(413292-P) TIME dotCom Behard Level 1, Wisma …A N N U A L R E P O R T 2 0 0 6 T I M E d o t C o m B e r h a d (4 1 3 2 9 2-P) TIME dotCom Behard (413292-P) Level 1, Wisma TIME, 249

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TIME dotCom Behard (413292-P)

Level 1, Wisma TIME, 249 Jalan Tun Razak, 50400 Kuala LumpurT +603 2720 8000 F +603 2720 0199 www.time.com.my

MOVING FORWARD WITH

The cover reflects the movement of TIME towards a promising future. The man moving up

the escalator represents a journey where TIME brings him into a futuristic plane offering

first class innovations in communications technology. Little beads of information speed

past him in fiber optic cables, converging in one focal point which is the borderless

world of TIME.

TIME

Our Mission & Vision 2 Notice of Annual General Meeting 3 Corporate Information 5

Corporate Profile 6 Corporate Structure 8 Group Financial Highlights 9 Chairman’s Statement 10

Managing Director’s Statement 14 Operations Review 20 Profile of Board of Directors 28

Attendance of Directors at Board of Directors’ Meetings 33 Profile of Senior Management 34

Corporate Events 38 Corporate Governance Statement 42 Additional Compliance Statement 51

Audit Committee Report 52 Statement of Internal Control 56 Financial Statements 59

Stockholding Analysis 95 List of Properties 97 Group Corporate Directory 101 Proxy Form 103

CONTENTS

• To contribute towards nation development through achieving the national policy objectives for the communications and multimedia industry • To deliver supreme customer experience • To optimise shareholders’ value • To grow and nurture talent; and be the employer of choice • To be the partner of choice • To be an opinion leader

Our Mission

To be Malaysia’s preferred communications solutions provider

Our Vision

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Tenth Annual General Meeting of the Company will be held at Grand Ballroom 1, Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 7 June 2007 at 10.30 a.m. for the purpose of transacting the following businesses:

Resolution 1

Resolution 2Resolution 3Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

Resolution 10

AGENDAOrdinary Business:

1. To receive the Audited Financial Statements for the year ended 31 December 2006 together with the Reports of the Directors and Auditors thereon.

2. To re-elect the following Directors retiring in accordance with Article 94 of the Company’s Articles of Association and being eligible, offered themselves for re-election:-

i) Abdul Kadir Md Kassim ii) Kamaludin Abdul Kadir iii) Amiruddin Abdul Aziz 3. To re-elect Dato’ Baharum Salleh who is retiring in accordance with Article 99 of the Company’s

Articles of Association and being eligible, offered himself for re-election.

4. To re-elect Dato’ Shaik Daud Md Ismail, aged 71, in accordance with Section 129(6) of the Companies Act 1965.

5. To approve the Directors’ remuneration of RM320,219.18 for the financial year ended 31 December 2006.

6. To re-appoint Messrs KPMG as Auditors and to authorise the Directors to fix their remuneration.

Special Business:

To consider and if thought fit, pass the following as Ordinary Resolutions:

7. “THAT subject always to the Companies Act 1965 and the Articles of Association of the Company, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act 1965, to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit provided that the aggregate number of shares issued pursuant to this Resolution does not exceed 10% of the issued share capital of the Company for the time being and that such authority shall continue in force until the conclusion of the next Annual General Meeting; and FURTHER THAT the Directors be and are hereby empowered to obtain the approval for the listing and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad.”

8. To transact any other business of which due notice shall have been given in accordance with the Companies Act 1965.

BY ORDER OF THE BOARD

MISNI ARYANI MUHAMAD (LS 08983)Secretary

15 May 2007Kuala Lumpur

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NOTICE OF ANNUAL GENERAL MEETING

TIME dotCom Berhad (413292-P) uu

04Explanatory Note on Special Business:

Ordinary Resolution 9

The proposed adoption of Ordinary Resolution 9 is to give flexibility to the Directors to issue and allot shares at any time without convening a general meeting, in order to avoid any delay and cost involved in convening one.

Notes:

1. A member entitled to attend and vote at the above Meeting is entitled to appoint a proxy/proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and Section 149(1)(b) of the Companies Act 1965 shall not apply to the Company.

2. The instrument of proxy shall be in writing and signed by the appointer or by his attorney and in the case of a corporation, either under its common seal or signed by its attorney or officer on behalf of the corporation.

3. A member who holds 1,000 shares or less in the Company is entitled to appoint one (1) proxy whilst a member holding more than 1,000 shares in the Company is entitled to appoint a maximum of two (2) proxies. Where a member of the Company is an authorised nominee as defined in accordance with the Securities Industry (Central Depositories) Act 1991, it may appoint 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.

4. Where a member appoints two (2) proxies, the appointments shall be invalid unless the proportion of holding to be represented by each proxy is specified.

5. The instrument appointing a proxy or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the Company’s Share Registrar’s office, Mega Corporate Services Sdn Bhd at Level 15-2, Faber Imperial Court, Jalan Sultan Ismail, 50774 Kuala Lumpur not less than forty eight (48) hours before the time for holding the meeting or adjourned meeting, or in the case of a poll not less than twenty four (24) hours before the time appointed for the taking of the poll, and in default the instrument of proxy shall not be treated as valid.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING PURSUANT TO PARAGRAPH 8.28(2) OF THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

1. Directors who are standing for re-election are: (a) Abdul Kadir Md Kassim (b) Kamaludin Abdul Kadir (c) Amiruddin Abdul Aziz (d) Dato’ Baharum Salleh (e) Dato’ Shaik Daud Md Ismail

2. Details of attendance of Directors at Board Meetings held during the financial year are set out on page 33.

Further details of Directors who are standing for re-election at the Tenth Annual General Meeting are set out on pages 28 to 32.

Corporate Information

Audit Committee

Dato’ Shaik Daud Md Ismail (Chairman)

Elakumari KantilalDato’ Ir. Abdul Rahim Abu Bakar

** Nomination Committee

Abdul Kadir Md Kassim (Chairman)

Kamaludin Abdul KadirDato’ Shaik Daud Md Ismail

** Remuneration Committee

Dato’ Ir. Abdul Rahim Abu Bakar (Chairman)

Abdul Kadir Md Kassim Kamaludin Abdul Kadir

Tender Board Committee

Dato’ Ir. Wan Muhamad Wan Ibrahim (Chairman)

Elakumari KantilalDato’ Ir. Abdul Rahim Abu Bakar

Company Secretary

Misni Aryani Muhamad (LS 08983)

Board of Directors Dato’ Ir. Wan Muhamad Wan IbrahimNon-Independent, Non-Executive Director (Chairman)

Dato’ Baharum Salleh Elakumari Kantilal Amiruddin Abdul AzizManaging Director Non-Independent, Non-Independent, Non-Executive Director Non-Executive Director

Dato’ Ir. Abdul Rahim Abu Bakar Abdul Kadir Md Kassim Azian Mohd NohIndependent, Non-Independent, Non-Independent,Non-Executive Director Non-Executive Director Non-Executive Director

Dato’ Shaik Daud Md Ismail Kamaludin Abdul Kadir Independent, Independent,Non-Executive Director Non-Executive Director

Registered Office

Level 1, Wisma TIME249 Jalan Tun Razak50400 Kuala Lumpur Tel : 603 2720 8000Fax : 603 2720 3743

Share Registrar

Mega Corporate Services Sdn Bhd Level 15-2, Faber Imperial CourtJalan Sultan Ismail50250 Kuala Lumpur.Tel : 603 2692 4271Fax : 603 2732 5399Email : [email protected]

Auditors

Messrs KPMGWisma KPMG, Jalan DungunDamansara Heights50490 Kuala Lumpur

Stock Exchange ListingMain Board of Bursa Malaysia Securities Berhadwww.time.com.my

05

** On 20 November 2006, the Board of Directors decided to merge the Nomination and Remuneration Committee and the Chairman of the new Nomination and Remuneration Committee is Dato’ Ir. Abdul Rahim Abu Bakar with the other members being Abdul Kadir Md Kassim, Dato’ Shaik Daud Md Ismail and Kamaludin Abdul Kadir.

06


Corporate ProfileTIME dotCom Berhad (TIME dotCom), Malaysia’s preferred communications solutions provider, is a public company listed on the Main Board of Bursa Malaysia.

Licensed under the Malaysian Communications and Multimedia Act 1998, TIME dotCom’s full suite of telecommunications licences has enabled the Group to operate and offer its services to both the domestic and international markets, from voice and data communications to dial-up and broadband Internet provision, payphones and multimedia solutions.

TIME dotCom’s fibre trunk network consists of over 3,600 km of terrestrial fibre-optic cable routes and over 1,600 km of submarine festoon fibre optic cable backup system with landing points around the perimeter of Peninsular Malaysia. The Metropolitan Area Network within the central business districts of major cities complements this trunk network.

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With this infrastructure in place, TIME dotCom is ideally positioned to meet the demands of emerging technologies and services such as multimedia, broadband, managed services, application service and Internet service. Voice, data and video transmissions through fibre-optics are resilient and dependable. Data is sent through at a very fast rate and with high assurance of data integrity. Two international gateway facilities augment international telecommunications access via satellite and undersea cable routes, linking businesses and private customers to each other and to the world.

TIME dotCom, through its wholly-owned subsidiary TT dotCom Sdn Bhd, was awarded a 3G spectrum licence by the Malaysian Government in 2006. It has planned to commercially launch 3G broadband services via High Speed Downlink Packet Access (HSDPA) by 2007.

TIME dotCom’s highly reliable and resilient trunk network is based on Synchronous Digital Hierarchy technology, which has a self-healing alternative route protection feature that ensures high system availability and minimal system downtime. The digital nature of TIME dotCom’s network also ensures a high level of data transmission quality, with high data security and integrity thereby allowing minimal data loss and degradation. In addition, a Network Operations Control Centre constantly monitors all network elements 24 hours a day, 7 days a week and manages TIME dotCom’s advanced network to ensure uninterrupted service and top performance.

As part of its enhancement initiatives, TIME dotCom has introduced the Metro Ethernet Backbone Network (Metro-E) project that progressively transforms its existing network into an Internet Protocol (IP)-based network. As TIME’s IP backbone infrastructure, Metro-E will continue to undergo capacity enhancements to facilitate new service requirements.

To further enhance its existing fibre infrastructure resiliency, TIME dotCom initiated the Metro Transmission Enhancement project that saw a replacement of its existing last-mile network equipment with the Next Generation Synchronous Digital Hierarchy (SDH) equipment, as well as the introduction of a dual connections concept to reduce dependency on one single hub.

TIME dotCom continually develops new products that fulfil its customers’ needs as well as devise new ways to effectively communicate and market these products to potential customers.

One of TIME dotCom’s missions is to deliver supreme customer experience. To drive this mission, significant investments were made to establish a state-of-the-art, 24-hour call centre that consolidates calls from all customers nationwide, including those subscribing and utilising TIME dotCom’s fixed line, broadband and Internet, as well as payphone products and services.

Through this shared resources capability, TIME dotCom is able to provide its customers with greater convenience by minimising waiting time, thus ensuring that customers’ needs are fulfilled as quickly and effectively as possible. In addition, TIME dotCom’s qualified and dedicated technical experts are stationed throughout the country, ready to attend to problem resolution and assist the customers in any possible way.

Superior technology combined with superior customer service is what distinguishes TIME dotCom as a leading Business Communications Specialist in the industry. TIME dotCom’s skilled and professional Account Management teams are always ready to offer expert advice to create cost-effective solutions that meet the customers’ communications needs.

Company Name : TIME dotCom BerhadIndustry : Communications SolutionsShare Listing : Main Board, Bursa Malaysia (since 2001)

Location : Level 1, Wisma TIME(Head Office) 249 Jalan Tun Razak 50400 Kuala Lumpur MalaysiaTelephone : +60-3-27208000Facsimile : +60-3-27200199

Products & Services:

Business Segment• Managed Services• Corporate/Government Solutions• Wholesale & Carrier Services• Fixed Line Services (Voice)• Fixed Line Services (Data)• Broadband• Internet

Consumer Segment• Fixed Line Services (Voice)• Internet• Broadband• Payphone

For Inquiries

Telephone : +6-03-27305287Facsimile : +6-03-27209006

E-mail : [email protected] : www.time.com.my

Corporate Profile

Corporate Structure


08

100%TIME dotCom BerhadInvestment holding, provision of management and marketing /

promotional services and retailing of telecommunications products

TT dotCom Sdn Bhd

Provision of voice, data, video and image communication

services through domestic and international networks

TIME dotNet Berhad

Provision and marketingof Internet services

TIME Reach Sdn Bhd

Provision of publicpayphone services

TIMESat Sdn Bhd

Provision of telecommunication facilities and services using

satellite and microwave(currently dormant)

100%

100%

100%

Group Financial Highlights

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In RM’000 2002 2003 2004 2005 2006

Revenue 915,555 798,581 578,376 459,927 335,395

Profit/(Loss) Before Tax (662,079) 7,948 (831,905) (237,926) (177,076)

Profit/(Loss) After Tax (662,574) 7,794 (833,241) (238,898) (177,782)

Total Shareholders’ Equity 5,030,079 3,772,486 2,559,629 2,320,731 2,142,949

Total Assets 5,552,880 4,030,693 2,773,787 2,491,786 2,285,105

Net Tangible Assets per Share (RM) 1.59 1.24 0.76 0.68 0.61

Net Assets per Share (RM) 1.99 1.49 1.01 0.92 0.85

Revenue (in RM ‘000)

335,395

459,927

578,376

798,581

915,555

2006

2005

2004

2003

2002

u u

u u

u u

u u

u u

Profit/(Loss) Before Tax (in RM ‘000)

(177,076)

7,948

(662,079)

2006

2005

2004

2003

2002

u u

u u

(237,926)

u u

(831,905)

u u

u u

Profit/(Loss) After Tax (in RM ‘000)

(177,782)

7,794

(662,574)

2006

2005

2004

2003

2002

u u

u u

(238,898)

u u

(833,241)

u u

u u

Total Shareholders’ Equity (in RM ‘000)

5,030,079

2006

2005

2004

2003

2002

2,142,949

3,772,486

u u

2,320,731u u

2,559,629u u

u u

u u

Total Assets (in RM ‘000)

5,552,880

2006

2005

2004

2003

2002

2,285,105

4,030,693

u u

2,491,786u u

2,773,787u u

u u

u u

Net Tangible Assets per Share (RM)

1.59

2006

2005

2004

2003

2002

0.61u u

0.68u u

0.76u u

1.24u u

u u

Net Assets per Share (RM)

0.85

0.92

1.01

1.49

1.99

2006

2005

2004

2003

2002

u u

u u

u u

u u

u u


10

Chairman’sStatement

Dear Shareholders

On behalf of the Board of Directors, I hereby present the Annual Report and Audited Financial Statements for the financial year ended 31 December 2006.

“We remain upbeat and confident that the Group is poised to grow to the next level to become a leader in the information and communications technology (ICT) industry and in turn deliver positive financial results.”

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Overview

The year under review saw the national economy improved moderately with a GDP growth of 5.9 per cent. Business-wise, TIME dotCom Berhad continued to operate in an extremely competitive and challenging environment, marked by price competition and issues related to deployment of services at the last mile. These factors cumulatively exerted pressure on the results of the Group.

However, we remain upbeat and confident that the Group is poised to grow to the next level to become a leader in the information and communications technology (ICT) industry and in turn deliver positive financial results. The year also saw the Group being awarded the third generation (3G) IMT-2000 UMTS spectrum by the Malaysian Communications and Multimedia Commission (MCMC) for the period from 2006 until 2018 and this provides TIME dotCom the opportunity to capitalise on the growth potential in the broadband and Internet segments of the communications industry.

Strategy Going Forward

We would like to underscore the fact that the Group is now poised to move forward and deliver value to its stakeholders as it has a ready and available system to support its strategy going forward. We see three factors that are, and will be, crucial to the Group’s turnaround to profitability. These are:

Our People

The commitment and dedication of our people must be commended as they have continued to drive the Group’s business despite the absence of a Managing Director for a year. Whilst this is a testimony of the strength of our people, the new management team led by Dato’ Baharum Salleh has brought about a sense of confidence and renewed direction, not only to our people but to our stakeholders as well. Under the new leadership, the management team is stronger and has the right mindset, the right attitude as well as the right strategies to turn around the Group. These qualities of the Group’s leadership will set the tone and direction for TIME dotCom to achieve its mission. Our second and third echelon leaders have begun to emulate the top management and in time this sense of purpose and direction will permeate throughout the organisation and put us in a stronger position to carry out our business.

The initiatives rolled out by the new management team have begun to bear fruit. Our people are now ready to transform themselves and the Group into a more IT-savvy solutions provider.

Dear Shareholders

On behalf of the Board of Directors, I hereby present the Annual Report and Audited Financial Statements for the financial year ended 31 December 2006.

Chairman’s Statement


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Our Network infrastructure

Our integrated network infrastructure is one of the strengths of the Group, with over 3,600 km of land-based and 1,600 km of submarine fibre optic cables running along the major highways and coastlines of the Peninsula. The network can deliver a full range of voice telephony and data services to meet our customers’ application requirements. On-going investments in upgrading the network will ensure that the network stays reliable against any major outage affecting connectivity. By continuing to invest in a single integrated network, we will achieve greater efficiency, tremendous savings and provide greater flexibility to customers.Technology

We have embarked on a network optimisation project to upgrade the existing network to an IP-based network which is expected to be completed by the third quarter of 2007. With the enhanced network, we will be able to introduce new broadband services like managed security services, video streaming, hosted communications and content services such as gaming and IPTV more efficiently and cost effectively. Our 3G network, once completed, will improve the last mile connectivity of our services.

Financial Performance

During the year under review, the Group was able to reduce losses (loss before tax) significantly from RM237.9 million in financial year 2005 to RM177.1 million in the current financial year. This is a reduction of almost 26 per cent on a year-on-year basis.

Chairman’s Statement

13

The significant performance improvement was a result of the Group’s perseverance and persistence in improving productivity while at the same time managing cost effectively. The next step, of course, is to drive profitability for the Group.

Revenue, however, continued to decline to RM335.4 million as a result of competitive pricing structure in both retail and wholesale businesses. The Group recognises this and has rolled out programmes to push sales by improving the skills and understanding of products and services by our workforce. Our strength and leadership in serving corporate and business customers must now be translated to include retail customers in order for us to grow our base.

Changes to the Board and Management

On behalf of the Board of Directors, it gives me great pleasure to welcome Dato’ Baharum Salleh to the Board. He joined us on 1 January 2007 as Managing Director.The Board is of the opinion that Dato’ Baharum is the right candidate to steer TIME dotCom to the next level as he brings with him an impeccable 28 years of track record in the telecommunications industry. His leadership and strength in the industry will ensure that our people will be passionate about our business and focus on delivering quality products and services to customers. In this regard the Board is supportive of Dato’ Baharum in his efforts to transform the organisation into a more responsive and proactive one. We are sure that these changes will be for the benefit of the Group.

The new Management has made some changes to the organisation structure in tandem with the Group’s business plan moving forward.

Dividends

The Board of Directors does not recommend any payment of dividends for the financial year ended 31 December 2006.

Corporate Social Responsibility

During the year under review, TIME dotCom continued to play a catalytic role in supporting the national development agenda, particularly in the areas of bridging the digital divide amongst Malaysians. The Group is committed to educate and increase the awareness levels of Malaysians on the use of the Internet as a tool for learning and communication.

In line with the guidelines set in Khazanah Nasional’s Silver Book, the Group also continued to support charitable and welfare organisations under its corporate social responsibility (CSR) initiatives. Its flagship programme was the “Inspiring Hope” project, an initiative undertaken in collaboration with the Yayasan Harapan Kanak-kanak Malaysia.

Under the project, TIME dotCom established an information and communications technology (ICT) centre for Rumah Titian Kaseh in Kuala Lumpur and initiated a programme to teach the children basic ICT knowledge and skills.

The ICT coaches and mentors were made up of volunteers amongst the staff of the Group.

In addition, the Group also extended its support to organisations such as Hospis Malaysia, Rumah Silaturrahim Nurul Qanaah, Pusat Tahfiz Darul Furqan and Rumah Kebajikan Asy-Syakur during the year under review.Outlook and Prospects

Going forward, the demand for data services such as broadband and Internet is expected to grow steadily. The network optimisation, once completed, will place TIME dotCom in a better position to compete in the market as well as meet the aspirations to be the champion of data services and business solutions.

The target set by the Government through our National Mission (Misi Nasional) and the Ninth Malaysia Plan (9MP) to transform Malaysia into a knowledge-based economy presents great growth opportunities for TIME dotCom.

Some of the areas identified by the Government include strengthening Malaysia’s position as a global ICT and multimedia hub, stimulating the growth of new ICT sectors such as bio-informatics, biotechnology, digital content and animation as well as making e-learning a part of Malaysian learning culture are in line with the business objectives of the group.

As such, the Group is of the opinion that it has the required capabilities to play a significant role in helping the Government and the nation achieve these strategic goals.

Acknowledgement

I would like to take this opportunity to thank our Board of Directors, the Management and staff for their commitment and dedication to the Group during the past year.

With a new management team in place, I would like to urge all stakeholders to trust and support the team led by Dato’ Baharum. His professional experience and drive to succeed will help ensure that the Group delivers its strategic goals in the year ahead.

The goal to transform ourselves to be more market driven and profitable will fall back on our ability to ensure timely provisioning of our services, backed by good customer service and competitive pricing. We can only do all these by working together as a team.

I must also thank our customers, shareholders, investors and business partners for their commitment towards the Group.

TIME dotCom is confident that it is well-placed to remain a major player in the communications industry. The Group will succeed in delivering shareholders’ value over the long term.

Dato’ Ir Wan Muhamad Wan IbrahimChairman


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“We must shift our paradigm of doing business from being a company that sells access to one that focuses on delivering business solutions, especially vertical solutions… We need to move a step up to become an organisation that is customer-centric and focus our energy and resources at developing new and innovative solutions for customers. ”

ManagingDirector’s

StatementOverview

The year 2006 was a watershed for TIME dotCom Berhad (TIME dotCom). While the Group’s financial performance for the year could be better, a number of initiatives pertaining to human capital improvements, product offering and customer service excellence have been put in place. These initiatives would certainly put the Group in a stronger position for a turnaround in performance in the years ahead.

