2015 was a difficult year for the Group. While the Group had positioned itself successfully as a leading education and training organisation in the previous three years, the external environment during 2015 was hugely challenging. The decline of global oil prices and the slowdown in the Gulf Cooperation Countries, Middle East dampened market conditions. The Malaysian market for our services also experienced a slowdown.
The Group continued with the goal of powering business results through technology driven integrated HRD solutions in a focused way. Tertiary Education was the growth driver for the Group. The growth of Cyberjaya University College of Medical Sciences (“CUCMS”) is reflected by its quality education, high quality academics and corporate governance.
While the demand for HR Professional Services: Consulting and Conferences slowed down due to the external environment and the software business experienced a downturn because of changes in the technology front, the budget allocations for education continue to be substantial.
Despite all the recent cuts due to the fall in oil prices, the Government’s commitment to education remains as the driver and platform for the nation’s growth. The medium to long term business outlook continues to be favourable towards education and training as human capital is the key driver to achieve the economic goals of the nation. The release of the Malaysian Education blueprint provides clarity on developing the relevant shifts for success. Relevant and employable human capital is key for the country. While the Board is confident on the future of the Group and remains committed to grow in a consistent and sustainable manner, the Board is also aware of the obstacles due to the global economic outlook.
The SMRT Group holds a 23% equity investment in Asiamet Education Group Berhad (“AEGB”) which operates the Asia Metropolitan University (AMU) has taken much longer than the anticipated 12 months turnaround. While the Management continues to ensure good corporate governance, academic excellence, prudent financial and student enrolment strategies, it is now apparent that the turnaround is expected to take much longer than the anticipated 12 months.
While we anticipated better results for the financial year ended 2015 (“FY15”), the results were impacted by several one off expenses incurred due to corporate exercises and impairment of investments in associate company, AEGB. For FY15, The Group’s reported a lower revenue of RM100.3 million in year 2015 as compared to the previous financial year of RM121.9 million.
In the global market place, education and related areas in learning provide a strong impetus for growth. The strategic focus on the learning space has supported the Group’s goal to grow in a sustainable manner. Despite the economic challenges, countries have continued to invest heavily in developing the education sector.
With the growing demand for our solutions, barring any unforeseen circumstances, the Group expects to perform better than 2015. The ASEAN region, and Malaysia in particular, have the advantage of a favourable demographic where its young population will drive demand for education and skills training.
The Malaysian Education Blueprint identified 11 shifts to improve the quality of Malaysian education whereas, the Higher Education Blueprint outlined the strategies for the next 10 years. 10 shifts were identified to transform the higher education system. With the move towards enabling graduates to become job creators from being job seekers, the potential for the Education and Training sector is huge.
The outlook for human capital development and related technologies continues to be promising given the focus of the Government in supporting organisations such as Talent Corp, Human Resources Development Fund and Small and Medium Industries Development Corporation.
The Group has embarked upon a policy of focussing only on needs based R & D. The Group’s software solutions are listed on page 5.
The systems of risk management and internal control as well as corporate governance best practice play a crucial role in the preservation of the shareholders wealth and assets followed by sustained growth.
The Group continued to gain ISO 9001:2008 Quality Management System (QMS) with SIRIM to ensure quality processes and systems. CUCMS attained the ISO 9001:2008 QMS status with SIRIM besides the SETARA Ties 5 (Excellent), the highest rating and D-SETARA (Discipline – Based Rating System) rating of 4. The system measures the quality of teaching and learning. The Group will continue to ensure adequate emphasis and resources to enhance the systems of risk management, quality management and internal controls. Various implementations of internal control systems had taken during the recent past years, to ensure the risk factor in the day to day operations are well managed in guiding us to achieve our goals. The Board has also adopted various recommendations of the revised Malaysia Code of Corporate Governance 2012.
On behalf of the Board, I would like to thank: