Company Background

MaxisBerhad (Maxis) is the leading company which providing

telecommunication services in Malaysia and currently have more than 12 millions service users. To meet with the demand of telecommunications, Maxis is operating to provide services on various platforms such as mobile services, fixed line services and international gateway services. Maxis operate its post-paid mobile services under the maxis brand and its prepaid mobile service under the HOTLINK brand. Maxiss fixed line services include a suite of voice services, data services, Internet Protocol (IP) and managed services to consumers and business customers. Its international gateway services include services to international telecommunications carriers for termination of traffic into Malaysia, services to send its own international traffic abroad and bandwidth leasing services. Besides that, Maxis was the first telecommunication company which launched the 3G services, such as 3G connect card, PC Webmail, Video Mail and 3G prepaid. The 3G services coverage is up to 740 sites across Malaysia and currently is still increasing. The 3G service enable users to access to the internet throughout Malaysia. Mobile phone and laptop users can have the benefit of the entertainment and communication services such as video calls, live mobile TV, games and wireless broadband. Many users had subscribed for Maxis broadband service because the price is reasonable and free modem will be given to subscribers once they signed up the service package. In addition, Maxiss customer service centre is located all over the country, which brings conveniences to the customers for bills payment, registration and report problems. Vision of Maxis is to bring advanced communications services to customers lives and businesses, in a manner that is simple, personalized and enriching, by efficiently and creatively harnessing leading edge technology and delivering a brand of service experience that is reliable and enchanting.

Corporate Social Responsibility (CSR)

MARKETPLACE 1. Corporate Governance Maxis have stated all the function, composition, authority, responsibility and duty of the committee and responsibility in their annual report. In the statement of the corporate governance, the Board is committed to upholding and implementing the highest standards of corporate governance and international best practices throughout the length and breadth of our business. Details of their corporate governance initiatives and the internal control policies they employ are detailed in the relevant sections of this Annual Report. Their board composition is including independent non-executive director (Raja Tan Sri Dato Seri Arshad bin Raja TunUda, Robert William Boyle, Dato Mokhzani bin Mahathir, and Asgari bin MohdFuad Stephens), non-executive director (Eng. Saud Majed A. AlDaweesh, Dr. FahadHussain S. Mushayt, GhassanHasbani, Augustus Ralph Marchall, amd Chan CheeBeng), and executive director (Sandip Das). The total fees of all Directors in any year is not exceeding in aggregate RM6,000,000. The Group operates a bonus scheme depend on the profits and individuals performance achieved for all employees, including the Executive Directors which review by the Remuneration Committee and approved by the Board. There are some remuneration packages for the Director such as basic salary, fees, bonus scheme, benefits-in-kind, and service contract. In Maxiss risk management framework, it is consistent with the COSO Enterprise Risk Management framework and involves the systematic identification and analysis of risks which impact the organizations objectives, formulation of response strategies and monitory and reporting of the risk management progress on a regular basis. The implementation of the enterprise risk management framework

ensures that major areas of risks are identified, managed and controlled or mitigated effectively.

2. Stakeholder engagement Maxis communicating with its shareholders and stakeholders through financial results on a quarterly basis, press releases and announcements to Bursa Securities and media, a dedicated investor relations team which has the task ofdealing with all queries from shareholders and investors and facilitating responses, an online Investor Relations section and online Press RoomMaxis Media Centre via the Companys website www.maxis.com.my which update time to time. Maxis also give their contact number for any queries about the company in website and annual report.

ENVIRONMENT 1. Environmental policy clearly stated Maxis is securing the environment for the future of children, so they have strived to adopt responsible business practices with considerations to the environments.

2. Measurement system in place to measure - Radiofrequency Radiation (RF) emitted by telecommunications tower antennas, and to a lesser extent, mobile phones. The word radiation automatically creates fear among many who fear exposure to it.

