MEGB-AnnualReport2012

Masterskill Education Group Berhad

ANNUAL REPORT 2012

EMBARKING ON NEW HORIZONS

MA

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Annual R

eport 2012

MASTERSKILL EDUCATION GROUP BERHAD(Company Number: 746920-M)

MAIN CAMPUS - CHERAS SELANGORG-8, Jalan Kemacahaya 11, Taman Kemacahaya,Batu 9, 43200 Cheras, Selangor Darul Ehsan, Malaysia.Tel: 603-9080 5888 Fax: 603-9080 1995E-mail: [email protected]

Contents


FinanCial Contents

10Directors’ Profile

52Analysis of Shareholdings

66notes to The Financial statements

04Corporate Information

35statement on Risk Management And Internal Control

17AcademicManagementteam

61Statements of Profit or Loss and Other Comprehensive income

02Corporate Highlights

25statement on Corporate Governance

14Academic - Upgraded And Repositioned …

56Directors’ Report

64Statements of Cash Flows

06Chairman’s Message

38List of Properties

05Corporate structure

37Additional Compliance Information

22Corporate Social Responsibility

18Major events

62statements of Changes in Equity

16University (aMU) Council of trustees

60Statements of Financial Position

03Financial Highlights

32Audit Committee Report

110Independent Auditors’ Report

Form of Proxy

112Notice of Annual General Meeting

109Statement by Directors

108SupplementaryInformation

02 Masterskill Education Group Berhad / Annual Report 2012

CoRPoRate HiGHliGHts

Masterskill Education Group Berhad (MEGB) is a leading operator in Allied Health and Non Allied Health in Malaysia, principally engaged in the provision of higher education and training in nursing, medical and allied health via its subsidiary company.

MEGB encompasses two associate institutions, i.e. asia Metropolitan University (AMU) that officially attained university status in 2012 and Masterskill Global Colleges (MGC) that was registered with the Ministry of Higher Education in 2004.

As the premier provider of holistic education in Allied Health and Non Allied Health in the country, MEGB aims to meet the human capital needs of the world. We prepare our students to function effectively in multifaceted roles in a variety of settings to promote the health and well-being of every individual and strive to build an inquisitive mind, motivate academic excellence as well as foster lifelong learning in all our students.

AMU is strategically located throughout Malaysia operating three (3) campuses in Cheras and Petaling Jaya, Selangor as well as Seri Alam, Johor Bharu. The MGC campuses are located in Ipoh, Perak; Kota Bharu, Kelantan; Kuching, Sarawak and Kota Kinabalu, Sabah.

The Group has an active student base of 8,643 students as at end of 2012.

Total assets at RM519 million.

Shareholders equity stood at RM422 million.

To further increase shareholders value and return, the Group has expanded into the non-health science programmes beginning 2012 in offering programmes in relation to business. Beginning 2013 more programmes will be introduced in the areas of hospitality and tourism, information, communication and technology as well as engineering. On the international expansion, the Company will focus on the franchising method and recruitment of international student across Asia Pacific.

03Masterskill Education Group Berhad / Annual Report 2012

FinanCial HiGHliGHts

REvEnuE BREakdown (RM million)


EBITda (RM million)

2012

2008

2009

2010

2011

90.0

123.7

131.6

64.4

(9.2)

PaT (RM million)

2012

2008

2009

2011

72.1

97.4

38.1

(28.2)

102.12010

PBT (RM million)

2012

2008

2009

2011

2010

80.1

112.3

118.0

43.0

(35.4)

Foundation

Diploma

Degree

2012

2008

2009

2010

2011

1.2(0.8%)

202.9(100%)

271(99.1%)

1.9(0.7%)

0.5(0.2%)

2.0(0.6%)

2.4(1.0%)

306.9(97.2%)

232.9(93.1%)

14.9(6.0%)

16.7(11.2%)

6.8(2.2%)

130.9(88.0%)

2012

2008

2009

2010

2011

202.9

273.4

315.7

250.2

148.8


Registration , processing fees and others

Nursing

Allied Health

2012

2008

2009

2010

2011

103.7(70%)

9.5(6%)

13.8(5%)

124.8(61%)

16.0(9%)

185.2(66%)

200.4(63%)

164.5(66%)

9.5(4%)

2.3 (1%)

62.1(30%)

78.7(28%)

101.5(32%)

76.2(30%)

42.8(29%)


CoRPoRate inFoRMation

BoaRd oF dIRECToRS

YTM Tunku dato’ Seri kamel Bin Tunku Rijaludin(Independent Non-Executive Chairman)

Siva kumar a/l M Jeyapalan(Executive Director)

dato’ Sri dr. Santhara kumar a/l Ramanaidu (also known as Dato’ Sri Dr. Edmund Santhara) (Non-Independent Non-Executive Director)

datuk kamarudin Bin Md. ali(Independent Non-Executive Director)

Richard Todd Scanlon(Non-Independent Non-Executive Director)(Alternate Director to Richard Todd Scanlon - Lim Yong Chye Lawrence)

wisun Soon(Senior Independent Non-Executive Director)

Mathuraiveran a/l Marimuthu(Independent Non-Executive Director)

audIT CoMMITTEE

datuk kamarudin Bin Md. ali (Chairman)

wisun Soon(Member)

Mathuraiveran a/l Marimuthu (Member)

REMunERaTIon CoMMITTEE

YTM Tunku dato’ Seri kamel Bin Tunku Rijaludin(Chairman)

datuk kamarudin Bin Md. ali(Member)

wisun Soon(Member)

noMInaTInG CoMMITTEE

wisun Soon(Chairman)

YTM Tunku dato’ Seri kamel Bin Tunku Rijaludin(Member)

datuk kamarudin Bin Md. ali (Member)

CoMPanY SECRETaRY

Jasmindar kaur a/p Sarban Singh(MAICSA 7002687)

audIToRS

Messrs KPMGLevel 10, KPMG Tower8, First AvenueBandar Utama47800 Petaling JayaSelangor Darul EhsanMalaysia.Tel : (603)-7721 3388Fax : (603)-7721 3399

REGISTEREd oFFICE

Masterskill Education Group Berhad(Company No : 746920-M)B-13-15, Level 13, Menara Prima Tower BJalan PJU 1/39, Dataran Prima47301 Petaling JayaSelangor Darul EhsanTel No : (603)-7491 4318 Fax No : (603)-7887 2318

HEad oFFICE

G-8, Jalan Kemacahaya 11Taman Kemacahaya, Batu 943200 Cheras, Selangor Darul EhsanMalaysiaTel : (603)-9080 5888Fax : (603)-9080 1995

SHaRE REGISTRaR

Symphony Share Registrars Sdn. Bhd.Level 6, Symphony HousePusat Dagangan Dana 1, Jalan PJU 1A/46 47301 Petaling Jaya, Selangor Darul EhsanMalaysiaTel : (603)-7841 8000Fax : (603)-7841 8151/8152

PRInCIPaL BankER

CIMB Bank BerhadCIMB Islamic Bank BerhadAmIslamic Bank Berhad

SoLICIToR

BH Lawrence & Co

SToCk EXCHanGE LISTInG

Main Market of Bursa Malaysia Securities Berhad(Listed since 18 May 2010)(Stock code: 5166)


CoRPoRatestRUCtURe

MaSTERSkILL CaMPuS ManaGEMEnT Sdn. BHd.

(100%)

MaSTERSkILL InTERnaTIonaL InCoRPoRaTEd

(100%)

vaLEnCIa EduCaTIonGRouP Sdn. BHd.

(fka Masterskill WorldwideManagement Sdn. Bhd.)

(70%)

aSPIRaTIon aCHIEvERS nETwoRk Sdn. BHd.

(fka Unihealth EducationGroup Sdn. Bhd.)

(100%)

MaSTERSkILL (M) Sdn. BHd.

(100%)

MuCH Sdn. Bhd.

Masterskill Resources Sdn. Bhd.

Medic Express Sdn. Bhd.

Masterskill Physiotherapy and Rehabilitation Centre Sdn. Bhd.

Masterskill dialysis Sdn. Bhd.

Masterskill International Sdn. Bhd.

unihealth (M) Sdn. Bhd.

Masterskill Gerontology Sdn. Bhd.

100%

100%

100%

100%

100%

100%

100%

100%


CHaiRMan’s MessaGe

on behalf of the Board of directors, I present the Annual Report of the MEGB for the financial year ended 31 december 2012.

YTM Tunku dato’ Seri kamel Bin Tunku Rijaludin


The Group has practiced continuous improvement in the development of education through research and practicing the best methods as well as providing quality educational services through the latest facilities and partnerships with global institutions that share our passion and beliefs.

PERFoRManCE REvIEw

The group’s revenue took a dip as opposed to the preceeding year. The revenue for 2012 stood at RM148.8 million as compared to RM50.2 million in 2011. The EBITDA for the year 2012 closed at a loss of RM9,205 as opposed to RM64,402 for 2011.

The shortfall in student enrollment caused the decline in revenue. The Group’s financial performance for the year was bad, however our balance sheet is strong to weather the challenges. Against this backdrop, the Company will moderately expand business through overseas student recruitment, international school initiative and foreign partnership.

oPERaTIonaL REvIEw

I am delighted to report that the launching of MEGB’s new flagship campus in Petaling Jaya, Selangor that will mark our commitment to provide higher quality learning opportunities for Malaysians.

The full-fledged campus is equipped with state of the art facilities to provide a range of academic courses, particularly in niche management areas.

As for the year under review, the decline in profits was mainly due to lower student enrolment. There were many hurdles that the group had to overcome and the relentless struggles to overcome these obstacles are still ongoing.

The PTPTN loan scheme which was reduced from RM60,000 to RM45,000 for each diploma students is just one of the many hurdles in the path of the Group.

The decision by the Malaysian Nursing Board to increase the minimum entry requirement for the diploma in nursing programme from 3 credits to 5 credits at the Sijil Pelajaran Malaysia (SPM) was another underlining factor to the obstacles faced by MEGB.

As MEGB realized the blistering change in the pace of the macro environment, the Group endeavored to rise to the challenge that would take MEGB to a higher plateau in the educational front.

With the recent signing of the MoU between Dr. Lyndon Jones, the Founder Chairman of the Association of Business Executives (ABE), UK with MEGB, AMU and MGC are now able to open their doors to students across Malaysia who are intending to pursue their Certificates to Graduate Diploma levels in ABE which allow students to pursue an MBA qualification.


The signing of the MoU on the 17, December 2012 has opened the window of opportunity for AMU and MGC students intending to pursue their studies in the UK after the completion of their ABE diploma or higher diploma. The ABE qualification is recognized by more than 80 universities across the globe.

Another major milestone is that AMU has now joined the ranks of premier institutions around the world that have committed themselves in providing top notch facilities at the AMU Campus. It is our steadfast belief that our delivery of quality education needs to be supported with good facilities for the students. By achieving this Premier Status, awarded by Accreditation Services for International Schools, Colleges & Universities (ASIC), UK. MEGB has become one of the selected universities in Malaysia that has achieved this recognition.

AMU has also been given the recognition as one of the private university recognized by the China Government. This recognition has opened AMU doors for China students to purse their studies at AMU Campuses that is in tandem with the Group’s strategy to bring in more international students to its campuses.

The Group’s contributions go beyond plain financial objectives and educational opportunities. The Group actively encourages its employees to support and participate in the various community service projects and philanthropic activities. MEGB for the year 2012 had also continuously participated in numerous Corporate Social Responsibility (CSR) activities to make the world a better place for the future generations.

dIvIdEndS

During the year, the Group paid total dividends of RM65.7 million or 16 sen per share.

PRoSPECTS

Over the recent year, the Group has undergone many changes including a major restructuring exercise and re-branding. We are now proudly known as aSIA Metropolitan University and Masterskill Global Colleges.

CHaiRMan’s MessaGe


The University is now offering foundation, diploma and bachelors degree programme until post-graduate level in business related programme and not just focused on healthcare. In 2013, the University will expand its programme offerings into Computing and Smart Technology, Hospitality and Tourism as well as partnership with foreign universities for engineering, sports science, dementia studies and others.

Another major initiative embarked by the Company is the international school. The Ministry of Education Malaysia has granted one of the company subsidiary the license to operate an international school. The Ipoh campus has been earmarked as the site for the international school.

The current financial year will be an exciting one which offers both anticipated and unprecedented challenges. The Group has begun its operations as a University and will offer new fields of programmes. We are also stepping up efforts to intensify research and development to further cater to the demands of post graduate students in the fast paced education sector.

The Group’s steadfast determination and collaboration between the industry leaders has enabled MEGB to achieve rapid transformation over the recent years. The Group is confident of achieving greater success in providing quality education with a strong foundation that we have fostered thus far.

aPPRECIaTIon

Therefore on behalf of the Board, I wish to extend my sincere appreciation to our valued Board of Directors, the shareholders, the staff and the management for the undying commitment and selfless dedication to the Group.

I also like take this opportunity to thank Dato’ Sri Dr. Edmund Santhara for his valuable contribution to the Group. He has choosen to step down as the Group Chief Executive Officer and pursue his personal interest. We wish him all the best. We welcome Mr. Siva Kumar as the Executive Director, responsible for managing the daily operations of the Group and its subsidiaries.

YTM Tunku dato’ Seri kamel Bin Tunku RijaludinChairman


DiReCtoRs’ PRoFile


YTM Tunku daTo’ SERI kaMEL BIn Tunku RIJaLudInIndependent Non-Executive Chairman

YTM Tunku Dato’ Seri Kamel Bin Tunku Rijaludin, Malaysian, aged 59, was appointed as a Non-Executive Director of the Company on 26 May 2008 and on 29 January 2010, he was re-designated as Independent Non-Executive Chairman of the Company. He is also the Chairman of the Remuneration Committee and a member of the Audit Committee and Nominating Committee of the Company.

He graduated with a Bachelor of Science (Honours) degree in Forestry in 1979 and a Master of Business Administration in 1981 from the University of Tennessee, Knoxville, USA.

He started his career in 1981 as a management consultant in Sycip Gorres & Velayos - Kassim Chan. In 1983, he joined Kedah Cement Sdn. Bhd. and worked in the purchasing department until he was appointed as a manager of international sales. In 1990, he left Kedah Cement Sdn. Bhd. to join Asli Jardine Insurance as a general manager. From 1995 to 2002, he served as the Chairman of Dagang Net Technologies Sdn. Bhd., an information technology company which specialises in managing port, logistics and customs related e-transactions.

Currently he is a director of Dwitasik Sdn. Bhd., a diversified company and he is also the Chairman of QC Protection & Investigation Services Sdn. Bhd. which is involved in the security services industry. He is also an Independent Non-Executive Chairman of Amtel Holdings Berhad and also sits on the Board of other private companies.

SIva kuMaR a/L M JEYaPaLanExecutive Director

Siva Kumar a/l M Jeyapalan, Malaysian, aged 42, was appointed as a Non-Independent Non-Executive Director of the Company on 15 April 2013 and subsequently re-designated to an Executive Director on 17 April 2013.

He graduated from the University Technology Malaysia as a Bachelor of Mechanical Engineering.

He is currently a director of his family owned company and manages his own investments in various private and listed companies. An engineer by profession, he has worked with Accenture, an international management consulting company as an analyst between 1994 to 1996. He later joined AmInvestment Bank Berhad as Assistant Manager, Corporate Finance until 2001 with main responsibilies in corporate and financial advisory involving Mergers & Acquisitions, Initial Public Offering, Corporate Restructuring and Fund Raising. Since 2002, Mr. Siva via his family owned company has been a substantial shareholder in various private and public companies. He was a Director in Masterskill (M) Sdn. Bhd. in 2006.


daTo’ SRI dR. EdMund SanTHaRaNon-Independent Non-Executive Director

Dato’ Sri Dr. Edmund Santhara, Malaysian, aged 42, was appointed as an Executive Director on 26 May 2008 and re-designated as Group Chief Executive Officer (“GCEO”) on 1 January 2010. He was subsequently resigned as the Group CEO and re-designated as a Non-Independent Non-Executive Director on 17 April 2013.

He graduated in 1994 with a Bachelor of Business Administration (Honours) second class upper from National University of Malaysia (UKM). He subsequently obtained a Master of Business Administration from University of Strathclyde, Scotland in 1998. He also obtained a Postgraduate Diploma in Marketing from the Chartered Institute of Marketing (CIM), United Kingdom in 1999. He obtained a Doctorate in Business Administration from University of Newcastle, Australia in 2011. He is currently pursuing his Executive Master Degree in Clinical Approaches to Management in INSEAD, Singapore.

Dato’ Sri Dr. Edmund Santhara was admitted as a member of the Malaysian Institute of Management in 1999 and elevated to fellow member (FMIM) in 2011. In 2007, he was admitted as a member of the Malaysian Institute of Human Resource Management and the Chartered Institute of Marketing, Malaysia and elevated to fellow member (FCIM & FMIHRM) in 2011. In 2007, he was also admitted as an associate member of the Harvard Business School Alumni Club of Malaysia after completing the ASEAN Senior Management Development Programme. As an alumnus of University of Strathclyde, Glasgow in Scotland, he was elected as the President of the University Strathclyde Alumni of Malaysia in 2011.

A successful entrepreneur, Dato’ Sri Dr. Edmund Santhara brings with him over 12 years experience in marketing, marketing development and competitive intelligence having held many key positions in the previous organisations in Information Technology and Higher Education Industry prior to joining Masterskill Group. He was a member of senior management in one of the largest Information Technology University in Malaysia. He joined Masterskill (M) Sdn. Bhd. (“Masterskill”), a wholly-owned subsidiary of the Company in October 2004 as Director of Business Development, where his duties included enhancing the Company’s business opportunities and development to spur growth.

He conceptualised, planned, implemented and managed projects which eventually boosted Masterskill’s revenue. In January 2005, he was promoted to the position of Chief Operating Officer where he was responsible for the overall management of Masterskill including formulating company policies, rules and regulations. In September 2005, he became the Chief Executive Officer of Masterskill, responsible for delivering and driving revenue growth, mobilising the business, implementing international franchise models, executing the Company’s overall management policies and guidelines, leading the overall business activities and supervising the overall management of Masterskill. He resigned as a Director of Masterskill on 18 April 2013.

He was named Malaysia’s Ernst & Young Emerging Entrepreneur of the Year 2007 and simultaneously won the Malaysian Entrepreneur of the Year award to represent Malaysia in Monte Carlo at the Ernst & Young World Entrepreneur of the Year Award. He was also selected to receive the 2007 National Youth Award (Special Category) from the Prime Minister of Malaysia on the National Youth Day. In November 2008, he represented Malaysia in the Creative Young Entrepreneur Award competition at the Junior Chamber International World Congress in New Delhi and won the world award. In 2009, he was awarded the Brand Personality Award by the Asia Pacific Brands Foundation and The Brand Laureatte.

Recognized for his exceptional entrepreneurship, he was awarded the Outstanding Entrepreneur of the Year in the 1Malaysia Entrepreneur Awards in 2010. In November 2011, Dato’ Sri Dr. Edmund Santhara was honoured as one of the Junior Chamber International Ten Outstanding Young Persons of the World, awarded by Junior Chamber International at the JCI World Congress in Brussels, Belgium.

Dato’ Sri Dr. Edmund Santhara currently serves as the President and the Founder of the Malaysian Intellect Development Foundation (MIDF), a position he has held since 2007. Having the passion for Chess, he has also been serving as the President of the Kuala Lumpur Chess Association (KLCA) since 2010.


DiReCtoRs’ PRoFile

daTuk kaMaRudIn BIn Md. aLI Independent Non-Executive Director

Datuk Kamarudin Bin Md. Ali, Malaysian, aged 62, is an Independent Non-Executive Director of the Company and was appointed on 26 May 2008. He is also the Chairman of the Audit Committee and a member of the Nominating Committee and Remuneration Committee of the Company.

In 1976, he graduated with a Bachelor of Science (Honours) in Mechani-cal Engineering from the University of Strathclyde in Glasgow, Scotland and subsequently obtained a Master of Science in Thermodynamics from the University of Birmingham, United Kingdom in 1980.

He started his career with the Royal Malaysian Police (the “RMP”) in 1970 and has during his tenure with the RMP gained over 30 years experience, knowledge and skills in logistic and finance management, manpower development, strategic planning, training and development, recruitment and selection, career development and crime prevention through a wide range of command posts and managerial capacities. He was the Chief Police Officer of Kuala Lumpur and Johor with the rank of Deputy Commissioner. In 2001, he was selected to attend a one (1) year post-graduate programme at the prestigious Royal College of Defence Studies, United Kingdom. He was subsequently promoted to the rank of Police Commissioner and held the position of Director of Management before retiring from the RMP in 2006.

He is active in non-governmental organisations and is noted for his con-tributions in the Malaysian Crime Prevention Foundation of which he is one of the three Vice Chairmen.

He is a director of ECM Libra Financial Group Berhad, Ann Joo Resource Berhad, Libra Invest Berhad, Gabungan AQRS Berhad and various other private limited companies.

MaTHuRaIvERan a/L MaRIMuTHuIndependent Non-Executive Director

Mathuraiveran a/l Marimuthu, Malaysian, aged 50, was appointed as an Independent Non-Executive Director of the Company on 1 July 2012. He is also a member of the Audit Committee of the Company.

He graduated with a Bachelor of Business Administration (Accounting), Memphis State University, Memphis, Tennessee, USA and obtain the MBA (Finance), School of Management, University of Hull, U.K. He is also a Certified Internal Auditor (CIA), USA, and a Chartered Accountant (CA).

