ASTRO ALL ASIA NETWORKS plc

Transcription

Annual Report 2008
Kampung Boy is a much-loved icon of a time in Malaysia when the village (or kampung)
was a haven of interesting characters and life was about discovering the wonders of nature.
Kampung Boy has endeared itself to generations with its inimitable take on Malaysian life
– its quirks, its charms and its colour. ASTRO first worked with the creator of Kampung Boy,
Dato’ Mohd Nor Khalid (popularly known as Lat) in 1996 to produce 27 episodes
of the animated series. Derived from Lat’s comic strips, Kampung Boy was one of ASTRO’s
first efforts at local content production. We are proud to collaborate with Lat again
for our FY2008 annual report - in celebration of the thousands of hours of local content
we produce each year.
Inside
Our Strategy & Our Strengths 1 Letter from the Chairman 2
Awards and Accolades 5 Calendar Highlights 6 Performance at a Glance 8
Board of Directors 10 Board of Directors’ Profiles 12 Group Management 14
Business and Financial Review 16 Risk Factors 23 Television 24 Radio 30
Content 32 Corporate Responsibility 36 Corporate Governance Statement 41
Audit Committee Report 46 Statement on Internal Control 48
Directors’ Report and Audited Statutory Financial Statements 50 Additional Disclosures 126
Share Price Performance 136 Financial Calendar 136 Analysis of Shareholdings 137
Corporate Information 143 Notice of Annual General Meeting 144
Statement Accompanying Notice of Fifth Annual General Meeting 146
• Form of Proxy • Regional Offices
A ST R O A L L A S I A N E T W O R KS p l c
1
ASTRO ALL ASIA NETWORKS plc (ASTRO) is the holding company for MEASAT Broadcast Network Systems Sdn Bhd (MBNS), the sole operator of directto-home satellite pay television services in Malaysia under the “Astro” brand, and Airtime Management & Programming Sdn Bhd (AMP), the leading
commercial radio broadcaster in Malaysia. Celestial Pictures Ltd, a subsidiary of ASTRO in Hong Kong, owns and distributes the world’s largest Chinese
film library as well as operates the Celestial Movies Channel. Astro Entertainment Sdn Bhd (AESB), another ASTRO subsidiary, creates Bahasa Malaysia
and Bahasa Indonesia content for distribution primarily to Malaysian and Indonesian markets. ASTRO also has investments in pay television and radio
broadcasting in India. ASTRO, which is listed on Bursa Securities, operates out of the All Asia Broadcast Centre, a fully-integrated digital broadcast and
production complex in Kuala Lumpur.
Our Strengths
Our Strategy
• Industry-leading business units with strong brand presence in TV, radio and content
• To continue to grow aggressively our core Malaysian businesses
• Extensive geographical reach to customers under MEASAT-3 footprint
• To move effectively up the value chain by establishing quality production of local content
• Exclusive rights for direct-to-home satellite TV in Malaysia till 2017
• Well-established pay-TV operations under the “Astro” brand with penetration of 40% of
Malaysian TV homes as at end-January 2008
• State-of-the-art infrastructure - fully-digitalised, integrated production
and extending the range and diversity of Astro channels
• To use the strong cash-flows of our core business to improve returns to shareholders by
increasing dividends
• To also use our cash-flows to expand overseas in markets where our expertise is
and broadcast facility at the All Asia Broadcast Centre, backed by second broadcast
relevant and where there is the opportunity to amortise our content costs over a larger
facility at Cyberjaya
geographical spread and population and hence further improve shareholder returns in
• Proven expertise and experience in catering to multi-ethnic, multi-cultural audience
• Long-standing, extensive partnerships with global content producers
and channel owners
• Strong balance sheet, highly cash-generative business enables the Group to continually
invest in customers and content, refresh its technology and infrastructure, and lead the
industry and market through innovative products and services.
the long term.
2
Letter from the
It is my pleasure and privilege to present the 2008 Annual Report
for ASTRO.
We recognize that it has been a difficult year for shareholders as ASTRO
has underperformed equity markets. However, we believe we have
made good progress with our key strategic objectives:•
•
•
•
To continue to grow aggressively our core Malaysian businesses
To move effectively up the value chain by establishing quality
production of local content and extending the range and diversity
of Astro channels
To use the strong cash-flows of our core business to improve
returns to shareholders by increasing dividends
To also use our cash-flows to expand overseas in markets where
our expertise is relevant and where there is the opportunity to
amortise our content costs over a larger geographical spread and
population and hence further improve shareholder returns in the
long term.
OVERSEAS DEVELOPMENT
Our Malaysian operations provide the building blocks with which we
have expanded overseas. Notwithstanding some initial setbacks and
delays, the Group is developing opportunities in high-growth markets.
A number of proposed regional investments were completed in the
past year including our investment in 20% of Sun Direct which operates
an Indian satellite direct-to-home pay-television business. The joint
venture with promoters of the Sun Group, one of the largest media
and entertainment groups in India, has to date signed on over 500,000
subscribers.
In Indonesia, it was a major disappointment for the Board and
management that we were unable to resolve the shareholder issues
that prevented us from completing the joint-venture investment in PT
Direct Vision as originally contemplated. Nevertheless, we continue to
believe in the market potential for pay-TV in Indonesia and we therefore
continue to pursue resolution of the shareholder issues so that we can
concentrate on developing the business.
THE CORE BUSINESS
The Malaysian operations generated strong profits and cash-flows in
the year to 31 January 2008. We achieved record gross new customers
of 472,000, low levels of churn of 10.1% and ended the year with 2.27
million household subscribers. The radio operation retained its lead
in the industry, with a clear edge in terms of its share of advertising
revenue and number of listeners. Competition in the radio industry
is, and will remain, strong in future, but we intend to stay ahead by
focusing on our content and quality of service.
THE CONTENT BUSINESS
Our TV business now offers 110 multi-lingual, multi-genre channels for
customers of all ages and viewing preference. Twenty-seven of these
are Astro-branded or affiliated channels, many of them replete with inhouse generated content. At the same time, we have made inroads
overseas in terms of exporting our channels and creating new local
content in these markets. These initiatives will accelerate in future.
DIVIDENDS
The Board is confident that the strong profits and cash-flows generated
by the domestic TV and radio operations are sustainable, and will
continue to grow. After taking into account the funding requirements for
existing and new businesses as well as the cash position of the Group,
the Board has thus proposed a final tax-exempt dividend of 2 sen per
share. Including the earlier tax-exempt first dividend of 2 sen, a second
dividend of 3 sen, and a third interim dividend, comprising 2.7 sen less
25% Malaysian income tax and 0.3 sen tax-exempt, the total declared
and proposed dividend for FY2008 is 10 sen, representing a payout
ratio of 61% of the earnings of the existing operations.
3
Chairman
The Malaysian operations generated
strong profits and cash-flows in the
year to 31 January 2008. We achieved
record gross new customers of
472,000, low levels of churn of 10.1%
and ended the year with 2.27 million
household subscribers.
4
LETTER FROM THE CHAIRMAN
RISK MANAGEMENT
OUTLOOK
There is no doubt, given the size, complexity and continuing expansion
of our businesses that risk management is a key objective and focus for
the Group. Following establishment of the Enterprise Risk Management
(ERM) framework in 2006, the ERM process has since been rolled out
and embedded in the Group’s business and planning process. Futureproofing of our infrastructure continues with the ongoing refreshing
of the infrastructure at the existing All Asia Broadcast Centre in Kuala
Lumpur following the completion of our second broadcast facility at
Cyberjaya. These initiatives and continuing re-investments in all our
business units, with a focus on content development and the enhancing
of our capabilities to better understand and serve our customers, will
underpin the long-term growth of our Malaysian operations.
Whilst we have been able to benefit from the positive macro environment
previously, the continuing global economic uncertainties arising from the
U.S. sub-prime loans debacle early this year, and inflationary pressures
brought on by rising commodity prices, may weigh heavily on consumer
sentiment and demand. Within the media industry, competition has
intensified in all the markets and territories we operate in. We remain
positive, nonetheless. The growing population in Malaysia and in the
region, along with the insatiable and somewhat inelastic demand for
entertainment and information, will mitigate some of the ill effects on
the economic front should it significantly hurt our markets.
CORPORATE RESPONSIBILITY
As always, we remain highly supportive of the communities in the
countries we operate. We continue to leverage on our media platforms
and our content development capabilities in our corporate responsibility
initiatives to develop young talent and support worthy causes with a
focus on education and the performing arts. Further details of our CR
efforts can be found in our inaugural Corporate Responsibility Report
within the Annual Report.
MANAGEMENT AND STAFF
The Group’s progress could not have been possible but for the loyalty
and support of our staff, customers and business partners. It was thus
with regret that the Board accepted the resignation of Robert Odendaal
as Chief Executive Officer of ASTRO, effective 15 April 2008, due to
personal and lifestyle reasons. We would like to thank him for his
leadership over the past year. Identification and grooming of senior
management for leadership roles is an important, continual process,
and a responsibility which the Board takes seriously. Given the current
depth of our senior executives, we expect to be able to arrive at suitable
arrangements in due course. In the interim, Executive Deputy Chairman
Ralph Marshall has re-assumed the additional responsibilities of Group
CEO for ASTRO.
We look to the future with confidence. The Group will be rolling out
initiatives to support its growth strategy including the continued
improvement in customer service and enhancement of the viewer
experience. We will continue to engage our stakeholders and regulators
with a view to accelerating development within the media industry,
including expanding into under-served markets, promoting local
content creation and broadening our channel offerings. With our strong
balance sheet, unparalleled experience in catering to a diverse multicultural audience, our well-tested broadcast and distribution expertise,
and strong relationships with content and technology partners, we are
well-positioned to stay the course and support further growth of the
market and industry both in Malaysia as well as the territories where
we operate.
Dato’ Haji Badri Haji Masri
Chairman
30 May 2008
5
Awards and Accolades
Anugerah Oskar PPFM 2007
Best Art Director – Astro Classic Golden Melody 2007
Best Documentary Director – Wong Kew Lit for My Roots
Best Producer – Razida Julaiha for Akademi Fantasia 2007
Best Technical Producer – Mohd Ghazali Razak for IKON ASEAN
Best Costume – Astro Classic Golden Melody 2007
Best Audio – Konsert 3 DIVA
Best Audio for Serials – Macam-Macam Aznil
Best Set Design – Rafidah Othman for Aattam 100 Vagai 2
Best 2D Animator – Norazmin Yusof for Kris Dayanti Konsert
Best 3D Animator – Jong Kiam Soon and Eric Tan for Astro Wah Lai Toi
Drama Awards 2006
Best Film Actress – Maya Karin in Anak Halal
Most Popular Male Villain (Film) – Fauzi Nawawi in Anak Halal
Best Production Manager (Film) – Mahd Iqbal Shaik for Anak Halal
Best Camera Operator (Film) – Khalid Zakaria for Anak Halal
Best Gaffer (Film) – Mohammad Sazali Othman for Anak Halal
Anugerah Era 2007
Most Promising Artiste – Mila
Best Female Vocalist – Mila
Best Vocal Duo / Group – Jamal Abdillah & Mawi
Best Pop Song – Persis Mutiara, Mila
Best Nasyid Song – Al-Jannah, Mawi
Movie Fans Choice Award – Jangan Pandang Belakang
Best Music Video – Langit Biru, Mawi
Anugerah Juara Lagu 2007
Best Performance – Mawi
Best Song / Best Pop Rock – Estranged
Best Ballad Song – Sahri
Prime Minister’s Corporate Social Responsibility (CSR)
Award 2007
Honourable Mention: Outstanding Work in Culture and Heritage
Category
Anugerah Bintang Popular 2007
Most Popular Artiste in Malaysia – Mawi
Most Popular Male Artiste in Malaysia – Mawi
Most Popular New Artiste (Male) – Dafi
Most Popular New artiste (Female) – Mila
Youth & Sports Ministry National Youth Award
For youth development efforts and initiatives
20th Malaysian Film Festival
Best Cinematography – Khalid Zakaria for Puaka Tebing Biru
Best Art Direction – Naszrul Ashraff for Puaka Tebing Biru
Special Jury Award: Social Critics – Zombi Kampung Pisang
Malaysian Kancil Festival 2007
Silver Award (Radio - Tamil) – Nakeeran
Eleven Bronze Awards for Film, Broadcast Craft and Radio categories
Third Annual MIPCOM Mobile & Internet TV Awards 2007
Best Short Film Originally Created or Repurposed For Mobile
– King Boxer, Celestial Pictures
Committee for ASEAN Youth Cooperation
Special Award for Corporate Social Responsibility,
Astro TechnoloGenius Campaign 2007
Cable and Satellite Broadcasting Association of Asia TV
Advertising Awards 2007
John Doherty Trophy for Campaign Of The Year – Tai Chor La,
Astro On Demand
Best TV Commercial Southeast Asia – Tai Chor La, Astro On Demand
World PROMAX & Broadcast Design Awards 2007
Gold Award, Best Non-Promotional Animation – Gerak Geri Gasing,
Astro CERIA
Silver Award, Best Music Package – Berani Jadi Bos, Astro CERIA
Bronze, Best Public Service Announcement – Indonesia Earthquake,
Astro CERIA
Bronze Award, Best Promotainment – Berani Jadi Bos, Astro CERIA
Bronze Award, Best Packaging Promotion – Gerak Geri Gasing,
Astro CERIA
Anugerah Industri Muzik 2008
Best Song – Kaer
Best Local Chinese Album – Andrew Tan
Best Local Indian Album – Martin Zamigano
6
Calendar
February 2007
March 2007
April 2007
• Astro kicks off the
nationwide ‘Super 50
Party’ concerts and
musicals to celebrate
the 50th anniversary
of Merdeka
• Astro successfully
migrates its broadcast
transmission to MEASAT-3
• Celestial Pictures
launches deal to
distribute Shaw Brothers
titles to free-to-air
television stations in the
Middle East
May 2007
June 2007
• Astro pay-TV adds nine more channels-Discovery Real Time,
Discovery Home & Health, Discovery Science, Astro Vellithirai,
E! Entertainment, Jia Yu Channel, The Golf Channel,
Eurosport and Sun Music.
• AMP’s ERA, hitz.fm, MY FM and THR
retain their top spots as the country’s most
listened-to radio stations in their respective
categories for successive years
(Nielsen Media Research
Listenership Survey)
• Celestial Pictures’ mobile TV channel
KUNG FU TV makes worldwide debut
in Thailand.
7
Highlights
July 2007
August 2007
October 2007
• Astro and RTM team up
to produce a groundbreaking documentary
on historical Malaysian
heroes, Anak Gemilang
Malaysia
• Astro launches
a dedicated TV channel
to chart the journey
of Malaysia’s first
astronaut to outer
space
• Astro launches eight new
channels-Astro AWANI, Astro
HUA HEE DAI, Astro XIAO
TAI YANG, Makkal, Chutti TV,
Astro OASIS, KBS World and
Asian Food Channel.
• Astro On Demand debuts
with TVB drama The Drive
of Life, airing simultaneously
in Hong Kong
• Astro rolls out four new
subscription packages
– Metro, Maharaja,
New Emperor and Gold.
November 2007
December 2007
January 2008
• ASTRO and the Usaha Tegas Group, in partnership
with the Sampoerna Foundation, announces a
5-year, USD1.5 million scholarship programme
for students in Bali.
• Sun Direct TV,
a joint venture
between ASTRO
and promoters
of the Sun Group,
launches operations
to provide DTH
services in India
• Maestro artistes Mila
and Khai of Akademi
Fantasia fame launch
solo albums
• Astro On Demand’s Tai Chor La advertising
campaign wins the ‘John Doherty Trophy for
Campaign of the Year’ and ‘Best TV Commercial
Southeast Asia’ at the Cable and Satellite
Broadcasting Association of Asia (CASBAA) TV
Advertising Awards 2007.
• Tayangan Unggul
releases Kala Malam
Bulan Mengambang,
the first black-and-white
movie launched in
Malaysia in over
30 years.
8
Performance
The Group measures its operating
and financial performance through a
number of Key Performance Indicators
(KPIs), which in turn, are cascaded
down to the respective business units.
The following is an extract of the KPIs
that are tracked by senior management
and provided to Board members on a
regular basis.
FY2004*
FY2005*
FY2006
FY2007
FY2008
Subscribers
Residential subscribers (‘000)
Gross Additions (‘000)
Net Additions (‘000)
TV HH Penetration (%)
2nd Box Subscription (‘000)
2nd Box Penetration (%)
1,283.0
387.2
298.7
26.5
47.8
3.7
1,565.8
408.9
282.7
30.4
61.0
3.9
1,784.2
444.8
218.4
33.9
80.2
4.5
2,016.3
398.3
232.1
36.5
101.3
5.0
2,272.2
472.0
255.9
40.0
120.8
5.3
Churn (%)1
ARPU (RM)2
CAC Per Box (RM)
Content Cost Per Sub (RM)
Content Cost as % of Revenue
7.9
81
904.4
28.1
30.3
9.0
80
789.0
26.8
30.1
13.4
79
749.3
25.5
29.3
8.8
78
666.6
25.5
29.7
10.1
82
697.7
29.5
32.8
12.2
7.2
11.3
6.9
11.9
6.4
13.0
7.1
11.8
6.4
1,265.6
371.9
246.7
19.5
111.6
32.8
1,530.6
336.9
395.4
25.8
263.6
29.6
1,787.0
384.3
389.2
21.8
453.5
69.1
1,978.3
273.9
552.5
27.9
658.2
165.3
2,325.3
353.3
604.8
26.0
644.6
52.7
Listeners
Total Listeners (million)5
Total Listener Share (%)
8.7
44.5
9.0
47.5
11.2
60.5
10.9
51.8
10.6
49.5
Advertising Expenditure
Radio Industry Share (%)
AMP Share of Radio Adex (%)6
4.4
73.5
3.8
74.1
4.0
79.1
4.3
73.4
4.4
67.8
Total Fill Rates (%)
57.7
61.1
43.7
36.7
36.5
108.0
46.6
43.1
37.7
38.0
124.3
55.0
44.2
47.0
27.4
143.3
60.4
42.1
64.9
17.9
151.0
67.0
44.4
76.7
26.3
168.9
70.8
41.9
78.3
18.7
TELEVISION
Advertising Expenditure
Astro Share of TV Adex (%)
Astro Adex as % of Total Revenue (%)
Financial Summary
Revenue
CAC3
EBITDA
EBITDA Margin (%)
Free Cash Flow
Return on Capital Employed (%)4
RADIO
Financial Summary
Revenue
EBITDA
EBITDA Margin (%)
Free Cash Flow
at a Glance
FY2004*
CONSOLIDATED
FY2005*
FY2006
FY2007
FY2008
1,418.8
1,265.6
108.0
36.3
61.3
(52.4)
1,716.3
1,530.6
124.3
47.6
120.6
(106.8)
2,012.5
1,787.0
143.3
60.1
260.1
(238.0)
2,224.3
1,978.3
151.0
75.3
313.4
(293.7)
2,601.7
2,325.3
168.9
89.3
588.2
(570.0)
241.7
369.1
352.3
527.5
556.5
(3.5)
179.7
300.0
353.9
(29.9)
9.9
145.5
228.6
160.4
(6.2)
509.4
580.8
787.2
1,047.4
200.2
1,740.3
1,230.8
966.5
385.7
848.1
60.9
1,075.7
28.3
986.8
786.6
Total Assets
3,357.8
2,650.0
2,851.2
3,026.4
3,614.9
Shareholders’ Equity
1,394.6
1,559.4
1,786.7
1,847.4
1,620.4
Per Share Data
Earnings/(loss) Per Share (sen)
Dividend Per Share (sen)10
Net Assets Per Share (RM)
0.71
n.a.
0.73
7.58
2.5
0.81
11.88
5.0
0.93
8.32
7.0
0.95
(0.32)
10.010
0.84
Key Financial Indicators
Debt to Equity (times)
Return on Assets (%)11
Return on Equity (%)12
Dividend Yield (%)13
0.9
0.3
0.7
10.1
n.a.
0.2
5.5
9.3
17.7
0.45
0.0
8.0
12.8
17.0
1.02
0.0
5.3
8.7
25.6
1.30
0.5
(0.2)
(0.4)
21.7
2.6
Revenue7
Television
Radio
Library Licensing and Distribution
Others
Inter-segment
EBITDA8
Free Cash Flow9
Profit/(loss) After Tax and Minority Interest
Balance Sheet
Net Cash
Cash
Debt
RM million unless specified otherwise
* Restated with Prior Year Adjustment relating to the adoption of IFRS 2 - Share-based Payment
n.a. -not applicable
Notes:
1. Churn is the difference between total subscriber disconnections and total reconnections of previously disconnected subscribers, over the period in review.
2. Average Revenue Per User (ARPU) is the monthly average revenue per residential
subscriber. ARPU is calculated by dividing monthly average revenue derived from active
residential subscribers over the fiscal year with monthly average number of active
residential subscribers during the fiscal year.
3. Customer acquisition cost (CAC) is the cost incurred in activating new subscribers for the
period under review, in the multi-channel subscription television service, including sales
and marketing related expenses and subsidised set-top box equipment costs.
4. EBITDA/(Total Assets – Current Liabilities)
5. Based on the Radio Listenership Survey by Nielsen Media Research in October 2004,
2005, 2006 and 2007 respectively.
6. Based on Nielsen Media Research Adex Report in January 2004, 2005, 2006, 2007 and
2008 respectively.
7. The Group is organised in the following business segments:
• Television – provision of Direct-to-Home (DTH) subscription TV and related interactive
TV services.
• Radio – radio broadcasting services.
• Library Licensing and Distribution – ownership of a Chinese film entertainment library
and aggregation and distribution of the library and related content.
• Others – magazine publishing business; interactive content business for the mobile
telephony platform; Malaysian film production business; talent management; creation
of animation content; television content distribution; ownership of buildings and
investment holding companies.
8. Earnings before interest, taxation, depreciation and amortisation (EBITDA) represents
profit/(loss) before net finance costs, taxation, impairment and depreciation of property,
plant and equipment, amortisation of intangible assets such as software (but excluding
amortisation of film library and programme rights which are expensed as part of cost of
sales), impairment of investments, share of post tax results from investments accounted for
using the equity method and write-off of assets and balances arising from the investment
in PT Direct Vision (PTDV), costs to provide services to PTDV and expenses incurred in
developing a DTH business proposal in Indonesia.
9. Free cash flow represents the net cash flows arising from operating and investing activities
of the Group.
10. The Directors recommend a final tax-exempt dividend payment of 2.0 sen per share
(Final Dividend) for the financial year ended 31 January 2008 subject to the approval of
shareholders at the forthcoming Annual General Meeting. The tax-exempt dividends will be
paid on 29 August 2008 to depositors whose names appear in the Record of Depositors
at the close of business on 13 August 2008. Should the Final Dividend be approved, the
total interim and final dividends approved in respect of the financial year ended 31 January
2008 would be 10.0 sen per share.
11. Profit After Tax and Minority Interest / Total Assets
12. Profit After Tax and Minority Interest / Shareholders’ Equity
13. Annual dividend expressed as a percentage of the current share price. ASTRO share price
as at 31 January 2008 was RM3.82.
10
Board of Directors
From Left:
Dato’ Mohamed Khadar Merican
Bernard Anthony Cragg
Ralph Marshall
Chin Kwai Yoong
12
Board of Directors’ Profiles
DATO’ HAJI BADRI HAJI MASRI
RALPH MARSHALL
Chairman and Non-Executive Director
Executive Deputy Chairman/Group Chief Executive Officer
Malaysian, age 64, joined the Board in July 2003 and was appointed its Chairman in August 2003. He served
in various government ministry posts up to 1996, including that of Director General of Tourist Development
Corporation of Malaysia and Director of the Budget Management Division of the Ministry of Finance of
Malaysia.
Malaysian, age 56, joined the Board in July 2003. He was appointed its Deputy Chairman and Group Chief
Executive Officer in August and September 2003 respectively and on 1 February 2007, assumed the position
of Executive Deputy Chairman. He re-assumed the additional responsibilities of Group Chief Executive Officer
in April 2008.
Dato’ Haji Badri graduated with a BA in Malay Literature from the University of Malaya and an MA in Political
Science from King’s College University, London. He was awarded the Heinz Fellowship from the University of
Pittsburgh.
He is an Associate of the Institute of Chartered Accountants in England and Wales, and a Member of the
Malaysian Institute of Certified Public Accountants and has some 30 years’ experience in financial and general
management.
He is a director of Asia Pacific Land Berhad (listed on Bursa Securities). He has held various posts in the
private sector including business development advisor of DFZ Capital Berhad (listed on Bursa Securities),
chairman/managing director of Pelikan International Corporation Berhad (listed on Bursa Securities) and
chairman of SapuraCrest Petroleum Bhd (listed on Bursa Securities).
He is an executive director of Usaha Tegas Sdn Bhd (“UT”) and serves on the boards of several other companies
in which UT has significant interests viz. Tanjong Public Limited Company (listed on Bursa Securities and
London Stock Exchange plc) of which he is also the executive director, Overseas Union Enterprise Limited
(listed on the Singapore Exchange Securities Trading Limited), London International Exhibition Centre plc,
Arnhold Holdings Limited (listed on The Stock Exchange of Hong Kong Limited) and Maxis Communications
Berhad.
He does not have any business arrangement with the Company in which he has a personal interest.
He is also a director in a non-executive capacity in MEASAT Global Berhad and KLCC Property Holdings
Berhad, both listed on the Bursa Securities.
He does not have any business arrangement with the Company in which he has a personal interest.
13
BOARD OF DIRECTORS’ PROFILES
DATO’ MOHAMED KHADAR MERICAN
BERNARD ANTHONY CRAGG
CHIN KWAI YOONG
Non-Executive Director/Independent Director
Malaysian, age 52, joined the Board in August 2003. He manages his
own financial consultancy and is a director of AirAsia Berhad and RHB
Capital Berhad, both listed on Bursa Securities as well as of several
companies within the RHB group.
British, age 53, joined the Board in September 2003. He also serves as
the chairman of i-mate plc (listed on AIM of the London Stock Exchange
plc). He is a director of Workspace Group plc and Mothercare plc, both
listed on the London Stock Exchange plc.
Dato’ Mohamed Khadar has over 20 years’ experience in financial and
general management. He is a Member of both the Institute of Chartered
Accountants in England and Wales and the Malaysian Institute of
Accountants.
Bernard is a Chartered Accountant by profession and had spent over
8 years in Price Waterhouse. He has a degree in Mathematics from
Liverpool University.
Malaysian, age 59, joined the Board in March 2006. He was an audit
partner with PricewaterhouseCoopers from 1982 until his retirement in
2003. During his tenure as partner, he was executive director in charge
of the Consumer & Industrial Products & Services Group. He also served
as director of the Audit and Business Advisory Services Division, and of
the Management Consulting Services Division.
He had served as an auditor and a consultant in an international
accounting firm before joining a financial services group in 1986.
Dato’ Mohamed Khadar held various senior management positions in
Tradewinds Corporation Bhd (listed on Bursa Securities) including those
of president and chief operating officer.
He does not have any conflict of interest with the Company.
He formerly held various senior management positions in Carlton
Communication plc (listed on the London Stock Exchange plc) for over
17 years including as its Group Financial Controller, Company Secretary
and Group Finance Director. Bernard has previously served as chairman
of Datamonitor plc (listed on the London Stock Exchange plc) as well as
a director of Arcadia Group plc and Bristol and West Plc, a part of the
Bank of Ireland (UK) Financial Services.
Kwai Yoong is a Fellow of the Institute of Chartered Accountants in
England and Wales and a Member of the Malaysian Institute of Certified
Public Accountants as well as the Malaysian Institute of Accountants.
He has extensive experience in the audits of major companies in the
banking, oil & gas and automobile industries as well as in the heavy
equipment, manufacturing, construction and property development
sectors. He was also involved in corporate advisory services covering
investigations, mergers & acquisitions and share valuations.
He is a Director of Deleum Berhad and Genting Berhad, both listed on
Bursa Securities, and of Rangkaian Pengangkutan Integrasi Deras Sdn
Bhd (RAPID KL).
Notes:
1. None of the Directors have any family relationship with any directors and/or major shareholders of the Company.
2. None of the Directors have had any convictions for offences within the past 10 years.
3. None of the Directors have had any sanction and/or penalties imposed on them by any regulatory bodies during the financial year ended 31 January 2008.
14
Group Management
15
From Left:
Raghvendra Madhav
Executive Director - India
Louis Foo
General Manager - MEASAT Publications
Graham Charles Stephens
Chief Technology Officer - ASTRO
Tengku Dato’ Anuar
Mussaddad Tengku Mohammad
Executive Director
- Malay Filmed Entertainment
Grant Ferguson
Chief Financial Officer - ASTRO
Lakshmi Nadarajah
General Counsel/
Company Secretary - ASTRO
Rohana Rozhan
Chief Executive Officer - MBNS*
Zainir Aminullah
Executive Director - AESB**
Dato’ Borhanuddin Osman
Executive Director - AMP***
* MEASAT Broadcast Network Systems
** Astro Entertainment
*** Airtime Management & Programming
16
Business and Financial Review
110 channels
including 27 Astro
channels
OVERVIEW
OPERATIONS
It has been a very busy year. The Group added substantial capacity,
extended the depth and quality of its content offering, enhanced
significantly its own content creation, improved customer service and as
a result, built further momentum in its domestic Malaysian operations.
Astro TV
Our flagship Astro pay-TV business remains the key driver behind
the strong growth in Group revenues. The successful migration of
broadcast services to MEASAT-3 in early 2007 and the subsequent
service expansion provided the impetus for us to vigorously grow
our Malaysian customer base and, for the first time in a number of
years, the average revenue per subscriber (ARPU) as well. The robust
customer growth was supported by record activations of new customers
- 472,000 customers for the 12 months to end-January 2008 - as well
as retention of existing customers.
Driven by strong subscription and advertising sales in Malaysia, Group
revenue grew 17% to RM2.60 billion. Earnings before interest, tax,
depreciation and amortisation (EBITDA) for the year improved to RM557
million from RM528 million a year earlier due to higher revenue, offset
by planned increases in the cost of content, customer acquisition and
other customer growth-related operating activities. EBITDA margin
was thus lower at 21% against 24% of the previous year. The Group
incurred RM6.2 million of losses, its first since listing, due to start-up
costs of its overseas investments.
Going forward, the Group will continue to support the Indonesian
venture while a resolution to the shareholder issue is being pursued.
As expected, the Indian joint-venture Sun Direct TV has increased
subscriber numbers at a credible pace since its December 2007 soft
launch and the Group expects that business to remain in a growth
phase in future.
Notwithstanding the Group’s loss, the outlook for the Malaysian TV and
radio business remains positive. The Group’s extensive multimedia
capabilities and strong balance sheet have enabled it to grow its
presence and develop new businesses in complementary regional
markets. Leveraging on its experience of catering to a multi-language
multi-ethnic audience, the Group will keep up efforts to realise the
immense potential that India, Indonesia, Brunei and the rest of Asia hold
for the radio, pay-TV and content businesses.
Notwithstanding the re-pricing initiative implemented in June 2007 to
address rising content costs, customer churn level was maintained at
10.1% and the entry-level pricing for the service was lowered. This
shows the Astro service remains affordable while providing choice and
pricing flexibility to cater to different customer preferences and wallets.
As a result of our reduced entry and package pricing over time, Astro
offers best value for money when benchmarked against other global
pay-TV companies. Including churn, Astro registered net additions of
256,000 subscribers, bringing the total residential base to 2.27 million.
With a penetration rate of still only 40% of Malaysian homes, the
potential to grow the domestic subscriber base remains strong.
All other key performance metrics also saw favourable outcomes.
ARPU reached RM82 for all of FY2008 and RM85 in the final quarter of
FY2008, primarily due to the June re-pricing initiative, and the addition
of the enhanced “Plus” subscription packages in October 2007.
As anticipated, content cost as a percentage of revenues rose to
33% in FY2008, from 30% in the previous fiscal year, as a result of
our commitment and investment in local content and new channel
development, and the general increase in content costs globally,
particularly for premium sports programming.
17
BUSINESS AND FINANCIAL REVIEW
In addition, Astro On Demand was launched, offering premium content
to customers and allowing them to catch up on past programmes at
their convenience with minimal wait time. The new service kicked off in
July 2007, providing Cantonese drama fans with first-run TVB serials at
the same time as they are broadcast in Hong Kong. Available on a payper-title basis or as the Dragon monthly subscription pack, Astro On
Demand has been well-received. These, and other Chinese language
content to come, as well as high-impact marketing ground events
featuring local and foreign artistes, should continue to lend support in
sparking growth again in the Chinese-speaking segments.
Our Malay-language Astro CERIA channel continues to meet the
demand for children edutainment. Launched in September 2006, Astro
CERIA today remains the most widely-watched children infotainment
channel. Popular ground events such as ‘Run For Fun’ were also held
in the year, further extending the CERIA brand to the community. At the
same time, Astro RIA was re-positioned as a young and urban channel
while Astro PRIMA was successfully re-branded as a family channel.
With the additional capacity available on Measat-3, channel expansion
is expected to continue throughout the current year. To support the
government’s aim to promote sports and inspire a healthy lifestyle, Astro
hopes to introduce a local sports channel on its platform. Any decision
to launch new channels is made after full evaluation and research into
market needs and appropriateness of content, and in consultation with
our regulators.
TV Penetration Continues to Rise
45%
40.0%
40%
TV Household Penetration (%)
Efforts to fill other content gaps continued. The Astro HUA HEE DAI
channel for the Hokkien-dialect speaking segment and the Mandarinlanguage Astro XIAO TAI YANG children’s channel stood out as key
efforts toward this end, complementing other Astro-packaged Chineselanguage channels.
In the Indian-language segment, four new channels have been launched
this year, bringing the total to seven. One of them, Indian movie channel
Astro VELLITHIRAI was an instant hit and is today, the most watched
movie channel on Astro. Aattam100 Vagai, our own locally-produced
Indian dance talent show, went international for the first time in its third
season. The colourful, high-octane competition attracted participants
from India, Sri Lanka, Mauritius and Singapore.
36.5%
33.9%
35%
30.4%
30%
26.5%
25%
20%
‘04
In continuing to bridge the digital divide in Malaysia, the Group expects
to maintain its subsidy on set-top boxes. Since the inception of service
in 1996, we have cumulatively provided set-top box subsidies in excess
of RM2 billion. These subsidies plus related sales and marketing
expenses, form our customer acquisition costs which were kept around
RM700 per new activation for FY2008. In all, we spent over RM1.1
billion – RM762 million in content costs and another RM353 million on
customer acquisition costs – during the course of the last financial year.
These costs should underpin future earnings and are incurred ahead of
revenue growth. For instance, more coverage of sports – including the
UEFA Euro 2008TM and the Beijing Olympics 2008 - is planned this year
to sustain the growth momentum of the TV business.
‘05
‘06
‘07
‘08
ARPU Recovers
84
82
82
81
80
ARPU (RM)
Seven new Astro channels were launched, bringing the total Astro
branded and affiliated channels to 27. Among the new Astro channels,
Astro OASIS provided for the first time in Malaysia, round-the-clock niche
cultural and lifestyle programming while news-oriented programming is
broadcast on Astro AWANI. In all, our Malay-speaking viewers today
have a choice of 10 channels, double that of two years ago.
80
79
78
78
76
74
‘04
‘05
‘06
‘07
‘08
18
While we will continue to commit substantial sums in the areas of content
and customer acquisition, major initiatives are in place to manage these
and other costs through more efficient and effective procurement of
set-top boxes and programming, among others. This will be balanced
by the need to introduce more local, albeit more costly, content aimed
at the broader mass Malay-speaking segment which continues to be
relatively under-penetrated and hence, offers the greatest potential for
further growth.
Our financial metrics remain solid. TV revenues rose 18% to RM2.33
billion with subscriptions accounting for RM2.15 billion, or 92%
and advertising contributing RM148 million or just about 6% of the
total. EBITDA rose to RM605 million. As expected, TV EBITDA margin
narrowed to 26% from 28% due to increased content costs. The
Malaysian television operation continued to be highly cash-generative
with free cash-flow of RM645 million for the financial year.
The results reflected the continuing focus and efforts directed at
enhancing the end-to-end Astro customer experience from the time
customers sign up to their everyday exposure to the service. We realigned the entire organisation as well as mind-sets – from strengthening
our frontline customer servicing capability and providing greater viewing
choices and signature shows, to stabilising our Customer Relationship
& Billing system (CRM) and refreshing our ancillary IT and technical
infrastructure. Consequently, the Astro customer experience saw a
material improvement.
Customers are getting more value out of their subscriptions and it is
now easier than ever before for them to transact with Astro. Our service
enhancement included an expansion in our call centres to cater to the
higher call volumes from an average of 20,700 a day previously to
24,200 currently.
We continue to pursue efforts to further enhance our customer care
and service capabilities. These include an upgrade of our system
infrastructure and the introduction of process improvements at a total
cost exceeding RM200 million over the next two years. These new
capabilities will help us better understand and serve our customers,
including finer segmentation of our subscriber base and services, plus
an in-depth look at what more we can offer our customers.
Following the completion of our second broadcast facility in Cyberjaya
in 2006, we are currently refreshing and upgrading our 12-year-old
broadcasting infrastructure at the All Asia Broadcast Centre in Kuala
Lumpur, to bring it to the same state-of-the-art capability as Cyberjaya.
This major project is expected to result in further production and
operational efficiencies.
In April 2008, we began deploying the NDS VideoGuard Conditional
Access System (CAS) nationwide, with the objective of having a single
provider for both our CAS and middleware systems. Trials in mobile TV
broadcasting and continued investment in unicast (3G) streaming were
also conducted during the year. We remain alert to emerging technologies
and closely monitor industry and competitive developments to ensure a
steady pipeline of new services and product innovations, with improved
time-to-market, in order to further grow subscribers and ARPU.
Our strong brand presence and values have been recognised in Astro
being ranked as Malaysia’s Seventh Most Valuable Brand in a study by
the Association of Accredited Advertising Agents (4As) and Interbrand, a
global branding consultancy. The Astro brand, established in little over a
decade, was also valued at RM3.3 billion by Interbrand.
Radio
Our Malaysian radio operations benefited from further growth in market
demand for radio advertising as reflected in the Nielsen survey in
September 2007. Our stations continue to lead listenership rankings
for all the key vernacular demographics despite intensified competition
from new players.
Our established and constant brand presence, ability to understand and
deliver what listeners and advertisers want, and constant efforts to stay
fresh and relevant, enable us to command a disproportionate share of
the radio advertising dollar. The eight stations - ERA, MY FM, hitz.fm,
MIX fm, Lite FM, SINAR, Xfresh and THR (Raaga/Gegar) - command
weekly listenership of 10.6 million people, representing a 50% share
of listeners.
