassumptionsthat reflect themostprobable set of economic circumstances andplanned courses The accounting actuarialvaluation includesaprovision for uncommitted andadhocbenefitincreases, andusesmanagement’s Actuarial assumptions Defined benefitobligation Plan Bisunfunded. TheCorporation expectstopay$1.6 millioninthenextyearrelated toPlanB. The planisinasurplusposition,andtherefore, underthegoingconcern actuarialvaluation, contributions are notrequired. determine theactuarialpresent valueof theaccrued pensionbenefit. plan. Asaresult, employer current service contributions havealsoceased. Avaluation isperformed at leasteverythree yearsto All planmembershavereached themaximumyearsof pensionableservice andare nolongerrequired tocontribute tothe performed asof March 31,2017. actuarial valuation for accounting purposeswasperformed at March 31,2017. Thelatest valuation for fundingpurposeswas contributions reflect actuarialassumptionsaboutfuture investment returns, salaryprojections, andfutureAn service benefits. The Corporation isresponsible for adequately fundingPlanA.Contributionsare determinedbyactuarialvaluations. The Funding service recognition definedbenefit program wascurtailed effective March 19,2005. is payableonretirement. BasedontheCollectiveAgreement betweentheCorporation andUnifor, ratified April22,2005, the Plan B, theservice recognition definedbenefitplan provided a retiringallowance oftwodays’salaryperyear ofservice, which contribution, andindexation policies)of thedefinedbenefitpensionplan. the bestinterests of thedefinedbenefitpensionplanparticipantsandis responsible forsetting certainpolicies(e.g.,investment, representatives, twounionrepresentatives, andanindependentchair. TheSaskTel Pension Board isrequired bylawtoactin The definedbenefitpensionplanisadministered byafive-memberboard (SaskTel PensionBoard), consisting oftwoemployer Note 25–Employeebenefits,continued Future mortality Post-retirement index Expected salaryincrease Inflation rate Discount rate –endof year As at March 31, employee service life Estimated averageremaining

females projected generationally with CPMImprovement ScaleB at 100%formalesand110% – Private SectorMortalityTable Canadian Pensioner2014 Plan A 1.60% 2.25% 3.70% 2020 – –

In Scope:0.0%inthefirst year, 1.0% inthesecond Management: 2.0% annum thereafter year, 2.0% per per annum 8.0 years Plan B 3.40% – – – females projected generationally with CPM Improvement ScaleB at 100%for malesand110%for – Private SectorMortalityTable Canadian Pensioner 2014 2019 Plan A 1.60% 2.25% 3.20% – –

2.0% thereafter 0% in2019/20 8.4 years Plan B 3.00% – – – SASKTEL 2019/20 ANNUAL REPORT | 95 – – – 97 355 243 598 733 2019 (165) (606) 16,118 22,072 (2,420) (2,076) 14,475 14,475 14,475 (19,914) Decrease $ $ $ $ $ – 26 399 264 663 2020 (713) – – 14,475 32,234 18,623 12,913 12,913 12,913 (1,512) Plan B 661 (51,596) (658) Increase Net defined benefit liability $ $ $ $ $ – – 355 2019 (2,420) 66,522 (34,350) (33,995) (19,914) (22,334) – (1,036,502) (1,026,309) (120) $ $ (96,756) 106,999 Decrease – – 399 $ 2020 Defined benefit obligation Defined benefit 32,234 18,623 50,857 65,944 (31,935) (31,536) (941,044) Fair value of plan assets value of Fair (1,026,309) $ $ – Plan A

43,611 – – – 97 (44,471) (89,843) Increase 2019 34,593 34,593 22,072 22,169 (68,598) $ 1,052,620 1,040,784 $ $ – – – 26 2020 32,199 32,199 953,957 (51,596) (51,570) (67,456) 1,040,784 Defined benefit obligation $ $

- demographic assumptions - financial assumptions Actuarial loss (gain) arising from: Return on plan assets Return income interest excluding -  -  - Effect of asset ceiling limit of asset - Effect Movement in the present value of the defined benefit obligation value of Movement in the present Note 25 – Employee benefits, continued benefits, 25 – Employee Note analysis Sensitivity The following illustrates the effect on the obligations of the plans of changing certain actuarial assumptions while holding all while holding actuarial assumptions certain of changing plans of the on the obligations the effect illustrates The following constant: other assumptions the net defined benefit for closing balances to the balances the opening from table shows a reconciliation The following liability and its components. For the year ended March 31, For the year ended March dollars Thousands of Balance at April 1, Balance at Included in net income cost service Current Interest cost (income) cost Interest Included in OCI loss (gain): Remeasurement Other Benefits paid Balance at March 31, March Balance at Net defined benefit liability (Plan B) Represented by: Represented Net defined benefit liability (Plan A) Future indexing (0.4% increase and 1% decrease) and increase indexing (0.4% Future Inflation (1% movement) Inflation Salary increase (1% movement) Salary increase Discount rate (1% movement) rate Discount As at March 31, 2020 March As at dollars Thousands of 96 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Net investments Effect of asset ceiling limit Total investments Canadian equities Short-term investments Investments undersecuritieslendingprogram Pooled mortgagefund Pooled bondfunds Non-North Americanpooledequityfunds U.S. pooledequityfund Canadian pooledequityfunds Canadian equities Pooled real estate Public EmployeesPension Planare $20.8 millionfor theyearendedMarch 31,2020(2018/19 –$21.7 million). plan isequaltotheCorporation’s required contribution. TheCorporation’s pensioncost andemployercontributions for the earnings, and employees to contribute a minimum of 4.45% of pensionable earnings. The total cost for the defined contribution Plan C, thedefined contribution pensionplan, requires theCorporation to contribute 7.45% of employees’pensionable Defined contributionplans(PlanC) evolve tomatch theliabilitiesof theplan. the overalldemographictrends for theplan.Thisapproach strivestoensure theassetsof thedefinedbenefitpension plan The SaskTel Pension Board employsapension riskmanagementstrategy that addresses continued capitalmarket volatility and objectives of thedefinedbenefitpensionplan’scapitalmanagementtoultimately meetallpensionobligations. statement of specificquality, quantity, andrate of return standards. Thepolicyis revisited annuallytoensure itismeetingthe of thePension Fund for thepurposeof managingcapitalassets.Thepolicyprovides theinvestmentmanagerswithawritten The definedbenefitpensionplan’sinvestmentpolicy provides aframework fortheprudentinvestmentandadministration asset mixhasbeenestablished: Taking intoconsideration theinvestmentandriskphilosophyof thedefinedbenefitpensionplan, followingrangeandtarget estate, andpooledfunds.Anyothertypeof investmentisnotpermittedwithoutpriorapproval of theSaskTel Pension Board. receipts, andcapitalshares), U.S. andinternational equities,bondsof Canadianissuers,short-termsecurities,mortgages,real The definedbenefitpensionplan’spermissibleinvestmentsincludeCanadianequities(includingrights,warrants,instalment Short-term investments Asset category Thousands of dollars As at March 31, The assetallocation of thedefinedbenefitpensionplanisas follows: Plan assets Note 25–Employeebenefits,continued Asset category Fixed income Real estate Equities 40–50% 12–18% 30–50% Range Target 45% 15% 40% Actual 46% 18% 36% $ $ (21,043) 942,944 963,987 941,319 340,704 151,502 105,338 167,381 22,668 22,668 92,944 64,059 13,125 6,266 2020 – $ $ 1,027,114 1,031,739 1,015,508 443,969 174,390 112,749 173,388 (4,625) 16,231 14,051 89,566 2,180 5,007 8,911 7,528 2019 SASKTEL 2019/20 ANNUAL REPORT | 97

Environmental remediation Environmental to related expenditure, an environmental of when the occurrence is accrued remediation environmental for A provision activities can be reasonably remedial of and the costs probable is considered the Corporation, or past activities of present based on are identified sites. These provisions at and remediation investigations for include costs These estimates estimated. net fair value in at recorded and are laws and regulations environmental current considering management’s best estimate on an ongoing basis. Changes in the expenditures environmental future of its estimates reviews The Corporation income. in net recognized are rate, cash flows, as well as changes in the discount future amount of timing and estimated When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the party, a third from recovered to be expected are to settle a provision required benefits the economic When some or all of the receivable of and the amount received will be reimbursement that it is virtually certain as an asset if is recognized receivable reliably. can be measured Decommissioning provisions plant and property, of with the decommissioning associated obligation is a legal or constructive provision A decommissioning fair of estimate if a reasonable in the period incurred provisions decommissioning recognizes equipment. The Corporation antennae, and towers, to decommission provisions recognizes be determined. The Corporation value) can value (net present is cost decommissioning estimated The fair value of service. for the facility is ready fuel storage tanks in the period in which plant and equipment and right- of property, part and included as amount capitalized with an offsetting a provision as recorded expense accretion time by calculating the passage of periodically for increased are provisions assets. Decommissioning of-use the anticipated various assumptions regarding into account take based on detailed studies that fair value are of The calculations Decommissioning inflation. of future and an estimate of decommissioning cash flows, including the method and timing future flows, as well as cash future timing and amount of the estimated and any changes in periodically reviewed are provisions the liability and the related of in the carrying amount or decrease as an increase recognized are rate, changes in the discount immediately. in net income recognized the changes are asset. If the asset is fully depreciated, settle the obligation at the end of the reporting period. The unwinding of the discount on provisions is recognized as is recognized on provisions the discount of period. The unwinding reporting the the end of at settle the obligation expense. finance asset. related of the useful life over the estimated depreciated costs are capitalized The offsetting on the provision. immediately. income and judgments Accounting estimates, the remediation, and environmental decommissioning liabilities for future the of Judgment is involved in the estimation to determine the rates factors and discount as well as inflation decommissioning, the expected period until of determination the provisions. value of present Note 26 – Provisions Note policies Accounting can that obligation legal or constructive has a present Corporation a past event, the of result as a if, is recognized A provision the timing to settle the obligation, required be benefits will of economic an outflow that and it is probable reliably, be estimated reflects that rate at a cash flows future the expected discounting determined by are Provisions which is uncertain. of or amount to best estimate at the or obligation, risks specific to the money and the of the time value of assessments market current 98 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Settled duringtheperiod Accretion expense Change inassumptions Inflation rate Discount rate Thousands of dollars is asfollows: Sensitivity of provisions tochangesinthediscount rate andinflation rate onthe recorded liabilityas at March 31,2020, Sensitivity of assumptions aside bytheCorporation tosettlethedecommissioning provisions. provisions. Thecosts of thedecommissioning provisions willbeincurred between2025and2071.Nofundshavebeenset Discount rates basedontheGovernmentof Saskatchewan bondyieldswere usedtocalculate thecarrying valuesof the Balance at March 31,2020 financial leverageandinturn, itsfinancialflexibility. measures theamountof debtinacorporation’s capitalstructure. TheCorporation uses thismeasure in assessingtheextentof The Corporation closelymonitors itsdebtlevelutilizingtheratio asaprimaryindicator of financial health.Thedebtratio Saskatchewan Provincial budget process onanannualbasis. Corporation are determined bytheshareholder onanannualbasis.DividendstoCICare determinedthrough the Due toitsownershipstructure, theCorporation hasnoaccess tocapitalmarkets for internalequity. Equityadvances inthe The Corporation hasreceived anequityadvance from CICtoform itsequitycapitalization. Supporting information – government funding). available tootherpartiesfor aspecificpurpose,thefundingis recorded asagovernmentgrant(seeNote22–Deferred income comply withcertain pastorfuture conditions relating totheoperating activitiesof theCorporation, andthefundingcould be conditions relating tothe operating activitiesof theentity, thefundingisrecorded asanequityadvance. IftheCorporation must whether thefundingwouldbeavailabletootherpartiesfor aspecificpurpose.Ifthere isno requirement to comply with certain whether thefundingisatransactionwithequityholderintheircapacityasanholder, e.g.,equityinjection,or The Corporation periodicallyreceives fundingfrom itsparent andsoleequityholder, CIC. Funding isfirstanalyzed todetermine Accounting estimates, andjudgments Note 27–Equityadvanceandcapitaldisclosures Assumptions Balance at April1,2019 Thousands of dollars Supporting information Note 26–Provisions,continued Discount rate, endof period As at March 31, Undiscounted cashflows(thousands) Long-term inflation rate Decommissioning $ $ provisions 6,249 6,073 (397) (397) 221 221 - 1.93% -2.84% Environmental $ $ $ $11,977 0.5% increase 2.00% Decommissioning provisions 2020 provisions (651) 420 (52) 472 989 – – 1.74% -2.80% 0.5% decrease $ $ $ $12,984

