ENG - Telekom Malaysia

Transcription

New Possibilities...
Enriching Lives
2003Annual
Telekom Malaysia Berhad
(128740-P)
Report
OUR
Vision
OUR VISION IS TO BE THE COMMUNICATIONS COMPANY OF CHOICE – FOCUSED ON
DELIVERING EXCEPTIONAL VALUE TO OUR CUSTOMERS AND OTHER STAKEHOLDERS.
OUR
Mission
To achieve our vision, we are determined to do the following:
•
Be the recognised leader in all markets we serve
•
Be a customer-focused organisation that provides one-stop total solution
•
Build enduring relationships based on trust with our customers and partners
•
Generate shareholder value by seizing opportunities in Asia Pacific and
other selected regional markets
•
Be the employer of choice that inspires performance excellence
No man is an island.
No nation exists in isolation.
We need to communicate, interact and exchange information.
From family to friends to business associates,
our lives are made richer through the power of interaction.
At Telekom Malaysia, we dedicate ourselves to creating new ways
to keep you in communication.
With fixed lines, mobile, Internet, Wi-Fi, broadband and more,
we are opening possibilities to enrich your lives.
Richer than ever before.
Audit Committee Report
48
Statement on Internal Control
52
Chairman’s Statement
56
Chief Executive’s Statement
60
002
OPERATIONS REVIEW
CONTENTS
TELEKOM MALAYSIA BERHAD
Annual Report 2003
• Fixed Line Services – TM TelCo
68
• Cellular – Celcom (Malaysia) Berhad
Box Article 1 – Mobility Solutions
78
82
• Multimedia Services – TM Net Sdn. Bhd.
Box Article 2 – The World of Broadband
88
94
• International Operations – TM International
Sdn. Bhd.
98
• Facilities Management – TM Facilities
Sdn. Bhd.
106
Other Subsidiaries
112
Educational Excellence
122
Human Resources
128
Customer Relationship Management
131
Research and Development
134
Towards a Safe and Healthy Work Culture
135
Quality Initiatives
137
Financial Calendar 2003
3
Our Contributions to the Nation
144
Notice of Annual General Meeting
4
Awards & Recognition
149
Statement Accompanying
the Notice of Annual General Meeting
6
Highlights of the Year 2003
150
Five-Year Group Financial Highlights
8
Group Financial Performance 2003
10
– Caring for Customers
157
Group Segmental Analysis
11
– Caring for Employees
158
Business and Other Statistics
12
– Caring for Community
160
Group Financial Review
14
Reports and Financial Statements
162
Group Structure
20
Shareholding Statistics
252
Corporate Information
22
List of Top 30 Shareholders
253
Board of Directors
24
Shareholders and Investor Information
255
Profile of the Board of Directors
26
Net Book Value of Land & Buildings
256
Group Business Management
36
Usage of Properties
257
Corporate Governance Statement
38
Group Directory
258
Risk Management
44
Proxy Form
Additional Compliance Information
46
Corporate & Social Responsibilities
– Caring for Shareholders
156
•
20
May 2003
18th Annual General Meeting (AGM) of the Company.
27
May 2003
Announcement of the unaudited consolidated 1st quarter results for the three
months ended 31 March 2003.
29-30
May 2003
Book Closure for determining the entitlement of the dividend.
23
June 2003
Date of payment of the final dividend of 10 sen per share (less 28% Malaysian
Income Tax) in respect of the financial year ended 31 December 2002.
26
FINANCIAL
CALENDAR 2003
Annual Report 2003
21
November 2003
Announcement of the unaudited consolidated 3rd quarter results for the nine
months ended 30 September 2003.
26
February 2004
Announcement of the audited consolidated results and the proposed final dividend
and special dividend for the financial year ended 31 December 2003.
26
April 2004
Issuance of Notice of the 19th AGM, Notice of Book Closure for Payment of
Dividend and Annual Report for the financial year ended 31 December 2003.
18
May 2004
19th AGM of the Company.
26-27
May 2004
Book Closure for determining the entitlement for the dividend.
21
June 2004
Date of payment of the final dividend of 10 sen per share (less 28% Malaysian
Income Tax) and special dividend of 10 sen per share (less 28% Malaysian
Income Tax) in respect of the financial year ended 31 December 2003.
003
August 2003
Announcement of the unaudited consolidated 2nd quarter results for the six
months ended 30 June 2003.
18 May 2004
004
1.
To receive the Audited Financial Statements for the financial
year ended 31 December 2003 together with the Reports of
the Directors and Auditors thereon.
(Ordinary Resolution 1)
2.
To approve the declaration of a final dividend of 10 sen per
share (less 28% Malaysian Income Tax) and special
dividend of 10 sen per share (less 28% Malaysian Income
Tax) in respect of the year ended 31 December 2003.
3.
To re-elect the following Directors retiring pursuant to
Article 103:-
NOTICE OF ANNUAL
GENERAL MEETING
(i)
Tan Sri Dato’ Ir. Muhammad Radzi bin Haji Mansor
(ii)
Ir. Prabahar N.K. Singam
(iii)
Dato’ Lim Kheng Guan
(iv)
Rosli bin Man
(v)
Tan Poh Keat
(vi)
Datuk Dr. Halim bin Shafie
(vii) Dato’ Abdul Majid bin Haji Hussein
Annual Report 2003
NOTICE IS HEREBY GIVEN THAT
the Nineteenth Annual
General Meeting of the
Company will be held at
10:00 a.m., on Tuesday,
18 May 2004 at the Grand
Ballroom, 9th Floor,
The Legend Hotel, 100 Jalan
Putra, 50350 Kuala Lumpur,
for the following purposes:-
4.
To approve the Directors' fees and remuneration.
5.
To re-appoint the retiring Auditors and to authorise the
Directors to fix their remuneration.
6.
As SPECIAL BUSINESS
To consider and if thought fit to pass the following Ordinary
Resolution:Authority to Allot and Issue Shares
“THAT subject to the Companies Act, 1965 (the Act), the
Articles of Association of the Company, approval from the
Malaysia Securities Exchange Berhad (MSEB) and other
Government or regulatory bodies, where such approval is
necessary, full authority be and is hereby given to the Board
of Directors pursuant to Section 132D of the Act, to issue
shares in the capital of the Company at any time upon such
terms and conditions and for such purposes as the
Directors may in their discretion deem fit provided always
that the aggregate number of shares to be issued, shall not
exceed 10% of the issued share capital of the Company.”
7.
To transact any other business of the Company of which
due notice has been received.
FURTHER NOTICE IS HEREBY GIVEN THAT a Depositor shall be
eligible to attend this meeting only in respect of:Shares deposited into the Depositor’s Securities Account
before 12:30 p.m. on 7 May 2004 (in respect of shares
which are exempted from Mandatory Deposit);
(b)
Shares transferred into the Depositor’s Securities Account
before 4:00 p.m. on 7 May 2004 in respect of Ordinary
Transfer;
(c)
Shares bought on the MSEB on a cum entitlement basis
according to the Rules of the MSEB.
Notes:
1. A member entitled to attend and vote at the above Meeting is
entitled to appoint a proxy to attend and vote in his stead. A
Proxy need not be a member of the Company and the provisions
of Section 149(1)(b) of the Act shall not apply to the Company.
Shareholders are reminded that pursuant to the Securities
Industry (Central Depositories) (Amendment No. 2) Act, 1998
(SICDA) which came into force on 1 November 1998, all shares
not deposited with Malaysian Central Depository Sdn. Bhd. (MCD)
by 12:30 p.m. on 1 December 1998 and not exempted from
Mandatory Deposit, have been transferred to the Minister of
Finance (MOF). Accordingly, the eligibility to attend this Meeting
for such undeposited shares will be the MOF.
2.
A member shall not be entitled to appoint more than two (2)
proxies to attend and vote at the same meeting provided that
where a member of the Company is an authorised nominee as
defined in accordance with the provisions of the Securities
Industry (Central Depositories) Act 1991, it may appoint at least
one (1) proxy in respect of each securities account it holds with
ordinary shares of the Company standing to the credit of the said
securities account.
NOTICE OF BOOK CLOSURE FOR
PAYMENT OF DIVIDENDS
3.
Where a member appoints two (2) proxies, the appointments
shall be invalid unless the proportion of the holding to be
represented by each proxy is specified.
4.
This instrument appointing a proxy shall be in writing under the
hand of the appointer or his attorney duly appointed under a
power of attorney or if such appointee is a corporation, either
under its common seal or under the hand of an officer or
attorney duly appointed under a power of attorney.
5.
A corporation which is a member, may by resolution of its
Directors or other governing body authorise such person as it
thinks fit to act as its representative at the Meeting, in
accordance with Article 92 of the Company's Articles of
Association.
6.
This instrument appointing the proxy must be deposited at the
office of the Share Registrar, Tenaga Koperat Sdn. Bhd., 20th
Floor, Plaza Permata (formerly known as IGB Plaza), Jalan
Kampar, Off Jalan Tun Razak, 50400 Kuala Lumpur not less than
48 hours before the time appointed for holding the Meeting or
any adjournment thereof.
7.
Explanatory Note for Ordinary Resolution No. 12
In line with the Company's plan for expansion/diversification, the
Company is actively looking into prospective areas so as to
broaden its operating base and earnings potential. As the
expansion/diversification may involve the issuance of new shares,
the Directors, under present circumstances would be required to
convene a general meeting to approve the issuance of new
shares even though the number involved is less than 10% of the
issued share capital. In order to avoid any delay and cost
involved in convening a general meeting to approve such issue
of shares, it is considered appropriate that the Directors be now
empowered to issue shares in the Company up to an amount not
exceeding in total, 10% of the issued share capital of the
Company for the time being, for such purposes as they consider
would be in the interest of the Company. This authority unless
revoked or varied at a general meeting will expire at the next
Annual General Meeting of the Company.
NOTICE IS ALSO HEREBY GIVEN THAT the Register of Members
will be closed from 26 May 2004 to 27 May 2004 (both dates
inclusive) to determine the Shareholders’ entitlement to the
dividend payment. The dividend, if approved by the shareholders
at the Company’s Nineteenth Annual General Meeting, will be paid
on 21 June 2004 to shareholders whose names appear in the
Register of Depositors on 25 May 2004.
FURTHER NOTICE IS HEREBY GIVEN THAT a Depositor shall
qualify for dividend entitlement only in respect of:(a)
Shares deposited into the Depositor’s Securities Account
before 12:30 p.m. on 21 May 2004 (in respect of shares
which are exempted from Mandatory Deposit);
(b)
Shares transferred into the Depositor’s Securities Account
before 4:00 p.m. on 25 May 2004 in respect of Ordinary
Transfers;
(c)
Shares bought on the MSEB on a cum entitlement basis
according to the Rules of the MSEB.
Shareholders are reminded that pursuant to SICDA, all shares not
deposited with MCD by 12:30 p.m. on 1 December 1998 and not
exempted from Mandatory Deposit, have been transferred to the
MOF. Accordingly, the dividend for such undeposited shares will
be paid to MOF.
By Order of the Board
Wang Cheng Yong (MAICSA 0777702)
Zaiton Ahmad (MAICSA 7011681)
Secretaries
Kuala Lumpur
26 April 2004
005
(a)
DIRECTORS RANKING FOR RETIREMENT AND RE-ELECTION AT THE
19TH ANNUAL GENERAL MEETING
The Directors retiring by rotation and who are seeking re-election, pursuant to Article 103 of the Company’s Articles of Association are as
follows:1.
2.
3.
4.
Rosli bin Man
5.
Tan Poh Keat
6.
7.
Dato’ Abdul Majid bin Haji Hussein
The respective profiles of the above Directors are set out in the Profile of the Board of Directors on pages 26 – 34 inclusive, of this Annual
Report. Their securities holdings in the Company and its subsidiaries are set out in the Analysis of Shareholdings on page 254 of this
006
Annual Report.
STATEMENT ACCOMPANYING THE
NOTICE OF ANNUAL GENERAL MEETING
Annual Report 2003
LIST OF GENERAL MEETINGS
from 1 January 2003 to 31 December 2003
TYPE OF MEETING
DATE
TIME
31 March 2003
10:00 a.m.
Extraordinary General Meeting
VENUE
Grand Ballroom
9th Floor, The Legend Hotel
100 Jalan Putra
50350 Kuala Lumpur
18th Annual General Meeting
20 May 2003
10:00 a.m.
Grand Ballroom
9th Floor, The Legend Hotel
100 Jalan Putra
50350 Kuala Lumpur
ATTENDANCE OF DIRECTORS AT THE BOARD OF DIRECTORS’ MEETINGS
The Board of Directors met fourteen (14) times during the financial year ended 31 December 2003. Details of their attendance are as
NAME
TOTAL MEETINGS
PERCENTAGE
ATTENDANCE
OF ATTENDANCE
14/14
100%
Dato’ Dr. Md Khir bin Abdul Rahman
14/14
100%
Dato’ Dr. Abdul Rahim bin Haji Daud
14/14
100%
11/14
79%
9/14
64%
Y.B. Dato’ Joseph Salang Gandum
12/14
86%
Dato’ Dr. Mohd Munir bin Abdul Majid
13/14
93%
Y.B. Dato’ Ir. Haji Mohd Zin bin Mohamed
11/14
79%
14/14
100%
14/14
100%
Rosli bin Man
14/14
100%
Tan Poh Keat
13/14
93%
Mohammad Zanudin bin Ahmad Rasidi
3/14
21%
5/14
36%
(Alternate Director to Dato’ Abdul Majid bin Haji Hussein)
Dato’ Suriah binti Abd Rahman
(Alternate Director to Datuk Dr. Halim bin Shafie)
007
follows:-
In RM Million
1999
2000
2001
2002
2003
1.
Operating revenue
7,833.0
8,815.7
9,673.2
9,834.1
11,796.4
2.
Profit before taxation# ^
1,017.0
1,250.8
2,443.6
1,530.4
1,810.5
3.
Profit after taxation# ^
889.5
578.7
1,775.1
870.7
1,444.2
4.
Profit after taxation and minority interests# ^
888.4
586.1
1,751.2
844.3
1,390.4
5.
Total shareholders’ fund# * ^
11,566.8
12,345.1
13,805.8
14,919.6
16,782.4
6.
Total assets# ^ ~
25,630.1
27,311.9
27,395.1
28,935.4
36,040.3
7.
Total borrowings ~
8,059.5
8,481.0
7,081.7
7,676.5
11,708.4
-1.8%
12.5%
9.7%
1.7%
20.0%
-52.1%
23.0%
95.4%
-37.4%
18.3%
-4.1%
6.7%
11.8%
8.1%
12.5%
008
GROWTH RATES OVER PREVIOUS YEARS
1.
Operating revenue
2.
Profit before taxation# ^
3.
Total shareholders’ fund# * ^
4.
Total assets# ^ ~
0.0%
6.6%
0.3%
5.6%
24.6%
5.
Total borrowings ~
2.0%
5.2%
-16.5%
8.4%
52.5%
FIVE-YEAR GROUP FINANCIAL HIGHLIGHTS
Annual Report 2003
1999
2000
2001
2002
2003
RATIO
1.
Return on shareholders’ fund# * ^
7.7%
4.7%
12.7%
5.7%
8.3%
2.
Return on total assets# ^
3.5%
2.1%
6.5%
3.0%
4.0%
3.
Debt equity ratio ^
0.7
0.7
0.5
0.5
0.7
4.
Dividend rate
10.0%
10.0%
15.0%
10.0%
20.0%
5.
Dividend cover# ^
2.9
1.9
3.8
2.7
2.1
6.
Earnings per share# ^
– Basic
29.5 sen
19.1 sen
56.6 sen
26.8 sen
43.6 sen
382.0 sen
399.9 sen
444.8 sen
433.0 sen
391.0 sen
RM14.70
RM7.55
RM17.70
RM9.65
RM12.60
RM7.50
RM10.20
RM6.90
RM9.20
RM7.15
7.
Net tangible assets per share# * ^
8.
Share price information
High
Low
#
*
^
~
Comparative figures for 1999 are restated to conform with the changed accounting policy in year 2000 on the treatment of foreign
exchange differences as well as the prior year adjustment on the Group’s share of post acquisition profits less losses of associates.
Comparative figures for 1999 – 2001 are restated to conform with the change in accounting policy in year 2002 on the recognition of
liabilities with respect to dividend proposed.
Comparative figures for 1999 – 2002 are restated to conform with the change in accounting policy in year 2003 with respect to the
recognition of deferred tax and goodwill.
Comparative figures for 2000 – 2002 are restated to conform with current year presentation as explained in the financial statements.
Profit After Taxation
[RM Million]
2,500
[RM Million]
2,000
1,775.1
1,500
1,444.2
1,000
578.7
500
500
Total Assets
Total Borrowings
[RM Million]
20,000
[RM Million]
40,000
[RM Million]
12,000
2003
2002
7,676.5
7,081.7
8,481.0
36,040.3
28,935.4
7,200
4,800
15,000
5,000
9,600
8,059.5
20,000
27,395.1
25,000
27,311.9
30,000
25,630.1
14,919.6
13,805.8
12,345.1
10,000
11,566.8
15,000
16,782.4
35,000
11,708.4
Total Shareholders’’ Fund
2001
2000
2003
2002
2001
2000
0
1999
2003
2002
2001
2000
0
1999
0
1999
2,000
870.7
889.5
4,000
1,250.8
1,000
1,530.4
1,500
1,810.5
9,834.1
9,673.2
2,000
1,017.0
6,000
7,833.0
8,000
8,815.7
10,000
2,443.6
Profit Before Taxation
[RM Million]
12,000
11,796.4
Operating Revenue
10,000
2,400
5,000
Return on Total Assets
Debt Equity Ratio
[%]
15
[%]
7
1.0
12.7
6
12
2003
6.5
Return on Shareholders’’ Fund
2002
2001
2000
1999
2003
2002
2001
2000
0
1999
2003
2002
2001
2000
0
1999
0
0.8
0.7
0.7
0.5
0.5
2002
4.0
2.1
2001
5.7
2
4.7
0.4
3.0
3
3.5
8.3
7.7
2000
0.6
4
6
0.7
9
1999
5
3
0.2
1
2003
2003
2002
2001
2000
0
1999
2003
2002
2001
2000
0
1999
0
Operating
Revenue
[%]
24
23.9%
29.2%
9
32
3
30.6%
40
2.1%
2.8%
%
8
3.4%
%
8.0%
16
0
Fixed Line – Fixed Line –
Business Residential
Data
Services
GROUP FINANCIAL
PERFORMANCE 2003
Internet
Other
Nonand
Telecommu- TelecommuMultimedia
nication
nication
Related
Related
Services
Services
Annual Report 2003
Distribution
of Income
[%]
52.8%
50
40
10
3.0%
%
11.8%
%
20
3.5%
%
30
28.9%
010
Cellular
Net
Finance
Cost
Taxation
0
Operating
Costs
Depreciation
Profit
After
Taxation
Segment Operating Revenue
for the year ended 31 December 2003
[%]
By Business
By Geographical
93
3 2%
3.2
Location
80
67.3%
3
100
40
2.1%
20
6.8%
%
30.6%
0
60
0
Malaysia Overseas
011
GROUP SEGMENTAL
ANALYSIS
Fixed Cellular Others
Line,
Data,
Internet
and
Multimedia
Annual Report 2003
Segment Result
for the year ended 31 December 2003
[%]
By Geographical
By Business
By Geographical
Location
40
4.1%
%
20
0
Line,
Data,
Internet
and
Multimedia
20
3.9%
%
40
8.4%
%
60
21.3%
%
60
3
36.7%
80
59.4%
80
100
7
74.6%
100
9 .6%
94.
911.66%
Location
5.4%
%
By Business
Segment Assets
as at 31 December 2003
[%]
0
Malaysia Overseas
Line,
Data,
Internet
and
Multimedia
Malaysia Overseas
Year ended 31 December
1999
2000
2001
2002
2003
CUSTOMER BASE
012
TM TelCo
1.
Residential telephone
3,258,044
3,405,744
3,406,655
3,328,456
3,236,457
2.
Business telephone
1,172,755
1,228,601
1,252,352
1,264,844
1,295,185
3.
Public telephone
162,276
156,600
120,528
79,479
79,613
4.
Leased circuits
61,280
63,527
62,134
54,169
57,380
5.
Other services
6,031
5,592
5,022
4,671
4,488
6.
Toll Free (1-300 and 1-800)
1,295
1,573
1,658
1,703
2,195
7.
ISDN
8.
Total access lines
9.
Total access lines per 100 population
18,089
34,512
52,202
64,976
63,587
4,430,799
4,634,345
4,659,007
4,593,300
4,531,642
20.1
20.9
20.0
18.8
18.1
BUSINESS AND
OTHER STATISTICS
Annual Report 2003
Celcom (M) Berhad
1.
Postpaid
—
—
—
—
1,176,860
2.
Prepaid
—
—
—
—
3,160,065
405,330
855,495
1,271,038
1,480,327
1,741,108
TM Net Sdn. Bhd.
1.
Access Services
2.
Application Services
—
621
7,937
9,158
3.
Content Services
—
—
253,413
380,884
480,290
30,069
30,404
30,724
30,850
31,040
1,610*
NETWORK CAPACITY
TM TelCo (’000)
1.
Cable pair (kilometers)
2.
Fibre (kilometers)
3.
Exchange lines
4.
International gateway exchange
172
245
295
326
472
7,337
7,970
8,528
8,656
8,679
33.0
34.5
40.3
45.7
45.7
Celcom (M) Berhad
1.
No. of BTS (’000)
—
—
—
—
5,322
2.
Network Switching System (NSS) capacity (’000)
—
—
—
—
5,046,517
3.
Coverage populated area (%)
—
—
—
—
95%
Year ended 31 December
1999
2000
2001
2002
2003
25,442
24,789
21,237
20,708
18,654
174
187
217
222
243
PRODUCTIVITY
TM TelCo
1.
Number of employees
2.
Number of access lines per employee
Celcom (M) Berhad
1.
Number of employees
—
—
—
—
4,264
2.
Revenue per employee (RM’000)
—
—
—
—
858
3.
Customer per employee
—
—
—
—
1,017
332
254**
406
424
510
TM Net Sdn. Bhd.
1.
Number of employees
2.
Revenue per employee (RM)
437,885
828,590
743,936
872,641
3.
Revenue (RM’000)
145,378
210,462
302,038
370,000
0.5
0.4
0.4
0.4
0.3
433,333
221,000***
QUALITY OF SERVICE
1.
Faults report per line
2.
Complaints per 1000 lines
10.2
8.3
5.6
5.2
4.3
3.
Leased circuits fault restoration within
24 hours (%)
97.3
100.0
85.1
96.7
97.5
Celcom (M) Berhad
1.
013 – Overall Network Availability (%)
– Accessibility (%)
– Retainability (%)
99.81
98.13
97.37
99.61
89.27
96.50
99.95
95.67
97.27
99.91
96.78
95.11
95.94
97.84
98.35
2.
019 – Overall Network Availability (%)
– Accessibility (%)
– Retainability (%)
—
—
—
—
—
—
—
—
—
—
—
—
99.50
96.59
98.19
TM Net Sdn. Bhd.****
1.
Complaints of bills issued (%)
—
—
—
—
0.22
2.
Number of complaints per 1,000 customers
—
—
—
—
31
Notes:
*
In year 2000, Netmyne offered a one-year free subscription for the service and 1,610 subscribers signed up. However, in 2001,
a significant number of these subscribers terminated the service when the free subscription period ended.
**
Significant drop in the number of employees in 2000 as more than half of the non-executives from Internet Data Centre (IDC) were
transferred to COINS.
*** This is nett revenue reported in TM Net’s 2003 audited report in which the PSTN revenue has been excluded.
**** Based on the Mandatory standards for Quality of Service regulated by MCMC.
013
TM TelCo
Revenue from fixed line services mainly derived from the
Company (Telekom Malaysia). Fixed line services comprise
business telephony (which also includes Integrated Services
Digital Network (ISDN), payphone, interconnect, international
inpayment) and residential telephony recorded slight decrease in
revenue of 2.5% (RM161.6 million) from RM6,428.8 million
recorded in 2002 to RM6,267.2 million in 2003. Decreased call
revenue was the main contributing factor to lower revenue from
fixed line services.
An upward adjustment of RM3.0 ringgit per month on rental for
residential customers since March 2003 contributed higher rental
revenue. However, local, long distance and international call
revenue declined by 3.1%, 5.7% and 33.0% respectively in
comparison to the preceding year. Further more, there was a full
year effect of the tariff reduction in 2003 as compared to only
6-9 months effect in 2002.
014
Lower interconnect revenue for fixed line services (net of inter-
GROUP
FINANCIAL REVIEW
company transactions) also contributed to the decrease in fixed
revised interconnection rate in July 2003 further reduced the
Annual Report 2003
Company’s interconnect revenue. Lower international inpayment
line revenue. In 2003, RM47.4 million being interconnect revenue
earned from Celcom post acquisition was eliminated from call
revenue. There was no such elimination in 2002. In addition, the
also contributed to lower call revenue.
All the above factors contributed to the 6.1% (RM295.1 million)
OPERATING REVENUE
For the financial year ended 31 December 2003, Group operating
revenue increased by 20.0% (RM1,962.3 million) from
RM9,834.1 million recorded in 2002 to RM11,796.4 million in
2003. The encouraging growth in revenue was mainly contributed
by Cellular segment due to consolidation of Celcom (Malaysia)
Berhad (Celcom), a subsidiary acquired during the year.
Revenue from Cellular segment comprises rental, calls charges,
short message services and interconnect charges registered
significant growth of 127.0% (RM2,017.4 million) from
RM1,588.9 million recorded in 2002 to RM3,606.3 million in
2003. The consolidation of 8.5 month results of Celcom
contributed RM1,826.0 million to the above increase and the
remaining was jointly contributed by overseas subsidiaries namely
MTN Networks (Pvt.) Limited, TM International (Bangladesh)
Limited (TMIB) and Societe Des Telecommunications De Guinee.
reduction in call revenue.
Revenue from data services, which include leased services,
Corporate Information Superhighway (COINS) and frame relay
and packet services recorded encouraging growth of 15.9%
(RM129.2 million) as compared to 2002 mainly due to increase
in customers for COINS services as well as introduction of new
products such as Asymmetrical Digital Subscriber Line (ADSL).
Revenue from internet and multimedia services comprise mainly
revenue from internet and other multimedia services,
development of education system and software and advertisement
charges. TM Net Sdn. Bhd. (TM Net), a wholly owned subsidiary
that was corporatised in July 2002 to provide internet and
multimedia services registered significant growth of 26.0% in
operating revenue as compared to annualised revenue for 2002.
This growth was achieved at the back of increase usage on
application and content as well as increase in broadband
Operating Revenue
2003
3,200
2002
2,821.6
2,816.3
6
3,607.2
7
3,450.99
4,000
3,606.3
6
[RM Million]
213.7
250.3
395.44
334.1
394.55
396.55
800
812.8
942.0
1,600
1,588.9
2,400
0
Fixed Line –
Business
Fixed Line –
Residential
Data
Services
Internet
and
Multimedia
Other
Telecommunication
Related
Services
NonTelecommunication
Related
Services
subscribers. However, significantly lower revenue from
The acquisition of Celcom resulted in significant change in the
development of education system and software of Telekom Smart
revenue mix of the Group. In line with the Group’s target, Cellular
School Sdn. Bhd. due to completion of pilot project off set the
segment contributed 30.6% of Group revenue in 2003 as
increase from TM Net. Consequently, internet and multimedia
compared to only 16.1% in 2002. Accordingly, contribution from
services only recorded marginal revenue growth of 0.5%.
fixed-line segment reduced to 53.1% from 65.4% recorded in
2002. Contribution from data services, internet and multimedia
Other telecommunication related services comprise mainly
services and other telecommunication related services maintained
recoverable works order, maintenance, international services,
at the same level as 2002 i.e. 8.0% (2002: 8.3%), 3.4% (2002:
broadcasting, restoration of submarine cable and etc registered
4.0%) and 2.8% (2002: 4.0%) respectively. Non-telecommunication
15.5% (RM61.3 million) reduction as compared to the preceding
related services contributed 2.1% (2002: 2.2%) to Group
year. Lower revenue from restoration of submarine cable was the
operating revenue.
main contributing factor.
Non-telecommunication related services comprise mainly services
OPERATING COSTS
from subsidiaries with core business in consultancy, property
For the financial year ended 31 December 2003, Group operating
management, education, trading in consumers premises equipment
costs increased by 22.9% (RM1,863.4 million) from RM8,154.8
and etc. This segment recorded 17.1% (RM36.6 million) growth
million recorded in 2002 to RM10,018.2 million in 2003 of which
in revenue mainly due to higher contribution from trading in
RM1,614.1 million was attributed to the consolidation of Celcom’s
consumers premises equipment and education.
results. All category of expenses have recorded significant
increase especially depreciation charge and impairment of
property, plant and equipment (PPE), domestic and international
outpayment, marketing, advertising and promotion and
maintenance which have jointly accounted for 93.0% (RM1,733.4
million) of the total increase in operating costs.
015
Cellular
Operating Costs
[RM Million]
2003
3,551.3
4,000
2002
1,547.8
1,842.88
342.77
351.99
564.4
6
445.8
.
323.9
473.8
3
800
377.55
536.5
6
1,307.7
0
1,600
1,351.3
3
1,464.8
2,400
1,209.0
9
2,481.8
3,200
0
016
Depreciation
Domestic
and
International
Outpayment
Staff Costs
Marketing,
Advertising
and
Promotion
Maintenance
Bad
and Doubtful
Debts
Supplies
and
Inventories
Other
Operating
Costs
GROUP FINANCIAL REVIEW
Annual Report 2003
Current year Group depreciation charge increased significantly by
Consolidation of Celcom’s results also contributed significant
43.1% (RM1,069.5 million) to RM3,551.3 million as compared to
increase in marketing, advertising and promotion costs which
RM2,481.8 million recorded in 2002. The consolidation of
increased by 42.1% (RM159.0 million) over the preceding year.
Celcom’s results and higher depreciation charge recorded by
Celcom contributed RM202.6 million to the increase whereas TM
Telekom Malaysia and TM Cellular Sdn. Bhd. (TM Cellular) arising
Cellular recorded reduction of RM56.1 million. On merged basis,
from higher asset additions in late 2002 and 2003 jointly
Celcom and TM Cellular jointly accounted for 92.1% of the
contributed to the significant increase in depreciation charge. The
increase and TM Net Sdn. Bhd. and TMIB jointly contributed the
Group also recorded RM99.2 million impairment of PPE mainly
balance.
contributed by Celcom and TM Cellular. There was no impairment
of PPE in 2002.
The Group also recorded significant increase in maintenance cost
of 46.3% (RM149.9 million) which was mainly contributed by
Domestic and international outpayment increased by 21.2%
Celcom and TM Cellular.
(RM255.8 million) to RM1,464.8 million. Higher international
outpayment was mainly recorded at Telekom Malaysia level
Despite consolidation of RM130.0 million staff costs of Celcom,
resulted from backdated adjustments for volume and traffic
Group staff costs only recorded marginal growth of 3.3%
discrepancies whereas increased interconnect outpayment was
(RM43.6 million) due to reduction at Telekom Malaysia level since
jointly contributed by Telekom Malaysia and the consolidation of
there was no cost incurred for voluntary separation program in
Celcom.
2003 as compared to RM147.0 million in 2002.
Allowance for bad and doubtful debts expense declined
Net Finance Cost
significantly by 21.0% (RM118.6 million) mainly due to lower
[RM Million]
provision at Telekom Malaysia resulting from improved credit
Cellular also recorded lower allowance for bad debt of RM68.0
517.1
7
control and better collection especially for fixed line services. TM
550
debt of Celcom of RM51.5 million.
440
Depreciation charge remained the biggest cost component and
330
389.6
million but was off set with the post acquisition allowance for bad
constituted 35.4% of Group operating costs followed by domestic
and international outpayments (14.6%), staff costs (13.5%),
220
inventories (3.5%), and etc.
110
87.1
7
(4.7%), allowance for bad and doubtful debt (4.4%), supplies and
85.7
5
marketing, advertising and promotion (5.4%), maintenance
0
2002
NET FINANCE COST
The current year net finance cost of RM430.0 million was 41.5%
2003
Finance
Cost
(RM126.1 million) higher than RM303.9 million recorded in 2002.
Finance
Income
The consolidation of Celcom’s net finance cost of RM67.3 million
and higher net finance cost incurred by Telekom Malaysia of
017
RM30.7 million due to increased borrowings jointly contributed to
the increase. Total borrowings of Telekom Malaysia increased from
RM7,279.0 million as at 31 December 2002 to RM9,418.5 million
as at 31 December 2003 as a result of additional borrowings
secured during the year to finance the acquisition of Celcom.
PROFIT BEFORE TAXATION
The Group recorded encouraging growth of 18.3% (RM280.1
million) in profit before taxation (PBT) from RM1,530.4 million in
[RM Million]
The Group share of profits less losses of associates for 2003 of
2,000
1,500
increased revenue and reduced costs as compared to 2002 which
1,017.0
Improved performance of TSA was achieved on the back of
893.0
9
recorded in 2002 mainly contributed by Telkom SA Limited (TSA).
1,469.2
RM375.2 million was significantly higher than RM42.5 million
1,000
500
73.5
an associate of RM44.2 million as compared to loss of RM15.6
600.1
included significant adjustment for staff benefits, fixed assets and
provision for contingent liabilities. Contribution from Celcom as
1,530.4
2,500
1,250.8
0
higher PBT.
1,395.5
,
of associates’ profits less losses was the main contributor to
million in 2002 and recognition of one off exceptional gain from
restructuring by Samart Corporation Public Company Limited also
contributed to the outstanding performance of associates.
1,810.5
1
2
2,443.6
2002 to RM1,810.5 million in 2003. Significant increase in share
0
1999
Group
2000
Company
2001
2002
2003
Despite 18.3% increase in PBT, taxation expense for 2003 was
ASSETS
44.5% (RM293.4 million) lower than 2002. This was mainly due
Total assets for the group increased from RM28,935.4 million in
to recognition of deferred tax income which relates to previously
2002 to RM36,040.3 million in 2003 mainly due to increase in
unrecognised temporary differences of RM160.4 million by a
intangible assets, property, plant and equipment (PPE),
subsidiary. Adjustment for over provision of corporate taxation in
investments, deferred tax asset, trade and other receivables, cash
respect of prior year at Telekom Malaysia of RM89.9 million also
and bank balances after netting off decrease in associates.
contributed to lower taxation expense.
During the year, the Group changed its accounting policy with
Consequent from higher PBT and 44.5% decrease in taxation
respect to goodwill. In line with the new policy, goodwill on
expense, profit for the year attributable to shareholders increase
acquisition of Celcom of RM4,022.7 million is now capitalised as
significantly by 64.7% (RM546.1 million) as compared to 2002.
intangible asset. In addition, expenditure incurred with respect to
acquisition of 3G spectrum licence is also capitalised as
intangible asset. These capitalisation increased the total assets by
RM4,072.7 million.
PPE increased by RM2,039.4 million from RM19,566.5 million in
2002 to RM21,605.9 million in 2003 mainly due to consolidation
of Celcom’s PPE after netting off reduction at Telekom Malaysia.
Higher trade and other receivable and cash and bank balances
018
also mainly contributed by Celcom.
GROUP FINANCIAL REVIEW
The acquisition of Measat Global Berhad increased the total
was RM245.1 million higher than the preceding year. Decrease of
investments to RM384.7 million as at 31 December 2003 and
Annual Report 2003
associates of RM1,246.9 million was mainly due to reversal of
Celcom’s carrying value to the respective line item of assets
under consolidation accounting.
Total Assets 2003
60
59.9%
75
45
1.9%
2.8%
Trade
and
Other
Receivables
4.2%
Intangible
Assets
9.3%
3
10.6%
0
15
11.3%
30
Long
Term
Receivables
Other
Assets
0
Property,
Plant
and
Equipment
Cash
and
Bank
Balances
Associates
Resulting from higher profit after taxation and increased total
assets, the return on total assets increased from 3.0% in 2002 to
4.0% in 2003.
SHAREHOLDERS’ FUND
The Group shareholders’ fund increased from RM14,919.6 million
recorded in 2002 to RM16,782.4 million in 2003. The increase
was mainly attributed to issuance of new shares under the
Employees Share Options Scheme and net profit of the year
attributable to shareholders after netting off dividend paid during
the year.
Consequent from significantly higher net profit for the year
attributable to shareholders as mentioned earlier, return on
shareholders’ fund increased significantly from 5.7% in 2002 to
8.3% in 2003. Likewise, earnings per share (EPS) also increased
from 26.8 sen in 2002 to 43.6 sen in 2003.
In line with improved performance in 2003, the proposed
dividend for financial year 2003 comprised final dividend of 10.0
019
sen less tax at 28% and special dividend of 10.0 sen less tax at
28% had doubled up in comparison to final dividend of 10.0 sen
less tax at 28% in 2002. Consequently, dividend cover declined
from 2.7 in 2002 to 2.1 in 2003.
Shareholders’’ Fund
EPS (sen)
56.6
6
43.6
60
26.8
36
29.5
48
5.7
4.7
7.77
12
8.33
12.7
19.11
24
0
1999
2000
2001
2002
2003
ROSHF (%)
GROUP STRUCTURE
as at 31 March 2004
Annual Report 2003
CORPORATE
CENTRE
>> 100%
UNIVERSITI TELEKOM SDN. BHD.
100%
UNITELE MULTIMEDIA SDN. BHD.
>> 100%
TELEKOM RESEARCH & DEVELOPMENT
SDN. BHD.
>> 100%
TELEKOM ENTERPRISE SDN. BHD.
>> 100%
MEDIATEL (MALAYSIA) SDN. BHD.
>> 100%
TM INTERNATIONAL (L) LIMITED
>> 100%
TM INTERNATIONAL LEASING
INCORPORATED
>> 100%
TM GLOBAL INCORPORATED
FIXED LINE
SERVICES
>> Telekom Malaysia Berhad
>> 69.52%
VADS BERHAD
100%
VADS e-SERVICES SDN. BHD.
100%
VADS SOLUTIONS SDN. BHD.
>> 100%
GITN SDN. BERHAD
>> 70%
MEGANET COMMUNICATIONS SDN. BHD.
>> 60%
FIBERAIL SDN. BHD.
>> 16.22%
mySPEED.COM SDN. BHD.
>> 100%
TELEKOM PAYPHONE SDN. BHD.
>> 100%
CITIFON SDN. BHD.
>> 100%
TELEKOM SALES & SERVICES SDN. BHD.
>> 100%
TELEKOM MALAYSIA (HONG KONG)
LIMITED
>> 100%
TELEKOM MALAYSIA (UK) LIMITED
>> 100%
TELEKOM MALAYSIA (USA) INC.
>> 100%
TELEKOM MALAYSIA (S) PTE. LTD.
CELLULAR
>> 100%
CELCOM (MALAYSIA) BERHAD**
100%
TECHNOLOGY RESOURCES
INDUSTRIES BERHAD
100%
FREEMANTLE HOLDINGS (M)
SDN. BHD.
100%
TR COMPONENTS SDN. BHD.
100%
REGO MULTI-TRADES SDN. BHD.
100%
TR INTERNATIONAL LIMITED
60%
TRI TELECOMMUNICATION
TANZANIA LIMITED
(LIQUIDATORS APPOINTED)
86.4%*
SHEBA TELECOM (PVT.) LTD.
49%
MOBILE TELECOMMUNICATIONS
COMPANY OF ESFAHAN
(J.V.-P.J.S.)
100%
CELCOM TRANSMISSION (M)
SDN. BHD.
41%
FIBRECOMM NETWORK (M)
SDN. BHD.
100%
CELCOM TECHNOLOGY (M)
SDN. BHD.
100%
CELCOM ACADEMY SDN. BHD.
60%
CELCOM TIMUR (SARAWAK)
SDN. BHD.
60%
CELCOM TIMUR (SABAH) SDN. BHD.
100%
TM CELLULAR SDN. BHD.
100%
ALPHA CANGGIH SDN. BHD.
>> 100%
MOBIKOM SDN. BHD.
MULTIMEDIA
>> 100%
TM NET SDN. BHD.
>> 100%
TELEKOM MULTI-MEDIA SDN. BHD.
INTERNATIONAL
OPERATIONS
>> 100%
TM INTERNATIONAL SDN. BHD.
100%
MTN NETWORKS (PRIVATE)
LIMITED
51%
TELEKOM SMART SCHOOL
SDN. BHD.
100%
TM INTERNATIONAL LANKA
(PRIVATE) LIMITED
49%
MAHIRNET SDN. BHD.
100%
TMI MAURITIUS LIMITED
30%
MUTIARA.COM SDN. BHD.
85%
G-COM LTD.
>> 100%
TELEKOM PUBLICATIONS SDN. BHD.
100%
CYBERMALL SDN. BHD.
>> 70%
TELEKOM APPLIED BUSINESS
SDN. BHD.
>> 70%
TELEKOM TECHNOLOGY SDN. BHD.
FACILITIES
MANAGEMENT
>> 100%
TM FACILITIES SDN. BHD.
>> 100%
MENARA KUALA LUMPUR SDN. BHD.
51%
CAMBODIA SAMART
COMMUNICATION CO. LTD.
19.59%
SAMART CORPORATION PUBLIC
COMPANY LIMITED
>> 100%
TELEKOM MANAGEMENT SERVICES
SDN. BHD.
>> 70%
TM INTERNATIONAL (BANGLADESH)
LIMITED
>> 60%
SOTELGUI S.A. (Societe Des
Telecommunications De Guinee)
>> 60%
TELEKOM NETWORKS MALAWI
LIMITED
>> 100%
TELEKOM MALAYSIA
– AFRICA SDN. BHD.
40%
THINTANA COMMUNICATIONS LLC
30%
TELEKOM SA LIMITED
Notes: * Pending arbitration proceedings
** Held through Telekom Enterprise Sdn. Bhd.
The above structure excludes dormant/inactive companies. The complete list of subsidiaries/associates is shown in notes 43 and 44
to the financial statements
BOARD OF DIRECTORS
Chairman
(Non-Independent Non-Executive Director)
Chief Executive
(Non-Independent Executive Director)
Deputy Chief Executive/Executive Director
(Non-Independent Executive Director)
022
CORPORATE
INFORMATION
Annual Report 2003
(Senior Independent Non-Executive Director)
(Independent Non-Executive Director)
Rosli bin Man
Tan Poh Keat
(Alternate Director to Dato’ Abdul Majid bin Haji Hussein)
(Alternate Director to Datuk Dr. Halim bin Shafie)
SECRETARIES
Wang Cheng Yong (MAICSA 0777702)
Zaiton Ahmad (MAICSA 7011681)
REGISTERED OFFICE
Level 51, North Wing
Menara Telekom
Off Jalan Pantai Baharu
50672 Kuala Lumpur
Tel No. : 03-2240 1211/1221/1225
Fax No. : 03-2283 2415/2284 8039
REGISTRAR
AUDITORS
PricewaterhouseCoopers
(Chartered Accountants)
11th Floor, Wisma Sime Darby
Jalan Raja Laut
50706 Kuala Lumpur
Tel No. : 03-2693 1077
Fax No. : 03-2693 0997
PRINCIPAL BANKERS
Bumiputra-Commerce Bank Berhad
Malayan Banking Berhad
Affin Bank Berhad
PRINCIPAL SOLICITORS
Zul Rafique & Partners
Zain & Co.
Nik Saghir & Ismail
STOCK EXCHANGE LISTING
Malaysia Securities Exchange Berhad
023
Tenaga Koperat Sdn. Bhd.
20th Floor, Plaza Permata
(formerly known as IGB Plaza)
Jalan Kampar
Off Jalan Tun Razak
50400 Kuala Lumpur
Tel No. : 03-4041 6522
Fax No. : 03-4042 6352
from left to right:
Dato’ Suriah binti Abd Rahman (Alternate Director)
BOARD
OF DIRECTORS
Rosli bin Man (Director)
Y.B. Dato’ Ir. Haji Mohd Zin bin Mohamed (Director)
Tan Poh Keat (Director)
Ir. Prabahar N.K. Singam (Director)
Y.B. Dato’ Joseph Salang Gandum (Director)
Dato’ Abdul Majid bin Haji Hussein (Director)
Tan Sri Dato’ Ir. Muhammad Radzi bin Haji Mansor (Chairman)
Dato’ Dr. Md Khir bin Abdul Rahman (Chief Executive)
(Deputy Chief Executive/Executive Director)
Datuk Dr. Halim bin Shafie (Director)
Dato’ Dr. Mohd Munir bin Abdul Majid (Director)
Dato’ Lim Kheng Guan (Director)
Mohammad Zanudin bin Ahmad Rasidi (Alternate Director)
Wang Cheng Yong (Company Secretary)
Zaiton binti Ahmad (Joint Secretary)
026
TAN SRI DATO’
Ir. MUHAMMAD RADZI
BIN HAJI MANSOR
PROFILE OF THE
BOARD OF DIRECTORS
Annual Report 2003
DATO’ DR. MD KHIR
BIN ABDUL RAHMAN
TAN SRI DATO’ Ir. MUHAMMAD RADZI BIN HAJI MANSOR
(62 years of age – Malaysian)
Chairman
Non-Independent Non-Executive Director
Tan Sri Dato’ Ir. Muhammad Radzi was appointed Chairman and
Director of Telekom Malaysia on 12 July 1999. He graduated with
a Diploma in Electrical Engineering in 1962 from Faraday House
Engineering College, London and a Masters in Science (Technological
Economics) from the University of Stirling, Scotland in 1975.
He served in various engineering and management capacities in
the former Jabatan Telekom Malaysia (JTM) over a twenty-two
year period, including a three-year secondment as Technical
Adviser to the Ministry of Energy, Telecommunications and Post.
Tan Sri Radzi retired as Director General of Telecommunications
upon corporatisation of JTM on 1 January 1987 and was
subsequently appointed as Director of Operations of Telekom
Malaysia. He served as Director of Marketing and Customer
Services from 1989 to 1995. He was then appointed as Director
of Regulatory Management and External Affairs, and retired in
July 1996.
From 1997 to 1999, he was retained as a Consultant/Adviser on
multimedia flagship application projects for the Multimedia
Development Corporation Sdn. Bhd. (MDC), a company established
by the Malaysian Government to oversee the development and
implementation of multimedia projects.
Tan Sri Radzi currently serves as Chairman of the Board
Nominating and Remuneration Committee and Board Employees’
Share Option Scheme Committee. He is also a Board Member of
a number of subsidiaries and associate companies of Telekom
Malaysia. He is a Non-Executive Director nominated by the
Minister of Finance (Inc), the Special Shareholder of Telekom
Malaysia and has never been charged for any offence. He has no
family relationship with any Director or major shareholder of the
Company nor any conflict of interest with the Company.
DATO’ DR. MD KHIR BIN ABDUL RAHMAN
Chief Executive
Non-Independent Executive Director
Dato’ Dr. Md Khir was appointed Chief Executive and a Board
Member on 1 May 2000. Prior to this, he was the Deputy Chief
Executive/General Manager of Malaysian Electronics Payment
System Sdn. Bhd. (MEPs).
He holds a Bachelor of Science Degree in Mathematics from
University of Malaya, Masters in Agricultural Development and
Doctorate of Science in Computing Statistics, from the State
University of Ghent, Belgium.
Dato’ Dr. Md Khir started his career in Malaysian Agricultural
Research and Development Institute (MARDI) in 1972, before
joining Bank Negara Malaysia in 1983. He served the Central Bank
in various senior positions before joining the telecommunications
sector in 1996 as the Managing Director of Mejati Technologies
Group.
He is also a Director of VADS Berhad (VADS), MDC, Malaysian
Industry-Government Group for High Technology (MIGHT) and
SIRIM Berhad.
Dato’ Dr. Md Khir is currently a Member of the Board Employees’
Share Option Scheme Committee, Board Tender Committee TelCo,
Board Re-listing of Celcom Committee and also a Board Member
of a number of subsidiaries and associate companies of Telekom
Malaysia. He is an Executive Director nominated by the Minister
of Finance (Inc), the Special Shareholder of Telekom Malaysia and
has never been charged for any offence. He has no family
relationship with any Director or major shareholder of the
027
A Chartered Professional Engineer registered with the Board of
Engineers, Malaysia and Engineering Council, United Kingdom;
he is a corporate member of the Institution of Engineers,
Malaysia, the Institution of Electrical Engineers, United Kingdom
and the Institute of Management, United Kingdom. He has been
appointed as Board Member, Board of Engineers, Malaysia
effective from 23 August 2002.
DATO’ DR. ABDUL RAHIM
BIN HAJI DAUD
DATO’ DR. ABDUL RAHIM BIN HAJI DAUD
Non-Independent Executive Director
028
He was appointed as Deputy Chief Executive of the Company
effective from 29 May 2001 and has held the position of
Executive Director since 7 July 1998. He obtained a Bachelor of
Engineering (Hons.) in Electronics from the University of
Liverpool, United Kingdom, Masters in Science (Telecommunications
Engineering) from University of Birmingham, United Kingdom and
Doctorate in Engineering (Telecommunication) from the University
of Bath, United Kingdom. He also obtained a Masters in Business
Administration from University of Ohio, USA. He has attended the
Harvard Business School’s Advanced Management Program and
also the Senior Executive Development Program at the Wharton
School of Business, University of Pennsylvania, USA. He is a
Member of the Board of Engineers, Malaysia and also a Fellow of
the Institution of Engineers, Malaysia.
DATO’ ABDUL MAJID
BIN HAJI HUSSEIN
DATUK DR. HALIM
BIN SHAFIE
He joined JTM as a Telecommunications Engineer in 1973. He
has wide experience in managing operations in relation to
Telecommunications and Information Technology. In 1988, he was
appointed General Manager, Information Systems and became the
Senior General Manager, National Network Operations in 1993. In
July 1995, he was made Senior Vice President, Network Services
before his appointment to head Telekom Malaysia’s TelCo as its
Chief Operating Officer in 1996. Upon his appointment as
Executive Director in July 1998, he remained as the Chief
Operating Officer TelCo until 1 February 2001 when he assumed
the position of Executive Director, Corporate Strategy and
Development. He was the first Malaysian to be elected as
Chairman of Commonwealth Telecommunications Organisation
(CTO) comprising 35 countries for three terms from September
1999 to November 2002.
Dato’ Dr. Abdul Rahim serves as a Member of Board Employees’
Share Option Scheme Committee, Board Tender Committee TelCo
and also a Board Member of a number of subsidiaries and
associate companies of Telekom Malaysia. He is an Executive
Director nominated by the Minister of Finance (Inc), the Special
Shareholder of Telekom Malaysia and has never been charged for
any offence. He has no family relationship with any Director or
major shareholder of the Company nor any conflict of interest
with the Company.
DATO’ ABDUL MAJID BIN HAJI HUSSEIN
Upon graduating with a Bachelor of Economics majoring in
Accountancy, he served the Accountant General’s Office for two
years and later the National Institute of Public Administration
(INTAN) for six years as a lecturer and program coordinator. In
1983, he was seconded to the Federal Agricultural Marketing
Authority (FAMA) as the Director of Planning and later served as
the Deputy Director General in charge of Administration. From
1990 to 1993, he served as the Senior Assistant Director in the
Budget Division of the Ministry of Finance. He continued his
public service as the State Financial Officer of Negeri Sembilan,
Director of Service in the Public Services Department and the
State Secretary of Perak prior to being appointed to his present
position as Deputy Secretary General Treasury (Operations) in the
Ministry of Finance.
Dato’ Abdul Majid currently serves as a Non-Executive Chairman
of the Board Tender Committee TelCo and a Member of the Board
Employees’ Share Option Scheme Committee, Board Audit
Committee and Board Re-listing of Celcom Committee. He is also
a Director of Perusahaan Otomobil Nasional Berhad and Keretapi
Tanah Melayu Berhad. He is a Non-Executive Director nominated
by the Minister of Finance (Inc), the Special Shareholder of
Telekom Malaysia and has never been charged for any offence.
He has no family relationship with any Director or major
shareholder of the Company nor any conflict of interest with the
Company.
DATUK DR. HALIM BIN SHAFIE
Datuk Dr. Halim was first appointed to the Board on 24 November
2000. He obtained a Bachelor of Economics (Hons.) from the
University of Malaya in 1972, Masters in Public and International
Affairs from the University of Pittsburgh, USA in 1980 and a
Doctorate in Information Transfer from Syracuse University, USA
in 1988. He also attended the Advanced Management Program at
the Harvard Business School, USA in 2000.
He has held several positions in the Government sector, including
Assistant Secretary at the Ministry of Education. He served as
Program Co-ordinator for the National Computer Training Center
at INTAN, and as Director of the Information Technology Division
of the Malaysian Administrative Modernisation and Management
Planning Unit (MAMPU) in the Prime Minister’s Department. He
served as the Director of INTAN before becoming Deputy Secretary
General, Communications and Multimedia, Ministry of Energy,
Communications and Multimedia in 1999. He was appointed as
Secretary General of the Ministry from November 2000.
Datuk Dr. Halim is currently a member of the Board Employees’
Share Option Scheme Committee, Board Tender Committee TelCo,
Board Re-listing of Celcom Committee and also a Board Member
of a number of subsidiaries of Telekom Malaysia. He is also a
Director of Tenaga Nasional Berhad and Pos Malaysia Berhad.
He is a Non-Executive Director nominated by the Minister of
Finance (Inc), the Special Shareholder of Telekom Malaysia and
has never been charged for any offence. He has no family
relationship with any Director or major shareholder of the
029
Dato’ Abdul Majid was appointed Director of Telekom Malaysia on
5 December 2000. He obtained his Masters in Business
Management from Asian Institute of Management, Manila and has
attended the Advanced Management Program at the Harvard
Business School, USA in 2000.
DATO’ DR. MOHD MUNIR BIN ABDUL MAJID
Senior Independent Non-Executive Director
Dato’ Dr. Mohd Munir was appointed to the Board on 22 May
2000. He graduated with a Bachelor of Science (Economics) and
Y.B. DATO’ JOSEPH SALANG GANDUM
Y.B. Dato’ Joseph Salang Gandum was first appointed to the
Board on 6 January, 1987. He graduated with a Bachelor of Arts
(Econs.) in 1974 from Western Maryland College, Maryland, USA
and a Masters degree in Business Administration from Iran
030
Center for Management Studies in 1975.
He formerly served as Regional Manager (East Malaysia) with
Bank Pembangunan Malaysia Berhad (East Malaysia), Trade
Manager of MISC Coastal Services Sdn. Bhd., Corporate Manager
and Manager of Location (Kuching) of Standard Chartered Bank
Malaysia Berhad. Y.B. Dato’ Joseph is now a businessman and
Member of Parliament for Julau Constituency, Sarawak. He is also
a Director of Tabak Holdings Berhad and Borneo Securities
Holdings Berhad.
He currently serves as a Non-Independent Non-Executive Member
of the Board Audit Committee and Board Tender Committee
TelCo. He is also a Board Member of a number of subsidiaries
and associate companies of Telekom Malaysia and has never been
charged for any offence. He has no family relationship with any
Director or major shareholder of the Company nor any conflict of
interest with the Company.
Note: Directors’ profiles were based on the Annual Report cut-off
date on 19 March 2004. Y.B. Dato’ Joseph Salang Gandum was
appointed as the Deputy Minister of the Foreign Ministry effective
from 30 March 2004. He tendered his resignation as a Director
of the Company and its Group on 1 April 2004.
a Ph.D. in International Relations from the London School of
Economics and Political Science (LSE), United Kingdom.
He was the First Executive Chairman of the Securities Commission
(SC), a position he held for two terms from March 1993 until
February 1999. Upon his return from abroad, where he worked at
the LSE and for Daiwa Europe N.V. in London, he served from
1979 – 1986 in various positions in the editorial department of
the New Straits Times Press Berhad (NSTP) ending up as Group
Editor (English) in NSTP. He was the Chief Executive of Commerce
International Merchant Bankers Berhad (CIMB) from 1986, and
was its Executive Chairman before resigning to become Executive
Chairman of the SC.
He has also served as Director and Chairman of several other
companies and council member of government agencies during
his career. Some of the prominent ones include the Association
of Merchant Banks, KLOFFE Sdn. Bhd., the Kuala Lumpur Stock
Exchange (now known as the Malaysia Securities Exchange
Berhad), the Council of Malaysian Industrial Development
Authority (MIDA) and the Foreign Investment Committee (FIC) of
the Prime Minister’s Department. He is the Chairman of Celcom
(Malaysia) Berhad (Celcom) and also a Director of Saujana
Resorts (Malaysia) Berhad and Technology Resources Industries
Berhad (TRI).
Dato’ Dr. Mohd Munir currently serves as the Independent
Non-Executive Chairman of the Board Audit Committee and a
Member of the Board Nominating and Remuneration Committee.
He is also a member of the Board Re-Listing of Celcom Committee
and a Board Member of a number of subsidiaries of Telekom
Malaysia. He has never been charged for any offence and has no
Y.B. DATO’ JOSEPH
SALANG GANDUM
Y.B. DATO’ Ir. HAJI MOHD ZIN BIN MOHAMED
Independent Non-Executive Director
As a professional, he owns a Consultancy firm in Civil and
Engineering works. He has served various government bodies and
is currently on the Board of Universiti Technologi Mara (UiTM)
and Universiti Telekom Sdn. Bhd. (Multimedia University). He is
also a Director of Kumpulan Hartanah Selangor Berhad, a
member of the Institution of Engineers, Malaysia and the Board
of Engineers, Malaysia.
He is also an experienced politician having been involved in
Malaysian politics for almost 21 years. Y.B. Dato’ Ir. Haji Mohd
Zin currently is a Member of Parliament for Shah Alam
constituency, Deputy Head of the UMNO Shah Alam Division,
Deputy Chairman of Selangor’s Council of Culture & Tourism, a
Board Member of FAMA, a Board Member of Yayasan Selangor, a
Counselor of the Municipal Council of Shah Alam, Selangor State
assemblyman and the President of Malaysian Parliament
Government Backbencher Club.
Y.B. Dato’ Ir. Haji Mohd Zin is a member of Board Tender
Committee TelCo and a Board Member of a number of subsidiaries
of Telekom Malaysia. He has never been charged for any offence
and has no family relationship with any Director or major
Company.
Y.B. DATO’ Ir. HAJI
MOHD ZIN BIN
MOHAMED
Note: Directors’ profiles were based on the Annual Report cut-off
date on 19 March 2004. Y.B. Dato’ Ir. Haji Mohd Zin bin Mohamed
was appointed a Member of Parliament for Sepang on 21 March
2004 and the Deputy Minister of the Works Ministry effective
from 30 March 2004. He tendered his resignation as a Director
of the Company and its Group on 1 April 2004.
031
DATO’ DR. MOHD MUNIR
BIN ABDUL MAJID
Y.B. Dato’ Ir. Haji Mohd Zin was appointed to the Board on
22 May 2000. He is a civil engineer by profession, having
obtained his Bachelor and Masters degrees from Bradley
University, USA.
DATO’ LIM KHENG GUAN
DATO’ LIM KHENG GUAN
Dato’ Lim Kheng Guan was appointed to the Board of Telekom
Malaysia on 23 June 2000.
He is a Chartered Accountant by profession and an Associate
Member of the Malaysian Institute of Accountants, Associate of
032
the Malaysian Institute of Certified Public Accountants, Fellow of
Australian Society of Certified Practicing Accountants, Associate
of the Australian Institute of Bankers and a Member of the
Malaysian Institute of Management. He has also attended
Advanced Management Programs at Manchester Business School,
INSEAD and London Business School.
Ir. PRABAHAR
N.K. SINGAM
He has more than 30 years of experience in accounting,
management consulting and senior managerial positions in local
and multinational public listed companies. Currently, he is the
Executive Director of Malaysian Management Consultants Sdn.
Bhd. and a Director of Celcom and TRI.
Dato’ Lim Kheng Guan currently serves as an Independent NonExecutive Chairman of the Board Commercial Dispute Resolution
Committee and a Member of the Nominating and Remuneration
Committee and Board Audit Committee of Telekom Malaysia. He
is also a Board Member of a number of subsidiaries and
associate companies of Telekom Malaysia. He has never been
charged for any offence and has no family relationship with any
ROSLI BIN MAN
ROSLI BIN MAN
Rosli bin Man was appointed to the Board on 15 July 2000. He
has more than 26 years of experience in the telecommunications
industry. Rosli holds a Bachelor in Science in Electrical and
Electronic Engineering (Electrical Design and Instrumentation)
from University of Glasgow, United Kingdom and a Diploma in
Electrical and Electronic Engineering (Communications) from
Technical College, Kuala Lumpur.
Ir. PRABAHAR N.K. SINGAM
He joined JTM in 1976 as Assistant Controller where he gained
wide exposure in telecommunication services including the task
to implement the country’s first mobile telecommunication service
Ir. Prabahar was appointed Director of Telekom Malaysia on
i.e. ATUR 450. In 1985, he made a career move to the private
23 June 2000. He is an engineer by profession and has a
sector by joining the Fleet group as its Group Manager, Technical
Bachelor of Science (Civil Engineering) degree from Portsmouth
Services where he was part of the team responsible in overseeing
Polytechnic, United Kingdom in 1985.
the roll-out and operations of the nation’s first privately operated
Berhad (TV3). From 1988 to 1996, he was instrumental in setting
Engineers, Malaysia and Environmental and Research Association,
up the first privately owned telecommunication company in
Malaysia (ENSEARCH). He is a professional engineer who has
Malaysia i.e. Celcom (M) Sdn. Bhd., catering for the cellular
wide experience in the civil engineering sector, especially in the
mobile telecommunication business. He left Celcom (M) Sdn. Bhd.
areas of consultancy, contracting, project management and
as its President in 1996 to join Prismanet Sdn. Bhd. as Managing
project financing.
Director and held the position until November 1998. In July 2000,
he joined Natrindo Telpon Sellular (NTS), the GSM 1800 cellular
Ir. Prabahar currently serves as an Independent Non-Executive
operator in East Java, Indonesia. As the Chief Operating Officer,
Member of the Board Audit Committee and Board Nominating and
he was responsible for the planning, development, successful
Remuneration Committee. He is also a Board Member of a
roll-out of the network and the day-to-day operations of the
number of subsidiaries and associate companies of Telekom
business. He was then appointed as Deputy Chief Operating
Malaysia and has never been charged for any offence. He has no
Officer of Lippo Telecom to oversee NTS planning, roll-out and
operation of NTS National Cellular Operation. He left NTS in
January 2002. Rosli is also a director of Celcom and TRI.
He currently serves as a member of the Board Commercial
Dispute Resolution Committee and a Board member of a number
of subsidiaries of Telekom Malaysia. He is a Non-Executive
Director nominated by the Company’s Substantial Shareholder,
Khazanah Nasional Berhad and has never been charged for any
offence. He has no family relationship with any Director or major
Company.
033
terrestrial television station namely Sistem Television Malaysia
A member of the Board of Engineers, Malaysia, the Institution of
TAN POH KEAT
TAN POH KEAT
Tan Poh Keat was appointed Director of Telekom Malaysia on
29 August 2000. He graduated with a Bachelor of Engineering
(Electrical) degree and Masters of Engineering Degree, both from
Auckland University, New Zealand under the Colombo Plan
Scholarship.
034
He joined JTM in 1962 as an engineer and has served in various
appointments, the last being Deputy Director General.
Subsequently, he joined Telekom Malaysia as Director, Networks
MOHAMMAD ZANUDIN
BIN AHMAD RASIDI
Service and retired at the end of 1991. Currently, he is an
independent consultant to a number of local and international
companies.
Tan Poh Keat is also a Director of VADS, Celcom, TRI and Measat
Global Berhad.
He currently serves as a Member of the Board Tender Committee
TelCo and a Board Member of a number of subsidiaries and
associate companies of Telekom Malaysia. He is a Non-Executive
DATO’ SURIAH BINTI
ABD RAHMAN
Director nominated by the Minister of Finance (Inc), the Special
Shareholder of Telekom Malaysia and has never been charged for
any offence. He has no family relationship with any Director or
major shareholder of the Company nor any conflict of interest
with the Company.
MOHAMMAD ZANUDIN BIN AHMAD RASIDI
Alternate Director to Dato’ Abdul Majid bin Haji Hussein
Mohammad Zanudin was appointed as Alternate Director to Dato’
Bachelor of Economics from Universiti Kebangsaan Malaysia and
a Master Degree in Public Management from Carnegie-Mellon
University, USA. He has also completed the Harvard International
Tax Program at the Harvard University in 1992.
He began his career with the Treasury in 1984 as Assistant
Secretary in the Economic and International Division. After four
years, he was assigned to the Tax Analysis Division where he was
directly involved in formulating policies and strategies for budget
proposals. He was then promoted to be Principal Assistant
Secretary in 1998. Subsequently, he was transferred to the Public
Enterprises, Privatisation and Minister of Finance Incorporated
Coordination Division as Principal Assistant Secretary in November
2000, a position he holds until today.
Mohammad Zanudin is also the Alternate Member/Director to
Dato’ Abdul Majid on the Board Employees’ Share Option Scheme
Committee, Board Tender Committee TelCo and Board Re-listing
of Celcom Committee where Dato’ Abdul Majid has been appointed
as a member. He has never been charged for any offence and has
no family relationship with any Director or major shareholder of
the Company nor any conflict of interest with the Company.
