Business Overview

6. INFORMATION ON OUR GROUP 6. INFORMATION ON OUR GROUP 6.1 Privatisation of AAAN and key developments since privatisation By way of background, substantially all of the businesses currently held by our Group were part of the businesses of the AAAN group of companies (“AAAN Group”). AAAN was previously listed on 29 October 2003 on the then Main Board of the Kuala Lumpur Stock Exchange (now known as the Main Market). In 2010, AHSB undertook a conditional take-over offer to acquire all the voting shares in AAAN (“AAAN Shares”), at a cash offer price of RM4.30 for each AAAN Share (“GO”), which represented an illustrative market capitalisation of approximately RM8.3 billion, based on the total Issued and paid-up share capital of AAAN of 1,934.3 million AAAN Shares as at 17 March 2010, being the date of service of the notice of the GO. The offer price of RM4.30 per AAAN Share for the GO represented a price-to-book multiple of 9.35 times (based on the audited consolidated NA per AAAN Share for the financial year ended 31 January 2010 of RM0.46), a price-to-earnings multiple of 35.70 times (based on the audited basic earnings per share of the AAAN Group of RMO.12 for the financial year ended 31 January 2010) and an enterprise value over EBITDA mUltiple of 11.22 times (based on the EBITDA of the AAAN Group of RM831.0 million for the financial year ended 31 January 2010 and net debt of the AAAN Group of RM1,002.0 million as at 31 January 2010). Shortly after the closing of the GO, AAAN was delisted from the Main Market on 14 June 2010 (“Privatisation”). Following the completion of the GO, AHSB undertook a compulsory acquisition under the Companies Act 2006 of the UK of all the remaining voting shares in AAAN not held by AHSB at that time, which was completed on 28 July 2010. Thereafter, AAAN became a wholly-owned sUbsidiary of AHSB. AHSB undertook the Privatisation as it envisaged at that time that AAAN’s Malaysian and international businesses would require substantial capital outlay to further grow their products and offerings in the next few years. • For the AAAN’s Malaysian business, this would entail capitai investment for the enhancement and expansion of multi-phase innovative products and services including for HD services, digital video recording and IPTV connectivity and related content cost.
• For the AAAN’s International business, this would entail utilisation of additional capital to accelerate investment in existing businesses in India (pay-TV, radio, digital and linear TV), China/Hong Kong (movie library and content creation, aggregation and distribution), and also new initiatives such as IPTV and digital media in Australia and content creation for IPTV and other devices and platforms in the Middle East and North Africa.

At the point of the Privatisation, AHSB believed that the AAAN Group had the potential to accelerate its growth. However, this would significantly change its financial and risk profile as: (i) the substantial capital outlay due to the foregoing initiatives may potentially strain AAAN Group’s cash flow position; and
(ii) the increase in borrowings to fund potentially less certain businesses may result in higher borrowing costs and earnings volatility in the short to medium term, and adversely affect the dividend payment capacity of AAAN.

AHSB also believed that at that stage of the AAAN Group’s deveiopment, private ownership would accord greater fiexibillty to: (i) realise its vision for the AAAN Group to be a leading regional integrated digital media group; and
(ii) enable the AAAN Group to adopt an appropriate capital structure to escalate its growth aspirations.

 

6. INFORMATION ON OUR GROUP (cont’d) Following the completion of the Privatisation, in March 2011 and April 2011, AHSB implemented a reorganisation of AAAN’s Malaysian and international businesses, which resulted in AAAN’s Malaysian businesses being transferred to our Company. The Reorganisation includes, among others, certain transactions involving our Group and our related entities as set out below: (i) the acquisition by our Company from AAAN of the entire issued and paid up share capital of MBNS, Astra Shaw and MBNS Multimedia Technologies for an aggregate consideration of approximately RM6.8 billion which was determined based on the cost of investment of AAAN in such companies. The consideration was settled via an arrangement between AAAN, AHSB, ANM and our Company, whereby 98,236 ordinary shares of RM1.00 each and 6,700 RPS of RMO.10 each were issued by our Company to ANM as settlement for the said acquisition. SUbsequently 1,500 RPS were redeemed while the remaining 5,200 RPS were redeemed as part of the pre­IPO restructuring. Please refer to Section 6.2 of this Prospectus for further details on the RPS and the pre-IPO restructuring;
(ii) the acquisition by MBNS from AAAN of the entire issued and paid up share capital of Astra Radio, MEASAT Radio Communications, Maestra Broadcast, Radio Lebuhraya and Perfect Excellence Waves for an aggregate cash consideration of approximately RM850.0 million which was determined based on the fair value of these entities; and

(iii) the disposal by Astra Radio of the entire registered capnal of Adrep China Advertising Services Limited (“Adrep China”) to All Asia Radio Technologies Media and Sales Sdn Bhd (“AARTMS”) for a cash consideration comprising approximately RM32.9 million (which is the RM equivalent of the then current registered capital of Adrep China of approximately RMB68.3 million) and USD5.0 million (which is the USD equivalent of Adrep China’s applied increase in registered capital of RMB33.0 million computed based on the then applicable prevailing exchange rate). Subsequently, Astra Radio entered into an amendment agreement with AARTMS to amend the sale and purchase agreement for the disposal of Adrep China wherein, among others, the said sum of USD5.0 million was amended to reflect an amount in USD that is equivalent to RMB33.0 million to cater for foreign currency fluctuations. Since the Privatisation, we have invested over RM1.0 billion in capital expenditure for, among others, broadcast equipment inclusive of set-top boxes, infrastructure and system upgrades. We have also introduced new products and services, such as PVR, IPTV and OTT as well as increased our HD and SD content offerings from 5 HD and 119 SD channels respectively at the point of Privatisation to 22 HD and 134 SD channels as at 31 July 2012. To extend the reach of our HD services, we have since the Privatisation intensified efforts to roll-out Astra B.yond set-top boxes. As at 31 July 2012, 1.6 million of our subscribers have been equipped with Astro B.yond set-top boxes. In 2011, we transformed from a pure DTH satellite TV operator into a multi-platform pay-TV operator when we launched Astra B.yond IPTV, a triple­play service that includes our pay-TV services delivered through fibre optic broadband with high-speed broadband and telephony services, in partnership with TIME. In addition, in 2012, we launched: (i) NJOI, Malaysia’s firstsubscription free DTH satellite TV service that allows our NJOI customers to watch selected TV and radio channels through our DTH satellite TV platform with no monthly subscription fees. This was followed by the launch of a pre­paid service, to allow NJOI customers to purchase additional premium content on a pre-paid basis. We aim to expand our addressable market via the rollout of our NJOI service; and 6. INFORMATION ON OUR GROUP (cont’d) (ii) Astro On-The-Go, our OTT online and mobile application service, to enable our customers to view our content via smartphones, tablets, PCs. We believe that our Astro-On-The-Go service is well suited to capitalise on the tendency of Malaysian consumers to view content on their preferred viewing platform. Please refer to Section 7.2 of this Prospectus for our other significant milestones since the Privatisation. Our pro forma revenue for the financial years ended 31 January 2010,2011 and 2012 was RM3,242.3 million, RM3,664.1 million and RM3,888.8 million, respectively. For each of those financial years, 90% of our pro forma revenue was contributed by our TV segment, whose main source of revenue was subscription revenue. Based on the audited consolidated financial statements of AAAN for the financial year ended 31 January 2010, the EBITDA of the AAAN Group was RM831.0 million (“AAAN FY10 EBITDA”). The pro forma EBITDA of our Group for the same financial year was RM986.2 million (“AMH FY10 EBITDA”). The difference between the AAAN FY10 EBITDA and the AMH FY10 EBITDA was attributable to the aggregate loss before the interest, taxation, the depreciation and amortisation of AAAN and its international group of companies of approximately RM155.2 million. The pro forma EBITDA of our Group increased by RM383.6 million or 38.9% from RM986.2 million for the financial year ended 31 January 2010 to RM1,36S.8 million for the financial year ended 31 January 2011, and further increased by RM44.S million or 3.3% from RM1,36S.8 million for the financial year ended 31 January 2011 to RM1,414.7 million for the financial year ended 31 January 2012. The increase in the pro forma EBITDA from the financial year ended 31 January 2010 to the financial year ended 31 January 2012 was mainly attributable to higher subscription revenue from the TV segment (from RM2,788.7 million for the financial year ended 31 January 2010 to RM3,273.1 million for the financial year ended 31 January 2012) which more than offset the higher operating expenses incurred during such financial years. The increase in subscription revenue was primarily attributable to the increase in Residential ARPU from RM82 to RM85 and RM8S per month for the financial years ended 31 January 2010,2011 and 2012 respectively, reflecting among others a higher take-up of HD services, as well as a net addition of 136,000 pay-TV residential subscribers for the financial year ended 31 January 2012. The increase in pro forma EBITDA was also attributable to a decrease in set-top box and smart card costs by RM227.5 million and RM27.S million during the financial years ended 31 January 2011 and 2012, respectively, primarily due to a reduction in the deployment of SD set top boxes following the introduction of Astro B.yond set top boxes. The cost of the Astro B.yond set-top boxes are capitalised and depreciated over their economic usefui life of three years, following a change in our business model when our HD services were introduced during the financial year ended 31 January 2010, whilst the costs of the SD set-top boxes are recognised as expense when incurred. With the growth of the Malaysian business following the Reorganisation as a result of the introduction of various new products and services, capital expenditure of more than RM1.0 billion incurred since the Privatlsation and the separation of the international businesses of AAAN (which would still require substantial capital investment in its development stage), our ultimate shareholder i.e. AHSB intends to re-introduce the Malaysian business i.e. Astro Malaysia Group to the Malaysian equity market via the IPO and the Listing and provide an opportunity for the investing community to participate in the future performance of our Group. Investors shOUld note that the business profile of our Group is different from that of the AAAN Group, in view of our focus on the Malaysian business which has, subsequent to the Privatisation, commenced its expansion plans including the introduction of new products and services. We have also set a dividend policy which is set out in Section 12.7 of this Prospectus. 65 ICompany No. 932533-V I
6. INFORMATION ON OUR GROUP (cont’d) Our current Group structure following the Reorganisation is set forth below:
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I 6. INFORMATION ON OUR GROUP (cont’d) Details of the changes to our issued and paid-up share capital since the date of our incorporation up to the date of the Prospectus are as follows: Cumulative issued Par  and paid-up share  Date of allotment  No. of shares  value  Consideration  capital  RM  RM
Ordinary shares: 14 February 2011 2 1.00 Cash 2 30 September 2011 98,236 1.00 Cash 98,238 19 September 2012 982,380 0.10 Nil (Subdivision ofthe par 98,238 value from RM1.00 to RMO.10) 19 September 2012 4,722,017,620 0.10 Cash(‘) 472,300,000 RPS: 5 April 2011 2,000 0.10 Cash 200 30 September 2011 4,700 0.10 Cash 670 30 April 2012 (1,500) 0.10 Cash(2) 520 19 September 2012 (5,200) 0.10 Cash(‘) 0 Notes: (1) By way of a set-<Jff against the tota’ redemption amount payable to ANM for the RPS Redemption. (2) By way ofB set~ against amounts recaivable from ANM. (3) By way of a set-<Jffagainstthetotalsubsetfptionamountpayabla byANMforthe Share’ssuanco. (The rest of this page have been intentionally left blank) 6. INFORMATION ON OUR GROUP (cont’d) 6.3 Subsidiaries, associated companies and jointly controlled entities As at the LPD, our subsidiaries, associated companies and jointly controlled entities are as follows: Date and country of Issued and paid­Name incorporation up share capItal Direct wholly-owned subsidiaries of Astra Malaysia Astro Group  02.11.95  RM250,OOO  Services  Malaysia  MBNS  12.05.92  RM260,217,142  Malaysia  (ordinary shares)  RM10,OOO  (Class A RPS)  Astro  04.09.96  RM5,OOO,OOO  Productions  Malaysia
Astro Brunei 16.10.97 RM300,OOO Malaysia Astro Digital 30.06.00 RM2 Malaysia Astro 22.01.97 RM350,OOO Entertainment Malaysia Astro Shaw 04.11.96 RM2,500,OOO Malaysia MBNS 05.03.98 RM2 Multimedia Malaysia Technologies Subsidiaries of MBNS Astro Radio 25.09.96 RM350,OOO Malaysia MEASAT 12.05.92 RM50,OOO,ooO Digicast Malaysia (issued) RM10,000,002 (paid-Up)
Maestra 18.04.95 RM1,OOO,OOO Broadcast Malaysia MEASAT Radio 13.05.92 RM1,OOO,OOO Communications Malaysia 69 Our Group’s effective interest % 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Principal activities Provision of management services Provision of TV services Production and distribution of TV programmes, and letting of property and related services Investment holding Investment hOlding Organising trade related projects, marketing, soliciting and sale of airtime such as advertisements and sponsorship for broadcast on TVs and other media Film production, acquisition, commissioning and distribution Research and development of multimedia related technologies Management of commercial radio broadcasting stations, content and programming provider and provision of muUimedia and advertising agency services Inactive Operation of commercial radio broadcasting stations Operation of commercial radio broadcasting stations 6. INFORMATION ON OUR GROUP (cont’d) 6. INFORMATION ON OUR GROUP (cont’d) Name Radio Lebuhraya  Date and country of incorporation 22.02.94 Malaysia  Issued and paid. up share capital RM3,000,000  Our Group’s effective interest % 100.00  Principal activities Establishing, maintaining a station operating and radio broadcasting  Perfect Excellence Waves  13.06.02 Malaysia  RM100,000  100.00  Operation of a licensed commercial radio station  Yayasan Astro Kasih  06.07.12 Malaysia  Not applicable  100.0  Advancing community  and  benefitting  the  Subsidiary of Astra Radio  DVR PlayeLCom  02.11.95 Malaysia  RM2  100.00  Provision Internet  of  radio  services  via  Associated company of Astra Brunei  Kristal-Astro  18.01.00 Brunei  BND500,000  48.90  Provision of DTH digital satellite broadcast pay-TV services  Subsidiaries of Astro Digital  Astro Digital 5  12.07.99 Malaysia  RM500,000  100.00  Development multimedia applications  and and  licensing of interactive  Astro Publications  13.03.96 Malaysia  RM350,000  100.00  Magazine distribution  publication  and  Subsidiaries of Astro Entertainment  AstroAwani Network  20.12.00 Malaysia  RM17,122,502  80.00  Creation, production, acquisition and syndication of news and information-based content and end·to-end channel management for distribution across multiple platforms  Maestro Talent and Management  24.07.03 Malaysia  RM2  100.00  Inactive  Astro Arena  24.06.00 Malaysia  RM2  100.00  Creation and production of Malaysian sports programming and acquisition and packaging of related sports content  Jointly controlled entity of Astra Entertainment  Endemol Malaysia  16.08.08 Malaysia  RM100,OOO  49.99  Creating, acqUlnng, developing, producing and selling audio visuai entertainment content and  programmes
Our Date and Group’s country of Issued and paid­effective Name incorporation up share capital interest Principal activities % Subsidiaries of Astro Shaw Tayangan 06.11.95 RM100,000 100.00 Film production, acquisition, Unggul Malaysia commissioning and distribution Nusantara 06.03.00 RM250,000 100.00 Production, acquisition, Films Malaysia commissioning and distribution of films Karya Anggun 18.12.06 RM250,000 100.00 Film production, acquisition, Malaysia commissioning and distribution Jointly controlled entity of Astro Shaw Nusantara 19.08.03 RM7,000,000 50.00 Film distribution Edaran Filem Malaysia Associated company of MBNS Multimedia Technologies Advanced 21.06.00 RM3,333,336 25.00 Provider of wireless multimedia Wireless Malaysia related services Technologies SUbsidiary of Advanced Wireless Technologies UMTS 17.07.00 RM2,500,002 25.00 Holder of 3G spectrum assignment (Malaysia) Malaysia (ordinary shares) RM97,499,998 (Non-cumulative convertible redeemable preference shares) The details of our subsidiaries, associated companies and jointly controlled entities as at the LPD are set out below:
6.3.1 Direct wholly-owned subsidiaries of our Company 6.3.1.1 Astro Group Services (Company No. 365649.H) (i) History and business Astro Group Services was incorporated in Maiaysia under the Act on 2 November 1995 as a private limited company under the name of Marvelista Sdn Bhd. On 30 April 1999, it changed its name to Hotspotz.Com Sdn Bhd. On B March 2011, it assumed its present name. Astro Group Services commenced its business on 1 April 2011. The principal activity of Astro Group Services is the provision of management services. 6. INFORMATION ON OUR GROUP (cont’d) (ii) Share capital As at the LPD, the authorised share capital of Astro Group Services is RM500,000 comprising 500,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM250,000 comprising 250,000 ordinary shares of RM1.00 each. Details of the changes to the issued and paid-up share capital of Astro Group Services for the past three years preceding the LPD are as follows: Cumulative issued and Date of No. of Par paid-up allotment shares value Consideration share capital RM RM Ordinary shares: 10.03.11 249,998 RM1.00 Cash 250,000 (iii) Shareholder As at the LPD, Astro Group Services is our wholly-owned subsidiary. (Iv) SUbsidiary and associated company As at the LPD, Astro Group Services does not have any SUbsidiary or associated company. 6.3.1.2 MBNS (Company No. 24DD64-A) (i) History and business MBNS was incorporated in Malaysia under the Act on 12 May 1992 as a private limited company under its present name. MBNS commenced its business on 25 September 1996. The principal activity of MBNS is provision of TV services. (ii) . Share capital As at the LPD, the authorised share capital of MBNS is RM302,860, 100 comprising 300,000,000 ordinary shares of RM1.00 each, 285,000,000 RCPS of RMO.01 each, 10,000 Class A RPS of RM1.00 each and 1,000 Class B RPS of RMO.10 each. The issued and paid-up share capital of MBNS as at the LPD is RM260,227,142 comprising 260,217,142 ordinary shares of RM1.00 each and 10,000 Class A RPS of RM1.00 each. 6. INFORMATION ON OUR GROUP (cont’d) Details of the changes to the issued and paid-up share capital of MBNS for the past three years preceding the LPD are as follows: Cumulative Date of issued allotment! No. of Par and paid-up redemption shares value Consideration share capital RM RM Ordinary shares: 22.03.11 5,000,000 1.00 Exchange for the 260,217,142 entire issued and paid-up share capital of Astro Radio, MEASAT Radio Communications, Maestra Broadcast and Radio Lebuhraya RCPS:  23.02.09  (285,000,000)  0.01  Redemption  of  RCPS  Class B RPS:  24.03.11  75  0.10  Bonus issue  7.5  10.06.11  (75)  0.10  Redemption  of  Class B RPS
There have been no changes to the Class A RPS for the past three years preceding the LPD. (Iii) Shareholder As at the LPD, MBNS is our wholly-owned SUbsidiary. (iv) Subsidiaries and associated company The direct subsidiaries of MBNS as at the LPD are Astro Radio, MEASAT Digicast, Maestra Broadcast, MEASAT Radio Communications, Radio Lebuhraya and Perfect Excellence Waves and Yayasan Astro Kasih, details of which are set out in Section 6.3.2 of this Prospectus. The indirect subsidiary of MBNS as at the LPD is DVR Player.Com, details of which are set out in Section 6.3.3.1 of this Prospectus. MBNS does not have any associated company as at the LPD.

 

6.3.1.3 Astro Productions (Company No. 400778-V) (i) History and business Astro Productions was incorporated in Malaysia under the Act on 4 September 1996 as a private limited company under its present name. Astro Productions commenced its business on 1 September 1997. 73 6. INFORMATION ON OUR GROUP (cont’d) The principal activities of Astro Productions are production and distribution of TV programmes, and lelling of property and related services. (ii) Share capital As at the LPD, the authorised share capital of Astro Productions is RM30,000,000 comprising 30,000,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Astro Productions for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Astro Productions is our wholly-owned sUbsidiary. (iv) Subsidiary and associated company As at the LPD, Astro Productions does not have any subsidiary or associated company.
6.3.1.4 Astro Brunei (Company No. 450230·A) (i) History and business Astro Brunei was incorporated in Malaysia under the Act on 16 October 1997 as a private limited company under its present name. Astro Brunei commenced its business on 12 August 2002. The principal activity of Astro Brunei is investment holding. (ii) Share capital As at the LPD, the authorised share capital of Astro Brunei is RM500,000 comprising 500,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM300,000 comprising 300,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Astro Brunei for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Astro Brunei is our wholly-owned subsidiary. (Iv) Subsidiary and associated company Astro Brunei does not have any subsidiary as at the LPD. The associated company of Astro Brunei as at the LPD is Kristal­Astro, details of which are set out in Section 6.3.4 of this Prospectus. 6. INFORMATION ON OUR GROUP (cont’d)
6.3.1.5 Astro Digital (Company No. 518676-T) (i) History and business Astra Digital was incorporated in Malaysia under the Act on 30 June 2000 as a private limited company under the name of IMT-2000 (Malaysia) Sdn Bhd. On 15 March 2011, it assumed its present name. Astra Digital commenced its business on 5 April 2011. The principal activity of Astra Digital is investment holding. (ii) Share capital As at the LPD, the authorised share capital of Astro Digital is RM100,000 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM2.00 comprising two ordinary shares of RM1.00 each. . There has been no change to the issued and paid-up share capital of Astro Digital for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Astra Digital is our wholly-owned sUbsidiary. (iv) SUbsidiaries and associated company The subsidiaries of Astra Digital as at the LPD are Astro Digital 5 and Astra Publications, details of which are set out in Section 6.3.5 of this Prospectus. Astro Digital does not have any associated company as at the LPD.
6.3.1.6 Astro Entertainment (Company No. 418101.U) (i) History and business Astro Entertainment was incorporated in Malaysia under the Act on 22 January 1997 as a private limited company under its present name. Astra Entertainment commenced its business on 1 September 2006. The principal activities of Astra Entertainment are organising trade related projects, marketing, soliciting and sale of airtime such as advertisements and sponsorship for broadcast on TV and other media. (ii) Share capital As at the LPD, the authorised share capital of Astro Entertainment is RM500,000 comprising 500,000 ordinary shares of RM1.00 each, and its issued and paid-up share capital is RM350,000 comprising 350,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Astra Entertainment for the past three years preceding the LPD. 6. INFORMATION ON OUR GROUP (cont’d) (Iii) Shareholder As at the LPD, Astra Entertainment is our wholly-owned subsidiary. (iv) Subsidiaries and associated company The subsidiaries of Astra Entertainment as at the LPD are Astra Awani Network, Maestro Talent and Management and Astro Arena, details of which are set out in Section 6.3.6 of this Prospectus. The jointly controlled entity of Astro Entertainment as at the LPD is Endemol Malaysia, details of which are set out in Section 6.3.7 of this Prospectus. Astra Entertainment does not have any associated company.
6.3.1.7 Astra Shaw (Company No. 40BB29-U) (i) History and business Astra Shaw was incorporated in Malaysia under the Act on 4 November 1996 as a private limited company under its present name. Astra Shaw commenced its business on 1 April 1998. The principal activities of Astra Shaw are film production, acquisition, commissioning and distribution. (ii) Share capital As at the LPD, the authorised share capitai of Astra Shaw is RM30,OOO,OOO comprising 30,000,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM2,500,OOO comprising 2,500,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Astra Shaw for the past three years preceding the LPD. (Iii) Shareholder As at the LPD, Astra Shaw is our wholly-owned subsidiary. (iv) Subsidiaries and associated company The subsidiaries of Astro Shaw as at the LPD are Tayangan Unggul, Nusantara Films and Karya Anggun, details of which are set out in Section 6.3.8 of this Prospectus. The jointly controlled entity of Astra Shaw as at the LPD is Nusantara Edaran Filem, details of which are set out in Section 6.3.9 of this Prospectus. Astra Shaw does not have any associated company as at the LPD. 6. INFORMATION ON OUR GROUP (cont’d)
6.3.1.8 MBNS MUltimedia Technologies (Company No. 458630.W) (i) History and business MBNS Multimedia Technologies was incorporated in Malaysia under the Act on 5 March 1998 as a private limited company under its present name. MBNS Multimedia Technologies commenced its business on 25 August 2004 by virtue its investment holding in Advanced Wireless Technologies. The principal activities of MBNS Multimedia Technologies are research and development of multimedia related technologies. (ii) Share capital The authorised share capital of MBNS Multimedia Technologies is RM100,000 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM2.00 comprising two ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of MBNS Multimedia Technologies for the past three years preceding the LPD. (iii) Shareholder As at the LPD, MBNS Multimedia Technologies is our wholly-owned subsidiary. (iv) Subsidiary and associated company MBNS Multimedia Technologies does not have any subsidiary as at the LPD. The direct associated company of MBNS Multimedia Technologies as at the LPD is Advanced Wireless Technologies, details of which are set out in Section 6.3.10 of this Prospectus. The subsidiary of Advanced Wireless Technologies as at the LPD is UMTS (Malaysia), details of which are set out in Section 6.3.11 of this Prospectus. 6.3.2 Subsidiaries of MBNS 6.3.2.1 Astro Radio (Company No. 403472·0) (i) History and business Astro Radio was incorporated in Malaysia under the Act on 25 September 1996 as a private limited company under the name of Airtime Management And Programming Sdn Bhd. On 25 May 2012, it assumed its present name. Astro Radio commenced its business on 1 January 1997. The principal activities of Astro Radio are management of commercial radio broadcasting stations, content and programming provider and provision of multimedia and advertising agency services. 6. INFORMATION ON OUR GROUP (cont’d) (ii) Share capital As at the LPD, the· authorised share capital of Astro Radio is RM510,000 comprising 500,000 ordinary shares of RM1.00 each and 10,000 RPS of RM1.00 each and its issued and paid-up share capital is RM350,000 comprising 350,000 ordinary shares of RM1.00 each. Details of the changes to the issued and paid-up share capital of Astro Radio for the past three years preceding the LPD are as follows: Cumulative issued and Dale of No. of Par paid-up redemption shares value Consideration share capital RM RM RPS: 10.02.11 (10,000) 1.00 Redemption of Nil RPS (iii) Shareholder As at the LPD, Astro Radio is a wholly-owned subsidiary of MBNS. (iv) Subsidiaries and associated company The subsidiary of Astro Radio as at the LPD is DVR Player.Com, details of which are set out in Section 6.3.3 of this Prospectus. Astro Radio does not have any associated company as at the LPD.

