Annual Report 2014
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annual report 2014 Corporate Information 02 Corporate Structure 03 Financial Highlights 04 Chairman’s Message 05 Directors’ Profile 06 Employees Activities 09 Academic Reports 13 University Board of Governors 13 Academic Management Team 14 Events Highlights 15 Corporate Social Responsibility 16 Statement on Corporate Governance 19 CONTENTS Audit Committee Report 26 Statement on Risk Management and 30 Internal Control Additional Compliance Information 32 List of Properties 33 Analysis of Shareholdings 44 Directors’ Report 47 Statements of Financial Position 50 Statements of Profit or Loss and 51 Other Comprehensive Income Consolidated Statements of Changes 52 in Equity Statements of Cash Flows 54 Notes to the Financial Statements 56 Statement by Directors 92 Independent auditors’ report to the 93 members of Masterskill Education Group Berhad Notice of Annual General Meeting 95 Statement Accompanying Notice of 100 Annual General Meeting Form of Proxy Enclosed CORPORATE INFORMATION BOARD OF DIRECTORS REMUNERATION COMMITTEE REGISTERED OFFICE General Tan Sri Dato’ Seri Mohd Shahrom Leou Thiam Lai Masterskill Education Group Berhad bin Dato’ Hj Nordin (Rtd) (Chairman) (Company No.: 746920-M) (Independent Non-Executive Chairman) B-13-15, Level 13, Menara Prima Tower B General Tan Sri Dato’ Seri Mohd Shahrom Jalan PJU 1/39, Dataran Prima Major General Dato’ Pahlawan bin Dato’ Hj Nordin (Rtd) 47301 Petaling Jaya, Selangor Darul Ehsan Dr. R. Mohana Dass (Rtd) (Member) Malaysia (Non-Independent Non-Executive Director) Darawati Hussain Tel No.: (603)-7491 4318 Dato’ Dr. Palaniappan (Member) Fax No.: (603)-7887 2318 a/l Ramanathan Chettiar @ Dato’ Dr. R. Palan NOMINATING COMMITTEE HEAD OFFICE (Executive Director) Leou Thiam Lai G-8, Jalan Kemacahaya 11 (Chairman) Taman Kemacahaya, Batu 9 Kevin Loh Kok Leong 43200 Cheras, Selangor Darul Ehsan (Non-Independent Non-Executive Director) General Tan Sri Dato’ Seri Mohd Shahrom Malaysia bin Dato’ Hj Nordin (Rtd) Leou Thiam Lai (Member) Tel No.: (603)-9080 5888 (Senior Independent Non-Executive Director) Fax No.: (603)-9080 1995 Darawati Hussain Darawati Hussain (Member) SHARE REGISTRAR (Non-Independent Non-Executive Director) Symphony Share Registrars Sdn. Bhd. COMPANY SECRETARY Level 6, Symphony House Siva Kumar a/l M Jeyapalan Jasmindar Kaur a/p Sarban Singh Pusat Dagangan Dana 1 (Non-Independent Non-Executive Director) (MAICSA 7002687) Jalan PJU 1A/46 AUDIT COMMITTEE 47301 Petaling Jaya, Selangor Darul Ehsan AUDITORS Malaysia Leou Thiam Lai (Chairman) Messrs KPMG Level 10, KPMG Tower Tel No.: (603)-7841 8000 Fax No.: (603)-7841 8151/8152 General Tan Sri Dato’ Seri Mohd Shahrom 8, First Avenue, Bandar Utama 47800 Petaling Jaya, Selangor Darul Ehsan bin Dato’ Hj Nordin (Rtd) PRINCIPAL BANKERS (Member) Malaysia. AmIslamic Bank Berhad CIMB Islamic Bank Berhad Darawati Hussain Tel No.: (603)-7721 3388 CIMB Bank Berhad (Member) Fax No.: (603)-7721 3399 SOLICITORS Messrs BH Lawrence & Co Messrs Lee Hishammuddin Allen & Gledhill STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad (Listed since 18 May 2010) (Stock code: 5166) Masterskill Education Group Berhad • Annual ReportAnnual Masterskill Education Group Berhad • 2014 02 CORPORATE STRUCTURE Masterskill Education Group Berhad 100% - Asiamet Executive Education Centre Masterskill (M) Sdn. Bhd. (100%) Sdn. Bhd. Masterskill (Ipoh) Sdn. Bhd. (100%) 100% - Masterskill International Sdn. Bhd. 100% - Amet Risk Management and Consultancy Masterskill (Kuching) Sdn. Bhd. (100%) Sdn. Bhd. Valencia Education Group Sdn. Bhd. (70%) 100% - Masterskill Resources Sdn. Bhd. Aspiration Achievers Network Sdn. Bhd. (100%) Masterskill (KK) Sdn. Bhd. (100%) Masterskill (KB) Sdn. Bhd. (100%) Masterskill Education Group Berhad • Annual ReportAnnual Masterskill Education Group Berhad • 2014 03 FINANCIAL HIGHLIGHTS REVENUE BREAKDOWN REVENUE BREAKDOWN (RM million) (RM million) 2010 2.0 306.9 6.8 Foundation 2010 315.7 (0.6%) (97.2%) (2.2%) Diploma 2.4 232.9 14.9 2011 250.2 2011 (1.0%) (93.1%) (6.0%) Degree 16.7 2012 148.8 2012 1.2 130.9 (0.8%) (88.0%) (11.2%) Others 63.4 2013 0.2 50 13 0.2 2013 (0.3%) (78.8%) (20.5%) (0.4%) 2014 38.5 2014 0.7 20.1 16.2 1.5 (2.0%) (54%) (43%) (1%) PBT (RM million) PAT (RM million) 2010 118.0 2010 102.1 2011 43.0 2011 38.1 2012 (35.4) 2012 (28.2) 2013 (162.9) 2013 (162.9) 2014 (43.9) 2014 (43.9) Audited Account Unaudited Account Operation Year 2014 2014 Qtr-4 Qtr-3 Qtr-2 Qtr-1 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Revenue * 38,497 38,437 7,228 8,680 9,700 12,829 Cost of Sales (27,643) (27,643) (7,259) (6,090) (7,126) (7,168) Gross (Loss)/Profit 10,854 10,794 (31) 2,590 2,574 5,661 Operating Expenses (67,819) (67,598) (40,218) (9,909) (7,722) (9,749) Other Operating