4. The Description of Company's Operation in Each Product Line

4.1 Type of Essential Products and Services :

1.  Books Currently, SE-ED is one of the largest book publishers in
    Thailand, publishing books for
    bookstores nationwide. The Company pioneered in publishing knowledge
    books in several fields; such as administration/management,
    self-development, psychology, engineering in various fields, youth
    development books, language and dictionary, parenting, food and
    health, maps, non-book products (e.g. CD) which help to promote the
    development in many aspects.

2.  Magazines At the end of 2012, the Company has published 7 magazines
    of science and
    technology which are,

-   Semiconductor Electronics Plus : A monthly magazine emphasizing on
    electronics, launched in 1974, and later the Company changed the
    name of the magazine from ‘Semiconductor Electronics’ to the new
    name of “Semiconductor Electronics Plus”, since January 2008, while
    maintaining similar types of contents to the previous issues.

-   UpDATE : A monthly magazine catering to those readers who want to
    keep abreast of the latest developments in the world of science and
    technology, published since 1978.

-   MICROCOMPUTER : A monthly magazine devoted entirely to the knowledge
    of Computer and information technology for Corporate, in circulation
    since 1983.

-   Hobby Electronics : A monthly magazine specially preparing the
    knowledge of electronics for fledgling electronics enthusiasts and
    also interested readers was launched in early 1991.

-   Industrial Technology Review : A monthly magazine provided reading
    material on major
    developments in industry technology and management for plant
    engineers and general readers, launched in mid-1994.

-   Mechanical Technology : A monthly magazine related to mechanical
    engineers concerning
    operating techniques, and machine problem - solving guidance for
    engineers and general
    readers - first published in the middle of 2001.

-   The Absolute Sound & Stage : A monthly magazine specially provided
    the knowledge of the sound and light systems on stage technology,
    work in the studio, and related devices and tools, launched since
    the end of May 2002.

  The Company’s revenue from magazines comes from the sales of
  magazines, advertisements and special editions, as well as revenue
  from organizing several activities.

3.  Distribution The Company distributes books published by SE-ED and
    other publishers including
    the companies whose publishing is in the Company’s direction, by
    distributing books to small and large scale stores nationwide
    roughly around 6,300 stores. And, the Company also sells directly to
    the educational institutions.

The Company has been appointed as Thailand’s sole distributor of Oxford
University Press (OUP) for books and related media for English language
teaching and learning from January 1st 2007 onward. Under this agreed
cooperation between SE-ED and OUP, the business activities of production
and distribution associated with English language learning will be
increased through the company’s distributing channel which promptly
allows SE-ED to share some responsibility of resolving the country’s
problem with regards to English language learning in Thailand in the
much greater extent.

Presently, the Company is the largest book distributor to the chain
bookstores. Books which were self-published by the Company is around
1,400 titles, while also help distributing 5,800 titles from other
several publishers and organizations.

4.  Bookstore Business (SE-ED Book Center or SBC) SE-ED operates SE-ED
    Book Center and network stores and “University bookstores” all
    located both in Bangkok and other provinces,
    including managing space in the selling areas in different models.

SE-ED Book Centers are medium-sized bookshops selling all kinds of
books, with modern designs and good layout plans, efficiently selling
and emphasizing being located in convenient locations for people to come
to buy books. The main locations are located in leading supercenters
(such as Tesco Lotus, Big C, etc.) leading shopping malls (such as Siam
Paragon, Central, The Mall, Robinson, Future Park Rangsit, Future Park
Bangkae, provincial leading shopping centers,
etc.) and education institutes (such as Ramkhamhaeng University,
National Institute of Development Administration, Dhurakij Bundit
University, Siam University, Khon Kaen University, University of the
Thai Chamber of Commerce and Srinakharinwirot prasanmit prasanmit
University) in different models both in Bangkok and other provinces.

