contents Corporate Information Group Corporate Structure Chairman & Managing Director s Statement Corporate Governance Statement

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2 contents Corporate Information Group Corporate Structure Chairman & Managing Director s Statement Directors Profiles Corporate Governance Statement Audit Committee Report Internal Control Statement Responsibility Statement by the Board of Directors Financial Statements List of Properties Statistics of Shareholdings Notice of Eleventh Annual General Meeting Form of Proxy

3 Corporate Information BOARD OF DIRECTORS EDMOND CHEAH SWEE LENG Chairman/Senior Independent Non-Executive Director LOW CHIN GUAN Managing Director KWEK SIEW LENG Executive Director TOH SENG THONG Independent Non-Executive Director DATO DR. NORRAESAH BINTI HAJI MOHAMAD Independent Non-Executive Director AUDIT COMMITTEE REGISTRAR Chairman Toh Seng Thong Members Edmond Cheah Swee Leng Dato Dr. Norraesah Binti Haji Mohamad NOMINATION COMMITTEE Chairman Edmond Cheah Swee Leng Member Toh Seng Thong REMUNERATION COMMITTEE Chairman Edmond Cheah Swee Leng Members Low Chin Guan Toh Seng Thong COMPANY SECRETARY Chua Siew Chuan (MAICSA ) Pan Seng Wee (MAICSA ) REGISTERED OFFICE 1, Jalan 8, Pengkalan Chepa 2 Industrial Zone Kota Bharu, Kelantan Tel : Fax : Securities Services (Holdings) Sdn. Bhd. Level 7, Menara Milenium, Jalan Damanlela Pusat Bandar Damansara Damansara Heights Kuala Lumpur Tel : Fax : PRINCIPAL BANKERS OCBC Bank (Malaysia) Berhad Standard Chartered Saadiq Berhad EXTERNAL AUDITORS Ernst & Young Level 16-1, Jaya 99, Tower B, 99 Jalan Tun Sri Lanang, Melaka INTERNAL AUDITORS PKF Advisory Sdn Bhd Level 33, Menara 1MK, Kompleks 1 Mont Kiara, No. 1, Jalan Kiara, Mont Kiara Kuala Lumpur STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad 2 ADVENTA BERHAD M

4 Group Corporate Structure BERHAD (Co. No.: M) 100% Sun Healthcare (M) Sdn. Bhd. Distribution of medical and healthcare equipment and appliances 100% Electron Beam Sdn. Bhd. Industrial and commercial sterilization, warehousing & handling services 100% Lucenxia (M) Sdn. Bhd. Home dialysis treatment 100% PTM Progress Trading & Marketing Sdn. Bhd. Investment property holding annual report

5 BERHAD (Co. No.: M) Chairman & Managing Director s Statement 4 ADVENTA BERHAD M

6 Chairman & Managing Director s Statement Dear Shareholders, We are pleased to inform you that the Company has progressed well and above our expectations during the year, coming from a massive divestment of all its manufacturing businesses to focus on medical services and related businesses. Financial Performance The Group s revenue from continuing operations grew more than 92% from RM14.19 million in the previous financial year to RM27.38 million this financial year. Net profit after tax jumped from RM1.35 million in the previous financial year to RM6.06 million this financial year, a more than four-fold increase. These results show that the decision to shift business focus towards the sustainable growth sector of medical services is starting to bear fruit. As a part of this change, several important milestones were achieved, particularly in the hospital supplies and distribution segment. Distributorships and new accounts increased as a result of intensified efforts to gain scale in the business. The financial year saw a jump of 30% in revenue from this segment compared to the previous financial year, indicating continued growth and strength in several key product sectors. At the same time, the Company s sterilization business under Electron Beam Sdn Bhd has gained sufficient customer base to be sustainable in its income. Further improvements in sterilization capacity utilization by capturing additional strategic medical industry customers will contribute to improving income through better utilization of assets. Lucenxia (M) Sdn Bhd ( Lucenxia ), the Company s subsidiary which will be launching a pioneering home dialysis treatment programme, has the potential to supply full service home dialysis treatment anywhere in the country, rural or urban, making it a natural partner to the Government s objective and drive to provide all patients with quality care outside of dialysis centers. Lucenxia solves the questions of access and quality care at an affordable cost and as such, a PD first program is being implemented. Commercial revenue is expected from this sector from Q4 of 2014 onwards. To drive these businesses strongly in the near future, the Company has recruited several key marketing, distribution and logistics personnel that have vast experience in their respective fields. The addition of experienced and highly professional personnel will be the drivers in our fierce pursuit of expansion and growth, both organically and via acquisitions. Looking Ahead The growth of healthcare in Asia will be unprecedented, surpassing historical numbers. The growing wealth of the countries plus better access to knowledge and information demands improvement in healthcare quality and its delivery to the people. In response to this, governments are grappling to meet these expectations, balancing tight budgets and providing better care and access. The Company and the Group are well positioned to be stakeholders in this pursuit of better yet affordable healthcare. Appreciation On behalf of the Board, we would like to express our gratitude and appreciation to all our stakeholders such as our customers, suppliers, business partners and shareholders for their continuing support and confidence in the Group. We would also like to thank our management teams and employees for their hard work and commitment to the Group. EDMOND CHEAH SWEE LENG Chairman LOW CHIN GUAN Managing Director annual report

