Review of operations
24
There were no significant changes to the operations of the business in the year under review.
As in the previous year, Stamford College Petaling Jaya, Regent School of Economics and
Stamford College Malacca were the three centres that performed well in the Group. Stamford
College Ampang showed some improvement over the previous year. There were also no
changes in the range of courses offered or any indication in the market of any change in the
nature of the demand for tertiary level courses. Partner universities and institutions also
remained the same for most part of the year except that the University of Northumbria
indicated that they are planning to relocate their activities to another country (see below).
Government policies established in 2002, especially those introducing more liberal criteria for
admission to local universities and the increase of STPM classes in Government schools
continued to impact on the patterns of admission into private colleges. There was also growing
competition for SPM students from local private universities that enrol such students into their
degree programmes through diploma and foundation courses. Lembaga Akreditasi Negara
(LAN) regulations tightening admission qualifications to degree programmes also had an
impact on the admission of students into degree programmes. At the same time however, the
availability of government loans through the Perbadanan Tabung Pendidikan Tinggi Nasional
(PTPTN) gave an important source of funds to students from poorer backgrounds to pursue
university courses. The year under review saw an increase in the number of students
registering with the college with government loans from PTPTN. The loans are available for
all Diploma and Degree courses that have Ministry of Education approval. The PTPTN loan
fund is seen as a significant source of funds for the private sector, especially because of the
arrival of colleges that are able to subsidise fees through recourse to community supported
funds.
Private colleges across the
country were invited to
participate in the second
Unemployed Graduates'
Training Scheme that was
organised by the Pembangunan
Sumber Manusia Berhad (PSMB)
in early 2003. The Scheme, first
introduced in 2002, was aimed at
equipping unemployed
graduates with effective
employable skills. PSMB
identified English language, IT,
Accounting and Business
Datuk Dr. Fong Chan Onn with Stamford GTS students.
Development as the areas of
training that would benefit the unemployed graduates most. Malaysian graduates from both
local and foreign universities were eligible to apply. GTS II, as it was known, included training
programmes in IT, Business, Accounting and English. Unemployed graduates who satisfied
the criteria stipulated by PSMB were paid a monthly allowance of RM500 for attending the
courses. In exchange they had to commit to attending the course regularly from 8.00am to
4.00pm, 5 days a week, for up to 6 months in some courses. The cost of teaching the
programmes was funded by a special allocation from government. The Stamford College
Group bid for and secured several classes under the Scheme. Classes in English and Business
were run at Stamford College PJ, Stamford College Sabah, Regent School of Economics and
Stamford College Kuching.
Review of operations (cont'd)
25
The participation in the GTS II project had more advantages than just the opportunity for
additional revenue. Teaching the course provided valuable insights into the needs of graduates that
could be useful in structuring extra-curricular programmes
for full-time students at Stamford. A recognition of some of
these needs in graduates registering for GTS II enabled
Stamford to add special activities and projects over and
above that officially prescribed in the programme by PSMB.
In Stamford College Sabah, which secured the largest
number of students for the Scheme within the Group,
students participated in several community projects including
Stamford College Sabah GTS
trips to remote villages where they distributed books and
students do community service.
gave English lessons to village children.
Demand for tertiary level courses
The chase for a degree is now the main driving force of students entering private higher education
colleges. Even students registering for diploma courses do not as a general rule plan to stop their
studies at the end of the course but look to continue their studies to the degree level. Whilst this
drive is in tandem with government plans to increase the number of graduates in the workforce,
colleges have to ensure that the high output of graduates does not in any way dilute learning
outcomes. Stamford's quality processes constantly address this issue to find ways to ensure that
those in pursuit of a degree have a worthy education to support their qualification.
The disciplines most sought after in Stamford are Business, Accounting and Computer Science.
This reflects trends in other private and public institutions. Courses in these areas of study leading
to degrees continue to be the leading revenue earners for the Group. In October 2003, the
University of Northumbria, Stamford's partner university in business and engineering programmes,
indicated that it would phase out its courses in Stamford College but allowing enough time for all
students in the course to complete their programmes. In the light of this decision new partner
universities will be found to offer business, engineering and other courses from 2004.
Stamford College Petaling Jaya was the best performing centre. Stamford College Malacca
maintained a steady position although the profits were down from the previous year.
Graduation 2003
Dato' Hishammuddin Tun Hussein
presenting awards to Stamford students.
Stamford USM graduation
at Universiti Sains Malaysia.
The Stamford College graduation
ceremony for 2003 was held on 4
October 2003 when nearly 2000
students received their awards. Dato'
Hishammuddin Tun Hussein, the
guest of honour at the ceremony,
gave out the awards. Separate
convocation ceremonies were held
by Universiti Sains Malaysia and
Convocation of the Northmbria University.
University of Northumbria at earlier
dates for Stamford students graduating with qualifications from those universities.
Review of operations (cont'd)
26
Quality Education
The Stamford Centre for Academic Excellence which is responsible for implementing and
measuring quality in the college, carried out a major survey of all the quality processes in the
delivery of education, which covered among other matters the observation of teachers in the
classrooms, the examination process and the maintenance of student records. Programmes to
enhance student learning were introduced into all colleges.
