ADVENTA BERHAD ( M) ANNUAL REPORT annual report 2014 for financial year ended 31 October 2014

Transcription

1 ADVENTA BERHAD ( M) ANNUAL REPORT 2014 annual report 2014 for financial year ended 31 October 2014

2 contents Corporate Information Group Corporate Structure Chairman & Managing Director s Statement Directors Profiles Corporate Governance Statement Audit Committee Report Statement on Risk Management and Internal Control Responsibility Statement by the Board of Directors Financial Statements List of Properties Statistics of Shareholdings Notice of Twelfth Annual General Meeting Location Map to AGM 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 REGISTERED OFFICE 1, Jalan 8, Pengkalan Chepa 2 Industrial Zone Kota Bharu, Kelantan Tel : Fax : AUDIT COMMITTEE 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 ) REGISTRAR 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 sterilisation, warehousing & handling services 100% Lucenxia (M) Sdn. Bhd. Home dialysis treatment 100% PTM Progress Trading & Marketing Sdn. Bhd. Provision of storage and warehousing services annual report

5 Chairman & Managing Director s Statement Ladies and Gentlemen, I would like to give you an overview of the Company and its performance this past year and what we can all look forward to in the future. The Company has grown stronger since its spin off from the manufacturing business and its move into services for the healthcare industry. Revenue grew 27% over last year, exceeding the expectation of 20% compound annual growth rate ( CAGR ). In the past year, we made an earnings before interest, taxes, depreciation, and amortisation ( EBITDA ) of RM8.2 million compared to RM7.5 million in 2013 (after deducting one-off income from divestment). One of the reasons for the divestment is that we could not combine service and manufacturing effectively as both sectors require vastly differing mindsets and strategic directions. It was then that the Board decided that as a middle-income nation with fast growing disposable incomes, medical and healthcare will effectively become the main areas of immediate growth. Serving this industry in a wider scope will create a new synergy with the healthcare community, driving cost and values across all areas. At the forefront of this is Sun Healthcare (M) Sdn. Bhd. ( Sun Healthcare ), a small niche agency conceived three years ago, which is now rapidly expanding into supply chain logistics and hospital supplies. In 2013 Sun Healthcare grew 30% and in 2014 we made a further 33% increase in revenue. This represents that we are on the right path and gaining momentum. Continuous new product launches and customer centric services are pushing growth in all sectors in the company. The recent unexpected severe depreciation of the Ringgit poses a strong headwind to our earnings as many products are sourced in US Dollars. A move to localise import pricings to Ringgit will ease the loss of earnings. 4 ADVENTA BERHAD M

6 Chairman & Managing Director s Statement Electron Beam Sdn. Bhd., the sterilisation arm of the Company, has increased revenue by 60% from Most of its growth came from the overseas importsterile-export business. This year will see the addition of another sterilisation modality to the company, offering its customers a wider choice of processing and cost. Targeted growth of 20% last year was achieved and is expected to be maintained this year. We are pleased to say that our shareholders can look forward to the prospects of Lucenxia (M) Sdn. Bhd. ( Lucenxia ), the pioneering home dialysis business of the Group, which is in its final stage of trials across the country. Barring unexpected circumstances, the highly anticipated commercial rollout is planned this year, transforming the company from a startup to an enterprise, serving chronic kidney failure patients throughout Malaysia. Strong positive reviews and feedbacks indicate a smooth transition from trial to commercialised services. Lucenxia is partnering the Ministry of Health and other organisations in providing quality home dialysis care and treatment to potentially all qualified patients in the nation, a first here and also regionally. We see 2015 as a period for high potential where the Company will see its investments in technology and innovative services translating into steady revenue growth in a conservative industry. We are also looking forward to our new pharmaceutical division and excited for this new segment for the Company. Thank you for sharing our vision and giving us a chance to make things better for all. 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 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 Ladies and Gentlemen, the current tumultuous economic climate in the region is challenging and the Company with its staffs is turning these into opportunities through new ideas and innovations, discarding traditional business models and having the dogged spirit to make it happen. A new culture is forming within the Company, driven by the passion-driven younger generation of our time. Having seen the significant impact of a strong US Dollar on the price of imports, our companies are already two years into making import substitutions available to our customers, enhancing local supplies with our technical inputs. Through these efforts, we are able to transfer cost advantages to our hospital partners. annual report

