The Value We Create Integrated Annual Report 2018 Long-Term Group Value Creation Model requires input from our six capitals to produce output and create outcomes and value in interconnectivity of our six capitals, this year we have enhanced our reporting on the activities the short, medium and long-term for our stakeholders. and outcomes of our value creation efforts, by focusing on key activities generating outcomes At the same time, our Group-wide efforts are contributing to advancing some of United aligned with achieving our ambition of becoming a New Generation Digital Champion by 2022. Nations Sustainable Development Goals (UN SDGs). Due to the nature of the trade-offs and

INPUT VALUE CREATION PROCESS OUTCOMES AND VALUE CREATED Business Capital* Activities Positive Output UN SDGs

Vision, Purpose & Values 1. Delivering Long-Term Value as a Regional and 1 Triple Core Strategy Global Player • Maximising shareholder value FINANCIAL • Sustained long-term business growth and CAPITAL profitability

Differentiated 2. Building a Modern, Agile and Digital Asian 2 connectivity services Talent Factory Seamless connection • Talent development platform geared towards HUMAN being a Modern, Agile and Digital (M.A.D.) Asian CAPITAL Talent Factory Digital Telco • Attract and retain talented employees • Diverse workforce, with multiple opportunities to advance their career 3 3. Becoming a Trusted and Reliable Digital INTELLECTUAL Comprehensive digital Partner CAPITAL platforms for businesses • Providing amazing customer experience across Data-driven digital our footprint advertising • Establish strong brand equity and trust Secure digital financial • Digital platforms to cater to customer needs for 4 Digital services innovative digital products and services Governance SOCIAL & Businesses Enterprise solutions/IoT RELATIONSHIP 4. Supporting Governments and Communities in CAPITAL Risk & Opportunities Our Markets Strategic Initiatives Strategic

Eight Needle-Moving Needle-Moving Eight • Contributing to the socioeconomic development of the countries we operate in through national Reliable network contributions and social responsibility initiatives 5 availability Fibre connectivity MANUFACTURED 5. Enabling Digitally-Connected Societies CAPITAL Sustainable network • Increasing population coverage and connecting tower solutions underserved areas Infrastructure End-to-end tower • Aiding digital and financial inclusion management services 6 & Society and Planet People Partnership, Performance, 4P Goals: 6. Minimising Environmental Impact NATURAL Adverse Output • Focused carbon reduction strategy CAPITAL • Optimising energy consumption through design By-products: GHG emissions innovations and renewable energy sources Operating Environment

Note: * Refer to next page for breakdown of our six capitals and inputs

Our Business Statements and Analysis Our Strategy The Value We Create Our Performance Our Governance Other Information 31 Our Business Statements and Analysis Our Strategy The Value We Create Our Performance Our Governance Other Information 32

Integrated Annual Report 2018 Our Six Capitals

Financial Capital Input Social & Relationship Input 1 • Market capitalisation of RM35.6 billion in 4 Capital • 2018 Brand Equity score 2018 - No.1 in and Cambodia Capital providers supply us • Gross debt/EBITDA ratio of 2.3x in 2018 Trusted relationships with - No.2 in Indonesia,Bangladesh and Nepal - No.3 in Malaysia with the necessary funding • Debt Equity Ratio of 1.11 in 2018 customers, communities, governments and regulators, • Industry and community partnerships for our business, in addition • Credit ratings of Baa2 on Moody’s and to cash generated from suppliers, trade unions, industry • Customer base of approximately bbb+ on S&P in 2018 bodies, among others, are 150 million3 subscribers in 2018 operations and investment. 2 • Operating expenses of RM15.6 billion in key towards ensuring that we 2018 maintain strong relationships of trust with our stakeholders.