He was the President of The Institute of Internal Auditors (IIA) Malaysia in 1997/98. He has over 25 years of professional experience in Internal Auditing, External Auditing, Commerce, and Consulting. His last position in the corporate world was General Manager, Internal Audit of a public listed company which was part of a large conglomerate in Malaysia, taking charge of Internal Audit, Risk Management and Quality Management. He has been involved in bringing the Certified Internal Auditor Examination to Malaysia. He is currently the Managing Director of Beam Group of Companies and sits in unlisted Boards. He is a member of Malaysian Institute of Accountants and The Institute of Internal Auditors Malaysia.

wISun SoonSenior Independent Non-Executive Director

Wisun Soon, Malaysian, aged 44, was appointed as an Independent Non-Executive Director of the Company on 24 April 2012. He was re-designated as a Senior Independent Non-Executive Director of the Company and appointed as the Chairman of the Nominating Committee on 22 October 2012. He is also the member to the Audit Committee and Remuneration Committee of the Company.

He graduated from the University of Technology Sydney, Australia with honours in Finance and Economics in 1992.

He started his career in 1993 as a Corporate Finance Executive in Arab-Malaysian Merchant Bank Berhad (now known as AmInvestment Bank Berhad). He was responsible in corporate advisory which involves advising companies for initial public offerings, mergers and acquisitions and corporate restructurings. He joined the KAF Group in 2004 where he was responsible to engage the Group in its transformation from a discount house into a fully licensed investment bank. This was successfully done in 2006 and enabled him to form and head the Corporate Finance Department.

He stayed with the KAF Group until February 2012 where he left to join various organisations and businesses in the capacity of adviser or director. He is currently a director in various private limited companies and a trustee in Malaysian Intellect Development Foundation (MIDF).


notes: Family Relationship – Save for Dato’ Sri Dr. Santhara Kumar a/l Ramanaidu whose wife namely Datin Sri Carline a/p A. Johnson D’Cruz is a substantial shareholder of the Company, none of the Directors had any family relationship with any director and/or major shareholders of the Company.

Conflict of Interest – None of the Directors has any conflict of interest with the MEGB Group.

Conviction of offences – None of the Directors has been convicted for offences within the past 10 years other than traffic offences, if any.

attendance at Board Meetings – The attendance of the Directors at Board of Directors’ Meeting is disclosed in the Statement on Corporate Governance.

RICHaRd Todd SCanLon Non-Independent Non-Executive Director

Richard Todd Scanlon, American, aged 44, is a Non-Independent Non-Executive Director of the Company and was appointed on 18 October 2006.

He was a founding and co-managing partner of Crescent Point Group. He is a director and shareholder of various Crescent Point Group companies and their portfolio investments. In this capacity, he represents the interests of two of our direct shareholders, namely Asia Healthcare Holdings I, Ltd and Masterskill Holding Ltd.

Prior to co-founding Crescent Point Group in 2003, he worked in the investment banking divisions of Credit Suisse First Boston in New York and Singapore and Morgan Stanley in Singapore where he was involved in all functions associated with corporate finance, financial and strategic advisory and financial product origination. He graduated with a Bachelor of Arts (cum laude) with a major in Art (Architectural Emphasis) and a minor in Physics and Structural Engineering in 1993 from Middlebury College, Vermont, USA.

LIM YonG CHYE LawREnCE (Alternate Director to Richard Todd Scanlon)

Lim Yong Chye Lawrence, Singaporean, aged 44, was nominated as an alternate Director to Mr. Richard Todd Scanlon, a Non-Independent Non-Executive Director of the Company on 12 March 2012.

He is a certified accountant and fellow member of the Association of Chartered Certified Accountant (United Kingdom), Certified Public Accountant Singapore and Member of the Institute of Certified Public Accountants of Singapore (Singapore) and a Chartered Financial Analyst (United States) - CFA®.

He started his career in 1994 in the Assurance and Business Advisory division of PricewaterhouseCoopers. He joined the Investment Banking Division of Mizuho Financial Group in 1997 where he was involved in mergers and acquisitions and corporate restructuring projects in Asia. He was the Manager of PricewaterhouseCoopers Corporate Finance Pte Ltd from 1999 to 2003. He then joined DBS Bank Limited, Private Equity (“DBS Private Equity”) as a Vice President, a position he held till 2006 and was responsible for the day-to-day running of DBS Private Equity’s direct investment and fund-of-funds portfolio. As at the date of the Company’s Annual Report, he is the Chief Financial Officer of Crescent Point Group responsible for the finance, structuring and tax aspects of its global investment portfolio. He also manages Crescent Point Group’s finance and administration affairs generally.


2012 marked a year of many achievements for us, the most significant of which was the approval from the Ministry of Higher Education Malaysia (MoHE) for our university college, Masterskill University College of Health Sciences (MUCH), to be upgraded to a full-fledged university in October. With this upgrading, we took the opportunity to refocus and reposition our university from being purely health sciences and domestic market focused to being multidisciplinary and international in orientation. asia Metropolitan University, while shaped from the strengths and legacies of MUCH, is transformed and fortified by our passion and vision to deliver relevant and high quality higher education for domestic and international students in various disciplines.

Chronologically, our milestones for the year include:

• For the first time in our history, we launched two postgraduate programmes by coursework, Master of Science in Healthcare Management and Postgraduate Certificate in Teaching Methodology with the inaugural intake in March.

• Proposal on “Self Nano Emulsifying Geftinib Capsules in the Treatment of Non Small Cell Lung Cancer (NSCLC): Formulation and Bioavailability Studies” for the Fundamental Research Grant Scheme (FRGS) in the sum of RM64,600 was approved by MoHE [FRGS/1/2012/SKK02/MUCH/03/04] on 5 April 2012.

• We went through a name change for our university college and colleges as approved by MoHE in May 2012. The initial name change for our university college was temporary given the upgrading to a full-fledged university in October. In line with the rebranding and repositioning strategy, our colleges are now known as Masterskill Global College Ipoh, Kota Kinabalu, Kota Bharu and Kuching.

• Three programmes under the School of Business and Law were launched. Foundation in Business Studies and Diploma in Business Administration had their inaugural intakes on 8 October 2012 and Bachelor of Science in Business Administration had its first intake on 17 September 2012.

ACADEMIC - UPGRADED AND REPOSITIONED ……

• MUCH was officially upgraded to aSIA Metropolitan University (AMU) on 12 October 2012.

• Proclamation of the third Pro Chancellor of AMU and Convocation 2012 were held at Putrajaya International Convention Centre (PICC) on 18 to 20 October 2012. On this occasion, Dr. Devi Prasad Shetty, a world renowned cardiac surgeon in Bangalore and Chairman of the Narayana Hrudalayalaya Group of Hospitals was appointed as the third AMU Pro Chancellor. Convocation 2012 celebrated 5,675 graduands with a total of 2,147 graduands/certificate holders for AMU and a total of 3,528 graduands for MGC Ipoh, Kota Bharu and Kota Kinabalu as shown in Exhibit 1.

Exhibit 1. Convocation 2012 Total number of Graduands/Certificate Holders by Institution

(18 october 2012 – 20 october 2012)

Institution Programme

number of Graduands/Certificate

Holders

aMu

aMU

Bachelor 106Diploma 2,016Foundation 25

Total 2,147

MGCMGC ipoh All programmes 929MGC Kota Bharu All programmes 1,123MGC Kota Kinabalu All programmes 1,476MGC Kuching Nil Nil

Total 3,528

Grand Total 5,675

14


• With Convocation 2012, the cumulative number of graduands/certificate holders that we have produced is as shown in Exhibit 2.

Exhibit 2. Cumulative Number of Graduands/Certificate Holders from 2007 to 2012 by Institution

no Institution

Total number of Graduands/Certificate

Holders

1 aMU Cheras 13,7372 AMU Johor Bahru 343 MGC ipoh 1,7404 MGC Kota Bharu 1,3025 MGC Kota Kinabalu 2,0026 MGC Kuching 0

Total 18,815

• AMU is recognized by the China Government as one of the 71 Malaysian universities or university colleges for China students to study at. With this recognition, AMU is poised to receive international students from China specifically to fulfill our strategic move for internationalization.

• To fully actualize on our strategic thrusts for diversification and internationalization, we had developed and submitted to the Malaysian Qualifications Agency (MQA) for approval of several new academic programmes as shown in Exhibit 3.

Exhibit 3. new academic Programme Submission to MQa

no Programme

date Submitted to

MQa

1 Diploma in Hospitality Management 3/9/20122 Diploma in Medical Assistant 16/6/20123 Bachelor in Accounting 1/8/20124 Bachelor in Banking & Finance 13/12/20125 Bachelor in Sports Management 13/12/20126 Bachelor in Entrepreneurial

Leadership 13/12/20127 Bachelor in International Business 13/12/20128 Master of Business Administration 14/8/20129 PhD (Doctor of Philosophy) in

Management 5/9/201210 Doctorate In Business Administration 19/9/201211 Bachelor of Art (Hons) Mass

Communication 21/2/201312 Foundation in Engineering 31/1/201313 Diploma in Security and Safety

Management 1/3/2013

With the successful upgrading of AMU and the repositioning of both AMU and MGC in 2012, our institutions are poised to grow and expand their presence in the Malaysian higher education landscape. The dynamic and increasingly competitive environment is organically addressed through our continuous commitment to quality and relevance to the industry requirements. We have been and we shall continue to uphold our vision in achieving global leadership in producing competent and dynamic professionals across the different industries.

15

YTM RaJa daTo’ SERI aZuREEn SuLTan aZLan SHaHChancellor of aSIA Metropolitan University (AMU)


UNIVERSITY (AMU) CoUnCil oF tRUstees

dato’ Sri dr. Edmund Santharatrustee(Chairman)

Tan Sri dato’ alimuddin Hj. Mohd domtrustee(representing Industry)

Prof. dato’ dr. Mafauzy Mohamedtrustee(representing Academic)

dato’ Prof. dr. nik Rahimah nik Yacobtrustee(Vice Chancellor AMU)

YTM Tunku dato’ Seri kamel Bin Tunku Rijaludintrustee(representing MEGB)

datuk Hj ahamed Basheer Bin Mohd Hussaintrustee(representing Industry)

datin Sri Carline a/p a. Johnson d’Cruztrustee


aCaDeMiC ManaGeMent teaM

name Position Qualification

dato’ Prof dr. nik Rahimah nik Yacob Vice Chancellor / Chief Executive, asia Metropolitan University.

BSc(Business Administration) MBaPhD(Business Administration) Chief Academic Officer, Masterskill Global

Colleges

Prof dr. noor aini Mohd Yusoff Deputy Vice Chancellor (Academic & Globalization)

Bsc(nutrition)PgD(Dietetic)Master in Community NutritionPhD(nutrition)

dr. nagashekhara Molugulu Head for Centre for Post Graduate Studies M.Pharmacy PhD(Management)

dr. kappaakalr Farook Haja nazeer ahamed

Head for Centre for Research and innovation

M.PharmacyPhD(Pharmacy)

dr. n. Srinivasan Dean, Faculty of Pharmacy M.Pharmacy PhD

Madam Magesvary Maruthiah Acting Deputy Dean, Faculty of Medicine Master of Science with Commendation in Nursing

assoc Prof Hj azman Husain Dean, Faculty of Biomedicine and Health Certificate of Health Personnel Trainers Diploma for Public Health Inspector BSc(Hons) in Health Care Practice

Education Master of Environment

assoc Prof Muthappan Muthupalaniappa

Dean, Faculty of Therapeutic Sciences Bachelor in Pharmacy Master in Pharmacy

Prof dr. Jayaraman Munusamy Deputy Dean, School of Business & Law Certified Black Belt in Six Sigma Methodologies USA

Diploma in Education Bachelor Soc Science (Hons) in

Management & Economics MBA (Marketing Management) DBA (International Marketing)

dr. Thein win naing Deputy Dean, Faculty of Medicine MBBs M MedSc (Preventive & Tropical Medicine) FaCtM

Ms Fadzida Hanim Jusoh Manager, Centre for Associate Studies B. Ed. TESL


JANUARY 2012

10Masterskill was among 45 companies that were awarded a license for franchising during the FRanCHISE CERTIFICaTIon PRESEnTaTIon CEREMonY held at the PWTC, Kuala Lumpur. Presented by the Minister of Domestic Trade, Cooperatives and Consumerism Datuk Seri Ismail Sabri Yaakob, the license was received by former MEGB Deputy Chief Executive Officer Mr. Kamarudin Khalil.

17a MEMoRanduM oF undERSTandInG (Mou) was signed between Masterskill (M) Sdn. Bhd. and Yayasan Guru Malaysia Berhad (YGMB) to foster a mutually beneficial and sustainable working relationship between both parties. This MoU marks the start of a collaboration and smart partnership to provide YGMB members with an “incentive package” that enables their children to obtain their tertiary education at AMU and MGC and its campuses at a discounted rate. The MoU was signed by former MEGB Deputy Chief Executive Officer Mr. Kamarudin Khalil and Deputy Chairman of YGMB Y. Bhg. Dato’ Asariah Binti Mior Shaharuddin.

MAJOR EVENTS 2012

Memorandum of understanding (Mou) with Yayasan Guru Malaysia Berhad

Franchise Certification Presentation Ceremony


FeBRUaRy

28Masterskill’s Chinese Cultural Society organised the 1MaSTERSkILL CHInESE nEw YEaR CELEBRaTIon 2012 to celebrate the start of a new year in the Chinese lunar calendar. Held to encourage solidarity among the AMU community and to share with others what Chinese New Year is about, the event featured a host of fun-filled performances, games and competitions.

JUNE

4Organised by AMU under the Student Affairs & Development Department’s supervision, the annual PESTa kaaMaTan & GawaI daYak was held at AMU to expose West Malaysian students in particular to the diverse cultures that can be found in East Malaysia. Featuring a Sugandoi Competition, Unduk Ngadau Competition and Kumang Gawai Competition, as well as various performances by the students, the event offered them an opportunity to bond with each other towards fostering the 1Malaysia spirit. The event was officiated by Malaysian Minister of Science, Technology and Innovation, Yang Berhormat Datuk Seri Panglima Dr. Maximus Johnity Ongkili.

1Masterskill Chinese new Year Celebration 2012

Pesta kaamatan & Gawai dayak

1Masterskill Chinese new Year Celebration 2012


MAJOR EVENTS 2012

sePteMBeR

17 - 23Once again, MEGB was the proud sponsor of the FIFTH dYTM RaJa dR. naZRIn SHaH InTERnaTIonaL oPEn CHESS CHaMPIonSHIP that was organised by the Kuala Lumpur Chess Association (KLCA) in collaboration with the Malaysian Intellect Development Foundation (MIDF). Held at the Olympic Hotel, Kuala Lumpur, the weeklong event aimed at cultivating interest and passion for the game among Malaysians by providing a platform for them to meet top international chess players and be inspired by them. This year’s event witnessed the return of 10 grandmasters including ex-Soviet Sergei Tiviakov (representing the Netherlands in this tournament), German multiple champion Thomas Luther and Uzbekistan’s Tahir Vakhidov, as well as India’s Woman Grandmaster Kruttika Nadig, to name a few.

The championship, which is registered with the World Chess Federation (FIDE) as an international title and rated tournament, attracted 90 players in total from 19 countries. Prizes included the DYTM Raja Dr. Nazrin Shah Challenge trophy and cash prizes worth over RM25,000 that were presented by His Royal Highness Raja Dr. Nazrin Shah Ibni Sultan Azlan Muhibbuddin Shah, The Regent of Perak Darul Ridzuan during the grand closing ceremony.

oCtoBeR

18 - 20Over 5,500 diplomas and degrees were conferred during the 6TH aMu ConvoCaTIon CEREMonY & 2nd MaSTERSkILL GLoBaL CoLLEGES (MGC) ConvoCaTIon CEREMonY. With the theme “Think Beyond Malaysia”, the ceremony also honoured the institution’s new university status and brand repositioning. Among the graduates were the second batch of Bachelor of Nursing students from Sunderland University, UK and the pioneer batch of Bachelor of Pharmacy students from La Trobe University, Australia. A total of 35 special awards were also presented, including the prestigious Chancellor Award that was received by Jamilah Mohd Hanipah (Bachelor of Physiotherapy) and Puspavathy Kanniapan (Diploma in Pharmacy), as well as the coveted President Award which was received by Chan Wan Yee (Diploma in Pharmacy). To date, AMU and MGC has produced 17,459 graduates.

This auspicious occasion also saw world-renowned cardiothoracic surgeon Dr. Devi Prasad Shetty being proclaimed as the third Pro Chancellor of AMU, as well as the conferment of honorary doctorate degrees to former President of India His Excellency Dr. A.P.J. Abdul Kalam and Minister of Science, Technology and Innovation Datuk Seri Panglima Dr. Maximus Johnity Ongkili.

Fifth dYTM Raja dr. nazrin Shah International open Chess Championship

6th aMu Convocation Ceremony & 2nd Masterskill Global Colleges (MGC) Convocation Ceremony


DeCeMBeR

06Deputy Minister of International Trade and Industry Yang Berhormat Dato’ Hj. Mukhriz bin Tun Dr. Mahathir, officiated the kad dISkaun SISwa 1MaLaYSIa PRESEnTaTIon CEREMonY that was held at AMU. A total of 20 cards were presented to selected Diploma and Degree students. The discount card is an initiative by the Ministry of Domestic Trade, Cooperatives and Consumerism (MoDTCC) to help ease student expenses in public and private higher education institutions nationwide. Also present at the ceremony were MEGB Group Chief Executive Officer and Executive Director, Dato’ Sri Dr. Edmund Santhara, Vice Chancellor of AMU, YBhg. Dato’ Professor Dr. Nik Rahimah binti Nik Yacob, Director of the MoDTCC Selangor, Mr. Azizan bin Ariffin and Service Department Manager and Entrepreneur Cooperative of Bank Rakyat, Mr. Shaharudin bin Mohd Sa’ad.

09THE MaSTERSkILL GLoBaL CoLLEGE koTa kInaBaLu CaMPuS CHaRITY CHRISTMaS ConCERT & kad dISkaun SISwa 1MaLaYSIa HandovER CEREMonY was officiated by Malaysian Minister of Science, Innovation and Technology, Yang Berhormat Datuk Seri Panglima Dr. Maximus Johnity Ongkili. In line with the theme “Joy to the World”, the event featured an array of performances and lucky draws. Twenty Kad Diskaun Siswa 1Malaysia were also presented to selected students. Other VIP guests included MEGB Group Chief Executive Officer and Executive Director Dato’ Sri Dr. Edmund Santhara and representatives from the Ministry of Domestic Trade, Cooperatives and Consumerism (MoDTCC).

kad diskaun Siswa 1Malaysia Presentation Ceremony

The Masterskill Global College kota kinabalu Campus Charity Christmas Concert & kad diskaun Siswa 1Malaysia Handover Ceremony


CoRPoRate soCial ResPonsiBility

PRoMoTInG HEaLTHY LIvInG

The Kota Damansara Hindu Youth Organisation organised a Free Medic assist event on 29 January 2012 in conjunction with the Ponggal Festival. The AMU Medic Assist Team, comprising six Paramedic students, one Medical Assistant and a staff member from the Student Affairs & Development Department, was at hand to conduct various complimentary health check-ups including blood pressure, blood grouping, glucose and body index muscle testing as well as physiotherapy consultations.

The event, which was well-received by the public, not only offered them an opportunity to enjoy free health tests, but also provided our students with a platform to enhance their practical and communication skills with people from all walks of life.

For us, corporate social responsibility (CSR) extends well beyond the act of giving back to communities. It is about enhancing them and making the world a better place for future generations. as a leading institute of higher learning, we take pride in nurturing a conducive environment that encourages the development and wellbeing of our students and staff, not just academically or professionally, but in all areas of life.

In line with this, we continue to invest significantly in our varied CSR initiatives throughout the year, instilling positive values and experiences in our students and staff as we endeavour to shape a brighter tomorrow for all.

HonInG aCadEMIC PRowESS

AMU was also invited to facilitate the kursus kepimpinan Pelajar Tahun 2012 at Sekolah Menengah Vokasional Sungai Petani 2 in Kedah on 21-23 March that was aimed at helping the schoolchildren achieve academic excellence in their examinations. For this event, the Student Affairs & Development Department sent three staff members and four students to provide handy tips and insights on time-management and effective study habits to help the schoolchildren cultivate a positive attitude and be highly disciplined in their studies.

Free Medic assist kursus kepimpinan Pelajar Tahun 2012


CuLTIvaTInG TEaMwoRk

AMU collaborated with the Joint Management Body of Rumah Pangsa Taman Segar Perdana and the Ministry of Health, Hulu Langat District Office to organise a gotong-royong there. As this area had the highest number of dengue cases in Hulu Langat, the gotong-royong was primarily aimed at cleaning up the area and eradicating dengue.

Aside from reinforcing our bond with the Joint Management Body of Rumah Pangsa Taman Segar Perdana and the Ministry of Health, Hulu Langat District Office, this event also provided us with an avenue to uphold our responsibility to society.

gotong-royong

PIonEERInG PRaCTICaL woRk

Field work Exposure (Malaria & Filariasis – Case detection and Preventation) is a new project by the Faculty of Biomedicine & Health under supervision by Student Affairs & Development Department in collaboration with the Ministry of Higher Education (MoHE) and Grik District Health Office. This programme took place at Banding Lake, Royal Belum Rainforest in Grik, Perak Darul Ridzuan on 10-12 July 2012.

One of the objectives of the programme was to create awareness amongst AMU students on their responsibilities in contributing towards the development of the surrounding areas for the betterment of the community and the nation. It also gave them real-life exposure and hands-on training in environmental health and in the detection and control of Malaria. Thirty five students and five staff members from AMU took part in this pilot programme.