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Moving forward, TIME dotCom is well placed to become the service provider of choice and a key enabler of growth for the communications industry. We are already a leader in providing communications solutions to the business and corporate sectors, be it Malaysian or multinational companies. Whilst we will continue to drive further growth in this segment of our business, our challenge is to take our products and service offerings to the next level, which will include business customers and the consumer market.

Importantly, we must also shift our paradigm of doing business from being a company that sells access to one that focuses on delivering business solutions, especially vertical solutions specific for sectors such as government agencies, financial, hospitality and logistics, ICT, manufacturing, SME/SMI and residential. However, we must also place importance on horizontal services such as IP telephony, unified messaging, multimedia conferencing and secured communication via IPVPN. We need to move a step up to become an organisation that is customer-centric and focus our energy and resources at developing new and innovative solutions for customers.

In this regard, the Group will be looking at growing its 3G services as part of its value proposition to customers. With 3G, TIME dotCom will be able to tap into a high-growth market especially in the data services segment. This, we believe, presents a huge potential for the Group as 3G is a viable alternative to the fixed-line broadband services. 3G will also enable the Group to offer broadband through High Speed Downlink Packet Access (HSDPA).

In line with our government’s call for Malaysian companies to globalise their operations, TIME dotCom will be targeting to extend its services to facilitate the Group’s customers who are operating overseas as part of its strategy to grow TIME dotCom’s customer base.

Looking at the way forward, be it the external environment or within the Group, we are confident that TIME dotCom will grow and generate positive returns to shareholders in the longer term. The Group has the ingredientsto become a champion organisation!

Financial Performance

The Malaysian economy grew moderately at 5.9 per cent in 2006, despite the impact of higher oil prices. The challenging external environment due to the changes in the industry landscape continues to impact the performance of the Group.

Against such backdrop, the Group continued to operate in an increasingly competitive environment, resulting in the Group posting lower revenue of RM335.4 million, compared to RM459.9 million a year earlier. The decline is attributable to the lower revenue from payphone and voice.However, pre-tax loss fell significantly to RM177.1 million from RM237.9 million in 2005. The improvement was a result of lower cost of sales and operating expenditure, a testimony to the successful cost management measures instituted Group-wide.

The significant improvement in reducing our losses also signifies that we are on the right track in delivering positive results in the near future. The Board of Directors and Management have now rolled out a number of strategic imperatives which will centre on improving productivity and financial performance. We expect to build on these strategic imperatives for us to move forward and become a credible and long-term player in the local and regional communications industries.

Our financial goal now is to ensure that we turn around the Group by 2007 and start delivering profits in 2009.

Key Operational Highlights

Third Generation (3G) IMT-2000 UMTS Spectrum

In 2006, the Group, through its wholly owned subsidiary, TT dotcom Sdn Bhd, was awarded the 3G spectrum by the Malaysian Communications and Multimedia Commission (MCMC) for the period from 2006 until 2018. The preliminary award was made in March 2006 while

“Our financial goal nowis to ensure that we turn around the

Group by 2007 andstart delivering profits in 2009.”


16

the confirmation, after submission of a detailed business plan to the MCMC, was received in November together with a mobile number prefix of “010”. In this regard, we must thank the regulators for their confidence in TIME dotCom’s 3G business plan.

Setting up of a Division to focus on Managed Services

As the preferred communications solutions provider offering a complete and comprehensive range of services, TIME dotCom needs to evolve its business offering to cater to the changing needs of customers. One new growth area the Group has identified is managed services as this segment of the business has grown steadily at an average growth rate of 18 per cent per annum. Global telecommunication research firm, IDC, has forecasted that the Malaysian managed services business would grow over the next five year to reach RM2.27 billion in value from RM1.54 billion in 2006.

Recognising the potential of this market, the Group set up the Managed Services Division in 2006 to offer total “network business solutions”. The range of solutions and services offered include managed connectivity, managed communications and professional services. The end-goal is to make OMNii, the brand name used to market this service, a total end-to-end network solutions provider. TIME dotCom’s OMNii was developed to ensure that the Group is well positioned as a one-stop centre for communications solutions so that customers need not look out for other vendors to support their communications needs.

Development on the Regulatory front

A significant development occurred on the regulatory front on 15 February 2006 when the MCMC issued a new Mandatory Standard on Access Pricing (MSAP). The new MSAP will benefit the Group as it will increase TIME dotCom’s revenue from interconnect charges.

Meanwhile, the Group also successfully completed its access agreements with all major telecommunications service providers in Malaysia before the deadline of 31 May 2006 set by the MCMC. The access agreements contained the terms and conditions of access to network

facilities or services of a licensed operator. They must also comply with the Commission Determination on the Mandatory Standard on Access which includes timeframe and procedures for negotiations, provision of facilities and technical requirements. The agreements were part of the Access Regime to promote effective competition and to ensure equitable and non-discriminatory access arrangements.

The Strategy Going Forward

We have no doubts that there is great potential for TIME dotCom as we have what it takes to succeed. Our network capability consists well over 3,600km routes of terrestrial fibre-optic cable and over 1,600 km routes of submarine festoon fibre-optic cable backup system with landing points around the perimeter of Peninsular Malaysia.

Nevertheless, the infrastructure that we have is only the hardware part of our business. Turning around the organisation will require a more holistic approach as we will need to look into the fundamental issues of the Group. To address such core areas, we must look at ourselves from the most basic level. The Board and Management have identified three key strategic imperatives for us to move forward:

Improving People Performance

The team within the Group has a very challenging task ahead as we need to turn around TIME dotCom in a short time frame. Without a strong, innovative and “never say die” attitude in our people, it will not be possible for the Group to leap to the next level. For this reason, the Board of Directors had approved a new organisation structure for the Group in January 2007. The move was part of a strategy to realign our people to our business, making our people more productive and responsive to the market dynamics.

Developing leadership and talents within the organisation will be a key objective as the Group believes that it needs to cultivate leaders to lead and earn the respect of their colleagues and peers. The mindset and attitude of leaders and team members must be in line with the

Managing Director’s Statement

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strategic end-goals of the Group. They must possess a passion for our business, think strategically on how we could do better in selling, marketing and innovating our products and services and importantly, lead our people by example. In return, star performers will be recognised and their growth within TIME dotCom will be fast-tracked via the new TIME Talent Pool Programme.

In addition, other key organisation and management development initiatives that we have further improved and enhanced include the Performance Management System, which underscores the objectivity of performance assessments within our teams. Mandatory Key Performance Indicators were also set for the different levels of employees to ensure that our people are driven by performance and results.

Meanwhile, to further streamline our work force, the Group also offered a Voluntary Separation Scheme (VSS) to 262 employees for the year under review.

The above-mentioned initiatives are merely part of our people improvement plans. We will be from time to time, roll-out programmes to improve our productivity as well as reward our performers. The Group does recognise how crucial it is for us to pull the team together to synergise team efforts for our business. Ultimately, we must build an environment within TIME dotCom that focuses on harnessing creativity and promoting innovation amongst our people. Our people must creatively sell and market the right products and services to our customers while at the same time innovate new solutions for businesses and customers. Only through such concrete actions, which are carried out in a collective and concerted manner, can we carve out a competitive edge for the Group.

Becoming Customer-centric

As mentioned earlier, we need to change the way we look at our business. We must move beyond selling access to one that focuses on delivering communication solutions to our customers. If we are seen as the preferred solutions provider, TIME dotCom will certainly be able to grow its revenue stream and create a niche of its own within the communications industry.

In this regard, we need to revamp our processes to ensure that our people and systems respond fast enough to market needs. We need an operating environment within the Group that helps sharpen our customer focus and improve our competitiveness. One key aspect is that we now manage our relationships via the key account management approach. This segmented approach into how we sell and maintain relations with our customers is to ensure that we are close enough to understand our customers. Only through such holistic and focused approach to managing customer relationships, supported by speedy implementation of our business plans, can we harness greater levels of efficiency in our approach to becoming customer-centric.

In other words, TIME dotCom needs to listen to the needs of our customers and start offering new innovations that will cater to the needs of these customers. One example is our plan to offer our multinational clients broadband speeds of up to 100Mbps through our Metro Ethernet Backbone Network (Metro-E) project. We could also extend our broadband reach to homes via our fibre and 3G services. All these present great market potentials to us and they are part of our desire to deliver superior services to customers.

Understanding the needs of customers is one key priority but we must also not forget about the basics of being customer-centric. The Quality of Service (QoS) is imperative in creating delight for our customers, which the Group must at all times enhance to ensure that customers remain loyal to us. Only through such positive experiences, customers will perceive TIME dotCom as a reliable and trusted service provider. TIME dotCom is in the business of providing a service. If we cannot deliver high QoS, we will not go far.

As such, for the year under review, we have further improved on our customer relationship management programmes. Our target is to retain high-value customers and deepen our relationships with these customers as part of our initiative to enhance our service offerings to them.

In addition, we are revamping the monitoring system within our network by introducing the Service Operation Centre (SOC) as part of our mechanism to check and maintain our network integrity. We will use our SOC, which is the best in class standards to monitor the entire system.

Staff members will continue to be reminded about the importance of our QoS and it has now become part of TIME dotCom’s culture to ensure that customers only receive service of the highest standard from us. We will need to encourage open communication with our




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customers in order to gather feedback as well. Customer feedback will be an integral part of our efforts to continuously improve service levels.

Optimising Resources

We continue to focus on our core network as part of our business plan to revamp, improve and optimise our infrastructure. We had in the year under review, embarked on a major exercise to upgrade our infrastructure. This strategic exercise covers areas such as:

• Next Generation Networks (NGN)• Multi-Protocol Label Switching (MPLS) core network• Fixed and Wireless Access• Network Management Systems• Other service applications

The above-mentioned upgrades are to enable TIME dotCom to further enhance its existing solutions offering including voice, leased lines, broadband services, Managed Virtual Private Network (MVPN) and caters to the convergence of fixed and mobile services. Moreover, the network optimisation plan will ensure that TIME dotCom’s existing infrastructure will be able to support new services that are brought about by newer technologies and customer demands in the future.

This means the Group will have the necessary support system to introduce and manage new Internet Protocol (IP) based services such as managed applications, hosted applications and value added services including Voice Over Internet Protocol (VOIP), Voice Over Broadband (VOBB), content services, security, storage, video streaming and IPTV.

The upgraded Network Operation Centre with its experienced team working round the clock is to ensure that we provide proactive monitoring, management and trouble resolution for our customers’ network.

These improvements are crucial for the Group as they will open up new and higher revenue streams for the Group. They are also important for the Group in response to market needs as there is now a high demand for bandwidth intensive applications, especially from business customers.

Corporate Social Responsibility (CSR)

As a socially responsible corporate citizen, TIME dotCom will continue to pursue its CSR initiatives in line with Malaysia’s development agenda and in accordance with the guidelines set in Khazanah Nasional’s Silver Book.

We are very clear about our CSR objectives as we believe CSR will help us achieve value for our stakeholders through social responsibility. The priorities for TIME dotCom’s CSR initiatives will be those that are aimed at improving the socio-economic environment of Malaysia, particularly in the areas of Education and Nation Building.

Some examples would be our initiative to bridge the digital divide by supporting our government’s aspiration to increase broadband penetration including those in the rural areas. We will deploy this through the use of satellite as part of our obligations under the Universal Service Provision (USP). In addition, we will also be rolling out IPTV to homes, first in Mont Kiara and subsequently in Nusajaya.

In June 2006, the Group, jointly with the MCMC, successfully launched the National Project of Universal Service Provision (USP) that marked the completion of the first phase of the USP project in Sabah. TIME dotCom undertook the USP implementation for 14 out of the 22 districts in the State, providing basic communications facilities to areas lacking in communications coverage.


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The above-mentioned CSR initiatives represent the Group’s commitment to be part of Malaysia’s nation building process. We will continue to invest our resources and manpower to support the government’s initiatives in this area.

On the community front, we will continue to support charitable activities and organisations that help the less fortunate. The Group believes that all citizens of Malaysia deserve to benefit from the fruits of the country’s economic well being.

Internally, we will be promoting ethnic diversity amongst our work force. As we celebrate our 50th year of nationhood, we want TIME dotCom to be a reflection of what it means to be Malaysian. It is through our diversity that Malaysia is able to transform itself to become a progressive nation today. Similarly, TIME dotCom aspires to grow along with its multi-racial workforce.

Outlook and Prospects

Expanding our revenue stream, improving productivity and innovating new business solutions for our customers, will be the key priorities for TIME dotCom in the year ahead. This is in line with our commitment to turn around the business in the coming year and return to profitability by 2009.

To achieve this, the Group has identified and put in place the strategies and people to drive the business forward. Without a doubt, we are confident that we can deliver this promise as TIME dotCom is in an industry that has tremendous growth potential. There is also a great opportunity for the Group to capture a bigger portion of the industry’s revenue. Key growth areas are in the data, broadband and Internet segments, but content application is another driver of growth which TIME dotCom will need to venture into. The content market is a segment of the business that is not yet tapped and we intend to build a presence here.

While the road ahead is full of excitement and opportunities, the Group must constantly ensure that it focuses on the right market to maximise its growth potential and move on to the next level.

We need to get into a bigger scope of the market, improving our penetration and catchment areas which are currently only at 3 per cent. This is a reflection of the poor reach we have at this point, which we must address immediately.

Moving forward, we expect to get 10 per cent of the market share as part of our turnaround strategy and we intend to make our debut in the Indonesian and Thai market in the medium term. In the markets we operate, we want to be the carriers’ carrier of choice because the Group has the backhaul and experience in building connectivity.

TIME dotCom has been and will continue to be a major player and key enabler of the growth of the communications industry. The strategies and business plans are already in place for the Group to help it grow and be a catalyst to spur the development of Malaysia’s economy to one that is knowledge-based.

Acknowledgement

Our journey ahead to turn around the Group will require the commitment and support of our key stakeholders. The Board of Directors, shareholders, Management, staff, customers and business partners all have a role to play.

On behalf of the Management, I would like to take this opportunity to record our sincere appreciation and gratitude to our stakeholders for continuing to believe in the Group.

Most importantly, I must thank the staff of TIME dotCom for supporting the management team. As we steer the Group back to profitability, it will be a great test of our commitment, perseverance and team spirit. We will need to go beyond our best and work together as a team to make TIME dotCom a profitable, respected and successful player in the communications industry, and the service provider of choice.

Dato’ Baharum SallehManaging Director


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TIME dotCom has initiated various initiatives during the year which focused on our customers and prepared us for the future.

OperationsReview

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Overview

During the year under review ended 31 December 2006, TIME dotCom was operating within an industry of rapid technology evolvement, where convergence and new standards were imminent.

Simultaneously, with the Government’s aspirations to bridge the digital gap and to embrace knowledge economy, the Ministry of Energy, Water & Communications has further introduced policies which intensified competition within the industry.

Against this backdrop, TIME dotCom has initiated various initiatives during the year which focused on our customers and prepared us for the future. These initiatives were:

• Introducing packages which are tailored to customers’ needs. In conjunction with this, TIME dotCom has built up resources to support Managed Services offerings

• Continued with the programme to migrate our network to an IP based network

• Initiated Customer Relationship Management programmes to enable us to understand customer needs and ensure that customers are satisfied with our services

• Continued to strengthen our internal processes and resources to enable quick and cost efficient delivery of services

• Investing in our people to equip them to manage and meet complex customers’ requirements and able to operate our next generation network efficiently

The services offered by TIME dotCom are as follows:

• Fixed line, broadband and internet services which includes voice and data whether directly or indirectly accessed by the customers

• Managed Services• International and Wholesale Services• Payphone Services

Direct Access

Direct Access deals with products that have to be physically built into a customer’s premises and covers both voice and data services.

In 2006, the total revenue for direct access voice products TIME TONE and TIME PABX Link was RM85.2 million, 8 per cent lower than the revenue for 2005. Reasons for the reduction were stiff competition from other operators, cost-cutting measures by the customers themselves; either by canceling the lines and/or reducing usage, and migration of customers’ demand from analog voice products to digital voice products.

Therefore, in line with this change in customer needs, the revenue for TIME’s digital voice product, TIME ISDN service, recorded a growth in revenue with a sum total of RM41.1 million in 2006, 9.3 per cent higher than 2005.

As for TIME-1800, TIME-1300 and TIME International Freephone services, the revenue for 2006 recorded a reduction of 35 per cent from 2005 due to lower prices offered by the incumbent operator.

Though the revenue for Direct Access voice declined in 2006, it was still the major revenue earner for TIME dotcom as it contributed to 26.1 per cent of TIME dotCom’s total net revenue in 2006.

As such, strategies were implemented in 2006 to win over our customers’ usage and persuade them to use TIME dotCom’s direct voice services, defending the current revenue flow and to gain more high usage customers by introducing attractive packages that meet customer demand.

In the area of data services, TIME dotCom has maintained high revenues by riding on the growing demand for high quality leased lines and the introduction of bundled packages for the business market. In 2006, net revenue for Domestic Leased Lines was RM19.1 million while for International Private Leased Circuit (IPLC) the revenue for 2006 was RM2.4 million.

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Indirect Access

Indirect Access covers products that do not require the building in of infrastructure. Stiff competition from other operators, especially mobile operators offering low prices for STD and IDD call charges, has inadvertently affected the revenue of indirect access voice products namely TIME World Access, TIME Gold and TIME Kontact Card services. Prepaid voice service was also affected badly as the margin for International Direct Dialing calls (IDD) diminishes as mobile operators further reduced IDD rates. As a result, TIME Kontact Card recorded revenue of RM700,000, a reduction of 88.5 per cent from 2005.

In 2006, TIME dotCom worked together with Real Rewards to introduce loyalty points primarily targeted to TIME Gold customers, to entice TIME Gold customers to not only increase usage of TIME Gold service but at the same time letting TIME Gold customers to be entitled to Real Rewards points for calls made using TIME Gold service. The Real Reward loyalty points have not only managed to add product attractiveness but create product differentiation to TIME Gold’s services.

On a positive note, TIME World Access, an account based post-paid voice service for corporate customers continues to record growth in revenue despite strong competition from the incumbent operator and other Voice Over Internet Protocol (VoIP) operators. TIME World Access recorded revenue of RM2.22 million in 2006, a 12 per cent increase from 2005. The increase in TIME World Access revenue was a result of the actions taken to improve on the quality of service and competitive packages offered.

Broadband and Internet

A considerable amount of effort was spent in 2006 to optimise the existing IP network. Despite tough competition, TIME dotCom managed to increase sales and revenue streams for snternet-based services.

In order to achieve a quantum improvement in communication solutions, TIME dotCom will forge ahead with the next generation access platform that leverages on a fully IP infrastructure (Metro Ethernet Network and Fixed Wireless Access (FWA)) to provide high speed data, Internet, and advanced converged services to its customers.

Metro Ethernet is an ideal solution to accelerate the convergence of voice, data and video services onto a single network infrastructure, thus enabling TIME to launch high speed services e.g. data and internet service up to 100Mbps per connection as well as to differentiate its product offering by delivering multiple services (e.g. Managed Services, Managed VoIP (IP PBX), Broadband on Demand, etc.) on a single interface (FE). Essentially, TIME’s vision is to capitalise on Metro Ethernet’s platform to deliver the next generation of IP services to cater to the needs of small-medium size industries / companies as well as corporations/multinational companies.

In addressing the last mile issue as well as the sharp increase in demand for high speed Internet services in the Malaysian market, TIME dotCom will leverage on Fixed Wireless Access technology as an alternative solution to overcome the traditional physical last mile limitation experience of xDSL. TIME dotCom will also be deploying FWA services in high-density areas to deliver high quality IP services to these places.

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SOLARA

Solara, another brand of telecommunications business solutions, offers a wide variety of business solutions to meet the needs of organisations of all sizes including the Government sector, SMIs/SMEs and SoHo set-ups. This includes 9 Elite packages and 3 Premier packages to match any business requirement and maximise returns on investment.

Solara packages offer clients great value in terms of cost-efficiency and the capacity to upgrade in future as their needs increase. Added value benefits such as free banner ads, SLP units, horizontal cabling and LINKYS Access Point, additional 100 DID numbers, Flexi 4 Call Plan and managed firewall package positions Solara as a value-for-money business solution for SMEs, SMIs and Governmental agencies alike.

INTERNATIONAL WHOLESALE BUSINESSFor the year under review, International Wholesale Business was focused towards the acquisition of new sales and retention of loyal customers. This was further enhanced by the shift towards data services and a deliberate cutback in voice services.

A key success in the expansion of international business in 2006 was the growth of data business into Thailand, the up and coming market in the region as it gears towards liberalisation. This achievement has generated a significant upturn in sales, which required an extensive network upgrade.

On the domestic wholesale front, data sales have been focused on increasing the penetration of existing customer base. In collaboration with our international partners, there has been marked improvement in market-driven pricing and better delivery time, contributing to additional sales from local customers.

For voice services, the focus is on supporting organic traffic from TIME dotCom subscriber base. Additionally, with the finalisation of the Access Agreement in early 2006, TIME dotCom’s offering of home-based termination has increased and resulted in limited competitive offerings.

PAYPHONE SERVICES

Through TIME Reach Sdn Bhd (TIME Reach), Time dotCom operates an extensive network of about 30,000 payphones at strategic locations nation wide. During the financial year ended 31 December 2006, TIME Reach posted revenue of RM110.8 million compared to RM168.0 million in 2005. The lower revenue registered is mainly due to aggressive promotions and cheaper packages offered by mobile operators which has drawn away potential or loyal payphone users.

With the drop in revenue by RM57.2 million, TIME Reach registered a loss before tax of only RM6.9 million. The losses were mitigated by various initiatives including stringent cost control efforts and the downward revision of interconnect cost averaging 5 per cent as a result of negotiations with TM Wholesale Sdn Bhd.