7 Directors Profiles 1 standing from left to right: Dato Dr. Norraesah Binti Haji Mohamad Toh Seng Thong Kwek Siew Leng sitting from left to right: Edmond Cheah Swee Leng Low Chin Guan 6 ADVENTA BERHAD M

8 Directors Profiles EDMOND CHEAH SWEE LENG Chairman, Senior Independent Non-Executive Director LOW CHIN GUAN Managing Director Mr. Edmond Cheah Swee Leng, aged 59, a Malaysian, was appointed to the Board of Adventa Berhad on 9 August 2004 and is presently the Chairman of the Company. His last reelection as a director was on 28 April He is a member of the Audit Committee and Chairman of the Remuneration Committee and Nomination Committee. He is a Chartered Accountant by profession and a member of the Malaysian Institute of Accountants and Association of Chartered Accountants, England and Wales. He is also a certified financial planner. His professional experience has been in the fields of audit, merchant banking, corporate & financial advising, portfolio & investment management, unit trust management and financial planning. His career started with a professional accounting firm in London where he was an Audit Manager. He was the manager in charge of Portfolio Investment in a merchant bank in Malaysia and subsequently in charge of the corporate and planning division in a public listed company. Mr. Cheah was the Chief Executive Officer/Executive Director and a member of the Investment Committee of Public Mutual Fund Berhad, the largest private unit trust management company in Malaysia. He was also a council member and Chairman of the Secretariat of the Federation of Investment Managers Malaysia (FIMM), and is a former Task Force Member on Islamic Finance for Labuan International Offshore Financial Centre (LOFSA), and a former member on the Securities Market Consultation Panel in Bursa Malaysia Securities Berhad. He attended all four (4) Board Meetings held during the financial year ended. Mr. Cheah sits on the Board of Nylex Malaysia Berhad, Ancom Berhad and Ancom Logictics Berhad, all of which are listed on Bursa Malaysia Securities Berhad. He is also an Investment Committee Member and Director of MAAKL Mutual Berhad. He does not have any family relationship with any other director and/or substantial shareholder of the Company nor any conflict of interest in any business arrangement involving the Company. He has no convictions for any offence within the past ten (10) years. Mr. Low Chin Guan, aged 54, a Malaysian, was appointed to the Board of Adventa Berhad on 10 May 2004 and is presently the Managing Director of the Company. His last re-election as a director was on 29 April He is also a member of the Remuneration Committee. He graduated as a Civil Engineer from the University of Manchester Institute of Science and Technology (UMIST), United Kingdom. Mr. Low founded the initial subsidiary of the Group in He has years of experience in project management, operations of manufacturing and assembly plants, financial control, strategic planning and marketing. In 2004, he formed Adventa Berhad to hold various companies and manufacturing facilities under a single group management. He now leads the Group in the areas of strategic planning, business development, investments, acquisitions and key personnel recruitment. He is also actively involved in product development, particularly in technological directions. He attended all four (4) Board Meetings held during the financial year ended. Mr. Low does not hold directorships in any other public listed company. He is the son of Madam Wong Koon Wong Kwan Mooi and the brother of Ms. Low Lea Kwan, who are substantial shareholders of the Company. He does not have any family relationship with any other director nor any conflict of interest in any business arrangement involving the Company, except as disclosed in the Financial Statements. He has no convictions for any offence within the past ten (10) years. KWEK SIEW LENG Executive Director Ms. Kwek Siew Leng, aged 48, a Malaysian, was appointed to the Board of Adventa Berhad on 10 May 2004 and is presently an Executive Director of the Company. Her last re-election as a director was on 29 April She is an Associate Member of the Chartered Institute of Management Accountants (CIMA) and a Chartered Accountant with the Malaysian Institute of Accountants (MIA). She has senior operations experience in audit and accounting prior to joining the Adventa Bhd group. Her prior employment in public practice includes stints in statutory and regulatory reporting, financial planning, budgeting and forecasting, taxation, management and system development in various fields. annual report