DATO’ SURIAH BINTI ABD RAHMAN
Alternate Director to Datuk Dr. Halim bin Shafie
Dato’ Suriah was appointed to the Board on 24 November 2000
as Alternate Director to Datuk Dr. Halim bin Shafie. She holds a
Bachelor of Arts (Hons.) from University of Malaya and a Master
of Arts from the University of Leeds, United Kingdom. She began
her career in the public service as an Assistant Secretary in
Treasury and rose to the position of Principal Assistant Secretary
in the Government Procurement Management Division.
She then served various Ministries and Government Agencies
including the Social Economic Research Unit, Prime Minister’s
Department, Ministry of Housing and Local Government,
Malaysian Institute of Maritime Affairs, Public Service Department
and Implementation Coordination Unit of the Prime Minister’s
Department before assuming her current position as Deputy
Secretary General 1, Ministry of Energy, Communications and
Multimedia on 1 November 2000.
Dato’ Suriah is the Alternate Member/Director to Datuk Dr. Halim
on the Board Employees’ Share Option Scheme Committee, Board
Tender Committee TelCo, Board Re-listing of Celcom Committee
and all the subsidiaries of Telekom Malaysia, where Datuk Dr.
Halim has been appointed as a member. She has never been
charged for any offence and has no family relationship with any
035
Abdul Majid bin Haji Hussein on 12 December 2000. He has a
GROUP
BUSINESS MANAGEMENT
from left to right:
DATO’ DR. ABDUL RAHIM BIN HAJI DAUD
DATO’ DR. IDRIS BIN IBRAHIM
JAFFA SANY BIN ARIFFIN
Chief Operating Officer, TM TelCo
Group Chief Financial Officer
(since July 2003)
DATO’ RAMLI BIN ABBAS
Chief Executive Officer, Celcom (Malaysia) Berhad
HAMZAH BIN YACOB
Chief Executive, Telekom Malaysia Berhad
DATO’ BAHARUM BIN SALLEH
DATO’ DR. IR. HAJI MOHD KHIR BIN HARUN
Chief Executive Officer, TM Net Sdn. Bhd.
Chief Group Business Restructuring & Coordination
CHRISTIAN DE FARIA
Chief Executive Officer, TM Facilities Sdn. Bhd.
MD FAUZI BIN SAID
Chief Executive Officer, TM International Sdn. Bhd.
(since February 2003)
Senior Vice President, Group Human Resource
Management, Telekom Malaysia Berhad
RANBIR SINGH NANRA
DATO’ ABDUL MALEK BIN MOHAMAD
ABDUL MAJID BIN ABDULLAH
Senior Vice President, Group Marketing
(since February 2003)
Project Director, TM Retail
Vice President, Corporate Strategy & Planning
HAJI HAMIS BIN HASAN
GAZALI BIN HARUN
DATO’ ADNAN BIN ROFIEE
Chief Financial Officer, TM TelCo
Senior Vice President, Major Business &
Government, Telekom Malaysia Berhad
Vice President, Corporate Finance
HAJI ROMLI BIN HUSSIN
HAJI MOHD YAHAYA BIN MOHD SHARIFF
Vice President, Customer Network Operations
Senior Vice President, Network Services
KAIRUL ANNUAR BIN MOHAMED ZAMZAM
General Manager, Corporate Affairs
expertise and perspectives to the leadership of a highly regulated
telecommunication business. Directors’ profiles, appearing on
pages 26 to 35 inclusive, illustrate an impressive spectrum
of experiences vital to the direction and management of a
telecommunication company.
038
“MANAGING WITH
INTEGRITY, TRANSPARENCY
AND ACCOUNTABILITY –
INTRINSIC COMPONENTS IN
THE PRESERVATION OF
SHAREHOLDER VALUE”
CORPORATE
GOVERNANCE
STATEMENT
During the year, fourteen (14) board Meetings were held and the
attendance of individual Directors is recorded in the Statement
accompanying the Notice of the Annual General Meeting.
Board Composition and Balance
The total of twelve (12) Directors of the Board consist of a NonExecutive Chairman, two (2) Executive Directors designated as the
Chief Executive and Deputy Chief Executive/Executive Director, five
(5) Non-Executive Directors and four (4) Independent NonExecutive Directors representing one third of the Board.
The roles of the Non-Executive Chairman and the Chief Executive
are separate with clear distinction of responsibilities between
them. Dato’ Dr. Mohd. Munir Abdul Majid is the Senior
Independent Non-Executive Director, called for in the Code and to
whom concerns pertaining to the Group may be conveyed by
shareholders and the public.
Annual Report 2003
The Company is committed to achieving high standards of
corporate governance and the effective application of the
principles and best practices as set out in the Malaysian Code on
Corporate Governance (the Code) throughout its Group. The
Board will continue to play an active role in improving
governance practices to ensure that the best interests of
shareholders and other stakeholders are served by transparent
disclosure policies.
The Board considers that the Company has fully complied with
Part I of the Code. This Statement, together with other
statements, such as the Statement on Internal Control, sets out
the manner in which the Company has applied the principles and
best practices of the Code.
BOARD OF DIRECTORS
An experienced Board consisting of Members with a wide range
of business, financial, technical and public service background
leads and controls the Group. This brings depth and diversity in
The Board’s principal focus is the overall strategic direction,
development and control of the Group. In support of this focus,
the Board approves the Group’s strategic plan and its annual
budget and throughout the year, reviews the performance of the
operating subsidiaries against their budgets and targets. The
Executive Directors are responsible for the implementation of
broad policies approved by the Board and they are obliged to
report and discuss at board meetings all material matters
currently or potentially affecting the Group and its performance,
including all strategic projects and regulatory developments. The
Chairman is responsible in ensuring the integrity and
effectiveness of the relationship between the Non-Executive and
Executive Directors.
The Non-Executive Directors provide considerable depth of
knowledge collectively gained from experiences in a variety of
public and private companies. The Independent Non-Executive
Directors are independent of management and free from any
business or other relationship, which could materially interfere
with the exercise of their independent judgement. They provide
unbiased and independent views in ensuring that the strategies
proposed by the management are fully deliberated and examined,
in the interest of shareholders, employees, customers, and the
many communities in which the Group conducts its business.
Board Appointment Process
The Company has in place formal and transparent procedures for
the appointment of new Directors. These procedures ensure that
all nominees to the Board, are first considered by the Nominating
and Remuneration Committee taking into account the required
mix of skills and experience and other qualities, before making a
recommendation to the Board.
Re-Election
In accordance with the Listing Requirements of the Malaysia
Securities Exchange Berhad (MSEB) and the Company’s Articles
of Association, all Directors are subject to re-election by rotation
once at least every three (3) years and a re-election of Directors
shall take place at each Annual General Meeting. Executive
Directors also rank for re-election by rotation.
The re-election of Directors ensures that shareholders have a
regular opportunity to reassess the composition of the Board.
Particulars of Directors submitted to shareholders for re-election
are disclosed in the Statement accompanying the Notice of
Annual General Meeting (AGM) with references to other sections
of this Annual Report.
Directors’ Training
The Board acknowledged the importance of continuous education
and training to enable effective discharge of their responsibilities.
All the Directors have successfully completed the Mandatory
Accreditation Programme. During the year, the Directors have also
attended various seminars and international conventions to gain
insight into the state of the economy as well as latest regulatory
and technological developments in relation to the Group’s
business. Following the introduction of the mandatory Continuing
Education Programme (CEP) by MSEB in July 2003, the Directors
have also actively pursued relevant courses and seminars
recognised under the CEP.
Directors’ Remuneration
The Nominating and Remuneration Committee has recommended
to the Board a framework for the remuneration of the Executive
and Non-Executive Directors.
The Executive Directors’ remuneration comprises a salary,
allowances, bonuses and other customary benefits as appropriate.
Salary reviews take into account market rates and the
performance of the individual and the Group. Remuneration of
Non-Executive Directors is based on a standard fixed fee.
Additional allowances are also paid in accordance with the
number of meetings attended during the year.
039
Independence and Conflict of interest
The Independence of the Non-Executive Directors is under
constant review against best practices and regulatory provisions.
The Directors have a continuing responsibility to determine
whether they have a potential or actual conflict of interest in
relation to any matter, which comes before the Board. The
Company and Group has adopted a process whereby each
Director is required to make written declarations whether they
have any interest in transactions tabled at every board meeting of
the Group.
Details of the remuneration of each Director of the Company, categorised into appropriate components for the financial period ended
31 December 2003, are as follows:
040
NAME OF DIRECTORS
FEES &
SALARY ALLOWANCES
(RM)
(RM)
EX-GRATIA
(RM)
BENEFIT
IN KIND
(RM)
TOTAL
(RM)
Executive
264,000
76,125
96,000*
93,023
529,148
264,000
47,010
60,000*
10,649
381,659
Non-Executive
Tan Sri Dato’ Ir. Muhammad Radzi bin Hj Mansor
—
154,320
—
9,100
163,420
—
38,900
—
1,500
40,400
—
37,200
—
1,500
38,700
—
146,188
—
48,125
194,313
—
108,858
—
48,125
156,983
—
210,700
—
138,330
349,030
—
60,280
—
1,500
61,780
—
110,170
—
38,150
148,320
Rosli bin Man
—
113,500
—
4,672
118,172
Tan Poh Keat
—
108,325
—
3,690
112,015
Alternate Directors
(Alternate to Dato’ Abdul Majid bin Haji Hussein)
—
4,200
—
1,500
5,700
(Alternate to Datuk Dr. Halim bin Shafie)
—
4,700
—
1,500
6,200
528,000
1,220,476
156,000
401,364
2,305,840
TOTAL
Note: * – Ex-Gratia provided for 2002 paid in 2003
Access to Information
The Board and its Committees are supplied with an agenda and relevant up-to-date information for review in good time prior to each
meeting to enable them to make informed decisions. The process of Board papers approval, compilation and dissemination is expedited
via an efficient and secure electronic Board Document Management System to facilitate an informed decision-making process within the
Group.
The Board has full and timely access to all relevant information to discharge its duties effectively. All Directors have access to the advice
and services of the company secretary. The Board is constantly advised and updated on statutory and regulatory requirements pertaining
to their duties and responsibilities. Procedures are in place for Directors and board committees to seek independent professional advice in
the course of fulfilling their responsibilities, at the Company’s expense.
BOARD COMMITTEES
for directorship in its Group of companies as proposed by
The Board delegates certain responsibilities to Board Committees,
the Chief Executive;
namely, the Audit Committee, Nominating and Remuneration
•
Examine the size of the Board with a view to determine the
Committee, Tender Committee TelCo, Employee Share Option
number of Directors on the Board in relation to its
Scheme (ESOS) Committee, Re-Listing of Celcom Committee
effectiveness and review its required mix of skills and
(RLCC) and the Commercial Dispute Resolution Committee
experience and other qualities;
(CDRC). All committees have written terms of reference and
•
Recommend suitable orientation, educational and training
operating procedures and the Board receives reports of their
programmes to continuously train and equip existing and new
proceedings and deliberations. The Chairmen of the various
Directors;
committees report the outcome of the committee meetings to the
Board and relevant decisions are incorporated in the minutes of
•
Set, review, recommend and advise the policy framework on
all elements of the remuneration such as reward structure,
the full Board meeting.
fringe benefits and other terms of employment of the
Executive Directors having regard to the overall Group policy
guidelines and framework;
Audit Committee
A full Audit Committee report enumerating its membership, its
•
Advise the Board on the performance of the Executive
role and its activities during the year is set out on pages 48 to
Directors and an assessment of their entitlement to
51 inclusive.
performance related pay and advise the Executive Directors
on the remuneration terms and conditions of senior
management;
•
Establish and recommend a formal and transparent procedure
Membership:
for developing a policy on the remuneration of the Non-
Tan Sri Dato’ Ir. Muhammad Radzi bin Haji Mansor (Chairman –
Executive Chairman, Non-Executive Directors and Board
Non-Executive)
Committees, which recommendation shall be decided by the
Dato’ Dr. Mohd. Munir bin Abdul Majid (Independent Non-Executive)
Board of Directors as a whole.
Ir. Prabahar N.K. Singam (Independent Non-Executive)
The Nominating and Remuneration Committee has the authority
Dato’ Lim Kheng Guan (Independent Non-Executive)
to examine a particular issue and report back to the Board with
recommendations. The determination of remuneration packages
Objectives:
of Directors is a matter for the Board as a whole and individuals
The main objectives of the Nominating and Remuneration
are required to abstain from discussion on their own remuneration.
Committee are:-
The Committee met seven (7) times during the year.
•
to ensure that the Directors of the Board bring characteristics
to the Board, which provide a required mix of responsibilities,
skills and experience.
•
to set the policy framework and to make recommendations to
Tender Committee TelCo
Membership:
the Board on all elements of the remuneration, terms of
Dato’ Abdul Majid bin Haji Hussein (Chairman – Non-Executive)
employment, reward structure and fringe benefits for
Executive Directors and other top selected management
Dato’ Dr. Abdul Rahim bin Haji Daud (Deputy Chief Executive/
positions with the aim to attract, retain and motivate
Executive Director)
individuals of the highest quality.
Datuk Dr. Halim bin Shafie (Non-Executive)
Principal Duties and Responsibilities:
Y.B. Dato’ Joseph Salang Gandum (Non-Executive)
•
Recommend to the Board, candidates for directorship on the
Y.B. Dato’ Ir. Mohd. Zin bin Mohamed (Independent Non-Executive)
Board of the Company and its Group as well as membership
Tan Poh Keat (Non-Executive)
of all other Board Committees. In making its recommendations,
the Committee considers candidates from the Management
Mohammad Zanudin bin Ahmad Rasidi (Alternate to Dato’ Abdul
Majid bin Haji Hussein)
Dato’ Suriah binti Abd Rahman (Alternate to Datuk Dr. Halim bin
Shafie)
041
Nominating and Remuneration Committee
The principal duties and responsibilities of the Tender Committee
In addition to quarterly financial reports, the Company
TelCo are to ensure that the procurement process complies with
communicates with shareholders and investors through its annual
the relevant policies and requirements and to consider, evaluate
report, with comprehensive and sufficient details about financial
and approve or recommend awards which are beneficial to the
results and activities of the Group. The annual report published in
Company taking into consideration various factors such as price,
English language, is despatched to shareholders who are also
usage of product and services, its quantity, duration of service
given the option to receive the annual reports in Bahasa Malaysia
and other relevant factors. The Committee met seven (7) times
(the national language) upon request. Established procedures are
during the year.
in place to ensure the timely public release of share price
sensitive information.
ESOS Committee
The AGM provides an open forum at which shareholders and
Membership:
investors are informed of current developments and where ample
Tan Sri Dato’ Ir. Muhammad Radzi bin Haji Mansor (Chairman –
time is allowed for questions to be raised to Board members and
Non-Executive)
Committees’ Chairmen. The Company supports the Code’s
Articles of Association allow a member entitled to attend and vote
Dato’ Dr. Abdul Rahim bin Haji Daud (Deputy Chief Executive/
to appoint a proxy to attend and vote instead of the member and
Executive Director)
also provide that a proxy need not be a member of the Company.
Dato’ Abdul Majid bin Haji Hussein (Non-Executive)
A press conference is held immediately after the AGM where the
Datuk Dr. Halim bin Shafie (Non-Executive)
Chairman, Executive Directors and Chief Financial Officer are
Mohammad Zanudin bin Ahmad Rasidi (Alternate to Dato’ Abdul
042
principle to encourage shareholder participation. The Company’s
present to clarify and explain issues raised by the media.
Majid bin Haji Hussein)
To ensure easy and convenient access to the Group’s financial
Dato’ Suriah binti Abd Rahman (Alternate to Datuk Dr. Halim bin
bin Shafie)
information by shareholders and investors, press releases, annual
reports and other corporate information, a website is maintained
at www.telekom.com.my. The MSEB also provides for the
The principal duties and responsibilities of the ESOS Committee
are to construe and interpret the Employee Share Option Scheme
(ESOS) and options granted under it, to define the terms therein
Company to electronically publish all its announcements including
its quarterly results and Annual Report through MSEB internet
website at www.announcements.klse.com.my.
and to recommend to the Board to establish, amend and resolve
rules and regulations relating to the scheme and its
administration. The Committee only meets as and when required.
INVESTOR RELATIONS
In line with good corporate governance practices, the Company’s
Investor Relations (IR) unit proactively and actively disseminates
Ad-Hoc Committee
Apart from the above, specific and ad-hoc Board Committees,
such as the RLCC and CDRC have been established during the
relevant information about the Group to the investment
community, specifically the institutional fund managers and
analysts.
year on need basis to deliberate and expedite decision-making
processes on specific aspects of the business and corporate
exercises.
Telekom Malaysia is one of the most actively covered companies
in the Kuala Lumpur Stock Exchange Composite Index with regular
tracking by more than 18 research brokers, 3 rating agencies and
RELATIONSHIP AND
COMMUNICATION WITH
SHAREHOLDERS/INVESTORS
The Company is committed to regular and proactive
communication with investors and shareholders. Formal channels
of communication are used to give an account to shareholders on
the performance of the Group.
over 200 domestic and foreign institutional investors, both in the
equity and debt markets. The IR unit maintains very close contact
with them, to ensure that the Group’s strategies, operational
activities and financial performance are well understood and that
such information is made available to them in a timely manner.
Regular contacts to provide accurate and timely information are
consider that in presenting these financial statements, the Group
established through road shows, company visits, and one on one
has used appropriate accounting policies, consistently applied and
meetings, teleconferences and e-mails. Telekom Malaysia
supported by reasonable and prudent judgements and estimates.
participated actively in more than 10 local and overseas investor
conferences in New York, London, Hong Kong and Singapore, in
The Directors have a general responsibility for ensuring that the
the year 2003 including the MSEB Investor Week 2003.
Company and the Group keep accounting records and financial
statements, which disclose with reasonable accuracy the financial
Telekom Malaysia is one of the few corporations in Malaysia that
position of the Company and the Group. Due care and reasonable
conducts teleconferences every quarter to brief analysts on its
steps are taken by the Directors to ensure that such financial
quarterly results. At these sessions, analysts are not only given a
statements comply with the Companies Act, 1965, approved
comprehensive review of the Group’s financial performance but
accounting standards in Malaysia and other regulatory provisions.
are also given the opportunity to clarify whatever queries they
may have in question and answer sessions. The content of these
briefings is posted on the Company’s website.
Internal controls
The Board acknowledges its overall responsibility for maintaining
The senior management of the Group, the Chief Executive, Deputy
a sound system of internal controls to safeguard shareholders’
Chief Executive/Executive Director, Chief Financial Officer, Vice
investment and Group’s assets. The Statement on Internal Control
Presidents and Heads of the operating companies are actively
is set out on pages 52 to 53 of the annual report providing an
involved in IR activities, meeting fund managers and analysts
overview of the state of internal controls within the Group.
Information that is disseminated to the investment community
Relationship with Auditors
conforms to MSEB disclosure rules and regulations. Care has
An appropriate relationship is maintained with the Company’s
been taken to ensure that no market sensitive information such
Auditors through the Audit Committee. The Audit Committee has
as corporate proposals, financial results and other material
been explicitly accorded the power to communicate directly with
information is disseminated to any party without first making an
both the external Auditors and internal Auditors.
official announcement to the MSEB.
The role of the Audit Committee in relation to the Auditors is set
out in the Terms of Reference on page 51.
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board aims to provide and present a balanced and
Audit Committee
meaningful assessment of the Group’s financial performance and
The Audit Committee also conducts review of the Internal Audit
prospects at the end of each financial year, primarily through
Function in terms of its authority, resources and scope as defined
annual financial statements, quarterly and half yearly
in the Internal Audit Charter. Furthermore, it ensures the
announcement of results to shareholders as well as the
independence of the internal auditors and unrestricted access to
Chairman’s Statement and review of operations in the annual
information and people in the Group. Highlights of activities
report. The Board is assisted by the Audit Committee to oversee
conducted by the Committee are detailed in the Audit Committee
the Group’s financial reporting processes and the quality of its
Report on pages 49 and 50.
financial reporting.
Signed on behalf of the Board of Directors pursuant to a
Directors’ Responsibility Statement
resolution dated 26 February 2004.
The Directors are required by the Companies Act, 1965 to ensure
that financial statements prepared for each financial year give a
true and fair view of the state of affairs of the Company and the
Group as at the end of the financial year and of the results and
cash flow of the Group for the financial year. The Directors
Chairman
043
regularly.
Risk Management
Telekom Malaysia recognises the importance of sound internal controls and
risk management practices to good corporate governance. It is for this
reason that it continues to embed risk-based systems of internal controls
to provide reasonable assurance of achieving the Group’s business
objectives while at the same time safeguarding and enhancing shareholder
investment and the company’s assets.
The Group has put in place a Risk and Internal Control Policy and an Enterprise Risk Management (ERM) Framework. The Board is
following through the process of identifying, evaluating and managing significant risks that affect the achievement of business objectives
044
using the approved ERM process and the Risk Control & Reporting platform, as illustrated below:
Enterprise Risk Management Process
1. Establish Context
2. Define Objectives
3. Identify Risks
Monitor
and
review
6. Response
to Risk
4. Analyse
Risks
5. Assess
Risks
Risk Control & Reporting Platform
Policies &
Guidelines
Management
Committees
Risk Reporting &
Monitoring Tools
External Auditors
RISK IDENTIFICATION AND
EVALUATION
RISK MANAGEMENT REFERENCE KIT
During the year under review, the Risk Management Unit, with the
Reference booklet has been produced to assist all employees
assistance of Group Internal Audit, conducted 20 Enterprise Risk
understand and practise the standard risk management process,
Management Workshops with key business units and subsidiaries
methodology and language adopted by the Group.
As a reference document, an Enterprise Risk Management
including Group Finance, TelCo Network Operations, Group
Marketing, TM Facilities, TM Net, Multimedia University Telekom,
MTN Networks Sri Lanka and the TelCo Information Technology
CONCLUSION
Division.
Given that the Group would need to adapt to the ever-changing
business environment in the shortest possible time in order to
From these workshops, a total of 750 key risks were identified,
uphold its business objectives, risk management has become an
evaluated and reasonable assurance plans to further manage
essential tool to ensure risks and rewards are duly balanced. The
these risks were secured from designated “risk owners”. Further
challenge ahead, is to ensure everybody in the Group understands
risk review sessions will be conducted with the risk owner at six-
the risk and internal control policy and objectives and to embed
month intervals to track the implementation of the assurance plan
the ERM process in all their decision-making processes.
and update the risk profile register. The Board of Directors is kept
updated on the progress of risk management activities through
The following plans to further enhance risk management practices
the Audit Committee.
in the Group has been drawn up for year 2004:
•
•
inventory of risk profiles to be automated. Hence, the Group has
To conduct a risk profile review for those risks identified in
2003
Considering the size of the Group, it is more efficient for the
•
invested in an inventory system using Risk Information
To encourage further participation of senior management in
the Group Risk Management Committee
Management System (RiMS) software that allows risk owners to
capture their risks, tabulate action plans, track the implementation
of the assurance plans and constantly review and update their
risk profiles at their own work stations. The Risk Management
Unit remains the key controller of the risk profiles inventory.
RISK FACILITATORS TRAINING
To streamline the methodology of all risk management
workshops, risk facilitators are being trained by professional
consultants. The first training session, conducted in May 2003
was attended by 20 key risk facilitators from the Risk
Management Unit, Internal Audit and other key business units.
•
To establish an ERM communication channel to increase
awareness among all staff.
045
RISK REPORTING AND
MONITORING TOOLS
To intensify risk identification and evaluation programmes
through second-phase ERM workshops
The following information is provided in compliance with the Listing Requirements of Malaysia Securities Exchange Berhad (MSEB) for
financial year ended 31 December 2003:
1. SHARE BUYBACKS
The Company did not enter into any share buyback transactions during the financial year.
2. AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY RECEIPT
(GDR) PROGRAMME
The Company did not sponsor any ADR or GDR programme during the financial year.
3. IMPOSITION OF SANCTIONS/PENALTIES
046
There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the
relevant regulatory bodies during the financial year, save for a public reprimand on Technology Resources Industries Berhad (TRI),
a subsidiary company of Celcom (Malaysia) Berhad by the MSEB and Securities Commission (SC) on 9 August 2003. The public
reprimand was in respect of breaches of regulatory guidelines by TRI prior to TRI becoming a subsidiary of Telekom Malaysia. The
public reprimand can be accessed from MSEB’s website at www.klse.com.my.
ADDITIONAL
COMPLIANCE INFORMATION
Annual Report 2003
4. NON-AUDIT FEES
The amount of non-audit fees paid and payable to the external auditors and their affiliated companies by the Group for the financial
year ended 31 December 2003 is as follows:
RM
a)
PricewaterhouseCoopers, Malaysia
725,000
b)
PricewaterhouseCoopers Taxation Services Sdn. Bhd.
537,000
c)
Overseas Firm affiliated to PricewaterhouseCoopers, Malaysia
1,244,500
Total
2,506,500
5. UTILISATION OF PROCEEDS FROM ISSUANCE OF BONDS
The Company, via Tekad Mercu Sdn. Bhd., a special purpose entity of the Company issued RM2,000.0 million nominal value 10-year
redeemable unsecured bonds due 2013 and RM1,000.0 million nominal value 15-year redeemable unsecured bonds due 2018. The
proceeds from this exercise were used to repay the bridging loans undertaken by the Company to fund the Mandatory General Offer
(MGO) of Celcom, details are as described in note 2 to the financial statements.
6. VARIATION IN RESULTS
There was no profit estimation, forecast or projection made or released by the Company during the financial year under review.
7. PROFIT GUARANTEE
There was no profit guarantees given by the Company during the financial year under review.
8. MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’
INTERESTS
There were no material contracts entered into by the Company and/or its subsidiaries involving Directors and major shareholders’
interests either subsisting as at 31 December 2003 or entered into since the end of the previous financial year ended 31 December
2002 except for a related party transaction disclosed in note 33 to the financial statements on page 221 of this Annual Report.
9. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR
TRADING NATURE (RRPT)
The Company had at its Extraordinary General Meeting (EGM) held on 21 May 2002 obtained a general mandate from its shareholders
to allow the Company and/or its subsidiaries, in their normal course of business to enter into RRPT with related parties which are
necessary for its day-to-day operations, on terms not more favourable to the related parties than those generally available to the
Paragraph 4.1 of Practice Note No. 14/2002 (PN14) issued by the MSEB on 28 November 2002 set out eight (8) new categories of
transactions which are not regarded as related party transactions which include, inter-alia, transactions between a listed Issuer and/or
its subsidiaries and another person:
•
which involves the purchase of goods based on non-negotiable fixed price or rate which is published or publicly quoted and
where the prices are applied consistently to all customers or classes of customers; and
•
where there are no other interested relationships except for common directorships where the directors who have common
directorship have:
–
no shareholdings in the other person;
–
shareholding of less than 5% in the listed issuer; and
–
has no other interest such as commission or other kind of benefits received from the listed issuer or any of its subsidiaries
or the other person in relation to the said transaction.
In view of the above, the following transactions, which were included in the RRPT Mandate granted by the shareholders at the EGM
held on 21 May 2002 would no longer be regarded as RRPT with related parties pursuant to Paragraph 4.1 (a) and 4.1 (h) of PN14
which took effect on 1 January 2003:
a)
The provision of engineering and information technology services by Meganet Communications Sdn. Bhd. to Telekom Malaysia;
and
b)
The provision of network integrated planning and provisioning system by Telekom Applied Business Sdn. Bhd. to Telekom
Malaysia.
047
public and are not to the detriment of the minority shareholders (RRPT Mandate).
01
048
02
03
AUDIT
COMMITTEE REPORT
Annual Report 2003
04
05
01. Dato’ Dr. Mohd Munir bin Abdul Majid
(Chairman)
02. Dato’ Abdul Majid bin Haji Hussein
03. Y.B. Dato’ Joseph Salang Gandum
04. Dato’ Lim Kheng Guan
05. Ir. Prabahar N.K. Singam
06
06. Hashim bin Mohammed
Group Chief Auditor/Secretary to Audit Committee
1. MEMBERSHIP
The Audit Committee comprises three Independent NonExecutive Directors and two Non-Independent Non-Executive
Directors of the Board as follows:
(Chairman)
3. SUMMARY OF ACTIVITIES IN THIS
FINANCIAL YEAR
The Audit Committee carried out its duties as set out in the
terms of reference as in page 51.
Apart from its duties as set out in its terms of reference,
the Audit Committee also reviewed and deliberated on
reports and updates as provided by:
a)
The Task Force for Best Practices (TFBP) which was
established by the Audit Committee in year 2001
•
mainly to support them on the following:
New updates and developments of best business
practices and exposure drafts, principally on
Corporate Governance, statutory and regulatory
Hashim bin Mohammed
Group Chief Auditor/Secretary to Audit Committee
and other business guidelines. The Task Force
requirements, compliance to accounting standards
consistently submitted their reports at every Audit
Committee Meetings.
•
The planning, implementation and progress report
of enterprise-wide risk management programme
that were identified and implemented at various
major divisions and subsidiaries of the Group to
institute risk management, control and governance
practices by management to achieve business
excellence and support overall group objectives.
•
Receive and review reports on the adequacy,
effectiveness and reliability of the system of
internal controls based on control self assessment
2. MEETINGS
performed annually by the Chief Executive Officer,
The Committee had four (4) meetings in the financial year
2003. Dato’ Dr. Mohd Munir bin Abdul Majid, Dato’ Lim
Kheng Guan and Ir. Prabahar N.K. Singam attended all four
(4) meetings, whilst Dato’ Abdul Majid bin Haji Hussein and
Y.B. Dato’ Joseph Salang Gandum attended three (3) out of
the four (4) meetings.
CEO/Chief Operating Officer, COO of the Operating
Companies/Subsidiaries through the Annual
Internal Control Assurance Letter and Internal
Control Incidents submitted to the Group Chief
Auditor and Chief Executive.
•
The Group’s Deputy Chief Executive attended three (3)
meetings, the Group Chief Financial Officer (CFO) and Acting
Group CFO attended two (2) meetings each respectively
whilst the General Manager, Group Finance representing
management attended all of the four (4) meetings upon
invitation by the Chairman of the Committee during the course
of those meetings. The Group Internal Auditors attended
all these meetings whilst the External Auditor,
PricewaterhouseCoopers (PwC) attended the meetings upon
invitation by the Chairman of the Committee. Prior to the
meetings, the Group Chief Auditor and PwC auditors met
with the Chairman of the Audit Committee in private without
the executive director’s presence.
Receive and review reports on the status of
financial controls based on self assessment
conducted quarterly by the CEO/CFO of the
Operating Companies/Subsidiaries through the
Financial Controls Compliance and Assurance
Letter submitted to the Group CFO.
•
Review and recommend the Risk and Internal
Control Policy for the Audit Committee’s approval.
•
Review and deliberate on new policy updates,
revisions or enhancements of the Business Process
Manual (BPM) and Subsidiary Policy (SP) as
recommended by management to ascertain that the
improvements made are aligned with business best
practices and effective internal control processes.
049
Members of the Audit Committee shall not have a relationship
which in the opinion of the Board of Directors, would
interfere with the exercise of independent judgement in
carrying out the functions of the Audit Committee. Members
of the Audit Committee shall possess wisdom, sound
judgement, objectivity, independent attitude, management
experience and knowledge of the industry. Dato’ Lim Kheng
Guan who is an independent non-executive director is a
member of the Malaysian Institute of Accountants (MIA).
•
Monitoring and coordinating reviews on the
effectiveness of the Group’s system of internal
controls, through reports furnished by the Group
Internal Auditor, the External Auditor and the
4. INTERNAL AUDIT FUNCTION
The Group has a well established Group Internal Audit
division which reports to the Audit Committee on its
activities based on the approved annual Internal Audit Plan.
Management.
•
The implementation of the Enhanced Telecom
The risk-based internal audit plan is developed to cover key
Operation Maps (ETOM) as the telecommunication
financial, operational and compliance matters that are
industry business framework and best practices to
significant to the overall performance of the Group. The
be used for reference by management and the
audit activities include:
internal auditor to benchmark against the industry
•
Governance and Management Control review
•
Business Process Review including reviews of strategic
standard.
b)
The Management Audit Action Committee which was
•
Information Technology and System Review
•
Financial Audit
•
Human Resource Management
controls and accounting issues as highlighted by
•
Marketing Audit
the Internal and External auditors.
•
Technical and Network Audit
Any other recommendations made by the Audit
•
Enterprise Risk Management (ERM) Programme
Committee for management actions.
•
Control Self Assessment (CSA) Programme
•
Review on Legal requirements and Compliance
•
Special review as requested either by Board of
established by the Audit Committee in year 2002 to
update the Audit Committee on progress of:
•
050
•
c)
plan
Management actions to resolve significant internal
The Internal Control Incident (ICI) Committee which
was established in year 2003 to deliberate alleged
major control incidents or failures based on reports
submitted from management or special investigation/
audits conducted and to propose next line of actions.
The reports are summarised by the Group Chief
Auditor and updated to the Audit Committee at least
on a quarterly basis describing the following:
•
•
•
Directors, Board Audit Committee or Management
•
Consultancy services such as training of finance managers
on financial controls and drafting of code of ethics
The Audit Committee receives regular and timely reports
from the Group Chief Auditor on audit work and activities.
The Internal Audit reports are submitted to the Audit
the nature and root causes of control failures
Committee based on the quarterly audit plan as well as
which have financial impact and affecting the
additional reports based on special requests by Management.
image and reputation of the Group.
In 2003, Group Internal Audit undertook 213 audit
lateral learning to prevent recurrence of similar
assignments covering locations at Corporate Headquarters,
incidents within the Group.
local and overseas operating subsidiaries and strategic
status of actions taken by management to remedy
business units. It also coordinated the follow-up review on
the control weaknesses and appropriate disciplinary
the resolutions of both internal and external audit and
actions.
control issues.
The Audit Committee reviews and approves the Group
Internal Audit’s annual budget and human resource
requirement to ensure that the function is adequately
resourced with competent and proficient internal auditors.
As at 31 December 2003, the Group Internal Audit has 40
auditors with a various mix of expertise and experience.
iv.
Review the scope of internal and external auditors'
assessments of internal controls over financial
reporting and obtain reports on significant findings
and recommendations, together with management’s
responses;
The Committee and the Chairman shall be appointed by the
Board of Directors or The Nominating and Remuneration
Committee and shall consist of at least three (3) NonExecutive Directors, the majority of whom are independent.
All members of the Audit Committee, including the
Chairman, will hold office only so long as they serve as
Directors of the Company.
v.
Consider the appointment of a suitable accounting
firm to act as external auditor and amongst the
factors to be considered for the appointment are the
adequacy of the experience and resources of the firm
and the persons assigned to the audit, to consider any
question of resignation or dismissal and to
recommend the audit fee payable thereof;
The composition of the committee shall meet the
independence and experience requirements of the Malaysia
Securities Exchange Berhad (MSEB) Listing Requirements
and other rules and regulations of the Securities
Commission. The Board of Directors must review the terms
of office and performance of the Audit Committee and each
of its members at least once every three (3) years to
determine whether the Audit Committee has carried out
their duties in accordance with its terms of reference.
vi.
Discuss with the external auditor before the audit
commences, the nature, approach and scope of the
audit and ensure co-ordination where more than one
audit firm will be involved;
vii.
Review the quarterly interim financial results, half-year
and annual financial statements of the Board;
1. COMPOSITION OF THE AUDIT COMMITTEE
2. MEETINGS
The Committee shall meet not less than four (4) times a
year and reports to the Board of Directors. The quorum of
the Committee meetings, shall consist of at least two thirds
of the members, with Independent Non-Executive Directors
forming the majority. All committee members are expected
to attend each meeting in person. Meeting agendas and
briefing materials will be prepared and provided in advance
to members. Minutes will be prepared.
viii. Review with the external auditors the financial
statements for the purpose of approval before the
audited financial statements are presented to the
Board for adoption;
ix.
Discuss problems and reservations arising from the
interim and final audits and any matter the auditor
may wish to discuss in the absence of the
management where necessary;
x.
Review the integrity and adequacy of the Group’s
internal control systems and management information
systems, including systems for compliance with
applicable laws, rules, directives and guidelines;
xi.
Review the follow-up actions by management on the
weaknesses of internal accounting procedures and
controls as highlighted by the external and internal
auditors;
xii.
Review the assistance and co-operation given by the
Company and its officers to the external and internal
auditors;
3. AUTHORITY
The Audit Committee has unrestricted access to information,
records, properties and personnel of the Group. It also has
direct communication channels with the external and
internal auditors. The Committee is also authorised by the
Board to obtain external independent professional advice as
necessary.
4. DUTIES AND RESPONSIBILITIES
The following are the main duties and responsibilities of the
Committee collectively:
i.
To approve the Internal Audit Charter, which defines
the independent purpose, authority, scope and
responsibility of the internal audit function in the
Company and Group;
xiii. Propose best practices on disclosure in financial
results and annual reports of the Company in line with
the principles set out in the Malaysian Code of
Corporate Governance, Malaysia Accounting Standards
Board (MASB) and other applicable laws, rules,
directives and guidelines;
xiv.
Propose, monitor and ensure an adequate system of
risk management for management to safeguard the
Group’s assets and business sustainability;
Consider, review and disclose when required any
significant transactions which are not within the normal
course of business and any related party transactions
(RPT) that may arise within the Company and the Group;
ii.
Review the Internal Audit Plans and results of the
internal audit process; to ensure appropriate actions
are taken on the recommendations made by the
Internal Audit function;
xv.
iii.
Review and appraise the performance and
remuneration of the Group Chief Auditor and be
consulted on his appointment and removal;
xvi. Advise the Board of Directors with respect to the
Company’s policies and procedures regarding
compliance with applicable laws and regulations with
the Company code of business ethics; and
xvii. Consider other topics as defined by the Board.
051
TERMS OF REFERENCE OF
THE AUDIT COMMITTEE
systems for compliance with applicable laws, rules, directives,
guidelines, and risk management. The Board is informed of all
major control issues encompassing internal controls, regulatory
compliance and risk taking. The system of internal controls
includes governance, management controls, financial controls,
operational efficiency and effectiveness, compliance monitoring,
information technology systems, process improvement, selfassessment and risk management. This system of internal
controls can only provide reasonable but not absolute assurance
against material misstatement or loss.
RISK MANAGEMENT
The Risk and Internal Control Policy and Enterprise Risk
Management Framework are in place. The Board is following
through the process for identifying, evaluating and managing
significant risks that affect the achievement of the Group’s
business objectives. During the year under review, management
052
with assistance of Group Internal Audit had conducted 20
STATEMENT ON
INTERNAL CONTROL
Annual Report 2003
Enterprise Risk Management Workshops with key business units
and subsidiaries of the Group, which includes Group Finance,
TM TelCo Network Operations, Group Marketing, TM Facilities,
TM Net, Multimedia University, MTN Networks Sri Lanka and the
TM TelCo Information Technology Division. An Enterprise Risk
Management Reference booklet has been produced to assist all
employees to understand and practice the standard risk
management process, methodology and language adopted by
the Group.
INTRODUCTION
As stated in the Malaysian Code on Corporate Governance, the
Board of Directors should maintain a sound system of internal
controls including the review of its effectiveness, to safeguard
shareholders’ investment and Group’s assets. Set out below is the
Board Statement on Internal Control in compliance with the
MSEB’s Listing Requirements and the Statement on Internal
Control: Guidance for Directors of Public Listed Companies. The
Board continues with its commitment to ensure the smooth
implementation of an integrated risk management framework and
programme throughout the Group.
CONTROL SELF-ASSESSMENT
The Board places importance on the implementation of the
Control Self-Assessment (CSA) process as a paradigm shift
towards management self-assessment as compared to
compliance based auditing. The Group internal auditor’s role is
more like a business process facilitator, since CSA is a process
where business units at operational levels are required to identify
risks that prevent the achievement of their business objectives.
Management has been very receptive of CSA and feedback
indicates that CSA has made an impact with management
awareness and understanding of risks and linkages to the
RESPONSIBILITY
The Board strives to maintain a sound system of internal controls
and effective risk management practices to ensure long-term
sustainability of the Group. The Board reaffirms its responsibility
to review the integrity and effectiveness of the Group’s system of
internal control and management information systems, including
business objectives. Throughout 2003, a total of 42 CSAs were
performed involving more than 1,000 employees in various
operating units within the Group.
OTHER KEY ELEMENTS OF INTERNAL
CONTROL SYSTEMS
9.
issues to ensure completion through the Management
Audit Action Committee to ensure actions are taken by
The other key elements of the Group’s internal control systems
management to resolve the issues effectively.
are as follows:
1.
Board reviewed and approved Business Plans within which
Regular monitoring of external and internal audit control
10.
A Special Affairs Unit has been set up to review and
the business objectives, strategies, key performance
monitor the ethical conducts and practices of all employees
indicators and targets are clearly stated. These business
including the senior management and Board. Investigations
plans are cascaded throughout the organisation to ensure
reports are tabled to a newly set up Internal Control
effective execution and follow through.
Incident Committee and updates are reported to the Audit
Committee and the Board.
2.
Clear segregation of roles and responsibilities to committees
of the Board, Management at the Corporate Centre and
11.
Implementation and internalisation of the three corporate
subsidiaries, including financial authority limits set in the
core values (KRISTAL), Total Commitment to Customers,
Business Process Manual as well as the Subsidiary Policy
Uncompromising Integrity, Respect and Care. These
and Guidelines.
corporate values form the set of guiding principles for the
new Group culture.
Structured review of all proposals for material capital and
investment acquisitions by the business segments within
The statement does not include the state of internal controls in
the Group, namely the TM TelCo Executive Committee and
material joint ventures and associated companies, which have not
respective boards of major operating companies before
been dealt with as part of the Group.
approval by the Board.
There was no material loss incurred as a result of internal control
4.
Self-assessment and disclosures by all the Group’s
companies with management control, the Internal Control
Incidents and Controls Assurance Letter on an annual basis
affirming the effectiveness, reliability and adequacy of
systems of internal controls.
5.
Documented policies, procedures and guidelines with respect
to Financial Controls, Procurement, Network Operations,
Information Technology, Marketing, Human Resources and
Health and Safety.
6.
Detailed budgeting process, which is in place, is reviewed
at the operating company levels and approved by the Board.
7.
Performance reports on financial performance and business
objectives are regularly provided to operating companies’
management and Boards, to enable them to review the
Group’s progress against its goals.
8.
Monitoring of regulatory and statutory compliance to support
the Board on proper management of effective corporate
governance practices and requirements. The Technical
Compliance Division has been set up to report and update
the Board and the Group on proper practices and compliance
to these requirements.
weaknesses.
053
3.
Whatever your mind can conceive, we can help deliver.
056
CHAIRMAN’S
STATEMENT
Annual Report 2003
TAN SRI DATO’ IR. MUHAMMAD RADZI BIN HAJI MANSOR
Chairman
Dear Shareholders,
On behalf of the Board of Directors
and the management of Telekom
Malaysia it is my pleasure to
present the Annual Report and
Accounts for the financial year
ended 31 December 2003.
As we entered the fourth year of the new Millennium, Malaysians have just gone to the Polls
to elect the Government of their democratic choice. And choose they did with a thumping
majority to the ruling Party. It is a propitious time, heralding a new leadership and a new
national agenda. Telekom Malaysia congratulates the Government on its resounding victory,
constituting as it does a massive vote of confidence and an unequivable endorsement of the
reform initiatives upon which it has embarked. Following the smooth transition in leadership
change, the Elections reaffirmed the continuity and stability that have been the enduring
hallmarks of Malaysia’s political culture. We pledge our full support.
The feel good factor manifested in the ballot boxes is all pervasive. Economic recovery is also
convincingly under way. The global scene is sending messages of recovery, with broad-based
growth in major industrial countries and reinforced by strong growth in the Asian region.
Consumer and investor confidence are returning. GDP achieved a respectable growth of 5.2%
for 2003 and is expected to grow by 6% to 6.5% this year. External reserves were and
continue to be at an all time high with productivity rising and interest rates, inflation and
unemployment kept at low levels. Malaysia is well to the fore.
Given this favourable environment, we are glad to report that your Company has recorded
strong financial performance for 2003 with revenue and profit before tax increasing by 20.0%
or RM1,962.3 million and 18.3% or RM280.1 million respectively. We remain committed to
2003 was a year of consolidation and rationalisation thus putting us in a better shape to face
increasing competition. The most major feature in 2003 was the merger of TM Cellular Sdn.
Bhd. with Celcom (Malaysia) Berhad (Celcom). It was a necessarily long and careful
negotiation but Telekom Malaysia has emerged not only the undisputed leader of the industry
in terms of size and capability but, thanks to the potential for synergy, more versatile and
resourceful. We are ready to fulfil and make the most of the leadership role bestowed on us.
Under the buoyant economic environment, the Group is optimistic that the momentum will
continue in 2004 driven by more robust revenue growth from stronger demand for mobile,
broadband and data services, complemented by the benefits derived from the completion of
the TM Cellular/Celcom merger later in the year.
The 21st Century is a fast paced world with escalating competition in the telecommunications
industry. We need to be agile and responsive. We need to manage change that can be only
more rapid and profound than ever before but sometimes unexpected. In a high technology
industry like ours we need to keep pace with the relentless advance of technology whilst
keeping up at the other end of the scale with developments in the market place, the fast
evolving composition of our clientele and equally the fast evolving criteria of customer
preferences.
057
the creation of shareholder value.
We believe in enriching lives of our customers and those of all
new and complex disciplines of a technology that is still
Malaysian consumers. Science is placed at the service of mankind
developing, often at an accelerating pace. The parameters of the
to improve lives and lifestyles. We in particular are one of the life
professionalism relating to our business have been greatly
technologies bringing a higher standard of living to the people
extended, including Marketing, Accounting & Finance and Risk
and with the special capability of reaching the remotest corners
Management that have become an integral part of our business
of the land that otherwise might be left behind in the march of
strategy. Life in other words has become immeasurably
progress. The ultimate test of what we bring to the community is
complicated. Telekom Malaysia’s empowerment programme based
enhanced quality of life. Hence the theme of this year’s Annual
on performance measurement through KPIs for senior managers
Report is “New Possibilities… Enriching Lives.”
to top executives is not only strategic but also our way of
enriching the lives of our own people. It is an ongoing process.
Last year we imposed a necessary discipline upon expansion
Telekom Malaysia accepts the obligation to foster a culture of
given the troubled international environment. Telekom Malaysia’s
excellence in all we do and therefore to provide the individual
strategy was to focus more on domestic operations, concentrating
with the means and the opportunity to excel.
on enhancing customer service and creating value for our
shareholders. We have also created the environment to revitalise
The events on the world stage be it hostility, physical threat, or
the company. We continued to streamline our operations in order
financial scandals have made us all the more conscious of moral
to be more efficient and cost effective with judicious right sizing
issues. We hail the outright war on corruption the Government
through further restructuring of our core business into wholesale
has declared, and pledge our support to the noble ideals it
and retail activities for sharper focus. We are more service and
espouses.
058
market oriented to the point of being customer obsessed. We
continue to aspire to our vision of becoming the communications
Much is talked today about corporate governance and transparency
company of choice.
as prime judgemental factors in evaluating a modern corporation.
There is nothing new in this. Telekom Malaysia has practised
Our international outreach was also prudently restricted mainly to
these virtues from day one as can be seen from our high rating
markets nearer home like Sri Lanka and Bangladesh, Thailand and
in corporate governance over the years. We have as a company
Cambodia. The relative proximity and in most cases a cultural
always subscribed to the highest standards of integrity and have
affinity provides some comfort. The only exception was our
no difficulty in complying with the prescribed ethics of
continued profitable experience in Telkom SA in South Africa, our
contemporary business.
single largest investment overseas. Last year this highly successful
venture was listed, with better than expected results, a real jewel
Corporate citizenship also takes on an even greater significance.
for Telekom Malaysia’s growth. In fact, excellent performances
Telekom Malaysia last year continued to give back to society
were registered not only in South Africa but in Sri Lanka and
through our participation in numerous charitable, sporting, social
Bangladesh. Overall our international operations have contributed
and cultural activities. This is in line with the caring society we
some 26% to the Group Profit After Tax in 2003. With the present
are striving for as one of the important goals of Vision 2020.
new mood of opening up to new possibilities, it is not too farfetched to see ourselves becoming a regional telecommunications
Special mention goes to our role in accelerating communications
player.
to the countryside and the less developed rural areas, always
associated with Telekom Malaysia more than any other
Ultimately we put our faith in our people. Human capital in the
telecommunications provider. We have been proactive in these
knowledge society is one of the key drivers of business. The
efforts in consonance with the priority currently accorded to this
stakes have been enormously raised. The basic requirement of an
particular sector. When more development is brought to these
industry like ours is both technical and marketing know how. Our
otherwise unserved areas the existing telecommunications
technical training effort is unremitting. Beyond the core
infrastructure will already be in place to facilitate it.
competencies, however, there is today the need to master the
If 2003 was a year we consolidated not just our organisation but
gratitude and appreciation for their invaluable contributions during
our identity we now have to address ourselves as to how we
their tenure as Directors of Telekom Malaysia.
should be positioned in the evolving world of 2004. Here we find
ourselves occupying a unique niche. Malaysia is increasingly
On behalf of the Telekom Malaysia Group, may I extend our best
recognised as a role model of moderate and progressive Islamic
wishes to Y.Bhg. Datuk Amar Leo Moggie who has retired as our
country. We like to think that we also exemplify the spirit of
longest serving Minister. His first portfolio was the newly created
Islamic justice and brotherhood in this multiracial and
Ministry of Energy, Telecommunications and Post in 1978. The
multireligious society, demonstrating that modernisation and
next 27 years, except for the brief sabbatical in the Works Ministry,
technology are not incompatible with Islam. Our own highly
were devoted to our Ministry with full dedication to enriching
technological industry becomes a showcase in this regard.
lives and lifestyles. We benefit tremendously from his wise guidance
to which we here pay tribute and thank him for all he did for us.
I wish to thank fellow members of the Board of Directors, the
Chief Executive, Management and staff of Telekom Malaysia for all
It is also timely for me on behalf of the Board of Directors,
the support they have given us. I also like to welcome "home" our
management and staff to bid a very warm welcome to Y.B. Dato’
colleagues in Celcom with the new partnership and the extended
Seri Dr. Lim Keng Yaik, our new Minister for the renamed
client base they have brought with them.
Ministry of Energy, Water and Communications and the Deputy
Minister Y.B. Dato’ Shaziman Abu Mansor. Telekom Malaysia
May we also congratulate our two former Directors, Y.B. Dato’
stands committed to give our full support for the efforts to bring
Joseph Salang Gandum and Y.B. Dato’ Ir. Haji Mohd Zin bin
the industry to greater levels of service efficiency for the benefit
Mohamed who have been appointed Deputy Ministers in the new
of all consumers.
Group with effect from 1 April 2004. We wish to express our
Finally we thank our shareholders and other stakeholders for their
continued faith in us as well as the professional fraternity with
whom we have had cordial relations over the year. To all our
customers we pledge renewed efforts to provide the quality and
variety of services they have a right to expect, thereby enriching
their lives.
Chairman
059
Government and resigned as Directors of the Company and the
060
CHIEF EXECUTIVE’S
STATEMENT
Annual Report 2003
Chief Executive
OPENING REMARKS
“ The information age is
opening up new possibilities
for all of us, for our children
and for the entire nation”
BILL GATES
Telekom Malaysia has undergone significant realignments in structures to better suit our future
businesses such as the reorganisation into the five operating companies and the acquisition
of Celcom (Malaysia) Berhad (Celcom). This is all a part of the change process and is
necessary for the sustainability and creation of further shareholder value in the next era of
growth. This year we will put in place the blueprint for TM Telco’s transformation into TM
Wholesale and TM Retail, in line with our strategic plan to consolidate our networks across
the Group and doubling our efforts on customer relationship management.
This transformation goes beyond us as a Group, indeed the nation itself shows full
commitment in moving towards a Knowledge Economy and Society. Telekom Malaysia is
pleased to be able to continue to support Malaysia’s Vision and in helping to create new
possibilities for us and for the nation, with the main objective of enriching lives.
061
The past adversities of recent years should be put firmly behind
us now and we are to look forward once again to a new era
of growth and a brighter future. Telekom Malaysia is moving
with vigour towards its transformation into a fully integrated
communications company of choice for the new millennium.
We are charting a new course together as a Group. The seeds
of change, which were sown in 2000, continue to be nurtured
and we are beginning to see signs of fruition in a number of
key strategic areas such as in our cellular, broadband, data and
Internet Protocol (IP) related businesses; of positive mindset
change in our organisational culture and a fresh approach in
our interaction with customers.
2003 GROUP PERFORMANCE
The environment will undoubtedly become more complex as
The ICT Environment is recovering…
multiple vendors in an increasingly international operating
environment will offer multiple services. This will have global
Global/Regional
regulatory impact as boundaries become less clear, thus affecting
The outlook for the global economy in 2004 has improved
accountability for service performance and consumer rights to
significantly with more broad-based growth in major industrial
recourse. The challenges for an incumbent player are indeed
countries; reinforced by strong growth in the Asian region. The
formidable but tremendous opportunities abound too.
industry is breathing a sigh of relief as strong signals of recovery
are emerging especially in North America where U.S. telecom
companies will boost capital spending for the first time since
Malaysia
2000.
The significantly improved external environment will reinforce
stronger domestic demand in Malaysia. Higher consumer and
This new period is being driven by the market pull for services
business confidence is expected to support the stronger
that comes from a real convergence of information and
momentum of growth in private consumption and investment
communications technologies (ICT). ICT will continue to play a
while the public sector gradually consolidates. The combination of
leading role in future development of global nations both socially
stronger domestic demand and rising exports resulted in a
and economically.
stronger-than-expected GDP growth of 5.2% for the whole of
062
2003. Further, the 6.4% GDP growth in the 4th quarter 2003
In recent years, we have seen the onslaught of various new
promises a strong economic outlook for 2004, which the
technologies that have given rise to an array of new services,
government projects to grow by between 5.5% and 6%. This
which are more network and cost efficient and have forced
augurs well for the local telecommunications industry.
traditional business models to be reinvented. Non-traditional
competitors, such as power utilities and niche players continue to
Improving economic conditions over the short-term will help to
emerge adding to the already fierce competitive landscape.
stimulate traffic volumes in voice and data, as business activity
Certainly, the defining element of new technologies has arguably
picks up and making consumers feel more confident in spending.
been IP based networking but in broad terms, these products are
Indeed 2004 should see further commitments in new growth
creating increasing market demand:
areas especially mobile services, data services and broadband.
•
VOIP with increasingly quality of service will grow in
consumer and business markets
•
Enterprise managed services to deliver dynamic customized
services on a wide scale
•
Broadband initiatives to move value beyond access
•
Wireless/wireline integration to address basic access issues
and introduce more value-add in areas previously underserved
•
In Asia particularly, mobile services will continue to surpass
fixed in terms of lines and revenue growth.
The future of the fixed-line industry, in Asia as anywhere else,
depends upon carriers redefining their access markets. There is a
need to move away from just voice connections to higherbandwidth access, which can offer improved services and
applications. This is an important part of not just finding new
growth in this segment, but in differentiating the fixed offering
from that of mobile.
The national agenda is still very much on “Bridging the Digital
Divide” and it is also one of Telekom Malaysia’s priorities as a
responsible corporate citizen. We echo this sentiment with this
year’s annual report theme of “New Possibilities, Enriching Lives”
which is very much a Telekom Malaysia agenda, as we strive to
better Malaysian lives through new offerings in mobile, data,
Our fixed line voice and data services charted moderate
internet and even enhanced basic voice services via our wired
performance in the year 2003 with data experiencing a 12.6%
and wireless access options.
growth despite a highly competitive market. Fixed line voice
cash flows with better collection and lower bad debts. Intensive
pleased to announce Telekom Malaysia’s 2003 performance and
product promotion and competitive pricing have also increased
future prospects.
network utilization.
Performance Review
high speed internet access, where revenue increased four-fold in
Telekom Malaysia is happy to report a strong 2003 financial
the last year with aggressive broadband expansion – TMnet
performance despite the setbacks of recent times. We have seen
Streamyx subscribers increased by more than 5 times to over
good revenue and profit growth, with improving EBITDA margins
111,000 customers.
We have also seen better broadband performance, especially in
and EPS. Capital expenditure has also stabilized at under RM2
billion.
In our international operations, we have also enjoyed better
EBITDA and bottom line contribution. The average EBITDA margin
For the financial year under review, the Group revenue increased
achieved by overseas subsidiaries for 2003 was 48.7% with
by 20.0% (RM1,962.3 million), driven primarily by cellular
average PAT margin from overseas subsidiaries at 33.7%. This
segment, data and non telecommunication services. Significant
resulted in an aggregate profit contribution of 26% to Group PAT.
increase in cellular revenue is mainly due to consolidation of
Celcom, acquired during the second quarter 2003. Celcom also
EPS for the year 2003 was 43.6 sen, a tremendous improvement
largely contributed to the growth in Group profit before taxation
over 2002 EPS of 26.8 sen. On the basis of the overall stronger
for the financial year under review, which increased by 18.3%
2003 financial performance of Telekom Malaysia Bhd, the Board
(RM280.1 million).
is pleased to recommend a final dividend of 10.0 sen per share
less tax at 28% and a special dividend of 10.0 sen per share less
Post-merger, Celcom was the first mobile network operator in the
tax at 28% for the shareholders’ approval at the forthcoming
country to offer domestic roaming over its dual-band network.
Annual General Meeting of the Company.
Currently, 4.3 million Celcom 019 and 013 customers are
enjoying greater connectivity and domestic roaming at no extra
cost. Celcom customers can also enjoy international roaming in
86 countries over 200 networks worldwide. At the network level,
the sharing of infrastructure has increased Celcom’s capacity and
capability to support a greater number of concurrent users at any
given geographical location.
063
services remains the main revenue contributor providing stable
It is against this more upbeat environmental backdrop that I am
Key Initiatives
Data Services, we continue to introduce state-of-the-art technology
The following key initiatives are a culmination of efforts since
such as VSAT, MyLoca Disaster Recovery Call Centre and
2000, and part of the transformation roadmap of Telekom Malaysia
enhanced COINS to meet the changing needs of our customers.
towards becoming the Communications Company of Choice
We have also established TM Representative Offices (TMRO) in
whilst simultaneously supporting Malaysia towards Vision 2020.
the UK, US, Hong Kong, Singapore and India to capture a share
of the data markets abroad.
In the mobile space, the merger of TM Cellular and Celcom has
propelled the new Celcom to the forefront of the Malaysian
TM is committed to its objective of turning Malaysia into a
mobile communications industry in terms of network coverage,
regional telecommunications hub by continuously developing and
capacity and customer base. The integration exercise has been
expanding its hubbing business. The company plans to introduce
implemented in stages and is expected to be completed by end
a Next Generation Network (NGN), the implementation of which
2004. It is aimed at presenting a single integrated view and
will involve migration towards packet-based data networks. The
experience to customers, repositioning market offerings and
IP-based NGN is capable of handling data, voice and video
consolidating the new brand position.
communications simultaneously and can also offer flexible valueadded services.
064
Groundwork is still being laid for general deployment and
marketing of 3G services at the end of 2004 and early 2005.
Telekom Malaysia has always taken great pride in our contributions
However, we will monitor 3G developments in the region very
to national development towards a Knowledge Economy. Our
closely together with other operators and market analysts whom
latest initiative in this arena is in leading the SchoolNet project,
are not expecting rapid adoption before 2006. Thus, the focus will
which provides broadband connection to all schools in Malaysia.
be on delivering 3G-like services on current networks whist
This is a government project handled by GITN Sdn Bhd a wholly-
migration works from 2G to 2.5G and beyond are progressing.
owned subsidiary of Telekom Malaysia, where about 10,000
schools will be provided with broadband Internet Access, part of
which will be connected with DSL (Digital Subscriber Line) using
the COINS x-link.
Be it via our training and human resource development programs,
or our educational and academic endeavours such as the
Multimedia University, Telekom Training Colleges, TM Research
and Development, the Smart School and SchoolNet projects as
well as our Scholarship Foundation; we hope to help prepare
Malaysia and ourselves for a better future.
PROSPECTS
The continuing increase in demand for mobile services, wireless
access, bandwidth and data services will drive stronger revenue
TM Net will expand its applications, contents and services. In
growth for the year. The Group is optimistic that this growth
addition to being a content aggregator for online and cellular, TM
momentum will be further complemented by benefits derived
Net will continue to increase high speed internet availability and
from the completion of Celcom/TM Cellular integration later in the
introduce other services such as multimedia messaging services
year. Meanwhile, the Group will continuously intensify efforts to
(MMS), video-on demand (VOD), interactive video streaming and
achieve improved cost and operational efficiency.
other value added services; be it for consumer or the businesses.
Telekom Malaysia’s strategic direction for 2004 centres around
Throughout 2003, TM Telco has been putting itself more closely
these 5 pillars:
in touch with the needs of its customers by reviewing product
•
Stakeholder value creation
lines and bundling strategies. Some of these exciting new
•
Leadership in key customer segments
products for fixed line services include TMHome Prepaid, Fixed
•
Solutions valued by customers
SMS and Ria Residen, Business Plus and SMI/SME Packages. In
•
Improved quality and customer service
•
Optimal operating cost structure
In particular the Group will focus on rationalising network assets,
implementing CRM, optimising Group product packaging and in
improving our procurement process whilst continuing to uphold
defending voice revenues and growing the SME data markets.
Celcom will place great emphasis on increasing quality, subscribers
and ARPU as well as mobile data revenues. TM Net will continue
to sustain the quality of service to our narrow band customer
base whilst expanding our broadband efforts. TM International
will continue to look for investment opportunities in Asian
emerging market.
One of the initiatives that will radically change the way Telekom
Malaysia operates in face of global challenges is our strategic
attention to Wholesale Business. The impending split of the
current TM Telco into two effective operating units; TM Wholesale
and TM Retail will be implemented to allow more focus on each
respective core businesses and customers, where Wholesale will
concentrate on infrastructure service offerings to its customers,
and Retail will concentrate in selling end user services without
having to maintain the vast networks. This approach will impose
a greater responsibility and accountability in ensuring the best of
service offerings to customers, which eventually will be reflected
via their separate profit and loss accounts.
Significant benefits from this strategic move are in terms of
improved customer focus, cost efficiency, increase in revenue,
growth in product offerings, improved asset utilization, widening
of business opportunity, first mover advantage as well as in
CLOSING REMARKS
“The greatest visionaries see things others don’t
– new routes to success,
new ways of enriching lives, new possibilities of what can be”
(Leslie Kossoff, author of “Executive Thinking”:
The Dream, The Vision, The Mission Achieved)
We at Telekom Malaysia have set a vision for ourselves; and in
doing so are firmly committed to making it a reality. The
transformation roadmap towards that vision is a progressive
workplan of firm actions designed to produce results. Execution
and implementation will be critical but we must be flexible
enough to face whatever challenges that lie ahead. 2003 has been
a good year with which to launch us forward and upward. There
will always be new possibilities for Telekom Malaysia.
With that, I would like to express my gratitude to the management
and staff of the Group for their hard work in 2003 and to offer
continual encouragement for their ongoing efforts in Telekom
Malaysia. On behalf of the group, let me also thank the Board of
Directors and our shareholders for their invaluable support and
guidance through all of our endeavours.
Let us move forward together to build new possibilities and
enrich lives.
addressing the regulator’s agenda.
Dato’ Dr. Md Khir Abdul Rahman
Chief Executive
065
best practice Corporate Governance. TM Telco will concentrate on
Be it five metres or 5,000 kilometres, we make it easy for you to say “Hello”.
Hello
068
Fixed Line
Services
OPERATIONS REVIEW
Annual Report 2003
DATO’ DR. IDRIS IBRAHIM
CHIEF OPERATING OFFICER
TM TELCO
PERFORMANCE
TM TELCO, WHICH MANAGES AND OPERATES TELEKOM
MALAYSIA’S FIXED LINE TELEPHONY AND DATA-BASED
PRODUCTS AND SERVICES, CHARTED MODERATE
PERFORMANCE IN THE YEAR 2003. THE COMPANY
REGISTERED A REDUCTION IN REVENUE OF 0.4%, VALUED AT
RM7,943.7 MILLION. PROFIT BEFORE INTEREST AND TAX,
DROPPED BY 15.8% TO RM1,749 MILLION ATTRIBUTED TO
HIGHER TOTAL COSTS AND DEPRECIATION. THE HIGHER
COST OF INTERNATIONAL OUT-PAYMENTS AS WELL AS
CHANGES AFFECTING DOMESTIC INTERCONNECT CHARGES
HAD CONTRIBUTED TO THE TOTAL COSTS INCREASE.
THE EBITDA MARGIN STOOD AT 53.3%, WHILE EBITDA
INCREASED BY RM24.4 MILLION FROM THE PREVIOUS YEAR.
The data business registered a positive increase with
203,418 64kbps-equivalent circuits sold compared to
only 99,210 in 2002. Despite price reductions in the
highly competitive market, data revenue experienced
a remarkable 12.6% growth.