MOVINGFORWARD WITH

TIME

Operations Review

Operations Review


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The major challenge faced by TIME Reach will continue to be cheaper call rates offered by other mobile operators and prepaid call cards. At the same time, the emergence of new payphone players in the market will result in stiffer competition in the market.

Despite the above, TIME Reach will strive to increase its revenue collections by improving service levels and deployment of payphones to high traffic locations. It will also be looking into introducing new services or enhancing existing services via payphones.

In addition, TIME Reach will pursue more cost-effective ways to manage the daily operations of its payphone business and seek to reduce the interconnect cost further because this cost is significant, representing about 52 per cent of our revenue in 2006.

3G

Following a highly competitive bidding process, TIME dotCom was successfully awarded the 3G spectrum assignment in 2006. The preliminary award was made in March, and this was confirmed in November after submission to Malaysian Communication and Multimedia Commission (MCMC) of TIME dotCom’s detailed business plan.

3G is the leading international wireless broadband technology with close to 100 million subscribers worldwide and support from the world’s major network vendors. Only two 3G networks have been built so far in Malaysia, those being Maxis and Celcom respectively.

An additional spectrum assignment was also awarded in 2006 to MiTV, a new entrant to the telecoms market. TIME dotCom believes that 3G is an excellent opportunity for the company to expand its existing services and gain share in the key areas of growth in the Malaysian telecoms market.

TIME dotCom’s vision is therefore to provide a range of innovative broadband and mobile products to customers across Malaysia. TIME dotCom will deploy a network supporting the latest 3G technology, High Speed Downlink Packet Access (HSDPA), which will provide high quality wireless broadband services together with high quality, cost efficient voice. The company will target both consumers and businesses while leveraging off existing fixed infrastructure. TIME dotCom intends to market this quickly with a very competitive proposition.

TIME dotCom is also investing internally to expand the commercial and technical teams within the organisation to support this exciting new opportunity for the Company.

MANAGED SERVICES

The managed services arm of TIME dotCom was setup in 2006 to offer a total ‘network business solution’ offering a range of solutions and services in the field of managed connectivity, managed communications, and professional services. The division initiation is to offer customers a total end-to-end network solution without having to work with multiple vendors.

Milestone of 2006

OMNii, as the service is branded, has created another revenue channel for TIME dotCom. This latest service has recorded an astounding amount of RM10 million in 2006 with just 12 customers. Although OMNii is considered a new player, the experience and strong brand of TIME dotCom has enabled OMNii to receive good acclaims and trust from customers. It is also beginning to gain the respect of competitors and they consider TIME dotCom as an upcoming provider to watch for in the market.

Portfolio of Managed Services

OMNii’s range of solutions represents the full spectrum of communications that businesses and organisations need to stay on top. Its Managed Connectivity leverages on TIME’s MPLS network (MBONE) where customer’s network of offices and staff on the move can be linked cost-effectively while optimising Internet usage.

OMNii’s Managed Communications allow a more inter-personal form of communications between branches through voice, video and messaging features.

Completing the range of solutions is the Managed Security, which provides the essential network security for companies implementing internet-based inter-networking. OMNii also offers a wide range of Data Centre services, which is supported with world-class facilities.

The Disaster Recovery services leverages on world-class Data Centre facilities not just in offering complete data protection, replication and recovery solutions, but also in providing a complete range of Business Continuity services such as risk assessment, business impact analysis, recovery strategy and crisis management.

Operations Review

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Future Plan of Managed Services

Moving forward, the division is very optimistic in achieving better results in 2007. The division strategy is to focus on the vertical markets mainly Financial Services, Public Sector and Manufacturing. The segment will be extended to cover the distribution and infrastructure services.

This segmentation strategy will enable OMNii to have better focus on resources and manpower planning to ensure only the best solution is offered to customers, thus ensuring higher success rate.

At the same time, more innovative solutions and services will be offered to customers in 2007.The revenue contribution for Managed Services for 2007 is expected to be very positive and able to contribute a substantial percentage to the total Group revenue.

NETWORK SERVICES

Network Services’ primary role is to support the market engagement team in delivering high quality services to the customers and the deployment of new service offerings to the market. Simultaneously they have to keep an eye on technology development to ensure that TIME dotCom will be able to meet future demands on its network.

Some of the initiatives implemented by Network Services are as follows:

• 22 new buildings have been wired up and 28 existing buildings upgraded to support demand for our services

• Expanded interconnection with other operators for data services, established connection with MyIX to facilitate domestic Internet connectivity

• Increased transmission capacity of STM-16 for Northern & Eastern Trunk

• Implemented various cost optimisation initiatives, which has resulted in an approximate direct cost savings of RM4.5 million per annum

• Circuit Re-Grooming project was implemented with the objective of improving the service quality for our TIME Priority Plus (TPP) customers. This exercise involved more than 500 active lines whereby the circuit designs were optimised by re-grooming them using digital cross connect equipment (ArcaDacs 100). The exercise simplified and improved fault restoration time

Integrated Transport Information System (ITIS) DBKL Projects

TIME dotCom is fortunate to be part of the Malaysian government’s plan in improving the management of Klang Valley’s transport infrastructure system known as the Structural Plan 2020. For this effort, TIME dotCom’s lease lines provided link from the CCTV Communication Cabinet back to the Transport Management Centres.

ITIS is a comprehensive traffic management system that integrates the present road transport network as well as provide a communications interface for sprawling road systems in the Klang Valley.

CUSTOMER RELATIONSHIP MANAGEMENT

In CRM, the company’s credo, “Putting our customers at the centre of everything we do”, was executed through programmes that were targeted to better understand our customers and to build a lasting relationship with them.

Loyalty Programme

The strategy in managing our customers is to focus on our top customers who contribute to 80 per cent of our revenue – the TIME Priority Plus and TIME Priority customers.

Operations Review


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Customer Service conducted its Customer Satisfaction Survey annually to measure its customers’ satisfaction on key areas, namely customer service, billing, after sales service, product and marketing. TIME dotCom uses the survey to make improvements on areas identified by customers.

INTERNAL DEVELOPMENTS

Organisation & Management Development

Many of the initiatives implemented to harness internal resources were a continuation of efforts started in 2005. The only difference was that these efforts were slightly tweaked to bring about better results.

The Performance Management System was refined further to ensure objectivity in assessing employees’ performance. Mandatory key performance indicators (KPIs) were also set for the different levels of employees. New interventions to fast-track the development of high potentials saw the introduction of The TIME Talent Pool Programme, whereas employees in strategic job families were given an Individual Development Plan to further reduce their competency gap.

Safety, Health & Security

TIME dotCom has successfully attained the OHSAS 18001:1999 certification since 2005 which it maintains to this day. With the success of OHSAS and commitment from the management and employees, a sound safety and health management system was put in place to inculcate a culture of continuous improvement and safe work practices towards enhancing the quality and productivity of business activities and keeping the work environment safe and healthy. Safety and health programmes were conducted regularly and there were periodic review of policies, rules and systems to ensure compliance with the legislative requirements and standards on occupational safety and health.

Industrial / Employee Relations

Industrial RelationsIn terms of Industrial Relations, accord was brought about by the cordial relationship between the Management and Kesatuan Pekerja-Pekerja TIME Reach. The Minister of Human Resources has also recognised the Kesatuan Pekerja-Pekerja TT dotCom.

The activities implemented for this group of customers included visits by TIME senior management to TPP customers and working level visits to the Top 400 customers. Such visits provided opportunity for TIME to get feedback on our service as well as understand the customers’ current and future needs. Our customers in turn welcome the additional contacts for better access/communication with our company.

We showed our appreciation to TPP secretaries at a Secretarial Lunch in April 2006 and gave away concert tickets to key customers for the Boney M Live concert in Istana Budaya in September.

Building our relationship with our corporate customers in the regions was also a priority. We started with an appreciation dinner for customers in Johor Bahru at the Zone Regency.

The CRM team continually keeps our customers informed of new products/services as well as what is happening at TIME dotCom through our bimonthly Newsletter to customers. Feedback received indicates that customers are appreciative of our efforts in this area.

Churn Management

The CRM team is charged with the responsibility to manage churn to an acceptable level. In 2006, churn was better managed through better analysis and reporting of churn data. The set up of the Churn Management Task Force (CMTF) further boosted the effectiveness of our churn management. The CMTF which comprises cross-function team members was tasked to look into churn-related issues in a holistic manner and to suggest improvements and make recommendations to the Steering Committee on the improvements to be implemented.

In 2006, Cancellation Management was also enhanced to include greater focus on Win-Back activities. The enhanced cancellation management coupled with rigorous win-back activities further strengthened our churn management which culminated in a reduction in overall churn in 2006 to less than 3 per cent.

CUSTOMER SERVICE EXCELLENCE

TIME dotCom is a force to reckon with in the area of Customer Service and prides itself for providing supreme customer service. As affirmation to this, all four departments in TIME dotCom’s Customer Support and Service Division achieved the full certification of ISO 9001:2000. In its continuous effort to provide customer service excellence and to improve customer loyalty, TIME dotCom established the TIME Priority Plus customer club for its top customers.

Operations Review

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Employee RelationsTo ensure cordial employee relations in the organisation, top-down communication sessions were held to explain TIME dotCom’s strategies and direction. Also put into place was a virtual ‘Idea Box’ via the Intranet that was launched in April for employees to channel their ideas/ suggestions ensuring employees had a say in the way the company was administered. An ‘Employee Climate Survey’ was also conducted to gauge employees’ perception of TIME dotCom, working conditions, benefits and various areas that are of concern to them.

Realising the need for recreational activities, several activities such as snooker tournament, weekly aerobic sessions, bowling tournaments, futsal tournaments and paintball games were held to improve cohesiveness and teamwork within the workforce.

To demonstrate a caring workforce, several charity drives were also held for the staff and public.

TIME dotCom also participated in the Malam Anugerah Kumpulan UEM. Several awards were given out in recognition of employees’ performance and contribution towards the company.

There were also a few activities undertaken during the month of Ramadan. A Majlis Berbuka Puasa was held in October for staff and children as well as the elderly from welfare homes.

On another note, 262 employees were released on Voluntary Separation Scheme (VSS) during the year.

Support services

To further strengthen the workforce of TIME dotCom and to look at different avenues of sourcing manpower, the support services team participated in a few events such as the education fair at UNIKL and UiTM, organising of the OMNI Night and holding walk-in interviews.

Administration

Administrative activities were targeted to provide a supporting role in providing logistics for the above-mentioned activities and to look into areas to reduce operating costs. These included a tender exercise to dispose of company vehicles. Major repairs were also undertaken to maintain the company’s air-conditioning system and to ensure a conducive working environment for all staff.

Profile Of Board Of Directors


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Dato’ Ir. Wan Muhamad Wan IbrahimNon-Independent, Non-Executive Director (Chairman)

Dato’ Ir. Wan Muhamad Wan Ibrahim, Malaysian, aged 66, was appointed to the Board of TIME dotCom Berhad on 26 July 2001 and as Chairman on 15 November 2001. He is also the Chairman of the 3G Tender Committee and the Tender Board Committee.

Dato’ Ir. Wan Muhamad holds a Diploma in Electrical Engineering (Light Current) from Brighton College of Technology, United Kingdom. He began his career as Assistant Controller with the then Jabatan Telekom Malaysia and served in various capacities before he was appointed to the post of Director of Telekom in 1985. Upon privatisation of Jabatan Telekom Malaysia, he joined Syarikat Telekom Malaysia Berhad (now known as Telekom Malaysia Berhad) and retired in 1996 as Senior Vice President of Marketing. Thereafter, he served as the first Chief Executive Officer of TM Touch until 1999. He has over 33 years of experience in the telecommunications industry.

He has no securities holdings in the Company and/or its subsidiaries. He also has no family relationship with any Director and/or major shareholders nor any conflict of interest with the Company.

He has not been convicted of any offence in the past 10 years.


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Dato’ Ir. Abdul Rahim Abu BakarIndependent, Non-Executive Director

Dato’ Ir. Abdul Rahim Abu Bakar, Malaysian, aged 61, was appointed to the Board of TIME dotCom Berhad on 1 April 2003. He is the Chairman of the Board Remuneration Committee and a member of the Audit Committee, Board Nomination Committee and 3G Tender Committee.

Dato’ Ir. Abdul Rahim graduated from the Brighton College of Technology, United Kingdom with B.Sc (Hon) Electrical Engineering in 1969. He is a member of the Institute of Engineers Malaysia (MIEM) and a Professional Engineer, Malaysia (P.Eng). He also holds the Electrical Engineer Certificate of Competency Grade 1.

Dato’ Ir. Abdul Rahim began his career in 1969 with the then National Electricity Board. He was attached to the organisation for 10 years in various technical and engineering positions before he moved on to the private sector. From 1979 to 1983, he served with Pernas Charter Management Sdn Bhd, a management company for the tin-mining industry. From late 1983 to 1991, he was attached to Malaysia Mining Corporation Berhad (MMC) in various senior positions. Later from 1991 to 1995, he moved on to MMC Engineering Services Sdn Bhd and subsequently to MMC Engineering Group Berhad as the Managing Director. In May 1995, he joined Petronas to assume the position of Managing Director of Petronas Gas Berhad (PGB) and subsequently moved on to Petronas as its Vice President in charge of Petrochemical Business in 1999. He retired from Petronas on 31 August 2002.

He is the Chairman of UEM Builders Berhad and sits on the Boards of UEM World Berhad, Bank Pembangunan Malaysia Berhad, Scomi Engineering Berhad, Global Maritime Ventures Berhad and BI Credit & Leasing Berhad, Westport Holdings Berhad, apart from other private companies.



Dato’ Shaik Daud Md. IsmailIndependent, Non-Executive Director

Dato’ Shaik Daud Md. Ismail, Malaysian, aged 71, was appointed to the Board of TIME dotCom Berhad on 21 June 2004. He is also the Chairman of the Audit Committee and a member of the Board Nomination Committee.

Dato’ Shaik obtained his Barrister-at-Law from Lincoln’s Inn London and was called to the English Bar in December 1962. He served in the Malaysian Government Judicial and Legal services for 38 years until his retirement on 25 June 2001. His last appointment was as a Judge of the Court of Appeal. He also sits on the Board of Formis (Malaysia) Berhad.




Elakumari KantilalNon-Independent, Non-Executive Director

Elakumari Kantilal, Malaysian, aged 50, was appointed to the Board of TIME dotCom Berhad on 8 March 2001. She is also a member of the Audit Committee, 3G Tender Committee and Tender Board Committee.

Elakumari holds a Master of Science in Finance & Accounting from University of East Anglia, United Kingdom. She started her career with the Accountant General’s Office in 1981 and later served the Division on Monitoring of Government-Owned enterprises at the Ministry of Finance from 1986 to 1994. She joined Khazanah Nasional Berhad in 1994 and is currently the Director, Investments. She also sits on the Board of TIME Engineering Berhad and Faber Group Berhad.

She has no securities holdings in the Company and/or its subsidiaries. She also has no family relationship with any Director and/or major shareholders nor any conflict of interest with the Company.

She has not been convicted of any offence in the past 10 years.


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Abdul Kadir Md KassimNon-Independent, Non-Executive Director

Abdul Kadir Md Kassim, Malaysian, aged 67, was appointed to the Board of TIME dotCom Berhad on 22 October 2001. He is also the Chairman of the Board Nomination Committee and a member of the Board Remuneration Committee.

He holds a Bachelor of Laws degree from University of Singapore. He served in the Malaysian Administrative and Diplomatic Service and in the Judicial and Legal Service between 1966 and 1973, holding various positions. He is currently the Managing Partner of Messrs Kadir, Andri & Partners. He is also a Director of UEM Group Berhad (formerly known as United Engineers Malaysia Berhad), UEM World Berhad, Suria Capital Holdings Berhad, Ho Hup Construction Company Berhad, Proton Holdings Berhad and a few private companies, including being the Chairman of the Committee of Labuan International Financial Exchange.



Kamaludin Abdul KadirIndependent, Non-Executive Director

Kamaludin Abdul Kadir, Malaysian, aged 65, was appointed to the Board of TIME dotCom Berhad on 24 October 2001. He is a member of the Board Nomination Committee, Board Remuneration Committee and 3G Tender Committee.

Kamaludin holds a Bachelor of Engineering (Elect.) degree from the University of Auckland, New Zealand. He has extensive experience in the telecommunications industry and hands-on experience in ICT systems. He was also involved in major technology matters during his service with the Ministry of Defence from 1972 to 1983. He was formerly the Executive Director of Perwira Ericsson Sdn Bhd and a nominee of Lembaga Tabung Angkatan Tentera on the Board of Ericsson (Malaysia) Sdn Bhd. He is pursuing business in the ICT industry.

He has no securities holdings in the Company and/or its subsidiaries. He also has no family relationship with any Directors and/or major shareholders nor any conflict of interest with the Company.



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Amiruddin Abdul AzizNon-Independent,, Non-Executive Director

Amiruddin Abdul Aziz, Malaysian, aged 48, was appointed to the Board of TIME dotCom Berhad on 24 March 2004. He graduated with a Bachelor of Business Administration degree from the Ohio University, USA. He has been serving the UEM Group since 1988 in various senior positions - beginning with the Head of Treasury Department in Projek Lebuhraya Utara Selatan Berhad or PLUS. In January 1994, he was appointed the General Manager of Group Corporate Affairs in HBN Management Sdn Bhd (now known as UEM Group Management Sdn Bhd).

From January 1997 to January 1999, Amiruddin was the Chief Financial Officer of Projek Usahasama Transit Ringan Automatik Sdn Bhd (PUTRA). He was later appointed the Chief Operating Officer of EPE Power Corporation Berhad (now known as Ranhill Power Berhad) from February 1999 to August 2000. At the end of his tenure with EPE, he was transferred to Renong Berhad (now known as UEM Land Sdn Bhd) as its Chief Operating Officer. Furthering his career, he was appointed Chief Operating Officer of TIME Engineering Berhad on 18 November 2001, before being appointed Managing Director in April 2003.

Amiruddin currently sits on the Boards of TIME Engineering Berhad and Ranhill Power Berhad and several other private limited companies.




Azian Mohd NohNon-Independent, Non-Executive Director

Azian Mohd Noh, Malaysian, aged 54, was appointed to the Board of TIME dotCom Berhad on 29 March 2006. Prior to her appointment as a Director, she was an alternate Director to Dato’ Mohd Salleh Mahmud, who has since resigned from the Company. She is a graduate of Universiti Malaya with Bachelor of Economics and Advanced Diploma in Accounting and has a Master in Business Administration from Universiti Kebangsaan Malaysia. She is also a member of the Malaysian Institute of Accountants.

Azian started her career as a Treasury Accountant and served at the Accountant General’s Department and Ministry of Public Enterprise between 1980 to 1982. She has held several senior positions at the Accountant General’s Office prior to her appointment as Director of Kumpulan Wang Amanah Pencen (KWAP) in 1991. On 1 March 2007, Azian was appointed as the first Chief Executive Officer of Kumpulan Wang Persaraan Diperbadankan (Retirement Fund Incorporated), a newly incorporated statutory body.

Azian also sits on the Board of Rashid Hussain Berhad and Valuecap Sdn Bhd and is a member of the Investment Committee of Valuecap Sdn Bhd.

She has no securities holdings in the Company and/or its subsidiaries. She also has no family relationship with any Directors and/or major shareholders nor any conflict of interest with the Company.

She has not been convicted of any offence in the past 10 years.32


Dato’ Baharum Salleh Managing Director

Dato’ Baharum Salleh, Malaysian, aged 52, was appointed as Managing Director of TIME dotcom Berhad on 1 January 2007. He holds a degree in Electronics Engineering from University of Bath, United Kingdom and a Master in Business Administration from University of Leicester, United Kingdom.

Dato’ Baharum began his career in 1978 as Assistant Controller in the then Jabatan Telekom Malaysia, Melaka. This was followed by various other postings throughout Malaysia. In 1996, he served as the Head of Corporate Strategy of Telekom Malaysia Berhad before his appointment as the first Chief Executive Officer of TM Net Sdn Bhd in 2002. His last position in Telekom Malaysia Berhad was as Chief Operating Officer of the Wholesale Division. Dato’ Baharum has over 28 years of experience in the telecommunications industry.



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Attendance of Directors at Board of Directors’ Meetings

The Board of Directors met fifteen (15) times during the financial year ended 31 December 2006. Details of the Directors’ attendance are as follows:

Date of Appointment / Resignation Percentage during the year Attendance of Attendance

Dato’ Ir. Wan Muhamad Wan Ibrahim - 15/15 100%

Dato’ Ir. Abdul Rahim Abu Bakar - 15/15 100%

Dato’ Shaik Daud Md. Ismail - 13/15 87%

Elakumari Kantilal - 14/15 93%

Abdul Kadir Md Kassim - 13/15 87%

Kamaludin Abdul Kadir - 15/15 100%

Amiruddin Abdul Aziz - 13/15 87%

Azian Mohd Noh Appointed as Director on 29 March 2006 8/13 62%

Dato’ Baharum Salleh Appointed as - - Managing Director on 1 January 2007

Profile of Senior Management


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From left to rightMisni Aryani Muhamad, Ahmad bin Khalid, Eric Cheng Dek, Mek Yam Jusoh, Iwan Asmady


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From left to rightRusilawati Mohd Noor, Sharbanom Abu Bakar,Fawzi Che Embi

From left to rightTan Eng Suan, Ivan Oh, Abdul Aziz Mohd Noor,Mohd Zamri Salleh, Mohd Halim Mahat



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Ahmad bin Khalid Chief Operating Officer of TIME dotCom Berhad

Ahmad has 30 years of working experience and has held senior-level positions in various organisations, ranging from finance, sales and marketing to overall operations. He was formerly the Executive Director of Zitron Enterprise Sdn Bhd, Group Division Manager of Mobikom Sdn Bhd and General Manager, Marketing, Sales & National Operations of Telekom Cellular Sdn Bhd (TMTouch). He holds a Diploma in Accountancy from Institut Teknologi MARA (now known as Universiti Teknologi MARA) and did his Final Part of ACCA at the London School of Accountancy.