The programme included various activities including:• Briefing on Malaria & Filariasis• “Hands-on” Hudson expert training• ”Kaedah Pencelupan Kelambu K-Oktrine” at Kem Pulau

Banding (Phase 1)• ”Kaedah Pencelupan Kelambu K-Oktrine” at Kem Pulau

Banding (Phase 2)• Mass Blood Survey (MBS) activity & Filariasis• Mass Drug Administration (MDA) & slide for Malaria Film

(MF)

Field work Exposure (Malaria & Filariasis – Case detection and Preventation)


CoRPoRate soCial ResPonsiBility

EnCouRaGInG aCTIvE LIFESTYLES

AMU participated in the Seventh MaPCu Sports Carnival 2012 which was organised by the Malaysian Association of Private Colleges and Universities (MAPCU) from 9 September to 6 October 2012 at Taylor’s University and Subang Sports Planet. This event encouraged students to be active in sports and enjoy a healthy lifestyle, in addition to fostering better relationship among our AMU students and other private institutes of higher learning. Among others, the AMU Female Futsal Team won fourth place in the tournament.

EMPowERInG LEadERS oF THE FuTuRE

Held from 1-2 December 2012 at Port Dickson, Negeri Sembilan, the Leadership Campfire – Leader for a New Generation saw the participation of 63 AMU students from various diploma and degree courses. The programme, aimed at cultivating future leaders for the next generation, consisted of eight modules to motivate and test their leadership skills and teamwork. The programme was a huge success and received positive feedback from all participants.

advoCaTInG IT PRoFICIEnCY

As firm believers of equal educational opportunities, AMU was proud to be a part of the Sepetang bersama Y.B dato’ Seri G. Palanivel – Menteri di Jabatan Perdana Menteri merangkap Presiden MIC kebangsaan that was organised by MIC Pagoh on 29 July 2012. During this event, we sponsored 10 netbooks that were given to five schools within the Pagoh district.

nuRTuRInG naTIonaL SoLIdaRITY

In conjunction with Malaysia’s 55th Merdeka celebration, lecturers from the Centre for Associate Studies organised a weeklong 1aMu Merdeka Celebration 2012 for AMU students and staff to celebrate the country’s independence as well as its formation.

The event was held to give the public a better understanding of the spirit of nationalism and educate them on their country’s struggle for independence and the importance of racial tolerance, unity and cooperation to ensure that the country continues to enjoy prosperity, development and harmony.

Activities held during this event included:• “KuizBerbalasPantunSelambaMerdekaCompetition”• “KuizKemerdekaan”Competition• “TeaterPatriotikCompetition”• “KoirLaguPatriotikCompetition”• SuperSpontan:“ApaYangKauTahuCompetition”(spontaneous

public speaking )

1aMu Merdeka Celebration 2012 Leadership Campfire – Leader for a New Generation


STATEMENT ONCORPORATE GOVERNANCE

The Board of Directors (“the Board”) of Masterskill Education Group Berhad (“MEGB” or “the Company”) is committed to ensuring that the highest standards of corporate governance as embodied in the Malaysian Code on Corporate Governance 2012 (“the Code”) are practised throughout the Company and its subsidiaries (“the Group”), as a fundamental part of discharging its responsibilities to protect and enhance the shareholders’ value and interests of all stakeholders.

The Board recognises that maintaining good corporate ethics is critical to business integrity and performance, and key to delivering shareholder value. The Board evaluates and, where appropriate, implements relevant proposals to ensure that the Company continues to adhere to good corporate governance, relevant to developments in market practice and regulations.

This statement sets out the commitment of the Board of MEGB towards the Code and describes how the Group has applied the principles laid down in the Code. Save where otherwise identified specifically, the Group has complied with the Best Practices of the Code throughout the financial year.

SECTION 1: THE BOARD OF DIRECTORS

BOARD ROlES AND RESpONSIBIlITIES

The duties and responsibilities of the Board of Directors are stipulated in the Board Charter. The Board Charter can be viewed on the Company’s website at www.megb.com.my. The Board has overall responsibility for the Company’s strategic plan, overseeing the conduct of the Company’s business, risk management practices and internal controls and succession planning.

SuSTAINABIlITy

The Board regularly reviews the strategic direction of the Company and the progress of the Company’s operations, taking into account changes in the business and political environment and risk factors such as level of competition although the Company does not have any policy for the time being.

COmpOSITION

The Board consists of seven members comprising one Independent Non-Executive Chairman, one Executive Director, three Independent Non-Executive Directors, two Non-Independent Non-Executive Directors and one alternate Director. The Company complies with the provision of Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) which states that at least two directors or one-third of the board members, whichever is the higher, comprise Independent Directors. The profiles of each of the Directors are presented on pages 10 to13 of this Annual Report.

The Independent Non-Executive Directors are free of any business or other relationship with the Company which could reasonably be perceived to materially interfere with their exercise of independent judgement. In staying clear of any potential conflict of interest situation, the Independent Directors remain in a position to fulfill their responsibility to provide a check and balance to the Board. Essentially, these Independent Directors provide independent and constructive views and ensure that the strategies and policies proposed by the management are fully deliberated upon, and take account of the long term interests, not only of the shareholders, but also of the employees, customers, suppliers, and the many Communities in which the Group conducts business. Mr. Wisun Soon is the designated Senior Independent Non-Executive Director to whom concerns relating to the Group may be conveyed by the shareholders and other stakeholders.

Generally, the Executive Director is responsible for carrying out the day to day operational functions while the Non-Executive Directors play the supporting role by contributing their knowledge and experience in the business strategic plans.

The Company firmly believes that individuals chosen and appointed to the Board of Directors are individuals of high calibre and integrity and can be tasked to discharge their duties and responsibilities independently and effectively. The composition of the Board comprises highly qualified and experienced individuals.

The Nominating Committee and the Board have assessed, reviewed and determined that the three Independent Directors, who have served on the Board, remain objective and independent.


STATEMENT ONCORPORATE GOVERNANCE (CoNT’D)

BOARD GENDER DIvERSITy pOlICy

The Corporate Governance Blueprint 2011 stated that the Board should ensure women participation on board to reach 30% by the year 2016. The Company does not have a policy on boardroom diversity, including gender diversity. In its selection for Board representation, the Company believes in, and provides equal opportunity to candidates with merit. Nevertheless, the Board will give consideration to the gender diversity objectives.

BOARD mEETINGS

Board Meetings are scheduled for every quarter with additional meeting to be convened as and when required. During the financial year under review, the Board met a total of six times. The attendance of the Directors who held office during the financial year is set out below:

Name of Directors No. of meetings attended

YTM Tunku Dato’ Seri Kamel Bin Tunku Rijaludin 5/6Dato’ Sri Dr. Santhara Kumar a/l Ramanaidu 6/6 YM Raja Mohd Azmi Bin Raja Razali (Retired on 6 June 2012) 2/3Richard Todd Scanlon 3/6Datuk Kamarudin Bin Md. Ali 6/6Wisun Soon (Appointed w.e.f. 24 April 2012) 4/4Mathuraiveran a/l Marimuthu (Appointed w.e.f. 1 July 2012) 3/3

Supply OF INFORmATION

All directors are given complete and timely information before each Board Meeting to be convened together with an agenda and a set of Board papers. Board papers are circulated five (5) days prior to the Board meetings to accord sufficient time for the Directors to review the Board papers and obtain further explanation, if necessary, from the Management or the Company Secretary. Urgent papers may be presented and tabled at the Board meetings under supplemental agendas. Generally, the Board papers circulated include minutes of the previous meeting, quarterly and annual financial statements, press release, corporate development, review of operations, and other related performance factors, minutes of Board committees, acquisition and disposal proposals, list of directors’ resolutions passed and report on the directors’ dealings in securities, if any.

All Directors, whether as a full board or in their individual capacity, have unrestricted access to all information pertaining to the Group’s business and affairs to enable them to carry out their duties effectively and diligently. They also have access to the advice of the Company Secretary, who also serve in that capacity in the various Board committees. The Company Secretary also serves notice to Directors on the closed period for dealing in the securities of the Company, as stipulated in Chapter 14 of the MMLR. The Company Secretary ensures that all Board meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are recorded and maintained in the statutory register at the registered office of the Company.

All the Directors may obtain the advice of Independent Professional Advisors and Internal/External Auditors in appropriate circumstances in the furtherance of their duties, at the Company’s expense.

AppOINTmENT OF DIRECTORS

The Nominating Committee is responsible for recommending to the Board suitable candidate(s) for appointment as new Directors. In making these recommendations, factors such as mix of skills, knowledge, experience, expertise, professionalism, integrity and contribution to the Company will be considered before the recommendation for appointment of the proposed director is put forward to the Board for consideration and approval.

RE-ElECTION OF DIRECTORS

In accordance with the Articles of Association of the Company and in compliance with the MMLR, all Directors are required to retire from office at least once every three years, and shall be eligible for re-election. The Company’s Articles of Association also requires that at least one-third of the Board of Directors shall retire at each Annual General meeting and may offer themselves for re-election.



CODE OF CONDuCT

The Company, its management and its employees are fully committed to achieving business results which are driven and supported by the highest level of integrity and in full compliance with the laws and regulations of all jurisdictions where it does business. The Company places the highest priority in ensuring its business conduct is in complete adherence and compliance to the Code of Conduct which is available online at www.megb.com.my.

BOARD COmmITTEES

The following principal Board Committees that have been established to assist the Board in discharging its duties effectively:

• Audit Committee; • Nominating Committee; and• Remuneration Committee.

The terms of reference of each Board Committee have been approved by the Board and, where applicable, comply with the recommendations of the Code. These Committees have the authority to examine particular issues and report to the Board with their recommendations. The respective Committee reports to the Board on matters considered and their recommendations thereon. The ultimate responsibility for the final decision on all matters, however, lies with the Board.

AuDIT COmmITTEE

The Audit Committee was established on 10 March 2010 and consists of three members to assist the Board in discharging its duties. The Audit Committee works closely with the internal and external auditors and maintains a transparent professional relationship with them. The Chairman of the Audit Committee would inform the Directors at the Board meetings of any salient matters raised at the Audit Committee meetings which require the Board’s notice or direction. The composition, other responsibilities, summary terms of reference and summary of activities of the Audit Committee during the financial year are set out separately in the Audit Committee Report on pages 32 to 34 of this Annual Report.

NOmINATING COmmITTEE

The Nominating Committee was established on 10 March 2010 and consists of three members who meets as and when required and at least once in a year. The Nominating Committee held a total of three (3) Nominating Committee meetings during the financial year.

The members of the Nominating Committee are as follows:-

Chairman: Wisun Soon(Senior Independent Non-Executive Director)

Members: YTM Tunku Dato’ Seri Kamel Bin Tunku Rijaludin (Independent Non-Executive Chairman)

Datuk Kamarudin Bin Md. Ali (Independent Non-Executive Director)

The primary responsibility of the Nominating Committee in accordance with its terms of reference is to assist the Board with the following functions:

• To assess and recommend new nominees for appointment to the Board and Board Committees (the ultimate decision as to whom shall be nominated should be the responsibility of the full Board after considering the recommendations of such a Committee).

• To review the required mix skills and experience and other qualities, including core competencies which the Non-Executive Directors should bring to the Board.

• To assess the effectiveness of the Board as a whole, the committees of the Board and the contribution of each individual Director.• To review the Board’s succession planning. • To review and determine the appropriate training programmes for the Board as a whole.

The Board, through the Nominating Committee, had carried out review on the composition of the Board and satisfied that the size and composition of the Board is adequate with appropriate mix of knowledge, skills, attributes and core competencies.



REmuNERATION COmmITTEE

The Board has set up a Remuneration Committee on 10 March 2010 consists of three members to assist the Board in determining the Directors’ remuneration. The Remuneration Committee meets at least once a year. The Remuneration Committee held a total of four (4) Remuneration Committee meetings during the financial year.

The members of the Remuneration Committee are:

Chairman: YTM Tunku Dato’ Seri Kamel Bin Tunku Rijaludin (Independent Non-Executive Chairman)

Members: Datuk Kamarudin Bin Md. Ali (Independent Non-Executive Director)

Wisun Soon(Independent Non-Executive Director)

The primary responsibility of the Remuneration Committee in accordance with its terms of reference is to assist the Board with the following functions:

• To review and to consider the remuneration of Executive Director and Chief Executive Officer which is in accordance with the skill, experience and expertise they possess and make recommendation to the Board on the remuneration packages of them.

• To conduct continued assessment of Executive Director to ensure that remuneration is directly related to corporate and individual performance.

• Annual review of the overall remuneration policy for Directors for recommendation to the Board.

The Company maintains transparent procedures in determining the remuneration policy for Directors, Chief Executive Officer and key management.

Directors’ Training

All the Directors have attended the Mandatory Accreditation Program (MAP) prescribed by Bursa Malaysia. Directors are regularly updated on the Group’s business and the competitive and regulatory environment in which they operate. The Company Secretary and external auditors also updated the Directors on changes to the relevant guidelines on the regulatory and statutory requirements.

The Directors also complete other relevant training programmes to further enhance their business acumen and professionalism in discharging their duties to the Group. During the financial year, some Directors have pursued relevant courses and seminars to keep abreast with industry, regulatory and compliance issues trends and best practices. Particulars of training programmes attended by the Directors are as follows:

Directors Seminar / Conference / Workshop

YTM Tunku Dato’ Seri Kamel Bin Tunku Rijaludin

- Seminar on Regulatory updates, governance and current issues for directors of PLCs and body corporate 2012

Datuk Kamarudin Bin Md. Ali - Effective Dispute Resolution for Corporate Malaysia- Role of the Audit Committee in Assuring Audit Quality- Making the Most of the Chief Financial Officer Role- Governance, Risk Management & Compliance : What Director Should Knows- Six Seconds Malaysia International EQ Conference

Mathuraiveran a/l Marimuthu - MIA Conference 2012

Wisun Soon - Mandatory Accreditation Program

During the financial year under review, three of the Directors, Dato’ Sri Dr. Santhara Kumar a/l Ramanaidu, Mr. Richard Todd Scanlon and Mr. Lim Yong Chye Lawrence did not attend any training program as they could not identify any programs / courses that were of particular benefit to their role as Directors of the Company.



SECTION 2: DIRECTORS’ REmuNERATION

The Company’s remuneration policy for Directors is formulated to attract and retain individuals of the necessary calibre relevant to the achievement of the Company’s strategic achievements. The remuneration is structured to link experience, expertise and level of responsibility undertakings by the Directors.

The Remuneration Committee is entrusted with the responsibilities to make recommendations to the Board the remuneration package for the Executive Director and the annual review of the overall remuneration policy for the Directors in the Group. Directors’ remuneration will be decided by the Board as a whole with the Director concerned abstaining from deliberation and voting on decisions in respect of his individual remuneration. Directors’ fees payable to Non-Executive Directors is proposed by the Board and is subject to shareholders’ approval at the annual general meeting.

The details of the remuneration of Directors of the Company during the financial year ended 31 December 2012 are as follows:

Aggregate Remuneration categorized into appropriate components:

Fees (Rm’000)

Salaries and Allowances,

inclusive of EpF contributions

(Rm’000) Bonus (Rm’000)Benefits-in-kind

(Rm’000) Total (Rm’000)

Executive Director – 3,865 1,575 32 5,472Non-Executive Directors 203 185 – – 388

Total 203 4,050 1,575 32 5,860

Note: The fees are recommended by the Board of Directors for approval of the shareholders at the Annual General Meeting.

Remuneration Bands

Range of Remuneration Executive DirectorNon-Executive

Directors Total

Below RM50,000 – 4 4RM50,001 – RM100,000 – – –RM100,001 – RM150,000 – 1 1RM150,001 – RM200,000RM200,001 – RM5,450,000

– –

1 –

1 –

RM5,450,000 – RM5,500,000 1 – 1

Total 1 6 7

For security and confidential reasons, the details of individual Directors’ remuneration are not shown. The Board is of the opinion that the transparency and accountability aspects of corporate governance as applicable to Directors’ remuneration are appropriately served by the disclosure made above.



SECTION 3: SHAREHOlDERS

DIAlOGuE WITH INvESTORS

Recognizing the importance of timely dissemination of information to shareholders and other stakeholders, the Board is committed to ensure that the shareholders and other stakeholders are well informed of all important issues and major developments of the Company and the information is communicated to them in the following manner:

• Issuance of Annual Report;• Various disclosures and announcements made to Bursa Malaysia including the Quarterly Reports and Annual Audited Financial

Statements; • Shareholders may obtain the Company’s latest announcements via the Bursa Malaysia’s website at www.bursamalaysia.com; • Reports, announcements, presentations also available for download at the Group’s investors’ relation website at www.megb.com.my;

A Shareholders’ Communication Policy is available on the Company’s website at www.megb.com.my

THE ANNuAl GENERAl mEETING (“AGm”)

Notice of AGM which is contained in the Annual Report is sent out at least twenty one (21) days prior to the date of the AGM. There will be commentary by the Chairman at the AGM regarding the Company’s performance for each financial year and a brief review on current business conditions. At each AGM, a platform is available for shareholders to participate in the question and answer session. Extraordinary General Meetings are held when required.

SECTION 4: ACCOuNTABIlITy AND AuDIT

FINANCIAl REpORTING

The Board is responsible to ensure that the quarterly results, annual audited financial statements are prepared are drawn up in accordance with the provisions of the Companies Act, 1965 (“the Act”), MMLR and Applicable Accounting Standards in Malaysia. In presenting the annual audited financial statements, the Company has used appropriate accounting policies, consistencies applied and supported by reasonable judgments and estimates.

The quarterly results were reviewed by the Audit Committee and approved by the Board of Directors before being released to the Bursa Malaysia. By presenting the quarterly results and annual audited financial statements, the Company is mindful of the necessity to present a balanced assessment of the Group’s financial position. The details of the Company and the Group’s annual audited financial statements for the financial year ended 31 December 2012 can be found on pages 56 to 111 of the Annual Report.

INTERNAl CONTROl

The Board acknowledges its responsibility for maintaining a sound system of internal control to safeguard shareholders’ investments, the Company’s assets, and the need to review the adequacy and integrity of those systems regularly.

Information on the Group’s risk management and internal control is presented in the Statement on Risk Management and Internal Control on page 35 to 36.

The Company also has in place a Whistle Blowing Policy to provide an avenue for employees to report any breach or suspected breach of any law or regulation, including business principles and the Company’s policies and guidelines in a safe and confidential manner. A designated person is handling the matter and report directly to the Audit Committee of the Company.



RElATIONSHIp WITH THE ExTERNAl AuDITORS

The Board via the Audit Committee maintains an appropriate, formal and transparent relationship with the Group’s external auditors. The Audit Committee meets the external auditors without the presence of the management, wherever necessary, and at least twice a year. Meetings with the external auditors are held to further discuss the Group’s audit plans, audit findings, financial statements as well as to seek their professional advice on other related matters. From time to time, the external auditors inform and update the Audit Committee on matters that may require their attention.

The role of Audit Committee in relation to dealing with the auditors is described in the Audit Committee Report set out on pages 32 to 34 of this Annual Report.

INTERNAl CORpORATE DISClOSuRE pOlICIES AND pROCEDuRES

Along with good corporate governance practices, the Company is committed to provide to investors and the public with comprehensive, accurate and material information on a timely basis.

DIRECTORS’ RESpONSIBIlITy STATEmENT

The Board is required by the Act to prepare annual audited financial statements for each financial year which have been made out in accordance with the applicable approved accounting standards and the provisions of the Act. The Board is responsible to take reasonable steps to ensure that the financial statements give a true and fair view of the state of affairs of the Group and the Company, and of their results and cash flows for the financial year then ended.

The Board of Directors are required under Paragraph 15.26 of the MMLR to issue a statement explaining their responsibility for preparing the annual audited financial statements.

In preparing the annual audited financial statements of the Group and the Company for the financial year, the Board has:

• adopted suitable accounting policies and applied them consistently;• where applicable, made judgments and estimates that are reasonable and prudent; • ensured that applicable approved accounting standards have been followed; and • confirmed that the annual audited financial statements have been prepared on a going concern basis.

The Board has ensured that the Group and Company keep proper accounting and other records that will disclose with reasonable accuracy at any time the financial position of the Group and the Company, and which enable them to ensure that the annual audited financial statements comply with the Act and the applicable approved accounting standards.

This Directors’ Responsibility Statement is made in accordance with the resolution of the Board dated 26 April 2013.


AUDIT COMMITEE REPORT

The Board of Directors of mEGB is pleased to present the Audit Committee Report for the financial year ended 31 December 2012.

COmpOSITION OF THE AuDIT COmmITTEE AND mEETINGS

The Audit Committee held a total of five (5) Audit Committee meetings for the financial year ended 31 December 2012. The Audit Committee members and details of attendance of each member at the Audit Committee meetings are as follows:-

Name Directorship No. of meetings attended

Datuk Kamarudin Bin Md. Ali(Chairman of the Audit Committee)

Independent Non-Executive Director 5/5

YTM Tunku Dato’ Seri Kamel Bin Tunku Rijaludin Independent Non-Executive Chairman 3/4YM Raja Mohd Azmi Bin Raja Razali Non-Independent Non-Executive Director 1/3Mathuraiveran a/l Marimuthu Independent Non-Executive Director 2/2Wisun Soon Independent Non-Executive Director 1/1

YM Raja Mohd Azmi Bin Raja Razali retired as a Director of the Company on 6 June 2012. Mr. Mathuraiveran a/l Marimuthu was appointed as a member to the Audit Committee on 1 July 2012. Mr. Wisun Soon was appointed as a member to the Audit Committee and YTM Tunku Dato’ Seri Kamel Bin Tunku Rijaludin ceased as a member on 29 August 2012.

By invitation of the Audit Committee, the Group Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Head of Finance, Internal Auditor, Senior Vice President-Operations, the representatives of the External and Internal Auditors had attended some of the meetings during the financial year.