9 Directors Profiles She joined one of the Company s subsidiaries as Finance Manager in 2002 and assumed the position of Group Finance Manager of Adventa Berhad in She was subsequently promoted to Finance Director in She is now responsible for the overall management and operations of the accounts and finance departments. She attended all four (4) Board Meetings held during the financial year ended. She does not hold directorships in any other public listed company. She does not have any family relationship with any other director and/or substantial shareholder of the Company, nor any conflict of interest in any business arrangement involving the Company. She has no convictions for any offence within the past ten (10) years. TOH SENG THONG Independent Non-Executive Director Mr. Toh Seng Thong, aged 55, a Malaysian, was appointed to the Board of Adventa Berhad on 10 May His last re-election as a director was on 26 March He is the Chairman of the Audit Committee and a member of the Remuneration Committee and Nomination Committee. He graduated with a Bachelor of Commerce (Accounting) degree from the University of Canterbury, New Zealand in He is a Chartered Accountant by profession and a member of the Malaysian Institute of Accountants, Malaysian Institute of Certified Public Accountants, New Zealand Institute of Chartered Accountants, a Fellow member of the Malaysian Institute of Taxation and an Associate member of the Harvard Business School Alumni Club of Malaysia. Mr Toh has over 25 years experience in auditing, taxation and corporate advisory and financial advisory as a practicing Chartered Accountant of Malaysia. He started his own practice under Messrs S T Toh & Co in He attended all four (4) Board Meetings held during the financial year ended. DATO DR. NORRAESAH BINTI HAJI MOHAMAD Independent Non-Executive Director Dato Dr. Norraesah Binti Haji Mohamad, aged 66, a Malaysian, was appointed to the Board of Adventa Berhad on 8 November 2005 as an Independent Non-Executive Director of the Company. Her last re-election as a director was on 26 March She is also a member of the Audit Committee. Dato Dr. Norraesah holds a Doctorate Degree in Economics Science (International Economics and Finance) and a Masters in International Economics and Financial Relations from the University of Paris Pantheon-Sorbonne, France. She has more than 42 years of working experience in banking, consultancy and international trade and commerce. From 1972 to 1985, she worked with the International Trade Division of the Ministry of Trade and Industry and the Ministry of Finance before joining the corporate sector. From 1988 to 1990, Dato Dr. Norraesah was the Communications Manager of ESSO Production Malaysia Inc. and subsequently assumed the position of Managing Director with a consultant firm providing financial advisory services. She was also appointed as Chief Representative of Credit Lyonnais Bank in Malaysia and was the Chairman of Bank Rakyat from 2000 to She attended two (2) out of four (4) Board Meetings held during the financial year ended. Dato Dr. Norraesah currently also sits on the board of My E.G. Services Berhad, Malaysian Genomics Resource Centre Berhad and Utusan Melayu (Malaysia) Berhad, all listed on Bursa Malaysia Securities Berhad. She does not have any family relationship with any other director and/or substantial shareholder of the Company, nor any conflict of interest in any business arrangement involving the Company. She has no convictions for any offence within the past ten (10) years. He sits on the Board of Latitude Tree Holdings Berhad and Malaysian Genomics Resource Centre Berhad, companies listed on Bursa Malaysia Securities Berhad. Mr. Toh does not have any family relationship with any other director and/or substantial shareholder of the Company nor any conflict of interest in any business arrangement involving the Company. He has no convictions for any offence within the past ten (10) years. 8 ADVENTA BERHAD M

10 Corporate Governance Statement The Board of Directors ( the Board ) is committed to its policy of managing the affairs of the Group with transparency, integrity and accountability by ensuring that a sound framework of best corporate practices is in place at all levels of the Group s business and thus discharging its principal responsibility towards protecting and enhancing long-term shareholders value and investors interest. The Board is pleased to report to the Shareholders that the best practices of good corporate governance having regard to the Recommendations stated under each Principle in the Malaysian Code on Corporate Governance 2012 ( the Code ) have generally been practiced within the Group throughout the financial year ended. 1.0 THE BOARD OF DIRECTORS 1.1. The Board of Directors The Board has overall responsibility for corporate governance, strategic direction, formulation of policies and overseeing the investment and business of the Company. During the financial year ended, there were four (4) Board meetings held. Details of the attendance of the Directors at the Board meetings are as follows:- Name of Directors No. of meetings attended/held % Mr. Edmond Cheah Swee Leng 4/4 100 Mr. Low Chin Guan 4/4 100 Ms. Kwek Siew Leng 4/4 100 Mr. Toh Seng Thong 4/4 100 Dato Dr. Norraesah Binti Haji Mohamad 2/ Board Balance The Board has five (5) members comprising:- Two (2) Executive Directors including one (1) Managing Director and three (3) Non-Executive Directors, including one (1) Senior Independent Non-Executive Chairman. The Board composition is in compliance with Paragraph 15.02(1) of the Main Market Listing Requirements ( MMLR ) of Bursa Malaysia Securities Berhad ( Bursa Securities ) and Recommendation 3.4 of the Code, wherein it states that the positions of Chairman and Chief Executive Officer (in this case, the Managing Director) should be held by different individuals, and the Chairman must be a non-executive member of the Board. 1.3 Board Charter The Board has adopted a Board Charter which sets out its primary responsibilities as follows:- reviewing and adopting the business plan and overall strategic directions for the Company including establishing company goals and ensuring that the strategies are in place to achieve them; establishing policies for strengthening the performance of the Company including ensuring that the Management is proactively seeking to build the business through innovation, initiative, technology, new products and the development of its business capital; overseeing the conduct of the Company s business to evaluate whether the business is being properly managed; identifying principal risks and ensuring the implementation of appropriate systems to manage these risks; succession planning, including appointing, training, fixing the remuneration of and where appropriate, replacing senior management members of the Group; annual report

