Digi - Annual Report 2016

Download as pdf or txt
Download as pdf or txt
You are on page 1of 162

Inspiring Your

Digital Life
Annual Report 2016
Every year, we connect more and more
people, and now serve 12.3 million mobile
customers who are increasingly digital
savvy.

As your digital life partner, our commitment


is to innovate services to meet your needs
now and for the future. We listen to you to
ensure you have the best experience on our
consistent 4G+ network, and the freedom
to do everything you want, anytime,
anywhere on your mobile.

Our focus on transforming our business is


so we continue being a high-quality digital
provider for you. And this makes us well-
positioned for continued growth.

Welcome to the Digi Augmented Reality App

Enjoy the interactive content in 6 easy steps:

1 + 2 3 4 5 6

Search for the Digi AR Click the app and Once installed, Click the start button Look for the ‘AR Icon’ You may click on the
(Augmented Reality) install (Please check launch the Digi from the Digi AR in the Annual Report interactive button to
App on the Apple App your device AR App App to launch the AR and scan it with the explore additional
Store or Google Play compatibility before scanner AR scanner to enjoy content
Store with your smart installing) the interactive AR
device content
WHAT’S
Welcome to our
2016 Annual Report
INSIDE
Business 002 At A Glance
Review 004 Chairman’s Statement
006 Making Digital Beneficial for Everyone
008 CEO’s Statement
012 Management Discussion and Analysis:
Strategy and Performance Review
022 5-Year Financial Summary
024 Share Development and Shareholdings
028 Event Highlights
034 Accolades

Sustainability 036 Ethics and Compliance


039 Winning Team
041 Climate Change and Environment
043 Empower Societies

Governance 046 Board of Directors


048 Directors’ Profile
052 Management
054 Management Profiles
056 Statement on Corporate Governance
069 Statement on Risk Management
and Internal Control
075 Audit and Risk Committee Report
078 Nomination Committee Report
080 Additional Compliance Information

Financials 082 Directors’ Report


085 Statement by Directors
085 Statutory Declaration
086 Independent Auditors’ Report
091 Statements of Comprehensive Income
092 Statements of Financial Position
093 Statements of Changes In Equity

20th
095 Statements of Cash Flows
097 Notes to the Financial Statements

Annual General Meeting Additional 142 List of Properties


Information 145 Disclosure of Recurrent Related
Nexus Ballroom 2 & 3, Party Transactions
Connexion @ Nexus, No. 7, 146 Statement on Directors’ Shareholdings
Jalan Kerinchi, Bangsar South City, 147 Notice of Annual General Meeting
59200 Kuala Lumpur, Malaysia 151 Form of Proxy
153 Independent Limited Assurance Statement
Tuesday, 9 May 2017 at 10.00 a.m. 156 Corporate Information
157 Corporate Structure
158 Corporate Directory
002 Annual Report 2016 Digi.Com Berhad

2016 Inspiring our customers’ digital lifestyles by


innovating across every area of our business,

At A Glance built on strong foundations in being a responsible,


people-oriented company

12.3 million
Customers

8.1 million
RM6.23 billion Internet customers
Service Revenue

45% 3 - 4GB
EBITDA Margin
average monthly data usage
by customers
RM1.67
billion
Normalised
Profit After Tax

Smart
RM1.63 billion 12.00 p.m. Meeting Rooms
Dividend Payout power down electricity for an hour powered by sensor to conserve
at lunch time to conserve energy energy when empty

DIGITISING
SAFETY
Digi’s Permit
To Work is
Malaysia’s first
location-based
More than
app to strengthen
6 million HSE governance
customer interactions at sites
on our social media
channels daily
Inspiring Your Digital Life Annual Report 2016 003

1.5 million active


users on MyDigi App

Rated Best Local App on

10% bill payments


now on MyDigi

More than close to 130,000


10 million Malaysians engaged
visits per month to through Empower
digi.com.my Societies programmes

100% digital
and paperless
experience in new More than
retail stores
1.6 million
visits to Digi Stores
86%
dealerships powered
by Mobile Sales App
nationwide
eQMS virtual queue
system gives customers
more freedom more than

15,000
retail touchpoints
42 self-service nationwide
Registering
kiosks enabling SIM new lines as fast as
replacements
20 seconds
180 founded
participated
in employee 2 startups
innovation to build new digital
programmes ventures

40% 43%
76% Employee More than 2,000
women
leaders
women at
Board
Engagement happy employees
Scores nationwide
004 Annual Report 2016 Digi.Com Berhad

Chairman’s Statement

Dear Shareholders,
Across the globe, telecommunications
companies are reinventing themselves to
adapt to the fast growing digital world. And as
responsible, forward-looking leaders in these
disruptive times, we too, consistently ask
ourselves the all-important question: whether
we are the company we need to be to succeed
in the future.

We have confidently responded with a well-defined strategy


we believe will create new sources of growth as we continue to
deliver the fundamentals on which our business is built on. Similar
to the many key inflection points in our history, our clear future-
forward actions have positioned Digi well to compete, grow and
outpace this new data-centric digital world, and keep us ahead of
our industry.

Steady performance delivering valuable shareholder


returns

Our 2016 results bear this out in an increasingly competitive and


tough market environment, where traditional revenue streams
are threatened, beset further by global economic challenges.
Taking stock of the good, durable progress we have made within
this climate, the Board of Directors are pleased to share that Digi
has recorded steady financial and operational performance for the
year with an advanced data network that now serves 8.1 million
internet customers. This, from a broader 12.3 million customers
enjoying our wide portfolio of market-leading, mobile connectivity
and data services. We are surely making positive strides in our
ambition to become Malaysians’ preferred digital partner in their
everyday lives.

Our balance sheet remains robust with solid financial capability and
flexibility to fund our investments and operational commitments.
And as a result of our strong financial framework, I am pleased
to share that Digi’s shareholders were rewarded a net dividend
Morten Karlsen Sorby of 20.9 sen per share equivalent to RM1.63 billion for the year.
The 100% dividend payout ratio exceeds the company’s dividend
policy of distributing a minimum 80% of our net profits. These
Chairman
results show that we remain consistent in delivering our long-term
shareholder value commitment, a policy that will continue to have
the highest attention of the Board.
Inspiring Your Digital Life Annual Report 2016 005

Chairman’s Statement

BUSINESS REVIEW
Our ability to perform and hold to our remuneration policies have of trust is even more essential in our digital world. And we have
not gone unnoticed, having received recognition from the broader sharpened our strategy to further emphasise the need to maintain
corporate community. In particular, from The Edge Billion Ringgit a culture that safeguards the responsible and sustainable business
Club Awards 2016 for having the highest return on equity over practices we are known for, built on a solid foundation of strong
three years among companies with an overall market capitalisation moral values and a deep sense of integrity.
of RM10 billion and also being recognised in our Trading and
Services sector. Our steadfast commitment to good corporate This underscores our determination to be a trusted company,
governance has also received acknowledgements in Asia’s Best delivering services to our customers that guarantee their safety
Managed Companies 2016 awards by FinanceAsia, and the and privacy, creating an inclusive, dynamic workplace for our
MALAYSIA-ASEAN Corporate Governance Transparency Index, people, building trust with our stakeholders across our entire
Findings and Recognition 2016 by the Minority Shareholder value chain, digitally empower communities and respectfully
Watchdog Group. This is an excellent testament to the practices, manage our impact on the environment to create a better future
policies and strategy we have in place to succeed in this new and for all Malaysians. The details of our responsible leadership efforts
rapidly changing time. and commitment to set the standard for excellence in our industry
are summarised in the Sustainability section of this Annual Report.
Taking a bolder position in our digital reality A full disclosure of these initiatives is also laid out in Digi’s 2016
Sustainability Report online at www.digi.com.my/sustainability.
We live in a world of unprecedented constant technological
disruption, where the scope and reach of digitisation is altering Delivering future growth together
every aspect of our lives. Asia as a region is expected to add around
1.6 billion smartphone connections by 2020, over half of total Considering all we have accomplished in 2016, it is safe to say that
connections globally; a trend that indicates the sheer amount of we are at an excellent point from which to continue our journey
data traffic and information that will be shared over our networks. forward. The motivations that set us on this path remain the
And this is only the beginning. We will see mainstreaming of more same, that we adapt our business to meet our customers’ evolving
objects connecting to the internet, spelling out exponential growth needs. We intend to deliver on this, and the goals we have set for
for the Internet of Things, new technologies such as augmented ourselves to contribute meaningfully to our growth in the coming
reality, virtual reality, and robotics emerge, to name a few, as years. I am confident that our success will be achieved through
well as the advent of 5G in the next decade, that will dramatically the concerted effort and collective energy from everyone who is
transform our customers’ digital experiences, and change existing a part of this inspiring organisation.
business models.
On behalf of the Board, I would like to thank our management team
For all these reasons, we are excited about our future as and Digizens for their commitment to and courage throughout our
connectivity will be the enabler and the centre of all this disruption. digital transformation, undoubtedly a very exciting period of our
And we have a clear strategy built around Telenor’s ambition to history.
be our customers’ favourite digital life partner, to take a bold,
leadership position in the industry to facilitate and capture the Our appreciation also extends to the government of Malaysia,
opportunities offered by this digital revolution. Being a part of the Ministry of Communications and Multimedia (KKMM), Malaysia
Telenor Group, one of the world’s major mobile operators shaping Communications and Multimedia Commission (SKMM), various
digital globally, is a significant advantage for Digi. Leveraging the other agencies and our partner ecosystem who share in our
shared experience, scale, and transfer of innovation within the 13 steadfastness to realise Malaysia’s digital future, and expand the
markets in the Telenor network means our customers assuredly widespread benefits of digitisation for every part of society, every
stand to benefit from the innovations we quickly bring to Malaysia, industry and everyone.
in addition to those we innovate ourselves.
Before concluding, I would like to thank you, our shareholders,
Maintaining a responsible, transparent and trustworthy personally and on behalf of the Board of Directors for all the
business support and trust you have placed in Digi to succeed. I look
forward to sharing more of our strategy with you at our Annual
While we have set ambitious goals to succeed, we recognise that General Meeting in May.
our success lies not only in our ability to provide services that are
valuable to our customers but also with the high ethical standards Morten Karlsen Sorby
we uphold for the way we conduct our business. This relationship Chairman
006 Annual Report 2016 Digi.Com Berhad

Making Digital Beneficial for Everyone

For our Customers Inspiring

digital services
Delivering the most consistent Widest LTE-A We serve Across music, video, games,
4G+ network network 580,000 more cloud and sharing.

experience 41% footprint internet users


than before

We have invested
Solid
RM780mil #1

capex in our 85% Network


Latency
advanced 4G LTE
Capture My Contacts Visual
data network coverage Voice Mail

Our customers online

privacy and safety


remains a priority

Our security systems are Digi Family Give customers


ISO 27000 Information Safety App full control All-new Mobile Digital
Security Management to safeguard by digitising the MyDigi Sales Retail
Systems certified to ensure families customer journey App App Store
robustness of our processes

For our Investors

Malaysian #1 Most
Committed
Top 100 Companies

100% shareholdings to Corporate


for Overall CG &
Performance

dividend at 41.1% Governance

payout (2015: 40.9%)


Asia’s Best Managed
Companies by FinanceAsia
steady foreign
20.9 sen
per share
shareholding
at 9.9%
Brand Finance’s
MALAYSIA-
ASEAN Corporate
(2015: 10.1%)
Top 100 Governance
5-year total
Malaysia Transparency
Brands Index, Findings

49
shareholder
returns Telenor and Recognition
ASA % 2016
+57.3% 2016
Inspiring Your Digital Life Annual Report 2016 007

Making Digital Beneficial for Everyone

For our Employees

BUSINESS REVIEW
Building a strong
Invested close to

RM4 million in people development Introduced new digital


talent pipeline
learning platforms
Mentoring 8 CXO
Apprentices to accelerate
early leadership
development
29,000 total hours close to 100
of learning employees underdoing Hired
a Udacity nanodegree
121 interns
Belief in an 56% Employee
inclusive 44% Innovation
workplace Platforms for generating
Digitised
• 12 nationalities
• 20-62 age range
new ideas and workplace
improving customer
• 56% men | 44% women experiences Building a mobile • HR services
first culture with • Communications
employee • Mobile
Best Malaysian
interactions payments
Organisation by
on digital ... and more
TalentCorp Malaysia

For our Society and Environment


• ACCA Malaysia Sustainability Reporting
Empowering Awards (MaSRA) 2016
digital • FTSE4Good Emerging Markets Index
2016
communities • FTSE4Good Bursa Malaysia Index 2016 Acknowledged for
Equipping communities with internet
• Channel NewsAsia
Sustainability Ranking 2016 Sustainability
access, skills, and online safety habits
leadership
Pioneered •<
 1% growth in CO2
emmissions per customer
Supported
HSE industry vs 11.8% increase in
Malaysian collaboration
customers

entrepreneurship to standardise •A
 verage 1.25% growth
health & safety Impact on per KWh per customer
practices
Environment
2013-2016
008 Annual Report 2016 Digi.Com Berhad

CEO’s Statement

Dear
Shareholders,
Over the past year, we have been laying the
foundation to capture growth potential of the
digital ecosystem, reshaping our business and
taking the necessary digital leaps to innovate and
evolve around what our customers increasingly
want.

Before I share the highlights of this


transformational year, I would like to take the
opportunity to thank all our customers for their
confidence in Digi as their preferred digital
partner. Their openness and trust inspires us to
continue building out our digital strategy and make
ongoing improvements across all areas of Digi to
deliver on their growing mobile connectivity and
digital needs.

Albern Murty
Chief Executive Officer
Inspiring Your Digital Life Annual Report 2016 009

CEO’s Statement

Accelerating innovation to inspire our customers’ digital These innovations are delivered with an enriched connectivity
lives experience on our consistent 4G+ nationwide network. Here,
we have remained steadfast in investing to reinforce the quality,

BUSINESS REVIEW
In light of the explosion in data usage and emergence of multiple performance and future capacity of our network. In 2016, we
technologies all converging on the smartphone, we have stepped accelerated the expansion of Malaysia’s widest LTE-A network
up to the challenge of positioning Digi as an innovator, not merely now covering 41% of the population, added to a solid 85% 4G LTE
to keep up with trends but as a competitive advantage to stay footprint, supported by 7,600km of fibre network. Our consistent,
ahead of this new wave of digital disruption. stable network today connects 8.1 million mobile internet
customers of which 4.2 million are LTE subscribers.
Our strategy for continued growth and profitability is clear:
deliver great internet services over our advanced data network, Our leadership in network technologies has enabled us to
drive opportunities in digital services and applications, and introduce new innovations such as Voice over LTE (VoLTE),
develop new business models in platforms such as music, video enabling HD quality audio experience, faster call connections
and the Internet of Things (IoT). We delivered on these in 2016 and simultaneous use of data for our customers. This year, we
by focusing on what is essential to our customers to bring them intend to further enhance our seamless connectivity experience
an incomparable, high-quality experience with us. with Voice over WiFi (VoWiFi) services. More importantly, when
we deploy services on our recently acquired 900Mhz spectrum,
We listened carefully and delivered flexible data plans, and a key addition to our spectrum portfolio, it will provide stronger
innovative internet features to woo customers with highly data- indoor service, wider coverage and better network capacity for
centric lifestyles, who want more music and video streaming, the benefit our customers.
gaming, cloud and sharing services on-the-go. Our customers’
growing confidence in our digital offerings is seeing their usage Our people have been essential to the innovation process. We have
patterns averaging 3GB a month on our network. built an inclusive, fast, adaptive mobile-first culture to support
them through our digital transformation, and to fully understand
We are also enabling our enterprise customers’ digitisation why creating engaging digital experiences for our customers
journey, becoming a trusted partner in providing them more than is critical to our success and makes perfect sense in building a
just connectivity services. long-term future for ourselves. This is reflected in all areas of our
Digizens’ every day experience in Digi, from the time they tap
We reinvented the customer relationship journey, bringing an into work, use mobile money to pay for meals, learn on-the-go,
experience that is continually improved at every interaction engage HR services on their mobiles, to ideating and innovating
point with us, whether digital or physical. Our all-new self-care on processes, products and services like never before. Here’s an
MyDigi app today empowers 1.5 million customers with full empowered digital workforce having the freedom to innovate
control of their accounts anytime, anywhere, and this feature- every day, and I am truly proud of this.
rich platform will be a key point of interaction with customers
moving forward. Social media is also a popular point of customer A more comprehensive assessment of these activities is available
interaction with us, and where we continue to build our customer in the following Strategy and Performance Review section of this
care capabilities and experience. Annual Report.

Our in-store experiences have also improved tremendously, Delivering digital for the benefit of all
digitising frontline engagements with our Mobile Sales App (MSA),
which completes new line registrations as fast as 20 seconds. And We have also come together around a simple, powerful purpose:
we are ready to roll out a new digital retail store, a completely to deliver the promise of a digital world for all. While we deliver
paperless digital playground for customers this year. on this promise every day to our millions of customers, we are
equally and deeply committed to empower more segments of
We have also begun pursuing promising new areas such as IoT, society to benefit from digitisation. The aim is to create a more
connected cars and mobile financial services to enable a steady sustainable future for everyone, centered on connectivity. In
stream of innovative services for our customers, now and in the 2016, we committed our resources to extend our impact in this
future. I believe these ventures will also contribute to new and area through our six Empower Societies community programmes.
more equitable business models for us in the long-term.
010 Annual Report 2016 Digi.Com Berhad

CEO’s Statement

In particular, we introduced our Wanita Era Digital programme Cash flows from operating activities in 2016 totaled RM2.18
earlier in the year in efforts to bridge the digital gender gap by billion, registering a 4.6% growth. EBITDA margins increased 1.7
equipping women with basic internet and e-commerce skills. percentage points to 45 percent over the year, bearing testimony
There is an opportunity here to impact 6 million unconnected to our diligent attention to improve the efficiency of our operating
women to benefit from the freedom to connect not only as model and our emphasis on freeing up resources to move our
an internet consumer but an active participant in the digital business forward. Our performance is evidence of our overall
economy. And contributing to Malaysia’s digital growth, we have digitisation efforts, focus on excellent execution and our financial
also actively worked to develop the next generation of innovators strength.
and local content creation through our flagship incubator and
accelerator efforts, Digi Incub8 and Digi Accelerate, as well as Well positioned to win in a digital world
our social enterprise innovation programme, Digi Challenge for
Change. We expect to see digital technologies continue to disrupt the
market and business models in 2017. We are ready, and we
As important is our continued work to safeguard the digital have the agility, reach and infrastructure to respond to these
lives of our children, innovating new ways to build greater changes quickly. Entering into the next phase of our ongoing
digital resilience and responsible use of the internet with our digital transformation, we are shifting our focus from building
Digi CyberSAFE programme. Our approach in 2016 focused the solid foundation of digital capabilities needed for the future,
on building a strong peer-to-peer cybersafe network, with to delivering on the opportunities that are provided by that
the understanding that children are more likely to heed their foundation. And I am confident we will succeed, because we have
friends’ advice instead of adults. This was aided by relevant been brave to willingly disrupt our business and the industry,
projects that generated interest among our youths, in the form rather than wait to be disrupted.
of video challenges, youth camps, and more, supported further
by practical content on the topic made available online. More on I am grateful to our leadership team and our Board for their
this and details of our Empower Societies initiatives are available tenacity and guidance through this new and exciting time. And to
in the Sustainability section of this report, and in our online 2016 our employees who embody our Let’s Inspire credo, I thank each
Sustainability Report at www.digi.com.my/sustainability. of them for their dedication to our customers, and willingness
to embrace and lead change as we reshape our company for the
Staying resilient in the face of change future. Together, we have done well in maintaining a strong core
business, bringing new products and technologies to market,
In delivering our customer, innovation and empower societies remained financially sound, and stayed true to our DNA to deliver
agenda, we have kept close attention to the fundamentals of a steady 2016.
our business. This has been a strong year of execution for Digi,
where our entire organisation has been unrelenting with their To our customers and our shareholders, we are committed to
operational discipline and in efficiently delivering high-quality continue delivering value for you as we move forward in our
network and customer experiences across the board. I am journey to become your trusted, inspiring digital life partner.
pleased to report that the result is a year of steady performance
with service revenues totaling RM6.23 billion, over a solid 12.3
customer base. This cements Digi’s position as the second largest Albern Murty
operator in terms of revenue market share, and our subscriber Chief Executive Officer
market leadership.
Inspiring Your Digital Life Annual Report 2016 011
012 Annual Report 2016 Digi.Com Berhad

Strategy and Performance Review

+10.2% RM6.23 45%


POSTPAID BILLION SERVICE EBITDA MARGIN
REVENUE REVENUE +1.7pp stronger
2.1 million 12.3 million than a year ago
postpaid subscribers
subscribers

INDUSTRY- EFFICIENT 900Mhz


LEADING 4G+ CAPEX AND
NETWORK RM780 million 1800Mhz
41% LTE-A spectrum access
85% 4G LTE for 15 years
population coverage

DIGITISATION HEALTHY WINNING


OF CORE DIVIDENDS TEAM
BUSINESS above 4% dividend yield* Best Malaysian
>1.5 million active or 20.9 sen Organisation
users on MyDigi

* Dividend yield derived on 12 months rolling basis in 2016


Inspiring Your Digital Life Annual Report 2016 013

Strategy and Performance Review

Digi is a part of Telenor Group, a leading telecommunications assessment of Digi’s future prospects and business viability (see
provider shaping digital globally. Our innovative mobile pages 36 to 44).
connectivity and digital services benefit over 12.3 million

BUSINESS REVIEW
Malaysians in 2016; making us the largest operator in terms of We see increasing demand for our products and services because
subscriber market share in Malaysia and the second largest in they play an integral role in our customers’ digital life. We leverage
terms of service revenue. Among our total subscriber base, 64.7% analytics and in-depth customer insights to make sure we stay
are smartphone users and 65.8% are active internet users. in tune with market developments and customer expectations.
And we use governance committees, such as the Investment
We aspire to transform into an increasingly digital company with Committee, Commercial Forum and various digital innovation
a broader set of engaging products and services to inspire more platforms to make sure we are making the right investments and
Malaysians towards a digital future, yet being deeply rooted in go-to-market products and services to deliver value over the
highly efficient mobile telecommunication operations. We take short, medium and long-term.
our role as a digital enabler seriously, impacting millions in the way
they live, work, play and everything in between. Our Strategy

Our approach to delivering the best customer experience, efficient Becoming our customers’ favourite partner in their digital lives
cost management and investing for growth is central to what we is important for our future value creation and growth. Mobile
do. We have a strong combination of people, technology, networks is expected to be the primary channel of accessibility for almost
and other physical assets that set us apart from our competitors. everything in our customers’ lives, and we are deeply committed
Our innovation culture is crucial to us – and to the wider society. to creating value in our business by developing and providing
We have pioneered innovations in Malaysia’s telecommunication engaging products and services that satisfy our customers’ digital
arena, advancing our technologies, and establishing new ways needs. We will deploy scalable and commercial models for digital
of working to benefit our customers. Importantly, we have services opportunities while leveraging digital tools, technologies
the financial strength to invest in these areas to stay ahead of and ways of work to operate in the most cost efficient manner.
competition.
We are relentless in our drive to deliver the most stable and
The Malaysian mobile telecommunications market is extremely expansive 4G+ network (4G LTE and LTE-A) in Malaysia to ensure
dynamic and very competitive. There are risks and also exciting our growing customer base enjoys quality, consistent high-speed
growth opportunities within this industry. Our Enterprise Risk internet on Digi’s network anywhere across the country. This has
Management framework (see page 70) helps us identify and resulted in the robust growth in data consumption across our
mitigate the challenges and risks we face. Every year, we undertake postpaid and prepaid customers, contributing to Digi’s resilient
a materiality review to understand the societal and environmental financial performance, stronger EBITDA margin and healthy
issues that are important to our stakeholders. We have a flexible shareholders’ returns. Consequently, this provides Digi the necessary
and sustainable business model, enabling us to anticipate and flexibility and capability to invest for future data and digital growth
respond to changes in our markets. This model underpins our opportunities to continue creating value for our stakeholders.

Creating a strong and Leveraging digital tools,


engaging customer Customers’ Most technologies and ways of
Favourite Efficient
relationship, satisfying our Partner Operator work to become more cost
customers’ digital needs efficient

Being responsible,
Responsible Creating a winning team
accountable and transparent Winning
Business Team with a customer-driven,
because it makes good Conduct
collaborative culture
business sense
014 Annual Report 2016 Digi.Com Berhad

Strategy and Performance Review

Customers’ Favourite Partner During the year, the Malaysian Communications and Multimedia
Commission (SKMM) assigned 2 x 5Mhz of 900Mhz and 2 x
Internet-loving Malaysians spend a considerable amount of time 20Mhz of 1800Mhz spectrum bands to Digi for a tenure of 15
on digital products and services daily to stay connected on their years, for an upfront fee of RM598.5 million and annual fee of
social networks, and frequently enjoying real-time music and RM51.5 million with full implementation starting 1 July 2017. The
video entertainment online. This change in consumer behaviour spectrum allocation process and pricing on 900Mhz and 1800Mhz
is an opportunity for growth, but is also a challenge as increased spectrum bands have been fair and reasonable to enable operators
connectivity changes the social and safety landscape of digital to optimise network planning, deployment and quality coverage
living. Recognising this new wave of rapid digital adoption and for our customers.
usage among Malaysians, we have geared our business priorities,
investments and innovations to become our customers’ favourite In addition to the 4G+ network deployment, we commenced
partner at every stage of their digital journey. work on network readiness for the new spectrum assignment.
Our strategic access to the new 900MHz spectrum portfolio
Industry-Leading 4G+ Network will allow Digi to provide improved indoor coverage and quality
service experience for our customers, and bridge the spectrum
In 2016, we accelerated the nationwide expansion of our portfolio gap between industry players for a more level playing
industry-leading 4G+ network to serve more of Malaysia’s 32 field to deliver affordable and quality internet services to more
million population. Our LTE-A network footprint, now the widest Malaysians.
in Malaysia, grew from 29% to 41% of the population, covering a
total of 61 towns nationwide while our 4G LTE network extended Engaging Digital Products and Services
significantly from 65% to 85% population coverage, serving 275
towns. This is supported by our widespread fiber network that With a solid 4G+ network nationwide, we continued to strengthen
registered a solid 1,200km build out within the year, bringing our our internet positioning in prepaid with our Digi Prepaid LiVE and
fiber network to 7,600km. Digi Prepaid Best plans. Our prepaid products draw strong appeal
among young, entertainment-oriented customers who choose
Digi to enjoy worry-free digital services and the best video and

3G 4G LTE LTE-A music streaming experience on our robust 4G+ network.

92% 85% 41% As part of a tactical campaign to drive internet adoption among
prepaid subscribers, we offered competitive data quotas on our
monthly internet passes, and innovative digital services passes
Our strategic investment in our 4G+ network has been such as the unlimited SD video streaming for RM1 per day. Positive
instrumental in fuelling adoption of our LTE services. We saw a uptake of these new prepaid plans, in particular Digi Prepaid LiVE
sharp 81% growth of LTE subscribers to 4.2 million in the year, and and internet passes, spurred stronger growth in prepaid internet
an additional 586,000 new internet subscribers bringing our base adoption and data usage on our network. However, the adverse
of active internet customers to 8.1 million. impact from aggressive IDD pricing, intense competition and
weaker consumer sentiment counterbalanced this favourable
Two out of every three new internet subscribers are from our development. Nonetheless, we have taken bold steps to stabilise
postpaid base. This growing confidence in our network has seen our prepaid base with more sustainable earnings prospects, and
a significant growth in our customers’ data usage, with monthly focused on the opportunities arising from prepaid to postpaid
average usage surging by 0.9 times for prepaid and 1.4 times for conversions.
postpaid compared to last year.
On the postpaid front, we intensified our focus on driving growth
As part of our commitment to 4G innovation, we introduced voice with our new, simplified postpaid plans. Our customers have shown
over LTE (VoLTE) services in the year for our customers to enjoy genuine interest in the innovative features we have delivered in
better call experiences through high-definition quality audio, our postpaid products, including our unique weekend internet
faster call connections and simultaneous use of data. propositions to border roaming flexibility. This has fueled solid
acquisition momentum in this segment and a record high postpaid
revenue growth for the year.
Inspiring Your Digital Life Annual Report 2016 015

Strategy and Performance Review

Over and above our core product offerings, we augmented our Digi-X And Digital Innovations
home broadband plans with enticing non-stop entertainment
proposition to maximise the capabilities of our 4G+ network. Advancing our efforts to capture growth in the digital ecosystem,

BUSINESS REVIEW
This strategically positioned Digi as the choice provider for we formed a new digital venture-building division named Digi-X,
entertainment, empowering customers with the flexibility of led by our newly appointed Chief Digital Officer. The new
enjoying consistent high-speed internet at home and on-the-go. organisation is mandated to spearhead the development of
digitally adjacent businesses and competencies, and unlock new
Digitisation of Core Business business models and partnerships to generate alternative revenue
streams for Digi. Digi-X is given full autonomy to pace itself like
In the year, we focused on building a solid foundation of digital a start-up, challenge conventions, explore and innovate quickly
capabilities needed for our future, innovating around what our within a sandbox environment.
digital-first customers’ want to consume and how they want to
engage with us. One of our key enablers in this respect is our Being a part of Telenor is a significant advantage for us. We
MyDigi app, an intuitive and efficient self-serve digital channel are leveraging the global operator’s scale, experience and
that puts customers in full control of their accounts. It enables investments in areas such as the acquisition of global platforms
basic and frequently used functions such as account balance and capabilities, strategic partnerships with global digital players
status reports, bill payments, reloads, add-on subscriptions and and development of adjacent digital business prospects, for
rewards - all at our customers’ fingertips. We have received example, financial services and IoT. We will also tap on the analytics
positive response from our customers on the app, of which more capabilities across Telenor to enable personalisation of digital
than 1.5 million now actively use, a number that is growing by the services, recommendation engines for product development,
day. MyDigi will serve as a key point of interaction with customers digital distribution as well as smart planning and investment as
moving forward, and will see a rich feature upgrade in 2017 to part of our digital transformation journey.
better serve our growing user base.
Most Efficient Operator
Another key milestone in revolutionising and digitising our core
mobile operations was the deployment of our Mobile Sales App We remain committed to being operationally disciplined, and work
(MSA). A mobile solution that now empowers our Digi Store to drive aggressive cost transformation through solid governance
consultants and dealers to efficiently manage frontline customer and processes. We prioritise building network and IT ecosystems
interactions, in particular for new line registrations. The app that are open, agile and intelligent, and drive new technology
enables account activation with accurate identity and credit operating models that focus on common or shared platforms
verification all at the convenience of a smartphone or tablet. At end across Telenor Group and other business units.
2016, more than 86% of our dealers adopted our MSA platform.
We have the financial strength to make bold decisions to invest
We have also reinvented our in-store experience, and are ready in the things that set us apart. Our goal is to deliver sustainable
to roll out a new digital retail store concept for customers. The profitable revenue growth. With our focus on transforming our
new store format enriches the retail experience, using digital cost structures, we aim to grow our EBITDA and cash flow over
capabilities to serve our customers better and faster, from the long-term.
paperless transactions to efficient payment and self-serve
channels, focusing on minimising wait times and delivering more We have a prudent financial policy and strong governance over
value creating engagements with customers. Our new virtual our decisions to make investments, manage our debt, grow our
queue management system (eQMS), for example, gives customers business, and reward our employees and investors. To build our
greater convenience when visiting our store. It has notification business, we continue to make daring, informed decisions and
capabilities that allow customers to queue virtually, returning to undertake strategic investments to support growth in our core
the store only when notified that they are next in line to be served. mobile business and new digital revenue streams. We intend to
manage our net debt to EBITDA in a responsible way, below 2.0x
We will continue to digitise our customer journey, sharpening in the next three years while delivering healthy annual dividends
capabilities from these new digital services, supported by an agile to our shareholders.
core mobile operation to bring improved experiences at every
interaction point for more Malaysians nationwide.
016 Annual Report 2016 Digi.Com Berhad

Strategy and Performance Review

This approach gives us the financial flexibility to make long-term Record High Postpaid Revenue Growth of 10.2%
investments in the best interests of Digi, our stakeholders and
for the communities where we operate. Our financial strength Postpaid revenue grew 10.2% to RM1.96 billion, the highest
underpins the investments we make and enable us to continue to recorded growth in the last five years, alongside a stronger
innovate and stay at the forefront of a rapidly-changing industry. postpaid subscriber base that maintained a steady ARPU at RM81.

Financial Performance for The Year Our postpaid subscribers expanded to 2.1 million, an increase
of 259,000 subscribers from a year ago. 86.8% of postpaid
2016 has been an exciting and interesting year for us, where we
subscribers or 1.8 million are active internet users and have been
achieved a number of new milestones: our record high growth on
instrumental in fuelling postpaid internet revenue growth by
postpaid, 4G+ network leadership on the back of highly efficient
26.5% to RM966 million.
capex spending and emerging as Malaysia’s largest mobile
operator with 12.3 million subscribers.
Our strong postpaid revenue growth in 2016 stems from the solid
Resilient Service Revenue at RM6.23 billion execution of innovative internet offerings, meeting the needs of
our customers’ increasing digital lifestyle on the back of Digi’s
We had our best performing postpaid revenue growth of 10.2% robust 4G+ network nationwide.
with a solid acquisition trajectory to seal 2016 with service
revenue at RM6.23 billion, a low single digit decline at 1.9%, in line
with guidance. 10.2% postpaid revenue growth while postpaid
subscribers surged to 2.1 million
Our internet revenue strengthened 11.4% to RM2.31 billion or 1.96
Service
37.2% of service revenue, alongside the increase in smartphone revenue 1.78
(RM billion) 1.71 1.73 1.72
adoption to 64.7% and active internet subscribers to 65.8%,
representing 8.1 million subscribers. The solid growth in internet ARPU
(RM) 84
revenue significantly cushioned adverse service revenue impact 82 82 81 81
from challenging market conditions and evolving customer usage Subscribers
(’000)
behaviour.

