KUALA LUMPUR, May 8 ― Telekom Malaysia Berhad shareholders will vote today on a dividend reinvestment scheme. But one question shareholders will be asking is: what will the reinvested money be used for? Item 2.5 “Utilisation of Proceeds” on page four of the shareholders’ circular states:

“The total cash reinvested in our Company from the Proposed DRS cannot be ascertained at this juncture. Therefore, the time frame for utilisation of such cash proceeds cannot be determined. Nonetheless, the net cash proceeds from the Proposed DRS (after the deduction of estimated expenses in respect of the Proposed DRS) will be utilised for working capital purposes and investments of our Group.” So, they don’t yet know how much they will raise. Fair enough, they can’t know how many shareholders will agree to receive all or part of their dividends in shares. But the circular goes on to say: “As at the date of this Circular, we have not identified any investment which requires the utilisation of the cash proceeds from the total cash reinvested from the Proposed DRS.” The only other commentary is a boilerplate explanation on page seven which says management thinks this reinvestment scheme has capital management and shares liquidity benefits. Telekom’s Q4 financials indicate the company generated RM2.8 billion in cash from operations, reserves comprised RM2.51 billion, and debt levels were at RM6.45 billion as at December 31, 2013, with RM1.59 billion due within a year. These are the company’s Q4FY13 financials published on February 27, 2014: Revenue: +6.1per cent to RM2.98 billion Profit: -10.5per cent to RM309.7 million Cash flow from operations: RM2.8 billion vs RM2.85 billion Dividend: 9.8 sen per share vs 9.8 sen per share Meantime, Employees Provident Fund Board and AmanahRaya Trustees Berhad have been purchasing more shares since December 2013, as shown in the Bursa Malaysia disclosures record. As at April 22, 2014, Employees Provident Fund Board owns 348,810,600 shares and as at March 19, 2014, AmanahRaya Trustees Berhad owns 471,927,600 shares. Investor Central. We keep your investments honest. 1. What will reinvested dividends be used for? Shareholders who opt to receive their shares in new shares, rather than cash, are essentially making a new investment decision. They are essentially saying that Telekom Malaysia (also Jabatan Telekom Malaysia) is able to spend the money better than they can. However, with Telekom Malaysia saying it has no specific reason to keep the cash. Item 3.2 on page six of the shareholders circular states the illustrative issue price of each new share, after the maximum allowable discount of ten per cent to the Five-Market Day Rate Volume Weighted Average Market Price (VWAMP), will be RM5.28. The last traded price was RM6.13 as at May 7, 2014. 2. Will Khazanah Nasional accept its dividends in shares? Sovereign wealth fund Khazanah Nasional Berhad has a 28.73 per cent stake in Telekom Malaysia, according to the company. What would happen in the extreme case that no other shareholder accepts their dividends in shares? Is it possible that Khazanah’s stake reaches a level which puts it past the 30per cent threshold to launch a takeover? Telekom Malaysia does reserve the right not to accept all dividends for reinvestment. 3. How will it collect on outstanding payments? Trade and other receivables were at RM2.29 billion in Q4FY13, up from RM2.21 billion previously. Why has it let more customers owe it money? Are there plans to reduce this? What services or goods are these outstanding payments for? And who are these customers? 4. What is its relationship with LFE Corporation? Could LFE Corporation be one of the defaulting customers? We have no evidence of this. However, according to Handshakes, it is a major customer. Bursa Securities penalised LFE directors in 2009 for failure in their duties, and criminal prosecution in the 2012 conviction of Alan Rajendram for fraud on LFE involving RM9 million used in 2007. 5. Why have associate contributions been so meagre? Associates contributed RM0.7 million, down from RM1.2 million the previous quarter, but for full-year results, contributions went up from RM0.9 million to RM3.9 million. For a multibillion dollar telecommunications company, associate contributions are certainly dwarfed by comparison to overall revenue which in full-year figures, rose from RM10 billion to RM10.63 billion in FY13. What are the plans to beef up associate performances? Page 74 & 75 of the 2013 annual report describe the group’s structure, including subsidiaries and associates. 6. How much is Packet One expected to contribute? Malaysia’s information and communication technologies (ICT) outlook for 2014 is marked by growth in big data, 4G, and cloud computing, reports Business Circle on April 28, 2014. We have sent these questions to the company to invite them for an on-camera interview, and/or seek their written response. The company has replied but could not promise to provide answers to our questions, citing preparations for the shareholders’ meeting (which is why you are seeing this message). ―Investor Central

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