Apex Healthcare Berhad

 
  DOWNLOAD ANNUAL REPORT
  FINANCIAL RESULTS
 

Sustainability Statement


Apex Healthcare Berhad (“AHB” or “the Group”), with its mission of “Restoring Health, Enhancing Life” upholds sustainability in all aspects of its business operations and in a way which brings value to all stakeholders.

The Sustainability Statement of AHB (“Sustainability Statement”) sets out its approach towards sustainable development and management of economic, environmental and social risks and opportunities, based on a foundation of considering the impact of its business endeavours on the economic conditions of its stakeholders (“Economic”), on living and non-living natural systems (“Environmental”) and on the social system (“Social”).

A. Governance Structure

As there is no “one size fits all” approach, the Board of Directors (“the Board”) of AHB adopts a sustainability governance approach that is fit for the Group’s purpose considering amongst others, its culture, needs, sustainability-related risks and opportunities and level of maturity of its sustainability thinking and readiness.

The Board is responsible for embedding sustainability into the Group to complement its business strategy. The Board reviews and approves AHB’s sustainability strategies and ensures that adequate resources, systems and processes are in place for managing sustainability matters. The Board sets the tone from the top and assumes the highest governance body in setting the Group’s purpose, values and strategies which incorporate sustainability considerations. Ultimately, the Board is accountable for managing sustainability matters in AHB.

For the purpose of supporting the Board in implementation of sustainability-related strategies, the Board has established a Sustainability Committee which is responsible for monitoring the implementation of sustainability-related strategies, measures and actions in achieving AHB’s sustainability goals as approved by the Board. The Sustainability Committee is responsible for identifying, evaluating, monitoring and managing Economic, Environmental and Social (”EES”) risks and opportunities and ensuring all material sustainability matters are being considered and managed by the Apex Healthcare Group through its business operations including stakeholder engagement and materiality assessment

The preparation of sustainability disclosures for approval by the Board as required by laws and regulations and sustainability reporting also come under the purview of the Sustainability Committee. The Sustainability Committee of AHB is an executive management committee comprising the Chief Executive Officer (“CEO”) as Chairman of the Sustainability Committee and members of the Executive Committee, namely the Chief Operating Officer, Senior Vice President and Financial Controller.

For the day-to-day management of sustainability issues and to support the Sustainability Committee in implementing sustainability initiatives as approved by the Board are key personnel from the subsidiaries of the Group who report to the Sustainability Committee. These personnel serve as touchpoints to gather input from the relevant departments or functions, execute sustainability plans as determined by the Sustainability Committee and support the Sustainability Committee in ensuring robust processes are in place.

B. Materiality Assessment Process

Objectives
Through the materiality assessment, AHB endeavours to optimise identification of material sustainability matters with a view to enhance the Group’s strategic planning, operational management and business decision-makingand enabling stakeholders to make better informed decisions.

The Group’s context and scope
The context within which the Group operates is examined to gain a broad knowledge of the sustainability issues. As sustainability is a risk management tool which helps the Group to evaluate its management of business operations, the Sustainability Committee regularly identifies and categorises issues which the Group should take into account and assesses the impact of those issues on the business over the near, medium and long-term. The list of sustainability issues are identified from a combination of internal and external sources. The main internal sources are derived from internal analysis of trends that are relevant to AHB, its business strategies taking into account the Group’s short, medium and long-term goals and risk management assessments of the Group as discussed during monthly Management Meetings, Sustainability Committee Meetings, Board Strategy Forum and Board Meetings. The external sources are obtained from concerns raised by stakeholders during stakeholder engagements including but not limited to Annual General Meeting and sessions with analysts and media, examination of emerging and development of relevant laws and regulations and business environment which impact on sustainability.

The scope within which materiality of sustainability issues would apply is then determined. Xepa-Soul Pattinson (Malaysia) Sdn Bhd (“XEPA”) and Apex Pharmacy Marketing Sdn Bhd (“APM”) are key subsidiaries of AHB. The Board considers it appropriate in this regard to limit the scope of the materiality assessment and by extension the sustainability disclosure to these two subsidiaries. XEPA and APM operate predominantly in Malaysia and as such the geographical boundary of their materiality assessment is confined within Malaysia. The scope within which materiality applies as far as operations are concerned is limited to manufacturing and distribution which are the core operations of XEPA and APM respectively.