Robust postpaid acquisitions during the year fortified our


subscriber base at 12.3 million, however weaker prepaid revenue
development trimmed blended ARPU from RM45 to RM42. 1.7 1.7 1.7 1.8 2.1

In line with the higher demand for sim-only subscriptions during 2012 2013 2014 2015 2016
the year, full year sales of devices and other revenue moderated
34.5% from RM566 million to RM371 million.
Defensive Prepaid Development in a Challenging Year
Resilient service revenue with the support of
12.3 million subscribers We experienced encouraging take-up of our new prepaid plans
Service especially Digi Prepaid LiVE and internet passes during the year.
revenue
6.33 6.35 6.23
Our move to rationalise the IDD pricing and step up on our
(RM billion) 5.89 6.13
internet value propositions favourably increased internet usage
ARPU
(RM) 48 48 47
among our prepaid base and helped stabilise prepaid ARPU and
45 margins.
42
Subscribers
(’000)
Intense competition in the prepaid market continued to put
pressure on data monetisation opportunities while the industry
faced relatively weaker consumer sentiment, and declining
demand on traditional voice and messaging services which still
10.5 11.0 11.4 12.1 12.3 forms a large proportion of prepaid revenue. Acknowledging these
challenges, we took a targeted segment approach to compete
2012 2013 2014 2015 2016 sustainably and reinforce our resilience in the prepaid market.
Inspiring Your Digital Life Annual Report 2016 017

Strategy and Performance Review

In 2016, we strengthened our prepaid internet revenue by 2.7% to


RM1.35 billion or 31.6% of prepaid revenue. We took aggressive Solid operational efficiency to support robust
steps to mitigate challenges in prepaid, focusing on higher postpaid acquisition activities and 4G+ network expansions

BUSINESS REVIEW
conversions, and driving sustainable prepaid revenue and margins
during the year. EBITDA
(RM billion)
3.04 3.16
2.93 2.98 2.96
At year end, prepaid revenue stood at RM4.27 billion, a 6.6%
EBITDA
decline from a year ago as prepaid ARPU weakened to RM35 amid Margin 46% 45% 45% 45%
various headwinds while our prepaid subscriber base remained 43%
relatively stable. Total Cost
(RM billion) 3.92
3.71 3.87 3.65
3.45

Opex
Leveled prepaid revenue amid challenging market 1.62 1.67 1.77 1.89 2.01
conditions and intense competition
Service COGS
revenue 4.61 4.57
(RM billion) 4.40 4.27 1.83 2.04 2.10 2.03 1.64
4.18
ARPU
(RM) 41 41 41 2012 2013 2014 2015 2016
38
35
Subscribers
(’000)
We delivered a stronger EBITDA margin at 45%, up 1.7pp
from a year ago as a flow through from stronger gross profit,
higher internet revenue contribution alongside efficient cost
8.8 9.3 9.7 10.3 10.2 management. Meanwhile, absolute EBITDA tracked marginally
lower at RM2.96 billion.
2012 2013 2014 2015 2016
During the year, we invested RM780 million capex - net of RM73
million savings from the fixed asset register review undertaken
Highly Efficient Cost Management with Stronger as part of good governance - to improve the quality, capacity
EBITDA Margin and coverage of our 4G+ network to support our core business
digitisation roadmap. Our efficient capex management uplifted
Cost of goods sold (COGS) improved by 19.3% to RM1.64 billion ops cash flow by 4.6% to RM2.18 billion or 33% margin.
from lower device costs and traffic costs during the year. Our
relentless cost focus led to higher gross profit at RM4.96 billion,
Robust ops cash flow alongside efficient capex to
an increase of 1.6% amid weaker service revenue.
deliver industry 4G+ network
Opex for the year included the recognition of shared site rental Ops
costs of RM54 million that had a corresponding rental income in Cash flow 2.30 2.26
(RM billion) 2.23 2.18
other revenue resulting in zero net impact on EBITDA. Excluding 2.08
the shared site rental impact, our annual opex increment marked Ops
Cash flow 35%
34% 33%
a solid improvement with 3.9% annual increment versus 6.6%, a Margin 32%
30%
year ago. Capex
(RM billion)
The solid cost and operational discipline provided us the firepower
to fuel robust subscriber acquisitions, progressive 4G+ network
expansion as well as deliver affordable products and service
innovations to our customers. 0.70 0.74 0.90 0.90 0.78

2012 2013 2014 2015 2016


018 Annual Report 2016 Digi.Com Berhad

Strategy and Performance Review

Normalised profit after tax (PAT)1 moderated 3.1% to RM1.67 The balance sheet remains robust with solid financial capability
billion as a flow through from weaker EBITDA and progressively and flexibility to fund future investments and operational
higher depreciation from our 4G+ network expansion. commitments. Total assets strengthened 17.9% to RM5.50 billion
after the upfront spectrum payment fees of RM598.5 million in
November 2016 and investments for 4G+ network expansions.
Steady PAT margin with progressively higher
depreciation from 4G+ expansion Our net debt to EBITDA ratio stayed healthy at 0.6x level, post
upfront spectrum fees payment for 900Mhz and 1800Mhz.
Depreciation 0.88
and 1.33 0.63 0.65
0.49
amortisation All in all, we delivered 2016 financial performance within the
(RM billion)
guidance and at a higher EBITDA margin of 45% while delivering
PAT 29%
Margin 25% innovative data and digital services to more internet-loving
25% 25%
19% Malaysians.
PAT
(RM billion)
2016 Updated 2016
Guidance Actual
Service revenue Low single digit -1.9%
1.21 1.71 2.03 1.72 1.67 growth decline
EBITDA margin Slightly below 45% 45%
2012 2013 2014 2015 20161
Capex Around 13% of 12.5%
service revenue
Healthy Shareholders’ Return with New Capabilities to
tap on Growth Opportunities
Winning Team
Healthy shareholders’ return with dividend yield
above 4% Cultivating a Culture of Innovation 360
DPS
(sen) 26.0 As we reshape our business to become a digital company, we
26.3
21.3 22.0 20.9 recognise the importance to inculcate a culture of everyday
Payout innovation across every aspect of our way of work within the
Ratio 170% 97% 100% 99% 100% organisation. During the year, we established several platforms to
encourage employees to innovate like never before. This included
EPS
(sen) Disrupt@Digi, a 30-hour idea hackathon that challenged Digizens
to explore new ideas for products and services. The programme
required employees to experience and understand the process
of ideation, customer validation, service design, prototyping and
15.5 21.9 26.1 22.2 21.0 pitching their digital innovation ideas. Beta Labs was another such
platform, an ongoing innovation programme that encouraged
Digizens to pitch and test the feasibility of going to market with
2012 2013 2014 2015 2016
their ideas.

Normalised earnings per share (EPS)1 for the year remained We also organised a series of Digital Days, engaging the entire
healthy at 21.4 sen but trimmed lower to 21.0 sen after accounting organisation to explore existing and new technologies disrupting
for RM35 million prior year tax provision. the market and transforming our customers’ lives in order for
employees to understand the need to create great digital products,
The Board of Directors declared an interim dividend of 20.9 sen and drive change in the way we work.
per share equivalent to RM1,625 million or almost 100% payout
for 2016.

1
Exclude prior year tax provision of RM35 million
Inspiring Your Digital Life Annual Report 2016 019

Strategy and Performance Review

A big part of our innovation agenda included contributing to Responsible Business Conduct
Malaysia’s digital growth by actively developing the next generation
of innovators via our newly established incubator and accelerator

BUSINESS REVIEW
We are deeply committed to doing business responsibly and
programmes, Digi Incub8 and Digi Accelerate. These programmes transparently. At the core of bringing mobile and internet
support budding entrepreneurs to build business fundamentals connectivity that is easily accessible, affordable and meaningful
through guided mentorship, ideation and marketing platforms, to different customer groups, we believe it is our responsibility
seed funding as well as opportunities for commercialisation. to operate our business and value chain, in an accountable and
sustainable manner.
This similar support is extended to budding social enterprises
through our Digi Challenge For Change (DigiCFC) programme, 2016 Customer First Day Celebration to Nurture
in collaboration with Agensi Innovasi Malaysia, MDec, MaGIC, Awareness for Safer Internet
Unicef, Google, Microsoft and Facebook. Here, we continue to
enable the development of mobile solutions to address social Together with 12 other business units in Telenor Group, we
issues concerning children, youth and women in Malaysia. celebrated Customer First Day (CFD) on 29 September 2016,
mobilising more than 1,400 Digizens across six major cities to
People Development Towards a Digital Future learn, share and interact with customers.

Digitising our employees’ every day experience was an important During the event, we took the opportunity to do a few important
aspect of reshaping our business. We invested to make available things: empowered customers to have full-control over their
three new digital learning platforms – Lynda.com, Udacity and accounts with our digital self-serve MyDigi app, engaged with
Coursera – to enable Digizens to do bite-sized learning on-the- customers for their valuable feedback on our services, and raised
go, very similar to how our customers consume media today. This awareness to combat cyberbullying and promote a safer internet
new way of learning gives employees access to a diverse range of experience for Malaysians. This stems from our commitment to
topics, for any type of learning pattern to develop relevant skills safeguard the digital lives of our children while empowering more
and knowledge to be a part of our digital journey. segments of society to benefit from being connected.

Recognition for Best Workplace in Malaysia

In 2016, we made big strides in establishing an inclusive, diverse


and family-friendly workplace. For two consecutive years, we
delivered on our Board Diversity Policy, maintaining women
participation in the board at 43% ahead of the 30% ambition
laid out by the Government. Similarly, we established a Women
Inspirational Network (WIN) to support the development, growth
and retention of more women leaders within the organisation.
Here, we have managed to maintain close to 40% of women in
leadership over the past few years.

We also introduced our industry-leading 6-month paid maternity


policy as a means to continue building a very attractive place to
work, where women can build careers, continue to fill the ranks of
our leadership and play a key role in supporting their families. We Our Integrity Practices Protects Our Brand and Helps
are an organisation committed to supporting our employees and Build A Competitive Advantage
their families through every stage of their lives.
We believe that conducting business in a responsible, accountable
Our ability to hold fast to these progressive policies has not gone and transparent manner across our operations makes good
unnoticed, earning us recognition from various stakeholders; business sense. Having integrity in our interactions and
the latest being named the Best Malaysian Organisation by engagement with each other, our customers, partners, vendors
TalentCorp’s LIFE@WORK Awards 2016 for pioneering best and industry stakeholders enable us to nurture a credible brand
practices in this area. and help us build a competitive advantage based on strong moral
values and ethics.
020 Annual Report 2016 Digi.Com Berhad

Strategy and Performance Review

In this respect, we focused our efforts in the year to empower The key priorities in 2017 will focus on relentlessly growing
employees to report compliance incidents. We rolled out postpaid and Malaysian prepaid opportunities while defending
mandatory online modules on anti-corruption and privacy to raise core service revenue streams. Digi will also continue to drive:
awareness among Digizens on this issue. We launched a face-to-
face scenario training which was cascaded down by management • Stronger 4G+ adoption and usage with better monetisation,
to our employees to allow for active conversations on how to • New digital revenue opportunities beyond the immediate
handle incidents. We also launched an independent integrity future,
hotline, which has resulted in an increase in the number and • Digitisation of core business, and
complexity of cases reported. • Operational efficiency.

We believe in working with stakeholders to raise the level of We aspire to turn in stronger performance than industry with
responsible business conduct in our sphere of influence. Our solid development in operational efficiencies, service revenue and
Supplier Conduct Principles and Agreement on Responsible EBITDA margin at around 2016 level alongside maintaining capex
Business Conduct require business partners and vendors to meet to service revenue ratio at 11% - 13%.
international labour standards, provide a safe workplace, and
protect the environment. We conducted 984 supplier inspections, The 2017 financial guidance is as follows:
and took strict action on contractors who failed to meet our safety
standards. We are also a pioneering member of the Business 2017 2016
Integrity Alliance, a private sector initiative focused on engaging Guidance Actual
relevant government agencies and stakeholders to combat Service revenue 6.23 billion
corruption affecting the business environment. (RM) Around 2016
level
More detailed information on our responsible business practices EBITDA margin 45%
can be found on pages 36 to 44. Capex to service 11% - 13% 12.5%
revenue ratio
2017 Outlook and Priorities
These are internal management targets which will be reviewed periodically by
The strong foundations we have laid in 2016 with our innovative the Board of Directors. Hence, these internal targets have not been reviewed
by our external auditors.
internet and digital services offerings, and robust infrastructure
capability has given us a good head start in 2017 to deliver on the
opportunities provided by this same foundation. Our persistent focus on products and service innovations, retail
experience reforms, and digitisation of core business for future
The year ahead holds new opportunities and similar challenges growth gives us the agility and foundation to capitalise on new
as 2016, and we are committed to continue driving resilient opportunities in 2017.
performance and sustainable returns in 2017.
Inspiring Your Digital Life Annual Report 2016 021
022 Annual Report 2016 Digi.Com Berhad

5-Year Financial Summary

Service revenue EBITDA Capital expenditure


RM6.23 billion RM2.96 billion RM780 million
5.89 6.13 6.33 6.35 6.23 2.93 3.04 3.16 2.98 2.96 0.70 0.74 0.90 0.90 0.78

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

Ops cash flow Profit after tax Total assets


RM2.18 billion RM1.63 billion RM5.50 billion
2.23 2.30 2.26 2.08 2.18 1.21 1.71 2.03 1.72 1.63 4.01 3.75 4.30 4.66 5.50

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

Earnings per share Dividend per share Return on equity (%)


21.0 sen 100% payout ratio or 20.9 sen 315.0%
15.5 21.9 26.1 22.2 21.0 26.3 21.3 26.0 22.0 20.9 462% 258% 296% 332% 315%
8.0

18.3

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Ordinary Special
Inspiring Your Digital Life Annual Report 2016 023

5-Year Financial Summary

2016 2015 2014 2013 2012

BUSINESS REVIEW
Financial results (RM million)
Revenue 6,597 6,914 7,019 6,733 6,361
- Telecommunication revenue
- Service revenue 6,226 6,348 6,333 6,131 5,891
- Others 100 64 67 64 65
- Sales of device 271 502 619 538 405

Earnings before interest, taxes, depreciation


and amortisation (EBITDA) 2,955 2,983 3,163 3,043 2,929
Earnings before interest and taxes (EBIT) 2,304 2,354 2,671 2,165 1,599
Interest cost 78 56 39 43 52
Profit before tax 2,238 2,309 2,645 2,140 1,591
Profit after tax 1,633 1,723 2,031 1,706 1,206
Capital expenditure (Capex) 780 904 904 741 700
Ops cash flow 2,175 2,079 2,259 2,302 2,229

Financial positions (RM million)


Total assets 5,498 4,662 4,303 3,752 4,014
Non-current liabilities 2,150 386 534 657 1,030
Total borrowings 2,282 1,294 1,048 749 1,080
Shareholders’ equity 519 519 686 661 261

Financial ratios
EBITDA margin 45% 43% 45% 45% 46%
Return on equity 314.6% 332.0% 296.1% 258.1% 462.1%
Return on total assets 29.7% 37.0% 47.2% 45.5% 30.0%
Earnings per share (sen) 21.0 22.2 26.1 21.9 15.5
Dividend per share (sen) 20.9 22.0 26.0 21.3 26.3
Dividend yield 1
4.3% 4.1% 4.2% 4.3% 3.5%
Net assets per share (sen) 6.7 6.7 8.8 8.5 3.4
Net debt/EBITDA (x) 0.6 0.4 0.2 0.1 0.1
Interest cover (x) 29.5 42.0 68.5 50.3 30.8

1
Yield calculated based on share price at year end
024 Annual Report 2016 Digi.Com Berhad

Share Development and Shareholdings

Share Development
In 2016, Digi’s share price performed weaker than FBM KLCI but relatively resilient compared to industry peers, who registered
an average of 16.3% decline as the Malaysian mobile telecom stocks underwent a series of bearish sentiment on concerns over the
uncertainties surrounding the spectrum fee obligation and increasingly challenging market conditions that may pose downside risks on
industry earnings.

Digi’s share continued to garner robust shareholdings support with 41.1% Malaysian shareholdings (2015: 40.9%) and steady foreign
shareholdings at 9.9% (2015: 10.1%) to deliver market capitalisation of RM37.6 billion at end 2016.

Share price 1Q16 2Q16 3Q16 4Q16 FY 2016


High Price 5.39 4.96 5.11 5.05 5.39
Low Price 4.76 4.31 4.64 4.83 4.31
Last Price 4.94 4.78 4.98 4.83 4.83
Period-over-Period Change (%) -8.5 -3.2 4.2 -3.0 -10.6
Average Daily Volume (’000) 8,299 6,672 6,109 5,843 6,720

Share Price – Digi.Com vs FTSE Bursa Malaysia KLCI

6.00 1,800
-3.0%
1,700
5.50
1,600
5.00
1,500
4.50 -10.6% 1,400
1,300
4.00
1,200
3.50
1,100
3.00 1,000
Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
FBM KLCI Digi.Com

Digi’s total shareholders’ return continued to outperform the benchmark indices, supported by solid financial performance and higher
dividend payout.

Total Shareholders’ Return (%) over 5 years (2012 -2016)

150

+57.3%
100

50 +25.8%

0
2012 2013 2014 2015 2016
FBM KLCI Digi.Com

Total Shareholders’ Return (TSR) measures total return arising from capital gains (share price increase) and dividends.
Inspiring Your Digital Life Annual Report 2016 025

Share Development and Shareholdings

Statistics on Shareholdings
as at 3 March 2017

BUSINESS REVIEW
Issued and Paid up Share Capital : RM77,750,000 comprising 7,775,000,000 ordinary shares
Class of Shares : Ordinary shares
Voting Rights : One vote per share

Analysis by Size of Holdings as at 3 March 2017

No. of No. of
Size of Holdings Holders % Shares %
1 - 99 890 3.05 10,770 0.00
100 - 1,000 12,838 43.99 7,516,135 0.10
1,001 - 10,000 12,344 42.29 49,245,468 0.63
10,001 - 100,000 2,346 8.04 65,741,762 0.85
100,001 - 388,749,999 (*) 766 2.62 2,422,165,813 31.15
388,750,000 and above (**) 3 0.01 5,230,320,052 67.27
Total 29,187 100.00 7,775,000,000 100.00

Remark : * - Less than 5% of Issued Shares


** - 5% and above of Issued Shares

Substantial Shareholders as per Register of Substantial Shareholders as at 3 March 2017

Number of Shares
Direct Deemed
Name Interest % Interest %
1. Telenor Asia Pte Ltd 3,809,750,300 49.00 - -
2. Telenor Mobile Communications AS - - 3,809,750,300 (a)
49.00
3. Telenor Mobile Holding AS - - 3,809,750,300 (b)
49.00
4. Telenor ASA - - 3,809,750,300 (c)
49.00
5. Employees Provident Fund Board 863,129,052 11.10 - -
6. AmanahRaya Trustees Berhad 557,440,700 7.17 - -
- Amanah Saham Bumiputera
7. Kumpulan Wang Persaraan (Diperbadankan) 359,466,200 4.62 40,507,200 0.52

Notes:
(a) Deemed interested by virtue of its 100% interest in Telenor Asia Pte Ltd.
(b) Deemed interested by virtue of its 100% interest in Telenor Mobile Communications AS.
(c) Deemed interested by virtue of its 100% interest in Telenor Mobile Holding AS.
026 Annual Report 2016 Digi.Com Berhad

Share Development and Shareholdings

List of Thirty (30) Largest Shareholders as at 3 March 2017

Name of Shareholders No. of Shares %

1 Citigroup Nominees (Asing) Sdn Bhd 3,809,750,300 49.00


Telenor Asia Pte Ltd (Digi)

2 Citigroup Nominees (Tempatan) Sdn Bhd 863,129,052 11.10


Employees Provident Fund Board

3 Amanahraya Trustees Berhad 557,440,700 7.17


Amanah Saham Bumiputera

4 Kumpulan Wang Persaraan (Diperbadankan) 358,371,200 4.61

5 Lembaga Tabung Haji 106,503,200 1.37

6 Amanahraya Trustees Berhad 85,544,300 1.10


Amanah Saham Wawasan 2020

7 Cartaban Nominees (Asing) Sdn Bhd 78,244,810 1.01


Exempt an for State Street Bank & Trust Company (West CLT OD67)

8 Amanahraya Trustees Berhad 68,500,000 0.88


Amanah Saham Bumiputera 2

9 HSBC Nominees (Asing) Sdn Bhd 60,347,550 0.78


BBH and Co Boston for Vanguard Emerging Markets Stock Index Fund

10 Dato Ahmad Sebi Bin Bakar 58,100,230 0.75

11 HSBC Nominees (Asing) Sdn Bhd 52,616,065 0.68


Exempt an for JPMorgan Chase Bank, National Association (U.S.A.)

12 Amanahraya Trustees Berhad 48,540,000 0.62


Amanah Saham Malaysia

13 Maybank Nominees (Tempatan) Sdn Bhd 43,653,700 0.56


Maybank Trustees Berhad for Public Regular Savings Fund (N14011940100)

14 Cartaban Nominees (Tempatan) Sdn Bhd 42,933,300 0.55


PAMB for Prulink Equity Fund

15 Citigroup Nominees (Tempatan) Sdn Bhd 41,675,490 0.54


Employees Provident Fund Board (Nomura)

16 Amanahraya Trustees Berhad 41,020,100 0.53


As 1Malaysia

17 Amanahraya Trustees Berhad 40,851,600 0.53


Public Islamic Dividend Fund
Inspiring Your Digital Life Annual Report 2016 027

Share Development and Shareholdings

List of Thirty (30) Largest Shareholders as at 3 March 2017 (cont’d)

Name of Shareholders No. of Shares %

BUSINESS REVIEW
18 Maybank Nominees (Tempatan) Sdn Bhd 39,500,000 0.51
Maybank Trustees Berhad for Public Ittikal Fund (N14011970240)

19 Amanahraya Trustees Berhad 36,536,260 0.47


Amanah Saham Didik

20 Cartaban Nominees (Asing) Sdn Bhd 33,514,700 0.43


GIC Private Limited for Government of Singapore (C)

21 Amsec Nominees (Tempatan) Sdn Bhd 28,718,800 0.37


MTrustee Berhad for CIMB Islamic DALI Equity Growth Fund (UT-CIMB-DALI)

22 Amanahraya Trustees Berhad 27,576,800 0.35


Public Islamic Select Enterprises Fund

23 Citigroup Nominees (Tempatan) Sdn Bhd 27,370,490 0.35


Exempt an for AIA Bhd

24 Malaysia Nominees (Tempatan) Sendirian Berhad 25,902,800 0.30


Great Eastern Life Assurance (Malaysia) Berhad (PAR 1)

25 Amanahraya Trustees Berhad 24,762,300 0.32


Public Ittikal Sequel Fund

26 Amanahraya Trustees Berhad 22,134,600 0.28


Public Islamic Sector Select Fund

27 Valuecap Sdn Bhd 21,311,700 0.27

28 Amanahraya Trustees Berhad 21,248,800 0.27


Public Islamic Equity Fund

29 Citigroup Nominees (Tempatan) Sdn Bhd 17,831,100 0.23


Employees Provident Fund Board (CIMB PRIN)

30 Cimb Group Nominees (Tempatan) Sdn Bhd 16,910,100 0.22


Yayasan Hasanah (AUR-VCAM)

Total 6,700,540,047 86.15


028 Annual Report 2016 Digi.Com Berhad

Event Highlights

Quarter 1
18 February 8 March
January Rolled out promised 4G LTE sites in the Celebrated International Women’s
North: Lunas, Batu Gajah, Jejawi and Day with inspiring speakers, from
Arau as voted by Malaysians with the topic experts to industry leaders in the
#DigiWeWant4G You Tweet, We Build Advancing Women in Digital panel,
11 January
Twitter campaign. and pledged our support for the global
Announced Dialogue in the Dark
#HeForShe movement.
as season six winner of our flagship
community innovation programme, Digi
Challenge for Change (DigiCFC6).
10 March
First in Malaysia to rollout GSMA’s
Mobile Connect authentication solution
22 January
for select Digi customers, a universal
Launched a new community programme,
digital identity using mobile numbers as
Digi Wanita Era Digital (DigiWED),
ID links.
to bridge the digital gender gap by
equipping women with basic internet
and e-commerce skills nationwide.
25 February
Only Malaysian telco and pioneering 23 March
GSMA member operators to support Launched Digi Accelerate, our flagship
the GSMA Connected Women accelerator programme to fast track
Commitment initiative to extend mobile development of local startups, building
internet and mobile money services to strong fundamentals to position them
more women. for global success.

March
26 January
Partnered iflix to bring more video
1 March
content streaming to Digi Postpaid
Introduced the all-new Digi Postpaid
customers. packed with new features from extra
internet quota, internet rollover, new
internet roaming rates and a wider
range of digital services. 25 March
February Delivering on our promise to customers
by installing the latest nominated 4G
LTE sites in Papar and Tenom, Sabah as
2 March
4 February Launched our flagship Digi CXO
part of the #DigiWeWant4G You Tweet,
Conducted a workshop with Childline We Build Twitter campaign.
Apprentice challenge; a twist from
Malaysia to develop advocacy of the conventional management trainee
safe internet use among children in programme in search of young talents to
conjunction with Safer Internet Day benefit from a year of direct mentorship
2016. with Digi’s CXOs.
Inspiring Your Digital Life Annual Report 2016 029

Event Highlights

May
31 March 6 April

BUSINESS REVIEW
Introduced our latest slew of LTE-A Announced our industry-leading
capable mobile broadband device 6-months fully-paid maternity leave 1 May
bundles that give customers access to policy for employees, affirming our Introduced the new Internet Sharing
high-speed internet on-the-go with a commitment to build an inclusive, feature for all postpaid plans, helping
MoBiFi device. family-friendly workplace in Digi. customers share their quota with up to
six supplementary lines by simply adding
RM10 to their bill.

31 March 14 April
Expanded our network of retail Introduced Digi Video Freedom, a range
touchpoints by opening a Digi Store of bite-sized internet video streaming 13 May
Express in Taipan, Inanam, Sabah. passes that help customers stream their Five Malaysians join peers from
favourite video content without using Bangladesh, Myanmar, India, Pakistan
up their internet quota. and Thailand for the Telenor Youth
Forum Asia 2016 to solve some of the
Quarter 2 most pressing issues facing Asia’s youth,
from unemployment, mental health to
equal access to education.
April

1 April 18 May
Loh Keh Jiat appointed as Chief The Digi 4G LTE Carnival opened across
Marketing Officer to manage an our 150 Digi Stores and Digi Stores
expanded Sales and Marketing function Express nationwide, giving customers
with the overall mandate to drive end- the opportunity to enjoy internet offers
to-end customer focus and delivery. 30 April designed for all types of usage needs.
Enabled connectivity for residents in
the remote village of Long Urun, Bintulu
with a SmallCell tower system piloted
3 April with the Malaysian Communications 30 May
Opened Digi’s third Kampung IFA and Multimedia Commission (MCMC). Praveen Rajan appointed as Chief
(Internet For All) in Kg Sampadi, Lundu, Digital Officer to head Digi-X, the
Sarawak, an internet centre to empower company’s new venture-building
rural communities with connectivity and division mandated to create new digital
basic internet skills. 30 April businesses for Digi.
Opened a new Digi Store Express in
Lahad Datu, bringing our total retail
touchpoints in Sabah to over 1,800
6 April as part of making our services more 31 May
Rolled out new 4G LTE towers for accessible to more Sabahans. Launched our first incubator
customers in Bau and Limbang, Sarawak programme, Digi Incub8, adding
to enjoy quality, high-speed internet as to our spectrum of startup
part of the #DigiWeWant4G You Tweet, programmes focused on building basic
We Build Twitter campaign entrepreneurship skills in East Malaysia.
030 Annual Report 2016 Digi.Com Berhad

Event Highlights

June August
12 August
Announced three winning ideas for
16 June 1 August Digi Challenge for Change (DigiCFC7),
Initiated the search for mobile app ideas Introduced our all-new prepaid internet and simultaneously kicked-off the app
to benefit underserved communities plans customised to suit different development phase that invites local
with the seventh edition of our internet needs, with Digi Prepaid Best developers to turn these ideas into full-
community innovation programme, Digi being the ideal internet starter pack, fledged mobile apps.
Challenge for Change (DigiCFC7). and Digi Prepaid Live, the ultimate
streaming pack that offers free video
and music streaming quotas every
month. 31 August
In conjunction with Merdeka Day,
Quarter 3 kicked-off our #BukaLaHati campaign
with a video themed ‘Connect to be
July Free’, a heartwarming story to inspire
and remind Malaysians of the hope and
camaraderie we share.
4 July
Partnered popular mobile game
developer Supercell, to introduce
limited edition co-branded collectible
reload cards where prepaid customers
September
enjoy 10% discounts and postpaid
customers enjoy RM10 off when 1 August
purchasing any in-app Supercell content Opened a Digi Store in Tawau, Sabah 8 September
adding to our wide network of retail Opened a Digi Store Express at The Hub
on Google Play via Direct Carrier Billing.
touchpoints in the state. in Kuching, to make it more accessible
for Sarawakians to enjoy our services.

27 July
Underscored our commitment to 3 August
safeguard our customers’ digital Our first batch of eight CXO 9 September
Apprentices started their mentorship Expanded the retail distribution
life with the launch of a new Digi
programme with us. They were network for our Digi Prepaid Live
Family Safety app, and an online
selected from over 800 peers for this packs through a partnership with Bison
safety workbook #SafeWeb4Kids in
opportunity. Stores, a chain that operates retail
partnership with PS the Children.
press and convenience stores in high
traffic areas under trade names such as
myNEWS.com, newsplus, MAGBIT and
9 August The Front Page.
Launched the ‘Be Smart, Use Heart’
Video contest, a CyberSAFE in Schools
initiative in search of youth influencers
to advocate the need to be smart online
and to exercise cyber rights among their
peers.
Inspiring Your Digital Life Annual Report 2016 031

Event Highlights

Quarter 4
13 September 26 October

BUSINESS REVIEW
Pioneered an industry collaboration Introduced VoLTE, the next-generation
to standardise Health, Safety and
October voice call technology that enables
Environment (HSE) requirements for customers to enjoy high definition call
all contractors undertaking network quality on Digi’s 4G+ network. It also
infrastructure works in efforts to
1 October allows customers to simultaneously surf
Hosted 3,000 youths and families at
establish a safer working culture across the web, download or stream content
the ‘Us vs. Cyberbullying’ mega-event
the industry. from the internet at 4G LTE speeds
to advocate widespread internet
while engaged on a voice call.
safety practices for children to combat
Cyberbullying in Malaysia.
21 September
Launched Kreative Crew, a new creative 28 October
content crowdsourcing community Concluded Malaysia’s first on-ground
platform to facilitate the development
12 October Clash Royale tournament where
Introduced Digi RoamBorder, an
of local content producers. students from 18 universities compete
international roaming service for
to win prizes up to RM10,000,
postpaid customers to use voice and
delivering our promise to enable
internet services worry-free when
relevant internet content for our
traveling in Singapore.
29 September customers.
Annual Customer First Day event,
mobilising over 1,400 Digizens across
six major cities nationwide to appreciate
customers and raise awareness against
13 October
Cyberbullying.
Announced two winners to represent November
Malaysia at the 2016 Telenor Youth
Forum in Norway themed ‘Digitalisation
for Peace’, which calls for inspiring 2 November
youths to tackle social challenges using Hosted our first Digital Day to mark our
digital solutions. move to become a digital company; a
full-day tech showcase for employees
to explore new technologies. Also
announced tie-ups with GreenTech
18 October Malaysia for M2M connectivity in Tesla
Made annual phone upgrades possible cars, and Telenor’s acquisition of Prabhu
for customers with Digi Easy Up, a new as a move into the IOT and financial
service feature that gives customers the services space.
option to swap to a new smartphone
annually, for life.
032 Annual Report 2016 Digi.Com Berhad

Event Highlights

4 November 28 November
Named the Best Malaysian Organisation Sponsored the local qualifier leg of the
at TalentCorp Malaysia’s LIFE@WORK ESL One championship, hailed as the
awards, for pioneering best practices in World Cup of e-sports as part of our
2016 creating an inclusive, diverse and commitment to participate in and enable
family-friendly workplace for women. internet content that our customers
love.

15 November
Launched our all-new Digi Broadband
plans, offering customers internet quota December
for streaming movies, TV shows and
music from the comfort of their living
rooms. 1 December
Joined the Malaysian Business Integrity
Alliance as a pioneering partner,
reflecting our deep commitment
to uphold high standards of ethical
behavior in our business conduct.

14 December
Announced support for three social
entrepreneurs as DigiCFC7 winners,
namely grand prize winner EDDY, and
21 November consolation prize winners Good People
Announced partnership with CSE Today and Food Ninja Innovation, in
Group to deliver automotive and the form of a RM150,000 seed grant to
insurance telematics solutions for develop their mobile solutions for social
Malaysian enterprises as part of making good.
Internet of Things (IoT) services more
accessible to all customers.

26 November
Hosted the Digi CyberSAFE Digital
Citizen Camp to spread positive use
of internet among youths, and build a
strong network of peer influencers.
Inspiring Your Digital Life Annual Report 2016 033
034 Annual Report 2016 Digi.Com Berhad

Accolades

Asia’s Best Managed Billion Ringgit Club 2016

1 2
Companies 2016

• No. 1, Most Committed to • Highest Return on Equity Over


Corporate Governance Category Three Years, Big Cap Companies
• No. 1, Best Investor Relations Category (Companies with RM10
Category Billion to RM40 Billion Market
• No. 2, Best CEO Category Cap)
• No. 3, Best Managed Company • Highest Return on Equity Over
Category Three Years, Trading/Services,
• No. 3, Corporate Social Hotels, IPC and Technology
Responsibility Category Sectors Category
by FinanceAsia by The EDGE Malaysia

Brand Finance Top 100 MALAYSIA-ASEAN Charlton EastColes

3 4 5
Malaysia Brands 2016 Corporate Governance Corporate Performance
Transparency Index, Awards 2016
Findings and Recognition
• Ranked No. 11, Malaysia’s Top • Silver, Malaysia Company of the
100 Brands
2016 Year 2016
by Brand Finance • Malaysia Diversified
• Ranked No. 18, List of Top 100
Telecommunication Services
Companies for Overall Corporate
Company of the Year 2016
Governance and Performance
by Charlton East Coles
• Ranked No. 31, List of Top 100
Companies with Good Disclosures
by Minority Shareholder Watchdog
Group

MIRA IR Awards 2016 LIFE@WORK Awards 2016

6 7
• Best IR Website, Large-Cap • Best Malaysian Organisation,
Companies Category (pioneering increasingly diverse,
by Malaysian Investor Relations inclusive and family-friendly best
Association practices)
by TalentCorp Malaysia
Inspiring Your Digital Life Annual Report 2016 035

Accolades

ACCA Malaysia

8
BUSINESS REVIEW
Sustainability Reporting
Awards (MaSRA) 2016
• Commendation Award, Enterprise
of the Future Category
by ACCA Malaysia

FTSE4Good Bursa Malaysia FTSE4Good Emerging

9 10
Index 2016 Markets Index 2016

• Recognised for transparent • Recognised for ESG inclusion


disclosure on corporate standards and practices
responsibility practices by FTSE Group
by FTSE Group

Channel NewsAsia MGBC Leadership in

11 12
Sustainability Ranking Sustainability Awards 2016
2016
• Top 100 Companies in Asia • Winner, Commercial Project
by Channel NewsAsia Leadership Category for the Digi
Technology Operations Centre
by the International Union of
Architects (IUA), Malaysian Green
Building Confederation (MGBC),
Persatuan Akitek Malaysia (PAM)
and Solar Research Malaysia UKM
036 Annual Report 2016 Digi.Com Berhad

Sustainability

Our commitment to sustainability leadership is deeply embedded in our business strategy. We believe
our position, governance and management of material issues have an impact on the long term success of
our business, and are also what’s important to our stakeholders. This approach gives us the competitive
advantage to attract the best talent, remain agile in delivering our services, build trust with stakeholders
in future proofing our operations, while engaging communities to create a better future together.

Our sustainability framework underscores our commitment to In 2016, we mapped our sustainability framework to the
operate an accountable, transparent business. It steers our focus Sustainable Development Goals (SDG), a landmark global
to uphold ethical and responsible conduct across our operations, commitment to collectively end poverty, protect the planet, and
build a highly motivated, skilled and collaborative workforce, ensure prosperity for all by 2030. Launched in September 2016,
and reduce our environmental impact. It also guides our broader the SDG accelerates expectations for the private sector to join
purpose of empowering communities to address social, economic the international community in taking meaningful action. As
and environment inequalities by working with like-minded part of Telenor Group, we have prioritised Goal 10 in Reducing
partners to scale and accelerate the rollout of relevant digital Inequalities, leveraging on our digital competencies and strength.
solutions for the betterment of local communities.

Sustainable
Development Goals

Empower Societies
• Safe Internet
• Digital Enablement

Responsible
Business
• Ethics and Compliance
• Winning Team
• Climate Change and
Environment

Ethics and Compliance Anti-Corruption

We believe in conducting business in a responsible manner by All Digizens are guided by the Code of Conduct that set
establishing a business environment with partners who share the standard for proper business conduct with customers,
our commitment to high standards of ethics and integrity. This stakeholders and partners. It defines the culture and the main
is maintained by ensuring the right principles of anti-corruption, principles by which we create value. All employees must read,
customer privacy, consumer responsibility, supply chain acknowledge and sign the Code of Conduct annually.
sustainability, and safe use of equipment are upheld across our
business.
Inspiring Your Digital Life Annual Report 2016 037

Sustainability

Building awareness: Following the Integrity and Ethics Survey secure, and be transparent in how we collect and use their data.
2015, we conducted focus group sessions and roadshows with Our security systems are ISO 27000 Information Security
Division leaders and employees to discuss findings and solutions. Management Systems certified to ensure robustness of our
Key focus areas include managing exposure to corruption, conflict processes.
of interest, gifts and business courtesies, and improving trust
in the whistle blowing policy. These engagements allowed us to Raising awareness: Over 60 privacy ambassadors from various
better understand ethical dilemmas faced by our employees, and functions help drive the privacy agenda within their divisions. We
for them to have more confidence to report compliance incidents rolled out a mandatory e-learning information handling training to
and understand management’s expectations of behaving with ensure all Digizens understand the importance of privacy, and to
integrity. live the values of safeguarding customers’ data at all times.