Revenue from the traditional Voice Sector decreased
DEL Cummulative shows a downward trend due to
reduced intake from the residential sector
by 0.5%, as a result of lower revenue from
international operations. Nevertheless, voice minutes,
4,0000,000
especially in long distance calls grew from an
average of 720 million in the first quarter of 2003 to
3,2200,000
760 million in the last quarter of the year.
2,4400,000
Non-payment of bills and the migration to mobile
reduced the number of telephones sold by 61,638
1,6600,000
lines. As at end December 2003, TM TelCo had
4,531,662 registered telephone accounts.
800,000
Service quality has improved, with KTT (Fault per
1000 telephones per year) measuring 0.22 compared
2003
to 0.25 in 2002. Above all, TM TelCo achieved the
industry Mandatory Quality of Service level as set by
Business
Residential
the Malaysian Communications and Multimedia
Commission (MCMC). The improved quality of
service and TM TelCo’s commitment to maintaining
quality customers had further contributed to a
64kbps-Equivalent Leased Circuit Cummulative shows
an upward trend
reduction in telephony bad debts over sales of 2.75%
from 2.96% in 2002.
680,000
Overall, TM TelCo’s Customer Satisfaction Index (CSI)
620,000
has been positive. The MCMC Wave 5 Study for
Fixed Lines gave TM TelCo’s individual customers
560,000
segment a 7.93 ranking and the commercial segment
7.57, both rankings being above the industry
500,000
standard. Improvements in the installation process,
network quality and ease of making and receiving
440,000
calls were key to the improved customer satisfaction
index.
Dec ’03
Oct ’03
Novv ’03
’
Jul ’03
Jun ’03
’
Feb ’03
Marr ’03
Jan ’
380,000
The future of telecommunications is shaped by the
convergence of voice and data. Customers are
demanding cheaper but more reliable products. While
the voice business is expected to grow at 2.2% per
year, the data business is envisaged to register a
double growth rate. Realising this trend over the last
five years, TM TelCo has been repositioning its
069
2002
2001
2000
1999
0
business towards data. Moving forward, TM TelCo is
planning a more advanced network configuration to
support the various aspects of future customer
demand.
OPERATIONS
NEW PRODUCTS INTRODUCED IN 2003
Enhanced Voice Products
To retain customers and stimulate Direct Exchange
Line (DEL) usage and sales, several new products
were introduced in 2003, including:
TM Home Prepaid: targeted at low-income
customers. Rental is free and calls are made through
the Ring Ring card. As at end December 2003, there
were 24,168 customers and the number is growing.
Fixed SMS: launched in November 2003, it provides
the popular mobile SMS to fixed line customers
070
using the PSTN network.
Three promotional packages that provided attractive
discounts and bundled competitive products were
also introduced.
Ria Residen Package and Package Business Plus:
these offer simple solutions for services such as
DEL, enhanced facilities, CLIP (Caller Line Identifier)
and fixed SMS.
Package SMI/SME: offers more extensive solutions
for the small/medium business community in the
form of basic services and up-market products such
as tmnet streamyx and tmnet prepaid cards.
EzeePhone: offers a prepaid service to public
dwellings such as hostels and apartments.
Value-Added Data Products
The following data products in step with the fast
moving technology were introduced to meet the
changing needs of customers.
VSAT (Very Small Aperture Terminal) DialNet Multi
iii.
Project 100+ Initiative
User: launched in October 2003, this enhanced VSAT
A commercial alliance with strategic partners is
service uses a satellite network and is fully compatible
being formed to plan and identify new services
with multiple communication protocols. Along with
and market segments that would enable
TM Net access, the price is expected to become
Telekom Malaysia to generate at least RM100
extremely competitive, especially in comparison with
million over the next two years.
the current VSAT price.
iv.
Data Customer Service
MYLOCA (Telekom Malaysia’s total Data hosting
Customer Services Management (CSM) was
and Recovery Solution) Disaster Recovery Call
formed to oversee Data after-sales service. The
Centre (DRCC): launched on 5 March 2003 in
key objective of CSM is to establish a dedicated
Cyberjaya, the centre offers total business continuity
and professional One Stop Data Customer
and recovery solutions. The first company to
Service Management Centre to provide total
subscribe to this service was American Express,
customer satisfaction.
Malaysia.
Product Revenue Assurance
Over RM122 million in new revenue was
users: launched in January and April 2003
realised as a result of improvements in the
respectively, these services allow for more value
billing process and integrity of customer data.
added services that can be tailor-made to suit
Agreements were also scrutinised to ensure
customers’ requirements.
accuracy and completeness, as part of the
product revenue assurance focus.
The following Special Projects were introduced in
2003 to meet specific business objectives.
Customer Network Operation (CNO) Outsourcing
i.
ii.
SchoolNet
The main objective of CNO outsourcing is to improve
The SchoolNet project provides broadband
the quality and productivity of service delivery and
connection to 10,000 schools in Malaysia. It is
maintenance of the current telephony and broadband
a government project handled by GITN Sdn.
circuits. CNO has a total of 595 contractors, of whom
Bhd., a wholly-owned subsidiary of Telekom
318 are telephony contractors, 150 broadband
Malaysia. The schools will be connected with
contractors and 127 contractors focusing on
broadband Internet access.
maintenance on access network.
Telekom Malaysia Representative Office
(TMRO)
Telekom Malaysia’s Global ATM/Frame
Relay/IPVPN nodes were established in the UK,
US, Hong Kong and Singapore. IPLC cost and
pricing development guidelines for each TMRO
(except Singapore) was handed over to the
respective office heads to allow for flexibility in
sales and marketing in the individual TMROs.
071
v.
COINS x-link single user and COINS x-link multi-
With this programme, CNO telephony service delivery
HR Business Strategy for 2004 And Beyond
achieved the national target of meeting all customer
Communication has played a key role in ensuring
appointments set by Telekom Malaysia. For
effectiveness of HR practices, particularly in giving
maintenance on access network, CNO achieved a
the HR department the perceived image as being
reduced fault rate of 0.05 (Data) and 0.15 (Telephony).
“fair” in tackling internal equity. The department
plans to increase and improve its communication to
staff on policies, benefits and rewards.
e-CNO: Electronic Customer Network Operation
e-CNO is an effective solution for nationwide
management and enhancement of information
PROSPECTS
systems used by CNO personnel. Currently used
Advanced Future Infrastructure
systems include the Order Management System
1.
International Market
(OMS), Restoration Management System (RMS),
Telekom Malaysia’s mostly fibre optics-based
Maintenance Management System (MMS), Workforce
international network currently has the
Management System (WFMS), Finance Management
capability to provide high capacity and quality
System, Project Management System, Inventory
global connections for Internet and other
Management System and Alarm Management
broadband services. The C7 links established
System.
with most countries provide a fast and quality
call set-up.
072
Organisational Learning And Growth
TM TelCo has, since 2001, adopted the use of key
performance indicators to drive its business.
A balanced scorecard (BSC) approach was introduced
in the middle of 2003 to enhance the business
planning and development process. BSC focuses on
four areas in its appraisal: Finance, Customers,
Operations and Learning and Growth. A strategy map
Telekom Malaysia has also introduced VSAT
services for both domestic and international
private network applications, international
gateway projects bridging the digital divide in
rural and remote areas. Telekom Malaysia has,
since July 2003, served 10 sites in Julau,
Sarawak, and another 10 sites in Kinabatangan,
Sabah.
was developed to cater for the next three years’
With the SAT-3/WASC/SAFE (South Atlantic/
planning and, from that, objectives, measures and
West Atlantic Submarine Cable/South Asia Far
key initiatives were aligned to TM TelCo’s overall
East Cable) upgrade fully completed on 11 June
strategic direction.
2003, Telekom Malaysia has become the sole
landing country in the Far East providing direct
connectivity via fibre optics to reach new
Staff Leadership & New Skills
destinations in the African continent at a
The human resource department strives to provide
cheaper cost per circuit. It also provides
excellent service to TM TelCo’s employees as well as
Telekom Malaysia with a route to Europe.
its customers. It is committed to developing
leadership skills among staff and retaining them by
providing personal, technical and professional
learning opportunities. New skills have been identified
to propel TM TelCo into the world of data, apart from
traditional voice technologies.
Two new international submarine cable systems
are being planned to connect at the Submarine
Cable Station (SKDL) in Melaka, namely the
320 Gbps DMCS (Dumai-Melaka Cable System)
and the 1.28 Terrabits (Tbps) SEA-ME-WE4
(South East Asia – Middle East – West Europe
Cable System). The DMCS is being jointly
developed by Telekom Malaysia and PT Telkom
of Indonesia to connect Melaka with Dumai,
Indonesia. Estimated to cost USD15 million
(RM57 million), it is expected to be operational
in September 2004.
The SEA-ME-WE4 project, meanwhile, will use
technology, and is estimated to cost USD730
c.
Broadband Fixed Wireless Access
million (RM2,774 million). It should be
BFWA (Broadband Fixed Wireless Access)
operational by June 2005.
is a wireless point to multipoint
communication system. Telekom Malaysia
2.
Local Market
has been granted licenses in the 3.5GHz
a.
Hyperband Leased Line
and 10.5Ghz bands. The system is used
Hyperband Leased Line is a Gigabit
to provide two-way high speed data
optical networking solution offering high-
services. Wireless Leased Line and
speed connectivity up to 2.5Gbps for
Wholesale Wireless Leased Line will be
customers who need real-time applications
introduced in year 2004 to complement
such as Storage Area Network (SAN),
DSL, Digitaline I (DG) and Digitaline II
Disaster Recovery service and imaging
(DQ).
applications. It will be made available in
2004.
d.
CDMA
The objective of the Code Division
b.
Digital Leased Line
Multiple Access (CDMA) project is to
This is a key product including Digitaline
provide Fixed Wireless Access (FWA)
II and Broadband Leased Line. It is
services to cater for rural, suburban and
expected to contribute to the high growth
urban subscribers. Services offered are
of leased services in 2004, and will be
Fixed Wireless Voice and Fixed Wireless
made available to retailers in the form of
Data Applications.
wholesale services.
073
Dense Wavelength Division Multiplexing
Infrastructure with 1X upgrading and peak
Gearing Technology And Networks Towards Data
data speeds of 144kbs has been installed
Business
and completed for all core network
TM TelCo is committed to its objective of turning
elements (MSC and BCS). For Base
Malaysia into a regional telecommunications hub by
Transmission Station (BTS), a total of 37
continuously developing and expanding its hubbing
sites have been installed with 1X protocol,
business. The Company plans to introduce a Next
upgraded from IS-95B.
Generation Network (NGN), which involves migrating
towards packet-based networks. NGN is capable of
e.
ADSL
handling data, voice and video communications
In order to support Telekom Malaysia and
simultaneously and can also offer flexible value-
the Malaysian broadband strategy, an
added services.
Asymmetrical Digital Subscriber Line
(ADSL) has been rolled out throughout
1.
Next Generation Network (NGN)
the country. It is estimated that 2.5
NGN will be implemented to face future
million ADSL users will be connected by
challenges and, in so doing, fulfil customer and
2008.
business requirements. This network will be
developed on IP-based switching systems. The
074
f.
Digitaline II
implementation of NGN will be driven primarily
Digitaline II is a service that provides
by economic and technology factors. A "live"
narrowband and broadband leased
technical trial was conducted with four vendors
circuits and access circuits for other
from February to June 2003, during which
service providers including COINS, BT
some technical capabilities were tested and
Concert, Infonet, TM Net and others.
verified. A commercial trial is expected to be
held in May 2004.
2.
Multiservice Access Node (MSAN)
MSAN is a technology migration for CAN
(Customer Access Network) equipment to
provide narrowband and broadband services
from a single integrated access node. Currently,
narrowband services are provided by DLC
(Digital Line Concentrator), broadband services
via RDSLAM/DSLAM (Remote Digital Subscriber
Line Access Multiplexer/Digital Subscriber Line
Multiplexer), and MLCN (Managed Leased
Circuit Network) services are provided by DDN
(Digital Data Network) equipment.
MSAN is the next generation DLC to provide
ATM and IP services. It will also be used to
replace existing local switches. The MSAN
system is currently being tested and is
expected to roll out by mid-2004.
IP VPN (Internet Protocol Virtual Private
Network)
IP VPN, being the technology for the future, is
being planned to cater for the SMI/SME market
segment. The infrastructure is expected to be
ready by the second half of 2004. Five main
key initiatives to grow IP VPN services have
been outlined for year 2004, namely:
•
Classes of IP VPN services with end-to-end
SLA (Service Level agreement)
•
IP delivery model for SMEs
•
Product bundling packages, eg IP VPN &
hosting services
•
Introduction of Metro Ethernet
•
International roaming as new value added
services to IP VPN
4.
Technology Testing/Trials
In line with Telekom Malaysia’s objective of
migrating
towards
next
generation
telecommunications and becoming a low-cost
infrastructure provider, continuous research is
robust platform of high-valued products and
services with Internet capabilities and webbased technology. TM TelCo is also looking into
the bundling of value added fixed, data and
mobile networks.
075
3.
being conducted to enable the provisioning of a
We’re pioneering cellular technologies to surround your world
with the rich experience of multimedia.
UMTS
GPRS
SMS
GSM
MMS
078
Cellular
OPERATIONS REVIEW
Annual Report 2003
DATO’ RAMLI ABBAS
CHIEF EXECUTIVE OFFICER
CELCOM (MALAYSIA) BERHAD
PERFORMANCE
ON 17 APRIL 2003, CELCOM (MALAYSIA) BERHAD
(CELCOM) BECAME A SUBSIDIARY OF TELEKOM MALAYSIA
WHEN THE FORMER TOOK OVER OWNERSHIP OF TM
CELLULAR SDN. BHD. THE MERGER PROPELLED CELCOM
TO THE FOREFRONT OF THE MOBILE COMMUNICATIONS
INDUSTRY IN TERMS OF NETWORK COVERAGE, CAPACITY
AND CUSTOMER BASE. THE INTEGRATION EXERCISE IS
IMPLEMENTED IN STAGES AND EXPECTED TO BE
COMPLETED BY END 2004. IT IS AIMED AT PRESENTING
A SINGLE INTEGRATED VIEW AND EXPERIENCE TO
CUSTOMERS, REPOSITIONING MARKET OFFERINGS AND
CONSOLIDATING THE NEW BRAND POSITION.
Financially, for the first time in five years, Celcom
In view of the integration, the Group incurred a
made profits before and after tax with revenue,
capital expenditure of RM365 million during the year,
EBITDA and the EBITDA margin increasing to a
a savings of approximately RM484 million as
record high of RM3.6 billion, RM1.5 billion and 42%
compared to the initial combined budget had the two
respectively.
companies not merged. In 2004, the Group’s capital
expenditure, including that for integration purposes,
Revenue for the year grew by 51% from RM2.4
is expected to be not more than RM590 million.
billion the previous year, due primarily to growth in
When fully integrated, Celcom is expected to reap
prepaid customers from 1.2 million pre-merger to 3.2
further synergistic benefits from the merger.
million at the end of 2003. Although revenue from
postpaid remained fairly stagnant, Celcom expects to
During the year, for the first time ever, the earnings
see 10-15% growth in the coming years from new
per share of the Celcom Group touched double digits
packages introduced. Revenue growth came primarily
of 13 sen as compared to 1.66 sen in 2002.
from mobile data solutions, which more than doubled
during the year. The launch of its Multimedia
Messaging Service (MMS) attracted 18,000
subscribers initially and the number is expected to be
more than double in 2004. This trend is expected to
continue in the year ahead with data and mobile
solutions targeted to contribute approximately 15%
079
to Celcom Group’s total revenue.
In the post-merger period, Celcom has focused on
cost containment efforts such as streamlining
dealers’ incentives, rationalising advertising and
brand promotion exercises, diversion of TM Cellular’s
traffic via the Celcom backbone and infrastructure,
sharing of network sites, negotiation with foreign
carriers for bulk discounts as well as revisiting and
streamlining all product pricing and packages. These
efforts have resulted in an approximate savings of
RM151 million in the 2003 Group’s operating costs.
Hence at the operational level, the Group managed to
increase its EBITDA margin from a low of 32% (at
acquisition) back to its original pre-merger level of
43% in December 2003. On the whole, the cost
containment measures have managed to reduce the
Group’s operating cost, as a percentage of revenue
from an average of 76% in 2002 to 58% in 2003.
It's in your hands
OPERATIONS
At the same time, Celcom’s customised prepaid
Post-merger, Celcom was the first mobile network
packs of Xcel, Xceed and Xplore were further
operator in the country to offer domestic roaming
enhanced with improved international roaming
over its dual-band network. Currently, 4.3 million
experience to Indonesia, Singapore, Thailand, the
Celcom 019 and 013 customers are enjoying greater
Philippines, Hong Kong, Brunei, Taiwan, Australia, the
connectivity and domestic roaming at no extra cost.
Netherlands, Cambodia and Vietnam. Better customer
Celcom customers can also enjoy international
loyalty programmes were also introduced, such as
roaming in 101 countries over 232 networks
airtime bonuses and free bonus SMS.
worldwide. The sharing of network infrastructure has
increased Celcom’s capacity and capability to support
In keeping with the growth of the mobile data
a greater number of concurrent users at any given
business, Celcom launched its MMS via the General
geographical location.
Packet Radio Services (GPRS) platform in August
2003 which attracted an initial registration of 18,000
In November 2003, Celcom completed the first phase
customers. Offering more than just a broadening of
of its dual-band network integration in Kelantan and
message content, MMS is a logical extension of SMS
Perlis, a precursor to a fully integrated network.
and is set to enhance the possibilities of mobile data
Upon completion of this exercise in October 2004,
solutions for customers.
Celcom is expected to achieve total national coverage
which, coupled with further improvements to its
network capacity and quality, will make it the leading
080
cellular service provider in the country.
Year 2003 also saw a visual identity change when the
Company launched its new unified logo in October.
The revitalised logo reflects a symbiosis of both
tradition and the corporation’s new direction. The
bird in full flight symbolises the timeless spirit of
freedom and aspiration. The new brand promise is
about constantly delighting customers and exceeding
their expectations. The tagline It’s In Your Hands is
about empowering customers with endless choice
and possibilities to enhance their lifestyles. To build
and enhance the Company’s brand equity, several
brand sponsorships under the banner of Celcom
In-Play and In-Showbiz were introduced to
communicate the compelling reasons that make
Celcom a preferred brand.
In view of the maturing mobile industry in Malaysia,
Celcom is placing emphasis on enhancing the quality
of its customer service and the revenue derived from
it. Aimed at matching the needs and aspirations of its
customers, Celcom introduced a new range of
consolidated postpaid plans, EZY, CHAT, BIZ, SALAM,
IMPERIAL and AURUM, which are carefully segmented
to specific target markets and more competitively
positioned.
During the year, Celcom introduced a series of new
value-added SMS services through several strategic
partnerships, such as Celcom Bernama News on
Demand, Al-Jazeera News Services, a Prepaid
Recharge facility via AmBank and the KRU Celebrity
Portal. SMS traffic showed a significant increase of
35% in the year ended 2003, in tandem with growth
in mobile data revenue.
The year was also significant in that Celcom scored
the highest among telcos in a Customer Satisfaction
Survey commissioned by the Malaysian Communications
and Multimedia Commission. Celcom’s Jalan Ampang
Branch was also awarded the Anugerah Kualiti Y.B.
Menteri Tenaga, Komunikasi dan Multimedia for
providing the best customer service in 2003.
PROSPECTS
In the year ahead, Celcom will continue to focus on
i)
081
the following key areas:
Building a strong brand and powerful market
position from which to expand domestic and
international access, hence achieve economies
of scale, boost revenue and compete effectively
in its chosen markets.
ii)
Deploying a stronger and more focused
marketing and sales strategy to promote its full
range of products and services.
iii)
Instilling total dedication to customer care and
service at all customer touch points.
iv)
Empowering its employees and developing a
spirit of shared values that will ultimately create
a culture of excellence.
In addition, to further support the mobile solutions
business strategy, future development will concentrate
on enhancing the mobile network via GPRS and on
preparing for the impending 3G services.
Celcom’s long-term strategy is to expand its business
beyond mobile voice communications into new market
segments to access additional revenue streams.
It will continue to introduce innovative and pragmatic
mobile data services and solutions to keep people
connected anywhere, anytime.
Celcom’s new logo was launched amidst much fanfare marking the dawn of a
new era.
THE EVER-EVOLVING WIRELESS WORLD
Over the past decade, if there were but one buzzword in technological advancement, it would be
“wireless world”. People no longer limit their communication needs to fixed line telephones or Internet
access. The need for mobility has increased research and development activities towards wireless
technology and innovations.
As the mobile revolution continues to reshape the landscape of technology, mobile solutions are becoming
increasingly important in everyone’s day-to-day routine, changing the way we live, work and play. The
world is realising the importance of such tools in conducting business or just to communicate with a
friend, for the ease and convenience that they offer.
082
Mobility Solutions
Annual Report 2003
While the mobile industry is expanding worldwide, its growth is
or GPRS) – was born. This meant higher data rates as well as an
fastest in Asia, where the rapidly increasing number of mobile
increase in mobile consumers globally.
converts is expected to spur mobile technology and solutions to
greater heights in the coming years.
Leveraging on the 2G-network system, 2.5G has taken a step
forward in creating the right ecosystem for mobile data services
According to findings from IDC’s Asia/Pacific Wireless Enterprise
for the upcoming third-generation mobile system (3G), which
User Survey 2003, wireless technology will contribute
promises to satisfy consumers’ hunger for ever higher speeds of
significantly to a renewal in IT spending in 2004, and will present
Internet access, richer multimedia content and services, and
excellent opportunities for providers of enterprise solutions,
enhanced capabilities to further improve their lifestyle and quality
telecommunications services and personal wireless devices.
of life.
Taking this step into the wireless world, however, necessitates the
WHERE IT BEGAN
deployment of infrastructure such as WCDMA and CDMA2000
In early 1990s, second-generation (2G) mobile systems were
and an integration of world standards, so that mobile consumers
introduced around the world to ensure global interoperability.
will indeed be able to communicate anywhere and anytime, using
Since then, 2G has developed to provide consumers with roaming
any mobile device.
capabilities, enhanced non-voice services such as Short Message
Service (SMS) and better quality voice services. However, with
increasing demand to be able to do more with the phone than
just make a call or send an SMS, a new generation of mobile
systems – 2.5G (better known as General Packet Radio Service,
WHY THE HYPE FOR WIRELESS?
Consumers, having adopted mobile solutions as part of their daily routine over the past
few years, are beginning to experience the many advantages that mobile solutions bring
to their lives. At the end of 2002, there were more than 400 million mobile subscribers
in Asia alone, representing an annual growth rate in subscription of more than 50%.
There is much potential for growth. However, it takes time to implement wireless solutions
and for them to attract consumers’ attention to become “the latest phenomenon”. Also, as
the mobile revolution continues to unfold, much needs to be done and many systems
need to be implemented before 3G will be commonplace.
In the meantime, today’s market already offers mobile consumers an array of mobile
devices, and a host of playgrounds to deploy various applications and contents. Mobile
telecommunication service providers are continuously looking for ways to fully leverage on
these platforms, while considering both new network infrastructure and new partnerships
with vendors or suppliers to design specific products.
In Malaysia, the trend for mobile solutions, including hand phones and wireless LAN
hotspots, has been on the upswing, following the rest of Asia and indeed the world.
Demand for wireless handsets is still growing very rapidly in terms of both hand phone
providers. At the same time, more and more wireless applications are entering the market
to further enhance the end user experience, especially in non-voice services.
The one segment in this industry that has seen tremendous growth over the past year,
and is set to take the cellular business to the next level, is mobile data, which is gaining
more popularity than even voice. Text messages, better known as the Short Message
Service (SMS), is probably the biggest phenomenon of our wireless application era since
voice. What started in the late 1990s as a minor value-added application to mobile
services grew beyond everyone's expectations into a craze that has continued into the new
millennium.
According to industry reports, in Malaysia alone, a total of 3.6059 billion SMSs were sent
in 2002; while in just the first quarter of 2003, the number had reached a high of 1.433
billion.
Indeed, SMS has become an “accidental success”, one that took nearly everyone in the
mobile industry by surprise and paved the way for cellular operators across the globe to
further push non-voice technology to consumers. For the consumer, it was just what they
needed – technology to communicate seamlessly. In other words, SMS represented a winwin situation.
Mobile service operators and consumers alike attribute the popularity of SMS to its
simplicity, ease and convenience. Mobile service operators are taking the opportunity to
offer customers exciting platters of SMS or text services that cater to everyone, from
casual mobile users to serious business professionals.
083
replacement sales and new subscriptions within mobile telecommunications service
Celcom (Malaysia) Berhad is no exception. Upon integration with TM Cellular Sdn. Bhd.
on 17 April 2003, Celcom introduced many firsts within Malaysia, setting milestones in
SMS offerings such as the Al-Jazeera Package, Bernama News On Demand service and
Mobile Karaoke. Through these offerings Celcom, has been able to capture a wide range
of customers with diverse lifestyles, from those within the corporate world to those who
just enjoyed singing.
And this is just the beginning. Celcom has plans to introduce many more exciting services
that will enable consumers to conduct various transactions over their mobiles, such as
buying canned drinks via SMS or even confirming if they are on the Jabatan
Pengangkutan Jalan’s (JPJ) blacklist.
Creating further personalised products and services, consumers will also soon be able to
download images to send to friends or to display on the phone, as well as download
ringtones, picture greetings and animations to add pizzazz to their messages.
084
Mobility
Solutions
Business professionals, meanwhile, can use their mobiles to receive SMS alerts on stock
prices; and corporations may use it as an additional platform to conduct marketing
promotions. The list of possible SMS usage is endless.
THE NEXT IN LINE
Expected to take centre stage as the evolutionary next step from the SMS is Multimedia
Annual Report 2003
Message Service (MMS), which is slated to be the next generation of messaging service.
In order to be realised, however, MMS requires GPRS bandwidth and will be available only
to those mobile users who have GPRS and MMS-enabled phones.
IDC forecasts that MMS users in the Asia Pacific region will grow by over 50% in 2004.
Following the history and success of SMS, however, it has been forecasted that MMS will
take another two years before it gains full mass appeal. Among some of the challenges
to its mass adoption, which apply equally to other trend-setting wireless solutions, are
global interoperability, roaming obstacles and the adoption of MMS-enabled handsets, i.e.
camera-enabled mobile phones.
HOW DIFFERENT IS MMS FROM SMS?
MMS, as its name suggests, allows for content-rich messages comprising a combination
of text, sounds, images and video to be sent to MMS-enabled mobile phones. Just like
the traditional short message service (SMS), multimedia messaging (sometimes also called
picture messaging) provides automatic and immediate delivery of personal messages.
Where MMS differs significantly from SMS is in its connectivity – with MMS, it is possible
not only to send your multimedia messages from one phone to another, but also from
phone to e-mail and vice versa. This revolution has bridged the wireless communication
gap, bringing a majority of devices together. In turn, it will result in a dramatic increase
in mobile communication possibilities, both for private and corporate use, especially for
those on the go.
Multimedia messaging reshapes the landscape of mobile communications, making it more
personal, more versatile and more expressive than ever before. It can, for example, send
a photo or picture postcard annotated with text and/or an audio clip, a synchronised
playback of audio, text, photo or, in the near future, a video emulating a free-running
presentation or a video clip.
A mobile phone that supports MMS is an amazingly versatile device. The ability to take,
edit and send images empowers mobile phone users in all areas of life, by enhancing
personal connectivity and efficiency.
In the workplace, it will be used as a powerful tool for both conveying and responding to
ideas and, coupled with Internet capabilities, serve as a virtual meeting room.
Although MMS encompasses a wide range of content types, it is a logical extension of
SMS, making it easily adoptable by today’s generation of mobile users. Another advantage
of MMS is that the message is a multimedia presentation in a single entry, not a text file
with attachments, making it much simpler and user-friendly. For example, photos taken on
MMS camera phones can be sent instantly to a web album on the Internet to be shared
by family and friends.
existing networks and protocols. The MMS standard supports various multimedia formats
such JPEG, GIF, text and AMR voice.
KNOCKING AT THE DOOR
Mobility solutions are already at our doorstep, knocking at the door for attention of the
mobile community. SMS and MMS offer a whole new world of services for consumers
and mobile network operators alike. However, these are just two of a larger base of
services offered by powerful wireless solutions that include Wi-Fi, Bluetooth, GPRS and
3G which will further bridge the gap between the wired and wireless world.
The whole nature of a handheld, mobile phone or a PDA with wireless voice and data
services is becoming more akin to a personal communication device, rather than just a
phone or personal organiser. At the same time, people are changing the way they
communicate from using predominantly audio cues to using visual cues in the form of
pictures and even videos. Phones have been transformed into complex and sophisticated
mobile devices with integrated and built-in cameras, PDA, MP3 players and video players,
all in one. Coupled with the current GPRS, they can reach any Internet content anytime
and anywhere they like.
The power and freedom of complete communication is now at mobile consumers’
fingertips, giving them the freedom to choose and live life to the fullest.
085
Like SMS, MMS is an open industry standard and MMS messages can be delivered using
We make your business our business except when it’s personal business.
Deadlines
S to c k s
B o t to m l i n e s
Clients
Meetings
088
Multimedia
Services
OPERATIONS REVIEW
Annual Report 2003
DATO’ BAHARUM SALLEH
TM NET SDN. BHD.
PERFORMANCE
2003 WAS A CHALLENGING YEAR FOR TM NET SDN. BHD.
(TM NET), ON THE BACK OF ITS STELLAR PERFORMANCE
IN 2002, WHEN IT OUTPERFORMED ALL EXPECTATIONS
BY CHALKING UP PROFITS WITHIN JUST SIX MONTHS OF
OPERATIONS. NEVERTHELESS, TM NET CONTINUED TO
CHART ITS GROWTH IN 2003. THANKS TO THE
BROADBAND SERVICE, TM NET HAD RAKED IN RM290
MILLION, IN TOTAL REVENUE FOR 2003.
TM Net’s other areas of business also registered
OPERATIONS
growth. The applications, content and prepaid sectors
Since launching its broadband tmnet streamyx in
grew by 99%, 405% and 133% respectively. This
2002, TM Net has built on this by enabling 221
augurs well for the coming year in terms of
exchanges, mostly in urban areas. More exchanges
broadening TM Net’s sources of revenue.
are expected to be commissioned. Initial delivery
constraints have been rectified by correcting measures
In 2003, TM Net’s subscriber base stood at 2.2
including the development and deployment of “pizza-
million. Of this, 1.7 million were from access
boxes” (a technology that enables broadband) for
services, while application and content services
those with fibre optic lines and wireless solutions in
accounted for 9,158 and 480,290 subscribers
areas exceeding the 5km coverage radius. As of
respectively. Subscribers enjoyed the privilege of
December 2003, TM Net through Telekom Malaysia
accessing some 303,817 contents via 20 channels on
had successfully deployed 200,000 broadband ports
www.bluehyppo.com and the variety of applications
throughout Malaysia.
introduced in 2003 such as e-Surveillance,
e-Supplychain and e-Voice.
In 2003, TM Net had launched several initiatives to
This included educational advertorials placed in local
million, the Company had registered a profit after tax
main newspapers and prime time broadcast
of RM7.7 million (profit before tax of RM7.4 million)
programmes like Jom Internet and Let’s Click on
out of which RM5.4 million originated from non-
local TV Stations, and more product information on
operating sources.
its website as well as on its bills. TM Net had also
089
increase Internet usage among the Malaysian public.
In 2003, with operating costs contained at RM288
participated in activities involving the public to
provide first-hand information on its services and
products to customers.
tmnet prepaid one card
offers you an exhilirating
Internet experience.
Of significance was, TM Net’s response to the call by
the Government to further reduce the price of
broadband service. The 30% reduction, which was
implemented on 1 November 2003, made TM Net’s
offerings among the most competitive in the world.
Broadband
The number of TM Net’s broadband subscribers
surged from 18,200 in 2002 to 101,107 in 2003. On
average, more than 20,000 streamyx applications
were received every month.
With the advent of radio frequency technology, TM Net
moved one step ahead in enabling broadband service
For the jetsetting customer, TM Net offers tmnet
anywhere, anytime. TM Net launched its wireless
global roaming, which provides broadband Internet at
Internet broadband connection facility, tmnet hotspot
over 3,000 hotspots in airports, hotels, convention
in February 2003. tmnet hotspot is available at popular
centres and cafés around the world via wired or
F&B outlets where Internet users can surf at speeds of
wireless connection. This service is available to all
up to 384kbps for as long as they want, provided they
tmnet 1515, 1525 and streamyx customers.
090
are
tmnet hotspot keeps you
connected anytime from
any location.
within
300m
of
an
access
point.
At the end of 2003, TM Net had expanded its hotspot
To support the traveling subscribers, TM Net
coverage to 164 locations nationwide, mainly in the
launched the wireless broadband Internet access
Klang Valley, Penang, Johor Bahru and Malacca. In the
through wireless local area network (WLAN) at
next phase of expansion, TM Net plans to cover banks,
various hotels nationwide. The hotel broadband
shopping malls, libraries, universities and colleges.
solution (HBS) offers hotel guests broadband
wireless in guestrooms and common areas as well as
function rooms and the ballroom. Pan Pacific was the
first hotel in the Klang Valley to make use of the
service which enables guests to secure Internet
connectivity at speeds up to 50 times faster than
dial-up connection. At end-2003, nine hotels
nationwide had taken up the HBS.
To expand its customer outreach, TM Net launched
Clickers, a one-stop service centre where customers
can access Internet, register for services and
purchase merchandise such as prepaid cards. All this
is done within a young, vibrant and dynamic café-like
atmosphere. The first Clickers was opened in July
2003 in Kelana Jaya, at the former House of Internet.
Following the success of tmnet Clickers, a second
outlet was opened in Pulau Pinang. TM Net intends
to introduce the concept to other major cities, namely
Johor Bahru, Kota Kinabalu, Kuching, Ipoh and
Kuantan.
To further improve its customer service, TM Net
produced a self-installation CD that helps customers
to install the software for tmnet streamyx themselves,
without having to rely on technicians. TM Net also
implemented a tmnet streamyx reseller programme
by appointing 104 companies as resellers nationwide.
These contributed to about 95% of total streamyx
registrations. In addition, TM Net also introduced
online applications.
Keep in touch via tmnet
hotspot.
TM Net’s broadband attractions lie not only in ease
of access, but also from the content available on the
Internet portal BlueHyppo (www.bluehyppo.com) which
offers 21 information-rich channels and 18 services.
In 2003, TM Net continued to promote the value of
It even has a service that allows Malaysians to enjoy
Internet access by making its prepaid products
real-time, on-demand video streaming services from
widely available and easy to reload. By the end of
more than 10 channels ranging from comedy, sports,
2003, TM Net had appointed 12 master resellers,
news, lifestyle, religious, documentaries from local
which established a nationwide network of agents,
television stations and two subscription based
hence, ensuring the accessibility and availability of
channels known as e-l@ne and Jadelane.
the prepaid products in the market. The inception of
prepaid products to grow significantly.
capacity for international transit with a total capacity
of 20 STM1 (Synchronous Transport Module 1);
In addition, TM Net and Maybank worked together to
(20x155Mbps) by year-end 2003. Increments in this
allow customers to reload their prepaid Internet
additional capacity is based on performance tracking,
access online. Reloading prepaid accounts via
as this is to ensure efficient surfing experience. For
Maybank2u.com.my or Maybank KawanKu ATM
this, TM Net has procured a network monitoring
machines is another means of reloading tmnet prepaid
system, which also enables it to detect any network
cards. Prior to this initiative, TM Net had already
problems in real time. The network monitoring
provided more reload centres via partnerships with,
system will be fully operational by mid 2004.
for example, Pos Malaysia, petrol stations, 7-Eleven
outlets, Kedai Telekom, Easyway kiosks and Clickers.
Service
To excite prepaid service subscribers, TM Net is
As part of its after sales service, TM Net has created
scheduled to offer an amalgamated prepaid service
a “flying squad” of technical experts tasked with
for tmnet hotspot, tmnet prepaid and Voice over
resolving any service related issue from hardware
Internet Protocol (VoIP) in 2004.
maintenance to faulty equipment. The flying squad is
dispatched upon receiving complaints – only to those
TM Net has also commenced its online billing, e-Bill,
related to TM Net services. The creation of the flying
beginning with its tmnet 1515 service. e-Bill is not
squad has greatly enhanced TM Net’s after sales
only sent to customers immediately via e-mail, it also
service and its ability to respond to customer-related
provides them with more detailed information about
problems speedily, while the service contractors help
their accounts, such as the date, time and duration
ease the customers’ access to technical experts
of their Internet connections and total call charges
whenever they have problems with their hardware.
for every successful connection made.
091
the resellers programme resulted in the sales of
To meet increasing demand, TM Net upgraded its
e-Learning content at their convenience from
anywhere in the world. Similarly, TM Net has moved
into other education facilities.
In 2003, TM Net promoted its communication
services in all sectors including voice over broadband
(Netmyne e-Voice), IP VPN (Internet Protocol Virtual
Private Network) and e-Surveillance. Netmyne e-Voice
offers reduced call rates on domestic long distance
(STD) calls, international (IDD) calls, and long
distance mobile calls to corporate organisations. The
IP VPN solution enables customers to access remote
sites over their corporate networks with appropriate
security policies, while Netmyne e-Surveillance
enables customers to get real-time video surveillance
Broadband solutions for hotels
launched by Tan Sri Nuraizah,
Chairman MCMC.
by using broadband Internet access and the web
browser. Netmyne e-Surveillance was first launched
Serving Businesses and Organisations
To keep up with globalisation, high-speed Internet
connectivity has become a necessity for business
092
users. Realising that, TM Net offers broadband to
businesses and organisations and develops affordable
broadband applications to support the growth of
SMEs.
TM Net has even created specific solutions for
manufacturers, such as e-Supplychain which combines
its expertise with that of partners DELL and B-Global
to manage the entire supply chain of business
transactions from manufacturers to the community of
vendors, logistics partners and other SMEs. The
service was jointly marketed as a packaged service of
TM Net to Dell suppliers within Malaysia and its
neighbouring countries but is expected soon to
include suppliers of other manufacturers.
Another TM Net initiative in 2003 was to promote
broadband service in the education sector. In March
2003, TM Net and Inti Universal Holdings Bhd.
signed a deal to provide high-speed Internet access
to students and staff of Inti’s Group of colleges. The
deal included unified communication services and
campus short messaging services. Such facilities
create an e-Community that improves communication
and interaction as well as enables students to access
in Malacca, with the State Government as the first
customer.
As a strong supporter of growing a knowledge
society (K-Society), TM Net is honoured by its
appointment as one of the two operators for the
Malaysian Internet Exchange (MIX), a governmentinitiated project led by the Ministry of Energy,
Communications and Multimedia that aims to
connect all Internet service providers in Malaysia
through a common local backbone. With the
exchange, users will enjoy faster access to local
content, higher security and better quality and
performance of local content. Most importantly, MIX
will significantly reduce leased line costs and the
need for excessive international bandwidth.
TM Net includes all its strengths in providing the
best data centre service in the nation. As such, TM
Net had launched two new data centres in Penang
and Johor Bahru in addition to the existing five data
centres in the Klang Valley. The new data centres
offer customers of the northern and southern regions
the physical and technical environment affording the
reliability and flexibility necessary to outsource their
mission-critical Internet operations.
TM Net had taken the opportunity to work with TV3
the Cyber School project. In addition to that, a
in the 2003 Sure Heboh Carnival, which was first
portion of the proceeds, raised from the charity golf
introduced to the public by TV3. Through this ground
series was channeled to Majlis Kanser Nasional
activity, TM Net managed to reach out to more than
(MAKNA) to support treatment for patients suffering
two million visitors and gave first hand information
from cancer.
and demonstrations on its products and services
while enhancing its brand image.
PROSPECTS
Having introduced attractive cost-effective and
Social Responsibility
efficient services such as broadband, VoIP and IP
While growing its business, TM Net does not forget
VPN, TM Net is confident the Malaysian public will
the less fortunate members of the society such as
appreciate that the Internet is quickly becoming a
schools without access to Internet and those
major communication tool of the future.
suffering from cancer. TM Net initiated a project to
raise funds for the needy.
In the coming year, TM Net will expand its
being a content aggregator for online and cellular, TM
Charity Golf Classic. In March 2003, TM Net started
Net will continue to increase tmnet streamyx
the first leg of the TM Net Charity Golf Classic series
availability and introduce other services such as
at Kelab Golf Sultan Abdul Aziz Shah, Shah Alam.
multimedia messaging services (MMS), video-on
The remaining 6 legs took place in Kulim, Nilai,
demand (VOD), interactive video streaming and other
Johor Bahru, Kuala Terengganu, Kota Kinabalu and
value added services be it for consumers or
Subang Jaya. The golf series raised funds for the
businesses.
Cyber School community project – the adoption of
needy schools from every state nationwide, especially
Given that TM Net has seen 19% growth for 2003,
from rural areas, to be equipped with computers
we are bullish for year 2004 based on the demand
connected via tmnet streamyx. The Charity Golf
for broadband, cheaper access services and greater
Classic was successful and it enabled TM Net to
acceptance of new services.
contribute computers with broadband connectivity to
INTI College goes broadband with TM Net’s Total Integrated Broadband Internet Solutions.
093
applications, contents and services. In addition to
In this regard, TM Net initiated its inaugural TM Net
THE FUTURE IS HIGH SPEED
It is 6.00 a.m. on a cool Wednesday morning, and you wake up to the kaleidoscopic colours and sounds
of your favourite artistes from around the world. Your new wake-up system pipes in the latest songs
and videos online, matched to your own taste, right onto your bedroom wall. As you set about with
your morning toilet, the corner of your bathroom mirror flickers with news feeds compiled from six news
stations worldwide, giving you only the news you want. The LCD on your cupboard door lists out today’s
recommended attire, with colour and styling options, based on the schedule on your online diary.
All these were the domain of science fiction a mere 10 years ago. Yet, the services described are within
the capabilities of existing technology, and may yet be delivered to us within the next five to 10 years.
While the technology may seem impressive in its wide-ranging applications, there is one common
denominator behind it all – broadband connectivity.
094
The World of
Broadband
Annual Report 2003
Malaysian broadband is currently defined as Internet access of
more than 128 kbps, with 512 kbps fast becoming popular. 384
kbps is about seven times faster than the old dial-up Internet
connection. This means that a music file that used to take two
hours to download will now take only about 15-20 minutes.
This is most significant because, eventually, an entire generation
of people will grow up with broadband access, much like the
generation of people who grew up with the Internet and mobile
phones; the generation who grew up with colour TV; and the
generation who grew up with telephones.
Broadband brings to people more sophisticated and bandwidthhungry applications of the Internet. This includes video,
multimedia applications, games, entertainment and the
transmission of large files.
Broadband access will then become a commodity, a necessary
tool for fast, convenient communications, entertainment and
work. It is not too far fetched to expect all Internet access of the
near future to be via broadband. Broadband will be something
people can take for granted.
By and large, the high demand for broadband is due to two
principle features: high-speed and constant (i.e. “always-on”)
connection. These, coupled with flat rate offerings by services
such as tmnet streamyx, enable Internet users to access richer
interactive content and applications online.
While the majority of households with broadband are currently
higher-income urbanites, this does not skew the demographics of
Malaysian broadband users towards people over 40. Experience
has shown that more than half of all Malaysian Internet users are
below 25, and this appears to be true for broadband as well.
Children of these households are also heavy users of broadband.
In the past year, Malaysian broadband experienced tremendous
growth. TM Net alone installed more than 100,000 broadband
connections under its Digital Subscriber Lines (DSL) service.
Complementing these fixed line services, more than 200 locations
were enabled with wireless Internet access via Wi-Fi.
On the back of this high-speed connectivity, content and
application providers have been producing increasingly
sophisticated and rich content and applications to fit the demands
of the broadband Internet user.
Video applications such as video-on-demand and video
monitoring are also growing rapidly. At Bluehyppo.com, TM Net’s
portal, users can access 15 different video channels covering
various topics from sitcoms to fashion to sports.
In fact, Bluehyppo.com is in the midst of transforming into a true
broadband portal. While the needs of narrowband users must still
be met, Bluehyppo is ready for the eventual migration of all
Internet users to broadband.
Having just finished a tough video meeting with partners in five
countries, you check on your daughter at home. She is down with
the flu and you are glad to see that she is resting well in her
room, with her favourite blue teddy bear wrapped in her arms.
At any rate, you can be quickly in touch with the doctor via video
phone at any time.
Globally, it is proven that Internet users will spend more time
doing more things online with faster access speed. This positive
correlation between bandwidth and usage is also true in Malaysia.
The key factor here is time spent online. Experience shows that
an Internet user who would normally be online for one hour a day
on the old dial-up narrowband connection will spend 50% more
time online with broadband. With the decrease in broadband prices,
this online time is likely to increase even further, and average
usage would probably be more than double that of dial-up.
Indeed, given the relatively short duration from now to year 2020,
the proliferation of broadband can be seen as a necessary
prerequisite for realising Vision 2020.
The possibilities are as exciting as they are promising. Fixed
broadband connectivity will be even more pervasive as networks
stabilise and technology extends the range and capacity of
networks. Wireless broadband will become truly viable, providing
always-on high-speed connectivity for people on the move.
The proliferation of IPv6 and MPEG4 standards will allow even
richer content and applications to be delivered via broadband.
These new standards effectively help deliver multiple-folds of
content over the same bandwidth, enabling content and application
developers to deliver highly sophisticated offerings online.
And all this is within reach in the near future with broadband.
On the way back from work, you receive a call from your cousin,
who is a farmer. He is inviting you to his graduation ceremony.
He has been studying for a degree in agriculture management
with an accredited university, which he performed online, attending
virtual classes and doing assignments even while out on the field!
He had discovered this educational opportunity while video chatting
on the Malaysian farmers e-community portal. Now, he happily
tells you, other than receiving valuable information and buying
and selling over the portal, it has actually led him to a degree.
Internet = broadband. That is the future. And that future is not far
off. Worldwide, it is expected that the majority of Internet users
will be on dial-up until 2006. After which most will switch to
broadband. The switch in Malaysia is expected to happen soon
after in fact, anytime before 2008. However, considering that
Malaysian demand could be as high as 50% of Internet subscribers,
the switch is likely to happen sooner rather than later.
What is significant is that broadband access engenders the habit
to be online. Eventually, it will become second nature, and going
online will be as commonplace as making a phone call. This is
significant because it would make the more serious and powerful
online applications more readily acceptable to users. This includes
e-commerce, e-banking, e-learning and other such classes of
applications.
This switch to broadband, wired or wireless, will be a milestone
in the annals of Malaysian history. Because, soon after, the critical
mass of powerful e-government, education and other key
applications will be achieved. And the vision of a connected
knowledge society will become a “virtual” reality.
One of the most important measures of (indeed, a prerequisite
for) success for any of these applications is a certain critical
mass of people using them. The natural progression of heavier
usage encouraged by broadband would likely lead to this critical
mass. In this sense, the proliferation of broadband directly
contributes to the acceptance of online tools necessary to make
the e-government ideal a reality. This in turn will boost the
country’s aspiration of becoming a wired knowledge economy.
After dinner, you order the latest movie featuring your favourite
star. As you watch the movie, you are able to discover some
interesting background details by calling up the interactive
information blurbs. Before you go to bed, you double-check
tomorrow’s schedule on your online diary, just to make sure. You
settle into bed with a starry night sky mosaic on your ceiling, the
video fed live from the National Park. Another day done good,
another day of opportunities tomorrow.
At TM Net, we are now crafting this milestone.
095
Massive Multiplayer Online Games (MMOG) blossomed worldwide
with unprecedented growth, attracting millions of users. It is no
secret that broadband fuelled this growth, as these impressive
games are rich in audio and graphics and are thus bandwidthhungry. South Korea, which emerged as the world’s number one
MMOG market, also has the world’s number one broadband
penetration rate.
Our international presence realises new possibilities for millions worldwide.
U n i te d K i n g d o m
U n i te d S ta te s o f A m e r i c a
H o n g Ko n g
Thailand
Cambodia
Bangladesh
S i n g a p o re
Guinea
S r i L a n ka
Malawi
South Africa
098
International
Operations
OPERATIONS REVIEW
Annual Report 2003
CHRISTIAN DE FARIA
PERFORMANCE
AS TELEKOM MALAYSIA’S VEHICLE OVERSEEING AND
MANAGING ITS FOREIGN VENTURES, TM INTERNATIONAL
SDN. BHD. (TM INTERNATIONAL) ASPIRES TO BE AN
ESTABLISHED, WELL-RECOGNISED, SELF-SUPPORTING
AND PROFITABLE COMPANY THAT SERVES AS THE
FLAGSHIP
FOR
INVESTMENTS.
THE
GROUP’S
INTERNATIONAL
In the financial year ended 31 December 2003,
International Direct Dialling (IDD) calls. A direct
Telekom Malaysia’s overseas investments contributed
consequence of this has been the award of an
approximately 28.76% to the Group’s profit after tax
international gateway operator licence to MTN,
or RM399.85 million, compared to RM137 million the
thereby facilitating Dialog’s IDD services through its
previous year. This is an increase of 192%,
own gateway.
compared to 73% the previous year. With cellular
services serving as the cornerstone of its
Apart from the launch of international services, 2003
investments, TM International’s presence in South
also witnessed MTN building on its unassailable
Africa, Guinea, Malawi, Bangladesh, Sri Lanka and
competitive advantage with respect to product and
Cambodia provided access to a cellular subscriber
service delivery. Numerous new value-added services
base of some 11 million as at end 2003.
for existing customers such as GPRS roaming (in 18
countries covering 25 operators), video streaming
Having had its origins in the International Ventures
and dual SIM (prepaid and postpaid) Information On
Division, TM International has today made the
Demand were offered. At the same time, the
successful transition from an operating division to a
Company also enhanced its service levels using
wholly-owned subsidiary of Telekom Malaysia. In this
various tools, such as automated service registration
regard, the restructuring exercise undertaken the
(using SMA and IVR) and Dialog Buzz, the mobile
previous year aimed at consolidating all international
customer service centre.
ventures under TM International continued unabated
into 2003.
MTN also successfully garnered the international
2003 for “Best Use of Wireless for Emergency
OPERATIONS
Situations”. In 2003, the Company also established
MTN NETWORKS (PRIVATE) LIMITED (MTN)
two new branches in the North and East, previously
As Telekom Malaysia’s pioneer international
strife-torn areas.
investment, MTN was initially set up in Sri Lanka in
1995 to provide GSM cellular service on the 900 Mhz
frequency band, under an 18-year licence valid until
TM INTERNATIONAL (BANGLADESH) LIMITED (TMIB)
2013. Under the brand name Dialog GSM, the
TMIB was established in 1997 as a joint venture
network is also Sri Lanka’s pioneer digital cellular
company between AK Khan & Co (a leading
network. As at end 2003, it had a subscriber base in
Bangladesh business group) and Telekom Malaysia.
excess of 830,000 involving investments of some
The Company operates a GSM cellular service on the
US$72.6 million (some RM257 million) to date. This
900 Mhz frequency band, under a 15-year licence. As
subscriber base is supported by over 370 base
at end 2003, the net customer base stood at 401,680
stations and international roaming facilities with 302
subscribers, representing a market share of 22%.
operators in 177 countries.
This comprises some 144,151 postpaid and 257,529
prepaid customers.
A key development on the cellular side of MTN’s
business in 2003 has been the roll-out of the GSM
dual band network on the 1800 frequency band. Yet
another key development in the Sri Lankan market in
2003 has been its liberalisation, marking the end of
incumbent Sri Lanka Telecom’s monopoly on
099
GSM Award for a record third consecutive year in
100
Telkom SA’s listing debut on the New York Stock Exchange.
A major milestone of 2003 was the addition of some
TELKOM SA LIMITED (TSA)
245,670 customers to the subscriber base, an increase
Telekom Malaysia’s 12% effective holding in TSA is
of 192% over the previous year. TMIB’s network
by far its largest foreign investment. The stake is
coverage, has also been progressively growing and
held via Thintana Communications LLC, a partnership
as at end December 2003, 53 out of 64 districts in
between Telekom Malaysia and US-based SBC
Bangladesh have been covered, involving a total of
International Inc. As strategic equity partners, the two
369 base stations.
companies jointly hold a 30% stake in TSA. TSA also
owns 50% of Vodacom, the leading cellular operator
Customer acquisition and network expansion aside,
in South Africa.
the product and service delivery aspects of the
Company have also seen active inroads in 2003.
The ending of TSA’s five-year exclusivity in May 2002
Various packages for both prepaid and postpaid
was preceded by a single-minded pursuit of an
continued to be rolled out. Two key developments,
extensive business transformation process in
namely the acquisition of a nationwide ISP licence, as
strategic preparation for competition. This culminated
well the Bangladeshi Government’s decision to
in TSA’s listing on both the Johannesburg Stock
liberalise the provision of VoIP services, have opened
Exchange (JSE) and New York Stock Exchange
up possibilities for TMIB’s future operations. TMIB is
(NYSE) in March 2003. As a result of the IPO, the
exploring the possibility of maximising both these
current shareholding structure is made up of 39.3%
opportunities in the coming years.
with the Government of South Africa, 30% with
Thintana and a free float of 30.7%. The share price
has performed impressively well, with the original
listing price of ZAR28 per share rising to a high of
ZAR72.9 at end 2003.
Overall, 2003 was a good year for TSA in terms of
Samart I-Mobile, a 68.5% subsidiary of SAMART,
financial performance despite the global and South
underwent a successful IPO exercise in December
African economic environment. Group revenue,
2003, with listing on the Stock Exchange of Thailand.
operating profit and operating cash flow saw strong
A total of 110 million ordinary shares of par value Baht
growth. A positive albeit smaller growth in the core
1 were sold at an initial price of Baht 11 per share.
fixed line revenue was matched by significant cost
savings in the fixed line business and a strong
contribution from the Vodacom mobile business.
TELEKOM NETWORKS MALAWI LIMITED (TNM)
TNM was established in 1996 as a joint venture
TSA and the market as a whole had responded to
between
certain key developments designed to meet the
Telecommunications Ltd. (MTL), the Government-
Telekom
Malaysia
and
Malawi
Government’s aspiration for increased liberalisation
owned incumbent, with Telekom Malaysia holding
and competition in the industry. These include the
60% equity and MTL the other 40%. TNM operates a
call for bids for a second network operator (SNO)
GSM service under a licence valid until 2014.
as the initiation of convergence policy development.
After eight years of operations, TNM has emerged as
Despite these challenges, the Company fared well in
the leading cellular service provider in Malawi, with a
a 2003 “Top Brand Survey”. It was voted the top
customer base of 62,000 as at end 2003, an increase
telecommunications provider, the second-most
of some 80% over the previous year. The Company
admired company in South Africa (after Coca Cola),
has commanded a 57% market share since 2001 in
and the company which has done the most to uplift
what has become an increasingly competitive market.
the lives of South Africans.
SAMART CORPORATION PUBLIC COMPANY LTD.
(SAMART)
Public-listed SAMART, in which Telekom Malaysia has
a 19.59% stake as at end 2003, provides a wide
range of value-added telecommunications services
including the manufacture and distribution of
telecommunications equipment such as TV antennas
and satellite dishes in Thailand.
In end September 2003, the Company successfully
completed its debt restructuring exercise under which
debts, obligations and commitments estimated at
Baht 6.5 billion were reduced to some Baht 2.35
billion. This generated a gain on debt restructuring
amounting to Baht 1.65 billion plus removal of all
obligations and commitments.
Other key developments in 2003 saw the whollyowned subsidiary Samart Comtech participating as a
key member of the consortium ASIS, which won the
Airport Information Management System (AIMS)
project for the new Bangkok airport. The project is
valued at some Baht 2.3 billion.
101
licence for under service area licences (USAL) as well
The growing subscriber base is supported by a new
Consumers benefited from some key pricing
prepaid intelligent network system successfully
decisions taken during 2003 which included a 50%
migrated in October 2003. Apart from new capabilities,
discount on the subscription and rental fee for
the new prepaid system has an increased capacity able
Internet service, a lowering to GNF 25,000. The
to cater for 100,000 subscribers from the present
timing of GSM usage was also changed from one-
45,000. The TNM network is currently supported by
minute blocks to 30-second blocks.
some 58 base stations and in July 2003, an additional
international link was established via Very Small
Aperture Terminal (VSAT) through Telekom Malaysia to
CAMBODIA SAMART COMMUNICATION CO. LTD.
harvest calls from the Asian region.
(CASACOM)
CASACOM which started commercial operations in
102
1999 is the latest among Telekom Malaysia’s foreign
SOCIETE DES TELECOMMUNICATIONS DE GUINEE
investments, providing services on the GSM 900 and
(SOTELGUI s.a.)
NMT 900 Mhz frequency bands in Cambodia. Telekom
Sotelgui s.a., formed out of a strategic partnership
Malaysia holds a 51% stake in the venture while the
with the Government of Guinea provides both fixed
remaining 49% is held by SAMART Corp. CASACOM
and cellular services in this West Africa country.
operates under a 35-year cellular concession
Telekom Malaysia holds a 60% stake in Sotelgui s.a.
commencing 1996 from the Ministry of Posts and
while the Guinea Government owns the remaining
Telecommunications. It is currently the second
40%.
largest cellular operator in Cambodia.
For Sotelgui s.a., 2003 was marked by important
infrastructural achievements, with GSM being deployed
in 19 towns in the provinces. The overall customer
base (fixed and cellular) at end 2003 stood at
111,004. New projects in Internet and prepaid fixed
(Ezeephone) were also initiated, while rehabilitation
and extension of the cable network continued to be a
high priority for the Company.
Chairman, Telekom Malaysia plays host
to overseas visitors at Menara Telekom.
Operating under the brand name “Hello”, CASACOM
Another strategic thrust for TM International is to
enjoyed first mover advantage in 2003 on new
assist in creating value for the Telekom Malaysia
services such as General Packet Radio Services
Group. In this regard, the Company plans to identify
(GPRS), Multimedia Messaging Service (MMS) and
and deploy products already available within the
various content services. With a base of 85,339 GSM
Group to be used in various ventures abroad. With
subscribers, the Company marked 2003 with a
its established presence in Asia and Africa, TM
marketing strategy that emphasised a good quality
International is well positioned to bring business
network, nationwide coverage, competitive pricing,
back to the Group through its hubbing activities and
extensive international roaming and the establishment
usage of its global infrastructure. Plans are also afoot
of a one-stop centre for telecommunications services.
for TM International to be the international retail and
marketing agent for home-grown products and
services.
PROSPECTS
Going forward, TM International plans to adopt
TM International also intends to pursue cost efficiency
strategies and initiatives which mitigate the downward
in procurement. Its Global Procurement initiative is
profit pressure in the domestic market as well as
aimed at standardising network equipment and
increase Telekom Malaysia’s profile in the regional
systems, so as to ensure cost efficiency over the
marketplace. In this regard, strengthening its core
long run and to offer value services to customers.
business becomes a key strategic thrust and TM
International aims to secure three new core investments
be given on growing the existing businesses in
Sri Lanka and Bangladesh through rapid network
expansion and enhanced service offerings. TM
International will also seek to integrate the licences
and operations owned by Celcom in Bangladesh.
103
over the next three years. In addition, emphasis will
We’re upgrading our customer service and infrastructure.
So you have less worry, less stress and more zen.
Peace
of
mind
106
Facilities
Management
OPERATIONS REVIEW
Annual Report 2003
HAMZAH YACOB
PERFORMANCE
SINCE ITS INCEPTION IN JANUARY 2002, TM FACILITIES
SDN. BHD. (TM FACILITIES) HAS MANAGED THE NONCORE BUSINESSES OF TELEKOM MALAYSIA, NAMELY ITS
STRATEGIC BUSINESS UNITS (TELEKOM MALAYSIA SBUs)
OF MALAYSIAN LOGISTICS, MALAYSIAN SECURITY,
FACILITIES MANAGEMENT & INFRASTRUCTURE
DEVELOPMENT, PROPERTY DEVELOPMENT & CONSULTANCY
AND FLEET MANAGEMENT. TM FACILITIES CONTINUOUSLY
EXPLORES NEW BUSINESS MODELS AND OPTIONS TO
ENHANCE THE NICHE AREAS OF EXPERTISE OF EACH
SBU IN ORDER TO TRANSFORM IT INTO A FULL-FLEDGED
BUSINESS ENTITY.
In 2003, the five Telekom Malaysia SBUs generated a
added service are Shapadu Linfox and Shell Gas. For
total revenue of RM355.5 million from both internal
the past few years, Shell Gas has stationed its central
and external sources, an increase of 2% over the
LPG storage facilities in ML warehouses in Prai,
previous year. Profit before interest and taxation was
Melaka, Kuantan and Alor Star. The partnership with
at RM34.6 million. This is the second successive
Shell Gas has been so successful that the petroleum
year, Telekom Malaysia SBUs had recorded profits.
company is very keen to open up new storage centres
As a countermeasure against economic uncertainties,
at ML sites in Johor Bahru and Sandakan, Sabah.
concerted efforts were made to retain businesses
while costs were managed and contained.
ML intends to diversify its business by introducing
new services such as document storage and retrieval
as well as public warehousing.
OPERATIONS
Malaysian Logistics
Malaysian Logistics (ML) provides total logistics and
Malaysian Security
related support services to Telekom Malaysia and its
Malaysian Security (MS) is responsible for
subsidiaries. Its services comprise mainly of traffic
safeguarding Telekom Malaysia’s assets, resources
and transportation, warehousing, scrap management,
and personnel. This role has assumed greater
contracts management and liaison with the Customs
importance today with the ever-increasing challenges
Department. With a network of warehouses located
faced by security and safety services.
of scale to take on the role of a total logistics
MS’ main activity is to provide armed and unarmed
solution provider for Telekom Malaysia as well as
security guards for high-risk areas such as exchanges,
external customers.
earth satellite stations, submarine cables stations, hill
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around the nation, ML has the capacity and economies
stations, office buildings, business centres and other
Apart from Telekom Malaysia, ML rents out idle land
government gazetted key installations that fall under
or extra space in warehouses to external customers
Arahan Tetap Sasaran Penting Negara.
in its efforts to generate additional income. Among
the external parties that have made use of this value
Looking out from Menara
Telekom’s spacious and
gleaming lobby.
MS also provides value added services such as
investigation, security for cash-in-transit, crime
prevention patrol, night vaulting and patrolling of
optical fibre routes as well as overhead and
underground cables. Due to the prevalent threat of
terrorism, MS also provides specialised security
audits and conducts security awareness and
preventive programmes.
To reduce its overheads, a pilot study was
undertaken on remote surveillance systems which
can be managed from a centralised control unit
hence reducing the need for security personnel
onsite.
better serve Telekom Malaysia as well as to capture
more external business. A pilot study on property
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management as well as operations and maintenance
Facilities Management and Infrastructure Development
functions will be carried out on a model building,
Facilities Management & Infrastructure Development
such as Menara Telekom, with the objective of
(FMID) is responsible for the management, operations
acquiring world-class standards. For benchmarking
and maintenance of all Telekom Malaysia buildings,
purposes, a visit to Telkom SA was made recently to
facilities and installations. It provides electrical,
experience firsthand the high standard of building
mechanical and civil engineering services as well as
management practised by the company.
commercial building maintenance to the Group.
Besides internal revenue from Telekom Malaysia,
While it has previously outsourced some of its key
FMID expects to generate external cash revenue from
functions to third parties, FMID has made its mission
Celcom through the provision of mechanical &
to be more self-reliant – either by teaming up with a
electrical and battery rectifiers maintenance services
reputable international Comprehensive Facilities
as well as infrastructure development. To enhance
Management (CFM) company or by becoming a CFM
quality and accountability, FMID is making an effort
contractor itself. This approach is to enable it to
to save on energy by retrofitting certain systems.
Meanwhile, a Customer Service Management System
was introduced to reduce the time between receiving
a docket/work order and delivery of the product or
service by vendors/contractors.
Property Development and Consultancy
Property Development & Consultancy (PDC) is
responsible for identifying and unlocking the value of
idle land banks belonging to Telekom Malaysia. PDC
hopes to develop these plots of land via joint
ventures or by appointing a joint land development
partner. PDC is also responsible for managing TM
TelCo’s infrastructure projects and for property land
administration of all Telekom Malaysia assets.
Always at your service –
Malaysian Security.
Fleet Management
The Fleet Management (FM) unit oversees the entire
Telekom Malaysia fleet of about 7,000 vehicles. It is
the only entity in the country that manages such a
large number of utility vehicles. FM’s principal activities
include vehicle maintenance and repair, licensing and
permits, insurance and claims as well as the
purchase of new vehicles and sale of used vehicles.
In year 2003, RM35 million was allocated to procure
new utility vehicles and cars to replace those which
are beyond economic maintenance of which more
than half are above 10 years old. Although the
allocation is not sufficient to replace all the vehicles
that merit replacement, the new vehicles will shore
up the overall quality of the fleet and reduce
maintenance costs. FM managed to secure RM5.6
million in revenue from the sale of scrap vehicles.
As part of its value added services, FM has
complete with coin collection boxes – for the
Payphone division; and also provided a canopy for
vehicles under the Customer Network Operations
(CNO) group.
