DiGi Telecommunications Sdn Bhd 201283-M T (603) 5721 1800Lot 30 Jalan Delima 1/3 F (603) 5721 1857Subang Hi-Tech Industrial Park E [email protected] Shah AlamSelangor Darul EhsanMalaysia
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D i G i . C O M B E R H A D 4 2 5 1 9 0 - X
A N N U A L R E P O R T 2 0 0 4 L A P O R A N T A H U N A N
DiGi AR 04 Cover 08/04/05 4:35hin Page 1
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 117
COVER RATIONALE
The cover reflects DiGi’s efforts to create meaningful connections between communities and their
rich texture of culture and heritage. This is captured in the traditional ikat design with its motifs
of interlinked people and buildings.
Our Aspiration.. .
To be the mobile communications leader in
creating experiences with a difference for our
customers and business partners through our
passion for success.”
Our Key Principles.. .
We have a passion for our customers
We value ideas and encourage initiative
We emphasise mutual trust and respect
We believe in the power of teamwork
We build partnerships for success
‘‘ Perak
IpohLot C-01-04 No 2 Ground FloorPersiaran Greentown 3Greentown Business Centre30450 Ipoh, Perak
Negeri Sembilan
Seremban301, Taman AST70200 SerembanNegeri Sembilan
Sabah
Kota KinabaluLot 5/G3, Ground & 1st FloorsApi-Api Centre88000 Kota Kinabalu, Sabah
Sarawak
KuchingLot 2087, Block 10Bangunan Kueh Boon TeckJalan Tun Ahmad Zaidi Adruce93150 Kuching, Sarawak
MiriLot 938, Ground & 1st FloorsJalan POS, 98000 MiriSarawak
Sibu13, Ground & 1st FloorsLorong Kampung Datu 396000 Sibu, Sarawak
24-hour DiGi customer service line: 016-221 1800
DiGi.Com Berhad (425190-X)Lot 30, Jalan Delima 1/3Subang Hi-Tech Industrial Park40000 Shah Alam, Selangor
Mailing Address:P. O. Box 755140718 Shah Alam, SelangorTel: 03-5721 1800Fax: 03-5721 1857www.digi.com.my
Pahang
KuantanLot G22B & G23 (ll)Ground Floor, Berjaya MegamallJalan Tun Ismail25000 Kuantan
Penang
Pulau Tikus368-1-02, Jalan Burmah10350 Pulau TikusPulau Pinang
Seberang Jaya8, Ground FloorJalan Todak DuaPusat BandarBandar Seberang Jaya13700 Prai, Pulau Pinang
Beach Street29A Beach Street10200 Penang
Melaka
Melaka523, Taman Melaka Raya75000 Melaka
Johor
Johor Bahru6 & 8, Jalan Molek 1/12Taman Molek81100 Johor Bahru, Johor
Jalan Tun Abdul Razak64, Jalan Tun Abdul RazakSusur 180000 Johor Bahru, Johor
Batu Pahat37, Jalan KundangTaman Bukit Pasir83100 Batu Pahat, Johor
List of Operating Offices
Principal Place ofBusiness/Head Office
Lot 30, Jalan Delima 1/3Subang Hi-Tech Industrial Park40000 Shah Alam, SelangorTel: 03-5721 1800Fax: 03-5721 1857
Central OperatingOffices
Lot 5, Jalan Pemaju U1/15Hicom Glenmarie Industrial Park40150 Shah Alam, SelangorTel: 03-5721 1800Fax: 03-5721 1857
Lots 7 & 8, Jalan Delima 1/1Subang Hi-Tech Industrial Park40000 Shah Alam, SelangorTel: 03-5721 1800Fax: 03-5721 1857
Lots 28 & 29, Jalan Delima 1/3Subang Hi-Tech Industrial Park40000 Shah Alam, SelangorTel: 03-5721 1800Fax: 03-5721 1857
Regional OperatingOffices
Northern Region
62, 1st Floor, Jalan MayangPasir 1Off Jalan Mahsuri11950 Bayan Baru Pulau PinangTel: 04-641 2800Fax: 04-641 3800
Ipoh Sales OfficeC-G-2 Persiaran Greentown 3Greentown Business Centre 30450 Ipoh, Perak
Southern Region
6 & 8, Jalan Molek 1/12Taman Molek81100 Johor Bahru, JohorTel: 07-351 1800Fax: 07-352 8016
Eastern Region
3, Jalan Tun Ismail25000 Kuantan, PahangTel: 09-508 0071Fax: 09-508 0070
Sabah Region
Lot 36, Sedco Light Industrial EstateJalan Kilang, Kolombong, Inanam88450 Kota Kinabalu, SabahTel: 088-431 800Fax: 088-430 016
Sarawak Region
Lot 2087, Block 10, Bangunan Kueh Boon TeckJalan Tun Ahmad Zaidi Adruce93150 Kuching, SarawakTel: 082-421 800Fax: 082-427 597
DiGi Centres
Selangor
USJSubang Taipan, 19 & 21Jalan USJ 10/1A, Subang Jaya47610 Petaling Jaya, Selangor
SS224, Jalan SS2/6647300 Petaling Jaya, Selangor
Selayang Baru57, Jalan 2/3A, Pasar Borong SelayangOff Jalan Ipoh68100 Batu Caves, Selangor
Klang35 & 37Persiaran Sultan Ibrahim41300 Klang, Selangor
Kuala Lumpur
Pandan IndahM5A/13, Jalan Pandan Indah 4/1Taman Pandan Indah55100 Kuala Lumpur
KL PlazaLot G33-8, Ground Floor,179, KL PlazaJalan Bukit Bintang55100 Kuala Lumpur
Berjaya Times Square01-36, Berjaya Times Square, 1, Jalan Imbi ,55100 Kuala Lumpur
Corporate Directory
DiGi AR 04 Back Cover 08/04/05 4:35hin Page 1
04 DiGi in 2004
06 Corporate Information
08 Directors’ Profiles
14 Statement on Corporate Governance
20 Statement on Internal Control
23 Other Compliance Information
24 Audit Committee Report
28 Management Team
32 Group Financial Summary
38 Chairman’s Statement
46 CEO’s Statement
58 Corporate Social Responsibility
64 Financial Statements
102 List of Properties
104 Disclosure of Recurrent Related Party Transactions
106 Statement of Directors’ Shareholdings
107 Statistics on Shareholdings
109 Notice of Annual General Meeting
115 Form of Proxy
117 Corporate Directory
DiGi AR 04 08/04/05 4:11hin Page 1
Lion dancing goes back at least
2,000 years to a time of active
trade between West Asia and
China. As a mark of goodwill,
Persian ambassadors would make
gifts of exotic animals to the
Chinese Emperor. Among these
were lions. The regal beasts soon
acquired the reputation of being
able to ward off evil, and the lion
dance captures this belief. Lion
dancing came to Malaysia with
Chinese immigrants hundreds of
years ago.
In January 2005, DiGi unveiled a new phase of its
Corporate Social Responsibility programme, called
DiGi’s Amazing Malaysians. The programme aims to
increase awareness of, and preserve, the nation’s
natural, cultural, art, built and social heritage.
DiGi AR 04 08/04/05 4:11hin Page 2
DiGi is launching The Lion Dancer of Johor project in the third quarter, 2005
DiGi AR 04 08/04/05 4:11hin Page 3
Q1
DiGi.Com Berhad (DiGi) starts the year
with the launch of an innovative product
targeted at business and corporate
customers. discover™ business solutions,
introduced on January 2, comprises two
simple and convenient plans. Under
discover prime™, customers enjoy a flat
rate of RM0.20 per minute for calls to
mobile and fixed line numbers within
Malaysia, with a monthly RM50 fee.
discover classic™ offers a flat rate of
RM0.25 for calls and RM30 monthly fee.
In addition, both plans offer a 30%
discount on IDD and 016 calls. Itemised
billing is provided alongside SMS,
Voicemail, IDD, GPRS and WAP data.
Q2
DiGi makes national headlines on May
14 as the first operator to offer EDGE,
a high-speed mobile network, in the
Klang Valley. With browsing speeds of
up to 384 kbps, charged at GPRS rates,
customers can access large data files
from the Internet and other sources on
their mobiles.
On April 23, DiGi launches the
Online Prepaid Statement, which gives
prepaid customers the flexibility of
viewing their call details online. Another
innovation for prepaid customers is rolled
out on June 29, with RM10 reload
coupons with five-day validity.
In May, DiGi embarks on a nationwide
No One Covers You Like DiGi campaign to
inform customers of improved coverage
in most of populated Malaysia.
4 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
DiGi in 2004
DiGi AR 04 08/04/05 4:11hin Page 4
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 5
Q3
Morten Lundal is appointed DiGi’s new
Chief Executive Officer on July 26,
replacing Tore Johnsen who is to head
Telenor’s mobile operation in Pakistan.
Riding on EDGE, DiGi introduces on
August 19 a first in Malaysia —MobileTV™
— in partnership with ntv7. The service
offers 24-hour live TV over EDGE-
enabled handsets. On the same day,
DiGi launches the Automatic Balance
Notification, allowing customers to
check their credit balance, account
status and tariff plan; perform reloads;
manage their Friends and Family™
numbers; and check the list of roaming
countries via a USSD menu browser.
Q4
This is a quarter of hellos and goodbyes.
On October 26, DiGi bids adieu to Erik
Aas, former Head of Mobile, who leaves
the company to take up his new position
as CEO of Grameenphone, Bangladesh;
while on November 15, we welcome
Johan Dennelind into our fold as Chief
Financial Officer. A restructuring of
the company takes place on October
28, in which the business divisions are
integrated into five main areas:
Technology, Marketing, Finance, Human
Resources and Corporate Affairs.
Meanwhile, on October 29, two
revolutionary prepaid products are
launched: Flexi e-Load™ and Talktime
Transfer™. Flexi e-Load™ gives customers
the flexibility, simplicity and convenience
to reload their prepaid accounts
electronically by any amount equivalent
to RM5 and above.
Talktime Transfer™ enables
customers to transfer talktime from one
to another.
DiGi AR 04 08/04/05 4:11hin Page 5
Board of Directors
Arve Johansen Chairman
Tun Dato’ Seri Dr Lim Chong EuDato’ Ab. Halim Bin MohyiddinGunnar Johan BertelsenChristian Storm Also Alternate Director to Arve Johansen
Ragnar Holmen Korsaeth
Audit Committee
Dato’ Ab. Halim Bin Mohyiddin Chairman/Independent Non-Executive Director
Tun Dato’ Seri Dr Lim Chong Eu Independent Non-Executive Director
Christian Storm Non-Independent Non-Executive Director
Nomination Committee
Christian Storm Chairman/Non-Independent Non-Executive Director
Tun Dato’ Seri Dr Lim Chong Eu Independent Non-Executive Director
Dato’ Ab. Halim Bin Mohyiddin Independent Non-Executive Director
Remuneration Committee
Arve Johansen Chairman/Non-Independent Non-Executive Director
Christian Storm Non-Independent Non-Executive Director
Ragnar Holmen Korsaeth Non-Independent Non-Executive Director
Secretaries
Tai Yit Chan MAICSA No. 7009143
Liew Irene MAICSA No. 7022609
Domicile and Country of Incorporation
Malaysia
Corporate Information
6 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
DiGi AR 04 08/04/05 4:11hin Page 6
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 7
Registered Office
Level 7, Setia 115 Lorong DungunDamansara Heights50490 Kuala Lumpur
T. 03-2095 7188F. 03-2093 6325
Share Registrars
Berjaya Registration Services Sdn BhdLot C1-C3, Block C2nd Floor, KL Plaza179 Jalan Bukit Bintang55100 Kuala Lumpur
T. 03-2145 0533F. 03-2145 9702
Principal Bankers
Affin Bank BerhadAmMerchant Bank BerhadBanca Intesa S.p.A., Hong Kong BranchBank of America N.A., Labuan BranchBumiputra-Commerce Bank BerhadCALYON, Labuan BranchEON Bank BerhadFortis Bank S.A./N.V., SingaporeMalayan Banking BerhadNatexis Banques Populaires, Labuan BranchNordea Bank Sweden AB (publ)OCBC Bank (Malaysia) BerhadRHB Bank BerhadSociété Générale, Labuan BranchSvenska Handelsbanken AB (publ), SwedenThe Bank of East Asia, Limited Labuan BranchThe Bank of Nova Scotia BerhadThe Bank of Nova Scotia, Labuan Branch
Auditors
Messrs KPMGChartered AccountantsWisma KPMG Jalan DungunDamansara Heights50490 Kuala Lumpur
Stock Exchange Listing
Main Board of Bursa MalaysiaSecurities Berhad
Stock Short Name
DiGi (6947)
DiGi AR 04 08/04/05 4:11hin Page 7
8 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Directors’ Profiles
He was appointed to the Board as Deputy
Chairman on 20 January 2000 and was
subsequently appointed as Chairman
of the Board on 12 January 2005. He
holds a Master of Science in Electrical
Engineering (Telecommunications) from
the Norwegian Institute of Technology
in Trondheim, Norway and has taken
part in a programme for Management
Development at the Harvard Business
School in Boston, USA.
He has served as Senior Executive
Vice President of Telenor since 1999
and as Chief Executive Officer (CEO) of
Telenor Mobile Communications AS since
January 2000. He joined Telenor in 1989
and has held a number of positions,
including President and CEO of Telenor
Arve Johansen
Chairman
Non-Independent Non-Executive Director
Chairman of the Remuneration Committee
55 years of age, Norwegian
International AS. Prior to this, he was
Executive Vice President of Elektrisk
Bureau Telecom (Ericsson of Norway),
and a Research Engineer at the
Norwegian Institute of Technology
(ELAB).
Currently, he is the Chairman and
Director of several companies in USA,
Thailand, Greece and Norway. He also
sits on the Boards of Telenor Asia Pte Ltd
and DiGi Telecommunications Sdn Bhd.
DiGi AR 04 08/04/05 4:11hin Page 8
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 9
Dato’ Ab. Halim Bin Mohyiddin
Independent Non-Executive Director
Chairman of the Audit Committee
Member of the Nomination Committee
59 years of age, Malaysian
He was appointed to the Board on 23
November 2001. He holds a Bachelor
of Economics in Accounting from
University of Malaya and a Master in
Business Administration from University
of Alberta, Canada.
He was a lecturer at Universiti
Kebangsaan Malaysia from 1973 to
1978. He joined Messrs Peat Marwick
Mitchell (now known as KPMG) in 1977
and was admitted as a Partner in 1985.
Prior to his retirement on 1 October
2001, he was the Partner in charge of
the Assurance and Financial Advisory
Services Divisions.
He is currently the President of the
Malaysian Institute of Certified Public
Accountants (MICPA), a council member
of the Malaysian Institute of Accountants
(MIA) and a Fellow of the Malaysian
Institute of Taxation. Internationally, he
is a member of the Education Committee
of the International Federation of
Accountants (IFAC).
He also sits on the Boards of
HeiTech Padu Berhad, Arab-Malaysian
Corporation Bhd, Utusan Melayu
(Malaysia) Berhad, MCM Technologies
Berhad, Kumpulan Perangsang Selangor
Berhad, Idris Hydraulic (Malaysia) Bhd,
Amway (Malaysia) Holdings Berhad,
Idaman Unggul Berhad, KNM Group
Berhad and Bank Pembangunan &
Infrastruktur Malaysia Berhad.
DiGi AR 04 08/04/05 4:11hin Page 9
Directors’ Profiles (continued)
10 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Gunnar Johan Bertelsen
Non-Independent Non-Executive Director
48 years of age, Norwegian
He was appointed to the Board on 18
February 2004. Prior to his appointment
to the Board, he was an Alternate
Director for the period from November
2000 to February 2004. He graduated
with a Diploma in Advanced
Management from University College
Dublin, Ireland. He also holds a Masters
Degree in Business Administration from
University College Dublin, Ireland.
Currently, he is also the Project
Director of Telenor Asia Pte Ltd and a
Director of DiGi Telecommunications
Sdn Bhd.
He was appointed to the Board on
1 October 1997. He graduated with a
Bachelor of Medicine and a Bachelor of
Surgery (M.B.Ch.B) from the Edinburgh
University, Scotland in 1944. He was
the Chief Minister of Penang from 1969
to 1990 and the Chairman of Penang
Development Corporation.
He was conferred the Darjah
Utama Pangkuan Negeri (D.U.P.N.)
by the Tuan Yang Terutama (TYT)
Governor of Penang; the Seri Setia
Mahkota Malaysia (S.S.M.) by the Yang
Di-Pertuan Agong; the Datuk Amar
Bintang Kenyalang (DA) by the TYT
Governor of Sarawak; the Grand Cross
2nd Class Award by His Excellency the
President of Germany; and the Order
of the Rising Sun, Gold and Silver Star
by His Majesty, the Emperor Akihito of
Japan.
He is currently the Chairman of
Chin Well Holdings Berhad, Suiwah
Corporation Berhad and Berjaya
Vacation Club Berhad. He also sits on
the Boards of Southern Steel Berhad
and United Overseas Bank (Malaysia)
Berhad.
Tun Dato’ Seri Dr Lim Chong Eu
Independent Non-Executive Director
Member of the Audit Committee
Member of the Nomination Committee
85 years of age, Malaysian
DiGi AR 04 08/04/05 4:11hin Page 10
Ragnar Holmen Korsaeth
Non-Independent Non-Executive Director
Member of the Remuneration Committee
39 years of age, Norwegian
He was appointed to the Board on
10 November 2004. He holds a Master
of Science in Finance and Certified
Financial Analyst (CFA) from the
Norwegian School of Business
Administration.
He served as Chief Financial Officer
in Telenor International and Telenor
Mobile from 1999 to 2004.
Currently, he is also the Chief
Operating Officer of Telenor Mobile and
a Director of DiGi Telecommunications
Sdn Bhd.
Save as disclosed, none of the Directors have any:-
1. Family relationship with any Director and/or
major shareholders of the Company;
2. Conflict of interest with the Company; and
3. Conviction for offences within the past 10 years
other than traffic offences.
The details of attendance of each Director at
Board Meetings are set out on page 14 of the
Annual Report.
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 11
He was appointed as a Director of the
Company on 10 November 2004 and
as the Alternate Director to Mr Arve
Johansen on 23 February 2005. He
holds a Masters Degree in Business
Administration from University of
Wisconsin, Madison, USA and a
Bachelor of Science (Hons) Degree
from University of Leeds, UK. He has
served as an officer in Telenor ASA
since 2001 in the Corporate Treasury
department at the corporate headquarters
in Oslo, Norway.
Since 1 September 2004, he has
served as the Managing Director of
Telenor Asia Pte Ltd in Singapore. He is
both a Director as well as an Alternate
Director in DiGi Telecommunications
Sdn Bhd.
Christian Storm
Non-Independent Non-Executive Director
Chairman of the Nomination Committee
Member of the Audit Committee
Member of the Remuneration Committee
49 years of age, Norwegian
DiGi AR 04 08/04/05 4:14hin Page 11
Traditional architecture in Malaysia reflects the
country’s indigenous natural resources, while the
design motifs are influenced by the many cultures
that have settled in the country over the years or
at least stayed long enough to leave their imprint.
The traditional architects built homes that suited
the Malaysian environment, weather and lifestyle.
DiGi AR 04 08/04/05 4:14hin Page 12
DiGi is launching The Traditional Architect of Terengganu project in the second quarter, 2005Photo credit: Lim Jee Yuan, The Malay House
DiGi AR 04 08/04/05 4:14hin Page 13
The Board of Directors (“Board”) fully appreciates the importance of adopting high standards ofcorporate governance throughout the Group. The Board views corporate governance as synonymouswith three key concepts, namely transparency, accountability as well as corporate performance.
As such, the Board strives to adopt the substance behind corporate governance prescriptions and notmerely the form, with the aim of ensuring board effectiveness in enhancing shareholder value. TheBoard is thus fully committed to the maintenance of high standards of corporate governance bysupporting and implementing the prescriptions of the principles and best practices set out in Parts 1and 2 of the Malaysian Code on Corporate Governance (“Code”) respectively.
The following statement sets out how the Company has applied the key principles and the extent of itscompliance with the best practices throughout the financial year ended 31 December 2004.
A. Board of Directors
Board Responsibilities
The Board of Directors plays a primary role in corporate governance by setting out the strategicdirection of the Group, establishing goals, monitoring the achievement of the goals and ensuring a highdegree of transparency and accountability towards all stakeholders. The key responsibilities of theBoard are in tandem with the 6 principal responsibilities specified under Best Practice AAI of the Code.
Meetings
The Board met four (4) times during the financial year ended 31 December 2004.Details of each existing Director’s meeting attendances are as follows:
Name Attendance
Arve Johansen Non-Independent/Non-Executive 4/4Tun Dato’ Seri Dr Lim Chong Eu Independent/Non-Executive 4/4Dato’ Ab. Halim Bin Mohyiddin Independent/Non-Executive 3/4Gunnar Johan Bertelsen Non-Independent/Non-Executive (Appointed w.e.f. 18.02.2004) 3/3(Ceased as Alternate Director to Sigve Brekke and Ole Bjorn Sjulstad w.e.f. 18.02.2004)
Christian Storm Non-Independent/Non-Executive (Appointed w.e.f. 10.11.2004) 1/1Ragnar Holmen Korsaeth Non-Independent/Non-Executive (Appointed w.e.f. 10.11.2004) 1/1Tan Sri Dato’ Seri Vincent Tan Chee Yioun Non-Independent/Non-Executive (Resigned w.e.f. 12.01.2005) 4/4Ole Bjorn Sjulstad Non-Independent/Non-Executive (Resigned w.e.f. 10.11.2004) 3/3Per Olav Fosse Non-Independent/Non-Executive (Resigned w.e.f. 10.11.2004) 3/3Sigve Brekke Non-Independent/Non-Executive (Resigned on 18.02.2004) Not Applicable
Statement on Corporate Governance
14 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
DiGi AR 04 08/04/05 4:14hin Page 14
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 15
Two (2) out of the six (6) Board members are considered independent in accordance with the definitionprovided under paragraph 1.01 (Definition and Interpretations) of the Listing Requirements of BursaMalaysia Securities Berhad (“Bursa Securities”). As such, the Company fulfils the requirement to haveat least one third of the Board composed of Independent Non-Executive Directors.
Tun Dato’ Seri Dr Lim Chong Eu has been identified as the Senior Independent Non-Executive Directorof the Board to whom concerns may be conveyed.