The Audit Committee is governed by its Terms of Reference as stipulated below:- TERmS OF REFERENCE OF THE AuDIT COmmITTEE

A. membership

The Audit Committee shall comprise at least three (3) Directors, the majority of whom are independent. The members of the Audit Committee shall be appointed by the Board of Directors. All members of the Audit Committee must be Non-Executive Directors with a majority of them being independent. All members of the Audit Committee shall be financially literate and at least one member shall:

(i) be a member of the Malaysian Institute of Accountants; or(ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years of working experience and

• he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or• he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants

Act 1967; or(iii) fulfill such other requirements as prescribed or approved by the Exchange.

The appointment terminates when a member ceases to be a Director. No alternate director shall be appointed as a member of the Audit Committee.

Members of the Audit Committee shall elect an Independent Director on the Committee as Chairman.

If a member of the Audit Committee resigns, dies or for any reason ceases to be a member with the result that the number of members is reduced below three, the Board shall, within three months appoint such number of new members as may be required to make up the minimum of three members.

The terms of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every three years.


AUDIT COMMITEE REPORT (CONT’D)

B. Roles and responsibility

- To consider the appointment of the external auditor, the audit fees, any questions of resignation or dismissal of the external auditor;- To submit a copy of written representation or submission of external auditors’ resignation to the Exchange;- To discuss with the external auditor before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved;- To provide a line of communication between the Board and the external auditors;- To review the quarterly and year-end financial statements of the Group and Company, focusing particularly on: -

• any change in accounting policies and practices;• significant adjustments arising from the audit;• litigation that could affect the results materially;• the going concern assumption; and• compliance with accounting standards and other legal requirements.

- To discuss problems and reservations arising from the interim and final audits, and any matter the external auditor may wish to discuss (in the absence of management where necessary);

- To review the external auditor’s management letter and management’s response; - To do the following, in relation to the internal audit function:-

• mandate the internal audit function to report directly to the Audit Committee;• review the adequacy of the scope, functions, competency and resources of the internal audit function, and that it

has the necessary independence and authority to carry out its work, which should be performed professionally and with impartiality and proficiency;

• review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function;

• review any appraisal or assessment of the performance of members of the internal audit function;• approve any appointment or termination of senior staff members of the internal audit function; • take cognisance of resignations of internal audit staff and provide the staff an opportunity to submit reasons for

resigning; and• ensure information pertaining to the internal audit function are disclosed in the annual reports of the Company.

- Review the adequacy and integrity of the Company’s system of internal controls and management information systems, including systems to ensure compliance with applicable laws, regulations, rules, directives and guidelines;

- To consider any related party transactions within the Company or Group;- To consider compliance with the Company’s conflict of interest and insider trading policies;- To consider the major findings of internal investigations and management’s response;- To consider any other matters as directed by the Board;- To review the risk management framework of the Group and Company to ensure the existence of effective risk management

policies to monitor and manage all financial and non-financial risks; and - To review the Company’s procedures for detecting fraud and whistle blowing and ensure that arrangements are in place by

which staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting, financial control or any other matters (in compliance with provisions made in the Companies Act, 1965).

C. Authority and powers of the Audit Committee

In carrying out its duties, an Audit Committee shall, at the cost of the Company, - have authority to investigate any matter within its terms of reference; - have full, free and unrestricted access to the Group and Company’s records, properties, personnel and other resources;- have full and unrestricted access to any information regarding the Group and Company;- have direct communication channels with the external auditors and person(s) carrying out the internal audit function;- be able to obtain independent professional or other advice; and- convene meetings with the external auditors, internal auditors or both, excluding the attendance of other directors and

employees of the Company, whenever deemed necessary.

Where the Audit Committee is of the view that a matter reported by it to the Board of directors has not been satisfactorily resolved resulting in a breach of the MMLR of Bursa Malaysia, the audit committee is authorised to promptly report such matters to the Exchange.


AUDIT COMMITEE REPORT (CONT’D)

D. meetings

a) The Audit Committee shall meet at least four (4) times a year and such additional meetings as the Chairman shall decide.b) The quorum for an Audit Committee Meeting shall be at least two (2) members. The majority present must be Independent

Directors.c) The External Auditor has the right to appear and be heard at any meeting of the Audit Committee and shall appear before

the Audit Committee when required to do so.d) The Chief Financial Officer and the Head of Internal Audit of the Group and Company shall normally attend the meetings

to assist in the deliberations and resolution of matters raised. However, at least twice a year, the Audit Committee shall meet with the External Auditors without the presence of management.

e) The Company Secretary shall act as Secretary of the Audit Committee and shall be responsible, with the concurrence of the Chairman, for drawing up and circulating the agenda and the notice of meetings together with the supporting explanatory documentation to members prior to each meeting.

f) The Secretary of the Audit Committee shall be entrusted to record all proceedings and minutes of all meetings of the Audit Committee.

g) In addition to the availability of detailed minutes of the Audit Committee Meetings to all Board members, the Audit Committee at each Board Meeting will report a summary of significant matters resolutions.

INTERNAl AuDIT FuNCTION

The Group has appointed a well established external Internal Audit firm, which reports to the Audit Committee and assists the Audit Committee in reviewing the effectiveness of the internal control systems whilst ensuring that there is an appropriate balance of controls and risks management throughout the Group in achieving its business objectives.

Internal audit provides independent assessment on the effectiveness and efficiency of internal controls utilising a global audit methodology and tool to support the corporate governance framework and an efficient and effective risk management framework to provide assurance to the Audit Committee.

The internal audit reviews were conducted in accordance with the internal audit plan approved by the Audit Committee. The scope of internal audit covers the audits of all units and operations, including subsidiaries as stated in the letter of engagement.

Subsequent to the financial year ended 31 December 2012, the results of the Internal Audit reviews were presented to the Audit Committee. In 2012, the Group paid a total fee of RM80,000 for services rendered in respect of internal audit.

SummARy OF ACTIvITIES OF THE AuDIT COmmITTEE

The main activities undertaken by the Audit Committee during the financial year ended 31 December 2012 included the following:-

a) Reviewed the quarterly unaudited financial and annual audited financial statements of the Group and the Company including the announcements pertaining thereto, before recommending to the Board for their approval and release of the Group’s results to Bursa Malaysia.

b) Reviewed with external auditors on their audit planning memorandum on the statutory audit of the Group for the financial year ended 31 December 2012.

c) Reviewed and discussed with the external auditors of their audit findings inclusive of system evaluation, audit fees, issues raised and management letter together with management’s response.

d) Reviewed the internal audit plan;e) Reviewed the internal audit reports presented and considered the findings of internal audit through the review of the

internal audit reports tabled and management responses thereof;f) Reviewed the effectiveness of the Group’s system of internal control;g) Reviewed related party transactions and conflict of interest situation that may arise within the Company or the Group;h) Reviewed the Company’s compliance with the MMLR of Bursa Malaysia, applicable Approved Accounting Standards and

other relevant legal and regulatory requirements; andi) Report to the Board on its activities and significant findings and results.

This Audit Committee Report is made in accordance with the resolution of the Board of Directors dated 26 April 2013.


STATEMENT ON RISk MANAGEMENT AND INTERNAl CONTROl

The Board of Directors recognizes its responsibilities over Masterskill Education Group Berhad (“the Company”)’s system of internal controls, covering all its financial and operating activities to safeguard shareholders’ investment and the Company’s assets. The Board has an established on-going process for identifying, evaluating and managing the significant risks encountered by the Company in accordance to the Guidance for Director of Public Listed Companies on Statement on Internal Control. The Board of Directors and Audit Committee contribute to the effectiveness of the control environment. They give opportunities for Management to rationalize and justify their initiatives and the Board requires justifications for any decision planned by the management and supported by relevant reports. The Audit Committee meets every quarter, and deliberate reports from Management Committees under its authority. In view of the limitations inherent in any system of internal controls, the system is designed to manage, rather than to eliminate, the risk of failure to achieve the Company’s corporate objectives and it can only provide reasonable but not absolute assurance against misstatement or loss.

RESpONSIBIlITy OF THE BOARD

The Audit Committee assists the Board to review the adequacy and integrity of the system of internal controls in the Company and to ensure that an appropriate mix of techniques is used to obtain the level of assurance required by the Board. In accordance with Paragraph 15.26(b) of the MMLR of Bursa Malaysia, the Board is pleased to provide the following statement, which outlines the nature and scope of internal control of the Company for the financial year ended 31 December 2012.

CONTROl ENvIRONmENT

The Company has an organization structure that is aligned to business requirements. The internal control mechanism is embedded in the various work processes at appropriate levels in the Company. The Group Chief Executive Officer is accountable for ensuring the existence and effectiveness of internal control and provides leadership and direction to senior management on the manner the Company controls its businesses, the state of internal control and its activities. In developing the internal control systems, consideration is given to the overall control environment of the Company, assessment of financial and operational risks and an effective monitoring mechanism. The Internal Quality Audit and the Internal Audit Function visit regularly to ensure compliance to existing procedures.

ASSuRANCE FROm THE mANAGEmENT

The Board has also received reasonable assurance from the Group Chief Executive Officer (“GCEO”) and the Head of Finance, that the Group’s risk management and internal control system are operating adequately and effectively, in all material respects, based on the risk management model adopted by the Group.

INTERNAl AuDIT FuNCTION

The Company has established an internal audit function internally and it is also assisted by the outsourced internal audit consultants. The Internal Auditors reviews the adequacy and effectiveness of control processes implemented by the management, conducts audits that encompass reviewing critical areas that the Company faces, and reports to the Audit Committee on a periodic basis. Any significant weaknesses identified during the reviews together with the improvement measures to strengthen the internal controls were reported to the Audit Committee. Reports on internal audit findings, together with recommendations for Management actions, are reviewed by the Audit Committee. The internal audit reviews did not reveal significant weaknesses which would result in material losses or contingencies requiring disclosure in this Annual Report.

INFORmATION AND COmmuNICATION

While the Management has full responsibility in ensuring the effectiveness of internal control, which it establishes, the Board of Directors has the authority to assess the state of internal control as it deems necessary. In doing so, the Board has the right to enquire information and clarification from Management as well as to seek inputs from the Audit Committee, external and internal auditors, and other experts at the expense of the Company.


STATEMENT ON RISk MANAGEMENT AND INTERNAl CONTROl (CoNT’D)

RISK mANAGEmENT FRAmEWORK

Risk management is embedded in the Company’s management system and is every employee’s responsibility as the Company firmly believes that risk management is critical for the Company’s continued profitability and the enhancement of shareholder value. The Company has an on-going process for identifying, evaluating and managing the significant risks faced by the Company throughout the financial year under review. This is to ensure that all high risks are adequately addressed at various levels within the Company.

REvIEW OF STATEmENT By ExTERNAl AuDITORS

The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Recommended Practice Guide (“RPG”) 5 issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the annual report of the Group for the year ended 31 December 2012, and reported to the Board that nothing has come to their attention that cause them to believe that the statement is inconsistent with their understanding of the process the Board has adopted in the review of the adequacy and effectiveness of risk management and internal controls within the Group.

RPG 5 does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Directors and management thereon.


ADDITIONAl COMPlIANCE INFORMATION

1. utilisation of proceeds Raised from the Company’s Initial public Offering exercise

On 18 May 2012, the Company has announced that due to among others, the reduction in the PTPTN’s loan schedule and the increase in the minimum entry requirements by the Malaysian Nursing Board, which had led to a drop in student enrolment, the Board of Directors of MEGB (“Board”) has decided to defer the construction of buildings for their proposed main campus for the time being and to reallocate the unutilised amount allocated for the purchase of land and construction of buildings amounting to RM76.97 million for use as working capital in view that such sum has not been utilised within the expected timeframe of twenty four (24) months as disclosed in the Prospectus.

2. Share Buy-Back

During the financial year under review, the Company had renewed the authority at its Annual General Meeting held on 6 June 2012 to purchase up to ten percent (10%) of its issued and paid-up share capital at the point of purchase pursuant to Section 67A of the Act, Chapter 12 of the MMLR of Bursa Malaysia and subject to any prevailing laws, rules, regulations, orders, guidelines and requirements issued by the relevant authorities. The Company did not exercise any share buy-back during the financial year.

3. Options, Warrants or Convertible Securities

The Company did not issue any options, warrants and convertible securities during the financial year ended 31 December 2012.

4. Depository Receipt program

The Company did not sponsor any depository receipt program during the financial year ended 31 December 2012.

5. Imposition of Sanctions and/or penalties

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by any relevant regulatory bodies during the financial year ended 31 December 2012.

6. Non-Audit Fees

The amount of non-audit fees incurred for services rendered to the Group by the external auditor and its local affiliates for the financial year ended 31 December 2012 amounted to RM107,000. The services were for first quarter review, review of statement on risk management and internal control and review of certain disclosure statements as well as preparation, review and submission of tax returns.

7. variation in Results

There were no profit estimations, forecasts or projections made or released by the Company during the financial year ended 31 December 2012.

There was no deviation of 10% or more between the audited results for the financial year ended 31 December 2012 and the unaudited results previously announced.

8. Profit Guarantee

The Company did not provide any profit guarantee for the Group’s operations for the financial year ended 31 December 2012.

9. material Contracts involving Directors and major Shareholders

There were no material contracts entered into by the Company and its subsidiaries involving Directors’ and major shareholders’ interests which were subsisting at the end of the financial year ended 31 December 2012.


pROpERTIES OWNED By OuR GROup

The details of land and buildings owned by us are set out below:

No.

Name of Registered Owner / Beneficial Owner: Lot. No./Postal address

Description/ Existing use

land area / Built-up

area (sq ft)Freehold / leasehold

Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)

1 Syarikat Kemacahaya Sdn Bhd / masterskill

Unit No. G-01 to G-10, 1-01 to 1-10, 2-01 to 2-15, 3-01 to 3-15 Type: RKB, Taman Kemacahaya held under part of GM 5105, Lot 13158 (formerly known as HS (M) 4900, PT No. 5707) in the Mukim and District of Hulu Langat, Negeri Selangor (“Kemacahaya Master Title”)

Postal AddressUnit No. G-01 to G-10, 1-01 to 1-10, 2-01 to 2-15, 3-01 to 3-15 Jalan Kemacahaya 11, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

10 units at the Ground Floor, 10 units at the First Floor, 15 units at the Second Floor and 15 units at the Third Floor in a block of 4-storey shop office / campus

- / 84,246 Freehold 11 years 23 January 2006

15,831

2 Syarikat Kemacahaya Sdn. Bhd. / masterskill

Unit No. G-13, Ground Floor, Type: RKB, Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressUnit No. G-13, Ground Floor, Type: RKB, Jalan Kemacahaya 11, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit at the Ground Floor in a 3-storey shop office / office

- / 1,737 Freehold 11 years 17 May 2006

526

lIST OF PROPERTIES


lIST OF PROPERTIES (CoNT’D)

No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)


Unit No. G-14 and G-15, Ground Floor, Type: RKB, Taman Kemacahaya held under part of the Kemacahaya Masters Title

Postal AddressUnit Nos. G-14 and G-15, Ground Floor, Type: RKB, Jalan Kemacahaya 11, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

2 units at the Ground Floor in a block of 3-storey shop office / office (G-14) and clinic (G-15)

- / 3,190 Freehold 11 years 20 March 2007

873


Unit No. 15-1, First Floor, Type: RKB, Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressUnit No. 15-1, First Floor, Type: RKB, Jalan Kemacahaya 11, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit at the First Floor in a 3-storey shop office / office


196


Unit No. A-4-G, Ground Floor, Type: RKA, Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressUnit No. A-4-G, Ground Floor, Jalan Kemacahaya 12, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit at the Ground Floor in a 3-storey shop office / computer lab

- / 1,606 Freehold 11 years 6 September 2008

228





- / 1,606 Freehold 11 years 6 September 2008

228



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)



Postal AddressUnit No. A-14-G, Ground Floor, Type: RKA, Jalan Kemacahaya 11, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit at the Ground Floor in a 3-storey shop office / classroom

- / 1,606 Freehold 11 years 19 December

2007

199






170




1 unit at the Ground Floor in a 3-storey shop office / examination department

- / 1,606 Freehold 11 years 21 January 2008

219



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)


Unit No. A-15-1 (Front Portion), First Floor, Type: RKA, Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressUnit No. A-15-1 (Front Portion), First Floor, Jalan Kemacahaya 12, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit of the Front Portion at the First Floor in a 3-storey shop office / examination department

- / 892 Freehold 11 years 21 January 2008

66


Unit No. A-15-1 (Back Portion), Floor No. First Floor, Type: RKA, Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressUnit No. A-15-1 (Back Portion), First Floor, Jalan Kemacahaya 12, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit of the Back Portion at the First Floor in a 3-storey shop office / examination department


66


Unit No. A-15-2 (Front Portion), Second Floor, Type: RKA, Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressUnit No. A-15-2 (Front Portion), Second Floor, Jalan Kemacahaya 12, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit of the Front Portion at the Second Floor in a 3-storey shop office / examination department


44


No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)


Unit No. A-15-2 (Back Portion), Second Floor, Type: RKA, Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressUnit No. A-15-2 (Back Portion), Second Floor, Jalan Kemacahaya 12, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit of the Back Portion at the Second Floor in a 3-storey shop office / examination department


44




1 unit of the Front Portion at the First Floor in a 3-storey shop office / teaching and learning centre

- / 892 Freehold 11 years 15 December

2008

108




1 unit of the Front Portion at the First Floor in a 3-storey shop office / classroom


2008

102



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)


Unit No. A-1-1 (Back Portion), First Floor, Type: RKA, Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressUnit No. A-1-1 (Back Portion), First Floor, Jalan Kemacahaya 12, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit of the Back Portion at the First Floor in a 3-storey shop office / classroom


2008

88






274


One-Storey Food Court (Hawker Centre), Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressOne-Storey Food Court (Hawker Centre), Jalan Kemacahaya 12, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 block of a 1-storey building / auditorium

153,149 / 15,400

Freehold 11 years 23 June 2006

1,114



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)





- / 1,606 Freehold 11 years 30 June 2008

192


Unit No. A-18-2 (Front Portion), Second Floor, Type: RKA, Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressUnit No. A-18-2 (Front Portion), Second Floor, Jalan Kemacahaya 12, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit of the Front Portion at the Second Floor in a 3-storey shop office / vacant

- / 910 Freehold 11 years 30 June 2008

37


Unit No. A-16-G, Floor No. Ground Floor, Type: RKA, Taman Kemacahaya held under part of the Kemacahaya Master Title

Postal AddressUnit No. A-16-G, Jalan Kemacahaya 12, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor

1 unit at the Ground Floor in a 3-storey shop office / Student Representative Council

- / 1,606 Freehold 11 years 7 August 2008

365



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)




1 unit at the Ground Floor in a 3-storey shop office / cafeteria


729




1 unit at the Ground Floor in a 3-storey shop office / student rest area


547




1 unit at the Ground Floor in a 3-storey shop office / student rest area


456



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)

25 masterskill / masterskill

Pajakan Negeri Nos 89530 and 89531, Lot Nos 181679 and 181680, both in the Mukim of Hulu Kinta and District of Kinta, Perak

Postal AddressNo. 26 and 28, Lebuh Perusahaan Klebang 1, IGB International Indus-trial Park, KM 8, Jalan Tunku Abdul Rahman, Tasek, 30010 Ipoh, Perak

A 4-storey main building, two 4-storey classroom blocks, two 2-storey laboratory buildings, a single storey shop, a single storey multi-purpose hall, a 3-storey auditorium block, a 4-storey hostel, a surau and a guard house/ campus/ main hall / hostel

301,938 / 191,026

Leasehold for 99 years

expiring on 17

october 2089

6 years 14 February

2007

19,302


Pajakan Negeri No 89532, Lot No 181681 in the Mukim of Hulu Kinta and District of Kinta, Perak

Postal AddressNo. 24, Lebuh Perusahaan Klebang 1, IGB International Industrial Park, KM 8, Jalan Tunku Abdul Rahman Tasek, 30010 Ipoh, Perak

A piece of vacant land

136,083 (on land)


expiring on 17

october 2089

Not applicable

16 February

2007

1,769


Geran 13627, Lot 342, Seksyen 21, Bandar Kota Bharu, District of Kota Bharu, Kelantan

Postal AddressLot 342, Seksyen 21, Jalan Sultan Yahya Petra, Kota Bharu, Kelantan

3-storey shop lot building / vacant

4,580 / 11,783


expiring on 19 January

2076

7 years 18 September

2008

2,210



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)


HS(D) 7936 - 7939, PT 210 - 213, Seksyen 19 Bandar Kota Bharu, Kota Bharu, Kelantan

Postal AddressPT Nos. 210 - 213 (New Lots 632 – 635), Seksyen 19, Jalan Hamzah, 15050 Kota Bharu, Kelantan

4 lots of a 4-storey office shoplot / vacant

7,491 / 29,964


expiring on 10 May

2075

4 years 19 June 2008

6,619


Thirty-four (34) lots of shoplots held under HS(D) 3554 – HS(D) 3587, PT 310 - PT 343, all within Section 17, Bandar Kota Bharu, Daerah Jaja-han Kota Bharu, Negeri Kelantan

34 lots of 3 storey shoplots / campus

55,456 / 164,808


expiring on 20 August

2102

2 years 19 July 2010

34,556


HS(D) 365744, PTD No. 175566, Mukim Plentong, Daerah Johor Bahru, Negeri Johor

Postal AddressOff Jalan Lembah, Bandar Seri Alam, 81750 Masai, Johor Bahru

A piece of vacant land under the category of land use for building purpose

190,402 (on land)

Freehold Not applicable

19 August 2009

7,896


HS(D) 365842, PTD No. 175665, Mukim Plentong, Daerah Johor Bahru, Negeri Johor

Postal AddressNo. 6, Jalan Lembah, Bandar Seri Alam, 81750 Masai, Johor Bahru

2-storey office building, a single storey office and a guard house / partially used for sales office and partially rented out for office use

346,164 / 45,589

Freehold 16 years 19 August 2009

21,334



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)


Town Lease Nos. 017545961, 017545970, 017545989, 017545998 and 017546002, Likas in the District of Kota Kinabalu

Postal AddressLots 33, 34, 35, 36 and 37, Lorong Juta 5, Plaza Juta, Batu 4, Jalan Tuaran Likas, 88400 Kota Kinabalu, Sabah

5 lots of a 4-storey commercial building / campus

8,690 / 35,415


expiring on 31

December 2092

4 years 25 August 2008

8,871


Town Lease Nos. 017546011, 017546020 and 017546039, Likas in the District of Kota Kinabalu

Postal AddressLots 38, 39 and 40, Lorong Juta 5, Plaza Juta, Batu 4, Jalan Tuaran Likas, 88400 Kota Kinabalu, Sabah

3 lots of a 4-storey commercial building / campus

5,476 / 21,249


expiring on 31

December 2092


4,820


Town Lease Nos. 017546048, 017546057, 017546066, 017546075, 017546084, 017546093, 017546100, 017546119, 017546128, 017546137, 017546146, 017546155, 017546164 & 017546173, Likas in the District of Kota Kinabalu

Postal AddressLots 41 - 54, Block E & F, Lorong Juta 5, Plaza Juta, Jalan Tuaran Likas, 88400 Kota Kinabalu, Sabah

2 blocks of 5-storey building / campus

20,990 / 104,950


expiring on 31

December 2092

Less than 1 year

20 December

2009

49,877



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)

35 The General Conference Corporation of the Seventh-Day Adventists / masterskill

Sublot 1 (Lot 4604) held under part of Lot 51, Block 218, Kuching North Land District

Postal AddressNo. 4604, Jalan Stapok/Jalan Batu Kawa Junction, 3 1/2 mile, Kuching

3-storey corner terraced shophouse / campus

1,452/ 4,805 Leasehold for 870

years expiring on

8 March 2826


1,096




3-storey intermediate terraced shophouse / campus

1,200 / 4,805

Leasehold for 870

years expiring on

8 March 2826


1,074




3-storey immediate terraced shophouse / campus

1,201 / 4,805

Leasehold for 870

years expiring on

8 March 2826


882





1,173 / 4,805

Leasehold for 870

years expiring on

8 March 2826


883



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)





1,931 / 4,805

Leasehold for 870

years expiring on

8 March 2826


1,845





1,931 /4,805 Leasehold for 870

years expiring on

8 March 2826


1,881





1,174 / 4,805

Leasehold for 870

years expiring on

8 March 2826


1,770





1,464 / 4,805

Leasehold for 870

years expiring on

8 March 2826


1,269



No.