7 Directors Profiles 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 Managing EDMOND CHEAH SWEE LENG Chairman, Senior Independent Non-Executive Director LOW CHIN GUAN Director Mr. Edmond Cheah Swee Leng, aged 60, a Malaysian, was appointed to the Board of Adventa Berhad on 9 August 2004 and is presently the Chairman of the Company. His last re-election as a director was on 24 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 31 October 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 55, a Malaysian, was appointed to the Board of Adventa Berhad on 12 April 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 the 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 two (2) out of four (4) Board Meetings held during the financial year ended 31 October 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 03Executive Director Ms. Kwek Siew Leng, aged 49, a Malaysian, was appointed to the Board of Adventa Berhad on 12 April 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. annual report

9 Directors Profiles Her prior employment in public practice includes stints in statutory and regulatory reporting, financial planning, budgeting and forecasting, taxation, managerial skills as well as system development in various fields. 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 31 October 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. 04 Toh Seng Thong Independent Non-Executive Director Mr. Toh Seng Thong, aged 56, a Malaysian, was appointed to the Board of Adventa Berhad on 10 May His last re-election as a director was on 24 April 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 26 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 31 October 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. 05 Dato Dr. Norraesah Binti Haji Mohamad Independent Non-Executive Director Dato Dr. Norraesah Binti Haji Mohamad, aged 67, 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 43 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 three (3) out of four (4) Board Meetings held during the financial year ended 31 October 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. 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 31 October ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT 1.1. Clear functions of the Board and Management The Group acknowledges the pivotal role played by the Board in the stewardship of its direction and operations, and ultimately the enhancement of long-term shareholders value. To fulfill this role, the Board is responsible for the overall corporate governance of the Group, including its strategic direction, establishing goals for management and monitoring the achievement of these goals. The Board has delegated the authority to achieve the corporate objectives to the Managing Director. The Managing Director remains accountable to the Board for the authority that is delegated to him, and for the performance of the Group. The Board monitors the decisions and actions of the Managing Director and the performance of the Group to gain assurance that progress is being made towards the corporate objectives Duties and responsibilities The Board has overall responsibility for corporate governance, strategic direction, formulation of policies and overseeing the investment and business of the Company. The Board s responsibilities include: (a) (b) (c) (d) (e) (f) (g) (h) (i) 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; 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 annual report

11 Corporate Governance Statement ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT 1.2. Duties and responsibilities (j) 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 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. The Board Committees are entrusted with specific responsibilities to oversee the Company s affairs, in accordance with their respective Terms of References and operating procedures and the Board receives reports of their proceedings and deliberations. The Chairman of the respective committees will report to the Board the outcome of these meetings and such reports are incorporated into the Board papers. These committees were formed in order to enhance business and operational efficiency as well as efficacy. The Board remains fully responsible for the direction and control of the Company and of the Group. 1.3 Directors Code of Business Conducts and Ethics Code of Ethics 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. Whistle Blowing As part of the Company s continuous efforts to ensure that good corporate governance practices are being adopted, the Company has established Whistle Blowing Policy to provide a clear line of communication and reporting of concerns for employees at all levels. 1.4 Strategies promoting sustainability The Company seeks to be a good corporate citizen in everything that it does. In promoting the Company s sustainability and Corporate Social Responsibility ( 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 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT 1.4 Strategies promoting sustainability 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 socially inclusive policies and 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 to disadvantaged and vulnerable groups; promoting engagement between our staff and the community; supporting local community groups and charities such as the Malaysian Society of Nephrology and hospitals, 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 the Company s contribution to climate change. 1.5 Access to information and advices 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. 1.6 Qualified and competent Company Secretaries 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. The Board is regularly updated and advised by the Company Secretaries who are qualified, experienced and competent on new statutory and regulatory requirements, and the resultant implications to the Company and Directors in relation to their duties and responsibilities. The Company Secretaries attend all Board and Board Committees meetings and ensure that meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are taken and maintained accordingly. The removal of Company Secretaries, if any, is a matter for the Board, as a whole, to decide. Every Director has unhindered access to the advice and services of the Company Secretaries. annual report

