financial statements for the year ended 31 december...

Financial Statements for the year ended 31 December 2003082 Directors’ Report 086 Statement by Directors and Statutory Declaration087 Report of the Auditors 088 Balance Sheets 089 Income Statements090 Statement of Changes in Equity092 Cash Flow Statements 095 Notes to the Financial Statements

directors’ report for the year ended 31 december 2003

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The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for theyear ended 31 December 2003.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding and the provision of management consultancy services and businessadvisory services, whilst the principle activities of the subsidiaries are as stated in Note 28 to the financial statements. There has beenno significant change in the nature of these activities during the financial year.

RESULTSGroup Company

RM’000 RM’000Net profit for the year 14,373 6,032

RESERVES AND PROVISIONS

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

DIVIDENDS

Since the end of the previous financial year, the Company paid a final dividend of 7% less tax totalling RM3,988,000 in respect of theyear ended 31 December 2002 on 12 August 2003.

The final dividend recommended by the Directors in respect of the year ended 31 December 2003 is 8% less tax totallingRM4,665,000.

DIRECTORS OF THE COMPANY

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

Director AlternateSenator Tan Sri Dato’ Seri (Dr) Abdullah bin Ayub Hj. Mohd Razi bin YaacobDato’ (Dr) Patrick Teoh Seng Foo Dato’ Clement Hii Chii Kok Kee Lian YongDato’ Seri Megat Najmuddin bin Datuk Seri Dr Haji Megat KhasAmos Siew Boon YeongSimon Hue Fook Chuan Dato’ Pahamin A. Rajab Datin Fadzilah bte Saad

directors’ report for the year ended 31 december 2003 (cont’d)

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The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations (other than wholly-ownedsubsidiaries) of those who were Directors at year end as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM1.00 eachBalance at Balance at

Name 1.1.2003 Bought Sold 31.12.2003Direct interest:Senator Tan Sri Dato’ Seri (Dr) Abdullah bin Ayub 11,200 10,000 – 21,200Dato’ Clement Hii Chii Kok 606,000 170,000 – 776,000Dato’ Seri Megat Najmuddin bin Datuk Seri Dr Haji Megat Khas 297 100,000 – 100,297

Indirect interest:Senator Tan Sri Dato’ Seri (Dr) Abdullah bin Ayub 19,287,478 – – 19,287,478 +

Dato’ (Dr) Patrick Teoh Seng Foo 24,755,025 – (1,000,000) 23,755,025 #

Hj. Mohd Razi bin Yaacob 15,226,865 – – 15,226,865 ^

Dato’ Pahamin A. Rajab 15,226,865 – – 15,226,865 ^

Datin Fadzilah bte Saad 15,226,865 – – 15,226,865 ^

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

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

None of the other Directors holding office at 31 December 2003 had any interest in the ordinary shares of the Company and of itsrelated corporations during the financial year.

DIRECTORS’ BENEFITS

Dato’ (Dr) Patrick Teoh Seng Foo has interest in companies which traded with certain companies in the Group in the ordinary courseof business either as landlord of office space or provider of services.

Other than the above, since the end of the previous financial year, no Director of the Company has received nor become entitled toreceive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directorsas 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 amember, or with a company in which the Director has a substantial financial interest.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company toacquire benefits by means of the acquisition of shares in or debentures of the Company or any other corporate bodies, other than asstated in this report.


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ISSUE OF SHARES

During the financial year, the Company issued 737,000 and 1,125,800 new ordinary shares of RM1.00 each under the Employees’Share Option Scheme (“ESOS”), at the option price of RM1.40 and RM1.35 per share, respectively.

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 issueof options pursuant to the Employees Shares Option Scheme (“ESOS”).

At an extraordinary general meeting held on 15 November 2001, the Company’s shareholders approved the establishment of an ESOSof 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 ExecutiveDirectors and eligible employees of the Group.

The options offered and the option prices are as follows:

Number of options over ordinary shares of RM1 eachDate of Option Balance at Balance at

offer price 1.1.2003 Granted Exercised 31.12.20035.2.2002 RM1.40 2,713,000 – 737,000 1,976,000

30.6.2003 RM1.35 – 2,380,000 1,125,800 1,254,200

The external auditors have verified the allocation of options granted during the financial year.

The salient features of the scheme are as follows:

i) Eligible persons are full time 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 ofemployment has been confirmed in writing as at the date of offer. In addition, where an employee is serving under a fixed term ofemployment contract, the contract must be for a duration of at least three (3) years and whose service of employment has beenconfirmed 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 byany 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 within a period of five years from the date of offer of the option 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.

iv) The option price shall be determined at a discount of not more than 10% from the five (5)-day weighted average market price ofthe Company’s ordinary shares (“SEG Shares”) immediately preceding the date of the offer of the option or at par value of SEGShares, whichever is higher.


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OTHER STATUTORY INFORMATION

Before the financial 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 enforceablewithin the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantiallyaffect 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 31December 2003 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has anysuch item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

AUDITORS

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

Signed in accordance with a resolution of the Directors:

Senator Tan Sri Dato’ Seri (Dr) Abdullah bin Ayub

Dato’ Clement Hii Chii Kok

Subang Jaya, SelangorDate: 07 April 2004

statement by directors pursuant to section 169(15) of the Companies Act, 1965

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In the opinion of the Directors, the financial statements set out on pages 088 to 124 are drawn up in accordance with the provisionsof the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 December 2003 and of the results of their operations and cash flows for the yearended on that date.

Signed in accordance with a resolution of the Directors:

Senator Tan Sri Dato’ Seri (Dr) Abdullah bin Ayub

Dato’ Clement Hii Chii Kok

Subang Jaya, SelangorDate: 07 April 2004

Statutory Declaration pursuant to section 169(16) of the Companies Act, 1965

I, Kee Lian Yong, the Director primarily responsible for the financial management of SEG International Bhd., do solemnly andsincerely declare that the financial statements set out on pages 088 to 124 are, to the best of my knowledge and belief, correct and Imake this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory DeclarationsAct, 1960.

Subscribed and solemnly declared by the abovenamed in Subang Jaya, Selangor on 07 April 2004.

Kee Lian YongMIA Number: 3208

Before me:

Choy Yee Cheong (P.P.N.) No. B083Commissioner for Oaths

report of the auditors to the members of SEG International Bhd.

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We have audited the financial statements set out on pages 088 to 124. The preparation of the financial statements is the responsibility of the Company’s Directors. Our responsibility is to express an opinion on the financial statements based on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. These standards require that we plan andperform the audit to obtain all the information and explanations which we consider necessary to provide us with evidence to givereasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis,evidence relevant to the amounts and disclosures in the financial statements. An audit also includes an assessment of the accountingprinciples used and significant estimates made by the Directors as well as evaluating the overall adequacy of the presentation ofinformation in the financial statements. 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 in Malaysia 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 2003 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 Groupand 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 thesubsidiaries 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 28 to the financial statements and we haveconsidered 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 statementsare in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and wehave 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 commentmade under subsection (3) of Section 174 of the Act.

KPMGFirm Number: AF 0758Chartered Accountants

Hew Lee Lam SangPartnerApproval Number: 1862/10/05(J)

Kuala Lumpur,Date: 07 April 2004

balance sheets at 31 december 2003

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Group CompanyNote 2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Property, plant and equipment 2 100,195 112,552 29,826 35,447Investment in subsidiaries 3 – – 71,395 71,820Investment in associates 4 3,591 3,587 – – Other investments 5 7,015 7,013 4,000 4,000Intangible assets 6 35,385 32,546 – –

146,186 155,698 105,221 111,267Current assets

Inventories 7 144 236 – – Trade and other receivables 8 70,735 33,754 59,203 37,663Other investments 5 887 – – –Tax recoverable 526 456 – –Cash and cash equivalents 9 7,035 20,691 1,783 9,304

79,327 55,137 60,986 46,967Current liabilities

Other payables 10 17,751 17,902 5,934 2,309Borrowings 11 10,317 7,767 117 117Taxation 6,303 5,247 54 247

34,371 30,916 6,105 2,673

Net current assets 44,956 24,221 54,881 44,294

191,142 179,919 160,102 155,561

Financed by:

Capital and reservesShare capital 12 80,996 79,133 80,996 79,133Reserves 13 52,093 41,019 37,848 35,115

133,089 120,152 118,844 114,248Minority shareholders’ interest 14 1,063 3,152 – –

Long term and deferred liabilities

Borrowings 11 54,769 54,048 40,212 40,329Deferred tax liabilities 15 2,221 2,567 1,046 984

56,990 56,615 41,258 41,313

191,142 179,919 160,102 155,561

The financial statements were approved and authorised for issue by the Board of Directors on 07 April 2004.