11 Corporate Governance Statement 1.0 THE BOARD OF DIRECTORS 1.3 Board Charter developing and implementing an investor relations programme or shareholders communications policy for the Company; reviewing the adequacy and integrity of the Company s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines; deciding on necessary steps to protect the Company s financial position and the ability to meet its debts and other obligations when they fall due, and ensuring that such steps are taken; ensuring that the Company s financial statements are true and fair and conform to any applicable laws and/or regulations; and ensuring that the Company has appropriate corporate governance structures in place, including standards of ethical behaviour, and promoting a culture of corporate responsibility. The Board will review this Board Charter from time to time to ensure that it remains consistent with the Board s objectives and responsibilities and any new regulations that may have an impact on the discharge of the Board s responsibilities. The Board Charter will be uploaded to the Company s website in due course. There is a clear division of responsibility between the Chairman and the Managing Director to ensure that there is a balance of power and authority. The roles of the Chairman and the Managing Director are separated and clearly defined. The Chairman is responsible for ensuring Board effectiveness and conduct whilst the Managing Director has overall responsibilities over the Group s operating units, organisational effectiveness and implementation of Board policies and decisions. The Board is of the view that the current composition of the Board facilitates effective decision making and independent judgment where no individual shall dominate the Board s decision making. The Board members have a wide range of business, financial and technical experience. The mixed skills and experiences are vital for the successful direction of the Group. A brief profile of each Director is presented on pages 6 to 8 of this Annual Report. The Board also recognises the pivotal role of the independent directors in corporate accountability as they provide unbiased and independent views, advice and judgment. Mr. Edmond Cheah Swee Leng has been identified as the Senior Independent Non-Executive Director of the Board to whom concerns may be conveyed. 1.4 Code of Conduct The Board has adopted a Code of Conduct for the Directors of the Company, which covers a wide range of business practices and procedures. The Code of Conduct describes the standards of business conduct and ethical behaviour for Directors in the performance and exercise of their responsibilities as Directors of the Company or when representing the Company. 1.5 Sustainability and Corporate Social Responsibility ( CSR ) The Company seeks to be a good corporate citizen in everything that it does. In promoting the Company s sustainability and CSR which form part of the Company s strategies, the Company aims to:- (a) (b) (c) conduct every aspect of our business with honesty, integrity and openness, respecting human rights and the interests of our employees, customers and third parties; respect the legitimate interests of third parties with whom we have dealings in the course of our business; and maintain the highest standards of integrity. 10 ADVENTA BERHAD M

12 Corporate Governance Statement 1.0 THE BOARD OF DIRECTORS 1.5 Sustainability and Corporate Social Responsibility ( CSR ) The Company engages with the local community at a range of levels and its relationships with the various members of the local community are very important to the Company and are an essential part in the growth of the Company s business. In line with the Company s core values, the Company seeks to play a part in promoting CSR. Our community approach incorporates the following elements: engagement with the local communities in which we operate on the quality of our services and any changes to those services; working with local authorities, businesses and other interested parties to improve quality of life; offering employment opportunities to all sectors of the community through non-discriminatory policies and promoting opportunities for disadvantaged and vulnerable groups; promoting engagement between our staff and the community; and supporting local community groups and charities such as the Malaysian Society of Nephrology and the Kuala Lumpur Soup Kitchen, in both cash and kind. As the Company strives to achieve continual improvement in environmental performance, the Company is committed to:- reducing pollution and the overall impact of our operations on the environment; complying with, and where possible, exceeding applicable legal requirements relating to the environment; actively promoting improved energy efficiency within our business in order to reduce climate change. 2.0 SUPPLY OF INFORMATION The Board has full and timely access to information concerning the Company and the Group. The Board is provided with the relevant agenda and board papers in sufficient time prior to the meetings to enable them to obtain further explanation and clarification to facilitate informed decision-making. The Board papers include reports on the Group s financial, operational and corporate development. The Board has unrestricted access to all information within the Company, whether as a full board or in their individual capacity, which is necessary for discharge of its responsibilities and may obtain independent professional advice at the Company s expense in furtherance of their duties. The Board is supported by a suitably qualified and competent Company Secretary and has access to the advice and services of the Company Secretary, who is responsible to ensure that the Board meeting procedures are followed and the applicable statutory and regulatory requirements are complied with. 3.0 BOARD COMMITTEES The Board of Directors delegates specific responsibilities to the respective Committees of the Board namely the Audit Committee, Nomination Committee, Remuneration Committee and Risk Management Committee in order to enhance business and corporate efficiency and effectiveness. The Chairman of the respective Committees will brief the Board on the matters discussed at the Committee meetings and minutes of these meetings are circulated to the full Board. 3.1 Audit Committee The Audit Committee s composition, duties and responsibilities, terms of reference and activities are set out on pages 18 to 23 of this Annual Report. annual report

