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Group Corporate Communications

TELEKOM MALAYSIA BERHAD (128740-P)

Level 8 (South Wing), Menara TM

Jalan Pantai Baharu, 50672 Kuala Lumpur

Malaysia

2005 ANNUALREPORT

Opening Up Possibilities

T r a n s c e n d i n g

Boundaries

This report is printed on environment friendly paper

The power of connectivityFlows through us allPermeating and empoweringBusiness and pleasureLiberating and facilitatingInfinite possibilitiesWe are TM

Spreading our wingsSpanning the regionSowing prosperityFor one and allOne world we will beOne family we areWe are TM

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 solutions 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

OUR VISION

Our vision is to be the Communications Companyof choice focused on delivering Exceptional Valueto our customers and other stakeholders.

FACES OF OUR INTERNATIONAL FAMILYWHEREVER WE ARE

WE ARE ONE

TELEKOM MALAYSIA BERHAD ANNUAL REPORT 2005 32 TELEKOM MALAYSIA BERHAD ANNUAL REPORT 2005

CORPORATEFRAMEWORKpage 11.

PERFORMANCEREVIEWpage 35.

PERSPECTIVESpage 99.

MALAYSIANOPERATIONSpage 120.

INTERNATIONALOPERATIONSpage 160.

KEYINITIATIVESpage 181.

INSIDEPages2005 ANNUALReportFOCUS

...Opening up possibilities

Notice of Annual General Meeting 4. Statement Accompanying the Notice of Annual General Meeting 8. Financial Calendar 10.

CORPORATEFRAMEWORK 11. TM Profile 12. TM Group Products and Services 14. Milestones Over Two Centuries 16.

Corporate Events 2005 18. TM Awards & Recognitions 2005 26. Corporate Information 28. Group Corporate Structure 30.

Group Organisation Structure 32. Maximising Shareholders Value 33. PERFORMANCEREVIEW 35.

Five-Year Group Financial Highlights 36. Simplified Group Balance Sheets 38. Group Segmental Analysis 39.

Group Quarterly Performance 40. Group Financial Review 41. Statement of Value Added 47. Distribution of Value Added 47.

Business & Other Statistics 48. Share Price & Volume Traded 50. LEADERSHIP 51. Board of Directors 52.

Profile of Directors 54. Group Management Committee 60. ACCOUNTABILITY 67. Statement on Corporate Governance 68.

Risk Management 80. Code of Business Ethics 83. Additional Compliance Information 84. Audit Committee Report 86.

Statement on Internal Control 95. PERSPECTIVES 99. Chairmans Statement 100. Group Chief Executive Officers Statement 108.

BUSINESSREVIEW 119. Malaysian Operations. Wholesale 120. Retail 126. Mobile 130. Multimedia Services 136.

Facilities Management 142. Other Subsidiaries 146. International and Domestic Infrastructure & Trunk Fibre Optic Network 156.

International Operations 160. Global Cable Services & International Investments and Presence 176.

Review of the Telecommunications Industry and the Malaysian Economy 178. KEYINITIATIVES 181.

Building Enduring Customer Relationships 184. Fostering a Knowledge-Based Nation 189.

Working Towards a High Performance Workforce 196. Towards Greater Innovation 200. Enhancing the Workplace and Environment 204.

Corporate Social Responsibility 207. FINANCIALSTATEMENTS 212. OTHERINFORMATION 322. Shareholding Statistics 323.

List of Top 30 Shareholders 324. Authorised and Issued Share Capital 326. Shareholder/Investor Information 328.

Net Book Value of Land & Buildings 329. Usage of Properties 330. Group Directory 331. Proxy Form .

TABLE OF CONTENTS

TELEKOM MALAYSIA BERHAD ANNUAL REPORT 2005 54 TELEKOM MALAYSIA BERHAD ANNUAL REPORT 2005

Notice of Annual

General Meeting

NOTICE IS HEREBY GIVEN THAT the Twenty-first Annual GeneralMeeting of the Company will be held at 10:00 a.m., on Tuesday, 16 May 2006 at Hall 4, Ground Floor, Kuala Lumpur ConventionCentre, Kuala Lumpur City Centre, 50088 Kuala Lumpur, Malaysia, forthe following purposes:-

1. To receive the Audited Financial Statements for the financial year ended 31 December 2005together with the Reports of the Directors and Auditors thereon. (Ordinary Resolution 1)

2. To declare a final dividend of 25 sen per share (less 28% Malaysian Income Tax) inrespect of the financial year ended 31 December 2005. (Ordinary Resolution 2)

3. To re-elect Ahmad Haji Hashim, the Director who was appointed to the Board during theyear and retire in accordance with Article 98(2) of the Companys Articles of Association.