  By the end of 2012, SE-ED has already opened 470 branches of SBC. From
  this mentioned figure, there are 438 branches in operation, with 152
  branches in Bangkok and nearby provinces, and 286 branches in other
  provinces. With 432 bookstores operated by the Company, the other 4
  branches are designated as SE-ED Book Center Network Bookstores (SE-
  ED Book Center fully supports the shops, as a book distributor
  supplying the books) and 2 branches are SE-ED Network Bookstores.
  (SE-ED does not fully support, since the shop owners can order books
  by themselves). Moreover, SE-ED is also responsible for managing the
  books and magazines sales space in Supercenters, and other shopping
  centers in different formats totaling more than 24 sales and service
  points. Today, SE-ED Book Center is the complete chain of bookstores
  with the highest sales in Thailand.

Number of SE-ED Book Center Branches and its Network Stores by the Year-
End

[]

Remarks - There is a reclassification of bookstore branches to be
properly suited. Therefore, the number of branches may be different from
other published documents by the Company. Branch includes the small size
of bookshop of 20-50 square meters. Kiosk means mainly the newsstand
sales type. Points of sales means the sales type that the Company takes
charge in managing the products in book corners (including newspapers
and magazines) in supercenters of department stores.

-   At the end of 2012 there are 438 existing branches in operation.
    There are 152 branches in Bangkok and its vicinity and 286 branches
    in other provinces. This figure has included the small scale of 16
    branches.

-   At the end of 2012 there are 428 existing branches in operation,
    using the brand of, SE-ED book center, 4 branches in university book
    centers.

-   At the end of 2012, there are 4 SE-ED Book Center network stores
    (SE-ED is responsible for all books supplied to the network stores)
    and there are 2 SE-ED network stores (SE-ED provides special
    assistance and allows the stores to choose either the name of SE-ED
    Book Center or SE-ED network but the shop owners can order books by
    themselves), and 24 kiosks.

5.  SE-ED Learning Center In 2006, SE-ED founded SE-ED Learning Center
    department for organizing all activities for kids. In September
    2008, SE-ED has located SE-ED Learning Center on approximately 600
    square meters at Chamchuri Square Building, the property of
    Chulalongkorn University, in order to provide complete services on
    occupational training and training in all sciences, available for
    the general public including youth and undergraduate students.
    Nowadays In addition, the Company’s new business strategies included
    the development of two supplementary curricular aiming to increase
    children’s potential and intelligence in mathematics and English.
    SE-ED provides a variety of activities as follows :

-   Organized SE-ED Kiddy Camp for young people from 8-14 years, which
    is normally held during school breaks. There are various types of
    camps to choose, from countryside camp, day-trip camp, to stimulate
    young people to learn more, while studying the learning behavior of
    Thai children before the idea becomes amalgamated with other ideas
    that support the development of Thai children in greater numbers,
    teaching young participants the courage to learn the study of
    science, electronic experiments, teamwork, leaderships,
    self-learning, basic knowledge in survival, moral and, in
    particular, friendships. Moreover, it allows children to participate
    in several different enjoyable activities for example, young
    researcher activity, activity base, gaming, exercise, sports, etc.

-   FAN Math is a supplementary mathematics program for kindergarten 3
    to primary 6 levels. Teaching and learning materials are presented
    in animation format.

-   ACTive English is a supplementary English program for kindergarten 2
    to primary 6 levels. Teaching and learning materials are mainly
    interactive multimedia and consistent with the Common European
    Framework of Reference for Languages (CEFR).

  As of December 31, 2012, SE-ED Learning Center opened 3 branches:
  SE-ED Learning Center Chamchuri Square, SE-ED Learning Center Suk-Anun
  Park, Saraburi, and SE-ED Learning Center Central Plaza Khon Kaen,
  Khon Kaen, Khon Kaen branch is the first franchised branch that aims
  to test efficiency and readiness of the franchise system, which will
  be the main direction of business expansion. In 2013, SE-ED Learning
  Center will expand its branches under the franchise model. It is
  estimated that by the end of 2013, there will be no fewer than 15
  branches nationwide.

