Telekom Malaysia Berhad

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Letitia Rogers
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1 Telekom Malaysia Berhad Extraordinary General Meeting 8 May 2014

2 PART A: PROPOSED DIVIDEND REINVESTMENT SCHEME (DRS) & PROPOSED APPLICATION

APPROVALS SOUGHT FROM SHAREHOLDERS AT TODAY S EGM Ordinary Resolution 1 Proposed Dividend Reinvestment Scheme that provides shareholders of TM with the option to reinvest their cash dividend

3 sen per TM share that was announced on 27 February 2014 ( Proposed Application ) Note: Ordinary Resolution 2 is subject to the passing of Ordinary Resolution 1 Ordinary Resolution 3 Proposed

3 APPROVALS SOUGHT FROM SHAREHOLDERS AT TODAY S EGM Ordinary Resolution 1 Proposed Dividend Reinvestment Scheme that provides shareholders of TM with the option to reinvest their cash dividend entitlements in new ordinary shares of RM0.70 each in TM ( TM Share ) ( Proposed DRS ) Ordinary Resolution 2 Proposed DRS being applicable to the Company s final single-tier dividend of 16.3 sen per TM share that was announced on 27 February 2014 ( Proposed Application ) Note: Ordinary Resolution 2 is subject to the passing of Ordinary Resolution 1 Ordinary Resolution 3 Proposed renewal of shareholders mandate for recurrent related party transactions of a revenue or trading nature ( Proposed Renewal of Shareholders Mandate ) Ordinary Resolution 4 Proposed additional shareholders mandate for recurrent related party transactions of a revenue or trading nature ( Proposed Additional Shareholders Mandate ) 3

4 Introduction to the Proposed DRS The Proposed DRS will provide you with an opportunity to reinvest your dividends in new TM shares in lieu of receiving cash. In relation to the option to reinvest, you may: (i) (ii) elect to participate and reinvest the entire or a part of the dividends in new TM shares and to receive the balance in cash; or elect not to participate and receive the entire dividend wholly in cash 4

5 Details of the Proposed DRS Terms Eligibility Electable Portion Issue Price Odd Lots Taxation Costs Details All shareholders are eligible to participate The Board may, at our absolute discretion, determine whether the Proposed DRS will apply to the whole or part of the declared dividend The issue price, which will be determined by the Board, shall be the higher of: i. an issue price of not more than 10% discount to the 5-market day volume weighted average market price ( VWAP ) of the TM shares immediately prior to the price-fixing date. The VWAP shall be adjusted ex-dividend before applying the said discount in fixing the issue price; or ii. the par value of the TM shares A shareholder who elects to reinvest may receive such new TM shares in odd lots All shareholders will be issued a tax voucher regardless of whether they receive cash or subscribe for new TM shares The new TM shares issued free of any brokerage or fees unless otherwise provided by any statute, law or regulation 5

6 Process flow chart of the Proposed DRS Step 1 Step 2 We declare a dividend to which the Board determines that the Proposed DRS applies and we fix the issue price and announce the books closure date We despatch the notice of election to you Step 3 You decide whether to reinvest the dividends DECISION YES NO Step 4 You complete and return the notice of election to our registered office by the expiry date You need not take any action with regards to the notice of election Step 5 We allot and credit new TM shares into your CDS account; and We pay the balance of the dividends (if any) in cash to you We pay the dividend wholly in cash to you 6

7 Calculation of entitlement under the Proposed DRS FOR ILLUSTRATION PURPOSES ONLY The number of new TM shares to be allotted and issued to a shareholder who has elected to exercise his/her option to reinvest is calculated as follows: No of new TM shares entitled to reinvest = No of TM shares held x Dividend per share x Portion elected to reinvest Issue price per new TM shares Assuming you hold 1,000 TM shares, an illustration of the number of new TM shares you are entitled to receive under the Proposed DRS for the Final Dividend (assuming the Electable Portion is 100% of the Final Dividend, the issue price is RM6.00 and you decide to reinvest the entire Electable Portion) : No of new TM shares entitled to reinvest = 1,000 x RM0.163 RM6.00 No of new TM shares entitled to reinvest = 27 You will receive 27 new TM shares pursuant to the Proposed DRS with the remaining RM1.00 to be paid to you in cash 7

