Apex Healthcare Berhad

 
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Board Charter

1. SCOPE

1.1 The Board has approved this Charter to set out its role, powers and responsibilities, taking into account corporate governance obligations, best practices, and relevant regulations.

1.2 The Board shall review the Charter from time to time and as necessary to ensure currency and compliance with regulatory and legal requirements, which will take precedence over any stipulation of this charter.

1.3 The Charter will be displayed on the Company’s website.

2. BOARD COMPOSITION

2.1 The Board shall be composed of a combination of Directors with a mix of skills appropriate to providing the necessary breadth and depth of knowledge and experience to serve the Company’s best interests.

2.2 While boardroom diversity remains a main criterion for Board composition, no regard shall be paid to gender, race or religion when considering specific candidates for appointment to the Board. Suitability of qualifications, experience and synergy with the overall composition of the Board are factors which the Company values and will take into account.

2.3 The size of the Board shall be determined by the needs of the Company. Nevertheless, Board composition shall always be in full compliance with all current and applicable laws and regulations.

2.4 The Board shall establish and maintain a Nomination Committee to regularly review the number, mix and effectiveness of Directors on the Board so as to determine whether the Board remains appropriate and effective, subject to any applicable regulatory constraints.

3. ROLE OF BOARD

3.1 The Board’s role is to represent and serve the interests of shareholders by overseeing and appraising the Company’s strategies and policies and monitoring management’s implementation of them. The Board’s principal objective is to maintain and increase shareholder value while ensuring that the Group’s overall activities are properly managed.

3.2 The Board is answerable to shareholders generally, and specifically to General Meetings of shareholders.

3.3 The list below are matters specifically reserved for the Board’s decision:

  1. Any substantial change in existing businesses and/or the entry and diversification into new and unrelated businesses by the Company and Group.
  2. The change in name of the Company or any of its subsidiary companies.
  3. The change in the share capital of the Company or any of its subsidiary companies.
  4. The acquisition or sale of intangible assets such as trademarks, intellectual property or licenses except in the ordinary course of business.
  5. The licensing out of the group’s trademarks or intellectual property except in the ordinary course of business.
  6. The entry into related party transactions with a value exceeding 0.25% of any of the percentage ratios as defined in Chapter 10 of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements (“MMLR”) or more than RM500,000.
  7. The acquisition of any properties, quoted or unquoted securities.
  8. The appointment and changes of the Company’s cheque signatories and their associated limits of authority.
  9. The appointment and changes of the Company’s corporate representatives.
  10. The Group’s annual operating and capital expenditure budget and business strategies associated therewith.
  11. The Company’s material communications to the public and/or shareholders, including Press Releases, Announcements, Annual Reports, Letters and Circulars.
  12. The calling of General Meetings of the Company except where such meetings have been properly called by shareholders independently of the Board as provided for in the Company’s Articles of Association.
  13. The recommendation of dividend payments for shareholders’ approval and the dates for closure of books.
  14. The entry into or termination of any contract that is likely to have a material impact on the financial performance of the Group.
  15. Changes to the composition of the Board of Directors and Board Committees.
  16. Changes to the Terms of Reference of Board Committees.
  17. Changes to the corporate structure of the Group involving movement in shareholding structures including the incorporation and/or acquisition of new subsidiary or associated companies, divestment of subsidiaries or associated companies and entry into joint ventures.
  18. Appointment and resignation/termination of the Chief Executive Officer and Chief Financial Officer.
  19. Appointment and resignation/termination of advisors such as merchant bankers, external auditors, internal auditors and company secretaries by the Group.
  20. The procurement of banking facilities for the Group, the charging of any of the Company’s or its subsidiary companies’ assets and the giving of corporate guarantees by the Company.
  21. Any matter for which Board approval is required by law as specified in the MMLR, guidelines of the Securities Commission, the Companies Act, the Malaysia Code on Corporate Governance and any other relevant authority.
  22. Succession planning of members of the Board.
  23. Any matter for which Board approval is required under the Company’s Memorandum and Articles of Association.
  24. Any other matter that the Board may include in this schedule from time to time.
3.4 The Board shall meet at least 4 times a year, and Directors will allocate sufficient time to perform their duties effectively.

