1. INTRODUCTION

Pursuant to Paragraphs 9.19(23) and 10.08 of the Main Market Listing Requirements (“Main LR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), we wish to announce that TM, via its wholly owned subsidiary, Intelsec, has today entered into a Joint Venture and Shareholders Agreement (“JVSHA”) with TMS for the establishment of a Joint Venture Company (“JV Co”) which will carry on the business of a managed services operating company to provide smart building services and smart city services (“Proposed Joint Venture”).

Intelsec and TMS shall hold 51%, and 49% respectively of the equity interest of the JV Co. Intelsec shall subscribe for 25,500,000 ordinary shares of RM1.00 each in the JV Co at a total cost of RM25.5 million (“Proposed Subscription”).

2. DETAILS OF THE PROPOSED JOINT-VENTURE

2.1 Business of JV Co

JV Co will carry on ICT related business as part of MIMSB’s objective of developing Medini into a connected and sustainable city. The business will include city and building services comprising integrated infrastructure services, integrated parking management, digital signage, energy and facility management services, safety and security services and other services that will be mutually agreed by the parties from time to time.

2.2 Capital Structure

a) JV Co shall have an authorised share capital of RM50,000,000.00 divided into 50,000,000 ordinary shares of RM1.00 each. The initial issued and paid up share capital of the JV Co shall be RM32,000,000.00 divided into 32,000,000 ordinary shares of RM1.00 each.

b) Within three (3) months after the incorporation of JV Co, the Company and TMS have agreed to subscribe to the First Tranche of the initial issued and paid up share capital amounting to RM2,000,000, in cash and in the agreed proportion of 51%, and 49% respectively. The parties will further subscribe to the Second Tranche of the initial issued and paid up share capital amounting to RM15,000,000 in the agreed proportion within one (1) month after the JV Co’s first Business Plan is approved by its Board of Directors. The remainder of the initial issued and paid up share capital (Third Tranche) in the form of shares amounting to RM15,000,000 shall be subscribed by the parties based on the request from the Board of Directors of JV Co to the shareholders for the purpose of funding JV Co’s business.

c) The Company and TMS have further agreed to an additional future capital contribution of RM18,000,000.00 at such a later time as may be determined by JV Co’s Board of Directors for the purpose of funding the JV Co business as per the aforesaid proportion.

2.3 Sources of Funding

The Proposed Joint-Venture will be funded by internally generated funds.

3. RATIONALE OF THE PROPOSED JOINT-VENTURE

JV Co will pave the way towards realising the aspiration of a smart and connected Medini, with TM playing an integral role as the nation’s leading fully integrated communications and ICT services provider as well as our expertise in smart city solutions serving Medini as well as potential regional customers.

TM’s investment in JV Co will also provide the opportunity to capture captive market of new project development in Medini for both existing connectivity services including high-speed broadband, as well as other ICT services.

4. BRIEF INFORMATION ON THE PARTIES

4.1 TM

TM is a public listed company duly incorporated in Malaysia on 12 October 1984, with an authorised share capital of RM3,528,003,015.00 divided into 5,040,000,020 ordinary shares of RM0.70 each, 1 Special Rights Redeemable Preference Share of RM1.00, 2,000 Class C Non-Convertible Redeemable Preference Shares (“NCRPS”) of RM1.00 each and 1,000 Class D NCRPS of RM1.00 each. The issued and paid-up share capital of TM is RM2,630,557,302.10 comprising 3,757,934,823 ordinary shares of RM0.70 each, 1 Special Rights Redeemable Preference Share of RM1.00, 2,000 Class C NCRPS of RM1.00 each and 925 Class D NCRPS of RM1.00 each.

The principal activities of TM are the establishment, maintenance and provision of telecommunications and related services.

4.2 Intelsec

Intelsec was incorporated in Malaysia on 6 October 1995 as a private limited company. It has an authorised share capital of RM25,000,000.00 divided into 25,000,000 ordinary shares of RM 1.00 each, and an issued and paid-up capital of RM 10,650,000 divided into 10,650,000 ordinary shares of RM1.00 each.