Approximate Age of

BuildingDate of

Acquisition

Net book value

as at 31 December

2012(Rm’000)


a) Geran 51401, Lot 7622;b) Geran 51402, Lot 7623; c) Geran 51407, Lot 7628;d) Geran 51408, Lot 7629; ande) Geran 51409, Lot 7630; all in Mukim Kajang, Daerah Ulu Langat, Negeri Selangor

Five (5) pieces of vacant land

1,091,450 (on land)


26 August 2010

15,837


a) Geran 51385, Lot 7606;b) Geran 51398, Lot 7620; andc) Geran 51406, Lot 7627; all in Mukim Kajang, Daerah Ulu Langat, Negeri Selangor

Three (3) pieces of vacant land

797,148 (on land)


26 August 2010

11,557


Geran 51397, Lot 7619, Mukim Kajang, Daerah Ulu Langat, Negeri Selangor


239,852 (on land)


26 August 2010

3,726


Geran 51413, Lot 7635, Mukim Kajang, Daerah Ulu Langat, Negeri Selangor


230,051 (on land)


15 october 2010

3,282


PN 3949, Lot No. 3, Bandar Petaling Jaya, Daerah Petaling, Negeri Selangor Darul Ehsan.

Postal AddressNo. 14, Jalan 19/1, Section 19, 46300 Petaling Jaya, Selangor Darul Ehsan

6 storey building and 2 levels of basement car park

44,812 / 173,193

Leasehold for 99

years and expiring on 29/09/2063

16 years 30 November

2011

27,576



ANALYSIS OF SHAREHOLDINGS AS AT 13 MAY 2013

Authorised Share Capital : 1,000,000,000 ordinary shares of RM0.20 eachIssued and paid-up share capital : 409,905,780 ordinary shares of RM0.20 each Class of shares : ordinary shares of RM0.20 each Voting rights : one vote per ordinary shareNumber of shareholders : 5,572

DISTRIBuTION OF SHAREHOlDINGS

ShareholdingsNo. of

Shareholders% of

Shareholders No. of Shares% of Issued

Share Capital

Less than 100 22 0.40 292 0.00100 – 1,000 622 11.16 527,162 0.131,001 – 10,000 3,348 60.09 17,532,200 4.2810,001 – 100,000 1,392 24.98 42,679,600 10.41100,001 to less than 5% of issued shares 185 3.32 123,357,077 30.095% and above of issued shares 3 0.05 225,809,449 55.09

5,572 100.00 409,905,780 100.00

SuBSTANTIAl SHAREHOlDERS

The direct and indirect shareholdings of the shareholders holding more than 5% in Masterskill Education Group Berhad based on the Register of Substantial Shareholders are as follows:-

DIRECT INDIRECT

Name No. of

Shares held% of Issued

SharesNo. of


Shares

Siva Kumar a/l M Jeyapalan 122,000,000(1) 29.76 – –

Masterskill Holding Limited (“MHL”) 88,208,370(2) 21.52 – –

Carline a/p A Johnson D’Cruz 25,601,079(1) 6.25 – –

Dato’ Sri Dr. Santhara Kumar a/l Ramanaidu – – 25,601,079(3) 6.25

Crescent Masterskill SPV Limited (“CM-SPV”) – – 88,208,370(4) 21.52

Crescent Point Investment Holdings Limited (“CPIHL”) – – 88,208,370(5) 21.52

Sami Ali A. Sindi – – 97,094,165(6) 23.69

Notes: (1) Shares held under Cimsec Nominees (Tempatan) Sdn. Bhd.(2) Shares held under Cimsec Nominees (Asing) Sdn. Bhd.(3) Deemed interest held through his spouse.(4) Deemed interested by virtue of its shareholding interest in MHL pursuant to Section 6A of the Companies Act, 1965 (“the Act”).(5) Deemed interested by virtue of its shareholding interest in CM-SPV pursuant to Section 6A of the Act.(6) Deemed interested by virtue of his shareholding interest in CPIHL and Crescent Group Investments Ltd pursuant to Section 6A

of the Act, which in turn is deemed interested by virtue of its shareholding interest in Crescent Asia Investments Ltd pursuant to Section 6A of the Act, and which in turn is deemed interested by virtue of its shareholding interest in Asia Healthcare Holdings I, Ltd pursuant to Section 6A of the Act.


ANALYSIS OF SHAREHOLDINGS AS AT 13 MAY 2013 (CONT’D)

DIRECTORS’ SHAREHOlDINGS

The interests of the Directors of Masterskill Education Group Berhad in the shares of the Company based on the Company’s Register of Directors’ Shareholdings are as follows:-

DIRECT INDIRECT

Name No. of


SharesNo. of


Shares

YTM Tunku Dato’ Seri Kamel Bin Tunku Rijaludin – – – –

Dato’ Sri Dr. Santhara Kumar a/l Ramanaidu – – 25,601,079 (1) 6.25

Richard Todd Scanlon – – 8,885,795 (2) 2.17

Datuk Kamarudin Bin. Md. Ali – – – –

Lim Yong Chye Lawrence – – – –

Wisun Soon – – – –

Mathuraiveran a/l Marimuthu – – 5,000 (1) 0.00

Siva Kumar a/l M Jeyapalan 122,000,000 29.76 – –

Notes:(1) Deemed interest held through his spouse. (2) Deemed interested by virtue of his shareholding interest in Crescent Group Investments Ltd pursuant to Section 6A of the Act, which

in turn is deemed interested by virtue of its shareholding interest in Crescent Asia Investments Ltd pursuant to Section 6A of the Act, and which in turn is deemed interested by virtue of its shareholding interest in Asia Healthcare Holdings I, Ltd pursuant to Section 6A of the Act.

ANAlySIS OF SHAREHOlDINGS

TOp 30 lARGEST SHAREHOlDERS AS AT 13 mAy 2013

No. Shareholders Shareholdings percentage (%)

1. Cimsec Nominees (Tempatan) Sdn. Bhd.CIMB for Siva Kumar A/L M Jeyapalan (PB)

112,000,000 27.32

2. Cimsec Nominees (Asing) Sdn. Bhd.Masterskill Holding Limited

88,208,370 21.52

3. Cimsec Nominees (Tempatan) Sdn. Bhd.CIMB for Carline A/P A Johnson D’Cruz (PB)

25,601,079 6.25

4. Cimsec Nominees (Tempatan) Sdn. Bhd.CIMB for Siva Kumar A/L M Jeyapalan (PBCL-0G0015)

10,000,000 2.44

5. Cimsec Nominees (Asing) Sdn. Bhd.Asia Healthcare Holdings I Ltd

8,885,795 2.17

6. Citigroup Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account for Tan Kian Aik (740028152)

6,987,400 1.70

7. HSBC Nominees (Asing) Sdn. Bhd.Exempt an for Banque Privee Edmond De Rothschild Europe (BPERE-CLIENTS)

6,907,572 1.69




8. Cartaban Nominees (Asing) Sdn. Bhd.Exempt an for Credit Agricole Titres Brunoy

6,092,428 1.49

9. HSBC Nominees (Asing) Sdn. Bhd.Exempt an for Credit Suisse Securities (USA) LLC (PB Client)

5,638,100 1.38

10. Alliancegroup Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Tan Kian Aik (8058967)

5,417,800 1.32

11. Citigroup Nominees (Asing) Sdn. Bhd.CB Spore GW for Firth Asian Smaller Companies Fund

5,325,000 1.30

12. HSBC Nominees (Asing) Sdn. Bhd.Exempt an for JPMorgan Chase Bank, National Association (Netherlands)

3,150,000 0.77

13. HSBC Nominees (Asing) Sdn. Bhd.BNYM SA/NV for Hereford Funds Firth Asian Value Fund

2,954,200 0.72

14. Amsec Nominees (Tempatan) Sdn. Bhd.Amtrustee Berhad for Pacific Pearl Fund (UT-PM-PPF)

2,920,700 0.71

15. Alliancegroup Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Tan Kian Chuan (8059299)

2,400,000 0.59

16. Citigroup Nominees (Asing) Sdn. Bhd.Merrill Lynch International

2,341,200 0.57

17. Cartaban Nominees (Asing) Sdn. Bhd.Exempt an for Credit Agricole (Suisse) SA

2,000,000 0.49

18. Kandiah A/L Subramaniam 2,000,000 0.49

19. HSBC Nominees (Asing) Sdn. Bhd.Exempt an for JPMorgan Chase Bank, National Association (Rep of China)

1,482,100 0.36

20. HSBC Nominees (Asing) Sdn. Bhd.BNYM SA/NV for Alexanderplatz Investissement

1,456,100 0.36

21. EB Nominees (Tempatan) Sendirian BerhadPledged Securities Account for Md. Yusoff Merican Bin Yahaya Merican (SFC)

1,350,000 0.33

22. Cimsec Nominees (Asing) Sdn. Bhd.CIMB for Lee Chun Fun (PB)

1,100,000 0.27

23. Cartaban Nominees (Asing) Sdn. Bhd.RBC ISB for Equities Asia/Pacific Ex Japan FH (USD) (LGT CAP INV SC3)

1,021,000 0.25

24. HLIB Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Rozman Bin Omar

992,500 0.24

25. Cimsec Nominees (Asing) Sdn. Bhd.Asian Education Investments Ltd

901,132 0.22






26. HSBC Nominees (Asing) Sdn. Bhd.Exempt an for Morgan Stanley & Co. LLC (Client)

850,550 0.21

27. Koperasi Permodalan Felda Malaysia Berhad 815,500 0.20

28. Maybank Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Tan Kian Ling

782,600 0.19

29. Citigroup Nominees (Asing) Sdn. Bhd. GSCO for Double A Limited

700,000 0.17

30. Cartaban Nominees (Asing) Sdn. Bhd.SSBT fund SD4N for Government of the Province of Alberta

693,700 0.17


The Directors hereby submit their report and the audited financial statements of the Group and of the Company for the year ended 31 December 2012.

pRINCIpAl ACTIvITIES

The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in Note 5 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

RESulTS

Group CompanyRm’000 Rm’000

(Loss)/Profit for the year attributable to:owners of the Company (28,188) 65,529Non-controlling interests (4) –

(28,192) 65,529

RESERvES AND pROvISIONS

There were no material transfers to or from reserves and provisions during the financial year under review.

DIvIDENDS

Since the end of the previous financial year, the Company paid:

i) a second interim ordinary dividend of approximately 1.40 sen per ordinary share, tax exempt under the single tier tax system, totalling RM5,739,000 in respect of the financial year ended 31 December 2011 on 9 April 2012; and

ii) a first interim ordinary dividend of approximately 14.64 sen per ordinary share, tax exempt under the single tier tax system, totalling RM60,010,000 in respect of the financial year ended 31 December 2012 on 3 July 2012.

DIRECTORS OF THE COmpANy

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

YTM Tunku Dato’ Seri Kamel Bin Tunku Rijaludin Dato’ Sri Dr. Santhara Kumar a/l RamanaiduDatuk Kamarudin Bin Md. AliRichard Todd Scanlon Lim Yong Chye Lawrence - alternate director to Richard Todd Scanlon Wisun Soon (appointed on 24 April 2012)Mathuraiveran a/l Marimuthu (appointed on 1 July 2012)Siva Kumar a/l M Jeyapalan (appointed on 15 April 2013)YM Raja Mohd Azmi Bin Raja Razali (retired on 6 June 2012)

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2012


DIRECTORS’ INTERESTS

The interests and deemed interests in the ordinary shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at year end (including the interests of the spouses or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of Rm0.20 eachAt

1.1.2012/ Date of appointment Acquired Disposed

At 31.12.2012

Dato’ Sri Dr. Santhara Kumar a/l Ramanaidu:Interest in the Company:

- own 41,000,000 7,000,000 – 48,000,000- deemed* 49,601,079 – – 49,601,079

Richard Todd Scanlon:Deemed interest in the Company held throughAsia Healthcare Holdings I, Ltd 8,885,795 – – 8,885,795

mathuraiveran a/l marimuthu - deemed# 5,000 – – 5,000

* Datin Sri Carline a/p A. Johnson D’Cruz is the spouse of Dato’ Sri Dr. Santhara Kumar a/l Ramanaidu. In accordance with Section 134(12)(c) of the Companies Act, 1965, the interest of Datin Sri Carline a/p A. Johnson D’Cruz in the shares of the Company and of its related corporations (other than wholly-owned subsidiaries) shall be treated as the interest of Dato’ Sri Dr. Santhara Kumar a/l Ramanaidu also.

# Held by Parimalavathi Bai a/p Kuppara Suami, the spouse of Mathuraiveran a/l Marimuthu

By virtue of his interests in the shares of the Company, Dato’ Sri Dr. Santhara Kumar a/l Ramanaidu is also deemed interested in the shares of the subsidiaries during the financial year to the extent that Masterskill Education Group Berhad has an interest.

None of the other Directors holding office at 31 December 2012 had any interest in the ordinary shares of the Company and of its related corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statement or the fixed salaries of a full time employee of the Company) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than as disclosed in Note 27 to the financial statements.

There were no other arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

ISSuE OF SHARES AND DEBENTuRES

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

There were no debentures issued during the financial year.

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2012 (CONT’D)


OpTIONS GRANTED OvER uNISSuED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year.

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) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise.

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 financial statements of the Group and of the Company misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading.

At the date of this report, there does not exist:

i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

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

In the opinion of the Directors, the financial performance of the Group and of the Company for the year ended 31 December 2012 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

DIRECTORS’ REPORTFOR THE YEAR ENDED 31 DECEMBER 2012 (CONT’D)


AuDITORS

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

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

…………………………………………………………yTm Tunku Dato’ Seri Kamel Bin Tunku Rijaludin

…………………………………………………………Siva Kumar a/l m Jeyapalan

Kuala Lumpur,

Date: 26 April 2013

DIRECTORS’ REPORTFOR THE YEAR ENDED 31 DECEMBER 2012 (CONT’D)


Group Company Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000AssetsProperty, plant and equipment 3 361,960 335,394 306,196 – – – Intangible assets 4 42,286 42,286 42,237 – – – Investments in subsidiaries 5 – – – 134,226 126,676 126,645other investments 6 10,102 10,210 – 10,102 10,210 – Amounts due from

subsidiaries 7 – – – 88,039 14,907 –

Total non-current assets 414,348 387,890 348,433 232,367 151,793 126,645

Trade and other receivables 7 60,832 121,405 141,244 107 54 42Prepayments 2,585 4,154 3,114 36 – 171Current tax assets 8,982 17,775 13,545 – – – Cash and cash equivalents 8 32,195 110,586 144,897 3,137 88,907 102,639

Total current assets 104,594 253,920 302,800 3,280 88,961 102,852

Total assets 518,942 641,810 651,233 235,647 240,754 229,497

EquityShare capital 81,981 81,981 81,981 81,981 81,981 81,981Share premium 144,225 144,225 144,225 144,225 144,225 144,225Reserves 196,068 290,098 294,315 9,092 9,420 1,823

Total equity attributable to owners of the Company 422,274 516,304 520,521 235,298 235,626 228,029

Non-controlling interests 131 – – – – –

Total equity 9 422,405 516,304 520,521 235,298 235,626 228,029

liabilitiesBorrowings 10 47,546 43,312 35,619 – – – Deferred tax liabilities 11 – 7,666 9,804 – – –

Total non-current liabilities 47,546 50,978 45,423 – – –

Borrowings 10 20,719 10,864 9,869 – – – Trade and other payables 12 28,268 63,659 75,420 345 5,124 1,468Current tax liabilities 4 5 – 4 4 –

Total current liabilities 48,991 74,528 85,289 349 5,128 1,468

Total liabilities 96,537 125,506 130,712 349 5,128 1,468

Total equity and liabilities 518,942 641,810 651,233 235,647 240,754 229,497

The notes on pages 66 to 108 are an integral part of these financial statements.

STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2012


Group CompanyNote 2012 2011 2012 2011

Rm’000 Rm’000 Rm’000 Rm’000

Revenue 13 148,824 250,171 65,753 49,532Cost of services (96,655) (120,216) – –

Gross profit 52,169 129,955 65,753 49,532Administrative expenses (59,215) (64,115) (1,194) (1,755)other expenses (27,694) (25,020) – – other income 323 837 – 37

Results from operating activities 14 (34,417) 41,657 64,559 47,814Interest expense 16 (3,489) (3,254) – – Interest income 2,459 4,551 1,306 2,800

(Loss)/Profit before tax (35,447) 42,954 65,865 50,614Tax expense 17 7,255 (4,810) (336) (656)

(Loss)/Profit for the year (28,192) 38,144 65,529 49,958

Other comprehensive (expense)/ income, net of taxFair value of available-for-sale financial assets 18 (108) 7,156 (108) 7,156

Other comprehensive (expense)/ income for the year (108) 7,156 (108) 7,156

Total comprehensive (expense)/ income for the year (28,300) 45,300 65,421 57,114

(Loss)/Profit attributable to:owners of the Company (28,188) 38,144 65,529 49,958Non-controlling interests (4) – – –

(Loss)/Profit for the year (28,192) 38,144 65,529 49,958

Total comprehensive (expense)/ income attributable to:owners of the Company (28,296) 45,300 65,421 57,114Non-controlling interests (4) – – –

Total comprehensive (expense)/ income for the year (28,300) 45,300 65,421 57,114

(loss)/Earnings per ordinary share (sen)Basic 19 (6.88) 9.31


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2012


Attributable to owners of the Company Non-distributable Distributable

NoteShare

capitalShare

premiumFair value

reserveRetainedearnings Total

Noncontrolling-

interests Total

equityGroup Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000

At 1 January 2011 81,981 144,225 – 294,315 520,521 – 520,521

Fair value of available-for-sale financial asset – – 7,156 – 7,156 – 7,156

Profit for the year – – – 38,144 38,144 – 38,144

Total comprehensive income for the year – – 7,156 38,144 45,300 – 45,300

Contributions by and distributions to owners of the Company- Dividends to owners of

the Company 20 – – – (49,517) (49,517) – (49,517)

Total transactions with owners of the Company – – – (49,517) (49,517) – (49,517)

At 31 December 2011/ 1 January 2012 81,981 144,225 7,156 282,942 516,304 – 516,304

Fair value of available-for-sale financial asset – – (108) – (108) – (108)

Loss for the year – – – (28,192) (28,192) – (28,192)

Total comprehensive expense for the year – – (108) (28,192) (28,300) – (28,300)

Contributions by and distributions to owners of the Company- Dividends to owners of

the Company 20 – – – (65,749) (65,749) – (65,749)Changes in ownership

interests in a subsidiary – – – 19 19 131 150

Total transactions with owners of the Company – – – (65,730) (65,730) 131 (65,599)

At 31 December 2012 81,981 144,225 7,048 189,020 422,274 131 422,405

Note 9 Note 9 Note 9

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2012


Attributable to owners of the Company Non-distributable Distributable

Share Share Fair value Retained TotalNote capital premium reserve earnings equity

Company Rm’000 Rm’000 Rm’000 Rm’000 Rm’000

At 1 January 2011 81,981 144,225 – 1,823 228,029

Fair value of available-for-sale financial asset – – 7,156 – 7,156Profit for the year – – – 49,958 49,958

Total comprehensive income for the year – – 7,156 49,958 57,114Contributions by and distributions to

owners of the Company

- Dividends to owners of the Company 20 – – – (49,517) (49,517)

Total transactions with owners of the Company – – – (49,517) (49,517)

At 31 December 2011/ 1 January 2012 81,981 144,225 7,156 2,264 235,626

Fair value of available-for-sale financial asset – – (108) – (108)Profit for the year – – – 65,529 65,529

Total comprehensive income for the year – – (108) 65,529 65,421Contributions by and distributions to

owners of the Company

- Dividends to owners of the Company 20 – – – (65,749) (65,749)

Total transactions with owners of the Company – – – (65,749) (65,749)

At 31 December 2012 81,981 144,225 7,048 2,044 235,298

Note 9 Note 9 Note 9 Note 9


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2012 (CONT’D)



Rm’000 Rm’000 Rm’000 Rm’000Cash flows from operating activities

(Loss)/Profit before tax (35,447) 42,954 65,865 50,614Adjustments for : Depreciation of property, plant and equipment 25,212 22,745 – – Interest expense 3,489 3,254 – – Interest income (2,459) (4,551) (1,306) (2,800) Property, plant and equipment written off 5,247 4 – –

Loss/(Gain) on disposal of property, plant and equipment 656 (3) – –

Operating (loss)/profit before working capital changes (3,302) 64,403 64,559 47,814

Changes in working capital:Trade and other receivables and prepayments 62,142 18,799 (73,221) (14,748)Trade and other payables (35,391) (11,761) (4,779) 3,656

Cash generated from/(used in) operating activities 23,449 71,441 (13,441) 36,722Income tax refund 8,726 – – – Income tax paid (345) (11,173) (336) (652)Interest paid (3,489) (3,254) – – Interest received 2,459 4,551 1,306 2,800

Net cash from operating activities 30,800 61,565 (12,471) 38,870

Cash flows from investing activitiesIncrease in investments in subsidiaries – – (7,550) (31)Increase in intangible assets – (49) – – Acquisition of other investments – (3,054) – (3,054)(Uplift of)/Deposits pledged with licensed banks (60) 222 – – Purchase of property, plant and equipment (57,839) (51,947) – – Proceeds from disposal of property, plant and equipment 158 3 – –

Net cash used in investing activities (57,741) (54,825) (7,550) (3,085)

Cash flows from financing activitiesDisposal to non-controlling interests 150 – – – Repayment of borrowings (8,600) (7,034) – – Proceeds from borrowings 26,200 18,600 – – Repayment of finance lease liabilities (3,511) (2,878) – – Dividend paid (65,749) (49,517) (65,749) (49,517)

Net cash used in financing activities (51,510) (40,829) (65,749) (49,517)

Net decrease in cash and cash equivalents (78,451) (34,089) (85,770) (13,732)Cash and cash equivalents at 1 January 109,735 143,824 88,907 102,639

Cash and cash equivalents at 31 December (i) 31,284 109,735 3,137 88,907

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2012


(i) Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts:


Rm’000 Rm’000 Rm’000 Rm’000Deposits placed with licensed banks 8 18,745 107,992 800 88,753Cash and bank balances 8 13,450 2,594 2,337 154

Cash and cash equivalents 32,195 110,586 3,137 88,907Less: Deposits pledged with licensed banks 8 (911) (851) – –

Cash and cash equivalents 31,284 109,735 3,137 88,907


STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2012 (CONT’D)


masterskill Education Group Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office of the Company are as follows:

principal place of businessG-8 Jalan Kemacahaya 11Taman Kemacahaya, Batu 943200 CherasSelangor Darul Ehsan

Registered officeB-13-15, Level 13, Menara Prima Tower B,Jalan PJU1/39, Dataran Prima47301 Petaling JayaSelangor Darul Ehsan

The consolidated financial statements of the Company as at and for the year ended 31 December 2012 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”). The financial statements of the Company as at and for the year ended 31 December 2012 do not include other entities. The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in Note 5.

These financial statements were authorised for issue by the Board of Directors on 26 April 2013.

1. BASIS OF pREpARATION

(a) Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards and the Companies Act, 1965 in Malaysia. These are the Group’s and Company’s first financial statements prepared in accordance with MFRS and MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards has been applied.

In the previous financial years, the financial statements of the Group and of the Company were prepared in accordance with Financial Reporting Standards (“FRS”) in Malaysia. The transition to MFRS does not have financial impact to the financial statements of the Group and of the Company.

The Group and Company have early adopted the amendments to MFRS 101, Presentation of Financial Statements which are effective for annual periods beginning on or after 1 July 2012. The early adoption of the amendments to MFRS 101 has no impact on the financial statements other than the presentation format of the statement of profit or loss and other comprehensive income.

The following are accounting standards, amendments and interpretations of the MFRS framework that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and by the Company:

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2013• MFRS 10, Consolidated Financial Statements• MFRS 11, Joint Arrangements• MFRS 12, Disclosure of Interests in Other Entities• MFRS 13, Fair Value Measurement• MFRS 119, Employee Benefits (2011)• MFRS 127, Separate Financial Statements (2011)• MFRS 128, Investments in Associates and Joint Ventures (2011)• IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine

NOTES TO THE FINANCIAL STATEMENTS


1. BASIS OF pREpARATION (Cont’d)

(a) Statement of compliance (Cont’d)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2013(Cont’d)• Amendments to MFRS 7, Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards - Government Loans• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2009-2011

Cycle)• Amendments to MFRS 101, Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 132, Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 10, Consolidated Financial Statements: Transition Guidance• Amendments to MFRS 11, Joint Arrangements: Transition Guidance• Amendments to MFRS 12, Disclosure of Interests in Other Entities: Transition Guidance

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2014• Amendments to MFRS 10, Consolidated Financial Statements: Investment Entities• Amendments to MFRS 12, Disclosure of Interests in Other Entities: Investment Entities• Amendments to MFRS 127, Separate Financial Statements (2011): Investment Entities• Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2015• MFRS 9, Financial Instruments (2009)• MFRS 9, Financial Instruments (2010)• Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Date of MFRS 9 and Transition Disclosures

The Group and the Company plan to apply the abovementioned standards, amendments and interpretations:

• from the annual period beginning on 1 January 2013 for those standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2013, except for MFRS 11, 12, 119 and 128, IC Interpretation 20, and Amendments to MFRS 11 and 12, which are not applicable to the Group and to the Company.

• from the annual period beginning on 1 January 2014 for those standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2014, except for MFRS 12 which is not applicable to the Group and to the Company.

• from the annual period beginning on 1 January 2015 for those standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2015.

Material impacts of initial application of a standard, an amendment or an interpretation are discussed below:

(i) mFRS 9, Financial Instruments

MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets. Upon adoption of MFRS 9, financial assets will be measured at either fair value or amortised cost. It is expected that the Group’s investment in unquoted shares will be measured at fair value through other comprehensive income.

The adoption of MFRS 9 will result in a change in accounting policy. The Group is currently assessing the financial impact of adopting MFRS 9.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)


1. BASIS OF pREpARATION (Cont’d)

(a) Statement of compliance (Cont’d)

(ii) mFRS 10, Consolidated Financial Statements

MFRS 10, Consolidated Financial Statements introduces a new single control model to determining which investees should be consolidated. MFRS 10 supersedes MFRS 127, Consolidated and Separate Financial Statements and IC Interpretation 112, Consolidation – Special Purpose Entities. There are three elements to the definition of control in MFRS 10: (i) power by investor over an investee, (ii) exposure, or rights, to variable returns from investor’s involvement with the investee, and (iii) investor’s ability to affect those returns through its power over the investee.

The adoption of MFRS 10 will result in a change in accounting policy. The Group is currently assessing the financial impact of adopting MFRS 10.

(iii) Amendments to mFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)

The amendments to MFRS 116 clarify that items such as spare parts, stand-by equipment and servicing equipment shall be recognised as property, plant and equipment when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventory. Currently, the Group does not hold such items.

The initial application of other standards, amendments and interpretations is not expected to have any material financial impacts to the current and prior periods financial statements of the Group and of the Company upon their first adoption.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.

(c) Functional and presentation currency

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

(d) use of estimates and judgements

The preparation of the financial statements in conformity with Malaysian Financial Reporting Standards (“MFRS”) requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

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

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

• Note 4 – Impairment testing for cash-generating units containing goodwill



2. SIGNIFICANT ACCOuNTING pOlICIES

The accounting policies set out below have been applied consistently to the periods presented in these financial statements, and in preparing the opening MFRS statements of financial position of the Group and of the Company at 1 January 2011 (the transition date to MFRS framework), unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including unincorporated entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Control exists when the Company has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses. The cost of investments includes transaction costs.

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.

Acquisitions on or after 1 January 2011For acquisitions on or after 1 January 2011, the Group measures the cost of goodwill at the acquisition date as:• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

As part of its transition to MFRS, the Group elected not to restate those business combinations that occurred before the date of transition to MFRSs, i.e. 1 January 2011. Goodwill arising from acquisitions before 1 January 2011 has been carried forward from the previous FRS framework as at the date of transition.

(iii) Acquisitions of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.



2. SIGNIFICANT ACCOuNTING pOlICIES (Cont’d)

(a) Basis of consolidation (Cont’d)

(iv) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

(v) Transactions eliminated on consolidation

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

(b) Financial instruments

(i) Initial recognition and measurement

A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise financial instruments as follows:

Financial assets

(a) Loans and receivables

Loans and receivables category comprises debt instruments that are not quoted in an active market.

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.





(b) Financial instruments (Cont’d)

(ii) Financial instrument categories and subsequent measurement (Cont’d)

(b) Available-for-salefinancialassets Available-for-sale category comprises investment in equity and debt securities instruments that are not held for

trading.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss.

All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment (see Note 2(g)(i)).

Financial liabilities

All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss.

(iii) Derecognition

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

(c) property, plant and equipment

(i) Recognition and measurement

Freehold land and work-in-progress are stated at cost. other items of property, plant and equipment are stated at cost less any accumulated depreciation and any accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Cost also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.



(c) property, plant and equipment (Cont’d)

(i) Recognition and measurement (Cont’d)

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

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

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

(ii) Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.

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

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

Buildings 33 1/3 yearsBooks 10 yearsMotor vehicles 5 yearsFurniture and fittings 10 yearsComputer, LCD and overhead projectors 2 1/2 yearsRenovation and electrical installation 10 yearsOffice and medical equipment 10 yearsRobes 5 years

Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period and adjusted as appropriate.





(d) leased assets

(i) Finance lease

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

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

Leasehold land which in substance is a finance lease is classified as property, plant and equipment.

(ii) Operating lease

Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operating leases; the leased assets are not recognised in the statement of financial position.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

Leasehold land which in substance is an operating lease is classified as prepaid lease payments.

(e) Intangible assets

(i) Goodwill

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

(ii) Amortisation

Goodwill is not amortised but is tested for impairment annually and whenever there is an indication that it may be impaired.

(f) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in value with original maturities of three months or less and are used by the Group and the Company in the management of their short-term commitments. For the purpose of the statements of cash flows, cash and cash equivalents are presented net of pledged deposits.



(g) Impairment

(i) Financial assets

All financial assets (except for investments in subsidiaries) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists, then the financial asset’s recoverable amount is estimated.

An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity and recognised to profit or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses recognised in profit or loss for an investment in an equity instrument is not reversed through profit or loss.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

(ii) Other assets

The carrying amounts of other assets (except for deferred tax asset) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, the recoverable amount is estimated each period at the same time.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to group of cash-generating units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.





(g) Impairment (Cont’d)

(ii) Other assets (Cont’d)

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or the group of cash-generating units) and then to reduce the carrying amount of the other assets in the cash-generating unit (or the group of cash-generating units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised.

(h) Equity instruments

Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.

(i) Issue expenses

Costs directly attributable to issue of instruments classified as equity are recognised as a deduction from equity.

(ii) Ordinary shares

Ordinary shares are classified as equity.

(i) Employee benefits

(i) Short-term employee benefits

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

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

(ii) State plans

The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to which they relate. once the contributions have been paid, the Group has no further payment obligations.



(j) provisions

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

(k) Contingent liabilities

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

(l) Revenue and other income

(i) Services

Revenue of the Group represents course fees, registration fees, processing fees, administration fees and other miscellaneous fees.

Revenue from course fees is recognised over the period of the course in profit or loss. Registration fees, processing fees and administration fees are recognised in profit or loss upon commencement of the course.

other miscellaneous fees represent physiotherapy and rehabilitation services fees, dialysis services fees, convocation fees and co-curriculum fees.

(ii) Interest income

Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest income arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs.

(iii) Dividend income

Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

(m) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.

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





(m) Borrowing costs (Cont’d)

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

(n) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are not discounted.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

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

Unutilised investment tax allowance, being tax incentive that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be available against which the unutilised tax incentive can be utilised.

(o) Earnings per ordinary share

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding adjusted for own shares held for the effects of all dilutive potential ordinary shares.

(p) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, which in this case is the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.


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3. pROpERTy, plANT AND EquIpmENT (Cont’d)

3.1 leased plant and machinery

Included in property, plant and equipment of the Group are motor vehicles acquired under finance lease arrangements with a carrying amount of RM7,298,000 (31.12.2011: RM10,080,000; 1.1.2011: RM12,231,000).

3.2 Security

At 31 December 2012, properties and motor vehicles with a carrying amount of RM127,777,000 (31.12.2011: RM102,677,000; 1.1. 2011: RM68,251,000) and RM688,000 (31.12.2011: RM1,001,000; 1.1.2011: RM1,344,000) respectively are pledged to secure bank loans (see Note 10).

3.3 land

Included in the carrying amounts of land are:

31.12.2012 31.12.2011 1.1.2011Rm’000 Rm’000 Rm’000

Freehold land 56,186 56,186 56,186Leasehold land with unexpired lease period of more than 50 years 33,425 23,930 24,207

Total 89,611 80,116 80,393

3.4 Others

At 31 December 2012, the gross amount of property, plant and equipment fully depreciated but still in use amounted to RM11,236,000 (31.12.2011: RM7,541,000; 1.1.2011: RM6,446,000).

The land title for freehold land and buildings with carrying amount of RM33,400,000 (31.12.2011: RM34,460,000; 1.1.2011: RM32,557,000) is pending issuance by the authorities.

The land titles for certain other freehold land and buildings with carrying amount of RM22,701,000 (31.12.2011: RM23,492,000; 1.1.2011: RM23,255,000) are pending issuance by the relevant authorities as a result of legal matters highlighted in Note 26.

4. INTANGIBlE ASSETS

Group31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000CostGoodwill 42,286 42,286 42,237

The goodwill recognised is attributable mainly to skills and technical talent of the business work force and to the operating division’s market position in the education sector.



4. INTANGIBlE ASSETS (Cont’d)

Impairment testing for cash-generating units containing goodwill

For the purpose of impairment testing, goodwill is allocated to the Group’s operating division which represents the lowest level within the Group at which the goodwill is monitored for internal management purposes.

The recoverable amount of the operating division was based on its value in use calculation. The estimated value in use was determined using pre-tax discount rate of 12.5% based on the following key assumptions:

(i) Cash flows were projected based on past experience, actual operating results and prospective financial information.

(ii) The values assigned to the key assumptions represent management’s assessment of trends in the education industry and are based on both external sources and internal sources (historical data).

The estimated recoverable amount exceeds the carrying amount of goodwill. Management considers that no impairment should be recognised.

5. INvESTmENTS IN SuBSIDIARIES

CompanyNote 31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000At cost:

Unquoted shares 91,381 83,831 83,800Amounts due from subsidiaries 5.1 42,845 42,845 42,845

134,226 126,676 126,645

5.1 The amounts due from subsidiaries were non-trade in nature, unsecured and interest free. The settlement of the amounts

was neither planned nor likely to occur in the foreseeable future. As these amounts were in substance, a part of the Company’s net investment in the subsidiaries, they were stated at cost less accumulated impairment losses.



5. INvESTmENTS IN SuBSIDIARIES (Cont’d)

Details of the subsidiaries are as follows:

Name of subsidiaryCountry of

incorporation principal activities Effective ownership interest31.12.2012 31.12.2011 1.1.2011

% % %

Masterskill (M) Sdn. Bhd. Malaysia Provision of education in nursing and allied health sciences in the healthcare industry

100 100 100

Masterskill Campus Management Sdn. Bhd.

Malaysia Dormant 100 100 100

Valencia Education Group Sdn. Bhd. (f.k.a. Masterskill Worldwide Management Sdn. Bhd.)

Malaysia Provision of education, training, management consultation and investment holding

70 100 100

Masterskill Resources Sdn. Bhd. Malaysia Provision of support services 100 100 100

Medic Express Sdn. Bhd. Malaysia Dormant 100 100 100

Masterskill International Sdn. Bhd. Malaysia Dormant 100 100 100

Masterskill Physiotherapy and Rehabilitation Centre Sdn. Bhd.

Malaysia Provision of physiotherapy and rehabilitation services

100 100 100

MUCH Sdn. Bhd. Malaysia Dormant 100 100 100

Masterskill Dialysis Sdn. Bhd. Malaysia Provision of dialysis services and facilities

100 100 100

Unihealth (M) Sdn. Bhd. Malaysia Dormant 100 100 –

Aspiration Achievers Network Sdn. Bhd. (f.k.a. Unihealth Education Group Sdn. Bhd.)

Malaysia Dormant 100 100 –

Masterskill Gerontology Sdn. Bhd. Malaysia Dormant 100 100 –

Masterskill International Incorporated

Malaysia Dormant 100 100 –

In June 2012, the Group disposed 30% of its interest in Valencia Education Group Sdn. Bhd. (“VEG”) (f.k.a. Masterskill Worldwide Management Sdn. Bhd.) for RM3 in cash, decreasing its ownership from 100% to 70%. At the same time, VEG increased its issued and paid-up share capital from RM10 to RM500,000 by way of issuing of 499,990 new ordinary shares of RM1.00 each at par for cash. The carrying amount of VEG’s net assets in the Group’s financial statements on date of the disposal was RM53,000. The Group recognised non-controlling interests of RM131,000 in the statement of financial position and an increase in retained earnings of RM19,000.



6. OTHER INvESTmENTS

Group and Company31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000Non-currentAvailable-for-sale financial assets:

Quoted shares outside Malaysia 10,102 10,210 –

Representing items:At fair value 10,102 10,210 –

7. TRADE AND OTHER RECEIvABlES

Group CompanyNote 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000Non-current Amounts due from

subsidiaries 7.1 – – – 88,039 14,907 –

Current TradeTrade receivables 51,796 105,344 126,495 – – –

Non-tradeother receivables 1,246 2,085 2,813 – 54 42Deposits 7.2 7,790 13,976 11,936 – – – Amount due from a subsidiary 7.3 – – – 107 – –

60,832 121,405 141,244 107 54 42

7.1 The amounts due from subsidiaries were non-trade in nature, unsecured and interest free. The settlement of these amounts was neither planned nor likely to occur in the foreseeable future.

7.2 Included in deposits of the Group are rental deposits for accommodation amounting to RM3,579,000 (31.12.2011: RM6,383,000; 1.1.2011: RM8,046,000) and deposit for the acquisition of land and building amounting to RM2,940,000 (2011: RM5,814,000; 1.1.2011: RM2,940,000).

7.3 The amount due from a subsidiary was non-trade in nature, unsecured, interest free and repayable on demand.



8. CASH AND CASH EquIvAlENTS

Group Company31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000Deposits placed with licensed banks 18,745 107,992 135,055 800 88,753 100,676Cash and bank balances 13,450 2,594 9,842 2,337 154 1,963

32,195 110,586 144,897 3,137 88,907 102,639

Deposits placed with licensed banks of RM911,000 (31.12.2011: RM851,000; 1.1.2011: RM1,073,000) have been pledged to

licensed banks for a bank guarantee facility and to secure credit facilities granted to a subsidiary (Note 10).

9. SHARE CApITAl, SHARE pREmIum AND RESERvES

Share capitalGroup and Company

31.12.2012 31.12.2011 1.1.2011

AmountRm’000

Numberof shares

’000AmountRm’000

Numberof shares

’000AmountRm’000

Numberof shares

’000Authorised:ordinary shares of RM0.20 each 200,000 1,000,000 200,000 1,000,000 200,000 1,000,000

Issued and fully paid:ordinary shares of RM0.20 each 81,981 409,906 81,981 409,906 81,981 409,906

9.1 Ordinary shares

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company and rank equally with regard to the Company’s residual assets.

9.2 Share premium

This relates to share premium arising from the public issue of shares.

9.3 Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investments are derecognised or impaired.

9.4 Section 108 credit

The Finance Act, 2007 introduced a single tier company income tax system with effect from 1 January 2008. As such, the Company may distribute single tier dividends to its shareholders out of its retained earnings as at 31 December 2012.




10. BORROWINGS

Group31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000Non-currentFinance lease liabilities 1,581 4,497 7,771Revolving credit (Islamic) (secured) – 1,152 3,274Term loan (Islamic) (secured) 45,965 37,663 24,574

47,546 43,312 35,619

CurrentFinance lease liabilities 2,463 3,058 2,662Revolving credit (Islamic) (secured) 11,213 2,150 2,166Term loan (Islamic) (secured) 7,043 5,656 5,041

20,719 10,864 9,869

68,265 54,176 45,488

Security and rates

The revolving credit and term loan bear interest ranging from 5.1% to 5.6% (31.12.2011: 4.7% to 5.5%; 1.1.2011: 4.1% to 5.0%) per annum.