The Bahasa Malaysia ERA station is the top station in the country for the
seventh straight year while MY FM is the leading Chinese station, hitz.fm
and MIX fm are Numbers One and Two English stations respectively
while THR Raaga is the most popular Tamil station. THR Gegar made
strong inroads in the East Coast states proving the effectiveness of
regional broadcasting.
Our radio revenues grew 12% to RM169 million as the radio industry’s
share of advertising expenditure continued to grow, to 4.4% of total
FY2008 adex of RM5.5 billion, up from 4.3% in FY2007, according to
Nielsen. We continue to drive synergies and efficiencies in our Radio
operations, resulting in EBITDA of RM71 million representing a margin
of 42%.
19
Radio EBITDA Remains in Uptrend
75
71
Radio EBITDA (RM million)
67
65
Numerous on-ground events were held to complement and enhance
our on-air and on-line presence. These included events to celebrate the
50th Merdeka or Independence Day with our listeners such as MY FM’s
non-stop 50-hour outdoor broadcast in the heart of Kuala Lumpur’s
shopping district. Six of our radio stations were official partners for the
Live & Loud Concert, another Merdeka-related event.
As a result of the service expansion last year, first-run transmission
hours for local content more than doubled to 3,900 from 1,700 a year
earlier. Subsidiary Astro Entertainment Sdn Bhd spearheads our Bahasa
Malaysia content development activities with annual budgets of over
RM360 million and this will continue to grow to support this important
market segment.
Another initiative launched in the year was the collaboration between
our Infocenter Traffic and PLUS highway authorities to provide regular
traffic reports across all our stations for key public holidays and long
weekends.
Apart from channel development, extensive resources were also put
into identifying and developing new signature programmes as well
as refreshing existing all-time favourites like our reality talent quest,
Akademi Fantasia. Akademi Fantasia had a viewership of 1.5 million at
the May 2008 finals of its sixth successive season.
60
55
55
47
45
Currently, improvements are continuing within the radio business to
improve transmission quality and the coverage of regional expansion.
35
‘04
‘05
‘06
‘07
‘08
Over 10 million
radio listeners
In recognition of our in-house creative talents, advertising campaigns
we created for our clients won 14 Kancil Creative Awards in 2007
- 1 Silver, 9 Bronze and 4 Merit awards. This was the highest for a
non-agency competing among other creative agencies including several
big international names. We were also the non-agency with the most
materials produced in-house.
Content
TELEVISION PROGRAMMING
Content, in particular, compelling relevant local content, has proven to
be key in driving subscriber growth. Consistent with our key objective
to develop local content, we have invested significant sums in content
creation and aggregation. Astro’s content development unit is the only
one in the world that produces programmes across genres in seven
different languages, namely - Bahasa Malaysia, Hokkien, Cantonese,
Mandarin, Hindi, Tamil and English. The Astro Entertainment Network
was thus launched in FY2007 to house our Astro branded channels and
accelerate our content development efforts.
We scored another hit with Sehati Berdansa, a celebrity couple dance
contest. Other favourites, like comedic talent search Raja Lawak and
kid’s infotainment Tom Tom Bak, have proceeded to their second
seasons while a new wave of game-shows such as Kelab Pop and
Teksi Tunai have taken the small screen by storm. Tom Tom Bak, hosted
by the popular, ever-effervescent host Aznil Nawawi, is now a regular
weekly variety feature for pre-teens and their parents.
Our programmes and channels have also made inroads to countries
such as the Netherlands, Vietnam, Indonesia and Singapore where they
are syndicated or licensed for use across various television networks.
The growing demand for entertainment and information delivered via
new media such as broadband, mobile telephony or Internet Protocol
television (IPTV) also presents opportunities for the content business.
Going forward, the content business will intensify its efforts to repurpose, re-package and customise its offerings for distribution in
Malaysia and worldwide, across both traditional and new delivery
platforms.
20
Shaw Brothers films
seen in over 100
countries
LIBRARY AND DISTRIBUTION-CELESTIAL PICTURES
The library licensing and distribution arm made further inroads into
China and expanded its distribution business, including penetration
into new media worldwide. The re-mastering of the Shaw Brothers
Film Library was completed with 101 new titles released in FY2008.
Up to end-January 2008, the Shaw distribution business had a presence
in over 100 countries and cumulative distribution revenue totaled over
HK$600 million. Celestial Movies doubled its global subscriber base
from two years earlier, benefiting from the localization of the channel
which received good support from Indonesian viewers.
More collaborative efforts were made in mainland China when WaTV
tied up with Shanghai Media Group, a leading media conglomerate from
China, on the promotions, programming and production front. Beautiful
Life, a major TV drama investment, drew the fourth-highest TV rating
among all drama series in the Shanghai region in 2007.
Amid growing demand for compelling new media content, Celestial
Pictures launched KUNG FU TV in Thailand, a mobile TV channel
featuring original kung fu content from the Shaw Brothers Film
Library. In addition, our King Boxer mobisode won the “Best Short Film
Originally Created or Repurposed for Mobile” award at the third annual
MIPCOM Mobile & Internet TV Awards 2007 held in Cannes.
MALAY FILMED ENTERTAINMENT
Our participation in the local film industry gathered steam with
the release of four Malay-language films during the year including
Malaysia’s first black-and-white movie in over 30 years – Kala Malam
Bulan Mengambang – and an award-winning gritty film about streetkids in metropolitan Kuala Lumpur – Anak Halal. Maya Karin who
portrayed a hardened teenager in the latter, was named Best Actress
at the Oskar Awards 2007 while Fauzi Nawawi was voted Best Male
Villain. The movie chalked up some RM1.7 million in box office sales.
Kala Malam hit the silver screen in January, exposing a new generation
of movie-goers to the delights of images in black and white and the
concept of neo-noir.
Our film business offers synergy with our pay-television business,
enabling us to leverage on its productions to enhance our local content
offering. We expect the film unit to keep pushing the envelope with four
offerings scheduled for release in the current financial year in various
genres including comedy, romance and suspense. Another six movies
are at various stages of production and post-production and will be
released thereafter.
INTERACTIVE CONTENT
The Multimedia Interactive Technologies division was consolidated
under one management structure, and core systems were further
enhanced.
Advertising and customer revenues improved, primarily due to increases
in interactive advertising on AMP websites and interactive gameshows on the pay-TV service respectively. The multilingual interactive
gameshows - Fulus Mania, Fun Fun Fun, and Puthaiyalai Thedi – kicked
off their fourth season in February 2008 to more viewers and higher
audience participation. Astro subscribers also benefited from the launch
of a broadband TV service in December 2007 which provided selected
simulcast and on-demand programmes.
Other major launches during the year include the Barclays Premier
League mobile video service and the expansion of the existing Mobile
TV service. Following the launch of 13 TV and 5 Radio channels on the
3G cellular network, a selection of 10 channels is now available on the
2.5G network, reaching a wider addressable market.
21
Riding on demand for local-language entertainment content on the
Internet, the Murai.com.my website was launched in November 2007.
The site features a mix of entertainment information, celebrity news,
and community features such as blogging and user-generated content
(UGC). Murai.com.my formed the basis for Aksi Murai, a celebrity-reality
programme which was based on UGC and initially broadcast over the
Internet before being aired on Astro RIA, marking a first for the Group.
ANIMATION
Key highlights of the animation unit include production of 18 more
half-hour episodes of Captain Flamingo, a series targeted at children
aged six to eight years old. The series now has a total of 52 episodes
and two television specials, and is currently airing on Toon Disney. It is
also licensed to Nickelodeon Australia and Nickelodeon Latin America,
among others.
PUBLICATIONS
Our television compendium was completely revamped into AstroView,
a full-fledged entertainment magazine, as part of our ongoing efforts to
better serve our viewers. Produced in three different language editions,
AstroView offers fresh content such as exclusive interviews, features,
movie and sports highlights, recipes and hot picks of the month.
We continue to refresh and refine the other magazines in our stable
- TopGear, VMag, iFeel, Aksi AF, InTrend and Men’s Uno. As Malaysia’s
premier motoring publication, TopGear remains popular among auto
enthusiasts and has a healthy circulation of 30,000 copies.
The revenue, EBITDA and cash-flow contributions from our interactive
content, filmed entertainment, publications, talent management and
animation businesses are not material to Group results. However, they
provide synergies and significant media-bundling opportunities with our
pay-TV, radio and TV programming businesses.
TALENT MANAGEMENT
ASTRO’s talent management company Maestro continued to play an
active role in nurturing talent and developing the entertainment industry.
Its portfolio of 39 singers, actors, announcers and performers chalked up
a total of over 300 performances during the year, including the Merdeka
Concert to mark 50 years of independence, and various community
events. Maestro also launched 26 albums during the year and sold
100,000 copies, bringing to 1 million the total sold since 2003. Mawi,
winner of the Astro-produced Akademi Fantasia 3 talent quest and a
Maestro performer, remains one of Malaysia’s most popular singers,
winning a Nickelodeon Kids Choice award for the second straight year
and two Anugerah ERA 2007 awards.
Regional Initiatives
INDIA
The joint venture agreement between South Asia Entertainment
Holdings Limited, a wholly-owned ASTRO unit, and Kalanithi Maran and
Kavery Kalanithi, for Sun Direct TV Private Limited, was completed in
December 2007. We disbursed a first tranche of US$80 million with the
balance to be paid out in accordance with an agreed schedule based
on the funding requirements of Sun Direct.
As typical of similar start-ups, the joint-venture is expected to incur
losses for the first five to six years of operations. Consistent with the
Group’s accounting policies, ASTRO expects to equity-account for
its share of Sun Direct’s losses of up to Indian Rupee 7,470 million
(approximately RM600 million), representing our 20% equity stake.
The joint-venture will be funded though a mix of equity and borrowings.
Response to Sun Direct has been enthusiastic following its soft launch
in December 2007. Thus far, over 500,000 subscribers have signed up
since the service commenced in Tamil Nadu, Andhra Pradesh, Kerala
and Karnataka states.
The Group has also further enlarged its radio footprint in India.
In February 2008, it acquired a 6.98% direct equity stake in South Asia
FM Ltd. which has licences to own and operate 23 FM radio stations
in India.
INDONESIA
In Indonesia since 2005, the Group had been in discussions to acquire
a stake in PT Direct Vision (PTDV). In 2006, PTDV commenced a
satellite direct-to-home pay-TV business, marketing the service under
the “Astro” name pursuant to a trademark licence agreement with the
Group. As part of the proposed investment in PTDV (the Indonesian
venture), affiliates of the Group supplied channels, programming content
and other technical services to PTDV. As negotiations on the Group’s
acquiring of a stake in PTDV have been protracted and inconclusive, the
ASTRO board decided in September 2007 that the Group will no longer
equity account for the joint venture in its financial statements.
The Group continues to provide basic services to support the pay-TV
operations of PTDV at a cost of approximately RM20 million a month
while efforts to seek a resolution to the Indonesian venture continue.
If no agreement is reached, the Group expects to account for costs relating
to commitments already made which are approximately RM200 million.
As at 31 January 2008, PTDV had 145,000 subscribers and ARPU of
US$20.1. The service broadcasts 49 channels of which 12 are local,
including six channels the Group specially developed for Indonesia.
Notwithstanding the accounting losses, these regional investments are
anticipated to create long-term shareholder value by diversifying and
scaling our businesses. They allow us to amortise the cost of content
over more than one market, making our creative efforts more viable
and allowing us to aspire to even greater quality. We expect these
investments to be funded through internally-generated funds and
borrowings without impacting our ability to pay dividends.
22
FINANCIAL PERFORMANCE
Group revenue rose 17% to RM2.60 billion as subscription and
advertising sales improved. The revenue rise lifted earnings before
interest, tax, depreciation and amortisation (EBITDA) for the year to
RM557 million from RM528 million a year earlier. However, the rise in
revenue was partially offset by rises in content cost and expenses due
to activities related to customer acquisition and growth, resulting in an
EBITDA margin of 21% versus 24% in the previous year.
Capital expenditure for the year increased to RM208 million from RM96
million in FY2007 due primarily to the upgrading of our existing All
Asia Broadcast Centre facility in Kuala Lumpur, improvements to our
IT systems and the start-up of new channels. This refreshing of our
systems and equipment ensures that we remain on the cutting edge of
broadcast technology and allows us to plan for additional services in the
future at a low marginal cost.
The balance sheet remained healthy in the year with RM987 million
of cash as at end-January. To improve the efficiency of the capital
structure, the Group entered into a syndicated term and revolving
facilities agreement in March 2008. The facilities comprise U.S. dollar
commitments and a proposed ringgit term loan facility, which will total
up to US$300 million. Funds made available under these facilities,
together with the cash and US$85 million available via another existing
facility, provide the Group with ample funds at its disposal for current
and future businesses.
Active foreign exchange hedging continued during the year to manage
exposures related to the purchase of set-top boxes. Overall, the rise of
the ringgit against the U.S. dollar has benefited the Group. During the
year, the Group realised foreign exchange gains of RM15 million.
The Group’s effective tax rate is higher than the Malaysian statutory
tax rate due to losses from foreign subsidiaries, associates, overseas
investments and certain local subsidiaries which were not available for
tax relief at the Group level and additional deferred tax charge from
the restatement of deferred tax following the lowering of the Malaysian
statutory tax rate for 2009 to 25% from 26%.
Dividends declared for the financial year ended 31 January 2008
totalled 10 sen a share, or RM193 million, versus 7 sen a share or
RM135 million in the previous year. The Group remains committed to
a progressive dividend policy targeting 50% of earnings of the existing
operations and will revisit the payment of dividends on a quarterly
basis.
The government has replaced the full imputation system for dividend
payment with the Single-Tier Tax system effective from the year of
assessment 2008. Companies with Section 108 credit balances are
allowed to make an election to use their section 108 balances, for
distribution of franked dividend during the transitional period from
1 January 2008 until 31 December 2013, subject to them meeting
certain conditions. Having evaluated the potential impact of the SingleTier Tax System for dividends, the Group has decided it will retain the
incumbent imputation system until 31 December 2013, or such time
when all its Section 108 credit balances are exhausted, whichever is
earlier. This decision will not have any adverse impact on the Group’s
dividend policy.
CLOSING REMARKS
Prospects for growing the Malaysian TV and radio operations remain
bright. In addition, we look forward to working with partners in the media
and ancillary industries to broaden and deepen our content offerings,
and leverage evolving technologies and new-media platforms to expand
our presence in Malaysia and beyond.
At the same time, we continue to seek opportunities to build on our
extensive cross-media and broadcast expertise and our experience in
serving a multi-lingual, multi-ethnic audience, to realise the potential for
the TV, radio and content development businesses in India, Indonesia,
Brunei and the rest of Asia.
Prospects for
growing the
Malaysian TV and
radio operations
remain bright.
23
Risk Factors
The Group’s Enterprise Risk Management (ERM) framework has two
main aims – to identify the types and levels of risks, and to ensure
the company’s preparedness and ability to face them. Risks, whether
they emerge individually, or in combination, could significantly affect
the Group’s financial performance, and should be carefully considered
with any forward-looking statements in this Annual Report. Key risks
for the Group – as summarized below - are by no means all inclusive.
The ERM framework is based on industry best practices and standards
of corporate accountability plus prudent risk management practices
and acceptable control standards as defined by our regulators.
SERVICES AVAILABILITY
TECHNOLOGY AND INNOVATION
The Group relies on a wide range of systems, including the MEASAT-3
satellite and broadcast equipment, to deliver a high-quality service.
The Group continually reviews and enhances its systems and their
interconnectivity to minimise service interruption. Business continuity
plans have been implemented in the Group, and are reviewed and
selectively tested on a quarterly basis. At the same time, the Group
is working with its satellite provider to mitigate risks of a loss of
transponders. The Group has since 2006 established two broadcast
centres to facilitate redundancy capacity.
Technology and innovation are critical to our business and industry.
The Group keeps abreast of the latest industry trends and has upgraded
its facilities to enhance security and preparedness amid the emergence
of new technologies. The Group has also taken steps to reduce technical
and operations disruptions while ensuring its systems remain current
and relevant through continuous maintenance and system upgrades.
POLITICAL AND REGULATORY
COMPETITION
The Group operates in an industry that is subject to a broad range of rules
and regulations put in place by various governing bodies and relevant
authorities. Consequently, the Group emphasises strict compliance.
The Group also constantly keeps up with all relevant developments and
is in regular contact with governing authorities.
Competition can range from other leisure activities that compete for the
customers’ wallets to existing media and telecommunications players
which may offer appealing products and services, and technology
developments that may result in consumers deriving content from
alternative sources such as broadband video and IPTV. The Group
is cognisant of critical industry developments and considers key
performance indicators such as ratings and viewership in its product
planning and development.
FOREIGN ASSOCIATES
The Group has invested in foreign ventures and operates in overseas
jurisdictions and faces risks of unexpected changes in laws, regulations,
licensing, taxation and currency repatriation policies. In its overseas
joint-ventures and partnerships, the Group may have limited control
over management, operations and performance, thereby reducing its
ability to manage related risks. Nevertheless, the Group constantly
evaluates the risks at hand and ensures mitigation plans are in place.
PROCURING EXCLUSIVE
AND COMPELLING CONTENT
Content, particularly local content, is key for customer acquisition and
retention. The rights to and pricing of third-party content are subject
to periodic negotiation and re-pricing may exceed budget projections.
Thus, the Group constantly explores opportunities to develop proprietary
content and works closely with key programme providers while
diversifying its sources of third-party content.
HUMAN RESOURCES
Our human resources are crucial to our business strategy formation and
execution. Inadequate resources and brain drain are challenges which
the Group tries to mitigate by hiring the best, and providing attractive
performance-based rewards and a safe and healthy work environment.
Competency-based training has also been put in place while succession
planning has been implemented for key functions in the Group.
REPUTATION AND PUBLICITY
The Group’s actions, talents and brands are constantly in the public
eye. The Group advocates corporate responsibility through programmes
that focus on human development, education and nurturing of our
youth. The Group also actively engages with the public via dialogue with
community groups, interest groups and government bodies.
24
strengthening
relationships
Enhancing customer service continues to be a key focus. The number of customer service officers was
considerably beefed up, with intensive training held throughout the year to upgrade skills and product
knowledge. During the year, five more customer service centres – in Alor Star, Kuala Terengganu, Seremban,
Sibu and Tawau - were added, bringing the total to 17 and allowing us to better serve our customers in
smaller towns and semi-urban centres where most of the growth in customers is expected.
From December, customers were treated to the entertainment magazine AstroView which complements
the substantially expanded Astro TV service. At the same time, we kept up efforts to fill content gaps.
For instance, the Astro HUA HEE DAI channel was rolled out for Hokkien-dialect speakers and complements
other Astro-packaged Chinese-language channels. Astro HUA HEE DAI and other Chinese-language content
to come, as well as high-impact marketing ground events featuring local and foreign artistes, will underpin
growth in the Chinese-speaking customer segments.
Courtesy of Action Images/Reuters
Courtesy of National Geographic
Channels International
25
“Customers are vital to our business. Everything that we do
is aimed at improving the customer experience. We are constantly
looking for ways to enhance our customer service, our content
offering, to make it easier for our customers to interact with us…
the list is endless.”
ROHANA ROZHAN Chief Executive Officer, MEASAT Broadcast Network Systems (Astro TV)
television
26
increasing
diversity
27
Astro On Demand debuted in July 2007, providing die-hard Cantonese drama fans with TVB serials as
they are released in Hong Kong, to be viewed at their convenience while four additional channels were
introduced for our Indian-speaking communities. As well as more international offerings, we also stepped
up efforts to localise content with over 12,000 hours of subtitling done. To the delight of young local fans,
the Disney hit movie High School Musical 2 was broadcast with English and Malay-language tracks.
In 2007, ASTRO brought the journey of Malaysia’s first Angkasawan, or astronaut, live to the nation’s
television screens. ASTRO also provided over two weeks, a special ANGKASA 1 channel that featured the
live telecast of the space shuttle take-off and other interesting space travel programmes.
television
We expanded our services through the year, giving customers greater flexibility and choices through new
products, enhanced channel line-ups and packaging options. We now have 27 Astro channels including
Astro AWANI, Malaysia’s international news and information channel with a local perspective and Astro
OASIS, the country’s first family channel that reflects niche cultural and lifestyle programming.
28
television
Our learning and infotainment channels continue to be the key drivers for customer growth. Following
enthusiastic response to our home-grown kids infotainment channel Astro CERIA, Astro launched two more
channels for children, Astro XIAO TAI YANG in Mandarin and Chutti TV in Tamil. Astro XIAO TAI YANG builds
on the success of Astro CERIA. Launched in September 2006 to fill the Malay-language learning content gap,
Astro CERIA today is the mostly widely-watched children infotainment channel.
On-ground events such as road-shows featuring local and foreign artistes and community events have
become an effective way to reach new audience and promote additional channels. Among these were
road-shows to promote Astro XIAO TAI YANG and Astro HUA HEE DAI in Penang and Johor as well as the
Merdeka celebration concerts across the nation. As a result of our on-ground marketing and promotion
activities, our direct sales team now accounts for half of sign-ups, from just 30% four years earlier.
Courtesy of CCTV
Courtesy of Chutti TV
29
growing
viewership
radio
30
“We always strive for the best – in terms of our facilities,
content, technology and most importantly, our people.
That’s how we’ve grown. And that’s how we will
keep on growing.”
DATO’ BORHANUDDIN OSMAN Executive Director, Airtime Management & Programming (AMP Radio Networks)
31
sustaining
leadership
Our eight terrestrial FM radio stations retained top spots across vernacular and English-language markets with 10.6 million
listeners tuning in each week. ERA was the top station nationwide for the 7th straight year while MY FM was the most popular
Chinese-language station in the country, THR Raaga the most popular Tamil station and hitz.fm remained Malaysia’s top station in
the English-language market. A total 17 digital radio channels are also broadcast over the DTH platform.
To bring our on-air relationship with the listeners closer to the ground, we held events such as MY FM’s non-stop 50-hour outdoor
broadcast in the heart of Kuala Lumpur’s shopping district and the Live & Loud Concert where six of our eight radio stations were
official partners. During the year, our radio stations also worked together with highway operators to help ease congestion by
broadcasting recommended staggered travel times.
content
32
delivering
variety
Our content development efforts accelerated over the year to meet demands of our everevolving customer base. The generation of local content, particularly for the Malay-speaking
population, was a major focus. The unit broadcast 3,900 hours of first-run original local
content in the fiscal year, more than double of the previous year. These include signature
programmes such as comedic talent show Raja Lawak, drama serial Cinta dan Keadilan and
the highly popular reality talent show Akademi Fantasia, which is already in its sixth season.
Dance was the rage among viewers as we rolled out new signature programmes such as Sehati
Berdansa where celebrity couples tried to out-do each other at anything from ballroom dancing
to the traditional joget. It drew nearly 1 million viewers during its December 2007 finals, the
highest achieved for an Astro RIA programme in the fourth quarter, and was one of the top 20
programmes broadcast on the Astro platform during the year. A street-dance contest Battleground
debuted in October on Astro WAH LAI TOI while the Aattam 100 Vagai group dance competition
went international for the first time in its third season. In recognition of our creative talent,
our production unit picked up 10 awards at the Sixth Oskar Awards 2007 organised by the
Film Workers Association of Malaysia.
33
“Content is what drives subscriber numbers
– but not just any content. It has to be compelling.
It has to be relevant. And most importantly,
it has to be unique.”
ZAINIR AMINULLAH Executive Director, Astro Entertainment
35
Tayangan Unggul continues to push the envelop for Malay film production with Kala Malam
Bulan Mengambang, Malaysia’s first black-and-white neo-noir movie in over 30 years, while
Anak Halal, a gritty film about street-kids in metropolitan Kuala Lumpur, won five awards at
the Oskar Awards 2007 and chalked up some RM1.7 million in box office sales.
content
malay filmed entertainment
34
celestial pictures
multimedia interactive
technologies
Celestial Pictures made progress in growing its range of products and making inroads into
mainland China. Beautiful Life, a major TV drama investment, drew the fourth-highest TV
rating among all drama series in the Shanghai area in 2007.
The Multimedia Interactive Technologies unit continued to grow and enhance its offerings
across new media such as mobile, interactive television and the Internet. Murai.com.my,
an entertainment portal, was launched in November 2007 allowing celebrities and users to
interact and network via blogs, photo and video galleries, contests and events. Our online
properties continued to draw a credible audience, with an average of 1.1 million unique
visitors monthly.
In the film distribution area, Celestial distributed hits such as Jackie Chan’s blockbuster Rush
Hour 3, Quentin Tarantino’s Death Proof¸ and the epic box-office smash Golden Compass.
Courtesy of Media Asia Distribution Ltd
36
Corporate Responsibility
inspiring
sustainability
“Our CR Framework is tailored to generate a positive change in all aspects of
the Malaysian community today – environmental, economic and social
– with the hope of shaping a more wholesome society for tomorrow.”
ROHANA ROZHAN Chief Executive Officer, MEASAT Broadcast Network Systems (Astro TV)
37
As a leading media player, we believe that we are well-placed to
nurture and support the community from which we draw talent, ideas,
our customers, employees, and in turn, ensure sustainability of our
business. Integrity, professionalism, fairness and ethical treatment are
qualities we value in our dealings with our stakeholders. As embodied
in our “One Astro” motto, Astro aims to be Number One in terms of the
customer experience, the viewing choices we offer, and as an employer.
As a responsible company, we believe that we also have a role to play
in protecting our fragile environment for future generations. Our code
of ethics and corporate governance standards are accordingly shaped,
and continually refined, to institutionalise these guiding principles into
our businesses practices and activities.
SUPPORTING THE COMMUNITY
The broadcast and entertainment industry relies heavily on fresh ideas
and new talent, which is why supporting the community, particularly
youths and those involved in the performing arts, is a key part of
ASTRO’s corporate responsibility programme. Apart from financial
support, we have also generously provided airtime across our various
media platforms to raise public awareness for the needy and other
worthy causes among our subscribers and listeners. In FY2008, ASTRO
provided a total of almost two hours of community and public service
announcements each day across its available television channels while
broadcasts of similar announcements across the Group’s eight radio
stations totalled over six hours a day. We have also proven our ability to
match entertaining programmes with charity, the most recent of which
was the well-received Sehati Berdansa dancing competition where
the favourite charities of winning participants would receive certain
donations.
One of the new initiatives the Group launched during the year to nurture
innovation in the performing arts was its sponsorship of the Australian
National Institute of Dramatic Arts short courses programme for 48
youths on script writing, screen acting and screen direction. In 2006, the
Astro Scholarship Awards were initiated to support deserving individuals
pursuing undergraduate and graduate degrees in areas related to
media and broadcasting. The Astro Scholarship programme has to date
funded 25 young people in their pursuit of their academic dreams at
reputable universities worldwide. ASTRO further extended its support of
education when it gave out the first ASTRO – 4As Scholarship Award
in support of individuals, nominated by the Association of Accredited
Advertising Agents Malaysia (4As), reading advanced degrees in fields
related to brand and marketing communications.
As a company that invests heavily in original programming, we believe
that many young performers deserve help in staging their projects or
improving their skills. In its second year in 2007, the Krishen Jit-ASTRO
Fund supported four grantees in their respective projects - a visual arts
exhibition, a 90-minute movie, a music CD compilation showcasing
Malaysian compositions and to facilitate research for a theatre project.
To date, seven individuals have received grants from the Fund.
ASTRO is a company with Malaysian roots. Together with the nation, we
celebrated the 50th anniversary of Merdeka in 2007 with a plethora of
activities. These included the ‘Super 50 Party’ concerts and musicals
held nationwide, and special programmes such as Anak Gemilang
Malaysia and My Roots. ASTRO also proudly devoted an entire channel
for two weeks to document and track Malaysia’s first Angkasawan, or
astronaut, as he embarked on a historic space journey in October 2007.
During the year, we strongly supported technological achievements with
the Astro TechnoloGenius Campaign and the Nextgen Contentpreneur
Awards. The Astro TechnoloGenius Campaign 2007 was conceived as a
search for Malaysia’s most innovative technological ideas conceptualised
by youths. Partnering XPRESI of Indonesia, the campaign received a
38
special ASEAN TAYO (Ten Accomplished Youth Organisations) award
in November 2007 from the Committee for ASEAN Youth Cooperation
(CAYC), the coordinating body for national youth councils in the ASEAN
region. In collaboration with the Malaysian Communications and
Multimedia Commission and MSC Malaysia, we launched the Nextgen
Contentpreneur Awards which aims to reward tertiary students for
content excellence in categories such as short content, documentary,
music video, website and animation.
Over the years, ASTRO has also supported culture and heritage through
collaboration with national organisations such as leading charity
foundation, Yayasan Budi Penyayang, to promote Malaysian Batik, or
through financial contributions to the arts scene such as to the Kuala
Lumpur Performing Arts Centre, the Sutra Dance Theatre, the Five
Arts Centre and Dramalab. In addition, ASTRO brought in professional
musicians from India to hold train-the-trainers’ sessions to deepen the
skills of local musicians of all ethnic backgrounds under the Indian Music
Training Programme. In recognition of these efforts, ASTRO was one of
two companies to receive an Honourable Mention for Outstanding Work
in the Culture and Heritage category of the Prime Minister’s Corporate
Social Responsibility Awards 2007.
Sports lies close to the heart of most Malaysians and as a Malaysianbased company, ASTRO is no different. The Group actively supports
sports through its sponsorship arrangements with the Olympic Council
of Malaysia, beginning in 2004 and which continues to the Beijing
Olympics this year.
ENABLING THE EMPLOYEE
ASTRO is committed to developing the full potential of each of its
employees through a comprehensive training programme while
ensuring fair compensation and a healthy and safe environment. At the
same time, ASTRO believes in helping its employees reach out to the
underprivileged and the marginalised. As at 31 January, 2008, ASTRO,
and its subsidiaries in Malaysia, India and China, employed 3,432 men
and women of different ethnicities, ages and skill levels.
“The Spirit of One ASTRO” programme is the linchpin of our Human
Capital Development Programme. The one-day programme seeks to
align employees toward common goals of organisational growth and
overcoming business challenges, and is completed ahead of other
competency-based development programmes. During the year, 1,361
or over a third of our employees experienced “The Spirit of One ASTRO”
while 1,061 went through competency-based training.
During the financial year under review, the Graduate Management
Development programme was launched to develop high-potential new
recruits. Over a 12-month structured development programme, the first
batch of seven men and women were coached, mentored and given
opportunities to work in different parts of the company.
The Group encourages staff interaction and feedback through both
formal ways – such as our biennial employee opinion surveys and town
hall meetings – as well as informal means including staff newsletters, the
sports club and so on. Following feedback from the staff, dental treatment
was introduced as an employee benefit. Yearly events organised for
the staff include the ASTRO Fest, a day-long carnival where employees
and their families let their hair down, relax, and enjoy food, games and
entertainment within the All Asia Broadcast Centre. Free health checks,
discounted shopping, meal subsidies and a feeder bus service are among
other benefits employees enjoy at ASTRO. Employees also are provided
with ample opportunities to participate in activities aimed at helping the
community. During the year, three blood donation drives were held at
ASTRO, with over 200 employees coming forward in the latest exercise
in March.
39
UPHOLDING CORPORATE GOVERNANCE
SUSTAINING THE ENVIRONMENT
ASTRO is committed to maintaining high standards of corporate
governance. The Group has a clearly-defined Code of Business Ethics
and Code of Conduct with an over-riding objective of upholding
transparency, accountability and integrity in its policies and procedures.
We continue to seek ways to enhance our relationship with all
stakeholders including shareholders, the government and government
agencies, the media, non-governmental organisations and interest
groups. As a result of our efforts, the Group was ranked 12th among
300 Malaysia-listed companies in a 2007 corporate governance survey
by the Minority Shareholder Watchdog Group. (For more details, please
see the Risk Factors statement on page 23, the Corporate Governance
Statement on page 41, the Statement of Internal Controls on page 48,
the Directors’ Report on page 52 and the Auditor’s Report on page 56.)
As a company with its main operations in richly bio-diverse Malaysia,
ASTRO has consciously played a part in protecting the environment,
both directly and indirectly.
ASTRO supports recycling efforts and encourages its pay-television
subscribers to return faulty decoders when they buy new ones.
Decoders that can be repaired are then refurbished and reconditioned
so that they can be re-used while those beyond repair would be
scrapped and useable parts re-processed. Films and beta tapes and
other similar materials are disposed by an appointed vendor every two
months, the bulk of which are re-processed into recyclable plastic. Used
paper materials and unsold copies of our magazines and Astro View are
collected via a centralised system and sent to a designated recycling
plant.
ASTRO is committed to maintaining
high standards of corporate governance.
We continue to seek ways to enhance
our relationship with all stakeholders
including shareholders, the government
and government agencies, the media,
non-governmental organisations
and interest groups.
40
Corporate Governance
Corporate Governance Statement
41
Audit Committee Report
46
Statement on Internal Control
48
41
Corporate Governance sets out the framework and process by which
institutions, through their board of directors and senior management,
regulate their business activities. These principles balance safe and
sound business operations while complying with relevant laws and
regulations.
Your Board is fully committed to maintaining high standards of
corporate governance to safeguard and promote the interests of the
shareholders and to enhance the long term value of the Group. To
this end, it has adopted a set of Corporate Governance Guidelines to
govern its conduct within the spirit of the Malaysian Code on Corporate
Governance (“Code”) and the Listing Requirements of Bursa Securities.
The Board has approved this statement and is of the opinion that it
has, in all material respects, complied with the principles and best
practices outlined in the Code for the financial year ended 31 January
2008. In addition, the Board has continued to adhere to the principles
recommended in the United Kingdom Combined Code of the Principles
of Good Governance and Code of Best Practice where applicable to the
circumstances of the Group as described in this report.
1. THE BOARD
The Board has adopted the following six responsibilities in the
discharge of its stewardship, which are also set out in the Directors’
Manual:
• Review and adopt strategic plans for the Group
• Oversee the conduct of the Group’s businesses to evaluate
whether the businesses are properly managed
• Identify and manage principal risks
• Succession planning of senior management
• Develop and implement an investor relations programme
• Review the adequacy and integrity of the internal control and
management information systems
The Board provides the Ieadership necessary to enable the Group’s
business objectives to be met within a framework of internal
controls while ensuring that the interests of the shareholders are
safeguarded. During the financial year under the review, the Board
has reviewed and adopted a 3-year strategic plan that will set the
Group’s business direction in order to meet its objectives. The
Board has also on a regular basis reviewed the performance of the
Group and individual businesses, risk management procedures,
key controls, corporate governance standards and adequacy of
human resources as well as conducted investor briefings.
1.1 Composition and Balance
As at 31 January 2008, your Board comprised four Non-Executive
Directors including the Chairman, and one Executive Director.
Three of the four Non-Executive Directors are independent, which
is higher than the minimum prescribed in the Code and the Listing
Requirements. The Board considers that the balance achieved
between Executive and Non-Executive Directors during the financial
year under review was appropriate and effective for the control
and direction of the Group’s business. The Board is also of the
opinion that the Board composition during the year under review
had fairly represented the ownership structure of the Company
with appropriate representations of minority interest through the
Independent Directors.
The roles of the Non-Executive Chairman, Executive Deputy
Chairman and the Chief Executive Officer have been distinguished,
with a clear division of their responsibilities to ensure that there
is a balance of power and authority. The Chairman is responsible
for ensuring Board effectiveness and conduct whilst the Executive
Deputy Chairman is responsible for providing leadership and
advancing relationships with regulators and stakeholders. The Chief
Executive Officer assumes overall responsibility over the operating
units, organisational effectiveness, formulation of strategies and
implementation of Board policies and decisions. On 25 January
2008, the Board announced the resignation of the Chief Executive
Officer with effect from 15 April 2008. Pending a new appointment,
the Executive Deputy Chairman has taken on also the responsibilities
of the chief executive officer with effect from 15 April 2008.
The Independent Directors play a pivotal role in corporate
accountability and provide unbiased and independent views
and judgement to the Board’s deliberation and decision making
process, which is reflected in their membership of the various
Board Committees and their attendance of meetings as detailed
below. In addition, the Non-Executive Directors ensure that matters
and issues brought up to the Board are fully discussed and
examined, taking into account the interest of all stakeholders. The
profiles of the members of the Board, as set out on Pages 12 to 13
of this Annual Report, demonstrate the complement of skills and
experiences that the Directors are able to bring to bear on issues
of strategy, performance, control, resource allocation and integrity.
1.2 Appointments to the Board
In compliance with the Code, the Nomination and Corporate
Governance Committee has the responsibility of proposing new
candidates for appointment to the Board.
One-third of the Directors are subject to re-appointment by rotation
at every Annual General Meeting in accordance with the Company’s
Articles of Association. Re-appointments are not automatic and all
Directors must retire and submit themselves for re-appointment
by shareholders at least once in every three years. Pursuant to the
Listing Requirements, each member of the Board holds not more
than ten directorships in public listed companies and not more
42
than fifteen directorships in non-public listed companies. This
ensures that their commitment, resources and time are focused
on the affairs of the Group to enable them to discharge their
duties effectively. Your Directors are in full compliance with this
requirement.
1.3 Training
Your Board fully supports the need for its members to continuously
enhance their skills and knowledge to keep abreast with the
developments in the economy, industry and technology, among
others. It is regularly updated on new statutory and regulatory
requirements relating to their duties and responsibilities as
Directors.
All the Directors have attended seminars during the financial year
and they are kept informed of available training programmes on
a regular basis. An appropriate budget is in place for Directors’
training. Among the seminars attended by one or more Directors
during the financial year include:
• Trends and Disruptions in the Digital TV Space, Customer
Lifecycle Management, Opportunity at the Confluence of Telco
and TV
• Briefings on Directors’ Responsibilities and Recent
Amendments to the Companies Acts in Malaysia and the
United Kingdom
• Improving Board of Directors’ Performance, Leadership &
Governance
• Making Corporate Boards More Effective
• Developments in Broadband and IPTV
• Corporate Social Responsibility
In addition, the Directors receive briefings and updates on the
Group’s businesses and operations, risk management activities
and technology initiatives on a regular basis.
1.4 Supply of Information and Board Meetings
Your Board has full and unrestricted access to all information
pertaining to the businesses and affairs of the Group as well
services of the Company Secretary, to enable them to discharge
their duties effectively. The Board may also seek external
independent professional advice at the Group’s expense.
The Board meets at least every quarter and on other occasions, as
and when necessary, to inter-alia approve quarterly financial results,
statutory financial statements, the annual report, business plans
and budgets as well as to review the performance of the Company
and its operating subsidiaries, governance matters and other
business development activities. Senior Management and external
advisors are invited to attend the Board and Board Committees
meetings to advise on relevant agenda items to enable the Board
and its committees to arrive at a considered decision. Prior to Board
or Board Committees meetings, the Directors receive a formal
agenda and a comprehensive set of board papers encompassing
Directors
management reports on financial and operating performance,
minutes of Board meetings, reports on risk management, proposal
papers and supporting documents to enable the Directors to review,
appraise or obtain further information, if necessary on the agenda
items to be discussed. In addition to quantitative information, the
Directors are also provided with updates on other areas such as
market developments, customer, risk management and technology.