Training and support: We developed and launched the ‘Say No Improving compliance: Privacy by design ensures that protocols
to Corruption Training’, consisting of an e-learning module and regulating the collection, use and disposal of personal data are

SUSTAINABILITY
a face-to-face scenario workshop based on ethical dilemmas. built into all our systems and processes before it is rolled out.
The integrity scenario training began with the Digi Management We tightened privacy governance and compliance in the year,
team, and all people managers had the responsibility to engage and incorporated privacy by design protocol into all operational
and train their respective teams once they were trained by their activities, and business and vendor selection processes.
immediate managers. As at 31 December 2016, 86% of Digizens
had completed the scenario workshop. Increasing transparency: We are committed to analysing
customers’ data to provide them with better value and relevant
Enabling reporting: The launch of an independent integrity services with their consent. The launch of a new privacy notice
hotline contributed to the reporting of compliance issues that ensures we are data network analysis compliant, and that we help
were more complex, substantive, and led to a 37% year-on-year customers understand their rights to the use of their data.
increase of issues reported. Almost half of the reports were
related to business integrity. Consumer Responsibility

Broadening due diligence: Business managers are now required We want to deliver experiences that delight our customers. Every
to conduct an Integrity Due Diligence (IDD) assessment for customer interaction across key channels are rated, and detractors
all business partners. The IDD serves to measure the level of are engaged to improve services. Our extensive customer
integrity held by potential business partners. The IDD findings engagement at stores, quarterly network drive tests, and annual
are reviewed by the Ethics and Compliance, and the Sourcing and Customer First Day engagement ensure we have a constant pulse
Logistics teams before contracts are awarded. on creating experiences that delight customers.

Building like-minded alliances: We are a member of the Business


Integrity Alliance (BIA), a private sector initiative comprising
companies committed to doing business with integrity. Through
collective action, the BIA allows members to engage relevant
government agencies and stakeholders to address corruption
affecting the business environment, and at the same time create
value in the preservation of business integrity.

Protecting Privacy

Respecting and safeguarding our customers’ privacy is a strong


commitment we make in enabling trust in our services. We are
committed to keeping our customer’s personal data safe and
038 Annual Report 2016 Digi.Com Berhad

Sustainability

Engaging network detractors: Our network and technical requirements of workers at our base stations and technical sites.
backend teams take responsibility of customers’ experience For the first time, the app allows our inspection team to have a
by engaging and understanding the challenges faced by our real-time overview of when, and where our contractors and sub-
customers. Members of the teams volunteer to call detractors to contractors are working. This enables efficient deployment of
deep dive on issues and attempt to provide resolutions. Information inspectors to sites.
collated from this Network Net Promoter Score (NPS) exercise is
then cross-referenced against our network performance KPIs by We conducted 984 inspections, of which 99% were unannounced.
the network quality team. Though major non-compliance was reported in less than one
per cent of inspections, we had two more cases of major non-
Resolving disputes: Bill disputes were one of the top three issues compliance compared to the year before. In 2016, we terminated
raised by customers across the industry. We were the first in the eight sub-contractors and suspended three sub-contractors for
industry to introduce a customer guarantee to resolve a customer’s failing to meet our safety standards. We saw a 40% year-on-year
bill dispute within 24 hours, or they will receive a full waiver on the reduction in minor non-compliance cases.
disputed amount. We have seen a reduction in escalation of cases,
a significant drop in repeated calls on billing, and improvement in Internalising safety: We apply the same high level of safety
NPS on billing adjustment. standards to our employees. Our health and safety management
systems are OHSAS 18001:2007 certified, and regional health
Innovating services: The MyDigi app was designed as an and safety committees roll out safety inspections and health
intuitive self-management of relevant Digi services such as bill programmes. Having achieved three years of zero lost time injury
payment, services subscription, and account status. Over 75% frequency (LTIF), we recorded our first significant employee
of the 1.5 million active users log on at least once a month, and injury in 2016. Our LTIF was 0.23 per million hours of work.
is rated consistently as one of the Top 5 apps on Google Play
Store Malaysia. The digital Mobile Sales App (MSA) has reduced Promoting collaboration: We partnered with industry peers to
customers’ average waiting and handling time at stores by 35% conduct a baseline calibration of health and safety requirements.
and 16% respectively. Average registration time is now only 20 This baseline led to the development of a common industry
seconds for prepaid and 3 minutes for postpaid. safety standard, which was endorsed by five industry CEOs.
This common standard will transform the industry’s safety
Supply Chain Sustainability culture, allow for cost savings, and increase efficiencies for all
stakeholders.
We expect business partners to adopt our high standards
of business conduct, working conditions and environmental
management. Through our Supplier Conduct Principles, we
help business partners build capacity and reduce inequalities by
ensuring that their workers’ rights and safety are protected.

Training: We conducted 2,050 man hours of supplier training


with our contractors and sub-contractors. The training focused
on safety awareness, proper skills and use of equipments, and
instilling a safety culture among network rollout partners.

Digitising governance: We completed the rollout of the Digi


Permit to Work (D’PTW) app to all our main contractors and their
sub-contractors. This digital location-based app has allowed us to
strengthen the governance of monitoring compliance to safety
Inspiring Your Digital Life Annual Report 2016 039

Sustainability

Winning Team
Age (%)
Our employer promise of ‘Freedom to inspire the next’ is a belief
in creating a workplace where everyone’s voice is heard, and
Below 30
aspirations fulfilled, regardless of their position in Digi. It is this 22%
freedom that attracts and retains top talent, and innovates the
next generation of products and services in our drive to be our
customers’ favourite partner in digital life. 31 - 50
73%

Inclusive and engaged culture


51 & above
We celebrate a workforce that is diverse, inclusive and engaged. 5%
We promote a workplace where all employees feel a sense of

SUSTAINABILITY
belonging, everyone is respected, differences embraced, and
there are equal opportunities for all.

Diversity in leadership: Women comprise 43% of our current


Gender (%) Board of Directors, which is above the ambitions set by the
Malaysian government. Women also represented 39% of the
Digi leadership team, which comprise of CXOs and their direct
reports. Today, roles traditionally held by men, such as in network
and information technology, are led by women of equal capability.

The Women Inspirational Network (WIN) is a platform to


strengthen the management leadership pipeline. An initial group
of 20 top performing women were identified and provided with a
CXO mentor. Members of WIN are provided diverse opportunities
to develop, share, and network with other corporate women
leaders.
Women Men
44% 56%

Ethnicity (%)

Bumi
3%

Malay
33%

Chinese
46%

Indian
15%

Others
3%
040 Annual Report 2016 Digi.Com Berhad

Sustainability

Supporting work life balance: In January 2016, we launched a 800 young adults with the unique opportunity to spend a year
six months fully paid maternity policy for all full time employees. shadowing and being mentored by a CXO. Following a rigorous
Sixty five Digizens have gone on maternity under this new policy, online recruitment, a workshop to observe and shortlist potential
and 37 have returned to their positions while the remaining are candidates, eight individuals were selected to apprentice with the
still on maternity leave. respective CXOs.

Attracting future-ready talent: We created unique opportunities Employee Engagement Index (EEI): EEI measures percentage of
to accelerate learning of young talent as part of building our future employees committed to the organisation and willingness to apply
talent pipeline. The CXO Apprentice Challenge attracted over discretionary effort in their work. Our EEI averaged 76% over the
last three years, which is above the benchmark of high performing,
and Malaysian companies. The results point towards a strong
culture of customer centricity and higher employee net promoter
score.

Innovation Everyday

We have established a culture of everyday innovation where


Digizens are provided a conducive, enabling environment to try
new things. Various platforms are offered to allow to Digizens
to ideate, understand customer needs, validate, prototype, and
pitch their ideas. Winners are given time off from their duties to
dedicate time to bring their ideas to market.

Innovation Platforms

Telenor Ignite Incubator


Team Alfredz, a team of three Digizens, was one of the five winners at the inaugural Telenor Ignite
Incubator. Alfredz is a wireless intercom system to connect security guards with residents in high-rise
condominiums and gated communities. The team is now embedded within Digi-X to further develop
and commercialise their product.

Disrupt@Digi
Over 80 Digizens formed 15 teams to create the next innovative product or service over a non-stop
30 hour event. Connect Kindie, an app to enable better communications between kindergarten
teachers and parents, was selected to be commercialised.

Beta Labs
An intrapreneurial platform designed to harness collective validated learning through small,
autonomous teams. Supported by an Innovation Catalyst, teams win approval from the monthly Beta
Council to prototype and test their ideas. Thirty five ideas were submitted, and five are being beta
tested with customers. One idea has garnered interest from the Marketing team, and may be turned
into a Digi product.
Inspiring Your Digital Life Annual Report 2016 041

Sustainability

Transformation Catalyst Climate Change and Environment


We believe every Digizen should have a pathway to be part of our Our primary climate measure has been to stabilise the energy
digital transformation. Ensuring they understand their role, adopt consumption in our network while increasing our coverage
new skills, and transform their mindset to embrace new ways of work. footprint. In 2017, Telenor Group will formulate a new strategic
climate ambition with localised climate roadmaps working towards
Transforming leaders: We developed a partnership with the Asia 2030 that are aligned with the Paris Climate Agreement.
School of Business, a collaboration of the Massachusetts Institute
of Technology Sloane and Bank Negara, to develop a customised
Energy Efficiency
programme on financial valuation on digital business modelling.
The first of its kind in the region, the programme is being rolled out
In 2016, we utilised 284 GWh of energy across our operations, a
across Telenor business units in Asia.
7.4% increase year-on-year. The increase in energy use is primarily
In collaboration with Telenor Group and INSEAD Business School, from our network, which saw a 102% year-on-year growth in

SUSTAINABILITY
we launched the ‘Strategic Execution Programme’ for all head of data traffic. Our energy intensity per RM revenue rose 19% to
sections and senior experts. The six-week online course exposes 0.046 KWh due to lower revenues, and our KWh per customer is
leaders to the external disruptive forces and trends shaping our marginally above the Telenor Group average of 18.6 KWh.
industry, inspires new ways of work and thinking, and instills
skills to lead their teams to make the digital shift. Leaders need Our total carbon emission is 142,835 tonnes, a 5.6% year-on-
to demonstrate and reflect execution of the new knowledge by year increase, and our carbon intensity per RM value added
completing a project over three months. increased 4.5% to 0.044 tonnes, while our carbon emission per
customer is above the Telenor Group average of 6.3 kg CO2e.
Future-ready: ‘What’s your Next’ is a half day workshop that engages
all Digizens to understand and embrace our new digital ambition.
The workshop explains why and how the business is changing, Total Energy Use By Type (GWh)
enabling Digizens to chart their next step within Digi, freely challenge
conventions, experiment with new opportunies, and urgently commit
to learning a future related skill to remain future-ready. 160
101
Freedom to learn: We launched our new Digital D’Academy 2016
15
allowing every Digizen to freely access three world class online
8
learning platforms anytime and anywhere. Ninety eight Digizens
have enrolled for a six months nanodegree on Udacity. Five have
graduated having undergone on average of 72.4 online learning 155
hours per nanodegree. Digizens on average completed 14.2 hours 86
of training. 2015
14
8
Freedom to Learn

152

Expert Certifications 2014


75
11
9

Nano Degree Programmes 150


70
2013
13
9
Learning for All
Network (Grid) Network (Diesel)
Transport Building
042 Annual Report 2016 Digi.Com Berhad

Sustainability

Renewable energy: Green energy contributes less than 1% of


Emissions by scope (Tonnes CO2e) energy to power our network. There was a slight reduction of
renewable energy output due to vandalism at ten sites. The 64
1,703 1,628 1,912
1,968 operational sites generated an estimated 0.52GWh.

The ongoing industry proof of concept (POC) self-sustaining


hydrogen fuel cell at our base station with 2G and 3G technologies,
104,587 112,194 111,586 114,573
continues to operate within the established parameters and
passed several stress tests. The hybrid system extracts moisture
from the atmosphere and extracts hydrogen molecules, reducing
carbon emissions and maintenance cost. Results from the POC will
19,575 20,731 22,048 26,351
guide future energy system optimisation to fit different variations
of base stations.
2013 2014 2015 2016
Buildings and travel: Energy used in our buildings and travel
Scope 1 Scope 2 Scope 3
account for 8% of total energy use and has remained stable over past
3 years. We completed the renovation of D’House, which is in the
process of being certified Leadership in Energy and Environmental
KWh/Kg CO2e per customer Design Gold (Commercial Interior). As part of the certification
process, we have assessed and recalibrated air-conditioning units
14 25.0 and installed LED lightings to maximise energy savings.
12 11.5 11.8 11.6
11.2
20.0 Managing E-waste
10
15.0
8 6.3 The increasing tonnage of e-waste not properly disposed of has
6.2
6 health and environmental implications. E-waste directly produced
5.7 5.6 10.0
from our operations is managed under the Environmental Quality
4
(Scheduled Wastes) Regulation 2005 and our E-Waste Guidelines.
5.0
2
22.0 19.3 21.7 17.3 21.8 16.6 23.1 18.6
Recycling redundant equipment: Decommissioned network
0 0
2013 2014 2015 2016 equipment constitutes the largest tonnage of our e-waste
generated. As we complete our network upgrade, the amount of
KWh Telenor Avg Kg CO2e Telenor Avg
e-waste from decommissioned network equipment has declined.
In 2016, we collected only 18 tonnes of equipment, down from the
peak of 343 tonnes year-on-year.
Network: Energy used to power our network accounts for 92%
of our total energy usage. Our 2017 – 2020 network energy Collaborating with partners: Collection of old mobile phones
use is forecasted to increase as we strengthen and broaden our constitutes a small amount of e-waste as there are currently no
reach to provide better service to our customers. Emissions from regulations on domestic e-waste in Malaysia. We offer ‘take back’
generators accounted for the most significant increase of 17% schemes of selected phone models and make available e-recycling
year-on-year as we rolled out our 4G LTE network to reach 85% boxes in all Digi stores.
population coverage, and provide rural coverage through rollout
of over 100 T3 sites. The Mobile e-Waste: Old Phone, New Life, is a joint recycling
and awareness programme by the Malaysian Communications
Over the years, we have invested in infrastructure and capital and Multimedia Commission, Malaysian Technical and Standards
projects to deliver a network that is environmentally efficient. Forum Berhad, and industry peers. In its second year, a media
In 2016, we optimised and reduced the size of generators awareness tour of a recycling centre was initiated, explaining how
appropriate to its related network coverage. We rolled out a e-waste is recycled and the potential dangers if not disposed off
Charge Discharge Cycle Genset and Battery, which allows for responsibly.
reduction in diesel consumption. We installed Base Transceiver  
Systems in 3G equipments in all base stations to allow for more
savings. We overlaid 4G LTE network cards on existing equipment
to reduce the need of installing additional equipment.
Inspiring Your Digital Life Annual Report 2016 043

Sustainability

Empower Societies

A connected society is an empowered society. Building on our core values and leveraging on our digital ambition, we believe digital
services and platforms can bring many benefits to the lives of individuals and communities. Digi’s CyberSAFETM, Challenge for Change,
and Wanita Era Digital are core programmes to empower societies. We also support other digital empowerment initiatives such as the
Telenor Youth Forum, Digital Winners Asia, and Kampung Internet For All.

Safe Internet

Over the six years of Digi’s CyberSAFETM programme, more In 2016, our focus was on creating mass awareness by deepening
than 100,000 students and 7,000 teachers nationwide have our strategic partnerships with the Ministry of Education,
been trained and engaged. We have curated the nation’s largest CyberSecurity Malaysia, UNICEF, the Royal Malaysia Police and
repository of information on schoolchildren’s online behaviour The Star R.AGE.

SUSTAINABILITY
through biennial national quantitative and qualitative surveys.

With our partners, we launched a public Partnering with UNICEF, The Star R.AGE and Women:girls,
campaign, ‘Us vs Cyberbullying’, that we kicked off the ‘ReplyForAll’ public townhall to trigger a
reached over 3,000 people with the conversation on online child sexual exploitation and the call
Mayor of Petaling Jaya. to action for anti-grooming laws in Malaysia.

More than 60 videos on anti-


cyberbullying were created by school
children to raise awareness on the issue.
We trained 64 school debaters in the
national ICT security school discourse. Together with UNICEF Malaysia,
we organised the first ever Digi
CyberSAFETM Digital Citizen Camp in
D’House. Held over 3 days 2 nights,
the educational and interactive camp
was aimed at building capacity of
young ambassadors who would instil
digital citizenship among their peers.

Digi’s CyberSAFETM Champion, Philip Ling, was awarded the Cybersafe Professional
2016 by Cybersecurity Malaysia, an agency under the Ministry of Science, Technology
and Innovation. The award recognises an individual’s contribution and commitment to
Malaysia’s cyber and information security.
044 Annual Report 2016 Digi.Com Berhad

Sustainability

Digital Enablement

We continue to work with partners who have the vision of how digital
services can bring meaningful impact to their communities. With
our partners, we developed scalable solutions which underscore
our vision to leverage digital connectivity and services for good.

Keeping families safe: The Digi Family Safety


app allows a subscriber to keep track and connect
in real time with up to seven family members.
The app allows customers to create a geo-fence
alert, check-in upon arrival, parental control on
time and apps used, and to remotely lock and erase information
on a stolen phone. https://familysafety.digi.com.my/.

Accessing safer child care: Working alongside Childline Malaysia Enhancing learning of sign language: Eddy, an edutainment app
and The Association of Registered Childcare Providers Malaysia, which intends to gamify the learning of sign language emerged
we developed asuhan.my to help families identify and review as the winner of Digi Challenge for Change 7. Eddy utilises 3D
over 3,000 child care centres registered under the Child Care animation, localised content and games to make learning sign
Centre Act 1984. It also identifies care centres that are not language easier and more fun for everyone. The Eddy team won a
registered with local authorities, provides an avenue to report RM50,000 cash prize, and an additional RM70,000 from Digi and
suspected abuse, and to locate the nearest support systems. Agensi Innovasi Malaysia as they meet development milestones
www.asuhan.my. over the next six months.

Empowering women: Wanita Era Digital project reached out to


rural and urban poor communities to engage women and to close
the gender digital divide. The programme equips women with
basic internet and e-commerce skills, and online safety awareness.

Creating a digital identity: In partnership with


the United Nations Global Compact (UNGC)
Malaysia, we developed an app to support the
rollout of Bluenumbers, a free self-generated
This is a summary of key sustainability initiatives undertaken by Digi
registry of basic information volunteered by in 2016. For more detailed information on sustainability governance,
farmers and agri-suppliers to identify themselves in the supply material issues, stakeholder engagement, management approach,
chain. Businesses will be able to tap into this big data repository for initiatives, and data trends, please go to www.digi.com.my/
analytics, connect deeper into their supply chain, and to evidence sustainability.
impact. www.bluenumbers.org. Deloitte PLT has provided a limited external assurance of select
indicators presented in this section of the Annual Report. The limited
external assurance opinion can be found on page 153 to 155 of this
Annual Report.
Inspiring Your Digital Life Annual Report 2016 045
046 Annual Report 2016 Digi.Com Berhad

Board of Directors

Morten Karlsen Sorby


Non-Independent Non-
Executive Director,
Tan Sri Chairman of the
Board of Directors and
Saw Choo Boon
Remuneration Committee
Independent Non-
Executive Director,
Chairman of the Audit & Kristin Muri Moller
Risk Committee, Member Non-Independent
of the Nomination Non-Executive Director
Committee
Inspiring Your Digital Life Annual Report 2016 047

Decisive.
Our Board has set clear directions for our business moving forward;
a well-defined digital strategy focused on securing Digi’s long-term
growth and continued attractive returns to shareholders.

Tore Johnsen
Yasmin Binti Non-Independent Lars-Ake
Aladad Khan Non-Executive Director, Valdemar Norling
Independent Non- Member of the Audit Non-Independent
Executive Director, & Risk Committee and Non-Executive Director, Vimala A/P
Chairman of the Remuneration Committee Member of the V.R. Menon
Nomination Committee Nomination Committee Independent Non-
and Remuneration Executive Director,
Committee Member of the
Audit & Risk Committee

GOVERNANCE
048 Annual Report 2016 Digi.Com Berhad

Directors’ Profile

Morten Karlsen Sorby Tan Sri Saw Choo Boon

58 years of age, Norwegian, Male 70 years of age, Malaysian, Male

Non-Independent Non-Executive Director Independent Non-Executive Director


Chairman of the Board of Directors Chairman of the Audit & Risk Committee
Chairman of the Remuneration Committee Member of the Nomination Committee

Appointed to Board: 15 March 2013 Appointed to Board: 9 December 2010

Career History Career History


Mr Sorby joined Telenor ASA in 1993 where he held a number Tan Sri Saw joined Shell in 1970 as a Refinery Technologist in Shell
of senior positions. He was appointed Executive Vice President Refining Company (Federation of Malaya) Bhd. He then served in
and member of the Group Executive Management team in 2003. various capacities in Manufacturing, Supply, Trading and Planning
Mr Sorby, in his capacity as Executive Vice President, served as in Malaysia, Singapore and the Netherlands. In 1996, Tan Sri Saw
Head of Norwegian Market from 2003 to 2005, Head of Nordic was appointed Managing Director of Shell MDS (Malaysia) Sdn
Operations from 2005 to 2009, Executive Vice President and Bhd. In 1998, he assumed the position of Managing Director for
Head of Corporate Development from 2009 to 2011, and Head of Oil Products (Downstream) Shell Malaysia. In 1999, with the
Strategy and Regulatory Affairs from 2011 to 2013. He was Chief globalisation of the Shell Oil Products business, he was appointed
Executive Officer of Uninor, India in 2014. Mr Sorby served as Vice President of the Commercial business in the Asia Pacific
Executive Vice President and Acting CFO of Telenor Group from region. In 2005, he assumed the Vice President Global Marine
November 2015 until November 2016. He previously worked at position to manage the marketing of oil products to shipping
Arthur Andersen & Co in Oslo, Norway. customers globally. He was appointed Chairman of Shell Malaysia
Ltd from 2006 until 2010, and Senior Advisor until 30 June 2010,
Other Commitments when he retired from Shell after 40 years of continuous service.
Mr Sorby is an Executive Vice President in Telenor Group
and Chief Transformation Officer. He is a Director of Digi Other Commitments
Telecommunications Sdn Bhd, Board Member Telenor Norway, Tan Sri Saw is an Independent Director of RHB Bank Berhad and
Total Access Communication Public Company Limited, Thailand Ranhill Holdings Bhd, and Director of some private companies. He
and Posten Norge. is also the Chairman of MRCB Quill Management Sdn Bhd.

Skills & Experience In addition, he is the co-chairman of the Government’s Public-


Mr Sorby has a Master of Science in Business Administration. Private Sector Special Task Force on Facilitating Business
He is a state licensed public accountant (Norway), and also has (PEMUDAH), Immediate Past President of the Federation of
qualifications from the International Institute for Management Malaysian Manufacturers Council and a director on the Socio-
Development, IMD, in Lausanne, Switzerland. Economic Research Centre Board of the Associated Chinese
Chambers of Commerce and Industry Malaysia.

Skills & Experience


Tan Sri Saw holds a Bachelor of Science Hons (Chemistry) from
University of Malaya.
Inspiring Your Digital Life Annual Report 2016 049

Directors’ Profile

Tore Johnsen Yasmin Binti Aladad Khan

69 years of age, Norwegian, Male 59 years of age, Malaysian, Female

Non-Independent Non-Executive Director Independent Non-Executive Director


Member of the Audit & Risk Committee Chairman of the Nomination Committee
Member of the Remuneration Committee

Appointed to Board: 15 March 2013 Appointed to Board: 23 July 2013

Career History Career History


Mr Johnsen started his career in Televerket (Norway) in 1974 Puan Yasmin pursued a career in banking where she started out as
and held various managerial positions including Head of Telenor a Credit Analyst and eventually secured a role as Vice President,
Broadcast for four (4) years. He acquired extensive experience in Corporate and Investment Banking at JP Morgan Chase. She later
start-up ventures after joining the mobile business in 1988 and joined General Electric (GE) Operations Inc as Director, Business
has international experience from various mobile operators both Development of GE International Inc, Thailand and Malaysia, and
in Europe and South East Asia. He served as the Chief Executive was later promoted to Chief Operating Officer of GE International
Officer (CEO) of Digi.Com Berhad and Chief Operating Officer Inc, Thailand.
of Digi Telecommunications Sdn Bhd from February 2001 to July
2004. Prior to joining Digi as the Head of Corporate Strategy She was the Senior Vice President, South East Asia & South Asia

GOVERNANCE
in January 2000, he served as the Mobile Product Director at for DHL Express overseeing 14 countries with more than 14,000
Telenor Asia Pte Ltd in Singapore. Mr Johnsen was also CEO of employees and 160,000 customers until December 2015. Prior
Telenor Pakistan Ltd from August 2004 to August 2008, CEO of to this, she was DHL Singapore’s Country Manager in 2003 and
Total Access Communications Public Company Limited, Thailand Country Manager in Malaysia in 2001.
from August 2008 to March 2011, and CEO of Grameenphone
Ltd, Bangladesh from March 2011 to January 2013. Other Commitments
Puan Yasmin is a Director of DHL’s subsidiaries in Asia Pacific and
Other Commitments she also holds the role as Executive Vice President, Asia Pacific
Mr Johnsen is currently a Senior Advisor for Telenor ASA, and (excluding China) and Managing Director, Emerging Markets.
Director of Total Access Communications Public Company
Limited, Thailand, Grameenphone Ltd, Bangladesh and Digi Skills & Experience
Telecommunications Sdn Bhd. Puan Yasmin holds a Master in Business Administration from
Aston University, and is currently a member of the Advisory Board
Skills & Experience of Singapore Management University.
Mr Johnsen holds a Master of Science from University of
Trondheim (1972) in addition to Studies in International Business
Management at the Norwegian School of Economics and Business
Management (1995).
050 Annual Report 2016 Digi.Com Berhad

Directors’ Profile

Lars-Ake Valdemar Norling Kristin Muri Moller

47 years of age, Swedish, Male 50 years of age, Norwegian, Female

Non-Independent Non-Executive Director Non- Independent Non-Executive Director


Member of the Nomination Committee
Member of the Remuneration Committee

Appointed to Board: 19 August 2015 Appointed to Board: 4 February 2016

Career History Career History


Mr Norling was CEO of Digi Telecommunications Sdn Bhd from Ms Moller joined Telenor Group in 1996 as Head of Accounting
August 2014 to March 2015. He served as CEO of Telenor in Telenor Satellite Services. Since then, she has held various
Sweden from April 2009 to July 2014 and as a Chief Technology finance positions in Telenor Group businesses primarily related
Officer of Telenor Sweden from September 2007 to March to media and broadcast, building her vast experience in the areas
2009. He also served as Chief Operating Officer for the Fixed of accounting, controlling, performance management, governance
Network and Products within Telenor Sweden from September and internal control, treasury, risk management as well as driving
2006 to August 2007. Mr Norling joined the fixed broadband business transformations. She served as Chief Financial Officer
provider Bredbandsbolaget in 1999, where he held a number (CFO) of Broadcast and Canal Digital, a business of Telenor
of executive positions such as Chief Information Officer, Chief Broadcast from April 2010 to November 2014 and CFO of
Technology Officer and Chief Operating Officer. He has also Telenor Denmark from 1 December 2014 to 1 December 2016.
worked at Ericsson Business Consulting both as a manager and
a management consultant. He started his career as a trainee at Other Commitments
ASEA Brown Boveri in 1993. Ms Moller is currently the CFO of Telenor Norway with key
responsibilities in financial quality, assurance and reporting,
Other Commitments business performance management and sourcing. She is also a
Mr Norling is currently a Director and CEO of Total Access Director of Digi Telecommunications Sdn Bhd.
Communication Public Company Limited, Thailand and Director of
Digi Telecommunications Sdn Bhd. Skills & Experience
Ms Moller holds a Bachelor of Commerce/Business studies at
Skills & Experience Norwegian School of Management.
Mr Norling holds a Master of Business Administration from
Gothenburg School of Economics, Sweden, a Master of Science
in Engineering Physics from Uppsala University and a Master of
Science in Engineering from Case Western Reserve University,
USA.
Inspiring Your Digital Life Annual Report 2016 051

Directors’ Profile

Vimala A/P V.R. Menon

62 years of age, Malaysian, Female

Independent Non-Executive Director


Member of the Audit & Risk Committee

Appointed to Board: 1 July 2015

Career History Save as disclosed, none of the Directors have any:-


Ms Menon is a Chartered Accountant and has more than 30 years
of experience in Finance and General management. She started her 1. Family relationship with any Director and/or major
career in 1982 and after a brief time in practice, she joined Edaran shareholders of the Company;
Otomobil Nasional Berhad (EON Berhad) as Manager in the 2. Conflict of interest with the Company; and
Finance Division in 1984. In 1989 she was promoted to General 3. Conviction for offences within the past 5 years other
Manager Finance and then to Director of Finance and Corporate than traffic offences.
Services, and served as a non-independent Board member of EON
Berhad from 1990 to 2006. At various times during this period,
she also served as a Board member of EON Bank Berhad, Jardine

GOVERNANCE
Cycle & Carriage Limited and PT Astra International Tbk. She left
EON Berhad in 2007 and was subsequently appointed Director
of Finance and Corporate Affairs at Proton Holdings Berhad from
2008 to 2009.

From July 2014 to Jan 2017, Ms Menon served as a member of


the Board of Trustees of Pemandu Corporation.

Other Commitments
Ms Menon is currently the Senior Independent Director
and Chairman of the Board Audit Committee for Petronas
Chemical Group Berhad and Cycle & Carriage Bintang Berhad,
and Independent Director and Chairman of the Board Audit
Committee for Petronas Dagangan Berhad. She is also a Board
member of Prince Court Medical Centre Sdn Bhd.

Skills & Experience


Ms Menon is a Fellow of the Institute of Chartered Accountants
in England and Wales, and a Member of the Malaysian Institute of
Accountants (MIA).
052 Annual Report 2016 Digi.Com Berhad

Management
Inspiring Your Digital Life Annual Report 2016 053

Active.
Our leaders are committed to executing our strategy and achieving
our ambitious goals to capture growth opportunities in digital; deeply
driven by a customer-first, and innovation-led approach to everything.

left to right
1. Kesavan Sivabalan Chief Network Officer
2. Loh Keh Jiat Chief Marketing Officer
3. Haroon Bhatti Chief Human Resource Officer
4. Eugene Teh Chief Corporate Affairs Officer
5. Albern Murty Chief Executive Officer
6. Praveen Rajan Chief Digital Officer
7. Orsolya Sekerka Chief IT Officer
8. Karl Erik Broten Chief Financial Officer

GOVERNANCE
054 Annual Report 2016 Digi.Com Berhad

Management Profiles

Albern Murty Karl Erik Broten Eugene Teh


Chief Executive Officer Chief Financial Officer Chief Corporate Affairs Officer
Male, 44, Malaysian Male, 49, Norwegian Male, 42, Malaysian

Career History Career History Career History


Albern was appointed Chief Executive Karl joined Digi Telecommunications Sdn Eugene was appointed Chief Corporate
Officer on 1 April 2015. Prior to that, Bhd as Chief Financial Officer in May Affairs Officer on 1 January 2014.
he was the Chief Operating Officer 2013. He was formerly the Chief Financial Formerly, he was a Director at the
of Digi Telecommunications Sdn Bhd. Officer at Telenor Pakistan and at Pannon Performance Management and Delivery
Since joining Digi Telecommunications GSM (now Telenor Hungary). He has also Unit (PEMANDU) of the Prime Minister’s
Sdn Bhd in 2002, he has held roles in held leadership positions in Telenor Norway, Department. Eugene previously helmed
Project Planning and Controls, Product Telenor Business Solutions, and in Telenor- senior leadership roles in Arthur D. Little,
Management and Product Development, owned operations in Russia, among others. and McKinsey & Co. He was also a senior
and as Head of Strategy and New Business, He has been with the Telenor Group since investment officer at Singapore’s Economic
Acting Co-Chief Marketing Officer and 1996. Development Board.
Chief Marketing Officer. Before Digi, his
previous experience includes business and Skills & Experience Skills & Experience
commercial management roles in Lucent Karl holds a Master of Science in Business Eugene holds a Master of Science in
Technologies across the Asian region. Administration, majoring in International Electrical Engineering and Computer
Management from Agder University Science from University of California
Skills & Experience College, Norway. Berkeley, USA.
Albern holds a Bachelor of Science in
Marketing and Advertising Management
from Portland State University, Oregon,
Loh Keh Jiat Orsolya Sekerka
USA.
Chief Marketing Officer Chief IT Officer
Male, 45, Malaysian Female, 44, Hungarian

Career History Career History


Loh was appointed Chief Marketing Orsolya was appointed Chief IT Officer
Officer on 30 March 2016. Prior to that, on 13 April 2015. She joined Digi
he was Chief Sales Officer. He has held Telecommunications Sdn Bhd in June
other various senior positions within 2013 as Head of IT Development. Orsolya
the Marketing Division in his 10 years was formerly the Network Sharing Project
with Digi Telecommunications Sdn Director in Telenor Hungary. There, she
Bhd. These include Head of Postpaid, also held many different leadership roles
Head of Corporate Strategy and in Technology and Business Coordination
Broadband, Head of Product Marketing, such as Head of Development, Head
and Head of Channels and Regional of Business Analysis and Project
Management. He has more than 20 years Management, and Head of IT Operations.
of experience in the telecommunications She has been with Telenor Group since
and accounting industries, having held 1999.
roles at PT Mobile-8 Tbk Indonesia and
PricewaterhouseCoopers prior to joining Skills & Experience
Digi. Orsolya holds a Master of Science in
Business Administration from Budapest
Skills & Experience University of Economic Sciences, Hungary.
Loh is a Chartered Accountant who holds
a Bachelor of Business (Accounting) from
Monash University, Australia.
Inspiring Your Digital Life Annual Report 2016 055

Management Profiles

Kesavan Sivabalan Haroon Bhatti


Chief Network Officer Chief Human Resource Officer
Male, 48, Malaysian Male, 41, Pakistani Canadian

Career History Career History


Kesavan was appointed Chief Network Haroon was appointed Chief Human
Officer on 13 April 2015. He joined Digi Resource Officer on 1 July 2013. Prior
Telecommunications Sdn Bhd as the Head to that, he was the Senior Vice President
of Technology Operations in August 2013. of People Development at Telenor
Prior to Digi Telecommunications Sdn Bhd, Asia. Formerly, he held leadership
he was the General Manager of Access positions within Telenor Asia’s business
Network at Vodafone Australia. Kesavan units, including Chief People Officer in
has more than 20 years of experience in Grameenphone Ltd, Bangladesh and Total
the telecommunications industry in several Access Communications Public Company
Asian and European markets including Limited, Thailand. Haroon began his career
Malaysia, Germany, Australia, Cambodia, with the Telenor Group in 2005 with
Vietnam and Bangladesh, working with Telenor Pakistan.
network vendors like Lucent and Ericsson,
and operators like Maxis and Vodafone. Skills & Experience
Haroon is a graduate of McGill University
Skills & Experience in Canada. He holds a Master of Arts in
Kesavan holds a Bachelor of Business Political Science (International Relations),
from Deakin University, Australia and a and a Bachelor of Arts in Economics and

GOVERNANCE
Master of Science in Enterprise Project Political Science.
Management from Stevens Institute of
Technology, New York, USA.
Praveen Rajan
Chief Digital Officer
Male, 38, Malaysian

Career History:
Praveen was appointed Chief Digital
Officer on 1 June 2016. He joined Digi
Telecommunications Sdn Bhd in 2007, and
brings more than 15 years of experience in
the internet and mobile industries. He has
held multiple leadership positions in his ten The CEO has:
year stint with Digi Telecommunications 4,600 interest in shares of Digi.Com
Sdn Bhd, and these include Head of Berhad.
Advanced Data Services, Head of Products
– Internet & Services, and Head of Postpaid The Management Team do not have any
& Digital Services. Prior to joining Digi, of the following:
Praveen co-founded a social networking 1. Directorship of public companies;
startup called LifeLogger in 2003, where he 2. Family relationship with any Director
served as the Chief Technology Officer. and/or major shareholders of the
Company;
Skills & Experience: 3. Conflict of interest with the Company;
Praveen holds a Bachelor of Engineering and
(BEng), Electronics and Computing from 4. Conviction for offences within the past
Nottingham Trent University, Nottingham, 5 years other than traffic offences.
England.
056 Annual Report 2016 Digi.Com Berhad

Statement on Corporate Governance

The Board of Directors (the Board) of Digi.Com Berhad and its Group of Companies (Digi or the Group) integrates business integrity
into the strategies and operations of the Group because the Board believes that maintaining good corporate ethics is key to delivering
shareholders’ value.