The subsidiary is to maintain a minimum tangible net worth (“TNW”) of RM250 million for the revolving credit, term loan and guarantee facilities (TNW is defined as the sum of the subsidiary’s shareholders fund, subordinated shareholder’s advances and reserves).

The credit facilities mentioned above are secured by the following:

i) Land and buildings (see Note 3) with a carrying amount of RM127,777,000 (31.12.2011: RM102,677,000; 1.1.2011:RM90,391,000).

ii) Assignment over the insurance policies taken for certain land and buildings secured.

iii) Assignment over the proceeds from Perbadanan Tabung Pendidikan Tinggi Nasional (“PTPTN”) and operating account.


10. BORROWINGS (Cont’d)

Terms and debt repayment schedule

Totalless than

1 year 2 - 5 yearsmore than

5 yearsGroup Rm’000 Rm’000 Rm’000 Rm’00031 December 2012Term loan (Islamic) (secured) 53,008 7,043 23,744 22,221Revolving credit (Islamic) (secured) 11,213 11,213 – –

64,221 18,256 23,744 22,221

31 December 2011Term loan (Islamic) (secured) 43,319 5,656 19,376 18,287Revolving credit (Islamic) (secured) 3,302 2,150 1,152 –

46,621 7,806 20,528 18,287

1 January 2011Term loan (Islamic) (secured) 29,615 5,041 17,243 7,331Revolving credit (Islamic) (secured) 5,440 2,166 3,274 –

35,055 7,207 20,517 7,331

Finance lease liabilities Finance lease liabilities are subject to interest rates ranging from 2.18% to 4.45% (31.12.2011: 2.18% to 4.45%; 1.1.2011: 2.18% to

4.45%) per annum and are payable as follows:

Futureminimum

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Futureminimum


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Futureminimum


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payments31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Group Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000

Less than one year 2,640 177 2,463 3,448 390 3,058 3,228 566 2,662

Between one and five years 1,624 43 1,581 4,743 246 4,497 8,446 675 7,771

4,264 220 4,044 8,191 636 7,555 11,674 1,241 10,433




11. DEFERRED TAx ASSETS/(lIABIlITIES)

Recognised deferred tax assets/(liabilities)

Deferred tax assets and liabilities are attributable to the following:

Assets liabilities Net31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000Property, plant

and equipment – – – (10,282) (11,160) (12,057) (10,282) (11,160) (12,057)Unutilised

investment tax allowance 1,577 3,494 2,253 – – – 1,577 3,494 2,253

Unabsorbed capital allowance 8,475 – – – – – 8,475 – –

Unutilised tax losses 230 – – – – – 230 – –

Net tax assets/(liabilities) 10,282 3,494 2,253 (10,282) (11,160) (12,057) – (7,666) (9,804)

unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following item (stated as gross):

31.12.2012 31.12.2011 1.1.2011Rm’000 Rm’000 Rm’000

Unutilised investment tax allowances 24,310 – – Unutilised tax losses 655 237 –

24,965 237 –

The unutilised tax losses do not expire under current tax legislation.

Deferred tax assets have not been recognised in respect of this item because it is not probable that sufficient taxable profit will be available against which the subsidiary can utilise the benefits there from.

movement in temporary differences during the year

Recognised At RecognisedAt in profit 31.12.2011/ in profit At

1.1.2011 or loss 1.1.2012 or loss 31.12.2012Rm’000 Rm’000 Rm’000 Rm’000 Rm’000

(Note 17) (Note 17)Property, plant and equipment (12,057) 897 (11,160) 878 (10,282)Unutilised investment tax allowance 2,253 1,241 3,494 (1,917) 1,577Unabsorbed capital allowance – – – 8,475 8,475Unutilised tax losses – – – 230 230

(9,804) 2,138 (7,666) 7,666 –


12. TRADE AND OTHER pAyABlES

Group CompanyNote 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000TradeTrade payables 689 423 550 – – –

Non-tradeother payables and accruals 12.1 27,579 63,236 74,870 345 409 1,468Amounts due to subsidiaries 12.2 – – – – 4,715 –

28,268 63,659 75,420 345 5,124 1,468

12.1 Included in other payables and accruals of the Group is an amount of RM13,971,000 (31.12.2011: RM49,608,000; 1.1.2011: RM53,353,000) being registration fees received in advance and deferred course fee income.

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

13. REvENuE

Group Company2012 2011 2012 2011

Rm’000 Rm’000 Rm’000 Rm’000Revenue comprises:

Course fees 145,173 240,661 – – Administration fees 1,091 2,997 – – Registration fees 756 2,196 – – Processing fees 432 607 – – other miscellaneous fees 1,372 3,710 – – Dividend income – – 65,753 49,532

148,824 250,171 65,753 49,532



14. RESulTS FROm OpERATING ACTIvITIES

Group Company2012 2011 2012 2011

Rm’000 Rm’000 Rm’000 Rm’000Results from operating activities is arrived at after charging:Auditors’ remuneration

- Audit fees- KPMG 230 210 60 45

- Non-audit fees- KPMG and local affiliates of KPMG 74 136 74 124

Impairment loss:- Trade receivables 6,166 6,173 – –

Depreciation of property, plant and equipment 25,212 22,745 – – Rental of office 1,899 1,942 – – Rental of hostels 23,813 33,617 – – Property, plant and equipment written off 5,247 4 – – Loss on disposal of property, plant and equipment 656 – – – Personnel expenses (including key management personnel):

- Contributions to Employees Provident Fund 5,749 5,807 111 65 - Wages, salaries and others 50,978 57,576 671 1,069

and after crediting:Gain on disposal of property, plant and equipment – 3 – –

15. KEy mANAGEmENT pERSONNEl COmpENSATION

The key management personnel compensations are as follows:

Group Company2012 2011 2012 2011

Rm’000 Rm’000 Rm’000 Rm’000Directors

- Fees - Current year 392 450 203 288 - Under provision in prior years – 308 – 288

- Remuneration 4,885 7,379 489 504 - Allowance 576 773 90 122

Other short term employee benefits (including estimated monetary value of benefits-in-kind) 32 84 – –

5,885 8,994 782 1,202



16. INTEREST ExpENSE

Group Company2012 2011 2012 2011

Rm’000 Rm’000 Rm’000 Rm’000

Interest expense of financial liabilities that are not at fair value through profit or loss:- loans 2,684 2,628 – – - revolving credit 424 221 – – - finance lease liabilities 381 605 – –

3,489 3,454 – –

Recognised in profit or loss 3,489 3,254 – – Capitalised on qualifying assets:

- property, plant and equipment – 200 – –

3,489 3,454 – –

17. TAx ExpENSE

Group Company2012 2011 2012 2011

Rm’000 Rm’000 Rm’000 Rm’000Recognised in profit or loss

Current tax expense- Current year 331 3,773 323 681- Under /(over) provision in prior years 80 3,175 13 (25)

411 6,948 336 656

Deferred tax expense- origination and reversal of temporary differences (6,589) 2,260 – – - over provision in prior years (1,077) (4,398) – –

(7,666) (2,138) – –

(7,255) 4,810 336 656



17. TAx ExpENSE (Cont’d)

Group Company2012 2011 2012 2011

Rm’000 Rm’000 Rm’000 Rm’000Reconciliation of tax expense

(Loss)/Profit before tax (35,447) 42,954 65,865 50,614

Income tax using Malaysian tax rate of 25% (2011: 25%) (8,862) 10,739 16,466 12,654Non-deductible expenses 922 1,425 308 410Tax incentives * 1,577 (6,190) – – Deferred tax asset not recognised 105 59 – – Tax exempt income – – (16,438) (12,383)

(6,258) 6,033 336 681over provision in prior years (997) (1,223) – (25)

(7,255) 4,810 336 656

* A subsidiary has been granted investment tax allowances which exempt 70% of its statutory income for a period of 10 years from 16 January 2006 to 16 January 2016.

18. OTHER COmpREHENSIvE INCOmE

Before taxTax (expense)/

benefit Net of taxGroup and Company Rm’000 Rm’000 Rm’0002012

Fair value of available-for-sale financial assets- Losses arising during the year (108) – (108)

2011Fair value of available-for-sale financial assets

- Gains arising during the year 7,156 – 7,156

19. (lOSS)/EARNINGS pER ORDINARy SHARE pER ORDINARy SHARE

Basic (loss)/earnings per ordinary share

The calculation of basic (loss)/earnings per ordinary share at 31 December 2012 was based on the (loss)/profit attributable to ordinary shareholders of RM(28,188,000) (2011: RM38,144,000) and the weighted average number of ordinary shares at 31 December 2012 of 409,906,000 (2011: 409,906,000) shares.



20. DIvIDENDS

Dividends recognised by the Company:

Sen per share Total Date of paymentRm’000

2012Second interim single tier 2011 ordinary 1.40 5,739 9 April 2012First interim single tier 2012 ordinary 14.64 60,010 3 July 2012

Total 65,749

2011Final single tier 2010 ordinary 7.90 32,383 15 June 2011First interim single tier 2011 ordinary 4.18 17,134 20 December 2011

Total 49,517

21. OpERATING SEGmENTS

The Group has two (2011: two) reportable segments, as described below, which are the Group’s strategic business units. The strategic business units offer different products and services, and are managed separately because they require different skill sets and marketing strategies.

For each of the strategic business unit, the Group’s Chief Executive Officer (the chief operating decision maker) reviews internal management reports on a regular basis. The following summary describes the operations in each of the Group’s reportable segment:

• University Colleges - the Group offers students a range of degree and diploma courses in nursing and allied health disciplines at post-secondary level.

• Colleges - the Group offers students a range of diploma courses in nursing and allied health disciplines at post-secondary level.

Information regarding the results of each reportable segment is included below.

operating results of the reportable segments are independently evaluated for performance measurement and resource allocation decisions. Segment performance is evaluated based on operating profit or loss which is similar to the accounting profit or loss as included in the internal management reports reviewed by the Group’s Chief Executive Officer.

The Group accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, which approximate market prices. These inter-segment transactions are eliminated on consolidation.

Segment revenue and expenses are the operating revenue and expenses reported in the Group’s consolidated statement of comprehensive income that are directly attributable to a reportable segment and the relevant portion of such revenue and expenses that can be allocated on a reasonable basis to the reportable segment.

Segment assets and liabilities: Segment assets include all operating assets used by a reportable segment and consist principally of operating receivables, property, plant and equipment, net of allowances and provisions. Segment liabilities include all operating liabilities and consist principally of accounts payable and accrued expenses.

Capital expenditure includes the total cost incurred to acquire property, plant and equipment, investment properties, and intangible assets directly attributable to the segment.



21. OpERATING SEGmENTS(Cont’d)

universitycolleges Colleges Total

Group Rm’000 Rm’000 Rm’0002012Segment (loss)/profit before tax (40,731) 5,715 (35,016)

Includedinthemeasureofsegment(loss)/profitare:Revenue from external customers 51,358 97,394 148,752Interest income 1,120 – 1,120Interest expense (2,329) (1,160) (3,489)Depreciation of property, plant and equipment (11,906) (13,306) (25,212)

Segment assets 269,739 193,033 462,772

Includedinthemeasureofsegmentassetsare:Additions to non-current assets other than financial instruments and deferred tax assets 25,883 533 26,416

Segment liabilities (226,762) (250) (227,012)

2011Segment (loss)/profit before tax (10,848) 53,064 42,216

Includedinthemeasureofsegment(loss)/profitare:

Revenue from external customers 93,681 156,459 250,140Interest income 1,717 – 1,717Interest expense (3,254) – (3,254)Depreciation of property, plant and equipment (10,909) (11,836) (22,745)

Segment assets 306,916 192,500 499,416

Includedinthemeasureofsegmentassetsare:Additions to non-current assets other than financial instruments and deferred tax assets 3,149 26,058 29,207

Segment liabilities (124,699) (317) (125,016)



21. OpERATING SEGmENTS (Cont’d)

Reconciliations of reportable segment profit or loss, revenue, assets, liabilities and other material items

Group2012 2011

Rm’000 Rm’000Profit or Loss

Total (loss)/profit for reportable segments (35,016) 42,216other non-reportable segments (1,771) (2,096)Interest income 1,339 2,834

Consolidated (loss)/profit before tax (35,448) 42,954

Revenue

Total revenue for reportable segments 148,752 250,140other non-reportable segments 72 31

Consolidated revenue 148,824 250,171

Interest income

Total interest income for reportable segments 1,120 1,717other non-reportable segments 1,339 2,834

Consolidated total interest income 2,459 4,551

Assets

Total assets for reportable segments 462,772 499,416other non-reportable segments 237,438 237,242Elimination of inter-segment (181,268) (94,848)

Consolidated total assets 518,942 641,810

liabilities

Total liabilities for reportable segments (227,012) (125,016) other non-reportable segments (1,688) (490) Elimination of inter-segment 132,163 –

Consolidated total liabilities (96,537) (125,506)



21. OpERATING SEGmENTS (Cont’d)

Geographical segments

The Group operates in seven main geographical cities in Malaysia, namely Cheras, Ipoh, Kota Kinabalu, Kota Bharu, Alor Setar, Kuching and Pasir Gudang.

Segment revenue is based on the city where the services are rendered and the location where the students are located.

Non-current assets are shown by geographical city in which the assets are located. Non-current assets consist of property, plant and equipment.

Cheras IpohKota

KinabaluKota

BharuAlor Setar Kuching

pasir Gudang Total

Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’0002012Total revenue from external

customers 50,497 24,320 42,462 17,329 – 13,284 860 148,752

Non-current assets 133,518 34,096 82,963 60,223 – 15,743 35,417 361,960

2011Total revenue from external

customers 92,970 43,911 67,695 30,504 – 14,349 711 250,140

Non-current assets 106,619 37,553 72,769 64,418 624 17,128 36,283 335,394



22. FINANCIAl INSTRumENTS

22.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

(a) Loans and receivables (“L&R”);(b) Available-for-sale financial assets (“AFS”); and(c) Financial liabilities measured at amortised cost (“FL”).

Carrying l&R/amount (Fl) AFS

31 December 2012 Rm’000 Rm’000 Rm’000Financial assetsGroupother investments 10,102 – 10,102Trade and other receivables 60,832 60,832 – Cash and cash equivalents 32,195 32,915 –

103,129 93,027 10,102

Companyother investments 10,102 – 10,102Amount due from subsidiaries 88,146 88,146 – Cash and cash equivalents 3,137 3,137 –

101,385 91,283 10,102

31 December 2012Financial liabilitiesGroupLoans and borrowings (68,265) (68,265) – Trade and other payables (28,268) (28,268) –

(96,533) (96,533) –

Company

Trade and other payables (345) (345) –



22. FINANCIAl INSTRumENTS (Cont’d)

22.1 Categories of financial instruments (Cont’d)


31 December 2011 Rm’000 Rm’000 Rm’000Financial assetsGroupother investments 10,210 – 10,210Trade and other receivables 121,405 121,405 – Cash and cash equivalents 110,586 110,586 –

242,201 231,991 10,210

Companyother investments 10,210 – 10,210Amount due from subsidiaries 14,907 14,907 – Trade and other receivables 54 54 – Cash and cash equivalents 88,907 88,907 –

114,078 103,868 10,210

31 December 2011Financial liabilitiesGroupLoans and borrowings (54,176) (54,176) – Trade and other payables (63,659) (63,659) –

(117,835) (117,835) –

CompanyTrade and other payables (5,124) (5,124) –




22.1 Categories of financial instruments (Cont’d)


1 January 2011 Rm’000 Rm’000 Rm’000Financial assetsGroupTrade and other receivables 141,244 141,244 – Cash and cash equivalents 144,897 144,897 –

286,141 286,141 –

CompanyTrade and other receivables 42 42 – Cash and cash equivalents 102,639 102,639 –

102,681 102,681 –

1 January 2011Financial liabilitiesGroupLoans and borrowings (45,488) (45,488) – Trade and other payables (75,420) (75,420) –

(120,908) (120,908) –

CompanyTrade and other payables (1,468) (1,468) –

22.2 Net gains and losses arising from financial instruments

Group Company 2012 2011 2012 2011

Rm’000 Rm’000 Rm’000 Rm’000Net (losses)/gains on:Loans and receivables (4,320) (1,622) 1,306 2,800Financial liabilities measured at amortised cost (3,489) (3,254) – –

(7,809) (4,876) 1,306 2,800

22.3 Financial risk management

The Group has exposure to the following risks from its use of financial instruments:

• Credit risk• Liquidity risk• Market risk




22.4 Credit risk

Credit risk is the risk of a financial loss to the Group if an educational sponsor, student or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from Perbadanan Tabung Pendidikan Tinggi Nasional (“PTPTN”), other educational sponsors and self-sponsored students.

Receivables

Risk management objectives, policies and processes for managing the risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Evaluations of students are performed by PTPTN or other educational sponsors before courses are offered to the students.

Exposure to credit risk and credit quality

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statements of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. Approximately 97% (31.12.2011: 94%; 1.1.2011: 96%) of trade receivables are due from PTPTN. Any receivables due from students who have quit, terminated, rejected and withdrawn from their courses are deemed to have higher credit risk and are monitored individually.

Impairment losses

The Group maintains an ageing in respect to trade receivables only. The ageing of receivables as at the end of the reporting period was:

Individual CollectiveGross impairment impairment Net

Group Rm’000 Rm’000 Rm’000 Rm’00031 December 20121 - 30 days 1,065 – – 1,06531 - 60 days 12,361 – – 12,36161 - 90 days 8,908 – – 8,90891 - 120 days 3,351 – – 3,351More than 120 days 50,139 (24,028) – 26,111

75,824 (24,028) – 51,796

31 December 20111 - 30 days 31,134 – – 31,13431 - 60 days 17,548 – – 17,54861 - 90 days 14,525 – – 14,52591 - 120 days 3,349 – – 3,349More than 120 days 56,650 (17,862) – 38,788

123,206 (17,862) – 105,344

1 January 20111 - 30 days 33,830 – – 33,83031 - 60 days 26,051 – – 26,05161 - 90 days 23,025 – – 23,02591 - 120 days 2,062 – – 2,062More than 120 days 53,216 (11,689) – 41,527

138,184 (11,689) – 126,495




22.4 Credit risk (Cont’d)

Impairment losses (Cont’d)

other receivables and deposits are neither due nor impaired. Therefore, these are stated at their realisable values.

The movements in allowance for impairment losses of receivables during the financial year were as follows:

Group2012 2011

Rm’000 Rm’000

At 1 January 17,862 11,689Impairment loss recognised 8,033 7,116Impairment loss reversed (1,867) (943)

At 31 December 24,028 17,862

The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group is satisfied that recovery of the amount is possible, the amount is considered irrecoverable and is written off against the receivable directly.

Inter company balances

Risk management objectives, policies and processes for managing the risk

The Company provides unsecured loans and advances to subsidiaries. The Company monitors the results of the subsidiaries regularly.

Exposure to credit risk and credit quality

As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.

Impairment losses

As at the end of the reporting period, there was no indication that the advances to the subsidiaries are not recoverable. The Company does not specifically monitor the ageing of the advances to the subsidiaries.




22.5 liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables and borrowings.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

Maturity analysis

The table below summarises the maturity profile of the Group’s financial liabilities as at the end of the reporting period based on undiscounted contractual payments:

Carrying Contractual Contractual under Within more thanamount interest rate cash flows 1 year 2 - 5 years 5 years

Group Rm’000 Rm’000 Rm’000 Rm’000 Rm’00031 December 2012Non-derivative financial liabilitiesTerm loan (Islamic) 53,008 5.0% - 5.7% 64,776 9,619 30,811 24,346Revolving credit (Islamic) 11,213 5.1% - 5.3% 11,231 11,231 – – Finance lease liabilities 4,044 2.2% - 4.5% 4,264 2,640 1,624 – Trade and other payables 28,268 – 28,268 28,268 – –

96,533 108,539 51,758 32,435 24,346


Group Rm’000 Rm’000 Rm’000 Rm’000 Rm’00031 December 2011Non-derivative financial liabilitiesTerm loan (Islamic) 43,319 4.7% - 5.4% 52,342 7,613 24,639 20,090Revolving credit (Islamic) 3,302 5.0% - 5.5% 3,437 2,267 1,170 – Finance lease liabilities 7,555 2.2% - 4.5% 8,191 3,448 4,743 – Trade and other payables 63,659 – 63,659 63,659 – –

117,835 127,629 76,987 30,552 20,090

1 January 2011Non-derivative financial liabilitiesTerm loan (Islamic) 29,615 4.8% - 4.9% 36,071 5,337 17,433 13,301Revolving credit (Islamic) 5,440 4.9% 5,746 2,340 3,406 –Finance lease liabilities 10,433 2.2% - 4.5% 11,674 3,228 8,446 – Trade and other payables 75,420 – 75,420 75,420 – –

120,908 128,911 86,325 29,285 13,301




22.5 liquidity risk (Cont’d) Maturity analysis (Cont’d)


Company Rm’000 Rm’000 Rm’000 Rm’000 Rm’00031 December 2012Non-derivative financial liabilitiesTrade and other payables 345 – 345 345 – –

31 December 2011Non-derivative financial liabilitiesTrade and other payables 5,124 – 5,124 5,124 – –

1 January 2011Non-derivative financial liabilitiesTrade and other payables 1,468 – 1,468 1,468 – –

The balances in the above table will not agree directly with the balances in the statements of financial position as the table incorporates, on an undiscounted basis, all cash flows relating to principal and future coupon payments.

