PRESS CORPORATION PLC PRESS CORPORATION GROUP CHIEF EXECUTIVE OFFICER’S REPORT P R E C S L S P CO N RPORATIO On the Malawi Stock Exchange PCL Financial Statements | | Corporate Governance | ANNUAL REPORT 2020 ANNUAL Strategic Report ANNUAL REPORT 2020 2 PRESS CORPORATION PLC | Annual Report 2020 Strategic Report - Financial Highlights 2 - Five Year Group Financial Review 4 - Vision, Mission Statement, Core Values 5 - Chairman’s Report 6 - Group Chief Executive’s Report 9 - Business Review 13 Corporate Social Responsibility 36 CONTENTS Corporate Governance - Board of Directors 39 - Board Committees 40 - Internal Audit, Integrity and Diversity 42 - Profile of Directors 43 - Profile of Management 47 Financial Statements - Directors’ Report 50 - Statement of Directors’ Responsibilities 57 - Independent Auditor’s Report 58 - Consolidated and Separate Statements of Financial Position 64 - Consolidated and Separate Statements of Comprehensive Income 66 - Consolidated and Separate Statements of Changes in Equity 67 - Consolidated and Separate Statements of Cash Flows 69 - Notes to the Consolidated and Separate Financial Statements 70 On the Malawi Stock Exchange 176 Financial Highlights TURNOVER PROFIT ATTRIBUTABLE TO ORDINARY SHARES On the Malawi Stock Exchange K U S$ K US$ K US$ Millions Millio ns Millions Millions Milllions Millions 225 000 305 220 000 300 180 000 250 30 000 35 215 000 Financial Statements | 295 | 160 000 210 000 30 290 25 000 140 000 200 205 000 285 25 120 000 200 000 20 000 280 150 20 100 000 195 000 Corporate Governance 15 000 275 80 000 | 190 000 15 100 270 185 000 10 000 60 000 10 265 180 000 40 000 50 5 000 Strategic Report 5 175 000 260 20 000 170 000 255 0 0 0 0 16 17 18 19 20 16 17 18 19 20 16 17 18 19 20 MK'm 188 857 200 480 214 420 220 066 219 508 MK'm 101 311 125 557 149 960 155 668 157 942 MK'm 4 909 23 917 18 373 7 377 3 590 US$'m 16272 17 276 18 295 19 30020 291 US$'m 16 7 17 33 18 2519 1020 5 US$'m 140 173 205 211 205 K’m 188 857 200 480 214 420 220 066 219 508 K’m 4 909 23 917 18 373 7 377 3 590 US$’m 272 276 295 300 291 US$’m 7 33 25 10 5 Exchange rate (K/US$) 2016 2017 2018 2019 2020 Average monthly exchange rates 694.90 725.50 727.70 733.25 754.22 Year end exchange rates 725.40 725.60 729.80 736.70 771.73 4 PRESS CORPORATION PLC | Annual Report 2020 FINANCIAL HIGHLIGHTS Malawi Kwacha US Dollars 2020 2019 Change % 2020 2019 Change % Group Summary (in millions) Turnover 219 508 220 066 (0.25) 291.04 300.12 (3.03) Attributable earnings 3 590 7 377 (51.34) 4.76 10.06 (52.68) Shareholders’ equity 157 942 155 668 1.46 204.66 211.30 (3.14) Share performance Basic earnings per share 29.87 61.37 (51.34) 0.04 0.08 (50.00) Cash retained from operations per share 614.99 209.82 193.10 0.80 0.28 185.71 Net asset value per share (shareholders’ equity per share) 2027 1924 5.34 2.63 2.61 0.77 Dividend per share 26.01 26.01 0.00 0.03 0.04 (25.00) Market price per share 1 309.00 1400.00 (6.50) 1.70 1.90 (10.53) Price earnings ratio 43.83 22.8 92.23 42.50 23.75 78.95 Number of shares in issue (in millions) 120.20 120.2 0.00 Volume of shares traded (in thousands) 8 203.00 13 125.00 (37.50) Value of shares trades (in MK miilions) 8 100.00 15 341.00 (47.20) 10.74 20.92 (48.66) Financial statistics After tax return on equity 12.60 14.69 (14.26) 0.02 0.02 0.00 Gearing 17% 16% (6.25) Average monthly exchange rates 754.20 733.25 Year end exchange rates 771.70 736.70 ORDINARY SHAREHOLDERS’ FUNDS On the Malawi Stock Exchange K U S$ K US$ K US$ Millions Millio ns Millions Millions Milllions Millions 225 000 305 220 000 300 180 000 250 30 000 35 215 000 295 Financial Statements | | 160 000 210 000 30 290 25 000 140 000 200 205 000 285 25 120 000 200 000 20 000 280 150 20 100 000 195 000 15 000 275 80 000 Corporate Governance 190 000 15 100 | 270 185 000 10 000 60 000 10 265 180 000 40 000 50 5 000 5 Strategic Report 175 000 260 20 000 170 000 255 0 0 0 0 16 17 18 19 20 16 17 18 19 20 16 17 18 19 20 MK'm 188 857 200 480 214 420 220 066 219 508 MK'm 101 311 125 557 149 960 155 668 157 