 

6.3.2.2 MEASAT Digicast (Company No. 240062-V) (i) History and business
MEASAT Digicast was incorporated in Malaysia under the Act on 12 May 1992 as a private limited company under its present name. MEASAT Digicast is currently inactive.
(ii) Share capital

As at the LPD, the authorised share capital of MEASAT Digicast is RM50,000,000 comprising 50,000,000 ordinary shares of RM1.00 each, of which two ordinary shares were issued and fully paid up and the remaining 49,999,998 ordinary shares were each issued and paid-up to RMO.20 with the baiance RMO.80 uncalled. The total paid­up share capital of MEASAT Digicast is RM10,000,002. The remaining uncalled capital is RM39,999,998. There has been no change to the issued and paid-up share capital of MEASAT Digicast for the past three years preceding the LPD. (iii) Shareholder As at the LPD, MEASAT Digicast is a wholly-owned subsidiary of MBNS. 6. INFORMATION ON OUR GROUP (cont’d) (iv) Subsidiary and associated company As at the LPD, MEASAT Digicast does not have any subsidiary or associated company.
6.3.2.3 Maestra Broadcast (Company No. 340960·P) (i) History and business Maestra Broadcast was incorporated in Malaysia under the Act on 1B April 1995 as a private limited company under its present name. Maestra Broadcast commenced its business in May 1997. The principal activity of Maestra Broadcast is the operation of commercial radio broadcasting stations. (ii) Share capital As at the LPD, the authorised share capital of Maestra Broadcast is RM1,000,OOO comprising 1,000,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM1,OOO,Ooo comprising 1,000,000 ordinary shares of RM1.oo each. There has been no change to the issued and paid-up share capital of Maestra Broadcast for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Maestra Broadcast is a wholly-owned subsidiary of MBNS. (Iv) Subsidiary and associated company As at the LPD, Maestra Broadcast does not have any sUbsidiary or associated company.
6.3.2.4 MEASAT Radio Communications (Company No. 240145-A) (i) History and business MEASAT Radio Communications was incorporated in Malaysia under the Act on 13 May 1992 as a private limited company under its present name. MEASAT Radio Communications commenced its business on 1 September 1996. The principal activity of MEASAT Radio Communications is the operation of commercial radio broadcasting stations. (ii) Share capital As at the LPD, the authorised share capital of MEASAT Radio Communications is RM1,OOO,OOO comprising 1,000,000 ordinary shares of RM1.0o each and its issued and paid-Up share capital is RM1 ,000,000 comprising 1,000,000 ordinary shares of RM1.o0 each. 6. INFORMATION ON OUR GROUP (cont’d) There has been no change to the issued and paid-up share capital of MEASAT Radio Communications for the past three years preceding the LPD. (iii) Shareholder As at the LPD, MEASAT Radio Communications is a wholly-owned subsidiary of MBNS. (iv) SUbsidiary and associated company As at the LPD, MEASAT Radio Communications does not have any subsidiary or associated company.
6.3.2.5 Radio Lebuhraya (Company No. 290272·M) (i) History and business Radio Lebuhraya was incorporated in Malaysia under the Act on 22 February 1994 as a private limited company under its present name. Radio Lebuhraya commenced its business on 1 September 1994. The principal activities of Radio Lebuhraya are establishing, operating and maintaining a radio broadcasting station. (ii) Share capital As at the LPD, the authorised share capital of Radio Lebuhraya is RM5,OOO,OOO comprising 5,000,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM3,000,000 comprising 3,000,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Radio Lebuhraya for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Radio Lebuhraya is a wholly-owned subsidiary of MBNS. (iv) Subsidiary and associated company As at the LPD, Radio Lebuhraya does not have any subsidiary or associated company.
6.3.2.6 Perfect Excellence Waves (Company No. 582842-A) (i) History and business Perfect Excellence Waves was incorporated in Malaysia under the Act on 13 June 2002 as a private limited company under its present name. Perfect Excellence Waves commenced its business on 22 September 2003. The principal activity of Perfect Excellence Waves is the operation of a licensed commercial radio station. 80 6. INFORMATION ON OUR GROUP (cont’d) (ii) Share capital As at the LPD, the authorised share capital of Perfect Excellence Waves is RM100,000 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Perfect Excellence Waves for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Perfect Excellence Waves is a wholly-owned subsidiary of MBNS. (Iv) Subsidiary and associated company As at the LPD, Perfect Excellence Waves does not have any subsidiary or associated company.
6.3.2.7 Yayasan Astro Kasih (Company No. 1008882·A) (i) History and business Yayasan Astro Kasih was incorporated in Malaysia under the Act on 6 July 2012 as a company limited by guarantee under its present name. The principal activity of Yayasan Astro Kasih is advancing and benefitting the community. (ii) Member As at the LPD, the members of Yayasan Astro Kasih are MBNS and Astro Radio. (iii) Subsidiary and associated company As at the LPD, Yayasan Astro Kasih does not have any subsidiary or associated company. 6.3.3 Subsidiary of Astro Radio 6.3.3.1 DVR Player.Com (Company No. 365636-T) (i) History and business DVR Player.Com was incorporated in Malaysia under the Act on 2 November 1995 as a private limited company under the name of Axis Television Sdn Bhd and on 23 December 1998, it changed its name to Digital Visual Radio Sdn Bhd. On 28 January 2000, it assumed its present name. DVR Player.Com commenced ils business during the financial year ended 31 January 2001. The principal activity of DVR Player. Com is the provision of radio services via Internet. 6. INFORMATION ON OUR GROUP (cont’d) (ii) Share capital As at the LPD, the authorised share capital of DVR Player.Com is RM100,000 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM2.00 comprising two ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of DVR Player.Com for the past three years preceding the LPD. (iii) Shareholder As at the LPD, DVR Player.Com is a wholiy-owned subsidiary of Astro Radio. (iv) Subsidiary and associated company As at the LPD, DVR Player.Com does not have any subsidiary or associated company.

 

6.3.4 Associated company of Astro Brunei 6.3.4.1 Kristal-Astro (Company No. AGO/RC/4927) (i) History and business Kristal-Astro was incorporated in Brunei Darussalam under the Companies Act (Cap 39) on 18 January 2000 as a private limited company under its present name. Kristal-Astro commenced its business on 18 January 2000. The principal activities of Kristal-Astro are the provision of DTH digital satellite broadcast pay-TV services. (ii) Share capital As at the LPD. the authorised share capital of Kristal-Astro is BND1,000,000 comprising 1,000,000 ordinary shares of BND1.00 each and its issued and paid-up share capital is BND500,000 comprising 500,000 ordinary shares of BND1.00 each. There has been no change to the issued and paid-up share capital of Kristal-Astro for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Kristal-Astro is a 48.9%-<lwned associated company of Astro Brunei whilst the remaining 51.1 % is owned by Kristal Sdn Bhd. (iv) Subsidiary and associated company As at the LPD, Kristal-Astro does not have any subsidiary or associated company. 82 6. INFORMATION ON OUR GROUP (cont’d) 6.3.5 Subsidiaries of Astro Digital 6.3.5.1 Astro Digita/5 (Company No. 488331-0) (i) History and business Astro Digital 5 was incorporated in Malaysia under the Act on 12 July 1999 as a private limited company under the name of Multimedia Interactive Technologies Sdn Bhd and on 20 November 2008, it changed its name to Digital Five Sdn Bhd. On 25 May 2012, it assumed its present name. Astro Digital 5 commenced its business on 14 December 1999. The principal activities of Astro Digitai 5 are the development and licensing of multimedia and interactive applications. (ii) Share capital As at the LPD, the authorised share capital of Astro Digital 5 is RM500,000 comprising 500,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM500,000 comprising 500,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Astro Digital 5 for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Astro Digital 5 is a wholly-owned subsidiary of Astro Digital. (iv) Subsidiary and associated company As at the LPD, Astro Digital 5 does not have any subsidiary or associated company.
6.3.5.2 Astro Publications (Company No. 379611·V) (i) History and business Astro PUblications was incorporated in Malaysia under the Act on 13 March 1996 as a private limited company under the name of MEASAT Publications Sdn Bhd. On 25 May 2012, it assumed its present name. Astro Publications commenced its business on 1 October 1996. The principal activities of Astro Publications are magazine publication and distribution. (ii) Share capital As at the LPD, the authorised share capital of Astro Publications is RM500,000 comprising 500,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM350,000 comprising 350,000 ordinary shares of RM1.00 each. 83 6. INFORMATION ON OUR GROUP (cont’d) There has been no change to the issued and paid-up share capital of Astro Publications for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Astro Publications is a wholly-owned sUbsidiary of Astro Digital. (iv) SUbsidiary and associated company As at the LPD, Astro Publications does not have any subsidiary or associated company. 6.3.6 Subsidiaries of Astro Entertainment 6.3.6.1 Astro Awani Network (Company No. 535275-0) (I) History and business Astro Awani Network was incorporated in Malaysia under the Act on 20 December 2000 as a private limited company under the name of Mambo Networks Sdn Bhd. On 25 January 2011, it assumed its present name. Astro Awani Network commenced its business on 1 June 2011. The principal activities of Astro Awani Network are the creation. production, acquisition and syndication of news and information­based content and end-to-end channel management for distribution across mUltiple platforms. (ii) Share capital As at the LPO, the authorised share capital of Astro Awani Network is RM25,000,000 comprising 25,000,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM17,122,502 comprising 17,122,502 ordinary shares of RM1.00 each. Details of the changes to the issued and paid-up share capital of Astro Awani Network for the past three years preceding the LPD are as follows: Cumulative issued and Date of No. of Par paid-up allotment shares value Consideration share capilal RM RM Ordinary shares: 11.05.11 17,122,500 1.00 Cash 17,122,502 (iii) Shareholder As at the LPO, Astro Awani Network is a 80%-owned subsidiary of Astro Entertainment whilst NDTV Networks Limited and NDTV One Holdings Limited each own 10% of Astro Awani Network. 84 6. INFORMATION ON OUR GROUP (cont’d) (iv) Subsidiary and associated company As at the LPD, Astro Awani Network does not have any sUbsidiary or associated company.
6.3.6.2 Maestro Talent and Management (Company No. 622782-W) (I) History and business Maestro Talent and Management was incorporated in Malaysia under the Act on 24 July 2003 as a private limited company under its present name. Maestro Talent and Management is currently inactive. (ii) Share capital As at the LPD, the authorised share cap~al of Maestro Talent and Management is RM100,000 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM2.00 comprising two ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Maestro Talent and Management for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Maestro Talent and Management is a wholly-owned subsidiary of Astro Entertainment. (iv) Subsidiary and associated company As at the LPD, Maestro Talent and Management does not have any subsidiary or associated company.
6.3.6.3 Astro Arena (Company No. 518046.T) (i) History and business Astra Arena was incorporated in Malaysia under the Act on 24 June 2000 as a private limited company under the name of Golden Oldies Sdn Bhd. On 5 October 2009, it assumed its present name. Astro Arena commenced its business on 1 December 2009. The principal activities of Astro Arena are the creation and production of Malaysian sports programming and acquisition and packaging of related sports content. (ii) Share capital As at the LPD, the authorised share capital of Astro Arena is RM100,000 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM2.00 comprising two ordinary shares of RM1.00 each. 85 I 6. INFORMATION ON OUR GROUP (cont’d) There has been no change to the issued and paid-up share capital of Astro Arena for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Astro Arena is a wholly-owned subsidiary of Astro Entertainment. (iv) Subsidiary and associated company As at the LPD, Astro Arena does not have any subsidiary or associated company.

6.3.7 Jointly controlled entity of Astro Entertainment 6.3.7.1 Endemol Malaysia (Company No. 821648-H) (i) History and business Endemol Malaysia was incorporated in Malaysia under the Act on 16 June 2008 as a private limited company under the name of Endemol South East Asia Sdn Bhd. On 25 June 2010, it assumed its present name. Endemol Malaysia commenced its business on 16 June 2008. The principal activities of Endemol Malaysia are creating, acquiring, developing, producing and selling audio visual entertainment content and programmes. (ii) Share capital As at the LPD, the authorised share capital of Endemol Malaysia is RM100,000 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Endemol Malaysia for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Endemol Malaysia is a 49.999%-owned associated company of Astra Entertainment whilst the remaining 50.001 % is owned by Endemol OpCo Holding B.V. (iv) Subsidiary and associated company As at the LPD, Endemol Malaysia does not have any subsidiary or associated company. 6. INFORMATION ON OUR GROUP (cont’d)

 

6.3.8 Subsidiaries of Astro Shaw 6.3.8.1 Tayangan Unggul (Company No. 365949·V) (i) History and business Tayangan Unggul was incorporated in Malaysia under the Act on 6 November 1995 as a private limited company under its present name. Tayangan Unggul commenced its business on 1 February 1997. The principal activities of Tayangan Unggul are film production, acquisition, commissioning and distribution. (ii) Share capital As at the LPD, the authorised share capital of Tayangan Unggul is RM100,000 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Tayangan Unggul for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Tayangan Unggul is a wholly-owned subsidiary of Astro Shaw. (Iv) Subsidiary and associated company As at the LPD, Tayangan Unggul does not have any subsidiary or associated company.
6.3.8.2 Nusantara Films (Company No.507144-T) (i) HiStory and business Nusantara Films was incorporated in Malaysia under the Act on 6 March 2000 as a private limited company under the name of AQON.Com Sdn Bhd. On 11 October 2006, it assumed its present name. Nusantara Films commenced its business on 13 October 2006. The principal activities of Nusantara Films are production, acquisition, commissioning and distribution of films. (ii) Share capital As at the LPD, the authorised share capital of Nusantara Films is RM500,000 comprising 500,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM250,000 comprising 250,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Nusantara Films for the past three years preceding the LPD. 6. INFORMATION ON OUR GROUP (cont’d) (III) Shareholder As at the LPD, Nusantara Films is a wholly-owned subsidiary of Astro Shaw. (iv) SubsIdiary and associated company As at the LPD, Nusantara Films does not have any subsidiary or associated company.
6.3.8.3 Karya Anggun (Company No.756671-M) (i) History and business Karya Anggun was incorporated in Malaysia under the Act on 18 December 2006 as a private limited company under its present name. Karya Anggun commenced its business during the financial year ended 31 January 2008. The principal activities of Karya Anggun are film production, acquisition, commissioning and distribution. (ii) Share capital As at the LPD, the authorised share capital of Karya Anggun is RM500,OOO comprising 500,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM250,OOO comprising 250,000 ordinary shares of RM1.00 each. There has been no change to the issued and paid-up share capital of Karya Anggun for the past three years preceding the LPD. (iii) Shareholder As at the LPD, Karya Anggun is a wholly-owned subsidiary of Astro Shaw. (iv) Subsidiary and associated company As at the LPD, Karya Anggun does not have any subsidiary or associated company.

6.3.9 Jointly controlled entity of Astro Shaw 6.3.9.1 Nusantara Edaran Filem (Company No. 625358-K) (i) History and business Nusantara Edaran Filem was incorporated in Malaysia under the Act on 19 August 2003 as a private limited company under the name of Ecstasy Records Sdn Bhd. On 15 January 2010, it assumed its present name. Nusantara Edaran Filem commenced its business on 1 February 2010. The principal activity of Nusantara Edaran Filem is film distribution. 6. INFORMATION ON OUR GROUP (cont’d) (ii) Share capital As at the LPD, the authorised share capital of Nusantara Edaran Filem is RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM7,000,000 comprising 7,000,000 ordinary shares of RM1.00 each. Details of the changes to the issued and paid-up share capital of Nusantara Edaran Filem for the past three years preceding the LPD are as follows: Cumulative issued and Date of No. of Par paid-up allotment shares value Consideration share capital RM RM Ordinary shares: 08.02.10 49,998 1.00 Cash 50,000 13.08.10 6,950,000 1.00 Cash 7,000,000 (iii) Shareholder As at the LPD, Nusantara Edaran Filem is a 50%-owned jointly controlled entity of Astro Shaw and MVP Entertainment Pte Ltd. (iv) Subsidiary and associated company As at the LPD, Nusantara Edaran Filem does not have any subsidiary or associated company. 6.3.10 Associated company of MBNS MUltimedia Technologies 6.3.10.1 Advanced Wireless Technologies (Company No. 517551-U) (i) History and business Advanced Wireless Technologies was incorporated in Malaysia under the Act on 21 June 2000 as a private limited company under its present name. Advanced Wireless Technologies commenced its business on 15 May 2002 by virtue of its investment holding in UMTS (Malaysia). The principal activity of Advanced Wireless Technologies is the provider of Wireless multimedia related services. (ii) Share capital As at the LPD, the authorised share capital of Advanced Wireless Technologies is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM3,333,336 comprising 3,333,336 ordinary shares of RM1.00 each. There has been no change to the issued and paid-Up share capital of Advanced Wireless Technologies for the past three years preceding the LPD. 89 6. INFORMATION ON OUR GROUP (cont’d) (iii) Shareholder As at the LPD, Advanced Wireless Technologies is a 25%-owned associated company of MBNS Multimedia Technologies whilst the remaining 75% is owned by Maxis, a related party. (iv) Subsidiary and associated company The subsidiary of Advanced Wireless Technologies as at the LPD is UMTS (Malaysia) details of which are set out in Section 6.3.11 of this Prospectus. Advanced Wireless Technologies does not have any associated company as at the LPD.

 

 

 

6.3.11 Subsidiary of Advanced Wireless Technologies 6.3.11.1UMTS (Malaysia) (Company No. 520422-0) (i) History and business UMTS (Malaysia) was incorporated in Malaysia under the Act on 17 July 2000 as a private limited company under its present name. UMTS (Malaysia) commenced its business on 18 April 2005. The principai activity of UMTS (Malaysia) is the holder of 3G spectrum assignment. (i1) Share capital As at the LPD, the authorised share capital of UMTS (Malaysia) is RM100,000,000 comprising 2,500,002 ordinary shares of RM1.00 each and 97,499,998 non-cumulative convertible redeemable preference shares of RM1.00 each (‘NCCRPS”). The issued and paid-up share capital of UMTS (Malaysia) is RM100,000,000 comprising 2,500,002 ordinary shares of RM1.00 each and 97,499,998 NCCRPS ali of which are held by Advanced Wireless Technologies. There has been no change to the issued and paid-up share capital of UMTS (Malaysia) for the past three years preceding the LPD. (iii) Shareholder As at the LPD, UMTS (Malaysia) is a wholly-owned subsidiary of Advanced Wireless Technologies. (iv) Subsidiary and associated company As at the LPD, UMTS (Malaysia) does not have any subsidiary or associated company. 6. INFORMATION ON OUR GROUP (cont’d) Save as disclosed above: (i) there have been no changes in the issued and paid-up share capital of the abovementioned sUbsidiaries, associated companies and jointly controlled entities for the past three years preceding the LPD; and
(ii) the abovementioned sUbsidiaries, associated companies and jointly controlled entities do not have any outstanding warrant, option, convertible security or uncalled capital as at the LPD.

