• SEG International Bhd • 58

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• SEG International Bhd •

SEGi Education & Training Programmes

It is one of SEGi’s strategies to offer programmes to as many segments of the market as possible. Its programmes are uniquely designed to address the demand of the industry and nation for a workforce that is qualified and skilled.

The demand for academic qualifications and skills are expected to increase following the focus on human capital development as part of the second phase of Vision 2020 outlined in the Ninth Malaysia Plan.

The Group will continue to develop new programmes to meet the current and future demands of the industry. Efforts will also be undertaken to ensure SEGi’s range and quality of academic and training programmes are constantly upgraded and repackaged to remain competitive and to sustain its leadership stake in the private education sector.

Pre-University Upper Iowa University (UIU) in the United States to offer the 4+0 Pre-University programmes are designed to provide the right Bachelor of Science with a major in management. SEGi also offers foundation for academic and critical thinking skills. At SEGi, the Diploma in Business Administration programme leading to courses are complemented with a complete learning experience, degrees from top-notch universities in the UK, US and Australia. orienting students into a college environment and preparing them for graduate studies at university level in disciplines of business, Accountancy & Finance arts, engineering, IT, medical and health sciences. Students who Accountancy and Finance training provides substantial skills for complete their SEGi Foundation are able to gain entry into degrees organisational planning and growth. SEGi offers full pathways for from over fifty (50) universities worldwide. SEGi offers the Foundation its students to obtain an accounting degree with its 3+0 BA (Hons) in Commerce and Foundation in Science with majors in medicine, Accountancy & Finance twinning programme with University of dentistry, engineering and IT. Greenwich and University of Teesside, as well as the 4+0 BSc (Hons) with a major in Finance from Upper Iowa University. Graduates of Business & Management the SEGi Diploma in Accounting are also able to articulate their Innovative graduates with business knowledge and savvy skills qualification into accounting degrees from University of Southern accelerate organisational growth and competitiveness. SEGi offers Queensland in Australia, University of Abertay Dundee in the UK 3+0 business degrees with the University of Abertay Dundee (UAD) and University of Teesside, UK. SEGi also offers the diploma in and Sunderland University (UOS) in the UK as well as the University Accountancy and Foundation in Commerce programmes as well of Southern Queensland (USQ) in Australia. It also collaborates with as professional accountancy qualifications.

• SEG International Bhd • SEGi Education & Training Programmes

of Sheffield, with majors in mechanical engineering, electronic & electrical engineering and chemical engineering.

SEGi’s Diploma’s in chemical engineering, electrical & electronic engineering, mechanical engineering, mechatronic engineering, civil engineering and construction management provides studies with a pathway to complete the final part of their degrees with The University of Greenwich, The University of Sunderland, UK and The University of Sheffield, UK.

Marketing SEGi offers academic programmes in marketing, focused on consumer marketing, branding strategies, advertising, product development, international marketing and promotions. Marketing programmes offered include 3+0 bachelor degree programme from University of Abertay Dundee and the University of Southern Queensland and the 4+0 BSc (Hons) degree with a major in Marketing from Upper Iowa University, USA. Students also have the option to pursue a Diploma in Marketing, which offers a pathway to top-notch degrees worldwide. Information Technology & Computer Studies Technological development and its adoption by organisations is central for the transformation of management culture, lifestyle and the global economy. SEGi offers 3+0 BSc (Hons) twinning degree programmes with The University of Sunderland, UK and University of Greenwich, UK, majors include applied business computing with games development and computing with multimedia. SEGi also offers the 4+0 BSc (Hons) degree with a major in Management Information Systems from Upper Iowa University from the US.

SEGi’s Diploma in Computer Studies and Diploma in Information Technology provide studies with pathways to complete the final part of their degrees with the University of Greenwich and The University of Sunderland, UK. Engineering An impressive range of engineering disciplines such as mechanical Creative Arts & Design engineering, civil engineering, electronics & electrical engineering, SEGi College Faculty of Creative Arts & Design was set up to be automotive and chemical engineering are available at SEGi College. the premier centre for media, art and design education in Malaysia. Its engineering students have gone on to write many success stories. Students of the college are not only provided with a qualification The Faculty of Engineering & Technology is proud to count more than or skill in creative arts and design, but are prepared to brace the 200 students who obtained First Class Honours in engineering from challenges of the industry when they step into the working world. top-notch universities worldwide. The programmes are delivered Its art & design students frequently receive commendations and using applied methodologies and state-of-the-art engineering awards from the industry. facilities. SEGi offers the 3+0 BEng (Hons) from the University of Sunderland as well as the 1+2 BEng (Hons) from The University

• SEG International Bhd • SEGi Education & Training Programmes

SEGi offers diploma programs from a diverse range of disciplines such as creative multimedia, mass communication, advertising design, graphic design, interior design, industrial design, video & animation, photography, performing arts (theatre) and music. Upon completion of the diploma, students can articulate their qualification into degrees from University of Southern Queensland, Australia. SEGi also collaborates with Upper Iowa University from the US to offer the 4+0 BSc (Hons) degree programme with a major in Mass Communication.

Hospitality & Tourism Among SEGi’s latest programmes is the Diploma in Hotel & Tourism Management and the Diploma in Tourism Management. These programmes are designed to have strong industrial recognition and focus with constant feedback by leading players in the industry. The programme also allows for industry placements and apprenticeships in renowned hotels and service related industries in Malaysia and worldwide. SEGi also offers the 3+0 BSc (Hons) International Tourism and Hospitality Management from the University of Sunderland, UK. Early Childhood Education Early childhood education applies specialist knowledge in the Psychology teaching and nurturing of pre-school children. The Faculty SEGi collaborates with Upper Iowa University (UIU) in the United of Education & Social Science at SEGi College provides the States to offer the 4+0 Bachelor of Science with a major in Montessori-based early childhood diploma qualifications from psychology. This programme allows students to complete the full the Montessori Centre International, UK and the Diploma in Early degree programme in Malaysia, however, they also have the ability Childhood Education. The programmes enable articulation into the to transfer to the Fayette Campus. SEGi also offers the Diploma in Bachelor of Early Childhood degree from the University of Southern Psychology. Queensland, Australia. Nursing American Degree Programme There is a growing demand for health professionals in Malaysia The American Degree Programme (ADP) at SEGi College of and worldwide. And SEGi is poised to respond to such demands Graduate Studies offers students the opportunity to complete by providing a range of health science programmes including the their studies without having to transfer to the United States. The Diploma in Nursing. The Diploma in Nursing is designed to prepare programme is based on the same model followed by students in students to be qualified as a Registered Nurse and focuses both on universities all over the US. Upon completion of the 4+0 programme, students will graduate with a Bachelor of Science honours degree majoring in Communication, Financial Management, Management, Management Information Systems, Marketing or Psychology from Upper Iowa University, USA.

• SEG International Bhd • SEGi Education & Training Programmes

Law Legal and paralegal professionals can gain international qualification by pursuing the Diploma in Law and the Bachelor of Law offered externally by the University of London at the SEGi College based in Sarawak. There are plans to extend its suite of law programmes to SEGi’s flagship campus at Kota Damansara.

Financial Planning IFPA Resources is an approved education provider of Financial Planning Association of Malaysia (FPAM) and is a major player in offering the Certified Financial Planner (CFP) professional qualification. the ‘care’ aspects of nursing as well as the ‘science’ of healthcare. Postgraduate Studies SEGi College is one of the fastest growing nursing school in SEGi is a clear leader in the adult learners segment by offering flexible and part-time learning modes. Working adults and graduates Malaysia. have the choice of pursuing the popular Master of Business Administration (MBA) programme from The University of Southern Pharmacy Queensland, Australia or The University of Sunderland, UK. Pharmacy is the branch of medical science concerned with the sources, nature, properties, preparation and safe effective use of medicinal drugs. Pharmacists are key professionals in the health care system who formulate and dispense drugs and work closely with doctors and patients in providing advice on the management of a patient’s medication. The Master in Pharmacy (MPharm) (2+2) twinning programme available at SEGi College is a collaboration between the Faculty of Pharmacy & Health Sciences, SEGi College Malaysia and the Sunderland Pharmacy School, University of Sunderland, UK. SEGi also offers a Foundation in Science which is designed to equip students with the knowledge and skills required for admission into the MPharm programme.

Vocational & Training Courses SEGi’s vocational training programmes are suitable for students who are not academically inclined to obtain skill-based training. Its training centres provide vocational courses with Sijil Kemahiran Malaysia (SKM) qualification from Skills Development Department (JPK), in the disciplines of Automotive, Air-Conditional Repair & Maintenance, Computer Systems Technician, Information Systems Administrative Assistant, Multimedia Artist and Graphic Design. Its training centres also provide training under the Graduate Training Scheme to enable graduates to be skilled, hence enabling a better job match with the needs of industry. Dentistry SEGi College Faculty of Dental Auxillary is among the latest additions to the wide range of study areas available. SEGi offers the 2-year Dental Surgery Assistant certificate designed to provide students with hands-on training and experience at the SEGi Dental Centre.

• SEG International Bhd • Infrastructure & Facilities Upgrading

SEGi College Malaysia SEGi College Main Campus at Kota Damansara commenced operations in June 2007. The flagship campus is not only an iconic building with great architectural features but it also provides an excellent study environment, where students can work whenever and wherever they choose. The campus is fitted with full-fledged facilities, including on campus residence halls, sports & recreational complex and state-of-the-art laboratories and learning facilities.

Simulation Wards and Skills Laboratories, used for teaching and development within the Nursing programmes, are fully-equipped with modern and sophisticated aids to provide students with hands on experience in a realistic environment, giving them the ability to practise and develop their skills before advancing onto their industry placement. The purpose built Pharmacy Laboratories are fully fitted with the latest equipment providing students with a hands-on learning experience.

The Sports & Recreational Complex, which was launched by YB SEGi College Malaysia also boasts a Mechanical Engineering Dato’ Sri Azalina Othman Said, Minister of Youth & Sports of Malaysia, Laboratory, Chemical Engineering Laboratory, Thermodynamics & showcases facilities such as a multi-purpose hall, gymnasium, Heat Transfer Laboratory and Electronic & Electrical Engineering swimming pool, squash, badminton and basketball courts. Laboratories. These laboratories and well-equipped with the latest sophisticated facilities and provide students with knowledge and understanding into engineering principals.

Computer Laboratories with high speed Internet access and the latest software are available to students, and students with notebook computers can also take advantage of the wireless environment on the campuses.

• SEG International Bhd • Infrastructure & Facilities Upgrading

SEGi College Subang Jaya SEGi College Subang Jaya began development into both Nursing A well-stocked library containing large selections of the latest books, and Hotel & Tourism courses in 2007. This new course development journals and online materials as recommended by professional saw the college upgrade and acquire facilities to provide the bodies and is available to students. best resources to future students. Simulation Wards and Skills Laboratories, used for teaching and development within the Nursing programmes, were fully-equipped with modern and sophisticated aids to provide students with hands-on experience in a realistic environment, giving them the ability to practice and develop their skills before advancing onto their industry placement.

The Hotel &Tourism Diploma programme is a very hands-on course which includes a lot of practical training. SEGi College Subang Jaya has developed a mock kitchen and bar area to help students learn all aspects of kitchen and beverage service, as well as a mock hotel room fully-fitted with bedroom and bathroom facilities.

SEGi College Subang Jaya continuously upgrades facilities and resources available to students to ensure they receive the best in education and training.

• SEG International Bhd • Infrastructure & Facilities Upgrading

SEGi College Kuala Lumpur SEGi College Kuala Lumpur continues to enjoy the success and growth of their new and existing programmes. Due to this sustained growth, SEGi College Kuala Lumpur completed renovations to improve the facilities and overall appearance of the existing buildings as well as creating new classrooms and a library within the recently acquired Asia Life building. SEGi College Penang SEGi College Penang moved to a new campus in Green Hall in SEGi College Kuala Lumpur also begun offering Nursing February 2007 to provide better education and facilities to its programmes in 2007 and has thus developed facilities to students. Equipped with advanced facilities and a more beneficial provide students with the best in training and education. learning environment, the campus in Green Hall provides a more Simulation Wards and Skills Laboratories, used for teaching and complete educational experience to its students. The facilities development within the Nursing programmes, are fully-equipped at the new Green Hall campus includes more than 15 purposed with modern and sophisticated aids to provide students with built classrooms, well designed lobby and lounge area, new hands-on experience in a realistic environment, giving them the resource centre, cafeteria, one floor of dedicated IT labs, 2 floors ability to practise and develop their skills before advancing onto of car park bays, large auditorium with sea view, games and their industry placement. recreational area. Students can enjoy the convenience of the location and ease of access to eateries, banks, shopping malls, public amenities and public transport. The island life is also an ideal student lifestyle with an easygoing space, fresh air and affordable standard of living.

• SEG International Bhd • Infrastructure & Facilities Upgrading

SEGi College Sarawak SEGi Training Centre Pulau Indah SEGi College Sarawak continued to upgrade and improve existing SEGi opened it’s second training centre, based in Pulau Indah, in facilities and infrastructure, resulting in an enjoyable and beneficial 2007. This training centre is approved by the Skills Development campus environment. Facilities available to students include: Department (JPK) to conduct vocational training courses in - Well-equipped Computer Laboratories with modern PC’s that the fields of automotive, information technology & multimedia, have a high bandwidth internet connection, the latest software draughtsmanship and others. SEGi Training Centres are fast gaining and multimedia facilities. a reputation as one of the leading providers of quality corporate - A fully-equipped library that provides a conducive environment and vocational training, to help Malaysian’s meet the nations need to read, study or conduct research by using the reference for qualified skilled, semi-professionals towards its goal to achieve available. development status by the year 2020. - The Reading Room provides an excellent venue to study, read or just to relax in one’s mind after a hard day’s work. The centre is committed to the pursuit of excellence in teaching and - A Student Lounge for students to relax and socialise. to the interaction with technological professionals. - The Cafeteria has a wonderful array of culinary delights capable of tempting even the most fastidious customer. - Student can make use of the gym, swimming pool and sauna free of charge. - Wireless hotspots are also available for students with notebook computers.

• SEG International Bhd • Looking Beyond Our Shores

SEGi is an international institution of higher learning with a large Our Agents and growing foreign student population from over 46 countries such as China, Indonesia, Denmark, Maldives, Korea, Iran, India China and Ghana. Segi China Representative Office Study Access Network Beijing MaZhongSin Education & Culture Centre Aside from offering globally recognised qualifications, the location Beijing City College, Educational Training Centre of SEGi campuses within the city limits of Kuala Lumpur, Penang Studying Abroad Service Centre Under International Exchange and Kuching makes them very attractive choice of higher education Association For Xinjiang Education institutions among international students. Mongolia The presence of international students, not only reflect the prestige MPEC Company and recognition that SEGi has gained globally but also creates a cosmopolitan campus environment. These will help foster and open Uzbekistan Abda Solution and global perspective among Malaysian students.

Khazakstan It is also the Group’s mission to inject an international outlook Abda Solution among its faculty staff. In addition to local faculty members, SEGi retains a large number of international scholars and academics in Korea its community, which are drawn from some of the best universities Uhak-Hub around the world, to serve as advisors, examiners, lecturers or moderators. Cambodia LKN Cambodia Study Abroad SEGi has established International Representative Offices in China, India and Iran. The Group will continue to seek out ventures overseas Vietnam Global Education Solutions Company (GES) through partnership with reputable international partners who are able to support and understand the market of its source country. Maldives Glonet Network

Indonesia NIS Indonesia Medan Muzik First Class

• SEG International Bhd • Looking Beyond Our Shores

India SEGi India Representative Office Fun Holidays Instant Reservation Pvt. Limited

Pakistan North Pole International Qurtuba Study Guidance iran SEGi Iran Representative Office Chavoushi Sdn. Bhd. Avid Future Plan Sdn. Bhd.

Africa Senegal Orbit Consulting Global Intellect S.A 1AllStaz Universal Ltd XCEL Education Consultants Zimbabwe Saddein Education Consultancy Nigeria IAIIStaz Universal Ltd Botswana XCEL Education Consultants Basebi Inverstment Pty Ltd Orbit Consulting Yemen Ghana Abdullah Mohammed Alhajj Alsalehi DeJuz Consulting Jordan Burkina Faso Overseas Student Consultant Global Intellect S.A DeJuz Consulting Syria Overseas Student Consultant Mali Palestine Global Intellect S.A Overseas Student Consultant

Guinea Global Intellect S.A

• SEG International Bhd • special projects

It is SEGi’s strategy to diversify its operations The project – Program Belia CGT – was conceived as part of the 9th and to establish itself in various niche Malaysia Plan to hasten the training of youths in the country. The Group will provide value-added features to the Program by putting segments. The meaning of education goes in additional curriculum on character building and entrepreneurship beyond merely providing tertiary education as well as job placement services for the trained youths. to school leavers. By moving into other segments, the Group will be less affected by the intense competition for students currently occurring in the industry.

We will continue to seek out blue oceans by establishing linkages with the government and with the industry, to open up other opportunities for the Group.

Career Exploratory Programme (CEP) A formal collaboration between SEGi and hundreds of its valued corporate partners was established to offer thousands of practical training opportunities and internships for its graduates or students who are about to graduate. The scheme, known as the Career Exploratory Programme (CEP), was officially launched by YB Datuk Ong Tee Keat, Deputy Minister of Higher Education.

The objective of the programme is to provide an added advantage Program Belia CGT for SEGi graduates to stand out in the competitive job market, and SEGi has secured a public-private partnership with the Government be recognised by potential future employers. of Malaysia under the Ministry of Youth & Sports to provide skills- based training for up to 10,000 youths per year. The current The CEP programme will give SEGi students the chance to roll up training centres owned and managed by the Ministry are insufficient their sleeves and have hands-on experience in the real working to provide places for the 30,000 odd applicants for skills-based environment. The students are able to feel what it is like to work courses each year. As an attempt to achieve its training capacity, with some of the best companies in the country and around the the Ministry has an outsourcing scheme through the buying of world. The experience is expected to give SEGi graduates an edge places available in private entities with the requisite facilities and over other graduates in getting employment in a competitive job qualified human resources. market. What’s more, they stand to earn while they learn.

SEGi has also collaborated with Jobstreet.com, a leading recruitment portal, to power the CEP website by matching its students with the right internship jobs in suitable companies.

• SEG International Bhd • special projects

SEGi Leadership Centre SEGi College has taken a bold step by introducing a new innovative scheme – to send its student to its very own leadership development camp, the ‘SEGi Leadership Centre’.

SPECIAL PROJECTS Lifelong Learning Centre SEGi operates the first Lifelong Learning Centre (LLC) situated at South City Plaza in support of MCA’s Lifelong Learning programme. By establishing the centre at a shopping mall, it helps facilitate The aim of the SEGi Leadership Centre (SLC) is to help students learning opportunities, where community will get themselves a step identify their true potential and to build confidence, which is closer to lifelong learning. fundamental to their future success and development.

SLC is a purpose designed facility that provides experiental The centre which exemplifies an integrated network, quality and education programmes for its students and corporate clients. affordability of lifelong learning in the country was launched by YB The outbound centre is located at Nusa Dusan Orchard Resort at Dato’ Seri Ong Ka Ting, President of MCA on 1st of September Linggi, Malacca. 2007.

The Centre boasts facilities such as a 4-storey high rock climbing tower, twelve (12) element high obstacle course, abseiling tower, flying fox, outdoor-designed accommodation, camping ground, seminar amenities, and paintball battlefield as well as rafting and canoeing facilities.

SEGi REVIEW The SEGi Review is a publication developed by the Group which allows academic staff to submit research papers in their chosen fields. The Management and staff of SEGi College have developed this publication as a means of encouraging academic staff members to write and submit papers about their research.

The objective of the SEGi Review is to promote a research culture through the interchange of knowledge and ideas in the hope that future research will lead to the findings and/or inventions being patented and commercialised. 79

• SEG International Bhd • research & development

SEGi’s effort at research and development is done with the purpose of bridging our products with market and industry needs. Research and development is at the heart of the Group’s medium and long-term growth strategies.

These innovative and industry driven courses are also continuously revised and upgraded to meet dynamic industry standards. The Group also continuously repackages its existing suite of products so that they cater to new segments of the market and to stay ahead of competition in aims to be a leader in the higher education market.

Education Management System (EMS) EMS is an Oracle-based software platform customised to manage Product Development personal data and perform the tasks of registering, maintaining The Group seeks to develop cutting edge, quality programmes and reporting on student records. The system also provides aging that are industry driven. Continuous research into market, student and industry needs helps SEGi design unique course features and reports for collection tracking. EMS was developed to allow fuss- identify market breakthroughs. free scheduling of classes, attendance tracking and classroom allocation. EMS is integrated with the Centralised Examinations The design of courses is done with the aim that students are Department for the processing of exam registration and results career-ready the moment they graduate. The courses that are transcripts. An alumni database stores records of students’ developed and launched not only comply with standards set by regulatory bodies, but have received recognition from industry and achievements, and provides SEGi access to the graduates for its professional bodies worldwide. future marketing efforts.

SEGi2U E-Learning Portal An innovative web portal was developed and installed to enhance learning of accounting, business, marketing and computing at SEGi College. It is a seamless manager of students’ personal data, and value-adds students’ learning experience by complementing traditional classroom teaching. Interactive delivery also facilitates independent study through online materials, self-test exercises, discussion boards and chatroom. The system allows students access to real-time campus updates, and plays a key role in developing e-learning capabilities.

