Business Overview

 

5. INFORMATION ON OUR GROUP 5.1 OUR HISTORY We are principally a publisher of educational materials. We mainly undertake print publishing focusing on primary and secondary school education. While most of our educational materials are based on the Malaysian National School Curriculum, we also publish other non-curriculum based educational materials. We also undertake online publishing of educational materials based on the Malaysian National School Curriculum. Our group structure is as follows:
100% 100% ~ Malaysian Book IOrbit Buku i ~–~. ‘——)
Our principal activities are as follows: Comoanv PrincioaI Activities Sasbadi Holdings  Investment holding  Sasbadi  Publisher of printed educational materials, distribution ofapplied learning  products and trading ofpaper  Maya Press  Imprint for general titles’  Orbit Buku  Publisher ofsupplementary educational materials  Sasbadi Online  Publisher ofonline educational resources  Malaysian Book Promotions  Publishing and distribution of printed educational materials (I)  MBP Publications  Imprint for printed educational materials A  Sasbadi Learning Solutions  Dormant (2)
Notes: • Maya Press is an imprint i.e. a trade name under which general titles are published by Sasbadi. Sasbadi bears all costs and receives all revenue arisingfrom these activities. MBP Publications is an imprint for printed educational materials published by Malaysian Book Promotions. Malaysian Book Promotions bears all costs and receives all revenue arismgfrom these activities. (I) Additional intended activity is to undertake organisation o/book/airs and exhibitions.
(2) The intended activity is to undertake the distribution ofapplied learning products and operation ofapplied learning centres.

Our Group was co-founded by Mr Law King Hui, our Managing Director, together with Mr Lee Swee Hang and Mr Lee Eng Sang, our Executive Directors, with the aim of publishing quality educational materials to students in Malaysia. Each of our founders has between 33 and 39 years of experience in the publishing industry. Over the years, each of them has contributed significantly to the development, growth and success of our Group.
5. INFORMATION ON OUR GROUP (Cont’d) The history of our business can be traced back to 1985 with the incorporation of Sasbadi where in the same year we commenced operations as a publisher of educational materials. Our first publication was a series of workbooks for primary six students, aimed at preparing these students for secondary levels ofeducation. In 1986, we published a series of KBSM workbooks, entitled ‘Strategi’. This was our fust series of workbook with a 3-in-l packaging involving three (3) different books bound into one (1), where each of these books are detachable for independent use. In 1987, we published our first textbook approved by the Ministry of Education, entitled ‘Bahasa Malaysia KBSM Tingkatan 1’. Since then, we have published textbooks ofvarious other subjects for both primary and secondary levels of education including, amongst others, English, Geography, Science, Principles ofAccounting, Basic Economics and Mathematics. In the same year, we extended our product range to include a series of KBSR workbooks for various subjects such as Bahasa Malaysia, English and Mathematics for primary levels ofeducation. In line with our business growth, in 1989, we acquired a four (4)-storey shoplot in Damansara Utarna, Selangor Daml Ehsan and moved into the building in 1990. Thereafter, we also rented two (2) other four (4)-storey shoplots in the same area to cater to our expanding business operations. Subsequently in 1997, we began publishing Malay translated publications after securing the rights from Two-Can Publishing Limited, London and Dorling Kindersley Limited, London to publish their English science books namely ‘Make It Work!’ and ‘Eyewitness Science’ respectively. Since then, we have continued to secure rights from various foreign publishing houses where we reproduced translated publications for the Malaysian market. In the same year, we published our first teaching guide, ‘Sumber Dalam Fail’. In 2002, we began our collaboration with MELTA to publish ELT materials. In the same year, in collaboration with MELTA we launched our fust publication of ELT material, ‘Developing Reading Skills’. MELTA’s role in the collaboration included writing while our role was focused on editing, design and distribution. Since then, we have published a series ofELT materials through our collaboration with MELTA. Maya Press was also incorporated in 2002 as an imprint for Sasbadi to publish general titles in support of Malaysian authors, who write in English. The first title published under the trade name of Maya Press, in 2003 was entitled’SpiritoftheKeris’, ananthologybyanumber ofMalaysianauthors. In 2002, we also acquired a piece of leasehold land in Kota Damansara, Selangor Darnl Ehsan for the construction ofour office and warehouse. In 2004, we moved into our own purpose-built building with an approximate built-up area of76,945 sq. ft. in Kota Darnansara, Selangor Darnl Ehsan. In 2005, we ventured into supply of digital educational resources by developing and launching Total eDictionary, our first generation electronic dictionary targeted for use by students. Subsequently, in 2009, we launched eleksisPro, our second generation electronic dictionary. Our electronic dictionaries are manufactured by third party manufacturer under our specifications. As at LPD, we have ceased the productionofourelectronicdictionariesasweshiftourfocus from supply ofdigitaleducationalresources towards online educational resources. 5. INFORMATION ON OUR GROUP (Cont’d) As part of management’s intention to broaden our range of educational products, we secured the rights from LEGO System AlS to be the sole distributor of and exclusive partner in LEGO Education products for Brunei and Malaysia since 2005. LEGO Education offers a range of applied learning products for children. In 2005, we organised our fIrst Malaysia Robot Olympiad (now known as National Robotics Competition). Since then, we have continued to champion the hands-on learning platform in schools in Malaysia which is supported by the Ministry of Education. To date, we have organised nine (9) consecutive years of the annual National Robotics Competition in Malaysia, whicb has grown from approximately 100 teams in 2005 to approximately 2,800 teams in 2013. In 2009, we organised our fIrst book fair namely Bazar Baca in Malaysia. In the same year, we organised a total of 112 book fairs throughout Malaysia. The Bazar Baca book fair has since been discontinued. During the same year in 2009, we were appointed as the exclusive distributor of Pitsco Inc for the sale and distribution of Pitsco products to early childhood institutions and schools in Malaysia. Pitsco products generally include a range of robotics products and devices. In addition, we were also granted non­exclusive right to market and sell Pitsco products to private users (home learning) in Malaysia. However, the non-exclusive right does not permit us to market and sell Pitsco products via retail outlets. To the best of our management’s knowledge, we are not aware of any parties other than our Group which have been granted the non-exclusive right to market and sell pitsco products to private users (home learning) in Malaysia. Orbit Buku was incorporated in 20I0 and commenced operation in 20 II to expand our range of supplementary educational materials. Some of these include children’s books such as fIction and informational books. These books are mainly targeted at households with school going children and school libraries. During 2010, Sasbadi, as the World Robot Olympiad national organiser of Malaysia, won the rights from the World Robot Olympiad Advisory Committee to co-organise the World Robot Olympiad 2012 in Malaysia. Also, in 2010, we were appointed by YGMB to reprint, distribute, market and sell past year examination papers for SPM and STAM. Subsequently, over the years, we were awarded the licence by YGMB to reprint, distribute, market and sell past year examination papers for UPSR, PMR, STAM and SPM. However, the licence was not renewed upon its expiry on 14 September 2013, and we have ceased the reprinting, distributing, marketing and selling of the past year examination papers with effect from 15 September 2013. Duringthe sameyearin 20I0, werecordedourfIrstexportsales to Indonesiaforthetranslationrights ofa range of Sasbadi’s publications. However, this was on a small scale basis. We also acquired Malaysian Book Promotions, an event management company specialising in organising book fairs and conferences. After the acquisition, this company ceased operations as an event management company before resuming operations in September 2013 to distribute printed educational materials. In 20II, Sasbadi Online was incorporated as part of our intention to expand into publishing of online educational resources targeting both teachers and students. During the same year, we launched our fIrst online teaching product, namely Penjana Pentaksiran Instan, an instant assessment paper generator. Since then, we have launched various online educational resources including i-Teach, i-Learn and iPBS, which are cloud-based teaching and learning platforms based on subscription. During the same year in 2011, National Instruments Singapore (pte) Ltd appointed us as its exclusive Malaysian distributor for a range of applied learning products namely NI myDAQ and LabVIEW for Education to primary and secondary educational institutions for educational purposes. NI myDAQ is a portable data acquisition device used with a computer for measuring and analysing live signals including voltage, current, temperature, pressure and sound. LabVIEW for Education is a software that provides tools to create measurement and control systems.

5. INFORMATION ON OUR GROUP (Cont’d) In 2012, we co-organised with the Government of Malaysia, the World Robot Olympiad 2012 in Kuala Lumpur. As at 21 February 2013, the event was the largest in the history of World Robot Olympiad with a record participation of403 teams from 30 countries. Sasbadi Holdings was incorporated in Malaysia under the Act on 30 October 2012 and converted into a public limited company on 15 March 2013 to serve as an investment holding company and the listing vehicle of our Group. On 2 April 2013, Sasbadi signed an MOU with YGMB to offer and support an online tutorial programme with self-assessment for 20,000 candidates ofUPSR and SPM for 2013 in selected schools in Perak Daru! Ridzuan. This was undertaken under i-TRIM (Interaktif Tuisyen Rakyat 1Malaysia), a government education initiative. This involved the supply and implementation of our online educational resources, namely i-Leam. Based on the said MOU, our Group had billed YGMB on a quarterly basis based on a fixed schedule. The MOU was valid until end of 20 13. On 5 August 2013 and 30 September 2013, Sasbadi signed a letter of intent and an Intellectual Property Rights Assignment Agreement, respectively, to acquire from Pearson Malaysia the publishing rights and production files for a list of titles consisting mainly of National School Curriculum based educational materials (i.e. revision guides, workbooks, assessment books and model test papers) for RM5.5 million. In conjunction with the acquisition of the publishing rights and production files, Sasbadi has also acquired stocks of educational materials for approximately RM1.6 million and paper for approximately RMO.6 million from Pearson Malaysia. Under the Intellectual Property Rights Assignment Agreement, Sasbadi is allowed until 31 March 2014 to reprint the titles acquired under the Pearson brand and to continue to sell the reprinted! acquired Pearson branded stocks until 31 December 2014. All stocks printed after 31 March 2014 are to be branded under our Group. The acquisition of the publishing rights and production files for the list of titles was completed on 30 September 2013. The acquisition of Pearson Malaysia’s publishing rights and production files, stocks of educational materials and paper were funded by internally generated funds. In September 2013, our subsidiary company, Malaysian Book Promotions resumed operations and started distributing the acquired stocks of National School Curriculum based educational materials from Pearson Malaysia. Subsequently in May 2014, Malaysian Book Promotions started publishing printed educational materials under the imprint ofMBP Publications. In February 2014, Sasbadi Online was appointed by the Academy of Sciences Malaysia as the National Science Challenge (“NSC”) preliminary level online systcm developer and smart partner for 2014 NSC. In this regard, the 2014 NSC preliminary level is administered based on the engines used in our online educational resources. This enables us to showcase our online educational capabilities on a national scale and helps create greater market awareness for our online educational resources. MBP Publications was incorporated on 28 March 2014 and it is an imprint for Malaysian Book Promotions to publish printed educational materials. On 3 April 20I4, Sasbadi Learning Solutions was incorporated and is currently dormant. Its intended activity is to undertake the distribution of applied learning products and operation ofapplied learning centres. In April 2014, Sasbadi renewed its appointment as a distributor for National Instruments’ applicd learning products in Malaysia under a non-cxclusive arrangement which is valid until 31 December 2014. In May 2014, Sasbadi won its most recent tender from the Ministry of Education to publish, print and supply textbooks for Design and Technology subject for Year 5 (Chinese) primary level of education. The letter of acceptance to publish, print and supply the textbooks for Design and Technology subject is valid from 2014 to 2016. Sasbadi Online had in May 2014, agreed in principle to grant a publishing house in Jakarta, Indonesia the rights to use and sell i-Learn in Indonesia under licence. This is pending the signing of the license and services agreement which is exclusive for the territory ofIndonesia. 5. INFORMATION ON OUR GROUP (Cont’dj As at LPD, Sasbadi Online has finished developing and launched two (2) new products namely Mind­Map and Most Essential Exam Techniques (MEET). Mind-Map, which is an interactive system that allows users to build mind maps on computers, tablets or smart phones, can be used in a classroom environment either as individual or collaborative work among students. MEET is a collection of videos aimed at tackling difficult questions in Malaysian school exams. Since we began our operations in 1985, we have established ourselves as a reputable publisher of educational materials in Malaysia. We currently publish under the brand names of ‘Sasbadi’, ‘Sasbadi Online’, ‘Maya Press’, ‘Orbit Buku’ and ‘MBP Publications’. For the FYE 31 August 2013, we achieved total revenue ofRM78.0 million and PAT ofRM12.8 million. On 19 May 2014, we completed the Acquisitions. Details of our Group, our business and our future plans are set out in this Sections 5 and 6 of this Prospectus. THE REST OF THIS PAGE HAS BEENINTENTIONALLYLEFTBLANK 5. INFORMATION ON OUR GROUP (Cont’d)
5.2 SHARE CAPITAL Our present authorised share capital is RM500,000,000 comprising 1,000,000,000 ordinary shares of RMO.50 each, of which RM52,900,000 comprising 105,800,000 Shares have been issued and credited as fully paid-Up. Upon completion of our IPO, our issued and paid-up share capital will increase to RM63,500,000 comprising 127,000,000 Shares. The changes in our issued and paid-up share capital since our incorporation are as follows: Date of No. of Shares Cumulative Total Allotment Allotted Par Value Consideration(l) RM RM 30.10.2012 2 1.00 Cash 2.00 13.03.2013 2′ 0.50 Subdivision of Shares 2.00 19.05.2014 105,799,996 0.50 Acquisition of Sasbadi 52,900,000 Notes: After subdivision, our Company’s issued and paid-up share capital translatedfrom two (2) ordinary shares ofRMI.OO each tofour (4) ordinary shares ofRMO.50 each. (1) There were no discounts, speciallerms or instalment payment terms provided in relation to these transactions. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in our Company.
5.3 SUBSIDIARY COMPANIES 5.3.1 Sasbadi (i) History and Business
Sasbadi was incorporated on 3 May 1985 in Malaysia under the Act as a private limited company and commenced operations in 1985. It is principally involved in publishing printed educational materials, distribution ofapplied learning products and trading ofpaper.
(ii) Share Capital

Sasbadi’s present authorised share capital is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each, of which RM2,400,000 comprising 2,400,000 ordinary shares of RM1.00 each have been issued and fully paid-up. There is no change in the issued and paid-Up share capital of Sasbadi for the past three (3) years up to LPD. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Sasbadi. 5. INFORMATION ON OUR GROUP (Cont’d) 5. INFORMATION ON OUR GROUP (Cont’d) (iii)  Shareholders and Directors  Sasbadi is our direct wholly-owned subsidiary and its Directors are Law King Hui, Lee Swee Hang, Lee Eng Sang and Law En Ruey.  (iv)  Subsidiary and Associated Companies  Sasbadi does not have any subsidiary or associated company.  5.3.2  Maya Press  (i)  History and Business  Maya Press was incorporated on 3 July 2002 in Malaysia under the Act as a private limited company and commenced operations in 2003. Maya Press is an imprint for general titles for Sasbadi.  (ii)  Share Capital  Maya Press’ present authorised share capital is RMIOO,OOO compnsmg 100,000 ordinary shares ofRMl.OO each, of which RM2.00 comprising two (2) ordinary shares ofRMl.OO each have been issued and fully paid-up.  There is no change in the issued and paid-up share capital of Maya Press for the past three (3) years up to LPD.  As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Maya Press.  (iii)  Shareholders and Directors  Maya Press is our direct wholly-owned subsidiary and its Directors are Law King Hui and Lee SweeHang.  (iv)  Subsidiary and Associated Companies  Maya Press does not have any subsidiary or associated company.  5.3.3  Orbit Buku  (i)  History and Business  Orbit Buku was incorporated on 19 March 2010 in Malaysia under the Act as a private limited company and commenced operations in 2011. It is principally involved in publishing supplementary educational materials.  (ii)  Share Capital  Orbit Buku’s present authorised share capital is RMIOO,OOO comprising 100,000 ordinary shares of RMl.OO each, of which RMIO,OOO comprising 10,000 ordinary shares of RMl.OO each have been issued and fully paid-up.