The Company Secretary attends all Board and Board Committees
meetings and ensures that accurate and proper records of the
proceedings of the meetings and resolutions passed are kept.
Minutes of every Board meeting are circulated to all Directors for
their perusal prior to confirmation, in order to provide an opportunity
to the Directors to clarify or raise comments on the minutes prior to
the confirmation of the minutes.
The attendance record of individual Directors at Board and Board
Committee meetings for the financial year ended 31 January 2008
is detailed below:
Board
Board Committees
Audit
Nomination
and Corporate
Governance
Remuneration
Option
5
5
1
5
1
5/5
n/a
n/a
n/a
n/a
Ralph Marshall
5/5
n/a
n/a
n/a
0/1***
5/5
5/5
1/1
n/a
n/a
Dato’ Mohamed Khadar Merican*
4/5
4/5
1/1
5/5
1/1
Chin Kwai Yoong**
5/5
5/5
1/1
5/5
1/1
Number of meetings during the financial year
* redesignated on 1 March 2007 and remains as member of the Remuneration Committee
** appointed as Chairman of the Remuneration Committee on 1 March 2007
*** did not attend as he was interested and was required to abstain from voting
43
1.5 Board Committees
To ensure the effective discharge of its fiduciary duties, the Board
has delegated specific responsibilities to the following four Board
Committees. The Board Committees will deliberate in greater detail
and examine the issues within their terms of reference as set out
by the Board and make the necessary recommendations to the
Board which retains full responsibility.
Audit Committee
Composition of the Audit Committee, its terms of reference and a
summary of its activities are set out on Pages 46 and 47 of this
Annual Report.
Nomination and Corporate Governance Committee
This Committee is primarily responsible for recommending
appointments to the Board and Board Committees. In March 2007,
the Board appointed Chin Kwai Yoong as the Chairman of the
Remuneration Committee and member of the Option Committee
based on the recommendation of this Committee.
In addition, there is in place a framework for Directors to evaluate
the effectiveness of the Board, the Board Committees and the
contribution and performance of each individual Director. The
chairman of the Nomination and Corporate Governance Committee
assumes overall responsibility for the assessment process and
the findings are reported by the chairman and discussed with the
Directors. The assessment of the chairman of this Committee is
addressed by the Chairman of the Board. The assessment of the
Chairman of the Board is led by the Non-Executive Directors who
are led by the Senior Independent Director.
The assessments in respect of the financial year ended 31 January
2008 concluded that the Board, Board Committees and individual
Directors contributed effectively to the overall operations and
review of the Group’s affairs. The Board is also of the opinion that
the Directors seeking re-appointment at the forthcoming AGM have
continued to give effective counsel and commitment to the Group
and accordingly should be re-appointed.
Members of the Nomination and Corporate Governance Committee,
all of whom are independent Non-Executive Directors, are:• Dato’ Mohamed Khadar Merican (Chairman)
• Bernard Anthony Cragg
• Chin Kwai Yoong
Remuneration Committee
This Committee is primarily responsible for reviewing and
recommending the appropriate level of remuneration for the NonExecutive Directors, Executive Deputy Chairman and Chief Executive
Officer. In respect of the financial year ended 31 January 2008,
the Committee has evaluated the performance of the Executive
Deputy Chairman and Chief Executive Officer based on agreed
performance targets set by the Board and made recommendations
on their performance bonuses for the Board’s approval.
Members of the Remuneration Committee, all of whom are
independent Non-Executive Directors, are:• Chin Kwai Yoong (Chairman) who was appointed on 1 March
2007
• Dato’ Mohamed Khadar Merican
Option Committee
This Committee is primarily responsible for administering the
Company’s 2003 Employee Share Option Scheme and 2003
Management Share Incentive Scheme in accordance with the
approved bye-laws and regulations, including selection of eligible
employees and option allocations. It also reviews the guidelines
and bye-laws relating to the schemes and advises the Board
accordingly.
Based on the recommendation of the Option Committee, the Board
had during the financial year under review approved the vesting
of a substantial number of share options pursuant to the 2003
Management Share Incentive Scheme to senior management
personnel in accordance with the overall performance of the
Company against the performance targets set by the Board.
The Option Committee also reviewed and made the necessary
recommendations to the Board for approval of the quarterly grant
of share options pursuant to the 2003 Employee Share Option
Scheme. The allocation of options to eligible employees to ensure
compliance with the bye-laws of the 2003 Employee Share Option
Scheme was also reviewed by the Audit Committee in accordance
with the Listing Requirements.
Members of the Option Committee are:• Dato’ Mohamed Khadar Merican (Chairman)
• Ralph Marshall
• Chin Kwai Yoong
1.6 Directors’ Remuneration
Remuneration Policy
The Board believes that remuneration should be sufficient to
attract, retain, motivate and incentivise Directors of the necessary
calibre, expertise and experience to lead the Group. In line with
this philosophy, remuneration for the Executive Director is aligned
to individual and corporate performance based on agreed key
performance indicators set by the Board. For Non-Executive
Directors, the level of remuneration reflects the experience and
level of responsibilities shouldered by the respective Directors.
The Remuneration Committee recommends the policy framework
and is responsible for assessing the compensation package for the
Executive Deputy Chairman as well as the Chief Executive Officer.
The remuneration of the Executive Deputy Chairman and Chief
Executive Officer consists of salary, bonus, benefits-in-kind and
share options respectively. The Company also contributes to the
employee provident fund for the Executive Deputy Chairman.
44
Remuneration for Non-Executive Directors is determined by
the Board as a whole. Individual directors do not participate in
determining their own remuneration package. The Board, subject
to a maximum sum as authorised by the Company’s shareholders,
determines fees payable to Non-Executive Directors. NonExecutive Directors are also entitled to meeting allowances and
reimbursement of expenses incurred in the course of their duties
as Directors. Non-Executive Directors are not entitled to share
options in the Company.
Elements of Remuneration of Executive Director
The Executive Director, Ralph Marshall’s remuneration package is
based on the following elements:
• Monthly executive stipend
• Annual discretionary cash incentive and share options as
recommended by the Remuneration Committee and approved
by the Board
• Defined contribution plan, benefits in kind and other
allowances
• A fully maintained company car and driver, medical coverage
for the Executive Director and his family, and social club
memberships
• A one-off contract renewal fee
Under the Executive Director’s service contract, the term of office is
fixed for 3 years, up to 2009, subject to renewal, with a contractual
notice of termination of not less than 12 months. There are no
express contractual terms providing for compensation in the event
of early termination of his appointment.
Elements of Remuneration of Non-Executive Directors
The remuneration structure is as follows:
• Fees for duties as Directors and additional fees for undertaking
responsibilities as Chairman or member of Board Committees
• Meeting allowances
The Chairman of the Board is entitled to a fixed car allowance and
the services of a driver.
Details of Directors’ remuneration for the financial year ended
31 January 2008 are set out below:
Aggregate Remuneration
Fees (RM’000)
Other
Emoluments*
(RM’000)
Share Based
Payment (RM’000)
Defined Contribution
Plan (RM’000)
Total (RM’000)
160
208
n/a
n/a
368
Dato’ Mohamed Khadar Merican
119
43
n/a
n/a
162
414
65
n/a
n/a
479
Chin Kwai Yoong
119
47
n/a
n/a
166
Fees (RM’000)
Salary and
Emoluments**
(RM’000)
Share Based
Payment (RM’000)
Defined Contribution
Plan (RM’000)
Total (RM’000)
Ralph Marshall
n/a
2,516
384
353
3,253
Total
812
2,879
384
353
4,428
Non-Executive
Executive
* Inclusive of allowances and/or benefits in kind.
** Inclusive of salary, bonus and benefits in kind.
45
Analysis of Remuneration
Range of Remuneration
No. of Directors
Executive
Non-Executive
RM150,001 – RM200,000
-
2
RM350,001 – RM400,000
-
1
RM450,001 – RM500,000
-
1
RM3,250,001 – RM3,300,000
1
-
2. SHAREHOLDERS AND INVESTORS
2.1 Communication with Shareholders and Investor Relations
The Board is committed to providing investors accurate, useful and
timely information about the Group, its businesses and its activities.
The Group regularly communicates with the investor community
in conformity with disclosure requirements. The Chairman and
Executive Deputy Chairman of the Board are representatives of
major shareholders and constant communication between them
and the rest of the Board ensures that views of these major
shareholders are known and understood. The Board believes that
clear and consistent communication with investors encourages
a better appreciation of the Company’s business and activities,
reduces share price volatility, and allows the Company’s business
and prospects to be evaluated properly.
To this end, the Board obtains regular feedback from key senior
management and the investor relations team who dialogue with
institutional investors on an ongoing basis throughout the year.
These dialogues include telephone conferences with analysts and
fund managers after the announcement of the Group’s quarterly
financial results and participation in non-deal road shows and key
investor conferences overseas. Pertinent information on the Group
is also available on the Company’s website at www.astroplc.com
and in the Annual Report.
The Group maintains strict confidentiality and employs best efforts
to ensure that no disclosure of material information is made on
a selective basis to any individuals unless such information has
previously been fully disclosed and announced to the relevant
regulatory authorities. With this philosophy in mind, the Board
views the AGM as the primary forum to communicate with
shareholders. The Company will convene its fifth AGM on 24 July
2008 during which shareholders will have the opportunity to direct
their questions to the Board. The Board encourages other channels
of communication with shareholders. For this purpose, the Board
has identified Dato’ Mohamed Khadar Merican as the Senior
Independent Director to whom queries or concerns regarding the
Group may be conveyed. Dato’ Mohamed Khadar Merican can be
contacted via the following channels:
Post : Dato’ Mohamed Khadar Merican
c/o Corporate Secretarial Department
3rd Floor, All Asia Broadcast Centre
Technology Park Malaysia
Lebuhraya Puchong-Sungai Besi
57000 Kuala Lumpur
Fax : (603) 9543-6877
E-mail: [email protected]
Investors may also direct their queries to:
Carolyn Lim, Senior Manager, Investor Relations
Tel : (603) 9543-6688
Fax : (603) 9543-6877
Email : [email protected]
3. ACCOUNTABILITY AND AUDIT
3.1 Financial Reporting
The Board is responsible for presenting a clear, balanced and
comprehensive assessment of the Group’s financial position,
performance and prospects each time it releases its quarterly
and annual financial statements to its shareholders. The Board is
responsible for ensuring that the financial statements give a true
and fair view of the results of operations and the financial state of
affairs of the Group.
The financial statements of the Group and Company are required
to be prepared in compliance with International Financial Reporting
Standards. The Statement of Directors’ Responsibilities is set out
on Page 55 of this Annual Report.
3.2 Internal Control
The Statement on Internal Control provides an overview of the state
of internal controls within the Group and is set out on Pages 48 to
49 of this Annual Report.
3.3 Relationship with the Auditors
The Audit Committee’s role with respect to internal and external
auditors is described in the Audit Committee Report set out on
Pages 46 to 47 of this Annual Report.
46
The Board is pleased to present the Report of the Audit Committee
(“Committee”) for the financial year ended 31 January 2008 in
accordance with Paragraph 15.16 of the Listing Requirements.
2. COMPOSITION AND MEETINGS
3. Summary of Activities
The Committee comprises three Board members, all of whom
fulfill the qualifying criteria prescribed by the Listing Requirements
of Bursa Securities. Members of the Committee including its
Chairman are appointed by the Board on the recommendation
of the Nomination and Corporate Governance Committee. In
accordance with the Committee’s Charter, each member of the
Committee may serve for a period of up to three years, extendable
by no more than two additional three-year periods, so long as the
members continue to be independent.
During the financial year ended 31 January 2008, the Committee
reviewed the statutory financial statements, quarterly financial
reports and any other related formal financial statements and
announcements of the Group for quality of disclosure and
discussed significant issues to ensure that compliance with
applicable approved accounting standards and legal requirements
were met. The Committee also reviewed the external auditors’
report on the Group’s statutory financial statements and quarterly
financial reports prior to making a recommendation to the Board
for approval and public release thereof.
The Committee is chaired by Bernard Anthony Cragg and current
members comprise Dato’ Mohamed Khadar Merican and Chin Kwai
Yoong, all of whom are independent Non-Executive Directors.
The Committee had also performed an assessment of the external
auditors’ independence, objectivity and effectiveness, including
taking into consideration the provision of non-audit services by the
external auditors before recommending their re-appointment and
remuneration. The Group has a policy on the provision of audit and
non-audit services by the external auditors, the general principle
being that the audit firm should not be requested to perform nonaudit services that may impair the objectivity and independence
of the audit firm. An analysis of the audit and non-audit services
including the fees incurred is provided by the external auditors
and reviewed by the Audit Committee on a quarterly basis. The
Audit Committee has discussed the matter of audit independence
with the external auditors and is satisfied that the independence
of the audit firm is not impaired by the provision of the non-audit
services. The Audit Committee has also received and reviewed
written confirmation from the external auditors that they continue
to be independent and objective within the meaning of applicable
Malaysian and United Kingdom regulatory and professional
requirements.
The Committee reviews and monitors the integrity of the Group’s
financial reporting process, in addition to reviewing the Group’s risk
management process and system of internal controls. It also reviews
the Group’s audit process, compliance with legal and regulatory
requirements, code of business conduct and any other matters that are
specifically delegated by the Board.
1. TERMS OF REFERENCE
The Committee is duly authorised by the Board to:
• review the Group’s significant accounting policies
• investigate any activities within its charter
• seek any information that it requires from any employee of the
Group and to be provided with full and unrestricted access to
such information
• maintain direct communication channels with the external and
internal auditors
• obtain external legal or independent professional advice if
necessary
• have access to the Group’s resources, at the Group’s
expense
• convene meetings with the internal and external auditors
without the executive members of the Committee, if
necessary
• recommend steps or proposed courses of action, where
required, to the Board on matters arising from the discharge
of the Committee’s duties and responsibilities
The Committee met five times during the financial year. Details
of members and their attendance at meetings are included on
page 42. The Group’s external auditors, senior members of the
Corporate Assurance Division (internal audit) and certain designated
members of senior management also attended the meetings at the
invitation of the Committee. The Company Secretary acts as the
Secretary of the Committee.
The Committee also met with the external auditors twice and
Corporate Assurance once in separate sessions during the
financial year without the presence of management. In addition,
the Committee members either collectively or individually met with
the external auditors and Corporate Assurance during the financial
year.
47
The Committee verified the allocation of options to eligible
employees to ensure compliance with the bye-laws of the 2003
Employee Share Option Scheme during the financial year under
review. The Committee also reviewed the adequacy of its charter,
taking into account changes to the applicable laws, regulations,
auditing principles and best practices, as well as conducted
an ongoing self-assessment of its effectiveness in meeting its
responsibilities on a quarterly basis.
The Chairman of the Committee reports regularly to the Board
on the activities of the Committee. In addition to those described
above, other activities included:
Financial Reporting and Compliance
• Review of matters relating to the accounting, auditing, financial
reporting practices and procedures of the Group.
Related Party Transactions
• Review any related party transactions entered into by the Group
to ensure that the transactions have been conducted on the
Group’s normal commercial terms and that the internal control
procedures relating to such transactions are sufficient.
Risk Management and Internal Control
• Review the enterprise risk management process implemented
by the Group and results of the process to facilitate the
identification, evaluation, monitoring and management of
risks.
• Review adequacy of the Group’s internal operational processes
to identify key organisational risks and the systems in place to
monitor and manage these risks.
• Review adequacy of the Group’s policies and procedures
relating to internal control, financial, auditing and accounting
matters such that it complies with our business practices.
Internal Audit
• Review adequacy of the Corporate Assurance Charter and
effectiveness of Corporate Assurance.
• Review the plan, scope of the Corporate Assurance function
including the authority, impartiality, proficiency and adequacy
of competency and resources to carry out its function.
• Review results of its reports, findings and recommendations
and action taken on the recommendations.
• Review effectiveness and performance of audit staff and
approve appointment or termination of senior staff.
• Review the results of the external assessment performed on
the Corporate Assurance Division.
External Audit
• Nominate the firm to be retained as external auditors
after taking into consideration the terms of engagement,
independence of the firm and its remuneration for audit and
non-audit services.
• Review the external auditors’ audit plan, scope of annual audit
or other examinations including:
- the annual audit report and accompanying reports to
management.
- reports of their other examinations.
- assistance given by the Group and the Group’s employees
to the external auditors.
Other Responsibilities
• Review the management quarterly report on new laws
and regulations, material litigation and enterprise risk
management.
4. Corporate Assurance
The Group has an internal audit function, known as Corporate
Assurance, to assist the Committee in evaluating and improving
the effectiveness of risk management, control and governance
processes through a systematic and disciplined approach. The
Head of Corporate Assurance reports directly to the Chairman of
the Committee.
Corporate Assurance performs a variety of reviews such as
financial, operational and information systems audits. Other reviews
are also performed to ensure that the Group’s resources are
utilised effectively and efficiently. Additionally, Corporate Assurance
ensures that the Group’s activities comply with the relevant laws
and regulations, and that its interests in business transactions are
protected and assets safeguarded.
Corporate Assurance adopts a risk-based methodology in
planning and conducting audits by focusing on key risks auditable
areas. This approach is consistent with the Group’s established
framework for designing, implementing and monitoring of
its control systems. Corporate Assurance works closely with
the Enterprise Risk Management Division to monitor the risk
governance framework and the risk management processes of
the Group to ensure their effectiveness. Corporate Assurance also
undertakes special reviews such as governance enhancement,
systems implementation controls as well as approval procedures
for related party transactions.
48
Your Board recognises that risk management is an integral part of the Group’s business operations and has
implemented a formal and ongoing process for identifying, evaluating, monitoring and managing the significant risks
of failure in accordance with the guidance prescribed in the Malaysian Code on Corporate Governance. The Board of
Directors is responsible for the Group’s system of internal controls and risk management and for reviewing its adequacy
and integrity in order to safeguard shareholders’ investment and the Company’s assets. These systems are designed
to manage, rather than eliminate the risk of failure in achieving the Group’s business objectives and to provide
reasonable, but not absolute, assurance against material misstatement or loss.
The Board however, does not regularly review the internal control
systems of its associated companies as it does not have control over
their operations. The Company’s interests are safeguarded through
representations on the boards of the associated companies and receipt
of management accounts. These representations and reviews also
provide the Board with information to assess the performance of the
Group’s investments.
This Statement, prepared in accordance with paragraph 15.27(b) of
the Listing Requirements of Bursa Securities has been approved by
the Board and reviewed by the external auditors as required under
paragraph 15.24. The external auditors’ review was performed in
accordance with Recommended Practice Guide 5 (“RPG 5”) issued
by the Malaysian Institute of Accountants. Based on their review, the
operations, is an ongoing activity. The Board is assisted by the
Group’s Enterprise Risk Management Committee (“ERMC”), which
is chaired by the Company’s Chief Executive Officer and comprises
senior management from each business unit. The ERMC meets
on a quarterly basis to deliberate on the risks identified, controls
and risk mitigation strategies which are thereafter tabled to and
reviewed by the Audit Committee on a quarterly basis.
external auditors have reported to the Board that nothing has come
to their attention that causes them to believe that this Statement is
inconsistent with their understanding of the process the Board has
adopted in the review of the adequacy and integrity of the internal
control of the Group. RPG 5 does not require the external auditors to
and they did not consider whether this Statement covers all risks and
controls, or to form an opinion on the effectiveness of the Group’s risk
and control procedures.
A list of the significant risk factors faced by the Group and mitigating
measures taken, is included in a separate section of this report on
page 23.
The ERM activities undertaken by the ERM Division on an ongoing
basis include facilitating the development of risk profiles for the
Group’s key initiatives, and providing quarterly updates on and
1. RISK MANAGEMENT
Your Board is committed to and supports the implementation of
Enterprise Risk Management (“ERM”) as an integral part of the
Group’s practices, planning and business processes, where the
identification and mitigation of risk at all levels, from strategic to
49
consolidating the business units’ risk profiles into the Group
risk profile. The risks and controls identified are independently
validated by the Corporate Assurance function as part of their
ongoing reviews. The ERM Division also conducts risk awareness
sessions across the Group to sustain risk awareness and a risk
management culture.
2. CONTROL ENVIRONMENT
Your Board is committed to maintaining a sound internal control
structure that includes a process of continuous monitoring and
review of the effectiveness of the control activities, to govern the
manner in which the Group and its staff conduct themselves. Some
of the key elements of the internal control structure and processes
include:
• Organisational structure
The roles and responsibilities of the Board, Board Committees
and management are clearly defined to ensure proper
identification of accountability and segregation of duties to
promote effective and independent stewardship in the best
interests of shareholders. In particular, the Audit Committee
comprising wholly of independent non-executive directors is
responsible for reviewing the integrity of the Group’s financial
reporting process, risk management process and control
systems.
• Limits of delegated authority
These specify the levels of authority delegated to authorised
management for capital commitment and operational
expenditure on behalf of the Group. The limits are reviewed
and updated regularly to reflect business, operational and
structural changes.
• Documented policies and procedures
Policies and procedures relating to finance, human resource
and information systems have been established for operating
units within the Group. Accounting systems and financial
processes are governed by the Group Finance Manual.
In addition, key business units within the Group provide a
quarterly statement confirming compliance to the Group’s
established policies and procedures.
accuracy and integrity of the capturing, recording, billing,
collection and reporting of key revenue producing events
and transactions through a continuous process of detecting,
quantifying, monitoring and reporting revenue leakages. The
Programme Management Office on the other hand ensures
that project timelines, budgets and deliverables are adequately
monitored and conforms to established guidelines, policies
and procedures.
• Detailed budget process
The Board is responsible for approving the consolidated Group
budget on a yearly basis upon reviewing the budget for each
business within the Group. As part of the budget process,
performance indicators have been established for each and
every business unit. Performance is monitored regularly and
a reporting system highlights significant variances against
budgets for investigation and follow-up by management of
the respective businesses. Monthly financial and operational
reports are provided to the Board with key statistics publicly
disclosed to shareholders every quarter.
• The Corporate Assurance function
Reporting to the Audit Committee, Corporate Assurance
provides objective and independent assurance on the
effectiveness of the control environment and risk management
systems. Its activities are governed by a strategic review plan
that is reviewed by management and approved by the Audit
Committee. Subsequent revisions to the plan arising from
changes to the Group’s operations and priorities are reported
to the Audit Committee for approval.
• Code of Business Ethics
A formal code emphasising the Group’s corporate values,
ethical behaviour and the manner in which staff, vendors and
suppliers should conduct themselves has been issued and
acknowledged by all Directors and staff.
• Management Assurance functions
Management assurance functions such as Revenue Assurance
and Programme Management Office have been established
for key business units. The revenue assurance function
provides an end-to-end process to verify the completeness,
3. CONCLUSION
Your Board is pleased to report that there were no significant
internal control deficiencies or weaknesses that resulted in material
losses or contingencies to the Group for the financial year under
review.
50
Directors’ Report and
Audited Statutory
Financial Statements
51
Directors’ Report
52
Statement of Directors’ Responsibilities
55
Independent Auditors’ Report
56
Consolidated Income Statement
57
Consolidated Balance Sheet
58
Consolidated Cash Flow Statement
59
Consolidated Statement of Changes in Equity
60
Notes to the Consolidated Financial Statements
62
Company Financial Statements
112
Statutory Declaration 125
52
Directors’ Report
The Directors present their report to the members together with the audited financial statements of the
Group and Company for the financial year ended 31 January 2008.
DIVIDENDS
During the financial year the following dividends were paid:
RM’000
Principal Activities
The principal activities of the Company are investment holding and provision of management services.
The Group is primarily engaged in the provision of Direct-to-Home subscription television services, radio
broadcasting services, film library licensing, multi-media interactive services, television content creation,
aggregation and distribution and investment holding. Further details of the principal activities of the
subsidiaries are set out in Note 36 to the financial statements. There was no significant change in the
nature of these activities of the Group and the Company during the financial year.
The Company and its subsidiaries are collectively referred to as the Group.
Review Of Results
Group
2008
RM’000
2007
RM’000
(Loss)/Profit attributable to equity holders of the Company
Loss attributable to minority interests
(6,158)
(5,712)
160,428
(9,168)
(11,870)
151,260
(Loss)/Profit for the year In respect of the financial year ended 31 January 2007:
– Second interim tax exempt dividend of 2.0 sen per share, paid on 27 April 2007
– Final tax exempt dividend of 3.0 sen per share, paid on 30 August 2007
38,669
58,021
In respect of the financial year ended 31 January 2008:
– First interim tax exempt dividend of 2.0 sen per share, paid on 11 October 2007
– Second interim tax exempt dividend of 3.0 sen per share, paid on 14 January 2008
38,680
58,021
193,391
A third interim dividend of 3.0 sen per share consisting of gross dividend of 2.7 sen per share less 25%
Malaysian income tax and tax exempt dividend of 0.3 sen per share amounting to RM44,966,000 in
respect of the financial year ended 31 January 2008 was declared and is payable on 24 April 2008.
The Directors also recommend a final tax exempt dividend payment of 2.0 sen per share estimated at
RM38,681,000 in respect of the financial year ended 31 January 2008 subject to the approval of the
Company’s shareholders at the forthcoming Annual General Meeting. The final tax exempt dividend will be
paid on a date to be determined.
Business Review
The Companies Act 1985 requires the Company to set out in this report a fair review of the business of
the Group during the financial year ended 31 January 2008, including an analysis of the position of the
Group at the end of the financial year, and a description of the principal risks and uncertainties facing the
Group. This information is disclosed in the following sections of the Annual Report.
• Letter to Shareholders
• Business and Financial Review
• Risk Factors
Financial Instruments
Details of the Group’s use of financial instruments, together with information on the risk management
objectives and policies, are disclosed in Note 3 to the financial statements.
Reserves and Provisions
All material transfers to or from reserves or provisions are presented in the financial statements.
Share Capital
Details of movements in share capital are disclosed in Note 26 to the financial statements.
Corporate Governance
Details concerning the Company’s arrangements relating to corporate governance are disclosed in the
Corporate Governance Statement in the Annual Report.
53
DIRECTORS’ report
entitled to control the exercise of 100% of the votes attached to the voting shares in the immediate
holding companies of each of HTSB Subsidiaries. HTSB Subsidiaries hold the Shares under
discretionary trusts for Bumiputera objects. As such, he does not have any economic interest
over these Shares since such interest is held subject to the terms of the discretionary trusts for
Bumiputera objects.
Directors
The Directors who have held office at any time during the financial year are:
Dato’ Haji Badri bin Haji Masri Augustus Ralph Marshall Dato’ Mohamed Khadar bin Merican Bernard Anthony Cragg Chin Kwai Yoong Chairman and Non-Executive Director
Executive Deputy Chairman
Independent Director
2003 Employee Share Option Scheme (“ESOS”) and 2003 Management Share Incentive Scheme
(“MSIS”)
In accordance with the Company’s Articles of Association, Augustus Ralph Marshall and Dato’ Mohamed
Khadar bin Merican retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer
themselves for re-appointment.
Employee Share Option Scheme
The Company’s ESOS and MSIS came into effect on 22 October 2003 for a period of 10 years. These
Schemes are governed by the 2003 Bye-Laws, which were approved by the Board of Directors and
Shareholders of the Company on 29 September 2003.
Directors Interest
The details of holdings in the shares of the Company by the Directors in office as at 31 January 2008
were as follows:
Number of ordinary shares of 10p each
As at
1.2.2007
Acquired
Disposed
As at
31.1.2008
Details of options over ordinary shares of the Company held by a Director of the Company are set out
below:
Number of options over ordinary shares of 10p each
Direct interest
Augustus Ralph Marshall
1,000,000
Dato’ Mohamed Khadar bin Merican
250,000 Indirect interest
–
–
–
–
Dato’ Haji Badri bin Haji Masri
–
–
177,946,535
1,000,000 (1)
250,000 (1)
177,946,535
(2)(3)
Held through a nominee.
(2)
Deemed to have an interest over 500,000 ordinary shares of 10p each in the Company (“Shares”)
held by Ratna Pelangi Sdn. Bhd. (“RPSB”) by virtue of his 99% direct equity interest in RPSB.
(3)
Deemed to have an interest over 177,446,535 Shares in which Harapan Terus Sdn. Bhd. (“HTSB”)
has an interest by virtue of his 25% direct equity interest in HTSB. HTSB is deemed to have an
interest in all the Shares in which Berkat Nusantara Sdn. Bhd., Nusantara Cempaka Sdn. Bhd.,
Nusantara Delima Sdn. Bhd., Mujur Nusantara Sdn. Bhd., Gerak Nusantara Sdn. Bhd. and Sanjung
Nusantara Sdn. Bhd. (collectively “HTSB Subsidiaries”) have an interest by virtue of HTSB being
(1)
The principal features of ESOS and MSIS are summarised in Note 27 to the financial statements.
As at
1.2.2007
Granted
Forfeited
As at
31.1.2008
ESOS
2,970,800
1,477,800
– 4,448,600
MSIS
1,500,000
–
150,000 1,350,000
Other than as disclosed above, according to the register of Directors’ shareholdings, the Directors in office
at the end of the financial year did not hold any interest in shares and options over ordinary shares in the
Company or shares and options over ordinary shares of its related corporations during the financial year.
Other interests
The Company maintains third party indemnity and liability insurance for its Directors and Officers against
any financial consequence of actions which may be brought against them by third parties for acts or
omissions in the course of the performance of their duties.
54
DIRECTORS’ report
Policy and Practice on Payment of Creditors
Auditors and Disclosure of Information to Auditors
As an investment holding company and management services provider, the Company does not have any
trading relationships with suppliers. However, its operating subsidiaries pay their suppliers in accordance
with the relevant contractual and legal obligations, provided the terms and conditions are met by the
suppliers.
The Auditors, PricewaterhouseCoopers LLP, have expressed their willingness to continue in office.
A resolution for their re-appointment as Auditors of the Company will be proposed at the forthcoming
Annual General Meeting.
The credit terms are disclosed in Note 24 to the financial statements.
In accordance with the provision of Section 2342A of the Companies Act 1985, each of the Directors in
office at the date of approval of this report has confirmed that:
There were no significant post balance sheet events as at 23 April 2008, except as disclosed in Notes 16
(b) and 25 (d) to the financial statements.
• So far as he is aware, there is no relevant audit information (as defined in the Companies Act 1985) of
which the Company’s Auditors are unaware; and
• He has taken all the steps that he ought to have taken as a Director to make himself aware of any
relevant audit information and to establish that the Auditors are aware of that information.
United Kingdom Accounting Pronouncement
Approved by the Board of Directors on 23 April 2008 and signed on its behalf by
Significant Post Balance Sheet Events
The financial statements of the Group and Company have been prepared in accordance with International
Financial Reporting Standards (“IFRSs”) as adopted by the European Union issued by the International
Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting
Interpretations Committee (“IFRIC”) of the IASB and with those parts of the United Kingdom Companies
Act 1985 applicable to Companies reporting under IFRS.
In addition to complying with IFRSs as adopted by the European Union, the consolidated financial
statements also comply with the IFRSs as issued by the International Accounting Standards Board.
DATO’ HAJI BADRI BIN HAJI MASRI
DIRECTOR
Kuala Lumpur
AUGUSTUS RALPH MARSHALL
DIRECTOR
55
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and financial statements in accordance with applicable laws and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the Group and Parent Company financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union. In preparing these financial statements, the Directors have also elected to comply with IFRSs, issued by the International Accounting Standards
Board (IASB). The financial statements are required by law to give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group and Company for that period.
In preparing those financial statements, the Directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state that the financial statements comply with IFRSs as adopted by the European Union and IFRSs issued by IASB; and
prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Group and Company will continue in business, in which case there should be supporting assumptions or
qualifications as necessary.
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Group and Company and to enable them to ensure that the financial
statements comply with the United Kingdom Companies Act 1985. They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
56
Independent Auditors’ Report
to the members of ASTRO ALL ASIA NETWORKS plc
We have audited the Group and Parent Company financial statements (the ‘’financial statements’’)
of ASTRO ALL ASIA NETWORKS plc for the financial year ended 31 January 2008 which comprise the
Consolidated and Company Income Statements, the Consolidated and Company Balance Sheets, the
Consolidated and Company Cash Flow Statements, the Consolidated and Company Statements of Change
in Shareholders’ Equity and the related notes. These financial statements have been prepared under the
accounting policies set out therein.
Respective responsibilities of Directors and Auditors
The Directors’ responsibilities for preparing the Annual Report and the financial statements in accordance
with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European
Union are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory
requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion,
has been prepared for and only for the Company’s members as a body in accordance with Section 235
of the Companies Act 1985 and for no other purpose. We do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the financial statements give a true and fair view and have
been properly prepared in accordance with the Companies Act 1985. We also report to you whether in
our opinion the information given in the Directors’ Report is consistent with the financial statements. The
information given in the Directors’ Report includes that specific information presented in the Letter to
Shareholders, Business and Financial Review and Risk Factors that is cross referred from the Business
Review of Results section of the Directors’ Report.
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we
have not received all the information and explanations we require for our audit, or if information specified
by law regarding directors’ remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with
the audited financial statements. The other information comprises only the Directors’ Report, Letter to
Shareholders and, Business and Financial Review and Risk Factors. We consider the implications for our
report if we become aware of any apparent misstatements or material inconsistencies with the financial
statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued
by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to
the amounts and disclosures in the financial statements. It also includes an assessment of the significant
estimates and judgments made by the directors in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the Group’s and Company’s circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
financial statements are free from material misstatement, whether caused by fraud or other irregularity or
error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in
the financial statements.
Opinion
In our opinion:
• the financial statements give a true and fair view, in accordance with IFRSs as adopted by the
European Union, of the state of the Group’s and the Parent Company’s affairs as at 31 January 2008
and of the Group’s loss and the Parent Company’s profit and the Group’s and the Parent Company’s
cash flows for the year then ended;
• the financial statements have been properly prepared in accordance with the Companies Act 1985;
and
• the information given in the Directors’ Report is consistent with the financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
London
23 April 2008
57
Consolidated Income Statement
for the financial year ended 31 January 2008
Note
2008
RM’000
2007
RM’000
Customer Acquisition Costs (“CAC”) analysed as follows:
2008
RM’000
2007
RM’000
Set top box costs – included in Cost of sales
Set top box revenue – included in Revenue 230,301
(15,319)
197,442
(19,107)
Set top box subsidies Marketing and distribution costs
214,982
138,271
178,335
95,559
422,917
CAC
353,253
273,894
(134,993)
–
Gross profit as per above
Set top box subsidies 1,069,228
214,982
958,213
178,335
(92,415)
–
Gross profit before set top box subsidies
1,284,210
1,136,548
201,339
Profit from operations
31,023
Finance income (net)
10
Share of post tax results from investments
accounted for using the equity method
(95,731)
422,917
17,519
(160,025)
Profit before taxation
Taxation
Revenue
6
Cost of sales 2,601,698 2,224,302
(1,532,470) (1,266,089)
Gross profit
Other operating income
Marketing and distribution costs
Administrative expenses
1,069,228
15,024
(253,309)
(402,196)
958,213
12,468
(185,580)
(362,184)
Costs to provide services to PTDV and expenses incurred
16
in developing a DTH business proposal in Indonesia
Write-off of assets and balances arising from
the investment in PTDV
16
428,747
11
136,631
(148,501)
280,411
(129,151)
(11,870)
151,260
Equity holders of the Company
30
Minority interests
(6,158)
(5,712)
160,428
(9,168)
(11,870)
151,260
13
Earnings per share (in sen)
– Basic
– Diluted
(0.32)
N/A
8.32
8.29
(Loss)/Profit for the year
Attributable to:
The accompanying notes on pages 62 to 124 form part of the financial statements.