13 Corporate Governance Statement 3.0 BOARD COMMITTEES 3.2 Nomination Committee The Board has established a Nomination Committee, consisting of two (2) Directors who are Independent Non-Executive Directors of the Company. This Committee is responsible for making recommendations to the Board on the optimum size of the Board and proposing new nominees to the Board. The Committee shall also assess the performance of the Directors of the Company by annually reviewing the profile of the required skills and attributes to ensure that the Board has an appropriate balance of expertise and ability. In addition, the Board will assess its own effectiveness as a whole and the contribution of each Director on an annual basis. The members of the Nomination Committee during the financial year are as follows:- Chairman : Mr. Edmond Cheah Swee Leng Senior Independent Non-Executive Director Member : Mr. Toh Seng Thong Independent Non-Executive Director The Nomination Committee may meet at least once a year or more frequently as deemed necessary. During the financial year ended, the Committee had one (1) meeting and reviewed the following matters:- the effectiveness of the board as a whole and of the committees of the Board and the contribution and performance of each individual Director; the independence of the independent Directors; and the Directors who are subject to retirement by rotation at the forthcoming Annual General Meeting ( AGM ), and are eligible for re-election. The Board opts to deviate from Recommendation 3.2 of the Code which states that the tenure of an independent Director should not exceed a cumulative term of nine (9) years and upon completion of the nine (9) years, an independent Director may continue to serve in the Board subject to the Director s re-designation as a non-independent Director. The Board is of the view that even though the tenures of Mr. Edmond Cheah Swee Leng and Mr. Toh Seng Thong have exceeded nine (9) years, they are able to exercise their independent judgment in facilitating decision processes of the Company, and so they can continue to be designated as independent Directors. Any Director appointed during the year is required under the Company s Articles of Association to retire and seek re-election by the shareholders at the following AGM immediately after their appointment. The Articles also require that one-third of the Directors including the Managing Director retire by rotation and seek re-election at each AGM and that each Director shall submit himself/herself for re-election at least once in every three (3) years. The Directors to retire from office at the forthcoming AGM are Mr. Toh Seng Thong and Mr. Edmond Cheah Swee Leng. While the Nomination Committee and the Board have not established a policy formalizing their approach to boardroom diversity or set any target on gender diversity, the current composition of the Board with two (2) female directors, i.e. Dato Dr. Norraesah Binti Haji Mohamad and Ms. Kwek Siew Leng, serves well to Recommendation 2.2 of the Code. time Commitment and Protocol for accepting new directorships The appointment of a new Director or Managing Director is a matter for consideration and decision by the full Board upon an appropriate recommendation from the Nomination Committee. On the appointment of a new Director, the new Director is required to commit sufficient time to attend to the Company s matters before accepting his appointment to the Board. Directors are required to notify the Chairman before accepting any new directorship and to indicate the time expected to be spent on the new appointment. Any Board member shall not hold more than five (5) directorships in listed companies at any one time. 12 ADVENTA BERHAD M

14 Corporate Governance Statement 3.0 BOARD COMMITTEES 3.2 Nomination Committee directors Training All the Board members have attended the Mandatory Accreditation Programme as required by the MMLR. In addition, during the financial year under review, all Directors were also advised of developments or changes to relevant laws and regulatory requirements and suitable training and education programmes were identified for their participation from time to time. Management briefings during Board and Audit Committee meetings on various operational, technical and corporate matters were also aimed at ensuring that Directors are well versed with the knowledge of the Group s business and affairs in enabling them to make meaningful decisions. The Directors of the Company have also attended various courses and seminars on various subject matters such as financial reporting, taxation, capital markets and investments and other business related programmes to further enhance their business acumen and knowledge in executing their duties as Directors. The Board is also encouraged to attend various training programmes necessary to ensure that they are kept abreast on various issues facing the changing business environment within which the Group operates. 3.3 Remuneration Committee In compliance with the Code, the Remuneration Committee was set up with clearly defined terms of reference comprising two (2) Independent Non-Executive Directors and one (1) Managing Director, as follows:- Chairman : Mr. Edmond Cheah Swee Leng Senior Independent Non-Executive Director Members : Mr. Toh Seng Thong Independent Non-Executive Director Mr. Low Chin Guan Managing Director The primary function of the Remuneration Committee is to recommend to the Board on the remuneration packages and other terms of employment of the Executive Directors. The determination of the remuneration for the Non-Executive Directors will be a matter of the Board as a whole with the Director concerned abstaining from deliberation and voting decision in respect of his individual remuneration package. The Remuneration Committee may meet at least once a year or more frequently as deemed necessary. During the financial year ended, the Committee had two (2) meetings. details of the Directors Remuneration The aggregate Directors remuneration paid or payable or otherwise made to all Directors of the Company who served during the financial year are shown as follows:- Other Fees Salaries Emoluments Total Category (RM) (RM) (RM) (RM) Executive Directors 51, , ,420 1,028,260 Non-Executive Directors 174, ,960 The number of Directors whose total remuneration falls within the following bands is as follows:- Range of Remuneration Executive Directors Non-Executive Directors RM50,001 RM100,000-3 RM300,001 RM350, RM700,001 RM750, annual report