 

The changes in the issued and paid-up share capital of Orbit Buku for the past three (3) years up to LPD are as follows: Date of  No. of Ordinary  Cumulative  Allotment  Shares Allotted  Par Value  Consideration(ll  Total  RM  RM  05.03.2013  9,998  1.00  Cash  10,000
Note: (1) There were no discounts, special terms or instalment payment terms provided in relation to this transaction. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Orbit Buku. (iii) Shareholders and Directors Orbit Buku is our direct wholly-owned subsidiary and its Directors are Law King Hui and Lee SweeHang. (iv) Subsidiary and Associated Companies Orbit Buku does not have any subsidiary or associated company. 5.3.4 Sasbadi Online (i) History and Business
Sasbadi Online was incorporated on 5 July 2011 in Malaysia under the Act as a private limited company and commenced operations in 2011. It is principally involved in publishing online educational resources.
(ii) Share Capital

Sasbadi Online’s present authorised share capital is RMIOO,OOO comprising 100,000 ordinary shares of RMI.OO each, of which RMIO,OOO comprising 10,000 ordinary shares of RMI.OO each have been issued and fully paid-up. The changes in the issued and paid-up share capital of Sasbadi Online since its incorporation up to LPD are as follows: Date of  No. of Ordinary  Cumulative  Allotment  Shares Allotted  Par Value  Consideration(l)  Total  RM  RM  05.07.2011  2  1.00  Cash  2.00  05.03.2013  9,998  1.00  Cash  10,000
Note:  (1)  There  were  no  discounts,  special terms  or  instalment payment terms provided in relation  to  these  transactions.
5. INFORMATION ON OUR GROUP (Cont’d) As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Sasbadi Online.  (iii)  Shareholders and Directors  Sa~badi Online is our direct wholly-owned subsidiary and its Directors are Law King Hui and Lee Swee Hang.  (iv)  Subsidiary and Associated Companies  Sasbadi Online does not have any subsidiary or associated company.  5.3.5  Malaysian Book Promotions  (i)  History and Business  Malaysian Book Promotions was incorporated on 4 August 1994 in Malaysia under the Act as a private limited company. It was previously inactive before resuming operations in September 2013. It is principally involved in publishing and distribution of printed educational materials. Additional intended activity is to undertake organisation of book fairs and exhibitions.  (ii)  Share Capital  Malaysian Book Promotions’ present authorised share capital is RMIOO,OOO compnsmg 100,000 ordinary shares of RMl.OO each, of which RM75,005 comprising 75,005 ordinary shares ofRMI.OO each have been issued and fully paid-up.  There is no change in the issued and paid-up share capital of Malaysian Book Promotions for the past three (3) years up to LPD.  As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Malaysian Book Promotions.  (iii)  Shareholders and Directors  Malaysian Book Promotions is our direct wholly-owned subsidiary and its Directors are Law King Hui and Lee Swee Hang.  (iv)  Subsidiary and Associated Companies  Malaysian Book Promotions does not have any subsidiary or associated company.  5.3.6  MBP Publications  (i)  History and Business  MBP Publications was incorporated on 28 March 2014 in Malaysia under the Act as a private limited company and commenced operations in May 2014. MBP Publications is an imprint for printed educational materials for Malaysian Book Promotions.  (ii)  Share Capital  MBP Publications’ present authorised share capital is RM400,000 compnsmg 400,000 ordinary shares of RMl.OO each, of which RMI,OOO comprising 1,000 ordinary shares of RMl.OO each have been issued and fully paid-up.  52

 

5. INFORMATION ON OUR GROUP (Cont’d) The changes in the issued and paid-up share capital of MBP Publications since its incorporation up to LPD are as follows: Date of Allotment 28.03.2014  No. ofOrdinary Shares Allotted 1,000  Par Value RM 1.00  Consideration(l) Cash  Cumulative Total RM 1,000
Note: (I) There were no discounts, special terms or instalment payment terms provided in relation to this transaction. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in MBP Publications. (iii) Shareholders and Directors MBP Publications is our direct wholly-owned subsidiary and its Directors are Law King Hui and Lee Swee Hang. (iv) Subsidiary and Associated Companies MBP Publications does not have any subsidiary or associated company. 5.3.7 Sasbadi Learning Solutions (i) History and Business
Sasbadi Learning Solutions was incorporated on 3 April 2014 in Malaysia under the Act as a private limited company. It is currently dormant and its intended activity is to undertake the distribution of applied learning products and operation of applied learning centres.
(ii) Share Capital

Sasbadi Learning Solutions’ present authorised share capital is RM400,000 compnslng 400,000 ordinary shares of RM1.00 each, of which RMI,OOO comprising 1,000 ordinary shares ofRM1.00 each have been issued and fully paid-up. The changes in the issued and paid-up share capital of Sasbadi Learning Solutions since its incorporation up to LPD are as follows: Date of  No. of Ordinary  Cumulative  Allotment  Shares Allotted  Par Value  Consideration(l)  Total  RM  RM

 

03.04.2014 1,000 1.00 Cash 1,000 Note: (l) There were no discounts, special terms or instalment payment terms provided in relation to this transaction. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Sasbadi Learning Solutions.

5. INFORMATION ON OUR GROUP (Cont’d) (iii) Shareholders and Directors Sasbadi Learning Solutions is our direct wholly-owned subsidiary and its Directors are Law King Hui and Lee Swee Hang. (iv) Subsidiary and Associated Companies Sasbadi Learning Solutions does not have any subsidiary or associated company. THERESTOFTHIS PAGE HASBEENINTENTIONALLYLEFTBLANK 5. INFORMATION ON OUR GROUP (Cont’d) 5.4 LISTING SCHEME In conjunction with and as an integral part of our Listing, we proposed a Listing Scheme which was approved by the SC on 30 January 2014. The Listing Scheme involves the following: (i) Dividend Payment;
(ii) Acquisitions;

(iii) Public Issue; (iv) Offer for sale;
(v) Vendors’ Shareholdings Reorganisation; and
(vi) Listing and quotation on Bursa Securities

The above are inter-conditional and are viewed as one exercise undertaken to facilitate the Listing of our Company. 5.4.1 Dividend Payment Prior to the Acquisition of Sasbadi as set out in Section 5.4.2(i) of this Prospectus, Sasbadi had, on 3 April 2014 and 16 May 2014, paid to the Vendors dividend totalling RM8.5 million.
5.4.2 Acquisitions (i) Sasbadi Pursuant to the conditional sale and purchase agreement dated 3 May 2013, Sasbadi Holdings acquired the entire issued and paid-up share capital in Sasbadi of RM2,400,000 comprising 2,400,000 ordinary shares of RM1.00 each from the Vendors for a total purchase consideration of RM52,899,998 which was entirely satisfied by the issuance of 105,799,996 new Sasbadi Holdings Shares at an issue price ofRM0.50 per Share credited as fully paid. The purchase consideration of RM52,899,998 was arrived at on a willing buyer­willing seller basis and after taking into account the audited consolidated NA position ofSasbadi asat31 August 2012 ofRM50,887,000. The Acquisition ofSasbadi was completed on 19 May 2014. (li) Maya Press Pursuant to the conditional sale and purchase agreement dated 3 May 2013, Sasbadi Holdings acquired the entire issued and paid-up share capital in Maya Press of RM2.00 comprising two (2) ordinary shares ofRM1.00 each from Sasbadi for a total purchase consideration ofRM1.00 which was reflected as amount owing by Sasbadi Holdings to Sasbadi. The purchase consideration of RM1.00 was arrived at on a willing buyer-willing seller basis and after taking into account the audited net liabilities position of Maya Pressasat31 August 2012 ofRM21,308. The Acquisition ofMaya Press was completed on 19 May 2014. 5. INFORMATION ON OUR GROUP (Cont’dj (iii) Malaysian Book Promotions Pursuant to the conditional sale and purchase agreement dated 3 May 2013, Sasbadi Holdings acquired the entire issued and paid-up share capital in Malaysian Book Promotions of RM75,005 comprising 75,005 ordinary shares ofRMI.OO each from Sasbadi for a total purchase consideration of RM77,754 which was reflected as amount owing by Sasbadi Holdings to Sasbadi. The purchase consideration of RM77,754 was arrived at on a willing buyer-willing seller basis and after taking into account the audited NA position of Malaysian Book Promotions as at 31 August 2012 ofRM77,754. The Acquisition ofMalaysian Book Promotions was completed on 19 May 2014. (iv) Orbit Buku Pursuant to the conditional sale and purchase agreement dated 3 May 2013, Sasbadi Holdings acquired the entire issued and paid-up share capital in Orbit Buku of RMIO,OOO comprising 10,000 ordinary shares of RMI.OO each from Sasbadi for a total purchase consideration of RMI.OO which was reflected as amount owing by Sasbadi Holdings to Sasbadi. The purchase consideration of RMI.OO was arrived at on a willing buyer-willing seller basis and after taking into account the audited net liabilities position of Orbit Buku as at 31 August 2012 of RM511,294 and the increase in its paid-up share capital of RM9,998 comprising 9,998 ordinary shares of RMI.OO each on 5 March 2013. The Acquisition ofOrbit Buku was completed on 19 May 2014. (v) Sasbadi Online Pursuant to the conditional sale and purchase agreement dated 3 May 2013, Sasbadi Holdings acquired the entire issued and paid-up share capital in Sasbadi Online of RMIO,OOO eomprising 10,000 ordinary shares of RMl.OO each from Sasbadi for a total purchase consideration ofRM277,919 which was reflected as amount owing by Sasbadi Holdings to Sasbadi. The purchase consideration ofRM277,919 was arrived at on a willing buyer-willing seller basis and after taking into account the audited NA position of Sasbadi Online as at 31 August 2012 of RM267,92 I and the increase in its paid-up share capital of RM9,998 comprising 9,998 ordinary shares ofRM 1.00 each on 5 March 2013. The Acquisition ofSasbadi Online was completed on 19 May 2014.

5. INFORMATION ON OUR GROUP (Cont’d) 5.4.3 Public Issue In conjunction with our Listing, we will undertake a public issue of 21,200,000 new Shares, representing approximately 16.7% of our enlarged issued and paid-up share capital at the IPO Price to be allocated in the following manner: (i) Public Tranche
6,350,000 Public Issue Shares, representing 5.0% of our enlarged issued and paid-up share capital, have been reserved for application by the Public, ofwhich at least 50% shall be set aside for Bumiputera investors including individuals, companies, societies, co-operatives and institutions.
(ii) Pink Form Tranche

5,700,000 Public Issue Shares, representing approximately 4.5% of our enlarged issued and paid-up share capital, have been reserved for application by our eligible Directors, employees and persons who have contributed to the success ofour Group. (iii) Placement Tranche 9,150,000 Public Issue Shares, representing approximately 7.2% of our enlarged issued and paid-up share capital, have been reserved for placement to selected investors. The Public Issue Shares shall rank pari passu in all respects with our existing issued and paid­up Shares, including voting rights and the rights to all dividends and other distributions that may be declared subsequent to the date ofallotment thereof
5.4.4 Offer for Sale In conjunction with our Listing, the Offerors will offer up to 35,950,000 Offer Shares representing approximately up to 28.3% ofour enlarged issued and paid-up share capital at the IPO Price to be allocated in the following manner: (i) MIT! Tranche
Up to 12,700,000 Offer Shares, representing up to 10.0% of our enlarged issued and paid-up share capital to Bumiputera investors approved by the MIT!; and
(ii) Non-MIT! Tranche

Up to 23,250,000 Offer Shares, representing approximately up to 18.3% of our enlarged issued and paid-up share capital, have been reserved for placement to selected investors. 5. INFORMATION ON OUR GROUP (Cont’d)
5.4.5 Vendors’ Shareholdings Reorganisation During the prescription period, the Vendors will undertake a reorganisation exercise involving the transfer of 25,400,000 Sasbadi Holdings Shares which they received from the Acquisition of Sasbadi to Karya Kencana, an investment holding company substantially owned by the Vendors. In this regard, the Vendors have on 29 May 2013, entered into a conditional share sale agreement with Karya Kencana in respect of the Vendors’ Shareholdings Reorganisation for a purchase consideration of RM30,226,000. The purchase consideration will be satisfied via issuance of 99,000 new Karya Kencana Shares and the balance will be reflected as amount owing by Karya Kencana to the Vendors. Please refer to Section 8.1.2 of this Prospectus for further details on Karya Kencana. Details of the Vendors’ Shareholdings Reorganisation are as follows: No. of Shares to be transferred under the Vendors’ Shareholdings Reorganisation  To be satisfied via  New Karya Kencana Shares  Cash* RM  LawKingHui Lee Swee Hang Lee Eng Sang  12,700,000 6,350,000 6,350,000  49,500 24,750 24,750  15,063,500 7,531,750 7,531,750  25,400,000  99,000  30,127,000
Note: • Reflected as amount owing by Karya Kencana to the re:.pective vendors.
5.4.6 Listing on Bursa Securities Bursa Securities had on 10 April 2014, approved the admission ofour Company to its Official List and the listing ofand quotation for our entire enlarged issued and paid-up share capital of RM63,500,000 comprising 127,000,000 Shares on the Main Market ofBursa Securities. THERESTOF THIS PAGEHASBEENINTENTIONALLYLEFTBLANK 5. INFORMATION ON OUR GROUP (Cont’d)

 

5.5 KEY ACHIEVEMENTS, MILESTONES AND AWARDS (i) Our key achievements and milestones since inception are as follows: Year 1985 1987 1997 2002 2003 2004 2005 2009 20I0  Key Achievements And Milestones • Incorporation of Sasbadi and commenced operations as a publisher of educational materials. • Our first publication was a series of workbooks for primary six students, aimed at preparing these students for secondary levels of education. • Published our first textbook approved by the Ministry of Education, entitled ‘Bahasa Malaysia KBSM Tingkatan I’. • Began publishing Malay translated publications after securing the rights from Two-Can Publishing Limited, London and Dorling Kindersley Limited, London to publish their English science books namely ‘Make It Work!’ and ‘Eyewitness Science’ respectively. • Began our collaboration with MELTA in the publishing ofELT materials. • Incorporation of Maya Press as an imprint for general titles for Sasbadi. • The first general title ‘Spirit of the Keris’ was published under the imprint of Maya Press. • Moved into our own purpose-built building with an approximate built-up area of 76,945 sq. ft. in Kota Damansara, Selangor Darul Ehsan. • Broadened our range of educational products by securing the rights from LEGO Systems AlS to be the sole distributor of and exclusive partner in LEGO Education products for Brunei and Malaysia. • Organised our first Malaysia Robot Olympiad (now known as National Robotics Competition). • Organised our first book fair namely Bazar Baca in Malaysia and a total of 112 book fairs were organised throughout Malaysia. The Bazar Baca book fair has since been discontinued. • Appointed as the exclusive distributor of Pitsco Inc for the sale and distribution of Pitsco products to early childhood institutions and schools in Malaysia and granted non-exclusive right to market and sell Pitsco products to private users (home learning) in Malaysia. • Incorporation of Orbit Buku to expood our range of supplementary educational materials. • Sasbadi successfully won the rights from World Robot Olympiad Advisory Committee to co­organise the World Robot Olympiad 2012 in Malaysia.
5. INFORMATION ON OUR GROUP (Cont’d) Year 2010 (Cont’d) 2011 2012 2013 2014  Key Achievements And Milestones • Acquired Malaysian Book Promotions, a company involved in event management specialising in organising book fairs and conferences. After acquisition, this company ceased operations as event management company. • Orbit Buku commenced operations as a publisher of supplementary educational materials. • Incorporation of Sasbadi Online as part of our intention to expand into publishing of online educational resources targeting both teachers and students. • Launched our first online teaching product, Penjana Pentaksiran Instan, an instant assessment paper generator. • Appointed as the exclusive distributor of National Instruments Singapore (Pte) Ltd in Malaysia for the distribution of a range of applied learning products namely NI myDAQ and LabVIEW for Education to primary and secondary educational institutions for educational purposes. This was renewed in April 2014 under a non-exclusive arrangement which is valid until 31 December 2014. • Co-organised the World Robot Olympiad 2012 with the Government of Malaysia in Kuala Lumpur, the largest in the history of World Robot Olympiad (up to 21 February 2013) with a record participation of 403 teams from 30 countries. • Incorporation of Sasbadi Holdings. • Sasbadi Holdings converted into a public limited company to serve as an investment holding company and a vehicle for our proposed listing on the Main Market of Bursa Securities. • Sasbadi signed an MOD with YGMB to offer and support an online tutorial programme with self-assessment for 20,000 candidates of UPSR and SPM for 2013 in selected schools in Perak Darul Ridzuan under i-TRIM (InteraktifTuisyen Rakyat lMalaysia). • Sasbadi acquired the publishing rights and production files for a list of titles consisting mainly of National School Curriculum based educational materials from Pearson Malaysia. • Malaysian Book Promotions resumed operations to distribute printed educational materials. • Sasbadi Online was appointed by the Academy of Sciences Malaysia as the National Science Challenge (“NSC”) preliminary level online system developer and smart partuer for 2014 NSC. • Incorporation of MBP Publications as an imprint for printed educational materials for Malaysian Book Promotions. • Incorporation of Sasbadi Learning Solutions.
5. INFORMATION ON OUR GROUP (Cont’d) We are the recipients of the following awards and recognition in the course of our operations: Year Types of Awards and Recognition 2008 • Certificate of appreciation from Chairman of World Olympiad Steering Committee in recognition of the extraordinary efforts of the World Robot Olympiad 2008 National Organiser, Mr Law King Hui of Sasbadi. 2010 • National Book Award 2010 -Anugerah Perdana Munsyi Abdullah, Private Publisher category by Yayasan Pembangunan Buku Negara. • Certificate of appreciation from the Division of Sports, Arts and Co-curriculum of the Ministry of Education for the contribution of Sasbadi in the World Robot Olympiad 2010 held between 5 and 7 November 201 o. 2011 • Certificate of appreciation from thc Ministry of Education for the contribution of Sasbadi in the World Robot Olympiad 2011 held between 18 and 20 November 2011. 2012 • Sasbadi Online’s i-Learn -shortlist in the MSC Malaysia Asia Pacific ICT Awards (MSC Malaysia APICTA) 2012 under the Best of eLeaming category. • Certificate of appreciation from the Ministry of Education for the contribution of Sasbadi in the World Robot Olympiad 2012 held between 9 and II November 2012.
• Certificate of appreciation from YAB Tan Sri Dato’ Haji Muhyiddin bin Haji Mohd. Yassin, the Deputy Prime Minister and Minister of Education Malaysia and Chairman of World Robot Olympiad Board of Trustees in recognition of Sasbadi’s valuable contributions and support in the 9th World Robot Olympiad held betwecn 9 and II November 2012.

