Financial Year Ended 31 January 2017 Quick Facts

Revenue (RM) FCF (RM) PATAMI (RM)

FY17 FY17 FY17 1.32b 624m FY16 5.6b 1.28b FY16 FY16 615m 5.5b Monthly Unique Visitors Household Penetration Share of Viewership

FY17 FY17 FY17 FY16 FY16 5.8m 4.1m 71% 77% 76% FY16

67% ARPU Share of TV Adex (RM)

FY17 FY17 Radio Listeners FY16 100.4 38% 35% FY17 FY16 FY16 99.3 15.6m 12.8m

Share of Radex Go Shop Astro GO Revenue (RM) Downloads FY17 FY16 FY17 FY17 FY16 FY16 73% 70% 261m 189m 3.1m 2.1m TABLE OF CONTENTS

INTRODUCTION Page SUSTAINABILITY: HOW WE MAKE AN IMPACT Page Our Company 2 Corporate Structure 3 Stakeholder Engagement 89 Organisational Structure 4 Material Matters 91 Chairman’s Statement 5 Risk Factors 95 GCEO’s Statement 9 • OUR BUSINESS CREATING VALUE Content 102 Market Landscape 18 Customer 108 How We Create Value 20 Experience 114 Digitalisation 116 HIGHLIGHTS • OUR INSPIRATION Operational and Financial Highlights 22 Segmental Analysis and Quarterly Financial Performance 24 Talent 120 Simplified Group Statement of Financial Position 25 Community 124 Statement of Value Added 26 Key Milestones 28 • OUR ENVIRONMENT Event Highlights 30 Environment 130 Awards 32 Financial Calendar 35 Investor Relations 36 FINANCIAL STATEMENTS Corporate Information 38 Directors’ Responsibility Statement 132 Directors’ Report 133 LEADERSHIP Independent Auditors’ Report 140 Income Statements 149 Board of Directors 40 Statements of Comprehensive Income 150 Senior Leadership 46 Consolidated and Company Balance Sheet 151 Consolidated and Company Statement of 155 CORPORATE GOVERNANCE Changes in Equity Statement on Corporate Governance 53 Statements of Cash Flows 159 Remuneration Committee Report 71 Notes to the Financial Statements 162 Nomination and Corporate Governance 73 Supplementary Information Pursuant to 270 Committee Report Bursa Malaysia Securities Berhad Listing Requirements Audit Committee Report 75 Statement on Risk Management and Internal Control 83 OTHER INFORMATION Analysis of Shareholdings 271 List of Properties Held 276 Forward-looking Statements Disclosure of Recurrent Related Party Transactions 277 This report contains forward-looking statements which are based on Additional Disclosures 289 current estimates and projections of Astro Malaysia Holdings Berhad’s Glossary 292 management and currently available information. These forward-looking statements relate to the plans, objectives, goals, strategies, future operations and performance of Astro Malaysia Holdings Berhad and our subsidiaries. ANNUAL GENERAL MEETING They are not guarantees of the future developments and results outlined Notice of Annual General Meeting 297 as they are dependent on a number of factors which involve various risks, uncertainties and assumptions. Such factors include those laid out in Risk Statement Accompanying Notice of Annual General Meeting 306 Factors on page 95 and the SORMIC on page 83. As such Astro provides Proxy Form no representation in respect of these statements and disclaims all liability whatsoever (whether in negligence or otherwise) for any loss, damage, costs or expenses however arising out of or in connection with these statements and this report. We do not assume any obligation to update the forward- looking statements contained in this report.

Our Annual Report can also be read on corporate.astro.com.my. 2 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Our Company

Astro Malaysia Holdings Berhad is a Malaysian and ASEAN content and consumer company and is recommitting towards becoming a technology-driven organisation in the digital, TV, radio and e-commerce space.

We are Malaysia’s No. 1 media company, serving 5.1 million In FY17, we produced approximately 13,000 hours of content households and 21 million individuals across all screens, with covering a variety of genres. Our robust in-house production 5.8 million unique visitors per month across the digital platforms capabilities are built on two decades of experience and of our entertainment and lifestyle brands. customer insights – underpinning our position as a leading producer of content that caters to ASEAN’s diverse, Astro’s Pay-TV customers have access to 188 TV channels multilingual communities. We also aggregate and distribute broadcast via our DTH satellite TV, IPTV and OTT platforms, a wide range of international content from across the globe. of which 72 are Astro-branded and 60 are in HD. Aside Our content brands are monetised in a truly 360° manner, from Pay-TV, we also provide a non-subscription freemium expanding beyond screens into merchandising and live service called NJOI, which offers 28 channels and 20 radio events, while breaking viewership records regularly with their stations free for life. Consumers across our Pay-TV and NJOI innovative formats that cater to new consumer viewing styles. platforms are able to consume content on demand and on the go through our on demand and Astro GO services. Our Astro has received numerous awards over the years, winning company also houses a regional mobile-first OTT service, the Gold award in the Media and Entertainment category at Tribe. the Putra Brand Awards for seven consecutive years from 2010 to 2016, as well as ‘Brand of the Year’ in 2012, ‘Brand We also own 19 radio stations, including 11 FM stations with Icon’ in 2013 and ‘Malaysian Marketer of the Year’ in 2016. 15.6 million listeners weekly. Available via terrestrial, online Other awards include a Gold Stevie Award at the 11th Annual and app platforms, Astro’s stations include the top stations Stevie Awards for Sales and Customer Service making it in Malaysia across the Malay, Chinese, Tamil and English our third consecutive Gold Stevie Award win, and a Bronze languages. We also house 25 digital brands, including Stevie Award at the 2015 International Business Awards for Malaysia’s No. 1 YouTube channel by subscribers – Astro Corporate Social Responsibility Programme of the Year (Asia, Gempak. Our home shopping brand, Go Shop, has two Australia and New Zealand category) for the Astro Kasih’s dedicated channels on the Astro platform while also being Sports initiatives. These awards are in recognition of Astro’s carried in Singapore, and is available via e-commerce and innovation, brand leadership across the region and extensive mobile. commitment to corporate responsibility. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 3

Corporate Structure

Astro Malaysia Holdings Berhad

TV & RADIO MEDIA SALES & CONTENT INTRODUCTION

Place of Place of Incorporation Incorporation • MEASAT Broadcast Network 100% Malaysia • Astro Entertainment Sdn Bhd 100% Malaysia Systems Sdn Bhd » Astro Arena Sdn Bhd 100% Malaysia » Astro Radio Sdn Bhd 100% Malaysia » Astro Sports Marketing 100% Malaysia » Capital FM Sdn Bhd 100% Malaysia Sdn Bhd » DVR Player.Com Sdn Bhd 100% Malaysia › Asia Sports Ventures 100% Singapore » Maestra Broadcast Sdn Bhd 100% Malaysia Pte Ltd » MEASAT Digicast Sdn Bhd 100% Malaysia » Astro Awani Network 80% Malaysia Sdn Bhd » MEASAT Radio 100% Malaysia » Maestro Talent and 100% Malaysia

Communications Sdn Bhd 2. Management Sdn Bhd » Perfect Excellence Waves 100% Malaysia Sdn Bhd » Red Communications 29% Malaysia Sdn Bhd » Radio Lebuhraya Sdn Bhd 100% Malaysia » Spark Asia TV Pte Ltd 30% Singapore 3. » Yayasan Astro Kasih* Malaysia » Turner Astro Limited 20% Hong Kong • Astro Productions Sdn Bhd 100% Malaysia • Astro Shaw Sdn Bhd 100% Malaysia • Astro Productions Services 100% Malaysia 4. Sdn Bhd » Karya Anggun Sdn Bhd 100% Malaysia » Nusantara Films Sdn Bhd 100% Malaysia » Tayangan Unggul Sdn Bhd 100% Malaysia DIGITAL MEDIA & PUBLICATIONS 5. • Astro Digital Sdn Bhd 100% Malaysia RETAIL » Astro Digital 5 Sdn Bhd 100% Malaysia 6. » Astro Digital Publications 100% Malaysia • Astro Retail Ventures Sdn Bhd 100% Malaysia Sdn Bhd » Astro GS Shop Sdn Bhd 60% Malaysia • Tribe Limited 100% Hong Kong › Astro GS Shop 100% Singapore

Singapore Ptd Lte 7. MANAGEMENT SHARED SERVICES OTHERS • Astro Group Services Sdn Bhd 100% Malaysia 8. • Astro (Brunei) Sdn Bhd 100% Malaysia » Kristal-Astro Sdn Bhd 49% Brunei

• MBNS Multimedia Technologies 100% Malaysia 9. Sdn Bhd

* MEASAT Broadcast Network Systems Sdn Bhd has defacto control over Yayasan Astro Kasih 4 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Organisational Structure ASTROASTRO MALAYSIAMALAYSIA HOLDINGSHOLDINGS BERHADBERHAD ANNUAL REPORT 2017 5

Chairman’s Statement

Dear shareholders, FY17 was a successful year for Astro, where we focused on growing our existing businesses and exploring new opportunities. As digital INTRODUCTION business models proliferate globally, Astro is uniquely positioned at the crossroads of media and technology to provide comprehensive offerings to our customers and our markets. It is a key priority that we continue 2. adapting to the dynamic changes of our industry to 3. stay relevant. 4. 5. Tun Dato’ Seri Zaki Bin Tun Azmi Independent Non-Executive Chairman 6. 7. 8. 9. 6 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Chairman’s Statement

As we conclude our 20th anniversary year, we are humbled by the responses we have received from our community and we remain committed to improving our value proposition for the 5.1 million households and 21 million individuals that we serve.

Our Board and senior leadership strive to ensure that Astro remains the home of the very best in entertainment, delivers innovative products and services, and always offers a best- in-class customer experience to remain as Malaysia’s content provider of choice.

Dividend Per Share Direct Contribution of

RM12.5 sen RM2.1 billion to Malaysia’s GDP

Commitment to Shareholder Value Adding to Our Nation’s Potential

Based on our performance throughout the year, we are As a corporate citizen of Malaysia, we recognise that it is our pleased to reward our shareholders with quarterly dividends responsibility to fulfil a bigger role and assist in developing of 3 sen per share, a 9% increase in payout from the year the nation’s potential. We actively focus on supporting our before. Our Board has also recommended a final dividend thriving local media industry, and consistent with prior years, of 0.5 sen per share for FY17 for our shareholders’ approval Astro commissioned RM84 million worth of programmes at the upcoming AGM, which will bring the total dividend from production houses, collaborated with more than 17,000 for the year to 12.5 sen per share. Our dividend policy has vendors, provided advertising solutions to more than 1,900 rewarded our shareholders with a payout of over 100% of corporations, and catered to the entertainment needs of over PATAMI since our IPO, and 104% in FY17. Since our listing 23,000 commercial establishments and hotels. Based on 2016 in October 2012, we have declared dividends totalling statistics, it is estimated that we contributed approximately RM2.5 billion. RM2.1 billion directly to the country’s GDP. Additionally, we have made an overall positive impact to the Malaysian economy, through indirect and induced consumption encompassing employment and tax. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 7

Chairman’s Statement

Our strict adherence to disclosure and transparency policies with all stakeholders has fostered an environment of high performance and INTRODUCTION continuous improvement.

We continue to work closely with various government ministries and regulatory bodies, especially the Ministry of Communications and Multimedia Malaysia and the Malaysian Communications and Multimedia Commission to foster the growth of the local content and media industry. Over the past year, we have cooperated with the Ministry of Domestic Trade and Consumer Affairs, Royal Malaysian Police and other enforcement bodies to address content piracy, particularly digital piracy. 2. In line with our regional aspirations, we entered into content and licensing partnerships across several countries last year such as Indonesia, Thailand, India and China. These collaborations expand Astro’s marketplace, while enabling us 3. to learn from our peers. Our alliance with Pinewood Iskandar Malaysia Studios to offer integrated television content

production services has strengthened both our capabilities, 4. and together we aspire to establish the studios as a world- class, regional production hub.

Adopting Strong Corporate Governance 5.

Our Board upholds its fiduciary duties by adopting high standards of corporate governance and international best practices across our Group. Our strict adherence to 6. disclosure and transparency policies with all stakeholders has fostered an environment of high performance and continuous improvement. 7.

At Astro, we celebrate diversity and this is reflected in the composition of our Board across a mix of relevant backgrounds, age and genders. We appreciate that 8. leveraging on a variety of experiences drives innovation and facilitates the creation of extraordinary ideas, contributing to the growth of Astro. Further details on our governance, risk management and compliance policies are provided in the 9. Corporate Governance section of this Annual Report. 8 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Chairman’s Statement

with professional trainers and coaches. Over the past year, Kem Bola brought 32 aspiring footballers from Malaysia, Singapore and the Philippines for a 10-day training session with FCBEscola in Barcelona, Spain. Likewise, Kem Badminton sponsored 30 Malaysians and Indonesians on a two-week training stint at the National Training Centre in Tokyo, Japan. Ultimately, we hope that these experiences will inspire talented youngsters to aim higher and dream bigger. The Road Ahead

The global media and telecommunications sector is confronted with structural shifts, and we understand that now more than ever, innovation is crucial to position Astro as Malaysia and ASEAN’s leading digital-first media and lifestyle company. We will focus on key strategic initiatives, leveraging on an agile team culture and technological advancements to ensure relevance in the new world. Engaging with Our Community In Appreciation

At Astro, we endeavour to build a better world for the On behalf of our Board, I would like to thank the Ministry communities that we operate in. In FY17, our talent of Communications and Multimedia Malaysia and other contributed over 15,000 hours of their own time for government bodies, from whom we have gained valuable 112 projects under the Astro Kasih employee volunteer insights and cooperated with, in our shared vision for the programme, guided by four key areas of Lifelong Learning, future of Malaysia’s growing media industry. We look forward Community Development, Sports and Wellness, and the to our continued collaboration in the coming years. Environment. To our valued stakeholders − customers, shareholders, We believe that equal access to education is imperative in business and content partners − we appreciate your loyalty enabling positive change in the community. During the year, and contributions to Astro. Kampus Astro renewed its commitment with the Ministry of Education to bring world class education to more than 5 To my fellow Directors, thank you for your continued support million students across Malaysia, providing Astro decoders, and wise counsel. I would like to take this opportunity to television sets as well as access to 17 international and local welcome Richard John Freudenstein and Lim Ghee Keong education channels to government schools. This programme who are the newest members of our Board. We bid farewell to also extends to paediatric wards and military hospitals. a few of our colleagues on the Board − Dato’ Abdul Rahman bin Ahmad resigned in September last year to pursue his Astro continues to partner with the Ministry of Education career progression. Two of our longest-serving Directors, to support Astro Kasih Hostels in three rural schools: SK Bernard Anthony Cragg resigned on 31 March 2017 Magandai, Kota Marudu, Sabah; SK Sg Paku, Kapit, Sarawak; while Datuk Chin Kwai Yoong will not be seeking and SK Malinsau, Ranau, Sabah. These hostels currently re-election at the forthcoming AGM. On behalf of our Board enable 300 students to attend primary school without having and Team Astro, I would like to extend our deepest gratitude to endure hazardous and long daily commutes. to these Directors for their dedication and contributions to Astro during their tenure, and wish them all the best in their Similarly, Astro is a strong advocate of social welfare future undertakings. and in conjunction with the Ministry of Women, Family and Community Development, offered over 2,600 And finally, thank you to everyone at Team Astro, for your underprivileged centres with our NJOI service. Additionally, unwavering commitment and dedication in the pursuit of our Astro Kasih EkoVillage programme encourages lifelong excellence for our customers. It is this tenacity and drive to learning and sustainable economic development through be best-in-class that will continue to propel Astro as a market hands-on agriculture with the backing of PEMANDU and leader in this digital age. the Ministry of Agriculture and Food Industry, Sabah.

In FY17, Astro’s Kem Badminton and Kem Bola expanded beyond Malaysia and now offer young athletes from Tun Dato’ Seri Zaki bin Tun Azmi ASEAN with opportunities to further develop their skills On behalf of the Board of Directors ASTROASTRO MALAYSIAMALAYSIA HOLDINGSHOLDINGS BERHADBERHAD ANNUAL REPORT 2017 9

GCEO’s Statement

Dear shareholders, FY17 was a year where we achieved several new milestones, in spite of formidable challenges in our rapidly evolving and INTRODUCTION vibrant industry. Let’s pause for a moment to review and celebrate our accomplishments – and then regroup to architect, organise and focus on what I believe will be our most exciting 2. year ahead. 3.

Rohana Rozhan Executive Director & 4. Group Chief Executive Officer 5. 6. 7. 8. 9. 10 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

GCEO’s Statement

Revenue

RM5.6 billion

PATAMI

RM624 million

Free Cash Flow

RM1.3 billion

Over the past year, we organised our 5.8 million monthly unique visitors on 2016 and the Rio 2016 Olympics. strategic imperatives into Customer, our digital platforms. We extended We stayed highly cash generative Content, Experience, Digitalisation and our reach beyond Malaysia and can with free cash flow of approximately Talent, and detailed plans against them. count Singapore, Indonesia and the RM1.3 billion, and remain focused on Our execution was as one Team Astro, Philippines as countries served through capital management, for which we will with strong deliverables and results Go Shop and Tribe, with our sights set continue to make disciplined choices. across the board. We broke new ground on more markets in the near future. – record viewership numbers, the launch Since completing the set-top-box of several new business streams and In FY17, we grew revenue and PATAMI (“STB”) swap-out to the B.yond expansion outside Malaysia; anchoring to RM5.6 billion and RM624 million platform in 2013, capital expenditure a platform for further growth. respectively, an increase of 2% and has been at lowered levels with 1%, underpinned by e-commerce and RM409 million invested in FY17, which Today, Astro is in 5.1 million households, adex. This was combined with prudent we do not expect to rise significantly in serving 21 million individuals, with cost optimisation and a conservative the short-term. We closed the year at 15.6 million weekly radio listeners, who hedging policy to manage foreign a cash position of RM647 million, and consume our content across a multitude exchange volatility and the rise in maintained a healthy net debt/EBITDA of products. We are also Malaysia’s content costs, exacerbated by it being a leverage level of 1.5x. No. 1 local online media company with double sporting year with UEFA EURO ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 11

GCEO’s Statement

We recognise the need to serve an increasingly digital lifestyle, and have hence placed a heavy emphasis on personalisation, mobility and interactivity to address individual INTRODUCTION relationships with all Malaysians.

In FY17, we rewarded our shareholders NJOI underpinned our growth with with 12.5 sen of dividends, which a 30% increase from 1.3 million translates to a 4.5% yield. We have households in FY16 to 1.7 million, always guided that Astro is a total return translating to a total household stock, and going forward, dividends will penetration of 71%. Prepaid purchases be viewed in that context. We believe have also accelerated, with sales that our strong balance sheet will enable growing 86% to RM37 million on the us to sustain this policy, while allowing back of an appealing content slate and 2. reinvestment for the continued growth better access. Our NJOI customers of our Group. As we venture forward, we enable a greater reach, which results do so recognising our market strengths in a more attractive advertising

that we need to reinforce and build proposition, in addition to providing a 3. on, as well as the gaps that we must ready upsell path onto our pay products aggressively address, in order to be a and services. deserving customer media brand of 5.1 million choice. Serving Individuals 4. Households Customer: Reach and Scale We recognise the need to serve an increasingly digital lifestyle, and have 5. Growing Household Penetration hence placed a heavy emphasis 21 million on personalisation, mobility and Individuals While the Pay-TV segment has been interactivity to address individual

stable at 3.5 million in FY17, we relationships with all Malaysians. 6. prioritised upselling of our value-added To facilitate immersive viewing, we products and services. We also strived significantly revamped the Astro GO million 15.6 to offer value across all spending interface, adding more functionalities

Radio Listenership appetites, ensuring that each segment to the platform while ensuring that 7. of our customer base has a wide range customer experience remains our of choices. Despite consumer sentiment highest priority. This has led to an million remaining soft, we successfully increase in time spent on the app – at 5.8 8. Monthly Unique Visitors improved our ARPU from RM99.3 in an average of 179 minutes per week – FY16 to RM100.4. and downloads rising to 3.1 million. 9. 12 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

GCEO’s Statement

Our investment in IP creation culminated with the production and commissioning of over 13,000 hours of local content in FY17.

Expanding Tribe Content: Differentiated, Day/Date, Premium and Signature IPs We launched Tribe, our mobile-first regional Over-the-Top (“OTT”) streaming app in March 2016 in Indonesia, and December 2016 in the Philippines. Partnering with The very foundation of our business is built XL Axiata and Globe Telecom respectively, Tribe’s unique differentiator is its promise on sharing great stories. Our focus this year of an up-to-date content experience in genres specifically tailored for each target was on content creation and ownership, market. Tribe extends Astro’s reach, relevance and scale in the region particularly which is increasingly pivotal in a market that to a younger online demographic. Since its introduction, Tribe has recorded over values differentiated and vernacular IPs. We 1 million registered users in Indonesia and the Philippines. also enhanced the exportability of signature IPs to execute on our intent of being a key Go Shop Goes Regional player in the content space across ASEAN.

