TELEKOM MALAYSIA BERHAD (128740-P) (Incorporated in Malaysia)

QUARTERLY REPORT ON AUDITED CONSOLIDATED RESULTS FOR THE FOURTH QUARTER ENDED 31 DECEMBER 2001
The Board of Directors of Telekom Malaysia Berhad is pleased to announce the following audited results of the Group for the fourth quarter ended 31 December 2001.

AUDITED CONSOLIDATED INCOME STATEMENT

INDIVIDUAL QUARTER
CURRENT YEAR QUARTER PRECEDING YEAR CORRESPONDING QUARTER

CUMULATIVE QUARTER
CURRENT YEAR TO DATE PRECEDING YEAR CORRESPONDING PERIOD

31/12/2001 RM Million 1. (a) Revenue (b) Investment income (c) Other income (a) Profit before finance cost, depreciation and amortisation, exceptional items, income tax, minority interests and extraordinary items (b) Finance cost (c) Depreciation and amortisation (d) Exceptional items (e) Profit before income tax, minority interests and extraordinary items (f) Share of profits and losses of associated companies (g) Profit before income tax, minority interests and extraordinary items after share of profit and losses of associated companies (h) Income tax (i) (i) Profit after income tax before deducting minority interests (ii) Minority interests (j) Pre-acquisition profit/(loss), if applicable (k) Net profit from ordinary activities attributable to members of the company (l) (i) Extraordinary items (ii) Minority interests (iii) Extraordinary items attributable to members of the company (m) Net profit attributable to members of the company 3. Earnings per share based on 2(m) above after deducting any provision for preference dividends, if any: (a) (b) Basic (based on 3,091.6 million (2000: 3,072.9 million) ordinary shares - sen) Fully diluted (based on 3,102.9 million (2000: 3,103.6 million) ordinary shares - sen) 4. (a) (b) Dividend per share (sen) Dividend description

31/12/2000 RM Million

31/12/2001 RM Million

31/12/2000 RM Million

2,497.8 6.1 88.0

2,313.6 4.9 53.9

9,673.2 16.0 229.6

8,815.7 15.9 167.3

2.

1,113.5 (87.4) (689.0) 337.1 53.6

976.8 (132.5) (642.4) 201.9 (0.7)

4,541.2 (507.3) (2,461.9) 827.8 2,399.8 43.8

4,472.0 (535.8) (2,480.9) (184.3) 1,271.0 (20.2)

390.7 (133.7) 257.0 (11.4) 245.6 245.6

201.2 (90.3) 110.9 1.9 112.8 112.8

2,443.6 (607.8) 1,835.8 (23.9) 1,811.9 1,811.9

1,250.8 (553.0) 697.8 7.4 705.2 705.2

7.9 7.9 -

3.7 3.6 -

58.6 58.4 15.0

22.9 22.7 10.0

A first and final dividend of 10.0 sen per share less tax (2000: 10.0 sen per share less tax) and a special dividend of 5.0 sen per share less tax (2000: Nil) have been recommended. The date for entitlement to dividend will be announced later.

As at 31 December 2001, the Company has other dilutive potential ordinary shares outstanding. MASB 13 "Earnings per share" prescribes that these dilutive potential ordinary shares are dilutive when they are issued for no consideration or when they would result in the issue of ordinary shares for less than fair value. Since the exercise price of these dilutive potential ordinary shares is higher than the fair value of the Company's shares for the financial year to date, they are deemed not dilutive.

AUDITED CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2001

AS AT END OF CURRENT QUARTER 31/12/2001 RM Million 1. 2. 3. 4. PROPERTY, PLANT AND EQUIPMENT INVESTMENT IN ASSOCIATED COMPANIES LONG TERM INVESTMENTS LONG TERM RECEIVABLES 18,926.7 1,066.5 105.5 657.8 AS AT PRECEDING FINANCIAL YEAR END 31/12/2000 RM Million 18,706.0 1,259.7 144.7 640.9

Inventories Trade receivables Other receivables and prepayments Short term investments Cash and cash equivalents 5. CURRENT ASSETS Trade payables Other payables and accrued liabilities Short term borrowings Taxation Proposed dividend 6. 7. CURRENT LIABILITIES NET CURRENT ASSETS / (LIABILITIES)