2013 • Letter of recognition from the World Robot Olympiad Secretariat in respect of the World Robot Olympiad 2012 held in Kuala Lumpur, Malaysia, which was the largest in the history of the World Robot Olympiad (up to 21 February 2013) with a record participation of 403 teams from 30 countries. THERESTOF THISPAGEHASBEENINTENTIONALLYLEFTBLANK 6. BUSINESS OVERVIEW OUR PRINCIPAL BUSINESS ACTIVITIES Our Group’s business model is summarised as below: Principal Business Complementary Business Business Focus ~
Revenue Streams { ‘-­Print Publishing
Online Publishing
Distribution of Applied Learning Products

Retail [ Bookstores
Main Customer Base 1-<

 

::=======:: ::=====: Ministry of Education (~ Competitive Advantages and Key Strengths
Availability of Experienced Content In-House Large Range of Managementand Development Econom\esof Scale Editorial PersonnelPublications Brand Awareness  Established Track Record  Extensive Distribution Network  Large Customer Base  Diversity in Product Range
(a) Business Focus and Revenue Stream We are principally a publisher of educational materials. We mainly undertake print publishing focusing on primary and secondary school education. While most of our educational materials are based on the Malaysian National School Curriculum, we also publish other non-curriculum based educational materials and undertake online publishing. For the FYE 31 August 2013 and FPE 28 February 2014, educational publishing accounted for 90.0% and 93.1 % of our total revenue respectively of which online publishing accounted for 7.4% and 0.2% (after netting off sales returns of approximately RMO.6 million mainly due to sales returns for our iPBS online educational products) of our total revenue respectively. Our business is complemented by distribution of applied learning products. These products comprise miniature building blocks and mechanical, electrical and electronic components, as well as devices for measuring and analysing live signals like electricity, sound and pressure, and software to create measurement and control systems. These products are designed to provide hands-on learning experience to students. Distribution of applied learning products accounted for 5.4% and 4.5% of our total revenue for the FYE 31 August 2013 and FPE 28 February 2014. 6. BUSINESS OVERVIEW (Cont’d) A small proportion of our business is in other activities such as, amongst others, supply of electronic dictionaries, publishing of general title books, distribution of third party publications and trading of paper. For the FYE 31 August 2013 and FPE 28 February 2014, other activities accounted for 4.6% and 2.5% of our total revenue respectively. (b) Main Customer Base As a publisher, one of our main functions is the distribution of our books and other materials to reach as many end-users or consumers as possible. As such, we rely on our customers who are primarily resellers that have their own network to sell to wide base of end-users and consumers. Our customer base mainly comprises the following: Retail bookstores, which constitute independent or chain bookstores that primarily sell to end users and consumers; Dealers, which are individuals and companies that service schools and households directly. Some of these dealers that service schools also operate retail bookstores and school bookshops; Wholesalers, which mainly resell our products to dealers; Ministry of Education, whereby we publish and distribute textbooks to schools under the National Education System as well as for installation of applied learning products in schools; PUblishers, who resell our products via their own networks and purchase paper from us; and Schools, who purchase our products including publications and applied learning products from us. We also service other categories of customers including, amongst others, educational training and learning centres, and the general public who make direct purchases with us during book fairs and exhibitions or place orders directly via our websites as weJJ as walk-in customers who make purchases from our office. However, these categories of customers only contributed 6.2% and 3.8% of our total revenue for the FYE 31 August 2013 and FPE 28 February 2014 respectively. (c) Competitive Advantages and Key Strengths (i) Brand Awareness We enjoy brand awareness of our ‘Sasbadi’ brand among school students, teachers and parents alike. Our brand awareness spans two generations, comprising parents and their school going children. This is the result of our 29 years of operations as a publisher of educational materials in the Malaysian market. Over the years, our publications have been used by many of our target customer groups and have thus provided us with a continuous process of increasing our brand awareness. During the past four and a half (4’/,) financial years of 31 August 2010 up to FPE 28 February 2014, we sold approximately 56 million copies of our publications. In addition, we have also been dealing with the Ministry of Education for approximately 27 years since 1987. This has helped us to develop brand awareness within the Ministry of Education where brand recognition is important when we tender for publication of textbooks. Our cloud-based learning educational resources, namely i-Learn was shortlisted as one of the finalists under the Best of eLearning category in the MSC Malaysia APICTA 2012. 6. BUSINESS OVERVIEW (Cont’d) The brand awareness that we have created provides us with a competitive advantage that enables us to sustain and grow our business. This is a key marketing advantage when compared to other publication companies with shorter operating history for brand building. (ii) Established Track Record We have a proven track record as a publisher of educational materials in Malaysia since 1985 where we grew from a small publishing house with revenue of RMO.7 million for the FPE 30 April 1986 to become one of the most established publishers in Malaysia with revenue of RM78.0 million for the FYE 31 August 2013. Our long established track record demonstrates our business resilience and sustainability compared to other publication businesses with much shorter operating history. This will form the basis for our continuing growth. Our established track record has also enabled us to leverage from our core competency in print publishing to expand our business into the next phase of online publishing. Online publishing accounted for 7.4% and 0.2% (after netting off sales returns of approximately RMO.6 million mainly due to sales returns for our iPBS online educational products) of our total revenue for FYE 31 August 2013 and FPE 28 February 2014 respectively. (iii) Extensive Distribution Network An extensive distribution network is key in ensuring that our products reach as many students, teachers and parents as possible. Our extensive distribution network is mainly based on our customers who are intermediaries where each of them uses its own network to sell to the end-users and consumers. For FYE 31 August 2013 and FPE 28 February 2014, our publications were directly distributed to approximately 130 and 90 retail bookstore customers operating approximately 200 and 190 retail bookstores in Malaysia respectively. For FYE 31 August 2013 and FPE 28 February 2014, our products were directly distributed to approximately 570 and 400 active dealers with their own network of distribution to schools and households in Malaysia respectively. The ease of availability of our products provides convenience and easy access for end-users who are mainly students and teachers. (iv) Large Customer Base For FYE 31 August 2013 and FPE 28 February 2014, our Group has built a base of approximately 1,380 and 620 active” customers respectively comprising mainly retail bookstores, dealers, wholesalers, the Ministry of Education, schools, educational training and learning centres and publishers. Note: Active customers refer to customers that have made at least one purchase from us during the ” FYE 31 August 2013 or FPE 28 February 2014, but exclude the general public who make direct purchases with us during book fairs and exhibitions or place orders directly via our websites as well as walk-in customers who make purchasesfrom our office. Our large customer base is important because as a publisher, one of our main functions is to make our publications available to as many people as possible. As such, our large number of customers, each with their own retail outlets and sales points, will help us disseminate our products to reach a wide target market in Malaysia. 6. BUSINESS OVERVIEW (Cont’d) Our wide customer base will also provide us with the platform for business growth as we are able to introduce our new publications and products to them. (v) Diversity in Product Range We publish a diverse range of educational materials including printed and online educational resources, and general title books. This diversity enables us to meet a wide range of educational needs of our end-users namely students and teachers. Within printed educational materials, we provide both National School Curriculum based and supplementary educational materials. Our National School Curriculum based educational materials for primary and secondary schools mainly include textbooks, revision guides, workbooks, assessment books, model test papers and readers covering various topics and subjects. Our supplementary educational materials mainly include a range of children’s books, teaching guides, language guides, glossaries and logbooks. Children’s books mainly include fiction and informational books such as educational comics, ill ustrated storybooks and illustrated reference books. Our online educational resources include cloud-based teaching and learning content, tools and platforms. Apart from educational materials, we also publish a range of general title books by Malaysian authors. Our range of applied learning products from LEGO Education, Pitsco and National Instruments are part of the hands-on learning tools that we provide to students. (vi) In-House Content Development Our Group has an experienced in-house editorial team that is also capable of developing contents for publication. This enables us to develop and write our own publications without relying solely on external authors and third party manuscripts. Our editorial team is able to develop National School Curriculum based and supplementary educational materials without relying on external authors. As at LPD, most of our members on the editorial team have experience as writers for publications. Approximately 53.1 % of our editorial team members have between 7 and 26 years of experience as writers for publications. With our in-house content development ability, we are able to react faster to changes in regulations, policies and practices from the Ministry of Education, as well as meeting changes in technological and market conditions as well as end-user preferences. (vii) Availability of Large Range of Publications Since the beginning of our operations in 1985 up to LPD, our Group has published approximately 11,460 titles. For FPE 28 February 2014, our Group has approximately 1,660 titles in circulation comprising approximately 790 existing titles and approximately 870 new titles (of which there were no new titles of past year examination papers) (Note: We have ceased reprinting, distributing, marketing and selling the past year examination papers with effect from 15 September 2013). For FYE 31 August 2013, our Group has approximately 1,800 titles in circulation comprising approximately 1,000 existing titles and approximately 800 new titles (of which 37 were new titles of past year examination papers). Our Group has published approximately 450 new titles (of which 17 new titles of past year examination papers) for FYE 31 August 2010 and approximately 740 new titles (of which 36 were new titles of past year examination papers) for FYE 31 August 2011. 6. BUSINESS OVERVIEW (Cont’d) (viii) (Ix) The increase in the number of new titles published was mainly due to the publishing of new series of workbooks and past year examination papers, expansion of existing series of revision guides as well as publishing of new translation works by Orbit Buku. Our Group published approximately 840 new titles (of which 38 were new titles of past year examination papers) for FYE 31 August 2012. We are able to leverage on the contents in thesc large range of publications for our online educational resources as well as new printed publications. By leveraging on our large range of existing publications, we are able to reduce the cost of developing new publications as well as reduce development time enabling faster time-to-market. In addition, our printed publications also serve as major sources of reference materials for development of online educational content for teachers and students. As it takes a long period of time to build a database of educational content, availability of large range of publications as resources provides us with a competitive advantage over new entrants and/or smaller players with minimal content ownership. Economies of Scale We publish a wide range of educational materials focusing on National School Curriculum amounting to approximately 11,460 titles since we commenced business. In Malaysia, our publications are relevant to approximately five (5) million primary and secondary school students as at 30 June 2013. As such, we enjoy economies of scale where we are able to sell a wide range of our products to a large potential target customer group. This enables us to defray our overhead costs across a wide range of products to service a large end-user base. We utilise third party printing services, and we purchase paper for the printing of our own publications. As such, we enjoy economies of scale through large volume printing orders for our publications and bulk purchases of paper. This provides us with strong bargaining power to obtain favourable commercial terms from our suppliers such as bulk discounts, good credit terms and prompt logistics arrangements. Economies of scale is one of our key strengths to enable us to remain cost competitive to date. Experienced Management and Editorial Personnel We have an experienced management team to lead and manage our business operations. Our Managing Director, Law King Hui, together with Lee Swee Hang and Lee Eng Sang, our Executive Directors, have been managing our Group since we began operations in 1985. Each of them has between 33 and 39 years of experience in the publishing industry. In addition, as at LPD, we have 64 personnel on our editorial team including managerial personnel. Approximately 46.9% of our editorial team members have been with our Group for at least 7 years. Our editorial team is headed by Roslan bin Yahya, our Publishing Manager with approximately 26 years of experience in the publishing industry. Our team of experienced editorial personnel is capable of creating our own publications in-house to ensure that we are not fully dependent on external authors. 6. BUSINESS OVERVIEW (Cont’d) The long years of service by our management and editorial teams indicate stable and continuing relationships with our Group, which are beneficial to our business operations, sustainability and growth. 6.2 OUR PRODUCTS AND SERVICES Our business activities comprise: Educational publishing; • Distribution of applied learning products; and
• Other activities.

We are principally a publisher of educational materials. We mainly undertake print publishing focusing on primary and secondary school education. While most of our educational materials are based on the Malaysian National School Curriculum, we also publish other non-curriculum based educational materials. We also undertake online publishing. Our business is complemented by distribution of applied learning products. These products comprise miniature building blocks and mechanical, electrical and electronic components, as well as devices for measuring and analysing live signals like electricity, sound and pressure, and software to create measurement and control systems. A small proportion of our business is in other activities such as supply of electronic dictionaries, publishing of general title books, distribution of third party publications and trading of paper. 6.2.1 Educational Publishing Overall Educational Publishing
Our educational publishing activity is undertaken by our subsidiary companies, Sasbadi, Orbit Buku, Sasbadi Online and Malaysian Book Promotions. Each of our four (4) subsidiary companies focuses on the publishing of different types of materials. These are as follows: Subsidiary Com an Sasbadi Orbit Buku Sasbadi Online Malaysian Book Promotions Main Types of Publications National School Curriculum based educational materials and supplementary educational materials Supplementary educational materials Online educational resources National School Curriculum based educational materials The publishing of National School Curriculum based educational materials is undertaken by our subsidiary companies, Sasbadi and Malaysian Book Promotions. Our National School Curriculum based educational materials are mainly for primary and secondary levels of education. In addition, we also offer post-secondary educational materials as at LPD. Our National School Curriculum based educational materials include prescribed materials by the Ministry of Education as well as non-prescribed materials. The publishing of supplementary educational materials is mainly undertaken by our subsidiary companies, Sasbadi and Orbit Buku. Our supplementary educational materials are mainly non­curriculum based materials for general teaching, learning as well as to facilitate the learning process.
6. BUSINESS OVERVIEW (Cont’d) The publishing of online educational resources is mainly undertaken by our subsidiary company, Sasbadi Online. Our online educational resources include a range of online contents. Our educational publishing operations mainly involve the following activities: (i) Content Development We have an in-house editorial team that is responsible for content development for our educational materials. Through our in-house content development efforts, we have successfully developed and published a range of National School Curriculum based educational publications for primary and secondary levels of education and supplementary educational materials which were written and edited in-house. We are also involved in content development for various online software and databases for teaching and learning purposes through joint-effort with our technology partner. Please refer to Section 6.11 of this Prospectus for further details on the joint-effort with our technology partner. As at LPD, we have an editorial team of 64 personnel (including managers) who are involved in content development on National School Curriculum based educational materials and online educational resources. (ii) Manuscript Sourcing As a publisher, we rely on contents developed in-house as well as external writers for our publications. It is common for us to acquire manuscripts from experienced lecturers, teachers and examiners as well as commissioning external writers for our National School Curriculum based and supplementary educational materials. Please refer to Section 4.1.22 of this Prospectus for further details on the utilisation of external writers in creating publications. (iii) Translation Rights and Territorial Rights Acquisition We also acquire translation rights and territorial rights for our supplementary educational materials. We may acquire translation rights from foreign publishers to translate foreign language publication into Bahasa Malaysia for reproduction and distribution in Malaysia. Similarly, we may also acquire territorial rights from foreign publishers to reproduce and distribute a selection of their publications in Malaysia. (iv) Editing We undertake in-house editing for almost all of our publications. Editing commonly involve various processes such as selection, syotax and content correction, condensation, expansion, organisation and modification of infonnation in the manuscripts as well as alignment of writing styles to in-house styles to produce final texts that are complete and accurate for our publications. As at LPD, we have an editorial team of 64 personnel (including managers), who work closely with external authors for the development of our educational materials.

 

6. BUSINESS OVERVIEW (Cont’d) (v)
(vi)

(vii) (viii) (ix) Artwork and Design We undertake in-house artwork and design for our publications. Artwork and design commonly involve the following: Insertion of artworks and images such as pictures, photographs, symbols and illustrations; • Layout and cover design of publications; Selection and determination of font styles and sizes, colours of texts and layout, paper specifications and quality as well as binding methods;
• Typesetting and typography; and
• Proof reading and pre-press proofing prior to production and printing.

As at LPD, we have a total of42 personnel (includes managers, designers, illustrators and desktop publishing operators), who are involved in artwork and design. Printing and Production Printing and production of our publications is entirely sub-contracted to third party printers. However, majority of the materials required for the printing and production process including paper, packaging materials, printing plates and films are provided by us. Software Development We are actively involved in software development through collaboration with our technology partner for our online educational resources. These activities include system planning and specification, system and web design, programming and system testing. Content Database Development and Maintenance We are involved in developing and maintaining a content database of our publications. This database of our contents is used to develop our online resources. In addition, we also use our content database to develop new educational materials as a large proportion of the educational content are relatively static information comprising historical and geographical information, language syntax and vocabulary, and various scientific and mathematical information, rules, theorems and formulae. The database serves as a useful resource for all our in-house writers and editors. Marketing and Distribution As a publisher, one of our key functions is the marketing and distribution of materials to reach the end-user or consumers. As such, we undertake marketing for all our publications, and we distribute our publications through various channels comprising retail bookstores, dealers, wholesalers, schools and publishers. We also supply to schools through the Ministry of Education. In addition, other modes of distribution include, amongst others: Internet sales for our range of supplementary and online educational resources; • Sales of our educational publications via book fairs and exhibitions in which we participate;
• Direct distribution of our applied learning products to educational training and learning centres; and
• Sales to walk-in customers who make purchases from our office.