Board Balance
The Board currently has six (6) members, comprising two (2) Independent Non-Executive Directors andfour (4) Non-Independent Non-Executive Directors. Together, the Directors bring a wide experiencerelevant to the direction of the Group. The Directors combine in them expertise and experience invarious fields such as telecommunications, economics and investment, public services and accounting.Their expertise, experience and background result in thorough examination and deliberations of thevarious issues and matters affecting the Group. A brief description of the background of each Directoris presented on pages 8 to 11 of the Annual Report.
There is a clear division of responsibility between the Chairman and the Chief Executive Officer (CEO)to ensure that there is a balance of power and authority. The Chairman is responsible for running theBoard and ensures that all Directors receive sufficient relevant information on financial and non-financial matters to enable them to participate actively in Board decisions. The CEO is responsible forthe day to day management of the business as well as implementation of Board’s policies and decisions.There is also balance in the Board because of the presence of Independent Non-Executive Directors ofthe calibre necessary to carry sufficient weight in Board decisions. Although all the Directors have anequal responsibility for the Group’s operations, the roles of these Independent Directors are particularlyimportant in ensuring that the strategies proposed by the executive management are fully discussedand examined and take into account the long term interest, not only of the shareholders, but also ofemployees, customers, suppliers, community and other stakeholders.
The Board is satisfied that the current Board composition fairly reflects the investment of minorityshareholders in the Company.
Supply of Information
The Chairman ensures that all Directors have full and timely access to information with Board papersdistributed in advance of meetings. Every Director has also unhindered access to the advice andservices of the Company Secretary and may obtain independent professional advice at the Company’sexpense in furtherance of their duties. Prior to the meetings of the Board, Board papers which includereports on group performance and major operational, financial, strategic and regulatory matters arecirculated to all the Directors. These Board papers are issued at least seven (7) days in advance toenable the Directors to obtain further explanation, where necessary, in order to be properly briefedbefore the meeting.
DiGi AR 04 08/04/05 4:14hin Page 15
In addition, there are matters reserved specifically for the Board’s decision, including the approval ofcorporate plans and budgets, acquisitions and disposals of assets that are material to the Group, majorinvestments, changes to control structure of the Group, including key policies and authority limits.
Appointments to the Board
The Nomination Committee currently comprises the following members:
Christian Storm Chairman Non-Independent/Non-ExecutiveTun Dato’ Seri Dr Lim Chong Eu Independent/Non-ExecutiveDato’ Ab. Halim Bin Mohyiddin Independent/Non-Executive
Christian Storm was appointed as a member/Chairman of the Nomination Committee with effect from10 November 2004 to replace Ole Bjorn Sjulstad who has resigned as a Director on the same date.
The committee is empowered by its terms of reference to perform the following primary functions:
a. Recommend new nominations to the Board;b. Recommend to the Board, Directors to fill the seats on Board Committees;c. Review annually the required mix of skills and experience and other qualities including core
competencies that the Non-Executive Directors should bring to the Board.
Directors’ Training
All Directors have attended and completed the Mandatory Accreditation Programme (MAP) conductedby the organiser approved by Bursa Securities except for Christian Storm and Ragnar Holmen Korsaethwho have sought extension of time to attend the MAP. The Directors will continue to undergo otherrelevant training programmes to further enhance their skills and knowledge in compliance with theBursa Securities’ Listing Requirements on Directors’ training.
Re-election
Any Director appointed during the year is required, under the Company’s Articles of Association, toretire and seek re-election by shareholders at the following annual general meeting. The Articles alsorequire that one-third of the Directors to retire by rotation each year and seek re-election at the annualgeneral meeting and every Director shall retire from office once at least every three years but shall beeligible for re-election. Directors over seventy (70) years of age are required to seek shareholders’approval for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965.
16 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Statement on Corporate Governance (continued)
DiGi AR 04 08/04/05 4:14hin Page 16
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 17
B.Directors’ Remuneration
Remuneration Committee
The Remuneration Committee currently comprises the following members:
Arve Johansen Chairman Non-Independent/Non-ExecutiveChristian Storm Non-Independent/Non-ExecutiveRagnar Holmen Korsaeth Non-Independent/Non-Executive
Christian Storm was appointed as a member of the Remuneration Committee with effect from 10November 2004 to replace Ole Bjorn Sjulstad who has resigned as a Director on the same date.
Ragnar Holmen Korsaeth was appointed as a member of the Remuneration Committee with effect from12 January 2005 to replace Tan Sri Dato’ Seri Vincent Tan Chee Yioun who has resigned as a Directoron the same date.
The primary function of the Remuneration Committee is to set up the policy framework and to makerecommendations to the Board on all elements of the remuneration package and other terms ofemployment of the executive directors. Non-Executive Directors’ remuneration will be a matter to bedecided by the Board as a whole with the Director concerned abstaining from deliberations and votingon decision in respect of his individual remuneration.
Details of the Directors’ Remuneration
The aggregate Directors’ remuneration paid or payable to all Directors of the Company by the Groupand categorized into appropriate components for the financial year ended 31 December 2004 are asfollows:
Allowances Bonus Other emolument Total
RM’000 RM’000 RM’000 RM’000
Non-Executive 220 174 38 432
The number of Directors of the Company whose total remuneration fall within the respective band areas follows:
Number of Non-Executive Directors
RM50,000 and below 2RM350,001 to RM400,000 1
3
DiGi AR 04 08/04/05 4:15hin Page 17
C.Shareholders
Dialogue between Company and Investors
The Company recognizes the importance of regular communication with investors in the Company, withthe annual report and financial statements, regular interim statements being the key media used.Enquiries by shareholders are dealt with as promptly as practicably possible. Shareholders, investorsand members of the public may also access the Company’s website to obtain information on theCompany.
The Annual General Meeting (“AGM”)
The key element of the Company’s dialogue with its shareholders is the opportunity to gather views ofand answer questions from, both private and institutional shareholders on all issues relevant to theCompany at the AGM. At the AGM, the shareholders are encouraged to ask questions both about theresolutions being proposed or about the Group’s operations in general. Where it is not possible toprovide immediate answers, the Chairman will undertake to furnish the shareholder with a writtenanswer after the AGM. The Chairman of the Board also addresses the shareholders on the review ofthe Group’s operations for the financial year and outlines the prospects of the Group for the subsequentfinancial year. The CEO and members of management are also present at the AGM to clarify and explainany issue.
D.Accountability and Audit
Financial Reporting
DiGi aims to provide a balanced and meaningful assessment of the Group’s financial performance andprospects primarily through the annual report, quarterly financial statements and analyst presentations.The Board is assisted by the Audit Committee in overseeing the Group’s financial reporting process andthe quality of its financial reporting.
18 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Statement on Corporate Governance (continued)
DiGi AR 04 08/04/05 4:15hin Page 18
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 19
Statement of Directors’ Responsibility in Respect of the Financial Statements
The Directors are required by the Companies Act, 1965 to prepare financial statements for eachfinancial year/period which have been made out in accordance with the applicable approved accountingstandards in Malaysia and give a true and fair view of the state of affairs of the Group and of theCompany and of the results and cash flows of the Group and of the Company for that year/period. Inpreparing those financial statements, the Directors have:
adopted suitable accounting policies and applied them consistently;
stated whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
made judgements and estimates that are reasonable and prudent; and
prepared the financial statements on the going concern basis unless it is inappropriate to presume
that the Company will continue in business.
The Directors are responsible for ensuring that the Company keeps proper accounting records whichdisclose with reasonable accuracy the financial position of the Group and of the Company and to enablethem to ensure that the financial statements comply with the Companies Act, 1965. The Directors arealso responsible for safeguarding the assets of the Group and hence for taking reasonable steps for theprevention and detection of fraud and other irregularities.
Internal Control
The Statement on Internal Control set out on pages 20 to 22 of the Annual Report provides an overviewon the state of internal controls within the Group.
Relationship with the Auditors
Key features underlying the relationship of the Audit Committee with the external auditors are includedin the Audit Committee’s terms of reference as detailed on pages 25 to 27 of the Annual Report. Asummary of the activities of the Audit Committee during the year, including the evaluation of theindependent audit process, are set out on page 24 of the Annual Report.
DiGi AR 04 08/04/05 4:15hin Page 19
Introduction
The Board of Directors (“Board”) is committed to maintaining a sound system of internal control in theGroup and is pleased to provide the following statement, which outlines the nature and scope of internalcontrol of the Group during the financial year.
Board Responsibility
The Board is ultimately responsible for the Group’s system of internal control which includes theestablishment of an appropriate control environment and framework as well as reviewing its adequacyand integrity.
The system of internal control covers, inter alia, risk management and financial, organizational,operational and compliance controls. Because of the limitations that are inherent in any system ofinternal control, this system is designed to manage, rather than eliminate, the risk of failure to achievethe Group’s objectives. Accordingly, it can only provide reasonable but not absolute assurance againstmaterial misstatement or loss, it is possible that internal controls can be circumvented or overridden.Furthermore, because of changing circumstances and conditions, the effectiveness of an internal controlsystem may vary over time.
Key Elements of the System of Internal Control
The following sets out the key elements of the system of internal control of the Group, which have beenin place throughout the financial year and up to the date of the Directors’ Report.
There is in place a clearly defined organizational structure within the Group with formally defined linesof responsibility and delegation of authority. A process of hierarchical reporting has been establishedwhich provides for a documented trail of accountability.
Significant changes in the business and the external environment are reported to the Board during theBoard meetings. Quarterly financial and other information are also provided to the Audit Committee andthe Board. This oversight review enables the Board to control and evaluate the business performanceso as to ensure that the Group is achieving its corporate objectives. The role of the Audit Committee inrespect of its review of the system of internal controls is described in the Audit Committee Reportincluded in this annual report.
There is also submission of monthly financial and operational information to the Operating Committee,that includes the monthly and year-to-date financial results and comparisons to the pre-determined keyperformance indicators. Based on this monitoring of results against budget, significant variances areidentified and management action taken, where necessary. The role of the Operating Committee wassubsequently empowered to the Chief Executive Officer (CEO) with the setting up of the new DiGiManagement Team (the composition comprised CEO and 4 members of management) and the saidcommittee was dissolved by the Board on 10 November 2004. In addition, an Investment Committeewas established in December 2004 with the aim to support the decision making process in connectionwith investments and divestment transactions in the Group.
Statement on Internal Control
20 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
DiGi AR 04 08/04/05 4:15hin Page 20
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 21
There is an annual budgeting and business plan process where the management would prepare budgetsfor the forthcoming financial year in which these are submitted to and approved by the Board.
Other control procedures include the establishment of appropriate limits of authority for the Board, theOperating Committee and senior management for appropriate approval of transactions. There areestablished policies on health and safety, employees training and development, staff performance andevaluation. These procedures are relevant across the Group’s operations and provide for continuousassurance to be given to management and, finally to the Board.
Enterprise Risk Management Framework
The risk management processes of the Group have been enhanced with the formation of a RiskManagement function, in July 2004, and a Risk Management Committee, in December 2004. The RiskManagement Committee is chaired by the Chief Executive Officer and is responsible for communicatingto the Board/Audit Committee the critical risks the Group faces, their changes and the action plans tomanage these risks.
During the 2004 financial year, a series of meetings and workshops with key senior members of themanagement were conducted to update the Risk Profile of the Group and to enhance theirunderstanding and knowledge of risk management. The key risks identified through this process weresubsequently consolidated and presented to the Risk Management Committee and Audit Committee fortheir consideration in January and February 2005, respectively. Based on the Risk Profile, there will bea requirement to submit quarterly management reports on the status of key risks to the Heads offunctions for reporting to the Group Risk Management Committee.
Work has commenced on compilation of a Risk Management Manual, which on completion andendorsement by the Risk Management Committee will be issued to all employees with the purpose ofoutlining the risk management framework of the Group and providing practical guidance on riskmanagement issues.
In 2005, the Risk Management function will undertake the following initiatives to further enhance therisk management framework and control structure of the Group:
To further inculcate the risk management culture, a series of training and awareness sessions will be
conducted, targeting various levels of staff across all departments and disciplines.
A review and enhancement of the Group’s Business Continuity Plan will be initiated to identify the
critical business processes, systems and resources and to ensure that adequate plans are in place to
enable the Group to maintain operational and financial continuity in the event of adverse
circumstances.
Further enhancements to the Group’s risk management and system of internal control are planned
with reviews of the Group’s information security policies and practices and revenue assurance
processes, which are used to monitor potential revenue leakage that may arise during day to day
operations.
DiGi AR 04 08/04/05 4:15hin Page 21
22 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Internal Audit Function
The Group has in place an internal audit function, which assists the Board in conducting appropriatereviews to ensure that key controls established by the Board and management are operating effectivelyin order for the Board to achieve the objective of ensuring the adequacy and effectiveness of the systemof internal control.
Internal audit reviews the control processes implemented by the management, and reports to the AuditCommittee on a quarterly basis. Internal audit adopts a risk-based approach in the review of theinternal controls in the key activities of the Group’s businesses on the basis of an annual internal auditplan that had been presented to and approved by the Audit Committee.
Weaknesses of Internal Controls that Result in Material Losses
There were no material losses incurred during the current financial year as a result of weaknesses ininternal control. Management continues to take measures to strengthen the control environment.
Statement on Internal Control (continued)
DiGi AR 04 08/04/05 4:15hin Page 22
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 23
Other Compliance Information
Non-Audit Fees
The amount of non-audit fees paid to external auditors for the financial year ended 31 December 2004is RM41,750.
Material Contracts
Save as disclosed below, neither the Company nor any of its subsidiary companies had entered into anymaterial contracts which involved directors' and/or major shareholders' interests, either still subsistingat the end of the financial year ended 31 December 2004, or which were entered into since the end ofthe previous financial year.
Date 25 November 2004
Parties Cosmo’s World Theme Park Sdn BhdDiGi Telecommunications Sdn Bhd (a subsidiary of DiGi.Com Berhad).
General nature of contract An agreement in relation to the sponsorship rights on the IMAX brand granted by Cosmo's World Theme Park Sdn Bhd to DiGiTelecommunications Sdn Bhd.
Consideration and mode of Total consideration is RM2.0 million for a two-year tenure commencingsatisfaction 1 January 2005 and a sum of RM0.25 million shall be satisfied upon signing
of the agreement and subsequently, RM0.25 million will be paid onquarterly basis until the whole sponsorship fee is fully paid.
Relationship Tan Sri Dato' Seri Vincent Tan Chee Yioun is a major shareholder ofDiGi.Com Berhad and Berjaya Times Square Sdn Bhd. Cosmo's WorldTheme Park Sdn Bhd is a wholly owned subsidiary of Berjaya TimesSquare Sdn Bhd. Subsequently on 23 December 2004, Tan Sri Dato' SeriVincent Tan Chee Yioun became a major shareholder of Berjaya TimesSquare Sdn Bhd through Matrix International Berhad, which Tan Sri Dato'Seri Vincent Tan Chee Yioun is a major shareholder.
DiGi AR 04 08/04/05 4:15hin Page 23
Composition
Dato’ Ab. Halim Bin Mohyiddin Chairman/Independent Non-Executive DirectorTun Dato’ Seri Dr Lim Chong Eu Member/Independent Non-Executive DirectorChristian Storm (appointed on 10.11.2004) Member/Non-Independent Non-Executive DirectorOle Bjorn Sjulstad (resigned on 10.11.2004) Member/Non-Independent Non-Executive Director
Meetings
The Audit Committee held six meetings during the financial year ended 31 December 2004 which wereattended by all the members. Representatives of the external auditors and other officers of the Groupwere also invited to attend and brief the members on specific issues during deliberations by the AuditCommittee.
Summary of Activities
The activities undertaken by the Audit Committee during the financial year ended 31 December 2004included the following:
Reviewed the quarterly unaudited financial results/reports and annual audited financial statementsbefore submission to the Board for consideration and approval;Reviewed the external auditors’ scope of work and audit plans for the year;Reviewed and discussed the external auditors’ audit report and areas of concern in the managementletter thereof, including management’s response;Assessed the adequacy and effectiveness of the system of internal control and accounting controlprocedures and the weaknesses of the Group’s operating units by reviewing the various internal auditreports and management responses thereto and ensuring significant findings are adequatelyaddressed by management;Reviewed the adequacy and relevance of the scope, functions and resources of internal audit and thatit has the necessary authority to carry out its work; andReported to the Board on its activities and significant findings and results.
Internal Audit Function
The Group has an established Internal Audit Division which assists the Audit Committee in the dischargeof its duties and responsibilities. The Group’s Internal Audit Division conducted programmedindependent reviews and evaluated risk exposures relating to the Group’s governance, operations andinformation systems. The audit reviews also included assessing the means of safeguarding assets; andthe economy and efficiency with which resources are employed. Further details of the activities of theInternal Audit Division are set out in the Statement on Internal Control on pages 20 to 22.
24 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Audit Committee Report
DiGi AR 04 08/04/05 4:15hin Page 24
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 25
Terms of Reference
1. Membership
The Committee shall be appointed by the Board from amongst the Directors and shall consist of not lessthan three members, a majority of whom shall be Independent Directors and at least one member ofthe Committee must be a member of the Malaysian Institute of Accountants or such other qualificationsand experience as approved by Bursa Malaysia Securities Berhad (‘Bursa Securities’).
A quorum shall consist of two members and a majority of the members present must be IndependentDirectors.
If a member of the Audit Committee resigns, dies or for any other reason ceases to be a member withthe result that the number of members is reduced to below three, the Board of Directors shall, withinthree months of that event, appoint such number of new members as may be required to make up theminimum number of three members.
2. Chairman
The Chairman of the Committee shall be an Independent Director appointed by the Board. He shallreport on each meeting of the Committee to the Board.
3. Secretary
The Company Secretary shall be the Secretary of the Committee and shall be responsible, inconjunction with the Chairman, for drawing up the agenda and circulating it, supported by explanatorydocumentation to the Committee members prior to each meeting.
The Secretary shall also be responsible for keeping the minutes of meetings of the Audit Committee andcirculating them to the Committee members and to the other members of the Board of Directors.
4. Frequency of Meetings
Meetings shall be held not less than four times a year and will normally be attended by the Officercharged with the responsibilities of the Group’s finance and Head of Internal Audit. The presence ofexternal auditors will be requested if required and the external auditors may also request a meeting ifthey consider it necessary.
The Committee may regulate its own procedure in lieu of convening a formal meeting by means of videoor teleconferencing or any other means of audio or audio-visual communications.
DiGi AR 04 08/04/05 4:15hin Page 25
5. Authority
The Committee is authorised by the Board to investigate any activity within its terms of reference andshall have unrestricted access to both the internal and external auditors and to all employees of theGroup. The Committee is also authorised by the Board to obtain external legal or other independentprofessional advice as necessary.
The Committee is also authorised to convene meetings with the external auditors excluding theattendance of the executive members of the Committee, wherever deemed necessary.
6. Duties
The duties of the Committee shall be:
(a) To consider the appointment of external auditors, the audit fee and any questions of resignationor dismissal including recommending the nomination of person or persons as external auditors;
(b) To discuss with the external auditors where necessary, on the nature and scope of audit and toensure coordination of audit where more than one audit firm is involved;
(c) To review the quarterly results and year-end financial statements prior to the approval by theBoard, focusing on:
going concern assumptioncompliance with accounting standards and regulatory requirementsany changes in accounting policies and practicessignificant issues arising from the auditmajor judgemental areas
(d) To prepare Audit Committee Report at the end of each financial year;
(e) To discuss problems and reservations arising from the interim and final external audits, and anymatters the external auditors may wish to discuss (in the absence of management, wherenecessary);
(f) To review the external auditors’ management letter and management’s response;
(g) To review any related party transaction and conflict of interest situation that may arise within theCompany or Group including any transaction, procedure or course of conduct that raises questionof management integrity;
26 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Audit Committee Report (continued)
DiGi AR 04 08/04/05 4:15hin Page 26
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 27
(h) To do the following in respect of the internal audit function:
review the adequacy of scope, functions and resources of the internal audit function and that ithas the necessary authority to carry out its work;review internal audit programme;ensure coordination of external audit with internal audit;consider the major findings of internal audit investigations and management’s response, andensure that appropriate actions are taken on the recommendations of the internal audit function;review any appraisal or assessment of the performance of the staff of the internal audit function;approve any appointment or termination of senior staff member of the internal audit function;inform itself of resignations of internal audit staff members and provide the resigning staffmember an opportunity to submit his/her reason for resignation;to monitor related party transactions entered into by the Company and its subsidiaries, and toensure that the Directors report such transactions annually to shareholders via the annualreport;to review and monitor the effectiveness of internal control systems and to evaluate the systemswith the external auditors;
(i) To carry out such other responsibilities, functions or assignments as may be defined jointly by theAudit Committee and the Board of Directors from time to time;
(j) In compliance with Paragraph 15.17 of Bursa Securities Listing Requirements, where the Committeeis of the view that a matter reported by it to the Board has not been satisfactorily resolved resultingin a breach of the Bursa Securities Listing Requirements, the Committee must promptly report suchmatter to Bursa Securities.
DiGi AR 04 08/04/05 4:15hin Page 27
Management Team
28 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Chee Pok Jin Chief Marketing Officer
Pok Jin was appointed ChiefMarketing Officer in March2005. Prior to joining DiGi, he was Senior GeneralManager at Harpers’ Trading(M) Sdn Bhd, a subsidiary ofZurich-based DKSH group ofcompanies; Head of Marketingand Product Management forthe Consumer Business Division
(2002-2004) at Maxis Communications Berhad;and Vice President, Head of Sales and MassMarket, Citibank. He also spent 15 years withProcter and Gamble (1982-1997), assumingthe position of Sales Director for Singaporeand Malaysia in 1995.”
Morten Lundal Chief Executive Officer
Morten took over as Chief ExecutiveOfficer in July 2004. Prior to DiGi,he was Executive Vice President ofCorporate Strategy and BusinessDevelopment at Telenor, and amember of the Telenor ExecutiveBoard from 2000-2002. He wasappointed CEO of Telenor BusinessSolutions afterjoining Telenoras CEO of its
Internet business area inFebruary 1997. Previous employmentswere with Gemini Consulting, A.T.Kearney and Dyno Industries. Mortenhas a Master in Business andEconomics from the Norwegian Schoolof Management, and an MBA fromIMD, Switzerland.”