6.4 MSC companies As at the LPD, five of our subsidiaries, namely MBNS, Astro Digital 5, Astro Productions, Astro Shaw and Astro Radio and our jointly controlled entity, Endemol Malaysia, are approved MSC companies. As an approved MSC company, the subsidiaries and jointly controlled entity benefit from the Government’s Bill of Guarantees and other financial incentives, including the unrestricted employment of knowledge workers, freedom to source funds globally, competitive financial incentives, intellectual property protection and cyberlaws as well as no Internet censorship. The financial incentives are investment tax allowance or pioneer income exemption and dUty free importation of multimedia equipment. The subsidiaries had enjoyed the corporate tax incentives, which have since expired but will continue to enjoy indirect tax incentives including dUty exemptions of the importation of production and multimedia equipment. As at the LPD, Endemol Malaysia is in the process of applying to Multimedia Development Corporation for a confirmation on the commencement date of its pioneer exemption period. Please refer to Section 12.2.2(vii) of this Prospectus for further details. (The rest of this page has been intentionally left blank) 7. BUSINESS OVERVIEW
7.1 Overview We are Malaysia’s and one of Southeast Asia’s leading integrated consumer media entertainment groups, engaging primarily within Malaysia in the creation, aggregation and distribution of content over mUltiple delivery platforms including TV, radio, publications and digital media. During the financial year ended 31 January 2012, we produced approximately 8,000 hours of TV content and, as at the LPD, we have produced or commissioned for production over 40,000 hours of TV content. Our leading position is refiected by our 156 TV channels as at 31 July 2012, of which 68 are Astro-created and branded channels. We distribute content to our customers via broadcast and on-demand programmes through our DTH satellite TV, IPTV and OTT platforms, making our TV offerings increasingly platform­agnostic in reaching our customers. As at 31 July 2012, we had a residential pay-TV subscriber base of over three million. In 2011, we had a market penetration rate of approximately 50% of the Malaysian TV Households of which we had a market share of apprOXimately 99% of Malaysia’S residential pay-TV market. Our radio business comprises nine commercial radio stations available over FM, DTH satellite TV, IPTV, mobile and Internet platforms, which include the highest rated radio stations in the Malay, Chinese, Indian and English languages in terms of listenership. According to the IMR Report, we had approximately 13 million weekly listeners capturing 52% share of listenership in Malaysia in April 2012, while for the three month financial period ended 30 April 2012, our share of the radio Adex market in Malaysia was 53%. We were awarded the ‘Brand of the Year” award at Malaysia’s recent Putra Brand Awards 2012. The Putra Brand of the Year award is given to the brand that best exemplifies innovation, quality and strong corporate social responsibilities. Based on the pro forma consolidated financial information for the financial years ended 31 January 2010,2011 and 2012 and the unaudited condensed consolidated financial statement for the six month financial period ended 31 July 2012, our Group recorded revenue of RM3,242.3 million, RM3,664.1 million and RM3,888.8 million and RM2,054.9 million, respectively and EBITDA of RM986.2 million, RM1,369.8 million and RM1,414.7 million and RM700.0 million, respectively. From the financial year ended 31 January 2010 to the financial year ended 31 January 2012, our Group’s pro forma revenue and EBITDA grew by 19.9% and 43.4% respectively. 7.1.1 TV business We are the largest pay-TV operator in Southeast Asia by subscriber base, with over 3.1 million residential pay-TV subscribers. Based on the IMR Report, which excludes East Malaysia viewers and viewers at commercial establishments, in June 2012, our pay-TV services, through our DTH satellite TV and IPTV platforms reached an average of 10.4 million resident viewers. We have developed content creation, aggregation and distribution capabilities in ten major languages and dialects to cater to the interests of Malaysia’s three main ethnic groups. Our broadcast centre, the AABC, houses Malaysia’S first fUlly-digitalised HD TV programme production facility that supports our production of feature films, original games and reality shows, variety specials, live sports, news and current affairs programmes, documentaries, drama series and children’s content. During the financial year ended 31 January 2012, we produced apprOXimately 8,000 hours of TV content and, as at the LPD, we have produced or commissioned for production over 40,000 hours of TV content. We develop, license and supply Asian-language content to local and regional TV operators. 7. BUSINESS OVERVIEW (cont’d) As at 31 July 2012, we exclusively broadcast some of our third party internationally sourced channels in Malaysia such as the National Geographic Channel, Disney Channel, Discovery Channel, AXN, ESPN and FOX Movies Premium. In addition, we also broadcast an ex1ensive collection of international and regional sports content including, the Barclays Premier League, the UEFA Champions League, the FIFA World Cup, the European Football Championship and the AFC Champions League. As at 31 July 2012, we broadcast 156 TV channels (both SD and HD channels), of which 68 are Astro-created and branded channels. The table below sets out our channels by type.  Channels by type  SO  HO  Total  Subscription channels  91  20  111  Pay-per-view channels  10  2  12  NVOD channels  22  0  22  Service related channels  2  0  2  Free-to-air channels  6  0  6  Other local channels  3  0  3  Total  134  22  156
We provide broadcast and on-demand programmes to our customers through DTH satellite TV, IPTV and on platforms, making our TV offerings increasingly platform­agnostic in reaching our customers. We initially launched DTH satellite TV in 1996. In 1997, we were granted exclusive right to provide DTH satellite TV services in Malaysia until 2017. In 2009, we launched Astro B.yond, a hybrid DTH satellite TV and broadband-enabled set-top box and distribution platform to provide among others, HD services. In 2011, we transformed from a pure DTH satellite TV operator into a multi-platform pay-TV operator when we launched Astro B.yond IPTV, a triple-play service that includes our pay-TV services delivered through fibre optic broadband with high-speed broadband and telephony services, in partnership with TIME. To further increase our Astro B.yond IPTV distribution reach to up to approximately 1.3 million homes passed by 31 December 2012, we have entered into a collaboration with the Maxis Group for the delivery of Astro B.yond IPTV via fibre and for the packaging and co-marketing of both the Maxis Group’s and our services for a period of ten years with an exclusivity period of three years (from the commercial launch of the packaged services). During the exclusivity period, the Maxis Group will become the exclusive fibre network partner for us (for areas within the fibre footprint of the Maxis Group but excluding areas within the fibre footprint of TIME) while we will be the exclusive IPTV service provider for the Maxis Group in providing content services to customers. We expect to soft launch the co-marketing of Astro On-The-Go and Astro B.yond IPTV with the Maxis Group services by the first quarter of 2013. Through Astro On-The-Go, our on online and mobile application service, we currently offer 11 linear TV channels and a wide selection of non-linear content, and have plans to expand the line-up in the near future. We offer up to 500 on-demand titles at anyone time through our various platforms. We further distribute content through other online social media and video portals, such as Facebook and YouTube. In February 2012, we launched NJOI, our non-subscription based DTH satellite TV service which is also Malaysia’s first. As at 31 July 2012, we offered 18 TV and 20 radio channels. 7. BUSINESS OVERVIEW (cont’d) To reach our consumers, we leverage on our wide range of sales channels, targeting different customer segments, to increase effective market reach and promote cost efficiency in distribution. Our distribution network primarily consists of more than 1,000 sales personnel comprising direct sales and telemarketing staff, and an extensive retailer network with nationwide reach, covering both urban and rural regions of Malaysia. Our Group’s revenue from our TV business consists predominantly of sUbscription based revenue, and contributed approximately 94% of our Group’s total revenue for the six month financial period ended 31 July 2012.
7.1.2 Radio business Astro Radio broadcasts radio content through 20 different stations, nine of which are our commercial radio stations which are delivered as FM stations and broadcast on our DTH satellite TV, IPTV, mobile and Internet platforms while the other 11 additional direct-to-user radio stations are broadcast only on our DTH satellite TV, IPTV, mobile and Internet platforms. According to the IMR Report, our radio stations collectively reached approximately 13 million weekly radio listeners in April 2012, representing 52% share of listenership in Malaysia. For the three month financial period ended 30 April 2012, our share of the radio Adex market which comprises 52 radio stations in Malaysia was 53%. We have the highest rated radio stations in the Malay, Chinese, Indian and English languages in terms of listenership in April 2012. Our radio business contributed approximately 5% of our Group’s total revenue for the six month financial period ended 31 July 2012.
7.1.3 Publications business Astro Publications publishes seven print magazines, including our TV viewing guide, AstroView, which is the most widely circulated magazine in Malaysia with a circulation of approximately six million in 2010. There are four different editions of AstroView in circulation: editions in three different languages and a Traveller edition for hotels. Our other commercial publications include the English titles FourFourTwo, Style and FHM, the Malay-language title InTrend and the Chinese titles men’s uno and iFeel, with a combined circulation of approximately 1.7 million in 2010.
7.1.4 Digital services business Astro Digital develops and manages online and mobile portals to provide sports, entertainment and other key content to online audiences. These digital services allow us to expand our reach and to engage with customers and viewers by providing digital content such as latest news and sporting results, behind-the-scene and special features, programme highlights and social integration. In addition, our digital media platforms provide us with another medium for advertisements, forming part of our integrated media advertisement offering strategy.

7.2 Significant milestones Year Key milestones I Achievements I Awards I Recognitions 1996 Through the launch of MEASAT-1, MBNS, one of our wholly-owned subsidiaries, commenced digital DTH satellite pay-TV services with 22 TV and five radio stations. We introduced format radio programming, the first broadcaster to introduce this into the Malaysia market. 7. BUSINESS OVERVIEW (cont’d) Year  Key milestones I Achievements I Awards I Recognitions  1997  MBNS was granted a renewable 25-year broadcasting licence for the provision of broadcasting services in Malaysia, with exclusivity on DTH satellite TV services until 2017 and non-exclusivity until 2022.  2003  We surpassed one million residential pay-TV subscribers.  2007  We surpassed two million residential pay-TV SUbscribers.  We introduced Astro On Demand, Malaysia’s first TV NVOD service.  2009  We launched the Astro B.yond initiative which comprises hybrid DTH and broadband-enabled set-top boxes and distribution platform to provide among others, HD services.  We launched Astro B.yond with the first HD service in Malaysia.  We won the “CASBAA Chairman’s Award” for our outstanding contribution to the pay-TV industry in the region.  2010  We brought the first 3D broadcast in Malaysia and Southeast Asia for the 2010 FIFA World Cup.  We launched the Astro B.yond PVR.  We launched the innovative ‘Astro Tutor TV UPSR’ examination revision channel.  We were awarded the “Gold” award in the Media and Entertainment category at the Putra Brands Awards 2010, Malaysia’s premier consumer brand awards.  2011  We introduced our IPTV services through Astro B.yond IPTV, in collaboration with TIME, to deliver IPTV through TIME’s fibre optic broadband network.  We launched Astro First, the first movie pay-per-view with near cinema window offerings in Malaysia, made available through our set-top boxes.  We launched the Super Packs which comprise the best of our content, inciuding HD and PVR services, to enhance our value proposition for our customers.  We surpassed three million residential pay-TV subscribers.  We were awarded the “Gold” award in the Media and Entertainment category at the Putra Brands Awards 2011, Malaysia’s premier consumer brand awards.  2012  We were awarded the “Brand of the Year” and the “Gold” awards in the Media and Entertainment category at the Putra Brand Awards 2012, Malaysia’s premier consumer brand awards.  We launched Astro On-The-Go, our on entertainment service for smartphones, tablets and PCs, as well as broadband-based VOD.  We launched NJOI, Malaysia’s first non-subscription based DTH satellite TV with 18 TV and 19 radio channels.  We entered into a collaboration with the Maxis Group to further increase our Astro B.yond IPTV distribution reach to up to approximately 1.3 million homes passed by 31 December 2012.
7. BUSINESS OVERVIEW (cont’d)
7.3 Competitive strengths We believe that we are well positioned to maintain leadership in the Malaysian consumer media entertainment market and deliver growth as a result of the following competitive strengths: 7.3.1 Leading integrated consumer media entertainment group in the fast growing Malaysian market We believe that our capabilities across content production, aggregation and distribution over multiple platforms reflect our position as Malaysia’s leading integrated consumer media entertainment group. We hold a leading position across our various distribution platforms as follows: • More than three million residential pay-TV subscribers reached via our DTH satellite TV, IPTV and OTT platforms, comprising a market penetration rate of approximately 50% of Malaysian TV Households of which we had a market share of approximately 99% of the residential pay-TV market in Malaysia in 2011, making us the largest residential pay-TV operator in Malaysia.
• Approximately 13 million weekly radio listeners to our radio stations available over FM, OTH satellite TV, IPTV, mobile and Internet platforms in April 2012, capturing a 52% share of listenership in Malaysia. For the three month financial period ended 30 April 2012, our share of the radio Adex market in Malaysia was 53%.
• Approximately 7.7 million circulation of our publication in 2010, comprising seven print magazines including AstroView, which is Malaysia’s most widely circulated magazine,with a circulation of approximately six million in 2010.
• Over seven million monthly page views across our digital platform (excluding radio listening and Astro On-The-Go viewing) in July 2012, based on internal tracking powered by Google Analytics.

Based on our existing position, we believe we are well positioned to capitalise on the potential growth of the Malaysian economy and a young population demography that is open to the adoption of new technologies. According to the IMR Report, Malaysia’s nominal GOP is expected to grow at a CAGR of B.O% from 2011 to 2016 and the Malaysian average monthly household income is expected to grow at a CAGR of 5.3% from 2011 to 2016, higher than many developed countries. We believe this economic growth will contribute to higher consumer spending in media, expansion of the advertising market and an increase in residential pay-TV subscriber penetration from 50% of Malaysian TV Households in 2011 to 63% in 2014, based on the forecast contained in the IMR Report. 7.3.2 Leading multi-lingual content powerhouse in Malaysia with strong in-house production capabilities and an extensive international content portfolio We believe we have developed a strong understanding of the viewing preferences of Malaysia’s diverse population through our 16 years of operation in the Malaysian residential pay-TV market. With this knowledge, we are able to produce and aggregate a broad suite of what we believe to be attractive local, regional and international content that specifically targets the different segments of Malaysian viewers. 7. BUSINESS OVERVIEW (cont’d) We are the leading producer of local vernacular content catering to multi-ethnic and multi-lingual communities of Malaysia. As at the LPD, we have produced or commissioned for production over 40,000 hours of TV content in various languages and were the first company in Malaysia to develop a local news channel, Astro Awani, with news available for 24f7 and a local sports channel, Astro Arena with sports coverage available for 24f7. This production capability is enabled by eight TV production studios and facilities and an award-winning domestic talent pooi comprising some of the biggest stars in Malaysia. We believe our production experience provides us with a competitive edge and has led to the production of popular local content, such as Malay content Maharaja Lawak Mega, Chinese content Astro Classic Golden Melody and Indian content Vaanavil Super Star, which had TV peak ratings of 15.5, 17.2 and 26.2, respectively, and achieved peak viewership numbers of 1.0 million, 0.4 million and 0.3 million, respectively, throughout the programmes’ broadcasts for the financial years ended 31 January 2010, 2011 and 2012, according to Nielsen Television AUdience Measurement database. We have created our own series of Astro SuperSport channels showing popular international sports content such as the UEFA European Football Championship, the German Bundesliga, NBA, Roland Garros (French Open), the FIFA World Cup and the Barclays Premier League, where a portion of the matches is broadcast on the ESPN and Star Sports channels. We also source content from third-party international, regional, locai and sports content providers, and as at the LPD, have exclusive broadcasting rights in Malaysia to premium channels such as the National Geographic Channel, Disney Channel, Discovery Channel, AXN, ESPN and FOX Movies Premium. We believe that our large customer base is of high value to content providers, and that our long-standing relationships with leading regional and international content providers enable us to provide Malaysian viewers a large and diverse selection of content. As at 31 July 2012, we broadcast 156 TV channels, including 68 Astro-created and branded channels with 22 HD channels over multiple genres and 25 languages, outnumbering our competitors’ channels in Malaysia. Our closest competitor, Hypp.TV has over 50 channels. We believe the breadth of our content portfolio enables us to offer our subscribers a greater selection of content, further differentiating us from our competitors. 7.3.3 MUlti-platform distribution supported by continuous innovation Since our inception, we have sought to use technology to develop and expand our product offerings in order to address consumers’ evolving entertainment preferences. Initially, our pay-TV business was launched on a DTH satellite TV platform for cost effective mass market reach. In recent years, we have transformed ourselves into a multi-platform distributor, embracing opportunities to reach customers and aim to deliver our content anywhere, anytime and on any device. Over our multiple platforms, we have launched a number of products and services, including Astro B.yond HD, Astro B.yond PVR, Astro B.yond IPTV, Astro First and Astro On-The-Go. In particular, we believe our Astro On-The-Go service is well-suited to capitalise on the tendency of Malaysian consumers to view content on their preferred viewing platform. As at 31 July 2012, we had approximately 50% of our subscribers on Astro B.yond set-top boxes and approximately 34% of our subscriber base had subscribed to Astro B.yond services. We believe that the encouraging take-up rate of Astro B.yond services demonstrates a healthy demand for our services and our ability to sell value-added services to our subscribers. 7. BUSINESS OVERVIEW (cont’d) The launch of new services has been enabled by continuous innovation of set-top boxes and broadcasting and IT infrastructures. For example, our new generation Astro B.yond set-top boxes support HD, PVR and VOD services via DTH satellite TV and fixed broadband, with the flexibility of utilising the same Astro B.yond set-top boxes for our Astro B.yond IPTV offering. We have invested in our broadcasting, production and IT systems to ensure an efficient and effective operating model. In addition, we have completed a large-scale upgrade of our customer care and billing systems and enhanced our ability to better serve our customers and gain deeper insight in consumer preferences. Over the financial years ended 31 January 2010, 2011 and 2012, we have spent RM1,246.2 million in infrastructure and system enhancements, not including costs relating to leasing of satellite transponders.
7.3.4 Extensive sales and distribution network and strong customer service platform We have an extensive distribution network that spans across Malaysia with more than 1,000 sales personnel as at the LPD, comprising direct sales and telemarketing staff, and an extensive retailer network with nationwide reach, covering both urban and rural regions of Malaysia. We believe we have built a robust logistics network capable of cost-effectively scaling to customer demand, leveraging on our established partnerships with third party service providers with extensive geographical reach and on our base of over 1,700 installers as at the LPD, to deliver installation services throughout Malaysia. Our multi-channel distribution strategy coupled with flexible pricing and packaging of products and services, allows for effective market penetration by matching customer segments with optimal content needs. In particular, we believe that innovative bundling and targeted cross-selling of products and services have allowed us to increase the Residential ARPU of our subscriber base and also to reduce churn by increasing customer loyalty. We continuously seek to improve our overall customer experience and customer satisfaction. We launched customer care on-boarding programmes, loyalty programmes and are in the process of implementing enterprise-wide sales automation and service integration platforms aimed at achieving end-to-end visibility, faster sales facilitation, faster service turnaround and provision of a seamless viewing experience.
7.3.5 One of Malaysia’s best brands leading to significant customer loyalty We are an award-winning organisation and we believe we have a strong and loyal following in the Malaysian market. We have focused on closely interacting with our subscriber base since our inception in 1996 and have developed a widely recognised brand, winning the “Gold” award in the “Media and Entertainment” category at the Putra Brand Awards consecutively from 2010 to 2012. The award incorporates responses from approximately 6,000 consumers. In addition, we received the “Brand of the Year” award across all categories at the Putra Brand Awards in 2012. We continuously monitor and systematically improve our brand equity by engaging Milward Brown to conduct brand equity studies, which is based on 1,500 respondents consisting of both our subscribers and non-subscribers. According to Milward Brown’s Brand Equity Study 2012, as at June 2012, when asked about large companies in Malaysia, Astro was the most mentioned brand in the Malaysian market, higher than the other two popular brands -“Maybank” and “Maxis”. We believe that recognition of our brand has been instrumental in growing our subscriber base, reducing churn and improving customer loyalty. 7. BUSINESS OVERVIEW (cont’d) 7.3.6 Resilient business model with significant economies of scale and a strong track record We generate most of our revenue from our pay-TV services, a subscription business model that provides us with a steady stream of cash receipts and stable margins. We have been able to consistently add pay-TV subscribers and grow our revenue, competing against multiple new entrants and withstand economic downturns such as the recent US debt crisis and Eurozone crisis. We believe our large scale operations and subscriber base spanning multiple platforms provide us with economies of scale and operational leverage, for example in the procurement of content and set-top boxes. In addition, we believe our large subscriber base enables us to pursue opportunistic collaborations with third parties to further expand the range of our product offerings and to extend the reach of our distribution network. These characteristics have translated to strong historical financial performance during the past three financial years. Based on the pro forma consolidated financial information, our Group’s revenue grew by 19.9% from RM3,242.3 million for the financial year ended 31 January 2010 to RM3,BBB.B million for financial year ended 31 January 2012, while our Group’s EBITDA grew by 43.4% from RM9B6.2 million for the financial year ended 31 January 2010 to RM1,414.7 million for the financial year ended 31 January 2012.
7.3.7 Strength and depth in leadership and talent Our leadership team comprises talents drawn from around the world with both local and international experience which has resulted in our leadership in the Malaysian consumer media entertainment market. In particular, we believe that our management team’s initiatives have resulted in an increase in Residential ARPU concurrent with subscriber growth, while reducing churn, as well as the launch of new products and services. Since 2009, we have launched various products and services such as Astro a.yond HD, Astro a.yond PVR, Astro a.yond IPTV and Astro On-The­Go. We train our employees across a diverse cross-section of disciplines, developing highly innovative employees to support and maintain our leadership position in the Malaysian media market. We are regarded as one of Malaysia’s top employers as demonstrated by the Malaysia’s 100 Leading Graduate Employers 2011 award. We believe that we have sustained a culture of high performance by focusing on recruiting of results-driven employees, and monitoring their progress through, among others, a rigorous performance management system. 7. BUSINESS OVERVIEW (cont’d) 7.4 Strategies and future plans We aspire to maintain our leadership in the consumer media entertainment sector in Malaysia. Specifically, we are executing the following strategies to increase revenue, profitability and returns to our shareholders. 7.4.1 Continue to strengthen our position as the preferred content hub in Malaysia to extend market leadership We believe that we produce and procure the best and most comprehensive suite of content offerings for Malaysian consumers and audiences, positioning us as the country’s leading integrated consumer media entertainment group. Going forward, we intend to continue to build on our content leadership through the following initiatives: • Extend our position as the preferred partner for local, regional and international content owners. For example, as at the LPD, we have secured from third party content providers exclusive broadcasting rights in Malaysia to premium channels such as the National Geographic Channel, Disney Channel, Discovery Channel, A«N, ESPN and FOX Movies Premium. We believe this is due to our distribution scale, relationship strength With the content providers and monetisation capabilities;
• Utilise our knowledge of the iocal entertainment market to produce and aggregate what we believe is the most attractive mix of global, regional and local content for Malaysian audiences. To this end, we will continue to develop our local talent pool and our own content intellectual properties, expand our production facilities and collaborate with international partners to produce localised content;
• Seek to expand our content line-up, including HD and VOD content, and broaden our content genre to include wellness and self-improvement content; and
• Secure cross-platform and cross-geography content rights for both our produced and selected procured content, with the aim of distributing and monetising this content with subscribers anytime and anywhere, within Malaysia and potentially in other regional markets.