6. BUSINESS OVERVIEW (Cont’d) Nevertheless, sales via internet, book fairs, exhibitions, educational training and learning centres, at our office and others are undertaken on a small scale basis. As at LPD, we have 53 sales and marketing personnel (including managers and directors), who work closely with our customers. 6.2.1.1 Print Publishing Our print publishing activity includes publishing National School Curriculum based educational materials and supplementary educational materials. Our Group published approximately 450 new titles for FYE 31 August 2010 (of which 17 were new titles of past year examination papers), approximately 740 new titles for FYE 31 August 2011 (of which 36 were new titles of past year examination papers), approximately 840 new titles for FYE 31 August 2012 (of which 38 were new titles of past year examination papers), approximately 800 new titles for FYE 31 August 2013 (of which 37 were new titles of past year examination papers) and approximately 870 new titles for FPE 28 February 2014 (of which there were no new titles of past year examination papers). The number of new titles that we publish yearly is primarily dependent on meeting market needs and consumer preference, our ability to source external materials, secure publishing rights from government authority and third parties, as well as output from our internal technical team. In that regard, we do not have a fixed capacity and when required we can increase our in-house technical team members as well as source more external materials to increase the number of new titles that we publish in anyone year. (i) National School Curriculum Based Educational Materials Our range ofNational School Curriculum based educational materials mainly include: • Textbooks;
• Revision guides; Workbooks;

• Assessment books;
• Model test papers; Readers; and

 

• Past year examination papers (Note: We have ceased reprinting, distributing, marketing and selling the past year examination papers with effect from 15 September 2013). (a) Textbooks Textbooks are National School Curriculum based educational materials prescribed by the Ministry of Education as the main source of teaching and learning materials for use in classrooms. Texthooks normally cover the syllabuses outlined in the National School Curriculum. Some of our textbooks also come with CD-ROM which contains a variety of exercises, information and internet links to complement the contents in the textbooks. As at LPD, we mainly publish textbooks of the following subjects for primary levels of education: 6. BUSINESS OVERVIEW (Conl’d) Subiect  Primarv Levels of Education  Science  Year 4 to Year 6  Mathematics  Primary
Some examples ofour textbooks for primary levels ofeducation are shown below: Primary Levels of Education As at LPD, we mainly publish textbooks of the following subjects for secondary levels ofeducation:

 

Subiect  Secondary Levels of Education  Science  Form 2 to Form 3  Principles of Accounting  Form 4 to Form 5  English  Form 1  Geographv  Basic Economics  Form 4  Mathematics  Form 5
Some examples ofour textbooks for secondary levels of education are shown below: Secondary Levels of Education
Form 1 Geography Form 3 Science Form 4 & 5 Principles of Accounting

 

6. BUSINESS OVERVIEW (Cont’d) (b) Revision Guides Our revision guides are developed based on the syllabuses in the National School Curriculum for revision purposes. We mainly publish revision guides for primary and secondary levels of education and a small proportion for post­secondary levels of education. Our revision guides are mainly used by students as study companions as well as teachers as teaching references. We have various collections of revision guides to cater for quick and comprehensive revisions. For primary levels of education, we mainly publish reV1SlOn guides of the following subjects for primary school achievement test (UPSR) preparations: English; Bahasa Malaysia; Mathematics; and Science.
Some examples of our collections of revision guides for primary levels of education are shown below: Kunci Emas KSSR
Year 4 Bahasa  Year 4 History  Year 4 Science  Year 4  Malaysia  Mathematics  Kunci Emas UPSR

Bahasa Malaysia  Mathematics  Science  Bahasa Malaysia  Language System  Writing  and  Comprehension

 

6. BUSINESS OVERVIEW (Cont’d) Nexus Tuntas UPSR
Bahasa Malaysia English Grammar Mathematics Science Writing Target Tuntas UPSR
Bahasa Malaysia English Mathematics Science Xpress Tuntas UPSR
Bahasa Malaysia English Mathematics Science 6. BUSINESS OVERVIEW (Coni’d)
For secondary and post-secondary levels of education, we mainly publish revision guides for the following subjects: Subiect  Secondary and Post-Secondary Levels of Education  English  Form I to Form 3; SPM  Mathematics  Bahasa Malaysia  Form 1 to Form 3; SPM andSTPM Geography  History  Biology  Form 4 to Form 5; SPM andSTPM Chemistry  Physics  Islamic Studies  Form 1 to Form 5; SPM  Science  Literature (1)  Living Skills: Commerce and Entrepreneurship  Form 1 to Form 3  Living Skills: Home Economics  Living Skills: Technical Skills  Moral Education  SPM  Additional Mathematics  Form 4 to Form 5; SPM  Basic Economics  Commerce  Islamic Concepts  Principles ofAccounting  Business Studies  STPM  Economics  General Studies  Mathematics (Technology)  Malaysian University English Test (MUET)
Note:  (1)  Literature is a component afthe Bahasa Malaysia and English subjects. It is not a standalone subject within the National School Curriculum. This includes publication for Form 1 to Form 5 and SPM.

6. BUSINESS OVERVIEW (Cont’d) Some examples of our collections of revision guides for secondary levels of education are shown below: Nota & Praktis Yes! PBS
Fonn I History Fonn I Geography Form 2 Islamic Fonn 2 Science Studies
Fonn I Living  Form I Living  Fonn 2 Science  Form 3 History  Skills: Technical  Skills: Home  Skills  Economics  Kunci Emas SPM

Fonn 4 Chemistry Fonn 4 Principles Form 5 Physics Fonn 5 Biology of Accounting
6. BUSINESS OVERVIEW (Cont’d) Nexus Tuutas SPM
Bahasa Malaysia English 1119 Chemistry History Target Tuntas SPM

 

Additional Principles of Mathematics Accounting

 

 

History Basic Economics
6. BUSINESS OVERVIEW (Cont’d) Kupasan & Kajian Tuntas Komsas
Form I Literature Form 2 Literature Form 3 Literature Form 5 Literature eNotes SPM Write It Ri ht!
Chemistry Physics Biology SPMEnglish 1119 Note: Titles acquiredfrom Pearson Malaysia and distributed by Malaysian Book Promotions. For further information, please refer to Section 5.1 ofthis Prospectus. Essential Esensi
Form I Form 2 English Form 4 Physics SPM Chemistry Mathematics Note: Titles acquiredfrom Pearson Malaysia and distributed by Malaysian Book Promotions. For further information, please refer to Section 5.1 ofthis Prospectus.

6. BUSINESS OVERVIEW (Cont’d) Some examples ofour collections of revision guides for post secondary levels of education are shown below: Pre-U Text STPM Tok’ p,,·u STPM Tok, P,,·U STPM P,e·U,”” STPM
Pengajian MUETft Perniagaan ~
2nd Term  2nd Term  I” Term Business  MUET  Economics  Mathematics  Studies  (Macroeconomics)  (Technology)
Note: Titles acquiredfrom Pearson Malaysia and distnbuted by Malaysian Book Promotions. For fUrther infonnation, please refer to Section 5.1 ofthis Prospectus. (c) Workbooks Our workbooks are developed based on the syllabuses in the National School Curriculum for use as homework or formative exercises in schools. We mainly publish workbooks for primary and secondary levels ofeducation. For primary levels of education, we mainly publish workbooks of the following subjects: Primary Levels of  Subiect  Education  Communicative Arab Language  Year I to Year 6  English  Islamic Studies  Bahasa Malaysia  MathematICS  Science  Civics and Citizenship Education  Year 4 to Year 6  Lrving Skills  Local Studies  Moral Education  Physical and Health Education
6. BUSINESS OVERVIEW (Cont’d) Some examples of our collections of workbooks for primary levels of education are shown below: Lembaran Berteraskan PBS KSSR
Year I Bahasa Malaysia  Year I Mathematics  Year 2 World of Science and Technology  Year 3 English  Instrnmen Asas Berteraskan PBS KSSR

 

PBS

English ,~,
r~}, ,
Year 2 English I!SIl !:Wll lNSrlWMEN MAS INSrllllMEN ASAS

Year 3 World of Science and Technology
Lembaran Berteraskan Doknmen Standard Knriknlnm dan Pentaksiran (DSKP) KSSR
Year 4 Bahasa Year 4 English Year 4 Year 4 Science Malaysia Mathematics 6. BUSINESS OVERVIEW (Cont’dj Lembaran Berasaskan Panduan Perkembangan Pembelajaran Murid (PPPM) KSSR
Year 1 English  Year 2  Year 2 World of  Year 3 Bahasa  Mathematics  Science and  Malaysia  Technology
For secondary levels of education, we mainly publish workbooks of the following subjects: Subiect  Secondary Levels of Education  English  Form I to Form 5  History  Islamic Studies  Literature (I)  Bahasa Malaysia  Mathematics  Moral Education  Science  Civics and Citizenship Education  Eorm I to Form 3  Geography  Living Skills: Commerce and Entrepreneurship  Living Skills: Home Economics  Living Skills: Technical Skills  Additional Mathematics  Form 4 to Form 5  Basic Economics  Biology  Chemistry  Commerce  Physics  Principles of Accounting
Note:  (1)  Literature  is  a  component  of Bahasa  Malaysia  and  English subjects.  It  is  not  a  standalone subject within the National School Curriculum,
6. BUSINESS OVERVIEW (Cont’d) Some examples of our collections of workbooks for secondary levels of education are shown below: Semarak PBS Lembaran Kerja Berteraskan Dokumen Standard Prestasi KBSM
Semarak A++ SPM Aktiviti dan Praktis KBSM
Form 4 Bahasa Form 5 English Form 5 Additional Form 5 History Malaysia 1119 Mathematics
Form 2 Literature Form 3 Literature Form 4 Literature Form 5 Literature
6. BUSINESS OVERVIEW (Cont’d) Lembaran Berasaskan Panduan Perkembangan Pembelajaran Murid (PPPM) KBSM
Form 1 Bahasa Form 1 Science Form 1 Form 2 English Malaysia Mathematics
Form 2 Literature Form 3 Literature Form 4 English Form 5 Bahasa Malaysia
Note: Titles acquired from Pearson Malaysia and distributed by Malaysian Book Promotions. For further information, please refer to Section 5.1 afthis Prospectus. Super Skor

Form 1 History Form 2 Geography Form 3 Bahasa Malaysia
Note: Titles acquiredfrom Pearson Malaysia and distributed by Malaysian Book Promotions. For further information, please refer to Section 5.1 ofthis Prospectus.

 

6. BUSINESS OVERVIEW (Cont’d) (d) Assessment Books Our assessment books are used by students and teachers to test and evaluate students’ understanding and knowledge of various specific topics and subjects. We mainly publish assessment books for primary and secondary levels of education. For primary and secondary levels of education, we mainly publish assessment books for the following subjects: Snbiect  Primary and Secondary Levels of Edncation  English  Year I to Year 2 and Year 4 to Year 6; Fonn I to Fonn 5; UPSRandSPM Bahasa Malaysia  Mathematics  Year) to Year 6; Fonn I to Fonn 5; UPSRandSPM Science  History  Fonn ) to Fonn 5; SPM Islamic Studies  Geography  Fonn I to Fonn 3  Living Skills: Commerce and Entrepreneurship  Form 1 to Fonn 2  Living Skills: Home Economics  Living Skills: Technical Skills  Literature (1)  Fonn 4 to Fonn 5  Additional Mathematics  Fonn 4 to Fonn 5; SPM  Basic Economics  Fonn 4 to Fonn 5  Commerce  Biology  SPM  Chemistry  Islamic Concepts  Moral Education  Physics  Principles of Accounting
Note: (1) Literature is a component of Bahasa Malaysia and English subjects. It is not a standalone subject within the National School Curriculum. Some examples of our collections of assessment books for primary and secondary levels of education are shown below: 6. BUSINESS OVERVIEW (Cont’d) Homework Bestari Rampaian KBSR

HOME HOME. HOME HOME
WORK WORK· WORK WORK :/,’ ::’ .’f!J, ttl tJ, “(i ”
i :’.~:
Year 5 Bahasa Year 5 Year 6 English Year 6 Science Malaysia Mathematics Modul Akses A PKSR UPSR KBSR
Year 5 Bahasa  Year 5 Science  Year 6 English  Year 6  Malaysia  Mathematics  Modul Kerja Rumah KBSRJUPSR

Year 5 English Year 5 Bahasa Year 6 Year 6 Science Malaysia Mathematics 6. BUSINESS OVERVIEW (Cont’d) Penilaian Topik Menguasai Soalan-Soalan Bertopik Standard UPSR _!’.!-r-.J)LAIAN TOPIK w; _I’J.NILAIAN TOPIK ,'(t, PENILAIAN TOPIK ,if _.fENllAJAN TOPIK :N
Bahasa Malaysia Got It!
Year 5 English Grammar Year 6 English Grammar Note: Titles acquiredfrom Pearson Malaysia and distributed by Malaysian Book Promotions. For further information, please refer to Section 5.1 ofthis Prospectus. Penilaian Topik Menguasai Soalan-Soalan Bertopik Standard SPM PENILAIAN TorlK ?rPENllAIAN TOPIK ,'(( PEN!LAJAN TOPIK xx’ M~NGUASAIMf~~IJASAI MERGUASAI ~()AL’\N-5D!\L\’\/SOALANSOALA.i””:.{ SOAIANSOt\LN\’ -: B..E…RT.0.PIKk iI…ii” 1….. PIK~.i1BERroB.ERTO.PIK~fw neta rd_ 5_19 nd a r d-0j.”1 ]’ ~t~!!da r d~’

 

Additional Chemistry Mathematics Mathematics Modul Kerja Rumah KBSM/SPM

Form 4 History Form 5 Bahasa Malaysia
6. BUSINESS OVERVIEW (Cont’d) Gusto! Koleksi Soalan To ikal
Form I English  Form 2 English  Form 4 English  Form 5  Grammar  Grammar  Mathematics  Workout  Workout
Note: Titles acquiredfrom Pearson Malaysia and distributed by Malaysian Book Promotions. For further information, please refer to Section 5.1 ofthis Prospectus. (e) Model Test Papers Model test papers are mock copies of examination papers. These are mostly used by students as practice materials to prepare for examinations. Teachers may use them to assess students’ performance on a particular subject. We mainly publish model test papers of the following subjects for UPSR and SPM preparations: Subiect  Primary and Secondary Levels of Education  En~lish  UPSR; Form I to Form 3 and SPM  Bahasa Malaysia  Mathematics  Science  History  Form I to Form 3 and SPM Islamic Studies  GeolYTanhv  Form I to Form 3  Living Skills: Commerce and Entrepreneurship  Livin. Skills: Home Economics  Living Skills: Technical Skills  Additional Mathematics  SPM  Basic Economics  BioloQV  ChemistrY  Commerce  Moral Education  Physics  Princioles ofAccounting  Visual Arts Education
6. BUSINESS OVERVIEW (Cont’d) Some examples of our collections of model test papers for primary and secondary levels of education are shown below: Kertas Model Semarak UPSR 2014
Bahasa Malaysia English Mathematics Science Kertas Model Semarak SPM 2014
Chemistry  History  Physics  Additional  Mathematics  ePad Kertas Model UPSR

Bahasa Malaysia English Mathematics Science Note: Titles acquiredfrom Pearson Malaysia and distributed by Malaysian Book Promotions. For further information. please refer to Section 5.1 ofthis Prospectus. 6. BUSINESS OVERVIEW (Cont’d)

Biology Mathematics Physics Note: Titles acquiredfrom Pearson Malaysia and distributed by Malaysian Book Promotions. For further information, please refer to Section 5. J ofthis Prospectus. (I) Readers We publish readers that are developed to improve the reading and comprehension skills of students. These collections of readers normally include short stories and poetries in Bahasa Malaysia and English for various primary levels of education. We mainly publish readers for primary levels of education from year I to year 6. Some examples of our collections of readers are shown below: Cahaya Nilam KBSR
Year I : Puisi dan Lagu
Power Readers KBSR

 

Year 1: The Best Year I: The Jar of Year 2: Tea at Mr Year 3: Follow That Animal Sweets and Mrs Beetles’ Girl
6. BUSINESS OVERVIEW (Conl’d) Gema Nilam KBSR
Grade 1: The Little  Grade 2: Nasib Didi  Grade 4:  Grade 5: The  Boy and The Giant  dan Doli  Kembalikan Cahaya  Dragon Boat Race  Nebula  Bacaan Luas KSSR

Year I: Extensive Year 2: Extensive Year 3: Extensive Year 4: Extensive Reading Reading Reading Reading (g) Past Year Examination Papers In 2010, Sasbadi was appointed by YGMB to reprint, distribute, market and sell past year examination papers for SPM and STAM. Subsequently, over the years, Sasbadi was awarded the licence by YGMB to reprint, distribute, market and sell past year examination papers for UPSR, PMR, STAM and SPM. However, the licence was not renewed upon its expiry on 14 September 2013 and we have ceased reprinting, distributing, marketing and selling the past year examination papers with effect from 15 September 2013. YGMB is the licence holder for the reprinting, distribution, marketing and sales of Malaysia’s past year examination papers including UPSR, PMR, STAM and SPM. During the period when we were licensed by YGMB to publish the past year examination papers, we were mainly involved in publishing past year examination papers of the following subjects for UPSR, PMR and SPM preparations: Chinese, English, Bahasa Malaysia, Mathematics and Science for UPSR, PMR and SPM; Geography, History and Islamic Studies for PMR and SPM; Communicative Arabic Language, Living Skills: Commerce and Entrepreneurship, Living Skills: Home Economics and Living Skills: Technical Skills for PMR; and
6. BUSINESS OVERVIEW (Cont’d) Additional Mathematics, Basic Economics, Biology, Chemistry, Commerce, Islamic Concepts, Islamic Law Education, Physics, Principles of Accounting, and Quran and Sunnah Education for SPM. We only published past year examination papers for STAM on a small scale basis as STAM is only undertaken by a small group of students. We have our own sales and marketing team to promote our non-prescribed National School Curriculum based educational materials including revision guides, assessment books, model test papers and readers to teachers in schools who will in tum recommend to their students. As for workbooks, our sales and marketing team would promote them to school authorities for their evaluation and possible selection as classroom and study materials. Selected publications are then listed in the respective schools’ booklists. Our non-prescribed National School Curriculum based educational materials are compatible with the syllabuses outlined in the National School Curriculum. Our collections of non-prescribed National School Curriculum based educational materials are available via our dealers and outlets including retail bookstores and school bookshops. In addition, we also distribute these educational materials to wholesalers and third party publishers and schools on a small scale basis. Our prescribed National School Curriculum based educational materials, namely textbooks are sold mainly to the Ministry of Education. The Ministry of Education provides free loan books to all students in government, government-assisted and Islamic schools under the Textbooks Loan Scheme (Skim Pinjaman Buku Teks). However, textbooks are also sold to any students who wish to purchase them and to students of independent and private schools who are not covered by the said scheme. (ii) Supplementary Educational Materials Our range of supplementary educational materials mainly includes children’s books, teaching guides, language guides, glossaries and logbooks for general teaching, learning as well as to facilitate the learning process. These are mainly non-curriculum based materials. Our range of children’s books mainly includes fiction and informational books, such as educational comics, illustrated storybooks and illustrated reference books in English and Bahasa Malaysia. Our teaching guides are developed and published through collaboration with MELTA. MELTA’s role in the collaboration is focused on writing while our role is focused on editing, design and distribution. Language guides are educational materials used for practicing and self-study to improve language skills. Glossaries are for mathematics and science. Logbooks are used for recording co-curricular and classroom activities undertaken in schools. Our range of supplementary educational materials are mainly available via two channels: • Children’s books such as educational comics and illustrated reference books are marketed via our dealers to schools and households; and 6. BUSINESS OVERVIEW (Cont’d) Others such as children’s illustrated storybooks, teaching guides, language guides, glossaries and logbooks are sold through our dealers and outlets including retail bookstores and school bookshops. Some examples of our collections of supplementary educational materials are listed as follows: Educational Comics Why?