13 Corporate Governance Statement ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT 1.7 Board Charter The Board has adopted a Board Charter. The Board will periodically review this Board Charter from time to time to ensure 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. 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. STRENGTHEN COMPOSITION OF THE BOARD 2.1 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 2.2 Develop, maintain and review criteria for recruitment processes and annual assessment of Directors The Nomination Committee may meet at least once a year or more frequently as deemed necessary. During the financial year ended 31 October 2014, the Committee had one (1) meeting and details of attendance of each committee member is as follows: Name of Directors No. of meetings attended/held % Mr. Edmond Cheah Swee Leng 1/1 100 Mr. Toh Seng Thong 1/1 100 Appointment Process 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 Nomination Committee is also responsible for making recommendations to the Board on the suitability of candidates nominated for appointment to the Board and Board Committees. A formal and transparent procedures for appointment of directors was set out in the Term of Reference of Nomination Committee. The decision as to who should be appointed is the responsibility of the full Board after considering the recommendations of the Committee. The Company Secretaries will ensure that all appointments are properly made; all the necessary information is obtained as well as all legal and regulatory obligations are met. 12 ADVENTA BERHAD M

14 Corporate Governance Statement STRENGTHEN COMPOSITION OF THE BOARD 2.2 Develop, maintain and review criteria for recruitment processes and annual assessment of Directors Re-election of 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 Annual General Meeting ( 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 Dato Dr. Norraesah Binti Haji Mohamad and Ms. Kwek Siew Leng. Board Evaluation The Board regularly evaluates its performance and the governance processes that support the Board s work with the aim of improving individual contributions, effectiveness of the Board and its committees and the Group s performance. During the financial year under review, the Nomination Committee had reviewed:- 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. Gender Diversity While the Nomination Committee and the Board have not established a policy formalizing its approach to boardroom diversity or set any target on gender diversity policy, 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. 2.3 Remuneration policies and procedures Remuneration committee The members of the Remuneration Committee shall comprise wholly or mainly of Non-Executive Directors. The current members of the Remuneration Committee are: Chairman : Mr. Edmond Cheah Swee Leng Members : Mr. Toh Seng Thong Mr. Low Chin Guan Senior Independent Non-Executive Director Independent Non-Executive Director 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 31 October 2014, the Committee had one (1) meeting and details of attendance of each Committee member is as follows: Name of Directors No. of meetings attended/held % Mr. Edmond Cheah Swee Leng 1/1 100 Mr. Toh Seng Thong 1/1 100 Mr. Low Chin Guan 1/1 100 annual report

15 Corporate Governance Statement STRENGTHEN COMPOSITION OF THE BOARD 2.3 Remuneration policies and procedures 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:- Category Fees (RM) Salaries (RM) Other Emoluments (RM) Total (RM) Executive Directors 51, ,000 94, ,060 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 RM100,001 RM150, RM200,001 RM250, Audit Committee The Audit Committee s composition, duties & responsibilities, terms of reference and activities are set out on pages 22 to 27 of this Annual Report. REINFORCE INDEPENDENCE 3.1 Annual Assessment of Independence The Board recognises the importance of independence and objectivity in the decision-making process. The Independent Directors bring their respective knowledge and experience and provide independent judgement to the Board. The Board is committed in ensuring that Independent Directors are capable and willing to make decisions in the best interests of the Company and the shareholders free from interest or influence and are independent of the Management. The Independent Directors namely, Mr Edmond Cheah Swee Leng, Mr Toh Seng Thong and Dato Dr. Norraesah Binti Haji Mohamad fulfilled the criteria of Independence as prescribed under the Main Market Listing Requirements ( MMLR ). The key criteria for the appointment of an Independent Director is one who is not a member of the management (a Non-Executive Director) and who is free of any business or other relationship which could interfere with the exercise of independent judgement or the ability to act in the best interests of the Company. The Board composition complies with the MMLR which requires that at least two (2) Directors or one-third (1/3) of the Board of the Company, whichever is the higher, to be Independent Directors. 14 ADVENTA BERHAD M