Income 14,840 14,839 531 14,102 91 115 Interest Expense (2,231) (2,230) (530) (509) (601) (590) Interest Income 506 506 145 69 105 186 (Loss)/Profit before taxation (43,850) (43,689) (40,103) 6,343 (5,553) (4,377) Non Cash Item Depreciation 5,708 5,707 1,189 1,593 1,467 1,458 Impairment -Property, plant and equipment 9,272 9,272 10,227 (839) (105) (11) -Trade Receivable 13,209 13,209 8,701 1,097 1,488 1,923 (Gain)/Loss on disposal of other investment (13,684) (13,684) – (13,684) – – (Gain)/Loss on disposal of property, plant and equipment 237 274 (210) 257 93 134 Total Non Cash Item 14,742 14,778 19,907 (11,576) 2,943 3,504 PBT Less Non Cash Item (29,108) (28,911) (20,196) (5,233) (2,610) (873) *Revenue less all discount Masterskill Education Group Berhad • Annual ReportAnnual Masterskill Education Group Berhad • 2014 04 CHAIRMAn’s MessagE Dear Valued Shareholders, On behalf of the Board of Directors (Board), I am pleased to present to you the Annual Report of Masterskill Education Group Berhad (MEGB) for the financial year ended 31 December 2014 (FY2014). With the new Board of Directors finally in place on 8th April 2015, I The education sector looks very promising and exciting. The present this review on behalf of the Board and the Group. Government has released the Higher Education Blueprint outlining several new initiatives to ensure Malaysians have access to an We understand now that 2014 has been a challenging year for the education of their choice. The focus on employability and the Group. We took over from the preceding Board that was in office decision to develop Malaysia as an education hub augurs well for for the last two years recently. They had attempted to put in efforts the future prospects of the Group. to restructure and transform the Group with effective governance. Despite these efforts, the fact was that over the last few years, the At Asia Metropolitan University, the focus is to ensure every University experienced a steep decline in student enrolments and student who passes through the corridors of the University will revenues, leading to huge losses. The reasons for these losses have be employable. While the focus in the past was predominantly on been attributed to several factors such as the over dependence securing financing for the students, the future focus is to ensure on Nursing programmes and reduction in Perbadanan Tabung greater industry collaboration to underpin the growth of the Pendidikan Tinggi Nasional (PTPTN) loans; all of these issues have University. When industry met by the students with skills and talent, been documented several times in the past. Additionally, several their employability and futures will be enhanced. Thus, is what our other legacy issues have hindered the performance of the Group. new mission is all about: Empowering Future Leaders. The challenges still remain and are not over yet. We are putting in new initiatives and action plans to rebuild the University into one of We are now known as the Asia Metropolitan University after the region’s leading institutions of higher learning. undergoing a massive rebranding exercise at the University. MEGB will also be renamed as Asiamet Education Group Berhad subject Performance RevieW to the shareholders’ approval. For the financial year 2014, the Group registered revenues of The asset light strategy model adopted by the Group will lead to RM38.5 million, a 39 % decrease against RM63.4 million in revenues the disposal of all assets to the highest bidders and a process that in the preceding financial year. Accordingly, the Group turned in a will reflect the true market value being realised through a tender pre-tax loss of RM43.9 million compared to RM162.9 million in the process. This will enable us to return a substantial part of the previous year. proceeds to shareholders, subject to regulatory approvals. The losses for the financial year 2014 were due to the various Appreciation provisions made by the Group. The Group provided RM22.5 million of total impairment which consist of assets impairment of RM9.3 The Board would also like to recognise and thank the Management million and the trade receivables impairment of RM13.2 million. The and staff of the MEGB. depreciation charge for the year was RM5.7 million. The Group has also made an exceptional gain of RM13.7 million from the sale of its We wish to express our sincere thanks and appreciation to every investments and loss on disposal of property, plant and equipment individual who has made a contribution for the betterment of the of RM237 K. Excluding these one-off items and depreciation charges, Group. This includes our shareholders, esteemed partners, hospitals, the losses have narrowed down to RM29.1 million. suppliers and contractors for their continuous support to the Board and Management.