Human Capital Input Manufactured Capital Input 2 • More than 12,0003 employees from 5 • >29,800 towers owned and managed by edotco 38 nationalities across Asia 4 Our skilled workforce is Our network infrastructures, data • Group-wide BTS Infrastructure a pivotal part of Axiata’s • Male: Female employee ratio of 2.4:1 centres and software applications • Group capex of RM6.1 billion business model. Our • RM178 million spent on talent are an important source of • Group Plant, Property and Equipment (PPE) engaged, diverse, and development since 2009 competitive differentiation. value of RM27.3 billion innovation-driven employees • High percentage of engaged employees Our Manufactured Capital also • network equipment contribute to the success of includes the office buildings (net book value) of RM22.7 billion • edotco tower capex of RM753 million our business. housing our workforce. • edotco PPE value of RM2.2 billion • Global digital platform business, Apigate

Intellectual Capital Input Natural Capital Input 3 • Mobile licenses and spectrum allocations 6 • Direct energy consumption of 1,210,358 GJ throughout our operating markets • Indirect energy consumption of Our strong brand equity and • Investment in digitisation and We consume energy in our 5,705,809 GJ trust, culture, partnerships, modernisation initiatives operations, and use land to • 0.5% of energy consumed coming from know-how as well as our • Cyber security, data privacy and house our towers and other renewable sources procedures and processes infrastructure. • Energy intensity of 290 GJ/RM million in differentiate us in the information security initiatives marketplace. 2018

Trade-off • The investments we make in Social and Relationship Capital reduces our Financial Capital • The expansion of our networks increases our base of Manufactured Capital, while reducing in the short-term. However, in the long-term, our efforts to close the digital divide, our Financial Capital in the short-term. However, in the long-term, our investments expand and contribute to the national development of our markets of operation as well as the our business’ capacities, and therefore grows our Financial Capital socioeconomic development of our footprint communities, builds upon our Social and • Our Intellectual Capital investments reduces our Financial Capital in the short-term. However, Relationship, Human, Intellectual and Financial Capitals it expands the value of our Human, Financial, and Social and Relationship Capital in the long- • Our base of Manufactured Capital negatively impacts upon our Natural Capital. However, term through our carbon footprint reduction initiatives, as well as concerted efforts to build green infrastructure solutions, we are able to mitigate our impact on our Natural Capital

Notes: 1 Total borrowings over total shareholders’ equity 2 Axiata’s operating expenses represent the difference between statutory post-MFRS 15 & 9 revenue of RM23.9 billion and EBITDA of RM8.3 billion 3 Excluding Idea and M1 4 For details of BTS at OpCos, please refer to the Entities Across Asia section in this IAR Integrated Annual Report 2018 1. Delivering Long-Term Value as a Regional and Global Player

Related Key Capitals Outcomes and Value Created Maximising shareholder value Sustained long-term business growth and profitability

Activities and Processes Performance Indicators to Create Value Operating Revenue EBITDA Normalised PATAMI • Conducted a Group-wide cost optimisation programme, with a 2016 2017 2018 2016 2017 2018 2016 2017 2018 goal to deliver RM5 billion across savings and avoidance by 2021 • Strengthened balance sheet via RM21.6 RM24.4 RM23.9 RM8.0 RM9.2 RM8.3 RM1.4 RM1.2 RM1.0 management of US Dollar debt billion billion billion billion billion billion billion billion billion • Optimised resource allocation towards new growth and expansion areas in line with the Triple Core Strategy • Apigate partnered with major telco Dividend per Share/Dividend Payout Ratio Cash Reserves groups such as Zain, Etilasalat, Tencent and Gameloft by leverging on its future- 8.0 sen 50% 2016 RM5.3 RM6.8 RM5.1 ready APIs on one seamless platform 8.5 sen 64% 2017 billion billion billion which allows local businesses to scale 9.5 sen 85% 2018 globally for SMS, Operator and e-wallet 2016 2017 2018 Billing • Reclassified Idea investment to simple Delivered RM2.8 billion in cost optimisation Gross Debt to EBITDA Ratio Credit Ratings investment from associate to remove drag within the first two years of the programme on future profitability • M1 divestment resulted in total cash proceeds of approximately Moody’s - Baa2 2016 2.78x RM1.65 billion and estimated gain of 26% 2016 S&P - bbb+ RM126.5 million in 2019 RM1.3 billion

Moody’s - Baa2 RM5.0 RM2.8 2017 2.08x 2017 billion billion S&P - bbb+ Link to 4P Goals 2017 30% 2018 2.29x 2018 Moody’s - Baa2 2018 RM1.5 billion S&P - bbb+