3. Set targets for improvements and/or significant initiatives to reduce radiation and emissions of carbon dioxide. - In Malaysia, base stations are installed in compliance with the stringent guidelines set by the Malaysian Communications and Multimedia Commission (MCMC) and the Ministry of Housing and Local Government. - Maxis adopt green practices that minimize Maxis carbon footprint and ensuring energy efficiency in operational processes, such as participation in the Voluntary Carbon Offset Scheme (VCOS) fund to reduce carbon emissions. All official flights clocked by Maxis employees on MAS carriers are now given a carbon rating and converted to an equivalent Ringgit amount. All monies from the fund will go towards selected conservation projects conducted by FRIM. - To raise awareness on climate change issues, they participated in the WWFs Earth Hour where all non-essential lighting and electrical equipment was switched off for one hour.

WORKPLACE 1. Human Capital Development Maxis invested more than RM11million in employee development activities across all levels and functions to ensure their people were equipped.Every Maxis employee can to company entire continuous learning virtual library. Maxis has been collaborating with top schools and leading organisations for their leadership and management programmes. Selected senior management employees had the opportunity to attend Harvard Business Schools Premier Business Management Programme and an Executive Education Programme tailormade for Maxis in collaboration with Harvard Business Publishing and IBM. Maxis people are also learning how to resolve the real life issues of business through the Group Emerging Leadership Programme, a general management programme by the Indian Institute of Management Ahmedabad (IIMA). Scholarships are offered to high-achieving employees who undertaking undergraduate studies locally and abroad.

2. Work-life balance Numerous staff events such as the Maxis Family Day and inter-divisional competitions were held to further instill the spirit of teamwork.

COMMUNITY 1. Bridging the Digital Divide Maxis has started few core programs such as Maxis Cyberkids Camp, Maxis Cyberkids with Community, ASEAN Cyberkids Camp. Maxis are reaching out to underserved groups, primarily rural and isolated communities such as those schoolchildren, working adults or retired folk, by equipping them with the technological skills that will help them meet the demands of a rapidly evolving world.

2. Education and Development A joint initiative between Maxis Communications Berhad, the Malaysian Communications and Multimedia Commission (SKMM) and the Ministry of Energy, Water and Communications (KTAK), have organizedMobile Content Challenge. Maxis has organized Maxis Scholarship forExcellence initiatives, were specifically developed to raise Malaysias profile globally by groomingbright, young Malaysians. Maxis also launched the Nurturing Program and Commercialization Support Program. Maxis began awarding qualified scholarships todeserving Malaysians looking to continue their postgraduate studiesat leading universities in the United Kingdom and the USA.The scholarships program was extended to thechildren of their own staff as well as the children of post-paidsubscribers pursuing studies in Malaysia and abroad.From the time when the program started, Maxis has investedRM9.3 million on 61 brilliant Malaysians.

3. Internship or graduate placement schemes The Maxis Internship Programme is ideal for undergraduates to test their abilities on genuine business challenges and to be exposed to real work responsibilities.

Maxis Management Associate Programme (M-MAP) (formerly known as Maxis Management Graduate Trainee Programme (MGTP)) strives to attract and develop young outstanding Malaysian graduates with high potential to rise to and succeed in senior leadership roles.

4. Employee Volunteerism Maxis employee sacrificetheir personal time and resources in a variety of meaningfulprojects such as teaching orphans, renovate homes or raisingfunds. Several of Maxis staff has roped in their families tohelp out and this is helping to build enriching relationships andgiving all a sense of self worth. In 2009, 169 Maxis volunteers clocked in 1,026 hours a 57%increase over that recorded in 2008, indicating that the employeevolunteerism phenomenon at Maxis is on the rise.

Audit Procedures
MARKETPLACE 1. Corporate Governance y We need to scan the organization structure of the company to confirm whether it is similar to what they stated in annual report. y We also need to inspect employee record from Personnel Department, to confirm number of independent and non-independent director in the company. y We need to inspect the company code of conduct and whether it is known by every employee of the company. y For the composition of the committee, we need to make sure that majority is independent director and the Chairman must be independent non-executive director. Beside, we also need to make sure that at least on member of the committee must be fulfill the criteria where he is member of the Malaysian Institute of Accountant or Have at least three (3) years working experience and have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967 or be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967 or Fulfill such other requirements as prescribed or approved by Bursa Securities. y For the Internal Audit Function, we shall inspect any risk management report and minutes made by the committee. y We need to inspect the company Article of Association to make sure that total fee for directors is not more than RM 6 million. y We do re-performance audit procedure to make sure total amount of remuneration pay for the directors in a year is not more than RM 6 millions. y We also need to make sure that the amount pay to directors is correctly stated in the financial statement for the given period.