Digi is guided by the principles of the Malaysian Code on Corporate Governance 2012 (MCCG 2012) and the Corporate Governance
Guide issued by Bursa Malaysia Securities Berhad (Bursa Securities) in its corporate governance practices, and continues to strive
towards achieving a high standard of corporate governance.

This statement describes how Digi has applied the principles and in general complied with the recommendations of the MCCG 2012
during the financial year under review.

Board Board Financial Stakeholder


Structure Effectiveness Reporting Engagement

• Board Composition & • Board Charter • Compliance of Financial • Analyst Briefings


Balance • Time Commitment Statements with • Annual General Meeting
• Annual Assessment of Applicable Financial
• Directors’ Training & • Website
Directors Reporting Standards
Induction • Share Register Analysis
• Annual Assessment of • Related Party
• Compliance Framework • Investor Conferences and
Independence Transactions
• Company Secretaries Roadshows
• Tenure of Independent • Independence of External
• Sustainability Auditors
Directors
• Board Diversity • Risk Management &
Internal Control
• Board Committees
• Roles & Responsibilities
• Separation of positions of
the Chairman & CEO

I. Board Structure

Board Composition and Balance

In leading a telecommunications company, the Board seeks to continually evolve its membership by seeking Non-Executive Directors
equipped with diverse and complementary skills and perspectives, as well as extensive experience in international operations.

The Board currently has seven (7) Directors, comprising four (4) Non-Independent Directors and three (3) Independent Directors.
They are all Non-Executive Directors.

The Chairman, Mr Morten Karlsen Sorby is a Non-Independent Non-Executive Director. Notwithstanding that the Board does
not comprise majority Independent Directors where the Chairman is not an Independent Director as recommended in the MCCG
2012, the Independent Directors are able to exercise strong independent judgment and provide balance to the Board with their
unbiased and independent views and advice to all Board deliberations. The Nomination Committee (NC) has assessed and held the
view that Mr Sorby has and continues to play an effective role as Chairman and Director of Digi. He has consistently demonstrated
strong commitment and judgment in overseeing the management function, taking care of the best interests of the shareholders and
facilitating Board meetings to ensure that contributions by all Directors are forthcoming on matters being deliberated and that no
particular Board member dominated in any of the discussions. This ensures the balance of power and authority within the Board
whilst taking cognizance of the interests of minority shareholders and other stakeholders.
Inspiring Your Digital Life Annual Report 2016 057

Statement on Corporate Governance

Annual Assessment of Directors

The Board assesses annually the effectiveness of the Board as a whole, Board Committees and Directors individually through
the NC. Further details are shared in the NC report from pages 78 to 79. In January 2017, the NC conducted an assessment of
the Board’s effectiveness and recommended the re-election of Puan Yasmin Binti Aladad Khan and Tan Sri Saw Choo Boon, the
Directors who are retiring by rotation in accordance with Article 98(A) of the Company’s Articles of Association at the forthcoming
AGM to be held in May 2017. The Board (save for the interested Directors who have abstained from deliberations) is satisfied that
they have continued to contribute to the Board’s effectiveness and have discharged their responsibilities as Directors. Therefore,
their re-election to the Board is recommended for shareholders’ approval.

The Board is satisfied that the current composition of Directors provides the appropriate mix of relevant skills and knowledge,
experience, balance and size necessary to promote shareholders’ interests and govern Digi effectively. It also fairly represents
the ownership structure of Digi, with appropriate representation of minority interests through the Independent Non-Executive
Directors. The Non-Executive Directors contribute international and operational experience, and understanding of the financial and
capital markets.

Most of the Directors have experience in the telecommunications industry. A brief description of the background of each Director is
presented in pages 48 to 51 of the Annual Report.

Annual Assessment of Independence

Tan Sri Saw Choo Boon, Puan Yasmin Binti Aladad Khan and Ms Vimala A/P V.R. Menon are Independent Directors. Based on the
independence assessment in 2017, the Board is satisfied with the level of independence demonstrated through their engagement in
meetings, providing objective challenges to Management and bringing independent judgment to decisions taken by the Board. The

GOVERNANCE
Independent Directors fulfill the criteria of “Independence” as prescribed under Chapter 1 of the Main Market Listing Requirements
of Bursa Securities (MMLR). Digi fulfills the requirement to have at least one-third of the Board comprising Independent Non-
Executive Directors.

Tenure of Independent Directors

The Independent Directors are assessed annually based on the criteria established by the Board. In assessing independence, the
Board has considered the recommendations of the MCCG 2012 regarding the tenure of Independent Directors to be limited to
nine (9) years, and hence, do not encourage a Director whose term of appointment has exceeded a cumulative period of 9 years
to be retained as an Independent Director. At this juncture, there is no such Director who has served on the Board for more than
9 years. However, if and when such an occasion arises, the experience and knowledge of long-service Directors would be taken
into consideration and the Board has authorised the NC to conduct an assessment of the Independence of such Directors prior to
seeking shareholders’ approval to retain such Independent non-Executive Directors on the Board.

Board Diversity

The Board recognises that other aspects of diversity within the Board are also important, and this includes a mix of skills, experience,
perspective, gender and age. The evolution of this mix is a long-term process that is deliberated each time a vacancy arises to ensure
a balanced and diverse Board composition is maintained. The Diversity Policy aims to set the approach to achieve diversity on Digi’s
Board and its workforce.

Currently, there are three (3) women serving as members of the Board, reflecting a 43% female representation among Non-
Executive Directors on the Board which exceeds the Malaysian government’s target of 30% women participation on boards of public
listed companies.

Further information on diversity within the organisation is included in Digi’s 2016 Sustainability Report, available at
www.digi.com.my/sustainability.

The Diversity policy is accessible on Digi’s website at digi.listedcompany.com/misc/factsheet.


058 Annual Report 2016 Digi.Com Berhad

Statement on Corporate Governance

Board Age Diversity Board Gender Balance

45 - 50
66 - 70 years
years 29%
28% Female
43%

Male
57%
61 - 65
years
14% 55 - 60
years
29%

Length of Service

1-2 Y 3

3Y 0

4Y 3

5Y 0

6Y 1

No. of Directors

Board Committees

The Board has established three (3) Board Committees, namely the Audit & Risk Committee (ARC), Remuneration Committee (RC)
and NC which are entrusted with specific responsibilities to oversee Digi’s affairs, with authority to act on behalf of the Board in
accordance with their respective Terms of Reference (TOR). The Board Committees review matters within their TORs and make
recommendations to the Board for approval. The Board is kept appraised of the activities of the Board Committees through
circulation of minutes of the Board Committees meetings and update by the respective Chairman of the Board Committees.

Although the Board has granted discretionary authority to these Committees to deliberate and decide on certain operational
matters as set out in their respective charter, the ultimate responsibility for final decision on all matters lies with the Board.
Inspiring Your Digital Life Annual Report 2016 059

Statement on Corporate Governance

The composition of the Board Committees is as follows:

Audit & Risk Committee Nomination Committee Remuneration Committee

Tan Sri Saw Choo Boon Yasmin Binti Aladad Khan Morten Karlsen Sorby
Chairman, Independent Non-Executive Chairman, Independent Non-Executive Chairman, Non-Independent Non-
Director Director Executive Director

Tore Johnsen Tan Sri Saw Choo Boon Tore Johnsen


Member, Non-Independent Non-Executive Member, Independent Non-Executive Member, Non-Independent Non-Executive
Director Director Director

Vimala A/P V.R. Menon Lars-Ake Valdemar Norling Lars-Ake Valdemar Norling
Member, Independent Non-Executive Member, Non-Independent Non-Executive Member, Non-Independent Non-Executive
Director Director Director

The TOR for each of the Committees is accessible on Digi’s website at digi.listedcompany.com/misc/factsheet.

• All Board Committees consist of members who are Non-Executive Directors, a majority of whom are independent except for the
RC where all its members are non-independent.
• All Board Committees meet as and when necessary. Decisions can also be made via circular resolutions.
• In carrying out its duties and responsibilities, the Board Committees have:
(i) full access to any information, records, properties and personnel of Digi, and
(ii) power to obtain independent professional advice and expertise necessary in order to enable them to discharge their duties

GOVERNANCE
effectively.
• All members of the Board Committees have access to the advice and services of the Company Secretaries.

Details of the attendance at Board Committees meetings are set out on page 62.

Audit & Risk Committee (ARC)

The summary of activities of the ARC can be found in the ARC Report from pages 75 to 77 of this Annual Report.

Nomination Committee (NC)

The NC oversees matters related to Board structure in ensuring the existence of the right mix of experience, skills, knowledge,
expertise, professionalism, integrity, competence, time commitment and other factors with regard to the leadership needs of the
Company. A summary of the activities of the NC is set out in the NC Report from page 78 to 79.

Remuneration Committee (RC)

During the year, the RC met once and all members of the Committee attended the meeting.

The RC evaluated Mr Albern Murty as CEO against his set performance criteria and reviewed his compensation package thereof.
The Chairman of the RC was authorised by the Board to determine the compensation package for the CEO.

The Board established formal and transparent remuneration policies and procedures for the Board and its Committees, to attract,
retain and motivate the Directors. Non-Executive Directors’ remuneration is structured to link with their contributions to the overall
performance of the Company and commensurate with their experience, expertise and level of responsibilities.
060 Annual Report 2016 Digi.Com Berhad

Statement on Corporate Governance

The Board collectively determined the remuneration for the Independent Directors based on the recommendation of the RC. Each
of the Independent Directors abstained from deliberating and voting on their own remuneration. The Non-Independent Non-
Executive Directors receive their remuneration from their employing companies within Telenor Group and do not receive any form
of remuneration from Digi. The Board is of the view that the current remuneration level suffices to attract, retain and motivate
qualified Directors to serve on the Board.

The details of the remuneration of Directors (both the Company and the Group) comprising fixed monthly fees and ARC meeting
allowances for the financial year 2016 are as follows:

Non-Executive Directors Company Group


Total
Fees Benefits in Fees Benefits in
(RM)
Kind^ Kind^
(RM) (RM) (RM) (RM)

Tan Sri Saw Choo Boon 240,000 3,334 31,992 Nil 275,326

Yasmin Binti Aladad Khan 240,000 Nil Nil Nil 240,000

Vimala A/P V.R. Menon 240,000 2,000 Nil Nil 242,000

Total 725,334 31,992 757,326

^ Meeting Allowance only applicable for ARC meetings

The number of Directors of the Company in each remuneration band is as follows:-

Non-Executive Directors
Not applicable 4
RM200,000 – RM250,000 2
RM250,001 – RM300,000 1
Total 7

Roles and Responsibilities

The Board is cognizant of the need to promote and protect the interests of shareholders and stakeholders of Digi. The Board also
shoulders the ultimate responsibility of determining the direction of the Group, assisting in the fine-tuning of corporate strategies
and ensuring effective execution of these strategies.

The Board shall be involved in any matters that may have a significant impact on Digi’s business, including, and not limited to, issues
within objectives and strategies, operations, finances and employees.
Inspiring Your Digital Life Annual Report 2016 061

Statement on Corporate Governance

During the financial year 2016, the Board carried out the following activities:

• approved the appointment of Ms Kristin Muri Moller as a member of the Board;


• reviewed and approved the annual strategy plan, ambitions and targets for the Group, including addressing the Group’s business
strategies on promoting sustainability;
• oversaw the implementation of the Group’s strategic and business plan through quarterly updates with the CEO;
• identified the principal business risks faced by the Group and ensured the implementation of appropriate internal controls and
mitigating measures to address such risks;
• reviewed the adequacy and integrity of the Group’s internal controls and management information systems, including systems
for compliance with applicable laws, regulations, rules, directives, and guidelines;
• reviewed and approved on the Group’s capital investment;
• reviewed significant operational and financial issues to ensure that the financial statements are true and fair, and conform with
accounting standards;
• reviewed and approved the quarterly financial results for the financial year 2016 for announcement to Bursa Securities and
year-end audited financial statements for 2015;
• approved the quarterly interim dividends for the financial year 2016;
• approved the Audit & Risk Committee Report, Statement on Corporate Governance and Statement on Risk Management and
Internal Control for disclosure in the annual report;
• reviewed and approved the revision of the TORs of the Board Committees;
• received minutes of the Board Committees meetings and kept updated on the activities of the Board Committees on a regular
basis;

GOVERNANCE
• approved the Circular to Shareholders in relation to recurrent related party transactions;
• reviewed and approved Group expenditure which exceeds the authority limits of the CEO and Management as defined in the
Delegation Authority Matrix;
• approved the revision of the Group’s policies;
• received updates on tax that impacts the Groups’ businesses; and
• reviewed the evaluation results of the Board, Board Committees, Directors Self/Peer and Independent Directors for the
financial year ended 2016.

Separation of Positions of the Chairman and CEO

There is a clear division of responsibility between the Chairman and the CEO to ensure that there is a balance of power and authority,
where no individual has complete autonomy over decision making. The Chairman leads the Board with a keen focus on governance
and compliance, ensuring its effectiveness. He principally ensures that the Board fulfills its obligations under the Board Charter and
as required under the relevant legislations. He engages directly with the CEO to monitor business performance and oversees the
implementation of strategies.

The CEO ensures effective implementation of the Board’s policies, achieves strategic and performance targets, exercises high levels
of business judgment and manages the relationship with stakeholders and the public. The Board has delegated the authority to
achieve the Company’s corporate objectives to the CEO in accordance with the Rules of Procedure for the CEO and he remains
accountable to the Board. The CEO is not a Board member of Digi.Com Berhad to ensure there is a clear distinction between the
roles of the CEO and the Board, and to prevent conflict of interest. He is supported by seven other members of the Management
team.
062 Annual Report 2016 Digi.Com Berhad

Statement on Corporate Governance

II. Board Effectiveness

Board Charter

The Board is guided by the principles contained in the MCCG 2012, the Board Charter and the Delegation Authority Matrix, which
set out the practices and processes in the discharge of its responsibilities, the matters that are reserved for consideration and
decision making, the authority that has been delegated to the CEO including the authority limits which the CEO can execute, and
provides guidance on the division of responsibilities between the Board and the CEO.

The Board Charter and the Delegation Authority Matrix are reviewed and revised, as and when required, to ensure an optimal
structure for efficient and effective decision making in the organisation.

The Board Charter is accessible on Digi’s website at digi.listedcompany.com/misc/factsheet.

Time Commitment

The Directors are aware of the time commitment expected from them to attend to matters of the Group in general, including
attending meetings of the Board, Board Committees and AGM. As such, meetings are scheduled one year in advance and due notice
is given for additional meetings.

Technology is effectively used in Board Meetings and in communication with the Board, where Directors may participate in meetings
by audio or video conferencing.

The Board is satisfied with the level of time commitment given by the Directors in the discharge of their roles and responsibilities.
The breakdown of the Directors’ attendance at the Board, various Board Committee meetings and the AGM during the year are set
out below:

Name of Directors Board ARC NC RC AGM
meetings Meetings Meetings Meetings
7 5 1 1 1
Morten Karlsen Sorby 7/7 N/A N/A 1/1 1/1
Chairman/Non-Independent Non-Executive Director (100%) (100%) (100%)

Tan Sri Saw Choo Boon 7/7 5/5 1/1 N/A 1/1
Independent Non-Executive Director (100%) (100%) (100%) (100%)

Tore Johnsen 6/7 5/5 N/A 1/1 1/1


Non-Independent Non-Executive Director (86%) (100%) (100%) (100%)

Yasmin Binti Aladad Khan 7/7 N/A 1/1 N/A 1/1


Independent Non-Executive Director (100%) (100%) (100%)

Vimala A/P V.R. Menon 7/7 5/5 N/A N/A 1/1


Independent Non-Executive Director (100%) (100%) (100%)

Lars-Ake Valdemar Norling 7/7 N/A 1/1 1/1 1/1


Non-Independent Non-Executive Director (100%) (100%) (100%) (100%)

Kristin Muri Moller 6/6 N/A N/A N/A 1/1


Non-Independent Non-Executive Director (100%) (100%)
(Appointed on 4 February 2016)

Inspiring Your Digital Life Annual Report 2016 063

Statement on Corporate Governance

At Board meetings, the Chairman encourages constructive and healthy debates, and Directors are free to express their views.
Any Director who has a direct or deemed interest in the subject matter abstains from deliberation and voting on the respective
resolution. Decisions of the Board are made unanimously or by consensus. Where appropriate, decisions may be taken by way of
Directors’ Circular Resolutions between scheduled and special meetings. In 2016, six resolutions, ranging from administrative to
operational in nature, were approved by Directors via Circular Resolutions.

The agenda for the meeting of the Board is set by the Company Secretaries in consultation with the Chairman and the CEO. The
agenda, the relevant reports and Board papers are furnished to Directors in advance to allow the Directors sufficient time to peruse
the materials, thereby facilitating effective discussion and decision making during the meeting. The Board has a regular schedule of
matters which are typically on the agenda and is reviewed during the course of the year.

The proceedings of and resolutions passed at each Board and Committee meetings are minuted by the Company Secretaries and
kept in the Minutes Book at the registered office.

Directors’ Training and Induction

The Board emphasises the importance of continuing education for its Directors to ensure that they are equipped with the necessary
skills and knowledge to meet the challenges of the Board. All existing Directors have completed the Mandatory Accreditation
Programme (MAP). The NC continues to evaluate and determine the training needs of its members to assist them in the discharge
of their duties as Directors. The Company Secretaries arranges for the Directors’ attendance at the training programmes, which are
conducted either in-house or by external service providers. All Directors attended training programmes during the year.

Orientation and familiarisation programmes including market visits to Digi’s business operations and meetings with the Management

GOVERNANCE
were organised for the newly appointed Directors during the year to facilitate the new Director’s understanding of Digi’s operations
and businesses. Regular briefings and workshops were scheduled on various topics for the Board and these sessions were held
together with the Management team to encourage open discussion on these topics.

Set out below are the training programmes attended by the Directors, individually or collectively, during the financial year 2016:

Date Courses
13 Jan 2016 The New Auditor’s Report – Sharing the UK Experience
22-25 Feb 2016 Mobile World Congress
26 Feb 2016 Corporate Governance Breakfast Series – Improving Board Risk Oversight Effectiveness
3 Mar 2016 Crisis Management Seminar
15 Mar 2016 EMC workshop
22 Mar 2016 DTAC & Ericsson workshop
31 Mar 2016 Sustainability Engagement Series for Directors
28 April 2016 National Start-up Expo
4-5 May 2016 Mandatory Accreditation Programme
5 May 2016 Digi Orientation Programme
27 May 2016 Ethical Leadership Programme
30 May 2016 Shell Global Scenarios
31 May 2016 SERC Global Economic Conference – The New Normal
30 Jun 2016 World Bank Malaysia Economic Monitor – Leveraging Trade Agreements
11 July 2016 Ensuring Organisation’s Sustainability through Integrated Strategic Risk Management Program - IERP
23 July 2016 Site Visit to RAPID Project Site, Pengerang
064 Annual Report 2016 Digi.Com Berhad

Statement on Corporate Governance

Date Courses
25 July 2016 • Introduction to MFRS9 – Ernst & Young
• General and Detailed Sustainability Statements in Annual Report 2017
3 Aug 2016 Best Practices for Board Excellence
16 Aug 2016 • International Blue Ocean Conference
• 5th PETRONAS BAC Forum
• Quality Awareness Certification
4-6 Sep 2016 Telenor Strategy Execution Programme
14 Sep 2016 Identify Right Board Talent
15 Sep 2016 Shariah Islamic Banking Awareness Program
27 Oct 2016 Security Awareness Recertification
31 Oct 2016 Anti-Money Laundering/Counter Terrorism Training
8 Nov 2016 • Director Training – New Company Act, Security & Terrorism in Malaysia, The Power of Social Media
• Dangerous Good Awareness Training
15-17 Nov 2016 Certified International Manager – Coaching for Success Program
15 Dec 2016 4-Year Strategy Workshop
19 Dec 2016 World Bank Malaysia Economic Monitor – Quest for Productivity Growth

Compliance Framework

The Board has adopted and implemented a Code of Conduct (Code) that reflects Digi’s vision and core values of integrity, respect,
trust and openness. It provides a clear direction on conducting business, interacting with the community, government and business
partners, and general workplace behaviour. It also includes guidance on disclosure of conflict of interests, maintaining confidentiality
and disclosure of information, good practices, internal controls and the duty to report where there is a breach of the Code.

All employees including the Board members are required to read and acknowledge the Code. Digi’s Ethics and Compliance Officer
reports regularly to the ARC on the compliance of the Code by Digi and its employees. Ongoing training is provided to employees
on the Code, in particular on how to deal with situations involving ethical dilemmas to ensure that they continuously uphold high
standards of conduct while performing their duties. In January 2016, a new Ethics & Compliance Hotline service was made available
to all employees and the public to allow the opportunity to speak up on misconduct and/or wrong doing by Digi employees.

The Ethics and Compliance Officer also handles whistle-blowing cases according to a well-defined process, outlined in the Whistle-
blowing Manual. Digi employees, suppliers, business partners and customers are encouraged to raise their concerns about any
malpractices involving Digi without any fear of repercussions. In case of illegal or unethical conduct in the workplace, employees
can choose to report it through the Ethics & Compliance Hotline, their respective leaders or directly to the Ethics and Compliance
Officer.

A copy of the Code is accessible on Digi’s website at www.digi.com.my/aboutus/corporate _overview/governance.do.


Inspiring Your Digital Life Annual Report 2016 065

Statement on Corporate Governance

Company Secretaries

The Board is satisfied with the performance and support rendered by the Company Secretaries in discharging their functions. The
Company Secretaries play an advisory role to the Board and are qualified, experienced, and competent in performing their duty. The
Company Secretaries carry out, among others, the following tasks:

• statutory duties as specified under the new Companies Act, 2016, MMLR and other relevant laws and regulations;
• updating and advising the Board on relevant guidelines on statutory and regulatory requirements periodically and the resultant
implications to Digi and the Directors in relation to their duties and responsibilities;
• attending and ensuring that all Board and Shareholders’ meetings are properly convened, pertinent issues discussed and
decided upon, and conclusions are properly recorded;
• following-up on the action points and implementation of the Board’s decisions to Management;
• facilitating the provision of information to the Board and Board Committees, and between Directors and Management from
time to time; and
• supporting the Board in ensuring adherence to Board policies and procedures.

The removal of Company Secretaries, if any, is a matter for the Board to decide collectively.

Sustainability

The Board is mindful of the importance of sustainability. It therefore takes necessary steps to ensure high standards of governance
across Digi’s operations, managing its environmental, social and governance impact as well as future risks and opportunities
in continuing to build a responsible, sustainable business. A summary of Digi’s sustainability agenda for the year under review is

GOVERNANCE
disclosed from pages 36 to 44 of this Annual Report.

Digi’s 2016 Sustainability Report is accessible online at www.digi.com.my/sustainability.

III. Financial Reporting

Compliance of Financial Statements with Applicable Financial Reporting Standards

The Board is responsible for ensuring that the financial statements are prepared in accordance with the Companies Act, 1965 and
are applicable to the Financial Reporting Standards in Malaysia so as to give a true and fair view of Digi’s financial state of affairs.

The Board is assisted by the ARC in overseeing and governing Digi’s financial reporting processes and the quality of its financial
reporting. The ARC meets on a quarterly basis to review the quarterly reports and annual financial statements focusing particularly
on compliance with applicable financial reporting standards and other legal requirements, changes in major accounting policies and
practices, significant adjustments arising from audit and significant and unusual events. A summary of the ARC’s activities during the
year are set out on pages 75 to 77 of this Annual Report.

Related Party Transactions

Details of these transactions are set out under Notes 28 to the Financial Statements and also the list of Related Party Transactions
from pages 132 to 134 and 145 of this Annual Report.
066 Annual Report 2016 Digi.Com Berhad

Statement on Corporate Governance

Independence of External Auditors

All Quarterly Results and Financial Statements were reviewed by external auditors prior to the tabling to the ARC for review.
The External Auditors also participated in the discussions relating to financial results at all ARC meetings. The ARC discussed key
concerns with and obtained feedback from the external auditors on matters relating to the company’s affairs without the presence
of the Management.

The ARC conducted an annual assessment of the external auditors. Areas of assessment include technical competencies, adequacy
of specialist support and senior audit partners’ accessibility and time commitment, independence and objectivity, audit scope
and planning, audit and non-audit fees and audit communications to the ARC. The external auditors confirmed to the Board their
independence in providing both audit and non-audit services up to the date of this statement. Following the review of the assessment,
the ARC was satisfied with Messrs Ernst and Young’s technical competency and audit independence and recommended the re-
appointment of Messrs Ernst & Young (EY) for shareholder approval at the coming AGM.

To reinforce the independence and objectivity of the external auditors, the ARC assessed all non-audit services that were above
50% of the statutory audit fees for the financial year 2016 that the auditors may be called upon to perform. This was so in those
circumstances where the auditors were best qualified and suitable to provide the required services given their comprehensive
knowledge of Digi’s business operations, systems and processes. During the financial year, the amount incurred by Digi and by the
Group in respect of audit fees and non-audit related fees for services rendered by EY are as follows:-

Company (RM) Group (RM)

Audit Services 35,000 376,000

Non-Audit Services 9,000 403,000

Total Fees 44,000 779,000

The non-audit services comprised the following assignments:-


(a) Attestation of non-financial reporting
(b) Review of regulatory reporting
(c) Review of quarterly and year end reporting packages
(d) Review of the Statement of Risk Management and Internal Control
(e) Tax compliance services

Risk Management and Internal Control

The Statement on Risk Management and Internal Control is set out from pages 69 to 74 of this Annual Report.

IV. Stakeholder Engagement

Digi’s Investor Relations function continued to strengthen the quality of corporate disclosures during the year to address the
increasing demand for more detailed and relevant information from the investment community. The solid teamwork between the
Investor Relations team and various functional leaders within Digi enabled timely, accurate, transparent, effective and relevant
communication of Digi’s business strategies, financial performance and current business initiatives to be made available for
Digi’s investors and stakeholders and where necessary, filed with regulators in accordance with applicable legal and regulatory
requirements.
Inspiring Your Digital Life Annual Report 2016 067

Statement on Corporate Governance

In 2016, Digi’s Investor Relations team continued its strategy of diversifying its shareholder base by targeting more emerging
market funds, long-term funds as well as prospective investors with exposure in industry peers. With that objective in mind, Digi
participated in 4 ASEAN or telecommunications themed conferences and 6 non-deal roadshows. In addition, Digi also augmented
its Investor Relations engagement efforts with analysts and investors by organising two Analyst Days to engage with local, regional
as well as Telenor Group’s analysts and fund managers on a regular basis.

Analyst Briefings

Digi’s Investor Relations team organised quarterly analyst briefings via conference calls on the same day it released its quarterly
earnings announcement. Prior to the quarterly analyst briefing, an earnings call briefing pack is emailed to relevant parties within
the investment community and is made available on Digi’s website immediately after the announcement is made to Bursa Malaysia
to ensure that investors and analysts are provided with comprehensive and equal access to the results announcements. The briefing
pack includes the financial statements to the exchange, management discussion and analysis report, earnings call presentation and
press release, which together provide information on Digi’s quarterly financial performance and financial position as well as non-
financial KPIs and other information deemed useful to the investment community.

Annual General Meeting (AGM)

Digi’s 19th AGM was held on 13 May 2016 in Kuala Lumpur, Malaysia. During the AGM, the Management presented a comprehensive
review of Digi’s financial performance for the year and outlined Digi’s prospects for the subsequent financial year. Sufficient time
was also set aside for shareholders’ and Minority Shareholder Watchdog Group (MSWG) to raise questions and provide feedback
to the Board and Management.

Moving forward, in line with the revised Paragraph 8.29A of the MMLR, all resolutions put to general meetings will be voted by

GOVERNANCE
poll. Arising thereon, Digi would conduct its AGM by poll/e-voting instead of voting by show of hands as practiced previously. An
independent scrutineer will be appointed to validate the votes cast at the AGM.

The outcomes of voting on the proposed resolutions will be disclosed to the market and posted on Digi’s website after the AGM.

Website

Digi’s website (www.digi.com.my) is a key communication channel for the Company to connect with its shareholders, the investment
community and the general public. Digi’s Investor Relations team regularly updates the Investor Relations section of the website to
ensure investor-related corporate disclosures, such as current information on Digi’s activities, quarterly financial results, corporate
presentations, annual reports, announcements to Bursa Malaysia as well as information on Digi’s business principles and Corporate
Governance framework, are up-to-date.

Share Register Analysis

Digi has a diversified shareholder base with 29,074 shareholders across the globe as at 31 December 2016, out of which 41.1%
(2015: 40.9%) are from Malaysia while foreign shareholding remained relatively steady at 9.9% (2015: 10.1%). A total of 98.0% of
Digi’s shares are held by institutional or corporate investors and the remaining 2.0% by private investors or individuals.

The Investor Relations team periodically analyses and monitors Digi’s shareholding structure including the breakdown of
shareholders by type, investment styles and geographical location, including shareholders’ buying and selling activities during the
year to facilitate investor targeting and planning of investor programmes.
068 Annual Report 2016 Digi.Com Berhad

Statement on Corporate Governance

Investor Conferences and Roadshows



Other than regular meetings, conference calls and site visits, Digi maintains a close connection with its institutional investors, fund
managers and analyst networks through investor conferences and non-deal road shows where Management meets with existing
and potential investors to provide updates on Digi’s strategic focus, recent performance and future prospects.

Venue Event Date Organiser


Bangkok Investor conference 9-10 Mar 2016 CLSA
London Investor conference 16 May 2016 Maybank
London and Edinburgh Non-deal road show 17-20 May 2016 UBS
Kuala Lumpur Non-deal road show 24 May 2016 RHB
Hong Kong Investor conference 6-8 Jun 2016 UBS
Non-deal road show
Kuala Lumpur Analyst day 22 July 2016 Digi
Singapore Non-deal road show 9 Sep 2016 Macquarie
Kuala Lumpur Non-deal road show 8 Nov 2016 CIMB
Singapore Investor conference 16-18 Nov 2016 Morgan Stanley
Non-deal road show
Kuala Lumpur Telenor - Asia Field Trip 29 Nov 2016 Telenor/Digi
Analyst day

In addition to the above, shareholders and investors can make inquiries about Investor Relations matters with Digi throughout the
year via Investor_Relations@digi.com.my.

Regular dialogues between Digi and the investment community has been instrumental to facilitate a clear, fair and holistic
appreciation on Digi’s performance, business strategies and prospects among research analysts, fund managers, investors and other
stakeholders.

The Investor Relations team provides regular updates to Management on feedback received from Investor Relations activities,
recommendations by analysts, commentary on share price information and changes to the holdings of substantial shareholders of
Digi.

The Board has deliberated, reviewed and approved the Statement on Corporate Governance on 13 March 2017.
Inspiring Your Digital Life Annual Report 2016 069

Statement on Risk Management


and Internal Control
In accordance with Paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities),
the Board of Directors of listed companies are required to include in their annual report, a “statement about the state of risk
management and internal control of the listed issuer as a group”. The revised Malaysian Code on Corporate Governance 2012 issued by
Securities Commission Malaysia requires the Board to establish a sound risk management framework and internal control system. Digi’s
Board of Directors (the Board) is pleased to provide the following statement that is prepared in accordance with the “Statement on Risk
Management and Internal Control: Guidelines for Directors of Listed Issuers” endorsed by Bursa Securities which outlines the nature
and scope of risk management and internal control within Digi during the financial year under review.

Responsibilities and Accountabilities

The Board acknowledges its responsibility for establishing and overseeing Digi’s risk management framework and internal control
systems. The risk management framework is designed to identify, assess and manage risks that may impede the achievement of business
objectives and strategies. The Board also acknowledges that the internal control systems are designed to manage and minimise, rather
than eliminate occurrences of material misstatement, financial loss or fraud.

The Board, through the Audit & Risk Committee (ARC), ensures that the risk management and internal control practices are adequately
implemented within Digi, and observes that measures are taken in areas identified for improvement, as part of Management’s continued
efforts to strengthen Digi’s risk management and internal control system.

Management is responsible for implementing Board-approved policies and procedures on risk management and internal controls
by identifying and evaluating risks faced and monitoring the achievement of business goals and objectives within the risk appetite
parameters.

Risk Management

GOVERNANCE
Digi has a Risk Management framework in place to identify, evaluate and manage significant risks that may affect the achievement of
Digi’s business objectives. An established structured process has been set-up for this purpose where significant risks are reviewed
and reported at the Risk Management Forum and ARC meetings on a regular basis. Continuous effort is being taken to enhance the
effectiveness of the risk management process.

The overall scope of risk management process encompasses, inter alia, strategic, financial, operational, network, information systems,
health, safety, security and environment (HSSE), employees and regulatory matters.
070 Annual Report 2016 Digi.Com Berhad

Statement on Risk Management and Internal Control

Risk management responsibilities are defined in the framework where the Board takes an oversight role while the Digi Management
Team (DMT) drives risk response and evaluates the organisation’s risk profile on a regular basis. The Risk Management team provides
support to facilitate risk identification, assessment, monitoring and reporting. Details of risk management responsibilities are depicted
in the diagram below:

Risk Management Responsibilities

Board of Directors and Audit Risk Committee Internal Audit


GOVERNANCE

• Approves Risk Management Framework and Policy • Assesses risk management processes
• Reviews Digi’s risk profile, ensures clear
accountabilities
• Determine Digi’s risk appetite and tolerance
• Monitors how Digi’s key risks are mitigated

Digi Management Team


DECISION-
MAKERS

• Assesses Digi’s risk profile


• Makes decisions and drives risk responses via Risk Management Forum
• Determines high priority risk responses
• Ensures risk management activities are coordinated and aligned to Digi’s objectives

Risk Management Team Risk Owners


OPERATIONAL

• Facilitate identification of new/upcoming risks • Manage risks


• Promotes best practices • Seek opportunities to improve action plans
• Supports risk owners • Develop capabilities, processes, and controls
• Consolidates Business Units’ risk profiles • Monitor performance
• Escalate risks for deliberation or reporting at Risk • Manage gaps/issues
Management Forum • Escalate significant risks

The risk management cycle is depicted in the process flow diagram.

Set/State
Identify Risks Analyse Risks Evaluate Risks Decide Actions
Objectives

Monitor Risk Picture, Follow Up and Report


Inspiring Your Digital Life Annual Report 2016 071

Statement on Risk Management and Internal Control

Control Environment and Structure

The following sets out the control environment and its key elements within Digi, which have been in place throughout the financial year,
and up to the date of the Directors’ Report:

Control Activities Authority


• Policies & Procedures • Organisation Structure
• Revenue Assurance • Board and Management
• Security Committees
• Controls over Financial • Assignment of Authority
Reporting
Control
Environment
& Structure

Monitoring Ethics &


• Board and Management Compliance
Committees • Code of Conduct
• Internal Audit Function

GOVERNANCE
• Legal and Compliance

1. Control Activities

• Policies and Procedures

Digi has documented policies and procedures designed to assist and guide operations to implement various requirements as
prescribed by law and/or considered best practices. This also ensures consistency in practice whilst providing guidance and
direction for proper management and governance of operations and business activities. These policies and procedures are
communicated company-wide and made available on the intranet for employees.

• Profitability Assurance

The Profitability Assurance function carried out by the Business Planning department firstly ensures that revenue leakage
is minimised by implementing adequate controls and processes through optimal revenue management framework. It covers
the cycle of identification, assessment, mitigation and monitoring. Digi has in place automated controls to ensure that usage
and profile integrity between the network, mediation, rating and billing is assured and adequately controlled. Key issues and
mitigation actions are reported to the DMT on a monthly basis. Processes and controls within the revenue cycle are reviewed
regularly to ensure its effectiveness and efficiency. In addition to assuring minimal revenue leakage, the Profitability Assurance
team also monitors site and store profitability, providing key feedback to optimise the management of Digi’s key assets.

• Security

The Security department is in charge of compliance investigations, fraud management, authority requests, information security
and physical security.
072 Annual Report 2016 Digi.Com Berhad

Statement on Risk Management and Internal Control

The Fraud Management function manages and mitigates the risk of relevant fraud and fraud losses. Some of the key activities
involve developing and designing internal fraud controls and these controls are regularly reviewed to ensure relevance and
effectiveness. Measures and continuous actions are taken to ensure telecommunication fraud is minimised and the requirement
for preventive controls are embedded into the business processes.