58
Consolidated Balance Sheet
as at 31 January 2008
Note
2008
RM’000
2007
RM’000
15
1,025,265
312,755
16
17
18
19
387,722
255,957
3,000
452,737
202,509
395,693
–
457,549
2,124,681
1,368,506
39,551
461,996
–
1,786
986,831
53,042
516,747
12,008
427
1,075,665
1,490,164
1,657,889
Non Current Assets
Property, plant and equipment
Interest in investments accounted for using
the equity method
Deferred tax assets
Financial asset (other investment)
Intangible assets
Note
2008
RM’000
2007
RM’000
170,197
10,727
764,952
205,248
11,788
–
945,876
217,036
1,620,435
1,847,385
Share capital
26
Share premium
28
29
Merger reserve
Exchange reserve
Hedging reserve
Other reserve
(Accumulated losses)/retained earnings
1,200,049
31,629
518,446
(71,757)
(140)
83,074
(142,129)
1,199,194
27,643
518,446
(30,656)
12,008
58,798
56,430
30
Minority interests
1,619,172
1,263
1,841,863
5,522
1,620,435
1,847,385
Non-Current Liabilities
Current Assets
Inventories
20
Receivables and prepayments
21
22
Derivative financial instruments
Tax recoverable
23
Cash and cash equivalents
Current Liabilities
Payables
Deferred tax liabilities
Borrowings
24
17
25
Capital and reserves attributable to
equity holders of the Company:
1,022,772
140
21,619
4,003
932,087
–
28,309
1,578
Total equity
1,048,534
961,974
Net current assets
441,630
695,915
Payables
Borrowings
Current tax liabilities
24
22
25
DIRECTOR
DIRECTOR
59
Consolidated Cash Flow Statement
Note
2008
RM’000
2007
RM’000
Cash Flows From Operating Activities
(Loss)/Profit for the financial year
14 (a)
Adjustments for non-cash items
(11,870)
679,517
151,260
528,234
Changes in working capital
Film library and programme rights
Inventories
Payables
667,647
679,494
(278,888)
13,491
(84,249)
249,112
(215,917)
(7,255)
(44,448)
169,619
Cash generated from operations
Income tax paid
Interest received
567,113
(8,687)
36,172
581,493
(3,436)
32,584
Net cash flow from operating activities
14 (b)
Cash Flows From Investing Activities
14 (c)
Cash Flows From Financing Activities
Net effect of currency translation
on cash and cash equivalents
594,598
(624,378)
(57,525)
610,641
(256,708)
(123,720)
(1,529)
(2,659)
Net (Decrease)/Increase In Cash And
Cash Equivalents
Cash And Cash Equivalents
At Beginning Of Financial Year
At End Of Financial Year
Note
2008
RM’000
(88,834)
227,554
1,075,665
848,111
986,831
1,075,665
23
2007
RM’000
60
Consolidated Statement of Changes in Equity
Attributable to equity holders of the Company
Non-distributable
Note
Share
capital
(Note 26)
RM’000
Share
premium
RM’000
Merger
reserve
RM’000
Exchange
reserve
RM’000
Hedging
reserve
RM’000
Other
reserve
RM’000
Retained
earnings
(accumulated)
losses)
RM’000
Total
RM’000
Minority
interest
RM’000
Total
equity
RM’000
At 1 February 2007
1,199,194
27,643
518,446
(30,656)
12,008
58,798
56,430
1,841,863
5,522
1,847,385
Currency translation differences
Cash flow hedge:
– fair value loss on hedging instrument
– transfer to income statement
–
–
–
(41,101)
–
–
–
(41,101)
(9)
(41,110)
–
–
–
–
–
–
–
–
(3,238)
(8,910)
–
–
–
–
(3,238)
(8,910)
–
–
(3,238)
(8,910)
Net losses recognised directly in equity
Loss for the year
–
–
–
–
–
–
(41,101)
–
(12,148)
–
–
–
–
(6,158)
(53,249)
(6,158)
(9)
(5,712)
(53,258)
(11,870)
Total recognised income and expenses
Share options:
– proceeds from shares issued
– value of employee services
– transfer upon exercise
30
Dilution of equity interest in subsidiaries
12
Dividends
–
–
–
(41,101)
(12,148)
–
(6,158)
(59,407)
(5,721)
(65,128)
855
–
–
–
–
3,986
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
25,266
(990)
–
–
–
–
990
–
(193,391)
4,841
25,266
–
–
(193,391)
–
–
–
1,462
–
4,841
25,266
–
1,462
(193,391)
1,200,049
31,629
518,446
(71,757)
(140)
83,074
(142,129)
1,619,172
1,263
1,620,435
At 31 January 2008 A ST R O A L L A S I A N E T W O R KS p l c
61
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Non-distributable
Note
Share
capital
(Note 26)
RM’000
Share
premium
RM’000
Merger
reserve
RM’000
Exchange
reserve
RM’000
Hedging
reserve
RM’000
Other
reserve
RM’000
Retained
earnings
(accumulated)
losses)
RM’000
Total
RM’000
Minority
interest
RM’000
Total
equity
RM’000
At 1 February 2006
1,195,432
11,024
518,446
(6,037)
15,422
40,584
(2,801)
1,772,070
14,457
1,786,527
Cash flow hedge:
– fair value gain on hedging instrument
– transfer to income statement –
–
–
(24,619)
–
–
–
(24,619)
–
(24,619)
–
–
–
–
–
–
–
–
4,906
(8,320)
–
–
–
–
4,906
(8,320)
–
–
4,906
(8,320)
Net income recognised directly in equity
Profit for the year
–
–
–
–
–
–
(24,619)
–
(3,414)
–
–
–
–
160,428
(28,033)
160,428
–
(9,168)
(28,033)
151,260
Total recognised income and expense
Share options:
Dilution of equity interest in a subsidiary
30
Dividends
12
–
–
–
(24,619)
(3,414)
–
160,428
132,395
(9,168)
123,227
3,762
–
–
–
–
16,619
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
23,060
(4,846)
–
–
–
–
4,846
–
(106,043)
20,381
23,060
–
–
(106,043)
–
–
–
233
–
20,381
23,060
–
233
(106,043)
1,199,194
27,643
518,446
(30,656)
12,008
58,798
56,430
1,841,863
5,522
1,847,385
At 31 January 2007
62
Notes to the Consolidated Financial Statements
31 January 2008
1 General Information
The principal activities of the Company are investment holding and provision of management
services. The Group is primarily engaged in the provision of Direct-to-Home subscription television
services, radio broadcasting services, film library licensing, multi-media interactive services,
television content creation, aggregation and distribution and investment holding. Further details of
the principal activities of the subsidiaries are set out in Note 36 to the financial statements. There
was no significant change in the nature of these activities of the Group and the Company during the
financial year.
2Summary Of Significant Accounting Policies
The principal accounting policies adopted in the preparation of these consolidated and company
financial statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.
A
Basis of preparation
The consolidated financial statements of the Group and the financial statements of the
Company have been prepared in accordance with International Financial Reporting Standards
(“IFRSs”) as adopted by the European Union issued by the International Accounting
Standards Board (“IASB”) and interpretations issued by the International Financial Reporting
Interpretations Committee (“IFRIC”) of the IASB and with those parts of the United Kingdom
Companies Act, 1985 applicable to Companies reporting under IFRS.
The address of the registered offices of the Company in England and Wales and Malaysia are as
follows:
The financial statements have been prepared under the historical cost convention, except
where otherwise stated in the accounting policies below.
– 10 Upper Bank Street
London, E14 5JJ
United Kingdom
–
The preparation of financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires Directors to exercise their judgement in the
process of applying the Group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed in Note 4.
Adoption of new and revised IFRS
The Group has adopted all of the new and revised Standards and Interpretations issued by the
IASB and the IFRIC of the IASB that are effective and relevant to its operations. The adoption of
the following new standards, amendment and interpretations did not affect the Group results
of operations or financial position:
The Company is a limited liability company incorporated in England and Wales under the United
Kingdom Companies Act, 1985 and is registered as a foreign company in Malaysia under the
Malaysian Companies Act, 1965 and has tax resident status in Malaysia.
3rd Floor, Administration Building
All Asia Broadcast Centre
Bukit Jalil
57000 Kuala Lumpur
Malaysia
The Company is listed on the Main Board of Bursa Malaysia Securities Berhad.
These consolidated financial statements have been approved for issue by the Board of Directors on
23 April 2008.
(a) Standards, amendment and interpretations effective for the financial year
IFRS 7, ‘Financial instruments: Disclosure’, and the complementary amendment to IAS 1,
‘Presentation of financial statements - Capital disclosures’, introduces new disclosures
relating to financial instruments and does not have any impact on the classification and
valuation of the group or Company’s financial instruments.
63
NotES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 January 2008
2Summary Of Significant Accounting Policies (cont’D.)
A
Basis of preparation (Cont’d.)
A
Basis of preparation (Cont’d.)
Adoption of new and revised IFRS (Cont’d.)
Adoption of new and revised IFRS (Cont’d.)
(a) Standards, amendment and interpretations effective for the financial year
(Cont’d.)
IFRIC 8, ‘Scope of IFRS 2’, requires consideration of transactions involving the issuance
of equity instruments, where the identifiable consideration received is less than the fair
value of the equity instruments issued in order to establish whether or not they fall within
the scope of IFRS 2. This standard does not have any impact on the Group or Company’s
financial statements.
(c) Standards, amendments and interpretations to existing standards that are not
yet effective and have not been early adopted by the Group and Company
• IFRS 8, ‘Operating segments’ (effective from 1 January 2009). The standard is still
subject to endorsement by the European Union. The Group will apply IFRS 8 from
1 February 2009, subject to endorsement by the EU;
• IFRIC 11, ‘IFRS 2-Group and treasury share transactions’ (effective from 1 March
2007);
• IFRIC 13, ‘Customer loyalty programmes’ (effective from 1 July 2008);
• IAS 23 (Amendment), ‘Borrowing costs’ (effective from 1 January 2009). The
amendment to the standard is still subject to endorsement by the European
Union. The Group will apply IAS 32 (Amended) from 1 February 2009, subject to
endorsement by the EU;
• Amendment to IFRS 2, ‘Share-based payment’ (effective from 1 January 2008);
• IFRS 3 (Revised), ‘Business combinations’ (effective from 1 July 2009);
• IAS 27 (Revised), ‘Consolidated and separate financial statements’ (effective from
1 July 2009); and
• IAS 1 (Revised), ‘Presentation of financial statements’ (effective from 1 January
2009).
IFRIC 9, Reassessment of embedded derivatives clarifies certain aspects of the
treatment of embedded derivatives under IAS 39 ‘Financial Instruments: Recognition and
Measurement’. IFRIC 9 prohibits reassessment of contracts for embedded derivatives
unless the cash flows resulting from the contract are changed significantly by a change
of the contract. This standard does not have any impact on the Group or Company’s
IFRIC 10, ‘Interim financial reporting and impairment’, prohibits the impairment losses
recognised in an interim period on goodwill and investments in equity instruments and in
financial assets carried at cost to be reversed at a subsequent balance sheet date. This
standard does not have any impact on the Group or Company’s financial statements.
(b) Standards, amendments and interpretations effective for the financial year but
not relevant
• IFRIC 7, ‘Applying the restatement approach under IAS 29, Financial reporting in
hyper-inflationary economic’.
The following standards, amendments and interpretations to existing standards have
been published and are mandatory for the Group’s and Company’s accounting periods
after 31 January 2008 but have not been early adopted:
The expected impact of the above standards, amendments and interpretations is being
assessed by the Group.
(d) Standards, amendments and interpretations to existing standards that are not
yet effective and not relevant to the Group and Company
• IFRIC 12, ‘Service concession arrangements’; and
• IFRIC 14, ‘IAS 19 – The limit on a defined benefit asset, minimum funding
requirements and their interaction’.
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 January 2008
B
Consolidation
Subsidiaries
Associates
Subsidiaries, which are those entities in which the Group has an interest of more than one half
of the voting rights or otherwise has power to govern the financial and operating policies, are
consolidated.
Associates are entities over which the Group generally has between 20% and 50% of the
voting rights, or over which the Group has significant influence over their operating and
financial policies, but over which it does not have control.
Subsidiaries are consolidated from the date on which control is transferred to the Group and
are no longer consolidated from the date that control ceases.
Under the purchase method of accounting, the cost of an acquisition is measured as the fair
value of the assets given up, equity instruments issued and liabilities incurred or assumed
at the date of exchange plus costs directly attributable to the acquisition. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair value at the acquisition date, irrespective of the extent of the
minority interest. The excess of the cost of acquisition over the fair value of the Group’s
share of the identifiable net assets of the subsidiary acquired is recorded as goodwill. If the
cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the
difference is recognised directly in the income statement.
Investments in associates are accounted for using the equity method of accounting. Under this
method, the Group’s share of the post-acquisition profits or losses of associates is recognised
in the income statement and its share of post-acquisition movements in reserves is recognised
in reserves. The cumulative post-acquisition movements are adjusted against the cost of the
investment.
Intercompany transactions, balances and unrealised gains on transactions between group
companies are eliminated; unrealised losses are also eliminated unless cost cannot be
recovered.
Minority interest is measured at the minorities’ share of the post acquisition fair values of the
identifiable assets and liabilities of the invested entities. A debit balance of minority interest is
recognised to the extent that the Group does not have a commercial and legal obligation in
respect of the losses attributable to the minority interest.
B
Consolidation (Cont’d.)
Unrealised gains on transactions between the Group and its associates are eliminated to the
extent of the Group’s interest in the associates; unrealised losses are also eliminated, unless
the transaction provides evidence of an impairment of the asset transferred.
The Group’s investment in associates includes goodwill (net of accumulated impairment) on
acquisition. When the Group’s share of losses in an associate equals or exceeds its interest
in the associate, the Group does not recognise further losses, unless the Group has incurred
obligations or amounts owing by the associate.
Dilution gains and losses arising in investments in associates are recognised in the income
statement.
Jointly Controlled Entities
Jointly controlled entities are corporations, partnerships or other entities over which there is
contractually agreed sharing of control by the Group with one or more parties. The Group’s
interests in jointly controlled entities are accounted for using the equity method of accounting.
65
31 January 2008
B
Consolidation (Cont’d.)
D
Foreign Currency Translation (Cont’d.)
Jointly Controlled Entities (Cont’d.)
Transactions and balances
Equity accounting involves recognising in the consolidated income statement the Group’s
share of the results of jointly controlled entities for the period. The Group’s investments in
jointly controlled entities are carried in the consolidated balance sheet at an amount that
reflects its share of the net assets of the jointly controlled entities and includes any long term
interests.
Foreign currency transactions are translated into RM using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement
of such transactions and from the retranslation of monetary assets and liabilities denominated
in foreign currencies are recognised in the income statement, except when deferred in equity
as qualifying cash flow hedges and qualifying net investment hedges.
Unrealised gains on transactions between the Group and its jointly controlled entities are
eliminated to the extent of the Group’s interest in the jointly controlled entities. Unrealised
losses are also eliminated unless costs cannot be recovered.
Foreign subsidiaries
Income statements and cash flows of foreign subsidiaries are translated into RM at average
exchange rates for the financial year and their balance sheets are translated at the exchange
rates ruling at financial year end. Differences on exchange arising from the translation
of opening net assets of foreign subsidiaries denominated in foreign currency are taken to
exchange reserve together with the differences between the income statement translated at
average exchange rates for the financial year and exchange rates ruling at the financial year
end. Other exchange differences are taken to the income statement when they arise.
On consolidation, exchange differences arising from the translation of the net investment in
foreign entities, and of borrowings and other currency instruments designated as hedges of
such investments, are taken to shareholders’ equity. When a foreign operation is sold, such
exchange differences are recognised in the income statement as part of the gain or loss on
disposal.
The financial statements of certain associates and jointly controlled entities are made up to
different reporting dates from the Company. For the purpose of applying the equity method of
accounting, the financial statements of these companies for the respective financial year end
have been used, and appropriate adjustments have been made for the effects of significant
transactions between that date and at year end.
C
Investments
At Company level, investments in subsidiaries, associates and jointly controlled entities
are shown at cost. Where an indication of impairment exists, the carrying amount of the
investment is assessed and written down immediately to its recoverable amount.
The investment in the Redeemable Convertible Preference Shares (“RCPS”) issued by a
subsidiary is carried at cost plus accretion of the expected yield from the investment.
D
Foreign Currency Translation
E
Property, Plant And Equipment
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using
the currency of the primary economic environment in which the entity operates (“the functional
currency”). The consolidated financial statements are presented in Ringgit Malaysia (“RM”),
which is the Company’s functional and presentation currency.
Freehold land is not depreciated as it has an unlimited useful life. Property, plant and
equipment are stated at historical cost less accumulated depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of property, plant and equipment.
Depreciation is calculated on the straight-line method to write off the cost of each asset to
their residual values over their estimated useful lives.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as
assets and liabilities of foreign entity and translated at the closing rate.
66
31 January 2008
F
E
Property, Plant And Equipment (Cont’d.)
The estimated useful lives of the assets are as follows:
Buildings
Satellite transponders
Equipment, fixtures and fittings
Broadcast and transmission equipment
40 years
11.5 years
4 – 10 years
3 – 10 years
No depreciation is calculated on assets under construction until the assets are completed
and are ready for their intended use. Leased assets capitalised are depreciated over their
estimated useful lives or lease period, whichever is shorter.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each
balance sheet date. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount.
At each balance sheet date, the Group assesses whether there is any indication of impairment.
If such indications exist, an analysis is performed to assess whether the carrying amount
of the asset is fully recoverable. A write down is made if the carrying amount exceeds the
recoverable amounts. See policy Note G on impairment of assets.
Gains and losses on disposals are determined by comparing proceeds with the carrying
amount of the assets and are included in the income statement.
F
Intangible Assets (Cont’d.)
(b) Film library
The Group’s film library comprises acquired films and films produced for the Group with
the primary intention to exploit the library through release and licensing of such films as
part of the Group’s long-term operations. The library is stated at cost less accumulated
amortisation.
Amortisation of the film library is on an individual title basis, based on the proportion
of the actual income earned during the period against the estimated ultimate revenue
expected to be earned over the revenue period, not exceeding twenty years. Estimated
ultimate revenue expected to be earned is reviewed periodically and additional
impairment losses are recognised if appropriate. Amortisation is included in cost of
sales.
(c) Programme rights
The programme rights comprise rights licensed from third parties and programmes
produced for the Group and production in progress with the primary intention to
broadcast in the normal course of the Group’s operating cycle. The rights are stated at
cost less accumulated amortisation.
The Group amortises programme rights based on an accelerated basis over the license
period or estimated useful life if shorter, from the date of first transmission, to match
the costs of consumption with the estimated benefits to be received. Amortisation is
included in cost of sales. The amortisation period is no more than five years.
The cost of programme rights for sports, current affairs, variety and light entertainment
is fully amortised on the date of first transmission.
Intangible Assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition of a subsidiary/associate/
jointly controlled entity over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary/associate/jointly controlled entity at the date of
acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets.
Goodwill on acquisition of investments accounted for using the equity method is included
in the investments. Goodwill is not amortised, but is subject to an annual review for
impairment and carried at cost less accumulated impairment losses. Any impairment is
charged to the income statement as it arises. The calculation of the gains and losses on
the disposal take account of the carrying amount of goodwill relating to the entity sold.
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31 January 2008
F
Intangible Assets (Cont’d.)
G
Impairment Of Assets
(d) Software costs
Assets that have an indefinite useful life are not subject to amortisation or depreciation and
are tested annually for impairment. Assets that are subject to amortisation or depreciation
are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units).
An impairment loss is recognised immediately in the income statement as are any reversals of
impairment losses.
A reversal of impairment loss should be recognised in the income statement for assets carried
at cost and treated as a revaluation increase for assets carried at revalued amount.
H
Leases
Costs that are directly associated with identifiable and unique software products
controlled by the Group and that will probably generate economic benefits exceeding
costs beyond one year, are recognised as intangible assets. All other costs associated
with developing or maintaining computer software programmes are recognised as an
expense when incurred.
Expenditure which enhances or extends the performance of computer software
programmes beyond their original specifications is recognised as a capital improvement
and added to the original cost of the software. Computer software costs recognised
as assets are amortised using the straight-line method over their estimated useful
economic lives (3 - 10 years). Amortisation is included in cost of sales, administrative
expenses and marketing and distribution costs as appropriate.
(e) Remastering costs
Remastering costs comprise payments made in advance for the remastering of films.
The costs are transferred to film library and programme rights upon acceptance of
the related remastered films. Amortisation of remastering costs commences after the
transfer of the costs to film library and programme rights.
(a) Finance leases
Leases of property, plant and equipment where the Group has substantially all the risks
and rewards of ownership are classified as finance leases. Finance leases are capitalised
at the inception of the lease at the lower of the fair value of the leased property or the
present value of the minimum lease payments. The corresponding rental obligations, net
of finance charges, are included as liabilities. The obligations relating to finance leases,
net of finance charges in respect of future periods, are determined at the inception of
the lease and are included in borrowings. Each lease payment is allocated between the
liability and finance charges so as to achieve a constant periodic rate of interest over the
lease period.
The property, plant and equipment acquired under finance leases are depreciated over
the shorter of the estimated useful lives of the assets or the lease terms.
(f) Other intangible assets
Other intangible assets representing purchased legal rights are capitalised, where fair
value can be reliably measured. The costs of other intangible assets are amortised on a
straight-line basis over the estimated useful economic lives of the assets (not exceeding
20 years). Amortisation is included in administrative expenses.
68
31 January 2008
H
Leases (Cont’d.)
L
(b) Operating leases
Cash and cash equivalents are carried at the balance sheet at cost. Cash and cash equivalents
consist of cash in hand, cash at bank and deposits held at call with banks.
Leases where a significant portion of the risk and rewards of ownership are retained by
the lessor are classified as operating leases. Payments made under operating leases
(net of any incentives received from the lessor) are charged to the income statement on
a straight-line basis over the period of the leases.
I
Turnaround Channel Transmission Rights
The cost of turnaround channels (programme provider fees), where the Group has immediate
transmission rights is expensed as incurred.
J
Inventories
Inventories which principally comprise set-top boxes and consumable items are stated at the
lower of cost and net realisable value. Cost is determined based on the weighted average cost
method. Net realisable value of the set-top boxes reflects the value to the business of the settop boxes in the hands of the customer. The cost of set-top boxes is charged to cost of sales
when the set-top boxes are delivered to the customer. Where appropriate, allowance is made
for obsolete or slow-moving inventory based on management’s analysis of inventory levels and
future sales forecasts.
M
Share Capital
Classification
Ordinary shares and non-redeemable preference shares with discretionary dividends are
classified as equity.
Share issue costs
Incremental external costs directly attributable to the issue of new shares are shown in equity
as a deduction, net of tax, from proceeds.
Dividend
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s
financial statements in the period in which the dividends are approved by the Company’s
shareholders or in the case of interim dividends, when the dividends are approved by the
Board of Directors.
K
Receivables
N
Borrowings
Receivables are recognised initially at fair value and subsequently measured at cost, less
provision for impairment. A provision for impairment of receivables is established when there
is objective evidence that the Group will not be able to collect all amounts due according to
the original terms of receivables. The amount of the provision is recognised in the income
statement.
Borrowings are initially stated at the proceeds received, net of transaction costs and when
they relate to private debt securities, are stated net of discount. Borrowings are subsequently
stated at amortised cost using the effective yield method; any difference between the initial
carrying value and the redemption value is recognised in the income statement using the
effective yield method over the period of the borrowings.
The Group provides for the credit risk inherent in its receivables by monitoring the level of
arrears and providing an appropriate level of bad debt allowance based on the amount and
extent of arrears.
Bad debts are written off once it has been determined that the receivables cannot be
recovered.
69
31 January 2008
O
Current And Deferred Taxation
(c) Share-based compensation
Current tax expense is determined according to the tax laws of each jurisdiction in which the
Group operates and include all taxes based upon the taxable profits. Deferred tax is provided
in full, using the liability method, on temporary differences arising between the tax base of
assets and liabilities and their carrying amounts in the financial statements. Currently enacted
tax rates are used in the determination of deferred tax. Deferred tax assets are recognised to
the extent that it is probable that future taxable profit will be available against which temporary
differences can be utilised.
The Group operates an equity-settled, share-based compensation plan. The fair value of
the employee services received in exchange for the grant of the options is recognised
as an expense. The total amount to be expensed over the vesting period is determined
by reference to the fair value of the options granted, excluding the impact of any nonmarket vesting conditions. At each balance sheet date, the entity revises its estimates of
the number of options that are expected to become exercisable. It recognises the impact
of the revision of original estimates, if any, in the income statement, and a corresponding
adjustment to equity over the remaining vesting period.
Deferred tax is provided on temporary differences arising on investments in subsidiaries
and associates, except where the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
The proceeds received net of any directly attributable transaction costs are credited to
share capital (nominal value) and share premium when the options are exercised.
(d) Termination benefits
P
Employee Benefits
(a) Short term employee benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits
are accrued in the period in which the associated services are rendered by the
employees of the Group.
Termination benefits may be paid whenever an employee’s employment is terminated
before the normal retirement date. The Group recognises termination benefits
when it is demonstrably committed to either terminate the employment of current
employees according to a detailed formal plan without possibility of withdrawal or to
provide termination benefits as a result of an invitation made to encourage voluntary
redundancy.
(b) Defined contribution plans
The Group pays contributions to publicly administered pension plans on a mandatory,
contractual or voluntary basis. Once the contributions have been paid, the Group has no
further payment obligation. The regular contributions are accounted for on an accruals
basis.
Q
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as
a result of past events, when it is more likely than not that an outflow of resources will be
required to settle the obligation, and when a reliable estimate of the amount can be made.
70
31 January 2008
R
Contingent Liabilities And Assets
S
Revenue Recognition (Cont’d.)
Contingent liabilities are disclosed in the financial statements. A contingent liability is a
possible obligation that arises from past events whose existence will be confirmed by
uncertain future events beyond the control of the Group or a present obligation that is not
recognised because it is not probable that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in the extremely rare circumstances where there is
a liability that cannot be recognised because it cannot be measured reliably.
Revenue from the sale of programme rights is recognised in the period the rights are available
to the licensee.
Revenue of the Company consists of accretion of RCPS yield income, dividend income and
management fees. Accretion of RCPS yield income and dividend income are recognised when
the right to receive payment is established. Management fees are recognised as earned over
the period the services are provided.
T
Segmental Reporting
Business segments are groups of operations which provide products or services that
are subject to risks and returns that are different from those of other business segments.
Geographical segments provide products or services within a particular economic environment
that is subject to risks and returns that are different from those operating in other economic
environments. The allocation of costs between segments is based on the products and
services of the specific segments which incur such costs.
A contingent asset is a possible asset that arises from past events whose existence will be
confirmed by uncertain future events beyond the control of the Group. The Group discloses
the existence of contingent assets where inflows of economic benefits are probable, but not
virtually certain.
S
Revenue Recognition
Subscription fees derived from satellite television services are recognised as earned over the
period the services are provided.
Subscription fees received prior to services being provided are recognised as unearned
revenue.
This reflects the fact that the risks and returns of the Group’s operations are primarily based
on its business activities.
Advertising revenues, derived from the placement of commercials on the satellite television
and radio networks and advertising revenues from sale of advertising space in magazines
are recognised in the period during which the commercials are aired and advertisements are
published respectively, net of advertising commissions.
U
Financial Assets
Purchases and sales of financial assets are recognised based on settlement accounting. They
are initially recognised at fair value plus directly attributable transaction costs. Any impairment
of a financial asset is charged to the income statement as it arises.
Licensing income is recognised upon the delivery of master tapes and related materials or
when services are rendered in accordance with the terms of the underlying contracts.
Sale of set-top boxes, video products and magazines are recognised on the transfer of risks
and rewards of ownership which generally coincides with the time when the related products
are delivered to customers and title has passed.
Financial assets are classified according to the purpose for which the investments were
acquired. This gives rise to the following categories: financial assets at fair value through
profit or loss (“FVTPL”), loans and receivables, held to maturity and available-for-sale financial
assets. Management determines the classification of its financial assets at initial recognition
and re-evaluates this designation at each reporting date.
71
31 January 2008
U
Financial Assets (Cont’d.)
U
Financial Assets (Cont’d.)
(a) Financial assets at FVTPL
(d) Available-for-sale financial assets (Cont’d.)
This category has two sub-categories: financial assets held for trading, and those
designated at FVTPL at inception. A financial asset is classified in this category
if acquired principally for purpose of selling in the short term or if so designated by
management. Derivatives are also categorised as held for trading unless they are
designated as hedges. Assets in this category are classified as current assets if they are
either held for trading or are expected to be realised within 12 months of the balance
sheet date.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are included in current assets,
except for maturities greater than 12 months after the balance sheet date, which are
classified as non-current assets. They are included in Receivables and Prepayments in
the balance sheet at amortised cost (Note 21).
V
Financial Liabilities
Financial liabilities are recognised when there is an obligation to transfer benefits and that
obligation is a contractual liability to deliver cash or another financial asset or to exchange
financial instruments with another entity on potentially unfavourable terms. They are initially
recorded at fair value plus directly attributable transaction costs.
Financial liabilities are classified as either financial liabilities at FVTPL or other financial
liabilities.
(c) Held to maturity
Held to maturity financial assets are non-derivative financial assets with fixed or
determinable payments and fixed maturities that the Group’s management has
the positive intention and ability to hold to maturity. They are held as non-current
investments at amortised cost using the effective interest method, less any amounts
written-off to reflect impairment.
(a) Financial liabilities at FVTPL
(d) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either specifically
designated in this category or not classified in any of the three categories described
above. They are included in non-current assets unless management intends to dispose
of the investment within 12 months of the balance sheet date. Unrealised gains and
losses arising from changes in fair value of financial assets classified as available-forsale are recognised in equity. Realised gains and losses arising from changes in fair
value, interest and exchange differences are included in the income statement.
The Group assesses at each balance sheet date whether there is objective evidence
that a financial asset or a group of financial assets is impaired. In the case of equity
securities classified as available-for-sale, a significant or prolonged decline in fair
value of the security below its cost is considered as an indicator that the securities are
impaired. If such evidence exists for available-for-sale financial assets, the cumulative
loss - measured as the difference between the acquisition cost and the current fair
value, less any impairment loss on that financial asset previously recognised in income
statement - is removed from equity and recognised in the income statement. Impairment
losses recognised in the income statement on equity instruments are not reversed
through the income statements.
This category has two sub-categories: financial liabilities held for trading, and those
designated at FVTPL at inception. A financial liability is classified in this category if
incurred principally for purpose of repurchasing in the short term or if so designated
by management. Derivatives are also categorised as held for trading unless they are
designated as hedges. Liabilities in this category are classified as current liabilities if
they are either held for trading or are expected to be settled within 12 months of the
balance sheet date.
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31 January 2008
V
Financial Liabilities (Cont’d.)
W
Derivative financial instruments and hedging activities (Cont’d.)
(b) Other financial liabilities
Cash flow hedge (Cont’d.)
Amounts accumulated in equity are recycled in the income statement in the periods when the
hedged item affects profit or loss. However, when a forecast transaction that is hedged results
in the recognition of a non-financial asset, the gains and losses previously deferred in equity
are transferred from equity and included in the initial measurement of the cost of the asset.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria
for hedge accounting, any cumulative gain or loss existing in equity at that time remains in
equity and is recognised when the forecast transaction is ultimately recognised in the income
statement. When a forecast transaction is no longer expected to occur, the cumulative gain or
loss that was reported in equity is immediately transferred to the income statement.
Derivatives at fair value through profit or loss
Changes in the fair value of derivative financial instrument that do not qualify for hedge
accounting are recognised in income statement as they arise.
Derivatives embedded in other financial instruments or other non-financial host contracts are
treated as separate derivatives when their risk and characteristics are not closely related to
those of the host contract and the host contract is not carried at fair value with unrealised
gains or losses reported in income statement.
X
Fair value of derivatives and other financial instruments
The fair value of financial instruments that are not traded in an active market is determined
using valuation techniques. The Group uses its judgement to select a variety of methods and
make assumptions that are mainly based on market conditions existing at each balance sheet
date. The Group has used discounted cash flow analysis for various available-for-sale financial
assets that are not traded in active markets.
Other financial liabilities, including borrowings, are initially measured at fair value plus
transaction costs. They are subsequently measured at amortised cost using the effective
interest method.
W
Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into
and are subsequently remeasured at their fair value. The method of recognising the resulting
gain or loss depends on whether the derivative is designated as a hedging instrument, and if
so, the nature of the item being hedged.
The Group documents at the inception of the transaction the relationship between hedging
instruments and hedged items, as well as its risk management objectives and strategy for
undertaking various hedging transactions. The Group also documents its assessment, both at
hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or cash flows of hedged
items.
The fair values of various derivative instruments used for hedging purposes are disclosed in
Note 22. Movements on the hedging reserve in shareholders’ equity are shown in Statement
of Changes in Equity. The full fair value of a hedging derivative is classified as a non-current
asset or liability when the remaining hedged item is more than 12 months, and as a current
asset or liability when the remaining maturity of the hedged item is less than 12 months.
Trading derivatives are classified as a current asset or liability.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify
as cash flow hedges is recognised in equity. The gain or loss relating to the ineffective portion
is recognised immediately in the income statement.
73
31 January 2008
3Financial Risk Management
3Financial Risk Management (CONT’D.)
Financial Risk Factors
(d) Liquidity and cash flow risk management
The Group’s activities expose it to a variety of financial risks, including foreign currency exchange
risk, interest rate risk, credit risk, liquidity and cash flow risk. The Group’s overall financial risk
management objective is to minimise potential adverse effects on the financial performance of the
Group.
Prudent liquidity risk management implies maintaining sufficient cash and marketable
securities, the availability of funding through an adequate amount of committed credit facilities
and the ability to close out market positions. Due to the dynamic nature of the underlying
businesses, the Group’s Treasury aims at maintaining flexibility in funding by keeping
committed credit lines available and if necessary, obtaining additional debt funding.
Further details on financial risks are disclosed in Note 31.
The Group uses derivative financial instruments such as forward foreign currency exchange and
interest rate swap contracts to hedge certain exposures.
(a) Foreign currency exchange risk management
The Group operates internationally and is exposed to foreign currency exchange risk as
a result of the foreign currency transactions and borrowings entered into by the group
companies in currencies other than their functional currencies. Forward foreign currency
exchange contracts are used to limit exposure to currency fluctuations on foreign currency
receivables and payables, and on cash flows generated from anticipated transactions
denominated in foreign currencies.
4Critical Accounting Estimates And Judgements
Estimates and judgements are continually evaluated by the Directors and management and are
based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.
(a) Revenue recognition
(b) Interest rate risk management
The Group’s interest rate exposure arises principally from the Group’s trade payables and
borrowings. The interest rate risk is managed through the use of fixed and floating interest
rate debt and derivative financial instruments. The Group has used interest rate swaps as cash
flow hedges of future interest payments.
(c) Credit risk management
The Group has no significant concentration of credit risk with individual counter-parties.
Customer credit risk exposure is managed with a combination of credit limits and arrears
monitoring procedures. Deposits of cash are placed only with financial institutions with strong
short-term credit rating or are appropriately supervised or regulated.
The Group recognises revenue when the significant risks and rewards of ownership of any
goods and services have been transferred. See Note S of the significant accounting policies
for details of revenue recognition policies.
(b) Estimated impairment of receivables
The Group provides for impairment of receivables when there is objective evidence that the
Group will not be able to collect all amounts due according to the original terms of receivables.
This calculation of impairment requires the use of estimates.
(c) Share-based payment
The cost of providing share-based payments to employees is charged to the income statement
over the vesting period of the related share options or share allocations. The cost is based on
the fair value of the options or shares allocated and the number of options expected to vest.
The fair value of each option or share is determined using the Binomial option pricing model.
For details of assumptions, see Note 27 of the financial statements.
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31 January 2008
4Critical Accounting Estimates And Judgements (cont’D.)
4Critical Accounting Estimates And Judgements (CONT’D.)
(d) Deferred tax
(f) Carrying value of film library and programme rights (Cont’d.)
Based on the estimated value in use calculated using the discounted cash flow methodology,
the recoverable amount of the Shaw film library in the Library Licensing and Distribution
segment, is higher than the carrying value. Therefore, no impairment loss was recognised for
the financial year ended 31 January 2008. Should the discount rate applied in the assessment
increase by eight percentage points or more, the fair value of the Shaw film library will be
lower than the carrying value.
In relation to the carrying value of the programme rights acquired for the Indonesian
operations, the recoverable amount based on the discounted cash flow methodology is higher
than the associated carrying value and therefore, no impairment loss was recognised. The
assumptions used in the cash flows for assessment of the carrying value of the programme
rights are dependant on the continuity of the operation of a satellite, subscription based, TV
broadcast operation in Indonesia.
Deferred tax is provided on temporary differences arising on investments in subsidiaries
and associates, except where the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable
future. For further details please refer to Note 17 of the financial statements.
(e) Customer acquisition costs
Customer acquisition costs are incurred in activating new customers in the multi-channel
subscription television service and include sales and marketing related expenses and
subsidised set-top box equipment costs. The subsidies on set-top boxes represent the
difference between set-top box costs and set-top box revenues which are recognised in
accordance with significant accounting policies stated in Note J and Note S respectively.
Management exercises judgement in establishing the set-top box selling price with the
intention to subsidise the set-top box cost for long term benefits.
(f) Carrying value of film library and programme rights
(g) PT Direct Vision (“PTDV”)
The assessment of the useful lives of the film library and programme rights required
judgement. Amortisation is charged to the income statement based on the accounting policy
set out in Note F.
As at 31 January 2007, the Group had considered the facts and circumstances governing the
operation of the business of PTDV and had accounted for its investment in PTDV as a jointly
controlled entity.
The Group assesses annually whether film library and programme rights have any indication
of impairment, in accordance with the accounting policies stated in Note F and Note G
respectively.
However, due to inconclusive negotiations between the parties to the proposed joint venture,
the Directors had, on 13 September 2007, decided that the Group will no longer equity
account for its investment in PTDV and accordingly the Group has written off assets and
balances of RM92.4 million arising from the investment in PTDV during the financial year.
Recoverable amounts have been ascertained by the subsidiaries owning the film library and
programme rights through the value in use calculations. These are determined by applying the
discounted cash flow methodology on the business plan of the subsidiaries which are based
on past experience as well as future expected market trends. The discount rates applied in
the assessment ranged from 12% – 16% and are derived from the weighted average cost of
capital adjusted for the relevant subsidiaries’ risk premium.
As the parties involved in the proposed joint venture continue to seek an acceptable solution
to matters relating to PTDV, the Directors had also elected for the Group to continue providing
services until negotiations are concluded. During the financial year, the Group has expensed
RM135.0 million in respect of costs to provide services to PTDV and expenses incurred in
developing a DTH business proposal in Indonesia
For further details on PTDV, please refer to Note 16 of the financial statements.
75
31 January 2008
5Segment Information
(a) Primary reporting format – business segments
The Group is organised into the following business segments:
Malaysian multi channel television – provides multi channel Direct-to-Home subscription television and related interactive television services in Malaysia.
Radio – provides radio broadcasting services.
Library licensing and distribution – the ownership of a library of Chinese filmed entertainment and the aggregation and distribution of the library and related content.
Others – a magazine publishing business; interactive content business for the mobile telephony platform; Malaysian film production business; talent management; creation of animation content; television
content aggregation and distribution; ownership of buildings, Group’s regional investments in media businesses and investment holding companies.
Revenue
Total revenue
Inter-segment revenue
External revenue
2008
Malaysian
multi channel
television
RM’000
Radio
RM’000
Library
licensing and
distribution
RM’000 Others
RM’000
2,325,273
(972)
168,896
(2,355)
89,296
(28,213)
588,235
(538,462)
3,171,700
(570,002)
2,324,301
166,541
61,083
49,773
2,601,698
Segment results
Total gross segment results
490,950
63,381
(27,164)
Inter-segment results
128,620
655,787
(227,040)
Costs to provide services to PTDV and expenses incurred in developing a DTH business proposal in Indonesia
–
–
–
(134,993)
428,747
(134,993)
–
–
–
Total
RM’000
Write-off of assets and balances arising from the investment in PTDV
(92,415)
(92,415)
Share of post tax results from investments accounted for using the equity method
–
–
–
(95,731)
201,339
31,023
(95,731)
Taxation
136,631
(148,501)
Loss for the year
(11,870)
76
31 January 2008
5Segment Information (CONT’D.)
(a) Primary reporting format – business segments (Cont’d.)
Revenue
Total revenue
Inter-segment revenue
External revenue
2007
Malaysian
multi channel
television
RM’000
Radio
RM’000
Library
licensing and
distribution
RM’000 Others
RM’000
1,978,251
(1,002)
151,057
(3,525)
75,292
(18,558)
313,383
(270,596)
2,517,983
(293,681)
1,977,249
147,532
56,734
42,787
2,224,302
Segment results
Total gross segment results
484,112
57,892
(39,672)
51,856
Inter-segment results
554,188
(131,271)
Share of post tax results from investments accounted for using the equity method
–
–
–
(160,025)
422,917
17,519
(160,025)
Taxation
280,411
(129,151)
Profit for the year
151,260
Total
RM’000
Inter-segment revenue represents transfers between segments and is eliminated on consolidation. These transfers are accounted for in the segments at estimated competitive market prices that would be
charged to unaffiliated customers for similar goods and services.
Segment results represent the segment revenue less segment expenses, comprising expenses directly attributable and allocated to the segment. Certain components included within inter-segment results
eliminate against the relevant income/expenditure recorded below the segment results line or against assets or liabilities.
Unallocated finance income (net) comprises interest income, net of interest on bank borrowings, finance leases liabilities and certain debt service and other finance costs.