y We also observe whether there is any verification by Remuneration Committee before the remuneration is pay to the directors. y We also do computation and re-performance in client bonus scheme and to validate no bonus is given out if the company is making loss. y We will inquiries the staff who perform the employee appraisal on how they are doing on the appraisal. y Inspection on the employee appraisal report, to confirm that qualified employee is entitled for the bonus.

2. Stakeholder engagement y We will inspect whether financial result of the client company is release quarterly and it is accessible by the stakeholder y We also will observe the working of the investor relation team on how they dealing with the queries. y We also scan through the website of the client company, is it relevant information is on the website and it is updated time to time.

ENVIRONMENT 1. Participation in Voluntary Carbon Offset Scheme y Obtain and review the scope of corporate social responsibility of the company y Obtain and review management policies and procedures for corporate social responsibilities activities y Conduct interview section with the CSR programme committee to obtain information on: - Planned CSR activities and the objectives - Companys CSR activities report y Obtain and review the supporting documents and records for the payment of funds to the related organization y Perform recalculation to check for the mathematical accuracy of the supporting documents and records y Conduct sampling test whether the amount of funds are paid to the related organization y Meet with the 3rd party which is the organization that should receive the funds y Evaluate and monitor the compliance with external requirements, environmental policies and procedures

2. Participation in theWWFs Earth Hour y Discuss with management and document understanding of the structure of the company's environmental programs

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y Obtain written policy statement and discuss with management to determine if an established commitment to the environment exists at the top of the organization. y Determine if the company has specific environmental objectives y Understanding of the CSR activities which could affect the company financial position to access completeness and accuracy of the environmental costs reported. y Evaluate the environmental costs, liabilities and impact on the electrical equipment which was switched off during the activity y Evaluate and monitor the compliance with company policies and the requirements of the Environmental Management System

3. Reduce wastage and disposal, reuse existing resources and recycle fully exhausted materials y Develop a pre-audit questionnaire which needs to be fill up by the facility that being audited. The questionnaire may include elements such as: Overall environmental management Materials management Waste management Energy management

y Obtain the company written policy statement of commitment to the environment y Discuss with top management to determine if a established commitment to environment is exists in the company y Review internal environmental policies, procedures and guidelines y Conduct workplace inspection

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y Review relevant documents such as: Management policy Management system documentation Previous audit report Employees suggestion for environmental activities

y Obtain evidence for: - Employee participation in the program - Conform with the internal policies and procedures y Obtain information by conduct interview with employees. Information such as: - Company current and past environmental practices - Ideas to participate in CSR activities better - Employees comments and suggestion y Evaluate company compliance with environmental laws and regulations

4. Base stations are installed in compliance with the stringent guidelines set by the Malaysian Communications and Multimedia Commission (MCMC) and the Ministry of Housing and Local Government. y Review relevant documents such as: Management policy Management system documentation Previous audit report

y Evaluate company compliance with environmental laws and regulations

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WORKPLACE 1. Human Capital Development y We need to inspect any document and reports regarding the RM 11million have been spent in employee development activities. y Inspect any cost incurred for the employment development activities in financial statement. y Inquiries the staff whether they know about the training activities and anyone has been utilize it. Is the staff can learn something news in those training activities y Scanning the virtual library and observe the client staff whether the staff is using it or not. y Inquiries the respective department who maintain the virtual library whether it is update from time to time. y For the collaborating, inspect the agreement between the client and the tops school. y Scanning the programmes organize under the collaborating, is it useful to company in long run y Inquiries the client company how they select senior management employee in getting the opportunity to attend the programmes in Havard Business School. Who authorize the selection. y For the Group Emerging Leadership Programme, inspect any cost recognize in financial statement, inquiries the staff who attended the programmes regarding the activities they do in the programmes. y Inspection the document that record the criteria for the Maxis Scholarship. y Inquiries the Personnel Department how many employee can get the scholarship a year and how much the staff can get.