Stakeholder Engagement
In the overall objective of identifying and prioritising material sustainability matters, AHB engages with different stakeholder groups as such interactions are crucial to identify, prioritise and address material sustainability matters. Engagements are carried out on a regular basis with various stakeholders as they are integral to the business development and commitment of the Group to sustainability. For effective engagement with its stakeholders, various platforms are employed including but not limited to the following :

Stakeholder groups Issues of Interest Platforms of engagement
Employees
  • Training and development
  • Performance management
  • Career development
  • Company policies and procedures
  • Contribution of company to community
  • Apex Healthcare Continuing Professional Development
  • Staff performance appraisal
  • On-Board Induction
  • Circulation of internal policies
  • Group Corporate Briefing
  • Community investment programs
Shareholders
  • Group financial performance
  • Group business strategies
  • Sustainability policies
  • Annual General Meeting
  • Website of AHB
  • Annual Report
  • Quarterly Reports
  • Announcements to Bursa Malaysia Securities Berhad issued by AHB from time to time
Communities
  • Community investment
  • Social, health and environmental management of the Group
  • Impact of business operations
  • Ethical business conduct
  • Transparency and accountability
  • E-commerce website www.apexpharmacy.com.my
  • Community investment programs
  • Health screening
  • Public health talks
  • Website of AHB
  • Annual Report
  • Quarterly Reports
  • Announcements to Bursa Malaysia Securities Berhad issued by AHB from time to time
Customers
  • Product quality and efficacy
  • Price points
  • Delivery service
  • Competence of manufacturing and sales personnel
  • Face-to-face meeting with sales personnel
  • Advertisements
  • Promotional campaigns
  • Public health talks
  • Continuing medical education talks for medical professionals
  • Health screening
  • Social media e.g. Whatsapp, Facebook
  • E-commerce website www.apexpharmacy.com.my
  • Website of AHB
Government
  • Compliance with laws and regulations
  • Social, health and environmental management of the Group
  • Community investment
  • Dialogue, seminar and meeting
  • Membership in pharmaceutical-related organisations
  • Website of AHB

The Board is cognisant of the fact that engaging with all issues and concerns expressed by all stakeholder groups are resource-intensive and inefficient. Based on the concerns as well as key discussion points expressed by AHB’s stakeholder groups during the engagement sessions, the Group identifies and prioritises issues which are most relevant to each of its stakeholder groups. Each stakeholder group is weighted by the Sustainability Committee based on their influence on AHB’s achievement of strategic objectives and their dependence on AHB’s operations. In the context of AHB, the prioritised stakeholder groups which been identified are Employees, Shareholders and Communities.

Prioritisation of Sustainability Matters
The sustainability issues which have been identified and categorised taking into account stakeholders’ input encompass training and development of employees, reduction of energy consumption, community investment, digitisation and waste management including segregation of waste. These issues are further assessed and prioritised based on their materiality in the context of the Group.

C. Material Sustainability Matters

Sustainability matters are considered material if they reflect AHB’s significant EES impacts or substantively influence the assessments and decisions of stakeholders. The Sustainability Committee employs a Materiality Matrix as a tool to determine the degree of materiality of each identified sustainability matter. This tool takes into consideration the significance of the Group’s EES impacts (x-axis) and the influence of sustainability matters on stakeholder assessments and decisions (y-axis).

The closer a sustainability matter is to the upper right corner of the Materiality Matrix, the more material the sustainability matter is. AHB determines the materiality threshold to be 70% for each axis taking into consideration the context within which the Group operates. Sustainability matters that fall beyond the materiality threshold will be considered as material. The following sustainability matters are considered material to the Group as they have the greatest significance to the Group’s EES impacts and substantively influence stakeholders’ decisions and interests:

  1. Training and Development
  2. Reduction of Energy Consumption
  3. Community Investment

The process and outcome of the materiality assessment are reviewed by the Sustainability Committee and ultimately approved by the Board to ensure integrity and credibility of the materiality assessment.

D. Management of Material Sustainability Matters

Material Sustainability Matter: Social
Training and Development

Policy
The Group believes that a strong culture of learning plays a vital role in enhancing sustainable growth. As a matter of policy, the training and development programs of the Group focus on programs that will enhance leadership skills, broaden professional knowledge and elevate productivity. The development of employees’ skills and knowledge is part of sustainable labour practices and in line with the United Nations Sustainable Development Goals (SDGs), specifically Quality Education (Goal 4).

