Introduction to Finance

BAFD2013

October 2015

1 Ruban A/L Kaliannan MC1506DC9141

2 Pavithren A/L Shanker MC1506DC9830

3 Kuganieshwaran A/L Yellamalai MC1502DC8925

4 Paramesis A/P Chithtravelu MC1506DC9266

5 Khanjini Muthu Krisnan MC1306DC3190

6 Hawathareni A/P Kumar MC1506DC9127

 The Background of Astro Holdings Malaysia

Astro Malaysia Holdings Berhad is a leading integrated consumer media entertainment

group in Malaysia and Southeast Asia with operations in 4 key areas of business, namely
Pay-TV, Radio, Publications and Digital Media. With a customer base of 4.2 million
residential customers or approximately 60% penetration of Malaysian TV households, Astro
offers 172 TV channels, including 40 HD channels, delivered via Direct-To-Home satellite TV,
IPTV and OTT platforms. Astro provides HD, 3D, PVR, VOD and IPTV services through Astro
B.yond and Astro on the Go. Fulfilling its promise to bridge the digital divide for all of
Malaysia, Astro introduced NJOI as an entry-level DTH satellite TV service and is the
countrys first non-subscription based satellite TV, offering 22 TV and 20 radio channels.
Astro Radio includes Malaysias highest rated stations across key languages and is available
on both terrestrial and digital channels, reaching approximately 12.6 million weekly listeners.
Its digital arm is involved in digital publishing, applications and platforms as well as
publication of entertainment and lifestyle magazines locally.

Astro holds the distinction of the Gold award in the Media and Entertainment category at
the Putra Brand Awards for 5 consecutive years from 2010 to 2014, including the Brand of
the Year award in 2012 and the Brand Icon award in 2013.

Astros CSR projects have been recognised by the International Business Awards (IBAs)
for the third consecutive year. Astro was named the winner of a Silver Stevie Award in the
2014 IBAs for the Corporate Social Responsibility Program of the Year (Asia, Australia and
New Zealand) category for the Astro Kasih Hostel and EkoVillage project. In 2013 and 2012,
Astros Beautiful Malaysia: Longest Underwater Clean Up project and Astro Kasih Hostel
project were awarded wita Silver Stevie Award respectively. These awards are in
recognition of Astros efforts to exemplify innovation, quality and strong corporate
responsibilities.
 The Products that Astro Holdings Berhad Malaysia provide

Astro IPTV is a product with a high speed broadband package of our choice.

Astro HD is a product of a complete sensory experience in HD with 5 times greater details

with vibrant colours and multi-dimensional audio experience that a person could get in
cinema or theatres.

Astro Personal Video Recorder (PVR) is a product that offered the user to record their
favourite movie, drama, songs and many more so they can watch it anytime they want
to watch. It is also provided with a play, rewind, pause, next easy control service.

Astro Multiroom is a innovative service that makes it impossible to watch different channels
in different rooms at the same time by subscribing to a second decoder in the same house.

Astro On The Go is a service by installing the astro on the go application available on the
smartphones and tablets as you could watch your favourite programes through online from
any where.

Astro First And Best is the facilities that astro provides to their subscribers to pre-book their
Astro First and Astro Best movies online and watch it on TV via their astro programme

Astro NJOI is a Malaysias first subscription-free satellite TV service which gives customers
in Malaysia immediate access to 48 TV and radio channels, comprising lifelong
learning, information and entertainment programmes for a one time payment for life long.

Astro Business is an easier way for a person whom duing a business to promote his
business through the advertisements.
 The sector of Astro Malaysia Holdings

The sector that Astro Malaysia Holdings Bhd in is trade and service. Trade and service the
sale and delivery of an intangible product, called a service, between a producer and
consumer. Trade in services takes place between a producer and consumer that are, in legal
terms, based in different countries, or economies, this is called International Trade in
Services.

The service sector is the most important sector for most developing economies. It is the
largest contributor to gross domestic product, production and employment. Since it is such
an important sector, developing economies need to identify their comparative advantage in
services and potential export markets.

