Sasbadi Annual Report 2021

It has also been accepted by the MOE as one of the approved CEFR competency tests to assess the readiness of English teachers in Malaysia. The Group recorded an actual sales value of RM4.190 million for the FYE 31 August 2021 as compared to RM4.439 million in the previous financial year, representing a decrease of RM0.249 million (equivalent to 5.61%) for our online digital product, i-LEARN Ace. The lower sales during FYE 31 August 2021 were partly attributed to our corporate social responsibility initiative which provided free i-LEARN Ace access to SPM 2020 candidates during the year (further elaborated below). It is to be noted that the revenue stated in the financial statement for i-LEARN Ace products has taken into consideration the accounting adjustments required under the MFRS 15, Revenue Contract with Customers, where income from the actual sales of products were amortised over the period of its performance obligation. The Covid-19 pandemic has transformed our nation’s educational landscape as home-based learning became the norm which resulted in both teachers and students adopting digital solutions for their teaching and learning respectively. Our flagship digital learning product, i-LEARN Ace, served as the ideal solution to address these needs. To ensure that our products are also accessible to vulnerable groups that have been severely impacted by the pandemic, the Group has partnered with Huawei Technologies (Malaysia) and TM ONE as our Technology Enabler and Cloud Service Provider respectively, to launch an initiative in December 2020 that provided all SPM 2020 candidates free access to i-LEARN Ace until the end of the SPM examinations in March 2021. Even though this had inevitably resulted in a negative impact to the revenue of our digital and direct selling segment, the Group was compelled to assist the community and provide the much-needed support in their hour of need. Post the campaign, we received overwhelming feedback and testimonies from these SPM students who managed to achieve excellent results thanks to i-LEARN Ace. Applied Learning Products (“ALP”) and STEM Education Services The Group’s ALP and STEM segment recorded a decrease in revenue from RM2.702 million for the FYE 31 August 2020 to RM2.195 million for the FYE 31 August 2021 (equivalent to 18.76%). The decrease was mainly attributable to the closure of schools and robotics training centres during the MCO period and also the cancellation of physical robotics competitions, leading to a reduced demand for our products. Despite the cancellation of physical competitions during the year, the Group continued to pursue its flagship applied learning programme with the MOE, i.e. the National Robotics Competition, virtually and has continued to win international accolades despite the current constraints. The Malaysian contingent, represented by six (6) teams, emerged as the overall champion at the prestigious World Robot Olympiad (“WRO”) 2021 that was held virtually. WRO 2021 was well participated by more than 200 teams from 65 member countries. The National Robotics Competition has consistently generated interest in the STEM field among students, parents and teachers. effect from previously won textbook contracts into FYE 31 August 2021. Similar to the Academic Print Publishing segment, the results from the non-academic related segment were also affected by the impact from the MCO and consumers’ conservative spending habits. The various lockdowns have caused our sales channels for non-academic publications, such as book fairs, school exhibitions, and traditional bookstores, to be negatively impacted due to forced closures and reduced retail activity. M oving forward, our Group intends to establish a stronger presence in the early childhood education segment. In November 2020, our wholly-owned subsidiary, Sasbadi Sdn Bhd (“Licensee”), entered into a licensing agreement with HarperCollins Publishers Limited for the exclusive rights to market a series of English Readers comprising 200 titles of levelled and Common European Framework of Reference for Languages (“CEFR”)-aligned books named the Peapod Readers. The licensing agreement grants us the exclusive right to distribute print volumes and non-exclusive right to distribute electronic versions in Malaysia, Singapore, and Brunei. These readers are highly relevant in meeting the early literacy needs of preschool and lower primary school children. In addition, we have also developed companion mobile applications which facilitate the learning of listening and speaking skills. The Group will continue to develop the Peapod Readers series as it is instrumental towards growing our market share in the early childhood education market. Digital and Network Marketing Business The Group’s digital and network marketing segment showed an increase in revenue for the current financial year from RM2.833 million for FYE 31 August 2020 to RM3.493 million (equivalent to 23.30%) for the FYE 31 August 2021. The increase in revenue was mainly attributed to our English competency assessment product, Linguaskill by Cambridge Assessment English (“Linguaskill”), which increased to RM0.671 million in FYE 31 August 2021 from its maiden contribution of RM0.042 million in FYE 31 August 2020. Linguaskill received its recognition from the Ministry of Higher Learning (“MOHE”), Malaysian Qualification Agency (“MQA”) and Education Malaysia Global Services (“EMGS”) as an official English competency test for private university admission and benchmarking as well as for International Student Visa applications. (continued) MANAGEMENT DISCUSSION AND ANALYSIS 17 ANNUAL REPORT 2021