In addition to its maiden development project in Ijok,
The management has proposed that FM continues to
Kuala Selangor, PDC is also embarking on projects in
serve Telekom Malaysia as an SBU under TM Facilities.
other parts of the Klang Valley. PDC expects to
However, to further tap external business opportunities,
generate RM3.50 million in revenue, or 1% of the
it is proposed that the company could become a
total sales development value of RM357 million for
Telekom Malaysia subsidiary by entering into a joint
the land bank earmarked for development over the
venture or smart partnership with a third party.
next five years. In another positive development,
Telekom Malaysia’s decision to transfer additional
For its role in overseeing and managing the five SBUs,
land to TM Facilities will give PDC’s development
TM Facilities received RM6.8 million in management
efforts a boost.
fees from Telekom Malaysia. Profit after tax was at
RM2.6 million.
Apart from being the ‘custodian’ of all Telekom
Malaysia assets, the Property Land Administration
unit under PDC also acts as an intermediary with all
PROSPECTS
land offices and local authorities, collecting rental
In the year 2004, TM Facilities hopes to evolve some
and managing the payment of property taxes (leased
of the five SBUs into business entities via joint
rentals, quit rent and assessment fees).
ventures or smart partnerships with third parties.
This would help further develop Telekom Malaysia’s
non-core businesses with the view of enhancing
shareholder value.
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successfully installed custom-designed vans –
Choose your workplace and video conference across continents
from your PC, PDA or mobile.
To h e re
F ro m t h e re
Other Subsidiary
VADS BERHAD
VADS has always strived for the highest levels of
VADS Berhad (VADS), a company listed in the
professionalism in meeting global service standards.
Malaysia Securities Exchange Berhad (MSEB), has,
The Company is optimistic of the growth potential in
for the past 12 years, shown a track record of
this business and one of the commitments is to
continued revenue growth. In 2003, VADS achieved a
achieve Cisco’s Silver Partner Certification Program in
full year’s revenue of RM151.3 million and a 12-
2004. This achievement would reflect a milestone of
month profit before tax of RM14.7 million, 8% higher
the years of dedication and sacrifices in putting in
than the preceding year’s profit before tax of RM13.6
place the right resources and infrastructure to
million. This was the direct result of our consistent
support the business.
and uncompromising focus on achieving profitable
growth through a value proposition of quality in
terms of our brand, network, customer services,
VADS e-Services Sdn. Bhd.
products and services, distribution, financial
VADS e-Services Sdn. Bhd. (e-Services) will focus on
management and workforce.
Contact Centre Services (CCS) provisioning in both
112
customer implementation and outsourcing projects.
e-Services is committed to provide end-to-end
Managed Network Services (MNS)
outsourcing for CCS via total management and
The Group’s principal activity lies in the provision of
customer care for corporations and enterprises.
international and national managed network services
to businesses and organisations. Revenue from the
Partnering with Teletech, a leading global provider of
MNS division was evenly spread across the
CRM services and solutions, e-Services is equipped
international and national sales network, contributing
with the means of providing world-standard customer
85% to the Group’s total turnover.
care services and technical support for the customer
management centres of large companies here in
With the proceeds from the Initial Public Offering
Malaysia.
(IPO), VADS continued to invest in the state-of-theart IP VPN service branded as VADS PREMIER. In
The CCS facilities and infrastructure are built
the year under review, VADS signed an agreement
according to International Asia Call Center Industry
with AT&T Global Network (AGN) to deliver
(ACCI) standards with CSR workstations, Quality
Multiprotocol Label Switching (MPLS) networking
assurance rooms: conference rooms, training rooms,
services to companies internationally. Under this
meeting rooms, client rooms, staff facilities, 24x7
agreement, VADS is appointed as AGN’s managed
Security, Data center: racks, generators, UPS and
service provider in Malaysia to deliver AGN’s portfolio
Internet Security features.
of global managed networking services. The
collaboration enables VADS to become part of AT&T’s
VADS e-Services will continue to develop
world class state-of-the-art global network.
comprehensive solutions encompassing technology,
process management and innovative resource
management to add value to our customer offerings
as more corporations and enterprises are realising
the benefits of outsourcing their contact centres.
With the two-pronged objective of maintaining focus
on their core business and improving customer
relations, e-Services CCS is set to carve a niche in
Malaysia’s IT outsourcing market.
VADS Solutions Sdn. Bhd.
VADS Solutions Sdn. Bhd., a wholly owned subsidiary
Total Integrated
Software, Turnkey
and Business
Application
Solutions from
VADS.
of VADS specializes in IT systems integration. VADS
Solutions main business focus is in the software
development turnkey projects, where applications are
customized to meet particular requirements. Some of
the projects undertaken by VADS Solutions include
billing and customer care applications; project
In the third quarter of 2003, Fiberail embarked on a
management systems; messaging and collaboration;
restructuring campaign to achieve business
and business intelligence systems.
excellence and to sustain a competitive edge while
migration to ISO9001:2001 has motivated the
Solutions offers Business Intelligence or Data
company to expand its services and to venture
Warehousing solutions, Groupware solutions, Project
outside the KTMB corridor, targeting in particular,
and Document Management solutions. The Company
townships along the East West highway.
also provides IT infrastructure support, management
services and other e-related services through
Maintaining its leadership position in the digital
our highly skilled professionals using proven
telecommunications business, Fiberail has completed
methodologies.
the installation of a 22-station microwave link
network for Celcom and will complete the installation
of a second fibre cable system by the end of 2004.
FIBERAIL SDN. BHD.
Fiberail Sdn. Bhd. (Fiberail) was formed in 1992 as a
A new Operational Control Centre is in the process of
joint venture between Telekom Malaysia and Keretapi
being built and is expected to be completed by
Tanah Melayu Berhad (KTMB), to provide
February 2004. The centre will coordinate all
telecommunications network related services utilising
responses to customers’ needs and requests to
fibre optic cables along the railway corridor. To date,
provide streamlined customer services and thus
the company has installed a 1,600km fibre optics
enhance the image of Fiberail. The Operational
cable along the KTMB railway corridor, thus providing
Control Centre will also function as a co-hosting site
broadband connectivity to all major towns in
for customers.
Peninsular Malaysia.
The Company recorded a pre-tax profit of RM17.39
Fiberail’s core products and services include flexible
million in 2003 compared to RM20.14 million in
leased fibre optics packages, broadband services and
2002. At the same time, the Company has maintained
total business solutions. The Company also offers
a commendable financial standing, with net tangible
ancillary services such as telecommunications tower
assets improving from RM8.25 per share in 2002 to
space and equipment cabin space. Consultancy
RM8.55 per share during the year under review.
services and co-location services have also been
introduced to cater to customer demand in various
In 2004, Fiberail will focus on the realignment of its
industries.
business planning and marketing strategies to realise
its corporate goals and objectives.
113
facing the challenges of globalisation. Its successful
Under its knowledge management services, VADS
Year 2003 saw the commencement and completion
of Phase 1 of the Telekom Malaysia National
Operations Centre project with a value at RM12
million. Meganet has also completed installing the IT
infrastructure (campus network & ICT peripherals)
for the Polytechnic Port Dickson, Polytechnic Sabak
Bernam and UiTM Seberang Prai. The combined
value of the three projects was more than RM15
million. Since commencing business operations in
1997, Meganet has executed a string of IBS and ICT
related projects with a total cumulative revenue in
access of RM300 million.
Revenue for 2003 amounted to RM33.3 million with
Meganet Communications –
bringing you integrated
telecommunication and IT
Solutions.
MEGANET COMMUNICATIONS
SDN. BHD.
Meganet Communications Sdn. Bhd. (Meganet) was
incorporated as a business subsidiary of Telekom
Malaysia on 6 October 1995. It became fully operational
on 1 July 1997, as a joint venture between Telekom
114
Malaysia and Nippon Telegraph & Telephone Japan,
with equity holdings of 70% and 30% respectively.
a net profit of RM1.9 million.
With zeal and enthusiasm derived from the company’s
vision and mission, Meganet will utilise and deploy
all its resources to penetrate deeper into the IBS and
ICT markets. Given the profound knowledge and
expertise of its professionals and the skills and
capability of all its employees, the company is confident
of generating greater revenue in the near future.
Meganet was established to cater to the needs of a
diverse and multi-faceted IT-based industry, focusing on
intelligent building systems (IBS) consultancy, integrated
telecommunications and information technology
solutions as well as multimedia applications.
Meganet has diversified its expertise in related
businesses within the ICT spectrum, providing solutions
for integrated building management systems, security
management systems (i.e. card access control systems
and digital closed circuit TV) and IT infrastructure
(networking systems, structured cabling systems, smart
card multi-application systems, and audio visual
multimedia and telecommunication systems).
To further strengthen its position in the ICT industry
in the country, Meganet is shoring up its capability to
provide value-added services to premium and
demanding customers with niche packages such as
network management systems, intelligent building
electrical systems, IT migration services and building
automation systems.
TELEKOM SALES &
SERVICES SDN. BHD.
Telekom Sales and Services Sdn. Bhd. (TSSSB) was
established on 1 September 1999 as a result of a
merger between two entities, Telekom Equipment
Sdn. Bhd. (TQSB) and Outlet Business Management
(OBM). Both entities have distinct competencies,
TQSB being a company that specialises in the supply
and installation of Customer Premises Equipment
(CPE) and OBM being the operator of the Kedai
Telekom chain throughout Malaysia.
The new merged entity, in the form of TSSSB, brings
together different strengths under one roof. As a result
of this streamlining, TSSSB has become a customer
service organization that focuses on the provisioning
of one-stop solutions for Telekom Malaysia.
TSSSB’s Vision is “To be the best one stop centre for
customer service and communication solutions in
Malaysia” and TSSSB’s Mission is “To consistently
provide excellent customer service and quality
products that exceeds customer expectations.”
Currently TSSSB has 95 ISO certified Kedai Telekom
outlets which serves as a primary channel in
TELEKOM APPLIED
BUSINESS SDN. BHD.
providing Telekom Malaysia’s services such as
Telekom Applied Business Sdn. Bhd. (TAB) is an
service provisioning, bill payment collection, inquiries
MSC-status joint venture between Telekom Malaysia
and bureau services.
and Prism Holdings Limited, South Africa, that
specialises in building ICT solutions in the areas of
TSSSB provides a host of Information and
e-Solutions, telecommunications operating support
Communication Technology (ICT) products and
systems and computer telephony integration.
Customers Premises Equipment (CPE) to its customers
through the Kedai Telekom outlets, corporate sales
In 2003, TAB successfully deployed its Ezeephone
division and its network of dealers and agents.
system in the Republic of Guinea, Africa, through the
Société des Télécommunications de Guinée (Sotelgui
The Company works very closely with Telekom
s.a.), the sole telecommunications company providing
Malaysia’s product marketing division, TM Net Sdn.
fixed line services in the country. Two or three more
Bhd., vendors, suppliers and business partners in
ventures to market the system overseas are expected
providing key products such as prepaid calling cards
to materialise this year.
and feature phones to Telekom Malaysia’s group of
customers.
TAB’s Ezzephone comes
to Guinea.
For the Financial Year ended 31 December 2003 the
total revenue for the Company recorded a slight
115
increase from RM154.43 million in Year 2002 (unaudited) to RM154.47 million.
For 2004, TSSSB’s focus is on Customer Service
Excellence. Working together with the Customer
Relationship Management (CRM) group and Change
Management Office (CMO), TSSSB is taking steps in
increasing the customer service level and increasing
the Customer Satisfaction Index (CSI) via several key
initiatives. The Company continues to be committed
to serving Telekom Malaysia’s 4.6 million direct
exchange line customers and more than 200
corporate organizations.
The Ezeephone system was deployed in Malaysia in
2002 with one node with a capacity to support
50,000 users. In December 2003, two more nodes
were installed to cover Sabah and Sarawak as well as
the northern regions of Peninsular Malaysia, bringing
the total capacity to 150,000 users. TAB has also
successfully introduced a popular Fixed Short
Message Service (FSMS) to Telekom Malaysia’s fixed
line customers.
CRM in focus at Kedai Telekom.
For the year 2003 TAB registered a net profit of
Damansara and Subang; the Malaysia Tourist Pages,
RM3.04 million.
Malaysia Oil & Gas Directory, Halal Pages, Corporate
Agriculture Directory, Dining Out and the Malaysia
TAB aspires to become a active player in the ICT
Information Industry Directory. In addition, there is a
industry by diversifying its product portfolio.
Malaysian Chinese Yellow Pages catering to the
Products which have been successfully launched,
Mandarin-speaking community.
such as VCS and Ezeephone, shall be replicated and
marketed to other countries.
TPSB registered a total of RM53.16 million in
revenue for the financial year ended 31 December
TAB is also looking into business opportunities in the
2003 compared to RM52.90 million in 2002. This is
prepaid market both locally and abroad. In this
an improvement of 0.49%. Total revenue for Yellow
regard, it is considering partnerships with foreign
Pages & White Pages is RM48.69 million and
telcos and resellers, as a way to ease its entry into
RM2.13 million respectively. This represents 96% of
the international market.
the overall revenue for the company. For year 2003,
the revenue for the Malaysian Chinese Yellow pages
116
is RM1.39 million and that for Niche Directories is
TELEKOM PUBLICATIONS
SDN. BHD.
RM0.95 million.
Incorporated in August 1989, Telekom Publications
TPSB has extended the reach of its Yellow Pages
Sdn. Bhd. (TPSB) is the official publisher of the
by making it accessible via the Internet at
Malaysia Telephone Directories (Yellow Pages &
www.yellowpages.com.my and also through the Short
White Pages) in both print and multimedia formats,
Messaging System (SMS). The Malaysia Internet
which are referred to by more than 4.9 million users
Yellow Pages (MIYP) was officially launched in
nationwide. Its industrial, commercial and government
October 2000, while TMTOUCH SMS Yellow Pages
listings are the most comprehensive, covering over
was a joint venture with TM Cellular Sdn. Bhd., now
300,000 companies and 18,000 brands. The listings
merged with CELCOM. The product was launched in
are very current as the contact numbers are obtained
August 2002, following which TMTOUCH subscribers
directly from Telekom Malaysia Berhad.
can access directory information through SMS using
the short 200200 code.
TPSB produces more than 41 different directories,
including nine niche directories. Among these are
three Neighbourhood directories for Ampang,
As a member of the Asian Directory Publishers
Learning from this experience, Menara Kuala Lumpur
Association Inc. (ADPAI), TPSB has embarked on a
organised a workshop for its staff with the view to
cross-selling arrangement with other members of the
formulate a more focused and specific corporate
association, such as the Yellow Pages of the
vision and mission. The objective is to make Menara
Philippines, Indonesia, Brunei and Myanmar.
Kuala Lumpur the preferred destination for both local
and foreign visitors to Kuala Lumpur by year 2005.
On August 8, 2003, TPSB entered into a collective
To achieve this vision, the corporate mission requires
agreement with the National Union of Telekom
all its staff to strive towards creating a truly enjoyable
Employees to foster a harmonious working
experience for visitors to Menara Kuala Lumpur
environment and encourage higher productivity. TPSB
through providing good service, innovative products
has been awarded the ISO 9001:2000 certification by
and advanced facilities.
SIRIM on management systems, reflecting a high
standard of business processes as well as quality
Intensive creative promotional activities were held
products and services.
within the country, offering attractive rates to walk-in
visitors and better concessions to travel agencies.
achieved its targeted sales figures.
2003 was a challenging year to tourism in general.
New products were also introduced to increase the
The SARS outbreak caused the world’s tourism
lure of Menara Kuala Lumpur. For example, the
industry to take a drastic dip. Malaysia was not
Menara Kuala Lumpur Privilege Card, launched as
spared. Tourist arrivals in the country dropped by 60-
part of the customer loyalty programme on 15 July
70%. This was reflected in the number of visitors to
2003, enables visitors to register as members and
Menara Kuala Lumpur which saw a drastic drop by
subsequently enjoy numerous privileges and benefits
as much as 60%. Therefore, the main challenge
offered by Menara Kuala Lumpur as well as other
faced by Menara Kuala Lumpur in 2003 was to
collaborating organisations. Along with this programme,
maintain its position as a ‘must visit’ landmark for
a Top of the World contest offering a grand prize of
both domestic and foreign tourists.
an MPV was organized. By end December 2003, Menara
Kuala Lumpur Privilege Card had attracted over
12,000 members.
Another marketing strategy involved enhancing Menara
Kuala Lumpur’s business relationship with dealers
and collaborating partners. Taxi drivers within the
Klang Valley were honoured as ambassadors of the
tower during a Taxi Appreciation Day on 12 May
2003. The travel agencies and media were feted at an
appreciation get-together for their support in promoting
Menara Kuala Lumpur. Travel agencies were
encouraged to make sure incoming tourists include
Menara Kuala Lumpur on their itineraries. This joint
effort also involved associates from the hotel industry
and other tourist-related bodies.
117
These initiatives paid off as Menara Kuala Lumpur
MENARA KUALA LUMPUR
SDN. BHD.
Menara Kuala Lumpur also welcomed foreign
dignitaries attending the 12th NAM Conference and
the 10th OIC Summit. Apart from that, Menara Kuala
Lumpur increased its public profile by achieving two
new records in the Malaysia Book of Records with
“The Longest Roti Naan in Malaysia” and “The Most
Participants in Malaysian Carom Competition”.
To make Menara Kuala Lumpur physically more
attractive, a new lighting system was installed at the
top of the tower and the lobby was renovated to
create a livelier atmosphere. The Mega View Banquet
Deck at 288m and situated above the Revolving
Restoran Seri Angkasa, was given an exclusive touch,
allowing customers to enjoy premium facilities in
comfort and exclusive privacy in the clouds.
In addition, various exciting family-oriented activities
which allowed children to get up and close to wild
and wonderful animals such as the elephant, tiger
cub, albino snake and orang utan were organized at
118
the Observation Deck. Families were also enticed by
trishaw rides at the tower as one of the traditional
modes of transport brought in specially from Melaka.
To give value to families visiting the tower a special
Happy Family Package with attractive rates were
Menara KL stands tall as a tourist icon on the KL Skyline.
offered to Malaysians.
To cater specifically to the younger generation,
Menara Kuala Lumpur organised a Rentak Merdeka
Concert, featuring artists from Akademi Fantasia.
Street performances, cultural carnivals, a Children’s
Arts Festival and Gerak & Bunyi co-organised by the
State Tourism Exco members officiated several
Ministry of Culture, Art & Tourism gave the younger
domestic roadshows themed “Membawa Menara
generation an opportunity to gain a better
Kuala Lumpur Kepada Anda” in Johor Bahru,
understanding of traditional Malaysian culture. It was
Kuantan, Ipoh, Pulau Pinang and Melaka. Menara
a challenging year, but Menara Kuala Lumpur
Kuala Lumpur also collaborated with the State
managed to keep the crowds coming by introducing
Education Department to promote student tourism.
an array of exciting activities all year round.
Activities targeted at students included inter-school
quizzes, treasure hunts and a competition to replicate
Menara Kuala Lumpur using recycled materials.
Menara Kuala Lumpur is in the business of experience,
GSB achieved gross sales of RM51.7 million in 2003,
as such a high standard of customer service is
marking a commendable growth of 70.3% against
expected from each and every staff. Specific
2002. The company’s revenue was generated by
programmes designed to achieve customer delight
Managed Network Services, EG*Net and Value Added
was carried out for the customer service team.
Services. The biggest contribution – at 48% of the
Continuous improvement and efforts are made to
company’s total revenue – came from the EG*Net
build a cohesive team for various staff activities.
project.
These served to enhance a spirit of fellowship, instill
a harmonious atmosphere at work as well as nurture
At the same time, expenditure increased by 65.7%
a culture of excellent service and customer
last year to RM41.8 million due primarily to improve
satisfaction at the 4th tallest tower in the world.
customer service and expansion which would result
in better profits. Profit after tax stood at RM5.5
million, as compared to RM1.4 million for the year
GITN SDN. BHD.
2002. This is the second consecutive year GSB
In October 1995, the Cabinet approved the setting up
recorded a profit since its incorporation in 1996.
of a Government Integrated Telecommunications
Network (GITN) to help create an e-Government
The prospect for GSB is bright on the back of the
network infrastructure. In March 1996, GITN Sdn.
government’s aggressive efforts to implement EG*Net
Bhd. (GSB) was incorporated to manage this network.
more extensively. To further improve its services,
government which would allow the company to
connectivity – for Intranet, Extranet and Internet
improve its capacity and capability besides offering
access – and managed security services to all
better value to the government.
119
GSB is seeking a long-term concession with the
GSB provides integrated managed network
government agencies nationwide that have
implemented e-Government applications. The network
enables government-to-government, government-tobusiness and government-to-citizens seamless
electronic communication.
In December 2003, GSB signed a RM88.7 million
agreement with the government for the provision of
network, security and other services for the
establishment, management, operation and
maintenance of the Electronic Government Network
(EG*Net) project, an MSC flagship application in
Putrajaya.
GITN – a major player in
the government’s
e-Government initiative.
Our high speed broadband connectively allows
you more quality time to live life.
Play
Learn
Wo r k
Educational
Excellence
Another attractive programme for the global market
is MMU’s suite of fully Internet-based degrees which
the university is offering to countries like Syria,
Thailand and Cambodia. Again, foreign partners have
shown much interest in this revolutionary method of
teaching and learning, though the programme is still
in its infancy. The Syrian Government, for example, is
keen on establishing its own virtual university
modeled after the Multimedia University. The possible
partnership between the two universities would create
a truly borderless learning environment.
With regards to the student population, the dramatic
PROF. GHAUTH JASMON
PRESIDENT
UNIVERSITI TELEKOM SDN. BHD.
HJ. AHMAD TARMIDI MOHAMAD
TELEKOM RESEARCH & DEVELOPMENT SDN. BHD.
increase seen over the last few years has stabilised.
Another jump in numbers is expected soon with the
completion of the Cyberjaya and Melaka campuses.
Comprising residential, administrative and academic
facilities, the new campuses will bolster the student
population from the current figure of 16,000 to
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20,000 when completed.
DR. NAS TAMIMI IBRAHIM
ACTING CHIEF EXECUTIVE OFFICER
TELEKOM SMART SCHOOL SDN. BHD.
DATUK IR. AHMAD ZAINI MOHD AMIN
TELEKOM TRAINING COLLEGE
The number of courses offered has also increased. In
2003, the Ministry of Education approved eight new
courses, bringing the total number of courses offered
to 44. The new courses include Masters in
Knowledge Management with Multimedia, Masters in
Multimedia (e-learning Technologies), Bachelor of
Multimedia (Hons) Virtual Reality and Bachelor of
UNIVERSITI TELEKOM
SDN. BHD.
Universiti Telekom Sdn. Bhd. was set up in June
1997 to manage the country’s first private university,
namely the Multimedia University (MMU), which
offers Diplomas, Bachelors, Masters and Doctorates
in IT and multimedia studies. MMU charted
exceptional growth in 2003, introducing new courses
and outlining visionary expansion plans, with a
current student number of 16,000.
The university is positioning itself to capitalise on the
international market. Currently, international students
number 950 out of the 16,000. Of this, 50 students
from China are pursuing MBAs at MMU – and there
are plans to attract more students from Singapore,
Indonesia, Sudan and India. The MBA programme is
innovative and competitive, making it invaluable to
the university’s partners abroad.
Information Technology (Hons) Artificial Intelligence.
In 2003, the university recorded a net profit of
RM6.7 million on the back of RM132.0 million in
revenue. It is envisaged that, with aggressive
marketing to increase its international student
population and the commercialisation of innovative
products through R & D, MMU will be able to sustain
its profitability in the years to come.
MMU will continue to expand and upgrade its
capabilities to better serve not only the nation, but
also the global community.
Diversity enriches
student life at MMU.
Telekom Research & Development Sdn. Bhd.
(TMR&DSB) currently employs a total staff of 277
and out of which 176 or 64% are researchers.
TMR&DSB has also identified the following Masters
A Postgraduate Study Scheme (PSS) was introduced
and PhD programmes for its staff:
mainly to upgrade researchers’ skills and knowledge
•
as well as to improve the management knowledge of
MSc & PhD in Engineering Business Management
at the Business & Advanced Technology Centre,
non-research supporting staff.
Universiti Teknologi Malaysia (UTM), Kuala Lumpur,
in collaboration with Warwick University, UK.
Under this scheme, TMR&DSB employees are given
the opportunity to pursue higher degrees or diplomas
•
Management, or (c) Venture Capital Management
locally by conducting research or attending courses
at the International Business School, UTM, Kuala
on a part-time basis. In 2003, TMR&DSB organised
Lumpur, in collaboration with Cranfield University,
postgraduate programmes for 12 of its research
UK.
personnel, which 10 are pursuing Masters Degrees
and two PhDs.
MBA in (a) Techno Entrepreneurship, (b) Strategic
•
MBA & MSc in IT at the Telekom Training College
(TTC), Kuala Lumpur, i.e. a collaboration
In addition, an arrangement has been made with
programme between TTC and Universiti Utara
UiTM for an in-house Master of Science in
Malaysia (UUM).
Information Technology (IT) programme.
In an effort to improve the management skills of
non-research supporting staff, TMR&DSB has
collaborated with Telekom Training College in coming
up with a Graduate Diploma in Management. 20
executives are currently pursuing this programme.
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TELEKOM RESEARCH &
DEVELOPMENT SDN. BHD.
TMR&DSB has encouraged researchers to publish
The year 2003 was spent concluding the proposal for
technical papers as to contribute in towards to the
the National Smart School Roll Out Project, which
enrichment of knowledge. 47 technical papers were
will include enhancements of the Smart School
published; out of which six were presented at
Integrated Solution. TSS also looked at introducing
international conferences, one paper presented at a
the smart school concept beyond Malaysian shores.
national conference and two published in local
Through government-to-government efforts led by
technical journals.
the Multimedia Development Corporation (MDC), TSS
was actively involved in assisting a few Middle
Practical students from local universities were
Eastern governments in their quest to “smarten” their
accepted to undergo intership in TMR&DSB. We see
respective education systems.
124
this as an effort to encourage and promote an R&D
culture and to spot talents among the potential young
TSS also concentrated on research and development
researchers. A total of 27 students from KUITTHO,
to provide the best solution for the impending roll-
UTM, UPM, MMU and Polytechnics completing their
out of Smart Schools – 100 for year 2004 and 200
training programme.
for year 2005.
As its contribution to the promotion of R&D in
At the same time, in support of the government’s
science and technology, senior members of the
drive to implement the teaching of Mathematics and
TMR&DSB Management Team and Senior Principal
Science subjects in English, TSS translated the
Researchers are involved as:
Mathematics and Science components of the Smart
•
Faculty advisors on engineering to several local
School curriculum from Bahasa Melayu to English for
universities;
Year 1 and Form 1. Two other government projects
•
Fellows at scientific & technological institutes;
successfully completed in 2003 included the
•
Panel member of IRPA;
Malaysian Smart School Pilot Project COINS (Corporate
•
Co-supervisor for post graduate students;
Information Super Highway) extension services and
•
External examiners of PhD theses.
the Helpdesk extension services. All three projects
contributed revenue of RM7.4 million, RM4.6 million
and RM3.6 million respectively to the company.
TELEKOM SMART SCHOOL
SDN. BHD.
This year, TSS will be translating the Mathematics
Established in 1999, Telekom Smart School Sdn.
and Science coursewares for Year 2 and Form 2. At
Bhd. (TSS) was incorporated to realise the Malaysian
the same time, the COINS extension service is still
Smart School project, one of the country’s Multimedia
ongoing and is expected to be completed by the
Super Corridor (MSC) flagship applications. With the
second quarter of 2004. The translation is expected
Ministry of Education leading the project, TSS has
to contribute RM11.2 million in revenue, while the
now successfully completed its three-year National
COINS extension will earn the company RM2.3
Smart School Pilot Project contract, which involved
million this year.
88 schools throughout the nation.
TSS has sent a comprehensive proposal to the
The project is set to transform the education system
Ministry of Education to roll out the Smart School
to include a highly advanced technology-based
Solutions to 300 schools nationwide over the next
process that will revolutionise the way we learn, think
two years. If secured, the project will generate
and act – and ultimately creating a generation of
approximately RM360 million in revenue by the time
Malaysian knowledge workers who will lead the
it concludes in the final quarter of 2005.
nation into the Information Age and beyond.
Apart from enhancing the current Smart School
TSS also provided its courseware for free to various
Integrated Solution, TSS has developed the School
“adopted” schools as part of its community service.
Management Applications and Required Tools
At the same time, TSS has collaborated with a
(SMA*RT) system, a web-based school management
leading IT developer to provide a pre-school IT
solution comprising School Governance Management,
package – which includes a personal computer, child-
Student Affairs Management and Education
proof IT furniture and educational software – to 70
Resources Management modules.
pre-schools under the care of the Ministry of
Education and the Ministry of Rural Development.
Also in its drive to enhance product and service
quality, TSS has started work on a Learning Content
Staying true to its vision of becoming the “leading
Management System (LCMS), an infrastructure that
total e-education solutions provider by 2008”, TSS
can be used to create, modify and manage content
has endeavoured to make its mark in the e-education
delivery for a wide range of learning needs.
industry by providing the best solutions and
Concurrently, TSS has also continued to market its
consultancy services.
brand of multimedia courseware, BestariEd, and
extend its e-education consultancy services to a
number of interested parties.
Throughout the year, TSS has participated in various
exhibitions and outreach programmes either on its
own or under the banner of Telekom Malaysia, the
Ministry of Education or MDC in order to promote
the Smart School Project. More notable among its
excursions were the Malaysian Showcase in
conjunction with the 2003 NAM Summit, the 2003
MSC exhibition and the Expo OIC 2003.
125
Enhancing school
education through
Telekom Smart School’s
education applications.
TELEKOM TRAINING
COLLEGE
Telekom Training College (TTC) is a premier provider
of telecommunications training in Malaysia. It was
established in 1948 at Jalan Ipoh, Kuala Lumpur, to
train staff of the Department of Telecommunications.
TTC was given a facelift in 1961, as a result of a joint
venture between the United Nations Organisation and
the Malaysian Government. In 1966 Telekom Training
College was moved from its original site to its
present location at Jalan Gurney, Kuala Lumpur.
In the early 1980s, five regional training schools or
branch campuses were established in Taiping, Kuala
Terengganu, Melaka, Kuching and Kota Kinabalu. Last
year, TTC celebrated its 55th anniversary as a
telecommunications training institution of choice for
both local and international participants.
As an appointed training provider for Commonwealth
126
countries through the Commonwealth Telecommunications
Organisation (CTO), TTC has loaned its trainers and
provided consultancy and course structures to
various Commonwealth countries. The College has
also sent participants to courses overseas, mainly
with British Telecom (BT). Its partnership with CTO
has been mutually beneficial.
In 2003, TTC participated in 23 CTO projects involving
The College currently conducts more than 200
20 countries such as Bangladesh, Barbados, Fiji,
courses, seminars and workshops in management, IT
Gambia, Ghana, Malawi, Mauritius, Seychelles,
and multimedia related subjects, each year. On
Botswana, Trinidad & Tobago, Malta, Cyprus and
average more than 40,000 local and international
Zambia. Under these projects, TTC has sent experts
trainees have attended these courses.
from Telekom Malaysia and the Training College to
provide training in various fields such as Information
TTC also supports the Malaysian Technical
and Communications Technology (ICT), Human
Cooperation Programme (MTCP), under the purview
Resources, Public Relations, Marketing & Sales and
of the Prime Minister’s Department, which encourages
Finance.
IT synergies between developing countries. This has
strengthened regional cooperation and nurtures
collective self-reliance among members. Last year, in
collaboration with the Economic Planning Unit of the
Prime Minister’s Department, TTC conducted an
MTCP programme attended by 60 participants from
four countries namely Cambodia, Laos, Myanmar and
Vietnam. Riding on the success of the programme,
TTC has again been selected to provide training for a
fresh batch of MTCP participants this year.
TTC has established collaborative links with a number
of renowned local and foreign universities, which
would enable its students to further their studies to
degree programmes.
The institutions are:
•
Multimedia University (MMU)
•
Universiti Terbuka Malaysia (Open University)
•
Universiti Malaysia Sarawak (UNIMAS)
•
University of Portsmouth, United Kingdom
•
FTMS De Monfort Malaysia/De Monfort University,
United Kingdom
•
University of Curtin, Australia
•
Local IPTA/IPTS
In August 2003, TTC increased its academic
partnership network by signing a Memorandum of
Understanding with Nilai International College. This
arrangement will allow students who have completed
any programme, or part of a programme at TTC to
continue their studies in an appropriate programme
127
at the Nilai International College.
TTC also manages the training and development
needs of top-ranking employees of Telekom Malaysia
via its Management & Leadership Institute (MLI).
Among the courses conducted here are the Top
Management Programme, Senior Management
A new focus locally is on courses at tertiary level.
TTC currently offers a wide selection of courses at
Diploma level that meet the requirements of the
Development Programme, Management Leadership
Development Programme and the Management
Trainee Programme.
k-economy. These include:
•
Diploma in Multimedia (Business Computing)
•
Diploma in Multimedia Technology
•
Diploma in Technology (Telecommunications
TTC has plans to expand its operations and be more
competitive as a reputable private learning institute.
Engineering)
•
Diploma in Computer Science
•
Diploma in Marketing with Multimedia
•
Diploma in Management with Multimedia
In 2003, TTC conducted six Diploma programmes
over two intakes. The April intake attracted 517
students, of whom 464 were school leavers and 53
were Telekom Malaysia’s staff. A further 194 students
enrolled for the September intake.
TTC – meeting the
training needs of
Telekom Malaysia
employees.
Human Resources
Human Resources (HR) plays a critical role as Telekom Malaysia shapes
itself up into an enterprise that will not just survive, but thrive, in the new
global economy. Underlying this mission is also Telekom Malaysia’s
aspiration to become an employer of choice – one that continuously inspires
excellent performance. It was this factor that helped set the priorities in
the design and execution of HR programmes and initiatives in 2003. While
aiming to improve overall organisational performance, the HR agenda also
focused on employee enrichment. This is critical as Telekom Malaysia
regards people as its most valuable asset.
One HR initiative that has remained a priority to the organisation
employee clocking an average of 40 hours of training. To further
over the years is building leadership and managerial skills.
promote employees’ knowledge and capabilities, Telekom
Towards this end, a total of 3,552 executives (46.3%) have so far
Malaysia is one of the major contributors to the Human
undergone managerial and leadership assessments, such as the
Resources Development Fund, set up by the Human Resource
Potential “M” Assessment, Senior Manager Assessment and Top
Development Act 1992. A total of about RM6.04 million is
Management Appraisal. By identifying potential areas for the
contributed to the fund yearly. Out of this contribution, the
development of its managers, Telekom Malaysia is strengthening
Company was reimbursed 83% in 2003.
the capabilities of its staff, as well as fortifying its own ability to
deal with challenges. The organisation is also committed to
Telekom Malaysia’s commitment to providing development
increasing its leadership pool by 5% of its executive population
opportunities extends to the wider Malaysian public through its
by year 2006.
scholarships and education loans. The Company allocated
RM19.8 million towards its scholarships and education loans in
2003. A total of 1,049 students are currently receiving financial
aid to pursue their studies, both domestically and abroad.
Mindful of the fact that the management of human capital
involves much more than retaining staff, Telekom Malaysia
continues to motivate and inspire its people to maintain an edge
in today’s competitive environment. To attain greater insight into
the level of employee satisfaction, and in order to build some
an Employee Satisfaction Survey in 2003. It provided an avenue
to gauge employee perceptions on leadership, communication,
training and development, career advancement, job tasks, work
environment and other HR issues. The survey results are being
used to focus on key areas that will have the biggest impact on
employee commitment and engagement.
Telekom Malaysia recognised as one of the best employers in Asia and Malaysia
for 2003.
Human Resources Planning – Focus on employee development.
Telekom Malaysia has successfully produced 53 senior executives
with Masters degrees through customised Executive Development
programmes conducted with renowned international institutions
of higher learning. A total of RM2.23 million was invested in the
Executive Development programme in 2003.
A structured training programme for executives who aspire to
move up the managerial ladder has also been put into place.
Meanwhile, a minimum measured Competency Level Index (CLI)
of 60% has been enforced to improve the general level of
competency. This will motivate the workforce to improve their
skills, thus improving the organisation’s overall efficiency.
In 2003, the Company spent a total of RM11.14 million on
programmes conducted by Telekom Training College, with each
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basis on how this can be improved, the management conducted
Enriching people’s lives is synonymous with keeping them
Efforts to ensure employees’ well-being are also emphasised. In
connected, involved and empowered. To facilitate this, e-HR, an
2003, Telekom Malaysia spent no less than RM417.3 million on
electronic communications network of fully integrated HR-related
healthcare and employee welfare benefits, various Telekom
data, information, tools and transactions was set up by the
Malaysia clubs, sports and recreational activities as well as the
Company. e-HR is an enterprise-wide strategy that uses scalable,
management of daycare centres. Telekom Malaysia looks at the
flexible and integrated technology to link staff to internal
long term benefits as healthy and satisfied employees are likely
processes and the business objectives of the organisation. It
to be committed, dedicated and productive.
allows employees to access and update HR data, thus reducing
the cost of data entry and at the same time empowering
With a total staff strength of 31,274 at year end, HR expects to
employees to be in charge of their own profiling.
continue facing high expectations and significant challenges. At
the same time, the division also sees tremendous opportunity to
The Company believes that in order to achieve its long-term
undertake innovative practices to engage employees and forge
corporate goals, it needs to be guided by fundamental principles.
links between HR and organisational performance. Telekom
In this regard, the corporate core values, known as KRISTAL, will
Malaysia’s continuous commitment towards these efforts was
form a foundation of its corporate culture. An intensive
duly acknowledged when the Company was recognised as being
communication programme has been rolled out to educate
among the Best Employers in Asia and Malaysia in year 2003.
employees on the three core values: Total Commitment to
The Award recognises the effectiveness of people practices in
Customers; Uncompromising Integrity; and Respect and Care.
optimising organisational performance and its alignment to a
Employees are to internalise these values in their daily work and
company’s overall business direction.
interaction. Specific documents were also published to assist both
130
employees and vendors to put these KRISTAL values into
practice.
In support of the company-wide Culture Transformation initiative
and recognising that any move to inculcate organisational
behaviour depends on effective management of Human
Resources, HR is enhancing its current policies and practices to
ensure they are aligned with KRISTAL.
Customer Relationship
Management
Telekom Malaysia continued to
improve its customer care
operations and management in year
2003. Its improvement efforts
focused on customer contact points,
and included many dynamic changes
organisational infrastructure.
A. CUSTOMER RELATIONSHIP MANAGEMENT (CRM) PROGRAMME
The CRM Programme, launched in late 2002, spearheaded many of the new initiatives to enhance customer satisfaction and to
move a step closer towards its objectives of acquiring, satisfying, retaining customers and growing a profitable customer base,
in line with Telekom Malaysia’s long-term aim of becoming the communications company of choice.
The CRM programme successfully implemented some rigorous quick-win projects, including a real-time data
provisional/restoration tracking system and customer retention programmes. In addition, various internal forums and workshops
were conducted to integrate the strategies, processes, technologies and the people that will inculcate a customer-oriented work
culture. Most of these activities went towards creating a foundation from which a full-fledged CRM system will be implemented
in 2004. Existing strategies, guidelines, policies and operations processes and procedures were revisited and revised where
necessary to ensure more focused and concerted efforts towards providing a better all-round experience for customers.
A CRM technical team researched various CRM tools and technologies to identify ways of integrating these with key business
processes and best practices to achieve maximum advantage. The CRM tools and technologies will allow the Group to leverage
on its vast customer database to provide an edge on customer insight.
131
to processes, systems and
Among the key projects and achievements of the CRM
field force by enabling remote and direct work order,
Programme in 2003 were:
dispatch functions and near real-time updates on the
•
status of work using SMS. The new process creates an
Human Competency and Cultural Development
immediate impact with reduced number of calls to 1060
Through this initiative, which recognises the importance
call centres, and indirectly improves service provisional/
and power of human resources, various cultural and
restoration cycle times as a result of more effective
competency training programmes were launched.
information management. The number of calls to 1060
Studies were also conducted to ensure a good match of
has reduced by more than 20% and the cycle time rate
right person-right job, while incentives were introduced
improved by more than 10%.
to the sales group to spur them to higher performance
and productivity.
•
•
To enhance the effectiveness of sales executives and
SAVE Programme
managers, automated tools and applications were
To inculcate customer loyalty and to reduce the churn
developed and implemented to aid the sales process.
rate, various nationwide campaigns were held to
High-end computing equipment and network resources
establish direct contact with customers whose
were also provided to enable better presentation and
subscriptions to services were pending termination with
access to key information.
a view to save and retain them. The initiative was met
132
Customer Service Automation Tools
with encouraging response from customers. In a pilot
A key objective of the CRM programme is to offer
implementation project conducted in an urban center, a
customers with greater flexibility and access. Towards
high percentage success rate was recorded on the
this end, a project was launched in September 2003 to
retention of customers to continue with their Telekom
develop a self-service portal that would allow customers
Malaysia services.
to make contacts and request for new services, report
service issues as well as view/analyse and pay their
•
Data Services Provisional/Restoration Tracking
bills online through the Internet. The objective is to
System (DPTS/DRTS)
enable customers to have as many channels as possible
DPTS/DRTS was launched to demonstrate appreciation
without having to visit Telekom Malaysia offices or
of customers’ need for timely information on the
calling the contact centres.
progress of their service installation and restoration
requests. It improves communication with the mobile
•
Customer Friendliness Project
This special taskforce was set up to achieve a Customer
Satisfaction Index (CSI) rating of 85%. To create a
customer-friendly environment at the front end, the
project team adopted a holistic approach in its
endeavour, from understanding the issues on the
ground to strengthening customer relations basics and
improving office tools and processes. The programme
has managed to raise the Customer Satisfaction level
on Kedai Telekom operations by more than 10% from a
year ago.
CRM – at all levels of the organisation.
Many other programmes to raise the CSI beyond the 85%
level have also made significant progress in 2003. Staff
development plans to equip them with the right soft and
hard skills to enable them to build enduring relationships
with customers will continue in 2004.
C. KEDAI TELEKOM
Besides the Projek Mesra Pelanggan, other major changes
made by Kedai Telekom in year 2003 include the following:
•
Customer Service Management training
Kedai Telekom front-liners were provided with Customer
As much of the foundation for Telekom Malaysia’s CRM
Service Management training by external consultants to
Programme has already been laid, the focus in 2004 will be
increase their level of professionalism and focus. The
to realise the new – and better – customer experience. The
training included a full-day “live” module at a Kedai
key success factor of any CRM Programme, however, is the
Telekom with actual customer encounters and instant
adoption of the concept by the common workforce, and its
feedback. Most of the customers expressed positive
application in their respective work areas. Hence, a large
views on the new experience.
portion of the CRM Programme effort will concentrate on
introducing and explaining the new system to staff, who will
•
Systems upgrade
be trained to use the tools and processes via workshops
All Kedai Telekom frontline PCs were upgraded, and the
and dialogue sessions. This is vital to induce the envisaged
network connectivity improved from 128kbps to 2MBps.
CRM culture transformation. Success of the whole
The much-improved system had shortened the
programme will be measured using pre-determined key
processing period, hence reducing the waiting time of
performance indicators (KPIs).
customers for counter service. Kedai Telekom is also
introducing a new logo and colour scheme at its outlets
The CRM initiative to instill a customer-centric culture
to portray a more lively and friendly image.
133
among the employees is a continuous process within the
Company. The role of the employee will change to become
one where it will be more relationship oriented.
D. CELCOM
As a result of its dedication to customer service
improvement, the Jalan Ampang branch of Celcom was
B. SPECIAL TASK FORCES
declared winner of the Anugerah Kualiti Y.B. Menteri Tenaga,
•
Komunikasi dan Multimedia 2003.
Go SMART Project (Customer Complaints Management)
This special project was launched in response to
concerns over the customer complaints management
Year 2004 promises to be another exciting year for Telekom
process, which was not well reflected in surveys
Malaysia as the Group continues to strive further to provide
conducted by the Malaysian Communications and
better experiences to its valued customers.
Multimedia Commission (MCMC) and Telekom Malaysia
itself. The project team implemented several best-inclass practices, including a product and process
ownership review; setting targets on shared KPIs; staff
retraining; and deploying SMART (Sistem Maklumat
Aduan dan Resolusi Telekom). It also conducted regular
surveys for feedback on the complaints handling
process. The project team successfully resolved 98% of
backlogged complaints three months after implementing
the changes. The resolution of problems within
stipulated time frames also improved 6% to 41%
during the same period.
Customer service excellence at
Celcom.
Research and
Development
134
As competition in the Information & Communications Technology (ICT) market intensifies,
Research and Development (R&D) has come to play an increasingly important role in
maintaining an edge. Recognising this, Telekom Malaysia has strengthened its R&D through its
subsidiary, Telekom Research & Development Sdn. Bhd. (TMR&DSB). Aiming to be the leading
ICT R&D company in South East Asia by 2008, TMR&DSB is committed to becoming a
reference centre for ICT product-oriented research work as well as providing the Group with
the technological impetus for data, network and multimedia applications.
The year 2003 was remarkable for TMR&DSB. Revenue increased
by 55.3% to RM69.1 million from RM44.5 million the previous
year. R&D revenue itself accounted for 76% of the total i.e.
RM52.6 million. A total of 59 research projects were planned and
executed in 2003 and 16 projects were completed as planned.
Among TMR&DSB’s successful products were its Network
Forecasting Software (NFS), Traffic Information Planning System
(TIPS), SQ2 (Service Quality 2) and CD-R (Call Data Record)
Analyser.
Thanks to relentless efforts to satisfy customers, the company
scored an exceptional Customer Satisfaction Index (CSI) rating of
4.12 out of 5.00. Another big success came in the form of
Intellectual Property Rights (IPR) registration. TMR&DSB
successfully submitted IPR applications for two patents, 30
copyrights, eight trademarks, five industrial designs and one
layout design for integrated circuits.
The year 2003 also saw the birth of a Strategic Research
Management unit to streamline the Company’s strategies to
achieve its vision as well as to strengthen its research project
management.
TMR&DSB’s research activities are focused on four main areas:
• Network and Wireless Technology
• Applications and Security Technology
• Modelling and Simulation Technology
• Material and Device Technology
TMR&DSB has also formed a 3G Task Force and a Next
Generation Network (NGN) Task Force to identify key research
areas in these fields.
Recognising the high risk in R&D investment, TMR&DSB works
in close collaboration with various recognised institutions of
higher learning and research. It has signed MoUs with the
Malaysian Institute of Nuclear Technology (MINT), University
Malaya, UiTM and USM.
TMR&DSB continuously reviews its business strategies to ensure
a high return on investment and long-term competitiveness. With
its state-of-the art facilities and knowledge capital, TMR&DSB is
well positioned to meet the R&D needs of various Telekom
Malaysia divisions and subsidiaries as well as the needs of the
ICT industry in general.
135
Towards a Safe and
Healthy Work Culture
Telekom Malaysia has zero tolerance for unsafe working practices and is committed to
reaching its target of zero fatal incidents. In line with this, there was an
unprecedented focus on safety and health throughout the Group in 2003. This involved
the conduct of programmes, training and campaigns across the board to improve the
Group’s safety and health performance.
Numerous safety and health programmes were conducted in collaboration with the
various safety & health committees for employees, including seminars, hands-on
training and toolbox talk and safety interventions. An OSH (occupational safety and
health) Month campaign was also organised.
1.
Consultative Arrangement
The Safety and Health Committee Regulation 1996 (under
the Occupational Safety and Health Act 1994) provides that
any company with 40 or more workers is required to set up
a safety and health committee. Telekom Malaysia, however,
has gone several steps further by establishing multi-tiered
safety and health committees. Each premise in the Company
has its own Safety and Health Committee which reports to
the State Safety and Health Committee which, in turn, is
accountable to the Main Safety and Health Committee. This
hierarchical system is implemented to ensure the adequate
and effective compliance of safety and health regulations
and involvement of all employees, trade union
representatives and the management in improving the
health and safety environment.
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This multi-tiered system was established in Telekom
Malaysia in 2002, and was expanded in 2003 to include
subsidiaries such as Fiberail Sdn. Bhd. and TM Net Sdn.
Bhd. Meanwhile, plans are in place for similar committees
to be set up in other subsidiaries.
2.
Continuous Awareness
Telekom Malaysia’s Safety and Health Policy Statement
reads: “Telekom Malaysia is committed to safeguarding
and improving its safety and health performance by
conducting its business activities in an organised and
responsible manner. We will endeavour to see that our
activities, services and products do not harm employees,
customers and members of the public who may be
affected by our activities. ….”
To achieve the high standards of safety, it is imperative that
contractors and vendors too need to play their role in
rendering quality service and work to the Company in a safe
manner. In this regard, Telekom Malaysia has set a
condition that a contractor or vendor’s safety and health
track record will be taken into account at the selection
stage. To help its existing contractors and vendors achieve
standards of safety envisioned, Telekom Malaysia has even
organised an OSH Management for Telekom Malaysia
Contractors programme in all 14 states nationwide. From
the encouraging turnout, Telekom Malaysia is optimistic of
better and safer services from its partners in the future.
3.
Accident Reporting
A total of 39 accidents in the workplace was recorded in
year 2003. This increase from 27 reported accidents in
2002 was due largely to greater awareness of reporting and
an environment that encourages staff to make reports of all
work-related accidents and illnesses, including minor
injuries and near misses.
While recording the total number of accidents, including
lost-time accidents and no lost-time accidents, has its uses,
it is not enough to achieve the highest safety standards.
Telekom Malaysia is now focusing on more informative
indicators based on near-misses, task-based observations,
work surveys and follow-ups, leadership visits, training,
enhanced reporting of unsafe conditions and a review of the
processes that have been implemented to identify hazards
and assess risks.
Telekom Malaysia has always been a caring corporate
citizen, and its efforts to create a safer and healthier work
environment is another manifestation of its civic
consciousness towards the well-being of its workforce.
Quality Initiatives
STRATEGIES FOR TOTAL QUALITY MANAGEMENT
In such an environment, organisations around the world realise
that they need a new way to manage their businesses. Nothing
can be taken for granted. Every accepted practice is being closely
scrutinised with the view to create a truly efficient and effective
workplace where value is always added and quality enhanced.
Innovative companies are nurturing cultures that support
commitment to total quality and delighting customers. This is
where Total Quality Management (TQM) can play a role. The
management tool encourages changes in organisational structure,
information management, employee motivation and team building
to create tremendous yet sustainable competitive advantage for
any company.
Total Customer Satisfaction (TCS)
Telekom Malaysia has adopted a systematic TQM approach known
as Total Customer Satisfaction (TCS). It is built on, the following
principles:
•
Everyone is responsible for continuous improvement of the
organisation, as problem-solving is not the sole responsibility
of the management
•
Everything in the organisation is subject to change in the
pursuit of excellence
•
There must be no compromise in the search for total quality.
The organisation must be “best-in-class” in every product,
service and process
•
Quality is defined by the customer. Hence whatever that does
not meet or exceed customer expectations is, by definition,
not of quality
•
Significant costs are incurred due to poor quality. Thus
concerted efforts must be made to eliminate waste, reduce
unnecessary work, inspection and other costs driven by the
failure to “get it right the first time”
•
The change process is to be driven by top management, who
must be proactive and highly visible in supporting this
transformation
•
Employees will be trained in quality improvement techniques
so that they are empowered to do whatever is necessary to
delight the customer
These TCS measures will only be successful, however, if diligently
complied. There are no short cuts. Indeed, it requires tremendous
patience and perseverance to follow in the footsteps of those
companies that have succeeded in their TCS efforts and are now
reaping the many benefits.
Telekom Malaysia’s Approach To Quality Management
A Quality Improvement and Business Excellence Division (QIBE)
was formed in 1999 to spearhead the move towards enhanced
quality in Telekom Malaysia. At the official launch of this division,
it was announced that the “quality movement” would be known
as Total Customer Satisfaction (TCS). Part of QIBE’s responsibilities
is to promote TCS principles at all levels company-wide, to
support the establishment of a Quality Management System
(QMS), and to inculcate a culture that recognises quality in
achieving operational and business excellence.
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Organisations today face enormous challenges. The world’s abundant resources are
gradually being exhausted; organisations have less time, less money and fewer managers
and supervisors to make decisions; plus there will be less room for mistakes, and
absolutely no tolerance for waste. Competition will increase a hundredfold; and customers
will be difficult to attract and retain.
Some of the roles entrusted to the QIBE are as follows:
•
Creating a “TCS Roadmap” in line with Telekom Malaysia’s vision and mission
•
Implementing a world-class Quality Management System
•
Managing quality standards and certification of the different business units
•
Reducing cycle times to induce better performance and greater cost effectiveness
•
Deploying projects to improve quality, cost effectiveness and productivity
•
Implementing systems that enhance effective and efficient business processes
•
Implementing a quality improvement programme for key suppliers and ensuring
best supplier partnerships
In working towards the stated objectives, QIBE has applied the following Business and
Operational model:
QIBE BUSINESS MODEL
Corporate Quality Council
Directions
Policies
QIBE
Consultancy
Corporate
Centre
Quality
Management
System
TM TelCo
Celcom
Process/
Service
Improvement
TM Net
Support
Business
Excellence
Feedback
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Direction
TM International
Corporate
Culture
TM Facilities
Subsidiaries
Consultancy
External
Organisations
Quality Management System
Process/Service
Core Values
Quality Management System (QMS)
Two programmes namely implementation of ISO 9000
certification program and TMBEA review, were conducted by QIBE
to ensure TM’s focus on Total Customer Satisfaction (TCS) and
Quality Management System (QMS).
ISO 9000 certification program
In 2003, Telekom Malaysia continued to focus on ISO 9000
certification for its critical and frontline functions in order to meet
customer satisfaction. The Group sees the certification as building
a basic foundation for quality management. The ISO 9000 quality
system complements the basic requirements of TMBEA. While the
TMBEA review serves as an overall business assessment, the ISO
certification ensures compliance with basic quality system
requirements. Besides serving as a marketing strategy to win
customer confidence, ISO 9000 is being sought for the following
reasons:
•
To gain third party assessment on Telekom Malaysia’s quality
management systems
•
To create consistency in operations and processes
•
To be more competitive
•
To demonstrate management’s total commitment to quality
•
To motivate employees
Divisions awarded the ISO 9001 certification would enjoy the
following benefits:
•
Information Technology Division
•
•
Telekom Training College
It provides a framework for establishing and reviewing quality
objectives
•
Network Management & Operations
•
COINS (Corporate Information Superhighway)
•
Staff are fully involved, motivated, committed and dedicated
to ensuring business goals and objectives are met
•
Finance Division
•
Specialised Network Services
•
•
Customer Assistance Services
•
Customer Care Centre
Effective procedures would ensure all processes are aligned
towards achieving the desired results. All Procedures/Work
Instructions are documented and can be easily referred to by
all relevant personnel
•
Product Marketing
•
Trunk Network
•
Suppliers deliver high quality products and services
•
Network Centralised Services & Management
•
•
Network Development Zone
Areas that require improvement are identified via satisfaction
surveys
•
Telekom Sales and Services Sdn. Bhd.
•
Government Integrated Telecommunications Network (GITN)
The units awarded certification in 2003 were audited for
compliance with the ISO 9001:2000 Standard. Those awarded
certification earlier have undergone the annual surveillance audit,
which required compliance to a new version of the Standard.
Telekom Malaysia Business Excellence Assessment (TMBEA)
Telekom Malaysia Group has adopted the Telekom Malaysia
Business Excellence Assessment (TMBEA) to assess the health of
the various systems being put in place to achieve the Companys
vision of becoming the communications company of choice – one
that focussed on delivering exceptional value to customers and
other stakeholders. TMBEA sessions also allow for crossfertilisation of ideas, recognition of achievements, identification of
shortcomings and recommendations for continuous improvement.
QIBE OPERATIONAL MODEL
VISION
MISSION
STRATEGIC OBJECTIVES
KEY PERFORMANCE INDICATORS
EXCELLENCE CULTURE
• Leadership
• Employee
– involvement
– suggestion scheme
– Employee
Satisfaction Index
QUALITY MANAGEMENT
SYSTEM
• TMBEA
• ISO 9000
• ISO 14000
• TL 9000
• PMQA
• MBNQA
• EFQM
• Process
– Cost reduction
– 6 Sigma
– Cycle Time Reduction
– Automation
– Process Management
– System Integration
• Service
– Customer Contact
– Customer value
& repositioning
– Compliant & Feedback Mgmt
– System Integration
• Rewards & Recognition
– Performance base
– Loyalty scheme
Best Practices
OPERATIONAL EXCELLENCE
Tools & Techniques
Leadership and Strategy
Process Management and Improvement
Prevention and Problem Solving Management
Human Resources Development and Involvement
New Product/Service Development Supplier Management
Benchmarking
Communication
System and Equipment
Data and Information Management
Control of Operations
Customer Focus
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The following divisions and subsidiaries have been awarded ISO
9000 Certification:
The TMBEA has been designed to help Telekom Malaysia enhance
its competitiveness by focusing on two goals namely increasing
value to customers and improving overall performance.
•
Customer Focus
Customer Focus addresses how the organisation seeks to
understand the requirements of customers and the
marketplace. This subsystem stresses relationships as an
important part of an overall listening, learning and
performance excellence strategy. Customer satisfaction/
dissatisfaction results provide vital information.
•
Human Resources Development and Involvement
Human Resources Development and Involvement addresses
key human resources practices – those directed towards
creating a high performance culture and developing
employees to enable them, and the organisation, to adapt to
change. It also looks at the work environment, employee
support climate and employee satisfaction with the aim of
motivating and fostering the well being of all employees.
•
Supplier Management
This component focuses on how the organisation manages
its suppliers, from defining its requirements and selecting its
suppliers to ensuring conformance, evaluating the suppliers’
performance and formulating strategies for improvement.
•
New Products/Services Development
This subsystem focuses on a systematic approach to the
development of new products and services. Emphasis is
placed on the comprehensiveness of the design input, output
and review stages are.
•
Process Management and Improvement
This is a focal point within the model for all key work
processes. Built into the subsystem are central requirements
for efficient and effective process management, based on
preventive activities. It focuses on how key business
processes are designed and performed, incorporating input
from customers and suppliers. It also looks at how key
performance measures – including customer and supplier
feedback – are identified to control and improve the business
processes.
•
Control of the Operational System and Equipment
This subsystem focuses on the maintenance of all operational
systems and equipment to ensure total service reliability and
serviceability. It also looks at how measuring systems and
equipment are managed to ensure reliability and accuracy of
measurements taken.
•
Information and Data Management System
This subsystem examines the organisation’s selection,
management and use of data and information for performance
measurement and analysis. It serves as a central collection
and analysis point for financial and non-financial data and
information. The objective of measurement and analysis is to
steer the organisation towards its business goals.
Among others the key benefits of TMBEA assessment are as
follows:
140
•
Accelerated improvement
The assessment accelerates Telekom Malaysia’s improvement
efforts by going beyond the internal self-assessment process
and introducing a rigorous, objective and external view of the
organisation’s status quo.
•
Energised employees
Organisations that participate in the assessment have
reported that pursuing such a common goal increases team
motivation and general energy levels among staff.
•
Objective perspective
A team of external experts would undertake a minimum of 40
hours of review on each business application.
•
Useful feedback
Each area receives a thorough written assessment of its
strengths as well as opportunities for improvement.
•
Results oriented
The TMBEA scoring system allocates 300 out of 1,000 points
to results, the bottom line in the review process. Such focus
helps an organisation determine its most critical functions
and improve performance in key areas such as finance,
customer satisfaction and loyalty, and process outcomes (eg
cycle time, serviceability and product quality).
TMBEA guidelines
The TMBEA framework is made up of 10 interrelated subsystems,
with the Leadership and Strategy subsystem acting as the main
“driver”. The subsystems designed to assist an organisation
improve its overall performance, are supported by elements that
describe in a focused manner the requirements for each area.
Detailed requirements for each subsystem and the model works
are illustrated below:
•
Leadership and Strategy
The Leadership component addresses how the top
management guides the organisation in setting values,
direction and performance expectations. Attention is given to
the way top management communicate with employees,
review performance and create an environment that
encourages high performance. The Strategy component looks
at how the organisation sets strategic directions and develops
objectives, guiding and strengthening overall performance
and competitiveness. It also looks at how objectives are
converted into action plans and how progress is assessed
relative to these plans.
Prevention and Problem Solving Management
The culture of continuous improvement is practised in this
subsystem. It looks at how the organisation encourages its
employees to participate in problem solving using data and
information analysis. Employees are trained in problem
solving methodology and are assessed on how they apply
these tools. Finally, this subsystem also assesses how the
organisation deploys, communicates and standardises its
problem-solving solutions.
Methodology
The review is done on a yearly basis. A team led by a
representatives of the management assesses each business area.
The team typically spends a few days reviewing systems and
processes and interviewing the relevant people in each area
before making suggestions and implementing these. Agreement is
sought from a representative of the business area on the
assessed strengths and opportunities for improvement before a
score is given.
•
Business Results
The Business Results subsystem computes all the results of
the other nine subsystems and classifies these into the
following areas: Customer-Focused, Finance and Market,
Employee Excellence, Supplier Excellence and Operational
Excellence. The results are then compared with those of
competitors and with best-in-class standards. Trend analysis
is used to show performance sustainability and improvement
over the years.
Process and Service Improvement
In the year 2003, several processes and service improvement
programmes were conducted to meet both the organisation’s and
customers’ needs which resulted in improved process performance.
Issues were addressed using improvement teams such as QIT/QCC,
task forces and the Six Sigma methodology. Process and Service
Improvement programmes are conducted with the following
objectives:
TMBEA MODEL
•
Improve frontline services such as outlet and operator
services
•
Increase the Customer Satisfaction Index (CSI)
•
Reduce customer complaints by 30%
•
Improve core operational processes by focusing on cycle
times and cost effectiveness
LEADERSHIP AND STRATEGY
CUSTOMER FOCUS
HUMAN RESOURCE
DEVELOPMENT &
INVOLVEMENT
SUPPLIER
MANAGEMENT
NEW PRODUCT/
SERVICE DEVELOPMENT
PROCESS MANAGEMENT &
IMPROVEMENT
CONTROL OF
OPERATIONAL SYSTEM &
EQUIPMENT
INFORMATION AND DATA
MANAGEMENT SYSTEM
FINANCIAL &
MARKET RESULTS
SUPPLIER AND
PARTNER RESULTS
TCS Convention
The annual TCS Convention serves to showcase the best
improvement teams, allowing them to present their project
findings. The convention allows such employees to be rewarded
and recognised. It also serves as an avenue for the sharing of
experiences and ideas on standards of best practice.
The TCS Convention is held at the state and national levels. Best
teams from the state level are selected to participate at the
national convention. In 2003, 15 state TCS conventions were
conducted which involved 202 QCC and QIT teams comprising
more than 1,600 employees.
PREVENTION AND
PROBLEM SOLVING
MANAGEMENT
CUSTOMER FOCUS RESULTS
The improvement projects for the year were targeted at improving
cost savings, reducing cycle times and increasing revenue. A total
of 199 QCC/QIT teams completed their projects with an estimated
savings of RM11.47 million (unaudited). Ten projects were identified
for standardisation.
HUMAN RESOURCE
RESULTS
ORGANIZATIONAL
SPECIFIC RESULTS
The winning teams also participated in the QCC Convention,
organized by the National Productivity Corporation (NPC). A total
of seven teams participated in the 2003 NPC Convention, of
which six were given the Gold rating. One QCC team named
“Tempow” from TM Facilities Eastern Zone had the distinction of
being chosen to participate in the International Convention Quality
Control Circle (ICQCC) in Tokyo, Japan, October 2003.
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•
We’re bridging the divide. Bringing Malaysia a step closer to the Vision.
ICT
Sports
Community
144
Our Contributions
to the Nation
Telekom Malaysia has always taken its role as a responsible
have a wide option of communications medium at their fingertips
corporate citizen seriously. Its core business of improving the
to communicate with the head office. Communication remains
quality of telecommunications itself serves as a very important
highly essential, both in our personal and working lives.
social function. Communication is integral to human nature. In
the not so distant past, people generally lived within relatively
In addition to contributing to the nation’s well being by making
fixed and not-too-large boundaries such that regular face-to-face
communication accessible and affordable, Telekom Malaysia also
communication would satisfy most individuals’ needs. In today’s
contributes to the community in other areas encompassing, social
borderless world, this is no longer the case. Corporations and
welfare and development, education, sports and health. Indeed, as
businesses have reached the far flung corners around the world.
the Group grows, so are its efforts in creating a healthier, more
People are sent to work in places away from home and loved ones
educated and equitable society. In many instances, Telekom Malaysia
with the advent of modern transportation. Also, people today like
has lent its technological edge to provide extensive global coverage
to travel widely and extensively on journeys of discovery.
of sponsored events, thus fulfilling yet another important element
to national growth – that of creating a stronger national brand
Technology has made us comfortable despite these changes.
identity via a more visible presence on the global map.