The theory of comparative advantage. This explains that by specialising in goods

where countries have a lower opportunity cost, there can be an increase in economic
welfare for all countries. Free trade enables countries to specialise in those goods
where they have a comparative advantage.
 ANNUAL
REPORT OF
ASTRO
MALAYSIA
HOLDINGS
BERHAD
1) Liquidity ratio ( current ratio and quick ratio )

2013 Current Ratio = current assets / 2014

current liabilities

= 2 387 694 000 / In 2014, Astro Malaysia Holdings = 2 666 185 000 /
1 568 150 000 Berhad has RM 1.5264 in current 1 746 704 000
assets for every RM 1 in current
= 1.5226 liabilities. = 1.5264

The average is higher than the

current ratio in 2013 which is
RM 1.5226.

2013 Quick Ratio = cash and account 2014

receivable / current liabilities

= 1607 767 000 + 751 In 2014, Astro Malaysia Holdings = 1105 246 000 +
410 000 /1568 150 000 Berhad has RM 1.2004 in quick 991 463 000 / 1 746
assets for every RM 1 in current 704 000
= 1.5044 liabilities.
= 1.2004
In 2014, it is less liquidity
compared to 2013 which is RM
1.5044 for every RM 1 in current
liabilities.
2) Total Asset Turnover

2013 Total asset turnover = sales / 2014

total assets

= 2 609 630 000 / 516 092 In 2013, Astro Malaysia = 3 021 559 000 / 617 113
000 Holdings Berhad has 000
generated RM 5.0565 in
= 5.0565 sales for every RM 1 invested = 4.8963
in assets, which is higher
than the amount generated in
2014, RM 4.8963.

3) Operating Profit Margin

2013 Operating profit margin = 2014

operating profit / sales

= 34 250 000 / 2 609 630 Astro Malaysia Holdings = 30 564 000 / 3 021 559
000 Berhad is not good at 000
managing the cost of goods
= 0.01312 sold and operating expenses = 0.0101
 = 1.31% in 2014 because the = 1.01%
operating profit margin is only
1.01% only compare to 2013
which is 1.31%.

4) Debt Ratio

2013 Debt ratio = Total liability / 2014

total asset

=( 1 568 150 + 4 433 582) /
(4 130 130 + 2 387 694)
= 0.9268
= 92.68%
The debt ratio of Astro = (1 746 704 000 + 4 739
Malaysia Holdings Berhad is 712) / (4 437 344 / 2 666
greater in 2013(92.68%) than 185)
in 2014 (91.31%)
=0.9131
= 91.31%
 5) Return On Equity Ratio

2013 Return on equity ratio = Net 2014

income / common equity

= 419 793 000 / 516 092 000 Owners of Astro Malaysia = 447 761 000 / 617 113 000
Holdings Berhad had
= 0.8134 received a higher return = 0.7256
(81.34) in 2013 compared to
= 81.34% = 72.56%
(72.56) in 2014.

Astro Malaysia Holdings Berhad is eligible as shariah

compliance listed companies

Astro Malaysia Holdings Berhad is eligible as shariah compliance listed companies because
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) has
approved an updated list of securities which have been classified as Shariah-compliant
securities. The list of Shariah-compliant securities which are listed on Bursa Malaysia will
take effect from 27 November 2015.
Thirty five securities, newly classified by the SAC as Shariah-compliant securities, have been
added to the list and 39 securities have been excluded from the previous list. The complete
list of the 667 Shariah-compliant securities, as well as a breakdown of these securities
according to sector is provided in the Appendix.

In classifying these securities, the SAC received input and support from the SC. The SC
obtained information on the companies through, among others, annual reports and enquiries
made to the companies. The SAC, through the SC, will continue to review the Shariah status
of securities listed on Bursa Malaysia, on an annual basis, based on the latest available
annual audited financial statements of the companies1.

The SAC adopts a two-tier quantitative approach, which applies the business activity
benchmarks and the financial ratio benchmarks, in determining the Shariah status of the
listed securities. Hence, the securities will be classified as Shariah-compliant if their business
activities and financial ratios are within these benchmarks.

