Digi Com : Circular to Shareholders Part 5 - (page 566-Form of Proxy)

APPENDIX X

INDICATIVE VALUATION LETTER FROM KPMG ON THE VALUATION OF 100% EQUITY INTEREST IN CELCOM

The Board of Directors

Digi.Com Berhad

Lot 10, Jalan Delima 1/1

Subang Hi-Tech Industrial Park

40000 Subang Jaya

Selangor Darul Ehsan

25 October 2022

Dear Sirs

THIS INDICATIVE VALUATION LETTER IS PREPARED FOR INCLUSION IN THE CIRCULAR TO SHAREHOLDERS OF DIGI.COM BERHAD ("DIGI" OR "COMPANY")

INDICATIVE VALUATION OF A 100% EQUITY INTEREST IN CELCOM AXIATA BERHAD ("CELCOM") IN RELATION TO THE PROPOSED MERGER OF CELCOM AND DIGI

(The above valuation is hereinafter to be referred to as the "Indicative Valuation")

1. INTRODUCTION
2. In accordance with the terms of reference set out in our engagement letter dated 19 May 2021 ("Engagement Letter"), the Board of Directors of Digi.Com Berhad ("Digi" or Company") has appointed KPMG Corporate Advisory Sdn Bhd ("KPMG Corporate Finance") to perform an indicative valuation of a 100% equity interest in Celcom Axiata Berhad ("Celcom") in relation to the proposed merger of Celcom and Digi ("Proposed Merger").
3. This Indicative Valuation letter ("this Valuation Letter") has been prepared at your request for inclusion in the circular to the shareholders of Digi in connection with the Proposed Merger ("Circular"). Save and except for this purpose, this Valuation Letter is not to be reproduced, quoted or referred to, in whole, or in part, in any public documents, submissions to any regulatory bodies or announcement without the prior written consent of KPMG Corporate Finance in each specific instance. We are not responsible or liable for any form of losses however occasioned to any third party as a result of the circulation, publication, reproduction or use of, or reliance on this Valuation Letter, in whole or in part.
4. This Valuation Letter must be read in conjunction with the key bases and assumptions set out in Section 5.0 herein.

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APPENDIX X

INDICATIVE VALUATION LETTER FROM KPMG ON THE VALUATION OF 100% EQUITY INTEREST IN CELCOM (Cont'd)

1. TRANSACTION BACKGROUND
2. Digi had on 8 April 2021 announced that Telenor ASA ("Telenor"), the parent company of Digi's largest shareholder, Telenor Asia Pte Ltd ("Telenor Asia"), and Axiata Group Berhad ("Axiata") were in discussion for the proposed merger of the telecommunication ("telco") operations of Celcom and Digi.
3. Subsequently on 21 June 2021, CIMB Investment Bank Berhad, on behalf of the Board of Directors of Digi, announced that Digi had on 21 June 2021 entered into a conditional share purchase agreement with Axiata for the Proposed Merger ("SPA").
4. Pursuant to the SPA, the Proposed Merger involves Digi acquiring 1,237,534,681 ordinary shares in Celcom representing 100% of the equity of Celcom from Axiata for an aggregate consideration of RM17,756,156,250 which shall be satisfied by:
5. 1. Digi issuing concurrently:
   2. 1. 73,378,844 fully paid-up new ordinary shares of Digi ("Digi Shares") or such other number of fully paid-up new Digi Shares representing 0.63% of the enlarged share capital of Digi on completion of the Proposed Merger, to Telenor Asia as nominee of Axiata subject to, amongst others, the payment by Telenor Asia to Axiata of a cash consideration of RM297,918,107; and
      2. 3,883,129,144 fully paid-up new Digi Shares or such other number of fully paid-up new Digi Shares representing 33.10% of the enlarged share capital of Digi on completion of the Proposed Merger, valued at RM15,765,504,325 to Axiata,

1. Digi making a cash payment of an amount equal to RM1,692,733,818 ("Cash Consideration") to Axiata, which is subject to adjustment under the terms of the SPA.