We are pleased to announce that Go Shop, our home shopping business, has gone Our investment in IP creation culminated with regional. In addition to two dedicated channels in Malay and Mandarin, and via the production and commissioning of over e-commerce and mobile, Go Shop is now on the StarHub platform in Singapore. 13,000 hours of local content in FY17. This, In the past 12 months, Go Shop grew its revenues by 38% to RM261 million, along with the thousands of hours of content garnering close to a million shoppers who can choose from an array of curated we curate and aggregate, drove viewership products across both traditional and online platforms. to new heights with over 70 shows crossing the 1 million viewership mark, with some Strengthening our Leadership in Radio even hitting a new milestone of 5 million. Additionally, our viewership and TV adex Astro Radio’s strength is underpinned by ERA fm, MY fm, hitz fm and THR Raaga’s share improved from 76% to 77% and 35% compelling leadership in their respective languages and strong digital presence. to 38% respectively. Our radio brands also resonate with millennials through social media and live- streaming. This has contributed to the growth of our radex share from 70% to 73% Local is the New Premium in FY17. During the year, we acquired Capital FM Sdn Bhd, adding two more FM stations to our stable. We believe that this will contribute to reinforcing both our Our vernacular shows such as Gegar Vaganza listenership and radio advertising proposition, while providing additional content and Maharaja Lawak Mega 2016 achieved formats for enjoyment. record viewership of 5.0 million and 4.9 million ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 13

GCEO’s Statement

respectively. We saw a renewed interest in Astro’s Chinese content, which has gained a following among Chinese youth in Malaysia as well as in our neighbouring countries. Our top 3 Chinese programmes: Classic Golden Melody, International Hua Hee Karaoke and Asian Battleground drew participants from various Asian countries, making them truly regional IPs with cross- national appeal. INTRODUCTION

Astro Signatures Like Never Before

We are pleased with our emerging strength in the Malay drama space. Suri Hati Mr. Pilot became our highest-ever rated show with 5.2 million in viewership. We also created new content verticals such as Islamic content – launching Iman, Astro’s 360° Islamic kids brand, and new shows such as Mengaji Dengan Upin & Ipin, registered 1.5 million unique visitors Ceria i-Star and I-Kids. Our commitment The Best Ever EURO Cup and Olympics – reflecting a growth of 300%. Astro to strong IP ownership and creation is

Ulagam’s live-streaming of Thaipusam set 2. exemplified through Didi & Friends, our top- FY17 was a big year for sports fans. a Guinness World Record, tracking a 119 performing pre-school animation series We broadcast all 51 UEFA EURO 2016 million reach on Facebook and generating which amassed over 381 million views matches live in HD and SD, and offered 2.2 million views among global audiences. on YouTube and 2.9 million in viewership 24 channels dedicated to the Rio 2016 eGG Network, our eSports channel, was 3. on TV. Additionally, the popularity of our Olympics with live and round-the-clock launched in five countries within its first signature programmes extends beyond coverage of every event, complemented year including Australia, the first for an the screen, with over 500,000 people by dynamic interviews and stories. Astro Arena, our local sports channel, recorded Astro-branded channel. attending 350 on-ground events last year. 4. over 11 million in total viewership. We Growing International Day/Date also ensured that our sports coverage Regional Content Creation and was available online, with our first live- Collaborations

To enhance our value proposition, we streaming event on YouTube during the 5. To serve the whole of ASEAN, curated a comprehensive international Olympics leading to a 260% increase in we are cognisant of the need to content experience of box sets and Day/ subscribers. collaborate with, as well as learn Date shows. These include global hits from our peers in the region. 6. such as Game of Thrones, Westworld, Creating Content for a Digital World In FY17, we entered into partnerships The Walking Dead, Marvel’s Agents across several countries: in Indonesia of S.H.I.E.L.D., and Quantico. As the We accelerated digital content creation and engagement for multiple customer for the creation of Nusantara content,

popularity of Asian content grows, we 7. in Thailand by securing the production doubled the Day/Date content from China segments in FY17, and the results have of the original series 3 A.M., and in and Korea, which includes the highly been encouraging. Astro Gempak became China and India by concluding the popular Legend of the Blue Sea and Goblin the first Malay-based YouTube channel licensing deal to remake The Journey. from Korea, together with I am a Singer, to attain over 1 million subscribers. Astro 8. Running Man Season 4, and Dad! Where Zhong Wen, our Chinese web platform, Are We Going Season 4 from China. 9. 14 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

GCEO’s Statement

Experience: On Demand and Customer Empowerment

When we launched our on demand proposition in 2015, we aimed to provide customers with an even greater viewing experience. We now have over 23,000 titles available on the platform, and are even more focused on curating a second-to-none library, providing access to a wide range of personalised, easy- to-discover content across Day/Date programmes and box sets with full stacking rights, supported by a self- learning recommendation engine.

We are also proactively managing the end-to-end customer journey, from sign-up to installation and beyond. In particular, we upgraded our on-screen platform, Channel 200, and launched Astro View Mobile, a companion app that not only allows users to access and plan their favourite shows, but to also manage their account and billing details. Furthermore, we offer an easy transactional experience with a dynamic payment gateway, so customers are able to pay instantaneously upon receiving their e-bill, or make purchases in foreign currencies. Talent: On and Off-Air Digitalisation: Accelerating Transformation None of our successes over the past year would have been made possible without the commitment of Team Astro, our 4,850-strong workforce of on and off-air In line with our transformation to become talent. Although we are a 20 years “old” organisation, we have to be 20 years a cloud and mobile-first, analytics- “young”, embracing complementarity and diversity in tandem with our customer driven organisation, we have embarked demographics and marketplace. We encourage a culture of curiosity, learning, on a three-year digital transformation challenging, experimenting, relearning, overachievement and humility, as we programme with Amazon Web Services nurture and proactively manage talent required to execute against our strategies. which focuses on creating a culture of innovation, adopting game-changing We are dedicated to helping our talent fulfil their potential, not only within Astro, but technology, improving our ability to work also on the global stage. Nabil, our comedian and TV show host, hosted the 89th across the organisation with simplified Oscars Red Carpet Live show in L.A. Our other on-air stars include Neelofa (MeleTOP processes, empowering teams to test and Suri Hati Mr. Pilot) and Zizan Razak, who is Malaysia’s top male celebrity with a and learn, and the sharing of knowledge large social media following. Equally important are our younger talent like 14-year old and best practices. We are convinced that Amira Drummer, one of the youngest recipients of the YouTube awards and 13-year old leveraging on technological platforms and Danish Shah Danial from Ceria Popstar. infrastructure from partners will enable us to be more efficient and customer-centric I would like to take this opportunity to thank Team Astro for their passion, energy and in our product development and delivery. commitment in pursuit of always being better. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 15

GCEO’s Statement

Our Community: Our Inspiration

It is our privilege and duty to leave a positive impact on the community around us. We aim to nurture deep and lasting shared values with those we aspire to serve via Yayasan Astro Kasih, focused on the four pillars of Lifelong Learning, Community Development, Sports and Wellness, and the Environment. INTRODUCTION 2. 3. Astro Kem Bola and Astro Kem To date, more than one-third of our boys Badminton are our flagship initiatives and girls who have qualified for Kem which champion sports, and this year we Bola intensive training are continuing are honoured to have introduced both their pursuit for sporting excellence in The children we 4. programmes beyond Malaysia through sports schools, and I am delighted to our partners: Globe Telecom in the note that 30% of them are girls. There meet through Philippines, StarHub in Singapore, and are many inspiring stories to draw from

our community 5. Persatuan Bulutangkis Seluruh Indonesia our Kem Bola programme – Emily from in Indonesia. SK Magandai in Sabah, an Astro Kasih outreach activities Hostel, has now gone on to play for At Astro, we aim to empower our kids the national under-14 women’s football inspire us to reach 6. to dream big and to compete on a team, along with 16 other boys and girls global stage. This is manifested in Kem who have also made it onto national for our dreams Bola’s collaboration with FC Barcelona. teams. The children we meet through our

I had the pleasure of watching a team community outreach activities inspire us and goals like they 7. of 32 young footballers, comprising to reach for our dreams and goals like 23 Malaysians, 4 Singaporeans and 5 they do, and we hope to cheer them on to do, and we hope Filipinos train with FCBEscola coaches even greater heights.

to cheer them on 8. at a two-week training stint. It was both inspiring and humbling to see them The New World to even greater immerse themselves in the experience with passion, energy and hunger to learn Coming into FY18, we acknowledge that

heights. 9. and excel, while growing as individuals as we are now competing in the New World well as members of a diverse team. for customer relevance. Technology, 16 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

GCEO’s Statement

Underpinning these efforts, our human capital strategy will be guided by enhancements in the areas of innovation, creativity, talent, business acumen and entrepreneurship. Specifically, we will upskill from legacy to digital, hire targeted specialist resources, while boosting productivity through automation.

Rapidly Scaling Our Digital Ventures

Our digital ventures, namely Go Shop, Tribe and eGG are off to a good start, and we expect each to play a pivotal role in demographic and socio-economic trends are giving rise to shifts in competition and driving expansion into new adjacencies markets, thus affecting business models globally. Last year, I shared how our own and regional markets. Each of these operating environment is undergoing rapid disruption, and highlighted the necessity ventures opens up significant upside for us to proactively shape the future of our domain. This year, we have developed opportunities in the regional digital concrete plans in pursuit of this path, which we acknowledge will be a challenging but economy: e-commerce via Go Shop, OTT exciting endeavour. video via Tribe and eSports via eGG.

To be a deserving market leader, it is vital that as an incumbent we can run the race In Malaysia, Go Shop will leverage our of being both ‘big’ and ‘small’. Being ‘big’ is crucial to realise scale in a race to existing scale and reach to achieve top commoditise, and yet we must be ‘small’ to remain agile so that we can run faster, to be line growth and profitability. It is uniquely unafraid to challenge norms and disrupt ourselves in a quest to stay relevant to current placed among e-commerce players in the and new customers. In both ‘races’, we cannot be incremental, but fundamental, as market, as it offers a premium shopping the race is going to get faster with competition literally a click away. experience across multiple platforms: TV, web and mobile. The big screen presence We see three key areas of focus to sustain our long-term growth: digitalising our creates affinity, loyalty, and brand trust, dominant legacy businesses, rapidly scaling our digital ventures, as well as deepening thus driving high repeat purchases at strength in verticals and building a robust innovation pipeline. strong margins; while the use of our own advertising inventory across TV, radio Digitalising Our Dominant Legacy Businesses and digital for lead generation gives it a superior cost advantage. Our efforts to digitalise our core platforms have already borne fruit. However, digitalisation for us is not limited to a technological undertaking. The digital economy Tribe will continue expanding to more has lowered the entry barriers for agile competition, increasing the pressure for us to markets this year beyond Indonesia offer greater overall value to customers to maintain our position as their provider of and the Philippines, and with that, choice. Optimisation of business systems and processes are crucial to create speed seed a regional customer base across and efficiency gains, while rethinking and retooling the service delivery chain from sales ASEAN’s 650 million inhabitants. to customer care will be critical to enable an improved experience in line with today’s While the OTT video industry in the customer expectations. region is still at a nascent stage, it is poised for exponential growth We will diversify distribution through more connected, on demand and on the go as broadband and LTE mobile experiences for households and individuals. In FY18, we will at least double the infrastructure is progressively number of connected STBs to 1 million, while we commit to continue growing Astro deployed – today the region’s LTE GO downloads and usage. The end-to-end service journey will be further digitalised connections total over 100 million and to be more interactive and grant more control to customers, with self-serve ability is expected to double by end-2018; for them to plan and manage their viewing, subscription and service requests online. making content consumption on small Through the use of analytics, this level of interactivity will provide us with dynamic data screens an accepted norm. For Astro, to deliver better content, products and services, for example through personalised Tribe’s expansive reach also creates recommendations and intuitive interactions. stronger buying leverage with content ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 17

GCEO’s Statement INTRODUCTION

suppliers and opportunities for pan-Asian productions that an orchestrated change management programme. We have appeal to a wider base, including Malaysian consumers, confidence that with our resources, strong assets and customer with lower per unit cost. base, coupled with a winning attitude – we will succeed. 2. Deepening Strength in Verticals and Building a Robust Lastly, in what is fast becoming a noisy and crowded marketplace, Innovation Pipeline we will restate and reinforce our customer brand ethos. We will be obsessive about listening to feedback, ensuring that our

We venture into the year with the knowledge that in the New products and services are always of value to our customers. We 3. World, distribution channels are far more democratised and recognise the importance of this and are confident in our ability consumers are less reliant on intermediaries as they can go direct to package and market a compelling proposition, harnessing our to the source. As such, we are highly committed to our IPs and access to technology and content windows, complemented with our verticals, which is what customers want and are willing to key live sports and global news, while clearly differentiating via 4. pay for. our focus on vernaculars.

The coming year will see us pursuing opportunistic niches We take immense pride in delivering on our promises by 5. in a 360° manner across our IPs and key differentiators, for embracing best-in-classes, diversity, complementarity and example an Islamic 360° franchise incorporating content, talent integrity in all that we do in our journey to be a long-term and and merchandise/commerce elements. This will require us to sustainable brand of choice for all our stakeholders including our

be best-in-class in the creative ecosystem and to proactively communities. 6. seek collaborations with like-minded partners in areas such as IP co-creation and production, talent management, curation, We see incredible opportunities ahead and are dedicated to marketing, selling, distribution and merchandising. We will Astro’s growth. On behalf of Team Astro, thank you for believing assemble talent and create compelling content to foster and in us: from our shareholders and regulators, to business partners 7. sustain these communities, and monetise via subscription, adex and suppliers, and particularly our customers – you are the and commerce. reason why we can achieve all that we have. I am truly excited at the prospect of our future and more adventures together. Have a Our belief is that the intersection of media, entertainment and great year ahead and Game On! 8. technology will be a natural domain for us to evolve towards over the mid-term. To support this evolution, we will build a

robust innovation pipeline, guided by capability enhancements 9. in areas of technology, people and culture. Our transformation will involve collaboration across the organisation, developing a Rohana Rozhan product discovery pipeline, internal accelerator initiatives, and On behalf of Team Astro 18 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Market Landscape

Economic Trends Competition

• Malaysia’s GDP is expected to grow by approximately • Consumers continue to shift towards non-linear, on 4.3% - 4.8% in 2017 demand viewing, with OTT products increasing in popularity • Macroeconomic uncertainty has placed pressure on the Malaysian Ringgit, the KLCI index, BCI and CSI. Astro • With high-speed broadband penetration remaining low continues to monitor the market closely and maintains a in Malaysia, Astro manages competition risk through conservative approach to hedging its risks, customised enhancing our content and product propositions. We to its business needs are constantly adding new features to ensure a best- in-class customer experience, while differentiating • Malaysia’s TMT industry experienced negative top line by strengthening our vernacular, international and growth in the past year, with operators now reassessing sports propositions through investing in more local IPs, traditional business models and focusing on new growth Day/Date and premium sports content drivers • In 2016, we revamped the STB platform, as well as Astro • A younger segment of consumers emerged as a key GO to provide consumers with greater on demand content demographic, with 70% of SEA’s population now under and a more intuitive user experience strengthened by 40 years old. Internet speed in SEA is expected to reach personalised recommendations the global average, with access available to >80% of the population • Regionally, Astro has also launched Tribe, our mobile- first OTT proposition, in Indonesia in March 2016 and in the Philippines in December 2016, in partnership with telecommunications operators XL Axiata and Globe Telecom respectively ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 19

Market Landscape

Increase Technological 1. in IP Ownership E-Commerce Innovation CREATING VALUE

• IP creation and ownership are • In Malaysia, the e-commerce • The rapid digitalisation of our increasingly prioritised by Pay- industry is forecast to reach operating environment has brought TV and OTT operators as a RM5 billion by 2021 fuelled by about access to a wide range of means to differentiate and enable growing affluence, the rise in internet internet and app-based products monetisation on a larger scale penetration levels, an enhanced and services. This raises the online shopping experience as need to build and adopt new and • Creation and aggregation of the well as improved supporting innovative technologies to enhance 3. best vernacular and Asian-centric infrastructure our competitive advantage content, across multiple genres are key focus areas for Astro and • Since its launch in January 2015, • Digital transformation is a priority

have helped to increase viewership Go Shop has been providing for our organisation, from using 4. and household penetration for our Malaysians with the convenience technology to enhance our Group. Moving forward, Astro will of home shopping on all screens advertising offering, improving continue to invest in vernacular and devices, across e-commerce customer experience, as well as content that travels beyond and m-commerce, and now has to instil operational agility and 5. Malaysia for further commercial two 24/7 channels available in efficiency through automation benefits Malay and Mandarin respectively. In November 2016, Astro expanded 6. • In 2016, Astro created over 13,000 Go Shop to Singapore with a hours of content for our 72 Astro- Mandarin language channel now branded channels carried on StarHub 7. 8. 9. 20 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

How We Create Value

Astro aspires to provide best-in-class customer experience and a comprehensive entertainment offering across all platforms. We create shareholder value through the following initiatives:

Content Customer

Strategic Pillars Creating, aggregating, distributing Reaching customers across spending and monetising content, both local propensities and mediums of and international, to provide a unique consumption through our diverse content proposition business segments including TV, radio, digital and e-commerce

Market Landscape • Proliferation of digital business • Disposable income under pressure models across the region from challenging macro conditions • A focus on content IP ownership • E-commerce tipped to grow as an industry through better infrastructure

Refer to pages 18 to 19 for further detail

Key Risks/Opportunities Economic Conditions

Strategic Partnerships and Alliances Technology and Innovation Content Cost Logical and Physical Security

Legal and Regulatory Internal Controls Treasury Refer to pages 95 to 99 for further detail Accounting and Reporting

Growth Opportunities

Growing Customer Reach Expanding Share of Adex Driving E-commerce Monetising IP

We will continue to grow We will continue driving our We will continue growing We will continue monetising our customer reach across strength in adex through our suite of offerings and key IPs across licensing, Pay-TV and NJOI, as well as leveraging on our expanding platforms, and enter new merchandising and live through our OTT offerings, base and enhancing our markets as e-commerce is events, underpinned by the both within Malaysia and solution-focused, integrated poised to grow in the region popularity of our content IPs across the region advertising proposition ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 21

How We Create Value

Experience Digitalisation Talent 1.

Enabling a best-in-class user Leveraging on international partners Investing in and developing the experience and intuitive interfaces and developing digital assets to best on and off-air talent while through strengthening our digital ensure that we are increasingly encouraging a culture underpinned capabilities and customer self-care efficient and effective as a Group in by diversity and innovation serving our customers

• Consumers prefer personalised • Digitalisation of the industry • Expanding pool of talent for hire viewing including customised enabled wide access to apps across the region CREATING VALUE recommendations and services • Talent with strategic expertise • An increase in demand for mobile- • Digital transformation of highly in demand first services businesses becomes a necessity

Economic Conditions Market and Competition Strategic Partnerships and Alliances Technology and Innovation

Logical and Physical Security 3. Talent Management Service Availability Legal and Regulatory 4. Internal Controls Treasury Accounting and Reporting 5.

Value Creation 6.

Going Enhancing Ensuring Supporting the Responsible Regional Shareholder Value Sustainability Economy Corporate Citizen 7.

We are focused on a We are committed We aim to ensure a We believe in creating We focus on undertaking regional expansion to rewarding our sustainable business value for the economy our business with integrity and aspire to

strategy and will shareholders through that will remain relevant as a whole and that 8. continue to work with dividends and the in our rapidly evolving our contribution as leave a lasting, positive global partners to pursuit of growth industry a corporate citizen impact on the lives that achieve our aspirations opportunities towards consumers, surround us via our

corporations and community initiatives 9. employees will help throughout Malaysia and drive sustainability beyond 22 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Operational and Financial Highlights

FY17 FY16 FY15 FY14 FY13

Operational Results TV households (‘000) 5,121 4,818 4,429 3,884 3,485 Pay-TV gross additions (‘000) 330 373 411 499 456 MAT churn 11.9% 9.5% 9.9% 9.9% 7.8% Net additions (‘000) 302 389 547 400 418 Pay-TV net additions (‘000) (83) 40 69 167 209 NJOI net additions (‘000) 386 349 478 233 209 ARPU (RM) 100.4 99.3 99.0 96.0 93.2 Share of TV viewership(1) 77% 76% 49% 47% 43% Radio listenership (million) 15.6 12.8 12.9 12.2 12.3 Adex (RM million) 705 640 589 582 504

Financial Results (RM million) Revenue 5,613 5,475 5,231 4,791 4,265 EBITDA 1,817 1,941 1,808 1,616 1,388 EBIT 1,095 1,115 920 777 786 PBT 846 829 721 569 575 PAT 617 608 514 448 420 PATAMI 624 615 519 448 418 FCF 1,317 1,276 1,325 1,022 627

Financial Ratios Return on invested capital 32% 33% 34% 30% 28% Net debt/EBITDA (times) 1.5 1.5 1.2 1.3 1.5 Revenue growth 2% 5% 9% 12% 10% EBITDA margin 32% 35% 35% 34% 33% PATAMI margin 11% 11% 10% 9% 10% Dividend per share (sen)(2) 12.5 12.0 11.0 9.0 4.0

Financial Position (RM million) Equity attributable to equity holders of the Company 623 601 694 613 512 Total assets 6,266 6,901 6,731 7,104 6,518 Total borrowings 3,406 3,805 3,503 3,664 3,703 Net debt 2,759 2,826 2,150 2,030 2,095

Notes: (1) Viewership share is based on DTAM deployed by Kantar Media as of FY17, comparatives in FY16 are updated accordingly (2) Dividend per share consists of interim and final dividends post-IPO declared and proposed in respect of the designated financial years ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 23

Operational and Financial Highlights 1. Revenue EBITDA Financial Year Ended 31 January Financial Year Ended 31 January (RM million) (RM million) 1,941 2. 6,000 5,475 5,613 2,000 5,231 1,808 1,817 4,791 1,616 5,000 4,265 1,500 1,388 4,000

3,000 1,000

2,000 500 1,000

0 0 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 HIGHLIGHTS PATAMI TV Households Financial Year Ended 31 January Financial Year Ended 31 January (RM million) (‘000)

700 6,000 615 624 5,121 4,818 600 519 5,000 4,429 500 448 3,884 418 4,000 3,485 400 3,000 300 2,000 200 100 1,000 4. 0 0 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 5. ARPU Share of TV Viewership(1) Financial Year Ended 31 January Financial Year Ended 31 January (RM) (%) 6. 110 100

100.4 76% 77% 99.0 99.3 80 100 96.0 7. 93.2 60 47% 49% 90 43% 40 8. 80 20

70 0

FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 9.

Note: (1) Viewership share is based on DTAM deployed by Kantar Media as of FY17, comparatives in FY16 are updated accordingly 24 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Segmental Analysis and Quarterly Financial Performance

FY17 FY16 RM million % RM million %

Revenue Television 5,022 89% 4,987 91% Radio 328 6% 296 5% Go Shop 261 5% 189 4% Others 2 0% 3 0% 5,613 100% 5,475 100%

PBT Television 702 83% 691 83% Radio 196 23% 170 21% Go Shop (20) (2%) (21) (3%) Others (32) (4%) (11) (1%) 846 100% 829 100%

(RM million) Q1 Q2 Q3 Q4 FY17

Revenue 1,363 1,428 1,424 1,398 5,613 EBITDA 477 426 469 445 1,817 EBIT 282 248 292 273 1,095 PBT 280 169 209 188 846 PAT 201 124 149 143 617 PATAMI 202 126 151 145 624 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 25

Simplified Group Statement of Financial Position

(RM million) FY17 FY16 1.

Assets Property, plant & equipment 1,818 2,129 2. Intangible assets 2,045 2,002 Inventories 20 21 Receivables, deposits & prepayments 1,159 1,195 Deposits, cash & bank balances & unit trusts 647 979 Others 577 575 6,266 6,901

Equity & Liabilities Share capital 6,716 521 Reserves (6,092) 80 Payables & accruals 2,117 2,285 Borrowings 3,406 3,805 HIGHLIGHTS Taxation & deferred tax liabilities 102 154 Others 17 56 6,266 6,901

577 575 Assets 979 647 1,818 2,129 Property, plant & equipment

Intangible assets

Inventories FY17 FY16 Receivables, deposits & prepayments 4. Deposits, cash & bank balances & unit trusts Others

1,159 1,195 5. 2,045 2,002 20 21 6.

