Digi 2015AR Cover.Indd
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YOUR FAVOURITE DIGITAL PARTNER 2015 Annual Report Digi.Com Berhad (425190-x) Lot 10, Jalan Delima 1/1, Subang Hi-Tech Industrial Park, 40000 Subang Jaya, Selangor, Malaysia Email: [email protected] Printed on Environmental Friendly Paper. An initiative under Digi’s Deep Green Programme. Visit www.digi.com.my to view the online version of this annual report. CONTENT Business Review Financial Statement 12 76 Chairman’s Statement Directors’ Report 14 79 CEO’s Statement Statement by Directors 20 79 Operational and Financial Performance Statutory Declaration 25 80 5-Year Financial Summary Independent Auditors’ Report Governance 26 82 Share Development and Shareholdings 46 Statements of Comprehensive Income Directors’ Profi les 30 83 Our Year in a Glimpse 50 Statements of Financial Position Management Profi les 33 84 Awards & Accolades 54 Statements of Changes In Equity Statement on Corporate Governance 86 Sustainability 66 Statements of Cash Flows Statement on Risk Management 36 and Internal Control 88 Responsible and Ethical Business Notes to the Financial Statements 71 38 Audit and Risk Committee Report Winning Team Additional Information 73 40 Additional Compliance Information 138 Empower Societies List of Properties 42 141 Climate Change and Environment Disclosure of Recurrent Related Party Transactions 142 Statement on Directors’ Shareholdings 143 Notice of Annual General Meeting Form of Proxy 149 Limited Assurance Statement 152 Corporate Directory 1 CORPORATE STRUCTURE 100% Pay By Mobile Sdn Bhd Digi.Com Berhad Djuice.Com 100% Sdn Bhd 100% Digi Telecommunications Sdn Bhd 100% Digi Services Sdn Bhd CORPORATE INFORMATION Board of Directors Hakon Bruaset Kjol (Resigned on 16 December 2015) Morten Karlsen Sorby Chairman Sigve Brekke (Appointed as Chairman on 19 August 2015) (Resigned on 19 August 2015) Datuk Seri Saw Choo Boon Dato’ Ab. Halim Bin Mohyiddin (Retired upon the conclusion of the 18th AGM held on 7 May Tore Johnsen 2015) Director and Alternate Director to Morten Karlsen Sorby (Appointed as Alternate Director on 19 August 2015) Audit and Risk Committee Yasmin Binti Aladad Khan Datuk Seri Saw Choo Boon Chairman/Independent Non-Executive Director Vimala A/P V.R. Menon (Appointed on 1 July 2015) Vimala A/P V.R. Menon Independent Non-Executive Director Lars-Ake Valdemar Norling (Appointed on 1 July 2015) (Appointed on 19 August 2015) Tore Johnsen Kristin Muri Moller Non-Independent Non-Executive Director (Appointed on 4 February 2016) Dato’ Ab. Halim Bin Mohyiddin Independent Non-Executive Director (Retired upon the conclusion of the 18th AGM held on 7 May 2015) 2 Nomination Committee Domicile and Country of Incorporation Yasmin Binti Aladad Khan Malaysia Chairman/Independent Non-Executive Director (Appointed as Chairman on 1 July 2015) Registered Oʣ ce Datuk Seri Saw Choo Boon Lot 6.05, Level 6, KPMG Tower Independent Non-Executive Director 8 First Avenue, Bandar Utama (Appointed on 1 July 2015) 47800 Petaling Jaya Selangor Darul Ehsan Lars-Ake Valdemar Norling Tel: 03-7720 1188 Non-Independent Non-Executive Director Fax: 03-7720 1111 (Appointed on 4 January 2016) E-mail: [email protected] Web: www.boardroomlimited.com Hakon Bruaset Kjol Non-Independent Non-Executive Director Share Registrars (Resigned on 16 December 2015) Tricor Investor & Issuing House Services Sdn Bhd Dato’ Ab. Halim Bin Mohyiddin Unit 32-01, Level 32, Tower A Independent Non-Executive Director Vertical Business Suite, Avenue 3, Bangsar South (Retired upon the conclusion of the 18th, No. 8, Jalan Kerinchi AGM held on 7 May 2015) 59200 Kuala Lumpur Malaysia Remuneration Committee Tel: 03-2783 9299 Fax: 03-2783 9222 Morten Karlsen Sorby E-mail: [email protected] Chairman/Non-Independent Non-Executive Director Web: www.tricorglobal.com (Appointed on 19 August 2015) Auditors Tore Johnsen Non-Independent Non-Executive Director Messrs Ernst & Young Chartered Accountants Lars-Ake Valdemar Norling Level 23A, Menara Milenium Non-Independent Non-Executive Director Jalan Damanlela, Pusat Bandar Damansara (Appointed on 4 January 2016) 50490 Kuala Lumpur Tel: 03-7495 8000 Hakon Bruaset Kjol Fax: 03-2095 5332 Non-Independent Non-Executive Director (Resigned on 16 December 2015) Stock Exchange Listing Sigve Brekke Main Market of Bursa Malaysia Securities Berhad Non-Independent Non-Executive Director Listed on: 18 December 1997 (Resigned on 19 August 2015) Stock Name: DIGI Stock Code: 6947 Secretaries Principal Bankers Choo Mun Lai (MAICSA No. 7039980) Standard Chartered Bank Malaysia Berhad Tai Yit Chan (MAICSA No. 7009143) AmBank (M) Berhad CIMB Bank Berhad Tan Ai Ning (MAICSA No. 7015852) OCBC Bank (Malaysia) Berhad Hong Leong Bank Berhad UOB Bank Berhad Sumitomo Mitsui