4. ROLE OF DIRECTORS

4.1 Directors will act at all times with honesty and integrity, and will observe high standards of ethical behaviour.

4.2 Directors should not place their personal interests over the Company’s interests.

4.3 In addition to attending formal Board and Board committee meetings, the Directors may be requested to undertake other reasonable duties including membership of ad hoc committees, attending management meetings, and participation in special projects.

4.4 Directors should avail themselves of programmes and continuing education, training or development programs arranged for them by the Company.

4.5 The Board, its committees, and Directors individually, may take independent professional advice, as necessary, at the Company’s expense, subject to prior consultation with the Chair. Advice so received will be made available to all Directors if it is appropriate to so.

4.6 The Board considers Directors to be Independent where they take no part in management and are free of business or other relationships that could materially interfere with or could reasonably be perceived to materially influence the exercise of their unfettered and independent judgment of what is in the best interests of the Company. At minimum, Independent Directors must satisfy the definition of independence promulgated in the MMLR.

4.7 The Board shall spell out expectations on the time commitment expected of Directors.

4.8 Acceptance of new directorships should be disclosed to the Board in a timely fashion and should not result in a conflict with the discharge of Directors’ duties to the Company. Directors are not permitted to hold more than five (5) directorships of listed companies in Malaysia, including that of the Company itself.

5. ROLE OF CHAIRMAN

5.1 The Board shall appoint one of its members to be Chairman.

5.2 The Chairman will:

  1. Chair general meetings of shareholders;
  2. Represent the Board to the shareholders and communicate the Board’s position;
  3. Lead the Board and facilitates and encourages constructive discussion and debate during Board meetings.
  4. Determine, in consultation with management, the agenda for the Board’s deliberations;
  5. Ensure that the Board and its committees are fully supplied with the information and resources necessary to discharge its duties effectively.

6. ROLE OF CHIEF EXECUTIVE OFFICER ("CEO")

6.1 The day-to-day management of operations of the Company and Group is the responsibility of the CEO who reports to the Board on key management issues, which include:

  1. Developing and implementing corporate strategies and making recommendations to the Board on significant corporate strategic initiatives;
  2. Submission of an annual budget for consideration and approval by the Board;
  3. Maintaining effective risk management and compliance management frameworks;
  4. Appointing and determining the terms of appointment of senior management, developing and maintaining succession plans, and monitoring the performance of key executives;
  5. Informing the Board of material continuous disclosure;
  6. Ensuring that the Company and Group remain in compliance with all applicable and relevant regulations and laws; and
  7. Managing operations in accordance with any applicable standards for social, ethical and environmental practices.

7. BOARD COMMITTEES

7.1 The Board shall establish Board committees as appropriate and necessary to assist it in matters that require particular review. The following are permanent Board committees:

  1. Audit Committee
  2. Nomination Committee and
  3. Remuneration Committee.

7.2 The duties of these committees are specified in their own Terms of Reference which are reviewed from time to time. The Terms of Reference and composition of the committees are specified in the appendices to this Board Charter.

7.3 The Terms of Reference of the Audit Committee are specified in Appendix A, the Remuneration Committee in Appendix B and the Nomination Committee in Appendix C.

7.4 The Board may also delegate specific functions to ad hoc committees as and when need dictates.

APPENDIX A
Terms of Reference of the Audit Committee

1. Constitution

The Board has established a Committee of the Board to be known as the Audit Committee (hereinafter known as the “AC”) with authority and duties as specified in these Terms of Reference.

2. Membership of the Committee

2.1 The AC shall be appointed by the Board from amongst the directors of the Company and shall consist of at least 3 members, a majority of whom shall be independent non-executive directors. A quorum requires the majority of members present to be independent directors.