 

Computer Robot
Lift Rocket Helicopter Vacuum cleaner Illustrated Reference Books Discovery (Malay)

 

Level 2: Angry Level 4: Earth in Weather Peril

6. BUSINESS OVERVIEW (Cont’d) Discovery (English)

 

Level I: Earth’s Treasures
Illustrated Reference Books Siri Selamat
When There is a Flood  Stop the BuJIies  Watch Out for Landslides  Injured while Playing  Illustrated Reference Books Visual Dictionar Animal Planet  Au mented Reali

Animals iDinosaur iSolar System

6. BUSINESS OVERVIEW (Cont’d) Illustrated Storybooks Adapted Malay History Series

Temenggung Putera yang Bijaksana Teachin Guides
Pedagogies for Creative & Critical Thinking in ELT
Lo books
Logbook: Sport (Primary School) Srikandi Melaka Discourse Analysis in Malaysian English Language Teaching
Logbook: Uniform Body (Secondary School)
Padah Mengingkari Wasiat

Practices and Issues in English Language Teacher Development
School Planning and Communication Book (Primary School)
Fitnah Membawa Padah

Teaching of Grammar

Record Book: NILAM Programme (Secondary School)
6. BUSINESS OVERVIEW (Cont’d) 6.2.1.2 Online Publishing Online publishing is undertaken by our subsidiary company, Sasbadi Online. Our online educational resources were developed for learning and teaching purposes. This is a subscription based service. Access is via the internet. Our online educational resources include the following: (i) Bank Soalan (Instant Assessment Generator) Bank Soalan (Instant Assessment Generator), a new edition of Penjana Pentaksiran Instan, was developed to facilitate quick and easy creation of assessment and test papers for teachers. The software is powered by a database of more than 100,000 questions that are developed based on the syllabuses and examination formats of the Ministry of Education. In addition, the software allows users to add and modify the questions.
Bahasa Malaysia Year 4,5,6 Biology Form 4,5 (ii) i-Learn i-Learn is an interactive online learning platform for students to access our database of resources, covering various subjects for Year 4 to 6 under the primary levels ofeducation and Form 1 to 3 under the lower secondary levels of education. The software comprises five (5) modules including digital notes, mind-map builder, self­assessment module, progress tracker and reward, which work together to promote self­directed learning and collaborative learning by enabling users to share their learning with their network of classmates and friends .

•. .

 

i-Learn (for 30 day  i-Learn (for 60 day  i-Learn (for 12­ subscription)  subscription)  month subscription)  (iii)  i-Teach
i-Teach is a teaching platform for teachers, equipped with teaching resources and tools. This is designed to assist teachers in their teaching and assessment process. The software includes the following features: Teaching resources including lesson planning design and resource database; and • Assessment tools such as progress tracking, reporting and analysis. 6. BUSINESS OVERVIEW (Cont’d)
i-Teach (Primary Schools) i-Teach (Secondary Schools) (iv) iPBS/iPS iPBS/iPS is a software tool developed for teachers to facilitate quick and easy creation of materials for lessons and assessment papers based on the new school based assessment format, which has replaced PMR in 2014 and will be incorporated with UPSR in 2016. Previously known as iPBS, this series of product has been modified to iPBS (PPPM) and iPS (DSKP) due to the implementation of the newly modified school based assessment (PBS) policy in April 2014. iPBS (PPPM) is for Year I to 3 under the primary levels of education and Form I to 3 under the secondary levels of education whilst iPS (DSKP) is for Year 4 under the primary levels of education.
?BS Ic3 ‘?S & ¥ 5,

 

 

CSK?

 

 

,…, -Haw!’-*.+IM iPBS Mathematics Year 2 iPS Mathematics Year 4 iPBS English Form I (v) Mind-Map Mind-Map is an interactive system that allows users to build mind maps on computers, tablets or smart phones. Users can embed text, graphics, and videos from the web to build a multimedia mind map. In a classroom environment, teachers can assign mind maps to students, either as individual or collaborative work. Finished maps are stored in the gallery for public viewing and can be shared through Facebook.
6. BUSINESS OVERVIEW (Cont’d)
Mind-Map English Year 1,2,3 Mind-Map Bahasa Malaysia Year 4,5,6 (vi) Most Essential Exam Techniques (MEET) MEET is a collection of videos that are aimed at tackling difficult questions in the Malaysian school exams whereby the questions and strategies for answering the questions are presented in person by a teacher.
Dr Raj’s Most Essential Exam Techniques -SPM Our i-Learn is intended for students and is available via retail bookstores and dealers who sell to schools and households as well as via our website, http://www.sasbadionline.com. and a third­party website, http://store.frogasia.com. Our Bank Soalan, i-Teach and iPBS/iPS online resources are intended for teachers only and are available to schools via our dealers. Our Mind-Map is intended for teachers and students, and is available to schools via our dealers. Our MEET is intended for students and is available via our website, http://www.sasbadionline.com. In conjunction with a third party technological company, we have also conducted a pilot programme to use our online contents for the teaching and learning of Science and English for teachers and students. The pilot programme was conducted for a period oftwo (2) months from 9 September 2013 to 8 November 2013 in three (3) schools within Malaysia. In May 2014, Sasbadi Online has agreed in principle to grant a publishing house in Jakarta, Indonesia the rights to use and sell i-Learn in Indonesia under licence. This is pending the signing ofthe license and services agreement which is exclusive for the territory ofIndonesia. As at LPD, we are also in talks with some local and overseas parties to expand our online publishing presence. Some of these initiatives include using our contents on the government’s virtual learning platform for public schools in Malaysia, and development of applications and contents for mobile devices. 6. BUSINESS OVERVIEW (Conf’d) 6.2.2 Distribution of applied learning products Distribution of applied learning products is undertaken by our subsidiary company, Sasbadi. Applied learning products are a range of products that enable learners to experience practical and hands-on learning as well as to stimulate their creativity and higher order thinking skills. Sasbadi is currently appointed by various product principals as the partner and distributor for the respective range of applied learning products in specified territories as follows: Product Princi al  Ran e of Product  Territor  LEGO System NS Pitsco Inc NI Southeast Asia Sdn Bhd  Early learning, machines and mechanisms and robotics Robotics NI myDAQ, LabVIEW for Education and NI myRIO 1900  Malaysia and Brunei Malaysia Malaysia
The range of LEGO Education products carried by us includes the following: (i) Early Learning Products Early learning products are intended for pre-school children to learn about basic things around the world as well as to develop their literacy skills. (iI) Machines and Mechanisms Machines and mechanisms are products intended for primary and secondary school students learning about science. These products provide students a fundamental understanding of simple machines, structures and mechanisms. (iii) Robotics Robotics consists of a range of programmable products and devices intended for students and users to learn and create robots and robotics applications. With rohotics, users are able to explore and apply their knowledge in science, mathematics and IT. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSINESS OVERVIEW (Cont’d) We also carry a range of robotics products and devices of Pitsco. Apart from robotics kits and software programmes, Pitsco’s range of robotics products and devices also comprise, amongst others, a range of hardware and electronic parts and components for building robots and robotics applications. Some examples of Pitsco’s robotics products and devices are listed as follows: Robotics
Tetrix® Base Set Tetrix® Resource Set The range of National Instruments’ products carried by us includes the following: (a) NImyDAQ
NI myDAQ is a portable data acquisition device that enables users to measure and analyse Jive signals. It is an educational hardware intended for students learning about engineering. The device is capable of measuring various electrical and physical phenomena such as voltage, current, temperature, pressure and sound with a computer.
(b) LabVIEW for Education
LabVIEW for Education is a system design software that uses graphical programming to enable the creation and deployment of measurement and control systems through hardware integration. It can be used in conjunction with NI myDAQ and other hardware for practical and hands-on learning experience.
(c) NI myRIO 1900

NI myRIO 1900 is a portable reconfigurable input-output device that students can use to design control, robotics and mechatronics systems. It also allows teachers to teach and implement multiple design concepts with this device. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
6. BUSINESS OVERVIEW (Cont’d) National Instruments products are targeted at primary and secondary educational institutions for educational purposes only. As at LPD, our Group has not commenced distribution of National Instruments products. Our applied learning products are mainly sold to dealers who service schools. A smalI proportion of our applied learning products are sold to the Ministry of Education for instalIation in schools, educational training and learning centres and schools directly as materials for co-curricular activities as welI as walk-in customers who make purchases from our office. In addition, LEGO Education products are also available via our website http://Iego.sasbadi.com/. THE REST OF THIS PAGE HAS BEENINTEN110NALLY LEFT BLANK 6. BUSINESS OVERVIEW (Cont’d) 6.2.3 Other Activities Our other activities mainly include the following: • Publishing of general title books; Distribution of third party publications;

• Trading of paper; and
• Supply of electronic dictionaries.

We publish a small range of general titles in English written by Malaysian authors. These general titles are mainly published by Sasbadi under the imprint of Maya Press. Our range of general title books is commonly available in retail bookstores and school bookshops as well as via our dealers, wholesalers and publishers. Some examples of our collections of general titles are listed as follows:

Twenty-two Malaysian Stories by Lloyd Fernando

 

 

 

Princess Shawl by The Ride Home by The Change by Shirley Lim K.S. Maniam K.S. Maniam 6. BUSINESS OVERVIEW (Cont’d)
Catatan by  Artistic Imperatives  Jolly Koh  Searching for Light  LatiffMohidin  by Jolly Koh  by Jolly Koh  by Dato’ Hon Choon  Kim
Note: (1) Wntten by K.s. Maniam. Salleh Ben Janed. Shirley Lim. Wong Phui Nam and Lee Kak Liang In addition, we are also involved in distribution of third party publications, where we purchase third party publications and resell them to our dealers that service schools directly. As we purchase paper in bulk, we also undertake trading of paper to other publishers on a small scale basis only when there is a request. Our electronic dictionaries are electronic devices comprising dictionaries, thesauruses, glossaries and various IT functions and applications to supplement the learning process of users. We have two (2) versions of electronic dictionaries of various models -Total e-dictionary launched in 2005 and eleksisPro in 2009. As at LPD, we have ceased the production of our electronic dictionaries as we shift our focus from supply of digital educational resources towards online educational resources. Nevertheless, we will continue to sell the remaining stocks which amount to a carrying cost ofRMI5l,250. THE RESTOF THISPAGEHAS BEENINTENTIONALLYLEFTBLANK

 

 

6. BUSINESS OVERVIEW (Cant’d) 6.2.4 Revenue Segmentation by Business Activities The breakdown of our Group’s revenue by business activities for the FYE 31 August 2013 and FPE 28 February 2014 are as follows:
FYE 31 August 2013 RM’OOO % 63,559 81.5 17.695 22.7 3,224 4.1 n.a. n.a.
n.a. n.a.
n.a. n.a.
n.a. n.a.

814 1.0 64,373 82.6′ 5,762 7.4 70,135 90.0 4,212 5.4 3,618 4.6 77,964′ 100.0 FPE 28 February 2014
RM’OOO  %  38,599′  87.7  19,094 19,228 (134)  43.4 43.7 (0.3)  16,283 16,283  37.0 370  3,221 1,130 2.031 60 2,273 40,871′ 83 40,954 1,958 1,079 43,992′  7.3 2.6 4.6 0.1 5.2 92.9 0.2 93.1 4.5 2.5 100.0′
Notes:  Total does not add-up due to rounding.  n.a.  Not applicable.  (1)  Include a small proportion ofpre-school educational materials.  (2)  Mainly include supply ofelectronic dictionaries, publishing of general title books as well as distribution of third  party publications and trading ofpaper.  (3)  Include amongst others textbooks, revision guides, workbooks, assessment books and model test papers.  (4)  Include revision guides, assessment books and model test papers.
For FYE 31 August 2013 and FPE 28 February 2014, our total revenue amounted to RM78.0 million and RM44.0 million respectively. Educational publishing represented the largest proportion of our total revenue at 90.0% and 93.1 % for the FYE 31 August 2013 and FPE 28 February 2014 respectively. Within educational publishing, print publishing accounted for 82.6% and 92.9% whilst online publishing accounted for 7.4% and 0.2% of our total revenue for FYE 31 August 2013 and FPE 28 February 2014 respectively. The significantly lower contribution from online publishing for FPE 28 February 2014 as compared to FYE 31 August 2013 was due to the uncertainty in the market in relation to the implementation of School-Based Assessment (PBS) policy. As such, we recorded lower sales for our online educational products, especially iPBS. In addition, we also recorded sales returns of approximately RMO.6 million, also mainly from our iPBS online educational products. Nevertheless, the modified version of the PBS policy was subsequently implemented in April 2014 and sales of our online educational products have started to pick up again. 6. BUSINESS OVERVIEW (Cont’dj Within print publishing, National School Curriculum based educational materials accounted for 81.5% and 87.7% of our total revenue for the FYE 31 August 2013 and FPE 28 February 2014 respectively. Of this, secondary and primary education as well as supplementary educational materials accounted for 54.7%, 26.8% and 1.0% of our total revenue respectively for the FYE 31 August 2013. For FPE 28 February 2014, secondary and primary education as well as supplementary educational materials accounted for 43.4%, 37.0%, and 5.2%, of our total revenue respectiveIy. Following the acquisition of the publishing rights and production files for a list of titles from Pearson Malaysia in September 2013, the sales from Pearson titles accounted for 7.3% of our total revenue for FPE 28 February 2014. Please refer to Section 5.1 of this Prospectus for further details on the acquisition of the publishing rights and production files for a list of titles from Pearson Malaysia. The distribution of applied learning products accounted for 5.4% and 4.5%, of our total revenue forthe FYE3I August2013 andFPE28 February2014 respective!y. The remaining 4.6% and 2.5% of our total revenue for the FYE 31 August 2013 and FPE 28 February 2014 respectively was contributed by other activities, including supply of electronic dictionaries, publishing of general title books as well as distribution of third party publications and trading of paper. OUR PRINCIPAL MARKETS 6.3.1 Revenue Segmentation by Geographical Markets The breakdown of our Group’s revenue by geographical markets for the FYE 31 August 2013 and FPE 28 February 2014 are as follows: Others (1) 160 0.2 Total 77964A 100.0
43.992 A 100.0 , Revenue FYE 31 August 2013 FPE 28 February 2014 RM’OOO %RM’OOO % 44,033 100.1Malaysia 77,561 99.5 (42)A (0.1)Overseas markets 404A 0.5 Brunei 86 0.1 (52) (0.1 ) Denmark 66 0.1 Indonesia 56 0.1 9# Singapore 2#26 # Philippines -8# –United States 3# -Notes:  Total does not add-up due to rounding.  #  Insignificant proportion.  (I)  Others include Abu Dhabi, Bahrain, China, Costa Rica, Egypt, Germany, Ghana, India, Iran, Japan, Mexico,  Nigeria, Oman, Peru. Qatar, Russia, South Africa, Taiwan, Thailand and Ukraine.