‘‘
Jon Eddy Chief Technology Officer
Jon came on board in February 2002as Chief Technical Officer, and wasappointed Chief Technology Officer inOctober 2004. Pre-DiGi, he was ChiefTechnical Officer at Cesky Mobil in theCzech Republic for two years, andDirector for the Regional TechnicalCenter at Lucent Technologies. He alsospent time with US West International(Maxis) as Director of RF Engineering.Jon started his career as acommunications engineer for theBoeing Defense and Space Group inthe US. He graduated from MontanaState University with a Bachelor ofScience in Electrical Engineering.”
‘‘
MMS picture taken by Khor Choo Lin
MMS picture taken by Johan Dennelind
‘‘
MMS picture taken by Morten Lundal
DiGi AR 04(p28-29)only 08/04/05 4:28hin Page 28
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 2929
Khor Choo LinGeneral Manager of Human Resource andAdministration
Prior to joining DiGi in February 1997,Choo Lin served for 17 years at IntelMalaysia, as the Compensation andBenefits Manager. She was promoted to Regional Compensation and BenefitsManager, Intel Asia Pacific, and alsoassumed the position of HumanResource Manager of Intel Singaporeand Intel Australia in 1993. Choo Linholds a Bachelor in Mathematics fromQueen’s University, Canada.”
‘‘
Johan Dennelind
Chief Financial Officer
Johan was appointed Chief Financial Officer in November 2004. He was previously CFO and Deputy CEO of Telenor AB and Director ofInternational Business Development for the Nextra Group. His career in telecommunications began with Telia AB, starting out as a managementtrainee in the mid 90s. Johan graduated with aMaster of Science in Business Administration fromthe University of Orebro, Sweden.”
‘‘
Tunku Alizakri Raja Muhammad AliasHead of Corporate Affairs
Prior to joining DiGi on April 18, 2005,Tunku Alizakri was Vice President and Head of Maybank Group Strategic Planning(2001-2005). Previous to that, he was withthe Sime Darby Group (1996-1999), first asan executive in Group Corporate Planning,then as Special Assistant to the CEO of thePlantations Division. Tunku Alizakri is trainedlegally as a Barrister at Law (Lincoln’s Inn),with an LLB from King’s College (Universityof London). He has an MBA from CornellUniversity.”
‘‘
MMS picture taken by Jon Eddy
MMS picture taken by Chee Pok Jin
MMS picture taken by Tunku Alizakri
DiGi AR 04(p28-29)only 08/04/05 4:28hin Page 29
With a long coastline of about
4,700km, Malaysia boasts
many natural wetlands in the
form of lakes, rivers, peat
swamps, mangroves and coral
reefs. These waterlogged
places are ecological treasure
troves, supporting a host of
biological life. Wetlands also
provide a natural filter for
drinking water, and protect us
from floods.
DiGi AR 04 08/04/05 4:15hin Page 30
DiGi is launching The Wetland Restorer of Perak project in the second quarter, 2005Photo credit: Wetlands International
DiGi AR 04 08/04/05 4:20hin Page 31
32 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Group Financial Summary
Year ended Year ended Year ended Eight months ended Year ended31 December 2004 31 December 2003 31 December 2002 31 December 2001 30 April 2001
(Restated )RM’000 RM’000 RM’000 RM’000 RM’000
Revenue 2,233,703 1,713,529 1,289,564 747,042 887,004
Profit before taxation 446,843 201,536 145,770 121,921 152,145
Profit after taxation 317,355 142,223 100,870 158,921 152,145
Total assets 3,566,347 3,247,432 3,008,517 2,410,361 2,077,263
Shareholders’ fund 1,777,193 1,459,838 1,317,615 1,216,745 1,057,824
Long term liabilities 655,546 750,035 815,715 678,002 490,906
Profit after taxation as % of revenue 14.2% 8.3% 7.8% 21.3% 17.2%
Earnings per share (sen) 42.3 19.0 13.4 21.2 20.3
Net tangible assets per share (RM) 2.30 1.84 1.64 1.53 1.38
Note: The above group financial summary has been prepared to conform with the current year’s presentation of the financial statements.
DiGi AR 04 08/04/05 4:20hin Page 32
Profit before taxationRM ’000
2004 2003 2002 2001* 2001 2004 2003 2002 2001* 2001
Total assetsRM ’000
Shareholders’ fundRM ’000
Profit after taxationRM ’000
Long term liabilitiesRM ’000
Net tangible assets per shareRM
3,5
66,3
47
3,2
47,4
32
3,0
08,5
17
2,4
10,3
61
2,0
77,2
63
2.3
0
1.8
4
1.6
4
1.5
3
1.3
8
Note: * Denotes eight months ended 31 December 2001
2,2
33,7
03
1,7
13,5
29
1,2
89,5
64
747,0
42
887,0
04
446,8
43
201,5
36
145,7
70
121,9
21
152,1
45
1,7
77,1
93
1,4
59,8
38
1,3
17,6
15
1,2
16,7
45
1,0
57,8
24
2004 2003 2002 2001* 20012004 2003 2002 2001* 2001
2004 2003 2002 2001* 2001 2004 2003 2002 2001* 20012004 2003 2002 2001* 2001
317,3
55
142,2
23
100,8
70
158,9
21
152,1
45
655,5
46
750,0
35
815,7
15
678,0
02
490,9
06
RevenueRM ’000
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 33
DiGi AR 04 08/04/05 4:20hin Page 33
34 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Tahun berakhir Tahun berakhir Tahun berakhir Lapan bulan berakhir Tahun berakhir31 Disember 2004 31 Disember 2003 31 Disember 2002 31 Disember 2001 30 April 2001
(Dinyata semula )RM’000 RM’000 RM’000 RM’000 RM’000
Hasil 2,233,703 1,713,529 1,289,564 747,042 887,004
Keuntungan sebelum cukai 446,843 201,536 145,770 121,921 152,145
Keuntungan selepas cukai 317,355 142,223 100,870 158,921 152,145
Jumlah aset 3,566,347 3,247,432 3,008,517 2,410,361 2,077,263
Dana pemegang saham 1,777,193 1,459,838 1,317,615 1,216,745 1,057,824
Tanggungan jangka panjang 655,546 750,035 815,715 678,002 490,906
Keuntungan selepas cukai sebagai % hasil 14.2% 8.3% 7.8% 21.3% 17.2%
Pendapatan sesaham (sen) 42.3 19.0 13.4 21.2 20.3
Aset ketara bersih sesaham (RM) 2.30 1.84 1.64 1.53 1.38
Nota: Ringkasan kewangan kumpulan di atas telah disediakan mengikut pembentangan baru penyata kewangan bagi tahun semasa.
Ringkasan Kewangan Kumpulan
DiGi AR 04 08/04/05 4:20hin Page 34
2004 2003 2002 2001* 2001 2004 2003 2002 2001* 2001
Tanggungan jangka panjangRM ’000
Aset ketara bersih sesahamRM
2.3
0
1.8
4
1.6
4
1.5
3
1.3
8
655,5
46
750,0
35
815,7
15
678,0
02
490,9
06
Jumlah asetRM ’000
Dana pemegang sahamRM ’000
Keuntungan selepas cukaiRM ’000
3,5
66,3
47
3,2
47,4
32
3,0
08,5
17
2,4
10,3
61
2,0
77,2
63
1,7
77,1
93
1,4
59,8
38
1,3
17,6
15
1,2
16,7
45
1,0
57,8
24
2004 2003 2002 2001* 2001 2004 2003 2002 2001* 20012004 2003 2002 2001* 2001
317,3
55
142,2
23
100,8
70
158,9
21
152,1
45
Keuntungan sebelum cukaiRM ’000
2,2
33,7
03
1,7
13,5
29
1,2
89,5
64
747,0
42
887,0
04
446,8
43
201,5
36
145,7
70
121,9
21
152,1
45
2004 2003 2002 2001* 20012004 2003 2002 2001* 2001
HasilRM ’000
Nota: * Menandakan lapan bulan berakhir 31 Disember 2001
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 35
DiGi AR 04 08/04/05 4:20hin Page 35
Malaysia has a rich oral tradition. Storytellers were
once powerful communicators who could influence the
community and share moral values. They have been
known to even change the destinies of kings and states.
The wayang kulit (puppet show) is just one form of
traditional storytelling in the country.
DiGi AR 04 08/04/05 4:20hin Page 36
DiGi is launching The Storyteller of Perlis project in the fourth quarter, 2005
DiGi AR 04 08/04/05 4:20hin Page 37
Pemegang Saham Yang Dihargai,
Terlebih dahulu, izinkan saya menyatakan
bahawa saya amat berbesar hati kerana
berpeluang menyampaikan perutusan
ini selaku pengerusi DiGi.Com Bhd (DiGi),
jawatan yang baru saya pegang selepas
mengambil alih daripada Tan Sri Dato’
Seri Vincent Tan Chee Yioun pada
12 Januari 2005. Bagi pihak Lembaga
Pengarah, saya juga ingin mengucapkan
terima kasih kepada Tan Sri kerana
sumbangan beliau kepada kemajuan
progresif DiGi selama ini.
Pada tahun lepas, DiGi menempuh
pelbagai cabaran. DiGi menghadapi
persaingan pasaran begitu sengit dan
terpaksa berdepan dengan perubahan
berkaitan pengawalseliaan. Namun,
dalam persekitaran mencabar ini, kami
tetap mencatatkan prestasi yang amat
memberangsangkan.
Dear Shareholders,
First of all, I’d like to express my
pleasure at being able to address you as
DiGi.Com Bhd’s (DiGi) Chairman, a
relatively new position I hold since taking
over from Tan Sri Dato’ Seri Vincent Tan
Chee Yioun on January 12, 2005. On
behalf of the Board, I’d also like to
thank Tan Sri for his contribution
towards DiGi’s progressive success.
Last year was full of challenges for
DiGi. Market competition was intense and
there were regulatory changes to contend
with. Within this framework, however,
DiGi still performed extremely well.
Chairman’s Statement / Penyata Pengerusi
38 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Our customer base grew 47% to reach 3.24 million –representing total market shareof 22% as at end December –and this contributed to a veryimpressive 30% increase inrevenue from RM1.71 billion to RM2.23 billion.”
‘‘
DiGi AR 04 08/04/05 4:20hin Page 38
Our customer base grew 47% to
reach 3.24 million – representing total
market share of 22% as at end December
– and this contributed to a very impressive
30% increase in revenue from RM1.71
billion to RM2.23 billion. At the same
time, profit before tax more than doubled
from RM202 million to RM447 million.
If there is one underlying reason
for DiGi’s impressive performance, it is
this: strategic thinking. We understood
the potential of the rural and urban
youth market and attracted customers
from these areas by offering highly
competitive pricing. We also capitalised
on the growing business market,
particularly within the small and
medium-sized industry (SMI). As a result
of gauging, and catering to, the specific
requirements of the SMI niche, this
business segment contributed 47% of
our total growth in subscribers in 2004.
While our customer base has
increased substantially, our blended
average revenue per user (ARPU)
remained stable at around RM59 in 2004.
We have also been strategic in
meeting customers’ wants and needs.
In 2004, DiGi launched a number of
new products and services, all of
which have one ultimate aim: to add
convenience and flexibility to Malaysians’
increasingly mobile lifestyles. DiGi
Bilangan pelanggan kami meningkat
47% untuk mencecah angka 3.24 juta –
yang mewakili jumlah bahagian pasaran
sebanyak 22% pada akhir Disember –
dan ini menyumbang kepada peningkatan
hasil 30% yang mengagumkan, daripada
RM1.71 bilion kepada RM2.23 bilion. Pada
masa yang sama, keuntungan sebelum
cukai meningkat lebih dua kali ganda
daripada RM202 juta kepada RM447 juta.
Faktor utama yang memacu prestasi
cemerlang DiGi ialah pemikiran strategik.
Kami memahami potensi pasaran belia
luar bandar dan bandar dan menarik
pelanggan dari kawasan-kawasan ini
dengan menawarkan harga yang
kompetitif. Kami juga mengambil
kesempatan daripada pasaran perniagaan
yang semakin berkembang pesat,
khususnya industri saiz kecil dan
sederhana (IKS). Hasil kejayaan kami
menilai dan memenuhi keperluan khusus
pasaran IKS, segmen perniagaan tersebut
menyumbang 47% daripada pertumbuhan
jumlah pelanggan pada 2004.
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 39
DiGi AR 04 08/04/05 4:20hin Page 39
products and services increase the
number of daily functions that can be
executed over the mobile, and are
always designed to be easy to use.
The icing on the cake was, of
course, the launch of EDGE. DiGi had in
2003 reported that we would introduce
EDGE to the local market, and we kept
our word. This, in itself, is something
DiGi prides itself on – doing what we say
we will do. While we aim to keep the
market surprised with our innovations,
we also intend to establish trust in us
as a responsible organisation that does
not make empty claims.
Walaupun bilangan pelanggan kami
telah meningkat secara mendadak,
purata hasil setiap pengguna (ARPU)
tergabung tetap stabil, iaitu di sekitar
RM59 pada 2004.
Kami juga memainkan peranan
strategik untuk memenuhi kehendak
dan keperluan pelanggan. Pada 2004,
DiGi melancarkan beberapa produk dan
perkhidmatan baru, semuanya dengan
matlamat mutlak: untuk meningkatkan
fleksibiliti dan memudahkan lagi gaya
hidup rakyat Malaysia yang semakin
kerap bergerak. Produk dan perkhidmatan
DiGi meningkatkan bilangan fungsi
harian yang boleh digunakan menerusi
telefon mudah alih dan sentiasa direka
suai supaya mudah digunakan.
Sorotan utama tahun lepas ialah
pelancaran EDGE. Pada 2003, DiGi
melaporkan bahawa kami akan
memperkenalkan EDGE kepada pasaran
tempatan, dan kami telah memenuhi
janji kami. Ini adalah sesuatu yang
amat dibanggakan oleh DiGi – iaitu
kesungguhan untuk mengotakan segala
yang kami katakan. Sambil mempelopori
pasaran dengan pelbagai inovasi, kami
juga berhasrat membina kepercayaan
umum terhadap kami sebagai sebuah
organisasi bertanggungjawab yang tidak
membuat janji kosong semata-mata.
40 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
While we aim to keep the market surprised withour innovations, we also intend to establishtrust in us as a responsible organisation thatdoes not make empty claims.”
‘‘
Chairman’s Statement (continued) / Penyata Pengerusi (sambung)
DiGi AR 04 08/04/05 4:20hin Page 40
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 41
DiGi has also been strategic
in reducing costs to improve our
management and operational efficiency.
The company underwent massive
internal restructuring to streamline
functions and procedures. As a result,
responsibilities are more clearly defined
and there is greater individual
accountability. While we believe
strongly in team spirit, we also believe
in encouraging and empowering each
individual to contribute to the
company’s success.
Even our RM65 million investment
in our new headquarters is strategic.
Studies have proven that a bright,
ergonomic office is conducive to
productivity. We have seen this in
Telenor, and I’m pleased that DiGi is
moving in the same direction.
Indeed, having Telenor as a major
shareholder in DiGi — with 61% equity
— holds numerous benefits for DiGi.
Telenor has mobile businesses in 12
countries outside Norway, including
Pakistan, Bangladesh and Thailand.
The company, consequently, has vast
knowledge of developing and maturing
mobile markets. This represents a rich
intellectual base that can be, and is,
tapped by DiGi. For that reason, we call
DiGi a “Malaysian company with a
Norwegian flavour”.
DiGi juga telah mengambil langkah-
langkah strategik untuk mengurangkan
kos bagi mempertingkatkan tahap
pengurusan dan kecekapan operasi kami.
Syarikat telah melaksanakan proses
penyusunan semula dalaman secara
besar-besaran untuk menyelaraskan
fungsi dan prosedur. Hasilnya, tugas
dan tanggungjawab ditakrifkan dengan
lebih jelas dan kini terdapat
kebertanggungjawaban individu yang
lebih besar. Walaupun kami sangat yakin
bahawa kejayaan boleh dicapai dengan
semangat berpasukan, kami tetap
menggalakkan dan memperkasakan
setiap individu untuk menyumbang
kepada kejayaan syarikat.
Malah keputusan kami untuk
melabur RM65 juta dalam ibu pejabat
kami adalah satu langkah strategik.
Kajian-kajian telah membuktikan
bahawa suasana pejabat yang ceria
dan ergonomi akan menggalakkan
produktiviti. Kami telah melihatnya
sendiri di Telenor, dan saya gembira
kerana DiGi sedang mengambil langkah
yang sama.
Ternyata bahawa kehadiran Telenor
sebagai pemegang saham utama DiGi,
dengan kepentingan ekuiti 61%,
membawa pelbagai manfaat kepada
DiGi. Telenor mempunyai perniagaan
mudah alih di 12 buah negara di luar
Norway, termasuk Pakistan, Bangladesh
dan Thailand. Syarikat ini mempunyai
pengetahuan luas tentang pasaran
komunikasi mudah alih yang sedang
membangun dan matang. Pengetahuan
intelektual yang luas ini boleh dan
sedang dimanfaatkan oleh DiGi. Justeru,
kami menggelar DiGi sebuah “Syarikat
Malaysia dengan sentuhan Norwegian”.
DiGi AR 04 08/04/05 4:20hin Page 41
What makes DiGi truly Malaysian is
our involvement in the community. DiGi
takes pride in being socially aware and
has adopted culture and heritage as
our focus in community projects. Our
corporate social responsibility (CSR)
programme exposes children and youth,
in particular, to Malaysian culture and
tradition. In so doing, we do not just
increase awareness among the younger
generation of their country’s heritage,
but also help to preserve this.
The Board is very pleased with
DiGi’s performance in 2004 which is the
result of joint efforts by DiGi staff and
management, directors, partners and
associates, as well as dealers and
distributors. I would like to thank these
various groups for their unrelenting
commitment to DiGi.
At the same time, I would like to
thank the Ministry of Energy, Water
and Communications; the Malaysian
Communications and Multimedia
Commission; and the media for their
continued support.
Faktor yang menjadikan DiGi
sebuah syarikat Malaysia sejati ialah
penglibatan kami dalam pembangunan
masyarakat. DiGi berbangga dengan
keprihatinan sosialnya dan kami
menjadikan budaya dan warisan
sebagai tumpuan utama projek-projek
kemasyarakatan kami. Program
tanggungjawab sosial korporat (TSK)
kami mendedahkan kanak-kanak dan
belia secara khususnya kepada budaya
dan tradisi Malaysia. Dengan berbuat
demikian, kami bukan sahaja akan
meningkatkan kesedaran tentang
warisan negara di kalangan generasi
muda, tetapi juga membantu memulihara
warisan tersebut.
Lembaga Pengarah sangat gembira
dengan prestasi DiGi pada 2004. Kami
sedar bahawa kejayaan ini dicapai berkat
usaha gigih dan kerjasama antara semua
kakitangan dan pengurusan, pengarah,
rakan niaga dan sekutu DiGi, di samping
wakil penjual dan pengedar kami. Saya
mengucapkan terima kasih kepada
kumpulan-kumpulan ini kerana komitmen
tidak berbelah bagi mereka kepada DiGi.
Pada masa yang sama, saya
mengucapkan terima kasih kepada
Kementerian Tenaga, Air dan Komunikasi,
Suruhanjaya Komunikasi dan Multimedia
Malaysia dan pihak media kerana
sokongan berterusan mereka.
42 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Chairman’s Statement (continued) / Penyata Pengerusi (sambung)
DiGi AR 04 08/04/05 4:20hin Page 42
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 43
Finally, I’d like to express my
gratitude to the more than three million
DiGi customers who have given us their
vote of support by buying into our brand,
proving DiGi is “getting it right”. While
many things in DiGi will change as we
evolve, there will always remain one
fundamental constant: our commitment
to our customers, and our desire to
serve them better, all the time.
Arve JohansenChairman
March 25, 2005
Akhir sekali, saya merakamkan
setinggi-tinggi penghargaan kepada
lebih tiga juta pelanggan DiGi yang
telah memberikan kami sokongan
kukuh dengan memilih jenama kami,
dan langganan mereka membuktikan
bahawa DiGi ‘melakukannya dengan
betul’. Sambil kami berkembang maju,
pelbagai faktor dalam DiGi akan
berubah. Namun, satu perkara asas
akan sentiasa dikekalkan: Komitmen
kami kepada para pelanggan dan hasrat
kami untuk menyediakan perkhidmatan
yang lebih baik kepada mereka, pada
setiap masa.
Arve JohansenPengerusi
Mac 25, 2005
While many things in DiGiwill change as we evolve,there will always remain onefundamental constant: ourcommitment to ourcustomers.”
‘‘
DiGi AR 04 08/04/05 4:20hin Page 43
Sarawak is home to a number of
indigenous communities, such as
the Iban, Bidayuh, Kenyah, Kayan,
Kedayan, Murut, Punan, Bisayah,
Kelabit, Berawan, Penan and
Melanau. These communities have
their own cultural traditions which
are in danger of being lost as a
result of modernisation.
DiGi AR 04 08/04/05 4:20hin Page 44
DiGi is launching The Knowledge Keeper of Sarawak project in the third quarter, 2005
DiGi AR 04 08/04/05 4:20hin Page 45
46 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
CEO’s Statement / Penyata Ketua Pegawai Eksekutif
In 2004, DiGi performed evenbetter than analysts predicted.Many factors contributedtowards this, but our corephilosophy… no doubt played a significant part. ”
2004 was a great year for DiGi. One
which saw us come out with a string of
firsts in terms of product launches, while
greatly increasing both our customer
base as well as coverage. We launched
EDGE, Malaysia’s first high speed mobile
network. We introduced MobileTV™. We
revolutionised the process of reloads.
We even enabled users to transfer
talktime to one another.
In 2004, DiGi performed even
better than analysts predicted, quarter
upon quarter. Many factors contributed
towards this, but our core philosophy
of marketing smartness, operational
excellence and organisational effectiveness
has shaped a value-based management
and organisation that no doubt played a
significant part.
Revenue increased 30% from
RM1.71 billion in 2003 to RM2.23 billion,
driven mainly by the 47% growth in our
mobile customer base which reached
3.24 million. Our prepaid customer base
rose by 46% to 3.07 million while
postpaid grew 64% to 175,000. Net
Tahun 2004 menandakan tahun yang
cemerlang bagi DiGi. DiGi banyak
mencapai kejayaan cemerlang yang
menyaksikan kami memainkan peranan
sebagai pelopor dengan melancarkan
beberapa produk baru, di samping
meningkatkan bilangan pelanggan
dan liputan kami secara meluas. Kami
telah melancarkan EDGE, rangkaian
mudah alih kelajuan tinggi pertama
Malaysia. Kami turut memperkenalkan
MobileTV™. Kami membawa
pembaharuan besar kepada proses
tambahan nilai. Malah, kami juga
membolehkan pengguna
memindahkan masa percakapan kepada
satu sama lain.