We are reachable and accessible despite the long distance. Only
20 years ago, a Malaysian studying abroad, would maintain
In year 2003, Telekom Malaysia continued to play its community
contact with home through weekly letters. But today the weekly
role to the best of its ability. In that sense, 2003 was not much
letters are replaced with daily e-mails. Similarly, workforces that
different from the previous years.
are required to spend long periods of time away from the office
SPORTS
attracted 22 teams from all over the world. The event was flagged
Sports plays an important role in every nation’s holistic
off on 31 January by Youth & Sports Minister Y.B. Datuk
development. While intellectual and economic progresses are
Hishamuddin Tun Hussein in Langkawi. The 10-day race covered
prerequisites, undoubtedly sports and a generally robust physical
Kangar, Butterworth, Kulim, Ipoh, Gerik, Tanah Merah, Kota
make-up go a long way too towards creating a well-balanced and
Bharu, Kuala Terengganu, Marang, Cukai, Kuantan, Bentong,
vibrant nation. The spirit of solidarity, patriotism and camaraderie
Seremban and Genting Highlands, and finally ended in Kuala
that sporting events could foster is quite likely unsurpassed by any
Lumpur on 9 February 2003.
other activity. One only has to witness the excitement and fervour
created by events such as the Formula 1 and World Cup to grasp
For the second consecutive year, Telekom Malaysia was the Title
the power of sports. If for only that reason, any effort towards
Sponsor of the event, and the race was named Telekom Malaysia
promoting sports at a national level has far-reaching consequences.
Le Tour de Langkawi. Title Sponsorship involved a contribution of
RM10 million, of which RM6 million was in cash, RM2 million for
Telekom Malaysia recognises the importance of sports and has
live telecast and the remaining RM2 million was in kind including
always played an important role in major sporting events in the
telecommunications services. Sponsorship of the event is a Group-
country. Apart from contributions in monetary terms, the Company
wide initiative with TM Cellular Sdn. Bhd. as the Official Cellular
also provides top-level telecommunications and broadcasting
Provider and TM Net Sdn. Bhd., the Official Internet Provider.
Malaysia in 2001, and the annual Telekom Malaysia Le Tour de
In conjunction with this race, a cycling workshop was held for the
Langkawi. Indeed, its promotion and support for sporting events
children of Sekolah Menengah Kebangsaan Mahsuri in the
held in the country is its direct contribution towards making
Langkawi capital of Kuah. Members of Team Telekom Malaysia –
Malaysia the destination on the world tourism and sports calendar.
comprising cyclists from Malaysia, Indonesia, Ireland, Hong Kong,
Iran and Italy – provided useful cycling and bicycle maintenance
The following were some of Telekom Malaysia’s more significant
tips. Interesting events for the local community were organised at
contributions to sports in year 2003:
each stage of the race which included an exhibition, carnival,
colouring contests for kindergarten children and stage events.
Telekom Malaysia Le Tour de Langkawi
Since its inception in 1996, the Telekom Malaysia Le Tour de
In line with its corporate citizen philosophy, Telekom Malaysia
Langkawi (TMLTdL) has gained increasing recognition and
also gave away bicycles to needy primary school students
prestige to emerge as the premier cycling event outside Europe.
identified with the cooperation of the respective State Education
The race takes participants across the length and breadth of the
Departments in the States along the race route.
country, including the scenic East Coast road. In 2003, the race
Community service, the cornerstone of
Telekom Malaysia’s social responsibility.
145
services for international events such as the SEA Games, held in
Formula 1
Since 2002, Telekom Malaysia has been sponsoring free tickets to
the Formula 1 car race at the Sepang International Circuit
including T-shirts, transport and food, for thousands of students.
In 2003, some RM470,850 in total was set aside for this purpose,
out of which RM388,600 went towards tickets. Apart from the
students, tickets were also distributed to Telekom Malaysia
corporate customers.
KL Grand Prix – International Showjumping
146
The equestrian Grand Prix – International Showjumping CSI was
held in Malaysia over four days in October 2003. The prestigious
showjumping event brought some of the world’s top riders from
20 countries to the Putra Stadium in Bukit Jalil. It was an honour
for the country as it was the first time the event was being held
in an Asian country. While promoting Malaysia as a suitable
destination for yet another world-class sporting event, it was also
a boost for the local equestrian scene. Telekom Malaysia, as one
of the sponsors of the event, contributed RM500,000.
Intellectual Development
As the country develops, there is a strong necessity to keep in
touch with global trends, thoughts, attitudes and opinions. One of
the many options at our disposal is to participate in intellectual
Among some of the projects in this area are the following:
discourse through international forums, seminars and dialogues
as platforms to gain insight into current issues of common
Nationwide SMI Roadshow
interest, trends and to help local enterprises and industries to
In February 2003, the SMI Association of Malaysia organised a
benchmark themselves against global standards of best practices.
nationwide roadshow on Competitive Positioning Towards AFTA &
Telekom Malaysia itself is an avid participant in telecommunication
WTO. The objective was to help small and medium-sized
workshops. Realising the need for other Malaysian organisations
companies prepare themselves for the impending changes and
to keep up with their respective industries, it also provides
challenges with the advent of AFTA and WTO. Recognising the
sponsorship to various initiatives that promote the exchange of
need for local organisations to be technologically updated to meet
ideas and the networking of companies, both at the national and
such challenges, Telekom Malaysia took up the role as the main
international levels.
sponsor and official telecommunications provider of the event
through a contribution of RM300,000. It also took the opportunity
to participate in the roadshow to market its own products,
particularly those beneficial to the SMEs.
Telekom Malaysia’s commitment to sporting excellence.
Telekom Malaysia, a leading supporter of ICT and
entrepreneurship development in Malaysia.
Asia Pacific ICT Awards 2003
The Asia Pacific ICT Awards (APICTA) is aimed at providing a
platform for ICT innovators and entrepreneurs in the region to
147
mutually benchmark their products. Its other objectives are to
stimulate economic and trade relations, sharing of technology and
creating business-matching opportunities and to draw the world’s
focus to this internationally recognised regional awards
programme. Telekom Malaysia contributed RM100,000 in cash to
APICTA 2003. In addition, it also sponsored The Prime Minister’s
Award, conferred to the overall winner, who had been judged as
the best among winners of the different categories.
Entrepreneurship Programme
Since the introduction of the Entrepreneurship Programme,
Telekom Malaysia’s Entrepreneurship Programme was introduced
Telekom Malaysia has provided support and assistance to 45
in 1994 in collaboration with the Ministry of Finance and
Bumiputra entrepreneurs who were involved in product
Perbadanan Usahawan Nasional Berhad (PUNB). The programme
development, payphone installation and the selling of scrap
has two main objectives – to develop competitive, proactive and
material, while 119 others were provided by various other
resilient Bumiputra entrepreneurs; and to increase their efficiency
services.
through cost reduction, increased productivity and improved cycle
times. In July 2003, Telekom Malaysia had further enhanced the
Telekom Malaysia works hand-in-hand with TM Research and
Entrepreneurship Programme. The revamped programme
Development (TMR&D) to help the entrepreneurs with their R&D
incorporates activities for Entrepreneur Development and vendors.
requirements such as product testing and verification,
benchmarking and the transfer of technology. In addition,
seminars, workshops, training and industrial visits with the
objective of increasing the knowledge and skills of the
entrepreneurs were organised.
Organisation of Islamic Conference (OIC) Expo 2003
A Booster for Kuala Lumpur General Hospital
The OIC Expo was held from 14-19 October 2003, in conjunction
Telekom Malaysia contributed RM15,000 to Kuala Lumpur General
with the Organisation of Islamic Conference (OIC) summit at Putra
Hospital (KLGH) for the improvement on its transmission antenna
Jaya. It was held for the first time in Malaysia. The exposition
equipment to provide clearer pictures on TV sets in their wards.
was designed to promote and expand trade and investment
Part of the contribution also went towards landscaping of the
opportunities among the 57 OIC member countries, showcasing a
KLGH compound. Telekom Malaysia’s DUTA (ambassadors) were
combination of business, tourism, culture, entertainment and
on hand to take part in the landscaping and gotong-royong
educational opportunities that OIC nations offer.
activities. While there, the DUTA interacted with the patients and
obtained feedback on Telekom Malaysia’s various products and
Telekom Malaysia sponsored RM316,000 in kind to the expo as
services.
its official communications provider. This included equipping the
press centre and secretariat’s office with communication facilities
including broadcast services. Telekom Malaysia also made use of
Assistance to Pilgrims
the opportunity to showcase its own innovative products and
Since 1995, Telekom Malaysia has been providing assistance to
services themed ‘Opening Up Possibilities’ at its exhibition booth.
Muslims who have been scheduled to perform their pilgrimage. In
keeping with this tradition in 2003, the Company donated
RM368,600 worth of accessories in the form of 50,000 sling
COMMUNITY WELFARE
bags, 50,000 shoe bags and 120,000 luggage tags to the pilgrims
As a corporate citizen, mindful of its social responsibility, Telekom
to make their journey more comfortable.
148
Malaysia has been actively involved in activities that contribute
towards the general well-being of fellow members of the
In addition, Telekom Malaysia also continues to provide the
community.
Malaysia Direct Call service to enable pilgrims to call home with
the charges being borne by the number in Malaysia. Pilgrims
Among the programmes, were the following:
were also able to call home on their prepaid Ring Ring cards.
Pamphlets giving instructions on how to use the Malaysia Direct
Contribution to the Malaysian AIDS Foundation
and card service were distributed to all pilgrims before their
The Malaysian AIDS Foundation (MAF) was set up with the
journey. Telekom Malaysia also stationed its staff in Mecca and
objective of providing financial assistance and emotional support
Medinah to provide assistance to the pilgrims when needed.
to Malaysians with AIDS. In 2003, MAF ran a campaign called
In the Name of Love, to provide financial assistance to AIDS
patients and to create greater awareness of AIDS among the
TM Net Golf Series
public. Telekom Malaysia contributed RM250,000 to MAF in
In March 2003, TM Net Sdn. Bhd. kicked off the TM Net Charity
support of this campaign.
Golf Classic series to raise funds for its cyber school community
project, a programme to equip needy schools, especially those
from rural areas, with computers connected via tmnet streamyx.
The Charity Golf Classic enabled TM Net to contribute 17
computers to the cyber school project. In addition, RM20,000
was channeled to Majlis Kanser Nasional (MAKNA) to finance the
treatment of cancer patients.
Awards &
Recognition
•
Telekom Networks Malawi Limited (TNM) won a platinum
International Arch of Europe Award on 3 March 2003, for its
commitment to quality and technology.
•
In 2003, MTN Networks Pvt. Ltd., Telekom Malaysia wholly
owned subsidiary in Sri Lanka the GSM Award for “Best Use
of Wireless for Emergency Situations”. This award was
received for a record 3rd consecutive year.
•
Telekom Malaysia was placed ninth among the 20 Best
Employers in Asia 2003; and third among the Top 10
Employers in Malaysia. The rankings were based on a Hewitt
Associates survey on 84,000 employees from 300 companies
in eight countries, conducted in association with the Asian
Wall Street Journal and the Far Eastern Economic Review.
•
On 9 June 2003, Telekom Malaysia won the Leader in
Telecommunications Sector and Most Improved Company by
Absolute Increase in Profit awards given in conjunction with
the launch of the Malaysia 1000 Directory.
•
Telekom Malaysia’s 2002 Annual Report won the Industry
Excellence Award – Trading & Services for the seventh time
and the Best Designed Annual Report for the first time at the
National Annual Corporate Report Awards (NACRA) 2003 on
4 December 2003.
•
The Good 2 Talk billboard won the Anugerah Citra Iklan
(Papan Iklan), organised by the Dewan Bahasa & Pustaka, on
10 December 2003. The caption: “Jauh di Mata, Dekat di
Hati” won the judges’ hearts. The award recognises excellence
in the use of Bahasa Melayu, as well as presentation creativity.
•
TM Facilities Sdn. Bhd. won the Anugerah Emas Juara
Keseluruhan given by PUSPAKOM (Pusat Permeriksaan
Kenderaan Berkomputer Sdn. Bhd.) in recognition of
excellence in safety and environmental standards in vehicles.
•
Telekom Malaysia received an award for being the largest
paymaster of service taxes by the Malaysian Royal Customs.
The award was received at the Majlis Perasmian Sambutan
Hari Kastam Sedunia XXII on 26 January 2004.
•
The Jalan Ampang branch of Celcom (M) Berhad bagged the
Anugerah Kualiti Menteri Tenaga Komunikasi & Multimedia
for providing the best customer service in 2003.
01
02
03
29 January 2003 [03]
In conjunction with the Telekom Malaysia Le Tour de Langkawi
2003, Telekom Malaysia conducted a bicycle clinic for students of
Sekolah Menengah Kebangsaan Mahsuri, Kuah, Langkawi. The
objective was to encourage greater participation of the local
community, especially school children, in the bicycle race and
150
also to impart tips on how to handle bicycles.
HIGHLIGHTS OF
THE YEAR 2003
Annual Report 2003
16 January 2003 [01]
04
Telekom Malaysia held a prize giving ceremony for winners of the
Telekom Malaysia “Hello & Menang” RM1,000,000 competition at
Menara Kuala Lumpur. This was the third year the competition
was organised by Telekom Malaysia, and more than 760,000
entries were received. The lucky winner of the grand prize was
Cik Suniati Omar of Kuala Lumpur, who took home cash worth
RM100,000 plus a million RealRewards gift points.
31 January 2003 [04]
26 January 2003 [02]
Youth & Sports Minister, Y.B. Dato’ Hishammuddin Tun Hussein
Telekom Malaysia introduced its Cavalcade vehicles in conjunction
flagged off the Telekom Malaysia Le Tour de Langkawi 2003 at a
with the Telekom Malaysia Le Tour de Langkawi 2003. The
ceremony in Langkawi. Present at the ceremony was Telekom
Cavalcade was used to promote Telekom Malaysia’s products and
Malaysia’s Chairman, Y.Bhg. Tan Sri Dato’ Ir. Md. Radzi Mansor.
services such as its fixed line services, VoIP, iTalk card, Ring Ring
The 10-day race, which toured Langkawi, Kangar, Butterworth,
card, Ezeephone, TM Infoline, TM Net and TMTOUCH products,
Kulim, Ipoh, Gerik, Tanah Merah, Kota Bharu, Kuala Terengganu,
the BlueHyppo portal and the RealRewards Loyalty Card. With a
Marang, Cukai, Kuantan, Bentong, Seremban and Genting
sponsorship of RM10 million, Telekom Malaysia is the Title
Highlands, ended in Kuala Lumpur on 9 February 2003.
Sponsor of the world-class cycling event.
05
06
10 February 2003 [05]
13 February 2003 [06]
Former Prime Minister, Y.A.Bhg. Tun Dr. Mahathir Mohamad
Telekom Malaysia introduced the new line-up for its football team
officiated at the opening of Menara Telekom, the new corporate
for the Premier League One 2003. It included two imported
headquarters of Telekom Malaysia at Jalan Pantai Baharu, Kuala
players from Ghana. The team, formed in 1996 and registered
Lumpur. Towering at a height of 310 metres and equipped with
under the Melaka Football Association, played in the FAM league
state-of-the-art features, Menara Telekom is poised to be the
for four years. It emerged tops in 1999 and qualified to play in
latest landmark in Kuala Lumpur.
the Premier League Two in 2000. In 2003, Telekom Malaysia
carried out a major revamp-up of the team by replacing some
players as well as the management including the coaches in an
151
effort to shore up its strength and capability.
07
08
21 March 2003 [07]
9 April 2003 [08]
Telekom Malaysia contributed tickets worth RM145,000 to more
Telekom Malaysia, in collaboration with the k-Economy Division of
than 1,400 students from 35 schools around Wilayah Persekutuan
the Melaka Chief Minister’s Office, launched designation of the
Kuala Lumpur and Selangor for the Formula One Petronas
Hang Tuah IT Mall and Telekom Training College as the Malacca
Malaysian Grand Prix 2003. Telekom Malaysia also provided
Community Creative Centre. The programme was aimed at
t-shirts, caps, transportation to the F1 track and food for the
promoting a community-oriented culture by enhancing relationships
students. Parliamentary Secretary, Ministry of Education, Y.B.
with customers through the development of innovative products
Dato’ Dr. Mahadzir Mohd Khir gave away the tickets to the
and services. Melaka Chief Minister, Y.A.B. Datuk Seri Haji Mohd
students at a ceremony held at Menara Telekom.
Ali Rustam officiated at the launch.
09
10 April 2003 [09]
Telekom Malaysia held a seminar entitled Teknologi Maklumat dan
Komunikasi Kerajaan Negeri Pahang in collaboration with the
Pahang State Development Corporation (PKNM). It is in support
of the State Government’s objective to produce a community of
k-workers. The seminar aimed at enhancing understanding of the
latest telecommunication technologies among the 150 participants.
The seminar was also attended by Pahang Menteri Besar, Y.A.B.
Dato’ Sri Haji Adnan Yaakob, state Exco members, various heads
of departments and representatives of state government agencies
was also attended the Seminar.
17 April 2003 [10]
The merger between TM Cellular Sdn. Bhd. and Celcom
(Malaysia) Berhad was legally completed with the transfer of
ownership of TM Cellular from Telekom Malaysia to Celcom. The
move gave Telekom Malaysia an increased shareholding in
152
Celcom from 31.25% to 47.93%. The transaction valued at
RM6.93 billion represented one of the largest mergers in the
HIGHLIGHTS OF
THE YEAR 2003
Malaysian corporate history. Celcom and TM Cellular were valued
at RM5.25 billion and RM1.68 billion respectively.
Annual Report 2003
10
11
12
6 May 2003 [11]
22 May 2003 [12]
Telekom Research & Development Sdn. Bhd. (TM R&DSB), a
In conjunction with the “World Telecommunications Day 2003” on
wholly owned subsidiary of Telekom Malaysia, was awarded the
17 May 2003, Telekom Malaysia held a three-day carnival from
prestigious ISO 9001:2000 Certification by SIRIM QAS
22 to 24 May. Besides an exhibition, the Company also organised
International Sdn. Bhd., a wholly owned subsidiary of SIRIM
interesting activities such as quizzes, games and stage
Berhad. TM R&DSB was incorporated on 1 January 2001, to
performances by well-known local deejays and artists at the lobby
spearhead Telekom Malaysia’s R&D activities and has been
of Menara Telekom. Minister of Energy, Communications &
gearing up to be the leading research company in communication
Multimedia, Y.B. Datuk Amar Leo Moggie was present to officiate
technologies. The R&D conducts researches on areas such as
at the opening ceremony.
photonic technology, wired and wireless communications,
information and communications security, network technology as
well as microelectronics and advanced materials.
13
14
24 May 2003 [13]
10 June 2003 [14]
Telekom Malaysia launched the Erti Merdeka campaign in
The seven winners of the second season of the Telekom Malaysia
collaboration with the Ministry of Education and the Ministry of
Talking Telephone Numbers (TMTTN) Interactive Quiz received
Culture, Arts & Tourism as part of its Merdeka Day celebrations.
their cash prizes of RM10,000 each at a ceremony held in
The campaign featured three categories of contests, i.e. sajak
collaboration with Sistem Televisyen Malaysia Berhad. The
writing, lyrics writing and website design. It was open to
winners hailed from all over the country.
Malaysian students aged between 13 and 22 years. The objective
of the campaign was to inculcate and build the spirit of patriotism
153
among one youths through creative writings and website design.
15
16
1 July 2003 [15]
22 July 2003 [16]
Telekom Malaysia contributed RM100,000 towards the Asia
Telekom Malaysia launched a New Entrepreneurship Programme
Pacific ICT Awards 2003 (APICTA), and became the sponsor of
to enhance its earlier programme introduced in 1994. The
the Prime Minister’s Award, which was presented to the “Best of
programme aims to develop competitive, proactive and resilient
the Best” among the winners of all categories. Telekom Malaysia
Bumiputera entrepreneurs. It was launched by Y.B. Dato’ Seri
Deputy Chief Executive, Y.Bhg. Dato’ Dr. Abdul Rahim Haji Daud
Mohamed Nazri Abdul Aziz, Minister of Entrepreneurship
presented the mock cheque to the Minister of Energy,
Development.
Communications & Multimedia, Y.B. Datuk Amar Leo Moggie.
17
18
19
1 September 2003 [19]
Telekom Malaysia participated in the four-day Asean
Communications & Multimedia (ACM) Expo 2003 from 2 to 5
September, held in conjunction with the Malaysia ICT Week 2003.
The Company has been participating in ACM as a major exhibitor
over the past five years. Last year, Telekom Malaysia adopted
“Opening Up Possibilities” as the theme for its booth in line with
the Company’s proactive philosophy of acting as a catalyst in the
154
evolution of communications in Malaysia.
HIGHLIGHTS OF
THE YEAR 2003
Annual Report 2003
7 August 2003 [17]
20
Telekom Malaysia signed a sponsorship agreement worth
RM316,000 with F&R Exhibition and Conference Sdn. Bhd. and
designated as the Official Communications Provider for the OIC
Expo 2003. Under the sponsorship, Telekom Malaysia provides
the Press Centre and the Secretariat’s Office with communication
facilities including leased lines, telephones, fax machines, trunk
radios/walkie talkies, hand phones, starter packs and TMTOUCH
reload cards as well as broadcast facilities. Y.Bhg. Dato’ Dr. Idris
Ibrahim, Chief Operating Officer of TM TelCo, signed the agreement
14 October 2003 [20]
on behalf of Telekom Malaysia.
Telekom Malaysia participated in the six-day OIC Expo 2003, held
in conjunction with the 10th Organisation of the Islamic
Conference Summit. Teaming up with its subsidiaries, the
12 August 2003 [18]
Company showcased a host of innovative products and services.
Telekom Malaysia participated in the ICT Baling – Sik 2003
As the leading communications company in the country, Telekom
Carnival, organised by the Ministry of Energy, Communications &
Malaysia has participated actively in international and domestic
Multimedia and the Multimedia Development Corporation at the
initiatives to position Malaysia as a key communications and
Sekolah Menengah Kebangsaan Kuala Ketil, Kedah. An exhibition
multimedia hub.
themed “Opening Up Possibilities” was held where Telekom
Malaysia showcased various products and services. The carnival
was officiated by Kedah Menteri Besar, Y.A.B. Dato’ Seri Syed
Razak Syed Zain and Y.Bhg. Dato’ Dr. Idris Ibrahim, Chief
Operating Officer of TM TelCo.
21
22
8 November 2003 [22]
Telekom Training College held its 8th Convocation Ceremony for
Telekom Malaysia participated in a three-day programme, called
194 students graduating from the School of Telecommunications,
the Penang I-Land Lifestyle, organised by the Secretariat of the
Information Technology, Business Management and Multimedia
Socio-economic & Environmental Research Institute (SERI).
Studies. The students received their diplomas from Y.B. Datuk Tan
Included in the programme, which was supported by the Penang
Chai Ho, Deputy Minister of Energy, Communications &
State Government K-ICT Council, were an exhibition and a two-
Multimedia. Also present was Chief Executive, Y.Bhg. Dato’ Dr.
day seminar targeted at residential consumers and small business
Md Khir Abdul Rahman.
users.
155
18 October 2003 [21]
23
23 December 2003 [23]
Telekom Malaysia held a groundbreaking ceremony for the
development of its new international Submarine Cable Station at
Pengkalan Balak, Melaka. The station will house two new cable
systems, namely the Dumai-Melaka Submarine Cable System
(DMCS) and the South East Asia-Middle East-Western Europe 4
Submarine Cable System (SEA-ME-WE 4). The DMCS involves
collaborative between Telekom Malaysia and PT Telkom Indonesia,
and is targeted to be operational by the second quarter of 2004.
It will serve as an alternative to the existing cable landing station
in Kuala Muda, Kedah, to connect Malaysia and Indonesia.
Corporate & Social Responsibilities
01
... CARING FOR
SHAREHOLDERS>>
156
02
Annual Report 2003
27 February 2003 [01]
20 May 2003 [02]
Telekom Malaysia registered RM9.83 billion in revenue during the
The Company’s 18th Annual General Meeting was held at The
year ended 31 December 2002, marking an increase of 1.7% over
Legend Hotel, Kuala Lumpur. Y.Bhg. Tan Sri Dato’ Ir. Md. Radzi
the previous year. This increase was due to growth in the fixed
Mansor, Chairman of Telekom Malaysia chaired the meeting. The
line, mobile, Internet and data services sectors. According to
Chief Executive, Board of Directors and Management team were
Chief Executive, Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman, the
also present. Approximately 1,000 shareholders and proxies
mobile sector in particular had recorded rapid growth, contributing
attended the meeting, during which several resolutions including
18.5% of the Group’s revenue. The Company’s long-term target is
the declaration of a 10% dividend were passed.
to achieve 30% contribution to the cellular segment of its overall
revenue.
02
... CARING FOR
CUSTOMERS>>
4 November 2003 [01]
17 December 2003 [02]
In conjunction with Hari Raya Aidilfitri, Telekom Malaysia
Telekom Malaysia launched a Call ‘n’ Surf and K-Economy Shop
launched a campaign aptly named Syoknya Raya at selected
in the Melaka Mall in conjunction with the declaration of 2003 as
locations targeted at those who celebrate Hari Raya. The objective
the Year of ICT Melaka. The communications centre provides
of the campaign was to forge a closer relationship between
customers with a wide range of Telekom Malaysia products and
Telekom Malaysia and the community at large, and at the same
services, such as Internet, facsimile, local and international calls,
time create greater awareness of Telekom Malaysia’s latest
prepaid and postpaid cards, Eazyway Kiosk and Wartel, all under
products and services.
one roof. The project supports the Melaka State Government’s
aspiration to develop an IT literate community well versed in
the use of ICT products and services to improve their standard
of living.
157
01
01
... CARING FOR
EMPLOYEES>>
158
02
04
Annual Report 2003
03
05
06
07
6 January 2003 [01]
6 July 2003 [05]
Telekom Malaysia treated some 7,000 employees and their
Telekom Malaysia treated 331 retired employees and their spouses
families to a Hari Raya celebration at Menara Telekom in Kuala
to a three-day event in Langkawi. At the end of this “holiday” was
Lumpur. Its objective is to enhance relationships between
a special dinner reception, fondly known as Jasamu Dikenang,
management and employees. At the annual gathering, Telekom
during which the retirees were honoured for their service,
Malaysia also feted 200 orphans. Among them were 30 orphans
dedication and determination in making Telekom Malaysia as one
from among children of the staff while the rest were from four
of the most outstanding communication companies in the country.
orphanages in the Klang Valley.
In his speech, Chairman, Y.Bhg. Tan Sri Dato’ Ir. Md. Radzi
Mansor conveyed his deep appreciation for the contribution of the
retirees, adding that their dedication had helped the Company win
14 January 2003 [02]
numerous awards, including the Leader in Telecommunications
Telekom Malaysia bade a warm farewell to employees who had
Sector and Most Improved Company by Absolute Increase in
opted for the Voluntary Separation Scheme (VSS) in a gathering
Profit, which had been conferred during the launch of the
held at the Putra World Trade Centre. Of the total of 1,761
Malaysian Top Corporate Directory. Another Jasamu Dikenang for
employees who were leaving, 762 were from the Klang Valley.
the next batch of retirees was held in December 2003.
The reception was held to show Telekom Malaysia’s appreciation
and recognition of the employees’ loyalty, sacrifice and
contribution throughout their working years.
23 December 2003 [06]
Telekom Malaysia honoured its 63 scholars at an awards
19 March 2003 [03]
in recognition of their exceptional academic and extra-curricular
Telekom Malaysia presented 83 employees with Excellence
achievements. Scholars who qualified with First Class Honours
Awards during a special ceremony held in conjunction with the
and Masters Degrees received RM1,000 in cash, an appreciation
annual Total Customer Satisfaction Convention. The awards were
certificate and a memento each, while Diploma holders and SPM
presented by Chief Executive, Y.Bhg. Dato’ Dr. Md Khir Abdul
students received RM500, an appreciation certificate and a
Rahman and Deputy Chief Executive, Y.Bhg. Dato’ Dr. Abdul
memento.
Rahim Haji Daud. The Excellence Award presentation to
employees and divisions is an annual event and is part of
Telekom Malaysia’s programme for quality improvement.
24 December 2003 [07]
Telekom Malaysia feted some 7,000 employees and their families
to a Hari Raya celebration at Menara Telekom in Kuala Lumpur
3 July 2003 [04]
aimed at enhancing relationships between the management and
Some 600 Telekom Malaysia employees of all ages and levels
employees. The Company also invited 100 orphaned children of
from 13 state contingents gathered at the Tun Fatimah Stadium,
ex-staff to the function. Minister of Energy, Communications and
Bukit Serindit, Melaka, to participate in the Company’s Twelfth
Multimedia Malaysia, Y.B. Datuk Amar Leo Moggie was guest of
National Athletics Championship (KOTMA XII). The biannual
honour while Chairman, Y.Bhg. Tan Sri Dato’ Ir. Md. Radzi Mansor
programme is aimed at giving employees the opportunity to work
and Chief Executive, Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman
together and strengthen their relationships as well as to
played joint hosts.
encourage closer ties through the spirit of sportsmanship
between employees from the different states.
159
presentation ceremony held at Holiday Villa, Subang. It was held
01
160
02
Annual Report 2003
03
... CARING FOR
COMMUNITY>>
04
14 March 2003 [01]
10 November 2003 [03]
As a caring corporate organisation, Telekom Malaysia took
Telekom Malaysia organised a Majlis Berbuka Puasa with
another step to get closer to the community by organising an
members of the media at the Hilton Hotel, Petaling Jaya. Some
event entitled Sentiasa Bersamamu at Kuala Lumpur General
250 media representatives and Telekom Malaysia’s top
Hospital (HKL). The objective is to create better rapport between
management were present. The event was held to enhance
Telekom Malaysia and the hospital. Under this programme the
Telekom Malaysia’s rapport with the media.
Company contributed RM15,000 to HKL in the form of
landscaping and transmission antenna equipment.
18 December 2003 [04]
50,000 sets of sling bags, punjut kasut and 120,000 sets of
Telekom Malaysia feted the winners of its Erti Merdeka contest
luggage tags with a total value of RM368,600 to pilgrims going
held in conjunction with Merdeka Day celebrations in a star-
to Mecca. The Company also provided the pilgrims with Malaysia
studded event at Menara Telekom. The contest was open to
Direct Service, which would enable them to call home for free
students in the upper secondary schools and institutions of higher
with the charges being borne by the local numbers dialed.
learning. It involved writing of poems and lyrics on independence
This service has been provided to pilgrims performing the Haj
and patriotism as well as “Merdeka” website designs. The
since 1995.
winning entries were sung and recited by personalities like
Dayang Nurfaizah, Nora, Hazami, Fazley, Ezlynn, Deja Moss, Lim
Swee Tin, Ogy Ahmad Daud, Julfekar, Tengku Khalida, Zaibo and
Dr. Wan Zawawi. The Malam Anugerah Erti Merdeka was brought
live from Menara Telekom to Malaysian viewers in collaboration
with TV3. Twelve grand winners of the contest walked away with
RM4,000 each. Prizes were presented by Y.B. Datuk Amar Leo
Moggie, Minister of Energy, Communications & Multimedia
Malaysia.
161
Telekom Malaysia continued with its noble tradition of contributing
28 August 2003 [02]
162
REPORTS AND
FINANCIAL STATEMENTS
Annual Report 2003
Directors’ Report
163
Significant Accounting Policies
169
Income Statements
177
Balance Sheets
178
Consolidated Statement of
Changes in Equity
179
Company Statement of
Changes in Equity
180
Cash Flow Statements
181
Notes to the Financial Statements
182
Statement by Directors
249
Statutory Declaration
249
Report of the Auditors
250
General Information
251
DIRECTORS’ REPORT
FOR THE YEAR ENDED
1.
31 DECEMBER 2003
The Directors have pleasure in submitting their annual report and the audited financial statements of the Group and of the
Company for the year ended 31 December 2003.
PRINCIPAL ACTIVITIES
2.
The principal activities of the Company during the year are the establishment, maintenance and provision of telecommunication
and related services under the licence issued by the Minister of Energy, Communications and Multimedia. The principal activities
of the subsidiaries are set out in note 43 to the financial statements. There was no significant change in the nature of these
activities during the year.
RESULTS
The results of the operations of the Group and of the Company for the year were as follows:
THE GROUP
RM million
4.
THE COMPANY
RM million
Profit after taxation
Minority interests
1,444.2
(53.8)
529.0
—
Profit for the year attributable to shareholders
1,390.4
529.0
In the opinion of the Directors, the results of the operations of the Group and of the Company during the year were not
substantially affected by any item, transaction or event of a material and unusual nature other than as disclosed in note 42 to
the financial statements.
DIVIDENDS
5.
Since the end of previous year, the dividends paid, declared or proposed by the Company are as follows:
RM million
(a)
In respect of the year ended 31 December 2002, a final gross dividend of 10.0 sen
per share less tax of 28% was paid on 23 June 2003
– amount as proposed in the Directors’ Report for that year
– increase due to exercise of share options
228.0
0.4
228.4
(b)
The Directors now recommend a final gross dividend of 10.0 sen per share less tax of 28% (2002: 10.0 sen per share less
tax of 28%) and a special gross dividend of 10.0 sen per share less tax of 28% (2002: Nil) subject to the shareholders’
approval at the forthcoming Annual General Meeting of the Company.
163
3.
DIRECTORS’ REPORT
FOR THE YEAR ENDED
31 DECEMBER 2003
EMPLOYEES’ SHARE OPTION SCHEME
6.
The existing Employees’ Share Option Scheme 3 (ESOS 3) was approved by the shareholders at an Extraordinary General Meeting
held on 21 May 2002. On 1 August 2002, options to subscribe for 259,042,000 ordinary shares of RM1 each under ESOS 3 were
granted to eligible Executives and Non-Executives of the Company and its subsidiaries at an exercise price of RM7.09 per share.
The principal features of ESOS 3 are as disclosed in note 10(e) to the financial statements.
As at 31 December 2003, options to subscribe for 170,456,000 ordinary shares of RM1 each at the option price of RM7.09 per
share under ESOS 3 remained unexercised. These options remain in force until 31 July 2007. These options granted do not confer
any right to participate in any share issue of any other company.
The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the list of option
holders and their holdings pursuant to Section 169(11) of the Companies Act, 1965, except for information of employees who
were granted options of above 100,000 shares each.
164
Other than the Directors’ options disclosed in paragraph 18 below, the list of employees of the Company and its subsidiaries who
were granted more than 100,000 options each under ESOS 3 are as follows:
Name
Designation
Dato’ Dr. Ir. Mohamad Khir Harun
Chief, Group Business Restructuring and
Coordination, TM
Chief Operating Officer, TM TelCo
Chief Executive Officer, VADS Berhad
Chief Strategy Officer, Telkom SA Limited*
Chief Financial Officer, TM TelCo
Senior Vice President, Network Services, TM TelCo
Vice President, Network Development, TM TelCo
Senior Vice President, Major Business & Government,
TM TelCo
Vice President, Corporate Strategy & Planning, TM
Chief Executive Officer, TM Net Sdn. Bhd.*
Chief Executive Officer, TM Facilities Sdn. Bhd.*
Dato’ Dr. Idris Ibrahim
Yusof Ampuan Kechil**
Tan Chian Khai
Hj. Hamis Hasan
Mohd Yahaya Mohd Shariff
Towfek Elias
Dato’ Adnan Rofiee
Abdul Majid Abdullah
Dato’ Baharum Salleh
Hamzah Yacob
No. of options No. of shares
granted
exercised
120,000
Nil
120,000
120,000
120,000
120,000
120,000
120,000
Nil
48,000
Nil
Nil
10,000
Nil
108,000
108,000
108,000
108,000
Nil
42,000
Nil
Nil
TM – Telekom Malaysia Berhad
* Employees of TM, seconded to respective subsidiaries/associate
** This employee had resigned from the Group with effect from 1 January 2004 and hence the remaining unexercised options
had lapsed
SHARE CAPITAL
7.
On 31 March 2003, the authorised share capital of the Company has been increased to include 1,000 Class A Redeemable
Preference Shares of RM0.01 each and 1,000 Class B Redeemable Preference Shares of RM0.01 each.
8.
During the year, the issued and fully paid-up share capital of the Company was increased by the issuance of 83,725,000 ordinary
shares of RM1 each at the option price of RM7.09 per share for cash under ESOS 3. These shares rank pari-passu in all respects
with the existing issued ordinary shares of the Company.
REDEEMABLE PREFERENCE SHARES AND UNSECURED BONDS
9.
On 12 December 2003, the Company issued for cash 1,000 Class A Redeemable Preference Shares (RPS) (TM RPS A) and 1,000
Class B RPS (TM RPS B) to Rebung Utama Sdn. Bhd. (RUSB), a special purpose entity of the Company, at a premium of RM0.99
each over the par value of RM0.01 each.
TM RPS A and TM RPS B rank pari-passu amongst themselves but below the Special Share and ahead of the ordinary shares
of the Company in a distribution of capital in the event of the winding up or liquidation of the Company. TM RPS A and TM RPS
B have been classified as liabilities.
Subsequently, on 30 December 2003, the Company issued the following bonds (collectively referred to as TM bonds) to RUSB:
(i)
(ii)
RM1,983.5 million nominal value 10-year redeemable unsecured bonds due 2013; and
RM1,000.0 million nominal value 15-year redeemable unsecured bonds due 2018.
Tekad Mercu had, in turn, issued RM2,000.0 million nominal value 10-year redeemable unsecured bonds due 2013 and
RM1,000.0 million nominal value 15-year redeemable unsecured bonds due 2018 (collectively referred to as Tekad Mercu bonds)
to investors on 30 December 2003 to finance the subscription of the RUSB RPS.
Details of TM RPS A, TM RPS B, TM bonds and Tekad Mercu bonds are set out in note 14 to the financial statements.
MOVEMENTS ON RESERVES AND PROVISIONS
10.
All material transfers to or from reserves or provisions during the year have been disclosed in the financial statements.
OTHER STATUTORY INFORMATION
11.
12.
Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps to:
(a)
ascertain that actions had been taken in relation to the writing off of bad debts and the making of allowance for doubtful
debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made
for doubtful debts; and
(b)
ensure that any current assets which were unlikely to be realised at their book value in the ordinary course of business
had been written down to their expected realisable values.
At the date of this report, the Directors are not aware of any circumstances which:
(a)
would render the amounts written off for bad debts or the amount of allowance for doubtful debts in the financial
statements of the Group and of the Company inadequate to any substantial extent or the values attributed to current assets
in the financial statements of the Group and of the Company misleading; and
(b)
have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the
Company misleading or inappropriate.
165
As part of an overall cost efficient funding structure, the funds for the subscription of the Company’s RPS and bonds were raised
by RUSB vide the issuance of RM2,987.0 million RPS (RUSB RPS) to Tekad Mercu Berhad (Tekad Mercu), another special
purpose entity of the Company.
DIRECTORS’ REPORT
FOR THE YEAR ENDED
31 DECEMBER 2003
OTHER STATUTORY INFORMATION (continued)
13.
In the interval between the end of the year and the date of this report:
(a)
no items, transactions or other events of material and unusual nature has arisen which, in the opinion of the Directors,
would substantially affect the results of the operations of the Group and of the Company for the year in which this report
is made; and
(b)
no charge has arisen on the assets of any company in the Group which secures the liability of any other person nor has
any contingent liability arisen in any company in the Group.
14.
No contingent or other liability of any company in the Group has become enforceable or is likely to become enforceable within
the period of twelve months after the end of the year which, in the opinion of the Directors, will or may affect the ability of the
Group or of the Company to meet their obligations when they fall due.
15.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial
statements of the Group and of the Company, which would render any amount stated in the financial statements misleading.
166
DIRECTORS
16.
The Directors in office since the date of the last report are as follows:
Directors
Ir. Prabahar N. K. Singam
Rosli bin Man
Tan Poh Keat
17.
Alternate Directors
In accordance with Article 103 of the Company's Articles of Association, the following Directors retire from the Board at the
Nineteenth Annual General Meeting and being eligible offer themselves for re-election:
Ir. Prabahar N. K. Singam
Rosli bin Man
Tan Poh Keat
DIRECTORS’ INTEREST
In accordance with the Register of Directors' Shareholdings, the Directors who held office at the end of the year have interest in
shares and options over shares in the Company and subsidiaries are as follows:
Number of ordinary shares of RM1 each
Interest in the Company
– Direct
– Direct
– Direct
– Direct
– Indirect (shares held by spouse)
Tan Poh Keat
– Direct
Balance at
1.1.2003
Bought
Sold
Balance at
31.12.2003
123,500
—
—
123,500
—
70,000*
—
70,000
97,000
68,000*
—
165,000
15,000
1,500
—
—
—
—
15,000
1,500
15,000
—
—
15,000
* Options exercised during the year
167
18.
Number of options over ordinary shares of RM1 each
Balance at
1.1.2003
Granted
Exercised
Balance at
31.12.2003
178,000
171,000
—
—
70,000
68,000
108,000
103,000
Interest in VADS Berhad
Tan Poh Keat
Balance at
1.1.2003
Bought
Sold
Balance at
31.12.2003
11,000
10,000
10,000
10,000
10,000
10,000
—
—
—
—
—
—
—
—
—
—
—
—
11,000
10,000
10,000
10,000
10,000
10,000
Interest in Celcom (Malaysia) Berhad
Tan Poh Keat
Balance at
the date of
acquisition
Bought
20,000
22,000
—
—
Sold
20,000#
22,000#
Balance at
31.12.2003
—
—
# Shares sold pursuant to compulsory acquisition undertaken by Telekom Enterprise Sdn. Bhd., details as described in note 2 to
the financial statements
DIRECTORS’ REPORT
FOR THE YEAR ENDED
31 DECEMBER 2003
DIRECTORS’ INTEREST (continued)
19.
In accordance with the Register of Directors’ Shareholdings, none of the other Directors who held office at the end of the year
have any direct or indirect interests in the shares in the Company and its related corporations during the year.
DIRECTORS’ BENEFITS
20.
Since the end of the previous year, none of the Directors have received or become entitled to receive any benefit (except for the
Directors’ fees, remuneration and other emoluments as disclosed in note 4 to the financial statements) by reason of a contract
made by the Company or a related corporation with the Director or with a firm of which he is a member or with a company in
which he has a substantial financial interest and any benefit that may deemed to have been received by certain Director in respect
of the contract referred to in note 33 to the financial statements.
21.
Neither during nor at the end of the year was the Company or any of its related corporations, a party to any arrangement with
the object(s) of enabling the Directors to acquire benefits by means of the acquisition of shares in, or debentures of the Company
or any other body corporate, other than options granted to the Directors pursuant to ESOS 3.
168
AUDITORS
22.
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
In accordance with a resolution of the Board of Directors dated 26 February 2004.
Chairman
Chief Executive
SIGNIFICANT ACCOUNTING POLICIES
FOR THE YEAR ENDED
31
DECEMBER
2003
The following accounting policies have been used consistently in dealing with items which are considered material in relation to the
financial statements, unless otherwise stated.
1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements of the Group and of the Company have been prepared under the historical cost convention except as
disclosed in the Significant Accounting Policies below.
The financial statements comply with the applicable approved accounting standards in Malaysia and the provisions of the
Companies Act, 1965. The new applicable approved accounting standards adopted in these financial statements are as follows:
–
–
–
–
MASB
MASB
MASB
MASB
25
27
28
29
“Income Taxes”
“Borrowing Costs”
“Discontinuing Operations”
“Employee Benefits”
Comparative figures have been adjusted or extended to conform with changes in policies and/or presentation in accordance with
the requirements of MASB 25 and MASB 29 as shown in note 42 and note 4 to the financial statements. Comparatives have also
been adjusted to take into account the effect of the change in accounting policy with respect to goodwill as shown in note 42
to the financial statements.
Other than the above, there were no changes in accounting policies that affect net profit and shareholders’ equity as the Group
was already following the recognition and measurement principles in those standards.
The preparation of financial statements in conformity with the applicable approved accounting standards in Malaysia and the
provisions of the Companies Act, 1965 requires the use of estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts
of revenue and expenses during the reported period. Although these estimates are based on Directors’ best knowledge of current
events and actions, actual results could differ from those estimates.
2. BASIS OF CONSOLIDATION
The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to the end
of the year. Subsidiaries are those corporations or other entities (including special purpose entities) in which the Group has power
to exercise control over the financial and operating policies so as to obtain benefits from their activities.
Subsidiaries are consolidated using the acquisition method of accounting whereby the results of the subsidiaries acquired or
disposed during the year are included in the Consolidated Income Statement from the date of their acquisition or up to the date
of their disposal. The cost of acquisition is the amount of cash paid and the fair value of other purchase consideration at the
date of acquisition given by the acquirer, together with directly attributable expenses of the acquisition. At the date of acquisition,
the fair value of the subsidiary’s net assets is determined and these values are reflected in the consolidated financial statements.
The difference between the cost of acquisition over the Group’s share of the fair value of identifiable net assets of the subsidiary
acquired at the date of acquisition is reflected as goodwill.
Minority interest is measured at the minorities’ share of the post acquisition fair values of the identifiable assets and liabilities of
the acquiree. Separate disclosure is made of minority interest.
169
In addition to the above, during the year, the Group changed its existing accounting policy with respect to goodwill for fairer
presentation in line with current accepted accounting practices, and adopted a new accounting policy with respect to other
intangible assets, details of which are described in note 4 of Significant Accounting Policies.
FOR THE YEAR ENDED
31
DECEMBER
2003
2. BASIS OF CONSOLIDATION (continued)
Inter-company transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also eliminated
unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure
consistency with the Group’s accounting policies.
The gain or loss on disposal of a subsidiary is the difference between the net disposal proceeds and the Group’s share of its
net assets together with any balance of goodwill on acquisition occurring on or after 1 January 2002 and exchange differences
which were not previously recognised in the Consolidated Income Statement. Goodwill occurring prior to 1 January 2002 which
has been charged in full to shareholders’ equity is also deducted when determining the gain or loss on disposal of a subsidiary.
3. ASSOCIATES
170
Associates are corporations or other entities in which the Group exercises significant influence but which it does not control. Significant
influence is the power to participate in the financial and operating policy decisions of the associates but not control over those policies.
Investments in associates are accounted for in the consolidated financial statements by the equity method of accounting.
Equity accounting involves recognising the Group’s share of post acquisition results of the associates in the Consolidated Income
Statement and its share of post acquisition movements within reserves in reserves of the Group. The cumulative post acquisition
movements are adjusted against the cost of investment and include goodwill on acquisition. Equity accounting is discontinued
when the carrying amount of the investment in an associate reaches zero, unless the Group has incurred or made payments on
behalf of the associate.
Where necessary, in applying the equity method, appropriate adjustments are made to the associates’ financial statements to
ensure consistency with the Group’s accounting policies.
4. INTANGIBLE ASSETS
(i)
Goodwill
Goodwill represents the excess of the cost of acquisition over the Group’s share of the fair value of the identifiable net
assets of subsidiaries and associates at the date of acquisition. Goodwill on acquisition occurring on or after 1 January
2002 in respect of a subsidiary is included in the Consolidated Balance Sheet as intangible asset or, if arising in respect of
an associate, is included in the cost of investment in associates.
Capitalised goodwill is tested for impairment at least annually, or if events or circumstances occur indicating that an impairment
may exist. Impairment of goodwill is charged to Consolidated Income Statement as and when it arises. Impairment of goodwill
should not be reversed unless its reversal is due to the effect of a specific external event of an exceptional nature.
Goodwill on acquisition occurred prior to 1 January 2002 was written off against reserves in the year of acquisition. Such
goodwill has not been retrospectively capitalised and subjected to impairment test as it was impractical to reinstate.
(ii)
Other Intangible Assets
On 2 April 2003, the Company incurred expenditure with respect to acquisition of 3G Spectrum licence. The total licence
fee payable is capitalised and amortised over the defined period, from the effective date of commercialisation of services,
subject to impairment, to the end of the assignment period on a straight line basis, not exceeding a period of 15 years.
Intangible assets are not revalued.
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
(i)
Cost
Cost of telecommunication network comprises expenditure up to and including the last distribution point before customers'
premises and includes contractors' charges, materials, direct labour and related overheads. The cost of other property, plant
and equipment comprises their purchase cost and any incidental cost of acquisition.
(ii)
Depreciation
Freehold land is not depreciated as it has an infinite life. Leasehold land is amortised in equal instalments over the periods
of the respective leases. Long term leasehold land has an unexpired lease period of 50 years and above. Other property,
plant and equipment are depreciated on a straight line basis to write off the cost of the assets to their residual values over
their estimated useful lives.
Telecommunication network
Movable plant and equipment
Computer support systems
Buildings
3
5
3
5
– 20
– 8
– 5
– 40
Depreciation on property, plant and equipment under construction commences when the property, plant and equipment are
ready for their intended use.
In the case of other land mentioned in note 19(a) to the financial statements, pending finalisation with the relevant
authorities as to their tenure, amortisation is provided at an estimated amount of RM0.3 million per annum.
(iii) Impairment
Where an indication of impairment exists, the carrying amount of property, plant and equipment are assessed and written
down immediately to its recoverable amount. See Significant Accounting Policies note 7 on Impairment of Assets.
(iv) Gains or Losses on Disposal
Gains or losses on disposal are determined by comparing proceeds with carrying amount and are included in Income Statement.
(v)
Repairs and Maintenance
Repairs and maintenance are charged to the Income Statement during the period in which they are incurred. The costs of
major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in
excess of the originally assessed standard of performance of the existing asset will flow to the Group. These costs are
depreciated over the remaining useful life of the related asset.
171
The estimated useful lives in years assigned to other property, plant and equipment are as follows:
FOR THE YEAR ENDED
31
DECEMBER
2003
6. INVESTMENTS
Investments in subsidiaries and associates are stated at cost. Where an indication of impairment exists, the carrying amount of
the investment is assessed and written down immediately to its recoverable amount.
Investments in International Satellite Organisations, quoted shares within non-current assets and other unquoted shares are stated
at cost and allowances for permanent diminution in value is made where, in the opinion of the Directors, there is a decline other
than temporary in the value of such investments. Such allowances for permanent diminution in value is recognised as an expense
in the period in which the diminution is identified.
Investments in quoted shares within current assets are carried at the lower of cost and market value, determined on an aggregate
portfolio basis by category of investment. Cost is derived at on the weighted average basis. Market value is calculated by reference
to stock exchange quoted selling prices at the close of business on the balance sheet date. Increase/decrease in the carrying
amount of marketable securities are credited/charged to the Income Statement.
172
7. IMPAIRMENT OF ASSETS
Property, plant and equipment and other non-current assets, including intangible assets, are reviewed for impairment losses
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment loss is
recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s net selling price and value in use. For the purpose of assessing impairment, assets are grouped at
the lowest level for which there is separately identifiable cash flows. The impairment loss is charged to the Income Statement.
8. INVENTORIES
Inventories comprise mainly items held for capital projects and maintenance. Inventories are stated at lower of cost and net realisable
value. Cost is determined on a weighted average basis. Net realisable value represents the estimated selling price less all estimated
costs to completion. In arriving at the net realisable value, due allowance is made for all obsolete and slow moving items.
9. TRADE RECEIVABLES
Trade receivables are carried at anticipated realisable value. Bad debts are written off and specific allowances are made for trade
receivables considered to be doubtful of collection. In addition, a general allowance based on a percentage of trade receivables
is made to cover possible losses which are not specifically identified.
10. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits and bank overdrafts. Cash equivalents are
short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant
risk of change in value.
11. BONDS, NOTES AND DEBENTURES
Bonds, notes and debentures, issued by the Company and special purposes entities are stated at the net proceeds received on
issue. The finance costs which represent the difference between the net proceeds and the total amount of the payments of these
borrowings are allocated to periods over the term of the borrowings at a constant rate on the carrying amount and are charged
to the Income Statement.
11. BONDS, NOTES AND DEBENTURES (continued)
For Convertible Bonds issued prior to 1 January 2002, the amount recognised in shareholders’ fund in respect of shares issued
upon conversion will be the amount at which the liability for the Bonds is stated as at the date of conversion. The excess of the
conversion amount over the nominal value of share is treated as share premium. No gain or loss will be recognised on
conversion. The Convertible Bonds have been fully redeemed during the year.
Interest, dividends, losses and gains relating to a financial instrument, or a component part, classified as a liability is reported
within finance cost in the Income Statement.
12. DIVIDENDS TO SHAREHOLDERS OF THE COMPANY
Dividends on ordinary shares are recognised as liabilities when proposed or declared before the balance sheet date. A dividend
proposed or declared after the balance sheet date, but before the financial statements are authorised for issue, is not recognised
as a liability at the balance sheet date but as an appropriation from retained profits. Upon the dividend becoming payable, it will
be accounted for as liability.
Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the
Income Statement on the straight line basis over the lease period.
When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by
way of penalty is recognised as an expense in the period in which termination takes place.
14. INCOME TAXES
Current tax expense is determined according to the tax laws of each jurisdiction in which the Group operates and include all
taxes based upon the taxable profits, including withholding taxes payable by a foreign subsidiary or associate on distributions of
retained earnings to companies in the Group, and real property gains taxes payable on disposal of properties.
Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts attributed to
assets and liabilities for tax purposes and their carrying amounts in the financial statements.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences or unutilised tax losses can be utilised.
Tax rates enacted or substantively enacted by the balance sheet date are used to determine deferred tax.
15. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent liability
is a possible obligation that arises from past events whose existence will be confirmed by uncertain future events beyond the
control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will
be required to settle the obligation. A contingent liability also arises in the extremely rare circumstance where there is a liability
that cannot be recognised because it cannot be measured reliably.
A contingent asset is a possible asset that arises from past events whose existence will be confirmed by uncertain future events
beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of
economic benefits are probable, but not virtually certain.
173
13. OPERATING LEASES
FOR THE YEAR ENDED
31
DECEMBER
2003
16. REVENUE RECOGNITION
Operating revenue represents revenue earned from the sale of products and rendering of services net of returns, duties, sales
discounts and sales taxes paid, after eliminating revenue within the Group. Operating revenue is recognised or accrued at the
time of the provision of the products or services.
Dividend income from investment in subsidiaries, associates and other investments is recognised when a right to receive payment
is established.
Finance income includes income from deposits with licensed banks, finance companies, other financial institutions and staff loans,
is recognised on an accrual basis.
174
17. EMPLOYEE BENEFITS
(i)
Short Term Employee Benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non monetary benefits are accrued in the period in which
the associated services are rendered by employees of the Group.
(ii)
Contribution to Employees Provident Fund (EPF)
The Group’s contributions to EPF are charged to the Income Statement in the period to which they relate. Once the
contributions have been paid, the Group has no further payment obligations.
(iii) Termination Benefits
Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or
whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination
benefits when it is demonstrably committed to either terminate the employment of current employees according to a detailed
formal plan without possibility of withdrawal or to provide termination benefits as a result of an offer made to encourage
voluntary redundancy. Benefits falling due more than 12 months after the balance sheet date are discounted to present value.
(iv) Equity Compensation Benefits
Details of the Company’s Employee Share Option Scheme are set out in note 10(e) to the financial statements. The Company
does not make a charge to the Income Statement in connection with options granted over the ordinary shares of the
Company. When share options are exercised, proceeds received net of any transaction costs, are credited to share capital
and share premium.
18. FINANCE COST
Cost incurred in connection with financing the construction and installation of property, plant and equipment is capitalised until the
property, plant and equipment are ready for their intended use. All other finance cost is charged to the Income Statement.
19. FOREIGN CURRENCY
(i)
Foreign Entities
Income Statement of foreign subsidiaries/associates are translated into Ringgit Malaysia at average exchange rates for the
period and the balance sheets are translated at the closing rate of exchange prevailing at the balance sheet date. Exchange
differences arising from the translation of the foreign subsidiaries/associates financial statements are reflected in the
Exchange Fluctuation Reserve in the shareholders’ equity. On disposal of the foreign subsidiaries/associates, such translation
differences are recognised in the Consolidated Income Statement as part of the gain or loss on disposal.
Goodwill and fair value adjustments arising on the acquisition of foreign subsidiaries/associates are translated at the
exchange rate prevailing at the date of transaction.
(ii)
Foreign Currency Transactions and Balances
Foreign currency transactions are accounted for at exchange rates prevailing at the transaction dates. Foreign currency
monetary assets and liabilities are translated at exchange rates prevailing at the balance sheet date. Exchange differences
arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets
and liabilities are included in the Income Statement.
(iii) Closing Rates
The principal closing rates (units of Malaysian Ringgit per foreign currency) used in translating significant balances at year
end are as follows:
Foreign Currency
31.12.2003
31.12.2002
Foreign Currency
31.12.2003
31.12.2002
US Dollar
Japanese Yen
Guinea Franc
Bangladesh Taka
RM3.80000
RM0.03539
RM0.00191
RM0.06501
RM3.80000
RM0.03198
RM0.00193
RM0.06592
Sri Lanka Rupee
South African Rand
Special Drawing Rights
Gold Franc Currency
RM0.03946
RM0.56929
RM5.64670
RM1.84470
RM0.03940
RM0.44471
RM5.16620
RM1.68780
20. FINANCIAL INSTRUMENTS
(i)
Description
A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or
equity instrument of another enterprise.
A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from another
enterprise, a contractual right to exchange financial instruments with another enterprise under conditions that are potentially
favourable, or an equity instrument of another enterprise.
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another
enterprise, or to exchange financial instruments with another enterprise under conditions that are potentially unfavourable.
175
All other exchange gains or losses are dealt with through the Income Statement.
FOR THE YEAR ENDED
31
DECEMBER
2003
20. FINANCIAL INSTRUMENTS (continued)
(ii)
Financial Instruments Recognised on the Balance Sheet
The particular recognition and measurement method for financial instruments recognised on the balance sheet is disclosed
in the individual significant accounting policy statements associated with each item.
(iii) Financial Instruments Not Recognised on the Balance Sheet
The financial derivative hedging instruments are used in the Group’s risk management of foreign currency and interest rate
exposures of its financial liabilities. Hedge accounting principles are applied for the accounting of the underlying exposures
and their hedge instruments. These hedge instruments are not recognised in the financial statements on inception. The
underlying foreign currency liabilities are translated at their respective hedged exchange rate, and differential interest receipts
and payments arising from interest rate derivative instruments are accrued, so as to match the net differential with the
related expenses on the hedged liabilities.
Exchange gains and losses relating to hedge instruments are recognised as a component of finance costs in the Income
Statement in the same period as the exchange differences on the underlying hedged items. No amounts are recognised in
respect of future periods.
176
(iv) Fair Value Estimation for Disclosure Purposes
The fair value of publicly traded financial instruments is based on quoted market prices at the balance sheet date.
In assessing the fair value of non-traded financial instruments, the Group uses a variety of methods and makes assumptions
that are based on market conditions existing at each balance sheet date. Quoted market prices are used if available or other
techniques, such as estimated discounted value of future cash flows, are used to determine fair value. In particular, the fair
value of financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate
available to the Group for similar financial instruments.
The carrying value for financial assets and liabilities with a maturity of less than one year are assumed to approximate their
fair value.
These accounting policies form an integral part of the financial statements set out on pages 177 to 248.
INCOME STATEMENTS
31 DECEMBER 2003
THE GROUP
All amounts are in millions
unless otherwise stated
Note
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
OPERATING REVENUE
3
11,796.4
9,834.1
7,943.7
7,977.1
OPERATING COSTS
4
(10,018.2)
(8,154.8)
(6,916.8)
(7,829.7)
1,778.2
1,679.3
1,026.9
147.4
87.1
112.5
289.0
291.4
1,865.3
1,791.8
1,315.9
438.8
OPERATING PROFIT
OTHER OPERATING INCOME
5
OPERATING PROFIT BEFORE FINANCE COST
NET FINANCE COST
6
ASSOCIATES
– share of profits less losses
PROFIT BEFORE TAXATION
TAXATION
– the company and subsidiaries
– share of taxation of associates
7
7
PROFIT/(LOSS) AFTER TAXATION
(430.0)
(303.9)
375.2
42.5
—
—
1,810.5
1,530.4
893.0
73.5
(626.7)
(33.0)
(364.0)
—
(572.0)
—
870.7
529.0
(498.5)
(253.7)
(112.6)
1,444.2
MINORITY INTERESTS
(53.8)
PROFIT/(LOSS) FOR THE YEAR ATTRIBUTABLE
TO SHAREHOLDERS
(26.4)
1,390.4
844.3
EARNINGS PER SHARE (sen)
– basic
– diluted
8
8
43.6
43.2
26.8
26.6
PROPOSED DIVIDENDS PER SHARE (sen)
– final
– special
9
9
10.0
10.0
10.0
—
(422.9)
—
529.0
(365.3)
—
(498.5)
The above Income Statements are to be read in conjunction with the Significant Accounting Policies on pages 169 to 176 and the
Notes to the Financial Statements on pages 182 to 248.
Report of the Auditors – Page 250.
177
FOR THE YEAR ENDED
BALANCE SHEETS
AS AT
31
DECEMBER
2003
THE GROUP
2003
RM
2002
RM
2003
RM
2002
RM
3,250.7
3,046.4
10,485.3
3,167.0
2,536.5
9,216.1
3,250.7
3,046.4
9,894.5
3,167.0
2,536.5
9,593.9
16,782.4
245.1
14,919.6
225.7
16,191.6
—
15,297.4
—
—
10,830.6
—
626.9
2,031.5
1,361.6
4,826.9
—
625.5
1,590.3
—
6,432.1
2,983.5
614.9
1,694.6
1,361.6
4,997.0
—
614.4
1,533.6
13,489.0
8,404.3
11,725.1
8,506.6
30,516.5
23,549.6
27,916.7
23,804.0
18
19
20
21
22
23
17
4,072.7
21,605.9
—
1,499.6
384.7
668.9
160.4
—
19,566.5
—
2,746.5
139.6
685.4
—
50.0
14,569.4
10,926.2
1.5
338.1
668.8
—
—
15,251.0
6,993.5
96.0
98.3
684.6
—
24
25
26
27
203.6
3,835.0
263.4
3,346.1
172.5
3,592.4
197.7
1,834.8
103.3
3,104.5
260.3
852.0
105.7
2,942.6
197.7
1,138.2
7,648.1
5,797.4
4,320.1
4,384.2
4,522.0
877.8
124.0
3,675.7
1,488.0
222.1
2,863.1
2.9
91.4
2,576.5
920.4
206.7
CURRENT LIABILITIES
5,523.8
5,385.8
2,957.4
3,703.6
NET CURRENT ASSETS
2,124.3
411.6
1,362.7
680.6
30,516.5
23,549.6
27,916.7
23,804.0
SHARE CAPITAL
SHARE PREMIUM
RESERVES
Note
THE COMPANY
10
11
TOTAL CAPITAL AND RESERVES
MINORITY INTERESTS
Convertible Bonds
Borrowings
Payable to a subsidiary company
Customers’ deposits
Deferred tax liabilities
12
13
14
16
17
178
DEFERRED AND LONG TERM LIABILITIES
INTANGIBLE ASSETS
PROPERTY, PLANT AND EQUIPMENT
SUBSIDIARIES
ASSOCIATES
INVESTMENTS
LONG TERM RECEIVABLES
DEFERRED TAX ASSETS
Inventories
Trade and other receivables
Short term investments
Cash and bank balances
CURRENT ASSETS
Trade and other payables
Borrowings
Taxation
28
13
The above Balance Sheets are to be read in conjunction with the Significant Accounting Policies on pages 169 to 176 and the Notes
to the Financial Statements on pages 182 to 248.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31
DECEMBER
2003
Issued and Fully
Paid of RM1 each
Special Share*/
Ordinary Shares
Non-distributable
Distributable
Exchange
Fluctuation
Reserves
RM
Share
Capital
RM
Share
Premium
RM
3,167.0
—
2,536.5
—
(307.1)
—
9,848.9
(325.7)
15,245.3
(325.7)
3,167.0
2,536.5
(307.1)
9,523.2
14,919.6
Exchange fluctuation not recognised
in income statement
—
—
107.2
—
107.2
Profit for the year
—
—
—
1,390.4
1,390.4
—
—
—
83.7
509.9
—
3,250.7
3,046.4
3,103.5
—
At 1 January 2003
– as previously reported
– prior year adjustments
Note
42
– as restated
9
(228.4)
Total
RM
(228.4)
179
Dividends paid for year ended
– 31.12.2002
Retained
Profits
RM
Issue of shares
– exercise of share options
—
593.6
(199.9)
10,685.2
16,782.4
2,065.0
—
(383.2)
—
10,381.8
(1,361.3)
15,167.1
(1,361.3)
3,103.5
2,065.0
(383.2)
9,020.5
13,805.8
Exchange fluctuation not recognised
in income statement
—
—
76.1
—
76.1
Profit for the year
—
—
—
844.3
844.3
– 31.12.2001
—
—
—
(341.6)
(341.6)
63.5
471.5
—
3,167.0
2,536.5
At 31 December 2003
At 1 January 2002
– prior year adjustments
– as restated
Issue of shares
At 31 December 2002
42
(307.1)
—
535.0
9,523.2
14,919.6
* Issued and fully paid shares include the Special Rights Redeemable Preference Share (Special Share) of RM1. Refer to note 10 to
the financial statements for details of the terms and rights attached to Special Share.