15 Corporate Governance Statement 4.0 INTERNAL CONTROL AND RISK MANAGEMENT During the year, the Company established a Risk Management Committee ( RMC ) to oversee the risk management function, determine the risk areas and develop a risk register for the Group. With the assistance of the outsourced Internal Auditors, PKF Advisory Sdn. Bhd. ( PKF ), the Company developed its Risk Management Policy and Procedure Document with an embedded Enterprise Risk Management ( ERM ) framework. The ERM framework is designed to:- establish the context for an embedded ERM framework within the Group; formalize the ERM functions across the Group; sensitize staff more strongly to risk identification, measurement, control, ongoing monitoring, responsibilities and accountabilities; coordinate and standardize the understanding and application of ERM within the Group; and prove compliance by the Board of the Company with its organizational obligations and duties of care and diligence in accordance with the Code via a structured documentation system. The RMC comprises the following members:- Chairperson : Ms. Kwek Siew Leng Members : Mr. Daniel Peh : Mr. Choy Wah Wei : Mr. Robert Hill : Ms. Sharon Chia The Board acknowledges that it is responsible for maintaining a sound system of internal controls which provides reasonable assessment of effective and efficient operations, internal financial controls and compliance with laws and regulations as well as with internal procedures and guidelines. The Internal Control Statement is set out on pages 24 to 25 of this Annual Report. 5.0 RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS The Company recognises the importance of keeping shareholders and investors informed of the Group s business and corporate developments. Such information is disseminated via the Company s annual reports, circulars to shareholders, quarterly financial results, press releases and various announcements made from time to time. The Policy on Corporate Communications and Disclosure adopted by the Company is to ensure that the Company has in place efficient procedures for the management of information which at the same time, will promote accountability in relation to the disclosure of material information as well as to build good investor relations with the investing public that inspires trust and confidence. During the year, the Managing Director and Executive Director have briefed institutional investors, fund managers and analysts to keep them updated on the Group s performance, business expansion plans and other matters related to shareholders interest. The Group maintains a website at where shareholders as well as members of the public are invited to access the latest information on the Group. Alternatively, they may obtain the Group s latest Annual Report and announcements via the Bursa Securities website at The Company will upload the internal corporate policies in the Corporate Governance section of the Company s website in due course. The AGM and Extraordinary General Meeting remains the principal forum for dialogue with shareholders where they may seek clarifications on the Group s businesses. Shareholders are encouraged to meet and communicate with the Board at the AGM and to vote on all resolutions. The Board will respond to any questions raised during the meeting to their best ability and knowledge to do so. 14 ADVENTA BERHAD M

16 Corporate Governance Statement 5.0 RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS The Board supports the use of poll votes to ensure a fair voting process. At the Tenth AGM held last year, the Chairman reminded the attending shareholders of their right to demand for poll voting. Nonetheless, no request for poll voting was received during the AGM. The Board would consider employing electronic means for poll votes for substantive resolutions in future general meetings. 6.0 ACCOUNTABILITY AND AUDIT Financial Reporting In presenting the annual audited financial statements and quarterly announcement of results to shareholders, the Directors aim to present a balanced and understandable assessment of the Group s position and prospects. The Audit Committee assists the Board by reviewing the information to be disclosed in the financial statements, to ensure completeness, accuracy, adequacy and compliance with applicable financial reporting standards. The composition, summary of activities and terms of reference of the Audit Committee can be found in the Audit Committee Report on pages 18 to 23 of this Annual Report. The Audit Committee has obtained confirmation from the External Auditors that they are independent in accordance with the By-laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants, however no specific policies and procedures have been formulated to assess the suitability and independence of the External Auditors. The Statement of Directors Responsibility in respect of the Audited Financial Statements pursuant to paragraph 15.26(a) of the MMLR and pursuant to the Statement of Directors Responsibility of the Companies Act 1965 is set out on page 26 of this Annual Report. Relationship with the Auditors Through the Audit Committee, the Company has established a transparent and appropriate relationship with the Group s External Auditors. From time to time, the Auditors highlighted to the Audit Committee and the Board on matters that require the Board s attention. The functions of the Audit Committee and its relations with the Auditors are set out on pages 18 to 23 of this Annual Report. annual report