2.00% 2019

6,493 (493) 6,721 Total (397) 684 (52) 221 SASKTEL 2019/20 ANNUAL REPORT | 99 51 524 2019 (260) (948) 2019 3,874 8,465 5,121 46.6% (5,639) (8,902) (20,825) (23,660) 193,295 176,021 1,165,168 1,015,433 2,180,601 1,003,280 $ $ $ $ 2020 47.8% 17,221 198,490 188,851 1,181,988 2,264,657 1,082,669 1,109,529 204 (559) 2020 4,718 (3,803) (4,406) (5,722) (1,078) $ $ (15,467) (12,505) (38,618) $ $ 16 23 Note (b)

(a) (a) Cash

Inventories expenses Prepaid Contract assets Trade and other receivables Trade Contract costs and other payables Trade Contract liabilities Other liabilities Other Capitalization Less: Sinking funds Less: Net debt equity Saskatchewan's of Province a) Net change in non-cash working capital 31, For the year ended March dollars Thousands of to operations Net change in non-cash working capital balances related Note 28 – Consolidated statement of cash flow – supporting information statement Note 28 – Consolidated (a) Long-term debt and notes payable exclude lease liabilities. debt and notes payable exclude (a) Long-term the period. the end of earnings at and retained income, other comprehensive accumulated (b) Equity includes equity advances, As at March 31, March As at dollars Thousands of The debt ratio is as follows: The debt ratio The Corporation made no changes to its approach to capital management during the year. to capital management during the approach made no changes to its The Corporation debt Long-term The Corporation raises most of its capital requirements through internal operating activities and long-term debt through debt through activities and long-term internal operating through its capital requirements raises most of The Corporation of the Province of advantage to take Corporation allows the borrowing of This type Finance. Ministry of the Saskatchewan rates. interest attractive at financing and receive rating credit strong Saskatchewan’s The Corporation reviews the debt ratio targets of all its subsidiaries on an annual basis to ensure consistency with industry consistency to ensure on an annual basis all its subsidiaries of targets the debt ratio reviews The Corporation are subsidiaries for debt ratios target capital spending. The for plans corporations’ includes subsidiary review This standards. the for debt to equity ratio a weighted average to compile debt ratios uses targeted The Corporation by the Board. approved was 49.0%. 2019/20 for ratio The target entity. consolidated Note 27 – Equity advance and capital disclosures, continued capital disclosures, and advance 27 – Equity Note to withstand ability the Corporation’s impair may that burden debt excessive an indicates to target relative high a ratio Too lease liabilities, as net debt, excluding is calculated The ratio payment obligations. and still meet fixed in revenue downturns the year. of the end at capitalization divided by Debt ratio Notes payable 100 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Balance at March 31,2020 Total otherchanges Amortization of netdiscount onlong-termdebt New leasesandassumptionchanges Sinking fundvaluation adjustments Sinking fundearnings Dividend declared Other changes Balance at March 31,2019 Total otherchanges Amortization of netdiscount onlong-termdebt Sinking fundvaluation adjustments Sinking fundearnings Dividend declared Other changes Total changesfrom financingcashflows Dividends paid Total changesfrom financingcashflows Dividends paid Repayment of equityadvance Instalments Repayment of borrowings Proceeds from loansandborrowings Changes from financingcashflows Instalments Repayment of borrowings Proceeds from loansandborrowings Changes from financingcashflows b) Reconciliation of changesinliabilitiestocashflowsarisingfrom financingactivities Note 28–Consolidated statement of cashflow–Supportinginformation, continued Balance at April1,2019 Thousands of dollars Balance at April1,2018 Thousands of dollars $ $ $ $ (198,490) (176,021) (155,564) (176,021) Assets Assets (12,915) (12,915) (12,391) (12,391) Sinking Sinking (4,040) (8,066) (9,554) (4,026) (5,425) (4,129) funds funds – – – – – – – – – – – –

$ $ $ $ Long-term Long-term 1,003,280 1,003,280 1,109,529 953,494 105,918 105,918 49,363 49,363 debt debt 423 423 331 331 – – – – – – – – – – – – – –

$ $ $ $ (762,256) (760,714) 756,270 payable payable 193,295 143,069 188,851 812,482 193,295 (4,444) 50,226 Notes Notes Liabilities Liabilities – – – – – – – – – – – – – – – –

$ $ $ $ liabilities liabilities 44,095 (5,835) (5,835) 47,310 Lease Lease 2,620 2,620 – – – – – – – – – – – – – – – – – – – – $ $ $ $ (107,230) (107,230) Dividend Dividend (116,314) (116,314) payable payable 107,923 107,923 114,688 114,688 25,573 24,880 24,880 26,506 – – – – – – – – – – – – – – $ $ $ $ advance advance 250,000 237,000 237,000 237,000 (13,000) (13,000) Equity Equity – – – – – – – – – – – – – – – – – – – – $ $ $ $ 1,406,558 1,329,744 1,282,434 (766,549) (762,256) (107,230) 1,217,505 (116,314) (24,506) 862,188 Total Total (13,000) 861,845 101,320 107,923 (12,915) 107,045 114,688 (42,116) (12,391) (4,040) (4,026) (5,425) (4,129)