6.  Plearnpattana School SE-ED’s proportion in the joint investment on
    Plearnpattana School accounts for 48.97% from the registered capital
    and paid capital worth 169,475,500 Baht. SE-ED has cooperated on
    administration for providing resources and knowledge in order to
    establish Plearnpattana School as an alternative school.
    Plearnpattana School is expected to develop Thai youth’s potential,
    through its flexible curriculum, to be the mainspring of the nation
    in the future. Plearnpattana School takes children from pre-nursing
    through Matayom 6. Its location is on 32,000 square meters (20 Rai),
    the suburb of Bangkok.

According to past three academic years, the number of Plearnpattana
School students each year can be seen as follows :

  -------------------------- --------------- --------------- ------------
                                                             (unit :
                                                             person)

  Academic year              2012            2011            2010

  The number of students     1,122           1,109           1,052
  -------------------------- --------------- --------------- ------------

7.  Other Activities. The Company also performs additional activities in
    2012 as in the following :

-   Produced a cable TV program called “Book Variety”, a program that
    offers a variety of knowledge from different points of view from
    books, for example : health, religion, managerial perspective,
    stocks and finance, children and youth books through recommendations
    and interviews of people involved in publishing. This includes
    writers, translators, or editors broadcasted on every Monday from
    5.30 p.m. - 6.00 p.m. Nation Channel, through PSI satellite system
    and all cable TVs nationwide.

4.2 Marketing and Competition

Policy and Marketing

Throughout the past 30 years, the Company has been a leading initiator
in publishing academic books, in “How-to...” category. This reputation
as Thailand’s main publisher of technological books and journals enabled
other Company’s operations to flourish and enjoy greater success.

The Company has set a long-term direction and marketing strategy which
can be briefly described as follows :

Vision : SE-ED shall be a leader in providing easy and convenient access
to knowledge to Thai people.

Mission : SE-ED seeks to do business in the areas that promote education
in the fields necessary to the development of the nation. It operates
the business that will make “Thais Smarter” by developing a sustainable
business with a continuous earning growth at the level above the
industry’s average, being a role-model company that can create work
result deems beneficial and accepted by society at large with happy
staffs, and able to deliver and maintain an attractive long-term
investment returns at the satisfactory level.

Marketing Strategies : To achieve the stated vision and mission, the
Company stresses the readiness in several areas to develop quality
service which responds to the needs of target customers. To do so, the
Company focuses on the expansion of SE-ED Book Center and the addition
of interesting products in the stores. In addition, the Company will
make e-books and other services available in SE-ED App in order to
accommodate the lifestyle change of customers. Lastly, the Company aims
to expand its educational business in the future. Thus, the Company will
concentrate on the following marketing strategies:

1.  The Company determines to ensure growth and bookstore business
    strength by stressing on the of
    market expansion to build the potential to cover more sizable
    communities nationwide. SE-ED
    Book Center and network formats will be implemented and expanded,
    selecting the high potential
    areas for long-term growth, rather than solely taken into account of
    the initial profitability outcome as a main source of consideration,
    to promote and ease customer access to the stores more conveniently
    and equally. It also proceeds to strategically and thoroughly
    responds to the customers’ needs wherever they are, to maintain the
    Company as the leader in the business, and to support the growth of
    book business as a whole into the future while creates favorable
    brand perception and
    acceptance, with the emphasis on the idea of “Think of buying books,
    think of SE-ED Book Center”.

2.  The Company emphasizes on providing products or services that are
    convenient fast, and punctual. To do this, the Company focuses on
    creating impressive experiences, under the idea of “Think of reading
    books, you will get to read it by no later than tomorrow”, therefore
    the Company launches the project called “Order Today, Get It
    Tomorrow”. The Company uses technology in combination with modern
    management to link production, warehousing, order picking and
    delivery together. SE-ED has also improved the books and products
    order system between branches and on website : www.se-ed.com.
    According to this integration, it allows more efficient logistic
    management at best. This reduces the need to acquire more space to
    support large volume of books in the market, making possible for an
    increase in service capability and wider coverage of store
    throughout the country that serve and respond more quickly to the
    customers’ need and create customers’ satisfaction. To add up, this
    fulfills the concept of “a small store serves as a big one”, the
    customers come and get whatever they want. At this point makes the
    Company more competitive and becomes the company’s advantage in
    competitions.