The Information Security and Physical Security functions are responsible for achieving and maintaining confidentiality, integrity
and availability of information, and information processing facilities, including telecommunication systems and infrastructure,
and to protect against cyber-crime, fraudulent activities, information loss and other security risks and threats.

• Controls over Financial Reporting

The Controls over Financial Reporting (CFR) function in the Accounting and Financial Reporting department plays an important
role in evaluating and improving effectiveness of key controls surrounding Digi’s financial reporting process. Its primary objective
is to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements. Review
on internal control over financial reporting is performed in accordance to Digi’s Internal Control over Financial Reporting
Framework, which requires assessment on significant accounts and processes based on materiality level, testing and evaluation
of the design and operational effectiveness of internal controls included in the scope. The function has a robust and continuous
monitoring routine to follow up on unaddressed risks and non-operating controls, including periodic reporting to DMT and the
ARC on status of controls on financial reporting processes.

2. Authority

• Organisation Structure

There is a defined organisational structure with clear lines of reporting and responsibility to ensure proper segregation of duties,
assignment of authority and accountability within Digi.

As part of Digi’s aim to drive end-to-end customer focus and delivery, and enable deeper collaboration and faster execution, the
Sales and Marketing divisions were consolidated in April 2016 and led by the Chief Marketing Officer.

Additionally, a new division, Digi-X, was formed in May 2016 which is responsible for building digitally adjacent businesses and
core competencies in the digital arena. This division is led by the Chief Digital Officer.

• Board and Management Committees

Board Committees have been set up to assist the Board to perform its oversight function, namely the ARC, Nomination
Committee, and Remuneration Committee. These Board Committees have been delegated specific responsibilities all of which
are governed by clearly defined terms of reference. The roles and responsibilities of the ARC are detailed in the Audit & Risk
Committee Report, whilst those of the other two committees are detailed in the Statement on Corporate Governance and the
NC Report.

Various Management Committees comprising key DMT members have been established to oversee the areas of business
operations assigned to them under their respective documented mandates. The Committees are:

• The Vendor and Investment Committee governs the approval process regarding material capital investments and operating
expenditure for Digi including the review and approval of the vendor evaluation criteria and vendor selection. The
Commercial Forum governs the decision-making process for commercial issues, and is managed by Marketing.

• The Regulatory Steering Committee provides direction and makes decisions on regulatory matters and/or related topics
that have a significant impact on Digi. The Risk Management Forum reviews and deliberates on the significant risks reported
across Digi and makes decisions on the coordinated action plans necessary to mitigate risks. The monthly Forum is chaired
by the CFO with DMT as members of the Forum.
Inspiring Your Digital Life Annual Report 2016 073

Statement on Risk Management and Internal Control

• Assignment of Authority

Digi has an established Delegation Authority Matrix (DAM) to provide a framework of authority and accountability. The DAM
outlines approval authority for strategic, capital and operational expenditure. The DAM is reviewed and approved by the Board
in line with changes in business needs.

3. Ethics and Compliance

• Code of Conduct

The Code of Conduct is a vital and integral part of Digi’s governance regime that defines the core principles and ethical standards
in conducting business and engagements with all key stakeholders, and compliance with the law and regulations. The Code of
Conduct applies to the members of the Board, employees and those acting on behalf of Digi. All employees are required to sign
and confirm that they have read, understood and will adhere to the Code of Conduct. Communication channels are established
through which concerns on non-adherence to the Code of Conduct can be safely reported.

• Legal and Compliance

The Legal department is mandated to manage and address Digi’s legal affairs and mitigate legal risks in the performance of its
daily business. It plays a key role in identifying, evaluating and formulating strategies on legal risks.

The Ethics & Compliance Officer supports the CEO and the Board in ensuring that:

GOVERNANCE
• The Code of Conduct reflects good business practices and relevant laws, regulations and widely recognised treaties.
• The Code of Conduct is implemented consistently and effectively through sharing of knowledge and measures for quality
assurance.
• Compliance incidents are consistently and effectively managed.

Reports on material breaches of the Code of Conduct are made to the ARC on a quarterly basis.

4. Monitoring

• Board and Management Committees

• DMT meetings are held on a weekly basis to identify, discuss, approve and resolve strategic, operational, financial and
key management issues pertaining to Digi’s day-to-day business. Significant changes in the business and the external
environment are reported by the DMT to the Board on an ongoing basis and/or during Board meetings.
• Digi’s performance management model provides a comprehensive review of business performance, which includes a review
of actual performance against targets.
• Quarterly financial results and other information are provided to the ARC to monitor and evaluate business performance.
• The ARC monitors significant internal and external audit issues to ensure they are promptly addressed and resolved.

• Internal Audit Function

The Internal Audit department assists both the Board and the ARC by conducting appropriate reviews of key business processes
to assess the adequacy and effectiveness of internal control and risk management, and compliance with regulations and Digi’s
policies and procedures. To ensure independence from Management, the Internal Audit department reports directly to the
ARC. The purpose, authority and responsibility of the Internal Audit department are reflected in the Internal Audit Charter,
which is reviewed and approved by the ARC annually.
074 Annual Report 2016 Digi.Com Berhad

Statement on Risk Management and Internal Control

Audit reviews are carried out on areas that are identified through a risk-based approach, in line with Digi’s objectives and
policies. Adjustments are made to the audit coverage as required, with any amendments to the Audit Plan being presented to
the ARC for approval.

The audit reports, including significant findings and recommendations for improvements, and management’s responses to the
recommendations, are highlighted to DMT and on a quarterly basis reported to the ARC. Status of actions taken by management
to address improvement areas highlighted are also monitored and followed up until closure. The Internal Audit’s activities and
practices conform with The Institute of Internal Auditor’s International Standards for the Professional Practice of Internal
Auditing.

Further information on the Internal Audit department’s activities is detailed in the Audit & Risk Committee Report on page 77
of this Annual Report.

Review of this Statement by External Auditors

The external auditors have performed limited assurance procedures on this Statement on Risk Management and Internal Control
pursuant to the scope set out in Recommended Practice Guide (RPG) 5 (Revised), Guidance for Auditors on Engagements to Report on
the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants
(MIA) for inclusion in the Annual Report of the Group for the year ended 31 December 2016, and reported to the Board that nothing
has come to their attention that cause them to believe the statement intended to be included in the Annual Report is not prepared, in all
material respects, in accordance with the disclosures required by paragraphs 41 and 42 of the Guidelines, nor is the Statement factually
inaccurate.

RPG 5 does not require external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control
covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal
control system including the assessment and opinion by the Directors and management thereon. The report from the external auditor
was made solely for, and directed solely to the Board of Directors in connection with their compliance with the listing requirements of
Bursa Malaysia Securities Berhad and for no other purposes or parties. The external auditors do not assume responsibility to any person
other than the Board of Directors in respect of any aspect of this report.

Conclusion

The Board is of the view that the risk management and internal control practices and processes in place for the year under review and up
to the date of this report are sound and sufficient to safeguard the shareholders’ investment, the interests of customers, regulators and
employees, and Digi’s assets, and have received the same assurance from both the CEO and CFO.
Inspiring Your Digital Life Annual Report 2016 075

Audit and Risk Committee Report

Composition and Meetings

The Audit & Risk Committee (ARC) has three members, all of whom are non-executive directors and a majority of whom are independent,
including the Chairman of the ARC. No alternate directors shall be a member of the ARC.

Ms Vimala A/P V.R. Menon is a Fellow of the Institute of Chartered Accountants in England and Wales, United Kingdom and a member
of the Malaysian Institute of Accountants. The ARC, therefore, meets the requirement of Paragraph 15.09(1)(c)(i) of the Main Market
Listing Requirements of Bursa Securities (MMLR), which stipulates that at least (1) member of the ARC must be a qualified accountant.

The Board of Directors (the Board) via the Nomination Committee (NC), reviews the terms of office and performance of the ARC and
each of its members annually through an annual Board Committee effectiveness evaluation exercise to determine whether the ARC and
its members have discharged their functions, duties and responsibilities in accordance to the Terms of Reference of the ARC.

The ARC held five (5) meetings during the financial year ended 31 December 2016. Details of the ARC members and the attendance of
each member at ARC meetings are as follows:

Name Designation Meetings attended

Tan Sri Saw Choo Boon Chairman, Independent Non-Executive Director 5/5

Tore Johnsen Member, Non-Independent Non-Executive Director 5/5

Vimala A/P V.R. Menon Member, Independent Non-Executive Director 5/5

GOVERNANCE
The CEO, CFO and Head of Internal Audit attended all meetings of the ARC to make known their views on any matter under consideration
by the ARC, or which, in their opinion, should be brought to the attention of the ARC. Relevant Management team members were invited
to attend the meetings to provide further information or details on matters that were discussed.

Deliberations during the ARC meetings, including the issues tabled and rationale adopted for decisions were properly recorded. Minutes
of the ARC meetings were tabled for confirmation at the following ARC meeting and subsequently presented to the Board for notation.
The ARC Chairman reported to the Board the significant matters discussed at each ARC meeting.

Summary of Work Performed

In early 2017, the Board through the NC assessed the effectiveness of the ARC performance for the financial year ended 31 December
2016 and was satisfied that it was operating in an effective manner.

Principal works performed by the ARC in 2016 were as follows:

Financial results

(a) Reviewed the unaudited quarterly financial results and audited annual financial statements of Digi before recommending them for
approval by the Board, including:
(i) Deliberation on significant audit and accounting matters highlighted, comprising management’s judgments, estimates or
assessments made and sufficiency of disclosures in the financial statements; and
(ii) Discussion of significant financial matters at length to ensure compliance with accounting standards and policies.
076 Annual Report 2016 Digi.Com Berhad

Audit and Risk Committee Report

Related Party Transactions

(a) Reviewed related party transactions and mandate for recurrent related party transactions to ensure compliance with MMLR and
Digi’s policies and procedures.

Risk Management and Internal Control

(a) Reviewed Digi’s quarterly risk profile and discussed key risks highlighted including mitigating actions.
(b) Evaluated the overall adequacy and effectiveness of the system of internal controls through review of the work performed by both
internal and external auditors and in discussions with the Management.

External Audit

(a) Reviewed the scope of work of the external auditors confirming their independence and objectivity.
(b) Reviewed external auditor’s Management Letter together with Management’s responses, in ensuring that appropriate actions have
been taken.
(c) Reviewed all non-audit services that were above 50% of the statutory audit fees for the financial year 2016 in which the external
auditors may be called upon to perform. The amount incurred by Digi and on group basis in respect of audit fees and non-audit
related fees for services rendered by the external auditors are disclosed in the Statement on Corporate Governance on page 66.
(d) Had private meetings with the external auditors on two (2) occasions to ensure there were no restrictions on the scope of their audit
and to discuss significant matters that arose during the course of audit.
(e) Evaluated the effectiveness of the external auditors and made recommendations to the Board on their re-appointment, subject to
the approval of Digi’s shareholders at the general meeting.

Internal Audit

(a) Reviewed and approved the proposed revisions to the Internal Audit Charter.
(b) Reviewed and approved the annual Audit Plan to ensure adequate scope and comprehensive coverage of Digi’s activities.
(c) Reviewed and deliberated on internal audit reports tabled during the year, the audit recommendations made and Management’s
response to these recommendations. Significant issues were discussed at length with the presence of relevant Management team
members to ensure satisfactory response to address identified risks.
(d) Monitored the implementation of mitigating actions by Management on outstanding issues on a quarterly basis to ensure that all key
risks and control weaknesses were properly and timely addressed.
(e) Had private meetings with the Head of Internal Audit for discussions on audit related matters and activities of the Internal Audit
Department without the presence of Management.
(f) Reviewed the Key Performance Indicators, performance, competency and resources of the Internal Audit functions to ensure that it
has the required expertise and professionalism to discharge its duties.

Compliance

(a) Reviewed and monitored the results and status of actions of internal misconduct cases in accordance to Digi’s Code of Conduct.
(b) Reviewed the results of the Anti-Corruption risk assessment exercise performed in 2016.

Other Matters

(a) Reviewed and recommended to the Board the ARC Report, Statement on Corporate Governance and Statement on Risk Management
and Internal Control for inclusion in the Annual Report.
(b) Reviewed and recommended the declaration of interim dividend to the Board.
Inspiring Your Digital Life Annual Report 2016 077

Audit and Risk Committee Report

Internal Audit Function

Internal Audit activities are carried out by the Internal Audit department led by the Head of Internal Audit who reports directly to the
ARC. The ARC determines the adequacy of the scope, functions, competency and resources of the Internal Audit department, which
comprises 7 members as at 31 December 2016 and ensures that it has the necessary authority to carry out its work. In 2016, the internal
auditors attended various internal and external training programmes, aimed at maintaining and enhancing the desired competency levels.

The Internal audit department provides independent and reasonable assurance, as well as advisory services designed to add value and
improve the operations of Digi. Its scope encompasses the examination and evaluation of the adequacy, integrity and effectiveness of
Digi’s overall system of internal control, risk management and governance. In order to maintain its independence and objectivity, the
Internal Audit department has no operational responsibility and authority over the activities it audits.

The Internal Audit department practices risk-based auditing, which provides the flexibility needed to address current risks as well as
potential future risks. This allows its resources and skills to be focused on ensuring alignment with business strategy and goals, thus
maintaining relevance and ability to drive continuous improvements within Digi. Reviews are carried out based on the approved Audit
Plan for 2016, which was developed using a risk-based approach and in line with Digi’s strategic ambitions. The Audit Plan was assessed
on a quarterly basis in alignment with the business and risk environment. Any deviations to the plan were reviewed and approved by the
ARC on a quarterly basis.

In 2016, the Internal Audit department executed a total of 18 audits, including ad-hoc requests. The audits conducted covered a wide
range of areas, which included amongst others, Procurement, Accounting and Financial activities, Asset Management, Network Delivery
and Marketing, aimed at providing assurance over the adequacy and effectiveness of controls within the processes reviewed.

GOVERNANCE
All audit findings were highlighted to relevant Management team members responsible for ensuring that corrective actions on
reported weaknesses are taken within the required timeframe. Audit reports were issued to the ARC, quarterly incorporating findings
and Management’s remediation actions. An established system has been put in place to ensure all actions agreed by Management are
followed up on and the status of implementation is reported to the ARC on quarterly basis.

The Internal Audit department complies with the Institute of Internal Auditors International Standards for the Professional Practice
of Internal Auditing and continues to maintain a quality assurance and improvement programme covering its internal audit processes,
which is subject to an annual internal assessment and an external assessment by a certified body once in 5 years.

The total costs incurred for the Internal Audit department for the financial year 2016 was RM1,494,905 (2015: RM1,250,680).

The ARC Report is made in accordance with the resolution of the Board dated 13 March 2017.

ARC Terms of Reference

The ARC Terms of Reference clearly set out the purpose, authority, composition and responsibilities of the ARC. The Terms of Reference
seek to ensure that ARC members are aware of their roles and duties and also serve as a clear source of reference to all stakeholders. In
order to ensure the continuous relevance of the Terms of Reference, the ARC conducts periodic review of the Terms of Reference when
necessary. The full Terms of Reference are available to the public on the Company website at digi.listedcompany.com/misc/factsheet.
078 Annual Report 2016 Digi.Com Berhad

Nomination Committee Report

The Nomination Committee (NC) was established on 27 February 2002 and comprises three (3) members who are exclusively Non-
Executive Directors, with the majority of them being Independent Directors.

The Board of Directors (the Board) takes note that the MCCG 2012 recommends that the Chairman of the NC should be a senior
independent director identified by the Board. The Board has decided that it is not necessary for Digi to appoint a senior independent
director as all the Independent Directors are well qualified and experienced. The Board will, from time to time, review the
recommendation and make the necessary appointment as and when it deems fit.

The composition of the NC is set out below:-

Name of Committee Member Appointment Date Designation

Yasmin Binti Aladad Khan 1 July 2015 Chairman, Independent Non-Executive Director

Tan Sri Saw Choo Boon 1 July 2015 Member, Independent Non-Executive Director

Lars-Ake Valdemar Norling 4 January 2016 Member, Non-Independent Non-Executive Director

During the year, the NC met once and all members of the Committee attended the meeting.

The Terms of Reference of the NC is accessible on Digi’s website at digi.listedcompany.com/misc/factsheet.

Nomination, Election and Selection of Directors

The NC is responsible to ensure that the procedures for appointing new Directors are transparent and rigorous. The Board composition
is reviewed to identify and close any gaps in the Board’s functional knowledge and competencies by bringing in new directors with the
required experience, knowledge and expertise to meet the current and future needs of the Company.

When a vacancy on the Board arises, the NC will meet to discuss the profile of the position to be filled. The NC will go through the
search process, including soliciting recommendations from existing Directors, major shareholder and/or engaging in external search
for candidates. The NC will then shortlist candidates and conduct interviews together with the other Directors. An invitation will be
extended to the selected candidate to join the Board and upon acceptance, the Board will approve the appointment and make the
necessary announcement to Bursa Malaysia Securities Berhad.

Any new Director appointed by the Board during the year is required to stand for re-election at the next AGM. Other than those
Directors appointed during the year, one-third of the remaining Directors are required to retire by rotation and all Directors must
submit themselves for re-election at AGM at least once in every three (3) years. The NC is responsible for assessing and recommending
to the Board the eligibility of retiring Directors for re-election.

Upon the Board endorsement, the retiring Director is then proposed for re-election at the AGM. The re-election of each Director is
voted as a separate resolution during Digi’s AGM.

Board and Board Committees Evaluation

The NC assesses the effectiveness of the Board, its Committees and the contribution of each Director with the aim of improving
individual contribution by identifying gaps, maximising strengths and addressing weaknesses of the Board. The evaluation includes
a review of the administration of the Board and its Committees covering their operations agendas, reports, information produced for
consideration and relationship with Management.

The Board Committees are assessed based on their roles and scope, frequency and length of meetings, supply of sufficient and timely
information to the Board and overall effectiveness and efficiency in discharging their function.
Inspiring Your Digital Life Annual Report 2016 079

Nomination Committee Report

Each Director undertakes a self-assessment of their individual performance during the financial year based on the criteria of integrity
and ethics, experience, knowledge, judgment and decision making, teamwork and character, leadership and competence, understanding
of role, and time commitment in discharging their respective roles as Directors of Digi.

The evaluation process is led by the NC Chairman and assisted by the Company Secretaries. The evaluation process is conducted via
questionnaires.

In the financial year 2016, the NC carried out the following activities:

• Reviewed NC terms of reference and Diversity Policy.


• Assessed and recommended the appointment of Ms Kristin Muri Moller in February 2016 to the Board.
• Conducted induction programme for newly appointed Director, Ms Kristin Muri Moller.
• Evaluated training needs of Directors and reviewed training programmes for Directors.
• Reviewed the results of the annual evaluations and areas for continuous improvement were recommended to the Board.
• Conducted a review of the term of office and performance of the Audit & Risk Committee and its members, and was satisfied with
their performance.
• Reviewed and recommended re-election of Directors who were due for retirement by rotation.

During the meeting held on 7 March 2017, the NC reviewed and assessed the mix of skills, knowledge, expertise and experience,
professionalism, integrity, competencies, time commitment, composition, size and experience of the Board, including the core
competencies of the Directors, the contribution of each individual Director, the independence of the Independent Directors, Board
diversity in terms of gender and age, the effectiveness of the Board and the Board Committees, as well as the retirement of Directors
eligible for re-election. The NC had also assessed the training needs by Directors and recommended the appropriate training list for

GOVERNANCE
Directors to the Board.

CEO and CFO Evaluation

The NC had evaluated the performance of the CEO and CFO for the year under review and concluded that they possess the desired
character, experience and competency and have demonstrated their time commitment and integrity in discharging their duties and
responsibilities.

The Board has deliberated, reviewed and approved the Nomination Committee Report on 13 March 2017.
080 Annual Report 2016 Digi.Com Berhad

Additional Compliance Information

Other Disclosures

The following information is provided in accordance with Paragraph 9.25 of Main Market Listing Requirements of Bursa Securities as
set out in Appendix 9C thereto.

1. Non-Audit Fees

During the financial year, the amount incurred by Digi and the Group with respect to audit fees and non-audit related fees paid
to external auditors for the financial year ended 31 December 2016 are disclosed in the Statement on Corporate Governance on
page 66.

2. Material Contracts Involving Directors’ and Major Shareholders’ Interests

There were no material contract by Digi and/or its subsidiaries involving Directors’ and major shareholders’ interests either
subsisting as at 31 December 2016 or entered into since the end of the previous financial year.

3. Recurrent Related Party Transaction of a Revenue or Trading Nature

At the Annual General Meeting held on 13 May 2016, Digi obtained a shareholders’ mandate to allow the Group to enter into
recurrent related party transactions of a revenue or trading nature.

The disclosure of the recurrent related party transactions conducted during the financial year ended 31 December 2016 are set out
on page 145 of the Annual Report.
Inspiring Your Digital Life Annual Report 2016 081
082 Annual Report 2016 Digi.Com Berhad

Directors’ Report

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company
for the financial year ended 31 December 2016.

Principal activities

The principal activity of the Company is investment holding.

The principal activities and other information relating to subsidiaries are disclosed in Note 13 to the financial statements.



Results

Group Company
RM’000 RM’000

Profit for the year, attributable to owners of the parent 1,632,658 1,632,797

There were no material transfers to or from reserves or provisions during the financial year, other than as disclosed in the financial
statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not
substantially affected by any item, transaction or event of a material and unusual nature.

Dividends

The dividends paid by the Company since the end of the previous financial year were as follows:

RM’000

In respect of the financial year ended 31 December 2015:



- Fourth interim tax exempt (single-tier) dividend of 4.9 sen per ordinary share,
declared on 5 February 2016 and paid on 25 March 2016 380,975

In respect of the financial year ended 31 December 2016:

- First interim tax exempt (single-tier) dividend of 5.1 sen per ordinary share,
declared on 22 April 2016 and paid on 24 June 2016 396,525

- Second interim tax exempt (single-tier) dividend of 5.4 sen per ordinary share,
declared on 11 July 2016 and paid on 30 September 2016 419,850

- Third interim tax exempt (single-tier) dividend of 5.6 sen per ordinary share,
declared on 19 October 2016 and paid on 30 December 2016 435,400

The Board of Directors had on 23 January 2017, declared a fourth interim tax exempt (single-tier) dividend of 4.8 sen per ordinary
share in respect of the financial year ended 31 December 2016 amounting to RM373,200,000. The financial statements for the current
financial year do not reflect this fourth interim dividend. Such dividend, will be accounted for in equity as an appropriation of retained
earnings in the financial year ending 31 December 2017.

Inspiring Your Digital Life Annual Report 2016 083

Directors’ Report

Directors

The names of the directors of the Company in office since the beginning of the financial year to the date of this report are:

Tan Sri Saw Choo Boon
Morten Karlsen Sorby
Tore Johnsen
Yasmin Binti Aladad Khan
Vimala A/P V.R. Menon
Lars-Ake Valdemar Norling
Kristin Muri Moller

The names of the directors of the subsidiaries of the Company since the beginning of the financial year to the date of this report, not
including those directors listed above are:

Karl Erik Broten
Albern A/L Murty
Eugene Teh Yee (Appointed on 31 May 2016)
Praveen Rajan A/L Nadarajan (Appointed on 31 May 2016)

Directors’ benefits

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a
party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Company or any other body
corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included
in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 7 to the financial statements)
by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member,
or with a company in which the director has a substantial financial interest.

Directors’ interest

According to the register of directors’ shareholdings, the interest of directors in office at the end of the financial year in the shares of the
Company or its related corporations during the financial year were as follows:

Number of ordinary shares of NOK6 each

financialS
1 January 2016/
date of 31 December
appointment Acquired Sold 2016

Ultimate holding company


Telenor ASA

Direct interest:
- Morten Karlsen Sorby 81,080 2,385 - 83,465
- Tore Johnsen 39,306 - - 39,306
- Lars-Ake Valdemar Norling 26,903 3,932 - 30,835
- Kristin Muri Moller 17,857 810 - 18,667

Indirect interest:
- Morten Karlsen Sorby * 682 - - 682

* Deemed interest through shares held by his spouse pursuant to Section 59(11)(c) of the Companies Act 2016.

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations
during the financial year.

084 Annual Report 2016 Digi.Com Berhad

Directors’ Report

Other statutory information



(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made
out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for
doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been
made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary
course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the allowance for doubtful debts, in the financial statements of the
Group and of the Company, inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the
existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial
statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) As at the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures
the liabilities of any other person; or

(ii) any material contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months
after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations
as and when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year
and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company
for the financial year in which this report is made.

Subsequent events

Details of events occurring after the reporting date are disclosed in Note 32 to the financial statements.

Auditors and auditors’ remuneration

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Auditors’ remuneration are disclosed in Note 7 to the financial statements.

Signed on behalf of the Board in accordance with a resolution of the directors dated 13 March 2017.


Tan Sri Saw Choo Boon Morten Karlsen Sorby
Director Director
Inspiring Your Digital Life Annual Report 2016 085

Statement by Directors
Pursuant to Section 251(2) of the Companies Act 2016

We, Tan Sri Saw Choo Boon and Morten Karlsen Sorby, being two of the directors of Digi.Com Berhad, do hereby state that, in the opinion
of the directors, the accompanying financial statements set out on pages 91 to 140 are drawn up in accordance with Malaysian Financial
Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as
to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2016 and of their financial
performance and cash flows for the financial year then ended.

The information set out in Note 34 on page 141 to the financial statements have been prepared in accordance with the Guidance on
Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia
Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors dated 13 March 2017.


Tan Sri Saw Choo Boon Morten Karlsen Sorby
Director Director

Statutory Declaration
Pursuant to Section 251(1)(b) of the Companies Act 2016

I, Karl Erik Broten, being the officer primarily responsible for the financial management of Digi.Com Berhad, do solemnly and sincerely
declare that the accompanying financial statements set out on pages 91 to 141 are in my opinion correct, and I make this solemn
declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

financialS


Subscribed and solemnly declared by
the above-named Karl Erik Broten at
Kuala Lumpur in Wilayah Persekutuan
on 13 March 2017 Karl Erik Broten


Before me,

Commissioner for Oaths


Kuala Lumpur
086 Annual Report 2016 Digi.Com Berhad

Independent Auditors’ Report


to the members of Digi.Com Berhad (Incorporated in Malaysia)

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Digi.Com Berhad, which comprise the statements of financial position as at 31 December
2016 of the Group and of the Company, and statements of comprehensive income, statements of changes in equity and statements
of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, as set out on pages 91 to 140.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company
as at 31 December 2016 and of their financial performance and their cash flows for the year then ended in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in
Malaysia.

Basis for opinion



We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our
responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.

Independence and other ethical responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice)
of the Malaysian Institute of Accountants (By-Laws) and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the
IESBA Code.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the Group and of the Company for the current year. These matters were addressed in the context of our audit of the financial
statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our
report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to
our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.
Inspiring Your Digital Life Annual Report 2016 087

Independent Auditors’ Report


to the members of Digi.Com Berhad (Incorporated in Malaysia)

Key Risk Our audit response

Accuracy of revenue recognition

Refer to Note 2 (r) (i)– Revenue Recognition (Telecommunication


Revenue), and Note 5 – Revenue

The Group relies on complex information technology system Our audit sought to place a high level of reliance on the Group’s
(including the rating module within the billing system) in information technology systems and key controls which the
accounting for its telecommunication revenue. Such information management rely in recording telecommunication revenue,
system processes large volumes of data with a combination where we:
of different products, which consist of individually low value
transactions. (a) involved our information technology specialists to test the
  operating effectiveness of automated controls over the
In addition, significant estimates and judgements are involved billing system, including the rating module. We also tested
in: the accuracy of the data interface between the billing
system and the general ledger; and
(a) accounting for unbilled revenue at the reporting date; and
(b) tested the non-automated controls in place to ensure
(b) allocating the transaction price between the multiple accuracy of revenue recognised, including timely updating
products sold in bundled transactions. of approved rate changes in the billing system.

The above factors gave rise to higher risk of material Our substantive procedures, included amongst others, the
misstatement in the timing and amount of telecommunication following:
revenue recognised. Accordingly, we identified revenue
recognition to be an area of focus. (a) testing the reconciliation between the billing system and
the general ledger, including validating material manual
journals processed; and

(b) evaluating management’s estimate of unbilled revenue by


comparing such amount to the billings raised subsequent
to the reporting period.

financialS
In respect of the allocation of transaction price between
multiple products sold in bundled transactions, we performed
the following:

(a) Obtained an understanding of the management’s basis of


allocation and assessed whether such allocation basis is
consistent with those used in the industry;

(b) Evaluated management’s estimate of standalone selling


prices used in allocating the transaction price; and

(c) Tested the computation of revenue to be recognised in


respect of each product sold in bundled transactions.
088 Annual Report 2016 Digi.Com Berhad

Independent Auditors’ Report


to the members of Digi.Com Berhad (Incorporated in Malaysia)

Information other than the financial statements and auditors’ report thereon

The directors of the Company are responsible for the other information. The other information comprises the information in the annual
report but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express
any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group
and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the financial statements

The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give
a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors
determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s and the
Company’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 the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic
alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements



Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing
in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:

(a) Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.

(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal
control.

Inspiring Your Digital Life Annual Report 2016 089

Independent Auditors’ Report


to the members of Digi.Com Berhad (Incorporated in Malaysia)

Auditor’s responsibilities for the audit of the financial statements (cont’d)

We also (cont’d):

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the directors.

(d) Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or
the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going
concern.

(e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including
the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and
events in a manner that achieves fair presentation.

(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial
statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters in
our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be

financialS
expected to outweigh the public interest benefits of such communication.

Other reporting responsibilities



The supplementary information set out in Note 34 on page 141 is disclosed to meet the requirement of Bursa Malaysia Securities
Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information
in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of
Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants
(MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all
material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.


090 Annual Report 2016 Digi.Com Berhad

Independent Auditors’ Report


to the members of Digi.Com Berhad (Incorporated in Malaysia)

Other matters

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in
Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.






Ernst & Young Chong Tse Heng
AF: 0039 No. 3179/05/17(J)
Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia
13 March 2017

Inspiring Your Digital Life Annual Report 2016 091

Statements of Comprehensive Income


For the financial year ended 31 December 2016

Group Company
Note 2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Revenue 5 6,597,102 6,913,984 1,632,500 1,888,750

Other income 18,556 25,881 1,472 1,559

Cost of materials and traffic expenses (1,640,585) (2,034,062) - -

Sales and marketing expenses (572,482) (578,820) - -

Operations and maintenance expenses (111,517) (103,793) - -

Rental expenses (355,181) (260,608) - -

Staff expenses (254,917) (262,036) - -

Depreciation expenses 11 (520,211) (512,226) - -

Amortisation expenses 12 (130,970) (129,517) - -

Impairment reversal on property,


plant and equipment 11 - 13,869 - -

Other expenses (726,069) (718,204) (1,379) (1,726)

Finance costs 6 (78,078) (56,232) - -

Interest income 12,536 10,509 265 284

Profit before tax 7 2,238,184 2,308,745 1,632,858 1,888,867

financialS
Taxation 8 (605,526) (586,195) (61) (59)

Profit for the year, representing total


comprehensive income for the year 1,632,658 1,722,550 1,632,797 1,888,808

Attributable to:
Owners of the parent 1,632,658 1,722,550 1,632,797 1,888,808


Group
Note 2016 2015

Earnings per share attributable to owners of the parent


(sen per share) 9 21.0 22.2

The accompanying accounting policies and explanatory information form an integral part of the financial statements.
092 Annual Report 2016 Digi.Com Berhad

Statements of Financial Position


As at 31 December 2016

Group Company
Note 2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Non-current assets
Property, plant and equipment 11 2,832,265 2,643,214 - -
Intangible assets 12 453,777 516,684 - -
Investments in subsidiaries 13 - - 772,751 772,751
Other investment 14 100 - - -
Other receivable 16 62,572 82,005 - -
3,348,714 3,241,903 772,751 772,751

Current assets
Inventories 15 47,822 116,794 - -
Trade and other receivables 16 1,707,679 921,924 5 9
Derivative financial instruments 17 4,034 - - -
Tax recoverable 13,121 148,140 - -
Cash and short-term deposits 18 376,588 233,557 940 925
2,149,244 1,420,415 945 934
Total assets 5,497,958 4,662,318 773,696 773,685

Non-current liabilities
Loans and borrowings 19 1,798,837 25,376 - -
Deferred tax liabilities 20 311,285 325,030 - -
Other liabilities 21 40,034 35,283 - -
2,150,156 385,689 - -

Current liabilities
Trade and other payables 22 1,947,851 2,056,176 945 981
Derivative financial instruments 17 - 118 - -
Other liabilities 21 397,621 432,418 - -
Loans and borrowings 19 483,036 1,268,531 - -
Tax payable 24 24 24 24
2,828,532 3,757,267 969 1,005
Total liabilities 4,978,688 4,142,956 969 1,005

Equity
Share capital 23 77,750 77,750 77,750 77,750
Reserves 441,520 441,612 694,977 694,930
Total equity 519,270 519,362 772,727 772,680
Total equity and liabilities 5,497,958 4,662,318 773,696 773,685

The accompanying accounting policies and explanatory information form an integral part of the financial statements.
Inspiring Your Digital Life Annual Report 2016 093

Statements of Changes in Equity


For the financial year ended 31 December 2016

Attributable to owners of the parent


Non- Non-
distributable distributable
Share share accumulated
Note capital premium losses Total
RM’000 RM’000 RM’000 RM’000

Group

At 1 January 2015 77,750 691,905 (83,518) 686,137

Total comprehensive income - - 1,722,550 1,722,550
Transaction with owners:
Dividends on ordinary shares 10 - - (1,889,325) (1,889,325)

At 31 December 2015/
1 January 2016 77,750 691,905 (250,293) 1 519,362
Total comprehensive income - - 1,632,658 1,632,658
Transaction with owners:
Dividends on ordinary shares 10 - - (1,632,750) (1,632,750)
At 31 December 2016 77,750 691,905 (250,385) 1 519,270


Note: 1 In the prior years, as part of the Group’s capital management initiatives, the Company received dividends in specie from its
subsidiary, Digi Telecommunications Sdn Bhd (DTSB), in the form of bonus issue of redeemable preference shares and capital
repayment by DTSB amounting to RM509.0 million and RM495.0 million respectively. The Company has declared part of these
as special dividend to its shareholders. The deficit arose from the elimination of these intra-group dividends at Group level.

financialS
094 Annual Report 2016 Digi.Com Berhad

Statements of Changes in Equity


For the financial year ended 31 December 2016

Attributable to owners of the parent


Non-
distributable Distributable
Share share retained
Note capital premium earnings Total
RM’000 RM’000 RM’000 RM’000
(Note 25)

Company

At 1 January 2015 77,750 691,905 3,542 773,197

Total comprehensive income - - 1,888,808 1,888,808
Transaction with owners:
Dividends on ordinary shares 10 - - (1,889,325) (1,889,325)

At 31 December 2015/
1 January 2016 77,750 691,905 3,025 772,680
Total comprehensive income - - 1,632,797 1,632,797
Transaction with owners:
Dividends on ordinary shares 10 - - (1,632,750) (1,632,750)
At 31 December 2016
77,750 691,905 3,072 772,727

The accompanying accounting policies and explanatory information form an integral part of the financial statements.
Inspiring Your Digital Life Annual Report 2016 095

Statements of Cash Flows


For the financial year ended 31 December 2016

Group Company
Note 2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000


Cash flows from operating activities

Profit before tax 2,238,184 2,308,745 1,632,858 1,888,867
Adjustments for:
Amortisation of intangible assets 12 130,970 129,517 - -
Allowance for impairment on trade receivables 16(a) 50,704 42,407 - -
Provision for inventories written down - 2,289 - -
Dividend income - - (1,632,500) (1,888,750)
Depreciation of property, plant and equipment 11 520,211 512,226 - -
Impairment reversal on property, plant and equipment 11 - (13,869) - -
Finance costs 6 78,078 56,232 - -
Gain on disposal of property, plant and equipment (345) (311) - -
Loss on disposal of intangible asset - computer software 1,052 - - -
Reversal of provision for site decommissioning
and restoration costs 21(a) (340) - - -
Property, plant and equipment written off - 62 - -
Interest income (12,536) (10,509) (265) (284)
Provision for employee leave entitlements 21(a) 1,352 1,536 - -
Employee benefits
- share-based payment 398 1,628 - -
- defined benefit plan 24 80 80 - -
Fair value (gain)/loss on derivative
financial instruments (4,152) 384 - -
Unrealised foreign exchange loss/(gain) 2,526 (12,526) - -
Operating cash flows before working capital changes 3,006,182 3,017,891 93 (167)

Decrease/(increase) in inventories 68,972 (54,541) - -
(Increase)/decrease in trade and other receivables (917,910) (306,954) 4 1

financialS
(Decrease)/increase in trade and other payables (119,254) 218,652 (36) 229
(Decrease)/increase in deferred revenue (36,149) 14,601 - -
Cash generated from operations 2,001,841 2,889,649 61 63
Advance payment for bandwidth - (83,125) - -
Interest paid (85,602) (56,392) - -
Proceeds from government grants 100,576 75,859 - -
Payments for provisions (244) (177) - -
Taxes paid (484,252) (600,752) (61) (63)
Net cash generated from operating activities 1,532,319 2,225,062 - -

096 Annual Report 2016 Digi.Com Berhad

Statements of Cash Flows


For the financial year ended 31 December 2016

Group Company
Note 2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Cash flows from investing activities



Purchase of property, plant and equipment
and intangible assets (775,684) (896,535) - -
Purchase of unquoted investment (100) - - -
Dividends received from a subsidiary 5 - - 1,632,500 1,888,750
Interest received 12,438 10,681 265 284
Proceeds from disposal of property, plant
and equipment 405 315 - -
Proceeds from disposal of intangible asset 1,481 - - -
Proceeds from disposal of short-term investment 28 - - -
Net cash (used in)/generated from investing activities (761,432) (885,539) 1,632,765 1,889,034

Cash flows from financing activities

Repayment of loans and borrowings (1,010,000) (746,000) - -
Repayment of obligations under finance lease (8,808) (7,739) - -
Drawdown of loans and borrowings 2,025,000 1,000,000 - -
Dividends paid 10 (1,632,750) (1,889,325) (1,632,750) (1,889,325)
Net cash used in financing activities (626,558) (1,643,064) (1,632,750) (1,889,325)

Net increase/(decrease) in cash and cash equivalents 144,329 (303,541) 15 (291)
Effect of exchange rate changes on cash and cash equivalents (1,298) 10,820 - -
Cash and cash equivalents at beginning of financial year 233,557 526,278 925 1,216
Cash and cash equivalents at end of financial year 18 376,588 233,557 940 925

The accompanying accounting policies and explanatory information form an integral part of the financial statements.
Inspiring Your Digital Life Annual Report 2016 097

Notes to the Financial Statements


31 December 2016

1. Corporate information

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa
Malaysia Securities Berhad (Bursa Securities). The principal place of business is located at Lot 10, Jalan Delima 1/1, Subang Hi-Tech
Industrial Park, 40000 Subang Jaya, Selangor Darul Ehsan. The registered office of the Company is located at Lot 6.05, Level 6,
KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan.