• SEG International Bhd • research & development

Recently, SEGi College Malaysia and The College of Architecture of the University of The Phillippines with the technical support from TAO-Philipinas Incs., the Technical Assistance Office of the Phillippines, signed a Memorandum of Practices on Capabilities- Building of Communities. The ceremony, held in Taipei, marked the finale of the International Training Workshop on Typhoon and Flood Disaster Reduction 2008 attended by representatives from nine countries, including Mexico, the United States, Guatemala, El Salvador and Vietnam.

Joint R&D with University Partners Strategic identification of future education trends has underscored SEGi’s growth as an education provider. Joint research with our consortium of global universities has enhanced the interchange of knowledge and ideas. The Group also integrates research findings and market needs into its academic approaches.

SEGi also works with its consortium of global partners in quality assurance, particularly in areas of syllabi development and teaching methods. Staff and student exchange programmes are frequently Centralised Examinations Department organised. The Group conducts specialised R&D in engineering, The Centralised Examinations Department received the ISO early childhood education, hospitality & tourism and nursing. SEGi 9001:2000 Quality Management System from the independent also collaborates with its partner universities in providing recruitment ABS Quality Evaluations Inc (US) certification board. The award and support services. was given in recognition of integrity of its examination management and support services. Proper check and balance of internal college Collaboration with Industry Partners exams are ensured. Continuous research on best practices at SEGi has embarked in ‘Valued Corporate Partnerships’ (VCP) with UK universities and professional institutions, as well as rigorous more than 250 large, medium and small organisations to upgrade resource management are factors in maintaining stringent quality the skills and qualification of their staff and their family members. assurance. The Group also works closely with selected VCP partners in areas of setting up education funds, curriculum development and job placements.

The Career Exploratory Programme (CEP) internship and graduate attachment programme is testament to the immense opportunities and value that VCP’s bring.

• SEG International Bhd • Corporate Social Responsibility

“Our philosophy for being a good corporate citizen is that we should not look at what we can gain when giving which will destroy the very spirit of ‘giving” – Dato’ (Dr.) Patrick Teoh

Being a good corporate citizen is more often than not, easier said refer to our mission, vision and values in our conduct in all aspects than done. At SEGi, it is not about paying lip service to corporate of our business relationship, including areas such as academic social responsibility. It’s a full-time and ongoing mission. The and intellectual integrity. There is zero tolerance to plagiarism and Board, management, staff and students are united with the same corruption in the organization. The company personified is likewise, commitment, goals and strategies to contribute positively to society unwavering in its compliance with applicable legal and statutory and add social value. requirements.

The feature article by Malaysian Business (16th September 2005) ranked SEGi 4th among 65 public listed companies that were surveyed in terms of their Corporate Social Responsibilities. SEGi was also given mention in ACCA Malaysia Environmental and Social Reporting Awards (MESRA) 2006 in recognition of its completeness, credibility and communication in disclosure of its social information, update of social reporting and awareness of corporate transparency issues.

Being the leading player in the industry, we are able to influence to a large extent, the lives of thousands of people. We take our responsibilities towards our students, parents, staff, suppliers, environment and the communities where we operate and live. In maintaining good governance, SEGi places great importance on accountability and transparency in the disclosure of information to Here are some of our CSR policies & initiatives: our stakeholders. The Group has an established Investor Relations (IR) programme through its IR channel - http://ir.wallstraits.net/segi/ CORPORATE SOCIAL CONDUCT - that provides stakeholders with valuable insights into our Groups We believe that education is about the business of transforming business operations and performance. lives and making our students – the future generation – into better persons, and less about mere providing paper qualification and Visitors to www.segi.edu.my are also encouraged to submit their skills. Leadership is set by example and therefore, there is an feedback directly to the CEO under “Connect to CEO” to enable the expectation among the people of SEGi to maintain the highest Group to further enhance its services. Details of Group’s Investor standards of integrity and professionalism in our daily conduct. We Relations can be found in Statement of Corporate Governance. 82

• SEG International Bhd • Corporate Social Responsibility

Investment in Staff Development & Training Long-term investments in staff such as qualifications upgrade and skills training give our people better job opportunities and increased income, aside from providing SEGi with a skilled workforce and faculty. As a learning-based organization, we firmly believe in continuous training and development as a strategy to attract and retain the best talents in the industry.

Development of Academia, which encourages a “culture of excellence, uplift the profession through professional development and training, career progression, awards and recognition” is encapsulated as one of the Institutional Pillar Initiatives for SEGi’s upgrade to University College status, consistent with the strategic thrusts found in National Higher Education Strategic Plan (2007 OUR PEOPLE & THE WORKPLACE and beyond 2020). We are keenly aware that in the education service industry, our people are key to differentiate us as a great company and institution Opportunities are given for staff to upgrade their qualifications and from a mere good one. The combined talents of our 1000 strong skills. Education assistance schemes are offered to academic and staff – their knowledge, experience and passion ultimately define non-academic staff to encourage personal growth. SEGi provides who SEGi really is. scholarships, study loans and rebates for its people and their family members. Integrity is personified in our value that each staff member should be given equal concern and respect regardless of rank and position. The unwavering adoption of this principle provides the opportunity for our staff to develop his or her potential in a safe and fair workplace where their views and choices are respected and valued. Our goal is to inspire and motivate our people to continue to achieve extraordinary things so that they can take pride in their work and their company.

In 2007, SEGi recognised its staff who has served with the Company since its inception at its 30 Years Anniversary bash.

Our commitment to our people, found in our core values, strategic game plan for sustainable business growth, including University College upgrade plans, reflect our fundamental respect for our people and our commitment to providing a rights-based working environment. SEGi also strives to be a learning organization, and its efforts were recognised it received the Malaysia Emerging Knowledge Organisation (MEKO) Award in 2006.

• SEG International Bhd • Corporate Social Responsibility

Training needs analysis are frequently conducted, based on the following criteria and prioritization processes:

Prioritisation of identified training needs

Sufficiently Influence on Number of staff Important area curriculum affected

Quality Audit Mission Terms of Prioritisation of and Institutional reference Statement Training Needs Assessment Goals of the unit Power of staff to influence others Impact

Ability of staff to change Training Discussions Leads to Staff curriculum Appraisal Needs with Heads of Department changes Analysis Resources Maintenance Age profile Long Term of staff

Motivation Student Self/peer Consultancy Support feedback observation with Deans Meets long- term goals

Staff recognise Gains and Training need to change benefits

Source : SEGi University College Strategic Plan 2008

We have been invited to be upgraded to University College status, and are setting our sights to becoming a full-fledged University with emphasis on niche programmes that are professionally recognised. This grand ambition necessitates having 30% of our academic staff qualified with doctorates or equivalent and 50% with masters degree or equivalent. SEGi’s flagship campus currently has 18% of its academic staff with doctorates and 42% with master’s qualification. A strategic plan has been put in place to upgrade its staff to meet such standards.

YEAR 2007 2008 2009 2010 2011 2012

ACADEMIC STAFF 105 110 150 180 212 224 PhD 6 9 21 33 45 69 RECRUITMENT OF PhD 6 8 12 12 12 16 STAFF DEVELOPMENT 4 12 6 10 15 20 TOTAL PhD 6 21 33 45 57 67 % PhD 6% 18% 22% 25% 32% 38%

Source : SEGi University College Strategic Plan 2008

Among the strategies are to develop in-house programmes through overseas and local university partnerships for staff to upgrade their qualifications to PhDs or Masters level. There are also plans to recruit local and foreign qualified lecturers, appointment of adjunct professors, associates and lecturers from among local and international universities and research institutes.

• SEG International Bhd • Corporate Social Responsibility

Through our focus on employee development and welfare, SEGi’s strategy is to produce a culture of excellence and satisfaction amongst our people, so as to produce a favourable work environment for all and exceed the expectations of our customers, shareholders, associates and partners.

To further enhance good governance practices, SEGi has established a policy that encourages staff to report cases of fraud or irregularities within the Group to the Internal Audit Department. Employee feedback is also encouraged through www.segi2u.edu.my shared resource portal.

Listening to Our People Succession planning is also crucial with SEGi which is experiencing For the people at SEGi, work is more than a place to go every day. rapid growth with establishment of new campuses and upgrade to Instead, it should be a place of discovery, creation and inspiration. University College status. New leaders are developed and nurtured This is drawn from the same philosophy we put in place for our in-house with clear Key Result Areas (KRA) that are constantly students – the institution is not just a place of study and learning, reviewed by the management. but one that seeds creativity and critical thinking.

Health & Safety The past 30 years have seen a dramatic change in employees SEGi is certified under Occupational Health & Safety (OSHA) and their relationships with employers, where career changes are regulations. Safety is paramount for all staff and students. Adoption becoming more frequent. SEGi has employed both technological of OSHA will provide a common language around our health and hardware and heart-ware to enable a new and more dynamic safety management systems, and make it easier to demonstrate way of working, which is more mobile, faster and technologically implementation of these standards to our stakeholders. dependent. Our people are given notebook computers, mobile phones with 3G technology to enable communication to take place The Group also provides employee welfare through health insurance, anytime and anywhere. Cross-campus meetings can take place medical coverage, hospitalisation and retirement benefits for our using tele-conference and video-conference facilities available at network of more than 1000 people in the organisation. all centres.

BUILDING A NEW GENERATION OF LEADERS The top management has also initiated a series of monthly Breakfast Scholarships & Bursaries Talks and staff lunch gatherings to encourage open dialogue with its Scholarships, bursaries and contributions towards education funds people, as well as to keep the people of SEGi clued in on company are given out to deserving students who are academically inclined, directions and strategies. needy or active in co-curricular activities. These are given mainly as ‘fee waivers’, when the Group repurposes its excess capacities Fair Policy & Regulations at its colleges for good use. The scholarships and bursaries were SEGi aims to instill a high level of work ethics and values in its given out, in many instances, with marginal cost to the company people for their contribution, competency, accountability, integrity as the recipients are joining scheduled programmes where a large and responsibility. SEGi constantly updates its employment policy proportion of the costs had already been sunk. so as to make it current and to ensure a holistic direction for staff sourcing, recruitment, remuneration, the creation of a conducive work environment, people relations, increment, incentives, promotion, conflict resolution and training.

• SEG International Bhd • Corporate Social Responsibility

Rules and regulations of the scholarship can be viewed at this URL: confident candidates that fit 8TV’s criteria of having the “X- http://www.segi.edu.my/scholarships/ Factor”. The amount pledged this time topped RM1,000,000 with 39 candidates being eligible for the fund from a pool of - SEGi High Achievers Scholarship (HAS): Full and partial more than 700 applications. This marks an an increase from scholarships with a total value of RM3481,175 were given out RM800,000 pledged the previous year that saw 25 candidates to top scorers in the 2007 SPM and STPM examinations to receiving the scholarship, and RM300,000 with 8 candidates pursue tertiary education at SEGi Colleges nationwide. obtaining the scholarship when the scholarship fund first started in 2006. Details of the scholarship can be viewed at - SEGi Sports Scholarship: Sponsorship of national and state www.8tv.com.my/scholarshipfund level athletes for their studies at diploma and degree levels. Six (6) eligible student athletes who got scholarship worth RM120,590 represented SEGi Colleges in various sports meet such as the MAPCU games, University College Basketball League (UCBL) and the Futsal Face-Off 2006.

- Star Education Fund: The Group remains one of the largest contributors to the fund with contribution of RM641,520 benefiting twenty three (23) students to pursue diploma and degree programmes with SEGi College. - Dana Pendidikan Karangkraf: A memorandum of agreement was signed with one of Malaysia’s largest print media owner, - Sin Chew Scholarship Fund: SEGi College was ranked among Kumpulan Karangkraf to set-up a RM5 million fund for the the most popular and successful higher educational institution readers of its publications. This is an expansion from the initial among applicants for this fund. RM952,615 worth of full and RM5 million fund signed 3 years ago for the benefit of staff and partial scholarships were given out to benefit thirty three (33) family members of Karangkraf. students jointly selected by SEGi and Sin Chew Daily, a leading Chinese medium newspaper.

- Skim Bantuan Pelajar Kurang Mampu: A special scheme which offers bursaries and financial aid to needy but academically qualified Malaysian students from rural areas to pursue higher education or training at SEGi Colleges. Among the criteria for eligibility is a combined household income of less than RM2,500 and having at least 5 credits at SPM level.

- 8TV Scholarship Fund: SEGi was again the official partner for the 8TV Scholarship Fund for the third year running. The scholarship fund was established to seek out and reward smart, 86

• SEG International Bhd • Corporate Social Responsibility

- Pledged RM 2 million worth of scholarship to Youtheme Online. Education Outreach Programme The event was officiated by YB Dato’ Seri Ong Ka Ting. - SEGi organised the successful National Secondary School Quiz with Nanyang Siang Pau for the 3rd consecutive year. The - Higher Opportunities for Private Education (HOPE): SEGi is event this year saw the number of contestants jump to more one of the inaugural group of ten (10) private universities and than four thousand students from four hundred ninety two colleges which have contributed to the HOPE, a programme (492) secondary schools which competed at ten (10) locations established to assist students who are unable to secure a place nationwide. SEGi has also invited The University of Sheffield as in local public institutions of higher learning into programmes a partner for this programme. Winners of the competition stand offered by participating local private universities and colleges. an opportunity to pursue their degree studies in engineering at Eligible students are able to pursue tertiary education at one of UK’s most prestigious universities. private higher educations of higher learning at subsidised rates comparable to fees charged by public universities. - SEGi sponsored and organised the “Star SPM” workshop, which featured renowned mathematics and science tutor, Sunny Yee. The event attracted more than 1000 students at Forms 4 and 5 levels to its campuses at Kota Damansara, Subang Jaya and Penang. Students were treated to guides and tips in excelling in SPM science and mathematics.

The sponsorship encouraged SEGi to go further by organising and sponsoring a series of workshops with Star’s NIE paper - F4F5 – to prepare students for SPM examinations throughout 2008.

- SEGi has also established and contributed RM5,000,000 worth of schoolships to Yayasan Pendidikan Bistari, a foundation set up to open education and training opportunities to young Malaysians. The initial contribution of RM1,000,000 worth of scholarships was given to the people of Kota Damansara as part of SEGi’s contribution to the community, where its flagship campus operates. The pledge was received by the Minister of Education, YB Dato’ Seri Hishamuddin Tun Hussein on 20 August 2007.

• SEG International Bhd • Corporate Social Responsibility

- Sponsored the “SPM Survival Kit” benefiting forty (40) selected schools nationwide organised by Times Guides. The kit, which features writings, tips and guides by prominent writers such as education editor, En. Ibrahim Saad of NST and Mark Disney of Education Quarterly, is designed to benefit secondary school students preparing for the major government examination.

- Hosted and co-organised the Junior Journalist Programme (JJP) with The Sun and Nanyang Siang Pau on 7th July 2007 at its flagship campus at Kota Damansara. The event saw participation by 250 budding journalists from the editorial board from secondary schools. It featured prominent speakers such as editors from The Sun, Nanyang Siang Pau and Doctorjob Courses Now publication. There was also a session on journalism using blogs, featuring Malaysia’s number 1 social blogger, Mr. Kenny Sia. CHARITY & NATION BUILDING - Sponsored popular reality television programme Please Give Me - Sponsored “Karnival Aktiviti Pendidikan dan Kerjaya Sekolah- A Job (PGMAJ) aired over 8TV in May 2007. The programme sekolah 2007” organised by Pejabat Pendidikan Daerah pits ten (10) fresh graduates through various challenges Petaling. The event saw participation by students and teachers over nine (9) episodes with the ultimate aim of landing them from close to seventy (70) schools in the Petaling district. This employment with eight (8) top-notch companies. Aside from marks the third (3rd) consecutive year of SEGi’s support of this providing entertainment, the programme is aimed at educating event. and guiding fresh graduates on employable qualities that top notch companies look for in the hiring process, from grooming to communication, teamwork to leadership, and academic qualities to skills competence. The show received good ratings and plans are underway for PGMAJ 2.

- SEGi campuses nationwide organised and participated in 124 school outreach programmes that are aimed to provide career and educational workshops, seminars and talks to secondary school tudents and teachers. The events touched on disciplines such as computing, culinary arts, engineering, - Hosted and organised the SEGi Community Day 2007 at Kota creative arts & design (“MAD Workshops”), business and Damansara on 7th July 2007. RM26,400 was raised during accountancy, among others. Students were also bussed into the event for the benefit of various named charities. Among the SEGi campuses to attend talks by prominent guests from The highlights of the event were a charity concert featuring One In A University of Sheffield, Upper Iowa University and the University Million finalist Farah, Dragon Red, One Buck Short and dancers of Sunderland. from So You Think You Can Dance programme. More than one 88

• SEG International Bhd • Corporate Social Responsibility

thousand (1,000) visitors were feted to a full day and night of The event received positive response and positioned SEGi as an paint ball, amazing campus challenge, children inflatables and active promoter of sports in the country. SEGi intends to expand other interesting games. this initiative by organizing the “SEGi 5ive”, which is hoped to double the teams in 2008. For this, SEGi has also invited Upper - Hosted & sponsored reality television show, Radhi Study Iowa University from the US to fly down their team to provide Go!, (RSG!) also with 8TV. This gives SEGi and its people workshops and seminars to basketball enthusiasts, and an the opportunity to guide and groom well known rock star, perform an exhibition match with the HSBL all-star team. Radhi OAG, into somebody who is qualified, useful and able to contribute to the community. There is an underlying social - Co-sponsored Cheer 2008, an event organised by Star message that the programme intends to get across, aside newspaper. The event will see top secondary cheerleading from its entertainment value – there is no barrier to education teams from 3 regions to come together at the finals at Stadium regardless of one’s calling or stature in life. RSG! also gives the Putra on 13th July 2008. The sponsorship is consistent public the rare opportunity to find out more about campus life with SEGi’s support for sports and its values, particularly, at SEGi Colleges. persistence, hardwork, innovation and teamwork, aside from providing entertainment value for spectators.

- Participated and sponsored the National Youth Day (Hari Belia) celebrations at Stadium Putra Bukit Jalil for second consecutive year. SEGi was recipient of Anugerah Khas (Special Award) from the Government of Malaysia in conjunction with the celebrations.

- Sponsored the “2007 Sunshine Youth Carnival” held on 3rd and 4th March 2007 at Bukit Jalil Sports Complex. The event was officiated by YB Dato’ Liow Tiong Lai, Deputy Minister of Youth & Sports, Malaysia.

- International Students from countries such as Iran, China, Uzbekistan, Africa, Mongolia, Yemen, Saudi Arabia and Denmark at SEGi College organised an “International Cultural Fair” to raise funds for Nargis Cyclone Victims of Myanmar. A cheque of six thousand five hundred ringgit (RM6500) was presented to Mercy Malaysia at the Star Office in May 2008.

- Sponsored the inaugural High School Basketball League. The event saw participation by 80 teams from 40 secondary schools in the Klang Valley. The event was launched by YB Dato’ Hoh Lee Lee, President of Selangor Basketball Association. The 3 month league were concluded at the finals which were held at the flagship campus in July 2007. - Charity concerts: In conjunction with RSG, a charity concert, known as “Radhi Study Gig!” was held to benefit the Darfur Fund. The concert which raised RM600 from 250 students had performances from top underground bands such as Hujan, Meet Uncle Hussain, OAG and Bittersweet. The event which was also televised across 8TV, received popular views on YouTube. Other notable concerts were performance by Johnson Wee to raise funds for AIDS cause “Wave 2007” concert organised by the Faculty of Creative Arts & Design.

• SEG International Bhd • Calendar of Events

JANUARY 3 March 20 140 students graduate with degrees from Upper Iowa University, USA 269 diploma students graduated from the College’s four faculties (Business & Accountancy, Engineering & Technology, Education & January 27 & 28 Social Sciences and Creative Art & Design). The first SEGi College Open Day of 2007. MARCH 27 January 29 SEGi student, Lua Huily won the Gold Prize in the LCCI examinations SEGi College received approval from the Ministry of Higher in Business Statistics, the world’s best result. Education (MOHE) to offer the Master of Business Administration (MBA) in collaboration with the University of Southern Queensland. April 1 74 SEGi College students graduated with bachelor and master JANUARY 31 High School Basketball League 2007 (HSBL) launched by YB Dato’ degrees from University of Southern Queensland. Hoh Lee Lee, President of Selangor Basketball Association. APRIL 2 FEBRUARY 1 SEGi College student, Lim Yi Jian was awarded the Young Designer Chinese New Year celebration at all SEGi campuses Award 2006 organised by Malaysia Design Council.

FEBRUARY 9 APRIL 6 SEGi celebrates Montessori’s 100 Years of Glory Christian Horner, Team Principal of Redbull F1 Racing presented a talk on Formula 1 to automotive students at SEGi College Subang Jaya. February 10 SEGi College held it’s first Creative Arts Showcase, which saw the April 12 graduating batch of students presenting their art and works to the SEGi Group of Colleges, in collaboration with it valued corporate industry, parents, lecturers and friends. partners, launched the Career Exploratory Programme (CEP). FEBRUARY SEGi College Penang moves to new campus with upgraded April 15 facilities at Green Hall. The event was officiated by YB Datuk Ong 8TV, in partnership with SEGi College, launched new job search Tee Keat, Deputy Minister of Higher Education. reality show ‘Please Give Me A Job!’