153.4 2,551.2 1,184.4 222.5 2,520.1 6,631.6 2,249.0 1,019.5 366.7 666.2 343.2 4,644.6 1,987.0 22,743.5

156.4 2,888.6 1,088.7 166.2 2,215.7 6,515.6 2,373.1 792.3 872.1 894.0 223.2 5,154.7 1,360.9 22,112.2 3,087.3 1,940.3 8,394.9 13,422.5 157.3 1,354.8 6,209.1 7,563.9 676.5 276.7 953.2 15.3 22,112.2 434.8

SHARE CAPITAL SHARE PREMIUM RESERVES 8. 9. SHAREHOLDERS' FUNDS MINORITY INTERESTS Convertible Bonds Long term borrowings 10. LONG TERM BORROWINGS Customers' deposits Retirement benefits 11. OTHER LONG TERM LIABILITIES 12. DEFERRED TAXATION

3,103.5 2,065.0 9,655.4 14,823.9 175.8 1,358.2 5,349.8 6,708.0 690.2 318.7 1,008.9 26.9 22,743.5

13. NET TANGIBLE ASSETS PER SHARE (sen)

477.7

TELEKOM MALAYSIA BERHAD (128740-P) (Incorporated in Malaysia) Notes to the announcement of results for the fourth quarter ended 31 December 2001

Accounting Policies The quarterly financial statements of the Group were prepared using the same accounting policies, method of computation and basis of consolidation as those used in the preparation of the 2000 audited annual financial statements. The main closing exchange rates used as at 31 December 2001 in translation (units of Malaysian Ringgit per foreign currency) were as follows: Foreign Currency US Dollar Japanese Yen Deutsche Mark Canadian Dollar Pound Sterling Bangladesh Taka Exchange Rate 3.80000 0.02885 1.73060 2.38650 5.52558 0.06702 Foreign Currency Thai Baht Ghanaian Cedi Guinea Franc Malawi Kwacha Sri Lanka Rupee South African Rand Exchange Rate 0.08595 0.00054 0.00194 0.05735 0.04093 0.31746

Exceptional Items Exceptional items for the financial year to date ended 31 December 2001 represents profit on disposal of an associated company, Digital Phone Company Limited (DPC) as disclosed in note 7 (3).

Extraordinary Items There were no extraordinary items for the financial year to date ended 31 December 2001.

TELEKOM MALAYSIA BERHAD (128740-P) (Incorporated in Malaysia) 4 Taxation The taxation charge for the Group comprises:
INDIVIDUAL QUARTER Current year quarter 31/12/2001 RM Million 103.6 (0.2) (1.3) 102.1 3.8 1.5 9.4 14.7 16.9 133.7 Preceding year corresponding quarter 31/12/2000 RM Million 83.6 0.9 0.6 85.1 1.8 1.8 3.4 90.3 CUMULATIVE QUARTER Current year to date 31/12/2001 RM Million 551.8 0.1 2.5 554.4 5.9 (0.4) 9.4 14.9 38.5 607.8 Preceding year corresponding period 31/12/2000 RM Million 488.5 0.9 5.4 494.8 12.1 12.1 46.1 553.0

(i) Malaysia: Current year taxation In respect of prior year Deferred taxation (ii) Overseas: Current year taxation In respect of prior year Deferred taxation (iii) Associated companies: Share of taxation

The effective rate of taxation for the Group was lower than the statutory rate principally due to profit on disposal of an associated company, DPC which was not taxable.

Profit on Sale of Unquoted Investments and/or Properties There were no other material profit on sale of unquoted investments and/or properties other than in the ordinary course of the Group's business for the financial year to date ended 31 December 2001.

Purchase and Disposal of Quoted Securities (a) Total purchases and disposals of quoted securities for the current quarter and financial year to date ended 31 December 2001 were as follows:
Current Quarter RM Million 83.3 4.7 (2.0) Year To Date RM Million 83.3 6.7 (2.3)

Total purchases during the year Total disposals during the year Total profit / (loss) on disposal

TELEKOM MALAYSIA BERHAD (128740-P) (Incorporated in Malaysia) 6 Purchase and Disposal of Quoted Securities (Continued) (b) Total investments in quoted securities as at 31 December 2001 were as follows: At cost At book value At market value
RM Million 242.8 222.5 222.5