7.4.2 Leverage on new technologies to develop products that enhance reach and service proposition We will continue to capitalise on the emergence of new technologies and develop new products to expand our customer reach and enhance our service proposition to consumers. We intend to continue our partnership with TIME to provide bundled IPTV and high-speed broadband services via Astro B.yond IPTV. In addition, using Astro On-The-Go to extend our TV business to new devices, we aim to enhance multi-room TV to go beyond the household to access individual customers across multiple screens, and enable customers to access our content offerings anytime and anywhere. 7. BUSINESS OVERVIEW (cont’d) To further increase our Astro B.yond IPTV distribution reach to up to approximately 1.3 million homes passed by 31 December 2012, as well as to expand the take-up of Astro On-The-Go, we have entered into a collaboration with the Maxis Group for the delivery of Astro B.yond IPTV via fibre and for the packaging and co-marketing of both the Maxis Group’s and our services for a period of ten years with an exclusivity period of three years (from the commercial launch of the packaged services). During the exclusivity period, the Maxis Group will become the exclusive fibre network partner for us (for areas within the fibre footprint of the Maxis Group but excluding areas within the fibre footprint of TIME) while we will be the exclusive IPTV service provider for the Maxis Group in providing content services to customers. We expect to soft launch the co-marketing of Astro On-The-Go and Astro B.yond IPTV with the Maxis Group services by the first quarter of 2013. We intend to bring to market new product enhancements and services for our Astro B.yond customer base. We are also committed to continuing to expand our pre-paid services for our NJOI customer base. With the expected increase in our transponder satellite capacity following the planned launch of MEASAT-3B by MSS in 2014, we expect to be able to significantly increase our HD offerings as well as launch other new high bandwidth services as they become commercially viable. We expect our focus on technology will allow us to further improve our proposition to both existing and new customers, reinforcing our market leadership. 7.4.3 Drive new product adoption to increase share of customer wallet We believe that our long operating history and comprehensive customer analytics provide in-depth insights that enable us to offer compelling product propositions relevant to our customers’ viewing needs. Going forward, we intend to leverage on this strategic advantage and focus on selling our premium services through segmented marketing efforts. We aim to expand our breadth of subscription package options and offer value-for-money bundled propositions such as Super Packs, to drive services take-up. Premium services such as HD, PVR, multi-room, VOD and Astro On-The-Go are targeted to address the viewing needs of the affluent segment as well as the young and urban segments of the Malaysian population. As we develop new products and services, we will continue to bUild on our bundling capabilities to create more value propositions for customers. To further support the adoption of such new products and services, we are also proactively migrating our customer base from the legacy set-top boxes to our Astro B.yond set-top boxes, which will provide all customers access to additionai value­added services and a better viewing experience. Through our NJOI service, we are also creating new opportunities to sell a variety of pre-paid based products to customers as they seek to access selected content offerings. We believe that these initiatives will increase existing customer spending and the value of our subscriber base. 7.4.4 Pursue a targeted acquisition strategy to drive subscriber base growth The penetration rate of our residential pay-TV services was approximately 50% of Malaysian TV Households in 2011. We believe that there is room for continued subscriber base growth. To access this potential growth, we are adopting an analytics-driven customer segmentation approach, which involves customising our product offerings to cater to the varied viewing preferences and income levels of the remaining market and expanding our reach beyond households to reach individual customers through our Astro On-The-Go platform. We are also expanding and modernising our sales network to effectively penetrate different customer segments in a cost-efficient manner. 7. BUSINESS OVERVIEW (cont’d) We also aim to expand our addressable market through the rollout of our NJOI service. We believe that our NJOI service is a cost-efficient way of leveraging our existing infrastructure to reach the lower income segment and those unwilling to commit to a recurring fee, while establishing an upgrade path towards full subscription based services. We believe that the ability to migrate churned subscribers from our subscription based services to our NJOI service also allows us to reduce subsequent customer acquisition costs by maintaining an ongoing relationship with such customers. 7.4.5 Grow our share of the Malaysian advertising spend via a mUlti-pronged approach We believe that we command a substantial share of Malaysia’s Adex by virtue of our position as a leading integrated consumer media entertainment group in the country. Going forward, we aim to solidify and extend our share of Malaysian Adex by attracting advertising dollars aimed at both, the premium and mass segments of the market. We will continue to leverage on our high value added service offerings to attract advertisers wishing to capture premium audiences who subscribe to higher Residential ARPU services such as HD, PVR and VOD. In addition, we will continue to market our ability to provide premium advertisers customised and demographically targeted solutions through our mix of content and delivery platforms. To increase our share of Adex geared towards the Malaysian mass market, we will seek to attract lower-income mass market subscribers through our NJOI service. Finally, we can also offer advertisers integrated advertising solutions across TV, radio, publishing and online segments. We believe these strategies will drive an increase in our share of Adex and consequently our advertising revenue. 7.4.6 Enhance customer experience to strengthen customer loyalty We are committed to enhancing customers’ experience to improve overall customer satisfaction and promote customer loyalty. We intend to achieve this by raising our service levels across all customer touch points, from installation to after-sales services and ongoing customer interactions. Such ongoing initiatives include: • Adopting a segmentation-based servicing strategy, leveraging customer insights and analytics, to deliver a customised service experience;
• Enhancing information and technology capabilities as well as automation of service platforms to allow our business partners, such as retailers and technical service partners, to improve their response to customers’ servicing needs while enabling a higher level of convenience;
• Optimising online customer experience to enable ease of access to support and services while managing our customer service costs; and
• On-going optimisation of operational processes to improve installation and servicing experience.

We intend to continue to improve our overall service levels and customer experience, which we believe will in turn build customer loyalty and brand equity, and reduce churn. 7. BUSINESS OVERVIEW (cont’d) 7.4.7 Continue to focus on operating efficiency and scalability to ensure profitable growth We are committed to achieving profitable growth and aim to accomplish this through the folloWing initiatives: • Observe stringent investment criteria in evaluating content production and acquisition choices, and for approving the development or upgrading of products, systems and infrastructure;
• Increase the portion of in-house production of local and vernacular content, which is a cost-effective method to enhance customer satisfaction;
• Manage customer acquisition costs through targeted acquisition strategy, deployment of multi-channel sales teams and purchasing economics;
• Reduce our total cost of ownership for our pay-TV business by proactively migrating our subscriber portfolio from the legacy set-top boxes to our Astra B.yond set-top boxes in order to reduce the cost of technical development and maintenance and after sales support associated with maintaining multiple types of set-top boxes as well as to optimise transponder capacity upon fUll migration; and
• Contain average costs to serve a customer by improving our customer service platform, leveraging on information and technology capabilities to increase efficiency and expanding functionality of web-based self-care service.

7.5 Business units 7.5.1 TV business 7.5.1.1 Subscribers We aim to provide our customers with a highly-fulfilling TV content viewing experience with a large variety of content offerings, covering both international and vernacular content across different customer segments. In addition to offering pay-TV services to residential subscribers, we also cater to commercial subscribers, such as financial institutions, hospitals, shops, restaurants and other food and beverage outlets. Commercial outlets, schools and hotels, while contributing relatively marginal revenue, are Important in increasing the brand awareness of our pay-TV services. The table below sets out our number of subscribers, excluding NJOI customers, as at the dates specified. As at 31 January 2010 As at 31 July 2012 ‘000 ‘000 Residential SUbscribers 2,930 3,166 Commercial subscribBI”5 9 12 Hotel rooms(1) 109 136 Public schools(2) 3 12 7. BUSINESS OVERVIEW (cont’d) Notes:  (1)  Calculated on a per room basis.  (2)  We provide subscription servicas to public schools on a complimentary basis as part of
our corporate social responsibility. In 2011, we had a penetration rate of approximately 50% of Malaysia’s 1V Households which consist of many ethnic groups. As at 31 January 2010, the ethnic composition of our residential subscriber base was 58% Malay, 23% Chinese, 11% Indian and 8% from other ethnic groups. As at 31 July 2012, the ethnic composition of our residential subscriber base was 61 % Malay, 21 % Chinese, 10% Indian and 8% from other ethnic groups. 7.5.1.2 Products and services We provide our subscribers with the flexibility to choose from over 20 packages to best suit their viewing needs and bUdge!. Across our multiple products and services, we offer a breadth of content packages spanning multiple genres, which we believe appeals to both the mass market and premium subscribers, as well as the urban and young segments. Our content is delivered via broadcast and on demand through our multiple platforms of DTH satellite 1V, IP1V and OIT. (i) Subscription packages In designing the pay-1V service packages, we aim to offer current and potential subscribers choice and flexibility. As at 31 July 2012, all packages included 41 basic channels and services (our Basic Family package) and 20 radio channels. In addition to these basic channels, subscribers have the option to choose from (i) three Prime packages such as Sports, Movies and Dynasty, (ii) four Mini packages, each of which offers a selection of channels along a specific theme such as news, learning, variety, and kids, (iii) six Plus packages, each of which offers a selection of channels which appeals to the various ethnic groups in Malaysia such as Mustika, Gold, New Emperor, Maharaja, Metro, Indo Pek, and special interest channels on an a-Ia­carte basis, and (iv) four Super Packs, each of which we believe offers more value to subscribers by bundling the most popular channels by customer segment and demographic for various ethnic groups. We also offer premium packages and pay-per-view services with the latest dramas and movies from the region such as Astro On Demand, Astro Box Office Movies, Astro First as well as niche sporting events on Astro Box Office Sports. ICompany No. 932533-V I 7. BUSINESS OVERVIEW (cont’d) The following table shows our subscription packages as at 31 July 2012: Basic Familv Packages • TVB Classic • CCTVNews • Astra TVIQ • TLC• TV9 • Makkal TV’• TV1* • NTV7 • i130* • Astra AEC· Xiao Tai • Nat Geo Wild • Astra Ceria • lY2-• Zee Variasi • Astra • STV Yang* • Astra Tutor TV • Astra Arena • Arab Radio & TV • Tvi* • NIEVr • AXN• TV3 • Astra Ria Variety (ART) • Astra Vaanavil* • Jia Vu· • CCTV4* UPSR”

• DIVA Universal • ESPNews • KBSWorld Tutor TV
• Asian Food Granada• Astra Prima* • TV A1Hijrah • Astra Vellithirai • Astra • lTV Channel (preview)• Astra Awani* PMR”• Astra Oasis· Tutor TV • Astra HITZ TV SPM” Mini Packaaes • BemamaTV* • Astra Prime Packages News Learning Variety Kids Sports Movies Dynasty • CNN • National • Star World • Nickelodeon • Astra SuperSport • HBOAsia • Astra Wah Lai Toi
• CNBCAsia Geographic • FOX • Disney Channel

• ESPN • TVB Entertainment News • MAXChannel • Star Sports • FOX Movies Premium • Phoenix Chinese Channel • BBCWorld • Cartoon Network
• MTV
• Bloomberg • Discovery Channel • E! Entertainment • Disney Junior

• Eurasport • TVBXing He • Australia Network • Discovery Science • Animax • Golf Channel • NHKWorld
• Astra SuperSport 2 • TVBSAsia

• AI-Jazeera English • History • Animal Planet • Astra SuperSport 3 • Astra Shuang Xing Plus Packages Mustika Gold New EmDeror Maharaia Metro IndoPek SDecial Interest • Astra Citra • CTIAsia • Phoenix Chinese • SUN TV • The Biography • Bintang • BabyTV
• Astra Wama • Phoenix InfoNews Channel • Chutti TV Channel • Pelangi • Astro Stocklink
• Astro Bella Channel • CTIAsia • Sun Music • Crime & Investigation

• Astra Hua Hee Dai • Celestial Movies • Adithya TV • Discovery Home & Health Channel • Discovery Turbo • Phoenix InfoNews
• Astro Shuang Xing

• Astro Hua Hee Dai Premium Packages
Pay Per Event I Pay~Per~View • Astra Box Office Movies Thangathirai • Astra On Demand Dragon Pack • Astra Box Office Sports • Astra Box Office Movies Tayangan Hebat • Astro First HDChannels Basic HD Variety Local I Vernacular I OthersMovies Leamina Sports • Star Wortd HD Zhi Zun HD• Discovery HD Wortd • Astra SuperSport HD • HBO HD • One HD • FXHD • Astra (Chinese)• FOX Movies Premium HD • National Geographic • Astro SuperSport HD 2 • BeTVHD • KIXHD Channel HD • Astra Mustika HD HD • Sundance Channel HD • AXN HD • Celestial • ESPN HD • Astro First HD • History HD • Astro ‘Signature’ HD Network Asia HD & Lire Inspired (LQ

• Astro Lifestyle HD: Food

Note: Channels signmed with -“are channels offered on our NJOI service. 105 7. BUSINESS OVERVIEW (cont’d) (ii) The Basic Family package is available to all subscribers and includes vernacular and international channels that represent the main genres such as drama, general entertainment, learning, local sports, news and movies. With the additional packages to the Basic Family package, we aim to provide more quality, value and choice. Subscribers are able to choose the package or combination of packages that are most suitable to them on top of the Basic Family package, and pay subscription rates based on the packages that they selected. In June 2011, we also launched the Super Packs, a content-bundling proposition with value-added services such as HD and PVR. Our pay-TV services are intended to provide a diverse mix of programmes that appeal to the various ethnic groups of the Malaysian population. We secure local, regional and international content and/or channels that include general entertainment, sports, news, movies, music, documentaries, business news, education and children’s programmes. As at 31 July 2012, we broadcast 156 TV channels in total, including 68 Astro-created and branded channels with 22 HD channels. We routinely conduct quantitative and qualitative market research activities to understand both the appeal of our services to our subscribers and how to attract non-subscribers to our services. These activities enable us to devise strategies for pricing, programming and packaging to our subscribers. Through such activities, we have evolved from having only a single package structure at the time of our initial launch, into the current structure of multiple package offerings today. We believe that the changes and developments over the years have been successful and instrumental in improving our subscriber base growth, keeping churn rate low and enhancing Residential ARPU for selected subscriber segments. Additional value-added services under the packages We also provide an improved viewing experience to our subscribers with an array of value-added-services, as follows: (a) HD/3D We launched the first HD service in Malaysia in December 2009 under the brand Astro B.yond HD. Following the launch of Astro B.yond HD, Astro B.yond PVR was introduced in June 2010. As at 31 JUly 2012, Astro B.yond HD had 22 HD channels that offer movies, drama, sports, general entertainment and documentaries. Where 3D feed is available, we aiso broadcast 3D TV content as special events such as the Semi-Finals and Finals of the 2010 FIFA World Cup, the final match of the UEFA European Football Championship 2012, selected Barclays Premier League matches and golf tournaments. 7. BUSINESS OVERVIEW (cont’d) The table below sets out SD/HD breakdown of our channels as of the dates indicated: _—–,=…A”-s’–a=t-c3-.;;1″‘Ja..”coua=ry’—-_–== As at 31 July 2010 2011 2012 2012 SO channels 115 127 132 134 HO channels 4 13 19 22 Tolal 119 140 151 156 (b) PVR
The Astro B.yond PVR set-top box provides a PVR function, which allows subscribers to record content, rewind live TV, pause live TV and play back any recorded programmes. The PVR hard disk allows for 500GB of storage, which can record approximately 300 hours of content.
(c) Multi-room service

The multi-room service allows customers to sign-up for a second subscription at a discounted monthly subscription fee-the second subscription package mirrors that of their primary sUbscription. This requires an additional set-top box to be installed for each additional location in the household, but connects to the same satellite dish as the primary box. To continue to drive value for our multi-room customers, we provide our multi-room service customers with access to the Astro On-The-Go service for free. The multi-room service allows customers to enjoy a richer suite of services catering for different needs of their family in the home. We believe this service is well positioned to benefit from Malaysia’s average household size of 4.3 people per household in 2011. (d) NVOD We offer various NVOD services to our customers. NVOD is the transmission of a programme across a number of TV channels at staggered starting times to allow the viewer to watch the programme at a preferred time. Astro On Demand was launched in July 2007, providing the screening of the latest dramas from Hong Kong at the same time as their release in Hong Kong, as part of a monthly subscription package. We also offer various selections of first-run movies and Telemovies through Astro Box Office Movies, Tayangan Hebat and Thangathirai on a subscription basis. We had in January 2011 and August 2012 launched Astro First and Astra Best respectively, which are pay-per-view movie products offering both local and foreign theatrical movies, of which local movies are offered as early as two weeks after their theatrical releases. Astro First and Astro Best can be ordered through SMS and customers are able to view the content as many times as they wish over a period of 46 hours commencing from successful authentication. 107 7. BUSINESS OVERVIEW (cont’d) (e) (f) (g) Pay per event For significant events or niche sports such as cricket and wrestling, we offer two pay-per-event channels on Astro Box Office Sports. Once purchased, customers have access to the channel throughout the entire duration of the event. VOO In 2011, we launched broadband-based VOD for downloading to our Astro B.yond PVR set-top boxes. Initially, the service was only available to our IP1V customers, but in May 2012, the service was made available to all of our pay-1V subscribers with the Astro B.yond PVR service when connected to a broadband service of the customer’s choice. Up to 500 titles are concurrently available for download at any time. Content is available as transactional VOD (“TVOO”) and subscription-based VOD (“SVOO”) to subscribers. For the 1VOD service, a customer is able to purchase an individual title or a complete drama series on demand. They can also subscribe to the SVOD service at the same time, which allows customers to view selected content from the 1V channels they subscribe to for the duration of their SUbscription. In addition, as part of our collaboration with the Maxis Group as set out in Section 7.1.1 of this Prospectus, we plan to create a SVOD content package to be made available to subscribers of certain co-marketed/bundled packages to be offered pursuant to such collaboration. A Push Video On Demand (“PushVOO”) service is planned to be launched by the end of 2012 to cater to PVR customers without a broadband connection. Under the PushVOD service, the content will be pre-downloaded into the hard disk of the PVR through satellite transmission. Customers will be able to view the content once it has been fully downloaded into the PVR hard disk. High-speed broadband and telephony services We launched our Astro B.yond IP1V services in April 2011, a triple-play bundling proposition of pay-1V, high-speed broadband and telephony services. Our IP1V customers can get all of the channels and value-added services described above and also a bundled value offering including a high­speed broadband connection and home telephony services through high-speed fibre optic broadband. The broadband and home telephony services are provided through a partnership with TIME. In addition, similar services will be provided following our collaboration with the Maxis Group as set out in Section 7.1.1 of this Prospectus. This multi-play bundled service enables us to provide an advanced digital lifestyle via a seamless experience to meet the voice, data and entertainment needs of all generations within a home. 7. BUSINESS OVERVIEW (cont’d) (iii) (Iv) (h) Astro interactive services We offer interactive TV services to our subscribers. For example, an interactive application that is incorporated across some of the most popular TV programmes, such as Akademi Fantasia and Mania, allows viewers to vote and participate in real-time chat rooms and contests. We offer a “Red Button” interactive feature on some channels to provide a link to several different feeds from certain events, thereby enabling viewers to select between events or sporting matches taking place simultaneously. The “Red Button” feature is also used to provide interactive services such as programming updates, event news, scores, contest information and sponsor advertising. For example, for the 2010 FIFA World Cup football programmes, the “Red Button” function allowed subscribers to view multiple matches and to get updates and news on the matches. Non-subscription based DTH satellite TV with pre-paid options In February 2012, we launched NJOI, our non-subscription based DTH satellite TV service. As at 31 July 2012, NJOI customers are able to watch 18 TV channels, including educationai channels, such as Astro Tutor TV UPSR, Astro Tutor TV PMR, Astro Tutor TV SPM and Astro Xiao Tai Yang as well as other entertainment and information channels like Astro Prima, Astro Oasis, Astro Awani, Astro AEC, Jia Yu, Astro Vanaavil, Makkal TV, CCTV4, Bernama TV, iView, i130, TVi, TV1 and TV2, and 20 radio channels through our DTH satellite TV platform with no monthly subscription fee. NJOI customers only need to make a one-time payment for the necessary equipment and installation charges to enjoy the channels offered. We launched a pre-paid service in July 2012 to allow NJOI customers to purchase additional premium content on a pre-paid basis. We believe that NJOI will further increase our market penetration by prOViding access to the non-subscription bound segment, and serving as a platform for us to sell subscription-based services. OTT services Taking advantage of the potential for OTT services driven by consumers’ preference for viewing content on multiple devices, we launched the Astro On-The-Go service in May 2012. With this service, customers are able to access our selected content through their smartphones, tablets and PCllaptops, while connected to any fixed or mobile broadband connection. Astro On-The-Go offers the following: • a selection of live sport matches and signature events or programmes;
• a selection of 11 linear TV channels across kids, news and entertainment;
• “Catch-up” and SVOD services for preViously aired signature programmes; and