• SEG International Bhd • Calendar of Events

MAY 6 July 7 & 8 SEGi College Sarawak student, Felix Ng Sze Teck was recognised SEGi held its nationwide Open Day at all its campuses in Kuala by the University of Southern Queensland as the Best Graduate Lumpur, Subang Jaya, Petaling Jaya, Penang, Sarawak and its in the Master of Business Administration (MBA) programme for main campus at Kota Damansara. 2006. JULY 7 May 18 SEGi College Malaysia at Kota Damansara organised Community SEGi received the ‘Special Award’ (Category for Private Sector) in Day 2007. conjunction with National Youth Week 2007. Junior Journalist Programme 2007 held at the flagship campus at Kota May 18 Damansara attracted 250 participants from secondary schools. SEGi College together with the Confederation of Tourism, Hotel & Catering Management (CTHCM) launched the Hotel Management JULY 9 Tourism programme. SEGi College welcomed the arrival of the second tallest man in the world, Rajan Adhikari and disabled Nepal national cyclist, Chitra MAY 24 Poudel. The duo were at the college to spread the message of SEGi lecturer, Yii Kah Hoe won the Malaysian Philharmonic peace and brotherhood around the world. Orchestra (MPO) Forum for Malaysian Composers 2, Phase II. This earned him the opportunity to represent Malaysia to enter the MPO July 23 International Composers Award. Clubs and Societies of SEGi College Kota Damansara celebrated Clubs Week. June 12 The 8TV Scholarship Fund, supported by SEGi Group of Colleges, August 1 was awarded to 15 successful students. SEGi Group of Colleges celebrated 30 years of providing recognised education. June 21 21st Annual General Meeting held at SEGi College Malaysia. August 8 Declared dividend 2% less tax. SEGi College welcomed the newly appointed Chief Executive Officer of the National Accreditation Board, Datuk Dr. Prof. Syed Ahmad, to its new flagship campus in Kota Damansara.

• SEG International Bhd • Calendar of Events

AUGUST 9 October 5 SEGi College Subang Jaya organised the Early Childhood SEGi Prom Night 2007 was held at the Evergreen Laurel Hotel in Practitioners Appreciation Day. The event was officiated by YB Penang in conjunction with the 18th Anniversary of SEGi College Dato’ G. Palanivel, the Deputy Minister of Women and Community Penang. Development, Malaysia. October 19 August 9 SEGi set up representative office in India. SEGi College pledged RM1,000,000 to UMNO Youth for the purpose of helping underprivileged youths obtain education and October 26 training. SEGi received the prestigious Technology Business Review Asean Award in the category of “Excellence in Education Sector”. August 15 SEGi College Kuala Lumpur welcomed new students during its October 29 orientation day. University of Bolton conferred awards on 300 graduates.

September 18 November 14 SEGi Group of Colleges signed with the Ministry of Health to use Extraordinary General Meeting held at Summit Hotel, USJ to hospital facilities for practical training. approve the sale and leaseback of SEGi College Malaysia.

SEPTEMBER 18 November 19 The sports and recreation complex at SEGi College, Malaysia at 150 students were conferred Master of Business Administration Kota Damansara was officially launched by Youth & Sports Minister, and Master of Financial Planning awards by the University of the YB Dato’ Sri Azalina Dato’ Othman Said. Sunshine Coast, Australia.

SEPTEMBER 26 November 19 International Cultural Night was held at SEGi College, Malaysia. The 40 students from SMK Penanti participated in a free workshop on event was attended by dignitaries from embassies and more than culinary arts by SEGi College Penang. 500 international students from over 46 countries.

• SEG International Bhd • Calendar of Events

November 26 December 12 University of Sunderland graduation was held. More than 200 SEGi College Kuala Lumpur held their Prom Night themed Casino graduants were conferred their awards of excellence. Royale at the Parkroyal Hotel Kuala Lumpur.

NOVEMBER 29 December 14 SEGi College Malaysia played host to a special talk by Professor The University of Wolverhampton, UK conferred an Honorary John Yates, Head of Mechanical Engineering of The University of Doctorate on Group CEO. Sheffield. The talk titled “Faster, Larger, Better: How Engineers Push the Boundaries” presents a rare opportunity for students and December 14 the public to deepen their knowledge and insights into the latest SEGi received the ‘Merit Award’ (Category for Institution) from the development in engineering. City Council of Petaling Jaya (MBPJ) Award for its picturesque campus and building structure in Kota Damansara. DECEMBER 2 Reality television programme Radhi Study Go! went on air over DECEMBER 15 8TV. SEGi College Malaysia, Kota Damansara played host to 8TV’s Ultimate Prom Nite live competition. Students of the campus also organised the “White Christmas” prom night a week later.

• SEG International Bhd • financial highlights

Group Five Years Financial Summary

2003 2004 2005 2006 2007 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 92,571 86,263 75,118 74,230 86,263 Profit before tax 19,679 11,994 1,000 2,868 2,479 Profit for the year - attributable to shareholders 14,373 9,321 236 2,073 5,156 Share capital 80,996 88,647 89,093 89,093 89,093 Shareholders’ fund 133,089 155,073 151,558 150,774 153,589 Total assets 225,513 275,020 301,315 284,251 309,896 Basic earnings per share (sen) 18.04 11.08 0.27 2.37 6.03 Proposed gross dividend per share (sen) 8.00 6.00 2.00 2.00 2.00

REVENUE (RM’000) PROFIT FOR THE YEAR attributable to shareholders (RM’000)

100,000 10,000

80,000 8,000

60,000 6,000

40,000 4,000

20,000 2,000

2003 2004 2005 2006 2007 2003 2004 2005 2006 2007

TOTAL ASSETS (RM’000)

400,000

300,000

200,000

100,000

2003 2004 2005 2006 2007

• SEG International Bhd • CORPORATE GOVERNANCE STATEMENT

The Board of Directors is supportive of the adoption of principles Board meetings and best practices in the Malaysian Code of Corporate Governance The Board meets on a scheduled basis, at least once every (the Code) throughout the Group. The Board views the adoption of quarter with additional meetings held as and when urgent issues the highest standards of corporate governance as imperative for and important decisions are required to be made between the the protection and enhancement of stakeholders’ value and the scheduled quarterly meetings. The Board has a formal schedule performance of the Group. of matters reserved to it for decision, including the approval of annual and quarterly results, major acquisitions and disposals, The Board of Directors of the Company is pleased to report to material contracts or agreement, major capital expenditures, major shareholders on the manner in which the Group has applied the Principles, and the extent to which it has complied with the Best decisions affecting business operations and performance of the Practices of good governance as set out in Parts 1 and 2 on the Group. All Board members carry an independent judgement when Code. deliberating matters concerning the Group including strategy, operations, performance, finance resources and standard of conduct. Principle A – Board of Directors During the financial year ended 31 December 2007, five (5) meetings Constitution of the Board and Board Balance were held. A summary of attendance for each of the board meetings The Board has the overall responsibility for corporate governance, held is as follows: strategic direction and overseeing the investments of the Group and of the Company. No. of meetings The Board, led by a Non-Executive Chairman, is currently made up of ten (10) members, comprising three (3) Executive Directors Name of Directors attended and seven (7) Non-Executive Directors, four (4) of whom are Dato’ Pahamin A. Rajab 5 out of 5 Independent Directors. The Board, with their different backgrounds Dato’ (Dr.) Patrick Teoh Seng Foo 3 out of 5 and specialisation, collectively bring with them a diverse range of Dato’ Clement Hii Chii Kok 5 out of 5 experience and expertise in legal, business, financial and technical Lee Kok Cheng 5 out of 5 fields. The mixture of skills and experience is vital to give balanced Dato’ Seri Megat Najmuddin bin views in decision making. A brief profile of each Director is presented Dato’ Seri Dr. Haji Megat Khas 4 out of 5 on pages 24 to 29. Datin Fadzilah bte Saad 5 out of 5 Amos Siew Boon Yeong 5 out of 5 There is a clear division of responsibility between the Chairman Simon Hue Fook Chuan 5 out of 5 and Chief Executive Officer to ensure that there is a balance of Abdullah Kamal bin Shafi’i 5 out of 5 power and authority. The Chairman is responsible for ensuring Tony Foo San Kan (appointed on 27 February 2007) 4 out of 4 Board effectiveness and conduct whilst the Chief Executive Officer has overall responsibility for the operating units, organisational effectiveness and implementation of Board policies and decisions. Access to Information The Executive Directors have direct responsibility for business Board meetings are structured with a pre-set agenda, whereby operations. The presence of Independent Non-Executive Directors prior to each Board meeting, all Directors are provided with a set of fulfils a pivotal role in corporate accountability. Although all the Board papers containing information relevant to the business of the Directors have equal responsibility for the Group’s operations, the meeting to facilitate decision-making. The Board has unrestricted role of these Independent Non-Executive Directors is important. access to all information pertaining to the Group’s affairs and the They provide independent and objective views, advice and services of the Company Secretary. If necessary, the Directors can judgement on issues of strategy, business performance and seek independent professional advice at the Company’s expense controls, to take account of the interests of the Group, shareholders to enable them to discharge their duties effectively. and communities in which the Group conducts business as well as the public at large.

• SEG International Bhd • CORPORATE GOVERNANCE STATEMENT

Board Committees Dato’ Clement Hii Chii Kok - Member The Board assumes responsibility for effective stewardship and Group Chief Executive Officer/Executive Director control of the Group. It delegates certain responsibilities to the Board Committees as described below with clearly defined terms Lee Kok Cheng - Member of reference: Chief Operating Officer/Executive Director

• Nominating Committee Abdullah Kamal bin Shafi’i - Member The Nominating Committee is entrusted with the specific task Non-Independent Non-Executive Director of identifying and recommending new nominees to the Board. However, the Board has the final decision on appointments after • Remuneration Committee considering the recommendations of the committee. The Remuneration Committee comprising mainly Non-Executive Directors is responsible for developing the remuneration policy The committee also assesses the Directors of the Company on an framework and to make recommendations to the Board on the on-going basis. The duties include evaluating the effectiveness of remuneration packages of the Directors. The Executive Directors the Board as a whole, the various board committees and reviewing do not participate in decisions relating to their remuneration. The the mix of skills, experience and expertise of each Director and Board as a whole determines the remuneration of the Directors. their contribution to the effectiveness of the decision-making The individual concerned abstains from participating in decisions process of the Board. in respect of his/her individual remuneration.

The Nominating Committee comprises Non-Executive Directors The Remuneration Committee consists of the following members: as follows: Dato’ Pahamin A. Rajab - Chairman Dato’ Pahamin A. Rajab - Chairman Non-Independent Non-Executive Director Non-Independent Non-Executive Director Dato’ (Dr.) Patrick Teoh Seng Foo - Member Simon Hue Fook Chuan - Member President/Executive Director Independent Non-Executive Director Amos Siew Boon Yeong - Member Tony Foo San Kan - Member Independent Non-Executive Director Independent Non-Executive Director The committee met once during the financial year under review. The committee met once during the financial year under review. • Audit Committee • Executive Committee The Audit Committee assists the Board in discharging its duty The Executive Committee is authorised to transact business in maintaining a sound internal control system to safeguard the activities of the Group subject to certain limitations as set out in shareholders’ investments and the Company’s assets. the terms of reference and to ensure the smooth and effective running of the Company. The Executive Committee comprises The terms of reference and further information on the Audit the following: Committee are set out in the Report of the Audit Committee.

Dato’ Pahamin A. Rajab - Chairman • Risk Management Committee The Risk Management Committee was established to oversee Non-Independent Non-Executive Director the implementation of the risk management system in the Group. The committee reports directly to the Board and assists the Dato’ (Dr.) Patrick Teoh Seng Foo - Member Board in overseeing the management of risk issues and reviews President/Executive Director the effectiveness of internal controls within the Group. 96

• SEG International Bhd • CORPORATE GOVERNANCE STATEMENT

The Risk Management Committee consists of the following Training and Development of Directors members: All the Directors have completed the Mandatory Accreditation Programme and continuously attended various training programmes Lee Kok Cheng - Chairman to stay abreast with developments in the market place and new Chief Operating Officer/Executive Director statutory and regulatory requirements.

Simon Hue Fook Chuan - Member During the financial year under review, the Directors continually Independent Non-Executive Director attended education programmes and seminars to stay abreast with developments in the market place. Among the professional Cheryl Chong Poh Yee - Member programmes attended were financial reporting standards, Group Vice President introduction of the revised corporate governance and leadership courses. The Board will continue to evaluate and determine the The committee met twice during the financial year under review. training needs of its Directors on an ongoing basis.

Re-election Principle B – Directors’ Remuneration In accordance with the Articles of Association of the Company, all The objective of the Company’s policy on Directors’ remuneration Directors who are appointed by the Board are subject to retirement is to attract and retain Directors of calibre needed for the and eligible for election by shareholders at the annual general achievement of the Company’s strategic objectives. The details of meeting following their appointment. The remaining Directors will the remuneration for the Directors of the Company for the financial retire at regular intervals by rotation at least once every three (3) year under review are as follows: years and shall be eligible for re-election.

1. The aggregate remuneration of each Director were as follows:

Salary Fee Others Emoluments

Executive Directors Dato’ (Dr.) Patrick Teoh Seng Foo 219,750 - 50,700 Dato’ Clement Hii Chii Kok 366,250 - 43,500 Lee Kok Cheng 296,000 - 49,260 Non-Executive Directors Dato’ Pahamin A. Rajab - 66,000 - Dato’ Seri Megat Najmuddin bin Dato’ Seri Dr. Hj Megat Khas - 28,000 - Datin Fadzilah bte Saad - 28,000 - Amos Siew Boon Yeong - 40,000 - Simon Hue Fook Chuan - 28,000 - Abdullah Kamal bin Shafi’i - 28,000 - Tony Foo San Kan - 24,000 -

Other emoluments include benefits-in-kind and statutory contributions.

• SEG International Bhd • CORPORATE GOVERNANCE STATEMENT

2. The number of Directors whose total remuneration fall within the following bands were as follows :

Number of Directors Range of Remuneration Executive Non-Executive Below RM50,000 - 6 RM50,001 to RM100,000 - 1 RM250,001 to RM300,000 1 - RM300,001 to RM350,000 1 - RM400,001 to RM450,000 1 -

Principle C – Shareholders Principle D – Accountability and Audit

Relationship with Shareholders and Investors Financial Reporting Recognising the importance of timely dissemination of information The Board aims to present a balanced and understandable to shareholders and other stakeholders, the Board is committed assessment of the Group’s financial performance and prospects to to ensure that the shareholders and other stakeholders are well the shareholders, primarily through its annual financial statements informed of major developments of the Company and the information and unaudited interim results as well as the Chairman’s Statement is communicated to them through the following channels: and other reports in the Annual Report. The Audit Committee assists the Board in reviewing information disclosed to ensure • The Annual Report; accuracy and adequacy. • The various disclosures and announcements to Bursa Malaysia Securities Berhad (“Bursa Securities”) including quarterly and Internal Control annual results via www.bursamalaysia.com; Information on the Group’s internal control is presented in the • The Company’s website at www.segi.edu.my; and Statement of Internal Control which appears in the ensuing pages • The Company’s investor relations website at ir.wallstraits.net/segi. of this report.

The Board has appointed Mr. Amos Siew Boon Yeong, a senior Relationship with Auditors Independent Non-Executive Director, to whom all concerns The role of the Audit Committee in relation to external auditors is regarding the Company may be conveyed. described in the Audit Committee Report set in the ensuing pages of this Annual Report. The Company has maintained a close and Annual General Meeting (“AGM”) transparent relationship with its auditors in seeking professional The AGM provides a platform for two-way communication between advice and ensuring compliance with applicable approved the Company and shareholders. The Chairman and the Board accounting standards in Malaysia. encourage shareholders to attend and participate in the AGM. Shareholders are given the opportunity to seek clarification on any Compliance Statement matters pertaining to the business and financial performance of the The Board has taken steps to ensure that the Group has implemented Company. the Best Practices as set out in the Code and considers that all other Best Practices have been substantially implemented in accordance with the Code.

This statement was approved by the Board of Directors on 22 April 2008.

• SEG International Bhd • CORPORATE GOVERNANCE STATEMENT

Other information required by the Bursa Securities Listing 3. Options, Warrants or Convertible Securities Requirements There were no options, warrants or convertible securities being issue during the financial year under review. 1. Utilisation of Proceeds raised from Corporate Proposals Save as disclosed below, there were no corporate proposals 4. American Depository Receipt (“ADR”) or global conducted in the financial year under review: Depository Receipt (“GDR”) Programme The Company did not sponsor any ADR or GDR Programme The gross proceeds of RM145.00 million from the proposed during the financial year. disposal of the property located at Kota Damansara, Selangor Darul Ehsan has been utilised for repayment of bank borrowings 5. Sanctions and/or Penalties (RM97 million) and working capital (RM48 million). During the financial year, there were no major sanctions and/or penalties imposed on the Company or its subsidiary 2. Share Buy-back companies, Directors or management by the relevant regulatory During the financial year ended 31 December 2007, the authorities. Company bought back a total of 1,331,800 of its own shares for a total consideration of RM1,048,526. These shares are 6. Non-Audit Fees presently held as treasury shares. None of the shares purchased There were no non-audit fees paid to the external auditors has been resold or cancelled during the financial year. during the financial year ended 31 December 2007.

Details of the shares purchased during the year are as follows:-

Purchase Price Average Cost Monthly No. of Shares Per Share (RM) Per Share Total Breakdown Purchased Lowest Highest RM RM

February 2007 136,400 0.790 0.800 0.800 109,101 May 2007 427,000 0.800 0.830 0.819 349,658 June 2007 349,000 0.740 0.820 0.784 273,565 July 2007 173,000 0.780 0.795 0.794 137,327 August 2007 160,000 0.740 0.740 0.740 118,400 December 2007 86,400 0.690 0.750 0.700 60,475

1,331,800 0.690 0.830 0.787 1,048,526

• SEG International Bhd • CORPORATE GOVERNANCE STATEMENT

7. Variation in Results (iii) the outstanding amounts payable by the Guarantor to the There was no material variance in results between the audited Company as stated in (i) and (ii) above shall be secured results for the financial year ended 31 December 2007 and the by an assignment in escrow of properties owned by the unaudited results previously announced. Guarantor’s subsidiary in favour of the Company.

8. Profit Guarantee The Guarantor, Dato’ (Dr.) Patrick Teoh Seng Foo and Dato’ The Group has not provided any profit guarantee in the financial Clement Hii Chii Kok are substantial shareholders of the year ended 31 December 2007. Company. Dato’ (Dr.) Patrick Teoh Seng Foo, Dato’ Clement Hii Chii Kok and Mr. Amos Siew Boon Yeong, the Directors of 9. Material Contracts the Company, are also Directors of the Guarantor. Save as disclosed below, there were no material contracts entered into by the Company and its subsidiaries, involving 10. Revaluation Policy on Landed Properties the interest of directors and major shareholders, either still The Company does not have a policy to revalue its landed subsisting at the end of the financial year or entered into since properties. the end of the previous financial year. 11. Recurrent Related Party Transactions of a revenue or Settlement Agreement dated 24 March 2008 entered into trading nature between EcoFirst Consolidated Bhd (formerly known as There were no recurrent related party transactions during the Kumpulan Emas Berhad) (“Guarantor”) and the Company in financial year under review. relation to a Profit Guarantee Agreement dated 22 October 1999 and three Supplemental Agreements thereto. The salient 12. Internal Audit Function terms of the Settlement Agreement are as follows: The internal audit function was previously outsourced to an independent external audit firm (“IEAF”). In September 2007, (i) the shortfall of the guaranteed profit up to the financial year the Company re-established its own Internal Audit Department ended 31 December 2005 amounting to RM3,380,000.00 to replace the IEAF. During the year under review, the Company shall be paid by the Guarantor to the Company via monthly incurred expenses amounting to RM64,000 for the internal payment over a period of 34 months at RM100,000.00 audit function. each month from January 2008 until September 2010 and the final RM80,000.00 in October 2010;

(ii) the guaranteed profit for the financial year ended 31 December 2006 shall be calculated based on the cumulative pre-tax profits of the Company for the years of 2006, 2007, and 2008, and all and any shortfall then shall be payable by the Guarantor to the Company; and

100

• SEG International Bhd • Statement of Directors’ responsibilities in respect of the audited financial statements

The Board is responsible for ensuring that the financial statements of the Group give a true and fair view of the state of affairs of the Group and of the Company as at the end of the financial year and of their results and cash flows for the financial year then ended. In preparing the financial statements, the Directors have complied with the applicable approved accounting standards in Malaysia and the provision of the Companies Act, 1965.

In preparing the financial statements, the Directors have adopted and consistently applied suitable accounting policies, and made reasonable and prudent judgements.

The Directors are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

101

• SEG International Bhd • AUDIT COMMITTEE REPORT

The Board of Directors is pleased to present the Audit Committee Report for the year ended 31 December 2007.