942 MK'm 4 909 23 917 18 373 7 377 3 590 US$'m 272 276 295 300 291 US$'m 7 33 25 10 5 US$'m 16 140 17 173 18 205 19 21120 205 K’m 101 311 125 557 149 960 155 668 157 942 US$’m 140 173 205 211 205 Annual Report 2020 | PRESS CORPORATION PLC 5 FIVE YEAR GROUP FINANCIAL REVIEW 2020 2019 2018 2017 2016 MK’m MK’m MK’m MK’m MK’m Restated Restated CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Turnover 219 508 220 066 214 420 200 480 188 857 Profit before income tax and share of profit of equity-accounted investees 37 896 36 964 47 302 49 269 24 194 Share of profit of equity-accounted investees net of income tax 349 3 415 4 995 4 842 5 543 Profit before income tax 38 245 40 379 52 297 54 111 29 737 Income tax expense (18 350) (17 510) (15 584) (14 438) (14 418) Profit after income tax 19 895 22 869 36 713 39 673 15 319 Attributable to non-controlling interests (16 305) (15 492) (18 340) (15 756) (10 410) Attributable to owners of the company 3 590 7 377 18 373 23 917 4 909 Dividend paid to ordinary shareholders (3 127) (3 127) (3 127) (2 104) (1 022) Retained profit 463 4 250 15 246 21 813 3 887 Basic earnings per share (MK) 29.87 61.37 152.85 198.98 40.84 Dividend per share (MK) 26.01 26.01 26.01 17.50 8.50 On the Malawi Stock Exchange CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Right of use assets, Property, plant and equipment 151 531 132 402 113 574 105 908 93 453 Investment properties 11 166 9 592 7 810 6 564 5 360 Investment in equity accounted investees 46 548 48 694 49 112 40 687 39 627 Other non-current assets 283 221 188 242 126 916 85 523 68 568 Net current liabilities (193 698) (97 899) (28 555) (15 780) (36 246) Total employment of capital 298 768 281 031 268 857 222 902 170 762 Financial Statements | | Ordinary shareholders’ funds 157 942 155 668 149 960 125 557 101 311 Non-controlling interest 85 687 75 601 66 810 56 287 46 214 Lease liabilities, Loans and borrowings 49 831 44 122 47 386 38 248 20 246 Provisions - - - 70 - Contract liabilities 297 119 141 - - Deferred tax liabilities 5 011 5 521 4 560 2 740 2 991 Total capital employed 298 768 281 031 268 857 222 902 170 762 Corporate Governance CONSOLIDATED STATEMENTS OF CASH FLOWS | OPERATING ACTIVITIES Cash generated from operations 101 872 47 398 40 889 44 643 42 486 Interest and tax paid (27 950) (22 178) (21 448) (24 764) (20 698) Cashflows from operating activities 73 922 25 220 19 441 19 879 21 788 Strategic Report INVESTING ACTIVITIES Interest/Dividend received 4 977 5 078 4 840 3 239 4 072 Capital expenditure (29 320) (27 979) (27 830) (26 908) (19 420) (Acquisition) /Disposal of subsidiaries net of cash (100) - - 17 216 (26) Proceeds from sale of property, plant and equipment and investment properties 557 2 117 4 686 1 617 1 585 Cashflows (used in) investing activities (23 886) (20 784) (18 304) (4 836) (13 789) FINANCING ACTIVITIES Dividends paid to non-controlling shareholders (7 615) (8 111) (8 537) (7 209) (5 079) Dividends paid to shareholders of the company (3 127) (3 127) (3 127) (2 104) (1 022) Increase/(decrease) in borrowings and lease liability (7 988) (619) (3 462) 16 297 (2 529) Cashflows (used in)/from financing activities (18 730) (11 857) (15 126) 6 984 (8 630) NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS 31 306 (7 421) (13 989) 22 027 (631) 6 PRESS CORPORATION PLC | Annual Report 2020 Vision/Mission/ Core Values VISION MISSION STATEMENT To be Malawi’s premier holding To create significant viable company businesses and contribute to socio-economic On the Malawi Stock Exchange development of Malawi and the region CORE VALUES We have adopted the acronym PRISE for our core values in the conduct of our business: Financial Statements | | People Centred We treat our employees and all our partners with dignity, fairness and respect, fostering an environment where people can contribute, innovate and excel. Responsibility We believe in Ubuntu philosophy that states “I am because we are”. We therefore commit to share our success with communities and sustain the environment we operate in.