Pada 2004, prestasi DiGi mengatasi
jangkaan penganalisis untuk setiap suku
tahun. Banyak faktor yang menyumbang
kepada kejayaan ini, tetapi falsafah teras
kami, iaitu kebijaksanaan pemasaran,
kecemerlangan operasi dan keberkesanan
organisasi telah membentuk pengurusan
dan organisasi berasaskan nilai yang
jelas memainkan peranan penting.
‘‘
DiGi AR 04 08/04/05 4:20hin Page 46
Hasil meningkat 30% daripada
RM1.71 bilion pada 2003 kepada
RM2.23 bilion, dipacu terutamanya oleh
pertumbuhan 47% bilangan pelanggan
mudah alih kami yang kini mencecah
3.24 juta. Bilangan pelanggan prabayar
kami meningkat sebanyak 46% kepada
3.07 juta manakala pelanggan pasca
bayar bertambah 64% kepada 175,000.
Penambahan bersih bagi khidmat
prabayar dan pasca bayar ialah 966,000
dan 68,000 pelanggan.
Dengan pembangunan hasil yang
mantap, pengurusan kos yang teliti
dan manfaat ekonomi skala, EBITDA
(keuntungan sebelum faedah, cukai,
susut nilai dan pelunasan) DiGi
meningkat daripada RM699 juta kepada
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 47
additions for prepaid and postpaid
were 966,000 and 68,000 customers
respectively.
Thanks to solid revenue development,
careful cost management and economies
of scale, DiGi’s EBITDA increased to
RM979 million from RM699 million.
EBITDA margin surged to 44% from 41%.
DiGi’s operating cash flow, meanwhile,
rose from RM136 million to RM455 million,
despite significant investments made
in coverage and the roll out of our
HighSpeed Mobile Network™.
Profit before tax surged 122% to
RM447 million from RM202 million in
2003, while profit after tax posted
123% higher, from RM142 million in
2003 to RM317 million. As a result,
earnings per share increased to 42.3
sen from 19.0 sen.
The mobile communications market
in Malaysia is very dynamic. To give an
example, within just the second half of
2004, mobile penetration shot up from
51% to 57%. A seemingly insatiable
quest for information is driving data
technology evolution. Meanwhile, our
increasingly mobile lifestyle makes
inevitable the convergence of technologies
into one portable device, for greater
convenience. All these are powerful
sources of change.
DiGi AR 04 08/04/05 4:20hin Page 47
In such an exciting industry, it is
essential to understand market needs
and adapt to these, quickly. At DiGi,
however, we do not just respond to
needs and demands. We make a
conscious effort to drive change. Only
by being change agents can we truly
say we’re a leader. Have we achieved
this? Judging from our innovations in
2004, I feel qualified to say “yes”!
What were our innovations in2004?
With our EDGE network as a backbone,
we have been able to offer Malaysians
a range of services that require high
broadband speed and bandwidth
capabilities, such as Internet access,
news and financial services, MobileTV™
and games. These serve to enhance
the mobile lifestyle of Malaysians,
giving them the flexibility, speed and
convenience of being able to conduct an
increasing number of functions – both
work-related and personal – while on
the move.
Innovations to improve our
customer experience focused on four
main areas: 1) enhanced service by
customer service personnel who
undergo constant training and who
RM979 juta. Margin EBITDA pula
meningkat daripada 41% kepada 44%.
Sementara itu, aliran tunai operasi DiGi
meningkat daripada RM136 juta kepada
RM455 juta, walaupun pelaburan besar
telah dibuat untuk memperluas liputan
dan melancarkan rangkaian mudah alih
kelajuan tinggi kami.
Keuntungan sebelum cukai melonjak
122% kepada RM477 juta berbanding
RM202 juta pada 2003, manakala
keuntungan selepas cukai dilaporkan
123% lebih tinggi, iaitu daripada RM142
juta pada 2003 kepada RM317 juta.
Hasilnya, pendapatan sesaham meningkat
kepada 42.3 sen daripada 19.0 sen.
Pasaran telekomunikasi mudah alih
di Malaysia sangat dinamik. Sebagai
contoh, pada separuh kedua 2004
sahaja, kadar penembusan perkhidmatan
mudah alih meningkat daripada 51%
kepada 57%. Permintaan untuk maklumat
yang tidak terbatas memacu evolusi
teknologi. Sementara itu gaya hidup
48 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
CEO’s Statement (continued) / Penyata Ketua Pegawai Eksekutif (sambung)
DiGi AR 04 08/04/05 4:20hin Page 48
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 49
have quicker access to information
required by customers via web-based
portals; 2) access by customers to
information online; 3) increasing the
number of transactions that customers
can execute electronically, such as
reloading their prepaid accounts; and
transferring talktime from one to
another; and 4) making reloads more
convenient by allowing for top-ups of any
amount equivalent to RM5 and above.
Towards better coverage, in 2004
we embarked on a No One Covers You
Like DiGi campaign targeting rural as
well as urban areas, including Sabah
and Sarawak. This complements our
marketing strategy of focusing on youth
and rural customers.
Internally, we cut down the number
of our business divisions from 11 to
five — marketing, technology, finance,
human resources and corporate affairs —
restructuring the company to eliminate
duplication of functions. We made
individual responsibilities more clearly
defined.
At the same time, we created a
lively atmosphere in which opinions and
ideas are exchanged freely. We feel it is
important to communicate and challenge
each other all the time. To promote
zaman ini, yang menyaksikan manusia
semakin giat bergerak, bermakna
teknologi akhirnya akan digabungkan
dalam satu peranti mudah alih untuk
kemudahan dan kesenangan pengguna.
Semua perkembangan ini menjadi
pemangkin kepada perubahan.
Dalam industri yang begitu menarik
ini, keperluan pasaran perlu difahami
dan langkah-langkah harus diambil
untuk menyesuaikan perkhidmatan
berasaskannya. Tetapi di DiGi, kami
bukan sekadar bertindak balas memenuhi
keperluan dan permintaan. Kami
berusaha bersungguh-sungguh untuk
memacu perubahan. Kami hanya dapat
menggelar diri kami sebagai pemimpin
jika kami menjadi ejen perubahan.
Apakah kami berjaya melakukannya?
Jika dilihat daripada inovasi yang
kami pelopori pada 2004, saya rasa
jawapannya jelas sekali ‘Ya’!
Apakah inovasi kami pada2004?
Dengan rangkaian EDGE sebagai tunjang,
kami dapat menawarkan pelbagai
perkhidmatan yang memerlukan kelajuan
jalur lebar dan keupayaan lebar jalur
yang tinggi kepada rakyat Malaysia,
seperti capaian Internet, berita dan
perkhidmatan kewangan, MobileTV™ dan
permainan. Semua ini mempertingkatkan
gaya hidup bergerak rakyat Malaysia,
dengan memberikan mereka fleksibiliti,
kelajuan dan kesenangan untuk mengguna
pakai semakin banyak fungsi — sama
Internally, we cut down the number of our business divisionsfrom 11 to five… restructuring the company to eliminateduplication of functions.”‘‘
DiGi AR 04 08/04/05 4:20hin Page 49
greater interaction among staff, our
new headquarters, to be ready end
2005, will adopt an open-floor concept.
With no designated desks, we will move
with our laptops into any space available.
That way, top management will be found
next to junior staff, and communication
barriers will start to break down. Work
on the new HQ began in July 2004.
As a result of our numerous
innovations internally and externally,
the DiGi brand has come to stand for
cool, refreshing smartness. And that is
the way we would like to be seen!
Technology
In 2004, the Technical, International
and IT divisions were merged to form
the Technology division, which oversees
network planning and development,
service planning and operations, and
business support systems. This Division
has been central to increased coverage,
better network quality and new
products and services.
ada untuk bekerja atau tujuan peribadi
— sambil bergerak.
Inovasi untuk meningkatkan
pengalaman pelanggan tertumpu kepada
empat bidang utama: 1) perkhidmatan
lebih baik oleh kakitangan perkhidmatan
pelanggan, yang sentiasa diberikan
latihan dan capaian lebih pantas kepada
maklumat menerusi gerbang berasaskan
web 2) capaian oleh pelanggan kepada
maklumat di dalam talian; 3) menambahkan
bilangan urus niaga yang boleh
dilaksanakan oleh pelanggan secara
elektronik, seperti menambah nilai akaun
prabayar mereka, dan memindahkan
masa percapakan kepada satu sama
lain dan 4) memudahkan tambahan
nilai dengan menawarkan penambahan
sebarang jumlah RM5 dan keatas.
Untuk menyediakan liputan yang
lebih baik, kami telah melaksanakan
kempen No One Covers You Like DiGi
pada 2004, yang menyasarkan kawasan
bandar dan luar bandar, termasuk Sabah
dan Sarawak. Kempen ini menyokong
strategi pemasaran kami untuk memberi
tumpuan kepada pelanggan belia dan
penduduk luar bandar.
Di dalam syarikat, kami telah
mengurangkan bahagian perniagaan
kami daripada 11 kepada lima – iaitu
pemasaran, teknologi, kewangan,
sumber manusia dan hal-ehwal korporat.
Proses ini dilaksanakan menerusi
penyusunan semula syarikat untuk
mengenepikan penduaan fungsi. Kami
memastikan tanggungjawab individu
kini ditakrifkan dengan lebih jelas.
50 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
As a result of our numerousinnovations internally and externally,the DiGi brand has come to standfor cool, refreshing smartness.”
‘‘
CEO’s Statement (continued) / Penyata Ketua Pegawai Eksekutif (sambung)
DiGi AR 04 08/04/05 4:20hin Page 50
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 51
In 2004, we built 445 new base
transceiver stations (BTS), bringing
the total at year end to 2,449 sites. The
introduction of standard pricing for the
construction of BTS has made the
exercise more cost-effective. At the
same time, infrastructure-sharing in the
industry also increased our coverage
efficiency.
As a result of network upgrading,
by end 2004, DiGi’s customers had
access to EDGE in Klang Valley, Penang
and Johor Bahru. RM125 million was
invested in upgrading the network
beyond the three areas to include
Genting Highlands, Rawang, Negeri
Sembilan, Ipoh, Melaka, Kuantan, Kota
Kinabalu and Kuching. The latest phase
of our EDGE expansion began in
November 2004 and is expected to be
completed by 2005. This will take EDGE
to a majority of our customers.
Among our key achievements in
2004, as compared to 2003, are the
reduction in outage minutes and
customer complaints by 25%
respect ively.
The Division also established an E-
Field Force tool to allow for online access
from sites, increasing productivity and
improving troubleshooting.
In addition, DiGi implemented a
number of IT-based systems to simplify
procedures internally and give staff
access to more information. We have
new IT features to support billing and
provisioning platforms. Existing servers
and storage were consolidated to
support capacity on demand and to
optimise costs over the long run. Finally,
the enterprise LAN and WAN bandwidths
were expanded to support business
operations at regional offices with speed
and efficiency.
Pada masa yang sama, kami
mewujudkan persekitaran yang ceria
di mana pendapat dan idea dikongsi
bersama secara bebas. Kami rasa kami
perlu berhubung dengan satu sama lain
dan mencabar satu sama lain pada setiap
masa. Untuk mengeratkan hubungan
kakitangan, ibu pejabat baru kami yang
akan siap menjelang akhir 2005 akan
menggunakan konsep lantai terbuka.
Tanpa sebarang meja khusus untuk
kakitangan, kami akan bergerah bersama
komputer riba kami ke mana-mana ruang
yang kosong. Dengan cara ini, pihak
pengurusan kanan akan duduk
semeja dengan kakitangan
bawahan, dan sekatan
komunikasi akan mula runtuh.
Kerja-kerja membina Ibu
Pejabat baru telah dimulakan
pada Julai 2004.
Hasil inovasi kami di dalam
dan luar syarikat, jenama DiGi
kini dilihat sebagai melambangkan
kebijaksanaan hebat. Inilah
imej yang ingin kami paparkan!
Teknologi
Pada 2004, bahagian Teknikal,
Antarabangsa dan IT telah digabungkan
untuk membentuk bahagian Teknologi.
Bahagian ini memantau perancangan dan
pembangunan rangkaian, perancangan
perkhidmatan dan operasi, dan sistem
sokongan perniagaan. Ia memainkan
peranan penting dalam usaha memperluas
liputan rangkaian, meningkatkan kualiti
rangkaian dan membangunkan produk
dan perkhidmatan baru kami.
Pada 2004, kami telah membina
445 stesen transmisi tapak (STT) baru,
untuk menjadikan jumlah keseluruhan
sebanyak 2,449 stesen pada akhir tahun.
Langkah memperkenalkan harga piawai
bagi pembinaan STT telah menjimatkan
kos pembinaan. Pada masa yang sama,
DiGi AR 04 08/04/05 4:23hin Page 51
International
In 2004, International operations
continued to register strong growth,
generating total revenue of RM274
million, an increase of 16% over the
previous year. Thanks to innovative
products, customised and quality service,
International doubled its revenue over
the year from the Application Service
Providers market.
The Division continued to establish
new bilateral routes to arbitrage DiGi’s
transit traffic for better quality and
competitive pricing. New routes were
established during the year to India,
Pakistan, Bangladesh and Myanmar.
Meanwhile, DiGi’s international calling
card, chatz™, maintained its market
share with added premium services.
We intend to capitalise on the
growing bandwidth and data business.
And we believe the bundling of IDD
outbound traffic with SMS and MMS
services will further boost revenue.
perkongsian infrastruktur dalam industri
juga telah meningkatkan keberkesanan
liputan kami.
Hasil daripada kerja-kerja menaik
taraf rangkaian, pelanggan DiGi
memperolehi capaian kepada EDGE di
Lembah Klang, Pulau Pinang dan Johor
Bahru. Sejumlah RM125 juta telah
dilaburkan untuk menaik taraf rangkaian
di luar tiga kawasan tersebut termasuk
Genting Highlands, Rawang, Negeri
Sembilan, Ipoh, Melaka, Kuantan, Kota
Kinabalu dan Kuching. Fasa terbaru
peluasan liputan EDGE bermula pada
November 2004 dan dijangka lengkap
menjelang 2005. Perkembangan
rangkaian ini akan membawa EDGE
kepada sebahagian besar daripada
pelanggan kami.
Antara pencapian penting pada
2004 berbanding dengan 2003 ialah
pengurangan minit kegagalan dan
pengurangan aduan pelanggan
sebanyak 25%.
Bahagian ini juga menubuhkan
sebuah Pasukan e-Lapangan untuk
membolehkan capaian dalam talian
daripada tapak, lantas meningkatkan
produktiviti dan penyelesaian masalah.
DiGi juga melaksanakan beberapa
sistem berasaskan IT untuk meringkaskan
prosedur dalaman dan memberikan
kakitangannya capaian kepada lebih
banyak maklumat. Kami kini mempunyai
ciri-ciri IT baru untuk menyokong
pengeluaran bil dan peruntukan landasan.
Pelayan dan simpanan yang sedia ada
disatukan untuk menyokong kapasiti
berasaskan permintaan, dan untuk
mengoptimumkan kos dalam jangka
panjang. Akhir sekali, lebar jalur LAN
dan WAN perusahaan telah diperluas
untuk menyokong operasi perniagaan
di pejabat serantau dengan cekap dan
pantas.
52 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
InternationalInternational
CEO’s Statement (continued) / Penyata Ketua Pegawai Eksekutif (sambung)
DiGi AR 04 08/04/05 4:23hin Page 52
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 53
Regulatory
The most significant regulatory
development in 2004 was the
Government’s stated objective of
providing nationwide mobile coverage
within a stipulated timeframe. To
enhance coverage, the Ministry of
Energy, Water and Communications
issued a directive for mobile number
portability, which will allow access to
other cellular networks if a user’s own
network is not available at any given
time. The Malaysian Communications
and Multimedia Commission is
working on regulations for this.
Increased coverage already forms
part of DiGi’s agenda, therefore we
welcome the Government’s directive.
Meanwhile, we have continued to stress
the need for a level playing field. This is
essential for competition and liberalisation
in the truest sense. In response to our
lobbying, the Government issued a public
inquiry paper in August to assess
dominance in the communications
market in order to redress the situation.
Outlook
As the mobile communications market
evolves, the focus will shift in 2005 on
sophisticated mobile offerings which
will require tremendous organisational
capabilities in mobile companies. Mobile
will lead the emergence of a new
paradigm in communication, and DiGi
is determined to be a forerunner in
bringing to the market ever-innovative
products and services.
Antarabangsa
Pada 2004, operasi antarabangsa terus
mencatatkan pertumbuhan kukuh dengan
menjana hasil berjumlah RM274 juta,
satu peningkatan 16% berbanding tahun
sebelumnya.
Dengan menawarkan produk inovatif
serta perkhidmatan yang berkualiti dan
terkhusus, bahagian Antarabangsa
menggandakan hasil daripada pasaran
Pembekal Perkhidmatan Aplikasi
berbanding tahun sebelumnya.
Bahagian ini terus membentuk
sambungan dua hala baru bagi
mengambil kesempatan daripada lalu
lintas transit DiGi untuk kualiti dan
harga yang lebih baik. Sambungan
baru telah dibuat ke India, Pakistan,
Bangladesh dan Myanmar. Sementara
itu, kad panggilan antarabangsa DiGi,
chatz™, telah mengekalkan bahagian
pasaran dengan menawarkan
perkhidmatan premium tambahan.
Kami berhasrat untuk memanfaatkan
perniagaan lebar jalur dan data yang
semakin berkembang maju. Kami
percaya langkah menggabungkan
panggi lan ke luar IDD dengan
perkhidmatan SMS dan MMS akan
meningkatkan lagi hasil.
Kawalselia
Pembangunan pengawalseliaan paling
penting pada 2004 ialah objektif khusus
Kerajaan untuk menyediakan liputan
DiGi is determined to be aforerunner in bringing tothe market ever-innovativeproducts and services.”
‘‘
DiGi AR 04 08/04/05 4:23hin Page 53
54 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
mudah alih yang meliputi seluruh negara
dalam tempoh yang ditetapkan. Untuk
meningkatkan kadar liputan, Kementerian
Tenaga, Air dan Komunikasi mengeluarkan
arahan untuk membenarkan peralihan
nombor bimbit, yang memberikan
pelanggan capaian kepada rangkaian
mudah alih lain jika rangkaian pengguna
itu sendiri tidak boleh dicapai pada bila-
bila masa. Suruhanjaya Komunikasi dan
Multimedia Malaysia sedang merangka
peraturan bagi kemudahan ini.
Liputan yang lebih luas sememang-
nya menjadi sebahagian daripada
agenda DiGi, justeru kami mengalu-
alukan arahan Kerajaan. Sementara itu,
kami terus menekankan betapa perlunya
mewujudkan persaingan yang adil.
Ini sesuatu yang amat penting agar
persaingan dan liberalisasi dapat
dilaksanakan dalam erti kata yang
sebenar. Sebagai tindak balas kepada
gesaan kami, Kerajaan telah menerbitkan
kertas siasatan umum pada bulan Ogos
untuk menilai penguasaan dalam pasaran
komunikasi untuk mengatasi masalah
tersebut.
Tinjauan
Memandangkan pasaran telekomunikasi
mudah alih akan terus berkembang
maju, tumpuan pada 2005 akan beralih
kepada tawaran mudah alih serba
canggih yang memerlukan keupayaan
organisasi luar biasa daripada syarikat-
syarikat pengendali perkhidmatan
mudah alih. Perkhidmatan mudah alih
akan menerajui kemunculan paradigma
baru dalan komunikasi, dan DiGi berusaha
gigih untuk mencapai matlamatnya
menjadi pelopor yang membawakan
produk dan perkhidmatan inovatif ke
pasaran.
Untuk menyokong perkhidmatan
pelanggan, kami akan terus mengukuhkan
To support our customer services,
we will continue to strengthen our
strategic operations with faster and
smarter business modules. We will
strive to keep ourselves lean, thus more
nimble-footed and able to convert
forward-thinking, proactive ideas into
reality.
Finally, DiGi will continue to leverage
on the vast technological, marketing
and product strength that the Telenor
network has to offer. We will use cross-
border projects and information-sharing
with the 12 Telenor affiliates around
the world to further reinforce our
position as Malaysia’s most innovative
mobile operator.
Morten LundalChief Executive Officer
March 25, 2005
CEO’s Statement (continued) / Penyata Ketua Pegawai Eksekutif (sambung)
DiGi AR 04 08/04/05 4:23hin Page 54
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 55
operasi strategik kami dengan modul
perniagaan yang lebih pantas dan pintar.
Kami akan berusaha memastikan
organisasi kami terus cekap dan tangkas
dan mampu menukarkan idea-idea
proaktif berpandangan jauh menjadi
kenyataan.
Akhir sekali, DiGi akan terus
memanfaatkan kekuatan teknologi,
pemasaran dan produk yang ditawarkan
oleh rangkaian Telenor. Kami akan
memanfaatkan projek merentasi
sempadan dan mengambil kesempatan
daripada perkongsian maklumat dengan
12 sekutu Telenor di seluruh dunia
untuk mengukuhkan lagi kedudukan
kami sebagai pengendali perkhidmatan
mudah alih yang paling inovatif di
We will continue to strengthen our strategic operationswith faster and smarter business modules.”‘‘
Malaysia.
Morten LundalKetua Pegawai Eksekutif
Mac 25, 2005
DiGi AR 04 08/04/05 4:23hin Page 55
Malaysia’s cultural heritage is a
precious national asset that needs
to be protected and preserved.
DiGi believes the preservation of
our heritage is the best gift we
could possibly bestow to future
generations.
DiGi AR 04 08/04/05 4:23hin Page 56
digi’s vision for unity in a diverse culture and aims to givethese special children a chance for individual expresiion as well as to participate and learn in a harmonious environment with other children and adults
58 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Corporate Social Responsibility
On stage, a group of eight to 12-year-olds are banging
away on huge Chinese drums, their hands synchronised
in dance-like motion as they fill the ballroom with
thunderous, almost perfect beat. When they finish,
another group performs an African war dance. Then
another sings a Malay song. Each performance is met
by hearty applause. There are smiles everywhere.
In 2004, two other similar
workshops were held in March and July:
the Ramakien, in which some
100 children performed a Thai version
of the Indian epic, Ramayana; and
Velkommen, which saw another 100
or so children play out a Norwegian
folktale, East of the Sun and West of
the Moon.