The notes set out on pages 095 to 124 form an integral part of, and should be read in conjunction with, these financial statements.

income statements for the year ended 31 december 2003

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Group CompanyNote 2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Revenue - services 92,571 80,580 6,752 5,109Cost of services (28,316) (26,274) (1,941) (1,889)

Gross profit 64,255 54,306 4,811 3,220Distribution costs (6,492) (3,254) (467) (328)Administration expenses (25,257) (27,792) (2,756) (2,149)Other operating expenses (13,709) (10,162) (2,163) (1,965)Other operating income 6,528 3,086 10,184 6,604

Operating profit 17 25,325 16,184 9,609 5,382Financing costs 19 (6,137) (3,507) (3,748) (191)Interest income 295 82 2,413 782Share of gain/(loss) of associate 196 (13) – –

Profit before tax 19,679 12,746 8,274 5,973Tax – Company and subsidiaries (5,082) (6,019) (2,242) (2,191)

– associates (56) – – –

Tax expense 20 (5,138) (6,019) (2,242) (2,191)

Profit after taxation 14,541 6,727 6,032 3,782Less: Minority interests (168) (1,616) – –

Net profit for the year 14,373 5,111 6,032 3,782

Basic earnings per ordinary share (sen) 21 18.04 6.46

Diluted earning per ordinary share (sen) 21 17.74 –

Dividends per ordinary share (net) - sen 22 5.76 5.04


statement of changes in equity for the year ended 31 december 2003

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Non-Distributable Distributable

Share Share Revaluation RetainedNote capital premium reserve profits Total

Group RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2002 79,128 24,827 3,050 11,868 118,873Effect of adopting MASB 25 – – (477) 56 (421)

Restated balance 79,128 24,827 2,573 11,924 118,452

Net profit for the year – – – 5,104 5,104Effect of adopting MASB 25 30 – – – 7 7

Restated balance – – – 5,111 5,111Transfer to retained profits on

the realisation of revaluation reserve – – (25) 25 –

Issue of shares under ESOS 5 2 – – 7Dividend – 2001 final 22 – – – (3,418) (3,418)

At 31 December 2002 79,133 24,829 2,548 13,642 120,152Net profit for the year – – – 14,373 14,373Transfer to retained profit on

the realisation of revaluation reserve – – (25) 25 – Issue of shares under ESOS 1,863 689 – – 2,552Disposal of revalued property – – (291) 291 – Dividend – 2002 final 22 – – – (3,988) (3,988)

At 31 December 2003 80,996 25,518 2,232 24,343 133,089

Note 12


statement of changes in equity for the year ended 31 december 2003 (cont’d)

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Non-Distributable Distributable

Share Share Revaluation RetainedNote capital premium reserve profits Total

Company RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2002 79,128 24,827 2,613 7,689 114,257Effect of adopting MASB 25 – – (436) 56 (380)

Restated balance 79,128 24,827 2,177 7,745 113,877

Net profit for the year – – – 3,775 3,775Effect of adopting MASB 25 30 – – – 7 7

Restated balance – – – 3,782 3,782Transfer to retained profit on

the realisation of revaluation reserve – – (25) 25 – Issue of shares under ESOS 5 2 – – 7 Dividend - 2001 final 22 – – – (3,418) (3,418)

At 31 December 2002 79,133 24,829 2,152 8,134 114,248Net profit for the year – – – 6,032 6,032Transfer to retained profit on

the realisation of revaluation reserve – – (25) 25 – Issue of shares under ESOS 1,863 689 – – 2,552 Dividend - 2002 final 22 – – – (3,988) (3,988)

At 31 December 2003 80,996 25,518 2,127 10,203 118,844

Note 12


cash flow statements for the year ended 31 december 2003

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Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000Cash flows from operating activities

Profit before taxation 19,679 12,746 8,274 5,973Adjustments for:

Impairment loss on investment in subsidiaries – – 425 –

Amortisation of goodwill 1,640 1,284 – – Amortisation of development costs 973 980 – – Depreciation 5,262 5,121 738 894Development costs written off – 40 – – Dividend income (2) (2) (7,363) (6,329)Impairment loss on goodwill 26 – – – Interest expense 6,137 3,507 3,748 191Interest income (295) (82) (2,413) (782)Loss on partial disposal of investment

in subsidiary 104 – – – Gain on disposal of quoted investments (278) – – – Gain on disposal of property,

plant and equipment (4,149) (76) (2,265) – Property, plant and equipment

written off 255 333 – 103 Share of partnership loss – 16 – – Share of (gain)/loss in associate (196) 13 – –

Operating profit before working capital changes 29,156 23,880 1,144 50

Change in working capital:Inventories 92 66 – – Trade and other receivables (28,806) (20,535) 4,203 (2,310)Other payables (238) 2,735 3,625 (723)

Cash generated from/(used in) operations 204 6,146 8,972 (2,983)

Income taxes paid (4,442) (4,199) (312) (333)Interest paid (6,137) (3,507) (3,748) (191)Interest received 295 82 2,413 782

Net cash (used in)/generated fromoperating activities (10,080) (1,478) 7,325 (2,725)

cash flow statements for the year ended 31 december 2003 (cont’d)

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Group Company2003 2002 2003 2002

Note RM’000 RM’000 RM’000 RM’000Cash flows from investing activities

Proceeds from disposal of quoted investment 3,172 – – – Proceeds from partial disposal of

investment in subsidiary 40 – – – Proceeds from disposal of property,

plant and equipment 7,252 319 3,248 – Purchase of property, plant and equipment (i) (3,007) (8,226) (105) (843)Purchase of quoted investments (3,781) – – – Purchase of addition interest in

existing subsidiaries (7,681) – – (175)Development expenditure incurred – (19) – –

Net cash (used in)/generated frominvesting activities (4,005) (7,926) 3,143 (1,018)

Cash flows from financing activitiesAdvances to subsidiaries – – (16,436) (18,926)Dividend paid (3,988) (3,418) (3,988) (3,418)Payments of finance lease/hire purchase

liabilities (1,004) (1,262) (117) (192)Repayments of term loans (2,430) (4,962) – – Increase in deposits pledged (29) (6) – – Proceeds from term loans 2,074 38,144 – 35,000Proceeds from issuance of shares 2,552 457 2,552 7

Net cash (used in)/generated fromfinancing activities (2,825) 28,953 (17,989) 12,471

Net (decrease)/increase in cash and cash equivalents (16,910) 19,549 (7,521) 8,728

Cash and cash equivalents at beginning of year 17,951 (1,598) 9,304 576

Cash and cash equivalents at end of year (ii) 1,041 17,951 1,783 9,304

cash flow statements for the year ended 31 december 2003 (cont’d)

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i) Purchase of property, plant and equipment

During the year, the Group and the Company acquired property, plant and equipment with an aggregate cost of RM4,402,000 (2002 - RM9,377,000) and RM Nil (2002 - RM993,000), respectively, of which RM1,395,000 (2002 - RM1,151,000) and RM Nil (2002 - RM150,000), respectively, were acquired by means of finance leases/hire purchases.

ii) Cash and cash equivalents

Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Cash and bank balances 6,831 4,991 1,783 1,290Deposits with licensed banks 204 15,700 – 8,014Bank overdrafts (5,790) (2,565) – –

1,245 18,126 1,783 9,304Fixed deposits pledged to banks (204) (175) – –

1,041 17,951 1,783 9,304


notes to the financial statements

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1 . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies are adopted by the Group and by the Company and are consistent with those adopted in previous years except for the adoption of the following:

i) MASB 25, Income Taxes;

ii) MASB 27, Borrowing Costs; and

iii) MASB 29, Employee Benefits.

In addition to the new policies and extended disclosures where required by these new standards, the effects of the changes in theabove accounting policies are disclosed in Note 30 to these financial statements.

a) Basis of accounting The financial statements of the Group and of the Company are prepared on the historical cost basis except as disclosed in thenotes to the financial statements and in compliance with the provisions of the Companies Act, 1965 and applicable approvedaccounting standards in Malaysia.

b) Basis of consolidationSubsidiaries are those enterprises controlled by the Company. Control exists when the Company has the power, directly orindirectly to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. The financialstatements of subsidiaries are included in the consolidated financial statements from the date that control effectively commencesuntil the date that control effectively ceases. Subsidiaries are consolidated using the acquisition method of accounting.

A subsidiary is excluded from consolidation when either control is intended to be temporary if the subsidiary is acquired andheld exclusively with a view of its subsequent disposal in the near future and it has not previously been consolidated or itoperates under severe long term restrictions which significantly impair its ability to transfer funds to the Company.Subsidiaries excluded on these grounds are accounted for as investments.

Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of during the year are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiaries’ net assets are determined and these values are reflected in the Group financial statements. The difference between the acquisitioncost and the fair values of the subsidiaries’ net assets is reflected as goodwill or negative goodwill as appropriate.

Intragroup transactions and balances and the resulting unrealised profits are eliminated on consolidation. Unrealised losses resulting from intragroup transactions are also eliminated unless cost cannot be recovered.

c) Associates Associates are those enterprises in which the Group has significant influence, but not control, over the financial and operating policies.

The consolidated financial statements include the total recognised gains and losses of associates on an equity accounted basisfrom the date that significant influence effectively commences until the date that significant influence effectively ceases.

Unrealised profits arising on transactions between the Group and its associates which are included in the carrying amount ofthe related assets and liabilities are eliminated partially to the extent of the Group’s interests in the associates. Unrealised losses on such transactions are also eliminated partially unless cost cannot be recovered.

Goodwill on acquisition is calculated based on the fair value of net assets acquired.