Membership The Audit Committee comprises:

Amos Siew Boon Yeong - Chairman, Independent Non-Executive Director Datin Fadzilah bte Saad - Non-Independent Non-Executive Director Simon Hue Fook Chuan - Independent Non-Executive Director Tony Foo San Kan - Independent Non-Executive Director

MEETINGS During the year under review, meetings were held on 27 February 2007, 20 April 2007, 29 May 2007, 27 August 2007 and 29 November 2007, a total of five (5) meetings. Attendance of each member was as follows:

Audit Committee Members No. of meetings attended Amos Siew Boon Yeong 5/5 Datin Fadzilah bte Saad 5/5 Simon Hue Fook Chuan 5/5 Tony Foo San Kan 3/3

Terms of Reference of the Audit Committee The Audit Committee (“the Committee”) is governed by the terms of reference that were formally endorsed by the Board on 11 May 2001 and that have been reviewed from time to time. The terms of reference are set out as follows:

OBJECTIVES The principal objectives of the Committee are to review the adequacy and the integrity of the Company’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines, as well as to oversee the conduct of the Company’s businesses.

The Committee provides assistance to the Board in fulfilling its fiduciary responsibilities, particularly in areas related to financial accounting and reporting practices as well as operation and management controls. This is to ensure conformity with good corporate governance, transparency, integrity and accountability in the conduct of the Group’s activities so as to safeguard the rights and interests of the shareholders.

COMPOSITION The Committee shall consist of at least three (3) members. All the Committee members must be non-executive Directors, with a majority of them being independent. The Chairman shall be an Independent Non-Executive Director. At least one member of the Committee must be a member of the Malaysian Institute of Accountants or if he is not, then he must be a person who complies with the requirements of Paragraph 15.10 of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities Listing Requirements”).

In the event of any vacancy in the Committee resulting in the non-compliance of subparagraph 15.10(1) of the Bursa Securities Listing Requirements, the vacancy must be filled within three (3) months.

102

• SEG International Bhd • AUDIT COMMITTEE REPORT

MEETINGS The Committee shall meet not less than four (4) times a year. A quorum shall consist of two (2) members, with independent directors forming the majority.

Certain members of senior management shall attend meetings by invitation of the Committee. The External Auditors will be present at certain meetings to report to the Committee on their activities and other specific issues, if any. The Committee also meets at least twice a year with the External Auditors without the management present.

The Secretary shall be responsible for drawing up the agenda and circulating it, supported by explanatory documentation to the Committee members prior to each meeting.

The Secretary shall also be responsible for keeping the minutes of the Committee, and circulating them to each member of the Committee and of the Board of Directors. The Chairman of the Committee shall report on each meeting to the Board. The Secretary to the Committee shall be the Company Secretary.

AUTHORITY The Committee is authorised by the Board:

(a) to investigate any matter within its terms of reference; (b) to have the resources which are required to perform its duties; (c) to have full and unrestricted access to any information pertaining to the Group and the Company; (d) to have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity; (e) to obtain independent professional or other advice as necessary; and (f) to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company whenever deemed necessary.

FUNCTIONS The functions of the Audit Committee are as follows:

(a) to review the following and report the same to the Board of Directors: i with the external auditors, the audit plan; ii with the external auditors, their evaluation of the system of internal controls; iii with the external auditors, their audit report; iv the assistance given by the Company’s employees to the external auditors; v the adequacy of the scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work; vi the internal audit programme, processess, the results of the internal audit work undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function; vii the quarterly results and year end financial statements, prior to the approval by the Board of Directors, focusing particularly on: • changes in or implementation of major accounting policies and practices; • significant adjustments arising from the audit; • significant and unusual events; and • compliance with accounting standards and legal requirements; viii any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity; ix external auditors’ management letter and management’s responses;

103

• SEG International Bhd • AUDIT COMMITTEE REPORT

(b) to consider the appointment of internal auditor and conduct exit interview for internal audit staff who is leaving the organisation;

(d) to recommend the nomination of a person or persons as external auditors; and

(e) such other functions as the Board may from time to time determine.

ACTIVITIES DURING THE YEAR During the year under review, the following were the activities of the Audit Committee:

• Reviewed the external auditors’ scope of work and audit plans for the year prior to the audit, with the representatives from the external auditors who presented their audit strategy and plan. • Reviewed with the external auditors the results of the audit, the audit report and the management letter, including the management’s responses. • Considered and recommended to the Board for approval of the audit fees payable to the external auditors as disclosed in the notes to the financial statements. • Reviewed the Company’s compliances, in particular the quarterly and year-end financial statements with the Bursa Securities Listing Requirements, applicable approved accounting standards in Malaysia and other relevant legal and regulatory requirements. • Reviewed the Company’s Statement on Internal Control prior to endorsement by the Board. • Reviewed the internal audit function resource requirements, programmes and plan for the financial year under review. • Reviewed with the internal auditors, important issues highlighted including the management’s responses and the follow-up action plans implemented. • Reviewed the extent of the Group’s compliance with provisions set out in the Malaysian Code on Corporate Governance. • Recommended to the Board action plans to address identified gaps between the Group’s existing corporate governance practices and the prescribed corporate governance principles and best practices under the Code. • Met with the external auditors independently without the presence of the management. • Met with the internal auditors independently without the presence of the management.

STATEMENT ON EMPLOYEES’ SHARE OPTION SCHEME (“THE SCHEME”) The Scheme expired on 14 January 2007. Should the Company decide to allocate any options in future, the allocation shall be verified by the Committee at the end of that financial year.

INTERNAL AUDIT FUNCTION The internal audit function undertakes the audit using a risk-based approach. The audit focuses on key controls to mitigate risks, safeguard assets, ensure compliances with policies and procedures, and promote effectiveness of management and efficiency of operations. The audit covers the Group’s operating units, reviewing the unit’s compliances to Group’s policies and procedures, identifying weaknesses in the internal control system and making appropriate recommendations for improvement. The internal audit function carries out its duties according to the approved audit plan and issues of concern are highlighted to the Committee at the Committee meetings. The Committee reports the same to the Board after reviewing and deliberating on the findings.

The internal audit function was previously outsourced to an independent external audit firm (“IEAF”). In September 2007, the Company re-established its own Internal Audit Department to replace the IEAF. During the year under review, the IEAF completed its internal audit work on three of the Group’s colleges. The reports of the audits were duly submitted to the Committee together with their findings and recommendations, and the management’s responses on the findings.

104

• SEG International Bhd • statement on internal control

Introduction • Key processes of the Group are clearly defined in the Standard The Board of SEG International Bhd approved the following Operating Procedures that are extended to all operating units statement which outlines the state of internal control of the Group in the Group. for the year under review, in accordance with Principle DII in Part 1 of the Code on Corporate Governance and Paragraph 15.27 (b) of • Key functions such as finance and treasury, legal, human the Listing Requirements. resource and regulatory matters are controlled centrally.

The Board’s Commitment The Board affirms its overall responsibility for the Group’s system • The Board has appointed the Audit Committee (AC) to examine of internal control and for reviewing its effectiveness, adequacy and the effectiveness of the Group’s internal control system integrity. Due to the limitations that are inherent in any system of on behalf of the Board. In order to better assist the Audit internal control, the Board is aware that such system is designed to Committee in discharging its duty for assessing the efficiency manage rather than eliminate the risk of failure to achieve business and effectiveness of the Group’s internal control system, the objectives, and can provide only reasonable and not absolute Group had re-established its Internal Audit Department (IAD) in assurance against material misstatement or loss. September 2007 to replace the independent external audit firm (IEAF). The IAD reports directly to the Audit Committee in order The Board has reviewed the effectiveness of the Group’s system to maintain its impartiality, proficiency and due professional of internal control and risk management processes. The Board care. confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group. This process Risk Management is regularly reviewed by the Board. Part 2 of the Best Practices in Corporate Governance states, in relation to risk management, that “the Board should identify principal The Board further believes that the Group’s system of internal risks and ensure the implementation of appropriate systems to control, financial or otherwise, should provide reasonable assurance manage these risks.” regarding the achievement of the Group’s objectives in: The Board has delegated the task for overseeing the risk management • Effectiveness and efficiency of the operation; assessment of the Group to the Risk Management Committee • Reliability and transparency of financial information; (RMC). The RMC is chaired by the Chief Operating Officer and • Compliance with laws and regulations; and the RMC meetings are attended by an Independent Non-Executive • Safeguarding of its assets. Director together with selected members of the Management team. The committee met in July and November 2007 to deliberate Key frameworks of the Group’s system of internal control include:- issues identified by the Management and recommended courses of action to mitigate these risks. The outcomes of the RMC meetings • The Group has an appropriate organisational structure for were presented to the Board accordingly. planning, executing and controlling business operations which enables adequate monitoring of the activities and ensures effective flow of information across the Group.

• Lines of responsibility and delegations of authority are clearly defined which include amongst others approval of major expenditure.

105

• SEG International Bhd • statement on internal control

The Board is committed to maintain a strong control structure Assurance and environment for the proper conduct of the Group’s business During the year under review, the IEAF conducted audits on three operations. The current system of risk management in the Group main colleges to assess and review the efficiency and effectiveness has the following key elements: of the college’s internal controls in key business processes. There were no major issues of internal controls highlighted in these • An effective Board that retains control over the Group. reports that would result in any material losses, contingencies • A clear Group vision, mission and strategic direction. or uncertainties that require any disclosure in the Group’s annual • An organisation structure with its defined lines of responsibility report. and delegation of authority to achieve the Group’s objectives. • Key Result Areas (KRA) of Management staff that incorporates Important issues observed, management’s action plan to rectify the Group’s objectives. the issues highlighted and persons responsible to implement the • A quarterly Management meeting comprising Management action plan by the target date were tabled at the quarterly Audit staff is set-up to monitor performances and to discuss major Committee meetings for deliberation and subsequently reported to operations issues. the Board of Directors. • The constant monitoring and review of annual budget and business strategies against actual performances. The IAD had since September 2007 worked out an Internal Audit • Clearly established practices and procedures in the Standard Plan for Year 2008 and Internal Audit Charter and tabled to the Operation Procedure (SOP) manuals for implementation by the Audit Committee in November 2007. Since then, actual audit Group’s operating units/division. reviews have commenced to review the Group’s internal control • Continuous quality improvement initiatives such as ISO system based on the approved audit plan. certification for the Examination department. • Quarterly Board meetings to review business operations and The statement was approved by the Board of Directors on approve significant transactions (if any). Performance report 22 April 2008. provides the Board with comprehensive information on financial performance and other key indicators.

106

• SEG International Bhd • fINANCIAL sTATEMENTs

• Directors’ Report 108 • Statement by Directors 114 • Statutory Declaration 114 • Report of the Auditors 115 • Balance Sheets 116 • Income Statements 117 • Statement of Changes in Equity 118 • Cash Flow Statements 120 • Notes to the Financial Statements 122

107

• SEG International Bhd • Directors’ Report for the year ended 31 December 2007

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended 31 December 2007.

Principal activities The Company is principally engaged in investment holding, the provision of management consultancy services, property management, rental of premises, business advisory services and the provision of educational and training services, whilst the principal activities of the subsidiaries are as stated in Note 7 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

Results Group company R rM’000 rM’000 Profit attributable to: Shareholders of the Company 5,156 3,423 Minority interest 187 - 5,343 3,423

Reserves and provisions There were no material transfers to or from reserves and provisions during the year under review except as disclosed in the financial statements.

Dividends Since the end of the previous financial year, the Company paid a final ordinary dividend of 2 sen per ordinary share less tax at 27% totalling RM1,245,000 (1.46 sen net per ordinary share) in respect of the year ended 31 December 2006 on 15 August 2007.

The final ordinary dividend recommended by the Directors in respect of the year ended 31 December 2007 is 2 sen per ordinary share less tax at 26% totalling RM1,243,000 (1.48 sen net per ordinary share).

Directors of the Company Directors who served since the date of the last report are:

Director Dato’ Pahamin A. Rajab Dato’ (Dr.) Patrick Teoh Seng Foo Dato’ Clement Hii Chii Kok Lee Kok Cheng Dato’ Seri Megat Najmuddin bin Dato’ Seri Dr. Haji Megat Khas Datin Fadzilah bte Saad Amos Siew Boon Yeong Simon Hue Fook Chuan Abdullah Kamal bin Shafi’i Tony Foo San Kan

108

• SEG International Bhd • Directors’ Report for the year ended 31 December 2007

Directors of the Company (continued) The interests and deemed interests in shares and options over shares in the Company and its related corporations (other than wholly-owned subsidiaries) of those who were Directors at the end of the year as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM1.00 each As at as at Name 1.1.2007 Bought sold 31.12.2007

Dato’ (Dr.) Patrick Teoh Seng Foo Interest in the Company: - own 705,000 - 198,000 507,000 Deemed interest in the Company: - others# 22,855,025 - - 22,855,025

Dato’ Clement Hii Chii Kok Interest in the Company: - own 945,500 - - 945,500 Deemed interest in the Company: - others# 22,855,025 - - 22,855,025

Dato’ Seri Megat Najmuddin bin dato’ Seri Dr. Haji Megat Khas Interest in the Company: - own 297 - - 297

Abdullah Kamal bin Shafi’i Interest in the Company: - own 10,000 - - 10,000 Deemed interest in the Company: - others+ 18,982,078 - - 18,982,078

Dato’ Pahamin A. Rajab Interest in the Company: - own - 767,800 - 767,800 Deemed interest in the Company: - others^ 15,226,865 - - 15,226,865

Datin Fadzilah bte Saad Deemed interest in the Company: - others^ 15,226,865 - - 15,226,865

# Deemed interest held through EcoFirst Consolidated Berhad and Sawitani Sdn. Bhd. ^ Deemed interest held through Koperasi Pegawai-Pegawai Melayu Malaysia Berhad + Deemed interest held through Koperasi Pegawai-Pegawai Melayu Malaysia Berhad and Ladang MOCCIS Sdn. Bhd.

109

• SEG International Bhd • Directors’ Report for the year ended 31 December 2007

Directors of the Company (continued) Number of options over ordinary shares of RM1.00 each As at as at Name 1.1.2007 Granted exercised Lapsed 31.12.2007

Lee Kok Cheng 35,000 - - 35,000 -

By virtue of their interest in shares in the Company, the above Directors are also deemed interested in the shares of the subsidiaries during the financial year to the extent that the Company has an interest.

Other than as disclosed above, none of the other Directors holding office as at 31 December 2007 had any interest in the ordinary shares and options over shares in the Company or its related corporations during the financial year.

Directors’ benefits Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements or the fixed salary of a full time employee of the Company or of related companies/corporations) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest except as disclosed in Note 31 to the financial statements.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate except for options granted to certain Directors pursuant to the Company’s Employees Share Options Scheme (ESOS).

Issue of shares There were no changes in the authorised, issued and paid-up capital of the Company during the financial year.

Treasury shares During the financial year, the Company repurchased 1,331,800 ordinary shares of its issued share capital from the open market.The average price paid for the shares bought back was RM0.79 per ordinary share. The share buy back transactions were financed by internally generated funds. The shares bought back were held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

At the Balance Sheet date, the total shares held as treasury shares amounted to 4,238,300 shares.

110

• SEG International Bhd • Directors’ Report for the year ended 31 December 2007

Options granted over unissued shares and debentures No options were granted to any person to take up unissued shares or debentures of the Company during the year apart from the issue of options pursuant to the ESOS.

At an extraordinary general meeting held on 15 November 2001, the Company’s shareholders approved the establishment of an ESOS of not more than 10% of the issued share capital of the Company at any one time at the point of granting of the options to Executive Directors and eligible employees of the Group. The ESOS was implemented on 15 January 2002 for a period of five (5) years.

The options offered to take up unissued ordinary shares of RM1.00 each and the exercise prices are as follows:

Number of options over ordinary shares of RM1.00 each Exercise as at as at Date of offer price 1.1.2007 Granted exercised lapsed 31.12.2007

5.2.2002 RM1.40 1,274,000 - - 1,274,000 - 30.6.2003 RM1.35 463,000 - - 463,000 - 17.6.2004 RM2.25 513,000 - - 513,000 -

No options were being granted during the financial year and the ESOS expired on 14 January 2007.

The salient features of the scheme are as follows: i) Eligible persons are employees or any Executive Directors who are citizens or residents of Malaysia and employed by a member of the Company or its subsidiaries (“SEG Group”) for a continuous period of at least one (1) year and whose service of employment has been confirmed in writing as at the date of offer. In addition, where an employee is serving under a fixed term of employment contract, the contract must be for a duration of at least three (3) years and whose service of employment has been confirmed in writing. ii) As at the date of offer, employees must not participate or have not been offered option(s) under any other ESOS implemented by any other member of the SEG Group which is in force for the time being. iii) The option is personal to the grantee and is non-assignable. iv) The options granted may be exercised at any time from the date of offer of the option to the expiry date of the scheme or such shorter period as may be specifically stated in the offer upon giving notice in writing. v) The options granted may be exercised in full or in lesser number of ordinary shares provided that the number shall be in multiples of 1,000 shares. vi) The option price shall be determined at a discount of not more than 10% from the five (5)-day weighted average market price of the Company’s ordinary shares (“SEG Shares”) immediately preceding the date of the offer of the option or at par value of SEG Shares, whichever is higher.

111

• SEG International Bhd • Directors’ Report for the year ended 31 December 2007

Other statutory information Before the balance sheets and income statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that: i) all known bad debts have been written off and adequate provision made for doubtful debts, and ii) all current assets have been stated at the lower of cost and net realisable value.

At the date of this report, the Directors are not aware of any circumstances: i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the Group and in the Company inadequate to any substantial extent, or ii) that would render the value attributed to the current assets in the Group and in the Company financial statements misleading, or iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading.

At the date of this report there does not exist: i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year ended 31 December 2007 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

112

• SEG International Bhd • Directors’ Report for the year ended 31 December 2007

Subsequent event On 6 September 2007, SEG International Berhad (“SEGi”) entered into a sale and purchase agreement (‘SPA”) with CIMB Trustee Berhad (“CIMB Trustee”), being the trustee of AmanahRaya Real Estate Investment Trust (“ArREIT”), to dispose a piece of land in Mukim of Sungai Buloh measuring approximately 425,146 square feet (“Land”), an institutional building complex known as SEGi College erected on the Land and fixtures, fittings, plants and equipments (collectively referred to as the “Property”) for a total cash consideration of RM145 million.

Concurrently, SEGi and CIMB Trustee entered into a lease agreement wherein SEGi agreed to lease the above Property from CIMB Trustee for a period of ten (10) years from the completion date of the SPA, extendable at SEGi’s option for a further five (5) years at a revised rental to be mutually agreed upon (“Lease Agreement”).

The Proposed Disposal was completed on 3 January 2008 whilst the Lease Agreement commenced on even date with a monthly rental of RM870,000.

Auditors The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

Dato’ Pahamin A. Rajab

Dato’ Clement Hii Chii Kok

Subang Jaya, Selangor

Date: 22 April 2008

113

• SEG International Bhd • Statement by Directors pursuant to Section 169(15) of the Companies Act, 1965

In the opinion of the Directors, the financial statements set out on pages 116 to 168 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 December 2007 and of the results of their operations and cash flows for the year ended on that date.

Signed in accordance with a resolution of the Directors:

Dato’ Pahamin A. Rajab

Dato’ Clement Hii Chii Kok

Subang Jaya, Selangor

Date: 22 April 2008

Statutory declaration pursuant to Section 169(16) of the Companies Act, 1965

I, Dato’ (Dr.) Patrick Teoh Seng Foo, the Director primarily responsible for the financial management of SEG International Bhd., do solemnly and sincerely declare that the financial statements set out on pages 116 to 168 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed in Subang Jaya, Selangor on 22 April 2008.

Dato’ (Dr.) Patrick Teoh Seng Foo MIA Number: 3568

Before me:

Choy Yee Cheong (P.P.N.) No. B083 Commissioner for Oaths

114

• SEG International Bhd • Report of the auditors to the members of SEG International Bhd.

We have audited the financial statements set out on pages 116 to 168. The preparation of the financial statements is the responsibility of the Company’s Directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person for the content of this report.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Directors, as well as evaluating the overall financial statements presentation. We believe our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of:

i) the state of affairs of the Group and of the Company at 31 December 2007 and the results of their operations and cash flows for the year ended on that date; and

ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and of the Company; and

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and the subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act.

The subsidiaries in respect of which we have not acted as auditors are identified in Note 7 to the financial statements and wehave considered their financial statements and the auditors’ reports thereon.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under subsection (3) of Section 174 of the Act.