77
31 January 2008
2008
Malaysian
multi channel
television
RM’000
Radio
RM’000
Library
licensing and
distribution
RM’000 Others
RM’000
Total
RM’000
Other information
Segment assets
1,313,620
102,731
241,479
406,039
–
–
–
387,722
Investments accounted for using the equity method
Unallocated assets
– Deposits with licensed banks & financial institutions – Deferred tax assets
– Tax recoverable
2,063,869
387,722
905,511
255,957
1,786
1,163,254
Total assets
3,614,845
872,617
47,236
31,650
241,606
Segment liabilities
Unallocated liabilities
– Borrowings (interest bearing)
– Current tax liabilities
– Deferred tax liabilities 1,193,109
801,301
Total liabilities
Other segment items
Property, plant and equipment additions
Intangible assets additions
Depreciation of property plant and equipment
Amortisation of intangible assets
Impairment of receivables
Write-off of intangible assets 774,012
111,640
78,337
116,755
34,428
–
6,229
–
4,232
3,255
1,284
–
313
43,713
1,113
50,095
–
–
30,564
157,485
12,785
82,049
1,670
5,386
786,571
4,003
10,727
1,994,410
811,118
312,838
96,467
252,154
37,382
5,386
78
31 January 2008
2007
Malaysian
multi channel
television
RM’000
Radio
RM’000
Library
licensing and
distribution
RM’000 Other information
Segment assets
682,710
101,853
255,606
405,920
Investments accounted for using the equity method
–
–
–
202,509
Unallocated assets
– Tax recoverable
Others
RM’000
Total
RM’000
1,446,089
202,509
981,677
395,693
427
1,377,797
Total assets
3,026,395
Segment liabilities
805,845
43,064
32,944
255,482
Unallocated liabilities
– Borrowings (interest bearing)
– Current tax liabilities
– Deferred tax liabilities 1,137,335
41,675
Total liabilities
Other segment items
Property, plant and equipment additions
Depreciation of property plant and equipment
Write-off of intangible assets
Impairment of investment 59,613
116,334
53,635
100,282
30,717
–
–
3,272
–
3,538
5,529
–
–
–
536
41,807
1,302
47,147
–
–
–
4,085
86,606
7,685
12,945
1,205
8,879
3,642
28,309
1,578
11,788
1,179,010
67,506
244,747
66,160
165,903
31,922
8,879
3,642
Segment assets consist primarily of property, plant and equipment, associates, jointly controlled entities, available for sales financial assets, intangible assets, inventories, receivables and prepayments and cash
and bank balances. Unallocated assets consist of deposits with licensed banks and financial institutions, deferred tax assets and tax recoverable, which cannot be directly attributed to a particular segment.
79
31 January 2008
(b) Secondary reporting format – geographical segments
Segment liabilities comprise payables and provision for liabilities and charges. Unallocated
liabilities consist of borrowings, deferred tax liabilities and tax liabilities.
(b) Secondary reporting format – geographical segments
The Group’s geographical segments are:
Malaysia – comprises the multi-channel Direct-to-Home subscription television and related
interactive television business, radio broadcasting services, magazine publishing business,
interactive content business for the mobile telephony platform, film production business, talent
management, ownership of buildings and investment holding companies.
Total assets
Malaysia
Hong Kong Others
Unallocated
– Tax recoverable
2008
RM’000
2007
RM’000
1,789,935
287,441
374,215
1,006,455
317,956
324,187
905,511
255,957
1,786
981,677
395,693
427
1,163,254
1,377,797
3,614,845
3,026,395
Property, plant and equipment additions*
Others – represents investments in businesses outside Malaysia and Hong Kong that provide
multi-channel Direct-to-Home subscription television, radio broadcasting, creation of animation
content, television content aggregation and distribution and investment holding companies.
Malaysia
Hong Kong
Others
810,597
461
60
64,671
702
2,133
811,118
67,506
180,064
43,753
89,021
127,602
41,937
75,208
312,838
244,747
In determining the geographical segments of the Group, sales are based on the geographical
location in which the customers are located. Total assets, capital expenditure, film library and
programme rights additions and other intangible assets additions are determined based on
the geographical location of the assets.
Hong Kong – comprises the ownership of a library of Chinese filmed entertainment, the
aggregation and distribution of the library and related content, a publishing business and
investment holding companies.
2008
RM’000
2007
RM’000
2,511,163
26,854
63,681
2,138,996
21,380
63,926
2,601,698
2,224,302
Revenue
Malaysia
Hong Kong
Others
Malaysia
Hong Kong
Others
* Includes items acquired by means of finance lease.
80
31 January 2008
6Revenue
7 Profit From Operations (CONT’D.)
Auditors’ remuneration
Revenue comprises the invoiced value for the sale of goods and services net of sales and service
taxes, rebates and discounts, and after eliminating sales within the Group.
PricewaterhouseCoopers LLP (“PwC”) are the Group’s external auditors for the financial year under
review and are subject to re-appointment at the AGM. The aggregate fees for professional services
rendered by PwC and its associates are detailed below:
Revenue comprises the following:
Subscription revenue
Advertising revenue
Licensing income
Sale of set-top boxes
Sale of film library and programme rights
Others
2008
RM’000
2007
RM’000
2,148,124
319,243
66,598
21,043
11,177
35,513
1,800,951
292,501
60,257
25,424
7,648
37,521
2,601,698
2,224,302
7 Profit From Operations
The following items have been charged/(credited) in arriving at the profit from operations:
Audit of parent company and consolidated financial statements
– under accrual in prior years
Fees payable to PwC and its associates for other services:
– audit of subsidiary companies pursuant to legislation*
– under accrual in prior year
– tax services
– services relating to corporate finance transactions
– other services pursuant to legislation
– other services**
Note
Programme provider fees
Inventories recognised as expenses
19
Intangible assets:
– amortisation
– write-off
Marketing and market research expenses
15
Depreciation of property, plant and equipment
Rental expense:
– land and buildings
– equipment
Bad debts (write-back)/write-off
Impairment of investment
Rental income of land and buildings 2008
RM’000
2007
RM’000
628,128
261,297
478,206
228,076
2008
RM’000
2007
RM’000
606
–
611
98
1,428
–
412
–
34
7,090
2,264
1,256
494
434
34
8,261
9,570
13,452
* Includes the Group’s overseas subsidiaries
** Includes quarterly reviews, other attestation services, projects and advisory reviews/services
8 Directors’ Remuneration
252,154
41,914
107,399
96,467
37,382
165,903
8,879
69,818
66,160
31,922
20,510
14,034
(4,409)
–
(484)
7,438
12,677
7,847
3,642
(186)
Fees
Salaries and emoluments
Share-based payment
Defined contribution plan
2008
RM’000
2007
RM’000
812
2,879
384
353
895
3,161
1,331
438
4,428
5,825
81
31 January 2008
8 Directors’ Remuneration (cont’D.)
9Employees (including Executive Director’s remuneration)
2008
RM’000
2007
RM’000
(CONT’D.)
Highest paid Director
– Salaries and emoluments
– Share-based payment
– Defined contribution plan
2,516
384
353
2,930
1,331
438
3,253
4,699
The number of options over ordinary shares granted to a Director in respect of the Company’s 2003
ESOS and MSIS during the financial year ended 31 January 2008 were 1,477,800 and Nil (2007:
720,000 and Nil) respectively.
The average number of persons employed by the Group was as follows:
2008
2007
158
2,525
302
791
121
2,524
328
98
Regional operations
3,776
185
3,071
200
3,961
3,271
* Including multi-media interactive services, as well as television content creation, aggregation
and distribution business segments.
9Employees (including Executive Director’s remuneration)
2008
RM’000
2007
RM’000
299,084
16,669
3,659
25,266
31,789
208,204
11,978
1,405
23,060
25,804
Recruiting costs
Termination benefits
Staff training
376,467
3,751
5,652
5,542
270,451
1,619
42
3,016
391,412
275,128
Wages and salaries
Employee benefits in kind
Social security costs
Share-based payment
The companies operating in Malaysia and Hong Kong are required by law to contribute a fixed
percentage of each employee’s salary to publicly administered defined contribution pension plans
for the employees’ retirement.
Malaysian operations
– Corporate
– Multi channel television
– Radio
– Others*
The highest paid Director has not exercised any share options during the financial year.
10Finance Costs And Finance Income
2008
RM’000
2007
RM’000
(1,782)
(26,903)
(18,540)
(167)
(4,539)
(19,063)
Debt service and other finance costs
(47,225)
(15,110)
(23,769)
(10,056)
(62,335)
(33,825)
(a) Finance costs
Interest costs:
– Bank borrowings
– Finance lease liabilities
– Vendor financing
82
31 January 2008
10Finance Costs And Finance Income (cont’D.)
11Taxation (CONT’D.)
2008
RM’000
2007
RM’000
The Group has not applied for group relief in Malaysia and other foreign countries in which the
subsidiaries operate as the Company and its subsidiaries either did not meet the qualifying criteria
for group relief or there were no immediate tax benefit.
38,353
15,195
30,299
9,511
35,695
1,173
1,545
12,931
The Company is a Malaysian tax resident as the control and management of its activities is
exercised in Malaysia and is subject to the Malaysian taxation rules and regulations. The subsidiaries
are subject to their individual countries’ taxation rules and regulations.
93,358
51,344
A reconciliation of income tax expense applicable to profit before taxation at the statutory rate to
income tax expense at the effective income tax rate of the Group is as follows:
31,023
17,519
(b) Finance income
Interest income
Realised foreign exchange gains
Unrealised foreign exchange gains
Gain from interest rate swap contract
11Taxation
Current taxation:
Malaysian income tax
– Current year
– Over accrual in prior years
2008
RM’000
2007
RM’000
(9,533)
187
(11,371)
117
Foreign income tax – current year
(9,346)
(433)
(11,254)
(517)
(9,779)
(11,771)
(128,546)
(10,176)
(85,249)
(32,131)
(138,722)
(117,380)
(148,501)
(129,151)
Deferred taxation
Origination and reversal of temporary differences
Change in Malaysian tax rate
2008
RM’000
2007
RM’000
136,631
280,411
Tax at Malaysia statutory tax rate of 26% (2007: 27%)
(35,524)
(75,711)
Tax effect of:
(11,912)
(2,970)
(57,187)
(10,176)
(8,478)
(32,131)
(29,349)
(33,272)
13,637
15,817
–
(15,595)
(46,871)
(34,186)
14,530
16,551
67,186
(13,102)
15,060
(13,969)
(148,501)
(129,151)
Different tax rates in other countries
Losses in foreign subsidiaries which were not available
for tax relief at Group level
Share of post tax results from investments accounted for
using the equity method
Expenses not deductible for tax purposes
Income not subject to tax
Tax exempt income due to pioneer status
Utilisation of investment tax allowance
Unrecognised deferred tax assets arising during the year
Over/(Under-accrual) of temporary differences in respect of
prior financial years (net)
Taxation charge
83
31 January 2008
11Taxation (CONT’D.)
12 Dividends (cont’D.)
Malaysian income tax is calculated at the statutory rate of 26% (2007: 27%) of the estimated
assessable profit for the year. The Malaysian corporate tax rate is reduced from 26% to 25% with
effect from year of assessment 2009, the computation of deferred tax has been adjusted accordingly
to reflect such changes. Taxation for other jurisdictions is calculated at the rates prevailing in the
respective jurisdictions. Deferred tax is calculated on temporary differences between the tax base of
assets and liabilities and their carrying amounts in the financial statements.
The Group’s effective tax rate is higher than the statutory rate mainly due to losses in foreign
subsidiaries, associates, overseas investments and certain Malaysian subsidiaries which were not
available for tax relief at Group level and additional deferred tax charge from restatement of deferred
tax following the change in Malaysian corporate tax rate.
A third interim dividend of 3.0 sen per share consisting of gross dividend of 2.7 sen per share
less 25% Malaysian income tax and tax exempt dividend of 0.3 sen per share amounting to
RM44,966,000 in respect of the financial year ended 31 January 2008 was declared and is payable
on 24 April 2008.
The Directors also recommend a final tax exempt dividend payment of 2.0 sen per share estimated
at RM38,681,000 in respect of the financial year ended 31 January 2008 subject to the approval
of the Company’s shareholders at the forthcoming Annual General Meeting. The final tax exempt
dividend will be paid on a date to be determined.
13Earnings Per Share
Basic earnings per share of the Group is calculated by dividing the net profit attributable to equity
holders of the Company by the weighted average number of ordinary shares in issue during the
financial year.
12 Dividends
During the financial year ended 31 January 2008, the following dividends were paid:
Second interim tax exempt dividend of 2.0 sen per share in respect
of financial year ended 31 January 2007, paid on 27 April 2007
Final tax exempt dividend of 3.0 sen per share in respect of
financial year ended 31 January 2007, paid on 30 August 2007
(2007: Final tax exempt dividend of 3.5 sen per share in
respect of financial year ended 31 January 2006)
2008
RM’000
2007
RM’000
38,669
–
58,021
67,480
First interim tax exempt dividend of 2.0 sen per share in respect of
financial year ended 31 January 2008, paid on 11 October 2007
(2007: First tax exempt interim dividend of 2.0 sen per share in
respect of financial year ended 31 January 2007)
38,680
38,563
Second interim tax exempt dividend of 3.0 sen per share in respect
of financial year ended 31 January 2008, paid on 14 January 2008
58,021
–
193,391
106,043
Diluted earnings per share of the Group is calculated by dividing the profit attributable to equity holders
by the weighted average number of ordinary shares, adjusted for the assumed conversion of all dilutive
potential ordinary shares arising from the share options granted under the ESOS and MSIS.
2008
RM’000
2007
RM’000
(6,158)
160,428
Weighted average number of ordinary shares (‘000)
Adjustment for share options granted (‘000)
1,933,769
2,390
1,928,452
6,523
Adjusted weighted average number of ordinary shares (‘000)
1,936,159
1,934,975
Basic earnings per share (sen)
(0.32)
8.32
Diluted earnings per share (sen)
N/A
8.29
(Loss)/Profit attributable to equity holders of the Company (RM’000)
Not applicable as the options under the ESOS and MSIS are anti dilutive and would decrease the
loss per share for the financial year.
84
31 January 2008
14Notes To The Consolidated Cash Flow Statement
Note
14Notes To The Consolidated Cash Flow Statement (CONT’D.)
2008
RM’000
2007
RM’000
(4,486)
25,266
(38,353)
47,225
(9,511)
(30,299)
148,501
(1,170)
23,060
(35,695)
23,769
(12,931)
(1,545)
129,151
96,467
(735)
9
66,160
(486)
–
252,154
5,386
(253)
–
165,903
8,879
(528)
3,642
92,415
–
95,731
160,025
679,517
528,234
(a) Adjustments for non-cash items
Contra arrangements – revenue
Value of employee services – share options
9
Interest income
10
Interest expense
10
10
Unrealised foreign exchange gains
10
Taxation
11
– Depreciation 15
– Gain on disposal – Impairment
Intangible assets
– Amortisation
19
– Write-off
Impairment of investment
Write-off of assets and balances arising from
the investment in PTDV
Share of post tax results from investments
accounted for using the equity method
Note
2008
RM’000
2007
RM’000
(b) Cash Flows From Investing Activities
Investment in cumulative redeemable
convertible preference shares
18
Purchase of investment accounted for using
equity method
16
Capital repayment from an investee
Repayment of advance from associate
Proceeds from disposal of associates
Proceeds from shares issued to minority interests
Proceeds from disposal of property, plant
and equipment
Proceeds from disposal of intangibles
Refund of remastering costs
Acquisition of intangibles
Purchase of property, plant and equipment
(3,000)
–
(420,791)
–
2,104
505
1,285
(191,466)
17,663
–
–
761
913
40
–
(33,950)
(171,484)
707
–
11,963
(28,830)
(67,506)
(624,378)
(256,708)
Dividends paid
12
Interest paid
Drawdown of borrowings
Proceeds from realisation of interest rate
swap contract
Issuance of shares pursuant to exercise of
share options
Repayment of finance lease liabilities
Repayment of borrowings
(193,391)
(49,566)
266,803
(106,043)
(16,829)
–
11,178
11,264
4,841
(33,806)
(63,584)
20,381
(32,493)
–
(57,525)
(123,720)
(c) Cash Flows From Financing Activities
85
31 January 2008
15 Property, Plant And Equipment
Freehold
land
RM’000
Buildings
RM’000
Satellite
transponders
RM’000
Equipment,
fixtures
and fittings
RM’000
Broadcast
and
transmission
equipment
RM’000
At 1 February 2006
Cost
Accumulated depreciation
–
–
173,911
(41,002)
249,305
(211,369)
187,147
(147,663)
487,405
(430,489)
21,129
–
1,118,897
(830,523)
Net book amount
–
132,909
37,936
39,484
56,916
21,129
288,374
Net book amount
At 1 February 2006
Additions
Disposals Transfers between classes
Transfers from intangible assets
Depreciation charge
–
–
–
10,586
–
–
–
132,909
–
–
4
–
(4,292)
–
37,936
–
–
–
–
(21,679)
–
39,484
15,666
(13)
879
41
(14,987)
(329)
56,916
23,117
(208)
24,592
24,773
(25,202)
(71)
21,129
28,723
–
(36,061)
(1,070)
–
(88)
288,374
67,506
(221)
–
23,744
(66,160)
(488)
At 31 January 2007
10,586
128,621
16,257
40,741
103,917
12,633
312,755
At 31 January 2007
Cost
10,586
-
173,855
(45,234)
249,305
(233,048)
200,109
(159,368)
554,778
(450,861)
12,633
–
1,201,266
(888,511)
Net book amount
10,586
128,621
16,257
40,741
103,917
12,633
312,755
Net book amount
At 1 February 2007
Additions
Disposals
Transfers between classes
Transfers to inventories
Depreciation charge
Impairment Currency translation differences
10,586
–
–
–
–
–
–
–
128,621
28
–
–
–
(4,297)
–
–
16,257
637,530
–
–
–
(44,611)
–
–
40,741
36,731
(143)
2,399
–
(16,244)
(9)
(230)
103,917
70,767
(35)
8,672
(1,642)
(31,315)
–
(82)
12,633
66,062
–
(11,071)
–
–
–
–
312,755
811,118
(178)
–
(1,642)
(96,467)
(9)
(312)
At 31 January 2008
10,586
124,352
609,176
63,245
150,282
67,624
1,025,265
Group
Assets
under
construction
RM’000
Total
RM’000
86
31 January 2008
15 Property, Plant And Equipment (cont’D.)
Freehold
land
RM’000
Buildings
RM’000
Satellite
transponders
RM’000
Equipment,
fixtures
and fittings
RM’000
Broadcast
and
transmission
equipment
RM’000
Cost
10,586
–
173,097
(48,745)
886,835
(277,659)
232,023
(168,778)
630,948
(480,666)
67,624
–
2,001,113
(975,848)
Net book amount
10,586
124,352
609,176
63,245
150,282
67,624
1,025,265
Group
At 31 January 2008
Assets
under
construction
RM’000
Total
RM’000
During the financial year, the Group capitalised the lease of transponders on the Malaysia East Asia Satellite 3 with an aggregate cost of RM637,530,000 (2007: Nil) by means of finance lease. Assets capitalised and
held under finance lease also include equipment, fixtures and fittings at net carrying value of RM1,360,000.
Details on finance lease liabilities are disclosed in Note 25 (b).
16Interest In Investments Accounted For Using The Equity
16I n t e r est I n I n v est m e n ts Acco u n t e d Fo r U s i n g T h e Eq u i t y
M e t h od (CO NT ’ D. )
Method
Investments-at cost
Long term advances and receivables
Cumulative post tax results and impairment losses
2008
RM’000
2007
RM’000
374,688 328,786
(315,752)
87,615
320,234
(205,340)
387,722
202,509
The Group has not recognised losses for the current financial year amounting to RM2,425,000
(2007: RM3,218,000) for Advanced Wireless Technologies Sdn Bhd. The accumulated losses not
recognised were RM6,391,000 (2007: RM3,966,000). These losses exceed the Group’s interest in
the associate.
The Group’s interest in the assets, liabilities, income and expenses of the investments in equity
accounted units, is as follows:
2008
RM’000
2007
RM’000
Non-current assets
Current assets
Current liabilities
Non-current liabilities
270,080
161,437
(63,738)
(36,396)
250,475
87,059
(154,436)
(147,195)
Net assets
331,383
35,903
Revenue
Expenses
53,207
(150,349)
47,792
(207,817)
(97,142)
(160,025)
Refer to Note 33 (a) for further details on the Group’s commitment for investments in an associate
and a joint venture.
87
31 January 2008
Method (Cont’d.)
Details of principal investments in equity accounted units, are as follows:
Method (Cont’d.)
Name of company
TVB Publishing Holding Limited
(“TVBPH”)
Country of
incorporation
Hong Kong
Effective equity
interest
2008
2007
%
%
26.3
26.3
Financial
year end
31 Dec
25.0
25.0
31 Dec
Advanced Wireless
Malaysia
Technologies
Sdn. Bhd. (“AWT”)
Name of company
Country of
incorporation
Effective equity
interest
2008
2007
%
%
Financial
year end
Principal activities
Investment holding
Tiansheng AART
China
49.0
49.0
31 Dec
Advertising Services Ltd
(“TAAS”)
Provision of advertising
agency services
Provision of wireless
multimedia related
services
31 Mar
20.0
–
Sun Direct TV Private
India
Limited (“Sun Direct TV”)
Provision of Direct-toHome digital satellite
broadcast paytelevision services
31 Mar
26.0
–
Flexi Infosoftech India
Solutions Private Limited
(“Flexi Infosoftech”)
Provision of software
services and other
support services
31 Mar
45.2
–
Max Flexi Services India
Private Limited (“Max Flexi”) Provision of software
services and other
support services
–
29.0
31 Mar Provision of information
Deccan Digital India
Networks technology enabled
(Hyderabad) services
Private Limited
(“DNP”)
India
–
29.0
A.V. Digital Networks
(Hyderabad) technology enabled
Private Limited
services
(“ANP”)
Metro Digital Networks India
–
29.0
(Hyderabad) technology enabled
Private Limited
services
(“MNP”)
(a) Participation in multi-channel digital satellite pay television and multimedia
business in Indonesia
Pursuant to the Subscription and Shareholders’ Agreement dated 11 March 2005 (“SSA”),
the Group together with PT Ayunda Prima Mitra, a subsidiary of PT First Media Tbk (formerly
known as PT Broadband Multimedia Tbk), agreed to participate in PT Direct Vision (“PTDV”),
to provide multi-channel digital satellite pay television and multimedia services in Indonesia
(“Indonesian Venture”).
88
31 January 2008
Method (Cont’d.)
(a) Participation in multi-channel digital satellite pay television and multimedia
business in Indonesia (Cont’d.)
On 26 August 2005, Komisi Penyiaran Indonesia, the Indonesian broadcasting regulator,
issued a decree limiting foreign equity participation to 20% and requiring all broadcasters to
submit applications for a broadcast licence under new Broadcasting Law. As a consequence,
the parties entered into further discussions to restructure the Indonesian Venture and the SSA
lapsed on 31 July 2006.
Method (Cont’d.)
(b) Investments in jointly controlled entities
(i) Sun Direct TV
On 5 April 2007, the Group had agreed to participate in a proposed joint venture for the
provision of Direct-to-Home digital satellite broadcast pay-television services in India,
with Kalanithi Maran and Kavery Kalanithi, collectively referred to as the “Maran Group”.
Under the proposed joint venture, South Asia Entertainment Holdings Ltd (“SAEHL”),
a wholly-owned subsidiary of the Group, agreed to invest up to INR7,470 million by
subscribing for new equity shares representing 20% of the enlarged capital of Sun
Direct TV Private Limited (“Sun Direct TV”) over a period of 3 years, in accordance with
the funding requirements of Sun Direct TV, as set out in a business plan of Sun Direct TV
agreed between the Maran Group, SAEHL and Sun Direct TV.
On 10 December 2007, SAEHL had completed the subscriptions of 39,677,420 new
shares in Sun Direct TV for a total cash consideration of INR3,157,132,000. Following
the completion of the subscriptions, SAEHL has a shareholding interest of 20% in Sun
Direct TV.
Sun Direct TV is a company incorporated in India with a licence to provide Direct-toHome digital satellite broadcast pay-television services in India.
Capital commitment relating to investment in Sun Direct TV is shown in Note 33 (a).
The service was launched by PTDV on 28 February 2006 under a trademark licence
agreement with MEASAT Broadcast Network Systems Sdn Bhd.
Due to inconclusive negotiations between the parties to the proposed Indonesian Venture, the
Directors had, on 13 September 2007, decided that the Group will no longer equity account
for its investment in PTDV and accordingly the Group has written off assets and balances of
RM92,415,000 arising from the investment in PTDV during the financial year.
As the parties involved in the proposed Indonesian Venture continue to seek an acceptable
solution to matters relating to PTDV, the Directors had also elected for the Group to continue
providing services until negotiations are concluded. During the financial year, the Group has
included RM134,993,000 in respect of costs to provide services to PTDV and expenses
incurred in developing a DTH business proposal in Indonesia.
In the event that no agreement is reached, the Group expects to account for further costs
relating to specific commitments made in relation to PTDV operations of approximately
RM200.0 million.
(ii) Max Flexi and Flexi Infosoftech
South Asia Software Technologies Ltd (“SAST”), a wholly-owned subsidiary of the
Group, acquired 45.2% equity interest in Max Flexi for INR157,000 (RM12,920) on 27
December 2007 and 26.0% equity interest in Flexi Infosoftech for INR35,000 (RM2,890)
on 28 December 2007. Flexi Infosoftech has 26.0% equity interest in Max Flexi.
SAST also subscribed for 63,789,999 fully paid up cumulative convertible preference
shares (“CCPS”) of INR10 each in Max Flexi for INR637,900,000 (RM63.8 million) on
27 December 2007. Subject to compliance with the applicable laws, the CCPS are
convertible upon expiry of seven years from issue date or upon a conversion request
from the holder or Max Flexi subject to the existing shareholders having a pre-emptive
right to maintain their current shareholdings in Max Flexi.
89
31 January 2008
(b) Investments in jointly controlled entities (Cont’d.)
(ii) Max Flexi and Flexi Infosoftech (Cont’d.)
The following transactions occurred subsequent to the year end:
On 7 February 2008, SAST’s equity interest in Flexi Infosoftech was diluted to 21.5%
following subscription to new shares by other existing shareholders of Flexi Infosoftech.
On 27 February 2008, SAST subscribed for an additional 2,949,115 fully paid up CCPS
of INR10 each in Max Flexi for INR29,491,000 (RM2.4 million). This CCPS rank pari
passu to all existing CCPS issued by Max Flexi.
(iii) South Asia FM Ltd
On 28 February 2008, South Asia Multimedia Technologies Ltd, a wholly-owned
subsidiary of the Group, acquired 6.98% equity interest in South Asia FM Ltd for a total
cash consideration of INR149,236,000 (RM12.3 million).
17 Deferred Tax
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off
current tax assets against current tax liabilities and when the deferred taxes relate to the same tax
authority. The following amounts, determined after appropriate offsetting, are shown in the balance
sheet:
Deferred tax assets
17 Deferred Tax (CONT’D.)
Method (Cont’d.)
2008
RM’000
2007
RM’000
255,957
395,693
(10,727)
(11,788)
245,230
383,905
2008
RM’000
2007
RM’000
383,905
501,262
(22,348)
(5,042)
(109,620)
12,418
293
(14,422)
(1)
(26,332)
(490)
(86,396)
(8,502)
138
3,991
211
Other movements:
– currency translation differences
(138,722)
(117,380)
47
23
At end of financial year
245,230
383,905
Deferred tax assets (before offsetting)
Tax losses
Provisions and accruals
11,172
259,752
16,374
19,058
12,444
369,292
3,897
33,480
306,356
(50,399)
419,113
(23,420)
255,957
395,693
At beginning of financial year
(Charged)/credited to income statement:
– property, plant and equipment
– film library and programme rights
– tax losses
– provisions and accruals
– interest receivable
– impairment of receivables
– others
Offsetting
Deferred tax assets (after offsetting)
90
31 January 2008
Deferred tax liabilities (before offsetting)
Interest receivable
2008
RM’000
2007
RM’000
Offsetting
(42,368)
(7,421)
(11,337)
(21,946)
(1,632)
(11,630)
(61,126)
50,399
(35,208)
23,420
(10,727)
(11,788)
Deferred tax liabilities (after offsetting)
The deferred tax assets are expected to be reversed as follows:
Within one year
After one year
151,505
104,452
96,464
299,229
Total deferred tax assets
255,957
395,693
The Group has the following amounts of tax losses, capital allowances and other temporary
differences carried forward in relation to companies in Malaysia, Hong Kong and other countries for
which the related tax effects have not been included in the financial statements:
Tax losses carried forward
Capital allowances carried forward
Other temporary differences carried forward
Investment tax allowances
2008
RM’000
2007
RM’000
25,613
25,613
The benefits of unutilised tax losses, capital allowances and investment tax allowances can be
carried forward indefinitely and will be obtained when the relevant subsidiaries derive future
assessable income of a nature and of an amount sufficient for these carried forward tax losses,
capital allowances and investment tax allowances to be utilised respectively.
18Financial Asset (other investment)
The Directors have reviewed the business plans for the relevant subsidiaries and are of the opinion
that sufficient taxable income will be generated in future financial years to utilise the tax losses and
capital allowances carried forward.
In addition, certain Malaysian subsidiaries have unutilised investment tax allowances which
amounted to approximately:
2008
RM’000
2007
RM’000
353,684
1,183
6,211
311,036
232
155
Other investment comprises an investment in 3,000,000 cumulative redeemable convertible
preference shares of RM1.00 each. Under IFRS requirements, this is classified as loans and
receivables. The carrying amount of the investment approximates its fair value.
91
31 January 2008
19Intangible Assets
Group
At 1 February 2006
Cost
Accumulated amortisation and impairment
Production in progress
Net book amount
Net book amount
Goodwill
RM’000
Film library &
programme
rights
RM’000
Software
costs
RM’000
Remastering
costs
RM’000
Others
RM’000
345
–
–
869,451
(595,762)
(521)
199,065
(80,590)
–
20,715
–
–
55,408
(7,977)
–
1,144,984
(684,329)
(521)
345
273,168
118,475
20,715
47,431
460,134
At 1 February 2006
Additions
Refund
Amortisation charge
Write-off
Transfers between classes
Transfers to property, plant and equipment
Other movements
345
–
–
–
–
–
–
–
–
273,168
215,917
–
(137,484)
(2,532)
(18,509)
8,118
–
(16,479)
118,475
28,830
–
(17,788)
–
(32)
–
(23,744)
–
20,715
–
(11,963)
–
–
(634)
(8,118)
–
–
47,431
–
–
(10,631)
(6,347)
(1,189)
–
–
–
460,134
244,747
(11,963)
(165,903)
(8,879)
(20,364)
–
(23,744)
(16,479)
At 31 January 2007
345
322,199
105,741
–
29,264
457,549
At 31 January 2007
Cost
345
–
–
965,341
(647,424)
4,282
188,340
(82,599)
–
–
–
–
44,564
(15,300)
–
1,198,590
(745,323)
4,282
Net book amount
345
322,199
105,741
–
29,264
457,549
Total
RM’000
92
31 January 2008
19Intangible Assets (CONT’D.)
Group
Net book amount
At 1 February 2007
Additions
Disposals
Amortisation charge
Write-off
At 31 January 2008
At 31 January 2008
Goodwill
RM’000
Film library &
programme
rights
RM’000
Software
costs
RM’000
345
–
–
–
–
–
322,199
278,888
–
(220,886)
(41,914)
(22,687)
105,741
33,950
(40)
(24,943)
–
(54)
345
315,600
Cost
345
–
–
Net book amount
345
Remastering
costs
RM’000
Others
RM’000
Total
RM’000
–
–
–
–
–
–
29,264
–
–
(6,325)
–
(801)
457,549
312,838
(40)
(252,154)
(41,914)
(23,542)
114,654
–
22,138
452,737
1,110,456
(805,459)
10,603
220,916
(106,262)
–
–
–
–
42,686
(20,548)
–
1,374,403
(932,269)
10,603
315,600
114,654
–
22,138
452,737
93
31 January 2008
20Inventories
21Receivables And Prepayments (Cont’d.)
2008
RM’000
2007
RM’000
Total net receivables excluding prepayments were denominated in the following currencies:
At cost
Set-top boxes
Tapes and other materials
30,207
9,344
44,775
8,267
39,551
53,042
2008
RM’000
2007
RM’000
21Receivables And Prepayments
360,193
(80,586)
356,719
(131,308)
Trade receivables – net
Other receivables, net of impairment
Amounts due from investments accounted for
using the equity method
Amounts due from related parties
Prepayments
279,607
120,632
225,411
149,807
2,071
23,917
35,769
3,181
37,632
100,716
461,996
516,747
Trade receivables
Impairment of trade receivables
Movements in impairment of trade and other receivables
Charge for the year
Amounts written off Currency translation differences
2008
RM’000
2007
RM’000
Ringgit Malaysia United States Dollar (“USD”) Hong Kong Dollar (“HKD”)
Indian Rupee (“INR”)
Others
2008
RM’000
2007
RM’000
285,204
71,244
36,054
25,222
8,503
294,675
54,752
30,197
22,243
14,164
426,227
416,031
22 Derivative Financial Instruments
2008
Forward foreign currency exchange
contracts – cash flow hedges
2007
Assets
RM’000
Liabilities
RM’000
Assets
RM’000
–
140
–
–
–
–
12,008
–
Liabilities
RM’000
Other receivables are stated net of impairment of RM1,402,000 (2007: RM864,000).
Credit terms of trade receivables range from zero to 60 days.
Interest-rate swaps – cash flow hedges
Forward foreign currency exchange contracts
The notional principal amounts of the outstanding forward foreign exchange contracts at 31 January
2008 were RM5,109,000 (2007: nil).
132,172
37,382
(87,439)
(127)
100,250
31,922
–
–
Interest-rate swap
81,988
132,172
The maturity profile of the derivative financial instruments are disclosed in Note 31(b) of the financial
statements.
The notional principal amount of the outstanding interest rate swap contract at 31 January 2008
was nil (2007: RM525,375,000).
94
31 January 2008
23Cash And Cash Equivalents
24 Payables (cont’D.)
For the purposes of the cash flow statement, cash and cash equivalents comprise the following:
2008
RM’000
2007
RM’000
Deposits with licensed banks and financial institutions
Cash and bank balances
905,511
81,320
981,677
93,988
986,831
1,075,665
Deposits, cash and bank balances are denominated in the following currencies:
986,831
1,075,665
2008
RM’000
2007
RM’000
Current
Trade payables and accruals
Other payables and accruals
Amounts due to investment accounted for using the equity method
Amounts due to related parties
Unearned revenue
454,880
386,584
46
48,683
132,579
402,218
395,572
34
33,376
100,887
1,022,772
932,087
205,248
(iii) Interest is charged for PN at the USD LIBOR or Ringgit Cost of Fund + 0.5% per annum
calculated at 360 or 365 days respectively from issuance date.
The effective interest rates at the end of the financial year range between 4.3% and 6.6% (2007:
3.6% and 6.7%) per annum.
24 Payables
170,197
Interest is charged for ULCP at the USD LIBOR or Ringgit Cost of Fund + 0.5% per annum
calculated at 360 or 365 days respectively from delivery date.
936,514
103,842
33,751
1,558
191,603
325
13,320
(ii)
881,116
77,440
25,069
3,206
155,357
329
14,511
Interest is charged for LC at two year USD swap rate calculated at 700 days from invoice date
and/or twenty-four month SIBOR (as defined in the agreement) + 1.5% per annum calculated
at 725 days from delivery date.
2007
RM’000
RM
USD
HKD
Others
2007
RM’000
(i)
2008
RM’000
2008
RM’000
Credit terms granted by vendors generally range from zero to 90 days. Vendors of set-top boxes
have granted extended payment terms of 24 months (“vendor financing”) on a Letter of Credit
(“LC”), Usance Letter of Credit Payable at Sight (“ULCP”) and also Promissory Notes (“PN”) basis to
the Group as set out below:
The effective interest rates per annum for deposits as at the end of the financial year are between
2.8% to 4.8% (2007: 2.4% to 5.2%).
Non-current
Trade payables and accruals
Amounts due to investment accounted for using the equity method Amounts due to related parties
Deposits of the Group have an average maturity of 11 days (2007: 13 days) for the financial year.
Total payables (excluding unearned revenue) were denominated in the following currencies:
RM
USD
INR
EURO
HKD
Others
2008
RM’000
2007
RM’000
860,876
162,631
1,895
1,046
20,083
13,859
487,497
256,863
246,748
18,294
12,046
15,000
1,060,390
1,036,448
95
31 January 2008
25 Borrowings
25 Borrowings (CONT’D.)
Current
Bank loan (secured)
Finance lease liabilities (not later than 1 year)
USD Facilities (unsecured)
2008
RM’000
2007
RM’000
(a)
(b)
(c)
3,914
17,240
465
1,825
26,484
–
21,619
28,309
Non-current
(b)
Finance lease liabilities 119,852
Later than 1 year but not more than 5 years
Later than 5 years
454,800
–
–
(c)
USD Facilities (unsecured)
574,652
190,300
–
–
764,952
–
786,571
28,309
Total borrowings are denominated in the following currencies:
RM
USD
Others
591,892
190,765
3,914
26,484
–
1,825
786,571
28,309
The effective interest rates for borrowings at the end of the financial year range between 4.3% to
13% (2007: 9.1% to 9.7%) per annum.
(a) Bank loan (secured)
Standby letters of credit have been provided as security for the bank loan.
(b) Finance lease liabilities
Finance lease liabilities include the lease of transponders on the Malaysia East Asia Satellite 3
from MEASAT Satellite Systems Sdn Bhd, a related party.
The following is a summary of the minimum lease payments:
2008
RM’000
2007
RM’000
52,695
247,163
593,041
27,772
–
–
Future finance charges on finance lease
892,899
(301,007)
27,772
(1,288)
591,892
26,484
Minimum lease payments:
Not later than 1 year
Later than 1 year and not more than 5 years
Later than 5 years
Present value of lease rental obligation
The finance lease liabilities are effectively secured as the rights of the leased asset revert to
the lessor in the event of default.
(c) USD300 million Guaranteed Term and Revolving Facilities
This is in respect of USD300 million Guaranteed Term and Revolving Facilities secured on 18
October 2004 (“USD Facilities”) comprising Tranche A (USD150 million), Tranche B (USD75
million) and Tranche C (USD75 million). Tranche A of the USD Facilities lapsed on 18 April
2007. On 14 December 2007, the facility documentation was amended and the guarantees
provided by MEASAT Broadcast Network Systems Sdn Bhd and Airtime Management and
Programming Sdn Bhd were released. With the amendment, (i) a total of USD4.9 million out
of the USD150 million was terminated following one lender’s non-consent to the amendments
leaving a balance USD145 million available for reimbursing debt settlement and/or financing
general corporate purposes and working capital of the Company and its subsidiaries and
(ii) the availability of the balance USD Facilities is subject to annual extension up to the final
maturity dates of 18 October 2009 (USD100 million) and 18 October 2010 (USD45 million).
96
31 January 2008
25 Borrowings (CONT’D.)
26Share Capital (CONT’D.)