3.  The Company seeks to find and develop attractive and interesting
    products and create marketing mix in the stores in a consistent
    manner to allow more attractive store outlook and more frequent
    customer visits to the stores, while able to acquire products that
    customers look for within a short period of time, creating
    differentiation as compared to its counterparts. This results in
    much better profitability at each branch.

4.  The Company understands the importance of excellent services and the
    promotion of Company's image, by concentrating on staff and team’s
    consistent development, and also create professional working
    attitude to the staffs to really take care of each customer in more
    detail aspects, leading to the better customer's satisfaction.

5.  The Company uses an integrated marketing communication model by
    developing suitable tools and channels to promote products, and
    reinventing itself with several models towards relentless
    promotional activities. That is to say the Company is stressing the
    importance of marketing activities as a value creation for business.
    With this, the Company also directs all of its efforts to the target
    customers, and in addition, directly respond to the customers' need,
    which allows success for most of the newly-launched products; such
    as promotion of products and services through advertisement and
    public relation via storefront LCD display system which will be
    installed in the branches to stimulate more books buying sentiment.

6.  The Company promotes customer’s relationship and business alliances
    that work closely together. The Company is committed to treating
    customers as promised, under the etiquette of business operation.
    The Company also seeks to work on the basis of mutual business
    success, for the
    Company opens to the exchange of views in doing business to seek
    ways in resolving conflicts and difficulties that might occur. For
    the better cooperation, the information learned can be used to
    improve the product development and management process to meet the
    unwavering standard and this should benefit all parties involved.

7.  The Company builds and uses the marketing database more earnestly,
    through the database
    collection system by recording all historical data about the
    customers’ needs. By providing products and services to customers in
    needs, the Company ensures the success in creating a good impression
    for customers. It also brings the information to analyze and use the
    information to
    improve services in the future.

8.  The Company emphasizes on raising sales of the new products,
    therefore the Company sets up new channels to provide updates on
    events. And the Company has a specific team to focus on the new
    channels in order to increase sales and make the customers aware of
    the concept “think of books, think of SE-ED Book Center”. In
    addition, the activities will be held so as to promote the
    interesting products in SE-ED Book Center.

9.  The Company has developed SE-ED App, its IT facilities, and other
    facilities involving logistics and sales services in order to
    support the growth of e-books and the change in customers’
    purchasing behavior that corresponds with the progress of
    technology.

10. The Company’s business objective comes from the attempt to solve the
    country’s problem in education and to develop Thai people’s
    potential in English, math and science. Therefore, the growth of the
    Company will also be the improvement of the country. With such
    objective, the Company has expanded SE-ED Learning Center business
    as well as other business units in order to develop a research-based
    comprehensive business model that offers the most efficient and
    time-effective solution that will enhance educational achievement of
    Thai people. In the initial phase, the Company has launched two
    educational programs for primary students: FAN Math to improve math
    skills and ACTive English to develop English language proficiency.
    It is expected that in a few years from now SE-ED Learning Center
    will grow into a franchise business, making the Company’s education
    business a major contribution in the Company’s growth.

Policy and Marketing

Pricing Policy : Pricing policy is set to meet the purchasing power of
each target group, and the production costs, while maintaining
reasonable profits in a long run. However, this will not be applied to
magazines sales, which depend on advertising income as the main revenue
earning.

