universiti Malaysia sabah

ENTREPRENEURIAL finance
GROUP ASSIGNMENT TOPIC:
TELECOM MALAYSIA BERHAD

LECTURE NAME: MADAM AINIE AUCASA
GROUP NAME: PELANGI SDN.BHD
Bil. Name Matrik no.
1 KHUZAIMAH BINTI MOHD
NURUNG
BB11110242
2 SITTI MUNIRAH BINTI ABD
MALIK
BB11160816
3 MOHD HAFIZ BIN MAKSUD BB11110327
4 BAZILA BINTI BASARUM BB11110070




INTRODUCTION OF COMPANY BACKGROUND
Telekom Malaysia Berhad (TM) is engaged in the establishment, maintenance and provision
of telecommunications and related services. TM operates in four segments: Retail Business,
which provides a range of telecommunications services and communications solutions to
small and medium businesses, as well as corporate and government customers except for
consumer business, which provides only voice and Internet and multimedia services;
Wholesale Business, which provides a range of telecommunications services delivered over
its networks to other licensed network operators; Global Business, which provides inbound
and outbound services for a range of telecommunications, and Shared Services/Other, which
include shared services division, all business factions divisions and subsidies that do not fall
under above line of business. On September 27, 2011, it launched TM SmartMap. On
November 20, 2011, TM launched UniFi. On August 26, 2011, TM disposed 51.0% interest in
Telekom Smart School Sdn Bhd.
TM vision is "To be Malaysias leading new generation communications provider, embracing
customer needs through innovation and execution excellence" and to achieve their vision
their have same mission that is their determined to do the following :
1. Strive towards customer service excellence and operational efficiency
2. Enrich customer lifestyle and experience by providing innovative new generation
services
3. Improve the performance of our business customers by providing high value
information and communication solutions
4. Deliver value for stakeholders by generating shareholder value and supporting
Malaysias growth and development


SWOT ANALYSIS
1. Strength:
Single company did not have any competitor that has same system, product
or serves like them.
Coverage is doing big or wide. Available in all place in Malaysia and Asia as
well
Have own loyalty of their product and services
2. Weakness:
TM has low protection that cause hacker easier to hack the line or using it
without being detected by the owner. This is especially the Wi-Fi/internet
line.
Using bill format that have cause many problem and difficulties to the user
because their lack or slow of updating the new bill to the user.
Installation system or process is so difficult and have many procedures.
Modem. Cannot be change or move to another place, need to stick on
consistent place because of plug and wire.
3. Opportunity:
Have big loyalty from their user.
Always provided satisfied system, network and services to their customers.
network is available in all place inside Malaysia and Asia
There have a creativity and innovative that always provided competitive
environment
Stick network, not like another modem or broadband that need to stick in on
place that only has line or network.

4. Threat
Have new company that always make an improvement and differences to
challenges TM company
Security system is so weak and always be a issue that difficult to solve in TM
company.





















PAST FINANCIAL PERFORMANCE
Telekom Malaysia Income Statement from Year 2009 until 2012
Currency in
Millions of Malaysian Ringgits
As of: Dec 31
2009
Restated
MYR
Dec 31
2010
Reclassified
MYR
Dec 31
2011
Restated
MYR
Dec 31
2012
MYR
Revenues 8,608.0 8,791.0 9,150.7 9,993.5
TOTAL REVENUES 8,608.0 8,791.0 9,150.7 9,993.5
Cost Of Goods Sold 5,237.0 5,311.7 5,427.5 6,149.6
GROSS PROFIT 3,371.0 3,479.3 3,723.2 3,843.9
Selling General & Admin Expenses, Total 516.2 697.3 752.0 777.7
Depreciation & Amortization, Total 2,000.7 1,924.0 2,030.4 2,016.0
Other Operating Expenses -97.1 -121.1 -82.2 -128.2
OTHER OPERATING EXPENSES, TOTAL 2,419.8 2,500.2 2,700.2 2,665.5
OPERATING INCOME 951.2 979.1 1,023.0 1,178.4
Interest Expense -338.4 -365.2 -318.2 -331.5
Interest And Investment Income 118.0 130.3 150.9 140.9
Other Non-Operating Expenses, Total 109.8 303.6 -58.5 74.3
Other Non-Operating Income (Expenses) 68.7 -- -- --
Merger & Restructuring Charges -- -10.6 -5.7 --
Gain (Loss) On Sale Of Investments 54.5 373.3 286.5 0.3
Gain (Loss) On Sale Of Assets 82.9 4.0 9.4 19.1
Other Unusual Items, Total -56.4 -54.3 -86.2 -11.9
EBT, INCLUDING UNUSUAL ITEMS 921.6 1,360.2 1,001.2 1,069.6
Income Tax Expense 248.3 115.2 -235.9 -236.3
Minority Interest In Earnings -30.3 -38.5 -46.1 -42.2
Earnings From Continuing Operations 673.3 1,245.0 1,237.1 1,305.9
NET INCOME 643.0 1,206.5 1,191.0 1,263.7
NET INCOME TO COMMON INCLUDING EXTRA ITEMS 643.0 1,206.5 1,191.0 1,263.7
NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 643.0 1,206.5 1,191.0 1,263.7