17 6,716 56 521 Equity & Liabilities 102 154 80 3,406 Share capital 7. (6,092) Reserves

Payables & accruals 8. FY17 FY16 Borrowings Taxation & deferred tax liabilities

Others 9.

3,805 2,117 2,285 26 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement of Value Added

FY17 FY16 RM million RM million

Value Added

Revenue 5,613 5,475 Operating expenses (2,844) (2,627) Other operating income 53 90 Total value added 2,822 2,938

Reconciliation: PAT 617 608 Add: Depreciation, impairment and amortisation 1,094 1,186 Finance costs 272 346 Government 262 242 Non-controlling interest 7 7 Staff costs 570 549 Total value added (available for distribution) 2,822 2,938

Value Distributed

Employees Staff costs 570 549

Government Tax 229 221 Regulatory 33 21

Providers of capital Dividends 664 650 Finance costs 272 346 Non-controlling interest 7 7

Reinvestment and future growth Depreciation, impairment and amortisation 1,094 1,186 Retained earnings (47) (42) Total distributed 2,822 2,938 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 27

Statement of Value Added 1. Value Added Financial Year Ended 31 January (RM million)

FY17 FY16 2. -3,000 -2,000 -1,000 1,000 2,000 3,000 4,000 5,000 6,000 -3,000 -2,000 -1,000 1,000 2,000 3,000 4,000 5,000 6,000 0 0

5,613 5,475

(2,844) (2,627) 53 90

2,822 2,938 HIGHLIGHTS

Revenue Operating expenses Other operating income Total value added

Value Distributed Financial Year Ended 31 January (RM million) FY17 FY16 -200 0 200 400 600 800 1,000 1,200 -200 0 200 400 600 800 1,000 1,200 4.

570 549

229 221 5.

33 21

664 650 6. 272 346

7 7 7. 1,094 1,186 (47) (42) 8.

Staff costs Tax Regulatory Dividends Finance costs 9. Non-controlling interest Depreciation, impairment and amortisation Retained earnings 28 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Key Milestones

• Through the launch of MEASAT-1, MBNS, one of our wholly-owned subsidiaries, • MBNS was granted a renewable commenced digital DTH 25-year broadcasting license satellite Pay-TV services with for the provision of broadcasting 22 TV and five radio stations services in Malaysia, with • The first Malaysia broadcaster exclusivity on DTH satellite TV to introduce format radio services until 2017 and non- • Surpassed one million programming exclusivity until 2022 residential Pay-TV subscribers

1996 1997 2003

2015 2014

• Ventured into e-commerce with the launch of Go Shop, • Astro’s The Journey set a new box office record for an entertaining shopping destination accessible 24/7 the highest-ever grossing Malaysian movie up to on TV, online and mobile 2015 with box office collections of over RM17 million • Launched Raku, Malaysia’s personalised audio • Entered into a partnership with Azteca, a producer of streaming service by Astro Radio Spanish language programming and Global Station, • Introduced a download feature for Astro GO, enabling a production house in Malaysia for the production downloads of TV shows and movies for offline viewing and distribution of telenovelas to Malaysian, regional • Reached the one-millionth customer milestone for and international audiences NJOI, our subscription-free satellite TV service • Voted the top brand in the Media and Entertainment • Commenced collaboration with Kantar Media to category at the Putra Brand Awards 2014 for the fifth offer advertisers and media buyers in Malaysia better consecutive year insights into the viewing habits of Malaysian Pay-TV • Launched the ‘Same Day’ campaign where Astro’s homes, collating viewing data directly from Astro STBs customers can watch the latest US and UK TV • Voted the ‘Top Media and Entertainment Brand’ at the series on a same day and date basis as its premiere Putra Brand Awards for the sixth consecutive year • Launched the on demand service, which enables broadcast in their countries of origin customers to watch movies and box sets instantly on multiscreens • Premiered Ola Bola and Polis Evo which became two out of the top three highest grossing Malaysian movies of all time ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 29

Key Milestones 1. • Premiered the first 3D broadcast in Malaysia and Southeast Asia for the 2010 FIFA World Cup • Launched the Astro B.yond 2. • Launched the HD-enabled PVR Astro B.yond initiative which • Introduced the innovative Astro comprises hybrid DTH and Tutor TV UPSR examination broadband-enabled STBs and revision channel • Surpassed two million distribution platform • Received the Gold award in residential Pay-TV subscribers • Won the ‘CASBAA Chairman’s the Media and Entertainment • Introduced Astro On Demand, Award’ for our outstanding category at the Putra Brands Malaysia’s first TV Near Video- contribution to the Pay-TV Awards 2010 On-Demand service industry in the region 2007 2009 2010 HIGHLIGHTS

Astro Malaysia Holdings Berhad

2013 2012 2011 4. • Launched Astro GO • Launched NJOI, Malaysia’s first • Introduced Astro B.yond IPTV, International to enable non-subscription based DTH in collaboration with TIME, to Malaysians to watch Astro satellite TV deliver IPTV through TIME’s

TV content on smartphones, • Received the ‘Brand of the Year’ fibre optic broadband network 5. tablets and notebooks and Gold awards at the Media • Launched Astro First, the anywhere in the world and Entertainment category at premier PPV movie service with • Chosen as one of the Putra the Putra Brand Awards 2012 near cinema window offerings Brand Icons and emerged as • Introduced Astro GO, our in Malaysia, made available 6. the top brand in the Media and entertainment service for through our STBs Entertainment category at the smartphones, tablets and PCs, • Surpassed three million Putra Brand Awards 2013 as well as broadband-based residential Pay-TV subscribers 7. • Introduced Astro B.yond VOD • Received the Gold award in IPTV with Maxis, offering the • Listed Astro Malaysia Holdings the Media and Entertainment best of Astro TV, high-speed Berhad on the Main Market of category at the Putra Brands

broadband and home voice Bursa Securities Awards 2011 8. services 9. 30 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Event Highlights

February 2016

• Successfully secured the Premier League broadcast rights in Malaysia for the next three seasons from 2016/17 to 2018/19, bringing all 380 Premier League matches every season live on Astro TV in full HD and on all mobile devices via Astro GO March 2016

• Launched Tribe, an OTT video service for the ASEAN region in partnership with local telecommunications and media companies. Tribe is available in Indonesia through XL Axiata April 2016

• Entered into a Memorandum of Understanding with Globe Telecom • Introduced a new and improved on to offer Tribe in the Philippines. The June 2016 demand experience with the launch agreement also reflects the intent • Awarded scholarships to seven of the recommendation feature for of both parties to collaborate on outstanding Malaysian students better personalisation of the viewing content opportunities across the under the Astro Scholarship experience, and easier access to region Award, as part of our commitment the on demand catalogue • Launched eGG Network, a to education and inspiring young dedicated 24/7 eSports channel people to shape a better future August 2016 available on Astro and Astro GO for themselves, their families, their • Aired comprehensive coverage community and the country May 2016 of Rio 2016 Olympics with 12 dedicated channels in both HD and • Launched TVB’s Jade Pack, July 2016 SD on Astro TV and Astro GO. Astro comprising the latest TVB dramas, • Partnered with Persatuan Arena also delivered 15 hours of infotainment and variety shows, Bulutangkis Seluruh Indonesia live broadcast daily of our national Asian martial arts and all-time to expand Kem Badminton into athletes in both HD and SD during classics Indonesia. Shortlisted participants the Olympics advanced to an intensive training • Celebrated Malaysia’s 59th National session in Kuala Lumpur and Tokyo Day with the NEGARAKU campaign, which showcased more than 60 new premieres, bringing the rich history and multicultural landscape of Malaysia to life ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 31

Event Highlights

November 2016 1.

• Introduced Boo, a 24/7 horror movie channel and the best destination for Asian horror, available on demand 2. on Astro GO and also on Astro Channel 404 in HD December 2016

• eGG Network became the first eSports and gaming entertainment channel to be made available in Australia via Fetch TV, giving Australian eSports fans front row seats to international eSports tournaments • hitz fm unveiled its new line-up HIGHLIGHTS for its morning breakfast crew, September 2016 October 2016 welcoming Jay R Smith to the team and kicking off the new show as the • Astro Kasih announced its • Astro Malaysia and StarHub ‘hitz morning crew with J, Arnold collaboration with FC Barcelona Cable Vision Ltd entered into a and RD’ for its 2016 Astro Kem Bola partnership to offer Go Shop to • Didi & Friends launched its first programme. With the partnership, customers in Singapore. StarHub merchandise store in Metrojaya, 32 young footballers participated customers can enjoy a new way The Curve in the Astro Kem Bola Overseas of shopping via informative and Training Programme in Barcelona, entertaining demonstrations on Go Spain Shop with the launch of the service January 2017 • In conjunction with Hari Malaysia, in November 2016 • Astro Arena and the Badminton th Astro premiered a new documentary, • Celebrated Astro’s 20 anniversary Association of Malaysia (“BAM”) Harimau Malaya 1980, which by offering all customers free entered into a broadcast rights 4. celebrates the golden days of access to Astro Fiesta agreement to bring comprehensive Malaysian football and the legends • In collaboration with PGL, eGG coverage of badminton on Astro of the 1980 Harimau Malaya team. Network successfully organised SuperSport and Astro Arena 5. Harimau Malaya 1980 is the untold Malaysia’s first multilingual eSports channels on Astro TV and Astro story of the 1980 football team and championship, Counter Strike: GO. Under the agreement, BAM their inspiring quest to qualify for Global Offensive (CS:GO) Minor appointed Astro Arena as its

the Moscow 1980 Olympics Championship Asia, with the exclusive broadcast partner in 6. tournament broadcast on OTT Malaysia and Brunei for all BAM platforms globally in six languages, events from November 2016 to attracting 1.5 million unique viewers October 2021 7. 8. 9. 32 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Awards

February 2016 Mob-Ex Awards 2016 • Silver Award » Best App - Media Owner (Dunia Ceria) • Bronze Award » Best App - Games (Dunia Ceria)

March 2016 10th Annual Stevie Awards for Sales & Customer Service • Gold Award » Back-Office Customer Service Team of the Year • Silver Award » e-Commerce Customer Service Award » Innovation in Customer Service

Hong Kong Asian Pop Music Festival (HKAMF) 2016 • Best Vocal Performance Award - Nicole Lai • LeMusic Viewers’ Top Pick - Nicole Lai • The Favourite Team Award - Nicole Lai

6th Global Chinese Golden Chart Awards • MY FM Top Dedicated Song - Wo Zhi De Kuai Le (Nicole Lai)

April 2016 3rd Young Entrepreneurs Association of Malaysia’s (PUMM) Top 50 Enterprise Awards • Honorary Award

Golden Globe Tigers Summit Awards 2016 • Marketing Campaign of the Year Award - Thaipusam 2016 campaign • Award for Social Media in Marketing

2016 Frost & Sullivan Malaysia Excellence Awards • Malaysian Entrepreneurial Company of the Year (Digital Media: Music-on demand category) - RAKU ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 33

Awards 1. APPIES Malaysia Putra Brand Marketing Excellence Marketing Awards Awards 2016 Congress 2016 Gold Award Gold Award 2. Gold Trophy Media Network Digital Marketing Polis Evo category - The House

May 2016 • Wartawan TV - Kamarul Bahrin Haron (Agenda Awani: Diplomasi Rakyat Pak Jokowi) MARKies Awards 2016 (Malaysia) • Komedi TV Terbaik - Mail & Sudin Sambut Ramadan • Best Use of Radio - Petronas (Merdeka Man) • Hiburan Muzika TV Terbaik - International Super Star Grand • Best Idea - Wonda Mulakan Semula Final 2015 • Pengacara TV Terbaik - Kamarul Bahrin Haron (Agenda 2016 Asia-Pacific Stevie Awards Awani: Setahun MH370) HIGHLIGHTS • Silver Stevie • Pelakon Wanita Drama TV Terbaik - Fauziah Dato Ahmad » Innovative Management in Consumer Product & Daud (Harus Terpisah) Service Industries Award - Generation of Gamification: • Pelakon Lelaki Drama TV Terbaik - Nasir Bilal Khan (Harus Future-proofing the Workplace Terpisah) » Innovative Use of Technology in Customer Service - Enterprise Feedback Management: Developing the Malaysian MPI-Petronas Journalism Awards Ecosystem in Delivering Customer Happiness • Consolation Prize • Bronze Stevie » Best Radio Report - THR Raaga News Team (Raaga » Innovation in Customer Service Management, Planning General & Sports News) & Practice Award - Generation of Gamification: Future- » Best Photo Essay - Astro Awani (The greatest gift this proofing the Workplace Father’s Day - An everlasting love and sacrifice) » Customer Experience Management Award - Turning a Corporate Fad into Reality China Meipai Awards Gala 2016 • Best Music Talent Award - Danny Koo 4. APPIES Malaysia Marketing Congress 2016 • Gold Trophy

» Polis Evo August 2016 5.

Anugerah Seri Angkasa 2016 Putra Brand Awards • Promo TV Terbaik - International Superstar 2015 Final • Gold Award

• Montaj TV Terbaik - Battleground Audition 2015 » Media Network category 6. • Rekaan Set TV Terbaik - Anugerah MeleTOP ERA • Putra Malaysian Marketer of the Year • Suntingan Rancangan TV Terbaik - Mail & Sudin Sambut Ramadan The Spark Awards 2016 7. • Audio Rancangan TV Terbaik - Konsert Akademi Fantasia • Gold Award 2015 » Best Media Solution (Radio) - The Merdeka Man • Rancangan Agama TV Terbaik - Pencetus Ummah S2 » Best Media Solution (Integrated Media) • Silver Award

• Bicarawara TV Terbaik - Sembang Teh Tarik 8. • Liputan Berita TV Terbaik - 2000 Prime Talk » Best Programme Promotion - The House • Anugerah Khas Juri - Syawal Tanpa Mu MH17 • Bronze Award • Pengimbangan Muzik TV Terbaik - Anugerah MeleTOP ERA » Best Media Solution (Radio) - Mulakan Semula Karier

• Penataan Cahaya Penerbitan Hiburan TV Terbaik - Zahid Bersama Wonda 9. Anugerah MeleTOP ERA 34 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Awards

September 2016 Malaysian Institute of Accountants 2016 Integrated Reporting Awards Malam Anugerah Festival Filem Malaysia (FFM) ke-28 • Recognition Award for Pioneering Integrated Reporting in • Anugerah Filem Box Office - Polis Evo Malaysia - 2016 Annual Report • Sinematografi Terbaik - Harris Hue Abdullah (Polis Evo) • Anugerah Khas Juri 1 - Ola Bola • Anugerah Khas Juri 2 - Polis Evo November 2016 • Pelakon Pembantu Wanita Terbaik - Fauziah Dato’ Ahmad Daud (Langit Cinta) Malaysia’s 100 Leading Graduate Employer Awards • Most Popular Graduate Employer Brand in • Pelakon Pembantu Lelaki Terbaik - Hushairi Husain Broadcasting/Media (Polis Evo) • Top 10 of Leading Graduate Employer Brands • Penataan Seni Terbaik - Wong Jee Meng & Nick Wong (Huat The Fish) • Kesan Visual Khas Terbaik- Yusry Abdul Halim WAN-IFRA (World Association of Newspapers and (Cicak Man 3) News Publishers) Asian Digital Media Awards 2016 • Gold Award • Pereka Kostum/Busana Terbaik - Elaine Ng & Weng Shum » Best Lifestyle Website - Obviously Harith Iskander (Ola Bola) » Best Digital Advertising Campaign - Obviously Harith • Skor Music Asal Terbaik - Ong San & Alex San (Ola Bola) Iskander • Lagu Tema Asal Terbaik - Zee Avi & Rendra Zawawi (Arena Cahaya: Ola Bola) 2016 11th Annual Contact Center World Top Ranking AIM Chinese 2016 Music Awards Performers Awards • Best New Artiste • Best Contact Center Large (in-house) - Gold Medal » Gold - Geraldine Gan » Silver - Nicole Lai MPA Magazine Awards 2016 • Best Dialect Song - ‘Ah Gong Eh Ka Ta Chia’ (Freddie Ng) • Gold Award • Best Young Talent’s Album - Astro Xiao Tai Yang’s ‘Tong » Editorial Awards - InTrend and CAR Tong’s Wonderland I’ (Danny Koo, Stephanie Liew & » Front Cover Awards - FourFourTwo, Style, ifeel, Men’s Uno Melissa Ong) • Silver Award • Best Mini Album - The Journey (Geraldine Gan) » Editorial Awards - CAR • Honor’s Most Popular Online Voting Artiste - Nicole Lai » Front Cover Awards - FourFourTwo, ifeel, FHM, • Best Drama/Movie Theme Song - ‘Yi Bu Ju Li’, Men’s Uno, Astroview Traveller The Journey (Geraldine Gan) • Bronze Award • Best Chinese New Year Album - MY Astro ‘Ho Yeah’ 2016 » Front Cover Awards - Style, ifeel, Men’s Uno, CAR Chinese New Year Album 15th Asia Business Leaders Awards October 2016 • Asia Talent Management Award - GCEO Dato’ Rohana Rozhan

2016 PMAA Dragons of Asia 53rd Golden Horse Awards • Best Entertainment • Best Original Film Song - Arena Cahaya: Ola Bola (Zee Avi & » Gold - Polis Evo Marketing Campaign Rendra Zawawi)

Marketing Excellence Awards 2016 December 2016 • Gold Award st » Digital Marketing - The House 21 Asian Television Awards • Silver Award • Best Single Drama or Telemovie - Tulus Ikhlas » Brand Awareness - The House » Performance Marketing - Astro GO MSWG Malaysia-ASEAN CG Awards 2016 • CEO of the Year - Dato’ Rohana Rozhan ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 35

Financial Calendar 1. 2.

31 May 2016 6 January 2017

• Announcement of the unaudited results for the first • Payment date for the third interim single-tier dividend of quarter ended 30 April 2016 3 sen per ordinary share for FY17 • Announcement of the first interim single-tier dividend of 3 sen per ordinary share in respect of FY17

28 March 2017

30 June 2016 • Announcement of the unaudited results for the fourth HIGHLIGHTS quarter ended 31 January 2017 • Payment date for the first interim single-tier dividend of • Announcement of the fourth interim single-tier dividend 3 sen per ordinary share for FY17 of 3 sen per ordinary share and a proposed final single- tier dividend of 0.5 sen per ordinary share in respect of FY17

14 September 2016 • Announcement of the unaudited results for the second 27 April 2017 quarter ended 31 July 2016 • Announcement of the second interim single-tier • Payment date for the fourth interim single-tier dividend dividend of 3 sen per ordinary share in respect of FY17 of 3 sen per ordinary share for FY17 4.

13 October 2016 17 May 2017 5.

• Payment date for the second interim single-tier • Notice of Fifth Annual General Meeting and the issuance dividend of 3 sen per ordinary share for FY17 of Annual Report and Circular to Shareholders 6.

7 December 2016 15 June 2017 7.

• Announcement of the unaudited results for the third • Fifth Annual General Meeting quarter ended 31 October 2016 8. • Announcement of the third interim single-tier dividend of 3 sen per ordinary share in respect of FY17 14 July 2017 9. • Proposed payment date for the final dividend of 0.5 sen per ordinary share for FY17 36 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Investor Relations

Price Volume (RM) (million)

3.5 12

3 10

2.5 8

2

6

1.5

4 1

2 0.5

0 0 February March April May June July August September October November December January 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2017

Price Share value with dividends reinvested Volume

Our Charter

As we pursue a strategy of growth, transformation and innovation, coupled with a focus on leveraging off scale and invested infrastructure, Astro is committed to delivering long-term shareholder value. Since our IPO in October 2012, we have consistently declared quarterly interim dividends, along with a final dividend at the end of the financial year, in line with our dividend policy of achieving a payout of at least 75% of profits to our shareholders.

Share Price Performance

Despite macro uncertainties and consumer sentiment fluctuations, Astro’s shareholder returns have continuously outperformed our market benchmark. In comparison to the FTSE Bursa Malaysia KLCI Index, which grew 4.3% in FY17, our shares generated a return of 5.2% with quarterly dividends reinvested.

Dividends

For FY17, we declared four quarterly dividends of 3 sen per share and a final dividend, subject to shareholder approval, of 0.5 sen per share. This equates to a total dividend payment of 12.5 sen per share for FY17, which translates to a dividend yield of 4.5%. Our ability to reward shareholders comes on the back of us being a highly cash generative business, with FCF being 211% of PATAMI, and total dividend payout of 104% and 49% of PATAMI and FCF respectively. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 37

Investor Relations

FY14 FY15 FY16 FY17 1. Total dividend per share (RM per share) 0.09 0.11 0.12 0.125

Total dividend payout (RM mil) 468 572 624 651 2. Dividend payout as % of PATAMI 104% 110% 101% 104% EPS (sen) 8.6 10.0 11.8 12.0

Dividends are paid within 30 days from the date of declaration for interim dividends and date of shareholders’ approval for final dividends, as shown in the table below.

Declaration Date Entitlement Date Payment Date Q1 31 May 2016 16 June 2016 30 June 2016 Q2 14 September 2016 30 September 2016 13 October 2016

Q3 7 December 2016 23 December 2016 6 January 2017 HIGHLIGHTS Q4 28 March 2017 12 April 2017 27 April 2017

Financial Announcements

Each quarter, we share our financial results with the public through announcements to Bursa Securities, including detailed financial statements, key financial and operational indicators and analysis of performance. Press releases are also issued to relay relevant achievements and updates. Additionally, we host a quarterly conference call to present our results and facilitate a Q&A session, chaired by our GCEO and attended by our senior leadership. These platforms are important to us, as we strive towards providing the investment and media community with a comprehensive view of our Group’s performance, opportunities, challenges and strategies moving forward. 4. Analyst & Investor Engagement

Our stock is actively covered by 24 research houses, and the Investor Relations team engages frequently with research analysts, fund managers and the wider investment community. We count among our investors a wide range of reputable 5. institutional funds, both local and international.

Over the past year, the Investor Relations team conducted over 150 one-on-one and group meetings/teleconference calls. 6. In FY17, our senior leadership also participated in Invest Malaysia Kuala Lumpur and Credit Suisse AIC Hong Kong 2016, in addition to non-deal roadshows across the globe.