17 Corporate Governance Statement OTHER INFORMATION PURSUANT TO THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD 1. Utilisation of Proceeds The total gross proceeds of RM61.11 million from the disposal of the Company s manufacturing business after the related distribution (as set out in Note 32(a) on page 97 of this Annual Report) have been utilised in the following manner: Purpose Estimated time frame for utilisation from completion of the disposal Amount Amount utilised as at Balance not utilised as at RM 000 RM 000 RM 000 Payment for the purchase consideration of acquisition of Electron Beam Sdn. Bhd. Within 1 month 9,000 9,000 - Working capital for Sun Healthcare (M) Sdn. Bhd. Within 12 months 12,000 12,000 - Working capital for Electron Beam Sdn. Bhd. Within 12 months 5,000 5,000 - Working capital for Lucenxia (M) Sdn. Bhd. Within 24 months 20,000 11,222 8,778 Future business expansion opportunities Within 24 months 12,614-12,614 Estimated expenses in relation to the Proposals Within 1 month 2,500 2, Recurrent Related Party Transactions of Revenue Nature 61,114 39,722 21,392 At the Annual General Meeting held on 29 April 2013, the Company obtained a Shareholders Mandate to allow the Group to enter into recurrent related party transactions of a revenue or trading nature. In accordance with Section of Practice Note 12 of the Bursa Securities Berhad Listing Requirements, the details of recurrent related party transactions conducted pursuant to the Shareholders Mandate are disclosed as follows: Related Party Interest Director/ Interested Major Shareholder Nature of Transaction Value of Transactions from 5th April 2013 up to 28th February 2014 (RM 000) Aspion Group Mr Low Chin Guan (a) Purchases of gloves from the Aspion Group (b) Provision of sterilisation and warehouse and handling services to the Aspion Group (c) Sales of non-glove products to the Aspion Group 2,915 5, ADVENTA BERHAD M

18 Corporate Governance Statement 3. Share Buy-Back The Company did not purchase any of its own shares during the financial year under review. 4. Depository Receipt Programme The Company did not sponsor any depository receipt programme during the financial year under review. 5. Imposition of Sanctions/Penalties There were no sanctions or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year under review. 6. Non-Audit Fees During the financial year under review, the Group s non-audit fees paid or payable to the External Auditors amounted to RM39, Variation in Results There was no material variance between the results of the financial year and the unaudited results previously announced. The Company did not make any release on any profit estimate, forecast or projections for the financial year. 8. Profit Guarantees There were no profit guarantees given by the Company during the financial year under review. 9. Material Contracts Involving Directors and Major Shareholders There were no material contracts involving the Company and its subsidiaries with directors and/or major shareholders of the Company either still subsisting at the end of the financial year ended or entered into since the end of the previous financial year. 10. Contracts Relating to Loans There were no material contracts relating to loans entered into by the Company involving Directors and/or substantial shareholders. 11. Options, Warrants or Covertible Securities The Company did not issue any options, warrants or convertible securities during the year under review. annual report

19 Audit Committee Report INTRODUCTION The Board of Directors of the Company (the Board ) is pleased to present the report of the Audit Committee for the financial year ended. A. MEMBERSHIP Chairman : Mr. Toh Seng Thong Members : Mr. Edmond Cheah Swee Leng Dato Dr. Norraesah Binti Haji Mohamad Independent Non-Executive Director Senior Independent Non-Executive Director Independent Non-Executive Director B. TERMS OF REFERENCE 1. Composition of Members The Board shall appoint the Audit Committee members from amongst themselves, comprising no fewer than three (3) non-executive directors. The majority of the Audit Committee members shall be independent directors. In this respect, the Board adopts the definition of independent director as defined under Bursa Malaysia Securities Berhad Main Market Listing Requirements ( MMLR ). All members of the Audit Committee shall be financially literate and at least one (1) member of the Audit Committee must:- (a) (b) be a member of the Malaysian Institute of Accountants ( MIA ); or if he is not a member of the MIA, he must have at least three (3) years of working experience and: i. he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or ii. he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or (c) fulfill such other requirements as prescribed or approved by Bursa Securities. No alternate director of the Board shall be appointed as a member of the Audit Committee. The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every three (3) years to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference. retirement and Resignation If a member of the Audit Committee resigns, dies, or for any reason ceases to be a member resulting in non-compliance with the composition criteria as stated in paragraph 1 above, the Board shall within three (3) months of the event appoint such number of the new members as may be required to fill the vacancy. 2. Chairman The members of the Audit Committee shall elect a Chairman from amongst their number who shall be an independent director. In the absence of the Chairman of the Audit Committee, the other members of the Audit Committee shall amongst themselves elect a Chairman who must be an independent director to chair the meeting. 18 ADVENTA BERHAD M

