Sasbadi Annual Report 2020

On behalf of the Board of Directors (“the Board”) of Sasbadi Holdings Berhad (“Sasbadi Holdings” or “the Group”), it is our pleasure to present to you Sasbadi’s Annual Report for the financial year ended (“FYE”) 31 August 2020. Overview The FYE 31 August 2020 kicked off to a promising start, with the Group seeing an increase of RM1.811 million (equivalent to 4.0%) in revenue excluding textbook contract earnings; that is from RM45.061 million for the six-months period ended 28 February 2019 to RM46.872 million for the six-months period ended 29 February 2020. Unfortunately, on 11 March 2020, COVID-19 was declared a global pandemic by the World Health Organisation (“WHO”) and the subsequent implementation of the Movement Control Order (“MCO”) lead to an immediate and severe change in our economic landscape. During the time when the MCO was in place, schools were forced to close which hindered the Group’s operations significantly. It was also during this time that the Ministry of Education announced the cancellation of the Ujian Pencapaian Sekolah Rendah (“UPSR”) and Pentaksiran Tingkatan Tiga (“PT3”) examinations, and the postponement of the Sijil Pelajaran Malaysia (“SPM”) and Sijil Tinggi Persekolahan Malaysia (“STPM”) examinations. Despite the fact that the Group was able to resume operations in early May 2020, retail activity and market sentiment remained low resulting in a poor rate of recovery. In these trying times, the Group has consolidated resources, enhanced cost efficiencies and implemented various cost cutting measures. At the same time, we strived to develop products that meet the current needs of the market by innovating our solutions to facilitate remote learning and teaching. Prospects Despite significant setbacks, the pandemic acted as a catalyst for promising opportunities to our digital and technology-enabled solutions segment. The current circumstances accelerated the digital transformation of education. Sasbadi’s array of in-house developed educational technology placed the Group in a strategic position to meet current market demands. For example, our flagship digital learning platform, i-LEARN Ace, which provides comprehensive content and self-learning technologies effectively enables students to study remotely from the safety of their homes. We have also adapted our existing products to facilitate remote teaching by enabling a seamless integration of our content and systems with Google Classroom. The MCO has also surfaced the urgent need for infrastructure that enables students across the country to access digital learning resources efficiently. With the roll-out of 5G network at the horizon, our collaboration with Huawei Technologies (Malaysia) Sdn Bhd, whom we entered into a Memorandum of Collaboration with during the financial year, will soon present exciting developments in our educational technology front. As the endeavour to develop a safe and effective vaccine against COVID-19 is beginning to bear fruit, coupled with the government’s effort to revitalise the economy through its unique 6R Strategy i.e. Resolve, Resilience, Restart, Recovery, Revitalise and Reform, we believe that we will soon see a turnaround in the state of our economy. Nonetheless, we anticipate that retail market conditions will remain challenging as consumers may continue to spend conservatively. However, taking into consideration our initiatives currently in the pipeline, we are conservatively optimistic about our prospects and performance for the FYE 31 August 2021. Offer of Options Under Employees’ Share Option Scheme (“ESOS”) On 6 December 2019, in our initial anticipation of a better performing financial year, the Group announced an offer of options to eligible employees under our Employee Share Option Scheme (“ESOS”) to subscribe for new ordinary shares in Sasbadi Holdings. The offer was made in appreciation of our team and as a form of motivation for our employees to strive for greater results. Unfortunately, the impact of the COVID-19 pandemic on the economy and the share market resulted in none of the offered options to be exercised prior to its expiry date on 5 December 2020. Appreciation Our sincerest thanks to our fellow Board members for leading the Group through these unprecedented times. To the management team and employees of Sasbadi, thank you for your tireless efforts and relentless dedication to maintain the Group’s operations in the face of great volatility. To our business associates, thank you for your support and the continuous trust and confidence you place in the Group. We would also like to record our sincere appreciation to Mr Lim Hun Soon @ David Lim who has stepped down from the Board on 30 July 2020, for his invaluable counsel, wisdom and contribution to the Group over the years. At the same time, we are pleased to welcome Mr Tang Yuen Kin as our Independent Non-Executive Director since 30 July 2020. With his vast experience and knowledge, we are confident that he will contribute positively to the Group as a member of the Board. The Group humbly requests for your continuous support and trust as we pave the way to greater heights in the years ahead. Dato’ Salleh Bin Mohd Husein Independent Non-Executive Chairman Law King Hui Group Managing Director MESSAGE TO SHAREHOLDERS 08 SASBADI HOLDINGS BERHAD