KPMG Chen Foo Siong Firm Number: AF 0758 Partner Chartered Accountants Approval Number: 1547/11/08(J/PH)

Kuala Lumpur,

Date: 22 April 2008

115

• SEG International Bhd • Balance Sheets as at 31 December 2007

Group Company Note 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Assets Property, plant and equipment 3 60,339 157,101 8,494 113,248 Intangible assets 4 30,165 30,323 - - Prepaid lease payments 5 4,957 4,963 - - Investment property 6 522 532 522 532 Investment in subsidiaries 7 - - 70,941 70,941 Investment in associates 8 706 1,745 - - Other investments 9 5,830 8,970 1,920 6,000 Deferred tax assets 10 3,007 1,098 2,469 - Other receivables 11 18,165 9,600 - - Total non-current assets 123,691 214,332 84,346 190,721

Inventories 12 188 119 - - Receivables, deposits and prepayments 11 40,059 48,817 63,202 58,242 Other investments 9 147 174 - - Current tax assets 4,005 1,807 1,232 694 Assets classified as held for sale 13 132,654 12,865 132,654 12,865 Cash and cash equivalents 14 9,152 6,137 5,591 284 Total current assets 186,205 69,919 202,679 72,085 Total assets 309,896 284,251 287,025 262,806

Equity Share capital 89,093 89,093 89,093 89,093 Reserves 64,496 61,681 46,984 45,860

Total equity attributable to shareholders of the Company 153,589 150,774 136,077 134,953 Minority interest 749 562 - - Total equity 15 154,338 151,336 136,077 134,953

Liabilities Loans and borrowings 16 26,156 67,125 20,000 63,059 Deferred tax liabilities 10 1,874 2,070 283 644 Total non-current liabilities 28,030 69,195 20,283 63,703

Current liabilities Payables and accruals 17 73,040 16,895 83,003 21,845 Loans and borrowings 16 54,359 45,775 47,662 42,305 Taxation 129 1,050 - - Total current liabilities 127,528 63,720 130,665 64,150 Total liabilities 155,558 132,915 150,948 127,853 Total equity and liabilities 309,896 284,251 287,025 262,806

The notes on pages 122 to 168 are an integral part of these financial statements. 116

• SEG International Bhd • Income Statements for the year ended 31 December 2007

Group Company Note 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Revenue 20 86,263 74,230 21,938 11,722 Cost of services (24,740) (20,943) (2,216) (1,033)

Gross profit 61,523 53,287 19,722 10,689 Other income 4,862 9,772 - 452 Distribution costs (8,831) (6,903) (752) (349) Administration expenses (22,206) (20,738) (3,210) (2,620) Other expenses (26,482) (26,422) (9,090) (4,616)

Results from operating activities 8,866 8,996 6,670 3,556 Interest income 389 15 976 1,763 Finance costs (6,776) (6,143) (6,204) (4,760)

Operating profit 21 2,479 2,868 1,442 559 Share of profit after tax and minority interest of equity accounted associates - - - -

Profit before tax 2,479 2,868 1,442 559 Tax expense 23 2,864 (1,010) 1,981 (492)

Profit for the year 5,343 1,858 3,423 67

Attributable to: Shareholders of the Company 5,156 2,073 3,423 67 Minority interest 187 (215) - -

Profit for the year 5,343 1,858 3,423 67

Basic earnings per ordinary share (sen) 24 6.03 2.37

The notes on pages 122 to 168 are an integral part of these financial statements. 117

• SEG International Bhd • Statement of changes in equity for the year ended 31 December 2007

Attributable to shareholders of the Company Non-Distributable Distributable share share Revaluation treasury Translation retained Minority total N note capital premium reserve shares reserve profits total interest equity Group rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 RM’000 rM’000

At 1 January 2006 89,093 35,876 2,077 (961) - 25,473 151,558 697 152,255 Foreign exchange translation differences - - - - (49) - (49) - (49)

Net gains recognised directly in equity 89,093 35,876 2,077 (961) (49) 25,473 151,509 697 152,206 Profit for the year - - - - - 2,073 2,073 (215) 1,858

Total recognised income and expense for the year 89,093 35,876 2,077 (961) (49) 27,546 153,582 482 154,064 Transfer of retained profit on the realisation of revaluation reserve - - (25) - - 25 - - - Treasury shares acquired - - - (1,546) - - (1,546) - (1,546) Acquisition of minority interest ------80 80 Dividends to shareholders 25 - - - - - (1,262) (1,262) - (1,262)

At 31 December 2006/ 1 January 2007 89,093 35,876 2,052 (2,507) (49) 26,309 150,774 562 151,336 Foreign exchange translation differences - - - - (42) - (42) - (42)

Net gains recognised directly in equity 89,093 35,876 2,052 (2,507) (91) 26,309 150,732 562 151,294 Profit for the year - - - - - 5,156 5,156 187 5,343

Total recognised income and expense for the year 89,093 35,876 2,052 (2,507) (91) 31,465 155,888 749 156,637 Transfer of retained profit on the realisation of revaluation reserve - - (25) - - 25 - - - Treasury shares acquired - - - (1,054) - - (1,054) - (1,054) Dividends to shareholders 25 - - - - - (1,245) (1,245) - (1,245)

At 31 December 2007 89,093 35,876 2,027 (3,561) (91) 30,245 153,589 749 154,338

Note 15 Note 19

The notes on pages 122 to 168 are an integral part of these financial statements. 118

• SEG International Bhd • Statement of changes in equity for the year ended 31 December 2007

Attributable to shareholders of the Company Non-Distributable Distributable share share revaluation treasury retained capital premium reserve shares profits total Company Note rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

At 1 January 2006 89,093 35,876 2,077 (961) 11,609 137,694 Profit for the year - - - - 67 67 Transfer to retained profit on the realisation of revaluation reserve - - (25) - 25 - Treasury shares acquired - - - (1,546) - (1,546) Dividends to shareholders 25 - - - - (1,262) (1,262)

At 31 December 2006/1 January 2007 89,093 35,876 2,052 (2,507) 10,439 134,953 Profit for the year - - - - 3,423 3,423 Transfer to retained profit on the realisation of revaluation reserve - - (25) - 25 - Treasury shares acquired - - - (1,054) - (1,054) Dividends to shareholders 25 - - - - (1,245) (1,245)

At 31 December 2007 89,093 35,876 2,027 (3,561) 12,642 136,077

Note 15 Note 19

The notes on pages 122 to 168 are an integral part of these financial statements. 119

• SEG International Bhd • Cash flow statements for the year ended 31 December 2007

Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000

Cash flows from operating activities

Profit before tax 2,479 2,868 1,442 559 Adjustments for: Amortisation of prepaid lease payments 5 6 - - - Amortisation of development costs 4 120 992 - - Depreciation of property, plant and equipment 3 3,970 4,853 330 533 Depreciation of investment property 6 10 10 10 10 Dividend income - - (5,132) (3,900) Bad debts written off 2,366 6,999 - 183 Allowance for diminution in value on investment in unquoted bonds 400 - 400 - Investment in unquoted bonds written off 2,280 - 2,280 - Allowance for/(write back of) diminution in value on investment in quoted shares 27 (59) - - Investment in associate written off 8 39 - - - Allowance for diminution in value on investment in associate 1,000 145 - - Interest expense 6,826 6,143 6,204 4,760 Interest income (389) (15) (976) (1,763) Loss on disposal of assets held for sale 574 - 574 - (Gain)/Loss on disposal of property, plant and equipment (8) (2,016) - 26 Property, plant and equipment written off 722 337 - 251 Share of profit of equity accounted associates - - - -

Operating profit before working capital changes 20,422 20,257 5,132 659 Change in working capital: Inventories (69) (15) - - Receivables, deposits and prepayments (2,173) 16,157 (4,960) 31,893 Payables and accruals 56,141 (1,361) 61,158 11,949

Cash generated from operations 74,321 35,038 61,330 44,501 Dividend received - - 3,782 2,808 Tax paid (3,706) (2,382) (37) (86) Interest paid (6,826) (6,143) (6,204) (4,760) Interest received 389 15 976 1,763 Tax refunded 1,346 473 - - Net cash generated from operating activities 65,524 27,001 59,847 44,226

The notes on pages 122 to 168 are an integral part of these financial statements. 120

• SEG International Bhd • Cash flow statements for the year ended 31 December 2007

Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000 Cash flows from investing activities Proceeds from disposal of property, plant and equipment 69 70,293 - 1,273 Proceeds from disposal of assets classified as held for sale 12,291 - 12,291 - Proceeds from disposal of unquoted bonds 1,400 - 1,400 - Acquisition of property, plant and equipment i (36,434) (75,546) (28,230) (64,500) Acquisition of quoted shares (940) - - - Purchase of additional interest in existing subsidiaries - (68) - - Acquisition of associate company - (40) - - Net cash used in investing activities (23,614) (5,361) (14,539) (63,227)

Cash flows from financing activities Increase in pledged deposits placed with licensed bank (5,002) (2) - - Dividend paid to shareholders of the Company (1,245) (1,262) (1,245) (1,262) Purchase of treasury shares (1,054) (1,546) (1,054) (1,546) Payment of finance lease liabilities (546) (476) - (48) Term loans repaid (97,870) (26,241) (96,991) - Proceeds from term loans and revolving credit 53,525 25,090 53,525 25,090 Net cash (used in)/generated from financing activities (52,192) (4,437) (45,765) 22,234

Net (decrease)/increase in cash and cash equivalents (10,282) 17,203 (457) 3,233 Cash and cash equivalents at 1 January 2,102 (15,101) (1,614) (4,847) Cash and cash equivalents at 31 December ii (8,180) 2,102 (2,071) (1,614) i) Acquisition of property, plant and equipment During the year, the Group acquired property, plant and equipment with an aggregate cost of RM40,645,000 (2006 - RM75,779,000) of which RM4,211,000 (2006 - RM233,000 ) were acquired by means of finance leases. ii) Cash and cash equivalents Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:

Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000 Cash and bank balances 14 4,103 6,090 591 284 Deposits placed with licensed banks 14 5,049 47 5,000 - Bank overdrafts 6 (12,283) (3,988) (7,662) (1,898) (3,131) 2,149 (2,071) (1,614) Deposits pledged to banks (5,049) (47) - - (8,180) 2,102 (2,071) (1,614)

The notes on pages 122 to 168 are an integral part of these financial statements. 121

• SEG International Bhd • notes to the financial statements for the year ended 31 December 2007

SEG International Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Board of Bursa Malaysia Securities Berhad. The address of its registered office and principal place of business is as follows:

Registered office 5th Floor, SEGi College, Persiaran Kewajipan USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan.

Principal place of business 5th Floor, SEGi College (Malaysia Main Campus) No.9, Jalan Teknologi, Taman Sains Selangor, Kota Damansara PJU 5, 47810 Petaling Jaya, Selangor Darul Ehsan.

The consolidated financial statements as at and for the year ended 31 December 2007 comprise the Company and its subsidiaries (together referred to as the Group) and the Group’s interest in associates. The financial statements of the Company as at and for the year ended 31 December 2007 do not include other entities.

The Company is principally engaged in investment holding, the provision of management consultancy services, property management, rental of premises, business advisory services and the provision of educational and training services while the other Group entities are primarily involved in provision of education and training services, investment holding, management consultancy and property investment.

The financial statements were approved by the Board of Directors on 22 April 2008.

1. Basis of preparation

(a) statement of compliance The financial statements of the Group and of the Company have been prepared in accordance with applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board (MASB), accounting principles generally accepted in Malaysia and the provisions of the Companies Act, 1965. These financial statements also comply with the applicable disclosure provisions of the Listing Requirements of the Bursa Malaysia Securities Berhad.

The MASB has also issued the following FRSs and Interpretations that are effective for annual periods beginning after 1 January 2007 and that have not been applied in preparing these financial statements:

FRSs / Interpretations Effective date FRS 107, Cash Flow Statements 1 July 2007 FRS 111, Construction Contracts 1 July 2007 FRS 112, Income Taxes 1 July 2007

122

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

1. Basis of preparation (continued)

(a) statement of compliance (Continued)

FRSs / Interpretations effective date FRS 118, Revenue 1 July 2007 FRS 120, Accounting for Government Grants and Disclosure of Government Assistance 1 July 2007 Amendment to FRS 121, The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign Operation 1 July 2007 FRS 134, Interim Financial Reporting 1 July 2007 FRS 137, Provisions, Contingent Liabilities and Contingent Assets 1 July 2007 FRS 139, Financial Instruments: Recognition and Measurement To be announced IC Interpretation 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities 1 July 2007 IC Interpretation 2, Members’ Shares in Co-operative Entities and Similar Instruments 1 July 2007 IC Interpretation 5, Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds 1 July 2007 IC Interpretation 6, Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment 1 July 2007 IC Interpretation 7, Applying the Restatement Approach under FRS 129, Financial Reporting in Hyperinflationary Economies 1 July 2007 IC Interpretation 8, Scope of FRS 2 1 July 2007

The Group and the Company plan to apply the rest of the abovementioned FRSs and Interpretations for the annual period beginning 1 January 2008 except for FRS 139, Financial Instruments: Recognition and measurement which the effective date has yet to be announced.

The impact of applying FRS 139 on the financial statements upon first adoption as required by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed by virtue of the exemption given in FRS 139.103AB.

The initial application of the other FRSs and Interpretations are not expected to have any material impact on the financial statements of the Group and the Company.

(b) Basis of measurement The financial statements have been prepared on the historical cost basis except for the following assets and liabilities as explained in their respective accounting policy notes:

• Investment property • Non-current assets held for sale

123

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

1. Basis of preparation (continued)

(c) functional and presentation currency These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated.

(d) use of estimates and judgements The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes:

• Note 4 - valuation of intangible assets • Note 6 - valuation of investment property • Note 9 - valuation of investment in quoted shares and unquoted bonds • Note 10 - recognition of unutilised tax losses and capital allowances

2. significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financial statements, and have been applied consistently by Group entities, unless otherwise stated.

Certain comparative amounts have been reclassified to conform to the current year’s presentation (see note 33).

(a) Basis of consolidation

(i) subsidiaries Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Subsidiaries are consolidated using the purchase method of accounting.

Under the purchase method of accounting, the financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses, unless the investment is classified as held for sale (or included in a disposal group that is classified as held for sale).

124

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

2. significant accounting policies (continued)

(a) Basis of consolidation (Continued)

(ii) associates Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies.

Associates are accounted for in the consolidated financial statements using the equity method unless it is classified as held for sale (or included in a disposal group that is classified as held for sale).

The consolidated financial statements include the Group’s share of the income and expenses of the equity accounted associates, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.

When the Group’s share of losses exceeds its interest in an equity accounted associate, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

Investments in associates are stated in the Company’s balance sheet at cost less impairment losses, unless the investment is classified as held for sale (or included in a disposal group that is classified as held for sale).

(iii) Minority interest Minority interest at the balance sheet date, being the portion of the net identifiable assets (excluding goodwill) of subsidiaries attributable to equity interests that are not owned by the Company, whether directly or indirectly through subsidiaries, are presented in the consolidated balance sheet and statement of changes in equity within equity, separately from equity attributable to the equity shareholders of the Company. Minority interest in the results of the Group are presented on the face of the consolidated income statement as an allocation of the total profit or loss for the year between minority interest and the equity shareholders of the Company.

Where losses applicable to the minority exceed the minority’s interest in the equity of a subsidiary, the excess, and any further losses applicable to the minority, are charged against the Group’s interest except to the extent that the minority has a binding obligation to, and is able to, make additional investment to cover the losses. If the subsidiary subsequently reports profits, the Group’s interest is allocated with all such profits until the minority’s share of losses previously absorbed by the Group has been recovered.

(iv) transactions eliminated on consolidation Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

125

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

2. significant accounting policies (continued)

(b) foreign currency

(i) foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transaction.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the income statement.

(i) recognition and measurement Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets includes the cost of materials and direct labour and, for qualifying assets, borrowing costs are capitalised in accordance with the Group’s accounting policy. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at acquisition date. The fair value of property is the estimated amount for which a property could be exchanged between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment is based on the quoted market prices for similar items.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted foras separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within “other income” or “other expenses” respectively in the income statements.

(ii) reclassification to investment property Property that is being constructed for future use as investment property is accounted for as property, plant and equipment until construction or development is complete, at which time it is remeasured to fair value and reclassified as investment property. Any gain or loss arising on remeasurement is recognised in the income statement.

126

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

2. significant accounting policies (continued)

(iii) subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of those parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.

(iv) depreciation Depreciation is recognised in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows:

• Buildings 50 years or lease period • Computer hardware and software 4 - 5 years • Plant and equipment 4 - 10 years • Fixtures, fittings and office equipment 3 - 10 years • Library books and manuals 3 - 10 years

The depreciable amount is determined after deducting the residual value.

Depreciation methods, useful lives and residual values are reassessed at the balance sheet date.

(d) leased assets

(i) finance lease Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

127

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

2. significant accounting policies (continued)

(d) leased assets (Continued)

(ii) operating lease Other leases are operating leases and, the leased assets are not recognised on the Group’s balance sheet.

Leasehold land that normally has an indefinite economic life and title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted for as prepaid lease payments. The estimated useful life for the leasehold land is 779 years.

Payments made under operating leases are recognised in the income statements on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

(e) intangible assets

(i) Goodwill Goodwill arises on business combinations and is measured at cost less any accumulated impairment losses.

For acquisitions prior to 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the fair values of the net identifiable assets and liabilities.

With the adoption of FRS 3 beginning 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.

Any excess of the Group’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in income statements.

(ii) research and development Development expenditure consists of direct costs incurred, net of income of trial courses, to develop new curriculum to be submitted to the Ministry of Education and Lembaga Akreditasi Negara for approval and direct costs related to the development of educational courses.

Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses.

(iii) subsequent expenditure Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

(iv) amortisation Goodwill and intangible assets with indefinite useful lives are tested for impairment annually and whenever there is an indication that they may be impaired.

Other intangible assets are amortised from the date that they are available for use. Amortisation of intangible assets is charged to the income statements on a straight-line basis over the estimated useful lives of intangible assets. The estimated useful life of the development costs is 5 years. 128

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

2. significant accounting policies (continued)

(f) investments in debt and equity securities

Investments in debt and equity securities are recognised initially at fair value plus attributable transaction costs.

Subsequent to initial recognition:

• Investments in non-current equity securities other than investments in subsidiaries, associates and jointly-controlled entities, are stated at cost less allowance for diminution in value,

• Investments in non-current debt securities are stated at amortised cost using the effective interest method less allowance for diminution in value,

• All current investments are carried at the lower of cost and market value, determined on an aggregate portfolio / individual investment basis by category of investments.

Where in the opinion of the Directors, there is a decline other than temporary in the value of non-current equity securities and non- current debt securities other than investment in subsidiaries, associates and jointly-controlled entities, the allowance for diminution in value is recognised as an expense in the financial year in which the decline is identified.

On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the income statement.

All investments in debt and equity securities are accounted for using settlement date accounting. Settlement date accounting refers to:

a) the recognition of an asset on the day it is received by the entity, and

b) the derecognition on an asset and recognition of any gain or loss on disposal on the date it is delivered.

(g) investments property

Investment property carried at cost Investment properties are properties which are owned to earn rental income or for capital appreciation or for both. These include land (other than leasehold land) held for a currently undetermined future use. Properties that are occupied by the companies in the Group are accounted for as owner-occupied rather than as investment properties.

Investment properties are stated at cost less any accumulated depreciation and any accumulated impairment losses, consistent with the accounting policy for property, plant and equipment as stated in accounting policy note 2(c).

Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of 50 to 80 years for buildings. Freehold land is not depreciated.

The Directors value its property based on comparable market price provided in the market for disclosure in the financial statements. The fair values are based on market values, being the estimated amount for which a property could be exchanged for on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion. 129

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

2. significant accounting policies (continued)

(h) inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(i) receivables

Receivables are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is established.

Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.

Receivables are not held for the purpose of trading.

(j) non-current assets held for sale

Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale.

Immediately before classification as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group’s accounting policies. Thereafter generally the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell.

Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, and investment property, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in the income statement. Gains are not recognised in excess of any cumulative impairment loss.

(k) cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in value. For the purpose of the cash flow statement, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.

130

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

2. significant accounting policies (continued)

(l) impairment of assets

The carrying amounts of assets except for inventories /deferred tax assets/ assets arising from employee benefits/ non-current assets (or disposal groups) classified as held for sale are reviewed at each reporting date to determine whether there isany indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated at each reporting date.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).

An impairment loss is recognized in the income statement if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount unless the asset is carried at a revalued amount, in which case the impairment loss is recognised directly against any revaluation surplus for the asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same asset. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to the income statement in the year in which the reversals are recognised, unless it reverses an impairment loss on a revalued asset, in which case it is credited directly to revaluation surplus. Where an impairment loss on the same revalued asset was previously recognised in the income statement, a reversal of that impairment loss is also recognised in the income statement.

(m) Share capital

Repurchase of share capital When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity and is not re-valued for subsequent changes in the fair value or market price of shares. Repurchased shares that are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total equity.

131

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

2. significant accounting policies (continued)

(n) loans and borrowings

Loans and borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statements over the period of the loans and borrowings using the effective interest method.

(o) employee benefits

(i) short-term employee benefits Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

The Group’s contribution to statutory pension funds are charged to the income statements in the year to which they relate. Once the contributions have been paid, the Group has no further payment obligations.

(ii) share-based payment transactions The grant date fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the options. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest.

(p) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Contingent liabilities Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

132

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

2. significant accounting policies (continued)

(q) Payables

Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation to deliver cash or another financial asset to another entity.

(r) revenue

(i) services Revenue is recognised in the income statement when the services are rendered to the customers, net of discounts. These comprise course fees, examination fees and management fees. Course fees and management fees are recognised in the income statement on a straight line basis over the duration of the course or service.

(ii) Goods sold Revenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.

(iii) rental income Rental income from investment property is recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

(iv) dividend income Dividend income is recognised in the income statement when the right to receive payment is established.

(s) interest income and borrowing costs

Interest income is recognised as it accrues, using the effective interest method.

