Annual Report 2019 MTN Nigeria Communications PLC Good together Y’ello! 2 MTN Nigeria Communications PLC Annual Report and Financial Statements 2019 3 Contents 05 Overview 93 Financials 06 Notice of Annual General Meeting (AGM) 94 Statement of Profit or Loss 07 Who We Are 95 Statement of Other Comprehensive Income 10 A Brief History of MTN Nigeria 96 Statement of Financial Position Communications PLC (MTN Nigeria) 97 Statement of Changes In Equity - Group 13 Recent Awards and Recognition 98 Statement of Changes In Equity - Company 14 Key Financial Highlights 99 Statement of Cash Flows 17 Chairman’s Statement 100 Notes to the Consolidated and Separate Financial Statements 21 Strategic Report 22 Business Model and Strategy Other National Disclosures 27 Chief Executive Officer’s Statement 176 Value Added Statements 30 Our People and Culture 178 Five-Year Financial Summaries 35 Risk Management 40 Corporate Social Investment 181 Additional Information 182 Share Capital History 57 Governance 185 Request of Change of Address 58 Directors, Officers and Professional 187 E-Bonus Request Form Advisers 188 E-Mandate Activation Form 59 Board of Directors 191 Change of Mandate Form 64 Executive Management 193 Proxy Form 66 Corporate Governance Report 195 List of Unclaimed Dividends 82 Directors’ Report 86 Statement of Directors’ Responsibilities in Relation to Financial Statements 87 Audit Committee Report 88 Reports of Independent Auditors to the members of MTN Nigeria Communications PLC 4 MTN Nigeria Communications PLC Annual Report and Financial Statements 2019 5 Overview 06 Notice of Annual General Meeting (AGM) 07 Who We Are 10 A Brief History of MTN Nigeria Communications PLC (MTN Nigeria) 13 Recent Awards and Recognition 14 Key Financial Highlights 17 Chairman’s Statement MTN Nigeria sponsored the 2019 Kano and Zaria Durbars. Always a colorful display of culture and pageantry, the Durbar is a spectacular display of a thousand year old tradition, that involves a royal parade of men on horses adorned with beautiful garments. 6 MTN Nigeria Communications PLC Annual Report and Financial Statements 2019 7 Notice of Annual General Meeting (AGM) Who We Are Notice is hereby given that the Annual General Meeting Unclaimed Dividend Warrants (AGM) of MTN Nigeria Communications PLC will be held All Shareholders are hereby informed that the at 11.00 a.m. on Friday, May 15 2020 at the Rooftop Registrars of the Company are holding Dividend Event Hall, MTN Plaza, Falomo, Ikoyi, Lagos; to transact Warrants which have been returned as “unclaimed”. the following business: Some Dividend Warrants sent to Shareholders’ registered addresses are yet to be presented for Agenda payment or returned to the Registrars of the Company Ordinary Business for validation. All Shareholders are encouraged to 1. To receive the audited Financial Statements complete e-dividend Mandate Form to ensure that all for the year ended December 31, 2019 and the outstanding dividends are paid electronically. Reports of the Directors, Auditors and the Audit MTN Nigeria Communications PLC Committee thereon; Statutory Audit Committee 2. To declare a dividend; In accordance with Section 395(5) of the Companies 3. To elect/re-elect Directors; and Allied Matters Act, CAP C20 LFN 2004, a is part of the MTN Group – an emerging 4. To appoint Auditors; shareholder may nominate another shareholder for 5. To authorize the Directors to fix the remuneration appointment as a member of the Audit Committee by of the Auditors; giving notice to the Company Secretary at least 21 market communication services provider 6. To elect members of the Statutory Audit days before the Annual General Meeting. Committee. E-Dividend at the forefront of technological and Notes: Notice is hereby given to all Shareholders to open Proxy: bank accounts for dividend payment. A detachable A member of the Company entitled to attend and application form for e-dividend is attached to the digital innovation with a presence in vote at the meeting is entitled to appoint a proxy to Annual Report to enable all Shareholders furnish their attend and vote instead of him/her. In view of the accounts to the Registrars as soon as possible. Covid-19 pandemic, attendance shall only be by 21 countries in Africa and the Middle East. proxy. Designated proxies listed in the proxy form Right of Shareholders to ask Questions attached to the Annual Report are Dr. Ernest Ndukwe Shareholders have a right to ask questions not only at OFR (Chairman), Mr. Ferdinand Moolman (Managing the Annual General Meeting, but also in writing prior Director/Chief Executive Officer) and Mrs. Uto Ukpanah to the meeting. Questions should be submitted to the MTN Nigeria currently serves over 64 million people and communities nationwide. (Company Secretary). To be valid, executed forms of Company Secretary at the Company’s registered office Our enduring industry leadership in coverage, capacity and innovation, reflect the proxy should be deposited at the Registered Office of or via email - [email protected] not later steadfast and progressive nature of our customer base from day one. the Company or sent via email to than 5 days to the date of the Annual General Meeting. [email protected]. Alternatively executed proxy forms may be deposited with the Registrars, Electronic Annual Report United Securities Limited, 9 Amodu Ojikutu Street, The electronic version of the Annual Report is available Victoria Island, Lagos or sent via email to online for viewing and download from our website at [email protected]; www.mtnonline.com/investors. Shareholders who have MTN Group: Located in not later than 48 hours before the time of holding the provided their email addresses to the Registrars will meeting. receive the electronic version of the Annual report via email. Furthermore shareholders who are interested in 21countries Closure of Register of Members receiving the electronic version of the Annual Report Notice is hereby given that the Register of Members should request via email to and the Transfer Books of the Company will be closed [email protected] MTN Group: Subscribers worldwide on Monday, April 20, 2020 to enable the Registrar prepare for payment of dividend. BY ORDER OF THE BOARD 251million Dividend and closure of Register of Members If approved by members at the Annual General MTN Nigeria: Subscribers nationwide Meeting, Dividend will be paid on Tuesday May 19, 2020 at the rate of N4.97 per every 2 kobo ordinary share; to shareholders whose names appear in the Company’s Uto Ukpanah 64.3million Register of Members at the close of business on Friday, Company Secretary April 17, 2020 (bringing total dividend for the year ended December 31, 2019 to N7.92). (FRC/2014/NBA/00000005748) The MTN Group has operations in Afghanistan, Benin, Botswana, Cameroon, Cote d’Ivoire , Ghana, Guinea Bissau, Guinea April 22, 2020 Republic, Iran, Liberia, Nigeria, Republic of Congo (Congo Brazzaville), Rwanda, South Africa, Sudan, South Sudan, Swaziland, Syria, Uganda, Yemen and Zambia. MTN also has ISP licences in Namibia and Kenya and a Value Added Service licence in Ethiopia. 8 MTN Nigeria Communications PLC Annual Report and Financial Statements 2019 9 Who We Are - continued ...every celebration, every new door and open invitation, Our purpose is every fresh smile and addition to our story to make lives brighter We believe everyone deserves the was made possible Inspired by our vision, driven by an unshakeable belief, and guided by our values, benefits of a modern, we work towards one purpose - to make our connected life ...because of you! customers’ lives a whole lot BRIGHTER. Our dedication to enabling connections Our vision is that matter – among families, friends and to lead the delivery of a communities is fuelled by this conviction, and has not faltered since the very first call was made on bold, new digital world the MTN network - at Maritime House Apapa on May 16 2001. A proudly Nigerian company with a rich African heritage, we are committed to using our technology This commitment, coupled with the support and and assets to help build a better tomorrow - where trust placed in us by our customers, have made businesses expand; the economy grows, and people our growth and success possible. progress. Guided by the principle of shared value which enables shared prosperity; we know that the success and growth of our business are tied to the wellbeing and development of the communities where we live and work. That is why we are constantly looking for opportunities and possibilities; to make a positive and sustainable impact. The opportunity we have been granted to play a role in Nigeria’s evolution has been our great privilege. From this vantage point, we have borne witness to the ingenuity, drive, and resilience at the heart of our great nation. We understand that with real access and support, there is nothing Nigerians cannot achieve. And they choose us. People, businesses and communities across the country have kept faith with us for over 18 years; trusting us to connect them with each other and the world. Our values define what is important to us, they guide our conduct and inform our actions Our people drive our success and exemplify leadership, innovation, relationship, integrity and a can-do spirit – MTN’s core values. In a complex world of constant, rapid change and an ever-changing business environment, our organisational values are guiding principles that help shape our culture, inform our decisions and define our company. They are a shared set of beliefs that drive our behaviour and bind us together; permeating every aspect of our company, including our relationships with and among our employees, customers and partners. 10 MTN Nigeria Communications PLC Annual Report and Financial Statements 2019 11 A brief history of MTN Nigeria The history of MTN Nigeria overlaps with some of the most revolutionary events that have taken place in the telecoms sector of the country and one story cannot be told without MTN’s services touching on the other.