To ensure that we communicate effectively with all shareholders, we continuously update our corporate portal which details 7. our company’s stock, financial and other investor-related disclosures. Our quarterly results and Annual Reports are made available on our corporate portal at corporate.astro.com.my. Press conferences are also held regularly to further address any media queries and to reinforce our commitment to transparency. 8.

Our Investor Relations team can be contacted directly with queries via [email protected], and welcomes feedback from the investment community. 9. 38 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Corporate Information

BOARD OF DIRECTORS

Tun Dato’ Seri Zaki Bin Tun Azmi Datuk Chin Kwai Yoong Quah Bee Fong Independent Independent Non-Executive Director/ Non-Independent Non-Executive Chairman Senior Independent Director Non-Executive Director

Augustus Ralph Marshall Datuk Yvonne Chia Lim Ghee Keong Non-Independent Independent Non-Executive Director Non-Independent Non-Executive Deputy Chairman Non-Executive Director Richard John Freudenstein Dato’ Rohana Binti Independent Non-Executive Director Bernard Anthony Cragg Tan Sri Datuk Haji Rozhan Non-Independent Executive Director/ Dato’ Mohamed Khadar Bin Merican Non-Executive Director Group Chief Executive Officer Non-Independent (Resigned on 31 March 2017) Non-Executive Director ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 39

Corporate Information 1. 2. COMPANY SECRETARY STOCK EXCHANGE LISTING Liew Wei Yee Sharon (LS7908) Main Market of Bursa Malaysia Securities Berhad Listed since 19 October 2012 REGISTERED OFFICE Stock Code : 6399 rd 3 Floor, Administration Building Sector : Trading & Services All Asia Broadcast Centre Technology Park Malaysia Lebuhraya Puchong-Sungai Besi PRINCIPAL BANKERS Bukit Jalil

57000 Kuala Lumpur CIMB Bank Berhad HIGHLIGHTS 20th Floor, Menara CIMB Telephone No. : +60(3) 9543 6688 Jalan Stesen Sentral 2 Fax No. : +60(3) 9543 3007 Kuala Lumpur Sentral Website : corporate.astro.com.my 50470 Kuala Lumpur

Telephone No. : +60(3) 2261 8888 SHARE REGISTRAR Citibank Berhad Symphony Share Registrars Sdn Bhd Level 45, Menara Citibank Level 6, Symphony House 165 Jalan Ampang Block D13, Pusat Dagangan Dana 1 50450 Kuala Lumpur Jalan PJU 1A/46 47301 Petaling Jaya, Selangor Telephone No. : +60(3) 2383 8585 4. Telephone No. : +60(3) 7841 8000 Malayan Banking Berhad Helpdesk No. : +60(3) 7849 0777 32nd Floor, Menara Maybank Fax No. : +60(3) 7841 8151/ 100 Jalan Tun Perak 5. +60(3) 7841 8152 50050 Kuala Lumpur

Telephone No. : +60(3) 2070 8833

AUDITORS AND REPORTING 6. ACCOUNTANTS RHB Bank Berhad Level 7, Tower Three PricewaterhouseCoopers RHB Centre

Level 10, 1 Sentral Jalan Tun Razak 7. Jalan Rakyat 50450 Kuala Lumpur Kuala Lumpur Sentral 50706 Kuala Lumpur Telephone No. : +60(3) 9287 8888 8.

Telephone No. : +60(3) 2173 1188 Fax No. : +60(3) 2173 1288 9. 40 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Board of Directors ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 41

Board of Directors 1. 2. 3. LEADERSHIP 5. 6. 7. 8.

From left to right

Augustus Ralph Marshall | Datuk Chin Kwai Yoong | Lim Ghee Keong | Datuk Yvonne Chia | Tun Dato’ Seri Zaki Bin Tun Azmi | Bernard Anthony Cragg |

Quah Bee Fong | Dato’ Mohamed Khadar Bin Merican | Richard John Freudenstein | Dato’ Rohana Rozhan 9. 42 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Board of Directors’ Profiles

Tun Dato’ Seri Zaki Augustus Ralph Marshall Dato’ Rohana Rozhan Bin Tun Azmi Malaysian, 71, Male Malaysian, 65, Male Malaysian, 54, Female

Independent Non-Executive Chairman Non-Independent Non-Executive Deputy Executive Director & Group Chief Executive Chairman Officer First appointment as Independent Non-Executive Chairman: 15 August 2012 First appointment as Executive Deputy First appointment as Executive Director: Chairman: 21 March 2011 21 March 2011 Chairman of Nomination & Corporate Governance Committee Re-designation as Non-Independent Non- Appointment as Chief Executive Officer: Executive Deputy Chairman: 18 September 2012 1 April 2011

Re-designation as Group Chief Executive Tun Zaki holds a Barrister-at-Law Officer:1 April 2016 qualification from the Lincoln’s Inn, Ralph Marshall has more than 30 UK. years of experience in financial and general management. He is He joined the Malaysian Judicial and an Independent Non-Executive Dato’ Rohana Rozhan, a pioneer Legal Services as a Magistrate and Director and also Chairman of the member of the Astro Group, is was later transferred to the Attorney audit committee of KLCC Property also the Chief Executive Officer of General’s Chambers where he held Holdings Berhad (listed on the Bursa MEASAT Broadcast Network Systems several positions for 15 years before Securities) and an Independent Non- Sdn Bhd, a wholly-owned subsidiary going into private legal practice. He Executive Director of KLCC REIT of the Company. was appointed as a Judge of the Management Sdn Bhd (the Manager Federal Court of Malaysia in 2007 of KLCC Real Estate Investment A principal architect of the and shortly thereafter, became the Trust). He also serves as a Non- Company’s growth strategies that are President of Court of Appeal of Executive Director of Johnston Press delivering sustainable returns for its Malaysia, the second highest judicial plc (listed on the London Stock shareholders, she continues to lead office in the country. In October 2008, Exchange plc). the Company through a multitude of he was appointed as the 12th Chief industry breakthroughs and firsts. Justice of Malaysia. He also holds He is an Associate of the Institute of the distinction of being appointed Chartered Accountants in England In recognition of her vision, as the first chairman of the Judicial and Wales and a Member of the entrepreneurism, dynamism and Appointment Commission until Malaysian Institute of Certified Public efforts in encouraging corporate his retirement as Chief Justice in Accountants. governance practices, she was September 2011. named the CEO of the Year 2016 by the Minority Shareholder Watchdog He is the Chairman of the board of Group (MSWG) at the MSWG University Malaysia Sabah and the Malaysia-ASEAN CG Awards. Chancellor of Multimedia University and MAHSA University. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 43

Board of Directors’ Profiles 1. Dato’ Rohana Rozhan Datuk Chin Kwai Yoong Datuk Yvonne Chia

Malaysian, 68, Male Malaysian, 64, Female 2.

On the global front, she has earned Senior Independent Director Independent Non-Executive Director recognition for management and leadership including in championing First appointment as Independent Non- First appointment as Independent Non- 3. complementarity and diversity, Executive Director: 21 March 2011 Executive Director: 1 January 2014 as well as community and talent development. For CSR, she was Re-designation as Senior Independent Chairman of Remuneration Committee granted the Silver Stevie Award for Director: 15 August 2012 2013, and CNBC’s Asia Business Member of Audit Committee Awards 2015. Variety Magazine, Los Chairman of Audit Committee Angeles honoured her as a Woman Member of Nomination & Corporate of Impact 2014, while CNN featured Member of Nomination & Corporate Governance Committee her as a Leading Woman in 2016. She Governance Committee is the recipient of the Toastmasters Golden Gavel 2014 Award and, Datuk Yvonne Chia is a Fellow in 2016, CNBC recognised her as Datuk Chin Kwai Yoong is a Fellow of Chartered Banker and holds a Asia’s Business Leader for Talent the Institute of Chartered Accountants Bachelor of Economics (Honours) LEADERSHIP Management. in England and Wales and a Member from University of Malaya. of the Malaysian Institute of Certified She holds a Bachelor of Arts (Hons) Public Accountants as well as the She has more than 30 years of degree in Accounting and Economics Malaysian Institute of Accountants. experience in the financial services from University of Kent, Canterbury, industry, having held leading UK. She is a Fellow of the Chartered He was an audit partner with positions in both foreign and local Institute of Management Accountants, PricewaterhouseCoopers from 1982 institutions. She started her career UK, a Member of the Malaysian until his retirement in 2003. During his in Bank of America and held various Institute of Accountants and a tenure as partner, he was an Executive roles in Asia. She was the former member of World Economic Forum Director in charge of the Consumer & Group Managing Director and Chief since 2015. She has also completed Industrial Products & Services Group. Executive of RHB Bank Berhad (1996- the Advanced Management Program He also served as Director of the 2002) and Hong Leong Bank Berhad at Harvard Business School, USA. Audit and Business Advisory Services (2003-2013). Previously, she was attached to Division, and of the Management 5. the Unilever group of companies Consulting Services Division. She is the Independent Non- from 1985 to 1995, both in UK and Executive Chairman of Standard

Malaysia, where she held various He has extensive experience in the Chartered Bank Malaysia Berhad 6. management positions. audits of major companies in the and Standard Chartered Saadiq banking, oil & gas and automobile Berhad and is also an Independent industries as well as in the heavy Non-Executive Director of Hengyuan equipment, manufacturing, Refining Company Berhad and 7. construction and property Silverlake Axis Limited (listed on the development sectors. He was also Singapore Exchange Ltd). involved in corporate advisory services 8. covering investigations, mergers & She is also a Council Member of acquisitions and share valuations. Asian Institute of Chartered Bankers and a Board of Trustee for Teach He is an Independent Non-Executive For Malaysia Foundation, and an 9. Director of Deleum Berhad and Honorary Professor of University of Genting Berhad (both listed on the Nottingham School of Economics. Bursa Securities), and also a Director of Bank Negara Malaysia. 44 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Board of Directors’ Profiles

Richard John Freudenstein Bernard Anthony Cragg Dato’ Mohamed Khadar Bin Merican Australian, 52, Male British, 62, Male Malaysian, 61, Male

Independent Non-Executive Director Non-Independent Non-Executive Director Non-Independent Non-Executive Director

First appointment as Independent Non- First appointment as Independent Non- First appointment as Independent Non- Executive Director: 30 September 2016 Executive Director: 21 March 2011 Executive Director: 21 March 2011

Member of Audit Committee Re-designation as Non-Independent Non- Re-designation as Non-Independent Non- Executive Director: 1 June 2016 Executive Director: 15 August 2012 Member of Remuneration Committee Member of Remuneration Committee Resigned as a Director and Member of the Audit Committee: 31 March 2017 Richard Freudenstein holds a Bachelor of Economics and a Dato’ Khadar Merican is a Member of Bachelor of Laws (Honours) from Bernard Cragg holds a degree the Institute of Chartered Accountants University of Sydney. in Mathematics from Liverpool in England and Wales as well as the University. He is a Chartered Malaysian Institute of Accountants. He is a media executive with Accountant and had spent over 8 extensive experience in the Australian years in PricewaterhouseCoopers. He has more than 30 years of and international markets. He was experience in financial and general the Chief Executive Officer of Foxtel He is the Chairman of GlobalData management and had served as (2011-2016) and prior to that, he was plc (listed on the London Stock an auditor and a consultant in an the Chief Executive Officer of News Exchange plc). He formerly held international accounting firm before Digital Media (the digital division of various senior management positions joining a financial services group in News Limited) and The Australian in Carlton Communication plc (listed 1986. He had held various senior newspaper. He returned to Australia on the London Stock Exchange plc) management positions in Tradewinds in August 2006 after seven years at for over 17 years including as its Corporation Bhd (then listed on the British Sky Broadcasting Limited, the Group Financial Controller, Company Bursa Securities) between 1988 and last six as Chief Operating Officer. Secretary and Group Finance Director. 2003, including as President and He has served as Chairman of Chief Operating Officer. He is a Non-Executive Director of REA Datamonitor plc and i-mate plc (both Group Ltd (listed on the Australian listed on the London Stock Exchange He is a Director of AirAsia Berhad Securities Exchange Ltd) and formerly plc) and was previously a Director of and Sona Petroleum Berhad (in a Director of Ten Network Holdings Alternative Networks plc, Workspace liquidation), both listed on the Ltd, one of the Australia’s leading Group plc, Mothercare plc, Arcadia Bursa Securities. He was named television companies, amongst Group plc and Bristol & West plc, “Chairman of the Year” by the others. a part of the Bank of Ireland (UK) Minority Shareholder Watchdog Financial Services. Group (MSWG) at the MSWG Annual Corporate Governance Index and Award 2013. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 45

Board of Directors’ Profiles 1. Quah Bee Fong Lim Ghee Keong

Malaysian, 46, Female Malaysian, 49, Male 2.

Non-Independent Non-Executive Director Non-Independent Non-Executive Director

First appointment as Non-Independent Non- First appointment as Alternate Director to 3. Executive Director: 24 April 2015 Augustus Ralph Marshall: 21 March 2011

Appointment as Non-Independent Non- Executive Director: 30 September 2016 Quah Bee Fong holds a Bachelor of Commerce (Honours) degree, majoring in Management Economics and Finance from the University of Lim Ghee Keong holds a Bachelor Guelph, Ontario, Canada. She has of Business Administration degree, more than 20 years of experience in majoring in Finance, from the equity research and investments. University of Hawaii at Manoa, USA.

Prior to joining Khazanah Nasional He has more than 20 years of LEADERSHIP Berhad (“Khazanah”) in 2005, she experience in treasury and credit was attached with various investment management. Prior to joining the banks and stockbroking companies in Usaha Tegas Sdn Bhd (“UTSB”) Group Malaysia and the region. in 1995, he was attached to General Electric Capital Corporation in the USA She is currently a Director in the and Ban Hin Lee Bank in Malaysia. Investments Division of Khazanah. She also sits on the boards of various He is a Director and Chief Operating creative and media companies within Officer of UTSB, and he serves on the Khazanah’s portfolio companies. boards of several other companies in which UTSB Group has interests, such as Maxis Berhad (listed on the Bursa Securities), Tanjong Public Limited Company and Bond Pricing Agency 5. Malaysia Sdn Bhd, a bond pricing agency registered with the Securities Commission Malaysia. He is also a

Director of Paxys Inc (listed on the 6. Philippines Stock Exchange) and Yu Cai Foundation. 7. 8.

Notes:

1. None of the Directors have any conflict of interest with the Company 9. 2. None of the Directors have any convictions for offences within the past 5 years 3. None of the Directors have any public sanctions and/or penalties imposed on them by the relevant regulatory bodies during FY17 4. None of the Directors have any family relationship with any Directors and/or Major Shareholders of the Company 46 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Senior Leadership

Front row, from left to right Dato’ Rohana Rozhan Iskandar Samad Henry Tan Poh Hock Liew Swee Lin Executive Director & Chief Executive Officer, Chief Operating Officer Chief Commercial Officer Group Chief Executive Officer Tribe

Back row, from left to right Phuah Aik Chong Rohaizad Mohamed Datuk David Michael Yap Faizal Mansor Chief Technology Officer Senior Vice President, Vice President, Chief Executive Officer, Broadcast & Operations Community Affairs Astro Productions

ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 47 1. 2. 3. LEADERSHIP 5. 6. 7. 8. 9. 48 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Senior Leadership’s Profiles

Dato’ Rohana Rozhan Henry Tan Poh Hock Liew Swee Lin

Executive Director & Chief Operating Officer Chief Commercial Officer Group Chief Executive Officer Malaysian, age 53, Male, Malaysian, age 48, Female, Please refer to her profile in the Board Henry joined our Group on Swee Lin joined our Group on of Directors’ profile section on pages 2 May 2008 as Chief Operating 16 November 2010 as Chief 42 to 43. Officer. Commercial Officer.

He is responsible for the creation She is responsible for driving and aggregation of all content and Astro’s market expansion and marketing, branding and airtime delivering profitable growth. She sales strategy, across all distribution oversees product management, channels including TV, radio, digital, segment marketing, sales, customer publications and film. He is also the experience, operations and supply Chairman of Go Shop. chain as well as leads Astro’s e-commerce ventures. She is also a He has more than 26 years of Director of Go Shop. experience in the media industry and prior to joining Astro, he worked at She has diverse experience in media the WPP Group as Chief Executive and financial services in the fields of Officer, Group M (Malaysia and retail banking, fast moving consumer Singapore) from 2006 to 2008, and goods and insurance across the Asia prior to that as Chief Executive Officer Pacific. Prior to joining Astro, she of Mindshare Malaysia from 2000 was the EVP - Consumer Banking to 2006. His previous experience at Alliance Bank Malaysia Bhd and in media includes a role as General was an Executive Director of Alliance Manager at HVD Entertainment, Islamic Bank Bhd. She has also a Malaysian television production held senior leadership positions company from 1996 to 2000, and at Standard Chartered Bank and prior to that at Ogilvy & Mather from OgilvyOne Worldwide, a WPP Group 1988 to 1996 where his last position company. was Media Director. From 1986 to 1988, he worked at Hewlett-Packard She received a Masters in Science Australia and Pan Global Wang in International Marketing from Computers. University of Strathclyde, UK and is an accredited Certified Financial He holds degrees in Business Planner (CFP, US). She is also a (Marketing) and Arts certified Member of the Financial (Communications) from Chisholm Planning Association of Malaysia. Institute of Technology Australia (now known as Monash University). ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 49

Senior Leadership’s Profiles 1. Shafiq Abdul Jabbar Raymond Tan Wei Ming Phuah Aik Chong

Group Chief Financial Officer Chief Investment Officer Chief Technology Officer 2. Malaysian, age 39, Male, Malaysian, age 44, Male, Malaysian, age 45, Male, Shafiq joined our Group on Raymond joined our Group on Aik Chong joined our Group on 9 January 2017 as Group Chief 11 June 2012 and was appointed 1 July 1995 and was appointed Financial Officer. Chief Investment Officer on Chief Technology Officer on 3. 1 February 2013. 1 July 2015. He oversees the finance function across our Group encompassing He is responsible for Astro’s capital He is responsible for our Group’s financial control, process, risk and investment management. In products and technology portfolios, assurance, treasury, business partner particular, he oversees all corporate overseeing the development of advisory, investor relations and tax. finance and business development products and services for homes and activities, portfolio management, individuals, as well as all technology Prior to joining Astro, he was the group strategy, as well as strategic areas required for delivery through Chief Financial Officer (Malaysia) contracts and procurement. satellite, fibre to the home, broadband of CIMB, a position he held since 1 and mobile, data and analytics January 2012. Before joining CIMB, He has more than 20 years of platform, enterprise IT and security.

he was an Executive Director at experience in the fields of investment He is also focused on driving Astro’s LEADERSHIP PricewaterhouseCoopers, a role banking, private equity, accounting, digital transformation into a cloud- he held having advanced from treasury and audit. Prior to joining first, mobile-first, and analytics-driven managerial positions in its Kuala Astro, he was a Director of Credit technology organisation. Lumpur and London offices, where Suisse London in the Telecom, Media he provided assurance and advisory and Technology investment banking He received a Masters in Business services to key clients on Bursa division. Before joining Credit Suisse, Administration from the University of Malaysia and FTSE 100. he worked for Barclays Capital, Chicago - Booth School of Business, Macquarie Bank, FH Faulding and USA, and holds a Bachelor in He holds a Bachelor of Commerce, Deloitte. Electronic and Computer Engineering majoring in Accounting and Finance (Hons) from Universiti Pertanian from the University of Melbourne, He received a Masters in Business Malaysia. Australia and was appointed the Administration from the London Malaysian Chair of Chartered Business School, UK, and holds a

Accountants Australia and New Bachelor of Commerce, majoring in 5. Zealand in February 2017. Accounting and Finance from the University of Adelaide, Australia. He is also a member of Chartered Accountants Australia and New 6. Zealand, and a Fellow of the Financial Services Institute of Australasia. 7. 8. 9. 50 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Senior Leadership’s Profiles

Grace Lee Hwee Ling Iskandar Samad Datuk Jake Abdullah

Chief Executive Officer, Chief Executive Officer, Chief Executive Officer, Go Shop Tribe Astro Radio

Malaysian, age 41, Female, Malaysian, age 36, Male, Malaysian, age 51, Male, Grace joined our Group on Iskandar joined our Group on Jake joined our Group on 2 January 2001 and was appointed 2 November 2015 and was 1 April 1996 and was appointed Chief Executive Officer of Go Shop appointed Chief Executive Officer Chief Executive Officer of Astro on 1 October 2016. of Tribe on 1 May 2016. Radio on 19 December 2013.

She is responsible for driving Go He is responsible for Tribe, our He is responsible for overseeing Shop’s growth in Malaysia and Group’s regional online video Astro Radio’s strategic direction, in Singapore, customer experience, streaming business that currently particular brands and talent, as well broadcasting, sales, marketing, operates in Indonesia and the as driving radex growth. operations, supply chain management Philippines. In addition, Iskandar and technology. She also works also heads Raku, a digital brand that He was briefly seconded to 1M4U regularly with industry stakeholders operates an online radio and music under the Prime Minister’s Office, to build and grow the company’s streaming service in Malaysia. where he established the volunteer brand and services. Prior to organisation and spearheaded its joining Astro, she worked for Prior to joining Astro, he was Head numerous activities. He also led the PricewaterhouseCoopers’ Assurance of Special Projects at Axiata Group setting up of four Astro affiliated radio and Advisory division. Berhad. He started his career with stations, two in India (Aamar FM and McKinsey & Company, where he Power FM) and two in Jakarta (Gen She received a Masters in Business served clients in areas of strategy, FM and Jak FM). Administration with Distinction from finance, M&A, marketing, and Charles Sturt University, Australia, operations over a range of industries, He has attended the Harvard and holds a degree in Accounting including telecommunications and Business School ASEAN Senior and Finance from Curtin University, media. Managers Programme. Australia. She is an Australian Fellow of Certified Practising Accountant He received a Doctorate in (FCPA Aust.), an International Certified Engineering from the University of Professional Accountant (ICPA), a Cambridge, UK and holds a First Certified Information Systems Auditor Class degree in Electrical Engineering (CISA, US) and is Certified in the & Information Sciences from the same Governance of Enterprise IT (CGEIT, university. US). ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 51

Senior Leadership’s Profiles 1. Faizal Mansor Rohaizad Mohamed Rekha Mahendran

Chief Executive Officer, Senior Vice President, General Counsel &

Astro Productions Broadcast & Operations Senior Vice President, Human Capital 2.