Measures and Actions
Within the Group, Apex Healthcare Berhad Continuing Professional Development (“Apex Healthcare CPD”) was launched in January 2013 as part of the Group’s training and development strategies. Apex Healthcare CPD provides a formalised platform for the employees to leverage their talents and to develop their skills and competencies. Since its inauguration, various programs encompassing management and leadership skills, financial management, pharmacy and therapeutics, marketing and selling skills, safety and health workshops, topics in relation to Sustainability, Personal Data Protection Act 2010, Companies Act 2016 have been conducted under the auspices of Apex Healthcare CPD for its employees.

In 2018, the Group-wide programs that were organised under the auspices of Apex Healthcare CPD include Creative Thinking and Problem Solving Skills (26th March), Holistic Branding & Marketing with Focus on Brand Management & Marketing Communication (26th June), Strategic Risk Management (16th August), Professional Image & Etiquette Excellence (28th September) and Solution Focused Influencing & Negotiation (30th October). This is in addition to specific work-related training and development programs that are held by the various departments of the Group relevant to their specific needs as provided by their respective departmental heads. XEPA is also recognised by the Pharmacy Board Malaysia as one of the Training Premises for Provisionally Registered Pharmacist (PRP). The PRPs are exposed to various areas relevant to pharmacy practice; encompassing production and packaging, laboratory testing, quality assurance, innovation and development, regulatory affairs and marketing and distribution. This accreditation further consolidates the commitment of the Group to providing training and development of junior pharmacists in their pursuit of professional excellence. In 2018, XEPA provided training for 4 PRPs.

Indicators
a. Choice of Indicator
The number of training hours per annum by employee category is adopted by the Board as the indicator. The number of training hours of employees of AHB’s key subsidiaries, namely XEPA and APM, which are scoped within this Sustainability Statement are organised in different job grades, namely “Manager to Senior Manager”, “Executive” and “Non-Executive”.

b. Baseline
Year 2015 is adopted as the baseline against which the data for training and development will be benchmarked to determine if the performance in this area has improved. The said year is adopted as the Board considers that the 2-year time period following the establishment of Apex Healthcare CPD will be able to provide the Group reasonable experience in formalising its training and development programs.

c. Measurement of Progress
The number of training hours of employees of AHB’s key subsidiaries, namely XEPA and APM, which are scoped within this Sustainability Statement from 2015 to 2018 are as follows:

No of training hours 2015 2016 2017 2018
Manager to Senior Manager 5,080 3,788 3,333 3,860
Executive 5,886 6,259 5,581 5,452
Non-Executive 10,470 9,643 11,254 10,032
Total 21,436 19,690 20,168 19,344

Continuous monitoring is conducted to provide a quantitative gauge that measures the adequacy of training and development provided to the employees. Whenever any structured training program is held, the participants are requested to complete a questionnaire to gather their feedback and to obtain their suggestions for topics that would be useful to them after the event. The number of training hours is reported on a yearly basis to allow the Group to track its performance and determine if any change is required to ensure the goal is still achievable.

Material Sustainability Matter: Environmental
Reduction of Energy Consumption

Policy
Energy efficiency plays an essential role in climate strategy. Reduction of energy consumed is important to the Group as a cost-saving measure and vital to reduction of greenhouse gas emissions. AHB’s environmental policy is foremost to improve energy efficiency and minimise energy consumption as far as possible while ensuring that the relevant regulations and standards are met. Reduction of energy consumption is part of sustainable energy efficiency initiatives and meet SDGs Responsible Consumption and Production (Goal 12) and Climate Action (Goal 13).

Measures and Actions
In APM’s main warehouse in Subang Jaya, environmentally-responsible and efficient technologies and systems are adopted to reduce energy emission which include the progressive retrofitting of existing lighting of 48W fluorescent tubes with energy-saving 22W LED lights.

While in XEPA, the replacement of air-cooled chiller with new water-cooled chiller in the form of HVAC cooling system at the Liquids and Solids Production Plants in Melaka, has led to reduction of energy consumption while providing optimal cooling for the production plants.