 

6. BUSINESS OVERVIEW (Cont’d) For FYE 31 August 2013, Malaysia was our principal market as it accounted for 99.5% of our total Group revenue. The remaining revenue was contributed by export sales to various overseas markets. For the FPE 28 February 2014, Malaysia continued to be our principal market whilst overseas markets recorded minimal negative revenue as a result of the sales return from the Brunei market. 6.4 SEASONALITY Our business operations experience seasonality patterns. For the last four (4) financial years between FYE 31 August 2010 and 2013, we consistently recorded highest sales in our second financial quarter (December to February) with an average contribution of 49.9% ofthe total sales for each financial year. For the last four (4) financial years between FYE 31 August 2010 and 2013, December and January consistently experienced the top two highest sales with the exception of FYE 31 August 2012, where our monthly sales were the highest in December and February. Our peak sales season coincides with the purchase of educational materials for the start of each new academic year for national schools. For the last four (4) financial years between FYE 31 August 2010 and 2013, we had consistently been recording lowest quarterly sales for our fourth financial quarter (June to August), which contributed an average of6.2% of our total sales for each financial year. Our lowest sales season coincides with the beginning of the second half of the academic year for national schools where most students and teachers would already have purchased most of their required educational materials. For FYE 31 August 2014, we expect some changes in our seasonality patterns due to the abolishment of PMR to be replaced by Form 3 Assessment (PT3 -Pentaksiran Tingkatan 3) as per the circular by the Ministry of Education on 31 March 2014. In this regard, in June 2014, our Group has launched new series of model test papers based on the PT3 format for lower secondary levels of education. In addition, our Group is also in the midst of publishing new series of assessment books and revision guides based on the PT3 format. As such, we expect to record sales from PT3 educational materials in our fourth financial quarter (June to August) of2014. Moving forward, we also expect to record sales of post-secondary educational materials in our fourth financial quarter (June to August), which coincides with the intake of post-secondary students in May for national schools. THE RESTOF THIS PAGE HAS BEEN INTENTIONALLYLEFTBLANK ICompany No. 1022660-T I 6. BUSINESS OVERVIEW (Coni’d) 6.S TYPES, SOURCES AND AVAILABILITY OF RAW MATERIALS/INPUT The breakdown of major materials, services and products purchased by our Group for the FYE 31August 2013 and FPE 28 February 2014 are as follows: <——————-FYE 31August 2013———————-> <—————-FPE 28 February 2014———————-> % of Total Group % of Total Group Purchases of Sources of Supply Purchases of Sources of Supply Value of Materials, Services Value of Materials, Services Local Import Local ImportPurchases and Products Purchases and Products RM’OOO %%% RM’OOO %%% 9,694 46.0 JOO,O 0.0 100.0(1) MATERIALS 15,086A 48.5 100.0 ­9,021 42.8 0.0 Packagiug materials 13,638 43.9 100.0 (I) ­Paper aud paperboard 273 1.3 100.0 0.0912 2.9 100.0 ­Printing plates and films  535  1.7  100.0  – 400  1.9  100.0  0.0  SERVICES  J4,278A  45,9A  99,8  0.2  7,622A  36.2  99.9  0.1  Printing  7,100  22.8  100.0  – 4,646  22.1  100.0  0.0  Royalties (2)  5,764  18.5  99.5  0.5  2,421  11.5  99.6  0.4
Others (3)  1,413  4.5  100.0  – 556  2.6  100.0  0.0  PRODUCTS  J,733  5.6A  2.9  97.J  3,75J  J7.8  48.0  52.0  Applied learning products  1,682  5.4  – 100.0  1,807  8.6  0.0  100.0  Publications  44  0.1  100.0  – 1,943  9.2  92.6  7.4
1 # 100.0 0.0Electronic dictionaries 7 # 100.0 ­2J 067 JOO,O 90.7 9.3TOTAL 31.097 JOO,O 94.5 5.5 Notes:  Total does not add-up due to rounding.  #  Insignificant proportion.  (1)  Materials sourcedfrom local stockists which may include a small proportion o/imported materials.  (2)  Include royalties based on contract as well as outright purchase ofauthors’ works.  (3)  Others include services such as coverfinishing, typesetting, editing and illustration, copyrightfees and service fees. During the peak period ojproduction (from the month ofMay  to August) which is mostly before the start ofthe new academic year, our Group does outsource some ofthe artwork and design activities due to the large quantities ofbooks being  published.  105
6. BUSINESS OVERVIEW (Conf’dj For the FYE 31 August 2013 and FPE 28 February 2014, 94.5% and 90.7% of our purchases of materials, services and products were sourced from local suppliers respectively whilst the remaining 5.5% and 9.3% of our purchases of materials, services and products were sourced directly from overseas suppliers. Please refer to Section 4.1.1 and Section 12.2.10(d) of this Prospectus for the impact of fluctuations in prices of materials. Purchases of Materials Materials purchased are mainly used in printing and production of our publications as well as printed access code cards for our online educational resources. For our purchases of materials for the FYE 31 August 2013 and FPE 28 February 2014, paper and paperboard represented our largest proportion of purchases, which accounted for 43.9% and 42.8% of our total purchases of materials, services and products respectively. This was followed by packaging materials which accounted for 2.9% and 1.3% of our total purchases of materials, services and products for the FYE 31 August 2013 and FPE 28 February 2014 respectively. Printing plates and films accounted for 1.7% and 1.9% of our total purchases of materials, services and products for the FYE 31 August 2013 and FPE 28 February 2014 respectively. Purchases of Services Services generally include printing, royalties, cover finishing, typesetting, editing, illustration, copyright fees and service fees. These are mainly for: subcontracted services for printing and production; subcontracted services for third-party authors, editors and illustrators; fees paid for the rights to publish third parties’ copyrighted materials; fees paid for the rights to translate and publish third parties’ copyrighted materials; and fees paid to our technology partner for our online educational resources.
For the FYE 31 August 2013 and FPE 28 February 2014, printing services represented 22.8% and 22.1 % of our total purchases of materials, services and products respectively. This was followed by royalties, which accounted for 18.5% and 11.5% of our total purchases of materials, services and products for the FYE 31 August 2013 and FPE 28 February 2014 respectively. Other services including cover finishing, typesetting, editing, illustration, copyright fees and service fees constitute 4.5% and 2.6% of our total purchases of materials, services and products for the FYE 31 August 2013 and FPE 28 February 2014 respectively. Purchases of Products Purchased products include applied learning products and publications for our distribution operations as well as electronic dictionaries. For the FYE 31 August 2013 and FPE 28 February 2014, applied learning products accounted for 5.4% and 8.6% of our total purchases of materials, services and products. This was followed by publications which accounted for 0.1% and 9.2% for the FYE 31 August 2013 and FPE 28 February 2014. Purchased of electronic dictionaries accounted for less than 0.1 % of our total purchases of materials, services and products for the FYE 31 August 2013 and FPE 28 February 2014. As at LPD, our Group has not experienced any shortage in the supply ofraw materials as mentioned above. 6. BUSINESS OVERVIEW (Cont’d) 6.6 TECHNOLOGY USED The main technology that we use in our publishing business is focused on ICT in general and web-based technologies in particular. This is because we have a number of educational resources that are available online through our web portal. Our web portal is designed, developed and maintained by us and our technology partner. In the process, our technology partner and us utilise general ICT and web-based technologies for the following: (a) System Development
We use various software technological tools to develop our websites. These include using web-based programming languages, compilers, databases, graphical user interfaces and communications protocol. All these technologies are used to develop the software to store, manipulate and deliver data over communications networks to our customers.
(b) Deployment of Data
In the constantly evolving choices of electronic devices to access websites like ours, we have to utilise technologies that enable us to present data on various types of devices including desktop computers, notebooks, tablets and mobile devices. We will have to utilise various software technologies that will allow us to be compatible to various operating systems including Apple’s Mac as and Microsoft Windows for desktop computers and notebooks, and Google’s Android, Apple’s iOS and Microsoft Windows 8 operating system for mobile devices including smartphones and tablets.
(c) Communications and Security
Our primary access method to our websites is through the internet. As such, communications technologies like TCP/IP (Transmission Control ProtocolJInternet Protocol) as well as hardware and software security technologies will need to be utilised. These security technologies include software based firewalls, anti-intrusion and monitoring systems, and hardware devices with embedded security software like firewalls, routers and hubs. They will have to be deployed and used prudently to provide seamless, fast and secured access to our websites.
(d) Computing and Communications Hardware
Our websites are hosted in our own processor hardware where server applications reside in them. As such, we utilise various hardware technologies for computer processing as well as communications. With our processor hardware, we have to optimise our investments in processors to provide a certain level of service, particularly in tenns of speed of processing online requests, to ensure satisfactory customer experience. We also have to detennine the optimum level of bandwidth to ensure satisfactory speed ofcommunications between our websites and online customers.
(e) Cloud Computing and Software-as-a-Service

Cloud computing generally deals with the provision of JCT services through the internet where users do not need to own physical infrastructure or the software used for accessing our services. Cloud computing generally covers the use of one or more combination of processors, storage, software and platfonns. We use cloud computing technologies in our web based resources based on our SaaS model. SaaS refers to software for which a user pays a recurring fee for the continuing right to use the software, as opposed to making a single outright payment for the right to use the software on a pennanent basis. The recurring fee may be charged based on usage or time periods for use of selected modules. 6. BUSINESS OVERVIEW (Coni’d) Our proprietary web-based educational resources including Bank Soalan, i-Learn, i-Teach and iPBS/iPS are delivered through the internet as a SaaS. They are developed for students or teachers and are developed based on the National School Curriculum. 6.7 PRODUCTION FACILITIES AND OPERATING CAPACITIES As our business is in the provision of services, for the FYE 31 August 2013 and FPE 28 February 2014, our Group did not utilise any major machinery and equipment for our operations. However, we use computer hardware and software, particularly desktop publishing software, for our content development, editing, and artwork and design. As computer hardware and software are relatively low cost and easily available, they do not pose any capacity constraints to our business operations. 6.8 OUR BUSINESS AND OPERATION PROCESSES (a) Publishing of Printed Educational Materials The process flow of our publishing of printed educational materials is illustrated as follows: c———————–­Research for Suitable Content
I Plan Publishing Schedule I Source Manuscript
Evaluate Manuscript
Prepare Manuscript
I Design and Production
I  Cost Estimation  and Price  Determination  Paper, Packaging,  Plate and Film  Sourcing  Proofing  ,  : Deliver  I  ..  Camera Ready Copy  Deliver ——-.  Printing and Production  I  Logistics and  Warehousing
6. BUSINESS OVERVIEW (Cont’d) Our publishing process for printed educational materials begins with researching for suitable content for publication. It involves researching on the latest national curriculum requirements, obtaining market information and feedback from consumers. After identifying and formulating the content, we commence planning of our publishing timeline as well as determining available resources and assigning jobs to the relevant departments and personnel. Subsequent to the finalisation of our publishing schedule, we start with sourcing for manuscripts which either involves accepting non-commissioned manuscripts submitted by authors or commissioning external writers or allocate in-house staff for the drafting of manuscripts. If sourcing from external non-commission authors, we would discuss purchasing the publishing rights from them. Once the draft manuscript has been submitted to us, we would evaluate the quality of the manuscripts. For external authors, we will negotiate with them on payment methods, either through royalties or outright purchase before entering into a contractual agreement. We will then commence the preparation of the manuscripts starting with various editing works including, amongst others, mechanical and substantive editing, translations where required and modification of information to meet in-house requirements. Once the editing work is completed, we will proceed to the design and production stage. Design involves, amongst others, book cover design, selection of font styles and sizes, paper and packaging specifications, insertions of illustrations, figures and diagrams. Manuscripts are then laid out into book form for cost estimation. Cost estimation involves consideration of various elements, including the number of coloured and plain pages, types of packaging and paper to be used and number of copies to be produced during the print run. Following cost estimation, we would subsequently determine the selling price. We will then purchase the selected paper type, packaging materials, printing plates and films from our suppliers, which will be delivered to our printer for printing and production at a later stage. Prior to printing and production, we would undertake various stages of proof reading to vet through all the latest developments and amendments. The final proof copy will be in portable document format (PDF), which is referred to as the camera ready copy. This will be delivered to our printer for printing. Once the printing and production process is completed, our printers will then deliver the finished publications to our warehouse for storage. The publications will then be distributed from our warehouse to our customers’ premises, either via our own trucks or a third party forwarder. Alternatively, some of our customers could also pick up the publications from our warehouse. 6. BUSINESS OVERVIEW (Cont’d) (b) Publishing of Online Educational Materials The process flow of our publishing of online educational materials is illustrated as follows:
Research for Suitable Content
i I ! Proofof Concept ,
I , i Planning i I Programming and Design
D_a_ta_b_a_s_eI ~ _~U!,f’~~_{~____J I I Beta Testing I ], Stress Cycle TestingI I
Clean Cycle Testing
Our publishing process for online educational materials commences with research for suitable content, which involves researching on the latest national curriculum requirements, obtaining latest market information and feedback from consumers. We will also concurrently identif’y hardware requirements, system features and flow of system as well as determining functionality requirements. This is followed by proof of concept, which involves writing a bare-bone programme to test the concept and undertake further modifications and improvements if required. After proof of concept, we will start with the planning stage. This involves determining the resources required to develop the system and the scope of work as well as assigning the jobs to relevant departments and personnel. Once the planning stage is completed, we will proceed to systems design and programming. Design incorporates designing the total system including user interfaces, data processing, database, access procedures, security and communications. Systems design also incorporates database design to optimise storage space and overall performance, and ensure data integrity. Programming includes writing, reusing or modifying existing codes to meet systems and functional specifications. 6. BUSINESS OVERVIEW (Cont’d) Once the system has been completed, the next step is to conduct beta testing. Beta testing involves selecting a group of users to use the system as much as possible and to record any problems. These problems are then fed back to the IT personnel for fixing and improvement. Beta testing is completed once the system is largely error free and our management is satisfied with the overall system. This is followed by stress cycle testing where the testing involves simulation of high number of concurrent users and its effect on the overall performance of the system. Stress testing will enable IT personnel to determine at what stage of usage the systems will require additional resources, like processing power, storage devices and bandwidth, or to have mirror sites. The final stage of testing involves clean cycle testing. This process is to ensure that all functions of the system are working as planned and intended prior to product launching and promotion. 6.9 QUALITY ASSURANCE We place emphasis on our product quality. In general, our Group adopts the following approaches and measures in our operations: Source manuscripts from experienced teachers, lecturers and exammers for National School Curriculum based educational materials; Undertake research to ensure accuracy of the contents in the manuscripts acquired as well as contents developed in-house; • Undertake proof reading prior to production and printing;
Undertake pre-press proofing to verify accuracy of the press prior to the final press run and printing; Undertake various stages of testing on our software system to eliminate errors and bugs;

• Continuously keep abreast of any changes in the National School Curriculum to incorporate any revisions into our publications;

Use syllabuses published by the Ministry of Education, prescribed textbooks and actual past year examination papers as reference materials for development of National School Curriculum based educational materials; Engage printers with proven track record; and Obtain feedback from schools and teachers pertaining to the quality of our publications. 6. BUSINESS OVERVIEW (Cont’d) 6.10 MARKETING AND DISTRIBUTION (a) Marketing Strategies Our marketing strategies are as follows:
• Position ourselves as an educational publishing house focusing on producing quality National School Curriculum based educational materials, online educational resources and supplementary educational materials;
• To complement our educational publishing business by providing applied learning products to encourage hands-on learning for students;
• Continue to provide excellence in product quality with the aim of developing a long-term business relationship with customers;
Continue to improve on our product range in print and online publishing to meet the demands for educational resources;
• Continue to expand on our distribution network and ensure a wide market coverage through the use of intermediaries whilst cultivating long-term strategic partnerships including retail bookstores, dealers, wholesalers, the Ministry of Education, schools and publishers; and
• Market and promote our products directly to schools and teachers to create brand and product awareness whilst obtaining feedback for continuous product improvement.

