GO A simple word that encapsulates our vision. To spur diversity and growth. To innovate fluidly in tune with consumer trends. Challenging conventions all the way. To go the distance, the extra mile, and the great beyond. CONTENT Introduction 3 Facts at a Glance 4 Our Company Highlights 8 Chairman’s Statement 12 CEO’s Statement 16 Operational and Financial Highlights 18 Segmental Analysis and Quarterly Financial Performance 19 Simplified Group Statement of Financial Position Business 20 Statement of Value Added 21 Key Milestones Overview 76 Television 22 Event Highlights 84 Radio 24 Corporate Information 88 Digital Publications 25 Corporate Structure 90 Digital 26 Organisational Structure 92 Human Capital 27 Financial Calendar 100 Corporate Responsibility 28 Investor Relations 30 Awards Financial Statements Leadership 108 Financial Statements 34 Board of Directors 40 Senior Leadership Other Information Corporate 213 Analysis of Shareholdings Governance 218 List of Properties Held 48 Statement on Corporate Governance 219 Recurrent Related Party Transactions 63 Audit Committee Report 232 Additional Disclosures 67 Statement on Risk Management and Internal Control 236 Glossary 72 Risk Factors 74 Directors’ Responsibility Statement Annual General Meeting Note: We would like to highlight that Astro Malaysia Holdings Berhad has a 241 Notice of Annual General Meeting financial year ending 31 January. For simplicity, we denote financial year ended 31 January 2014 as “2013” and financial year ended 31 January 246 Statement Accompanying Notice of Annual General Meeting 2013 as “2012” throughout the Annual Report. • Proxy Form facTS AT A GLANCE TV Financial Year Ended 31 January Astro household penetration Pay-TV households 3.276 3.442 52% 56% million million 2013 2014 2013 2014 NJOI households ARPU 0.209 0.442 RM RM million million 93.2 96.0 2013 2014 2013 2014 Share of viewership Share of TV adex 43% 47% 28% 31% 2013 2014 2013 2014 Radio Financial Year Ended 31 January Listenership Share of radex 12.344 12.193 million million 53% 54% 2013 2014 2013 2014 Advertising Income Financial Year Ended 31 January Advertising Income 504 582 million million 2013 2014 3 OUR COMPANY Astro Malaysia Holdings Berhad is a leading integrated consumer media entertainment group in Malaysia and Southeast Asia, focusing on the Watch, Listen, Read and Play content spaces. Through our DTH satellite TV, IPTV and OTT platforms, we offer 171 TV channels, including 68 Astro-created and branded channels and 39 HD channels, to our 3.9 million customers, constituting 56% of Malaysian TV households. We provide HD, 3D, PVR, VOD, catch-up TV and IPTV services through Astro B.yond and AOTG, whilst our non-subscription based NJOI service continues to bridge the digital divide in Malaysia, offering 22 TV and 20 radio channels. In addition to aggregating the best of international programming, we also create valuable content IPs and award-winning shows, catering to the multi-cultural and multi-lingual communities in Malaysia. We produce over 9,000 hours of content annually across a whole spectrum of genres, which are distributed on our platforms, as well as licensed to both domestic and regional platforms. 4 OUR COMPANY Astro Radio has within its stable Malaysia’s highest rated stations across all key We produce over languages, reaching over 12 million weekly listeners and 3 million unique visitors per month over its terrestrial stations and digital streaming services respectively. We also 9,000 hours of publish entertainment and lifestyle magazines in both print and digital forms, and manage popular websites that complement our content offerings. Our apps, such as content annually Astro GO Play and Astro View, continue to scale new heights in terms of reach and across a whole engagement. spectrum of Astro holds the distinction of the “Gold” award in the Media and Entertainment category genres, which at the Putra Brand Awards for five consecutive years from 2010 to 2014 and being the Brand of the Year in 2012, Brand Icon in 2013; three Stevie® Awards at the 2014 are distributed International Business Awards, and the Most Admired Enterprise for the Corporate Responsibility (Large Company) category at the 2013 ASEAN Business Awards. These on our platforms, awards are in recognition of Astro’s strong customer proposition, market leadership as well as and firm dedication to its corporate responsibilities. licensed to both domestic and regional platforms 171 68 39 20 3.9 TV Astro HD radio million channels channels channels channels customers 5 Kem Badminton With Kem Badminton Astro, we hope to sow the seeds to produce the next generation of Olympic medalists. Thousands of boys and girls across of the nation have participated in try-out sessions. The outstanding talent were sent to train with the national coaches in Japan. Their performances were inspiring and encourage us to continue to identify and nurture young Malaysian talent. 