Changes in the Composition of the Group Changes in the composition of the Group for the current quarter and financial year to date ended 31 December 2001 were as follows: 1) Telekom Applied Business Sdn Bhd (TAB) During the first quarter, Telekom Malaysia (TM) has entered into a Joint Venture Agreement with Prism Holdings Limited (PHL) through the acquisition of 30% equity interest by PHL in TAB. The above joint venture was announced to KLSE on 31 January 2001. TM currently holds 70% equity interest in TAB. 2) Telekom TechnologySdn Bhd (TTSB) During the first quarter, TM has entered into a Joint Venture Agreement with Prism Holdings Limited (PHL) through the acquisition of 30% equity interest by PHL in TTSB. The above joint venture was announced to KLSE on 6 February 2001. TM currently holds 70% equity interest in TTSB. 3) Digital Phone Company Limited (DPC) TMI Mauritius Limited, a wholly owned subsidiary of TM, has disposed its entire stake of 49.99% in Digital Phone Company Limited effective from 5 September 2001. The above disposal was announced to KLSE on 6 September 2001. 4) Samart Corporation Public Company Limited The shareholding in Samart Corporation Public Company Limited was diluted by 4.73% from 24.46% to 19.73% after its debt restructuring exercise which was completed in December 2001. 5) Itopia Inc During fourth quarter 2001, the shareholding in Itopia Inc was diluted by 8.8% from 25.3% to 16.5% due to non-subscription of new issues.

TELEKOM MALAYSIA BERHAD (128740-P) (Incorporated in Malaysia) 8 Status of Corporate Proposals (a) Arab Malaysian Merchant Bank Berhad ("AMMBB") on behalf of the Company had announced the Proposed Listing of VADS Berhad (formerly known as VADS Sdn Bhd) ("VADS"), a wholly owned subsidiary of Telekom Malaysia Berhad, on the Second Board of the Kuala Lumpur Stock Exchange. Approvals from the Shareholders of the Company, the Foreign Investment Committee, Ministry of International Trade and Industry and the Securities Commission ("SC") were duly obtained. Pursuant to its letter dated 10 December 2001, SC did not approve an appeal made by VADS through AMMB, against the condition that the shares allocated under VADSs Employees Share Participation Scheme (ESPS) be priced at the initial public issue price. However, SC has clarified that it has no objection for the ESPS to be priced as proposed if the scheme involves the sale of VADS shares held by Telekom Malaysia Berhad. AMMBB is currently revising the listing proposals in response to the SC's decision on the pricing of the ESPS. Under the circumstances the company expects that the proposed listing will require a longer time frame for completion. SC through its letter dated 15 Feb 2002 approved VADS application for an extension of six (6) months until 16 Aug 2002 for the implementation of its listing proposal .

(b)

The Company had on 18 April 2001 announced the Proposed Amendments to the Articles of Association of the Company. At the EGM held on 15 May 2001, the Shareholders have agreed to defer consideration of this proposal sine die (i.e. for an indefinite period). The Exchange has on 8 November 2001 granted the Companys Application for Extension of Time until its next Annual General Meeting scheduled in May 2002, to amend its Articles of Association.

Issuance and Repayment of Debt and Equity Securities There were no issuance and repayment of debt and equity securities, share buy-backs, share cancellations, shares held as treasury shares and resale of treasury shares during the financial year to date ended 31 December 2001 except for the following: (a) The increase in issued and paid up capital of RM16.2 million of the Company from 3,087.3 million shares of RM1.00 each to 3,103.5 million shares of RM1.00 each as a result of employees exercising their option under Employees Share Option Scheme (ESOS) at the exercise price of RM10.50 and RM8.53 per share. The issuance of RM489.0 million Notes from the existing RM700.0 million AlMurabahah Medium Term Note program. The repayment of Floating Rate Notes of RM380.0 million.

