Sasbadi Annual Report 2018

ANNUAL REPORT 2018 FINANCIAL STATEMENTS 135 26. Contingencies (continued) Material litigation Sasbadi Sdn. Bhd. (“SSB”), a wholly-owned subsidiary of the Company, had on 21 July 2017, received a copy of the sealed Writ and Statement of Claim dated 29 June 2017 from Messrs Skrine, acting on behalf of Penerbitan Pelangi Sdn. Bhd. (“PPSB”). The legal suit brought against SSB was due to the alleged infringement of PPSB’s copyright by SSB resulting from SSB’s publishing and sales of books on past year question papers for the Sijil Tinggi Persekolahan Malaysia (“STPM”) examination and the Malaysian University English Test (“MUET”) under the publishing agreement entered into on 13 March 2017 between SSB and Majlis Peperiksaan Malaysia (“MPM”). SSB had on 30 August 2017, via its solicitors, filed its defence against the claim and submitted a counterclaim. SSB had, on 27 September 2017, via its solicitors, received a reply whereby PPSB denied SSB’s counterclaims and SSB is put to strict proof of the said claims. On 16 April 2018, PPSB, MPM and SSB (collectively, the “Parties”) entered into a settlement agreement whereby it was agreed between the Parties that PPSB would withdraw its claim in the lawsuit with no liberty to file afresh and no order as to costs and, simultaneously, SSB would withdraw its counterclaim in the lawsuit with no liberty to file afresh and no order as to costs. Subsequently, on 18 April 2018, the Kuala Lumpur High Court struck out the claim by PPSB and the counterclaim by SSB in the lawsuit, with no liberty to file afresh and no order as to costs. In this regard, SSB shall continue to enjoy the exclusive licence granted by MPM to SSB to prepare, publish, print, distribute, market and sell the collections of past year question papers for the STPM examination and MUET, during the duration of the Publishing Agreement. 27. Related parties Identity of related parties For the purposes of these financial statements, parties are considered to be related to the Group or the Company if the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control. Related parties may be individuals or other entities. Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel of the Group refers to the Directors of the Group.