The immediate and ultimate holding companies are Telenor Asia Pte Ltd and Telenor ASA, incorporated in Singapore and Norway
respectively. The ultimate holding company is listed on the Oslo Stock Exchange, Norway.

The principal activity of the Company is investment holding, whilst the principal activities of the subsidiaries are stated in Note 13.

Related companies refer to companies within the Telenor Asia Pte Ltd and Telenor ASA group of companies.

There has been no significant change in the nature of the principal activities during the financial year.


2. Significant accounting policies

(a) Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial
Reporting Standards (MFRS), International Financial Reporting Standards (IFRS) and the requirements of the Companies
Act, 1965 in Malaysia. At the beginning of the current financial year, the Group and the Company adopted new and amended
MFRSs which are mandatory for annual financial periods beginning on or after 1 January 2016 as described fully in Note 3(a).

The financial statements of the Group and of the Company have been prepared on the historical cost convention unless
otherwise indicated in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM’000)
except when otherwise indicated.

(b) Basis of consolidation

financialS
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the
reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements
are prepared for the same reporting date as the Company. Consistent accounting policies are applied for like transactions and
events in similar circumstances.

The Company controls an investee if, and only if, the Company has all the following:

(i) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

(ii) Exposure, or rights, to variable returns from its investment with the investee; and

(iii) The ability to use its power over the investee to affect its returns.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the Company loses
control of the subsidiary. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-
group transactions are eliminated in full.

Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit balance.
098 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)

(b) Basis of consolidation (cont’d)



Business combinations

Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling
interests in the acquiree. The Group elects on a transaction-by-transaction basis whether to measure the non-controlling
interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Transaction
costs incurred are expensed and included in administrative expenses.

(c) Investment in subsidiaries

In the Company’s separate financial statements, investment in subsidiaries are accounted for at cost less impairment losses.
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in
profit or loss.

(d) Property, plant and equipment, and depreciation

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment
is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably.

Subsequent to recognition, property, plant and equipment, except for freehold land and capital work-in-progress, are
measured at cost less accumulated depreciation and accumulated impairment losses, if any. The cost of an item includes
expenditure that is attributable to the acquisition of the item. Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the
item will flow to the Group and the cost of the item can be measured reliably. When significant parts of property, plant and
equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful
lives and depreciation, respectively. The carrying amount of the replaced part is then derecognised. Likewise, when a major
inspection is performed, its cost is recognised in the carrying amount of the asset as a replacement if the recognition criteria
are satisfied. All other repair and maintenance costs are recognised in profit and loss as incurred.

Freehold land has an unlimited useful life and is therefore not depreciated. Capital work-in-progress representing assets
under construction, is also not depreciated as these assets are not yet available for its intended use. Depreciation of other
property, plant and equipment is computed on a straight-line basis to write down the cost of each asset to its residual value
over the estimated useful life, at the following annual rates or periods:

Freehold buildings 2.0%
Leasehold land and buildings 30 to 99 years
Motor vehicles 20.0%
Computer systems 20.0% - 33.3%
Furniture and fittings 20.0%
Telecommunications network 3.3% - 33.3%


The residual values, useful lives and depreciation method are reviewed at each financial year end, and adjusted prospectively,
if appropriate, to ensure that the amount, method and period of depreciation are consistent with the expected pattern of
consumption of the future economic benefits embodied in the items of property, plant and equipment.

Inspiring Your Digital Life Annual Report 2016 099

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)



(d) Property, plant and equipment, and depreciation (cont’d)

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising from the difference between the net disposal proceeds, if any, and the net
carrying amount is recognised in profit and loss in the year the asset is derecognised.

(e) Intangible assets

Intangible assets acquired separately are initially measured at cost. Following initial recognition, intangible assets are
measured at cost less accumulated amortisation and accumulated impairment losses, if any. The useful lives of intangible
assets are assessed to be either finite or indefinite.

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are
reviewed at least during each financial year end. Changes in the expected useful life or the expected pattern of consumption
of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as
appropriate, and are treated prospectively as changes in accounting estimates. The amortisation expense on intangible
assets with finite lives is recognised in profit and loss.

Intangible assets not yet available for use are tested for impairment annually, or more frequently if events and circumstances
indicate that the carrying value may be impaired either individually or at the cash generating unit (CGU) level. Such intangible
assets are not amortised.

Any gain or loss arising from derecognition of an intangible asset is measured as the difference between the net disposal
proceeds and the carrying amount of the asset, and is recognised in profit and loss when the asset is derecognised.

(i) 3G spectrum

Expenditure for the acquisition of the 3G spectrum are capitalised under intangible assets. The amount is amortised

financialS
using the straight-line method over the shorter of the asset’s estimated useful life or remaining spectrum period up to
1 April 2018.

(ii) Computer software

Costs incurred to acquire computer software, that are not an integral part of the related hardware, are capitalised as
intangible assets and amortised on a straight-line basis over the estimated useful life of five years.

(iii) License fee

License fees are capitalised and amortised over the period of the licenses. The license fees had been fully-amortised in
the financial year ended 31 December 2009.
100 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)



(f) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is any indication of
impairment. If any such indication exists, impairment is measured by comparing the carrying amounts of the assets with their
recoverable amounts.

For intangible assets not yet available for use, the recoverable amount is estimated at the end of each reporting period, or
more frequently if events and circumstances indicate that the carrying value may be impaired either individually or at the
cash generating unit (CGU) level.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows, namely a
CGU.

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its
recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the
carrying amount of any goodwill allocated to those units or groups of units, if any and then, to reduce the carrying amount of
the other assets in the unit or groups of units on a pro-rata basis.

An impairment is recognised whenever the carrying amount of an asset or CGU exceeds its recoverable amount, and the
impairment loss is recognised as an expense in profit and loss in the period in which it arises.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed if, and only if there
has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised
previously. Such reversal is recognised in profit or loss.

(g) Inventories

Inventories are stated at lower of cost and net realisable value. Cost is determined using the weighted average basis. The cost
of trading merchandise comprises costs of purchases and other incidental costs incurred in bringing these merchandise to
their present condition and location.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to
make the sale.

(h) Financial assets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company
become a party to the contractual provisions of the financial instrument.

Financial assets are recognised initially at fair value plus, in the case of financial assets not at fair value through profit or loss,
directly attributable transaction costs.

Inspiring Your Digital Life Annual Report 2016 101

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)



(h) Financial assets (cont’d)

The Group and the Company determine the classification of financial assets at initial recognition and classify their financial
assets in the following categories - at fair value through profit or loss, loans and receivables and available-for-sale financial
assets, as appropriate. The Group and the Company do not have any financial assets that are held-to-maturity investments.

(i) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading purposes or are designated as
such upon initial recognition. A financial asset is classified in this category if acquired principally for the purpose of
selling in the short-term. Derivatives are also categorised as held for trading unless they are designated as effective
hedging instruments.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains
or losses arising from changes in fair value are recognised in profit or loss.

Derivatives embedded in host contracts, if any, are accounted for as separate derivatives when their risks and
characteristics are not closely related to those of the host contacts and the host contracts are not carried at fair value.
These embedded derivatives are measured at fair value with any gain or loss arising from changes in fair value being
recognised in profit and loss. Reassessment only occurs if there is a change in the terms of the contract that significantly
modifies the cash flows that would otherwise be required.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. The Group’s and the Company’s loan and receivables comprise receivables and cash and short-term
deposits. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective
interest rate method. Gains and losses are recognised in profit and loss when the loans and receivables are derecognised
or impaired, as well as through the amortisation process.

(iii) Available-for-sale financial assets

financialS
Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified as
financial assets at fair value through profit or loss or loans and receivables.

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes
in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses,
foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method
are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is
reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest
income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale
equity instrument are recognised in profit or loss when the Group’s and the Company’s rights to receive payment is
established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment
loss, if any.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12
months after the reporting date.
102 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)



(h) Financial assets (cont’d)

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition
of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and
any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

All normal purchases and sales of financial assets are recognised or derecognised on the trade date i.e. the date that the
Group and the Company commit to purchase or sell the asset. Normal purchases or sales are purchases or sales of financial
assets that require delivery of assets within the period generally established by regulation or convention in the market place
concerned.

(i) Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is
impaired.

(i) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the
Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the
debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables,
assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis
based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables include the Group’s
past experience of collecting debts, and reduced collection rates for specific ageing buckets.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows discounted at the financial asset’s original effective
interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the
exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When
a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to
an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the
extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of
reversal is recognised in profit or loss.

(ii) Available-for-sale financial assets (unquoted equity securities carried at cost)

If there is objective evidence (such as significant adverse changes in the business environment where the issuer
operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial
assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows discounted at the current market rate of return
for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

Inspiring Your Digital Life Annual Report 2016 103

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)



(j) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and at banks and licensed banks deposits with a maturity of three months
or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
These also include bank overdrafts, if any, that form an integral part of the Group’s cash management.

(k) Provision for liabilities

Provisions for liabilities are recognised when the Group has a present obligation as a result of a past event and it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of
the amount can be made.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable
that an outflow of economic resources will be required to settle the obligation, the provision is reversed. Where the effect of
the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate,
the risks specific to the liability to the present value of the expenditure expected to be required to settle the obligation. When
discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(i) Employee leave entitlements

Employees’ entitlement to annual leave are recognised when the associated services performed by employees increase
their entitlements to annual leave. A provision is made for the estimated liability for the annual leave as a result of
services rendered by employees up to the end of the reporting period netted off against annual leave utilised to date.

(ii) Site decommissioning and restoration costs

Provision for site decommissioning and restoration costs is in respect of management’s best estimate on the costs
necessary to be incurred to decommission the Group’s telecommunications network infrastructure and restore the
previously occupied sites.

The estimated amount is determined after taking into consideration the time value of money, and the initial estimated
sum is capitalised as part of the cost of property, plant and equipment. Where discounting is used, the increase in the

financialS
provision due to the passage of time is recognised as a finance cost.

(iii) Defined benefit plan

Provision for defined benefit plan for eligible employees is as disclosed in Note 2(o)(iii).

(l) Financial liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit or loss, or other financial liabilities, as
appropriate in the statements of financial position, according to the substance of the contractual arrangements entered into
and the definitions of a financial liability. Management determines the classification of financial liabilities of the Group and of
the Company upon initial recognition.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognised in profit or loss.

104 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)

(l) Financial liabilities (cont’d)

Financial assets and financial liabilities are offset and the net amount reported in the statements of financial position if, and
only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net
basis, or to realise the assets and settle the liabilities simultaneously.

(i) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading purposes and financial
liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading purposes if they are acquired for the purpose of selling in the near
term. This category includes derivative financial instruments entered into by the Group that do not meet the hedge
accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with
any resultant gains or losses recognised in profit or loss.

(ii) Other financial liabilities

The Group’s other financial liabilities include trade and other payables, and loans and borrowings.

Trade and other payables are initially measured at fair value plus directly attributable transaction costs, and are
subsequently measured at amortised cost, using the effective interest rate method.

Loans and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the
effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or
redemption of borrowings is recognised in profit and loss over the period of the borrowings using the effective interest
rate method.

Borrowing costs are recognised in profit and loss as an expense in the period in which they are incurred.

Borrowing costs consist of interest and other costs that the Group incurred in connection with the borrowing of funds.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and
through the amortisation process.

(m) Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after
deducting all of its liabilities. Ordinary shares are equity instruments.

The attributable incremental transaction costs of an equity transaction are accounted for as a deduction from equity, net of
tax. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they
are declared.

Inspiring Your Digital Life Annual Report 2016 105

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)



(n) Leases

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the
risks and rewards incidental to ownership to the Group is classified as a finance lease.

Finance leases are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present
value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are
apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on
the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged
as expenses in the period in which they are incurred. All other leases where a significant portion of risks and rewards of
ownership are retained by the lessor are classified as operating leases.

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the
Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life
and the lease term.

Operating lease payments, net of any incentives received from the lessor, are recognised as an expense in profit and loss
on a straight-line basis over the lease term. When an operating lease is terminated before the lease period has expired, any
payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination
takes place.

(o) Employee benefits

(i) Short-term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the period in which the
associated services are rendered by employees. Short-term accumulated compensated absences such as paid annual
leave are recognised when services are rendered by employees that increase their entitlement to future compensated
absences netted off against annual leave utilised to date, and short-term non-accumulating compensated absences
such as sick leave are recognised when the absences occur. Where payment or settlement is deferred and the effect of
the time value of money is material, these amounts are discounted to their present value.

financialS
(ii) Defined contribution plan

As required by law, companies in Malaysia make contributions to the state-defined contribution pension scheme known
as the Employee Provident Fund, and will have no legal or constructive obligation to make further contributions in the
future, over-and-above what is existingly legally required. The contributions are recognised as an expense in profit and
loss in the period which the related services are rendered by employees.

(iii) Defined benefit plan

The Group operates an unfunded defined benefit plan for its eligible employees. The benefits are calculated based on
the length of service and the agreed percentages of eligible employees’ salaries over the period of their employment
and are payable upon resignation after completion of the minimum employment period of ten years or upon retirement
age of fifty five years. The Group’s obligations under the retirement benefit scheme, calculated using the Projected Unit
Credit Method, is determined based on actuarial computations by independent actuaries, through which the amount of
benefit that employees have earned in return for their service in the current and prior years is estimated. That benefit
is discounted in order to determine its present value.
106 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)

(o) Employee benefits (cont’d)

(iii) Defined benefit plan (cont’d)



Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other
comprehensive income in the period in which they occur and recorded in defined benefit reserve. Remeasurements are
not reclassified to profit and loss in subsequent periods.

Past service costs are recognised in profit and loss on the earlier of:

- The date of the plan amendment or curtailment; or
- The date that the Group recognises restructuring related costs.

Net interest and other expenses relating to defined benefit plans are calculated by applying the discount rate to the net
defined benefit liability or asset and recognised in profit and loss.

The Group amended the defined benefit plan effective 1 January 2006 to restrict new entrants into the plan, and the
benefits payable to be calculated based on the employees’ length of service up to 31 December 2005.

(iv) Share-based payment

The Group operates a scheme to award its eligible employees with the Company’s shares. The eligible employees,
who have served for more than ten years, are entitled to a certain number of shares which are directly acquired under
the employees’ names in the open market. The maximum entitlement of this benefit is capped to a certain amount as
determined by the Group. The transactions are recorded as share-based cash-settled transactions, and the expense
recognised under this scheme is determined by-way of reference to the number of employees qualifying for the
scheme, the number of shares entitled and the market price of the shares; the total of which is capped at the maximum
entitlement during the financial year. This scheme has been discontinued during the financial year.

(p) Income taxes

Income tax recognised for the year comprises of current and deferred tax.

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted
by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit
or loss, either in other comprehensive income or directly in equity.

(ii) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Inspiring Your Digital Life Annual Report 2016 107

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)



(p) Income taxes (cont’d)

(ii) Deferred tax (cont’d)

Deferred tax liabilities are recognised for all taxable temporary differences, and deferred tax assets are recognised for
all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is
probable that taxable profit will be available against which the deductible temporary differences, and the carry forward
of unused tax credits and unused tax losses can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the
reporting date.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation
authority.

(q) Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised in the financial statements.

(r) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable for the sales of goods and services in the
ordinary course of the Group’s business activities, net of discounts and indirect taxes. The Group recognises revenue when it
is probable that the economic benefits associated with the transaction will flow to the Group and the amount of the revenue
can be measured reliably. The following specific recognition criteria must also be met before revenue is recognised:

(i) Telecommunication revenue

financialS

Revenue relating to provision of telecommunications and related services are recognised net of rebates and discounts
upon the transfer of risks and rewards when goods are delivered and services are performed. Revenue from services that
have been sold to customers but where services have not been rendered at the reporting date is deferred.

(ii) Sales of device

Revenue from sale of device is recognised when significant risks and rewards of ownership of the device have been
passed to the customer, usually on delivery and acceptance of the device.

(iii) Interest income

Interest income is recognised on a time-proportion basis that reflects the effective yield on the asset.

(iv) Dividend income

Dividend income is recognised when the Group’s and the Company’s right to receive payment is established.

108 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)



(s) Government grants

As a universal service provider (USP), the Group is entitled to claim certain qualified expenses from the Malaysian
Communications and Multimedia Commission (MCMC) in relation to USP projects. These claims are treated as government
grants and recognised at their fair values where there is reasonable assurance that the grants will be received and the Group
will comply with all the attached conditions.

A grant relating to the asset is recognised as income over the life of the depreciable asset by way of a reduced depreciation
charge. Grant relating to income is recognised in profit and loss by crediting directly against the related expense.

(t) Foreign currency transactions

(i) Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic
environment in which the entity operates (the functional currency). The consolidated financial statements of the Group
are presented in RM, which is also the functional currency of all entities in the Group.

(ii) Foreign currency transactions

Transactions in foreign currencies are initially converted into RM at exchange rates prevailing at the date of transaction.
At each reporting date, foreign currency monetary items are translated into RM at exchange rates prevailing at that
date. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated
using the historical rate as of the date of acquisition.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date
are recognised in profit or loss. Exchange differences arising on the translation of non-monetary items carried at fair
value are included in profit or loss for the period except for the differences arising on the translation of non-monetary
items in respect of which gains and losses are recognised directly in other comprehensive income. Exchange differences
arising from such non-monetary items are also recognised directly in other comprehensive income.

(u) Fair value measurement

The Group measures financial instruments, such as, derivatives at fair value at each reporting date. Also, fair values of financial
instruments measured at amortised cost are disclosed in Note 29(f).

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:

(i) In the principal market for the asset or liability; or

(ii) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in
its highest and best use.

Inspiring Your Digital Life Annual Report 2016 109

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)

(u) Fair value measurement (cont’d)



The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a
whole:

(i) Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

(ii) Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable

(iii) Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines
whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

(v) Current versus non-current classification

The Group presents assets and liabilities in statements of financial position based on current/non-current classification. An
asset is current when it is:

- Expected to be realised or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realised within twelve months after the reporting period; or

financialS
- Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.

All other assets are classified as non-current. A liability is current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period; or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.

The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets
and liabilities.
110 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

2. Significant accounting policies (cont’d)



(w) Segment reporting

The Group provides mobile communication services and related products to customers across the country and its services
and products essentially have similar risk profile. Business activities of the Group are not organised by product or geographical
components and its operating result is reviewed as a whole by its management. Accordingly, there is no separate segment, as
disclosed in Note 31.

3. Changes in accounting policies

(a) Adoption of new and revised MFRSs



The accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 January 2016, the Group and the Company adopted the following new and amended MFRSs mandatory for annual
financial periods beginning on or after 1 January 2016.

Effective for
annual periods
beginning
Description on or after

Annual Improvements to MFRSs 2012–2014 Cycle 1 January 2016


Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of
Depreciation and Amortisation 1 January 2016
Amendments to MFRS 116 and MFRS 141: Agriculture: Bearer Plants 1 January 2016
Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016
Amendments to MFRS 127: Equity Method in Separate Financial Statements 1 January 2016
Amendments to MFRS 101: Disclosure Initiatives 1 January 2016
Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities: Applying the
Consolidation Exception 1 January 2016
MFRS 14: Regulatory Deferral Accounts 1 January 2016

The adoption of the above standards did not have any significant effect on the financial statements of the Group and of the
Company.

(b) Standards issued but not yet effective

The standards and interpretation that are issued but not yet effective up to the date of issuance of the Group’s and the
Company’s financial statements are disclosed below. The Group and the Company intend to adopt these standards, if
applicable, when they become effective.

Effective for
annual periods
beginning
Description on or after

Annual Improvements to MFRSs 2014 - 2016 Cycle 1 January 2017


Amendments to MFRS 107: Disclosure Initiative 1 January 2017
Amendments to MFRS 112: Recognition of Deferred Tax Assets for Unrealised Losses 1 January 2017
Amendments to MFRS 12: Disclosure of Interests in Other Entities 1 January 2017
MFRS 15: Revenue from Contracts with Customers 1 January 2018
Inspiring Your Digital Life Annual Report 2016 111

Notes to the Financial Statements


31 December 2016

3. Changes in accounting policies (cont’d)



(b) Standards issued but not yet effective (cont’d)


The standards and interpretation that are issued but not yet effective up to the date of issuance of the Group’s and the
Company’s financial statements are disclosed below. The Group and the Company intend to adopt these standards, if
applicable, when they become effective. (cont’d)
Effective for
annual periods
beginning
Description on or after

MFRS 9: Financial Instruments 1 January 2018


Annual Improvements to MFRS 2014–2016 Cycle 1 January 2018
Amendments to MFRS 2: Classification and Measurement of Share-based Payment Transactions 1 January 2018
Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts 1 January 2018
Amendments to MFRS 140: Transfers of Investment Property 1 January 2018
IC Interpretation 22: Foreign Currency Transactions and Advance Consideration 1 January 2018
MFRS 16: Leases 1 January 2019
Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture Deferred

The directors expect that the adoption of the above standards and interpretation will have no material impact on the financial
statements in the period of initial application except as discussed below:

MFRS 15 Revenue from contracts with customers

MFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers. MFRS 15 will
supersede the current revenue recognition guidance including MFRS 118: Revenue, MFRS 111: Construction Contracts and
the related interpretations when it becomes effective.

The core principle of MFRS 15 is that an entity should recognise revenue which depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services.

financialS
Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when “control” of the
goods or services underlying the particular performance obligation is transferred to the customer.

Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2018 with
early adoption permitted. The directors anticipate that the application of MFRS 15 will have an impact on the amounts
reported and disclosures made in the Group’s financial statements. The Group is currently assessing the impact of MFRS 15
and plans to adopt the new standard on the required effective date.

MFRS 9 Financial instruments

In November 2014, MASB issued the final version of MFRS 9: Financial Instruments which reflects all phases of the financial
instruments project and replaces MFRS 139: Financial Instruments: Recognition and Measurement and all previous versions
of MFRS 9. The standard introduces new requirements for classification and measurement, impairment and hedge accounting.
MFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted.

Retrospective application is required, but comparative information is not compulsory. The adoption of MFRS 9 will have
an effect on the classification and measurement of the Group’s financial assets, but no impact on the classification and
measurement of the Group’s financial liabilities.
112 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

3. Changes in accounting policies (cont’d)



(b) Standards issued but not yet effective (cont’d)

MFRS 16 Leases

MFRS 16 will replace MFRS 117: Leases, IC Interpretation 4: Determining whether an Arrangement contains a Lease, IC
Interpretation 115: Operating Lease-Incentives and IC Interpretation 127: Evaluating the Substance of Transactions Involving
the Legal Form of a Lease. MFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure
of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for
finance leases under MFRS 117.

At the commencement date of a lease, a lessee will recognise a liability to make lease payments and an asset representing the
right to use the underlying asset during the lease term. Lessees will be required to recognise interest expense on the lease
liability and the depreciation expense on the right-of-use asset.

Lessor accounting under MFRS 16 is substantially the same as the accounting under MFRS 117. Lessors will continue to
classify all leases using the same classification principle as in MFRS 117 and distinguish between two types of leases: operating
and finance leases.

MFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted but not before an
entity applies MFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective
approach. The Group is assessing the potential effect of MFRS 16 and plans to adopt the new standard on the required
effective date.


4. Significant accounting estimates and judgements and key sources of estimation uncertainty

There were no significant judgements made in applying the accounting policies of the Group which may have significant effects on
the amounts recognised in the financial statements.

Management makes key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year.

The following represents a summary of the critical accounting estimates and the associated key sources of estimation uncertainty.

(a) Useful lives of property, plant and equipment and intangible assets

Depreciation and amortisation are based on management’s estimates of the future estimated useful lives and residual
values of property, plant and equipment and intangible assets. Estimates may change due to technological developments,
modernisation initiatives, expected level of usage, competition, market conditions and other factors, which could potentially
impact the average useful lives and the residual values of these assets. This may result in future changes in the estimated
useful lives and in the depreciation or amortisation expenses. A 5.0% difference in the expected useful lives of these assets
from management’s estimates would result in approximately 1.8% (2015: 1.6%) variance in the Group’s profit for the year.
The carrying amounts of property, plant and equipment and intangible assets at the reporting date are disclosed in Note 11
and Note 12 respectively.

Inspiring Your Digital Life Annual Report 2016 113

Notes to the Financial Statements


31 December 2016

4. Significant accounting estimates and judgements and key sources of estimation uncertainty (cont’d)

(b) Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To
determine whether there is objective evidence of impairment, the Group considers factors such as the probability of
insolvency or significant financial difficulties of the debtor and default or significant reduction in collection rates.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on
historical loss experience for assets with similar credit risk characteristics. The carrying amounts of the Group’s trade and
other receivables at the reporting date are disclosed in Note 16. If the present value of estimated future cash flows varies by
5.0% from management’s estimates, the Group’s allowance for impairment will cause either a 0.1% (2015: 0.1%) increase or
0.2% (2015: 0.2%) decrease respectively in the Group’s profit for the year.

(c) Deferred tax

Deferred tax implications arising from the changes in corporate income tax rates are measured with reference to the
estimated realisation and settlement of temporary differences in the future periods in which the tax rates are expected to
apply, based on the tax rates enacted or substantively enacted at the reporting date. While management’s estimates on the
realisation and settlement of temporary differences are based on the available information at the reporting date; changes in
business strategy, future operating performance and other factors could potentially impact on the actual timing and amount
of temporary differences realised and settled. Any difference between the actual amount and the estimated amount would
be recognised in profit and loss in the period in which actual realisation and settlement occurs. The carrying amount of
deferred tax liabilities is disclosed in Note 20.

(d) Income taxes

Significant estimation is involved in determining the Group’s provision for income taxes as there are certain transactions and
computations for which the final tax determination is uncertain at the reporting date.

Where the final tax outcome of these matters are different from the amounts that were initially recognised, such differences
will impact the income tax and deferred tax provisions in the period in which such determination is made.

(e) Provisions for liabilities

financialS

Provision for site decommissioning and restoration costs are provided based on the present value of the estimated future
expenditure to be incurred for dismantling the inactive sites. Significant management assumption and estimation are required
in determining the discount rate, the estimated life cycle and the expenditure to be incurred for dismantling each network
infrastructure sites. Where expectations differ from the original estimates, the differences will impact the carrying amount
of provision for site decommissioning and restoration costs. The carrying amount of provision for site decommissioning and
restoration costs at the reporting date is disclosed in Note 21.

114 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

5. Revenue

Group Company
2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Telecommunication revenue 6,326,687 6,411,725 - -


Sales of device 270,415 502,259 - -
Dividend income from a subsidiary - - 1,632,500 1,888,750
6,597,102 6,913,984 1,632,500 1,888,750


6. Finance costs

Group
2016 2015
RM’000 RM’000

Interest expense on:


- Loans and borrowings 74,457 51,542
- Obligations under finance lease 2,602 3,366
- Others 1,019 1,324
78,078 56,232


7. Profit before tax

Profit before tax is derived after deducting/(crediting):

Group Company
Note 2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Allowance for impairment on trade receivables 16(a) 50,704 42,407 - -


Auditors’ remuneration:
- statutory audit 376 338 35 30
- other services* 403 1,579 9 8
Non-executive directors’ remuneration:
- fees 752 621 75 63
- other emoluments 5 5 - -
Employee benefits:
- wages and salaries 181,578 188,751 - -
- defined contribution plan 31,505 29,124 - -
- defined benefit plan 24 80 80 - -
- share-based payment 398 1,628 - -
- other staff related expenses 40,004 40,917 - -
Lease of transmission facilities 156,860 151,447 - -
Reversal of provision for site decommissioning
and restoration costs 21(a) (340) - - -

Inspiring Your Digital Life Annual Report 2016 115

Notes to the Financial Statements


31 December 2016

7. Profit before tax (cont’d)



Profit before tax is derived after deducting/(crediting) (cont’d):

Group Company
Note 2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Provision for employee leave entitlements 21(a) 1,352 1,536 - -


Provision for inventories written down - 2,289 - -
Rental of land and buildings 337,927 241,827 - -
Realised foreign exchange loss 7,142 38,262 - -
Unrealised foreign exchange loss/(gain) 2,526 (12,526) - -
Fair value (gain)/loss on derivative financial instruments (4,152) 384 - -
Mark-to-market loss on derivative financial instruments 492 - - -
Gain on disposal of property, plant and equipment (345) (311) - -
Loss on disposal of intangible asset - computer software 1,052 - - -
Property, plant and equipment written off - 62 - -
Bad debts recovered** (17,034) (11,538) - -
Waiver of debt - - (1,472) (1,559)
Interest income from fixed deposits (12,536) (10,509) (265) (284)

* Fees for other services were incurred in connection with performance of agreed upon procedures, regulatory compliance
reporting, tax and advisory services paid or payable to member firms of Ernst & Young Global Limited.

** Included in other income is bad debts recovered of RM17.0 million (2015: RM11.5 million).

The number of directors of the Company whose total remuneration during the financial year which falls within the following band
is analysed below:

Number of directors
2016 2015

financialS
Non-executive directors:
- Nil 4 5
- Below RM100,000 - 1
- RM100,001 - RM200,000 - 1
- RM200,001 - RM300,000 3 2

116 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

8. Taxation

Major components of income tax expense

The major components of income tax expense for the financial years ended 31 December 2016 and 2015 are:

Group Company
2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Statements of comprehensive income:


Income tax:
- Current tax expense 562,812 519,558 64 73
- Under/(over) accrual in prior years 56,459 5,032 (3) (14)
Total income tax 619,271 524,590 61 59

Deferred taxation (Note 20):
- Relating to origination and reversal of temporary
differences (8,397) 67,004 - -
- Over accrual in prior years (5,348) (5,399) - -
Total deferred tax (13,745) 61,605 - -

Income tax expense recognised in profit or loss 605,526 586,195 61 59

Reconciliations of income tax expense/rate applicable to profit before tax at the statutory income tax rate to income tax expense/
rate at the effective income tax rate of the Group and of the Company are as follows:

2016 2015
% RM’000 % RM’000

Group

Profit before tax 2,238,184 2,308,745
Taxation at Malaysian statutory tax rate 24.0 537,164 25.0 577,186
Effect of changes in statutory tax rate - - (0.6) (13,542)
Effect of expenses not deductible for tax purposes 1.0 17,251 1.0 22,918
Under accrual of income tax expense in prior years 2.5 56,459 0.2 5,032
Over accrual of deferred tax expense in prior years (0.2) (5,348) (0.2) (5,399)
Effective tax rate/income tax expense recognised in profit or loss 27.3 605,526 25.4 586,195

Company

Profit before tax 1,632,858 1,888,867
Taxation at Malaysian statutory tax rate 24.0 391,886 25.0 472,217
Income not subject to tax (24.0) (391,822) (25.0) (472,144)
Over accrual of income tax expense in prior year (0.0) (3) (0.0) (14)
Effective tax rate/income tax expense recognised in profit or loss 0.0 61 0.0 59

Inspiring Your Digital Life Annual Report 2016 117

Notes to the Financial Statements


31 December 2016

8. Taxation (cont’d)

Domestic current income tax is calculated at the Malaysian statutory tax rate of 24% (2015: 25%) of the estimated taxable profit
for the year.

With effect from 1 January 2016, the tax rate of the Group and the Company has been reduced from 25% to 24% due to the
change in the Malaysian statutory tax rate that was announced in the 2014 Budget.


9. Earnings per ordinary share

Earnings per ordinary share is calculated by dividing profit for the year, net of tax, attributable to owners of the parent by the
weighted average number of ordinary shares in issue during the financial year.

Group
2016 2015

Profit attributable to owners of the parent (RM’000) 1,632,658 1,722,550



Weighted average number of ordinary shares in issue (’000) 7,775,000 7,775,000

Basic earnings per share (sen) 21.0 22.2

No diluted earnings per ordinary share was presented as the Group does not have any convertible instrument, options, warrants
and their equivalents.