Intelsec is a wholly-owned subsidiary of TM and its principal activities are the provision information and telecommunications technology (ICT) services and cloud consumption by designing and leveraging on network and exchange platforms.

4.3 MIMSB

MIMSB was incorporated in Malaysia on 23 October 2007. It changed its name from RIM City Sdn Bhd to its present name on 22 October 2008.

The present authorised share capital of MIMSB is RM60,000,000.00 comprising 50,000,000 ordinary shares of RM1.00 each, 300,000,000 redeemable preference shares (“RPS”) Class A of RM0.01 each and 700,000,000 RPS Class B of RM0.01 each.

Total number of shares taken up as at 30 June 2015 is 20,000,000 ordinary shares, 193,181,835 RPS Class A and 461,953,400 RPS Class B.

The principal activities of MIMSB are property investment holding and the provision of construction services.

4.4 TMS

TMS is a wholly owned subsidiary of MIMSB and is incorporated in Malaysia on 25 May November 2014 as a special purpose vehicle for the provision of township management services.

TMS has an authorised share capital of RM10,000,000.00 divided into 10,000,000 ordinary shares of RM1.00 each with an issued and paid-up capital of RM1,000.00 comprising 1,000 ordinary shares of RM1.00 each.

5. FINANCIAL EFFECT

5.1 Share capital and substantial shareholders’ shareholdings

The Proposed Joint-Venture will not have any effect on the issued and paid-up share capital as well as the substantial shareholders’ shareholdings of TM.

5.2 Earnings and Net Assets

The Proposed Joint-Venture is not expected to have any material effect to the earnings and net assets of TM Group for the financial year ending 31 December 2015.

6. APPROVALS REQUIRED

The Proposed Joint-Venture is not subject to shareholders’ or any government authorities’ approval.

7. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST

Save as disclosed below, none of the Directors and other major shareholders of TM and/or persons connected to them has any interest, whether direct or indirect, in the Proposed Joint-Venture:

a) Khazanah Nasional Berhad (“Khazanah”), a major shareholder of TM, is also a major shareholder of MIMSB.

b) Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin, a nominee Director of Khazanah; and

c) Nik Rizal Kamil Tan Sri Dato’ Nik Ibrahim Kamil, alternate director to Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin.

8. AUDIT COMMITTEE STATEMENT

The Board Audit Committee of TM (“BAC”), save for YM Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin, as an interested Director by virtue of his position as nominee Director of Khazanah, a common major shareholder in TM and MIMSB, having considered all aspects of the proposed JVSHA, is of the view that the Proposed Joint-Venture is in the best interest of TM, fair and reasonable and on normal commercial terms, and is not detrimental to the interest of the minority shareholders of TM.

The above view is arrived at after having considered the rationale of the Proposed Joint-Venture, the long-term accretive value it brings to TM Group and the strategic fit of the proposed JV Co to TM’s growth strategy for the Managed Accounts segment.

9. BOARD OF DIRECTORS’ STATEMENT

The Board of Directors of TM save for interested directors namely, Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin and Nik Rizal Kamil Tan Sri Dato’ Nik Ibrahim Kamil, having considered the recommendations of the BAC and the rationale of the Proposed Joint-Venture, is of the view that the Proposed Joint-Venture is in the best interest of TM, fair and reasonable and on normal commercial terms and not detrimental to the minority shareholders’ interest.

10. HIGHEST PERCENTAGE RATIO APPLICABLE PURSUANT TO PARAGRAPH 10.02 (g) OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD (“Main LR”)

Pursuant to paragraph 10.02 (g) of the Main LR, the highest percentage ratio applicable to the Proposed Joint-Venture is 0.3%.

11. TOTAL AMOUNT TRANSACTED WITH THE SAME RELATED PARTY FOR THE PRECEDING 12 MONTHS

In the preceding 12 months, the total transaction between TM and its subsidiaries with MIMSB amounted to RM280,771.

This announcement is dated 3 November 2015.