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notes to the financial statements (cont’d)

1 . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

d) Property, plant and equipmenti) Owned assets

Freehold land and capital work in progress are stated at cost. All other property, plant and equipment are stated at cost/valuation less accumulated depreciation.

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

ii) Assets under hire purchaseProperty, plant and equipment financed by hire purchase agreements are capitalised at cost. The interest element of thehire purchase instalments is charged to income statement over the period of the agreement and accounted for on astraight line method.

Depreciation Freehold land and capital work in progress are not amortised. Leasehold land and buildings are amortised in equal instalmentsover the period of the respective leases which range from sixty to ninety-nine years while buildings are depreciated on astraight line basis over the shorter of 50 years or the lease period. The straight line method is used to write off the cost of theother assets over the term of their estimated useful lives at the following principal annual rates.

Computer hardware and software 20% - 25%Motor vehicles 20%Plant and equipment 10% - 25%Furniture, fittings and office equipment 10% - 33.33%Library books and manual 10% - 33.33%

Capital work in progress are not depreciated until it is completed and in use in the operation.

e) Investments Long term investments other than in subsidiaries and associates are stated at cost. An allowance is made when the Directors are of the view that there is a diminution in their value which is other than temporary.

Long term investments in subsidiaries and associates are stated at cost in the Company less impairment loss where applicable.

Current quoted investments are stated at the lower of cost and market value on an individual investment basis.

f) Intangible assets

GoodwillGoodwill represents the excess of the cost of acquisition over the fair values of the net identifiable assets acquired and isstated at cost less accumulated amortisation and accumulated impairment losses.

Goodwill is amortised from the date of initial recognition over its estimated useful life of not more than 25 years.

In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the associates.

Development expenditureDevelopment expenditure consists of direct costs 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 cost related to the development of educational courses.


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1 . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

The development expenditure relating to approved courses is amortised and recognised as an expense on a systematic basis so as to reflect the pattern in which the related economic benefit are recognised over five (5) years.

g) InventoriesInventories are valued at the lower of cost and net realisable value and are determined on a first-in-first-out basis. The cost ofinventories comprise the original purchase price plus incidentals in bringing these inventories to their present location and conditions.

h) Trade and other receivablesTrade and other receivables are stated at cost less allowance for doubtful debts.

i) Employee benefitsObligations for contributions to defined contributions plan are recognised as an expense in the income statement as incurred.

j) Cash and cash equivalentsCash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments whichhave an insignificant risk of changes in value. For the purpose of the cash flow statement, cash and cash equivalents arepresented net of bank overdrafts and pledged deposits.

k) ImpairmentThe carrying amount of assets, other than inventories and financial assets (other than investments in subsidiaries andassociates), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any suchindication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amountof an asset or the cash-generating unit to which it belongs exceeds its recoverable amount. Impairment losses are recognisedin the income statement, unless the asset is carried at a revalued amount, in which case the impairment loss is charged to equity.

The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing value in use, estimatedfuture cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessmentsof the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cashinflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss in respect of goodwill is not reversed unless the loss was caused by a specific external event of an exceptionalnature that is not expected to recur and subsequent external events have occurred that reverse the effect of that event.

In respect of other assets, 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 thatwould have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. The reversal isrecognised in the income statement, unless it reverses an impairment loss on a revalued asset, in which case it is taken to equity.

l) LiabilitiesBorrowings and other payables are stated at cost.


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m) Income taxTax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the income statementexcept to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax expense 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 provided, using the liability method, on temporary differences arising between the tax bases of assets andliabilities and their carrying amounts in the financial statements. Temporary differences are not recognised for goodwill notdeductible for tax purposes and the initial recognition of assets or liabilities that at the time of the transaction affects neitheraccounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation orsettlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available againstwhich the asset can be utilised.

n) Revenue

Goods sold and services renderedThe revenue of the Group comprises tuition, lecture and examination fees received, sales of books, manuals and othertraining materials and accessories and rental.

The revenue of the Company comprises management fees and rental.

Revenue from sale of goods is measured at the fair value of the consideration receivable and is recognised in the incomestatement when the significant risks and rewards of ownership have been transferred to the buyer.

Revenue from course fee is recognised over the period of the course.

Management fees and rental are recognised on accrual basis.

o) Dividend incomeDividend income is recognised when the right to receive payment is established.

p) Interest incomeInterest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset.

q) Expenses

i) Operating lease paymentsPayments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease.

ii) Financing costsAll interest and other costs incurred in connection with borrowings are expensed as incurred. The interest component of hire purchase payments is recognised in the income statement so as to give a constant periodic rate of interest on theoutstanding liability at the end of each accounting period.

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2 . PROPERTY, PLANT AND EQUIPMENT

Furniture,Freehold Leasehold Computer fittings Library Capital

Group land and land and software and Motor Plant and and office books and work-in-buildings buildings hardware vehicles equipment equipment manuals progress Total

Cost/Valuation RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Opening balance 19,594 37,311 10,598 1,842 2,237 27,486 2,271 35,795 137,134Additions – – 1,150 – – 3,063 189 – 4,402Disposals (5,800) (6,795) (3) (119) – – – – (12,717)Write off – – (18) – – (434) – – (452)Transfer – 35,135 – – – 660 – (35,795) –Acquisition of subsidiary – – – – – 55 – – 55

Closing balance 13,794 65,651 11,727 1,723 2,237 30,830 2,460 – 128,422

Representing items at:Cost 2,627 65,521 11,727 1,723 2,237 30,830 2,460 – 117,125Directors’

valuation –1993 11,167 130 – – – – – – 11,297

13,794 65,651 11,727 1,723 2,237 30,830 2,460 – 128,422

Accumulated Depreciation

Opening balance 1,175 1,839 7,555 594 1,510 10,597 1,312 – 24,582Charge for the year 190 493 1,217 295 75 2,705 287 – 5,262Disposals (417) (897) (1) (105) – – – – (1,420)Write off – – (2) – – (195) – – (197)

Closing balance 948 1,435 8,769 784 1,585 13,107 1,599 – 28,227

Net Book Value

At 31 December 2003 12,846 64,216 2,958 939 652 17,723 861 – 100,195

At 31 December 2002 18,419 35,472 3,043 1,248 727 16,889 959 35,795 112,552

Depreciation charge for the year ended 31 December 2002 167 505 1,466 312 276 2,111 284 – 5,121


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2 . PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Furniture,Freehold Leasehold Computer fittings Library

Company land and land and software and Motor and office books andbuildings buildings hardware vehicles equipment manuals Total

Cost/Valuation RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Opening balance 13,794 21,557 1,539 848 1,437 3 39,178Additions – – 74 – 31 – 105Disposals (3,267) (2,286) – – – – (5,553)

Closing balance 10,527 19,271 1,613 848 1,468 3 33,730

Representing items at:Cost 627 19,141 1,613 848 1,468 3 23,700Directors’ valuation – 1993 9,900 130 – – – – 10,030

At 31 December 2003 10,527 19,271 1,613 848 1,468 3 33,730

Accumulated DepreciationOpening balance 961 974 1,366 184 243 3 3,731Charge for the year 125 229 69 170 145 – 738Disposals (269) (296) – – – – (565)

Closing balance 817 907 1,435 354 388 3 3,904

Net book valueAt 31 December 2003 9,710 18,364 178 494 1,080 – 29,826

At 31 December 2002 12,833 20,583 173 664 1,194 – 35,447

Depreciation charge for the year ended 31 December 2002 125 259 236 153 121 – 894


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2 . PROPERTY, PLANT AND EQUIPMENT (CONT’D)

i) RevaluationIt is the Group’s policy to state property, plant and equipment at cost.

The Group’s certain freehold land and buildings 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 adoptionof International Accounting Standards (“IAS”) No. 16 (Revised) on “Property, Plant and Equipment”, the valuation of theseassets 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 valuesas at 31 December 2003.

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

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Freehold land and buildings 8,236 9,575 6,351 6,410Apartments 102 104 102 104

8,338 9,679 6,453 6,514

ii) SecurityCertain freehold land and buildings of the Group and of the Company are charged to banks as security for borrowings (see Note 11).

iii) Assets under hire purchaseThe net book value of property, plant and equipment as at the year end held under hire purchase agreements of the Groupand of the Company amounted to RM3,810,000 (2002 - RM3,052,000) and RM425,000 (2002 – RM575,000) respectively.

3 . INVESTMENT IN SUBSIDIARIES

Company2003 2002

RM’000 RM’000

Unquoted shares at cost 71,820 71,820Less: Impairment loss (425) –

71,395 71,820

The details of the subsidiaries are disclosed in Note 28 to the financial statements.