Mohd Halim Mahat Chief Technology Officer of TIME dotCom Berhad

Mohd Halim joined TIME dotCom on 15 February 2007. He holds a Bachelor of Science (Honors) Degree in Electrical Engineering from Portsmouth Polytechnic, United Kingdom. Prior to joining TIME dotCom, he was the Managing Director of Piramid Suria Sdn Bhd, specialising in telecommunications consultancy services. He has a total of 30 years of experience in the telecommunications industry.

Mek Yam JusohSenior Vice President, Corporate Strategy of TIME dotCom Berhad

Mek Yam holds a Bachelor of Technology in Electrical Electronics from Brunel University, UK, and a MBA from Cranfield Business School. Prior to joining TIME dotCom in 1993, she has held several portfolios in the telecommunications industry. Her wide experience includes functions in the Regulatory, Strategic Planning, Customer Care, Sales & Marketing for both domestic and international business in the industry.

Eric Cheng DekChief Financial Officer of TIME dotCom Berhad

Eric joined TIME dotCom on 23 September 2003. He qualified as a Chartered Accountant in 1982 from the Institute of Chartered Accountants in England and Wales and is a member of the Malaysian Institute of Accountants (MIA). Prior to joining TIME dotCom, he was employed by Ericsson Malaysia as the Head of Business Control and Finance (serving Ericsson Malaysia, Bangladesh, Philippines and Pakistan). Prior to that, he was attached to NCR (a US-based computer company) for 10 years as the Finance and Administration Manager.

Iwan AsmadyHead, Group Human Resource & Administration Division of TIME dotCom Berhad

Iwan joined TIME dotCom on 1 February 2007. He holds a Bachelor of Science Degree majoring in Psychology from the State University of New York and an Associate Member of the Institute of Chartered Secretaries & Administrators (ACIS), UK. He is also a Certified Global Remuneration Professional (GRP). Prior to joining TIME dotCom, he was the Advisor attached to National Heart Institute (IJN). He has more than 32 years of experience in the Human Resource & Administration field in various American MNCs and also GLCs.

Misni Aryani MuhamadVice President, Legal & Company Secretary of TIME dotCom Berhad

Misni joined TIME dotCom in June 2003. She obtained her LL.B (Hons) from the International Islamic University in 1988. She was admitted as Advocate & Solicitor of the High Court of Malaya in 1989 and practised law until 1991. Since then and prior to joining TIME dotCom, she has held positions as in-house Counsel and Company Secretary in two major Main Board public-listed companies.

Sharbanom Abu Bakar Vice President, International & Wholesale Business Division of TIME dotCom Berhad

Sharbanom joined TIME dotCom on 1 March 2007. She holds a Bachelor of Commerce and Administration Degree from the University of Wellington, New Zealand and a Masters of Science in Electronic Business Management from the University of Warwick, Coventry, United Kingdom. Prior to joining TIME dotCom, she was the General Manager, Marketing and Sales of TM Wholesale attached to Telekom Malaysia Berhad. She has a total of 16 years of experience in the ICT industry.

Profile oOf Senior Management

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Rusilawati Mohd Noor Vice President, Sales Services Division of TIME dotCom Berhad

Rusilawati joined TIME dotCom on 19 March 2007. She holds a Bachelor of Science Degree in Computer Science from the University of the Pacific, California, USA and a Masters in Management Information System from the Golden Gate University, San Francisco, USA. Prior to joining TIME dotCom, she was the Country Manager, Malaysia and Regional Account Director, Societe International Telecommunication Aeronautique (SITA). She has a total of 21 years of experience in the area of Sales and Information Technology.

Fawzi Che EmbiVice President, Managed Services of TT dotCom Sdn Bhd

Fawzi joined TIME dotCom on 18 December 2006. He holds a Bachelor of Science from the University of Salfor, United Kingdom and a Diploma of Computer Science from the MARA Institute of Technology, Malaysia. Prior to joining TIME dotCom, he was the Director of VADS Technology Services attached to VADS Berhad. Previous to joining VADS Berhad, he was the Senior Vice President of Marketing and New Business Development Division of Heitech Padu Berhad (previously known as PNB Information Technologies Sdn Bhd).

Tan Eng SuanHead, 3G Strategy of TT dotCom Berhad

Tan joined TIME dotCom in 1995. He holds a Bachelor in Engineering in Mechanical Engineering and is an associate member of City and Guilds Association. Prior to joining TIME dotCom, he was with Andersen Consulting for seven years.

Mohd Zamri SallehVice President, Network Operations of TIME dotCom Berhad

Mohd Zamri joined TIME dotCom on 16 October 2000. He is presently responsible for the overall fixed network service integrity through service delivery, network availability, reliability and performance rendered to the customers. He holds a Bachelor degree in Electronics & Electrical Engineering from Loughborough University of Technology, England in 1980. He has over 25 years of working experience in the telecommunications industry, having begun his career with the then Jabatan Telekom Malaysia.

Abdul Aziz Mohd NoorActing Chief Operating Officer of TIME Reach Sdn Bhd

Abdul Aziz joined TIME dotCom on 2 February 2005. He holds a Bachelor of Science in Business Studies from the American University, USA and a Diploma in Business Studies from the MARA Institute of Technology, Malaysia. Prior to joining TIME dotCom, he served as General Manager attached to ISR Tech (M) Sdn Bhd. He has more than 10 years of experience in the telecommunications industry, mainly in the areas of sales, marketing, channel/partner management and operation.

Ivan OhVice President – Corporate Performance Management of TIME dotCom

Ivan is presently heading a new function which is responsible for establishing performance measurements across the organisation and monitor the overall performance of the Group. Since joining the Group in 2000, he has undertaken various financial and strategic functions including the setting up of Revenue Assurance function in July 2004 and a one year stint managing the payphone operations. Prior to joining TIME dotCom, Ivan has 14 years consulting experience with PricewaterhouseCoopers.

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Corporate Events 2006


12 June 2006

Official Launch of National Project of Universal Service Provision

TIME dotCom, jointly with the MCMC launched the National Project of Universal Service Provision (USP) that marked the completion of the first phase of the USP project in Sabah. TIME dotCom undertook the USP implemention for 14 out of 22 districts in the State, providing basic communications facilities in areas lacking communications coverage.

8 June 2006

Annual General Meeting

TIME dotCom conducted its Ninth Annual General Meeting at the Kuala Lumpur Golf and Country Club in Bukit Kiara. It was a smooth affair, attended by over 500 shareholders. The meeting was followed by a media conference.

18 February 2006

School ICT Day

TIME dotCom took part in the Selangor state-level School ICT Day held at Sekolah Menengah Kerajaan Damansara Utama, Petaling Jaya. The event, organised by the Ministry of Energy, Water and Communications, was launched by the Menteri Besar of Selangor Y.A.B. Datuk Seri Mohd Khir Toyo.

3 March 2007

3G Award Announcement

TT dotCom Sdn Bhd, a wholly-owned subsidiary of the Group, was announced as a successful applicant of the 3G spectrum assignment to be awarded by the Malaysian Communications and Multimedia Commission (MCMC). The announcement was made by Energy, Water and Communications Minister Y.B. Dato’ Seri Dr Lim Keng Yaik via a media statement.

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20-23 June 2006

CommunicAsia 2006

TIME dotCom participated in CommunicAsia 2006, along with other telecommunications companies under the Malaysia Pavilion. Our presence at the event, dubbed Asia’s largest telecommunications show, allowed TIME dotCom to secure business leads and increase its brand exposure and promotion in an international environment.

22 August 2006

HSDPA – Next Generation 3G Presentation

TIME dotCom organised a demonstration on its 3G High Speed Downlink Packet Access (HSDPA) capabilities following the successful completion of its pilot trial in the Golden Triangle of Kuala Lumpur. The event was attended by the Minister of Energy, Water and Communications Y.B. Dato’ Seri Dr Lim Keng Yaik Malaysian Communications and Multimedia Commission Chairman Y.Bhg. Datuk Dr Halim Shafie.

5-8 September 2006

MyICMS 886 Show “Digital Opportunities for Development”

TIME dotCom took part as an exhibitor in the inaugural MyICMS 886 Show, held at the Kuala Lumpur Convention Centre. The exhibition specially focused on MyICMS 886 (Malaysian Information, Communications and Multimedia Services 886) blueprint that showcased the latest technologies on high speed broadband, 3G and beyond, mobile TV, digital multimedia broadcasting, digital home, short range communications, VoIP and universal service provisioning.

13 October 2006

Majlis Berbuka Puasa with Children and the Elderly

TIME dotCom treated more than 50 children and the elderly from Rumah Silaturrahim Nurul Qanaah, Pusat Tahfiz Darul Furqan and Rumah Kebajikan Asy-Syakur to a Majlis Berbuka Puasa at its headquarters in Wisma TIME.

19 October 2006

Majlis Berbuka Puasa with Residents of Rumah Titian Kaseh

About 20 senior management and staff from TIME dotCom went to Rumah Titian Kaseh to treat the residents to a Majlis Berbuka Puasa. The children were presented with Hari Raya goodies and school items.

1 November 2007

Volunteer Separation Scheme (VSS)

TIME dotCom announced to interested employees that they have until 30 November 2007 to apply for a voluntary separation scheme (VSS). The exercise was part of its restructuring plan and workforce optimisation. A total of 262 employees were given the VSS throughout December 2007.

13 November 2006

Presentation of 3G Spectrum Licence

Having satisfied all conditions, TT dotCom Sdn Bhd, a wholly-owned subsidiary of TIME dotCom Berhad was officially issued with the third generation (3G) spectrum assignment by the Malaysian Communications and Multimedia Commission (MCMC). The licence was presented by Ir. Haji Mohd Aris Bernawi, MCMC General Manager of Resource Assignment Management Division.



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18 October 2006

Launch of ICT Centre at Rumah Titian Kaseh

TIME dotCom was one of the sponsors “Inspiring Hope” project that was undertaken in collaboration with the Yayasan Harapan Kanak-kanak Malaysia (YHKM). Under the project, TIME dotCom established an information and communications technology (ICT) centre for Rumah Titian Kaseh in Kuala Lumpur, which was officially opened by the Patron of YHKM, Y.A.Bhg. Datin Paduka Sri Rosmah Mansor, wife of the Deputy Prime Minister.

27-29 November 2006

Kuala Lumpur Islamic Finance Forum (KLIFF 2006)

TIME dotCom participated in the annual held at the Putra World Trade Centre (PWTC) as a Gold Sponsor. It was an excellent platform to promote OMNii as our network business solutions brand to the Islamic banking and finance fraternity. TIME dotCom hosted lunch for about 300 delegates on 28 November 2006.

30 November 2006

Malaysian Internet Exchange (MyIX) MOU Signing Ceremony

TIME dotCom signed a memorandum of understanding to be part of 17-member consortium to form the Malaysian Internet Exchange (MyIX), a peering infrastructure that will lower local ISPs’ costs for routing local Internet traffic while improving performance, enhance the broadband experience for Malaysian Internet customers and make it more popular. MyIX was officially launched by Minister of Energy, Water and Communications Y.B. Dato’ Seri Dr Lim Keng Yaik on 15 December 2006.

18 December 2006

Volunteer Programme at Rumah Titian Kaseh

Following the setting up of an ICT Centre sponsored by TIME dotCom at Rumah Titian Kaseh, the Group deployed the first batch of its employees to conduct tuition and computer classes for children at the Home.


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28 December 2006

Cheque Presentation to Hospis Malaysia

TIME dotCom handed over proceeds from its annual Customer Satisfaction Survey (CSI), amounting to RM6,420.00 to Hospis Malaysia, a charitable organisation that provides palliative care services for patients facing life-limiting illnesses. For the project, TIME dotCom had pledged to donate RM5 to Hospis Malaysia for every survey answered. TIME dotCom has conducted a similar survey-charity approach for the third consecutive year and the 2006 CSI saw the participation by 1,284 customers, an 83 per cent increase compared to previous years.

Corporate Governance Statement

The Board is not only committed in ensuring the highest standards of corporate governance in the Group as articulated in the Principles and Best Practice promulgated in the Malaysian Code of Corporate Governance (the “Code”) but also continually strives to enhance the effectiveness by improving the Board of Directors’ practices and processes. This is in line with the objective of the GLC Transformation Initiative to Enhance Board Effectiveness as laid down in the Green Book produced by Putrajaya Committee on GLC High Performance for all GLCs.

The Board views corporate governance as synonymous with four key concepts of the Group; namely transparency, integrity and accountability as well as corporate performance. The group adopts these key concepts in the Group’s operation and management and consciously applies the principles and best practices of the Code and other global standards.

The Board is pleased to provide the following statement which outlines the main corporate governance that was in place throughout the financial year.

Principles statement

A. Directors

The Board

An effective Board that leads and controls the Group is vital in the stewardship of its direction and operations and ultimately the enhancement of long-term shareholder value. Thus, the Board is responsible for the strategic direction, establishing goals for management and monitoring the achievement of these goals. All Directors are from diverse professional backgrounds with a wide range of business and financial experience. The profile of each Director is presented from pages 28 to 32.

The diversity of the Directors’ background is pivotal to provide depth and specific experience and perspective to the leadership of the Group, as needed by the Group’s business which is a highly regulated and supervised telecommunications industry.

In discharging its stewardship, the Board has adopted a formal schedule of matter which includes:

• review, decide and adopt a strategic plan and direction for the Group as well as providing guidance and input on the overall strategic plan and direction to the management; • setting and establishing targets and goals for the management and monitoring the achievement of these targets and goals; • review and oversee the corporate performance of the Group; • identify and manage principal risks in the Group’s business; • oversee, supervise and plan the Group’s future leaders and human capital and their succession;

The schedule ensures that the governance of the Group is in its hands.

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Board Balance

The Board currently consists of nine (9) members, comprising one (1) Non-Independent Non-Executive Chairman (“Chairman”), one (1) Executive Director designated as the Managing Director, three (3) Independent Non-Executive Directors and four (4) Non-Independent Non-Executive Directors.

This complies with paragraph 15.02 of the Listing Requirements which requires that at least two (2) Directors or one third of the Board of the Company, whichever is higher, are independent Directors. The Board’s current size and composition are also in line with the GLC guidelines and appropriate for its purpose. The composition of the Board reflects an impressive spectrum of experiences and skills with a mix of legal, financial, technical and business experience which are relevant and vital to the direction and management of the Group. It also fairly reflects the interests of the minority shareholders of the Group.

The roles and responsibilities of the Chairman and the Managing Director are separate with clear distinctions between them. The Chairman leads the Board and is responsible in ensuring the effective and smooth interaction of the overall Board and individual Directors, both within and outside the Boardroom as well as driving the discussion toward consensus and to achieve closure in every discussion. The Managing Director is responsible for developing and implementing the strategies of the Group, reflecting long term objectives as well as priorities established by the Board. The Managing Director assumes full responsibility and accountability to the Board for all aspects of the Company operations and performance. He also represents the Company to major customers, employees, suppliers and professional associations.

The Non-Executive Directors contribute significantly in areas such as policy and strategy, performance monitoring, allocation of resources as well as improving governance and control. The Independent Directors play pivotal roles in ensuring that the business strategies of the Group and any other matters or agendas discussed are properly and fully deliberated and examined with a view of protecting the interests of shareholders and the stakeholders of the Group. They provide independent and unbiased views in determining the final decisions taken or endorsed by the Board.

Meetings

The Board meets regularly. In addition to the scheduled meetings, the Board also convenes special meetings when urgent and important decisions need to be taken between scheduled meetings. During the past financial year, the Board met 15 times.

For all the meetings, due notices were given and structured formal agenda and papers relating to the agenda items are forwarded to all the Board members for their perusal prior to and in most cases, in advance of the date of each meeting.

All proceedings of the meetings were properly minuted and filed. The minutes are circulated to each and every Board member for their perusal prior to the confirmation of the minutes before the commencement of the next Board meeting. The members may request for clarification or raise comments on the minutes before they are confirmed.

The Board deliberated upon and considered a variety of matters including the Group’s financial results, major investments and strategic decisions, the business directions of the Group and Corporate Governance matters during the financial year.

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Details of Directors’ attendance at Board Meetings held during the financial year ended 31 December 2006 are as follows:

Total No. of Directors’ Attendance Attendance/ Date of Board Meeting Independent Non-Independent Total Board Members 9 January 2006 3 4 7/8 27 January 2006 3 5 8/8 23 February 2006 2 5 7/8 13 April 2006 2 5 *7/9 19 May 2006 3 5 **8/8 26 May 2006 3 4 7/8 18 June 2006 3 4 7/8 20 July 2006 3 5 8/8 15 August 2006 3 5 8/8 21 August 2006 3 5 8/8 18 September 2006 2 5 7/8 26 September 2006 3 5 8/8 16 October 2006 3 4 7/8 13 November 2006 3 3 6/8 4 December 2006 3 3 6/8

* Azian Mohd Noh was appointed to the Board with effect from 29 March 2006

** Tan Kim Shah resigned from the Board with effect from 24 April 2006

The Board of Directors delegate certain responsibilities to the Board Committees. All Committees have written terms of reference and operating procedures to ensure a clear division of duties between the full Board and Board Committees. The Board is kept informed of all proceedings and deliberations of its Board Committees through minutes of Board Committees’ meetings which are tabled at the Board meetings, for notation.

The details of meetings and activities of these Committees are discussed in the following paragraphs.

Supply of Information

The Board has unrestricted access to information required so as to enable it to discharge its duties, as the decision making process is highly contingent on the strength of information furnished. The Board is provided with regular and updated information and briefings on the performance of the Group and the Company prior to every meeting to enable them to make informed decisions. The Board papers include, amongst others, the following details.

• Annual business plan; • Quarterly performance reports of the Group; • Management monthly reports; • Major operational and financial issues; • Market share and market responses to the Group’s strategies; • Major investments, acquisitions and disposals of assets; • Manpower and human resource issues; and • Minutes of meetings of all the Committees of the Board.

Senior management and key operational managers are informed and made aware of the quality and timeliness required by the Board with respect to the contents, presentation and delivery of Board papers for each Board meeting.

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Key matters such as approval of annual and interim results, annual business plans and budget; major investment, financial decisions, key policies, major proposals and announcements are reserved for the Board. These reserved matters are set out in the Group’s Discretionary Authority Limits (“DAL”). The DAL also specifies the levels of authority delegated to the Management by the Board.

The Board, whether as a full Board or its members in their individual capacity, can seek independent professional advice at the Company’s expense in the course of fulfilling their responsibilities. Every Director also has unhindered access to the advice and services of the Company Secretary. The Company Secretary constantly advises and updates the Board on the statutory and regulatory requirements in relation to their duties and responsibilities. Appointment and removal of the Company Secretary can only be made by the Board as a whole.

Director’s Training

All Directors have attended and successfully completed the Mandatory Accreditation Programme prescribed by Bursa Malaysia Securities Berhad. During the financial year, the Directors have also attended seminars and briefings conducted by the Regulatory Authorities and the professional bodies in order to keep abreast with relevant developments in laws and regulations and the business environment. Some of the seminars and briefings attended by the Directors during the financial year were as follows:

• Corporate Governance Conference 2006 – Corporate Social Responsibility & Directors Duties • Strategic Leadership & Succession Planning for Sustainable Superior Performance

Re-election of Retiring Directors

In accordance with the Company’s Articles of Association and the Bursa Malaysia Listing Requirements, one-third of the Directors shall retire by rotation at every Annual General Meeting and all directors are subject to retirement at an interval of at least once every three (3) years. The Nomination Committee shall, upon reviewing and assessing performance levels, recommend to the Board the re-election of the Directors who are due for retirement at each Annual General Meeting.

Board Appraisal Process

In line with the Government’s intention to raise and enhance GLC Boards effectiveness and to structure high performing Boards, the Company has adopted an evaluation framework comprising Board Effectiveness Assessment and Board of Directors’ Self/Peer Assessment. These assessments were designed to identify the areas that need to be improved to increase the Board’s effectiveness and at the same time to maintain cohesiveness of the Board.

Among the key performance indicators employed to evaluate the Board’s current effectiveness are board composition, board administration, board accountability, responsibility and conduct whereas the indicators for individual director’s assessment include their interactive contributions, understanding of their roles and quality of input.

The Company has successfully carried out the assessment process and the Board has identified the areas to be addressed and is committed to align its effectiveness towards the recommended best practices.

B. Board Committees

Appointments of Board Committees

The Board has delegated certain responsibilities to the Board Committees and each and every Board Committee has written terms of reference of its own. The Board receives reports from the Board Committees and is constantly updated of their proceedings and deliberations. In cases where the Board Committee has no authority to decide on certain matters, the Board Committees will assess and examine the issue and subsequently provide their recommendations which are highlighted in their respective reports for the Board’s endorsements.

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Audit Committee

Paragraph 15.10 of the Bursa Malaysia Listing Requirements requires an Audit Committee to be established. The Company’s Audit Committee comprises three (3) Non-Executive Directors headed by an Independent Non-Executive Director. Further details of its composition, roles and activities during the financial year are set out in pages 52 to 55.

Nomination Committee

The Nomination Committee comprises three (3) members i.e. one Non-Independent Non-Executive Director who acts as a Chairman and two (2) Independent Non-Executive Directors. The Nomination Committee held a total of six (6) meetings during the past year. The details are as follows:

No. of meetings attended

Abdul Kadir Md Kassim (Chairman) Non-Independent, 6/6 Non-Executive Director

Kamaludin Abdul Kadir Independent, 6/6 Non-Executive Director

Dato’ Shaik Daud Md Ismail Independent, 6/6 Non-Executive Director Throughout the year 2006, the Nomination Committee has taken the following steps to ensure proper discharge of its duties:

• Made recommendations to the Board with respect to the Directors who shall retire at the Company’s 9th Annual General Meeting. • Reviewed the required mix of skills, experience and other qualities of Non-Executive Directors and implemented Board assessment survey forms to assist the Committee in the review. • Make available training opportunities to the Board members from time to time. • Conducted interviews with various candidates for the position of the Managing Director and subsequently recommended to the Board the appointment of the Managing Director. • Reviewed and implemented the Directors Evaluation Form for the purpose of Directors’ Assessment as required by the GLC Transformation Green Book.