(d) Syndicated term and revolving facilities
Subsequent to the financial year, the Company’s wholly-owned subsidiary, ASTRO Global
Ventures (L) Ltd had on 7 March 2008 entered into a syndicated term and revolving facilities
(“Facilities”) agreement arranged by Citibank Malaysia (L) Limited and DBS Bank Ltd.
The Facilities comprise commitments in US Dollars which are guaranteed by the Company and
a proposed Ringgit term loan facility to be obtained by the Company, aggregating up to a sum
of USD300 million. The Facilities have a tenure of 5 years from the date of the agreement and
can be utilised to meet the Group’s funding requirements and general working capital.
26Share Capital
Authorised
Ordinary shares of 10p each
At beginning/end of financial year
(3,000,000,000 ordinary shares)
2008
RM’000
2007
RM’000
RPS of GBP1.00 each (49,998 RPS)
Series I RCPS of 1p each (53,947,368 RCPS)
Series II RCPS of 1p each (103,947,368 RCPS)
Issued and fully paid
(1,932,776,161 (2007: 1,927,332,461) ordinary shares)
Shares issued pursuant to exercise of share options
(1,256,400 (2007: 5,443,700) ordinary shares)
At end of financial year (1,934,032,561 (2007: 1,932,776,161)
ordinary shares)
1,851,000
2008
RM’000
2007
RM’000
1,199,194
1,195,432
855
3,762
1,200,049
1,199,194
1,851,000
The issue of shares related to amounts issued through the employee share option schemes for a
cash consideration of RM4,841,000 (2007: RM20,381,000).
Redeemable preference shares (“RPS”) and
redeemable convertible preference shares (“RCPS”)
On 26 July 2007, pursuant to shareholders’ approval at the EGM, the authorised share capital of the
Company has been amended from GBP301,628,945 divided into 3,000,000,000 ordinary shares of
10p each, 49,998 RPS of GBP1.00 each, 53,947,368 Series I RCPS of 1p each and 103,947,368
Series II RCPS of 1p each to GBP300,000,000 divided into 3,000,000,000 ordinary shares of
10p each.
–
–
–
299
3,296
6,352
–
9,947
27Share-Based Payment
2003 Employee Share Option Scheme (“ESOS”) and 2003 Management Share Incentive
Scheme (“MSIS”) (collectively the “Schemes”)
The Company’s ESOS and MSIS came into effect on 22 October 2003 for a period of 10 years.
These Schemes are governed by the 2003 Bye-Laws, which were approved by the Board of
Directors and Shareholders of the Company on 29 September 2003.
97
31 January 2008
27Share-Based Payment (CONT’D.)
27Share-Based Payment (CONT’D.)
Scheme (“MSIS”) (collectively the “Schemes”) (Cont’d.)
The main features of the ESOS and MSIS are as follows:
The movement of the number of share options outstanding and their related weighted average
exercise prices are as follows:
• The total number of shares which may be issued by the Company shall not exceed in aggregate
10% of the Company’s issued and fully paid share capital at any time during the existence of
these Schemes.
• The total number of shares which may be issued under options granted under these Schemes
to executive Directors and members of senior management of the Company and its subsidiaries
shall not exceed in aggregate 50% of the shares available under these Schemes.
• The total number of shares which may be issued under options granted under these Schemes
to any employee who, either singly or collectively through his/her associates, holds 20% or more
in the issued and fully paid share capital of the Company shall not exceed in aggregate 10% of
the shares available under these Schemes.
• Subject to the discretion of the Board, any employee (including an executive director) shall be
eligible to participate in the ESOS.
• The option price under the ESOS and MSIS initial grant is the price at which a share was
subscribed for by a retail investor under the IPO.
• The option price under the ESOS and MSIS for any subsequent grant, is the weighted average of
the market price quotation of shares for the five market days immediately preceding the date on
which the option is granted less, if the Board of Directors shall so determine at their discretion
from time to time, a discount of not more than 10% or the par value of a share, whichever is
higher.
• Details of the share option eligibility criteria may be obtained by the employees from the Human
Resource Division.
• No option shall be granted pursuant to these Schemes on or after the tenth anniversary of the
date on which these Schemes shall become effective, and no awards granted prior to such tenth
anniversary may extend beyond that.
2008
2007
Average
exercise
price
per share
RM
Number
of options
Average
exercise
price
per share
RM
Number
of options
Group and Company
ESOS
At beginning of financial year Granted Forfeited
Exercised
4.44
4.31
4.43
3.85
74,713,350
26,162,550
(13,529,034)
(1,256,400)
4.40
4.43
4.65
3.74
50,834,800
34,768,450
(5,446,200)
(5,443,700)
4.41
86,090,466
4.44
74,713,350
Exercisable at end of period
4.43
41,188,066
4.18
21,284,440
Group and Company
MSIS
At beginning of financial year Forfeited
3.72
3.69
7,843,400
(1,459,340)
3.72
4.10
7,933,400
(90,000)
3.73
6,384,060
3.72
7,843,400
Exercisable at end of period
3.73
6,384,060
–
–
ESOS
The share options granted give the option holders the right to purchase the shares of the Company
and will expire on 21 October 2013. The share options vest over a timeline as stipulated in the ESOS
Letter of Offer and criteria stated therein. The weighted average share price of the ESOS exercised
during the financial year was RM4.13 (2007: RM4.93).
98
31 January 2008
27Share-Based Payment (Cont’d.)
ESOS (Cont’d.)
The options over ordinary shares of the Company outstanding under the ESOS as at end of financial
years, consist of the following:
Date granted
22 October 2003
30 January 2004
30 April 2004
19 May 2004
30 July 2004
30 October 2004
30 January 2005
11 March 2005
1 April 2005
30 April 2005
1 August 2005
24 October 2005
30 October 2005
31 January 2006
30 April 2006
8 May 2006
30 July 2006
9 October 2006
31 October 2006
1 November 2006
30 January 2007
1 February 2007
30 April 2007
29 June 2007
30 July 2007
30 October 2007
Exercise
price
RM
3.65
3.96
4.75
4.40
4.10
4.59
5.13
4.80
4.70
4.76
5.13
4.78
4.78
4.40
4.13
4.17
4.22
5.00
4.48
4.48
4.94
5.44
4.26
4.13
3.71
3.06
Vesting period
22 October 2004 – 2006
30 January 2005 – 2007
30 April 2005 – 2007
19 May 2005 – 2007
30 July 2005 – 2007
30 October 2005 – 2007
30 January 2006 – 2008
11 March 2006 – 2008
1 April 2006 – 2008
30 April 2006 – 2008
1 August 2006 – 2008
24 October 2006 – 2008
30 October 2006 – 2008
31 January 2007 – 2009 30 April 2007 – 2009 8 May 2007 – 2009 30 July 2007 – 2009 1 February 2007 – 2010 31 October 2007 – 2009 1 November 2007 – 2009 30 January 2008 – 2010 30 April 2008 – 2011 30 April 2008 – 2010 29 July 2008 – 2010 30 July 2008 – 2010 30 October 2008 – 2010 2003 Employee Share Option Scheme (“ESOS”) and 2003 Management Share Incentive
MSIS
The share options granted give the option holders the right to purchase the shares of the Company
and will expire on 21 October 2013. A substantial number of the shares options vested on 30 April
2007 and are exercisable from 22 October 2007.
Number of options over
ordinary shares
2008
2007
9,341,400
230,700
559,880
498,800
265,500
259,600
209,800
752,000
21,814,534
1,393,000
1,031,500
20,000
1,104,600
732,952
1,532,050
720,000
1,563,800
750,000
1,375,900
23,765,700
1,132,300
6,000,000
2,180,750
1,477,800
2,236,300
5,141,600
10,312,200
259,200
622,900
498,800
299,300
277,100
228,900
752,000
23,563,800
1,590,900
1,107,200
20,000
1,138,800
843,700
1,583,750
720,000
2,202,800
–
–
28,692,000
–
–
–
–
–
–
86,090,466
74,713,350
The options over ordinary shares of the Company outstanding under the MSIS as at end of financial
years, consist of the following:
Date granted
22 October 2003
30 April 2004
30 July 2004
30 October 2004
Exercise price
RM
Vesting date
3.65
4.75
4.10
4.59
30 April 2007
30 April 2007
30 April 2007
30 April 2007
Number of options over
ordinary shares
2007
2008
5,874,750
356,310
81,000
72,000
7,277,500
395,900
90,000
80,000
6,384,060
7,843,400
The Group incurred a charge of RM25,266,000 (2007: RM23,060,000) in respect of share-based
payments to eligible employees within the Group. Included in this amount was the Parent Company’s
charge of RM5,079,000 (2007: RM3,330,000). The remaining amount of RM20,187,000 (2007:
RM19,730,000) was recharged to respective subsidiaries within the Group.
The weighted average fair value of options granted during the period was determined using the
Binomial valuation model. Key inputs and assumptions used to estimate the fair value of the share
option includes the weighted average share price at the grant date, average risk free interest rate,
weighted average expected dividend yield, exercise prices and the standard deviation of expected
share price returns. The standard deviation of expected share price returns is based on statistical
analysis of weekly closing share prices from 31 October 2003 to 27 July 2007.
99
31 January 2008
29Merger Reserve (non-distributable)
Inputs into the model:
Average Exercise price
Weighted average grant date share price
Weighted average fair value of option
Average risk free rate
Weighted average expected dividend yield
Expected volatility
2008
2007
RM4.31
RM4.13
RM1.03
4.35%
3.69%
21.04%
RM4.43
RM4.94
RM1.18
4.35%
2.13%
19.30%
Options granted under the ESOS and MSIS schemes do not carry any dividend or voting rights prior
to the exercise of the options and will be subject to the provisions of the Memorandum and Articles
of Association. Upon the exercise of the options, shares issued shall rank pari passu in all respects
with existing ordinary shares of the Company.
Premium on ordinary shares of 10p each
Premium on issuance of ordinary shares:
– pursuant to exercise of share options
30Minority Interests
2008
RM’000
2007
RM’000
Share of net losses
5,522
1,462
(5,712)
(9)
14,457
233
(9,168)
–
1,263
5,522
31Financial Instruments
(a) Credit risk
28Share Premium (non-distributable)
The merger reserve arose from the Company’s business combination with ASTRO Overseas Limited
(“AOL”) prior to the introduction of IFRS 3 - ‘Business Combinations’. The merger reserve represents
the excess of the value of the share capital of AOL acquired of RM1,242,875,000 over the nominal
value of shares of the Company being issued of RM724,429,000.
2008
RM’000
2007
RM’000
27,643
11,024
3,986
16,619
31,629
27,643
The Group is exposed to credit risk arising from the financial assets of the Group, which
comprise receivables, cash and cash equivalents and derivative financial instruments.
Trade receivables
Concentration of credit risk with respect to trade receivables are limited due to the Group’s
large number of customers. The Directors believe that there is no additional credit exposure
above the amounts provided.
100
31 January 2008
31Financial Instruments (CONT’D.)
31Financial Instruments (Cont’d.)
(a) Credit risk (Cont’d.)
(a) Credit risk (Cont’d.)
Trade receivables (Cont’d.)
Other financial assets
The credit quality of trade receivables that were neither past due nor impaired as at the
balance sheet date, can be assessed by reference to historical information relating to
counterparty default rates:
With respect to credit risk arising from the other financial assets of the Group, the Group’s
exposure to credit risk arises from default of the counterparty, with a maximum exposure
equal to the carrying amount of these instruments.
In addition, a majority of the Group’s deposits are placed with financial institutions with strong
short-term credit rating in Malaysia.
2008
RM’000
2007
RM’000
Customers with no defaults in the past
72,812
Customers with some defaults in the past (all defaults
were fully recovered)
111,898
82,598
184,710
146,104
As at 31 January 2008, the analysis of the age of trade receivables that were past due but not
impaired is as follows:
Past due but not impaired
Not
Between
Between
Between
later than
30 days
RM’000
31 and 60
days
RM’000
61 and 90
days
RM’000 91 and 120
days
RM’000
Over
120 days
RM’000
Total
RM’000
As at 31
January
2008
6,027
37,421
18,645
14,335
18,469
94,897
As at 31
January
2007
4,986
34,064
8,461
13,646
18,150
(b) Liquidity risk
63,506
79,307
The table below summarises the maturity profile of the Group’s financial liabilities (borrowings
and payables, excluding unearned revenue) at 31 January 2008 based on contractual
undiscounted payments:
On demand
RM’000
Within
1 year
RM’000
Between
1 and 5
years
RM’000 Over
5 years
RM’000
Total
RM’000
At 31 January 2008
Borrowings
–
Payables
195,534
Derivative financial
instruments
–
– financial liabilities
57,074
702,924
437,463
177,207
593,041
10
1,087,578
1,075,675
140
–
–
140
195,534
760,138
614,670
593,051
2,163,393
At 31 January 2007
–
169,276
29,597
667,643
–
215,355
–
2
29,597
1,052,276
169,276
697,240
215,355
2
1,081,873
Borrowings
Payables
101
31 January 2008
(c) Market risk
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in the
United States Dollar (“USD”) exchange rate, with all other variables held constant, of the
Group’s profit before taxation. The sensitivity analysis includes outstanding foreign currency
denominated monetary items and adjusts their translation at the year end for a 10% change
in the exchange rate.
Increase/
decrease in
USD rate
Effect on
profit before
tax
RM’000
2008
+10%
–10%
2007
+10%
–10%
(d) Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to
continue as a going concern in order to provide returns to shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
2008
RM’000
2007
RM’000
(51,239)
51,239
497
(497)
Total equity
(200,260) (1,047,356)
1,620,435 1,847,385
1,420,175
(27,667)
27,667
–
–
786,571
28,309
(986,831) (1,075,665)
Total borrowings
Less: cash and cash equivalents
Total capital
800,029
The Group will balance its overall capital structure through the payment of dividends, new
share issues as well as the issue of new debt or the repayment of existing borrowings.
No changes were made in the objectives, policies or processes during the year ended
31 January 2008.
The following table demonstrates the sensitivity to a reasonably possible change in interest
rates, with all other variables held constant, of the Group’s profit before taxation. The
sensitivity analysis is determined based on the impact on floating rate financial instruments at
the balance sheet date.
Effect on
equity
RM’000
Interest rate sensitivity
The capital structure of the Group consists of borrowings, cash and cash equivalents and total
equity, comprising issued share capital, reserves and minority interests, as follows:
Increase/
decrease in
basis points
Effect on
profit before
tax
RM’000
Effect on
equity
RM’000
2008
+100
–100
(404)
404
–
–
2007
+100
–100
(222)
222
5,254
(5,254)
(e) Fair values
The carrying amounts of the Group’s financial assets and liabilities at the balance sheet date
approximate their fair values except as set out below:
2008
Carrying
amounts
RM’000
Fixed rate financial liabilities
which are denominated
in RM
Finance lease facilities
591,892
Fair value
RM’000
577,412
2007
Carrying
amounts
RM’000
26,484
Fair value
RM’000
26,484
The interest on non-current payables and borrowings are charged on a floating rate basis and
hence the carrying amounts approximate their fair values at the respective balance sheet dates.
102
31 January 2008
32Significant Related Party Disclosures
The Group has a number of related party transactions and the Group’s policy is, where practicable,
to agree terms with the related parties which are similar to those that would be available if the
transaction was contracted with a third party.
The Group has entered into a variety of related party transactions with companies directly or
indirectly controlled by or associated with Usaha Tegas Sdn. Bhd. (“UTSB”) as well as companies
or entities directly or indirectly controlled by or associated with Ananda Krishnan Tatparanandam or
in which he is deemed to have an interest, both of whom are deemed substantial shareholders of
the Company. UTSB is ultimately controlled by the trustee of a discretionary trust, the beneficiaries
of which are members of the family of Ananda Krishnan Tatparanandam and foundations including
those for charitable purposes (“the Trust”).
32Significant Related Party Disclosures (Cont’d.)
The following significant transactions were carried out with related parties:
(a) Sales of goods and services
2008
RM’000
2007
RM’000
The principal companies associated with UTSB are Tanjong Public Limited Company (“Tanjong”) and
Maxis Communications Berhad (“Maxis”). MAI Holdings Sdn. Bhd. is ultimately controlled by Ananda
Krishnan Tatparanandam.
Malaysian Mobile Services Sdn. Bhd.
(Multimedia and interactive sales and other services)
12,149
11,582
Maxis Broadband Sdn. Bhd.
3,540
2,888
(Multimedia and interactive sales and other services)
Kristal-Astro Sdn. Bhd.
(Set-top box sales, sales of programme rights, technical
4,459
9,067
support and other services)
AETN All Asia Networks Pte Ltd
2,989
–
(Playout channel service fee, subtitling and other services)
Related parties
Relationship
Malaysian Mobile Services Sdn. Bhd.
UTSB Management Sdn. Bhd.
SRG Asia Pacific Sdn. Bhd.
MEASAT Satellite Systems Sdn. Bhd. Yes Television (Hong Kong) Limited
Associate of the Company
Jointly controlled entity of the Company
Subsidiary of Maxis
Subsidiary of Maxis
Subsidiary of UTSB
Subsidiary of UTSB
Subsidiary of MAI Holdings Sdn. Bhd.
Yes TV is a substantial shareholder of two subsidiaries
in the Group. Two of Yes TV’s directors are also directors
in these subsidiaries.
(b) Purchases of goods and services
UTSB Management Sdn. Bhd.
15,122
15,076
(Personnel, strategic, consultancy and support services)
Yes Television (Hong Kong) Limited
5,663
6,763
(Personnel, strategic, consultancy and support services)
12,808
10,070
(Telecommunication services and other charges)
SRG Asia Pacific Sdn. Bhd.
14,104
10,725
(Interaction call center services)
MEASAT Satellite Systems Sdn. Bhd. (“MSS”)
(Expenses and payment related to finance lease, rental
78,645
26,666
and other charges)
(Turnaround channel transmission rights and
8,626
–
playout channel service deposit)
103
31 January 2008
(b) Purchases of goods and services (Cont’d.)
Interaction call centre services
Interaction call centre services are charged based on terms and conditions negotiated and
agreed by the parties.
Expenses related to finance leases
The amounts payable to MSS represent interest, executory and related costs arising from the
lease of the transponders from MSS (refer to Note 25 (b)).
(e) Key management personnel’s remuneration and emoluments excluding Directors:
Salaries and short term employee benefits
Share-based payments
MEASAT Satellite Systems Sdn. Bhd.
(Deposit and advance payment for lease of
satellite transponders)
2008
RM’000
–
(d) Year end balances arising from significant sales/purchases of goods and services
2007
RM’000
31,994
Payable to related parties
UTSB Management Sdn. Bhd. Yes Television (Hong Kong) Limited
Maxis Broadband Sdn. Bhd. SRG Asia Pacific Sdn. Bhd.
MEASAT Satellite Systems Sdn. Bhd.
13,350
553
3,023
10,433
576
602
16,926
11,611
33Commitments
(a) Capital commitments
Receivable from related parties
Malaysian Mobile Services Sdn. Bhd. Maxis Broadband Sdn. Bhd.
2007
RM’000
Directors’ remuneration and emoluments are disclosed in Note 8.
2008
RM’000
Key management personnel comprise of members of the senior management team who are
directly responsible for the financial and operating policies and decisions of the Group and
Company.
(c) Others
7,226
1,567
1,369
6,028
8,166
1,274
2,436
–
23,001
2
2,483
5,087
3,400
8,626
3,017
31
2,568
3,025
3,954
–
Capital commitments approved and contracted for at the balance sheet date but not
recognised in the financial statements are as follows:
Capital expenditure
Investment in an associate Investment in Sun Direct TV (note 16)
Finance lease commitments
2008
RM’000
2007
RM’000
72,976
16,057
355,380
235,690
43,004
17,351
–
–
680,103
60,355
104
31 January 2008
33Commitments (CONT’D.)
33Commitments (CONT’D.)
(a) Capital commitments (Cont’d.)
(c) Operating lease commitments (non-cancellable)
Capital commitment for investment in an associate
The capital commitment for investment in TVB Publishing Holding Limited (“TVBPH”) relates
to the remaining payment for uncalled ordinary share capital following the acquisition on 20
August 2003 of an additional 10% of the issued ordinary share capital (of which 7.9% has
been fully paid) (“Uncalled Shares”). Subject to meeting certain requirements, these payments
are to be settled in four tranches of HKD9,675,000 each, two of which were due for payment
on 30 September 2004 and another two on 30 June 2005. As at 31 January 2008, the Group
was negotiating for the deferment of the payments.
The Uncalled Shares rank pari passu in all respect with the existing shares except that the
Uncalled Shares shall be credited when paid and voting rights shall accrue in proportion to the
amounts paid and dividends shall be apportioned and paid pro-rata according to the amounts
paid on the Uncalled Shares. The shareholding in TVBPH will increase from 26.3% (2007:
26.3%) to 30.0% upon the full payment of the Uncalled Shares.
The Group has the following contracted film library and programme rights at the balance sheet
date which has not been recognised in the financial statements:
Not later than 1 year
Later than 1 year and not more than 5 years
Later than 5 years
2008
RM’000
2007
RM’000
7,113
5,895
9,580
5,774
6,632
11,054
22,588
23,460
34Contingent Liabilities
The Group have provided guarantees to third parties amounting to RM1,648,000 (2007:
RM2,381,000) in respect of licence fees in subsidiaries.
Guarantees of RM30,986,000 were provided to third parties in respect of working capital facilities
secured by associates in the previous financial year.
(b) Programming commitments
The future aggregate minimum lease payments under non-cancellable operating leases are as
follows:
2008
RM’000
2007
RM’000
126,081
174,363
35Significant Post Balance Sheet Events
There were no significant post balance sheet events as at 23 April 2008, except for as disclosed in
Note 16 (b) and Note 25 (d).
105
31 January 2008
36Subsidiaries
All of the subsidiaries have been included in the consolidated financial statements. Details of principal subsidiaries are shown below:
Effective interest
2008
2007
%
%
ASTRO Overseas Limited (“AOL”)
Bermuda
Ordinary
Malaysia
Ordinary
MEASAT Broadcast Network Systems Sdn. Bhd. (“MBNS”) 100
100
Investment holding
100
100
Providing Direct-to-Home satellite broadcasting services
MEASAT Publications Sdn. Bhd. (“MPUB”)
Malaysia
Ordinary
100
100
Magazine publication and distribution
ASTRO Shaw Sdn. Bhd. (“ASSB”) Malaysia
Ordinary
100
100
Production and distribution of films
MBNS Multimedia Technologies Sdn. Bhd. Malaysia
Ordinary
100
100
Research and development of multimedia related technologies
Multimedia Interactive Technologies Sdn. Bhd. (“MMIT”)
Malaysia
Ordinary
100
100
Development and licensing of multimedia and interactive applications
Radio Advertising and Programming Systems Sdn. Bhd. (Dissolved on 2 November 2007) (Note 36(ii))
Malaysia
Ordinary
–
100
Investment holding
Name of subsidiary
Directly held by the Company
Country of
incorporation
Class
of shares
MEASAT Radio Communications Sdn. Bhd. Malaysia
Ordinary
100
100
100
100
Maestra Broadcast Sdn. Bhd. Malaysia
Ordinary
Hotspotz.Com Sdn. Bhd. Malaysia
Ordinary
100
100
Airtime Management and Programming Sdn. Bhd. (“AMP”) Malaysia
Ordinary
100
100
Ordinary
100
100
Astro Global Ventures (L) Ltd
Malaysia
Ordinary
100
–
Radio Lebuhraya Sdn. Bhd. (“RLSB”)
Malaysia
Operation of commercial radio broadcasting stations
Operation of commercial radio broadcasting stations
Multimedia and interactive advertising
Management of commercial radio broadcasting stations, content and
programming provider and provision of multimedia and advertising agency
services
Establish, operate and maintain a radio broadcasting station
Undertaking corporate exercise
106
31 January 2008
36Subsidiaries (CONT’D.)
Name of subsidiary
Subsidiaries held by AOL
Country of
incorporation
Class
of shares
Effective interest
2008
2007
%
%
All Asia Radio Technologies Limited (“AART”)
Hong Kong
Ordinary
100
100
Investment holding and engaging in radio broadcasting and provision of
programming, operation of radio stations, airtime sales and marketing and its
related activities.
ASTRO All Asia Entertainment Networks Limited (“AAAE”)
Hong Kong
Ordinary
100
100
Investment holding
ASTRO Nusantara International B.V.
Netherlands
Ordinary
100
100
Investment holding
ASTRO Nusantara Holdings B.V.
Netherlands
Ordinary
100
100
Investment holding
All Asia Interactive Technologies (BVI) Ltd (“AAIT”)
BVI
Ordinary
100
100
Investment holding
ASTRO (Brunei) Sdn. Bhd. (“ABSB”) Malaysia
Ordinary
100
100
Investment holding
MEASAT Broadcast Network Systems (BVI) Ltd
BVI
Ordinary
100
100
Investment holding
East Asia Entertainment (BVI) Ltd (“EAE”)
BVI
Ordinary
100
100
Investment holding
Digital Software Exports Ltd (“DSEL”) Mauritius
Ordinary
100
100
Investment holding
ASTRO E.Com Ltd (“AECL”) Mauritius
Ordinary
100
100
Investment holding
Mauritius
Ordinary
100
100
Investment holding
South Asia Software Technologies Ltd (“SAST”)
(formerly known as South Asia Radio Holdings Ltd)
Philippine Animation N.V. (“PANV”)
Netherlands Antilles
Ordinary
100
100
Investment holding
All Asia Multimedia Networks FZ-LLC
United Arab Emirates
Ordinary
100
100
Development and supply of multimedia products and services
Mauritius
Ordinary
100
100
Investment holding
Malaysia
Ordinary
100
100
Letting of property and related services
South Asia Entertainment Holdings Ltd
Subsidiary held by MBNS
MEASAT Digicast Sdn. Bhd. (“Digicast”)
1 07
31 January 2008
Country of
incorporation
Class
of shares
Effective interest
2008
2007
%
%
Tayangan Unggul Sdn. Bhd. Malaysia
Ordinary
100
100
Film production, acquisition, commissioning and distribution
Nusantara Films Sdn. Bhd.
Malaysia
Ordinary
100
100
Production, acquisition, commissioning and distribution of films
Subsidiaries held by AMP
DVR Player.Com Sdn. Bhd. Malaysia
Ordinary
100
100
Provision of radio services via internet
MAMBO Networks Sdn. Bhd. Malaysia
Ordinary
100
100
Provision of multimedia and interactive services and products
Subsidiary held by SAST
Airtime Marketing & Sales India Private Limited
India
Equity
74
74
Provision of consultancy, support services and studio facilities in the media sector
Subsidiary held by AECL and DSEL
ASTRO Network India Private Limited (“ASTRO Network India”)(1)
India
Equity
74
74
Internet service provider business
Subsidiary held by EAE
Celestial Entertainment Holdings Limited (“CEHL”) Hong Kong
Ordinary
100
100
Investment holding
Hong Kong
Ordinary
100
100
Film licensing and distribution
Celestial Movie Channel Limited (“CMCL”) Celestial Filmed Entertainment Limited (“CFEL”)
Celestial Enterprises Limited (“CEL”)
Hong Kong
Ordinary
100
100
Distribution of movie channel
Hong Kong
Ordinary
100
100
Hong Kong
Ordinary
100
100
Provision, licensing and distribution of television programme and channel
Hong Kong
Ordinary
100
100
Name of subsidiary
Subsidiaries held by ASSB
Subsidiary held by CEHL
Celestial Pictures Limited (“CPL”)
Subsidiaries held by CPL
Celestial Productions Limited (“CPRL”) Deemed effective interest via DSEL’s 49% equity interest in ASTRO Network India and AECL’s 49% direct equity interest in ASTRO E.Com India Private Limited, which holds 51% equity interest in ASTRO Network India.
(1)
108
31 January 2008
Name of subsidiary
Subsidiaries held by CMCL
Tian Ying Movie Channel Limited
Celestial Television Networks Limited
Subsidiaries held by CFEL
Celestial Filmed Entertainment Inc
Country of
incorporation
Class
of shares
Effective interest
2008
2007
%
%
Hong Kong
Ordinary
100
100
United Kingdom
Ordinary
100
100
100
100
Common stock
United States
of America
Subsidiaries held by CEL
Beijing Celestial Channel Consulting Limited Global Entertainment and Management Systems
(BVI) Ltd (“GEMS”)
100
100
Provision of marketing and consulting services
The People’s
Ordinary
Republic of China
BVI
Ordinary
100
100
Subsidiaries held by PANV
95.45
95.45
Philippine Animation Studio, Inc
Philippines
Ordinary
Ordinary
100
100
Pacific Digital Inc
Philippines
Ordinary
100
100
Investment holding
Pacific Digital Animation N.V. (“PDA”)
Netherlands Antilles
Producing, processing and exporting animated motion pictures and related
products and providing allied services
Studio management and holder of film properties rights
Producing, processing and exporting animation films and related products and
providing allied services
Subsidiary held by AAIT
75
75
Plus Interactive Asia Limited
Hong Kong
Ordinary
Aggregation and distribution of content over broadband, providing web portal
outsourcing services and providing consultancy services
109
31 January 2008
Name of subsidiary
Subsidiaries held by AAAE
Country of
incorporation
Class
of shares
Effective interest
2008
2007
%
%
ASTRO Awani Network Ltd (“Awani”) (formerly known
Mauritius
Ordinary
80
80
as ASTRO Broadcast Corporation Ltd)
Creation, production, acquisition, aggregation and syndication digital
multimedia programming content in the form of television and radio
programmes and channels for distribution across Asia Pacific markets
ASTRO Ceria Network (BVI) Ltd (formerly known as
BVI
Ordinary
100
100
Content creation and aggregation of kids channel
All Asia Programming Systems (BVI) Ltd)
ASTRO Aruna Network (BVI) Ltd (formerly known as
BVI
Ordinary
50
100
Content creation and aggregation of sinetron channel
All Asia Broadcast Networks Ltd) (Note 36(iv))
ASTRO Kirana Network (BVI) Ltd (formerly known
BVI
Ordinary
100
100
Content creation and aggregation of movie channel
as ASTRO Asia Pacific Broadcast Ltd)
ASTRO Xpresi Network (BVI) Ltd (formerly known
BVI
Ordinary
as All Asia Television Broadcast (BVI) Ltd)
100
100
Content creation andaggregation of music/lifestyle channel
Global Sports Entertainment S.à r.l. (“GSE”) (Note 36(i))
Investment holding
Luxembourg
Ordinary
100
100
Goal TV Asia Limited (“Goal TV”) (Note 36(i))
Mauritius
Ordinary
51
51
ASTRO Entertainment Sdn. Bhd. (“AESB”) Malaysia
Ordinary
100
100
South Asia Creative Assets Ltd
Mauritius
Ordinary
100
–
Subsidiary held by PDA
100
100
Philippine Animators Group, Inc
Philippines
Ordinary
Channel licensing and distribution
Creation, aggregation and distribution of content
Investment holding
Producing, processing and distributing animation films and related products
and providing allied services
110
31 January 2008
Name of subsidiary
Subsidiaries held by AART
Country of
incorporation
Class
of shares
Effective interest
2008
2007
%
%
East Asia Radio Technologies Limited
Hong Kong
Ordinary
100
100
Nusantara Radio Holdings Limited
Hong Kong
Ordinary
100
South Asia Multimedia Technologies Ltd
Mauritius
Ordinary
100
All Asia Radio Technologies Media and Sales Sdn. Bhd.
Malaysia
Ordinary
Subsidiaries held by AESB
ASTRO Productions Sdn. Bhd. (“APRD”) (Note 36(iii))
Malaysia
Ordinary
100
100
Nusantara Seni Karya Sdn. Bhd. (“NSK”) (Note 36(iii), (iv))
Malaysia
Ordinary
51
Designing, producing and disseminating advertisements and acting as
advertising sales agent
100
Investment holding
100
Investment holding
–
100
Maestro Talent and Management Sdn. Bhd. (“MTAM”) (Note 36(iii))
Malaysia
Ordinary
100
100
100
Airtime sales marketing and trading, media training and media research
Production and distribution of television drama programmes
Development and management of new talent in entertainment and broadcast
industry and music recording
Production and distribution of specialised products
The following significant transactions occurred during the current financial year:
(i)
The following subsidiaries were transferred within the Group as part of the Group’s internal restructuring plan, gearing towards the consolidation of investments in international content development and
aggregation of business:
Name of Subsidiary
Goal TV
GSE
(ii)
Transfer from
Transfer to
Date of Transfer
AOL
AOL
AAAE
AAAE
31 March 2006
31 March 2006
RAPS was dissolved by way of a member’s voluntary winding up on 2 November 2007.
111
31 January 2008
(iii) The following subsidiaries were transferred within the Group as part of the Group’s internal restructuring plan, undertaken for the purpose of consolidating business activities related to television content under a
single entity namely AESB and to facilitate management direction and accountability in growing the Group’s content business:
Name of Subsidiary
Transfer from
Transfer to
Date of Transfer
APRD
MTAM
NSK
the Company
the Company
APRD
AESB
AESB
AESB
13 June 2007
13 June 2007
13 June 2007
(iv) Dilution of interest in subsidiaries
(a) NSK
On 23 August 2007, NSK allotted 3,250,000 ordinary shares of RM1 each, of which 1,535,000 shares were issued to ASTRO Entertainment Sdn Bhd, a wholly-owned subsidiary of the Group, and
1,715,000 shares were issued to PT Tripar Multivision Plus. Following the change, the Group’s equity interest in NSK was diluted from 100% to 51%.
(b) ASTRO Aruna Network (BVI) Ltd
On 2 November 2007, the equity interest held by the Group in ASTRO Aruna Networks (BVI) Ltd was diluted from 100% to 50% as a result of the allotment of 1 ordinary share of USD1 each to Sound
Space International Limited.
37Non-cash transactions
The principal non-cash transactions are as follows:
Financial year ended 31 January 2008
(a) Advertising airtime sales in exchange for consumable items of RM4,266,000 and subsequent settlement of liabilities using these consumable items
(b) Barter magazine advertising sales of RM220,000
(c) Acquisition of property, plant and equipment by means of finance lease of RM638,890,000
Financial year ended 31 January 2007
(a) Advertising airtime sales in exchange for consumable items of RM1,170,000 and subsequent settlement of liabilities using these consumable items
112
Company Financial Statements
COMPANY INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 31 JANUARY 2008
Note
COMPANY BALANCE SHEET AS AT 31 JANUARY 2008 (CONT’D.)
2008
RM’000
2007
RM’000
Revenue
(i)
Cost of sales
275,286
–
165,292
–
Gross Profit
275,286
165,292
Other operating income
Marketing and distribution costs
Administrative expenses
1
(12,707)
(73,115)
2
(8,998)
(48,871)
(ii)
(v)
189,465
20,150
107,425
48,778
Taxation
(vi)
209,615
(3,211)
156,203
(6,102)
Non-Current Liabilities
Borrowings (interest bearing)
Profit after taxation
206,404
150,101
COMPANY BALANCE SHEET AS AT 31 JANUARY 2008
Non-Current Assets
Investments in subsidiaries
Intangible assets
Note
2008
RM’000
2007
RM’000
(vii)
(xxi)
(viii)
1,174
9,090,533
4,736
857
8,885,474
2,059
9,096,443
8,888,390
Current Assets
(ix)
(x)
Tax recoverable
(xi)
Note
2008
RM’000
2007
RM’000
Current Liabilities
Payables
(xii)
Borrowings (interest bearing)
(xiii)
Current tax liabilities
6,444,760
465
667
6,582,375
–
–
6,582,375
6,445,892
Net current liabilities
(5,198,715) (5,357,378)
10,679
190,300
11,658
–
200,979
11,658
3,696,749
3,519,354
Equity
Capital and reserves attributable to equity holders of the Company:
Share capital
(xv)
Share premium
(xvi)
Hedging reserve
Other reserve
Retained earnings 1,200,049
31,629
–
83,074
2,381,997
1,199,194
27,643
12,008
58,798
2,221,711
3,696,749
3,519,354
(xiv)
(xiii)
The accompanying notes on pages 115 to 124 form part of the company financial statements.
1,164,791
–
–
82,386
637,567
12,008
298
575,124
1,247,177
1,224,997
The significant accounting policies and critical accounting estimates and judgements of the Company are
set out on pages 62 to 74.
DIRECTORDIRECTOR
113
COMPANY FINANCIAL STATEMENTS
COMPANY CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED
31 JANUARY 2008
Note
COMPANY CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED
31 JANUARY 2008 (CONT’D.)
2008
RM’000
2007
RM’000
Profit for the financial year
(viii)
Intangible assets - amortisation
(vii)
– Depreciation – Impairment
(v)
Interest income
(i)
RCPS yield (v)
Finance/Interest cost
(iv)
Value of employee services – share options
(vi)
Taxation
(v)
Proceeds from interest rate swap contract
(v)
Unrealised foreign exchange losses/(gains)
206,404
68
150,101
30
247
5
(33,707)
(22,800)
13,500
5,079
3,211
(9,648)
13,216
128
–
(36,025)
(22,800)
3,081
3,330
6,102
(12,931)
(4,105)
Changes in working capital:
175,575
86,911
Payables
(380,115)
(11,473)
(364,216)
26,037
Cash generated from operations
Income tax paid
Interest received
(216,013)
(3,225)
13,431
(251,268)
(5,296)
14,196
(205,807)
(242,368)
Net cash flow from operating activities
Note
2008
RM’000
2007
RM’000
Cash Flows From Investing Activities
Cash Flows From Operating Activities
Advances to subsidiaries
Repayment from subsidiaries
Investment in subsidiaries
Purchase of property, plant and equipment
Acquisition of intangible assets
(349,169)
55,997
–
(565)
(2,758)
(51,824)
517,428
(150)
(428)
(63)
Net cash flow from investing activities
(296,495)
464,963
Finance costs
Dividends paid
Proceeds from realisation of interest rate swap contract
Drawdown of borrowings
Issuance of shares pursuant to exercise of share options
(12,264)
(193,391)
9,648
200,730
4,841
(3,081)
(106,043)
11,264
–
20,381
Net cash flow from financing activities
9,564
(77,479)
(492,738)
575,124
145,116
430,008
(xi)
82,386
575,124
Cash Flows From Financing Activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
114
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 JANUARY 2008
Non-distributable
Share
capital
(Note xv)
RM’000
Share
premium
RM’000
Hedging
reserve
RM’000
Other
reserve
RM’000
Retained
earnings
RM’000
Total
RM’000
1,199,194
27,643
12,008
58,798
2,221,711
3,519,354
Cash flow hedge:
– fair value loss on hedging instrument
–
–
–
–
(3,098)
(8,910)
–
–
–
–
(3,098)
(8,910)
Net losses recognised directly in equity
Profit for the year
–
–
–
–
(12,008)
–
–
–
–
206,404
(12,008)
206,404
Share options:
Winding up of a subsidiary
Dividends
–
–
(12,008)
–
206,404
194,396
855
–
–
–
–
3,986
–
–
–
–
–
–
–
–
–
–
25,266
(990)
–
–
–
–
990
146,283
(193,391)
4,841
25,266
–
146,283
(193,391)
At 31 January 2008
1,200,049
31,629
–
83,074
2,381,997
3,696,749
At 1 February 2006
1,195,432
11,024
15,422
40,584
2,172,807
3,435,269
Cash flow hedge:
– fair value gain on hedging instrument
–
–
–
–
4,906
(8,320)
–
–
–
–
4,906
(8,320)
Net income recognised directly in equity
Profit for the year
–
–
–
–
(3,414)
–
–
–
–
150,101
(3,414)
150,101
Share options:
– value of employee service
Dividends
–
–
(3,414)
–
150,101
146,687
3,762
–
–
–
16,619
–
–
–
–
–
–
–
–
23,060
(4,846)
–
–
–
4,846
(106,043)
20,381
23,060
–
(106,043)
1,199,194
27,643
12,008
58,798
2,221,711
3,519,354
At 1 February 2007
At 31 January 2007
115
Notes To The Company Financial Statements – 31 January 2008
Notes To The Company Financial Statements – 31 January 2008 (cont’D.)