This was the scene at Dumelang, a
one-day culture workshop organised by
DiGi in September for underprivileged
children as part of our corporate social
responsibility programme, the DiGi
Yellow Mobile (DYM). The children were
from homes in Kuala Terengganu. They
had spent most of the day
rehearsing with numerous artistes,
flown in from Kuala Lumpur, before
showing off what they learnt in the
exciting finale.
DiGi AR 04 08/04/05 4:23hin Page 58
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 59
It is an unfortunate fact that,
as countries modernise and join the
growing homogenous global village,
their unique traditions tend to get
forgotten. DiGi is determined that this
should not happen in Malaysia. We
believe culture and heritage are national
assets that should be protected.
2004 was a significant year for DYM
because it marked the end of phase I of
this programme. In January 2005, DiGi
unveiled a new phase of the DiGi Yellow
Mobile, called DiGi’s Amazing Malaysians.
This promises to intensify our involvement
in heritage preservation by turning our
Since the DYM was launched in
2002, 11 culture workshops have been
held nationwide, attended by well over
1,100 children. As a result of DYM, DiGi
has become an integral part of the
cultural milieu in Malaysia.
Why did we choose culture? As a
mobile communications company, one
of our objectives is to build bridges to
connect people.
By the same token, we are
naturally drawn towards building
bridges that link our cultural past
to present, and even future.
DiGi AR 04 08/04/05 4:23hin Page 59
60 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Corporate Social Responsibility (continued)
day-long workshops into three-month
training programmes. This way, we
believe the learning experience for the
children and youth will be deeper and
leave a lifelong impression.
To make the individual projects all
the more meaningful, underprivileged
children and youth will work towards
accomplishing a goal, such as establishing
a culture centre, or a wetlands park,
which will continue to improve the cultural
landscape in the long term.
Youth and Responsibility
Since 2002, DiGi has been holding
one-day D-Mobile Youth Forums at
which we invite college students and
young professionals, aged 18 to 24, to
discuss issues pertinent to the mobile
communications industry. In 2004, the
Youth Forum held at the Hyatt Regency
Saujana, Subang, on December 4
focused on the social implications of
mobile technology.
The more than 120 youth assembled
acknowledged that mobile technology
has brought about numerous benefits
in terms of convenience and security of
always being in touch, plus easy access
to important news and information, but
noted that mobile etiquette could be
improved and the privacy rights of
individuals should be respected. At the
end of the forum, the youth produced
a set of resolutions on how this can be
achieved. These resolutions have been
sent to the Malaysian Communications
and Multimedia Commission.
DiGi AR 04 08/04/05 4:23hin Page 60
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 61
Health and Social Welfare
Although youth and culture are the
foci of our CSR programmes, DiGi also
contributes towards the well-being of
the nation as and when the occasion
arises.
In August, we sponsored a cancer
awareness fund-raising event, the
Yellow Balloon Race, organised by the
National Cancer Society of Malaysia.
And, following the December 2004
tsunami, DiGi launched a nationwide
fund-raising campaign for the affected
families in a show of heartfelt sympathy
and support.
Festive Cheer
In 2004, DiGi celebrated Hari Raya,
Deepavali, Christmas and Chinese New
Year with underprivileged children, in
mini culture workshop environments
held at major shopping centres.
We organised DiGi’s Rays of Light
in conjunction with Deepavali at Sunway
Pyramid on October 23; Colours of Raya
– Hari Raya Aidilfitri at the Berjaya Times
Square on November 20; 12 Trees of
Christmas at the Bangsar Shopping
Centre on November 27; and Celebration
of Peace and Prosperity just before
Chinese New Year at the Berjaya
Times Square, on January 29.
At these events, children were
brought in and guided to produce works
of art which were then sold to DiGi
partners. The money raised was
channelled back to the children’s homes.
Via these functions, children, DiGi
volunteers and the general public all
shared in a joyous spirit of warmth and
giving.
DiGi AR 04 08/04/05 3:45hin Page 61
DiGi has committed a significant amount into
our Corporate Social Responsibility project,
DiGi's Amazing Malaysians, because we feel it is
our responsibility to contribute to Malaysian
society in a meaningful way.
DiGi AR 04 08/04/05 3:45hin Page 62
The Directors have pleasure in submitting their report and the audited financial statements of the Groupand of the Company for the year ended 31 December 2004.
Principal activities
The Company is principally engaged in investment holding, whilst the principal activities of thesubsidiaries are as stated in Note 5 to the financial statements. There has been no significant changein the nature of these activities during the financial year.
Results
GROUP COMPANY
RM’000 RM’000
Net profit/(loss) for the year 317,355 (664)
Reserves and provisions
There were no material transfers to or from reserves and provisions during the year.
Dividends
No dividend was paid during the year and the Directors do not recommend any dividend to be paid forthe year under review.
Directors of the Company
Directors who served since the date of the last report are:
Arve Johansen Tun Dato’ Seri Dr Lim Chong Eu Dato’ Ab. Halim Bin Mohyiddin Gunnar Johan BertelsenChristian Storm (appointed as Director on 10.11.2004 and Alternate Director to Arve Johansen on 23.02.2005)
Ragnar Holmen Korsaeth (appointed on 10.11.2004)
Thor Asbjorn Halvorsen (ceased as Alternate Director to Arve Johansen on 23.02.2005 and ceased as Alternate Director
to Per Olav Fosse on 10.11.2004)
Tan Sri Dato’ Seri Vincent Tan Chee Yioun (resigned on 12.01.2005)
Ole Bjorn Sjulstad (resigned on 10.11.2004)
Per Olav Fosse (resigned on 10.11.2004)
Chan Kien Sing (ceased as Alternate Director to Tan Sri Dato’ Seri Vincent Tan Chee Yioun on 12.01.2005)
Directors’ Report for the year ended 31 December 2004
64 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
DiGi AR 04 08/04/05 3:45hin Page 64
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 65
Directors’ interests
According to the Register of Directors’ Shareholdings, the interests of Directors in office at the end ofthe financial year in the shares of the Company and its related corporations are as follows:
Number of Ordinary Shares of RM1.00 eachAt At
1.1.2004 Acquired Disposed 31.12.2004
The CompanyDirect interests
Tan Sri Dato’ Seri Vincent Tan Chee Yioun 53,804,237 - (33,285,805) 20,518,432Indirect interests
Tan Sri Dato’ Seri Vincent Tan Chee Yioun 83,799,087 1,600,038 (55,230,695) 30,168,430
Number of Ordinary Shares of NOK6 eachAt
1.1.2004/*Date of At
appointment Acquired Disposed 31.12.2004
Ultimate holding companyTelenor ASADirect interests
Arve Johansen 24,791 20,186 - 44,977Thor Asbjorn Halvorsen 1,886 186 - 2,072Ragnar Holmen Korsaeth 2,375* 1,140 - 3,515Gunnar Johan Bertelsen 175* 175 - 350Christian Storm 1,557* 25 - 1,582
Number of options over Ordinary Shares of NOK6 each
At1.1.2004/*Date of At
appointment Acquired Disposed 31.12.2004
Ultimate holding companyTelenor ASA
Arve Johansen 200,000 - - 200,000Thor Asbjorn Halvorsen 85,000 - - 85,000Ragnar Holmen Korsaeth 43,333* - - 43,333
None of the other Directors holding office at 31 December 2004 had any interest in the shares of theCompany and its related corporations during the year.
DiGi AR 04 08/04/05 3:45hin Page 65
Directors’ benefits
Since the end of the previous financial year, no Director of the Company has received nor becomeentitled to receive any benefit (other than a benefit included in the aggregate amount of emolumentsreceived or due and receivable by Directors as shown in the financial statements or the fixed salary ofa full time employee of related corporations) by reason of a contract made by the Company or a relatedcorporation with the Director or with a firm of which the Director is a member, or with a company inwhich the Director has a substantial financial interest, other than those in the normal course of businessas disclosed in Note 24 to the financial statements.
There were no arrangements during and at the end of the financial year which had the object ofenabling Directors of the Company to acquire benefits by means of the acquisition of shares in ordebentures of the Company or any other body corporate.
Issue of shares and debentures
There were no changes in the issued and paid-up capital of the Company during the financial year.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the year.
Other statutory information
Before the financial statements of the Group and of the Company were made out, the Directors tookreasonable steps to ascertain that:
i) all known bad debts have been written off and adequate provision made for doubtful debts, and
ii) all current assets have been stated at the lower of cost and net realisable value.
At the date of this report, the Directors are not aware of any circumstances:
i) that would render the amount written off for bad debts, or the amount of the provision for doubtfuldebts, in the financial statements of the Group and of the Company inadequate to any substantialextent, or
ii) that would render the value attributed to the current assets in the financial statements of the Groupand of the Company misleading, or
iii) which have arisen which render adherence to the existing method of valuation of assets or liabilitiesof the Group and of the Company misleading or inappropriate, or
iv) not otherwise dealt with in this report or the financial statements, that would render any amountstated in the financial statements of the Group and of the Company misleading.
66 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Directors’ Report for the year ended 31 December 2004 (continued)
DiGi AR 04 08/04/05 3:45hin Page 66
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 67
At the date of this report, there does not exist:
i) any charge on the assets of the Group or of the Company that has arisen since the end of thefinancial year and which secures the liabilities of any other person, or
ii) any contingent liability in respect of the Group or of the Company that has arisen since the end ofthe financial year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likelyto become enforceable within the period of twelve months after the end of the financial year which, inthe opinion of the Directors, will or may substantially affect the ability of the Group and of the Companyto meet their obligations as and when they fall due.
In the opinion of the Directors, the results of the operations of the Group and of the Company for thefinancial year ended 31 December 2004 have not been substantially affected by any item, transactionor event of a material and unusual nature nor has any such item, transaction or event occurred in theinterval between the end of that financial year and the date of this report.
Auditors
The auditors, Messrs KPMG, have not indicated their willingness to accept re-appointment.
Signed in accordance with a resolution of the Directors:
Arve Johansen Director
Christian Storm Director
Date: 25 March 2005
DiGi AR 04 08/04/05 3:45hin Page 67
In the opinion of the Directors, the financial statements set out on pages 70 to 101 are drawn up inaccordance with the provisions of the Companies Act, 1965 and applicable approved accountingstandards in Malaysia so as to give a true and fair view of the state of affairs of the Group and of theCompany at 31 December 2004 and of the results of their operations and cash flows for the year endedon that date.
Signed in accordance with a resolution of the Directors:
Arve Johansen Director
Christian Storm Director
Date: 25 March 2005
Statutory declaration pursuant to Section 169 (16) of the Companies Act, 1965
I, Johan Eric Dennelind, the officer primarily responsible for the financial management of DiGi.ComBerhad, do solemnly and sincerely declare that the financial statements set out on pages 70 to 101 are,to the best of my knowledge and belief, correct and I make this solemn declaration conscientiouslybelieving the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed in Kuala Lumpur on 25 March 2005.
Johan Eric Dennelind
Before me:
Commissioner for OathsS. BarathanLicence No. W202Kuala Lumpur
Statement by Directors pursuant to Section 169 (15)of the Companies Act, 1965
68 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
DiGi AR 04 08/04/05 3:45hin Page 68
Report of the auditors to the members of DiGi.Com Berhad
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 69
We have audited the financial statements set out on pages 70 to 101. The preparation of the financialstatements is the responsibility of the Company’s Directors.
It is our responsibility to form an independent opinion, based on our audit, on the financial statements andto report our opinion to you, as a body, in accordance with section 174 of the Companies Act 1965 and forno other purpose. We do not assume responsibility to any other person for the content of this report.
We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Thesestandards require that we plan and perform the audit to obtain all the information and explanationswhich we consider necessary to provide us with evidence to give reasonable assurance that the financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidencerelevant to the amounts and disclosures in the financial statements. An audit also includes anassessment of the accounting principles used and significant estimates made by the Directors as wellas evaluating the overall adequacy of the presentation of information in the financial statements. Webelieve our audit provides a reasonable basis for our opinion.
In our opinion:
(a) the financial statements are properly drawn up in accordance with the provisions of the CompaniesAct, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fairview of:
i) the state of affairs of the Group and of the Company at 31 December 2004 and the results oftheir operations and cash flows for the year ended on that date; and
ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financialstatements of the Group and of the Company; and
(b) the accounting and other records and the registers required by the Companies Act, 1965 to be keptby the Company and its subsidiaries have been properly kept in accordance with the provisions ofthe said Act.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with theCompany’s financial statements are in form and content appropriate and proper for the purposes of thepreparation of the consolidated financial statements and we have received satisfactory information andexplanations required by us for those purposes.
The audit reports on the financial statements of the subsidiaries were not subject to any qualificationand did not include any comment made under subsection (3) of Section 174 of the Act.
KPMGFirm Number: AF 0758
Chartered Accountants
Khaw Hock HoePartner
Approval Number: 2229/04/06(J)
Kuala Lumpur,Date: 25 March 2005
DiGi AR 04 08/04/05 3:45hin Page 69
70 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Balance Sheets at 31 December 2004
G R O U P C O M P A N Y
Note 2004 2003 2004 2003RM’000 RM’000 RM’000 RM’000
Property, plant and equipment 2 2,686,956 2,629,501 - - Intangible asset 3 39,081 43,022 - - Deferred expenditure 4 15,213 35,674 - - Investments in subsidiaries 5 - - 526,501 526,501Amount due from a subsidiary 6 - - 573,439 574,091
2,741,250 2,708,197 1,099,940 1,100,592
Current assetsInventories 7 13,423 14,066 - - Trade and other receivables 8 176,955 186,653 5 5Cash and cash equivalents 9 634,719 338,516 - -
825,097 539,235 5 5
Current liabilitiesTrade and other payables 10 750,821 712,015 198 186Deferred revenue 158,203 123,611 - -Borrowings 11 224,584 201,933 - -
1,133,608 1,037,559 198 186
Net current liabilities (308,511) (498,324) (193) (181)
2,432,739 2,209,873 1,099,747 1,100,411
Financed by:-
Capital and reservesShare capital 12 750,000 750,000 750,000 750,000Reserves 1,027,193 709,838 349,747 350,411
Shareholders’ funds 1,777,193 1,459,838 1,099,747 1,100,411Long term liabilities
Borrowings 11 455,270 679,853 - -Deferred tax liabilities 13 196,684 67,196 - -Employee benefits 14 3,592 2,986 - -
2,432,739 2,209,873 1,099,747 1,100,411
The financial statements were approved and authorised for issue by the Board of Directors on 25 March2005.
The notes set out on pages 75 to 101 form an integral part of, and should be read in conjunction with,these financial statements.
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D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 71
Income Statements for the year ended 31 December 2004
G R O U P C O M P A N Y
Note 2004 2003 2004 2003RM’000 RM’000 RM’000 RM’000
Revenue 2,233,703 1,713,529 - -Other operating income 2,449 1,919 - -Cost of materials and traffic expenses (512,234) (453,597) - -Sales and marketing expenses (275,216) (204,357) - -Operations and maintenance (80,428) (74,634) - -Rental expenses (66,272) (52,622) - -Staff expenses (114,161) (96,452) - -Depreciation expense and impairmentlosses 2 (465,553) (426,490) - -
Amortisation expense (4,016) (4,016) - -Other operating expenses (208,845) (134,883) (664) (390)
Operating profit/(loss) 15 509,427 268,397 (664) (390)Financing costs 16 (75,451) (74,507) - -Interest income 12,867 7,646 - -
Profit/(Loss) before taxation 446,843 201,536 (664) (390)Tax expense 17 (129,488) (59,313) - -
Net profit/(loss) for the year 317,355 142,223 (664) (390)
Earnings per ordinary share (sen) 18 42.3 19.0
Dividend per ordinary share (sen) - -
The notes set out on pages 75 to 101 form an integral part of, and should be read in conjunction with,these financial statements.
DiGi AR 04 08/04/05 3:46hin Page 71
Non-Distributable Distributable
Retained Profits/(Accumulated
Share capital Share premium losses) TotalG R O U P RM’000 RM’000 RM’000 RM’000
At 1 January 2003 750,000 352,651 214,964 1,317,615Net profit for the year - - 142,223 142,223
At 31 December 2003 750,000 352,651 357,187 1,459,838Net profit for the year - - 317,355 317,355
At 31 December 2004 750,000 352,651 674,542 1,777,193
Note 12
C O M P A N Y
At 1 January 2003 750,000 352,651 (1,850) 1,100,801Net loss for the year - - (390) (390)
At 31 December 2003 750,000 352,651 (2,240) 1,100,411Net loss for the year - - (664) (664)
At 31 December 2004 750,000 352,651 (2,904) 1,099,747
Note 12
The notes set out on pages 75 to 101 form an integral part of, and should be read in conjunction with,these financial statements.
Statements of Changes in Equity for the year ended 31 December 2004
72 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
DiGi AR 04 08/04/05 3:46hin Page 72
G R O U P C O M P A N Y
2004 2003 2004 2003RM’000 RM’000 RM’000 RM’000
Cash flows from operating activitiesProfit/(Loss) before taxation 446,843 201,536 (664) (390)Adjustments for:
Depreciation expense 465,553 416,990 - -Impairment losses on property, plant
and equipment - 9,500 - -Amortisation of intangible asset 3,941 3,941 - -Amortisation of deferred expenditure 20,461 14,015 - -Interest expense 48,673 54,695 - -Interest income (12,867) (7,646) - -Gain on disposal of property, plant
and equipment (148) (21) - -Unrealised foreign exchange (gain)/loss (160) 1,639 - -Employee benefits expense 655 640 - -
Operating profit/(loss) before workingcapital changes 972,951 695,289 (664) (390)
Changes in working capital:Inventories 643 (2,965) - -Trade and other receivables 9,513 (21,323) - -Trade and other payables 41,462 64,242 12 (14)Deferred revenue 34,592 19,168 - -
Cash generated from/(used in)operations 1,059,161 754,411 (652) (404)
Interest paid (54,438) (71,528) - -Increase in deferred expenditure - (6,424) - -Employee benefits paid (49) (28) - -Taxation paid - (17) - -
Net cash generated from/(used in)operating activities 1,004,674 676,414 (652) (404)
Cash Flow Statements for the year ended 31 December 2004
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74 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
G R O U P C O M P A N Y
2004 2003 2004 2003RM’000 RM’000 RM’000 RM’000
Cash flows from investing activitiesPurchase of property, plant and equipment (519,930) (562,814) - -Amount due from a subsidiary - - 652 404Interest income received 12,613 7,687 - -Proceeds from disposal of property,
plant and equipment 778 1,350 - -
Net cash (used in)/generated from investing activities (506,539) (553,777) 652 404
Cash flows from financing activitiesProceeds from bank borrowings - 90,231 - -Repayment of bank borrowings (201,932) (120,024) - -
Net cash used in financing activities (201,932) (29,793) - -
Net increase in cash and cash equivalents 296,203 92,844 - -
Cash and cash equivalents at beginning of year 338,516 245,672 - -
Cash and cash equivalents at end of year(Note 9) 634,719 338,516 - -
The notes set out on pages 75 to 101 form an integral part of, and should be read in conjunction with,these financial statements.
Cash Flow Statements for the year ended 31 December 2004
(continued)
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Notes to the Financial Statements 31 December 2004
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 75
1. Summary of significant accounting policies
The following accounting policies are adopted by the Group and the Company and are consistentwith those adopted in previous financial years.
(a) Basis of accounting
The financial statements of the Group and of the Company are prepared on the historical costbasis except as disclosed in the notes to the financial statements and in compliance with theprovisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia.
(b) Basis of consolidation
Subsidiaries are those enterprises controlled by the Company. Control exists when the Company hasthe power, directly or indirectly, to govern the financial and operating policies of an enterprise so asto obtain benefits from its activities. The financial statements of subsidiaries are included in theconsolidated financial statements from the date that control effectively commences until the date thatcontrol effectively ceases. Subsidiaries are consolidated using the acquisition method of accounting.
Under the acquisition method of accounting, the results of subsidiaries acquired or disposed areincluded from the date of acquisition or up to the date of disposal. At the date of acquisition,the fair values of the subsidiaries’ net assets are determined and these values are reflected inthe Group financial statements. The difference between the acquisition cost and the fair valuesof the subsidiaries’ net assets is reflected as goodwill or reserve on consolidation as appropriate.
Intragroup transactions and balances and the resulting unrealised profits are eliminated onconsolidation. Unrealised losses resulting from intragroup transactions are also eliminatedunless cost cannot be recovered.
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1. Summary of significant accounting policies (continued)
(c) Property, plant and equipment
Property, plant and equipment, except for freehold land and capital work-in-progress, arestated at cost less accumulated depreciation and impairment losses. Freehold land and capitalwork-in-progress are stated at cost.
Depreciation
Freehold land and capital work-in-progress are not depreciated. All other assets aredepreciated on a straight-line basis over their estimated useful lives except for leasehold landand buildings which are amortised over their remaining leasehold period.
The principal annual rates used are as follows:
Leasehold land and buildings 30 to 99 yearsFreehold buildings 2.0%Motor vehicles 20.0% Computer systems 20.0%Furniture and fittings 10.0% Telecommunications network 10.0%
(d) Investments in subsidiaries
Investments in subsidiaries are held for long term and are stated at cost. Such investmentsare only written down when the Directors are of the opinion that there is a diminution in theirvalues which is other than temporary.
(e) Capitalisation of borrowing costs
Interest incurred in connection with financing the construction and installation of property,plant and equipment, if any, is capitalised until the assets are ready for their intended use.
(f) Impairment
The carrying amount of assets, other than inventories and financial assets (other thaninvestment in subsidiaries), are reviewed at each balance sheet date to determine whetherthere is any indication of impairment. If any such indication exists, the asset’s recoverableamount is estimated. An impairment loss is recognised whenever the carrying amount of anasset or the cash-generating unit to which it belongs exceeds its recoverable amount.Impairment losses are recognised in the income statement.
76 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notes to the Financial Statements 31 December 2004 (continued)
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(f) Impairment (continued)
The recoverable amount is the greater of the asset’s net selling price and its value in use. Inassessing value in use, estimated future cash flows are discounted to their present value usinga pre-tax discount rate that reflects current market assessments of the time value of moneyand the risks specific to the asset. For an asset that does not generate largely independentcash inflows, the recoverable amount is determined for the cash-generating unit to which theasset belongs.