To implement our marketing strategy, we have our own sales and marketing team comprising 53 personnel (including managers and directors) as at LPD. As part of our marketing strategy, we also participate in book fairs and exhibitions as exhibitor to create product awareness. Some of these events that we have participated on an annual basis are listed as follows: Annualh Since 1990 Since 2005 Since 2007 Since 2008 Since 2009 Our Participation in Book Fairs and Exhibitions Names Of E\ents Kuala Lumpur International Bookfair Pesta Buku Kelantan
BookFest@ Malaysia -Popular Pesta Buku Terengganu Pesta Buku Melaka
Kamival Hari Guru Kebangsaan
Location Kuala Lumpur
Kola Bahru Kuala Lumpur Kuala Terengganu
Ayer Keroh Various locations in Malaysia
We have also been organising the National Robotics Competition and FIRST LEGO League Competition on an annual basis in Malaysia since 2005 and 2010 respectively. 6. BUSINESS OVERVIEW (Cont’d) In 2012, we also co-organised the World Robot Olympiad 2012 in Malaysia, together with the Government of Malaysia, and our Group incurred cost of approximately RMO.5 million for the event. The World Robot Olympiad is a worldwide robotics competition, and the competition held in Kuala Lumpur was the largest in the history of the World Robot Olympiad as at 21 February 2013. These competitions also help us to raise our profile whilst creating market and product awareness. (b) Distribution Network We adopt a combination of indirect and direct distribution channel strategy:
Retail Bookstores Dealers Wholesalers Publishers Ministry of Education Schools Others Our Group’s revenue contributions by distribution network for FYE 31 August 2013 and FPE 28 February 2014 are as follows: Revenue  <–FYE31 August 2013—>  <–FPE 28 February 2014—>  No. of customers  RM’OOO  Proportion of Total Revenue %  No. of customers  RM’OOO  Proportion of Total Revenue %  Retail bookstores Dealers Wholesalers Publishers Ministry of Education Schools Others*  133 576 3 2 1 646 21 (I) 1,382  13,299 46,902 1,831 4,130 5,134 1,871 4,797  17.1 60.2 2.3 5.3 6.6 2.4 6.2  87 402 3 I I 115 15(1)  6,291 32,274 1,276 1,460 443 595 1,651  14.3 73.4 2.9 3.3 1.0 1.4 3.8  77964  100.0A  624  43992 A  100.0A
6. BUSINESS OVERVIEW (Cont’d) Notes: Total does not add-up due to rounding. * Others include, amongst others. educational training and learning centres and general public who make direct purchase from us during book fairs and exhibitions or place orders directly via our websites as well as walk-in customers who make purchasesfrom our office. (1) This only includes educaiional training and learning centres. (i) Indirect Distribution Channel We mainly adopt an indirect distribution strategy to enable us to utilise the existing networks of intermediaries and ensure market coverage for our products. Using intermediaries minimise our resources in terms of finance and personnel in creating our own distribution network. The intermediaries include retail bookstores, dealers and wholesalers as well as third party publishers. For the FYE 31 August 2013 and FPE 28 February 2014, we had approximately 710 and 490 active customers who are intermediaries located mainly in Malaysia respectively. (ii) Direct Distribution Channel We also utilise direct distribution strategy, which is performed through our own sales and marketing team, focusing on selling our products directly to end-user customers. Our end-user customers are mainly the Ministry of Education, schools and others, include amongst others, educational training and learning centres and general consumers. General consumers are those who make purchase or place orders directly via our websites, and during book fairs and exhibitions, as well as for those walk-in customers who make purchases from our office. (c) Sales Return Policy Our Group has in place a sales return policy which generally includes, amongst others, the following: Stocks are returned with the Goods Return Notes (GRN) provided by us after approval from our management; Stocks to be returned must be within: (i) 12 months after the release of a new edition; or
(ii) 12 months after becoming out of print, whichever is earlier;

 

Stocks are returned in good condition and without price tags; • Stocks are returned due to manufacturing defects;
Stocks are returned due to damages during delivery; and
• The returning stocks must arrive at our Group’s warehouse within the specified time frame agreed by our management.

Notwithstanding the above, all sales returns would need to obtain our management’s approval. The approval is at the discretion of our management and our management will take into account the impact on the business relationship with the respective customer before granting the approval. 6. BUSINESS OVERVIEW (Cont’d) 6.11 RESEARCH AND DEVELOPMENT Our research and development (“R&D”) actIvltIes are primarily related to the development of online educational resources. Our R&D is focused on the following areas: Development of new online educational resources including software, tools, database and online web-portal; and • Enhancement of existing online educational resources such as i-Teach and i-Learn: i-Teach will be further developed to include the following: • additional features for our learning management systems such as teacher and student interactivities as well as homework assignments; and
• additional tools for our lesson plans creation module to further assist teachers in

their creation of lesson plans. i-Learn will be further developed to include the following: • additional subjects; and
• additional educational games.

Through the R&D activities listed above, we aim to realise the following benefits: • Increase revenue and profitability; Sustain and grow our business;

• Sustain competitive advantages and key strengths; and
• Increase our customers’ satisfaction.

We undertake R&D together with our technology partner. In addition to relying on our technology partner, we also carry out product development activities at our office located at Kota Damansara, Selangor Darnl Ehsan. We are responsible for part of the programming and the development of concept (e.g. what the product usage is and who the target market is), function, educational content and marketing of the finished products. Our technology partner is prohibited from developing competitive products with third parties as we outsource certain sections of programming and designing works, product testing, technical support, product demonstrations and training support to the technology partner. As such, we are required to pay our technology partner an amount based on an agreed term (i.e. a predetermined amount based on the eventual selling price of the online product for a predetermined number of online products sold). Upon completion of the development of these online educational products, we have full ownership of them, bearing our logo/trademark and sales of these online products are recognised fully by us. The equipment used by our technology partner and us to carry out our product development activities consists of general ICT hardware and software. Thus would include, amongst others: (1) Hardware Intel Xeon Processor; SATA Hard Disk Drives (4 units);
• PERC H700 RAID (redundant array of independent disks) Controller Card with RAID 5 configuration; lOOMbps Network Port; Firewall device; and
• NAS (Network-attached Storage) as data backup system.

6. BUSINESS OVERVIEW (Cont’d) (ii) Software Windows Server; Windows IIS (Internet Information Server); Apache Web Server with PHP (Hypertext Preprocessor) Language Support; Microsoft SQL (Structured Query Language) Express; Oracle MySQL Database; Windows Remote Desktop Administrator Access; FTP (File Transfer Protocol) Server Software; Adobe Dreamweaver; Adobe Illustrator; Adobe Photoshop; Microsoft Office (Word, Excel); Javascript; PlIP (Hypertext Processor); XHTML (Extensible Hypertext Markup Language); XML (Extensible Markup Language); CodeIgniter; JQuery; and CSS (Cascading Style Sheets).
As at LPD, we have three (3) programmers and three (3) editors engaged in product development activities. Going forward, we intend to hire more manpower in product development activities. THE RESTOF THISPAGEHASBEENINTENTIONALLYLEFTBLANK ICompany No. 1022660-T I 6. BUSINESS OVERVIEW (Cont’d) Our expenditure on research and development (“R&D”) activities for the FYE August 2010, 2011, 2012 and 2013 as well as FPE 28 February 2014 was as follows: < ——————————————FYE 31 August —————————————->  FPE 28 February  2010  2011  2012  2013  2014  % of Total  % of Total  % of Total  % of Total  % of Total  RM ‘000  Revenue  RM ‘000  Revenue  RM ‘000  Revenue  RM ‘000  Revenue  RM’OOO  Revenue
R&D expenditure 110 0.2 93 0.2 63 0.1 4 # # Note: # Insign!ficant proportion. 6.12 MAJOR CUSTOMERS Ourmajorcustomer(i.e. whohaseontributcd 10.0%ormore ofourtotalrevenue)forthepast four(4) FYE3IAugust2010 to2013 andFPE 28 February 2014: Customers  Approximate Length of relationship (years)  < ————————FYE 31 August ——————————————–> 2010 2011 2012 2013 RM’OOO % RM’OOO % RM’OOO % RM’OOO  %  FPE 28 February 2014 RM’OOO %  Total Revenue  – 47,012  100.0  59,961  100.0  64,821  100.0  77,964  100.0  43,992  100.0  Popular Book Co. (Malaysia) Sdn Bhd  28  4,367  9.3  5,610  9.4  6,672  10.3  8,057  10.3  3,550  8.1
We are dependent on Popular Book Co. (Malaysia) Sdn Bhd by virtue of its contribution of more than 10.0% to our total revenue for FYE 31 August 2013. The following factors mitigate against our Group’s dependeney on Popular Book Co. (Malaysia) Sdn Bhd: Popular Book Co. (Malaysia) Sdn Bhd has been dealing with our Group for approximately 28 years, which indicates a stable and long term business relationship with them; and • Our large customer base of approximately 1,380 and 620 active customers, for FYE 31 August 2013 and FPE 28 February 2014 respeetively, helps to reduce our dependency on Popular Book Co. (Malaysia) Sdn Bhd. Please refer to Section 4.1.3 of this Prospectus for further details on risk on dependeney on our major customers. 117 ICompany No. 1022660-T I 6. BUSINESS OVERVIEW (Cont’d)

6.13 MAJOR SUPPLIERS Our major suppliers (i.e. those who have contrihuted 10.0% or more of our total purchases) over the past four (4) FYE 31 August 2010 to 2013 and FPE 28 Fehruary 2014 are as follows: Supplier  Total Purchases of Materials, Services and Products  Singa Trading (Malaysia) Sdn Bhd Etamax Sdn Bhd Modern Alpine Sdn Bhd Pearson Malaysia Sdn Bhd
Type of Approximate <————————————-FYE 31 August ————————————> FPE 28 February Materials Lcngth of 2010 2011 2012 2013 2014 Purchased Relationship years RM’OOO % RM’OOO % RM’OOO % RM’OOO % RM’OOO % –26,689 100.0 33,119 100.0 34,579 100.0 31.097 100.0 21,067 100.0 Paper 29 5.978 22,4 3.590 10.8 13,820 40.0 9,180 29.5 4,759 22.6 Paper 23 1,558 5.8 2,409 7.3 869 2.5 1.268 4.1 2,750 13.1 Paper II 2,690 10.1 4,195 12.7 39 0.1 4 # -­Paper and I ——–2,198 10,4 Stocks of educational materials
Note: # Insignificant proportion. Our top supplier namely Singa Trading (Malaysia) Sdn Bhd contributed 22.4%, 10.8%, 40.0%, 29.5% and 22.6% of our total purchases of materials, services and products for the FYE 31 August 2010, 2011, 2012 and 2013 as well as FPE 28 February 2014 respectively. Etamax Sdn Bhd, which also supplies paper to our Group, contributed 13.1 % of our total purchases of materials, services and products for FPE 28 February 2014, while its contributions to our total purchases of materials, services and products for FYE 31 August 2010, 2011, 2012 and 2013 were 5.8%, 7.3%, 2.5% and 4.1 % respectively. In addition, Modem Alpine Sdn Bhd was also one of our major suppliers of paper as it contributed 10.1 % and 12.7% of our total purchases of materials, services and products for the FYE 31 August 2010 and 2011 respectively. The contribution from Modern Alpine Sdn Bhd in FYE 31 August 2012 and 2013 had, however been reduced to 0.1% and 0.01% of our total purchases of materials, services and products respectively. We did not purchase any paper from Modern Alpine Sdn Bhd for FPE 28 February 2014. 118 ICompany No. I022660-T I 6. BUSINESS OVERVIEW (Cont’d) We have been dealing with Singa Trading (Malaysia) Sdn Bhd and Etamax Sdn Bhd for approximately 29 and 23 years respectively. This indicates a stable and continuing business relationship with Singa Trading (Malaysia) Sdn Bhd and Etamax Sdn Bhd. In addition, it is also our strategy to undertake bulk purchase of paper from these suppliers to obtain bulk discounts. Our reliance on Singa Trading (Malaysia) Sdn Bhd and Etamax Sdn Bhd is also mitigated by the fact that we also purchase paper from other suppliers such as Kertas Kralik Sdn Bhd and Intrapac Trading (M) Sdn Bhd. This indicates that we have ready access to other suppliers of paper should there be a need to purchase from alternative suppliers. The purchase from Pearson Malaysia amounting to RM2.2 million was a one (I) off transaction in relation to the acquisition of stocks of educational materials for approximately RMl.6 million and paper for approximately RMO.6 million in conjunction with the acquisition of the publishing rights and production files for a list of titles from Pearson Malaysia. Please refer to Section 5.1 of this Prospectus for further details on the acquisition of the publishing rights and production files for a list of titles from Pearson Malaysia. Please refer to Section 4.1.2 of this Prospectus for further details on risk on dependency on our major suppliers. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 119 ICompany No. 1022660-T I 6. BUSINESS OVERVIEW (Cont’d) 6.14  MAJOR LICENCES, PERMITS AND REGISTRATIONS  6.14.1  Material Licences for Business Operations  The major lieences issued to our Group to enable us to operate our business as at LPD are summarised below:­
Company  Issuing  Type of Licences  Issue Date/  Status of  Authority  Validity  Salient Conditions  Compliance  Period  Sasbadi  Ministry of Finance  Registration Certificate issued by the Ministry of Finance pursuant to the Financial Procedure Act 1957, Treasury Instructions 166.1, 166.2(i), 166.2(ix), 166.2(x), 184.2. 184.3 and Treasury Circular Letter Bil 6. Year 2010 in relation to the tender/procurement of government contract for the supply of services/products under the scope of the Business Category (“Kod Bidang”), listed below. Registration No. 357-00053177 Certificate No. K1973825637925827  26.09.20111 From 26.09.2011 to 25.09.2014  1. 2. Any changes to the information provided to MOF must be made online within 21 days from the date of change. The company must ensure that the category in which it is registered does not coineide with the categories which have been approved for other companies which have the same owner or board of directors and management or which operate in the same premises.  Complied Complied  Business Category Reading Material Business Category CodeIKod Bidang 010102  3. A newly registered company is not allowed to make any ehanges to its owner/shareholder or directors within 6 months from the date of registration.  Complied  Education Kit Education Material 010601 010602  4. The registration suspended/revoked discovered that: may be if it is  Office Machine and Accessory 020201

120 ICompany No. I022660-T I 6. BUSINESS OVERVIEW (Cont’d) Company  Issuing Authority  Type of Licences  Issue Date/ Validity Period  Salient Conditions  Status of Compliance  Stationery (does not include fonn and all kind of paper) Clothing Clothing Equipment Sports Clothing and Accessory Souvenir and Gift Musical Instruments and Accessory Sports Equipment Laboratory Equipment and Accessory All Measuring Equipment Hardware (Low End Technology) Computer Software, Operating System, Database, Off-The-Shelf Packages Including Maintenance Multimedia Products, Services and Maintenance Professional Staff-Does not include Consultancy Service Semi-Professional Staff-Does not include Consultancy Service  020601 020801 020802 030101 030201 030301 030501 060501 100101 210101 210103 210108 221101 221102  (a) (b) (c) (d) (e) (I) 5.  The company/owner/ partner/director/any member of management team is involved in illegaVcriminal activities and is charged and found guilty by the courts in Malaysia or abroad or is facing any civil liability. The company withdraws an offer before a tender is considered or rejects after the offer has beco made. The company fails to perfonn the contracts signed with the Government. The company is found to amend the Registration Certificate for fraud or other purposes. The Registration Certificate is misused by another individual/company. The company is found to be involved in price fixing with other companies before bidding. The company has to submit the renewal application 3 months before the expiry of the validity period.  Complied Complied Complied Complied Complied Complied Complied
121 ICompany No. I022660-T I 6. BUSINESS OVERVIEW (Cont’d) Company  Issuing Authority  Type of Licences  Issue Date! Validity Period  Salient Conditions  Status of Compliance  Training and Teaching Service and ModeratorlNegotiator  221110  Preparation of Stage/Exhibition, Show and Amusement Park  221305  Hospital and Laboratory Equipment  221508  Translation  222006  Intellectual Property Right (Patent)  222008  Certification and Recognition  222704
THE RESTOF THIS PAGE HAS BEEN INTENTIONALLY LEFTBLANK 122 ICompany No. I022660-T I 6. BUSINESS OVERVIEW (Cont’d) 6.15 INTELLECTUAL PROPERTY RIGHTS As at the LPD, our Group has applied for the registration of the following trademarks at MyIPO:

