Chairman’s Statement 2011

2011 Annual Report

Chairman’s Statement

It has been another momentous year for SEG International Bhd (“SEGi”) Group as we achieved a new record profit of RM43.24 million for the year ended 31 December 2010. This represents a 322% increase from our previous year’s profit of RM10.02 million. 2010 also marks the beginning of a new phase for the Group as SEGi is poised to reap the rewards from the seeds of success sown over the past few years.

On behalf of the Board of Directors, it is my pleasure to present the Annual Report and Audited Financial Statements of SEGi and the Group for the year ended 31 December 2010.

The recent Government Transformation Programme has highlighted the importance of education. Academic excellence among students is vital to produce a more competitive workforce in line with the country’s vision to achieve developed nation status by 2020. SEGi is committed to lay the groundwork for needed education reforms to be aligned with the vision of the Government to make Malaysia a centre of educational excellence.

Financial Performance

I am proud to report that SEGi continued with its consistent track record scaling to greater heights for the year under review. Our impressive turnover is a testament of the Groups strong brand positioning and the desirability of our programmes as well as the collaborative arrangements with overseas institutions that have been established over recent years. These strategic partnerships have proved fruitful as all parties possess individual strengths that complement each other.

The Group registered a 31% increase in revenue (2010: RM217.62 million/2009: RM166.37 million) and a 272% leap in profit before tax (2010: RM54.3 million/2009: RM14.6 million) as compared to the corresponding period in 2009.

The Group’s balance sheet continues to be healthy with shareholders’ funds of RM202.58 million (2009: RM169.15 million), cash and bank balances of RM78.83 million (2009: RM36.90) and a net cash position, indicating the Group’s capacity and financial strength to finance future growth.

The improvement in performance is generally due to the increase of student enrolments at the Group’s institutions, particularly for quality niche programmes.


On 13 January 2011, the Board approved and declared a special dividend of 14.0 sen per ordinary share of RM0.50 each in respect of the year ending 31 December 2011 (“Special Dividend”). The Special Dividend, less income tax, amounting to RM25,913,944.95, was paid on 18 February 2011.

The Board of Directors is now recommending a final single tier dividend of 7.0 sen per ordinary share of RM0.50 each for the year ended 31 December 2010 pursuant to Paragraph 12B of Schedule 6 of the Income Tax Act, 1967, subject to the shareholders’ approval at the forthcoming Annual General Meeting (2009: 3.5 sen per ordinary share of RM1.00 each less income tax at 25%).

Apart from that, I would also like to take this opportunity to announce that we, SEGi, promise to reward our valued shareholders and potential investors with consistent returns effective 2011. On 24 March 2011, the Company committed to distribute a minimum of 50% of the Group profit after taxation to its shareholders, with effect from the financial year ending 31 December 2011. Your Board believes that the dividend payout of a minimum of 50% of its profit after taxation is within the Group’s financial capability considering its future earnings growth.

Operational Review

Mindful of the importance of quality education for children in their early developing years, the Malaysian Ministry of Education has identified early childhood and childcare education (ECCE) as one of the strategic focuses under the Education National Key Result Areas (NKRA).

I am pleased to announce that SEGi was appointed by the Government as the Champion for Entry Point Project (EPP) 2 to lead the development of integrated ECCE. With the appointment, SEGi will lead the initiative in training and developing high quality early childhood and childcare practitioners. SEGi will also coordinate the establishment of teacher training centres that provide pre-service and in-service ECCE courses recognised by the Malaysian Qualifications Agency.

A consortium of private ECCE education and training providers led by SEGi is being established to fulfil the Government’s target.

The Groups quest for excellence never ceases. SEGi continues to pursue success at the highest level by focusing its attention towards educating future generations. The Group is undertaking several initiatives to stimulate growth as well as strengthen its leadership position in a still intensely competitive marketplace.

The Group continues to develop new programmes which are tailored to meet industry and market needs, ensuring they are widely recognised and produce graduates that are highly sought after by national and multinational companies.

The Group has come up with a solid long term strategy to expand its repertoire of programmes and market range. In 2010, the Group launched new degree programmes in environmental technology, information technology, construction management and civil engineering. The Group also obtained approvals from relevant authorities for its biomedical sciences and healthcare including Bachelor of Medicine, Bachelor of Surgery (M.B.,B.S.), Bachelor of Optometry (Hons), Bachelor of Pharmacy and also Master in Environmental Technology and Management.