Still on the issue of quality, Stamford College extended the scope of quality certification in two
respects. Firstly, the College moved towards the extension of the scope of Quality Services to the
provision of student services at Stamford College Petaling Jaya. This aspect of the certification
process ensures that colleges provide services to students that meet international criteria set under
the ISO standards. The second phase of the process involved the upgrading of the entire ISO
quality processes at Stamford College Berhad from the 1994 standards, which the college obtained
in 2001, to the 2000 standards. This reflects the objectives of the International Certification Body
itself. The main objective in the 2000 standards is to demonstrate greater emphasis on customer
needs reflecting continual improvement. The decision to move in this direction was part of the
general decision to use quality education as a means to develop the colleges' role as educational
providers.
Stamford College was awarded the BS EN ISO
9001:2000 Certification for the 'Provision of
Education Management Services and Support'
and 'Provision of Student Support and Services'.
Thus Stamford College Berhad is now certified
on the ISO 2000 standards. At the same time
Stamford College Petaling Jaya has become an
ISO Certified Centre. The certification was
awarded by the Independent European
Certification Limited (IEC) UK.
Stamford College receives the
BS EN ISO 9001:2000 Certification.
Rights Issue
The corporate highlight of the year was the offer to shareholders of securities in the company to,
inter alia, increase the authorised capital of Stamford College Berhad from RM50,000,000 to
RM100,000,000. One of the objects of the exercise, details of which have been publicised to
shareholders at an earlier date, is to increase the issued share capital of the company to
RM40,000,000 in line with existing Bursa Malaysia Listing Requirements.
The Rights Issue was extremely successful taking into consideration all the economic factors that
affect such an exercise. The total acceptances and excess share applications received for the Rights
Issue amounted to 22,108,832 Rights Shares. This represents an over-subscription of 6,108,832
Rights Shares or 38.18% over the 16,000,000 shares that were available for subscription under the
Rights Issue.
Audit committee report
27
COMPOSITION
The Audit Committee currently comprises the following directors:Chairman
Dato' Meor Chek Hussien bin Mahayuddin (Independent Non-Executive Director) ^
(Elected as Chairman on 29 July 2003)
^
Foo Peng Sang @ Woo Kau (Independent Non-Executive Director) #
(Resigned on 22 June 2003)
#
Members
Lim Ah Chong (Executive Director)
Yang Chaw Nam (Independent Non-Executive Director) *
*
(Appointed on 21 November 2003)
George Leong Chee Fook (Independent Non-Executive Director) **
**
(Resigned on 21 November 2003)
TERMS OF REFERENCE
Policy
The policy of the Audit Committee is to ensure that internal and external audit functions are
properly conducted and that audit recommendations are being carried out effectively.
Objectives
The objectives of this policy are to comply with Chapter 15 of the Listing Requirements of
the Bursa Malaysia Securities Berhad and to relieve the full Board of Directors from
detailed involvement in the review of the results of internal and external audit activities and
yet ensure that audit findings are brought to the highest level for consideration.
Membership
1. The Audit Committee shall be appointed by the Board from amongst the directors of the
Company which fulfils the following requirements:!
!
!
!
!
(a) the Committee must be composed of no fewer than 3 members;
(b) a majority of the Committee must be independent directors; and
(c) at least one member of the Committee:(i) must 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 3 years' working experience and:(aa) he must have passed the examinations specified in Part 1 of the 1 st
Schedule of the Accountants Act 1967; or
(bb) he must be a member of one of the associations specified in Part II of
the 1st Schedule of the Accountants Act 1967.
2. No alternate director shall be appointed as a member of the Committee.
3. The members of the Committee shall elect a Chairman from among their numbers who
shall be an independent director.
4. In the event of any vacancy in the Committee resulting in the non-compliance of the
Listing Requirements of the Exchange pertaining to composition of Audit Committee,
the Board of Directors shall within three months of that event fill the vacancy.
5. The Board shall review the term of office of Committee members no less than once
every three years.
Audit committee report (cont'd)
28
Authority
The Committee is authorised by the Board, in accordance with the procedures to be
determined by the Board (if any) and at the cost of the Company, to:(a)
investigate any activity within the Committee's terms of reference;
(b)
have resources which are reasonably required to enable it to perform its duties;
(c)
have full and unrestricted access to any information pertaining to the Company or the
Group;
(d)
have direct communication channels with the external auditors and person(s) carrying
out the internal audit function or activity (if any);
(e)
obtain outside legal or other independent professional advice and secure the
attendance of outsiders with relevant experience and expertise if it considers this
necessary;
(f)
convene meetings with the external auditors, excluding the attendance of the executive
members of the committee, whenever deemed necessary.
Functions
The functions of the Audit Committee shall be:(a)
To review:(aa) the quarterly results and year end financial statements, before submission to the
Board, focusing particularly on:(i)
any changes in accounting policies and practices;
(ii) significant adjustments arising from the audit;
(iii) the going concern assumption; and
(iv) compliance with accounting standards and other legal requirements.