(b)

(c)

TELEKOM MALAYSIA BERHAD (128740-P) (Incorporated in Malaysia) 10 Group Borrowings (a) The breakdown of Group borrowings as at 31 December 2001 were as follows: Short Term Borrowings RM Million 8.9 357.8 366.7 Long Term Borrowings RM Million 176.5 6,531.5 6,708.0

Secured Unsecured Total (b)

Foreign currency borrowings in Ringgit equivalent were as follows: Foreign Currency US Dollars Japanese Yen Deutsche Mark Canadian Dollars Pound Sterling Total RM Million 4,742.0 685.9 6.6 4.1 1.7 5,440.3

11

Contingent Liabilities There has been no material change in contingent liabilities since the latest audited financial statements of the Company for the year ended 31 December 2000 (other than material litigation disclosed in note 13 of this announcement) except for the following: (a) A guarantee granted to a financial institution in respect of USD6.0 million (RM22.8 million) financing facility obtained by a wholly owned subsidiary company, MTN Networks (Private) Limited which has been executed on 20 September 2001 and expiring on 20 September 2009. An overseas associated company of which TM has an effective shareholding of 25.5% had been penalised for non-achievement of several performance targets as set out under its Telecommunication Licence. The associated company had subsequently appealed against the penalty and is now seeking to negotiate for an amicable settlement. Financially, the total exposure to TM is estimated to be in the range of RM30.0 million to RM60.0 million.

(b)

12

Off Balance Sheet Financial Instruments The details and the financial effects of the hedging derivatives that the Company have entered into are described in note 11 to the latest audited financial statements of the Company for the year ended 31 December 2000. The accounting policies applied remain the same as in the latest audited financial statements as follows:

TELEKOM MALAYSIA BERHAD (128740-P) (Incorporated in Malaysia) 12 Off Balance Sheet Financial Instruments (Continued) Financial derivative hedging instruments are used in the Companys risk management of foreign currency and interest rate exposures of its financial liabilities. Hedge accounting principles are applied for the accounting of the underlying exposures and their hedge instruments. The underlying foreign currency liabilities are translated at their respective hedged exchange rate, and differential interest receipts and payments arising from interest rate derivative instruments are accrued, so as to match the net differential with the related expenses on the hedge liabilities. No amounts are recognised in respect of future periods. There has been no material change to the terms and conditions of those derivatives between the date of the latest audited financial statements and the date of this announcement except for the restructuring of the Interest Rate Swap (IRS) to Cross-currency Interest Rate Swap (CCIRS). Details are as follows: Cross-currency Interest Rate Swap (CCIRS) Underlying Liability USD350.0 million unsecured Syndicated Term Loan In 1998, the Company entered into a 5-year USD350.0 million unsecured syndicated term loan, paying interest at floating rates, to mature on 11 May 2003. During the year ended 31 December 2000, the facility was refinanced into two tranches comprising USD200.0 million due on 30 June 2003 and USD150.0 million due on 29 June 2007. Hedging Instrument On 26 July 2001, the Company restructured the existing IRS into a USD150.0 million CCIRS. The restructured swap has the following new terms whereby, the Company will receive USD150.0 million in return for the payment of JPY17,324.0 million on maturity of the USD150.0 million tranche of the syndicated term loan on 29 June 2007. The restructured swap entitles the Company to receive floating interest at 6-month USD Libor, and obliges it to pay interest at 6-month USD Libor less 1.504% per annum. The net effect of the CCIRS is to convert the Companys USD150.0 million debt obligation into JPY at the principal exchange rate of JPY115.4933 at the maturity date of 29 June 2007. The objective of this transaction is to effectively convert the USD liability into a JPY liability, and to reduce the interest payable on the USD150.0 million tranche of the syndicated term loan. All hedging instruments are executed with creditworthy financial institutions with a view to limit the credit risk exposure of the Company.

TELEKOM MALAYSIA BERHAD (128740-P) (Incorporated in Malaysia) 13 Material Litigation The Directors of the Company confirmed that neither the Company nor any of its subsidiary companies are engaged in any material litigation either as plaintiff or defendant, save for a claim against a wholly owned subsidiary company, Telekom Multi-Media Sdn. Bhd which was initiated on 9 January 2001. The claim, which the plaintiff is seeking, is for damages of RM105.7 million for loss of profits and Canadian Dollars 0.9 million for expenses incurred. The Directors, based on the legal opinion received, are of the view that the Company has a reasonably good case to dispute and/or contest the claim by the plaintiff. There has been no material development since the last quarterly report. Apart from the above, the Directors are not aware of any proceedings pending against the Company and/or its subsidiary companies or of any facts likely to give rise to any proceedings which might materially affect the position or business of the Company and/or its subsidiary companies.