109 7. BUSINESS OVERVIEW (cont’d) • “Pay-Per-View” offering TVOD and Astro First content. The services will be offered as a value-added bundle to our premium multi-room, Super Pack and Astro B.yond IPTV Super Pack subscribers while TVOD and Astro First are available on a pay-per­view basis to any customer. Going forward, we also intend to make available the Astro On-The-Go service for a fixed monthly subscription fee for non-pay-TV customers and those who do not subscribe to the multi-room, Super Pack or Astro B.yond IPTV Super Pack products. (v) Residential ARPU Residential ARPU is the monthly average revenue per residential pay-TV sUbscriber and does not include NJOI customers. Our Residential ARPU has increased from approximately RMB2 for the financial year ended 31 January 2010 to approximately RMB9 for the financial year ended 31 January 2012. For the six month For financial year ended 31 financial period January ended 31 July 2010 2011 2012 2012 Residential ARPU (RM) 82 85 ——sg 92 The base for our Residential ARPU is generated by our Basic Family package but is bolstered by our Mini, Prime, Plus and Premium packages and Super Packs, as well as our other value added services such as PVR, HD and Astro First. We have increased our HD channels offering from four channels in December 2009, when we first launched our HD services, to 22 channels as at 31 July 2012. The launch of the Super Packs in June 2011 has further increased the take up of our HD services. We further strengthened our Residential ARPU growth with the launch of Astro First, a pay-per­view movie product which offers both local and foreign theatrical movies, of which local movies are offered as early as two weeks after their theatrical releases. 7.5.1.3 Advertising sales We offer an opportunity for advertisers to associate with and advertise across some of the best global, regional and local content from around the world. The content spans multiple genres including drama, documentary, education and learning, general entertainment, kids, lifestyle, movie, news, reailty and sports. We offer our clients an unparalleled choice of targeted and contextual advertising opportunities. The share of Adex generated by TV was 36% of total media Adex revenue in Malaysia in 2011. In 2011, we had a 26% market share of the TV Adex in Malaysia. 7. BUSINESS OVERVIEW (cont’d) In order to continue increasing our share of TV Adexlairtime revenue, we intend to focus on promoting targeted and contextual advertising, and leveraging on our products with mass distribution for mass advertising. We anticipate that our different premium packages will offer our clients and advertisers a strong medium to target relevant and premium audiences. As we have close to one million Astro B.yond HD subscribers, our advertisers have the option of effectively targeting premium viewers for their advertising campaigns. Furthermore, our pay-TV services are packaged to target specific segments. We believe our new lifestyle-based products such as Astro On­The-Go and Stadiumastro will allow advertisers to target customers across different complementary platforms. In addition, we believe that products such as Astro Tutor TV will allow business with education-oriented products to target their Adex to a relevant audience base. Further, we anticipate that our NJOI service will give advertisers a chance to choose from a wide variety of 18 channels spread across different language segments to target the mass market, thereby providing a traditional mass market advertising option. The commercial terms of our advertising packages are based on the volume and duration of commitment of a particular advertiser. As at 31 July 2012, we have a TV advertising sales force of over 70 permanent staff. 7.5.1.4 TV content We create, aggregate and distribute content on multiple delivery platforms to cater to the needs and preferences of the multi-ethnic groups in Malaysia. During the financial year ended 31 January 2012, we produced approximately 8,000 hours of TV content. As at the LPD, we have produced or commissioned for production over 40,000 hours of TV content. As at 31 July 2012, we broadcast 156 TV channels, including 68 Astra-created and branded channels with 22 HD channels. We have also created our own series of Astra SuperSport channels showing popular international sports content such as the UEFA European Football Championship, German Bundesliga, Italian Serie A, BWF Badminton, NBA, Roland Garros (French Open), the FIFA World Cup and the Barclays Premier League (where a portion of the matches is broadcast on the ESPN and Star Sports channels). The remaining channels are from third parties, sourced from international, regional, sports and local content providers. As at the LPD, we have exclusive broadcasting rights in Malaysia to premium channels such as the National Geographic Channel, Disney Channel, Discovery Channel, AXN, ESPN and FOX Movies Premium. The contracts for such premium channels are due for renewals between 2012 and 2020. We are currently in the process of negotiating for the renewals for those contracts ending in 2012. The table below sets out our channels by type as at 31 JUly 2012: Channels by type  SO  HO  Total  Subscription channels  91  20  111  Pay-per-view channels  10  2  12  NVOD channels  22  0  22  Service reiated channels  2  0  2  Free-Io-air channels  6  0  6  Other local channels  3  0  3  Tolal  134  22  156
7. BUSINESS OVERVIEW (cont’d) We offer a mix of local, regional and international content spanning mUltiple genres such as drama, documentary, education and learning, general entertainment, kids, lifestyle, movie, news, reality and sports. Our segmented approach to content provides content with mass appeal, such as content for our Basic Family package and NJOI services, as well as premium content such as international sports, premium movies, HD and on demand content for the high Residential ARPU customers. Our segmented approach also includes targeting content to appeal to our younger audience who are typically multi-device users. In addition, we differentiate our content offering to include vernacular content to appeal to the different ethnic groups in Malaysia. Such content is available across multiple platforms, enhancing the viewing experience. Viewership share on our platforms for the three main ethnic groups during the financial years ended 31 January 2010,2011 and 2012 was as follows: Financial year ended 31 January Year  2010  2011  2012  %  %  %  All Malays Chinese Indians  70 57 65 93  70 56 67 94  71 61 67 93
Source: Nielsen Television Audience Measurement database based on viewers age six and above. Viewership share is based on viewership in Astro households of all channels (exclUding the free-to-air channels) versus viewership of free-Ie-air channels canted on the Astro seNice. To ensure we offer a compelling and relevant selection of content, we routinely assess new channels and review existing channels’ performance. The factors which we consider for any new channel acquisition and renewal of existing channels include channel performance, channel proposition and their relevance and fit for our customers, licence fees and bandwidth capacity. (i) Aggregating international and regional content As at 31 July 2012, we had a total of 46 international channels, including 12 HD channels. We have long-standing relationships with international content providers from whom we acquire the channels on a contractual basis. Fee structures range from a flat fee per annum to a variable fee on a per subscriber basis or a combination of both. Some of the popular international channels offered by us include CNBC, CNN, Discovery Channel, Disney Channel, FOX Movies Premium, HBO, History and the National Geographic Channel. We also broadcast an extensive collection of international and regional sports including, the Barclays Premier League, the UEFA Champions League, German Bundesliga, J. League (Japan), the AFC Champions League, Wimbledon, F1, NBA, Thomas & Uber Cup, COPA America, the FIFA World Cup, the UEFA European Football Championship, Olympics and Asian Games. We broadcast sports channels such as ESPN and Star Sports and also bundle sports content in our series of Astro SuperSport channels. As at 31 July 2012, we had a total of 15 sports channels, including three HD channels. 7. BUSINESS OVERVIEW (cont’d) (ii) In addition to international channels, we also have a selection of regional content and channels from Hong Kong, Taiwan, China, India, Indonesia, Korea and Japan in our content portfolio. These Asian channels and content appeal to the different ethnic groups in Malaysia and are procured from regional content providers such as TVB, CTi, CCTV, SUN TV, KBS and SBS. As at 31 July 2012, we had a total of 24 regional channels, including two HD channels. Many of our international and regional channels are offered in their respective original languages as well as with mUltiple subtitle options and multiple audio tracks to offer greater relevance to our customers. Producing local and vernacular content We aim to differentiate our content portfolio by producing or commissioning for production local and vernacular content targeted at the various ethnic groups in Malaysia. As at31 July 2012, we had 68 Astra-created and branded channels, including seven HD channels, to serve Malaysia’s three main ethnic groups, while our vernacular content is also tailored to meet the diverse multi-lingual needs of different customer segments. Going beyond the four primary languages in Malaysia comprising Bahasa Malaysia, English, Mandarin and Tamil, we also produce content in dialects such as Cantonese and Hokkien for our Chinese subscribers, and Hindi, Telegu and Malayalam for our Indian subscribers. For our Malay segment, we were the first in Malaysia to launch a 24/7 Islamic lifestyle channel, Astra Oasis, a 24/7 comedy channel, Astra Warna and an in-house produced and packaged Malay HD channel, Astra Mustika HD. For the Chinese segment, we launched the first 2417 Hokkien channel, Astro Hua Hee Dai and the first self-packaged 24/7 Chinese HD channel in Southeast Asia, Astra Zhi Zun HD. We also created the first 24/7 news channel in Malaysia, Astro Awani, and the first 2417 local sports channel in Malaysia, Astro Arena, to promote local sports. We believe Astra-created and branded channels have become a major source of TV entertainment for our subscribers. Astra Ria, Astra Prima, Astra Hua Hee Dai, Astro Wah Lai Tal, Astro AEC, Astra Vaanavil and Astro Vellithirai are among the top ten viewed channels in the households of each ethnic group that we broadcast to. Astra self-produced content, such as MasterChef Malaysia, Raja Lawak, and Astro Classic Golden Melody, have achieved a relatively high rating even when compared to some free-to-air content. 7. BUSINESS OVERVIEW (cont’d) The chart below sets forth the subscribers by ethnic groups.  top  ten  channels viewed  by  our  • •  A~rall6ed chanllels Tum.”””Gll,nnll< fTA””.”.;!>

Overall Source: IMR Report The tables below set forth our notable vernacular content (based on viewership and TV rating) for Malaysia’s three main ethnic groups for the financial years ended 31 January 2010, 2011 and 2012: Malay content intellectual property Programme  Genre and description  Highest viewership  TV ratingl11  ·000  Maharaja Lawak  Corned)’ reality show  1,035  15.5  Mega  across Malaysia,  Indonesia and Singapore  Imam Muds  Islamic reality show in  737  13.3  search of the new Imam  Kilausn Emss  Singing competition for  654  11.7  senior citizens  Tanah Kubur  Tales from grave-diggers  611  9.1
Chinese content intellectual property Programme Genre and description Highest viewership TV rating1t1 1000 Astra Classic Singing competition for 406 17.2 Golden Melody senior citizens Miss Astra Beauty pageant, with its 289 13.0 Chinese winner representing International Malaysia to compete in Pageant the Miss Chinese International Pageant Hua Hee The firsllocally-produced 275 11.8 Everyday Hokkien sitcom in Malaysia My New Village Documentary series of 259 11.4 Stories Chinese villages, cultures and heritage In Malaysia Malay Indian Chinese 7. BUSINESS OVERVIEW (cont’d) Indian content intellectual property Programme  Genre and description  Highest viewership  TV rating”)  ‘000  Vaanavil Super  Singing competition  343  26.2  Star  Aattam 100  Dance competition  284  21.9  Vagal  ThigH  Documentary on horror  201  13.9  and supernatural stories  in Malaysia  Viyarvai  Documentary of  145  10.0  community involved In  jobs such as cleaning  toilets and rubbish for a  living
Source: Nielsen Television Audience Measurement database. Note: (1) ATV viewership rating is the number of individuals tuning into a particular chennel or programme divided by the viewing univslSB by each respective segment comprising individuals aged six and above. Besides entertainment content, we produce or commission the production of educational content, which is broadcast through Astro Tutor TV, the first “exam preparation” channel in Malaysia. Astra Tutor TV UPSR, Astro Tutor TV PMR and Astro Tutor TV SPM are Malaysia’s exam preparation channels designed to help students prepare for Malaysia’s three major national exams. The content featured is based on Malaysia’s national curriculum, and is designed to help students study and prepare for exams in an enjoyable and interactive manner. These educational channels are available in most public schools via our partnership with the Ministry of Education, Malaysia. In addition to three Astro Tutor TV channels, we also offer educational content on Astro TVIQ for the Malay and English­speaking segment as well as Astro Xiao Tai Yang for the Chinese segment. For example, Oh My Englishl is a recently launched educational comedy on Astro TVIQ channel that aims to help Malaysians improve their conversational English in a fun manner. Happy Trilingual is another educational series on Astro Xiao Tai Yang that helps children learn Bahasa Malaysia, English and Mandarin. As at 31 July 2012, our educational content offerings were delivered over six channels in four languages comprising Bahasa Malaysia, English, Mandarin and Tamil. 7. BUSINESS OVERVIEW (cont’d) (iii) Talent pool We have actively cultivated, groomed and developed our own local in-house talent, who we believe will contribute to the quality of the content produced by us. Our local in-house talent comprises employees under permanent employment with our Group and contracted talents with our Group. As at the LPD, our Group has approximately 105 talents of whom approximately 35 are under permanent employment with us and approximately 70 are talents contracted directly with our Group. Our talents span across a variety of genres, including general entertainment, music, news and sports programming. Some of our in-house talent are as follows: Name Achievements
Mohamad Yazid Lim bin Mohamad Aziz (Johan) Aznil Hj Nawawi (Pak Nil) Nurul Elfira Loy binti Ahmad Sabri (Elfira Loy) Aaron Mustapha bin Aziz (Aaron Aziz) Fazira binti Wan Chek (Erra Fazira) Mohd Hafiz Suip (Hafiz)  bin  Mohd  Stracie (Stacy)  Angie  Anam  Tha Kien Ying
Gan Hwee Peng (Geraldine) Most popular male comedian, Anugerah Bintang Popular Berita Harian (“ABPBH”) 2011 Most popular male TV host, ABPBH 2003 to 2010 Best supporting actress, Anugerah Skrin 2010 Most popular artiste and most popular film actor, ABPBH 2011 Top five best actress in leading role, Asian TV Awards 2011 Most popular male singer, ABPBH 2011 Best new female artiste, ABPBH 2008 Most popular award, Million Star Taiwan 2011 Finalist, Million Star Taiwan 2011; Champion, Astra Star Quest 2011 7. BUSINESS OVERVIEW (cont’d)
We seek to identify, develop and promote our talent pool, including actors, singers, announcers and other performers, to maximise their career potential and marketability by providing airtime and exposure to new artistes on our various integrated media platforms. Some talents are identified and nurtured through our own talent search programmes such as Akademi Fantasia for Malay talent, Astro Star Quest for Chinese talent and Vannavil Super Star for Indian talent. We believe that supporting the career of popular Malaysian and Asian entertainers and thereby developing strong relationships with them will further enable us to develop and produce successful TV, film, radio and other content. In addition to our talent pool in the general entertainment space, we also have a line-up of TV hosts for our locally produced sports and news content. Some of our TV hosts and anchors in sports and news are as follows: Name Position/Achievements Jason Dasey Sports TV host and executive producer Peter Barnes Sports pundit, former international footballer Jayshini Menon Sports TV host Akbar Sahari Sports TV host for Astro Arena • Ashwad Ismail Broadcast journalist and news anchor, Special Jury Award, Anugerah Seri Angkasa 2010 and Best TV News Anchor, Anugerah Seri Angkasa 2010
Mohd Fadzrie Hazis News anchor, Best Sports Commentary (Electronic), Sportswriters Association of Malaysia (SAM)-100PLUS for 2011 •Syed Farradino Omar News anchor, Health Journalism Award -TV category, Ministry of Health 2011 • Zulhelmi zainal Azam Broadcast journalist, Best Special Report and Best Reporter, Sportswriters Association of Malaysia (SAM)-100PLUS 2010 As at 31 July 2012, we had apprOXimately 65 producers and directors to support our production requirements. 7. BUSINESS OVERVIEW (cont’d) (iv) In-house end-to-end production capabilities During the financial year ended 31 January 2012, we produced approximately 8,000 hours of 1V content. As at the LPD, we have produced or commissioned for production over 40,000 hours of 1V content. We provide approximately 15,000 hours of voice-over dUbbing and subtitling of over 25 languages in the financial year ended 31 January 2012. We have eight 1V production studios located across three different locations in the Klang Valley: • five digital 1V studios located at the MBC, four of which have been upgraded in 2011 to cater for the production of HD content;
• two HD studios operated by Astro Arena are located at an independently located self-sufficient facility that are predominantly used for production of local sports content; and
• a SD studio located at an independently located self­sufficient facility that is predominantly used for news production for the Astro Awani news channel and broadcast stations.

In addition, we have upgraded our facilities to position ourselves to meet the steadily increasing demand for HD content. Astro Productions has HD production facilities in Malaysia comprising three HD studio production facilities and two HD outside-broadcast production vehicles (outside-broadcast vans) providing fleXibility in how and where HD content is produced. Astro Productions is an end­to-end production service company comprising production, post production, graphics and visual effects, file delivery and storage. It has a trained and skilled workforce comprising, among others, camera operators, sound designers, lighting directors, floor management and electrical, engineering and technical management. Astro Productions also has a trained post production department carrying out, among others, video editing, audio post production, graphics and visual effects, audio dubbing, multimedia, systems engineering and production. We also extend our production services to third parties or collaborate with third parties by making avaiiable our production personnel and/or facilities to optimise utilisation rates. Examples of such arrangements include the first two seasons of Minute to Win it (in HD), Masterchef, Kamilah Bintang and Serasi Bersama. 7. BUSINESS OVERVIEW (cont’d) (v)
(vi)

Film entertainment Our film entertainment unit primarily has two roles within our Group. First, it complements our pay-TV business by providing additional movie content across various products and bundles including Astro First, premium movie packs, premium channels and our NJOI service. Second, it produces cinematic content which contributes to the development of and generates interest in the local film industry as well as cross-promoting our in-house talent. Film production and distribution is operated by Astro Shaw, which presents films produced by our three wholly-owned production houses: Tayangan Unggul, Nusantara Films and Karya Anggun. As at 31 JUly 2012, Astro Shaw had distributed over 50 foreign titles and, released 43 local titles. Astro Shaw is one of the biggest film studios in Malaysia and is well-regarded for the quality of its movies as evidenced by more than 20 awards from local and foreign film festivals. Astro Shaw’s films target younger audiences. Starting from 2010, Astro Shaw has expanded beyond Malay language films to include Tamil and Chinese (mainly Cantonese and Mandarin) titles. It has fonmed partnerships with producers and established companies in order to offer a variety of co-produced films. Astro Shaw’s most successful film, in terms of box office revenue, was Ombak Rindu, grossing the second highest box office collection in the history of Malaysian cinema amounting to RM10.9 million according to FINAS. During the financial year ended 31 January 2012, Astro Shaw released seven films with a total theatrical gross box office collection of RM16.0 million. Forming collaborations and content alliances We believe that our strategic content-focused alliances and co­productions with content partners internationally provide a global benchmark for the creation of high-quality entertainment with local preferences in mind. We have continued to expand our efforts in forming regional content joint ventures and partnerships to support our strategy of expanding our content capabilities, with regard to both origination and aggregation. We believe that these alliances with leading content providers in the region will enable us to expand our presence as a creator and distributor of content throughout Asia. Our joint venture with Endemol OpCo Holding BV through, Endemol Malaysia, provides us with access to a content catalogue which can be localised for the Malaysian market, and also provides us with know-how regarding the content creation process and potential opportunities to use world-wide content distribution networks to distribute some of our locally created formats to an international market. In addition, our joint venture alliance with NDTV Limited on our local Malaysian news content allows us to incorporate best practices for news production in the industry. 7. BUSINESS OVERVIEW (cont’d) 7.5.1.5 Sales and marketing (i) Distribution network We have a wide range of sales channels, targeting different customer segments, to increase effective market reach and promote cost efficiency in distribution. Our primary sales channels are through our direct sales, telemarketing and retailer networks. We regard our retailers as close business partners and invest in strengthening relationship with them by providing strong trade and marketing support programmes for premium retailers while continuing to develop new strategic partnerships. We plan to continue expanding and strengthening our brand presence to expand distribution coverage by establishing sales and service kiosks, which provide an additional avenue to showcase our services and products. In addition, we also plan to continue expanding the reach of our payment channels and improve accessibility by expanding electronic and online payment options in collaboration with relevant service providers to cater to customers’ needs for mobility and convenience. We believe such strategic efforts are important in acquiring new customers and retaining existing customers. Sales channel Description Our proprietary channels: Direct sales Approximately 800 direct sales personnel nationwide as at the LPD; direct sales efforts focus on high traffic areas such as hypermarkets, shopping malls, Malaysian carnivals, conventions and major events. Telemarketing A team of approximately 350 telemarketers as at the LPD, comprising both in-house telemarketers and those oulsourced from third-party telemarketing companies. IPTV specialist A team of in-house sales personnel specialising in IPTV service. Online A self-service cost-effective channel, offering convenience and hassle-free services to customers. Sales and service Plan to roll out by the end of 2012, targeting major kiosks cities, to strengthen brand presence and increase urban reach. Strategic partnerships: Retailer A network of approximately 1,000 retailers nationwide as at the LPD, including electrical and electronic retailers and telecommunication distributors who have their own networks of retail outlets. Reseller A team of resellers, tapping into their sales force for IPTVsales. Corporate strategic alliances with corporations to target partnerships customers efficiently, partiCUlarly for the urban customer segment. 7. BUSINESS OVERVIEW (cont’d) (ii) Sales channel  Description  Master distributor  Leveraging the readily available and extensive distribution network of master distributors {such as the telecommunication pre-paid distributors} for a cost-efficient distribution model.
Customer experience We are committed to providing the best customer experience to our customers. Our aim is to provide subscribers with easy accessibility, convenience and a seamless service experience. We continuously strive to enhance our service delivery to promote a higher level of customer advocacy. We have over 800,000 interactions with our customers each month, averaging three interactions per customer, per year relating to among others, installation matters, after-sales services, enquiries, requests, feedback and complaints via our major contact points. We manage our customer interaction in an optimal way that is aligned with our delivery processes and contact points to facilitate efficient management of customer service. As part of our commitment to exceed the service expectations of our customers, we have customer care on-boarding programmes during the first six months of their relationship with us. On an ongoing basis, service improvement initiatives are implemented to raise our service delivery levels at every customer interaction point. Quality standards are stringently set for all installation, upgrades, network management and technicai service. We employ trained professionals to facilitate and handle every customer interaction. We are in the process of implementing enterprise-wide sales automation and service integration platforms to achieve end-to-end visibility, faster sales facilitation, faster service turnaround, and a seamless experience to both our customers and business partners, including our retailers, installers and service providers. We are also in the process of improving installation and servicing processes to minimise inconvenience to our customers. In terms of prOViding information and promoting convenience, we have expanded the options available to our subscribers online, including new help forums and interactive tools. We plan to further improve customers’ online experiences through social media service support and more self-service features, such as bill enquiries, bill payments, and package upgrades. We value customer insights and gather qualitative and quantitative data on customer experience on key performance indicators to measure service levels and satisfaction rates. Customer feedback such as through our Voice of the Customer programme which includes surveys which are carried out periodically, is also an important source of information. 7. BUSINESS OVERVIEW (cont’d) (iii) Major contact points for customer interaction are as follows: • Our installers. We have a network of approximately 1,700 sub-contracted installers nationwide, who are trained and accredited by us to provide installation services to subscribers;
• Authorised after-sales service providers. We have three authorised third party after sales service providers with access to over 200 technicians to provide after-sales services to subscribers;
• Our customer service centres. We have 18 customer service centres which are located in major cities across Malaysia. Our customer service centres provide a range of services, such as billing enquiries and payments, new subscriptions and packages sign-up, technical support and other account enquiries. We plan to roll out the sales and service kiosks in major cities by ,’the end of 2012 to strengthen our brand presence and increase our urban reach;
• Our contact centres. We operate two contact centres located at Menara ICON and Capital Square, Kuala Lumpur which are available all-year round to handle customers’ enquiries, requests, feedback and complaints via telephone;
• Our website. Our customers can access our website as a self-service alternative to check their accounts, change packages, subscribe to new services and make bill payments; and
• Payment channels. We have a wide network of payment channels throughout Malaysia. Customers have the option of making payments through post offices, selected bank branches and ATMs, selected banks’ Internet payment portals, direct debit, our website, our contact centres, our customer service centres and third party electronic and mobile payment service providers.

Customer relationship management (UCRMU) We have a loyalty and rewards programme, the Astro Circle, which we plan to leverage on as one of the key vehicles for customer retention. Satisfying and enhancing customers’ experiences through various rewards and activities are the key charter for Astro Circle. The programme encompasses a wide variety of activities, including: • Rewards: Examples of rewards provided under the programme include giveaways of movie premiere tickets, access to events and other activities. We constantly reward our customers either directly or through collaboration and partnership, to provide vouchers, product trials and concert discounts; and 122 7. BUSINESS OVERVIEW (cont’d) • Experience events: We create and organise experience events catering to the diverse interests of our different customer segments, including: • exclusive meet-and-greet sessions with visiting artistes; and
• events for kids, such as Astro Xiao Tai Yang (our own children’s fun learning channel) school camps, workshops and talks.