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y Inspect the document whether it is authorize and signature by respective director before the scholarship is given out. y Re-calculate the total amount of scholarship given out with the number of employee get the scholarship, whether they are match. y For the maxis staff who get the scholarship, we will get a confirmation from the University that they are study.

2. Work-life balance y Inspect the company event report, is there any family day and other activities organize for the benefit of the staff. y Inspect the financial statement to get evidence that any cost incurred employee family day. y Inquiries the client staff about the event is it every staff can attend. y Inspect the photos taking during the event.

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COMMUNITY 1. Bridging the Digital Divide y Inspection of bank statement, cheques and receipts of the expenses used that stated in financial statements whether there are outflow of money towards the charity homes. y Confirmation with third party (relevant charity homes stated by Maxis) whether such matter (putting money into the charity homes) is true or not. y Inquiries on the manager of the charity homes and also manager of the company whether money stated in the financial statement and report is it exact amount is given to the charity homes to ensure both statements are matched. y Inspection to be done on the documents whether the amount of the charity work expenses recorded in the financial statements is authorized or not by respective manager. y Inspection on the pictures that is taken from the events that is organized by Maxis.

2. Education and Development y Inspection on documents of bank statements whether the amount of Maxis claimed invested onto the programs with the cash balance in the record is correct or not. y Confirmation with the involved partners with Maxis such as participating universities or participating sponsors or partners whether the scholarship is provided according to the value claimed in the financial statements. y Cheque inspection whether the cheque is properly authorized by respective management and at least two or three signatures are required before the cheque is sent out.

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y Inquiries about the managements past history of carrying out its stated intention that may provide clearer picture of the managements motive. y Inspection on the documents of contracts signed by Maxis sponsored students

3. Internship or graduate placement schemes y Inspect any cost incurred for the Maxis Internship Programmeand Maxis Management Associate Programmein financial statement. y Scanning the programmes organize under the collaborating, is it useful to company in long run. y Inquiries the client company how they select the employee in getting the opportunity to attend theMaxis Internship Programmeand Maxis Management Associate Programme, y Inspection the document that record the criteria for the Maxis Internship Programmeand Maxis Management Associate Programme. y Inquiries the Personnel Department how many candidate is selected for these programmes. y Inspect the document whether it is authorize and signature by respective director before the scholarship is given out.

4. Employee Volunteerism y Observation on the management level whether the company did nurture spirit of volunteerism and teamwork among staff. y Interviewing the employees about the companys effort that they put to instil the volunteerism mode into the working environment and employees as well.

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y Confirmation with the community services centres whether the information of Maxis employees volunteered is true and reliable or not. y Inspection the documents stating the information of Maxis volunteered and compare the report to check whether it is true information or not. y Inquires towards human resource department about the schedule of the activities organized by Maxis and whether it will affect the performance and productivity of the companys employees.

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Weaknesses and Recommendations

MARKETPLACE AREAS 1. Corporate governance  Policy/statement clearly stated  Board composition executive directors, non-executive directors, independent directors, women representation  Transparent board and senior management remuneration  Risk analysis/management framework  Disclosure of non-compliance with laws/legislation/codes/listing requirements 2. CSR Management/Reporting  Policy statements or stated commitments 3/2 3 3 RECOMMENDATIONS

3 3 2 Non-compliance with laws/legislation/codes/listing requirements should be disclosed.

 Adoption of a specific reporting guideline

 Third party report audit/review

Policy should be disclosed in Annual Report, to ensure Maxis.s management is following the CSR policy. The guideline should be disclosed in the Annual Report to make sure the CSR reporting is accordance with the requirement of Bursa Malaysia. No one audit for the CSR Reporting. CSR Management/Reporting should be audited by third party (independent party), to ensure the CSR is accordance with the requirement of Bursa Malaysia.

