TELEKOM MALAYSSIA BERHAD Annual Report 2014
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Annual Report 2014 TELEKOM MALAYSIA BERHAD (128740-P) SCAN FOR AURA CONTENT SCAN FOR AURA CONTENT TELEKOM TELEKOM MALAYSIA BERHAD You are our inspiration to constantly change the game. In this constantly and rapidly changing world, you already have the power, the ability to be on the move, while always staying in touch. To be online, whilst (128740-P) GROUP BRAND & COMMUNICATION basking in an offline TELEKOM MALAYSIA BERHAD (128740-P) world. You are already Level 8 (South Wing), Menara TM, Jalan Pantai Baharu living in the edge of 56072 Kuala Lumpur, Malaysia convergence. www.tm.com.my And we’ve helped make all that happen. As your Convergence Champion, TM will constantly strive Annual Report to deliver a seamless customer experience, innovative products and services, to all homes and 2014 businesses – to make lives a little easier and everyday a bit SCAN TO DOWNLOAD THE APP brighter. www.tm.com.my/annualreport/2014 TM AURA This TM Annual Report 2014 is enhanced with TM AURA, an augmented reality app developed by TM Research & Development (TM R&D). The app allows you to scan selected pages and images from the report to access extended rich contents. Download TM AURA on your smartphone or tablet (iOS and Android) for a game changing augmented reality experience! Search for TM AURA in Apple App Store or Google Play Store to download. GET IT ON revenue 1 2.23 RM11.24 No. million billion broadband provider broadband highest revenue growth in in Malaysia customers the industry at 5.7% 316.1% total return to shareholders (TRS) since demerger more than1.62 million premises passed for high speed broadband deployment 28,047 RM846.8 employees million TM’s most valuable asset total dividend payout FACTS AT A GLANCE PERSPECTIVE LEADERSHIP & BUSINESS KEY INITIATIVES 012 Chairman’s Statement ACCOUNTABILITY REVIEW 230 CEMT: Strengthening the 020 Group Chief Executive Ecosystem to Humanise 090 Board of Directors Officer’s Statement & FUNCTIONS Our Customer Service 092 Profile of Directors 028 The Telecommunications 178 Mass Market 234 Box Article: Becoming A 100 Group Leadership Team Sector: Review & Outlook 178 Consumer Customer-Centric 034 Strategic Journey: 102 Profile of Management 182 Small And Medium Convergence Champion Sustainable Value Creation Team Enterprise 238 Driving An Innovation 036 Group Financial Highlights 109 Statement on Corporate 186 New Media Culture: Work-Life Made Governance Easier 038 Simplified Group 190 Box Article: Innovation Statement of Financial 129 Directors’ Statement on Exchange 242 Safety Comes First – Position & Segmental Risk Management & 194 Managed Accounts Occupational Safety, Analysis Internal Control 194 Enterprise Health and Environment (OSHE) 040 Group Quarterly Financial 136 Nomination & 196 Government Performance Remuneration Committee 198 VADS 244 Corporate Responsibility Report 041 Stakeholder Management 202 Box Article: “Business Communication 142 Audit Committee Report Made Easier” with Managed Accounts 043 Investor Relations 147 Statement on Internal Audit Product Management 046 Stock Performance 149 Risk Committee Report 204 Global & Wholesale 048 Financial Calendar 154 Business Continuity 208 Mobile & Wireless: P1 Management 212 Box Article: Evolution to CORPORATE 156 Additional Compliance Convergence Champion Information 214 Support Business PROFILE 159 Corporate Integrity 218 Education Cluster: MMU, MMC & Yayasan TM 054 About Us 222 IT&NT – Transformation 056 Milestones Over Two PERFORMANCE Towards Agility Centuries 062 Media Milestones in 2014 REVIEW 064 2014 Corporate Events 166 Group Financial Review 068 Awards & Recognitions 170 Statement of Value Added 2014 171 Distribution of Value 070 TM Past Awards Added 074 Corporate Information 173 TM Group Products 078 Group Corporate Structure & Services 080 Group Organisation Structure 082 International & Domestic Infrastructure & Trunk Fibre Optic Network 084 TM Worldwide Coverage what’s inside annual report 2014 FINANCIAL OTHER STATEMENTS INFORMATION th 258 Statement of 388 Authorised and Issued Responsibility by Directors Share Capital 259 Directors’ Report 390 Analysis of Shareholding 264 Income Statements Statistics 265 Statements of 391 List of Top 30 Comprehensive Income Shareholders 266 Statements of Financial 392 Net Book Value of Land & Position Buildings 268 Consolidated Statement of 393 Usage of Properties Changes in Equity 394 Group Directory 270 Company Statement of 400 Glossary Changes in Equity 404 Notice of Annual General 272 Statements of Cash Flows Meeting ANNUAL GENERAL MEETING 273 Notes to the Financial 407 Statement Accompanying Statements Notice of 30th AGM Date 30 April 2015, Thursday Time 10.00 a.m. 385 Statement by Directors • Proxy Form Venue Kristal