Business activity benchmarks

The contribution of Shariah non-compliant activities to the Group revenue and Group profit
before taxation of the company will be computed and compared against the relevant
business activity benchmarks as follows:

(i) The five-per cent benchmark

The five-per cent benchmark is applicable to the following businesses/ activities:

Conventional banking
Conventional insurance
Gambling
Liquor and liquor-related activities
Pork and pork-related activities
Non-halal food and beverages
Shariah non-compliant entertainment
Tobacco and tobacco-related activities
Interest income from conventional accounts and instruments (including interest
income awarded arising from a court judgement or arbitrator and dividends3 from
Shariah non-compliant investments) and
Other activities deemed non-compliant according to Shariah.

For the above-mentioned businesses/activities, the contribution of Shariah non-compliant

businesses/activities to the Group revenue or Group profit before taxation of the company
must be less than five per cent.
(ii) The 20-per cent benchmark

The 20-per cent benchmark is applicable to the following businesses/ activities:

Hotel and resort operations

Share trading
Stockbroking business
Rental received from Shariah non-compliant activities and
Other activities deemed non-compliant according to Shariah.

For the above-mentioned businesses/activities, the contribution of Shariah non-compliant

businesses/activities to the Group revenue or Group profit before taxation of the company
must be less than 20 per cent.

Financial ratio benchmarks

For the financial ratio benchmarks, the SAC takes into account the following:

(i) Cash over total assets

Cash only includes cash placed in conventional accounts and instruments, whereas cash
placed in Islamic accounts and instruments is excluded from the calculation.

(ii) Debt over total assets

Debt only includes interest-bearing debt whereas Islamic financing or sukuk is excluded from
the calculation.

Each ratio, which is intended to measure riba and riba-based elements within a companys
statements of financial position, must be less than 33 per cent.

In addition to the above two-tier quantitative criteria, the SAC also takes into account the
qualitative aspect which involves public perception or image of the companys activities from
the perspective of Islamic teaching.
 Conclusion

On 18 February 2012, Astro introduced NJOI as an entry-level DTH satellite TV service. It is

the first non-subscription-based satellite TV. As of February 2015, NJOI has 24 SDTV
channels, 5 HDTV channels and all radio channels.
On 16 February 2015, Astro launches all new Korean Pack for K-pop fans. This pack
includes Oh!K HD and Channel M HD. These channels are now available on complimentary
channels from 16 until 28 February 2015.

On 1 May 2015, Astro's New Value Pack Called "Stars Pack" for Astro Customers comes with
HD Service and Astro On The Go.

On 29 May 2015, Astro first Malay HD channel Astro Mustika HD and second Malay HD
channel Astro Maya HD which is showing some local Malay programmes along with Astro
Ria will be moved to new Malay HD channel, Astro Ria HD on channel 123. At the same
time, Astro Maya HD is now available for all NJOI customers because of 1 million customers
celebration.

On 2 June 2015, New Travel channel Go Asean CH 737 add in Astro and NJOI too.

On 1 July 2015, Astro Vinmeen HD on channel 231 is now available to all Singtel TV
customers for Singaporeans on channel 626. This channel is available to Kondattam Starter,
Trio, Variety and Value Pack.

On 15 July 2015, Astro adds new 3 sports channels. Their name is WWE Network (this
channel is broadcasts WWE shows and events and which also in HD) on channel 820 and
840 (HD) and Setanta Sports HD (this channel is broadcasts international events) on channel
839.

On 31 August 2015, Astro adds 4 new channels. Their name is STAR Chinese Channel on
channel 315, Nat Geo People HD on channel 725, HGTV HD on channel 731 and Astro
Cricket HD on channel 838.

On 19 October 2015, Astro first home shopping channel, Astro Go Shop has now available in
Mandarin version in HD on channel 318, this channel will be a available for all Astro and
NJOI customers only.

Therefore, Astro Malaysia Holdings Berhad is having a good future. It knows the preference
of customers and fullfill it.