annual report 2013 Astro Malaysia Holdings Berhad Astro (932533-V) ASTRO MALAYSIA HOLDINGS BERHAD (932533-V) 2013 annual report All Asia Broadcast Centre, Technology Park Malaysia Lebuhraya Puchong-Sungai Besi, Bukit Jalil, 57000 Kuala Lumpur, Malaysia Tel : +603 9543 6688 Fax : +603 9543 6877 www.astro.com.my / www.astromalaysia.com.my Go Beyond. Two simple words that are perhaps the most challenging to act upon. It’s all about going that extra mile, climbing that other mountain. Embrace the spirit and realise the true potential of life. INTRODUCTION BUSINESS OVERVIEW Facts at a Glance ............................................................................................ 2 Our Consumers ............................................................................................... 68 Our Company ..................................................................................................... 3 Television ........................................................................................................... 72 Radio .................................................................................................................... 82 Publications ...................................................................................................... 86 HIGHLIGHTS Digital .................................................................................................................. 88 Chairman’s Statement .....................................................................................6 Human Capital ............................................................................................... 90 CEO’s Statement ........................................................................................... 12 Corporate Responsibility ............................................................................ 98 Operational & Financial Highlights ..................................................... 20 Segmental Analysis & Quarterly Financial Performance ......... 22 Simplified Group Statement of Financial Position ...................... 23 FINANCIAL STATEMENTS Statement of Value Added ...................................................................... 24 Financial Statements ............................................................................... 105 Our Journey ...................................................................................................... 25 Event Highlights ............................................................................................. 26 Corporate Information ............................................................................... 28 OTHER INFORMATION Corporate Structure ..................................................................................... 29 Analysis of Shareholdings ..................................................................... 226 Organisational Structure ........................................................................... 30 List of Properties Held ............................................................................. 231 Financial Calendar ........................................................................................ 31 Recurrent Related Party Transactions ............................................. 232 Investor Relations ......................................................................................... 32 Additional Disclosures .............................................................................. 242 Awards ................................................................................................................ 34 Glossary ........................................................................................................... 246 LEADERSHIP ANNUAL GENERAL MEETING Board of Directors ........................................................................................ 36 Notice of Annual General Meeting .................................................. 249 Senior Leadership .......................................................................................... 42 Statement Accompanying Notice of Annual General Meeting ..................................................................... 253 CORPORATE GOVERNANCE • Proxy Form Statement on Corporate Governance ................................................ 48 Statement on Risk Management and Internal Control .......................................................................................... 55 Risk Factors ...................................................................................................... 59 Audit Committee Report ........................................................................... 61 Directors’ Responsibility Statement ..................................................... 65 Note: We would like to highlight that Astro Malaysia Holdings Berhad has a financial year ending 31 January. For simplicity, we denote financial year ended 31 January 2013 as “2012” and financial year ended 31 January 2012 as “2011” throughout the Annual Report. F ACTS at A GLANCE FINANCIAL YEAR ENDED 31 JANUARY 2013 2012 TV TV household penetration 52% 47% Pay-TV households 3.276m 3.067m NJOI households 0.209m N/A ARPU RM93.2 RM89.0 Viewership share 44% 41% Radio Listenership 12.340m 11.652m Share of radex 53% 53% Total advertising revenue RM503m RM461m ASTRO MALAYSIA HOLDINGS BERHAD 3 annual report 2013 OUR COMPANY ABOUT ASTRO MALAYSIA HOLDINGS BERHAD Astro Malaysia Holdings Berhad is a leading integrated consumer produce close to 9,000 hours of content annually in multiple media entertainment group in Malaysia and Southeast Asia with genres, creating strong vernacular content IPs and iconic brands, operations in 4 key areas of business, namely pay-TV, Radio, which are dominating the comedy, Islamic, edu-tainment and Publications and Digital Media. Hokkien content space. With a customer base of over 3.5 million residential customers Astro Radio includes Malaysia’s highest rated stations across or approximately 52% penetration of Malaysian TV households, key languages and is available on both terrestrial and digital Astro offers 170 TV channels, including 71 Astro-created and channels, reaching approximately 12.3 million weekly listeners branded channels, and over 30 HD channels, delivered via DTH and capturing a 51% share of listenership in Malaysia. Astro also satellite TV, IPTV and OTT platforms. Astro provides HD, 3D, publishes entertainment and lifestyle magazines and its digital PVR, VOD and IPTV services through Astro B.yond and Astro arm is involved in digital publishing, applications and platforms. On-The-Go. Fulfilling its promise to bridge the digital divide for all of Malaysia, Astro has introduced NJOI as the country’s first Astro holds the distinction of the “Gold” award in the Media non-subscription based satellite TV service, offering 19 TV and 20 and Entertainment category at the Putra Brand Awards for 4 radio channels. consecutive years from 2010 to 2013, including the “Brand of the Year” award in 2012 and the “Brand Icon” award in 2013. Astro has developed strong in-house production capabilities. These awards are in recognition of Astro’s efforts to exemplify We are the leading producer of vernacular content catering to innovation, quality and strong corporate responsibilities. the multi-ethic and multi-lingual communities in Malaysia. We Mudin hails from a remote village outside Kota Marudu, Sabah. He works as a janitor in SK Magandai, site of the first Astro Hostel project. His daughter, Irene, became the top student in her year at the same school. GOBEYOND TRUST CHAIRMAN’S STATEMENT highlights 6 Dear Shareholders, It is my pleasure and privilege to present the inaugural Annual Report of Astro Malaysia Holdings Berhad for the financial year ended 31 January 2013. We have achieved many outstanding coupled with our highly cash generative milestones this year and reaffirmed our business, we are well positioned to adopt status as the leading integrated consumer a progressive dividend policy going media entertainment group in Malaysia. forward. Strong Results & Dividends Successful IPO Astro delivered a strong performance in A significant milestone in the history of the 2012 where our total revenue grew 10% to company was achieved on 19 October RM4.3 billion. We achieved customer 2012 as we witnessed the successful growth of 418,000, increasing our total completion of our IPO and the admission of customer base to 3.5 million and overall our shares to the Official List of the Main TV household penetration rate to 52%. Market of the Bursa Securities. The IPO Our ARPU increased to RM93.20, an uplift received strong demand from the investing of over RM4 from 2011, underpinned by community, both locally and outside the high take-up of our value-added Malaysia. Our public portion under the products and services. We also achieved retail offering was more than 6 times over- 9% adex growth which surpassed the subscribed, and the institutional portion, industry growth rate. excluding the MITI offering and cornerstone allocation, was over-subscribed by more We reiterated our commitment to deliver than 30 times. The total proceeds from the total returns to our shareholders when we IPO were approximately RM4.5 billion, of started paying quarterly dividends in the which the amount raised by Astro was third quarter of 2012, two quarters earlier approximately RM1.4 billion. Such an than what was articulated during the IPO overwhelming response is a clear reflection process. The Board of Directors is also of