Malaysian, age 47, Male, Malaysian, age 55, Male, Malaysian, age 49, Female, Faizal joined our Group on Rohaizad joined our Group on Rekha joined our Group on 31 July 2015 as Chief Executive 1 March 1996 and was appointed 16 February 2015 and was 3. Officer of Astro Productions. Senior Vice President, Broadcast & appointed General Counsel & Operations on 1 April 2009. Senior Vice President, Human He is responsible for driving Astro Capital on 6 March 2017. Production’s growth and overseeing He is responsible for ensuring its strategic direction, in particular operational excellence of our She is responsible for our Group’s operational excellence and Group’s broadcast operations and legal and compliance matters, efficiencies, business development, engineering, IT operations, property focusing on Content, Technology & marketing and regulatory matters. and space management, and content Operations, Corporate and Strategic compliance. Initiatives. She is also responsible for Prior to joining Astro, he was the our Group’s Human Capital function. Chief Financial Officer of Malaysia He has 30 years of experience

Airports Holdings Berhad. He in broadcast operations and Prior to joining Astro, she worked LEADERSHIP started his career with the Securities engineering. Prior to joining Astro, for Discovery Communications in Commission Malaysia and has had he worked for Media Prima Berhad London, where she held the post extensive experience in treasury, from 1986 to 1996 under its TV3 of Regional Counsel for their UK & corporate finance and investment broadcasting operations where EMEA business, as well as serving banking initially with the Bank of his last position was as Head of in their Singapore office covering the Tokyo - Mitsubishi and subsequently Broadcast Maintenance and IT Asia-Pacific region. with the AmBank Group. Operations. She is a qualified lawyer from the He received a Masters in Business He holds a Diploma in Electronics University of London and obtained the Administration from Ohio University, Engineering from University of professional qualification of Barrister- USA, and holds a Bachelor of Science Technology MARA, Malaysia. in-Law from Gray’s Inn (UK). in Accounting from Rutgers University, USA, as well as a Diploma in Aviation from IATA. He is also Fellow Member 5. of the Chartered Accountants Australia and New Zealand. 6. 7. 8. 9. 52 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Senior Leadership’s Profiles

Datuk David Michael Yap Laila Saat Tammy Toh Seok Kheng

Vice President, Vice President, Vice President, Community Affairs Regulatory & Industry Affairs Group Communications

Malaysian, age 54, Male, Malaysian, age 48, Female, Malaysian, age 49, Female, David joined our Group on Laila joined our Group on Tammy joined our Group on 1 November 1997 and was appointed 3 May 2005 and was appointed Vice 3 September 2007 as Vice Vice President, Community Affairs on President, Regulatory & Industry President, Group Communications. 1 February 2007. Affairs on 1 April 2009. She is responsible for reinforcing He is responsible for our Group’s She is responsible for providing our Group’s market leadership via corporate responsibility and specialist advice on the Malaysian 360o communications and oversees stakeholder management initiatives. regulatory framework and facilitating a corporate, brand and marketing He also led the incorporation of conducive regulatory environment for communications, media, stakeholder the Astro Kasih Foundation which the execution of our Group’s strategic and issues management, as well as promotes education, community imperatives. Working alongside the event management activities. advancement, sports development and relevant authorities and stakeholders, environmental awareness, particularly she also leads our Group’s intellectual She has extensive experience in in underserved communities across property protection activities. strategic communications, having Malaysia. worked in senior positions in various Prior to joining Astro, she worked industries including Royal Selangor He has over 25 years of experience in for Flagship Marketing, Amona Pewter, Gamuda Berhad and Alliance corporate sustainability, government and UEM Holdings Bhd, and has Financial Group. relations, corporate communications 23 years of local and international and advertising. Prior to joining experience in strategic and marketing She holds a Bachelor of Arts (Hons) Astro, he worked for PETRONAS and communications. in English Literature from University was involved in international brand of Malaya, and is a member of the management. She received a Masters of Science International Association of Business in Corporate Communications from Communicators (IABC). He holds a Bachelor of Arts (Hons) in University Putra Malaysia, and holds Geography from University of Malaya, a Bachelor of Education in TESL from and is a Fellow of the Institute of University of Malaya. Marketing Malaysia.

Notes:

1. None of the members of the senior leadership have any conflict of interest with the Company 2. None of the members of the senior leadership have any convictions for offences within the past 5 years 3. None of the members of the senior leadership have any public sanctions and/or penalties imposed on them by the relevant regulatory bodies during FY17 4. None of the members of the senior leadership have any family relationship with any Directors and/or Major Shareholders of the Company ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 53

Statement on Corporate Governance

Our Board recognises that corporate governance is essential for our Group’s 1. sustainable long-term performance, value creation for shareholders and safeguarding/promoting the interests of each and every stakeholder. 2.

As we continue to look beyond our own shores and aspire to become ASEAN’s top media brand, we are guided by international best practices to the extent practicable, apart from the key legislations and guidelines which are binding on Astro as a public 3. company listed on Bursa Malaysia, including the Act, MMLR and CG Code.

Our Board is pleased that Astro continues to be part of the FTSE4Good Bursa Malaysia Index, which sets high standards for companies with environmental, social and governance practices since our admission in year 2015. Last year, we were ranked 8th for overall CG and Performance and ranked 15th for Good Disclosures in the MSWG-Asean Corporate Governance Survey 2016, 4. among 868 listed.

Our Board has reviewed and approved this statement on 28 March 2017, and is pleased to inform that we are in compliance with the principles and recommendations outlined in the CG Code.

Summary of Key Activities of the Board During FY17

During the FY17, the following key matters were reviewed under the leadership of our Board:

(a) Our Board is responsible for defining the overall strategic direction of the business together with our GCEO and for driving our Group’s vision, mission and goals. In December 2016, we reviewed the strategies for the next 5 years from FY18 - FY22 CORPORATE GOVERNANCE and the FY18 annual budget. Astro continues to execute against its strategic imperatives to deliver long-term shareholder returns and a progressive dividend policy. Recognising that digitalisation has brought about unprecedented democratisation of consumer choice, our core strategies include delivery of premium and differentiated content as well as a diverse range of products and services to consumers of all ethnicities transcending borders. We continue to evolve our consumer and content strategies to stay ahead of our competitors as well as winning over the millennials and ideating digital content.

(b) We re-assessed our technology strategies and digitalisation aspiration across platforms, products and services, as well as in building up analytics capabilities and customer intelligence, to better serve connected and mobile customers to meet the evolving customer trends and preferences, both for traditional linear TV and in the digital space. In the early months of FY17, we launched Tribe for customers of XL Axiata, one of the leading telcos in Indonesia, leveraging on our infrastructure, content capabilities and operational experience; and subsequently in December 2016, Tribe was launched in partnership with Globe Telecom in the Philippines.

(c) On a quarterly basis, we reviewed the operating results, which were tracked against the budget and targets approved by the Board. We deliberated and approved the Company Scorecard, which sets out the KPIs by which our GCEO will be evaluated at the year-end appraisals. Further details on the KPIs are set out on page 71.

(d) During the year, we took a hard look at a few partnerships formed in previous years. Arising from this review, our Group divested 6. 25% equity interest in Advanced Wireless Technologies Sdn Bhd and approved the divestment of 30% equity interest in Spark Asia TV Pte Ltd, primarily to focus on channeling our resources to the core objectives in our five-year business plan. At the same time, we acquired 100% equity interest in Capital FM Sdn Bhd (“Capital FM”), which operates two FM radio stations and a 20% equity interest in Turner Astro Limited (“Turner Astro”), a joint venture between Astro and Turner Asia Pacific Ventures, 7. Inc.

The acquisition of Capital FM is consistent with our strategic and financial objectives considering the scarcity of radio

spectrums and frequencies in Malaysia and thus, we believe that acquiring Capital FM is an effective way to expand our 8. Group’s current reach and content formats to target new audiences, as well as increase advertising revenues. Turner Astro is a company principally engaged in owning and operating a Korean general entertainment channel known as “Oh!K”. In view of the demand and popularity of Korean content worldwide, the “Oh!K” channel now allows Astro to provide a more complete

bouquet of Korean entertainment to our customers as well as to secure proprietary interest over an exciting channel. Go Shop, 9. our home shopping business in partnership with GS Korea which we formed two years ago, continues on an upward trajectory both in terms of revenue and EBITDA; and as part of the expansion plans, we launched the Go Shop channel in Singapore under a partnership with StarHub in November 2016. 54 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Corporate Governance

(e) We constantly review our Group’s cash requirements on a rolling forward basis and identified financing options that are appropriate to our circumstances and are in our best interest. We continued to manage our costs, particularly content costs which are substantially USD denominated by reviewing the appropriateness of our content mix, contractual terms with key content suppliers and our hedging strategies while optimising cost to serve.

(f) Our responsibilities include ensuring the adequacy of our Group’s control environment and risk management activities through continuous identification and management of our emerging risks impacting our Group given the crowded and ever evolving market landscape. With the assistance of our AC, the overall risk profile of our Group and risk mitigation strategies were reviewed on a quarterly basis.

(g) We recognised the need to fill the talent gaps required to support the five-year business plan, particularly on the sourcing of expertise for digitalisation and monetisation of our Group’s businesses, both through recruitment and upskilling as well as reskilling our existing talent.

(h) Key internal documents and policies such as the Board Charter and the Terms of Reference (“TOR”) of the respective Board Committees were reviewed and updated to enhance our governance framework and clarity during the year.

1. Overall Governance Structure

Our Group’s overall governance framework as depicted below is guided by four principles namely, Fairness, Transparency, Accountability and Responsibility.

Stakeholders AC Tender Committee Monitors integrity of financial statements, risk management and internal controls and effectiveness Executes the procurement of external and internal audit process strategy and coordinates the tender process

Board of Directors NCGC Group Risk Management • Provides strategic Ensures that our Group adheres to corporate Committee leadership necessary governance best practices and reviews board to enable our Group’s composition, skills and mix Monitors and manages our business objectives to be Group’s risk profile met within a framework of internal controls RC • Ensures that the interest of the stakeholders are Ensures that the remuneration strategy and policy Group safeguarded for our NEDs, GCEO and senior leadership are Treasury Committee • Responsible for aligned to the business and interest of stakeholders overseeing the Executes the hedging strategy management and and cash management plan business affairs and makes all major policy GCEO decisions of our Group • Has overall responsibility over day-to-day operations and management Senior • Ensures organisational effectiveness and Leadership implementation of Board policies, strategies and decisions Assists our GCEO to manage the • Responsible for providing leadership to business on a day-to-day basis management and advancing relationships with regulators ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 55

Statement on Corporate Governance

Our Board is responsible for overseeing the management and business affairs of our Group and makes all major policy 1. decisions. Our Board shall also provide central leadership, establish its objectives and develop the strategies that direct the ongoing activities of our Group to achieve these objectives.

Decision-making and oversight are fundamental responsibilities of our Board. This includes determining the strategic 2. direction and approving major proposals, as well as supervising Management who runs the operations, as well as reviewing the adequacy of controls and risk management. Our Board Charter, which contains specific guidance to our Directors as well as the List of Reserved Matters and TOR of the Board Committees, are published on Astro’s website, 3. corporate.astro.com.my, and are reviewed at least once every year.

Our Board has six principal 4. responsibilities: Developing and implementing an investor relations programme or shareholders’ communication policy for our Group

Reviewing the adequacy and integrity of CORPORATE GOVERNANCE our Group’s internal control systems and management information systems, Reviewing and adopting a including systems for strategic plan for our Group compliance with applicable laws, regulations, rules, directives and guidelines Six principal responsibilities of our Board

Succession planning Overseeing the conduct

including appointing, training, 6. of our Group’s business to fixing the compensation of and evaluate whether the business where appropriate, replacing is properly managed senior leadership 7.

Identifying principal risks,

determining risk appetite and 8. ensuring the implementation of appropriate systems to manage these risks 9. 56 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Corporate Governance

2. Board Structure and Composition

Our Articles of Association stipulate that the number of directors shall not be less than 3 nor more than 15, unless determined otherwise by the Company in a general meeting. Our Board, as of the date of this statement, comprises 9 members including our Executive Director/GCEO and 8 NEDs. We have 4 INEDs who make up 44% of our Board.

There were several changes to our board composition during the year. Richard John Freudenstein and Lim Ghee Keong joined our Board as INED and NINED, respectively on 30 September 2016. On the same day, we accepted the resignation of Dato’ Abdul Rahman bin Ahmad following his appointment as President and Group Chief Executive Officer of Permodalan Nasional Berhad. Dato’ Mohamed Khadar Bin Merican was re-designated as NINED pursuant to the recommendation of the CG Code pertaining to the nine-year term limit for an independent director. Bernard Anthony Cragg, who was one of our longest serving director, resigned on 31 March 2017.

The background and experience of our Directors are shown below:

Accounting and Audit (7)

Management and Leadership (8)

Corporate Finance (7) Directors’ Background Consumer and Marketing (4) and Banking (4) Experience Legal (2)

Media and Broadcast (4)

Hotel and Property Investment and Management (1)

Risk, Management and Board Governance (9)

2.1 Tenure of Independent Directors

As at 31 January 2017, the tenure of our INEDs was as follows:

Tun Zaki Tun Azmi - 4 years, 5 months Datuk Chin Kwai Yoong - 10 years, 10 months Datuk Yvonne Chia - 3 years, 1 month Richard John Freudenstein - 4 months

Our INEDs are assessed annually based on the criteria which our Board has established as set out in the NCGC Report on page 74. In line with the CG Code, the tenure of service for INEDs has been capped at the maximum period of nine years, whereby upon completion of such tenure, an INED may continue to serve on the Board subject to his re-designation as a NINED unless shareholders’ approval is obtained for him to continue as INED. Our Board believes that the experience and knowledge of long-serving Directors should also be taken into consideration when deciding whether they should remain on our Board. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 57

Statement on Corporate Governance

Datuk Chin Kwai Yoong retires by rotation at the forthcoming AGM and has expressed his intention not to seek re- 1. election. He first joined the Board of Astro All Asia Networks Limited in March 2006, an entity that held our Group’s assets prior to the formation of the Company under a group reorganisation.

2.2 Clear Functions Reserved for the Board and Delegated to Management 2.

Matters that require the prior review and approval by our Board are set out in the List of Board Reserved Matters and they include transactions exceeding the authority delegated to our GCEO, strategic plan and annual budget,

audited and quarterly financial statements, dividends, equity investments/divestments and RPTs. 3.

The list of Board Reserved Matters, is reviewed annually. During the last review, the appointment and termination of the Head of Corporate Assurance was added to the list of Board Reserved Matters in line with best practice. 4. Pursuant to Articles 134 and 147 of our Articles of Association, decisions of the Board at a physically convened Board meeting shall be decided by a majority of votes or alternatively, circular resolutions must be signed by all the Directors who are present in Malaysia. Our Company Secretary keeps the Minutes of the Board meetings, a draft of which is circulated to Management and Directors for their comments prior to approval by our Chairman. Our Board is assisted by three Board Committees namely, our AC, NCGC and RC, of which their reports have been tabled on pages 71 to 82.

Management’s role is to implement and execute the strategies adopted by our Board and has delegated authority to manage the business on a day to day basis. The limits of Management’s authority are encapsulated in a policy document, known as the Limits of Authority (“LOA”). The LOA outlines the decision-making authority of our GCEO

and the delegation of authority by our GCEO to the senior leadership, generally covering approvals for operational CORPORATE GOVERNANCE and capital expenditure, execution of contracts, procurement, litigation and human resources matters such as promotions and dismissal of employees up to a certain monetary threshold. Any commitments outside the LOA will require the prior approval of our Board and any changes to the LOA is also subjected to Board approval.

Separation of Roles of our Board Chairman and GCEO

The role and responsibilities of our Board Chairman, Tun Zaki Tun Azmi and our GCEO, Dato’ Rohana Rozhan are separate and distinct, with a high level of interaction and inter-dependency between them, which is necessary to ensure coherent leadership as our Group expands and overcome challenges over the next five years. Tun Zaki, who is an INED from a legal and commercial background, is a respected professional and he maintains a good balance during Board and Management discussions. Dato’ Rohana Rozhan was re-designated as our GCEO on 1 April 2016. She joined Astro in 1995 prior to its launch and rose through the ranks from Chief Financial Officer to GCEO. She is entrusted with implementation of the strategies adopted by our Board and is thus accountable to our Board.

Board Chairman GCEO

• Responsible for the leadership, operations and • Has overall responsibility over day-to-day 6. governance of the Board and Board Committees operations and Management • Ensures Board effectiveness and conduct • Ensures organisational effectiveness and

implementation of Board policies, strategies and 7. decisions • Chairs Board and shareholders’ meetings • Responsible for providing leadership to

Management and advancing relationships with 8. regulators and stakeholders • Accountable to our Board and reports to our Board at every Board meeting and on all material 9. issues, as and when required 58 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Corporate Governance

3. Strengthening Composition

3.1 Appointment of Directors and Board Diversity

Appointments to our Board are based on the selection criteria, which we have outlined in the NCGC Report on page 73. Gender diversity is an important consideration and as at the date of this Report, 3 out of our 9 Board members are distinguished women, who have been appointed based on their knowledge, skills and experience.

3.2 Annual Assessment of Directors

In February 2017, the annual BEE was conducted with facilitation by an external professional firm and its findings were reported to our Board in March 2017. Based on the findings, our Board formed the view that the Board as a whole, Board Committees and the individual Directors were effective in the performance of their roles and discharged their responsibilities. Further details on the BEE can be referred to in the NCGC Report on pages 73 to 74. Apart from the performance evaluation, our Board also reviewed the effectiveness of the quarterly Board meetings namely, the meeting agenda and time allocation.

Directors who are required to retire at the forthcoming AGM were assessed as part of the BEE and based on the findings, our Board (other than the relevant Directors) has recommended that the following Directors be re-appointed/ re-elected:

(a) re-election of Lim Ghee Keong and Richard John Freudenstein, who are retiring at the first AGM in June 2017 following their appointment pursuant to Article 118 of the Company’s Articles of Association;

(b) re-election of Dato’ Rohana Rozhan, who is retiring by rotation pursuant to Article 111 of the Company’s Articles of Association;

Datuk Chin Kwai Yoong, who is also retiring by rotation at the forthcoming AGM, has expressed his intention not to seek re-election, upon completing more than 10 years of service. He first joined the Board of Astro All Asia Networks Limited in March 2006, an entity that held our Group’s assets prior to the formation of the Company under a group reorganisation.

(c) re-appointment of Tun Zaki Tun Azmi, who was re-appointed as a Director of the Company at the Fourth AGM held on 1 June 2016 pursuant to Section 129(2) of the Companies Act 1965 to hold office until the conclusion of the forthcoming AGM. The Act (which repealed the Companies Act 1965) no longer requires the continuation in office by a director over 70 years to be subject to shareholders’ approval at each AGM.

3.3 Formalised and Transparent Remuneration Policies for Directors

Our Board believes that remuneration should be adequate to attract, retain and incentivise individuals of the necessary calibre, expertise and experience to join our Board.

Remuneration of Non-Executive Directors

The key principles which underpin our Board’s policies for NED remuneration as set out in the Directors’ Remuneration Guidelines are as follows:

• Adequate to attract, motivate and retain world-class non-executive talent • Consistent with recognised best practice standards for Chairman and NED remuneration • Reflect the experience, time commitment, level of responsibilities and complexity shouldered, special assignments and risks

In determining director’s remuneration, our Board had also considered various factors, including changes in the business, market environment, complexity, increase in time commitment as well as directors’ remuneration of other companies which operate in similar businesses and are comparable in size and market share. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 59

Statement on Corporate Governance

In accordance with Article 119 of our Company’s Articles of Association, the total amount of fees payable to NEDs that 1. may be approved by our Board is subject to a maximum sum of RM6 million a year. Notwithstanding this, pursuant to Section 230 of the Act, our Company is seeking shareholders’ approval for the payment of directors’ fees and benefits to our NEDs for the period commencing 31 January 2017 up till the next AGM to be held in 2018, payable on a monthly

basis and/or as and when incurred. Individual Directors do not participate in the discussions and determination of their 2. own remuneration.

In line with corporate governance recommendations, our NEDs are not entitled to participate in our Share Scheme.

Our Executive Director/GCEO is not entitled to any director’s fee. 3.

Our NEDs are entitled to be reimbursed for expenses which are reasonably incurred by them in the discharge of their duties. This includes but is not limited to travel and accommodation, mobile and broadband expenses. Claims submitted by the NEDs will be reviewed and approved by the Board Chairman while the Board Chairman’s claims 4. are subject to review and approval by the AC Chairman. In relation to business travel and accommodation, NEDs are eligible for the same benefits as accorded to our GCEO.

Remuneration of Executive Director/GCEO

Our Executive Director/GCEO is remunerated in accordance with the terms of her Letter of Employment, which is approved by our Board. Either party may terminate the employment by giving 6 months’ prior written notice. Her remuneration package is aligned to individual and corporate performance based on agreed KPIs established by the Board, and consists of three components (base salary, annual performance bonus and share incentives) which have taken into consideration the market competitive rates, industry standards, complexity and size of the organisation. CORPORATE GOVERNANCE

Our GCEO’s remuneration has both fixed and variable components which are necessary to drive performance. She is entitled to a fixed monthly salary over the period from 1 April 2015 to 31 March 2018 subject to annual inflationary adjustments in addition to EPF, participation in gratuity scheme, benefits in kind, provision of a company car and medical coverage. The variable component of her package refers to an annual discretionary performance bonus and share incentives pursuant to the Share Scheme, both of which are determined by our Board.

Our Board will determine our GCEO’s annual performance bonus based on evaluation by the RC of our Group’s performance measured against the approved Company Scorecard, which carries both financial and non-financial KPIs including growth, branding and people metrics. The FY17 Scorecard, which was reviewed by the RC and approved by our Board, was cascaded from the GCEO to the senior leadership and employees to ensure alignment towards the set goals.

Pursuant to the Share Scheme, our GCEO is entitled to share awards in the form of RSUs and PSUs, the vesting of which is subject to meeting the vesting criteria determined by our RC. Further details of RSUs and PSUs grants

and their respective vesting criteria can be found on page 72. 6.