All borrowing costs are recognised in the income statement using the effective interest method, in the period in which they are incurred except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use.

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.

133

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

2. significant accounting policies (continued)

(t) tax expense

Tax expense comprises current and deferred tax. Tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit (tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax liability is recognised for all taxable temporary differences.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(u) earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

134

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

3. Property, plant and equipment

computer furniture, library software fittings books capital Group freehold and Motor Plant and and office and work-in- N note land Buildings hardware vehicles equipment equipment manuals progress total Cost rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

At 1 January 2006 11,178 75,218 11,345 2,087 2,316 30,081 2,529 71,542 206,296 Effect of adopting FRS 117 5 - (4,963) ------(4,963)

At 1 January 2006, restated 11,178 70,255 11,345 2,087 2,316 30,081 2,529 71,542 201,333 Additions - - 416 180 41 3,531 197 71,414 75,779 Reclassification 41,620 ------(41,620) - Disposals (44,671) (21,808) (7) (257) - (6,427) - - (73,170) Transfer to assets held for sale 13 - (13,750) ------(13,750) Write off - - - - (77) (470) - - (547)

At 31 December 2006/ 1 January 2007 8,127 34,697 11,754 2,010 2,280 26,715 2,726 101,336 189,645 Additions - - 1,206 206 - 8,475 410 30,348 40,645 Disposals - - (62) (168) - (194) - - (424) Transfer to assets held for sale 13 - (15,137) - - - - - (117,517) (132,654) Write off - - - - - (2,566) - - (2,566) Reclassification (3,877) 3,877 ------

At 31 December 2007 4,250 23,437 12,898 2,048 2,280 32,430 3,136 14,167 94,646

Representing items at: Cost - 23,337 12,898 2,048 2,280 32,430 3,136 14,167 90,296 Directors’ valuation - 1993 4,250 100 ------4,350

4,250 23,437 12,898 2,048 2,280 32,430 3,136 14,167 94,646

Accumulated Depreciation

At 1 January 2006 821 2,421 9,812 1,142 1,781 15,714 1,988 - 33,679 Effect of adopting FRS 117 ------

At 1 January 2006, restated 821 2,421 9,812 1,142 1,781 15,714 1,988 - 33,679 Depreciation for the year 78 602 918 350 6 2,589 310 - 4,853 Disposals - (853) (3) (166) - (3,871) - - (4,893) Transfer to asset held for sale 13 - (885) ------(885) Write off - - - - - (210) - - (210)

At 31 December 2006/ 1 January 2007 899 1,285 10,727 1,326 1,787 14,222 2,298 - 32,544

135

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

3. Property, plant and equipment (continued)

computer furniture, library software fittings books capital Group freehold and Motor Plant and and office and work-in- N note land Buildings hardware vehicles equipment equipment manuals progress total rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

Accumulated Depreciation

At 31 December 2006/ 1 January 2007 899 1,285 10,727 1,326- 1,787 14,222 2,298 - 32,544 Depreciation for the year 78 341 638 254 - 2,474 185 - 3,970 Disposals - - (60) (159) - (144) - - (363) Write off - - - - - (1,844) - - (1,844) Reclassification (977) 977 ------

At 31 December 2007 - 2,603 11,305 1,421 1,787 14,708 2,483 - 34,307

Carrying amounts

At 1 January 2006 10,357 67,834 1,533 945 535 14,367 541 71,542 167,654 At 31 December 2006/ 1 January 2007 7,228 33,412 1,027 684 493 12,493 428 101,336 157,101

At 31 December 2007 4,250 20,834 1,593 627 493 17,722 653 14,167 60,339

136

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

3. Property, plant and equipment (continued)

computer furniture, library software fittings books capital Company freehold and Motor and office and work-inland Buildings hardware vehicles equipment manuals progress total Cost note rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

At 1 January 2006 8,127 30,464 1,726 638 1,773 4 25,542 68,274 Additions - - 15 - 704 - 63,781 64,500 Disposals - (1,469) - - (37) - - (1,506) Transfer to assets held for sale 13 - (13,750) - - - - - (13,750) Write off - - - - (445) - - (445)

At 31 December 2006/1 January 2007 8,127 15,245 1,741 638 1,995 4 89,323 117,073 Additions - - 32 - 4 - 28,194 28,230 Transfer to assets held for sale 13 - (15,137) - - - - (117,517) (132,654) Reclassification (3,877) 3,877 ------

At 31 December 2007 4,250 3,985 1,773 638 1,999 4 - 12,649

Representing items at: Cost - 3,885 1,773 638 1,999 4 - 8,299 Directors’ valuation - 1993 4,250 100 - - - - - 4,350

4,250 3,985 1,773 638 1,999 4 - 12,649

Accumulated Depreciation

At 1 January 2006 822 929 1,575 550 699 3 - 4,578 Depreciation for the year 78 158 65 79 153 - - 533 Disposals - (192) - - (15) - - (207) Transfer to assets held for sale 13 - (885) - - - - - (885) Write off - - - - (194) - - (194)

At 31 December 2006/1 January 2007 900 10 1,640 629 643 3 - 3,825 Depreciation for the year 78 3 49 9 191 - - 330 Reclassification (978) 978 ------

At 31 December 2007 - 991 1,689 638 834 3 - 4,155

Carrying amounts

At 1 January 2006 7,305 29,535 151 88 1,074 1 25,542 63,696

At 31 December 2006/1 January 2007 7,227 15,235 101 9 1,352 1 89,323 113,248

At 31 December 2007 4,250 2,994 84 - 1,165 1 - 8,494

137

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

3. Property, plant and equipment (continued)

3.1 revaluation It is the Group’s policy to state property, plant and equipment at cost.

Certain freehold land and buildings of the Group are stated at Directors’ valuation based on a professional valuation on open market basis conducted in December 1993. The surplus arising on revaluation has been taken to revaluation reserve.

In accordance with the transitional provisions issued by the Malaysian Accounting Standard Board (“MASB”) on the adoption of FRS 116 Property, Plant and Equipment, the valuation of these assets have not been updated and they continue to be stated at their existing carrying amounts less accumulated depreciation.

The Directors are of the view that the current market values of the revalued properties are not less than their net book values as at 31 December 2007.

Had the freehold land and buildings been carried at historical cost less accumulated depreciation, the carrying amount of the revalued assets that would have been included in the financial statements at the end of the year are as follows:

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Freehold land 4,250 4,250 4,250 4,250 Apartments 97 98 97 98 4,347 4,348 4,347 4,348

The cost and carrying amount of freehold land is not segregated from buildings as the required records are not available.

3.2 security At 31 December 2007, certain land and buildings, including capital work-in-progress of the Group and of the Company with the cost of RM35,004,000 (2006 - RM117,682,000) and RM8,127,000 (2006 - RM106,412,000), respectively are charged to banks as security for borrowings (see Note 16).

3.3 Borrowing costs Included in capital work-in-progress of the Company is interest capitalised at rate of 4.65% (2006 - 4.65%) per annum for the year of RM995,000 (2006 - RM1,447,835).

3.4 assets under hire purchase The net carrying amount of property, plant and equipment of the Group as at year end held under hire purchase agreements amounted to RM4,696,000 (2006 - RM716,000).

138

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

4. intangible assets

Development Group Goodwill costs total Cost RM’000 RM’000 RM’000

At 1 January 2006 37,527 5,541 43,068 Acquisition through business combination 149 - 149 Effect of movement in exchange rates - (50) (50) At 31 December 2006/1 January 2007 37,676 5,491 43,167 Effect of movement in exchange rates - (38) (38) At 31 December 2007 37,676 5,453 43,129

Accumulated amortisation

At 1 January 2006 7,869 3,983 11,852 Amortisation for the year - 992 992

At 31 December 2006/1 January 2007 7,869 4,975 12,844 Amortisation for the year - 120 120 At 31 December 2007 7,869 5,095 12,964

Carrying amounts

At 1 January 2006 29,658 1,558 31,216 At 31 December 2006/1 January 2007 29,807 516 30,323 At 31 December 2007 29,807 358 30,165

With effect from 1 January 2006, the Group no longer amortises goodwill on consolidation. Such goodwill is tested annually for impairment, including in the year of its initial recognition, as well as when there are indications of impairment. Impairment losses are recognised when the carrying amount of the cash generating unit to which the goodwill has been allocated exceeds its recoverable amount. Impairment loss is recognised in the income statement and subsequent reversal is not allowed.

Impairment testing for cash-generating units containing goodwill For the purpose of impairment testing, goodwill is allocated to groups of companies acquired (“the Units”) at which the goodwill is monitored for internal management purposes.

The recoverable amount for the above is based on value in use calculations using cash flow projections covering a five-year period approved by the management.

139

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

4. intangible assets (continued)

The following describes the key assumptions on which management has based its cash flow projections to undertake impairment testing of goodwill:

• There will be no material changes in the structure and principal activities of the Group.

• There will not be any significant increase in the labour costs, adverse changes in the economic conditions or other abnormal factors, which will adversely affect the operations of the Units.

• Statutory income tax rate - the rate for Malaysia is 27% for current year, 26% for year 2008 and thereafter 25%.There will be no material changes in the present legislation or regulations, rates of duties, levies and taxes affecting the Units’s activities.

• Discount rate of 8% is applied in determining the recoverable amounts of the Units. The discount rate was estimated based on the Group’s existing rate of borrowings.

5. Prepaid lease payments

unexpired period more than 50 years Group total note rM’000 Cost At 1 January 2006 - Effect of adopting FRS 117 3 4,963 At 31 December 2006/1 January 2007, restated 4,963 At 31 December 2007 4,963

Accumulated amortisation

At 1 January 2006 - Effect of adopting FRS 117 3 - At 31 December 2006/1 January 2007, restated - Amortisation for the year 6 At 31 December 2007 6

Carrying amounts

At 1 January 2006 4,963 At 31 December 2006/1 January 2007 4,963 At 31 December 2007 4,957

140

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

5. Prepaid lease payments (continued)

5.1 security

At 31 December 2007, the leasehold land has been charged to a licensed bank to secure banking facilities granted to the Group (see Note 16).

6. investment property

Apartment Group and Company Cost rM’000 At 1 January 2006 643 At 31 December 2006/1 January 2007/31 December 2007 643

Accumulated Depreciation At 1 January 2006 101 Depreciation for the year 10 At 31 December 2006/1 January 2007 111 Depreciation for the year 10 At 31 December 2007 121

Carrying amounts At 1 January 2006 542 At 31 December 2006/1 January 2007 532 At 31 December 2007 522

The Directors estimate the fair value of investment property based on comparable market value of similar property. Based on Directors’ estimation, the fair value of the apartment is RM684,000.

7. investment in subsidiaries Company 2007 2006 rM’000 rM’000 At Cost : Unquoted shares 71,366 71,366 Less: Impairment loss (425) (425) 70,941 70,941

141

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

7. investment in subsidiaries (continued)

Details of subsidiaries are as follows: Effective ownership interest Name of subsidiary 2007 2006 Principal activities

SEGi College (KL) Sdn. Bhd. 100% 100% Provision of professional, commercial and academic education.

SEGi College of Technology (KL) Sdn. Bhd. 100% 100% Provision of computer training, commercial and academic education.

SEGi College (PJ) Sdn. Bhd. 100% 100% Provision of professional, commercial and academic education.

SEGi College (PG) Sdn. Bhd. 100% 100% Provision of professional, commercial and academic education.

SMRC Learning Alliance Sdn. Bhd. 100% 100% Provision of educational and training services.

SBT Professional Publications Sdn. Bhd. 100% 100% Operation of a book centre, dealing in all kinds of reading material, information research and related business.

SEG Equity Sdn. Bhd. 100% 100% Investment holding.

SMRC Learning Alliance (EM) Sdn. Bhd. * 100% 100% Provision of management consultancy services and investment holding.

Shaw Commercial Institution Sdn. Bnd. 100% 100% Investment property holding.

Agensi Pekerjaan Job Venture Sdn. Bhd. 100% 100% Provision of job placement consultancy services.

SEG International Group Sdn. Bhd. 100% 100% Provision of training and education services.

SMRC Learning Alliance (PG) Sdn. Bhd. 100% 100% Dormant.

142

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

7. investment in subsidiaries (continued)

Details of subsidiaries are as follows: Effective ownership interest Name of subsidiary 2007 2006 Principal activities

SEGi Holdings Sdn. Bhd. 100% 100% Investment holding and (formerly known as Berrington Bay management consultancy. Corporation Sdn. Bhd.)

Prestige Front Sdn. Bhd. 100% 100% Property investment and property management.

SEGi College (M) Sdn. Bhd. 100% 100% Provision of professional, (formerly known as SEGi College commercial and academic (SJ) Sdn. Bhd.) education.

SMRC Learning Alliance (KL) Sdn. Bhd.* 100% 100% Provision of educational and training services.

SEGi College (Sarawak) Sdn. Bhd.* 100% 100% Operation of an educational institution for further studies.

IFPA Resources Sdn. Bhd. 100% 100% Provision of financial planning and financial related courses.

Summit Education Sdn. Bhd. 98.63% 98.63% Investment holding and management consultancy.

SEGi College (Subang Jaya) Sdn. Bhd. 98.63% 98.63% Operation of an institute (formerly known as Premier providing educational Media Sdn. Bhd.) programmes.

Binary Mark Sdn. Bhd. 98.63% 98.63% Property investment.

Summit Multimedia Education 73.97% 73.97% Operation of an institute Sdn. Bhd. providing educational programmes.

Summit Early Childhood 100% 100% Provision of child educational Edu-Care Sdn. Bhd. * and related services.

Pusat Kemahiran Maju Ria Sdn. Bhd.* 100% 100% Provision of educational and training services.

Summit Early Childhood 70% 70% Provision of child educational Edu-Care (Rawang) Sdn. Bhd.* and related services.

143

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

7. investment in subsidiaries (continued)

Details of subsidiaries are as follows: Effective ownership interest Name of subsidiary 2007 2006 Principal activities

Prim Edu-Services Sdn. Bhd. 100% 100% Investment holding.

SMRC Learning Alliance (PJ) Sdn. Bhd. 100% 100% Provision of educational and training services.

Sino-Malaysia EduCulture 100% 100% Provision of cross border Centre Sdn. Bhd. education and culture activities.

SEGi College Training Centre (Kuching) Sdn. Bhd.* 100% 100% Operation of a training centre (formerly known as for vocational and professional Taska Sri Emas Sdn. Bhd) courses.

Worldwide Accreditation Ltd* # 100% 100% Provision of licensing and accreditation of education programmes.

Systematic Training Network Sdn. Bhd. 70% 70% Provision of education services.

SEGi Unisel Sdn. Bhd. * 42% 42% Recruitment and placement of students.

SEG International Training Sdn. Bhd. * 51% 51% Provision of services in information and computer technologies.

SEGi Skills Development & 100% 100% Provision of training services. Placement Services Sdn. Bhd. *

SEGi Youth Training Sdn. Bhd. * 100% 100% Provision of training services.

SEGi Methods Sdn. Bhd.* 70% 70% Investment holding.

SEGi Jobs Sdn. Bhd.* 100% 100% Dormant.

CEPI Resources (Selangor) Sdn. Bhd.* 49% 49% Provide training services for environment management and protection.

SEGi-IGS Sdn. Bhd.* 70% 70% Provision of education services.

All subsidiaries are incorporated in Malaysia except where indicated.

* Not audited by KPMG # Incorporated in the Republic of Mauritius. 144

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

8. investments in associates Group 2007 2006 RM’000 RM’000 At cost: Unquoted shares 2,080 2,040 Acquisition during the year - 40 Written off during the year (39) - Share of post-acquisition reserves 88 88 Goodwill amortised (278) (278) Allowance for diminution in value on investment in associate (1,145) (145) 706 1,745

Represented by: Group’s share of net assets other than goodwill 388 427 Goodwill on acquisition, less amortization & impairment 318 1,318 706 1,745

The associates of the Group are as follows: Effective Principal Ownership Country Activities Interest 2007 2006 % % Palm Leisure Sdn. Bhd.* Malaysia Dormant 30.00 30.00 Upward Portfolio Sdn. Bhd.* Malaysia Dormant - 39.45 My Training Providers Sdn. Bhd.* Malaysia Dormant 40.00 40.00

* Not audited by KPMG

9. other investments Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Non-current At cost: Quoted shares (see note 27.1) 3,910 2,970 - - Unquoted bonds 6,000 6,000 6,000 6,000 Bonds redemption (1,400) - (1,400) - Allowance for diminution in value (400) - (400) - Written off (2,280) - (2,280) - 1,920 6,000 1,920 6,000 5,830 8,970 1,920 6,000

145

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

9. other investments (continued) Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Market value Quoted shares 1,643 775 - - Current At cost: Quoted shares 147 174 - - Market value Quoted shares 147 174 - -

10. deferred tax assets and liabilities

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net 2007 2006 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Group Property, plant and equipment - capital allowances 2,484 10 (1,591) (1,714) 893 (1,704) - revaluation - - (283) (356) (283) (356) Provisions 49 49 - - 49 49 Tax loss carry-forwards 474 1,039 - - 474 1,039 Tax assets/(liabilities) 3,007 1,098 (1,874) (2,070) 1,133 (972)

Company Property, plant and equipment - capital allowances 2,469 - - (356) 2,469 (356) - revaluation - - (283) (288) (283) (288) Tax assets/(liabilities) 2,469 - (283) (644) 2,186 (644)

146

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

10. deferred tax assets and liabilities (continued)

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

Group 2007 2006 RM’000 RM’000 Tax loss carry-forwards 561 337 Unabsorbed capital allowance 800 10 1,361 347

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom. Unutilised tax loss carry-forwards and unutilised capital allowance carry-forwards amounting to RM561,000 and RM800,000 will not be available to the Group if there is substantial change in shareholders (more than 50%).

Movement in temporary differences during the year

recognised recognised in income in income At statement at statement at 1.1.2006 (Note 23) 31.12.2006 (Note 23) 31.12.2007 RM’000 rM’000 rM’000 rM’000 rM’000 Group Property, plant and equipment - capital allowances (2,011) 307 (1,704) 2,597 893 - revaluation (294) (62) (356) 73 (283) Provision 112 (63) 49 - 49 Tax losses carried forward 264 775 1,039 (565) 474 (1,929) 957 (972) 2,105 1,133

Company Property, plant and equipment - capital allowances (405) 49 (356) 2,825 2,469 - revaluation (294) 6 (288) 5 (283) (699) 55 (644) 2,830 2,186

147

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

11. receivables, deposits and prepayment Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Non current Other receivables 18,165 9,600 - -

Current Trade Trade receivables 17,250 16,541 959 -

Non Trade Other receivables, deposits and prepayments 21,681 31,051 15,180 16,184 Amount due from subsidiaries - - 45,935 40,833 Amount due from associate 3 3 3 3 Amount due from affiliated companies 1,125 1,222 1,125 1,222

40,059 48,817 63,202 58,242

11.1 The amounts due from subsidiaries are unsecured, interest free and repayable on demand except for advances to certain subsidiaries amounting to RM43,490,000 (2006 - RM33,316,000), which bear interest at rates ranging from 1.00% to 8.50% (2006 – 3.00% to 8.50%) per annum.

11.2 Included in the Group and the Company’s prepayment is an interest prepaid of RM142,000 (2006 - RM442,000) on term loan. The prepayment will be amortised over the period of the term loan of five (5) years.

11.3 Included in the Group’s non-current other receivables is the amounts due from a guarantor of RM2,180,000 and RM1,000,000 on the profit guarantee for the acquisition of subsidiaries in prior years. The guarantor has undertaken to settle the outstanding amounts by monthly instalments of RM100,000 commencing end January 2008.

11.4 Included in the Group’s non current and current other receivables are amounts due from former subsidiaries of RM12,295,000 (2006 - RM9,600,000) and RM1,375,000 (2006 – RM4,070,000) respectively. The buyer of the disposed subsidiaries has undertaken to assume these debts and to settle them by instalments, provision of future training services and contra with certain leasehold properties located in East Malaysia.

12. inventories

Inventories comprise text books and manuals, which are stated at cost.

148

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

13. assets classified as held for sale

Prepaid lease payments and buildings are classified as held for sale upon the execution of the Sales and Purchase Agreement to dispose of these properties. The completion of the sales is pending the payments of the remaining purchase price by the purchaser. The sales is completed subsequent to year end (see note 34).

Details are as follows: Group and C company note 2007 2006 rM’000 rM’000

At cost: Prepaid lease payments 3 14,960 - Buildings 3 117,694 12,865

132,654 12,865

14. cash and cash equivalents Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Cash and bank balances 4,103 6,090 591 284 Deposits placed with licensed banks 5,049 47 5,000 -

9,152 6,137 5,591 284

Deposits in the Group and the Company of RM5,049,000 and RM5,000,000 (2006 - RM47,000 and nil) have been pledged to licensed banks for banking facilities granted to the Group and to the Company as disclosed in Note 16.

15. equity

Share capital Group and Company number number amount of shares amount of shares 2007 2007 2006 2006 rM’000 ‘000 rM’000 ‘000

Authorised: Ordinary shares of RM1 each 100,000 100,000 100,000 100,000

Issued and fully paid: Ordinary shares of RM1 each 89,093 89,093 89,093 89,093

149

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

15. equity (continued)

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. In respect of the Company’s treasury shares that are held by the Group (see below), all rights are suspended until those shares are reissued.