Banking Corporation Malaysia Berhad 3 YOUR FAVOURITE DIGITAL PARTNER INNOVATING TO DELIVER YOUR FUTURE DIGITAL NEEDS 4 5 WE HAVE COME A LONG WAY, AND EXPERIENCE HAS BEEN OUR BEST TEACHER 20 years ago we began inspiring Malaysians as the fi rst digital cellular network in the country, providing voice and SMS services to the people. Over the years, our brand has become synonymous with innovation, fun and simplicity. We have grown to become one of Malaysia’s fastest growing telecommunications networks, and most profi table companies. How? With over 2,000 dynamic Digizens driving our business, keeping a relentless focus on providing high- quality services and excellent customer experience that allows our customers to get the most benefi t out of an increasingly connected world. 6 OUR FINANCIAL TRACK RECORD Service revenue EBITDA Capital expenditure (Capex) RM6.35 billion RM2.98 billion RM904 million RM bn 5.62 5.89 6.13 6.33 6.35 RM bn 2.77 2.93 3.04 3.16 2.98 RM bn 0.61 0.70 0.74 0.90 0.90 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Ops cashflow Profit after tax Total assets RM2.08 billion RM1.72 billion RM4.66 billion RM bn 2.16 2.23 2.30 2.26 2.08 RM bn 1.25 1.21 1.71 2.03 1.72 RM bn 4.86 4.01 3.75 4.30 4.66 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Earnings per share Dividend per share Return on equity 22.2 sen 99% payout or 22.0 sen 332.0% Sen 16.1 15.5 21.9 26.1 22.2 Sen 17.5 26.3^ 21.3 26.0 22.0 % 89 462 258 296 332 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 ^ includes special dividend of 8.0 sen per share 7 OUR PRESENT In recent years we have successfully evolved our business to address new growth opportunities. With a refreshed promise this year to be an enabler of digital inspiration for our customers, we now do much more than provide mobile connectivity services. Delivering quality, high-speed Internet on-the-go in more areas across MILLION MOBILE Malaysia CUSTOMERS INTERNET 7. 5 CUSTOMERS 12.1 MILLION MILLION SMARTPHONE INTERNET 4G LTE PENETRATION PENETRATION 2.3 CUSTOMERS 59.2% 61.9% BEST FOR INTERNET DIGI VALUE Consistent, high-speed Affordable internet internet on-the-go for more access for every wallet size Malaysian’s nationwide 2015 2016 4G LTE-A pop. coverage 29 % 4G LTE Digi BEST Prepaid Digi SMART Prepaid Digi Postpaid pop. coverage 6,400 km 65 % fi ber network New products and services for as low as... 3G #Top 10 RM25 4G LTE RM259 RM 0.50 pop. coverage 4G LTE sites where customers plans devices mobile internet 87 % want with #Digiwewant4G passes Diʢ erentiating DIGI LIVE ourselves across DIGI EASY New digital services to our 360º brand Consistent, seamless customer cater to all customer segments propositions experience across Malaysia. Telenor & Digi Strategic Global owned services Partnerships More than Direct-billingD on 5Min GGoogle Play Store 15,000 Music Capture On-demand retail touchpoints average time to complete simple Freedom entertainment nationwide transactions with ifl ix Self-serve app for more control Self-service of your account on Wechat appear.in Asia Live Internet Added to our existing range Account Bill Overview Payment Reload & Add-ons More highlights for the year are available on page 30. 8 OUR WAY FORWARD Technology is changing our world and we are seeing profound mobile innovations revolutionise the way people connect and communicate. Data consumption is accelerating, networks are improving, digital ecosystems are rapidly evolving and more areas of our customers’ lives are connected digitally – this is our future. Mobile Life in 2020 1 Billion 6.1 Billion Additional mobile 72% Smartphone users3, subscribers1, the overtaking fi xed line People globally can experience users size of India’s socio-economic benefi ts from population being connected2 20.8 Billion 30.6 Exabytes ‘Things’ will be connected Mobile data traffi c % 5 47 to the internet4 monthly , 12 times Revenue predicted the world’s capacity $ will be infl uenced to store information by digital6 compared to 1986 Our 2020 With this pace of change expected to remain signiʠ cant, we are future-prooʠ ng our business to transform beyond a traditional ambition mobile connectivity provider, positioning ourselves more signiʠ cantly in the daily, digital lives of our customers. Loved by customers Engaging digital products Providing high quality, user Delivering integrated digital friendly and personalised services and experiences customer propositions and Customers’ through strong digital experiences favourite positions and ecosystem 1 GSMA partner Intelligence Report Winning team in digital life Most eʣ cient operator 2 GSMA The Mobile Economy 2015 Building future ready Driving profi table growth by talents, and a culture that optimising the way we work, 3 Ericsson Mobility inspires