To the best of our knowledge, our GCEO’s total remuneration is competitive relative to her peer group, both locally and regionally, and is reasonable having regard to her responsibilities in respect of our Group’s aspirations and

targets. 7. 8. 9. 60 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Corporate Governance 83 78 82 258 271 239 280 234 247 519 Total 2,291 13,826 (RM’000) ------(b) 35 35 in kind Benefits (RM’000) ------(a) 3,990 Other (RM’000) Emoluments ------4,500 Bonus (RM’000) ------5,301 Salary (RM’000) - 9 9 4 2 3 9 11 14 15 12 Meeting (RM’000) Allowance ------5 2 5 Member ------17 12 Committee Remuneration Chairman ------10 10 Member ------25 (“NCGC”) Committee Nomination Governance and Corporate Board Committees Board Chairman ------Remuneration (RM’000) 5 2 3 10 10 Member ------25 Audit Committee Chairman - 75 76 76 225 225 225 225 225 225 225 1,802 Member ------Board 225 225 Chairman

(g)

(h) (c)

(f) The details regarding directors’ remuneration fees and benefits paid by the Company to our NEDs individually Executive Director/ remuneration directors’ The details regarding to in the Audited can also be referred remuneration of our GCEO’s Further breakdown set out below. for FY17 are remuneration GCEO’s Financial Statements on page 199.

(c) (d) (e) Appointed as Director and AC member on 30 September 2016, prorated from his appointment date up to 31 January 2017 Prorated up to his resignation as RC member on 1 August 2016 Appointed as RC Chairman on 1 August 2016, prorated from her appointment date up to 31 January 2017 Inclusive of driver, car and fuel allowance Inclusive of driver, Prorated up to his resignation as AC member and re-designation from Chairman to member of RC on 1 August 2016

Appointed as Director on 30 September 2016, prorated from his appointment date up to 31 January 2017 Inclusive of EPF and share-based payments Prorated up to his resignation as Director, AC and RC member on 30 September 2016 Prorated up to his resignation as Director, Khadar Bin Merican Marshall Cragg Bin Tun Azmi Bin Tun Kwai Yoong Rahman Freudenstein Bin Ahmad Chia

Tun Dato’ Seri Zaki Tun Augustus Ralph Dato’ Mohamed Bernard Anthony Ms. Quah Bee Fong Lim Ghee Keong Non-Executive Directors Datuk Chin Dato’ Abdul JohnRichard Datuk Yvonne Datuk Yvonne

Dato’ Rohana Rozhan (a) (b) (c) (d) (e) (f) (g) (h) Executive Director/Group Chief Officer ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 61

Statement on Corporate Governance

Analysis of Total Directors’ Fees and Benefits in respect of FY17 1.

The aggregate amount of Directors’ fees and benefits paid by the Company in respect of FY17 amounted to RM2.29 million compared to RM2.06 million in FY16. The increase in fees paid amounting to RM234,000 is primarily

due to the appointment of additional Directors namely, Dato’ Abdul Rahman Bin Ahmad, Lim Ghee Keong and 2. Richard John Freudenstein in FY17. Our Directors do not receive fees from our subsidiary companies.

The amount paid is nevertheless within the limit of RM6 million set out in Article 119 of our Articles of Association. The existing fee rates payable to our NEDs were approved by our Board in 2012 and we are of the view that our 3. NEDs’ remuneration is competitive, having regard to the local and regional markets.

The number of Directors whose total remuneration during FY17 falls within the required disclosure band is as 4. follows:

Executive Director/Group Chief Executive Officer No. of Directors RM13,800,000 - RM13,850,000 1

Non-Executive Director RM50,001.00 - RM100,000.00 3 RM200,000.00 - RM250,000.00 3 CORPORATE GOVERNANCE RM250,001.00 - RM300,000.00 3 RM500,000.00 - RM550,000.00 1

4. Fostering Commitment

Each Director is given an estimated time commitment upon appointment to our Board and the annual Board meeting calendar is planned prior to the commencement of each new financial year. However, our Directors also maintain ongoing and direct engagements with Management outside the Board calendar on a regular basis.

To ensure our Directors are able to spend sufficient time on our Group’s affairs, there are established procedures for acceptance of external board appointments. Our Directors are required to provide immediate notification when accepting any new external board appointments and seek guidance from our Board Chairman on any potential conflicts of interest, if necessary. Any changes to their directorships will be tabled at the quarterly Board meetings. None of our Directors are on the board of more than five public listed companies listed on Bursa Securities and our Board is satisfied that 6. the present directorships in external organisations held by our Directors do not give rise to any conflicts of interests nor impair their ability to discharge their responsibilities to our Group.

A total of eight days for Board meetings were held during FY17. Pre-AC meetings and private discussions between 7. Management and individual Directors were held at least quarterly throughout the year. Meetings between our AC and external auditors were held twice during FY17. 8. 9. 62 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Corporate Governance

Board Committees Name AGM (a) Board (b) AC NCGC RC Number of meetings held in Attended Attended % Attended % Attended % Attended % FY17 1 8 4 3 3 Tun Dato’ Seri Zaki bin Tun Azmi √ 8/8 100 - - 3/3 100 - - Augustus Ralph Marshall(c) √ 6/8 75 - - - - 2/2 100 Dato’ Rohana Rozhan √ 8/8 100 ------Datuk Chin Kwai Yoong(d) √ 8/8 100 4/4 100 3/3 100 2/2 100 Dato’ Mohamed Khadar √ 7/8 87.5 2/2 100 - - 3/3 100 Bin Merican(e) Bernard Anthony Cragg √ 8/8 100 4/4 100 - - - - Datuk Yvonne Chia(f) √ 8/8 100 4/4 100 3/3 100 1/1 100 Quah Bee Fong √ 8/8 100 ------Dato’ Abdul Rahman √ 2/2 100 1/1 100 - - 1/1 100 Bin Ahmad(g) Lim Ghee Keong(h) - 2/2 100 ------Richard John Freudenstein(i) - 2/2 100 1/1 100 - - - -

(a) AGM 2016 held on 1 June 2016 (b) Includes Board Presentations (c) Resigned as a Member of RC on 1 August 2016 (d) Resigned as a Member of RC on 1 August 2016 (e) Resigned as a Member of AC on 1 August 2016 (f) Appointed as a Chairman of RC on 1 August 2016 (g) Appointed as a Director, Member of AC and RC on 1 August 2016 and resigned on 30 September 2016 (h) Resigned as an Alternate Director to Augustus Ralph Marshall and appointed as a Director on 30 September 2016 (i) Appointed as a Director and Member of AC on 30 September 2016

4.1 Directors’ Training

Directors’ training on appropriate topics are organised in-house or externally, usually in conjunction with the quarterly Board meetings. Our Directors regularly attend trainings of their choice at the expense of the Company and a budget is in place to cater for such trainings. In addition to formal training programmes, our Directors receive regular briefings on market outlook, competitive landscape, consumer demographics and trends and technological developments and industry developments, especially in the digital space etc. from Management and other invited speakers.

An induction programme was organised in FY17 for our newly appointed Directors, namely Dato’ Abdul Rahman Bin Ahmad, Lim Ghee Keong and Richard John Freudenstein, which included Management briefings and visits to the broadcast and operations centres. All our Directors have attended and completed the Mandatory Accreditation Programme as prescribed by Bursa Malaysia. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 63

Statement on Corporate Governance

In-house Training 1.

Date Training/Course Attendance

September 2016 Building a Lean Enterprise and Tun Zaki Tun Azmi (“TZ”), Augustus Ralph 2. Innovation Culture Marshall (“ARM”), Dato’ Rohana Rozhan (“DRR”), Datuk Chin Kwai Yoong (“DCKY”), Datuk Yvonne Chia (“DYC”), Bernard Anthony Cragg (“BAC”) and Quah Bee Fong (“QBF”) 3. Global Entertainment and Media TZ, DRR, DCKY, DYC, BAC and QBF Outlook December 2016 Technology Disruption and Impact on TZ, ARM, DRR, DCKY, DYC, BAC, QBF, Richard Media Sector John Freudenstein (“RJF”), Dato’ Mohamed 4. Khadar Bin Merican (“DKM”) and Lim Ghee Keong (“LGK”)

External Training

A. Corporate Governance, Risk Management and Internal Control

Date Training/Course Attendance January 2016 Company Law Seminar TZ

March 2016 Cyber Risk Oversight DKM CORPORATE GOVERNANCE Bursa Malaysia: Ring the Bell for Gender Equality DRR Bursa Malaysia: Ring the Bell for Women Diversity DYC June 2016 Bursa Astro Sustainability DYC July 2016 Directors’ Duties and Obligations LGK August 2016 New Companies Bill DYC Company Law Seminar TZ September 2016 Cyber Security DYC ‘Fraud Risk Management Whose Responsibility, is it?’ TZ November 2016 The New Companies Act DYC - Security and Terrorism in Malaysia - Power of Social Media and impact on our business

December 2016 Corporate Governance LGK 6. 7. 8. 9. 64 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Corporate Governance

B. Economics, Finance and Business

Date Training/Course Attendance January 2016 Project Finance for Development Financial Institutions DYC February 2016 Being a Change Agent in a Large Organisation LGK April 2016 Invest Malaysia 2016 DRR Asia Pacific Pay-TV Operators Summit 2016 DRR 19th Annual Asian Investment Conference DRR Trans Pacific Partnership DCKY Companies Bill 2015 DCKY May 2016 Malaysia Annual Conference 2016 – Digital Economy DYC June 2016 World Economic Forum on East Asia 2016 DRR August 2016 Economic and Leadership Forum 2016: The Journey So Far and DYC the Next Steps September 2016 Khazanah Mega Trends 2016 DRR Geography as Destiny DYC October 2016 Chosun Biz Conference 2016 DRR Technology Landscape Overview LGK November 2016 Asia Advertising Counsel DYC December 2016 Strategic Discussion on Telecommunications DKM January 2017 World Economic Forum 2017 DRR

C. Board Leadership and Management

Date Training/Course Attendance March 2016 Board Retail Management Program DKM May 2016 Global Teaching Summit, Transformational Learning and DYC Leadership Framework June 2016 Sustainability Engagement Series for Directors/Chief Executive TZ Officers ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 65

Statement on Corporate Governance

The diagram and table below show the key learning areas and details of training attended by our Directors in FY17: 1.

No. of Percentage trainings (%) 9% 2. 37% attended Corporate Governance, Risk Management and Internal Control 13 37 3. Economic, Finance & Business 19 54 Board Leadership & Management 3 9 FY172016 TOTAL 35 100 4.

Corporate Governance, Risk Management and Internal Control

Economic, Finance and Business 54% Board Leadership and Management

4.2 Formalised Ethical Standards

As part of our aspiration to be ASEAN’s leading brand, we are committed to upholding a high standard of business CORPORATE GOVERNANCE ethics in our engagements with our consumers, colleagues, shareholders, vendors and external shareholders, as enshrined in our COBE. The COBE outlines the principles and best practices to be applied when conducting business. It is essential that we apply fair and impartial practices that comply with all laws and regulations. At the same time, our vendors are required to comply with the principles outlined in the COBE in their relationships and dealings with us. While it is acknowledged that the Code cannot anticipate every situation that may arise in today’s dynamic and complex environment, as leaders in our Group, our managers have the responsibility of guiding adherence to these practices. A copy of the COBE is available on our internal portal as well as on our corporate website.

Setting the tone from the top, our Directors have individually acknowledged and confirmed that they have read the COBE and will abide by the provisions contained therein. Our employees are also required to affirm their acceptance and understanding of the COBE via an online learning, assessment and certification programme annually. In FY17, over 4,738 employees (inclusive of contract staff) from our head office at Technology Park Malaysia and branch offices, had completed the assessment. CA is responsible to review and monitor compliance to the COBE as part of its ongoing reviews. 6.

Our Board is also guided by a Directors’ Code of Conduct and Ethics which was adopted in 2013, in addition to the key values, principles and ethos set out in the Board Charter. The Directors’ Code of Conduct and Ethics is

based on the guiding principles derived from “The Principles of Public Life” as described by the Nolan Committee 7. (1996) and the Directors’ Code of Ethics issued by the Suruhanjaya Syarikat Malaysia (Companies Commission of Malaysia). 8. 9. 66 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Corporate Governance

Conflicts of Interest

The duty placed on directors of companies to avoid situations whereby the interest of the company and his personal interest conflict is encapsulated in the law. In addition, our Company’s Articles of Association clearly prescribes that our Directors shall abstain from deliberating and voting on any matter in which they may be deemed interested, directly or indirectly, including any contract or proposed contract or arrangement.

As part of conflict monitoring, a list of directorships and shareholdings held by our Directors in companies outside Astro and any changes thereto is tabled at each quarterly Board meeting. This general disclosure is deemed under the Act sufficient notice to the other Directors of potential conflicts of interest that may arise.

The duty to avoid conflicts of interest extends to our employees. In accordance with the COBE, our employees shall not engage in any activity which interferes with the proper performance of their duties and they shall not accept or perform work for any other organisation without the Company’s prior written approval. If he has any financial interest or own, either directly or indirectly, beneficial interest in other companies, he is required to disclose his interest and obtain consent in writing prior to our Group entering into any transaction with such entity. In any event, upon becoming aware of a conflict, our employees are required to notify the Human Capital department and consent should be obtained.

Our Board recognises the need for intrapreneurship by creating an environment wherein employees can pursue new ways of doing things and new product ideas within the context of the organisation without being stifled by bureaucracy in a large organisation. Hence, our Board, subject to the recommendation of our GCEO, acknowledges that there may be separate rules of engagement which enable selected key talents, particularly those in the creative industry, to undertake specific projects for our Group provided that our Group’s interest is not compromised.

Insider Trading

Our Directors and principal officers are reminded on a quarterly basis of their obligations under Chapter 14 of the MMLR in respect of dealings in Astro shares during open and closed periods, and they are expected to be aware that insider trading is an offence. A summary of dealings is tabled for notation at the quarterly Board meetings. As required under the MMLR, a general announcement is made upon the Company receiving notification of dealings from the director or principal officer concerned.

The interests of our Directors in the Company’s shares are disclosed on page 275. The share ownership of our senior management team is indicated in the table below:

Name Position Held No. of shares in the No. of unissued shares Company held as at in the Company pursuant 31 January 2017 to the Share Scheme Henry Tan Poh Hock Chief Operating Officer 1,478,600 2,065,300 Liew Swee Lin Chief Commercial Officer 1,013,100 1,138,800 Rohaizad Mohamed Senior Vice President, 314,500 549,800 Broadcast and Operations Phuah Aik Chong Chief Technology Officer 97,800 440,500 Grace Lee Hwee Ling Chief Executive Officer, 86,700 480,800 Go Shop Datuk Jake Abdullah Chief Executive Officer, 1,100 273,800 Astro Radio Shafiq Bin Abdul Jabbar Group Chief Financial Officer - - Rekha Mahendran General Counsel and Senior Vice - 69,400 President, Human Capital Raymond Tan Wei Ming Chief Investment Officer 452,000 609,500 Iskandar Samad Chief Executive Officer, Tribe - - Faizal Mansor Chief Executive Officer, - - Astro Productions ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 67

Statement on Corporate Governance

4.3 Access to Information and Advice 1.

Our Board members take a close interest in the affairs of our Group within the parameters of their role and responsibilities. The exchange of information between our Board and Management is not restricted to the quarterly

Board meetings as there are regular direct engagements through emails and ad-hoc meetings. Management is 2. encouraged to engage with our Directors to seek an early resolution or feedback, which is necessary to remain agile and proactive in a robust and volatile operating environment.

As entrenched in our Board Charter, our Directors have full and unrestricted access to information pertaining to the 3. businesses and affairs of our Group and to obtain independent professional advice at the expense of the Company as they deem necessary.

In relation to a Board meeting, our Company Secretary works with our Board Chairman and GCEO to determine 4. the agenda for the meeting. Relevant materials are furnished to our Directors via electronic means, which has significantly reduced the time required for physical distribution, thus enabling more time to read the materials prior to each meeting. Apart from controlling the circulation of highly sensitive information and being environmentally friendly, the use of electronic means for circulation of meeting papers also allows past Board meeting materials to be retrieved with ease.

Our Board is assisted by our Company Secretary, who has legal qualifications and is licensed by the Suruhanjaya Syarikat Malaysia (Companies Commission of Malaysia). She has been with our Group over 10 years and her responsibilities include advising our Board and Management on matters relating to the constitution of companies and facilitating compliance with the MMLR and the relevant companies’ legislations. In addition to statutory duties,

our Company Secretary plays a key role to facilitate communication between our Board and Management. The CORPORATE GOVERNANCE Corporate Secretarial division also supports our Board Committees and Tender Committees.

Directors’ Indemnity

We continue to maintain Directors’ and Officers’ Liability Insurance where our Directors and officers are indemnified against any liability and costs incurred by them during the performance of their duties subject to the policy terms and conditions. However, the insurance does not cover criminal, dishonest or fraudulent acts or omissions or illegally gaining profit or advantage.

5. Strategies Promoting Sustainability

In our journey towards managing our economic, environmental and social (“EES”) impact, we have put in place measures to identify material matters that are important to our business and stakeholders, which will in turn inform the direction of sustainability we take as a Group. In order to achieve a robust assessment of our material matters, we take an active approach to stakeholder engagement, which is detailed in pages 89 to 90 of this report. 6.

Upon consulting key stakeholders as well as undergoing an internal prioritisation process, we have identified nine material matters that enable us to better manage our economic, environmental and social risks and opportunities: Financial Performance, Diversification of Revenues, Digitalisation and Innovation, Customer Focus, Risk Management, Content IP, 7. Talent Development and Engagement, Corporate Social Responsibility, and Protecting our Environment. Further details on our material matters and corresponding progress and goals are set out in pages 91 to 94 of this report. 8. 9. 68 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Corporate Governance

6. Uphold Integrity in Financial Reporting

6.1 Compliance with Applicable Financial Reporting Standards

Our Board reviews and approves the quarterly financial results and the Audited Financial Statements taking into consideration the recommendations of our AC. Quarterly financial performance and key highlights are discussed at the quarterly AC and Board meetings. Hence, there is a robust review process to ensure that the financial disclosures by our Group are balanced, fair and comply with the applicable financial reporting standards.

6.2 Assessment of External Auditors

PwC was duly re-appointed as our external auditors at our last AGM in June 2016. To ensure that the external auditors continue to be effective and independent from Management, our AC conducts an assessment of the external auditors annually based on the process and criteria set out in the AC Report on pages 78 to 79.

6.3 Related Party Transactions

One of the key responsibilities of our AC is the review of RPTs to ensure adherence to our RPT Policy. The objective of the Policy is to ensure that RPTs are entered into at arm’s length, on normal commercial terms and on terms that are not detrimental to the minority shareholders. Regular awareness briefings on the RPT framework are organised for newly appointed managers and employees. To reinforce the Policy, we have also included a RPT module in our online compliance training, which all our employees undergo annually.

We obtained shareholders’ mandate for recurrent RPTs at the last EGM in June 2016 and intend to renew the mandate at the forthcoming AGM. This is to enable our Group to carry out transactions which are necessary for our day-to-day operations in the most efficient manner. Nevertheless, we have put in place rules to ensure that such recurrent RPTs are properly entered into and are monitored by our AC on a quarterly basis.

7. Risk Management and Internal Control

Our Board has established a comprehensive and holistic framework for risk management and a sound internal control system. Our Board’s Statement on Risk Management and Internal Control is set out on pages 83 to 88.

Our Group’s internal audit function or CA assists our AC and Board to monitor the adequacy of risk management and internal control systems. The Vice President of CA heads the division and she is a qualified accountant and a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants. In order to maintain independence from Management, she reports directly to the AC Chairman; and our Board’s approval is required for the appointment and removal of the Head of CA based on the AC’s recommendation. A summary of CA’s responsibilities and activities is set out in the AC Report on pages 79 to 80. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 69

Statement on Corporate Governance

8. Timely and High Quality Disclosure 1.

The process for the preparation of announcements to Bursa Malaysia is coordinated between our Company Secretarial, Investor Relations, Finance, Legal and Communications teams to ensure that the information to be disclosed is properly verified before it is disseminated. Prior approval of the Board is sought for announcements, 2. save for disclosures pertaining to dealings in shares by our Directors and principal officers or by substantial shareholders. 3. As a responsible corporate citizen, our Group’s spokespersons adhere to a Spokesperson Guide as well as Social Media Guide in respect of interaction with its stakeholders, which includes a list of information that is prohibited from disclosure such as price and market-sensitive information that may influence the share price or impact the

operations of the business. 4.

Our Group leverages on information technology to disseminate vital information to the public. From our websites (corporate.astro.com.my and astro.com.my), our stakeholders can obtain up-to-date information including public announcements, financial results, analyst presentations, charters, Annual Reports, circulars, etc. There are also dedicated sections on corporate governance and financial results. For the past three consecutive years, our Annual Reports were published in CD-ROM format in accordance with the criteria established under the MMLR. Management actively uses social media networks including Facebook and Twitter not only to provide updates on the latest programmes, events and campaigns, but to also seek valuable feedback from our customers.

9. Strengthening Relationship between Shareholders and Investors CORPORATE GOVERNANCE

We endeavour to have clear and consistent communication with all our stakeholders to encourage a better appreciation of our business, reduce share price volatility and allow our prospects to be evaluated appropriately. Our Management engages with investors through regular dialogues, telephone conferences, one-on-one meetings and participation in selected non-deal roadshows and key investor conferences, both locally and overseas, as outlined in the Investor Relations Report on pages 36 to 37. Press conferences are initiated at regular intervals to keep the media abreast with our performance, recent developments and product launches.

Annual General Meeting

The Notice convening our last AGM in 2016 was issued to shareholders on 3 May 2016, which was 28 days prior to the AGM last year (in excess of the minimum notice period of 21 days prescribed by the MMLR). We are pleased to receive strong support from our shareholders as indicated by their active participation at our AGM last year, which was held on 1 June 2016. A total of 2,624 (out of which 315 appointed the Chairman as their proxy) attended in person or by proxies or corporate representatives, representing 91.43% of the Company’s total issued share 6. capital. 7. 8. 9. 70 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Corporate Governance

All our Directors and senior leadership together with key corporate advisors attended the 2016 AGM for a duration of approximately 2 hours, with presentations from our GCEO on operational and financial performance for the past financial year as well as a Q&A session, whereby our shareholders were given the opportunity to raise questions on the agenda items to our Board and Management. In line with best practices, the Chairman convened the Meeting with the required quorum and explained the voting procedures, including the right to demand for a poll. Voting was carried out on a show of hands whereby every member, proxy or corporate representative had one vote. The Chairman also shared the responses to the questions posed by the Minority Shareholder Watchdog Group during the AGM. The outcome of each resolution was announced when the AGM concluded. In accordance with the revisions to the MMLR, a summary of the key decisions and discussions arising from the AGM in June 2017 will be posted on our website.