2.4 Upon completion of the Proposed Merger, Telenor Asia and Axiata will each hold an equal shareholding of 33.1% in Digi after the Proposed Merger ("MergeCo").

1. OVERVIEW OF CELCOM
2. Celcom and its subsidiaries, associate company and joint venture company ("Celcom Group") are principally involved in the provision of mobile communications services and network transmission-related services. Celcom Group's principal market for its services is Malaysia. The principal activities of the companies within the Celcom Group that are included in the Proposed Merger, are set out below.

Name	Principal activities
Celcom Axiata	Telecommunications network capacity,
Berhad ("Celcom")	infrastructure and services, and provision of
	management services to its subsidiaries.

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APPENDIX X

INDICATIVE VALUATION LETTER FROM KPMG ON THE VALUATION OF 100% EQUITY INTEREST IN CELCOM (Cont'd)

3.0 OVERVIEW OF CELCOM (Cont.)

Name	Principal activities	Equity Interest
		Held (%)
Subsidiaries held through	Celcom
Celcom Mobile Sdn. Bhd.	Mobile communications, network and	100.00
("Celcom Mobile")	application services and content
Celcom Networks Sdn.	Network telecommunications,	100.00
Bhd.	capacity and services
Celcom Properties Sdn.	Property investment	100.00
Bhd.
Escape Axiata Sdn. Bhd.	Over-The-Top and other on demand	100.00
	content services (Inactive)
Celcom Retail Holding	Strategic and business development,	100.00
Sdn. Bhd.	management, administrative, support
	services and investment holding
Celcom Intelligence Sdn.	Investment holding	100.00
Bhd.	(Inactive)
Celcom Timur (Sabah)	Fibre optic transmission network	80.00
Sdn. Bhd.
Celcom eCommerce Sdn.	Electronic wallet services	100.00
Bhd.	(Inactive)
Celcom Resources	Investment holding	100.00
Berhad
Bridgenet Solutions Sdn	Provision of cybersecurity solutions,	51.00
Bhd 1	networking solutions and other ICT
	solutions as well as managed
	services provider
Infront Consulting Group	Provision of shared services or	60.00
(M) Sdn Bhd 2	outsourcing services in relation to
	business management and
	integration system and provision of
	related services for implementation,
	technical services and maintenance
Subsidiary held through Celcom Retail Holding Sdn. Bhd.
Celcom Retail Sdn. Bhd.	Trading and distribution of	100.00
	communication devices and related
	products and managing retail stores
Subsidiary held through Celcom Resources Berhad
Celcom Trading Sdn.	Dealings in marketable securities	100.00
Bhd.
Subsidiary held through Infront Consulting Group (M) Sdn Bhd 2
Infront Consulting Group	Software consultancy	69.00
(S) Pte Ltd
Associate Company
Sacofa Sdn. Bhd.	Telecommunications infrastructure	15.12
	and services including all its related
	businesses
Joint Venture
Tune Talk Sdn. Bhd.	Mobile communications services	35.00

1. Celcom had completed the acquisition and subscription of a total of 51% equity interest in Bridgenet Solutions Sdn Bhd on 8 January 2022.
2. Celcom had completed the acquisition and subscription of a total of 60% equity interest in Infront Consulting Group (M) Sdn Bhd on 20 January 2022.

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APPENDIX X

INDICATIVE VALUATION LETTER FROM KPMG ON THE VALUATION OF 100% EQUITY INTEREST IN CELCOM (Cont'd)