(Ordinary Resolution 3)

4. To re-elect the following Directors, who retire by rotation in accordance with Article 103of the Companys Articles of Association:-

(i) Dato Lim Kheng Guan (Ordinary Resolution 4)

(ii) Rosli Man (Ordinary Resolution 5)

5. To approve the payment of Directors fees for the financial year ended 31 December 2005.(Ordinary Resolution 6)

6. To re-appoint Messrs. PricewaterhouseCoopers as Auditors of the Company and toauthorise the Directors to fix their remuneration. (Ordinary Resolution 7)

As SPECIAL BUSINESS7. To consider and if thought fit, to pass the following Ordinary Resolution:-

Authority to Allot and Issue SharesTHAT subject to the Companies Act, 1965 (the Act), the Articles of Association of theCompany, approval from the Bursa Malaysia Securities Berhad (Bursa Securities) andother Government or regulatory bodies, where such approval is necessary, full authoritybe and is hereby given to the Board of Directors pursuant to Section 132D of the Act, toissue shares in the capital of the Company at any time upon such terms and conditionsand for such purposes as the Directors may in their discretion deem fit provided alwaysthat the aggregate number of shares to be issued, shall not exceed 10 per cent of theissued share capital of the Company. (Ordinary Resolution 8)

8. To transact any other business of the Company of which due notice has been received.

FURTHER NOTICE IS HEREBY GIVEN THAT aDepositor shall be eligible to attend thismeeting only in respect of:-

(a) Shares deposited into the DepositorsSecurities Account before 12:30 p.m. on 3 May 2006 (in respect of shares whichare exempted from Mandatory Deposit);

(b) Shares transferred into the DepositorsSecurities Account before 4:00 p.m. on 3 May 2006 (in respect of OrdinaryTransfer); and

(c) Shares bought on the Bursa Securitieson a cum entitlement basis according tothe Rules of the Bursa Securities.

Shareholders are reminded that pursuant tothe Securities Industry (Central Depositories)(Amendment No. 2) Act, 1998 (SICDA) whichcame into force on 1 November 1998, allshares not deposited with Bursa MalaysiaDepository Sdn Bhd (Bursa Depository) by12:30 p.m. on 1 December 1998 and notexempted from Mandatory Deposit, havebeen transferred to the Minister of Finance(MOF). Accordingly, the eligibility to attendthis Meeting for such undeposited shareswill be the MOF.

TELEKOM MALAYSIA BERHAD ANNUAL REPORT 2005 76 TELEKOM MALAYSIA BERHAD ANNUAL REPORT 2005

NOTICE OF BOOK CLOSURE FOR PAYMENT OF DIVIDEND

NOTICE IS ALSO HEREBY GIVEN THAT the Register of Members will be closed from 24 May2006 to 25 May 2006 (both dates inclusive) to determine the Shareholders entitlement to thedividend payment. The dividend, if approved by the shareholders at the Companys Twenty-first Annual General Meeting, will be paid on 20 June 2006 to shareholders whose namesappear in the Register of Depositors on 23 May 2006.

FURTHER NOTICE IS HEREBY GIVEN THAT a Depositor shall qualify for dividend entitlementonly in respect of:-

(a) Shares deposited into the Depositors Securities Account before 12:30 p.m. on 19 May2006 (in respect of shares which are exempted from Mandatory Deposit);

(b) Shares transferred into the Depositors Securities Account before 4:00 p.m. on 23 May2006 (in respect of Ordinary Transfers); and

(c) Shares bought on the Bursa Securities on a cum entitlement basis according to theRules of the Bursa Securities.

Shareholders are reminded that pursuant to SICDA, all shares not deposited with BursaDepository 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 willbe paid to MOF.

By Order of the Board

Wang Cheng Yong (MAICSA 0777702)Zaiton Ahmad (MAICSA 7011681)Secretaries

Kuala Lumpur21 April 2006

Notes:

1. A member entitled to attend and vote at theabove Meeting is entitled to appoint a proxy toattend and vote in his stead. A Proxy need notbe a member of Telekom Malaysia Berhad(Company) and the provisions of Section149(1)(b) of the Act shall not apply to theCompany.

2. A member shall not be entitled to appoint morethan two (2) proxies to attend and vote at thesame meeting provided that where a member ofthe Company is an authorised nominee asdefined in accordance with the provisions of theSecurities Industry (Central Depositories) Act,1991, it may appoint at least one (1) proxy inrespect of each securities account it holds withordinary shares of the Company standing to thecredit of the said securities accoun