Distribution Channels : The Company distributes books and magazines
through networks of
SE-ED Book Center, and other bookshops in Bangkok and other provinces by
managing the distribution channels according to customers, products and
services as follows :

1. Books and Magazines Retail Customers : The customers are general
readers and working people. The Company distributes books and magazines
through the network of SE-ED Book Center’s 470 branches with 438
branches still operating including 6 branches for network bookstores (as
of December 31, 2012) and on www.se-ed.com which the centers of books
and entertainment for family and working people, located in shopping
centers and supercenter in Bangkok and other provinces and also in the
higher educational institutes.

2. Books and Magazines Wholesale Customers : This group of customers is
accounted for around 6,300 different stores. The Company is responsible
for distributing all books and magazines that the Company has the sole
rights to distribute to all the bookshops in Bangkok using its own
transportation. For distribution to other provinces, the Company uses
private transportation company as found appropriate.

-   However, for the distribution of magazines published by SE-ED, the
    Company uses several transportation companies in each region to
    distribute to bookshops.

-   For the circulation and distribution to stores in Bangkok and around
    its vicinity, the Company utilizes the “Standing Order” distribution
    system, a combination of consignment and non-returnable sales
    system. For most of booksellers in other provinces, a non
    -returnable sales system has been applied with a limit of returnable
    quantities.

3. Advertisers Major companies in the industrial circle including the
computer and electronic circle are both regular and non-regular
advertisers in the Company’s monthly magazines.

  Competition

Industry Overview and Competition : The book business is an industry
with a continuous growth, there is still the support from the government
sector with the policy to campaign the years 2009 - 2018 the “decade of
reading”. It is believed that there is still room for the market to
expand. As a result there were more business operators entering the book
and magazine publishing and bookselling businesses, causing more
competitions in this industry and the market to grow faster.

However, the bookstore business faced a major problem in labor wage.
Effective in April 2012, the government announced a new policy to change
the minimum wage in 7 pilot provinces to 300 Baht per day and to
increase it by 39.5% in the other provinces. Moreover, the starting
salary of government officers who are a bachelor’s degree holder was
adjusted to 15,000 Baht per month. Even though the government tried to
help by decreasing the corporate tax rate from 30% to 23%, it was not
possible to compensate the excessive expenses from the wage hike. In
addition, the bookstore business could not change the price of books to
correspond to the rise in expenses while there was an aggressive
competition among department stores and a change in consumer behaviors
from various impulses. Therefore, the overall sales performance in book
business has dropped.

Opportunities and Threats: Government agenda currently promotes more
advanced education for its citizens to prepare them for the global
challenge by setting 2009 to 2018 as ‘The Decade of Reading’. This, in
turn, triggers an increase in books demand, causing a positive outlook
for book business. However, there is the increasing cost in book
business from the sharp rise of labor wage in 2012 and 2013, the
increase in transportation fee, and the more aggressive competition
among bookstores. Consequently, bookstore business in general has a
tendency to generate fewer profits than before. On top of that, people
nowadays have many distractions in everyday life and tend to spend less
time reading books.

Key Success Factors : The factors that contribute to the Company’s
current leading position and the Company’s more important role in the
future book business can be summarized as follows :

-   Business policy is evidently conducive to national development :
    Since the beginning the Company has all along adhered to its
    business in knowledge dissemination, with a view to developing the
    full potential of Thai people in areas essential to the national
    development. The Company’s continued growth is in line with the
    national development, and fortunately, not severely affected by the
    economic slump. Besides, its corporate image is clear, well
    received, and trusted by every party concerned.

-   Tools and business components for future business operation :
    Nowadays, the Company’s different business divisions support one
    another efficiently and render more opportunities for success.

    1.  The Company has its own largest distribution channel and network
        store, SE-ED Book Center. The stores spread into major
        communities all over the country and the Company is always the
        first to receive offers to select new locations for new
        branches. As a result, the distribution business had more
        chances to grow while the bookstore business’s cost was lower.
        Moreover, it allows more possibilities of success for book
        publishing, as there are direct distribution channels that
        allowed the customers to receive the products faster and more
        conveniently.