(i)
Revenue
(iii)
Directors’ Remuneration
Revenue comprises the following:
2008
RM’000
2007
RM’000
2008
RM’000
2007
RM’000
802
2,807
384
353
885
3,161
1,331
438
4,346
5,815
2,516
384
353
2,930
1,331
438
3,253
4,699
2008
RM’000
2007
RM’000
33,345
2,151
108
5,079
3,265
20,803
597
59
3,330
2,482
Recruiting costs
Staff training
43,948
1,812
2,191
27,271
421
323
47,951
28,015
Dividend income RCPS yield
Management fees
197,335
22,800
55,151
107,250
22,800
35,242
Revenue
275,286
165,292
(ii)
The following items have been charged in arriving at the profit from operations:
Depreciation of tangible fixed assets
Rental of building
2008
RM’000
2007
RM’000
68
247
1,935
30
128
1,703
Auditors remuneration
PricewaterhouseCoopers LLP (“PwC”) are the Group’s external auditors for the financial year
under review and are subject to re-appointment at the AGM. The aggregate fees for professional
services rendered by PwC and its associates are detailed below:
Audit of parent company and consolidated financial statements
– under accrual in respect of prior year
Fees payable to PwC and its associates for other services:
– tax services
– services relating to corporate finance transactions
– other services pursuant to legislation
– all other services*
2008
RM’000
2007
RM’000
606
–
611
98
231
–
34
1,490
278
434
34
1,140
2,361
2,595
* Includes quarterly reviews, other attestation services, project and advisory review/services
Fees
Salaries and emoluments
Share-based payment
Highest paid Director
– Salaries and emoluments
– Share-based payment
– Defined contribution plan
(iv)
Employees (including Executive Director’s remuneration)
Wages and salaries
Employee benefits in kind
Social security costs
Share-based payment
The average number of persons employed by the Company was 158 (2007: 121).
116
(v)
Finance Costs And Finance Income
(vi)
Taxation (Cont’d.)
2008
RM’000
2007
RM’000
A reconciliation of income tax expense applicable to profit before taxation at the Malaysian
statutory rate to income tax expense at the effective income tax rate of the Company is as follows:
Interest income
Realised foreign exchange gains/(losses)
Unrealised foreign exchange (losses)/gains
33,707
3,511
(13,216)
9,648
36,025
(1,202)
4,105
12,931
Finance income (gross)
33,650
Finance costs (gross) Finance income (net) (vi)
Taxation
Current taxation:
– Current year
– Underaccrual in prior years
Deferred taxation:
– Origination and reversal of temporary differences
– Change in Malaysian tax rate
2008
RM’000
2007
RM’000
209,615
156,203
51,859
Tax at Malaysian tax rate
(54,500)
(42,175)
(13,500)
(3,081)
Tax effect of:
20,150
48,778
2008
RM’000
2007
RM’000
Expenses not deductible for tax purposes
Income not subject to tax
Under-accrual in respect of prior financial years (net)
427
(10,123)
62,318
(1,333)
873
(4,588)
40,278
(490)
Taxation charge
(3,211)
(6,102)
(2,917)
(1,273)
(5,833)
(50)
(4,190)
(5,883)
552
427
(1,092)
873
(3,211)
(6,102)
Malaysian income tax is calculated at the statutory rate of 26% (2007: 27%) of the estimated
assessable profit for the year. The Malaysian corporate tax rate is reduced from 26% to 25%
with effect from year of assessment 2009, the computation of deferred tax has been adjusted
accordingly to reflect such changes.
117
(vii)
(viii) Intangible Assets (Cont’d.)
Property, Plant And Equipment
Equipment, fixtures and fittings
Software costs (Cont’d.)
2007
RM’000
1,478
(621)
816
(315)
Additions
Amortisation charge
Transfer to subsidiaries
2,758
(68)
(13)
63
(30)
–
4,736
2,059
2008
RM’000
2008
RM’000
2007
RM’000
At 1 February
Cost
Net book amount
857
501
At 31 January
Additions
Transfer from subsidiaries
Depreciation charge Impairment
565
4
(247)
(5)
428
56
(128)
–
At 31 January
Cost
Accumulated amortisation
4,864
(128)
2,126
(67)
At 31 January 1,174
857
Net book amount
4,736
2,059
Cost
2,041
(867)
1,478
(621)
2008
RM’000
2007
RM’000
Net book amount
1,174
857
2008
RM’000
2007
RM’000
At 31 January
(viii) Intangible Assets
Software costs
At 1 February Cost
2,126
2,063
(67)
(37)
Accumulated amortisation
Net book amount
2,059
2,026
(ix)
Receivables And Prepayments
Other receivables
Amounts due from related parties
Amounts due from subsidiaries
3,055
369
1,154,653
170,317
115
446,659
Total net receivables
Prepayments
1,158,077
6,714
617,091
20,476
1,164,791
637,567
All amounts due from subsidiaries are unsecured, interest-free and have no fixed terms of
repayment.
118
(ix)
Receivables And Prepayments (Cont’d.)
(xi)
Cash And Cash Equivalents (Cont’d.)
Deposits of the Company have an average maturity of 11 days (2007: 21 days) for the financial
year.
The effective interest rates per annum on deposits for the Company as at the end of financial year
are between 2.7% to 4.6% (2007: 2.4% to 4.6%).
Deposits, cash and bank balances are denominated in the following currencies:
Total net receivables were denominated in the following currencies:
2008
RM’000
2007
RM’000
RM
USD Others
796,222
283,145
78,710
264,685
332,518
19,888
1,158,077
617,091
2008
RM’000
2007
RM’000
RM
USD
13,270
69,116
547,266
27,858
82,386
575,124
2008
RM’000
2007
RM’000
15,562
3,641
6,425,557
131,150
2,814
6,448,411
6,444,760
6,582,375
2008
RM’000
2007
RM’000
RM
INR
USD
Others
6,406,565
4,961
26,682
6,552
6,440,980
126,968
10,062
4,365
6,444,760
6,582,375
Derivative Financial Instruments
(x)
2008
Interest-rate swap – cash flow hedges
2007
Assets
RM’000
Liabilities
RM’000 Assets
RM’000
Liabilities
RM’000
–
–
12,008
–
Interest-rate swap
(xii) Payables
The notional principal amounts of the outstanding interest rate swap contracts at 31 January
2008 was Nil (2007: RM525,375,000).
(xi)
For the purposes of the cash flow statement, cash and cash equivalents comprise the following:
2008
RM’000
2007
RM’000
Deposits with licensed banks and financial institutions
Cash and bank balances
81,831
555
573,087
2,037
82,386
575,124
Other payables and accruals
Amounts due to related parties
Amounts due to subsidiaries
Total payables were denominated in the following currencies:
119
(xiii) Borrowings (unsecured)
Current
Non-current
2008
RM’000
2007
RM’000
465
190,300
–
–
190,765
–
The borrowing is in respect of the Company’s USD300m Guaranteed Term and Revolving Facilities
secured on 18 October 2004 (“USD Facilities”) comprise Tranche A (USD150m), Tranche B
(USD75m) and Tranche C (USD75m). Tranche A of the USD Facilities lapsed on 18 April 2007.
On 14 December 2007, the facility documentation was amended and the guarantees provided
by MEASAT Broadcast Network Systems Sdn Bhd and Airtime Management and Programming
Sdn Bhd were released. With the amendment, (i) a total of USD4.9m out of the USD150m was
terminated following one lenders’ non-consent to the amendments leaving a balance USD145m
available for reimbursing debt settlement and/or financing general corporate purposes and
working capital of the Company and its subsidiaries and (ii) the availability of the balance USD
Facilities is subject to annual extension up to the final maturity dates of 18 October 2009
(USD100m) and 18 October 2010 (USD45m).
The effective interest rates of the borrowings at the end of the financial year was 5.5% (2007:
Nil).
(xiv) Deferred Tax
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off
current tax assets against current tax liabilities and when the deferred taxes relate to the same
tax authority. The following amounts, determined after appropriate offsetting, are shown in the
balance sheet:
(Charged)/credited to income statement:
– property, plant and equipment
– tax losses
– provisions and accruals
– interest receivable
Deferred tax assets (before offsetting)
Provisions and accruals
Offsetting
Deferred tax assets (after offsetting)
Deferred tax liabilities (before offsetting)
Interest receivable
Offsetting
Deferred tax liabilities (after offsetting)
2008
RM’000
2007
RM’000
(10,679)
(11,658)
(11,658)
(11,440)
18
–
666
295
(551)
(75)
270
138
979
(218)
(10,679)
(11,658)
1,209
(1,209)
543
(543)
–
–
(553)
(11,335)
(571)
(11,630)
(11,888)
1,209
(12,201)
543
(10,679)
(11,658)
120
(xv)
Share Capital
(xvi) Share Premium
Authorised
At beginning/end of financial year
(3,000,000,000 ordinary shares)
2008
RM’000
1,851,000
2007
RM’000
1,851,000
Redeemable preference shares (“RPS”) and
redeemable convertible preference shares (“RCPS”)
RPS of GBP1.00 each (49,998 RPS)
Series I RCPS of 1p each (53,947,368 RCPS)
Series II RCPS of 1p each (103,947,368 RCPS)
–
–
–
299
3,296
6,352
–
9,947
On 26 July 2007, pursuant to shareholders’ approval at the EGM, the authorised share capital
of the Company has been amended from GBP301,628,945 divided into 3,000,000,000 ordinary
shares of 10p each, 49,998 RPS of GBP1.00 each, 53,947,368 Series I RCPS of 1p each and
103,947,368 Series II RCPS of 1p each to GBP300,000,000 divided into 3,000,000,000 ordinary
shares of 10p each.
Issued and fully paid
(1,932,776,161 (2007: 1,927,332,461) ordinary shares)
Shares issued pursuant to exercise of share options
(1,256,400 (2007: 5,443,700) ordinary shares)
At end of financial year (1,934,032,561 (2007: 1,932,776,161)
ordinary shares)
2008
RM’000
2007
RM’000
1,199,194
1,195,432
855
3,762
1,200,049
1,199,194
The share issues related to employee share option schemes with a cash consideration of
RM4,841,000 (2007: RM20,381,000).
2008
RM’000
2007
RM’000
Premium on ordinary shares of 10p each
Premium on issuance of ordinary shares:
– pursuant to exercise of share options
27,643
11,024
3,986
16,619
31,629
27,643
Details of the Company’s ESOS and MSIS schemes are disclosed in Note 27.
(xvii) Financial Instruments
(a) Credit risk
The Company is exposed to credit risk arising from the financial assets of the Company,
which comprise receivables, cash and cash equivalents and derivative financial instruments.
The Company has no significant concentration of credit risk. The Company’s exposure to
credit risk arises from default of the counterparty, with a maximum exposure equal to the
carrying amounts of these instruments. In addition, a majority of the Company’s deposits are
placed with financial institutions with strong short-term credit rating in Malaysia.
121
(xvii) Financial Instruments (Cont’d.)
(b) Liquidity risk
The table below summarises the maturity profile of the Company’s financial liabilities
(borrowings and payables) at 31 January 2008 based on contractual undiscounted
payments:
On demand
RM’000
Within
1 year
RM’000 Between
1 and 5
years
RM’000
Total
RM’000
At 31 January 2008
Borrowings
Payables
–
6,431,796*
465
12,964
190,300
–
190,765
6,444,760
6,431,796
13,429
190,300
6,635,525
At 31 January 2007
Payables
6,575,735*
6,640
–
(c) Market risk (Cont’d.)
Foreign currency sensitivity (Cont’d.)
(c) Market risk
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in the
United States Dollar (“USD”) exchange rate, with all other variables held constant, of the
Company’s profit before taxation. The sensitivity analysis includes outstanding foreign
currency denominated monetary items and adjusts their translation at the year end for a
10% change in the exchange rate.
Increase/
decrease in
USD rate
Effect on
profit before
tax RM’000
Effect on
equity
RM’000
2008
+10%
2,598
–
–10%
(2,598)
–
+10%
–10%
19,966
(19,966)
–
–
2007
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest
rates, with all other variables held constant, of the Company’s profit before taxation. The
sensitivity analysis is determined based on the impact on floating rate financial instruments
at the balance sheet date.
6,582,375
* A majority of the payables on demand were amounts due to subsidiaries of
RM6,425,557,000 (2007: RM6,448,411,000)
Increase/
decrease in
basis points
Effect on
profit before
tax RM’000
Effect on
equity
RM’000
2008
+100
(223)
–
–100
223
–
+100
–100
–
–
5,254
(5,254)
2007
1 22
(xviii) Significant Related Party Disclosures
(d) Capital risk management
The capital structure of the Company consists of borrowings, cash and cash equivalents and
total equity, comprising issued share capital and reserves, as follows:
2008
RM’000
2007
RM’000
190,765
(82,386)
–
(575,124)
Total equity
108,379
3,696,749
(575,124)
3,519,354
Total capital
3,805,128
2,944,230
Total borrowings
Less: cash and cash equivalents
The Company has controlling related party relationships with its direct and indirect subsidiaries.
Amounts outstanding between the Parent Company and subsidiary undertakings as at 31 January
2008 are shown in Notes ix) & xii).
The following significant transactions were carried out with related parties:
The Company’s objectives when managing capital are to safeguard the Company’s ability
to continue as a going concern in order to provide returns to shareholders and benefits for
other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
The Company will balance its overall capital structure through the payment of dividends,
new share issues as well as the issue of new debt or the repayment of existing borrowings.
No changes were made in the objectives, policies or processes during the year ended 31
January 2008.
(e) Fair values
The carrying amounts of the Company’s financial assets and liabilities at the balance sheet
date approximate their fair values.
The interest on non-current borrowings are charged on a floating rate basis and hence the
carrying amounts approximate their fair values at the respective balance sheet dates.
Management fees charged to:
MBNS
Interest on advances charged to:
CEHL
RCPS yield from:
MBNS
Dividend income from:
AMP
MBNS
Rental expenses charged by:
Digicast
2008
RM’000
2007
RM’000
44,329
27,522
17,374
15,294
22,800
22,800
97,800
99,535
107,250
–
1,447
1,447
1 23
(xviii) Significant Related Party Disclosures (Cont’d.)
(xix) Commitments
Year end balances arising from significant sales/purchases of goods and services:
Receivable from related parties
2008
RM’000
2007
RM’000
168,834
90,712
30,842
116,888
16,242
16,609
18,884
9,459
19,737
7,516
807
10,062
2,491
133,182
33,816
13,385
34,138
10,098
13,662
18,875
6,081
19,118
6,216
162
138
2,686
MBNS
MPUB
MMIT
APRD
ASSB
AMP
AAIT
CPL
Awani
ASTRO Broadcast Corporation (BVI) Ltd
ASTRO Nusantara International B.V
ASTRO Nusantara Holdings B.V
Global Sports Entertainment S.à r.l
Payable to related parties
MBNS
Digicast All Asia Television and Radio Company (BVI) Ltd.
Key management personnel’s remuneration and emoluments excluding Directors:
(a) Capital commitments
Capital commitments contracted for at the balance sheet date but not recognised in the
financial statements are as follows:
Capital expenditure
2008
RM’000
2007
RM’000
4,711
784
(b) Financial support
The Company has confirmed its intention to provide financial support to certain of its
subsidiaries to enable them to meet their liabilities and obligations as and when they fall due
and to carry on their business without any significant curtailment of operations.
(xx)
Contingent Liabilities
The Company has provided guarantees to third parties amounting to RM1,648,000 (2007:
RM2,381,000) in respect of licence fees in subsidiaries.
(xxi) Investments In Subsidiaries
Salaries and short term employee benefits
Share-based payments
164,494
1,567
5,099
47,532
121
5,099
(a) Shares in subsidiaries
(b) Advances and commitments
2008
RM’000
2007
RM’000
6,456
220
2,947
3,482
255
174
9,623
3,911
2008
RM’000
2007
RM’000
7,975,307
1,115,226
7,960,363
925,111
9,090,533
8,885,474
The list of principal subsidiaries of the Company is disclosed in Note 36 of the consolidated
1 24
(xxi) Investments In Subsidiaries (Cont’d.)
(xxi) Investments In Subsidiaries (Cont’d.)
At 1 February 2006
Additions
RCPS yield
(a) Shares in subsidiaries
Investment
in unquoted
shares
RM’000
Investment
in RCPS
RM’000
(i) Nusantara Seni Karya Sdn Bhd
Total
RM’000
7,530,601
406,812
7,937,413
150
–
–
22,800
150
22,800
At 31 January/1 February 2007
Transfers
Winding up of a subsidiary
RCPS yield
7,530,751
(5,000)
(2,856)
–
429,612
–
–
22,800
7,960,363
(5,000)
(2,856)
22,800
At 31 January 2008
7,522,895
452,412
7,975,307
Advances/
commitments
RM’000
Interest on
advances
RM’000
Total
RM’000
(b) Advances and commitments
(c) Dilution of interest in subsidiaries
At 1 February 2006
1,225,790
71,883
1,297,673
Additions
Repayment
Transfer from receivables
51,824
(517,428)
59,518
246
33,025
–
–
253
84,849
(517,428)
59,518
499
At 31 January/1 February 2007
Additions
Repayment
Reversal of commitments
819,950
349,169
(55,997)
(112,677)
105,161
21,424
–
(11,804)
925,111
370,593
(55,997)
(124,481)
At 31 January 2008
1,000,445
114,781
1,115,226
On 23 August 2007, Nusantara Seni Karya Sdn Bhd (“NSK”) allotted 3,250,000
ordinary shares of RM1 each, of which 1,535,000 shares were issued to ASTRO
Entertainment Sdn Bhd, a wholly-owned subsidiary of the Group, and 1,715,000
shares were issued to PT Tripar Multivision Plus. Following the change, the Group’s
equity interest in NSK was diluted from 100% to 51%.
(ii) ASTRO Aruna Network (BVI) Ltd
On 2 November 2007, the equity interest held by the Group in ASTRO Aruna Networks
(BVI) Ltd was diluted from 100% to 50% as a result of the allotment of 1 ordinary
share of USD1 each to Sound Space International Limited.
1 25
Statutory Declaration
pursuant to Section 169(16) of the Malaysian Companies Act, 1965
I, GRANT SCOTT FERGUSON, the officer primarily responsible for the financial management of ASTRO ALL ASIA NETWORKS plc, do solemnly and sincerely declare that the financial statements set out on pages 57 to 124
are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declaration Act, 1960.
GRANT SCOTT FERGUSON
Subscribed and solemnly declared by the abovenamed, Grant Scott Ferguson at Kuala Lumpur in Malaysia on 23 April 2008, before me.
AHMAD B. LAYA
No. W259
COMMISSIONER FOR OATH
1 26
Additional Disclosures
List of Properties Held
as at 31 January 2008
Location
Approximate Age
of Building
Land Area
(square metre)
Built-up Area
(square metre)
Net Book Value as
at 31 January 2008
(RM’000)
Tenure
Remaining
Lease Period
(Expiry of Lease)
Sub-lease
(land and building)
17 years
(31 July 2025)
Television, Radio
and Data Media
Centre and Office
117,419
32,533
122,912
Current Use
Lot 11301, 17778, 5800 and part of Lots 7966, 8093
and 14935, Mukim Petaling, Daerah Kuala Lumpur
11 years
Lot PT4043 & PT4044, Mukim Kuala Lumpur,
Daerah Kuala Lumpur
-
Sub-lease
(land)
19 years
(31 March 2027)
No formal plans
for usage of land
412,780
Not applicable
Operating lease
Unit No. 165-1-1, 165-1-2, 165-1-3 and 165-2-1,
Block B on Lot 1796, Mukim and District of
Kuala Lumpur
3 years (2)
Freehold
Not applicable
Radio Studio
Not applicable
753.79
1,419
Lot PT12002, Mukim Dengkil
-
Freehold
Not applicable
No formal plans
for usage of land
18,267
Not applicable
10,586
(1)
Notes: Revaluation of properties have not been carried out on any of the above properties to date.
(1)
The date of completion of the building was 25 November 1996.
(2)
The date of purchase of the building was 20 April 2005.
Utilisation of Initial Public
Offering Proceeds
Transactions through
Media Agencies
As at 19 March 2008, all the proceeds raised during the Initial Public Offering (“IPO”) amounting to
RM2,029.9 million have been utilised. The RM19.0 million of the IPO proceeds which was initially proposed
for subscription of equity in an associate, TVB Publishing Holding Limited, has instead been utilised for
working capital requirements.
Some of the ASTRO group’s airtime sales, publication and programme sponsorship arrangements are
concluded with non-related, independent media agencies and are entered into on normal commercial
terms. The role of these media agencies is to secure the best advertising or promotional packages for
their clients among whom is Maxis Communications Berhad group, a related party. The value of such
transactions, which are not related party transactions, is RM27.03 million (FY2007: RM23.53 million).
1 27
Material Contracts Involving the Interests
of Directors and Major Shareholders
Material contracts outside the ordinary course of business entered into by ASTRO and its subsidiaries involving directors’ and major shareholders’ interests which are still subsisting as at 31 January 2008 or which have been
entered into subsequent to the end of the previous financial year are as follows:
Parties
Date of Agreement/
Duration
Mode of
Satisfaction
of Consideration
ASTRO Group
Transacting Party
MMT
Maxis and
AWT
Shareholders’ Agreement pursuant to the
completion of the exercise by MMT of the option
to subscribe for 833,334 ordinary shares of
RM1.00 each (“Option Shares”) representing
25% of the enlarged issued and paid-up share
capital of AWT.
RM833,334.00 being the consideration paid
by MMT for the Option Shares
Shareholders’
Agreement dated
25 August 2004
Cash
Please refer
to Notes below.
MMT
AWT
Shareholders’ Loan Agreement pursuant to the
terms of the Shareholders’ Agreement above.
MMT granted AWT a loan amounting
to RM24,166,666.00 at interest rate of MBB’s
BLR plus 1% for a term of 5 years to enable AWT
to repay a portion of existing Maxis loan
of RM97,499,998 granted to AWT.
Shareholders’ Loan
Agreement dated
24 November
2005
Cash
Please refer
to Notes below.
Subject Matter
Consideration Value
Notes as at 30 May 2008:
1. MMT is a wholly-owned subsidiary of ASTRO. UTSB, PSIL, Excorp, PanOcean and TAK, who are major shareholders of MMT through ASTRO,
are also major shareholders of Maxis. In addition, TAK is a director of PanOcean, Excorp and UTSB.
2. Dato’ Badri, who is the Chairman and Director of ASTRO, is also a major shareholder of Maxis. In addition, Dato’ Badri is a director of MMT and
several other subsidiaries of ASTRO. He is also deemed to have an equity interest in ASTRO.
3. RM, who is the Executive Deputy Chairman and Director of ASTRO, is also a director of UTSB and Maxis. In April 2008, he re-assumed the
additional responsibilities of Group Chief Executive Officer of ASTRO. In addition, RM is a director of several subsidiaries of ASTRO and a
shareholder of ASTRO. He does not have any equity interest in MMT, AWT and Maxis.
4. RR, who is a director of MMT and several other subsidiaries of ASTRO, is also a director of AWT. In addition, RR is a shareholder of ASTRO.
She does not have any equity interest in MMT, AWT or Maxis.
5. GF, who is a director of MMT and several other subsidiaries of ASTRO, is also the alternate director of RR in AWT. He does not have any equity
interest in ASTRO, MMT, AWT or Maxis.
Glossary:
AWT BLR
Dato’ Badri Excorp
GF
Maxis MBB
MMT
PanOcean PSIL
RM
RR
TAK
UTSB
Relationship
Advanced Wireless Technologies Sdn Bhd
Base Lending Rate
Dato’ Haji Badri Bin Haji Masri
Excorp Holdings N.V.
Grant Scott Ferguson
Maxis Communications Berhad
Malayan Banking Berhad
MBNS Multimedia Technologies Sdn Bhd
PanOcean Management Limited
Pacific States Investment Limited
Rohana Binti Rozhan
Ananda Krishnan Tatparanandam
Usaha Tegas Sdn Bhd
1 28
Recurrent Related Party Transactions
At the General Meetings held on 18 July 2006 and 26 July 2007 respectively, the Company obtained its shareholders’ mandate to allow the Group to enter into recurrent related party transactions (“RRPTs”) of a revenue
or trading nature.
In accordance with the Listing Requirements of Bursa Securities, the details of RRPTs conducted during the financial year ended 31 January 2008 pursuant to shareholders’ mandate where the aggregate value of such RRPTs
are equal to or have exceeded RM1 million or 1% of the relevant percentage ratio for such transactions, whichever is the higher, are as follows:No.
Company in the
ASTRO Group
involved
Transacting Party
Nature of Transaction
(A)
UT Group
1.
MBNS
UTSBM
Provision of personnel
support in the operation
and management of AAAN
Group’s business by UTSBM
2.
MBNS
UTSBM
Provision of consultancy
services to MBNS
3.
MBNS
SRGAP
4.
Maestra and MRC
5.
6.
Interested Related
Party
Major Shareholders
UTSB, PSIL, Excorp,
PanOcean and TAK
Nature of Relationship
2007 Mandate
Incurred from 1 February
2007 to 25 July 2007
(RM)
Incurred from 26 July
2007 to 31 January 2008
(RM)
Aggregate value of
transactions during the
financial year
(RM)
34,839
37,161
72,000
4,233,872
4,516,128
8,750,000
Provision of call centre
services and ad-hoc services
to MBNS
14,097,635
74,263
14,171,898
UTSBM
Provision of consultancy and
support services to Maestra
and MRC
2,946,810
3,353,190
6,300,000
AAAN and/or its
subsidiaries
UTP
Provision of project and
construction management
services to AAAN and/or its
subsidiaries
N/A
62,843
62,843
MBNS
Bonuskad
Participation in the BonusLink
loyalty programme by MBNS
333,259
344,690
677,949
Aggregate value for transactions with UT Group:
Director
RM
Please refer to Note 1
2006 Mandate
30,034,690
1 29
No.
Company in the
ASTRO Group
involved
Transacting Party
(B)
Maxis Group
7.
AAAN and/or its
subsidiaries
Maxis Broadband
8.
MBNS and/or its
affiliates
Maxis Mobile and/or Provision of Bulk Short
its affiliates
Messaging Services (“SMS”)
Services to MBNS and/or its
affiliates
9.
MBNS and/or its
affiliates
10.
Provision of premium
telephone services to AAAN
and/or its subsidiaries
Interested Related
Party
Major Shareholders
UTSB, PSIL, Excorp,
PanOcean and TAK
2007 Mandate
2007 to 25 July 2007
(RM)
2007 to 31 January 2008
(RM)
Aggregate value of
financial year
(RM)
1,088,931
1,987,722
3,076,653
N/A
20,729
20,729
Maxis Mobile and/or Provision of Premium
its affiliates
SMS/Multimedia Messaging
Services (“MMS”) Services
(Content) by MBNS and/or its
affiliates
14,917
149,709
164,626
MBNS and/or its
affiliates
Maxis Mobile and/or Provision of video streaming
its affiliates
services by MBNS and/or its
affiliates
2,044,107
3,048,787
5,092,894
11.
MBNS and/or its
affiliates
Maxis Broadband
and/or its affiliates
Provision of private leased
circuit to MBNS and/or its
affiliates
1,782,299
2,057,297
3,839,596
12.
MBNS and/or its
affiliates
Maxis Mobile
Provision of premium SMS/
MMS services to MBNS
2,978,921
2,990,713
5,969,634
13.
MIT
Maxis Broadband
Provision for use of STK-WAP
platform by MIT
1,433,545
1,302,820
2,736,365
14.
MIT
Maxis Mobile and/or Provision of electronic
its affiliates
information and transaction
services utilising STK-WAP
technology by MIT
574,688
131,407
706,095
Directors
Dato’ Badri and RM
2006 Mandate
130
No.
Company in the
ASTRO Group
involved
Transacting Party
15.
MIT
Maxis Mobile
Provision of electronic bill
presentment and payment
services by MIT
16.
AMP
Maxis Mobile
Provision of SMS, Wireless
Application Protocol (“WAP”),
MMS and other services to
AMP
17.
MBNS
MMSB
Usage of Maxis’ Menara
Sunway Contact Centre as
AAAN Group’s backup call
centre
18.
MTM
Maxis Mobile
and/or its affiliates
19.
MTM
Maxis Mobile
Interested Related
Party
Major Shareholders
UTSB, PSIL, Excorp,
PanOcean and TAK
2006 Mandate
2007 Mandate
2007 to 25 July 2007
(RM)
2007 to 31 January 2008
(RM)
289,275
311,259
600,534
40,716
77,348
118,064
4,500
N/A
4,500
Provision of talent by MTM for
promotional activities
N/A
35,324
35,324
Provision of content by MTM
N/A
77,982
77,982
Directors
Dato’ Badri and RM
Aggregate value of transactions with Maxis Group:
(C)
Tanjong Group
20.
AAAN and/or its
subsidiaries
PMP and/or its
affiliates
Aggregate value of
financial year
(RM)
Usage of PMP’s management
meeting rooms and resource
centres at Menara Maxis
as part of AAAN Group’s
business continuity plans
21.
MBNS
PMP
Sale of airtime and
sponsorship on Astro’s
channels by MBNS
22.
MIT
PMP
Provision of maintenance
and support services (Telelink
Gateway System) by MIT
22,442,996
Major Shareholders
UTSB, PSIL, Excorp,
PanOcean, and TAK
Director
RM
N/A
3,600
3,600
1,601,470
831,530
2,433,000
75,746
55,742
131,488
131
No.
Company in the
ASTRO Group
involved
Transacting Party
Interested Related
Party
23.
MIT
PMP
Provision of maintenance
and support services (Telelink
Mobile System) by MIT
Major Shareholders
UTSB, PSIL, Excorp,
PanOcean and TAK
24.
MIT
TGV
Provision of ticketing system
for TGV’s ticket reservation
services by MIT
Director
RM
25.
Tayangan Unggul
TGV
Rental of cinema hall by
Tayangan Unggul
26.
Tayangan Unggul
TGV
27.
ASTRO Shaw and/or
its affiliates
TGV
2006 Mandate
2007 Mandate
2007 to 25 July 2007
(RM)
2007 to 31 January 2008
(RM)
Aggregate value of
financial year
(RM)
37,312
30,497
67,809
11,613
12,387
24,000
2,670
N/A
2,670
Distribution of feature films to
TGV cinemas located at Suria
Kuala Lumpur City Centre by
Tayangan Unggul
101,661
N/A
101,661
Distribution of films by ASTRO
Shaw and/or its affiliates
N/A
406,308
406,308
Aggregate value of transactions with Tanjong Group:
(D)
MSS
28.
Goal TV
MSS
Provision of video contribution
and transmission services for
Goal TV channels to Goal TV
29.
AAAN and/or its
subsidiaries
MSS and/or its
affiliates
Lease of MEASAT-3 satellite
transponders to AAAN and/or
its subsidiaries
30.
MBNS
MSS
Lease of MEASAT-1 satellite
transponders to MBNS by
MSS
3,170,536
Major Shareholder
TAK
Director
RM
805,020
33,911
838,931
N/A
21,185,258
21,185,258
120,150
N/A
120,150
1 32
No.
31.
Company in the
ASTRO Group
involved
MBNS and/or its
affiliates
Transacting Party
MSS
Lease of MEASAT-1
and MEASAT -3 satellite
transponders to MBNS and/or
its affiliates
Interested Related
Party
Major Shareholder
TAK
2006 Mandate
2007 Mandate
2007 to 25 July 2007
(RM)
2007 to 31 January 2008
(RM)
N/A
150,562
Aggregate value of
financial year
(RM)
150,562
Director
RM
Aggregate value of transactions with MSS:
22,294,901
TOTAL AGGREGATE VALUE OF TRANSACTIONS WITH UT GROUP, MAXIS GROUP, TANJONG GROUP AND MSS CONDUCTED PURSUANT TO SHAREHOLDERS’ MANDATE:
77,943,123
(E)
KNB Group
32.
MBNS and/or its
affiliates
Celcom
Provision of video streaming
services by MBNS and/or its
affiliates
33.
MBNS and/or its
affiliates
Celcom
Provision of premium SMS
services by MBNS
34.
AMP
Celcom and/or its
affiliates
Provision of premium SMS
services by AMP
35.
AMP
Celcom
36.
RLSB
37.
38.
Major Shareholder
KNB
12,857
N/A
12,857
1,837,049
1,236,470
3,073,519
20,421
24,443
44,864
Provision of tower/cabin
space and maintenance
services to AMP
360,000
690,012
1,050,012
Celcom
Provision of space,
infrastructure and
maintenance services to
RLSB
250,001
250,002
500,003
RLSB
Celcom
Rental of leased line facility
by RLSB
16,766
14,370
31,136
MBNS and/or its
affiliates
Telekom
Provision of private leased
circuit to MBNS
870,154
2,014,490
2,884,644
Director
Dato’ Badri
133
No.
Company in the
ASTRO Group
involved
Transacting Party
Interested Related
Party
39.
AMP
Telekom
Provision of radio
transmission facilities and
associated services to AMP
40.
RLSB
Telekom
Provision of space,
infrastructure and
maintenance services to
RLSB
41.
MBNS and/or its
affiliates
Telekom
Provision of fixed line
interactive services to MBNS
42.
MBNS
Telekom
Provision of intersite
communication services to
MBNS
43.
MBNS
VADS
Provision of maintenance and
support services for MBNS
Interaction Centre System to
MBNS
44.
MBNS
TSS
Provision of bill payment
collection services to MBNS
45.
MTM
KNB Group
Provision of talent by MTM for
promotional activities
46.
MEASAT
Publications and/or
its affiliates
Datapos
Provision of mailing services
to MEASAT Publications and/
or its affiliates
TOTAL AGGREGATE VALUE OF TRANSACTIONS WITH KNB GROUP:
Major Shareholder
KNB
Director
Dato’ Badri
2006 Mandate
2007 Mandate
2007 to 25 July 2007
(RM)
2007 to 31 January 2008
(RM)
Aggregate value of
financial year
(RM)
3,457,772
3,457,770
6,915,542
774,093
774,090
1,548,183
N/A
1,780,051
1,780,051
310,149
N/A
310,149
249,086
280,194
529,280
174,819
268,346
443,165
N/A
157,500
157,500
422,339
774,590
1,196,929
20,477,834
134
NOTES AS AT 30 MAY 2008:
•
(1) UTSBM, UTP, SRGAP and Bonuskad
•
UTSBM, UTP and SRGAP are wholly-owned subsidiaries of UTSB.
Bonuskad is 25% owned by UTSB. MBNS, Maestra and MRC are
wholly-owned subsidiaries of ASTRO.
•
UTSB, PSIL, Excorp, PanOcean and TAK who are major shareholders
Excorp and UTSB.
•
•
•
including MBNS, is also a director of UTSB and PMP. In addition, RM
UTSBM, UTP, SRGAP or Bonuskad.
is the Executive Deputy Chairman of ASTRO and in April 2008, he
re-assumed the additional responsibilities of Group Chief Executive
also major shareholders of Maxis. In addition, TAK is a director of
Director and a shareholder of Tanjong plc. RM does not have any
Officer. RM is also a shareholder of ASTRO. RM does not have any
equity interest in MBNS, Goal TV, MGB or MSS.
(6) Celcom
•
and MBNS are wholly-owned subsidiaries of ASTRO.
•
•
Chairman of ASTRO. In addition, Dato’ Badri is a director of MBNS
subsidiary. MIT, ASTRO Shaw and Tayangan Unggul are wholly-owned
director of MBNS and several subsidiaries of ASTRO. In addition,
subsidiaries of ASTRO.
•
Dato’ Badri does not have any equity interest in AMP, RLSB, MBNS,
TGV is a joint venture company in which Tanjong plc has an equity
Dato Badri, who is the Chairman and Director of ASTRO, is also a
a major shareholder of Maxis.
Dato’ Badri who is a nominee of KNB on the Board of ASTRO, is the
and several subsidiaries of ASTRO as well as a shareholder of ASTRO.
interest of 50% via Tanjong Entertainment Sdn Bhd, its wholly-owned
•
Major Shareholder, KNB is also a major shareholder of Telekom and
hence Celcom.
(4) TGV
•
Celcom is a wholly-owned subsidiary of Telekom via Telekom
Enterprise Sdn Bhd, a wholly-owned subsidiary of Telekom. AMP, RLSB
equity interest in MBNS, MIT or PMP.
PanOcean, Excorp and UTSB.
Dato’ Badri who is deemed to have an equity interest in ASTRO, is also
Officer. RM is also a shareholder of ASTRO, as well as the Executive
subsidiaries of ASTRO.
•
RM, who is a Director of ASTRO and several of its subsidiaries
RM does not have any equity interest in MBNS, Maestra, MRC, UTSB,
Maxis Broadband, Maxis Mobile and MMSB are wholly-owned
Major Shareholders, UTSB, PSIL, Excorp, PanOcean and TAK are also
PanOcean, Excorp and UTSB.
Major Shareholders, UTSB, PSIL, Excorp, PanOcean and TAK are
of MSS.
•
PMP is a wholly-owned subsidiary of Tanjong plc. MBNS and MIT are
he re-assumed the additional responsibilities of Group Chief Executive
•
Major Shareholder, TAK is also a major shareholder of MGB and hence
including MBNS, is also a director of MGB and MSS. In addition, RM
major shareholders of Tanjong plc. In addition, TAK is a director of
subsidiaries of Maxis. MBNS, MIT, AMP and MTM are wholly-owned
•
•
RM does not have any equity interest in MBNS, MIT, AMP, MTM,
(2) Maxis Broadband, Maxis Mobile and MMSB
•
subsidiary of ASTRO respectively.
(3) PMP
•
MSS is a wholly-owned subsidiary of MEASAT Global Berhad (“MGB”).
RM is the Executive Deputy Chairman of ASTRO and in April 2008,
Officer. RM is also a shareholder of ASTRO.