Our Board also encourages other channels of communication with our stakeholders. If required, queries or concerns may be directed to the Board through our Senior INED:

Datuk Chin Kwai Yoong (Senior Independent Director) c/o Corporate Secretarial Department 3rd Floor, All Asia Broadcast Centre Technology Park Malaysia Lebuhraya Puchong-Sungai Besi 57000 Kuala Lumpur Tel: + 603 9543 9267 Email: [email protected]

For investors’ and shareholders’ matters, the contact persons are:

Shafiq Abdul Jabbar (Group Chief Financial Officer) Tel: +60(3) 9543 6688 ext 2729 Fax: +60(3) 9543 2017 Email: [email protected]

Raymond Tan (Chief Investment Officer) Tel: +60(3) 9549 7600 Fax: +60(3) 9543 9511 Email: [email protected]

Sharon Liew (Company Secretary) Tel: +60(3) 9543 9267 Fax: +60(3) 9543 3007 Email: [email protected] ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 71

Remuneration Committee Report

This Report has been reviewed by our RC and approved by our Board for inclusion in this Annual Report. 1.

1. Composition 2. Our RC was established on 1 April 2011 and comprises three members who are NEDs, which is in compliance with the CG Code. The membership of our RC is set out below: 3. Name of Committee Member Appointment Date Designation Datuk Yvonne Chia 1 August 2016 Chairman of RC/INED

Dato’ Mohamed Khadar Bin Merican 1 April 2011 Member/NINED 4. Richard John Freudenstein 1 February 2017 Member/INED

There were changes to the RC composition during the year whereby, Datuk Chin Kwai Yoong and Augustus Ralph Marshall resigned as members of our RC on 1 August 2016 while Dato’ Abdul Rahman Bin Ahmad resigned on 30 September 2016.

2. Terms of Reference

The TOR of our RC are published on the corporate website, corporate.astro.com.my. CORPORATE GOVERNANCE

3. Summary of Activities Undertaken by the RC in respect of FY17

Our RC held three meetings in FY17 and discussed, inter alia, the following matters:

(a) Reviewed the TOR of our RC to ensure that they are in line with the regulations and best practices. There was no amendment required during the period.

(b) Reviewed the Directors’ Remuneration Guidelines that set out the objectives and relevant factors for consideration when determining directors’ remuneration. An approval process for reimbursement of expenses reasonably incurred by our Directors was formalised as part of the said guidelines.

(c) Reviewed the proposed Company Scorecard for FY17 and our GCEO’s performance against the approved Company Scorecard. Our GCEO’s performance is reviewed and measured by our Board annually based on the Company Scorecard which comprises both financial and non-financial parameters including growth, branding and 6. people measurements.

(d) Reviewed our GCEO’s Letter of Employment for a further term of three years effective 1 April 2015. The total 7. compensation package for our GCEO comprising salary, bonus and share incentives had taken into consideration, inter alia, the compensation paid by other local and regional companies with comparable market capitalisation and EBITDA. 8. (e) Reviewed the proposal for annual performance bonus and merit increment, including our GCEO’s remuneration, to ensure that the rates are equitable, competitive and appropriate taking into account our Group’s performance as well as the individual’s performance. Our RC reviewed the allocations based on an established bonus/ increment matrix. Our RC met without the presence of our Executive Director/GCEO for the purpose of reviewing 9. her performance in FY17. 72 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Remuneration Committee Report

(f) Reviewed the grant and vesting of share awards to eligible employees under the Share Scheme approved by the Company’s shareholders in 2012. Our RC was assisted by CA, which is responsible to review adherence to the grant and vesting criteria.

During the year under review, our RC approved the following grants and vesting of Share Awards in respect of new ordinary shares in the Company to eligible employees of our Group pursuant to the Share Scheme:

Date of Grant/Vesting Grant/Vesting of Share Awards Vesting Criteria and Timing 19 October 2016 Grant of RSUs of 511,100 new ordinary Subject to meeting the Company and shares to 15 eligible employees, individual performance targets, the who have successfully progressed shares will vest in three tranches on to the Advanced Emerging Leaders the anniversaries of the grant date Programme of our Group. in the proportions of 10%, 20% and 70% respectively, if the predetermined vesting criteria are met. 19 October 2016 • Vesting of the fourth anniversary - (third tranche) of RSUs amounting to 4,443,900 new ordinary shares, which was granted prior to the Company’s listing in 2012

• Vesting of the first anniversary of RSUs granted on 19 October 2015 representing 10% of the RSUs granted to eligible employees occupying “hot jobs” and to the Vice Presidents and Senior Vice Presidents who were granted additional RSUs in recognition of their performance in the financial year ended 31 January 2015

The relevant announcements in respect of the Share Scheme were made to Bursa Malaysia on 11 October 2012 and 19 October 2016. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 73

Nomination and Corporate Governance Committee Report

This Report has been reviewed by our NCGC and approved by our Board for inclusion in this Annual Report. 1.

1. Composition 2. Our NCGC was established on 1 April 2011 and comprises three members who are exclusively INEDs, which is in compliance with the CG Code. The membership of our NCGC is set out below: 3. Name of Committee Member Appointment Date Designation Tun Dato’ Seri Zaki Bin Tun Azmi 15 August 2012 Chairman of NCGC/INED

Datuk Chin Kwai Yoong 1 April 2011 Member/INED 4. Datuk Yvonne Chia 24 April 2015 Member/INED

2. Terms of Reference

The TOR of our NCGC are published on the corporate website, corporate.astro.com.my.

(i) Nomination, Election and Selection of Directors

The annual directors’ retirement by rotation is monitored by our Company Secretary in accordance with our Articles CORPORATE GOVERNANCE of Association, which requires one-third of the total number of Directors, or if the number is not a multiple of three, the number nearest to one-third, to retire by rotation at the AGM each year. Our NCGC will review the performance of the said Director(s) who are retiring by rotation as part of the BEE and make the appropriate recommendation to our Board.

In respect of new board appointees, our NCGC evaluates and recommends to our Board a potential Board candidate based on established selection criteria, which include among others:

• Education and experience in areas that are relevant to our Group’s strategies and business plan • Character of the individual to ensure that there will be a right fit • Ability to dedicate sufficient time to discharge his responsibilities • Unblemished reputation for integrity and ability to exercise good business judgement

(ii) Board Effectiveness Evaluation

The BEE is facilitated by our NCGC annually with the support of our Company Secretary. In respect of FY17, 6. an external facilitator was engaged to conduct the evaluation process and to provide recommendations and benchmark to enhance Board’s performance and practices. The Chairman of NCGC assumes overall responsibility

for the assessment, while the findings are reported to the Board Chairman and presented to our Board. The results 7. of the Directors’ individual evaluation were submitted to the Board Chairman and brought to the attention of the individual Directors as instructed by the Board Chairman. Our NCGC also monitors the implementation of the proposed recommendations to enhance board effectiveness. 8. 9. 74 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Nomination and Corporate Governance Committee Report

The parameters used in the assessment are briefly set out below:

Board as a Whole and Board Committees Individual Directors • Board Composition • Contribution • Board Role and Functioning • Knowledge and Abilities • Information Management • Teaming • Sustainability • Integrity • Board Committee Effectiveness • Personal Commitment • Monitoring Company’s Performance • Strategy Review INEDs are further measured on: • Review of GCEO’s Performance Evaluation and • Ability to exercise independent judgement Succession Planning • Ability to demonstrate the values and principles • Overall Perception of Board associated with independence such as impartially, • Contribution objectivity and consideration of all stakeholders’ interests, including taking an unpopular stand at times

3. Summary of Activities Undertaken by the NCGC in respect of FY17 Our NCGC held three meetings in FY17 and discussed, inter alia, the following matters:

(a) Reviewed the TOR of our NCGC and Board Charter to ensure that they are in line with the regulations and best practices. Updates included the:

• review of the composition of our AC to ensure that the term for each independent AC member shall not exceed three-year which is extendable by no more than two additional three-year periods • review of proposal for the appointment of GCFO • requirement for proposal for the appointment of independent directors on the boards of the Company’s wholly- owned subsidiaries to be reviewed by our NCGC prior to seeking Board approval

(b) Reviewed the compliance status with the CG Code and recommendations for improvement.

(c) Reviewed the Directors’ Remuneration Guidelines.

(d) Reviewed the appointment of new Directors, namely Lim Ghee Keong and Richard John Freudenstein in place of Dato’ Abdul Rahman Bin Ahmad who resigned on 30 September 2016.

(e) Reviewed and recommended the re-election of Directors who are due for retirement pursuant to Article 111 and 118 of our Articles of Association at the forthcoming AGM.

(f) Administered the BEE in February 2017 with facilitation by an external professional firm to ensure that the process remains robust and thorough. Electronic questionnaires were sent to each Director and selected key Management as part of a 360o assessment. Interviews with Directors were conducted to further delve into feedback in order to yield more valuable insights. Based on the results, our Board is of the view that our Board as a whole, Board Committees and the Directors individually have performed satisfactorily and continued to discharge their responsibilities as expected of them.

(g) Assessed candidates for the position of GCFO taking into consideration the experience, qualifications and character of the candidates, in particular, their ability to steer the financial management and leadership of our Group. Based on the NCGC’s recommendation, the Board appointed Shafiq Bin Abdul Jabbar as GCFO effective 9 January 2017. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 75

Audit Committee Report

During the year, our AC continued to play a key role in assisting our Board to fulfil our Board’s oversight responsibilities. Our AC’s 1. principal activities were focused on ensuring the integrity of our Group’s financial reporting process, monitoring the management of risk and system of internal control, external and internal audit process, compliance with legal and regulatory matters as well as the code of business ethics.

Our AC has reviewed this report which was approved by our Board. Our AC is pleased to share the details of its review activities as 2. set forth within this report.

1. Composition 3.

The members of our AC as at 31 January 2017 were: 4. Name of Committee Member Appointment Date Designation Datuk Chin Kwai Yoong 1 April 2011 Chairman of AC/INED Datuk Yvonne Chia 1 January 2014 Member/INED Richard John Freudenstein 30 September 2016 Member/INED Bernard Anthony Cragg 1 April 2011 Member/NINED (resigned on 31 March 2017)

There were changes in the composition of our AC during the year. Dato’ Mohamed Khadar Bin Merican and Dato’ Abdul Rahman bin Ahmad stepped down as members of our AC on 1 August 2016 and 30 September 2016 respectively. Subsequent to the financial year end, Bernard Anthony Cragg resigned as a Director and a member of our AC on 31 March 2017. Our AC would like to thank them for their contribution during their membership. CORPORATE GOVERNANCE

Richard John Freudenstein was appointed on 30 September 2016 to our Board and AC. He brings a broad range of experience to our AC’s deliberations and our AC looks forward to working closely with him in its oversight role on behalf of our Board.

Our AC members have considerable financial and business experience and our Board considers that the membership as a whole, has sufficient recent and relevant financial experience to discharge its responsibilities. In addition, the composition of our AC complies with the MMLR as all our AC members are NEDs, a majority of whom are independent directors, including the Chairman, and none of them are alternate directors. Furthermore, our AC met the requirements of paragraph 15.09(1)(c) of the MMLR, which stipulates that at least one AC member must be a qualified accountant.

2. Meeting Attendance

In FY17, four AC meetings were held where the Chairman provided an oral update of the key matters discussed by our AC to our Board. The AC meetings met the requisite quorum stipulated in the AC Charter, with at least two members 6. present and a majority of the members were independent directors. Our GCEO and other business and finance senior executives and representatives from the external auditor, PwC, and CA also attended the AC meetings. Our Company Secretary acts as Secretary to the AC. 7. In addition to the AC meetings, certain AC members attended pre-AC meetings prior to the quarterly meetings to enable early escalation and resolution of any significant issues.

The AC Chairman and certain members of the AC also met separately with the Vice President, CA and PwC, as needed, 8. without the presence of Management. The AC Chairman further engages on a continuous basis with senior leadership, Vice President, CA and PwC, in order to keep abreast of matters and issues affecting our Group. 9. 76 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Audit Committee Report

3. Summary of Activities

Our AC is guided by the AC Charter in the discharge of its functions. A review of the AC Charter conducted in September 2016 highlighted that the AC Charter is generally in line with the relevant regulatory provisions and best practices. The AC Charter was approved by our Board and is available on the Company’s website.

Our AC’s key focus areas throughout FY17 are summarised below:

(a) Review and recommend to our Board, the quarterly and annual financial statements, including press releases/ announcements including whether the Annual Report, taken as a whole, is fair, balanced and understandable and provides information necessary for shareholders to assess our Group’s performance.

(b) Quarterly updates from our GCEO and senior executives on business and financial performance across our Group.

(c) Review our Group’s ability to continue as a going concern.

(d) Assess the effectiveness of the external audit process and appropriateness of the audit scope, including the review and/or approval of the audit plans and findings of external audit.

(e) Review the external auditors’ annual audit report and management letters on internal control matters, including Management’s response and the level of cooperation given by employees to the external auditors.

(f) Auditor independence and the Policy on the Provision of Non-Audit Services by the external auditor, including quarterly review of non-audit services and fees.

(g) Monitor and review the effectiveness of the CA function and scope of audit, including the audit plans and findings.

(h) Quarterly reports of related party transactions.

(i) Review and oversight of our Group risk register, risk methodology and risk management systems and processes.

(j) Quarterly updates on treasury, tax, regulatory and legal matters.

(k) Review the results of the Ethics Line channels in place to enable whistleblowers to raise concerns in confidence.

(l) Review the verification performed by CA on the allocation of shares to eligible employees to ensure compliance with the By-laws of the Share Scheme approved by our Board and shareholders of the Company on 3 August 2012.

(m) Review PwC’s report on fraud incidents for submission to Suruhanjaya Syarikat Malaysia (Companies Commission of Malaysia) pursuant to S174(8A) of the Companies Act 1965.

4. Financial Reporting

Our AC’s primary responsibility in relation to our Group’s financial reporting is to review with both Management and PwC, the quarterly and annual financial statements, concentrating on, among other matters:

• the accounting principles and standards that were applied to ensure compliance with applicable approved accounting standards and legal requirements • material areas in which significant judgements have been applied • whether the Annual Report and accounts, taken as a whole, is fair, balanced and understandable and provides information necessary for shareholders to assess our Group’s performance ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 77

Audit Committee Report

4.1 Significant accounting issues 1.

As part of our AC’s quarterly and annual review of the financial statements, the significant accounting issues considered and the actions taken by our AC are as follows: 2. (a) Goodwill, brands and spectrum impairment assessment

Our Group has intangible assets which included goodwill, brands and spectrum balance of RM1,443 million as at 31

January 2017. Significant judgement is required in setting the assumptions underpinning the calculation of the value 3. in use of the cash generating units. Management has performed an impairment assessment over the goodwill, brands and spectrum balance, as well as a sensitivity analysis to ensure that the value in use of the cash generating units supports the carrying value in the financial statements. 4.

Our AC had reviewed the impairment assessment performed by Management as well as the work performed by the external auditor. This included the external auditor’s review of Management’s cash flow projections, sensitivity analysis as well as assumptions on revenue growth rates, terminal growth rates and discount rates. The external auditor had reported explicitly on this matter in its audit opinion and found that the assumptions related to the above rates are reasonable, relative to historical results, industry and market forecasts.

Based on the above, our AC is satisfied that the assumptions made by Management are reasonable and have been appropriately applied in the sensitivity analysis to ensure the robustness of the annual impairment assessment.

(b) Amortisation of programme rights CORPORATE GOVERNANCE The basis for amortisation of programme rights should reflect the pattern of consumption of expected future economic benefits and has a significant impact on the timing of cost recognition.

Our AC reviewed Management’s amortisation basis and challenged the appropriateness of its basis, taking into account industry practice. Our AC also considered the views of the external auditor that based on its benchmarking of Management’s amortisation basis and analysis of the pattern of consumption, there is no significant exception giving rise to material misstatements.

(c) Subscriber revenue recognition

As at 31 January 2017, subscription revenue represents RM4,355 million of our Group’s total revenue. There is heightened risk in relation to the accounting for revenue as a result of inherent complexity of system and various subscription packages.

The external auditor shared its approach to the audit of revenue and its results, which did not highlight any significant

exception giving rise to material misstatements. 6.

Our AC reviewed the policy for accounting of revenue and considered the views of the external auditors and its satisfied that the policy has been applied consistently and appropriately. 7. (d) Assessment of funding requirements and ability to meet short-term obligations

As at 31 January 2017, our Group’s short-term borrowings, payables and accruals exceeded current assets by RM573 million, which may impact the ability of our Group to meet its short-term obligations. 8.

Our AC reviewed management’s assessment of our Group’s prospects, including the cash flow projection and plans to meet our Group’s commitments for the 12-month period to 31 January 2018. Based on the review, which also 9. incorporated sensitivity analysis, our AC is satisfied that our Group has sufficient resources and working capital to meet its short-term obligations and accordingly, continue to adopt the going concern basis in preparing the financial statements. 78 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Audit Committee Report

5. Risk Management and Internal Control

Our Board is responsible for establishing and maintaining our Group’s systems of internal control and risk management and for reviewing their effectiveness. Our AC assisted our Board in ensuring that a robust process for identifying, evaluating and managing the significant risks faced by our Group is in place and operating effectively.

On a quarterly basis, our AC reviewed our Group risk profile with focus on the key risks identified on pages 95 to 99. In June 2016, following a review of the key risks by the AMH Risk Management Committee, a revised AMH Risk Map and mitigation strategies and accountabilities were tabled to our AC. In addition, our AC reviewed the adequacy and effectiveness of the system of internal controls based on the status report on the Key Control Checklists (“KCC”) for key business functions completed and reported by Management on a quarterly basis. The AC Chairman also met with the Head of Group Process Risk Assurance on a regular basis.

Further details on our Group’s risk management process are included in the Statement on Risk Management and Internal Control on pages 83 to 88 which was also reviewed by our AC.

6. External Auditor

During FY17, our AC assessed PwC’s performance, independence, objectivity and terms of engagement before recommending its re-appointment and remuneration.

6.1 Audit Plan

Our AC received from PwC, a detailed audit plan identifying their audit scope, approach and assessment of key audit risks. In addition, the key priorities of our Group such as content leadership, customer first, innovation and emerging technologies, business diversification and talent investment as well as developments in FY17 were also considered in determining PwC’s areas of emphasis. The audit plan was approved by our AC in September 2016.

6.2 Working with PwC

During FY17, our AC met with PwC, on two occasions, separately, without the presence of Management. These sessions allowed our AC and PwC to focus on areas that might have not have been specifically addressed as part of the audit and where PwC can provide additional, candid and confidential comments to our AC. Some of the matters discussed included PwC’s assessment of the tone at the top, ethical values and integrity of Management, quality of financial management and reporting, existence of pressure to meet aggressive financial targets and profitability expectations, cooperation from the various levels of Management as well as internal auditors, among others.

6.3 Effectiveness and Quality

Our AC reviewed the evaluation on PwC’s performance and effectiveness which was coordinated by the Company Secretary. The annual assessment which covered (i) independence, objectivity and professional scepticism; (ii) financial stability, risk profile and audit strategy; (iii) communication and interaction; (iv) audit finalisation; and (v) level of knowledge, capabilities and experience and sufficiency of resources, was conducted in April 2017 with feedback obtained from our AC, Management and CA and a self-assessment by PwC. Based on the results of the evaluation, our AC is satisfied with PwC’s performance and that they had exhibited robust challenge and scepticism throughout FY17.

In addition, our AC also reviewed PwC’s representation on its quality control procedures with respect to engagement performance which included the involvement of a quality review partner, access to PwC’s accounting technical support on complex accounting matters, periodic assurance quality review by PwC’s Global Assurance Quality Review team, internal guidance on accounting standards interpretation and application and International Standards of Auditing guidelines as well as periodic attendance of mandatory training/courses. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 79

Audit Committee Report

6.4 Audit and Non-Audit Services 1.

Our AC is cognisant that while it is important that PwC’s independent role in reporting to the shareholders is not compromised, it is equally important that our Group is not deprived of expertise as and when it is needed. Our Board has therefore adopted a Policy on the Provision of Audit and Non-Audit Services by the external auditors based on the general principle that the 2. external auditors should not perform non-audit services that may impair its objectivity and independence. In FY17, our AC conducted a further review of the said policy, with the following changes approved by our Board. 3. Engagement Fee for Non-Audit Services FY16 threshold FY17 threshold Individual engagement fee − limited to 50% of the statutory Cumulative engagement fee − limited to 70% 4. financial audit and interim review fees which was approved by of the statutory financial audit and interim the Board for the immediate preceding financial year review fees which were approved by the Board for the immediate preceding financial Cumulative engagement fee − limited to five times the individual year engagement fee which was approved by the Board for the immediate preceding financial year Any non-audit service that exceeds the above threshold will require specific pre-approval by the AC

During FY17, our Company and Group incurred approximately RM875,000 and RM1,211,000 on non-audit fees representing 63% and 42% of the total fees to PwC respectively. On a quarterly basis, our AC reviewed the analysis CORPORATE GOVERNANCE provided by PwC on the provision of audit and non-audit services including the fees incurred and remains satisfied that PwC’s independence is not impaired from the provision of the non-audit services.

6.5 Independence

Our AC reviewed PwC’s FY17 written affirmation of its independence to act as the Company’s external auditors in accordance with the relevant professional and regulatory requirements. In order to further maintain independence of the external auditors, the PwC audit partner-in-charge of our Group was rotated after five years and a new audit partner-in- charge came on board for the FY17 audit.

Our Group has also restricted the employment of former employees of PwC to ensure independence and for avoidance of any conflicts of interests. In FY17, there was no employment of any PwC employee that was reported to our AC.

Based on the above, our AC had therefore, recommended to our Board, the re-appointment of PwC for FY18 at the

forthcoming AGM in June 2017. 6.

7. Corporate Assurance 7. Our AC is supported by CA which provides independent validation on the risk management, control and governance processes of our Group. The Vice President, Group CA who heads the internal audit function, has a direct reporting line to the AC Chairman and attends the AC meetings. 8.

CA’s role is governed by the CA Charter which is reviewed annually to ensure that CA’s purpose, authority and responsibility, reflect developments in CA’s activities and in line with best practices promulgated by internal audit professional bodies. 9. 80 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Audit Committee Report

The latest CA Charter was approved by our AC in September 2016.

At the start of the year, our AC considered and approved CA’s annual review plan that included audits of business and support units across our Group, as well as assurance over live projects. On a quarterly basis, the review plan is assessed and updated on a quarterly basis taking into account changes in the business and operating environment. Changes to the review plan were communicated to our AC. There is also regular liaison among CA and other assurance functions such as our Group Process Risk Assurance department (“GPRA”) and the external auditors to monitor the risk governance framework and management processes of our Group to ensure their effectiveness.