    2.  The Company also has its own media and PR tools, including
        www.se-ed.com, www.thailandindustry.com, www.se-edlearning.com,
        magazines, Book Variety.

Quantity and Size of Competitors : As the book business is one of the
continuously growing
businesses and still has a potential to grow while the business barrier
for new operators is low, many people are interested in this business
each year, both as a publisher and bookseller, despite that fact that
many went out of business already. Because each of the operators tries
to differentiate themselves from one another, this result in the
flourishing of books and the number of books readers keeps expanding.
That’s why the company isn’t heavily affected by this.

Moreover, as the Company’s business model covers publishing,
distributing and bookstores, the company always benefits from the new
comers in the book business, as the result the effect of competitors is
slightly.

For the bookstore business, there are more competitors from several
large firms interested in doing this business but the market has divided
which conform to the products mixed in the stores and to location, as
such, this causes not much effect to the Company. While the Company as
the market leader with strong financial position and receiving great
acceptance by general readers and being ready to expand new branches,
the Company can keep a big step ahead by taking advantage of first
priority to choose new location and has the lower operating investment.
In the future the books business is expected to grow out of a few large
firms who are well prepared to face the competition.

Market Share : Although the Company is the market leader in 3 important
businesses : the
leading retailer in bookstores chain and book distributor (or
wholesaler), and books publishers. Owing to the continuous growth of
book business, numerous entrepreneurs show interest in joining and this
causes the spread of business concentration. The proportion of the
market shares for market leaders in this industry are not significantly
different.

As book business has limitation in terms of completeness of database
which makes the market share estimation in each segment contains some
errors.

For retail bookstore business, the Company believes the network of SE-ED
Book Center is the one of the major players who posses quite a large
proportion of the market share.

For the business of distributing book to booksellers, the Company
becomes the largest distributor in the market, but the proportion is
still not high, due to the fact that market share in book business is
less concentrated.

For publishing business, the Company always ranks between numbers 1 to 3
in the book market, depending upon which publishing, in each year,
produces the best selling tittles more or less, but in general the
market share is not that significant because it is less concentrated
than usual.

Substitution products : The rapid development in industry and business
leads to a need to learning new things and developing knowledge to gain
advantage over the competition. Regardless of how far the communication
and computer technology progress, books still play an important role in
imparting knowledge to people conveniently and inexpensively anywhere,
anytime, and for a long time.

Bargaining power of buyers and sellers : As the books business has a
standard trading condition structure with several traders in which
nobody can evidently dominate the market and the needs to be
interdependent of each other, there are not many problems in bargaining.
However, due to the fact that new large retailers in other businesses
expand into the books business and may cause bargaining with publishers
and distributors according to the general retail business nature but is
still not much effect of the over all business as their market share is
still not significantly large enough at present.

4.3 Procurements of Products and Services

Products from other publishers : in general, consists of 2 parts.

1.  Books for distribution : At present the books that are distributed
    to all bookstores through out the country come from the Company’s
    own publishing house and other around 510 publishers who decide to
    grant the Company as their distributors to distribute their book
    nationwide. The Company will consider only the products which are in
    accordance with the Company’s marketing direction and have an
    opportunity to sell.

2.  Books and other goods SE-ED Book Center sells directly : SE-ED Book
    Center receives goods from 2 main channels : the Company’s
    distribution business unit and the other channel and mostly deals
    directly with suppliers by the marketing department of SE-ED Book
    Center in charge of consideration and selection of products for
    sales in the Company bookstores.

Relation with suppliers and the effect of losing them : For value of
products bought for reselling from each distributor will not be more
than 30% of total selling cost, whereby the proportion of product value
purchased from the 10 first largest trading partners against the cost of
goods sold for the past 3 years is illustrated as follows :

(Unit : Million Baht)

  ------------------- ---------- -------- ---------- -------- ---------- --------
  Item                Year 2012           Year 2011           Year 2010  

                      Value      %        Value      %        Value      %

  Value of reselling  1,397.28   52.64    1,284.26   49.30    1,348.86   51.77
  products from the                                                      
  first 10 largest                                                       
  trading partners                                                       

  Total cost of goods 2,654.40   100      2,605.11   100      2,605.51   100
  sold                                                                   
  ------------------- ---------- -------- ---------- -------- ---------- --------

In 2012, there is no specific revenue from sales considered to have
severe effect on the Company. In addition, the Company is not involved,
in any way, with the particular seller and has no obligation to place
any order in the future.