Telekom Cash Flow from Year 2009 until 2012


Currency in
Millions of Malaysian Ringgits
As of: Dec 31
2009
Restated
MYR
Dec 31
2010
Reclassified
MYR
Dec 31
2011
Restated
MYR
Dec 31
2012
MYR
NET INCOME 643.0 1,206.5 1,191.0 1,263.7
DEPRECIATION & AMORTIZATION, TOTAL 2,000.7 1,924.0 2,030.4 2,016.0
Other Operating Activities 412.3 -157.1 -190.7 -556.0
CASH FROM OPERATIONS 3,056.0 2,973.4 3,030.7 2,723.7
Capital Expenditure -2,516.2 -2,864.3 -2,735.0 -2,547.9
Sale Of Property, Plant, And Equipment 19.0 37.3 17.6 21.3
Cash Acquisitions -412.3 -- -- --
Divestitures -- -- -2.3 --
CASH FROM INVESTING 2,546.4 -1,446.9 -1,338.0 -2,227.9
Long-Term Debt Issued 180.0 -- 1,268.3 1,479.4
TOTAL DEBT ISSUED 180.0 -- 1,268.3 1,479.4
Long Term Debt Repaid -452.2 -860.9 -496.4 -635.6
TOTAL DEBT REPAID -452.2 -860.9 -496.4 -635.6
Issuance Of Common Stock 229.5 50.7 34.8 --
Repurchase Of Common Stock -- -- -- -1,073.2
Common Dividends Paid -731.3 -693.8 -702.1 -701.2
TOTAL DIVIDEND PAID -731.3 -693.8 -702.1 -701.2
Other Financing Activities 30.8 -30.2 -29.7 -39.9
CASH FROM FINANCING -4,205.9 -1,534.2 -962.5 -970.5
Foreign Exchange Rate Adjustments -1.0 5.5 -5.6 0.4
NET CHANGE IN CASH 1,395.5 -2.2 724.6 -474.3


Telekom Malaysia Balanced Sheet from Year 2009 until 2012
Currency in
Millions of Malaysian Ringgits
As of: Dec 31
2009
Restated
MYR
Dec 31
2010
Reclassified
MYR
Dec 31
2011
Restated
MYR
Dec 31
2012
MYR
Assets
Cash And Equivalents 3,490.7 3,488.5 4,213.0 3,738.7
Short-Term Investments 294.7 838.1 418.1 500.6
Trading Asset Securities -- 21.5 20.1 19.1
TOTAL CASH AND SHORT TERM INVESTMENTS 3,785.4 4,348.1 4,651.2 4,258.4
Accounts Receivable 1,781.0 1,797.0 1,854.8 1,740.9
Notes Receivable 11.5 6.5 4.9 4.7
Other Receivables 376.0 401.5 343.2 314.3
TOTAL RECEIVABLES 2,168.5 2,205.0 2,202.9 2,059.9
Inventory 110.6 174.0 325.3 235.3
Prepaid Expenses 115.5 124.3 120.3 147.1
Other Current Assets -- 87.1 106.1 108.1
TOTAL CURRENT ASSETS 6,180.0 6,938.5 7,405.8 6,808.8
Gross Property Plant And Equipment 44,627.1 46,584.1 48,182.8 49,723.6
Accumulated Depreciation -32,222.8 -33,472.0 -34,061.1 -35,086.0
NET PROPERTY PLANT AND EQUIPMENT 12,404.3 13,112.1 14,121.7 14,637.6
Goodwill 309.6 309.6 309.6 309.6
Long-Term Investments 761.6 118.7 171.6 143.0
Loans Receivable, Long Term 108.9 55.2 40.9 34.5
Deferred Tax Assets, Long Term 10.6 86.7 21.7 18.6
Other Intangibles 3.8 2.7 11.3 12.5
Other Long-Term Assets 163.7 156.5 169.7 231.3
TOTAL ASSETS 19,942.5 20,780.0 22,252.3 22,195.9