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4 . INVESTMENTS IN ASSOCIATES

Group2003 2002

RM’000 RM’000

Unquoted shares, at cost 3,640 3,640Share of post-acquisition reserves 87 (53)Less: Goodwill amortised (136) –

3,591 3,587

Represented by:Group’s share of net assets other than goodwill 386 246Goodwill on acquisition, less amortisation 3,205 3,341

3,591 3,587

The associates of the Group are as follows:

EffectivePrincipal Ownership

Country Activities Interest 2003 2002

% %

Palm Leisure Sdn. Bhd. Malaysia Property development 30 30Upward Portfolio Sdn. Bhd. Malaysia Provision of educational 39.45 39.45

services

5 . OTHER INVESTMENTS

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000Long term

Quoted unit trusts stock 37 35 – – Quoted shares – at cost 2,970 2,970 – – Unquoted shares – at cost 8 8 – – Unquoted bonds – at cost 4,000 4,000 4,000 4,000

7,015 7,013 4,000 4,000

Market value Quoted unit trusts stock 39 32 – – Quoted shares 1,530 1,204 – –

CurrentQuoted shares 887 – – –

Market value Quoted shares 1,045 – – –


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6 . INTANGIBLE ASSETS

DevelopmentGroup Goodwill costs TotalCost RM’000 RM’000 RM’000

Opening balance 32,008 4,874 36,882Acquisition of additional interest in existing subsidiary 5,342 – 5,342

Closing balance 37,350 4,874 42,224

Accumulated amortisation

Opening balance 3,356 980 4,336Amortisation charge for the year 1,504 973 2,477Impairment loss for the year 26 – 26

Closing balance 4,886 1,953 6,839

Net book valueAt 31 December 2003 32,464 2,921 35,385

At 31 December 2002 28,652 3,894 32,546

7 . INVENTORIES

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

8 . TRADE AND OTHER RECEIVABLES

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Trade receivables 44,069 20,632 – – Other receivables, deposits and prepayment 26,666 13,122 11,769 3,155Subsidiaries – non-trade – – 47,434 34,508

70,735 33,754 59,203 37,663

The amounts due from subsidiaries are unsecured, interest free and have no fixed terms of repayment except for advances to certain subsidiaries amounting to RM35,361,542 (2002 - RM18,926,000) which bear interest at 8.5% (2002 - 8.5%) per annum.

8.1 Included in the Group and the Company’s other receivables is an amount of RM8,194,000 (2002 - Nil) and RM4,005,000 (2002 - Nil), respectively, due from the purchasers of the land and buildings which were disposedduring the year.


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8 . TRADE AND OTHER RECEIVABLES (CONT’D)

8.2 Included in the Group and the Company’s deposits are deposits of RM3,742,000 (2002 - Nil) and RM2,992,000 (2002 - Nil), respectively paid for the acquisition of two new campus properties.

8.3 Included in the Group and the Company’s prepayments is an interest prepaid of RM1,250,000 (2002 - RM1,600,000)on term loan. The prepayment will be amortised over the period of the term loan of 5 years.

8.4 Also included in the Group’s other receivables are related party balances of RM898,000 (2002 - RM2,563,000), RM111,000 (2002 - RM118,000) and RM933,000 (2002 - RM915,000) due from the Meda Group of Companies, SYF Resources Group of Companies (Formerly known as Tomisho Group of Companies) and Kumpulan Emas Group of Companies, respectively (refer Note 25).

8.5 Also included in the Company’s other receivables are related party balances of RM11,000 (2002 – RM17,000), RM53,000 (2002 - RM8,000) and Nil (2002 - RM118,000) due from the Kumpulan Emas Group of Companies, Meda Group of Companies and SYF Resources Group of Companies (Formerly known as Tomisho Group of Companies), respectively (refer Note 25).

9 . CASH AND CASH EQUIVALENTS

2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000

Cash and bank balances 6,831 4,991 1,783 1,290

Deposits with licensed banks 204 15,700 – 8,014

7,035 20,691 1,783 9,304

Fixed deposits in the Group of RM204,000 (2002 - RM175,000) have been pledged to financial institutions for banking facilities extended to certain subsidiaries in the ordinary course of business. (Note 11).

1 0 .OTHER PAYABLES

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Other payables and accrued expenses 17,751 17,902 1,581 1,671

Subsidiaries – non-trade – – 4,353 638

17,751 17,902 5,934 2,309


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1 0 .OTHER PAYABLES (CONT’D)

10.1 The amounts due to subsidiaries are unsecured, interest free and have no fixed terms of repayment.

10.2 Included in other payables and accrued expenses of Group is an amount of RM2,768,000 (2002 - RM2,776,000) andRM2,361,000 (2002 – Nil) which represents fees received in advance and accruals for students’ allowance, respectively.

10.3 In 2002, included in other payables were related party balances of RM147,000 and RM819,000 due to the Meda Group of Companies and Kumpulan Emas Group of Companies, respectively (refer Note 25).

1 1 .BORROWINGS

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000Current

Term loans - secured 3,156 4,206 – –

Overdrafts - secured 5,790 2,236 – –

- unsecured – 329 – –

Hire purchase and finance lease liabilities 1,371 996 117 117

10,317 7,767 117 117

Non-current

Long term loans - secured 13,505 12,811 – –

- unsecured 40,000 40,000 40,000 40,000

Hire purchase and finance lease liabilities 1,264 1,237 212 329

54,769 54,048 40,212 40,329

The bank overdraft and term loan facilities of the Group and the Company are subject to interest rates ranging from 7.0% to 8.5% (2002 - 7.4% to 10.4%) per annum.


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1 1 .BORROWINGS (CONT’D)

Terms and debts repayment scheduleUnder 1 - 2 2 - 5 Over 5

Total 1 year years years yearsGroup RM’000 RM’000 RM’000 RM’000 RM’000

Unsecured term loan - fixed 8.5% (2002 - 8.5%) 40,000 – – 40,000 –

Secured term loans - variable at 7.25% to 8.5% 16,661 3,156 3,156 9,100 1,249

(2002 - 8.2% to 10.4%)Secured overdrafts

- variable at 7.0% to 7.5% 5,790 5,790 – – – (2002 - 7.4% to 7.9%)

Hire purchase and finance lease liabilities- fixed at 4.65% to 6.90% 2,635 1,371 922 342 –

(2002 – 4.65% to 6.90%)

65,086 10,317 4,078 49,442 1,249

Company

Unsecured term loan -- fixed at 8.5% (2002 - 8.5%) 40,000 – – 40,000 –

Hire purchase and finance lease liabilities- fixed at 4.65% to 5.00%

(2002 – 4.65% to 5.75%) 329 117 117 95 –

40,329 117 117 40,095 –

The secured term loans and overdraft facilities are secured by fixed charges over freehold and long term leasehold land andbuildings of the Company and subsidiaries with net book value of RM53,793,000 (2002 - RM22,467,000) and building inprogress of subsidiaries with cost of RMNil (2002 - RM35,135,000) and fixed deposits of RM204,000 (2002 - RM175,000).


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1 1 .BORROWINGS (CONT’D)

Hire purchase and lease liabilities

Hire purchase and lease liabilities are payable as follows:

Gross Interest Principal Gross Interest Principal2003 2003 2003 2002 2002 2002

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Less than one year 1,637 (266) 1,371 1,123 (127) 996Between one and five years 1,565 (301) 1,264 1,480 (243) 1,237

3,202 (567) 2,635 2,603 (370) 2,233

CompanyLess than one year 145 (28) 117 145 (28) 117Between one and five years 263 (51) 212 408 (79) 329

408 (79) 329 553 (107) 446

1 2 .SHARE CAPITAL

Group and CompanyOrdinary shares of RM1.00 each 2003 2002

RM’000 RM’000

Authorised 100,000 100,000

Issued and fully paidOpening balance 79,133 79,128Issuance of shares under ESOS 1,863 5

Closing balance 80,996 79,133

1 3 .RESERVES

Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit and tax exempt income to frank all its distributable reserves at 31 December 2003, if paid out as dividends.

1 4 .MINORITY SHAREHOLDERS’ INTERESTS

This consists of minority shareholders’ proportion of share capital and reserves of subsidiaries, net of their share of subsidiary’s goodwill on consolidation and amortisation of goodwill charged to the minority shareholders.


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1 5 .DEFERRED TAX

The amounts, determined after appropriate offsetting, are as follows:

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Deferred tax liabilities 2,221 2,567 1,046 984

Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current taxliabilities and when the deferred taxes relate to the same taxation authority.

The recognised deferred tax assets and liabilities (before offsetting) are as follows:

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000Property, plant and equipment

- capital allowances 2,116 2,411 941 828- revaluation 366 373 366 373

Unabsorbed capital allowances (261) (217) (261) (217)

2,221 2,567 1,046 984

The unrecognised deferred tax assets are as follows:

Group2003 2002

RM’000 RM’000

Deductible temporary differences (3,025) (3,662)Unabsorbed capital allowances 3,514 3,126Unutilised tax losses 12,168 12,598

12,657 12,061

The unutilised tax losses and deductible temporary differences do not expire under current tax legislation. Deferred tax assetshave not been recognised in respect of these items because it is not probable that future taxable profit will be available againstwhich the Group can utilise the benefits.

The Group has tax losses carried forward of RM12,168,000 (2002 - RM12,598,000) which give rise to the recognised andunrecognised deferred tax assets in respect of unutilised tax losses above.