2,620 423 331 SASKTEL 2019/20 ANNUAL REPORT | 101 Foreign currency risk suppliers and short-term transactions with foreign dollars, through risk, primarily U.S. is exposed to currency The Corporation of in excess fluctuations currency 31, 2020, March at constant Assuming all other variables remain commitments. foreign The Corporation may be exposed to interest rate risk on the maturity of its long-term debt. However, in the current interest rate interest in the current However, its long-term debt. of risk on the maturity rate may be exposed to interest The Corporation offset interest to contracts in place has no financial the Corporation As a result, low. considered these risks are environment, changes on net income. rate interest the impact of sensitivity analysis of a 31, 2020 and has not provided March risk as of rate The Corporation has on deposit with the Province of Saskatchewan, under the administration of the Ministry of Finance, $198.5 $198.5 Finance, the Ministry of of under the administration Saskatchewan, of has on deposit with the Province The Corporation the 31, 2020, long-term debt issues. At March certain for million) in sinking funds, which is required million (2018/19 – $176.0 with to coincide and Federal government bonds with varying maturities GRF has invested these funds primarily in Provincial may beconditions. The Corporation and market profile this maturity managed based on and they are debt maturities related a yield curve 31, 2020, March at constant variables remain risk on the sinking funds. Assuming all other rate exposed to interest (or bond rates in interest weakening a 1.0% Specifically, impact on net income. have a material could 1.0% of shift in excess would have an 13.6% strengthening while a 1.0% on net income effect million) favourable ($15.2 have an 13.6% yields) could on net income. effect million) unfavourable ($15.2 Interest rate risk rate Interest rate to interest related financial instruments value of changes in the loss from the potential for risk represents rate Interest sinking fund investments and debt refinancing. risk primarily impacts the value of rate movements. Interest Market risk Market affected Value can be by financial instruments. changes in the value of loss from the potential for risk represents Market and equity prices. rates, exchange foreign rates, changes in interest Supporting information of a number utilizes The Corporation rates. and interest rates exchange foreign in to fluctuations is exposed The Corporation with these financial instruments the risk associated mitigates The Corporation exposures. financial instruments to manage these to reporting internal monitoring, and compliance exposure, limits on use and amount of policies, Board-approved through from the prior period. significantly financial risks have not changed The Corporation’s senior management and the Board. Derivatives may be embedded in hybrid contracts that also include a non-derivative host. If a hybrid contract contains a host contains host. If a hybrid contract a non-derivative also include that in hybrid contracts may be embedded Derivatives contract asset. If a hybrid contract is classified as a financial 9, the entire of IFRS within the scope is a financial asset that whenderivative as a separate is treated an embedded derivative IFRS 9, of is not an asset within the scope a host that contains the host instrument, when the embedded to those of not clearly and closely related and risks are characteristics the economic fair valueat is not measured contract and the combined a stand-alone derivative, terms as those of has the same derivative at fair value with typically measured are or loss. These embedded derivatives in profit with changes in fair value recognized in net income. subsequent changes recognized Financial assets and liabilities are offset, and the net amount presented in the statement of financial position when, and onlyof financial in the statement net amount presented and the offset, liabilities are Financial assets and the assetrealize or to and intends either to settle on a net basis the amounts offset has a legal right to when, the Corporation simultaneously. and settle the liability The Corporation derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it the asset expire, from contractual rights to the cash flows financial asset when the a derecognizes The Corporation in which substantially all theflows on the financial asset in a transaction cash the contractual the rights to receive transfers created or is financial assets that in transferred Any interest transferred. are the financial asset of ownership of risks and rewards or liability. asset as a separate is recognized by the Corporation retained Note 29 – Financial instruments and related risk management risk and related instruments 29 – Financial Note policies Accounting at fair valuestatements financial consolidated liabilities in the assets and financial financial initially recognizes The Corporation liabilities assets or financial to financial related costs Transaction costs. transaction adjusted for the transaction price) (normally financialof and sales way purchases Regular in net income. immediately recognized or loss are profit through fair value at at remeasured ongoing basis are fair value on an at recorded Financial instruments on the trade date. for accounted assets are or OCI. in either net income recorded are and changes in the fair value date each reporting 102 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Allowance fordoubtfulaccounts The allowance for doubtfulaccounts andtheagingof customeraccounts receivable are detailedasfollows: uncollectible, andfuture collection policyandeconomic environment impacts. on ananalysisof theagingof customeraccounts receivable, anestimate of outstandingamountsthat are considered tobe The allowance for doubtfulaccounts, whichprovides anindication of potentialimpairmentlosses,isreviewed regularly based conditions are suchthat the actuallossesare likely to begreater orlessthansuggestedbyhistoricaltrends. and theamountof lossincurred, adjustedfor management’sjudgmentastowhethercurrent orfuture economic and credit In assessingcollective impairment,theCorporation useshistoricaltrends of theprobability of default,timingof recoveries within eachsegment. characteristics, specificallybasedonbusinesssegment,anaging of theaccounts withineachsegment,anddefaultprobabilities that are notindividuallysignificantare collectively assessed for impairmentbygrouping together receivables withsimilarrisk specifically impaired are then collectively assessed for anyimpairmentthat hasbeenincurred butnotyetidentified. Receivables All individuallysignificant receivables are assessed for specificimpairment.Allindividuallysignificant be receivables foundnotto primarily throughout Saskatchewan. Trade andotherreceivables andunbilledrevenue are diversifiedamongmany residential, farm,and commercial customers The Corporation considers evidence of impairmentfor tradeandotherreceivables at bothaspecificasset and collective level. Trade andotherreceivables The carryingamountof financialassets represents themaximumcredit exposure as follows: and otherreceivables andunbilledrevenue, contract assets,sinkingfunds,andinterest receivable. or otherconditions. TheCorporation doesnothavematerial concentrations of credit risk.Current credit riskrelates totrade industry characteristicsthat causetheirabilitytomeetcontractual obligations tobesimilarlyaffected bychangesineconomic financial loss.Concentration of credit risk relates to groups of customersor counterparties that havesimilareconomic or Credit riskisthe risk that onepartytoatransactionwillfaildischarge anobligation andcausetheotherpartytoincura Credit risk currency derivatives outstanding.TheCorporation doesnotactivelytradederivative financial instruments. instruments tomanagetheseexposures whendeemedappropriate. AtMarch 31,2020, theCorporation hadnoforeign could havea$14.9 millionfavourableeffect oncashflow. TheCorporation usesa combination ofderivative financial versus theU.S. dollarexchange rate could havea$14.9 millionunfavourable effect oncashflowwhilea15%strengthening 15% wouldhaveamaterial impactonthecashflow of theCorporation. Specifically, a15%weakening intheCanadiandollar Note 29–Financialinstruments andrelated riskmanagement, continued Thousands of dollars As at March 31, Sinking funds Contract assets Trade andotherreceivables Cash Thousands of dollars As at March 31, Balance at March 31, Provisions for losses Recoveries Less: accounts writtenoff Balance at April1, Note 16 11 8 $ $ $ $ 442,460 198,490 142,860 83,889 17,221 (10,805) 2020 2,606 2,396 6,152 4,863 2020 $ $ $ $ 398,366 176,021 139,057 78,167 (8,708) 5,121 2,396 2,349 4,917 3,838 2019 2019 SASKTEL 2019/20 ANNUAL REPORT | 103 – 936 936 2019 2019 (936) 2019 1,872 2,395 4,579 (1,872) 57,975 21,128 79,103 78,167 (2,396) 91,126 11,992 110,092 107,696 $ $ $ $ $ $ – 936 2020 2020 2,192 1,461 62,620 22,730 85,350 83,889 (1,667) (1,461) 2020 5,387 2,422 91,267 13,776 (2,606) 112,852 110,246 $ $ $ $ $ $ 8 8 Note Allowance for contract asset credit losses Allowance for contract asset credit The allowance for contract asset credit losses and the aging of contract assets are detailed as follows: are assets contract losses and the aging of asset credit contract for The allowance The Corporation maintains allowances for lifetime expected credit losses related to contract assets. Current economic Current assets. to contract losses related expected credit lifetime for allowances maintains The Corporation which the contract business from if available), and the line of agency reports, (including credit information historical conditions, when determining considered The same factors are impairment allowances. when determining all considered are asset arose contract assets. for impairment allowance to the amounts charged whether to write off Contract assets of the impairment of assessment based on the related assets contract impairment for of evidence considers The Corporation contract and therefore receivables, Trade and other collective level. both a specific asset and at trade and other receivables Credit Saskatchewan. customers primarily throughout commercial and residential, farm, diversified among many assets, are also our customer base. The Corporation and diversity of managed by the size assets is inherently with contract risk associated extended when deemed necessary. credit customers and limits the amount of of evaluations credit of a program follows Note 29 – Financial instruments and related risk management, continued risk management, and related instruments 29 – Financial Note accounts receivable Customer Current 30–60 days 61–90 days than 90 days Greater receivable customer accounts Gross doubtful accounts for Allowance Net customer accounts receivable Net customer accounts Contract assets 31, March As at dollars Thousands of As at March 31, March As at dollars Thousands of As at March 31, March As at dollars of Thousands Balance at April 1, Balance at period Amortization Within 1 year Additions Between 1 and 2 years Greater than 2 years Greater Transferred to accounts receivable allowance receivable to accounts Transferred Gross contract assets contract Gross Balance at March 31, March Balance at Allowance for credit losses credit for Allowance Net contract assets 104 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES Trade andotherpayables Notes payable Long-term debt(a) As at March 31, 2019 Trade andotherpayables Notes payable Long-term debt(a) 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 bytheassumptions used current markets for instrumentswith similarcharacteristics,suchasrisk,principal,andremaining maturities. Fair valuesare Fair valuesare approximate amountsat whichfinancialinstruments could beexchanged betweenwilling partiesbasedon Fair value a) Contractualcashflows for long-termdebtincludeprincipalandinterest paymentsbutexclude sinkingfundinstalments. As at March 31,2020 Thousands of dollars The following summarizes thecontractual cashflows of theCorporation’s financialliabilities: Corporation anticipates itwillbeabletorefinance long-termdebtuponmaturity. Sufficient operating cashflowsthe areexpectedtobegenerated tofundtheshort-term contractual obligations and is aProvincial Crown corporation andassuchhasaccess tocapitalmarkets through theSaskatchewan Ministryof Finance. Liquidity riskisthethat theCorporation isunabletomeetitsfinancial commitments astheybecome due.TheCorporation Liquidity risk financial transactions. In addition,theCorporation maintainscredit policiesandlimitsinrespect toshort-terminvestmentsandcounterparties to low credit riskand nolossallowance isdeemednecessary. addition, there have beennodefaultsof assetsheldwithinthesinkingfund.Asaresult, sinkingfundsare considered tohave within thesinkingfundsconsist primarilyof Provincial andFederalgovernmentbonds,whichare rated investmentgrade.In “investment grade.”TheCorporation considers thistobeAAorhigherperDBRSAaMoody’s.Investmentsheld The Corporation considers adebtsecuritytohavelowcredit riskwhenitscredit riskrating isequivalenttothedefinition of The credit riskrelated tosinkingfundsisassessedbasedonthecredit riskrating of theinvestmentsheldinsinkingfunds. Sinking funds Note 29–Financialinstruments andrelated riskmanagement, continued $ $ $ $ 1,448,682 1,109,529 1,358,458 1,003,280 Carrying Carrying 150,302 188,851 amount 161,883 193,295 $ $ $ $ 2,124,863 1,785,328 1,939,994 1,584,464 150,302 189,233 161,883 193,647 Total $ $ $ $ 150,302 513,327 189,233 173,792 378,747 161,883 193,647 months 23,217 0–6

$ $ $ $ 144,720 144,720 months 23,217 23,217 7–12 Contractual cashflows – – – – $ $ $ $ 315,943 315,943 30,923 30,923 years 1–2 – – – – $ $ $ $ 141,434 141,434 83,468 83,468 years 3–5 – – – – $ $ $ $ More than 1,294,459 1,294,459 1,138,619 1,138,619 5 years – – – –

SASKTEL 2019/20 ANNUAL REPORT | 105 5,121 161,883 193,295 176,021 139,057 Fair value Fair 1,133,553 $ 2019 5,121 amount 193,295 161,883 176,021 139,057 Carrying 1,003,280 $ 17,221 188,851 150,302 198,490 142,860 Fair value Fair 1,225,745 $ 2020 17,221

amount 188,851 150,302 198,490 142,860 Carrying 1,109,529 $ N/A N/A Level 2 Level 2 Level Level 1 Level Level 2 Level Fair value Fair hierarchy (b) hierarchy FVOCI Amortized cost Amortized cost Amortized Amortized cost Amortized Amortized cost Amortized Amortized cost Amortized Classification (a) Classification 8 23 18 16 Note

Note 29 – Financial instruments and related risk management, continued risk management, and related instruments 29 – Financial Note Routine operating transactions with related parties were conducted in the normal course of business and were accounted for accounted business and were of in the normal course conducted parties were transactions with related operating Routine transactions with the Corporation’s amount of the aggregate 31, 2020, amount. For the year ended March the exchange at expenses (2018/19 – operating 11.1% of (2018/19 – 7.3%), revenue of 8.1% approximately entities are other government-related (2018/19 – 0.6%). plant and equipment expenditures property, of and 1.9% 10.9%), Note 30 – Related party transactions Note 30 – Related the Corporation’sof its ownership through Saskatchewan of by the Government controlled is indirectly The Corporation Crown transactions with various Saskatchewan are financial statements Included in these consolidated CIC. parent, by the control common by virtue of to the Corporation related and commissions ministries, agencies, boards, corporations, and significant influence control and enterprises subject to joint corporations and non-Crown Saskatchewan Government of has elected to entities”). The Corporation to as “government-related referred (collectively Saskatchewan by the Government of entities to limit the extent of which allows government-related Party Disclosures, Related under IAS 24 a partial exemption take entities. party transactions with government or other government-related about related disclosures Embedded derivatives 31, 2020. and March 31, 2019, March as at derivatives with embedded had no contracts The Corporation There were no financial instruments measured at fair value using Level 3 inputs in 2018/19 or 2019/20 and no items transferred and no items transferred Level 3 inputs in 2018/19 or 2019/20 at fair value using no financial instruments measured were There between levels in 2018/19 or 2019/20. Investments carried at fair value through other comprehensive income other comprehensive fair value through Investments carried at Sinking funds is determined by the Saskatchewan income, comprehensive other funds, classified as fair value through sinking The fair value of secondary reflect the extent possible, valuations by investment dealers. To provided using information Finance Ministry of these securities.pricing for Cash, trade and other receivables, trade and other payables, and notes payable Cash, trade and other receivables, Financial instruments measured at amortized cost amortized at Financial instruments measured Long-term debt of rate at the market cash flows, discounted future value of debt is determined by the present long-term The fair value of debt instruments. Saskatchewan of the equivalent Province for interest a) Classification details are: FVOCI – fair value through OCI. – fair value through FVOCI details are: a) Classification to fair value measurements. the policies related discussion of for presentation b) See Note 2 – Basis of fair their payable approximate trade and other payables, and notes cash, trade and other receivables, The carrying values of these financial instruments. of values due to the short-term maturity Notes payable debt Long-term Thousands of dollars of Thousands Financial assets Cash As at March 31, March As at Fair value of financial assets and liabilities financial value of Fair Financial liabilities and other payables Trade Trade and other receivables Trade Sinking funds 106 | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES As at March 31,2020, theCorporation hasthefollowing significant commitments: Commitments Note 31–Commitmentsandcontingencies Key managementpersonnelcompensation iscomposed of: defined benefitpensionora contributionpension,andaservice recognition defined benefitpension. In additiontotheirremuneration, theCorporation alsoprovides non-cashbenefitstodirectors andexecutive a officers, either Key managementpersonnelcompensation plan intheamountof $0.3 milliononacost recovery basisfor theyearendedMarch 31,2020(2018/19–$0.3 million). In addition,theCorporation provided managementandadministrative services totheCorporation’s definedbenefitpension Note 30–Related partytransactions,continued results of operations. management that theirresolution willnothaveamaterial adverseeffector ontheCorporation’s consolidated financialposition with respect toclaimsandlitigation pendingat March 31,2020, cannotbepredicted withcertainty, itistheopinionof In thenormalcourse of operations, theCorporation becomes involvedinvariousclaimsandlitigation. Whilethefinaloutcome the allegations ascertified inthe2004action. finalized pleadings,documentandoraldiscovery totrial.TheCorporation continues tobelievethat ithasstrong defenses to 13, 2008. TheclassactionperiodwasextendedtoMarch 31,2014. Thematter willnowproceed intheusualfashionof enrichment onlyfor wireless customersduringtheperiodof April1,1987, and thedate 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, including Saskatchewan Telecommunications Holding Corporation andSaskatchewan On August9, 2004, aproceeding undertheClassActionsAct(Saskatchewan) wasbrought againstseveralCanadianwireless Supporting information Corporation’s consolidated financialstatements. appropriate, however, thepotentialfor large liabilitiesexistsandtherefore theseestimates could haveamaterial impactonthe effects are matters for judgment.Where noamountsare recognized, suchamountsare contingent, anddisclosure maybe whether recognition ordisclosure intheconsolidated financialstatements is required, andestimation of potentialfinancial of theoutcome of suchuncertain events(i.e.,beingvirtuallycertain, probable, remote orundeterminable),determination of The Corporation becomes involvedinvariouslitigation andregulatory matters intheordinary course of business.Prediction Accounting estimates, andjudgments Contingencies Post-employment benefits–defined contributionplans Short-term employeebenefits Thousands of dollars For theyearendedMarch 31, • • Capital projects $18.6 million(2018/19–$15.9 million). Operating activities$87.6 million(2018/19–$97.9 million)

