Quality Books for Quality Education... Since 1979

CHAIRMAN'S STATEMENT

On behalf of the Board of Directors of Pelangi Publishing Group Bhd. (“PPG” or “the Group”), I am pleased to present the Annual Report and Financial Statements for the financial year ended 30 September 2016.

Financial Results Overview

The Group achieved a stable set of financial results for the financial year 2015/2016, despite the volatility in the region’s economies and fluctuation of foreign currencies exchange rate.

For the financial year ended 30 September 2016, the Group registered a revenue and pre-tax profit of RM63.1 million and RM4.4 million respectively compared to a revenue and pre-tax profit of RM63.3 million and RM4.9 million respectively in the previous financial year a decrease of 0.3% in revenue and 10.2% in pre-tax profit respectively.

The Publishing and Production and Printing segments of the Group continue to be the main contributors towards the Group’s revenue. The revenue recorded by the Publishing and Production Segment was RM54.7 million against RM54.9 million in the previous financial year while the Printing Segment recorded RM12.8 million against RM14.0 million in the previous financial year. The higher revenue in previous financial year was due to additional printing jobs resulting from GST implementation.

Dividend

In appreciation to our shareholders, the Board has recommended a final single tier dividend of 1.38 sen per ordinary share of RM0.50 each amounting to RM1,328,861 for the financial year ended 30 September 2016 for the approval of shareholders at the forthcoming Annual General Meeting. This is the 13th year PPG rewards its shareholders with yearly declaration of dividend.

Key Corporate Developments

People Development

As part of the measure to develop human capital, the Group has also established an Employees’ Share Option Scheme (“ESOS”), effective 1 August 2016, to reward our loyal employees. Human Capital is a key element to PPG’s long term growth. Excellent content development requires the knowledge, skills, intellects, and experiences of all our colleagues in the Group. The Group appreciates such talent and is dedicated to help our colleagues develop good career path here in PPG, in a conducive work environment.

International Collaboration

On 20 January 2016, PPG through its subsidiary, Pelangi Publishing (Thailand) Co. Ltd., collaborated with HSC Suan Dusit University, Thailand on 21st Century Kids Seminar Project and STEM Kindergarten Project. This also marks PPG’s commitment to collaborate with established higher learning institutes, in developing excellent educational content and promoting innovative teaching methodologies to schools via seminars or teacher trainings.

Digital Education Innovation

On 27 June 2016, PPG via its subsidiary, Pelangi ePublishing Sdn. Bhd., launched Malaysia’s first Secondary School Interactive Reference eBooks ("Pelangi Interactive eBooks"). This launch has been officiated by YB Dato' P. Kamalanathan A/L P. Panchanathan, Malaysia’s Deputy Minister of Education 1. This is a milestone for PPG in our digital education development, together with our technology partner, Xentral Methods Sdn. Bhd.

Corporate Social Responsibility (‘CSR’)

During the financial year, PPG and its subsidiaries continued to support various CSR initiatives reaching out to different segments of the local community.

PPG focuses on community welfare, to promote reading, literacy and also supporting education. CSR activities always revolve around improving the education system and literacy rate especially in our nation.

Throughout the financial year 2016, PPG has initiatives in the CSR activities such as sponsorships and donations to various communities as disclosed on page 49 of the Statement of Sustainability.

Corporate Governance & Sustainability

PPG continues to adhere with the principles and recommendations set out in the Malaysian Code of Corporate Governance 2012 and focus on the initiatives of sustainability in accordance with Environmental, Economic and Social (“EES”).

Sustainability is crucial in keeping shareholders’ value in the long run. More information about our sustainability efforts can be read on page 49 of the Sustainability Statement.

Outlook and Future Prospects

PPG was founded by a group of educators. For many years, PPG’s success has been supported by educators who used PPG products. Hence, PPG will continue to focus in creating good quality educational content, with technology innovation and expanding PPG content across ASEAN region.

Firstly, on educational content, PPG will continue to focus on creating high quality educational content and developing successful publishing teams, together with our pool of talented authors. With PPG’s regional offices in ASEAN, the editorial teams will develop talented authors and editors, who will improve our existing content bank. Good quality content will ensure PPG to be on the forefront of the educational publishing industry in ASEAN.

Secondly, on content delivery, PPG realises the importance of digital education in educating 21st century children today. Working closely with technology partner, Xentral Methods Sdn. Bhd., PPG will continue to invest and develop digital education products, fully utilizing the good quality content PPG has. PPG is ambitious in transforming conventional education delivery to digital education for the new generation, in line with the worldwide trend in education industry.

Thirdly, ASEAN markets outside Malaysia will be the development focus for PPG in coming years. Business developments in the Thailand and Indonesia regional offices are underway. PPG management is confident that these regional markets will contribute positively to the Group in the next few years.

With uncertain macro-economic conditions in ASEAN markets affecting retail book sales performance in coming years, the Group will also focus on cost reduction activities such as operational efficiency improvements and increase in in-house printing. The Group is optimistic of improved financial performance through organic growth in the preceding financial year.

Appreciation

On behalf of the Board, I wish to express our appreciation to the management, employees and agents for their dedication, hard work and commitment to ensure success of the Group. I also wish to thank all our customers, business associates, financiers, government bodies and authorities, shareholders and fellow Board members for their continued strong support to the Group.


Datuk Sum Kown Cheek
Executive Chairman and Group Managing Director