16 Corporate Governance Statement REINFORCE INDEPENDENCE 3.2 Tenure of Independence Directors 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. 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 tenure of Mr. Edmond Cheah Swee Leng, Mr. Toh Seng Thong and Dato Dr. Norraesah Binti Haji Mohamad has exceeded nine (9) years, they are able to exercise their independent judgment in facilitating decision processes of the Company. 3.3 Separation of position of the Chairman and Managing Director There is a clear division of responsibility between the Chairman and the Group Managing Director to ensure that there is a balance of power and authority. The roles of the Chairman and the Group Managing Director are separated and clearly defined. The Chairman is responsible for ensuring Board effectiveness and conduct whilst the Group Managing Director has overall responsibilities over the Group s operating units, organisational effectiveness and implementation of Board policies and decisions. 3.4 Board composition and 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 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. 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. FORESTERING COMMITMENT 4.1 Time Commitment The Board meets on a quarterly basis and additionally as required. The general agenda of the meetings includes discussion over minutes of previous meetings, quarterly financial results of the Group and any other issues requiring the Board s deliberation and approval. The agenda for each Board meeting is circulated to all the Directors for their perusal prior to the convening of each meeting to enable Directors to obtain further clarifications/explanations prior to the meeting to ensure smooth proceeding of each meeting. The proceedings and resolutions reached at each Board meeting are minuted and signed by Chairman of the meeting. Besides Board meetings, the Board exercises control on matters that require Board s deliberation and approval through circulation of Directors Resolutions. The Board held four (4) meetings during the financial year. annual report

17 Corporate Governance Statement FORESTERING COMMITMENT 4.1 Time Commitment Record of each Director s meeting attendance during the year under review is set out below:- Name of Directors No. of meetings attended/held % Mr. Edmond Cheah Swee Leng 4/4 100 Mr. Low Chin Guan 2/4 50 Ms. Kwek Siew Leng 4/4 100 Mr. Toh Seng Thong 4/4 100 Dato Dr. Norraesah Binti Haji Mohamad 3/4 75 Procedures are in place for Directors to seek both independent professional advice at the Company s expense and have access to the Company Secretaries in order to fulfill their duties and specific responsibilities as enumerated in the Board Charter. 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. 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. 4.2 Directors Training All the Board members have attended the Mandatory Accreditation Programme ( MAP ) 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. During the financial year under review, the training seminars attended by the Directors include: Ultimate Budget 2014 held on 8 November 2013; National Tax Conference 2014 held on 14 November 2013; Monthly Deduction as Final Tax held on 11 March 2014; 2014 Audit Committee Conference held on 20 March 2014; GST Intermediate held on 24 April 2014; Roles & Responsibilities Of Directors Under The Listing Requirements held on 5 May 2014; Updates On Corporate Governance Guide 2nd Edition held on 5 May 2014; GST Master held on 17 to 20 September 2014; and Malaysia Trade & Export Finance Conference 2014 held on 11 November ADVENTA BERHAD M

18 Corporate Governance Statement UPHOLD INTERGRITY IN FINANCIAL REPORTING 5.1 Compliance with applicable financial reporting standards 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 22 to 27 of this Annual Report. 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 30 of this Annual Report. 5.2 Assessment of suitability and independence of external auditors 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 External 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 22 to 27 of this Annual Report. The External Auditors provide mainly audit-related services to the Company. Due to the familiarity of the Company, the external auditors also undertake certain non-audit services such as regulatory reviews and reporting and other services. RECOGNISE AND MANAGE RISKS 6.1 Sound framework to manage risks 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. In addition, 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 annual report