$ $ 5,156 5,004 2020 152 $ $ 4,926 4,745 2019 181 SASKTEL 2019/20 ANNUAL REPORT | 107 6 2019 53,408 137,215 190,629 $ $ 67 2020 53,325 130,855 184,247 $ $ the unsatisfied portions of performance obligations related to contracts with a duration of one year or less; or of one year contracts with a duration to related obligations of performance portions the unsatisfied with the corresponds recognizes revenue the Corporation the where obligations of performance portions the unsatisfied to the customer. amount invoiced • • The Corporation has elected to utilize the following practical expedients and not disclose: practical expedients the following has elected to utilize The Corporation As at March 31, March As at dollars of Thousands Note 32 – Future performance obligations performance 32 – Future Note partially or to unsatisfied related future, in the to recognize expects Corporation the that revenue shows the below The table of the performance price of the transaction portion The unsatisfied 31, 2020. at March as obligations performance satisfied as follows: be recognized is expected to which to monthly services, relates obligations 1 year or less Between 1 and 3 years Greater than 3 years Greater 108 | BOARD OF DIRECTORS Board of Directors assuming hiscurrent role. within theorganization before holding avarietyof positions his career there in1996, and Casino inPrince Albert,beginning Manager of theNorthernLights Richard Ahenakew istheGeneral Board Member Richard Ahenakew broad rangeof investment and institutionalinvestorsina build long-termvaluefor retail an uncompromising visionto over 25yearsago,Westcap has into localcompanies. Founded billion incapitalfor investment that hasraisedinexcess of a private equityfundmanager a leadingventure capitaland and Chairof Westcap Mgt.Ltd., President, ChiefExecutive Officer, Grant J. Kook isFounder, Chair of theBoard Grant Kook

and Saskatoon) since 1992. and Saskatoon) since 1992. of theRamadaHotels(Regina and ChiefExecutive Officer Fund, andhasbeenthePresident international investorsyndicated On InvestmentsGroup Ltd., an Executive Officer ofCheung Grant isalsoPresident andChief Management BuyoutFunds. and severalhighnetworth Business DevelopmentFund, and MétisFund, FirstNations on aHome,FirstNations, Fund ManagertoHeadStart Fund Inc.Westcap isalsothe Fund, GoldenOpportunities first Retail Venture Capital funds, includingSaskatchewan’s schooling, and youth mentorship. schooling, andyouthmentorship. studies, post-secondary recognizing hisworktopromote with anhonorarydiploma Polytechnic presented Richard In 2011,Saskatchewan a milestonewithinCanada. provincial ChamberBoard, background appointedtoa the firstPresident of FirstNations and hasthedistinctionof being Commerce for overeightyears, the Saskatchewan Chamberof initiatives. Hehasalsoservedon strategies andcommunity offering insighttobusiness Cree DevelopmentsBoard, to serveontheAhtahkakoop Richard hasbeenappointed Ahtahkakoop FirstNation, A proud memberof the Federation Investment Committee. Federation InvestmentCommittee. Saskatchewan Teachers’ Health Authority, andthe Saskatchewan, Saskatchewan and 3sHealthShared Services Saskatchewan BlueCross traded companies, including numerous private andpublicly Grant servesontheboards of

Prince AlbertBoard of Police of Directors andservedonthe the Saskatchewan CAABoard presently anactivememberof past Chairperson.Heisalso Volunteer, Board Member, and throughout theprovince asa with theRed Cross Society Richard hasalsoworked closely for MissionZero. signing andisastrong advocate Albert miniSafety Charter taking theleadfor thePrince Richard wasinstrumentalin Recognizing workplace safety, Jubilee Medalof Distinction. Queen ElizabethIIDiamond and country, andreceived the within hiscommunity, province, his outstandingcontributions In 2012,hewasrecognized for Hockey Hallof Fame. Member of theSaskatchewan University Cup,andpastBoard Chair of 2013and2014 CIS of 2012TimHortonsBrier, Hockey Championship,Director for 2010CanadianWorld Junior Vice President of Sponsorship and 2004CanadianNokiaBrier, 2006 PotashCorp Vanier Cup, Kids, SponsorshipChairfor the Mike Weir MiracleGolfDrivefor Committee Memberof the of Saskatchewan, Executive Children’s HospitalFoundation as Voluntary PastChairof the organizations, includingserving He isactiveinmanycommunity Co-chair of the Association, andwasthe the World Entrepreneurs (CVCA), pastmemberof and Private EquityAssociation of theCanadianVenture Capital He isthepastVice President Asia Advisory Council. Asia AdvisoryCouncil. Saskatchewan-

warplane memorabilia. of vintagehistorybooksand with hisfamilyandisacollector Richard enjoysspendingtime of BusinessExecutive certificate. certificate, andaQueen’sSchool Nevada GamingManagement certificate, aUniversity of Reno & Associates Management College andhasaP.A. Douglas Saskatchewan IndianFederated Richard studiedat the Pow Wow. Northern LightsCasino as President andAdvisorfor Tourism Board of Directors and advisor for thePrince Albert He hasalsoservedasan Commissioners asChairperson. Business Magazine. Men bySaskatchewan the Province’s MostInfluential recognized in2008asoneof Year in1998and2003, andwas nominee for Entrepreneur of the of You Award, Ernst &Young 2008 B’nai Brith–We are Proud Tourism Leadership award, the recipient of the2014 Saskatoon in Saskatchewan. Heisalsothe ABEX BusinessLeader of theYear and wasrecognized asthe2018 the Centennialof Saskatchewan and Commemorative Medalfor Jubilee Commemorative Medal, 2012 QueenElizabethIIDiamond Saskatchewan Order of Merit, Grant isarecipient of the2013

SASKTEL 2019/20 ANNUAL REPORT | 109

Development Committee. InDevelopment Committee. of she joined the Board 2019, Blue Saskatchewan for Directors serves on the and currently Cross Social ResponsibilityCorporate Committee, as well as the Audit and Risk Committee. betweenJoeAnne resides Saskatoon, Winnipeg, Calgary, during and Regina Vancouver, the workweek. Most weekends find her enjoying the beautiful with her family, Saskatoon city of an ever- and making good use of bicycles and of collection growing running shoes! shared services, web applications services, shared and development, teaching and learning systems, and library systems. discovery and search She has taught Management as an courses and Marketing business strategyinstructor of decision-making atand strategic Business. School of the Edwards and up in Regina Rachel grew Osler, of a resident is currently She is passionateSaskatchewan. about the arts and may be seen dance flamenco in a variety of Saskatoon. around performances Water Appeal Board, and Swift Board, Appeal Water Joel has Board. Library Current in the localalso been active kids’ coaching community and basketball. lacrosse, hockey,

as one of theCDN Magazine as one of IT service organizations.IT service recognized JoeAnne has also been by top 10 women in IT in Canada. JoeAnne was nominated In 2016, completedand successfully atthe Quantum Shift Program Business,the Ivey School of as well as the Institute of Directors Directors, Corporate the through Program Education Business. School of Edwards As a long-time member of Business Association,Saskatoon’s the NSBA, she has served as and 2015, since a Director has served on the Economic global membership of leading global membership of Rachel obtained her Chartered Rachel obtained her Chartered designation (C.Dir.) Director College The Directors from McMaster University through of Board and the Conference and Canada. She is an M.B.A. the University of graduate B.Sc. and received Saskatchewan of diploma (PgD)a postgraduate from Technology in Software Calgary. the University of a Rachel was previously the and manager at director Saskatchewan,University of overseeing teams responsible of improvement continuous for in 2006. He also completed the completed He also in 2006. Program Education Directors of the Institute through (ICD.D.) in 2017. Directors Corporate on numerous Joel has served including boards, community the Swift of acting as President Party Saskatchewan Current Constituency Association, thethe Elmwood Golf Club,

results, and enabling business results, technology. through Rachel Heidecker Board Member is a leaderRachel Heidecker andin business strategy specializingtransformation, innovation, in technology, management, and marketing. executive,She is an experienced with and strategist manager, in ICT. experience 20 years of believer in Rachel is a strong thinking, continuous creative measured improvement, JoeAnne Hardy Board Member is the President JoeAnne Hardy Inc. WBM Technologies of theShe first joined WBM and industry Technology Information offices in WBM’s Today, in 1996. Canada employ over Western 350 team members focused on delivering technology the country. solutions across Born and raised in Saskatchewan, JoeAnne has served in various in the Northleadership roles including American IT industry, terms as consecutive three X Alliance, the Trust of President with aan IT industry association Joel Friesen Joel Member Board been a partner has Joel Friesen & Company lawwith Anderson 2013, since Current Swift firm in joined the firm inhaving initially this, he completed Prior to 2008. after Regina his articles in (with his Commerce completing at Distinction) and Law degrees Saskatchewanthe University of 110 | BOARD OF DIRECTORS The Directors Collegethrough Director (C.Dir.) designation from and obtainedherChartered CMA accounting designation Saskatchewan. SheholdsaCPA, (B.Comm.) from theUniversityof a Bachelorof Commerce designations since completing Jerri Hobackhasearnedseveral Board Member Jerri Hoback returned toSaskatoon where North Battleford. In1979, she Reeves BusinessCollegein Saskatchewan, Valerie attended Born andraisedinrural serving 12yearsasamember. McKercher LLPinSaskatoon after from theManagementTeam at Valerie Makela recently retired Board Member Valerie Makela firm’s 100-plus-yearhistory. with McDougallReady inthe woman toachievepartnership LLP), later becoming thefirst Ready (nowMcDougallGauley the lawfirm of McDougall articled withandthenjoined and alawdegree in1985. She (Political Science) degree in1982 obtaining aBachelorof Arts the Universityof Saskatchewan, Pamela Lothian isagraduate of Board Member Pamela Lothian apparel company. Priortothat, Marketing, acorporate adand Canada. HealsoownsDiscovery with locations across Western flooring distribution company siding, landscaping,and a wholesalemasonry, stucco, of TimberstoneDistribution, Darrell Kennedy istheowner Board Member Darrell Kennedy

and audit engagements. and auditengagements. accountant, performing assurance financial services, andasapublic electronics manufacturing, experience inoilandgasservices, Alberta andSaskatchewan. Shehas in awidevarietyof industries,in Jerri hasworked asanaccountant Conference Board of Canada. McMaster Universityandthe with McKercher LLP. of HumanResources into thepositionof Director litigation firmbefore moving Manager for ahigh-profile Administrator, andOperations as Executive Assistant,Office Valerie spentover25years career inthelegalcommunity. she establishedasuccessful Capital Corp.,aRegina-based She iscurrently aDirector of Lex Society of Saskatchewan. Association andtheArthritis Community Basketball and aDirector of theRegina the Regina BarAssociation Pamela isapastPresident of raising twodaughters. career asahomemaker concentrate onhersecond for 13yearsbefore electingto Pamela practisedwiththefirm chaired manygolftournaments, Regina GolfClubandhas Board Memberat theRoyal Association. Heisalong-time and Region HomeBuilders Institute andtheRegina the Saskatchewan Masonry Darrell isaBoard Memberof TaylorMade AdidasGolf. and Marketing Managerfor Sales he worked astheTerritory

of Saskatchewan Senate. an electedseat intheUniversity committees, andcurrently holds local boards, associations, and has heldpositionsonseveral the Cityof Prince Albert.Jerri Director of FinancialServices for Jerri iscurrently theAssistant as a volunteer with the SPCA. as avolunteerwiththeSPCA. Way Corporate Fundraiser, and Share Saskatoon, theUnited community through Care & staying involvedwiththe Administrators. Shealsoenjoys Calgary Association of Legal Administrators andthe Association of Legal memberships withthe Valerie currently holds Inc. fundraiserin2019. of thePrairieVascular Research and wasafounding member University of Regina in2009 Championships hostedbythe CIS Women’s National Basketball Volunteer Committeefor the also servedasCo-chairfor the management company. She Inc., aprivate equityfund of Lex CapitalManagement family investmentvehicle,and Community College. diploma from Lethbridge and aBusinessAdministration Business Managementcertificate Darrell hasaProfessional Heward andMike Sillinger. Tournament hostedbyJamie Shooting StarsFoundation Golf including theInaugural SASKTEL 2019/20 ANNUAL REPORT | 111

development sessions for on organizations numerous topics such as fundamentals of risk management,accounting, financial of interpretation and monitoring information, She hasfinancial performance. served on several community East including Arcola boards, ReginaCommunity Association, Limited,Exhibition Association and Gymnastics Saskatchewan. of the North Saskatoon BusinessSaskatoon the North of (NSBA), is currently Association in the Institute of enrolled Directors Directors’ Corporate and holds Program, Education and Director several Board Committee positions in industry and community- based associations. transportation industry and industry transportation the consulting to returned growth, to support business corporateexpansion, and from with clients recovery industries. many different supporterAlan is a passionate where he represented custom he represented where Canada harvesters in Western to the U.S. access regarding and other industry-related market issues. He was active as President theand Campaign Manager for constituency. local provincial DebbieGrant and his wife live in Assiniboia. currently He enjoys his family and travelling, while staying active in the community.