Translation reserve The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Revaluation reserve The revaluation reserve relates to the revaluation of property, plant and equipment prior to its reclassification as investment property.

Treasury shares The shareholders of the Company, by an ordinary resolution passed in a general meeting held on 21 June 2007, approved the renewal of Company’s plan to repurchase its own shares. The Directors of the Company are committed to enhancing the value of the Company to its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders.

During the financial year, the Company repurchased 1,331,800 (2006 - 1,854,600) of its issued share capital from the open market. The average price paid for the shares repurchased was RM0.79 (2006 - RM0.83) per share. The repurchase transactions were financed by internally generated funds. The shares repurchased were retained as treasury shares.

Section 108 tax credit Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit and tax exempt income to frank all of its distributable reserves at 31 December 2007 if paid out as dividends.

The Malaysian Budget 2008 introduced a single tier company income tax system with effect from year of assessment 2008. As such, the Section 108 tax credit as at 31 December 2007 will be available to the Company until such time the credit is fully utilised or upon expiry of the six-year transitional period on 31 December 2013, whichever is earlier.

16. loans and borrowings

This note provides information about the contractual terms of the Group’s and Company’s interest bearing loans and borrowings. For more information about the Group’s and the Company’s exposure to interest rate, see Note 27.

Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Non-current Secured term loans 3,212 46,786 - 43,059 Unsecured term loan 20,000 20,000 20,000 20,000 Finance lease liabilities 2,944 339 - -

26,156 67,125 20,000 63,059

150

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

16. loans and borrowings (continued)

Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Current Secured term loans 520 1,291 - 407 Secured revolving credit 40,000 - 40,000 - Unsecured term loan - 40,000 - 40,000 Bank overdraft - secured 11,711 3,988 7,177 1,898 Bank overdraft - unsecured 572 - 485 - Finance lease liabilities 1,556 496 - -

54,359 45,775 47,662 42,305

Term loans and bank overdrafts The secured term loans and bank overdrafts of subsidiaries are charged against the leasehold land and building, a debenture incorporating fixed and floating charge over all the assets, properties and undertakings of a subsidiary and corporate guarantee given by the Company.

The secured bank overdraft of the Company is charged against the freehold land and building of the Company and certain buildings of a subsidiary.

The term loans and bank overdrafts are subject to interest at rates ranging from 4.65% to 8.75% (2006 - 4.65% to 8.75%) and 7.00% to 9.25% (2006 – 7.00% to 9.25%) per annum.

Revolving credits The revolving credit of the Company is secured by pledge of fixed deposit of RM5,000,000 and the proceeds from the disposal of prepaid lease payments and buildings as stated in Note 13. Revolving credits are subject to interest rate of 2.00% per annum above the bankers’ cost of funds.

Finance lease liabilities Finance lease liabilities of the Group are subject to interest at rates ranging from 2.08% to 5.85% (2006 - 3.00% to 5.85%).

151

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

16. loans and borrowings (continued)

Terms and debt repayment schedule 2007 2006 Group Carrying under 1 1-2 2-5 over 5 carrying under 1 1-2 2-5 over 5 Amount year years years years amount year years years years RM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

Secured term loans 3,732 520 295 1,009 1,908 48,077 1,291 1,262 11,297 34,227 Secured revolving credit 40,000 40,000 ------Unsecured term loans 20,000 - 20,000 - - 60,000 40,000 - 20,000 - Secured bank overdrafts 11,711 11,711 - - - 3,988 3,988 - - - Unsecured bank overdrafts 572 572 ------Finance lease liabilities 4,500 1,556 1,325 1,601 18 835 496 194 145 -

80,515 54,359 21,620 2,610 1,926 112,900 45,775 1,456 31,442 34,227

2007 2006 Company Carrying under 1 1-2 2-5 over 5 carrying under 1 1-2 2-5 over 5 Amount year years years years amount year years years years RM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

Secured term loans - - - - - 43,466 407 731 10,352 31,976 Secured revolving credit 40,000 40,000 ------Unsecured term loans 20,000 - 20,000 - - 60,000 40,000 - 20,000 - Secured bank overdrafts 7,177 7,177 - - - 1,898 1,898 - - - Unsecured bank overdrafts 485 485 ------

67,662 47,662 20,000 - - 105,364 42,305 731 30,352 31,976

152

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

16. loans and borrowings (continued)

Finance lease liabilities

Finance lease liabilities are payable as follows:

Minimum Minimum lease lease payments interest Principal payments interest Principal 2007 2007 2007 2006 2006 2006 Group RM’000 rM’000 rM’000 rM’000 rM’000 rM’000

Less than one year 1,824 (268) 1,556 529 (33) 496 Between one and five years 3,175 (249) 2,926 385 (46) 339 More than five years 18 - 18 - - -

5,017 (517) 4,500 914 (79) 835

17. Payables and accruals Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Trade 1,095 1,028 - -

Non Trade Other payables and accrued expenses 71,945 15,867 62,537 6,905 Amount due to subsidiaries - - 20,466 14,940

73,040 16,895 83,003 21,845

17.1 The amounts due to subsidiaries are unsecured, interest free and repayable on demand.

17.2 Included in other payables and accrued expenses of the Group is an amount of RM631,000 (2006 - RM1,185,000) which represents course fees received in advance.

17.3 Included in other payables and accrued expenses of the Group are amounts owing to contractors of RM1,072,000 (2006 - RM4,139,000) for the construction of a campus.

17.4 Included in other payables and accrued expenses of the Group and the Company is partial deposit of RM59,223,000 (2006 - Nil) received from the purchaser for the disposal of the prepaid lease payments and buildings by the Company as disclosed in Note 13.

153

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

18. eMPloyee benefits

Share option plan The Group offers vested share options over ordinary shares to Executive Directors and employees with more than one year service. Movements in the number of share options held by employees are as follows: Group and Company 2007 2006 ’000 ’000

Outstanding at 1 January 2,250 2,250 Exercised - - Lapsed (2,250) -

Outstanding at 31 December - 2,250

The ESOS expired on 14 January 2007.

19. treasury shares - at cost Group and Company 2007 2007 2006 2006 number Number of shares of shares ’000 rM’000 ’000 rM’000

Ordinary shares of RM1.00 each At 31 December 4,238 3,561 2,907 2,507

During the financial year, the Company repurchased 1,331,800 (2006 - 1,854,600) ordinary shares of its issued share capital from the open market. The average price paid for the shares bought back was RM0.79 (2006 - RM0.83) per ordinary share. The share buy back transactions were financed by internally generated funds. The shares bought back are held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

20. revenue Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Services 84,989 72,185 4,724 1,507 Management fee - - 3,206 2,353 Rental income 756 1,503 8,876 3,962 Sales of manuals 518 542 - - Dividend income - - 5,132 3,900

86,263 74,230 21,938 11,722

154

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

21. oPerating profit

Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Operating profit is arrived at after charging: Allowance for diminution in value on investment in unquoted bonds 400 - 400 - Investment in unquoted bonds written off 2,280 - 2,280 - Amortisation of development costs 120 992 - - Auditors’ remuneration: - Statutory audit - KPMG 139 120 28 25 - Other auditors 29 24 - - Allowance for diminution in value on investment in associate 1,000 145 - - Allowance for diminution in value on investment in quoted shares 27 - - - Bad debts written off 2,366 6,999 - 183 Depreciation of property, plant and equipment 3,970 4,853 330 533 Depreciation of investment property 10 10 10 10 Amortisation of prepaid lease payments 6 - - - Investment in associate written off 39 - - - Interest expense on: - Bank overdraft 267 853 69 256 - Loans 6,377 5,177 6,135 4,493 - Other borrowings 182 113 - 11 Loss on disposal of property, plant and equipment - - - 26 Loss on disposal of assets held for sale 574 - 574 - Property, plant and equipment written off 722 337 - 251 Personnel expenses (including key management personnel): - Contributions to Employees Provident Fund 2,502 2,255 202 129 - Wages, salaries and others 25,421 19,216 1,463 905 Rental expense on land and buildings - 2,990 - 79 Rental of equipment 418 293 - -

After crediting: Gross dividends from: - Unquoted subsidiaries - - 5,132 3,900 Rental income on land and buildings 756 1,981 8,876 3,961 Gain on disposal of property, plant and equipment 8 2,016 - - Write back of allowance for diminution in value on investment in quoted shares - 59 - - Profit guarantee from guarantor - 3,380 - -

155

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

22. Key management personnel compensation

The key management personnel’s compensations are as follows:

Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Directors - Fees 242 218 242 218 - Remuneration 987 953 987 953 Other short-term employee benefits (including estimated monetary value of benefits-in-kind) 39 39 39 39

1,268 1,210 1,268 1,210

Other key management personnel: - Wages, salaries and others 601 589 309 321

1,869 1,799 1,577 1,531

Other key management personnel comprise persons other than the Directors of the Company, having authority and responsibility for planning, directing and controlling the activities of the entity either directly or indirectly.

23. tax expense

Recognised in the income statement Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Current tax expense/(income) - current 1,807 2,475 652 548 - prior year (1,216) (508) 197 (1) - section 110 set-off (1,350) - - - Deferred tax (income)/expense - origination and reversal of temporary differences (2,299) (432) (2,971) (38) - prior year 194 (525) 141 (17)

(2,864) 1,010 (1,981) 492

156

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

23. tax expense (continued)

Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Reconciliation of effective tax expense

Profit for the year 5,343 1,858 3,423 67 Total tax (income)/expense (2,864) 1,010 (1,981) 492

Profit excluding tax 2,479 2,868 1,442 559

Tax calculated using Malaysian tax rates 1st RM500,000 at 20%* 317 87 - - Balance taxed at 27% (2006 - 28%)* 1,071 1,988 389 156 Effect of difference in tax rates in foreign jurisdictions 36 67 - - Non-deductible expenses 980 789 225 336 Tax incentives (2,927) - (2,927) - Tax exempt income - (1,016) - - Effect of deferred tax benefit not recognised 37 41 - - Other items (6) 87 (6) - Section 110 set-off (1,350) - - - (Over)/under provision in prior years (1,022) (1,033) 338 -

(2,864) 1,010 (1,981) 492

* With effect from year of assessment 2004, companies with paid-up capital of RM2.5 million and below at the beginning of the basis period for a year of assessment are subject to corporate tax at 20% on chargeable income up to RM500,000.

The corporate tax rates are 27% for year of assessment 2007, 26% for year of assessment 2008 and 25% for the subsequent years of assessment. Consequently deferred tax assets and liabilities are measured using these tax rates.

24. earnings per share

Basic earnings per share

The calculation of basic earnings per share at 31 December 2007 was based on the profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding calculated as follows: Group 2007 2006 rM’000 rM’000

Profit for the year attributable to shareholders 5,156 2,073

157

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

24. earnings per share (continued)

Basic earnings per share (continued)

Group 2007 2006 rM’000 rM’000

Issued ordinary shares at 1 January 86,186 88,041 Effect of treasury shares held (727) (543)

Weighted average number of ordinary shares at 31 December 85,459 87,498

Basic earnings per share (sen) From continuing operations 6.03 2.37

Diluted earnings per share In 2006, the diluted earnings per share is anti-dilutive and therefore not shown. As stated in Note 18, the ESOS expired on 14 January 2007 hence the computation and disclosure of diluted earnings per share is therefore not applicable.

25. dividends

Dividends recognised in the current year by the Company are:

Sen Total per share amount date of (net of tax) rM’000 payment

2007 Final 2006 ordinary 1.46 1,245 15 August 2007

2006 Final 2005 ordinary 1.44 1,262 8 August 2006

After the balance sheet date the following dividends were proposed by the Directors. These dividends will be recognised in subsequent financial reports upon approval by the shareholders. Group sen per total share amount (net of tax) rM’000

Final ordinary 1.48 1,243

158

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

26. segmental information

The Group’s turnover and profit are derived mainly from educational activities in Malaysia and accordingly no segment reporting is presented.

27. Financial instruments

Financial risk management objectives and policies

Exposure to credit, interest rate, currency and liquidity risk arises in the normal course of the Group and the Company’s business.

Credit risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.

At balance sheet date, there were no significant concentrations of credit risk, except for 98% (2006 - 28%) of trade receivables which represent loan disbursements outstanding from the various government educations funds.

Interest rate risk

The Group borrows for operations at fixed and variable rates using its term loans and overdraft facilities. At balance sheet date, approximately 25% (2006 - 91%) and 30% (2006 - 98%) of the Group and of the Company’s borrowings, respectively, are on a fixed rate basis.

Foreign currency risk

The Group is exposed to foreign currency risk on transactions entered into by a foreign subsidiary that is denominated in US dollars. The Company does not hedge these exposures by purchasing forward currency contracts at present. However, the Board is keeping this policy under review.

Liquidity risk

The Group monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.

159

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

27. financial instruments (continued)

Effective interest rates and repricing analysis

In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their average effective interest rates at the balance sheet date and the periods in which they mature, or if earlier, reprice.

Group Average less effective than 1 - 2 2 – 3 3 - 4 4 - 5 over 5 interest rate total 1 year years years years years years % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2007 Fixed rate instruments Deposits 3.00 49 49 - - - - - Unsecured term loans 5.50 (20,000) - (20,000) - - - -

Floating rate instruments Secured revolving credit 6.28 (40,000) (40,000) - - - - - Secured term loans 6.47 (3,732) (520) (295) (217) (260) (532) (1,908) Secured overdrafts 7.99 (11,711) (11,711) - - - - - Unsecured overdrafts 7.64 (572) (572) - - - - -

2006 Fixed rate instruments Deposits 3.00 47 47 - - - - - Unsecured term loans 7.50 (60,000) (40,000) - (20,000) - - - Secured term loans 4.65 (43,466) (407) (731) (3,179) (3,470) (3,702) (31,977)

Floating rate instruments Secured term loans 7.25 (4,611) (884) (531) (946) (217) (260) (1,773) Secured overdrafts 8.43 (3,988) (3,988) - - - - -

160

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

27. financial instruments (continued)

Company Average less effective than 1 - 2 2 – 3 3 - 4 4 - 5 over 5 interest rate total 1 year years years years years years % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2007 Fixed rate instruments Advance to subsidiaries 2.51 43,490 43,490 - - - - - Unsecured term loans 5.50 (20,000) - (20,000) - - - -

Floating rate instruments Secured overdrafts 7.75 (7,177) (7,177) - - - - - Secured revolving credit 6.28 (40,000) (40,000) - - - - - Unsecured overdrafts 8.25 (485) (485) - - - - -

2006 Fixed rate instruments Advance to subsidiaries 5.48 33,316 33,316 - - - - - Unsecured term loans 7.75 (60,000) (40,000) - (20,000) - - - Secured term loans 4.65 (43,466) (407) (731) (3,179) (3,470) (3,702) (31,977)

Floating rate instruments Secured overdrafts 8.25 (1,898) (1,898) - - - - -

Fair values The fair values of other financial assets and liabilities, together with the carrying amounts shown in the balance sheets, are as follows.

2007 2007 2006 2006 Carrying Fair Carrying Fair Group amount value amount value RM’000 rM’000 rM’000 rM’000

Financial assets Investment in quoted shares 3,910 1,643 2,970 775 Unquoted bonds 1,920 * 6,000 *

5,830 1,643 8,970 775

Financial liabilities Secured revolving credit 40,000 40,000 - - Secured term loans 3,733 2,372 48,077 44,940 Unsecured term loans 20,000 19,531 60,000 58,626

63,733 61,903 108,077 103,566

161

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

27. financial instruments (continued)

2007 2007 2006 2006 Carrying Fair Carrying Fair Company amount value amount value RM’000 rM’000 rM’000 rM’000

Financial assets Unquoted bonds 1,920 * 6,000 *

Financial liabilities Secured revolving credit 40,000 40,000 43,059 41,830 Unsecured term loan: RM fixed rate loan 20,000 19,532 60,000 58,626

60,000 59,532 103,059 100,456

27.1 investment in quoted shares

The Directors are of the view that the quoted market price as at 31 December 2007 is not indicative of the fair value of the quoted investment mainly due to the following reasons:

(i) the quoted investment was acquired with the intention to hold for long term investment purpose; (ii) the decline in valuation of the investment in quoted shares is temporary; (iii) subsequent to the Company’s financial year end, the investee company announced the completion of a major corporate exercise which could potentially contribute to the growth and improvement of the investee company’s business in the long- term.

In assessing the fair value of the said quoted investment as at 31 December 2007, the Directors took into consideration the factors mentioned above.

27.2 investment in unquoted bonds

*It was not practicable to estimate the fair value of investment in unquoted bonds.

27.3 other financial instruments

For other financial instruments of the Group and the Company listed above, fair value has been determined by discounting the relevant cash flows using current interest rates for similar instruments at the balance sheet date.

162

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

28. oPerating leases

Leases as lessee

Non-cancellable operating lease rentals are payable as follows:

Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Less than one year 4,345 4,345 4,345 4,345 Between one and five years 13,728 18,073 13,728 18,073 More than five years 36,568 42,824 36,568 42,824

54,641 65,242 54,641 65,242

The Group leases a 12-storey building and two blocks of 5½-storey commercial buildings under operating leases. The leases typically run for a period of 15 years and 10 years respectively, with an option to renew the lease after that date. Lease payments are increased every 3 years and 2 years respectively to reflect market rentals.

29. commitments

Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Capital commitment Property, plant and equipment authorised and contracted for - 23,190 - 23,190

30. contingent liabilities

C company 2007 2006 rM’000 rM’000

Guarantees and contingencies relating to borrowings of: Subsidiaries-secured 4,638 3,037

The Company has undertaken to provide financial support to certain subsidiaries to enable them to continue to operate as going concerns.

163

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

31. related parties

Identity of related parties For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel includes all the Directors of the Group, and certain members of senior management of the Group.The Group has a related party relationship with its subsidiaries (see Note 7) and associate (see Note 8).

Transactions with Directors Significant transactions and balances with companies in which Directors, Dato’ (Dr) Patrick Teoh Seng Foo and close members of his family and Dato’ Clement Hii Chii Kok have interest other than those disclosed elsewhere in the financial statements are as follows:

Group Company 2007 2006 2007 2006 rM’000 rM’000 rM’000 rM’000

Balances in respect of non-trade transactions

Amounts due from: EcoFirst Consolidated Group of Companies in respect of liquidated ascertained damages claim and profit guarantee. 4,718 4,605 1,126 1,169

Transactions: EcoFirst Consolidated Group of Companies Profit guarantee from guarantor - 3,380 - -

These transactions have been entered into in the normal course of business and have been established at negotiated rates.

164

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

31. related parties (continued)

The significant related party transactions of the Company, other than key management personnel compensation, are as follows:

Company allowance Bad or doubtful Transactions Gross balance net balance for doubtful receivables amount for outstanding outstanding receivables recognised for the year ended at at at the year ended 31 December 31 December 31 December 31 December 31 December 2007 RM’000 RM’000 RM’000 rM’000 rM’000

Subsidiaries Transactions Rental 8,120 - - - - Service charge 192 - - - - Management fee 3,206 - - - - Examination fee 1,355 - - - - Advances (792) - - - -

Subsidiaries Balances in respect of non-trade transaction Amount due from: SEGi College (KL) Sdn. Bhd. - 7,166 7,166 - - SEGi College (PG) Sdn. Bhd. - 2,257 2,257 - - SMRC Learning Alliance (EM) Sdn. Bhd. - 1,571 1,571 - - SEGi Holdings Sdn. Bhd. - 12,465 12,465 - - SEGi College (M) Sdn. Bhd. - 9,142 9,142 - - SMRC Learning Alliance (KL) Sdn. Bhd. - 1,874 1,874 - - SEGi College (Sarawak) Sdn. Bhd. - 1,001 1,001 - - SEGi-IGS Sdn. Bhd. - 1,142 1,142 - - SEGi College (Subang Jaya) Sdn. Bhd. - 1,520 1,520 - - Summit Early Childhood Edu-Care Sdn. Bhd. - 2,433 2,433 - - SMRC Learning Alliance (PJ) Sdn. Bhd. - 2,773 2,773 - -

Amount due to: SEGi College (PJ) Sdn. Bhd. - 3,967 3,967 - - SEGi College of Technology (KL) Sdn. Bhd. - 1,938 1,938 - - SEG Equity Sdn. Bhd. - 2,101 2,101 - - Prestige Front Sdn. Bhd. - 1,427 1,427 - - Shaw Commercial Institution Sdn. Bhd. - 1,381 1,381 - - Binary Mark Sdn. Bhd. - 1,079 1,079 - - Worldwide Accreditation Ltd - 7,766 7,766 - -

165

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

31. related parties (continued)

The significant related party transactions of the Company, other than key management personnel compensation, are as follows:

Subsidiaries Transactions Rental 2,459 - - - - Service charge 180 - - - - Management fee 2,353 - - - - Examination fee 1,230 - - - - Advances 6,140 - - - -

Subsidiaries Balances in respect of non-trade transaction Amount due from: SEGi College (KL) Sdn. Bhd. - 7,396 7,396 - - SEGi College (PG) Sdn. Bhd. - 1,300 1,300 - - SMRC Learning Alliance (EM) Sdn. Bhd. - 1,593 1,593 - - SEGi Holdings Sdn. Bhd. - 14,387 14,387 - - SEGi College (M) Sdn. Bhd. - 3,667 3,667 - - SMRC Learning Alliance (KL) Sdn. Bhd. - 557 557 - - SEGi College (Sarawak) Sdn. Bhd. - 2,555 2,555 - - SEGi-IGS Sdn. Bhd. - 596 596 - - SEGi College (Subang Jaya) Sdn. Bhd. - 1,524 1,524 - - Summit Early Childhood Edu-Care Sdn. Bhd. - 2,176 2,176 - - SMRC Learning Alliance (PJ) Sdn. Bhd. - 2,345 2,345 - -

Amount due to: SEGi College (PJ) Sdn. Bhd. - 3,169 3,169 - - SEGi College of Technology (KL) Sdn. Bhd. - 459 459 - - SEG Equity Sdn. Bhd. - 1,427 1,427 - - Prestige Front Sdn. Bhd. - 932 932 - - Shaw Commercial Institution Sdn. Bhd. - 385 385 - - Binary Mark Sdn. Bhd. - 1,079 1,079 - - Worldwide Accreditation Ltd - 6,647 6,647 - -

166

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

32. acquisition of subsidiaries

Acquisition In 2006, the Group acquired 70% of the shares in SEGi-IGS Sdn. Bhd. and CEPI Resources (Selangor) Sdn. Bhd. for RM200,000 and RM300,000 satisfied in cash respectively. SEGi-IGS Sdn. Bhd. is involved in provision of education services, where as CEPI Resources (Selangor) Sdn. Bhd. is involved in provision of training services for environment management and protection.