SEGi also continues building strong global connections with the reputable foreign institutions as well as corporate links with many large companies to ensure the programmes offered are recognised internationally.

Corporate Developments

During the year under review, SEGi implemented a share split involving the subdivision of every one (1) existing ordinary share of RM1.00 each into two (2) ordinary share of RM0.50 each (“the Share Split”) and bonus issue of 2:5 (“the Bonus Issue”). The resulting price adjustment from the Share Split allowed a wider spread of investors to participate in SEGi’s growth while the Bonus Issue was a reward for the shareholders’ continuous support through the years.

SEGi also completed a renounceable rights issue of five (5)-year 2010/2015 warrants (“Warrants”) at an issue price of RM0.05 cash per Warrant (“the Rights Issue”). The Rights Issue provided the shareholders of SEGi with the opportunity to further increase their equity participation in the Company at a pre-determined price over the tenure of the Warrants.

In January 2011, the Group entered into an agreement with a property management company, Oakfine Development Sdn Bhd, for the expansion of SEGi’s capacity in Ipoh, Perak Darul Ridzuan. The facility is expected to be up and running in two (2) years.

In February 2011, the Company proposed a private placement of up to 10% of the issued and paid up share capital of SEGi (“the Proposed Private Placement”). I am pleased to report that the Proposed Private Placement was approved by Bursa Malaysia Securities Berhad on 8 March 2011. The Proposed Private Placement will serve to increase the market capitalisation of SEGi and to further strengthen the consolidated balance sheet position of SEGi.

Corporate Responsibility

The Group has always remained committed to its quest of being a responsible and caring citizen. Whilst we pursue our business commitments, we acknowledge our responsibility to our stakeholders and the greater communities in which we conduct our business, and we endeavour to create a positive impact in all our operations and initiatives. We seek every opportunity to play a pivotal role for the betterment of the society at large via our efforts in extending our hands and heart to numerous charitable causes.

The Group believes that the provision of training and education is crucial in nurturing future leaders and instilling them with strong moral and ethical values. We strongly believe this opportunity should be extended equally to students of all backgrounds and that it will help to lay the foundations for the long journey towards our ultimate objective of becoming a fully developed country by the year 2020. Sponsorships for potential students have been arranged to widen the talent pool for the Group as well as the nation.

The Group also remains committed to ensuring the occupational safety and health of all employees at their workplace through increased awareness, accountability and continual training geared towards the conduct of all activities in an environmentally responsible, safe and healthy manner. 2011 will also see the implementation of a new policy, the Whistleblower Policy, intended to encourage our stakeholders to report suspected or actual occurrences of illegal, unethical or inappropriate events, behaviors or practices without retribution.

The Group will continue to emphasise on environmental awareness and community spirit and seeks to conduct its business ethically and responsibly.

Future Outlook

SEGi’s foundation is rooted in our core values of integrity, synergy, care and innovation. The results are clearly reflected when the Group recorded marked improvement in student numbers and profitability in 2010. This trend is expected to continue in 2011 and beyond as the Group has put in place a firm foundation and strategy for sustainable growth.

New quality niche academic programmes will be introduced continually by the Group backed by a strong management and academic team. It is a goal that the team of able and dedicated management and staff remain committed to in unity, purpose and aim. Together, SEGi will build on past successes, brave the future and scale to greater heights.


On behalf of the Board, I would like to take this opportunity to convey my thanks and appreciation to the management and staff of the Group for their commitment and dedication in delivering the results of the Group. I also wish to acknowledge our valued shareholders, global partners, students, regulatory authorities, bankers and business associates for their unwavering support and confidence in the Group. It is with your gracious support that we are able to continue reaching even greater heights.

I would like to extend our gratitude to Mr Simon Hue Fook Chuan who retired on 28 June 2010 for his contributions to the Group. On behalf of the Board of Directors, I would also like to warmly welcome Datuk Chee Hong Leong who joined our Board on 21 February 2011. I would like to take this opportunity to convey my sincere thanks and appreciation to my fellow board members for their stewardship and contributions to the Group.

Tan Sri Dato’ Seri Megat Najmuddin Bin Dato’ Seri Dr. Haji Megat Khas
28 March 2011