In carrying out its duties and responsibilities, the Nomination Committee has a full and unrestricted access to the Company’s records, properties and personnel and it may also use the services of professional requirement firms or sought independent professional advice in seeking the right candidate for directorship, whenever necessary. The Nomination Committee then recommends to the Board suitable candidates for the appointment as Directors and to fill vacant seats on Committees of the Board after which the Company Secretary ensures that all appointments are properly made and all legal and regulatory compliance are met.

Remuneration Committee

The remuneration framework for Non-Executive Directors was recommended by the Remuneration Committee and approved by the Board. The remuneration is structured so as to ensure that the Group attracts and retains Directors of calibre, skills and experience needed to lead and control the Group effectively.

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The Remuneration Committee comprises three (3) members and all of them are Non-Executive Directors. Among them, two (2) are Independent Directors and one (1) is a Non-Independent Director. The Remuneration Committee held a total of seven (7) meetings during the financial year. The details are as follows:

No. of meetings attended

Dato’ Ir. Abdul Rahim Abu Bakar Independent, 7/7 (Chairman) Non-Executive Director Abdul Kadir Md Kassim Non-Independent, 7/7 Non-Executive Director Kamaludin Abdul Kadir Independent, Non-Executive Director 7/7

The Committee is responsible for recommending to the Board the policy framework on terms of employment and all elements of the remuneration of members of the top management of the Company. The Remuneration Committee is also charged with the responsibility to recommend the annual bonus and salary increment of the members of the top management of the Company and to review and recommend the remuneration of the Non-Executive Directors to the Board.

Directors’ remuneration is a matter to be decided by the Board as a whole, save for Directors’ fees, with the Directors concerned abstaining from deliberations and voting on decisions in respect of their remuneration.

The Remuneration Committee has carried out its functions as set out in the Terms of Reference and during the financial year, as follows:

• Reviewed and finalised the distribution of ex-gratia bonus, structural adjustment and salary increment for the top management of the Company; • Provided guidance to the management of the Company on the staff annual increment, promotion, structural adjustment for the financial year and ex-gratia bonus for the previous financial year; • Reviewed and recommended the revision of the benchmarks for performance and rewards through the revision of the Performance Management System (PMS) forms, revisions for the quantum for payment of bonus for the previous financial year to differentiate between the high performers and those who merely meet targets; • Considered and recommended payment of an Executive Director’s fees and emoluments as provided under the Company’s Remuneration Framework for Non-Executive Directors and unlisted subsidiary companies as well as the Executive Committee’s monthly allowance; • Considered the terms and engagement of the Managing Director as the Managing Director/CEO and the Chief Operating Officer and recommended their appointments to the Board; • Reviewed and considered the packages offered under the Company’s Voluntary Separation Scheme which was implemented in November 2006 and recommended for the Board for adoption.

In discharging its duties and responsibilities, the Remuneration Committee has unhindered access to the Company’s records, properties and personnel and it may also obtain the advice of external advisors if required.

The Directors were paid annual fees and attendance allowance for each Board meeting and Board Committee meeting that they attended.

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Details of the Directors’ remuneration (including benefits-in-kind) for each Director during the financial year ended 31 December 2006 are as follows:

Name of Directors Fixed Fees Allowances Benefits-in Total -kind Amount (RM) (RM) (RM) (RM)

Dato’ Ir. Wan Muhamad Wan Ibrahim 172,000 23,250 14,000 109,250

Elakumari a/p Kantilal 242,000 21,500 300 63,800

Abdul Kadir Md Kassim 30,000 22,750 300 53,050

Kamaludin Abdul Kadir 30,000 27,500 300 57,800

Dato’ Ir. Abdul Rahim bin Abu Bakar 342,000 29,250 300 71,550

Amiruddin Abdul Aziz 30,000 14,000 - 44,000

Dato’ Shaik Daud bin Md Ismail 442,000 21,000 300 63,300

*Tan Kim Shah 9,369.86 4,000 - 13,369.86

**Azian Mohd Noh 22,849.32 8,000 - 30,849.32

On 20 November 2006, the Board of Directors decided to merge the Nomination and Remuneration Committee. The Chairman of the new Nomination and Remuneration Committee is Dato’ Ir. Abdul Rahim Abu Bakar with the other members being Abdul Kadir Md Kassin, Dato’ Shaik Daud Md Ismail and Kamaludin Abdul Kadir. Tender Board Committee

The Tender Board Committee was established to facilitate the procurement process. Its main objective is to examine the tenders received and ensure that all necessary criteria, specifications and requirements of the Company have been met and complied with.

The Tender Board Committee comprised Dato’ Ir. Wan Muhamad Wan Ibrahim (Chairman), Elakumari Kantilal and Dato’ Ir. Abdul Rahim Abu Bakar. The Board has delegated the authority to it to approve up to RM10.0 million for the budgeted transactions for the acquisition/disposal of fixed assets, trade or stock purchase and the award of contracts after taking into consideration various factors such as the list of tenders received, nature of procurement and the technical and commercial evaluation.

During the year, the Tender Board Committee held four (4) meetings.

1 Inclusive of the fees paid for sitting as a director for subsidiaries 2 Inclusive of the fees paid for sitting in Audit Committee 3 Inclusive of the fees paid for sitting in Audit Committee 4 Inclusive of the fees paid for sitting in Audit Committee * Resigned with effect from 24 April 2006 ** Appointed with effect from 29 March 2006

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Technical Committee

The Technical Committee which comprises Kamaludin Abdul Kadir (Chairman), Dato’ Ir. Wan Muhamad Wan Ibrahim and other senior Management evaluates and reviews operational or technology proposals in support of the Company’s business plan and policy. The Committee reviews the technology roadmap and strategy of the Company. The Committee met five (5) times during the year.

The Technical Committee has been abolished with effect from 17 February 2007.

Executive Committee

The Executive Committee which comprises Dato’ Ir. Abdul Rahim Abu Bakar, Abdul Kadir Md Kassim, Eric Cheng Dek and Mek Yam Jusoh was formed in November 2005 to oversee the daily business operations of the Group following the resignation of Tan See Yin on 30 November 2005. The Executive Committee reports directly to the Board and exercises the power and authority of the Managing Director in accordance with the Terms of Reference approved by the Board.

The Executive Committee ceased to exist with the appointment of the Managing Director.

C. Shareholders

Investors/Shareholders Relations

The Group recognises and acknowledges that the key element of good corporate governance is being transparent and accountable to all stakeholders. It is fundamental for the Group to establish a provision of clear, relevant and comprehensive information that is readily and timely accessible to all stakeholders. Acknowledging this fact, the Group maintains a high level of disclosure and communicates regularly and proactively with its stakeholders, particularly to investors and shareholders, through transparent, effective and readily accessible communication channels. Information on the Group’s business activities and financial performance are disseminated through press releases, quarterly reports, annual report and the Annual General Meeting in a timely and efficient manner. In addition, the Company’s website at http://www.time.com.my provides a broad range of information to the shareholders.

The Company has taken great care and control to ensure that no market sensitive and any other information that require to be reported or announced to the Bursa Malaysia for public release are disseminated or informed to any party without first making such official report or announcement to ensure equal dissemination and information to all investors. Any information released by the Company totally complies with and strictly adheres to disclosure rules and regulations of Bursa Malaysia Listing Requirements.

The Board has identified Dato’ Ir. Abdul Rahim Abu Bakar as the Senior Independent Non-Executive Director to address minority shareholders’ issues and to whom minority shareholders’ concerns may be conveyed.

Annual Report and Annual General Meetings

The key channel of communication regarding the Group’s business activities and financial performance is via the Company’s annual report. The annual report discloses comprehensive details about the Group’s business activities and financial performance for the financial year. The Annual General Meeting is the principal open forum at which the shareholders and investors are informed of the current development. An interactive dialogue is conducted for them to inquire about the Group’s activities and prospects as well as communicate their expectations and concerns. Adequate time is allocated for the question and answer sessions between the Directors and the Group’s external auditors with the shareholders at the Annual General Meeting held by the Company.

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50

Each item of special business included in the Notice of Annual General Meetings is accompanied by a full explanation of the effects of the proposed resolution. Special resolutions are proposed for different transactions and the Chairman declares the outcome of the votes cast for and against each resolution.

D. Accountability and Audit

Financial Reporting

In presenting the annual financial statements and quarterly announcements to the shareholders, the Board aims to present a clear and balanced assessment of the Group’s position and prospects. The Board is assisted by the Audit Committee to oversee the financial reporting processes and the quality of such financial reporting.

Directors’ Responsibility Statement in Respect of the Preparation of the Audited Financial Statements

The Board of Directors is responsible for ensuring that the financial statements 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 their results and cash flows for the period then ended.

In preparing the financial statements, the Directors have considered and ensured that:

• Applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 have been applied; • Suitable and appropriate accounting policies have been adopted and applied consistently; and • Reasonable and prudent judgments and estimates were made.

The Directors also have a general responsibility for taking such steps as are reasonably available to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The Statement by Directors pursuant to Section 169 of the Companies Act, 1965 is set out on page 63 of the Financial Statements section of the annual report.

Internal Control

The Board acknowledges its responsibility in maintaining a sound system of internal control to safeguard shareholders’ investments and for reviewing the effectiveness, adequacy and integrity of those systems. The Board and Audit Committees are provided with sufficient information as to the Group’s risk profile and Risk Management procedures and Management Information System to ensure that the Group’s internal controls and systems are effective.

The Statement on Internal Control furnished on pages 56 to 58 of the annual report provides an overview on the state of internal controls within the Group.

Relationship with the Auditors

Key features underlying the relationship of the Audit Committee with the external auditors are included in the Audit Committee’s terms of reference as detailed on pages 53 to 54 of the annual report.

A summary of the activities of the Audit Committee during the year, including the evaluation of the independent audit process, are set out in the Audit Committee Report on pages 52 to 53 of the annual report.

Compliance Statement

• The Company has complied with all the best practices of corporate governance set out in Part 2 of the Code throughout the financial year.


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Additional Compliance Statement

1. Material Contracts Involving Directors’ and Major Shareholders’ Interest

Save as disclosed below, there were no material contracts entered by the Company and/or its subsidiaries involving shareholders’ interest either subsisting as at 31 December 2006 or entered since the end of the previous financial year are as follows:

Wayleave and Right of Use Agreement between Projek Lebuhraya Utara-Selatan (“PLUS”) and TT dotCom Sdn Bhd (“TT dotCom”) dated 12 May 2000.

The Agreement grants an exclusive right to TT dotCom to use the fibre optic telecommunications network and infrastructure installed by PLUS for an annual sum of RM10,800,000/- for the calendar year 2000 with an incremental amount of 5% compounded annually up to the calendar year 2014. Thereafter, the annual sum will remain at RM4,240,000/- until the expiry of the Agreement.

The Agreement shall expire upon the lapse of the concession as granted by the Government of Malaysia to PLUS which is on 30 May 2030, unless renewed by the Government of Malaysia (in which event the Agreement shall terminate upon the renewed terms of the PLUS Concession).

TT dotCom did not exercise the option to purchase the fibre optic cable and ducts from PLUS under the Supplemental Agreement dated 19 May 2000 which expired on 11 November 2002. The expiration of the option, however, does not affect TT dotCom’s exclusive right to use the telecommunications facilities under the Agreement.

PLUS Expressways Berhad is the holding company of PLUS and an associate company of UEM World Berhad (“UEM World”). UEM Group Berhad (formerly known as United Engineers (Malaysia) Berhad) is a major shareholder of UEM World and a wholly-owned subsidiary of Khazanah Nasional Berhad. (“Khazanah”). Khazanah is a major shareholder of the Company.

2. Imposition of Sanctions/Penalties There were no penalties imposed on the Company and its subsidiary companies for the financial year ended 31 December 2006.

3. Non-Audit Fees

The non-audit fees paid to external auditors for the financial year ended 31 December 2006 was RM170,784.41.

Audit Committee Report

The Board of Directors is pleased to present the Report of the Audit Committee (“Committee”) for the year ended 31 December 2006.

Composition

The Committee presently comprises three (3) members, of whom two (2) are Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. The members of the Audit Committee during the financial year ended 31 December 2006 are as follows:

Dato’ Shaik Daud Md Ismail (Chairman) Independent Non-Executive DirectorDato’ Ir. Abdul Rahim Abu Bakar Independent Non-Executive DirectorElakumari Kantilal Non-Independent Non-Executive Director

The profiles of the Audit Committee members are contained in “Profile of Directors” set out on pages 28 to 32.

Terms of Reference

The Committee was established on 27 September 2000 to act as a Committee of the Board of Directors, with the Terms of Reference as set out on pages 53 to 54.

Meetings

The Audit Committee convened six (6) meetings during the financial year ended 31 December 2006. The details of attendance are as follows:

Name Number of meetings attended Dato’ Shaik Daud Md Ismail 6/6 Dato’ Ir. Abdul Rahim Abu Bakar 6/6 Elakumari Kantilal 6/6

Two (2) members of the Executive Committee from management and the Company Secretary were present by invitation at all the meetings. The external auditors, Head of Internal Audit and the Chief Financial Officer were also present during discussions that required their input and advice.

Summary of Activities

The Committee carried out its duties in accordance with its terms of reference during the year. The main activities undertaken by the Committee were as follows:

• Reviewed the audited financial statements for the financial year ended 31 December 2005 and the unaudited quarterly financial results of the Group for 2006 with the external auditors prior to the Board of Directors’ approval and subsequent announcements.

• Reviewed the scope of work, programmes and plans of the Group Internal Audit Division and the resources allocated to carry out its work.

• Reviewed the internal audit reports issued, which covered the areas of balance sheet and cost of sales accounts, network systems and facilities maintenance, interconnect settlement and best cost routing systems, risk management, leased lines reconciliation, customer acquisition and acceptance, churn management and reporting, customer retention and loyalty programmes, human resource workforce/staffing and training, human resource compensation and benefits, compliance with corporate governance requirements and related party transactions.

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• Discussed with management to undertake the corrective measures to address gaps and deficiencies identified in the internal audit reports.

• Recommended to the Board improvements, opportunities in risk management, internal control and governance processes.

• Reviewed the reappointment of external auditors and the annual audit fee.

• Met with external auditors once during the year without the presence of any executive Board member.

• Reviewed the Audit Committee Report and the Statement on Internal Control for 2006 before being tabled to the Board.

• Reviewed the Group’s procedures in respect of recurrent related party transactions (“RPTs”) to ensure that the RPTs were not more favourable to the related parties than those generally available to the public and not detrimental to minority shareholders.

• Reviewed the Group’s compliance with the Listing Requirements of Bursa Malaysia, Malaysian Accounting Standards Board (“MASB”) and other relevant legal and regulatory requirements.

• Considered and recommended to the Board the adoption of 21 new or revised accounting policies to comply with the Financial Reporting Standards.

The Audit Committee continually engages with and monitors the services of the external auditors to ensure independence, objectivity and effectiveness of the existing auditors.

Internal Audit Function

The Board of Directors is committed to establishing and maintaining an efficient and effective internal audit function to obtain sufficient assurance of regular review and appraisal of the effectiveness of the Group’s system of internal controls. The internal audit function is guided by its Audit Charter and reports to the Audit Committee. Its primary role is to assist the Audit Committee to discharge its duties and responsibilities by independently reviewing and reporting on the adequacy and integrity of the Group’s system of internal controls.

Findings and recommendations for improvements are communicated to senior management and the Audit Committee with regular follow up on the implementation status of action plans. The Internal Audit function adopts a risk- based approach in the review of internal controls based on an annual audit plan approved by the Audit Committee.

Terms of Reference of the Audit Committee

Objectives

The primary objective of the Audit Committee is to assist the Board of Directors in fulfilling its responsibilities relating to accounting and reporting practices of the Company and its subsidiary companies.

Composition

The Audit Committee shall be appointed by the Board from amongst the Directors and shall consist of not less than three (3) members, a majority of whom shall be independent non-executive Directors and at least one member of the Committee must be a member of the Malaysian Institute of Accountants or should have 3 years working experience and passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967 or is a member of one of the Associations of Accountants specified in Part II of the 1st Schedule of the Act.


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The members of the Audit Committee shall elect a Chairman from amongst their number who shall be an independent non-executive Director.

In the event of any vacancy in the Audit Committee, the Board shall within three (3) months of that event, appoint such number of new members as may be required to fill the position. The Nomination Committee will review and recommend, to the Board for approval, another director to fill up such vacancies.

No alternate Director is appointed as a member of the Audit Committee. The terms of office and performance of the Audit Committee must be reviewed by the Board once every 3 (three) years. All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company.

Members of the Audit Committee may relinquish their membership in the Committee with prior written notice to the Company Secretary and may continue to serve as Director of the Company. All committee members including the Chairman should be persons of good social standing and possess relevant skills and a good track record in the corporate or business field.

Meetings

Meetings shall be conducted at least four (4) times annually, or more frequently as circumstances dictate. In order to form a quorum in respect of a meeting of an audit committee, the majority of members present must be independent non-executive Directors.

The Audit Committee shall aim to reach a consensus on issues discussed, failing which a poll shall be taken through a show of hands. The Chairman of the Committee should report on each meeting to the Board. Minutes of each meeting should be kept and distributed to each member of the Committee and of the Board. The Company Secretary shall be appointed Secretary of the Committee.

The Chief Executive Officer/ Managing Director, Chief Financial Officer, Head of Internal Audit and a representative of the external auditors shall normally be entitled to attend the meetings of the Committee and to make known their views on any matter under consideration by the Committee, or which in their opinion, should be brought to the Committee’s attention.

The Audit Committee must ensure that other directors and employees attend meetings only at the Audit Committee’s invitation, specific to the relevant meeting.

Authority

The Committee is authorised by the Board to investigate any activity within its terms of reference. It shall have:

• the authority to investigate any matter within its terms of reference;

• the resources which are required to perform its duties;

• full and unrestricted access to information;

• direct communication with the external auditor and head of internal audit department/function;

• the right to obtain external professional advice and secure the attendance of outsiders with relevant experience and expertise if it considers this necessary; and

• the right to convene meetings with the external auditors together with non-executive committee members whenever deemed necessary.


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Functions and Duties

In fulfilling its primary objectives, the Audit Committee will need to undertake the following functions:

i) To determine that established policies, procedures and guidelines, operating and internal accounting controls are adequate, functioning, effective, and are complied with in promoting efficiency and proper conduct of the Company’s business.

ii) To act as an independent and objective party in reviewing the financial information of the Company presented by Management.

iii) To review the quarterly and year-end financial statements of the Company for recommendation to the Board for approval, focusing particularly on:

• Any changes in accounting policies and practices • Significant adjustments arising from the audit • The going concern assumption • Compliance with accounting standards and legal requirements

iv) To consider the appointment of the external auditor, the audit fee and any questions of resignation or dismissal.

v) To discuss with the external auditors before the audit commences, the nature and scope of the audit, and ensure coordination where more than one audit firm is involved.

vi) To discuss problems and reservations arising from the interim and final audits, and any other matter the auditor may wish to discuss (in the absence of Management where necessary).

vii) To review the external auditor’s management letter, their evaluation of the systems of internal control and management’s responses thereof.

viii) To ensure that assistance is given by the employees of the company in following the best practices in providing full and faithful disclosure of any material information, to the external auditor.

ix) To do the following where an internal audit function exists:

• Review the adequacy of the scope, functions and resources of the internal audit function, and that it has the necessary authority to carry out its work • Review the internal audit plan and results of the internal audit process and ensure that appropriate action is taken on the recommendations of the internal audit function

• Review any appraisal or assessment of the performance of members of the internal audit function

• Approve any appointment or termination of senior staff members of the internal audit function.

• Inform itself of resignations of internal audit staff members and provide the resigning staff to submit his/her reasons for resigning

x) To consider any related party transactions that may arise within the Company or Group.

xi) To consider the major findings of internal investigations and Management’s response.

xii) To review pertinent operational matters in relation to the Group’s quarterly financial performance and quarterly announcement to Bursa Malaysia.

xiii) To monitor operational performance against targets set in the Business Plan and Executive Dashboard in relation to the Group’s quarterly financial performance and quarterly announcement to Bursa Malaysia.

xiv) To consider other topics as defined by the Board.


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The Board of Directors is committed to maintaining a sound system of internal control in the Group and is pleased to provide the following statement on internal control that outlines the nature and scope of internal control of the Group during the year pursuant to paragraph 15.27 (b) of Bursa Malaysia’s Listing Requirements.

Board Responsibility

The Board acknowledges its responsibility in maintaining a sound system of internal control to safeguard shareholders’ investments and for reviewing the effectiveness, adequacy and integrity of those systems. The system of internal control addresses the corporate objectives on the need for effective and efficient business operations, sound financial reporting and internal controls and compliance with relevant laws and regulations. Because of the limitations that are inherent in any system of internal control, this system is designed to manage, rather than eliminate the risk of non-achievement of the Group’s objectives. Therefore, the internal control system can only provide reasonable but not absolute assurance against the occurrence of any material misstatement or loss.

The Group has in place an on-going process for identifying, evaluating, monitoring and managing the significant risks that may materially affect the achievement of its corporate objectives. This process has been in place throughout the year under review up to the date of this report.

On-going reviews are carried out to ensure the effectiveness, adequacy and integrity of the system of internal controls in safeguarding the Group’s assets and shareholders’ interests in the Group.

Risk Management Framework

The risk management framework has been adopted and this includes the establishment of the Risk Management Steering Committee (“RMSC”) in 2002. The Managing Director is tasked to head the RMSC. The Risk Management Secretariat reports to the RMSC to assist it in the undertaking of its functions. As an interim measure pending the appointment of a new Managing Director, the Board of Directors of TIME dotCom Berhad has formed a four (4) – member Executive Committee comprising two (2) representatives each from members of the Board and two (2) representatives from senior management to oversee the day to day business operations of the Group during the year. Following the appointment of a new Managing Director on 1 January 2007, the Executive Committee ceased to exist.

The RMSC is tasked with developing and maintaining an effective risk management system within the Group. Formal risk policy and guidelines have been established for the risk management framework. Under the existing risk management framework, risks are managed on a day to day basis by the operating units, divisions and departments with oversight function provided by the Managing Director and the RMSC. The internal audit function and the Audit Committee provide further independent assurance.