3. Stakeholder engagement  Structured engagement with all stakeholders 4. Procurement policies

3 2

Since Maxis is not trading company, so Maxis do not purchase any raw materials and goods for business purpose. But the policy of purchasing on fixed asset and acquisition on other

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companiesshould be written in the Annual Report. 5. Product responsibility 2 Since Maxis do not sell any goods, there is no any product responsibility. But Maxis is responsible for delighting and nurturing over 12 million relationships. The way they treat their customers from sign-up through to after-sale service is critical to customer retention and brand equity.

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ENVIRONMENT AREAS 1. Environmental policy clearly stated 3/2 3 RECOMMENDATIONS More policy should be stated, such as the maximum level of energy consumption, water consumptions, and waster production and management.

2. Measurement systems in place to measure:  Emissions of carbon dioxide and/or other greenhouse gases  Energy consumption

3 2 Maxis should measure the energy consumption such as electricity, and set a limit for energy consumption to use less on the energy/electricity for protecting environment. Maxis should measure the water consumption and set a limit for water consumption to use less on the water for protecting environment.

 Water consumption

 Waste production and management 3. Set targets for improvements and/or significant initiatives to reduce the above 4. Companys impact on biodiversity; environmental impact assessments, if any

3 3

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WORKPLACE AREAS 1. Health & Safety (H&S) issues  H&S management system in place 3/2 2 RECOMMENDATIONS The H&S management system in place should be well organized and stated in the policy, to make sure the every staff can handle the health and safety problem. The education and training on health and safety should be held to teach the staffs and to ensure the staffs can handle the health and safety when they are facing the emergency.

 Staff education & training on H&S

2. Human capital development  Staff training number of hours, type of training 3. Work-life balance  Ensuring employees quality of life pension plans, flexibleworking arrangements, counselling/assistance programmes, sports activities, etc. 4. Diversity in the workplace  Staff composition women, ethnic groups, people with disabilities

 Providing equal opportunities

Maxis should employee the staffs which include women, ethnic group, and people with disabilities to give them a chance to work as a normal person. Everyone should be given equal opportunities, so everyone is fair for having the chance to get the job. Welfare of employee is very important for every company. Maxis should give welfare to every good employee as their incentive, so employees have more motivation to work for Maxis.

5. Employee welfare

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COMMUNITY AREAS 1. Employment of local workforce its operations 3/2 2 RECOMMENDATIONS Maxis should have relationship with the local communities in which it operates and/or other communities to support employment of local workforce its operations.

2. Internship or graduate placement schemes 3. Details on the company's community investment initiatives

3 2

Maxis should have relationship with the local communities in which it operates and/or other communities to support the details on the companys community investment initiatives.

4. Encouraging employee volunteerism

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Conclusion
In MaxisBerhad (Maxis), most of the Corporate Social Responsibility (CSR) that required by Bursa Malaysia is reported in theirAnnual Report. There are four major CSR that included in Annual Report are Bridging the Digital Divide, Education and Development, Employee Volunteerism and Environment. As an auditor, we have reviewed all these CSR, and evaluated the CSR by audit procedures to ensure the CSR is properly done and accordance with the requirement of Bursa Malaysia. From the evaluation, we found that some of the CSR of Maxisis not included in the requirement of Bursa Malaysia,it will be the weaknesses for the company. Some weaknesses have been found, which includeCSR reporting is not audited by third party, health and safety issue is not educated and trained for the staff, lack of employee welfare, etc. Therefore, we are giving some recommendations to solve the weaknesses of the Maxis and improve their CSR in order to accord with the requirement of Bursa Malaysia. Some of the recommendations are CSR reporting should be audited by third party, health and safety issue should be educated to the staffs, employee welfare should be given, etc. Overall, Maxis should improve their CSR information reported in the annual report and their CSR.

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References

Maxis Berhad. (company profile). (2010). from http://www.maxis.com.my/personal/about_us/profile/index.asp

Maxis Berhad.(2010). Annual Report 2009.fromhttp://www.maxis.com.my/personal/about_us/investor/annual_report.asp ?iStruct=0:2:2

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