14

Group Segmental Reporting Group segmental reporting for the financial year to date ended 31 December 2001 were as follows: By Geographical Location Revenue RM Million Malaysia Overseas Total 9,179.5 493.7 9,673.2 Profit Before Taxation RM Million 1,528.7 914.9 2,443.6 Assets Employed RM Million 25,296.4 2,091.7 27,388.1

15

Comparison with Preceding Quarters Results Compared to the preceding quarter, the current quarter revenue has decreased by RM4.9 million (0.2%) from RM2,502.7 million to RM2,497.8 million mainly due to lower revenue from telephony and leased services. Profit before taxation decreased significantly by RM896.0 million (69.6%) from RM1,286.7 million to RM390.7 million due to exceptional gain of RM827.8 million from disposal of an associated company recorded in third quarter 2001.

16

Review of Performance For the current quarter under review, the Groups revenue increased by 8.0% to RM2,497.8 million from RM2,313.6 million recorded in the corresponding quarter in 2000 mainly due to 4.9% increase in telephony revenue (fixed and cellular) and positive growth in other services as well. Profit before taxation increased significantly by 94.2% to RM390.7 million from RM201.2 million recorded in the corresponding quarter in 2000 mainly contributed by growth in operating revenue and lower manpower costs.

TELEKOM MALAYSIA BERHAD (128740-P) (Incorporated in Malaysia) 16 Review of Performance (Continued) For the current year to date under review, the Groups revenue of RM9,673.2 million was 9.7% higher than RM8,815.7 million recorded in the corresponding period in 2000 mainly due to higher revenue from telephony, interconnect, data, internet and multimedia services. The Groups profit before taxation has increased by 95.4% to RM2,443.6 million from RM1,250.8 million recorded in the preceding year corresponding period mainly due to exceptional gain as mentioned in note 15 as well as improved performance of cellular division.

17

Subsequent Events There are no material events subsequent to the end of the period reported on that have not been reflected in the financial statements for the said period, other than the following: (a) On 8 February 2002, Telekom Malaysia has executed a Sale & Purchase Agreement with Permodalan Nasional Berhad, effecting the sale of PNBs 55% stake in GITN Sdn Bhd to TM. TM now owns 100% of GITN. On 18 August 2000, TM paid a sum of USD50.0 million to the Government of Ghana (GoG) as deposit for the proposed acquisition of additional 15% equity interest in Ghana Telecommunications Company Limited (GT) in accordance with the terms and conditions of the Head of Agreement (HoA) entered into between TM and GoG dated 10 August 2000. The deadline to conclude the transaction has lapsed on 19 February 2002 and consequently the deposit payment of USD50.0 million becomes due and payable to TM under the terms and conditions of the HoA. TM has commenced negotiation with GoG on the terms and conditions in respect of the said refund.

(b)

18

Seasonal or Cyclical Factors The business of the Group is not affected by any seasonal or cyclical factors.

19

Prospects for the Current Financial Year For the 2002 financial year, TM Group will continue to strengthen its fixed, mobile and multimedia business by focussing on developing more value added and innovative products and services. Customer care and service quality would be further enhanced to meet customer expectation. In addition, customer access network will be upgraded and expanded to capture the growing demand for Broadband, high speed Internet and wireless access. The recent announcement of tariff re-balancing enables TM to compete on a level playing field against other operators in the market and at the same time provide the incentive to deliver the needed telecommunication services to the rural areas.

TELEKOM MALAYSIA BERHAD (128740-P) (Incorporated in Malaysia) 19 Prospects for the Current Financial Year (Continued) Based on the recent economic indicators pointing towards a brighter year, the Directors are optimistic and confident that the Groups 2002 operating profits, barring unforeseen circumstances, will surpass that of the previous year.

20

Variance of Actual Profit from Forecast Profit / Profit Guarantee Not applicable.

21

Dividend The Board is recommending a final dividend of 10.0 sen per share less tax (2000: 10.0 sen per share less tax) and a special dividend of 5.0 sen per share less tax (2000: Nil) totalling RM343.2 million for the shareholders approval at the forthcoming Annual General Meeting of the Company. The date of books closure for the final dividend payment will be announced in due course.

By Order of the Board Wang Cheng Yong (MAICSA 0777702) Zaiton Ahmad (MAICSA 7011681) Secretaries

Kuala Lumpur 26 February 2002