To further enhance customer advocacy for our services and products, customer appreciation programmes are organised to engage them in educational entertainment, sports, healthy living and wellness events. Our CRM platform and analytics capability are enhanced by investments in our CRM platform, including our IT enterprise data warehouse and customer analytics tools. We recognise the importance of understanding our customers’ behaviour as we move towards more targeted marketing activities and loyalty programmes directed at customer growth and retention. These capabilities facilitate the use of customer segmentation analysis, allow us to provide differentiated customer retention propositions and enhance the effectiveness of our loyalty and retention programmes. (iv) Billing cycle The customers’ bills are typically generated on a monthiy basis. From the point of bill generation, a 30-day period is given to the customer to settle the outstanding amount, followed by a 15-day grace period, failing which we will disconnect their service. Payment reminders are done frequently via SMS, letters and outbound telephone calls. I Company No. 932533-V I 7. BUSINESS OVERVIEW (cont’d) 7.5.2 Radio business When we commenced operations in 1996, we operated five radio stations. We now broadcast 20 themed-music stations including nine commercial radio stations and 11 additional direct-to-user stations which are broadcast only on our DTH satellite TV, IPTV, mobile and Internet platforms across most of Malaysia. We were the first broadcaster to introduce format radio programming into the Malaysian market. Notwithstanding the emergence of meaningful competition from other channels, we have consolidated our market leadership in Malaysia, retaining the top position in terms of listenership in total radio channel market share as well as the top position across all the main language categories. According to the IMR Report, in April 2012, ERA, our Malay radio station, was the country’s largest and most popular radio network with approximately 5.0 million weekly listeners, while MY FM, our Chinese radio station, was the largest and most popular Chinese language network had approximately 2.7 million weekly listeners. In the Indian language market, THR Raaga was the largest and most popular Indian radio network with approximately 2.2 million weekly listeners, while Hitz.fm remained the largest and most popular English language network with approximately 2.2 million weekly listeners. According to the IMR Report, our radio stations collectively reached approximately 13 million weekly radio listeners in April 2012 capturing 52% share of listenership in Malaysia. For the three month financial period ended 30 April 2012, our share of radio Adex market in Malaysia was 53%. We continue to develop new initiatives to develop listenership in line with consumers’ rising income levels in all key market sectors. Each radio station’s programming is targeted at a particular demographic group and the programming is formatted through frequent research of the target audience and implementing the findings through disciplined programming principles. Each of our radio stations is individually branded, marketed and programmed to appeal to specific demographic groups and market segments. We believe that this segmentation generates listener loyalty, a higher level of listener interaction and offers advertisers a more targeted reach to the intended market segments. In Malaysia, 92.0% of individuals aged 10 years old and above listen to the radio. According to the IMR Report, in 2009, 2010, 2011 and April 2012, our share of listenership in the Malaysian radio market was 54%, 52%, 50% and 52%, respectively. Total Adex on radio grew from RM195 million in 2007 to RM346 million in 2011, representing a CAGR of 15%. Moving forward, the IMR Report forecast a CAGR of 8% between 2011 to 2016. We believe that the growth in radio Adex reflects the potential for further growth as compared to other regional advertising markets. The following table sets forth our competitors’ position in the Malaysian radio market based on radio Adex share for each of the financial years ended 31 January 2010, 2011 and 2012 and the three month financial period ended 30 April 2012 based on the IMR Report: Three month financial period Financial year ended 31 January ended 30 April 2010 2011 2012 2012 Astro Radio –~~57~’10~ 52% 53% 53% Radio Televisyen Malaysia (“RTM”) 6% 5% 5% 5%
Media Prima Berhad (“Media Prima”) 21% 24% 21% 27% Star Rfm Sdn Bhd (“Star Rfm”) 16% 19% 21% 15% Total 100% 100% 100% 100% 7. BUSINESS OVERVIEW (cont’d) We own a fUlly digitalised and extensive radio distribution platform with Internet websites, allowing media bundling of on-air, online, mobile and on-ground advertising. We also provide interactive online content sponsorship, which includes information on artistes, details of upcoming concerts, promotions, downloadable content and contests. This has resulted in an increase in Internet traffic to our radio websites from approximately 81 million page views as at 31 January 2010 to approximately 104 million page views as at 31 January 2012. In addition, we continue to provide an array of on-ground event entertainment throughout the year to complement our on-air and online advertising, capitalising on convergence and bundling opportunities. We seek to capitalise on our mUltiple delivery platforms and popular media personalities and programmes in one medium to increase audience share in another medium. Currently, Astro Radio’s radio stations serve as key outlets for promoting many of our TV programmes including Mania (Malay) and Astro Talent Quest (Chinese) which are among Malaysia’s most popular TV shows. Astro Radio provides technical, programming, sales integration, marketing and management services for the radio stations, via MEASAT Radio Communications, Maestra Broadcast, Radio Lebuhraya and Perfect Excellence Waves. Since 1995, Astro Radio has worked with Austereo Group Limited, Australia’s leading radio group, and maintains its relationship with Southern Cross Austereo which was formed pursuant to the merger between Southern Cross Media Group and Austereo Group. 7.5.2.1 Content We believe that the primary strength of Astro Radio is the ability to aggregate local content that is relevant to its listeners and the ability to further dissect this into various demographics as well as personality, values, attitudes, interests, or lifestyles. In addition, given the nature of the radio industry, which provides a better potential return in relation to TV due to its relatively lower costs, radio is a platform which is sought after as a value-effective proposition by advertisers. According to the IMR Report, Astro Radio’s nine radio stations had a combined reach of approximately 13 million weekly radio listeners in April 2012, capturing 52% share of listenership in Malaysia. For the three month financial period ended 30 April 2012, our share of radio Adex market in Malaysia was 53%. The following are our commercial stations and programming formats: Target audience Weekly Adex Station age Format Language audience(1J Website share(2) years million % ERA 18-34 Adult contemporary Malay 5.0 era.fm 7 Sinar FM 35-49 Malay retro tunes Malay 4.8 sinar.fm 10 THR.fm 18·39 Adult contemporary TamiVMalay 2.2 raaga.thr.fm 4 Raaga THR.fm Gegar 18-39 Adult contemporary TamiVMalay 1.7 gegar.thr.fm 2 MYFM 18-34 Adult contemporary Mandarin, 2.7 my.com.my 13 Cantonese Hitz.fm 10·29 Top 40 English 2.2 hltz.fm 10 MixFM 25-39 Adult contemporary English 0.6 mix.fin 4 Lite FM 35-49 Easy listening English 0.4 Iitefm.com.my 2XFM(3) .(4)18-39 By teens for teens of Malay 0.2 xfm.com.my latest music MelodY”) 35-49 Easy listening Mandarin, melody.com.my Cantonese 7. BUSINESS OVERVIEW (cont’d) Notes: (1) In Apnl 2012. As/ro Radio’s totai listenership was approximateiy 13 million afler adjusting for overlaps In listeners across the Astra Radio stations above.
(2) For the three month financial period ended 30 April 2012.
(3) XFM wes discontinued on 9 July 2012.
(4) Less then 1%.
(5) Melody commenced test transmission on 9 July 2012 and was officially launched on~ airon 15August2012.

Souroe: iMR Report, Astro Radio Astra Radio currently broadcasts its nine FM stations in 16 locations and their surrounding areas namely Klang Valley, Alor Setar, Langkawi Island, Penang Island, Ipoh, Tapah, Seremban, Melaka, Johor Bahru, Taiping, Kuantan, Kuala Trengganu, Kota Bahru, Kuching, Kota Kinabalu and Miri. The 11 direct-to-user radio stations that are broadcast on our DTH satellite TV and IPTV platforms are as follows: Channel name Description India Beat Hindi and Tamil pop and movie music Golden Oldies Good times and great oldies
Jazz Best of Jazz from over 80 years and from all over the world Opus Fine classical music Rock Legendary rock music Osai Southern Indian channel with Tamil music Bayu Indigenous music catered to Sabah Kenyalang Indigenous music catered to Sarawak Nasional FM National radio station operated by RTM Sabah V FM RTM station operating in Sabah WaiFM RTM station operating in Kuching 7.5.2.2 Radio talent pool We have actively developed our own radio hosts, who we believe contribute to the quality of our in-house radio content production. Almost all of our radio hosts appear exclusively on our radio programming across a variety of genres, including general entertainment, music, news and ·sports programming. Some of our radio hosts include the following: Name Position
JJ &Ean Salih Yaccob, Raja Azura & Kharil Rashid Jack Lim, Gan Mel Yan & Jeff Chin Johan, Haniff & Ray Hosts of hitz.fm Morning Crew, Malaysia’s No.1 English Breakfast ShOW{1}. Hosts of SINAR Pagi, the No.1 Breakfast Show for Iisteners(1), aged 30 years and above. Hosts of MY FM Breakfast Show, the No.1 Chinese Breakfast Show in the country(1). Hosts of JoHaRa Pagi ERA, the No.1 Breakfast Show in Malaysia(1). 7. BUSINESS OVERVIEW (cont’d) Name Position
Jin hilz.fm announcer, winner of the Funniest Video Of The Year al Dig; VVWWOW Inlernel For All Awards 2012. Note: (1) Source: Nielsen Redio Audjence Measurement SUNSy #1 2012. 7.5.2.3 Advertising sales and integration Astro Radio’s primary revenue source is from airtime sales on our nine commercial FM stations. This revenue is enhanced by the sale of integrated promotions to clients in the form of on-air, on-the street and on-line campaigns. Astro Radio’s sales philosophy is predicated on solution provision through the understanding of the clientele to create tailored campaigns focused on specific target markets and/or platforms. As pioneers of full format radio in Malaysia and with a history dating back to 1997, Astro Radio is recognised as the market leader with products positioned at premium advertising rates within the market. We believe that our format-specific programming strategy gives advertisers the ability to place their advertisements on the stations which provide the greatest exposure to the particular market segments they wish to target, maximising their advertising’s effect and efficiency. The integration of on-air advertising schedules with other promotions available through Astro Radio is also intended to add to the effectiveness of the advertising. Advertisers can purchase advertising space by choosing a particular time slot or commit to buy a minimum amount of airtime over a period. Advertisers can also sponsor a particular programme, which provides the added value of concurrent on-air, online, ground activity and mobile technology platform advertising. The advertising rate pricing methodology is based on cost per thousand, which is dependent on a combination of listenership, advertising rate and demand (based on the medium of radio, station, target market, language, genre and time of day). The primary objective is to generate high-yield advertisement sales by increasing and balancing two measures: fill rates (calculated as a percentage of available airtime sold over total available airtime) and AUR. With a suite of nine stations, part of our strategy is to offer the market specific combinations of multiple stations. This is intended to offer stronger market penetration for advertisers and increase the aggregate demand for Astro Radio. Astro Radio’s ability to direct advertising demand across its network of stations is key in maximising fill rates and AUR. We believe we have been successful in managing our fill rates across all nine stations with an increase of 26% in total fill rates over the six month financial period ended 31 July 2012 as compared to the same period in the last financial year. Astro Radio has the strategic advantage of being able to offer the market locally-based advertising to regional areas such as Central, Northern and Southern Peninsula Malaysia and East Malaysia, and specific content to regional areas in Sabah and Sarawak. At present, regionally sourced revenue account for approximately 10% of Astro Radio’s total revenue for the financial year ended 31 January 2012. 127 7. BUSINESS OVERVIEW (cont’d) 7.5.2.4 Astro Radio Interactive Astro Radio Interactive is the division responsible for the creation and development of the radio websites in Malaysia with a combined reach of 104 million page views, equivaient to 16 million unique visitors to the websites over the financial year ended 31 January 2012. The Astro Radio Interactive team believes it had made content available to Astro On-The-Go users 2417, building radio communities across multiple platforms. At present, Astro Radio’s broadcasts can be received via the online DVR player, smart phone applications and tablet applications. Astro Radio Interactive was the first within our Group to launch mobile applications on the iOS platform in September 2009 and won the “inOvation Malaysia 2009 -Best In Mobility Applications & Services” award for its product. As at the LPD, we have approximately three million listeners across our online and mobile platforms. In 2010 and 2011, Astro Radio Interactive launched its suite of applications on the Symbian and BlackBerry platforms and followed these launches with the launch of its Android application in 2012. We believe Astro Radio Interactive’s advertising proposition of selling bundled advertising space on the radio, Internet and mobile platforms to the local market is the first of its kind in Malaysia and has been well-received by both national and multinational advertisers. New listening platforms also offer more interaction opportunities for consumers, opening up new channels of communication for advertisers. Astro Radio’s availability across multiple platforms is intended to allow advertisers to target consumers in more listening occasions, places and mindsets. As digital media quickly evolves, radio-related content is becoming increasingly visual. Consequently, Astro Radio Interactive’s video strategy offers what we believe are powerful new marketing opportunities for clients, such as, a range of innovative video sponsorship packages combining a 15­second pre-roll advertisement (a video advertisement played before a video content) with a video content. Astro Radio Interactive employs social media, with fan pages for all stations on Facebook, Twitter profiles and YouTube channels. These provide interaction and engagement opportunities with loyai fans and client integration prospects, which are tailored to fit the personal nature of social media. Astro Radio Interactive contributed RM12.0 million in revenue on a pro forma basis for the financial year ended 31 January 2012 and continues to grow as it provides integrated solutions for clients across on-air, online, mobile and social media channels. 7. BUSINESS OVERVIEW (cont’d) 7.5.3 Publications business Through Astra Publications, we currently publish seven pUblications, including our TV viewing guide AstroView, which complements our TV business. Published in three languages, AstroView is Malaysia’s most widely circulated magazine with a circulation of approximately six million in 2010. AstroView contains comprehensive TV listings for all Astra channels, as well as certain entertainment news and programme highlights. There are four different editions of AstroView in circulation: editions in three different languages and a Traveller edition for commercial establishments. We plan to increase the magazine’s content by covering areas such as local sports news. In addition to AstroView, we also publish other magazines with a combined circulation of approximately 1.7 million in 2010. The following table lists some of our commercial publications as at the LPD. Title of publication Language Description InTrend Bahasa Malaysia Celebrity-focused beauty and fashion magazine men’s uno Chinese Men’s magazine on style and culture iFEEL Chinese Chinese teen magazine in Malaysia FourFourTwo English In-depth coverage offootball FHM English Men’s lifestyle magazine Styie English Chic and elegant fashion magazine Although our pUblication business does not generate a significant portion of our advertising revenue, it allows us to provide an option for advertisers to advertise by print media and thereby forming an important part of our strategy of providing an integrated media advertisement solution to our advertisers. 7.5.4 Digital services business Astra Digital develops and manages online and mobile portals to provide sports, entertainment and other key content to online audiences. In addition to our use of Internet to distribute our TV and radio programmes, we aiso aggregate digital content to extend our engagement with local audiences. We strive to reflect forthcoming consumption trends on our numerous digital portals. We have built a strong overall online offering that brings our content to the digital space. Our official website serves as an infomnational guide to TV, highlights a suite of web portais built to complement the initiatives of our various channels, and proVides online catch-up videos for selected shows that are provided on these channels. Our digital content includes the latest news and sporting results, behind­the-scene and special features, programme highlights and social integration. Our website also provides a variety of self-service functionalities to customers, such as a comprehensive knowiedge base for troubleshooting, new sign ups, change of TV packages, view payment and bill payment information. 7. BUSINESS OVERVIEW (cont’d) We have several dedicated web portals that focus on key content genres, such as our one-stop online sports web portal, Stadiumastro. Stadiumastro brings together selected content from the various sports channels that we broadcast and adds editorial content including news, sports results, statistics and commentaries. For entertainment content, we have used web portals for specific programmes like Mania, Tutor TV and Maharaja Lawak which offer exclusive behind-the-scenes videos, photo galleries, social media integration, blog articles and interactive activities like voting, polls and chats. Recently, we launched a dedicated Malay entertainment portal which brings together not just programmes but also general entertainment news, gossip and more from around Malaysia. We are pursuing an aggressive digital mobile strategy that is aimed to create applications that are rich, engaging and useful. Specific mobile applications like Mania and Stadiumastro complement our respective online counterparts while adding a layer of mobile-centric capabilities where the viewer will be able to interact with the TV show using mobile device to participate in voting and chatrooms. We are also using mobile applications as a way to create beller content discovery through our Astra Guide application, which offers users remote access to the TV guide and the ability to set their PVR to record a programme via their phone. We expect that the benefits of our digital services will come from driving customer satisfaction with content that will increase our TV viewership and radio listenership. Additionally, our digital media platform provides us with another medium for advertisements, forming part of our integrated media advertisement offering strategy. Furthermore, we expect digital services to become an increasingly relevant and important part of our multimedia advertising offering. 7.6 Technology We use technology as an enabler for us to deliver high quality and efficient service to our customers. Our technical assets include: • Broadcasting and production infrastructure that enable us to produce, acquire, process, playout and distribute our TV content to our customers via different distribution platforms (“TV Infrastructure”);
• Satellites and transponders for the broadcast of DTH satellite TV across Malaysia and Brunei (“Satellite and Transponders”);
• Our radio infrastructure for the production and transmission of our radio stations (“Radio Infrastructure”)
• Technical facilities that house our platforms and systems needed to run our business (“Technical Facilities”); and
• Back-end and operational systems that allow us to acquire customers, provide customer service throughout the customer life cycle, perform billing and collection, and manage both internal and external facing operations efficiently (“IT Infrastructure”).

7. BUSINESS OVERVIEW (cont’d) We have spent RM1,248.2 million over the financial years ended 31 January 2010, 2011 and 2012 upgrading our technology assets (not including cost relating to leasing of satellite transponders), to ensure that we have the necessary capability and flexibility to execute our business strategies. These investments have enabled our platform agnostic distribution strategy, allowing us to continue to leverage on economies of scale and access the reach advantages of a DTH satellite TV platform while expanding our services to existing and new customers over fixed and wireless broadband networks. 7.6.1 TV Infrastructure Our digital broadcasting infrastructure conforms fully to the standards set by the European Digital Video Broadcasting Group and the European Telecommunications Standards Institute for digital satellite broadcasting. Our TV services comprise three types of channels: • Direct pass through channels -free-to-air and international channels that are received, digitalised and retransmitted by us without any further modification to the content;
• Content controlled channels -international channels that are received, digitalised, delayed and edited for content compliance purpose before being retransmitted to our customers; and
• Local playout channels -channels fully packaged and originated by us from our broadcast centres.

We follow the following process to distribute these channels to customers via satellite and IPTV: • Step 1 -the content is acquired and received through various means. International and free-to-air channels are received through a mixture of C-band satellite downlink and dedicated fibre link. Content for local playout channels is received in the form of digital video tapes or digital files.
• Step 2 -the content is processed and converted into digital format and routed through the relevant part of the broadcast centre for further processing. The feed for the content controlled channels will be routed to the content control system for compliance editing and replacement of foreign commercials, while the pass through channels are retransmitted without any further editing.
• Step 3 -the content for the local playout channels is scheduled and played out locally from both AABC and CBC.
• Step 4 -the content for all three types of channels is compressed to optimise bandwidth utilisation. The content is also encrypted to limit viewing to customers who have subscribed to the service.
• Step 5 -for satellite service, the content is converted into a Ku-band signal and transmitted to the satellites. For IPTV service, the content is converted into an IP stream and distributed through a managed IP network.

7. BUSINESS OVERVIEW (cont’d) • Step 6 -the content is received by the customer either through a satellite dish that is eO-centimetres in diameter mounted outside of their home or through a broadband connection. Our set-top box is connected to the satellite dish by a coaxial cable or to the broadband connection directly by an ethernet cable. The set-top box includes a smart card-based conditional access system which decodes the satellite or IPTV signal into video and audio output to a TV for display. All the steps above take place at both the AABC and CBC which have similar broadcast infrastructure designs. These steps are elaborated in further detail in the following sections. (I) Content acquisition The content acquired by us is received through various means. The direct pass through and content controlled channels are received mainly from other C-band satellites via our TV receive only (“TVRO”) dish farm. The TVRO dish farm consists of an array of receiving satellite dishes that point to nearly all satellites visible from Kuala Lumpur. Both AABC and CBC also have multi­beam antennas that are able to receive signals from mUltiple satellites via a’ single antenna compared to normal TVRO which is one-to-one. The local free-to-air channels where we retransmit are received via fibre and terrestrial UHF signal. The majority of the content for the local playout channels and VOO comes in through digital video tapes or data files transported via Internet or digital storage medium, with occasional live feeds coming in via satellite, IP or microwave link. (ii) Content processing The incoming line processing systems are the first point of conversion of the RF signals coming through the TVRO dish farm to a video/audio signal. This is where the incoming signal is corrected for any signal level errors and then converted into a digital format (SO or HO) and further distributed in the broadcast centres for recording or further processing. The content controlled channels are routed through our bespoke non-linear editing suite to allow compliance editing and removal of foreign commercials in accordance with the Malaysian censorship guideline. The system also enables the insertion of local advertisement and promotions on to the live incoming channels. The system can be operated with a variable delay between 1 to 120 minutes. For content that we receive via digital video tapes and In digital file format, all tapes or files are converted into digital file format to facilitate further processing and editing. We have continued to migrate our legacy content stored on digital video tape into digital video/audio files format that can be stored in a hard disk (nearline) and data tape based storage system (deep archive). The near-line storage is available for programmes that are near transmission, while other content is stored in a deep archive. The content in the deep archive storage systems is constantly being mirrored across both broadcast centres for business continuity purpose. 132 7. BUSINESS OVERVIEW (cont’d) (iii) Content playout The local playout channels are fully packaged locally and played out for broadcast directly from our broadcast centres. Content for these channels are stored on large volume broadcast video servers. Based on the programme schedule, the playout automation system will play out the right content from the video server at per specified time. The system is fUlly redundant with main/back up automation systems and video servers. (Iv) Content compression and protection (headend) For pay-TV service, all three types of channels are finally routed to the headend systems. The headend comprises the compression and encoding systems which compresses the video/audio signals using MPEG2 and MPEG4 compression technology. This process is able to compress a very large size video signal required in production and editing into a much smaller and efficient signal in order to optimise the viewing quality and the number of channels that the signal can transmit via both the satellite and IP delivery network. At the same time when the signal is being compressed, it is encrypted to ensure it can only be decoded by authorised set-top-boxes/smart cards. The encryption is done at the headend using industry standard conditional access technology where the final encrypted signal is then distributed to both the high power amplifiers for satellite distribution and the IP encapsulator for IPTV distribution. (v) Content transmission
For satellite service, the encrypted signals are routed to the uplink and high power antenna system. The signal is further modulated into DVB-S2 format, amplified and upconverted to Ku-band frequencies. These amplified signals are then uplink to MEASAT-3 and MEASAT-3A via a 13 metre antenna. The system is fUlly redundant at all stages including a backup 13 metre antenna. For IPTV service, the same signals from the headend are routed to the IP encapsulation system, where the signals are converted into IP form for distribution to a managed IP network.
(vi) Multi platform content distribution

For satellite service, we utilise 11 high-powered Ku-band transponders on the MEASAT-3 and six high-powered Ku-band transponders on the MEASAT-3A to transmit our signal across Malaysia and Brunei. Customers are able to receive our DTH satellite TV service via a 60cm satellite dish that is 60-centimetres in diameter mounted at each customer’s location or our IPTV service through a broadband connection. Our set-top box (with a smart card) can be used to decode the services delivered from the distribution platforms. (vii) Set-top box Our Astro B.yond set-top box supplied to each customer receives and decodes our encrypted signal. Multiple manufacturers produce our set-top boxes in accordance with our specifications. Our set-top boxes are installed with middleware software, which supports an intuitive interactive TV experience and CAS decryption, which is used to protect and encrypt all content delivered to the set-top boxes through our network. 133 7. BUSINESS OVERVIEW (cont’d) (viii) Our set-top boxes are “Tribrid set-top boxes” and have three modes for accessing our services: • DTH mode -connecting via a satellite dish to the signal from our satellite network;
• IPTV mode -connecting to our IPTV service via the IP managed network; and
• Broadband mode -connecting to our servers over any broadband connection (fixed or wireless) connected to the set-top-box.