as an auditor, and later transitioned and later as an auditor, he was where to consulting and riskleading the technology in management practice Canada. Western a spans Alan’s work experience industries includingnumber of the Canadian Banking industry, Development, theEconomic With a bachelor’s degree in degree bachelor’s With a University the from Commerce a Chartered and Saskatchewan of AccountantProfessional (CPA, Alan startedCA) designation, with working his career LLPPricewaterhouseCoopers

Business, life member of the member of Business, life Canadian Custom of Association Harvesters Inc., and other various and organizations. committees in Grant’s background led him to sit on the agriculture Ownership Farm Saskatchewan He spent several years asBoard. an Agricultural Representative the Assiniboia Economic for Development Committee. years he spent four Additionally, of the Association of as President Canadian Custom Harvesters Inc., Glenys is a Chartered Professional Professional Glenys is a Chartered and was awarded Accountant, Fellowship in 2007. six years as aShe served for Councillor with the Institute of Accountants Chartered of including serviceSaskatchewan, She and Chair. as President also obtained the Chartered in 2011. designation Director and board Glenys facilitates training and executive

Glenys Sylvestre Board Member is Executive Glenys Sylvestre University Governance, Director, Regina. the University of at RShe has been with the U of over 20 years, previously for Dean andserving as Associate Hill Instructor with the Paul J. Business. Prior to herSchool of employment with the University, she was an Audit and Assurance Deloitte & Touche. Manager at Grant Payant Board Member from Grant Payant is retired farming, ranching, and numerous other businesses he has been involved in over the last few years, but plays an active role with his son who has taken over the agricultural-related businesses. He is a long-standing Canadian Western member of Saskatchewan Growers, Wheat Canadian Canola Growers, Independent of Federation clients across Western Canada Western clients across businesses for to prepare or to new owners succession their businesses to improve restructuring, financial through and acquisitions, or divestitures on the capacitytypically takes Officer Chief Executive or of whileChief Financial Officer working with his clients. Alan Migneault Alan MemberBoard in Saskatchewan,Born and raised is the President Alan Migneault Corp. As AJM Management of Management a Professional Alan works with Consultant, 112 | BOARD OF DIRECTORS COMMITTEE PRIORITIES Committee Priorities Board of Directors Priorities Grant Payant,Member Alan Migneault,Member Jerri Hoback,Member Joel Friesen, Member Rachel Heidecker, Chair Members TECHNOLOGY COMMITTEE CORPORATE AND GROWTH Priorities Alan Migneault,Member Valerie Makela, Member Darrell Kennedy, Member Jerri Hoback,Member JoeAnne Hardy, Member Glenys Sylvestre, Chair Members COMMITTEE RISK AUDIT AND • • • • and thesubsidiaries Oversee thegrowth strategies of SaskTel new technologies with afocus onevolvingthenetworksto Monitor theindustry’stechnologicalrisks, as partof theEnterpriseRiskProgram Monitor progress onthecybersecurityrisk accounting standards Oversee theimplementation of evolving

Priorities Glenys Sylvestre, Member Grant Payant,Member Valerie Makela, Member JoeAnne Hardy, Member Richard Ahenakew, Member Pamela Lothian, Chair Members RESOURCES COMMITTEE ENVIRONMENTAL HUMAN AND Priorities Pamela Lothian, Member Darrell Kennedy, Member Rachel Heidecker, Member Richard Ahenakew, Member J Members GOVERNANCE COMMITTEE oel Friesen, Chair • • • including theCEO Oversee executive succession plans, employee engagement Oversee managementefforts toimprove governance practices Ensure compliance withshareholder’s SASKTEL 2019/20 ANNUAL REPORT | 113

of SaskTel International, a fully International, SaskTel of Saskatchewanowned subsidiary of providing Telecommunications, solutions to communications and network providers service worldwide. operators service He was born, raised, and loves in Saskatchewan, educated active on and remains life, cottage the family farm. Jim also serves as the CEO Resources ProfessionalResources (CHRP) He is a member of designation. Saskatchewan of the Law Society Member as a Board and serves Foundation, the Wicihitowin for Directwest, SaskTel SecurTek, Junior Achievement,International, Wind Aviation. and West Doug was born and raised and is active in in Regina his community. best customer experience with him possible has rewarded associates of following a strong and customers over his career. he high energy, With infectious the tough has the edge to make and adecisions when necessary drives execution. will that strong theDavid is a caring member of and a true,business community trusted advisor to many. David and his partner Leanne Saskatoon just outside of reside children. grown and have four

having grown the Saskatchewan having grown by delivering fourfold operation client satisfaction excellent and financial performance. his 38-year career Throughout Technology in the Information he has held positions industry, Governmentwith Saskatchewan Workers’ Saskatchewan Insurance, and Co- Board, Compensation Limited. Services Data operators Doug began his career at SaskTel SaskTel at his career Doug began Counsel,in 1990 as Corporate and legal advice providing in Corporation to the services to business. Prior of every facet Doug practised joining SaskTel, 1983 to 1989. from law in Regina ArtsHe holds a Bachelor of Regina, the University of from the Laws from a Bachelor of Saskatchewan, University of and a Certified Human advanced networks, and advanced data hosted in advanced built, and centres—designed, by SaskTel. operated industry leader, A recognized he has over 25 years of management and leadership Canada and across experience David’s experience in the U.S. roles, spans sales and operational CompuCom at including roles His passion for and Rogers. the and pursuit of excellence

Jim Dundas Officer Chief Information in Prior to joining SaskTel Jim Dundas was November 2013, CGI, at President Vice Regional he had overall executive where in operations for responsibility the He received Saskatchewan. Builder Award CGI prestigious leadership exceptional for achievements, David Ekstrand Business Sales Vice President, David Ekstrand leads the team responsible SaskTel and sales, marketing, for business SaskTel’s for operations are These services market. by and assured delivered qualified andDavid’s team of communications experienced over and IT professionals most Saskatchewan’s and Solutions President and Chief Executive and President Officer (CEO) Doug Burnett In January 2019, and was appointed President Prior to his appointment, CEO. President Doug served as Acting He also served as Vice and CEO. Human Resources of President and Services, and Corporate SaskTel of Acting President June 1, from International 2009. 2008 to October 19, Doug Burnett SaskTel Executive SaskTel Charlene Gavel variety of senior leadership Charlene earned a Bachelor Chief Financial Officer positions throughout her career. of Administration degree from Most recently, she has held the University of Regina and As Chief Financial Officer, the position of Vice President is a Chartered Professional Charlene Gavel is responsible and Chief Financial Officer at Accountant, CA. She has also for the Corporation’s financial SaskTel International. Prior to achieved the Institute of activities and provides leadership that, Charlene held positions with Corporate Directors designation. in the development of financial the Regina Qu’Appelle Health strategies. She is responsible for Charlene currently serves on the Region as Chief Financial Officer providing strategic, accounting, boards of SaskTel International, and Vice President of Financial and financial advice to the SecurTek, Directwest, the Services, and at Information President and CEO, subsidiary SaskTel Pension Plan, the Public Services Corporation (ISC) as Presidents, SaskTel’s executive Employees Pension Plan (PEPP), Chief Financial Officer and team, and the Board of and the Regina Downtown Vice President of Finance and Directors. Charlene has extensive Business Improvement District. Administration. experience and has held a

Daryl Godfrey His SaskTel International Board for the University of Chief Technology Officer assignments include Network Regina Faculty of Engineering Services Director in Leicester, and Applied Science. Daryl has As Chief Technology Officer, UK and Chief Technology a BScME and P.Eng from the Daryl Godfrey’s 37-year Officer for Tanzania University of Saskatchewan and career with SaskTel includes Telecommunications Company. is a member of the Association senior positions in Network Daryl has held positions in the of Professional Engineers Planning and Provisioning, Regina Engineering Society and and Geoscientists of SaskTel International, Business on the Board of TR Labs. He Saskatchewan (APEGS). Development, and Stentor. is a member of the Advisory

Doug Kosloski In his over 20 years at CIC, through McMaster University. Vice President, Corporate Counsel he held several positions, Doug received the Queen’s and Regulatory Affairs and Chief including General Counsel and Counsel (QC) designation in Privacy Officer Corporate Secretary, and Vice 2014, which recognizes lawyers President, Economic Initiatives for exceptional merit and In January 2020, Doug Kosloski Division. Prior to CIC, Doug contributions to the was appointed Vice President was Legislative Analyst with legal profession. of Corporate Counsel and Saskatchewan Environment Regulatory Affairs, and Chief He is also a member of and Resource Management and Privacy Officer. Doug is numerous boards and began his career with Willows, responsible for SaskTel’s Legal associations, including: Howe & Linka as Barrister Department, Chief Privacy the Institute of Chartered and Solicitor. Office, Carrier Relations, Carrier Professional Accountants Services, Land and Easements, His educational background is of Saskatchewan, Regina and Regulatory Affairs, including equally as extensive as his career Downtown Business regulatory policy matters, as well and includes a Bachelor of Arts Improvement District, as SaskTel’s Legal Department. degree in Economics from the Saskatchewan Entrepreneurial University of Regina, a Bachelor Fund, SaskTel International, Doug was previously Senior of Commerce degree in Finance, Directwest, SecurTek, Canadian Vice President and Chief Legal and a Law degree from the Bar Association, Canadian Officer at Crown Investments University of Saskatchewan. Corporate Counsel Association, Corporation (CIC) and has He received his Chartered and the Law Society extensive knowledge of the Director designation in 2012, of Saskatchewan. Crown and private sectors. SASKTEL EXECUTIVE 114 | 114 SASKTEL 2019/20 ANNUAL REPORT | 115

loyalty, and strategic planning. and strategic loyalty, earned a Bachelor of Katrine the from degree Commerce and Saskatchewan University of from in Marketing a certificate She serves Queen’s University. Regina on the Hospitals of and is a group Board Foundation Fitness. She Evolution leader at children, is married with three loves to travel, and spend time at the lake. She was born and raised in born and She was a has Darcee Saskatchewan. and Arts degree Bachelor of certificate Public Relations Regina, of the University from Social Corporate as well as a the from certificate Responsibility She also Toronto. University of Directors of serves on the Board Schools. for Computers for and the Chair of Directors of the TSASK Human Resources the Board. Committee of serves on the Shara currently International, SaskTel of boards as well and SecurTek, Directwest, Centre as Ignite Adult Learning and Sexual Assault Services She is also Saskatchewan. of the Advisor of the Executive Helping Our Own People SaskTel (HOOP) program. of is Past President Greg of Crime Saskatchewan with the Stoppers, Director Gun Club, andSaskatoon with Saskatchewan Director Shooting Corp. Skeet inBorn, raised, and educated enjoys living Greg Saskatchewan, of community in the growing Nadine and with his wife Warman daughter Cassidy.