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1 6 .EMPLOYEE BENEFITS

Share option plan

The Group offers vested share options over ordinary shares to Directors and employees with more than one year service. Movements in the number of share options held by employees are as follows:

Group and Company2003 2002

RM’000 RM’000

Outstanding at 1 January 2,713 – Issued 2,380 2,718Exercised (1,863) (5)

Outstanding at 31 December 3,230 2,713

Detail of share options granted during the period:Expiry date 14/1/2007 14/1/2007Exercise price per ordinary share (RM) 1.35 1.40 Aggregate proceeds if shares are issued (RM’000) 3,213 3,805

Details of share options exercised during the period:Expiry date 14/1/2007 14/1/2007Exercise price per ordinary share (RM) 1.35 - 1.40 1.40Aggregate issue proceeds (RM’000) 2,552 7Fair value at date of issue (RM’000) 3,689 7

Term of the options outstanding at 31 December:

Expiry date Exercise price Number14/1/2007 RM1.40 1,976,00014/1/2007 RM1.35 1,254,200

The Group received proceeds of RM2,552,000 in respect of the 1,863,000 options exercised during the year: RM1,863,000 was credited to share capital and RM689,000 was credited to share premium.


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1 7 .OPERATING PROFIT

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Operating profit is arrived at after charging:Amortisation of goodwill 1,504 1,284 – – Amortisation of goodwill in investment in associate 136 – – – Amortisation of development costs 973 980 – – Audit fees 142 134 22 22Depreciation 5,262 5,121 738 894Development costs written off – 40 – – Holding company’s Directors:

- Remuneration 670 447 670 327- Fees 192 190 192 190

Subsidiary Directors’ remuneration 699 1,008 – – Impairment loss on investments in subsidiaries – – 425 – Impairment loss on goodwill 26 – – – Loss on disposal in subsidiary 104 – – – Property, plant and equipment written off 255 333 – 103 Rental expense on land and buildings 3,964 4,999 386 418Rental of equipment 50 45 – – Share of partnership loss – 16 – –

After crediting:Gross dividends from:- Unquoted subsidiaries – – 7,363 6,329Rental income on land and buildings 1,170 1,826 2,103 2,229Dividend income 2 2 – – Gain on disposal of property, plant and equipment 4,149 76 2,265 – Gain on disposal of quoted investments 278 – – –

The estimated monetary value of Directors’ benefits-in-kind of the Group and Company is RM34,450 (2002 - RM37,400) and RM18,000 (2002 – RM18,600) respectively.


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1 8 .EMPLOYEE INFORMATION

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Staff costs 26,527 20,633 1,941 1,888

The defined contributions to the Employee Provident Fund of the Group and of the Company during the financial year are RM2,296,000 (2002 - 1,938,000) and RM187,000 (2002 - RM166,000), respectively.

The number of employees of the Group and of the Company (including Directors) at the end of the year was 705 (2002 - 645)and 69 (2002 - 54) respectively.

1 9 .FINANCING COSTS

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000Interest payable:

Term loans 5,259 2,551 3,625 – Bank overdrafts 600 712 94 145Hire purchase 276 231 28 35Other interest 2 13 1 11

6,137 3,507 3,748 191

2 0 .TAX EXPENSE

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000Current tax expense

- current 5,442 4,563 2,168 2,075- prior year (126) 404 (100) (40)

5,316 4,967 2,068 2,035Deferred tax expense

- Origination and reversal of temporary differences (571) 486 12 (43)- prior year 225 566 50 199

4,970 6,019 2,130 2,191Tax expenses on share of profit of associate 56 – – – Real property gain tax 112 – 112 –

5,138 6,019 2,242 2,191


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2 0 .TAX EXPENSE (CONT’D)

Reconciliation of effective tax rate

Group 2003 2002% RM’000 % RM’000

Profit before taxation 100 19,679 100 12,746

Income tax using Malaysian tax rate 28 5,510 28 3,569Effect of difference in tax rates in foreign

jurisdictions (2) (370) – – Non-deductible expenses 7 1,338 17 2,131 Tax exempt income (6) (1,259) – – Tax incentives (2) (462) – – Effect of deferred tax benefit not

recognised 1 180 (3) (341)Effect of utilisation of unabsorbed

capital/utilised tax losses previously not recognised – (13) (1) (117)

Other items – 3 (2) (193)

26 4,927 39 5,049

Under provision in prior years 99 970Real property gain tax 112 –

Tax expense 5,138 6,019

Company

Profit before taxation 100 8,274 100 5,973

Income tax using Malaysian tax rate 28 2,317 28 1,672Non-deductible expenses 6 497 6 360Tax exempt income (8) (634) – –

26 2,180 34 2,032

(Over)/Under provision in prior years (50) 159Real property gain tax 112 –

Tax expense 2,242 2,191


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2 1 .EARNINGS PER ORDINARY SHARE - GROUP

Basic earnings per shareThe calculation of basic earnings per share is based on the net profit attributable to ordinary shareholders of RM14,373,000 (2002 - RM5,111,000) and the weighted average number of ordinary shares outstanding during the year of 79,669,000 (2002 - 79,132,000).

Weighted average number of ordinary shares2003 2002

RM’000 RM’000

Issued ordinary shares at beginning of the year 79,133 79,128 Effect of shares issued during the year 537 4

Weighted average number of ordinary shares 79,670 79,132

Diluted earnings per share

The calculation of diluted earnings per share is based on the net profit attributable to ordinary shareholders of RM14,594,000 (2002 – RM5,325,000) and the weighted average number of ordinary shares outstanding during the year of 82,272,000 (2002 - 81,619,000) calculated as follows:

Net profit attributable to ordinary shareholders (diluted)2003 2002

RM’000 RM’000

Net profit attributable to ordinary shareholders 14,373 5,111After tax effect of notional interest savings 221 221

Net profit attributable to ordinary shareholders (diluted) 14,594 5,332

Weighted average number of ordinary shares (diluted)2003 2002

RM’000 RM’000

Weighted average number of ordinary shares as above 79,669 79,132Effect of share options 2,603 2,487

Weighted average number of ordinary shares (diluted) 82,272 81,619

In financial year ended 31 December 2002, the diluted earnings per share results in increased earnings per share and are therefore not shown.


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2 2 .DIVIDENDS


Ordinary RM’000 RM’000Final paid:

2002 –7% per share less tax(2001 – 6% per share less tax) (3,988) (3,418)

The proposed final dividend of 8% less tax totaling RM4,665,000 has not been accounted for in the financial statements.

2 3 .SEGMENTAL INFORMATION

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

2 4 .CONTINGENT LIABILITIES

Company2003 2002

RM’000 RM’000Guarantees and contingencies relating to borrowings of:

Subsidiaries - secured 20,366 13,897- unsecured – 329

20,366 14,226

2 5 .RELATED PARTIES

Controlling related party relationships are as follows:

i) The subsidiaries as disclosed in Note 28.

Transactions with a Director

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

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000Balances in respect of non-trade transactions

Amounts due from:Meda Group of Companies

in respect of rental and related services rebates, sharing of advertisement expenses and scholarship funds 898 2,416 53 8


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2 5 .RELATED PARTIES (CONT’D)

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000Amount due from:SYF Resources Group of Companies

(formerly known as Tomisho Group of Companies)in respect of rental deposit, sharing of advertisement expenses and brought forward intercompany balances prior to the acquisition of the subsidiaries 111 118 – 118

Amounts due from:Kumpulan Emas Group of Companies

in respect of renovations works, liquidated ascertained damages claim, sharing of advertisement expenses and brought forward intercompany balances prior to the acquisition of the subsidiaries 933 96 11 17

TransactionsKumpulan Emas Group of Companies

Rental of motor vehicle – 31 – 31Purchase of motor vehicle – 100 – 100

Meda Group of CompaniesRental and other related charges 1,986 1,753 – –

SYF Resources Group of Companies (formerly known as Tomisho Group of Companies)Rental 386 386 386 386

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


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2 6 .COMMITMENT


RM’000 RM’000Capital commitmentProperty, plant and equipment

Authorised and contracted for 26,218 –

27. FINANCIAL INSTRUMENTS

Financial risk management objectives and policiesExposure to credit, interest rate and currency risk arises in the normal course of the Group and the Company’s business.

Credit riskManagement 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. The maximum exposure to credit risk for the Group and for the Company are represented by the carrying amount of each financial asset.

Interest rate riskThe Group borrows for operations at fixed and variable rates using its term loan and overdrafts facilities. At balance sheet date,approximately 66% (2002 - 65%) and 100% (2002 – 100%) of the Group and of the Company’s borrowings, respectively, areon a fixed rate basis.

Foreign currency riskThe Group and the Company have no receivables or payables denominated in foreign currency. Therefore, the foreign currency risk is not significant.

Liquidity riskThe Group monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’soperations and to mitigate the effects of fluctuations in cash flows.