Following the enterprise risk management exercise, risk registers were established for the Group and key risks were identified. During the financial year, the RMSC reviewed the enterprise risk profile and management’s action plan on significant risks which were presented to the Board. The Board was further updated on the status of the management action plan in mitigating these risk factors on a regular basis.

Designated risk coordinators were tasked with maintaining the risk registers for their operating units and following up on action plans to manage and mitigate the risk factors. The risk coordinators meet on a quarterly basis to discuss developments pertaining to the enterprise risk and update the registers accordingly.

Control Environment and Structure

The Board recognises that in order to achieve a sound system of internal control, a conducive control environment and framework must be established. The Board is fully committed to the maintenance of such control environment within the Group and, in discharging their responsibilities, adopted the following key system of internal control within

Statement of Internal Control

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the Group to govern the manner in which the Group and its employees conduct themselves. The key elements of internal controls comprise the following:

• Board Committees were set up by the Group to promote corporate governance and transparency with specific terms of reference and authority. The Board Committees formed by the Group are the Audit Committee, Nomination Committee, Remuneration Committee, Tender Board Committee and Technical Committee. These Committees report to the Board and make recommendations for the Board’s decision.

• Board meetings are scheduled regularly. Board papers are distributed to the members ahead of the meetings and Board members have access to all relevant information. Decisions are made by the Board only after the required information is presented and deliberated. This ensures that the Board maintains full and effective control on the direction of the Group.

• Audit Committee composition, comprising a majority of Independent Non Executive Directors, was maintained throughout the financial year. The members of the Committee bring with them a wide variety of experience from different industries and background. They met and have full access to both the internal as well as external auditors during the financial year. They also met with the external auditors without any management presence.

• The Discretionary Authority Limits Table that delineates authority limits to ensure accountability and segregation of duties. The Discretionary Authority Limits Table is reviewed on a regular basis at various levels for it to be more effective and efficient in supporting the business operations.

• Internal Audit function reports to the Audit Committee and is guided by the Audit Charter. Findings and recommendations for improvements are communicated to senior management and the Audit Committee with regular follow up on the implementation status of action plans. The Internal Audit function adopts a risk- based approach in the review of internal controls based on an annual audit plan approved by the Audit Committee. The Internal Audit function undertakes a review of the Company’s application and compliance with the corporate governance principles and best practices of the Malaysian Code on Corporate Governance. The Internal Audit function also examines the adequacy and effectiveness of the verification, recording and disclosure procedures for related party transactions, recurrent or otherwise, in conformance with Bursa Malaysia Listing Requirements on related party transactions.

• Revenue assurance function’s key objectives are to ensure that the system of internal control is strengthened from end to end to prevent revenue leakage, ensure product profitability by monitoring product performance and strengthen collection procedures and credit policies.

• Fraud control and credit management functions are in place to ensure that subscriber usage patterns are continuously monitored, appropriate actions taken immediately for suspected fraud, and customer acceptance and credit management procedures adhered to.

• Financial and operational information is prepared and presented to the Board. Annual budgets and business plans are prepared by all business units and consolidated at Group level for the Board’s approval. Operating results are monitored by Senior Management against budgets on a monthly basis. The Audit Committee and Board review the results on a quarterly basis to enable it to track the Group’s achievement against its annual targets.

• Operational and accounting manuals are in place to guide key business processes and regularly updated for application across the Group. In addition, ISO 9001 : 2000 procedures for billing, activation, collection and customer service assurance are regularly monitored to ensure compliance.

• Procedures for hiring, termination, appraisal and training of employees are in place to ensure that the Group’s human resource requirements are met in achieving its business objectives.

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• Human resource policies and code of conduct are available to all employees via the intranet. All employees are required to sign a confidentiality agreement and a Declaration of Conflict of Interests and renew their declaration of non-conflict of interest every year.

• Policies and procedures are countinuously updated during the financial year and deposited in a central repository to enable all employees to gain easy access for their reference.

• Quality of Service (“QoS”) processes that measure and monitor billing performance, customer complaints, service availability, service restoration performance and network performance, are in place to ensure compliance with Mandatory Standards for QoS issued by the regulator.

• Management meetings are held regularly to discuss strategic and operational issues to ensure that targets and objectives are met.

Review of the Statement by External Auditors

The external auditors have reviewed this Statement on Internal Control for inclusion in the annual report of the Group for the year ended 31 December 2006 and reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal controls.


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Directors’ Report60Statement By Directors63Statutory Declaration64

Report of the Auditors65Balance Sheet66Income Statement67

Statement of Changes in Equity68Cash Flow Statement69

Notes to the Financial Statements71

FINANCIAL STATEMENTS

The Directors hereby submit their report and the audited Financial Statements of the Group and the Company for the financial year ended 31 December 2006.

Principal Activities

The principal activities of the Company are investment holding and the provision of management and marketing/promotional services and retailing of telecommunications products.The principal activities of the subsidiary companies are disclosed in Note 6 of the Financial Statements.

There have been no significant changes in the nature of the activities of the Company and its subsidiary companies during the financial year.

Results

Group Company RM’000 RM’000

Loss for the year 177,782 13,285

Reserves and Provisions

There were no material transfers to or from reserves and provisions during the financial year.

Dividends

No dividend was paid during the financial year and the Directors do not recommend any dividend to be paid for the year under review.

Directors of the Company

Directors who served since the date of the last report are:

Dato’ Ir. Wan Muhamad Wan Ibrahim Dato’ Abdul Rahim Abu Bakar Dato’ Shaik Daud Md Ismail Elakumari Kantilal Abdul Kadir Md Kassim Kamaludin Abdul Kadir Amiruddin Abdul Aziz Azian Mohd Noh (appointed on 29.3.2006)

Tan Kim Shah (resigned on 24.4.2006)

None of the Directors holding office as at 31 December 2006 had any interest in the ordinary shares of the Company and of its related corporations during the financial year.

for the year ended 31 December 2006

Directors’ Report

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Directors’ Benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the Financial Statements or the fixed salary of a full time employee of the Company or corporate shareholder) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than certain Directors who have significant financial interests in companies which traded with certain companies in the Group in the ordinary course of business and legal fees paid to a firm in which a Director is a member.

There were no arrangements during and at the end of the financial year, which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of the Company or any other body corporate.

Issue of Shares and Debentures

There were no changes in the issued and paid-up capital of the Company during the financial year.

Options Granted over Unissued Shares

No options were granted to any person to take up unissued shares of the Company during the year.

Other Statutory Information

Before the balance sheets and income statements of the Group and the Company were made out, the Directors took reasonable steps to ascertain that:

i) all known bad debts have been written off and adequate provision made for doubtful debts, and

ii) all current assets have been stated at the lower of cost and net realisable value.

At the date of this report, the Directors are not aware of any circumstances:

i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the Group and in the Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the Group and the Company Financial Statements misleading, or

iii) which 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, or

iv) not otherwise dealt with in this report or the Financial Statements, that would render any amount stated in the Financial Statements of the Group and the Company misleading.

At the date of this report, there does not exist:

i) any charge on the assets of the Group or the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or the Company that has arisen since the end of the financial year.

Directors’ Reportfor the year ended 31 December 2006

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Directors’ Reportfor the year ended 31 December 2006

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve (12) months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, except for the Voluntary Separation Scheme (VSS) as disclosed in the Financial Statements, the results of the operations of the Group and the Company for the financial year ended 31 December 2006 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

Significant Events During the Year

The Board of Directors had approved a Voluntary Separation Scheme (VSS) on 26 September 2006. On 1 November 2006, the Group announced the VSS to all eligible staffs of the Group (excluding the employees of TIME Reach Sdn Bhd) as part of its restructuring plan and workforce optimisation plan. The Group had completed the exercise on 29 December 2006 with the total of 262 and 30 applicants were approved and separated from the Group and the Company, respectively. The cost incurred by the Group and the Company amounted to RM13,592,074 and RM2,046,110, respectively.

During the year, the Group was officially awarded with the third generation (3G) IMT-2000 UMTS Spectrum by the Malaysian Communications and Multimedia Commission (MCMC). The Spectrum Assignment covers the 1965 MHz to 1980 MHz, 2155 MHz to 2170 MHz and 2010 MHz to 2015 MHz frequency brands, and is valid for the period from 8 November 2006 until 1 April 2018.

Auditors

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

…………………………………………………………Dato’ Ir. Wan Muhamad Wan Ibrahim

…………………………………………………………Elakumari Kantilal

Kuala Lumpur, Malaysia

Date: 27 February 2007

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In the opinion of the Directors, the Financial Statements set out on pages 66 to 94 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs the Group and of the Company at 31 December 2006 and of the results of their operations and cash flows for the year ended on that date.

Signed in accordance with a resolution of the Directors:

…………………………………………………………Dato’ Ir. Wan Muhamad Wan Ibrahim

…………………………………………………………Elakumari Kantilal



Statement by Directorspursuant to Section 169(15) of the Companies Act, 1965

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I, Eric Cheng Dek, the officer primarily responsible for the financial management of TIME dotCom Berhad, do solemnly and sincerely declare that the Financial Statements set out on pages 60 to 96 are, to the best of my knowledge and belief, 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 by the above named in Kuala Lumpur on 27 February 2007.

…………………………………………………………Eric Cheng Dek

Before me:

Statutory Declarationpursuant to Section 169(16) of the Companies Act, 1965

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We have audited the Financial Statements set out on pages 66 to 94. The preparation of the Financial Statements is the responsibility of the Company’s Directors.

It is our responsibility to form an independent opinion, based on our audit, on the Financial Statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person for the content of this report.

We conducted our audit in accordance with approved Standards on Auditing 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 our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the Financial Statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of:

i) the state of affairs of the Group and of the Company at 31 December 2006 and the results of their operations and cash flows for the year ended on that date; and

ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the Financial Statements of the Group and the Company; and

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the said Act.

We are satisfied that the Financial Statements of the subsidiaries 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 audit reports on the Financial Statements of the subsidiaries were not subject to any qualification and did not include any comment made under subsection (3) of Section 174 of the Act.

………………………………………………………… …………………………………………………………KPMG Chan Kam ChiewFirm Number: AF 0758 PartnerChartered Accountants Approval Number: 2055/06/08(J)



Report of the Auditorsto the members of TIME dotCom Berhad

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Group Company Note 2006 2005 2006 2005 RM’000 RM’000 RM’000 RM’000

Assets

Property, plant and equipment 3 50,598 61,215 1,143 2,912 Telecommunications network 4 1,400,963 1,501,842 - - Goodwill on consolidation 5 591,401 591,401 - - Investment in subsidiaries 6 - - 2,913,132 2,913,132 Total non-current assets 2,042,962 2,154,458 2,914,275 2,916,044

Inventories 7 7,903 8,858 - - Receivables, deposits and prepayments 8 86,864 118,284 413,502 378,373 Cash and cash equivalents 9 147,376 210,186 9,156 45,338

Total current assets 242,143 337,328 422,658 423,711

Total assets 2,285,105 2,491,786 3,336,933 3,339,755

Equity

Share capital 10 2,530,775 2,530,775 2,530,775 2,530,775 Share premium 11 1,570,758 1,570,758 1,570,758 1,570,758 Accumulated losses (1,958,584) (1,780,802) (780,290) (767,005)Total equity 2,142,949 2,320,731 3,321,243 3,334,528

Liabilities

Payables and accruals 12 119,186 150,231 15,690 5,227 Deferred Income 22,488 20,406 - - Taxation 482 418 - -

Total current liabilities 142,156 171,055 15,690 5,227

Total equity and liabilities 2,285,105 2,491,786 3,336,933 3,339,755

Balance Sheetas at 31 December 2006

The notes on pages 71 to 94 are an integral part of these financial statements.

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Revenue 13 335,395 459,927 3,391 4,586Cost of sales 14 (371,247) (517,461) - -

Gross (loss)/profit (35,852) (57,534) 3,391 4,586

Other income 3,025 5,477 383 271Distribution expenses (40,200) (37,950) (714) (640)Administrative expenses (90,281) (97,665) (16,379) (14,477)Other expenses (20,264) (20,789) (1,171) (1,388)

Results from operating activities (183,572) (208,461) (14,490) (11,648)Interest income 15 6,548 5,604 1,205 2,134Finance costs 16 (52) (195) - - Impairment loss on investment in a subsidiary company - - - (134,597)Impairment loss on goodwill of a subsidiary company - (34,874) - -

Loss before tax 17 (177,076) (237,926) (13,285) (144,111)Tax expense 18 (706) (972) - -

Loss for the year (177,782) (238,898) (13,285) (144,111)

Basic loss per ordinary share (sen) : 19 (7.0) (9.4)

Income Statementfor the year ended 31 December 2006


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Share Share Accumulated capital premium losses Total RM’000 RM’000 RM’000 RM’000Group

At 1 January 2005 2,530,775 1,570,758 (1,541,904) 2,559,629Loss for the year - - (238,898) (238,898)

At 31 December 2005 2,530,775 1,570,758 (1,780,802) 2,320,731Loss for the year - - (177,782) (177,782)

At 31 December 2006 2,530,775 1,570,758 (1,958,584) 2,142,949

Note 10 Note 11

Company

At 1 January 2005 2,530,775 1,570,758 (622,894) 3,478,639 Loss for the year - - (144,111) (144,111)

At 31 December 2005 2,530,775 1,570,758 (767,005) 3,334,528Loss for the year - - (13,285) (13,285)

At 31 December 2006 2,530,775 1,570,758 (780,290) 3,321,243

Note 10 Note 11

Statement of Changes in Equityfor the year ended 31 December 2006


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Cash flows from operating activities Cash receipts from customers 377,356 451,322 2,572 2,462 Cash receipts from Government 6,870 24,658 - - Cash payments to suppliers (271,673) (379,516) (7,879) (13,110) Cash payments to employees and for administrative expenses (87,548) (80,817) (10,696) (9,450) Cash received from subsidiary company - - 34,725 - Cash advance to subsidiary company - - (56,953) (40,911)

Cash generated from/(used in) operations 25,005 15,647 (38,231) (61,009) Tax paid (994) (1,292) - - Tax refund 1,085 - 713 126

Net cash generated from/(used in) operating activities 25,096 14,355 (37,518) (60,883)

Cash flows from investing activities Purchase of property, plant and equipment and telecommunications network (ii) (89,732) (51,981) (38) - Purchase of property, plant and equipment for USP Project (4,961) (17,002) - - Proceeds from disposal of property, plant and equipment 392 483 21 33 Interest received 6,395 5,571 1,353 2,134

Net cash (used in)/generated from investing activities (87,906) (62,929) 1,336 2,167

Net decrease in cash and cash equivalents (62,810) (48,574) (36,182) (58,716)Cash and cash equivalents at 1 January (i) 210,186 258,760 45,338 104,054

Cash and cash equivalents at 31 December 9 147,376 210,186 9,156 45,338

Cash Flow Statementfor the year ended 31 December 2006

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i) Cash and cash equivalents

Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:


Cash and bank balance 9 10,800 5,557 324 310 Deposits placed with licensed bank 9 86,576 204,629 8,832 45,028 Deposits pledged with licensed bank 9 50,000 - - -

147,376 210,186 9,156 45,338

ii) Acquisition of property, plant and equipment and telecommunications network

During the year, the Group acquired property, plant and equipment and telecommunications network with an aggregate cost of RM99,789,000 (2005 - RM69,986,000). During the financial year, the Group paid RM94,693,000 (2005 - RM68,983,000) to suppliers of which RM1,003,000 is in respect of payments made to suppliers for property, plant and equipment and telecommunications network acquired in the prior financial years and RM6,099,000 will be paid after 2006.

Cash Flow Statementfor the year ended 31 December 2006


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TIME dotCom Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Board of the Malaysia Securities Exchange Berhad. The address of its registered office and principal place of business is as follows:

Registered Office and Principal Place of BusinessLevel 1, Wisma TIME249, Jalan Tun Razak50400 Kuala Lumpur

The Consolidated Financial Statements as at and for the year ended 31 December 2006 comprise the Company and its subsidiaries (together referred to as the Group). The Financial Statements of the Company as at and for the year ended 31 December 2006 do not include other entities.

The Company is principally engaged in investment holding and the provision of management and marketing/promotional services and retailing of telecommunications products.

1. Basis of preparation

(a) Statement of compliance

The Financial Statements of the Group and the Company have been prepared in accordance with applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board (MASB), accounting principles generally accepted in Malaysia and the provisions of the Companies Act, 1965. These Financial Statements also comply with the applicable disclosure provisions of the Listing Requirements of the Bursa Malaysia Securities Berhad.

The MASB has issued a number of new and revised Financial Reporting Standards (FRSs) that are effective for accounting periods beginning after 1 January 2006 or available for early adoption. In this set of Financial Statements, the Group has chosen not to early adopt FRS 117, Leases and FRS 124, Related Party Disclosures which are effective for annual periods beginning on or after 1 October 2006.

The MASB has also issued FRS 139, Financial Instruments: Recognition and Measurement but for which the MASB has yet to announce the effective date of this standard. The Group has not adopted FRS 139 and by virtue of the exemption in paragraph 103AB of FRS 139, the impact of applying FRS 139 on its financial statements upon first adoption of this standard as required by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed. On 15 August 2006, the MASB issued FRS 6, Exploration for and Evaluation of Mineral Resources which will be effective for annual periods beginning on or after 1 January 2007 and for which is not applicable to the Group. Hence, no further disclosure is warranted.

There is no material effect of adopting the new / revised FRSs in 2006.

The Financial Statements were approved by the Board of Directors on 27 February 2007.

(b) Basis of measurement

The Fnancial Statements have been prepared on the historical cost basis except as disclosed in the notes to the Financial Statement.

Notes to the Financial Statements

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1. Basis of preparation (cont’d)

(c) Functional and presentation currency

These Financial Statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated.

(d) Use of estimates and judgements

The preparation of Financial Statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

2. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these Financial Statements, and have been applied consistently by Group entities.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.

The Financial Statements of subsidiaries are included in the Consolidated Financial Statements from the date that control commences until the date that control ceases.

Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses.

(ii) Transactions eliminated on consolidation

Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(b) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.


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2. Significant accounting policies (cont’d)

(b) Property, plant and equipment (cont’d)

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.

(iii) Depreciation

Depreciation is recognised in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows:

• buildings 50 years • improvements 5 years • office equipment, furniture and fittings 2 - 20 years • loose tools 2 - 10 years • computer systems 3 - 10 years • motor vehicles 5 years

The depreciable amount is determined after deducting the residual value.

Depreciation method, useful lives and residual values are reassessed at the reporting date.

(c) Telecommunications network

(i) Recognition and measurement

The telecommunications network is constructed under the telecommunications licensed granted by the Ministry of Energy, Communications and Multimedia (“the Ministry”).

In 1998, the Communications and Multimedia Act, 1998 (which repealed the Telecommunications Act, 1950) introduced a new licensing regime for the telecommunications and broadcasting industries. The following new licences were granted by the Ministry to the Group in August 2001. These new licences are not technology specific but based on activity:

Network facilities Effective date TT dotCom Sdn. Bhd. 25 July 2001 to 30 November 2014 TIME Reach Sdn. Bhd. 25 July 2001 to 24 July 2011 TIMESat Sdn. Bhd. 25 July 2001 to 24 July 2011

Network services TT dotCom Sdn. Bhd. 25 July 2001 to 30 November 2014 TIMESat Sdn. Bhd. 25 July 2001 to 24 July 2011

Effective 1 April 2005, all Application Service Provider Individual Licence categories are regulated under Applications Service Provider class licensing. As such licenses are renewable annually.


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(c) Telecommunications network (cont’d)

(i) Recognition and measurement (cont’d)

On 11 August 2000, TIME dotNet Berhad was granted an Internet Application Service Provider Licence (class licence) for a tenure of one (1) year from 4 August 2000, which is renewable annually. Network cost comprises construction costs, materials, consultancy, borrowing and other related costs incurred in connection with the construction of the telecommunications network. Network cost also includes the costs of dismantling and removing the items and restoring the site on which they are located.

The construction of the telecommunications network is carried out in phases based generally on geographical areas as determined by the Group. The commissioning of the network is accordingly carried out at the completion of each phase of construction. Pre-commissioning network cost is not amortised.

Expenditure incurred in acquiring spectrum rights will be capitalised as intangible assets and will be amortised using the straight line method over the shorter of their estimated useful life or spectrum assignment period of 12 years, commencing from the launch of commercial services on the related networks which is expected to happen in the next financial year.

(ii) Subsequent costs

The cost of replacing part of an item of telecommunication network is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of telecommunication network are recognised in the income statement as incurred.

(iii) Depreciation

The Group depreciates its network cost/ISP infrastructure cost over the term of their estimated useful lives:

Telecommunication assets Estimated useful lives Distribution systems 10 to 25 years Communication systems 5 to 15 years Support System 3 to 15 years

The depreciable amount is determined after deducting the residual value.

Depreciation method, useful lives and residual values are reassessed at the reporting date.

(d) Intangible asset

(i) Goodwill

Goodwill arises on the consolidation of subsidiaries.

For acquisitions prior to 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the fair values of the net identifiable assets and liabilities.


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(d) Intangible asset (cont’d)

(i) Goodwill (cont’d)

With the adoption of FRS 3 beginning 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.

Goodwill is measured at cost and is no longer amortised but tested for impairment at least annually or more frequently when there is objective evidence of impairment. When the excess is negative (negative goodwill), it is recognised immediately in the income statement.

Goodwill is allocated to cash-generating units and is tested annually for impairment (refer to Note 2(k)) or more frequently if events or changes in circumstances indicate that it might be impaired.

(e) Investments

Investment in subsidiary companies

Investment in subsidiary companies is stated in the Company’s Financial Statements at cost less accumulated impairment losses (refer to Note 2(k)).

(f) Receivables

Receivables are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is established.

Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.

Receivables are not held for the purpose of trading. (g) Employee benefits

(i) Shorttermemployeebenefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

The Group’s contribution to the Employee’s Provident Fund are charged to the income statements in the year to which they relate. Once the contributions have been paid, the Group has no further payment obligations.