LIABILITIES & EQUITY
Accounts Payable 2,020.7 2,403.2 2,302.8 2,219.6
Accrued Expenses 245.8 485.5 485.2 398.6
Current Portion Of Long-Term Debt/Capital Lease 916.6 26.0 7.7 2,010.2
Current Portion Of Capital Lease Obligations 4.1 3.4 3.6 3.8
Current Income Taxes Payable 14.1 43.8 81.9 124.7
Other Current Liabilities, Total 1,173.4 1,232.9 1,216.3 1,330.2
Unearned Revenue, Current 70.4 98.1 535.4 538.9
TOTAL CURRENT LIABILITIES 4,441.0 4,289.5 4,629.3 6,622.2
Long-Term Debt 5,735.4 5,453.0 6,348.1 5,105.4
Capital Leases 61.5 58.2 54.6 50.7
Minority Interest 142.5 150.8 162.9 165.2
Unearned Revenue, Non-Current 985.9 1,432.1 2,072.7 2,129.4
Deferred Tax Liability Non-Current 1,588.7 1,664.2 1,541.8 1,202.6
Other Non-Current Liabilities -- 22.8 18.9 25.6
TOTAL LIABILITIES 12,812.5 12,919.8 14,665.4 15,135.9
Common Stock 3,543.5 3,568.1 3,577.4 2,504.2
Additional Paid In Capital 1,011.8 1,055.1 43.2 43.2
Retained Earnings 2,222.2 2,719.4 3,627.7 4,190.2
Comprehensive Income And Other 210.0 366.8 175.7 157.2
TOTAL COMMON EQUITY 6,987.5 7,709.4 7,424.0 6,894.8
TOTAL EQUITY 7,130.0 7,860.2 7,586.9 7,060.0
TOTAL LIABILITIES AND EQUITY 19,942.5 20,780.0 22,252.3 22,195.9




Ratio Analysis of Telekom Malaysia Financial Performance over 2009- 2012.
2009 2010 2011 2012
Liquidity ratios
Current ratio
(average current assets)
(average current liabilities)
1.503 1.608 1.263 -
Quick ratio
(average current assets-
average inventories)
(average current liabilities)
1.47 1.55 1.21 -
Conversion period ratios
Inventory to sale
conversion period
Average inventories
(Cost of good sold/ 365)
9.92 17.16 18.85 -
Purchase to payment
conversion period
(Average payables + average
acured liabilities)
(cost of good sold/ 365)
179.83 195.08 181.58 -
Leverage Ratios
Total debt to total assets
(average total debt)
(average total assets)
- - - -




FUTURE OUTLOOK IN THE INDUSTRY
The telecommunication sector will play a pivotal role in Malaysia information and
communication technology (ICT) transformation, with rapid development in technology and
connectivity being the key driving growth. According to statistics from International
Investors, the juxtaposition of global ICT trends with the unique position of the Malaysia ICT
industry is creating distinct opportunities in this industry for players.
Based on the future of TELEKOM MALAYSIA we can see, TM is the largest and most
comprehensive provider of communication services in Malaysia as well as one of Asias
primary players in the Telecommunications Industry. TM runs a best in class network
infrastructure that spans across the globe. They offer extensive range of products and
services comprising of data, bandwidth and voice that accommodates your unique needs
and optimize the turnovers.
In the current economy scenario of scarce financial resources, it was unlikely that
PCN services can achieves the same level of coverage as Mobikom and Celcoms AMPS
service in the medium term. Telekom Malaysia therefore, felt that it would have continued
to play a significant in the Malaysian cellular industry.
In Malaysia the telecommunications segment is characterised by the presence of
Telekom Malaysia Bhd (TM) as the incumbent fixed line and the largest broadband and
enterprise services player. Currently there are four cellular operators in Malaysia namely
CELCOM bhd, DIGI.com bhd (Digi), Maxis Bhd (Maxis) and U mobile sdn bhd (U mobile).
Apart from these cellular operators, there are four WiMax operators.

Telecommunication marketplace in Asia Pasific is very dynamic and highly
competitive with increasing number of players and evolving landscape. Revenue from
traditional business like voice and short message services (SMS) continues to decline. Thus
the decline in core revenue has led operators to explore and invest more in broadband and
data services. The key strategy for the operators is to monetise the data effectively.
Over the year TELEKOM MALAYSIA has evolved exponentially and reaches a mobile
penetration is only about 21 precent at the end of 2011. Having a competitive market
structure for internet services is essential to providing that service at a competitive price.
But with only two market players so far, the Malaysian Internet is still far from any sort of
competitive equilibrium.













RECOMMENDATIONS:
1. Based on continues:
Continue production of new, more sophisticated systems and meets the
requirements and scope of the consumer. Use the sophistication available.
2. Base on Harvest:
Foster cooperation with other companies for the production of electronic
communication devices (Modern, Phone) are more sophisticated and cutting-
edge and high resilience.
3. Base on Exit:
Try to find a solution for the problems in question the TM. Especially the
security system problem that is often raised and disputed. This problem can
be solved to produce or attract more trust and confidence in TM.
4. Based on Regroup:
Augment the monitoring of existing branches all over the place to ensure the
smooth and effective system. In addition, holding meetings with senior
officials to solve the problems that arise and discuss troubleshooting steps.







REFERENCES
S.Janet and B.Richard. (2011). Entrepreneurial Finance: Strategy, Valuation, and Deal
Structure.
Steven Rogers. (2008). Entrepreneurial Finance: Finance and Business Strategies for the
Serious Entrepreneur.
http://www.theborneopost.com/2012/06/17/a-calculated-game-plan/#ixzz2SUvwc8d6
http://www.theborneopost.com/2012/06/17/a-calculated-game-plan/#ixzz2SUu8V5v5
http://www.theborneopost.com/2012/06/17/a-calculated-game-plan/#ixzz2SUsKQ5KJ