The above Consolidated Statement of Changes in Equity is to be read in conjunction with the Significant Accounting Policies on pages
169 to 176 and the Notes to the Financial Statements on pages 182 to 248.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31
DECEMBER
2003
Issued and Fully
Paid of RM1 each
Special Share*/
Ordinary Shares
Nondistributable
Distributable
Share
Capital
RM
Share
Premium
RM
Retained
Profits
RM
3,167.0
—
2,536.5
—
11,127.5
(1,533.6)
16,831.0
(1,533.6)
3,167.0
2,536.5
9,593.9
15,297.4
—
—
529.0
529.0
—
—
(228.4)
(228.4)
83.7
509.9
—
593.6
3,250.7
3,046.4
9,894.5
16,191.6
3,103.5
—
2,065.0
—
11,795.3
(1,361.3)
16,963.8
(1,361.3)
3,103.5
2,065.0
10,434.0
15,602.5
Loss for the year
—
—
(498.5)
(498.5)
– 31.12.2001
—
—
(341.6)
(341.6)
63.5
471.5
—
535.0
3,167.0
2,536.5
9,593.9
15,297.4
At 1 January 2003
– prior year adjustment
Note
42
– as restated
Profit for the year
180
– 31.12.2002
9
Issue of shares
At 31 December 2003
At 1 January 2002
– prior year adjustment
– as restated
Issue of shares
At 31 December 2002
42
Total
RM
* Issued and fully paid shares include the Special Rights Redeemable Preference Share (Special Share) of RM1. Refer to note 10 to
the financial statements for details of the terms and rights attached to Special Share.
The above Company Statement of Changes in Equity is to be read in conjunction with the Significant Accounting Policies on pages
169 to 176 and the Notes to the Financial Statements on pages 182 to 248.
CASH FLOW STATEMENTS
31
DECEMBER
2003
THE GROUP
Note
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
CASH FLOWS FROM OPERATING ACTIVITIES
29
4,662.8
3,223.4
2,937.8
2,584.6
CASH FLOWS USED IN INVESTING ACTIVITIES
30
(5,618.4)
(4,725.6)
(5,639.4)
(4,095.2)
CASH FLOWS FROM FINANCING ACTIVITIES
31
2,427.3
809.8
1,471.7
(692.4)
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS
EFFECT OF EXCHANGE RATE CHANGES
(13.4)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
THE YEAR
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
27
(6.7)
2,415.4
(286.2)
538.3
(972.3)
—
—
1,821.0
2,520.1
1,138.2
2,110.5
3,279.3
1,821.0
852.0
1,138.2
The above Cash Flow Statements are to be read in conjunction with the Significant Accounting Policies on pages 169 to 176 and the
Notes to the Financial Statements on pages 182 to 248.
181
FOR THE YEAR ENDED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31
DECEMBER
2003
All amounts are in millions unless otherwise stated
1. PRINCIPAL ACTIVITIES
The principal activities of the Company during the year are the establishment, maintenance and provision of telecommunication
and related services under the licence issued by the Minister of Energy, Communications and Multimedia. The principal activities
of the subsidiaries are set out in note 43 to the financial statements. There was no significant change in the nature of these
activities during the year.
2. SIGNIFICANT ACQUISITION
As at 1 January 2003, the Group held a 31.25% equity interest in Celcom (Malaysia) Berhad (Celcom). Following shareholders’
approval during the Extraordinary General Meeting held on 31 March 2003, the Group acquired additional equity interest of 16.68%
in Celcom on 17 April 2003. As a result, Celcom became a subsidiary of the Group with a total shareholding of 47.93%.
182
The Company’s 100% interest in TM Cellular Sdn. Bhd. (TM Cellular) is now held via Celcom by way of share swap for a total
consideration of RM1,684.0 million which was satisfied by the issuance of 635,471,698 new Celcom ordinary shares of RM1.00
each at RM2.65 per share to Telekom Enterprise Sdn. Bhd. (TESB), a wholly owned subsidiary of the Company.
The Group subsequently acquired the remaining 52.07% equity interest in Celcom, making it a wholly owned subsidiary.
The cash consideration paid by the Group for the remaining 52.07% in Celcom was undertaken by way of the following transactions:
•
On 22 April 2003, TESB acquired an additional 55,000,000 Celcom ordinary shares of RM1.00 each from open market at
RM2.715 per share for a total cash consideration amounting to RM149.5 million being 2.1% equity interest.
•
On 23 May 2003, the Company (via TESB) undertook a Mandatory General Offer (MGO) for the remaining 1,280,136,722
Celcom ordinary shares of RM1.00 each at RM2.75 per share (Offer Shares) not held by TESB and persons acting in concert
with TESB (PAC). On 19 June 2003, the Company and TESB announced that acceptances had been received for more than
90% of the Offer Shares and that TESB would invoke Section 34 of the Securities Commission Act, 1993 (SCA) to
compulsorily acquire the remaining Celcom ordinary shares of RM1.00 each at RM2.75 per share not held by TESB and the
PAC. As at the close of the MGO on 27 June 2003, TESB and PAC held 98.54% of the issued and paid-up share capital of
Celcom. During the same period, the PAC disposed its 28,616,100 Celcom ordinary shares of RM1.00 each at RM2.75 per
share to TESB. Total cash consideration for the above was RM3,494.5 million.
•
On 1 August 2003, TESB dispatched the notice for the compulsory acquisition of the remaining 38,035,820 Celcom shares
under Section 34 of the SCA. As a consequence of the Group’s notice for compulsory acquisition, Celcom was delisted from
Malaysia Securities Exchange Berhad official list on 15 August 2003. The compulsory acquisition was completed on
29 September 2003. Total cash consideration for the compulsory acquisition was RM104.7 million.
The terms of the conditional Sale and Purchase Agreement in relation to the acquisition of TM Cellular by Celcom included
Celcom’s agreement and undertaking to pay to the Company, a sum equivalent to any damages or settlement awarded against
Celcom in the form of the equivalent number of shares in Celcom, based on a pre-determined formula, limited to a maximum of
100.0 million shares in Celcom.
2. SIGNIFICANT ACQUISITION (continued)
Details of net assets acquired, goodwill and cash flow arising from the acquisition were as follows:
At date of
acquisition
RM
Fair value of total net assets as at 16 April 2003
Minority interests at 52.07%
Less: Amount accounted for as an associate as at 16 April 2003
Fair value of net assets acquired as at 17 April 2003
Fair value of additional net assets acquired from 17 April to 27 June 2003 (50.61%)
Fair value of additional net assets acquired on completion of Compulsory Acquisition (1.46%)
3,084.8
103.5
8.7
286.3
2.1
890.4
(588.0)
(34.2)
(238.3)
(107.1)
(1,954.4)
1,453.8
(757.0)
(475.4)
221.4
735.8
21.2
Goodwill (note 18 to the financial statements)
978.4
2,814.8
Cost of acquisition (comprising purchase consideration and expenses directly attributable to the acquisition)
3,793.2
Purchase consideration discharged by cash
Expenses directly attributable to the acquisition, paid by cash
Less: Cash and cash equivalents of subsidiary acquired
3,748.7
44.5
(829.7)
Cash outflow of the Group on acquisition (note 30 to the financial statements)
2,963.5
Cash advance of the Company to a subsidiary company for the acquisition
(note 30 to the financial statements)
3,793.2
The fair value of the net assets acquired are provisional and subject to the matters indicated below which will be finalised upon
completion of a review of the net assets fair values, which is currently in progress.
•
The fair value of Celcom’s telecommunication plant and equipment.
•
Taxation liabilities of Celcom had not been agreed with the appropriate tax authorities for many years and work is being
carried out to agree on tax assessments prior to the date of acquisition.
183
Property, plant and equipment (note 19 to the financial statements)
Investment in associates
Inventories
Trade and other receivables
Short term investments
Cash and bank balances (inclusive fixed deposit pledged of RM60.7 million)
Trade and other payables
Current tax liabilities
Deferred tax liabilities
Customers deposits
Borrowings
FOR THE YEAR ENDED
31
DECEMBER
2003
2. SIGNIFICANT ACQUISITION (continued)
The effect of this acquisition on the financial results of the Group during the year is shown below. For ease of comparability, the
Group’s share of results of Celcom during the period it was an associate, is also disclosed.
2003
184
As an
associate
RM
Operating revenue
Operating costs
—
—
Operating profit
Other operating income
—
—
As a
subsidiary
RM
1,862.6
(1,614.1)
2002
Total
RM
1,862.6
(1,614.1)
248.5
13.9
248.5
13.9
As an
associate
RM
—
—
—
—
Operating profit before finance cost
Net finance cost
Share of results of associate
—
—
44.2
262.4
(67.3)
8.0
262.4
(67.3)
52.2
—
—
(15.6)
Profit before taxation
Taxation
44.2
—
203.1
(60.6)
247.3
(60.6)
(15.6)
—
Minority interests
Less: Group’s share of net profit had the Group
not acquired the additional 68.75% interest
44.2
—
142.5
(24.9)
186.7
(24.9)
(15.6)
—
(44.2)
(44.5)
(88.7)
73.1
73.1
Profit/(loss) attributable to shareholders
—
—
(15.6)
The effect of this acquisition on the Group’s financial position at the year end was as follows:
2003
RM
Non-current assets (including goodwill on acquisition of Celcom)
Current assets
Non-current liabilities
Current liabilities
5,658.4
1,809.6
(1,852.4)
(1,160.0)
Group’s share of net assets
Less: Amount accounted for as an associate at 16 April 2003
Less: Group’s share of profit had the Group not acquired the additional 68.75% interest
4,455.6
(475.4)
(44.5)
Increase in Group net assets
3,935.7
3. OPERATING REVENUE
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
727.5
854.1
650.7
789.9
726.0
849.9
652.3
788.6
Sub total
1,581.6
1,440.6
1,575.9
1,440.9
Calls/Usage
Business
Residential
2,652.7
1,888.7
2,884.4
1,952.1
2,825.9
1,873.7
2,904.1
1,939.1
Sub total
4,541.4
4,836.5
4,699.6
4,843.2
70.7
73.5
72.1
79.6
68.1
73.1
71.8
78.9
144.2
151.7
141.2
150.7
Total
Business
Residential
3,450.9
2,816.3
3,607.2
2,821.6
3,620.0
2,796.7
3,628.2
2,806.6
Total fixed line
6,267.2
6,428.8
6,416.7
6,434.8
942.0
396.5
334.1
812.8
394.5
395.4
1,225.6
68.7
193.7
1,120.0
126.7
264.5
Total fixed line, data, internet and multimedia
and other telecommunication related services
7,939.8
8,031.5
7,904.7
7,946.0
Cellular
Non-telecommunication related services
3,606.3
250.3
1,588.9
213.7
39.0
—
31.1
—
11,796.4
9,834.1
7,943.7
7,977.1
Rentals
Business
Residential
Others
Business
Residential
Sub total
Data services
Internet and multimedia
Other telecommunication related services
TOTAL OPERATING REVENUE
185
THE GROUP
FOR THE YEAR ENDED
31
DECEMBER
2003
4. OPERATING COSTS
186
THE GROUP
Allowance for bad and doubtful debts
(net of bad debt recoveries)
Allowance for diminution in value of long term investments
Allowance/(reversal) for diminution
in value of quoted investments
Allowance for/waiver of amount owing by subsidiaries
Charges and agencies commissions
Depreciation of property, plant and equipment (PPE)
Domestic and international outpayment
Impairment of PPE
Impairment of goodwill
Maintenance
Marketing, advertising and promotion
Net loss/(gain) on foreign exchange – realised
Net loss on foreign exchange – unrealised
Rental – land and buildings
Rental – equipment
Rental – others
Research and development
Staff costs
Staff costs capitalised in PPE
Supplies and inventories
Universal Service Provision (USP)
Universal Service Obligation (USO)
– in respect of prior year
Utilities
Write down of investment in a subsidiary
Write off of PPE
Other operating costs
TOTAL OPERATING COSTS
Staff costs include:
– Salaries, allowances, overtime and bonus
– Contribution to Employees Provident Fund (EPF)
– Termination benefits
– Other employee benefits
– Remunerations of Directors of the Company
– fees
– salaries, allowances and bonus
– ex-gratia payment
– contribution to EPF
Other operating costs include:
– Audit fees
– PricewaterhouseCoopers Malaysia
– Others
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
445.8
—
564.4
—
189.2
10.3
322.2
—
(49.7)
—
74.3
3,551.3
1,464.8
99.2
—
473.8
536.5
14.7
105.9
151.2
12.1
45.1
—
1,411.6
(60.3)
351.9
238.7
33.7
—
79.0
2,481.8
1,209.0
—
39.7
323.9
377.5
(5.6)
102.3
102.3
11.8
79.6
—
1,375.1
(67.4)
342.7
230.5
(47.9)
105.0
114.6
2,490.9
1,419.5
—
—
286.5
124.9
14.4
78.5
95.1
27.5
1.6
50.0
943.4
(60.2)
215.0
187.2
33.7
1,074.4
88.9
2,088.3
1,176.4
—
—
292.1
133.1
(5.6)
89.8
100.9
23.6
45.8
21.8
1,110.3
(65.9)
237.5
209.2
26.5
200.5
—
5.8
918.5
—
164.0
—
50.9
659.6
26.5
151.1
9.1
4.8
479.8
—
137.4
316.0
50.9
348.9
10,018.2
8,154.8
6,916.8
7,829.7
1,155.9
167.3
—
86.4
1,003.1
162.8
147.0
60.4
766.4
120.6
—
55.0
788.6
135.3
147.0
38.0
0.8
1.0
0.1
0.1
0.5
1.2
—
0.1
0.3
0.9
0.1
0.1
0.3
1.0
—
0.1
1.5
0.4
0.9
0.3
0.5
—
0.4
—
4. OPERATING COSTS (continued)
(a)
Estimated money value of benefits of Directors amounted to RM128,289 (2002: RM44,500) for the Company and
RM401,364 (2002: RM109,480) for the Group.
(b)
Options granted to Executive Directors of the Company pursuant to Employees’ Share Option Scheme (ESOS 3) during the
year are as follows:
Granted during
Unexercised options
the year ended
at year end
31.12.2003
31.12.2002
31.12.2003
31.12.2002
—
—
178,000
171,000
108,000
103,000
178,000
171,000
The options were exercised by the Directors on 29 October 2003 and 17 November 2003 respectively. The fair values of shares
of the Company at the exercise date was RM9.00 and RM8.40 per share respectively.
Exercised options during
the year ended 31.12.2003
RM
Ordinary share capital at par
Share premium
0.2
0.8
Proceeds received on exercise of share options
1.0
187
The options were given to these Directors on the same terms and conditions as those offered to other employees of the Company
and its subsidiaries (note 10(e) to the financial statements).
FOR THE YEAR ENDED
31
DECEMBER
2003
5. OTHER OPERATING INCOME
188
THE GROUP
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
Dividend income from subsidiaries
Dividend income from quoted shares
Dividend income from unquoted shares
Income from investment in International Satellite Organisations
Income from subsidiaries – interest
– others
Profit on disposal of short term investments
Profit on disposal of investment in an International
Satelite Organisation
Profit on partial disposal of subsidiaries
Profit on disposal of property, plant and equipment
Rental income from buildings
Rental income from vehicles
Sale of scrap stores
Others
—
5.7
0.7
—
—
—
5.3
—
4.0
1.5
0.5
—
—
3.8
107.2
5.5
0.7
—
54.3
3.4
5.3
26.4
3.8
1.5
0.5
79.7
7.3
3.8
9.7
—
1.5
2.9
—
3.2
58.1
—
2.8
18.2
6.5
0.1
4.1
71.0
9.7
—
1.3
44.2
3.0
3.1
51.3
—
—
80.8
25.8
3.1
4.0
54.7
TOTAL OTHER OPERATING INCOME
87.1
112.5
289.0
291.4
6. NET FINANCE COST
2003
Foreign Domestic
RM
RM
Islamic
Principles
RM
Total
RM
2002
Islamic
Foreign Domestic Principles
RM
RM
RM
Total
RM
Finance cost in respect of:
Borrowings
Convertible Bonds
253.0
32.4
148.5
—
33.8
—
435.3
32.4
263.2
54.7
91.1
—
28.0
—
382.3
54.7
Total finance cost
Finance income
285.4
—
148.5
(28.2)
33.8
(16.6)
467.7
(44.8)
317.9
—
91.1
(49.5)
28.0
(22.2)
437.0
(71.7)
NET FINANCE COST
OF THE COMPANY
Finance cost of subsidiaries
Finance income of subsidiaries
285.4
10.1
(6.7)
120.3
(25.3)
(25.0)
17.2
64.6
(10.6)
422.9
49.4
(42.3)
317.9
5.8
(3.9)
41.6
(53.5)
(4.7)
5.8
0.3
(5.4)
365.3
(47.4)
(14.0)
TOTAL NET FINANCE COST
OF THE GROUP
288.8
70.0
71.2
430.0
319.8
(16.6)
0.7
303.9
7. TAXATION
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
307.9
(93.7)
59.8
417.9
1.2
193.7
292.9
(89.9)
161.0
399.7
—
172.3
274.0
612.8
364.0
572.0
1.6
(4.5)
(17.4)
0.9
4.1
8.9
—
—
—
—
—
—
(20.3)
13.9
—
—
Share of taxation of associates
253.7
112.6
626.7
33.0
364.0
—
572.0
—
TOTAL TAXATION
366.3
659.7
364.0
572.0
Current taxation:
Current year
(Over)/Under accrual in prior years (net)
422.1
(98.2)
451.8
5.3
292.9
(89.9)
399.7
—
202.8
202.6
161.0
172.3
—
—
—
659.7
364.0
572.0
The taxation charge for the Group and the Company comprise:
Malaysia
Current year taxation
In respect of prior year
Deferred taxation – net
Overseas
Current year taxation
In respect of prior year
Deferred taxation – net
Deferred taxation:
Origination and reversal of temporary differences
Benefit from previously unrecognised deductible
temporary differences and tax losses
(160.4)
366.3
189
THE GROUP
FOR THE YEAR ENDED
31
DECEMBER
2003
7. TAXATION (continued)
The explanation of the relationship between taxation expense and profit before taxation is as follows:
THE GROUP
190
Taxation calculated at the applicable
Malaysian taxation rate of 28%
Tax effects of:
– Different taxation rates in other countries
– Expenses not deductible for taxation purposes
– Income not subject to taxation
– Expenses allowed for double deduction
– Previously unrecognised tax deductible
temporary differences and tax losses
– Reversal of previously recognised temporary differences
due to tax exempt status being granted
(Over)/Under accrual in prior years (net)
TOTAL TAXATION
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
1,810.5
1,530.4
893.0
73.5
506.9
428.5
250.0
20.6
6.0
273.2
(132.7)
(11.1)
0.3
596.9
(363.3)
(8.0)
—
239.1
(24.1)
(11.1)
—
561.5
(2.1)
(8.0)
(160.4)
—
(17.4)
(98.2)
—
5.3
366.3
659.7
—
—
(89.9)
364.0
—
—
—
572.0
8. EARNINGS PER SHARE
(a)
Basic earnings per share
Basic earnings per share of the Group is calculated by dividing the net profit attributable to shareholders by the weighted
average number of ordinary shares of the Company in issue during the year.
2003
2002
Net profit attributable to shareholders (RM million)
1,390.4
844.3
Weighted average number of ordinary shares in issue (million)
3,188.3
3,155.3
43.6
26.8
Basic earnings per share (sen)
(b)
Diluted earnings per share
For the diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion
of all dilutive potential ordinary shares. For this purpose, the Convertible Eurobonds due 2004 was deemed not dilutive for the
year ended 31 December 2002 and up to the date of redemption on 1 August 2003 since the exercise price was higher than
the fair value of the Company’s shares.
For ESOS 3 offered since 2002, a calculation is done to determine the number of shares that could have been acquired at
market price (determined as the average annual share price of the Company’s shares) based on the monetary value of the
subscription rights attached to outstanding share options. This calculation serves to determine the unexercised shares to
be added to the ordinary shares outstanding for the purpose of computing the dilution. No adjustment is made to net profit
attributable to shareholders for the share options calculation.
For details of the Employees’ Share Option Scheme, please refer to note 10(e) to the financial statements.
THE GROUP
2003
2002
Net profit attributable to shareholders (RM million)
1,390.4
844.3
Weighted average number of ordinary shares in issue (million)
Adjustment for ESOS 3 (million)
3,188.3
31.0
3,155.3
19.5
Weighted average number of ordinary shares for diluted earnings per share (million)
3,219.3
3,174.8
43.2
26.6
Diluted earnings per share (sen)
Comparative earnings per share information has been restated to take into account the effect of the change in accounting policies
on net profit for the year as described in note 42 to the financial statements.
191
THE GROUP
FOR THE YEAR ENDED
31
DECEMBER
2003
9. DIVIDENDS IN RESPECT OF ORDINARY SHARES
Dividends proposed in respect of ordinary shares of the Company for the year are as follows:
192
THE GROUP AND COMPANY
Gross
dividend
per share
Sen
2003
Amount of
dividend, net
of 28% tax
RM
Gross
dividend
per share
Sen
2002
Amount of
dividend, net
of 28% tax
RM
Final dividends:
– proposed final gross dividend
– proposed special gross dividend
– increase due to exercise of share options
10.0
10.0
—
234.1
234.1
—
10.0
—
—
228.0
—
0.4
TOTAL DIVIDENDS PROPOSED/PAID
20.0
468.2
10.0
228.4
At the forthcoming Annual General Meeting on 18 May 2004, a final gross dividend of 10.0 sen per share less tax of 28%
amounting to RM234.1 million and a special gross dividend of 10.0 sen per share less tax of 28% amounting to RM234.1 million
will be proposed for shareholders’ approval. These financial statements do not reflect this final dividend which will only be
accrued as a liability when approved by shareholders.
10. SHARE CAPITAL
THE COMPANY
2003
Number of
shares
Authorised:
Ordinary shares of RM1 each
Special share of RM1 (sub-note a)
Class A Redeemable Preference Shares of RM10 (sub-note b)
Class B Redeemable Preference Shares of RM10 (sub-note b)
Issued and fully paid:
Ordinary shares of RM1 each
At 1 January
Exercise of share options
At 31 December
Special share of RM1 (sub-note a)
At 1 January and 31 December
TOTAL ISSUED AND FULLY PAID-UP SHARE CAPITAL
2002
RM
Number of
shares
RM
5,000.0
—
—
—
5,000.0
—
—
—
5,000.0
—
—
—
5,000.0
—
—
—
3,167.0
83.7
3,167.0
83.7
3,103.5
63.5
3,103.5
63.5
3,250.7
3,250.7
3,167.0
3,167.0
—
—
—
—
3,250.7
3,250.7
3,167.0
3,167.0
10. SHARE CAPITAL (continued)
(a)
The Special Rights Redeemable Preference Share (Special Share) of RM1 would enable the Government through the Minister
of Finance to ensure that certain major decisions affecting the operations of the Company are consistent with the
Government’s policy. The Special Shareholder, which may only be the Government or any representative or person acting
on its behalf, is entitled to receive notices of meetings but does not carry any right to vote at such meetings of the
Company. However, the Special Shareholder is entitled to attend and speak at such meetings.
Certain matters, in particular, the alteration of the Articles of Association of the Company relating to the rights of the Special
Shareholder, the dissolution of the Company, any substantial acquisitions and disposal of assets, amalgamation, merger and
takeover, require the prior consent of the Special Shareholder.
(b)
On 31 March 2003, the authorised share capital of the Company has been increased to include 1,000 Class A Redeemable
Preference Shares of RM0.01 each and 1,000 Class B Redeemable Preference Shares of RM0.01 each.
(c)
During the year, the issued and fully paid-up share capital of the Company was increased by the issuance of 83,725,000
ordinary shares of RM1 each at the option price of RM7.09 per share for cash under ESOS 3. These shares rank
pari-passu in all respects with the existing issued ordinary shares of the Company.
(d)
On 12 December 2003, the Company issued for cash 1,000 Class A Redeemable Preference Shares (RPS) (TM RPS A) and
1,000 Class B RPS (TM RPS B) to Rebung Utama Sdn. Bhd. (RUSB), a special purpose entity of the Company, at a
premium of RM0.99 each over the par value of RM0.01 each.
TM RPS A and TM RPS B rank pari-passu amongst themselves but below the Special Share and ahead of the ordinary
shares of the Company in a distribution of capital in the event of the winding up or liquidation of the Company. TM RPS
A and TM RPS B have been classified as liabilities.
The details of TM RPS A and TM RPS B are set out in note 14(a) to the financial statements.
(e)
Employees’ Share Option Scheme
The existing Employees’ Share Option Scheme 3 (ESOS 3) was approved by the shareholders at an Extraordinary General
Meeting held on 21 May 2002. On 1 August 2002, options to subscribe for 259,042,000 ordinary shares of RM1 each under
ESOS 3 were granted to eligible Executives and Non-Executives of the Company and its subsidiaries at an exercise price of
RM7.09 per share.
The principal features of ESOS 3 are as follows:
(i)
The eligibility for participation in ESOS is at the discretion of the Option Committee appointed by the Board of Directors.
(ii)
The total number of shares to be offered shall not exceed 10% of the total issued and paid up shares of the Company.
(iii) No option shall be granted for less than 1,000 shares nor more than 550,000 shares unless so adjusted pursuant to
item (vi) below.
(iv) The subscription price of each RM1 share shall be the average of the middle market quotation of the shares as shown
in the daily official list issued by the Malaysia Securities Exchange Berhad for the five (5) trading days preceding the
date of offer with a 10% discount.
193
The Special Shareholder has the right to require the Company to redeem the Special Share at par at any time. In a
distribution of capital in a winding up of the Company, the Special Shareholder is entitled to the repayment of the capital
paid-up on the Special Share in priority to any repayment of capital to any other member. The Special Share does not confer
any right to participate in the capital or profits of the Company.
FOR THE YEAR ENDED
31
DECEMBER
2003
(e)
Employees’ Share Option Scheme (continued)
(v) Subject to item (vi) below, an employee may exercise his options subject to the following limits:
Number of options granted
Below 20,000
20,000 – 99,999
100,000 and above
Percentage of options exercisable (%)
Year 1
Year 2
Year 3
Year 4
Year 5
100
*40
20
—
30
20
—
**30
20
—
—
20
—
—
20
* 40% or 20,000 options, whichever is higher
** 30% or the remaining number of options unexercised
194
(vi) In the event of any alteration in capital structure of the Company during the option period which expires on 31 July
2007, such corresponding alterations shall be made in:
(i)
the number of new shares in relation to ESOS so far as unexercised;
(ii)
and/or the subscription price.
The movement during the year in the number of options over the ordinary shares of RM1 each of the Company are as follows:
ESOS 3
2003
Million
ESOS 2
2002
Million
The Company
At 1 January
Offered
Exercised (sub-note c)
Lapsed #
254.2
—
(83.7)
—
—
259.0
(4.7)
(0.1)
At 31 December
170.5
254.2
2002
Phase 2
Million
74.8
—
(58.8)
(16.0)
—
Phase 1
Million
127.1
—
—
(127.1)
—
# Less than 0.1 million
At 31 December 2003, options to subscribe for 170,456,000 ordinary shares of RM1 each at the option price of RM7.09
per share under ESOS 3 remained unexercised. These options remain in force until 31 July 2007. These options granted
do not confer any right to participate in any share issue of any other company.
Details relating to options exercised during the year are as follows:
Exercise date
Fair value of shares at share issue date
RM/share
Exercise price
RM/share
Number of shares issued
2003
Million
2002
Million
—
—
—
4.8
19.9
9.2
49.8
58.8
0.1
4.6
—
—
—
—
83.7
63.5
Ordinary share capital – at par (RM million)
Share premium (RM million)
83.7
509.9
63.5
471.5
Proceeds received on exercise of share options (RM million)
593.6
535.0
Fair value at exercise date of shares issued (RM million)
688.2
602.1
9.15-9.80
8.00-8.25
7.40-7.50
7.30-7.85
7.95-8.05
7.70-7.75
8.25-8.60
8.53
7.09
7.09
7.09
7.09
7.09
7.09
195
January to May 2002
June to August 2002
September to December 2002
January to May 2003
June to July 2003
August to September 2003
October to December 2003
The fair value of shares issued on the exercise of options is the mean market price at which the Company’s share were traded
on the Malaysia Securities Exchange Berhad on the day prior to the exercise of the options.
FOR THE YEAR ENDED
31
DECEMBER
2003
11. RESERVES
THE GROUP
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
Retained Profits
Exchange Fluctuation Reserves arising
from translation of foreign subsidiaries/associates
10,685.2
9,523.2
9,894.5
9,593.9
—
—
TOTAL RESERVES
10,485.3
9,894.5
9,593.9
(199.9)
(307.1)
9,216.1
196
Subject to agreement with the Inland Revenue Board, the Company has sufficient tax credit under Section 108 of the Income Tax
Act, 1967 and tax exempt income under Section 8 of the Income Tax (Amendment) Act, 1999 at 31 December 2003 to frank the
payment of net dividends of approximately RM9,764.8 million (2002: RM9,266.3 million) out of total distributable reserves of
RM9,894.5 million (2002: RM9,593.9 million) without incurring additional taxation.
12. CONVERTIBLE BONDS
(a)
Convertible Bonds represent USD359.9 million (2002: USD359.9 million) Convertible Eurobonds due 2004 which have been
fully redeemed on 1 August 2003.
(b)
The principle features of the Eurobonds were as follows:
(i)
Unless previously redeemed or purchased and cancelled, the Bonds are convertible on or after 3 November 1994 up to
and including 26 September 2004 into fully paid ordinary shares of RM1 each of the Company at an initial conversion
price of RM15.60 per ordinary share and with a fixed rate of exchange on conversion of RM2.5553 equals USD1.
(ii)
Unless previously redeemed, purchased and cancelled or converted, each Bond will be redeemed on 3 October 2004
at its principal amount together with accrued interest. The Bonds may also be redeemed, in whole or in part, by the
Company at any time on or after 21 October 1999 at their principal amount, plus accrued interest.
(iii)
The Bonds bear interest rate of 4% per annum payable semi-annually in arrears in equal instalments on 31 March
and 30 September in each year during the tenure and on the date of maturity. Any Bonds converted will cease to
carry interest as from the last interest payment date immediately preceding the date of conversion.
(iv)
The Bonds constitute, subject to the negative pledge, unsecured obligations of the Company.
THE GROUP
DOMESTIC
Secured
– Cagamas Loans (sub-note a)
– Borrowings from financial
institutions (sub-note b)
– Borrowings under Islamic
facilities (sub-note b)
Weighted
Average Rate
of Finance
2003
Long
Term
RM
Short
Term
RM
Total
RM
Weighted
Average Rate
of Finance
2002
Long
Term
RM
Short
Term
RM
Total
RM
6.61%
84.7
1.6
86.3
6.65%
91.7
3.3
95.0
5.55%
325.0
227.5
552.5
—
—
—
—
7.62%
1,254.4
35.0
1,289.4
—
—
—
—
6.98%
1,664.1
264.1
1,928.2
6.65%
91.7
3.3
95.0
5.88%
3,000.0
—
3,000.0
—
—
—
—
3.85%
553.9
518.7
1,072.6
3.92%
627.6
659.4
1,287.0
5.16%
6.50%
689.0
—
12.8
3.0
701.8
3.0
5.56%
7.90%
689.0
—
7.3
1.4
696.3
1.4
5.32%
4,242.9
534.5
4,777.4
4.50%
1,316.6
668.1
1,984.7
Total Domestic
5.80%
5,907.0
798.6
6,705.6
4.60%
1,408.3
671.4
2,079.7
FOREIGN
Secured
– Borrowings from financial
institutions (sub-note c)
– Other borrowings
5.04%
2.61%
106.4
—
36.6
2.4
143.0
2.4
5.99%
2.95%
85.1
2.7
12.0
5.7
97.1
8.4
5.00%
106.4
39.0
145.4
5.75%
87.8
17.7
105.5
6.87%
2,665.0
—
2,665.0
7.28%
2,643.0
—
2,643.0
2.05%
4.44%
10.00%
2,096.7
55.5
—
32.2
4.9
3.1
2,128.9
60.4
3.1
3.08%
4.18%
15.53%
644.4
43.4
—
780.8
5.7
12.4
1,425.2
49.1
12.4
4.73%
4,817.2
40.2
4,857.4
5.82%
3,330.8
798.9
4,129.7
Total Foreign
4.74%
4,923.6
79.2
5,002.8
5.82%
3,418.6
816.6
4,235.2
TOTAL BORROWINGS
5.35% 10,830.6
877.8 11,708.4
5.41%
4,826.9
1,488.0
6,314.9
Unsecured
– Redeemable Bonds
(note 14 to the
financial statements)
– Borrowings from
financial institutions
Banking facilities
– Bank overdrafts (sub-note e)
Unsecured
– Notes and Debentures
(sub-note d)
– Borrowings from
– Bank overdrafts (sub-note e)
197
13. BORROWINGS
FOR THE YEAR ENDED
31
DECEMBER
2003
13. BORROWINGS (continued)
THE GROUP
Domestic
RM
2003
Foreign
RM
Total
RM
Domestic
RM
2002
Foreign
RM
Total
RM
2,383.2
2,000.0
1,000.0
523.8
2,919.9
1,240.2
19.8
743.7
5,303.1
3,240.2
1,019.8
1,267.5
641.5
243.0
—
523.8
858.8
1,796.5
20.2
743.1
1,500.3
2,039.5
20.2
1,266.9
5,907.0
4,923.6
10,830.6
1,408.3
3,418.6
4,826.9
The Group’s long term borrowings
are repayable as follows:
198
After
After
After
After
one year and up to five years
five years and up to ten years
ten years and up to fifteen years
fifteen years (sub-note f)
THE COMPANY
DOMESTIC
Secured
– Cagamas Loans (sub-note a)
Weighted
Average Rate
of Finance
2003
Long
Term
RM
Short
Term
RM
Total
RM
Weighted
Average Rate
of Finance
2002
Long
Term
RM
Short
Term
RM
Total
RM
6.61%
84.7
1.6
86.3
6.65%
91.7
3.3
95.0
6.61%
84.7
1.6
86.3
6.65%
91.7
3.3
95.0
8.00%
1,000.0
—
1,000.0
7.29%
1,000.0
155.0
1,155.0
5.19%
689.0
—
689.0
5.59%
689.0
—
689.0
6.86%
1,689.0
—
1,689.0
6.65%
1,689.0
155.0
1,844.0
Total Domestic
6.84%
1,773.7
1.6
1,775.3
6.65%
1,780.7
158.3
1,939.0
FOREIGN
Unsecured
– Notes and Debentures
(sub-note d)
– Borrowings from
6.87%
2,665.0
—
2,665.0
7.28%
2,643.0
—
2,643.0
1.71%
1.40%
1,980.8
12.6
—
1.3
1,980.8
13.9
2.62%
2.65%
554.1
19.2
760.0
2.1
1,314.1
21.3
Total Foreign
4.66%
4,658.4
1.3
4,659.7
5.71%
3,216.3
762.1
3,978.4
TOTAL BORROWINGS
5.26%
6,432.1
2.9
6,435.0
6.02%
4,997.0
920.4
5,917.4
Unsecured
– Borrowings from
Banking facilities
THE COMPANY
Domestic
RM
2003
Foreign
RM
Total
RM
Domestic
RM
2002
Foreign
RM
Total
RM
773.7
—
—
1,000.0
2,769.6
1,143.9
1.2
743.7
3,543.3
1,143.9
1.2
1,743.7
537.7
243.0
—
1,000.0
770.6
1,701.3
1.3
743.1
1,308.3
1,944.3
1.3
1,743.1
1,773.7
4,658.4
6,432.1
1,780.7
3,216.3
4,997.0
The Company’s long term borrowings
are repayable as follows:
After
After
After
After
one year and up to five years
five years and up to ten years
ten years and up to fifteen years
fifteen years (sub-note f)
The currency exposure profile of borrowings is as follows:
–
–
–
–
Ringgit Malaysia
US Dollar
Japanese Yen
Other currencies
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
6,705.6
4,021.6
828.4
152.8
2,079.7
3,345.8
757.2
132.2
1,775.3
3,817.5
828.4
13.8
1,939.0
3,208.5
757.2
12.7
11,708.4
6,314.9
6,435.0
5,917.4
(a)
Borrowings from Cagamas Berhad secured by way of assignment of the titles of properties relating to staff housing loans.
(b)
Syndicated term loan facilities and Islamic Private Debt securities issued by Celcom (Malaysia) Berhad (Celcom), a wholly
owned subsidiary acquired during the year. The borrowings are secured by deed of assignment over Celcom’s key bank
collection accounts and designated bank accounts which requires Celcom to deposit a proportion of its excess cashflows
into those designated bank accounts for purposes of interest and principal repayments only. The prior security through fixed
and floating charge over the assets of Celcom including but not limited to share of its wholly owned subsidiaries of Celcom
have been released on 4 February 2004.
(c)
Secured by way of fixed and floating charge on property, plant and equipment of certain subsidiaries (note 19 to the
financial statements).
(d)
Consists of USD200.0 million 7.125% Notes due 2005, USD300.0 million 7.875% Debentures due 2025 and USD300.0
million 8.0% Guaranteed Notes due 2010.
199
THE GROUP
FOR THE YEAR ENDED
31
DECEMBER
2003
(e)
The bank overdrafts were unsecured and interests were payable at rates which varied according to the lenders’ prevailing
base lending rates. Interest rates during the year ranged from 6.5% to 6.9% (2002: 6.5% to 8.9%) per annum for a local
subsidiary and from 10.0% to 18.5% (2002: 13.5% to 18.0%) per annum for an overseas subsidiary.
The cash and cash equivalents balance sheet component was redesignated as cash and bank balances during the year.
Consequently, bank overdraft is now classified as borrowing. The comparative was reclassified accordingly.
(f)
The Group and the Company have the option to prepay the total domestic loan outstanding of RM523.8 million (2002:
RM523.8 million) and RM1,000.0 million (2002: RM1,000.0 million) respectively in 2004.
14. REDEEMABLE BONDS (UNSECURED)/PAYABLE TO A SUBSIDIARY
200
On 12 December 2003, the Company issued for cash 1,000 Class A Redeemable Preference Shares (RPS) (TM RPS A) and 1,000
Class B RPS (TM RPS B) to Rebung Utama Sdn. Bhd. (RUSB), a special purpose entity of the Company, at a premium of RM0.99
each over the par value of RM0.01 each.
Subsequently, on 30 December 2003, the Company issued RM1,983.5 million nominal value 10-year redeemable unsecured bonds
due 2013 (Tranche 1) and RM1,000.0 million nominal value 15-year redeemable unsecured bonds due 2018 (Tranche 2)
(collectively referred to as TM bonds) to RUSB.
As part of an overall cost efficient funding structure, the funds for the subscription of the Company’s RPS and bonds were raised
by RUSB vide the issuance of RM2,987.0 million RPS (RUSB RPS) to Tekad Mercu Berhad (Tekad Mercu), another special
purpose entity of the Company.
Tekad Mercu had, in turn, issued RM2,000.0 million nominal value 10-year redeemable unsecured bonds due 2013 (Tranche 1)
and RM1,000.0 million nominal value 15-year redeemable unsecured bonds due 2018 (Tranche 2) (collectively referred to as
Tekad Mercu bonds) to investors on 30 December 2003 to finance the subscription of the RUSB RPS.
Listed below are the effects of the transaction to the Group and the Company:
2003
RM
THE COMPANY
Payable to a subsidiary company, RUSB
TM RPS A of RM1,000 (sub-note a)
TM RPS B of RM1,000 (sub-note a)
10-year redeemable unsecured bonds due 2013 (Tranche 1) (sub-note b)
15-year redeemable unsecured bonds due 2018 (Tranche 2) (sub-note b)
—
—
1,983.5
1,000.0
2,983.5
THE GROUP
Redeemable Bonds (Unsecured) by Tekad Mercu
10-year redeemable unsecured bonds due 2013 (Tranche 1) (sub-note c)
15-year redeemable unsecured bonds due 2018 (Tranche 2) (sub-note c)
2,000.0
1,000.0
3,000.0
14. REDEEMABLE BONDS (UNSECURED)/PAYABLE TO A SUBSIDIARY (continued)
(a)
TM RPS A and TM RPS B
TM RPS A and TM RPS B issued by the Company to RUSB have been classified as liabilities and accordingly, dividends
on these preference shares are recognised in the Income Statement as interest expense.
(b)
(i)
The preference shares, 1,000 RPS A and 1,000 RPS B are both issued at RM0.01 par value and a premium of RM0.99
each.
(ii)
TM RPS A and TM RPS B rank pari-passu amongst themselves but below the Special Share and ahead of the ordinary
shares of the Company in a distribution of capital in the event of the winding up or liquidation of the Company.
(iii)
The non-cumulative dividends, when declared by the Board of Directors of the Company, are payable in arrears at the
end of every six (6) month period commencing from the date of issue of the RPS of 12 December 2003, the amount
which will be at the discretion of the Directors.
(iv)
The RPS is not convertible and shall not confer on the holder thereof any right to participate on a return in excess
of capital on liquidation, winding up or otherwise of the Company, other than on redemption, up to the redemption
price of RM1.00 for each RPS A and RPS B.
(v)
Both RPS A and RPS B do not have fixed maturity dates and may be redeemed in cash at the option of the Company
at any time, at a redemption price of RM1 per share.
TM Bonds
The principal features of the bonds issued by the Company to RUSB are as follows:
(i)
Unless previously redeemed, purchased and cancelled, the bonds are redeemable by the Company on 30 December
2013 and 28 December 2018 respectively at nominal amount together with accrued and unpaid interest. The bonds
may also be redeemed by the Company at any time after the issue date by private arrangement with RUSB.
(ii)
Payment of coupon on the bonds may either be:
(a)
– interest of 6.25% per annum payable semi-annually in arrears on the Tranche 1 bonds, and
– interest of 5.25% per annum payable semi-annually in arrears on the Tranche 2 bonds, with the option to reset
these rates after the fifth year; or
(b)
– net dividends on both TM RPS A and TM RPS B, which shall be equal to the interest on Tranche 1 and Tranche
2 of the bonds less any amounts in the Designated Accounts, being accounts designated to capture all
collections of dividends and tax refunds by the authorities, and
– a nominal interest of 0.005% per annum payable semi-annually.
(iii)
The bonds will constitute direct, unconditional and unsecured obligations of the Company and will at all times rank
pari-passu, without discrimination, preference or priority amongst themselves and at least pari-passu with all other
present and future unsecured and unsubordinated obligations of the Company, subject to those preferred by law or
the transaction documents.
(iv)
The bonds are not convertible, not transferable and not tradeable.
201
The salient terms of the RPS are as follows:
FOR THE YEAR ENDED
31
DECEMBER
2003
14. REDEEMABLE BONDS (UNSECURED)/PAYABLE TO A SUBSIDIARY (continued)
Tekad Mercu Bonds
The principle features of the bonds issued by Tekad Mercu are as follows:
(i)
Unless previously redeemed, purchased and cancelled, the bonds are redeemable by Tekad Mercu on 30 December
2013 and 28 December 2018 respectively at nominal amount together with accrued and unpaid interest.
(ii)
In respect of Tranche 2 only,
(a)
Tekad Mercu has the right to redeem all of the outstanding Tekad Mercu bonds (Tranche 2) on the 10th and the
20th coupon payment date (‘Optional Redemption Date’) with advance notice to the bondholders at nominal
amount together with accrued and unpaid interest (up to but excluding the relevant Optional Redemption Date)
in respect thereof.
(b)
If on the day falling 20 business days prior to any Optional Redemption Date, the rating of the Tekad Mercu
bonds (Tranche 2) shall be below AAA or its equivalent as confirmed by the Calculation Agent, then Tekad Mercu
shall be obliged to redeem all outstanding Tekad Mercu bonds (Tranche 2) on the relevant Optional Redemption
Date. Redemption of the Tekad Mercu bonds (Tranche 2) shall be at their nominal value together with all accrued
interest (up to but excluding the relevant Optional Redemption Date) in respect thereof.
202
(c)
(iii)
The bonds may also be purchased, in whole or in part, by the Company, at any time at any price in the open market
or by private treaty.
(iv)
Payment of coupon on the bonds
Interest rate of 6.20% per annum payable semi-annually in arrears on the Tranche 1 bonds and interest rate of 5.25% per
annum payable semi-annually in arrears on the Tranche 2 bonds with the option of reset these rates after the fifth year.
(v)
The bonds will constitute direct, unconditional and unsecured obligations of Tekad Mercu and will at all times rank
pari passu without discrimination, preference or priority amongst themselves and at least pari-passu with all other
present and future unsecured and unsubordinated obligations of Tekad Mercu, subject to those preferred by law or
the transaction documents.
(vi)
The bonds are not convertible but transferable, subject to certain selling restrictions.
(vii) The Company has granted a Put Option in favour of the security trustee of the bonds for the benefit of the holders
of the bonds. The Put Option will allow the holders of the bonds to have direct recourse on the Company for the
following circumstances:
(a)
on a pre-agreed time frame, there is insufficient amounts in the relevant Designated Account to meet coupon
payments and/or principal redemption of the bonds on the relevant due date for payment;
(b)
an event of default has been declared under the bonds; and
(c)
an event of default has been declared under the Put Option.
None of the TM RPS, TM bonds and Tekad Mercu bonds have been redeemed, purchased or cancelled during the financial year.
15. HEDGING TRANSACTIONS
(a)
Long Dated Swap
Underlying Liability
USD300.0 million 7.875% Debentures Due 2025
In 1998, the Company entered into a long dated swap, which will mature on 1 August 2025.
Hedging Instrument
The Company made a payment of USD5.0 million and is obliged to pay fixed amounts of JPY209.9 million semi-annually
on each 1 February and 1 August, up to and including 1 August 2025.
Prior to 1 February 2004, the counter-party is not obliged to agree to any request by the Company to terminate the
transaction. Commencing from 1 February 2004, the Company has the right to terminate the transaction at a rate mutually
agreed with the counter-party. However, the Company intends to hold the contract to maturity.
(b)
Cross-currency Interest Rate Swap (CCIRS)
USD200.0 million 7.125% Notes Due 2005
In 1995, the Company issued USD200.0 million 7.125% Notes due 2005. The Notes are redeemable in full on 1 August 2005.
Hedging Instrument
In 1999, the Company entered into a CCIRS, on a USD50.0 million tranche of the above Notes, for the period from 5 March
1999 to 1 August 2005. The effect of the transaction is to convert USD50.0 million of the fixed rate Notes to a fixed rate
JPY liability of 1.25% per annum with a premium on redemption. The premium on the redemption of the JPY leg is
dependent on the USD/JPY exchange rate on the date of maturity, nevertheless the final redemption amount is range bound
between a minimum of JPY6,080.0 million plus coupon repayment of maximum JPY1,520.0 million.
The Company has recognised the maximum coupon repayment based on a constant rate of return over the life of the
instrument with the assumption of the final redemption amount being the maximum amount payable. However, should the
final redemption amount be less than that, there would be a write-back of any over-accrued amount.
203
On 1 August 2025, the Company will receive RM750.0 million from the counter-party. These proceeds will be swapped for
USD300.0 million at a pre-determined exchange rate of RM2.5 to USD1.0, which will be used for the repayment of the
USD300.0 million 7.875% redeemable unsecured Debentures. The effect of this transaction is to effectively build up a
sinking fund with an assured value of USD300.0 million on 1 August 2025 for the repayment of the Debentures.
FOR THE YEAR ENDED
31
DECEMBER
2003
15. HEDGING TRANSACTIONS (continued)
(c)
Cross-currency Interest Rate Swap (CCIRS)
USD150.0 million (2002: USD350.0 million) Unsecured Syndicated Term Loan
In 1998, the Company entered into a 5-year USD350.0 million unsecured syndicated term loan, paying interest at floating
rates, to mature on 11 May 2003. During the year ended 31 December 2000, the facility was refinanced into two tranches
comprising USD200.0 million due on 30 June 2003 and USD150.0 million due on 29 June 2007. The first tranche of
USD200.0 million has been fully paid during the year.
Hedging Instrument
In 1998, the Company entered into an interest rate swap (IRS) agreement with notional principal of USD400.0 million that
entitles it to receive interest at floating rate and obliges it to pay interest at fixed rate of 6.75% per annum.
204
The Company unwound USD200.0 million notional principal of the swap at zero cost by embedding an interest rate ’cap’
of 7.25% per annum on the floating rate leg of the remaining USD200.0 million notional amount of the IRS. With the cap,
the floating rate interest receivable from the counter-party has effectively been limited to a maximum rate of 7.25% per
annum. The effect of this transaction is to fix the interest rate payable on USD200.0 million of the above USD loan, to
6.75% per annum as long as interest rates are below 7.25% per annum. If market interest rates exceed that level, the
interest rate payable reverts to a floating rate. The swap was scheduled to mature on 14 January 2005.
On 26 July 2001, the Company restructured the existing USD200.0 million IRS into a USD150.0 million CCIRS. The
restructured swap has the following new terms whereby, the Company will receive USD150.0 million in return for the
payment of JPY17,324.0 million on maturity of the USD150.0 million tranche of the syndicated term loan on 29 June 2007.
The restructured swap entitles the Company to receive floating interest at 6-month USD Libor, and obliges it to pay interest
at 6-month USD Libor less 1.504% per annum. The net effect of the CCIRS is to convert the Company’s USD150.0 million
debt obligation into JPY at the principal exchange rate of JPY115.4933 at the maturity date of 29 June 2007.
The objective of this transaction is to effectively convert the USD liability into a JPY principal liability, and to reduce the
interest payable on the USD150.0 million tranche of the syndicated term loan. The interest payable on the CCIRS is now a
USD floating interest with a reduced margin, calculated on a notional principal of USD150.0 million.
(d)
Interest Rate Swap (IRS)
USD300.0 million 8% Guaranteed Notes Due 2010
In 2000, the Company issued USD300.0 million 8.0% Guaranteed Notes due 2010. The Notes are redeemable in full on 7
December 2010.
Hedging Instrument
On 29 October 2003, the Company entered into an interest rate swap (IRS) agreement with notional principal of USD150.0
million that entitles it to receive interest at fixed rate of 8.0% per annum and obliges it to pay interest at floating rate of
6-month USD Libor plus 5.10%. The swap will mature on 7 December 2005.
16. CUSTOMERS’ DEPOSITS
THE GROUP
Telephones
Cellular services
Data services
Others
Amount included under other payables
TOTAL CUSTOMERS’ DEPOSITS
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
592.2
156.7
32.4
2.3
590.6
79.0
32.6
2.3
580.2
—
32.4
2.3
579.5
—
32.6
2.3
783.6
(156.7)
704.5
(79.0)
614.9
—
614.4
—
626.9
625.5
614.9
614.4
The comparative figure in respect of customers’ deposits for Cellular services has been reclassified to other payables primarily
to align with the Group business segment following the acquisition of Celcom.
17. DEFERRED TAX
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determined after appropriate
offsetting, are shown in the balance sheet:
THE GROUP
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
Deferred tax assets
Deferred tax liabilities:
Subject to income tax
160.4
—
—
—
2,031.5
1,590.3
1,694.6
1,533.6
TOTAL DEFERRED TAX
1,871.1
1,590.3
1,694.6
1,533.6
205
Telephone customers’ deposits are subjected to rebate at 5% per annum in accordance with Telephone Regulations, 1996.
FOR THE YEAR ENDED
31
DECEMBER
2003
17. DEFERRED TAX (continued)
THE GROUP
206
(a)
(b)
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
—
—
—
—
65.1
46.5
48.8
—
—
—
—
—
—
—
—
—
Total credited to Income Statement
160.4
—
—
—
At 31 December
160.4
—
—
—
1,590.3
1,388.2
1,533.6
1,361.3
Deferred Tax Assets
At 1 January
Current year credited to Income Statement arising from:
– property, plant and equipment
– tax losses
– others
Deferred Tax Liabilities
At 1 January, as restated
Current year charged to Income Statement arising from:
– property, plant and equipment
– intangible assets
– others
179.5
14.0
9.3
228.7
—
(26.1)
154.8
14.0
(7.8)
198.4
—
(26.1)
Total charged to Income Statement
202.8
202.6
161.0
172.3
Current year charged directly to equity arising from:
– acquisition of a subsidiary
238.3
—
—
—
Total charged directly to equity
238.3
—
—
—
Currency translation differences
0.1
(0.5)
—
—
1,694.6
1,533.6
At 31 December
2,031.5
1,590.3
The deferred tax assets which relate to previously unrecognised temporary differences and tax losses of RM160.4 million of a
subsidiary are recognised in the current year as it is probable that there will be future taxable profits available against which such
temporary differences and tax losses can be utilised.
17. DEFERRED TAX (continued)
The amount of deductible temporary differences and unutilised tax losses of subsidiaries for which no deferred tax asset is
recognised in the balance sheet are as follows:
THE GROUP
Deductible temporary differences
Tax losses
2003
RM
2002
RM
312.8
324.3
533.5
350.2
637.1
883.7
Breakdown of cumulative balances by each type of temporary difference:
(a)
Deferred Tax Assets
Property, plant and equipment
Tax losses
Others
Offsetting
Total Deferred Tax Assets After Offsetting
(b)
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
751.8
46.5
171.2
—
—
114.7
—
—
122.5
—
—
114.7
969.5
(809.1)
114.7
(114.7)
122.5
(122.5)
114.7
(114.7)
160.4
—
—
—
Deferred Tax Liabilities
Other intangible assets
Others
2,809.6
14.0
17.0
1,705.0
—
—
1,803.1
14.0
—
1,648.3
—
—
Offsetting
2,840.6
(809.1)
1,705.0
(114.7)
1,817.1
(122.5)
1,648.3
(114.7)
Total Deferred Tax Liabilities After Offsetting
2,031.5
1,590.3
1,694.6
1,533.6
207
THE GROUP
FOR THE YEAR ENDED
31
DECEMBER
2003
18. INTANGIBLE ASSETS
Goodwill
RM
Other
Intangible
Assets
RM
Total
RM
Net Book Value
At 1.1.2003
Transferred from associates (note 21 to the financial statements)
Acquisition of a subsidiary (note 2 to the financial statements)
Acquisition of 3G spectrum licence
—
1,207.9
2,814.8
—
—
—
—
50.0
—
1,207.9
2,814.8
50.0
At 31.12.2003
4,022.7
50.0
4,072.7
THE GROUP
At 1.1.2002
Acquisition of a subsidiary, as restated
Impairment, as restated
—
—
—
—
—
—
39.7
(39.7)
—
208
At 31.12.2002, as restated
—
39.7
(39.7)
At 31 December 2003
Cost
Accumulated impairment
4,062.4
(39.7)
50.0
—
4,112.4
(39.7)
Net Book Value
4,022.7
50.0
4,072.7
At 31 December 2002
Cost, as restated
Accumulated impairment, as restated
Net Book Value, as restated
39.7
(39.7)
—
—
39.7
(39.7)
—
—
—
Net Book Value
At 1.1.2003
Acquisition of 3G spectrum licence
—
—
—
50.0
—
50.0
At 31.12.2003
—
50.0
50.0
At 31 December 2003
Cost
—
50.0
50.0
Net Book Value
—
50.0
50.0
THE COMPANY
19. PROPERTY, PLANT AND EQUIPMENT
Net Book Value
At 1.1.2003
Acquisition of a subsidiary
Additions
Transfer to inventories
(note 24 to the
financial statements)
Disposals
Write off
Currency translation
differences
Depreciation
Impairment
Total
Property,
Plant and
Equipment
RM
Movable
Plant and
Equipment
RM
Computer
Support
Systems
RM
Land
(sub-note a)
RM
12,156.7
2,583.0
2,794.0
278.2
70.1
195.2
771.7
143.1
836.6
455.5
31.9
78.8
2,971.5
75.2
252.9
(47.2)
(5.4)
(5.6)
—
(2.5)
(0.2)
—
(0.1)
—
—
(2.0)
—
—
(0.6)
—
—
—
—
(47.2)
(10.6)
(5.8)
(10.5)
(2,565.5)
(90.2)
(0.2)
(129.6)
(4.0)
(0.2)
(733.4)
(5.0)
0.6
(1.1)
—
0.3
(121.7)
—
—
—
—
(10.0)
(3,551.3)
(99.2)
2,932.9
181.5
(1,478.8)*
19,566.5
3,084.8
2,678.7
At 31.12.2003
14,809.3
407.0
1,012.7
563.7
3,177.6
1,635.6
21,605.9
At 31 December 2003
Cost
Accumulated depreciation
35,075.4
(19,787.6)
(478.5)
1,465.3
(1,054.3)
(4.0)
3,726.9
(2,709.2)
(5.0)
570.7
(7.0)
—
4,389.8
(1,212.2)
—
1,635.6
—
—
46,863.7
(24,770.3)
(487.5)
Net Book Value
14,809.3
407.0
1,012.7
563.7
3,177.6
1,635.6
21,605.9
At 1.1.2002
Acquisition of a subsidiary
Additions
Disposals
Write off
Currency translation
differences
Depreciation
11,747.2
11.4
2,393.8
(0.7)
(50.7)
234.8
0.4
129.4
(4.8)
(0.2)
583.0
0.2
549.5
—
—
406.4
—
49.4
(0.7)
—
1,706.3
—
1,379.1
(0.5)
—
4,249.0
—
(1,316.1)*
—
—
18,926.7
12.0
3,185.1
(6.7)
(50.9)
(17.9)
(1,926.4)
(0.4)
(81.0)
(0.3)
(360.7)
0.6
(0.2)
0.1
(113.5)
At 31.12.2002
12,156.7
278.2
771.7
455.5
2,971.5
2,932.9
19,566.5
At 31 December 2002
Cost
30,304.1
(17,759.1)
(388.3)
1,229.2
(951.0)
—
2,749.1
(1,977.4)
—
461.4
(5.9)
—
4,069.3
(1,097.8)
—
2,932.9
—
—
41,746.0
(21,791.2)
(388.3)
Net Book Value
12,156.7
278.2
771.7
455.5
2,971.5
2,932.9
19,566.5
* Net of transfer to property, plant and equipment
—
—
(17.9)
(2,481.8)
209
THE GROUP
Capital WorkIn-Progress,
at Cost
Buildings
(sub-note b)
RM
RM
Telecommunication
Network
RM
FOR THE YEAR ENDED
31
DECEMBER
2003
19. PROPERTY, PLANT AND EQUIPMENT (continued)
Net book value of property, plant and equipment of certain subsidiaries pledged as security for borrowings (note 13(c) to the
financial statements):
2003
2002
RM
RM
210
Telecommunication network
Movable plant and equipment
Computer support systems
Land
Buildings
383.2
5.5
1.8
1.1
1.8
272.8
5.0
1.4
0.9
1.9
393.4
282.0
Movable
Plant and
Equipment
RM
Computer
Support
Systems
RM
Land
(sub-note a)
RM
Net Book Value
At 1.1.2003
Additions
Disposals
Write off
Depreciation
9,719.1
1,739.6
(5.7)
(4.6)
(1,755.9)
172.4
132.8
—
(0.2)
(70.0)
503.7
691.0
(0.2)
—
(561.3)
292.3
72.8
—
—
(0.5)
2,169.4
236.2
—
—
(103.2)
2,394.1
(1,052.4)*
—
—
—
15,251.0
1,820.0
(5.9)#
(4.8)
(2,490.9)
At 31.12.2003
9,692.5
235.0
633.2
364.6
2,302.4
1,341.7
14,569.4
27,789.7
(18,097.2)
1,047.4
(812.4)
2,807.0
(2,173.8)
370.7
(6.1)
3,361.7
(1,059.3)
1,341.7
—
36,718.2
(22,148.8)
9,692.5
235.0
633.2
364.6
2,302.4
1,341.7
14,569.4
THE COMPANY
At 31 December 2003
Cost
Net Book Value
Buildings
at Cost
RM
RM
Total
Property,
Plant and
Equipment
RM
Telecommunication
Network
RM
19. PROPERTY, PLANT AND EQUIPMENT (continued)
At 1.1.2002
Additions
Disposals
Write off
Depreciation
At 31.12.2002
At 31 December 2002
Cost
Net Book Value
Movable
Plant and
Equipment
RM
Computer
Support
Systems
RM
Land
(sub-note a)
RM
10,043.2
1,451.1
(32.7)
(50.7)
(1,691.8)
129.2
99.7
(6.7)
(0.2)
(49.6)
427.7
421.4
(76.9)
—
(268.5)
378.0
1.2
(86.4)
—
(0.5)
1,390.0
876.5
(19.2)
—
(77.9)
3,642.7
(691.6)*
(557.0)
—
—
16,010.8
2,158.3
(778.9)#
(50.9)
(2,088.3)
9,719.1
172.4
503.7
292.3
2,169.4
2,394.1
15,251.0
26,326.6
(16,607.5)
941.5
(769.1)
2,119.7
(1,616.0)
297.9
(5.6)
3,131.6
(962.2)
2,394.1
—
35,211.4
(19,960.4)
9,719.1
172.4
503.7
292.3
2,169.4
2,394.1
15,251.0
* Net of transfer to property, plant and equipment
# Included in disposals was RM0.6 million (2002: RM774.3 million) being property, plant and equipment transferred to subsidiaries
(a)
Details of land (at cost) are as follows:
THE GROUP
Freehold land
Long term leasehold
Short term leasehold
Other land
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
256.4
213.2
7.1
94.0
254.5
130.3
3.3
73.3
92.5
178.8
5.8
93.6
92.5
130.3
2.0
73.1
570.7
461.4
370.7
297.9
The title deeds pertaining to other land have not yet been registered in the name of the Company and a subsidiary. Pending
finalisation with the relevant authorities, these land have not been classified according to their tenure.
(b)
Included in the capital work-in-progress is finance cost capitalised for the year amounting to RM5.7 million (2002: RM5.2
million) for the Group.
211
THE COMPANY
Buildings
at Cost
RM
RM
Total
Property,
Plant and
Equipment
RM
Telecommunication
Network
RM
FOR THE YEAR ENDED
31
DECEMBER
2003
20. SUBSIDIARIES
THE COMPANY
212
Investments, at cost:
– quoted
– unquoted
Investments, at written down value:
– unquoted (sub-note a)
Malaysia
RM
2003
Overseas
RM
Total
RM
Malaysia
RM
2002
Overseas
RM
Total
RM
19.5
462.4
—
179.2
19.5
641.6
19.5
470.5
—
179.2
19.5
649.7
—
—
—
1,684.4
—
1,684.4
481.9
179.2
661.1
2,174.4
179.2
2,353.6
Amount owing by subsidiaries
(sub-note b)
10,396.5
379.7
10,776.2
4,703.8
342.2
5,046.0
Allowance for loans and advances
10,878.4
(511.1)
558.9
—
11,437.3
(511.1)
6,878.2
(406.1)
521.4
—
7,399.6
(406.1)
TOTAL INTEREST IN SUBSIDIARIES
10,367.3
558.9
10,926.2
6,472.1
521.4
6,993.5
66.7
—
66.7
72.9
—
72.9
Market value of quoted investment
(a)
Investments in certain subsidiaries have been written down to recoverable amount or RM1 each.
During the year, TM Cellular Sdn. Bhd., a wholly owned subsidiary was disposed to Celcom for a consideration equivalent
to written down value as explained in note 2 to the financial statements.
(b)
The amount owing by subsidiaries represents shareholder loans and advances for working capital purposes. These loans
and advances are unsecured and bear interest ranging from 0% to 4.72% (2002: 0% to 4.88%) with no fixed repayment
terms. However, the Company has indicated that it will not demand substantial repayment within the next twelve months.
Shareholder loans and advances provided to overseas subsidiaries are in US dollar.
The Group’s equity interest in the subsidiaries, their respective principal activities and countries of incorporation are listed in note
43 to the financial statements.
21. ASSOCIATES
Malaysia
RM
2003
Overseas
RM
Total
RM
—
—
869.2
520.8
869.2
520.8
—
—
—
1,207.9
—
1,207.9
—
1,390.0
1,390.0
1,639.1
—
1,639.1
2.9
—
2.9
2.9
819.7
822.6
74.3
(0.5)
29.2
3.7
103.5
3.2
—
(2.8)
—
287.6
—
284.8
76.7
32.9
109.6
0.1
1,107.3
1,107.4
76.7
1,422.9
1,499.6
1,639.2
1,107.3
2,746.5
—
2,808.9
2,808.9
1,512.5
16.0
1,528.5
Investments, at cost:
– quoted
– unquoted
—
1.5
—
—
—
1.5
84.2
1.5
—
10.3
84.2
11.8
Total
1.5
—
1.5
85.7
10.3
96.0
—
—
—
101.1
—
101.1
(i)
(ii)
Quoted
Share of net assets other than
goodwill of associates
– on acquisition
– post acquisition
Goodwill on consolidation,
as restated (sub-note a)
Unquoted
Share of net assets other than
goodwill of associates
– on acquisition
– associates of a subsidiary
acquired during the year
– post acquisition
Total
Market value of quoted investments
446.8
(15.6)
2002
Overseas
RM
59.8
(59.8)
Total
RM
506.6
(75.4)
THE COMPANY
(a)
In line with the change in accounting policy with respect to goodwill on acquisition, goodwill on acquisition of
associates arise on or after 1 January 2002 is reflected as part of the investment in the associates. Goodwill arise
from acquisition completed prior to 1 January 2002 was written off against reserves in the year of acquisition. Such
goodwill was not restated as it is impractical to do so.
The Group’s equity interest in the associates, their respective principal activities and countries of incorporation are listed in
note 44 to the financial statements.