20 Audit Committee Report B. TERMS OF REFERENCE 3. Secretary The Company Secretary shall be the Secretary of the Audit Committee and as a reporting procedure the minutes shall be circulated to all members of the Board. 4. Meetings The Audit Committee shall meet regularly, with due notice of issues to be discussed, and shall record its conclusions in discharging its duties and responsibilities. In addition, the Chairman may call for additional meetings at anytime at the Chairman s discretion. Upon the request of the External Auditors or the Internal Auditors (if any), the Chairman of the Audit Committee shall convene a meeting of the Audit Committee to consider any matter the auditors believe should be brought to the attention of the directors or shareholders. Notice of the Audit Committee meetings shall be given to all the Audit Committee members unless the Audit Committee waives such requirement. The Chairman of the Audit Committee shall engage on a continuous basis with senior management, such as the Chairman, the Chief Executive Officer, the Finance Director, the head of internal audit and the External Auditors in order to be kept informed of matters affecting the Company. The Finance Director, the head of internal audit and a representative of the External Auditors should normally attend meetings. Other Board members and employees may attend meetings upon the invitation of the Audit Committee. The Audit Committee shall be able to convene meetings with the External Auditors, the Internal Auditors, or both, without executive Board members or employees present whenever deemed necessary and at least twice a year with the External Auditors. Questions arising at any meeting of the Audit Committee shall be decided by a majority of votes of the members present, and in the case of equality of votes, the Chairman of the Audit Committee shall have a second or casting vote. 5. Minutes Minutes of each meeting shall be kept at the registered office and distributed to each member of the Audit Committee and also to the other members of the Board. The Audit Committee shall report on each meeting to the Board. The minutes of the Audit Committee meeting shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting. 6. Quorum The quorum for the Audit Committee meeting shall be the majority of members present whom must be independent directors. annual report

21 Audit Committee Report B. TERMS OF REFERENCE 7. Objectives The principal objectives of the Audit Committee are to assist the Board in discharging its statutory duties and responsibilities relating to accounting and reporting practices of the holding company and each of its subsidiaries. In addition, the Audit Committee shall: (a) (b) (c) (d) evaluate the quality of the audits performed by the Internal and External Auditors; provide assurance that the financial information presented by management is relevant, reliable and timely; oversee compliance with laws and regulations and observance of proper codes of conduct; and determine the quality, adequacy and effectiveness of the Group s control environment. 8. Authority The Audit Committee shall, in accordance with a procedure to be determined by the Board and at the expense of the Company, (a) (b) (c) (d) (e) have explicit authority to investigate any matter within its terms of reference, the resources to do so, and full access to information. All employees shall be directed to co-operate as requested by members of the Audit Committee; Have full and unlimited/unrestricted access to all information and documents/resources which are required to perform its duties as well as to the Internal and External Auditors and senior management of the Company and Group; obtain independent professional or other advice and to invite outsiders with relevant experience to attend, if necessary; have direct communication channels with the External Auditors and person(s) carrying out the internal audit function or activity (if any); and where the Audit Committee is of the view that the matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the MMLR, the Audit Committee shall promptly report such matter to Bursa Securities. 9. Duties and Responsibilities The duties and responsibilities of the Audit Committee are as follows:- (a) (b) (c) To consider the appointment of the External Auditors, the audit fee and any question of resignation or dismissal, any letter of resignation from the External Auditors and whether there is reason (supported by grounds) to believe that the External Auditors are not suitable for re-appointment before making recommendations to the Board of Directors and recommend the nomination of a person or persons as External Auditors; To discuss with the External Auditors before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved; To review with the External Auditors his evaluation of the system of internal controls and his audit report; 20 ADVENTA BERHAD M

22 Audit Committee Report B. TERMS OF REFERENCE 9. Duties and Responsibilities The duties and responsibilities of the Audit Committee are as follows:- (d) To review the quarterly and year-end financial statements of the Board, focusing particularly on: any change in accounting policies and practices; significant adjustments arising from the audit; the going concern assumption; and compliance with accounting standards and other legal requirements. (e) (f) (g) (h) To discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss (in the absence of management, where necessary); To review the External Auditors management letter and management s response; To review the adequacy and effectiveness of risk management, internal control and governance systems relating to the accounting and reporting practices of the Company; To do the following, in relation to the internal audit function: ensure that the internal audit function is independent of the activities it audits and the Internal Auditors shall report directly to the Audit Committee. The head of internal audit shall be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control and governance processes within the Company; review the adequacy of the scope, functions and competency and resources of the internal audit function, and that it has the necessary authority to carry out its work; 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; and take cognizance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his/her reasons for resigning. (i) (j) (k) (l) (m) (n) (o) (p) To consider 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; To report its findings on the financial and management performance and other material matters to the Board; To consider the major findings of internal investigations and management s response; To verify the allocation of employees share option scheme ( ESOS ) in compliance with the criteria as stipulated in the by-laws of ESOS of the Company, if any; To determine the remit of the internal audit function; To establish policies governing the circumstances under which contracts for the provision of non-audit services can be entered into and procedures that must be followed by the External Auditors; To consider other topics as defined by the Board; and To consider and examine such other matters as the Audit Committee considers appropriate. annual report