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 MALAYSIA MALAYSIA HOLDINGS HOLDINGS BERHAD BERHAD 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