An impairment loss is reversed if there has been a change in the estimates used to determinethe recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceedthe carrying amount that would have been determined, net of depreciation or amortisation, if noimpairment loss has been recognised. The reversal is recognised in the income statement.
(g) Inventories
Inventories are stated at the lower of cost and net realisable value and are determined on aweighted average basis. The costs of trading merchandise comprise purchase costs and otherincidental costs incurred in bringing these merchandise to their present condition and location.
(h) Cash and cash equivalents
Cash and cash equivalents consists of cash in hand, balances and deposits with licensed banksand financial institutions. For the purpose of the cash flow statements, cash and cashequivalents are presented net of bank overdrafts, if any.
(i) Income tax
Tax on the profit or loss for the year comprises current and deferred tax. Income tax isrecognised in the income statement except to the extent that it relates to items recogniseddirectly in equity, in which case it is recognised in equity.
Current tax expense is the expected tax payable on the taxable income for the year, using taxrates enacted or substantially enacted at the balance sheet date, and any adjustment to taxpayable in respect of previous years.
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1. Summary of significant accounting policies (continued)
(i) Income tax (continued)
Deferred tax is provided, using the liability method, on temporary differences arising betweenthe tax bases of assets and liabilities and their carrying amounts in the financial statements.Temporary differences are not recognised for goodwill not deductible for tax purposes and theinitial recognition of assets or liabilities that at the time of the transaction affects neitheraccounting nor taxable profit. The amount of deferred tax provided is based on the expectedmanner of realisation or settlement of the carrying amount of assets and liabilities, using taxrates enacted or substantially enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxableprofits will be available against which the asset can be utilised.
(j) Foreign currency
Transactions in foreign currencies are translated into Ringgit Malaysia at rates approximatingthose ruling at the date of the transactions. Monetary assets and liabilities denominated inforeign currencies at balance sheet date are translated into Ringgit Malaysia at the foreignexchange rates ruling at that date. Foreign exchange differences arising from translation arerecognised in the income statement.
The closing rates used in the translation of foreign currency monetary assets and liabilities areas follows:
2004 2003
1 US Dollar RM3.80 RM3.801 Swiss Franc RM3.35 RM3.061 Special Drawing Rights RM5.88 RM5.651 Euro Dollar RM5.17 RM4.781 Norwegian Kroner RM0.64 RM0.54
(k) Revenue
(i) Goods sold and services rendered
Net revenue include all sales of goods and services, net of rebates and discounts. Revenueare recognised when goods are delivered or services are rendered. Revenue from theprepaid cards that have been sold to customers but where services have not been renderedat the balance sheet date is deferred.
78 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notes to the Financial Statements 31 December 2004 (continued)
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(k) Revenue (continued)
(ii) Interest income
Interest income is recognised in the income statement as it accrues taking into account theeffective yield on the asset.
(l) Expenses
(i) Operating leases
Leases of assets where a significant portion of the risks and rewards of ownership areretained by the lessor are classified as operating leases. Payments made under operatingleases (net of any incentives received from the lessor) are charged to the income statementon the straight line basis over the lease period.
When an operating lease is terminated before the lease period has expired, any paymentrequired to be made to the lessor by way of penalty is recognised as an expense in theperiod in which termination takes place.
(ii) Financing costs
All interest and other ancillary costs incurred in connection with borrowings are expensedas incurred except for those as mentioned in Notes 1(e) and 1(n)(ii).
(m)Intangible asset
Intangible asset comprises a fee paid during the financial period ended 31 December 2001 forthe provision of technology and transfer of technical know-how pursuant to a technicalservices agreement signed between the Company and Telenor Mobile Communications AS, awholly owned subsidiary of Telenor ASA, its ultimate holding company.
The fee paid is amortised on a straight line basis over the remaining period of thetelecommunications license of fifteen years.
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80 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
1. Summary of significant accounting policies (continued)
(n) Deferred expenditure
(i) License fees
License fees are capitalised and amortised over the period of the licenses.
(ii) Ancillary costs of borrowings
Costs specifically incurred to obtain new funding for the purpose of retiring existing loansand finance further network expansion are deferred and amortised over the tenor of thenew loans. Any unamortised portion will be written off proportionately as and when thereis a prepayment of the outstanding loans or lapsed or cancellation of any undrawn loansamount.
(o) Trade and other receivables
Trade and other receivables are stated at cost less allowance for doubtful debts.
Bad debts are written off in the year in which these are identified. Allowances are made fordoubtful debts based on a review of all outstanding balances at the year end.
(p) Employee benefits
(i) Short term employee benefit
Wages, salaries and bonuses are recognised as expenses in the year in which theassociated services are rendered by employees of the Group. Short term accumulatingcompensated absences such as paid annual leave are recognised when services arerendered by employees that increase their entitlement to future compensated absences.Short term non-accumulating compensated absences such as sick leave are recognisedwhen absences occur. Where payment or settlement is deferred and the effect would bematerial, these amounts are stated at their present values.
(ii) Defined contribution plans
Obligations for contributions to defined contribution plans are recognised as an expense inthe income statement as incurred.
Notes to the Financial Statements 31 December 2004 (continued)
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D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 81
(p) Employee benefits (continued)
(iii)Defined benefits plans
The Group operates an unfunded defined benefit plan for its eligible employees. Thebenefits are calculated based on the length of service and the agreed percentages ofeligible employees’ salaries over the period of their employment and are payable uponresignation after completion of minimum employment period of 10 years service or uponretirement age of 55 years. The obligations under the retirement benefit scheme aredetermined based on actuarial valuation by a qualified independent actuary on an annualbasis. That benefit is calculated using the Projected Unit Credit Method in order todetermine its present value. Actuarial gains and losses are recognised as income orexpense over the expected average remaining working lives of the participating employeeswhen cumulative unrecognised actuarial gains or losses exceed 10% of the higher of thepresent value of the defined benefit obligation and the fair value of plan assets. Wherethere are any improvements in benefits for the plan, past service cost is recognisedimmediately to the extent that the benefits are already vested, and otherwise is amortisedon a straight-line basis over the average period until the amended benefits become vested.
The amount recognised in the balance sheet represents the present value of the definedbenefit obligations adjusted for unrecognised actuarial gains and losses, if any, andunrecognised past service cost. Any asset resulting from this calculation is limited to thenet total of any unrecognised actuarial losses and past service cost, and the present valueof any economic benefits in the form of refunds or reductions in future contributions to theplan.
(q) Liabilities
Borrowings and trade and other payables are stated at cost.
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82 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
* The reversal of impairment loss was in respect of impaired assets disposed during the financial year.
2. Property, plant and equipment
Long termLeasehold
GROUP Freehold Freehold land andland buildings buildings
Cost RM’000 RM’000 RM’000
At 1 January 2004 13,912 5,461 9,795Additions - - -Written off/Disposals - - -Transfers - 2,419 -
At 31 December 2004 13,912 7,880 9,795
Depreciation and impairment losses
Accumulated depreciation - 350 639Accumulated impairment losses - - -
At 1 January 2004 - 350 639Depreciation charge for the year - 66 100Written off/Disposals - - -Reversal of impairment loss - - -
Accumulated depreciation - 416 739Accumulated impairment losses - - -
At 31 December 2004 - 416 739
Net book value
At 31 December 2004 13,912 7,464 9,056
At 31 December 2003 13,912 5,111 9,156
For the year ended 31 December 2003Depreciation charge - 62 100Impairment losses - - -
Notes to the Financial Statements 31 December 2004 (continued)
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D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 83
Short termleaseholdland and Motor Computer Furniture Telecommunications Capital
buildings vehicles systems and fittings network work-in-progress TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
14,405 16,710 241,641 28,551 3,301,348 152,954 3,784,777- - - - 3,722 519,916 523,638- (103) (452) (48) (6,608) (74) (7,285)- 3,104 66,960 7,763 487,718 (567,964) -
14,405 19,711 308,149 36,266 3,786,180 104,832 4,301,130
2,429 9,190 115,809 15,959 1,001,400 - 1,145,776- - - - 9,500 - 9,500
2,429 9,190 115,809 15,959 1,010,900 - 1,155,276298 2,481 41,476 3,072 418,060 - 465,553
- (103) (442) (36) (2,592) - (3,173)- - - - (3,482)* - (3,482)
2,727 11,568 156,843 18,995 1,416,868 - 1,608,156- - - - 6,018 - 6,018
2,727 11,568 156,843 18,995 1,422,886 - 1,614,174
11,678 8,143 151,306 17,271 2,363,294 104,832 2,686,956
11,976 7,520 125,832 12,592 2,290,448 152,954 2,629,501
290 1,994 43,044 2,791 368,709 - 416,990- - - - 9,500 - 9,500
DiGi AR 04 08/04/05 3:54hin Page 83
2. Property, plant and equipment (continued)
Long term leasehold land and buildings comprise leasehold interests with an unexpired term inexcess of 50 years.
No interest was capitalised during the current and previous financial year in respect of the property,plant and equipment of the Group.
Property, plant and equipment amounting to RM2.685 billion (2003 : RM2.627 billion) belonging toa subsidiary have been charged to financial and other institutions for credit facilities.
Included in additions for the year is an amount of RM3.7 million (2003 : Nil) related to provisionfor site decommission and restoration costs.
3. Intangible asset
GROUP
2004 2003RM’000 RM’000
Balance as at 1 January 43,022 46,963Less: Amount amortised during the year (3,941) (3,941)
Balance as at 31 December 39,081 43,022
4. Deferred expenditure
GROUP
2004 2003RM’000 RM’000
Licence feesBalance as at 1 January 668 743Less: Amount amortised during the year (75) (75)
Balance as at 31 December 593 668
Ancillary costs of borrowingsBalance as at 1 January 35,006 42,522Add: Amount capitalised during the year - 6,424Less: Amount amortised during the year (Note 16) (20,386) (13,940)
Balance as at 31 December 14,620 35,006
Total deferred expenditure 15,213 35,674
84 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notes to the Financial Statements 31 December 2004 (continued)
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D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 85
5. Investments in subsidiaries
COMPANY
2004 2003RM’000 RM’000
Unquoted shares, at cost 526,501 526,501
Details of the subsidiary companies, which are incorporated in Malaysia, are as follows:
EffectiveName of Company Principal activity ownership interest
2004 2003% %
DiGi Telecommunications Sdn. Bhd. Establishment, maintenance and 100 100provision of telecommunicationsand related services
Subsidiaries of DiGi Telecommunications Sdn. Bhd.
DiGi Services Sdn. Bhd. Property holding and other 100 100related services
Djuice.Com Sdn. Bhd. Dormant 100 100
6. Amount due from a subsidiary
COMPANY
2004 2003RM’000 RM’000
Amount due from a subsidiary 573,439 574,091
The amount due is non-trade, unsecured, interest free and not repayable within the next twelvemonths. In addition, the amount due has been subordinated to the secured lenders of thesubsidiary company.
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7. Inventories
G R O U P
2004 2003RM’000 RM’000
Trading merchandise 13,423 14,066
Included in the trading merchandise balance are those stated at net realisable values ofRM190,000 (2003 : RM174,000).
8. Trade and other receivablesG R O U P C O M P A N Y
2004 2003 2004 2003RM’000 RM’000 RM’000 RM’000
Trade receivables 143,509 145,928 - -Other receivables, deposits and prepayments 33,446 40,725 5 5
176,955 186,653 5 5
Trade receivables are stated net of allowance for doubtful debts of RM8.622 million (2003 :RM15.821 million).
During the financial year, the Group had written off approximately RM14.091 million (2003 :RM15.242 million) of trade receivables balance against the allowance for doubtful debts balancebrought forward.
At 31 December 2004, the Group’s trade receivables balance includes exposure to foreign currencydenominated in US Dollars amounting to USD4.2 million (2003 : USD12.3 million).
9. Cash and cash equivalents
G R O U P
2004 2003RM’000 RM’000
Deposits placed with:Licensed banks 74,365 127,956Other licensed financial institutions 556,108 201,813
630,473 329,769Cash and bank balances 4,246 8,747
634,719 338,516
86 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notes to the Financial Statements 31 December 2004 (continued)
DiGi AR 04 08/04/05 3:54hin Page 86
10. Trade and other payablesG R O U P C O M P A N Y
2004 2003 2004 2003RM’000 RM’000 RM’000 RM’000
Trade payables 68,786 50,977 - -Other payables 64,492 131,546 - -Accruals 614,670 526,685 198 186Customer deposits 2,873 2,807 - -
750,821 712,015 198 186
At 31 December 2004, the Group’s trade and other payables balances include exposure to foreigncurrency denominated in US Dollars amounting to USD13.5 million (2003 : USD9.4 million).
11. Borrowings
G R O U P
2004 2003RM’000 RM’000
Current:Syndicated term loan 136,514 122,863USD Term loan 49,400 49,400Senior secured credit facilities 38,670 29,670
224,584 201,933
Non-current:Syndicated term loan 245,725 382,239USD Term loan 24,700 74,100Senior secured credit facilities 184,845 223,514
455,270 679,853
The syndicated term loan outstanding was part of a syndicated term loan facility of up to RM551.21million secured by a subsidiary company during the financial year ended 30 April 2001 to refinanceoutstanding borrowings and to finance capital expenditure. This is repayable in eight half yearlyunequal instalments over a period of four years which commenced on 31 October 2003 and bearsinterest of 7.5 % (2003 : 7.5% to 7.9%) per annum.
A United States Dollar (“USD”) term loan facility of USD65 million (approximately RM247 million)was obtained during the financial period ended 31 December 2001 by the said subsidiary to financecapital expenditure. The loan is subject to interest of between 2.4% to 3.1% (2003 : 2.4% to3.1%) per annum and repayable in 10 half yearly instalments of USD6.5 million (approximatelyRM24.7 million) which commenced on 31 July 2001.
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88 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
11. Borrowings (continued)
During the financial year ended 31 December 2002, the said subsidiary company had securedadditional syndicated term loan facilities (“senior secured credit facilities”) amounting toapproximately RM1.0 billion to finance capital expenditure. Of this, total amount of approximatelyRM223.5 million has been drawn down (net of repayments made) as at the end of the currentfinancial year. These loans are subject to interest of between 4.0% to 7.5% (2003 : 4.0% to 7.9%)per annum and are repayable in ten to thirteen half yearly instalments, some of which requireunequal instalment payments, and with their repayment dates commencing between March 2003to April 2005.
All the above loans are secured by:
i) A fixed and floating charge over all the assets of a subsidiary company;
ii) Corporate guarantee issued by the Company;
iii) Pledgement of all the shares of a subsidiary company; and
iv) Negative pledge over all the assets of a subsidiary company.
The borrowings of the Group are repayable as follows:-
1 to 2 3 to 5Total Current years years
RM’000 RM’000 RM’000 RM’000
Syndicated term loan 382,239 136,514 245,725 -USD Term loan 74,100 49,400 24,700 -Senior secured credit facilities 223,515 38,670 106,590 78,255
679,854 224,584 377,015 78,255
12. Share capital
G R O U P A N D C O M P A N Y
2004 2003RM’000 RM’000
Ordinary shares of RM1 each
Authorised 1,000,000 1,000,000
Issued and fully paid 750,000 750,000
Notes to the Financial Statements 31 December 2004 (continued)
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D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 89
13. Deferred tax liabilities
The amounts, determined after appropriate offsetting, are as follows:
G R O U P
2004 2003RM’000 RM’000
Deferred tax liabilities 385,116 312,105Deferred tax assets (188,432) (244,909)
196,684 67,196
Deferred tax liabilities and assets above are offset as there is a legally enforceable right to set offcurrent tax assets against current tax liabilities and that the deferred taxes relate to the sametaxation authority.
The components of recognised deferred tax assets and liabilities (before offsetting) are as follows:
G R O U P
2004 2003RM’000 RM’000
Property, plant and equipment- capital allowances 383,187 309,609
Unabsorbed capital allowances (124,938) (177,791)Unutilised tax losses (63,494) (67,118)Others 1,929 2,496
196,684 67,196
14. Employee benefits
The defined benefit obligations recognised in the balance sheet are as follow:
G R O U P
2004 2003RM’000 RM’000
Present value of unfunded obligations 3,441 2,907Unrecognised actuarial gain 151 79
Liability in the balance sheet 3,592 2,986
DiGi AR 04 08/04/05 3:55hin Page 89
14. Employee benefits (continued)
Liability for defined benefit obligations
The Group operates an unfunded defined benefit plan for its eligible employees. The obligationsunder the retirement benefit scheme are determined based on actuarial valuation by a qualifiedindependent actuary on an annual basis.
The principal assumptions used in the actuarial valuation are:
a) discount rate of 7% per annum; and
b) salary increases of 8% per annum for year ended 31 December 2004 and thereafter.
Movements in the net liability recognised in the balance sheets
G R O U P
2004 2003RM’000 RM’000
Net liability at 1 January 2,986 2,374Benefits paid (49) (28)Expense recognised in the income statements 655 640
Net liability at 31 December 3,592 2,986
Expense recognised in the income statements
G R O U P
2004 2003RM’000 RM’000
Current service cost 451 477Interest on obligations 204 163
Amount included under “staff expenses” 655 640
90 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notes to the Financial Statements 31 December 2004 (continued)
DiGi AR 04 08/04/05 3:55hin Page 90
15. Operating profit/(loss)G R O U P C O M P A N Y
2004 2003 2004 2003RM’000 RM’000 RM’000 RM’000
Operating profit/(loss) is arrived at after charging:Allowance for doubtful debts 6,892 9,568 - -Amortisation expense of
- intangible asset 3,941 3,941 - -- license fees 75 75 - -
Auditors’ remuneration - current year 86 79 12 11- under provision in prior year 7 - 1 -
Directors’ emoluments 500 308 76 72Employee benefits
- defined contribution plans 10,224 8,389 - -- defined benefit plans 655 640 - -
Impairment losses on property, plant and equipment - 9,500 - -
Lease of transmission facilities 46,503 52,969 - -Realised loss on foreign exchange 397 469 - -Rental of equipment 1,711 1,235 - -Rental of land and buildings 61,026 48,225 - -Unrealised loss on foreign exchange - 1,639 - -
and crediting:Bad debts recovered 1,784 1,618 - -Gain on disposal of property, plant
and equipment 148 21 - -Unrealised gain on foreign exchange 160 - - -
The number of employees of the Group and of the Company at the end of the year was 1,549(2003 : 1,450) and Nil (2003 : Nil), respectively.
16. Financing costs
G R O U P
2004 2003RM’000 RM’000
Interest expense 48,673 54,695Ancillary costs of borrowings (Note 4) 20,386 13,940Others 6,392 5,872
75,451 74,507
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 91
DiGi AR 04 08/04/05 3:55hin Page 91
17. Tax expense
G R O U P
2004 2003RM’000 RM’000
Current tax expense- prior year under provision - 17
Deferred tax expense- current 131,531 62,796- prior year over provision (2,043) (3,500)
129,488 59,313
Reconciliation of effective tax rate/tax expense
GROUP 2004 2003
% RM’000 % RM’000
Profit before taxation 446,843 201,536
Income tax using Malaysian tax rates 28.0 125,116 28.0 56,430Non-deductible expenses 1.6 7,240 3.3 6,743Other items (0.2) (825) (0.2) (377)
29.4 131,531 31.1 62,796Under provision of tax expense in prior year - - - 17Over provision of deferred tax expense inprior year (0.5) (2,043) (1.7) (3,500)
Effective tax rate/Tax expense 28.9 129,488 29.4 59,313
There is no income tax charge for the Group in the current and previous financial year due to taxsavings of approximately RM265 million (2003 : RM185 million) arising from the utilisation ofunabsorbed capital allowances and utilisation of business tax loss by its subsidiary.
COMPANY 2004 2003
% RM’000 % RM’000
Loss before taxation (664) (390)
Income tax using Malaysian tax rates (28.0) (186) (28.0) (109)Non-deductible expenses 28.0 186 28.0 109
Effective tax rate/Tax expense - - - -
92 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notes to the Financial Statements 31 December 2004 (continued)
DiGi AR 04 08/04/05 3:55hin Page 92
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 93
18. Earnings per ordinary share — Group
The calculation of earnings per share is based on the Group’s net profit attributable to ordinaryshareholders of RM317.4 million (2003 : RM142.2 million) and the weighted average number ofordinary shares outstanding during the year of 750.0 million (2003 : 750.0 million).
19. Holding company
The ultimate holding company is Telenor ASA, a company incorporated in Norway and listed on theOslo Stock Exchange, Norway and NASDAQ, United States of America.
20. Segmental information
Segment information is presented in respect of the Group’s business and geographical segments.The primary reporting format by business segments, is based on the Group’s management andinternal reporting structure. Inter-segment pricing is determined on an arm’s length basis.
Segment results, assets and liabilities include items directly attributable to a segment as well asthose that can be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning and corporate assets, interest-bearing loans and general enterprise expenses.
Segment capital expenditure is the total cost incurred during the year to acquire segment assetsthat are expected to be used for more than one year.
Business segments
The Group comprises the following main business segments:
Mobile Provision of mobile communication services to businesses, individuals andother operators through its operating unit, DiGi Telecommunications Sdn. Bhd.
International Provision of international gateway network which offers cross borderinterconnection and related services, through its operating unit, DiGiTelecommunications Sdn. Bhd.
Geographical segments
The Group’s business segments operate mainly in Malaysia, the home country of the Company andits operating subsidiary companies. No other individual country contributed more than 10% of theconsolidated revenue and assets.
In presenting information on the basis of geographical segments, segment revenue is based on thegeographical location of customers. Segment assets are also based on the geographical location ofassets.
