Chairman's Statement 2008

2008 Annual Report
Chairman’s Statement

On behalf of the Board of Directors, it is my pleasure to present the Annual Report and Audited Financial Statements of SEG International Bhd (“SEGi”) and the Group for the year ended 31 December 2008.

Malaysian private higher education providers are increasingly becoming a strong contributor towards meeting the country’s human resource needs. The Government has also given these education providers more emphasis. Due recognition were given to the private colleges which are providing quality education by upgrading their status to University College.

The continuing emphasis placed by the industries on employing knowledgeable workers also played an important role in shaping the mindset of individuals to invest and focus on the attainment of knowledge and skills, irrespective of the economic environment.

Financial Performance

I am pleased to report that in spite of the overall weak economic environment, the Group achieved higher revenue of RM127.4 million for the year under review, as compared to the previous year of RM86.3 million, representing an improvement of 48%. In tandem with the higher revenue, the Group recorded a higher pretax profit of RM9.9 million for the year ended 31 December 2008 as compared to the preceding year of RM2.5 million.

The improvement in performance was mainly attributable to the introduction of new academic and training courses at the Group’s institutions as well as the gain on disposal of the Group’s Flagship Campus in Kota Damansara.

Dividend

The Board of Directors is recommending a final dividend of 3 sen per share, less income tax, for the year ended 31 December 2008, subject to the shareholders’ approval at the forthcoming Annual General Meeting.

Operational Review

Several milestones were achieved and one definitely worth mentioning was the upgrading of the status of SEGi College Malaysia to a University College status. With this new status, the Group has been developing many new SEGi’s own undergraduate and postgraduate degree programmes.

SEGi is a well established brand name, being a private education provider for over 30 years. As such, we foresee the new programmes that the Group is developing will further enhance the profitability of the Group. SEGi’s brand name will also be established internationally as the Group has started offering our own programmes to institutions of higher learning outside Malaysia.

During the year, the Group has also strengthened its new Faculty of Allied Health Sciences. Amongst the new programmes launched was the Master of Pharmacy programme, a twinning course with the University of Sunderland, United Kingdom. The Group has also established five Nursing Schools within the Group’s institutions, making us one of the main education providers in the field of nursing. We see a big potential in healthcare education as this industry is expected to grow with increasing consumer’s demand for quality healthcare.

Since the re-branding of the Group’s institution in 2006 and the launching of the main campus at Kota Damansara in mid-2007, the Group has seen a significant increase in the student numbers at all the Group’s institutions. The growth in the number of new enrolments has been very encouraging and we believe that this trend will continue.

One of the main challenges facing by SEGi is the competition that exists between the institutions of higher learning in the country. Seeing that, the Group has continuously explored and developed new programmes to target the changing education needs of students, as well as revising its curriculum to ensure that its programmes are industry-driven and value-added with emphasis on increasing the employability of the graduates. Steps are also taken to give the students opportunities for industrial attachments during their tenure with us.

Corporate Development

The Group is in the process of acquiring a piece of leasehold land at Kota Damansara, within the vicinity of the SEGi University College campus. The land will potentially be developed to provide additional facilities to the University College.

Corporate Social Responsibility (“CSR”)

Despite the stronger overall financial performance, the Group realises that the traditional responsibility of delivering profits to shareholders is no longer adequate. We are clearly aware of our corporate responsibility and believe in conducting our business in an economically, socially and environmentally sustainable manner. SEGi believes that CSR is more than just paying lip service, for our organisation, it is a full-time and an ongoing mission.

Our activities in 2008 saw the Group’s contribution, participation and support in programmes and projects to enhance healthcare, professional development and preservation of the environment, all geared towards the benefit and betterment of the lives we touch.

SEGi has also given out a significant amount of scholarships and bursaries, and was involved in the promotion of charity, sports and other nation building initiatives. Among the scholarship funds which SEGi initiated or participated in are SEGi High Achievers Scholarship, SEGi Sports Scholarship, Dana Pendidikan Karangkraf, 8TV Scholarship Fund, Star Education Fund and Skim Kurang Mampu. These funds have offered the top scorers and the needy a chance to pursue tertiary education.

SEGi also supports The Technical Resource and Internship Network (TRAIN) programme to provide vocational training skills to help the less academically inclined to secure jobs. TRAIN was established to provide opportunities to our youths to get an equally good start in the job market. Eligible trainees under the programme will enjoy scholarships, subsidised fees, as well as private and government loans.

The Group has always remained committed to its quest to be a responsible and caring corporate citizen.

Future Outlook

The prospect of the Group remains positive notwithstanding the economic uncertainty. We believe that education and training are for all levels of society and we remain committed to offer programmes relevant to the needs of the society. With this in mind coupled with good business strategies and proper management of risks, we see better growth in the business of the Group in the current financial year.

Acknowledgements

On behalf of the Board, I wish to convey our utmost appreciation to our valued shareholders, global partners, students, regulatory authorities, bankers and business associates for their continued support as we forge ahead to grow and achieve greater success.

A special thanks and gratitude also go to the management and staff who have played a pivotal role in delivering the results of the Group.

On behalf of the Board, I would also like to extend our gratitude to Dato’ Pahamin A. Rajab, Datin Fadzilah Bte Saad and Encik Abdullah Kamal Bin Shafi’i, who retired on 25 June 2008, for their invaluable contributions to the Group.

Last but not least, I would like to take this opportunity to thank my fellow Board members for their support and commitment. We look forward to fostering stronger links in years to come.

Tan Sri Dato’ Seri Megat Najmuddin
Bin Dato’ Seri Dr. Haji Megat Khas
Chairman
15 May 2009