10. Dividends

Group/Company
2016 2015
RM’000 RM’000

Recognised during the financial year:



Dividends on ordinary shares:

financialS
- Fourth interim tax exempt (single-tier) dividend (2015: 4.9 sen; 2014: 7.2 sen) 380,975 559,800
- First interim tax exempt (single-tier) dividend (2016: 5.1 sen; 2015: 6.1 sen) 396,525 474,275
- Second interim tax exempt (single-tier) dividend (2016: 5.4 sen; 2015: 5.9 sen) 419,850 458,725
- Third interim tax exempt (single-tier) dividend (2016: 5.6 sen; 2015: 5.1 sen) 435,400 396,525
1,632,750 1,889,325

Interim dividend declared subsequent to the reporting date
(not recognised as a liability as at 31 December):

Dividends on ordinary shares:
- Fourth interim tax exempt (single-tier) dividend (2016: 4.8 sen; 2015: 4.9 sen) 373,200 380,975

The Board of Directors had on 23 January 2017, declared a fourth interim tax exempt (single-tier) dividend of 4.8 sen per ordinary
share in respect of the financial year ended 31 December 2016 amounting to RM373,200,000. The financial statements for the
current financial year do not reflect this fourth interim dividend. Such dividend, will be accounted for in equity as an appropriation
of retained earnings in the financial year ending 31 December 2017.
118 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

11. Property, plant and equipment



Long- Short- Long- Short- Tele-
term term term term Furniture communi- Capital
Freehold leasehold leasehold Freehold leasehold leasehold Motor Computer and cations work-in-
land land land buildings buildings buildings vehicles systems fittings network progress Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost
At 1 January
2016 29,638 7,312 7,565 128,015 7,365 6,866 26,529 428,017 167,788 4,336,251 255,948 5,401,294
Additions - - - - - - 2,835 - 1,913 26,617 677,957 709,322
Disposals - - - - - - (3,097) (1,737) (164) (3) - (5,001)
Write offs - - - - - - - (149,781) (8,743) (14,093) - (172,617)
Transfers - - - 15,280 - - - 16,231 33,928 580,428 (645,867) -

At 31
December
2016 29,638 7,312 7,565 143,295 7,365 6,866 26,267 292,730 194,722 4,929,200 288,038 5,932,998

Accumulated
depreciation
At 1 January
2016: - 1,378 2,827 18,919 678 2,942 16,615 344,007 133,534 2,237,180 - 2,758,080

Depreciation
expenses
for the
year - 61 128 2,471 67 108 3,037 29,825 20,393 464,121 - 520,211
Disposals - - - - - - (3,039) (1,735) (164) (3) - (4,941)
Write offs - - - - - - - (149,781) (8,743) (14,093) - (172,617)

At 31
December
2016 - 1,439 2,955 21,390 745 3,050 16,613 222,316 145,020 2,687,205 - 3,100,733

Carrying
Amount

At 31
December
2016 29,638 5,873 4,610 121,905 6,620 3,816 9,654 70,414 49,702 2,241,995 288,038 2,832,265


Inspiring Your Digital Life Annual Report 2016 119

Notes to the Financial Statements


31 December 2016

11. Property, plant and equipment (cont’d)



Long- Short- Long- Short- Tele-
term term term term Furniture communi- Capital
Freehold leasehold leasehold Freehold leasehold leasehold Motor Computer and cations work-in-
Group land land land buildings buildings buildings vehicles systems fittings network progress Total
(cont’d) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost
At 1 January
2015 29,638 7,502 7,578 138,740 7,365 6,866 21,302 409,613 174,037 3,669,753 328,586 4,800,980
Additions - - - - - - 7,456 - 1,856 65,735 684,478 759,525
Disposals - - - - - - (2,229) (1,583) (203) - - (4,015)
Write offs - (190) (13) (10,725) - - - (7,988) (25,697) (110,521) (62) (155,196)
Transfers - - - - - - - 27,975 17,795 711,284 (757,054) -

At 31 December
2015 29,638 7,312 7,565 128,015 7,365 6,866 26,529 428,017 167,788 4,336,251 255,948 5,401,294

Accumulated
depreciation
and
impairment
losses
At 1 January
2015:
Accumulated
depreciation - 1,340 2,703 18,196 611 2,834 16,078 319,693 138,959 1,904,585 - 2,404,999
Accumulated
impairment losses - - - - - - - - 398 13,471 - 13,869

- 1,340 2,703 18,196 611 2,834 16,078 319,693 139,357 1,918,056 - 2,418,868

Depreciation
expenses
for the year - 228 137 11,448 67 108 2,766 33,882 20,474 443,116 - 512,226
Reversal of
impairment
loss - - - - - - - - (398) (13,471) - (13,869)
Disposals - - - - - - (2,229) (1,580) (202) - - (4,011)
Write offs - (190) (13) (10,725) - - - (7,988) (25,697) (110,521) - (155,134)

financialS
At 31 December
2015 - 1,378 2,827 18,919 678 2,942 16,615 344,007 133,534 2,237,180 - 2,758,080

Analysed as:
Accumulated
depreciation - 1,378 2,827 18,919 678 2,942 16,615 344,007 133,534 2,237,180 - 2,758,080

- 1,378 2,827 18,919 678 2,942 16,615 344,007 133,534 2,237,180 - 2,758,080

Carrying Amount

At 31 December
2015 29,638 5,934 4,738 109,096 6,687 3,924 9,914 84,010 34,254 2,099,071 255,948 2,643,214

(a) The Group acquired property, plant and equipment with an aggregate cost of RM709.3 million (2015: RM759.5 million)
of which RM4.2 million (2015: RM7.1 million) relates to the provision for site decommissioning and restoration costs, as
disclosed in Note 21.

(b) Government grants of RM119.2 million (2015: RM93.8 million) relating to additions to property, plant and equipment, were
deducted before arriving at the cost of qualifying property, plant and equipment during the financial year ended 31 December
2016.

120 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

12. Intangible assets



3G Computer
spectrum software Licenses Total
RM’000 RM’000 RM’000 RM’000

Group

Cost

At 1 January 2016 695,066 854,351 1,300 1,550,717
Additions - 70,596 - 70,596
Disposals - (2,533) - (2,533)
Write offs - (340,543) - (340,543)
At 31 December 2016 695,066 581,871 1,300 1,278,237

Accumulated amortisation

At 1 January 2016 524,458 508,275 1,300 1,034,033
Amortisation expenses for the year 75,825 55,145 - 130,970
Write offs - (340,543) - (340,543)
At 31 December 2016 600,283 222,877 1,300 824,460

Carrying amount

At 31 December 2016 94,783 358,994 - 453,777

Cost

At 1 January 2015 695,066 711,562 1,300 1,407,928


Additions - 144,117 - 144,117
Write offs - (1,328) - (1,328)
At 31 December 2015 695,066 854,351 1,300 1,550,717

Accumulated amortisation

At 1 January 2015 448,632 455,912 1,300 905,844
Amortisation expenses for the year 75,826 53,691 - 129,517
Write offs - (1,328) - (1,328)
At 31 December 2015 524,458 508,275 1,300 1,034,033

Carrying amount

At 31 December 2015 170,608 346,076 - 516,684

Included in the cost of computer software is capital work-in-progress of RM116.3 million (2015: RM83.0 million).

Inspiring Your Digital Life Annual Report 2016 121

Notes to the Financial Statements


31 December 2016

13. Investments in subsidiaries



Company
2016 2015
RM’000 RM’000

Unquoted shares at cost 772,751 772,751



Details of the subsidiaries, which are incorporated in Malaysia, are as follows:

Name of company Percentage of ownership Principal activities
interest held by the Group
2016 2015
(%) (%)

- Digi Telecommunications 100 100 Establishment, maintenance and provision of


Sdn Bhd (DTSB) telecommunications and related services

- Y3llownation Sdn Bhd 100 100 Dormant
(formerly known as
Pay By Mobile Sdn Bhd)

Subsidiaries of DTSB:

- Digi Services Sdn Bhd 100 100 Dormant

- Y3llowLabs Sdn Bhd 100 100 Dormant
(formerly known as
Djuice.Com Sdn Bhd)

14. Other investment


financialS
Group
2016 2015
RM’000 RM’000

Non-current

Available-for-sale financial asset:
- Unquoted shares at cost 100 -

During the financial year, the Group’s wholly owned subsidiary, Y3llownation Sdn Bhd (YN) (formerly known as Pay By Mobile Sdn
Bhd), had subscribed to equity interest of approximate 8% in Localusher Sdn Bhd (LocalUsher), an entity incorporated in Malaysia.
LocalUsher is engaged in operating an online booking platform for leisure trips and activities.

The investment was made in relation to a programme initiated by the Group for equity funding new digital start-ups in
Malaysia.

122 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

15. Inventories

Group
2016 2015
RM’000 RM’000

Merchandise:
- At cost 45,174 111,456
- At net realisable value 2,648 5,338
47,822 116,794

During the financial year, the amount of inventories recognised as an expense in cost of materials of the Group was RM379.1 million
(2015: RM639.1 million).


16. Trade and other receivables

Group Company
2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Non-current

Prepayments 62,572 82,005 - -

Current

Trade receivables 371,156 349,386 - -
Other receivables 436,797 221,139 5 4
Deposits 171,423 150,096 - -
Prepayments 741,680 212,421 - 5
1,721,056 933,042 5 9
Allowance for impairment on trade receivables (13,377) (11,118) - -
1,707,679 921,924 5 9
Total trade and other receivables 1,770,251 1,003,929 5 9

The Group’s trade receivables are non-interest bearing, and are subject to normal trade credit terms ranging from 30 to 45 days
(2015: 30 to 45 days). They are recognised at their original invoice amounts which represent their fair value on initial recognition.

Included in non-current and current prepayments are advances to a network facility provider (NFP) of RM83.4 million (2015:
RM98.0 million) to provide connectivity services for a period of 10 years.

Included in current prepayment is an upfront payment made to Malaysian Communications and Multimedia Commission (MCMC)
amounting to RM598.5 million for Spectrum Assignment allocated to the Group. The Spectrum Assignment will be effective on 1
July 2017 for a tenure of 15 years.
Inspiring Your Digital Life Annual Report 2016 123

Notes to the Financial Statements


31 December 2016

16. Trade and other receivables (cont’d)



(a) Trade receivables

As at 31 December, the ageing analysis of trade receivables net of allowance for impairment and bad debts written off, is as
follows:

Group
2016 2015
RM’000 RM’000

Trade receivables:
- Neither past due nor impaired 287,835 262,198
- 1 to 30 days past due not impaired 35,107 39,102
- 31 to 60 days past due not impaired 17,235 9,075
- 61 to 90 days past due not impaired 3,210 4,891
- 91 to 180 days past due not impaired 6,485 9,959
- More than 181 days past due not impaired 7,907 13,043
357,779 338,268

Trade receivables that are neither past due nor impaired, representing 80% (2015: 78%) of the Group’s total net trade
receivables, are creditworthy debtors with good payment records with the Group. None of the Group’s trade receivables
that are neither past due nor impaired have been renegotiated during the financial year.

At the reporting date, 20% (2015: 22%) of the Group’s trade receivables were past due but not impaired. These relate mostly
to corporate customers with slower repayment patterns, for whom there is no history of default.


The movements of the Group’s allowance for impairment on trade receivables are as follows:

Individually Collectively
Note impaired impaired Total
RM’000 RM’000 RM’000

financialS
At 1 January 2015 - 11,855 11,855
Charge for the year 7 42,407 - 42,407
Write offs (42,407) (737) (43,144)
At 31 December 2015/ 1 January 2016 - 11,118 11,118
Charge for the year 7 48,445 2,259 50,704
Write offs (48,445) - (48,445)
At 31 December 2016 - 13,377 13,377

The Group’s trade receivables that are individually determined to be impaired at the reporting date relate to debtors that have
defaulted on payments in excess of two months. These receivables are not secured by any collateral or credit enhancements.

As at 31 December 2016, Group’s trade receivables with an initial carrying value of RM19,012,000 (2015: RM20,143,000)
were impaired and provided for allowance for impairment amounting to RM13,377,000 (2015: RM11,118,000).

124 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

16. Trade and other receivables (cont’d)



(b) Foreign currency exposures

At 31 December 2016, the Group’s trade receivables balances included exposure to foreign currency denominated in United
States Dollar (USD) and Special Drawing Rights (SDR) amounting to RM5.2 million (2015: RM8.8 million) and RM31.6 million
(2015: RM32.1 million) respectively.


17. Derivative financial instruments

Contract
value in
foreign Notional Assets/
currency value Fair value (Liabilities)
USD’000 RM’000 RM’000 RM’000

Non-hedging derivatives

Current

Foreign currency forward contracts:
- 2016 24,400 105,643 109,677 4,034
- 2015 23,000 99,054 98,936 (118)

The above foreign currency forward contracts were entered into by the Group to minimise its exposure to foreign currency risks
as a result of transactions denominated in currency other than its functional currency, arising from the normal business activities.
These contracts are not designated as cash flow or fair value hedges, and are entered into for periods consistent with currency
transaction exposure and fair value changes exposure. Such derivatives do not qualify for hedge accounting. Foreign currency
forward contracts are used to hedge certain payables denominated in USD for which firm commitments existed at the reporting
date, extending to periods between January and March 2017.

During the financial year, the Group recognised a gain of RM4,034,000 (2015: a loss of RM118,000) arising from fair value changes
of derivative financial instruments. The fair value changes are attributable to changes between foreign exchange spot and forward
rates. The method and assumptions applied in determining the fair values of derivatives are disclosed in Note 29(f)(iv).


18. Cash and short-term deposits

Group Company
2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Cash and bank balances 80,688 83,022 940 925


Deposits with licensed banks 295,900 150,535 - -
Cash and cash equivalents 376,588 233,557 940 925

Cash and cash equivalents include cash on hand and at banks and deposits with licensed banks. For the purpose of the statements
of cash flows, cash and cash equivalents are net of outstanding bank overdrafts, if any.

Inspiring Your Digital Life Annual Report 2016 125

Notes to the Financial Statements


31 December 2016

18. Cash and short-term deposits (cont’d)



The Group’s cash and cash equivalents included amounts of foreign currency denominated in USD totalling RM4.5 million (2015:
RM15.3 million) at the reporting date.

Cash at banks earns interest at floating rates based on daily bank deposit rates. The weighted average effective interest rates of
deposits at the reporting date are as follows:

Group
2016 2015
% %

Deposits with licensed banks 3 3



The deposits of the Group placed with licensed banks will mature within one month (2015: one month) from the end of the reporting
date.


19. Loans and borrowings

Group
2016 2015
Note RM’000 RM’000

Non-current (unsecured)

Floating-rate term loans 1,783,728 -
Finance lease obligation 26(c) 15,109 25,376
1,798,837 25,376

Current (unsecured)

Floating-rate term loans - 210,000

financialS
Revolving credits 473,046 1,050,000
Finance lease obligation 26(c) 9,990 8,531
483,036 1,268,531
Total loans and borrowings 2,281,873 1,293,907

The weighted average effective and implicit interest rates at the reporting date for loans and borrowings are as follows:

Group
2016 2015
% %

Floating-rate term loans 5 5


Finance lease obligation 9 9
Revolving credits 5 4

The above loans and borrowings are denominated in RM.
126 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

19. Loans and borrowings (cont’d)



The maturities of the Group’s loans and borrowings at the reporting date are as follows:

Group
2016 2015
RM’000 RM’000

Less than one year 483,036 1,268,531


Between one and two years 6,998 9,990
Between two and five years 1,073,313 15,386
More than five years 718,526 -
2,281,873 1,293,907

20. Deferred tax liabilities



Group
2016 2015
RM’000 RM’000

At 1 January 325,030 263,425


Recognised in profit and loss (Note 8) (13,745) 61,605
At 31 December 311,285 325,030

The components and movements of recognised deferred tax liability and assets of the Group during the financial year prior to
offsetting are as follows:

Deferred tax liability:

Property,
plant and
equipment and
intangible
assets
RM’000

At 1 January 2016 584,123


Recognised in profit and loss 21,954
At 31 December 2016 606,077

At 1 January 2015 519,374
Recognised in profit and loss 64,749
At 31 December 2015 584,123

Inspiring Your Digital Life Annual Report 2016 127

Notes to the Financial Statements


31 December 2016

20. Deferred tax liabilities (cont’d)

Deferred tax assets:

Deferred
revenue Others Total
RM’000 RM’000 RM’000

At 1 January 2016 (98,303) (160,790) (259,093)


Recognised in profit and loss 4,680 (40,379) (35,699)
At 31 December 2016 (93,623) (201,169) (294,792)

At 1 January 2015 (92,753) (163,196) (255,949)
Recognised in profit and loss (5,550) 2,406 (3,144)
At 31 December 2015 (98,303) (160,790) (259,093)

Others relate to deferred tax assets arising from deductible temporary differences on provisions and unrealised foreign exchange.


21. Other liabilities

Group
2016 2015
RM’000 RM’000

Non-current

Provisions (Note a) 40,034 35,283

Current

Provisions (Note a) 7,547 6,195

financialS
Deferred revenue (Note b) 390,074 426,223
397,621 432,418

Total other liabilities 437,655 467,701

128 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

21. Other liabilities (cont’d)

(a) Provisions

Site
decommissioning Defined
and restoration benefit
costs plan Total
RM’000 RM’000 RM’000
Note (Note 24)

Group

Non-current

At 1 January 2016 34,245 1,038 35,283
Capitalised as property, plant and equipment 11(a) 4,236 - 4,236
Recognised in profit and loss 1,019 80 1,099
Paid during the year - (244) (244)
Reversal of provision 7 (340) - (340)
At 31 December 2016 39,160 874 40,034

At 1 January 2015 25,814 1,135 26,949
Capitalised as property, plant and equipment 11(a) 7,107 - 7,107
Recognised in profit and loss 1,324 80 1,404
Paid during the year - (177) (177)
At 31 December 2015 34,245 1,038 35,283

Employee
leave
entitlements
Note RM’000

Group

Current

At 1 January 2016 6,195
Recognised in profit and loss 7 1,352
At 31 December 2016 7,547

At 1 January 2015 4,659
Recognised in profit and loss 7 1,536
At 31 December 2015 6,195

Further details on the provisions are disclosed in Note 2(k).

(b) Deferred revenue

Deferred revenue comprises unutilised balance of airtime and data subscriptions in respect of services sold to customers.

Inspiring Your Digital Life Annual Report 2016 129

Notes to the Financial Statements


31 December 2016

22. Trade and other payables



Group Company
2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Trade payables 225,782 399,717 - -


Other payables 371,223 282,669 - -
Accruals 1,335,685 1,359,361 945 981
Customer deposits 15,161 14,429 - -
1,947,851 2,056,176 945 981

The Group’s trade and other payables are non-interest bearing, and are subject to normal credit terms ranging from 30 to 60 days
(2015: 30 to 60 days).

At 31 December 2016, the Group’s trade and other payables balances included exposure to foreign currency denominated in USD,
SDR and Norwegian Krone (NOK) amounting to RM105.9 million (2015: RM242.1 million), RM27.3 million (2015: RM14.4 million)
and RM67.0 million (2015: RM31.2 million) respectively.


23. Share capital

Group/Company
Number of ordinary
shares of 1 sen each Amount
2016 2015 2016 2015
’000 ’000 RM’000 RM’000

Authorised
At 1 January/31 December 100,000,000 100,000,000 1,000,000 1,000,000

Issued and fully paid
At 1 January/31 December 7,775,000 7,775,000 77,750 77,750

financialS

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry
one vote per share without restrictions and rank equally with regard to the Company’s residual assets.


24. Defined benefit plan

The Group operates an unfunded defined benefit plan for its eligible employees. The estimated obligations under the retirement
benefit scheme are determined based on actuarial valuation by a qualified independent actuary on 18 March 2014.

The amount recognised in the consolidated statement of financial position is determined as follows:

Group
2016 2015
Note RM’000 RM’000

Present value of unfunded obligations 21 874 1,038



130 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

24. Defined benefit plan (cont’d)

The amount recognised in profit and loss, included under staff expenses, is as follows:

Group
2016 2015
Note RM’000 RM’000

Interest on obligations, representing increase in provision for defined benefit plan 7 80 80



The principal actuarial assumption used in determining the retirement benefit obligation for the defined benefit plan, is as
follows:

Group
2016 2015
% %

Rate per annum:


- Discount rate 5 5

Assumptions regarding future mortality are based on published statistics and mortality table.


25. Retained earnings

The Company may distribute dividends out of its entire retained earnings as at 31 December 2016 and 2015 respectively, under
the single-tier system.


26. Commitments

(a) Capital commitments

Group
2016 2015
RM’000 RM’000

Capital expenditure in respect of property, plant and equipment and intangible assets:

- Approved and contracted for 1,077,000 286,000

- Approved but not contracted for 1,043,000 944,000

Inspiring Your Digital Life Annual Report 2016 131

Notes to the Financial Statements


31 December 2016

26. Commitments (cont’d)



(b) Non-cancellable operating lease commitments

Group
2016 2015
RM’000 RM’000

Future minimum lease payments:


- Less than one year 355,601 241,555
- Between one and five years 525,763 256,258
- More than five years 201,061 75,192
1,082,425 573,005

Operating lease payments represent rentals payable by the Group for lease of transmission facilities and sites to support its
telecommunications operations. The tenure of these leases range between one to ten years, with options to renew. None of
the leases included contingent rentals.

(c) Finance lease commitments

The Group’s finance lease commitment is in relation to the acquired indefeasible right of use (IRU) over purchased fiber optic
wavelength by means of a finance lease arrangement. Future minimum lease payments under the finance lease together with
the present value of the net minimum lease payments are as follows:

Group
2016 2015
RM’000 RM’000

Minimum lease payments:


- Less than one year 11,726 11,410
- Between one and two years 7,946 11,726
- Between two and five years 8,506 16,452
Total minimum lease payments 28,178 39,588

financialS
Less: Amounts representing finance charges (3,079) (5,681)
Present value of minimum lease payments 25,099 33,907

Present value of payments:
- Less than one year 9,990 8,531
- Between one and two years 6,998 9,990
- Between two and five years 8,111 15,386
Present value of minimum lease payments 25,099 33,907
Less: Amount due within 12 months (Note 19) (9,990) (8,531)
Amount due after 12 months (Note 19) 15,109 25,376

132 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

27. Performance guarantees



Group
2016 2015
RM’000 RM’000

Unsecured
Guarantees given to third parties for public infrastructure works 13,484 14,985
Guarantee given to MCMC on the allocation of the 2600 MHz spectrum band 10,000 10,000
Guarantee given to MCMC for USP project of constructing and operating the radio
access network infrastructure 24,562 -
48,046 24,985


28. Significant related party disclosures

(a) Sales and purchases of services

Related party relationships are as follows:

(i) The immediate and ultimate holding company are as disclosed in Note 1; and
(ii) The Company’s subsidiaries are as disclosed in Note 13.

Significant transactions and balances with related parties of the Group during the financial year are as follows:

Balance due
Transactions (to)/from at
2016 2015 2016 2015
Group RM’000 RM’000 RM’000 RM’000

With the ultimate holding company and fellow subsidiaries



- Telenor ASA (49,483) (50,387)
Consultancy services rendered 25,797 19,869
Fees payable for licenses and trademarks 10,500 -

- Telenor Consult AS 33 -
Personnel services rendered 199 3,634

- Telenor GO Pte Ltd 841 (3,112)
Personnel services rendered 13,234 11,094

- Telenor Global Services AS (5,791) (9,232)
Sales of interconnection services on
international traffic 2,882 652
Purchases of interconnection services on
international traffic 24,489 27,868
Purchases of international roaming services 2,135 -
Purchases of IP transit 760 -
Purchases of global connectivity 1,343 1,252

Inspiring Your Digital Life Annual Report 2016 133

Notes to the Financial Statements


31 December 2016

28. Significant related party disclosures (cont’d)



(a) Sales and purchases of services (cont’d)

Balance due
Transactions (to)/from at
2016 2015 2016 2015
Group (cont’d) RM’000 RM’000 RM’000 RM’000

With the ultimate holding company and fellow


subsidiaries (cont’d)

- Total Access Communication Public Company Limited 415 (12)
Sales of international roaming services 28 81
Purchases of international roaming services (25) 2,890

- dtac TriNet Co. Ltd 1,622 (15,764)
Sales of international roaming services 421 370
Purchases of international roaming services 387 958
Sales of interconnection services on
international traffic 232 264
Purchases of interconnection services on
international traffic 5,616 18,450
Lease income from bandwidth leasing 5,138 -

- Telenor Digital Services AS (705) (1,093)
Consultancy services rendered 910 103

- Telenor Shared Services
Pakistan (Private Limited) - (163)
Purchases of customer centre offshoring services - 1,857

- Telenor Global Shared Services AS (7,421) (6,369)
Services rendered on application operations and

financialS
basic operation for data centre 9,171 5,015
Purchases of operation application 347 289
Services rendered on IT Infrastructure Shared
Services Centre - 500
Purchases of customer centre offshoring services 2,378 1,133

- Telenor IT Asia Sdn Bhd (10,239) (3,099)
Rental income and services rendered for
Asian Infrastructure Shared Services Centre 893 688
Services rendered on Asian Infrastructure
Shared Services Centre 7,291 5,853

- Valyou Sdn Bhd (formerly known as Prabhu Money
Transfer Sdn Bhd) 10 -
Sales of telecommunication and related services 1,683 -

134 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

28. Significant related party disclosures (cont’d)



(a) Sales and purchases of services (cont’d)

Amounts due (to)/from related companies are trade in nature, unsecured, non-interest bearing and are subject to the normal
credit terms for trade receivables and trade payables respectively.

The directors are of the opinion that the above transactions are entered into, in the normal course of business and at standard
commercial terms mutually agreed between both parties.

(b) Compensation of key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly and indirectly, including directors of that entity.

The remuneration of key management personnel during the financial year was as follows:

Group
2016 2015
RM’000 RM’000

Short-term employee benefit 11,530 14,838


Post-employment benefits 977 1,273
Other employment benefits 345 555
12,852 16,666


29. Financial instruments

(a) Financial risk management objectives and policies

In the normal course of conducting its business activities, the Group is exposed to a variety of financial risks, which include
credit, foreign currency, liquidity and interest rate risks. The Group’s overall risk management programme seeks to minimise
potential adverse effects of these risks on the financial performance of the Group.

(b) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counter party default on its obligations.
The Group’s credit risk arises in the normal course of business primarily with respect to trade and other receivables and cash
and short-term deposits. Credit risk is managed through formalised policies on credit assessment and approvals, credit limits
and monitoring procedures. Deposits are placed only with or only entered into with reputable licensed banks and unit trust
funds, if any.

The maximum credit risk exposure in respect of trade receivables is limited to the carrying amount of the receivables less
allowance for impairment, whereas the maximum exposure for other receivables, and cash and cash equivalents are the
reported carrying values in the financial statements. Information regarding trade receivables that are neither past due nor
impaired, and past due but not impaired, are disclosed in Note 16(a).

At the reporting date, there were no significant concentrations of credit risk.
Inspiring Your Digital Life Annual Report 2016 135

Notes to the Financial Statements


31 December 2016

29. Financial instruments (cont’d)



(c) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. The Group is exposed to foreign currency risk as a result of transactions denominated
in currencies other than its functional currency, arising from the normal business activities. The currencies giving rise to
this risk are primarily the USD, SDR and NOK. Although approximately 19% (2015: 21%) of the Group’s total expenses are
denominated in the above-mentioned foreign currencies, the settlements of these payables are on a net basis, together with
revenues earned from the same operators and partners. The Group also holds cash and cash equivalents denominated in
USD for working capital purposes. The Group’s foreign-denominated cash and cash equivalents at the reporting date is
disclosed in Note 18.

Exposure to foreign currency risk is monitored on an on-going basis and when considered necessary, the Group will consider
using effective financial instruments to hedge its foreign currency risk in accordance with its foreign currency hedging policy.
In line with the Group’s foreign currency hedging policy, hedging is only considered for firm commitments and highly probable
transactions of which hedging shall not exceed 100% of the net exposure value. Speculative activities are strictly prohibited.
The Group adopts a layered approach to hedging, where a higher percentage of hedging will be executed for closer-dated
exposures and with time, increase the hedge as the probability of the underlying exposure increases. These derivatives and
their underlying exposures will be monitored on an on-going basis. However, these contracts are not designated as cash flow
or fair value hedge.

The Group’s foreign currency forward contracts are executed only with creditworthy financial institutions in Malaysia which
are governed by appropriate policies and procedures. The cash requirement for settling these foreign currency forward
contracts is solely from the Group’s working capital.

Details of the Group’s outstanding foreign currency forward contracts for the purpose of hedging certain payables
denominated in USD for which firm commitments existed at the reporting date, extending to periods between January and
March 2017, are disclosed in Note 17. The effects of changes in the fair values of these derivative financial instruments have
already been included in the financial statements during the financial year.

Management believes that there is no reasonably possible fluctuation in the foreign exchange rate which would cause any
material effect to the Group’s profit for the year.

financialS
(d) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds. The
Group monitors and maintains a level of cash and cash equivalents deemed adequate by management, for working capital
purposes and to mitigate the effects of fluctuations in cash flows. The Group invests only in highly liquid cash management
funds, if any.

The Group’s trade and other payables and non-hedging derivative liabilities at the reporting date, are short-term in nature,
and are payable either on-demand or within one year. Details of respective maturities for the Group’s loans and borrowings
are as disclosed in Note 19.

136 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

29. Financial instruments (cont’d)

(d) Liquidity risk (cont’d)



Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities at the reporting date
based on contractual undiscounted repayment obligations.

On demand One More


or within one to two Two to than
year years five years five years Total
RM’000 RM’000 RM’000 RM’000 RM’000

Group

2016

Financial liabilities

Trade and other payables 1,947,851 - - - 1,947,851
Loans and borrowings 486,726 7,946 1,083,506 725,000 2,303,178
Total undiscounted financial liabilities 2,434,577 7,946 1,083,506 725,000 4,251,029

2015

Financial liabilities

Trade and other payables 2,056,176 - - - 2,056,176
Loans and borrowings 1,271,410 11,726 16,452 - 1,299,588
Total undiscounted financial liabilities 3,327,586 11,726 16,452 - 3,355,764

(e) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because
of changes in market interest rates. The Group’s income and operating cash flows are substantially independent of changes in
market interest rates. The Group is exposed to interest rate risk primarily from the deposit placements and interest-bearing
financial liabilities. The Group manages its interest rate risk for the interest-earning deposit placements by placing such
balances on varying maturities and interest rate terms.

The Group’s policy in dealing with interest-bearing financial liabilities is to minimise the interest expense by obtaining the
most favourable interest rates available. A difference of 20 (2015: 20) basis points in interest rates applicable for the Group’s
entire loans and borrowings (excluding finance lease obligation) would result in approximately 0.16% (2015: 0.11%) variance
in the Group’s profit for the year.

Inspiring Your Digital Life Annual Report 2016 137

Notes to the Financial Statements


31 December 2016

29. Financial instruments (cont’d)



(f) Fair values

The following methods and assumptions are used to estimate the fair values of the following classes of financial instruments:

(i) Cash and short-term deposits

The carrying amounts approximate their fair values due to the relatively short-term maturity of these financial
instruments.

(ii) Trade and other receivables and trade and other payables

The carrying amounts approximate their fair values because these are subject to normal credit terms and are short-
term in nature.

(iii) Loans and borrowings

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due
to the insignificant impact of discounting.

The carrying amounts of floating-rate term loan are reasonable approximations of fair values as they are floating rate
instruments that are re-priced to market interest rates on or near the reporting date.

The fair values of non-current portion of loans and borrowings are estimated by discounting expected future cash flows
at market incremental lending rate for similar types of borrowing or leasing arrangements at the reporting date.

(iv) Derivative financial instruments

Derivatives are stated at fair value which is equivalent to the marking of the derivatives to market, using prevailing
market rates.

At the reporting date, the carrying amounts and fair values of the Group’s financial instruments not carried at fair values and
whose carrying amounts are not reasonable approximation of fair values, are as follows:

financialS

(i) Other investment

Fair value information has not been disclosed for the Group’s investment in unquoted equity interest that is carried
at cost of RM100,000 because its fair value cannot be measured reliably. The equity instrument represents ordinary
shares not quoted on any market and does not have any comparable industry peers that is listed.

(ii) Financial liabilities

Group
Carrying amount Fair value
Note 2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Loans and borrowings (non-current):


- Finance lease obligation 19 15,109 25,376 24,905 34,002

138 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

29. Financial instruments (cont’d)



(g) Classification

The carrying amounts of financial instruments under each category of MFRS 139, are as follows:


Group Company
Note 2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Available-for-sale financial assets:


- Other investments 14 100 - - -

Loans and receivables:
- Trade receivables 16(a) 357,779 338,268 - -
- Other receivables 16 436,797 221,139 5 4
- Deposits 16 171,423 150,096 - -
- Cash and short-term deposits 18 376,588 233,557 940 925
1,342,587 943,060 945 929

Non-hedging derivative financial assets/(liabilities) 17 4,034 (118) - -

Other financial liabilities:
- Floating-rate term loan 19 1,783,728 210,000 - -
- Revolving credits 19 473,046 1,050,000 - -
- Finance lease obligation 19 25,099 33,907 - -
- Trade payables 22 225,782 399,717 - -
- Other payables 22 371,223 282,669 - -
- Accruals 22 1,335,685 1,359,361 945 981
- Customer deposits 22 15,161 14,429 - -
4,229,724 3,350,083 945 981

Inspiring Your Digital Life Annual Report 2016 139

Notes to the Financial Statements


31 December 2016

29. Financial instruments (cont’d)



(h) Fair value measurement

The following table provides the fair value measurement hierarchy of the Group’s financial assets and liabilities.

Quantitative disclosures fair value measurement hierarchy for financial assets/(liabilities) as at 31 December 2016:

Fair value measurement using
Quoted Significant
prices in Significant unobserv-
active observable able
Date of markets inputs inputs
Note valuation Total (Level 1) (Level 2) (Level 3)

RM’000 RM’000 RM’000 RM’000



Financial assets measured at
fair value:
Non-hedging derivative 31 December
financial assets 17 2016 4,034 - 4,034 -

Financial liabilities for which fair
values are disclosed:
Loans and borrowings (non-current): 31 December
- Finance lease obligation 29(f) 2016 (24,905) - - (24,905)


Quantitative disclosures fair value measurement hierarchy for financial assets/(liabilities) as at 31 December 2015:

Fair value measurement using


Quoted Significant
prices in Significant unobserv-
active observable able
Date of markets inputs inputs

financialS
Note valuation Total (Level 1) (Level 2) (Level 3)

RM’000 RM’000 RM’000 RM’000


Financial liabilities measured at
fair value:
Non-hedging derivative 31 December
financial liabilities 17 2015 (118) - (118) -

Financial liabilities for which fair
values are disclosed:
Loans and borrowings (non-current): 31 December
- Finance lease obligation 29(f) 2015 (34,002) - - (34,002)

There have been no transfers between Level 2 and Level 3 in the current year and prior year.


The fair value of finance lease obligation is categorised as level 3 hierarchy as it was estimated by discounting the future
contractual cash flow at an adjusted discount rate. The significant unobservable inputs in arriving at the adjusted discount rate
are the constant prepayment rate and the own non-performance risk as at 31 December 2016 and at 31 December 2015.

140 Annual Report 2016 Digi.Com Berhad

Notes to the Financial Statements


31 December 2016

30. Capital management



The essence of the Group’s capital management strategy is to support its long-term strategic ambitions including:

(i) its commitment to long-term sustainable dividend policy;
(ii) its financial obligation and ability to maintain financial flexibility; and
(iii) its ability to support its business requirements and enable future growth.

Going-forward, the Group will continue to actively manage its capital structure to enhance shareholders’ value and make
adjustments to address changes in the economic environment and its business risk characteristics. The Group had during the
financial year ended 31 December 2009, revised its minimum dividend pay-out policy to at least 80% of the Company’s profit for
the year, and dividend payment frequency. The dividend policy will be maintained subject to on-going assessment, and based on the
availability of distributable reserves as well as the Group’s future cash flow requirements and market conditions. These revisions
and any other revision to its allocation of capital resources are subject to the approval of the Board of Directors. No changes were
made in the objectives, policies or processes during the financial year ended 31 December 2016.


31. Segmental information

Segmental information is not presented as the Group is primarily engaged in the provision of mobile communication services and
its related products in Malaysia.


32. Subsequent events

(i) Advance payments for bandwidth connectivity

On 27 January 2017, the Group has made the second tranche of advance payments to a network facilities provider (NFP)
amounting to RM56.0 million (First tranche paid in 2015 amounting to RM83.1 million) in order to secure connectivity
services for selected network infrastructure sites of the Group for a period of 10 years. The advance payments are charged
to profit or loss on a straight-line basis over the service period upon commissioning of the respective sites.

(ii) Proposed establishment of a Sukuk Programme with combined limit of up to RM5.0 billion in nominal value

On 14 February 2017, the Group announced that its wholly-owned subsidiary, Digi Telecommunications Sdn Bhd (DTSB),
has proposed to establish an Islamic medium term notes (IMTN) programme of up to RM5.0 billion in nominal value (IMTN
Programme); and an Islamic commercial papers (ICP) programme of up to RM1.0 billion in nominal value (ICP Programme),
which have a combined limit of up to RM5.0 billion in nominal value (collectively referred to as Sukuk Programme) based on
the Islamic principle of Murabahah (via a Tawarruq arrangement).

The tenure of the proposed IMTN and ICP Programme is fifteen (15) and seven (7) years, respectively from the date of the
first issuance. RAM Ratings Services Berhad has assigned AAA rating for the proposed IMTN Programme and P1 rating
for the proposed ICP Programme. The proceeds from the Sukuk Programme shall be used to finance capital expenditure,
working capital requirements, other general funding requirements and/or general corporate purposes of DTSB and/or its
subsidiaries, which shall be Shariah-compliant.

33. Authorisation of financial statements for issue



The financial statements for the financial year ended 31 December 2016 were authorised for issue in accordance with a resolution
of the directors on 13 March 2017.

Inspiring Your Digital Life Annual Report 2016 141

Notes to the Financial Statements


31 December 2016

34. Supplementary information – Disclosure of realised and unrealised profits/losses



The break-down of the (accumulated losses)/retained earnings of the Group and of the Company as at 31 December 2016 and
2015 into realised and unrealised (losses)/profits is presented in accordance with the directive issued by Bursa Malaysia Securities
Berhad, and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or
Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian
Institute of Accountants.