The fair values of assets and liabilities assumed in the acquisition of subsidiaries and their cash flow effects are as follows:

Acquisition 2007 2006 rM’000 rM’000

Current assets - 504 Current liabilities - (5)

Net assets - 499 Goodwill on acquisition - 149 Less: Minority interest - (148)

Considerations - 500 Cash acquired - (500)

Net cash inflow - -

Effect of acquisition The acquisition of subsidiaries had no effect on the Group’s operating results for 31 December 2006 and had the following effect on the Group’s assets and liabilities as at 31 December 2006.

Acquisition 2007 2006 rM’000 rM’000

Balance sheets: Current assets - 504 Current liabilities - (5)

Net assets disposed/acquired - 499 Minority interest - (148)

Increase in the Group’s net assets at the end of financial year - 351

167

• SEG International Bhd • Notes to the financial statements for the year ended 31 December 2007

32. acquisition of subsidiaries (continued)

Acquisition of minority interest In March 2006 the Group acquired an additional 30% interest in SEGi Youth Training Sdn. Bhd. for RM75,000 in cash, increasing its ownership from 70% to 100%. The carrying amount of SEGi Youth Training Sdn. Bhd.’s net assets in the consolidated financial statements on the date of the acquisition was RM68,000.

In 2006, a wholly owned subsidiary, SEGi Methods Sdn. Bhd. issued shares to a minority shareholder. This resulted in the Group’s equity shareholdings in SEGi Methods Sdn. Bhd. being diluted from 100% to 70%. The impact of this transaction is not material to the consolidated financial statements.

33. comparative figures

Certain comparative figures have been reclassified as a result of changes in accounting policies following the adoption of FRS 117, Leases as stated in Note 5 to conform with the presentation requirements of FRS 101, Presentation of Financial Statements.

as as previously restated stated rM’000 rM’000

Property, plant and equipment 157,101 162,064 Prepaid lease payments 4,963 -

Leasehold land normally has an indefinite economic life and title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted for as prepaid lease payments.

34. subsequent event

On 6 September 2007, SEG International Berhad (“SEGi”) had entered into a sale and purchase agreement (‘SPA”) with CIMB Trustee Berhad (“CIMB Trustee”), being the trustee of AmanahRaya Real Estate Investment Trust (“ArREIT”), to dispose a piece of land in Mukim of Sungai Buloh measuring approximately 425,146 square feet (“Land”), an institutional building complex known as SEGi College erected on the Land and fixtures, fittings, plants and equipment (collectively referred to as the “Property”) for a total cash consideration of RM145 million. The prepaid lease payments and building have been classified as an asset held for sale during the year under review (see Note 13).

Concurrently, SEGi and CIMB Trustee had also entered into a lease agreement wherein SEGi agreed to lease the above Property from CIMB Trustee for a period of ten (10) years from the completion date of the SPA, extendable at SEGi’s option for a further five (5) years at a revised rental to be mutually agreed upon (“Lease Agreement”).The Proposed Disposal has been completed on 3 January 2008 whilst the Lease Agreement has commenced on even date with a monthly rental of RM870,000.

168

• SEG International Bhd • Group Properties as at 31 December 2007

No. Address Approximate Areas/ existing tenure approximate nBV as at date of D description Use A age of 31/12/2007 revaluation/ Building (years) (RM’000) acquisition

Owned by Company 33-35 Jalan Hang Lekiu 4,515 sq ft land area Education Freehold 30 7,150 14/12/1993 50100 Kuala Lumpur with a 9-storey Centre commercial building

16 Jalan 5/101C 2,228 sq ft built-up Office Leasehold 10 391 25/08/1995 Off Jalan Kaskas 1 area of 4 office suites Expiry date @ Cheras Business Centre 07/12/2077 56000 Cheras, Kuala Lumpur

36-4, 4th Floor Block B 2,910 sq ft built-up Residential Leasehold 27 97 08/01/1993 Jalan Senohong area of an apartment Expiry date @ Taman Cantik, Cheras 18/01/2076 56100 Kuala Lumpur

26-3, 3rd Floor Block A 1,297 sq ft built-up Residential Leasehold 27 64 04/04/1994 Jalan Senohong area of an apartment Expiry date @ Taman Cantik, Cheras 18/01/2076 56100 Kuala Lumpur

28-3, 3rd Floor Block A 1,297 sq ft built-up Residential Leasehold 27 64 04/04/1994 Jalan Senohong area of an apartment Expiry date @ Taman Cantik, Cheras 18/01/2076 56100 Kuala Lumpur

No. 9, Jalan Teknologi 9.76 acres of land Education Leasehold 1 132,654 22/12/2003 Taman Sains Selangor with an institutional Campus of 99 years Kota Damansara, PJU 5 complex 47810 Petaling Jaya Selangor

Owned by Subsidiaries 211 Jalan Bukit Mata Kuching 22,081 sq ft land area Education Leasehold 31 10,460 13/06/2001 93100 Kuching, Sarawak with 6-storey building Centre Expiry date @ 13/08/2785

South City Plaza 21,986 sq ft built-up Training Leasehold 4 8,453 03/07/1998 Lot 3.09a, 3rd Floor area of shoplot space Centre Expiry date @ Persiaran Serdang Perdana 09/11/2093 Taman Serdang Perdana Section 1 43300 Seri Kembangan Selangor

South City Plaza 15,482 sq ft built-up Training Leasehold 4 5,956 08/01/1999 Lot 3.09b, 3rd Floor area of shoplot space Centre Expiry date @ Persiaran Serdang Perdana 09/11/2093 Taman Serdang Perdana Section 1 43300 Seri Kembangan Selangor

Lot 196 & 444, Block 16 3.69 acres of land Vacant Leasehold - 10,007 28/12/2004 KCLD, Jalan Tun Jugah Expiry date @ Kuching, Sarawak Lot 196 - 31/12/2026 Lot 444 - 31/12/2024 169

• SEG International Bhd • ANALYSIS OF SHAREHOLDINGS as at 30 April 2008

Authorised Share Capital : RM100,000,000 Issued and Fully Paid-up Share Capital : RM83,963,455 (Excluding treasury shares of 5,129,300) Class of shares : Ordinary shares of RM1.00 each Voting rights : One vote per ordinary share

Distribution Schedule of Shareholdings

Size of shareholdings No. of % of no. of % of shareholders shareholders shares held issued capital

1 – 99 25 1.07 845 0.00 100 – 1,000 351 15.01 285,679 0.34 1,001 – 10,000 1,580 67.58 5,661,512 6.74 10,001 – 100,000 315 13.47 9,094,823 10.83 100,001 – less than 5% of issued shares 63 2.69 39,372,608 46.89 5% and above of issued shares 4 0.17 29,547,988 35.19 TOTAL 2,338 100.00 83,963,455 100.00

Substantial Shareholders as at 30 April 2008

According to the register required to be kept under Section 69L of the Companies Act, 1965, the following are the substantial shareholders (excluding bare trustees) of the Company:-

N no. of shares held name of Shareholders Direct % indirect %

1. EcoFirst Consolidated Berhad (“EcoFirst”) 20,620,025 24.56 2,235,000## 2.66 2. Koperasi Pegawai-pegawai Melayu Malaysia Bhd (“MOCCIS”) 15,226,865 18.14 - - 3. Dato’ (Dr.) Patrick Teoh Seng Foo 507,000 0.60 22,855,025** 27.22 4. Dato’ Clement Hii Chii Kok 945,500 1.13 22,855,025** 27.22 5. Dato’ Pahamin A. Rajab 767,800 0.91 15,226,865* 18.14 6. Datin Fadzilah bte Saad - - 15,226,865* 18.14 7. Abdullah Kamal bin Shafi’i 10,000 0.01 18,982,078+ 22.61

Directors’ Shareholdings N no. of shares held name of Directors Direct % indirect %

1. Dato’ Pahamin A. Rajab 767,800 0.91 15,226,865* 18.14 2. Dato’ (Dr.) Patrick Teoh Seng Foo 507,000 0.60 22,855,025** 27.22 3. Dato’ Clement Hii Chii Kok 945,500 1.13 22,855,025** 27.22 4. Dato’ Seri Megat Najmuddin bin Dato’ Seri Dr. Haji Megat Khas 297 - - - 5. Datin Fadzilah bte Saad - - 15,226,865* 18.14 6. Abdullah Kamal bin Shafi’i 10,000 0.01 18,982,078+ 22.61

## Deemed interest by virtue of shares held by Sawitani Sdn Bhd, a wholly-owned subsidiary of EcoFirst ** Deemed interest by virtue of shares held by EcoFirst and Sawitani Sdn Bhd in which the Director(s) is/are deemed to have an interest * Deemed interest by virtue of shares held by MOCCIS in which the Director(s) is/are deemed to have an interest + Deemed interest by virtue of shares held by MOCCIS and Ladang MOCCIS Sdn Bhd in which the Director is deemed to have an interest

170

• SEG International Bhd • ANALYSIS OF SHAREHOLDINGS as at 30 April 2008

Thirty Largest Shareholders

name of shareholders No. of shares % 1. Minister of Finance Akaun Jaminan Pinjaman Kerajaan Persekutuan 8,826,865 10.51 2. Alliancegroup Nominees (Tempatan) Sdn Bhd Alliance Merchant Nominees (Tempatan) Sdn Bhd for Kumpulan Emas Berhad 7,490,000 8.92 3. Mayban Nominees (Tempatan) Sdn Bhd Aseambankers Malaysia Berhad for Koperasi Pegawai-Pegawai Melayu Malaysia Berhad 7,000,000 8.34 4. CIMB Group Nominees (Tempatan) Sdn Bhd Pledged Securities Account for EcoFirst Consolidated Bhd 6,231,123 7.42 5. Ladang MOCCIS Sdn Bhd 3,155,213 3.76 6. Kumpulan Wang Simpanan Guru-Guru 2,840,000 3.38 7. Public Nominees (Tempatan) Sdn Bhd Pledged Securities Account for EcoFirst Consolidated Bhd 2,674,000 3.18 8. Koperasi Permodalan Felda Berhad 2,414,700 2.88 9. CIMB Group Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Sawitani Sdn Berhad 2,100,000 2.50 10. Mayban Nominees (Tempatan) Sdn Bhd Malaysian Trustees Berhad for AMB Smallcap Trust Fund 1,963,200 2.34 11. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for EcoFirst Consolidated Bhd 1,650,000 1.97 12. PFM Capital Sdn Bhd 1,639,500 1.95 13. Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Rexter Capital Sdn Bhd 1,246,500 1.48 14. Khor Meow Siang 997,200 1.19 15. Lembaga Tabung Angkatan Tentera 958,000 1.14 16. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account Purewise Sdn Bhd 936,400 1.12 17. HSBC Nominees (Asing) Sdn Bhd Exempt An for Credit Suisse 850,900 1.01 18. OSK Nominees (Tempatan) Sdn Berhad Pledged Securities Account for EcoFirst Consolidated Bhd 832,286 0.99 19. PFM Capital Sdn Bhd 811,000 0.97 20. Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd Pancaran Abadi Sdn Bhd for EcoFirst Consolidated Bhd 774,616 0.92 21. Pahamin AB Rajab 767,800 0.91 22. Mah Ming Yuet 704,383 0.84 23. Tan Chee Sing 683,200 0.81 24. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Hii Chii Kok @ Hii Chee Kok 676,000 0.81 25. ECML Nominees (Tempatan) Sdn Bhd Perdana Technology Venture Sdn Bhd 558,600 0.67 26. SBB Nominees (Tempatan) Sdn Bhd Yayasan Mohd Noah 540,000 0.64 27. Mayban Securities Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Rahmat Suffian 535,000 0.64 28. HDM Nominees (Tempatan) Sdn Bhd Pledged Securities Account for EcoFirst Consolidated Bhd 484,000 0.58 29. Kee Ju-Hun 459,000 0.55 30. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Diana Lim 450,000 0.54 171

• SEG International Bhd • Appendix A Notice of Nomination of Auditors

Lim Lay Keow 15 Jalan 47 Kawasan 19 Off Jalan Meru 41050 Klang

12 May 2008

The Board of Directors SEG International Berhad 5th Floor, SEGi College Persiaran Kewajipan, USJ 1 47600 UEP Subang Jaya Selangor Darul Ehsan

Dear Sirs

Notice of Nomination of Messrs. Horwath as Auditors

I, Lim Lay Keow, being a shareholder of the Company, hereby give notice pursuant to Section 172 (11) of the Companies Act, 1965 of my intention to nominate Messrs. Horwath (AF 1018) for appointment as auditors of the Company and to propose the following as an ordinary resolution to be tabled at the forthcoming annual general meeting of the Company, to replace the retiring auditors, Messrs. KPMG:

“THAT Messrs. Horwath (AF 1018) be and are hereby appointed as Auditors of the Company in place of the retiring Auditors, Messrs. KPMG, and to hold office until the conclusion of the next Annual General Meeting at a remuneration to be determined by the Directors.”

Yours faithfully,

Lim Lay Keow

172

• SEG International Bhd • (Incorporated in Malaysia) 145998-U

Form of Proxy

I/We of being a member/members of SEG International Bhd hereby appoint of or failing him/her of or failing him/her, the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the Twenty-Second Annual General Meeting of the Company to be held at Room 2.7, Level 2, Right Wing, SEGi College Malaysia, No. 9, Jalan Teknologi, Taman Sains Selangor, Kota Damansara, PJU 5, 47810 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 25 June 2008 at 3.00 p.m. and at any adjournment thereof.

My/Our proxy is to vote either on a show of hands or on a poll as indicated below with an “X”:

RESOLUTION FOR AGAINST 1. Adoption of the Audited Financial Statements and Reports 2. Declaration of a final dividend of 2 sen per ordinary share less income tax at 26% 3. Approval of the payment of Directors’ Fee 4. Appointment of Auditors and to authorise the Directors to fix their remuneration. 5. Authority pursuant to Section 132D of the Companies Act, 1965 for Directors to issue shares 6. Proposed renewal of authority for the purchase of its own shares

Dated this ______day of ______2008

Number of shares held Signature of member(s)

Notes: 1. If you wish to appoint other person(s) to be your proxy, delete the words “the Chairman of the meeting” and insert the name(s) and address(es) of the person(s) desired in the space so provided. 2. If there is no indication as to how you wish your vote(s) to be cast, the proxy will vote or abstain from voting at his/her discretion. 3. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 4. A member shall not be entitled to appoint more than two proxies to attend and vote at the same meeting. Where two proxies are appointed, the proportions of shareholdings to be represented by each proxy must be specified in order for the appointments to be valid. 5. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. 6. If the appointor is a corporation, this form must be executed under its Common Seal or under the hand of its Attorney. 7. All Forms of Proxy must be duly executed and deposited at the Registered Office of the Company at 5th Floor, SEGi College, Persiaran Kewajipan, USJ1, 47600 UEP Subang Jaya, Selangor Darul Ehsan not less than 48 hours before the time for holding the Meeting or adjourned meeting. Fold this flap for sealing

1st fold here

Stamp

SEG International Bhd 5th Floor, SEGi College, Persiaran Kewajipan, USJ 1 47600 UEP Subang Jaya, Selangor Darul Ehsan

2nd fold here SEGi EDUCATION NETWORK

SEGI GROUP OF COLLEGES SEGi GROUP OF Summit Early Childhood TRAINING CENTRES Edu-Care Sdn Bhd SEGi College Malaysia 5th Floor, SEGi College No. 9, Jalan Teknologi SEGi Training Centre Seri Kembangan Persiaran Kewajipan USJ 1 Taman Sains Selangor Block A, South City Plaza 47600 UEP Subang Jaya Kota Damansara, PJU 5 Persiaran Serdang Perdana Selangor Darul Ehsan 47810 Petaling Jaya 43300 Seri Kembangan Tel : +603 8600 1777 Toll free: 1800-88-7344 Selangor Darul Ehsan Fax : +603 8605 3999 Tel : +603 6145 1777 Tel : +603 8948 4811 [email protected] Fax : +603 6145 1666 Fax : +603 8945 4066 [email protected] Agensi Pekerjaan Job Venture Sdn Bhd SEGi Training Centre Pulau Indah 5th Floor, No. 9, Jalan Teknologi SEGi College Subang Jaya 22, Blok D Taman Sains Selangor Kota Damansara, PJU 5 Persiaran Kewajipan, USJ 1 Jalan Sungai Chandong 19 47810 Petaling Jaya 47600 UEP Subang Jaya Bandar Armanda Putra Tel : +603 6145 2777 Selangor Darul Ehsan Pulau Indah Fax : +603 6145 2666 Tel : +603 8600 1888 42009 Perlabuhan Klang, Selangor [email protected] Fax : +603 8600 1999 Tel : +603-3101 3970 [email protected] Fax : +603-3101 3913 SMRC Learning Alliance Sdn Bhd 5th Floor, SEGi College SEGi College Kuala Lumpur SEGi Training Centre Kuala Lumpur Persiaran Kewajipan USJ 1 33 – 35, Jalan Hang Lekiu 41, Jalan Hang Lekiu 47600 UEP Subang Jaya 50100 Kuala Lumpur 50100 Kuala Lumpur Selangor Darul Ehsan Tel : +603 2070 2078 Tel : +603 2078 1518 Tel : +603 8600 1777 Fax : +603 2034 2759 Fax : +603 2078 2588 Fax : +603 8605 3999 [email protected] [email protected] SEGi Training Centre Bukit Mertajam SEGi College Seri Kembangan No 25 & 27 SBT Professional Publications Sdn Bhd Block A, South City Plaza Jalan Permatang Rawa 1 No. 9, Jalan Teknologi Persiaran Serdang Perdana Kawasan Perniagaan Rawa Taman Sains Selangor 43300 Seri Kembangan 14000 Bukit Mertajam Kota Damansara, PJU 5 Selangor Darul Ehsan Seberang Prai, Pulau Pinang 47810 Petaling Jaya Tel : +603 8948 4811 Tel : +604 5401 887/5401 886 Tel : +603 6145 2777 Fax : +603 8945 4066 Fax : +604 5401 889 Fax : +603 6145 2666 [email protected] [email protected] SEGi Training Centre Kuching SEGi College Penang Lot 9603-9611, Jalan Pending South City Lifelong Learning Centre Wisma Green Hall 93450 Kuching, Sarawak 3rd Floor, South City Plaza 43 Green Hall Tel : +6082 338 816 Persiaran Serdang Perdana 10200 Penang Fax : +6082 339 816 Taman Serdang Perdana, Seksyen 1 Tel : +604 263 3888 43300 Seri Kembangan +604 262 8127 SEGi Selangor Darul Ehsan Fax : +604 262 2193 BUSINESS UNITS Tel : +603 8943 8186 [email protected] Fax : +603 8943 8981 IFPA Resources Sdn Bhd [email protected] SEGi College Sarawak 5th Floor, SEGi College 211, Jalan Bukit Mata Kuching Persiaran Kewajipan USJ 1 Worldwide Accreditation Ltd 93100 Kuching, Sarawak 47600 UEP Subang Jaya Les Cascades Building Tel : +6082 252 566 Selangor Darul Ehsan Edith Cavell Street Fax : +6082 231 355 Tel : +603 8600 1777 Port Louis, Mauritius [email protected] Fax : +603 8605 3999 [email protected] SEGi LEADERSHIP CENTRE I-Station Solutions Sdn Bhd Suite 2A-23A-2, Tingkat 23A SEGi Leadership Centre Malacca Block 2A, Plaza Sentral Nusa Dusun Orchard Resort, Jalan Stesen Sentral 5 Tanjung Agas Kuala Linggi, Kuala Lumpur Sentral 78300 Kuala Sungai Baru, Melaka 50450 Kuala Lumpur Tel : +603 2261 4808 (Marketing) Tel : +603 2261 4428 Fax : +603 2261 4778 Fax : +603 3361 4778 [email protected] [email protected]