22.6 market risk

Market risk is the risk that changes in market prices, such as interest rates and other prices will affect the Group’s financial position or cash flows.

22.7 Interest rate risk

The Group’s exposure to changes in interest rate relates primarily to interest-earning financial assets and interest-bearing financial liabilities. Interest rate risk is managed by the Group on an ongoing basis with the primary objective of limiting the extent to which net interest expense could be affected by adverse movements in interest rates.

Exposure to interest rate risk

The interest rate profile of the Group’s significant interest-earning and interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period was:

Group Company31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000Fixed rate instrumentsFinancial assetsDeposits placed with licensed bank 18,745 107,992 135,055 800 88,753 106,676

Financial liabilitiesFinance lease liabilities (4,044) (7,555) (10,433) – – –

14,701 100,437 124,622 800 88,753 106,676



22. FINANCIAl INSTRumENTS (CONT’D)

22.7 Interest rate risk (Cont’d)

Exposure to interest rate risk (Cont’d)

Group Company31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000 Rm’000 Rm’000 Rm’000Floating rate instrumentsFinancial liabilitiesTerm loan (Islamic) (53,008) (43,319) (29,615) – – – Revolving credit (Islamic) (11,213) (3,302) (5,440) – – –

(64,221) (46,621) (35,055) – – –

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points (bp) in interest rates at the end of the reporting period would have increased (decreased) equity and post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables remained constant.

Equity Profit or loss100 bp 100 bp 100 bp 100 bp

increase decrease increase decreaseRm’000 Rm’000 Rm’000 Rm’000

2012Floating rate instruments (482) 482 (482) 482

2011Floating rate instruments (350) 350 (350) 350

22.8 Fair value of financial instruments

The carrying amounts of cash and cash equivalents, trade and other receivables and trade and other payables approximate their fair values due to the relatively short term nature of these financial instruments.

It was not practicable to estimate the fair value of the Company’s investment in unquoted shares due to the lack of comparable quoted market prices and the inability to estimate fair value without incurring excessive costs.

The fair values of financial assets that are quoted in an active market are determined by reference to their quoted closing

bid price at the end of the reporting period.

In respect of the long-term borrowings with variable interest rates, the carrying amounts approximate fair values as they reprice to market interest rates for liabilities with similar risk profiles.




22.9 Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

level 1 level 2 level 3 TotalGroup and Company Rm’000 Rm’000 Rm’000 Rm’00031 December 2012Financial assetsInvestment in quoted shares 10,102 – – 10,102

31 December 2011Financial assetsInvestment in quoted shares 10,210 – – 10,210

1 January 2011Financial assetsInvestment in quoted shares – – – –

23. CApITAl mANAGEmENT

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitor and maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

During 2012, the Group’s strategy, which was unchanged from 2011, was to maintain the debt-to-equity ratio at a manageable level. The debt-to-equity ratios were as follows:

Group31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000

Total borrowings (Note 10) 68,265 54,176 45,488

Total equity 422,405 516,304 520,521

Debt-to-equity ratios 0.16 0.10 0.09

There were no changes in the Group’s approach to capital management during the financial year.



24. OpERATING lEASES

Leases as lessee

operating lease rentals are repayable as follows:

Group31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000

Less than one year 667 1,144 2,148Between one and five years 29 486 431

696 1,630 2,579

The Group leases computer equipment and advertisement board under operating leases. The leases run for a period of 1 to 3 years with an option to renew the lease after that date. Lease payments are increased every 3 years to reflect market rentals. None of the lease includes contingent rentals.

25. COmmITmENTS

Group31.12.2012 31.12.2011 1.1.2011

Rm’000 Rm’000 Rm’000Capital commitments:

Property, plant and equipmentContracted but not provided for 11,534 54,091 56,622

26. CONTINGENCIES

The Directors are of the opinion that provisions are not required in respect of the following matters, as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.

In October 2006, a subsidiary, Masterskill (M) Sdn. Bhd. (“Masterskill”) entered into a sale and purchase agreement (the “SPA”) with Kemacahaya Development Sdn. Bhd. (“KDSB”) and Syarikat Kemacahaya Sdn. Bhd. (“SKSB”), pursuant to which SKSB and KDSB agreed to sell six (6) property units at Jalan Kemacahaya 11, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor (the “Six Properties”) to Masterskill for RM2,000,000. The Six Properties are part of Masterskill’s current Cheras university college campus and KDSB and SKSB were the original developer and proprietor of the Six Properties.

Upon the advice of Masterskill’s lawyers, Masterskill withheld payment of the balance purchase price for the Six Properties under the SPA due to a dispute with KDSB and SKSB. In November 2006, after Masterskill had lodged a caveat over the Six Properties, KDSB sought to terminate the SPA and repossess the Six Properties. They subsequently entered into a sale and purchase agreement to sell the Six Properties to Pasupathy a/l Kanagasaby (“K. Pasupathy”), who then sought possession of the Six Properties.

At the same time, two individuals, Chin Yam Meng (“CYM”) and Leng Kok Onn (“LKO”), attempted to enter the premises of the Masterskill’s Cheras university college campus, claiming to be the lawful owners of the Six Properties due to arrangements that they had made with Megatalent Sdn. Bhd. (“Megatalent”) in 2004, pursuant to which Megatalent had purportedly assigned its rights to the Six Properties to CYM and LKO. By way of background, prior to the execution of the SPA, Megatalent had been KDSB’s and SKSB’s marketing agent for a number of properties, including the Six Properties. In connection with this marketing relationship and to facilitate the marketing of these properties, KDSB and SKSB had assigned or sold the properties, including the Six Properties, to Megatalent. However, the agreements pursuant to which these properties were assigned or sold to Megatalent were subsequently rescinded and the caveats which CYM and LKO had lodged over the Six Properties were removed in July 2006 prior to Masterskill entering the SPA.



26. CONTINGENCIES (Cont’d)

In January 2007, Masterskill filed an application to the Kuala Lumpur High Court against KDSB, SKSB, K. Pasupathy, CYM and LKO seeking, among other things, a declaration that the SPA is still valid and subsisting, an interlocutory injunction to restrain KDSB and SKSB from terminating the SPA, and an injunction against CYM and LKO from entering the premises of Masterskill’s Cheras university college campus.

With respect to the proceedings against CYM and LKO, on 6 August 2008, Masterskill withdrew the injunction application against them upon receipt of an undertaking by them not to enter the premises of Masterskill’s Cheras university college campus until the resolution of the proceedings.

After the commencement of proceedings, Masterskill engaged in out of court discussions with KDSB and SKSB and in May 2008, KDSB, SKSB and Masterskill agreed to settle the claims. Pursuant to Masterskill’s settlement agreement, Masterskill would pay RM2,800,000 for the Six Properties. The sale under this settlement agreement is currently pending completion and Masterskill is expected to become the registered owner of the title to the Six Properties sometime in 2013. With respect to Masterskill’s proceedings against KDSB and SKSB, consent judgement was recorded on 14 July 2009 wherein KDSB and SKSB confirmed that Masterskill was the beneficial and legal owner of the Six Properties.

In August 2009, K. Pasupathy filed an application to set aside the aforesaid consent judgement. His application was dismissed with costs in February 2011.

With respect to the proceedings against K. Pasupathy, after Masterskill filed the original application, K. Pasupathy filed a counter-claim against Masterskill seeking vacant possession of the Six Properties. On 25 June 2008, Masterskill filed an application to strike out this counter-claim, which was rejected by the High Court in May 2009. At the same time, the High Court allowed an application made by K. Pasupathy to strike out Masterskill’s reply to K. Pasupathy’s defence. Masterskill have since appealed against both of these decisions.

The High Court has on 13 September 2010 dismissed Masterskill’s application to set aside K. Pasupathy’s Judgement in Default dated 13 May 2009 with costs of RM5,000. The Court of Appeal had on 13 August 2009 stayed the effects of the Order which was obtained by K. Pasupathy to strike out Masterskill’s defence. The Court of Appeal’s decision is still in effect.

The Court of Appeal fixed this matter for hearing of the intervener’s appeal on 21 June 2013 and further Case Management on 27 June 2013. The matter is further fixed for Case Management on 23 June 2013 pending the outcome of all the Appeals at the Court of Appeal.

27. RElATED pARTIES

Identity of related parties

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

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. Key management personnel includes all the Directors of the Group, and certain members of senior management of the Group.

The Group has related party relationships with its significant investors, subsidiaries and key management personnel.



27. RElATED pARTIES (Cont’d)

Significant related party transactions

The significant related party transactions of the Group and of the Company, other than key management personnel compensation (see Note 15), are shown below. The balances related to the below transactions are shown in Note 12.

Group Company2012 2011 2012 2011

Rm’000 Rm’000 Rm’000 Rm’000DirectorRental expense for premises 336 336 – –



28. SupplEmENTARy INFORmATION ON THE BREAKDOWN OF REAlISED AND uNREAlISED pROFITS OR lOSSES

The breakdown of the retained earnings of the Group and of the Company as at 31 December, into realised and unrealised profits, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as follows:

Group Company2012 2011 2012 2011

Rm’000 Rm’000 Rm’000 Rm’000Total retained earnings of the Company and its subsidiaries- realised 211,715 297,996 2,044 2,264- unrealised – 7,666 – – Less: Consolidation adjustment (22,695) (22,720) – –

Total retained earnings 189,020 282,942 2,044 2,264

The determination of realised and unrealised profits is based on the Guidance of Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.



In the opinion of the Directors, the financial statements set out on pages 60 to 107 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia and so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2012 and of their financial performance and cash flows for the year then ended.

In the opinion of the Directors, the information set out in Note 28 on page 107 to the financial statements have been compiled in accordance with the Guidance of Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants.

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

…………………………………………………………yTm Tunku Dato’ Seri Kamel Bin Tunku Rijaludin

…………………………………………………………Siva Kumar a/l m Jeyapalan

Kuala Lumpur,

Date: 26 April 2013

STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

I, Chik Chan Chee, the Officer primarily responsible for the financial management of Masterskill Education Group Berhad, do solemnly and sincerely declare that the financial statements set out on pages 60 to 108 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed in Kuala Lumpur on 26 April 2013.

……………………………………………….Chik Chan Chee

Before me:

STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965


REpORT ON THE FINANCIAl STATEmENTS

We have audited the financial statements of Masterskill Education Group Berhad, which comprise the statements of financial position as at 31 December 2012 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 60 to 107.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 December 2012 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

REpORT ON OTHER lEGAl AND REGulATORy REquIREmENTS

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

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

c) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF MASTERSKILL EDUCATION GROUP BERHAD


OTHER REpORTING RESpONSIBIlITIES

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set out in Note 28 on page 108 to the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance of Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

OTHER mATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KpmG Abdullah Abu SamahFirm Number: AF 0758 Approval Number: 2013/06/14(J)Chartered Accountants Chartered Accountant

Petaling Jaya,

26 April 2013

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF MASTERSKILL EDUCATION GROUP BERHAD (CONT’D)


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBy GIvEN THAT the Sixth Annual General Meeting of Masterskill Education Group Berhad (746920-M) (“the Company”) will be held at The Auditorium, Ground Floor, G-8, Jalan Kemacahaya 11, Taman Kemacahaya, Batu 9, 43200 Cheras, Selangor Darul Ehsan on Wednesday, 12 June 2013 at 10.00 a.m. for the following purposes:-

AS ORDINARy BuSINESS

1. To receive and consider the Audited Financial Statements together with the Reports of the Directors and Auditors thereon for the financial year ended 31 December 2012. (Resolution 1)

2. To approve Directors’ Fees of RM203,000.00 for the financial year ended 31 December 2012. (Resolution 2)

3. To re-elect the following Directors who retire pursuant to Article 129 of the Company’s Articles of Association:

a) Mr. Richard Todd Scanlon; and (Resolution 3)

b) Y. Bhg. Datuk Kamarudin Bin Md. Ali. (Resolution 4)

4. To re-elect the following Directors who retire pursuant to Article 134 of the Company’s Articles of Association:

a) Mathuraiveran a/l Marimuthu; and (Resolution 5)

b) Siva Kumar a/l M Jeyapalan. (Resolution 6)

5. To re-appoint Messrs KPMG as Auditors of the Company and to authorise the Directors to fix their remuneration. (Resolution 7)

AS SpECIAl BuSINESSTo consider and if thought fit, to pass, with or without modifications, the following Resolutions:

6. ORDINARy RESOluTION AuTHORITy TO AllOT SHARES puRSuANT TO SECTION 132D OF THE COmpANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965 and subject to the approval of relevant authorities, the Directors be and are hereby empowered to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being and that the Directors be and also empowered to obtain approval for the listing of and quotation for the additional shares so issued on the Main Market of Bursa Malaysia Securities Berhad AND THAT such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.” (Resolution 8)


NOTICE OF ANNUAL GENERAL MEETING (CONT”D)

7. ORDINARy RESOluTION pROpOSED RENEWAl OF SHARE Buy-BACK AuTHORITy (“pROpOSED SHARE Buy-BACK”)

“THAT subject always to the Companies Act, 1965 (“Act”), the provisions of the Memorandum and Articles of Association of the Company, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Company be and is hereby authorised to purchase such amount of ordinary shares of RM0.20 each in the Company (“Shares”) as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the best interest of the Company provided that:-

(i) The aggregate number of Shares purchased does not exceed ten percent (10%) of the total issued and paid-up share capital of the Company at any point of time;

(ii) The maximum amount of funds to be allocated by the Company for the purpose of purchasing the Shares shall be backed by an equivalent amount of retained profits and/or share premium of the Company; and

(iii) The Directors of the Company be and are hereby authorised to decide at their discretion either to retain the Shares purchased as treasury shares or cancel the Shares or retain part of the Shares so purchased as treasury shares and cancel the remainder or to resell the Shares or distribute the Shares as dividends.

AND THAT the authority conferred by this resolution shall commence upon the passing of this resolution and will continue to be in force until:-

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time the authority shall lapse, unless by ordinary resolution passed at that meeting, the authority is renewed either unconditionally or subject to conditions; or

(ii) the expiration of the period within which the next AGM after the date it is required by law to be held; or

(iii) revoked or varied by ordinary resolution passed by shareholders of the Company at a general meeting of the Company,

whichever occurs first but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date.

AND THAT the Directors be and are hereby empowered to do all acts and things (including the opening and maintaining of a central depositories account(s) under the Securities Industry (Central Depositories) Act, 1991 and to take all such steps and to enter into and execute all commitments, transactions, deeds, agreements, arrangements, undertakings, indemnities, transfers, assignments and/or guarantees as they may deem fit, necessary, expedient and/or appropriate in the best interest of the Company in order to implement, finalise and give full effect to the Proposed Share Buy-Back with full powers to assent to any conditions, modifications, variations (if any) as may be imposed by the relevant authorities.” (Resolution 9)

OTHER ORDINARy BuSINESS

8. To transact any other business of which due notice shall have been given.

By order of the Board

JASmINDAR KAuR A/p SARBAN SINGH (mAICSA 7002687)Company SecretarySelangor Darul Ehsan20 May 2013


NOTICE OF ANNUAL GENERAL MEETING (CONT”D)

Notes on Appointment of proxy

a. A member must be registered in the Record of Depositors at 5.00 p.m. on 5 June 2013 (“General Meeting Record of Depositors”) in order to attend and vote at the Meeting. A depositor shall not be regarded as a Member entitled to attend the Meeting and to speak and vote thereat unless his name appears in the General Meeting Record of Depositors. Any changes in the entries on the Record of Depositors after the abovementioned date and time shall be disregarded in determining the rights of any person to attend and vote at the Meeting.

b. A member entitled to attend and vote is entitled to appoint up to two (2) proxies (or in the case of a corporation, to appoint a representative), to attend and vote in his stead. There shall be no restriction as to the qualification of the proxy(ies).

c. The Proxy Form in the case of an individual shall be signed by the appointor or his attorney, and in the case of a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

d. Where a member appoints two proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.

e. Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

f. The Proxy Form or other instruments of appointment shall not be treated as valid unless deposited at the Registered Office of the Company at B-13-15, Level 13, Menara Prima Tower B, Jalan PJU 1/39, Dataran Prima, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding the meeting. Faxed copies of the duly executed form of proxy are not acceptable.

Explanatory Note on Special Business:

1. Authority to allot shares pursuant to Section 132D of the Companies Act, 1965 (Resolution 8)

Ordinary Resolution 8 has been proposed for the purpose of obtaining a new general mandate for issuance of shares by the Company under Section 132D of the Companies Act, 1965 (hereinafter referred to as the “General Mandate”). Ordinary Resolution 8, if passed, will give the Directors of the Company authority to issue ordinary shares in the Company at their discretion without having to first convene another General Meeting. The General Mandate will, unless revoked or varied by the Company in a General Meeting, expire at the conclusion of the next Annual General Meeting or the expiration of the period within which the next Annual General Meeting is required by law to be held, whichever is earlier.

The General Mandate, if granted, will provide flexibility to the Company for any future fund raising activities, including but not limited to further placing of shares for the purposes of funding future investment project(s), repayment of bank borrowing, working capital and/or acquisition(s) and thereby reducing administrative time and costs associated with the convening of additional shareholders meeting(s).

2. proposed renewal of Share Buy-Back authority (Resolution 9)

For proposed Ordinary Resolution 9, further information on the proposed renewal of Share Buy-Back authority is set out in the Statement to Shareholders in relation to the Proposed Renewal of Share Buy-Back Authority dated 20 May 2013 which is circulated together with the Company’s Annual Report 2012.

mASTERSKIll EDuCATION GROup BERHAD(Company No.: 746920-M)

Incorporated in Malaysia

FORm OF pROxy

I/We ____________________________________________________ NRIC / Passport/ Co No.: ___________________________ (FULL NAME IN BLOCK LETTERS) (COMPULSORY)of ______________________________________________________________________________________________________ (ADDRESS)being a Member(s) of mASTERSKIll EDuCATION GROup BERHAD (“the Company”) hereby appoint __________________________________________________________________________ NRIC / Passport No.: ______________________________ (FULL NAME IN BLOCK LETTERS) (COMPULSORY)of _____________________________________________________________________________________________________ (ADDRESS)and/or _____________________________________________________ NRIC / Passport No.: __________________________ (FULL NAME IN BLOCK LETTERS) (COMPULSORY)of ___________________________________ _________________________________________________ or *THE CHAIRMAN (ADDRESS)OF THE MEETING as my / our proxy(ies) to vote for me / us on my / our behalf at the Sixth Annual General Meeting of the Company to be held on Wednesday, 12 June 2013 at 10.00 a.m. and at any adjournment thereof.

My / our proxy / proxies is / are to vote as indicated below:

Resolutions Description FOR AGAINSTOrdinaryNo. 1

Ordinary BusinessReceive the Audited Financial Statements and Reports

No. 2 Approval of Directors’ FeesNo. 3 Re-election of Richard Todd ScanlonNo. 4 Re-election of Y. Bhg. Datuk Kamarudin Bin Md. AliNo. 5 Re-election of Mathuraiveran a/l MarimuthuNo. 6 Re-election of Siva Kumar a/l M JeyapalanNo. 7 Re-appointment of Auditors

No. 8Special BusinessAuthority to allot shares pursuant to Section 132D of the Companies Act, 1965

No. 9 Proposed renewal of Share Buy-Back authority

(Please indicate with an “X” in the spaces provided how you wish your votes to be cast. If you do not do so, the proxy will vote or abstain from voting as he thinks fit)

No. of shares held:

CDS Account No.:

The proportion of my/our holding to be represented by my/our proxies are as follows:

First Proxy : __________%Second Proxy : __________%

Date: _______________________________Signature of Shareholder/Common Seal

*To delete, whichever not applicable

Notes to Form of proxya. A member must be registered in the Record of Depositors at 5.00 p.m. on 5 June 2013 (“General Meeting Record of Depositors”) in order to attend and vote at the

Meeting. A depositor shall not be regarded as a Member entitled to attend the Meeting and to speak and vote thereat unless his name appears in the General Meeting Record of Depositors. Any changes in the entries on the Record of Depositors after the abovementioned date and time shall be disregarded in determining the rights of any person to attend and vote at the Meeting.

b. A member entitled to attend and vote is entitled to appoint up to two (2) proxies (or in the case of a corporation, to appoint a representative), to attend and vote in his stead. There shall be no restriction as to the qualification of the proxy(ies).

c. The Proxy Form in the case of an individual shall be signed by the appointor or his attorney, and in the case of a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

d. Where a member appoints two proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.e. Main Market Listing Requirements of Bursa Malaysia Securities Berhad permit that where a Member of the Company is an exempt authorised nominee which holds

ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

f. The Proxy Form or other instruments of appointment shall not be treated as valid unless deposited at the Registered Office of the Company at B-13-15, Level 13, Menara Prima Tower B, Jalan PJU 1/39, Dataran Prima, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding the meeting. Faxed copies of the duly executed form of proxy are not acceptable.


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The Company SecretarymASTERSKIll EDuCATION GROup BERHADB-13-15, Level 13Menara Prima Tower BJalan PJU 1/39, Dataran Prima47301 Petaling JayaSelangor Darul Ehsan

AFFIXSTAMP

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ANNUAL REPORT 2012

EMBARKING ON NEW HORIZONS

MA

STER

SKILL ED

UC

ATIO

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P BERH

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Annual R

eport 2012

MASTERSKILL EDUCATION GROUP BERHAD(Company Number: 746920-M)

MAIN CAMPUS - CHERAS SELANGORG-8, Jalan Kemacahaya 11, Taman Kemacahaya,Batu 9, 43200 Cheras, Selangor Darul Ehsan, Malaysia.Tel: 603-9080 5888 Fax: 603-9080 1995E-mail: [email protected]

MEGB-AnnualReport2012

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