2019-2021

IAR More details on our financial performance can be found in ‘Our Performance’ section of this IAR, under Financial Highlights

GA FS Our Audited Financial Statements are available in our GAFS 2018

Our Business Statements and Analysis Our Strategy The Value We Create Our Performance Our Governance Other Information 33 Our Business Statements and Analysis Our Strategy The Value We Create Our Performance Our Governance Other Information 34

Integrated Annual Report 2018 2. Building a Modern, Agile and Digital Asian Talent Factory

Related Key Capitals Outcomes and Value Created Talent development platform geared towards being a Modern, Agile and Digital (M.A.D.) Asian Talent Factory Attract and retain talented employees Diverse workforce, with multiple opportunities to advance their career

Activities and Processes Performance Indicators to Create Value Building the M.A.D. Culture Talent at Axiata • Introduced initiatives to align 2017 2018 organisational culture to M.A.D. Axiata Academy 8 thematic awards AAC trained 170 data values: uses an intelligent scientists and data under LEAP Top Management 145 174 - Piloted Axiata Academy in learning technology encapsulating the engineers in 2018, and platform to curate M.A.D. organisation targets to increase to Middle Management 660 513 - Launched Group-wide Learning, learning modules for ethos and IR 4.0 300 people in 2019 Engagement, and Accelerating employees Performance (LEAP) Awards for employees as ongoing motivators Employee utilisation of Lynda.com in 2018: External : Internal Hiring Ratio for accelerated adoption of digital • Top courses included digital privacy, cyber security and big data initiatives techniques and concepts - Provided our employees access to • 100% activation of licenses were given to employees online learning platform Lynda.com, • 35% growth in active users over the first 6 months to empower them with their lifelong • >64,600 courses completed in 2018 From 78:22 From 78:22 learning and professional development to to 40:60 17:83 efforts To embed the digital mindset across the organisation: - Developed a Group-wide Knowledge • “Synapse” allows our employees to contribute and share ideas across the Sharing Platform, “Synapse”, to easily Group, and accelerates best practice transfers share learnings and best practices across 2017 2018 OpCos - Axiata Analytics Center (AAC) Leadership at Axiata provided technical analytics training Group Employee Engagement Survey Result: for data scientists and data engineers Group-wide 7 out of 9 CEO • Continued investment in our • were filled 2 2 2 83% positions filled by 86% SEI 87% SEI 88% SEI employees’ career development internally internal talents 87% UI.EP 90% UI.EP 91% UI.EP through programmes like the Group Accelerated Development Out of 65 80% Ethics 84% Ethics 84% Ethics Programme and OpCo Accelerated leadership 72% High 74% High 75% High positions in • 54% are locals Development Programme 20181 Gender Diversity in Performance Performance Performance • Robust compensation philosophy • 22% were Leadership Culture Culture Culture was practised to attract and footprint talents retain quality talent • 24% were 88% Male 83% Male 2016 2017 2018 external talents 12% Female 17% Female Link to 4P Goals Creating a highly engaged and conducive workplace for employees 2017 2018

Notes: 1 SN More details on our efforts to develop and support professional Local: Locals working in their respective OpCo country. Footprint: Non-locals from Axiata’s footprint countries. External: Non-locals from outside Axiata’s footprint countries CR growth are discussed in the ”Nurturing People” chapter of our SNCR 2 SEI refers to Sustainable Engagement Index Integrated Annual Report 2018 3. Becoming a Trusted and Reliable Digital Partner

Related Key Capitals Outcomes and Value Created Providing amazing customer experience across our footprint Establish strong brand equity and trust Digital platforms to cater to customer needs for innovative digital products and services