wireless voice and data services, and data voice wireless internet products, service, maxTV phone smartHOME, and wireline She is also accountable service. stores, industry-leading retail for dealer partners, customer care, and digital channels. held aPrior to this, Katrine positions withnumber of at accountability increasing Mobility in and SaskTel SaskTel and business product consumer management, advertising and customer communications, communities of Regina, of communities government, customer, and customer, government, the for relations community over has Darcee Corporation. and has SaskTel, 30 years with positions in of held a variety Communications, Marketing Customer Media Relations, Relations, Community Relations, andInternal Communications, Government Relations. SaskTel Interactive Solutions, and Human Resources. a B.Admin, Shara has an MBA and Regina, the University of from the Certificate and completed the from in Internet Marketing British Columbia.University of She has also been a Sessional the University of at Lecturer Chair She is the past Vice Regina. Authority Safety the Technical of (TSASK) Saskatchewan of Board Albert, North Battleford, Prince and Saskatoon. holds a Bachelor of Greg the from degree Commerce Saskatchewan University of of in the areas he focused where He has and Marketing. Finance for extension certificates received the University of from programs British Columbia and Queen’s As a dedicated University. is President Greg volunteer,

and Solutions Katrine White Katrine Sales Consumer Vice President, Consumer of President As Vice Sales and Solutions, Katrine White leads the team responsible marketing all corporate for brand management, strategy, advertising, communications, operations, sales, marketing and channel management for This market. consumer SaskTel’s includes the development and SaskTel’s management of Greg MeisterGreg Operations Vice President, Meister leads the SaskTel Greg building, for team responsible and connecting operating, customers to the Corporation’s networks, solutions,advanced and services. with SaskTel Beginning his career he has held positions in in 1993, Sales, and Operations, Marketing, and his family allowing Greg in theto live and participate Shara McCormick Human ResourcesVice President, Services and Corporate Shara McCormick In April 2019, President was appointed Vice and Human Resources of and is Services Corporate the Acting President currently Shara has SecurTek. of and CEO 1994 since SaskTel at worked in in various management roles Advanced SaskTel Marketing, Darcee MacFarlane MacFarlane Darcee and Corporate Vice President, Relations Government Corporate of President As Vice andCommunications for Relations Government MacFarlane Darcee SaskTel, external for is accountable and internal communications, 116 | CORPORATE GOVERNANCE STATEMENT SASKTEL 2019/20 ANNUAL REPORT | 117 On October 15, 2014, the CSA announced amendments announced the CSA 2014, On October 15, Corporate of 58-101 Disclosure Instrument 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 do not introduce The amendments selection process. to increase intended They are targets. quotas or mandatory women on of the representation regarding transparency no sanctions are There and in senior management. boards non-compliance. for 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

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. and Vice the Chair 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 118 | CORPORATE GOVERNANCE STATEMENT NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 3.2 NP 58-201,section3.2 (d) (c) (b) 1(a) NI 58-101F1,sections1(a)to(d) 3.1 NP 58-201,section3.1 COMPOSITION OFTHEBOARD successfully carryoutitsduties. board’s agendawillenableitto board andwhoensures that the is theeffective leader of the be anindependentdirector who The chairof theboard should is areporting issuer. director of anyotherissuerthat Disclose whetheradirector isa and of directors are independent; Disclose whetherthemajority the basisfor that determination; who are notindependentand Disclose theidentityof directors who are independent; Disclose theidentityof directors independent directors. a majorityof The board shouldhave (Summary)

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 Retired Grant Payant:INDEPENDENT Alan Migneault:INDEPENDENT Retired Valerie Makela: INDEPENDENT Lawyer Pamela Lothian:INDEPENDENT Darrell Kennedy: INDEPENDENT Jerri Hoback:INDEPENDENT Consultant Rachel Heidecker: INDEPENDENT JoAnne Hardy:INDEPENDENT Joel Friesen: INDEPENDENT Richard Ahenakew: INDEPENDENT Grant Kook, Chair:INDEPENDENT are independent. The majorityof directors ontheSaskTel Board (12 out of 12) Comments and Discussion and Comments Executive Director, UniversityGovernance at theUniversityof Regina President, AJMManagementCorp. Business Owner, TimberstoneRegina Business Owner, HobackEnterprisesInc. President, WBMSaskatoon Lawyer, AndersonandCompany General Manager, NorthernLightsCasino President andCEO, Westcap Mgt.Ltd. SaskTel align? Does Does Yes Yes Yes

SASKTEL 2019/20 ANNUAL REPORT | 119

Yes Yes Yes Does SaskTel align? SaskTel chairing meetings of the Board and ensuring meetings are properly properly ensuring meetings are and the Board chairing meetings of legally is conducted and business convened to set Board Secretary and the Corporate working with the CEO establish agendas meeting schedules and by full participation and encouraging monitoring meeting attendance meetings at directors between meetings with directors communicating to related any concerns and addressing in assessing taking a lead role performance or director committee, Board, individual abilities of full utilization to achieve assisting directors between working relationship an open and constructive promoting senior management and the Board communications chairs to maintain effective working with committee responsibilities and division of and senior management to the CEO and counsel advice providing and perspective to interests the shareholder’s representing management’s views to the shareholder management, and representing and relationships developing productive with the CEO, in conjunction stakeholders key and with the shareholder the Corporation representing holding in-camera sessions of no fixed duration where directors are are directors where duration no fixed holding in-camera sessions of concern to raise any issues of encouraged the Board as Chair of having an independent director and between Board responsibilities the division of clearly delineating management external advice to access the Board/directors for providing • • • • • • • • • • • • • • • 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: Comments and Discussion The Board is satisfied that its governance practices foster full and open practices its governance that is satisfied The Board mind to make of independence the it retains and that discussion and debate and the shareholder. the Corporation of decisions in the best interests and during all seven meetings held in 2019/20, seven (7) Board were There but present meetings, in-camera sessions without management regular held. were including all directors and open and candid discussion among, facilitate that practices Board include: independent judgment by directors, 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.

(Summary) Disclose whether the chair of the chair of Disclose whether is an independent the board the identity of disclose director; the role the chair and describe the chair. of Disclose whether the hold independent directors scheduled meetings regularly which members of at not present; management are such disclose the number of meetings held in the previous 12 months; if such meetings the not held, disclose what are open does to facilitate board and candid discussion among independent directors. The independent directors The independent directors scheduled should hold regularly which non- meetings at and independent directors management are members of not present. NI 58-101F1, section 1(f)NI 58-101F1, 1(f) NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 NI 58-101F1, section 1(e) 1(e) MEETINGS OF INDEPENDENT DIRECTORS NP 58-201, section 3.3 3.3 120 | CORPORATE GOVERNANCE STATEMENT NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 3.4 NP 58-201,section3.4 BOARD MANDATE 1(g) NI 58-101F1,section1(g) (e) (d) (c) (b) (a) policy for theCorporation; adopting acommunications management; and monitoringsenior including appointing,training succession planning, systems tomanagetheserisks; implementation of appropriate business andensuringthe risks of theCorporation’s identification of theprincipal and risksof thebusiness; other things,theopportunities takes intoaccount, among annually astrategic planwhich process andapproving at least adopting astrategic planning the organization; of integritythroughout they havecreated aculture CEO andexecutive andthat itself astotheintegrityof the to theextentpossible,satisfying responsibility for: the Corporation and the stewardship of acknowledges responsibility for written mandate whichexplicitly The board shouldadopta financial year. most recently completed board meetingsheldinthe record of eachdirector for Disclose theattendance (Summary)

expectations andresponsibilities of individualdirectors are delineated. The Board hasapproved Terms of Reference for Directors where the function asstewards of theCorporation and to: Board’s principaldutiesandresponsibilities, including responsibility to the elementsrequired by thePolicy. TheTerms of Reference outlinesthe The Board haswrittenTerms of Reference that contains themajorityof period inwhichtheindividualwasaBoard member. ** Figures inbrackets represent themaximumnumberof meetingsfor the were considered tobepresent. * Forthepurposesof thisreport, memberswhoattended meetingsinpart Glenys Sylvestre Grant Payant Alan Migneault Valerie Makela Pamela Lothian Darrell Kennedy Jerri Hoback Rachel Heidecker JoeAnne Hardy Joel Friesen Richard Ahenakew Grant Kook, Chair Director meetings attended byeachdirector in2019/20issetoutbelow. The Board heldseven(7)meetingsin2019/20. Thenumberof Board Comments and Discussion and Comments • • • • • management information systems monitor theintegrityof theCorporation’s internalcontrol and the shareholder, stakeholders andthepublic adopt policiesandprocesses toenableeffective communications with ensure effective succession planningprocesses appoint theCEO, evaluate theperformance of seniormanagementand systems tomanagetherisks Corporation isengagedandoverseetheimplementation of appropriate participate inidentifyingtheprincipalrisksof thebusinessinwhich direction andannuallyapprove theCorporation’s overallstrategic plan provide leadershipinsettingtheCorporation’s long-rangestrategic Meetings Attended* 7 7 7 7 7 7 7 7 7 6 7 7 (7) (7) (7) (7) (7) (7) (7) (7) (7) (7) (7) (7)** SaskTel align? compliance Substantial Does Does Yes

SASKTEL 2019/20 ANNUAL REPORT | 121

Yes Yes Yes Does SaskTel align? SaskTel The Board’s principal responsibilities are described above. The text of the of described above. The text are responsibilities principal The Board’s the Corporate be obtained by contacting can Reference of Terms Board’s to the Board. Secretary Comments and Discussion to obtain stakeholders surveys internal and external regularly SaskTel in a participates the Board Chair of activities. The about Corporate feedback all subsidiary of the chairs of which is composed CIC, established by forum and of mutual interest issues where and senior CIC officials, boards Crown shared. are concern Reference of Terms not specifically identified in the the Policy Elements of has established (a), the Board and (g). Respecting include (a) the Board for (see discussion ethical business conduct of a culture promote that practices has delegated to (g) the Board respect NP 58-201). With of under section 3.8 Committee to oversee the Corporation’s to the Governance responsibility governance. to corporate approach the Chair of the Board, for Reference of Terms has approved The Board individual each Committee, each Committee and of the Chair the Board, the CEO. for Description and has adopted a Position directors, primary accountabilities Description sets out the CEO’s Position The CEO’s management address Reference of Terms The Board and responsibilities. non- applicable to monetary and Policy, duties, and a Final Authorization and approval Board require that sets out those matters monetary matters, to management. other matters delegates (EHR) Committee annually and Human Resources The Environment and personal the Corporation for indicators performance recommends annually The Board by the Board. approved are that the CEO goals for objectives, priorities, and includes Corporate a business plan that approves the Corporation to see that is responsible The CEO indicators. performance assigned achieves the business plan and to meet any other targets by the Board. the Description for has developed a written Position The Board CEO. each Committee, and the the Chair of the Board, Chair of