DiGi AR 04 08/04/05 3:55hin Page 93
20. Segmental information (continued)
Mobile International2004 2003 2004 2003
GROUP RM’000 RM’000 RM’000 RM’000
Business segments
Revenue from external customers 1,947,081 1,464,953 273,933 235,942Inter-segment revenue - - - -
Total revenue 1,947,081 1,464,953 273,933 235,942
Segment results 467,877 283,254 78,551 25,895
Unallocated expenses
Operating profit Financing costsInterest income
Profit before taxationTax expense
Net profit for the year
Segment assets 2,760,509 2,701,532 133,822 148,863Unallocated assets
Total assets
Segment liabilities 818,585 752,152 74,198 59,119Unallocated liabilities
Total liabilities
Capital expenditure 515,330 553,283 7,446 8,228Depreciation, amortisation
and impairment losses 441,798 397,231 23,463 19,753Non-cash expenses other
than depreciation, amortisation and impairment losses 327 2,142 20 111
94 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notes to the Financial Statements 31 December 2004 (continued)
DiGi AR 04 08/04/05 3:55hin Page 94
Others Eliminations Consolidated2004 2003 2004 2003 2004 2003
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
12,689 12,634 - - 2,233,703 1,713,529 2,703 5,784 (2,703) (5,784) - -
15,392 18,418 (2,703) (5,784) 2,233,703 1,713,529
1,999 (8,732) (30) - 548,397 300,417
(38,970) (32,020)
509,427 268,397(75,451) (74,507)12,867 7,646
446,843 201,536(129,488) (59,313)
317,355 142,223
18,772 21,112 - - 2,913,103 2,871,507653,244 375,925
3,566,347 3,247,432
3,143 3,627 - - 895,926 814,898893,228 972,696
1,789,154 1,787,594
862 1,303 - - 523,638 562,814
4,308 13,522 - - 469,569 430,506
- 5 - - 347 2,258
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 95
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20. Segmental information (continued)
Malaysia Others+ Consolidated2004 2003 2004 2003 2004 2003
GROUP RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Geographical segments
Revenue fromexternal customers bylocation of customers 2,115,331 1,557,894 118,372 155,635 2,233,703 1,713,529
Segment assets by location of assets 3,545,396 3,225,502 20,951 21,930 3,566,347 3,247,432
Capital expenditure by location of assets 523,589 562,779 49 35 523,638 562,814
+ Others comprise customers which are mostly located in Asia region
21. Contingent liabilities - secured
COMPANY
2004 2003RM’000 RM’000
Guarantees given by the Company to financial institutions for credit facilities granted to its subsidiary 699,854 1,411,786
96 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notes to the Financial Statements 31 December 2004 (continued)
DiGi AR 04 08/04/05 3:55hin Page 96
22. Operating leases
Total future minimum lease payments under non-cancellable operating leases are as follows:
GROUP
2004 2003RM’000 RM’000
Less than one year 8,292 19,325Between one and five years 23,187 1,161More than five years 20,155 -
51,634 20,486
Significant operating lease arrangements of the Group include leases for transmission facilities andland and buildings to support its telecommunications operations. The tenure of these leases rangebetween one to nine years, with options to renew. None of the leases include contingent rentals.
23.Commitments
GROUP
2004 2003RM’000 RM’000
Capital expenditure commitments in respect of property, plantand equipment:
Authorised and contracted for 250,000 109,000
Authorised but not contracted for 146,000 183,000
24. Related parties
Controlling related party relationships are as follows:
i) The ultimate holding company as disclosed in note 19.
ii) Its subsidiaries as disclosed in note 5.
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 97
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24. Related parties (continued)
Significant transactions and balances with related parties of the Group during the year are as follows:
Transactions Balance due from/(to) at2004 2003 2004 2003
RM’000 RM’000 RM’000 RM’000
With the intermediate holding company
- Telenor Mobile Communications ASProfessional and personnel services rendered - 4,534 - (324)
With fellow subsidiary companies
- Telenor Global Services AS (291) 249Sales of interconnection serviceson international traffic 1,145 2,620Purchase of interconnection serviceson international traffic 1,337 1,172
- Telenor Consult ASPersonnel services rendered 6,171 3,601 (1,682) (666)
With companies in which a Director of the Company, Tan Sri Dato’ Seri Vincent Tan Chee Yioun is deemed to have an interest
- Berjaya General Insurance Bhd.Insurance premiums 5,242 6,160 (6) (52)
- Berjaya Registration Services Sdn. Bhd.Printing and mailing services 4,638 3,494 (783) (583)
- Convenience Shopping Sdn. Bhd.Sales of prepaid cards and reload coupons 34,562 16,668 3,785 2,837
- Cosway (M) Sdn. Bhd.Sales of prepaid cards and reload coupons 5,326 6,492 798 1,068
- MOL AccessPortal Bhd.Sales of prepaid cards and soft pins 2,746 3,260 232 201
- Pentagon Engineering Sdn. Bhd.Construction of transmission towers and sites 6,160 5,639 - (2,914)
- Roda Indah Motors Sdn. Bhd.Purchase of motor vehicles - 1,648 - (639)
The transactions above have been entered into in the normal course of business and have been establishedunder the terms that are no less favourable than those arranged with independent third parties.
98 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notes to the Financial Statements 31 December 2004 (continued)
DiGi AR 04 08/04/05 3:55hin Page 98
25. Financial instruments
Financial Risk Management Objectives and Policies
In the normal course of conducting its business activities, the Group is exposed to a variety offinancial risks, which include credit, currency, liquidity and interest rate risk. The Group’s overallrisk management programme seeks to minimise potential adverse effects of these risks on thefinancial performance of the Group.
Credit risk
The Group’s credit risk arises in the normal course of business primarily with respect to trade andother receivables and cash and cash equivalents. Credit risk is managed through formalisedpolicies on credit assessment and approvals, credit limits and monitoring procedures. Deposits areplaced only with licensed banks and financial institutions.
The maximum credit risk exposure in respect of trade receivables is limited to the carrying valueof the receivables less allowance for doubtful debts as stated in the financial statements, whereas,the maximum exposure for other receivables, cash and cash equivalents are the reported carryingvalue in the financial statements.
At balance sheet date, there were no significant concentrations of credit risk.
Foreign currency risk
The Group is exposed to foreign currency risk as a result of transactions denominated in foreigncurrency arising from the normal business activities and borrowings. The currency giving rise tothis risk is primarily US dollars. Exposure to foreign currency risk is monitored on an ongoing basisand when considered necessary, the Group will consider using effective financial instruments tohedge its foreign currency risk.
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate bymanagement to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.
Interest rate risk
The Group is exposed to interest rates risk primarily from the deposit placements and interest-bearing financial liabilities. The Group manages its interest rate risk for the interest-earningdeposit 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 interestexpense by obtaining the most favourable interest rates available and by using a mix of fixed andfloating rate debts.
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 99
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25. Financial instruments (continued)
The effective interest rates and maturity terms of the financial assets and liabilities are as follows:
Effective Within Afterinterest rate Total 1 year 1–5 years 5 years
GROUP % RM’000 RM’000 RM’000 RM’000
2004
Financial assetsDeposits placed with licensed banks
and other financial institutions 2.7 630,473 630,473 - -
Financial liabilitiesSyndicated term loan 7.5 382,239 136,514 245,725 -USD Term loan 3.2 74,100 49,400 24,700 -Senior secured credit facilities 5.9 223,515 38,670 184,845 -
2003
Financial assetsDeposits placed with licensed banks
and other financial institutions 2.8 329,769 329,769 - -
Financial liabilitiesSyndicated term loan 7.5 505,102 122,863 382,239 -USD Term loan 2.4 123,500 49,400 74,100 -Senior secured credit facilities 5.8 253,184 29,670 223,514 -
Fair value
The following methods and assumptions are used to determine the fair value of each of the financialassets or liabilities for which it is practicable to estimate their values:
i) Cash and cash equivalents, other receivables and payables
The carrying values of these amounts approximate their fair values due to their short termnature.
ii) Trade receivables and payables
The carrying values of these amounts approximate their fair values because these are subjectto normal trade credit terms and their short term nature.
iii) Amount due from a subsidiary
No disclosure of fair value is made for amount due from a subsidiary as it is not practicable todetermine its fair value with sufficient reliability given this balance has no fixed terms ofrepayment.
100 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notes to the Financial Statements 31 December 2004 (continued)
DiGi AR 04 08/04/05 3:55hin Page 100
25. Financial instruments (continued)
iv) Borrowings
The fair values of the borrowings carried at the balance sheet date are as below:
GROUP
2004 2004 2003 2003Carrying Fair Carrying Fair
amount value amount valueRM’000 RM’000 RM’000 RM’000
Syndicated term loan 382,239 382,239 505,102 505,102USD Term loan 74,100 74,100 123,500 123,500Senior secured credit facilities
- fixed rates 40,000 39,717 40,000 39,625- floating rates 183,515 183,515 213,184 213,184
679,854 679,571 881,786 881,411
The fair value of the senior secured credit facilities, a portion of which was obtained on a fixed ratehas been determined by discounting the relevant cash flows using current interest rates for similarinstruments at the balance sheet date. Apart from this fixed rate loan, the fair values of all theother loans are their carrying amounts as their interest rates are on floating rate basis.
26. Event subsequent to the balance sheet date
Subsequent to year end, the telecommunication subsidiary company had made a partialprepayment amounting to RM300.0 million proportionately on all its credit facilities outstanding asat 31 December 2004 out of its excess cash available.
27. Comparatives
The following comparatives have been reclassified to conform with the current year’s presentation:
GROUP
As previouslyAs reclassified stated
RM’000 RM’000
Income statementsCost of materials and traffic expenses 453,597 - Sales and marketing expenses 204,357 - Operations and maintenance 74,634 - Rental expenses 52,622 - Operating expenses - 920,093Other operating expenses 134,883 -
920,093 920,093
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No. Location Tenure
1 H.S. (D) No 92086 & 92087, P.T. No 9 & No 10, FreeholdPekan Seremban Jaya, Daerah Seremban, Negeri Sembilan
2 Unit No 202-4-11, Sri Bandar Besi, FreeholdJalan Sungai Besi, Sungai Besi, Kuala Lumpur
3 Unit No C16-2, Indera Subang UEP, Jalan UEP 6/2L, FreeholdUEP Subang Jaya, Petaling Jaya, Selangor
4 No 1-16.2, 16th Floor, Union Height, Taman Yan, FreeholdJalan Klang Lama , Kuala Lumpur
5 3rd Floor, Unit Pt 4888/4786 C, Block TC-14, FreeholdTaman Sri Gombak, Jalan Batu Caves, Selangor
6 4572, 7th Floor, Sri Jelatek Condominiums, FreeholdSection 10, Wangsa Maju, Kuala Lumpur
7 32 , PLO 151 Jln Angkasa Mas Utama, 30 years leaseKawasan Perindustrian Tebrau II, 81100 Johor Bahru (expiring in 2023)
8 HS (D) 77, No. P.T. PTBM/A/081, Mukim 1, Leasehold 60 yearsKawasan Perusahaan Perai, District Seberang Perai Tengah, Pulau Pinang (expiring in 2033)
9 Lot 36, Sedco Light Industrial Leasehold 60 yearsEstate, Jalan Kelombong, Kota Kinabalu, Sabah (expiring in 2034)
10 Lot 1220, Section 66, Kuching Town Leasehold 60 yearsLand District, Sarawak (expiring in 2036)
11 No 112, Semambu Industrial Estate, Leasehold 66 yearsKuantan, Pahang (expiring in 2041)
12 Unit 16-12-1, 12th Floor, Cloud View Tower, Leasehold 99 yearsTaman Supreme, Cheras, Kuala Lumpur (expiring in 2076)
13 Unit No M803, 8th Floor, Sunrise Park, Leasehold 99 yearsAmpang, Kuala Lumpur (expiring in 2088)
14 Part of Lot PT 11702, HS(D) 10654, Leasehold 99 yearsMukim 1, District of Bentong, Pahang (expiring in 2091)
15 Plot D-38, Taman Industri Prima Kota Fasa 1, Leasehold 99 yearsSector 3, Bandar Indera Mahkota, Kuantan, Pahang (expiring in 2097)
16 Ptd 1490, Mukim of Jemaluang Leasehold 99 yearsDistrict of Mersing, Johor Darul Takzim (expiring in 2098)
17 PN 89926, Lot 191363 Leasehold 90 yearsMukim Hulu Kinta, Daerah Kinta, Negeri Perak (expiring in 2081)
18 Lot No 54, Jalan 6/2, Kawasan Perindustrian Seri Kembangan, Leasehold 99 years 43000 Seri Kembangan, Selangor (expiring in 2091)
19 Lot 2728, Miri Concession Land District, Leasehold 60 yearsLopeng, Miri, Sarawak (expiring in 2027)
20 H.S.(D) 54842, P.T. No. 152, Mukim of Damansara, FreeholdDistrict of Petaling Jaya, Selangor
21 No. 24, Jalan KIP 7, Taman Perindustrian KIP, Freehold52200 Kuala Lumpur
Notes: The Group does not adopt a revaluation policy on landed properties.N/A denotes “Not Applicable”
List of Properties as at 31 December 2004
102 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
DiGi AR 04 08/04/05 4:04hin Page 102
Description/ Date of Area Age Of Building Net Book ValueExisting Use Acquisition (Years) As At 31.12.2004
RM’000
Land with a building / 29.12.1997 22,529 sq ft 7 792 Telecommunications Centre
Apartment/ 26.01.1995 802 sq ft 9 109 Housing base transceiver equipment
Apartment/ 04.02.1995 2,429 sq ft 11 581Housing base transceiver equipment
Apartment/ 25.01.1995 1,249 sq ft 10 218 Housing base transceiver equipment
Apartment/ 29.03.1995 1,319 sq ft 9 83 Housing base transceiver equipment
Apartment/ 07.02.1995 1,115 sq ft 9 169 Housing base transceiver equipment
Land with a building/ 12.05.1995 1.58 acres 10 1,236 Telecommunications Centre
Land with a building / 23.03.1995 1 acre 30 2,072 Telecommunications Centre
Land with a building/ 12.06.1995 0.938 acre 24 2,297 Telecommunications Centre
Land with a building / 15.08.1995 4,124 sq ft 9 1,946 Telecommunications Centre
Land with a building / 07.07.1995 4 acres 22 2,242 Telecommunications Centre
Apartment/ 08.02.1995 1,400 sq ft 16 192 Housing base transceiver equipment
Apartment/ 22.03.1995 1,100 sq ft 13 100 Housing base transceiver equipment
Land with a building / 07.08.1996 7.5 acres 10 6,150 Earth Station Complex
Land with Fixed Line 14.11.1997 25,521 sq ft 7 401 switch and base transceiver station
Land with trunk station 17.08.1999 40,000 sq ft 5 116
Land with a building / 15.07.1999 5,942 sq ft 5 215 Telecommunications Centre
Land with a building / 23.05.2000 18,050 sq ft 15 1,888 Telecommunications Centre
Land with a building / 29.09.2000 4,937 sq ft N/A 1,114 Telecommunications Centre
Land with a building under 19.07.2001 284,485 sq ft N/A 16,643 construction
Land with a building / 21.08.2002 17,847 sq ft 8 2,780 Telecommunications Centre
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 103
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At the Annual General Meeting held on 28 April 2004, the Company obtained a shareholders’ mandateto allow the Group to enter into recurrent related party transaction of a revenue or trading nature.
In accordance with Paragraph 4.1.5 of Practice Note No. 12/2001 of Listing Requirement of BursaMalaysia, the details of recurrent related party transactions conducted during the financial year ended31 December 2004 pursuant to the shareholders’ mandate are disclosed as follows:
AmountDiGi and/or Nature of Transaction transacted
DiGi Group with the following its subsidiary undertaken by/provided to during theRelated Parties companies DiGi and/or its subsidiaries financial year
RM’000
Telenor Group of CompaniesTelenor Consult AS DTSB Personnel services payable 6,171
BGroup and its unlisted related companiesBerjayaCity Sdn Bhd (formerly known DTSB Rental payable 12
as Eminent Capital Sdn Bhd)
Berjaya Registration Services Sdn Bhd DiGi Receipt of share registration 4,638
DTSB and printing to mailing services
Berjaya Soutex Sdn Bhd DTSB Rental payable 20
Inter-Pacific Trading Sdn Bhd DTSB General trading purchases 385
Novacomm Integrated Sdn Bhd DTSB Receipt of advertising and 92
publishing services
VRS Malaysia Sdn Bhd (formerly known DTSB Rental payable 36
as Berjaya Cycles Sdn Bhd)
BCapital and its unlisted related companyEng Securities Sdn Bhd DTSB Rental payable 8
BLand and its unlisted related companiesAmat Muhibah Sdn Bhd DTSB Rental payable 48
Berjaya Georgetown Hotel (Penang) DTSB Rental payable 40
Sdn Bhd
Berjaya Golf Resort Bhd DTSB Rental payable 16
Berjaya Guard Services Sdn Bhd DTSB Receipt of security services rendered 635
Berjaya Land Development Sdn Bhd DTSB Rental payable 12
Bukit Kiara Resort Bhd DTSB Rental payable 24
Gemilang Cergas Sdn Bhd DTSB Rental payable 60
Klasik Mewah Sdn Bhd DTSB Rental payable 472
Kota Raya Development Sdn Bhd DTSB Rental payable 23
Noble Circle (M) Sdn Bhd DTSB 1. Rental payable 719
2. Receipt of promotion and 122
advertising services
Nural Enterprise Sdn Bhd DTSB Rental payable 16
Pakar Angsana Sdn Bhd DTSB Rental payable 40
Disclosure of Recurrent Related Party Transactions
104 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
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D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 105
AmountDiGi and/or Nature of Transaction transacted
DiGi Group with the following its subsidiary undertaken by/provided to during theRelated Parties companies DiGi and/or its subsidiaries financial year
RM’000
BLand and its unlisted related companies (continued)Securiservices Sdn Bhd DTSB Rental payable 40
Sinar Merdu Sdn Bhd DTSB Rental payable 32
Tiram Jaya Sdn Bhd DTSB Rental payable 36
BToto and its unlisted related companySports Toto Malaysia Sdn Bhd DTSB Rental payable 119
Cosway Corp and its unlisted related companiesSinger (M) Sdn Bhd DTSB Rental payable 4
Stephen Properties Sdn Bhd DTSB Rental payable 120
Unza (M) Sdn Bhd DTSB Rental payable 2
DunBush and its unlisted related companiesDunham-Bush Industries Sdn Bhd DTSB Rental payable 14
Dunham-Bush (Malaysia) Bhd DTSB Rental payable 12
Topaire Sales & Services Sdn Bhd DTSB Purchase and servicing of air conditioning 75
Hyundai-Berjaya and its unlisted related companiesHyundai-Berjaya Sdn Bhd DTSB Rental payable 18
Pentagon Engineering Sdn Bhd DTSB Construction of transmission tower, 6,160
design and installation of base
transmission sites
Matrix and its unlisted related companyBerjaya Times Square Sdn Bhd DTSB Rental payable 556
Other companies related to TSVTHyumal Motor Sdn Bhd DTSB Repair and purchase of motor vehicles 50
Roda Indah Motors Sdn Bhd DTSB Purchase of motor vehicles 200
Quasar Carriage Sdn Bhd DTSB Repair & maintenance of motor vehicles 7
Notes: 1. Telenor Consult AS is a wholly owned subsidiary of Telenor ASA which is also the ultimate holding company of DiGi.Com Berhad (“DiGi”).2. Berjaya Group Berhad (“BGroup”), Berjaya Capital Berhad (“BCapital”), Berjaya Land Berhad (“BLand”), Berjaya Sports Toto
Berhad (“BToto”), Cosway Corporation Berhad (“Cosway Corp”), Dunham-Bush (Malaysia) Bhd (“DunBush”), Matrix InternationalBerhad (“Matrix”) and other companies are companies in which Tan Sri Dato’ Seri Vincent Tan Chee Yioun (“TSVT”), a formerDirector and an existing substantial shareholder is deemed to have an interest.
3. Unza (M) Sdn Bhd ceased to be a subsidiary of Cosway Corp Bhd w.e.f 15 January 2004. The amount disclosed above relates totransactions occurred before the said date.
4. Hyundai-Berjaya Corporation Berhad (“Hyundai-Berjaya”) and Hyumal Motor Sdn Bhd ceased to be associated companies ofBGroup w.e.f 1 December 2004. The amount disclosed above relates to transactions occurred before the said date.
5. DiGi Telecommunications Sdn Bhd (“DTSB”), is a wholly owned subsidiary of DiGi.
DiGi AR 04 08/04/05 4:04hin Page 105
No. of Ordinary Shares of RM1.00 each
The Company Direct Interest % Deemed Interest %
- - - - -
Ultimate Holding Company No. of Ordinary Shares of NOK6 each TELENOR ASA Direct Interest % Deemed Interest %
Arve Johansen 44,977 0.0026 - -
Gunnar Johan Bertelsen 350 0.0000 - -
Christian Storm 1,582 0.0001 - -
Ragnar Holmen Korsaeth 3,515 0.0002 - -
No. of Options over Ordinary Shares of NOK6 each Direct Interest % Deemed Interest %
Arve Johansen 200,000 0.0114 - -
Ragnar Holmen Korsaeth 43,333 0.0025 - -
Save as disclosed, none of the other Directors in office have any interest in the shares of the Company orits related corporations as at 23 March 2005.
Statement of Directors’ Shareholdings as at 23 March 2005
106 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Substantial Shareholders as at 23 March 2005
No. of SharesName Direct Interest % Deemed Interest %
1. Telenor Asia Pte Ltd 457,499,630 61.00 - -
2. Telenor Mobile Communications AS - - 457,499,630 (a) 61.00
3. Telenor Mobile Holding AS - - 457,499,630 (b) 61.00
4. Telenor ASA - - 457,499,630 (c) 61.005. Tan Sri Dato’ Seri Vincent Tan Chee Yioun 20,518,432 2.74 30,248,392 (d) 4.036. Employees Provident Fund Board 42,965,009 5.73 - -
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.
(d) Deemed interested by virtue of his interest in Berjaya VTCY Sdn Bhd and deemed interest in Prime Credit Leasing Sdn Bhd,
Immediate Capital Sdn Bhd and Berjaya General Insurance Berhad.
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D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 107
Statistics on Shareholdings as at 23 March 2005
Analysis of shareholdings
Size of shareholdings No. of shareholders % No. of shares %
less than 100 217 5.23 3,445 0.00100 - 1,000 1,649 39.76 1,416,229 0.191,001 - 10,000 1,685 40.62 6,180,102 0.8210,001 - 100,000 375 9.04 13,789,564 1.84100,001 - 37,499,999 219 5.28 271,111,030 36.1537,500,000 * and above 3 0.07 457,499,630 61.00
Total 4,148 100.00 750,000,000 100.00
Note:
1. There is only one class of shares in the paid-up capital of the Company. Each share entitles the holder to one vote.
2. * Denotes 5% of the issued and paid-up capital of the Company.