Group Company
2016 2015 2016 2015
RM’000 RM’000 RM’000 RM’000

Total (accumulated losses)/retained earnings of the


Company and its subsidiaries:
- Realised (264,246) (191,937) 3,072 3,025
- Unrealised 13,861 (58,356) - -
(250,385) (250,293) 3,072 3,025

financialS
142 Annual Report 2016 Digi.Com Berhad

List of Properties
as at 31 December 2016

No. Location Tenure Description/ Date of Area Age of Net Book Net Book
Existing Use Acquisition Building Value as at Value as at
31.12.2015 31.12.2016
Years RM’000 RM’000

1 H.S. (D) No 92086 & 92087 Freehold Land with a building/ 29.12.1997 22,529 sq ft 19 595 577
P.T. No 9 & No.10, Telecommunications
Pekan Seremban Jaya, Centre
Daerah Seremban,
Negeri Sembilan

2 Unit No 202-4-11, Freehold Apartment/Housing 26.01.1995 802 sq ft 21 79 77


Sri Bandar Besi, base transceiver
Jalan Sungai Besi, equipment
Sungai Besi,
Kuala Lumpur

3 Unit No C16-2, Freehold Apartment/Housing 04.02.1995 2,249 sq ft 23 422 408


Indera Subang UEP, base transceiver
Jalan UEP 6/2L, equipment
UEP Subang Jaya,
Petaling Jaya,
Selangor

4 No 1-16.2, 16th Floor, Freehold Apartment/Housing 25.01.1995 1,249 sq ft 22 158 153


Union Height, Taman Yan, base transceiver
Jalan Klang Lama, equipment
Kuala Lumpur

5 3rd Floor, Unit Pt 4888/4786 C, Freehold Apartment/Housing 29.03.1995 1,319 sq ft 21 60 58


Block TC-14, base transceiver
Taman Sri Gombak, equipment
Jalan Batu Caves,
Selangor

6 4572, 7th Floor, Freehold Apartment/Housing 07.02.1995 1,115 sq ft 21 123 119


Sri Jelatek Condominiums, base transceiver
Section 10, Wangsa Maju, equipment
Kuala Lumpur

7 32 , PLO 151 Leasehold Land with a building/ 12.05.1995 1.58 acres 22 739 727
Jln Angkasa Mas Utama, 30 years Telecommunications
Kawasan Perindustrian Tebrau II, (expiring in Centre
81100 Johor Bahru, 2023)
Johor

8 HS (D) 77, No. P.T. Leasehold Land with a building/ 23.03.1995 1 acre 42 1,502 1,450
PTBM/A/081, Mukim 1, 60 years Telecommunications
Kawasan Perusahaan Perai, (expiring Centre
District Seberang Perai Tengah, in 2033)
Pulau Pinang

9 Lot 36, Leasehold Land with a building/ 12.06.1995 0.938 acre 36 1,681 1,625
Sedco Light Industrial Estate, 60 years Telecommunications
Jalan Kelombong, (expiring Centre
Kota Kinabalu, in 2034)
Sabah
Inspiring Your Digital Life Annual Report 2016 143

List of Properties
as at 31 December 2016

No. Location Tenure Description/ Date of Area Age of Net Book Net Book
Existing Use Acquisition Building Value as at Value as at
31.12.2015 31.12.2016
Years RM’000 RM’000

10 Lot 1220, Section 66, Leasehold Land with a building/ 15.08.1995 4,124 sq ft 21 1,448 1,399
Kuching Town Land District, 60 years Telecommunications
Sarawak (expiring Centre
in 2036)

11 No 112, Leasehold Land with a building/ 07.07.1995 4 acres 34 1,639 1,584


Semambu Industrial Estate, 66 years Telecommunications
Kuantan, (expiring Centre
Pahang in 2041)

12 Unit 16-12-1, 12th Floor, Leasehold Apartment/Housing 08.02.1995 1,400 sq ft 28 162 160
Cloud View Tower, 99 years base transceiver
Taman Supreme, (expiring equipment
Cheras, in 2076)
Kuala Lumpur

13 Unit No M803 Leasehold Apartment/Housing 22.03.1995 1,100 sq ft 25 87 86


8th Floor, Sunrise Park, 99 years base transceiver
Ampang, (expiring equipment
Kuala Lumpur in 2088)

14 H.S.(D) 12776, P.T. No. 15866, Leasehold Land with a building/ 07.08.1996 7.5 acres 23 5,231 5,164
Mukim Bentong, 99 years Earth Station Complex
District of Bentong, (expiring
Pahang in 2091)

15 Plot D-38, Leasehold Land with fixed line 14.11.1997 25,521 sq ft 19 353 349
Taman Industri Prima Kota Fasa 1, 99 years switch and base
Sector 3, Bandar Indera Mahkota, (expiring in transceiver station
Kuantan, 2097)
Pahang

16 Ptd 1490, Leasehold Land with trunk 17.08.1999 40,000 sq ft 17 103 102
Mukim of Jemaluang, 99 years station
District of Mersing, (expiring
Johor in 2098)

17 PN 89926, Lot 191363, Leasehold Land with a building/ 15.07.1999 5,942 sq ft 17 190 188
Mukim Hulu Kinta, 90 years Telecommunications
Daerah Kinta, Perak (expiring Centre
in 2081)

18 Lot No 54, Jalan 6/2, Leasehold Land with a building/ 23.05.2000 18,050 sq ft 27 1,670 1,650
Kawasan Perindustrian 99 years Telecommunications
Seri Kembangan, (expiring Centre
ADDITIONAL INFORMATION

43000 Seri Kembangan, in 2091)


Selangor

19 Lot 2728 Miri Leasehold Land with cabin 29.09.2000 4,937 sq m N/A 838 814
Concession Land District, 60 years container/
Lopeng , Miri, (expiring Telecommunications
Sarawak in 2027) Centre
144 Annual Report 2016 Digi.Com Berhad

List of Properties
as at 31 December 2016

No. Location Tenure Description/ Date of Area Age of Net Book Net Book
Existing Use Acquisition Building Value as at Value as at
31.12.2015 31.12.2016
Years RM’000 RM’000

20 Lot 10, Jalan Delima 1/1, Freehold Land with a building 19.07.2001 284,485 sq ft 11 57,482 71,715
Subang Hi-Tech Industrial Park,
40000 Subang Jaya,
Selangor

21 No. 24, Jalan KIP 7, Freehold Land with a building/ 21.08.2002 17,847 sq ft 20 2,779 2,779
Taman Perindustrian KIP, Telecommunications
52200 Kuala Lumpur Centre

22 Lot 42, Jalan Delima 1/1, Freehold Parking Lot 28.04.2008 91,676 sq ft N/A 8,234 8,234
Subang Hi-Tech Industrial Park, (Title transferred
date)
40000 Subang Jaya,
Selangor

23 Lot 43, Jalan Delima 1/1, Freehold Land with a building/ 06.04.2008 92,142 sq ft 7 68,678 67,303
Subang Hi-Tech Industrial Park, Telecommunications (Title transferred
date)
40000 Subang Jaya, Centre
Selangor

24 13-1st Floor, Freehold Apartment unit 26.10.2009 935 sq ft 26 122 119


Gemilang Indah Condominium,
Geran Mukim 2227/M1/2/7,
Lot 295, Sek 98,
Bandar KL,
Wilayah Perseketuan

25 H.S.(M) 26928 PT 180, Leasehold Land with a building/ 03.03.2009 1803 sq m 21 4,042 3,994
Pekan Serdang, 90 years Telecommunications
Tempat Seri Kembangan, (expiring Centre
Daerah Petaling, in 2099)
Selangor

26 Title No. PN 89925, Leasehold Land with a building/ 21.09.2009 358 sq m 16 677 669
Lot 191362, 90 years Telecommunications
No.4, Hala Perusahaan (expiring Centre
Kledang U5, in 2099)
Kawasan Perusahaan
Menglembu,
Daerah Kinta, Perak

Notes:
The Group does not adopt a revaluation policy on landed properties.
N/A denotes “Not Applicable”
Inspiring Your Digital Life Annual Report 2016 145

Disclosure of Recurrent Related Party Transactions

At the Annual General Meeting held on 13 May 2016, the Company obtained a shareholders’ mandate to allow the Group to enter into
recurrent related party transactions of revenue or trading nature.

In accordance with Practice Note 12 of Main Market Listing Requirements of Bursa Securities, the details of recurrent related party
transactions conducted during the financial year ended 31 December 2016 pursuant to the shareholders’ mandate are disclosed as
follows:-

Sales of goods Purchase of


Digi Group with the Digi and/or and services goods and
following related its subsidiary Nature of transaction undertaken by/ during the services during
parties companies provided to Digi and/or its subsidiaries financial year the financial year
RM’000 RM’000
Telenor Group of Companies
Telenor Group DTSB Business service costs, which include consultancy, 25,797
training programmes and advisory fees (Business
Service Costs)
Telenor Group DTSB Personnel services and professional fees 1,323 13,556
(Professional Service)
Telenor Group DTSB International Accounting Settlement. This refers 3,114 30,105
to an arrangement for interconnection services on
international traffic between foreign carriers
Telenor Group DTSB International Roaming 809 2,997
Telenor Group DTSB Customer Centre offshoring services 2,378
Telenor Group DTSB IP Transit (Internet Upstream) 760
Telenor Group DTSB Global connectivity services with Telenor Business 1,343
Units (BUs) in Asia and to data centers for common
services
Telenor Group DTSB Services rendered on Enterprise Resource Planning 9,518
(ERP) and enterprise applications
Telenor Group DTSB Infrastructure Shared Services Centre in Asia (ITSSC) 893 7,291
Telenor Group DTSB Licenses and trademarks 10,500
Telenor Group DTSB Bandwidth leasing 5,138
Telenor Group DTSB Telecommunication and related services 1,683
TOTAL 12,960 104,245
ADDITIONAL INFORMATION

Notes:
1. Telenor Group refers to Telenor ASA and its subsidiary and related companies (including the associated companies). Telenor ASA is the ultimate holding
company of Digi.Com Berhad (Digi).
2. Digi Telecommunications Sdn Bhd (DTSB) is a wholly-owned subsidiary of Digi.
146 Annual Report 2016 Digi.Com Berhad

Statement of Directors’ Shareholdings


as at 3 March 2017

Number of Ordinary Shares

The Company
Digi.Com Berhad Direct Interest % Deemed Interest %

- - - - -

Number of Ordinary Shares of NOK6 each

Ultimate Holding Company


Telenor ASA Direct Interest % Deemed Interest %

Tore Johnsen 39,306 0.0026 - -

Morten Karlsen Sorby 83,465 0.0056 682 0

Lars-Ake Valdemar Norling 30,835 0.0021 - -

Kristin Muri Moller 18,667 0.0012 - -

Number of Options over Ordinary Shares of NOK6 each

Ultimate Holding Company


Telenor ASA Direct Interest % Deemed Interest %

Tore Johnsen - - - -

Morten Karlsen Sorby - - - -

Lars-Ake Valdemar Norling - - - -

Kristin Muri Moller - - - -


Inspiring Your Digital Life Annual Report 2016 147

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Twentieth Annual General Meeting (20th AGM) of Digi.Com Berhad (the Company) will be
held at Nexus Ballroom 2 & 3, Connexion @ Nexus, No. 7 Jalan Kerinchi, Bangsar South City, 59200 Kuala Lumpur, Malaysia on
Tuesday, 9 May 2017 at 10.00 a.m. for the following purposes:

Agenda

As Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 31 December 2016 and the (Please refer to
Reports of the Directors and Auditors thereon. Note 1 of the
Explanatory Notes)

2. To re-elect the following Directors of the Company retiring pursuant to the Article 98(A) of the
Company’s Articles of Association:-

(i) Tan Sri Saw Choo Boon Ordinary Resolution 1


(ii) Puan Yasmin Binti Aladad Khan Ordinary Resolution 2

3. To approve the payment of Directors’ fees of up to RM1,100,000 for the Independent Non-Executive Ordinary Resolution 3
Directors and benefits payable to the Directors up to an aggregate amount of RM40,000 from
1 January 2017 until the next AGM of the Company.

4. To appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to fix Ordinary Resolution 4
their remuneration.

As Special Business
To consider and, if deemed fit, to pass the following resolutions:-

5. Proposed Renewal of Existing Shareholders’ Mandate and Proposed New Shareholders’ Mandate Ordinary Resolution 5
For Recurrent Related Party Transactions of a Revenue or Trading Nature, to be entered with
Telenor ASA (Telenor) and Persons Connected with Telenor (Proposed Shareholders’ Mandate)

“That, subject to the provisions of the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad, approval be and is hereby given for the Proposed Shareholders’ Mandate for the Company
and its subsidiaries, to enter into recurrent related party transactions of a revenue or trading nature
with Telenor and persons connected with Telenor as specified in Section 2.3 of the Circular to
Shareholders dated 10 April 2017, which are necessary for the day-to-day operations and/or in the
ordinary course of business of the Company and its subsidiaries on terms not more favourable to the
related parties than those generally available to the public and are not detrimental to the minority
shareholders of the Company and that such approval shall continue to be in force until:
ADDITIONAL INFORMATION

(i) the conclusion of the next annual general meeting of the Company following the general meeting
at which this Ordinary Resolution shall be passed, at which time it will lapse, unless by a resolution
passed at a general meeting, the authority conferred by this resolution is renewed;

(ii) the expiration of the period within which the next annual general meeting after the date it is
required to be held pursuant to Section 340(2) of the Companies Act, 2016 (but shall not extend
to such extension as may be allowed pursuant to Section 340(4) of the Companies Act, 2016); or
148 Annual Report 2016 Digi.Com Berhad

Notice of Annual General Meeting

(iii) revoked or varied by resolution passed by the shareholders at a general meeting,

whichever is earlier.

And that in making the disclosure of the aggregate value of the recurrent related party transactions
conducted pursuant to the proposed shareholders’ approval in the Company’s annual reports, the
Company shall provide a breakdown of the aggregate value of recurrent related party transactions
made during the financial year, amongst others, based on:

(i) the type of the recurrent related party transactions made; and

(ii) the names of the related parties involved in each type of the recurrent related party transactions
made and their relationship with the Company.

And further that authority be and is hereby given to the Directors of the Company and its subsidiaries
to complete and do all such acts and things (including executing such documents as may be required)
to give effect to the Proposed Shareholders’ Mandate.”

6. Proposed Amendments to the Articles of Association of the Company Special Resolution

“That the deletions, alterations, modifications, variations and additions to the Articles of Association of
the Company as set out in Appendix II of the Circular to Shareholders dated 10 April 2017 be and are
hereby approved.”

As Other Business

7. To transact any other business of which due notice has been given.

FURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a member who shall be entitled to attend this 20th AGM,
the Company shall be requesting Bursa Malaysia Depository Sdn Bhd in accordance with Article 54(1)(b) of the Company’s Articles
of Association and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991, to issue a General Meeting Record of
Depositors as at 28 April 2017. Only a depositor whose name appears on Record of Depositors shall be entitled to attend, speak and
vote at the said meeting or appoint proxies to attend, speak and/or vote on his/her behalf.

By Order of the Board

CHOO MUN LAI (MAICSA 7039980)


TAI YIT CHAN (MAICSA 7009143)
Company Secretaries

Selangor Darul Ehsan


10 April 2017
Inspiring Your Digital Life Annual Report 2016 149

Notice of Annual General Meeting

NOTES:-

(A) APPOINTMENT OF PROXY



(i) A member entitled to attend and vote at a general meeting of the Company is entitled to appoint a proxy to attend, speak
and vote on his behalf. Where more than one proxy is appointed, the appointment shall not be valid unless he specifies the
shareholdings to be represented by each proxy. A proxy need not be a member of the Company.

(ii) Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple
beneficial owners in one securities account (omnibus account) as defined under the Securities Industry (Central Depositories)
Act 1991, there shall be no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each
omnibus account it holds.

(iii) The instrument appointing a proxy, shall be in writing under the hand of the appointer or his attorney duly authorised in writing,
and in the case of a corporation, either under its seal or under the hand of an officer or attorney duly authorised.

(iv) The instrument appointing a proxy together with the power of attorney (if any) or a certified copy thereof must be deposited at
the Company’s Share Registrar Office at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8,
Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia at least twenty-four (24) hours before the time appointed for the holding of the
meeting.

(B) EXPLANATORY NOTES

1. The Audited Financial Statements are laid in accordance with Section 340(1)(a) the Companies Act, 2016 for discussion only
under Agenda 1. They do not require shareholders’ approval and hence, will not be put for voting.

2. Ordinary Resolution 5 proposed under Agenda 5 on the shareholders’ mandate, if passed, will allow the Company and its
subsidiaries (Group) to enter into recurrent related party transactions in accordance with paragraph 10.09 of the Main
Market Listing Requirements of Bursa Malaysia Securities Berhad and the necessity to convene separate general meetings
from time to time to seek shareholders’ approval as and when such recurrent related party transactions occur would not
arise. This would reduce substantial administrative time and expenses associated with the convening of such meetings
without compromising the corporate objectives of the Group or affecting the business opportunities available to the Group.
The shareholders’ mandate is subject to renewal on an annual basis.

3. The proposed Special Resolution, if passed, will align the Articles of Association with the new Companies Act, 2016 which came
into force on 31 January 2017, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, and prevailing
statutory and regulatory requirements as well as to render clarity and consistency throughout. Details of which as set out in the
Circular to Shareholders dated 10 April 2017.

Personal data privacy:


By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the AGM and/or any adjournment
ADDITIONAL INFORMATION

thereof, a member of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its
agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for
the AGM (including any adjournment thereof), and the preparation and compilation of the attendance lists, minutes and other documents
relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws,
listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the member discloses the personal data of the
member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies)
and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or
representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims,
demands, losses and damages as a result of the member’s breach of warranty.
This page has been left blank intentionally
FORM OF PROXY DIGI.COM BERHAD
(Company No.: 425190-X)
(Incorporated in Malaysia)

I/We (Name in full) ________________________________________________________________________________________________________________________________________________________________________

NRIC No. or Company No. (New and Old NRIC No.) __________________________________________________________________________________________________

CDS Account No. _______________________________________________________ of (Address) ______________________________________________________________

______________________________________________________________________________________________________________________________________________________

being a member of DIGI.COM BERHAD hereby appoint (Name in full) : ___________________________________________________________________________

NRIC No. (New and Old NRIC No.)___________________________________________ of (Address) ______________________________________________________________

______________________________________________________________________________________________________________________________________________________

or failing him/her (Name in full) ____________________________________________ NRIC No. (New and Old NRIC No.)__________________________________________

of (Address) _________________________________________________________________________________________________________________________________________

or the *Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Twentieth Annual General Meeting of the
Company to be held at Nexus Ballroom 2 & 3, Connexion @ Nexus, No. 7, Jalan Kerinchi, Bangsar South City, 59200 Kuala Lumpur, Malaysia
on Tuesday, 9 May 2017 at 10.00 a.m. or any adjournment thereof.

This proxy is to vote on the resolutions set out in the Notice of the Meeting, as indicated with an 'X' in the appropriate spaces below. If no
specific direction as to voting is given, the proxy will vote or abstain from voting at his/her discretion.

*Please delete the words “Chairman of the Meeting” if you wish to appoint some other person to be your proxy.

ORDINARY RESOLUTIONS FOR AGAINST


RESOLUTION 1 – To re-elect Tan Sri Saw Choo Boon as Director
RESOLUTION 2 – To re-elect Puan Yasmin Binti Aladad Khan as Director
RESOLUTION 3 – To approve the payment of Directors’ fees and benefits payable to the Directors
RESOLUTION 4 – To re-appoint Messrs Ernst & Young as Auditors of the Company and authorise the
Directors to fix their remuneration
RESOLUTION 5 – To approve the Proposed Renewal of Existing Shareholders’ Mandate, and Proposed New
Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading
Nature, to be entered with Telenor ASA (Telenor) and Persons Connected with Telenor
SPECIAL RESOLUTION
To approve the Proposed Amendments to the Articles of Association of the Company

For appointment of two proxies, percentage of shareholdings to be represented


by the proxies: No. of Shares
No. of Shares Percentage
Proxy 1 %
Proxy 2 %
Total 100%

Signature of Shareholder(s) or Common Seal Tel. No.

Signed this day of , 2017.

Notes:
1. A member entitled to attend and vote at a general meeting of the Company 3. The instrument appointing a proxy, shall be in writing under the hand of
is entitled to appoint a proxy to attend, speak and vote in his stead. Where the appointer or his attorney duly authorised in writing, and in the case of a
more than one proxy is appointed, the appointment shall not be valid unless corporation, either under its seal or under the hand of an officer or attorney
he specifies the shareholdings to be represented by each proxy. A proxy need duly authorised.
not be a member of the Company. 4. The instrument appointing a proxy together with the power of attorney (if
2. Where a member of the Company is an Exempt Authorised Nominee which any) or a certified copy thereof must be deposited at the Company’s Share
holds ordinary shares in the Company for multiple beneficial owners in Registrar Office at Unit 32-01, Level 32, Tower A, Vertical Business Suite,
one securities account (omnibus account) as defined under the Securities Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur,
Industry (Central Depositories) Act 1991, there shall be no limit to the Malaysia at least twenty-four (24) hours before the time appointed for the
number of proxies which the Exempt Authorised Nominee may appoint in holding of the meeting.
respect of each omnibus account it holds.
Personal Data Privacy:
By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of Annual
General Meeting dated 10 April 2017.
Please fold here to seal.

Affix
Stamp
Here

Share Registrars
TRICOR INVESTOR & ISSUING HOUSE SERVICES SDN BHD
Unit 32-01, Level 32, Tower A
Vertical Business Suite, Avenue 3, Bangsar South
No. 8, Jalan Kerinchi
59200 Kuala Lumpur
Malaysia

Please fold here to seal.


Inspiring Your Digital Life Annual Report 2016 153

Independent Limited Assurance Statement

Scope of our work

Digi.Com Berhad’s wholly owned subsidiary, Digi Telecommunications Sdn Bhd, has engaged Deloitte PLT (LLP0010145-LCA) (we
or us) to perform limited assurance procedures on selected subject matter (the Subject Matter) for the year ended December 31,
2016 presented in the Sustainability section of the Annual Report 2016 (the Sustainability Report) in accordance with the reporting
criteria (the Criteria).

Subject Matter

The selected Subject Matter chosen by Digi comprises:

Subject Matter/ Selected Performance Data Criteria Page No.

a. Climate & Environment

• Energy consumption within the organization GRI G4-EN3 Climate Change and Environment (Page 41)

• Scope 1 CO2 emissions GRI G4-EN15 Climate Change and Environment


(Page 41 and 42)

• Scope 2 CO2 emissions GRI G4-EN16 Climate Change and Environment


(Page 41 and 42)

• Scope 3 CO2 emissions GRI G4-EN17 Climate Change and Environment


(Page 41 and 42)

b. Winning Team

• Lost time injury frequency (LTIF) GRI G4-LA6 Internalising Safety (Page 38)

• Training hours recorded by HR GRI G4-LA9 Freedom to Learn (Page 41)

Criteria

The selected Subject Matter above included in the Sustainability section of the annual report 2016 has been assessed according to the
reporting principle prepared by Digi which is in accordance with the Global Reporting Initiative’s (GRI) G4 “in accordance” option (Core).

ADDITIONAL INFORMATION
154 Annual Report 2016 Digi.Com Berhad

Independent Limited Assurance Statement

Basis of our work and level of assurance

We carried out limited assurance in accordance with International Standard for Assurance Engagements 3000 (revised) Assurance
Engagements Other Than Audits or Reviews of Historical Financial Information (ISAE 3000). A limited assurance engagement consists
of making enquiries and applying analytical, controls testing, and other evidence gathering procedures that are sufficient for us to
obtain a meaningful level of assurance. The procedures performed depend on the assurance practitioner’s judgement including the
risk of material misstatement of the specific activity data, whether due to fraud or error. While we considered the effectiveness of
Management’s internal controls when determining the nature and extent of our procedures, our review was not designed to provide a
basis for our conclusion.

The procedures performed in a limited assurance engagement vary in nature, and are less in extent than for a reasonable assurance
engagement. As a result, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that
would have been obtained had we performed a reasonable assurance engagement.

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued
by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity,
professional standards and due care, confidentiality and professional behaviour.

The firm applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control
including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable
legal and regulatory requirements.

Key assurance procedures

Considering the risk of material error, we planned and performed the work to obtain all the information and explanations considered
necessary to provide sufficient evidence to support our assurance conclusion.

Our assurance procedures included, but were not limited to:

• Gaining an understanding of Digi’s business and approach to sustainability.


• Visiting to Digi’s head offices.
• Interviewing management at Digi’s head office, including the Sustainability Team to understand:
a. The process for stakeholder engagement across the organization;
b. The process for determining material issues and reporting against them; and
c. The activities relating to the sustainability priorities during the reporting period.
• Conducting limited assurance procedures for the eight sustainability performance indicators by:
a. Checking that methodologies have been correctly applied;
b. Performing analytical review procedures to support the reasonableness of the data;
c. Performing testing of selected data on sampling basis;
d. Identifying and testing assumptions supporting calculations; and
e. Assessing the reliability of specific sustainability performance information.
• Checking the Report against the GRI G4 “In accordance with Core” Guidelines.
Inspiring Your Digital Life Annual Report 2016 155

Independent Limited Assurance Statement

Inherent limitation

Inherent limitation exists in all assurance engagements due to the selective testing of the information being examined. Therefore, fraud,
errors and non-compliance may occur and not be detected. Additionally, non-financial data may be subject to more inherent limitations
than financial data, given both its nature and the methods used for determining, calculating and estimating such data.

Management’s responsibilities

The management of Digi (Management) is responsible for the collection, preparation and presentation of the Subject Matter in the
Report in accordance with the above Criteria, and for maintaining adequate records and internal controls that are designed to support
the sustainability reporting process.

Our responsibilities

Our responsibility is to express a limited assurance conclusion as to whether the subject matter is presented in accordance with the
criteria. Our assurance engagement has been planned and performed in accordance with the ISAE 3000.

Limitation of use

Our review was limited to the information on the select subject matter set out within the Digi Sustainability Report 2016. We do not
therefore accept or assume any responsibility for any other purpose of to any other person or organisation. Any reliance that any such
third party may place on the Report is entirely at its own risk. No statement is made as to whether the criteria are appropriate for any
third party purpose.

Our assurance opinion

Based on the work described above, nothing has come to our attention that causes us to believe that the selected Subject matter for the
year ended December 31, 2016 included in the Sustainability section of the annual report 2016 has not been prepared, in all material
respects, in accordance with the Criteria.

Deloitte PLT (LLP0010145-LCA)

Kuala Lumpur, Malaysia


27 March 2017 ADDITIONAL INFORMATION
156 Annual Report 2016 Digi.Com Berhad

Corporate Information

BOARD OF DIRECTORS REMUNERATION COMMITTEE

Morten Karlsen Sorby Morten Karlsen Sorby


Chairman Chairman/Non-Independent Non-Executive Director

Tan Sri Saw Choo Boon Tore Johnsen


Non-Independent Non-Executive Director
Tore Johnsen
Director and Alternate Director to Morten Karlsen Sorby Lars-Ake Valdemar Norling
Non-Independent Non-Executive Director
Yasmin Binti Aladad Khan (Appointed on 4 January 2016)

Vimala A/P V.R. Menon


SECRETARIES
Lars-Ake Valdemar Norling
Choo Mun Lai (MAICSA No. 7039980)
Kristin Muri Moller
(Appointed on 4 February 2016) Tai Yit Chan (MAICSA No. 7009143)

AUDIT & RISK COMMITTEE DOMICILE AND COUNTRY OF INCORPORATION

Tan Sri Saw Choo Boon Malaysia


Chairman/Independent Non-Executive Director

Vimala A/P V.R. Menon REGISTERED OFFICE


Independent Non-Executive Director
Lot 6.05, Level 6, KPMG Tower
Tore Johnsen 8 First Avenue, Bandar Utama
Non-Independent Non-Executive Director 47800 Petaling Jaya
Selangor Darul Ehsan
Malaysia
NOMINATION COMMITTEE Tel : 03-7720 1188
Fax : 03-7720 1111
Yasmin Binti Aladad Khan E-mail : Boardroom-KL@boardroomlimited.com
Chairman/Independent Non-Executive Director Web : www.boardroomlimited.com

Tan Sri Saw Choo Boon


Independent Non-Executive Director SHARE REGISTRARS

Lars-Ake Valdemar Norling Tricor Investor & Issuing House Services Sdn Bhd
Non-Independent Non-Executive Director Unit 32-01, Level 32, Tower A
(Appointed on 4 January 2016) Vertical Business Suite, Avenue 3, Bangsar South
No. 8, Jalan Kerinchi
59200 Kuala Lumpur
Malaysia
Tel : 03-2783 9299
Fax : 03-2783 9222
E-mail : is.enquiry@my.tricorglobal.com
Web : www.tricorglobal.com
Inspiring Your Digital Life Annual Report 2016 157

Corporate Information

AUDITORS PRINCIPAL BANKERS

Messrs Ernst & Young CIMB Bank Berhad


Chartered Accountants Sumitomo Mitsui Banking Corporation Malaysia Berhad
Level 23A, Menara Milenium Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad
Jalan Damanlela, Pusat Bandar Damansara RHB Bank Berhad
50490 Kuala Lumpur Standard Chartered Bank Malaysia Berhad
Malaysia OCBC Bank (Malaysia) Berhad
Tel : 03-7495 8000
Fax : 03-2095 5332

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad


Listed on : 18 December 1997
Stock Name : DIGI
Stock Code : 6947

Corporate Structure
100%
Y3llownation
Sdn Bhd
(formerly known as Pay By
Mobile Sdn Bhd)
(Company No. 846253-D)

Digi.Com 100%
Y3llowlabs
Berhad Sdn Bhd
(Company No. 425190-X) (formerly known as DJuice.

100% Com Sdn Bhd)


(Company No. 535203-H)
ADDITIONAL INFORMATION

Digi
Telecommunications
Sdn Bhd
(Company No. 201283-M) 100%
Digi Services
Sdn Bhd
(Company No. 243889-T)
158 Annual Report 2016 Digi.Com Berhad

Corporate Directory

PRINCIPAL PLACE OF BUSINESS/ DIGI STORES Negeri Sembilan Kelantan


HEAD OFFICE Seremban Kota Bharu
Kuala Lumpur No.62A, Jalan Tuanku Munawir, S/16, PT 232,
D’House, Lot 10, Jalan Delima 1/1, Gardens 70000 Seremban, N.Sembilan Lot 1A, Jalan Hamzah,
Subang Hi-Tech Industrial Park, S-233, 2nd Floor, Gardens Mall, 15050 Kota Bharu, Kelantan
40000 Subang Jaya, Selangor Mid Valley City, Lingkaran Syed Putra, Johor
Tel : 03-5721 1800 59200 Kuala Lumpur Taman Molek Terengganu
Fax : 03-5721 1857 6 & 8, Jalan Molek 1/12, Kuala Terenganu
Bangsar Taman Molek, Lot PT3937, Jalan Sultan Sulaiman,
CENTRAL OPERATING OFFICE Lot F122, 1st Floor, 81100 Johor Bahru, Johor 20000 Kuala Terengganu, Terengganu
Bangsar Shopping Centre,
Lot 43, Jalan Delima 1/1, 285, Jalan Maarof, Bukit Bandaraya, Danga Bay Sabah
Subang Hi-Tech Industrial Park, 59000 Kuala Lumpur Blockk 6, G-35, Danga Walk, Api-Api
40000 Subang Jaya, Selangor Batu 4-1/2, Jalan Skudai, Lot 5/G3, Ground & First Floor,
Tel : 03-5721 1800 Setapak Central 80200 Johor Bahru, Johor Api-Api Centre,
Fax : 03-5721 1857 G49, No. 67, Jalan Taman Ibu Kota, 88000 Kota Kinabalu, Sabah
Taman Danau Kota, Setapak, Batu Pahat
REGIONAL OPERATING OFFICES 53300 Kuala Lumpur No. 1-1D, Jalan Zabedah, 1-Borneo
83000 Batu Pahat, Johor Lot G612, 1 Borneo Hypermall,
Northern Region Selangor Jalan Sulaman,
1-03-18, E-Gate Commercial Centre, Klang Penang 88450 Kota Kinabalu, Sabah
Lebuh Tunku Kudin 2, Lot B-G-8, BBT One, Pulau Tikus
11700 Gelugor, Penang Lebuh Batu Nilam 2, 368-1-02, Jalan Burmah, Sarawak
Tel : 04-248 6000 Bandar Bukit Tinggi, 10350 Pulau Tikus, Penang Kuching
Fax : 04-248 6001 41200 Klang, Selangor Lot 506-507, Section 6 KTLD,
Seberang Jaya Jalan Kulas Tengah,
Ipoh Sales Office SS2 8, Ground Floor, Jalan Todak Dua, 93400 Kuching, Sarawak
C-G-2, Persiaran Greentown 3, 24, Jalan SS2/66, Pusat Bandar, Bandar Seberang Jaya,
Greentown Business Centre, 47300 Petaling Jaya, Selangor 13700 Prai, Penang Miri
30450 Ipoh, Perak Lot 2037, Jalan Datuk Temenggong,
Tel : 05-242 1616 Sunway Pyramid Bayan Baru Oyong Lawai,
Fax : 05-242 3800 Lot LG2.69, Lower Ground 2, 8, Ground Floor, Jalan Todak Dua, Marina Square Phase 1,
Sunway Pyramid Shopping Mall, 1B-G-08 & 1B-G-09, Ground Floor, 98000 Miri, Sarawak
Southern Region No. 3, Jalan PJS 11/15, Bandar Sunway, One Precinct, Lengkok Mayang Pasir,
6 & 8, Jalan Molek 1/12, 46150 Petaling Jaya, Selangor 11950 Bayan Baru, Penang Bintulu
Taman Molek, Lot 18 & 19, Parent Lot 7668,
81100 Johor Bahru, Johor Ampang Kedah Blk 31, Kemena Land District,
Tel : 07-351 1800 No. 86G, Lorong Mamanda 1, Alor Setar 97000 Bintulu
Fax : 07-352 8016 Ampang Point, No. 2 & 3, Kompleks Perniagaan Pintu,
68000 Selangor 10, Jalan Pintu Sepuluh, Sibu
Eastern Region 05100 Alor Setar, Kedah No. 17 & 19, Ground Floor,
Lot 112 & 113, Alamanda Jalan Tong Sang,
Lorong Industri Semambu 7, Lot LG08, Lower Ground Floor, Perak Off Jalan Wong King Huo,
Semambu Industrial Estate, Alamanda Putrajaya Shopping Centre, Ipoh 96000 Sibu
25350 Kuantan, Pahang Jln Alamanda, Precinct 1, Lot C-01-04, No. 2, Ground Floor,
Fax : 09-508 0016 62000 Putrajaya Persiaran Greentown 3,
Greentown Business Centre,
Sabah Region KLIA 30450 Ipoh, Perak
4th Floor, Lot 10, Block B, Lot L2-75, Terminal KLIA2,
Warisan Square, KL International Airport, Jalan Klia 2/1, De Gardens
Jalan Tun Fuad Stephens, 64000 KLIA Sepang, Selangor DGR-1A, Ground Floor,
88000 Kota Kinabalu, Sabah No.1, Persiaran Medan Ipoh,
Tel : 088-251 016 Cheras Medan Ipoh,
Fax : 088-262 016 No. 3-G, Jalan C180/1, 31400 Ipoh, Perak
Dataran C180,
Sarawak Region 43200 Cheras, Selangor Pahang
Level 21, Gateway Kuching, Kuantan
No. 9, Jalan Bukit Mata, Melaka No. 91, Jalan Tun Ismail,
93100 Kuching, Sarawak Melaka 25000 Kuantan, Pahang
Tel : 082-421 800 No. 2, Jalan Plaza Merdeka,
Fax : 082-427 597 Plaza Merdeka,
75000 Melaka
082 Annual Report 2016 Digi.Com Berhad

Digi.Com Berhad (425190-x)


Lot 10, Jalan Delima 1/1,
Subang Hi-Tech Industrial Park,
40000 Subang Jaya,
Selangor, Malaysia
Email: Investor_Relations@digi.com.my
Printed on Environmental Friendly Paper.

You might also like