8 Rationale of the Proposed DRS Rationale Enhancing shareholder value Elaboration Able to extract value from investment in TM in a combination of future capital gain and dividend yield from the TM shares Benefit from subscribing new TM shares at a discount and without incurring any brokerage fee Alternative mode of payment of dividend Shareholders will not be worse off as shareholders can still elect to receive dividend in cash Greater flexibility to the capital management strategy Shareholders are able to enjoy dividend yield while TM has greater flexibility in managing its capital position. The cash dividend retained in part or in full TM under the Proposed DRS can be used to fund its working capital and business growth needs. 8

9 APPROVALS SOUGHT FROM SHAREHOLDERS IN RELATION TO THE PROPOSED DRS Ordinary Resolution 1 Proposed dividend reinvestment scheme that provides shareholders of TM with the option to elect to reinvest their cash dividend entitlements in new ordinary shares of RM0.70 each in TM ( TM Share ) ( Proposed DRS ) Ordinary Resolution 2 Proposed DRS being applicable to TM s final single-tier dividend of 16.3 sen per TM Share that was announced on 27 February 2014 ( Final Dividend ) Note: Ordinary Resolution 2 is subject to the passing of Ordinary Resolution 1 9

10 PART B: PROPOSED RENEWAL OF & ADDITIONAL SHAREHOLDERS MANDATES

11 APPROVALS SOUGHT FROM SHAREHOLDERS AT TODAY S EGM Ordinary Resolution 3 Proposed renewal of shareholders mandate for recurrent related party transactions of a revenue or trading nature ( Proposed Renewal of Shareholders Mandate ) Ordinary Resolution 4 Proposed additional shareholders mandate for recurrent related party transactions of a revenue or trading nature ( Proposed Additional Shareholders Mandate ) 11

12 Proposed Renewal of Shareholders Mandate Ordinary Resolution 3 Proposed Renewal of Shareholders Mandate for estimated RRPT value of RM512.1 million Renewal of the Existing Mandate Recurrent related party transactions of a revenue or trading nature which are necessary for its day-to-day operations ( RRPTs ). Existing mandate obtained at previous AGM. Terms of the RRPTs Transactions in the ordinary course of business, on arm s length basis, on terms not more favourable to the related parties and are not detrimental to minority shareholders. Clear procedures and guidelines for review/approval of RRPT in place. Rationale for the Proposed Renewal To meet our business needs at the best possible terms; allowing access to all available markets and products and services. Enhance Group s ability to explore beneficial opportunities. Save administrative time and expense Only non-interested shareholders are allowed to vote All interested directors and major shareholders will abstain from voting Details of the RRPT and related parties are listed on Appendix II, Pages of the Circular 12

Proposed Additional Shareholders Mandate Ordinary Resolution 4 Proposed Additional Shareholders Mandate for estimated RRPT value of RM142.

13 Proposed Additional Shareholders Mandate Ordinary Resolution 4 Proposed Additional Shareholders Mandate for estimated RRPT value of RM142.8 million Additional Mandate Recurrent related party transactions of a revenue or trading nature which are necessary for its day-to-day operations ( RRPTs ). Terms of the RRPTs Transactions in the ordinary course of business, on arm s length basis, on terms not more favourable to the related parties and are not detrimental to minority shareholders. Clear procedures and guidelines for review/approval of RRPT in place. Rationale for the Proposed Additional Mandate To meet our business needs at the best possible terms; allowing access to all available markets and products and services. Enhance Group s ability to explore beneficial opportunities. Save administrative time and expense Only non-interested shareholders are allowed to vote All interested directors and major shareholders will abstain from voting Details of the RRPT and related parties are listed on Appendix III, Page 40 of the Circular 13

14 THANK YOU Investor Relations Level 11 (South Wing) Menara TM Jln Pantai Bharu Kuala Lumpur, Malaysia Tel (603) / 7366 / 7388

DIVIDEND REINVESTMENT SCHEME FREQUENTLY ASKED QUESTIONS

DEFINITIONS DIVIDEND REINVESTMENT SCHEME FREQUENTLY ASKED QUESTIONS AGM : Annual General Meeting For Shareholders of Telekom Malaysia Berhad www.tm.com.my Allotment Date : Date of allotment of the New