(ii) Terminationbenefits

Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date. Termination benefits for voluntary redundancies are recognised if the Group has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably.


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(h) Payables

Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation to deliver cash or another financial asset to another entity.

(i) Inventories

Inventories are valued at the lower of cost (determined on the moving-average method) and net realisable value. The costs of spares, phone cards and trading merchandise comprise the original purchase price plus costs of bringing these stocks to location. Net realisable value represents the estimated selling price in the ordinary course of business less selling and distributions costs and all other estimated costs to completion.

(j) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in value. For the purpose of cashflow statement, cash and cash equivalent are presented inclusive of pledged deposits.

(k) Impairment of assets

The carrying amounts of assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment.

If any such indication exists then the asset’s recoverable amount is estimated.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to the income statement in the year in which the reversals are recognised.

(l) Tax expense

Tax expense comprises current and deferred tax. Tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

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(l) Tax expense (cont’d)

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit (tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax liability is recognised for all taxable temporary differences.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(m) Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transaction.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the income statement.

(n) Revenue

(i) Services

Revenue of the Company consists of management fee and gross invoiced value of telecommunications products sold net of discounts and returns. Fees are recognised when services are rendered while sales of products are recognised upon delivery of products and when the risks and rewards of ownership have passed.

Revenue of the Group consists of gross billings of a wide range of telecommunications and internet services provided net of discounts, income from payphone operations and gross invoiced value of goods sold net of discounts and returns. Revenue for billings is recognised when services are rendered while revenue for payphone operations is recognised on receipt basis.

(ii) Government grants

As a Universal Service Provider (USP), the Group is entitled to claim certain qualified expenses from the relevant authorities in relation to USP projects. The claim qualifies as a government grant and is recognised at fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

Government grants are recognised as income over the periods necessary to match them with the related costs, which they are intended to compensate.

Government grants relating to the purchase of assets are included in current liabilities as “deferred income” and are credited to the Income Statement on the straight line basis to match the income with the estimated useful lives of the related assets.

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3. Property, plant and equipment

Lands, Office buildings equipment, and furniture Loose Computer Motor improvements and fittings tools systems vehicles Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group Cost At 1 January 2005 54,103 33,120 11,759 59,159 13,210 171,351 Additions 331 5,509 29 3,818 5 9,692 Disposals (4,562) (23) - (147) (1,859) (6,591)

At 31 December 2005/ 1 January 2006 49,872 38,606 11,788 62,830 11,356 174,452 Additions 203 484 - 5,472 66 6,225 Disposals - (31) - (98) (1,079) (1,208) Write off - (107) - - - (107)

At 31 December 2006 50,075 38,952 11,788 68,204 10,343 179,362

Depreciation At 1 January 2005 : Accumulated depreciation 20,809 26,471 8,804 33,761 11,844 101,689 Depreciation for the year 2,797 3,290 1,159 10,486 388 18,120 Disposals (4,562) (23) - (147) (1,840) (6,572)

At 31 December 2005/ 1 January 2006 Accumulated depreciation 19,044 29,738 9,963 44,100 10,392 113,237 Depreciation for the year 2,419 2,901 706 10,377 379 16,782 Disposals - (20) - (50) (1,079) (1,149) Write off - (106) - - - (106)

At 31 December 2006 Accumulated depreciation 21,463 32,513 10,669 54,427 9,692 128,764

Carrying amounts At 1 January 2005 33,294 6,649 2,955 25,398 1,366 69,662

At 31 December 2005/ 1 January 2006 30,828 8,868 1,825 18,730 964 61,215

At 31 December 2006 28,612 6,439 1,119 13,777 651 50,598

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3. Property, plant and equipment (cont’d)

Office equipment, furniture Computer Motor Improvements and fittings systems vehicles Total RM’000 RM’000 RM’000 RM’000 RM’000

Company

Cost At 1 January 2005 3,021 1,764 8,282 267 13,334 Disposal - - - (60) (60)

At 31 December 2005/ 1 January 2006 3,021 1,764 8,282 207 13,274 Additions - 38 - - 38 Disposal - - - (114) (114)

At 31 December 2006 3,021 1,802 8,282 93 13,198

Depreciation At 1 January 2005 : Accumulated depreciation 2,159 1,452 4,073 243 7,927 Depreciation for the year 605 244 1,622 5 2,476 Disposals - - - (41) (41)

At 31 December 2005/ 1 January 2006 Accumulated depreciation 2,764 1,696 5,695 207 10,362 Depreciation for the year 199 56 1,552 - 1,807 Disposals - - - (114) (114)

At 31 December 2006 Accumulated depreciation 2,963 1,752 7,247 93 12,055

Carrying amounts At 1 January 2005 862 312 4,209 24 5,407

At 31 December 2005/ 1 January 2006 257 68 2,587 - 2,912

At 31 December 2006 58 50 1,035 - 1,143

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3. Property, plant and equipment (cont’d)

Land, buildings and improvements comprise the following: Accumulated Net book value Cost depreciation 2006 2005 RM’000 RM’000 RM’000 RM’000 Group Freehold land 11,154 - 11,154 11,154 Land under long lease 90 - 90 90 Land under short lease 7,508 4,149 3,359 3,736 Buildings 7,707 2,076 5,631 5,787 Buildings and improvements 23,616 15,238 8,378 10,061

50,075 21,463 28,612 30,828

The unexpired lease period of leasehold land and buildings of the Group is as follows:

Group Net book value 2006 2005 RM’000 RM’000

Land under long lease - 81 to 85 years 90 90 Land under short lease - 11 to 15 year 3,359 3,736

3,449 3,826

Included in property, plant and equipment of the Group and of the Company are fully depreciated assets which are still in use, with cost amounting to RM74,856,020 (2005 - RM64,660,000) and RM7,279,917 (2005 - RM2,274,000) respectively.

4. Telecommunications network

Domestic and ISP international Payphone infrastructure Total RM’000 RM’000 RM’000 RM’000

Group

Cost At 1 January 2005 2,521,828 260,760 57,529 2,840,117 Additions 57,536 537 2,221 60,294 Write off (87,928) (4,232) - (92,160)

At 31 December 2005/ 1 January 2006 2,491,436 257,065 59,750 2,808,251 Additions 91,722 809 1,033 93,564 Disposal (24,280) - - (24,280) Write off - (21,019) - (21,019)

At 31 December 2006 2,558,878 236,855 60,783 2,856,516


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4. Telecommunications network (cont’d)

Domestic and ISP international Payphone infrastructure Total RM’000 RM’000 RM’000 RM’000

Group

Depreciation At 1 January 2005: Accumulated depreciation 905,151 225,712 26,333 1,157,196 Accumulated impairment loss 6,600 - - 6,600

911,751 225,712 26,333 1,163,796

Depreciation for the year 200,788 9,615 24,088 234,491 Write off (82,664) (3,950) - (86,614) Impairment losses written off (5,264) - - (5,264) At 31 December 2005/ 1 January 2006 Accumulated depreciation 1,023,275 231,377 50,421 1,305,073 Accumulated impairment loss 1,336 - - 1,336 1,024,611 231,377 50,421 1,306,409 Depreciation for the year 181,480 7,412 4,530 193,422 Disposal (24,182) - - (24,182) Write off - (20,096) - (20,096)

At 31 December 2006

Accumulated depreciation 1,180,573 218,693 54,951 1,454,217 Accumulated impairment loss 1,336 - - 1,336

1,181,909 218,693 54,951 1,455,553

Carrying amounts At 1 January 2005 1,610,077 35,048 31,196 1,676,321

At 31 December 2005/ 1 January 2006 1,466,825 25,688 9,329 1,501,842

At 31 December 2006 1,376,969 18,162 5,832 1,400,963

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4. Telecommunications network (cont’d)

Domestic and ISP Total international Payphone infrastructure 2006 2005 RM’000 RM’000 RM’000 RM’000 RM’000

Network cost: Commissioned network 2,442,740 236,855 60,783 2,740,378 2,731,373 Network in progress 116,138 - - 116,138 76,878

2,558,878 236,855 60,783 2,856,516 2,808,251 Less: Impairment loss (1,336) - - (1,336) (1,336) Less: Cumulative depreciation (1,180,573) (218,693) (54,951) (1,454,217) (1,305,073)

At end of year 1,376,969 18,162 5,832 1,400,963 1,501,842

Included in telecommunications network of the Group are fully depreciated assets which are still in use, with cost amounting to RM770,053,196 (2005 - RM782,788,000).

5. Goodwill on consolidation

Group 2006 2005 RM’000 RM’000

At beginning of year 591,401 626,275 Less: Impairment losses for the year - (34,874)

At end of year 591,401 591,401

6. Investment in subsidiary companies

Company 2006 2005 RM’000 RM’000 At cost: Unquoted shares 3,116,838 3,116,838

Less: Impairment loss At beginning of year (203,706) (69,109) Charge for the year - (134,597)

At end of year (203,706) (203,706)

2,913,132 2,913,132


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6. Investment in subsidiary companies (cont’d)

Details of the subsidiaries companies are as follows: Effective ownership interest Country of 2006 2005 Name of subsidiary incorporation Principal activities % % TT dotCom Sdn Bhd Malaysia Provision of voice, data, video and 100 100 image communication services through its established domestic and international network.

TIME Reach Sdn Bhd Malaysia Operation and maintenance of 100 100 payphone services.

TIMESat Sdn Bhd Malaysia Provision of telecommunication 100 100 facilities and services using satellite and microwave. The company is currently dormant.

TIME dotNet Bhd Malaysia Provision and marketing of internet 100 100 services to customers. This includes the provision of access to the world wide web, the organisation and aggregation of content, provision of virtual private network, on-line call center, internet telephony, on-line services, on-net advertising and virtual data storage and provision of application services.

7. Inventories

Group Company 2006 2005 2006 2005 RM’000 RM’000 RM’000 RM’000

At cost: Spares 9,834 10,595 - - Trading merchandise 151 151 151 151 Phone cards 51 72 - -

10,036 10,818 151 151 Less: Allowance for obsolescence (2,133) (1,960) (151) (151)

Net 7,903 8,858 - -


83

8. Receivables, deposits and prepayments

Group Company Note 2006 2005 2006 2005 RM’000 RM’000 RM’000 RM’000 Current Trade Trade receivables (a) 97,891 117,182 - 13 Less: Allowance for doubtful debts (57,051) (62,899) - -

40,840 54,283 - 13

Non - trade Amounts due from subsidiaries (b) - - 411,330 372,337 Other receivables 41,696 55,953 391 - Prepayments 2,986 5,973 832 4,362 Tax recoverable 1,342 2,075 949 1,661

86,864 118,284 413,502 378,373

Note (a) During the financial year, no bad debt was written off against allowance for doubtful receivables (2005 - RM21,834,000).

Note (b) The amounts due from subsidiary companies are interest free, have no fixed repayment terms and arose mainly from inter company advances and expenses paid on behalf.

9. Cash and cash equivalents


Cash and bank balances 10,800 5,557 324 310 Deposits placed with licensed banks 136,576 204,629 8,832 45,028

147,376 210,186 9,156 45,338

Deposits placed with licensed banks pledged for a bank facility

Included in the deposits placed with licensed bank is RM50,000,000 (2005 - Nil) pledged for a bank facility granted to subsidiary and is restricted from use in other operations.


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10. Capital and reserves

Group and Company 2006 2005 RM’000 RM’000 Authorised: Ordinary shares of RM1 each 5,000,000 5,000,000

Issued and fully paid: Ordinary shares of RM1 each 2,530,775 2,530,775

11. Share premium (non-distributable)

Group and Company 2006 2005 RM’000 RM’000 At the beginning and end of year 1,570,758 1,570,758

12. Payables and accruals

Group Company Note 2006 2005 2006 2005 RM’000 RM’000 RM’000 RM’000 Trade Trade payables (a) 27,034 42,508 - -

Non - trade Other payables 14,617 9,557 2,399 1,977 Accrued expenses 57,094 75,725 1,113 3,161 Deposit payables 7,278 7,459 - - Amounts due to a subsidiary company - - 12,178 - Amounts due to related parties (b) 13,163 14,982 - 89

119,186 150,231 15,690 5,227

Note (a) The average credit period granted to the Group and to the Company for trade purchases ranges from 30 to 90 days (30 to 90 days in 2005).

Note (b) Related parties are TIME Engineering Berhad (“TEB”) (a corporate shareholder of the Company) and its subsidiaries and associated companies, and companies that are related to the Company’s corporate shareholder, Khazanah Nasional Berhad.


85

13. Revenue

2006 2005 RM’000 RM’000 Group Individual Licence Revenue 79,494 178,819 Class Licence Revenue 224,238 254,029 Non Licence Revenue 31,663 27,079

335,395 459,927

Company Management fee receivable from subsidiary companies 3,391 4,586

14. Cost of sales

Group 2006 2005 Note RM’000 RM’0000

Interconnect charges 95,683 173,200 Depreciation of telecommunications network 4 193,422 234,491 Telecommunications maintenance charges 21,400 32,406 Payphone line rental 12,714 13,212 Network and leased line charges 6,908 9,860 Fee for wayleave and right of use pertaining to telecommunications facilities 14,473 13,784 Others 26,647 40,508

371,247 517,461

15. Income from other investments


Interest income from short-term deposits 6,548 5,604 1,205 2,134

16. Finance costs Group 2006 2005 RM’000 RM’000 Interest on late payment 52 195


86


17. Loss before tax

Group Company 2006 2005 2006 2005 Note RM’000 RM’000 RM’000 RM’000

Operating loss is arrived at after charging: Cost of sales 14 371,247 517,461 - - Personnel expenses - Contributions to Employee Provident Fund 9,430 9,666 1,146 1,144 - Salaries and allowances 85,902 74,760 11,755 9,494 Depreciation of property, plant and equipment 3 16,782 18,120 1,807 2,476 Rental of: Premises 5,791 6,920 770 1,334 Equipment 746 899 139 144 Motor vehicles 120 154 48 87 Telecommunications network written off 923 282 - - Property, plant and equipment written off 1 - - - Directors’ remuneration 20 715 1,219 703 1,206 Auditor’s remuneration 105 105 25 25 Voluntary Separation Scheme expenses 13,592 - 2,016 -

and after crediting: USP contribution - 3,056 - - Impairment losses of telecommunication network written back - 5,264 - - Allowance for doubtful debt no longer required 1,328 666 - - Gain on disposal of property, plant and equipment and telecommunications network 235 464 21 14 Net realised gain on foreign exchange 453 37 - - Rental income 144 125 73 62 Allowance for inventory obsolescence written back - 273 - -


87


18. Tax expense

Group Company 2006 2005 2006 2005 Note RM’000 RM’000 RM’000 RM’000 Tax expense 706 972 - -

Total tax expense 706 972 - -

The provision for current tax payable made in the Group in 2006 is in respect of interest income of certain subsidiary companies received during the financial year.

In 2005 provision for current tax payable was made on interest and rental income of certain subsidiary companies received during the financial year as there were no current year business losses available to offset against the interest and rental income earned.

Reconciliation of effective income tax expense:


Loss before tax (177,076) (237,926) (13,285) (144,111)

Tax at statutory tax rate of 28% (49,581) (66,619) (3,720) (40,351) Tax effect of expenses not deductible for tax purposes 1,504 39,395 86 37,828 Deferred tax assets not recognised 28,694 28,196 2,705 2,523 Effect of changes in tax rate* 18,677 - 929 -

Tax expense 706 972 - -

* In the Malaysian Budget 2007, it was announced that the corporate income tax rate will be reduced to 27% in 2007 and 26% in 2008. Consequently deferred tax assets are measured using these tax rates.

88



18. Tax expense (cont’d)

No deferred tax has been recognised for the following items:

Group Company 2006 2005 2006 2005 RM’000 RM’000 RM’000 RM’000 Temporary differences in respect of excess of tax capital allowances over book depreciation (1,160,253) (1,304,371) (566) (1,985) Unabsorbed capital allowances 2,340,731 2,328,783 11,558 11,318 Unutilised tax losses 620,670 610,624 80,062 70,016 Deductible temporary differences 66,541 63,471 2,665 601 Current year tax losses surrendered to subsidiary companies - - (790) -

Tax asset 1,867,689 1,698,507 92,929 79,950

Net tax asset 504,276 475,582 25,091 22,386

The unutilised tax losses, unabsorbed capital allowances and deductible temporary differences do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items in certain subsidiaries because of the recent history of losses incurred.

19. Loss per share

The basic loss per ordinary share in 2006 is calculated by dividing the Group’s net loss of RM177,782,000 by the number of ordinary shares in issue during the year of 2,530,775,000.

The basic loss per ordinary share in 2005 is calculated by dividing the Group’s net loss of RM238,898,000 by the number of ordinary shares in issue during the year of 2,530,775,000.

20. Directors’ remuneration


Executive directors: The Company Emoluments - 706 - 706

Non-executive directors: The Company Fees 308 309 308 309 Emoluments 224 46 224 46 Other emoluments 171 145 171 145 Subsidiary companies Fees 12 13 - -

715 1,219 703 1,206

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20. Directors’ remuneration (cont’d)

The estimated monetary value of benefits-in-kind received and receivable by directors of TIME dotCom Berhad otherwise than in cash from the Group and the Company amounted to RM15,500 (2005 - RM131,154) and RM15,500 (2005 - RM131,154), respectively.

Included in directors’ remuneration are amounts totalling RM72,000 (2005 - RM72,000) payable to a related party for services rendered by two (2005 - two) non-executive directors of the Company (Note 23). The number of directors of the Company whose remuneration fall into the respective bands are as follows: Range of Remuneration Executive directors Non-executive directors RM 50,000 and below - 3 50,001 to 100,000 - 5 100,001 and above - 1

21. Segment information

As the Group is principally involved in the telecommunications industry within Malaysia, segment information has not been presented.

22. Capital and other commitments

Telecommunications infrastructure Group Company 2006 2005 2006 2005 RM’000 RM’000 RM’000 RM’000

Authorised but not contracted for: Purchase and construction of telecommunications infrastructure 9,160 9,871 - -

Contracted but not provided for in the financial statements: Purchase and construction of telecommunications infrastructure 31,597 45,557 - -

90



22. Capital and other commitments (cont’d)

Lease commitments Future Minimum Lease Payments 2006 2005 RM’000 RM’000

Non cancellable commitments for rental of office premises, sites and right of use pertaining to telecommunications facilities Payable within 1 year 25,570 18,455 Payable within 2 – 3 years 38,145 37,020 Payable after 3 years 148,831 186,383

212,546 241,858

One of the subsidiary companies entered into an agreement with Projek Lebuhraya Utara-Selatan Berhad (“PLUS”) on wayleave and right of use pertaining to telecommunications facilities of the North-South Expressway (“PLUS Agreement”) for a fee equal to an annual sum of RM10,800,000 for the calendar year 2000 with an incremental amount of 5 per cent compounded annually up to the calendar year 2014. Thereafter the annual sum will remain at RM4,240,000 until the expiry of the agreement. The PLUS Agreement shall terminate upon the expiry of the concession agreement on 30 May 2030.

23. Related party transactions

The related parties and their relationship with the Company are as follows:

Name of related parties Relationship

TIME Engineering Berhad (“TEB”) A corporate shareholder of the Company

Khazanah Nasional Berhad (“Khazanah”) A corporate shareholder of the Company

UEM Group Berhad (“UEM”) (Formerly known as A subsidiary company of Khazanah United Engineers (Malaysia) Berhad)

UEM Group Management Sdn. Bhd. A subsidiary company of UEM

Telekom Malaysia Berhad An associated company of Khazanah

STLR Sdn. Bhd. A subsidiary company of Khazanah

Projek Lebuhraya Utara-Selatan Berhad A subsidiary company of UEM

Projek Penyelenggaraan Lebuhraya Berhad A subsidiary company of UEM

Messrs Kadir Andri & Partners A firm of which the Director is a member

TIME Quantum Technology Sdn. Bhd. A subsidiary company of TEB

91


23. Related party transactions (cont’d)

Significant transactions with related parties during the financial year are as follows:


With related parties Name of company TIME Engineering Berhad - Director’s remuneration 30 30 30 30 - Maintenance fee income (417) (185) (417) (185) Khazanah Nasional Berhad - Director’s remuneration 42 42 42 42 UEM Group Management Sdn. Bhd. - Management fees 205 205 205 205 Telekom Malaysia Berhad - Interconnect charges 80,229 113,353 - - - Interconnect revenue (25,510) (24,525) - - - Leased line cost 1,596 4,131 - - STLR Sdn. Bhd. - Rental expense 3,364 4,424 926 933 Projek Lebuhraya Utara-Selatan Berhad - Fee for wayleave and right of use of telecommunications facilities 14,473 13,784 - - Projek Penyelenggaraan Lebuhraya Berhad - Network maintenance 2,161 1,991 - - TIME Quantum Technology Sdn. Bhd. 872 800 - - Messrs Kadir Andri & Partners - Professional fees 266 235 46 175

With subsidiary companies

Company 2006 2005 Name of Company Nature RM’000 RM’000

TT dotCom Sdn. Bhd. Management fee income 2,065 2,707 TIME Reach Sdn. Bhd. Management fee income 1,076 1,690 TIME dotNet Berhad Management fee income 250 189

The directors of the Group and Company are of the opinion that the above transactions have been entered into in the normal course of business and have been established under terms that are no less favourable than those arranged with independent third parties.

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24. Financial instruments

Financial risk management objectives and policies

Exposure to credit, liquidity, interest rate and currency risk arises in the normal course of the Group and the Company’s business. The overall risk management programme of the Group and the Company seeks to minimise potential adverse effects of these risks on the financial performance of the Group and the Company. There was no trading in financial instruments during the year under review.

Credit risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all new customers. In respect of its trade customers, the Group and the Company require deposits as collateral. For other financial assets, the Group and the Company does not require collateral.

At balance sheet date, the significant concentrations of credit risk to the Group comes from four (2005 – four) major customers constituting 45% (2005 – 49%) of total trade receivables. As for the Company, there was no significant concentration of credit risk. The maximum exposure to credit risk for the Group and the Company are represented by the carrying amount of each financial asset. Liquidity risk

The Group and the Company’s holding of short term financial assets minimises liquidity risk as there are sufficient liquid assets to meet the Group and the Company’s operating requirements for the foreseeable future.