Indicators
a. Choice of Indicators
The Group’s indicator for energy consumption, as measured by the total energy consumed in terms of Kilowatt hour (“kWh”) per million Ringgit (“RM”) revenue of XEPA and APM, both entities being the key subsidiaries of AHB, is monitored monthly and reviewed regularly. The measures and actions taken are poised to improve energy efficiency and minimise energy consumption.

b. Baseline
The Group formalised the collection of data pertaining to energy conversation from XEPA and APM with effect from 2016 in accordance with Bursa Malaysia Securities Berhad’s emphasis on a robust sustainability framework. Thus, year 2016 is adopted as the baseline.

c. Measurement of Progress
Average amount of energy consumption in kWh per million RM revenue by XEPA and APM in 2016, 2017 and 2018 are shown as follows:

Average kWh per million RM revenue 2016 2017 2018 2018 vs 2017
XEPA 72,692 61,635 59,773 -3.02%
APM 4,155 3,808 3,777 -0.81%

The Group is cognisant that the metric employed for the measurement of progress of this material sustainability matter is dependent on several factors including sales mix, logistics and warehousing required and geographical distribution of products. XEPA and APM will continue to monitor and measure the progress of their energy consumption on a monthly basis to provide a good point of reference for the Group to maximise operational efficiencies and ultimately to attain its sustainable energy efficiency objectives. As and when there are new measures and actions instituted proposed by the Management, the Sustainability Committee will review and report to the Board.

Material Sustainability Matter: Economic
Community Investment

Policy
To enhance socioeconomic benefits and to create a positive social impact, the Group’s strategic sustainability direction as far as community investment is concerned involves voluntary contributions in the form of donations and sponsorships. Voluntary contributions by the Group is part of sustainable community investment initiatives and go a long way in meeting SDGs Zero Hunger (Goal 2), Good Health and Well-Being (Goal 3), Decent Work and Economic Growth (Goal 8) and Industry, Innovation and Infrastructure (Goal 9).

Measures and Actions
The Group supports cash contribution to the following causes as determined by Sustainability Committee, namely Education, Disadvantaged, and Miscellaneous; as well as non-cash contributions in the form of participation in job fairs, factory visits, exhibitions, roadshows, social outreach programs.

Indicators
a. Choice of Indicators
The Group’s community investment is guided by contribution to the following causes: Education, Disadvantaged and Miscellaneous, the percentage of which is determined by the Sustainability Committee. The Sustainability Committee assesses and determines the quantum of contributions made by the Group as and when there are needs by the communities and may vary the weightage of contribution depending on the needs of the communities within which the Group operates.

b. Baseline
The Group formalised its endeavours towards community investment with effect from 2017 and as a result, year 2017 is adopted as the baseline for purpose of Economic sustainability reporting.

c. Measurement of Progress
In 2018, the contributions made by the Group amounted to RM 140,361.

The beneficiaries of notable contributions made by the Group in 2018 include Yayasan Budi Penyayang, a foundation incorporated for charitable purposes which aims to provide care, compassion, comfort and consolation to the less fortunate and disadvantaged Malaysians; Palu Relief Fund, a humanitarian relief fund administered by Mercy Malaysia to assist the earthquake and tsunami victims in Palu, Indonesia, ElShaddai Centre which provides regular mobile clinics to various refugee communities under its program called H4R (Healthcare for Refugees) and Karunya Community Clinic which was set up by Asia Evangelistic Fellowship to provide medical treatment to the migrant workers.

To support educational causes, contributions were made to University Malaya to support their Baktisiswa, a medical volunteering program in Kota Marudu, Sabah and to sponsor their Best Student Award for Pharmacy; Melaka Manipal Medical College to support their International Conference on Interprofessional Education, Practice & Care, International Medical University (IMU) Charity Run Carnival or Chariofare to raise funds for charity and UCSI University to sponsor their genomics workshop “Translation of Genomic Data into Precision Healthcare” and to sponsor Book Prize for Year 1 & Graduating Year 4 students.

Responding to the needs of the vulnerable and disadvantaged groups, contributions were also made to various organisations including Hospis Melaka, Diabetes Malaysia, Malaysian Association for the Blind, Melaka Cancer Society, Yayasan Jantung Malaysia, Selangor and Federal Territory Association for the mentally handicapped and Pertubuhan Kebajikan Skizofrenia Malaysia.