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2 7 .FINANCIAL INSTRUMENTS (CONT’D)

Effective interest rates and repricing analysis

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

2003 2002Effective Effective

interest Within 1-5 interest Within 1-5rate Total 1 year years rate Total 1 year years

Group % RM’000 RM’000 RM’000 % RM’000 RM’000 RM’000

Financial assetsFixed deposits 3.7 204 204 – 3.9 15,700 15,700 –

Financial liabilitiesSecured term loans 7.3 to 8.5 16,661 16,661 – 8.2 to 10.4 17,017 17,017 – Unsecured term loan:

RM fixed rate loan 8.5 40,000 – 40,000 8.5 40,000 – 40,000Secured overdrafts 7.0 to 7.5 5,790 5,790 – 7.4 to 7.9 2,236 2,236 – Unsecured overdrafts – – – – 7.4 to 7.9 329 329 –

Company

Financial assetsFixed deposits – – – – 3.9 8,014 8,014 –Advances to subsidiary

companies 8.5 35,361 35,361 – 8.5 18,926 18,926 –

Financial liabilitiesUnsecured term loan 8.5 40,000 – 40,000 8.5 40,000 – 40,000


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2 7 .FINANCIAL INSTRUMENTS (CONT’D)

Recognised financial instruments

The carrying amounts of the financial assets and liabilities of the Group and the Company as at 31 December approximate their fair values except as set out below:

2003 2003 2002 2002Carrying Fair Carrying Fair

Group amount value amount valueRM’000 RM’000 RM’000 RM’000

Financial assetsInvestment in quoted shares 3,857 2,575 2,970 1,204Investment in quoted unit trust stocks 37 39 35 32Unquoted shares 8 * 8 *

Unquoted bonds 4,000 * 4,000 *

7,902 2,614 7,013 1,236

Financial liabilitiesSecured term loans 16,611 16,611 17,017 17,017Unsecured term loan:

RM fixed rate loan 40,000 40,000 40,000 40,000

56,611 56,611 57,017 57,017

Company

Financial assetsUnquoted bonds 4,000 * 4,000 *

Financial liabilitiesUnsecured term loan:

RM fixed rate loan 40,000 40,000 40,000 40,000

* It was not practicable to estimate the fair value of investment in unquoted company and bond.

The fair value of quoted shares is their quoted bid price at the balance sheet date. In respect of cash and cash equivalents, trade and other receivables, other payables and short term borrowings, the carrying amounts approximate fair value due to the relatively short term nature of these 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.


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2 8 .SUBSIDIARIES

The principal activities of the subsidiaries in the Group, their places of incorporation and the interest of SEG International Bhd. are as follows:

Effective interestName 2003 2002 Principal Activities

Systematic Business Training 100% 100% Provision of professional, commercial andCentre Sdn. Bhd. academic education.

Systematic Computer Centre 100% 100% Provision of computer training, commercialSdn. Bhd. and academic education.

Systematic Business Training 100% 100% Provision of professional, commercial andCentre (P.J.) Sdn. Bhd. academic education.

Systematic Business Training 100% 100% Provision of professional, commercial andCentre (PG) Sdn. Bhd. academic education.

Systematic Management Resource 100% 100% Provision of administrative and marketingCentre Sdn. Bhd. services to overseas education provider.

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

research and related business.

SEG Equity Sdn. Bhd.(Formerly known as 100% 100% Investment holding.Syschom Training Sdn. Bhd.)

Systematic NVQ Consultants 100% 100% Provision of management consultancy andSdn. Bhd. investment holding.

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

Maktab Cambridge Sdn. Bhd. 98.21% 98.21% Operation of an educationalinstitution.


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2 8 .SUBSIDIARIES (CONT’D)

Effective interestName of company 2003 2002 Principal Activities

Varia Gaya Sdn. Bhd. 95% 95% Provision of commercial education and tuition.

Systematic Secretarial Centre 75% 75% Operation of a training centre for educationSdn. Bhd. and upgrading of secretarial skills.

Mutu Unggul Sdn. Bhd. * 70% 90% Provision of professional, commercial and academic education.

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

EWI-Systematic Sdn. Bhd. 100% 100% Provision of education for professional examination.

Systematic Business Training 100% 100% Dormant.Centre (SP) Sdn. Bhd.

Berrington Bay Corporation * 100% 100% Investment holding and management consultancy.Sdn. Bhd.

Prestige Front Sdn. Bhd. * 100% 100% Property investment.

Organizational Resources * 100% 100% Provision of educational and training services.Sdn. Bhd.

Superior Element Sdn. Bhd. * 100% 100% Provision of educational and training services.

IBMS Resources Sdn. Bhd. 98% 70% Operation of an educational institution for(formerly known as IPPP Batu further studies.Lintang Sdn. Bhd.) *

IFPA Resources Sdn. Bhd. 60% 60% Provision of financial planning and financial related courses.

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

* Not audited by KPMG


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2 8 .SUBSIDIARIES (CONT’D)

Effective interestName 2003 2002 Principal Activities

Premier Media Sdn. Bhd. 98.63% 98.63% Operation of an institute providing educational programmes.

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

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

Summit Early Childhood 100% 100% Provision of childcare services.Edu-Care Sdn. Bhd. *

Montessori Focus Sdn. Bhd. * 100% 100% Provision of childcare services.

Summit Early Childhood 70% 70% Provision of childcare services.Edu-Care (Rawang) Sdn. Bhd.

Prim Edu-Services Sdn. Bhd. 100% 100% Investment holding.(formerly known as Rekaan Medianet Sdn. Bhd.)

Systematic Local Support Sdn. Bhd. 100% 100% Provision of educational and training services.

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

ORSB Centre for Professional 100% 100% Provision of recruitment and placementEducation Sdn. Bhd. * of students.

IBMS Training & Development 100% 100% Operation of a training centre for vocationalCentre Sdn. Bhd. * and professional courses.

Worldwide Accreditation Ltd * 100% – Provision of services in licensing and(Incorporated in the Republic accreditation of education programmes.of Mauritius)

Pusat Latihan KBI Sdn. Bhd. * 49% – Operation of a training centre for skill-based(owned via a 70% subsidiary) and professional courses.

* Not audited by KPMG


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2 9 .ACQUISITION OF SUBSIDIARIES

Acquisition

During the year, the Group acquired shares in the following subsidiaries for a total consideration of RM1,038 satisfied by cash. The acquisition was accounted for using the acquisition method of accounting. In the year ended 31 December 2003, the subsidiaries contributed a post-acquisition net loss of RM212,000 to the consolidated net profit for the year.

Worldwide Accreditation LtdPusat Latihan KBI Sdn. Bhd.

The fair values of assets and liabilities assumed in the acquisition of the subsidiaries and the cashflow effects are as follow:

Acquisition2003 2002

RM’000 RM’000Non current assetsProperty, plant and equipments 55 –

Current assets 18 – Current liabilities (98) –

Net assets (25) – Goodwill on acquisition 26 –

Consideration paid 1 – Cash acquired (1) –

Net cash flow – –


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3 0 .CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS

Changes in accounting policies

In the current financial year, the Group and the Company adopted three new MASB Standards. The adoption of these new standards resulted in changes in accounting policies as follows:

a) MASB 25, Income Taxes, has been adopted retrospectively. Comparative figures have been adjusted to reflect the change in this accounting policy;

b) MASB 27, Borrowing Costs, which is applied retrospectively. Comparative figures have not been restated as the previous accounting policy was in line with the accounting standard; and

c) MASB 29, Employee Benefits, has been applied retrospectively. The adoption of this standard has no material impact on the financial statements.

The adoption of MASB 25 has resulted in the recognition in full of all taxable temporary differences. Previously, deferred tax liabilities were not provided if no liability was expected to arise in the foreseeable future and there were no indications the timing differences would reverse thereafter. Deferred tax assets are now recognised when it is probable that taxable profits will be available against which the deferred tax asset can be utilised (previously only recognised where there was a reasonable expectation of realisation in the near future).

This change in accounting policies, applied retrospectively, has the following impact on results:

Group Company2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000Net profit before change in accounting

policy 14,366 5,104 6,025 3,775Effect of adopting MASB 25 7 7 7 7

Net profit for the year 14,373 5,111 6,032 3,782

Prior year adjustments

Change in accounting policies

The change in accounting policies due to the adoption of MASB 25 has been accounted for by restating comparatives and adjusting the opening balance of retained profits at 1 January 2002 as disclosed in Note 31 and the statement of changes in equity respectively.


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3 1 .COMPARATIVES

The following comparatives have been restated to reflect the correction of a change in accounting policies as explained in Note 30.