Our Astro B.yond set-top boxes currently operate in three modes, DTH only mode, DTH + broadband hybrid mode, and IPTV + broadband hybrid mode. We plan to enable any Astro B.yond set-top box to operate in “Tribrid” mode, capable of switching seamlessly across DTH, IPTV and broadband connections by the end of 2012. Currently we offer two types of HD set-top boxes to our customers -the Astro B.yond set-top box and the Astro B.yond PVR set-top box. The Astro B.yond PVR enables customers to record two programmes simultaneously to an internal hard disk drive (“HOD”) while watching either one of the programmes or playing back pre-recorded content. The Astro B.yond set-top box is a PVR ready device capable of supporting an external HDD which would convert the Astro B.yond set-top box into a Astro B.yond PVR. Astro B.yond PVR supports VOD services whereby content can be downloaded to the set-top box’s HDD. In addition, the resident software in the set-top box is embedded with an HTML browser to run IP based interactive applications. We plan to deploy a next generation Astro B.yond PVR in the first quarter of 2013 which will have built-in WiFi to ease the connectivity between the set­top box and broadband modem. VOD and OTT delivery infrastructure Capitalising on our core broadcast infrastructure, we have invested in technologies that allow us to deliver IP based services OTT via any Internet connection in addition to the traditional linear pay-TV service. Our broadband-based on-demand service delivers video downloads to any Internet connected Astro B.yond set-top box, and Astro On-The-Go provides live channels and on demand streaming to PCs/laptops, mobiles and tablets. We offer VOD via progressive download to any broadband connected Astro B.yond PVR. Content is handled as a digital file and hosted on a content management system (“eMS”) until a viewer selects to watch it. When a user chooses an on-demand programme to download, the CMS starts downloading the programme to the user’s HDD. As soon as there is enough of the programme downloaded to the HDD to ensure continuous viewing until the end of the programme, the user can start watching the programme. On a high-speed connection (e.g. more than 4Mbps), viewing can start almost instantly. For slower connections, progressive download ensures a quality viewing experience for any customer without buffering or stuttering views. Astro B.yond VOD is protected using the same smart card based CAS as our broadcast channels delivered over satellite and IPTV. 134 7. BUSINESS OVERVIEW (cont’d) For Astro On-The-Go and on delivery, we use a different headend system. For on content, both on demand and linear TV channels, we take the programme files and streams generated for Astro B.yond and compress them using MPEG4 technology with different resolution and bit-rate profiles that cater for viewing on devices such as PCs, tablets and smartphones which require lower bitrate and screen size as compared to TV screens. on content is protected via industry standard digital rights management (“DRM”) technology to allow secure distribution over any Internet connection. The final DRM protected signal is then distributed to the Internet via a third party content distribution network provider. (ix) Overall station wide monitoring In line with our dedication to provide a high standard of customer experience, we have stringent requirements for making our broadcast infrastructure available at all times. System health checks and video/audio quality monitoring probes have been instituted at critical points of the entire broadcasting chain to allow non-stop monitoring and rectification of system errors before such errors lead to a service outage which impacts customers’ viewing experience. The operations of the TV infrastructure are monitored and managed from our Master Control Rooms at MBC and CBC, which are staffed 24/7. 7.6.2 Satellite and Transponders We use 11 high-powered Ku-band transponders on MEASAT-3 and six high-powered Ku-band transponders on MEASAT-3A to transmit our signal across Malaysia and Brunei. MEASAT-3 and MEASAT-3A are owned by MSS. The number of TV and radio channels that can be broadcasted to subscribers is dictated by the amount of capacity available on the Ku-band transponders. We have the capacity to broadcast up to 179 TV channels, including 36 HD channels, over our DTH satellite TV platform through MEASAT-3 and MEASAT-3A. MEASAT-3 was launched into orbit in December 2006 at 91.5 degrees east. MEASAT-3 commenced commercial service in February 2007 and has a design lifetime of 15 years. MEASAT-3A, which has a design lifetime of 15 years, commenced commercial service in July 2009 and is co-located at the same orbital slot as MEASAT-3. Both satellites are controlled from the Measat Teleport and Broadcast Centre located in Cyberjaya, in the same facility as CBC. A back-up satellite control facility is located at MBC. MEASAT-3B is expected to commence commercial operation in 2014 and will have 18 transponders. Once MEASAT-3B commences its full commercial service, we expect to be able to expand our broadcasting capacity to a projected maximum capacity of 180 SD and 102 HD channels from the current capacity of 179 channels (including 36 HD channels) as at the LPD. 7.6.3 Radio Infrastructure Astro Radio currentiy broadcasts nine FM formats and 11 satellite radio channels from state of the art digital broadcasting facility in MBC. Astro Radio’s operations, including content programming, commercial production, news production and digital audio broadcasting are primarily accomplished from MBC. The MBC facilities include 13 on-air studios, eight production suites, four news stUdios, three voice track studios, one news gathering area and five equipment rooms for its digital audio distributions and FM transmissions. Astro Radio also has four on-air studios, two production suites and one equipment room in Kuching and Kota Kinabalu to leverage on localisation and its presence in those regions. 135 7. BUSINESS OVERVIEW (cont’d) Astro Radio broadcasts to Northern (Kedah, Penang and Perak), Central (Klang Valley, Selangor and Negeri Sembilan), Southern (Melaka and Johor Bahru) and the East Coast of Malaysia (Kelantan, Terengganu and Pahang) to allow for content and commercial localisation. Astro Radio currently has 16 transmission sites with 107 live transmitters in Malaysia. It plans to expand its broadcasting coverage in East Malaysia by increasing the number of transmission sites in East Malaysia. 7.6.4 Technical Facilities Our main technical facilities include our two broadcasting centres and two data centers. The facilities offer us room for expansion and business continuity via redundancy. There are also several smaller locations that include production studios and editing facilities, such as Astro Arena and Astro Awani, or smaller IT infrastructure locations. We operate our broadcasting services in facilities located outside of Kuala Lumpur’s city centre. The AABC is located at Bukit Jalil, and it also serves as our corporate headquarters. CBC is located in Cyberjaya, 20 kilometres away from the AABC. Both broadcast centres are end-to-end digital broadcasting facilities with acquisition, playout and distribution capabilities. In addition, AABC also houses TV production (including five studios) and post-production facilities, as well as the majority of our radio operations. Both the AABC and CBC are connected via diversely routed fibre optic cables, enabling distribution to be shifted between the two facilities as and when needed. For example, if excessive rainfall at one facility inhibits the satellite signal uplink ability at one facility, we can transfer 100 per cent of our channel uplink to the other facility. Our IT infrastructure is hosted across two different data centres located approximately 20 kilometres apart, with one situated at the AABC and the other in Taman Tun Dr Ismail, Kuala Lumpur. The data centres are connected through a fUlly redundant, high-capacity data link. There is also significant technical setup located in Menara Icon, Kuala Lumpur and Wisma Ali Bawal, Petaling Jaya hosting the operations for call centre, telemarketing and local sports programme production. All critical IT systems are built with redundancy, split across both data centres with data replication performed in real-time between the facilities. During critical failure or degraded service scenario, we are expected to be able to switch to the redundant site or system to allow operations to continue almost seamlessly. The disaster recovery switchover process is rehearsed on a quarterly basis to ensure all personnel involved are fully trained and are able to support a real­life recovery situation. The technical facilities are equipped with full emergency backup power generating equipment and uninterruptible power supply to allow operations to continue without disruption in the event of a power failure. As at the LPD, we have not experienced any significant failure of our entire network. 7.6.5 IT Infrastructure We invest significantly in our IT infrastructure in order to ensure that we can continually improve service to our customers whilst at the same time grow our business aggressively by having capabilities that are ahead of our competitors. Internally, we place significant focus on improving our operational efficiency in order to improve the overall cost. 7. BUSINESS OVERVIEW (cont’d) 7.6.5.1 Customer care and billing system We successfully upgraded our customer management system in November 2010, delivering improved data reliability and better flexibility and scalability for supporting new marketing campaigns, pricing and packaging and product offerings. This single integrated system is being used by more than 1,500 end-users across multipie locations nationwide to perform all types of customer related operations. These include product management, customer acquisition, customer relationship management, order logistics and fulfilment, after sales support and all other aspects of the customer life cycle. Billing and collections are also being performed using the same system along with all the necessary sUbscription revenue management. We generate more than 100,000 customer bills on a daily basis. Further enhancements to this platform will be implemented during the financial year ending 31 January 2013 to deliver increased functionality and additional efficiency gains such as improving the end-to-end fulfilment and inventory management process in order to better manage complex new lines of business such as IPTV. Further capabilities will be Introduced in the areas at customer and partner self-service, partner management, workforce management, service level management and advanced pre-paid services. 7.6.5.2 MUlti-channel customer service We have implemented a strategy to offer multi-channel customer service capabilities to end customers and partners. We are able to serve our customers through various means such as telephony, web self-service, online chat, email, SMS and a self-service portal on the set-top box. These capabilities allow customers and partners (e.g. installers, retailers) to have their sales and service needs fulfilled through the method most convenient to them. These capabilities are being enhanced on a continuous basis with further web self-service and mobile applications to be implemented in the near future. 7.6.5.3 Online and digital platforms We operate more than 40 different web sites and mobile applications to allow our customers and general users to access to our TV, radio and publication content online through PCs, laptops, tablets and mobile devices. The majority of the customer facing sites and applications are being hosted by one of the major global cloud service providers, ensuring flexibility to economically scale our services while maintaining high performance. Applications handling confidential customer transactions are hosted internally in our IT data centres. To ensure we continue to deliver the highest possible customer experience, critical sites and applications are built with full redundancy. 7. BUSINESS OVERVIEW (cont’d) 7.6.5.4 Infonnation management programme As we pursue our segmentation strategy, customer insight and analysis are becoming increasingly critical. As a result, we have recently commenced a programme to improve our information management capability. This has included the development of an enterprise data warehouse integrating all data into a common database against which reporting and analysis is conducted. This consolidation ensures a single version of the relevant data and information for all customer insight and reporting. We intend to continue to enhance the data analytics capability of the system, and to integrate our insights into the operational tools and processes at every cost efficient opportunity. 7.6.5.5 IT security We place significant importance on system security and the confidentiality of customer and corporate infonmation. We were certified as ISO/lEC27001 Infonmation Security Management System (ISMS) (“ISO 27001”) compliant in July 2010. In December 2011, we were also certified as fully compliant with the Payment Card Industry Data Security Standard (“PCI-OSS”). Both ISO 27001 and PCI-DSS are intended to provide assurance that confidential customer and corporate information stored within our IT systems is securely protected. We have proactively implemented changes to key customer related systems to ensure compliance with the new Personal Data Protection Act, 2010, which is expected to come into force in the near future. 7.7 Competition 7.7.1 TV There are two free-to-air operators, Media Prima and RTM with six channels between them, which compete with us for viewership and advertising revenue. Media Prima is one of the largest integrated media groups in Malaysia, operating four popular free­to-air TV channels, namely TV3 (Malay and English channel), 8TV (Chinese and English channel), ntv7 (English, Chinese and Malay channel) and TV9 (Malay channel). In 2011, the share of Malaysia TV viewership of Media Prima, our Company and RTM were approximately 48%, 39% and 14%, respectively. As Media Prima had the highest viewership ratings, it had the majority share of Maiaysia’s TV Adex, being a 64% share in 2011 as compared to our 26% share of Malaysia’s TV Adex in the same period. In view of our expanding viewership base, our ability to provide targeted and contextual advertising as well as by leveraging on our products with mass distribution such as our NJOI service for mass advertising, we believe we are well positioned to increase our share of Malaysia’s TV Adex. In the pay-TV market, Telekom Malaysia Bhd entered the market in March 2010 through the launch of Hypp TV, their IPTV product complementing their high-speed broadband offering. Hypp TV currently offers over 50 channels. In relation to other potential competitors, the Asia Broadcasting Network has announced plans to launch its digital cable TV aimed at the lower income groups in 2012. Several other competitors, such as DE Multimedia, DMD Fone, Maha Semerak, Vasseti Datatech and YTL Communications, have also obtained licences to provide pay-TV services. 7. BUSINESS OVERVIEW (cont’d) 7.7.2 Radio The main competitors of our radio business are Media Prima, Star Rfm and RTM. Media Prima’s top ranking radio station in terms of listenership is Hot FM which is one of the top five ranked radio stations in Malaysia as at April 2012. Media Prima also has English and Chinese radio stations which are called Fly FM and One FM, respectively. Star Rfm has four radio stations in total. Its top ranked radio station is Suria FM, which is ranked in the top five radio stations in Malaysia in terms of listenership based on the IMR Report. Star Rfm also has one Chinese radio station called 988, and two English radio stations, RedFM and Capital FM. For further information of our market share, please refer to Section 7.5.2 of this Prospectus. 7.8 Intellectual property We rely on a combination of trademarks, servicemarks, copyright protection and domain name registrations to establish and protect our brand names and logos, marketing designs, Internet domain names and our intellectual property in works eligible for copyright including broadcasts, films, sound recordings, musical works, literary works and artistic works. • Trademarks and servicemarks. Various brand names and logos used in our businesses are at various stages of application for registration as trademarks and servicemarks for various classes of goods and services (primarily Classes 16, 25, 38 and 41) in Malaysia. Applications for registration of trademarks and servicemarks have also been made in other territories including Brunei, Indonesia, Singapore, Laos, Cambodia and Vietnam. Please refer to Annexure C for details of the more significant brand names and logos owned by us.
• Copyright. Our copyright relates principally to the works eligible for copyright in our filmed entertainment, magazine publications, in-house productions, editorial works and commissioned programmes for our broadcasting service, online websites and publications businesses.
• Domain names. We own a number of Internet domain names such as www.astro.com.my, www.onthego.astro.com.my and www.stadiumastro.com, among others.

7.9 Corporate responsibility Through our employee volunteer programme, Astro Kasih, we are committed to community development initiatives focusing on four main categories of corporate responsibility, namely learning, community, sports and wellness and the environment. As at the LPD, Astro Kasih employee volunteers have invested over 57,000 hours in more than 600 activities across these four categories. 7. BUSINESS OVERVIEW (cont’d) • Learning We provide approximately 5.3 million students and 400,000 teachers in over 9,800 schools and teacher activity centres throughout Malaysia with access to world-class educational content by providing the Kampus Astro Learning System, which consists of an Astro decoder, a TV set and access to 17 international and local learning channels. In partnership with the Ministry of Education Malaysia, we have engaged with over 100,000 students and teachers from more than 600 schools throughout Malaysia by introducing them to the services and content available on the Kampus Astro Learning System. • Community We believe we are in a unique position to make a difference to the communities and as part of this commitment we have built “Astro Hostels” at two schools in Sabah and Sarawak to assist students living in remote areas in gaining access to education. To this end, we built three blocks of hostel in SK Magandai, Sabah, equipped them with the Kampus Astro Learning Systems, provided school supplies to 170 students and conducted educational workshops to guide students toward academic success. Through these efforts, the passing rate of SK Magandai students in the 2011 national primary school assessment examinations more than doubled. Encouraged by the success of SK Magandai, we built the second Astro Hostel at SK Sungai Paku, Sarawak to benefit 100 students of the school. In working together with the Malaysian Government, we will distribute, on a complimentary basis, 50,000 NJOI decoders and satellite dishes to those registered under e-Kasih, a national database of the poor. This is our initiative to provide free access to education, information, entertainment and sports to low-income communities, social and charitable organisations, as well as to homes in areas with no current access to TV and radio services. • Sports and WeI/ness To create a healthy society, we encourage and support participation in sports through the Stadium Astro Kem BOLA football camp. Working with the Football Association Malaysia (“FAM”), we engaged eight FAM coaches to conduct football training sessions with approximately 180 children with ages between ten and 14 for a period of six weeks. A total of 18 participants are currently pursuing further training under the Penang State Football Association. In April 2012, our Company and 1 Malaysia Cardiff City (“1 MCC”) announced the 1MCC -Astro Kem BOLA, a football training programme with coaches from Cardiff City Football Club. • Environment We seek to raise awareness about the importance of preserving the environment by engaging the local community with hands-on coral restoration activities through our Beautiful Malaysia initiative. Since 2009, Astro Kasih has organised and performed annual coral transplanting exercises off the coast of Sabah and engagement sessions to advocate the preservation of the environment and coral life. In 2011, Astro Kasih, in collaboration with the Ministry of Tourism, Culture and Environment, Sabah and international divers from around the world, organised and participated in the largest coral transplanting exercise at Ribbon Reef, Tun Sakaran Marine Park, Semporna, Sabah where 777 individual corals were transplanted to an underwater nursery, a new record in the Malaysia Book of Records. 140 7. BUSINESS OVERVIEW (cont’d) We place great importance in ensuring that our business operations have minimal impact on the environment. Using the International Organization for Standardization’s 14001 (“ISO 14001”) standards for environmental management systems, we closely monitor the impact of our operations on the environment and endeavour to reduce adverse impact on the environment by having in place systems and processes to reduce waste. For example, we use an online system for human resource-related administrative tasks to reduce paper usage, have a polystyrene-free and styrofoam-free day every Friday to reduce non-biodegradable waste, have reserved parking spaces for employees that participate in our car-pooling program, have desktop computer monitors at workstations that switch off automatically after a certain time, and have installed motion sensors for lighting to reduce electricity consumption. These efforts led to us being awarded with the ISO 14001 certification in 2009, and ASTRO continues to comply with the certification. As a media broadcaster, we are also in a good position to spread community service messages to our viewers and listeners. Our TV platform runs an average of 283 minutes of community service announcements each day across all available channels. On radio, we broadcast more than 432 minutes of public service announcements each day across all our nine commercial radio stations. As an extension of our commitment to develop the community, we have incorporated a non­profit organisation known as the Astro Kasih Foundation (“Foundation”) dedicated to initiating and executing all of our corporate responsibility programmes. The Foundation aims to build on its existing corporate responsibility projects for the community while launching new projects to benefit the community. The Foundation will initiate projects with specific and measurable outcomes and works either independently or in collaboration with strategic partners whose interests and directions are aligned with those of the Foundation. 7.10 Major suppliers Except for ESPN Star Sports, none of our suppliers accounts for more than 10.0% of our Group’s total pro forma operating expenses for each of the financial years ended 31 January 2010, 2011 and 2012 and total operating expenses for the six month financial period ended 31 July 2012. The total fees paid to ESPN Star Sports was more than 10.0% of our Group’s total pro forma operating expenses for the financial year ended 31 January 2010 and less than 10.0% of our Group’s total pro forma operating expenses for the financial years ended 31 January 2011 and 2012 and total operating expenses for the six month financial period ended 31 July 2012. We believe that we are not dependent on ESPN Star Sports. 7.11 Major customers Our customers include subscribers, purchasers of our content and advertisers. There is no customer that individually contributes 10.0% or more of our Group’s pro forma revenue for each of the financial years ended 31 January 2010,2011 and 2012 and revenue for the six month financial period ended 31 July 2012. 7. BUSINESS OVERVIEW (cont’d) 7.12 Insurance We maintain insurance policies covering business interruption and property damage to both our real and personal properties including but not limited to, broadcasting equipment and systems, devices, accessories and other properties material to our digital broadcast satellite services, against natural disasters or similar events, subject to customary limits based on the relevant asset values and risk exposure. We also maintain business interruption insurance for the total loss of the MEASAT-3 and MEASAT-3A transponders, where total loss is considered to be any situation covering the complete loss, destruction or failure of the satellite, or if we have less than five transponders available for our Malaysian operations or if the remaining operational lifetime of the satellite is reduced to less than 730 days. Renewal of adequate insurance cover is subject to market conditions, premium rates and capacity. We also carry insurance for professional liability, public liability and directors’ and officers’ liability. We will also rely on legal defences such as disclaimers and “take-down” procedures and policies to control and limit potential liability for information disseminated through our network. 7.13 Employees As at 31 July 2012, we had 4,139 pennanent and fixed term employees. None of our employees is represented by any union. We believe that there is a cohesive and harmonious labour environment that is conducive for us to be both flexible and productive. The table below sets forth the number of pennanent employees for each of our business segments as at 31 January 2010,2011 and 2012 and as at 31 July 2012: As at 31 January As at 31 July 2010 2011 2012 2012 TV 2,266 2,401 2,793 3,109 Radio 276 303 297 266 Featured films 13 17 1916 Digital services 65 62 76 73 Publications 66 72 7469 Content production 577 642 453 492 Corporate(1, 111 125 90 92 Totai 3,394 3,642 3,604 4,139 Note: (1) Employees who provide corporate services to both our Group and other companies within the AHSB Group. Following the Reorganisation, employees in content production were re-assigned to the TV operations which resulted in a corresponding reduction in the content production department during the financial year ended 31 January 2012. In addition, certain employees in the corporate division were re-assigned to other divisions within our Group during the financial year ended 31 January 2012. We believe human capital is the cornerstone of our success. With this in mind, we provide extensive training and development opportunities to our employees by offering a variety of training programmes at Astro Capability Centre where our employees may attend the required training to upgrade and sharpen their knowledge and skills. In addition, we invest approximately 2% of our total staff cost during the financial year ended 31 January 2012 in hosting in house Harvard Business School programmes conducted and facilitated by Harvard Business School professors on subject matters related to media strategies, strategic planning for new media, leading innovation for media companies to keep our employees abreast of new developments in the media and broadcast industries around the globe. 7. BUSINESS OVERVIEW (cont’d) Every year, we work towards identifying high performing and high potential employees among our staff for further employee development. We hire an independent human resources consultant to assess our employees’ leadership potential and develop a plan to develop employees into future leaders who can be part of our leadership succession plan. A robust succession planning process is in place to ensure that the potential individuals assume key and critical positions in our Group. 7.14 Research and development As mentioned in Section 7.5.1.2(i) of this Prospectus, we routinely conduct quantitative and qualitative market research activities. to understand both the appeal of our services to our subscribers and how to attract non-subscribers to our services. These activities enable us to devise strategies for pricing, programming and packaging to our subscribers and are carried out as part of our marketing efforts. Accordingly, we do not have any formal research and development facilities and systems or policies in place as at the LPD. For the financial years ended 31 January 2010, 2011 and 2012, we have not incurred any material research and development expenditure. 7.15 Quality assurance We place significant emphasis on maintaining high standards for our services and products, and adhere to stringent quality standards. We emphasise quality management assurance to ensure that all industry and regUlatory standards and requirements are adhered to. We also benchmark ourselves with world-class best practices. For instance, we use the best practices to develop our key performance indicators, Which are then applied and monitored. Additionally, we have also embedded process improvement reviews and validation on all of our business processes to enable us to deliver services that are aimed towards optimum service delivery and resources that exceed customer needs. These services include compelling content as well as service availability. We have achieved annual compliance with the PCI-DSS and ISOIIEC 27001 Information Security Management System. 7.16 Environmental matters and occupational safety and health We believe that we are in compliance in all material respects with applicable environmental regulations in Malaysia and are not aware of any environmental issues which may materially and adversely affect our operations. We are committed to achieving the highest industry standards through continuous improvement and adoption of best practices to maintain a healthy and safe working environment. We are certified under OHSAS 18001: 2007. We have been awarded with the prestigious National Occupational Safety and Health Award by the National Council of Occupational Safety and Health of Malaysia. 7.17 Interruptions to business for the past 12 months There was no interruption to our business and operations which had a significant effect on our operations in the past 12 months preceding the LPD. 7. BUSINESS OVERVIEW (cont’d) 7.18 Relevant laws and regulations governing our business 7.18.1 Broadcasting Legislative Framework The principal legislation forming the legislative framework governing the communications and multimedia industry in Malaysia is the CMA and its subsidiary legislation. The CMA came into force on 1 April 1999 and replaced the Telecommunications Act 1950 and the Broadcasting Act 1988, which were repealed with effect on the same date. With its tenets based on principles of increased transparency, competitiveness and self-regulation, the CMA facilitated the convergence of the communications and mUltimedia sectors in Malaysia. Among the objects of the CMA is the promotion of national policy objectives for the communication and multimedia industry, which include the following: • establishing Malaysia as a major global centre and hub for communications and multimedia information and content services;
• promoting a high level of consumer confidence in service delivery from the industry;
• ensuring an equitable provision of affordable services over ubiquitous national infrastructure;
• facilitating the efficient allocation of resources; and
• promoting the development of capabilities and skills within Malaysia’s convergence industries.