2.2 At least one member of the AC must be a member of the Malaysian Institute of Accountants. If there is none, one member must either have at least 3 years’ working experience and (a) have passed the examinations specified in Part 1 of the First Schedule of the Accountants Act, 1967, or (b) be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or have the following qualifications:-

  1. a degree/masters/doctorate in accounting or finance and at least 3 years’ post qualification experience in accounting or finance; or
  2. at least 7 years’ experience being a chief financial officer of a corporation or having a function of being primarily responsible for the management of the financial affairs of a corporation.

2.3 No alternate director shall be appointed as a member of the AC.

2.4 The Board of Directors must via the Nomination Committee review the composition, term of office and performance of the AC and its members annually to determine whether the AC and its members have carried out their duties in accordance with its Terms of Reference.

2.5 The members of the AC shall elect a Chairman from among their number who shall be an independent non-executive director.

2.6 If a member of the AC resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced below 3, the Board of Directors shall, within 3 months of that event, appoint such number of new members as may be required to make up the minimum number of 3 members.

2.7 The Company Secretary shall be the Secretary of the AC.

3. Rights of the Audit Committee

3.1 The AC shall, wherever necessary and reasonable for the performance of its duties, in accordance with procedures stipulated by the Board of Directors and at the cost of the Company:

  1. have authority to investigate any matter within its Terms of Reference;
  2. have the resources that are required to perform its duties;
  3. have full and unrestricted access to any information pertaining to the Company and the Group;
  4. have direct communication channels with the External Auditors and person(s) carrying out the internal audit function or activity;
  5. be able to obtain independent professional or other advice and to invite outsiders to attend AC meetings where necessary; and
  6. be able to convene meetings with the External Auditors and Internal Auditors, without the presence of any employees, at least twice a year and whenever deemed necessary.

3.2 The AC shall take into cognizance in its deliberations the Listing Requirements of Bursa Malaysia Securities Berhad and the Malaysian Code on Corporate Governance 2012, and any other pertinent regulations and laws, as well as revisions which may come into force thereafter.

3.3 Where the AC is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Berhad, the AC shall report such matter to Bursa Malaysia Securities Berhad.

4. Duties and Functions of the Audit Committee

4.1 The AC shall review the following and report the same to the Board of Directors:-

  1. with the External Auditors, the nature and scope of the audit before commencement;
  2. with the External Auditors, their evaluation of the system of risk management and internal controls;
  3. with the External Auditors, the audit reports, management letters and management response;
  4. the assistance given by the Company’s employees and officers to the External Auditors;
  5. the adequacy of the scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work;
  6. the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;
  7. any appraisal or assessment of the performance of members of the internal audit function;
  8. the financial reports at the end of each quarter and year end, prior to approval by the Board of Directors, focusing particularly on:-
    • changes in or implementation of major accounting policy changes;
    • significant matters highlighted including financial reporting issues, significant judgements made by management, significant and unusual events or transactions and how these matters are being addressed; and
    • compliance with accounting standards and other legal requirements;
  9. any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;
  10. any letter of resignation from the External Auditors; and
  11. whether there is reason (supported by grounds) to believe that the External Auditors is not suitable for re-appointment.

4.2 The AC shall review any matters concerning the appointment/re-appointment and dismissal of both the Internal and External Auditors, their audit fees and render its recommendations accordingly to the Board of Directors. In considering the appointment/re-appointment and dismissal of the External Auditors, to consider among others:-

  1. the adequacy of the experience and resources of the accounting firm;
  2. ii. the persons assigned to the audit;
  3. the accounting firm’s audit engagements;
  4. the size and complexity of the listed issuer’s group being audited; and
  5. the number and experience of supervisory and professional staff assigned to the particular audit.