List of Thirty (30) Largest Shareholders as at 23 March 2005
Name of shareholders No. of shares %
1. Citicorp Nominees (Asing) Sdn Bhd 247,000,000 32.93
Telenor Asia Pte Ltd
2. Citicorp Nominees (Asing) Sdn Bhd 105,499,630 14.07
Telenor Asia Pte Ltd (DiGi)
3. Citicorp Nominees (Asing) Sdn Bhd 105,000,000 14.00
Telenor Asia Pte Ltd (DiGi / Moratorium)
4. Employees Provident Fund Board 31,850,820 4.25
5. Scotia Nominees (Tempatan) Sdn Bhd 24,850,666 3.31
Pledged Securities Account For Tan Sri Dato’ Seri Vincent Tan Chee Yioun
6. Scotia Nominees (Tempatan) Sdn Bhd 23,179,094 3.09
Pledged Securities Account For Berjaya VTCY Sdn Bhd
7. Lembaga Tabung Haji 8,034,900 1.07
8. Dato Ahmad Sebi Bin Bakar 6,580,196 0.88
9. Malaysia Nominees (Tempatan) Sendirian Berhad 5,900,594 0.79
Great Eastern Life Assurance (Malaysia) Berhad (Par 1)
10. Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd 5,380,481 0.72
Pledged Securities Account For Malpac Management Sdn Bhd (3349 Sban)
11. AMMB Nominees (Tempatan) Sdn Bhd 4,599,500 0.61
Amtrustee Berhad For SBB Dana Al-Ihsan (5-2-7)
DiGi AR 04 08/04/05 4:04hin Page 107
List of Thirty (30) Largest Shareholders as at 23 March 2005
(continued)
108 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Name of shareholders No. of shares %
12. Amanah Raya Nominees (Tempatan) Sdn Bhd 4,252,600 0.57
Public Growth Fund
13. Mayban Nominees (Tempatan) Sdn Bhd 3,991,495 0.53
Mayban Trustees Berhad For Public Ittikal Fund (N14011970240)
14. AM Nominees (Tempatan) Sdn Bhd 3,959,500 0.53
Employees Provident Fund Board (A/C 1)
15. Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd 3,551,523 0.47
Prime Credit Leasing Sdn Bhd For Alam Nusantara Sdn Bhd
16. Amanah Raya Nominees (Tempatan) Sdn Bhd 3,216,800 0.43
Public Islamic Equity Fund
17. Mayban Nominees (Tempatan) Sdn Bhd 3,040,000 0.41
Mayban Trustees Berhad For Public Regular Savings Fund (N14011940100)
18. Citicorp Nominees (Tempatan) Sdn Bhd 2,831,029 0.38
ING Insurance Berhad (INV-IL PAR)
19. Amanah Raya Nominees (Tempatan) Sdn Bhd 2,796,700 0.37
Public Equity Fund
20. Tan Sri Dato’ Tan Chee Sing 2,705,000 0.36
21. HSBC Nominees (Asing) Sdn Bhd 2,586,800 0.34
Abu Dhabi Investment Authority
22. Amanah Raya Nominees (Tempatan) Sdn Bhd 2,577,500 0.34
Public Savings Fund
23. HSBC Nominees (Tempatan) Sdn Bhd 2,475,589 0.33
Nomura Asset Mgmt Sg For Employees Provident Fund
24. PM Nominees (Tempatan) Sdn Bhd 2,460,771 0.33
Malpac Management Sdn Bhd For Ahmad Sebi Bin Bakar
25. Citicorp Nominees (Asing) Sdn Bhd 2,293,100 0.31
GSCO For Indus Asia Pacific Fund Ltd
26. RHB Nominees (Tempatan) Sdn Bhd 2,278,900 0.30
RHB Asset Management Sdn Bhd For Kumpulan Wang Simpanan Pekerja
27. HLG Nominee (Tempatan) Sdn Bhd 2,246,000 0.30
PB Trustee Services Berhad For HLG Growth Fund
28. Cartaban Nominees (Asing) Sdn Bhd 2,168,000 0.29
SSBT Fund 2S6A For Dupont Pension Trust
29. HSBC Nominees (Asing) Sdn Bhd 2,000,000 0.27
BNY Brussels For JF Asean Fund
30. Citicorp Nominees (Asing) Sdn Bhd 2,000,000 0.27
Dresdner BK For Persistency
621,307,188 82.84
DiGi AR 04 08/04/05 4:04hin Page 108
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 109
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the Eighth Annual General Meeting of DiGi.Com Berhad will be held
at Mayang Sari Grand Ballroom, Lower Level 3, JW Marriott Hotel Kuala Lumpur, 183 Jalan Bukit
Bintang, 55100 Kuala Lumpur on Tuesday, 10 May 2005 at 10.00 a.m. for the following purposes:-
Agenda
As Ordinary Business
1. To receive and adopt the audited financial statements of the Company
for the year ended 31 December 2004 and the Directors’ and Auditors’
Reports thereon. Ordinary Resolution 1
2. To re-elect the following Directors retiring pursuant to the Company’s
Articles of Association:-
Under Article 98(A)
i) Arve Johansen Ordinary Resolution 2
Under Article 98(E)
i) Christian Storm Ordinary Resolution 3
ii) Ragnar Holmen Korsaeth Ordinary Resolution 4
3. To appoint Messrs Ernst & Young, having consented to act, as Auditors
of the Company for the financial year ending 31 December 2005 in
place of the retiring Auditors, Messrs KPMG, to hold office until the
conclusion of the next Annual General Meeting and to authorise the
Directors to fix their remuneration. Ordinary Resolution 5
Notice of Nomination pursuant to Section 172(11) of the Companies Act,
1965 (a copy of which is annexed and marked as “Annexure A” in the
2004 Annual Report) has been received by the Company for the
nomination of Messrs Ernst & Young for the appointment as Auditors in
place of the retiring Auditors, Messrs KPMG.
As Special Business
To consider and, if thought fit, pass the following ordinary resolutions:-
4. Authority to Allot and Issue Shares Pursuant to Section 132D of the
Companies Act, 1965
DiGi AR 04 08/04/05 4:04hin Page 109
As Special Business
To consider and, if thought fit, pass the following ordinary resolutions:-
4. Authority to Allot and Issue Shares Pursuant to Section 132D of the
Companies Act, 1965
“That, subject always to the Companies Act, 1965, the Articles of
Association of the Company and the approvals of the relevant
governmental/regulatory authorities, the Directors be and are hereby
empowered, pursuant to Section 132D of the Companies Act, 1965,
to issue shares in the Company from time to time and upon such terms
and conditions and for such purposes as the Directors may deem fit
provided that the aggregate number of shares issued pursuant to this
resolution does not exceed 10% of the issued share capital of the
Company for the time being and that such authority shall continue in
force until the conclusion of the next Annual General Meeting of the
Company.” Ordinary Resolution 6
5. Proposed Renewal of Existing Shareholders’ Mandate For Recurrent
Related Party Transactions of a Revenue or Trading Nature and/or New
Mandate for Additional Recurrent Related Party Transactions of a Revenue
or Trading Nature To Be Entered With Telenor ASA (“Telenor”) And
Persons Connected With Telenor
“That, subject to the provisions of the Listing Requirements of Bursa
Malaysia Securities Berhad, approval be and is hereby given 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 18 April 2005 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:-
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;
110 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
“That, subject always to the Companies Act, 1965, the Articles of
Association of the Company and the approvals of the relevant
governmental/regulatory authorities, the Directors be and are hereby
empowered, pursuant to Section 132D of the Companies Act, 1965,
to issue shares in the Company from time to time and upon such terms
and conditions and for such purposes as the Directors may deem fit
provided that the aggregate number of shares issued pursuant to this
resolution does not exceed 10% of the issued share capital of the
Company for the time being and that such authority shall continue in
force until the conclusion of the next Annual General Meeting of the
Company.” Ordinary Resolution 6
5. Proposed Renewal of Existing Shareholders’ Mandate For Recurrent
Related Party Transactions of a Revenue or Trading Nature and New
Mandate for Additional Recurrent Related Party Transactions of a Revenue
or Trading Nature To Be Entered With Telenor ASA (“Telenor”) And
Persons Connected With Telenor
“That, subject to the provisions of the Listing Requirements of Bursa
Malaysia Securities Berhad, approval be and is hereby given 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 18 April 2005 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:-
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
143(1) of the Companies Act, 1965 (but shall not extend to such
extension as may be allowed pursuant to Section 143(2) of the
Companies Act, 1965); or
iii) revoked or varied by resolution passed by the shareholders at a
general meeting;
Notice of Annual General Meeting (continued)
DiGi AR 04 08/04/05 4:04hin Page 110
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
143(1) of the Companies Act, 1965 (but shall not extend to such
extension as may be allowed pursuant to Section 143(2) of the
Companies Act, 1965); or
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 name 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 transactions as authorised by this Ordinary Resolution.” Ordinary Resolution 7
6. Proposed Renewal of Existing Shareholders’ Mandate For Recurrent Related
Party Transactions of a Revenue or Trading Nature and/or New Mandate
for Additional Recurrent Related Party Transactions of a Revenue or Trading
Nature To Be Entered With Persons Connected With Tan Sri Dato’ Seri
Vincent Tan Chee Yioun
“That, subject to the provisions of the Listing Requirements of Bursa
Malaysia Securities Berhad, approval be and is hereby given for the
Company and its subsidiaries, to enter into recurrent related party
transactions of a revenue or trading nature with persons connected
with Tan Sri Dato’ Seri Vincent Tan Chee Yioun as specified in Section 2.3
of the Circular to Shareholders dated 18 April 2005 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
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 111
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 name 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 transactions as authorised by this Ordinary Resolution.” Ordinary Resolution 7
6. Proposed Renewal of Existing Shareholders’ Mandate For Recurrent Related
Party Transactions of a Revenue or Trading Nature and New Mandate
for Additional Recurrent Related Party Transactions of a Revenue or Trading
Nature To Be Entered With Persons Connected With Tan Sri Dato’ Seri
Vincent Tan Chee Yioun
“That, subject to the provisions of the Listing Requirements of Bursa
Malaysia Securities Berhad, approval be and is hereby given for the
Company and its subsidiaries, to enter into recurrent related party
transactions of a revenue or trading nature with persons connected
with Tan Sri Dato’ Seri Vincent Tan Chee Yioun as specified in Section 2.3
of the Circular to Shareholders dated 18 April 2005 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:-
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 143(1) of the
Companies Act, 1965 (but shall not extend to such extension as may be
allowed pursuant to Section 143(2) of the Companies Act, 1965); or
iii) revoked or varied by resolution passed by the shareholders at a general
meeting;
DiGi AR 04 08/04/05 4:04hin Page 111
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 name 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 transactions as authorised by this Ordinary Resolution.” Ordinary Resolution 8
By Order of the Board
Tai Yit Chan MAICSA 7009143
Liew Irene MAICSA 7022609
Company Secretaries
Kuala Lumpur
18 April 2005
Notes:-
(A) Appointment of Proxy
i) A member entitled to attend and vote at a meeting of the Company is entitled to appoint
one (1) proxy only to attend and vote in his stead. A proxy may but need not be a member
of the Company.
ii) A member of the Company who is an authorised nominee as defined under the Securities
Industry (Central Depositories) Act 1991 may appoint one (1) proxy in respect of each
securities account.
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 seal or
under hand of an officer or attorney duly authorised.
iv) The instrument appointing a proxy must be deposited at the Company’s Registered Office at
Level 7, Setia 1, 15 Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur not less than
48 hours before the time appointed for holding the meeting or any adjournment thereof.
112 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )
Notice of Annual General Meeting (continued)
DiGi AR 04 08/04/05 4:04hin Page 112
Notes:-
(A) Appointment of Proxy
i) A member entitled to attend and vote at a meeting of the Company is entitled to appoint
one (1) proxy only to attend and vote in his stead. A proxy may but need not be a member
of the Company.
ii) A member of the Company who is an authorised nominee as defined under the Securities
Industry (Central Depositories) Act 1991 may appoint one (1) proxy in respect of each
securities account.
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 seal or
under hand of an officer or attorney duly authorised.
iv) The instrument appointing a proxy must be deposited at the Company’s Registered Office at
Level 7, Setia 1, 15 Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur not less than
48 hours before the time appointed for holding the meeting or any adjournment thereof.
(B) Special Business
1. Resolution 6 is proposed pursuant to Section 132D of the Companies Act, 1965 and if
passed, will give the Directors of the Company, from the date of the above annual general
meeting, authority to issue and allot shares from the unissued share capital of the Company
for such purposes as the Directors may deem fit and in the interest of the Company. This
authority, unless revoked or varied by the Company in general meeting, will expire at the
conclusion of the next Annual General Meeting of the Company.
2. Resolutions 7 and 8 if passed, will allow the Company and its subsidiaries to enter into
recurrent related party transactions in accordance with paragraph 10.09 of the 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.
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 113
(B) Special Business
1. Resolution 6 is proposed pursuant to Section 132D of the Companies Act, 1965 and if
passed, will give the Directors of the Company, from the date of the above annual general
meeting, authority to issue and allot shares from the unissued share capital of the Company
for such purposes as the Directors may deem fit and in the interest of the Company. This
authority, unless revoked or varied by the Company in general meeting, will expire at the
conclusion of the next Annual General Meeting of the Company.
2. Resolutions 7 and 8 if passed, will allow the Company and its subsidiaries to enter into
recurrent related party transactions in accordance with paragraph 10.09 of the 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.
Statement Accompanying Notice of Annual General Meeting pursuant to Paragraph 8.28(2) of the
Bursa Malaysia Securities Berhad Listing Requirements
1. The particulars of Directors who stand for re-election are set out in the relevant pages of the
Annual Report as follows:-
Name of Director Directors’ Profile Directors’ Shareholdings
1 Arve Johansen Page 8 Page 106
2 Christian Storm Page 11 Page 106
3 Ragnar Holmen Korsaeth Page 11 Page 106
There were four Board Meetings held during the financial year ended 31 December 2004. The
details of Directors’ attendance at Board Meetings are set out on Page 14 of the Annual Report.
Tun Dato’ Seri Dr Lim Chong Eu will not be seeking re-appointment and pursuant to Section 129
of the Companies Act, 1965, he will retire at the conclusion of the Eighth Annual General Meeting
of the Company.
2. Place, date and hour of the Eighth Annual General Meeting of the Company
The Eighth Annual General Meeting of the Company will be held at Mayang Sari Grand Ballroom,
Lower Level 3, JW Marriott Hotel Kuala Lumpur, 183 Jalan Bukit Bintang, 55100 Kuala Lumpur on
Tuesday, 10 May 2005 at 10.00 a.m.
DiGi AR 04 08/04/05 4:04hin Page 113
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 115
Signature of Shareholder(s) or Common Seal
Signed this day of , 2005.
Notes:1. A member entitled to attend and vote at a meeting of the Company is entitled to appoint one (1) proxy only to attend and vote
in his stead. A proxy may but need not be a member of the Company.2. A member of the Company who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act
1991 may appoint one (1) proxy in respect of each securities account.3. 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 seal or under hand of an officer or attorney duly authorised.4. The instrument appointing a proxy must be deposited at the Company’s Registered Office at Level 7, Setia 1, 15 Lorong
Dungun, Damansara Heights, 50490 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting orany adjournment thereof.
Form of Proxy
Ordinary Resolutions For Against
Resolution 1 - To receive and adopt the Audited Financial Statements
Resolution 2 - To re-elect Arve Johansen as Director
Resolution 3 - To re-elect Christian Storm as Director
Resolution 4 - To re-elect Ragnar Holmen Korsaeth as Director
Resolution 5 - To appoint Messrs Ernst & Young as the Company’s auditors in place of the retiring
auditors, Messrs KPMG and to authorise the Directors to determine their remuneration
Resolution 6 - To approve authority to allot and issue shares
Resolution 7 - To approve the Renewal of Existing Shareholders’ Mandate for Recurrent Related Party
Transactions and New Mandate for Additional Recurrent Related Party Transactions to be entered with Telenor ASA (“Telenor”) and persons connected with Telenor
Resolution 8 - To approve the Renewal of Existing Shareholders’ Mandate for Recurrent Related Party
Transactions and New Mandate for Additional Recurrent Related Party Transactions to be entered with persons connected with Tan Sri Dato’ Seri Vincent Tan Chee Yioun
No. of Shares
DiGi.COM BERHAD(Company No.: 425190-X)(Incorporated in Malaysia)
I/We Name in full
I.C. or Company No. CDS Account No.
of Address
being a member of DiGi.COM BERHAD hereby appoint:
I.C. No. Name in full New and Old I.C. Nos.
of
or failing him/her, the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf,
at the Eighth Annual General Meeting of the Company to be held at Mayang Sari Grand Ballroom,
Lower Level 3, JW Marriott Hotel Kuala Lumpur, 183 Jalan Bukit Bintang, 55100 Kuala Lumpur on
Tuesday, 10 May 2005 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. If no specific direction as to voting is given, the proxy will vote or abstain
from voting at his/her discretion.
DiGi AR 04 08/04/05 4:05hin Page 115
fold this flap for sealing
The Secretary
DiGi.Com Berhad (425190-X)
Level 7, Setia 115 Lorong DungunDamansara Heights50490 Kuala Lumpur
2nd fold here
1st fold here
✁
affixstamp
DiGi AR 04 08/04/05 4:05hin Page 116
D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 117
COVER RATIONALE
The cover reflects DiGi’s efforts to create meaningful connections between communities and their
rich texture of culture and heritage. This is captured in the traditional ikat design with its motifs
of interlinked people and buildings.
Our Aspiration.. .
To be the mobile communications leader in
creating experiences with a difference for our
customers and business partners through our
passion for success.”
Our Key Principles.. .
We have a passion for our customers
We value ideas and encourage initiative
We emphasise mutual trust and respect
We believe in the power of teamwork
We build partnerships for success
‘‘ Perak
IpohLot C-01-04 No 2 Ground FloorPersiaran Greentown 3Greentown Business Centre30450 Ipoh, Perak
Negeri Sembilan
Seremban301, Taman AST70200 SerembanNegeri Sembilan
Sabah
Kota KinabaluLot 5/G3, Ground & 1st FloorsApi-Api Centre88000 Kota Kinabalu, Sabah
Sarawak
KuchingLot 2087, Block 10Bangunan Kueh Boon TeckJalan Tun Ahmad Zaidi Adruce93150 Kuching, Sarawak
MiriLot 938, Ground & 1st FloorsJalan POS, 98000 MiriSarawak
Sibu13, Ground & 1st FloorsLorong Kampung Datu 396000 Sibu, Sarawak
24-hour DiGi customer service line: 016-221 1800
DiGi.Com Berhad (425190-X)Lot 30, Jalan Delima 1/3Subang Hi-Tech Industrial Park40000 Shah Alam, Selangor
Mailing Address:P. O. Box 755140718 Shah Alam, SelangorTel: 03-5721 1800Fax: 03-5721 1857www.digi.com.my
Pahang
KuantanLot G22B & G23 (ll)Ground Floor, Berjaya MegamallJalan Tun Ismail25000 Kuantan
Penang
Pulau Tikus368-1-02, Jalan Burmah10350 Pulau TikusPulau Pinang
Seberang Jaya8, Ground FloorJalan Todak DuaPusat BandarBandar Seberang Jaya13700 Prai, Pulau Pinang
Beach Street29A Beach Street10200 Penang
Melaka
Melaka523, Taman Melaka Raya75000 Melaka
Johor
Johor Bahru6 & 8, Jalan Molek 1/12Taman Molek81100 Johor Bahru, Johor
Jalan Tun Abdul Razak64, Jalan Tun Abdul RazakSusur 180000 Johor Bahru, Johor
Batu Pahat37, Jalan KundangTaman Bukit Pasir83100 Batu Pahat, Johor
List of Operating Offices
Principal Place ofBusiness/Head Office
Lot 30, Jalan Delima 1/3Subang Hi-Tech Industrial Park40000 Shah Alam, SelangorTel: 03-5721 1800Fax: 03-5721 1857
Central OperatingOffices
Lot 5, Jalan Pemaju U1/15Hicom Glenmarie Industrial Park40150 Shah Alam, SelangorTel: 03-5721 1800Fax: 03-5721 1857
Lots 7 & 8, Jalan Delima 1/1Subang Hi-Tech Industrial Park40000 Shah Alam, SelangorTel: 03-5721 1800Fax: 03-5721 1857
Lots 28 & 29, Jalan Delima 1/3Subang Hi-Tech Industrial Park40000 Shah Alam, SelangorTel: 03-5721 1800Fax: 03-5721 1857
Regional OperatingOffices
Northern Region
62, 1st Floor, Jalan MayangPasir 1Off Jalan Mahsuri11950 Bayan Baru Pulau PinangTel: 04-641 2800Fax: 04-641 3800
Ipoh Sales OfficeC-G-2 Persiaran Greentown 3Greentown Business Centre 30450 Ipoh, Perak
Southern Region
6 & 8, Jalan Molek 1/12Taman Molek81100 Johor Bahru, JohorTel: 07-351 1800Fax: 07-352 8016
Eastern Region
3, Jalan Tun Ismail25000 Kuantan, PahangTel: 09-508 0071Fax: 09-508 0070
Sabah Region
Lot 36, Sedco Light Industrial EstateJalan Kilang, Kolombong, Inanam88450 Kota Kinabalu, SabahTel: 088-431 800Fax: 088-430 016
Sarawak Region
Lot 2087, Block 10, Bangunan Kueh Boon TeckJalan Tun Ahmad Zaidi Adruce93150 Kuching, SarawakTel: 082-421 800Fax: 082-427 597
DiGi Centres
Selangor
USJSubang Taipan, 19 & 21Jalan USJ 10/1A, Subang Jaya47610 Petaling Jaya, Selangor
SS224, Jalan SS2/6647300 Petaling Jaya, Selangor
Selayang Baru57, Jalan 2/3A, Pasar Borong SelayangOff Jalan Ipoh68100 Batu Caves, Selangor
Klang35 & 37Persiaran Sultan Ibrahim41300 Klang, Selangor
Kuala Lumpur
Pandan IndahM5A/13, Jalan Pandan Indah 4/1Taman Pandan Indah55100 Kuala Lumpur
KL PlazaLot G33-8, Ground Floor,179, KL PlazaJalan Bukit Bintang55100 Kuala Lumpur
Berjaya Times Square01-36, Berjaya Times Square, 1, Jalan Imbi ,55100 Kuala Lumpur
Corporate Directory
DiGi AR 04 Back Cover 08/04/05 4:35hin Page 1
DiGi Telecommunications Sdn Bhd 201283-M T (603) 5721 1800Lot 30 Jalan Delima 1/3 F (603) 5721 1857Subang Hi-Tech Industrial Park E [email protected] Shah AlamSelangor Darul EhsanMalaysia
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DiGi AR 04 Cover 08/04/05 4:35hin Page 1
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