Books published by SE-ED : Books and magazines published by the Company
are the
responsibility of the book publishing and magazine departments to
prescribe the direction and selection of original manuscripts to publish
including the production process of printing into complete copy before
handover to the Company distribution group for distribution.

Production utilization ratio : As the Company does not own a printing
press, the production
of books and magazines are in the responsibility of in-house work groups
to take care of the production throughout the complete cycle and spread
the printing jobs to several printers matched with the schedule.
Therefore the real production can be increased or decreased without any
unnecessary delay.

Raw materials and suppliers : Paper is the main raw material which the
Company purchases from local distributors in lump sums. The types of
paper used in the production of books and magazines mostly are
wood-free, newsprint, coated and cover coated.

Relation with raw material suppliers and the effect of losing them : For
the purchasing value of paper, the Company has no particular relation
with these suppliers and has no binding obligation to buy from them in
the future. In the case that these suppliers can not provide the Company
with paper, the Company can still procure them from other suppliers. The
total value the Company expenses for raw materials and finished goods to
suppliers was 32.76% of the cost of products in 2012 or 1.57% of cost of
goods sold, which can be considered that no specific supplier can cause
severe effect to the Company.

Process and production technology : Production process for a new book
starts from editorial teams calling for meetings to plan and consider
the selection of manuscripts. This manuscript may come from the
self-proposed original writer, or from the Company-assigned writer or
translator in accordance with the Company’s determined guidelines. Then,
the editorial team will consider the content, correctness, and
readability of the books which also include the activity involved,
re-evaluating and opinionating the books in terms of marketability by
Company’s respectable book advisors who possess knowledge and interest
in particular subject areas. After the team agrees on the book, the
content may be re-adjusted and formatted at a suitable level for the
market, and the use of copyright contract may be signed with a writer, a
translator, or a foreign publisher.

In the mean time, the artwork team will start to design the book cover
and when the finished
manuscript is ready for print, the computer artwork will later take on
its duty. After finishing the artwork, the step of proof-reading
activity will be taken and corrected until the content and art design
are completed. In the case of books, there will be additional step that
are the naming of the book and pricing, which also involves the related
marketing work that is suitable for the target audiences.

The process of producing magazines is quite similar to the process of
book publishing, that is, the editorial team takes responsibility right
from the market direction till the end of the production process.

For book and magazine manuscript works, the Company uses Macintosh
computers and PC along with all other related tools and equipments,
whereby all this computer technology shows sign of having higher
efficiency but becoming less expensive. In addition, the editorial staff
in the team are very experienced and posses expertise in writing. They
come from people in the editorial team and also general writers.

After the manuscript is done, the Company will pay for the printer to
print, while paper is supplied directly by the Company. The paper
Company then delivers paper straight to the printing press at the
determined time so that each manuscript is printed into book and
magazine.

Capability, necessity, and expenses in modifying machines to be able to
compete : As the Company does not own a printing press, there is no need
for the Company to invest in the machinery and equipment in printing. It
becomes unnecessary for the Company to develop machinery and equipment.
And due to the competitive environment of the printing press business,
it equips the Company with bargaining power and, with this, the Company
is always allowed to have choices of printing press companies to choose
from.

Environmental Impact : The core production team for the Company is
actually the editorial team. Therefore, production process is only
concerned the production of manuscript and coordination within offices
of the Company. Such activity will not result in pollution that can
affect the environment and the Company’s business is not under the
direct control of any government agency.

4.4 Undelivered Jobs

- None -