213
THE GROUP
Malaysia
RM
FOR THE YEAR ENDED
31
DECEMBER
2003
22. INVESTMENTS
THE GROUP
214
Investments in International Satellite Organisations, at cost
Investments in quoted shares, at cost
Investments in unquoted shares, at cost
Investments in unquoted shares, at written down
value (sub-note a)
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
107.3
264.8
109.9
133.5
—
96.4
106.3
264.8
64.3
132.6
—
56.0
—
—
—
—
Allowance for permanent diminution in value
482.0
(97.3)
229.9
(90.3)
435.4
(97.3)
188.6
(90.3)
TOTAL INVESTMENTS AFTER ALLOWANCE
384.7
139.6
338.1
98.3
267.4
—
267.4
—
(a)
The following corporations in which Celcom Group, a subsidiary acquired during the year, owned more than one half of the
voting power, which, due to loss of control or significant influence have been accounted as investments.
–
–
–
–
Aseania Plastics Sdn. Bhd.
TRI Cellular Communications Cambodia Company
TRI Telecommunication Zanzibar Limited
Tripoly Communication Technology Corporation Ltd.
Investments in the above corporations have been written down to recoverable amount or RM1 each.
23. LONG TERM RECEIVABLES
THE GROUP
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
Staff loans under Islamic principles
Staff loans
475.5
262.0
431.7
331.8
475.5
261.5
431.7
331.7
Total staff loans (sub-note a & b)
Other long term receivables (sub-note c)
737.5
31.7
763.5
21.2
737.0
31.7
763.4
20.5
769.2
784.7
768.7
783.9
(100.3)
(99.3)
(99.9)
(99.3)
668.9
685.4
668.8
684.6
Staff loans receivable within twelve months
included under other receivables
TOTAL LONG TERM RECEIVABLES
23. LONG TERM RECEIVABLES (continued)
(a)
Staff loans comprise housing, vehicle, computer and club membership loans offered to employees with financing cost of
4.0% per annum on reducing balance basis except for club membership loans which are free of financing cost. There is
no single significant exposure as the amount is mainly receivable from individuals. Staff loans inclusive of financing cost
are repayable in equal monthly instalments as follows:
(i)
(ii)
(iii)
Housing loans – 25 years or upon employees attaining 55 years of age, whichever is earlier
Vehicle loans – maximum of 8 years for new car and 6 years for second hand car
Computer loans – 3 years
(b)
Staff loans amounting to RM82.7 million (2002: RM92.8 million) have been assigned to secure the Company’s borrowings
from Cagamas Berhad.
(c)
Other long term receivables of the Company are in respect of education loans provided to undergraduates and are
convertible to scholarships if certain performance criteria are met. The loans are interest free and if not converted to
scholarship will be repayable over a period of not more than 8 years.
THE GROUP
At cost:
Cables and wires
Network materials
Telecommunication equipment
Spares and others
At net realisable value:
Telecommunication equipment transferred from property,
plant and equipment (note 19 to the financial statements)
Spares and others
TOTAL INVENTORIES
215
24. INVENTORIES
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
30.2
32.4
18.5
40.0
38.7
30.6
24.3
37.4
30.2
32.4
17.1
23.6
38.7
29.2
21.1
16.7
121.1
131.0
103.3
105.7
47.2
35.3
—
41.5
—
—
—
—
82.5
41.5
—
—
203.6
172.5
103.3
105.7
FOR THE YEAR ENDED
31
DECEMBER
2003
25. TRADE AND OTHER RECEIVABLES
THE GROUP
2003
RM
2002
RM
2003
RM
2002
RM
Receivables from telephone customers
Receivables from non-telephone customers
Receivables from subsidiaries
2,552.1
1,754.6
—
2,358.0
1,678.9
—
1,351.7
1,284.0
392.6
1,459.0
1,224.8
326.4
Advance rental billings
4,306.7
(412.2)
4,036.9
(494.4)
3,028.3
(448.9)
3,010.2
(522.8)
3,894.5
(1,443.5)
3,542.5
(1,151.2)
2,579.4
(648.7)
2,487.4
(628.9)
2,451.0
2,391.3
1,930.7
1,858.5
590.3
574.4
540.1
528.0
190.0
100.3
—
31.2
496.1
(23.9)
190.0
99.3
—
0.4
343.3
(6.3)
190.0
99.9
52.3
3.4
296.7
(8.6)
190.0
99.3
17.3
0.4
254.9
(5.8)
Allowance for doubtful debts
Total trade receivables after allowance
216
THE COMPANY
Prepayments
Deposit for additional investment (refer to note 36 (a)
to the financial statements)
Staff loans
Other receivables from subsidiaries (sub-note a)
Other receivables from associates (sub-note a)
Other receivables
Allowance for doubtful debts
Total other receivables after allowance
1,384.0
1,201.1
1,173.8
1,084.1
TOTAL TRADE AND OTHER RECEIVABLES AFTER ALLOWANCE
3,835.0
3,592.4
3,104.5
2,942.6
2,870.2
560.0
121.5
75.5
94.4
113.4
2,617.2
660.4
83.9
29.9
110.4
90.6
2,506.4
426.6
96.0
75.5
—
—
2,262.8
566.0
83.9
29.9
—
—
3,835.0
3,592.4
3,104.5
2,942.6
The currency exposure profile of trade and other receivables
after allowance is as follows:
–
–
–
–
–
–
Ringgit Malaysia
US Dollar
Gold Franc Currency
Guinea Franc
Other currencies
25. TRADE AND OTHER RECEIVABLES (continued)
The following table represents credit risk exposure of trade receivables, net of allowances for doubtful debts and without taking
into account any collateral taken:
Business
Residential
Subsidiaries
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
1,562.4
888.6
—
1,638.9
752.4
—
1,075.4
462.7
392.6
1,076.8
455.3
326.4
2,451.0
2,391.3
1,930.7
1,858.5
The Group and the Company are not exposed to major concentrations of credit risk due to the diversed customer base. In addition,
credit risk is mitigated to a certain extent by cash deposits and bankers’ guarantee obtained from customers. The Group and the
Company consider the allowance for doubtful debts at balance sheet date to be adequate to cover the potential financial loss.
Credit terms of trade receivables range from payment in advance to 90 days in year 2003 and 2002.
(a)
Other receivables from subsidiaries and associates are unsecured and interest free with no fixed repayment terms.
26. SHORT TERM INVESTMENTS
THE GROUP
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
Shares quoted on the Malaysia Securities Exchange Berhad
263.4
197.7
260.3
197.7
TOTAL SHORT TERM INVESTMENTS
263.4
197.7
260.3
197.7
Market value of quoted shares
263.4
197.7
260.3
197.7
217
THE GROUP
FOR THE YEAR ENDED
31
DECEMBER
2003
27. CASH AND BANK BALANCES
218
THE GROUP
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
Deposits with:
Licensed banks
Licensed finance companies
Other financial institutions
Deposits under Islamic principles
1,161.6
2.4
1,047.6
600.5
345.3
3.0
740.0
424.4
—
—
679.2
139.0
85.0
3.0
740.0
208.2
Total Deposits
Cash and bank balances
Cash and bank balances under Islamic principles
2,812.1
412.0
122.0
1,512.7
241.9
80.2
818.2
33.8
—
1,036.2
102.0
—
TOTAL CASH AND BANK BALANCES
3,346.1
1,834.8
852.0
1,138.2
—
—
—
—
Less:
Bank overdraft (note 13(e) to the financial statements)
Deposits pledged
TOTAL CASH AND CASH EQUIVALENTS AT END OF THE YEAR
(6.1)
(60.7)
(13.8)
—
3,279.3
1,821.0
852.0
1,138.2
2,451.7
807.0
87.4
975.6
770.8
88.4
249.8
602.2
—
466.8
671.4
—
3,346.1
1,834.8
852.0
1,138.2
The currency exposure profile of cash and bank balances
is as follows:
– Ringgit Malaysia
– US Dollar
– Other currencies
Included in deposits of the Group is RM60.7 million which are pledged as security for banking facilities granted to associates of Celcom,
a wholly owned subsidiary acquired during the year. Deposits of the Group also included RM191.2 million being funds earmarked for
principal and interest repayments under terms of borrowings of Celcom as mentioned in note 13(b) to the financial statements.
The deposits are placed mainly with a number of creditworthy financial institutions. There is no major concentration of deposits
in any single financial institution. Deposits have maturity ranged from overnight to 365 days (2002: from overnight to 182 days)
and from overnight to 90 days (2002: from overnight to 94 days) for the Group and the Company respectively. Bank balances
are deposits held at call with banks.
The weighted average interest rate of deposits (excluding deposits under Islamic principles) as at 31 December 2003 is 2.38%
(2002: 2.32%) and 1.62% (2002: 1.94%) for the Group and the Company respectively.
28. TRADE AND OTHER PAYABLES
THE GROUP
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
Trade payables
Accruals for USP
Deferred revenue
Customer deposits
Finance cost payable
Duties and other taxes payable
Deposits and trust monies
Other payables to subsidiaries (sub-note a)
Other payables to associates (sub-note a)
Other payables
2,795.1
280.5
205.7
156.7
132.5
129.0
61.7
—
13.5
747.3
2,369.4
230.5
—
79.0
124.9
113.8
97.0
—
—
661.1
1,906.4
213.2
—
—
103.4
70.4
33.0
49.9
—
486.8
1,597.3
209.2
—
—
119.7
58.9
87.3
—
—
504.1
TOTAL TRADE AND OTHER PAYABLES
4,522.0
3,675.7
2,863.1
2,576.5
3,768.1
300.2
120.1
72.7
85.6
175.3
3,248.1
220.7
7.6
13.4
53.4
132.5
2,390.6
233.7
120.1
72.7
—
46.0
2,362.5
158.9
7.6
13.4
—
34.1
4,522.0
3,675.7
2,863.1
2,576.5
–
–
–
–
–
–
Ringgit Malaysia
US Dollar
Gold Franc Currency
Bangladesh Taka
Other currencies
219
The currency exposure profile of trade and other payables
is as follows:
Credit terms of trade and other payables vary from 30 to 90 days in year 2003 and 2002 depending on the terms of the contracts.
(a)
Other payables to subsidiaries and associates are unsecured, interest free and have no fixed terms of repayment.
29. CASH FLOWS FROM OPERATING ACTIVITIES
THE GROUP
2003
RM
Receipts from customers
Payments to suppliers and employees
Payment of finance cost
Payment of income taxes
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES
2002
RM
THE COMPANY
2003
RM
2002
RM
11,289.7
(5,707.1)
(575.6)
(344.2)
9,402.2
(4,861.3)
(449.3)
(868.2)
7,424.9
(3,686.5)
(484.0)
(316.6)
7,634.7
(3,769.6)
(445.3)
(835.2)
4,662.8
3,223.4
2,937.8
2,584.6
FOR THE YEAR ENDED
31
DECEMBER
2003
30. CASH FLOWS USED IN INVESTING ACTIVITIES
THE GROUP
220
2003
RM
2002
RM
THE COMPANY
2003
RM
2002
RM
Disposal of property, plant and equipment
Purchase of property, plant and equipment
Acquisition of intangible asset (3G Spectrum)
Disposal of long term investments
Purchase of long term investments
Disposal of short term investments
Purchase of short term investments
Acquisition of a subsidiary (note 2 to the financial statements)
Advances to a subsidiary for acquisition of another subsidiary
Additional investment in subsidiaries
Acquisition of an associate
Additional investment in an associate
Repayments from subsidiaries
Advances to other subsidiaries
Repayments of loans by employees
Loans to employees
Interest received
Dividend received
12.1
(2,566.2)
(10.0)
18.4
(254.4)
57.3
(66.7)
(2,963.5)
24.9
(3,164.2)
—
—
—
24.5
(30.8)
(3.4)
7.2
(1,764.9)
(10.0)
18.4
(250.0)
57.3
(66.7)
—
22.7
(2,114.9)
—
—
—
24.5
(30.8)
(11.0)
—
—
—
—
—
—
123.8
(97.3)
87.5
40.6
—
—
(1,653.7)
(0.7)
—
—
99.7
(115.2)
87.7
5.6
(3,793.2)
(0.1)
—
—
73.4
(96.0)
123.8
(96.8)
44.9
113.3
(1,653.7)
(46.1)
(83.0)
(0.7)
—
(294.0)
98.8
(114.4)
75.7
31.7
TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES
(5,618.4)
(4,725.6)
(5,639.4)
(4,095.2)
31. CASH FLOWS FROM FINANCING ACTIVITIES
THE GROUP
2003
RM
Issue of share capital
Issue of share capital to minority interests
Proceeds from borrowings
Repayments of borrowings
Dividends paid to shareholders
Dividends paid to minority interests
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES
593.6
—
8,836.9
(6,766.5)
(228.4)
(8.3)
2,427.3
2002
RM
535.0
27.3
1,631.2
(1,037.7)
(341.6)
(4.4)
809.8
THE COMPANY
2003
RM
2002
RM
593.6
—
8,384.1
(6,333.9)
(228.4)
—
535.0
—
1,090.0
(745.1)
(341.6)
—
2,415.4
538.3
32. SIGNIFICANT NON-CASH TRANSACTIONS
Significant non-cash transactions during the year are as follows:
THE COMPANY
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Transfer of investment in Celcom to a local investment holding subsidiary
Contra settlements with subsidiaries between trade receivables and payables
Conversion of trade receivables from a subsidiary into shareholder advances
Contra settlements with a subsidiary between trade receivables and other payables
Capitalisation of advances, loans and trade debts into paid-up capital of subsidiaries
Transfer of property, plant and equipment and capital work-in-progress
to wholly owned subsidiaries at considerations satisfied by the issuance of shares
Transfer of investment in an overseas subsidiary to a local investment holding subsidiary
2003
RM
2002
RM
1,768.2
177.6
120.0
86.2
—
—
76.8
—
—
633.0
—
—
837.0
72.4
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below is other related party
transaction and balance.
On 1 August 2002, a letter of award was issued by a subsidiary to Edward & Sons Sdn. Bhd. (ESSB) on the tender for road
rehabilitation and slope stabilisation works at TM Bukit Dabei Microwave Station, Marudi Sarawak at a contract value of
approximately RM1.6 millon. Y.B. Dato’ Joseph Salang Gandum, who is a director of the Company and a shareholder of ESSB is
deemed interested in the transaction. Progress billings from ESSB during the year amounted to RM0.9 million (2002: RM0.2
million) of which RM0.2 million remained outstanding as at 31 December 2003.
34. COMMITMENTS
(a)
THE GROUP
Commitments in respect of expenditure approved
and contracted for
Commitments in respect of expenditure approved
but not contracted for
THE COMPANY
2003
RM
2002
RM
2003
RM
2002
RM
2,544.0
3,065.3
2,259.3
2,826.5
126.2
24.4
—
—
221
33. RELATED PARTIES TRANSACTIONS
FOR THE YEAR ENDED
31
DECEMBER
2003
34. COMMITMENTS (continued)
(b)
Non-cancellable operating lease commitments
THE COMPANY
Not later than one year
Later than one year and not later than five years
Later than five years
2003
Future
minimum
lease
payments
RM
2002
Future
minimum
lease
payments
RM
52.4
262.2
52.4
53.2
226.3
121.8
367.0
401.3
222
The above lease payments relate to the non-cancellable operating lease of a telecommunication tower from a wholly owned
subsidiary.
35. CONTINGENT LIABILITIES (Unsecured)
(a)
At 31 December 2003, the Company had contingent liabilities in respect of:
(i)
Guarantees issued to banks amounting to USD26.0 million (RM98.8 million) (2002: USD26.0 million (RM98.8 million))
for banking facilities extended to overseas subsidiaries.
(ii)
A corporate guarantee was granted to a financial institution in respect of the USD21.0 million (RM79.8 million)
(2002: USD21.0 million (RM79.8 million)) financing facility obtained by a wholly owned subsidiary, MTN Networks
(Pvt.) Limited. The guarantee was executed on 6 May 2002 and will expire in March 2010.
(iii)
Guarantee of a series of Promissory Notes totalling approximately USD6.7 million (RM25.4 million) (2002: USD6.7
million (RM25.4 million)) issued by Sotelgui S.A., a subsidiary, in favour of an equipment supplier on 18 April 2002.
The Promissory Notes are payable during the period between November 2003 to December 2005.
(iv)
A corporate guarantee was granted to a financial institution in respect of the USD25.0 million (RM95.0 million)
financing facility obtained by a wholly owned subsidiary, MTN Networks (Pvt.) Limited. The guarantee was executed
in November 2003 and will expire in November 2005.
35. CONTINGENT LIABILITIES (Unsecured) (continued)
(b)
There is a claim arising from an agreement dated 10 February 1998 made between Telekom Malaysia (TM) and Tan Sri
Mustapha Kamal Haji Abu Bakar, Eastborne Corporation Berhad, Projass Engineering Berhad and Shorefield Holdings Sdn.
Bhd. (collectively referred to herein as MEPS JV), MEPS JV agreed to design, construct and complete the proposed
Multimedia University Campus at Cyberjaya, Selangor Darul Ehsan.
The disputes between the parties, amongst others include the completion of outstanding works, remedying of defects,
retention of the cash performance guarantee, the deduction of liquidated damages for delay and the certification and
payment of the retention money. This dispute has been referred to Jabatan Kerja Raya (JKR) of which, on 27 June 2002,
JKR has awarded a compensation of RM63.8 million in favour of MEPS JV.
Pursuant to the compensation awarded by JKR (the Award), TM filed an appeal for review of the Award in the High Court
by way of an Originating Motion (OM). Simultaneously, MEPS JV filed an application to enforce the said Award by way of
an Originating Summons (OS).
(c)
On 11 August 2003, TM and Telekom Publications Sdn. Bhd. (TPSB) instituted legal proceedings against Buying Guide Sdn.
Bhd. (BGSB) relating to the infringement of TM’s and TPSB’s copyright and passing off.
BGSB have filed their Defence and Counterclaim on 15 October 2003 and it was agreed that TM and TPSB will file a Reply
and Defence after BGSB and their shareholders confirm that they will not be amending their Defence and Counterclaim.
(d)
Inmiss Communications Sdn. Bhd. (Inmiss) has filed a Notice for Arbitration against Mobikom Sdn. Bhd. (Mobikom) for
outstanding payment on Inmiss’s share of message tariff revenue including interest charges and other losses in the amount
of RM29.0 million.
The arbitration hearing is held at the Kuala Lumpur Regional Center for Arbitration. The next hearing date has been
scheduled on 3 March 2004 for final submission by Mobikom.
(e)
On 10 March 2000, Celcom Timur (Sarawak) Sdn. Bhd. (CTS) served a writ of summons on Celcom (Malaysia) Berhad
(Celcom), in respect of the lease of fibre optic links for RM102.6 million with interest accruing thereon. Celcom disputed
the amount claimed on the basis that CTS used an incorrect method of calculation to determine the amount owing. Celcom
entered defence against the suit, and applied to strike out the suit for want of authority. A Summary Judgement was passed
by the Kuching High Court on 23 February 2001 in favour of CTS for RM90.6 million. Celcom is appealing against this
Summary Judgement and the date for the appeal has yet to be set by the Court of Appeal.
The trial of the disputed balance of the claim amounting to RM12.0 million will only be heard after the hearing of the above
Summary Judgement appeal. The outcome of the legal action and hence any amount payable to CTS cannot be ascertained
at this juncture pending hearing on a date to be fixed by the Court.
No provision has been made for the disputed claim as the directors of Celcom are of the opinion that the likelihood of
crystallisation of the additional claim is remote.
223
On 10 November 2003, the High Court fixed 11 March 2004 as the new mention date for the OM and the OS.
FOR THE YEAR ENDED
31
DECEMBER
2003
(f)
Celcom filed a petition against Sarawak Electricity Supply Corporation (Sesco) (and other persons connected with Sesco)
under Section 181 of the Companies Act, 1965 and on 25 May 2001, also sought an interim injunction to restrain CTS
from proceeding with a winding up petition against Celcom. On 14 June 2001, Celcom successfully obtained an interim
injunction restraining CTS from filing or proceedings with the winding up petition pending disposal of the inter parties
injunction application. On 1 August 2001, CTS gave a notice to Celcom of its intention to sell Celcom’s shares in CTS in
the event Celcom failed to make payment of the Summary Judgement referred to in (e) above. Sesco’s application to strike
out Celcom’s petition has been fixed for hearing on 22 March 2004. The directors of Celcom, based on legal opinion
received are of the view that Celcom has a reasonable chance of succeeding in this matter.
(g)
On 3 August 2001, Sesco, joint venture partner of Celcom in CTS, filed at the Kuching High Court by way of Writ of Summons
to seek a declaration that the Joint Venture Agreement (JVA) dated 5 May 1994 should be terminated as Celcom had
purportedly breached certain conditions stipulated under the JVA. Celcom’s application for stay of proceedings and for the
dispute to be referred to arbitration was dismissed by the High Court whereupon Celcom filed an appeal to the Court of Appeal
together with an application in the High Court for an interim stay pending appeal. On 25 July 2002, the Court of Appeal heard
and dismissed the arbitration stay appeal. Accordingly, on 13 August 2002, the Judge dismissed the appeal for interim stay.
224
On 13 September 2001, Sesco filed an application for “disposal of case on point of law” under Order 14A of the Rules of the
High Court 1980 (Order 14A) and to enter judgement on its claim. The Order 14A application has been fixed for mention on
3 March 2004.
The directors of Celcom, based on legal opinion received, are of the view that since the interim stay has been refused on
the grounds that there are no disputes to be referred to arbitration, Sesco has a good chance in its application for a
judgment under Order 14A. If Sesco succeeds in the Order 14A hearing, the Court would order Celcom to transfer its CTS
shares to Sesco at a price to be determined by an independent auditor. Celcom may suffer a loss in the event this price
values the interest in CTS at below Celcom’s carrying value of its investment in CTS of RM48.4 million.
The parties are currently in discussions with each other towards a global out-of-court settlement of this dispute together
with the matters discussed in (e) and (f) above. The directors of Celcom are optimistic that such a settlement can be
reached and that the value to be realised under the settlement will at least be equal to Celcom group’s carrying value of
its investment in CTS.
(h)
By a letter dated 16 August 2002, Malaysian Airlines System Berhad (MAS) had demanded a total sum of RM16.4 million
from Technology Resources Industries Berhad (TRI) with regard to a project account. Celcom group is in discussion with MAS
to reach an amicable settlement on this issue which is not expected to have a material impact on the financial statements.
(i)
By a JVA dated 13 September 1993, TRI and VIP Engineering and Marketing Limited (VIPEM) agreed to establish TRI
Telecommunications Tanzania Limited (Tritel) as a joint venture company, to provide telecommunications services in
Tanzania. The shareholding structure was 60% TRI and 40% VIPEM.
On 10 December 2001, vide Civil Case No. 427 of 2001 (the Suit) VIPEM filed a suit against TRI claiming a sum of USD18.6
million as its share of loss of profits for mismanagement of Tritel. VIPEM asked for an order to be made on an ex-parte
basis. Tritel and TRI’s lawyers asserted that the Court has no jurisdiction to entertain the Chamber Application because of
the arbitration clause in the JVA and applied for a stay of proceedings. The Court declined to grant the ex-parte order and
TRI filed petition to stay the proceedings. The petition has yet to be heard. Pending determination of the Suit, VIPEM applied
to the Tanzania High Court for the appointment of receiver/manager to take conduct over the running of Tritel.
(i)
Tanzania Communications Commission (TCC) revoked Tritel’s license as of 31 January 2003. On 14 January 2003, Citibank of
Tanzania (Citibank) appointed receivers and managers by virtue of a debenture issued by Tritel as a loan security to Citibank.
Subsequently, on 12 June 2003, the High Court of Tanzania had endorsed a petition by three creditors of Tritel, namely
TCC, Tanzania Telecommunications Company Limited and Tanzania Revenue Authority to wind up Tritel. VIPEM had filed an
affidavit in support of the said petition. As a result thereof, the High Court has admitted VIPEM as a joint creditor of Tritel.
Consequently, the Court also held the joint receivers and managers, who were appointed by Citibank, were ordered to
handover statements and accounts of Tritel’s affairs to the newly appointed liquidator. In the light of the appointment of the
liquidator, the Court had on 17 July 2003 adjourned sine die the Suit.
As the result of the Court ruling, Citibank had independently filed an application to challenge the ruling. Legal proceeding
concerning Citibank’s application is ongoing.
The directors of Celcom, based on legal opinion received, are of the view that on the allegations of mismanagement, unless
more evidence can be produced, the allegations are rhetorical and unsubstantiated. In view of the winding up proceedings,
there is also a possibility that VIPEM will not pursue its claim. Hence, no provision has been made in the financial
statements for the claim made by VIPEM.
(j)
TRI and Integrated Services Limited (ISL) entered into a JVA dated 21 January 1995 on the establishment of Sheba Telecom
(Pvt.) Ltd. (Sheba) as the joint venture company in Bangladesh. ISL and TRI initially held 51% and 49% of Sheba’s equity
respectively. On 10 June 1997, the parties agreed to amend the equity holding of TRI and ISL in Sheba to 51% and 49%
respectively. On 18 March 1999, Sheba’s board of directors resolved to increase the issued and paid-up capital of Sheba
by way of capitalisation of advances made by TRI to Sheba, thereby increasing TRI’s share of the equity to 86.4%.
In or about April 2000, ISL commenced a suit in the Supreme Court of Bangladesh against Sheba, TRI, the directors of
Sheba and the Registrar of Joint Stock Companies for, inter alia, alleged misconduct and mismanagement on the part of
the directors (the Suit). One of the allegations made by ISL in this claim was that the resolution passed to increase TRI’s
share of equity to 86.4% was invalid. On 19 November 2001, TRI successfully obtained an order staying the proceedings
of the Suit and for the matter to be referred to arbitration proceedings. TRI then commenced the arbitration in Singapore
to seek declarations refuting certain allegations made by ISL in the Suit.
225
In the light of the winding up order made against Tritel, on 22 July 2003 TRI filed its claim of RM123.4 million to the
liquidator of Tritel.
FOR THE YEAR ENDED
31
DECEMBER
2003
(j)
ISL also made a counterclaim in the arbitration, alleging, inter alia, breaches of the terms of the JVA and other alleged
irregularities in the management and operations of Sheba and is seeking, inter alia, an order that TRI pays to ISL:
(i)
a sum of USD179.3 million being alleged net loss of potential earnings of Sheba;
(ii)
a sum of USD36.2 million being the alleged net loss of opportunity to enter into and implement another agreement
with the Bangladesh Telegraph and Telephone Board; and
(iii)
a sum of USD2.6 million which TRI allegedly agreed to pay to ISL as marketing consulting fee.
The arbitration hearing proceeded as scheduled from 19 January 2004 to 30 January 2004. Continued hearing has been
fixed from 12 May 2004 until 28 May 2004.
226
The directors of Celcom, based on legal opinion received, are of the view that the arbitration is likely to be decided in TRI’s
favour. As such, no allowance has been made for the amounts claimed by ISL. The carrying value of Celcom group’s
investment in and advances to Sheba were also not adjusted to reflect the potential exposure in the event of an unfavourable
outcome to the arbitration.
(k)
On 10 March 2003, Celcom received a letter from DeTeAsia Holding GmbH (DTAH) informing Celcom that it had initiated
an arbitration by way of a Request for Arbitration dated 7 March 2003 (Request) which was filed on 10 March 2003 with
the Secretariat of the International Court of Arbitration of the International Chamber of Commerce in Paris (ICC) pursuant
to Clause 8.6 of the Amended and Restated Supplemental Agreement dated 4 April 2002 between TRI, DTAH, Celcom and
TR International Limited (TRIL) (the Amended and Restated Agreement).
DTAH is essentially claiming damages for breach of the Amended and Restated Agreement. DTAH’s contention is that by
entering into the Sale and Purchase Agreement with Telekom Malaysia Berhad for the acquisition of the whole of the issued
and paid-up capital of TM Cellular Sdn. Bhd. (TM Cellular) and the subsequent acquisition of TM Cellular without the consent
of DTAH, Celcom has acted in breach of the Amended and Restated Agreement. DTAH is seeking damages in an amount to
be calculated by reference to the provisions of Schedule 1 of the Amended and Restated Agreement, together with interest
at eight percent (8%) per annum from 16 October 2002 and costs. Celcom’s contention is essentially that the consent of
DTAH was not required for the acquisition of TM Cellular and that such provisions in the Amended and Restated Agreement
on which DTAH relies on are either not enforceable or that DTAH is precluded from asserting the validity of the same.
Subsequent to the filing of the Request, DTAH has also raised further allegations of breaches against Celcom in the
Summary of Case filed by DTAH with the ICC on 1 August 2003. A three-member arbitral tribunal has been constituted and
the hearing date has been fixed from 12 July 2004 to 23 July 2004 for the hearing of the arbitration.
The directors of Celcom, based on legal opinion received, are of the view that the prospects of successfully defending the
arbitration are reasonable. In the event that the arbitral tribunal finds in favour of DTAH, the damages payable by Celcom
to DTAH will have to be assessed. It would not be possible, at this stage, to determine with any certainty the quantum of
such damages.
Apart from the above, the Directors are not aware of any other proceedings pending against the Company and/or its subsidiaries
or of any facts likely to give rise to any proceedings which might materially affect the position or business of the Company and/or
its subsidiaries.
There were no other contingent liabilities or material litigations or guarantees other than those arising in the ordinary course of
the business of the Group and the Company and on these no material losses are anticipated.
36. SIGNIFICANT EVENTS
On 18 September 2002, Telekom Malaysia (TM) issued a Notification of Claim to the Government of Ghana (GoG) pursuant
to the Bilateral International Treaty between the Government of Malaysia and GoG on 11 November 1996 (BIT) in respect
of the following disputes:
(i)
GoG’s past treatment of TM’s investment in Ghana Telecommunications Company Limited (GT) held through TM
International Sdn. Bhd. and G-Com Limited which resulted in TM losing significant influence over the financial and
operation policies decisions of GT. Accordingly, the investment in GT has been recorded as long term investment
during year 2002.
(ii)
GoG’s failure to refund a USD50.0 million (RM190.0 million) deposit for the proposed acquisition of additional 15%
equity interest in GT (as disclosed in note 25 to the financial statements) pursuant to the Head of Agreement entered
into between TM and GoG dated 10 August 2000.
Since the parties could not reach an amicable settlement, TM through its counsel in London, sent a Notice of Arbitration
to the GoG on 10 February 2003 for the commencement of arbitration proceedings under the UNCITRAL Arbitration Rules
in accordance with the provisions of the BIT. Subsequently, the arbitral tribunal was constituted in accordance to the
provisions of BIT. Based on the preparatory meeting in relation to the arbitration between TM and GoG held on 17 July
2003 at The Hague, it was agreed that the arbitration hearing will start on 5 July 2004 for a period of two (2) weeks.
(b)
G-Com Limited (G-Com), a subsidiary of TM, filed an application in the High Court of Ghana on 13 June 2002, seeking a
declaration that the Extraordinary General Meeting (EGM) held on 3 June 2002 was null and void. On 31 July 2002, the
High Court of Ghana dismissed G-Com’s application for a declaration to nullify the EGM held on 3 June 2002.
On 25 September 2002, G-Com filed an appeal in the Court of Appeal of Ghana against the decision of the High Court
dated 31 July 2002. The Court of Appeal has yet to fix the hearing date of the said appeal. Meanwhile, the High Court
Judge has provided his written Judgment and TM has been advised that the earliest hearing date of the said appeal will
approximately be fixed in the first quarter of 2004.
(c)
G-Com filed a Writ of Summons and a Statement of Claim at the High Court of Ghana against GT on 24 December 2003
in respect of the EGM and AGM resolutions to approve certain contracts and loans. The hearing date is expected to be in
February 2004.
227
(a)
FOR THE YEAR ENDED
31
DECEMBER
2003
37. SEGMENTAL REPORTING
By Business
The Group is organised on a worldwide basis in three main business segments:
(a)
Fixed line
– represents fixed line, data, internet and multimedia and other telecommunication related services
(b)
Cellular
– represents mobile telecommunication services
(c)
Non-telecommunication related services
– represents services provided by subsidiaries with core business in consultancy, property management, education and
other activities, none of which are of a sufficient size to be reported separately
228
Segment results represent segment operating revenue less segment expenses. Unallocated income includes interest income,
dividend income and gain or loss on disposal of investments. Unallocated costs represent corporate expenses and net foreign
exchange differences arising from revaluation of corporate borrowings. The accounting policies used to derive reportable segment
results are consistent with those as described in the Significant Accounting Policies.
Segment assets disclosed for each segment represent assets directly managed by each segment, primarily include intangibles,
receivables, property, plant and equipment, inventories and cash and bank balances. Unallocated corporate assets mainly include
staff loans, other long term receivables, investments, deferred tax assets and property, plant and equipment of the Company’s
training centre.
Segment liabilities comprise operating liabilities and exclude corporate borrowings, interest payable on corporate borrowings,
current tax and deferred tax liabilities.
Segment capital expenditure comprises additions to intangibles, property, plant and equipment, including additions resulting from
acquisition of subsidiaries as shown in note 18 and 19 to the financial statements.
Significant non-cash expenses comprise mainly allowances and unrealised foreign exchange losses (excluding net foreign
exchange differences arising from revaluation of corporate borrowings) as shown in note 4 to the financial statements.
Prior year’s segment data presented for comparative purposes has been adjusted or extended to conform with changes in
presentation due to retrospective application of accounting policies as described in note 42 to the financial statements.
37. SEGMENTAL REPORTING (continued)
Cellular
RM
Others
RM
Total
RM
Year Ended 31 December 2003
Operating Revenue
Total operating revenue
Inter-segment*
8,344.8
(405.0)
3,875.4
(269.1)
473.0
(222.7)
12,693.2
(896.8)
External operating revenue
7,939.8
3,606.3
250.3
11,796.4
1,588.6
453.2
86.6
Results
Segment result
Unallocated income
Corporate expenses
Foreign exchange losses
Finance cost
Finance income
Share of profits less losses of associates
236.2
139.0
—
2,128.4
85.6
(266.6)
(82.1)
1,865.3
(517.1)
87.1
375.2
Taxation
1,810.5
(366.3)
Minority interests
1,444.2
(53.8)
1,390.4
At 31 December 2003
Net Assets
Segment assets
Associates
Unallocated corporate assets
19,473.1
1,211.8
12,050.6
287.8
1,272.2
—
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
32,795.9
1,499.6
1,744.8
36,040.3
3,457.3
4,200.4
114.1
7,771.8
11,241.0
19,012.8
229
Fixed line,
data, internet
and multimedia
RM
FOR THE YEAR ENDED
31
DECEMBER
2003
230
Fixed line,
data, internet
and multimedia
RM
Cellular
RM
Others
RM
Total
RM
Other Information
Capital expenditure
– additions during the year
Depreciation
Write off of property, plant and equipment
Impairment of property, plant and equipment
Significant non-cash expenses
1,969.5
—
2,587.4
5.7
4.3
251.0
684.7
5,899.6
932.6
0.1
94.9
269.0
27.3
—
31.3
—
—
2.3
2,681.5
5,899.6
3,551.3
5.8
99.2
522.3
Operating Revenue
Total operating revenue
Inter-segment*
8,373.9
(342.4)
1,674.6
(85.7)
341.5
(127.8)
10,390.0
(555.9)
External operating revenue
8,031.5
1,588.9
213.7
9,834.1
1,851.9
100.5
33.4
1,985.8
85.4
(213.1)
(66.3)
Results
Segment result
Unallocated income
Corporate expenses
Foreign exchange losses
Finance cost
Finance income
Share of profits less losses of associates
Taxation
38.5
4.0
—
1,791.8
(389.6)
85.7
42.5
1,530.4
(659.7)
Minority interests
870.7
(26.4)
844.3
Cellular
RM
Others
RM
Total
RM
19,810.3
985.7
3,934.8
1,760.8
1,321.8
—
25,066.9
2,746.5
1,122.0
Total assets
Segment liabilities
Unallocated liabilities
28,935.4
3,201.8
1,599.7
157.7
Total liabilities
Other Information
Capital expenditure
– additions during the year
Depreciation
Write off of property, plant and equipment
Impairment of goodwill
Significant non-cash expenses
4,959.2
8,830.9
13,790.1
2,162.5
51.7
2,145.4
50.9
39.7
347.6
1,004.6
—
280.7
—
—
253.0
18.0
—
55.7
—
—
0.2
3,185.1
51.7
2,481.8
50.9
39.7
600.8
* Inter-segment operating revenue has been eliminated in arriving at respective segment operating revenue. The inter-segment
operating revenue was entered into in the normal course of business and at prices available to third parties or at negotiated terms.
By Geographical Location
Although the Group operates in many countries as shown in note 43 to the financial statements, the segmentisation of Group
operation by geographical location is only segmentised to Malaysia and overseas as no individual overseas country contributed
more than 10% of consolidated operating revenue or assets.
In presenting information for geographical segments of the Group, sales are based on the country in which the customer is located.
There is no sale between the segments. Total assets and capital expenditure are determined based on where the assets are located.
231
At 31 December 2002
Net Assets
Segment assets
Associates
Fixed line,
data, internet
and multimedia
RM
FOR THE YEAR ENDED
31
DECEMBER
2003
OPERATING REVENUE
Malaysia
Overseas
Associates
232
Total assets
TOTAL ASSETS
CAPITAL EXPENDITURE
2003
RM
2002
RM
2003
RM
2002
RM
2003
RM
2002
RM
10,996.9
799.5
9,292.8
541.3
31,035.7
1,760.2
23,592.2
1,474.7
8,173.2
407.9
2,948.9
287.9
11,796.4
9,834.1
32,795.9
25,066.9
8,581.1
3,236.8
1,499.6
1,744.8
2,746.5
1,122.0
36,040.3
28,935.4
38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Group’s financial assets and liabilities are foreign exchange, interest rate, credit and liquidity risks.
The Group’s overall risk management seeks to minimise potential adverse effects of these risks on the financial performance of
the Group.
The Group has established risk management policies, guidelines and control procedures to manage its exposure to financial risks.
Hedging transactions are determined in the light of commercial commitments. Derivative financial instruments are used only to
hedge underlying commercial exposures and are not held or sold for speculative purposes.
Foreign Exchange Risk
The foreign exchange risk of the Group arises from borrowings denominated in foreign currencies. The Group has long dated, crosscurrency interest rate and interest rate swaps that are primarily used to hedge selected long term foreign currency borrowings to
reduce the foreign currency exposures on these borrowings. The main currency exposures are primarily US Dollar and Japanese Yen.
The Group also has subsidiaries and associates operating in foreign countries, which generate revenue and incur costs
denominated in foreign currencies. The main currency exposures are primarily Guinea Franc, Bangladesh Taka, Sri Lanka Rupee
and South African Rand.
Interest Rate Risk
The Group has cash and bank balances and deposits placed with creditworthy licensed banks and financial institutions. The Group
manages its interest rate risks by placing such balances on varying maturities and interest rate terms.
The Group’s debt includes bank overdrafts, bank borrowings, bonds, notes and debentures. The Group’s interest rate risk objective
is to manage the interest expense consistent with maintaining an acceptable level of exposure to interest rate fluctuations. In
order to achieve this objective, the Group targets a mix of fixed and floating debt based on assessment of its existing exposure
and desired interest rate profile. To obtain this mix, the Group uses combined cross-currency interest rate swaps to convert
certain long term foreign currency borrowings from variable to fixed rate or vice versa.
38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Credit Risk
Financial assets that potentially subject the Group to concentrations of credit risk consist primarily trade receivables, cash and
bank balances, marketable securities and financial instruments used in hedging activities.
Due to the nature of the Group’s business, customers are mainly segregated into business and residential. The Group has no
other major significant concentration of credit risk other than business and residential trade receivables due to its diverse
customer base. Credit risk is managed through the application of credit assessment and approvals, credit limits and monitoring
procedures. Where appropriate, the Group obtained deposits or bank guarantees from the customers.
The Group places its cash and cash equivalents and marketable securities with a number of creditworthy financial institutions.
The Group’s policy limits the concentration of financial exposure to any single financial institution.
Liquidity Risk
In the management of liquidity and cash flow risk, the Group monitors and maintains a level of cash and cash equivalents deemed
adequate by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. Due to the
dynamic nature of the underlying business, the Group aims at maintaining flexibility in funding by keeping both committed and
uncommitted credit lines available.
39. INTEREST RATE RISK
The table below summarises the Group and the Company’s exposure to interest rate risk. Included in the tables are the Group
and the Company’s financial assets and liabilities at carrying amounts, categorised by the earlier of repricing or contractual
maturity dates. The off-balance-sheet gap represents the net notional amounts of all interest rate sensitive derivative instruments.
Sensitivity to interest rates arises from mismatches in the repricing dates, cash flows and other characteristics of assets and their
corresponding liability funding.
W.A.R.F.*
THE GROUP
2003
Financial Assets
Investments
Staff Loans and Other
Long Term Receivables
Trade and Other Receivables
(excluding short term staff loans)
Short Term Investments
Cash and Bank Balances
Total
Floating
interest
rate
RM
Fixed interest rate
maturing or repriced in
1 year or
1 to 5 More than
less
years
5 years
RM
RM
RM
Total
interest
sensitive
RM
Noninterest
sensitive
RM
Balances
under
Islamic
principles
RM
Total
RM
2.00%
6.9
—
1.7
—
8.6
376.1
—
384.7
4.00%
—
3.4
24.9
233.2
261.5
32.2
475.5
769.2
1.45%
—
2.38%
23.7
—
—
—
—
2,273.5
—
—
—
—
—
—
23.7
—
2,273.5
3,711.0
263.4
350.1
—
—
722.5
3,734.7
263.4
3,346.1
30.6
2,276.9
26.6
233.2
2,567.3
4,732.8
1,198.0
8,498.1
233
All hedging instruments are executed with creditworthy financial institutions with a view to limit the credit risk exposure of the
Group. The Group, however, is exposed to credit-related losses in the event of non-performance by counterparties to financial
derivative instruments, but does not expect any counterparties to fail to meet their obligations.
FOR THE YEAR ENDED
31
DECEMBER
2003
39. INTEREST RATE RISK (continued)
W.A.R.F.*
THE GROUP
234
2003
Financial Liabilities
Total Borrowings
Customers’ Deposits
Trade and Other Payables
Fixed interest rate
1 year or
1 to 5 More than
less
years
5 years
RM
RM
RM
Total
interest
sensitive
RM
Noninterest
sensitive
RM
Balances
under
Islamic
principles
RM
Total
RM
3,379.7
—
—
537.6
—
—
919.3
—
—
4,874.5
—
—
9,711.1
—
—
6.1
626.9
4,522.0
1,991.2
—
—
11,708.4
626.9
4,522.0
Total
3,379.7
537.6
919.3
4,874.5
9,711.1
5,155.0
1,991.2
16,857.3
On-balance-sheet interest sensitivity gap
Off-balance-sheet interest sensitivity gap
(3,349.1)
—
1,739.3
—
(892.7)
—
(4,641.3)
—
Total interest sensitivity gap
(3,349.1)
1,739.3
(892.7)
(4,641.3)
—
—
—
—
—
—
139.6
—
139.6
4.00%
—
6.7
21.2
303.8
331.7
21.3
431.7
784.7
1.73%
—
2.32%
12.0
—
—
—
—
1,132.8
—
—
—
—
—
—
12.0
—
1,132.8
3,481.1
197.7
197.4
—
—
504.6
3,493.1
197.7
1,834.8
12.0
1,139.5
21.2
303.8
1,476.5
4,037.1
936.3
6,449.9
—
1,520.0
—
—
—
669.1
—
—
1,361.6
964.4
—
—
—
2,459.3
—
—
1,361.6
5,612.8
—
—
—
5.8
625.5
3,675.7
—
696.3
—
—
1,361.6
6,314.9
625.5
3,675.7
Total
1,520.0
669.1
2,326.0
2,459.3
6,974.4
4,307.0
696.3
11,977.7
(1,508.0)
—
470.4
—
(2,304.8)
—
(2,155.5)
—
(1,508.0)
470.4
(2,304.8)
(2,155.5)
2002
Financial Assets
Investments
5.03%
—
—
Floating
interest
rate
RM
Total
Convertible Bonds
Total Borrowings
4.00%
5.14%
—
—
* W.A.R.F. – Weighted Average Rate of Finance as at 31 December
USD
2003
JPY
RM
USD
2002
JPY
RM
Financial Assets
Long Term Investment
Staff Loans
0.89%
—
1.45%
1.26%
—
—
—
—
—
4.00%
—
2.66%
—
—
1.73%
1.44%
—
—
—
—
—
4.00%
—
2.92%
Convertible Bonds
Total Borrowings
—
5.45%
—
1.87%
—
5.80%
4.00%
6.24%
—
2.09%
—
4.08%
THE GROUP
W.A.R.F.*
THE COMPANY
2003
Financial Assets
Amount Owing by Subsidiaries
net of allowances
Investments
Floating
interest
rate
RM
Fixed interest rate
1 year or
1 to 5 More than
less
years
5 years
RM
RM
RM
Total
interest
sensitive
RM
Noninterest
sensitive
RM
Balances
under
Islamic
principles
RM
Total
RM
1.83%
—
1,489.4
—
—
—
7.7
—
—
—
1,497.1
—
8,768.0
338.1
—
—
10,265.1
338.1
4.00%
—
3.4
24.9
233.2
261.5
31.7
475.5
768.7
—
—
1.62%
—
—
—
—
—
679.3
—
—
—
—
—
—
—
—
679.3
3,004.6
260.3
33.7
—
—
139.0
3,004.6
260.3
852.0
1,489.4
682.7
32.6
233.2
2,437.9
12,436.4
614.5
15,488.8
2,550.8
—
—
—
2.4
—
—
—
871.8
—
—
—
2,314.9
2,983.5
—
—
5,739.9
2,983.5
—
—
6.1
—
614.9
2,863.1
689.0
—
—
—
6,435.0
2,983.5
614.9
2,863.1
Total
2,550.8
2.4
871.8
5,298.4
8,723.4
3,484.1
689.0
12,896.5
(1,061.4)
—
680.3
—
(839.2)
—
(5,065.2)
—
(1,061.4)
680.3
(839.2)
(5,065.2)
Total
Total Borrowings
Payable to a subsidiary
4.91%
5.91%
—
—
235
The table below summarises the weighted average rate of finance as at 31 December by major currencies for each class of financial
asset and liability:
FOR THE YEAR ENDED
31
DECEMBER
2003
W.A.R.F.*
236
THE COMPANY
2002
Financial Assets
Amount Owing by Subsidiaries
net of allowances
Investments
Floating
interest
rate
RM
Fixed interest rate
1 year or
1 to 5 More than
less
years
5 years
RM
RM
RM
Total
interest
sensitive
RM
Noninterest
sensitive
RM
Balances
under
Islamic
principles
RM
Total
RM
1.88%
—
1,494.1
—
—
—
7.7
—
—
—
1,501.8
—
3,138.1
98.3
—
—
4,639.9
98.3
4.00%
—
6.7
21.2
303.8
331.7
20.5
431.7
783.9
—
—
1.94%
—
—
—
—
—
828.0
—
—
—
—
—
—
—
—
828.0
2,843.3
197.7
102.0
—
—
208.2
2,843.3
197.7
1,138.2
1,494.1
834.7
28.9
303.8
2,661.5
6,399.9
639.9
9,701.3
—
1,314.0
—
—
—
160.0
—
—
1,361.6
860.6
—
—
—
2,888.0
—
—
1,361.6
5,222.6
—
—
—
5.8
614.4
2,576.5
—
689.0
—
—
1,361.6
5,917.4
614.4
2,576.5
1,314.0
160.0
2,222.2
2,888.0
6,584.2
3,196.7
689.0
10,469.9
180.1
—
674.7
—
(2,193.3)
—
(2,584.2)
—
180.1
674.7
(2,193.3)
(2,584.2)
Total
Convertible Bonds
Total Borrowings
Total
4.00%
5.94%
—
—
* W.A.R.F. – Weighted Average Rate of Finance as at 31 December
39. INTERES RATE RISK (continued)
USD
2003
JPY
RM
USD
2002
JPY
RM
Financial Assets
Amount Owing by Subsidiaries net of allowances
Staff Loans
3.99%
—
1.23%
—
—
—
1.50%
4.00%
2.62%
4.16%
—
1.46%
—
—
—
1.54%
4.00%
2.92%
Convertible Bonds
Total Borrowings
—
5.57%
—
1.87%
—
7.89%
4.00%
6.37%
—
2.09%
—
7.24%
THE COMPANY
40. CREDIT RISK
For on-balance-sheet financial instruments, the main credit risk exposure has been disclosed elsewhere in the financial statements.
Off-balance-sheet financial instruments
The Group and the Company are exposed to credit risk where the fair value of the contract is favourable, where the counterparty
is required to pay the Group or the Company in the event of contract termination. The following table summarises the favourable
fair values of the contracts, indicating the credit risk exposure.
2003
Contract
or notional
principal
Favourable
amount
fair value
RM
RM
Long dated swap
Cross-currency interest rate swap
Interest rate swap
2002
Contract
or notional
principal
Favourable
amount
fair value
RM
RM
750.0
—
570.0
66.4
—
1.4
750.0
190.0
—
47.5
1.8
—
1,320.0
67.8
940.0
49.3
237
The table below summarises the weighted average rate of finance as at 31 December by major currencies for each class of
financial asset and liability:
FOR THE YEAR ENDED
31
DECEMBER
2003
41. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The fair value of a financial instrument is assumed to be the amount at which the instrument could be exchanged or settled
between knowledgeable and willing parties in an arm’s length transaction, other than in forced or liquidation sale.
Quoted market prices, when available, are used as the measure of fair values. However, for a significant portion of the Group
and the Company’s financial instruments, quoted market prices do not exist. For such financial instruments, fair values presented
are estimates derived using the net present value or other valuation techniques. The above techniques involve uncertainties and
are significantly affected by the assumptions used and judgements made regarding risk characteristics of various financial
instruments, discount rates, estimates of future cash flows, future expected loss experience and other factors. Changes in
assumptions could significantly affect these estimates and the resulting fair values.
(a)
On-balance-sheet
The carrying amounts of the financial assets and liabilities of the Group and the Company at the balance sheet date
approximated their fair values except as set out below:
THE GROUP
238
2003
Carrying
Net
amount fair value
RM
RM
Financial assets
Investments
Staff loans
Financial liabilities
Convertible bonds
Total borrowings
(excluding redeemable
bonds)
Redeemable bonds/
Payable to a subsidiary
THE COMPANY
2002
Carrying
Net
amount fair value
RM
RM
2003
Carrying
Net
amount fair value
RM
RM
2002
Carrying
Net
amount fair value
RM
RM
384.7
262.0
458.4
233.8
139.6
331.8
184.9
289.8
338.1
261.5
411.8
233.3
98.3
331.7
143.6
289.7
—
—
1,361.6
1,378.0
—
—
1,361.6
1,378.0
6,717.2
7,597.0
5,618.6
6,307.8
5,746.0
6,264.0
5,228.4
5,627.0
3,000.0
3,000.0
—
—
2,983.5
2,959.9
—
—
The above carrying amount and net fair value of total borrowings exclude swaps, which are disclosed in sub-note (b).
Financial assets
The fair value of long term investments are estimated by reference to market indicative yields or the Group and the Company’s
share of net tangible assets. Where allowances of permanent diminution in value or impairment, where applicable, is made in
respect of any investment, the carrying amount net of allowance made is deemed to be a close approximation of its fair value.
The fair value of staff loans have been estimated by discounting the estimated future cash flows using the prevailing market
rates for similar credit risks and remaining period to maturity. The fair value of staff loans is significantly lower than carrying
amount at the balance sheet date as the Company and its subsidiaries charged interest rates on staff loans at below current
market rates. The Directors consider the carrying amount fully recoverable as they do not intend to realise the financial
asset via exchange with another counterparty but to hold it to contract maturity. Collaterals are taken for these loans and
the Directors are of the opinion that the potential losses in the event of default will be covered by the collateral values on
individual loan basis.
41. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (continued)
Financial asset (continued)
For convertible education loans, amount owing by subsidiaries and associates and customers’ deposits, it is not practicable
to determine the fair values of these balances as they are mainly interest free and do not have fixed repayment terms.
However, the carrying amounts recorded are not anticipated to be significantly in excess of their fair values at the balance
sheet date.
Financial liabilities
The fair value of convertible bonds and quoted bonds has been estimated using the respective quoted offer price.
For unquoted borrowings with fixed interest rate, the fair values have been estimated by discounting the estimated future
cash flows using the prevailing market rates for similar credit risks and remaining period to maturity. For unquoted
borrowings with floating interest rate, the carrying values are generally reasonable estimates of their fair values.
The financial liabilities will be realised at their carrying values and not at their fair value as the Directors have no intention
to settle these liabilities other than in accordance with their contractual obligations.
(b)
Off-balance-sheet
The financial derivative instruments are used to hedge foreign exchange and interest rate risks associated with certain long
term foreign currency borrowings. The contract notional principal amounts of the derivative and the corresponding fair value
adjustments are analysed as below:
2003
Contract or
notional
principal
amount
RM
Off-Balance-Sheet Financial
Derivative Instruments
Long dated swap
Cross-currency interest
rate swaps
Interest rate swap
2002
Net Fair Value
Favourable Unfavourable
RM
RM
750.0
66.4
760.0
570.0
—
1.4
—
(95.8)
—
Contract or
notional
principal
amount
RM
Net Fair Value
Favourable Unfavourable
RM
RM
750.0
47.5
—
760.0
—
1.8
—
(9.8)
—
Fair values of financial derivative instruments are the present values of their future cash flows and are arrived at based on
valuations carried out by the Company’s bankers. Favourable fair value indicates amount receivable by the Company if the
contracts are terminated as at 31 December 2003 or vice versa.
239
For all other short term on-balance-sheet financial instruments maturing within one year or are repayable on demand, the
carrying values are assumed to approximate their fair values.
FOR THE YEAR ENDED
31
DECEMBER
2003
42. PRIOR YEAR ADJUSTMENTS
(a)
Deferred tax
During the year, the Group changed its accounting policy with respect to the recognition of provision for deferred tax in
compliance with MASB 25 “Income Taxes”.
In previous years, provision was made for deferred tax, using the liability method, on all material temporary differences
except where it was considered reasonably probable that the tax effect of such deferrals will continue in the foreseeable
future. The Group has now changed this accounting policy to that of full provision in respect of all temporary differences
in accordance with MASB 25. All temporary differences are now taken as provision in the financial statements in the period
as and when they arise.
Deferred tax assets if any, are recognised to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences or unutilised tax losses can be utilised.
240
(b)
Intangible assets
During the year, the Group changed its accounting policy with respect to goodwill.
Goodwill on acquisition occurring on or after 1 January 2002 in respect of a subsidiary is included in the Consolidated
Balance Sheet as intangible asset or, if arising in respect of an associate, is included in the cost of investment in associates.
Capitalised goodwill is tested for impairment at least annually, or if events or circumstances occur indicating that an
impairment may exist. Impairment of goodwill is charged to Consolidated Income Statement as and when it arises. Goodwill
on acquisition occurred prior to 1 January 2002 was written off against reserves in the year of acquisition. Such goodwill
has not been retrospectively capitalised and subjected to impairment test as it was impractical to reinstate. The change in
accounting policy has been accounted for retrospectively. Accordingly, the Consolidated Balance Sheet for the preceding
financial year ended 31 December 2002 has been restated.
The above changes in accounting policies have been accounted for retrospectively. The effects of the changes in accounting
policies are as follows:
As
previously
reported
RM
THE GROUP
Income Statement
Operating costs
Taxation – the company and subsidiaries
(8,115.1)
(454.4)
1,056.3
Balance Sheet
Reserves, Retained profits – at 1 January 2002
– at 31 December 2002
10,381.8
9,848.9
Effect of
change in policy
(a)
(b)
RM
RM
—
(172.3)
(172.3)
(1,361.3)
(1,533.6)
(39.7)
—
(39.7)
As
restated
RM
(8,154.8)
(626.7)
844.3
—
1,207.9
9,020.5
9,523.2
Deferred tax
– at 1 January 2002
26.9
56.7
1,361.3
1,533.6
—
—
1,388.2
1,590.3
Associates
1,538.6
—
1,207.9
2,746.5
42. PRIOR YEAR ADJUSTMENTS (continued)
As
previously
reported
RM
THE COMPANY
Income Statement
Taxation
Loss for the year
(399.7)
(326.2)
Balance Sheet
Reserves, Retained profits – at 1 January 2002
Deferred tax
Effect of
change in policy
(a)
(b)
RM
RM
11,795.3
11,127.5
– at 1 January 2002
—
—
As
restated
RM
(172.3)
(172.3)
—
—
(572.0)
(498.5)
(1,361.3)
(1,533.6)
—
—
10,434.0
9,593.9
1,361.3
1,533.6
—
—
1,361.3
1,533.6
241
43. LIST OF SUBSIDIARIES AS AT 31 DECEMBER 2003
The subsidiaries are as follows:
Name of Company
% of
Shareholdings
Paid-up
Capital
Principal Activities
2003
2002
2003
Million
Citifon Sdn. Bhd.
100
100
RM65.0
RM65.0 Provision of national payphone network
and related services
Fiberail Sdn. Bhd.
60
60
RM14.2
RM14.2 Installation and maintenance of optic fibre
telecommunication system along the
railway corridor in Peninsular Malaysia
GITN Sdn. Berhad
100
100
RM20.0
RM20.0 Provision of managed network services
and enhanced value added
telecommunication and information
technology services
Intelsec Sdn. Bhd.*
100
100
RM3.0
RM3.0 Installation and maintenance of
computerised security systems and
security related imaging technology
Mediatel (Malaysia) Sdn. Bhd.
100
100
RM4.0
RM4.0
70
70
RM11.0
RM11.0 Provision of interactive multimedia
communication services and solution
Menara Kuala Lumpur Sdn. Bhd.
100
100
RM91.0
RM91.0 Management and operation of the
telecommunication and tourism tower of
Menara Kuala Lumpur
Mobikom Sdn. Bhd.
100
100
RM260.0
RM260.0 Provision/transmission of voice and data
through the cellular system
Meganet Communications Sdn. Bhd.
2002
Million
Investment holding
FOR THE YEAR ENDED
31
DECEMBER
2003
43. LIST OF SUBSIDIARIES AS AT 31 DECEMBER 2003 (continued)
Name of Company
Paid-up
Capital
2003
2002
2003
Million
2002
Million
Parkside Properties Sdn. Bhd.*
100
100
RM0.1
RM0.1
Rebung Utama Sdn. Bhd.
100
—
RM#
RM-
Societe Des Telecommunications
De Guinee**
Tekad Mercu Berhad
Telekom Applied Business Sdn. Bhd.
Telekom Consultancy Sdn. Bhd.*
242
% of
Shareholdings
60
Dormant
Special purpose entity
60 GFR75,000.0 GFR75,000.0
Provision of telecommunication and
related services in the Republic of Guinea
100
—
RM#
Special purpose entity
70
70
RM1.6
RM-
RM1.6 Provision of software development and
sale of software products
51
51
RM#
Telekom Enterprise Sdn. Bhd.
100
100
RM0.6
RM0.6 Investment holding and provision of
services relating to telecommunication,
computer, data and information within
and outside Malaysia
Telekom Infotech Sdn. Bhd.*
100
100
RM0.5
RM0.5
Dormant
Telekom Malaysia-Africa Sdn. Bhd.
100
100
RM0.1
RM0.1
Investment holding
Telekom Management Services
Sdn. Bhd.
100
100
RM#
RM#
Telekom Multi-Media Sdn. Bhd.
100
100
RM1.6
60
60
MKW350.0
MKW350.0 Provision of telecommunication and
related services in Malawi
Telekom Payphone Sdn. Bhd.
100
100
RM9.0
public telephone services
Telekom Publications Sdn. Bhd.
100
100
RM6.0
RM6.0 Provision of printing and publications
services
Telekom Research & Development
Sdn. Bhd.
100
100
RM20.0
RM20.0
Telekom Sales and Services Sdn. Bhd.
100
100
RM14.5
RM14.5 Trading in customer premises equipment
and maintaining telecommunication
equipment
70
70
RM13.0
RM13.0 Development, operation and marketing
e-commerce services
Telesafe Sdn. Bhd.*
100
100
RM4.0
Telekom Malaysia (S) Pte. Ltd.**
100
100
SGD#
Telekom Networks Malawi Limited**
Telekom Technology Sdn. Bhd.
RM#
Dormant
Provision of consultancy and
engineering services in
telecommunication
interactive multimedia communication
services and solutions
RM4.0
Provision of research and development
activities in the areas of
telecommunication and multimedia,
hi-tech applications and products and
services in related business
Dormant
SGD# Provision of international
telecommunication facilities
% of
Shareholdings
Paid-up
Capital
2003
2002
2003
Million
Telekom Malaysia (UK) Limited**
100
100
STR#
STR# Provision of international
Telekom Malaysia (Hong Kong)
Limited** (formerly known as
TM (Hong Kong) Limited)
100
100
HKD#
HKD#
TM (USA) Inc.**
100
100
USD#
USD# Provision of international
—
100
RM-
RM1,565.00 Provision of mobile telecommunication
TM Cellular (Holdings) Sdn. Bhd.
100
—
RM0.1
RM- Market and provide voice, data, video,
wireless multimedia & interactive
content and application
TM Global Incorporated##
100
100
USD#
TM Facilities Sdn. Bhd.
100
100
RM2.3
70
70
TK340.0
TK340.0
TM International (Cayman) Ltd.*
100
100
USD#
USD#
Investment holding
TM International Leasing
Incorporated##
100
100
USD#
USD#
Investment holding
TM International Sdn. Bhd.
100
100
RM16.2
TM Net Sdn. Bhd.
100
100
RM180.0
Universiti Telekom Sdn. Bhd.
100
100
RM1.0
69.52
69.52
RM40.0
100
31.25
RM2,619.1
55
55
RM8.0
100
100
RM#
51
51
RM15.0
TM Cellular Sdn. Bhd.
TM International (Bangladesh)
Limited##
VADS Berhad
Subsidiaries held through
Telekom Enterprise Sdn. Bhd.
Celcom (Malaysia) Berhad
Mobitel Sdn. Bhd.*
TM Orion Sdn. Bhd.*
Telekom Smart School Sdn. Bhd.
2002
Million
USD#
Provision of international
Investment holding
RM2.3 Provision of facilities management
services
Provision of mobile telecommunication
services in Bangladesh
telecommunication and consultancy
services on an international scale
RM180.0
Provision of internet related services
RM1.0 Managing and administering a private
university known as Multimedia University
RM40.0 Provision of international and national
managed network services for
businesses and organisations
RM1,983.6 Provision of mobile, fixed and
multimedia services
RM8.0 Dormant
RM# Dormant
RM15.0 Implementation of government smart
school project, provision of multimedia
education systems and software, portal
services and other related services
243
Name of Company
FOR THE YEAR ENDED
31
DECEMBER
2003
244
Name of Company
% of
Shareholdings
Paid-up
Capital
2003
2002
2003
Million
2002
Million
Subsidiary held through
Telekom Publications Sdn. Bhd.
Cybermall Sdn. Bhd.
100
100
RM2.7
RM2.7 Provision of telecommunication,
multimedia and information technology
services
MTN Networks (Pvt.) Limited##
100
100
SLR370.0
SLR370.0 Provision of mobile telecommunication
services in Sri Lanka
TM International (L) Limited##
100
100
USD#
USD#
Investment holding
TM International Lanka (Pvt.)
Limited##
100
100
SLR200.0
SLR200.0
Investment holding
TMI Mauritius Limited##
100
100
USD#
USD#
Investment holding
G-Com Limited**
85
85
CED22.9
CED22.9
Investment holding
Cambodia Samart Communication
Co. Ltd.**
51
51
USD8.5
USD8.5
TM International (L) Limited ##
TESS International Ltd.*
100
100
USD#
USD#
Universiti Telekom Sdn. Bhd.
Unitele Multimedia Sdn. Bhd.
100
100
RM1.0
VADS Berhad
VADS e-Services Sdn. Bhd.
100
100
RM1.0
RM1.0 Provision of managed e-services and
managed application services
VADS Solutions Sdn. Bhd.
100
100
RM1.5
RM1.5
Celcom Academy Sdn. Bhd.
100
—
RM#
RM-
Provision of training related services
Celcom Multimedia (Malaysia)
Sdn. Bhd.*
100
—
RM#
RM-
Dormant
Celcom Technology (M) Sdn. Bhd.
100
—
RM2.0
Provision of mobile telecommunication
services in Cambodia
Investment holding
RM# Adopting research ideas from Multimedia
University for further development and
prototyping, directing consultancy project
to faculties and centres at Multimedia
University and collaborating with other
business partners in joint exercise
Provision of system integration services
RM- Provision of telecommunication value
added services through cellular or other
forms of telecommunication network
% of
Shareholdings
Paid-up
Capital
2003
2002
2003
Million
60
—
RM0.5
Celcom Transmission (M) Sdn. Bhd.
100
—
RM25.0
Celcom Trunk Radio (M) Sdn. Bhd.*
100
—
RM#
RM-
Ceased operations
CT Paging Sdn. Bhd.*
100
—
RM0.5
RM-
Inactive
Technology Resources
Industries Berhad
100
—
RM#
TM Cellular Sdn. Bhd.