6 7 CHAIRMAn’S STATEMENT Dear Shareholders, The media industry in Malaysia continues to be dynamic and vibrant. This is driven by consumer demand for engaging content and best-in-class customer experiences across all screens, anywhere, anytime. Additionally, our relatively young population are some of the most prolific users of social media globally; requiring increasingly sophisticated interactivity, seamless interfaces, as well as search and recommendation tools. At Astro, we recognise that key to our success as a market leader is our ability to remain a deserving content creator, producer, aggregator and distributor of choice. 8 CHAIRMAn’S STATEMENT TUN DATO’ SeRI ZAKI BIN TUN AZMI INDEPENDENT NON-EXECUTIVE CHAIRMAN As Malaysia’s leading integrated ENHANCING SHAREHOLDER VALUE consumer media Astro continues to position itself to deliver capital appreciation and progressive cash dividend payments to its shareholders. Since our listing in October 2012, we have company, we are rewarded our shareholders with dividends totalling over RM675 million. committed to In 2013, we paid four quarterly interim dividends of 2.0 sen per share, thereby increasing the payout by 33% compared to the previous year. The Board of Directors is also pleased playing our part to recommend a final dividend of 1.0 sen per share at the forthcoming Annual General Meeting, bringing the total dividend to 9.0 sen per share for the year, representing a in developing payout of 104% of after tax profits. Malaysia’s media With the conclusion of our reinvestment strategy and new transponder capacity coming industry and its on stream, we are poised for further growth and coupled with a highly cash generative business, we remain confident that shareholders will be rewarded appropriately. talent pool 9 CHAIRMAn’S STATEMENT OUR ROLE ASTRO IN THE COMMUNITY As the leading integrated consumer media company, we are committed to playing our I am proud, yet humbled, by the work part in developing Malaysia’s media industry and its talent pool. that Astro does for the wider community. This year, more than 2,400 Astro talent Leveraging on our nationwide coverage, we are well positioned to complement our pay- contributed over 21,000 hours of their TV offering with NJOI, our choice of subscription-free TV to all Malaysians, even those time on various community projects under located in the remotest parts of the country. Our NJOI penetration presently reaches our employee volunteer programme, over 6% of Malaysian households and includes 28,000 homes as part of our CSR efforts Astro Kasih; covering our four focus to provide this service to underprivileged communities. We would like to thank eKasih, areas of Lifelong Learning, Sports and the centralised Malaysian poverty databank, and the Malaysian Communications and Wellness, Community Development, and Multimedia Commission for this initiative. the Environment. Our efforts have been recognised with several awards in 2013 During the year, we produced and commissioned over 9,000 hours of local content, including the CNBC’s Asia Business collaborated with more than 13,500 small and medium enterprises, provided advertising Leader Award for Corporate Social opportunities for more than 2,000 corporations, made available entertainment solutions Responsibility and the ASEAN Business to more than 22,000 commercial establishments, and generated over RM60 million of Awards’ Most Admired Enterprise for the incremental revenue for the local movie industry. We believe that all our activities result in Corporate Responsibility (Large Company) a positive impact on the Malaysian economy. category. Our role extends to working closely with the various Government ministries and regulatory Kampus Astro, our holistic education bodies, especially the Ministry of Communication and Multimedia, the Malaysian proposition, adopts a 360° approach Communications and Multimedia Commission, the Ministry of Domestic Trade and and aims to offer world-class learning Consumer Affairs, the Royal Malaysian Customs, as well as the Royal Malaysia Police. In information and experiences on air, on particular, there are active collaborations to address content piracy, which is increasingly ground and online. We have executed shifting online; as we see that the protection of content intellectual property is a prerequisite several initiatives across all our platforms; for the country to have a thriving and sustainable media industry. including more than 700 hours of learning television programmes which are now supplementing the lesson plans of 400,000 teachers to assist almost 5.3 million students in their academic endeavours. Under our Astro Hostel programme, we have three hostels in remote parts of Sabah and Sarawak to provide a safe and conducive learning environment to hundreds of young boys and girls, who would otherwise have had to walk for hours to and from school each day. It is greatly encouraging to note that together with educational workshops that are run, the students at these schools have since recorded significant year on year improvements in the 2013 national examinations with one school actually having climbed up the ranks to become the top school in its district.