(Summary) the integrity of the of the integrity internal Corporation’s and management control systems; and information developing the Corporation’s to corporate approach set including a governance, principles and guidelines of specific to the Corporation. the board’s Disclose the text of written mandate. The board should: develop should: The board clear position descriptions for and the the board the chair of committee; each board chair of develop together with the CEO, the a position description for management’s delineating CEO develop or responsibilities; goals and corporate approve is the CEO objectives that to meet. responsible Disclose whether the board Disclose whether the board has developed written position the chair descriptions for the chair and the board of committee each board of and, if not, describe how the and the role delineates board each of responsibilities such position. and Disclose whether the board have developed a written CEO position description for the CEO. (b) (f) (g) should also The written mandate receiving for measures address (for stakeholders from feedback stakeholders for example, a process directors); independent to contact and and the expectations including directors, of responsibilities meetings and basic duties to attend in advance. materials review NI 58-101F1, section 2 2 POSITION DESCRIPTIONS NP 58-201, section 3.5 3.5 NI 58-101F1, sections 3(a) and (b) 3(a) NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 122 | CORPORATE GOVERNANCE STATEMENT NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA (b) 4(a) NI 58-101F1,sections4(a)and(b) 3.7 3.6 NP 58-201,sections3.6 and3.7 CONTINUING EDUCATION ORIENTATION AND opportunities for alldirectors. provide continuing education Describe themeasures taken to the Corporation’s business. directors andtothenature of of theboard, committees, and orient newdirectors totherole Describe themeasures taken to is current. the Corporation’s business and ensure theirknowledgeof enhance theirskillsandabilities opportunities for alldirectors to continuing education The board shouldprovide the business. nature andoperation of are expectedtomake, andthe contribution individualdirectors board andcommittees, the fully understandtherole of the comprehensive orientation and new directors receive The board shouldensure (Summary)

authorized bytheCorporation ortheBoard. external developmentopportunitiesrelated totheirdutiesasdirectors where new developmentsincorporate governance. Directors canparticipate in need toeffectively discharge their responsibilities, andbest practices and and responsibilities of boards, committees anddirectors, theskillsdirectors of CICsubsidiaryCrown boards. Theprogram hasfocused onthekey roles Each year, CICsponsorsacomprehensive education program for directors the business. educational sessionstodirectors toexplaintechnicalaspectsof to theBoard andseniormanagement.Managementhasalsodelivered in variousaspectsof thetelecommunications industryare invitedtospeak about thebusiness.Priortosomeregular Board meetings,outsideexperts New directors are ableto meetinformally withseniormanagerstolearn strategic plan,organizational structure, andresponsibilities of seniorstaff. addresses key industrytrends, criticalbusinessrisksandchallenges,the an orientation sessiondelivered bymanagement.Theorientation session comprehensive Directors’ Reference Manual,andnewdirectors receive The Corporation provides allmembersappointedtotheBoard witha opportunities madeavailabletodirectors are describedbelow. processes, andbestpractices incorporate governance. Otherdevelopment focuses ontheskillsthat directors needtodotheirjobs,effective Board to thebusinessandindustry. CICdeliversatrainingprogram that Management provides newdirectors withacomprehensive orientation Comments and Discussion and Comments SaskTel align? Does Does Yes Yes

SASKTEL 2019/20 ANNUAL REPORT | 123

Yes Yes Does SaskTel align? SaskTel

t can be obtained by contacting t can be obtained by contacting Conduc of Code the Directors’ of A copy can be obtained by Conduct of the Business Code of A copy CIC. SaskTel. contacting Code with the Directors’ monitor compliance the Board Committees of Committee monitors compliance . The Governance and the Business Code to and sponsorship policies and is responsible donation with Corporate the The Chair of Code. the Directors’ and enforce monitor, administer, meeting any such issues each regular at to the Board Committee reports to the Board report by the Committee, and submits an annual addressed Code. with the Directors’ compliance regarding of the The Audit and Risk Committee monitors the financial performance respecting to meet its responsibilities and assists the Board Corporation controls, reporting, risk management, internal and financial accounting the internal and with The Committee interacts directly and accountability. among other to the Committee concerning, external auditors, who report assets. Corporate of treatment illegal or improper of things, any instances including quarterly risk management reports, The Audit Committee receives to the the Committee reports to legal risks. The Chair of related reports by the Committee, meeting any such issues addressed each regular at Board risk management reports. summaries of receive and all directors health with environmental, The EHR Committee monitors compliance with the including compliance programs, and human resource and safety, management that from reports The Committee receives Business Code. policies, legislation, with related among other things, compliance address, the any issues raised at the Committee reports The Chair of and regulations. the Board. meeting of each regular at Committee level to the Board no Therefore, capital and is not an issuer. does not have share SaskTel have been filed. change reports material Comments and Discussion , which Conduct of Code with the Directors’ must comply members Board Crown all its subsidiary of and applies to the directors was developed by CIC and its subsidiaries must the Corporation of and employees Officers boards. , which includes a whistle- Conduct of Business Code with SaskTel’s comply blowing policy. integrity and deter wrongdoing, to promote Each Code is designed corporation, as they apply to a Crown the Policy the elements of address illegal or unethical behaviour. report a mechanism to and provide

(Summary) has adopted a written code has adopted a written code ethical business conduct of and officers, the directors, for the Corporation; employees of the of how to obtain a copy monitors Code; how the board with the Code; and compliance change any material reference in the most recent report to any relating financial year or officer a director of conduct a departure constitutes that the Code. from The board should adopt a The board business of written code and ethics applicable conduct and officers to directors, the Corporation employees of integrity designed to promote The and deter wrongdoing. should address: code including of interest, conflicts transactions and agreements has or officer a director where interest; a material use of and proper protection assets corporate and opportunities; corporate of confidentiality information; fair dealing with the security Corporation’s holders, customers, suppliers, and employees; competitors, with laws, rules, compliance and and regulations; illegal or of reporting unethical behaviour. CONDUCT OF BUSINESS CODE AND ETHICS section 3.8 NP 58-201, 3.8 (a) (b) (c) (d) (e) (f) NI 58-101F1, section 5(a) board Disclose whether the 5(a) NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 124 | CORPORATE GOVERNANCE STATEMENT NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 5(c) NI 58-101F1,section5(c) 5(b) NI 58-101F1,section5(b) 3.9 NP 58-201,section3.9 business conduct. promote aculture of ethical board takes to encourage and Describe otherstepsthe officer hasa material interest. agreements where adirector or considering transactionsand independent judgmentin to ensure directors exercise Describe stepstheboard takes 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 board shouldmonitor (Summary)

the Chairof theGovernance Committee. whistle-blowing policy. Whistle-blowingreports mayalsobemadedirectly to Committee respecting significantissuesthat havearisenpursuanttothe by theEHRCommitteeandmanagementreports totheGovernance arising undertheBusinessCode of Conduct are reported toandmonitored mechanism tofacilitate reporting byemployeesof issuesof concern. Issues Business Code of Conduct wasrevised toincorporate awhistle-blowing and anydirectives orpoliciesof theBoard ortheshareholder. In2005, the accordance withallapplicablelegislation, theBusinessCode of Conduct The Board expectsmanagementtoactethicallyinitsbusiness dealings,in senior management. Board meetingsandat informal gatherings betweentheBoard and reinforced byopenandhonestdiscussionaboutbusinessissuesat following current bestpractices incorporate governance. Thesepractices are The Board encourages andpromotes aculture of ethicalbusinessconduct by the director. may haveamaterial interest andsuchitemsare notdistributedto Management monitorsagendaitemstoidentifyanyissueswhere adirector assist theminproactively addressing potentialconflict of interests. the Governance Committee,theCorporate Secretary, andtheiradvisorsto services availabletothegeneralpublic.Thecompleted form isprovided to or itssubsidiaries.Therequired information excludes theacquisitionof SaskTel, andanymaterial contracts theymayhaveentered intowithSaskTel 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 2019/20. No waiversfrom eitherCodehavebeengrantedtoanydirector orofficer dealt withpursuanttoeachCodethefullBoard. compliance withtheCodesof Conduct.TheCommitteesreport anyissues The Board hasdelegated toitsCommitteestheresponsibility tomonitor Comments and Discussion and Comments

SaskTel align? Does Does Yes Yes Yes

SASKTEL 2019/20 ANNUAL REPORT | 125

Yes Does Substantial Substantial Compliance Compliance SaskTel align? SaskTel as the Nominating Committee functions The Governance Committee, of the Governance members Committee. All five (5) independent directors. are Chair, including the Committee Comments and Discussion a decision made by are SaskTel of directors Appointments of The Governance in Council. an Order the government through as Nominating their responsibility through Committee may, Board qualified nominees to the SaskTel Committee, recommend and to have those nominees be recommended consideration for the government. and ultimately to the CIC Board consideration for the reviews Committee, the Governance through The Board, with a view to annually directors and skill sets of composition and expertise, experience, mix of maintaining an appropriate and direction to support the strategic diversity on the Board the Corporation. needs of operating identifying the skill for Committee is responsible The Governance developing and maintaining a Skills sets needed on the Board, and directors, of current competencies the delineates that Profile to the recommending identifies any skill gaps while seeking and to fill any competencies have the required nominees that Board and skills, current competencies identified gaps. In addition to In the Board. of diversity in the composition encourage practices recommendations the Committee may receive seeking candidates, senior management, and the shareholder. the directors, from may be interviewed to determine their overall candidates Potential preclude would that conflicts any of the Board, fit with the needs and whether they have the time to participation, their effective a list of work. The Committee may recommend devote to Board which in turn to the Board, each vacant position for candidates approval. for to the shareholder candidates would recommend to make authority has the legislative The shareholder appointments. Board to related best practices following The Committee believes that and recruiting maintaining a skills matrix, appointments, Board skills, of combination who possess the required candidates decision- and diversity to add value to Corporate background, process. making supports an objective nomination The Governance Committee has written Terms of Reference Reference of Committee has written Terms The Governance which address setting out its purpose and principal responsibilities, and recruiting of to lead the process the Committee’s responsibility as well as the appointment to the Board, for candidates nominating and the member qualifications except the Policy other elements of tasks. The Committee has authority to engage ability to delegate its duties, subject to the outside advisors to assist it in performing has the right to nominate The shareholder the Board. of approval appointment to the Board. for candidates

(Summary) The board should appoint a nominating should appoint a nominating The board entirely of composed committee independent directors. Describe the process by which the by which Describe the process for identifies new candidates board nomination. board has aDisclose whether the board composed committee nominating and, independent directors of entirely the boardif not, describe the steps an objective to encourage takes process. nomination The nominating committee should committee The nominating have a written charter establishing the purpose, responsibilities, committee’s member member qualifications, structure appointment and removal, (including any authority and operations to individual directors to delegate and manner of or subcommittees), In addition, the to the board. reporting should be given committee nominating authority to engage and compensate to permit it outside advisors necessary a third to carry out its work. Where party has a legal right to nominate the selection and nomination directors, need not involve those directors of an independent of the approval committee. nominating