During FY17, our AC reviewed the report findings from CA’s planned and ad-hoc reviews and the actions taken to implement the recommendations made in the reports. The planned reviews included financial, operational, technology and information systems audits across Customer, Content, Productions, Feature Film, Broadcast Operations and Information Technology Divisions as well as the Radio business and other support units within our Group. The ad-hoc reviews included among others, governance enhancement reviews related to policies and procedures, related party transactions and special reviews based on disclosures reported to the Ethics Line and other channels. All CA reports were provided to our AC.

On a quarterly basis, a summary of CA’s findings and the status of progress against previously agreed actions is tabled at the AC meetings. Members of Management were invited from time to time to provide clarification on the findings and updates on the action taken, where applicable.

The total operational costs incurred for CA for FY17 amounted to approximately RM3.9 million (FY16: RM3.4 million).

Our AC had reviewed the CA function to ensure that its activities are performed independently and with impartiality, proficiency and due professional care, including its KPIs. In respect of FY17, the review was coordinated by our Company Secretary in March 2017 with feedback sought from our AC, Management and external auditors. The areas assessed include (i) function and visibility (ii) terms of reference (iii) skills and experience (iv) communication and interaction (v) review reports (vi) reporting tools and annual review plan. Based on the results of the evaluation, our AC is satisfied with the performance of CA and noted several areas of improvements for CA to focus and address in FY18.

8. Related Party Transactions

On a quarterly basis, our AC reviewed the RPTs entered into by our Group to ensure that:

• The RPTs have been conducted on our Group’s normal commercial terms and are not to the detriment of our Group’s minority shareholders • Proper disclosures were made in accordance with the MMLR • The actual expenditure on recurrent RPTs is within the mandate approved by the shareholders

During FY17, our AC reviewed a RPT between MBNS Multimedia Technologies Sdn Bhd (“MMT”), a wholly-owned subsidiary of the Company and Maxis Berhad (“Maxis”) for the disposal of 833,334 ordinary shares of RM1.00 each in Advanced Wireless Technologies Sdn Bhd (“AWT”) representing MMT’s 25% interest in AWT for a cash consideration of RM15,833,334 and the purchase of goods and services by Maxis and/or its related corporations totalling RM3,000,000 in value from MMT and/or its related corporations (“Transaction”).

Our AC is of the view that the total consideration of RM18,833,334 from the Maxis Group is justified, notwithstanding a loss on disposal of RM12,090,821.40 based on the Company’s audited financial statements for FY16 on the following grounds: ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 81

Audit Committee Report

• the consideration is within the indicative equity value derived from an independent valuation; 1. • the divestment value of RM15,833,334 has effectively provided our Group with a return of circa 27% p.a. based on the original cost of investment of RM833,334; • it enables our Group to divest a non-core business and utilise the proceeds from the divestment for its working capital

purposes to pursue its core business strategies; and 2. • the cost of renewing the spectrum license is expected to be high and additional funding may be required from AWT’s shareholders. It is therefore commercially viable for MMT to divest prior to the expiry of the spectrum license.

Based on the above, our AC is of the view that the Transaction was carried out on normal commercial terms, at arm’s 3. length, in the best interests of our Group, on terms that were not more favourable to the related party than those generally available to the public, and would not be detrimental to the Company’s non-interested shareholders. Our Board (save for the interested Directors namely, Augustus Ralph Marshall and Lim Ghee Keong), having considered the recommendation 4. of our AC and the commercial proposition, is of the opinion that the Transaction is in the best interests of the Company and its shareholders. An announcement on this Transaction was made to Bursa Malaysia on 27 December 2016 and 30 December 2016; and the Transaction was completed on 30 December 2016.

For FY17, our AC also reviewed the 2016 Circular to Shareholders in respect of new and renewal of shareholders’ mandate for recurrent RPTs, prior to Board approval.

9. Integrity and Ethical Matters

During FY17, our AC reviewed the COBE and the online COBE learning and certification tool as well as the effectiveness CORPORATE GOVERNANCE of the programme established by Management to monitor and enforce compliance with the COBE. Further details on the effectiveness and response to the online COBE tool are provided on page 65. Our AC has also individually acknowledged and confirmed that they have read the COBE and will abide by the provisions contained therein.

Our Group has adopted the Ethics Line Procedures which was established to enable whistleblowers to raise concerns in confidence, and to ensure proportionate and independent investigation is duly conducted and follow-up action is taken and brought to the attention of our AC. During FY17, CA which manages the Ethics Line received a total of 7 ethics, conflict of interest and integrity-related disclosures which were reported by various parties including employees and external parties. On a quarterly basis, our AC reviewed CA’s report on the cases reported through the Ethics Line and other available channels as well as the status of investigation (where applicable) into these cases. For FY17, our AC is satisfied that there were no cases with significant impact to our Group.

10. Quarterly Updates

Our AC also reviewed the quarterly reports on the following areas: 6.

• Treasury which included the sources and uses of cash, analysis of working capital, compliance status of debt covenants and treasury risk management. In respect of financing options, our AC reviewed the programme for the proposed issuance of Medium Term Notes of up to RM3 billion to meet funding requirements. Our AC also reviewed 7. the refinement to the foreign exchange management policy, aimed at allowing greater flexibility to respond to market volatility for hedging purposes • Tax updates that included the status of tax filings and audits of selected entities of our Group by the Inland Revenue

Board, GST implementation and reporting, among others. Our AC also deliberated on matters of tax morality 8. and remains satisfied that our Group has adopted a responsible approach in its tax planning strategies that encompassed transfer pricing, utilisation of losses and capital allowances and tax incentives • Regulatory compliance and status of material litigations to ensure that these matters have been reflected in the financial statements, where appropriate. A summary of the material litigation, claims and arbitration is provided in 9. the notes to the financial statements on pages 258 to 266 82 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Audit Committee Report

11. Integrated and Sustainability Reporting

Our AC plays an oversight role in respect of our Group’s integrated report. Our AC considered the information disclosed in the integrated Annual Report and has assessed its consistency with operational and other information known to our AC, and for consistency with the annual financial statements. Our AC is satisfied that the sustainability information is in all material respects, reliable and consistent with the financial results and nothing has come to the attention of our AC to indicate any material deficiencies.

12. AC Charter and Evaluation

Our AC keeps its Charter under review annually and makes recommendations to our Board. The AC Charter was last approved by our Board in September 2016 and is available on the Company’s website.

The performance of our AC and the independence of the INEDs are also evaluated as part of the BEE, which was conducted by our NCGC in February 2017, as further detailed on pages 73 to 74.

13. AC Key Focus for FY18

The key priorities of our AC for FY18 are to continue focusing on:

• the integrity of our Group’s financial accounting and reporting, including the quality of earnings taking into account the challenging environment that our Group is operating in • the robustness, rigour and quality of the external and internal audit process as well as risk management • collaborations with third parties or joint ventures • content and IP creation, development of the OTT business and customer experience in line with our Group’s strategic imperatives ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 83

Statement on Risk Management and Internal Control

Board Responsibility 1.

Our Board acknowledges its responsibility for effective risk management and is supported by our AC and Group Risk

Management Committee (“GRMC”) to enforce a robust risk management framework and an effective internal control system 2. for managing business risks to an acceptable level to achieve our Group’s business objectives as well as to safeguard our Group’s assets and shareholders’ interests. The GRMC is responsible for the implementation of the sound enterprise-wide risk management and internal control framework to ensure a continuous process of identifying, evaluating, responding, monitoring

and managing risks and controls to an acceptable risk appetite as part of our Group’s daily operations and as and when there 3. are changes to the business outlook or regulatory requirements.

Our Group conducts periodic testing on the adequacy, effectiveness, efficiency and integrity of the internal controls to ensure

that the controls are effective, viable and robust, to provide reasonable assurance against material misstatement or loss and 4. in line with the requirements and guidance in the Statement of Risk Management and Internal Control: Guidelines for Directors of Listed Issuers issued by Bursa Securities.

Our Board has also obtained assurance from our GCEO, GCFO and GFC that our Group’s risk management and internal control systems are operating adequately and effectively for FY17. Our Group has summarised the overview of the internal control assessment into four key components:

1. Risk Management

Our Board continues to affirm their commitment to ensure adequate stewardship and culture for implementation of effective risk management principles at a holistic level through the implementation of our Group Risk Management CORPORATE GOVERNANCE (“GRM”) Framework as depicted below.

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Operational 9. • Best-in-Class Consumer Experience • Digitalisation to Future Proof Business • Content Leadership • Driving E-commerce and Adex Staff • NJOI Monetisation • Sustainable Growth • Standalone OTT • Talent Development 84 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Risk Management and Internal Control

The GRM Framework is embedded within our Group’s strategic planning activities, operational processes, and project management. The GRM Framework is established based on the Committee of Sponsoring Organisation (“COSO”) Enterprise Risk Management Framework which sets out the risk management governance, infrastructure, processes and control responsibilities and underpins our Group Risk Management Policy. The GRM Framework is reviewed annually and published on Astro’s internal portal. For effective and consistent adoption of risk management across our Group, the framework provides guidance for a systematic approach to identify, assess, respond, monitor and report risks to the senior leadership for remedial action.

Our Board, through our AC, is assisted by the GRMC which is chaired by our GCEO and comprises senior leadership from various business units. The function of the GRMC is to drive effective risk management through continuous review of GRM Framework to ensure effective identification of emerging risks and management of identified risks through implementation of appropriate controls and risk mitigation strategies while being cognisant of the business outlook, opportunities and financial sustainability.

The GRMC works closely with the GPRA department to ensure effective and consistent adoption of risk management practices. Risk champions are appointed by Heads of Business Units/Segments to review and update their respective business risk profiles on a quarterly basis. The periodic review and update of the risk profiles include the identification of emerging risks arising from changing business outlook and/or new initiatives being implemented as well as evaluation of the effectiveness of existing controls and risk management initiatives.

The GRMC also maintains a consolidated Group risk profile with the assistance from GPRA (as detailed in the Risk Factors section on pages 95 to 99 of this report) and our Group risk profile is presented and deliberated by the GRMC and AC on a quarterly basis to ensure that the overall risks impacting our Group are adequately identified and managed within an acceptable risk appetite. Some of the key strategic risk matters deliberated by the GRMC and AC for the financial year include competition risk due to crowded OTT and e-commerce market landscape, business sustainability risk due to content piracy, forex volatility and soft consumer sentiments and cyber security risk as our Group continues to embark on digitalising the business. As part of our Board’s efforts to ensure risk management processes are adequate and effective, the strategic and operational risk mitigating controls are validated by CA as part of its review plan and areas for improvement are highlighted and implemented by the relevant business units accordingly.

Our Board and Management inculcate a proactive and sustainable risk management culture by ensuring that all employees have a good understanding of effective governance principles and risk management practices with classroom briefings and annual online compliance training.

2. Control Environment and Activities

A robust and effective check and balance control environment within our Group is fundamental for ensuring a sound internal control system. Our Board and Management have demonstrated their commitment in maintaining an effective internal control environment through continuous enhancement to the design of internal control systems to ensure controls are relevant, effective and robust to promote operational agility while ensuring corporate governance and compliance to regulatory guidelines. The following sets out the components of our Group’s key control environment established for maintaining strong corporate governance:

2.1 Board and Management

The roles and responsibilities as well as the authority and lines of accountability of our Board and Management have been clearly defined in our Group’s organisational structure as set out on page 4 of this report. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 85

Statement on Risk Management and Internal Control

2.2 Audit Committee and Corporate Assurance 1.

Our AC assists our Board in fulfilling the Board’s responsibilities with respect to oversight, focusing on the integrity of our Group’s financial reporting process, management of governance, risks, internal control systems, external and internal audit processes, compliance with legal and regulatory matters as well as the code of business conduct. CA 2. assists our AC by providing independent validation on the risk management, control and governance processes of our Group. The roles and responsibilities of our AC and CA functions are set out in the AC Report on pages 75 to 82 of this report. 3.

2.3 Regulatory and Industry Affairs, Legal and Corporate Secretarial

The Regulatory and Industry Affairs (“Regulatory”) department monitors compliance in line with the Communications 4. and Multimedia Act 1998 as well as other laws, rules, regulations, and policies which govern our Group’s businesses. The department consistently engages with internal and external stakeholders, including the Malaysian Communications and Multimedia Commission (“MCMC”) to preserve a conducive regulatory environment for our Group to ensure efficient and undisrupted business operations. Additionally, the Regulatory department also manages matters relating to the Group’s IP including undertaking proactive measures and providing assistance in enforcement actions.

The Legal department plays a pivotal role in advising our Board and Management on legal matters to preserve and safeguard our Group’s interests from a legal standpoint. Our Board is briefed on material litigations and its development on a quarterly basis. CORPORATE GOVERNANCE The roles and responsibilities of our Company Secretary are set out in the Corporate Governance Statement on page 67 of this report.

2.4 Revenue Assurance

Revenue Assurance (“RA”) is a function responsible for providing assurance (i.e. completeness, accuracy and integrity) on the recording and reporting of Pay-TV revenue producing events. The RA review covers the Pay-TV functions of customer acquisition, product and service delivery, customer service, billing, payment and collection management.

A RA framework is in place to provide guidance to ensure a consistent and structured review approach to identify key revenue leakage indicators and data discrepancies, as well as propose and implement corrective action plans jointly with business units.

In addition, the RA department also prepares the monthly RA dashboard for senior leadership on identified Pay-TV revenue issues as well as the extent of identified revenue leakages. The monthly dashboard is also reviewed by the 6. external auditors and CA as part of their annual audit.

2.5 Procurement 7.

Procurement is a function responsible for ensuring our Group’s acquisition activities are made transparently and in the best interest of our Group. The procurement process is governed by the Acquisition Framework and the

Procurement Manual, which are reviewed by the external auditors and CA as part of their annual audit. 8.

In addition, our Tender Committees are responsible to provide governance, guidance and direction on our Group’s acquisition strategies. The Tender Committees are aided by the Procurement department for the administration of the tender process and our Company Secretarial team for convening and recording the Minutes of the Tender 9. Committees. 86 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Risk Management and Internal Control

2.6 Systems, Data and Information Security

The IT Security and Assurance department is responsible for continuously monitoring and resolving both internal and external security threats to our Group. This includes conducting security awareness initiatives, compliance audits on our Group’s IT networks and systems and vulnerability assessments to mitigate the impact of security attacks, negligence and malware.

The AMH Security Framework is established to proactively manage current and potential security threats to our Group’s data and content arising from physical and logical access. In addition, the IT Security and Assurance department continuously updates its cyber security controls through periodic alignment of new cyber threats by maintaining compliance with industry security standards such as the Information Security Management System ISO/IEC 27001:2013[1], Payment Card Industry Data Security Standard and the Personal Data Protection Act 2010 and benchmarking of its security programmes with industry best practices and external cyber security subject matter experts.

2.7 Business Continuity Management

Business Continuity Management aims to minimise the impact of business disruption through building resilient capabilities for effective response to threats and disruptions. This includes establishing service delivery infrastructure redundancies and alternate sites to minimise service disruption on the occurrence of a disrupting event, as well as minimising the impact of financial losses from a disruption through insurance coverage.

Formal recovery plans are established and continuously reviewed, maintained and tested. These activities have been conducted to ensure the availability and effectiveness of Business Continuity Planning (“BCP”) in achieving timely recovery of services while prioritising staff safety. During FY17, our Group’s BCP maintenance activities have been successfully conducted, including quarterly call tree and walkthrough tests, bi-annual BCP manual review, as well as annual simulation of critical systems and operations. The results of the BCP maintenance activities are reported to our AC on a quarterly basis.

2.8 Key Controls Checklist

As part of cultivating an effective internal control environment, the Key Controls Checklist (“KCC”) is established to facilitate control self-assessment by the Heads of Departments on a quarterly basis to ensure internal controls (i.e. both system and manual controls) are effective and complied with. Where control weaknesses are identified, manual controls are implemented to mitigate any risks thereof. The endorsed KCC is subsequently verified by GPRA and reported on a quarterly basis to our AC. The KCC is also validated by CA and the external auditors to ensure that Management’s assertions that the controls are operating effectively are appropriate.

2.9 Limits of Authority

The LOA stipulates the decision-making authority of key personnel to enhance operational agility. The LOA delegation process is as set out in the Statement on Corporate Governance on page 57 of this report.

Any amount in excess of the Board-delegated GCEO’s LOA will require our Board’s approval. These limits are reviewed regularly and approved by the Management and/or our Board in accordance to their LOA, in line with changes in business, structural and operational perspective.

2.10 Strategic Business Budgeting and Reporting

Our Group is guided by a five-year strategic plan outlining key objectives and strategic priorities which is reviewed annually to ensure consistent revenue performance and optimisation of operating cost for sustainable business growth. Our Group strategic plan and corresponding annual budget for FY17 were duly approved by our Board prior to the commencement of the said financial year. On a quarterly basis, the financial and operational reports are provided to our AC and Board. Our Group releases quarterly unaudited financial results and annual Audited Financial Statements to Bursa Malaysia and the public, including analysts and investors.

Note:

[1] ISO/IEC 27001:2013 specifies the requirements for establishing, implementing, operating, monitoring, reviewing, maintaining and improving a documented Information Security Management System within the context of an organisation’s overall business risks. It also specifies requirements for the implementation of security controls customised to the needs of the organisations. ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017 87

Statement on Risk Management and Internal Control

2.11 Staff Performance System 1.

Our Group has a competency framework that is guided by our Group’s corporate core values which outlines the knowledge, skills, abilities and behaviour expectations of its employees. The Human Capital (“HC”) division

has launched an individual development plan for functional competency to upskill and reskill employees which 2. serves to manage employees’ career paths and build a pipeline of talent for succession planning. In order to drive and sustain a high-performing workforce, on an annual basis, employees’ achievements are appraised under our Group’s Total Performance Management System (i.e. Balanced Scorecard Reporting). 3.

3. Information and Communication

Our Board continuously emphasises communication with all employees in carrying out their internal control responsibilities 4. in line with the achievement of our Group’s business objectives and has taken the following steps to enable consistent sharing of relevant information.

3.1 Formal Policies and Procedures

Our Group has in place clear and formalised GRM Framework, as indicated on pages 83 to 84. In addition, our Group has established operating policies and procedures which comply with relevant laws and regulations. These policies and procedures ensure that processes adequately mitigate risks with appropriate internal controls. Regular reviews are conducted to ensure that risk profiles, policies, and procedures are updated to align with new risk management action plans to address emerging risks and identified control gaps. During FY17, our Group has enhanced and simplified its operational process relating to e-commerce supply chain management, vendor CORPORATE GOVERNANCE screening and engagement process, and content production service management. In addition, our Group policies are published and updated on Astro’s internal portal for easy access by employees.

3.2 Code of Business Ethics

As indicated on page 65, the COBE is a key policy that governs the way our Group through our Board, Management and employees conduct their dealings with all stakeholders. It is also designed to reduce, if not eradicate any corrupt practices and bribery. Our employees are advised not to engage in any fraudulent activities, bribery, kickbacks, gratuity or favourable terms or treatment.

Furthermore, the COBE regulates the acceptance of gifts, complimentary services, entertainment, or gratuities with the equivalent value not exceeding RM250. Stern disciplinary action will be taken against employees who have breached the COBE.

3.3 Fraud Management and Whistleblowing 6. As part of our Group’s commitment and continuous efforts to strengthen corporate governance, all employees are guided by the principles and guidelines established in COBE and the Fraud Management Framework. The Fraud Management Framework provides guidance on establishing a fraud management control environment to enhance integrity and reduce the probability of fraud, as well as to assist employees in decision-making with regards to the 7. identification and reporting of fraud, misconduct and other non-compliances affecting our Group.

The Ethics Line Procedures is established for employees to raise their concerns (“Disclosures”) on any suspected 8. violations to our Group’s values and principles without the fear of reprisal. Whistleblowers are encouraged to disclose their names to facilitate investigation and to ensure Disclosures are made in good faith. Whistleblowers’ identities are protected in confidence to the extent reasonably practicable unless the whistleblower agrees

otherwise. The Ethics Line is managed by CA who also assumes primary responsibility for the investigation and 9. reporting of Disclosures. All Disclosures received via the Ethics Line, investigation findings and recommendations are reported to our AC and GCEO on a quarterly basis or more frequently, where necessary. 88 ASTRO MALAYSIA HOLDINGS BERHAD ANNUAL REPORT 2017

Statement on Risk Management and Internal Control

4. Monitoring Activities

In the year under review, the following monitoring activities were undertaken to provide assurance on the effectiveness of risk management and internal controls:

(a) Our Board through our AC has reviewed the risk management updates as well as the progress of compliance status of the BCP and KCC on a quarterly basis.

(b) Our GCEO, GCFO and GFC have provided the Management Representation in relation to the adequacy of our Group’s risk management and internal control systems in all material aspects. Any exceptions identified during the assessment period have been highlighted to our Board.

(c) Our AC has reviewed the process and compliance exceptions identified by CA and external auditors on a quarterly basis. The implementation of both CA and the external auditors’ recommendations is tracked and reported to the AC on a quarterly basis.

(d) The Disciplinary Committee chaired by the Senior Vice President of HC reviews matters pertaining to staff disciplinary cases arising from all types of misconduct. The Disciplinary Committee ensures that all raised concerns and allegations are duly investigated, monitored and consistently deliberated.

Management has taken the necessary actions to remediate weaknesses identified for the year under review. Our Board and senior leadership continuously assess the effectiveness of monitoring activities over risks and take measures to strengthen our risk management and internal control environment.

5. Conclusion

As required by paragraph 15.23 of the MMLR, the external auditors, PwC has reviewed this Statement on Risk Management and Internal Control. Their review was performed in accordance with Recommended Practice Guide (“RPG”) 5 (Revised) issued by the Malaysian Institute of Accountants which does not require the external auditors to form an opinion on the adequacy and effectiveness of the risk management and internal control systems of our Group. Based on the procedures performed, nothing had come to their attention that caused the external auditors to believe that the Statement on Risk Management and Internal Control set out above was not prepared, in all material respects, in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers, nor was factually inaccurate.

Our Board is of the view that the risk management, governance and internal control practices and processes which have been adopted for the year under review and up to the date of issuance of financial statements are sound and adequate to safeguard the interest of shareholders, stakeholders, customers, regulators, employees and our Group’s assets.

No material losses, contingencies or uncertainties have arisen from any inadequacy or failure of our Group’s internal controls that would require separate disclosures in this Report.