100
—
RM1,565.0
Subsidiary held through Celcom
Transmission (M) Sdn. Bhd.
Alpha Canggih Sdn. Bhd.
100
—
RM#
RM-
Property investment
Celcom Trunk Radio (M) Sdn. Bhd.
CT Communication Sdn. Bhd.*+
100
—
RM#
RM-
Dormant
100
—
RM#
RM-
Dormant
CT Paging Sdn. Bhd.
Masterpage Sdn. Bhd.*^
100
—
RM#
RM-
Dormant
Technology Resources
Industries Berhad
Alpine Resources Sdn. Bhd.*
100
—
RM2.5
RM-
Inactive
Celcom Timur (Sabah) Sdn. Bhd.
Firent Management Services
Sdn. Bhd.*+
2002
Million
RM- Provision of fibre optic transmission
network
RM- Provision of transmission network
related services
RM- Investment holding and provision of
management services
RM- Provision of mobile telecommunication
Freemantle Holdings (M) Sdn. Bhd.
100
—
RM13.5
RM-
Investment holding
Malaysian Motorhomes Sdn. Bhd.*
62.4
—
RM0.7
RM-
Ceased operations
Rego Multi-Trades Sdn. Bhd.
100
—
RM2.0
RM-
Dealing in marketable securities
Technology Resources Management
Services Sdn. Bhd.*
100
—
RM#
RM-
Inactive
Technology Resources Manufacturing
Sdn. Bhd.*
100
—
RM15.9
RM-
Inactive
Technology Resources (Nominees)
Sdn. Bhd.*
100
—
RM#
RM-
Dormant
TR Components Sdn. Bhd.
100
—
RM#
RM-
Investment holding
TR International Limited**
100
—
HKD#
HKD-
Investment holding
245
Name of Company
FOR THE YEAR ENDED
31
DECEMBER
2003
246
All subsidiaries are incorporated in Malaysia except the following:
Name of Company
Place of Incorporation
Cambodia Samart Communication Co. Ltd.**
G-Com Limited**
MTN Networks (Pvt.) Limited##
Societe Des Telecommunications De Guinee**
Telekom Networks Malawi Limited**
TESS International Ltd.*
TM Global Incorporated##
TM International (Bangladesh) Limited##
TM International (Cayman) Ltd.*
TM International (L) Limited##
TM International Lanka (Pvt.) Limited##
TM International Leasing Incorporated##
TMI Mauritius Limited##
Telekom Malaysia (S) Pte. Ltd.**
Telekom Malaysia (UK) Limited**
Telekom Malaysia (Hong Kong) Limited**
TM (USA) Inc.**
TR International Limited**
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
*
#
##
**
^
+
CED
GFR
HKD
MKW
SGD
SLR
STR
TK
USD
Cambodia
Ghana
Sri Lanka
Republic of Guinea
Malawi
Mauritius
Federal Territory, Labuan
Bangladesh
British West Indies, USA
Sri Lanka
Mauritius
Singapore
United Kingdom
Hong Kong
USA
Hong Kong
Inactive as at 31 December 2003
Amounts less than 0.1 million in their respective currency
Audited by a member firm of PricewaterhouseCoopers
Not audited by member firms of PricewaterhouseCoopers
In the process of being deregistered under Section 308 of the Companies Act, 1965
Undergoing members' voluntary winding up under Section 254 of the Companies Act, 1965
Ghanaian Cedi
Guinea Franc
Hong Kong Dollar
Malawi Kwacha
Singapore Dollar
Sri Lanka Rupee
Pound Sterling
Bangladesh Taka
US Dollar
44. LIST OF ASSOCIATES AS AT 31 DECEMBER 2003
The associates are as follows:
% of
Shareholdings
2003
2002
Celcom (Malaysia) Berhad*
—
31.25
5by5 Networks Inc.#
—
16.5
Research and development of telecommunication products
16.22
16.22
Creating, implementing and operating e-business activities
including electronic commerce delivery services, multimedia
related activities and other computerised or electronic services
Sistem Iridium Malaysia Sdn. Bhd.**
40
40
Associates held through
Mahirnet Sdn. Bhd.
49
49 Development, management and marketing of educational
products offered by local and overseas educational
institutions electronically
Mutiara.Com Sdn. Bhd.
30
30 Provision of promotion of internet-based communication
services
Cambodia National Communication Inc.
—
42
mySPEED.com Sdn. Bhd.
Samart Corporation Public Company Limited
19.59
Provision of mobile, fixed and multimedia services
Dormant
Provision of trunk land mobile radio services
19.73 Design, implementation and installation of telecommunication
systems and the sale and distribution of telecommunication
equipment
Associate held through
Telekom Malaysia-Africa Sdn. Bhd.
Thintana Communications Llc.
40
40
Investment holding
Telkom SA Limited
30
30
Provision of telecommunication and related services
Celcom Timur (Sarawak) Sdn. Bhd. ##
60
—
Telecommunication services
49
—
Planning, designing, installing, operating and maintaining a
GSM cellular telecommunication network to customers in
the province of Esfahan, Iran
86.4
—
Provision of telecommunication services
TRI Telecommunication Tanzania
Limited ##/***
60
—
Provision of telecommunication services
Celcom Transmission (M) Sdn. Bhd.
Fibrecomm Network (M) Sdn. Bhd.
41
—
Provision of fibre optic transmission network services
Technology Resources Industries Berhad
Mobile Telecommunications Company
of Esfahan (J.V. – P.J.S.)
Sheba Telecom (Pvt.) Ltd. ## (sub-note a)
247
Name of Company
FOR THE YEAR ENDED
31
DECEMBER
2003
44. LIST OF ASSOCIATES AS AT 31 DECEMBER 2003 (continued)
All associates are incorporated in Malaysia except the following:
Name of Company
Place of Incorporation
Cambodia National Communication Inc.
5by5 Networks Inc.
Samart Corporation Public Company Limited
Telkom SA Limited
Sheba Telecom (Pvt.) Ltd.
TRI Telecommunication Tanzania Limited
Mobile Telecommunications Company of Esfahan (J.V. – P.J.S.)
–
–
–
–
–
–
–
–
Cambodia
USA
Thailand
USA
South Africa
Bangladesh
Tanzania
Iran
248
All associates have co-terminous financial year end with the Company except for mySPEED.COM Sdn. Bhd. and Telkom SA
Limited with financial year ends on 31 January and 31 March respectively.
*
**
***
#
##
29.16% held through Telekom Enterprise Sdn. Bhd.
Inactive as at 31 December 2003
Liquidator appointed
Treated as long term investment in 2003 due to loss of significant influence
Treated as associates due to loss of control while maintaining significant influence
(a)
On 18 March 1999, the board of directors of Sheba Telecom (Pvt.) Ltd. (Sheba) approved the increase of the company’s
paid-up share capital from Taka40,204,000 to Taka327,996,000 via capitalisation of advances made by Technology
Resources Industries Berhad (TRI). Based on this increase in share capital, TRI’s equity interest in Sheba stands at 86.4%.
However, capitalisation of the intercompany advances was disputed by the minority shareholders of Sheba and Sheba has
yet to lodge a notification of the increase in shareholding with the Registrar of Joint Stock Companies. The outcome of the
dispute with Sheba’s minority shareholders is pending the result of the arbitration proceedings described in note 35(j) to
the financial statements.
45. COMPARATIVE
As mentioned in the respective notes to the financial statements, certain comparatives have been reclassified and/or expanded to
ensure comparability with the current year presentation.
46. CURRENCY
All amounts are expressed in Ringgit Malaysia (RM) unless otherwise stated.
STATEMENT BY DIRECTORS
PURSUANT TO
SECTION 169(15)
OF THE
COMPANIES ACT, 1965
We, Tan Sri Dato’ Ir. Muhammad Radzi bin Haji Mansor and Dato’ Dr. Md Khir bin Abdul Rahman being two of the Directors of Telekom
Malaysia Berhad, state that, in the opinion of the Directors, the financial statements on pages 169 to 248 are drawn up so as to exhibit
a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2003 and of the results and the cash
flows of the Group and of the Company for the year ended on that date in accordance with the applicable approved accounting
standards in Malaysia and the provisions of the Companies Act, 1965.
In accordance with a resolution of the Board of Directors dated 26 February 2004.
249
Chairman
Chief Executive
STATUTORY DECLARATION
I, Jaffa Sany Md Ariffin, being the Officer primarily responsible for the financial management of Telekom Malaysia Berhad, do solemnly
and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 169 to 248 are correct,
and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory
Declarations Act, 1960.
Subscribed and solemnly
declared at Kuala Lumpur
this 26 February 2004
Before me:
T. THANAPALASINGAM
Commissioner for Oaths
Kuala Lumpur
)
)
)
JAFFA SANY MD ARIFFIN
REPORT OF THE AUDITORS
TO THE
MEMBERS
OF
TELEKOM MALAYSIA BERHAD (COMPANY NO: 128740-P)
We have audited the financial statements set out on pages 169 to 248. These financial statements are the responsibility of the
Company’s Directors. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with approved Auditing Standards in Malaysia. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the Directors, as well as evaluating the overall financial
statements presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion:
(a)
the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable
approved accounting standards in Malaysia so as to give a true and fair view of:
(i)
the matters required by section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and
(ii)
the state of affairs of the Group and Company as at 31 December 2003 and of the results and the cash flows of the Group
and Company for the year ended on that date;
250
and
(b)
the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiary
companies of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
The names of the subsidiary companies of which we have not acted as auditors are indicated in note 43 to the financial statements.
We have considered the financial statements of these subsidiary companies and the auditors’ reports thereon.
We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company's financial
statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements
and we have received satisfactory information and explanations required by us for those purposes.
The auditors' reports on the financial statements of the subsidiary companies were not subject to any material qualification and did
not include any comment made under subsection (3) of section 174 of the Act.
PRICEWATERHOUSECOOPERS
(AF: 1146)
Chartered Accountants
Kuala Lumpur
Date: 26 February 2004
ABDUL RAHIM HAMID
[904/03/04(J/PH)]
Partner
GENERAL INFORMATION
AS AT
31 DECEMBER 2003
1.
Telekom Malaysia Berhad is a public limited liability Company, incorporated and domiciled in Malaysia, and listed on the main
board of the Malaysia Securities Exchange Berhad.
2.
The address of the registered office of the Company is:
Menara Telekom
50672 Kuala Lumpur
3.
The principal office and place of business of the Company is:
Company Secretarial Division
Menara Telekom
50672 Kuala Lumpur
The average number of employees at the end of the financial year amounted to:
2003
2002
Group
33,726
31,940
Company
22,513
24,354
251
4.
SHAREHOLDING STATISTICS
AS AT
19 MARCH 2004
ANALYSIS OF SHAREHOLDINGS
Share Capital
Authorised Share Capital
: RM5,000,000,021
Issued and Fully Paid-up Capital : RM3,325,248,401
Class of Shares
: 3,325,248,380 ordinary shares of RM1 each and 1 (one) Special Rights Redeemable Preference
Share of RM1 each and fully paid, 1,000 Class A Redeemable Preference Shares of RM0.01
each fully paid and 1,000 Class B Redeemable Preference Shares of RM0.01 each fully paid.
Voting Rights
: One vote per ordinary share.
The Special Share has no voting right other than those referred to in note 10(a) to the financial
statements.
DISTRIBUTION OF SHAREHOLDINGS
252
Size of Shareholdings
Shareholders
Malaysian
Foreign
No
%
No
%
Shares
Malaysian
No
%
Foreign
No
%
Less than 100
100 – 1,000
1,001 – 10,000
10,001 – 100,000
100,001 – 166,262,518
(less than 5% of paid-up
capital)
166,262,519 and above
317
7,268
14,903
1,066
1.20
27.40
56.19
4.02
18
973
906
362
0.07
3.67
3.42
1.36
2,160
6,843,615
53,458,628
28,182,406
—
0.21
1.61
0.85
784
636,970
3,182,832
15,683,610
—
0.02
0.09
0.47
248
4
0.94
0.01
456
—
1.72
—
785,875,981
1,950,165,554
23.63
58.65
481,217,841
—
14.47
—
TOTAL
23,806
89.76
2,715
10.24
2,824,528,344
84.95
500,722,037
15.05
2003 MONTHLY TRADING VOLUME & HIGHEST-LOWEST SHARE PRICE
Share Volume (’000)
60,000
Share Price (RM)
10.00
50,000
8.00
40,000
6.00
30,000
4.00
20,000
2.00
10,000
0
0
0.00
Jan
Feb
Mar
Apr
Volume
May
Jun
Jul
Highest
Aug
Sep
Lowest
Oct
Nov
Dec
LIST OF TOP 30 SHAREHOLDERS
19 MARCH 2004
No. Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
Khazanah Nasional Berhad
Employees Provident Fund Board
Bank Negara Malaysia
Cimsec Nominees (Tempatan) Sdn. Bhd.
Security Trustee (KCW Issue 2)
Citicorp Nominees (Asing) Sdn. Bhd.
CBSGP GW Spore for Hibiscus Investments Pte Ltd
Permodalan Nasional Berhad
Minister of Finance
Kumpulan Wang Amanah Pencen
Amanah Raya Nominees (Tempatan) Sdn. Bhd.
Skim Amanah Saham Bumiputera
Amanah Saham Malaysia
Valuecap Sdn. Bhd.
Lembaga Tabung Haji
Malaysia Nominees (Tempatan) Sendirian Berhad
Great Eastern Life Assurance (Malaysia) Berhad (PAR 1)
Bank Simpanan Nasional
Amanah Saham Wawasan 2020
Skim Amanah Saham Nasional
HSBC Nominees (Asing) Sdn. Bhd.
Abu Dhabi Investment Authority
Pertubuhan Keselamatan Sosial
Malaysia National Insurance Berhad
Citicorp Nominees (Asing) Sdn. Bhd.
American International Assurance Company Limited (P Core)
Public Growth Fund
Cartaban Nominees (Asing) Sdn. Bhd.
Government of Singapore Investment Corporation Pte Ltd for Government of Singapore (C)
HSBC Nominees (Asing) Sdn. Bhd.
BBH And Co Boston for GMO Emerging Markets Fund
Investors Bank and Trust Company for Ishares, Inc.
Shares
Held
Percentage
(%)
1,079,524,854
424,960,700
251,680,000
194,000,000
32.46
12.78
7.57
5.83
164,000,000
4.93
162,759,000
111,901,219
57,551,000
28,688,600
4.89
3.37
1.73
0.86
28,217,000
0.85
27,000,000
25,019,036
21,171,220
0.81
0.75
0.64
19,822,000
13,701,500
0.60
0.41
13,353,400
0.40
11,539,200
0.35
9,511,500
8,959,300
7,466,000
6,413,611
0.29
0.27
0.22
0.19
6,213,300
0.19
6,111,400
0.18
6,105,000
6,092,000
0.18
0.18
6,084,000
0.18
253
AS AT
LIST OF TOP 30 SHAREHOLDERS
AS AT
19 MARCH 2004
Shares
Held
No. Name
27.
28.
29.
30.
State Street London Fund 3ERF for Deutsche Global Emerging Markets Fund (Select)
State Street Australia Fund Q3VD for Fullerton (Private) Limited
Citicorp Nominees (Tempatan) Sdn. Bhd.
Ing Insurance Berhad (Inv-IL Par)
Public Index Fund
TOTAL
Percentage
(%)
5,503,000
0.17
5,300,000
0.16
5,250,000
0.16
5,216,100
0.16
2,719,113,940
81.76
SUBSTANTIAL SHAREHOLDERS’ HOLDINGS (5% AND ABOVE)
Shares
Held
254
No. Name
1.
2.
3.
4.
5.
Percentage
(%)
Khazanah Nasional Berhad
Employees Provident Fund Board
Bank Negara Malaysia
Cimsec Nominees (Tempatan) Sdn. Bhd.
Temasek Holdings (Private) Limited
1,079,524,854
424,960,700
251,680,000
194,000,000
169,310,200*
32.46
12.78
7.57
5.83
5.09
TOTAL
2,119,475,754
63.73
* Deemed interest by virtue of shares held by corporations related to Temasek Holdings (Private) Limited (Section 6A of the Companies
Act, 1965)
DIRECTORS’ DIRECT AND INDIRECT INTEREST IN THE COMPANY
AND ITS RELATED CORPORATION AS AT 19 MARCH 2004
In accordance with the Register of Directors’ Shareholdings, the directors’ interest in shares in the Company and its related corporation
are as follows:-
Name of Directors
Tan Poh Keat
Direct
Indirect
%
Direct
*1
*1
*1
—
—
*1
11,000
10,000
10,000
10,000
10,000
10,000
123,500
110,000
15,000
—
—
15,000
—
—
1,500*2
—
—
—
VADS Berhad
Indirect
—
—
—
—
—
—
%
*1
*1
*1
*1
*1
*1
*1 Less than 0.1%
*2 Deemed interest by virtue of shares held by his spouse, Madam Hon Phaik Hong, pursuant to Section 6A of the Companies Act, 1965
SHAREHOLDERS AND INVESTOR INFORMATION
REGISTRAR
Tenaga Koperat Sdn. Bhd. (118401-V)
20th Floor, Plaza Permata (formerly known as IGB Plaza)
Jalan Kampar, Off Jalan Tun Razak
50400 Kuala Lumpur
Tel : 03-4041 6522
Fax : 03-4042 6352
LISTING
The Company’s shares are listed on the Malaysia Securities Exchange Berhad in Malaysia.
MALAYSIAN TAXES ON DIVIDEND
Malaysia practised an imputation system in the distribution of the dividends whereby the income tax paid by a company is imputed to
Malaysian income tax is deducted or deemed to have been deducted at corporate tax rate, which is currently at 28% from dividends
paid by a company residing in Malaysia.
The income tax deducted or deemed to have been deducted from dividend is accounted for by the income tax of the company. There
is no further tax or withholding tax on the payment of dividends to all shareholders.
The Annual Report is available to the public who are not shareholders of the Company, by writing to:General Manager
Corporate Communications Unit
Corporate Affairs Division
Level 8, South Wing, Menara Telekom
50672 Kuala Lumpur
Fax : 03-7955 2510
255
dividends distributed to shareholders.
NET BOOK VALUE OF LAND & BUILDINGS
AS AT
31 DECEMBER 2003
Net Book
Freehold
No. of
Location
256
1.
Leasehold
Area No. of
Other Land*
Area No. of
Value of
of Land
Buildings
Area
RM
RM
Excepted Land**
Area No. of
Net Book
Value
Lots
(’000 sq ft)
Lots
(’000 sq ft)
Lots
(’000 sq ft)
Lots
(’000 sq ft)
(million)
(million)
a. Kuala Lumpur
16
1,192
8
502
12
1,141
—
—
145.7
1,492.0
b. Labuan
—
—
—
—
5
710
—
—
—
8.5
9
9,413
18
25,479
9
1,856
97
16,698
150.5
704.0
Federal Territory
2.
Selangor
3.
Perlis
—
—
4
52
—
—
14
750
0.4
4.3
4.
Perak
5
61
17
679
5
297
119
7,780
58.7
83.9
5.
Pulau Pinang
8
18
19
1,465
—
—
60
15,431
9.2
77.4
6.
Kedah
9
511
14
1,404
—
—
55
2,818
12.1
82.8
7.
Johor
11
148
28
1,302
16
516
138
14,097
4.8
131.2
8.
Melaka
2
3
26
63,141
2
10,318
38
4,457
54.7
128.6
Negeri Sembilan
20
47,593
9
321
6
317
71
9,371
53.8
39.0
10.
9.
Terengganu
—
—
20
1,585
4
129
41
6,285
2.0
47.3
11.
Kelantan
—
—
11
463
4
173
41
2,234
2.4
28.0
12.
Pahang
4
80
44
1,856
17
691
98
8,409
6.5
103.4
13.
Sabah
—
—
18
351
6
655
76
26,290
12.2
100.8
14.
Sarawak
7
522
30
919
10
468
109
10,284
29.6
116.0
15.
Sri Lanka
4
89
—
—
—
—
—
—
9.5
12.1
16.
Malawi
—
—
18
92
—
—
—
—
0.2
0.5
17.
Republic of Guinea
68
7,502
—
—
13
272
—
—
8.3
13.1
18.
Bangladesh
7
90
—
—
—
—
—
—
0.9
1.3
19.
South Africa
3
34
—
—
—
—
—
—
2.2
2.0
20.
Cambodia
—
—
—
—
—
—
—
—
—
1.4
173
67,256
284
99,611
109
17,543
957
124,904
563.7
3,177.6
Total
No revaluation has been made on any of the land and buildings
*
The title deeds pertaining to other land have not yet been registered in the name of the Company. Pending finalisation with the
relevant authorities, the land have not been classified according to their tenure and land areas are based on estimation.
** Excepted land are lands situated outside the Federal Territory which are either alienated land, reserved land owned by the Federal
Government or land occupied, used, controlled and managed by the Federal Government for federal purposes (in Melaka, Pulau
Pinang, Sabah and Sarawak) as set out in Section 3(2) of the Telecommunication Services (Successor Company) Act, 1985. The
Government has agreed to lease these land to Telekom Malaysia Berhad for a term of 60 years with an option to renew, under article
85 and 86 of the Federal Constitution.
USAGE OF PROPERTIES
31 DECEMBER 2003
Location
1.
Transmission
Office
Stations
Buildings
Residential
28
6
22
28
3
2
1
4
Exchanges
Satellite/
Kedai TM/
Telecom-
Submarine
Primatel/
munication/
Stores/
Cable
Warehouses
Stations
Resort
Business
Centre
University
Tourism
19
1
—
—
—
1
12
2
—
—
—
—
—
Tower
Federal Territory
a. Kuala Lumpur
b. Labuan
2.
Selangor
85
11
18
—
41
—
—
6
1
3.
Perlis
10
—
—
2
1
—
—
1
—
—
4.
Perak
70
22
32
81
42
—
—
2
—
—
5.
Pulau Pinang
29
—
18
33
23
2
1
4
—
—
6.
Kedah
48
11
4
26
11
—
1
2
—
1
7.
Johor
90
17
7
51
22
1
—
4
—
—
8.
Melaka
18
2
5
23
6
2
—
1
1
—
9.
Negeri Sembilan
31
15
4
16
—
1
2
1
—
—
10.
Terengganu
33
17
5
15
6
2
—
—
—
—
11.
Kelantan
23
6
7
18
13
—
—
1
—
—
12.
Pahang
45
34
14
49
17
3
4
2
—
—
13.
Sabah
45
33
21
22
22
2
1
3
—
—
14.
Sarawak
72
43
24
47
25
1
—
1
—
—
15.
Sri Lanka
—
2
5
—
2
—
—
—
—
—
16.
Malawi
—
21
—
—
—
—
—
—
—
—
17.
Republic of Guinea
26
133
27
5
4
1
—
—
—
—
18.
Bangladesh
—
7
—
—
—
—
—
—
—
—
19.
South Africa
—
—
—
12
—
—
—
—
—
—
20.
Cambodia
1
—
—
—
—
—
—
—
—
—
257
AS AT
GROUP DIRECTORY
HEAD OFFICE:
Level 51, North Wing, Menara Telekom, Off Jalan Pantai Baharu, 50672 Kuala Lumpur
Tel.
: 03-2240 9494
Fax
: 03-2283 2415
Website : www.telekom.com.my
258
WILAYAH PERSEKUTUAN
KUALA LUMPUR
General Manager, State Business Operations
25th Floor, Menara Weld
76, Jalan Raja Chulan
50200 Kuala Lumpur
Tel. : 03-2020 6186
Fax : 03-2070 2355
Customer Service Centre
Consumer And Business
1A Floor, Bangunan Bukit Mahkamah
Jalan Raja Chulan, 50200 Kuala Lumpur
Tel. : 03-2026 1050
Fax : 03-2031 4460
Primatel Business Centre
25th Floor, Menara Weld
76, Jalan Raja Chulan
50200 Kuala Lumpur
Tel. : 03-2020 5335
Fax : 03-2070 2020
Kedai Telekom
BUKIT MAHKAMAH
1B Floor, Bangunan Telekom
Tel. : 03-2072 9191
Fax : 03-2031 6730
MUZIUM
Ground Floor, Bangunan Muzium Telekom
Tel. : 03-2072 3177
Fax : 03-2070 9393
KOMPLEKS DAMAI
1st Floor, Wisma Kotamas
94, Jalan Dato Hj. Eusoff
50400 Kuala Lumpur
Tel. : 03-4041 0289
Fax : 03-4041 1988
MALURI
Lot 1 & 2, Block 154
Maluri Business Centre
Jalan Jejaka, Taman Maluri
55100 Kuala Lumpur
Tel. : 03-9285 9292
Fax : 03-9285 9595
SETAPAK
Ground Floor, Bangunan Ibusawat
Telekom Setapak
44, Persiaran Kuantan
53200 Kuala Lumpur
Tel. : 03-4022 9191
Fax : 03-4022 9292
KEPONG
16, Jalan 54, Desa Jaya, 52100 Kepong
Tel. : 03-6276 9191
Fax : 03-6275 0445
SHOWROOM
Ground Floor, Wisma Telekom
Jalan Pantai Baharu, 59200 Kuala Lumpur
Tel. : 03-2020 7712
Fax : 03-7956 4543
CELCOM Service Centres
CELCOM (MALAYSIA) BERHAD
Central Regional Office
2nd Floor, Menara TR
161B, Jalan Ampang
50450 Kuala Lumpur
Tel. : 03-2162 3900/5092
Fax : 03-2162 5093
CHERAS
62, Jalan Manis 3, Taman Segar, Cheras
56100 Kuala Lumpur
Tel. : 03-9132 4379
Fax : 03-9132 4373
Lot 1.03, Menara PGRM
8, Jalan Pudu Ulu
56100 Cheras, Kuala Lumpur
Tel. : 03-9286 4900
Fax : 03-9287 4900
SELAYANG
No. 115, Jalan 2/3A, Pusat Bandar Utara,
KM 12, Jalan Ipoh, 68100 Kuala Lumpur
Tel. : 03-6136 9766
Fax : 03-9132 4373
MENARA CELCOM
No. 82, Menara CELCOM
Jalan Raja Muda Abdul Aziz
Kuala Lumpur
Tel. : 03-2687 3838
Fax : 03-2681 0421
MEDAN TUANKU
Ground Floor, No. 7 & 9
Jalan Medan Tuanku Satu
50300 Kuala Lumpur
Tel. : 03-2694 1313
Fax : 03-2694 3463
TAMAN TUN DR. ISMAIL
AB 40, Jalan Tun Mohd Fuad
Taman Tun Dr. Ismail
60000 Kuala Lumpur
Tel. : 03-7726 3900
Fax : 03-7726 4900
TM Net Service Centre
Internet registration and bill payment
services are available at Kedai Telekom.
SELANGOR/
PETALING JAYA
1st Floor, Wisma Telekom Shah Alam
No. 6, Persiaran Damai, Seksyen 11
40000 Shah Alam
Tel. : 03-5518 8700
Fax : 03-5512 5133
MBS PJ, 2nd Floor Menara PKNS
Jalan Sultan, 46050 Petaling Jaya
Tel. : 03-7968 2010
Fax : 03-7955 9495
Ground Floor, Wisma Telekom Shah Alam
No. 6, Persiaran Damai, Seksyen 11
40000 Shah Alam
Tel. : 03-5518 8820
Fax : 03-5518 8815
Kedai Telekom
PORT KLANG
2-1, 2nd Floor, Bangunan Hentian
Pelabuhan Klang
41672 Jalan Perbandaran, Klang
Tel. : 03-3166 9191
Fax : 03-3166 9292
AMPANG
42, Jalan Memanda 7
Ampang Point, 68000 Ampang
Tel. : 03-4251 9191
Fax : 03-4252 8282
RAWANG
Lot 21, Jalan Maxwell, 48000 Rawang
Tel. : 03-6091 9191
Fax : 03-6091 8000
KUALA KUBU BARU
1st Floor, Ibusawat Telekom
Kuala Kubu Bahru
44000 Kuala Kubu Bahru
Tel. : 03-6064 3291
Fax : 03-6064 3700
BUKIT RAJA (KLANG)
Jalan Meru, 41050 Kelang
Tel. : 03-3341 9191
Fax : 03-3342 9292
SHAH ALAM
Bgn. Telekom Shah Alam, Persiaran Damai
Seksyen 11, 40150 Shah Alam
Tel. : 03-5510 9191
Fax : 03-5510 5500
BANTING
Bangunan Ibusawat Telekom
Jalan Chempaka, 42400 Banting
Tel. : 03-3187 2422
Fax : 03-3187 9791
KUALA SELANGOR
Bangunan Telekom
Jalan Klinik, 45000 Kuala Selangor
Tel. : 03-3289 3030
Fax : 03-3289 3300
SABAK BERNAM
35, Jalan Menteri, 45200 Sabak Bernam
Tel. : 03-3216 2716
Fax : 03-3216 2058
DAMANSARA UTAMA
91-93, Jalan SS21/1A
Damansara Utama, 47400 Petaling Jaya
Tel. : 03-7727 9191
Fax : 03-7726 9292
PETALING JAYA
20, Jalan Yong Shook Lin
46050 Petaling Jaya
Tel. : 03-7956 9191
Fax : 03-7954 0326
SUBANG JAYA
85, Jalan SS15/5A, 47500 Subang Jaya
Tel. : 03-5631 9191
Fax : 03-5633 6764
KAJANG
Ground Floor, Bangunan Ibusawat
1
Telekom Kajang, Bt 14 ⁄2, Jalan Cheras
43400 Kajang
Tel. : 03-8736 9191
Fax : 03-8733 2000
PETALING JAYA
Ground Floor, Menara PKNS PJ
No. 17 Jalan Yong Shook Lin
46050 Petaling Jaya
Tel. : 03-7625 9900
Fax : 03-7625 0900
JALAN AMPANG
Podium Block, Level 1 & 2
Menara TRI, 161B, Jalan Ampang
50450 Kuala Lumpur
Tel. : 03-2162 3900
Fax : 03-2162 5093
KLANG
No. 1, Lorong Tiara 1A
Bandar Baru Klang, 41150 Klang
Tel. : 03-3343 1003
Fax : 03-3343 1001
259
PEKELILING
Pekeliling Business Centre
Ground Floor, Pharmacare Building
Lot 14(129), Jalan Pahang Barat
Off Jalan Pahang, 53000 Kuala Lumpur
Tel. : 03-4025 5900
Fax : 03-4025 3900
GROUP DIRECTORY
SHAH ALAM
No. 1, Jalan Tengku Ampuan Zabedah B
91B, Section 9, 40000 Shah Alam
Tel. : 03-5512 2900
Fax : 03-5512 1900
PORT KLANG
No. 2, Lorong Cungah
42000 Port Klang
Tel. : 03-3166 4900
Fax : 03-3166 5900
260
KAJANG
Lot No. 1, Taman Sri Saga
Jalan Sungai Chua
43000 Kajang
Selangor
Tel. : 03-8737 2900
Fax : 03-8737 3019
CLICKERS
Ground Floor, Kelana Park View Tower
No. 1, Jalan SS 6/2, 47301 Kelana Jaya
Tel. : 03-7804 8176
Fax : 03-7804 5910
E-mail: custcare@tm.net.my
services are also available at Kedai
Telekom.
KEDAH/PERLIS
Jalan Kolam Air, 05672 Alor Star
Tel. : 04-730 2552
Fax : 04-733 9090
Jalan Kolam Air, 05672 Alor Star
Tel. : 04-731 9255
Fax : 04-730 0630
CELCOM Service Centre
71-72, A&B, Primatel Business Centre
Lebuhraya Darul Aman, 05100 Alor Star
Tel. : 04-720 2143
Fax : 04-733 4770
KANGAR
No. 11 & 13, Jalan Sena Indah
Taman Sena Indah
01000 Kangar
Tel. : 04-977 7900
Fax : 04-977 5900
Kedai Telekom
KANGAR
Jalan Bukit Lagi, 01000 Kangar
Tel. : 04-976 2101
Fax : 04-976 4688
ALOR STAR
Menara Alor Star, Lebuhraya Darul Aman
05100 Alor Star
Tel. : 04-733 9191
Fax : 04-733 2733
JITRA
19A, Jalan PJ 1, Pekan Jitra
06000 Jitra
Tel. : 04-918 2043
Fax : 04-917 1210
LANGKAWI
Jalan Pandak Mayah 6, 07000 Kuah
Tel. : 04-966 7202
Fax : 04-966 7292
ALOR STAR
Lot 170 & 171, Ground & 1st Floor
Complex Alor Star
Lebuhraya Darul Aman
05100 Alor Star
Tel. : 04-730 3900
Fax : 04-733 5891
SUNGAI PETANI
No. 23-0, Jalan Kampung Baru
08000 Sungai Petani
Tel. : 04-423 1900
Fax : 04-423 3900
LANGKAWI
No. 17, Jalan Pandak Mayah 4
Bandar Baru Kuah
07000 Kuah, Langkawi
Tel. : 04-966 7446
Fax : 010-401 0096
SUNGAI PETANI
Bgn. Telekom, Jalan Petani
08000 Sungai Petani
Tel. : 04-421 9191
Fax : 04-421 9912
KULIM
No. 485, Jalan Tunku Asaad
09000 Kulim
Tel. : 04-496 1011
Fax : 04-490 1667
1st Floor, Bangunan ESK
10400 Pulau Pinang
Tel. : 04-227 8000
Fax : 04-227 3122
PULAU PINANG
1st Floor, Jalan Burmah
10050 Pulau Pinang
Tel. : 04-226 9595
Fax : 04-226 0254
BAYAN BARU
No. 68, Ground Floor
Jalan Mahsuri, 11950 Bayan Baru
Tel. : 04-642 9292
Fax : 04-642 2929
JALAN BURMAH
Jalan Burmah, 10050 Pulau Pinang
Tel. : 04-220 9191
Fax : 04-228 2929
LEBOH DOWNING
Bgn. Tuanku Syed Putra
Lebuh Downing, 10300 Pulau Pinang
Tel. : 04-220 9321
Fax : 04-262 7500
BUTTERWORTH
Wisma Telekom Butterworth
Jalan Bagan Luar
12000 Butterworth
Tel. : 04-331 9191
Fax : 04-332 3399
BUKIT MERTAJAM
Jalan Amurugam Pillai
14000 Bukit Mertajam
Tel. : 04-539 9191
Fax : 04-539 9339
SUNGAI BAKAP
1282, Jalan Besar, 14200 Sungai Bakap
Tel. : 04-582 4444
Fax : 04-582 2014
BUKIT MERTAJAM
No. 22, Tingkat Ciku I
Taman Ciku
14000 Bukit Mertajam
Tel. : 04-538 0900
Fax : 04-530 3236
JELUTONG
No. 354, KLMN, Jalan Jelutong
11600 Jelutong, Pulau Pinang
Tel. : 04-282 4941
Fax : 04-281 8501
PERAK
Level 2, Wisma Telekom
Jalan Sultan Idris Shah, 30672 Ipoh
Tel. : 05-241 2195/249 9121
Fax : 05-241 2185
Bangunan Telekom
Jalan Dato’ Onn Jaafar, 30300 Ipoh
Tel. : 05-249 9171
Fax : 05 255 1717
SEBERANG JAYA
No. 31, Jalan Todak 4
Pusat Bandar Sunway
13700 Seberang Jaya, Pulau Pinang
Tel. : 04-397 3131
Fax : 04-398 3131
PULAU PINANG
Ground & 1st Floor
Wisma Celcom
No. 245, Jalan Burmah
10350 Pulau Pinang
Tel. : 04-228 8900
Fax : 04-228 8905
Mezzanine Level, Wisma Telekom
Jalan Sultan Idris Shah, 30672 Ipoh
Tel. : 05-249 9192/9189
Fax : 05-254 9696
Kedai Telekom
IPOH
Wisma Telekom, Jalan Sultan Idris Shah
30672 Ipoh
Tel. : 05-253 7788
Fax : 05-254 8111
BATU GAJAH
No. 26, Jalan Dewangsa
31672 Batu Gajah
Tel. : 05-366 9191
Fax : 05-366 2988
TASEK
Jalan Sultan Azlan Shah Utara
31400 Ipoh
Tel. : 05-545 9191
Fax : 05-547 2257
KAMPAR
Bangunan Telekom
Jalan Baru, 31900 Kampar
Tel. : 05-466 9191
Fax : 05-466 9393
TAIPING
Bangunan Telekom, Jalan Berek
34672 Taiping
Tel. : 05-808 5600
Fax : 05-808 4331
TELUK INTAN
Bangunan Telekom
Jalan Jawa, 36672 Teluk Intan
Tel. : 05-625 9221
Fax : 05-621 8453
PARIT BUNTAR
36, Persiaran Perwira
Pusat Bandar, 34200 Parit Buntar
Tel. : 05-716 9191
Fax : 05-716 9600
KUALA KANGSAR
Bangunan Telekom
Jalan Raja Chulan, 33000 Kuala Kangsar
Tel. : 05-776 9191
Fax : 05-716 1522
GERIK
Wisma Kosek, Jalan Takong Datoh
33300 Gerik
Tel. : 05-791 1191
Fax : 05-791 1701
261
Kedai Telekom
GROUP DIRECTORY
SUNGAI SIPUT
No. 188, Jalan Besar
31000 Sungai Siput
Tel. : 05-598 9191
Fax : 05-598 5519
SITIAWAN
179, Taman Sitiawan Maju
32000 Sitiawan
Tel. : 05-691 9191
Fax : 05-691 6252
262
TAPAH
Bangunan Telekom
Jalan Stesyen, 35672 Tapah
Tel. : 05-401 9191
Fax : 05-401 3932
NEGERI SEMBILAN
Jalan Dato’ Hamzah, 70000 Seremban
Tel. : 06-765 1888
Fax : 06-767 7888
Jalan Dato’ Hamzah, 70000 Seremban
Tel. : 06-765 1190
Fax : 06-763 4444
SEREMBAN
Lot 1521, Ground Floor 173
Jalan Tun Dr. Ismail, 70200 Seremban
Tel. : 06-763 2548
Fax : 06-763 4286
LUKUT
No. 8, Jalan Pasar
71010 Lukut, Port Dickson
Tel. : 06-651 5235
Fax : 06-651 5240
TANJUNG MALIM
Jalan Besar, 35900 Tanjung Malim
Tel. : 05-459 7210
Fax : 05-459 6633
Suite 7, Wisma Arab-Malaysian
Jalan Tuanku Munawir, 70000 Seremban
Tel. : 06-765 1248
Fax : 06-761 9696
MELAKA
Kedai Telekom
IPOH
No. 148, Jalan Kampar
30250 Ipoh
Tel. : 05-254 5900
Fax : 05-254 8900
SEREMBAN
Jalan Dato Hamzah, 70000 Seremban
Tel. : 06-765 1085
Fax : 06-762 9394
TELUK INTAN
Lot 12, Medan Sri Intan
Jalan Sekolah
36000 Teluk Intan
Tel. : 05-623 3900
Fax : 05-623 2900
TAIPING
No. 430, Ground & 1st Floor
Jalan Kemunting, Taman Saujana
34600 Kemunting, Taiping
Tel. : 05-812 0900
Fax : 05-812 1900
PORT DICKSON
Jalan Pantai, Batu 2, 71000 Port Dickson
Tel. : 06-647 2191
Fax : 06-647 4200
KUALA PILAH
Jalan Bahau, 72000 Kuala Pilah
Tel. : 06-481 1191
Fax : 06-481 2000
TAMPIN
Jalan Besar, 73000 Tampin
Tel. : 06-441 2191
Fax : 06-441 4191
Level 2, Kompleks Kotamas
Leboh Ayer Keroh, 75450 Melaka
Tel. : 06-252 2366
Fax : 06-230 8220
Bangunan Unit 2, Jalan Banda Kaba
75000 Melaka
Tel. : 06-292 9292
Fax : 06-282 8534
Lot F9-F15, Bangunan Peringgit Point
Jalan Batu Hampar
75320 Peringgit Melaka
Tel. : 06-292 5012
Fax : 06-281 4445
MELAKA
527 & 529 A, Plaza Melaka
Jalan Gajah Berang, 75200 Melaka
Tel. : 06-292 5801
Fax : 06-281 1000
4th Floor, Ibusawat Telekom Senai
81400 Senai
Tel. : 1050
Fax : 1 800 88 9393
ALOR GAJAH
Batu 141⁄2, Jalan Melaka Kendong
78000 Alor Gajah, Melaka
Tel. : 06-556 2292
Fax : 06-556 5724
KOTAMAS
Level 2, Kompleks Kotamas
Leboh Ayer Keroh
75450 Ayer Keroh, Melaka
Tel. : 06-252 2582
Fax : 06-231 7677
Wisma Telekom Pelangi, Jalan Sutera 3
Taman Sentosa, 80150 Johor Bahru
Tel. : 1 800 88 9595
Fax : 1 800 88 9696
Kedai Telekom
JOHOR BAHRU
Jalan Abdullah Ibrahim, 80672 Johor Bahru
Tel. : 07-228 1128
Fax : 07-222 7171
MELAKA
No. 233, Taman Melaka Raya
75000 Melaka
Tel. : 06-281 4800
Fax : 06-281 1311/283 3800
SKUDAI
Ground Floor, Ibusawat Telekom
Bt. 91⁄2 Jalan Skudai, 81300 Skudai
Tel. : 07-222 1167
Fax : 07-557 1999
No. 165, Ground & Mezzanine Floor
Jalan Munshi Abdullah, 75100 Melaka
Tel. : 06-283 6900
Fax : 06-284 6900
PONTIAN
1st Floor, Ibusawat Telekom
Jalan Alsagoff, 82000 Pontian
Tel. : 07-687 9191
Fax : 07-687 3800
JOHOR
Level 5, Wisma Telekom, Jalan Sutera 3
Tel. : 07-228 1001
Fax : 07-339 1919
KLUANG
Jalan Sultanah, 86000 Kluang
Tel. : 07-771 9191
Fax : 07-772 9111
SEGAMAT
Jalan Pawang, 85000 Segamat
Tel. : 07-933 3235
Fax : 07-932 5717
BATU PAHAT
40 & 42, Jalan Rahmat, 83000 Batu Pahat
Tel. : 07-435 9292
Fax : 07-431 4888
MUAR
37A Jalan Ibrahim, 84000 Muar
Tel. : 06-952 9595
Fax : 06-951 5916
KOTA TINGGI
No. 2-4, Jalan Indah, Taman Medan Indah
81900 Kota Tinggi
Tel. : O7-883 5199
Fax : 07-883 4999
KULAI
Lot 435, Jalan Kenanga 29/11
Taman Indah Putra
81100 Kulai
Tel. : 07-663 9191
Fax : 07-663 5800
PELANGI
Pelangi Business Centre, Jalan Kasa
Tel. : 07-228 1151
Fax : 07-331 9999
MERSING
Jalan Dato Timur, 86800 Mersing
Tel. : 07-799 5291
Fax : 07-799 5000
YONG PENG
Jalan Muar, 83700 Yong Peng
Tel. : 07-647 1466
Fax : 07-467 3888
PASIR GUDANG
17 & 19, Jalan 9/7, Jalan Perjiranan 9
81700 Pasir Gudang
Tel. : 07-251 9191
Fax : 07-251 4999
PERMAS JAYA
No. 6, Jalan Permas 10/7
Bandar Baru Permas Jaya
81750 Masai, Johor
Tel. : 07-387 8662
Fax : 07-387 6268
263
Kedai Telekom
GROUP DIRECTORY
JOHOR BAHRU
Lot G-1, Ground & Mezzanine Floor
Bangunan Ang, No. 1, Jalan Jeram
Taman Tasek, 80200 Johor Bahru
Tel. : 07-210 1900
Fax : 07-210 1907
TAMAN PELANGI
No. 1, Jalan Kuning 2
Taman Pelangi, 80400 Johor Bahru
Tel. : 07-335 3199
Fax : 07-335 3200
264
TAMAN MOLEK
1-3, Jalan Molek 1/9, Taman Molek
81100 Johor Bahru
Tel. : 07-353 9900
Fax : 07-353 3015
SEGAMAT
No. 246, Ground & Mezzanine Floor
Jalan Genuang, 85000 Segamat
Tel. : 07-932 3900
Fax : 07-932 8901
BATU PAHAT
No. 22, Jalan Maju, Taman Maju
83000 Batu Pahat
Tel. : 07-433 8677
Fax : 07-433 5277
No. 23, Jalan Kundang
Taman Bukit Pasir, 83000 Batu Pahat
Tel. : 07-432 5900
Fax : 07-432 6900
4th Floor, Bangunan Telekom
Jalan Mahkota, 25000 Kuantan
Tel. : 09-515 2292
Fax : 09-514 5151
Kedai Telekom
KUANTAN
Bangunan Telekom Malaysia
No. 168, Jalan Besar
25000 Kuantan
Tel. : 09-514 2088
Fax : 09-513 9289
MENTAKAB
Jalan Tun Razak, 28400 Mentakab
Tel. : 09-270 1164
Fax : 09-277 2191
BENTONG
111, Bgn. Persatuan Bola Sepak
Jalan Ah Peng, 28700 Bentong
Tel. : 09-222 7978
Fax : 09-222 8050
KUALA LIPIS
10, Jalan Bukit Bius, 27200 Kuala Lipis
Tel. : 09-312 2191
Fax : 09-355 5191
RAUB
Jalan Kuala Lipis, 27600 Raub
Tel. : 09-355 3191
Fax : 09-355 5191
PAHANG
KUANTAN
45, Jalan Tanah Putih, 25100 Kuantan
Tel. : 09-512 1088
Fax : 09-515 8686
Level 2, Wisma Telekom Mahkota
Jalan Mahkota, 25000 Kuantan
Tel. : 09-512 9353
Fax : 09-513 6644
CELCOM WISMA DELIMA
1st Floor, Lot 185 & 186
Seksyen 19, Jalan Hj. Abd. Aziz
25200 Kuantan
Tel. : 09-559 3939
Fax : 09-559 2919
TEMERLOH
No. 62, Jalan Ahmad Shah I
28000 Temerloh
Tel. : 09-296 2900
Fax : 09-296 1485
TERENGGANU
4th Floor, Bangunan Telekom
Jalan Sultan Ismail
20200 Kuala Terengganu
Tel. : 09-620 2525
Fax : 09-624 2727
Ibusawat Telekom Hiliran
Jalan Sultan Muhamad
Tel. : 09-620 9292
Fax : 09-624 4628
Kedai Telekom
KUALA TERENGGANU
Bangunan Telekom, Jalan Sultan Ismail
Tel. : 09-623 2191
Fax : 09-624 5200
KEMAMAN
Jalan Masjid, 24000 Kemaman
Tel. : 09-859 3191
Fax : 09-859 2411
DUNGUN
Jalan Nibong, 23000 Dungun
Tel. : 09-845 5354
Fax : 09-844 4111
KUALA TERENGGANU
No. 6C & 6D, Jalan Air Jernih
Tel. : 09-623 3900
Fax : 09-622 4591
Ground & Mezzanine Floor
No. 42, Wisma Isaacs
Jalan Dato’ Isaacs
Tel. : 09-622 6800
Fax : 09-623 0800
KEMAMAN
Lot K 9709-9710
Taman Chukai Utama
24000 Chukai, Kemaman
Tel. : 09-859 1906
Faks : 010-903 1904
Kedai Telekom
KOTA BHARU
Jalan Doktor, 15000 Kota Bharu
Tel. : 09-744 9191
Fax : 09-743 0778
PASIR MAS
606, Jalan Masjid Lama
17000 Pasir Mas
Tel. : 09-790 9191
Fax : 09-790 0427
TANAH MERAH
4088, Jalan Ismail Petra
17500 Tanah Merah
Tel. : 09-955 6191
Fax : 09-955 7431
KUALA KRAI
Lot 1522, Jalan Tengku Zainal Abidin
18000 Kuala Krai
Tel. : 09-966 6191
Fax : 09-966 3228
PASIR PUTEH
258B, Jalan Sekolah Laki-Laki
16800 Pasir Puteh
Tel. : 09-786 7191
Fax : 09-786 7313
KELANTAN
1st Floor, Bangunan Pentadbiran
Tel. : 09-743 4545
Fax : 09-744 3447
3rd Floor, Bangunan Unit 1
Bhg. Pusat Perkhidmatan Pelanggan
Tel. : 09-744 9292 Ext. 421
Fax : 09-743 1568
KOTA BHARU
Lot 825 & 826
Seksyen 27, Jalan Seri Cemerlang
15300 Kota Bharu
Tel. : 09-735 1000
Fax : 09-735 1001
TANAH MERAH
Bangunan Merdeka Jaya
Jalan Taman Hiburan
17500 Tanah Merah
Tel. : 09-955 4900
Fax : 09-955 4904
SABAH
Jalan Tunku Abdul Rahman
88672 Kota Kinabalu
Tel. : 088-299 888/838
Fax : 088-248 378
Ground Floor, Telekom Malaysia
Jalan Tunku Abdul Rahman
88672 Kota Kinabalu
Tel. : 088-299 714
Fax : 088-299 716
1st Floor, Lot 67-69, Block J
Jalan Ikan Juara 1, Sadong Jaya Complex
88100 Kota Kinabalu, Sabah
Tel. : 088-269 595
Fax : 088-269 696
Kedai Telekom
SADONG JAYA
3rd Floor, Bangunan Telekom
88100 Sadong Jaya
Tel. : 088-299 380
Fax : 088-257 979
L. TERBANG K. KINABALU
88100 Kota Kinabalu
Tel. : 088-261 261
Fax : 088-232 311
TAWAU
T.B. 307, Block 35, Kompleks Fajar
Jalan Perbandaran, 91000 Tawau
Tel. : 089-773 131
Fax : 089-761 600
LAHAD DATU
MOLD 3307, Ground Floor
Kompleks Fajar, Jalan Segama
91100 Lahad Datu
Tel. : 089-881 160
Fax : 089-888 500
265
JERTIH
Upper Floor, Ibusawat Telekom Jertih
Jalan Zainal Abidin, 22000 Jertih
Tel. : 09-697 9191
Fax : 09-697 3291
GROUP DIRECTORY
SANDAKAN
Locked Bag 44, 90009 Sandakan
Tel. : 089-219 191
Fax : 089-216 000
KENINGAU
Commercial Centre, Jalan Arusap
Off Jalan Masak, Blok B7
Lot 13 & 14, 89007 Keningau
Tel. : 087-333 496
Fax : 087-335 000
266
BEAUFORT
Choong Street, P.O Box 269
89800 Beaufort
Tel. : 087-212 292
Fax : 087-211 411
KUDAT
Jalan Wak Siak
P. O. Box 340, 89058 Kudat
Tel. : 088-611 022
Fax : 088-612 690
DAMAI
Wisma CTF, Lot 4, Block B
Damai Plaza Phase 3, Luyang
88300 Kota Kinabalu
Tel. : 088-282 802
Fax : 088-282 805
SANDAKAN
Lot 9 & 10, Ground & Mezzanine Floor
Block B, Phase 2, Taman Grand View
90000 Sandakan
Tel. : 089-215 900
Fax : 089-217 900
KENINGAU
Lot 21, Block C11
Ground-2nd Floor
Ribumi Shophouses
P. O. Box 900, 89008 Keningau
Tel. : 087-333 900
Fax : 087-334 900
KOTA KINABALU
Ground-3rd Floor, Lot 1, Block B
Lorong Singgah Mata, MPKK 1
Asia City, Locked Bag No. 29
88992 Kota Kinabalu
Tel. : 010-801 0029
Fax : 088-247 900
Level 2, KKIA, 88200 Kota Kinabalu
Tel. : 088-212 870
Fax : 088-212 895
TAWAU
TB 309, Ground-3rd Floor
Block 36, Jalan Patrick
Fajar Complex, 91000 Tawau
Tel. : 089-752 458
Fax : 089-752 457
SARAWAK
6th Floor, TM 100
Jalan Simpang Tiga, 93672 Kuching
Tel. : 082-200 200
Fax : 082-257 505
Ground Floor, Bangunan Telekom
Jalan Batu Lintang, 93200 Kuching
Tel. : 082-203 900/901/904
Fax : 082-250 686
Ground Floor, Lot 1076, 1077
Bintang Jaya Commercial Complex
98000 Miri
Tel. : 085-432 223/410 041
Fax : 085-433 301
Kedai Telekom
BATU LINTANG
Jalan Batu Lintang, 93200 Kuching
Tel. : 082-429 191
Fax : 082-243 511
PENDING
Jalan Gedong, 93450 Pending
Tel. : 082-489 191
Fax : 082-337 797
SRI AMAN
Jalan Club, 95000 Sri Aman
Tel. : 083-322 125
Fax : 083-321 490
MIRI
Jalan Post, 98000 Miri
Tel. : 085-429 191
Fax : 085-422 400
LIMBANG
Jalan Kubu, 98700 Limbang
Tel. : 085-211 334
Fax : 085-212 798
LAWAS
Jalan Punang, 98850 Lawas
Tel. : 085-285 667
Fax : 085-285 399
BINTULU
Jalan Law Gek Soon, 97000 Bintulu
Tel. : 086-318 181
Fax : 086-333 222
SIBU
Persiaran Brooke, 96000 Sibu
Tel. : 084-339 191
Fax : 084-314 708
SARIKEI
Jalan Berek, 96100 Sarikei
Tel. : 084-655 550
Fax : 084-653 588
KAPIT
Jalan Kapit By Pass, 96800 Kapit
Tel. : 084-796 991
Fax : 084-796 515
CENTRAL PARK
No. 322, Lot 2734
Central Park Commercial Centre
3rd Mile, Jln Tun Ahmad Zaidi Adruce
93150 Kuching
Tel. : 082-203 888
Fax : 082-419 084
No. 44, Lot 1557, Jalan Keranji
Off Jalan Tuanku Osman, 96000 Sibu
Tel. : 084-322 900
Fax : 084-330823
MIRI
Lot 935, Ground & 1st Floor
Block 9, MCLD Jalan Asmara
98000 Miri
Tel. : 085-420 800/429 236
Fax : 085-439 445
KUCHING (CENTRAL PARK)
Wisma Lim Kim Soon
Lot 609, Block 195
Jalan Satok, 93400 Kuching
Tel. : 082-410 506
Fax : 082-252 900
KUCHING (SATOK)
Ground & 1st Floor, Lot 314, Jalan Satok
93400 Kuching
Tel. : 082-239 800
Fax : 082-259 800
WILAYAH
PERSEKUTUAN LABUAN
JALAN DAAR SVC CTR
Ground Floor, Lot 445
Sub Lot 6, Seksyen 45
Jalan Dato Abang Abdul Rahim
93450 Kuching
Tel. : 082-339 900
Fax : 010-846 7703
BINTULU
Lot 3637, 1st Floor, Block 31
Medan Jaya Commercial Centre
Jalan Tun Hussein Onn, 97000 Bintulu
Tel. : 086-338 423
Fax : 086-314 800
Lot 427, No. 9, Jalan Abang Galau
97000 Bintulu
Tel. : 086-338 900
Fax : 086-338 372
SIBU
Lot 145, Ground & 1st Floor
Jalan Kampung Nyabor
96000 Sibu
Tel. : 084-321 800/324 800
Fax : 084-310 800
State Relations Officer
Lot E001, 1st Floor, Podium Level
Labuan Financial Park
Jalan Merdeka, 87000 WP Labuan
Tel. : 087-408 888
Fax : 087-453 899
Lot E001, 1st Floor, Podium Level
Labuan Financial Park
Jalan Merdeka, 87000 WP Labuan
Tel. : 087-408 878
Fax : 087-441 446
Kedai Telekom
LABUAN SERVICE CENTRE
Lot 8, Lazenda Commercial Centre
Jalan Tun Mustapha, Wilayah Persekutuan
87008 Wilayah Persekutuan Labuan
Tel. : 087-425 300/100/400
Fax : 087-415 013/425 900
LABUAN
Ground-2nd Floor
Lot 6, Jalan Anggerik
87007, Wilayah Persekutuan Labuan
Tel. : 087-416 900
Fax : 087-416 790
INTERNATIONAL
SUBSIDIARIES/
AFFILIATES
CAMBODIA SAMART COMMUNICATIONS
CO. LTD.
33rd Floor
No. 3, Samdech Sothearos Blvd.
Khan Doun Penh, Phnom Penh
Kingdom of Cambodia
Tel. : +855-16-810081
Fax : +855-16-810006
MTN NETWORKS (PVT.) LTD.
No. 475, Union Place
Colombo 2 Sri Lanka
Tel. : +94-1-678688
Fax : +94-1-678703
SAMART CORPORATION PLC
92, Moo Software Park
Chaengwattana Rd.
Klong Gluar, Pak-Kred
Nonthaburi, 11120 Thailand
Tel. : +66-2-5026070
Fax : +66-2-5026072
SOTELGUI s.a.
B P 2066, Conakry, Republic of Guinea
Tel. : +224-450200
Fax : +224-411535
267
GROUP DIRECTORY
TELEKOM NETWORKS MALAWI LIMITED
Munif House, Livingstone Avenue
Limbe P.O. Box 3039, Blantyre, Malawi
Tel. : +265-1-645915
Fax : +265-1-642805
UNIVERSITY TELEKOM SDN. BHD.
Jalan Multimedia, 63100 Cyberjaya
Selangor Darul Ehsan
Tel. : 03-8312 5000/5020
Fax : 03-8312 5022
TELKOM SA LIMITED
Private Bag 8780
Pretoria 0001, South Arica
Tel. : +27-12-3113910
Fax : +37-12-3118302
TELEKOM APPLIED BUSINESS SDN. BHD.
16th Floor, Menara 2, Faber Towers
Jalan Desa Bahagia, Taman Desa
Off Jalan Klang Lama, Kuala Lumpur
Tel. : 03-7984 4989
Fax : 03-7980 1605
268
TM INTERNATIONAL BANGLADESH
LIMITED
9th Floor, Brac Centre
75 Mohakhali Commercial Area
Dhaka 1212, Bangladesh
Tel. : +880-2-9887115
Fax : +880-2-9887112
LOCAL SUBSIDIARIES
FIBERAIL SDN. BHD.
7th Floor, Wisma Telekom
Jalan Desa Utama
Pusat Bandar Taman Desa
58100 Kuala Lumpur
Tel. : 03-7980 9696
Fax : 03-7980 9900
GITN SDN. BHD.
31st Floor, Menara Telekom
Tel. : 03-2240 0708
Fax : 03-2240 0709
MEGANET COMMUNICATIONS SDN. BHD.
Level 14, Wisma Pantai
Plaza Pantai, Jalan Pantai Baharu
59200 Kuala Lumpur
Tel. : 03-2284 5515
Fax : 03-2284 3464
MENARA KUALA LUMPUR SDN. BHD.
Jalan Punchak, Off Jalan P. Ramlee
50250 Kuala Lumpur
Tel. : 03-2020 5446
Fax : 03-2034 2609
TELEKOM PUBLICATIONS SDN. BHD.
10th Floor, Menara D, Persiaran MPAJ
Jalan Pandan Utama, Pandan Indah
55100 Kuala Lumpur
Tel. : 03-4292 1111
Fax : 03-4291 9191
TELEKOM RESEARCH & DEVELOPMENT
SDN. BHD.
Idea Tower, UPM-MTDC
Technology Incubation Centre 1
Lebuh Silokon, 43400 Serdang, Selangor
Tel. : 03-8933 1820
Fax : 03-8945 1591
TELEKOM SALES & SERVICES SDN. BHD.
Menara Mutiara Bangsar
Jalan Liku Off Jalan Riong
59100 Bangsar, Kuala Lumpur
Tel. : 03-2283 3888
Fax : 03-2282 6184
TELEKOM SMART SCHOOL SDN. BHD.
45-8, Level 3, Block C, Plaza Damansara
Jalan Medan Setia 1, Bukit Damansara
50490 Kuala Lumpur
Tel. : 03-2092 5252
Fax : 03-2093 4993
TELEKOM TECHNOLOGY SDN. BHD.
Level 3, Menara CELCOM
No. 82, Jalan Raja Muda Abdul Aziz
50300 Kuala Lumpur
Tel. : 03-2681 2681
Fax : 03-2681 2680
CELCOM (M) BERHAD
15th Floor, Menara CELCOM
No. 82, Jalan Raja Muda Abdul Aziz
50300 Kuala Lumpur
Tel. : 03-2687 3838
Fax : 03-2681 0359
27th Floor, Menara Telekom
Tel. : 03-2240 1004
Fax : 03-2284 1233
17th Floor, Menara Telekom
Tel. : 03-2240 2254
Fax : 03-7956 0266
TM NET SDN. BHD.
3300, Lingkaran Usahawan 1 Timur
63300 Cyberjaya, Selangor Darul Ehsan
Tel. : 03-8318 8027
Fax : 03-8318 8077
VADS BERHAD
8th Floor, Plaza IBM
No. 1, Jalan Tun Mohd Fuad
Taman Tun Dr. Ismail
60000 Kuala Lumpur
Tel. : 03-7712 8888
Fax : 03-7728 2584
PROXY FORM
Annual Report 2003
I/We ______________________________________________________________________________________________________
(Full Name and NRIC/Passport No./Company No.)
of ________________________________________________________________________________________________________
being a Member/Members of TELEKOM MALAYSIA BERHAD hereby appoint ___________________________________________
(Full Name and NRIC/Passport No.)
__________________________________________________________________________________________________________
of ________________________________________________________________________________________________________
or failing him ______________________________________________________________________________________________
(Full Name and NRIC/Passport No.)
of ________________________________________________________________________________________________________
or failing him, the Chairman of the Meeting, as my/our proxy to vote for me/us and my/our behalf at the Nineteenth Annual General
Meeting of the Company to be held at the Grand Ballroom, 9th Floor, The Legend Hotel, 100 Jalan Putra, 50350 Kuala Lumpur on
Tuesday, 18 May 2004 at 10:00 a.m. and at any adjournment thereof.
My/Our proxy is to vote as indicated below:Resolutions
1.
For
To receive the Audited Financial Statements for the financial
year ended 31 December 2003
– Ordinary Resolution 1
Declaration of a final dividend of 10 sen per share
(less 28% Malaysian Income Tax) and special dividend of
10 sen per share (less 28% Malaysian Income Tax)
Re-election of Directors under Article 103:(i) Tan Sri Dato’ Ir. Muhammad Radzi bin Haji Mansor
(ii) Ir. Prabahar N.K. Singam
(iii) Dato’ Lim Kheng Guan
(iv) Rosli bin Man
(v) Tan Poh Keat
(vi) Datuk Dr. Halim bin Shafie
(vii) Dato’ Abdul Majid bin Haji Hussein
–
–
–
–
–
–
–
4.
Approval of Directors’ fees and remuneration
5.
Re-appointment of Messrs. PricewaterhouseCoopers as
Auditors of the Company
2.
3.
6.
Special Business:
– Section 132D, Companies Act 1965
Issuance of New Shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Resolution
Resolution
Resolution
Resolution
Resolution
Resolution
Resolution
Against
3
4
5
6
7
8
9
(Please indicate with an “X” in the spaces provided how you wish your vote to be cast. If you do not do so, the Proxy will vote
or abstain from voting at his/her discretion.)
No. of Shares
✂
Signed this _________ day of ______________ 2004
__________________________________
Signature/Common Seal of Appointer
CDS Account No.
Notes:
1. A member entitled to attend and vote at the above Meeting is entitled to appoint a proxy to attend and vote in his stead. A Proxy need not be
a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.
2. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting provided that where a member
of the Company is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act,
1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the
credit of the said securities account.
3. Where a member appoints two (2) proxies, the appointments shall be invalid unless the proportion of the holding to be represented by each
proxy is specified.
4. This instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly appointed under a power of attorney
or if such appointee is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a power
of attorney.
5. A corporation which is a member, may by resolution of its Directors or other governing body authorise such person as it thinks fit to act as
its representative at the Meeting, in accordance with Article 92 of the Company’s Articles of Association.
6. This instrument appointing the proxy must be deposited at the office of the Share Registrar, Tenaga Koperat Sdn. Bhd., 20th Floor, Plaza
Permata (formerly known as IGB Plaza), Jalan Kampar, Off Jalan Tun Razak, 50400 Kuala Lumpur not less than 48 hours before the time
appointed for holding the Meeting or any adjournment thereof.
1. Fold here
2. Fold here
The Share Registrar
TENAGA KOPERAT SDN. BHD.
20th Floor, Plaza Permata (formerly known as IGB Plaza)
50400 Kuala Lumpur
3. Fold here
(128740-P)
L a p o r a n Ta h u n a n 2 0 0 3 A n n u a l R e p o r t
New Possibilities...
Enriching Lives
To / Kepada : Tenaga Koperat Sdn. Bhd.
Share Registrar / Pendaftar Syarikat
Date :
Tarikh :
Please send me/us a copy of the 2003 Annual Report in Bahasa Malaysia :
Sila hantar kepada saya/kami senaskhah Laporan Tahunan 2003 dalam Bahasa Malaysia :
Name / Nama :
Address / Alamat :
Signature of Shareholder / Tandatangan Pemegang Saham :
1. Fold here/ Lipat di sini
TENAGA KOPERAT SDN. BHD.
20th Floor, Plaza Permata
(formerly known as /Dahulu dikenali sebagai IGB Plaza)
50400 Kuala Lumpur

ENG - Telekom Malaysia

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