3.11 NP 58-201, section 3.10 NP 58-201, 3.10 Nomination of Directors Nomination 6(a) and (b) NI 58-101F1, sections 6(a) (b) NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 NP 58-201, section 3.11 126 | CORPORATE GOVERNANCE STATEMENT 3.14 NP 58-201,section3.14 NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 3.13 NP 58-201,section3.13 3.12 NP 58-201,section3.12 6(c) NI 58-101F1,section6(c) resources toboard work. devote sufficienttimeand each newnomineecan each nominee;andwhether competencies andskillsof skills of existingdirectors; the possess; thecompetencies and for theboard asawholeto the board considers necessary competencies andskillsthat should consider: the the nominating committee In makingitsrecommendations the newdirector nominees. and recommending totheboard become newboard members identifying individualsqualifiedto should beresponsible for The nominating committee of thenominating committee. consider theadvice andinput decision-making, andshould with aviewtoeffective appropriate size of theboard, should alsoconsider the of eachdirector. Theboard personality andotherqualities director; andconsiders the possessed byeachexisting competencies andskills a whole;assessesthe and skillsof theboard as considers thecompetencies nomination process which The board shouldadopta operation of thecommittee. responsibilities, powers,and committee, describethe If theboard hasanominating (Summary)

out inthePolicy andisdescribedabove. The process followed bytheGovernance Committeecomplies withthat set decision madebytheGovernmentthrough anOrder inCouncil. the Board. Theidentification andappointment of Directors of SaskTel are a The Governance Committeeidentifiestheskillsetsthat are required for and effective decision-making. governance, theCommitteemakes recommendations topromote timely As theCommitteeresponsible for theBoard’s approach tocorporate By legislation, theBoard iscomprised of amaximumof twelve(12)directors. guidelines of theInstrument. The Board’s nomination process isdescribedabove,anditmeetsthe can beobtainedbycontacting theCorporate Secretary totheBoard. within itsarea of responsibility. Acopy of theCommittee’sTerms of Reference serves inanadvisorycapacity, andmaymake recommendations totheBoard and operation of theCommittee.TheCommitteeisappointedbyBoard, committee, anditsTerms of Reference describe theresponsibilities, powers, The Governance Committeeperforms thefunctionsof anominating Comments and Discussion and Comments SaskTel align? compliance compliance Partial Partial Does Does Yes Yes

SASKTEL 2019/20 ANNUAL REPORT | 127

Yes Yes Does SaskTel align? SaskTel 3,500.00 40,000.00 $ 25,000.00 $ $ 2,500.00 $ 750.00 $ Director Remuneration Schedule Remuneration Director Audit and Risk Committee Chair retainer Other Committee Chair retainer Committee member meeting fee day $750; (Meeting Fees = Full Half day $375 – less than 4 hours) Board member retainer Board Board Chair retainer Board The EHR Committee performs the functions of a compensation committee. committee. a compensation of the functions performs The EHR Committee the EHR Committee, including of the (5) members all five Currently independent directors. are Committee Chair, the the EHR Committee, which serves as of members The majority of independent directors. are Committee, Compensation expense levels and set remuneration authority to fix CIC has the legislative authority to Committee has The Governance directors. guidelines for to directors’ to CIC) adjustments (and the Board to the Board recommend the respecting quarterly reports receives The Committee compensation. any anomalies and reports the Board of by members received remuneration to the Board. The member. acting as a Board for an annual retainer receives Each director set are the Board members of levels established by CIC for remuneration out below. Comments and Discussion A copy of CIC’s remuneration and expense guidelines for directors can be directors and expense guidelines for CIC’s remuneration of A copy to the Board. Secretary the Corporate 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 to changes the Board: to 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 subset used to determine performance this function, the Committee has the ability management. In discharging by the Board. external advisors, subject to approval to retain

(Summary) The board should appoint a The board committee compensation of entirely composed independent directors. has a compensation committeehas a compensation of entirely composed not, and, if independent directors takes describe the steps the board for an objective process to ensure determining such compensation. the board determinesthe board the directors for compensation of the Corporation. and officers Disclose whether the board Describe the process by which Describe the process COMPENSATION section 3.15 NP 58-201, 3.15 NI 58-101F1, sections 7(a) and (b) NI 58-101F1, sections (b) 7(a) NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 128 | CORPORATE GOVERNANCE STATEMENT 3.17 Thecompensation committee NP 58-201,section3.17 (c) NI 58-101F1,section7(c) NI 58-101F1 58-101F1 NI Instrument, Disclosure and 58-201, NP Policy, Governance Corporate CSA 3.16 Thecompensation committee NP 58-201,section3.16 public disclosure. compensation priorto and reviewing executive plans andequity-basedplans; incentive-compensation and director compensation, respecting non-CEO officer recommendations totheboard 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: operation of thecommittee. responsibilities, powers,and committee, describethe If theboard hasacompensation 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 (Summary)

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 eligibility for performance compensation. and theextenttowhichtargets are achieveddeterminesmanagement’s Board reviews andapproves theachievementof Corporate targets annually performance compensation programs, andannualperformance targets. The 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. its area of responsibility. Acopy of theCommittee’sTerms of Reference an advisorycapacity, andmakes recommendations totheBoard within of theCommittee.TheCommitteeisappointedbyBoard, servesin respecting compensation issues,aswellthepowersandoperation its Terms of Reference describestheCommittee’sresponsibilities The EHRCommitteeservesastheCompensation Committee,and the Board. advisors toassistitinperforming itsduties,subjecttotheapproval of the abilitytodelegate tasks.TheCommitteehasauthoritytoengageoutside well astheotherelementsof thePolicy except memberqualifications and addresses theCommittee’sresponsibilities withrespect tocompensation, as The Board hasapproved Terms of Reference for theEHRCommittee,which Comments and Discussion and Comments SaskTel align? compliance compliance Substantial Substantial Does Does Yes

SASKTEL 2019/20 ANNUAL REPORT | 129

Yes Yes Yes Does SaskTel align? SaskTel In addition to the Audit and Risk, Governance, and EHR Committees, 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; concerning recommendations and makes investments; and reviews of long-term technology in the Corporation, technology the evolution of of Terms the Committee’s of investments. A copy and technology strategies, to Secretary the Corporate can be obtained by contacting Reference the Board. Comments and Discussion Board, Board Chair, Committee Chair, and Committee evaluations as well evaluations and Committee 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 the next year, Committee evaluations Committee Chair and one year, into take The evaluations year. peer assessments the third and director the Policy. the elements of consideration conducted. were Chair evaluations Board and Board In 2019, 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

(Summary) If the board has standing If the board other the board, of committees than audit, compensation, committees, and nominating and identify the committees describe their function. 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 to each individual director the board. Disclose whether the board, Disclose whether the board, and individual its committees, regularly are directors to their assessed with respect contribution and effectiveness and, if yes, describe the used. process OTHER BOARD COMMITTEES BOARD OTHER section 8 NI 58-101F1, 8 BOARD ASSESSMENTS BOARD NP 58-201, section 3.18 3.18 its committees,The board, NI 58-101F1, section 9 9 NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 130 | 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 theboard ornominating Disclose whether, andifso, the policy: the following inrespect of policy referred toin(a),disclose If anissuerhasadopteda why ithasnotdoneso. adopted suchapolicy, disclose directors. Iftheissuerhasnot and nomination of women relating totheidentification 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 for thedirectors onits the issuerhasadoptedterm Disclose whetherornot effectiveness of the policy. the of effectiveness committee measures the nominating its or board the how so, if and, whether the policy, and achieving theobjectivesof progress bytheissuerin annual andcumulative effectively implemented, that thepolicyhasbeen the measures taken toensure objectives andkey provisions, a shortsummaryof its (Summary)

representation of womenonthe Board. It istheresponsibility of Executive Counciltoconsider thelevelof comprised of six(6)womenoutof atotalof twelve(12)members(50%). a totalof twelve(12)members(50%).Asof March 31,2020, theBoard was As of December 31,2019, theBoard wascomprised of six (6)womenoutof skill setsrequired for theBoard anddiversitystatistics. when Board appointmentdecisionsare made.Theinformation includesthe Annually, CICforwards information totheshareholder tobeconsidered progress madeinthepercentage of womenservingonCrown Boards. CIC maintainsstatistics regarding diversityof eachCrown Board, including 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 not subjecttotermlimits. Telecommunications HoldingCorporation Act.Director appointmentsare the LieutenantGovernorinCouncilpursuanttoTheSaskatchewan The appointmentandremoval of Directors istheprerogative of Comments and Discussion and Comments SaskTel align? Compliance Compliance Partial Partial Does Does Yes No

SASKTEL 2019/20 ANNUAL REPORT | 131

No Yes Yes Yes Does SaskTel align? SaskTel Currently, four (4) out of the twelve (12) Executive Officers are women (33.3%). Officers the twelve (12) Executive (4) out of four Currently, Comments and Discussion 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 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 regarding a target adopted a policy to provide SaskTel 2015, On August 13, positions. Officer women in Executive Officer least 40% women in Executive is to have at target The current positions by 2020. which of twelve (12) members, six (6) of comprised is currently The Board women (50%). are

(Summary) the target; and the target; cumulative and annual the progress of the issuer in achieving the target.

Disclose whether, and if so, Disclose whether, the considers how the issuer 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 for disclose the issuer’s reasons not doing so. For purposes of this Item, this For purposes of means a number a “target” or a range or percentage, numbers or percentages, of adopted by the issuer of or women on the issuer’s board of positions officer in executive the issuer by a specific date. Disclose whether the issuer regarding has adopted a target women on the issuer’s board. If the issuer has not adopted a disclose why it has not target, done so. Disclose whether the issuer regarding has adopted a target officer women in executive If the the issuer. positions of issuer has not adopted a target, disclose why it has not done so. If the issuer has adopted a to in either (b) or referred target (c), disclose: Disclose the number and (in percentage proportion on the directors terms) of women. are who issuer’s board Disclose the number and (in percentage proportion of officers executive terms) of including all major the issuer, who the issuer, subsidiaries of women. are (i) (ii) (b) (b) (d) 13 14(a) 14(c) 15(a) NP 58-201,and Disclosure Instrument, CSA Corporate Governance Policy, NI 58-101F1 Contact Us

Website: sasktel.com Phone: 1-800-SASKTEL (1-800-727-5835) Email: sasktel.com/about-us/contact-us Twitter: @SaskTel Facebook: facebook.com/SaskTel

Our Locations

SaskTel Head Office SaskTel District Offices Regina Moose Jaw 2121 Saskatchewan Drive 55 Ominica Street West Regina SK S4P 3Y2 Moose Jaw SK S6H 1W8

SaskTel International North Battleford 1855 Lorne Street, 3rd Floor 1201 100th Street Regina SK S4P 3Y2 North Battleford SK S9A 3Z9 P: Toll Free in US and Canada: 1-877-242-9950 Prince Albert E: [email protected] Second Floor 47 12th Street East Directwest Corporation Prince Albert SK S6V 1B3 355 Longman Crescent Regina SK S4N 6G3 Saskatoon P: (306) 777-0333 838 48th Street East Toll Free: 1-800-667-8201 Saskatoon SK S7N 1Y7 F: (306) 352-6514 Swift Current SecurTek Head Office 1831 North Service Road West 70 1st Avenue North Swift Current SK S9H 3T2 Yorkton SK S3N 1J6 Weyburn 1711 East Avenue Weyburn SK S4H 2Y7

Yorkton 210 York Road West Yorkton SK S3N 3N4

View this Annual Report at sasktel.com/about-us/company-info/financial-reports

For more information about SaskTel, our initiatives, and operations, please contact CONTACT US CONTACT Corporate Communications at sasktel.com/about-us/news.

132 | To obtain additional copies of the 2019/20 SaskTel Annual Report, please call 1-306-777-4897. AN AURORA NAMED STEVE

Notanee Bourassa – our own Technical Assistant in Emerging Technologies – received a Citizen Scientist recognition from NASA for capturing this image. While he may have been looking for northern lights, what he found was so much more. The Strong Thermal Emission Velocity Enhancement pictured here, STEVE for short, appears only during geomagnetic storms. Understanding this auroral phenomenon could have immediate, practical applications because the presence of such particles in the atmosphere can interfere with radio communications and GPS signals. FINDING TRUE NORTH

broadband became an even more important resource to keep the province connected and a lifeline for many. for and a lifeline connected the province to keep important resource became an even more broadband Broadband is the North Star at SaskTel and the reason has never been more evident. During the COVID-19 pandemic, pandemic, During the COVID-19 evident. has never been more and the reason SaskTel at is the North Star Broadband