•
MBNS and Goal TV is a wholly-owned subsidiary and 50% owned
Maxis Mobile, Maxis Broadband or MMSB.
including MBNS, is also a director of UTSBM and UTSB. In addition,
(5) MSS
Officer. RM is also a shareholder of ASTRO and Maxis.
•
of ASTRO (“Major Shareholders”), are also major shareholders of
UTSBM, UTP and SRGAP. In addition, TAK is a director of PanOcean,
RM, who is a Director of ASTRO and several of its subsidiaries including
MBNS and AMP, is also a director of UTSB and Maxis. In addition, RM
Telekom, Telekom Enterprise Sdn Bhd and Celcom.
(7) Telekom
•
Telekom is 40.11% owned by KNB. MBNS, AMP and RLSB are
Director, RM and Major Shareholders, UTSB, PSIL, Excorp, PanOcean
and TAK are regarded as having interests in the transactions between
•
Major Shareholder, KNB is also a major shareholder of Telekom.
TGV and each of MIT, ASTRO Shaw and Tayangan Unggul. Please refer
•
to Note 3 above for details of their respective relationships in ASTRO
and Tanjong plc.
RM does not have any equity interest in MIT, ASTRO Shaw, Tayangan
Dato’ Badri does not have any equity interest in AMP, RLSB, MBNS or
Unggul or TGV.
Telekom.
1 35
(8) TSS and VADS
•
TSS and VADS are 100% and 65.77% owned subsidiaries of Telekom
Glossary
2006 Mandate
respectively, which in turn is 40.11% owned by KNB. MBNS is a
wholly-owned subsidiary of ASTRO.
•
•
Major Shareholder, KNB is also a major shareholder of Telekom and
•
Multimedia Interactive Technologies Sdn Bhd
Meeting held on 18 July 2006
MRC
MEASAT Radio Communications Sdn Bhd
Shareholders’ mandate obtained at the General
MSS
MEASAT Satellite Systems Sdn Bhd
Meeting held on 26 July 2007
MTM
Maestro Talent and Management Sdn Bhd
AMP
Airtime Management and Programming Sdn Bhd
PanOcean
PanOcean Management Limited
ASTRO Shaw
ASTRO Shaw Sdn Bhd
PMP
Pan Malaysian Pools Sdn Bhd
Bonuskad
Bonuskad Loyalty Sdn Bhd
PSIL
Pacific States Investment Limited
Bursa Securities
Bursa Malaysia Securities Berhad
RLSB
Radio Lebuhraya Sdn Bhd
Dato’ Badri does not have any equity interest in MBNS, Telekom, TSS
Celcom
Celcom (Malaysia) Berhad
RM
and VADS.
Datapos
Datapos (M) Sdn Bhd
SRGAP
SRG Asia Pacific Sdn Bhd
Dato’ Badri
TAK
Ananda Krishnan Tatparanandam
Excorp
Excorp Holdings N.V.
Tanjong Group
Body corporates where Tanjong plc has effective
KNB is a Major Shareholder of ASTRO. MTM is a wholly-owned
Goal TV
Goal TV Asia Limited
subsidiary of ASTRO.
KNB
Khazanah Nasional Berhad
Tanjong plc
Tanjong Public Listed Company
KNB Group
Body corporates where KNB has effective equity
Tayangan Unggul
Tayangan Unggul Sdn Bhd
interests of 10% or more
equity interests of 10% or more
Telekom
Telekom Malaysia Berhad
Maestra
Maestra Broadcast Sdn Bhd
TGV
TGV Cinemas Sdn Bhd
Dato’ Badri does not have any equity interest in MTM or KNB Group.
Maxis
TSS
Telekom Sales & Services Sdn Bhd
Maxis Broadband
Maxis Broadband Sdn Bhd
UT Group
Body corporates where UTSB has effective equity
Maxis Group
Body corporates where Maxis has effective
(10) Datapos
•
MEASAT Publications Sdn Bhd
MIT
hence TSS and VADS.
(9) KNB Group
•
2007 Mandate
MEASAT Publications
Shareholders’ mandate obtained at the General
Datapos is a wholly-owned subsidiary of Pos Malaysia Berhad, which
in turn is wholly-owned by Pos Malaysia & Services Holdings Berhad.
MEASAT Publications Sdn Bhd is a wholly-owned subsidiary of
ASTRO.
•
Major Shareholder, KNB is also a major shareholder of Pos Malaysia &
•
Services Holdings Berhad and hence Datapos.
Dato’ Badri does not have any equity interest in MEASAT Publications
Sdn Bhd, Pos Malaysia Berhad, Pos Malaysia & Services Holdings
Berhad or Datapos.
UTP
UT Projects Sdn Bhd
Maxis Mobile Services Sdn Bhd (formerly known
UTSB
Usaha Tegas Sdn Bhd
as Malaysian Mobile Services Sdn Bhd)
UTSBM
UTSB Management Sdn Bhd
MBNS
MEASAT Broadcast Network Systems Sdn Bhd
VADS
VADS Berhad
MMSB
Maxis Mobile Sdn Bhd
Maxis Mobile
136
Share Price Performance
from 1 february 2007 to 30 May 2008
(RM)
(million)
6.0
25
5.5
20
5.0
15
4.5
4.0
10
3.5
5
3.0
2.5
Volume (million)
Share Price (RM)
Financial Calendar
Results for
1Q FY2009
June 2008
2Q FY2009
September 2008
3Q FY2009
December 2008
4Q FY2009
March 2009
AGM
24 July 2008
Proposed payment of final tax exempt dividend for the financial year ended 31 January 2008
August 2008
May ‘08
Apr ‘08
Mar ‘08
Feb ‘08
Jan ‘08
Dec ‘07
Nov ‘07
Oct ‘07
Sep ‘07
Aug ‘07
Jul ‘07
Jun ‘07
May ‘07
Apr ‘07
Feb ‘07
Mar ‘07
0
1 37
Analysis of Shareholdings
as at 30 May 2008
Share Capital
Authorised : £300,000,000
Issued and paid-up : £193,403,556.10 comprising 1,934,035,561 ordinary shares of 10 pence each
Voting Right : One vote per ordinary share
Analysis of Shareholdings as at 30 May 2008
(Based on Record of Depositors)
Distribution of Shareholdings
Size of shareholdings
No. of shareholders
% of shareholders
No. of 10 pence shares
% of issued shares
336
2.32
2,490
0.00
1
to 99
100
to 1,000
8,077
55.78
7,381,542
0.38
1,001
to 10,000
4,927
34.03
18,783,055
0.97
10,001
to 100,000
849
5.86
28,840,629
1.49
100,001
to 96,701,777*
288
1.99
914,096,555
47.27
96,701,778
and above**
3
0.02
964,931,290
49.89
14,480
100.00
1,934,035,561
100.00
12,838
88.66
45,599,017
2.36
34
0.23
116,472,180
6.02
0
0.00
0
0.00
165
1.14
1,415,598,962
73.19
1
0.01
34,000
0.00
1,442
9.96
356,331,402
18.43
0
0.00
0
0.00
14,480
100.00
1,934,035,561
100.00
Total
Notes:
* less than 5% of the issued share capital
** 5% and above of the issued share capital
Category of shareholders
Individuals
Banks/Finance Companies
Investment Trusts/Foundations/Charities
Industrial and Commercial Companies
Government Agencies/Institutions
Nominees
Others
Total
138
as at 30 May 2008
List of 30 Largest Shareholders as at 30 May 2008
No.
Name
No. of 10 pence shares held
% of issued shares
1.
413,829,018
21.40
2.
All Asia Media Equities Ltd
389,085,872
20.12
3.
East Asia Broadcast Network Systems N.V.
162,016,400
8.38
4.
Employees Provident Fund Board
91,367,200
4.72
5.
Usaha Tegas Entertainment Systems Sdn Bhd
90,534,101
4.68
6.
Pacific Broadcast Systems N.V.
54,005,486
2.79
7.
Nusantara Delima Sdn Bhd
54,005,466
2.79
8.
Berkat Nusantara Sdn Bhd
54,005,466
2.79
9.
Nusantara Cempaka Sdn Bhd
54,005,466
2.79
10.
Home View Limited N.V.
54,005,466
2.79
11.
Southpac Investments Limited N.V.
54,005,466
2.79
12.
Amanah Raya Nominees (Tempatan) Sdn Bhd
- Skim Amanah Saham Bumiputera
30,088,800
1.56
13.
Citigroup Nominees (Asing) Sdn Bhd
- Goldman Sachs International
27,460,700
1.42
14.
Malaysia Nominees (Tempatan) Sendirian Berhad
- Great Eastern Life Assurance (Malaysia) Berhad (PAR1)
23,933,200
1.24
15.
HSBC Nominees (Asing) Sdn Bhd
- HSBC BK PLC for Prudential Assurance Company Ltd
15,096,200
0.78
16.
Permodalan Nasional Berhad
9,139,800
0.47
17.
Amanah Raya Nominees (Tempatan) Sdn Bhd
- Kumpulan Wang Bersama
9,000,000
0.47
1 39
as at 30 May 2008
No.
Name
18.
- TNTC for Kuroto Fund LP
8,416,900
0.44
19.
- Exempt An for JPMorgan Chase Bank, National Association (BTPS)
7,870,410
0.41
20.
HSBC Nominees (Tempatan) Sdn Bhd
- Nomura Asset Mgmt Malaysia for Employees Provident Fund
7,500,000
0.39
21.
Valuecap Sdn Bhd
7,348,000
0.38
22.
- Exempt An for American International Assurance Company Limited
7,206,100
0.37
23.
Cartaban Nominees (Tempatan) Sdn Bhd
- MIDF Amanah Asset Nominees (Tempatan) Sdn Bhd for Employees Provident Fund Board (JF404)
7,043,000
0.36
24.
- GSI for Perry Partners Inter Inc
6,416,029
0.33
25.
- Exempt An for JPMorgan Chase Bank, National Association (U.S.A.)
6,396,200
0.33
26.
Mujur Nusantara Sdn Bhd
6,172,051
0.32
27.
Citigroup Nominees (Tempatan) Sdn Bhd
- Exempt An for Prudential Fund Management Berhad
6,060,400
0.31
28.
Sanjung Nusantara Sdn Bhd
5,657,721
0.29
29.
Ujud Cergas Sdn Bhd
5,143,373
0.27
30.
- Exempt An for The Hong Kong and Shanghai Banking Corporation Limited (HBFS-I CLT ACCT)
5,000,000
0.26
1,671,814,291
86.44
TOTAL
% of issued shares
140
as at 30 May 2008
Substantial Shareholders
(Based on notifications received by the Company)
Direct
Name
Notes
Indirect
%
%
413,829,018
21.40
-
-
(a)
389,085,872
20.12
-
-
Usaha Tegas Entertainment Systems Sdn Bhd (“UTES”)
(b)
90,534,101
4.68
389,085,872
20.12
4.
Usaha Tegas Sdn Bhd (“UTSB“)
(c)
-
-
479,619,973
24.80
5.
Pacific States Investment Limited (“PSIL”)
(d)
-
-
479,619,973
24.80
6.
Excorp Holdings N.V. (“Excorp”)
(e)
-
-
479,619,973
24.80
7.
PanOcean Management Limited (“PanOcean”)
(e)
-
-
479,619,973
24.80
8.
Ananda Krishnan Tatparanandam (“TAK”)
(f)
-
-
819,082,908
42.35
9.
Harapan Terus Sdn Bhd (“HTSB“)
(g)
-
-
177,446,535
9.17
10. Dato’ Haji Badri Bin Haji Masri (“DBM“)
(h)&(i)
-
-
177,946,535
9.20
11. Hj Affendi Bin Tun Hj Mohd Fuad Stephens
(h)
-
-
177,446,535
9.17
12. Mohamad Shahrin Bin Merican
(h)
166,600
0.01
177,446,535
9.17
13. Tun Haji Mohammed Hanif Bin Omar
(h)
-
-
177,446,535
9.17
14. East Asia Broadcast Network Systems N.V. (“EABNS”)
(a)
162,016,400
8.38
-
-
15. East Asia Broadcast Systems Holdings N.V. (“EABSH”)
(j)
-
-
162,016,400
8.38
16. Tucson N.V. (“Tucson”)
(k)
-
-
162,016,400
8.38
17. Employees Provident Fund Board (“EPF”)
(l)
110,648,800
5.72
-
-
1.
2.
All Asia Media Equities Ltd (“AAME”)
3.
141
as at 30 May 2008
Notes :
(iii) The interests of Ujud Cergas Sdn Bhd (“UCSB”), Metro Ujud Sdn Bhd (“MUSB”), Mujur Sanjung Sdn Bhd (“MSSB”),
(a) Held through a nominee.
(b) Deemed to have an interest in all of the ordinary shares of 10 pence each in ASTRO (“Shares”) in which AAME has an
interest, by virtue of UTES being entitled to control the exercise of 100% of the votes attached to the voting shares in
AAME. In addition to the Shares held via AAME, UTES holds directly 90,534,101 Shares representing 4.68% of the
share capital in ASTRO.
(c) Deemed to have an interest in all of the Shares in which UTES has an interest, by virtue of UTSB being entitled to control
the exercise of 100% of the votes attached to the voting shares in UTES. Please see Note (b) above.
Prisma Gergasi Sdn Bhd (“PGSB”) and Ujud Murni Sdn Bhd (“UMSB”) which collectively hold 15,430,117 Shares
representing 0.80% of the share capital in ASTRO. TAK is deemed to have an interest in the Shares held by UCSB,
MUSB, MSSB, PGSB and UMSB by virtue of his 100% control of the shares in their respective ultimate holding
companies viz All Asia Radio Broadcast N.V., Global Radio Systems N.V., Maestra International Broadcast N.V.,
Maestra Global Radio N.V. and Global Broadcast Systems N.V. respectively.
(g) Deemed to have an interest in all of the Shares in which Berkat Nusantara Sdn Bhd, Nusantara Cempaka Sdn Bhd,
Nusantara Delima Sdn Bhd, Mujur Nusantara Sdn Bhd, Gerak Nusantara Sdn Bhd and Sanjung Nusantara Sdn Bhd
(collectively, “HTSB Subsidiaries”) have an interest, by virtue of HTSB being entitled to control the exercise of 100%
(d) Deemed to have an interest in all of the Shares in which UTSB has an interest, by virtue of PSIL’s direct controlling
of the votes attached to the voting shares in the immediate holding companies in each of the HTSB Subsidiaries viz
interest of 9,999,998 ordinary shares of RM1.00 each representing 99.999% of the share capital in UTSB. Please see
Nusantara Barat Sdn Bhd, Nusantara Kembang Sdn Bhd, Prisma Mutiara Sdn Bhd, Nada Nusantara Sdn Bhd, Cermat
Note (c) above.
Delima Sdn Bhd and Cermat Deras Sdn Bhd respectively. The HTSB Subsidiaries collectively hold 177,446,535 Shares
(e) The entire issued and paid-up share capital of PSIL comprising 30,000 shares of £1.00 each are held by Excorp which
is deemed to have an interest in all of the Shares in which PSIL has an interest. Please see Note (d) above. The entire
representing 9.17% of the share capital in ASTRO under discretionary trusts for Bumiputera objects. As such, HTSB
does not have any economic interest over the Shares held by these companies.
issued and paid-up share capital of 6,000 shares of USD1.00 each in Excorp are in turn held by PanOcean. PanOcean
(h) Deemed to have an interest in all of the Shares in which HTSB has an interest (please see Note (g) above), by virtue of
is the trustee of a discretionary trust, the beneficiaries of which are members of the family of TAK and foundations
his interest over 250,000 shares representing 25% of the issued and paid-up share capital in HTSB. However, he does
including those for charitable purposes. Although PanOcean is deemed to have an interest in the Shares through Excorp,
not have any economic interest over these Shares as such interest is held subject to the terms of the discretionary trusts
it does not have any economic or beneficial interest over these Shares as such interest is held subject to the terms of
for Bumiputera objects referred to in Note (g) above.
the discretionary trust.
(f) Deemed to have an interest over 819,082,908 Shares representing 42.35% of the share capital in ASTRO by virtue
of the following:
(i) PanOcean’s deemed interest in the Shares (please see Note (e) above). Although TAK is deemed to have an interest
in the Shares, he does not have any economic or beneficial interest therein as such interest is held subject to the
terms of the discretionary trust referred to in Note (e) above.
(ii) The interests of EABNS, Pacific Broadcast Systems N.V. (“PBS”), Home View Limited N.V. (“HVL”) and Southpac
Investments Limited N.V. (“SIL”) which collectively hold 324,032,818 Shares representing 16.75% of the share
capital in ASTRO. TAK is deemed to have an interest in the Shares held by EABNS, PBS, HVL and SIL by virtue of his
100% control of the shares in their respective ultimate holding companies viz Tucson, Orient Systems Limited N.V.,
Home View Holdings N.V. and Southpac Holdings N.V.; and
(i) Deemed to have an interest over 500,000 Shares representing 0.03% of the share capital in ASTRO held by Ratna
Pelangi Sdn Bhd (“RPSB”), by virtue of his 99% direct equity interest in RPSB.
(j) Deemed to have an interest in all of the Shares in which EABNS has an interest, by virtue of EABSH being entitled to
control the exercise of 100% of the votes attached to the voting shares in EABNS.
(k) Deemed to have an interest in all of the Shares in which EABSH has an interest, by virtue of Tucson’s direct controlling
interest of 100% of the share capital in EABSH. Please see Note (j) above. The shares of Tucson are bearer shares.
(l) Held by itself and partly through nominee companies managed by portfolio managers.
142
as at 30 May 2008
Directors’ Interests in Shares and Options
(Based on notifications received by the Company)
The interests of the Directors in the shares of the Company are as follows:
Name
No. of shares of 10 pence each
Direct
% of issued shares
Direct
Indirect
(a)
-
9.20
1,000,000
(b)
-
0.05
-
250,000
(b)
-
0.01
-
-
-
-
-
Chin Kwai Yoong
-
-
-
-
Dato’ Mohamed Khadar Bin Merican
-
Indirect
177,946,535
(a) Refer to notes (h) and (i) under section on Substantial Shareholders.
(b) Held through a nominee.
The interests of a Director in options over unissued shares of the Company are as follows:
Name
Price per option share
No. of option shares
RM3.65
1,000,000 (a)
RM3.65
1,350,000 (b)
RM4.40
498,800 (c)
RM4.806
752,000 (d)
RM4.17
720,000 (e)
RM4.13
1,477,800 (f)
RM3.06
1,458,400 (g)
7,257,000
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Granted on 22 October 2003 pursuant to the 2003 Employee Share Option Scheme (“ESOS”).
Granted on 22 October 2003 pursuant to the 2003 Management Share Incentive Scheme. 1,350,000 out of 1,500,000 share options were vested on 30 April 2007, and are exercisable from 22 October 2007.
Granted on 19 May 2004 pursuant to the 2003 ESOS.
Granted on 11 March 2005 pursuant to the 2003 ESOS.
Granted on 8 May 2006 pursuant to the 2003 ESOS.
Granted on 29 June 2007 pursuant to the 2003 ESOS.
Granted on 23 April 2008 pursuant to the 2003 ESOS.
None of the Directors has any interest in the shares or options of the subsidiary companies of the Company.
143
Corporate Information
BOARD OF DIRECTORS
COMPANY SECRETARIES
SHARE REGISTRAR
N Lakshmi A/P V Nadarajah
Sharon Liew Wei Yee
Symphony Share Registrars Sdn Bhd
Level 26, Menara Multi-Purpose
Capital Square
No. 8, Jalan Munshi Abdullah
50100 Kuala Lumpur
Malaysia
Telephone No. : 603 2721 2222
Fax No.
: 603 2721 2530
Chairman and Non-Executive Director
Executive Deputy Chairman/Group Chief Executive Officer
Dato’ Mohamed Khadar Bin Merican
Non-Executive/Independent Director
Chin Kwai Yoong
REGISTERED OFFICE
IN MALAYSIA
Bukit Jalil, 57000 Kuala Lumpur
Malaysia
Telephone No. : 603 9543 6688
Fax No.
: 603 9543 6877
Website
: www.astroplc.com
Email
: [email protected]
REGISTERED OFFICE IN U.K.
10 Upper Bank Street, London, E14 5JJ
United Kingdom
Telephone No. : 44 (0) 20 7006 1000
Fax No.
: 44 (0) 20 7006 3467
AUDITORS
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
United Kingdom
PricewaterhouseCoopers
Level 10, 1 Sentral, Jalan Travers
Kuala Lumpur Sentral
P. O. Box 10192
50706 Kuala Lumpur
STOCK EXCHANGE LISTING
Main Board of Bursa Securities
(Listed since 29 October 2003)
(Stock code: 5076)
(ISIN: GB0066981209)
144
(Incorporated in England and Wales – Company No. 4841085)
(Registered as a foreign company in Malaysia – Company No. 994178-M)
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the Fifth Annual General Meeting of ASTRO ALL ASIA NETWORKS plc (“Company”) will be
held on Thursday, 24 July 2008 at 2.30 pm at the Grand Ballroom, Level 1, Mandarin Oriental, Kuala Lumpur City Centre,
50088 Kuala Lumpur, Malaysia for the following purposes:
AGENDA
NOTICE OF DIVIDEND PAYMENT
As Ordinary Business
NOTICE IS HEREBY GIVEN THAT subject to the approval of the shareholders at the Fifth Annual General
Meeting to be held on Thursday, 24 July 2008, a final tax-exempt dividend of 2 sen per ordinary share of
10 pence each for the financial year ended 31 January 2008 will be paid on 29 August 2008 to Depositors
whose names appear in the Record of Depositors at the close of business on 13 August 2008.
(1) To receive and consider the Annual Report and the Audited Financial Statements of
the Company and of the Group for the financial year ended 31 January 2008 and
the Reports of the Directors and Auditors thereon.
Resolution 1
A Depositor will qualify for entitlement to the dividend only in respect of:-
(2) To declare a final tax-exempt dividend of 2 sen per ordinary share of 10 pence each
for the financial year ended 31 January 2008.
Resolution 2
(3) To re-appoint Augustus Ralph Marshall, a Director who retires by rotation in
accordance with Articles 83 and 84 of the Company’s Articles of Association.
(a) shares transferred to the Depositor’s securities account before 4.00 p.m. on 13 August 2008 in respect
of transfers; and
Resolution 3
(b) shares bought on Bursa Malaysia Securities Berhad (“Bursa Securities”) on a cum entitlement basis
according to the Rules of Bursa Securities.
(4) To re-appoint Dato’ Mohamed Khadar Bin Merican, a Director who retires by rotation
in accordance with Articles 83 and 84 of the Company’s Articles of Association.
Resolution 4
(5) To re-appoint PricewaterhouseCoopers LLP as Auditors of the Company to hold
office from the conclusion of this meeting until the conclusion of the next annual
general meeting and to authorise the Directors to fix their remuneration.
(6)
To transact any other business of which due notice shall have been given in
accordance with the United Kingdom Companies Act 1985 and United Kingdom
Companies Act 2006.
BY ORDER OF THE BOARD
Resolution 5
Lakshmi Nadarajah (LS9057)
Sharon Liew Wei Yee (LS7908)
Company Secretaries
27 June 2008
Lebuhraya Puchong – Sungai Besi
Bukit Jalil
57000 Kuala Lumpur
Malaysia
145
Notice of Annual General Meeting
NOTES:
(excluding any part of a day that is not a working day) before the time
Secretary. The guidance includes a sample form of representation letter if
1. Proxy
appointed for the meeting or adjourned meeting or in the case of a poll
the Chairman is being appointed as described in (i) above.
(a) A member of the Company entitled to attend and vote may appoint more
taken subsequent to the date of the meeting or adjourned meeting not
than one (1) proxy of his/her own choice to attend, speak and vote at a
less than twenty-four (24) hours (excluding any part of a day that is not
general meeting of the Company instead of him/her provided that each
a working day) before the time appointed for the taking of the poll.
proxy is appointed to exercise the rights attached to different shares.
from attending and voting in person at the meeting should the member
Securities Industry (Central Depositories) Act, 1991 may appoint more
subsequently wish to do so.
than one (1) proxy in respect of each securities account it holds and
which is credited with ordinary shares of the Company. A proxy need not
be a member of the Company.
(b) If a member who has appointed more than one proxy fails to specify
the number of shares in respect of which each such proxy is entitled to
exercise the related votes (the “Proxy Share Number”) for any of them,
then each proxy shall be deemed to exercise the votes in respect of
4. Annual Report and Audited Financial Statements (Resolution 1)
For each financial year, the Directors must present the Directors’ Report,
the Audited Financial Statements and the Independent Auditors’ Report to
meeting, the Company will request Bursa Malaysia Depository Sdn
the Company’s shareholders at a general meeting. Although there is no
Bhd (in accordance with Article 35(D) of the Company’s Articles of
requirement under the UK Companies Act to table a resolution on these for
Association), to issue the Record of Depositors (“ROD”) as at 17 July
shareholders’ approval, the Directors are of the view that a resolution on
2008 for determining the depositors who shall be deemed to be the
these should be submitted for shareholders to vote on, in the interest of
registered holders of the shares of the Company eligible to be present
good governance and in line with international best practice.
ROD as at 17 July 2008 shall be entitled to attend the meeting.
if the member specifies the Proxy Share Number for one proxy only,
Securities is attached hereto as Annexure A.
(g) For the purposes of determining a member entitled to attend the
and vote at the meeting. Only a depositor whose name appears on the
100% of the member’s shares divided by the number of proxies, and
A statement accompanying this notice which includes additional information
as required under Appendix 8A of the Listing Requirements of Bursa
(f) The lodging of a completed Form of Proxy will not preclude a member
A member who is an authorised nominee as defined in the Malaysian
then the other proxies shall be deemed to represent the remainder of
3. Additional Information
5. Retirement and Re-appointment of Directors (Resolutions 3 and 4)
In accordance with Articles 83 and 84 of the Company’s Articles of
2. Corporate Representative
Association (“Articles”), at least one-third of the Directors who are subject to
During a poll, (i) if a corporate shareholder has appointed the Chairman of the
retirement by rotation shall retire from office. Augustus Ralph Marshall (‘RM”)
meeting as its corporate representative with instructions to vote on a poll in
and Dato’ Mohamed Khadar Bin Merican (“MKM”), being the Directors who
accordance with the directions of all of the other corporate representatives
have been longest in office since their last appointment shall retire pursuant
for that shareholder at the meeting, then those corporate representatives
to Articles 83 and 84 of the Articles and being eligible, offer themselves
will give voting directions to the Chairman and the Chairman will vote as
for re-appointment pursuant to Article 85 of the Articles. Based on the
corporate representative in accordance with those directions; and (ii) if more
annual evaluation of directors’ performance, the Board of Directors (“Board”)
than one corporate representative for the same corporate shareholder attends
believes that RM and MKM continue to be effective and demonstrate
(d) If the proxy form is returned without an indication as to how the proxy
the meeting but the corporate shareholder has not appointed the Chairman
commitment to their roles. The Board is therefore pleased to recommend the
must vote on a particular matter, the proxy will exercise his discretion as
of the meeting as its corporate representative, a designated corporate
re-appointment of RM and MKM as Directors of the Company.
to whether, and if so how, he votes.
representative will be nominated, from those corporate representatives who
the member’s shares on an equal basis (or, in the case of an authorised
nominee, the number of shares held in the relevant Securities Account).
(c) An instrument appointing a proxy shall be in writing under the hand of
the appointor or his attorney duly authorised in writing or, if the appointor
is a corporation, either under its seal or by an officer, attorney or other
person authorised in that respect.
(e) To be valid, the original Form of Proxy, duly completed, must be deposited
with the Company’s share registrar, Symphony Share Registrars Sdn Bhd
at Level 26, Menara Multi-Purpose, Capital Square, No. 8 Jalan Munshi
Abdullah, 50100 Kuala Lumpur, Malaysia, together with the power of
attorney or other authority (if any) under which it is signed or a copy of
such authority certified notarially, not less than forty-eight (48) hours
attend, who will then vote on a poll and the other corporate representatives
will give voting directions to that designated corporate representative.
Corporate shareholders are referred to the guidance issued by the Institute
of Chartered Secretaries and Administrators on “Proxies and Corporate
Representatives” (www.icsa.org.uk) for further details of this procedure.
A copy of the guidance note may also be obtained from the Company
6. Re-appointment of Auditors (Resolution 5)
At every general meeting at which financial statements are presented to the
Company’s shareholders, the Company is required to appoint independent
auditors to serve until the next general meeting. The existing Auditors,
PricewaterhouseCoopers LLP, have indicated that they are willing to continue
as the Company’s Auditors for the ensuing year.
146
Statement Accompanying Notice of Fifth Annual General Meeting
pursuant to Paragraph 8.28(2) of the Listing Requirements of Bursa Securities
Annexure A
Further details of individuals who are standing for re-appointment as directors:
(i) Augustus Ralph Marshall
Age
56
Nationality
Malaysian
Qualification
Associate of the Institute of Chartered Accountants in England and Wales and member of the Malaysian Institute of Certified Public Accountants
Position in the Company
Joined the Board in July 2003 and was appointed its Deputy Chairman and Group Chief Executive Officer in August and September 2003 respectively. In February
2007, he assumed the position of Executive Deputy Chairman and in April 2008, he re-assumed the additional responsibilities of Group Chief Executive Officer.
Working Experience and Occupation
He is an executive director of Usaha Tegas Sdn Bhd (“UT”) and serves on the boards of several other companies in which UT has significant interests viz. Tanjong Public
Limited Company, Overseas Union Enterprise Limited, London International Exhibition Centre plc, Arnhold Holdings Limited and Maxis Communications Berhad. He has
over 30 years experience in financial and general management.
Other directorship of public companies
incorporated pursuant to the Malaysian
Companies Act, 1965
KLCC Property Holdings Berhad
MEASAT Global Berhad
Details of any interest in the securities of the
Company and its subsidiaries
Please refer to the details of director’s interests on page 142 of the Annual Report
Family relationship with any director and/or
major shareholder of the Company
None
Conflict of interest that he has with the
Company
There is no business arrangement with the Company in which he has a personal interest
List of convictions for offences within the past
10 years other than traffic offences, if any
(only for penalties made public)
None
1 47
Statement Accompanying Notice of Fifth Annual General Meeting
pursuant to Paragraph 8.28(2) of the Listing Requirements of Bursa Securities
(ii) Dato’ Mohamed Khadar Bin Merican
Age
52
Nationality
Malaysian
Qualification
Member of the Institute of Chartered Accountants in England and Wales and the Malaysian Institute of Accountants
Position in the Company
Joined the Board as Independent Non-Executive Director in August 2003
Working Experience and Occupation
He manages his own financial consultancy and is a director of AirAsia Berhad and RHB Capital Berhad as well as of several companies within the RHB group.
He had served as an auditor and a consultant in an international accounting firm before joining a financial services group in 1986. Dato’ Mohamed Khadar held various
senior management positions in Tradewinds Corporation Bhd including those of president and chief operating officer. He has over 20 years’ experience in financial
and general management.
Other directorship of public companies
incorporated pursuant to the Malaysian
Companies Act, 1965
AirAsia Berhad
RHB Capital Berhad
RHB Investment Bank Berhad
Rashid Hussain Berhad
Details of any interest in the securities of the
Company and its subsidiaries
Please refer to the details of director’s interests on page 142 of the Annual Report
Family relationship with any director and/or
major shareholder of the Company
None
Conflict of interest that he has with the
Company
There is no conflict of interest
List of convictions for offences within the past
10 years other than traffic offences, if any
(only for penalties made public)
None
Form of Proxy
I/We,
NRIC/Passport/Company No.
(FULL NAME OF MEMBER APPOINTING PROXY IN BLOCK LETTERS)
of
(FULL ADDRESS IN BLOCK LETTERS)
hereby appoint
NRIC/Passport No.
(FULL NAME OF PROXY IN BLOCK LETTERS) (“Proxy 1”)
of
and/or
NRIC/Passport No.
(FULL NAME OF PROXY IN BLOCK LETTERS) (“Proxy 2”)
of
or failing him/her, THE CHAIRMAN OF THE MEETING as my/our proxy/proxies to vote for me/us on my/our behalf at the Fifth Annual General Meeting of the Company to be held on Thursday, 24 July 2008 at 2.30 pm at the Grand
Ballroom, Level 1, Mandarin Oriental, Kuala Lumpur City Centre, 50088 Kuala Lumpur, Malaysia and at any adjournment thereof.
Subject to any voting instructions given below, the proxy will exercise his/her discretion as to how he/she votes and whether or not he/she abstains from voting on any resolution, by whomsoever proposed (including, without
limitation, any resolution to amend a resolution or to adjourn the meeting).
Please indicate how you wish to cast your votes by inserting a “√” in the space provided.
Resolution
For
1.
To receive and consider the Annual Report and the Audited Financial Statements of the Company and of the Group for the financial year ended 31 January 2008 and the
Reports of the Directors and Auditors thereon.
2.
To declare a final tax-exempt dividend of 2 sen per ordinary share of 10 pence each for the financial year ended 31 January 2008.
3.
To re-appoint Augustus Ralph Marshall, a Director who retires by rotation in accordance with Articles 83 and 84 of the Company’s Articles of Association.
4.
To re-appoint Dato’ Mohamed Khadar Bin Merican, a Director who retires by rotation in accordance with Articles 83 and 84 of the Company’s Articles of Association.
5.
To re-appoint PricewaterhouseCoopers LLP as Auditors of the Company to hold office from the conclusion of this meeting until the conclusion of the next annual general
meeting and to authorise the Directors to fix their remuneration.
Dated this
day of
2008.
The proportions of my/our holding to be represented by my/our proxies are as follows:No. of Shares
Total shares held
Proxy 1
Signature of Member(s)
(If the appointor is an attorney or a corporation please see Note 1(c) on the following page)
Against
Proxy 2
Please use separate proxy form for appointment of more than two proxies.
Percentage
100%
An instrument appointing a proxy shall be in writing under the hand of the
appointor or his attorney duly authorised in writing or, if the appointor is a
corporation, either under its seal or by an officer, attorney or other person
authorised in that respect.
(c)
Fold here
Fold here
If a member who has appointed more than one proxy fails to specify
the number of shares in respect of which each such proxy is entitled to
exercise the related votes (the “Proxy Share Number”) for any of them,
then each proxy shall be deemed to exercise the votes in respect of
100% of the member’s shares divided by the number of proxies, and
if the member specifies the Proxy Share Number for one proxy only,
then the other proxies shall be deemed to represent the remainder of
the member’s shares on an equal basis (or, in the case of an authorised
nominee, the number of shares held in the relevant Securities Account).
(b)
Notes:
(1) Proxy
(a) A member of the Company entitled to attend and vote may appoint more
than one (1) proxy of his/her own choice to attend, speak and vote at a
general meeting of the Company instead of him/her provided that each
proxy is appointed to exercise the rights attached to different shares.
A member who is an authorised nominee as defined in the Malaysian
Securities Industry (Central Depositories) Act, 1991 may appoint more
than one (1) proxy in respect of each securities account it holds and
which is credited with ordinary shares of the Company. A proxy need not
be a member of the Company.
To be valid, the original Form of Proxy, duly completed, must be deposited
with the Company’s share registrar, Symphony Share Registrars Sdn Bhd
at Level 26, Menara Multi-Purpose, Capital Square, No. 8 Jalan Munshi
Abdullah, 50100 Kuala Lumpur, Malaysia, together with the power of
attorney or other authority (if any) under which it is signed or a copy
of such authority certified notarially, not less than forty-eight (48) hours
(excluding any part of a day that is not a working day) before the time
appointed for the meeting or adjourned meeting or in the case of a poll
taken subsequent to the date of the meeting or adjourned meeting not
less than twenty-four (24) hours (excluding any part of a day that is not a
working day) before the time appointed for the taking of the poll.
The lodging of a completed Form of Proxy will not preclude a member
from attending and voting in person at the meeting should the member
subsequently wish to do so.
For the purposes of determining a member entitled to attend the meeting,
the Company will request Bursa Malaysia Depository Sdn Bhd (in
accordance with Article 35(D) of the Company’s Articles of Association),
to issue the Record of Depositors (“ROD”) as at 17 July 2008 for
determining the depositors who shall be deemed to be the registered
holders of the shares of the Company eligible to be present and vote at
the meeting. Only a depositor whose name appears on the ROD as at 17
July 2008 shall be entitled to attend the meeting.
(e)
(f)
(g)
Malaysia
50100 Kuala Lumpur
No.8, Jalan Munshi Abdullah
Level 26, Menara Multi-Purpose, Capital Square
Symphony Share Registrars Sdn Bhd
If the proxy form is returned without an indication as to how the proxy
must vote on a particular matter, the proxy will exercise his discretion as
to whether, and if so how, he votes.
(d)
During a poll, (i) if a corporate shareholder has appointed the Chairman
of the meeting as its corporate representative with instructions to vote
on a poll in accordance with the directions of all of the other corporate
representatives for that shareholder at the meeting, then those corporate
representatives will give voting directions to the Chairman and the
Chairman will vote as corporate representative in accordance with those
directions; and (ii) if more than one corporate representative for the same
corporate shareholder attends the meeting but the corporate shareholder
has not appointed the Chairman of the meeting as its corporate
representative, a designated corporate representative will be nominated,
from those corporate representatives who attend, who will then vote on
a poll and the other corporate representatives will give voting directions
to that designated corporate representative. Corporate shareholders are
referred to the guidance issued by the Institute of Chartered Secretaries
and Administrators on “Proxies and Corporate Representatives” (www.
icsa.org.uk) for further details of this procedure. A copy of the guidance
note may also be obtained from the Company Secretary. The guidance
includes a sample form of representation letter if the Chairman is being
appointed as described in (i) above.
STAMP
Corporate Representative
(2)
Regional Offices
MALAYSIA
CHINA
INDIA
Bukit Jalil
57000 Kuala Lumpur
Malaysia
Telephone No. : +603 9543 6688
Fax No.
: +603 9543 6877
Website
: www.astroplc.com
E-mail
: [email protected]
Celestial Pictures Ltd
Shaw Administration Building
Lot 220, Clear Water Bay Road
Kowloon
Hong Kong SAR
Telephone No. : +852 2927 1111
Fax No.
: +852 2243 1100
MBNS India
104/5 Parmanand Estate
Maharani Bagh
110065 New Delhi
India
Telephone No. : +91 (11) 5162 6531
Fax No.
: +91 (11) 2692 1792
Dato’ Lat and Ida Nerina on the set of Lat and Ida, an Astro TV programme from the 1990s.
Celestial Pictures Ltd
6/F, Unit 2, Tayuan Diplomatic Office Building
14 Liangmahe Nan Lu,
100600 Beijing
China
Telephone No. : +8610 8532 2340
Fax No.
: +8610 8532 2348
(994178-M)
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
Website : www.astroplc.com
E-mail : [email protected]

ASTRO ALL ASIA NETWORKS plc

Transcription

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