Activities and Processes Performance Indicators to Create Value Total Number of Brand Equity Score Social Reputation Score Mobile Customers • Executed Group-wide Digital 2018 2018 Transformation Strategy 2018 • Developed digital products and 2017 services to enhance customer ~ 150 Strong to • No.1 in Sri Lanka • No.1 in Malaysia, Strong brand experiences 1 million dominant on the and Cambodia Indonesia, Nepal presence on • Conducted Group-wide cyber 2016 Brand Equity • No.2 in Indonesia, and Bangladesh social media in security enhancements ~ 350 million Index in all mobile Bangladesh and • Strong No.2 in all mobile - Implemented three-year “Digital Nepal Sri Lanka and Trust 2020” (DT2020) cyber ~ 320 markets markets security strategy million • No.3 in Malaysia Cambodia - Established Group Cyber Security Steering Committee - Adopted internationally recognised Net Promoter Score in Expanded OpCos digital portfolio with digital Enhanced Data Privacy and Cyber Security security standards, namely the National Mobile Markets products beyond pure connectivity via: Institute of Standards and Technology 2018 - Strengthened oversight and provided (NIST) and Group-wide Minimum Baseline IoT solutions such as Enhanced assurance to the Board Risk Management Security Standards (MBSS) No.1 in No.2 in Connected Weather digital customer Committee on cyber security maturity - Implemented Group Security Operations 5 markets 1 market Systems, Connected touchpoints through - Consolidated all OpCo security functions and Centre (GSOC) - - Agriculture and Smart Robotics Process provided a common direction to improve and - Signed MoU with Malaysia Digital Malaysia, Indonesia Poultry Farming to help Automation and reduce cyber risk Economy Corporation to promote Sri Lanka, entrepreneurs and rural Artificial Intelligence sharing of best practices, cyber - Standardised approach to implement cyber Bangladesh, customers with their to on-board our security across all OpCos to improve maturity threat scenarios and support talent Cambodia and businesses customers faster level development - Trained cross-functional Privacy and Nepal - Implemented GSOC to provide early warning Information Security Team on threats and cyber attacks Social Reseller Analytics and - Conducted Threat and Vulnerability - Established stronger links and collaborations Digitising core functions using a App to assist Contextual Management Programme: customers to with local regulators and stakeholders, as well best practice framework approach Marketing - Performed “Red Teaming” generate income as global industry peers and leaders to share is used to threat intelligence Group-wide provide our - Implemented “Bug Bounty” • Average of 50% improvement customers - Implemented cyber and privacy initiative amongst OpCos in 20182 with intuitive programmes to ensure our staff • 1 OpCo measured on par with Experimenting with Blockchain solutions at and key third parties are cyber Link to 4P Goals Emerging Market Top Quartile technology to ensure the highest savvy Average 2 irrefutable authentication of levels of data - Boosted our cyber resilience via customer identity privacy continuous security assessments to identify and improve our cyber risk profile

IAR More details on our efforts to become a New Generation Digital Champion are discussed in the “Our Business” and “Our Strategy” chapters in this IAR Notes: 1 Approximate number of customers excluding Idea and M1 GA FS More information on our Data Privacy and Cyber Security measures can be found in our GAFS 2018 2 Based on Digital Telco Index, as assessed by independent third party in 2018, against a 2017 baseline

Our Business Statements and Analysis Our Strategy The Value We Create Our Performance Our Governance Other Information 35 Our Business Statements and Analysis Our Strategy The Value We Create Our Performance Our Governance Other Information 36

Integrated Annual Report 2018 4. Supporting Governments and Communities in Our Markets

Related Key Capitals Outcomes and Value Created Contributing to the socioeconomic development of the countries we operate in through national contributions and social responsibility initiatives