4.3 The AC shall evaluate and assess the performance of External Auditors, in terms of the following:-

  1. the independence of the External Auditors;
  2. the External Auditors ability to meet deadlines in providing services and responding to issues in a timely manner as contemplated in the external audit plan;
  3. the nature of the non-audit services provided by the External Auditors and fees paid for such services relative to the audit fee; and
  4. whether there are safeguards in place to ensure that there is no threat to the objectivity and independence of the audit arising from the provision of non-audit services or tenure of the External Auditors.

4.4 The AC shall discuss the contracts and nature for the provision of non-audit services which can be entered into by the Group with the External Auditors or its affiliates and procedures that must be followed. The contracts to be entered into shall not include:-

  1. Management consulting;
  2. Strategic decision;
  3. Internal audit; and
  4. Policy and standard operating procedures documentation.

In the event that the non-audit fees paid to the Company’s External Auditors, or a firm or corporation affiliated to the External Auditors’ firm are significant (e.g. constitute 50% of the total amount of audit fees paid to the Company’s External Auditors) the Company is required to state the details on the nature of non-audit services rendered in the Report of the Audit Committee.

The AC shall approve any appointment or termination of senior staff members of the internal audit function; take cognizance of resignations of internal audit staff and provide resigning staff member an opportunity to submit reasons for resigning or if the internal audit function is outsourced, then the AC shall evaluate and assess the performance of outsourced Internal Auditors, including their independence. The AC shall consider the major findings of internal investigations and management’s response.

4.5 The AC shall verify that the allocation of options pursuant to the Apex Healthcare Berhad Employee Share Option Scheme, where any such Scheme is in operation, is in compliance with criteria that have been disclosed to employees as required under the Listing Requirements of Bursa Malaysia Securities Berhad.

4.6 The AC functions also as a Risk Management Committee. Accordingly, the head of Internal Audit reports directly to the AC. The head of Internal Audit should have the relevant qualifications and responsibilities for providing assurance to the AC that the internal controls are operating effectively. For administrative and operational matters, the Internal Auditors will liaise with either the Chief Executive Officer (“CEO”) or Financial Controller (“FC”).

4.7 The Chairman of the AC should engage on a continuous basis with senior management in order to be kept informed of matters affecting the Company or Group.

4.8 The AC shall conduct meetings independently and separately from time to time with Internal and External Auditors; and

4.9 The AC shall conduct any other duties as may be assigned by the Board of Directors from time to time.

5. Attendance at Meetings

5.1 The CEO, FC, the key representatives of the External and Internal Auditors shall normally attend meetings.

5.2 Other Board members and employees may also attend AC meetings only at the AC’s invitation, specific to the relevant meeting.

6. Procedure of Audit Committee

6.1 The AC shall regulate its own procedure, in particular:

  • the calling of meetings;
  • the notice to be given of such meetings;
  • the voting and proceedings of such meetings;
  • the keeping of minutes; and
  • the custody, production and inspection of such minutes.

6.2 The AC shall meet at least 4 times a year. The AC shall meet with the External Auditors and Internal Auditors, without the presence of any employee, at least twice a year. The External Auditors may request a meeting if they consider that one is necessary.

6.3 The Secretary shall circulate the minutes of meetings of the AC to all members of the Board of Directors.

6.4 The AC shall prepare a report to the Board that provides details of the activities of the AC, number of AC meetings held in a year, details of attendance of directors at such meetings and details of relevant training attended by each director for inclusion in the Company’s Annual Report.

6.5 A resolution in writing signed by all of the members of the AC shall be as valid and effectual as if it had been passed at a meeting of the members duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more members. Any such documents may be accepted as sufficiently signed by a member if transmitted to the Company by telegram, telex, facsimile or other electrical written message purporting to include a signature of the member.  

APPENDIX B

Terms of Reference of Remuneration Committee

1. Constitution

The Board has established a Committee of the Board to be known as the Remuneration Committee (hereinafter referred to as the “RC”) with authority and duties as specified in these Terms of Reference.

2. Membership

2.1 The RC shall be appointed by the Board from amongst themselves and shall consist wholly or mainly of non-executive directors. The appointment of a Committee member terminates when the member ceases to be a Director, or as determined by the Board.

2.2 The members of the RC shall elect a Chairman from among their members.

2.3 The Company Secretary shall be the Secretary of the RC.

3. Meetings

3.1 The Committee shall meet at least once a year. More meetings may be conducted if the need arises. The quorum for a meeting of the RC shall be two (2) members.

3.2 A resolution in writing, signed by all the members of the Committee, shall be as valid and effectual as if it has been passed at a meeting of the members duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more members. Any such documents may be accepted as sufficiently signed by a member if transmitted to the Company by telegram, telex, facsimile or other electrical written message purporting to include a signature of the member.

3.3 The Company Secretary or his/her representative or other appropriate senior officer shall act as secretary of the Committee and shall be responsible in conjunction with the Chairman, for drawing up the agenda and circulating it, supported by explanatory documentation to Committee members prior to each meeting.

4. Guiding Principles

4.1 The levels of remuneration should be sufficient to attract and retain the directors needed to run the company successfully. The component parts of remuneration should be structured so as to link rewards to corporate and individual performance, in the case of executive directors. In the case of non-executive directors, the level of remuneration should reflect the experience and level of responsibilities undertaken by the particular non-executive concerned.

4.2 There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors.

4.3 The Committee shall take into cognizance in its deliberations the Listing Requirements of Bursa Malaysia Securities Berhad and the principles in the Malaysia Code on Corporate Governance 2012, and any other pertinent regulations and laws, as well as revisions which may come into force thereafter.

5. Duties and Functions of the Committee

The RC is authorised by the Board to:

5.1 Review and determine, at least once annually, adjustments to the remuneration package, including benefits in kind, of each Executive Director and Senior Management of the Group, taking into account the corporate and individual performance, level of responsibility and complexity of the role, the inflation price index, and where necessary, information from independent sources on remuneration packages for equivalent jobs in the industry.

5.2 Review and determine the quantum of performance related bonuses, benefits-in kind and Employee Share Options, if available, to be given to the Executive Directors are linked to corporate and individual performance.

5.3 Review and recommend to the Board the level of fees paid to Non-Executive Directors, taking into consideration the fee levels and trends for similar positions in the market, time commitment required from the director (estimated number of days per year). The review also takes into consideration any additional responsibilities undertaken by the director acting as Chairman of a Board Committee.

5.4 Consider and execute the renewal of the service contracts of Senior Management of the Group, as and when due, as well as the service contracts and remuneration package for newly appointed Executive Director(s) prior to their appointment.

5.5 Execute any other duties as may be assigned by the Board of Directors from time to time.

APPENDIX C

Terms of Reference of Nomination Committee

1. Constitution

The Board has established a Committee of the Board to be known as the Nomination Committee (hereinafter referred to as the “NC”) with authority and duties as specified in these Terms of Reference.

2. Membership

2.1 The NC shall be appointed by the Board from amongst themselves, comprising exclusively of Non-Executive directors, the majority of whom shall be independent. The appointment of a Committee member terminates when the member ceases to be a Director, or as determined by the Board.

2.2 The Chairman of the NC shall be a Senior Independent Non-Executive Director appointed by the Board. In the absence of the Chairman, the members present shall elect a Chairman from among themselves.

2.3 The Company Secretary shall be the Secretary of the NC.

3. Meetings

3.1. The Committee shall meet at least once a year. More meetings may be conducted if the need arises. The quorum for a meeting of the NC shall be two (2) members, present in person, a majority of whom must be Independent Directors.

3.2. A resolution in writing, signed by all the members of the Committee, shall be as effectual as if it has been passed at a meeting of the Committee duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more Committee members. Any such documents may be accepted as sufficiently signed by a member if transmitted to the Company by telegram, telex, facsimile or other electrical written message purporting to include a signature of the member.