19 Corporate Governance Statement RECOGNISE AND MANAGE RISKS 6.1 Sound framework to manage risks 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 Statement on Risk Management and Internal Control is set out on page 28 to 29 of this Annual Report. 6.2 Internal audit function The Company outsourced its internal audit function to PKF Advisory Sdn. Bhd, whom reports directly to the Audit Committee. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE 7.1 Corporate Disclosure Policy Information Disclosure The Board has in place a policy to ensure disclosure of information is in accordance with the disclosure requirements under the MMLR and other applicable laws. 7.2 Leverage on information technology for effective dissemination of information 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 at the Company s website in due course. 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. Shareholders and other interested parties may contact the Executive Director, to address any concerns by writing or via telephone or facsimile as follows:- Address : Adventa Berhad 1, Jalan 8, Pengkalan Chepa 2 Industrial Zone, Kota Bharu, Kelantan Darul Naim, Malaysia Tel : Fax : Website : 18 ADVENTA BERHAD M

20 Corporate Governance Statement STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS 8.1 Encourage shareholder participation at general meetings The Board fully recognises the rights of shareholders and encourages them to exercise of their rights at the Company s AGM. It has also been the Company s practice to send the Notice of the AGM and related papers to shareholders at least twenty-one (21) days before the meeting. The date, venue and time of these meetings are determined to provide the maximum opportunity for as many shareholders as possible to attend and participate either in person, by corporate representative or by proxy. 8.2 Encourage poll voting The Board supports the use of poll votes to ensure a fair voting process. At the Eleventh 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. 8.3 Communication with Shareholders and Investors The Company recognises the importance of keeping shareholders and investors informed of the Group s business and corporate developments. 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. 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. annual report

21 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 Proposed Disposal (after the Proposed Distribution) shall be utilised in the following manner: Purpose Estimated time frame for utilisation from completion of the Proposed Disposal Amount utilised as at Balance not utilised as at Reclassification Amount Amount RM 000 RM 000 RM 000 RM 000 Payment for the purchase consideration of acquisition of Electron Beam Sdn. Bhd. Working capital for Sun Healthcare (M) Sdn. Bhd. Working capital for Electron Beam Sdn. Bhd. Working capital for Lucenxia (M) Sdn. Bhd. Future business expansion opportunities Estimated expenses in relation to the Proposals Within 1 month 9,000-9,000 - Within 12 months 12,000-12,000 - Within 12 months 5,000-5,000 - Within 24 months 20,000 12,614# 28,470 4,144 Within 24 months 12,614 (12,614)# - - Within 1 month 2,500-2,500-61,114-56,970 4,144 # The funds allocated for future business expansion opportunities is re-allocated to Lucenxia (M) Sdn. Bhd. as working capital in view of the trials still in progress and further investment needed in patient care education and training into rural region. 2. Recurrent Related Party Transactions of Revenue Nature At the Annual General Meeting held on 24 April 2014, the Company obtained a Shareholders Mandate to allow the Group to enter into recurrent related party transactions of a revenue or trading nature. 20 ADVENTA BERHAD M

22 Corporate Governance Statement OTHER INFORMATION PURSUANT TO THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD 2. Recurrent Related Party Transactions of Revenue Nature In accordance with Section of Practice Note 12 of the Bursa Securities Berhad Listing Requirements, the detail 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 24 April 2014 up to 28 February 2015 (RM 000) Aspion Group Mr Low Chin Guan (a) Purchases of gloves from the Aspion Group 13,253 (b) Provision of sterilisation and warehouse and handling services to the Aspion Group 6,398 (c) Sales of non-gloves products to the Aspion Group 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 RM7, 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 the profit estimate, forecast or projections for the financial year. 8. Profit Guarantee There was no profit guarantee 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 major shareholders of the Company either still subsisting at the end of the financial year ended 31 October 2014 or entered into since the end of the previous financial year. 10. Contracts Relating to Loans There was 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