Class No. ApPlication No. Statns of Application as at LPD z« Sasbadi 16 2013006449 Approved. Pcndmg the ]ssuancc of the certificate of registration. 41 2013006446 The trade mark is registered for a perlOd of 10 ycars from 7 May 2013 to 7 May 2023. SASBADI Maya Press 16 2013006448 Thc tradc mark is registered for a period of 10 years; ~~ from 7 May 2013 to 7 May 2023.~I! ~ z 41 2013006452 Approved. Pending thc issuance of the certificate of registration. MAYA PRESS Orbit Buku 16 2013006447 Approved. Pending the issuance of the cert]fieate of registration. 4\ 2013006453 The trade mark ]s registered for a period of 10 ycars from 7 May 2013 to 7 May 2023.
Sasbadi Online 16 2013006451 Approvcd. Pendmg the issuance of the certificate of registration. 41 2013006450 Thc trade mark is registered for a penod of \ 0 years from 7 May 2013 to 7 May 2023. SA58ADI ,.
123 ICompany No. I022660-T I 6. BUSINESS OVERVIEW (Cont’d) Trademark Loe:o SASBADI MBP PUBLICATIONS  Ree:istrant Sasbadi Learning Solutions MBP Publications  Class No. 16 28 41 16 41  Annlieation No. 2014057557 2014057560 2014057563 2014057547 2014057553  Statns of ADDlication as at LPD Filed on 23 May 2014. Pending reply from the registrar of trademarks at MyIPO. Filed on 23 May 2014. Pending reply from the registrar oftrademarks at MyIPO.
Notes; Class J6 oftheNiceClassificationfor trademarhincludes “Paper,cardboardandgoodsmadefromthesematerials,notincluded inotherclasses;posters,publications,namely,textbooks, study guides, revision guides, user manuals, instruction guides, reference guides and books computer systems and computer programs, bookbinding material, photographs, diaries, brochures, manuals, catalogues, calendars, charts, posters, stickers, printed matter; advertising and publicity materials, instructional, stationery; adhesives for stationery or household purposes; artists’ materials; paint brushes; typewriters and office requisites (except furniture); instructional and teaching material (except apparatus); plastic materials for packaging (not included in other classes); printers’ type; printing blocks, all included in class 16. ” Class 28 ofthe Nice Classification for trademarks includes “Games and playthings; gymnastic and sporting articles not included in other classes; decorations for Christmas trees” Class 41 of the Nice Classification for trademarks includes “Entertainment and education services; film production services; game services provided on-line from a computer network; microfilming; production of radio and television programmes; Videotape film production; providing on-line electronic publications; not downloadable, production of shows; television entertainment; videotape editing; videotaping; production ofaudio-visual presentations; production ofdocumentaries; production ofgraphical cine-film clips; computer assisted education services; education services relating to entertainment or education, provided on-line from a computer database on the internet; instruction in the design, development, installation, maintenance, repair and use of computers; organisation of computer related training courses; provision ofgames by means of a computer based system; providing digital music (not downloadable) from MP3 internet websites providing digital music (not downloadable) from the internet; electronic games services provided by means on the internet; production of animated cartoons, cine-film chips and programmes; advisory, information and consultancy services relating to all the aforesaid; all included in class 41. ” 124 6. BUSINESS OVERVIEW (Cont’d) In addition, our Group possesses the copyright to the published versions of titles based on manuscripts written by our authors. This is so because our Group contributes value-add contents such as editing, artwork and design to our published titles. The individual authors retain the copyright to their respective original manuscripts from which contents of our titles are based. It is our Group’s policy to require all the authors, who contribute to the contents of titles that we publish, to assign to us their entitlement to the copyright of the published versions of our Group’s titles in whole, throughout the world, and for the whole legal term of copyright under the Copyright Act 1987 of Malaysia, which lasts for the entire lifetime of the author plus an additional 50 years thereon. Typically, our Group pays royalty to our external authors within the range of 7.0% and 12.0% per title based on the published price of our Group’s published titles that are sold. Our Group also pays a fixed amount of fee to external authors for commissioned works and no royalty is paid for such works. Where else, our in-house authors are paid a fixed amount of salary and no royalty is paid to them. So long as the agreement between our Group and the authors are subsisting, the authors shall not make any assignments of the right to print and publish their work throughout the world or grant any licence to print and publish their work or any part thereof throughout the world without our Group’s written consent. The authors shaIl also not write or edit a competitive work for any other publishers and shall not publish such a work himself for so long as their work is still in current publication by our Group. In September 2013, our Group has also acquired from Pearson Malaysia the publishing rights and production files for a list of titles consisting mainly of National School Curriculum based educational materials (i.e. revision guides, workbooks, assessment books and model test papers). Our Group is allowed until 31 March 2014 to reprint the titles acquired under the Pearson brand and to continue to sell the reprinted/acquired Pearson branded stocks until 31 December 2014. All stocks printed after 31 March 2014 are to be branded under our Group. Similarly, our Group possesses the copyright to (i) some of the published versions of titles based on manuscripts written by the authors as our Group contributes value-add contents such as editing, artwork and design to the published titles and pays royalties of between 4.0% and 12.0%; and (ii) some of the published versions of the titles which copyright was purchased outright from Pearson. 6.16 DEPENDENCY ON PATENTS, INTELLECTUAL PROPERTY RIGHTS, LICENCES, INDUSTRIAL, COMMERCIAL OR FINANCIAL CONTRACTS 6.16.1 Dependency on Intellectual Property Rights As at LPD, save as disclosed in Section 6.15 of this Prospectus, our Group is not dependent on any patents or intellectual property rights for our business operations. 6.16.2 Dependency on Major Licences As at LPD, save as disclosed in Section 6.14 of this Prospectus, our Group is not dependent on any major licences, for our business operations. 6.16.3 Dependency on Industrial, Commercial and Financial Contracts As at LPD, our Group is not highly dependent on any material contracts or agreements including industrial, commercial and financial contracts, which are material to our business or profitability. ICompany No. I022660-T I 6. BUSINESS OVERVIEW (Cont’d) 6.17 LAND AND BUILDINGS 6.17.1 Own Properties As at LPD, our Group owns the following properties’ Issuance Date  of Certificate  of Fitness for  Registered/ Beneficial Owner  Title/Address  Description/ Existing Use  Tenure  Encumbrances  Land/ Bnilt-up Areas (sq. ft.)  Audited NBV as at 28 February 2014 (RM’OOO)  Market value (RM’OOO)”  Occupation / Certificate of Completion and Compliance  Sasbadi  Registered lease over all that piece of leasehold industrial land held under Title No. HS(D) 241020, Lot PT 9909, Pekan Barn Sungai Buloh, Daerab Petaling, Negeri Selangor Darnl Ehsan, bearing postal address at Lot No.12, Jalan Teknologi 3/4, Taman Sains Selangor I, Kota Damansara, 47810 Petaling Jaya, Selangor Darnl Ehsan  Industrial land erected upon with a single storey warehouse building with a three (3) storey office cum internal warehouse building annex/ Industrial warehouse and office  Registered lease 60 years (from 22.11.2001 to 21.11.2061)  First Part 1st Legal Charge in favour of Alliance Bank Malaysia Berhad  105,562A / 76,945  23,269  26,000  17.01.2007  (“Property I”)
126 ICompany No. I022660-T I 6. BUSINESS OVERVIEW (Cont’d) Registered/ Benefieial Owner Sasbadi  Deseription/ Title/Address Existing Use Developer’s Parcel No. C3­Three (3) bedroom 10-5P-3F known as Unit No. apartment! 5P, Type No. 3F, Floor No. Apartment (currently 10, Building No. C3, PD unoccupied) World Marina International Resort, Phase 3 (Bay View Villas) together with an accessory parcel car park bay erected on part of land held under Master Title No.Pajakan Negeri 11589, Lot 1311, Pekan Teluk Kemang, District of Port Dickson, State of Ncgeri Scmbilan Darnl Khusus, bearing postal address at Unit No. C-IO-5, Block C, Bay View Villas, PD World Marina International Resort, 61h Mile Jalan Pantai, Teluk Kemang, 71050 Port Dickson, Negeri Sembilan Darnl Khusus (“Property 2″)  Tennre Leasehold (99 years expiring on 17.12.2101)  Enenmbranees None  Land/ Built-up Areas (sq. ft.) Not Applicable/ 1,278*  Audited NBVas at 28 February 2014 (RM’OOO) 84  Market value (RM’OOO)’ 85  Issuanee Date of Certifieate of Fitness for Oeeupation / Certifieate of Completion and Complianee 14.05.1999
127 ICompany No. 1022660-T I 6. BUSINESS OVERVIEW (Cont’d) Registeredl Beneficial Owner Sasbadi  TitlelAddress Developer’s Parcel No. B1-2, I” Floor known as Unit No. B1-2, erected on part of land held under Master Title No. Pajakan Negeri 20121, Lot 5627, Mukim of Si Rusa, District of Port Dickson, State of Negeri Sembilan Darnl Khusus, bearing postal address at Unit No. B1-2, Block B, The Regency Tanjung Tuan Beach Resort, 5’h Mile, Jalan Pantai, 71050 Port Dickson, Negeri Sembilan Darnl Khusus (“Property 3”) Descriptionl Existing Use Two (2) bedroom apartment! Holiday apartment Tenure Leasehold (99 years expiring on 13.05.2081)  Encumbrances None  Landi Bnilt-up Areas (sq. ft.) Not Applicable! 969*  Audited NBVas at 28 February 2014 (RM’OOO) 208  Market value (RM’OOO)’ 215  Issuance Date of Certificate of Fitness for Occupation I Certificate of Completion and Compliance 27.10.1986
Notes: # Based on the updated valuation on 25 April 20/4 and 28 April 2014 prepared by our Independent Properly Valuer. Land area as stated on the title document to the relevant property. Conversion oforiginal measurements for properties in square meters (sq. m.) to squarefeet (.<;q.ji.J at I sq. m. = 10.7639 sq. fl. The properties listed above have been valued by our Independent Property Valuer on 12 December 2012 and 18 December 2012, and an updated valuation was carried out on 25 April 2014 and 28 April 2014. Please refer to Section 14 of this Prospectus for the valuation certificates from the Independent Property Valuer in relation to the valuation of the above properties. The revaluation surplus based on the valuation carried out on 12 December 2012 and 18 December 2012 was incorporated in the financial statements for FYE 31 August 2012, whilst the revaluation surplus based on the updated valuation carried out on 25 April 2014 and 28 April 2014 was not incorporated in the financial statements of our Group for FPE 28 February 2014. 128 ICompany No. I022660-T I 6. BUSINESS OVERVIEW (Cont’d) 6.17.2 Regulatory Requirements and Environmental Issue Our Directors wish to highlight that, as at the LPD, there is no non-compliance with all the regulatory requirements and environmental issues which may materially affect our Group’s operations and utilisation of properties owned by our Group. 6.17.3 Interruptions to Business and Operations We have not experienced any material interruption in business which had a significant effect on our operations during the past twelve (12) months preceding the LPD. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 129 6. BUSINESS OVERVIEW (Cont’d) 6.18 FUTURE PLANS, STRATEGIES AND PROSPECTS 6.18.1 Future Plans and Strategies Our future plans are focused in four (4) key areas as depicted in the figure below:
Acquisition of Publishing Businesses  Acquisition of Office cum Warehouse Building  Establishment of Applied Learning Centres  Educational Materials for National·Type Schools (Chinese) General Titles
(Bahasa Malaysia and Chinese) Development of New Online Educational Resources

(i) Acquisition of Publishing Businesses (a) Educational Materials for National-Type Schools (Chinese) We have been publishing National School Curriculum based educational materials mainly in Bahasa Malaysia and English to cater for national schools. One of our future plans is to acquire into a publishing business that focuses on educational materials for national-type schools (Chinese). (b) General Titles (in Bahasa Malaysia and Chinese) In addition, we also intend to acquire a publishing business focusing on general titles in Bahasa Malaysia and Chinese. Through the new publishing business, we intend to publish general titles focusing mainly on self-development, personal interests and hobbies as well as fiction and non-fiction materials in Bahasa Malaysia and Chinese. In 2013, the market size for general titles in Malaysia was approximately RM260.0 million based on apparent consumption (Source: Department ofStatistics and computed by Vital Factor). As at LPD, our Group has not entered into any active discussion or negotiation to acquire any of the said publishing businesses. The final costs of the acquisition are dependent upon, amongst others, earnings potential, market reputation, brand names and future prospects of the businesses. The exact terms will only be finalised after negotiation and upon agreement with potential vendors. We plan to utilise RMl1.5 million from our IPO proceeds for part-financing of the acquisition of the above publishing businesses within 24 months from the date of listing. Any additional funding required will be met through internally generated funds and/or external funding. 6. BUSINESS OVERVIEW (Cont’d) (li) Acquisition of Office cum Warehouse Building As part of our business expansion plan, we intend to acquire another office cum warehouse building with a built-up area of approximately 10,000 sq. ft. in the Klang Valley to provide additional space to cater for our Group’s business expansion, which, includes amongst others, expanding our editorial team as well as increasing the storagc area to cater for additional publications as a result of our anticipated business growth as mentioned in Section 6.18.1 (i) of this Prospectus, as our current office cum warehouse building located in Kota Damansara does not have sufficient space to cater for the business expansion plan. As at LPD, we have yet to identifY a suitable property for this purpose. We plan to utilise RM7.0 million from our IPO proceeds for the acquisition ofthe office cum warehouse building within 24 months from the date of listing. Should more funds be required, it will be met through internally generated funds and/or external funding. (iii) Establishment of Applied Learning Centres Our Group is currently engaged in the distribution of a range of applied learning products. This is mainly for third party brands. Part of our future plans is to establish applied learning centres in areas of high pedestrian traffic and easy accessibility, such as shopping malls, to provide training and education to young children primarily aged between four (4) and twelve (12) years old. The training and education is expected to focus on science, mathematics and technology by using robotics and children’s educational development products which will be conducted or supervised by experienced teachers and trainers. The establishment of applied learning centres is expected to enhance market awareness of the “Sasbadi” brand name and to promote that our Group is also involved in innovative educational materials. We plan to set-up two (2) applied learning centres within 24 months from the date oflisting. However, as this is still in the preliminary stages, we have yet to identify any suitable location for the setting-up ofthe applied learning centres nor hire any teachers or trainers for the centres. We plan to utilise RM1.0 million from our IPO proceeds for the establishment ofthetwo(2)appliedlearningcentres, whichinvolvesrenovation ofthe centres,purchase of furniture and fittings, and equipment as well as purchase of educational resources (e.g. robotics products). Should more funds be required, it will be met through internally generated funds and/ or external funding. Depending on the market response to the two (2) applied learning centres, we may establish more applied learning centres throughout Malaysia in the future. (iv) Development of New Online Educational Resources Our Group currently has six (6) types of online educational resources, namely Bank Soalan (Instant Assessment Generator), i-Learn, i-Teach, iPBS/iPS, Mind-Map and MEET as disclosed in Section 6.2.1.2 ofthis Prospectus. In addition, our Group continually undertakes development of other new online educational resources to cater to teaching and learning of various skills such as listening, thinking and speaking. We plan to utilise internally generated funds for the development of our new online educational resources. 6. BUSINESS OVERVIEW (Cont’d) 6.18.2 Prospects The prospects of our Group are dependent on the following factors: 29 years in the publishing business; Sustainable business performance; Competitive advantages and key strengths; Future plans to provide sustainable growth; and Industry prospects and outlook.
(i) 29 Years in the Publishing Business Our Group has a proven track record as a publisher of educational materials in Malaysia since we began operations in 1985. We have grown from a small publishing house to become one of the most established publishers in Malaysia with revenue of RM78.0 million for FYE 31 August 2013. Our long established track record demonstrates our business resilience and sustainability, which will form the basis for our continuing growth. In addition, our ‘Sasbadi’ brand has been in the market since our first publication in 1985. As such, we are able to enjoy brand awareness among students and teachers as well as parents who were once users of our educational materials. Our business performance is further substantiated by the fact that, over our 29 years of operations, we have published approximately 11,460 titles. We sold approximately 56 millioncopies ofpublicationsforthepastfourandahalf(41/2) financialyearsbetweenFYE 31 August 2010 and FPE 28 February 2014. In addition, we have also built an extensive distribution network over the past 29 years. This is supported by the fact that in FYE 31 August 2013 and FPE 28 February 2014, our products were directly distributed to approximately 130 and 90 retail bookstore customers operating approximately 200 and 190 retail bookstores in Malaysia respectively. For FYE 31 August 2013 and FPE 28 February 2014, our products were directly distributed to approximately 570 and 400 active dealers with their own network of distribution to schools and households in Malaysia respectively. Overall, in FYE 31 August 2013 and FPE 28 February 2014, we had a base of approximately 1,380 and 620 active customers respectively. Our established track record, brand awareness, proven business performance and extensive distribution network will provide us with the platform for business sustainability and future growth. (Ii) Sustainable Business Performance Our sustainable business performance is supported by the following financial achievements between the financial years ended 31 August 2012 and 2013: Revenue grew by 20.4%; Gross profit grew by 19.3%; Profit before tax grew by 18.8%; and Profit after tax grew by 17.4%. 6. BUSINESS OVERVIEW (Cont’d) Between financial years ended 31 August 20I0 and 2013, our financial performances were as follows: Revenue grew at an average annual rate of 18.4%; Gross profit grew at an average annual rate of 19.9%; Profit before tax grew at an average annual rate of29.2%; and Profit after tax grew at an average annual rate of 28.0%.
Our sustainable financial performance over the last four (4) financial years would provide us with the platform for continuing business success and growth. (iii) Competitive Advantages and Key Strengths Our competitive advantages and key strengths will provide a platform for continuing growth and success. This includes the following: Brand awareness; Established track record; Extensive distribution network; Large customer base; Diversity in product range; In-house content development; Availabilityoflarge range ofpublications; Economies of scale; and Experienced management and editorial personnel.
Please refer to Section 6.1(c) of this Prospectus for further details on our Group’s competitive advantages and key strengths. (iv) Fntnre Plans to Provide Sustainable Growth We have in place a sound business and expansion plan for moving forward. Our future plans are as follows: Acquisition of publishing businesses focusing on the following: National School Curriculum based educational materials intended for national-type schools (Chinese); and General titles in Bahasa Malaysia and Chinese; Acquisition of an office cum warehouse building to cater to our expanding business operations; Establishment of applied learning centres; and Development of new online educational resources.
Our future plans would provide us with the platform to grow our business. 6. BUSINESS OVERVIEW (Cont’d) (v) Industry Prospects and Outlook The outlook ofthe Educational Publishing Industry is dependent on the following factors: Perfonnance of the education sector focusing on primary and secondary schools; Government initiatives; Population, income and expenditure; and Economic conditions.
While generally enrolments in public schools have not been growing, they are partly compensated by growth from the private education sector. Nevertheless, student enrolment in public schools is expected to grow by an AAGR of 0.6% in the five (5) year period between 2011 and 2015. The Government, recognising the importance of education has put in place various initiatives to boost developments in the education sector, which will provide flow-on benefits to the Educational Publishing Industry. Some of these initiatives include the following: Malaysia Education Blueprint 2013-2025; IBestariNet and i-TRIM; Government Transfonnation Programme (GTP) Roadmap; Economic Transfonnation Programme (ETP); 10′” Malaysia Plan (lOMP); and Federal government expenditure on education and training.
Malaysia has also shown growth in population, per capita incomes as well as average household expenditure. All these will augur well for operators like us in the educational publishing industry. Economically, Malaysia’s real GDP grew 4.7% in 2013 and at an AAGR of 5.7% between 2009 and 2013, while real GDP growth for 2014 is forecasted to grow between 4.5% and 5.5%. For the first quarter of2014, the Malaysian economy grew by 6.2% due to stronger growth in domestic demand, as well as a turnaround in net exports. (please refer to Section 12 in the Independent Assessment of the Educational Publishing Industry Focusing on National School Curriculum in Malaysia prepared by Vital Factor) THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

 

 

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