Group CompanyAs As

As previously As previouslyrestated reported restated reportedRM’000 RM’000 RM’000 RM’000

Balance sheets

Deferred tax liabilities 2,567 2,153 984 611Reserves 41,019 41,433 35,115 35,488

Income statement

Tax expense (6,019) (6,026) (2,191) (2,198)Net profit for the year 5,111 5,104 3,782 3,775

Basic earnings per ordinary share 6.46 6.45

group properties as at 31 december 2003

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Owned by Company

No. Address Approximate Areas/ Existing Tenure Approximate NBV as at Date ofDescription Use Age of 31/12/2003 Revaluation/

Building (years) (RM'000) Acquisition

1 17-19, 1,962 sq ft land area Office Freehold 22 2,250 14/12/1993Jalan Tun Tan Siew Sin with a 5 1/2-storey50050 Kuala Lumpur commercial building

2 33-35, Jalan Hang Lekiu 4,515 sq ft land area Education Freehold 26 7,460 14/12/199350100 Kuala Lumpur with a 9-storey Centre

commercial building

3 1, 3 & 5 Jalan PM3 3,534 sq ft land area Office Leasehold 6 1,642 30/7/1996Plaza Mahkota with 3 units of Expiring dateBandar Hilir 4-storey shophouses @ 25/07/209075000 Melaka

4 126 & 127, Jalan Masjid 1 2,800 sq ft land area Vacant Leasehold 9 883 13/9/1995Taman Pekan Baru with 2 units of 3 1/2 Expiring date08000 Sungai Petani, Kedah -storey shophouses @ 14/11/2092

5 16 & 18, Jalan 5/101C 2,128 sq ft land area Office Leasehold 6 2,738 25/8/1995Off Jalan Kaskas 1 with 2 units of Expiring dateCheras Business Centre 6-storey shop offices @ 07/12/207756000 Cheras Kuala Lumpur

6 36-4, 4th Floor Block B 2,910 sq ft built-up Residential Leasehold 23 107 8/1/1993Jalan Senohong area of an apartment Expiring dateTaman Cantik, Cheras @ 18/01/207656100 Kuala Lumpur

7 26-3, 3rd Floor Block A 1,297 sq ft built-up Residential Leasehold 23 71 4/4/1994Jalan Senohong area of an apartment Expiring dateTaman Cantik, Cheras @ 18/01/207656100 Kuala Lumpur

8 28-3, 3rd Floor Block A 1,297 sq ft built-up Residential Leasehold 23 71 4/4/1994Jalan Senohong area of an apartment Expiring dateTaman Cantik, Cheras @ 18/01/207656100 Kuala Lumpur

9 Lot 01 & 02 Block B 4,160 sq ft land Office Freehold 6 12,852 23/1/1996Phileo Damansara 1 area with 24 units 9, Jalan 16/11 of office suitesOff Jalan Damansara46350 Petaling Jaya

group properties as at 31 december 2003 (cont’d)

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Owned by Subsidiaries

No. Address Approximat Areas/ Existing Tenure Approximate NBV as at Date ofDescription Use Age of 31/12/2003 Revaluation/

Building (years) (RM'000) Acquisition

10 14, Jalan SS2/61 1,680 sq ft land area Education Freehold 23 1,193 28/12/199347300 Petaling Jaya with a 3 1/2 storey CentreSelangor shophouse

11 12, Jalan SS2/61 1,680 sq ft land area Education Freehold 23 1,943 01/10/200147300 Petaling Jaya with a 3 1/2-storey CentreSelangor shophouse

12 37 & 39, Jalan 1/137B 3,294 sq ft land area Vacant Leasehold 19 1,825 11/06/1996Resource Industrial Centre with 2 units of Expiring dateOff Jalan Klang Lama 4-storey shop offices @ 29/03/206558000 Kuala Lumpur

13 211, Jalan Bukit Mata 22,081 sq ft land area Education Leasehold 27 8,892 13/06/2001Kuching with 6-storey Centre Expiring date93100 Kuching commercial building @ 13/08/2785Sarawak

14 South City Plaza 21,986 sq ft built-up Vacant Leasehold 0 8,794 03/07/1998Lot 3.09a, 3rd Floor area of shoplot space Expiring datePersiaran Serdang Perdana @ 09/11/2093Taman Serdang Perdana, Section 1, 43300 Seri Kembangan, Selangor

15 South City Plaza 15,482 sq ft built-up Vacant Leasehold 0 6,194 08/01/1999Lot 3.09b, 3rd Floor area of shoplot space Expiring datePersiaran Serdang Perdana @ 09/11/2093Taman Serdang Perdana,Section 1, 43300Seri Kembangan, Selangor

16 South City Plaza, Block B 33,586 sq ft built-up Vacant Leasehold 0 10,747 03/07/1998Persiaran Serdang Perdana area in a 5 1/2-storey Expiring dateTaman Serdang Perdana, office building @ 09/11/2093Section 1, 43300Seri Kembangan, Selangor

17 South City Plaza, Block A 33,020 sq ft built-up Vacant Leasehold 0 9,400 21/10/1999Persiaran Serdang Perdana area in a 5 1/2-storey Expiring dateTaman Serdang Perdana, office building @ 09/11/2093Section 1, 43300Seri Kembangan, Selangor

analysis of shareholdings as at 22 april 2004

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Authorised Share Capital : RM100,000,000Issued and fully paid-up : RM81,999,255Class of shares : Ordinary shares of RM1.00 eachVoting rights : One vote per RM1.00 share

Distribution Schedule of Shareholdings

No. of % of No. of % of issuedSize of shareholdings shareholders shareholders shares capital

1 – 99 21 0.86 757 0.01100 – 1,000 425 17.30 354,551 0.431,001 – 10,000 1,744 70.98 5,579,260 6.8010,001 – 100,000 203 8.26 5,126,037 6.25100,001 – less than 5% of issued shares 60 2.44 47,218,827 57.585% and above of issued shares 4 0.16 23,719,823 28.93

TOTAL 2,457 100.00 81,999,255 100.00

substantial shareholders as at 22 april 2004

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

No. of shares heldName of Shareholders Direct % Indirect %

1. Kumpulan Emas Berhad (“KEB”) 21,520,025 26.24 2,235,000 ## 2.732. Dato’ (Dr) Patrick Teoh Seng Foo 568,000 0.69 23,755,025 ** 28.973. Tan Sri Dato’ Seri (Dr) Abdullah bin Ayub 21,200 0.03 18,982,078 + 23.154. Koperasi Pegawai-pegawai Melayu Malaysia Bhd (“MOCCIS”) 15,226,865 18.57 – –5. Datin Fadzilah bte Saad – – 15,226,865 * 18.576. Dato’ Pahamin A. Rajab – – 15,226,865 * 18.577. Tuan Haji Mohd Razi bin Yaacob – – 15,226,865 * 18.57

directors’ shareholdings as at 22 april 2004

No. of shares heldName of Directors Direct % Indirect %

1. Tan Sri Dato’ Seri (Dr) Abdullah bin Ayub 21,200 0.01 18,982,078 + 23.152. Dato’ (Dr) Patrick Teoh Seng Foo 568,000 0.69 23,755,025 ** 28.973. Dato’ Clement Hii Chii Kok 896,000 0.98 – –4. Dato’ Seri Megat Najmuddin bin Datuk Seri Dr Haji Megat Khas 72,297 0.09 – –5. Dato’ Pahamin A. Rajab – – 15,226,865 * 18.576. Datin Fadzilah bte Saad – – 15,226,865 * 18.577. Tuan Haji Mohd Razi bin Yaacob – – 15,226,865 * 18.57

* Deemed interest held through Koperasi Pegawai-pegawai Melayu Malaysia Bhd. ** Deemed interest held through his direct and indirect interest in KEB + Deemed interest held through MOCCIS and Ladang MOCCIS Sdn. Bhd.## Deemed interest held through Sawitani Sdn. Bhd. a wholly-owned subsidiary of KEB

thirty largest shareholders

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Name of shareholders No. of shares %

1. Alliancegroup Nominees (Tempatan) Sdn. Bhd. 7,490,000 9.13Alliance Merchant Nominees (Tempatan) Sdn. Bhd.- Kumpulan Emas Berhad

2. Mayban Nominees (Tempatan) Sdn. Bhd. 7,000,000 8.54Aseambankers Malaysia Berhad- Koperasi Pegawai-Pegawai Melayu Malaysia Bhd.

3. AMMB Nominees (Tempatan) Sdn. Bhd. 4,831,123 5.89Amtrustee Berhad - Kumpulan Emas Berhad

4. HSBC Nominees (Tempatan) Sdn. Bhd. 4,398,700 5.36HSBC (M) Trustee Bhd.- OSK-UOB Small Cap Opportunity Unit Trust

5. Cimsec Nominees (Tempatan) Sdn. Bhd. 3,945,780 4.81- Kumpulan Emas Berhad

6. Minister of Finance 3,112,000 3.80Akaun Jaminan Pinjaman Kerajaan Persekutuan

7. Universal Trustee (Malaysia) Berhad 2,880,300 3.51SBB Emerging Companies Growth Fund

8. Merchant Nominees (Tempatan) Sdn. Bhd. 2,410,000 2.94- Koperasi Pegawai-Pegawai Melayu Malaysia Bhd.

9. Universal Trustee (Malaysia) Berhad 2,282,100 2.78SBB Premium Capital Fund

10. Merchant Nominees (Tempatan) Sdn. Bhd. 2,260,000 2.76- Ladang MOCCIS Sdn. Bhd.

11. MIDF Sisma Nominees (Tempatan) Sdn. Bhd. 2,235,000 2.73- Sawitani Sdn. Bhd.

12. Koperasi Pegawai-Pegawai Melayu Malaysia Bhd. 2,704,865 3.30

13. Public Nominees (Tempatan) Sdn. Bhd. 2,000,000 2.44- Kumpulan Emas Berhad

14. Kumpulan Emas Berhad 1,716,122 2.09

thirty largest shareholders

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Name of shareholders No. of shares %

15. Ladang MOCCIS Sdn. Bhd. 1,495,213 1.82

16. Universal Trustee (Malaysia) Berhad 1,359,800 1.66Alliance First Fund

17. Mah Ming Yuet 1,253,783 1.53

18. Malaysia Nominees (Tempatan) Sendirian Berhad 1,112,400 1.36Great Eastern Life Assurance (Malaysia) Berhad

19. BHLB Trustee Berhad 1,045,500 1.28TA Small Cap Fund

20. Mayban Nominees (Tempatan) Sdn. Bhd. 1,003,000 1.22Malaysian Trustees Berhad - Mayban Smallcap Trust Fund

21. Lembaga Tabung Angkatan Tentera 900,000 1.10

22. Bank Kerjasama Rakyat Malaysia Berhad 870,000 1.06- Kumpulan Emas Berhad

23. SBBAM Nominees (Tempatan) Sdn. Bhd. 783,000 0.95Yayasan Mohd Noah

24. Hii Chii Kok @ Hii Chee Kok 776,000 0.95

25. Universal Trustee (Malaysia) Berhad 600,000 0.73SBB Dana Al-Azam

26. HDM Nominees (Tempatan) Sdn. Bhd. 574,000 0.70- Kumpulan Emas Berhad

27. Mayban Nominees (Tempatan) Sdn. Bhd. 568,000 0.69- Teoh Seng Foo

28. BBMB Securities Nominees (Tempatan) Sdn. Bhd. 558,600 0.68Perdana Technology Venture Sdn. Bhd.

29. Tan Hong Aik 478,800 0.58

30. Employees Provident Fund Board 467,200 0.57

This page is intentionally left blank.