Various pieces of subsidiary legislation have been issued under the CMA to regulate specific aspects of the industry in more detail, including rules and regulations on technical standards, spectrum, licensing and rates. Where relevant, guidelines may also be issued to provide clarification on specific areas. Regulatory Framework The communications and multimedia industry is regUlated by the Minister and the MCMC. The MCMC was established pursuant to the Malaysian Communications and Multimedia Commission Act, 1998 which came into force on 1 November 1998. Its functions include, among others, the follOWing: • advising the Minister on all matters concerning the national policy objectiVes for communications and multimedia activities;
• implementing and enforcing the provisions of the communications and multimedia laws;
• considering and recommending reforms to the communications and multimedia laws;
• supervising and monitoring communications and multimedia activities;
• encouraging and promoting the development of the communications and multimedia industry, inclUding in the area of research and training; and

7. BUSINESS OVERVIEW (cont’d) • encouraging and promoting self-regulation in the communications and multimedia industry. The MCMC is empowered by the CMA to issue directions to licensees, to make determinations and to issue guidelines. It also has the power to hold public inquiries and to conduct investigations. Policy-making responsibilities lie with the Minister. The Minister has the power to grant licences, after giving due regard to the recommendations of the MCMC. The Minister is also empowered, among other things, to issue directions to the MCMC on the exercise of its powers and the performance of its duties, and to make subsidiary legislation in the form of orders, rules and regulations. The Minister may also make determinations where the CMA expressly provides for them. Self regulation and Industry forums The CMA seeks to establish a regime of self-regulation by providing for the creation of industry forums. An industry body may be designated or appointed as an industry forum if the MCMC is satisfied that the criteria stipulated in Section 94 of the CMA have been fulfilled. The primary function of a designated industry forum is to formulate and implement voluntary industry codes, which would serve as a guide for the industry to operate. The relevant codes may be developed on the industry forum’s own initiative or upon request by the MCMC. If the MCMC is of the view that a voluntary code prepared by the designated industry forum is ineffective, the MCMC may determine a mandatory standard for any matter which is the subject matter of the voluntary industry code. The Minister may also direct the MCMC to determine a mandatory standard in place of a voluntary industry code. As at the LPD, the Malaysian Access Forum Berhad (“Access Forum”), the Communications and Multimedia Consumer Forum of Malaysia (“Consumer Forum”), the Communications and Multimedia Content Forum of Malaysia (“Content Forum’) and the Malaysian Technical Standards Forum Berhad (“Technical Standards Forum”) are all industry forums designated under the CMA. Licensing Regime Under the CMA, the following four main categories of activities require licences to be issued by the Minister: • Network facilities provider (“NFP”) licence:
For the ownership and/or provision of physical infrastructure used to provide communications services (for example cables, towers, satellite earth stations, broadband fiber optic cables and telecommunications lines);
• Network service provider (“NSP”) licence:

For the provision of network services over network facilities (for example, broadcasting distribution services); 7. BUSINESS OVERVIEW (cont’d) • Applications services provider (“ASP”) licence:
For the provision of application services by means of network services for example voice services, data services, Internet access and electronic commerce delivered to end users; and
• Content application services provider (“CASP”) licence:

For the provision of content applications services including TV and radio broadcast services (for example, satellite broadcasting, sUbscription broadcasting, terrestrial free-to-air TV and terrestrial radio broadcasting). Within these categories, the CMA provides for the issuance of either individual or class licences (except in the case of licensing of ASPs, which since April 2005, is regulated only by way of class licences, due to Ministerial Direction No.3 of 2001 On General Licensing Policies issued on 23 March 2001). • Individual licences, which must be applied for and are granted by the Minister. They require a high degree of regulatory control and may include special conditions.
• Class licences, which are less heavily regulated and only require registration, which is an administrative process, rather than the making of an application.

Individual Licences Licence conditions consist of standard and special conditions which vary depending on the category of licences. The standard licence conditions applicable to individual licences generally include the following: • the licensee shall be a company that is incorporated in Malaysia;
• the shareholding of the licensee shall comply with relevant Malaysian foreign investment restrictions;
• the licensee shall notify the Minister of any changes of shareholdings which are required to be notified to the relevant authority;
• the licensee shall notify the Minister of any joint ventures entered into with other licensees;
• the licensee shall comply with the provisions of the CMA;
• the licensee shall comply with the provisions of any subsidiary legislation made, or other instruments, guidelines or regulatory policies issued under the CMA;
• the licensee shall indemnify the Minister and the MCMC against any claim or proceeding arising from any breach or failings on the part of the licensee; and
• the licensee shall comply with any other standard conditions and matters as declared by the Minister, or provided in any subsidiary legislation, under the CMA.

146 7. BUSINESS OVERVIEW (cont’d) The Minister may declare special licence conditions applicable to individual licences which may include but are not limited to the following: • period of the licence;
• licence fees;
• licensed area;
• specific undertakings with respect to levels of investments, specific activities and operations; and
• specific rights and privileges agreed between the licensee and the Government which are conditional upon the undertakings entered into by the licensee.

An individual licence granted under the CMA shall be valid for a period of 10 years from the date of grant of the individual licence unless cancelled by the Minister before its expiry. Under the CMA, the Minister is vested with the power to make a declaration at any time: • to modify or vary the special or additional conditions (as distinguished from the standard conditions) of an individual licence;
• to revoke the special or additional conditions of an individual licence; or
• to impose further special or additional conditions on an individual licence.

On the recommendation of the MCMC, an individual licence may be suspended or cancelled by the Minister if: • the licensee fails to pay any amount required under the CMA or the individual licence;
• the licensee fails to comply with the provisions of the CMA or the terms and conditions of the individual licence;
• the licensee contravenes the provisions of any other written law relevant to the communications and multimedia industry;
• the licensee fails to comply with any instrument issued by the Minister or the MCMC; or
• the suspension or cancellation is in the public interest.

Class Licences In the case of a class licence, conditions that may be imposed include, among others, the following: • compliance with the provisions of the CMA;
• compliance with the provisions of all subsidiary legislation made, or other instruments, guidelines or regulatory policies issued under the CMA;

147 7. BUSINESS OVERVIEW (cont’d) • an obligation to indemnify the Minister and the MCMC against any claim or proceeding arising from any breach or failings on the part of the licensee; and
• compliance with any other standard conditions and matters as may be declared by the Minister, or provided in any subsidiary legislation, under the CMA.

A person who intends to operate under a class licence is required to register with the MCMC under that class. The registration is valid for one year. The Minister may by declaration amend the conditions of class licences. Foreign Ownership Restrictions A foreign company (as defined under the Act) is ineligible to apply for an individual licence or to be registered as a class licensee. Pursuant to the announcement by the Prime Minister of Malaysia on 30 June 2009, the Foreign Investment Committee Guidelines have been repealed and equity ownership restrictions, if any, for companies issued with licences under the CMA, will be imposed by the Minister. Typically, the standard licence conditions require licensees to comply with all relevant laws or rules under any legislation or guidelines issued by the Government or its agencies pertaining to restrictions on foreign shareholdings in the licensee. Individual licences issued under the CMA may be suspended or cancelled by the Minister on the recommendation of the MCMC if the licensee breaches any relevant rules or laws pertaining to restrictions on foreign equity ownership. Spectrum/Apparatus Assignment The CMA SUbjects the use of any frequency spectrum in Malaysia to the requirement to obtain a spectrum assignment, an apparatus assignment or a class assignment, all of which are issued by the MCMC. Under the CMA, the Minister may, after taking into account the recommendations of the MCMC, determine that a certain spectrum is to be reallocated for spectrum assignments. The MCMC may issue an apparatus assignment which confers rights on persons to use spectrum to operate a network facility of a specified kind at a specified frequency or in any specified frequency band or bands. An apparatus assignment is issued for a period of five years or iess and must be in line with the spectrum plan. The spectrum plan is a vital document which contains radio frequency allocation for various wireless services in Malaysia and accompanying notes on constraints when using the frequencies. It essentially divides the spectrum in Malaysia into a number of frequency bands and specifies the general purpose in which the frequency bands can be used. UMTS (Maiaysia) holds a spectrum assignment with spectrum allocation bands of 1935-1950 MHz, 2125-2140 Mhz and 2015-2020 Mhz. As for apparatus assignments, in total there are 212 apparatus assignments held by five entities within the Group. Rates Subject to the relevant provision of the CMA, broadcasting services are generally not subject to any rate setting and broadcasters are free to set prices for the services provided. Under Section 197 and Section 198 of the CMA, a facilities or services provider may set prices in accordance with market rates on the basis of the following principles: 148 7. BUSINESS OVERVIEW (cont’d) • rates must be fair and, for similarly situated persons, not unreasonably discriminatory;
• rates should be oriented towards costs and, in general, cross subsidies should be eliminated;
• rates should not contain discounts that unreasonably prejudice the competitive opportunities of other providers;
• rates should be structured and levels set to attract investment into the communications and multimedia industry; and
• rates should take account the regulations and recommendations of the international organisations of which Malaysia is a member.

The Minister has the power, on the MCMC’s recommendation, to intervene in determining and setting the rates for any competitive facilities or services for good cause or as public interest may require. Access Forum The Access Forum was designated by the MCMC as the access forum for the industry. Its main tasks are to develop the access code, a voluntary code containing model terms and conditions for standard access obligations which guide the operations of the industry, and to make recommendations to the MCMC on the services and facilities to be included in, or removed from, the access list. As at the LPD, no access code has been registered with the MCMC. The MCMC has, however, issued determinations on mandatory standards on access. Consumer Protection The Consumer Forum is the forum tasked by the MCMC with the primary aim to protect the rights of consumers of the communications and multimedia industry and to monitor service delivery in relation to consumer interests. Its membership reflects representation from both the supply and demand side of the communications and multimedia industry. MBNS is a member of the Consumer Forum. As a designated forum, the Consumer Forum has launched a general consumer code of practice (“Consumer Code”) binding on all its members. The Consumer Code outlines the rights of consumers and sets out model procedures for the handling of customer complaints, disputes and grievances and compensation of customers in the case of its breach. It is used as a base guideline for the provisioning of services by the communications and multimedia service providers. Content RegUlation The CMA prohibits CASPs from broadcasting content which is “indecent, obscene, false, menacing or offensive in character with intent to annoy, abuse, threaten or harass any person”. 7. BUSINESS OVERVIEW (cont’d) The Content Forum established in February 2001, is the industry forum established with the mandate to govern content and to address content-related issues disseminated by way of electronic networked medium. Its main objective is to continuously develop codes and best practices as envisaged by the CMA that reflects a balanced representation and views of the community at large. Similarly with the Consumer Forum, the Content Forum is represented by membership categories ranging from advertisers, broadcasters, civic groups, audiotext service providers, content creators/distributors and Internet access service providers. MBNS, MEASAT Radio Communications and Maestra Broadcast are members of the Content Forum. The Content Forum has prepared and drawn up a content code (“Content Code”) containing standards and practices to be applied with regard to content in the communications and multimedia industry. Its ambit is defined under Section 213(1) of the CMA which states that the Content Code shall include model procedures for dealing with offensive and indecent content. The Content Code applies to all CASPs and it essentially recommends a responsible approach towards the provision of content. It was officially registered with the MCMC with effect from 1 September 2004. The Content Forum is tasked with the duly to enforce the Content Code, to administer sanctions for its breaches and to provide an avenue for channelling complaints in relation to content. Content is also regulated through the Film Censorship Act 2002 (“Film Censorship Act”), under which all films are required to be submitted to the Film Censorship Board for their prior review and approval before public viewing. From May 1997, MBNS was granted an exemption by the Ministry of Home Affairs from haVing to submit its broadcasts to the Film Censorship Board. Instead, self censorship is practised with the Content Code being the main reference for this self-censorship process. We aiso conduct our content regulation in reference to, among others, the Astro Censorship Guidelines which was approved in 1997 by the Minister of Home Affairs (“Home Affairs Minister”). Technical Standards The Technical Standards Forum has been designated by the MCMC as the industry­established body to develop Technical Standards and Industry Codes and to seek registration of the same from the MCMC, as well as to provide industry facilitation services with the objective of promoting competitiveness in the Malaysian communications industry. Universal Service Provision (nuspn) The USP is designed with the objective to promote the widespread availability and usage of network services and/or application services throughout Malaysia. It is regulated by the CMA and the Communications and Multimedia (Universal Service Provision) Regulations 2002 (“USP RegUlations”). The USP Regulations provide for among others, the designation for a universal service target and provider, processes and procedures for a universal service plan, contributions to the Universal Service Provider Fund (“USP Fund”) and payments to the designated universal service providers from the USP Fund. NFP, NSP and ASP licence holders with total net revenue derived from designated services in the preceding year that is more than the minimum threshold of RM2.0 million are required to contribute to the USP Fund. Within the Group, MBNS’ major revenue is derived from its services under the CASP licence, therefore its contribution to USP Fund is minimal compared to other providers. 150 7. BUSINESS OVERVIEW (cont’d) Restrictions on anti-competitive behaviour The CMA prohibits a licensee from engaging in conduct which has the purpose of substantially lessening competition in any communications market in Malaysia. The CMA also prohibits certain collusive arrangements for rate fixing, market sharing, boycotts and tying and linking arrangements. Furthermore, if the MCMC determines that a licensee is in a dominant position, it may direct the licensee to cease any conduct which has or may have the effect of substantially lessening competition in any Malaysian communications market, and to implement appropriate remedies. The MCMC has formulated and published guidelines on “Dominant Position in a Communications Market” and “Substantial Lessening of Competition”, both of which came into force on 1 February 2000. These guidelines form part of the development of a legal framework for competition regulation in the communications and multimedia industry. All commercial activities regulated under the CMA are exempted from the application of the Competition Act 2010 (“CA”), which came into force on 1 January 2012. Commercial activities regulated under the CMA includes the provision of broadcasting and application services. However, other commercial activities engaged in ‘by our other companies within the Group which are not licensed under the CMA such as magazine publication and film production would not fall within the scope of commercial activities regulated under the CMA and would therefore be within the purview of the CA. The two main prohibitions under the CA are set out in Sections 4 and 10 of the CA. Section 4 prohibits any horizontal or vertical agreements which have the object or effect of significantly preventing, restricting or distorting competition in a relevant market (“Chapter One Prohibition”). Meanwhile, under Section 10, entities which are considered to be in a dominant position are prohibited from engaging in conduct which abuses such position of dominance in any relevant market (“Chapter Two Prohibition”). The CA is administered and enforced by the Malaysian Competition Commission (“MyCC”), an independent body established under the Competition Commission Act 2010. The MyCC is empowered under the CA to issue guidelines to clarify the application of the CA. As at the LPD, the MyCC has issued final Guidelines on Market Definition, Guidelines on Chapter One Prohibition, Guidelines on Chapter Two Prohibition and Guidelines on Complaint Procedures. 7.18.2 Print media and pUblications The publication industry in Malaysia is regulated by the Printing Presses and Publications Act 1984 (“PPP Act”), which requires all persons who keep for use or use printing presses to have licences issued by the Home Affairs Minister. The PPP Act regulates the use of printing presses, the printing, importation, production, reproduction, publishing and distribution of publications. 7. BUSINESS OVERVIEW (cont’d) The PPP Act provides that it is a criminal offence to keep for use or use a printing press without a licence granted by the Home Affairs Minister, who may, revoke or suspend such licences, and may also restrict or ban outright publications that are likely to endanger national security interest or create social unrest. In July 2012, the Printing Presses and Publications (Amendment) Act 2012 (“PPP (Amendment) Act”) came into effect. Among the amendments passed under the PPP (Amendment) Act include provisions to remove the Home Affairs Minister’s absolute discretion in granting or refusing a printing press licence and to allow publishers to challenge in court any decision by the Home Affairs Minister to revoke or suspend licences. The PPP (Amendment) Act also adds that a person who has been granted a licence or permit shall be given an opportunity to be heard before a decision to revoke or suspend such licence or permit is made. Meanwhile, regulation of content in advertising is imposed through the Malaysian Code of Advertising Practice, which deals with commercial advertising in the media, including the print media. However its application excludes the broadcast media, online services and other telecommunications and electronic media which are subject to the Content Code administered by the Content Forum. 7.18.3 Film production and distribution All film producers and film distributors in Malaysia are subject to the provisions contained in the Perbadanan Kemajuan Filem Nasional Malaysia Act 1981 (“FINAS Act”), a legislation which was specifically enacted with the objective to promote, maintain and facilitate the development of film production in Malaysia. FINAS is a statutory body under the purview of the Ministry of Information, Communication and Culture and tasked with the responsibility of encouraging growth of the Malaysian film industry. FINAS is also the licensing body empowered under the FINAS Act to issue licences for companies which carry out film/video production, film/video distribution and film/video exhibition activities. Each licence is renewable annually. Companies applying for licences from FINAS are also SUbject to foreign ownership restrictions. A company seeking to apply for a new licence would need to have at least 30% of its equity held by Malaysians for the first five years, out of which 30% must be held by Bumiputeras. From the sixth year onwards, at least 51 % of its equity needs to be held by Malaysians, out of which 30% must be held by Bumiputeras. The Film Censorship Board performs censorship of all films to be screened in Malaysia, where any film to be screened in Malaysia must be submitted for censorship to the Film Censorship Board and certified by it. The Film Censorship Board is established under the Film Censorship Act which bans the possession, ownership and/or screening of materials which are obscene or otherwise against public decency. Any film passed with compulsory alteration must have the alteration effected before the film can be released for screening. 7.19 Dependence on material contracts/agreements As at the LPD, save as disclosed below, there are no material contracts, agreements, arrangements or other matters which had been entered into by us which we are highly dependent on: (i) On 18 June 2007, MBNS entered into an agreement with MSS for the supply of the aggregate space segment capacity on 13 transponders on MEASAT-3 (“M3 Transponder Capacity”) by MSS to MBNS (“M3 Agreement”). 7. BUSINESS OVERVIEW (cont’d) MSS agreed to supply the M3 Transponder Capacity to MBNS on 24/7 basis in five separate tranches during a 14 year and six month period commencing from the commencement date (being 1 August 2007) (“M3 Term”). MBNS has an option to extend the M3 Term for a further period to be mutually agreed by both MSS and MBNS. The total fee for the supply of the M3 Transponder Capacity over the M3 Term is approximately USD381.8 million (“M3 Fee”). MBNS shall pay the M3 Fee to MSS quarterly in advance with the first payment falling due within seven days from 1 August 2007 and subsequent quarterly payments falling due on the first day of each successive quarterly date thereafter, until the quarterly date immediately preceding the expiry of the M3 Term. The initial sum of USD4.5 million paid by MBNS to MSS prior to the execution of the M3 Agreement as security deposit shall be applied as part payment of the M3 Fee for the first and second quarterly payments (or until the said sum is fUlly utilised). Further, MSS has granted MBNS a one-off rebate amounting to USD3.6 million for the M3 Transponder Capacity, which will be applied against the quarterly payments of the M3 Fee in accordance with the terms and conditions of the M3 Agreement. MSS and MBNS had vide letters dated 17 December 2008, 30 April 2009 and 15 November 2010, agreed to, among others, reduce the total number of transponders leased to 12, out of which one transponder was re-Ieased by MBNS to MSS until 31 March 2013 (“Re-Ieased Transponder”) and thereafter MSS may extend the lease on a month to month basis until 30 September 2013. Pursuant to two letters of variation both dated 30 Aprli 2012, MSS and MBNS have agreed to (i) the reduction of the M3 Fee payable by MBNS under the M3 Agreement by RM1,041,666.67 per quarter for 24 quarters commencing from 1 February 2012 during the M3 Term; and (ii) a further rebate of RM833,333.00 per month from the M3 Fee being granted to MBNS (such rebate to correspond with the actual extended term utilised) if MSS extends the lease period of the Re-Ieased Transponder. (ii) On 18 May 2009, MBNS entered into an agreement with MSS for the supply of space segment capacity on six Ku-band transponders on MEASAT-3A (“M3A Transponder Capacity”) by MSS to MBNS (“M3A Agreement”). MSS agreed to supply the M3A Transponder Capacity to MBNS on 24/7 basis for a period of 15 years commencing from the commencement date (being the date of completion of the in-orbit testing of MEASAT-3A, which took place on 20 July 2009) (“M3A Term”). MBNS has an option to extend the M3A Term for a further period to be mutually agreed by both MSS and MBNS. The total fee for the supply of the M3A Transponder Capacity over the M3A Term is USD189.6 million (“M3A Fee”). MBNS shall pay the M3A Fee to MSS quarterly in advance on the first day of each quarter commencing from the commencement date of the M3A Term until the quarter immediately preceding the expiry of the M3A Term. MBNS shall pay MSS approximately USD19.0 million as deposit within seven days from the execution of the M3A Agreement which shall be refunded by MSS to MBNS on or before 1 June 2014 or within seven days from the termination of the M3A Agreement unless the said deposit shall have already been refunded on or before 1 June 2014. 7. BUSINESS OVERVIEW (cont’d) MSS will grant to MBNS a one-time contribution in the total sum of approximately USD4.7 million, to be applied against the M3A Fee in relation to the upgrade of the MBNS’ earth stations and associated equipment costs in order to access MEASAT­3A. The one-time contribution shall be applied against the first 20 quarterly Instalments of the M3A Fee in the sum of USD237,000.00 per quarter. (iii) On 11 May 2012, MBNS entered into an agreement with MEASAT International (South Asia) Ltd (“MISA”) for the supply of the aggregate space segment capacity on 18 transponders on MEASAT-3B (“M3B Transponder Capacity”) by MISA to MBNS (“M3B Agreement”). MISA agreed to supply the M3B Transponder Capacity to MBNS on a 24/7 basis in three separate tranches (during a two-year period) commencing from the commencement date (being the date of completion of the in-orbit testing of MEASAT­3B, which has yet to take place) for a period of 15 years (“M3B Term”). MBNS has an option to extend the M3B Term for a further period to be mutually agreed by both MISA and MBNS. The total fee for the supply of the M3B Transponder Capacity over the M3B Term is USD538.0 million (“M3B Fee”). MBNS shall pay the M3B Fee to MISA quarterly in advance on the first day of each quarter commencing from commencement date of the respective tranche until the quarter immediately preceding the expiry of the M3B Term. MBNS shall pay USD30.0 million to MISA as deposit (“M3B Deposit”) in the following manner: (a) USD10.0 million on or before the end of six months from the date of the M3B Agreement;
(b) USD10.0 million on or before the end of 12 months from the date of the M3B Agreement; and
(c) USD10.0 million within 14 business days from the commencement date.

If MEASAT-3B is not launched by 31 March 2014, MISA shall pay interest on the M3B Deposit based on Malayan Banking Berhad’s base lending rate plus 2% per annum calculated on a daily rest basis commencing from 1 May 2014 until the actual date MEASAT-3B is launched. If MEASAT-3B is launched, the M3B Deposit shall be refunded to MBNS by way of 40 equal quarterly instalments, on the first day of each quarter commencing from the 21st quarter or 5th anniversary of the commencement date until the expiry of the M3B Term.

 

 

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