1. BASIS OF THE INDICATIVE VALUATION
2. Subject of the Indicative Valuation
   This Indicative Valuation seeks to estimate a range of indicative values for a 100% equity interest in Celcom, inclusive of its subsidiaries, investment in associate company and joint venture company, on a standalone 'as is' pre-merger basis.
   The valuation excludes Celcom's entire 20% equity interest in a joint venture, namely Merchantrade Asia Sdn Bhd which shall be transferred out of Celcom before the completion of the Proposed Merger. (Note: Merchantrade Asia Sdn Bhd has been transferred to a wholly owned subsidiary of Axiata on 2 November 2021).
3. Date of the Indicative Valuation
   The date of this Indicative Valuation is 7 April 2021, being the last trading day prior to the announcement of the Proposed Merger ("Valuation Date") and is based on the audited financial statements of Celcom as at 31 December 2020.
   In addition, this Indicative Valuation has taken into consideration key events of Celcom after the Valuation Date up to 25 October 2022 including the financial statements of Celcom Group for the financial year ended 31 December 2021 and the six (6) month's period ended 30 June 2022, for purpose of reasonableness check if any subsequent material events would impair our opinion of value of the shares of Celcom as at the Valuation Date.
4. Basis of Valuation
5. 1. The standard of value that applies to this Indicative Valuation is the market value, defined as the estimated amount for which an asset should exchange on the valuation date between a willing buyer and a willing seller at an arm's length transaction, after proper marketing, and where the parties had each acted knowledgeably, prudently, and without compulsion.
   2. We understand that the Proposed Merger will not result in any particular shareholder gaining control over the merged entity. In addition, we approach the valuation of Celcom for the purpose of the Proposed Merger based on the merger of equals principle where we consider the valuation of Celcom's shares relative to the market pricing parameters of Digi's shares, on a standalone pre-merger basis excluding potential synergies arising from the Proposed Merger. Accordingly, no control premium is considered in this Indicative Valuation.
   3. The premise of valuation is for a going concern use.
   4. It must be emphasised that the range of values estimated by us involves a high degree of subjectivity and element of judgment. The final price of the business will reflect the specific circumstances of the buyer and seller, and their perceptions of business and market factors at the point of execution.

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APPENDIX X

INDICATIVE VALUATION LETTER FROM KPMG ON THE VALUATION OF 100% EQUITY INTEREST IN CELCOM (Cont'd)

5.0 KEY BASES AND ASSUMPTIONS

This Indicative Valuation is prepared based on the key bases and assumptions as set out below. We wish to highlight that the Indicative Valuation may be materially or adversely affected should the actual results or events differ from any of the bases and assumptions upon which the Indicative Valuation were based.

1. We have relied on the financial and non-financial information obtained from the virtual data room provided by the management of Celcom on or before 20 May 2021 in the form of audited financial statements for financial years ended 31 December ("FY") 2018 to 2020, management reports for FY2018 to FY2020, schedules, data and supporting documents. Subsequently, we have been provided with the audited financial statements for FY2020 of the associate company of Celcom, namely Sacofa Sdn Bhd ("Sacofa"), the audited financial statements for FY2021 of Celcom Group, and the Unaudited Condensed Consolidated Financial Information for the 6 months' ended 30 June 2022 of Celcom Group. (These information are collectively referred to as "Information").
   Our scope of work does not include performing procedures to verify the Information. We assume the Information provided by management of Celcom in the data room, are to the best of their knowledge, true and fair. Additionally, the scope of our work is different from that required for an audit which is based on generally accepted auditing standards and for that reason, it does not provide the same level of assurance as an audit of financial statements. We assume all such Information provided to us is accurate, complete and reliable.
2. We have not been given access to the business plan and financial projections of Celcom Group. Our indicative valuation of Celcom is performed in a limiting condition based on historical Information available in the data room and those available in the public domain, including investor relations presentations by Axiata that contained management's discussion and analysis of the Celcom Group. We have also not been given direct access to any discussions and meetings with the Management of Celcom. Alternatively, we have sought clarification on the Information available in the data room from Celcom and / or Axiata through Digi and Digi's principal advisor.
3. Change in the net debt and net working capital position of Celcom Group between 31 December 2020 and the closing date of the Proposed Merger will be adjusted from the Cash Consideration pursuant to Clause 7 (Adjustments to the Cash Consideration) of the SPA.
4. The contingent liabilities pertaining to two counterclaim suits against Celcom Group involving a potential claim sum of c.RM7.2 billion plus interest for each suit have not been adjusted in this Indicative Valuation. Pursuant to Clause 9.5 (TSDTR Indemnity) of the SPA, Axiata shall separately indemnify each Digi Group or Celcom Group, as the case may be, for losses arising from the said legal suits, if any.

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