Hall, TM Convention Centre, 385 Statutory Declaration Menara TM, Jalan Pantai Baharu, 386 Independent Auditors’ 50672 Kuala Lumpur, Malaysia Report 30 GAME 006 CHANGER “To be Malaysia’s leading new generation communicationsISION provider, embracing customer needs through innovation and execution excellence” 1. Total Commitment To Customers 2. Uncompromising Integrity KRISTALALUE 3. Respect & Care Kristal Song* To achieve our vision, we are determined to do the following: With full commitment to our customers • Strive towards customer service excellence and operational efficiency We strive to give our very best Showing great understanding • Enrich consumer lifestyle and experience by providing innovative new Keeping an open mindV at all times generation services • Improve the performance of our business customers by providing Be honest, sincere and trustworthy high value information and communications solutions To friends, colleagues and all • Deliver value for stakeholders by generating shareholder value and Always with respect for one another supporting Malaysia’s growth and development Working with the utmost dedication Chorus: Let us move forward as one Providing excellence in service Overcoming all obstacles Surely we can be the best May TM continue to succeed Guided by visionary leadership And with our united foundation May TM forever be the pride of the Nation * English translation of original Bahasa ISSION Melayu lyrics M Telekom Malaysia Berhad Annual Report 2014 007 MAXIMISING PERFORMANCE Maximising revenue and profitability hinges upon maximising the reach and utilisation of our network. We anchor our strategies on the “Information and Innovation Exchange” business vision which is translated into reality via our Performance Improvement Programme (PIP 3.0), “Life Made Easier” (LME) and “Business Made Easier” (BME) strategies. Our strategy also entails increasing operational efficiencies and productivity while maintaining an STRATEGYefficient cost structure to improve overall productivity. AT A LME and BME represent our go-to-market (GTM) strategy,GLANCE based on the simple concept of ensuring excellent service and exceptional quality for all our customers. LME AND BME This is achieved by providing a comprehensive suite of services, optimising back-end processes and improving our touch points. Life Business Made MadeEasier Easier Perniagaan Lebih Mudah Hidup Lebih Mudah GTM STRATEGY CONVERGENCE CHAMPION INFORMATION everywhere INNOVATION EXCHANGE Content EXCHANGE Infrastructure IP Application & Platform Guides TM to build and AILA Devices Guides TM to explore operate secure, fast, new areas of innovation reliable and open CLOUD focusing on content, networks and platforms applications and devices that support all IX delivered over our customers and anytime- networks and platforms, anywhere-any device driving usage of our application. INFORMATION INNOVATION networks. EXCHANGE EXCHANGE PIP 3.0 PIP 3.0 is a three-year execution strategy that forms the base of our overall strategy framework. It is divided into three broad categories with detailed initiatives under each bucket. Continued Fundamental Improving Institutional Growth Productivity Shift Health Enablers Our future reimagined Where everyone will be enabled to collaborate, co-create and co-curate in one connected world. Where inspirations are shared, ideas are exchanged and solutions are created. Be engaged, be excited and be enriched with the endless opportunities and possibilities it will bring. As your Convergence Champion, we are delivering this seamless experience to all Malaysians. SCAN FOR AURA CONTENT PERSPECTIVE 012 Chairman’s Statement 020 Group Chief Executive Officer’s Statement 028 The Telecommunications Sector: Review & Outlook 034 Strategic Journey: Sustainable Value Creation 036 Group Financial Highlights 038 Simplified Group Statement of Financial Position & Segmental Analysis 040 Group Quarterly Financial Performance 041 Stakeholder Management Communication 043 Investor Relations 046 Stock Performance 048 Financial Calendar GAME 012 CHANGER I TAKE UP THIS BATON FROM DATO’ SRI DR HALIM SHAFIE, WITH A STRONG SENSE OF SHARED PURPOSE IN NATION BUILDING AND TOUCHING MALAYSIAN LIVES, GUIDED BY THE SAME VALUES THAT TM HOLDS AT THE CORE OF ITS ETHOS. TAN SRI DATO’ SERI DR SULAIMAN MAHBOB CHAIRMAN Telekom Malaysia Berhad Annual Report 2014 013 CHAIRMAN’S STATEMENT Dear Shareholders, This is my inaugural Annual Report Statement to you as the new Chairman of Telekom Malaysia Bhd (TM), an office I assumed in January 2015, with great honour and humility. Allow me first to pay tribute to Dato’ Sri Dr Halim Shafie, my predecessor, both for his able leadership of the TM Board of Directors as well as for his role as the highly regarded and much respected Chairman of all Warga TM. His tenure, since