Activities and Processes Performance Indicators to Create Value Total National Contribution1 In 2018, Tower to Community impacted Number of Jobs Supported • Focused on the development Across the Region2 of digital services to meet 1.2 the socioeconomic needs of 2016 2017 2018 1,020 28 million communities families schools 1.0 • Partnership with the GSMA in the million 0.9 Humanitarian Connectivity Charter million and the Connected Women Initiative USD USD USD • Actively engaged with national 13.8 15.9 13.9 regulatory authorities and policy billion billion billion 30 1 makers on key regulatory topics, mosques hospital and encouraged the development of national-level policies and regulations 2016 2017 2018 based on global best practice • edotco rolled out Tower to Community Humanitarian Connectivity Charter project providing electricity to Connected Women Initiative (CWI) underserved communities in Bangladesh 2016 Initiated a Group-wide Disaster Response Plan and Myanmar Dialog • As part of running operations in our 2017 Over 8 million SMS sent by Dialog and in OpCo markets, Axiata continued to 2016 Dialog and Robi the first GSMA members to commit to CWI projects partnership with local authorities to evacuate danger be a responsible corporate citizen, areas and contributed taxes to all national 2017 • 49 Regional Women Development • 17,755 women in 64 districts Governments of the countries where we Officers from the Ministry of and villages trained in digital 2018 • XL donated digital services worth over USD1.8 Women and Child Affairs trained as literacy and entrepreneurship million to connect customers after three disasters in operate Indonesia trainers • 400,000 monthly users on • Our investment in the form of • Celcom signed a letter of co-operation with National capital expenditure and operating • 675 women in villages empowered ‘Maya Apa Plus’, an on demand Disaster Management Agency to support sending expenditure in our markets of to use digital services related to information service on health, SMS alerts in disaster events operation resulted in the Group education, health, entrepreneurship psychosocial and legal issues • Ncell extended partnership with Department of Hydrology and Meteorology for another five years contributing towards job creation, and Internet safety and supporting the national 2018 • Launched Yeheli/Thozhi messaging • 25,343 women in 64 districts economy of the countries in our platform for women seeking advice and villages trained in digital regional footprint Total Tax 2016 2017 2018 on social and personal issues literacy and entrepreneurship Contributions2 • 450,000 monthly users accessed ‘Maya Apa Plus’ USD USD USD Link to 4P Goals • Partnered with Cignifi and Bank 1.19 1.26 1.40 Asia to increase digital financial billion billion billion inclusion among women

Notes: 1 Total national contributions and jobs supported are for Celcom, XL, Smart, Dialog, Robi, Ncell, Idea and M1 within their respective markets of operation 2 Total tax contributions for Celcom, XL, Smart, Dialog, Robi and Ncell to their respective Governments

SN CR Information on our GSMA partnerships can be found in the “Beyond Short-Term Profits” chapter of the SNCR Integrated Annual Report 2018 5. Enabling Digitally-Connected Societies

Related Key Capitals Outcomes and Value Created Increasing population coverage and connecting underserved areas Aiding digital and financial inclusion

Activities and Processes Performance Indicators to Create Value ADIF Funding for Digital Startups Percentage of Base Stations in Rural Areas Micro-financing • Invested in building base stations in rural areas to as part 2016 2017 2018 2016 2017 2018 Indonesia: of efforts being undertaken to Supply Chain Credit for narrow the digital divide and boost Boost merchants ranging connectivity from RM30 RM43.9 RM48.9 44% 44% 46% • Provided digital services and IDR500,000 - solutions for fishermen and farmers million million million • Axiata Digital Innovation Fund (ADIF), IDR5.0 million Digital Innovation Fund (SADIF) and Govi Mithuru - Sri Lanka Digital Innovation Fund (DADIF) were • Over 500,000 subscribers for voice message SADIF Funding for DADIF Funding for Malaysia: established to support and drive Digital Startups1 Digital Startups1 services to farmers to help improve crop cultivation Working Capital Loan for the growth of the digital ecosystem 2018 2018 Laut Nusantara - Indonesia Boost merchants ranging in Malaysia, Cambodia and Sri Lanka from respectively, by providing venture capital USD SLR • Subsidised 1,200 smartphones for fishermen to access maritime digital solutions through the Laut for digital startups RM500 - 1.2 219 Nusantara app featuring information on waterways, • Provided digital inclusion initiatives namely million million navigation rules, coastal information and tagging of RM20,000 e-wallet services such as Boost in Malaysia, locations to optimise potential catch eZ Cash in Sri Lanka, and SmartLuy in Cambodia • Axiata Digital Capital launched micro- financing products in Malaysia and Total Registered Indonesia to support micro-entrepreneurs Registered Users Registered Users Registered Users Customers and Policies grow their businesses • BIMA in Cambodia, Bangladesh and Sri 3.5 Bangladesh Lanka offered mobile-micro insurance million 2017 323,281 3.4 in life insurance, hospitalisation and 2018 491,665 million 103,408 personal accident 3.0 million Sri Lanka Link to 4P Goals 53,982 645,4142 2017 2,638,796 2018 2,657,778