Interest rate risk

The Group and the Company are exposed to interest rate risk through the impact of rate changes on interest on short term deposits with licensed banks. The Group and the Company manage its interest rate risk for the interest-earning deposit placements by placing such balances on varying maturities and interest rate terms.

Foreign currency risk

The Group and the Company have a potential currency risk exposure in its trade transactions with a number of foreign companies where amounts owing by/to these companies are exposed to currency translation risks. All foreign exchange gains and losses are taken up in the income statement. Exposure to foreign currency risk is monitored on an ongoing basis and when considered necessary, the Group and the Company will consider using effective financial instruments to hedge its foreign currency risk.

93

24. Financial instruments (cont’d)

Effective interest rates and repricing analysis

In respect of interest earning financial assets, the effective interest rate at the balance sheet date and the periods in which they reprice or mature, whichever is earlier.

Effective More interest Within than rate per annum Total 1 year 1 year % RM’000 RM’000 RM’000

2006 Financial assets Short term deposits 3.22 136,576 136,576 -

2005 Financial assets Short term deposits 2.76 204,629 204,629 -

Fair value

The carrying amount of financial assets and liabilities approximate fair value due to the relatively short-term nature of these instruments.

25. Comparative figures

Certain comparative figures have been reclassified to conform with the presentation requirements of FRS 101.

As As previously restated reported RM’000 RM’000 Balance sheet Payables and accruals 150,231 170,637 Deferred income 20,406 -


94


Stockholding Analysisas at 30 March 2007

Authorised Share Capital : RM5,000,000,000.00

Issued and Paid-up Capital : RM2,530,775,000.00

Class of Shares : Ordinary Shares of RM1.00 each

No. of Shareholders : 22,785

Voting Right : 1 vote per Ordinary Share

Size of Holdings No. of Shareholders Total Holdings % Less than 100 106 1,942 Negligible100 to 1,000 8,200 8,014,602 0.321,001 to 10,000 11,073 52,207,960 2.0610,001 to 100,000 3,029 97,517,116 3.85100,001 to less than 5% of issued shares 373 309,365,394 12.235% and above of issued shares 4 2,063,667,986 81.54

Total 22,785 2,530,775,000 100

THIRTY (30) LARGEST SHAREHOLDERS AS AT 30 MARCH 2007

Names No. of shares %

1. Khazanah Nasional Berhad 760,209,826 30.04 2. Maju Nominees (Tempatan) Sdn Bhd - Pledged securities accounts for TIME Engineering Berhad 720,173,459 28.46 3. CIMB Trustee Berhad - TIME Engineering Berhad 309,421,161 12.23 4. Kumpulan Wang Persaraan (Diperbadankan) 273,863,540 10.82 5. Employees Provident Fund Board 56,271,284 2.22 6. HSBC Nominees (Asing) Sdn Bhd - Exempt An for JPMorgan Chase Bank, National Association (U.S.A.) 30,419,300 1.20 7. Citigroup Nominees (Asing) Sdn Bhd - Bear Stearns Securities Corp for Third Avenue Global Value Fund LP 30,000,000 1.19 8. Am Nominees (Tempatan) Sdn Bhd - Employees Provident Fund Board (A/C1) 16,622,300 0.66 9. HSBC Nominees (Asing) Sdn Bhd - Exempt An for J.P. Morgan Bank Luxembourg S.A. 16,379,100 0.65 10. Lembaga Tabung Angkatan Tentera 14,888,000 0.59 11. Public Invest Nominees (Tempatan) Sdn Bhd 9,970,500 0.39 12. Citigroup Nominees (Asing) Sdn Bhd - CBNY for DFA Emerging Markets Fund 8,911,700 0.35 13. Indera Permai Sdn Bhd 7,159,600 0.28 14. HSBC Nominees (Asing) Sdn Bhd - Seb Lux for ABB Capital Selection Asian Smaller Companies Fund 6,786,500 0.27 15. Cimsec Nominees (Tempatan) Sdn Bhd - CIMB for Indera Permai Sdn Bhd (PB) 3,100,000 0.12 16. Berjaya Sompo Insurance Berhad 2,800,000 0.11 17. Berjaya Sompo Insurance Berhad 2,415,000 0.09 18. Citigroup Nominees (Asing) Sdn Bhd - CBNY for DFA Emerging Markets Small Cap Series 1,976,300 0.08

95

Stockholding Analysis

THIRTY (30) LARGEST SHAREHOLDERS AS AT 30 MARCH 2007 (cont’d)

Names No. of shares %

19. Mohammad Allaudin Bin Md Ali 1,833,000 0.07 20. Khew Yit Len 1,727,000 0.07 21. Lau Kueng Suong 1,636,000 0.06 22. Gricia Gan Mei Hoong 1,490,000 0.06 23. Lai San Chai 1,455,400 0.06 24. RHB Investment Bank Berhad IVT (CF) 1,223,336 0.05 25. Saw Guan Keat Sdn Bhd 1,100,000 0.04 26. Portfolio Equity Corporation Sdn Bhd 1,050,000 0.04 27. Teo Kin Swee 1,000,000 0.04 28. Southern Nominees (Tempatan) Sdn Bhd - Pledged securities account for Ucis Sdn Bhd 1,000,000 0.04 29. RHB Capital Nominees (Tempatan) Sdn Bhd - Pledged securities account for Tan Keen Choong (CEB) 950,000 0.04 30. JF Apex Nominees (Tempatan) Sdn Bhd - Pledged securities account for Lim Kim Ong 940,600 0.04

TOTAL 2,286,772,906 90.36

SUBSTANTIAL SHAREHOLDERS AS OF 30 MARCH 2007

Direct Deemed Shareholder Interest (%) Interest (%)

TIME Engineering Berhad 1,029,594,620 (a) 40.68 - (a) - Khazanah Nasional Berhad 760,209,826 30 1,029,594,620 (b) 40.68 UEM Group Berhad (formerly known as 152 - 1,029,594,620 (c) 40.68 United Engineers (Malaysia) Berhad) Kumpulan Wang Persaraan 273,863,540 10.82 - - (Diperbadankan)

(a) 720,173,459 shares and 309,421,161 shares are held by Maju Nominees (Tempatan) Sdn Bhd and CIMB Trustee

Berhad respectively.

(b) Deemed interest through UEM Group Berhad (formerly known as United Engineers (Malaysia) Berhad).

(c) Deemed interest through TIME Engineering Berhad.

STATEMENT ON DIRECTORS’ INTERESTS IN SHARES

The Directors, on the Board of TIME dotCom deemed to have interest in the shares of the Company, by virtue of Section 6A(4)(c) of the Companies Act 1965:

(a) Dato’ Ir. Wan Muhamad Wan Ibrahim and Elakumari Kantilal being nominees of Khazanah Nasional Berhad;

(b) Abdul Kadir Md Kassim being a nominee of TIME Engineering Berhad and a director of UEM Group Berhad (formerly known as United Engineers (Malaysia) Berhad);

(c) Amiruddin Abdul Aziz being a nominee of TIME Engineering Berhad.

96


List of Properties

Approx. Description Net Book Area Age of Date of ValueLocation (sq metres) (years) Tenure Properties Purchase (RM’ 000)

TT dotCom Sdn Bhd

Lot No. 43 & 54 8,995 10 Freehold Land and 09/09/1994 3,688HICOM Glenmarie buildingIndustrial Park Shah AlamSelangor Darul Ehsan

Lot 6359, HSM 448 5,885 - Freehold Land 08/11/1995 2,520Mukim 1, Daerah SeberangPrai Tengah, Pulau Pinang

Lot PTD 3930, HS (D) 6137 10,940 9 Freehold Land 20/10/1995 4,946Mukim Tebrau, DaerahJohor Bahru, Jalan Riang 23 Taman Gembira Industrial Park Johor Bahru, Johor Darul Takzim

Kampung Sungai Bedaun 32,375 - Leasehold Land 15/2/1996 1,855Daerah Labuan (99 years Wilayah Persekutuan Labuan from 1984 to 2082)

Lot 37, Sungai Bedaun 12,141 - Leasehold Land 06/04/1996 35Settlement Scheme (99 years Daerah Labuan from 1984 Wilayah Persekutuan Labuan to 2082)

Lot 142-A, 10,117 21 Leasehold Land and 06/07/1996 1,423Semambu Industrial Park (66 years a single Kuantan, Pahang Darul Makmur from 1980 storey to 2046) building and cabin No. 1, Jalan Kilang 3, 2,162 - Leasehold Land 01/11/1997 155Jelapang Light Industrial Estate (60 years Ipoh, Perak Darul Ridzuan from 1976 to 2036)

102M, Lengkok Kg Jawa 2 881 23 Leasehold Land and 20/12/1997 652MIEL Bayan Lepas (60 years a single Industrial Estate from 1981 storey Pulau Pinang to 2041) building and cabin

Lot No. 469, Mukim Batu Burok 809 - Leasehold Land 26/1/1998 171Kuala Trengganu (99 years Trengganu Darul Iman from 1975 to 2074)

97

List of Properties

Approx. Description Net Book Area Age of Date of ValueLocation (sq metres) (years) Tenure Properties Purchase (RM’ 000)

TT dotCom Sdn Bhd(cont’d)

Lot PTD 1474, HS (D) 3432 1,237 - Leasehold Land 26/10/1999 37Mukim Jemaluang (60 years Daerah Mersing from 2001 Johor Darul Takzim to 2061)

Lot 26, Jalan 225, 4,577 31 Leasehold Land and 24/3/2003 5,139Petaling Jaya, (99 years a single Selangor Darul Ehsan from 1973 storey to 2072) building

TIME Reach Sdn Bhd

No. 31 & 32 260 13 Leasehold Land and 01/02/1994 260Komplek Sukan Lebuhraya (99 years 2 lots Sultan Abdul Halim from 1986 double05400 Alor Setar to 2085) storeyKedah Darul Aman shophouse 6765, Jalan Kampung Gajah 156 12 Freehold Land and 01/09/1994 35412200 Butterworth a 3 storeyPulau Pinang shop/ office No. 125, Medan Kikik Satu 120 14 Freehold Land and 01/01/1993 267Taman Inderawasih a 3 storey13600 Seberang Prai shop/Pulau Pinang office 133G & 135 260 14 Freehold Land and 10/01/1993 360Jalan Dato’ Lau Pak Khuan 2 lotsIpoh Garden, 31400 Ipoh doublePerak Darul Ridzuan storey shophouse No. 21, Taman Bukit Hijau 149 11 Leasehold Land and 01/02/1996 66Jalan Temoh, 35000 Tapah (99 years a singlePerak Darul Ridzuan from 1979 storey shop to 2078) office building

No. 6, Jalan Simpang 130 14 Leasehold Land and 01/01/1993 119Kg Bengali, 34000 Taiping (60 years a doublePerak Darul Ridzuan from 1988 storey flatted to 2048) industry building

98


List of Properties

Approx. Description Net Book Area Age of Date of ValueLocation (sq metres) (years) Tenure Properties purchase (RM’ 000)

TIME Reach Sdn Bhd (cont’d)

No. 80,Jalan Langat 1 149 15 Freehold Land and 01/10/1991 139Taman Seri Langat a 3 storey Jalan Reko, 43000 Kajang shophouseSelangor Darul Ehsan

No. 54 & 56, Jalan Sentosa 279 12 Freehold Land and 01/01/1995 276Taman Chi Liung 2 lots of Off Jalan Kim Chuan doublePandamaran storey42000 Port Klang shop/Selangor Darul Ehsan office No. 8-1, Jalan 4/4C 164 11 Freehold Land and 01/02/1996 364Desa Melawati, 53100 Ulu Klang a 3 storeySelangor Darul Ehsan shophouse No. 6 & 8, Jalan Liku 8/B 307 12 Leasehold Land and 01/01/1995 350Seksyen 8, 40000 Shah Alam (99 years 2 lots ofSelangor Darul Ehsan from 1998 double to 2097) storey shophouse No. 5, Lorong 6B/91 164 14 Leasehold Land and 01/05/1993 363Taman Shamelin Perkasa (99 years 4 storey56000 Kuala Lumpur from 1983 shop/ to 2082) office Lot No. 11 186 16 Freehold Land and 01/05/1991 330Jalan SS 6/12 Kelana Jaya 4 storey47301 Petaling Jaya terraceSelangor Darul Ehsan shophouse No. 363, Taman Bukit Emas 164 11 Freehold Land and 01/01/1996 281Jalan Tampin, 70450 Seremban a 3 storeyNegeri Sembilan Darul Khusus shophouse

324A & B 167 20 Leasehold Land and 01/02/1987 179Jalan Melaka Raya 1 (99 years a 3 storeyTaman Melaka Raya from 1983 shophouse75000 Melaka to 2082) No. 64 & 66 297 14 Freehold Land and 01/07/1993 423Jalan Wong Ah Jang 2 lots of25100 Kuantan 3 storey Pahang Darul Makmur shophouse

99

Approx. Description Net Book Area Age of Date of ValueLocation (sq metres) (years) Tenure Properties purchase (RM’ 000)

TIME Reach Sdn Bhd (cont’d)

No. 6-01-02 236 13 Freehold Land and 01/05/1994 259Jalan Molek 1/9 a 3 storeyTaman Molek shophouse81100 Johor BahruJohor Darul Takzim No. 33 & 35, Jalan Suasa 1 327 14 Freehold Land and 01/10/1992 257Taman Sri Skudai 2 lots of81300 Johor Bahru doubleJohor Darul Takzim storey shophouse No. 53, 53A & 53B 178 12 Freehold Land and 01/09/1994 318Jalan Perang a 3 storeyTaman Pelangi shophouse 80400 Johor Bahru Johor Darul Takzim No. 13, Jalan Timah Hitam 137 15 Leasehold Land and 01/02/1992 16583000 Batu Pahat (99 years a 3 storeyJohor Darul Takzim from 1988 shophouse to 2087) No. 1-25 143 18 Leasehold Land and 01/11/1988 80Kawasan Perindustrian Batu 1 (99 years a doubleTanjung Agas, 84000 Muar from 1981 storeyJohor Darul Takzim to 2080) shophouse Block BC, Lot 12, Unit 6 107 12 Leasehold Land and 01/01/1995 512Lorong Ikan Juara 3 (999 years a 4 storeySadong Raya, Karamunsing from 1902 shop/88100 Kota Kinabalu, Sabah to 2901) house

List of Properties

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101

Group Corporate Directory

TIME dotCom Berhad (413292-P)

Level 1, Wisma TIME249 Jalan Tun Razak50400 Kuala LumpurMalaysiaTel : +60 3 2720 8000Fax : +60 3 2720 0199Website : www.time.com.my

TIME Retail OutletLevel 4, Matang Building83B, Jalan Langkasuka80350 Johor BahruJohor Darul TakzimTel : +60 7 277 1264Fax : +60 7 278 2781

TIME Customer Support & ServiceTIME SelfCareTel : 1 800 387 111 or +60 3 2730 5287Fax : +60 3 2720 9006Email : [email protected]

TT dotCom Sdn BhdLevel 1, Wisma TIME249 Jalan Tun Razak50400 Kuala LumpurMalaysiaTel : +60 3 2720 8000Fax : +60 3 2720 8001

TIME Reach Headquarters(11683-W)

Level 6, Menara MaxisegarJalan Pandan Indah 4/2Pandan Indah55100 Kuala LumpurTel : +60 3 4295 8888Fax : +60 3 2720 3626

TIME dotNet Berhad (507273-T)

Level 6, Wisma Time249 Jalan Tun Razak50400 Kuala LumpurTel : +60 3 2720 8000Fax : +60 3 2720 4466ISP Web Portal : www.time.net.my

Central Region

43 & 54, Jalan U1/26HICOM Glenmarie40150 Shah AlamSelangor Darul EhsanTel : +60 3 5032 6000Fax : +60 3 5032 6003

Northern Region

102M, Lengkok KampungJawa 2, MIEL Industrial Zone11900 Bayan Lepas, PenangTel : +60 4 370 0000Fax : +60 4 370 0001

No 12, Block D1, Jalan Todak 4Pusat Bandar Seberang Jaya13700 Prai, Pulau PinangTel : +60 4 370 2000Fax : +60 4 370 2004

No. 133G & 135Jalan Dato Lau Pak KhuanIpoh Garden, 31400 Ipoh PerakTel : +60 5 236 0000Fax : +60 5 236 5000

Eastern Region

No 142AKawasan Perindustrian Semambu25350 Kuantan, PahangTel : +60 9 556 0692Fax : +60 9 556 0691

Southern Region

4th Floor, Matang HoldingsNo 83B, Jalan LangkasukaKawasan Perindustrian Larkin80350 Johor Bahru, JohorTel : +60 7 277 1234 (Operations)

Fax : +60 7 277 1200Tel : +60 7 277 1288 (Sales)

Fax : +60 7 277 1277

A-10, Bacang PermaiJalan Tun Fatimah75350 MelakaTel : +60 6 228 3000Fax : +60 6 228 3001

East Malaysia

(Sales)

Lot 3085, Ground FloorWisma Ng Aik Oh, Jalan Rock93200 Kuching, SarawakTel : +60 82 427 992Fax : +60 82 237 306

Lot 5, 2nd FloorLazenda Shop OfficePhase 3, Jalan OKK Abdullah87008 LabuanWilayah Persekutuan LabuanTel : +60 87 439 000Fax : +60 87 439 007

(Operations)

Lot 969, Block 12MLTD SamajayaFree Industrial Zone93450 Kuang, SarawakTel : +60 82 283 600Fax : +60 82 364 406

TT dotCom Regional Offices

101

Group Corporate Directory

Central Region 1

(Wilayah)

Level 6, Menara Maxisegar,Jalan Pandan Indah 4/2,Pandan Indah,55100 Kuala LumpurTel : +60 3 4295 8888Fax : +60 3 2720 3626

Central Region 2

(Selangor)

Pusat Kejuruteraan TIME Reach,Lot 26, Jalan 225,Seksyen 51A,46100 Petaling JayaSelangor Darul EhsanTel : +60 3 7688 7100Fax : +60 3 7625 6773

Southern Region

No. 6, 6-01, 6-02,Jalan Molek 1/9,Taman Molek88100 Johor Bahru,Johor Darul TakzimTel : +60 7 355 6199Fax : +60 7 355 4424

Northern Region

No. 125, Medan Kikik Satu,Taman Inderawasih,13600 Prai, Seberang Prai,Pulau PinangTel : +60 4 399 9211Fax : +60 4 399 1211

Eastern Region

No. 64 & 66,Jalan Dato’ Wong Ah Jang,25100 Kuantan,Pahang Darul MakmurTel : +60 9 514 4300Fax : +60 9 513 2491

East Malaysia

Block BC, Lot 6,Lorong Ikan Juara 3,Sadong Jaya, Karamunsing,88100 Kota Kinabalu,SabahTel : +60 88 240 240Fax : +60 88 248 100

TIME Reach Regional Offices

102


PROXY FORM

I/We,_____________________________________________ Identification/Company No. _________________________________ (Name in block letters)

of ______________________________________________________________________________________________________________ (Full address)

being a member/members of TIME dotCom Berhad hereby appoint ______________________________________________

________________________________________________________________________________________________________________

of ______________________________________________________________________________________________________________ (Full address)

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us and on my/our behalf at the Tenth Annual General Meeting of the Company which will be held at Grand Ballroom 1, Sime Darby Convention Centre,1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 7 June 2007 at 10.30 a.m. and at any adjournment thereof.

You may indicate with an “X” or “ ” in the boxes provided below how you wish your votes to be cast. Please note that the filling of this form is for indicative purposes only and shall not bind the Company or in any way oblige or require the Company to ensure that your proxy shall vote in the manner as indicated by you.

Please take further note that the Company shall accept the vote cast by your proxy as a valid vote whether or not your proxy has acted in accordance with your instructions.

For AgainstOrdinary Resolution 1










Signed this ___________day of __________________ 2007.

_____________________________________Signature/Common Seal of Appointer

NOTES:

1. A member entitled to attend and vote at the above Meeting is entitled to appoint a proxy/proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and Section 149(1)(b) of the Companies Act 1965 shall not apply to the Company.

2. The instrument of proxy shall be in writing and signed by the appointer or by his attorney and in the case of a corporation, either under its common seal or signed by its attorney or officer on behalf of the corporation.

3. A member who holds 1,000 shares or less in the Company is entitled to appoint one (1) proxy whilst a member holding more than 1,000 shares in the Company is entitled to appoint a maximum of two (2) proxies. Where a member of the Company is an authorised nominee as defined in accordance with the Securities Industry (Central Depositories) Act 1991, it may appoint 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.

4. Where a member appoints two (2) proxies, the appointments shall be invalid unless the proportion of holding to be represented by each proxy is specified.

5. The instrument appointing a proxy or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the Company’s Share Registrar’s office, Mega Corporate Services Sdn Bhd at Level 15-2, Faber Imperial Court, Jalan Sultan Ismail, 50774 Kuala Lumpur not less than forty eight (48) hours before the time for holding the meeting or adjourned meeting, or in the case of a poll not less than twenty four (24) hours before the time appointed for the taking of the poll, and in default the instrument of proxy shall not be treated as valid.

No. of shares CDS Account No.TIME dotCom Berhad(Company No. 413292-P)

fold here

fold here

affixpostage

here

Mega Corporate Services Sdn BhdLevel 15-2, Faber Imperial Court,

Jalan Sultan Ismail,

50774 Kuala Lumpur

ANNUALREPO

RT2006

TIMEd

otC

om

Berhad

(413292-P)

TIME dotCom Behard (413292-P)

Level 1, Wisma TIME, 249 Jalan Tun Razak, 50400 Kuala LumpurT +603 2720 8000 F +603 2720 0199 www.time.com.my

Documents

(413292-P) TIME dotCom Behard Level 1, Wisma …A N N U A L R E P O R T 2 0 0 6 T I M E d o t C o m B e r h a d (4 1 3 2 9 2-P) TIME dotCom Behard (413292-P) Level 1, Wisma TIME, 249