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 Eighteenth Annual General Meeting of theCompany to be held at Room Pahlawan 1, Level 5, The Summit Hotel, Subang USJ, Persiaran Kewajipan, USJ1, 47600 UEP Subang Jaya, Selangor DarulEhsan on Wednesday, 23 June 2004 at 10.30 a.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":

RESOLUTIONS FOR AGAINST

1. To adopt the audited Financial Statements and Reports

2. To declare a final dividend of 8% less tax

3. To approve the payment of Directors' Fees

4. To re-elect the following as Directors:

(a) YBhg Dato' Clement Hii Chii Kok

(b) Mr Amos Siew Boon Yeong

(c) Mr Simon Hue Fook Chuan

5. To re-elect YBhg Tan Sri Dato' Seri (Dr) Abdullah bin Ayub as Director pursuant to Section 129 of the Companies Act, 1965.

6. To re-appoint Messrs KPMG as Auditors and authorise the Directors to fix their remuneration.

7. As special business, to approve the ordinary resolution pursuant to Section 132D of the Companies Act, 1965.

Dated this __________ day of __________ 2004

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 theperson(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 10th Floor, Menara Summit, 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.

(Incorporate in Malaysia) (145998-U)

Form of Proxy

SEG INTERNATIONAL BHD. (145998-U)

10th Floor, Menara Summit, Persiaran Kewajipan, USJ147600 UEP Subang JayaSelangor Darul Ehsan

STAMP

Fold here

Fold here

NORTHERN REGION..............................................Systematic College, Penang33c, Lebuh PantaiElceetee Building10300 Penang Tel: 604 262 8127Fax: 604 262 [email protected]

PRIME College, Bukit MertajamG45, The Summit, BM PlazaLevel 8, Wisma SummitNo.566, Jalan Arumugam Pilai14000 Bukit Mertajam, PenangTel: 604 537 0020Fax: 604 537 [email protected]

PRIME Training &Development Centre, Alor Setar17-18, Jalan Tengah05100 Alor SetarKedah Darul AmanTel: 604 733 9199Fax: 604 732 [email protected]

CENTRAL REGION..............................................Systematic College, Kuala LumpurBangunan Systematic, 33-35, Jalan Hang Lekiu50100 Kuala LumpurTel: 603 2070 2078Fax: 603 2034 [email protected]

Systematic College, Petaling Jaya10-18, Jalan SS2/61, 47300 Petaling JayaSelangor Darul EhsanTel: 603 7875 7118Fax: 603 7874 [email protected]

Systematic Institute of IT,Kuala Lumpur14-20, Luen Heng BuildingJalan Hang Lekir50000 Kuala LumpurTel: 603 2072 2536Fax: 603 2072 [email protected]

Sytematic Secretarial Centre,Kuala Lumpur14-20, Grd FloorLuen Heng BuildingJalan Hang Lekir50000 Kuala LumpurTel: 603 2070 1406Fax: 603 2072 [email protected]

Institute Systematic, Klang14-22, Jalan Kepayang Off Jalan Meru41050 KlangSelangor Darul EhsanTel: 603 3342 2655Fax: 603 3342 [email protected]

PRIME College, USJ4th Floor, The SummitPersiaran Kewajipan USJ147600 UEP Subang JayaSelangor Darul EhsanTel: 603 8600 1888Fax: 603 8600 [email protected]

MSC International College,USJ3rd Floor, The SummitPersiaran Kewajipan USJ147600 UEP Subang JayaSelangor Darul EhsanTel: 603 8600 1888Fax: 603 8600 [email protected]

Pusat Tuisyen Makmur, Klang4th Floor, 14-22Jalan Kepayang, Off Jalan Meru41050 KlangSelangor Darul EhsanTel: 603 3342 6555Fax: 603 3343 [email protected]

Summit International College,USJ3rd Floor, The SummitPersiaran Kewajipan USJ147600 UEP Subang JayaSelangor Darul EhsanTel: 603 8600 1888Fax: 603 8600 [email protected]

Systematic ManagementResource Centre, USJ4th Floor, The SummitPersiaran Kewajipan USJ147600 UEP Subang JayaSelangor Darul EhsanTel: 603 8023 2616Fax: 603 8023 [email protected]

IFPA Resources, USJ4th Floor, The SummitPersiaran Kewajipan USJ147600 UEP Subang JayaSelangor Darul EhsanTel: 603 8023 5911Fax: 603 8023 [email protected]

SBT Professional Publications,USJ10th Floor, Menara SummitPersiaran Kewajipan USJ147600 UEP Subang JayaSelangor Darul EhsanTel: 603 8026 5888Fax: 603 8026 [email protected]

EAST MALAYSIA..............................................Institut Systematic, Kuching15, Block B, King's CentreJalan Simpang 393350 Kuching, SarawakTel: 6082 577 588Fax: 6082 458 607/576 [email protected]

IBMS Training & Development Centre, Kuching211, Jalan Bukit Mata Kuching93100 KuchingSarawakTel: 6082 256 625Fax: 6082 231 [email protected]

IBMS College, Kuching211, Jalan Bukit Mata Kuching93100 KuchingSarawakTel: 6082 252 566Fax: 6082 231 [email protected]

Systematic Training Centre,SerianGrd Floor, Lot 279-280Taman Pasir94700 SerianSarawakTel: 6082 872 688Fax: 6082 448 [email protected]

PRIME College, MiriLot 2842, Lorong 8Jalan Lee FohKrokop, 98000 MiriSarawakTel: 6085 4390082/079Fax: 6085 439 [email protected]

SOUTHERN REGION..............................................Systematic College, Johor BahruLevel 32, Mail Box 230,Menara Landmark12, Jalan Ngee Heng80000 Johor BahruJohorTel: 607 224 4622/223 1872Fax: 607 223 [email protected]

INTERNATIONAL..............................................Worldwide Accreditation Ltd5th Floor Anglo Mauritius Home4, Intendance StreetPort LouisMauritius

SEGi EDUCATION NETWORK

OUR PARTNERS AROUND THE WORLD

PARTNER UNIVERSITIES

UNITED KINGDOM• University of Greenwich, UK• Bolton University, UK PARTNER PROFESSIONAL BODIES• Association of Chartered Certified Accountants• London Chamber of Commerce• Institute of Chartered Secretaries & Administrators• Chartered Institute of Management Accountants• Chartered Institute of Marketing• Association of Business Executives• National Computing Centre Education Services Ltd

SCOTLAND• University of Abertay Dundee, Scotland

SEGI’S FOREIGN COLLABORATIVE ARRANGEMENTS:

INDIA• Institute of International Studies, Hyderabad• Institute of International Studies, Bangalore• Edusource Student Services Pte Ltd, Chennai

SRI LANKA• Access Engineering Ltd


SINGAPORE• RVMS International Pte Ltd • Systematic College Singapore

INDONESIA• Yayasan Pendidikan Interstudi, Jakarta

MYANMAR• RVMS Management Services Co Ltd, Rangoon

VIETNAM• RV Center for Human Resource Development, Ho Jin Minh City

CAMBODIA• RVMS International (Cambodia) Ltd

LAOS• RVMS Management Services (Laos) Ltd

VIETNAM• RV Center for Human Resource Development, Ho Jin Minh City

CAMBODIA• RVMS International (Cambodia) Ltd

LAOS• RVMS Management Services (Laos) Ltd


CHINA • Yangzhou Polytechnic College, Jiangsu Province • Weifang University, Shandong Province • Lion International College, Guangdong Province • Beijing China USA United Education Development Co Ltd, Beijing • Beijing China USA United Education Development Co Ltd, Jinan • Hangzhou Business College, Zhejiang Province • Shenzhen Training Center & Service Bureau, Shenzhen Province • Qilu International Training College, Shandong Province

HONG KONG• Campus International Chartered Education • Campus Business Correspondence School

PARTNER UNIVERSITIES• University of Southern Queensland, Australia• University of Sunshine Coast, Australia• James Cook University, Australia• University of Newcastle Australia, Australia

financial statements for the year ended 31 december...

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