Cambodia 2017 900,000 2018 677,498 2017 2018 2017 2018 2017 2018

Notes: 1 SADIF and DADIF were established in 2017 and 2018 respectively SN CR 2 The 2.2 million registered users reported in IAR 2017 was as at 31 March 2018 More details on our efforts to digitally connect societies can be found in the “Beyond Short-Term Profits” chapter of our SNCR

Our Business Statements and Analysis Our Strategy The Value We Create Our Performance Our Governance Other Information 37 Our Business Statements and Analysis Our Strategy The Value We Create Our Performance Our Governance Other Information 38

Integrated Annual Report 2018 6. Minimising Environmental Impact

Related Key Capitals Outcomes and Value Created Focused carbon reduction strategy Optimising energy consumption through design innovations and renewable energy sources

Activities and Processes Performance Indicators to Create Value Group-wide Total Energy Consumption Group-wide GHG Emissions1 Energy from Renewable Sites2 Group-wide • Undertook various strategies amongst OpCos Group-wide to Scope 1 Scope 2 reduce greenhouse gas (GHG) Solar Wind emissions, including integrating network equipment at base stations, Direct Indirect replacing old air-conditioners, 1.2 million 5.7 million and adjusting air-conditioning and GJ GJ 83,130 1,028,022 tCO e tCO e heating systems 2 2 36,280 23 • edotco, as the infrastructure company GJ GJ operating most of the networks in our 2018 2018 2018 Direct Indirect regional operations, is one of the primary 2017: 54,701 tCO e 2017: 868,581 tCO e contributors to GHG emissions. Having 2017: 0.8 million GJ 2017: 4.5 million GJ 2 2 Renewable Energy: 0.5% 2016: 65,756 tCO e 2016: 919,354 tCO e committed to reduce its carbon footprint 2016: 0.6 million GJ 2016: 4.3 million GJ 2 2 by 40% in 2018 from a 2013 baseline, edotco surpassed the target to achieve a Carbon Footprint Reduction by edotco 44% reduction one year ahead of plan • In 2018, edotco conducted the 25% - 70% reduction in carbon footprint with use of 41% - 100% reduction in carbon footprint with site following activities towards managing its edotco's green tower designs optimisation and renewable energy use environmental footprint responsibly: - Total of 1,112 green sites utilising renewable energy or alternative material Structure Design Solar Energy - Added an additional 317 solar sites, raising 25% 100% 41m 4-legged 41m 3-legged reduction 1kWh generated 1kWh generated reduction the total to 982 under its management vs vs - Deployed 92 solar air conditioner sites in GFRT GFT via gensets via solar panel Malaysia - Pioneered the first hybrid solarwind turbine energy solution in Myanmar - Deployed the first-ever smart lamp Site Layout Optimisation 41% Wind Energy 100% pole in Sri Lanka, and have deployed 45m 3-legged 45m 3-legged reduction 1kWh generated 1kWh generated reduction 22 to date (Pre Opti) vs (Post Opti) via gensets vs via wind 44% - Currently has four variations of reduction in bamboo towers since the first deployment in Bangladesh in 2017 Carbon Footprint from Baseline3 - Conducting research in Malaysia, Carbon Fibre Structures Site Electrification Cambodia and Myanmar to utilise 20% 41% local bamboo for towers 30m Steel 30m Carbon reduction Off-grid vs Grid site reduction vs lampole site fibre site 2018

Link to 4P Goals Bamboo Structures 70% Free Cooling System 78% 6m Steel 6m bamboo reduction Free cooling reduction structure vs structure Air-conditioner vs system

Notes: 3 edotco embarked on its carbon footprint reduction programme in 2013 with the goal of reducing its footprint by 40% by 2018. Three studies were conducted to establish 1 tCO2e refers to tonnes carbon dioxide equivalent and monitor data; the first in 2013 to establish baseline, the second in 2016 to monitor progress at the midway point, and the final one in 2018 to measure outcomes of the 2 Energy used by Celcom, XL, Smart, Dialog, Robi, Ncell and edotco programme. The results are based on a Life Cycle Assessment study by SIRIM in four countries of edotco’s operations

SN IAR CR More details on our environmental sustainability efforts can be found in the “Strategy” chapter in this IAR and in the “Planet and Society” chapter of the SNCR