(bb) any related party transaction and conflict of interest situations that may arise
within the Company or the Group including any transaction, procedure or course
of conduct that raises questions of management integrity.
(cc) with external auditor:(i)
the audit plan;
(ii) his evaluation of the system of internal controls;
(iii) his audit report;
(iv) his management letter and management's response; and
(V) the assistance given by the Company's employees to the external auditor.
(b)
In respect of the appointment of external auditor:(i) To review whether there is reason to believe that the external auditor is not
suitable for re-appointment;
(ii) To consider the nomination of a person or persons as external auditors an
the audit fee; and
(iii) to consider any questions of resignation or dismissal of external auditor.
(c)
In respect of the internal audit function:(i) to review the adequacy of the scope, functions and resources of internal
audit function, and that it has the necessary authority to carry out its work;
(ii) to review the internal audit programme and results of the internal audit
process and where necessary to ensure that appropriate action is taken on
the recommendations of the internal audit function;
(iii) to review any appraisal or assessment of the performance of members of
the internal audit function;
(iv) to approve any appointment or termination of senior staff members of the
internal audit function; and
Audit committee report (cont'd)
29
!
!
(v)
to inform of any resignation of internal audit staff member and provide the
resigning staff member an opportunity to submit his reasons for resigning;
(d)
To carry out such other functions as may be agreed to by the Audit Committee and the
Board of Directors.
Overseeing the Internal Audit Function
(a)
The Committee shall oversee all internal audit functions and is authorised to
commission investigations to be conducted by internal audit as it deems fit.
(b)
The internal auditor shall report directly to the Committee and shall have direct access
to the Chairman of the Committee.
(c)
All proposals by management regarding the appointment, transfer or dismissal of the
internal auditor shall require the prior approval of the Committee.
Quorum for Meetings
A quorum shall consist of a majority of independent directors.
Attendance at Meetings
The Head of Finance, the Head of Internal Audit, and a representative of the External Auditors
shall normally attend meetings. Other Board members and employees may attend any
particular meeting only at the Committee's invitation, specific to the relevant meeting.
However, at least once a year the Committee shall meet with the External Auditors without
executive Board members present.
Frequency of Meetings
The Chairman shall call for meetings, to be held not less than four times a year. The External
Auditors may a request a meeting if they consider one necessary.
Reporting Procedures
1) The Company Secretary shall be the Secretary of the Committee. He shall record
attendance of all members and invitees and take minutes to record the proceedings of
every meeting of the Committee. All minutes of meetings shall be circulated to every
member of the Board.
2) The Committee shall prepare an annual report to the Board that provides a summary of
the activities of the Committee for inclusion in the Company's annual report.
3) The Committee may report any breaches of the Listing Requirements, which have not
been satisfactorily resolved, to the Bursa Malaysia Securities Berhad.
Audit Committee Meetings
The Audit Committee met seven times during the financial year ended 31 December 2003.
The details of Audit Committee's meetings held and attended by the Committee during the
financial year are as follows:-
Audit committee report (cont'd)
30
No. of Audit Committee Meetings
Audit Committee Member
Held
Attended
Chairman
Dato' Meor Chek Hussien bin Mahayuddin
#
4
4
#
4
4
7
7
#
2
2
#
5
4
(Elected as Chairman on 29 July 2003)
Foo Peng Sang @ Woo Kau
(Resigned on 22 June 2003)
Members
Lim Ah Chong
Yang Chaw Nam
(Appointed on 21 November 2003)
George Leong Chee Fook
(Resigned on 21 November 2003)
#
reflect the number of meetings held during the time member held office.
Summary of activities of the audit committee during the financial year ended 31
December 2003
During the financial year ended 31 December 2003, the activities of the Audit Committee
included the following:(a) review of the quarterly financial results and announcements for the financial quarters
ended 31 December 2002, 31 March 2003, 30 June 2003 and 30 September 2003 prior
to submission to the Board of Directors for consideration and approval;
(b) review of the year end financial statements ended 31 December 2002;
(c) review of the external auditors' reports for the financial year ended 31 December
2002 in relation to audit and accounting issues arising from the audit; and
(d) review of the internal audit reports prepared by the internal auditor on subsidiary
companies.
Internal audit function
The Company has an internal audit department whose principal responsibility is to undertake
regular and systematic review of the systems of controls so as to provide reasonable assurance
that such systems continue to operate satisfactorily and effectively in the Group. The internal
audit function is to ensure a regular review of the adequacy and integrity of the Group's
internal control systems. The internal auditor also conducts audit on all operating subsidiaries
and submits its findings to the Audit Committee. Internal audit reports prepared by the internal
auditor would be circulated to all members of the Audit Committee. Feedback and
recommendations would be circulated to the auditees for implementation and rectification.
All internal audit reports would be reviewed by the Audit Committee and discussed at Audit
Committee Meetings.
ANNUAL REPORT 2003