3.3. The Company Secretary or his/her representative or other appropriate senior officer shall act as secretary of the Committee and shall be responsible in conjunction with the Chairman, for drawing up the agenda and circulating it, supported by explanatory documentation to Committee members prior to each meeting.

4. Principles

4.1 The ultimate decision on the appointment of directors to the Board is the responsibility of the Board of Directors after due consideration of the recommendations of the NC.

4.2 The Board embraces diversity amongst its members and has ensured a good representation of the relevant skills and experience for the discharge of its duties. Its policy towards boardroom diversity is above all, to be non-discriminatory with regards to gender, race or religion, and only considering relevant qualifications, ability and commitment when proposing candidates for shareholders’ approval.

4.3 The Board desires that each of its directors, Chief Executive Officer and Chief Financial Officer / Financial Controller be of appropriate character, experience, integrity and competence so as to carry out their duties in the best interest of the Company. In addition, each of the non-executive directors must be able to devote time to discharge their responsibilities in their respective roles and Board Committees.

4.4 The NC shall take into cognizance in its deliberations the Listing Requirements of Bursa Malaysia Securities Berhad and the principles of the Malaysia Code on Corporate Governance 2012, and any other pertinent regulations and laws, as well as revisions which may come into force thereafter.

5. Duties and Functions of the Committee

The NC shall:

5.1 Assess and recommend to the Board, candidates for all directorships to be filled by the shareholders or the Board including new directors and directors to be re-elected or re-appointed or retained, taking into consideration candidates’

  • skills, knowledge, expertise and experience;
  • commitment (including time commitment) to effectively discharge his/her role as a Director;
  • professionalism;
  • gender, age and ethnicity and their pertinence to boardroom diversity;
  • character, integrity and competence; and
  • in the case of candidates for independent directors, ability to discharge the responsibilities and functions expected of Independent Non-Executive Directors.

5.2 Seek, evaluate and recommend candidates for directorship as and when required. The NC should seek recommendations and referrals from shareholders, directors, senior management and external sources where practicable in identifying appropriate candidates. Evaluation of candidates include the review of resumes, reference checks and interviews based on criteria established in para 2.20A of the Listing Requirements. The NC will then recommend chosen candidates to the Board for consideration.

5.3 Assess annually the effectiveness of the Board as a whole, the Committees of the Board, individual Directors including Independent Non-Executive Directors, as well as the Chief Executive Officer and Chief Financial Officer through a process implemented by the Board. All assessments and evaluations carried out by the NC in the discharge of all its functions should be properly documented.

5.4 Assess the independence of the Independent Directors upon admission, annually and when any new interest or relationship develops and confirm the conduct of this assessment in the annual report of the Company and in any notice convening a general meeting seeking approval for the appointment and re-appointment of Independent Directors.

5.5 Recommend to the Board, Directors to fill the seats on other Board Committees.

5.6 Review annually the Board’s required mix of skills and experience and other qualities, including core competencies which Non-Executive Directors bring to the Board.

5.7 Determine appropriate training for Directors, review the fulfilment of such training, and disclose details in the annual report as appropriate, in accordance with Bursa Malaysia Securities Berhad’s guidelines on Directors’ Training.

5.8 Consider and recommend the Directors for re-election at each Annual General Meeting.

5.9 Consider and recommend the retention of each Independent Director who has served in that capacity for more than nine years at each Annual General Meeting.

5.10 Undertake any other duties as may be assigned by the Board of Directors from time to time.

5.11 Review the term of office and performance of the Audit Committee and each of its members annually to determine whether the Audit Committee and its members have carried out their duties in accordance with its Terms of Reference.

5.12 Consider the succession planning of members of the Board and Senior Management through a formalized Succession Planning policy to ensure sustainable and effective performance of the Board and Senior Management through planned succession and compliance with good governance practices.