digi.com berhad annual report 2004 laporan tahunan

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

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


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



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


Member of the Remuneration Committee


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


Chairman of the Nomination Committee

Member of the Audit Committee

Member of the Remuneration Committee


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.”

‘‘


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


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


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 AR 04 08/04/05 4:23hin Page 57

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

DiGi AR 04 08/04/05 3:45hin Page 63

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.

DiGi AR 04 08/04/05 3:45hin Page 70

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


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) - -


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


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


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

D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 73

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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 )


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 - -


Cash Flow Statements for the year ended 31 December 2004

(continued)

DiGi AR 04 08/04/05 3:46hin Page 74

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.

DiGi AR 04 08/04/05 3:46hin Page 75

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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D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 77

(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.

DiGi AR 04 08/04/05 3:46hin Page 77


(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 )


DiGi AR 04 08/04/05 3:46hin Page 78

(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.

D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 79

DiGi AR 04 08/04/05 3:46hin Page 79

80 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )


(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.


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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.

DiGi AR 04 08/04/05 3:54hin Page 81

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 - - -


DiGi AR 04 08/04/05 3:54hin Page 82

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 )


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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.

DiGi AR 04 08/04/05 3:54hin Page 85

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

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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.

D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X ) 87

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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


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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 )


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

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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 - - - -

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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.

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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

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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

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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

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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.

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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.

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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.

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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.

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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

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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



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



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 / 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


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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

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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.

DiGi AR 04 08/04/05 4:04hin Page 106

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


Telenor Asia Pte Ltd (DiGi)


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


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)


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


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


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


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




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:-


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




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


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:-








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




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:-


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


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:-








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

114 D i G i . C o m B e r h a d ( 4 2 5 1 9 0 - X )

Annexure A

DiGi AR 04 08/04/05 4:04hin Page 114

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



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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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

digi.com berhad annual report 2004 laporan tahunan

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